Energy Policy Act of 2004

        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4503 Received in Senate (RDS)]

2d Session
H. R. 4503

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

June 17, 2004

Received

_______________________________________________________________________

AN ACT

To enhance energy conservation and research and development, to provide
for security and diversity in the energy supply for the American
people, and for other purposes.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Energy Policy Act
of 2004''.
(b) Table of Contents.--The table of contents for this Act is as
follows:

Sec. 1. Short title; table of contents.
TITLE I--ENERGY EFFICIENCY

Subtitle A--Federal programs

Sec. 101. Energy and water saving measures in congressional buildings.
Sec. 102. Energy management requirements.
Sec. 103. Energy use measurement and accountability.
Sec. 104. Procurement of energy efficient products.
Sec. 105. Energy Savings Performance Contracts.
Sec. 106. Energy Savings Performance Contracts pilot program for
nonbuilding applications.
Sec. 107. Voluntary commitments to reduce industrial energy intensity.
Sec. 108. Advanced Building Efficiency Testbed.
Sec. 109. Federal building performance standards.
Sec. 110. Increased use of recovered mineral component in Federally
funded projects involving procurement of
cement or concrete.
Subtitle B--Energy assistance and State programs

Sec. 121. Low income home energy assistance program.
Sec. 122. Weatherization assistance.
Sec. 123. State energy programs.
Sec. 124. Energy efficient appliance rebate programs.
Sec. 125. Energy efficient public buildings.
Sec. 126. Low income community energy efficiency pilot program.
Subtitle C--Energy efficient products

Sec. 131. Energy Star Program.
Sec. 132. HVAC maintenance consumer education program.
Sec. 133. Energy conservation standards for additional products.
Sec. 134. Energy labeling.
Subtitle D--Public housing

Sec. 141. Capacity building for energy-efficient, affordable housing.
Sec. 142. Increase of cdbg public services cap for energy conservation
and efficiency activities.
Sec. 143. FHA mortgage insurance incentives for energy efficient
housing.
Sec. 144. Public housing capital fund.
Sec. 145. Grants for energy-conserving improvements for assisted
housing.
Sec. 146. North American Development Bank.
Sec. 147. Energy-efficient appliances.
Sec. 148. Energy efficiency standards.
Sec. 149. Energy strategy for HUD.
TITLE II--RENEWABLE ENERGY

Subtitle A--General provisions

Sec. 201. Assessment of renewable energy resources.
Sec. 202. Renewable energy production incentive.
Sec. 203. Federal purchase requirement.
Sec. 204. Insular areas energy security.
Sec. 205. Use of photovoltaic energy in public buildings.
Sec. 206. Grants to improve the commercial value of forest biomass for
electric energy, useful heat,
transportation fuels, petroleum-based
product substitutes, and other commercial
purposes.
Sec. 207. Biobased products.
Subtitle B--Geothermal energy

Sec. 211. Short title.
Sec. 212. Competitive lease sale requirements.
Sec. 213. Direct use.
Sec. 214. Royalties and near-term production incentives.
Sec. 215. Geothermal leasing and permitting on Federal lands.
Sec. 216. Review and report to Congress.
Sec. 217. Reimbursement for costs of NEPA analyses, documentation, and
studies.
Sec. 218. Assessment of Geothermal energy potential.
Sec. 219. Cooperative or Unit plans.
Sec. 220. Royalty on byproducts.
Sec. 221. Repeal of authorities of Secretary to readjust terms,
conditions, rentals, and royalties.
Sec. 222. Crediting of rental toward royalty.
Sec. 223. Lease duration and work commitment requirements.
Sec. 224. Advanced royalties required for suspension of production.
Sec. 225. Annual rental.
Sec. 226. Leasing and permitting on Federal lands withdrawn for
military purposes.
Sec. 227. Technical amendments.
Subtitle C--Hydroelectric

Part I--Alternative conditions

Sec. 231. Alternative conditions and fishways.
Part II--Additional hydropower

Sec. 241. Hydroelectric production incentives.
Sec. 242. Hydroelectric efficiency improvement.
Sec. 243. Small hydroelectric power projects.
Sec. 244. Increased hydroelectric generation at existing Federal
facilities.
Sec. 245. Shift of project loads to off-peak periods.
Sec. 246. Corps of Engineers hydropower operation and maintenance
funding.
Sec. 247. Limitation on certain charges assessed to the flint creek
project, Montana.
Sec. 248. Reinstatement and transfer.
TITLE III--OIL AND GAS

Subtitle A--Petroleum Reserve and home heating oil

Sec. 301. Permanent authority to operate the Strategic Petroleum
Reserve and other energy programs.
Sec. 302. National Oilheat Research Alliance.
Subtitle B--Production incentives

Sec. 311. Definition of Secretary.
Sec. 312. Program on oil and gas royalties in-kind.
Sec. 313. Marginal property production incentives.
Sec. 314. Incentives for natural gas production from deep wells in the
shallow waters of the Gulf of Mexico.
Sec. 315. Royalty Relief for deep water production.
Sec. 316. Alaska offshore royalty suspension.
Sec. 317. Oil and gas leasing in the National Petroleum Reserve in
Alaska.
Sec. 318. Orphaned, abandoned, or idled wells on Federal land.
Sec. 319. Combined hydrocarbon leasing.
Sec. 320. Liquified natural gas.
Sec. 321. Alternate energy-related uses on the outer Continental Shelf.
Sec. 322. Preservation of geological and geophysical data.
Sec. 323. Oil and gas lease acreage limitations.
Sec. 324. Assessment of dependence of State of Hawaii on oil.
Sec. 325. Deadline for decision on appeals of consistency determination
under the Coastal Zone Management Act of
1972.
Sec. 326. Reimbursement for costs of NEPA analyses, documentation, and
studies.
Sec. 327. Hydraulic fracturing.
Sec. 328. Oil and gas exploration and production defined.
Sec. 329. Outer Continental Shelf provisions.
Sec. 330. Appeals relating to pipeline construction or offshore mineral
development projects.
Sec. 331. Bilateral international oil supply agreements.
Sec. 332. Natural gas market reform.
Sec. 333. Natural gas market transparency.
Subtitle C--Access to Federal land

Sec. 341. Office of Federal Energy Project Coordination.
Sec. 342. Federal onshore oil and gas leasing and permitting practices.
Sec. 343. Management of Federal oil and gas leasing programs.
Sec. 344. Consultation regarding oil and gas leasing on public land.
Sec. 345. Estimates of oil and gas resources underlying onshore Federal
land.
Sec. 346. Compliance with Executive Order No. 13211; actions concerning
regulations that significantly affect
energy supply, distribution, or use.
Sec. 347. Pilot Project to improve Federal permit coordination.
Sec. 348. Deadline for consideration of applications for permits.
Sec. 349. Clarification of fair market rental value determinations for
public land and Forest Service rights-of-
way.
Sec. 350. Energy facility rights-of-way and corridors on Federal land.
Sec. 351. Consultation regarding energy rights-of-way on public land.
Sec. 352. Renewable energy on Federal land.
Sec. 353. Electricity transmission line right-of-way, cleveland
national forest and adjacent public land,
California.
Sec. 354. Sense of Congress regarding development of MINERALS under
Padre Island National Seashore.
Sec. 355. Encouraging prohibition of off-shore Drilling in the Great
Lakes.
Sec. 356. Finger Lakes National Forest withdrawal.
Sec. 357. Study on lease exchanges in the rocky mountain front.
Sec. 358. Federal coalbed methane regulation.
Sec. 359. Livingston parish mineral rights transfer.
Subtitle D--Alaska Natural Gas Pipeline

Sec. 371. Short title.
Sec. 372. Definitions.
Sec. 373. Issuance of certificate of public convenience and necessity.
Sec. 374. Environmental reviews.
Sec. 375. Pipeline expansion.
Sec. 376. Federal Coordinator.
Sec. 377. Judicial review.
Sec. 378. State jurisdiction over in-State delivery of natural gas.
Sec. 379. Study of alternative means of construction.
Sec. 380. Clarification of angta status and authorities.
Sec. 381. Sense of Congress concerning use of steel manufactured in
North America negotiation of a project
labor Agreement.
Sec. 382. Sense of Congress and study concerning participation by small
business concerns.
Sec. 383. Alaska pipeline construction training Program.
Sec. 384. Sense of Congress concerning natural gas demand.
Sec. 385. Sense of Congress concerning Alaskan ownership.
Sec. 386. Loan guarantees.
TITLE IV--COAL

Subtitle A--Clean Coal Power Initiative

Sec. 401. Authorization of appropriations.
Sec. 402. Project criteria.
Sec. 403. Report.
Sec. 404. Clean coal centers of excellence.
Subtitle B--Clean Power Projects

Sec. 411. Coal technology loan.
Sec. 412. Coal gasification.
Sec. 413. Integrated gasification combined cycle technology.
Sec. 414. Petroleum coke gasification.
Sec. 415. Integrated coal/renewable energy system.
Sec. 416. Electron scrubbing demonstration.
Subtitle C--Federal Coal Leases

Sec. 421. Repeal of the 160-acre limitation for coal leases.
Sec. 422. Mining plans.
Sec. 423. Payment of advance royalties under coal leases.
Sec. 424. Elimination of deadline for submission of coal lease
operation and reclamation plan.
Sec. 425. Amendment relating to financial assurances with respect to
bonus bids.
Sec. 426. Inventory requirement.
Sec. 427. Application of amendments.
Subtitle D--Coal and related programs

Sec. 441. Clean air coal program.
TITLE V--INDIAN ENERGY

Sec. 501. Short title.
Sec. 502. Office of Indian Energy Policy and Programs.
Sec. 503. Indian energy.
Sec. 504. Four corners transmission line project.
Sec. 505. Energy efficiency in federally assisted housing.
Sec. 506. Consultation with Indian tribes.
TITLE VI--NUCLEAR MATTERS

Subtitle A--Price-Anderson Act Amendments

Sec. 601. Short title.
Sec. 602. Extension of indemnification authority.
Sec. 603. Maximum assessment.
Sec. 604. Department of energy liability limit.
Sec. 605. Incidents outside the United States.
Sec. 606. Reports.
Sec. 607. Inflation adjustment.
Sec. 608. Treatment of modular reactors.
Sec. 609. Applicability.
Sec. 610. Prohibition on assumption by United States government of
liability for certain foreign incidents.
Sec. 611. Civil penalties.
Subtitle B--General Nuclear Matters

Sec. 621. Licenses.
Sec. 622. NRC training program.
Sec. 623. Cost recovery from government agencies.
Sec. 624. Elimination of pension offset.
Sec. 625. Antitrust review.
Sec. 626. Decommissioning.
Sec. 627. Limitation on legal fee reimbursement.
Sec. 628. Decommissioning pilot program.
Sec. 629. Report on feasibility of developing commercial nuclear energy
generation facilities at existing
Department of Energy sites.
Sec. 630. Uranium sales.
Sec. 631. Cooperative research and development and special
demonstration projects for the uranium
mining industry.
Sec. 632. Whistleblower protection.
Sec. 633. Medical isotope production.
Sec. 634. Fernald byproduct material.
Sec. 635. Safe disposal of greater-than-class c radioactive waste.
Sec. 636. Prohibition on nuclear exports to countries that sponsor
terrorism.
Sec. 637. Uranium enrichment facilities.
Sec. 638. National uranium stockpile.
Subtitle C--Advanced Reactor Hydrogen Cogeneration Project

Sec. 651. Project establishment.
Sec. 652. Project definition.
Sec. 653. Project management.
Sec. 654. Project requirements.
Sec. 655. Authorization of appropriations.
Subtitle D--Nuclear Security

Sec. 661. Nuclear facility threats.
Sec. 662. Fingerprinting for criminal history record checks.
Sec. 663. Use of firearms by security personnel of licensees and
certificate holders of the commission.
Sec. 664. Unauthorized introduction of dangerous weapons.
Sec. 665. Sabotage of nuclear facilities or fuel.
Sec. 666. Secure transfer of nuclear materials.
Sec. 667. Department of homeland security consultation.
Sec. 668. Authorization of appropriations.
TITLE VII--VEHICLES AND FUELS

Subtitle A--Existing programs

Sec. 701. Use of alternative fuels by dual-fueled vehicles.
Sec. 702. Neighborhood electric vehicles.
Sec. 703. Credits for medium and heavy duty dedicated vehicles.
Sec. 704. Incremental cost allocation.
Sec. 705. Alternative compliance and flexibility.
Sec. 706. Review of Energy Policy Act of 1992 programs.
Sec. 707. Report concerning compliance with alternative fueled vehicle
purchasing requirements.
Subtitle B--Hybrid vehicles, advanced vehicles, and fuel cell buses

Part I--Hybrid vehicles

Sec. 711. Hybrid vehicles.
Part II--Advanced vehicles

Sec. 721. Definitions.
Sec. 722. Pilot program.
Sec. 723. Reports to Congress.
Sec. 724. Authorization of appropriations.
Part III--Fuel cell buses

Sec. 731. Fuel cell transit bus demonstration.
Subtitle C--Clean school buses

Sec. 741. Definitions.
Sec. 742. Program for replacement of certain school buses with clean
school buses.
Sec. 743. Diesel retrofit program.
Sec. 744. Fuel cell school buses.
Subtitle D--Miscellaneous

Sec. 751. Railroad efficiency.
Sec. 752. Mobile emission reductions trading and crediting.
Sec. 753. Aviation fuel conservation and emissions.
Sec. 754. Diesel fueled vehicles.
Sec. 755. Conserve by Bicycling Program.
Sec. 756. Reduction of engine idling of heavy-duty vehicles.
Sec. 757. Biodiesel engine testing program.
Sec. 758. High occupancy vehicle exception.
Subtitle E--Automobile efficiency

Sec. 771. Authorization of appropriations for implementation and
enforcement of fuel economy standards.
Sec. 772. Revised considerations for decisions on maximum feasible
average fuel economy.
Sec. 773. Extension of maximum fuel economy increase for alternative
fueled vehicles.
Sec. 774. Study of feasibility and effects of reducing use of fuel for
automobiles.
TITLE VIII--HYDROGEN

Sec. 801. Definitions.
Sec. 802. Plan.
Sec. 803. Programs.
Sec. 804. Interagency task force.
Sec. 805. Advisory Committee.
Sec. 806. External review.
Sec. 807. Miscellaneous provisions.
Sec. 808. Savings clause.
Sec. 809. Authorization of appropriations.
TITLE IX--RESEARCH AND DEVELOPMENT

Sec. 901. Goals.
Sec. 902. Definitions.
Subtitle A--Energy Efficiency

Sec. 904. Energy efficiency.
Sec. 905. Next generation lighting initiative.
Sec. 906. National building performance initiative.
Sec. 907. Secondary electric vehicle battery use program.
Sec. 908. Energy efficiency science initiative.
Sec. 909. Electric motor control technology.
Sec. 910. Advanced energy technology transfer centers.
Subtitle B--Distributed Energy and Electric Energy Systems

Sec. 911. Distributed energy and electric energy systems.
Sec. 912. Hybrid distributed power systems.
Sec. 913. High power density industry program.
Sec. 914. Micro-cogeneration energy technology.
Sec. 915. Distributed energy technology demonstration program.
Sec. 916. Reciprocating power.
Subtitle C--Renewable energy

Sec. 918. Renewable energy.
Sec. 919. Bioenergy programs.
Sec. 920. Concentrating solar power research and development Program.
Sec. 921. Miscellaneous projects.
Sec. 922. Renewable energy in public buildings.
Sec. 923. Study of marine renewable energy options.
Subtitle D--Nuclear energy

Sec. 924. Nuclear energy.
Sec. 925. Nuclear energy research and development programs.
Sec. 926. Advanced fuel cycle Initiative.
Sec. 927. University nuclear science and engineering support.
Sec. 928. Security of reactor designs.
Sec. 929. Alternatives to industrial radioactive sources.
Sec. 930. Geological isolation of spent fuel.
Subtitle E--Fossil energy

Part I--Research programs

Sec. 931. Fossil energy.
Sec. 932. Oil and gas research programs.
Sec. 933. Technology transfer.
Sec. 934. Research and development for coal mining technologies.
Sec. 935. Coal and related technologies Program.
Sec. 936. Complex Well Technology Testing Facility.
Sec. 937. Fischer-Tropsch diesel fuel loan guarantee Program.
Part II--Ultra-deepwater and unconventional natural gas and other
petroleum resources

Sec. 941. Program authority.
Sec. 942. Ultra-deepwater Program.
Sec. 943. Unconventional natural gas and other petroleum resources
Program.
Sec. 944. Additional requirements for awards.
Sec. 945. Advisory committees.
Sec. 946. Limits on participation.
Sec. 947. Sunset.
Sec. 948. Definitions.
Sec. 949. Funding.
Subtitle F--Science

Sec. 951. Science.
Sec. 952. United States participation in ITER.
Sec. 953. Plan for Fusion Energy Sciences Program.
Sec. 954. Spallation Neutron Source.
Sec. 955. Support for science and energy facilities and infrastructure.
Sec. 956. Catalysis Research and development Program.
Sec. 957. Nanoscale Science and Engineering Research, development,
demonstration, and commercial application.
Sec. 958. Advanced scientific computing for energy missions.
Sec. 959. Genomes to Life Program.
Sec. 960. Fission and fusion energy materials research Program.
Sec. 961. Energy-Water Supply Program.
Sec. 962. Nitrogen fixation.
Subtitle G--Energy and environment

Sec. 964. United States-Mexico energy Technology cooperation.
Sec. 965. Western Hemisphere energy cooperation.
Sec. 966. Waste reduction and use of alternatives.
Sec. 967. Report on fuel cell test Center.
Sec. 968. Arctic Engineering Research Center.
Sec. 969. Barrow Geophysical Research Facility.
Sec. 970. Western Michigan demonstration project.
Subtitle H--Management

Sec. 971. Availability of funds.
Sec. 972. Cost sharing.
Sec. 973. Merit review of proposals.
Sec. 974. External technical review of departmental programs.
Sec. 975. Improved coordination of Technology transfer activities.
Sec. 976. Federal laboratory educational partners.
Sec. 977. Interagency cooperation.
Sec. 978. Technology Infrastructure Program.
Sec. 979. Reprogramming.
Sec. 980. Construction with other laws.
Sec. 981. Report on research and development Program evaluation
methodologies.
Sec. 982. Department of Energy Science and Technology Scholarship
Program.
Sec. 983. Report on equal employment opportunity practices.
Sec. 984. Small business advocacy and assistance.
Sec. 985. Report on mobility of scientific and technical personnel.
Sec. 986. National Academy of Sciences report.
Sec. 987. Outreach.
Sec. 988. Competitive award of management contracts.
Sec. 989. Educational programs in science and mathematics.
TITLE X--DEPARTMENT OF ENERGY MANAGEMENT

Sec. 1001. Additional Assistant Secretary position.
Sec. 1002. Other transactions authority.
TITLE XI--PERSONNEL AND TRAINING

Sec. 1101. Training guidelines for electric energy industry personnel.
Sec. 1102. Improved access to energy-related scientific and technical
careers.
Sec. 1103. National Power Plant Operations Technology and Education
Center.
Sec. 1104. International energy training.
TITLE XII--ELECTRICITY

Sec. 1201. Short title.
Subtitle A--Reliability standards

Sec. 1211. Electric reliability standards.
Subtitle B--Transmission infrastructure modernization

Sec. 1221. Siting of interstate electric transmission facilities.
Sec. 1222. Third-party finance.
Sec. 1223. Transmission system monitoring.
Sec. 1224. Advanced transmission technologies.
Sec. 1225. Electric transmission and distribution programs.
Sec. 1226. Advanced Power System Technology Incentive Program.
Sec. 1227. Office of Electric Transmission and Distribution.
Subtitle C--Transmission operation improvements

Sec. 1231. Open nondiscriminatory access.
Sec. 1232. Sense of Congress on Regional Transmission Organizations.
Sec. 1233. Regional Transmission Organization applications progress
report.
Sec. 1234. Federal utility participation in Regional Transmission
Organizations.
Sec. 1235. Standard market design.
Sec. 1236. Native load service obligation.
Sec. 1237. Study on the benefits of economic dispatch.
Subtitle D--Transmission rate reform

Sec. 1241. Transmission infrastructure investment.
Sec. 1242. Voluntary transmission pricing plans.
Subtitle E--Amendments to PURPA

Sec. 1251. Net metering and additional standards.
Sec. 1252. Smart metering.
Sec. 1253. Cogeneration and small power production purchase and sale
requirements.
Subtitle F--Repeal of PUHCA

Sec. 1261. Short title.
Sec. 1262. Definitions.
Sec. 1263. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 1264. Federal access to books and records.
Sec. 1265. State access to books and records.
Sec. 1266. Exemption authority.
Sec. 1267. Affiliate transactions.
Sec. 1268. Applicability.
Sec. 1269. Effect on other regulations.
Sec. 1270. Enforcement.
Sec. 1271. Savings provisions.
Sec. 1272. Implementation.
Sec. 1273. Transfer of resources.
Sec. 1274. Effective date.
Sec. 1275. Service allocation.
Sec. 1276. Authorization of appropriations.
Sec. 1277. Conforming amendments to the Federal Power Act.
Subtitle G--Market transparency, enforcement, and consumer protection

Sec. 1281. Market transparency rules.
Sec. 1282. Market manipulation.
Sec. 1283. Enforcement.
Sec. 1284. Refund effective date.
Sec. 1285. Refund authority.
Sec. 1286. Sanctity of contract.
Sec. 1287. Consumer privacy and unfair trade practices.
Subtitle H--Merger reform

Sec. 1291. Merger review reform and accountability.
Sec. 1292. Electric utility mergers.
Subtitle I--Definitions

Sec. 1295. Definitions.
Subtitle J--Technical and conforming amendments

Sec. 1297. Conforming amendments.
TITLE XIII--ENERGY TAX INCENTIVES

Sec. 1300. Short title; amendment of 1986 Code.
Subtitle A--Conservation

Part I--Residential and business property

Sec. 1301. Credit for residential energy efficient property.
Sec. 1302. Extension and expansion of credit for electricity produced
from certain renewable resources.
Sec. 1303. Credit for business installation of qualified fuel cells.
Sec. 1304. Credit for energy efficiency improvements to existing homes.
Sec. 1305. Credit for construction of new energy efficient homes.
Sec. 1306. Energy credit for combined heat and power system property.
Sec. 1307. Credit for energy efficient appliances.
Sec. 1308. Energy efficient commercial buildings deduction.
Sec. 1309. Three-year applicable recovery period for depreciation of
qualified energy management devices.
Sec. 1310. Credit for production from advanced nuclear power
facilities.
Part II--Fuels and alternative motor vehicles

Sec. 1311. Repeal of 4.3-cent motor fuel excise taxes on railroads and
inland waterway transportation which remain
in general Fund.
Sec. 1312. Reduced motor fuel excise tax on certain mixtures of diesel
fuel.
Sec. 1313. Small ethanol producer credit.
Sec. 1314. Incentives for biodiesel.
Sec. 1315. Alcohol fuel and biodiesel mixtures excise tax credit.
Sec. 1316. Nonapplication of export exemption to delivery of fuel to
motor vehicles removed from United States.
Sec. 1317. Repeal of phaseouts for qualified electric vehicle credit
and deduction for clean fuel-vehicles.
Sec. 1318. Alternative motor vehicle credit.
Sec. 1319. Modifications of deduction for certain refueling property.
Subtitle B--Reliability

Sec. 1321. Natural gas gathering lines treated as 7-YEAR property.
Sec. 1322. Natural gas distribution lines treated as 15-year property.
Sec. 1323. Electric transmission property treated as 15-year property.
Sec. 1324. Expensing of capital costs incurred in complying with
Environmental Protection Agency sulfur
regulations.
Sec. 1325. Credit for production of low sulfur diesel fuel.
Sec. 1326. Determination of small refiner exception to oil depletion
deduction.
Sec. 1327. Sales or dispositions to implement Federal Energy Regulatory
Commission or State electric restructuring
policy.
Sec. 1328. Modifications to special rules for nuclear decommissioning
costs.
Sec. 1329. Treatment of certain income of cooperatives.
Sec. 1330. Arbitrage rules not to apply to prepayments for natural gas.
Subtitle C--Production

Part I--Oil and gas provisions

Sec. 1341. Oil and gas from marginal wells.
Sec. 1342. Temporary suspension of limitation based on 65 percent of
taxable income and extension of suspension
of taxable income limit with respect to
marginal production.
Sec. 1343. Amortization of delay rental payments.
Sec. 1344. Amortization of geological and geophysical expenditures.
Sec. 1345. Extension and modification of credit for producing fuel from
a nonconventional source.
Part II--Alternative minimum tax provisions

Sec. 1346. New nonrefundable personal credits allowed against regular
and minimum taxes.
Sec. 1347. Business related energy credits allowed against regular and
minimum tax.
Sec. 1348. Temporary repeal of alternative minimum tax preference for
intangible drilling costs.
Part III--Clean coal incentives

Sec. 1351. Credit for clean coal technology units.
Sec. 1352. Expansion of amortization for certain pollution control
facilities.
Sec. 1353. 5-year recovery period for eligible integrated gasification
combined cycle technology unit eligible for
credit.
Part IV--High volume natural gas provisions

Sec. 1355. High volume natural gas pipe treated as 7-year property.
Sec. 1356. Extension of enhanced oil recovery credit to high volume
natural gas facilities.
Subtitle D--Additional provisions

Sec. 1361. Extension of accelerated depreciation benefit for energy-
related businesses on indian reservations.
Sec. 1362. Payment of dividends on stock of cooperatives without
reducing patronage dividends.
Sec. 1363. Distributions from publicly traded partnerships treated as
qualifying income of regulated investment
companies.
Sec. 1364. Ceiling fans.
Sec. 1365. Certain steam generators, and certain reactor vessel heads,
used in nuclear facilities.
Sec. 1366. Brownfields demonstration program for qualified green
building and sustainable design projects.
TITLE XIV--MISCELLANEOUS

Subtitle A--Rural and Remote Electricity Construction

Sec. 1401. Denali Commission programs.
Sec. 1402. Rural and remote community assistance.
Subtitle B--Coastal programs

Sec. 1411. Royalty payments under leases under the Outer Continental
Shelf Lands Act.
Sec. 1412. Domestic offshore energy reinvestment.
Subtitle C--Reforms to the Board of Directors of the Tennessee Valley
Authority

Sec. 1431. Change in composition, operation, and duties of the Board of
Directors of the Tennessee Valley
Authority.
Sec. 1432. Change in manner of appointment of staff.
Sec. 1433. Conforming amendments.
Sec. 1434. Appointments; effective date; transition.
Subtitle D--Other provisions

Sec. 1441. Continuation of transmission security order.
Sec. 1442. Review of agency determinations.
Sec. 1443. Attainment dates for downwind ozone nonattainment areas.
Sec. 1444. Energy production incentives.
Sec. 1445. Use of granular mine tailings.
TITLE XV--ETHANOL AND MOTOR FUELS

Subtitle A--General provisions

Sec. 1501. Renewable content of motor vehicle fuel.
Sec. 1502. Fuels safe harbor.
Sec. 1503. Findings and MTBE transition assistance.
Sec. 1504. Use of MTBE.
Sec. 1505. National Academy of Sciences review and presidential
determination.
Sec. 1506. Elimination of oxygen content requirement for reformulated
gasoline.
Sec. 1507. Analyses of motor vehicle fuel changes.
Sec. 1508. Data collection.
Sec. 1509. Reducing the proliferation of State fuel controls.
Sec. 1510. Fuel system requirements harmonization study.
Sec. 1511. Commercial byproducts from municipal solid waste and
cellulosic biomass loan guarantee program.
Sec. 1512. Resource Center.
Sec. 1513. Cellulosic biomass and waste-derived ethanol conversion
assistance.
Sec. 1514. Blending of compliant reformulated gasolines.
Subtitle B--Underground storage tank compliance

Sec. 1521. Short title.
Sec. 1522. Leaking underground storage tanks.
Sec. 1523. Inspection of underground storage tanks.
Sec. 1524. Operator training.
Sec. 1525. Remediation from oxygenated fuel additives.
Sec. 1526. Release prevention, compliance, and enforcement.
Sec. 1527. Delivery prohibition.
Sec. 1528. Federal facilities.
Sec. 1529. Tanks on Tribal lands.
Sec. 1530. Future release containment technology.
Sec. 1531. Authorization of appropriations.
Sec. 1532. Conforming amendments.
Sec. 1533. Technical amendments.
TITLE XVI--STUDIES

Sec. 1601. Study on inventory of petroleum and natural gas storage.
Sec. 1602. Natural gas supply shortage report.
Sec. 1603. Split-estate Federal oil and gas leasing and development
practices.
Sec. 1604. Resolution of Federal resource development conflicts in the
Powder River Basin.
Sec. 1605. Study of energy efficiency standards.
Sec. 1606. Telecommuting study.
Sec. 1607. Liheap report.
Sec. 1608. Oil bypass filtration technology.
Sec. 1609. Total integrated thermal systems.
Sec. 1610. University collaboration.
Sec. 1611. Reliability and consumer protection assessment.

TITLE I--ENERGY EFFICIENCY

Subtitle A--Federal Programs

SEC. 101. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL BUILDINGS.

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

``SEC. 552. ENERGY AND WATER SAVINGS MEASURES IN CONGRESSIONAL
BUILDINGS.

``(a) In General.--The Architect of the Capitol--
``(1) shall develop, update, and implement a cost-effective
energy conservation and management plan (referred to in this
section as the `plan') for all facilities administered by
Congress (referred to in this section as `congressional
buildings') to meet the energy performance requirements for
Federal buildings established under section 543(a)(1); and
``(2) shall submit the plan to Congress, not later than 180
days after the date of enactment of this section.
``(b) Plan Requirements.--The plan shall include--
``(1) a description of the life cycle cost analysis used to
determine the cost-effectiveness of proposed energy efficiency
projects;
``(2) a schedule of energy surveys to ensure complete
surveys of all congressional buildings every 5 years to
determine the cost and payback period of energy and water
conservation measures;
``(3) a strategy for installation of life cycle cost-
effective energy and water conservation measures;
``(4) the results of a study of the costs and benefits of
installation of submetering in congressional buildings; and
``(5) information packages and `how-to' guides for each
Member and employing authority of Congress that detail simple,
cost-effective methods to save energy and taxpayer dollars in
the workplace.
``(c) Annual Report.--The Architect of the Capitol shall submit to
Congress annually a report on congressional energy management and
conservation programs required under this section that describes in
detail--
``(1) energy expenditures and savings estimates for each
facility;
``(2) energy management and conservation projects; and
``(3) future priorities to ensure compliance with this
section.''.
(b) Table of Contents Amendment.--The table of contents of the
National Energy Conservation Policy Act is amended by adding at the end
of the items relating to part 3 of title V the following new item:

``Sec. 552. Energy and water savings measures in congressional
buildings.''.
(c) Repeal.--Section 310 of the Legislative Branch Appropriations
Act, 1999 (2 U.S.C. 1815), is repealed.
(d) Energy Infrastructure.--The Architect of the Capitol, building
on the Master Plan Study completed in July 2000, shall commission a
study to evaluate the energy infrastructure of the Capital Complex to
determine how the infrastructure could be augmented to become more
energy efficient, using unconventional and renewable energy resources,
in a way that would enable the Complex to have reliable utility service
in the event of power fluctuations, shortages, or outages.
(e) Authorization of Appropriations.--There are authorized to be
appropriated to the Architect of the Capitol to carry out subsection
(d), $2,000,000 for each of fiscal years 2004 through 2008.

SEC. 102. ENERGY MANAGEMENT REQUIREMENTS.

(a) Energy Reduction Goals.--
(1) Amendment.--Section 543(a)(1) of the National Energy
Conservation Policy Act (42 U.S.C. 8253(a)(1)) is amended by
striking ``its Federal buildings so that'' and all that follows
through the end and inserting ``the Federal buildings of the
agency (including each industrial or laboratory facility) so
that the energy consumption per gross square foot of the
Federal buildings of the agency in fiscal years 2004 through
2013 is reduced, as compared with the energy consumption per
gross square foot of the Federal buildings of the agency in
fiscal year 2001, by the percentage specified in the following
table:

``Fiscal Year                                    Percentage reduction
2004...................................................      2
2005...................................................      4
2006...................................................      6
2007...................................................      8
2008...................................................     10
2009...................................................     12
2010...................................................     14
2011...................................................     16
2012...................................................     18
2013...................................................  20.''.
(2) Reporting baseline.--The energy reduction goals and
baseline established in paragraph (1) of section 543(a) of the
National Energy Conservation Policy Act (42 U.S.C. 8253(a)(1)),
as amended by this subsection, supersede all previous goals and
baselines under such paragraph, and related reporting
requirements.
(b) Review and Revision of Energy Performance Requirement.--Section
543(a) of the National Energy Conservation Policy Act (42 U.S.C.
8253(a)) is further amended by adding at the end the following:
``(3) Not later than December 31, 2012, the Secretary shall review
the results of the implementation of the energy performance requirement
established under paragraph (1) and submit to Congress recommendations
concerning energy performance requirements for fiscal years 2014
through 2023.''.
(c) Exclusions.--Section 543(c)(1) of the National Energy
Conservation Policy Act (42 U.S.C. 8253(c)(1)) is amended by striking
``An agency may exclude'' and all that follows through the end and
inserting ``(A) An agency may exclude, from the energy performance
requirement for a fiscal year established under subsection (a) and the
energy management requirement established under subsection (b), any
Federal building or collection of Federal buildings, if the head of the
agency finds that--
``(i) compliance with those requirements would be
impracticable;
``(ii) the agency has completed and submitted all federally
required energy management reports;
``(iii) the agency has achieved compliance with the energy
efficiency requirements of this Act, the Energy Policy Act of
1992, Executive orders, and other Federal law; and
``(iv) the agency has implemented all practicable, life
cycle cost-effective projects with respect to the Federal
building or collection of Federal buildings to be excluded.
``(B) A finding of impracticability under subparagraph (A)(i) shall
be based on--
``(i) the energy intensiveness of activities carried out in
the Federal building or collection of Federal buildings; or
``(ii) the fact that the Federal building or collection of
Federal buildings is used in the performance of a national
security function.''.
(d) Review by Secretary.--Section 543(c)(2) of the National Energy
Conservation Policy Act (42 U.S.C. 8253(c)(2)) is amended--
(1) by striking ``impracticability standards'' and
inserting ``standards for exclusion'';
(2) by striking ``a finding of impracticability'' and
inserting ``the exclusion''; and
(3) by striking ``energy consumption requirements'' and
inserting ``requirements of subsections (a) and (b)(1)''.
(e) Criteria.--Section 543(c) of the National Energy Conservation
Policy Act (42 U.S.C. 8253(c)) is further amended by adding at the end
the following:
``(3) Not later than 180 days after the date of enactment of this
paragraph, the Secretary shall issue guidelines that establish criteria
for exclusions under paragraph (1).''.
(f) Retention of Energy and Water Savings.--Section 546 of the
National Energy Conservation Policy Act (42 U.S.C. 8256) is amended by
adding at the end the following new subsection:
``(e) Retention of Energy and Water Savings.--An agency may retain
any funds appropriated to that agency for energy expenditures, water
expenditures, or wastewater treatment expenditures, at buildings
subject to the requirements of section 543(a) and (b), that are not
made because of energy savings or water savings. Except as otherwise
provided by law, such funds may be used only for energy efficiency,
water conservation, or unconventional and renewable energy resources
projects.''.
(g) Reports.--Section 548(b) of the National Energy Conservation
Policy Act (42 U.S.C. 8258(b)) is amended--
(1) in the subsection heading, by inserting ``the President
And'' before ``Congress''; and
(2) by inserting ``President and'' before ``Congress''.
(h) Conforming Amendment.--Section 550(d) of the National Energy
Conservation Policy Act (42 U.S.C. 8258b(d)) is amended in the second
sentence by striking ``the 20 percent reduction goal established under
section 543(a) of the National Energy Conservation Policy Act (42
U.S.C. 8253(a)).'' and inserting ``each of the energy reduction goals
established under section 543(a).''.

SEC. 103. ENERGY USE MEASUREMENT AND ACCOUNTABILITY.

Section 543 of the National Energy Conservation Policy Act (42
U.S.C. 8253) is further amended by adding at the end the following:
``(e) Metering of Energy Use.--
``(1) Deadline.--By October 1, 2010, in accordance with
guidelines established by the Secretary under paragraph (2),
all Federal buildings shall, for the purposes of efficient use
of energy and reduction in the cost of electricity used in such
buildings, be metered or submetered. Each agency shall use, to
the maximum extent practicable, advanced meters or advanced
metering devices that provide data at least daily and that
measure at least hourly consumption of electricity in the
Federal buildings of the agency. Such data shall be
incorporated into existing Federal energy tracking systems and
made available to Federal facility energy managers.
``(2) Guidelines.--
``(A) In general.--Not later than 180 days after
the date of enactment of this subsection, the
Secretary, in consultation with the Department of
Defense, the General Services Administration,
representatives from the metering industry, utility
industry, energy services industry, energy efficiency
industry, energy efficiency advocacy organizations,
national laboratories, universities, and Federal
facility energy managers, shall establish guidelines
for agencies to carry out paragraph (1).
``(B) Requirements for guidelines.--The guidelines
shall--
``(i) take into consideration--
``(I) the cost of metering and
submetering and the reduced cost of
operation and maintenance expected to
result from metering and submetering;
``(II) the extent to which metering
and submetering are expected to result
in increased potential for energy
management, increased potential for
energy savings and energy efficiency
improvement, and cost and energy
savings due to utility contract
aggregation; and
``(III) the measurement and
verification protocols of the
Department of Energy;
``(ii) include recommendations concerning
the amount of funds and the number of trained
personnel necessary to gather and use the
metering information to track and reduce energy
use;
``(iii) establish priorities for types and
locations of buildings to be metered and
submetered based on cost-effectiveness and a
schedule of 1 or more dates, not later than 1
year after the date of issuance of the
guidelines, on which the requirements specified
in paragraph (1) shall take effect; and
``(iv) establish exclusions from the
requirements specified in paragraph (1) based
on the de minimis quantity of energy use of a
Federal building, industrial process, or
structure.
``(3) Plan.--Not later than 6 months after the date
guidelines are established under paragraph (2), in a report
submitted by the agency under section 548(a), each agency shall
submit to the Secretary a plan describing how the agency will
implement the requirements of paragraph (1), including (A) how
the agency will designate personnel primarily responsible for
achieving the requirements and (B) demonstration by the agency,
complete with documentation, of any finding that advanced
meters or advanced metering devices, as defined in paragraph
(1), are not practicable.''.

SEC. 104. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

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

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

``(a) Definitions.--In this section:
``(1) Energy star product.--The term `Energy Star product'
means a product that is rated for energy efficiency under an
Energy Star program.
``(2) Energy star program.--The term `Energy Star program'
means the program established by section 324A of the Energy
Policy and Conservation Act.
``(3) Executive agency.--The term `executive agency' has
the meaning given the term in section 4 of the Office of
Federal Procurement Policy Act (41 U.S.C. 403).
``(4) FEMP designated product.--The term `FEMP designated
product' means a product that is designated under the Federal
Energy Management Program of the Department of Energy as being
among the highest 25 percent of equivalent products for energy
efficiency.
``(b) Procurement of Energy Efficient Products.--
``(1) Requirement.--To meet the requirements of an
executive agency for an energy consuming product, the head of
the executive agency shall, except as provided in paragraph
(2), procure--
``(A) an Energy Star product; or
``(B) a FEMP designated product.
``(2) Exceptions.--The head of an executive agency is not
required to procure an Energy Star product or FEMP designated
product under paragraph (1) if the head of the executive agency
finds in writing that--
``(A) an Energy Star product or FEMP designated
product is not cost-effective over the life of the
product taking energy cost savings into account; or
``(B) no Energy Star product or FEMP designated
product is reasonably available that meets the
functional requirements of the executive agency.
``(3) Procurement planning.--The head of an executive
agency shall incorporate into the specifications for all
procurements involving energy consuming products and systems,
including guide specifications, project specifications, and
construction, renovation, and services contracts that include
provision of energy consuming products and systems, and into
the factors for the evaluation of offers received for the
procurement, criteria for energy efficiency that are consistent
with the criteria used for rating Energy Star products and for
rating FEMP designated products.
``(c) Listing of Energy Efficient Products in Federal Catalogs.--
Energy Star products and FEMP designated products shall be clearly
identified and prominently displayed in any inventory or listing of
products by the General Services Administration or the Defense
Logistics Agency. The General Services Administration or the Defense
Logistics Agency shall supply only Energy Star products or FEMP
designated products for all product categories covered by the Energy
Star program or the Federal Energy Management Program, except in cases
where the agency ordering a product specifies in writing that no Energy
Star product or FEMP designated product is available to meet the
buyer's functional requirements, or that no Energy Star product or FEMP
designated product is cost-effective for the intended application over
the life of the product, taking energy cost savings into account.
``(d) Specific Products.--(1) In the case of electric motors of 1
to 500 horsepower, agencies shall select only premium efficient motors
that meet a standard designated by the Secretary. The Secretary shall
designate such a standard not later than 120 days after the date of the
enactment of this section, after considering the recommendations of
associated electric motor manufacturers and energy efficiency groups.
``(2) All Federal agencies are encouraged to take actions to
maximize the efficiency of air conditioning and refrigeration
equipment, including appropriate cleaning and maintenance, including
the use of any system treatment or additive that will reduce the
electricity consumed by air conditioning and refrigeration equipment.
Any such treatment or additive must be--
``(A) determined by the Secretary to be effective in
increasing the efficiency of air conditioning and refrigeration
equipment without having an adverse impact on air conditioning
performance (including cooling capacity) or equipment useful
life;
``(B) determined by the Administrator of the Environmental
Protection Agency to be environmentally safe; and
``(C) shown to increase seasonal energy efficiency ratio
(SEER) or energy efficiency ratio (EER) when tested by the
National Institute of Standards and Technology according to
Department of Energy test procedures without causing any
adverse impact on the system, system components, the
refrigerant or lubricant, or other materials in the system.
Results of testing described in subparagraph (C) shall be published in
the Federal Register for public review and comment. For purposes of
this section, a hardware device or primary refrigerant shall not be
considered an additive.
``(e) Regulations.--Not later than 180 days after the date of the
enactment of this section, the Secretary shall issue guidelines to
carry out this section.''.
(b) Conforming Amendment.--The table of contents of the National
Energy Conservation Policy Act is further amended by inserting after
the item relating to section 552 the following new item:

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

SEC. 105. ENERGY SAVINGS PERFORMANCE CONTRACTS.

(a) Permanent Extension.--Effective September 30, 2003, section
801(c) of the National Energy Conservation Policy Act (42 U.S.C.
8287(c)) is repealed.
(b) Payment of Costs.--Section 802 of the National Energy
Conservation Policy Act (42 U.S.C. 8287a) is amended by inserting ``,
water, or wastewater treatment'' after ``payment of energy''.
(c) Energy Savings.--Section 804(2) of the National Energy
Conservation Policy Act (42 U.S.C. 8287c(2)) is amended to read as
follows:
``(2) The term `energy savings' means a reduction in the
cost of energy, water, or wastewater treatment, from a base
cost established through a methodology set forth in the
contract, used in an existing federally owned building or
buildings or other federally owned facilities as a result of--
``(A) the lease or purchase of operating equipment,
improvements, altered operation and maintenance, or
technical services;
``(B) the increased efficient use of existing
energy sources by cogeneration or heat recovery,
excluding any cogeneration process for other than a
federally owned building or buildings or other
federally owned facilities; or
``(C) the increased efficient use of existing water
sources in either interior or exterior applications.''.
(d) Energy Savings Contract.--Section 804(3) of the National Energy
Conservation Policy Act (42 U.S.C. 8287c(3)) is amended to read as
follows:
``(3) The terms `energy savings contract' and `energy
savings performance contract' mean a contract that provides for
the performance of services for the design, acquisition,
installation, testing, and, where appropriate, operation,
maintenance, and repair, of an identified energy or water
conservation measure or series of measures at 1 or more
locations. Such contracts shall, with respect to an agency
facility that is a public building (as such term is defined in
section 3301 of title 40, United States Code), be in compliance
with the prospectus requirements and procedures of section 3307
of title 40, United States Code.''.
(e) Energy or Water Conservation Measure.--Section 804(4) of the
National Energy Conservation Policy Act (42 U.S.C. 8287c(4)) is amended
to read as follows:
``(4) The term `energy or water conservation measure'
means--
``(A) an energy conservation measure, as defined in
section 551; or
``(B) a water conservation measure that improves
the efficiency of water use, is life-cycle cost-
effective, and involves water conservation, water
recycling or reuse, more efficient treatment of
wastewater or stormwater, improvements in operation or
maintenance efficiencies, retrofit activities, or other
related activities, not at a Federal hydroelectric
facility.''.
(f) Review.--Not later than 180 days after the date of the
enactment of this Act, the Secretary of Energy shall complete a review
of the Energy Savings Performance Contract program to identify
statutory, regulatory, and administrative obstacles that prevent
Federal agencies from fully utilizing the program. In addition, this
review shall identify all areas for increasing program flexibility and
effectiveness, including audit and measurement verification
requirements, accounting for energy use in determining savings,
contracting requirements, including the identification of additional
qualified contractors, and energy efficiency services covered. The
Secretary shall report these findings to Congress and shall implement
identified administrative and regulatory changes to increase program
flexibility and effectiveness to the extent that such changes are
consistent with statutory authority.
(g) Extension of Authority.--Any energy savings performance
contract entered into under section 801 of the National Energy
Conservation Policy Act (42 U.S.C. 8287) after October 1, 2003, and
before the date of enactment of this Act, shall be deemed to have been
entered into pursuant to such section 801 as amended by subsection (a)
of this section.

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

(a) In General.--The Secretary of Defense and the heads of other
interested Federal agencies are authorized to enter into up to 10
energy savings performance contracts using procedures, established
under subsection (b), based on the procedures under title VIII of the
National Energy Conservation Policy Act (42 U.S.C. 8287 et seq.), for
the purpose of achieving energy or water savings, secondary savings,
and benefits incidental to those purposes, in nonbuilding applications.
The payments to be made by the Federal Government under such contracts
shall not exceed a total of $200,000,000 for all such contracts
combined.
(b) Procedures.--The Secretary of Energy, in consultation with the
Administrator of General Services and the Secretary of Defense, shall
establish procedures based on the procedures under title VIII of the
National Energy Conservation Policy Act (42 U.S.C. 8287 et seq.), for
implementing this section.
(c) Definitions.--In this section:
(1) Nonbuilding application.--The term ``nonbuilding
application'' means--
(A) any class of vehicles, devices, or equipment
that are transportable under their own power by land,
sea, or air that consume energy from any fuel source
for the purpose of such transportability, or to
maintain a controlled environment within such vehicle,
device, or equipment; or
(B) any Federally owned equipment used to generate
electricity or transport water.
(2) Secondary savings.--The term ``secondary savings''
means additional energy or cost savings that are a direct
consequence of the energy or water savings that result from the
financing and implementation of the energy savings performance
contract, including, but not limited to, energy or cost savings
that result from a reduction in the need for fuel delivery and
logistical support, or the increased efficiency in the
production of electricity.
(d) Report.--Not later than 3 years after the date of enactment of
this section, the Secretary of Energy shall report to Congress on the
progress and results of the projects funded pursuant to this section.
Such report shall include a description of projects undertaken; the
energy, water, and cost savings, secondary savings, and other benefits
that resulted from such projects; and recommendations on whether the
pilot program should be extended, expanded, or authorized permanently
as a part of the program authorized under title VIII of the National
Energy Conservation Policy Act (42 U.S.C. 8287 et seq.).

SEC. 107. VOLUNTARY COMMITMENTS TO REDUCE INDUSTRIAL ENERGY INTENSITY.

(a) Voluntary Agreements.--The Secretary of Energy is authorized to
enter into voluntary agreements with 1 or more persons in industrial
sectors that consume significant amounts of primary energy per unit of
physical output to reduce the energy intensity of their production
activities by a significant amount relative to improvements in each
sector in recent years.
(b) Recognition.--The Secretary of Energy, in cooperation with the
Administrator of the Environmental Protection Agency and other
appropriate Federal agencies, shall recognize and publicize the
achievements of participants in voluntary agreements under this
section.
(c) Definition.--In this section, the term ``energy intensity''
means the primary energy consumed per unit of physical output in an
industrial process.

SEC. 108. ADVANCED BUILDING EFFICIENCY TESTBED.

(a) Establishment.--The Secretary of Energy, in consultation with
the Administrator of General Services, shall establish an Advanced
Building Efficiency Testbed program for the development, testing, and
demonstration of advanced engineering systems, components, and
materials to enable innovations in building technologies. The program
shall evaluate efficiency concepts for government and industry
buildings, and demonstrate the ability of next generation buildings to
support individual and organizational productivity and health
(including by improving indoor air quality) as well as flexibility and
technological change to improve environmental sustainability. Such
program shall complement and not duplicate existing national programs.
(b) Participants.--The program established under subsection (a)
shall be led by a university with the ability to combine the expertise
from numerous academic fields including, at a minimum, intelligent
workplaces and advanced building systems and engineering, electrical
and computer engineering, computer science, architecture, urban design,
and environmental and mechanical engineering. Such university shall
partner with other universities and entities who have established
programs and the capability of advancing innovative building efficiency
technologies.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Energy to carry out this section
$6,000,000 for each of the fiscal years 2004 through 2006, to remain
available until expended. For any fiscal year in which funds are
expended under this section, the Secretary shall provide \1/3\ of the
total amount to the lead university described in subsection (b), and
provide the remaining \2/3\ to the other participants referred to in
subsection (b) on an equal basis.

SEC. 109. FEDERAL BUILDING PERFORMANCE STANDARDS.

Section 305(a) of the Energy Conservation and Production Act (42
U.S.C. 6834(a)) is amended--
(1) in paragraph (2)(A), by striking ``CABO Model Energy
Code, 1992'' and inserting ``the 2003 International Energy
Conservation Code''; and
(2) by adding at the end the following:
``(3) Revised federal building energy efficiency performance
standards.--
``(A) In general.--Not later than 1 year after the date of
enactment of this paragraph, the Secretary of Energy shall
establish, by rule, revised Federal building energy efficiency
performance standards that require that--
``(i) if life-cycle cost-effective, for new Federal
buildings--
``(I) such buildings be designed so as to
achieve energy consumption levels at least 30
percent below those of the version current as
of the date of enactment of this paragraph of
the ASHRAE Standard or the International Energy
Conservation Code, as appropriate; and
``(II) sustainable design principles are
applied to the siting, design, and construction
of all new and replacement buildings; and
``(ii) where water is used to achieve energy
efficiency, water conservation technologies shall be
applied to the extent they are life-cycle cost
effective.
``(B) Additional revisions.--Not later than 1 year after
the date of approval of each subsequent revision of the ASHRAE
Standard or the International Energy Conservation Code, as
appropriate, the Secretary of Energy shall determine, based on
the cost-effectiveness of the requirements under the
amendments, whether the revised standards established under
this paragraph should be updated to reflect the amendments.
``(C) Statement on compliance of new buildings.--In the
budget request of the Federal agency for each fiscal year and
each report submitted by the Federal agency under section
548(a) of the National Energy Conservation Policy Act (42
U.S.C. 8258(a)), the head of each Federal agency shall
include--
``(i) a list of all new Federal buildings owned,
operated, or controlled by the Federal agency; and
``(ii) a statement concerning whether the Federal
buildings meet or exceed the revised standards
established under this paragraph.''.

SEC. 110. INCREASED USE OF RECOVERED MINERAL COMPONENT IN FEDERALLY
FUNDED PROJECTS INVOLVING PROCUREMENT OF CEMENT OR
CONCRETE.

(a) Amendment.--Subtitle F of the Solid Waste Disposal Act (42
U.S.C. 6961 et seq.) is amended by adding at the end the following new
section:

``increased use of recovered mineral component in federally funded
projects involving procurement of cement or concrete

``Sec. 6005. (a) Definitions.--In this section:
``(1) Agency head.--The term `agency head' means--
``(A) the Secretary of Transportation; and
``(B) the head of each other Federal agency that on
a regular basis procures, or provides Federal funds to
pay or assist in paying the cost of procuring, material
for cement or concrete projects.
``(2) Cement or concrete project.--The term `cement or
concrete project' means a project for the construction or
maintenance of a highway or other transportation facility or a
Federal, State, or local government building or other public
facility that--
``(A) involves the procurement of cement or
concrete; and
``(B) is carried out in whole or in part using
Federal funds.
``(3) Recovered mineral component.--The term `recovered
mineral component' means--
``(A) ground granulated blast furnace slag;
``(B) coal combustion fly ash; and
``(C) any other waste material or byproduct
recovered or diverted from solid waste that the
Administrator, in consultation with an agency head,
determines should be treated as recovered mineral
component under this section for use in cement or
concrete projects paid for, in whole or in part, by the
agency head.
``(b) Implementation of Requirements.--
``(1) In general.--Not later than 1 year after the date of
enactment of this section, the Administrator and each agency
head shall take such actions as are necessary to implement
fully all procurement requirements and incentives in effect as
of the date of enactment of this section (including guidelines
under section 6002) that provide for the use of cement and
concrete incorporating recovered mineral component in cement or
concrete projects.
``(2) Priority.--In carrying out paragraph (1) an agency
head shall give priority to achieving greater use of recovered
mineral component in cement or concrete projects for which
recovered mineral components historically have not been used or
have been used only minimally.
``(3) Conformance.--The Administrator and each agency head
shall carry out this subsection in accordance with section
6002.
``(c) Full Implementation Study.--
``(1) In general.--The Administrator, in cooperation with
the Secretary of Transportation and the Secretary of Energy,
shall conduct a study to determine the extent to which current
procurement requirements, when fully implemented in accordance
with subsection (b), may realize energy savings and
environmental benefits attainable with substitution of
recovered mineral component in cement used in cement or
concrete projects.
``(2) Matters to be addressed.--The study shall--
``(A) quantify the extent to which recovered
mineral components are being substituted for Portland
cement, particularly as a result of current procurement
requirements, and the energy savings and environmental
benefits associated with that substitution;
``(B) identify all barriers in procurement
requirements to greater realization of energy savings
and environmental benefits, including barriers
resulting from exceptions from current law; and
``(C)(i) identify potential mechanisms to achieve
greater substitution of recovered mineral component in
types of cement or concrete projects for which
recovered mineral components historically have not been
used or have been used only minimally;
``(ii) evaluate the feasibility of establishing
guidelines or standards for optimized substitution
rates of recovered mineral component in those cement or
concrete projects; and
``(iii) identify any potential environmental or
economic effects that may result from greater
substitution of recovered mineral component in those
cement or concrete projects.
``(3) Report.--Not later than 30 months after the date of
enactment of this section, the Administrator shall submit to
Congress a report on the study.
``(d) Additional Procurement Requirements.--Unless the study
conducted under subsection (c) identifies any effects or other problems
described in subsection (c)(2)(C)(iii) that warrant further review or
delay, the Administrator and each agency head shall, not later than 1
year after the release of the report in accordance with subsection
(c)(3), take additional actions authorized under this Act to establish
procurement requirements and incentives that provide for the use of
cement and concrete with increased substitution of recovered mineral
component in the construction and maintenance of cement or concrete
projects, so as to--
``(1) realize more fully the energy savings and
environmental benefits associated with increased substitution;
and
``(2) eliminate barriers identified under subsection (c).
``(e) Effect of Section.--Nothing in this section affects the
requirements of section 6002 (including the guidelines and
specifications for implementing those requirements).''.
(b) Table of Contents Amendment.--The table of contents of the
Solid Waste Disposal Act is amended by adding after the item relating
to section 6004 the following new item:

``Sec. 6005. Increased use of recovered mineral component in federally
funded projects involving procurement of
cement or concrete.''.

Subtitle B--Energy Assistance and State Programs

SEC. 121. LOW INCOME HOME ENERGY ASSISTANCE PROGRAM.

Section 2602(b) of the Low-Income Home Energy Assistance Act of
1981 (42 U.S.C. 8621(b)) is amended by striking ``and $2,000,000,000
for each of fiscal years 2002 through 2004'' and inserting
``$2,000,000,000 for fiscal years 2002 and 2003, and $3,400,000,000 for
each of fiscal years 2004 through 2006''.

SEC. 122. WEATHERIZATION ASSISTANCE.

Section 422 of the Energy Conservation and Production Act (42
U.S.C. 6872) is amended by striking ``for fiscal years 1999 through
2003 such sums as may be necessary'' and inserting ``$325,000,000 for
fiscal year 2004, $400,000,000 for fiscal year 2005, and $500,000,000
for fiscal year 2006''.

SEC. 123. STATE ENERGY PROGRAMS.

(a) State Energy Conservation Plans.--Section 362 of the Energy
Policy and Conservation Act (42 U.S.C. 6322) is amended by inserting at
the end the following new subsection:
``(g) The Secretary shall, at least once every 3 years, invite the
Governor of each State to review and, if necessary, revise the energy
conservation plan of such State submitted under subsection (b) or (e).
Such reviews should consider the energy conservation plans of other
States within the region, and identify opportunities and actions
carried out in pursuit of common energy conservation goals.''.
(b) State Energy Efficiency Goals.--Section 364 of the Energy
Policy and Conservation Act (42 U.S.C. 6324) is amended to read as
follows:

``state energy efficiency goals

``Sec. 364. Each State energy conservation plan with respect to
which assistance is made available under this part on or after the date
of enactment of the Energy Policy Act of 2003 shall contain a goal,
consisting of an improvement of 25 percent or more in the efficiency of
use of energy in the State concerned in calendar year 2010 as compared
to calendar year 1990, and may contain interim goals.''.
(c) Authorization of Appropriations.--Section 365(f) of the Energy
Policy and Conservation Act (42 U.S.C. 6325(f)) is amended by striking
``for fiscal years 1999 through 2003 such sums as may be necessary''
and inserting ``$100,000,000 for each of the fiscal years 2004 and 2005
and $125,000,000 for fiscal year 2006''.

SEC. 124. ENERGY EFFICIENT APPLIANCE REBATE PROGRAMS.

(a) Definitions.--In this section:
(1) Eligible state.--The term ``eligible State'' means a
State that meets the requirements of subsection (b).
(2) Energy star program.--The term ``Energy Star program''
means the program established by section 324A of the Energy
Policy and Conservation Act.
(3) Residential energy star product.--The term
``residential Energy Star product'' means a product for a
residence that is rated for energy efficiency under the Energy
Star program.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(5) State energy office.--The term ``State energy office''
means the State agency responsible for developing State energy
conservation plans under section 362 of the Energy Policy and
Conservation Act (42 U.S.C. 6322).
(6) State program.--The term ``State program'' means a
State energy efficient appliance rebate program described in
subsection (b)(1).
(b) Eligible States.--A State shall be eligible to receive an
allocation under subsection (c) if the State--
(1) establishes (or has established) a State energy
efficient appliance rebate program to provide rebates to
residential consumers for the purchase of residential Energy
Star products to replace used appliances of the same type;
(2) submits an application for the allocation at such time,
in such form, and containing such information as the Secretary
may require; and
(3) provides assurances satisfactory to the Secretary that
the State will use the allocation to supplement, but not
supplant, funds made available to carry out the State program.
(c) Amount of Allocations.--
(1) In general.--Subject to paragraph (2), for each fiscal
year, the Secretary shall allocate to the State energy office
of each eligible State to carry out subsection (d) an amount
equal to the product obtained by multiplying the amount made
available under subsection (f) for the fiscal year by the ratio
that the population of the State in the most recent calendar
year for which data are available bears to the total population
of all eligible States in that calendar year.
(2) Minimum allocations.--For each fiscal year, the amounts
allocated under this subsection shall be adjusted
proportionately so that no eligible State is allocated a sum
that is less than an amount determined by the Secretary.
(d) Use of Allocated Funds.--The allocation to a State energy
office under subsection (c) may be used to pay up to 50 percent of the
cost of establishing and carrying out a State program.
(e) Issuance of Rebates.--Rebates may be provided to residential
consumers that meet the requirements of the State program. The amount
of a rebate shall be determined by the State energy office, taking into
consideration--
(1) the amount of the allocation to the State energy office
under subsection (c);
(2) the amount of any Federal or State tax incentive
available for the purchase of the residential Energy Star
product; and
(3) the difference between the cost of the residential
Energy Star product and the cost of an appliance that is not a
residential Energy Star product, but is of the same type as,
and is the nearest capacity, performance, and other relevant
characteristics (as determined by the State energy office) to,
the residential Energy Star product.
(f) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section $50,000,000 for
each of the fiscal years 2004 through 2008.

SEC. 125. ENERGY EFFICIENT PUBLIC BUILDINGS.

(a) Grants.--The Secretary of Energy may make grants to the State
agency responsible for developing State energy conservation plans under
section 362 of the Energy Policy and Conservation Act (42 U.S.C. 6322),
or, if no such agency exists, a State agency designated by the Governor
of the State, to assist units of local government in the State in
improving the energy efficiency of public buildings and facilities--
(1) through construction of new energy efficient public
buildings that use at least 30 percent less energy than a
comparable public building constructed in compliance with
standards prescribed in the most recent version of the
International Energy Conservation Code, or a similar State code
intended to achieve substantially equivalent efficiency levels;
or
(2) through renovation of existing public buildings to
achieve reductions in energy use of at least 30 percent as
compared to the baseline energy use in such buildings prior to
renovation, assuming a 3-year, weather-normalized average for
calculating such baseline.
(b) Administration.--State energy offices receiving grants under
this section shall--
(1) maintain such records and evidence of compliance as the
Secretary may require; and
(2) develop and distribute information and materials and
conduct programs to provide technical services and assistance
to encourage planning, financing, and design of energy
efficient public buildings by units of local government.
(c) Authorization of Appropriations.--For the purposes of this
section, there are authorized to be appropriated to the Secretary of
Energy $30,000,000 for each of fiscal years 2004 through 2008. Not more
than 10 percent of appropriated funds shall be used for administration.

SEC. 126. LOW INCOME COMMUNITY ENERGY EFFICIENCY PILOT PROGRAM.

(a) Grants.--The Secretary of Energy is authorized to make grants
to units of local government, private, non-profit community development
organizations, and Indian tribe economic development entities to
improve energy efficiency; identify and develop alternative, renewable,
and distributed energy supplies; and increase energy conservation in
low income rural and urban communities.
(b) Purpose of Grants.--The Secretary may make grants on a
competitive basis for--
(1) investments that develop alternative, renewable, and
distributed energy supplies;
(2) energy efficiency projects and energy conservation
programs;
(3) studies and other activities that improve energy
efficiency in low income rural and urban communities;
(4) planning and development assistance for increasing the
energy efficiency of buildings and facilities; and
(5) technical and financial assistance to local government
and private entities on developing new renewable and
distributed sources of power or combined heat and power
generation.
(c) Definition.--For purposes of this section, the term ``Indian
tribe'' means any Indian tribe, band, nation, or other organized group
or community, including any Alaskan Native village or regional or
village corporation as defined in or established pursuant to the Alaska
Native Claims Settlement Act (43 U.S.C. 1601 et seq.), that is
recognized as eligible for the special programs and services provided
by the United States to Indians because of their status as Indians.
(d) Authorization of Appropriations.--For the purposes of this
section there are authorized to be appropriated to the Secretary of
Energy $20,000,000 for each of fiscal years 2004 through 2006.

Subtitle C--Energy Efficient Products

SEC. 131. ENERGY STAR PROGRAM.

(a) Amendment.--The Energy Policy and Conservation Act (42 U.S.C.
6201 et seq.) is amended by inserting the following after section 324:

``SEC. 324A. ENERGY STAR PROGRAM.

``There is established at the Department of Energy and the
Environmental Protection Agency a voluntary program to identify and
promote energy-efficient products and buildings in order to reduce
energy consumption, improve energy security, and reduce pollution
through voluntary labeling of or other forms of communication about
products and buildings that meet the highest energy efficiency
standards. Responsibilities under the program shall be divided between
the Department of Energy and the Environmental Protection Agency
consistent with the terms of agreements between the 2 agencies. The
Administrator and the Secretary shall--
``(1) promote Energy Star compliant technologies as the
preferred technologies in the marketplace for achieving energy
efficiency and to reduce pollution;
``(2) work to enhance public awareness of the Energy Star
label, including special outreach to small businesses;
``(3) preserve the integrity of the Energy Star label;
``(4) solicit comments from interested parties prior to
establishing or revising an Energy Star product category,
specification, or criterion (or effective dates for any of the
foregoing);
``(5) upon adoption of a new or revised product category,
specification, or criterion, provide reasonable notice to
interested parties of any changes (including effective dates)
in product categories, specifications, or criteria along with
an explanation of such changes and, where appropriate,
responses to comments submitted by interested parties; and
``(6) provide appropriate lead time (which shall be 9
months, unless the Agency or Department determines otherwise)
prior to the effective date for a new or a significant revision
to a product category, specification, or criterion, taking into
account the timing requirements of the manufacturing, product
marketing, and distribution process for the specific product
addressed.''.
(b) Table of Contents Amendment.--The table of contents of the
Energy Policy and Conservation Act is amended by inserting after the
item relating to section 324 the following new item:

``Sec. 324A. Energy Star program.''.

SEC. 132. HVAC MAINTENANCE CONSUMER EDUCATION PROGRAM.

Section 337 of the Energy Policy and Conservation Act (42 U.S.C.
6307) is amended by adding at the end the following:
``(c) HVAC Maintenance.--For the purpose of ensuring that installed
air conditioning and heating systems operate at their maximum rated
efficiency levels, the Secretary shall, not later than 180 days after
the date of enactment of this subsection, carry out a program to
educate homeowners and small business owners concerning the energy
savings resulting from properly conducted maintenance of air
conditioning, heating, and ventilating systems. The Secretary shall
carry out the program in a cost-shared manner in cooperation with the
Administrator of the Environmental Protection Agency and such other
entities as the Secretary considers appropriate, including industry
trade associations, industry members, and energy efficiency
organizations.
``(d) Small Business Education and Assistance.--The Administrator
of the Small Business Administration, in consultation with the
Secretary of Energy and the Administrator of the Environmental
Protection Agency, shall develop and coordinate a Government-wide
program, building on the existing Energy Star for Small Business
Program, to assist small businesses to become more energy efficient,
understand the cost savings obtainable through efficiencies, and
identify financing options for energy efficiency upgrades. The
Secretary and the Administrator of the Small Business Administration
shall make the program information available directly to small
businesses and through other Federal agencies, including the Federal
Emergency Management Program and the Department of Agriculture.''.

SEC. 133. ENERGY CONSERVATION STANDARDS FOR ADDITIONAL PRODUCTS.

(a) Definitions.--Section 321 of the Energy Policy and Conservation
Act (42 U.S.C. 6291) is amended--
(1) in paragraph (30)(S), by striking the period and adding
at the end the following: ``but does not include any lamp
specifically designed to be used for special purpose
applications and that is unlikely to be used in general purpose
applications such as those described in subparagraph (D), and
also does not include any lamp not described in subparagraph
(D) that is excluded by the Secretary, by rule, because the
lamp is designed for special applications and is unlikely to be
used in general purpose applications.''; and
(2) by adding at the end the following:
``(32) The term `battery charger' means a device that
charges batteries for consumer products and includes battery
chargers embedded in other consumer products.
``(33) The term `commercial refrigerators, freezers, and
refrigerator-freezers' means refrigerators, freezers, or
refrigerator-freezers that--
``(A) are not consumer products regulated under
this Act; and
``(B) incorporate most components involved in the
vapor-compression cycle and the refrigerated
compartment in a single package.
``(34) The term `external power supply' means an external
power supply circuit that is used to convert household electric
current into either DC current or lower-voltage AC current to
operate a consumer product.
``(35) The term `illuminated exit sign' means a sign that--
``(A) is designed to be permanently fixed in place
to identify an exit; and
``(B) consists of an electrically powered integral
light source that illuminates the legend `EXIT' and any
directional indicators and provides contrast between
the legend, any directional indicators, and the
background.
``(36)(A) Except as provided in subparagraph (B), the term
`distribution transformer' means a transformer that--
``(i) has an input voltage of 34.5 kilovolts or
less;
``(ii) has an output voltage of 600 volts or less;
and
``(iii) is rated for operation at a frequency of 60
Hertz.
``(B) The term `distribution transformer' does not
include--
``(i) transformers with multiple voltage taps, with
the highest voltage tap equaling at least 20 percent
more than the lowest voltage tap;
``(ii) transformers, such as those commonly known
as drive transformers, rectifier transformers, auto-
transformers, Uninterruptible Power System
transformers, impedance transformers, harmonic
transformers, regulating transformers, sealed and
nonventilating transformers, machine tool transformers,
welding transformers, grounding transformers, or
testing transformers, that are designed to be used in a
special purpose application and are unlikely to be used
in general purpose applications; or
``(iii) any transformer not listed in clause (ii)
that is excluded by the Secretary by rule because--
``(I) the transformer is designed for a
special application;
``(II) the transformer is unlikely to be
used in general purpose applications; and
``(III) the application of standards to the
transformer would not result in significant
energy savings.
``(37) The term `low-voltage dry-type distribution
transformer' means a distribution transformer that--
``(A) has an input voltage of 600 volts or less;
``(B) is air-cooled; and
``(C) does not use oil as a coolant.
``(38) The term `standby mode' means the lowest power
consumption mode that--
``(A) cannot be switched off or influenced by the
user; and
``(B) may persist for an indefinite time when an
appliance is connected to the main electricity supply
and used in accordance with the manufacturer's
instructions,
as defined on an individual product basis by the Secretary.
``(39) The term `torchiere' means a portable electric lamp
with a reflector bowl that directs light upward so as to give
indirect illumination.
``(40) The term `traffic signal module' means a standard 8-
inch (200mm) or 12-inch (300mm) traffic signal indication,
consisting of a light source, a lens, and all other parts
necessary for operation, that communicates movement messages to
drivers through red, amber, and green colors.
``(41) The term `transformer' means a device consisting of
2 or more coils of insulated wire that transfers alternating
current by electromagnetic induction from 1 coil to another to
change the original voltage or current value.
``(42) The term `unit heater' means a self-contained fan-
type heater designed to be installed within the heated space,
except that such term does not include a warm air furnace.''.
(b) Test Procedures.--Section 323 of the Energy Policy and
Conservation Act (42 U.S.C. 6293) is amended--
(1) in subsection (b), by adding at the end the following:
``(9) Test procedures for illuminated exit signs shall be
based on the test method used under Version 2.0 of the Energy
Star program of the Environmental Protection Agency for
illuminated exit signs.
``(10) Test procedures for distribution transformers and
low voltage dry-type distribution transformers shall be based
on the `Standard Test Method for Measuring the Energy
Consumption of Distribution Transformers' prescribed by the
National Electrical Manufacturers Association (NEMA TP 2-1998).
The Secretary may review and revise this test procedure. For
purposes of section 346(a), this test procedure shall be deemed
to be testing requirements prescribed by the Secretary under
section 346(a)(1) for distribution transformers for which the
Secretary makes a determination that energy conservation
standards would be technologically feasible and economically
justified, and would result in significant energy savings.
``(11) Test procedures for traffic signal modules shall be
based on the test method used under the Energy Star program of
the Environmental Protection Agency for traffic signal modules,
as in effect on the date of enactment of this paragraph.
``(12) Test procedures for medium base compact fluorescent
lamps shall be based on the test methods used under the August
9, 2001, version of the Energy Star program of the
Environmental Protection Agency and Department of Energy for
compact fluorescent lamps. Covered products shall meet all test
requirements for regulated parameters in section 325(bb).
However, covered products may be marketed prior to completion
of lamp life and lumen maintenance at 40 percent of rated life
testing provided manufacturers document engineering predictions
and analysis that support expected attainment of lumen
maintenance at 40 percent rated life and lamp life time.''; and
(2) by adding at the end the following:
``(f) Additional Consumer and Commercial Products.--The Secretary
shall, not later than 24 months after the date of enactment of this
subsection, prescribe testing requirements for suspended ceiling fans,
refrigerated bottled or canned beverage vending machines, and
commercial refrigerators, freezers, and refrigerator-freezers. Such
testing requirements shall be based on existing test procedures used in
industry to the extent practical and reasonable. In the case of
suspended ceiling fans, such test procedures shall include efficiency
at both maximum output and at an output no more than 50 percent of the
maximum output.''.
(c) New Standards.--Section 325 of the Energy Policy and
Conservation Act (42 U.S.C. 6295) is amended by adding at the end the
following:
``(u) Battery Charger and External Power Supply Electric Energy
Consumption.--
``(1) Initial rulemaking.--(A) The Secretary shall, within
18 months after the date of enactment of this subsection,
prescribe by notice and comment, definitions and test
procedures for the power use of battery chargers and external
power supplies. In establishing these test procedures, the
Secretary shall consider, among other factors, existing
definitions and test procedures used for measuring energy
consumption in standby mode and other modes and assess the
current and projected future market for battery chargers and
external power supplies. This assessment shall include
estimates of the significance of potential energy savings from
technical improvements to these products and suggested product
classes for standards. Prior to the end of this time period,
the Secretary shall hold a scoping workshop to discuss and
receive comments on plans for developing energy conservation
standards for energy use for these products.
``(B) The Secretary shall, within 3 years after the date of
enactment of this subsection, issue a final rule that
determines whether energy conservation standards shall be
issued for battery chargers and external power supplies or
classes thereof. For each product class, any such standards
shall be set at the lowest level of energy use that--
``(i) meets the criteria and procedures of
subsections (o), (p), (q), (r), (s), and (t); and
``(ii) will result in significant overall annual
energy savings, considering both standby mode and other
operating modes.
``(2) Review of standby energy use in covered products.--In
determining pursuant to section 323 whether test procedures and
energy conservation standards pursuant to this section should
be revised, the Secretary shall consider, for covered products
that are major sources of standby mode energy consumption,
whether to incorporate standby mode into such test procedures
and energy conservation standards, taking into account, among
other relevant factors, standby mode power consumption compared
to overall product energy consumption.
``(3) Rulemaking.--The Secretary shall not propose a
standard under this section unless the Secretary has issued
applicable test procedures for each product pursuant to section
323.
``(4) Effective date.--Any standard issued under this
subsection shall be applicable to products manufactured or
imported 3 years after the date of issuance.
``(5) Voluntary programs.--The Secretary and the
Administrator shall collaborate and develop programs, including
programs pursuant to section 324A (relating to Energy Star
Programs) and other voluntary industry agreements or codes of
conduct, that are designed to reduce standby mode energy use.
``(v) Suspended Ceiling Fans, Vending Machines, and Commercial
Refrigerators, Freezers, and Refrigerator-Freezers.--The Secretary
shall not later than 36 months after the date on which testing
requirements are prescribed by the Secretary pursuant to section
323(f), prescribe, by rule, energy conservation standards for suspended
ceiling fans, refrigerated bottled or canned beverage vending machines,
and commercial refrigerators, freezers, and refrigerator-freezers. In
establishing standards under this subsection, the Secretary shall use
the criteria and procedures contained in subsections (o) and (p). Any
standard prescribed under this subsection shall apply to products
manufactured 3 years after the date of publication of a final rule
establishing such standard.
``(w) Illuminated Exit Signs.--Illuminated exit signs manufactured
on or after January 1, 2005, shall meet the Version 2.0 Energy Star
Program performance requirements for illuminated exit signs prescribed
by the Environmental Protection Agency.
``(x) Torchieres.--Torchieres manufactured on or after January 1,
2005--
``(1) shall consume not more than 190 watts of power; and
``(2) shall not be capable of operating with lamps that
total more than 190 watts.
``(y) Low Voltage Dry-Type Distribution Transformers.--The
efficiency of low voltage dry-type distribution transformers
manufactured on or after January 1, 2005, shall be the Class I
Efficiency Levels for distribution transformers specified in Table 4-2
of the `Guide for Determining Energy Efficiency for Distribution
Transformers' published by the National Electrical Manufacturers
Association (NEMA TP-1-2002).
``(z) Traffic Signal Modules.--Traffic signal modules manufactured
on or after January 1, 2006, shall meet the performance requirements
used under the Energy Star program of the Environmental Protection
Agency for traffic signals, as in effect on the date of enactment of
this subsection, and shall be installed with compatible, electrically
connected signal control interface devices and conflict monitoring
systems.
``(aa) Unit Heaters.--Unit heaters manufactured on or after the
date that is 3 years after the date of enactment of this subsection
shall be equipped with an intermittent ignition device and shall have
either power venting or an automatic flue damper.
``(bb) Medium Base Compact Fluorescent Lamps.--Bare lamp and
covered lamp (no reflector) medium base compact fluorescent lamps
manufactured on or after January 1, 2005, shall meet the following
requirements prescribed by the August 9, 2001, version of the Energy
Star Program Requirements for Compact Fluorescent Lamps, Energy Star
Eligibility Criteria, Energy-Efficiency Specification issued by the
Environmental Protection Agency and Department of Energy: minimum
initial efficacy; lumen maintenance at 1000 hours; lumen maintenance at
40 percent of rated life; rapid cycle stress test; and lamp life. The
Secretary may, by rule, establish requirements for color quality (CRI);
power factor; operating frequency; and maximum allowable start time
based on the requirements prescribed by the August 9, 2001, version of
the Energy Star Program Requirements for Compact Fluorescent Lamps. The
Secretary may, by rule, revise these requirements or establish other
requirements considering energy savings, cost effectiveness, and
consumer satisfaction.
``(cc) Effective Date.--Section 327 shall apply--
``(1) to products for which standards are to be established
under subsections (u) and (v) on the date on which a final rule
is issued by the Department of Energy, except that any State or
local standards prescribed or enacted for any such product
prior to the date on which such final rule is issued shall not
be preempted until the standard established under subsection
(u) or (v) for that product takes effect; and
``(2) to products for which standards are established under
subsections (w) through (bb) on the date of enactment of those
subsections, except that any State or local standards
prescribed or enacted prior to the date of enactment of those
subsections shall not be preempted until the standards
established under subsections (w) through (bb) take effect.''.
(d) Residential Furnace Fans.--Section 325(f)(3) of the Energy
Policy and Conservation Act (42 U.S.C. 6295(f)(3)) is amended by adding
the following new subparagraph at the end:
``(D) Notwithstanding any provision of this Act, the Secretary may
consider, and prescribe, if the requirements of subsection (o) of this
section are met, energy efficiency or energy use standards for
electricity used for purposes of circulating air through duct work.''.

SEC. 134. ENERGY LABELING.

(a) Rulemaking on Effectiveness of Consumer Product Labeling.--
Section 324(a)(2) of the Energy Policy and Conservation Act (42 U.S.C.
6294(a)(2)) is amended by adding at the end the following:
``(F) Not later than 3 months after the date of enactment of this
subparagraph, the Commission shall initiate a rulemaking to consider
the effectiveness of the current consumer products labeling program in
assisting consumers in making purchasing decisions and improving energy
efficiency and to consider changes to the labeling rules that would
improve the effectiveness of consumer product labels. Such rulemaking
shall be completed not later than 2 years after the date of enactment
of this subparagraph.''.
(b) Rulemaking on Labeling for Additional Products.--Section 324(a)
of the Energy Policy and Conservation Act (42 U.S.C. 6294(a)) is
further amended by adding at the end the following:
``(5) The Secretary or the Commission, as appropriate, may, for
covered products referred to in subsections (u) through (aa) of section
325, prescribe, by rule, pursuant to this section, labeling
requirements for such products after a test procedure has been set
pursuant to section 323. In the case of products to which TP-1
standards under section 325(y) apply, labeling requirements shall be
based on the `Standard for the Labeling of Distribution Transformer
Efficiency' prescribed by the National Electrical Manufacturers
Association (NEMA TP-3) as in effect upon the date of enactment of this
paragraph.''.

Subtitle D--Public Housing

SEC. 141. CAPACITY BUILDING FOR ENERGY-EFFICIENT, AFFORDABLE HOUSING.

Section 4(b) of the HUD Demonstration Act of 1993 (42 U.S.C. 9816
note) is amended--
(1) in paragraph (1), by inserting before the semicolon at
the end the following: ``, including capabilities regarding the
provision of energy efficient, affordable housing and
residential energy conservation measures''; and
(2) in paragraph (2), by inserting before the semicolon the
following: ``, including such activities relating to the
provision of energy efficient, affordable housing and
residential energy conservation measures that benefit low-
income families''.

SEC. 142. INCREASE OF CDBG PUBLIC SERVICES CAP FOR ENERGY CONSERVATION
AND EFFICIENCY ACTIVITIES.

Section 105(a)(8) of the Housing and Community Development Act of
1974 (42 U.S.C. 5305(a)(8)) is amended--
(1) by inserting ``or efficiency'' after ``energy
conservation'';
(2) by striking ``, and except that'' and inserting ``;
except that''; and
(3) by inserting before the semicolon at the end the
following: ``; and except that each percentage limitation under
this paragraph on the amount of assistance provided under this
title that may be used for the provision of public services is
hereby increased by 10 percent, but such percentage increase
may be used only for the provision of public services
concerning energy conservation or efficiency''.

SEC. 143. FHA MORTGAGE INSURANCE INCENTIVES FOR ENERGY EFFICIENT
HOUSING.

(a) Single Family Housing Mortgage Insurance.--Section 203(b)(2) of
the National Housing Act (12 U.S.C. 1709(b)(2)) is amended, in the
first undesignated paragraph beginning after subparagraph (B)(ii)(IV)
(relating to solar energy systems), by striking ``20 percent'' and
inserting ``30 percent''.
(b) Multifamily Housing Mortgage Insurance.--Section 207(c) of the
National Housing Act (12 U.S.C. 1713(c)) is amended, in the last
undesignated paragraph beginning after paragraph (3) (relating to solar
energy systems and residential energy conservation measures), by
striking ``20 percent'' and inserting ``30 percent''.
(c) Cooperative Housing Mortgage Insurance.--Section 213(p) of the
National Housing Act (12 U.S.C. 1715e(p)) is amended by striking ``20
per centum'' and inserting ``30 percent''.
(d) Rehabilitation and Neighborhood Conservation Housing Mortgage
Insurance.--Section 220(d)(3)(B)(iii)(IV) of the National Housing Act
(12 U.S.C. 1715k(d)(3)(B)(iii)(IV)) is amended--
(1) by striking ``with respect to rehabilitation projects
involving not more than five family units,''; and
(2) by striking ``20 per centum'' and inserting ``30
percent''.
(e) Low-Income Multifamily Housing Mortgage Insurance.--Section
221(k) of the National Housing Act (12 U.S.C. 1715l(k)) is amended by
striking ``20 per centum'' and inserting ``30 percent''.
(f) Elderly Housing Mortgage Insurance.--Section 231(c)(2)(C) of
the National Housing Act (12 U.S.C. 1715v(c)(2)(C)) is amended by
striking ``20 per centum'' and inserting ``30 percent''.
(g) Condominium Housing Mortgage Insurance.--Section 234(j) of the
National Housing Act (12 U.S.C. 1715y(j)) is amended by striking ``20
per centum'' and inserting ``30 percent''.

SEC. 144. PUBLIC HOUSING CAPITAL FUND.

Section 9 of the United States Housing Act of 1937 (42 U.S.C.
1437g) is amended--
(1) in subsection (d)(1)--
(A) in subparagraph (I), by striking ``and'' at the
end;
(B) in subparagraph (J), by striking the period at
the end and inserting a semicolon; and
(C) by adding at the end the following new
subparagraphs:
``(K) improvement of energy and water-use
efficiency by installing fixtures and fittings that
conform to the American Society of Mechanical
Engineers/American National Standards Institute
standards A112.19.2-1998 and A112.18.1-2000, or any
revision thereto, applicable at the time of
installation, and by increasing energy efficiency and
water conservation by such other means as the Secretary
determines are appropriate; and
``(L) integrated utility management and capital
planning to maximize energy conservation and efficiency
measures.''; and
(2) in subsection (e)(2)(C)--
(A) by striking ``The'' and inserting the
following:
``(i) In general.--The''; and
(B) by adding at the end the following:
``(ii) Third party contracts.--Contracts
described in clause (i) may include contracts
for equipment conversions to less costly
utility sources, projects with resident-paid
utilities, and adjustments to frozen base year
consumption, including systems repaired to meet
applicable building and safety codes and
adjustments for occupancy rates increased by
rehabilitation.
``(iii) Term of contract.--The total term
of a contract described in clause (i) shall not
exceed 20 years to allow longer payback periods
for retrofits, including windows, heating
system replacements, wall insulation, site-
based generation, advanced energy savings
technologies, including renewable energy
generation, and other such retrofits.''.

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

Section 251(b)(1) of the National Energy Conservation Policy Act
(42 U.S.C. 8231(1)) is amended--
(1) by striking ``financed with loans'' and inserting
``assisted'';
(2) by inserting after ``1959,'' the following: ``which are
eligible multifamily housing projects (as such term is defined
in section 512 of the Multifamily Assisted Housing Reform and
Affordability Act of 1997 (42 U.S.C. 1437f note)) and are
subject to mortgage restructuring and rental assistance
sufficiency plans under such Act,''; and
(3) by inserting after the period at the end of the first
sentence the following new sentence: ``Such improvements may
also include the installation of energy and water conserving
fixtures and fittings that conform to the American Society of
Mechanical Engineers/American National Standards Institute
standards A112.19.2-1998 and A112.18.1-2000, or any revision
thereto, applicable at the time of installation.''.

SEC. 146. NORTH AMERICAN DEVELOPMENT BANK.

Part 2 of subtitle D of title V of the North American Free Trade
Agreement Implementation Act (22 U.S.C. 290m-290m-3) is amended by
adding at the end the following:

``SEC. 545. SUPPORT FOR CERTAIN ENERGY POLICIES.

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

SEC. 147. ENERGY-EFFICIENT APPLIANCES.

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

SEC. 148. ENERGY EFFICIENCY STANDARDS.

Section 109 of the Cranston-Gonzalez National Affordable Housing
Act (42 U.S.C. 12709) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) by striking ``1 year after the date of
the enactment of the Energy Policy Act of
1992'' and inserting ``September 30, 2004'';
(ii) in subparagraph (A), by striking
``and'' at the end;
(iii) in subparagraph (B), by striking the
period at the end and inserting ``; and''; and
(iv) by adding at the end the following:
``(C) rehabilitation and new construction of public
and assisted housing funded by HOPE VI revitalization
grants under section 24 of the United States Housing
Act of 1937 (42 U.S.C. 1437v), where such standards are
determined to be cost effective by the Secretary of
Housing and Urban Development.''; and
(B) in paragraph (2), by striking ``Council of
American'' and all that follows through ``90.1-1989')''
and inserting ``2003 International Energy Conservation
Code'';
(2) in subsection (b)--
(A) by striking ``within 1 year after the date of
the enactment of the Energy Policy Act of 1992'' and
inserting ``by September 30, 2004''; and
(B) by striking ``CABO'' and all that follows
through ``1989'' and inserting ``the 2003 International
Energy Conservation Code''; and
(3) in subsection (c)--
(A) in the heading, by striking ``Model Energy
Code'' and inserting ``The International Energy
Conservation Code''; and
(B) by striking ``CABO'' and all that follows
through ``1989'' and inserting ``the 2003 International
Energy Conservation Code''.

SEC. 149. ENERGY STRATEGY FOR HUD.

The Secretary of Housing and Urban Development shall develop and
implement an integrated strategy to reduce utility expenses through
cost-effective energy conservation and efficiency measures and energy
efficient design and construction of public and assisted housing. The
energy strategy shall include the development of energy reduction goals
and incentives for public housing agencies. The Secretary shall submit
a report to Congress, not later than 1 year after the date of the
enactment of this Act, on the energy strategy and the actions taken by
the Department of Housing and Urban Development to monitor the energy
usage of public housing agencies and shall submit an update every 2
years thereafter on progress in implementing the strategy.

TITLE II--RENEWABLE ENERGY

Subtitle A--General Provisions

SEC. 201. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.

(a) Resource Assessment.--Not later than 6 months after the date of
enactment of this Act, and each year thereafter, the Secretary of
Energy shall review the available assessments of renewable energy
resources within the United States, including solar, wind, biomass,
ocean (tidal, wave, current, and thermal), geothermal, and
hydroelectric energy resources, and undertake new assessments as
necessary, taking into account changes in market conditions, available
technologies, and other relevant factors.
(b) Contents of Reports.--Not later than 1 year after the date of
enactment of this Act, and each year thereafter, the Secretary shall
publish a report based on the assessment under subsection (a). The
report shall contain--
(1) a detailed inventory describing the available amount
and characteristics of the renewable energy resources; and
(2) such other information as the Secretary believes would
be useful in developing such renewable energy resources,
including descriptions of surrounding terrain, population and
load centers, nearby energy infrastructure, location of energy
and water resources, and available estimates of the costs
needed to develop each resource, together with an
identification of any barriers to providing adequate
transmission for remote sources of renewable energy resources
to current and emerging markets, recommendations for removing
or addressing such barriers, and ways to provide access to the
grid that do not unfairly disadvantage renewable or other
energy producers.
(c) Authorization of Appropriations.--For the purposes of this
section, there are authorized to be appropriated to the Secretary of
Energy $10,000,000 for each of fiscal years 2004 through 2008.

SEC. 202. RENEWABLE ENERGY PRODUCTION INCENTIVE.

(a) Incentive Payments.--Section 1212(a) of the Energy Policy Act
of 1992 (42 U.S.C. 13317(a)) is amended by striking ``and which
satisfies'' and all that follows through ``Secretary shall establish.''
and inserting ``. If there are insufficient appropriations to make full
payments for electric production from all qualified renewable energy
facilities in any given year, the Secretary shall assign 60 percent of
appropriated funds for that year to facilities that use solar, wind,
geothermal, or closed-loop (dedicated energy crops) biomass
technologies to generate electricity, and assign the remaining 40
percent to other projects. The Secretary may, after transmitting to
Congress an explanation of the reasons therefor, alter the percentage
requirements of the preceding sentence.''.
(b) Qualified Renewable Energy Facility.--Section 1212(b) of the
Energy Policy Act of 1992 (42 U.S.C. 13317(b)) is amended--
(1) by striking ``a State or any political'' and all that
follows through ``nonprofit electrical cooperative'' and
inserting ``a not-for-profit electric cooperative, a public
utility described in section 115 of the Internal Revenue Code
of 1986, a State, Commonwealth, territory, or possession of the
United States or the District of Columbia, or a political
subdivision thereof, or an Indian tribal government or
subdivision thereof,''; and
(2) by inserting ``landfill gas,'' after ``wind,
biomass,''.
(c) Eligibility Window.--Section 1212(c) of the Energy Policy Act
of 1992 (42 U.S.C. 13317(c)) is amended by striking ``during the 10-
fiscal year period beginning with the first full fiscal year occurring
after the enactment of this section'' and inserting ``after October 1,
2003, and before October 1, 2013''.
(d) Amount of Payment.--Section 1212(e)(1) of the Energy Policy Act
of 1992 (42 U.S.C. 13317(e)(1)) is amended by inserting ``landfill
gas,'' after ``wind, biomass,''.
(e) Sunset.--Section 1212(f) of the Energy Policy Act of 1992 (42
U.S.C. 13317(f)) is amended by striking ``the expiration of'' and all
that follows through ``of this section'' and inserting ``September 30,
2023''.
(f) Authorization of Appropriations.--Section 1212(g) of the Energy
Policy Act of 1992 (42 U.S.C. 13317(g)) is amended to read as follows:
``(g) Authorization of Appropriations.--
``(1) In general.--Subject to paragraph (2), there are
authorized to be appropriated such sums as may be necessary to
carry out this section for fiscal years 2003 through 2023.
``(2) Availability of funds.--Funds made available under
paragraph (1) shall remain available until expended.''.

SEC. 203. FEDERAL PURCHASE REQUIREMENT.

(a) Requirement.--The President, acting through the Secretary of
Energy, shall seek to ensure that, to the extent economically feasible
and technically practicable, of the total amount of electric energy the
Federal Government consumes during any fiscal year, the following
amounts shall be renewable energy:
(1) Not less than 3 percent in fiscal years 2005 through
2007.
(2) Not less than 5 percent in fiscal years 2008 through
2010.
(3) Not less than 7.5 percent in fiscal year 2011 and each
fiscal year thereafter.
(b) Definitions.--In this section:
(1) Biomass.--The term ``biomass'' means any solid,
nonhazardous, cellulosic material that is derived from--
(A) any of the following forest-related resources:
mill residues, precommercial thinnings, slash, and
brush, or nonmerchantable material;
(B) solid wood waste materials, including waste
pallets, crates, dunnage, manufacturing and
construction wood wastes (other than pressure-treated,
chemically-treated, or painted wood wastes), and
landscape or right-of-way tree trimmings, but not
including municipal solid waste (garbage), gas derived
from the biodegradation of solid waste, or paper that
is commonly recycled;
(C) agriculture wastes, including orchard tree
crops, vineyard, grain, legumes, sugar, and other crop
by-products or residues, and livestock waste nutrients;
or
(D) a plant that is grown exclusively as a fuel for
the production of electricity.
(2) Renewable energy.--The term ``renewable energy'' means
electric energy generated from solar, wind, biomass, landfill
gas, geothermal, municipal solid waste, or new hydroelectric
generation capacity achieved from increased efficiency or
additions of new capacity at an existing hydroelectric project.
(c) Calculation.--For purposes of determining compliance with the
requirement of this section, the amount of renewable energy shall be
doubled if--
(1) the renewable energy is produced and used on-site at a
Federal facility;
(2) the renewable energy is produced on Federal lands and
used at a Federal facility; or
(3) the renewable energy is produced on Indian land as
defined in title XXVI of the Energy Policy Act of 1992 (25
U.S.C. 3501 et. seq.) and used at a Federal facility.
(d) Report.--Not later than April 15, 2005, and every 2 years
thereafter, the Secretary of Energy shall provide a report to Congress
on the progress of the Federal Government in meeting the goals
established by this section.

SEC. 204. INSULAR AREAS ENERGY SECURITY.

Section 604 of the Act entitled ``An Act to authorize
appropriations for certain insular areas of the United States, and for
other purposes'', approved December 24, 1980 (48 U.S.C. 1492), is
amended--
(1) in subsection (a)(4) by striking the period and
inserting a semicolon;
(2) by adding at the end of subsection (a) the following
new paragraphs:
``(5) electric power transmission and distribution lines in
insular areas are inadequate to withstand damage caused by the
hurricanes and typhoons which frequently occur in insular areas
and such damage often costs millions of dollars to repair; and
``(6) the refinement of renewable energy technologies since
the publication of the 1982 Territorial Energy Assessment
prepared pursuant to subsection (c) reveals the need to
reassess the state of energy production, consumption,
infrastructure, reliance on imported energy, opportunities for
energy conservation and increased energy efficiency, and
indigenous sources in regard to the insular areas.'';
(3) by amending subsection (e) to read as follows:
``(e)(1) The Secretary of the Interior, in consultation with the
Secretary of Energy and the head of government of each insular area,
shall update the plans required under subsection (c) by--
``(A) updating the contents required by subsection (c);
``(B) drafting long-term energy plans for such insular
areas with the objective of reducing, to the extent feasible,
their reliance on energy imports by the year 2010, increasing
energy conservation and energy efficiency, and maximizing, to
the extent feasible, use of indigenous energy sources; and
``(C) drafting long-term energy transmission line plans for
such insular areas with the objective that the maximum
percentage feasible of electric power transmission and
distribution lines in each insular area be protected from
damage caused by hurricanes and typhoons.
``(2) Not later than December 31, 2005, the Secretary of the
Interior shall submit to Congress the updated plans for each insular
area required by this subsection.''; and
(4) by amending subsection (g)(4) to read as follows:
``(4) Power line grants for insular areas.--
``(A) In general.--The Secretary of the Interior is
authorized to make grants to governments of insular
areas of the United States to carry out eligible
projects to protect electric power transmission and
distribution lines in such insular areas from damage
caused by hurricanes and typhoons.
``(B) Eligible projects.--The Secretary may award
grants under subparagraph (A) only to governments of
insular areas of the United States that submit written
project plans to the Secretary for projects that meet
the following criteria:
``(i) The project is designed to protect
electric power transmission and distribution
lines located in 1 or more of the insular areas
of the United States from damage caused by
hurricanes and typhoons.
``(ii) The project is likely to
substantially reduce the risk of future damage,
hardship, loss, or suffering.
``(iii) The project addresses 1 or more
problems that have been repetitive or that pose
a significant risk to public health and safety.
``(iv) The project is not likely to cost
more than the value of the reduction in direct
damage and other negative impacts that the
project is designed to prevent or mitigate. The
cost benefit analysis required by this
criterion shall be computed on a net present
value basis.
``(v) The project design has taken into
consideration long-term changes to the areas
and persons it is designed to protect and has
manageable future maintenance and modification
requirements.
``(vi) The project plan includes an
analysis of a range of options to address the
problem it is designed to prevent or mitigate
and a justification for the selection of the
project in light of that analysis.
``(vii) The applicant has demonstrated to
the Secretary that the matching funds required
by subparagraph (D) are available.
``(C) Priority.--When making grants under this
paragraph, the Secretary shall give priority to grants
for projects which are likely to--
``(i) have the greatest impact on reducing
future disaster losses; and
``(ii) best conform with plans that have
been approved by the Federal Government or the
government of the insular area where the
project is to be carried out for development or
hazard mitigation for that insular area.
``(D) Matching requirement.--The Federal share of
the cost for a project for which a grant is provided
under this paragraph shall not exceed 75 percent of the
total cost of that project. The non-Federal share of
the cost may be provided in the form of cash or
services.
``(E) Treatment of funds for certain purposes.--
Grants provided under this paragraph shall not be
considered as income, a resource, or a duplicative
program when determining eligibility or benefit levels
for Federal major disaster and emergency assistance.
``(F) Authorization of appropriations.--There are
authorized to be appropriated to carry out this
paragraph $5,000,000 for each fiscal year beginning
after the date of the enactment of this paragraph.''.

SEC. 205. USE OF PHOTOVOLTAIC ENERGY IN PUBLIC BUILDINGS.

(a) In General.--Subchapter VI of chapter 31 of title 40, United
States Code, is amended by adding at the end the following:
``Sec. 3177. Use of photovoltaic energy in public buildings
``(a) Photovoltaic Energy Commercialization Program.--
``(1) In general.--The Administrator of General Services
may establish a photovoltaic energy commercialization program
for the procurement and installation of photovoltaic solar
electric systems for electric production in new and existing
public buildings.
``(2) Purposes.--The purposes of the program shall be to
accomplish the following:
``(A) To accelerate the growth of a commercially
viable photovoltaic industry to make this energy system
available to the general public as an option which can
reduce the national consumption of fossil fuel.
``(B) To reduce the fossil fuel consumption and
costs of the Federal Government.
``(C) To attain the goal of installing solar energy
systems in 20,000 Federal buildings by 2010, as
contained in the Federal Government's Million Solar
Roof Initiative of 1997.
``(D) To stimulate the general use within the
Federal Government of life-cycle costing and innovative
procurement methods.
``(E) To develop program performance data to
support policy decisions on future incentive programs
with respect to energy.
``(3) Acquisition of photovoltaic solar electric systems.--
``(A) In general.--The program shall provide for
the acquisition of photovoltaic solar electric systems
and associated storage capability for use in public
buildings.
``(B) Acquisition levels.--The acquisition of
photovoltaic electric systems shall be at a level
substantial enough to allow use of low-cost production
techniques with at least 150 megawatts (peak)
cumulative acquired during the 5 years of the program.
``(4) Administration.--The Administrator shall administer
the program and shall--
``(A) issue such rules and regulations as may be
appropriate to monitor and assess the performance and
operation of photovoltaic solar electric systems
installed pursuant to this subsection;
``(B) develop innovative procurement strategies for
the acquisition of such systems; and
``(C) transmit to Congress an annual report on the
results of the program.
``(b) Photovoltaic Systems Evaluation Program.--
``(1) In general.--Not later than 60 days after the date of
enactment of this section, the Administrator, in consultation
with the Secretary of Energy, shall establish a photovoltaic
solar energy systems evaluation program to evaluate such
photovoltaic solar energy systems as are required in public
buildings.
``(2) Program requirement.--In evaluating photovoltaic
solar energy systems under the program, the Administrator shall
ensure that such systems reflect the most advanced technology.
``(c) Authorization of Appropriations.--
``(1) Photovoltaic energy commercialization program.--There
are authorized to be appropriated to carry out subsection (a)
$50,000,000 for each of fiscal years 2004 through 2008. Such
sums shall remain available until expended.
``(2) Photovoltaic systems evaluation program.--There are
authorized to be appropriated to carry out subsection (b)
$10,000,000 for each of fiscal years 2004 through 2008. Such
sums shall remain available until expended.''.
(b) Conforming Amendment.--The section analysis for such chapter is
amended by inserting after the item relating to section 3176 the
following:

``3177. Use of photovoltaic energy in public buildings.''.

SEC. 206. GRANTS TO IMPROVE THE COMMERCIAL VALUE OF FOREST BIOMASS FOR
ELECTRIC ENERGY, USEFUL HEAT, TRANSPORTATION FUELS,
PETROLEUM-BASED PRODUCT SUBSTITUTES, AND OTHER COMMERCIAL
PURPOSES.

(a) Findings.--Congress finds the following:
(1) Thousands of communities in the United States, many
located near Federal lands, are at risk to wildfire.
Approximately 190,000,000 acres of land managed by the
Secretary of Agriculture and the Secretary of the Interior are
at risk of catastrophic fire in the near future. The
accumulation of heavy forest fuel loads continues to increase
as a result of disease, insect infestations, and drought,
further raising the risk of fire each year.
(2) In addition, more than 70,000,000 acres across all land
ownerships are at risk to higher than normal mortality over the
next 15 years from insect infestation and disease. High levels
of tree mortality from insects and disease result in increased
fire risk, loss of old growth, degraded watershed conditions,
and changes in species diversity and productivity, as well as
diminished fish and wildlife habitat and decreased timber
values.
(3) Preventive treatments such as removing fuel loading,
ladder fuels, and hazard trees, planting proper species mix and
restoring and protecting early successional habitat, and other
specific restoration treatments designed to reduce the
susceptibility of forest land, woodland, and rangeland to
insect outbreaks, disease, and catastrophic fire present the
greatest opportunity for long-term forest health by creating a
mosaic of species-mix and age distribution. Such prevention
treatments are widely acknowledged to be more successful and
cost effective than suppression treatments in the case of
insects, disease, and fire.
(4) The byproducts of preventive treatment (wood, brush,
thinnings, chips, slash, and other hazardous fuels) removed
from forest lands, woodlands and rangelands represent an
abundant supply of biomass for biomass-to-energy facilities and
raw material for business. There are currently few markets for
the extraordinary volumes of byproducts being generated as a
result of the necessary large-scale preventive treatment
activities.
(5) The United States should--
(A) promote economic and entrepreneurial
opportunities in using byproducts removed through
preventive treatment activities related to hazardous
fuels reduction, disease, and insect infestation; and
(B) develop and expand markets for traditionally
underused wood and biomass as an outlet for byproducts
of preventive treatment activities.
(b) Definitions.--In this section:
(1) Biomass.--The term ``biomass'' means trees and woody
plants, including limbs, tops, needles, and other woody parts,
and byproducts of preventive treatment, such as wood, brush,
thinnings, chips, and slash, that are removed--
(A) to reduce hazardous fuels; or
(B) to reduce the risk of or to contain disease or
insect infestation.
(2) Indian tribe.--The term ``Indian tribe'' has the
meaning given the term in section 4(e) of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b(e)).
(3) Person.--The term ``person'' includes--
(A) an individual;
(B) a community (as determined by the Secretary
concerned);
(C) an Indian tribe;
(D) a small business, micro-business, or a
corporation that is incorporated in the United States;
and
(E) a nonprofit organization.
(4) Preferred community.--The term ``preferred community''
means--
(A) any town, township, municipality, or other
similar unit of local government (as determined by the
Secretary concerned) that--
(i) has a population of not more than
50,000 individuals; and
(ii) the Secretary concerned, in the sole
discretion of the Secretary concerned,
determines contains or is located near land,
the condition of which is at significant risk
of catastrophic wildfire, disease, or insect
infestation or which suffers from disease or
insect infestation; or
(B) any county that--
(i) is not contained within a metropolitan
statistical area; and
(ii) the Secretary concerned, in the sole
discretion of the Secretary concerned,
determines contains or is located near land,
the condition of which is at significant risk
of catastrophic wildfire, disease, or insect
infestation or which suffers from disease or
insect infestation.
(5) Secretary concerned.--The term ``Secretary concerned''
means--
(A) the Secretary of Agriculture with respect to
National Forest System lands; and
(B) the Secretary of the Interior with respect to
Federal lands under the jurisdiction of the Secretary
of the Interior and Indian lands.
(c) Biomass Commercial Use Grant Program.--
(1) In general.--The Secretary concerned may make grants to
any person that owns or operates a facility that uses biomass
as a raw material to produce electric energy, sensible heat,
transportation fuels, or substitutes for petroleum-based
products to offset the costs incurred to purchase biomass for
use by such facility.
(2) Grant amounts.--A grant under this subsection may not
exceed $20 per green ton of biomass delivered.
(3) Monitoring of grant recipient activities.--As a
condition of a grant under this subsection, the grant recipient
shall keep such records as the Secretary concerned may require
to fully and correctly disclose the use of the grant funds and
all transactions involved in the purchase of biomass. Upon
notice by a representative of the Secretary concerned, the
grant recipient shall afford the representative reasonable
access to the facility that purchases or uses biomass and an
opportunity to examine the inventory and records of the
facility.
(d) Improved Biomass Use Grant Program.--
(1) In general.--The Secretary concerned may make grants to
persons to offset the cost of projects to develop or research
opportunities to improve the use of, or add value to, biomass.
In making such grants, the Secretary concerned shall give
preference to persons in preferred communities.
(2) Selection.--The Secretary concerned shall select a
grant recipient under paragraph (1) after giving consideration
to the anticipated public benefits of the project, including
the potential to develop thermal or electric energy resources
or affordable energy, opportunities for the creation or
expansion of small businesses and micro-businesses, and the
potential for new job creation.
(3) Grant amount.--A grant under this subsection may not
exceed $500,000.
(e) Authorization of Appropriations.--There are authorized to be
appropriated $50,000,000 for each of the fiscal years 2004 through 2014
to carry out this section.
(f) Report.--Not later than October 1, 2010, the Secretary of
Agriculture, in consultation with the Secretary of the Interior, shall
submit to the Committee on Energy and Natural Resources and the
Committee on Agriculture, Nutrition, and Forestry of the Senate and the
Committee on Resources, the Committee on Energy and Commerce, and the
Committee on Agriculture of the House of Representatives a report
describing the results of the grant programs authorized by this
section. The report shall include the following:
(1) An identification of the size, type, and the use of
biomass by persons that receive grants under this section.
(2) The distance between the land from which the biomass
was removed and the facility that used the biomass.
(3) The economic impacts, particularly new job creation,
resulting from the grants to and operation of the eligible
operations.

SEC. 207. BIOBASED PRODUCTS.

Section 9002(c)(1) of the Farm Security and Rural Investment Act of
2002 (7 U.S.C. 8102(c)(1)) is amended by inserting ``or such items that
comply with the regulations issued under section 103 of Public Law 100-
556 (42 U.S.C. 6914b-1)'' after ``practicable''.

Subtitle B--Geothermal Energy

SEC. 211. SHORT TITLE.

This subtitle may be cited as the ``John Rishel Geothermal Steam
Act Amendments of 2004''.

SEC. 212. COMPETITIVE LEASE SALE REQUIREMENTS.

Section 4 of the Geothermal Steam Act of 1970 (30 U.S.C. 1003) is
amended to read as follows:

``SEC. 4. LEASING PROCEDURES.

``(a) Nominations.--The Secretary shall accept nominations of lands
to be leased at any time from qualified companies and individuals under
this Act.
``(b) Competitive Lease Sale Required.--The Secretary shall hold a
competitive lease sale at least once every 2 years for lands in a State
which has nominations pending under subsection (a) if such lands are
otherwise available for leasing.
``(c) Noncompetitive Leasing.--The Secretary shall make available
for a period of 2 years for noncompetitive leasing any tract for which
a competitive lease sale is held, but for which the Secretary does not
receive any bids in a competitive lease sale.
``(d) Leases Sold as a Block.--If information is available to the
Secretary indicating a geothermal resource that could be produced as 1
unit can reasonably be expected to underlie more than 1 parcel to be
offered in a competitive lease sale, the parcels for such a resource
may be offered for bidding as a block in the competitive lease sale.
``(e) Pending Lease Applications on April 1, 2003.--It shall be a
priority for the Secretary of the Interior, and for the Secretary of
Agriculture with respect to National Forest Systems lands, to ensure
timely completion of administrative actions necessary to process
applications for geothermal leasing pending on April 1, 2003. Such an
application, and any lease issued pursuant to such an application--
``(1) except as provided in paragraph (2), shall be subject
to this section as in effect on April 1, 2003; or
``(2) at the election of the applicant, shall be subject to
this section as in effect on the effective date of this
paragraph.''.

SEC. 213. DIRECT USE.

(a) Fees for Direct Use.--Section 5 of the Geothermal Steam Act of
1970 (30 U.S.C. 1004) is amended--
(1) in paragraph (c) by redesignating subparagraphs (1) and
(2) as subparagraphs (A) and (B);
(2) by redesignating paragraphs (a) through (d) in order as
paragraphs (1) through (4);
(3) by inserting ``(a) In General.--'' after ``Sec. 5.'';
and
(4) by adding at the end the following:
``(b) Direct Use.--Notwithstanding subsection (a)(1), with respect
to the direct use of geothermal resources for purposes other than the
commercial generation of electricity, the Secretary of the Interior
shall establish a schedule of fees and collect fees pursuant to such a
schedule in lieu of royalties based upon the total amount of the
geothermal resources used. The schedule of fees shall ensure that there
is a fair return to the public for the use of a geothermal resource
based upon comparable fees charged for direct use of geothermal
resources by States or private persons. For direct use by a State or
local government for public purposes there shall be no royalty and the
fee charged shall be nominal. Leases in existence on the date of
enactment of the Energy Policy Act of 2003 shall be modified in order
to reflect the provisions of this subsection.''.
(b) Leasing for Direct Use.--Section 4 of the Geothermal Steam Act
of 1970 (30 U.S.C. 1003) is further amended by adding at the end the
following:
``(f) Leasing for Direct Use of Geothermal Resources.--Lands leased
under this Act exclusively for direct use of geothermal resources shall
be leased to any qualified applicant who first applies for such a lease
under regulations issued by the Secretary, if--
``(1) the Secretary publishes a notice of the lands
proposed for leasing 60 days before the date of the issuance of
the lease; and
``(2) the Secretary does not receive in the 60-day period
beginning on the date of such publication any nomination to
include the lands concerned in the next competitive lease sale.
``(g) Area Subject to Lease for Direct Use.--A geothermal lease for
the direct use of geothermal resources shall embrace not more than the
amount of acreage determined by the Secretary to be reasonably
necessary for such proposed utilization.''.
(c) Existing Leases With a Direct Use Facility.--
(1) Application to convert.--Any lessee under a lease under
the Geothermal Steam Act of 1970 that was issued before the
date of the enactment of this Act may apply to the Secretary of
the Interior, by not later than 18 months after the date of the
enactment of this Act, to convert such lease to a lease for
direct utilization of geothermal resources in accordance with
the amendments made by this section.
(2) Conversion.--The Secretary shall approve such an
application and convert such a lease to a lease in accordance
with the amendments by not later than 180 days after receipt of
such application, unless the Secretary determines that the
applicant is not a qualified applicant with respect to the
lease.
(3) Application of new lease terms.--The amendment made by
subsection (a)(4) shall apply with respect to payments under a
lease converted under this subsection that are due and owing to
the United States on or after July 16, 2003.

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

(a) Royalty.--Section 5 of the Geothermal Steam Act of 1970 (30
U.S.C. 1004) is further amended--
(1) in subsection (a) by striking paragraph (1) and
inserting the following:
``(1) a royalty on electricity produced using geothermal
steam and associated geothermal resources, other than direct
use of geothermal resources, that shall be--
``(A) not less than 1 percent and not more than 2.5
percent of the gross proceeds from the sale of
electricity produced from such resources during the
first 10 years of production under the lease; and
``(B) not less than 2 and not more than 5 percent
of the gross proceeds from the sale of electricity
produced from such resources during each year after
such 10-year period;''; and
(2) by adding at the end the following:
``(c) Final Regulation Establishing Royalty Rates.--In issuing any
final regulation establishing royalty rates under this section, the
Secretary shall seek--
``(1) to provide lessees a simplified administrative
system;
``(2) to encourage new development; and
``(3) to achieve the same long-term level of royalty
revenues to States and counties as the regulation in effect on
the date of enactment of this subsection.
``(d) Credits for In-Kind Payments of Electricity.--The Secretary
may provide to a lessee a credit against royalties owed under this Act,
in an amount equal to the value of electricity provided under contract
to a State or county government that is entitled to a portion of such
royalties under section 20 of this Act, section 35 of the Mineral
Leasing Act (30 U.S.C. 191), or section 6 of the Mineral Leasing Act
for Acquired Lands (30 U.S.C. 355), if--
``(1) the Secretary has approved in advance the contract
between the lessee and the State or county government for such
in-kind payments;
``(2) the contract establishes a specific methodology to
determine the value of such credits; and
``(3) the maximum credit will be equal to the royalty value
owed to the State or county that is a party to the contract and
the electricity received will serve as the royalty payment from
the Federal Government to that entity.''.
(b) Disposal of Moneys From Sales, Bonuses, Royalties, and
Rentals.--Section 20 of the Geothermal Steam Act of 1970 (30 U.S.C.
1019) is amended to read as follows:

``SEC. 20. DISPOSAL OF MONEYS FROM SALES, BONUSES, RENTALS, AND
ROYALTIES.

``(a) In General.--Except with respect to lands in the State of
Alaska, all monies received by the United States from sales, bonuses,
rentals, and royalties under this Act shall be paid into the Treasury
of the United States. Of amounts deposited under this subsection,
subject to the provisions of section 35 of the Mineral Leasing Act (30
U.S.C. 191(b)) and section 5(a)(2) of this Act--
``(1) 50 percent shall be paid to the State within the
boundaries of which the leased lands or geothermal resources
are or were located; and
``(2) 25 percent shall be paid to the County within the
boundaries of which the leased lands or geothermal resources
are or were located.
``(b) Use of Payments.--Amounts paid to a State or county under
subsection (a) shall be used consistent with the terms of section 35 of
the Mineral Leasing Act (30 U.S.C. 191).''.
(c) Near-Term Production Incentive for Existing Leases.--
(1) In general.--Notwithstanding section 5(a) of the
Geothermal Steam Act of 1970, the royalty required to be paid
shall be 50 percent of the amount of the royalty otherwise
required, on any lease issued before the date of enactment of
this Act that does not convert to new royalty terms under
subsection (e)--
(A) with respect to commercial production of energy
from a facility that begins such production in the 6-
year period beginning on the date of the enactment of
this Act; or
(B) on qualified expansion geothermal energy.
(2) 4-year application.--Paragraph (1) applies only to new
commercial production of energy from a facility in the first 4
years of such production.
(d) Definition of Qualified Expansion Geothermal Energy.--In this
section, the term ``qualified expansion geothermal energy'' means
geothermal energy produced from a generation facility for which--
(1) the production is increased by more than 10 percent as
a result of expansion of the facility carried out in the 6-year
period beginning on the date of the enactment of this Act; and
(2) such production increase is greater than 10 percent of
the average production by the facility during the 5-year period
preceding the expansion of the facility.
(e) Royalty Under Existing Leases.--
(1) In general.--Any lessee under a lease issued under the
Geothermal Steam Act of 1970 before the date of the enactment
of this Act may modify the terms of the lease relating to
payment of royalties to comply with the amendment made by
subsection (a), by applying to the Secretary of the Interior by
not later than 18 months after the date of the enactment of
this Act.
(2) Application of modification.--Such modification shall
apply to any use of geothermal steam and any associated
geothermal resources to which the amendment applies that occurs
after the date of that application.
(3) Consultation.--The Secretary--
(A) shall consult with the State and local
governments affected by any proposed changes in lease
royalty terms under this subsection; and
(B) may establish a gross proceeds percentage
within the range specified in the amendment made by
subsection (a)(1) and with the concurrence of the
lessee and the State.

SEC. 215. GEOTHERMAL LEASING AND PERMITTING ON FEDERAL LANDS.

(a) In General.--Not later than 180 days after the date of the
enactment of this section, the Secretary of the Interior and the
Secretary of Agriculture shall enter into and submit to Congress a
memorandum of understanding in accordance with this section regarding
leasing and permitting for geothermal development of public lands and
National Forest System lands under their respective jurisdictions.
(b) Lease and Permit Applications.--The memorandum of understanding
shall--
(1) identify areas with geothermal potential on lands
included in the National Forest System and, when necessary,
require review of management plans to consider leasing under
the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) as a
land use; and
(2) establish an administrative procedure for processing
geothermal lease applications, including lines of authority,
steps in application processing, and time limits for
application procession.
(c) Data Retrieval System.--The memorandum of understanding shall
establish a joint data retrieval system that is capable of tracking
lease and permit applications and providing to the applicant
information as to their status within the Departments of the Interior
and Agriculture, including an estimate of the time required for
administrative action.

SEC. 216. REVIEW AND REPORT TO CONGRESS.

The Secretary of the Interior shall promptly review and report to
Congress not later than 3 years after the date of the enactment of this
Act regarding the status of all withdrawals from leasing under the
Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) of Federal lands,
specifying for each such area whether the basis for such withdrawal
still applies.

SEC. 217. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES, DOCUMENTATION, AND
STUDIES.

(a) In General.--The Geothermal Steam Act of 1970 (30 U.S.C. 1001
et seq.) is amended by adding at the end the following:

``SEC. 30. REIMBURSEMENT FOR COSTS OF CERTAIN ANALYSES, DOCUMENTATION,
AND STUDIES.

``(a) In General.--The Secretary of the Interior may reimburse a
person that is a lessee, operator, operating rights owner, or applicant
for any lease under this Act for reasonable amounts paid by the person
for preparation for the Secretary by a contractor or other person
selected by the Secretary of any project-level analysis, documentation,
or related study required pursuant to the National Environmental Policy
Act of 1969 (42 U.S.C. 4321 et seq.) with respect to the lease.
``(b) Conditions.--The Secretary may provide reimbursement under
subsection (a) only if--
``(1) adequate funding to enable the Secretary to timely
prepare the analysis, documentation, or related study is not
appropriated;
``(2) the person paid the costs voluntarily;
``(3) the person maintains records of its costs in
accordance with regulations issued by the Secretary;
``(4) the reimbursement is in the form of a reduction in
the Federal share of the royalty required to be paid for the
lease for which the analysis, documentation, or related study
is conducted, and is agreed to by the Secretary and the person
reimbursed prior to commencing the analysis, documentation, or
related study; and
``(5) the agreement required under paragraph (4) contains
provisions--
``(A) reducing royalties owed on lease production
based on market prices;
``(B) stipulating an automatic termination of the
royalty reduction upon recovery of documented costs;
and
``(C) providing a process by which the lessee may
seek reimbursement for circumstances in which
production from the specified lease is not possible.''.
(b) Application.--The amendment made by this section shall apply
with respect to an analysis, documentation, or a related study
conducted on or after the date of enactment of this Act for any lease
entered into before, on, or after the date of enactment of this Act.
(c) Deadline for Regulations.--The Secretary shall issue
regulations implementing the amendment made by this section by not
later than 1 year after the date of enactment of this Act.

SEC. 218. ASSESSMENT OF GEOTHERMAL ENERGY POTENTIAL.

The Secretary of Interior, acting through the Director of the
United States Geological Survey and in cooperation with the States,
shall update the 1978 Assessment of Geothermal Resources, and submit
that updated assessment to Congress--
(1) not later than 3 years after the date of enactment of
this Act; and
(2) thereafter as the availability of data and developments
in technology warrant.

SEC. 219. COOPERATIVE OR UNIT PLANS.

Section 18 of the Geothermal Steam Act of 1970 (30 U.S.C. 1017) is
amended to read as follows:

``SEC. 18. UNIT AND COMMUNITIZATION AGREEMENTS.

``(a) Adoption of Units by Lessees.--
``(1) In general.--For the purpose of more properly
conserving the natural resources of any geothermal reservoir,
field, or like area, or any part thereof (whether or not any
part of the geothermal field, or like area, is then subject to
any Unit Agreement (cooperative plan of development or
operation)), lessees thereof and their representatives may
unite with each other, or jointly or separately with others, in
collectively adopting and operating under a Unit Agreement for
such field, or like area, or any part thereof including direct
use resources, if determined and certified by the Secretary to
be necessary or advisable in the public interest. A majority
interest of owners of any single lease shall have the authority
to commit that lease to a Unit Agreement. The Secretary of the
Interior may also initiate the formation of a Unit Agreement if
in the public interest.
``(2) Modification of lease requirements by secretary.--The
Secretary may, in the discretion of the Secretary, and with the
consent of the holders of leases involved, establish, alter,
change, or revoke rates of operations (including drilling,
operations, production, and other requirements) of such leases
and make conditions with reference to such leases, with the
consent of the lessees, in connection with the creation and
operation of any such Unit Agreement as the Secretary may deem
necessary or proper to secure the proper protection of the
public interest. Leases with unlike lease terms or royalty
rates do not need to be modified to be in the same unit.
``(b) Requirement of Plans Under New Leases.--The Secretary--
``(1) may provide that geothermal leases issued under this
Act shall contain a provision requiring the lessee to operate
under such a reasonable Unit Agreement; and
``(2) may prescribe such an Agreement under which such
lessee shall operate, which shall adequately protect the rights
of all parties in interest, including the United States.
``(c) Modification of Rate of Prospecting, Development, and
Production.--The Secretary may require that any Agreement authorized by
this section that applies to lands owned by the United States contain a
provision under which authority is vested in the Secretary, or any
person, committee, or State or Federal officer or agency as may be
designated in the Agreement to alter or modify from time to time the
rate of prospecting and development and the quantity and rate of
production under such an Agreement.
``(d) Exclusion From Determination of Holding or Control.--Any
lands that are subject to any Agreement approved or prescribed by the
Secretary under this section shall not be considered in determining
holdings or control under any provision of this Act.
``(e) Pooling of Certain Lands.--If separate tracts of lands cannot
be independently developed and operated to use geothermal steam and
associated geothermal resources pursuant to any section of this Act--
``(1) such lands, or a portion thereof, may be pooled with
other lands, whether or not owned by the United States, for
purposes of development and operation under a Communitization
Agreement providing for an apportionment of production or
royalties among the separate tracts of land comprising the
production unit, if such pooling is determined by the Secretary
to be in the public interest; and
``(2) operation or production pursuant to such an Agreement
shall be treated as operation or production with respect to
each tract of land that is subject to the agreement.
``(f) Unit Agreement Review.--No more than 5 years after approval
of any cooperative or Unit Agreement and at least every 5 years
thereafter, the Secretary shall review each such Agreement and, after
notice and opportunity for comment, eliminate from inclusion in such
Agreement any lands that the Secretary determines are not reasonably
necessary for Unit operations under the Agreement. Such elimination
shall be based on scientific evidence, and shall occur only if it is
determined by the Secretary to be for the purpose of conserving and
properly managing the geothermal resource. Any land so eliminated shall
be eligible for an extension under subsection (g) of section 6 if it
meets the requirements for such an extension.
``(g) Drilling or Development Contracts.--The Secretary may, on
such conditions as the Secretary may prescribe, approve drilling or
development contracts made by 1 or more lessees of geothermal leases,
with 1 or more persons, associations, or corporations if, in the
discretion of the Secretary, the conservation of natural resources or
the public convenience or necessity may require or the interests of the
United States may be best served thereby. All leases operated under
such approved drilling or development contracts, and interests
thereunder, shall be excepted in determining holdings or control under
section 7.
``(h) Coordination With State Governments.--The Secretary shall
coordinate unitization and pooling activities with the appropriate
State agencies and shall ensure that State leases included in any
unitization or pooling arrangement are treated equally with Federal
leases.''.

SEC. 220. ROYALTY ON BYPRODUCTS.

Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) is
further amended in subsection (a) by striking paragraph (2) and
inserting the following:
``(2) a royalty on any byproduct that is a mineral named in
the first section of the Mineral Leasing Act (30 U.S.C. 181),
and that is derived from production under the lease, at the
rate of the royalty that applies under that Act to production
of such mineral under a lease under that Act;''.

SEC. 221. REPEAL OF AUTHORITIES OF SECRETARY TO READJUST TERMS,
CONDITIONS, RENTALS, AND ROYALTIES.

Section 8 of the Geothermal Steam Act of 1970 (30 U.S.C. 1007) is
amended by repealing subsection (b), and by redesignating subsection
(c) as subsection (b).

SEC. 222. CREDITING OF RENTAL TOWARD ROYALTY.

Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) is
further amended--
(1) in subsection (a)(2) by inserting ``and'' after the
semicolon at the end;
(2) in subsection (a)(3) by striking ``; and'' and
inserting a period;
(3) by striking paragraph (4) of subsection (a); and
(4) by adding at the end the following:
``(e) Crediting of Rental Toward Royalty.--Any annual rental under
this section that is paid with respect to a lease before the first day
of the year for which the annual rental is owed shall be credited to
the amount of royalty that is required to be paid under the lease for
that year.''.

SEC. 223. LEASE DURATION AND WORK COMMITMENT REQUIREMENTS.

Section 6 of the Geothermal Steam Act of 1970 (30 U.S.C. 1005) is
amended--
(1) by striking so much as precedes subsection (c), and
striking subsections (e), (g), (h), (i), and (j);
(2) by redesignating subsections (c), (d), and (f) in order
as subsections (g), (h), and (i); and
(3) by inserting before subsection (g), as so redesignated,
the following:

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

``(a) In General.--
``(1) Primary term.--A geothermal lease shall be for a
primary term of 10 years.
``(2) Initial extension.--The Secretary shall extend the
primary term of a geothermal lease for 5 years if, for each
year after the fifth year of the lease--
``(A) the Secretary determined under subsection (c)
that the lessee satisfied the work commitment
requirements that applied to the lease for that year;
or
``(B) the lessee paid in accordance with subsection
(d) the value of any work that was not completed in
accordance with those requirements.
``(3) Additional extension.--The Secretary shall extend the
primary term of a geothermal lease (after an initial extension
under paragraph (2)) for an additional 5 years if, for each
year of the initial extension under paragraph (2), the
Secretary determined under subsection (c) that the lessee
satisfied the work commitment requirements that applied to the
lease for that year.
``(b) Requirement to Satisfy Annual Work Commitment Requirement.--
``(1) In general.--The lessee for a geothermal lease shall,
for each year after the fifth year of the lease, satisfy work
commitment requirements prescribed by the Secretary that apply
to the lease for that year.
``(2) Prescription of work commitment requirements.--The
Secretary shall issue regulations prescribing minimum
equivalent dollar value work commitment requirements for
geothermal leases, that--
``(A) require that a lessee, in each year after the
fifth year of the primary term of a geothermal lease,
diligently work to achieve commercial production or
utilization of steam under the lease;
``(B) require that in each year to which work
commitment requirements under the regulations apply,
the lessee shall significantly reduce the amount of
work that remains to be done to achieve such production
or utilization;
``(C) describe specific work that must be completed
by a lessee by the end of each year to which the work
commitment requirements apply and factors, such as
force majeure events, that suspend or modify the work
commitment obligation;
``(D) carry forward and apply to work commitment
requirements for a year, work completed in any year in
the preceding 3-year period that was in excess of the
work required to be performed in that preceding year;
``(E) establish transition rules for leases issued
before the date of the enactment of this subsection,
including terms under which a lease that is near the
end of its term on the date of enactment of this
subsection may be extended for up to 2 years--
``(i) to allow achievement of production
under the lease; or
``(ii) to allow the lease to be included in
a producing unit; and
``(F) establish an annual payment that, at the
option of the lessee, may be exercised in lieu of
meeting any work requirement for a limited number of
years that the Secretary determines will not impair
achieving diligent development of the geothermal
resource.
``(3) Termination of application of requirements.--Work
commitment requirements prescribed under this subsection shall
not apply to a geothermal lease after the date on which
geothermal steam is produced or utilized under the lease in
commercial quantities.
``(c) Determination of Whether Requirements Satisfied.--The
Secretary shall, by not later than 90 days after the end of each year
for which work commitment requirements under subsection (b) apply to a
geothermal lease--
``(1) determine whether the lessee has satisfied the
requirements that apply for that year;
``(2) notify the lessee of that determination; and
``(3) in the case of a notification that the lessee did not
satisfy work commitment requirements for the year, include in
the notification--
``(A) a description of the specific work that was
not completed by the lessee in accordance with the
requirements; and
``(B) the amount of the dollar value of such work
that was not completed, reduced by the amount of
expenditures made for work completed in a prior year
that is carried forward pursuant to subsection
(b)(2)(D).
``(d) Payment of Value of Uncompleted Work.--
``(1) In general.--If the Secretary notifies a lessee that
the lessee failed to satisfy work commitment requirements under
subsection (b), the lessee shall pay to the Secretary, by not
later than the end of the 60-day period beginning on the date
of the notification, the dollar value of work that was not
completed by the lessee, in the amount stated in the
notification (as reduced under subsection (c)(3)(B)).
``(2) Failure to pay value of uncompleted work.--If a
lessee fails to pay such amount to the Secretary before the end
of that period, the lease shall terminate upon the expiration
of the period.
``(e) Continuation After Commercial Production or Utilization.--If
geothermal steam is produced or utilized in commercial quantities
within the primary term of the lease under subsection (a) (including
any extension of the lease under subsection (a)), such lease shall
continue until the date on which geothermal steam is no longer produced
or utilized in commercial quantities.
``(f) Conversion of Geothermal Lease to Mineral Lease.--The lessee
under a lease that has produced geothermal steam for electrical
generation, has been determined by the Secretary to be incapable of any
further commercial production or utilization of geothermal steam, and
that is producing any valuable byproduct in payable quantities may,
within 6 months after such determination--
``(1) convert the lease to a mineral lease under the
Mineral Leasing Act (30 U.S.C. 181 et seq.) or under the
Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.),
if the lands that are subject to the lease can be leased under
that Act for the production of such byproduct; or
``(2) convert the lease to a mining claim under the general
mining laws, if the byproduct is a locatable mineral.''.

SEC. 224. ADVANCED ROYALTIES REQUIRED FOR SUSPENSION OF PRODUCTION.

Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) is
further amended by adding at the end the following:
``(f) Advanced Royalties Required for Suspension of Production.--
``(1) Continuation of lease following cessation of
production.--If, at any time after commercial production under
a lease is achieved, production ceases for any cause the lease
shall remain in full force and effect--
``(A) during the 1-year period beginning on the
date production ceases; and
``(B) after such period if, and so long as, the
lessee commences and continues diligently and in good
faith until such production is resumed the steps,
operations, or procedures necessary to cause a
resumption of such production.
``(2) If production of heat or energy under a geothermal
lease is suspended after the date of any such production for
which royalty is required under subsection (a) and the terms of
paragraph (1) are not met, the Secretary shall require the
lessee, until the end of such suspension, to pay royalty in
advance at the monthly pro-rata rate of the average annual rate
at which such royalty was paid each year in the 5-year-period
preceding the date of suspension.
``(3) Paragraph (2) shall not apply if the suspension is
required or otherwise caused by the Secretary, the Secretary of
a military department, a State or local government, or a force
majeure.''.

SEC. 225. ANNUAL RENTAL.

(a) Annual Rental Rate.--Section 5 of the Geothermal Steam Act of
1970 (30 U.S.C. 1004) is further amended in subsection (a) in paragraph
(3) by striking ``$1 per acre or fraction thereof for each year of the
lease'' and all that follows through the end of the paragraph and
inserting ``$1 per acre or fraction thereof for each year of the lease
through the tenth year in the case of a lease awarded in a
noncompetitive lease sale; or $2 per acre or fraction thereof for the
first year, $3 per acre or fraction thereof for each of the second
through tenth years, in the case of a lease awarded in a competitive
lease sale; and $5 per acre or fraction thereof for each year after the
10th year thereof for all leases.''.
(b) Termination of Lease for Failure to Pay Rental.--Section 5 of
the Geothermal Steam Act of 1970 (30 U.S.C. 1004) is further amended by
adding at the end the following:
``(g) Termination of Lease for Failure to Pay Rental.--
``(1) In general.--The Secretary shall terminate any lease
with respect to which rental is not paid in accordance with
this Act and the terms of the lease under which the rental is
required, upon the expiration of the 45-day period beginning on
the date of the failure to pay such rental.
``(2) Notification.--The Secretary shall promptly notify a
lessee that has not paid rental required under the lease that
the lease will be terminated at the end of the period referred
to in paragraph (1).
``(3) Reinstatement.--A lease that would otherwise
terminate under paragraph (1) shall not terminate under that
paragraph if the lessee pays to the Secretary, before the end
of the period referred to in paragraph (1), the amount of
rental due plus a late fee equal to 10 percent of such
amount.''.

SEC. 226. LEASING AND PERMITTING ON FEDERAL LANDS WITHDRAWN FOR
MILITARY PURPOSES.

Not later than 2 years after the date of enactment of this Act, the
Secretary of the Interior and the Secretary of Defense, in consultation
with each military service and with interested States, counties,
representatives of the geothermal industry, and other persons, shall
submit to Congress a joint report concerning leasing and permitting
activities for geothermal energy on Federal lands withdrawn for
military purposes. Such report shall include the following:
(1) A description of the Military Geothermal Program,
including any differences between it and the non-Military
Geothermal Program, including required security procedures, and
operational considerations, and discussions as to the
differences, and why they are important. Further, the report
shall describe revenues or energy provided to the Department of
Defense and its facilities, royalty structures, where
applicable, and any revenue sharing with States and counties or
other benefits between--
(A) the implementation of the Geothermal Steam Act
of 1970 (30 U.S.C 1001 et seq.) and other applicable
Federal law by the Secretary of the Interior; and
(B) the administration of geothermal leasing under
section 2689 of title 10, United States Code, by the
Secretary of Defense.
(2) If appropriate, a description of the current methods
and procedures used to ensure interagency coordination, where
needed, in developing renewable energy sources on Federal lands
withdrawn for military purposes, and an identification of any
new procedures that might be required in the future for the
improvement of interagency coordination to ensure efficient
processing and administration of leases or contracts for
geothermal energy on Federal lands withdrawn for military
purposes, consistent with the defense purposes of such
withdrawals.
(3) Recommendations for any legislative or administrative
actions that might better achieve increased geothermal
production, including a common royalty structure, leasing
procedures, or other changes that increase production, offset
military operation costs, or enhance the Federal agencies'
ability to develop geothermal resources.
Except as provided in this section, nothing in this subtitle shall
affect the legal status of the Department of the Interior and the
Department of the Defense with respect to each other regarding
geothermal leasing and development until such status is changed by law.

SEC. 227. TECHNICAL AMENDMENTS.

The Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) is
further amended as follows:
(1) By striking ``geothermal steam and associated
geothermal resources'' each place it appears and inserting
``geothermal resources''.
(2) Section 2(e) (30 U.S.C. 1001(e)) is amended to read as
follows:
``(e) `direct use' means utilization of geothermal
resources for commercial, residential, agricultural, public
facilities, or other energy needs other than the commercial
production of electricity; and''.
(3) Section 21 (30 U.S.C. 1020) is amended by striking
``(a) Within one hundred'' and all that follows through ``(b)
Geothermal'' and inserting ``Geothermal''.
(4) The first section (30 U.S.C. 1001 note) is amended by
striking ``That this'' and inserting the following:

``SEC. 1. SHORT TITLE.

``This''.
(5) Section 2 (30 U.S.C. 1001) is amended by striking
``Sec. 2. As'' and inserting the following:

``SEC. 2. DEFINITIONS.

``As''.
(6) Section 3 (30 U.S.C. 1002) is amended by striking
``Sec. 3. Subject'' and inserting the following:

``SEC. 3 . LANDS SUBJECT TO GEOTHERMAL LEASING.

``Subject''.
(7) Section 5 (30 U.S.C. 1004) is further amended by
striking ``Sec. 5.'', and by inserting immediately before and
above subsection (a) the following:

``SEC. 5. RENTS AND ROYALTIES. ''.

(8) Section 7 (30 U.S.C. 1006) is amended by striking
``Sec. 7. A geothermal'' and inserting the following:

``SEC. 7. ACREAGE OF GEOTHERMAL LEASE.

``A geothermal''.
(9) Section 8 (30 U.S.C. 1007) is amended by striking
``Sec. 8. (a) The'' and inserting the following:

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

``(a) The''.
(10) Section 9 (30 U.S.C. 1008) is amended by striking
``Sec. 9. If'' and inserting the following:

``SEC. 9. BYPRODUCTS.

``If''.
(11) Section 10 (30 U.S.C. 1009) is amended by striking
``Sec. 10. The'' and inserting the following:

``SEC. 10. RELINQUISHMENT OF GEOTHERMAL RIGHTS.

``The''.
(12) Section 11 (30 U.S.C. 1010) is amended by striking
``Sec. 11. The'' and inserting the following:

``SEC. 11. SUSPENSION OF OPERATIONS AND PRODUCTION.

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

``SEC. 12. TERMINATION OF LEASES.

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

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

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

``SEC. 14. SURFACE LAND USE.

``Subject''.
(16) Section 15 (30 U.S.C. 1014) is amended by striking
``Sec. 15. (a) Geothermal'' and inserting the following:

``SEC. 15. LANDS SUBJECT TO GEOTHERMAL LEASING.

``(a) Geothermal''.
(17) Section 16 (30 U.S.C. 1015) is amended by striking
``Sec. 16. Leases'' and inserting the following:

``SEC. 16. REQUIREMENT FOR LESSEES.

``Leases''.
(18) Section 17 (30 U.S.C. 1016) is amended by striking
``Sec. 17. Administration'' and inserting the following:

``SEC. 17. ADMINISTRATION.

``Administration''.
(19) Section 19 (30 U.S.C. 1018) is amended by striking
``Sec. 19. Upon'' and inserting the following:

``SEC. 19. DATA FROM FEDERAL AGENCIES.

``Upon''.
(20) Section 21 (30 U.S.C. 1020) is further amended by
striking ``Sec. 21.'', and by inserting immediately before and
above the remainder of that section the following:

``SEC. 21. PUBLICATION IN FEDERAL REGISTER; RESERVATION OF MINERAL
RIGHTS. ''.

(21) Section 22 (30 U.S.C. 1021) is amended by striking
``Sec. 22. Nothing'' and inserting the following:

``SEC. 22. FEDERAL EXEMPTION FROM STATE WATER LAWS.

``Nothing''.
(22) Section 23 (30 U.S.C. 1022) is amended by striking
``Sec. 23. (a) All'' and inserting the following:

``SEC. 23. PREVENTION OF WASTE; EXCLUSIVITY.

``(a) All''.
(23) Section 24 (30 U.S.C. 1023) is amended by striking
``Sec. 24. The'' and inserting the following:

``SEC. 24. RULES AND REGULATIONS.

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

``SEC. 25. INCLUSION OF GEOTHERMAL LEASING UNDER CERTAIN OTHER LAWS.

``As''.
(25) Section 26 is amended by striking ``Sec. 26. The'' and
inserting the following:

``SEC. 26. AMENDMENT.

``The''.
(26) Section 27 (30 U.S.C. 1025) is amended by striking
``Sec. 27. The'' and inserting the following:

``SEC. 27. FEDERAL RESERVATION OF CERTAIN MINERAL RIGHTS.

``The''.
(27) Section 28 (30 U.S.C. 1026) is amended by striking
``Sec. 28. (a)(1) The'' and inserting the following:

``SEC. 28. SIGNIFICANT THERMAL FEATURES.

``(a)(1) The''.
(28) Section 29 (30 U.S.C. 1027) is amended by striking
``Sec. 29. The'' and inserting the following:

``SEC. 29. LAND SUBJECT TO PROHIBITION ON LEASING.

``The''.

Subtitle C--Hydroelectric

PART I--ALTERNATIVE CONDITIONS

SEC. 231. ALTERNATIVE CONDITIONS AND FISHWAYS.

(a) Federal Reservations.--Section 4(e) of the Federal Power Act
(16 U.S.C. 797(e)) is amended by inserting after ``adequate protection
and utilization of such reservation.'' at the end of the first proviso
the following: ``The license applicant shall be entitled to a
determination on the record, after opportunity for an expedited agency
trial-type hearing of any disputed issues of material fact, with
respect to such conditions. Such hearing may be conducted in accordance
with procedures established by agency regulation in consultation with
the Federal Energy Regulatory Commission.''.
(b) Fishways.--Section 18 of the Federal Power Act (16 U.S.C. 811)
is amended by inserting after ``and such fishways as may be prescribed
by the Secretary of Commerce.'' the following: ``The license applicant
shall be entitled to a determination on the record, after opportunity
for an expedited agency trial-type hearing of any disputed issues of
material fact, with respect to such fishways. Such hearing may be
conducted in accordance with procedures established by agency
regulation in consultation with the Federal Energy Regulatory
Commission.''.
(c) Alternative Conditions and Prescriptions.--Part I of the
Federal Power Act (16 U.S.C. 791a et seq.) is amended by adding the
following new section at the end thereof:

``SEC. 33. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS.

``(a) Alternative Conditions.--(1) Whenever any person applies for
a license for any project works within any reservation of the United
States, and the Secretary of the department under whose supervision
such reservation falls (referred to in this subsection as `the
Secretary') deems a condition to such license to be necessary under the
first proviso of section 4(e), the license applicant may propose an
alternative condition.
``(2) Notwithstanding the first proviso of section 4(e), the
Secretary shall accept the proposed alternative condition referred to
in paragraph (1), and the Commission shall include in the license such
alternative condition, if the Secretary determines, based on
substantial evidence provided by the license applicant or otherwise
available to the Secretary, that such alternative condition--
``(A) provides for the adequate protection and utilization
of the reservation; and
``(B) will either--
``(i) cost less to implement; or
``(ii) result in improved operation of the project
works for electricity production,
as compared to the condition initially deemed necessary by the
Secretary.
``(3) The Secretary shall submit into the public record of the
Commission proceeding with any condition under section 4(e) or
alternative condition it accepts under this section, a written
statement explaining the basis for such condition, and reason for not
accepting any alternative condition under this section. The written
statement must demonstrate that the Secretary gave equal consideration
to the effects of the condition adopted and alternatives not accepted
on energy supply, distribution, cost, and use; flood control;
navigation; water supply; and air quality (in addition to the
preservation of other aspects of environmental quality); based on such
information as may be available to the Secretary, including information
voluntarily provided in a timely manner by the applicant and others.
The Secretary shall also submit, together with the aforementioned
written statement, all studies, data, and other factual information
available to the Secretary and relevant to the Secretary's decision.
``(4) Nothing in this section shall prohibit other interested
parties from proposing alternative conditions.
``(5) If the Secretary does not accept an applicant's alternative
condition under this section, and the Commission finds that the
Secretary's condition would be inconsistent with the purposes of this
part, or other applicable law, the Commission may refer the dispute to
the Commission's Dispute Resolution Service. The Dispute Resolution
Service shall consult with the Secretary and the Commission and issue a
non-binding advisory within 90 days. The Secretary may accept the
Dispute Resolution Service advisory unless the Secretary finds that the
recommendation will not provide for the adequate protection and
utilization of the reservation. The Secretary shall submit the advisory
and the Secretary's final written determination into the record of the
Commission's proceeding.
``(b) Alternative Prescriptions.--(1) Whenever the Secretary of the
Interior or the Secretary of Commerce prescribes a fishway under
section 18, the license applicant or licensee may propose an
alternative to such prescription to construct, maintain, or operate a
fishway.
``(2) Notwithstanding section 18, the Secretary of the Interior or
the Secretary of Commerce, as appropriate, shall accept and prescribe,
and the Commission shall require, the proposed alternative referred to
in paragraph (1), if the Secretary of the appropriate department
determines, based on substantial evidence provided by the licensee or
otherwise available to the Secretary, that such alternative--
``(A) will be no less protective than the fishway initially
prescribed by the Secretary; and
``(B) will either--
``(i) cost less to implement; or
``(ii) result in improved operation of the project
works for electricity production,
as compared to the fishway initially deemed necessary by the
Secretary.
``(3) The Secretary concerned shall submit into the public record
of the Commission proceeding with any prescription under section 18 or
alternative prescription it accepts under this section, a written
statement explaining the basis for such prescription, and reason for
not accepting any alternative prescription under this section. The
written statement must demonstrate that the Secretary gave equal
consideration to the effects of the condition adopted and alternatives
not accepted on energy supply, distribution, cost, and use; flood
control; navigation; water supply; and air quality (in addition to the
preservation of other aspects of environmental quality); based on such
information as may be available to the Secretary, including information
voluntarily provided in a timely manner by the applicant and others.
The Secretary shall also submit, together with the aforementioned
written statement, all studies, data, and other factual information
available to the Secretary and relevant to the Secretary's decision.
``(4) Nothing in this section shall prohibit other interested
parties from proposing alternative prescriptions.
``(5) If the Secretary concerned does not accept an applicant's
alternative prescription under this section, and the Commission finds
that the Secretary's prescription would be inconsistent with the
purposes of this part, or other applicable law, the Commission may
refer the dispute to the Commission's Dispute Resolution Service. The
Dispute Resolution Service shall consult with the Secretary and the
Commission and issue a non-binding advisory within 90 days. The
Secretary may accept the Dispute Resolution Service advisory unless the
Secretary finds that the recommendation will be less protective than
the fishway initially prescribed by the Secretary. The Secretary shall
submit the advisory and the Secretary's final written determination
into the record of the Commission's proceeding.''.

PART II--ADDITIONAL HYDROPOWER

SEC. 241. HYDROELECTRIC PRODUCTION INCENTIVES.

(a) Incentive Payments.--For electric energy generated and sold by
a qualified hydroelectric facility during the incentive period, the
Secretary of Energy (referred to in this section as the ``Secretary'')
shall make, subject to the availability of appropriations, incentive
payments to the owner or operator of such facility. The amount of such
payment made to any such owner or operator shall be as determined under
subsection (e) of this section. Payments under this section may only be
made upon receipt by the Secretary of an incentive payment application
which establishes that the applicant is eligible to receive such
payment and which satisfies such other requirements as the Secretary
deems necessary. Such application shall be in such form, and shall be
submitted at such time, as the Secretary shall establish.
(b) Definitions.--For purposes of this section:
(1) Qualified hydroelectric facility.--The term ``qualified
hydroelectric facility'' means a turbine or other generating
device owned or solely operated by a non-Federal entity which
generates hydroelectric energy for sale and which is added to
an existing dam or conduit.
(2) Existing dam or conduit.--The term ``existing dam or
conduit'' means any dam or conduit the construction of which
was completed before the date of the enactment of this section
and which does not require any construction or enlargement of
impoundment or diversion structures (other than repair or
reconstruction) in connection with the installation of a
turbine or other generating device.
(3) Conduit.--The term ``conduit'' has the same meaning as
when used in section 30(a)(2) of the Federal Power Act (16
U.S.C. 823a(a)(2)).
The terms defined in this subsection shall apply without regard to the
hydroelectric kilowatt capacity of the facility concerned, without
regard to whether the facility uses a dam owned by a governmental or
nongovernmental entity, and without regard to whether the facility
begins operation on or after the date of the enactment of this section.
(c) Eligibility Window.--Payments may be made under this section
only for electric energy generated from a qualified hydroelectric
facility which begins operation during the period of 10 fiscal years
beginning with the first full fiscal year occurring after the date of
enactment of this subtitle.
(d) Incentive Period.--A qualified hydroelectric facility may
receive payments under this section for a period of 10 fiscal years
(referred to in this section as the ``incentive period''). Such period
shall begin with the fiscal year in which electric energy generated
from the facility is first eligible for such payments.
(e) Amount of Payment.--
(1) In general.--Payments made by the Secretary under this
section to the owner or operator of a qualified hydroelectric
facility shall be based on the number of kilowatt hours of
hydroelectric energy generated by the facility during the
incentive period. For any such facility, the amount of such
payment shall be 1.8 cents per kilowatt hour (adjusted as
provided in paragraph (2)), subject to the availability of
appropriations under subsection (g), except that no facility
may receive more than $750,000 in 1 calendar year.
(2) Adjustments.--The amount of the payment made to any
person under this section as provided in paragraph (1) shall be
adjusted for inflation for each fiscal year beginning after
calendar year 2003 in the same manner as provided in the
provisions of section 29(d)(2)(B) of the Internal Revenue Code
of 1986, except that in applying such provisions the calendar
year 2003 shall be substituted for calendar year 1979.
(f) Sunset.--No payment may be made under this section to any
qualified hydroelectric facility after the expiration of the period of
20 fiscal years beginning with the first full fiscal year occurring
after the date of enactment of this subtitle, and no payment may be
made under this section to any such facility after a payment has been
made with respect to such facility for a period of 10 fiscal years.
(g) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out the purposes of this section
$10,000,000 for each of the fiscal years 2004 through 2013.

SEC. 242. HYDROELECTRIC EFFICIENCY IMPROVEMENT.

(a) Incentive Payments.--The Secretary of Energy shall make
incentive payments to the owners or operators of hydroelectric
facilities at existing dams to be used to make capital improvements in
the facilities that are directly related to improving the efficiency of
such facilities by at least 3 percent.
(b) Limitations.--Incentive payments under this section shall not
exceed 10 percent of the costs of the capital improvement concerned and
not more than 1 payment may be made with respect to improvements at a
single facility. No payment in excess of $750,000 may be made with
respect to improvements at a single facility.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section not more than $10,000,000 for
each of the fiscal years 2004 through 2013.

SEC. 243. SMALL HYDROELECTRIC POWER PROJECTS.

Section 408(a)(6) of the Public Utility Regulatory Policies Act of
1978 (16 U.S.C. 2708(a)(6)) is amended by striking ``April 20, 1977''
and inserting ``March 4, 2003''.

SEC. 244. INCREASED HYDROELECTRIC GENERATION AT EXISTING FEDERAL
FACILITIES.

(a) In General.--The Secretary of the Interior and the Secretary of
Energy, in consultation with the Secretary of the Army, shall jointly
conduct a study of the potential for increasing electric power
production capability at federally owned or operated water regulation,
storage, and conveyance facilities.
(b) Content.--The study under this section shall include
identification and description in detail of each facility that is
capable, with or without modification, of producing additional
hydroelectric power, including estimation of the existing potential for
the facility to generate hydroelectric power.
(c) Report.--The Secretaries shall submit to the Committees on
Energy and Commerce, Resources, and Transportation and Infrastructure
of the House of Representatives and the Committee on Energy and Natural
Resources of the Senate a report on the findings, conclusions, and
recommendations of the study under this section by not later than 18
months after the date of the enactment of this Act. The report shall
include each of the following:
(1) The identifications, descriptions, and estimations
referred to in subsection (b).
(2) A description of activities currently conducted or
considered, or that could be considered, to produce additional
hydroelectric power from each identified facility.
(3) A summary of prior actions taken by the Secretaries to
produce additional hydroelectric power from each identified
facility.
(4) The costs to install, upgrade, or modify equipment or
take other actions to produce additional hydroelectric power
from each identified facility and the level of Federal power
customer involvement in the determination of such costs.
(5) The benefits that would be achieved by such
installation, upgrade, modification, or other action, including
quantified estimates of any additional energy or capacity from
each facility identified under subsection (b).
(6) A description of actions that are planned, underway, or
might reasonably be considered to increase hydroelectric power
production by replacing turbine runners, by performing
generator upgrades or rewinds, or construction of pumped
storage facilities.
(7) The impact of increased hydroelectric power production
on irrigation, fish, wildlife, Indian tribes, river health,
water quality, navigation, recreation, fishing, and flood
control.
(8) Any additional recommendations to increase
hydroelectric power production from, and reduce costs and
improve efficiency at, federally owned or operated water
regulation, storage, and conveyance facilities.

SEC. 245. SHIFT OF PROJECT LOADS TO OFF-PEAK PERIODS.

(a) In General.--The Secretary of the Interior shall--
(1) review electric power consumption by Bureau of
Reclamation facilities for water pumping purposes; and
(2) make such adjustments in such pumping as possible to
minimize the amount of electric power consumed for such pumping
during periods of peak electric power consumption, including by
performing as much of such pumping as possible during off-peak
hours at night.
(b) Consent of Affected Irrigation Customers Required.--The
Secretary may not under this section make any adjustment in pumping at
a facility without the consent of each person that has contracted with
the United States for delivery of water from the facility for use for
irrigation and that would be affected by such adjustment.
(c) Existing Obligations not Affected.--This section shall not be
construed to affect any existing obligation of the Secretary to provide
electric power, water, or other benefits from Bureau of Reclamation
facilities, including recreational releases.

SEC. 246. CORPS OF ENGINEERS HYDROPOWER OPERATION AND MAINTENANCE
FUNDING.

(a) In General.--Notwithstanding the last sentence of section 5 of
the Act of December 22, 1944 (commonly known as the ``Flood Control Act
of 1944'') (58 Stat. 890, chapter 665; 16 U.S.C. 825s), the 11th
paragraph under the heading ``office of the secretary'' in title I of
the Act of October 12, 1949 (63 Stat. 767, chapter 680; 16 U.S.C. 825s-
1), the matter under the heading ``continuing fund, southeastern power
administration'' in title I of the Act of August 31, 1951 (65 Stat.
249, chapter 375; 16 U.S.C. 825s-2), section 3302 of title 31, United
States Code, or any other law, and without further appropriation or
fiscal year limitation, for fiscal year 2004, the Administrator of the
Southeastern Power Administration, the Administrator of the
Southwestern Power Administration, and the Administrator of the Western
Area Power Administration may credit to the Secretary of the Army
(referred to in this section as the ``Secretary''), receipts, in an
amount determined under subsection (c), from the sale of power and
related services.
(b) Use of Funds.--
(1) In general.--The Secretary--
(A) shall, except as provided in paragraph (2), use
the amounts credited under subsection (a) to fund only
the Corps of Engineers annual operation and maintenance
activities that are allocated exclusively to the power
function and assigned to the respective power marketing
administration and respective project system as
applicable for repayment; and
(B) shall not use the amounts for any costs
allocated to non-power functions of Corps of Engineer
operations.
(2) Exception.--The Secretary may use amounts credited by
the Southwestern Power Administration under subsection (a) for
capital and nonrecurring costs.
(c) Amount.--The amount of the receipts credited under subsection
(a) shall be equal to such amount as--
(1) the Secretary of the Army requests; and
(2) the appropriate Administrator, in consultation with the
power customers of the Administrator's power marketing
administration, determines to be appropriate to apply to the
costs referred to in subsection (b).
(d) Applicable Law.--The amounts credited under subsection (a) are
exempt from sequestration under the Balanced Budget and Emergency
Deficit Control Act of 1985 (2 U.S.C. 901 et seq.).

SEC. 247. LIMITATION ON CERTAIN CHARGES ASSESSED TO THE FLINT CREEK
PROJECT, MONTANA.

Notwithstanding section 10(e)(1) of the Federal Power Act (16
U.S.C. 803(e)(1)) or any other provision of Federal law providing for
the payment to the United States of charges for the use of Federal land
for the purposes of operating and maintaining a hydroelectric
development licensed by the Federal Energy Regulatory Commission
(referred to in this section as the ``Commission''), any political
subdivision of the State of Montana that holds a license for Commission
Project No. 1473 in Granite and Deer Lodge Counties, Montana, shall be
required to pay to the United States for the use of that land for each
year during which the political subdivision continues to hold the
license for the project, the lesser of--
(1) $25,000; or
(2) such annual charge as the Commission or any other
department or agency of the Federal Government may assess.

SEC. 248. REINSTATEMENT AND TRANSFER.

(a) Reinstatement and Transfer of Federal License for Project
Numbered 2696.--Notwithstanding section 8 of the Federal Power Act (16
U.S.C. 801) or any other provision of such Act, the Federal Energy
Regulatory Commission shall reinstate the license for Project No. 2696
and transfer the license, without delay or the institution of any
proceedings, to the Town of Stuyvesant, New York, holder of Federal
Energy Regulatory Commission Preliminary Permit No. 11787, within 30
days after the date of enactment of this Act.
(b) Hydroelectric Incentives.--Project No. 2696 shall be entitled
to the full benefit of any Federal legislation that promotes
hydroelectric development that is enacted within 2 years either before
or after the date of enactment of this Act.
(c) Project Development and Financing.--The Federal Energy
Regulatory Commission shall permit the Town of Stuyvesant to add as a
colicensee any private or public entity or entities to the reinstated
license at any time, notwithstanding the issuance of a preliminary
permit to the Town of Stuyvesant and any consideration of municipal
preference. The town shall be entitled, to the extent that funds are
available or shall be made available, to receive loans under sections
402 and 403 of the Public Utility Regulatory Policies Act of 1978 (16
U.S.C. 2702 and 2703), or similar programs, for the reimbursement of
feasibility studies or development costs, or both, incurred since
January 1, 2001, through and including December 31, 2006. All power
produced by the project shall be deemed incremental hydropower for
purpose of qualifying for any energy credit or similar benefits.

TITLE III--OIL AND GAS

Subtitle A--Petroleum Reserve and Home Heating Oil

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

(a) Amendment to Title I of the Energy Policy and Conservation
Act.--Title I of the Energy Policy and Conservation Act (42 U.S.C. 6211
et seq.) is amended--
(1) by striking section 166 (42 U.S.C. 6246) and inserting
the following:

``authorization of appropriations

``Sec. 166. There are authorized to be appropriated to the
Secretary such sums as may be necessary to carry out this part and part
D, to remain available until expended.'';
(2) by striking section 186 (42 U.S.C. 6250e); and
(3) by striking part E (42 U.S.C. 6251; relating to the
expiration of title I of the Act).
(b) Amendment to Title II of the Energy Policy and Conservation
Act.--Title II of the Energy Policy and Conservation Act (42 U.S.C.
6271 et seq.) is amended--
(1) by inserting before section 273 (42 U.S.C. 6283) the
following:

``PART C--SUMMER FILL AND FUEL BUDGETING PROGRAMS'';

(2) by striking section 273(e) (42 U.S.C. 6283(e); relating
to the expiration of summer fill and fuel budgeting programs);
and
(3) by striking part D (42 U.S.C. 6285; relating to the
expiration of title II of the Act).
(c) Technical Amendments.--The table of contents for the Energy
Policy and Conservation Act is amended--
(1) by inserting after the items relating to part C of
title I the following:

``Part D--Northeast home heating oil Reserve

``Sec. 181. Establishment.
``Sec. 182. Authority.
``Sec. 183. Conditions for release; plan.
``Sec. 184. Northeast Home Heating Oil Reserve Account.
``Sec. 185. Exemptions.'';
(2) by amending the items relating to part C of title II to
read as follows:

``Part C--Summer fill and fuel budgeting programs

``Sec. 273. Summer fill and fuel budgeting programs.''; and
(3) by striking the items relating to part D of title II.
(d) Amendment to the Energy Policy and Conservation Act.--Section
183(b)(1) of the Energy Policy and Conservation Act (42 U.S.C.
6250(b)(1)) is amended by striking all after ``increases'' through to
``mid-October through March'' and inserting ``by more than 60 percent
over its 5-year rolling average for the months of mid-October through
March (considered as a heating season average)''.
(e) Fill Strategic Petroleum Reserve to Capacity.--The Secretary of
Energy shall, as expeditiously as practicable, acquire petroleum in
amounts sufficient to fill the Strategic Petroleum Reserve to the
1,000,000,000 barrel capacity authorized under section 154(a) of the
Energy Policy and Conservation Act (42 U.S.C. 6234(a)), consistent with
the provisions of sections 159 and 160 of such Act (42 U.S.C. 6239,
6240).

SEC. 302. NATIONAL OILHEAT RESEARCH ALLIANCE.

Section 713 of the Energy Act of 2000 (42 U.S.C. 6201 note) is
amended by striking ``4'' and inserting ``9''.

Subtitle B--Production Incentives

SEC. 311. DEFINITION OF SECRETARY.

In this subtitle, the term ``Secretary'' means the Secretary of the
Interior.

SEC. 312. PROGRAM ON OIL AND GAS ROYALTIES IN-KIND.

(a) Applicability of Section.--Notwithstanding any other provision
of law, this section applies to all royalty in-kind accepted by the
Secretary on or after the date of enactment of this Act under any
Federal oil or gas lease or permit under section 36 of the Mineral
Leasing Act (30 U.S.C. 192), section 27 of the Outer Continental Shelf
Lands Act (43 U.S.C. 1353), or any other Federal law governing leasing
of Federal land for oil and gas development.
(b) Terms and Conditions.--All royalty accruing to the United
States shall, on the demand of the Secretary, be paid in oil or gas. If
the Secretary makes such a demand, the following provisions apply to
such payment:
(1) Satisfaction of royalty obligation.--Delivery by, or on
behalf of, the lessee of the royalty amount and quality due
under the lease satisfies the lessee's royalty obligation for
the amount delivered, except that transportation and processing
reimbursements paid to, or deductions claimed by, the lessee
shall be subject to review and audit.
(2) Marketable condition.--
(A) In general.--Royalty production shall be placed
in marketable condition by the lessee at no cost to the
United States.
(B) Definition of marketable condition.--In this
paragraph, the term ``in marketable condition'' means
sufficiently free from impurities and otherwise in a
condition that the royalty production will be accepted
by a purchaser under a sales contract typical of the
field or area in which the royalty production was
produced.
(3) Disposition by the secretary.--The Secretary may--
(A) sell or otherwise dispose of any royalty
production taken in-kind (other than oil or gas
transferred under section 27(a)(3) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1353(a)(3)) for
not less than the market price; and
(B) transport or process (or both) any royalty
production taken in-kind.
(4) Retention by the secretary.--The Secretary may,
notwithstanding section 3302 of title 31, United States Code,
retain and use a portion of the revenues from the sale of oil
and gas taken in-kind that otherwise would be deposited to
miscellaneous receipts, without regard to fiscal year
limitation, or may use oil or gas received as royalty taken in-
kind (in this paragraph referred to as ``royalty production'')
to pay the cost of--
(A) transporting the royalty production;
(B) processing the royalty production;
(C) disposing of the royalty production; or
(D) any combination of transporting, processing,
and disposing of the royalty production.
(5) Limitation.--
(A) In general.--Except as provided in subparagraph
(B), the Secretary may not use revenues from the sale
of oil and gas taken in-kind to pay for personnel,
travel, or other administrative costs of the Federal
Government.
(B) Exception.--Notwithstanding subparagraph (A),
the Secretary may use a portion of the revenues from
the sale of oil taken in-kind, without fiscal year
limitation, to pay transportation costs, salaries, and
other administrative costs directly related to filling
the Strategic Petroleum Reserve.
(c) Reimbursement of Cost.--If the lessee, pursuant to an agreement
with the United States or as provided in the lease, processes the
royalty gas or delivers the royalty oil or gas at a point not on or
adjacent to the lease area, the Secretary shall--
(1) reimburse the lessee for the reasonable costs of
transportation (not including gathering) from the lease to the
point of delivery or for processing costs; or
(2) allow the lessee to deduct the transportation or
processing costs in reporting and paying royalties in-value for
other Federal oil and gas leases.
(d) Benefit to the United States Required.--The Secretary may
receive oil or gas royalties in-kind only if the Secretary determines
that receiving royalties in-kind provides benefits to the United States
that are greater than or equal to the benefits that are likely to have
been received had royalties been taken in-value.
(e) Reports.--
(1) In general.--Not later than September 30, 2005, the
Secretary shall submit to Congress a report that addresses--
(A) actions taken to develop businesses processes
and automated systems to fully support the royalty-in-
kind capability to be used in tandem with the royalty-
in-value approach in managing Federal oil and gas
revenue; and
(B) future royalty-in-kind businesses operation
plans and objectives.
(2) Reports on oil or gas royalties taken in-kind.--For
each of fiscal years 2004 through 2013 in which the United
States takes oil or gas royalties in-kind from production in
any State or from the outer Continental Shelf, excluding
royalties taken in-kind and sold to refineries under subsection
(h), the Secretary shall submit to Congress a report that
describes--
(A) the methodology or methodologies used by the
Secretary to determine compliance with subsection (d),
including the performance standard for comparing
amounts received by the United States derived from
royalties in-kind to amounts likely to have been
received had royalties been taken in-value;
(B) an explanation of the evaluation that led the
Secretary to take royalties in-kind from a lease or
group of leases, including the expected revenue effect
of taking royalties in-kind;
(C) actual amounts received by the United States
derived from taking royalties in-kind and costs and
savings incurred by the United States associated with
taking royalties in-kind, including, but not limited
to, administrative savings and any new or increased
administrative costs; and
(D) an evaluation of other relevant public benefits
or detriments associated with taking royalties in-kind.
(f) Deduction of Expenses.--
(1) In general.--Before making payments under section 35 of
the Mineral Leasing Act (30 U.S.C. 191) or section 8(g) of the
Outer Continental Shelf Lands Act (43 U.S.C. 1337(g)) of
revenues derived from the sale of royalty production taken in-
kind from a lease, the Secretary shall deduct amounts paid or
deducted under subsections (b)(4) and (c) and deposit the
amount of the deductions in the miscellaneous receipts of the
United States Treasury.
(2) Accounting for deductions.--When the Secretary allows
the lessee to deduct transportation or processing costs under
subsection (c), the Secretary may not reduce any payments to
recipients of revenues derived from any other Federal oil and
gas lease as a consequence of that deduction.
(g) Consultation With States.--The Secretary--
(1) shall consult with a State before conducting a royalty
in-kind program under this subtitle within the State, and may
delegate management of any portion of the Federal royalty in-
kind program to the State except as otherwise prohibited by
Federal law; and
(2) shall consult annually with any State from which
Federal oil or gas royalty is being taken in-kind to ensure, to
the maximum extent practicable, that the royalty in-kind
program provides revenues to the State greater than or equal to
those likely to have been received had royalties been taken in-
value.
(h) Small Refineries.--
(1) Preference.--If the Secretary finds that sufficient
supplies of crude oil are not available in the open market to
refineries that do not have their own source of supply for
crude oil, the Secretary may grant preference to such
refineries in the sale of any royalty oil accruing or reserved
to the United States under Federal oil and gas leases issued
under any mineral leasing law, for processing or use in such
refineries at private sale at not less than the market price.
(2) Proration among refineries in production area.--In
disposing of oil under this subsection, the Secretary of Energy
may, at the discretion of the Secretary, prorate the oil among
refineries described in paragraph (1) in the area in which the
oil is produced.
(i) Disposition to Federal Agencies.--
(1) Onshore royalty.--Any royalty oil or gas taken by the
Secretary in-kind from onshore oil and gas leases may be sold
at not less than the market price to any Federal agency.
(2) Offshore royalty.--Any royalty oil or gas taken in-kind
from a Federal oil or gas lease on the outer Continental Shelf
may be disposed of only under section 27 of the Outer
Continental Shelf Lands Act (43 U.S.C. 1353).
(j) Federal Low-Income Energy Assistance Programs.--
(1) Preference.--In disposing of royalty oil or gas taken
in-kind under this section, the Secretary may grant a
preference to any person, including any Federal or State
agency, for the purpose of providing additional resources to
any Federal low-income energy assistance program.
(2) Report.--Not later than 3 years after the date of
enactment of this Act, the Secretary shall transmit a report to
Congress, assessing the effectiveness of granting preferences
specified in paragraph (1) and providing a specific
recommendation on the continuation of authority to grant
preferences.

SEC. 313. MARGINAL PROPERTY PRODUCTION INCENTIVES.

(a) Definition of Marginal Property.--Until such time as the
Secretary issues regulations under subsection (e) that prescribe a
different definition, in this section the term ``marginal property''
means an onshore unit, communitization agreement, or lease not within a
unit or communitization agreement, that produces on average the
combined equivalent of less than 15 barrels of oil per well per day or
90 million British thermal units of gas per well per day calculated
based on the average over the 3 most recent production months,
including only wells that produce on more than half of the days during
those 3 production months.
(b) Conditions for Reduction of Royalty Rate.--Until such time as
the Secretary issues regulations under subsection (e) that prescribe
different thresholds or standards, the Secretary shall reduce the
royalty rate on--
(1) oil production from marginal properties as prescribed
in subsection (c) when the spot price of West Texas
Intermediate crude oil at Cushing, Oklahoma, is, on average,
less than $15 per barrel for 90 consecutive trading days; and
(2) gas production from marginal properties as prescribed
in subsection (c) when the spot price of natural gas delivered
at Henry Hub, Louisiana, is, on average, less than $2.00 per
million British thermal units for 90 consecutive trading days.
(c) Reduced Royalty Rate.--
(1) In general.--When a marginal property meets the
conditions specified in subsection (b), the royalty rate shall
be the lesser of--
(A) 5 percent; or
(B) the applicable rate under any other statutory
or regulatory royalty relief provision that applies to
the affected production.
(2) Period of effectiveness.--The reduced royalty rate
under this subsection shall be effective beginning on the first
day of the production month following the date on which the
applicable condition specified in subsection (b) is met.
(d) Termination of Reduced Royalty Rate.--A royalty rate prescribed
in subsection (d)(1)(A) shall terminate--
(1) with respect to oil production from a marginal
property, on the first day of the production month following
the date on which--
(A) the spot price of West Texas Intermediate crude
oil at Cushing, Oklahoma, on average, exceeds $15 per
barrel for 90 consecutive trading days; or
(B) the property no longer qualifies as a marginal
property; and
(2) with respect to gas production from a marginal
property, on the first day of the production month following
the date on which--
(A) the spot price of natural gas delivered at
Henry Hub, Louisiana, on average, exceeds $2.00 per
million British thermal units for 90 consecutive
trading days; or
(B) the property no longer qualifies as a marginal
property.
(e) Regulations Prescribing Different Relief.--
(1) Discretionary regulations.--The Secretary may by
regulation prescribe different parameters, standards, and
requirements for, and a different degree or extent of, royalty
relief for marginal properties in lieu of those prescribed in
subsections (a) through (d).
(2) Mandatory regulations.--Not later than 18 months after
the date of enactment of this Act, the Secretary shall by
regulation--
(A) prescribe standards and requirements for, and
the extent of royalty relief for, marginal properties
for oil and gas leases on the outer Continental Shelf;
and
(B) define what constitutes a marginal property on
the outer Continental Shelf for purposes of this
section.
(3) Considerations.--In promulgating regulations under this
subsection, the Secretary may consider--
(A) oil and gas prices and market trends;
(B) production costs;
(C) abandonment costs;
(D) Federal and State tax provisions and the
effects of those provisions on production economics;
(E) other royalty relief programs;
(F) regional differences in average wellhead
prices;
(G) national energy security issues; and
(H) other relevant matters.
(f) Savings Provision.--Nothing in this section prevents a lessee
from receiving royalty relief or a royalty reduction pursuant to any
other law (including a regulation) that provides more relief than the
amounts provided by this section.

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

(a) Royalty Incentive Regulations.--The Secretary shall publish a
final regulation to complete the rulemaking begun by the Notice of
Proposed Rulemaking entitled ``Relief or Reduction in Royalty Rates--
Deep Gas Provisions'', published in the Federal Register on March 26,
2003 (Federal Register, volume 68, number 58, 14868-14886).
(b) Royalty Incentive Regulations for Ultra Deep Gas Wells.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, in addition to any other regulations
that may provide royalty incentives for natural gas produced
from deep wells on oil and gas leases issued pursuant to the
Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), the
Secretary shall issue regulations, in accordance with the
regulations published pursuant to subsection (a), granting
royalty relief suspension volumes of not less than
35,000,000,000 cubic feet with respect to the production of
natural gas from ultra deep wells on leases issued before
January 1, 2001, in shallow waters less than 200 meters deep
located in the Gulf of Mexico wholly west of 87 degrees, 30
minutes West longitude. Regulations issued under this
subsection shall be retroactive to the date that the Notice of
Proposed Rulemaking is published in the Federal Register.
(2) Definition of ultra deep well.--In this subsection, the
term ``ultra deep well'' means a well drilled with a perforated
interval, the top of which is at least 20,000 feet true
vertical depth below the datum at mean sea level.

SEC. 315. ROYALTY RELIEF FOR DEEP WATER PRODUCTION.

(a) In General.--For all tracts located in water depths of greater
than 400 meters in the Western and Central Planning Area of the Gulf of
Mexico, including the portion of the Eastern Planning Area of the Gulf
of Mexico encompassing whole lease blocks lying west of 87 degrees, 30
minutes West longitude, any oil or gas lease sale under the Outer
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) occurring within 5
years after the date of enactment of this Act shall use the bidding
system authorized in section 8(a)(1)(H) of the Outer Continental Shelf
Lands Act (43 U.S.C. 1337(a)(1)(H)), except that the suspension of
royalties shall be set at a volume of not less than--
(1) 5,000,000 barrels of oil equivalent for each lease in
water depths of 400 to 800 meters;
(2) 9,000,000 barrels of oil equivalent for each lease in
water depths of 800 to 1,600 meters; and
(3) 12,000,000 barrels of oil equivalent for each lease in
water depths greater than 1,600 meters.
(b) Limitation.--The Secretary may place limitations on the
suspension of royalty relief granted based on market price.

SEC. 316. ALASKA OFFSHORE ROYALTY SUSPENSION.

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

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

(a) Transfer of Authority.--
(1) Redesignation.--The Naval Petroleum Reserves Production
Act of 1976 (42 U.S.C. 6501 et seq.) is amended by
redesignating section 107 (42 U.S.C. 6507) as section 108.
(2) Transfer.--The matter under the heading ``exploration
of national petroleum reserve in alaska'' under the heading
``ENERGY AND MINERALS'' of title I of Public Law 96-514 (42
U.S.C. 6508) is--
(A) transferred to the Naval Petroleum Reserves
Production Act of 1976 (42 U.S.C. 6501 et seq.);
(B) redesignated as section 107 of that Act; and
(C) moved so as to appear after section 106 of that
Act (42 U.S.C. 6506).
(b) Competitive Leasing.--Section 107 of the Naval Petroleum
Reserves Production Act of 1976 (as amended by subsection (a) of this
section) is amended--
(1) by striking the heading and all that follows through
``Provided, That (1) activities'' and inserting the following:

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

``(a) In General.--Notwithstanding any other provision of law and
pursuant to regulations issued by the Secretary, the Secretary shall
conduct an expeditious program of competitive leasing of oil and gas in
the National Petroleum Reserve in Alaska (referred to in this section
as the `Reserve').
``(b) Mitigation of Adverse Effects.--Activities'';
(2) by striking ``Alaska (the Reserve); (2) the'' and
inserting ``Alaska.
``(c) Land Use Planning; BLM Wilderness Study.--The'';
(3) by striking ``Reserve; (3) the'' and inserting
``Reserve.
``(d) First Lease Sale.--The'';
(4) by striking ``4332); (4) the'' and inserting ``4321 et
seq.).
``(e) Withdrawals.--The'';
(5) by striking ``herein; (5) bidding'' and inserting
``under this section.
``(f) Bidding Systems.--Bidding'';
(6) by striking ``629); (6) lease'' and inserting ``629).
``(g) Geological Structures.--Lease'';
(7) by striking ``structures; (7) the'' and inserting
``structures.
``(h) Size of Lease Tracts.--The'';
(8) by striking ``Secretary; (8)'' and all that follows
through ``Drilling, production,'' and inserting ``Secretary.
``(i) Terms.--
``(1) In general.--Each lease shall be--
``(A) issued for an initial period of not more than
10 years; and
``(B) renewed for successive 10-year terms if--
``(i) oil or gas is produced from the lease
in paying quantities;
``(ii) oil or gas is capable of being
produced in paying quantities; or
``(iii) drilling or reworking operations,
as approved by the Secretary, are conducted on
the leased land.
``(2) Renewal of nonproducing leases.--The Secretary shall
renew for an additional 10-year term a lease that does not meet
the requirements of paragraph (1)(B) if the lessee submits to
the Secretary an application for renewal not later than 60 days
before the expiration of the primary lease and--
``(A) the lessee certifies, and the Secretary
agrees, that hydrocarbon resources were discovered on 1
or more wells drilled on the leased land in such
quantities that a prudent operator would hold the lease
for potential future development;
``(B) the lessee--
``(i) pays the Secretary a renewal fee of
$100 per acre of leased land; and
``(ii) provides evidence, and the Secretary
agrees that, the lessee has diligently pursued
exploration that warrants continuation with the
intent of continued exploration or future
development of the leased land; or
``(C) all or part of the lease--
``(i) is part of a unit agreement covering
a lease described in subparagraph (A) or (B);
and
``(ii) has not been previously contracted
out of the unit.
``(3) Applicability.--This subsection applies to a lease
that--
``(A) is entered into before, on, or after the date
of enactment of the Energy Policy Act of 2003; and
``(B) is effective on or after the date of
enactment of that Act.
``(j) Unit Agreements.--
``(1) In general.--For the purpose of conservation of the
natural resources of all or part of any oil or gas pool, field,
reservoir, or like area, lessees (including representatives) of
the pool, field, reservoir, or like area may unite with each
other, or jointly or separately with others, in collectively
adopting and operating under a unit agreement for all or part
of the pool, field, reservoir, or like area (whether or not any
other part of the oil or gas pool, field, reservoir, or like
area is already subject to any cooperative or unit plan of
development or operation), if the Secretary determines the
action to be necessary or advisable in the public interest.
``(2) Participation by state of alaska.--The Secretary
shall ensure that the State of Alaska is provided the
opportunity for active participation concerning creation and
management of units formed or expanded under this subsection
that include acreage in which the State of Alaska has an
interest in the mineral estate.
``(3) Participation by regional corporations.--The
Secretary shall ensure that any Regional Corporation (as
defined in section 3 of the Alaska Native Claims Settlement Act
(43 U.S.C. 1602)) is provided the opportunity for active
participation concerning creation and management of units that
include acreage in which the Regional Corporation has an
interest in the mineral estate.
``(4) Production allocation methodology.--The Secretary may
use a production allocation methodology for each participating
area within a unit created for land in the Reserve, State of
Alaska land, or Regional Corporation land shall, when
appropriate, be based on the characteristics of each specific
oil or gas pool, field, reservoir, or like area to take into
account reservoir heterogeneity and a real variation in
reservoir producibility across diverse leasehold interests.
``(5) Benefit of operations.--Drilling, production,'';
(9) by striking ``When separate'' and inserting the
following:
``(6) Pooling.--If separate'';
(10) by inserting ``(in consultation with the owners of the
other land)'' after ``determined by the Secretary of the
Interior'';
(11) by striking ``thereto; (10) to'' and all that follows
through ``the terms provided therein'' and inserting ``to the
agreement.
``(k) Exploration Incentives.--
``(1) In general.--
``(A) Waiver, suspension, or reduction.--To
encourage the greatest ultimate recovery of oil or gas
or in the interest of conservation, the Secretary may
waive, suspend, or reduce the rental fees or minimum
royalty, or reduce the royalty on an entire leasehold
(including on any lease operated pursuant to a unit
agreement), if (after consultation with the State of
Alaska and the North Slope Borough of Alaska and the
concurrence of any Regional Corporation for leases that
include lands available for acquisition by the Regional
Corporation under the provisions of section 1431(o) of
the Alaska National Interest Lands Conservation Act (16
U.S.C. 3101 et seq.)) the Secretary determines that the
waiver, suspension, or reduction is in the public
interest.
``(B) Applicability.--This paragraph applies to a
lease that--
``(i) is entered into before, on, or after
the date of enactment of the Energy Policy Act
of 2003; and
``(ii) is effective on or after the date of
enactment of that Act.'';
(12) by striking ``The Secretary is authorized to'' and
inserting the following:
``(2) Suspension of operations and production.--The
Secretary may'';
(13) by striking ``In the event'' and inserting the
following:
``(3) Suspension of payments.--If'';
(14) by striking ``thereto; and (11) all'' and inserting
``to the lease.
``(l) Receipts.--All'';
(15) by redesignating clauses (A), (B), and (C) as clauses
(1), (2), and (3), respectively;
(16) by striking ``Any agency'' and inserting the
following:
``(m) Explorations.--Any agency'';
(17) by striking ``Any action'' and inserting the
following:
``(n) Environmental Impact Statements.--
``(1) Judicial review.--Any action'';
(18) by striking ``The detailed'' and inserting the
following:
``(2) Initial lease sales.--The detailed'';
(19) by striking ``of the Naval Petroleum Reserves
Production Act of 1976 (90 Stat. 304; 42 U.S.C. 6504)''; and
(20) by adding at the end the following:
``(o) Waiver of Administration for Conveyed Lands.--Notwithstanding
section 14(g) of the Alaska Native Claims Settlement Act (43 U.S.C.
1613(g)) or any other provision of law--
``(1) the Secretary of the Interior shall waive
administration of any oil and gas lease insofar as such lease
covers any land in the National Petroleum Reserve in Alaska in
which the subsurface estate is conveyed to the Arctic Slope
Regional Corporation; and
``(2) if any such conveyance of such subsurface estate does
not cover all the land embraced within any such oil and gas
lease--
``(A) the person who owns the subsurface estate in
any particular portion of the land covered by such
lease shall be entitled to all of the revenues reserved
under such lease as to such portion, including, without
limitation, all the royalty payable with respect to oil
or gas produced from or allocated to such particular
portion of the land covered by such lease; and
``(B) the Secretary of the Interior shall segregate
such lease into 2 leases, 1 of which shall cover only
the subsurface estate conveyed to the Arctic Slope
Regional Corporation, and operations, production, or
other circumstances (other than payment of rentals or
royalties) that satisfy obligations of the lessee
under, or maintain, either of the segregated leases
shall likewise satisfy obligations of the lessee under,
or maintain, the other segregated lease to the same
extent as if such segregated leases remained a part of
the original unsegregated lease.''.

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

(a) In General.--The Secretary, in cooperation with the Secretary
of Agriculture, shall establish a program not later than 1 year after
the date of enactment of this Act to remediate, reclaim, and close
orphaned, abandoned, or idled oil and gas wells located on land
administered by the land management agencies within the Department of
the Interior and the Department of Agriculture.
(b) Activities.--The program under subsection (a) shall--
(1) include a means of ranking orphaned, abandoned, or
idled wells sites for priority in remediation, reclamation, and
closure, based on public health and safety, potential
environmental harm, and other land use priorities;
(2) provide for identification and recovery of the costs of
remediation, reclamation, and closure from persons or other
entities currently providing a bond or other financial
assurance required under State or Federal law for an oil or gas
well that is orphaned, abandoned, or idled; and
(3) provide for recovery from the persons or entities
identified under paragraph (2), or their sureties or
guarantors, of the costs of remediation, reclamation, and
closure of such wells.
(c) Cooperation and Consultations.--In carrying out the program
under subsection (a), the Secretary shall--
(1) work cooperatively with the Secretary of Agriculture
and the States within which Federal land is located; and
(2) consult with the Secretary of Energy and the Interstate
Oil and Gas Compact Commission.
(d) Plan.--Not later than 1 year after the date of enactment of
this Act, the Secretary, in cooperation with the Secretary of
Agriculture, shall submit to Congress a plan for carrying out the
program under subsection (a).
(e) Idled Well.--For the purposes of this section, a well is idled
if--
(1) the well has been nonoperational for at least 7 years;
and
(2) there is no anticipated beneficial use for the well.
(f) Technical Assistance Program for Non-Federal Land.--
(1) In general.--The Secretary of Energy shall establish a
program to provide technical and financial assistance to oil
and gas producing States to facilitate State efforts over a 10-
year period to ensure a practical and economical remedy for
environmental problems caused by orphaned or abandoned oil and
gas exploration or production well sites on State or private
land.
(2) Assistance.--The Secretary of Energy shall work with
the States, through the Interstate Oil and Gas Compact
Commission, to assist the States in quantifying and mitigating
environmental risks of onshore orphaned or abandoned oil or gas
wells on State and private land.
(3) Activities.--The program under paragraph (1) shall
include--
(A) mechanisms to facilitate identification, if
feasible, of the persons currently providing a bond or
other form of financial assurance required under State
or Federal law for an oil or gas well that is orphaned
or abandoned;
(B) criteria for ranking orphaned or abandoned well
sites based on factors such as public health and
safety, potential environmental harm, and other land
use priorities;
(C) information and training programs on best
practices for remediation of different types of sites;
and
(D) funding of State mitigation efforts on a cost-
shared basis.
(g) Federal Reimbursement for Orphaned Well Reclamation Pilot
Program.--
(1) Reimbursement for remediating, reclaiming, and closing
wells on land subject to a new lease.--The Secretary shall
carry out a pilot program under which, in issuing a new oil and
gas lease on federally owned land on which 1 or more orphaned
wells are located, the Secretary--
(A) may require, but not as a condition of the
lease, that the lessee remediate, reclaim, and close in
accordance with standards established by the Secretary,
all orphaned wells on the land leased; and
(B) shall develop a program to reimburse a lessee,
through a royalty credit against the Federal share of
royalties owed or other means, for the reasonable
actual costs of remediating, reclaiming, and closing
the orphaned well pursuant to that requirement.
(2) Reimbursement for reclaiming orphaned wells on other
land.--In carrying out this subsection, the Secretary--
(A) may authorize any lessee under an oil and gas
lease on federally owned land to reclaim in accordance
with the Secretary's standards--
(i) an orphaned well on unleased federally
owned land; or
(ii) an orphaned well located on an
existing lease on federally owned land for the
reclamation of which the lessee is not legally
responsible; and
(B) shall develop a program to provide
reimbursement of 115 percent of the reasonable actual
costs of remediating, reclaiming, and closing the
orphaned well, through credits against the Federal
share of royalties or other means.
(3) Effect of remediation, reclamation, or closure of well
pursuant to an approved remediation plan.--
(A) Definition of remediating party.--In this
paragraph the term ``remediating party'' means a person
who remediates, reclaims, or closes an abandoned,
orphaned, or idled well pursuant to this subsection.
(B) General rule.--A remediating party who
remediates, reclaims, or closes an abandoned, orphaned,
or idled well in accordance with a detailed written
remediation plan approved by the Secretary under this
subsection, shall be immune from civil liability under
Federal environmental laws, for--
(i) pre-existing environmental conditions
at or associated with the well, unless the
remediating party owns or operates, in the past
owned or operated, or is related to a person
that owns or operates or in the past owned or
operated, the well or the land on which the
well is located; or
(ii) any remaining releases of pollutants
from the well during or after completion of the
remediation, reclamation, or closure of the
well, unless the remediating party causes
increased pollution as a result of activities
that are not in accordance with the approved
remediation plan.
(C) Limitations.--Nothing in this section shall
limit in any way the liability of a remediating party
for injury, damage, or pollution resulting from the
remediating party's acts or omissions that are not in
accordance with the approved remediation plan, are
reckless or willful, constitute gross negligence or
wanton misconduct, or are unlawful.
(4) Regulations.--The Secretary may issue such regulations
as are appropriate to carry out this subsection.
(h) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
carry out this section $25,000,000 for each of fiscal years
2005 through 2009.
(2) Use.--Of the amounts authorized under paragraph (1),
$5,000,000 are authorized for each fiscal year for activities
under subsection (f).

SEC. 319. COMBINED HYDROCARBON LEASING.

(a) Special Provisions Regarding Leasing.--Section 17(b)(2) of the
Mineral Leasing Act (30 U.S.C. 226(b)(2)) is amended--
(1) by inserting ``(A)'' after ``(2)''; and
(2) by adding at the end the following:
``(B) For any area that contains any combination of tar sand and
oil or gas (or both), the Secretary may issue under this Act,
separately--
``(i) a lease for exploration for and extraction of tar
sand; and
``(ii) a lease for exploration for and development of oil
and gas.
``(C) A lease issued for tar sand shall be issued using the same
bidding process, annual rental, and posting period as a lease issued
for oil and gas, except that the minimum acceptable bid required for a
lease issued for tar sand shall be $2 per acre.
``(D) The Secretary may waive, suspend, or alter any requirement
under section 26 that a permittee under a permit authorizing
prospecting for tar sand must exercise due diligence, to promote any
resource covered by a combined hydrocarbon lease.''.
(b) Conforming Amendment.--Section 17(b)(1)(B) of the Mineral
Leasing Act (30 U.S.C. 226(b)(1)(B)) is amended in the second sentence
by inserting ``, subject to paragraph (2)(B),'' after ``Secretary''.
(c) Regulations.--Not later than 45 days after the date of
enactment of this Act, the Secretary shall issue final regulations to
implement this section.

SEC. 320. LIQUIFIED NATURAL GAS.

Section 3 of the Natural Gas Act (15 U.S.C. 717b) is amended by
adding at the end the following:
``(d) Limitation on Commission Authority.--If an applicant under
this section proposes to construct or expand a liquified natural gas
terminal either onshore or in State waters for the purpose of importing
liquified natural gas into the United States, the Commission shall not
deny or condition the application solely on the basis that the
applicant proposes to utilize the terminal exclusively or partially for
gas that the applicant or any affiliate thereof will supply thereto. In
all other respects, subsection (a) shall remain applicable to any such
proposal.''.

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

(a) Amendment to Outer Continental Shelf Lands Act.--Section 8 of
the Outer Continental Shelf Lands Act (43 U.S.C. 1337) is amended by
adding at the end the following:
``(p) Leases, Easements, or Rights-Of-Way for Energy and Related
Purposes.--
``(1) In general.--The Secretary, in consultation with the
Secretary of the Department in which the Coast Guard is
operating and other relevant departments and agencies of the
Federal Government, may grant a lease, easement, or right-of-
way on the outer Continental Shelf for activities not otherwise
authorized in this Act, the Deepwater Port Act of 1974 (33
U.S.C. 1501 et seq.), or the Ocean Thermal Energy Conversion
Act of 1980 (42 U.S.C. 9101 et seq.), or other applicable law,
if those activities--
``(A) support exploration, development, production,
transportation, or storage of oil, natural gas, or
other minerals;
``(B) produce or support production,
transportation, or transmission of energy from sources
other than oil and gas; or
``(C) use, for energy-related or marine-related
purposes, facilities currently or previously used for
activities authorized under this Act.
``(2) Payments.--The Secretary shall establish reasonable
forms of payments for any easement or right-of-way granted
under this subsection. Such payments shall not be assessed on
the basis of throughput or production. The Secretary may
establish fees, rentals, bonus, or other payments by rule or by
agreement with the party to which the lease, easement, or
right-of-way is granted.
``(3) Consultation.--Before exercising authority under this
subsection, the Secretary shall consult with the Secretary of
Defense and other appropriate agencies concerning issues
related to national security and navigational obstruction.
``(4) Competitive or noncompetitive basis.--
``(A) In general.--The Secretary may issue a lease,
easement, or right-of-way for energy and related
purposes as described in paragraph (1) on a competitive
or noncompetitive basis.
``(B) Considerations.--In determining whether a
lease, easement, or right-of-way shall be granted
competitively or noncompetitively, the Secretary shall
consider such factors as--
``(i) prevention of waste and conservation
of natural resources;
``(ii) the economic viability of an energy
project;
``(iii) protection of the environment;
``(iv) the national interest and national
security;
``(v) human safety;
``(vi) protection of correlative rights;
and
``(vii) potential return for the lease,
easement, or right-of-way.
``(5) Regulations.--Not later than 270 days after the date
of enactment of the Energy Policy Act of 2003, the Secretary,
in consultation with the Secretary of the Department in which
the Coast Guard is operating and other relevant agencies of the
Federal Government and affected States, shall issue any
necessary regulations to ensure safety, protection of the
environment, prevention of waste, and conservation of the
natural resources of the outer Continental Shelf, protection of
national security interests, and protection of correlative
rights in the outer Continental Shelf.
``(6) Security.--The Secretary shall require the holder of
a lease, easement, or right-of-way granted under this
subsection to furnish a surety bond or other form of security,
as prescribed by the Secretary, and to comply with such other
requirements as the Secretary considers necessary to protect
the interests of the United States.
``(7) Effect of subsection.--Nothing in this subsection
displaces, supersedes, limits, or modifies the jurisdiction,
responsibility, or authority of any Federal or State agency
under any other Federal law.
``(8) Applicability.--This subsection does not apply to any
area on the outer Continental Shelf designated as a National
Marine Sanctuary.''.
(b) Conforming Amendment.--Section 8 of the Outer Continental Shelf
Lands Act (43 U.S.C. 1337) is amended by striking the section heading
and inserting the following: ``Leases, Easements, and Rights-of-Way on
the Outer Continental Shelf.--''.
(c) Savings Provision.--Nothing in the amendment made by subsection
(a) requires, with respect to any project--
(1) for which offshore test facilities have been
constructed before the date of enactment of this Act; or
(2) for which a request for proposals has been issued by a
public authority,
any resubmittal of documents previously submitted or any
reauthorization of actions previously authorized.

SEC. 322. PRESERVATION OF GEOLOGICAL AND GEOPHYSICAL DATA.

(a) Short Title.--This section may be cited as the ``National
Geological and Geophysical Data Preservation Program Act of 2004''.
(b) Program.--The Secretary shall carry out a National Geological
and Geophysical Data Preservation Program in accordance with this
section--
(1) to archive geologic, geophysical, and engineering data,
maps, well logs, and samples;
(2) to provide a national catalog of such archival
material; and
(3) to provide technical and financial assistance related
to the archival material.
(c) Plan.--Not later than 1 year after the date of enactment of
this Act, the Secretary shall submit to Congress a plan for the
implementation of the Program.
(d) Data Archive System.--
(1) Establishment.--The Secretary shall establish, as a
component of the Program, a data archive system to provide for
the storage, preservation, and archiving of subsurface,
surface, geological, geophysical, and engineering data and
samples. The Secretary, in consultation with the Advisory
Committee, shall develop guidelines relating to the data
archive system, including the types of data and samples to be
preserved.
(2) System components.--The system shall be comprised of
State agencies that elect to be part of the system and agencies
within the Department of the Interior that maintain geological
and geophysical data and samples that are designated by the
Secretary in accordance with this subsection. The Program shall
provide for the storage of data and samples through data
repositories operated by such agencies.
(3) Limitation of designation.--The Secretary may not
designate a State agency as a component of the data archive
system unless that agency is the agency that acts as the
geological survey in the State.
(4) Data from federal land.--The data archive system shall
provide for the archiving of relevant subsurface data and
samples obtained from Federal land--
(A) in the most appropriate repository designated
under paragraph (2), with preference being given to
archiving data in the State in which the data were
collected; and
(B) consistent with all applicable law and
requirements relating to confidentiality and
proprietary data.
(e) National Catalog.--
(1) In general.--As soon as practicable after the date of
enactment of this Act, the Secretary shall develop and
maintain, as a component of the Program, a national catalog
that identifies--
(A) data and samples available in the data archive
system established under subsection (d);
(B) the repository for particular material in the
system; and
(C) the means of accessing the material.
(2) Availability.--The Secretary shall make the national
catalog accessible to the public on the site of the Survey on
the Internet, consistent with all applicable requirements
related to confidentiality and proprietary data.
(f) Advisory Committee.--
(1) In general.--The Advisory Committee shall advise the
Secretary on planning and implementation of the Program.
(2) New duties.--In addition to its duties under the
National Geologic Mapping Act of 1992 (43 U.S.C. 31a et seq.),
the Advisory Committee shall perform the following duties:
(A) Advise the Secretary on developing guidelines
and procedures for providing assistance for facilities
under subsection (g)(1).
(B) Review and critique the draft implementation
plan prepared by the Secretary under subsection (c).
(C) Identify useful studies of data archived under
the Program that will advance understanding of the
Nation's energy and mineral resources, geologic
hazards, and engineering geology.
(D) Review the progress of the Program in archiving
significant data and preventing the loss of such data,
and the scientific progress of the studies funded under
the Program.
(E) Include in the annual report to the Secretary
required under section 5(b)(3) of the National Geologic
Mapping Act of 1992 (43 U.S.C. 31d(b)(3)) an evaluation
of the progress of the Program toward fulfilling the
purposes of the Program under subsection (b).
(g) Financial Assistance.--
(1) Archive facilities.--Subject to the availability of
appropriations, the Secretary shall provide financial
assistance to a State agency that is designated under
subsection (d)(2) for providing facilities to archive energy
material.
(2) Studies.--Subject to the availability of
appropriations, the Secretary shall provide financial
assistance to any State agency designated under subsection
(d)(2) for studies and technical assistance activities that
enhance understanding, interpretation, and use of materials
archived in the data archive system established under
subsection (d).
(3) Federal share.--The Federal share of the cost of an
activity carried out with assistance under this subsection
shall be not more than 50 percent of the total cost of the
activity.
(4) Private contributions.--The Secretary shall apply to
the non-Federal share of the cost of an activity carried out
with assistance under this subsection the value of private
contributions of property and services used for that activity.
(h) Report.--The Secretary shall include in each report under
section 8 of the National Geologic Mapping Act of 1992 (43 U.S.C.
31g)--
(1) a description of the status of the Program;
(2) an evaluation of the progress achieved in developing
the Program during the period covered by the report; and
(3) any recommendations for legislative or other action the
Secretary considers necessary and appropriate to fulfill the
purposes of the Program under subsection (b).
(i) Maintenance of State Effort.--It is the intent of Congress that
the States not use this section as an opportunity to reduce State
resources applied to the activities that are the subject of the
Program.
(j) Definitions.--In this section:
(1) Advisory committee.--The term ``Advisory Committee''
means the advisory committee established under section 5 of the
National Geologic Mapping Act of 1992 (43 U.S.C. 31d).
(2) Program.--The term ``Program'' means the National
Geological and Geophysical Data Preservation Program carried
out under this section.
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Interior, acting through the Director of the United
States Geological Survey.
(4) Survey.--The term ``Survey'' means the United States
Geological Survey.
(k) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $30,000,000 for each of fiscal
years 2004 through 2008.

SEC. 323. OIL AND GAS LEASE ACREAGE LIMITATIONS.

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

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

(a) Assessment.--The Secretary of Energy shall assess the economic
implication of the dependence of the State of Hawaii on oil as the
principal source of energy for the State, including--
(1) the short- and long-term prospects for crude oil supply
disruption and price volatility and potential impacts on the
economy of Hawaii;
(2) the economic relationship between oil-fired generation
of electricity from residual fuel and refined petroleum
products consumed for ground, marine, and air transportation;
(3) the technical and economic feasibility of increasing
the contribution of renewable energy resources for generation
of electricity, on an island-by-island basis, including--
(A) siting and facility configuration;
(B) environmental, operational, and safety
considerations;
(C) the availability of technology;
(D) effects on the utility system including
reliability;
(E) infrastructure and transport requirements;
(F) community support; and
(G) other factors affecting the economic impact of
such an increase and any effect on the economic
relationship described in paragraph (2);
(4) the technical and economic feasibility of using
liquified natural gas to displace residual fuel oil for
electric generation, including neighbor island opportunities,
and the effect of the displacement on the economic relationship
described in paragraph (2), including--
(A) the availability of supply;
(B) siting and facility configuration for onshore
and offshore liquified natural gas receiving terminals;
(C) the factors described in subparagraphs (B)
through (F) of paragraph (3); and
(D) other economic factors;
(5) the technical and economic feasibility of using
renewable energy sources (including hydrogen) for ground,
marine, and air transportation energy applications to displace
the use of refined petroleum products, on an island-by-island
basis, and the economic impact of the displacement on the
relationship described in (2); and
(6) an island-by-island approach to--
(A) the development of hydrogen from renewable
resources; and
(B) the application of hydrogen to the energy needs
of Hawaii
(b) Contracting Authority.--The Secretary of Energy may carry out
the assessment under subsection (a) directly or, in whole or in part,
through 1 or more contracts with qualified public or private entities.
(c) Report.--Not later than 300 days after the date of enactment of
this Act, the Secretary of Energy shall prepare, in consultation with
agencies of the State of Hawaii and other stakeholders, as appropriate,
and submit to Congress, a report detailing the findings, conclusions,
and recommendations resulting from the assessment.
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.

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

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

``appeals to the secretary

``Sec. 319. (a) Notice.--The Secretary shall publish an initial
notice in the Federal Register not later than 30 days after the date of
the filing of any appeal to the Secretary of a consistency
determination under section 307.
``(b) Closure of Record.--
``(1) In general.--Not later than the end of the 120-day
period beginning on the date of publication of an initial
notice under subsection (a), the Secretary shall receive no
more filings on the appeal and the administrative record
regarding the appeal shall be closed.
``(2) Notice.--Upon the closure of the administrative
record, the Secretary shall immediately publish a notice that
the administrative record has been closed.
``(c) Deadline for Decision.--The Secretary shall issue a decision
in any appeal filed under section 307 not later than 120 days after the
closure of the administrative record.
``(d) Application.--This section applies to appeals initiated by
the Secretary and appeals filed by an applicant.''.
(b) Application.--
(1) In general.--Except as provided in paragraph (2), the
amendment made by subsection (a) shall apply with respect to
any appeal initiated or filed before, on, or after the date of
enactment of this Act.
(2) Limitation.--Subsection (a) of section 319 of the
Coastal Zone Management Act of 1972 (as amended by subsection
(a)) shall not apply with respect to an appeal initiated or
filed before the date of enactment of this Act.
(c) Closure of Record for Appeal Filed Before Date of Enactment.--
Notwithstanding section 319(b)(1) of the Coastal Zone Management Act of
1972 (as amended by this section), in the case of an appeal of a
consistency determination under section 307 of that Act initiated or
filed before the date of enactment of this Act, the Secretary of
Commerce shall receive no more filings on the appeal and the
administrative record regarding the appeal shall be closed not later
than 120 days after the date of enactment of this Act.

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

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

``reimbursement for costs of certain analyses, documentation, and
studies

``Sec. 38. (a) In General.--The Secretary of the Interior may
reimburse a person that is a lessee, operator, operating rights owner,
or applicant for any lease under this Act for reasonable amounts paid
by the person for preparation for the Secretary by a contractor or
other person selected by the Secretary of any project-level analysis,
documentation, or related study required pursuant to the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) with respect
to the lease.
``(b) Conditions.--The Secretary may provide reimbursement under
subsection (a) only if--
``(1) adequate funding to enable the Secretary to timely
prepare the analysis, documentation, or related study is not
appropriated;
``(2) the person paid the costs voluntarily;
``(3) the person maintains records of its costs in
accordance with regulations issued by the Secretary;
``(4) the reimbursement is in the form of a reduction in
the Federal share of the royalty required to be paid for the
lease for which the analysis, documentation, or related study
is conducted, and is agreed to by the Secretary and the person
reimbursed prior to commencing the analysis, documentation, or
related study; and
``(5) the agreement required under paragraph (4) contains
provisions--
``(A) reducing royalties owed on lease production
based on market prices;
``(B) stipulating an automatic termination of the
royalty reduction upon recovery of documented costs;
and
``(C) providing a process by which the lessee may
seek reimbursement for circumstances in which
production from the specified lease is not possible.''.
(b) Application.--The amendment made by this section shall apply
with respect to an analysis, documentation, or a related study
conducted on or after the date of enactment of this Act for any lease
entered into before, on, or after the date of enactment of this Act.
(c) Deadline for Regulations.--The Secretary shall issue
regulations implementing the amendment made by this section by not
later than 1 year after the date of enactment of this Act.

SEC. 327. HYDRAULIC FRACTURING.

Paragraph (1) of section 1421(d) of the Safe Drinking Water Act (42
U.S.C. 300h(d)) is amended to read as follows:
``(1) Underground injection.--The term `underground
injection'--
``(A) means the subsurface emplacement of fluids by
well injection; and
``(B) excludes--
``(i) the underground injection of natural
gas for purposes of storage; and
``(ii) the underground injection of fluids
or propping agents pursuant to hydraulic
fracturing operations related to oil or gas
production activities.''.

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

Section 502 of the Federal Water Pollution Control Act (33 U.S.C.
1362) is amended by adding at the end the following:
``(24) Oil and gas exploration and production.--The term
`oil and gas exploration, production, processing, or treatment
operations or transmission facilities' means all field
activities or operations associated with exploration,
production, processing, or treatment operations, or
transmission facilities, including activities necessary to
prepare a site for drilling and for the movement and placement
of drilling equipment, whether or not such field activities or
operations may be considered to be construction activities.''.

SEC. 329. OUTER CONTINENTAL SHELF PROVISIONS.

(a) Storage on the Outer Continental Shelf.--Section 5(a)(5) of the
Outer Continental Shelf Lands Act (43 U.S.C. 1334(a)(5)) is amended by
inserting ``from any source'' after ``oil and gas''.
(b) Deepwater Projects.--Section 6 of the Deepwater Port Act of
1974 (33 U.S.C. 1505) is amended by adding at the end the following:
``(d) Reliance on Activities of Other Agencies.--In fulfilling the
requirements of section 5(f)--
``(1) to the extent that other Federal agencies have
prepared environmental impact statements, are conducting
studies, or are monitoring the affected human, marine, or
coastal environment, the Secretary may use the information
derived from those activities in lieu of directly conducting
such activities; and
``(2) the Secretary may use information obtained from any
State or local government or from any person.''.
(c) Natural Gas Defined.--Section 3(13) of the Deepwater Port Act
of 1974 (33 U.S.C. 1502(13)) is amended to read as follows:
``(13) natural gas means--
``(A) natural gas unmixed; or
``(B) any mixture of natural or artificial gas,
including compressed or liquefied natural gas, natural
gas liquids, liquefied petroleum gas, and condensate
recovered from natural gas;''.

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

(a) Agency of Record, Pipeline Construction Projects.--Any Federal
administrative agency proceeding that is an appeal or review under
section 319 of the Coastal Zone Management Act of 1972 (16 U.S.C.
1465), as amended by this Act, related to Federal authority for an
interstate natural gas pipeline construction project, including
construction of natural gas storage and liquefied natural gas
facilities, shall use as its exclusive record for all purposes the
record compiled by the Federal Energy Regulatory Commission pursuant to
the Commission's proceeding under sections 3 and 7 of the Natural Gas
Act (15 U.S.C. 717b, 717f).
(b) Sense of Congress.--It is the sense of Congress that all
Federal and State agencies with jurisdiction over interstate natural
gas pipeline construction activities should coordinate their
proceedings within the timeframes established by the Federal Energy
Regulatory Commission when the Commission is acting under sections 3
and 7 of the Natural Gas Act (15 U.S.C. 717b, 717f) to determine
whether a certificate of public convenience and necessity should be
issued for a proposed interstate natural gas pipeline.
(c) Agency of Record, Offshore Mineral Development Projects.--Any
Federal administrative agency proceeding that is an appeal or review
under section 319 of the Coastal Zone Management Act of 1972 (16 U.S.C.
1465), as amended by this Act, related to Federal authority for the
permitting, approval, or other authorization of energy projects,
including projects to explore, develop, or produce mineral resources in
or underlying the outer Continental Shelf shall use as its exclusive
record for all purposes (except for the filing of pleadings) the record
compiled by the relevant Federal permitting agency.

SEC. 331. BILATERAL INTERNATIONAL OIL SUPPLY AGREEMENTS.

(a) In General.--Notwithstanding any other provision of law, the
President may export oil to, or secure oil for, any country pursuant to
a bilateral international oil supply agreement entered into by the
United States with the country before June 25, 1979, or to any country
pursuant to the International Emergency Oil Sharing Plan of the
International Energy Agency.
(b) Memorandum of Agreement.--The following agreements are deemed
to have entered into force by operation of law and are deemed to have
no termination date:
(1) The agreement entitled ``Agreement amending and
extending the memorandum of agreement of June 22, 1979'',
entered into force November 13, 1994 (TIAS 12580).
(2) The agreement entitled ``Agreement amending the
contingency implementing arrangements of October 17, 1980'',
entered into force June 27, 1995 (TIAS 12670).

SEC. 332. NATURAL GAS MARKET REFORM.

(a) Clarification of Existing CFTC Authority.--
(1) False reporting.--Section 9(a)(2) of the Commodity
Exchange Act (7 U.S.C. 13(a)(2)) is amended by striking ``false
or misleading or knowingly inaccurate reports'' and inserting
``knowingly false or knowingly misleading or knowingly
inaccurate reports''.
(2) Commission administrative and civil authority.--Section
9 of the Commodity Exchange Act (7 U.S.C. 13) is amended by
redesignating subsection (f) as subsection (e), and adding:
``(f) Commission Administrative and Civil Authority.--The
Commission may bring administrative or civil actions as provided in
this Act against any person for a violation of any provision of this
section including, but not limited to, false reporting under subsection
(a)(2).''.
(3) Effect of amendments.--The amendments made by
paragraphs (1) and (2) restate, without substantive change,
existing burden of proof provisions and existing Commission
civil enforcement authority, respectively. These clarifying
changes do not alter any existing burden of proof or grant any
new statutory authority. The provisions of this section, as
restated herein, continue to apply to any action pending on or
commenced after the date of enactment of this Act for any act,
omission, or violation occurring before, on, or after, such
date of enactment.
(b) Fraud Authority.--Section 4b of the Commodity Exchange Act (7
U.S.C. 6b) is amended--
(1) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively; and
(2) by striking subsection (a) and inserting the following:
``(a) It shall be unlawful--
``(1) for any person, in or in connection with any order to
make, or the making of, any contract of sale of any commodity
for future delivery or in interstate commerce, that is made, or
to be made, on or subject to the rules of a designated contract
market, for or on behalf of any other person; or
``(2) for any person, in or in connection with any order to
make, or the making of, any contract of sale of any commodity
for future delivery, or other agreement, contract, or
transaction subject to section 5a(g) (1) and (2) of this Act,
that is made, or to be made, for or on behalf of, or with, any
other person, other than on or subject to the rules of a
designated contract market--
``(A) to cheat or defraud or attempt to cheat or
defraud such other person;
``(B) willfully to make or cause to be made to such
other person any false report or statement or willfully
to enter or cause to be entered for such other person
any false record;
``(C) willfully to deceive or attempt to deceive
such other person by any means whatsoever in regard to
any order or contract or the disposition or execution
of any order or contract, or in regard to any act of
agency performed, with respect to any order or contract
for or, in the case of subsection (a)(2), with such
other person; or
``(D)(i) to bucket an order if such order is either
represented by such person as an order to be executed,
or required to be executed, on or subject to the rules
of a designated contract market; or
``(ii) to fill an order by offset against the order
or orders of any other person, or willfully and
knowingly and without the prior consent of such other
person to become the buyer in respect to any selling
order of such other person, or become the seller in
respect to any buying order of such other person, if
such order is either represented by such person as an
order to be executed, or required to be executed, on or
subject to the rules of a designated contract market.
``(b) Subsection (a)(2) shall not obligate any person, in
connection with a transaction in a contract of sale of a commodity for
future delivery, or other agreement, contract or transaction subject to
section 5a(g) (1) and (2) of this Act, with another person, to disclose
to such other person nonpublic information that may be material to the
market price of such commodity or transaction, except as necessary to
make any statement made to such other person in connection with such
transaction, not misleading in any material respect.''.
(c) Jurisdiction of the CFTC.--The Natural Gas Act (15 U.S.C. 717
et seq.) is amended by adding at the end:

``SEC. 26. JURISDICTION.

``This Act shall not affect the exclusive jurisdiction of the
Commodity Futures Trading Commission with respect to accounts,
agreements, contracts, or transactions in commodities under the
Commodity Exchange Act (7 U.S.C. 1 et seq.). Any request for
information by the Commission to a designated contract market,
registered derivatives transaction execution facility, board of trade,
exchange, or market involving accounts, agreements, contracts, or
transactions in commodities (including natural gas, electricity, and
other energy commodities) within the exclusive jurisdiction of the
Commodity Futures Trading Commission shall be directed to the Commodity
Futures Trading Commission, which shall cooperate in responding to any
information request by the Commission.''.
(d) Increased Penalties.--Section 21 of the Natural Gas Act (15
U.S.C. 717t) is amended--
(1) in subsection (a)--
(A) by striking ``$5,000'' and inserting
``$1,000,000''; and
(B) by striking ``two years'' and inserting ``5
years''; and
(2) in subsection (b), by striking ``$500'' and inserting
``$50,000''.

SEC. 333. NATURAL GAS MARKET TRANSPARENCY.

The Natural Gas Act (15 U.S.C 717 et seq.) is amended--
(1) by redesignating section 24 as section 25; and
(2) by inserting after section 23 the following:

``SEC. 24. NATURAL GAS MARKET TRANSPARENCY.

``(a) Authorization.--(1) Not later than 180 days after the date of
enactment of the Energy Policy Act of 2003, the Federal Energy
Regulatory Commission shall issue rules directing all entities subject
to the Commission's jurisdiction as provided under this Act to timely
report information about the availability and prices of natural gas
sold at wholesale in interstate commerce to the Commission and price
publishers.
``(2) The Commission shall evaluate the data for adequate price
transparency and accuracy.
``(3) Rules issued under this subsection requiring the reporting of
information to the Commission that may become publicly available shall
be limited to aggregate data and transaction-specific data that are
otherwise required by the Commission to be made public.
``(4) In exercising its authority under this section, the
Commission shall not--
``(A) compete with, or displace from the market place, any
price publisher; or
``(B) regulate price publishers or impose any requirements
on the publication of information.
``(b) Timely Enforcement.--No person shall be subject to any
penalty under this section with respect to a violation occurring more
than 3 years before the date on which the Federal Energy Regulatory
Commission seeks to assess a penalty.
``(c) Limitation on Commission Authority.--(1) The Commission shall
not condition access to interstate pipeline transportation upon the
reporting requirements authorized under this section.
``(2) Natural gas sales by a producer that are attributable to
volumes of natural gas produced by such producer shall not be subject
to the rules issued pursuant to this section.
``(3) The Commission shall not require natural gas producers,
processors, or users who have a de minimis market presence to
participate in the reporting requirements provided in this section.''.

Subtitle C--Access to Federal Land

SEC. 341. OFFICE OF FEDERAL ENERGY PROJECT COORDINATION.

(a) Establishment.--The President shall establish the Office of
Federal Energy Project Coordination (referred to in this section as the
``Office'') within the Executive Office of the President in the same
manner and with the same mission as the White House Energy Projects
Task Force established by Executive Order No. 13212 (42 U.S.C. 13201
note).
(b) Staffing.--The Office shall be staffed by functional experts
from relevant Federal agencies on a nonreimbursable basis to carry out
the mission of the Office.
(c) Report.--The Office shall transmit an annual report to Congress
that describes the activities put in place to coordinate and expedite
Federal decisions on energy projects. The report shall list
accomplishments in improving the Federal decisionmaking process and
shall include any additional recommendations or systemic changes needed
to establish a more effective and efficient Federal permitting process.

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

(a) Review of Onshore Oil and Gas Leasing Practices.--
(1) In general.--The Secretary of the Interior, in
consultation with the Secretary of Agriculture with respect to
National Forest System lands under the jurisdiction of the
Department of Agriculture, shall perform an internal review of
current Federal onshore oil and gas leasing and permitting
practices.
(2) Inclusions.--The review shall include the process for--
(A) accepting or rejecting offers to lease;
(B) administrative appeals of decisions or orders
of officers or employees of the Bureau of Land
Management with respect to a Federal oil or gas lease;
(C) considering surface use plans of operation,
including the timeframes in which the plans are
considered, and any recommendations for improving and
expediting the process; and
(D) identifying stipulations to address site-
specific concerns and conditions, including those
stipulations relating to the environment and resource
use conflicts.
(b) Report.--Not later than 180 days after the date of enactment of
this Act, the Secretary of the Interior and the Secretary of
Agriculture shall transmit a report to Congress that describes--
(1) actions taken under section 3 of Executive Order No.
13212 (42 U.S.C. 13201 note); and
(2) actions taken or any plans to improve the Federal
onshore oil and gas leasing program.

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

(a) Timely Action on Leases and Permits.--To ensure timely action
on oil and gas leases and applications for permits to drill on land
otherwise available for leasing, the Secretary of the Interior (in this
section referred to as the ``Secretary'') shall--
(1) ensure expeditious compliance with section 102(2)(C) of
the National Environmental Policy Act of 1969 (42 U.S.C.
4332(2)(C));
(2) improve consultation and coordination with the States
and the public; and
(3) improve the collection, storage, and retrieval of
information relating to the leasing activities.
(b) Best Management Practices.--
(1) In general.--Not later than 18 months after the date of
enactment of this Act, the Secretary shall develop and
implement best management practices to--
(A) improve the administration of the onshore oil
and gas leasing program under the Mineral Leasing Act
(30 U.S.C. 181 et seq.); and
(B) ensure timely action on oil and gas leases and
applications for permits to drill on lands otherwise
available for leasing.
(2) Considerations.--In developing the best management
practices under paragraph (1), the Secretary shall consider any
recommendations from the review under section 342.
(3) Regulations.--Not later than 180 days after the
development of best management practices under paragraph (1),
the Secretary shall publish, for public comment, proposed
regulations that set forth specific timeframes for processing
leases and applications in accordance with the practices,
including deadlines for--
(A) approving or disapproving resource management
plans and related documents, lease applications, and
surface use plans; and
(B) related administrative appeals.
(c) Improved Enforcement.--The Secretary shall improve inspection
and enforcement of oil and gas activities, including enforcement of
terms and conditions in permits to drill.
(d) Authorization of Appropriations.--In addition to amounts
authorized to be appropriated to carry out section 17 of the Mineral
Leasing Act (30 U.S.C. 226), there are authorized to be appropriated to
the Secretary for each of fiscal years 2004 through 2007--
(1) $40,000,000 to carry out subsections (a) and (b); and
(2) $20,000,000 to carry out subsection (c).

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

(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Secretary of the Interior and the Secretary
of Agriculture shall enter into a memorandum of understanding regarding
oil and gas leasing on--
(1) public lands under the jurisdiction of the Secretary of
the Interior; and
(2) National Forest System lands under the jurisdiction of
the Secretary of Agriculture.
(b) Contents.--The memorandum of understanding shall include
provisions that--
(1) establish administrative procedures and lines of
authority that ensure timely processing of oil and gas lease
applications, surface use plans of operation, and applications
for permits to drill, including steps for processing surface
use plans and applications for permits to drill consistent with
the timelines established by the amendment made by section 348;
(2) eliminate duplication of effort by providing for
coordination of planning and environmental compliance efforts;
and
(3) ensure that lease stipulations are--
(A) applied consistently;
(B) coordinated between agencies; and
(C) only as restrictive as necessary to protect the
resource for which the stipulations are applied.
(c) Data Retrieval System.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary of the Interior and the
Secretary of Agriculture shall establish a joint data retrieval
system that is capable of--
(A) tracking applications and formal requests made
in accordance with procedures of the Federal onshore
oil and gas leasing program; and
(B) providing information regarding the status of
the applications and requests within the Department of
the Interior and the Department of Agriculture.
(2) Resource mapping.--Not later than 2 years after the
date of enactment of this Act, the Secretary of the Interior
and the Secretary of Agriculture shall establish a joint
Geographic Information System mapping system for use in--
(A) tracking surface resource values to aid in
resource management; and
(B) processing surface use plans of operation and
applications for permits to drill.

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

(a) Assessment.--Section 604 of the Energy Act of 2000 (42 U.S.C.
6217) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) by striking ``reserve''; and
(ii) by striking ``and'' after the
semicolon; and
(B) by striking paragraph (2) and inserting the
following:
``(2) the extent and nature of any restrictions or
impediments to the development of the resources, including--
``(A) impediments to the timely granting of leases;
``(B) post-lease restrictions, impediments, or
delays on development for conditions of approval,
applications for permits to drill, or processing of
environmental permits; and
``(C) permits or restrictions associated with
transporting the resources for entry into commerce; and
``(3) the quantity of resources not produced or introduced
into commerce because of the restrictions.'';
(2) in subsection (b)--
(A) by striking ``reserve'' and inserting
``resource''; and
(B) by striking ``publically'' and inserting
``publicly''; and
(3) by striking subsection (d) and inserting the following:
``(d) Assessments.--Using the inventory, the Secretary of Energy
shall make periodic assessments of economically recoverable resources
accounting for a range of parameters such as current costs, commodity
prices, technology, and regulations.''.
(b) Methodology.--The Secretary of the Interior shall use the same
assessment methodology across all geological provinces, areas, and
regions in preparing and issuing national geological assessments to
ensure accurate comparisons of geological resources.

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

(a) Requirement.--The head of each Federal agency shall require
that before the Federal agency takes any action that could have a
significant adverse effect on the supply of domestic energy resources
from Federal public land, the Federal agency taking the action shall
comply with Executive Order No. 13211 (42 U.S.C. 13201 note).
(b) Guidance.--Not later than 180 days after the date of enactment
of this Act, the Secretary of Energy shall publish guidance for
purposes of this section describing what constitutes a significant
adverse effect on the supply of domestic energy resources under
Executive Order No. 13211 (42 U.S.C. 13201 note).
(c) Memorandum of Understanding.--The Secretary of the Interior and
the Secretary of Agriculture shall include in the memorandum of
understanding under section 344 provisions for implementing subsection
(a) of this section.

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

(a) Establishment.--The Secretary of the Interior (in this section
referred to as the ``Secretary'') shall establish a Federal Permit
Streamlining Pilot Project (in this section referred to as the ``Pilot
Project'').
(b) Memorandum of Understanding.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall enter into a
memorandum of understanding with the Secretary of Agriculture,
the Administrator of the Environmental Protection Agency, and
the Chief of Engineers of the Army Corps of Engineers for
purposes of this section.
(2) State participation.--The Secretary may request that
the Governors of Wyoming, Montana, Colorado, Utah, and New
Mexico be signatories to the memorandum of understanding.
(c) Designation of Qualified Staff.--
(1) In general.--Not later than 30 days after the date of
the signing of the memorandum of understanding under subsection
(b), all Federal signatory parties shall assign to each of the
field offices identified in subsection (d), on a
nonreimbursable basis, an employee who has expertise in the
regulatory issues relating to the office in which the employee
is employed, including, as applicable, particular expertise
in--
(A) the consultations and the preparation of
biological opinions under section 7 of the Endangered
Species Act of 1973 (16 U.S.C. 1536);
(B) permits under section 404 of Federal Water
Pollution Control Act (33 U.S.C. 1344);
(C) regulatory matters under the Clean Air Act (42
U.S.C. 7401 et seq.);
(D) planning under the National Forest Management
Act of 1976 (16 U.S.C. 472a et seq.); and
(E) the preparation of analyses under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et
seq.).
(2) Duties.--Each employee assigned under paragraph (1)
shall--
(A) not later than 90 days after the date of
assignment, report to the Bureau of Land Management
Field Managers in the office to which the employee is
assigned;
(B) be responsible for all issues relating to the
jurisdiction of the home office or agency of the
employee; and
(C) participate as part of the team of personnel
working on proposed energy projects, planning, and
environmental analyses.
(d) Field Offices.--The following Bureau of Land Management Field
Offices shall serve as the Pilot Project offices:
(1) Rawlins, Wyoming.
(2) Buffalo, Wyoming.
(3) Miles City, Montana.
(4) Farmington, New Mexico.
(5) Carlsbad, New Mexico.
(6) Glenwood Springs, Colorado.
(7) Vernal, Utah.
(e) Reports.--Not later than 3 years after the date of enactment of
this Act, the Secretary shall transmit to Congress a report that--
(1) outlines the results of the Pilot Project to date; and
(2) makes a recommendation to the President regarding
whether the Pilot Project should be implemented throughout the
United States.
(f) Additional Personnel.--The Secretary shall assign to each field
office identified in subsection (d) any additional personnel that are
necessary to ensure the effective implementation of--
(1) the Pilot Project; and
(2) other programs administered by the field offices,
including inspection and enforcement relating to energy
development on Federal land, in accordance with the multiple
use mandate of the Federal Land Policy and Management Act of
1976 (43 U.S.C. 1701 et seq).
(g) Savings Provision.--Nothing in this section affects--
(1) the operation of any Federal or State law; or
(2) any delegation of authority made by the head of a
Federal agency whose employees are participating in the Pilot
Project.

SEC. 348. DEADLINE FOR CONSIDERATION OF APPLICATIONS FOR PERMITS.

Section 17 of the Mineral Leasing Act (30 U.S.C. 226) is amended by
adding at the end the following:
``(p) Deadlines for Consideration of Applications for Permits.--
``(1) In general.--Not later than 10 days after the date on
which the Secretary receives an application for any permit to
drill, the Secretary shall--
``(A) notify the applicant that the application is
complete; or
``(B) notify the applicant that information is
missing and specify any information that is required to
be submitted for the application to be complete.
``(2) Issuance or deferral.--Not later than 30 days after
the applicant for a permit has submitted a complete
application, the Secretary shall--
``(A) issue the permit; or
``(B)(i) defer decision on the permit; and
``(ii) provide to the applicant a notice that
specifies any steps that the applicant could take for
the permit to be issued.
``(3) Requirements for deferred applications.--
``(A) In general.--If the Secretary provides notice
under paragraph (2)(B)(ii), the applicant shall have a
period of 2 years from the date of receipt of the
notice in which to complete all requirements specified
by the Secretary, including providing information
needed for compliance with the National Environmental
Policy Act of 1969 (42 U.S.C. 4321 et seq.).
``(B) Issuance of decision on permit.--If the
applicant completes the requirements within the period
specified in subparagraph (A), the Secretary shall
issue a decision on the permit not later than 10 days
after the date of completion of the requirements
described in subparagraph (A).
``(C) Denial of permit.--If the applicant does not
complete the requirements within the period specified
in subparagraph (A), the Secretary shall deny the
permit.
``(q) Report.--On a quarterly basis, each field office of the
Bureau of Land Management and the Forest Service shall transmit to the
Secretary of the Interior or the Secretary of Agriculture,
respectively, a report that--
``(1) specifies the number of applications for permits to
drill received by the field office in the period covered by the
report; and
``(2) describes how each of the applications was disposed
of by the field office.''.

SEC. 349. CLARIFICATION OF FAIR MARKET RENTAL VALUE DETERMINATIONS FOR
PUBLIC LAND AND FOREST SERVICE RIGHTS-OF-WAY.

(a) Linear Rights-Of-Way Under Federal Land Policy and Management
Act of 1976.--Section 504 of the Federal Land Policy and Management Act
of 1976 (43 U.S.C. 1764) is amended by adding at the end the following:
``(k) Determination of Fair Market Value of Linear Rights-of-way.--
``(1) In general.--Effective beginning on the date of the
issuance of the rules required by paragraph (2), for purposes
of subsection (g), the Secretary concerned shall determine the
fair market value for the use of land encumbered by a linear
right-of-way granted, issued, or renewed under this title using
the valuation method described in paragraphs (2), (3), and (4).
``(2) Revisions.--Not later than 1 year after the date of
enactment of this subsection--
``(A) the Secretary of the Interior shall amend
section 2803.1-2 of title 43, Code of Federal
Regulations, as in effect on the date of enactment of
this subsection, to revise the per acre rental fee zone
value schedule by State, county, and type of linear
right-of-way use to reflect current values of land in
each zone; and
``(B) the Secretary of Agriculture shall make the
same revision for linear rights-of-way granted, issued,
or renewed under this title on National Forest System
land.
``(3) Updates.--The Secretary concerned shall annually
update the schedule revised under paragraph (2) by multiplying
the current year's rental per acre by the annual change, second
quarter to second quarter (June 30 to June 30) in the Gross
National Product Implicit Price Deflator Index published in the
Survey of Current Business of the Department of Commerce,
Bureau of Economic Analysis.
``(4) Review.--If the cumulative change in the index
referred to in paragraph (3) exceeds 30 percent, or the change
in the 3-year average of the 1-year Treasury interest rate used
to determine per acre rental fee zone values exceeds plus or
minus 50 percent, the Secretary concerned shall conduct a
review of the zones and rental per acre figures to determine
whether the value of Federal land has differed sufficiently
from the index referred to in paragraph (3) to warrant a
revision in the base zones and rental per acre figures. If, as
a result of the review, the Secretary concerned determines that
such a revision is warranted, the Secretary concerned shall
revise the base zones and rental per acre figures accordingly.
Any revision of base zones and rental per acre figure shall
only affect lease rental rates at inception or renewal.''.
(b) Rights-Of-Way Under Mineral Leasing Act.--Section 28(l) of the
Mineral Leasing Act (30 U.S.C. 185(l)) is amended by inserting before
the period at the end the following: ``using the valuation method
described in section 2803.1-2 of title 43, Code of Federal Regulations,
as revised in accordance with section 504(k) of the Federal Land Policy
and Management Act of 1976 (43 U.S.C. 1764(k))''.

SEC. 350. ENERGY FACILITY RIGHTS-OF-WAY AND CORRIDORS ON FEDERAL LAND.

(a) Report to Congress.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary of Agriculture and the
Secretary of the Interior, in consultation with the Secretary
of Commerce, the Secretary of Defense, the Secretary of Energy,
and the Federal Energy Regulatory Commission, shall submit to
Congress a joint report--
(A) that addresses--
(i) the location of existing rights-of-way
and designated and de facto corridors for oil
and gas pipelines and electric transmission and
distribution facilities on Federal land; and
(ii) opportunities for additional oil and
gas pipeline and electric transmission capacity
within those rights-of-way and corridors; and
(B) that includes a plan for making available, on
request, to the appropriate Federal, State, and local
agencies, tribal governments, and other persons
involved in the siting of oil and gas pipelines and
electricity transmission facilities Geographic
Information System-based information regarding the
location of the existing rights-of-way and corridors
and any planned rights-of-way and corridors.
(2) Consultations and considerations.--In preparing the
report, the Secretary of the Interior and the Secretary of
Agriculture shall consult with--
(A) other agencies of Federal, State, tribal, or
local units of government, as appropriate;
(B) persons involved in the siting of oil and gas
pipelines and electric transmission facilities; and
(C) other interested members of the public.
(3) Limitation.--The Secretary of the Interior and the
Secretary of Agriculture shall limit the distribution of the
report and Geographic Information System-based information
referred to in paragraph (1) as necessary for national and
infrastructure security reasons, if either Secretary determines
that the information may be withheld from public disclosure
under a national security or other exception under section
552(b) of title 5, United States Code.
(b) Corridor Designations.--
(1) 11 contiguous western states.--Not later than 2 years
after the date of enactment of this Act, the Secretary of
Agriculture, the Secretary of Commerce, the Secretary of
Defense, the Secretary of Energy, and the Secretary of the
Interior, in consultation with the Federal Energy Regulatory
Commission and the affected utility industries, shall jointly--
(A) designate, under title V of the Federal Land
Policy and Management Act of 1976 (43 U.S.C. 1761 et
seq.) and other applicable Federal laws, corridors for
oil and gas pipelines and electricity transmission and
facilities on Federal land in the eleven contiguous
Western States (as defined in section 103 of the
Federal Land Policy and Management Act of 1976 (43
U.S.C. 1702));
(B) perform any environmental reviews that may be
required to complete the designations of corridors for
the facilities on Federal land in the eleven contiguous
Western States; and
(C) incorporate the designated corridors into--
(i) the relevant departmental and agency
land use and resource management plans; or
(ii) equivalent plans.
(2) Other states.--Not later than 4 years after the date of
enactment of this Act, the Secretary of Agriculture, the
Secretary of Commerce, the Secretary of Defense, the Secretary
of Energy, and the Secretary of the Interior, in consultation
with the Federal Energy Regulatory Commission and the affected
utility industries, shall jointly--
(A) identify corridors for oil and gas pipelines
and electricity transmission and distribution
facilities on Federal land in the States other than
those described in paragraph (1); and
(B) schedule prompt action to identify, designate,
and incorporate the corridors into the land use plan.
(3) Ongoing responsibilities.--After completing the
requirements under paragraphs (1) and (2), the Secretary of
Agriculture, the Secretary of Commerce, the Secretary of
Defense, the Secretary of Energy, and the Secretary of the
Interior, with respect to lands under their respective
jurisdictions, in consultation with the Federal Energy
Regulatory Commission and the affected utility industries,
shall establish procedures that--
(A) ensure that additional corridors for oil and
gas pipelines and electricity transmission and
distribution facilities on Federal land are promptly
identified and designated; and
(B) expedite applications to construct or modify
oil and gas pipelines and electricity transmission and
distribution facilities within the corridors, taking
into account prior analyses and environmental reviews
undertaken during the designation of corridors.
(c) Considerations.--In carrying out this section, the Secretaries
shall take into account the need for upgraded and new electricity
transmission and distribution facilities to--
(1) improve reliability;
(2) relieve congestion; and
(3) enhance the capability of the national grid to deliver
electricity.
(d) Definition of Corridor.--
(1) In general.--In this section and title V of the Federal
Land Policy and Management Act of 1976 (43 U.S.C. 1761 et
seq.), the term ``corridor'' means--
(A) a linear strip of land--
(i) with a width determined with
consideration given to technological,
environmental, and topographical factors; and
(ii) that contains, or may in the future
contain, 1 or more utility, communication, or
transportation facilities;
(B) a land use designation that is established--
(i) by law;
(ii) by Secretarial Order;
(iii) through the land use planning
process; or
(iv) by other management decision; and
(C) a designation made for the purpose of
establishing the preferred location of compatible
linear facilities and land uses.
(2) Specifications of corridor.--On designation of a
corridor under this section, the centerline, width, and
compatible uses of a corridor shall be specified.

SEC. 351. CONSULTATION REGARDING ENERGY RIGHTS-OF-WAY ON PUBLIC LAND.

(a) Memorandum of Understanding.--
(1) In general.--Not later than 6 months after the date of
enactment of this Act, the Secretary of Energy, in consultation
with the Secretary of the Interior, the Secretary of
Agriculture, and the Secretary of Defense with respect to lands
under their respective jurisdictions, shall enter into a
memorandum of understanding to coordinate all applicable
Federal authorizations and environmental reviews relating to a
proposed or existing utility facility. To the maximum extent
practicable under applicable law, the Secretary of Energy
shall, to ensure timely review and permit decisions, coordinate
such authorizations and reviews with any Indian tribes, multi-
State entities, and State agencies that are responsible for
conducting any separate permitting and environmental reviews of
the affected utility facility.
(2) Contents.--The memorandum of understanding shall
include provisions that--
(A) establish--
(i) a unified right-of-way application
form; and
(ii) an administrative procedure for
processing right-of-way applications, including
lines of authority, steps in application
processing, and timeframes for application
processing;
(B) provide for coordination of planning relating
to the granting of the rights-of-way;
(C) provide for an agreement among the affected
Federal agencies to prepare a single environmental
review document to be used as the basis for all Federal
authorization decisions; and
(D) provide for coordination of use of right-of-way
stipulations to achieve consistency.
(b) Natural Gas Pipelines.--
(1) In general.--With respect to permitting activities for
interstate natural gas pipelines, the May 2002 document
entitled ``Interagency Agreement On Early Coordination Of
Required Environmental And Historic Preservation Reviews
Conducted In Conjunction With The Issuance Of Authorizations To
Construct And Operate Interstate Natural Gas Pipelines
Certificated By The Federal Energy Regulatory Commission''
shall constitute compliance with subsection (a).
(2) Report.--
(A) In general.--Not later than 1 year after the
date of enactment of this Act, and every 2 years
thereafter, agencies that are signatories to the
document referred to in paragraph (1) shall transmit to
Congress a report on how the agencies under the
jurisdiction of the Secretaries are incorporating and
implementing the provisions of the document referred to
in paragraph (1).
(B) Contents.--The report shall address--
(i) efforts to implement the provisions of
the document referred to in paragraph (1);
(ii) whether the efforts have had a
streamlining effect;
(iii) further improvements to the
permitting process of the agency; and
(iv) recommendations for inclusion of State
and tribal governments in a coordinated
permitting process.
(c) Definition of Utility Facility.--In this section, the term
``utility facility'' means any privately, publicly, or cooperatively
owned line, facility, or system--
(1) for the transportation of--
(A) oil, natural gas, synthetic liquid fuel, or
gaseous fuel;
(B) any refined product produced from oil, natural
gas, synthetic liquid fuel, or gaseous fuel; or
(C) products in support of the production of
material referred to in subparagraph (A) or (B);
(2) for storage and terminal facilities in connection with
the production of material referred to in paragraph (1); or
(3) for the generation, transmission, and distribution of
electric energy.

SEC. 352. RENEWABLE ENERGY ON FEDERAL LAND.

(a) Report.--
(1) In general.--Not later than 24 months after the date of
enactment of this Act, the Secretary of the Interior, in
cooperation with the Secretary of Agriculture, shall develop
and transmit to Congress a report that includes recommendations
on opportunities to develop renewable energy on--
(A) public lands under the jurisdiction of the
Secretary of the Interior; and
(B) National Forest System lands under the
jurisdiction of the Secretary of Agriculture.
(2) Contents.--The report shall include--
(A) 5-year plans developed by the Secretary of the
Interior and the Secretary of Agriculture,
respectively, for encouraging the development of
renewable energy consistent with applicable law and
management plans;
(B) an analysis of--
(i) the use of rights-of-way, leases, or
other methods to develop renewable energy on
such lands;
(ii) the anticipated benefits of grants,
loans, tax credits, or other provisions to
promote renewable energy development on such
lands; and
(iii) any issues that the Secretary of the
Interior or the Secretary of Agriculture have
encountered in managing renewable energy
projects on such lands, believe are likely to
arise in relation to the development of
renewable energy on such lands;
(C) a list, developed in consultation with the
Secretary of Energy and the Secretary of Defense, of
lands under the jurisdiction of the Department of
Energy or the Department of Defense that would be
suitable for development for renewable energy, and any
recommended statutory and regulatory mechanisms for
such development; and
(D) any recommendations relating to the issues
addressed in the report.
(b) National Academy of Sciences Study.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, the Secretary of the Interior shall
contract with the National Academy of Sciences to--
(A) study the potential for the development of
wind, solar, and ocean energy (including tidal, wave,
and thermal energy) on the outer Continental Shelf;
(B) assess existing Federal authorities for the
development of such resources; and
(C) recommend statutory and regulatory mechanisms
for such development.
(2) Transmittal.--The results of the study shall be
transmitted to Congress not later than 2 years after the date
of enactment of this Act.
(c) Generation Capacity of Electricity From Renewable Energy
Resources on Public Land.--The Secretary of the Interior shall, not
later than 10 years after the date of enactment of this Act, seek to
approve renewable energy projects located (or to be located) on public
lands with a generation capacity of at least 10,000 megawatts of
electricity.

SEC. 353. ELECTRICITY TRANSMISSION LINE RIGHT-OF-WAY, CLEVELAND
NATIONAL FOREST AND ADJACENT PUBLIC LAND, CALIFORNIA.

(a) Issuance.--
(1) In general.--Not later than 60 days after the
completion of the environmental reviews under subsection (c),
the Secretary of the Interior and the Secretary of Agriculture
shall issue all necessary grants, easements, permits, plan
amendments, and other approvals to allow for the siting and
construction of a high-voltage electricity transmission line
right-of-way running approximately north to south through the
Trabuco Ranger District of the Cleveland National Forest in the
State of California and adjacent lands under the jurisdiction
of the Bureau of Land Management and the Forest Service.
(2) Inclusions.--The right-of-way approvals under paragraph
(1) shall provide all necessary Federal authorization from the
Secretary of the Interior and the Secretary of Agriculture for
the routing, construction, operation, and maintenance of a 500-
kilovolt transmission line capable of meeting the long-term
electricity transmission needs of the region between the
existing Valley-Serrano transmission line to the north and the
Telega-Escondido transmission line to the south, and for
connecting to future generating capacity that may be developed
in the region.
(b) Protection of Wilderness Areas.--The Secretary of the Interior
and the Secretary of Agriculture shall not allow any portion of a
transmission line right-of-way corridor identified in subsection (a) to
enter any identified wilderness area in existence as of the date of
enactment of this Act.
(c) Environmental and Administrative Reviews.--
(1) Department of interior or local agency.--The Secretary
of the Interior, acting through the Director of the Bureau of
Land Management, shall be the lead Federal agency with overall
responsibility to ensure completion of required environmental
and other reviews of the approvals to be issued under
subsection (a).
(2) National forest system land.--For the portions of the
corridor on National Forest System lands, the Secretary of
Agriculture shall complete all required environmental reviews
and administrative actions in coordination with the Secretary
of the Interior.
(3) Expeditious completion.--The reviews required for
issuance of the approvals under subsection (a) shall be
completed not later than 1 year after the date of the enactment
of this Act.
(d) Other Terms and Conditions.--The transmission line right-of-way
shall be subject to such terms and conditions as the Secretary of the
Interior and the Secretary of Agriculture consider necessary, based on
the environmental reviews under subsection (c), to protect the value of
historic, cultural, and natural resources under the jurisdiction of the
Secretary of the Interior or the Secretary of Agriculture.
(e) Preference Among Proposals.--The Secretary of the Interior and
the Secretary of Agriculture shall give a preference to any application
or preapplication proposal for a transmission line right-of-way
referred to in subsection (a) that was submitted before December 31,
2002, over all other applications and proposals for the same or a
similar right-of-way submitted on or after that date.

SEC. 354. SENSE OF CONGRESS REGARDING DEVELOPMENT OF MINERALS UNDER
PADRE ISLAND NATIONAL SEASHORE.

(a) Findings.--Congress finds the following:
(1) Pursuant to Public Law 87-712 (16 U.S.C. 459d et seq.;
popularly known as the ``Federal Enabling Act'') and various
deeds and actions under that Act, the United States is the
owner of only the surface estate of certain lands constituting
the Padre Island National Seashore.
(2) Ownership of the oil, gas, and other minerals in the
subsurface estate of the lands constituting the Padre Island
National Seashore was never acquired by the United States, and
ownership of those interests is held by the State of Texas and
private parties.
(3) Public Law 87-712 (16 U.S.C. 459d et seq.)--
(A) expressly contemplated that the United States
would recognize the ownership and future development of
the oil, gas, and other minerals in the subsurface
estate of the lands constituting the Padre Island
National Seashore by the owners and their mineral
lessees; and
(B) recognized that approval of the State of Texas
was required to create Padre Island National Seashore.
(4) Approval was given for the creation of Padre Island
National Seashore by the State of Texas through Tex. Rev. Civ.
Stat. Ann. Art. 6077(t) (Vernon 1970), which expressly
recognized that development of the oil, gas, and other minerals
in the subsurface of the lands constituting Padre Island
National Seashore would be conducted with full rights of
ingress and egress under the laws of the State of Texas.
(b) Sense of Congress.--It is the sense of Congress that with
regard to Federal law, any regulation of the development of oil, gas,
or other minerals in the subsurface of the lands constituting Padre
Island National Seashore should be made as if those lands retained the
status that the lands had on September 27, 1962.

SEC. 355. ENCOURAGING PROHIBITION OF OFF-SHORE DRILLING IN THE GREAT
LAKES.

Congress encourages--
(1) the States of Illinois, Michigan, New York,
Pennsylvania, and Wisconsin to continue to prohibit offshore
drilling in the Great Lakes for oil and gas; and
(2) the States of Indiana, Minnesota, and Ohio to enact a
prohibition of such drilling.

SEC. 356. FINGER LAKES NATIONAL FOREST WITHDRAWAL.

All Federal land within the boundary of Finger Lakes National
Forest in the State of New York is withdrawn from--
(1) all forms of entry, appropriation, or disposal under
the public land laws; and
(2) disposition under all laws relating to oil and gas
leasing.

SEC. 357. STUDY ON LEASE EXCHANGES IN THE ROCKY MOUNTAIN FRONT.

(a) Definitions.--For the purposes of this section:
(1) Badger-two medicine area.--The term ``Badger-Two
Medicine Area'' means the Forest Service land located in--
(A) T. 31 N., R. 12-13 W.;
(B) T. 30 N., R. 11-13 W.;
(C) T. 29 N., R. 10-16 W.; and
(D) T. 28 N., R. 10-14 W.
(2) Blackleaf area.--The term ``Blackleaf Area'' means the
Federal land owned by the Forest Service and Bureau of Land
Management that is located in--
(A) T. 27 N., R. 9 W.;
(B) T. 26 N., R. 9-10 W.;
(C) T. 25 N., R. 8-10 W.; and
(D) T. 24 N., R. 8-9 W.
(3) Eligible lessee.--The term ``eligible lessee'' means a
lessee under a nonproducing lease.
(4) Nonproducing lease.--The term ``nonproducing lease''
means a Federal oil or gas lease--
(A) that is in existence and in good standing on
the date of enactment of this Act; and
(B) that is located in the Badger-Two Medicine Area
or the Blackleaf Area.
(5) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(6) State.--The term ``State'' means the State of Montana.
(b) Evaluation.--
(1) In general.--The Secretary, in consultation with the
Governor of the State, and the eligible lessees, shall evaluate
opportunities for domestic oil and gas production through the
exchange of the nonproducing leases.
(2) Requirements.--In carrying out the evaluation under
subsection (a), the Secretary shall--
(A) consider opportunities for domestic production
of oil and gas through--
(i) the exchange of the nonproducing leases
for oil and gas lease tracts of comparable
value in the State; and
(ii) the issuance of bidding, royalty, or
rental credits for Federal oil and gas leases
in the State in exchange for the cancellation
of the nonproducing leases;
(B) consider any other appropriate means to
exchange, or provide compensation for the cancellation
of, nonproducing leases, subject to the consent of the
eligible lessees;
(C) consider the views of any interested persons,
including the State;
(D) determine the level of interest of the eligible
lessees in exchanging the nonproducing leases;
(E) assess the economic impact on the lessees and
the State of lease exchange, lease cancellation, and
final judicial or administrative decisions related to
the nonproducing leases; and
(F) provide recommendations on--
(i) whether to pursue an exchange of the
nonproducing leases;
(ii) any changes in laws (including
regulations) that are necessary for the
Secretary to carry out the exchange; and
(iii) any other appropriate means to
exchange or provide compensation for the
cancellation of a nonproducing lease, subject
to the consent of the eligible lessee.
(c) Valuation of Nonproducing Leases.--For the purpose of the
evaluation under subsection (a), the value of a nonproducing lease
shall be an amount equal to the difference between--
(1) the sum of--
(A) the amount paid by the eligible lessee for the
nonproducing lease;
(B) any direct expenditures made by the eligible
lessee before the transmittal of the report in
subsection (c) associated with the exploration and
development of the nonproducing lease; and
(C) interest on any amounts under subparagraphs (A)
and (B) during the period beginning on the date on
which the amount was paid and ending on the date on
which credits are issued under subsection
(b)(2)(A)(ii); and
(2) the sum of the revenues from the nonproducing lease.
(d) Report to Congress.--Not later than 2 years after the date of
the enactment of this Act, the Secretary shall initiate the evaluation
in subsection (b) and transmit to Congress a report on the evaluation.

SEC. 358. FEDERAL COALBED METHANE REGULATION.

Any State currently on the list of Affected States established
under section 1339(b) of the Energy Policy Act of 1992 (42 U.S.C.
13368(b)) shall be removed from the list if, not later than 3 years
after the date of enactment of this Act, the State takes, or prior to
the date of enactment has taken, any of the actions required for
removal from the list under such section 1339(b).

SEC. 359. LIVINGSTON PARISH MINERAL RIGHTS TRANSFER.

(a) Amendments.--Section 102 of Public Law 102-562 (106 Stat. 4234)
is amended--
(1) by striking ``(a) In General.--'';
(2) by striking ``and subject to the reservation in
subsection (b),''; and
(3) by striking subsection (b).
(b) Implementation of Amendment.--The Secretary of the Interior
shall execute the legal instruments necessary to effectuate the
amendment made by subsection (a)(3).

Subtitle D--Alaska Natural Gas Pipeline

SEC. 371. SHORT TITLE.

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

SEC. 372. DEFINITIONS.

In this subtitle:
(1) Alaska natural gas.--The term ``Alaska natural gas''
means natural gas derived from the area of the State of Alaska
lying north of 64 degrees north latitude.
(2) Alaska natural gas transportation project.--The term
``Alaska natural gas transportation project'' means any natural
gas pipeline system that carries Alaska natural gas to the
border between Alaska and Canada (including related facilities
subject to the jurisdiction of the Commission) that is
authorized under--
(A) the Alaska Natural Gas Transportation Act of
1976 (15 U.S.C. 719 et seq.); or
(B) section 373.
(3) Alaska natural gas transportation system.--The term
``Alaska natural gas transportation system'' means the Alaska
natural gas transportation project authorized under the Alaska
Natural Gas Transportation Act of 1976 (15 U.S.C. 719 et seq.)
and designated and described in section 2 of the President's
decision.
(4) Commission.--The term ``Commission'' means the Federal
Energy Regulatory Commission.
(5) Federal coordinator.--The term ``Federal Coordinator''
means the head of the Office of the Federal Coordinator for
Alaska Natural Gas Transportation Projects established by
section 376(a).
(6) President's decision.--The term ``President's
decision'' means the decision and report to Congress on the
Alaska natural gas transportation system--
(A) issued by the President on September 22, 1977,
in accordance with section 7 of the Alaska Natural Gas
Transportation Act of 1976 (15 U.S.C. 719e); and
(B) approved by Public Law 95-158 (15 U.S.C. 719f
note; 91 Stat. 1268).
(7) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(8) State.--The term ``State'' means the State of Alaska.

SEC. 373. ISSUANCE OF CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY.

(a) Authority of the Commission.--Notwithstanding the Alaska
Natural Gas Transportation Act of 1976 (15 U.S.C. 719 et seq.), the
Commission may, in accordance with section 7(c) of the Natural Gas Act
(15 U.S.C. 717f(c)), consider and act on an application for the
issuance of a certificate of public convenience and necessity
authorizing the construction and operation of an Alaska natural gas
transportation project other than the Alaska natural gas transportation
system.
(b) Issuance of Certificate.--
(1) In general.--The Commission shall issue a certificate
of public convenience and necessity authorizing the
construction and operation of an Alaska natural gas
transportation project under this section if the applicant has
satisfied the requirements of section 7(e) of the Natural Gas
Act (15 U.S.C. 717f(e)).
(2) Considerations.--In considering an application under
this section, the Commission shall presume that--
(A) a public need exists to construct and operate
the proposed Alaska natural gas transportation project;
and
(B) sufficient downstream capacity will exist to
transport the Alaska natural gas moving through the
project to markets in the contiguous United States.
(c) Expedited Approval Process.--Not later than 60 days after the
date of issuance of the final environmental impact statement under
section 374 for an Alaska natural gas transportation project, the
Commission shall issue a final order granting or denying any
application for a certificate of public convenience and necessity for
the project under section 7(c) of the Natural Gas Act (15 U.S.C.
717f(c)) and this section.
(d) Prohibition of Certain Pipeline Route.--No license, permit,
lease, right-of-way, authorization, or other approval required under
Federal law for the construction of any pipeline to transport natural
gas from land within the Prudhoe Bay oil and gas lease area may be
granted for any pipeline that follows a route that--
(1) traverses land beneath navigable waters (as defined in
section 2 of the Submerged Lands Act (43 U.S.C. 1301)) beneath,
or the adjacent shoreline of, the Beaufort Sea; and
(2) enters Canada at any point north of 68 degrees north
latitude.
(e) Open Season.--
(1) In general.--Not later than 120 days after the date of
enactment of this Act, the Commission shall issue regulations
governing the conduct of open seasons for Alaska natural gas
transportation projects (including procedures for the
allocation of capacity).
(2) Regulations.--The regulations referred to in paragraph
(1) shall--
(A) include the criteria for and timing of any open
seasons;
(B) promote competition in the exploration,
development, and production of Alaska natural gas; and
(C) for any open season for capacity exceeding the
initial capacity, provide the opportunity for the
transportation of natural gas other than from the
Prudhoe Bay and Point Thomson units.
(3) Applicability.--Except in a case in which an expansion
is ordered in accordance with section 375, initial or expansion
capacity on any Alaska natural gas transportation project shall
be allocated in accordance with procedures to be established by
the Commission in regulations issued under paragraph (1).
(f) Projects in the Contiguous United States.--
(1) In general.--An application for additional or expanded
pipeline facilities that may be required to transport Alaska
natural gas from Canada to markets in the contiguous United
States may be made in accordance with the Natural Gas Act (15
U.S.C. 717a et seq.).
(2) Expansion.--To the extent that a pipeline facility
described in paragraph (1) includes the expansion of any
facility constructed in accordance with the Alaska Natural Gas
Transportation Act of 1976 (15 U.S.C. 719 et seq.), that Act
shall continue to apply.
(g) Study of In-State Needs.--The holder of the certificate of
public convenience and necessity issued, modified, or amended by the
Commission for an Alaska natural gas transportation project shall
demonstrate that the holder has conducted a study of Alaska in-State
needs, including tie-in points along the Alaska natural gas
transportation project for in-State access.
(h) Alaska Royalty Gas.--
(1) In general.--Except as provided in paragraph (2), the
Commission, on a request by the State and after a hearing, may
provide for reasonable access to the Alaska natural gas
transportation project by the State (or State designee) for the
transportation of royalty gas of the State for the purpose of
meeting local consumption needs within the State.
(2) Exception.--The rates of shippers of subscribed
capacity on an Alaska natural gas transportation project
described in paragraph (1), as in effect as of the date on
which access under that paragraph is granted, shall not be
increased as a result of such access.
(i) Regulations.--The Commission may issue such regulations as are
necessary to carry out this section.

SEC. 374. ENVIRONMENTAL REVIEWS.

(a) Compliance With NEPA.--The issuance of a certificate of public
convenience and necessity authorizing the construction and operation of
any Alaska natural gas transportation project under section 373 shall
be treated as a major Federal action significantly affecting the
quality of the human environment within the meaning of section
102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C.
4332(2)(C)).
(b) Designation of Lead Agency.--
(1) In general.--The Commission--
(A) shall be the lead agency for purposes of
complying with the National Environmental Policy Act of
1969 (42 U.S.C. 4321 et seq.); and
(B) shall be responsible for preparing the
environmental impact statement required by section
102(2)(c) of that Act (42 U.S.C. 4332(2)(c)) with
respect to an Alaska natural gas transportation project
under section 373.
(2) Consolidation of statements.--In carrying out paragraph
(1), the Commission shall prepare a single environmental impact
statement, which shall consolidate the environmental reviews of
all Federal agencies considering any aspect of the Alaska
natural gas transportation project covered by the environmental
impact statement.
(c) Other Agencies.--
(1) In general.--Each Federal agency considering an aspect
of the construction and operation of an Alaska natural gas
transportation project under section 373 shall--
(A) cooperate with the Commission; and
(B) comply with deadlines established by the
Commission in the preparation of the environmental
impact statement under this section.
(2) Satisfaction of nepa requirements.--The environmental
impact statement prepared under this section shall be adopted
by each Federal agency described in paragraph (1) in
satisfaction of the responsibilities of the Federal agency
under section 102(2)(C) of the National Environmental Policy
Act of 1969 (42 U.S.C. 4332(2)(C)) with respect to the Alaska
natural gas transportation project covered by the environmental
impact statement.
(d) Expedited Process.--The Commission shall--
(1) not later than 1 year after the Commission determines
that the application under section 373 with respect to an
Alaska natural gas transportation project is complete, issue a
draft environmental impact statement under this section; and
(2) not later than 180 days after the date of issuance of
the draft environmental impact statement, issue a final
environmental impact statement, unless the Commission for good
cause determines that additional time is needed.

SEC. 375. PIPELINE EXPANSION.

(a) Authority.--With respect to any Alaska natural gas
transportation project, on a request by 1 or more persons and after
giving notice and an opportunity for a hearing, the Commission may
order the expansion of the Alaska natural gas project if the Commission
determines that such an expansion is required by the present and future
public convenience and necessity.
(b) Responsibilities of Commission.--Before ordering an expansion
under subsection (a), the Commission shall--
(1) approve or establish rates for the expansion service
that are designed to ensure the recovery, on an incremental or
rolled-in basis, of the cost associated with the expansion
(including a reasonable rate of return on investment);
(2) ensure that the rates do not require existing shippers
on the Alaska natural gas transportation project to subsidize
expansion shippers;
(3) find that a proposed shipper will comply with, and the
proposed expansion and the expansion of service will be
undertaken and implemented based on, terms and conditions
consistent with the tariff of the Alaska natural gas
transportation project in effect as of the date of the
expansion;
(4) find that the proposed facilities will not adversely
affect the financial or economic viability of the Alaska
natural gas transportation project;
(5) find that the proposed facilities will not adversely
affect the overall operations of the Alaska natural gas
transportation project;
(6) find that the proposed facilities will not diminish the
contract rights of existing shippers to previously subscribed
certificated capacity;
(7) ensure that all necessary environmental reviews have
been completed; and
(8) find that adequate downstream facilities exist or are
expected to exist to deliver incremental Alaska natural gas to
market.
(c) Requirement for a Firm Transportation Agreement.--Any order of
the Commission issued in accordance with this section shall be void
unless the person requesting the order executes a firm transportation
agreement with the Alaska natural gas transportation project within
such reasonable period of time as the order may specify.
(d) Limitation.--Nothing in this section expands or otherwise
affects any authority of the Commission with respect to any natural gas
pipeline located outside the State.
(e) Regulations.--The Commission may issue such regulations as are
necessary to carry out this section.

SEC. 376. FEDERAL COORDINATOR.

(a) Establishment.--There is established, as an independent office
in the executive branch, the Office of the Federal Coordinator for
Alaska Natural Gas Transportation Projects.
(b) Federal Coordinator.--
(1) Appointment.--The Office shall be headed by a Federal
Coordinator for Alaska Natural Gas Transportation Projects, who
shall be appointed by the President, by and with the advice and
consent of the Senate, to serve a term to last until 1 year
following the completion of the project referred to in section
373.
(2) Compensation.--The Federal Coordinator shall be
compensated at the rate prescribed for level III of the
Executive Schedule (5 U.S.C. 5314).
(c) Duties.--The Federal Coordinator shall be responsible for--
(1) coordinating the expeditious discharge of all
activities by Federal agencies with respect to an Alaska
natural gas transportation project; and
(2) ensuring the compliance of Federal agencies with the
provisions of this subtitle.
(d) Reviews and Actions of Other Federal Agencies.--
(1) Expedited reviews and actions.--All reviews conducted
and actions taken by any Federal agency relating to an Alaska
natural gas transportation project authorized under this
section shall be expedited, in a manner consistent with
completion of the necessary reviews and approvals by the
deadlines under this subtitle.
(2) Prohibition of certain terms and conditions.--No
Federal agency may include in any certificate, right-of-way,
permit, lease, or other authorization issued to an Alaska
natural gas transportation project any term or condition that
may be permitted, but is not required, by any applicable law if
the Federal Coordinator determines that the term or condition
would prevent or impair in any significant respect the
expeditious construction and operation, or an expansion, of the
Alaska natural gas transportation project.
(3) Prohibition of certain actions.--Unless required by
law, no Federal agency shall add to, amend, or abrogate any
certificate, right-of-way, permit, lease, or other
authorization issued to an Alaska natural gas transportation
project if the Federal Coordinator determines that the action
would prevent or impair in any significant respect the
expeditious construction and operation, or an expansion, of the
Alaska natural gas transportation project.
(4) Limitation.--The Federal Coordinator shall not have
authority to--
(A) override--
(i) the implementation or enforcement of
regulations issued by the Commission under
section 373; or
(ii) an order by the Commission to expand
the project under section 375; or
(B) impose any terms, conditions, or requirements
in addition to those imposed by the Commission or any
agency with respect to construction and operation, or
an expansion of, the project.
(e) State Coordination.--
(1) In general.--The Federal Coordinator and the State
shall enter into a joint surveillance and monitoring agreement
similar to the agreement in effect during construction of the
Trans-Alaska Pipeline, to be approved by the President and the
Governor of the State, for the purpose of monitoring the
construction of the Alaska natural gas transportation project.
(2) Primary responsibility.--With respect to an Alaska
natural gas transportation project--
(A) the Federal Government shall have primary
surveillance and monitoring responsibility in areas
where the Alaska natural gas transportation project
crosses Federal land or private land; and
(B) the State government shall have primary
surveillance and monitoring responsibility in areas
where the Alaska natural gas transportation project
crosses State land.
(f) Transfer of Federal Inspector Functions and Authority.--On
appointment of the Federal Coordinator by the President, all of the
functions and authority of the Office of Federal Inspector of
Construction for the Alaska Natural Gas Transportation System vested in
the Secretary under section 3012(b) of the Energy Policy Act of 1992
(15 U.S.C. 719e note; Public Law 102-486), including all functions and
authority described and enumerated in the Reorganization Plan No. 1 of
1979 (44 Fed. Reg. 33663), Executive Order No. 12142 of June 21, 1979
(44 Fed. Reg. 36927), and section 5 of the President's decision, shall
be transferred to the Federal Coordinator.
(g) Temporary Authority.--The functions, authorities, duties, and
responsibilities of the Federal Coordinator shall be vested in the
Secretary until the later of the appointment of the Federal Coordinator
by the President, or 18 months after the date of enactment of this Act.

SEC. 377. JUDICIAL REVIEW.

(a) Exclusive Jurisdiction.--Except for review by the Supreme Court
on writ of certiorari, the United States Court of Appeals for the
District of Columbia Circuit shall have original and exclusive
jurisdiction to determine--
(1) the validity of any final order or action (including a
failure to act) of any Federal agency or officer under this
subtitle;
(2) the constitutionality of any provision of this
subtitle, or any decision made or action taken under this
subtitle; or
(3) the adequacy of any environmental impact statement
prepared under the National Environmental Policy Act of 1969
(42 U.S.C. 4321 et seq.) with respect to any action under this
subtitle.
(b) Deadline for Filing Claim.--A claim arising under this subtitle
may be brought not later than 60 days after the date of the decision or
action giving rise to the claim.
(c) Expedited Consideration.--The United States Court of Appeals
for the District of Columbia Circuit shall set any action brought under
subsection (a) for expedited consideration, taking into account the
national interest of enhancing national energy security by providing
access to the significant gas reserves in Alaska needed to meet the
anticipated demand for natural gas.
(d) Amendment of the Alaska Natural Gas Transportation Act of
1976.--Section 10(c) of the Alaska Natural Gas Transportation Act of
1976 (15 U.S.C. 719h) is amended--
(1) by striking ``(c)(1) A claim'' and inserting the
following:
``(c) Jurisdiction.--
``(1) Special courts.--
``(A) In general.--A claim'';
(2) by striking ``Such court shall have'' and inserting the
following:
``(B) Exclusive jurisdiction.--The Special Court
shall have'';
(3) by inserting after paragraph (1) the following:
``(2) Expedited consideration.--The Special Court shall set
any action brought under this section for expedited
consideration, taking into account the national interest
described in section 2.''; and
(4) in paragraph (3), by striking ``(3) The enactment'' and
inserting the following:
``(3) Environmental impact statements.--The enactment''.

SEC. 378. STATE JURISDICTION OVER IN-STATE DELIVERY OF NATURAL GAS.

(a) Local Distribution.--Any facility receiving natural gas from an
Alaska natural gas transportation project for delivery to consumers
within the State--
(1) shall be deemed to be a local distribution facility
within the meaning of section 1(b) of the Natural Gas Act (15
U.S.C. 717(b)); and
(2) shall not be subject to the jurisdiction of the
Commission.
(b) Additional Pipelines.--Except as provided in section 373(d),
nothing in this subtitle shall preclude or otherwise affect a future
natural gas pipeline that may be constructed to deliver natural gas to
Fairbanks, Anchorage, Matanuska-Susitna Valley, or the Kenai peninsula
or Valdez or any other site in the State for consumption within or
distribution outside the State.
(c) Rate Coordination.--
(1) In general.--In accordance with the Natural Gas Act (15
U.S.C. 717a et seq.), the Commission shall establish rates for
the transportation of natural gas on any Alaska natural gas
transportation project.
(2) Consultation.--In carrying out paragraph (1), the
Commission, in accordance with section 17(b) of the Natural Gas
Act (15 U.S.C. 717p(b)), shall consult with the State regarding
rates (including rate settlements) applicable to natural gas
transported on and delivered from the Alaska natural gas
transportation project for use within the State.

SEC. 379. STUDY OF ALTERNATIVE MEANS OF CONSTRUCTION.

(a) Requirement of Study.--If no application for the issuance of a
certificate or amended certificate of public convenience and necessity
authorizing the construction and operation of an Alaska natural gas
transportation project has been filed with the Commission by the date
that is 18 months after the date of enactment of this Act, the
Secretary shall conduct a study of alternative approaches to the
construction and operation of such an Alaska natural gas transportation
project.
(b) Scope of Study.--The study under subsection (a) shall take into
consideration the feasibility of--
(1) establishing a Federal Government corporation to
construct an Alaska natural gas transportation project; and
(2) securing alternative means of providing Federal
financing and ownership (including alternative combinations of
Government and private corporate ownership) of the Alaska
natural gas transportation project.
(c) Consultation.--In conducting the study under subsection (a),
the Secretary shall consult with the Secretary of the Treasury and the
Secretary of the Army (acting through the Chief of Engineers).
(d) Report.--On completion of any study under subsection (a), the
Secretary shall submit to Congress a report that describes--
(1) the results of the study; and
(2) any recommendations of the Secretary (including
proposals for legislation to implement the recommendations).

SEC. 380. CLARIFICATION OF ANGTA STATUS AND AUTHORITIES.

(a) Savings Clause.--Nothing in this subtitle affects--
(1) any decision, certificate, permit, right-of-way, lease,
or other authorization issued under section 9 of the Alaska
Natural Gas Transportation Act of 1976 (15 U.S.C. 719g); or
(2) any Presidential finding or waiver issued in accordance
with that Act.
(b) Clarification of Authority to Amend Terms and Conditions to
Meet Current Project Requirements.--Any Federal agency responsible for
granting or issuing any certificate, permit, right-of-way, lease, or
other authorization under section 9 of the Alaska Natural Gas
Transportation Act of 1976 (15 U.S.C. 719g) may add to, amend, or
rescind any term or condition included in the certificate, permit,
right-of-way, lease, or other authorization to meet current project
requirements (including the physical design, facilities, and tariff
specifications), if the addition, amendment, or rescission--
(1) would not compel any change in the basic nature and
general route of the Alaska natural gas transportation system
as designated and described in section 2 of the President's
decision; or
(2) would not otherwise prevent or impair in any
significant respect the expeditious construction and initial
operation of the Alaska natural gas transportation system.
(c) Updated Environmental Reviews.--The Secretary shall require the
sponsor of the Alaska natural gas transportation system to submit such
updated environmental data, reports, permits, and impact analyses as
the Secretary determines are necessary to develop detailed terms,
conditions, and compliance plans required by section 5 of the
President's decision.

SEC. 381. SENSE OF CONGRESS CONCERNING USE OF STEEL MANUFACTURED IN
NORTH AMERICA NEGOTIATION OF A PROJECT LABOR AGREEMENT.

It is the sense of Congress that--
(1) an Alaska natural gas transportation project would
provide significant economic benefits to the United States and
Canada; and
(2) to maximize those benefits, the sponsors of the Alaska
natural gas transportation project should make every effort
to--
(A) use steel that is manufactured in North
America; and
(B) negotiate a project labor agreement to expedite
construction of the pipeline.

SEC. 382. SENSE OF CONGRESS AND STUDY CONCERNING PARTICIPATION BY SMALL
BUSINESS CONCERNS.

(a) Definition of Small Business Concern.--In this section, the
term ``small business concern'' has the meaning given the term in
section 3(a) of the Small Business Act (15 U.S.C. 632(a)).
(b) Sense of Congress.--It is the sense of Congress that--
(1) an Alaska natural gas transportation project would
provide significant economic benefits to the United States and
Canada; and
(2) to maximize those benefits, the sponsors of the Alaska
natural gas transportation project should maximize the
participation of small business concerns in contracts and
subcontracts awarded in carrying out the project.
(c) Study.--
(1) In general.--The Comptroller General of the United
States shall conduct a study to determine the extent to which
small business concerns participate in the construction of oil
and gas pipelines in the United States.
(2) Report.--Not later that 1 year after the date of
enactment of this Act, the Comptroller General shall submit to
Congress a report that describes results of the study under
paragraph (1).
(3) Updates.--The Comptroller General shall--
(A) update the study at least once every 5 years
until construction of an Alaska natural gas
transportation project is completed; and
(B) on completion of each update, submit to
Congress a report containing the results of the update.

SEC. 383. ALASKA PIPELINE CONSTRUCTION TRAINING PROGRAM.

(a) Program.--
(1) Establishment.--The Secretary of Labor (in this section
referred to as the ``Secretary'') shall make grants to the
Alaska Workforce Investment Board--
(A) to recruit and train adult and dislocated
workers in Alaska, including Alaska Natives, in the
skills required to construct and operate an Alaska gas
pipeline system; and
(B) for the design and construction of a training
facility to be located in Fairbanks, Alaska, to support
an Alaska gas pipeline training program.
(2) Coordination with existing programs.--The training
program established with the grants authorized under paragraph
(1) shall be consistent with the vision and goals set forth in
the State of Alaska Unified Plan, as developed pursuant to the
Workforce Investment Act of 1998 (29 U.S.C. 2801 et seq.).
(b) Requirements for Grants.--The Secretary shall make a grant
under subsection (a) only if--
(1) the Governor of the State of Alaska requests the grant
funds and certifies in writing to the Secretary that there is a
reasonable expectation that the construction of the Alaska
natural gas pipeline system will commence by the date that is 2
years after the date of the certification; and
(2) the Secretary of Energy concurs in writing to the
Secretary with the certification made under paragraph (1) after
considering--
(A) the status of necessary Federal and State
permits;
(B) the availability of financing for the Alaska
natural gas pipeline project; and
(C) other relevant factors.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section $20,000,000.
Not more than 15 percent of the funds may be used for the facility
described in subsection (a)(1)(B).

SEC. 384. SENSE OF CONGRESS CONCERNING NATURAL GAS DEMAND.

It is the sense of Congress that--
(1) North American demand for natural gas will increase
dramatically over the course of the next several decades;
(2) both the Alaska Natural Gas Pipeline and the Mackenzie
Delta Natural Gas project in Canada will be necessary to help
meet the increased demand for natural gas in North America;
(3) Federal and State officials should work together with
officials in Canada to ensure both projects can move forward in
a mutually beneficial fashion;
(4) Federal and State officials should acknowledge that the
smaller scope, fewer permitting requirements, and lower cost of
the Mackenzie Delta project means it will most likely be
completed before the Alaska Natural Gas Pipeline;
(5) natural gas production in the 48 contiguous States and
Canada will not be able to meet all domestic demand in the
coming decades; and
(6) as a result, natural gas delivered from Alaskan North
Slope will not displace or reduce the commercial viability of
Canadian natural gas produced from the Mackenzie Delta or
production from the 48 contiguous States.

SEC. 385. SENSE OF CONGRESS CONCERNING ALASKAN OWNERSHIP.

It is the sense of Congress that--
(1) Alaska Native Regional Corporations, companies owned
and operated by Alaskans, and individual Alaskans should have
the opportunity to own shares of the Alaska natural gas
pipeline in a way that promotes economic development for the
State; and
(2) to facilitate economic development in the State, all
project sponsors should negotiate in good faith with any
willing Alaskan person that desires to be involved in the
project.

SEC. 386. LOAN GUARANTEES.

(a) Authority.--(1) The Secretary may enter into agreements with 1
or more holders of a certificate of public convenience and necessity
issued under section 373(b) of this Act or section 9 of the Alaska
Natural Gas Transportation Act of 1976 (15 U.S.C. 719g) to issue
Federal guarantee instruments with respect to loans and other debt
obligations for a qualified infrastructure project.
(2) Subject to the requirements of this section, the Secretary may
also enter into agreements with 1 or more owners of the Canadian
portion of a qualified infrastructure project to issue Federal
guarantee instruments with respect to loans and other debt obligations
for a qualified infrastructure project as though such owner were a
holder described in paragraph (1).
(3) The authority of the Secretary to issue Federal guarantee
instruments under this section for a qualified infrastructure project
shall expire on the date that is 2 years after the date on which the
final certificate of public convenience and necessity (including any
Canadian certificates of public convenience and necessity) is issued
for the project. A final certificate shall be considered to have been
issued when all certificates of public convenience and necessity have
been issued that are required for the initial transportation of
commercially economic quantities of natural gas from Alaska to the
continental United States.
(b) Conditions.--(1) The Secretary may issue a Federal guarantee
instrument for a qualified infrastructure project only after a
certificate of public convenience and necessity under section 373(b) of
this Act or an amended certificate under section 9 of the Alaska
Natural Gas Transportation Act of 1976 (15 U.S.C. 719g) has been issued
for the project.
(2) The Secretary may issue a Federal guarantee instrument under
this section for a qualified infrastructure project only if the loan or
other debt obligation guaranteed by the instrument has been issued by
an eligible lender.
(3) The Secretary shall not require as a condition of issuing a
Federal guarantee instrument under this section any contractual
commitment or other form of credit support of the sponsors (other than
equity contribution commitments and completion guarantees), or any
throughput or other guarantee from prospective shippers greater than
such guarantees as shall be required by the project owners.
(c) Limitations on Amounts.--(1) The amount of loans and other debt
obligations guaranteed under this section for a qualified
infrastructure project shall not exceed 80 percent of the total capital
costs of the project, including interest during construction.
(2) The principal amount of loans and other debt obligations
guaranteed under this section shall not exceed, in the aggregate,
$18,000,000,000, which amount shall be indexed for United States dollar
inflation from the date of enactment of this Act, as measured by the
Consumer Price Index.
(d) Loan Terms and Fees.--(1) The Secretary may issue Federal
guarantee instruments under this section that take into account
repayment profiles and grace periods justified by project cash flows
and project-specific considerations. The term of any loan guaranteed
under this section shall not exceed 30 years.
(2) An eligible lender may assess and collect from the borrower
such other fees and costs associated with the application and
origination of the loan or other debt obligation as are reasonable and
customary for a project finance transaction in the oil and gas sector.
(e) Regulations.--The Secretary may issue regulations to carry out
this section.
(f) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to cover the cost of loan
guarantees under this section, as defined by section 502(5) of the
Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)). Such sums shall
remain available until expended.
(g) Definitions.--In this section, the following definitions apply:
(1) The term ``Consumer Price Index'' means the Consumer
Price Index for all-urban consumers, United States city
average, as published by the Bureau of Labor Statistics, or if
such index shall cease to be published, any successor index or
reasonable substitute thereof.
(2) The term ``eligible lender'' means any non-Federal
qualified institutional buyer (as defined by section
230.144A(a) of title 17, Code of Federal Regulations (or any
successor regulation), known as Rule 144A(a) of the Securities
and Exchange Commission and issued under the Securities Act of
1933), including--
(A) a qualified retirement plan (as defined in
section 4974(c) of the Internal Revenue Code of 1986
(26 U.S.C. 4974(c)) that is a qualified institutional
buyer; and
(B) a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986 (26 U.S.C.
414(d)) that is a qualified institutional buyer.
(3) The term ``Federal guarantee instrument'' means any
guarantee or other pledge by the Secretary to pledge the full
faith and credit of the United States to pay all of the
principal and interest on any loan or other debt obligation
entered into by a holder of a certificate of public convenience
and necessity.
(4) The term ``qualified infrastructure project'' means an
Alaskan natural gas transportation project consisting of the
design, engineering, finance, construction, and completion of
pipelines and related transportation and production systems
(including gas treatment plants), and appurtenances thereto,
that are used to transport natural gas from the Alaska North
Slope to the continental United States.

TITLE IV--COAL

Subtitle A--Clean Coal Power Initiative

SEC. 401. AUTHORIZATION OF APPROPRIATIONS.

(a) Clean Coal Power Initiative.--There are authorized to be
appropriated to the Secretary of Energy (referred to in this title as
the ``Secretary'') to carry out the activities authorized by this
subtitle $200,000,000 for each of fiscal years 2004 through 2012, to
remain available until expended.
(b) Report.--The Secretary shall submit to Congress the report
required by this subsection not later than March 31, 2005. The report
shall include, with respect to subsection (a), a 10-year plan
containing--
(1) a detailed assessment of whether the aggregate funding
levels provided under subsection (a) are the appropriate
funding levels for that program;
(2) a detailed description of how proposals will be
solicited and evaluated, including a list of all activities
expected to be undertaken;
(3) a detailed list of technical milestones for each coal
and related technology that will be pursued; and
(4) a detailed description of how the program will avoid
problems enumerated in General Accounting Office reports on the
Clean Coal Technology Program, including problems that have
resulted in unspent funds and projects that failed either
financially or scientifically.

SEC. 402. PROJECT CRITERIA.

(a) In General.--The Secretary shall not provide funding under this
subtitle for any project that does not advance efficiency,
environmental performance, and cost competitiveness well beyond the
level of technologies that are in commercial service or have been
demonstrated on a scale that the Secretary determines is sufficient to
demonstrate that commercial service is viable as of the date of
enactment of this Act.
(b) Technical Criteria for Clean Coal Power Initiative.--
(1) Gasification projects.--
(A) In general.--In allocating the funds made
available under section 401(a), the Secretary shall
ensure that at least 60 percent of the funds are used
only for projects on coal-based gasification
technologies, including gasification combined cycle,
gasification fuel cells, gasification coproduction, and
hybrid gasification/combustion.
(B) Technical milestones.--The Secretary shall
periodically set technical milestones specifying the
emission and thermal efficiency levels that coal
gasification projects under this subtitle shall be
designed, and reasonably expected, to achieve. The
technical milestones shall become more restrictive
during the life of the program. The Secretary shall set
the periodic milestones so as to achieve by 2020 coal
gasification projects able--
(i) to remove 99 percent of sulfur dioxide;
(ii) to emit not more than .05 lbs of
NO<INF>x</INF> per million Btu;
(iii) to achieve substantial reductions in
mercury emissions; and
(iv) to achieve a thermal efficiency of--
(I) 60 percent for coal of more
than 9,000 Btu;
(II) 59 percent for coal of 7,000
to 9,000 Btu; and
(III) 50 percent for coal of less
than 7,000 Btu.
(2) Other projects.--The Secretary shall periodically set
technical milestones and ensure that up to 40 percent of the
funds appropriated pursuant to section 401(a) are used for
projects not described in paragraph (1). The milestones shall
specify the emission and thermal efficiency levels that
projects funded under this paragraph shall be designed to and
reasonably expected to achieve. The technical milestones shall
become more restrictive during the life of the program. The
Secretary shall set the periodic milestones so as to achieve by
2010 projects able--
(A) to remove 97 percent of sulfur dioxide;
(B) to emit no more than .08 lbs of NO<INF>x</INF>
per million Btu;
(C) to achieve substantial reductions in mercury
emissions; and
(D) to achieve a thermal efficiency of--
(i) 45 percent for coal of more than 9,000
Btu;
(ii) 44 percent for coal of 7,000 to 9,000
Btu; and
(iii) 40 percent for coal of less than
7,000 Btu.
(3) Consultation.--Before setting the technical milestones
under paragraphs (1)(B) and (2), the Secretary shall consult
with the Administrator of the Environmental Protection Agency
and interested entities, including coal producers, industries
using coal, organizations to promote coal or advanced coal
technologies, environmental organizations, and organizations
representing workers.
(4) Existing units.--In the case of projects at units in
existence on the date of enactment of this Act, in lieu of the
thermal efficiency requirements set forth in paragraph
(1)(B)(iv) and (2)(D), the milestones shall be designed to
achieve an overall thermal design efficiency improvement,
compared to the efficiency of the unit as operated, of not less
than--
(A) 7 percent for coal of more than 9,000 Btu;
(B) 6 percent for coal of 7,000 to 9,000 Btu; or
(C) 4 percent for coal of less than 7,000 Btu.
(5) Permitted uses.--In carrying out this subtitle, the
Secretary may fund projects that include, as part of the
project, the separation and capture of carbon dioxide.
(c) Financial Criteria.--The Secretary shall not provide a funding
award under this subtitle unless the recipient documents to the
satisfaction of the Secretary that--
(1) the award recipient is financially viable without the
receipt of additional Federal funding;
(2) the recipient will provide sufficient information to
the Secretary to enable the Secretary to ensure that the award
funds are spent efficiently and effectively; and
(3) a market exists for the technology being demonstrated
or applied, as evidenced by statements of interest in writing
from potential purchasers of the technology.
(d) Financial Assistance.--The Secretary shall provide financial
assistance to projects that meet the requirements of subsections (a),
(b), and (c) and are likely to--
(1) achieve overall cost reductions in the utilization of
coal to generate useful forms of energy;
(2) improve the competitiveness of coal among various forms
of energy in order to maintain a diversity of fuel choices in
the United States to meet electricity generation requirements;
and
(3) demonstrate methods and equipment that are applicable
to 25 percent of the electricity generating facilities, using
various types of coal, that use coal as the primary feedstock
as of the date of enactment of this Act.
(e) Federal Share.--The Federal share of the cost of a coal or
related technology project funded by the Secretary under this subtitle
shall not exceed 50 percent.
(f) Applicability.--No technology, or level of emission reduction,
shall be treated as adequately demonstrated for purposes of section 111
of the Clean Air Act (42 U.S.C. 7411), achievable for purposes of
section 169 of that Act (42 U.S.C. 7479), or achievable in practice for
purposes of section 171 of that Act (42 U.S.C. 7501) solely by reason
of the use of such technology, or the achievement of such emission
reduction, by 1 or more facilities receiving assistance under this
subtitle.

SEC. 403. REPORT.

Not later than 1 year after the date of enactment of this Act, and
once every 2 years thereafter through 2012, the Secretary, in
consultation with other appropriate Federal agencies, shall submit to
Congress a report describing--
(1) the technical milestones set forth in section 402 and
how those milestones ensure progress toward meeting the
requirements of subsections (b)(1)(B) and (b)(2) of section
402; and
(2) the status of projects funded under this subtitle.

SEC. 404. CLEAN COAL CENTERS OF EXCELLENCE.

As part of the program authorized in section 401, the Secretary
shall award competitive, merit-based grants to universities for the
establishment of Centers of Excellence for Energy Systems of the
Future. The Secretary shall provide grants to universities that show
the greatest potential for advancing new clean coal technologies.

Subtitle B--Clean Power Projects

SEC. 411. COAL TECHNOLOGY LOAN.

There are authorized to be appropriated to the Secretary
$125,000,000 to provide a loan to the owner of the experimental plant
constructed under United States Department of Energy cooperative
agreement number DE-FC-22-91PC90544 on such terms and conditions as the
Secretary determines, including interest rates and upfront payments.

SEC. 412. COAL GASIFICATION.

The Secretary is authorized to provide loan guarantees for a
project to produce energy from a plant using integrated gasification
combined cycle technology of at least 400 megawatts in capacity that
produces power at competitive rates in deregulated energy generation
markets and that does not receive any subsidy (direct or indirect) from
ratepayers.

SEC. 413. INTEGRATED GASIFICATION COMBINED CYCLE TECHNOLOGY.

The Secretary is authorized to provide loan guarantees for a
project to produce energy from a plant using integrated gasification
combined cycle technology located in a taconite-producing region of the
United States that is entitled under the law of the State in which the
plant is located to enter into a long-term contract approved by a State
Public Utility Commission to sell at least 450 megawatts of output to a
utility.

SEC. 414. PETROLEUM COKE GASIFICATION.

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

SEC. 415. INTEGRATED COAL/RENEWABLE ENERGY SYSTEM.

The Secretary is authorized, subject to the availability of
appropriations, to provide loan guarantees for a project to produce
energy from coal of less than 7000 btu/lb using appropriate advanced
integrated gasification combined cycle technology, including repowering
of existing facilities, that is combined with wind and other renewable
sources, minimizes and offers the potential to sequester carbon dioxide
emissions, and provides a ready source of hydrogen for near-site fuel
cell demonstrations. The facility may be built in stages, combined
output shall be at least 200 megawatts at successively more competitive
rates, and the facility shall be located in the Upper Great Plains.
Section 402(b) technical criteria apply, and the Federal cost share
shall not exceed 50 percent. The loan guarantees provided under this
section do not preclude the facility from receiving an allocation for
investment tax credits under section 48A of the Internal Revenue Code
of 1986. Utilizing this investment tax credit does not prohibit the use
of other Clean Coal Program funding.

SEC. 416. ELECTRON SCRUBBING DEMONSTRATION.

The Secretary shall use $5,000,000 from amounts appropriated to
initiate, through the Chicago Operations Office, a project to
demonstrate the viability of high-energy electron scrubbing technology
on commercial-scale electrical generation using high-sulfur coal.

Subtitle C--Federal Coal Leases

SEC. 421. REPEAL OF THE 160-ACRE LIMITATION FOR COAL LEASES.

Section 3 of the Mineral Leasing Act (30 U.S.C. 203) is amended--
(1) in the first sentence--
(A) by striking ``Any person'' and inserting ``(a)
Any person'';
(B) by inserting a comma after ``may''; and
(C) by striking ``upon'' and all that follows
through the period and inserting the following: ``upon
a finding by the Secretary that the lease--
``(1) would be in the interest of the United States;
``(2) would not displace a competitive interest in the
land; and
``(3) would not include land or deposits that can be
developed as part of another potential or existing operation;
secure modifications of the original coal lease by including additional
coal land or coal deposits contiguous or cornering to those embraced in
the lease, but in no event shall the total area added by any
modifications to an existing coal lease exceed 1280 acres, or add
acreage larger than the acreage in the original lease.'';
(2) in the second sentence, by striking ``The Secretary''
and inserting the following:
``(b) The Secretary''; and
(3) in the third sentence, by striking ``The minimum'' and
inserting the following:
``(c) The minimum''.

SEC. 422. MINING PLANS.

Section 2(d)(2) of the Mineral Leasing Act (30 U.S.C. 202a(2)) is
amended--
(1) by inserting ``(A)'' after ``(2)''; and
(2) by adding at the end the following:
``(B) The Secretary may establish a period of more than 40 years if
the Secretary determines that the longer period--
``(i) will ensure the maximum economic recovery of a coal
deposit; or
``(ii) the longer period is in the interest of the orderly,
efficient, or economic development of a coal resource.''.

SEC. 423. PAYMENT OF ADVANCE ROYALTIES UNDER COAL LEASES.

Section 7(b) of the Mineral Leasing Act (30 U.S.C. 207(b)) is
amended to read as follows:
``(b)(1) Each lease shall be subjected to the condition of diligent
development and continued operation of the mine or mines, except in a
case in which operations under the lease are interrupted by strikes,
the elements, or casualties not attributable to the lessee.
``(2)(A) The Secretary of the Interior may suspend the condition of
continued operation upon the payment of advance royalties, if the
Secretary determines that the public interest will be served by the
suspension.
``(B) Advance royalties required under subparagraph (A) shall be
computed based on--
``(i) the average price for coal sold in the spot market
from the same region during the last month of each applicable
continued operation year; or
``(ii) by using other methods established by the Secretary
of the Interior to capture the commercial value of coal,
and based on commercial quantities, as defined by regulation by the
Secretary of the Interior.
``(C) The aggregate number of years during the initial and any
extended term of any lease for which advance royalties may be accepted
in lieu of the condition of continued operation shall not exceed 20.
``(3) The amount of any production royalty paid for any year shall
be reduced (but not below 0) by the amount of any advance royalties
paid under the lease, to the extent that the advance royalties have not
been used to reduce production royalties for a prior year.
``(4) The Secretary may, upon 6 months' notice to a lessee, cease
to accept advance royalties in lieu of the requirement of continued
operation.
``(5) Nothing in this subsection affects the requirement contained
in the second sentence of subsection (a) relating to commencement of
production at the end of 10 years.''.

SEC. 424. ELIMINATION OF DEADLINE FOR SUBMISSION OF COAL LEASE
OPERATION AND RECLAMATION PLAN.

Section 7(c) of the Mineral Leasing Act (30 U.S.C. 207(c)) is
amended in the first sentence by striking ``and not later than three
years after a lease is issued,''.

SEC. 425. AMENDMENT RELATING TO FINANCIAL ASSURANCES WITH RESPECT TO
BONUS BIDS.

Section 2(a) of the Mineral Leasing Act (30 U.S.C. 201(a)) is
amended by adding at the end the following:
``(4)(A) The Secretary shall not require a surety bond or any other
financial assurance to guarantee payment of deferred bonus bid
installments with respect to any coal lease issued on a cash bonus bid
to a lessee or successor in interest having a history of a timely
payment of noncontested coal royalties and advanced coal royalties in
lieu of production (where applicable) and bonus bid installment
payments.
``(B) The Secretary may waive any requirement that a lessee provide
a surety bond or other financial assurance for a coal lease issued
before the date of the enactment of the Energy Policy Act of 2003 only
if the Secretary determines that the lessee has a history of making
timely payments referred to in subparagraph (A).
``(5) Notwithstanding any other provision of law, if the lessee
under a coal lease fails to pay any installment of a deferred cash
bonus bid within 10 days after the Secretary provides written notice
that payment of the installment is past due--
``(A) the lease shall automatically terminate; and
``(B) any bonus payments already made to the United States
with respect to the lease shall not be returned to the lessee
or credited in any future lease sale.''.

SEC. 426. INVENTORY REQUIREMENT.

(a) Review of Assessments.--
(1) In general.--The Secretary of the Interior, in
consultation with the Secretary of Agriculture and the
Secretary, shall review coal assessments and other available
data to identify--
(A) public lands, other than National Park lands,
with coal resources;
(B) the extent and nature of any restrictions or
impediments to the development of coal resources on
public lands identified under subparagraph (A); and
(C) with respect to areas of such lands for which
sufficient data exists, resources of compliant coal and
supercompliant coal.
(2) Definitions.--In this subsection:
(A) Compliant coal.--The term ``compliant coal''
means coal that contains not less than 1.0 and not more
than 1.2 pounds of sulfur dioxide per million Btu.
(B) Supercompliant coal.--The term ``supercompliant
coal'' means coal that contains less than 1.0 pounds of
sulfur dioxide per million Btu.
(b) Completion and Updating of the Inventory.--The Secretary of the
Interior--
(1) shall complete the inventory under subsection (a)(1) by
not later than 2 years after the date of the enactment of this
Act; and
(2) shall update the inventory as the availability of data
and developments in technology warrant.
(c) Report.--The Secretary of the Interior shall submit to
Congress, and make publicly available--
(1) a report containing the inventory under this section by
not later than 2 years after the effective date of this
section; and
(2) each update of that inventory.

SEC. 427. APPLICATION OF AMENDMENTS.

The amendments made by this subtitle apply--
(1) with respect to any coal lease issued on or after the
date of enactment of this Act; and
(2) with respect to any coal lease issued before the date
of enactment of this Act, upon the earlier of--
(A) the date of readjustment of the lease as
provided for by section 7(a) of the Mineral Leasing Act
(30 U.S.C. 207(a)); or
(B) the date the lessee requests such application.

Subtitle D--Coal and Related Programs

SEC. 441. CLEAN AIR COAL PROGRAM.

(a) Amendment.--The Energy Policy Act of 1992 is amended by adding
the following new title at the end thereof:

``TITLE XXXI--CLEAN AIR COAL PROGRAM

``SEC. 3101. FINDINGS; PURPOSES; DEFINITIONS.

``(a) Findings.--The Congress finds that--
``(1) new environmental regulations present additional
challenges for coal-fired electrical generation in the private
marketplace; and
``(2) the Department of Energy, in cooperation with
industry, has already fully developed and commercialized
several new clean-coal technologies that will allow the clean
use of coal.
``(b) Purposes.--The purposes of this title are to--
``(1) promote national energy policy and energy security,
diversity, and economic competitiveness benefits that result
from the increased use of coal;
``(2) mitigate financial risks, reduce the cost, and
increase the marketplace acceptance of the new clean coal
technologies; and
``(3) advance the deployment of pollution control equipment
to meet the current and future obligations of coal-fired
generation units regulated under the Clean Air Act (42 U.S.C.
7402 and following).

``SEC. 3102. AUTHORIZATION OF PROGRAM.

``The Secretary shall carry out a program to facilitate production
and generation of coal-based power and the installation of pollution
control equipment.

``SEC. 3103. AUTHORIZATION OF APPROPRIATIONS.

``(a) Pollution Control Projects.--There are authorized to be
appropriated to the Secretary $300,000,000 for fiscal year 2005,
$100,000,000 for fiscal year 2006, $40,000,000 for fiscal year 2007,
$30,000,000 for fiscal year 2008, and $30,000,000 for fiscal year 2009,
to remain available until expended, for carrying out the program for
pollution control projects, which may include--
``(1) pollution control equipment and processes for the
control of mercury air emissions;
``(2) pollution control equipment and processes for the
control of nitrogen dioxide air emissions or sulfur dioxide
emissions;
``(3) pollution control equipment and processes for the
mitigation or collection of more than one pollutant;
``(4) advanced combustion technology for the control of at
least two pollutants, including mercury, particulate matter,
nitrogen oxides, and sulfur dioxide, which may also be designed
to improve the energy efficiency of the unit; and
``(5) advanced pollution control equipment and processes
designed to allow use of the waste byproducts or other
byproducts of the equipment or an electrical generation unit
designed to allow the use of byproducts.
Funds appropriated under this subsection which are not awarded before
fiscal year 2011 may be applied to projects under subsection (b), in
addition to amounts authorized under subsection (b).
``(b) Generation Projects.--There are authorized to be appropriated
to the Secretary $150,000,000 for fiscal year 2006, $250,000,000 for
each of the fiscal years 2007 through 2011, and $100,000,000 for fiscal
year 2012, to remain available until expended, for generation projects
and air pollution control projects. Such projects may include--
``(1) coal-based electrical generation equipment and
processes, including gasification combined cycle or other coal-
based generation equipment and processes;
``(2) associated environmental control equipment, that will
be cost-effective and that is designed to meet anticipated
regulatory requirements;
``(3) coal-based electrical generation equipment and
processes, including gasification fuel cells, gasification
coproduction, and hybrid gasification/combustion projects; and
``(4) advanced coal-based electrical generation equipment
and processes, including oxidation combustion techniques,
ultra-supercritical boilers, and chemical looping, which the
Secretary determines will be cost-effective and could
substantially contribute to meeting anticipated environmental
or energy needs.
``(c) Limitation.--Funds placed at risk during any fiscal year for
Federal loans or loan guarantees pursuant to this title may not exceed
30 percent of the total funds obligated under this title.

``SEC. 3104. AIR POLLUTION CONTROL PROJECT CRITERIA.

``The Secretary shall pursuant to authorizations contained in
section 3103 provide funding for air pollution control projects
designed to facilitate compliance with Federal and State environmental
regulations, including any regulation that may be established with
respect to mercury.

``SEC. 3105. CRITERIA FOR GENERATION PROJECTS.

``(a) Criteria.--The Secretary shall establish criteria on which
selection of individual projects described in section 3103(b) should be
based. The Secretary may modify the criteria as appropriate to reflect
improvements in equipment, except that the criteria shall not be
modified to be less stringent. These selection criteria shall include--
``(1) prioritization of projects whose installation is
likely to result in significant air quality improvements in
nonattainment air quality areas;
``(2) prioritization of projects that result in the
repowering or replacement of older, less efficient units;
``(3) documented broad interest in the procurement of the
equipment and utilization of the processes used in the projects
by electrical generator owners or operators;
``(4) equipment and processes beginning in 2005 through
2010 that are projected to achieve an thermal efficiency of--
``(A) 40 percent for coal of more than 9,000 Btu
per pound based on higher heating values;
``(B) 38 percent for coal of 7,000 to 9,000 Btu per
pound based on higher heating values; and
``(C) 36 percent for coal of less than 7,000 Btu
per pound based on higher heating values,
except that energy used for coproduction or cogeneration shall
not be counted in calculating the thermal efficiency under this
paragraph; and
``(5) equipment and processes beginning in 2011 and 2012
that are projected to achieve an thermal efficiency of--
``(A) 45 percent for coal of more than 9,000 Btu
per pound based on higher heating values;
``(B) 44 percent for coal of 7,000 to 9,000 Btu per
pound based on higher heating values; and
``(C) 40 percent for coal of less than 7,000 Btu
per pound based on higher heating values,
except that energy used for coproduction or cogeneration shall
not be counted in calculating the thermal efficiency under this
paragraph.
``(b) Selection.--(1) In selecting the projects, up to 25 percent
of the projects selected may be either coproduction or cogeneration or
other gasification projects, but at least 25 percent of the projects
shall be for the sole purpose of electrical generation, and priority
should be given to equipment and projects less than 600 MW to foster
and promote standard designs.
``(2) The Secretary shall give priority to projects that have been
developed and demonstrated that are not yet cost competitive, and for
coal energy generation projects that advance efficiency, environmental
performance, or cost competitiveness significantly beyond the level of
pollution control equipment that is in operation on a full scale.

``SEC. 3106. FINANCIAL CRITERIA.

``(a) In General.--The Secretary shall only provide financial
assistance to projects that meet the requirements of sections 3103 and
3104 and are likely to--
``(1) achieve overall cost reductions in the utilization of
coal to generate useful forms of energy; and
``(2) improve the competitiveness of coal in order to
maintain a diversity of domestic fuel choices in the United
States to meet electricity generation requirements.
``(b) Conditions.--The Secretary shall not provide a funding award
under this title unless--
``(1) the award recipient is financially viable without the
receipt of additional Federal funding; and
``(2) the recipient provides sufficient information to the
Secretary for the Secretary to ensure that the award funds are
spent efficiently and effectively.
``(c) Equal Access.--The Secretary shall, to the extent practical,
utilize cooperative agreement, loan guarantee, and direct Federal loan
mechanisms designed to ensure that all electrical generation owners
have equal access to these technology deployment incentives. The
Secretary shall develop and direct a competitive solicitation process
for the selection of technologies and projects under this title.

``SEC. 3107. FEDERAL SHARE.

``The Federal share of the cost of a coal or related technology
project funded by the Secretary under this title shall not exceed 50
percent. For purposes of this title, Federal funding includes only
appropriated funds.

``SEC. 3108. APPLICABILITY.

``No technology, or level of emission reduction, shall be treated
as adequately demonstrated for purposes of section 111 of the Clean Air
Act (42 U.S.C. 7411), achievable for purposes of section 169 of the
Clean Air Act (42 U.S.C. 7479), or achievable in practice for purposes
of section 171 of the Clean Air Act (42 U.S.C. 7501) solely by reason
of the use of such technology, or the achievement of such emission
reduction, by one or more facilities receiving assistance under this
title.''.
(b) Table of Contents Amendment.--The table of contents of the
Energy Policy Act of 1992 is amended by adding at the end the
following:

``TITLE XXXI CLEAN AIR COAL PROGRAM

``Sec. 3101. Findings; purposes; definitions.
``Sec. 3102. Authorization of program.
``Sec. 3103. Authorization of appropriations.
``Sec. 3104. Air pollution control project criteria.
``Sec. 3105. Criteria for generation projects.
``Sec. 3106. Financial criteria.
``Sec. 3107. Federal share.
``Sec. 3108. Applicability.''.

TITLE V--INDIAN ENERGY

SEC. 501. SHORT TITLE.

This title may be cited as the ``Indian Tribal Energy Development
and Self-Determination Act of 2004''.

SEC. 502. OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS.

(a) In General.--Title II of the Department of Energy Organization
Act (42 U.S.C. 7131 et seq.) is amended by adding at the end the
following:

``office of indian energy policy and programs

``Sec. 217. (a) Establishment.--There is established within the
Department an Office of Indian Energy Policy and Programs (referred to
in this section as the `Office'). The Office shall be headed by a
Director, who shall be appointed by the Secretary and compensated at a
rate equal to that of level IV of the Executive Schedule under section
5315 of title 5, United States Code.
``(b) Duties of Director.--The Director, in accordance with Federal
policies promoting Indian self-determination and the purposes of this
Act, shall provide, direct, foster, coordinate, and implement energy
planning, education, management, conservation, and delivery programs of
the Department that--
``(1) promote Indian tribal energy development, efficiency,
and use;
``(2) reduce or stabilize energy costs;
``(3) enhance and strengthen Indian tribal energy and
economic infrastructure relating to natural resource
development and electrification; and
``(4) bring electrical power and service to Indian land and
the homes of tribal members located on Indian lands or
acquired, constructed, or improved (in whole or in part) with
Federal funds.''.
(b) Conforming Amendments.--
(1) The table of contents of the Department of Energy
Organization Act (42 U.S.C. prec. 7101) is amended--
(A) in the item relating to section 209, by
striking ``Section'' and inserting ``Sec.''; and
(B) by striking the items relating to sections 213
through 216 and inserting the following:

``Sec. 213. Establishment of policy for National Nuclear Security
Administration.
``Sec. 214. Establishment of security, counterintelligence, and
intelligence policies.
``Sec. 215. Office of Counterintelligence.
``Sec. 216. Office of Intelligence.
``Sec. 217. Office of Indian Energy Policy and Programs.''.
(2) Section 5315 of title 5, United States Code, is amended
by inserting ``Director, Office of Indian Energy Policy and
Programs, Department of Energy.'' after ``Inspector General,
Department of Energy.''.

SEC. 503. INDIAN ENERGY.

(a) In General.--Title XXVI of the Energy Policy Act of 1992 (25
U.S.C. 3501 et seq.) is amended to read as follows:

``TITLE XXVI--INDIAN ENERGY

``SEC. 2601. DEFINITIONS.

``For purposes of this title:
``(1) The term `Director' means the Director of the Office
of Indian Energy Policy and Programs, Department of Energy.
``(2) The term `Indian land' means--
``(A) any land located within the boundaries of an
Indian reservation, pueblo, or rancheria;
``(B) any land not located within the boundaries of
an Indian reservation, pueblo, or rancheria, the title
to which is held--
``(i) in trust by the United States for the
benefit of an Indian tribe or an individual
Indian;
``(ii) by an Indian tribe or an individual
Indian, subject to restriction against
alienation under laws of the United States; or
``(iii) by a dependent Indian community;
and
``(C) land that is owned by an Indian tribe and was
conveyed by the United States to a Native Corporation
pursuant to the Alaska Native Claims Settlement Act (43
U.S.C. 1601 et seq.), or that was conveyed by the
United States to a Native Corporation in exchange for
such land.
``(3) The term `Indian reservation' includes--
``(A) an Indian reservation in existence in any
State or States as of the date of enactment of this
paragraph;
``(B) a public domain Indian allotment; and
``(C) a dependent Indian community located within
the borders of the United States, regardless of whether
the community is located--
``(i) on original or acquired territory of
the community; or
``(ii) within or outside the boundaries of
any particular State.
``(4) The term `Indian tribe' has the meaning given the
term in section 4 of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450b), except that the term
`Indian tribe', for the purpose of paragraph (11) and sections
2603(b)(3) and 2604, shall not include any Native Corporation.
``(5) The term `integration of energy resources' means any
project or activity that promotes the location and operation of
a facility (including any pipeline, gathering system,
transportation system or facility, or electric transmission or
distribution facility) on or near Indian land to process,
refine, generate electricity from, or otherwise develop energy
resources on, Indian land.
``(6) The term `Native Corporation' has the meaning given
the term in section 3 of the Alaska Native Claims Settlement
Act (43 U.S.C. 1602).
``(7) The term `organization' means a partnership, joint
venture, limited liability company, or other unincorporated
association or entity that is established to develop Indian
energy resources.
``(8) The term `Program' means the Indian energy resource
development program established under section 2602(a).
``(9) The term `Secretary' means the Secretary of the
Interior.
``(10) The term `tribal energy resource development
organization' means an organization of 2 or more entities, at
least 1 of which is an Indian tribe, that has the written
consent of the governing bodies of all Indian tribes
participating in the organization to apply for a grant, loan,
or other assistance authorized by section 2602.
``(11) The term `tribal land' means any land or interests
in land owned by any Indian tribe, title to which is held in
trust by the United States or which is subject to a restriction
against alienation under laws of the United States.

``SEC. 2602. INDIAN TRIBAL ENERGY RESOURCE DEVELOPMENT.

``(a) Department of the Interior Program.--
``(1) To assist Indian tribes in the development of energy
resources and further the goal of Indian self-determination,
the Secretary shall establish and implement an Indian energy
resource development program to assist consenting Indian tribes
and tribal energy resource development organizations in
achieving the purposes of this title.
``(2) In carrying out the Program, the Secretary shall--
``(A) provide development grants to Indian tribes
and tribal energy resource development organizations
for use in developing or obtaining the managerial and
technical capacity needed to develop energy resources
on Indian land, and to properly account for resulting
energy production and revenues;
``(B) provide grants to Indian tribes and tribal
energy resource development organizations for use in
carrying out projects to promote the integration of
energy resources, and to process, use, or develop those
energy resources, on Indian land; and
``(C) provide low-interest loans to Indian tribes
and tribal energy resource development organizations
for use in the promotion of energy resource development
on Indian land and integration of energy resources.
``(3) There are authorized to be appropriated to carry out
this subsection such sums as are necessary for each of fiscal
years 2004 through 2014.
``(b) Department of Energy Indian Energy Education Planning and
Management Assistance Program.--
``(1) The Director shall establish programs to assist
consenting Indian tribes in meeting energy education, research
and development, planning, and management needs.
``(2) In carrying out this subsection, the Director may
provide grants, on a competitive basis, to an Indian tribe or
tribal energy resource development organization for use in
carrying out--
``(A) energy, energy efficiency, and energy
conservation programs;
``(B) studies and other activities supporting
tribal acquisitions of energy supplies, services, and
facilities;
``(C) planning, construction, development,
operation, maintenance, and improvement of tribal
electrical generation, transmission, and distribution
facilities located on Indian land; and
``(D) development, construction, and
interconnection of electric power transmission
facilities located on Indian land with other electric
transmission facilities.
``(3)(A) The Director may develop, in consultation with
Indian tribes, a formula for providing grants under this
subsection.
``(B) In providing a grant under this subsection, the
Director shall give priority to an application received from an
Indian tribe with inadequate electric service (as determined by
the Director).
``(4) The Secretary of Energy may issue such regulations as
necessary to carry out this subsection.
``(5) There are authorized to be appropriated to carry out
this subsection $20,000,000 for each of fiscal years 2004
through 2014.
``(c) Department of Energy Loan Guarantee Program.--
``(1) Subject to paragraph (3), the Secretary of Energy may
provide loan guarantees (as defined in section 502 of the
Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) for not more
than 90 percent of the unpaid principal and interest due on any
loan made to any Indian tribe for energy development.
``(2) A loan guarantee under this subsection shall be made
by--
``(A) a financial institution subject to
examination by the Secretary of Energy; or
``(B) an Indian tribe, from funds of the Indian
tribe.
``(3) The aggregate outstanding amount guaranteed by the
Secretary of Energy at any time under this subsection shall not
exceed $2,000,000,000.
``(4) The Secretary of Energy may issue such regulations as
the Secretary of Energy determines are necessary to carry out
this subsection.
``(5) There are authorized to be appropriated such sums as
are necessary to carry out this subsection, to remain available
until expended.
``(6) Not later than 1 year from the date of enactment of
this section, the Secretary of Energy shall report to Congress
on the financing requirements of Indian tribes for energy
development on Indian land.
``(d) Federal Agencies-Indian Energy Preference.--
``(1) In purchasing electricity or any other energy product
or byproduct, a Federal agency or department may give
preference to an energy and resource production enterprise,
partnership, consortium, corporation, or other type of business
organization the majority of the interest in which is owned and
controlled by 1 or more Indian tribes.
``(2) In carrying out this subsection, a Federal agency or
department shall not--
``(A) pay more than the prevailing market price for
an energy product or byproduct; or
``(B) obtain less than prevailing market terms and
conditions.

``SEC. 2603. INDIAN TRIBAL ENERGY RESOURCE REGULATION.

``(a) Grants.--The Secretary may provide to Indian tribes, on an
annual basis, grants for use in accordance with subsection (b).
``(b) Use of Funds.--Funds from a grant provided under this section
may be used--
``(1) by an Indian tribe for the development of a tribal
energy resource inventory or tribal energy resource on Indian
land;
``(2) by an Indian tribe for the development of a
feasibility study or other report necessary to the development
of energy resources on Indian land;
``(3) by an Indian tribe (other than an Indian Tribe in
Alaska except the Metlakatla Indian Community) for the
development and enforcement of tribal laws (including
regulations) relating to tribal energy resource development and
the development of technical infrastructure to protect the
environment under applicable law; or
``(4) by a Native Corporation for the development and
implementation of corporate policies and the development of
technical infrastructure to protect the environment under
applicable law; and
``(5) by an Indian tribe for the training of employees
that--
``(A) are engaged in the development of energy
resources on Indian land; or
``(B) are responsible for protecting the
environment.
``(c) Other Assistance.--In carrying out the obligations of the
United States under this title, the Secretary shall ensure, to the
maximum extent practicable and to the extent of available resources,
that upon the request of an Indian tribe, the Indian tribe shall have
available scientific and technical information and expertise, for use
in the Indian tribe's regulation, development, and management of energy
resources on Indian land. The Secretary may fulfill this responsibility
either directly, through the use of Federal officials, or indirectly,
by providing financial assistance to the Indian tribe to secure
independent assistance.

``SEC. 2604. LEASES, BUSINESS AGREEMENTS, AND RIGHTS-OF-WAY INVOLVING
ENERGY DEVELOPMENT OR TRANSMISSION.

``(a) Leases and Business Agreements.--Subject to the provisions of
this section--
``(1) an Indian tribe may, at its discretion, enter into a
lease or business agreement for the purpose of energy resource
development on tribal land, including a lease or business
agreement for--
``(A) exploration for, extraction of, processing
of, or other development of the Indian tribe's energy
mineral resources located on tribal land; and
``(B) construction or operation of an electric
generation, transmission, or distribution facility
located on tribal land or a facility to process or
refine energy resources developed on tribal land; and
``(2) such lease or business agreement described in
paragraph (1) shall not require the approval of the Secretary
under section 2103 of the Revised Statutes (25 U.S.C. 81) or
any other provision of law, if--
``(A) the lease or business agreement is executed
pursuant to a tribal energy resource agreement approved
by the Secretary under subsection (e);
``(B) the term of the lease or business agreement
does not exceed--
``(i) 30 years; or
``(ii) in the case of a lease for the
production of oil resources, gas resources, or
both, 10 years and as long thereafter as oil or
gas is produced in paying quantities; and
``(C) the Indian tribe has entered into a tribal
energy resource agreement with the Secretary, as
described in subsection (e), relating to the
development of energy resources on tribal land
(including the periodic review and evaluation of the
activities of the Indian tribe under the agreement, to
be conducted pursuant to the provisions required by
subsection (e)(2)(D)(i)).
``(b) Rights-Of-Way for Pipelines or Electric Transmission or
Distribution Lines.--An Indian tribe may grant a right-of-way over
tribal land for a pipeline or an electric transmission or distribution
line without approval by the Secretary if--
``(1) the right-of-way is executed in accordance with a
tribal energy resource agreement approved by the Secretary
under subsection (e);
``(2) the term of the right-of-way does not exceed 30
years;
``(3) the pipeline or electric transmission or distribution
line serves--
``(A) an electric generation, transmission, or
distribution facility located on tribal land; or
``(B) a facility located on tribal land that
processes or refines energy resources developed on
tribal land; and
``(4) the Indian tribe has entered into a tribal energy
resource agreement with the Secretary, as described in
subsection (e), relating to the development of energy resources
on tribal land (including the periodic review and evaluation of
the Indian tribe's activities under such agreement described in
subparagraphs (D) and (E) of subsection (e)(2)).
``(c) Renewals.--A lease or business agreement entered into or a
right-of-way granted by an Indian tribe under this section may be
renewed at the discretion of the Indian tribe in accordance with this
section.
``(d) Validity.--No lease, business agreement, or right-of-way
relating to the development of tribal energy resources pursuant to the
provisions of this section shall be valid unless the lease, business
agreement, or right-of-way is authorized by the provisions of a tribal
energy resource agreement approved by the Secretary under subsection
(e)(2).
``(e) Tribal Energy Resource Agreements.--
``(1) On issuance of regulations under paragraph (8), an
Indian tribe may submit to the Secretary for approval a tribal
energy resource agreement governing leases, business
agreements, and rights-of-way under this section.
``(2)(A) Not later than 180 days after the date on which
the Secretary receives a tribal energy resource agreement
submitted by an Indian tribe under paragraph (1), or not later
than 60 days after the Secretary receives a revised tribal
energy resource agreement submitted by an Indian tribe under
paragraph (4)(C), (or such later date as may be agreed to by
the Secretary and the Indian tribe), the Secretary shall
approve or disapprove the tribal energy resource agreement.
``(B) The Secretary shall approve a tribal energy resource
agreement submitted under paragraph (1) if--
``(i) the Secretary determines that the Indian
tribe has demonstrated that the Indian tribe has
sufficient capacity to regulate the development of
energy resources of the Indian tribe;
``(ii) the tribal energy resource agreement
includes provisions required under subparagraph (D);
and
``(iii) the tribal energy resource agreement
includes provisions that, with respect to a lease,
business agreement, or right-of-way under this
section--
``(I) ensure the acquisition of necessary
information from the applicant for the lease,
business agreement, or right-of-way;
``(II) address the term of the lease or
business agreement or the term of conveyance of
the right-of-way;
``(III) address amendments and renewals;
``(IV) address the economic return to the
Indian tribe under leases, business agreements,
and rights-of-way;
``(V) address technical or other relevant
requirements;
``(VI) establish requirements for
environmental review in accordance with
subparagraph (C);
``(VII) ensure compliance with all
applicable environmental laws;
``(VIII) identify final approval authority;
``(IX) provide for public notification of
final approvals;
``(X) establish a process for consultation
with any affected States concerning off-
reservation impacts, if any, identified
pursuant to the provisions required under
subparagraph (C)(i);
``(XI) describe the remedies for breach of
the lease, business agreement, or right-of-way;
``(XII) require each lease, business
agreement, and right-of-way to include a
statement that, in the event that any of its
provisions violates an express term or
requirement set forth in the tribal energy
resource agreement pursuant to which it was
executed--
``(aa) such provision shall be null
and void; and
``(bb) if the Secretary determines
such provision to be material, the
Secretary shall have the authority to
suspend or rescind the lease, business
agreement, or right-of-way or take
other appropriate action that the
Secretary determines to be in the best
interest of the Indian tribe;
``(XIII) require each lease, business
agreement, and right-of-way to provide that it
will become effective on the date on which a
copy of the executed lease, business agreement,
or right-of-way is delivered to the Secretary
in accordance with regulations adopted pursuant
to this subsection; and
``(XIV) include citations to tribal laws,
regulations, or procedures, if any, that set
out tribal remedies that must be exhausted
before a petition may be submitted to the
Secretary pursuant to paragraph (7)(B).
``(C) Tribal energy resource agreements submitted under
paragraph (1) shall establish, and include provisions to ensure
compliance with, an environmental review process that, with
respect to a lease, business agreement, or right-of-way under
this section, provides for--
``(i) the identification and evaluation of all
significant environmental impacts (as compared with a
no-action alternative), including effects on cultural
resources;
``(ii) the identification of proposed mitigation;
``(iii) a process for ensuring that the public is
informed of and has an opportunity to comment on the
environmental impacts of the proposed action before
tribal approval of the lease, business agreement, or
right-of-way; and
``(iv) sufficient administrative support and
technical capability to carry out the environmental
review process.
``(D) A tribal energy resource agreement negotiated between
the Secretary and an Indian tribe in accordance with this
subsection shall include--
``(i) provisions requiring the Secretary to conduct
a periodic review and evaluation to monitor the
performance of the Indian tribe's activities associated
with the development of energy resources under the
tribal energy resource agreement; and
``(ii) when such review and evaluation result in a
finding by the Secretary of imminent jeopardy to a
physical trust asset arising from a violation of the
tribal energy resource agreement or applicable Federal
laws, provisions authorizing the Secretary to take
appropriate actions determined by the Secretary to be
necessary to protect such asset, which actions may
include reassumption of responsibility for activities
associated with the development of energy resources on
tribal land until the violation and conditions that
gave rise to such jeopardy have been corrected.
``(E) The periodic review and evaluation described in
subparagraph (D) shall be conducted on an annual basis, except
that, after the third such annual review and evaluation, the
Secretary and the Indian tribe may mutually agree to amend the
tribal energy resource agreement to authorize the review and
evaluation required by subparagraph (D) to be conducted once
every 2 years.
``(3) The Secretary shall provide notice and opportunity
for public comment on tribal energy resource agreements
submitted for approval under paragraph (1). The Secretary's
review of a tribal energy resource agreement under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) shall
be limited to the direct effects of that approval.
``(4) If the Secretary disapproves a tribal energy resource
agreement submitted by an Indian tribe under paragraph (1), the
Secretary shall, not later than 10 days after the date of
disapproval--
``(A) notify the Indian tribe in writing of the
basis for the disapproval;
``(B) identify what changes or other actions are
required to address the concerns of the Secretary; and
``(C) provide the Indian tribe with an opportunity
to revise and resubmit the tribal energy resource
agreement.
``(5) If an Indian tribe executes a lease or business
agreement or grants a right-of-way in accordance with a tribal
energy resource agreement approved under this subsection, the
Indian tribe shall, in accordance with the process and
requirements set forth in the Secretary's regulations adopted
pursuant to paragraph (8), provide to the Secretary--
``(A) a copy of the lease, business agreement, or
right-of-way document (including all amendments to and
renewals of the document); and
``(B) in the case of a tribal energy resource
agreement or a lease, business agreement, or right-of-
way that permits payments to be made directly to the
Indian tribe, information and documentation of those
payments sufficient to enable the Secretary to
discharge the trust responsibility of the United States
to enforce the terms of, and protect the Indian tribe's
rights under, the lease, business agreement, or right-
of-way.
``(6)(A) For purposes of the activities to be undertaken by
the Secretary pursuant to this section, the Secretary shall--
``(i) carry out such activities in a manner
consistent with the trust responsibility of the United
States relating to mineral and other trust resources;
and
``(ii) act in good faith and in the best interests
of the Indian tribes.
``(B) Subject to the provisions of subsections (a)(2), (b),
and (c) waiving the requirement of Secretarial approval of
leases, business agreements, and rights-of-way executed
pursuant to tribal energy resource agreements approved under
this section, and the provisions of subparagraph (D), nothing
in this section shall absolve the United States from any
responsibility to Indians or Indian tribes, including, but not
limited to, those which derive from the trust relationship or
from any treaties, statutes, and other laws of the United
States, Executive Orders, or agreements between the United
States and any Indian tribe.
``(C) The Secretary shall continue to have a trust
obligation to ensure that the rights and interests of an Indian
tribe are protected in the event that--
``(i) any other party to any such lease, business
agreement, or right-of-way violates any applicable
provision of Federal law or the terms of any lease,
business agreement, or right-of-way under this section;
or
``(ii) any provision in such lease, business
agreement, or right-of-way violates any express
provision or requirement set forth in the tribal energy
resource agreement pursuant to which the lease,
business agreement, or right-of-way was executed.
``(D) Notwithstanding subparagraph (B), the United States
shall not be liable to any party (including any Indian tribe)
for any of the negotiated terms of, or any losses resulting
from the negotiated terms of, a lease, business agreement, or
right-of-way executed pursuant to and in accordance with a
tribal energy resource agreement approved by the Secretary
under paragraph (2). For the purpose of this subparagraph, the
term `negotiated terms' means any terms or provisions that are
negotiated by an Indian tribe and any other party or parties to
a lease, business agreement, or right-of-way entered into
pursuant to an approved tribal energy resource agreement.
``(7)(A) In this paragraph, the term `interested party'
means any person or entity the interests of which have
sustained or will sustain a significant adverse environmental
impact as a result of the failure of an Indian tribe to comply
with a tribal energy resource agreement of the Indian tribe
approved by the Secretary under paragraph (2).
``(B) After exhaustion of tribal remedies, and in
accordance with the process and requirements set forth in
regulations adopted by the Secretary pursuant to paragraph (8),
an interested party may submit to the Secretary a petition to
review compliance of an Indian tribe with a tribal energy
resource agreement of the Indian tribe approved by the
Secretary under paragraph (2).
``(C)(i) Not later than 120 days after the date on which
the Secretary receives a petition under subparagraph (B), the
Secretary shall determine whether the Indian tribe is not in
compliance with the tribal energy resource agreement, as
alleged in the petition.
``(ii) The Secretary may adopt procedures under paragraph
(8) authorizing an extension of time, not to exceed 120 days,
for making the determination under clause (i) in any case in
which the Secretary determines that additional time is
necessary to evaluate the allegations of the petition.
``(iii) Subject to subparagraph (D), if the Secretary
determines that the Indian tribe is not in compliance with the
tribal energy resource agreement as alleged in the petition,
the Secretary shall take such action as is necessary to ensure
compliance with the provisions of the tribal energy resource
agreement, which action may include--
``(I) temporarily suspending some or all activities
under a lease, business agreement, or right-of-way
under this section until the Indian tribe or such
activities are in compliance with the provisions of the
approved tribal energy resource agreement; or
``(II) rescinding approval of all or part of the
tribal energy resource agreement, and if all of such
agreement is rescinded, reassuming the responsibility
for approval of any future leases, business agreements,
or rights-of-way described in subsections (a) and (b).
``(D) Prior to seeking to ensure compliance with the
provisions of the tribal energy resource agreement of an Indian
tribe under subparagraph (C)(iii), the Secretary shall--
``(i) make a written determination that describes
the manner in which the tribal energy resource
agreement has been violated;
``(ii) provide the Indian tribe with a written
notice of the violations together with the written
determination; and
``(iii) before taking any action described in
subparagraph (C)(iii) or seeking any other remedy,
provide the Indian tribe with a hearing and a
reasonable opportunity to attain compliance with the
tribal energy resource agreement.
``(E) An Indian tribe described in subparagraph (D) shall
retain all rights to appeal as provided in regulations issued
by the Secretary.
``(8) Not later than 1 year after the date of enactment of
the Indian Tribal Energy Development and Self-Determination Act
of 2004, the Secretary shall issue regulations that implement
the provisions of this subsection, including--
``(A) criteria to be used in determining the
capacity of an Indian tribe described in paragraph
(2)(B)(i), including the experience of the Indian tribe
in managing natural resources and financial and
administrative resources available for use by the
Indian tribe in implementing the approved tribal energy
resource agreement of the Indian tribe;
``(B) a process and requirements in accordance with
which an Indian tribe may--
``(i) voluntarily rescind a tribal energy
resource agreement approved by the Secretary
under this subsection; and
``(ii) return to the Secretary the
responsibility to approve any future leases,
business agreements, and rights-of-way
described in this subsection;
``(C) provisions setting forth the scope of, and
procedures for, the periodic review and evaluation
described in subparagraphs (D) and (E) of paragraph
(2), including provisions for review of transactions,
reports, site inspections, and any other review
activities the Secretary determines to be appropriate;
and
``(D) provisions defining final agency actions
after exhaustion of administrative appeals from
determinations of the Secretary under paragraph (7).
``(f) No Effect on Other Law.--Nothing in this section affects the
application of--
``(1) any Federal environment law;
``(2) the Surface Mining Control and Reclamation Act of
1977 (30 U.S.C. 1201 et seq.); or
``(3) except as otherwise provided in this title, the
Indian Mineral Development Act of 1982 (25 U.S.C. 2101 et seq.)
and the National Environmental Policy Act of 1969 (42 U.S.C.
4321 et seq.).
``(g) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary such sums as are necessary for each of
fiscal years 2004 through 2014 to implement the provisions of this
section and to make grants or provide other appropriate assistance to
Indian tribes to assist the Indian tribes in developing and
implementing tribal energy resource agreements in accordance with the
provisions of this section.

``SEC. 2605. INDIAN MINERAL DEVELOPMENT REVIEW.

``(a) In General.--The Secretary shall conduct a review of all
activities being conducted under the Indian Mineral Development Act of
1982 (25 U.S.C. 2101 et seq.) as of that date.
``(b) Report.--Not later than 1 year after the date of enactment of
the Indian Tribal Energy Development and Self-Determination Act of
2004, the Secretary shall submit to Congress a report that includes--
``(1) the results of the review;
``(2) recommendations to ensure that Indian tribes have the
opportunity to develop Indian energy resources; and
``(3) an analysis of the barriers to the development of
energy resources on Indian land (including legal, fiscal,
market, and other barriers), along with recommendations for the
removal of those barriers.

``SEC. 2606. FEDERAL POWER MARKETING ADMINISTRATIONS.

``(a) Definitions.--In this section:
``(1) The term `Administrator' means the Administrator of
the Bonneville Power Administration and the Administrator of
the Western Area Power Administration.
``(2) The term `power marketing administration' means--
``(A) the Bonneville Power Administration;
``(B) the Western Area Power Administration; and
``(C) any other power administration the power
allocation of which is used by or for the benefit of an
Indian tribe located in the service area of the
administration.
``(b) Encouragement of Indian Tribal Energy Development.--Each
Administrator shall encourage Indian tribal energy development by
taking such actions as are appropriate, including administration of
programs of the Bonneville Power Administration and the Western Area
Power Administration, in accordance with this section.
``(c) Action by the Administrator.--In carrying out this section,
and in accordance with existing law--
``(1) each Administrator shall consider the unique
relationship that exists between the United States and Indian
tribes;
``(2) power allocations from the Western Area Power
Administration to Indian tribes may be used to meet firming and
reserve needs of Indian-owned energy projects on Indian land;
``(3) the Administrator of the Western Area Power
Administration may purchase non-federally generated power from
Indian tribes to meet the firming and reserve requirements of
the Western Area Power Administration; and
``(4) each Administrator shall not pay more than the
prevailing market price for an energy product nor obtain less
than prevailing market terms and conditions.
``(d) Assistance for Transmission System Use.--(1) An Administrator
may provide technical assistance to Indian tribes seeking to use the
high-voltage transmission system for delivery of electric power.
``(2) The costs of technical assistance provided under paragraph
(1) shall be funded by the Secretary of Energy using nonreimbursable
funds appropriated for that purpose, or by the applicable Indian
tribes.
``(e) Power Allocation Study.--Not later than 2 years after the
date of enactment of the Indian Tribal Energy Development and Self-
Determination Act of 2004, the Secretary of Energy shall submit to
Congress a report that--
``(1) describes the use by Indian tribes of Federal power
allocations of the Western Area Power Administration (or power
sold by the Southwestern Power Administration) and the
Bonneville Power Administration to or for the benefit of Indian
tribes in service areas of those administrations; and
``(2) identifies--
``(A) the quantity of power allocated to, or used
for the benefit of, Indian tribes by the Western Area
Power Administration;
``(B) the quantity of power sold to Indian tribes
by other power marketing administrations; and
``(C) barriers that impede tribal access to and use
of Federal power, including an assessment of
opportunities to remove those barriers and improve the
ability of power marketing administrations to deliver
Federal power.
``(f) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $750,000, which shall remain
available until expended and shall not be reimbursable.

``SEC. 2607. WIND AND HYDROPOWER FEASIBILITY STUDY.

``(a) Study.--The Secretary of Energy, in coordination with the
Secretary of the Army and the Secretary, shall conduct a study of the
cost and feasibility of developing a demonstration project that would
use wind energy generated by Indian tribes and hydropower generated by
the Army Corps of Engineers on the Missouri River to supply firming
power to the Western Area Power Administration.
``(b) Scope of Study.--The study shall--
``(1) determine the feasibility of the blending of wind
energy and hydropower generated from the Missouri River dams
operated by the Army Corps of Engineers;
``(2) review historical and projected requirements for
firming power and the patterns of availability and use of
firming power;
``(3) assess the wind energy resource potential on tribal
land and projected cost savings through a blend of wind and
hydropower over a 30-year period;
``(4) determine seasonal capacity needs and associated
transmission upgrades for integration of tribal wind
generation; and
``(5) include an independent tribal engineer as a study
team member.
``(c) Report.--Not later than 1 year after the date of enactment of
the Energy Policy Act of 2003, the Secretary and Secretary of the Army
shall submit to Congress a report that describes the results of the
study, including--
``(1) an analysis of the potential energy cost or benefits
to the customers of the Western Area Power Administration
through the use of combined wind and hydropower;
``(2) an evaluation of whether a combined wind and
hydropower system can reduce reservoir fluctuation, enhance
efficient and reliable energy production, and provide Missouri
River management flexibility;
``(3) recommendations for a demonstration project that
could be carried out by the Western Area Power Administration
in partnership with an Indian tribal government or tribal
energy resource development organization to demonstrate the
feasibility and potential of using wind energy produced on
Indian land to supply firming energy to the Western Area Power
Administration or any other Federal power marketing agency; and
``(4) an identification of--
``(A) the economic and environmental costs or
benefits to be realized through such a Federal-tribal
partnership; and
``(B) the manner in which such a partnership could
contribute to the energy security of the United States.
``(d) Funding.--
``(1) Authorization of appropriations.--There are
authorized to be appropriated to carry out this section
$500,000, to remain available until expended.
``(2) Nonreimbursability.--Costs incurred by the Secretary in
carrying out this section shall be nonreimbursable.''.
(b) Conforming Amendments.--The table of contents for the Energy
Policy Act of 1992 is amended by striking the items relating to title
XXVI and inserting the following:

``Sec. 2601. Definitions.
``Sec. 2602. Indian tribal energy resource development.
``Sec. 2603. Indian tribal energy resource regulation.
``Sec. 2604. Leases, business agreements, and rights-of-way involving
energy development or transmission.
``Sec. 2605. Indian mineral development review.
``Sec. 2606. Federal Power Marketing Administrations.
``Sec. 2607. Wind and hydropower feasibility study.''.

SEC. 504. FOUR CORNERS TRANSMISSION LINE PROJECT.

The Dine Power Authority, an enterprise of the Navajo Nation, shall
be eligible to receive grants and other assistance as authorized by
section 217 of the Department of Energy Organization Act, as added by
section 502 of this title, and section 2602 of the Energy Policy Act of
1992, as amended by this title, for activities associated with the
development of a transmission line from the Four Corners Area to
southern Nevada, including related power generation opportunities.

SEC. 505. ENERGY EFFICIENCY IN FEDERALLY ASSISTED HOUSING.

(a) In General.--The Secretary of Housing and Urban Development
shall promote energy conservation in housing that is located on Indian
land and assisted with Federal resources through--
(1) the use of energy-efficient technologies and
innovations (including the procurement of energy-efficient
refrigerators and other appliances);
(2) the promotion of shared savings contracts; and
(3) the use and implementation of such other similar
technologies and innovations as the Secretary of Housing and
Urban Development considers to be appropriate.
(b) Amendment.--Section 202(2) of the Native American Housing and
Self-Determination Act of 1996 (25 U.S.C. 4132(2)) is amended by
inserting ``improvement to achieve greater energy efficiency,'' after
``planning,''.

SEC. 506. CONSULTATION WITH INDIAN TRIBES.

In carrying out this title and the amendments made by this title,
the Secretary of Energy and the Secretary shall, as appropriate and to
the maximum extent practicable, involve and consult with Indian tribes
in a manner that is consistent with the Federal trust and the
government-to-government relationships between Indian tribes and the
United States.

TITLE VI--NUCLEAR MATTERS

Subtitle A--Price-Anderson Act Amendments

SEC. 601. SHORT TITLE.

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

SEC. 602. EXTENSION OF INDEMNIFICATION AUTHORITY.

(a) Indemnification of Nuclear Regulatory Commission Licensees.--
Section 170 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(c)) is
amended--
(1) in the subsection heading, by striking ``Licenses'' and
inserting ``Licensees''; and
(2) by striking ``December 31, 2003'' each place it appears
and inserting ``December 31, 2023''.
(b) Indemnification of Department of Energy Contractors.--Section
170 d.(1)(A) of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)(1)(A))
is amended by striking ``December 31, 2004'' and inserting ``December
31, 2023''.
(c) Indemnification of Nonprofit Educational Institutions.--Section
170 k. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(k)) is amended
by striking ``August 1, 2002'' each place it appears and inserting
``December 31, 2023''.

SEC. 603. MAXIMUM ASSESSMENT.

Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is
amended--
(1) in the second proviso of the third sentence of
subsection b.(1)--
(A) by striking ``$63,000,000'' and inserting
``$95,800,000''; and
(B) by striking ``$10,000,000 in any 1 year'' and
inserting ``$15,000,000 in any 1 year (subject to
adjustment for inflation under subsection t.)''; and
(2) in subsection t.(1)--
(A) by inserting ``total and annual'' after
``amount of the maximum'';
(B) by striking ``the date of the enactment of the
Price-Anderson Amendments Act of 1988'' and inserting
``August 20, 2003''; and
(C) in subparagraph (A), by striking ``such date of
enactment'' and inserting ``August 20, 2003''.

SEC. 604. DEPARTMENT OF ENERGY LIABILITY LIMIT.

(a) Indemnification of Department of Energy Contractors.--Section
170 d. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) is amended
by striking paragraph (2) and inserting the following:
``(2) In an agreement of indemnification entered into under
paragraph (1), the Secretary--
``(A) may require the contractor to provide and maintain
financial protection of such a type and in such amounts as the
Secretary shall determine to be appropriate to cover public
liability arising out of or in connection with the contractual
activity; and
``(B) shall indemnify the persons indemnified against such
liability above the amount of the financial protection
required, in the amount of $10,000,000,000 (subject to
adjustment for inflation under subsection t.), in the
aggregate, for all persons indemnified in connection with the
contract and for each nuclear incident, including such legal
costs of the contractor as are approved by the Secretary.''.
(b) Contract Amendments.--Section 170 d. of the Atomic Energy Act
of 1954 (42 U.S.C. 2210(d)) is further amended by striking paragraph
(3) and inserting the following--
``(3) All agreements of indemnification under which the Department
of Energy (or its predecessor agencies) may be required to indemnify
any person under this section shall be deemed to be amended, on the
date of enactment of the Price-Anderson Amendments Act of 2003, to
reflect the amount of indemnity for public liability and any applicable
financial protection required of the contractor under this
subsection.''.
(c) Liability Limit.--Section 170 e.(1)(B) of the Atomic Energy Act
of 1954 (42 U.S.C. 2210(e)(1)(B)) is amended--
(1) by striking ``the maximum amount of financial
protection required under subsection b. or''; and
(2) by striking ``paragraph (3) of subsection d., whichever
amount is more'' and inserting ``paragraph (2) of subsection
d.''.

SEC. 605. INCIDENTS OUTSIDE THE UNITED STATES.

(a) Amount of Indemnification.--Section 170 d.(5) of the Atomic
Energy Act of 1954 (42 U.S.C. 2210(d)(5)) is amended by striking
``$100,000,000'' and inserting ``$500,000,000''.
(b) Liability Limit.--Section 170 e.(4) of the Atomic Energy Act of
1954 (42 U.S.C. 2210(e)(4)) is amended by striking ``$100,000,000'' and
inserting ``$500,000,000''.

SEC. 606. REPORTS.

Section 170 p. of the Atomic Energy Act of 1954 (42 U.S.C.
2210(p)) is amended by striking ``August 1, 1998'' and inserting
``December 31, 2019''.

SEC. 607. INFLATION ADJUSTMENT.

Section 170 t. of the Atomic Energy Act of 1954 (42 U.S.C.
2210(t)) is amended--
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by inserting after paragraph (1) the following:
``(2) The Secretary shall adjust the amount of indemnification
provided under an agreement of indemnification under subsection d. not
less than once during each 5-year period following July 1, 2003, in
accordance with the aggregate percentage change in the Consumer Price
Index since--
``(A) that date, in the case of the first adjustment under
this paragraph; or
``(B) the previous adjustment under this paragraph.''.

SEC. 608. TREATMENT OF MODULAR REACTORS.

Section 170 b. of the Atomic Energy Act of 1954 (42 U.S.C.
2210(b)) is amended by adding at the end the following:
``(5)(A) For purposes of this section only, the Commission shall
consider a combination of facilities described in subparagraph (B) to
be a single facility having a rated capacity of 100,000 electrical
kilowatts or more.
``(B) A combination of facilities referred to in subparagraph (A)
is 2 or more facilities located at a single site, each of which has a
rated capacity of 100,000 electrical kilowatts or more but not more
than 300,000 electrical kilowatts, with a combined rated capacity of
not more than 1,300,000 electrical kilowatts.''.

SEC. 609. APPLICABILITY.

The amendments made by sections 603, 604, and 605 do not apply to
a nuclear incident that occurs before the date of the enactment of this
Act.

SEC. 610. PROHIBITION ON ASSUMPTION BY UNITED STATES GOVERNMENT OF
LIABILITY FOR CERTAIN FOREIGN INCIDENTS.

Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is
amended by adding at the end the following new subsection:
``u. Prohibition on Assumption of Liability for Certain Foreign
Incidents.--Notwithstanding this section or any other provision of law,
no officer of the United States or of any department, agency, or
instrumentality of the United States Government may enter into any
contract or other arrangement, or into any amendment or modification of
a contract or other arrangement, the purpose or effect of which would
be to directly or indirectly impose liability on the United States
Government, or any department, agency, or instrumentality of the United
States Government, or to otherwise directly or indirectly require an
indemnity by the United States Government, for nuclear incidents
occurring in connection with the design, construction, or operation of
a production facility or utilization facility in any country whose
government has been identified by the Secretary of State as engaged in
state sponsorship of terrorist activities (specifically including any
country the government of which, as of September 11, 2001, had been
determined by the Secretary of State under section 620A(a) of the
Foreign Assistance Act of 1961 (22 U.S.C. 2371(a)), section 6(j)(1) of
the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)(1)), or
section 40(d) of the Arms Export Control Act (22 U.S.C. 2780(d)) to
have repeatedly provided support for acts of international terrorism).
This subsection shall not apply to nuclear incidents occurring as a
result of missions, carried out under the direction of the Secretary of
Energy, the Secretary of Defense, or the Secretary of State, that are
necessary to safely secure, store, transport, or remove nuclear
materials for nuclear safety or nonproliferation purposes.''.

SEC. 611. CIVIL PENALTIES.

(a) Repeal of Automatic Remission.--Section 234A b.(2) of the
Atomic Energy Act of 1954 (42 U.S.C. 2282a(b)(2)) is amended by
striking the last sentence.
(b) Limitation for Not-For-Profit Institutions.--Subsection d. of
section 234A of the Atomic Energy Act of 1954 (42 U.S.C. 2282a(d)) is
amended to read as follows:
``d.(1) Notwithstanding subsection a., in the case of any not-for-
profit contractor, subcontractor, or supplier, the total amount of
civil penalties paid under subsection a. may not exceed the total
amount of fees paid within any 1-year period (as determined by the
Secretary) under the contract under which the violation occurs.
``(2) For purposes of this section, the term `not-for-profit' means
that no part of the net earnings of the contractor, subcontractor, or
supplier inures to the benefit of any natural person or for-profit
artificial person.''.
(c) Effective Date.--The amendments made by this section shall not
apply to any violation of the Atomic Energy Act of 1954 (42 U.S.C. 2011
et seq.) occurring under a contract entered into before the date of
enactment of this section.

Subtitle B--General Nuclear Matters

SEC. 621. LICENSES.

Section 103 c. of the Atomic Energy Act of 1954 (42 U.S.C.
2133(c)) is amended by inserting ``from the authorization to commence
operations'' after ``forty years''.

SEC. 622. NRC TRAINING PROGRAM.

(a) In General.--In order to maintain the human resource investment
and infrastructure of the United States in the nuclear sciences, health
physics, and engineering fields, in accordance with the statutory
authorities of the Nuclear Regulatory Commission relating to the
civilian nuclear energy program, the Nuclear Regulatory Commission
shall carry out a training and fellowship program to address shortages
of individuals with critical nuclear safety regulatory skills.
(b) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
the Nuclear Regulatory Commission to carry out this section
$1,000,000 for each of fiscal years 2004 through 2008.
(2) Availability.--Funds made available under paragraph (1)
shall remain available until expended.

SEC. 623. COST RECOVERY FROM GOVERNMENT AGENCIES.

Section 161 w. of the Atomic Energy Act of 1954 (42 U.S.C.
2201(w)) is amended--
(1) by striking ``for or is issued'' and all that follows
through ``1702'' and inserting ``to the Commission for, or is
issued by the Commission, a license or certificate'';
(2) by striking ``483a'' and inserting ``9701''; and
(3) by striking ``, of applicants for, or holders of, such
licenses or certificates''.

SEC. 624. ELIMINATION OF PENSION OFFSET.

Section 161 of the Atomic Energy Act of 1954 (42 U.S.C. 2201) is
amended by adding at the end the following:
``y. Exempt from the application of sections 8344 and 8468 of title
5, United States Code, an annuitant who was formerly an employee of the
Commission who is hired by the Commission as a consultant, if the
Commission finds that the annuitant has a skill that is critical to the
performance of the duties of the Commission.''.

SEC. 625. ANTITRUST REVIEW.

Section 105 c. of the Atomic Energy Act of 1954 (42 U.S.C.
2135(c)) is amended by adding at the end the following:
``(9) Applicability.--This subsection does not apply to an
application for a license to construct or operate a utilization
facility or production facility under section 103 or 104 b. that is
filed on or after the date of enactment of this paragraph.''.

SEC. 626. DECOMMISSIONING.

Section 161 i. of the Atomic Energy Act of 1954 (42 U.S.C.
2201(i)) is amended--
(1) by striking ``and (3)'' and inserting ``(3)''; and
(2) by inserting before the semicolon at the end the
following: ``, and (4) to ensure that sufficient funds will be
available for the decommissioning of any production or
utilization facility licensed under section 103 or 104 b.,
including standards and restrictions governing the control,
maintenance, use, and disbursement by any former licensee under
this Act that has control over any fund for the decommissioning
of the facility''.

SEC. 627. LIMITATION ON LEGAL FEE REIMBURSEMENT.

The Department of Energy shall not, except as required under a
contract entered into before the date of enactment of this Act,
reimburse any contractor or subcontractor of the Department for any
legal fees or expenses incurred with respect to a complaint subsequent
to--
(1) an adverse determination on the merits with respect to
such complaint against the contractor or subcontractor by the
Director of the Department of Energy's Office of Hearings and
Appeals pursuant to part 708 of title 10, Code of Federal
Regulations, or by a Department of Labor Administrative Law
Judge pursuant to section 211 of the Energy Reorganization Act
of 1974 (42 U.S.C. 5851); or
(2) an adverse final judgment by any State or Federal court
with respect to such complaint against the contractor or
subcontractor for wrongful termination or retaliation due to
the making of disclosures protected under chapter 12 of title
5, United States Code, section 211 of the Energy Reorganization
Act of 1974 (42 U.S.C. 5851), or any comparable State law,
unless the adverse determination or final judgment is reversed upon
further administrative or judicial review.

SEC. 628. DECOMMISSIONING PILOT PROGRAM.

(a) Pilot Program.--The Secretary of Energy shall establish a
decommissioning pilot program to decommission and decontaminate the
sodium-cooled fast breeder experimental test-site reactor located in
northwest Arkansas in accordance with the decommissioning activities
contained in the August 31, 1998, Department of Energy report on the
reactor.
(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Energy to carry out this section
$16,000,000.

SEC. 629. REPORT ON FEASIBILITY OF DEVELOPING COMMERCIAL NUCLEAR ENERGY
GENERATION FACILITIES AT EXISTING DEPARTMENT OF ENERGY
SITES.

Not later than 1 year after the date of the enactment of this Act,
the Secretary of Energy shall submit to Congress a report on the
feasibility of developing commercial nuclear energy generation
facilities at Department of Energy sites in existence on the date of
enactment of this Act.

SEC. 630. URANIUM SALES.

(a) Sales, Transfers, and Services.--Section 3112 of the USEC
Privatization Act (42 U.S.C. 2297h-10) is amended by striking
subsections (d), (e), and (f) and inserting the following:
``(3) The Secretary may transfer to the Corporation,
notwithstanding subsections (b)(2) and (d), natural uranium in amounts
sufficient to fulfill the Department of Energy's commitments under
Article 4(B) of the Agreement between the Department and the
Corporation dated June 17, 2002.
``(d) Inventory Sales.--(1) In addition to the transfers and sales
authorized under subsections (b) and (c) and under paragraph (5) of
this subsection, the United States Government may transfer or sell
uranium in any form subject to paragraphs (2), (3), and (4).
``(2) Except as provided in subsections (b) and (c) and paragraph
(5) of this subsection, no sale or transfer of uranium shall be made
under this subsection by the United States Government unless--
``(A) the President determines that the material is not
necessary for national security needs and the sale or transfer
has no adverse impact on implementation of existing government-
to-government agreements;
``(B) the price paid to the appropriate Federal agency, if
the transaction is a sale, will not be less than the fair
market value of the material; and
``(C) the sale or transfer to commercial nuclear power end
users is made pursuant to a contract of at least 3 years'
duration.
``(3) Except as provided in paragraph (5), the United States
Government shall not make any transfer or sale of uranium in any form
under this subsection that would cause the total amount of uranium
transferred or sold pursuant to this subsection that is delivered for
consumption by commercial nuclear power end users to exceed--
``(A) 3,000,000 pounds of U<INF>3</INF> O<INF>8</INF>
equivalent in fiscal year 2004, 2005, 2006, 2007, 2008, or
2009;
``(B) 5,000,000 pounds of U<INF>3</INF>O<INF>8</INF>
equivalent in fiscal year 2010 or 2011;
``(C) 7,000,000 pounds of U<INF>3</INF>O<INF>8</INF>
equivalent in fiscal year 2012; and
``(D) 10,000,000 pounds of U<INF>3</INF>O<INF>8</INF>
equivalent in fiscal year 2013 or any fiscal year thereafter.
``(4) Except for sales or transfers under paragraph (5), for the
purposes of this subsection, the recovery of uranium from uranium
bearing materials transferred or sold by the United States Government
to the domestic uranium industry shall be the preferred method of
making uranium available. The recovered uranium shall be counted
against the annual maximum deliveries set forth in this section, when
such uranium is sold to end users.
``(5) The United States Government may make the following sales and
transfers:
``(A) Sales or transfers to a Federal agency if the
material is transferred for the use of the receiving agency
without any resale or transfer to another entity and the
material does not meet commercial specifications.
``(B) Sales or transfers to any person for national
security purposes, as determined by the Secretary.
``(C) Sales or transfers to any State or local agency or
nonprofit, charitable, or educational institution for use other
than the generation of electricity for commercial use.
``(D) Sales or transfers to the Department of Energy
research reactor sales program.
``(E) Sales or transfers, at fair market value, for
emergency purposes in the event of a disruption in supply to
commercial nuclear power end users in the United States.
``(F) Sales or transfers, at fair market value, for use in
a commercial reactor in the United States with nonstandard fuel
requirements.
``(G) Sales or transfers provided for under law for use by
the Tennessee Valley Authority in relation to the Department of
Energy's highly enriched uranium or tritium programs.
``(6) For purposes of this subsection, the term `United States
Government' does not include the Tennessee Valley Authority.
``(e) Savings Provision.--Nothing in this subchapter modifies the
terms of the Russian HEU Agreement.
``(f) Services.--Notwithstanding any other provision of this
section, if the Secretary determines that the Corporation has failed,
or may fail, to perform any obligation under the Agreement between the
Department of Energy and the Corporation dated June 17, 2002, and as
amended thereafter, which failure could result in termination of the
Agreement, the Secretary shall notify Congress, in such a manner that
affords Congress an opportunity to comment, prior to a determination by
the Secretary whether termination, waiver, or modification of the
Agreement is required. The Secretary is authorized to take such action
as he determines necessary under the Agreement to terminate, waive, or
modify provisions of the Agreement to achieve its purposes.''.
(b) Report.--Not later than 3 years after the date of enactment of
this Act, the Secretary of Energy shall report to Congress on the
implementation of this section. The report shall include a discussion
of available excess uranium inventories; all sales or transfers made by
the United States Government; the impact of such sales or transfers on
the domestic uranium industry, the spot market uranium price, and the
national security interests of the United States; and any steps taken
to remediate any adverse impacts of such sales or transfers.

SEC. 631. COOPERATIVE RESEARCH AND DEVELOPMENT AND SPECIAL
DEMONSTRATION PROJECTS FOR THE URANIUM MINING INDUSTRY.

(a) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Energy $10,000,000 for each of fiscal
years 2004, 2005, and 2006 for--
(1) cooperative, cost-shared agreements between the
Department of Energy and domestic uranium producers to
identify, test, and develop improved in situ leaching mining
technologies, including low-cost environmental restoration
technologies that may be applied to sites after completion of
in situ leaching operations; and
(2) funding for competitively selected demonstration
projects with domestic uranium producers relating to--
(A) enhanced production with minimal environmental
impacts;
(B) restoration of well fields; and
(C) decommissioning and decontamination activities.
(b) Domestic Uranium Producer.--For purposes of this section, the
term ``domestic uranium producer'' has the meaning given that term in
section 1018(4) of the Energy Policy Act of 1992 (42 U.S.C. 2296b-
7(4)), except that the term shall not include any producer that has not
produced uranium from domestic reserves on or after July 30, 1998.
(c) Limitation.--No activities funded under this section may be
carried out in the State of New Mexico.

SEC. 632. WHISTLEBLOWER PROTECTION.

(a) Definition of Employer.--Section 211(a)(2) of the Energy
Reorganization Act of 1974 (42 U.S.C. 5851(a)(2)) is amended--
(1) in subparagraph (C), by striking ``and'' at the end;
(2) in subparagraph (D), by striking the period at the end
and inserting ``; and'' and
(3) by adding at the end the following:
``(E) a contractor or subcontractor of the
Commission.''.
(b) De Novo Review.--Subsection (b) of such section 211 is amended
by adding at the end the following new paragraph:
``(4) If the Secretary has not issued a final decision
within 540 days after the filing of a complaint under paragraph
(1), and there is no showing that such delay is due to the bad
faith of the person seeking relief under this paragraph, such
person may bring an action at law or equity for de novo review
in the appropriate district court of the United States, which
shall have jurisdiction over such an action without regard to
the amount in controversy.''.

SEC. 633. MEDICAL ISOTOPE PRODUCTION.

Section 134 of the Atomic Energy Act of 1954 (42 U.S.C. 2160d) is
amended--
(1) in subsection a., by striking ``a. The Commission'' and
inserting ``a. In General.--Except as provided in subsection
b., the Commission'';
(2) by redesignating subsection b. as subsection c.; and
(3) by inserting after subsection a. the following:
``b. Medical Isotope Production.--
``(1) Definitions.--In this subsection:
``(A) Highly enriched uranium.--The term `highly
enriched uranium' means uranium enriched to include
concentration of U-235 above 20 percent.
``(B) Medical isotope.--The term `medical isotope'
includes Molybdenum 99, Iodine 131, Xenon 133, and
other radioactive materials used to produce a
radiopharmaceutical for diagnostic, therapeutic
procedures or for research and development.
``(C) Radiopharmaceutical.--The term
`radiopharmaceutical' means a radioactive isotope
that--
``(i) contains byproduct material combined
with chemical or biological material; and
``(ii) is designed to accumulate
temporarily in a part of the body for
therapeutic purposes or for enabling the
production of a useful image for use in a
diagnosis of a medical condition.
``(D) Recipient country.--The term `recipient
country' means Canada, Belgium, France, Germany, and
the Netherlands.
``(2) Licenses.--The Commission may issue a license
authorizing the export (including shipment to and use at
intermediate and ultimate consignees specified in the license)
to a recipient country of highly enriched uranium for medical
isotope production if, in addition to any other requirements of
this Act (except subsection a.), the Commission determines
that--
``(A) a recipient country that supplies an
assurance letter to the United States Government in
connection with the consideration by the Commission of
the export license application has informed the United
States Government that any intermediate consignees and
the ultimate consignee specified in the application are
required to use the highly enriched uranium solely to
produce medical isotopes; and
``(B) the highly enriched uranium for medical
isotope production will be irradiated only in a reactor
in a recipient country that--
``(i) uses an alternative nuclear reactor
fuel; or
``(ii) is the subject of an agreement with
the United States Government to convert to an
alternative nuclear reactor fuel when
alternative nuclear reactor fuel can be used in
the reactor.
``(3) Review of physical protection requirements.--
``(A) In general.--The Commission shall review the
adequacy of physical protection requirements that, as
of the date of an application under paragraph (2), are
applicable to the transportation and storage of highly
enriched uranium for medical isotope production or
control of residual material after irradiation and
extraction of medical isotopes.
``(B) Imposition of additional requirements.--If
the Commission determines that additional physical
protection requirements are necessary (including a
limit on the quantity of highly enriched uranium that
may be contained in a single shipment), the Commission
shall impose such requirements as license conditions or
through other appropriate means.
``(4) First report to congress.--
``(A) NAS study.--The Secretary shall enter into an
arrangement with the National Academy of Sciences to
conduct a study to determine--
``(i) the feasibility of procuring supplies
of medical isotopes from commercial sources
that do not use highly enriched uranium;
``(ii) the current and projected demand and
availability of medical isotopes in regular
current domestic use;
``(iii) the progress that is being made by
the Department of Energy and others to
eliminate all use of highly enriched uranium in
reactor fuel, reactor targets, and medical
isotope production facilities; and
``(iv) the potential cost differential in
medical isotope production in the reactors and
target processing facilities if the products
were derived from production systems that do
not involve fuels and targets with highly
enriched uranium.
``(B) Feasibility.--For the purpose of this
subsection, the use of low enriched uranium to produce
medical isotopes shall be determined to be feasible
if--
``(i) low enriched uranium targets have
been developed and demonstrated for use in the
reactors and target processing facilities that
produce significant quantities of medical
isotopes to serve United States needs for such
isotopes;
``(ii) sufficient quantities of medical
isotopes are available from low enriched
uranium targets and fuel to meet United States
domestic needs; and
``(iii) the average anticipated total cost
increase from production of medical isotopes in
such facilities without use of highly enriched
uranium is less than 10 percent.
``(C) Report by the secretary.--Not later than 5
years after the date of enactment of the Energy Policy
Act of 2003, the Secretary shall submit to Congress a
report that--
``(i) contains the findings of the National
Academy of Sciences made in the study under
subparagraph (A); and
``(ii) discloses the existence of any
commitments from commercial producers to
provide domestic requirements for medical
isotopes without use of highly enriched uranium
consistent with the feasibility criteria
described in subparagraph (B) not later than
the date that is 4 years after the date of
submission of the report.
``(5) Second report to congress.--If the study of the
National Academy of Sciences determines under paragraph
(4)(A)(i) that the procurement of supplies of medical isotopes
from commercial sources that do not use highly enriched uranium
is feasible, but the Secretary is unable to report the
existence of commitments under paragraph (4)(C)(ii), not later
than the date that is 6 years after the date of enactment of
the Energy Policy Act of 2003, the Secretary shall submit to
Congress a report that describes options for developing
domestic supplies of medical isotopes in quantities that are
adequate to meet domestic demand without the use of highly
enriched uranium consistent with the cost increase described in
paragraph (4)(B)(iii).
``(6) Certification.--At such time as commercial facilities
that do not use highly enriched uranium are capable of meeting
domestic requirements for medical isotopes, within the cost
increase described in paragraph (4)(B)(iii) and without
impairing the reliable supply of medical isotopes for domestic
utilization, the Secretary shall submit to Congress a
certification to that effect.
``(7) Sunset provision.--After the Secretary submits a
certification under paragraph (6), the Commission shall, by
rule, terminate its review of export license applications under
this subsection.''.

SEC. 634. FERNALD BYPRODUCT MATERIAL.

Notwithstanding any other law, the material in the concrete silos
at the Fernald uranium processing facility managed on the date of
enactment of this Act by the Department of Energy shall be considered
byproduct material (as defined by section 11 e.(2) of the Atomic Energy
Act of 1954 (42 U.S.C. 2014(e)(2))). The Department of Energy may
dispose of the material in a facility regulated by the Nuclear
Regulatory Commission or by an Agreement State. If the Department of
Energy disposes of the material in such a facility, the Nuclear
Regulatory Commission or the Agreement State shall regulate the
material as byproduct material under that Act. This material shall
remain subject to the jurisdiction of the Department of Energy until it
is received at a commercial, Nuclear Regulatory Commission-licensed, or
Agreement State-licensed facility, at which time the material shall be
subject to the health and safety requirements of the Nuclear Regulatory
Commission or the Agreement State with jurisdiction over the disposal
site.

SEC. 635. SAFE DISPOSAL OF GREATER-THAN-CLASS C RADIOACTIVE WASTE.

(a) Designation of Responsibility.--The Secretary of Energy shall
designate an Office within the Department of Energy to have the
responsibility for activities needed to develop a new, or use an
existing, facility for safely disposing of all low-level radioactive
waste with concentrations of radionuclides that exceed the limits
established by the Nuclear Regulatory Commission for Class C
radioactive waste (referred to in this section as ``GTCC waste'').
(b) Comprehensive Plan.--The Secretary of Energy shall develop a
comprehensive plan for permanent disposal of GTCC waste which includes
plans for a disposal facility. This plan shall be transmitted to
Congress in a series of reports, including the following:
(1) Report on short-term plan.--Not later than 180 days
after the date of enactment of this Act, the Secretary of
Energy shall submit to Congress a plan describing the
Secretary's operational strategy for continued recovery and
storage of GTCC waste until a permanent disposal facility is
available.
(2) Update of 1987 report.--
(A) In general.--Not later than 1 year after the
date of enactment of this Act, the Secretary of Energy
shall submit to Congress an update of the Secretary's
February 1987 report submitted to Congress that made
comprehensive recommendations for the disposal of GTCC
waste.
(B) Contents.--The update under this paragraph
shall contain--
(i) a detailed description and
identification of the GTCC waste that is to be
disposed;
(ii) a description of current domestic and
international programs, both Federal and
commercial, for management and disposition of
GTCC waste;
(iii) an identification of the Federal and
private options and costs for the safe disposal
of GTCC waste;
(iv) an identification of the options for
ensuring that, wherever possible, generators
and users of GTCC waste bear all reasonable
costs of waste disposal;
(v) an identification of any new statutory
authority required for disposal of GTCC waste;
and
(vi) in coordination with the Environmental
Protection Agency and the Nuclear Regulatory
Commission, an identification of any new
regulatory guidance needed for the disposal of
GTCC waste.
(3) Report on cost and schedule for completion of
environmental impact statement and record of decision.--Not
later than 180 days after the date of submission of the update
required under paragraph (2), the Secretary of Energy shall
submit to Congress a report containing an estimate of the cost
and schedule to complete a draft and final environmental impact
statement and to issue a record of decision for a permanent
disposal facility, utilizing either a new or existing facility,
for GTCC waste.

SEC. 636. PROHIBITION ON NUCLEAR EXPORTS TO COUNTRIES THAT SPONSOR
TERRORISM.

(a) In General.--Section 129 of the Atomic Energy Act of 1954 (42
U.S.C. 2158) is amended--
(1) by inserting ``a.'' before ``No nuclear materials and
equipment''; and
(2) by adding at the end the following new subsection:
``b.(1) Notwithstanding any other provision of law, including
specifically section 121 of this Act, and except as provided in
paragraphs (2) and (3), no nuclear materials and equipment or sensitive
nuclear technology, including items and assistance authorized by
section 57 b. of this Act and regulated under part 810 of title 10,
Code of Federal Regulations, and nuclear-related items on the Commerce
Control List maintained under part 774 of title 15 of the Code of
Federal Regulations, shall be exported or reexported, or transferred or
retransferred whether directly or indirectly, and no Federal agency
shall issue any license, approval, or authorization for the export or
reexport, or transfer, or retransfer, whether directly or indirectly,
of these items or assistance (as defined in this paragraph) to any
country whose government has been identified by the Secretary of State
as engaged in state sponsorship of terrorist activities (specifically
including any country the government of which has been determined by
the Secretary of State under section 620A(a) of the Foreign Assistance
Act of 1961 (22 U.S.C. 2371(a)), section 6(j)(1) of the Export
Administration Act of 1979 (50 U.S.C. App. 2405(j)(1)), or section
40(d) of the Arms Export Control Act (22 U.S.C. 2780(d)) to have
repeatedly provided support for acts of international terrorism).
``(2) This subsection shall not apply to exports, reexports,
transfers, or retransfers of radiation monitoring technologies,
surveillance equipment, seals, cameras, tamper-indication devices,
nuclear detectors, monitoring systems, or equipment necessary to safely
store, transport, or remove hazardous materials, whether such items,
services, or information are regulated by the Department of Energy, the
Department of Commerce, or the Nuclear Regulatory Commission, except to
the extent that such technologies, equipment, seals, cameras, devices,
detectors, or systems are available for use in the design or
construction of nuclear reactors or nuclear weapons.
``(3) The President may waive the application of paragraph (1) to a
country if the President determines and certifies to Congress that the
waiver will not result in any increased risk that the country receiving
the waiver will acquire nuclear weapons, nuclear reactors, or any
materials or components of nuclear weapons and--
``(A) the government of such country has not within the
preceding 12-month period willfully aided or abetted the
international proliferation of nuclear explosive devices to
individuals or groups or willfully aided and abetted an
individual or groups in acquiring unsafeguarded nuclear
materials;
``(B) in the judgment of the President, the government of
such country has provided adequate, verifiable assurances that
it will cease its support for acts of international terrorism;
``(C) the waiver of that paragraph is in the vital national
security interest of the United States; or
``(D) such a waiver is essential to prevent or respond to a
serious radiological hazard in the country receiving the waiver
that may or does threaten public health and safety.''.
(b) Applicability to Exports Approved for Transfer but not
Transferred.--Subsection b. of section 129 of Atomic Energy Act of
1954, as added by subsection (a) of this section, shall apply with
respect to exports that have been approved for transfer as of the date
of the enactment of this Act but have not yet been transferred as of
that date.

SEC. 637. URANIUM ENRICHMENT FACILITIES.

(a) Nuclear Regulatory Commission Review of Applications.--
(1) In general.--In order to facilitate a timely review and
approval of an application in a proceeding for a license for
the construction and operation of a uranium enrichment facility
under sections 53 and 63 of the Atomic Energy Act of 1954 (42
U.S.C. 2073, 2093) (referred to in this subsection as a
``covered proceeding''), the Nuclear Regulatory Commission
shall, not later than 30 days after the receipt of the
application, establish, by order, the schedule for the conduct
of any hearing that may be requested by any person whose
interest may be affected by the covered proceeding.
(2) Final agency decision.--The schedule shall provide that
a final decision by the Commission on the application shall be
made not later than the date that is 2 years after the date of
submission of the application by the applicant.
(3) Compliance with schedule.--
(A) In general.--The Commission shall establish a
process to assess compliance with the schedule
established under paragraph (1) on an ongoing basis
during the course of the review of the application,
including ensuring compliance with schedules and
milestones that are established for the conduct of any
covered proceeding by the Atomic Safety and Licensing
Board.
(B) Report.--The Commission shall submit to
Congress on a bimonthly basis a report describing the
status of compliance with the schedule established
under paragraph (1), including a description of the
status of actions required to be completed pursuant to
the schedule by officers and employees of--
(i) the Commission in undertaking the
safety and environmental review of
applications; and
(ii) the Atomic Safety and Licensing Board
in the conduct of any covered proceeding.
(4) Environmental review.--
(A) In general.--In evaluating an application under
the National Environmental Policy Act of 1969 (42
U.S.C. 4321 et seq.) for licensing of a facility in a
covered proceeding, the Commission shall limit the
consideration of need to whether the licensing of the
facility would advance the national interest of
encouraging in the United States--
(i) additional secure, reliable uranium
enrichment capacity;
(ii) diverse supplies and suppliers of
uranium enrichment capacity; and
(iii) the deployment of advanced centrifuge
enrichment technology.
(B) Comment.--In carrying out subparagraph (A), the
Commission shall consider and solicit the views of
other affected Federal agencies.
(C) Atomic safety and licensing board.--
(i) In general.--Except as provided in
clause (ii), in any covered proceeding, the
Commission shall allow the litigation and
resolution by the Atomic Safety and Licensing
Board of issues arising under the National
Environmental Policy Act of 1969 (42 U.S.C.
4321 et seq.), on the basis of information
submitted by the applicant in its environmental
report, prior to publication of any required
environmental impact statement.
(ii) Exceptions.--On the publication of any
required environmental impact statement, issues
may be proffered for resolution by the Atomic
Safety and Licensing Board only if information
or conclusions in the environmental impact
statement differ significantly from the
information or conclusions in the environmental
report submitted by the applicant.
(D) Environmental justice.--In a covered
proceeding, the Commission shall apply the criteria in
Appendix C of the final report entitled ``Environmental
Review Guidance for Licensing Actions Associated with
NMSS Programs'' (NUREG-1748), published in August 2003,
in any required review of environmental justice.
(5) Low-level waste.--In any covered proceeding, the
Commission shall--
(A) deem the obligation of the Secretary of Energy
pursuant to section 3113 of the USEC Privitization Act
(42 U.S.C. 2297 h-11) to constitute a plausible
strategy with regard to the disposition of depleted
uranium generated by such facility; and
(B) treat any residual material that remains
following the extraction of any usable resource value
from depleted uranium as low-level radioactive waste
under part 61 of title 10, Code of Federal Regulations.
(6) Adjudicatory hearing on licensing of uranium enrichment
facilities.--Section 193(b) of the Atomic Energy Act of 1954
(42 U.S.C. 2243(b)) is amended by striking paragraph (2) and
inserting the following:
``(2) Timing.--On the issuance of a final decision on the
application by the Atomic Safety and Licensing Board, the
Commission shall issue and make immediately effective any
license for the construction and operation of a uranium
enrichment facility under sections 53 and 63, on a
determination by the Commission that the issuance of the
license would not cause irreparable injury to the public health
and safety or the common defense and security, notwithstanding
the pendency before the Commission of any appeal or petition
for review of any decision of the Atomic Safety and Licensing
Board.''.
(b) Department of Energy Responsibilities.--
(1) In general.--Not later than 180 days after a request is
made to the Secretary of Energy by an applicant for or
recipient of a license for a uranium enrichment facility under
section 53, 63, or 193 of the Atomic Energy Act of 1954 ((42
U.S.C. 2073, 2093, 2243), the Secretary shall enter into a
memorandum of agreement with the applicant or licensee that
provides a schedule for the transfer to the Secretary, not
later than 5 years after the generation of any depleted uranium
hexafluoride, of title and possession of the depleted uranium
hexafluoride to be generated by the applicant or licensee.
(2) Cost.--
(A) In general.--Subject to subparagraphs (B) and
(C), the memorandum of agreement shall specify the cost
to be assessed by the Secretary for the transfer to the
Secretary of the depleted uranium hexafluoride.
(B) Nondiscriminatory basis.--The cost shall be
determined by the Secretary on a nondiscriminatory
basis.
(C) Cost.--Taking into account the physical and
chemical characteristics of such depleted uranium
hexafluoride, the cost shall not exceed the cost
assessed by the Secretary for the acceptance of
depleted uranium hexafluoride under--
(i) the memorandum of agreement between the
United States Department of Energy and the
United States Enrichment Corporation Relating
to Depleted Uranium, dated June 30, 1998; and
(ii) the Agreement Between the U.S.
Department of Energy and USEC Inc., dated June
17, 2002.

SEC. 638. NATIONAL URANIUM STOCKPILE.

(a) Stockpile Creation.--The Secretary of Energy may create a
national low-enriched uranium stockpile with the goals to--
(1) enhance national energy security; and
(2) reduce global proliferation threats.
(b) Source of Material.--The Secretary shall obtain material for
the stockpile from--
(1) material derived from blend-down of Russian highly
enriched uranium derived from weapons materials; and
(2) domestically mined and enriched uranium.
(c) Limitation on Sales or Transfers.--Sales or transfer of
materials in the stockpile shall occur pursuant to section 3112 of the
USEC Privitization Act (42 U.S.C. 2297h-10), as amended by section 630
of this Act.

Subtitle C--Advanced Reactor Hydrogen Cogeneration Project

SEC. 651. PROJECT ESTABLISHMENT.

The Secretary of Energy (in this subtitle referred to as the
``Secretary'') is directed to establish an Advanced Reactor Hydrogen
Cogeneration Project.

SEC. 652. PROJECT DEFINITION.

The project shall consist of the research, development, design,
construction, and operation of a hydrogen production cogeneration
research facility that, relative to the current commercial reactors,
enhances safety features, reduces waste production, enhances thermal
efficiencies, increases proliferation resistance, and has the potential
for improved economics and physical security in reactor siting. This
facility shall be constructed so as to enable research and development
on advanced reactors of the type selected and on alternative approaches
for reactor-based production of hydrogen.

SEC. 653. PROJECT MANAGEMENT.

(a) Management.--The project shall be managed within the Department
by the Office of Nuclear Energy, Science, and Technology.
(b) Lead Laboratory.--The lead laboratory for the project,
providing the site for the reactor construction, shall be the Idaho
National Engineering and Environmental Laboratory (in this subtitle
referred to as ``INEEL'').
(c) Steering Committee.--The Secretary shall establish a national
steering committee with membership from the national laboratories,
universities, and industry to provide advice to the Secretary and the
Director of the Office of Nuclear Energy, Science, and Technology on
technical and program management aspects of the project.
(d) Collaboration.--Project activities shall be conducted at INEEL,
other national laboratories, universities, domestic industry, and
international partners.

SEC. 654. PROJECT REQUIREMENTS.

(a) Research and Development.--
(1) In general.--The project shall include planning,
research and development, design, and construction of an
advanced, next-generation, nuclear energy system suitable for
enabling further research and development on advanced reactor
technologies and alternative approaches for reactor-based
generation of hydrogen.
(2) Reactor test capabilities at ineel.--The project shall
utilize, where appropriate, extensive reactor test capabilities
resident at INEEL.
(3) Alternatives.--The project shall be designed to explore
technical, environmental, and economic feasibility of
alternative approaches for reactor-based hydrogen production.
(4) Industrial lead.--The industrial lead for the project
shall be a company incorporated in the United States.
(b) International Collaboration.--
(1) In general.--The Secretary shall seek international
cooperation, participation, and financial contribution in this
project.
(2) Assistance from international partners.--The Secretary
may contract for assistance from specialists or facilities from
member countries of the Generation IV International Forum, the
Russian Federation, or other international partners where such
specialists or facilities provide access to cost-effective and
relevant skills or test capabilities.
(3) Generation iv international forum.--International
activities shall be coordinated with the Generation IV
International Forum.
(4) Generation iv nuclear energy systems program.--The
Secretary may combine this project with the Generation IV
Nuclear Energy Systems Program.
(c) Demonstration.--The overall project, which may involve
demonstration of selected project objectives in a partner nation, must
demonstrate both electricity and hydrogen production and may provide
flexibility, where technically and economically feasible in the design
and construction, to enable tests of alternative reactor core and
cooling configurations.
(d) Partnerships.--The Secretary shall establish cost-shared
partnerships with domestic industry or international participants for
the research, development, design, construction, and operation of the
research facility, and preference in determining the final project
structure shall be given to an overall project which retains United
States leadership while maximizing cost sharing opportunities and
minimizing Federal funding responsibilities.
(e) Target Date.--The Secretary shall select technologies and
develop the project to provide initial testing of either hydrogen
production or electricity generation by 2010, or provide a report to
Congress explaining why this date is not feasible.
(f) Waiver of Construction Timelines.--The Secretary is authorized
to conduct the Advanced Reactor Hydrogen Cogeneration Project without
the constraints of DOE Order 413.3, relating to program and project
management for the acquisition of capital assets, as necessary to meet
the specified operational date.
(g) Competition.--The Secretary may fund up to 2 teams for up to 1
year to develop detailed proposals for competitive evaluation and
selection of a single proposal and concept for further progress. The
Secretary shall define the format of the competitive evaluation of
proposals.
(h) Use of Facilities.--Research facilities in industry, national
laboratories, or universities either within the United States or with
cooperating international partners may be used to develop the enabling
technologies for the research facility. Utilization of domestic
university-based facilities shall be encouraged to provide educational
opportunities for student development.
(i) Role of Nuclear Regulatory Commission.--
(1) In general.--The Nuclear Regulatory Commission shall
have licensing and regulatory authority for any reactor
authorized under this subtitle, pursuant to section 202 of the
Energy Reorganization Act of 1974 (42 U.S.C. 5842).
(2) Risk-based criteria.--The Secretary shall seek active
participation of the Nuclear Regulatory Commission throughout
the project to develop risk-based criteria for any future
commercial development of a similar reactor architecture.
(j) Report.--The Secretary shall develop and transmit to Congress a
comprehensive project plan not later than April 30, 2004. The project
plan shall be updated annually with each annual budget submission.

SEC. 655. AUTHORIZATION OF APPROPRIATIONS.

(a) Research, Development, and Design Programs.--The following sums
are authorized to be appropriated to the Secretary for all activities
under this subtitle except for construction activities described in
subsection (b):
(1) For fiscal year 2004, $35,000,000.
(2) For each of fiscal years 2005 through 2008,
$150,000,000.
(3) For fiscal years beyond 2008, such sums as are
necessary.
(b) Construction.--There are authorized to be appropriated to the
Secretary for all project-related construction activities, to be
available until expended, $500,000,000.

Subtitle D--Nuclear Security

SEC. 661. NUCLEAR FACILITY THREATS.

(a) Study.--The President, in consultation with the Nuclear
Regulatory Commission (referred to in this subtitle as the
``Commission'') and other appropriate Federal, State, and local
agencies and private entities, shall conduct a study to identify the
types of threats that pose an appreciable risk to the security of the
various classes of facilities licensed by the Commission under the
Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.). Such study shall
take into account, but not be limited to--
(1) the events of September 11, 2001;
(2) an assessment of physical, cyber, biochemical, and
other terrorist threats;
(3) the potential for attack on facilities by multiple
coordinated teams of a large number of individuals;
(4) the potential for assistance in an attack from several
persons employed at the facility;
(5) the potential for suicide attacks;
(6) the potential for water-based and air-based threats;
(7) the potential use of explosive devices of considerable
size and other modern weaponry;
(8) the potential for attacks by persons with a
sophisticated knowledge of facility operations;
(9) the potential for fires, especially fires of long
duration;
(10) the potential for attacks on spent fuel shipments by
multiple coordinated teams of a large number of individuals;
(11) the adequacy of planning to protect the public health
and safety at and around nuclear facilities, as appropriate, in
the event of a terrorist attack against a nuclear facility; and
(12) the potential for theft and diversion of nuclear
materials from such facilities.
(b) Summary and Classification Report.--Not later than 180 days
after the date of the enactment of this Act, the President shall
transmit to Congress and the Commission a report--
(1) summarizing the types of threats identified under
subsection (a); and
(2) classifying each type of threat identified under
subsection (a), in accordance with existing laws and
regulations, as either--
(A) involving attacks and destructive acts,
including sabotage, directed against the facility by an
enemy of the United States, whether a foreign
government or other person, or otherwise falling under
the responsibilities of the Federal Government; or
(B) involving the type of risks that Commission
licensees should be responsible for guarding against.
(c) Federal Action Report.--Not later than 90 days after the date
on which a report is transmitted under subsection (b), the President
shall transmit to Congress a report on actions taken, or to be taken,
to address the types of threats identified under subsection (b)(2)(A),
including identification of the Federal, State, and local agencies
responsible for carrying out the obligations and authorities of the
United States. Such report may include a classified annex, as
appropriate.
(d) Regulations.--Not later than 180 days after the date on which a
report is transmitted under subsection (b), the Commission may revise,
by rule, the design basis threats issued before the date of enactment
of this section as the Commission considers appropriate based on the
summary and classification report.
(e) Physical Security Program.--The Commission shall establish an
operational safeguards response evaluation program that ensures that
the physical protection capability and operational safeguards response
for sensitive nuclear facilities, as determined by the Commission
consistent with the protection of public health and the common defense
and security, shall be tested periodically through Commission approved
or designed, observed, and evaluated force-on-force exercises to
determine whether the ability to defeat the design basis threat is
being maintained. For purposes of this subsection, the term ``sensitive
nuclear facilities'' includes at a minimum commercial nuclear power
plants and category I fuel cycle facilities.
(f) Control of Information.--Notwithstanding any other provision of
law, the Commission may undertake any rulemaking under this subtitle in
a manner that will fully protect safeguards and classified national
security information.
(g) Federal Security Coordinators.--
(1) Regional offices.--Not later than 18 months after the
date of enactment of this Act, the Commission shall assign a
Federal security coordinator, under the employment of the
Commission, to each region of the Commission.
(2) Responsibilities.--The Federal security coordinator
shall be responsible for--
(A) communicating with the Commission and other
Federal, State, and local authorities concerning
threats, including threats against such classes of
facilities as the Commission determines to be
appropriate;
(B) ensuring that such classes of facilities as the
Commission determines to be appropriate maintain
security consistent with the security plan in
accordance with the appropriate threat level; and
(C) assisting in the coordination of security
measures among the private security forces at such
classes of facilities as the Commission determines to
be appropriate and Federal, State, and local
authorities, as appropriate.
(h) Training Program.--The President shall establish a program to
provide technical assistance and training to Federal agencies, the
National Guard, and State and local law enforcement and emergency
response agencies in responding to threats against a designated nuclear
facility.

SEC. 662. FINGERPRINTING FOR CRIMINAL HISTORY RECORD CHECKS.

(a) In General.--Subsection a. of section 149 of the Atomic Energy
Act of 1954 (42 U.S.C. 2169(a)) is amended--
(1) by striking ``a. The Nuclear'' and all that follows
through ``section 147.'' and inserting the following:
``a. In General.--
``(1) Requirements.--
``(A) In general.--The Commission shall require
each individual or entity--
``(i) that is licensed or certified to
engage in an activity subject to regulation by
the Commission;
``(ii) that has filed an application for a
license or certificate to engage in an activity
subject to regulation by the Commission; or
``(iii) that has notified the Commission,
in writing, of an intent to file an application
for licensing, certification, permitting, or
approval of a product or activity subject to
regulation by the Commission,
to fingerprint each individual described in
subparagraph (B) before the individual is permitted
unescorted access or access, whichever is applicable,
as described in subparagraph (B).
``(B) Individuals required to be fingerprinted.--
The Commission shall require to be fingerprinted each
individual who--
``(i) is permitted unescorted access to--
``(I) a utilization facility; or
``(II) radioactive material or
other property subject to regulation by
the Commission that the Commission
determines to be of such significance
to the public health and safety or the
common defense and security as to
warrant fingerprinting and background
checks; or
``(ii) is permitted access to safeguards
information under section 147.'';
(2) by striking ``All fingerprints obtained by a licensee
or applicant as required in the preceding sentence'' and
inserting the following:
``(2) Submission to the attorney general.--All fingerprints
obtained by an individual or entity as required in paragraph
(1)'';
(3) by striking ``The costs of any identification and
records check conducted pursuant to the preceding sentence
shall be paid by the licensee or applicant.'' and inserting the
following:
``(3) Costs.--The costs of any identification and records
check conducted pursuant to paragraph (1) shall be paid by the
individual or entity required to conduct the fingerprinting
under paragraph (1)(A).''; and
(4) by striking ``Notwithstanding any other provision of
law, the Attorney General may provide all the results of the
search to the Commission, and, in accordance with regulations
prescribed under this section, the Commission may provide such
results to licensee or applicant submitting such
fingerprints.'' and inserting the following:
``(4) Provision to individual or entity required to conduct
fingerprinting.--Notwithstanding any other provision of law,
the Attorney General may provide all the results of the search
to the Commission, and, in accordance with regulations
prescribed under this section, the Commission may provide such
results to the individual or entity required to conduct the
fingerprinting under paragraph (1)(A).''.
(b) Administration.--Subsection c. of section 149 of the Atomic
Energy Act of 1954 (42 U.S.C. 2169(c)) is amended--
(1) by striking ``, subject to public notice and comment,
regulations--'' and inserting ``requirements--''; and
(2) by striking, in paragraph (2)(B), ``unescorted access
to the facility of a licensee or applicant'' and inserting
``unescorted access to a utilization facility, radioactive
material, or other property described in subsection a.(1)(B)''.
(c) Biometric Methods.--Subsection d. of section 149 of the Atomic
Energy Act of 1954 (42 U.S.C. 2169(d)) is redesignated as subsection
e., and the following is inserted after subsection c.:
``d. Use of Other Biometric Methods.--The Commission may satisfy
any requirement for a person to conduct fingerprinting under this
section using any other biometric method for identification approved
for use by the Attorney General, after the Commission has approved the
alternative method by rule.''.

SEC. 663. USE OF FIREARMS BY SECURITY PERSONNEL OF LICENSEES AND
CERTIFICATE HOLDERS OF THE COMMISSION.

Section 161 of the Atomic Energy Act of 1954 (42 U.S.C. 2201) is
amended by adding at the end the following subsection:
``(z)(1) notwithstanding section 922(o), (v), and (w) of
title 18, United States Code, or any similar provision of any
State law or any similar rule or regulation of a State or any
political subdivision of a State prohibiting the transfer or
possession of a handgun, a rifle or shotgun, a short-barreled
shotgun, a short-barreled rifle, a machinegun, a semiautomatic
assault weapon, ammunition for the foregoing, or a large
capacity ammunition feeding device, authorize security
personnel of licensees and certificate holders of the
Commission (including employees of contractors of licensees and
certificate holders) to receive, possess, transport, import,
and use 1 or more of those weapons, ammunition, or devices, if
the Commission determines that--
``(A) such authorization is necessary to the
discharge of the security personnel's official duties;
and
``(B) the security personnel--
``(i) are not otherwise prohibited from
possessing or receiving a firearm under Federal
or State laws pertaining to possession of
firearms by certain categories of persons;
``(ii) have successfully completed
requirements established through guidelines
implementing this subsection for training in
use of firearms and tactical maneuvers;
``(iii) are engaged in the protection of--
``(I) facilities owned or operated
by a Commission licensee or certificate
holder that are designated by the
Commission; or
``(II) radioactive material or
other property owned or possessed by a
person that is a licensee or
certificate holder of the Commission,
or that is being transported to or from
a facility owned or operated by such a
licensee or certificate holder, and
that has been determined by the
Commission to be of significance to the
common defense and security or public
health and safety; and
``(iv) are discharging their official
duties.
``(2) Such receipt, possession, transportation,
importation, or use shall be subject to--
``(A) chapter 44 of title 18, United States Code,
except for section 922(a)(4), (o), (v), and (w);
``(B) chapter 53 of title 26, United States Code,
except for section 5844; and
``(C) a background check by the Attorney General,
based on fingerprints and including a check of the
system established under section 103(b) of the Brady
Handgun Violence Prevention Act (18 U.S.C. 922 note) to
determine whether the person applying for the authority
is prohibited from possessing or receiving a firearm
under Federal or State law.
``(3) This subsection shall become effective upon the
issuance of guidelines by the Commission, with the approval of
the Attorney General, to govern the implementation of this
subsection.
``(4) In this subsection, the terms `handgun', `rifle',
`shotgun', `firearm', `ammunition', `machinegun',
`semiautomatic assault weapon', `large capacity ammunition
feeding device', `short-barreled shotgun', and `short-barreled
rifle' shall have the meanings given those terms in section
921(a) of title 18, United States Code.''.

SEC. 664. UNAUTHORIZED INTRODUCTION OF DANGEROUS WEAPONS.

Section 229 a. of the Atomic Energy Act of 1954 (42 U.S.C.
2278a(a)) is amended in the first sentence by inserting ``or subject to
the licensing authority of the Commission or to certification by the
Commission under this Act or any other Act'' before the period at the
end.

SEC. 665. SABOTAGE OF NUCLEAR FACILITIES OR FUEL.

(a) In General.--Section 236 a. of the Atomic Energy Act of 1954
(42 U.S.C. 2284(a)) is amended--
(1) in paragraph (2), by striking ``storage facility'' and
inserting ``storage, treatment, or disposal facility'';
(2) in paragraph (3)--
(A) by striking ``such a utilization facility'' and
inserting ``a utilization facility licensed under this
Act''; and
(B) by striking ``or'' at the end;
(3) in paragraph (4)--
(A) by striking ``facility licensed'' and inserting
``, uranium conversion, or nuclear fuel fabrication
facility licensed or certified''; and
(B) by striking the comma at the end and inserting
a semicolon; and
(4) by inserting after paragraph (4) the following:
``(5) any production, utilization, waste storage, waste
treatment, waste disposal, uranium enrichment, uranium
conversion, or nuclear fuel fabrication facility subject to
licensing or certification under this Act during construction
of the facility, if the destruction or damage caused or
attempted to be caused could adversely affect public health and
safety during the operation of the facility;
``(6) any primary facility or backup facility from which a
radiological emergency preparedness alert and warning system is
activated; or
``(7) any radioactive material or other property subject to
regulation by the Nuclear Regulatory Commission that, before
the date of the offense, the Nuclear Regulatory Commission
determines, by order or regulation published in the Federal
Register, is of significance to the public health and safety or
to common defense and security,''.
(b) Penalties.--Section 236 of the Atomic Energy Act of 1954 (42
U.S.C. 2284) is amended by striking ``$10,000 or imprisoned for not
more than 20 years, or both, and, if death results to any person, shall
be imprisoned for any term of years or for life'' both places it
appears and inserting ``$1,000,000 or imprisoned for up to life without
parole''.

SEC. 666. SECURE TRANSFER OF NUCLEAR MATERIALS.

(a) Amendment.--Chapter 14 of the Atomic Energy Act of 1954 (42
U.S.C. 2201-2210b) is amended by adding at the end the following new
section:

``SEC. 170C. SECURE TRANSFER OF NUCLEAR MATERIALS.

``a. The Nuclear Regulatory Commission shall establish a system to
ensure that materials described in subsection b., when transferred or
received in the United States by any party pursuant to an import or
export license issued pursuant to this Act, are accompanied by a
manifest describing the type and amount of materials being transferred
or received. Each individual receiving or accompanying the transfer of
such materials shall be subject to a security background check
conducted by appropriate Federal entities.
``b. Except as otherwise provided by the Commission by regulation,
the materials referred to in subsection a. are byproduct materials,
source materials, special nuclear materials, high-level radioactive
waste, spent nuclear fuel, transuranic waste, and low-level radioactive
waste (as defined in section 2(16) of the Nuclear Waste Policy Act of
1982 (42 U.S.C. 10101(16))).''.
(b) Regulations.--Not later than 1 year after the date of the
enactment of this Act, and from time to time thereafter as it considers
necessary, the Nuclear Regulatory Commission shall issue regulations
identifying radioactive materials or classes of individuals that,
consistent with the protection of public health and safety and the
common defense and security, are appropriate exceptions to the
requirements of section 170C of the Atomic Energy Act of 1954, as added
by subsection (a) of this section.
(c) Effective Date.--The amendment made by subsection (a) shall
take effect upon the issuance of regulations under subsection (b),
except that the background check requirement shall become effective on
a date established by the Commission.
(d) Effect on Other Law.--Nothing in this section or the amendment
made by this section shall waive, modify, or affect the application of
chapter 51 of title 49, United States Code, part A of subtitle V of
title 49, United States Code, part B of subtitle VI of title 49, United
States Code, and title 23, United States Code.
(e) Table of Sections Amendment.--The table of sections for chapter
14 of the Atomic Energy Act of 1954 is amended by adding at the end the
following new item:

``Sec. 170C. Secure transfer of nuclear materials.''.

SEC. 667. DEPARTMENT OF HOMELAND SECURITY CONSULTATION.

Before issuing a license for a utilization facility, the Nuclear
Regulatory Commission shall consult with the Department of Homeland
Security concerning the potential vulnerabilities of the location of
the proposed facility to terrorist attack.

SEC. 668. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--There are authorized to be appropriated such sums
as are necessary to carry out this subtitle and the amendments made by
this subtitle.
(b) Aggregate Amount of Charges.--Section 6101(c)(2)(A) of the
Omnibus Budget Reconciliation Act of 1990 (42 U.S.C. 2214(c)(2)(A)) is
amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii), by striking the period at the end and
inserting ``; and'' and
(3) by adding at the end the following:
``(iii) amounts appropriated to the
Commission for homeland security activities of
the Commission for the fiscal year, except for
the costs of fingerprinting and background
checks required by section 149 of the Atomic
Energy Act of 1954 (42 U.S.C. 2169) and the
costs of conducting security inspections.''.

TITLE VII--VEHICLES AND FUELS

Subtitle A--Existing Programs

SEC. 701. USE OF ALTERNATIVE FUELS BY DUAL-FUELED VEHICLES.

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

SEC. 702. NEIGHBORHOOD ELECTRIC VEHICLES.

(a) Amendments.--Section 301 of the Energy Policy Act of 1992 (42
U.S.C. 13211) is amended--
(1) in paragraph (3), by striking ``or a dual fueled
vehicle'' and inserting ``, a dual fueled vehicle, or a
neighborhood electric vehicle'';
(2) in paragraph (13), by striking ``and'' at the end;
(3) in paragraph (14), by striking the period at the end
and inserting ``; and''; and
(4) by adding at the end the following:
``(15) the term `neighborhood electric vehicle' means a
motor vehicle that--
``(A) meets the definition of a low-speed vehicle
(as defined in part 571 of title 49, Code of Federal
Regulations);
``(B) meets the definition of a zero-emission
vehicle (as defined in section 86.1702-99 of title 40,
Code of Federal Regulations);
``(C) meets the requirements of Federal Motor
Vehicle Safety Standard No. 500; and
``(D) has a maximum speed of not greater than 25
miles per hour.''.
(b) Credits.--Notwithstanding section 508 of the Energy Policy Act
of 1992 (42 U.S.C. 13258) or any other provision of law, a neighborhood
electric vehicle shall not be allocated credit as more than 1 vehicle
for purposes of determining compliance with any requirement under title
III or title V of such Act.

SEC. 703. CREDITS FOR MEDIUM AND HEAVY DUTY DEDICATED VEHICLES.

Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 13258) is
amended by adding at the end the following:
``(e) Credit for Purchase of Medium and Heavy Duty Dedicated
Vehicles.--
``(1) Definitions.--In this subsection:
``(A) Heavy duty dedicated vehicle.--The term
`heavy duty dedicated vehicle' means a dedicated
vehicle that has a gross vehicle weight rating of more
than 14,000 pounds.
``(B) Medium duty dedicated vehicle.--The term
`medium duty dedicated vehicle' means a dedicated
vehicle that has a gross vehicle weight rating of more
than 8,500 pounds but not more than 14,000 pounds.
``(2) Credits for medium duty vehicles.--The Secretary
shall issue 2 full credits to a fleet or covered person under
this title, if the fleet or covered person acquires a medium
duty dedicated vehicle.
``(3) Credits for heavy duty vehicles.--The Secretary shall
issue 3 full credits to a fleet or covered person under this
title, if the fleet or covered person acquires a heavy duty
dedicated vehicle.
``(4) Use of credits.--At the request of a fleet or covered
person allocated a credit under this subsection, the Secretary
shall, for the year in which the acquisition of the dedicated
vehicle is made, treat that credit as the acquisition of 1
alternative fueled vehicle that the fleet or covered person is
required to acquire under this title.''.

SEC. 704. INCREMENTAL COST ALLOCATION.

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

SEC. 705. ALTERNATIVE COMPLIANCE AND FLEXIBILITY.

(a) Alternative Compliance.--
(1) In general.--Title V of the Energy Policy Act of 1992
(42 U.S.C. 13251 et seq.) is amended--
(A) by redesignating section 514 as section 515;
and
(B) by inserting after section 513 the following:

``SEC. 514. ALTERNATIVE COMPLIANCE.

``(a) Application for Waiver.--Any covered person subject to
section 501 and any State subject to section 507(o) may petition the
Secretary for a waiver of the applicable requirements of section 501 or
507(o).
``(b) Grant of Waiver.--The Secretary may grant a waiver of the
requirements of section 501 or 507(o) upon a showing that the fleet
owned, operated, leased, or otherwise controlled by the State or
covered person--
``(1) will achieve a reduction in its annual consumption of
petroleum fuels equal to the reduction in consumption of
petroleum that would result from 100 percent compliance with
fuel use requirements in section 501, or, for entities covered
under section 507(o), a reduction equal to the covered State
entity's consumption of alternative fuels if all its
alternative fuel vehicles given credit under section 508 were
to use alternative fuel 100 percent of the time; and
``(2) is in compliance with all applicable vehicle emission
standards established by the Administrator under the Clean Air
Act (42 U.S.C. 7401 et seq.).
``(c) Revocation of Waiver.--The Secretary shall revoke any waiver
granted under this section if the State or covered person fails to
comply with subsection (b).''.
(2) Table of contents amendment.--The table of contents of
the Energy Policy Act of 1992 (42 U.S.C. prec. 13201) is
amended by striking the item relating to section 514 and
inserting the following:

``Sec. 514. Alternative compliance.
``Sec. 515. Authorization of appropriations.''.
(b) Credits.--Section 508 of the Energy Policy Act of 1992 (42
U.S.C. 13258) (as amended by section 703) is amended--
(1) by redesignating subsections (b) through (e) as
subsections (c) through (f), respectively;
(2) by striking subsection (a) and inserting the following:
``(a) In General.--The Secretary shall allocate a credit to a fleet
or covered person that is required to acquire an alternative fueled
vehicle under this title, if that fleet or person acquires an
alternative fueled vehicle--
``(1) in excess of the number that fleet or person is
required to acquire under this title;
``(2) before the date on which that fleet or person is
required to acquire an alternative fueled vehicle under this
title; or
``(3) that is eligible to receive credit under subsection
(b).
``(b) Maximum Available Power.--The Secretary shall allocate credit
to a fleet under subsection (a)(3) for the acquisition by the fleet of
a hybrid vehicle as follows:
``(1) For a hybrid vehicle with at least 4 percent but less
than 10 percent maximum available power, the Secretary shall
allocate 25 percent of 1 credit.
``(2) For a hybrid vehicle with at least 10 percent but
less than 20 percent maximum available power, the Secretary
shall allocate 50 percent of 1 credit.
``(3) For a hybrid vehicle with at least 20 percent but
less than 30 percent maximum available power, the Secretary
shall allocate 75 percent of 1 credit.
``(4) For a hybrid vehicle with 30 percent or more maximum
available power, the Secretary shall allocate 1 credit.''; and
(3) by adding at the end the following:
``(g) Credit for Investment in Alternative Fuel Infrastructure.--
``(1) Definition of qualifying infrastructure.--In this
subsection, the term `qualifying infrastructure' means--
``(A) equipment required to refuel or recharge
alternative fueled vehicles;
``(B) facilities or equipment required to maintain,
repair, or operate alternative fueled vehicles; and
``(C) such other activities as the Secretary
considers to constitute an appropriate expenditure in
support of the operation, maintenance, or further
widespread adoption of or utilization of alternative
fueled vehicles.
``(2) Issuance of credits.--The Secretary shall issue a
credit to a fleet or covered person under this title for
investment in qualifying infrastructure if the qualifying
infrastructure is open to the general public during regular
business hours.
``(3) Amount.--For the purpose of credits under this
subsection--
``(A) 1 credit shall be equal to a minimum
investment of $25,000 in cash or equivalent
expenditure, as determined by the Secretary; and
``(B) except in the case of a Federal or State
fleet, no part of the investment may be provided by
Federal or State funds.
``(4) Use of credits.--At the request of a fleet or covered
person allocated a credit under this subsection, the Secretary
shall, for the year in which the investment is made, treat that
credit as the acquisition of 1 alternative fueled vehicle that
the fleet or covered person is required to acquire under this
title.
``(h) Definition of Maximum Available Power.--In this section, the
term `maximum available power' means the quotient obtained by
dividing--
``(1) the maximum power available from the energy storage
device of a hybrid vehicle, during a standard 10-second pulse
power or equivalent test; by
``(2) the sum of--
``(A) the maximum power described in subparagraph
(A); and
``(B) the net power of the internal combustion or
heat engine, as determined in accordance with standards
established by the Society of Automobile Engineers.''.
(c) Lease Condensate Fuels.--Section 301 of the Energy Policy Act
of 1992 (42 U.S.C. 13211) (as amended by section 702) is amended--
(1) in paragraph (2), by inserting ``mixtures containing 50
percent or more by volume of lease condensate or fuels
extracted from lease condensate;'' after ``liquefied petroleum
gas;'';
(2) in paragraph (14)--
(A) by inserting ``mixtures containing 50 percent
or more by volume of lease condensate or fuels
extracted from lease condensate,'' after ``liquefied
petroleum gas,''; and
(B) by striking ``and'' at the end;
(3) in paragraph (15), by striking the period at the end
and inserting ``; and''; and
(4) by adding at the end the following:
``(16) the term `lease condensate' means a mixture,
primarily of pentanes and heavier hydrocarbons, that is
recovered as a liquid from natural gas in lease separation
facilities.''.
(d) Lease Condensate Use Credits.--
(1) In general.--Title III of the Energy Policy Act of 1992
(42 U.S.C. 13211 et seq.) is amended by adding at the end the
following:

``SEC. 313. LEASE CONDENSATE USE CREDITS.

``(a) In General.--Subject to subsection (d), the Secretary shall
allocate 1 credit under this section to a fleet or covered person for
each qualifying volume of the lease condensate component of fuel
containing at least 50 percent lease condensate, or fuels extracted
from lease condensate, after the date of enactment of this section for
use by the fleet or covered person in vehicles owned or operated by the
fleet or covered person that weigh more than 8,500 pounds gross vehicle
weight rating.
``(b) Requirements.--A credit allocated under this section--
``(1) shall be subject to the same exceptions, authority,
documentation, and use of credits that are specified for
qualifying volumes of biodiesel in section 312; and
``(2) shall not be considered a credit under section 508.
``(c) Regulation.--
``(1) In general.--Subject to subsection (d), not later
than January 1, 2004, after the collection of appropriate
information and data that consider usage options, uses in other
industries, products, or processes, potential volume
capacities, costs, air emissions, and fuel efficiencies, the
Secretary shall issue a regulation establishing requirements
and procedures for the implementation of this section.
``(2) Qualifying volume.--The regulation shall include a
determination of an appropriate qualifying volume for lease
condensate, except that in no case shall the Secretary
determine that the qualifying volume for lease condensate is
less than 1,125 gallons.
``(d) Applicability.--This section applies unless the Secretary
finds that the use of lease condensate as an alternative fuel would
adversely affect public health or safety or ambient air quality or the
environment.''.
(2) Table of contents amendment.--The table of contents of
the Energy Policy Act of 1992 (42 U.S.C. prec. 13201) is
amended by adding at the end of the items relating to title III
the following:

``Sec. 313. Lease condensate use credits.''.
(e) Emergency Exemption.--Section 301 of the Energy Policy Act of
1992 (42 U.S.C. 13211) (as amended by section 702 and this section) is
amended in paragraph (9)(E) by inserting before the semicolon at the
end ``, including vehicles directly used in the emergency repair of
transmission lines and in the restoration of electricity service
following power outages, as determined by the Secretary''.

SEC. 706. REVIEW OF ENERGY POLICY ACT OF 1992 PROGRAMS.

(a) In General.--Not later than 180 days after the date of
enactment of this section, the Secretary of Energy shall complete a
study to determine the effect that titles III, IV, and V of the Energy
Policy Act of 1992 (42 U.S.C. 13211 et seq.) have had on--
(1) the development of alternative fueled vehicle
technology;
(2) the availability of that technology in the market; and
(3) the cost of alternative fueled vehicles.
(b) Topics.--As part of the study under subsection (a), the
Secretary shall specifically identify--
(1) the number of alternative fueled vehicles acquired by
fleets or covered persons required to acquire alternative
fueled vehicles;
(2) the quantity, by type, of alternative fuel actually
used in alternative fueled vehicles acquired by fleets or
covered persons;
(3) the quantity of petroleum displaced by the use of
alternative fuels in alternative fueled vehicles acquired by
fleets or covered persons;
(4) the direct and indirect costs of compliance with
requirements under titles III, IV, and V of the Energy Policy
Act of 1992 (42 U.S.C. 13211 et seq.), including--
(A) vehicle acquisition requirements imposed on
fleets or covered persons;
(B) administrative and recordkeeping expenses;
(C) fuel and fuel infrastructure costs;
(D) associated training and employee expenses; and
(E) any other factors or expenses the Secretary
determines to be necessary to compile reliable
estimates of the overall costs and benefits of
complying with programs under those titles for fleets,
covered persons, and the national economy;
(5) the existence of obstacles preventing compliance with
vehicle acquisition requirements and increased use of
alternative fuel in alternative fueled vehicles acquired by
fleets or covered persons; and
(6) the projected impact of amendments to the Energy Policy
Act of 1992 made by this title.
(c) Report.--Upon completion of the study under this section, the
Secretary shall submit to Congress a report that describes the results
of the study and includes any recommendations of the Secretary for
legislative or administrative changes concerning the alternative fueled
vehicle requirements under titles III, IV and V of the Energy Policy
Act of 1992 (42 U.S.C. 13211 et seq.).

SEC. 707. REPORT CONCERNING COMPLIANCE WITH ALTERNATIVE FUELED VEHICLE
PURCHASING REQUIREMENTS.

Section 310(b)(1) of the Energy Policy Act of 1992 (42 U.S.C.
13218(b)(1)) is amended by striking ``1 year after the date of
enactment of this subsection'' and inserting ``February 15, 2004''.

Subtitle B--Hybrid Vehicles, Advanced Vehicles, and Fuel Cell Buses

PART I--HYBRID VEHICLES

SEC. 711. HYBRID VEHICLES.

The Secretary of Energy shall accelerate efforts directed toward
the improvement of batteries and other rechargeable energy storage
systems, power electronics, hybrid systems integration, and other
technologies for use in hybrid vehicles.

PART II--ADVANCED VEHICLES

SEC. 721. DEFINITIONS.

In this part:
(1) Alternative fueled vehicle.--
(A) In general.--The term ``alternative fueled
vehicle'' means a vehicle propelled solely on an
alternative fuel (as defined in section 301 of the
Energy Policy Act of 1992 (42 U.S.C. 13211)).
(B) Exclusion.--The term ``alternative fueled
vehicle'' does not include a vehicle that the Secretary
determines, by regulation, does not yield substantial
environmental benefits over a vehicle operating solely
on gasoline or diesel derived from fossil fuels.
(2) Fuel cell vehicle.--The term ``fuel cell vehicle''
means a vehicle propelled by an electric motor powered by a
fuel cell system that converts chemical energy into electricity
by combining oxygen (from air) with hydrogen fuel that is
stored on the vehicle or is produced onboard by reformation of
a hydrocarbon fuel. Such fuel cell system may or may not
include the use of auxiliary energy storage systems to enhance
vehicle performance.
(3) Hybrid vehicle.--The term ``hybrid vehicle'' means a
medium or heavy duty vehicle propelled by an internal
combustion engine or heat engine using any combustible fuel and
an onboard rechargeable energy storage device.
(4) Neighborhood electric vehicle.--The term ``neighborhood
electric vehicle'' means a motor vehicle that--
(A) meets the definition of a low-speed vehicle (as
defined in part 571 of title 49, Code of Federal
Regulations);
(B) meets the definition of a zero-emission vehicle
(as defined in section 86.1702-99 of title 40, Code of
Federal Regulations);
(C) meets the requirements of Federal Motor Vehicle
Safety Standard No. 500; and
(D) has a maximum speed of not greater than 25
miles per hour.
(5) Pilot program.--The term ``pilot program'' means the
competitive grant program established under section 722.
(6) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(7) Ultra-low sulfur diesel vehicle.--The term ``ultra-low
sulfur diesel vehicle'' means a vehicle manufactured in any of
model years 2003 through 2006 powered by a heavy-duty diesel
engine that--
(A) is fueled by diesel fuel that contains sulfur
at not more than 15 parts per million; and
(B) emits not more than the lesser of--
(i) for vehicles manufactured in--
(I) model year 2003, 3.0 grams per
brake horsepower-hour of oxides of
nitrogen and .01 grams per brake
horsepower-hour of particulate matter;
and
(II) model years 2004 through 2006,
2.5 grams per brake horsepower-hour of
nonmethane hydrocarbons and oxides of
nitrogen and .01 grams per brake
horsepower-hour of particulate matter;
or
(ii) the quantity of emissions of
nonmethane hydrocarbons, oxides of nitrogen,
and particulate matter of the best-performing
technology of ultra-low sulfur diesel vehicles
of the same class and application that are
commercially available.

SEC. 722. PILOT PROGRAM.

(a) Establishment.--The Secretary, in consultation with the
Secretary of Transportation, shall establish a competitive grant pilot
program, to be administered through the Clean Cities Program of the
Department of Energy, to provide not more than 15 geographically
dispersed project grants to State governments, local governments, or
metropolitan transportation authorities to carry out a project or
projects for the purposes described in subsection (b).
(b) Grant Purposes.--A grant under this section may be used for the
following purposes:
(1) The acquisition of alternative fueled vehicles or fuel
cell vehicles, including--
(A) passenger vehicles (including neighborhood
electric vehicles); and
(B) motorized 2-wheel bicycles, scooters, or other
vehicles for use by law enforcement personnel or other
State or local government or metropolitan
transportation authority employees.
(2) The acquisition of alternative fueled vehicles, hybrid
vehicles, or fuel cell vehicles, including--
(A) buses used for public transportation or
transportation to and from schools;
(B) delivery vehicles for goods or services; and
(C) ground support vehicles at public airports
(including vehicles to carry baggage or push or pull
airplanes toward or away from terminal gates).
(3) The acquisition of ultra-low sulfur diesel vehicles.
(4) Installation or acquisition of infrastructure necessary
to directly support an alternative fueled vehicle, fuel cell
vehicle, or hybrid vehicle project funded by the grant,
including fueling and other support equipment.
(5) Operation and maintenance of vehicles, infrastructure,
and equipment acquired as part of a project funded by the
grant.
(c) Applications.--
(1) Requirements.--
(A) In general.--The Secretary shall issue
requirements for applying for grants under the pilot
program.
(B) Minimum requirements.--At a minimum, the
Secretary shall require that an application for a
grant--
(i) be submitted by the head of a State or
local government or a metropolitan
transportation authority, or any combination
thereof, and a registered participant in the
Clean Cities Program of the Department of
Energy; and
(ii) include--
(I) a description of the project
proposed in the application, including
how the project meets the requirements
of this part;
(II) an estimate of the ridership
or degree of use of the project;
(III) an estimate of the air
pollution emissions reduced and fossil
fuel displaced as a result of the
project, and a plan to collect and
disseminate environmental data, related
to the project to be funded under the
grant, over the life of the project;
(IV) a description of how the
project will be sustainable without
Federal assistance after the completion
of the term of the grant;
(V) a complete description of the
costs of the project, including
acquisition, construction, operation,
and maintenance costs over the expected
life of the project;
(VI) a description of which costs
of the project will be supported by
Federal assistance under this part; and
(VII) documentation to the
satisfaction of the Secretary that
diesel fuel containing sulfur at not
more than 15 parts per million is
available for carrying out the project,
and a commitment by the applicant to
use such fuel in carrying out the
project.
(2) Partners.--An applicant under paragraph (1) may carry
out a project under the pilot program in partnership with
public and private entities.
(d) Selection Criteria.--In evaluating applications under the pilot
program, the Secretary shall--
(1) consider each applicant's previous experience with
similar projects; and
(2) give priority consideration to applications that--
(A) are most likely to maximize protection of the
environment;
(B) demonstrate the greatest commitment on the part
of the applicant to ensure funding for the proposed
project and the greatest likelihood that the project
will be maintained or expanded after Federal assistance
under this part is completed; and
(C) exceed the minimum requirements of subsection
(c)(1)(B)(ii).
(e) Pilot Project Requirements.--
(1) Maximum amount.--The Secretary shall not provide more
than $20,000,000 in Federal assistance under the pilot program
to any applicant.
(2) Cost sharing.--The Secretary shall not provide more
than 50 percent of the cost, incurred during the period of the
grant, of any project under the pilot program.
(3) Maximum period of grants.--The Secretary shall not fund
any applicant under the pilot program for more than 5 years.
(4) Deployment and distribution.--The Secretary shall seek
to the maximum extent practicable to ensure a broad geographic
distribution of project sites.
(5) Transfer of information and knowledge.--The Secretary
shall establish mechanisms to ensure that the information and
knowledge gained by participants in the pilot program are
transferred among the pilot program participants and to other
interested parties, including other applicants that submitted
applications.
(f) Schedule.--
(1) Publication.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall publish in the
Federal Register, Commerce Business Daily, and elsewhere as
appropriate, a request for applications to undertake projects
under the pilot program. Applications shall be due not later
than 180 days after the date of publication of the notice.
(2) Selection.--Not later than 180 days after the date by
which applications for grants are due, the Secretary shall
select by competitive, peer reviewed proposal, all applications
for projects to be awarded a grant under the pilot program.
(g) Limit on Funding.--The Secretary shall provide not less than 20
nor more than 25 percent of the grant funding made available under this
section for the acquisition of ultra-low sulfur diesel vehicles.

SEC. 723. REPORTS TO CONGRESS.

(a) Initial Report.--Not later than 60 days after the date on which
grants are awarded under this part, the Secretary shall submit to
Congress a report containing--
(1) an identification of the grant recipients and a
description of the projects to be funded;
(2) an identification of other applicants that submitted
applications for the pilot program; and
(3) a description of the mechanisms used by the Secretary
to ensure that the information and knowledge gained by
participants in the pilot program are transferred among the
pilot program participants and to other interested parties,
including other applicants that submitted applications.
(b) Evaluation.--Not later than 3 years after the date of enactment
of this Act, and annually thereafter until the pilot program ends, the
Secretary shall submit to Congress a report containing an evaluation of
the effectiveness of the pilot program, including--
(1) an assessment of the benefits to the environment
derived from the projects included in the pilot program; and
(2) an estimate of the potential benefits to the
environment to be derived from widespread application of
alternative fueled vehicles and ultra-low sulfur diesel
vehicles.

SEC. 724. AUTHORIZATION OF APPROPRIATIONS.

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

PART III--FUEL CELL BUSES

SEC. 731. FUEL CELL TRANSIT BUS DEMONSTRATION.

(a) In General.--The Secretary of Energy, in consultation with the
Secretary of Transportation, shall establish a transit bus
demonstration program to make competitive, merit-based awards for 5-
year projects to demonstrate not more than 25 fuel cell transit buses
(and necessary infrastructure) in 5 geographically dispersed
localities.
(b) Preference.--In selecting projects under this section, the
Secretary of Energy shall give preference to projects that are most
likely to mitigate congestion and improve air quality.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Energy to carry out this section
$10,000,000 for each of fiscal years 2004 through 2008.

Subtitle C--Clean School Buses

SEC. 741. DEFINITIONS.

In this subtitle:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Alternative fuel.--The term ``alternative fuel'' means
liquefied natural gas, compressed natural gas, liquefied
petroleum gas, hydrogen, propane, or methanol or ethanol at no
less than 85 percent by volume.
(3) Alternative fuel school bus.--The term ``alternative
fuel school bus'' means a school bus that meets all of the
requirements of this subtitle and is operated solely on an
alternative fuel.
(4) Emissions control retrofit technology.--The term
``emissions control retrofit technology'' means a particulate
filter or other emissions control equipment that is verified or
certified by the Administrator or the California Air Resources
Board as an effective emission reduction technology when
installed on an existing school bus.
(5) Idling.--The term ``idling'' means operating an engine
while remaining stationary for more than approximately 15
minutes, except that the term does not apply to routine
stoppages associated with traffic movement or congestion.
(6) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(7) Ultra-low sulfur diesel fuel.--The term ``ultra-low
sulfur diesel fuel'' means diesel fuel that contains sulfur at
not more than 15 parts per million.
(8) Ultra-low sulfur diesel fuel school bus.--The term
``ultra-low sulfur diesel fuel school bus'' means a school bus
that meets all of the requirements of this subtitle and is
operated solely on ultra-low sulfur diesel fuel.

SEC. 742. PROGRAM FOR REPLACEMENT OF CERTAIN SCHOOL BUSES WITH CLEAN
SCHOOL BUSES.

(a) Establishment.--The Administrator, in consultation with the
Secretary and other appropriate Federal departments and agencies, shall
establish a program for awarding grants on a competitive basis to
eligible entities for the replacement of existing school buses
manufactured before model year 1991 with alternative fuel school buses
and ultra-low sulfur diesel fuel school buses.
(b) Requirements.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, the Administrator shall establish and
publish in the Federal Register grant requirements on
eligibility for assistance, and on implementation of the
program established under subsection (a), including
instructions for the submission of grant applications and
certification requirements to ensure compliance with this
subtitle.
(2) Application deadlines.--The requirements established
under paragraph (1) shall require submission of grant
applications not later than--
(A) in the case of the first year of program
implementation, the date that is 180 days after the
publication of the requirements in the Federal
Register; and
(B) in the case of each subsequent year, June 1 of
the year.
(c) Eligible Recipients.--A grant shall be awarded under this
section only--
(1) to 1 or more local or State governmental entities
responsible for providing school bus service to 1 or more
public school systems or responsible for the purchase of school
buses;
(2) to 1 or more contracting entities that provide school
bus service to 1 or more public school systems, if the grant
application is submitted jointly with the 1 or more school
systems to be served by the buses, except that the application
may provide that buses purchased using funds awarded shall be
owned, operated, and maintained exclusively by the 1 or more
contracting entities; or
(3) to a nonprofit school transportation association
representing private contracting entities, if the association
has notified and received approval from the 1 or more school
systems to be served by the buses.
(d) Award Deadlines.--
(1) In general.--Subject to paragraph (2), the
Administrator shall award a grant made to a qualified applicant
for a fiscal year--
(A) in the case of the first fiscal year of program
implementation, not later than the date that is 90 days
after the application deadline established under
subsection (b)(2); and
(B) in the case of each subsequent fiscal year, not
later than August 1 of the fiscal year.
(2) Insufficient number of qualified grant applications.--
If the Administrator does not receive a sufficient number of
qualified grant applications to meet the requirements of
subsection (i)(1) for a fiscal year, the Administrator shall
award a grant made to a qualified applicant under subsection
(i)(2) not later than September 30 of the fiscal year.
(e) Types of Grants.--
(1) In general.--A grant under this section shall be used
for the replacement of school buses manufactured before model
year 1991 with alternative fuel school buses and ultra-low
sulfur diesel fuel school buses.
(2) No economic benefit.--Other than the receipt of the
grant, a recipient of a grant under this section may not
receive any economic benefit in connection with the receipt of
the grant.
(3) Priority of grant applications.--The Administrator
shall give priority to applicants that propose to replace
school buses manufactured before model year 1977.
(f) Conditions of Grant.--A grant provided under this section shall
include the following conditions:
(1) School bus fleet.--All buses acquired with funds
provided under the grant shall be operated as part of the
school bus fleet for which the grant was made for a minimum of
5 years.
(2) Use of funds.--Funds provided under the grant may only
be used--
(A) to pay the cost, except as provided in
paragraph (3), of new alternative fuel school buses or
ultra-low sulfur diesel fuel school buses, including
State taxes and contract fees associated with the
acquisition of such buses; and
(B) to provide--
(i) up to 20 percent of the price of the
alternative fuel school buses acquired, for
necessary alternative fuel infrastructure if
the infrastructure will only be available to
the grant recipient; and
(ii) up to 25 percent of the price of the
alternative fuel school buses acquired, for
necessary alternative fuel infrastructure if
the infrastructure will be available to the
grant recipient and to other bus fleets.
(3) Grant recipient funds.--The grant recipient shall be
required to provide at least--
(A) in the case of a grant recipient described in
paragraph (1) or (3) of subsection (c), the lesser of--
(i) an amount equal to 15 percent of the
total cost of each bus received; or
(ii) $15,000 per bus; and
(B) in the case of a grant recipient described in
subsection (c)(2), the lesser of--
(i) an amount equal to 20 percent of the
total cost of each bus received; or
(ii) $20,000 per bus.
(4) Ultra-low sulfur diesel fuel.--In the case of a grant
recipient receiving a grant for ultra-low sulfur diesel fuel
school buses, the grant recipient shall be required to provide
documentation to the satisfaction of the Administrator that
diesel fuel containing sulfur at not more than 15 parts per
million is available for carrying out the purposes of the
grant, and a commitment by the applicant to use such fuel in
carrying out the purposes of the grant.
(5) Timing.--All alternative fuel school buses, ultra-low
sulfur diesel fuel school buses, or alternative fuel
infrastructure acquired under a grant awarded under this
section shall be purchased and placed in service as soon as
practicable.
(g) Buses.--
(1) In general.--Except as provided in paragraph (2),
funding under a grant made under this section for the
acquisition of new alternative fuel school buses or ultra-low
sulfur diesel fuel school buses shall only be used to acquire
school buses--
(A) with a gross vehicle weight of greater than
14,000 pounds;
(B) that are powered by a heavy duty engine;
(C) in the case of alternative fuel school buses
manufactured in model years 2004 through 2006, that
emit not more than 1.8 grams per brake horsepower-hour
of nonmethane hydrocarbons and oxides of nitrogen and
.01 grams per brake horsepower-hour of particulate
matter; and
(D) in the case of ultra-low sulfur diesel fuel
school buses manufactured in model years 2004 through
2006, that emit not more than 2.5 grams per brake
horsepower-hour of nonmethane hydrocarbons and oxides
of nitrogen and .01 grams per brake horsepower-hour of
particulate matter.
(2) Limitations.--A bus shall not be acquired under this
section that emits nonmethane hydrocarbons, oxides of nitrogen,
or particulate matter at a rate greater than the best
performing technology of the same class of ultra-low sulfur
diesel fuel school buses commercially available at the time the
grant is made.
(h) Deployment and Distribution.--The Administrator shall--
(1) seek, to the maximum extent practicable, to achieve
nationwide deployment of alternative fuel school buses and
ultra-low sulfur diesel fuel school buses through the program
under this section; and
(2) ensure a broad geographic distribution of grant awards,
with a goal of no State receiving more than 10 percent of the
grant funding made available under this section for a fiscal
year.
(i) Allocation of Funds.--
(1) In general.--Subject to paragraph (2), of the amount of
grant funding made available to carry out this section for any
fiscal year, the Administrator shall use--
(A) 70 percent for the acquisition of alternative
fuel school buses or supporting infrastructure; and
(B) 30 percent for the acquisition of ultra-low
sulfur diesel fuel school buses.
(2) Insufficient number of qualified grant applications.--
After the first fiscal year in which this program is in effect,
if the Administrator does not receive a sufficient number of
qualified grant applications to meet the requirements of
subparagraph (A) or (B) of paragraph (1) for a fiscal year,
effective beginning on August 1 of the fiscal year, the
Administrator shall make the remaining funds available to other
qualified grant applicants under this section.
(j) Reduction of School Bus Idling.--Each local educational agency
(as defined in section 9101 of the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 7801)) that receives Federal funds under the
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.)
is encouraged to develop a policy, consistent with the health, safety,
and welfare of students and the proper operation and maintenance of
school buses, to reduce the incidence of unnecessary school bus idling
at schools when picking up and unloading students.
(k) Annual Report.--
(1) In general.--Not later than January 31 of each year,
the Administrator shall transmit to Congress a report
evaluating implementation of the programs under this section
and section 743.
(2) Components.--The reports shall include a description
of--
(A) the total number of grant applications
received;
(B) the number and types of alternative fuel school
buses, ultra-low sulfur diesel fuel school buses, and
retrofitted buses requested in grant applications;
(C) grants awarded and the criteria used to select
the grant recipients;
(D) certified engine emission levels of all buses
purchased or retrofitted under the programs under this
section and section 743;
(E) an evaluation of the in-use emission level of
buses purchased or retrofitted under the programs under
this section and section 743; and
(F) any other information the Administrator
considers appropriate.
(l) Authorization of Appropriations.--There are authorized to be
appropriated to the Administrator to carry out this section, to remain
available until expended--
(1) $45,000,000 for fiscal year 2005;
(2) $65,000,000 for fiscal year 2006;
(3) $90,000,000 for fiscal year 2007; and
(4) such sums as are necessary for each of fiscal years
2008 and 2009.

SEC. 743. DIESEL RETROFIT PROGRAM.

(a) Establishment.--The Administrator, in consultation with the
Secretary, shall establish a program for awarding grants on a
competitive basis to entities for the installation of retrofit
technologies for diesel school buses.
(b) Eligible Recipients.--A grant shall be awarded under this
section only--
(1) to a local or State governmental entity responsible for
providing school bus service to 1 or more public school
systems;
(2) to 1 or more contracting entities that provide school
bus service to 1 or more public school systems, if the grant
application is submitted jointly with the 1 or more school
systems that the buses will serve, except that the application
may provide that buses purchased using funds awarded shall be
owned, operated, and maintained exclusively by the 1 or more
contracting entities; or
(3) to a nonprofit school transportation association
representing private contracting entities, if the association
has notified and received approval from the 1 or more school
systems to be served by the buses.
(c) Awards.--
(1) In general.--The Administrator shall seek, to the
maximum extent practicable, to ensure a broad geographic
distribution of grants under this section.
(2) Preferences.--In making awards of grants under this
section, the Administrator shall give preference to proposals
that--
(A) will achieve the greatest reductions in
emissions of nonmethane hydrocarbons, oxides of
nitrogen, or particulate matter per proposal or per
bus; or
(B) involve the use of emissions control retrofit
technology on diesel school buses that operate solely
on ultra-low sulfur diesel fuel.
(d) Conditions of Grant.--A grant shall be provided under this
section on the conditions that--
(1) buses on which retrofit emissions-control technology
are to be demonstrated--
(A) will operate on ultra-low sulfur diesel fuel
where such fuel is reasonably available or required for
sale by State or local law or regulation;
(B) were manufactured in model year 1991 or later;
and
(C) will be used for the transportation of school
children to and from school for a minimum of 5 years;
(2) grant funds will be used for the purchase of emission
control retrofit technology, including State taxes and contract
fees; and
(3) grant recipients will provide at least 15 percent of
the total cost of the retrofit, including the purchase of
emission control retrofit technology and all necessary labor
for installation of the retrofit.
(e) Verification.--Not later than 90 days after the date of
enactment of this Act, the Administrator shall publish in the Federal
Register procedures to verify--
(1) the retrofit emissions-control technology to be
demonstrated;
(2) that buses powered by ultra-low sulfur diesel fuel on
which retrofit emissions-control technology are to be
demonstrated will operate on diesel fuel containing not more
than 15 parts per million of sulfur; and
(3) that grants are administered in accordance with this
section.
(f) Authorization of Appropriations.--There are authorized to be
appropriated to the Administrator to carry out this section, to remain
available until expended--
(1) $20,000,000 for fiscal year 2005;
(2) $35,000,000 for fiscal year 2006;
(3) $45,000,000 for fiscal year 2007; and
(4) such sums as are necessary for each of fiscal years
2008 and 2009.

SEC. 744. FUEL CELL SCHOOL BUSES.

(a) Establishment.--The Secretary shall establish a program for
entering into cooperative agreements--
(1) with private sector fuel cell bus developers for the
development of fuel cell-powered school buses; and
(2) subsequently, with not less than 2 units of local
government using natural gas-powered school buses and such
private sector fuel cell bus developers to demonstrate the use
of fuel cell-powered school buses.
(b) Cost Sharing.--The non-Federal contribution for activities
funded under this section shall be not less than--
(1) 20 percent for fuel infrastructure development
activities; and
(2) 50 percent for demonstration activities and for
development activities not described in paragraph (1).
(c) Reports to Congress.--Not later than 3 years after the date of
enactment of this Act, the Secretary shall transmit to Congress a
report that--
(1) evaluates the process of converting natural gas
infrastructure to accommodate fuel cell-powered school buses;
and
(2) assesses the results of the development and
demonstration program under this section.
(d) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section $25,000,000 for
the period of fiscal years 2004 through 2006.

Subtitle D--Miscellaneous

SEC. 751. RAILROAD EFFICIENCY.

(a) Establishment.--The Secretary of Energy shall, in cooperation
with the Secretary of Transportation and the Administrator of the
Environmental Protection Agency, establish a cost-shared, public-
private research partnership involving the Federal Government, railroad
carriers, locomotive manufacturers and equipment suppliers, and the
Association of American Railroads, to develop and demonstrate railroad
locomotive technologies that increase fuel economy, reduce emissions,
and lower costs of operation.
(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Energy to carry out this section--
(1) $25,000,000 for fiscal year 2005;
(2) $35,000,000 for fiscal year 2006; and
(3) $50,000,000 for fiscal year 2007.

SEC. 752. MOBILE EMISSION REDUCTIONS TRADING AND CREDITING.

(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Administrator of the Environmental
Protection Agency shall submit to Congress a report on the experience
of the Administrator with the trading of mobile source emission
reduction credits for use by owners and operators of stationary source
emission sources to meet emission offset requirements within a
nonattainment area.
(b) Contents.--The report shall describe--
(1) projects approved by the Administrator that include the
trading of mobile source emission reduction credits for use by
stationary sources in complying with offset requirements,
including a description of--
(A) project and stationary sources location;
(B) volumes of emissions offset and traded;
(C) the sources of mobile emission reduction
credits; and
(D) if available, the cost of the credits;
(2) the significant issues identified by the Administrator
in consideration and approval of trading in the projects;
(3) the requirements for monitoring and assessing the air
quality benefits of any approved project;
(4) the statutory authority on which the Administrator has
based approval of the projects;
(5) an evaluation of how the resolution of issues in
approved projects could be used in other projects; and
(6) any other issues that the Administrator considers
relevant to the trading and generation of mobile source
emission reduction credits for use by stationary sources or for
other purposes.

SEC. 753. AVIATION FUEL CONSERVATION AND EMISSIONS.

(a) In General.--Not later than 60 days after the date of enactment
of this Act, the Administrator of the Federal Aviation Administration
and the Administrator of the Environmental Protection Agency shall
jointly initiate a study to identify--
(1) the impact of aircraft emissions on air quality in
nonattainment areas; and
(2) ways to promote fuel conservation measures for aviation
to--
(A) enhance fuel efficiency; and
(B) reduce emissions.
(b) Focus.--The study under subsection (a) shall focus on how air
traffic management inefficiencies, such as aircraft idling at airports,
result in unnecessary fuel burn and air emissions.
(c) Report.--Not later than 1 year after the date of the initiation
of the study under subsection (a), the Administrator of the Federal
Aviation Administration and the Administrator of the Environmental
Protection Agency shall jointly submit to the Committee on Energy and
Commerce and the Committee on Transportation and Infrastructure of the
House of Representatives and the Committee on Environment and Public
Works and the Committee on Commerce, Science, and Transportation of the
Senate a report that--
(1) describes the results of the study; and
(2) includes any recommendations on ways in which
unnecessary fuel use and emissions affecting air quality may be
reduced--
(A) without adversely affecting safety and security
and increasing individual aircraft noise; and
(B) while taking into account all aircraft
emissions and the impact of the emissions on human
health.

SEC. 754. DIESEL FUELED VEHICLES.

(a) Definition of Tier 2 Emission Standards.--In this section, the
term ``tier 2 emission standards'' means the motor vehicle emission
standards that apply to passenger cars, light trucks, and larger
passenger vehicles manufactured after the 2003 model year, as issued on
February 10, 2000, by the Administrator of the Environmental Protection
Agency under sections 202 and 211 of the Clean Air Act (42 U.S.C. 7521,
7545).
(b) Diesel Combustion and After-Treatment Technologies.--The
Secretary of Energy shall accelerate efforts to improve diesel
combustion and after-treatment technologies for use in diesel fueled
motor vehicles.
(c) Goals.--The Secretary shall carry out subsection (b) with a
view toward achieving the following goals:
(1) Developing and demonstrating diesel technologies that,
not later than 2010, meet the following standards:
(A) Tier 2 emission standards.
(B) The heavy-duty emissions standards of 2007 that
are applicable to heavy-duty vehicles under regulations
issued by the Administrator of the Environmental
Protection Agency as of the date of enactment of this
Act.
(2) Developing the next generation of low-emission, high
efficiency diesel engine technologies, including homogeneous
charge compression ignition technology.

SEC. 755. CONSERVE BY BICYCLING PROGRAM.

(a) Definitions.--In this section:
(1) Program.--The term ``program'' means the Conserve by
Bicycling Program established by subsection (b).
(2) Secretary.--The term ``Secretary'' means the Secretary
of Transportation.
(b) Establishment.--There is established within the Department of
Transportation a program to be known as the ``Conserve by Bicycling
Program''.
(c) Projects.--
(1) In general.--In carrying out the program, the Secretary
shall establish not more than 10 pilot projects that are--
(A) dispersed geographically throughout the United
States; and
(B) designed to conserve energy resources by
encouraging the use of bicycles in place of motor
vehicles.
(2) Requirements.--A pilot project described in paragraph
(1) shall--
(A) use education and marketing to convert motor
vehicle trips to bicycle trips;
(B) document project results and energy savings (in
estimated units of energy conserved);
(C) facilitate partnerships among interested
parties in at least 2 of the fields of--
(i) transportation;
(ii) law enforcement;
(iii) education;
(iv) public health;
(v) environment; and
(vi) energy;
(D) maximize bicycle facility investments;
(E) demonstrate methods that may be used in other
regions of the United States; and
(F) facilitate the continuation of ongoing programs
that are sustained by local resources.
(3) Cost sharing.--At least 20 percent of the cost of each
pilot project described in paragraph (1) shall be provided from
State or local sources.
(d) Energy and Bicycling Research Study.--
(1) In general.--Not later than 2 years after the date of
enactment of this Act, the Secretary shall enter into a
contract with the National Academy of Sciences for, and the
National Academy of Sciences shall conduct and submit to
Congress a report on, a study on the feasibility of converting
motor vehicle trips to bicycle trips.
(2) Components.--The study shall--
(A) document the results or progress of the pilot
projects under subsection (c);
(B) determine the type and duration of motor
vehicle trips that people in the United States may
feasibly make by bicycle, taking into consideration
factors such as--
(i) weather;
(ii) land use and traffic patterns;
(iii) the carrying capacity of bicycles;
and
(iv) bicycle infrastructure;
(C) determine any energy savings that would result
from the conversion of motor vehicle trips to bicycle
trips;
(D) include a cost-benefit analysis of bicycle
infrastructure investments; and
(E) include a description of any factors that would
encourage more motor vehicle trips to be replaced with
bicycle trips.
(e) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section $6,200,000, to
remain available until expended, of which--
(1) $5,150,000 shall be used to carry out pilot projects
described in subsection (c);
(2) $300,000 shall be used by the Secretary to coordinate,
publicize, and disseminate the results of the program; and
(3) $750,000 shall be used to carry out subsection (d).

SEC. 756. REDUCTION OF ENGINE IDLING OF HEAVY-DUTY VEHICLES.

(a) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Advanced truck stop electrification system.--The term
``advanced truck stop electrification system'' means a
stationary system that delivers heat, air conditioning,
electricity, and communications, and is capable of providing
verifiable and auditable evidence of use of those services, to
a heavy-duty vehicle and any occupants of the heavy-duty
vehicle without relying on components mounted onboard the
heavy-duty vehicle for delivery of those services.
(3) Auxiliary power unit.--The term ``auxiliary power
unit'' means an integrated system that--
(A) provides heat, air conditioning, engine
warming, and electricity to the factory-installed
components on a heavy-duty vehicle as if the main drive
engine of the heavy-duty vehicle were running; and
(B) is certified by the Administrator under part 89
of title 40, Code of Federal Regulations (or any
successor regulation), as meeting applicable emission
standards.
(4) Heavy-duty vehicle.--The term ``heavy-duty vehicle''
means a vehicle that--
(A) has a gross vehicle weight rating greater than
12,500 pounds; and
(B) is powered by a diesel engine.
(5) Idle reduction technology.--The term ``idle reduction
technology'' means an advanced truck stop electrification
system, auxiliary power unit, or other device or system of
devices that--
(A) is used to reduce long-duration idling of a
heavy-duty vehicle; and
(B) allows for the main drive engine or auxiliary
refrigeration engine of a heavy-duty vehicle to be shut
down.
(6) Long-duration idling.--
(A) In general.--The term ``long-duration idling''
means the operation of a main drive engine or auxiliary
refrigeration engine of a heavy-duty vehicle, for a
period greater than 15 consecutive minutes, at a time
at which the main drive engine is not engaged in gear.
(B) Exclusions.--The term ``long-duration idling''
does not include the operation of a main drive engine
or auxiliary refrigeration engine of a heavy-duty
vehicle during a routine stoppage associated with
traffic movement or congestion.
(b) Idle Reduction Technology Benefits, Programs, and Studies.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, the Administrator shall--
(A)(i) commence a review of the mobile source air
emission models of the Environmental Protection Agency
used under the Clean Air Act (42 U.S.C. 7401 et seq.)
to determine whether the models accurately reflect the
emissions resulting from long-duration idling of heavy-
duty vehicles and other vehicles and engines; and
(ii) update those models as the Administrator
determines to be appropriate; and
(B)(i) commence a review of the emission reductions
achieved by the use of idle reduction technology; and
(ii) complete such revisions of the regulations and
guidance of the Environmental Protection Agency as the
Administrator determines to be appropriate.
(2) Deadline for completion.--Not later than 180 days after
the date of enactment of this Act, the Administrator shall--
(A) complete the reviews under subparagraphs (A)(i)
and (B)(i) of paragraph (1); and
(B) prepare and make publicly available 1 or more
reports on the results of the reviews.
(3) Discretionary inclusions.--The reviews under
subparagraphs (A)(i) and (B)(i) of paragraph (1) and the
reports under paragraph (2)(B) may address the potential fuel
savings resulting from use of idle reduction technology.
(4) Idle reduction deployment program.--
(A) Establishment.--
(i) In general.--Not later than 90 days
after the date of enactment of this Act, the
Administrator, in consultation with the
Secretary of Transportation, shall establish a
program to support deployment of idle reduction
technology.
(ii) Priority.--The Administrator shall
give priority to the deployment of idle
reduction technology based on beneficial
effects on air quality and ability to lessen
the emission of criteria air pollutants.
(B) Funding.--
(i) Authorization of appropriations.--There
are authorized to be appropriated to the
Administrator to carry out subparagraph (A)
$19,500,000 for fiscal year 2004, $30,000,000
for fiscal year 2005, and $45,000,000 for
fiscal year 2006.
(ii) Cost sharing.--Subject to clause
(iii), the Administrator shall require at least
50 percent of the costs directly and
specifically related to any project under this
section to be provided from non-Federal
sources.
(iii) Necessary and appropriate
reductions.--The Administrator may reduce the
non-Federal requirement under clause (ii) if
the Administrator determines that the reduction
is necessary and appropriate to meet the
objectives of this section.
(5) Idling location study.--
(A) In general.--Not later than 90 days after the
date of enactment of this Act, the Administrator, in
consultation with the Secretary of Transportation,
shall commence a study to analyze all locations at
which heavy-duty vehicles stop for long-duration
idling, including--
(i) truck stops;
(ii) rest areas;
(iii) border crossings;
(iv) ports;
(v) transfer facilities; and
(vi) private terminals.
(B) Deadline for completion.--Not later than 180
days after the date of enactment of this Act, the
Administrator shall--
(i) complete the study under subparagraph
(A); and
(ii) prepare and make publicly available 1
or more reports of the results of the study.
(c) Vehicle Weight Exemption.--Section 127(a) of title 23, United
States Code, is amended--
(1) by designating the first through eleventh sentences as
paragraphs (1) through (11), respectively; and
(2) by adding at the end the following:
``(12) Heavy duty vehicles.--
``(A) In general.--Subject to subparagraphs (B) and
(C), in order to promote reduction of fuel use and
emissions because of engine idling, the maximum gross
vehicle weight limit and the axle weight limit for any
heavy-duty vehicle equipped with an idle reduction
technology shall be increased by a quantity necessary
to compensate for the additional weight of the idle
reduction system.
``(B) Maximum weight increase.--The weight increase
under subparagraph (A) shall be not greater than 250
pounds.
``(C) Proof.--On request by a regulatory agency or
law enforcement agency, the vehicle operator shall
provide proof (through demonstration or certification)
that--
``(i) the idle reduction technology is
fully functional at all times; and
``(ii) the 250-pound gross weight increase
is not used for any purpose other than the use
of idle reduction technology described in
subparagraph (A).''.

SEC. 757. BIODIESEL ENGINE TESTING PROGRAM.

(a) In General.--Not later that 180 days after the date of
enactment of this Act, the Secretary shall initiate a partnership with
diesel engine, diesel fuel injection system, and diesel vehicle
manufacturers and diesel and biodiesel fuel providers, to include
biodiesel testing in advanced diesel engine and fuel system technology.
(b) Scope.--The program shall provide for testing to determine the
impact of biodiesel from different sources on current and future
emission control technologies, with emphasis on--
(1) the impact of biodiesel on emissions warranty, in-use
liability, and antitampering provisions;
(2) the impact of long-term use of biodiesel on engine
operations;
(3) the options for optimizing these technologies for both
emissions and performance when switching between biodiesel and
diesel fuel; and
(4) the impact of using biodiesel in these fueling systems
and engines when used as a blend with 2006 Environmental
Protection Agency-mandated diesel fuel containing a maximum of
15-parts-per-million sulfur content.
(c) Report.--Not later than 2 years after the date of enactment of
this Act, the Secretary shall provide an interim report to Congress on
the findings of the program, including a comprehensive analysis of
impacts from biodiesel on engine operation for both existing and
expected future diesel technologies, and recommendations for ensuring
optimal emissions reductions and engine performance with biodiesel.
(d) Authorization of Appropriations.--There are authorized to be
appropriated $5,000,000 for each of fiscal years 2004 through 2008 to
carry out this section.
(e) Definition.--For purposes of this section, the term
``biodiesel'' means a diesel fuel substitute produced from nonpetroleum
renewable resources that meets the registration requirements for fuels
and fuel additives established by the Environmental Protection Agency
under section 211 of the Clean Air Act (42 U.S.C. 7545) and that meets
the American Society for Testing and Materials D6751-02a Standard
Specification for Biodiesel Fuel (B100) Blend Stock for Distillate
Fuels.

SEC. 758. HIGH OCCUPANCY VEHICLE EXCEPTION.

Notwithstanding section 102(a) of title 23, United States Code, a
State may permit a vehicle with fewer than 2 occupants to operate in
high occupancy vehicle lanes if the vehicle--
(1) is a dedicated vehicle (as defined in section 301 of
the Energy Policy Act of 1992 (42 U.S. 13211)); or
(2) is a hybrid vehicle (as defined by the State for the
purpose of this section).

Subtitle E--Automobile Efficiency

SEC. 771. AUTHORIZATION OF APPROPRIATIONS FOR IMPLEMENTATION AND
ENFORCEMENT OF FUEL ECONOMY STANDARDS.

In addition to any other funds authorized by law, there are
authorized to be appropriated to the National Highway Traffic Safety
Administration to carry out its obligations with respect to average
fuel economy standards $2,000,000 for each of fiscal years 2004 through
2008.

SEC. 772. REVISED CONSIDERATIONS FOR DECISIONS ON MAXIMUM FEASIBLE
AVERAGE FUEL ECONOMY.

Section 32902(f) of title 49, United States Code, is amended to
read as follows:
``(f) Considerations for Decisions on Maximum Feasible Average Fuel
Economy.--When deciding maximum feasible average fuel economy under
this section, the Secretary of Transportation shall consider the
following matters:
``(1) Technological feasibility.
``(2) Economic practicability.
``(3) The effect of other motor vehicle standards of the
Government on fuel economy.
``(4) The need of the United States to conserve energy.
``(5) The effects of fuel economy standards on passenger
automobiles, nonpassenger automobiles, and occupant safety.
``(6) The effects of compliance with average fuel economy
standards on levels of automobile industry employment in the
United States.''.

SEC. 773. EXTENSION OF MAXIMUM FUEL ECONOMY INCREASE FOR ALTERNATIVE
FUELED VEHICLES.

(a) Manufacturing Incentives.--Section 32905 of title 49, United
States Code, is amended--
(1) in each of subsections (b) and (d), by striking ``1993-
2004'' and inserting ``1993-2008'';
(2) in subsection (f), by striking ``2001'' and inserting
``2005''; and
(3) in subsection (f)(1), by striking ``2004'' and
inserting ``2008''.
(b) Maximum Fuel Economy Increase.--Subsection (a)(1) of section
32906 of title 49, United States Code, is amended--
(1) in subparagraph (A), by striking ``the model years
1993-2004'' and inserting ``model years 1993-2008''; and
(2) in subparagraph (B), by striking ``the model years
2005-2008'' and inserting ``model years 2009-2012''.

SEC. 774. STUDY OF FEASIBILITY AND EFFECTS OF REDUCING USE OF FUEL FOR
AUTOMOBILES.

(a) In General.--Not later than 30 days after the date of the
enactment of this Act, the Administrator of the National Highway
Traffic Safety Administration shall initiate a study of the feasibility
and effects of reducing by model year 2012, by a significant
percentage, the amount of fuel consumed by automobiles.
(b) Subjects of Study.--The study under this section shall
include--
(1) examination of, and recommendation of alternatives to,
the policy under current Federal law of establishing average
fuel economy standards for automobiles and requiring each
automobile manufacturer to comply with average fuel economy
standards that apply to the automobiles it manufactures;
(2) examination of how automobile manufacturers could
contribute toward achieving the reduction referred to in
subsection (a);
(3) examination of the potential of fuel cell technology in
motor vehicles in order to determine the extent to which such
technology may contribute to achieving the reduction referred
to in subsection (a); and
(4) examination of the effects of the reduction referred to
in subsection (a) on--
(A) gasoline supplies;
(B) the automobile industry, including sales of
automobiles manufactured in the United States;
(C) motor vehicle safety; and
(D) air quality.
(c) Report.--The Administrator shall submit to Congress a report on
the findings, conclusion, and recommendations of the study under this
section by not later than 1 year after the date of the enactment of
this Act.

TITLE VIII--HYDROGEN

SEC. 801. DEFINITIONS.

In this title:
(1) Advisory committee.--The term ``Advisory Committee''
means the Hydrogen Technical and Fuel Cell Advisory Committee
established under section 805.
(2) Department.--The term ``Department'' means the
Department of Energy.
(3) Fuel cell.--The term ``fuel cell'' means a device that
directly converts the chemical energy of a fuel and an oxidant
into electricity by an electrochemical process taking place at
separate electrodes in the device.
(4) Infrastructure.--The term ``infrastructure'' means the
equipment, systems, or facilities used to produce, distribute,
deliver, or store hydrogen.
(5) Light duty vehicle.--The term ``light duty vehicle''
means a car or truck classified by the Department of
Transportation as a Class I or IIA vehicle.
(6) Secretary.--The term ``Secretary'' means the Secretary
of Energy.

SEC. 802. PLAN.

Not later than 6 months after the date of enactment of this Act,
the Secretary shall transmit to Congress a coordinated plan for the
programs described in this title and any other programs of the
Department that are directly related to fuel cells or hydrogen. The
plan shall describe, at a minimum--
(1) the agenda for the next 5 years for the programs
authorized under this title, including the agenda for each
activity enumerated in section 803(a);
(2) the types of entities that will carry out the
activities under this title and what role each entity is
expected to play;
(3) the milestones that will be used to evaluate the
programs for the next 5 years;
(4) the most significant technical and nontechnical hurdles
that stand in the way of achieving the goals described in
section 803(b), and how the programs will address those
hurdles; and
(5) the policy assumptions that are implicit in the plan,
including any assumptions that would affect the sources of
hydrogen or the marketability of hydrogen-related products.

SEC. 803. PROGRAMS.

(a) Activities.--The Secretary, in partnership with the private
sector, shall conduct programs to address--
(1) production of hydrogen from diverse energy sources,
including--
(A) fossil fuels, which may include carbon capture
and sequestration;
(B) hydrogen-carrier fuels (including ethanol and
methanol);
(C) renewable energy resources, including biomass;
and
(D) nuclear energy;
(2) use of hydrogen for commercial, industrial, and
residential electric power generation;
(3) safe delivery of hydrogen or hydrogen-carrier fuels,
including--
(A) transmission by pipeline and other distribution
methods; and
(B) convenient and economic refueling of vehicles
either at central refueling stations or through
distributed on-site generation;
(4) advanced vehicle technologies, including--
(A) engine and emission control systems;
(B) energy storage, electric propulsion, and hybrid
systems;
(C) automotive materials; and
(D) other advanced vehicle technologies;
(5) storage of hydrogen or hydrogen-carrier fuels,
including development of materials for safe and economic
storage in gaseous, liquid, or solid form at refueling
facilities and onboard vehicles;
(6) development of safe, durable, affordable, and efficient
fuel cells, including fuel-flexible fuel cell power systems,
improved manufacturing processes, high-temperature membranes,
cost-effective fuel processing for natural gas, fuel cell stack
and system reliability, low temperature operation, and cold
start capability;
(7) development, after consultation with the private
sector, of necessary codes and standards (including
international codes and standards and voluntary consensus
standards adopted in accordance with OMB Circular A-119) and
safety practices for the production, distribution, storage, and
use of hydrogen, hydrogen-carrier fuels, and related products;
and
(8) a public education program to develop improved
knowledge and acceptability of hydrogen-based systems.
(b) Program Goals.--
(1) Vehicles.--For vehicles, the goals of the program are--
(A) to enable a commitment by automakers no later
than year 2015 to offer safe, affordable, and
technically viable hydrogen fuel cell vehicles in the
mass consumer market; and
(B) to enable production, delivery, and acceptance
by consumers of model year 2020 hydrogen fuel cell and
other hydrogen-powered vehicles that will have--
(i) a range of at least 300 miles;
(ii) improved performance and ease of
driving;
(iii) safety and performance comparable to
vehicle technologies in the market; and
(iv) when compared to light duty vehicles
in model year 2003--
(I) fuel economy that is
substantially higher;
(II) substantially lower emissions
of air pollutants; and
(III) equivalent or improved
vehicle fuel system crash integrity and
occupant protection.
(2) Hydrogen energy and energy infrastructure.--For
hydrogen energy and energy infrastructure, the goals of the
program are to enable a commitment not later than 2015 that
will lead to infrastructure by 2020 that will provide--
(A) safe and convenient refueling;
(B) improved overall efficiency;
(C) widespread availability of hydrogen from
domestic energy sources through--
(i) production, with consideration of
emissions levels;
(ii) delivery, including transmission by
pipeline and other distribution methods for
hydrogen; and
(iii) storage, including storage in surface
transportation vehicles;
(D) hydrogen for fuel cells, internal combustion
engines, and other energy conversion devices for
portable, stationary, and transportation applications;
and
(E) other technologies consistent with the
Department's plan.
(3) Fuel cells.--The goals for fuel cells and their
portable, stationary, and transportation applications are to
enable--
(A) safe, economical, and environmentally sound
hydrogen fuel cells;
(B) fuel cells for light duty and other vehicles;
and
(C) other technologies consistent with the
Department's plan.
(c) Demonstration.--In carrying out the programs under this
section, the Secretary shall fund a limited number of demonstration
projects, consistent with a determination of the maturity, cost-
effectiveness, and environmental impacts of technologies supporting
each project. In selecting projects under this subsection, the
Secretary shall, to the extent practicable and in the public interest,
select projects that--
(1) involve using hydrogen and related products at existing
facilities or installations, such as existing office buildings,
military bases, vehicle fleet centers, transit bus authorities,
or units of the National Park System;
(2) depend on reliable power from hydrogen to carry out
essential activities;
(3) lead to the replication of hydrogen technologies and
draw such technologies into the marketplace;
(4) include vehicle, portable, and stationary
demonstrations of fuel cell and hydrogen-based energy
technologies;
(5) address the interdependency of demand for hydrogen fuel
cell applications and hydrogen fuel infrastructure;
(6) raise awareness of hydrogen technology among the
public;
(7) facilitate identification of an optimum technology
among competing alternatives;
(8) address distributed generation using renewable sources;
and
(9) address applications specific to rural or remote
locations, including isolated villages and islands, the
National Park System, and tribal entities.
The Secretary shall give preference to projects which address multiple
elements contained in paragraphs (1) through (9).
(d) Deployment.--In carrying out the programs under this section,
the Secretary shall, in partnership with the private sector, conduct
activities to facilitate the deployment of hydrogen energy and energy
infrastructure, fuel cells, and advanced vehicle technologies.
(e) Funding.--
(1) In general.--The Secretary shall carry out the programs
under this section using a competitive, merit-based review
process and consistent with the generally applicable Federal
laws and regulations governing awards of financial assistance,
contracts, or other agreements.
(2) Research centers.--Activities under this section may be
carried out by funding nationally recognized university-based
or Federal laboratory research centers.
(f) Cost Sharing.--
(1) Research and development.--Except as otherwise provided
in this title, for research and development programs carried
out under this title the Secretary shall require a commitment
from non-Federal sources of at least 20 percent of the cost of
the project. The Secretary may reduce or eliminate the non-
Federal requirement under this paragraph if the Secretary
determines that the research and development is of a basic or
fundamental nature or involves technical analyses or
educational activities.
(2) Demonstration and commercial application.--Except as
otherwise provided in this title, the Secretary shall require
at least 50 percent of the costs directly and specifically
related to any demonstration or commercial application project
under this title to be provided from non-Federal sources. The
Secretary may reduce the non-Federal requirement under this
paragraph if the Secretary determines that the reduction is
necessary and appropriate considering the technological risks
involved in the project and is necessary to meet the objectives
of this title.
(3) Calculation of amount.--In calculating the amount of
the non-Federal commitment under paragraph (1) or (2), the
Secretary may include personnel, services, equipment, and other
resources.
(4) Size of non-federal share.--The Secretary may consider
the size of the non-Federal share in selecting projects.
(g) Disclosure.--Section 623 of the Energy Policy Act of 1992 (42
U.S.C. 13293) relating to the protection of information shall apply to
projects carried out through grants, cooperative agreements, or
contracts under this title.

SEC. 804. INTERAGENCY TASK FORCE.

(a) Establishment.--Not later than 120 days after the date of
enactment of this Act, the President shall establish an interagency
task force chaired by the Secretary with representatives from each of
the following:
(1) The Office of Science and Technology Policy within the
Executive Office of the President.
(2) The Department of Transportation.
(3) The Department of Defense.
(4) The Department of Commerce (including the National
Institute of Standards and Technology).
(5) The Department of State.
(6) The Environmental Protection Agency.
(7) The National Aeronautics and Space Administration.
(8) Other Federal agencies as the Secretary determines
appropriate.
(b) Duties.--
(1) Planning.--The interagency task force shall work
toward--
(A) a safe, economical, and environmentally sound
fuel infrastructure for hydrogen and hydrogen-carrier
fuels, including an infrastructure that supports buses
and other fleet transportation;
(B) fuel cells in government and other
applications, including portable, stationary, and
transportation applications;
(C) distributed power generation, including the
generation of combined heat, power, and clean fuels
including hydrogen;
(D) uniform hydrogen codes, standards, and safety
protocols; and
(E) vehicle hydrogen fuel system integrity safety
performance.
(2) Activities.--The interagency task force may organize
workshops and conferences, may issue publications, and may
create databases to carry out its duties. The interagency task
force shall--
(A) foster the exchange of generic, nonproprietary
information and technology among industry, academia,
and government;
(B) develop and maintain an inventory and
assessment of hydrogen, fuel cells, and other advanced
technologies, including the commercial capability of
each technology for the economic and environmentally
safe production, distribution, delivery, storage, and
use of hydrogen;
(C) integrate technical and other information made
available as a result of the programs and activities
under this title;
(D) promote the marketplace introduction of
infrastructure for hydrogen fuel vehicles; and
(E) conduct an education program to provide
hydrogen and fuel cell information to potential end-
users.
(c) Agency Cooperation.--The heads of all agencies, including those
whose agencies are not represented on the interagency task force, shall
cooperate with and furnish information to the interagency task force,
the Advisory Committee, and the Department.

SEC. 805. ADVISORY COMMITTEE.

(a) Establishment.--The Hydrogen Technical and Fuel Cell Advisory
Committee is established to advise the Secretary on the programs and
activities under this title.
(b) Membership.--
(1) Members.--The Advisory Committee shall be comprised of
not fewer than 12 nor more than 25 members. The members shall
be appointed by the Secretary to represent domestic industry,
academia, professional societies, government agencies, Federal
laboratories, previous advisory panels, and financial,
environmental, and other appropriate organizations based on the
Department's assessment of the technical and other
qualifications of committee members and the needs of the
Advisory Committee.
(2) Terms.--The term of a member of the Advisory Committee
shall not be more than 3 years. The Secretary may appoint
members of the Advisory Committee in a manner that allows the
terms of the members serving at any time to expire at spaced
intervals so as to ensure continuity in the functioning of the
Advisory Committee. A member of the Advisory Committee whose
term is expiring may be reappointed.
(3) Chairperson.--The Advisory Committee shall have a
chairperson, who is elected by the members from among their
number.
(c) Review.--The Advisory Committee shall review and make
recommendations to the Secretary on--
(1) the implementation of programs and activities under
this title;
(2) the safety, economical, and environmental consequences
of technologies for the production, distribution, delivery,
storage, or use of hydrogen energy and fuel cells; and
(3) the plan under section 802.
(d) Response.--
(1) Consideration of recommendations.--The Secretary shall
consider, but need not adopt, any recommendations of the
Advisory Committee under subsection (c).
(2) Biennial report.--The Secretary shall transmit a
biennial report to Congress describing any recommendations made
by the Advisory Committee since the previous report. The report
shall include a description of how the Secretary has
implemented or plans to implement the recommendations, or an
explanation of the reasons that a recommendation will not be
implemented. The report shall be transmitted along with the
President's budget proposal.
(e) Support.--The Secretary shall provide resources necessary in
the judgment of the Secretary for the Advisory Committee to carry out
its responsibilities under this title.

SEC. 806. EXTERNAL REVIEW.

(a) Plan.--The Secretary shall enter into an arrangement with the
National Academy of Sciences to review the plan prepared under section
802, which shall be completed not later than 6 months after the Academy
receives the plan. Not later than 45 days after receiving the review,
the Secretary shall transmit the review to Congress along with a plan
to implement the review's recommendations or an explanation of the
reasons that a recommendation will not be implemented.
(b) Additional Review.--The Secretary shall enter into an
arrangement with the National Academy of Sciences under which the
Academy will review the programs under section 803 during the fourth
year following the date of enactment of this Act. The Academy's review
shall include the research priorities and technical milestones, and
evaluate the progress toward achieving them. The review shall be
completed not later than 5 years after the date of enactment of this
Act. Not later than 45 days after receiving the review, the Secretary
shall transmit the review to Congress along with a plan to implement
the review's recommendations or an explanation for the reasons that a
recommendation will not be implemented.

SEC. 807. MISCELLANEOUS PROVISIONS.

(a) Representation.--The Secretary may represent the United States
interests with respect to activities and programs under this title, in
coordination with the Department of Transportation, the National
Institute of Standards and Technology, and other relevant Federal
agencies, before governments and nongovernmental organizations
including--
(1) other Federal, State, regional, and local governments
and their representatives;
(2) industry and its representatives, including members of
the energy and transportation industries; and
(3) in consultation with the Department of State, foreign
governments and their representatives including international
organizations.
(b) Regulatory Authority.--Nothing in this title shall be construed
to alter the regulatory authority of the Department.

SEC. 808. SAVINGS CLAUSE.

Nothing in this title shall be construed to affect the authority of
the Secretary of Transportation that may exist prior to the date of
enactment of this Act with respect to--
(1) research into, and regulation of, hydrogen-powered
vehicles fuel systems integrity, standards, and safety under
subtitle VI of title 49, United States Code;
(2) regulation of hazardous materials transportation under
chapter 51 of title 49, United States Code;
(3) regulation of pipeline safety under chapter 601 of
title 49, United States Code;
(4) encouragement and promotion of research, development,
and deployment activities relating to advanced vehicle
technologies under section 5506 of title 49, United States
Code;
(5) regulation of motor vehicle safety under chapter 301 of
title 49, United States Code;
(6) automobile fuel economy under chapter 329 of title 49,
United States Code; or
(7) representation of the interests of the United States
with respect to the activities and programs under the authority
of title 49, United States Code.

SEC. 809. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to the Secretary to carry
out this title, in addition to any amounts made available for these
purposes under other Acts--
(1) $273,500,000 for fiscal year 2004;
(2) $375,000,000 for fiscal year 2005;
(3) $450,000,000 for fiscal year 2006;
(4) $500,000,000 for fiscal year 2007; and
(5) $550,000,000 for fiscal year 2008.

TITLE IX--RESEARCH AND DEVELOPMENT

SEC. 901. GOALS.

(a) In General.--The Secretary shall conduct a balanced set of
programs of energy research, development, demonstration, and commercial
application to support Federal energy policy and programs by the
Department. Such programs shall be focused on--
(1) increasing the efficiency of all energy intensive
sectors through conservation and improved technologies;
(2) promoting diversity of energy supply;
(3) decreasing the Nation's dependence on foreign energy
supplies;
(4) improving United States energy security; and
(5) decreasing the environmental impact of energy-related
activities.
(b) Goals.--The Secretary shall publish measurable 5-year cost and
performance-based goals with each annual budget submission in at least
the following areas:
(1) Energy efficiency for buildings, energy-consuming
industries, and vehicles.
(2) Electric energy generation (including distributed
generation), transmission, and storage.
(3) Renewable energy technologies including wind power,
photovoltaics, solar thermal systems, geothermal energy,
hydrogen-fueled systems, biomass-based systems, biofuels, and
hydropower.
(4) Fossil energy including power generation, onshore and
offshore oil and gas resource recovery, and transportation.
(5) Nuclear energy including programs for existing and
advanced reactors and education of future specialists.
(c) Public Comment.--The Secretary shall provide mechanisms for
input on the annually published goals from industry, university, and
other public sources.
(d) Effect of Goals.--
(1) No new authority or requirement.--Nothing in subsection
(a) or the annually published goals shall--
(A) create any new--
(i) authority for any Federal agency; or
(ii) requirement for any other person;
(B) be used by a Federal agency to support the
establishment of regulatory standards or regulatory
requirements; or
(C) alter the authority of the Secretary to make
grants or other awards.
(2) No limitation.--Nothing in this subsection shall be
construed to limit the authority of the Secretary to impose
conditions on grants or other awards based on the goals in
subsection (a) or any subsequent modification thereto.

SEC. 902. DEFINITIONS.

For purposes of this title:
(1) Department.--The term ``Department'' means the
Department of Energy.
(2) Departmental mission.--The term ``departmental
mission'' means any of the functions vested in the Secretary of
Energy by the Department of Energy Organization Act (42 U.S.C.
7101 et seq.) or other law.
(3) Institution of higher education.--The term
``institution of higher education'' has the meaning given that
term in section 101(a) of the Higher Education Act of 1965 (20
U.S.C. 1001(a)).
(4) National laboratory.--The term ``National Laboratory''
means any of the following laboratories owned by the
Department:
(A) Ames Laboratory.
(B) Argonne National Laboratory.
(C) Brookhaven National Laboratory.
(D) Fermi National Accelerator Laboratory.
(E) Idaho National Engineering and Environmental
Laboratory.
(F) Lawrence Berkeley National Laboratory.
(G) Lawrence Livermore National Laboratory.
(H) Los Alamos National Laboratory.
(I) National Energy Technology Laboratory.
(J) National Renewable Energy Laboratory.
(K) Oak Ridge National Laboratory.
(L) Pacific Northwest National Laboratory.
(M) Princeton Plasma Physics Laboratory.
(N) Sandia National Laboratories.
(O) Stanford Linear Accelerator Center.
(P) Thomas Jefferson National Accelerator Facility.
(5) Nonmilitary energy laboratory.--The term ``nonmilitary
energy laboratory'' means the laboratories listed in paragraph
(4), except for those listed in subparagraphs (G), (H), and
(N).
(6) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(7) Single-purpose research facility.--The term ``single-
purpose research facility'' means any of the primarily single-
purpose entities owned by the Department or any other
organization of the Department designated by the Secretary.

Subtitle A--Energy Efficiency

SEC. 904. ENERGY EFFICIENCY.

(a) In General.--The following sums are authorized to be
appropriated to the Secretary for energy efficiency and conservation
research, development, demonstration, and commercial application
activities, including activities authorized under this subtitle:
(1) For fiscal year 2004, $616,000,000.
(2) For fiscal year 2005, $695,000,000.
(3) For fiscal year 2006, $772,000,000.
(4) For fiscal year 2007, $865,000,000.
(5) For fiscal year 2008, $920,000,000.
(b) Allocations.--From amounts authorized under subsection (a), the
following sums are authorized:
(1) For activities under section 905--
(A) for fiscal year 2004, $20,000,000;
(B) for fiscal year 2005, $30,000,000;
(C) for fiscal year 2006, $50,000,000;
(D) for fiscal year 2007, $50,000,000; and
(E) for fiscal year 2008, $50,000,000.
(2) For activities under section 907--
(A) for fiscal year 2004, $4,000,000; and
(B) for each of fiscal years 2005 through 2008,
$7,000,000.
(3) For activities under section 908--
(A) for fiscal year 2004, $20,000,000;
(B) for fiscal year 2005, $25,000,000;
(C) for fiscal year 2006, $30,000,000;
(D) for fiscal year 2007, $35,000,000; and
(E) for fiscal year 2008, $40,000,000.
(4) For activities under section 909, $2,000,000 for each
of fiscal years 2005 through 2008.
(c) Extended Authorization.--There are authorized to be
appropriated to the Secretary for activities under section 905,
$50,000,000 for each of fiscal years 2009 through 2013.
(d) Limitation on Use of Funds.--None of the funds authorized to be
appropriated under this section may be used for--
(1) the issuance and implementation of energy efficiency
regulations;
(2) the Weatherization Assistance Program under part A of
title IV of the Energy Conservation and Production Act (42
U.S.C. 6861 et seq.);
(3) the State Energy Program under part D of title III of
the Energy Policy and Conservation Act (42 U.S.C. 6321 et
seq.); or
(4) the Federal Energy Management Program under part 3 of
title V of the National Energy Conservation Policy Act (42
U.S.C. 8251 et seq.).

SEC. 905. NEXT GENERATION LIGHTING INITIATIVE.

(a) In General.--The Secretary shall carry out a Next Generation
Lighting Initiative in accordance with this section to support
research, development, demonstration, and commercial application
activities related to advanced solid-state lighting technologies based
on white light emitting diodes.
(b) Objectives.--The objectives of the initiative shall be to
develop advanced solid-state organic and inorganic lighting
technologies based on white light emitting diodes that, compared to
incandescent and fluorescent lighting technologies, are longer lasting;
more energy-efficient; and cost-competitive, and have less
environmental impact.
(c) Industry Alliance.--The Secretary shall, not later than 3
months after the date of enactment of this section, competitively
select an Industry Alliance to represent participants that are private,
for-profit firms which, as a group, are broadly representative of
United States solid state lighting research, development,
infrastructure, and manufacturing expertise as a whole.
(d) Research.--
(1) In general.--The Secretary shall carry out the research
activities of the Next Generation Lighting Initiative through
competitively awarded grants to researchers, including Industry
Alliance participants, National Laboratories, and institutions
of higher education.
(2) Assistance from the industry alliance.--The Secretary
shall annually solicit from the Industry Alliance--
(A) comments to identify solid-state lighting
technology needs;
(B) assessment of the progress of the Initiative's
research activities; and
(C) assistance in annually updating solid-state
lighting technology roadmaps.
(3) Availability of information and roadmaps.--The
information and roadmaps under paragraph (2) shall be available
to the public and public response shall be solicited by the
Secretary.
(e) Development, Demonstration, and Commercial Application.--The
Secretary shall carry out a development, demonstration, and commercial
application program for the Next Generation Lighting Initiative through
competitively selected awards. The Secretary may give preference to
participants of the Industry Alliance selected pursuant to subsection
(c).
(f) Intellectual Property.--The Secretary may require, in
accordance with the authorities provided in section 202(a)(ii) of title
35, United States Code, section 152 of the Atomic Energy Act of 1954
(42 U.S.C. 2182), and section 9 of the Federal Nonnuclear Energy
Research and Development Act of 1974 (42 U.S.C. 5908), that--
(1) for any new invention resulting from activities under
subsection (d)--
(A) the Industry Alliance members that are active
participants in research, development, and
demonstration activities related to the advanced solid-
state lighting technologies that are the subject of
this section shall be granted first option to negotiate
with the invention owner nonexclusive licenses and
royalties for uses of the invention related to solid-
state lighting on terms that are reasonable under the
circumstances; and
(B)(i) for 1 year after a United States patent is
issued for the invention, the patent holder shall not
negotiate any license or royalty with any entity that
is not a participant in the Industry Alliance described
in subparagraph (A); and
(ii) during the year described in clause (i), the
invention owner shall negotiate nonexclusive licenses
and royalties in good faith with any interested
participant in the Industry Alliance described in
subparagraph (A); and
(2) such other terms as the Secretary determines are
required to promote accelerated commercialization of inventions
made under the Initiative.
(g) National Academy Review.--The Secretary shall enter into an
arrangement with the National Academy of Sciences to conduct periodic
reviews of the Next Generation Lighting Initiative. The Academy shall
review the research priorities, technical milestones, and plans for
technology transfer and progress towards achieving them. The Secretary
shall consider the results of such reviews in evaluating the
information obtained under subsection (d)(2).
(h) Definitions.--As used in this section:
(1) Advanced solid-state lighting.--The term ``advanced
solid-state lighting'' means a semiconducting device package
and delivery system that produces white light using externally
applied voltage.
(2) Research.--The term ``research'' includes research on
the technologies, materials, and manufacturing processes
required for white light emitting diodes.
(3) Industry alliance.--The term ``Industry Alliance''
means an entity selected by the Secretary under subsection (c).
(4) White light emitting diode.--The term ``white light
emitting diode'' means a semiconducting package, utilizing
either organic or inorganic materials, that produces white
light using externally applied voltage.

SEC. 906. NATIONAL BUILDING PERFORMANCE INITIATIVE.

(a) Interagency Group.--Not later than 90 days after the date of
enactment of this Act, the Director of the Office of Science and
Technology Policy shall establish an interagency group to develop, in
coordination with the advisory committee established under subsection
(e), a National Building Performance Initiative (in this section
referred to as the ``Initiative''). The interagency group shall be co-
chaired by appropriate officials of the Department and the Department
of Commerce, who shall jointly arrange for the provision of necessary
administrative support to the group.
(b) Integration of Efforts.--The Initiative, working with the
National Institute of Building Sciences, shall integrate Federal,
State, and voluntary private sector efforts to reduce the costs of
construction, operation, maintenance, and renovation of commercial,
industrial, institutional, and residential buildings.
(c) Plan.--Not later than 1 year after the date of enactment of
this Act, the interagency group shall submit to Congress a plan for
carrying out the appropriate Federal role in the Initiative. The plan
shall include--
(1) research, development, demonstration, and commercial
application of systems and materials for new construction and
retrofit relating to the building envelope and building system
components; and
(2) the collection, analysis, and dissemination of research
results and other pertinent information on enhancing building
performance to industry, government entities, and the public.
(d) Department of Energy Role.--Within the Federal portion of the
Initiative, the Department shall be the lead agency for all aspects of
building performance related to use and conservation of energy.
(e) Advisory Committee.--
(1) Establishment.--The Secretary, in consultation with the
Secretary of Commerce and the Director of the Office of Science
and Technology Policy, shall establish an advisory committee
to--
(A) analyze and provide recommendations on
potential private sector roles and participation in the
Initiative; and
(B) review and provide recommendations on the plan
described in subsection (c).
(2) Membership.--Membership of the advisory committee shall
include representatives with a broad range of appropriate
expertise, including expertise in--
(A) building research and technology;
(B) architecture, engineering, and building
materials and systems; and
(C) the residential, commercial, and industrial
sectors of the construction industry.
(f) Construction.--Nothing in this section provides any Federal
agency with new authority to regulate building performance.

SEC. 907. SECONDARY ELECTRIC VEHICLE BATTERY USE PROGRAM.

(a) Definitions.--For purposes of this section:
(1) Associated equipment.--The term ``associated
equipment'' means equipment located where the batteries will be
used that is necessary to enable the use of the energy stored
in the batteries.
(2) Battery.--The term ``battery'' means an energy storage
device that previously has been used to provide motive power in
a vehicle powered in whole or in part by electricity.
(b) Program.--The Secretary shall establish and conduct a research,
development, demonstration, and commercial application program for the
secondary use of batteries if the Secretary finds that there are
sufficient numbers of such batteries to support the program. The
program shall be--
(1) designed to demonstrate the use of batteries in
secondary applications, including utility and commercial power
storage and power quality;
(2) structured to evaluate the performance, including
useful service life and costs, of such batteries in field
operations, and the necessary supporting infrastructure,
including reuse and disposal of batteries; and
(3) coordinated with ongoing secondary battery use programs
at the National Laboratories and in industry.
(c) Solicitation.--Not later than 180 days after the date of
enactment of this Act, if the Secretary finds under subsection (b) that
there are sufficient numbers of batteries to support the program, the
Secretary shall solicit proposals to demonstrate the secondary use of
batteries and associated equipment and supporting infrastructure in
geographic locations throughout the United States. The Secretary may
make additional solicitations for proposals if the Secretary determines
that such solicitations are necessary to carry out this section.
(d) Selection of Proposals.--
(1) In general.--The Secretary shall, not later than 90
days after the closing date established by the Secretary for
receipt of proposals under subsection (c), select up to 5
proposals which may receive financial assistance under this
section, subject to the availability of appropriations.
(2) Diversity; environmental effect.--In selecting
proposals, the Secretary shall consider diversity of battery
type, geographic and climatic diversity, and life-cycle
environmental effects of the approaches.
(3) Limitation.--No 1 project selected under this section
shall receive more than 25 percent of the funds authorized for
the program under this section.
(4) Optimization of federal resources.--The Secretary shall
consider the extent of involvement of State or local government
and other persons in each demonstration project to optimize use
of Federal resources.
(5) Other criteria.--The Secretary may consider such other
criteria as the Secretary considers appropriate.
(e) Conditions.--The Secretary shall require that--
(1) relevant information be provided to the Department, the
users of the batteries, the proposers, and the battery
manufacturers;
(2) the proposer provide at least 50 percent of the costs
associated with the proposal; and
(3) the proposer provide to the Secretary such information
regarding the disposal of the batteries as the Secretary may
require to ensure that the proposer disposes of the batteries
in accordance with applicable law.

SEC. 908. ENERGY EFFICIENCY SCIENCE INITIATIVE.

(a) Establishment.--The Secretary shall establish an Energy
Efficiency Science Initiative to be managed by the Assistant Secretary
in the Department with responsibility for energy conservation under
section 203(a)(9) of the Department of Energy Organization Act (42
U.S.C. 7133(a)(9)), in consultation with the Director of the Office of
Science, for grants to be competitively awarded and subject to peer
review for research relating to energy efficiency.
(b) Report.--The Secretary shall submit to Congress, along with the
President's annual budget request under section 1105(a) of title 31,
United States Code, a report on the activities of the Energy Efficiency
Science Initiative, including a description of the process used to
award the funds and an explanation of how the research relates to
energy efficiency.

SEC. 909. ELECTRIC MOTOR CONTROL TECHNOLOGY.

The Secretary shall conduct a research, development, demonstration,
and commercial application program on advanced control devices to
improve the energy efficiency of electric motors used in heating,
ventilation, air conditioning, and comparable systems.

SEC. 910. ADVANCED ENERGY TECHNOLOGY TRANSFER CENTERS.

(a) Grants.--Not later than 18 months after the date of enactment
of this Act, the Secretary shall make grants to nonprofit institutions,
State and local governments, or universities (or consortia thereof), to
establish a geographically dispersed network of Advanced Energy
Technology Transfer Centers, to be located in areas the Secretary
determines have the greatest need of the services of such Centers.
(b) Activities.--
(1) In general.--Each Center shall operate a program to
encourage demonstration and commercial application of advanced
energy methods and technologies through education and outreach
to building and industrial professionals, and to other
individuals and organizations with an interest in efficient
energy use.
(2) Advisory panel.--Each Center shall establish an
advisory panel to advise the Center on how best to accomplish
the activities under paragraph (1).
(c) Application.--A person seeking a grant under this section shall
submit to the Secretary an application in such form and containing such
information as the Secretary may require. The Secretary may award a
grant under this section to an entity already in existence if the
entity is otherwise eligible under this section.
(d) Selection Criteria.--The Secretary shall award grants under
this section on the basis of the following criteria, at a minimum:
(1) The ability of the applicant to carry out the
activities in subsection (b).
(2) The extent to which the applicant will coordinate the
activities of the Center with other entities, such as State and
local governments, utilities, and educational and research
institutions.
(e) Matching Funds.--The Secretary shall require a non-Federal
matching requirement of at least 50 percent of the costs of
establishing and operating each Center.
(f) Advisory Committee.--The Secretary shall establish an advisory
committee to advise the Secretary on the establishment of Centers under
this section. The advisory committee shall be composed of individuals
with expertise in the area of advanced energy methods and technologies,
including at least 1 representative from--
(1) State or local energy offices;
(2) energy professionals;
(3) trade or professional associations;
(4) architects, engineers, or construction professionals;
(5) manufacturers;
(6) the research community; and
(7) nonprofit energy or environmental organizations.
(g) Definitions.--For purposes of this section:
(1) Advanced energy methods and technologies.--The term
``advanced energy methods and technologies'' means all methods
and technologies that promote energy efficiency and
conservation, including distributed generation technologies,
and life-cycle analysis of energy use.
(2) Center.--The term ``Center'' means an Advanced Energy
Technology Transfer Center established pursuant to this
section.
(3) Distributed generation.--The term ``distributed
generation'' means an electric power generation facility that
is designed to serve retail electric consumers at or near the
facility site.

Subtitle B--Distributed Energy and Electric Energy Systems

SEC. 911. DISTRIBUTED ENERGY AND ELECTRIC ENERGY SYSTEMS.

(a) In General.--The following sums are authorized to be
appropriated to the Secretary for distributed energy and electric
energy systems activities, including activities authorized under this
subtitle:
(1) For fiscal year 2004, $190,000,000.
(2) For fiscal year 2005, $200,000,000.
(3) For fiscal year 2006, $220,000,000.
(4) For fiscal year 2007, $240,000,000.
(5) For fiscal year 2008, $260,000,000.
(b) Micro-Cogeneration Energy Technology.--From amounts authorized
under subsection (a), $20,000,000 for each of fiscal years 2004 and
2005 is authorized for activities under section 914.

SEC. 912. HYBRID DISTRIBUTED POWER SYSTEMS.

(a) Requirement.--Not later than 1 year after the date of enactment
of this Act, the Secretary shall develop and transmit to Congress a
strategy for a comprehensive research, development, demonstration, and
commercial application program to develop hybrid distributed power
systems that combine--
(1) 1 or more renewable electric power generation
technologies of 10 megawatts or less located near the site of
electric energy use; and
(2) nonintermittent electric power generation technologies
suitable for use in a distributed power system.
(b) Contents.--The strategy shall--
(1) identify the needs best met with such hybrid
distributed power systems and the technological barriers to the
use of such systems;
(2) provide for the development of methods to design, test,
integrate into systems, and operate such hybrid distributed
power systems;
(3) include, as appropriate, research, development,
demonstration, and commercial application on related
technologies needed for the adoption of such hybrid distributed
power systems, including energy storage devices and
environmental control technologies;
(4) include research, development, demonstration, and
commercial application of interconnection technologies for
communications and controls of distributed generation
architectures, particularly technologies promoting real-time
response to power market information and physical conditions on
the electrical grid; and
(5) describe how activities under the strategy will be
integrated with other research, development, demonstration, and
commercial application activities supported by the Department
related to electric power technologies.

SEC. 913. HIGH POWER DENSITY INDUSTRY PROGRAM.

The Secretary shall establish a comprehensive research,
development, demonstration, and commercial application program to
improve energy efficiency of high power density facilities, including
data centers, server farms, and telecommunications facilities. Such
program shall consider technologies that provide significant
improvement in thermal controls, metering, load management, peak load
reduction, or the efficient cooling of electronics.

SEC. 914. MICRO-COGENERATION ENERGY TECHNOLOGY.

The Secretary shall make competitive, merit-based grants to
consortia for the development of micro-cogeneration energy technology.
The consortia shall explore--
(1) the use of small-scale combined heat and power in
residential heating appliances; and
(2) the use of excess power to operate other appliances
within the residence and supply excess generated power to the
power grid.

SEC. 915. DISTRIBUTED ENERGY TECHNOLOGY DEMONSTRATION PROGRAM.

The Secretary, within the sums authorized under section 911(a),
may provide financial assistance to coordinating consortia of
interdisciplinary participants for demonstrations designed to
accelerate the utilization of distributed energy technologies, such as
fuel cells, microturbines, reciprocating engines, thermally activated
technologies, and combined heat and power systems, in highly energy
intensive commercial applications.

SEC. 916. RECIPROCATING POWER.

The Secretary shall conduct a research, development, and
demonstration program regarding fuel system optimization and emissions
reduction after-treatment technologies for industrial reciprocating
engines. Such after-treatment technologies shall use processes that
reduce emissions by recirculating exhaust gases and shall be designed
to be retrofitted to any new or existing diesel or natural gas engine
used for power generation, peaking power generation, combined heat and
power, or compression.

Subtitle C--Renewable Energy

SEC. 918. RENEWABLE ENERGY.

(a) In General.--The following sums are authorized to be
appropriated to the Secretary for renewable energy research,
development, demonstration, and commercial application activities,
including activities authorized under this subtitle:
(1) For fiscal year 2004, $480,000,000.
(2) For fiscal year 2005, $550,000,000.
(3) For fiscal year 2006, $610,000,000.
(4) For fiscal year 2007, $659,000,000.
(5) For fiscal year 2008, $710,000,000.
(b) Bioenergy.--From the amounts authorized under subsection (a),
the following sums are authorized to be appropriated to carry out
section 919:
(1) For fiscal year 2004, $135,425,000.
(2) For fiscal year 2005, $155,600,000.
(3) For fiscal year 2006, $167,650,000.
(4) For fiscal year 2007, $180,000,000.
(5) For fiscal year 2008, $192,000,000.
(c) Concentrating Solar Power.--From amounts authorized under
subsection (a), the following sums are authorized to be appropriated to
carry out section 920:
(1) For fiscal year 2004, $20,000,000.
(2) For fiscal year 2005, $40,000,000.
(3) For each of fiscal years 2006, 2007 and 2008,
$50,000,000.
(d) Public Buildings.--From the amounts authorized under subsection
(a), $30,000,000 for each of the fiscal years 2004 through 2008 are
authorized to be appropriated to carry out section 922.
(e) Limits on Use of Funds.--
(1) No funds for renewable support and implementation.--
None of the funds authorized to be appropriated under this
section may be used for Renewable Support and Implementation.
(2) Grants.--Of the funds authorized under subsection (b),
not less than $5,000,000 for each fiscal year shall be made
available for grants to Historically Black Colleges and
Universities, Tribal Colleges, and Hispanic-Serving
Institutions.
(3) Regional field verification program.--Of the funds
authorized under subsection (a), not less than $4,000,000 for
each fiscal year shall be made available for the Regional Field
Verification Program of the Department.
(4) Off-stream pumped storage hydropower.--Of the funds
authorized under subsection (a), such sums as may be necessary
shall be made available for demonstration projects of off-
stream pumped storage hydropower.
(f) Consultation.--In carrying out this subtitle, the Secretary, in
consultation with the Secretary of Agriculture, shall demonstrate the
use of advanced wind power technology, including combined use with coal
gasification; biomass; geothermal energy systems; and other renewable
energy technologies to assist in delivering electricity to rural and
remote locations.

SEC. 919. BIOENERGY PROGRAMS.

(a) Definitions.--For the purposes of this section:
(1) The term ``agricultural byproducts'' includes waste
products, including poultry fat and poultry waste.
(2) The term ``cellulosic biomass'' means any portion of a
crop containing lignocellulose or hemicellulose, including
barley grain, grapeseed, forest thinnings, rice bran, rice
hulls, rice straw, soybean matter, and sugarcane bagasse, or
any crop grown specifically for the purpose of producing
cellulosic feedstocks.
(b) Program.--The Secretary shall conduct a program of research,
development, demonstration, and commercial application for bioenergy,
including--
(1) biopower energy systems;
(2) biofuels;
(3) bio-based products;
(4) integrated biorefineries that may produce biopower,
biofuels, and bio-based products;
(5) cross-cutting research and development in feedstocks
and enzymes; and
(6) economic analysis.
(c) Biofuels and Bio-Based Products.--The goals of the biofuels and
bio-based products programs shall be to develop, in partnership with
industry--
(1) advanced biochemical and thermochemical conversion
technologies capable of making biofuels that are price-
competitive with gasoline or diesel in either internal
combustion engines or fuel cell-powered vehicles, and bio-based
products from a variety of feedstocks, including grains,
cellulosic biomass, and other agricultural byproducts; and
(2) advanced biotechnology processes capable of making
biofuels and bio-based products with emphasis on development of
biorefinery technologies using enzyme-based processing systems.

SEC. 920. CONCENTRATING SOLAR POWER RESEARCH AND DEVELOPMENT PROGRAM.

(a) In General.--The Secretary shall conduct a program of research
and development to evaluate the potential of concentrating solar power
for hydrogen production, including cogeneration approaches for both
hydrogen and electricity. Such program shall take advantage of existing
facilities to the extent possible and shall include--
(1) development of optimized technologies that are common
to both electricity and hydrogen production;
(2) evaluation of thermochemical cycles for hydrogen
production at the temperatures attainable with concentrating
solar power;
(3) evaluation of materials issues for the thermochemical
cycles described in paragraph (2);
(4) system architectures and economics studies; and
(5) coordination with activities in the Advanced Reactor
Hydrogen Cogeneration Project on high temperature materials,
thermochemical cycles, and economic issues.
(b) Assessment.--In carrying out the program under this section,
the Secretary shall--
(1) assess conflicting guidance on the economic potential
of concentrating solar power for electricity production
received from the National Research Council report entitled
``Renewable Power Pathways: A Review of the U.S. Department of
Energy's Renewable Energy Programs'' in 2000 and subsequent
Department-funded reviews of that report; and
(2) provide an assessment of the potential impact of the
technology before, or concurrent with, submission of the fiscal
year 2006 budget.
(c) Report.--Not later than 5 years after the date of enactment of
this Act, the Secretary shall provide a report to Congress on the
economic and technical potential for electricity or hydrogen
production, with or without cogeneration, with concentrating solar
power, including the economic and technical feasibility of potential
construction of a pilot demonstration facility suitable for commercial
production of electricity or hydrogen from concentrating solar power.

SEC. 921. MISCELLANEOUS PROJECTS.

The Secretary may conduct research, development, demonstration, and
commercial application programs for--
(1) ocean energy, including wave energy; and
(2) the combined use of renewable energy technologies with
one another and with other energy technologies, including the
combined use of wind power and coal gasification technologies.

SEC. 922. RENEWABLE ENERGY IN PUBLIC BUILDINGS.

(a) Demonstration and Technology Transfer Program.--The Secretary
shall establish a program for the demonstration of innovative
technologies for solar and other renewable energy sources in buildings
owned or operated by a State or local government, and for the
dissemination of information resulting from such demonstration to
interested parties.
(b) Limit on Federal Funding.--The Secretary shall provide under
this section no more than 40 percent of the incremental costs of the
solar or other renewable energy source project funded.
(c) Requirement.--As part of the application for awards under this
section, the Secretary shall require all applicants--
(1) to demonstrate a continuing commitment to the use of
solar and other renewable energy sources in buildings they own
or operate; and
(2) to state how they expect any award to further their
transition to the significant use of renewable energy.

SEC. 923. STUDY OF MARINE RENEWABLE ENERGY OPTIONS.

(a) In General.--The Secretary shall enter into an arrangement with
the National Academy of Sciences to conduct a study on--
(1) the feasibility of various methods of renewable
generation of energy from the ocean, including energy from
waves, tides, currents, and thermal gradients; and
(2) the research, development, demonstration, and
commercial application activities required to make marine
renewable energy generation competitive with other forms of
electricity generation.
(b) Transmittal.--Not later than 1 year after the date of enactment
of this Act, the Secretary shall transmit the study to Congress along
with the Secretary's recommendations for implementing the results of
the study.

Subtitle D--Nuclear Energy

SEC. 924. NUCLEAR ENERGY.

(a) Core Programs.--The following sums are authorized to be
appropriated to the Secretary for nuclear energy research, development,
demonstration, and commercial application activities, including
activities authorized under this subtitle, other than those described
in subsection (b):
(1) For fiscal year 2004, $273,000,000.
(2) For fiscal year 2005, $355,000,000.
(3) For fiscal year 2006, $430,000,000.
(4) For fiscal year 2007, $455,000,000.
(5) For fiscal year 2008, $545,000,000.
(b) Nuclear Infrastructure Support.--The following sums are
authorized to be appropriated to the Secretary for activities under
section 925(e):
(1) For fiscal year 2004, $125,000,000.
(2) For fiscal year 2005, $130,000,000.
(3) For fiscal year 2006, $135,000,000.
(4) For fiscal year 2007, $140,000,000.
(5) For fiscal year 2008, $145,000,000.
(c) Allocations.--From amounts authorized under subsection (a), the
following sums are authorized:
(1) For activities under section 926--
(A) for fiscal year 2004, $140,000,000;
(B) for fiscal year 2005, $145,000,000;
(C) for fiscal year 2006, $150,000,000;
(D) for fiscal year 2007, $155,000,000; and
(E) for fiscal year 2008, $275,000,000.
(2) For activities under section 927--
(A) for fiscal year 2004, $35,200,000;
(B) for fiscal year 2005, $44,350,000;
(C) for fiscal year 2006, $49,200,000;
(D) for fiscal year 2007, $54,950,000; and
(E) for fiscal year 2008, $60,000,000.
(3) For activities under section 929, for each of fiscal
years 2004 through 2008, $6,000,000.
(d) Limitation on Use of Funds.--None of the funds authorized under
this section may be used for decommissioning the Fast Flux Test
Facility.

SEC. 925. NUCLEAR ENERGY RESEARCH AND DEVELOPMENT PROGRAMS.

(a) Nuclear Energy Research Initiative.--The Secretary shall carry
out a Nuclear Energy Research Initiative for research and development
related to nuclear energy.
(b) Nuclear Energy Plant Optimization Program.--The Secretary shall
carry out a Nuclear Energy Plant Optimization Program to support
research and development activities addressing reliability,
availability, productivity, component aging, safety, and security of
existing nuclear power plants.
(c) Nuclear Power 2010 Program.--The Secretary shall carry out a
Nuclear Power 2010 Program, consistent with recommendations in the
October 2001 report entitled ``A Roadmap to Deploy New Nuclear Power
Plants in the United States by 2010'' issued by the Nuclear Energy
Research Advisory Committee of the Department. Whatever type of reactor
is chosen for the hydrogen cogeneration project under subtitle C of
title VI, that type shall not be addressed in the Program under this
section. The Program shall include--
(1) support for first-of-a-kind engineering design and
certification expenses of advanced nuclear power plant designs,
which offer improved safety and economics over current
conventional plants and the promise of near-term to medium-term
commercial deployment;
(2) action by the Secretary to encourage domestic power
companies to install new nuclear plant capacity as soon as
possible;
(3) utilization of the expertise and capabilities of
industry, universities, and National Laboratories in evaluation
of advanced nuclear fuel cycles and fuels testing;
(4) consideration of proliferation-resistant passively-
safe, small reactors suitable for long-term electricity
production without refueling and suitable for use in remote
installations;
(5) participation of international collaborators in
research, development, design, and deployment efforts as
appropriate and consistent with United States interests in
nonproliferation of nuclear weapons;
(6) encouragement for university and industry
participation; and
(7) selection of projects such as to strengthen the
competitive position of the domestic nuclear power industrial
infrastructure.
(d) Generation IV Nuclear Energy Systems Initiative.--The Secretary
shall carry out a Generation IV Nuclear Energy Systems Initiative to
develop an overall technology plan and to support research and
development necessary to make an informed technical decision about the
most promising candidates for eventual commercial application. The
Initiative shall examine advanced proliferation-resistant and passively
safe reactor designs, including designs that--
(1) are economically competitive with other electric power
generation plants;
(2) have higher efficiency, lower cost, and improved safety
compared to reactors in operation on the date of enactment of
this Act;
(3) use fuels that are proliferation-resistant and have
substantially reduced production of high-level waste per unit
of output; and
(4) use improved instrumentation.
(e) Nuclear Infrastructure Support.--The Secretary shall develop
and implement a strategy for the facilities of the Office of Nuclear
Energy, Science, and Technology and shall transmit a report containing
the strategy along with the President's budget request to Congress for
fiscal year 2006.

SEC. 926. ADVANCED FUEL CYCLE INITIATIVE.

(a) In General.--The Secretary, through the Director of the Office
of Nuclear Energy, Science, and Technology, shall conduct an advanced
fuel recycling technology research and development program to evaluate
proliferation-resistant fuel recycling and transmutation technologies
that minimize environmental or public health and safety impacts as an
alternative to aqueous reprocessing technologies deployed as of the
date of enactment of this Act in support of evaluation of alternative
national strategies for spent nuclear fuel and the Generation IV
advanced reactor concepts, subject to annual review by the Secretary's
Nuclear Energy Research Advisory Committee or other independent entity,
as appropriate. Opportunities to enhance progress of the program
through international cooperation should be sought.
(b) Reports.--The Secretary shall report on the activities of the
advanced fuel recycling technology research and development program as
part of the Department's annual budget submission.

SEC. 927. UNIVERSITY NUCLEAR SCIENCE AND ENGINEERING SUPPORT.

(a) Establishment.--The Secretary shall support a program to invest
in human resources and infrastructure in the nuclear sciences and
engineering and related fields (including health physics and nuclear
and radiochemistry), consistent with departmental missions related to
civilian nuclear research and development.
(b) Duties.--In carrying out the program under this section, the
Secretary shall establish fellowship and faculty assistance programs,
as well as provide support for fundamental research and encourage
collaborative research among industry, National Laboratories, and
universities through the Nuclear Energy Research Initiative. The
Secretary is encouraged to support activities addressing the entire
fuel cycle through involvement of both the Office of Nuclear Energy,
Science, and Technology and the Office of Civilian Radioactive Waste
Management. The Secretary shall support communication and outreach
related to nuclear science, engineering, and nuclear waste management,
consistent with interests of the United States in nonproliferation of
nuclear weapons capabilities.
(c) Strengthening University Research and Training Reactors and
Associated Infrastructure.--Activities under this section may include--
(1) converting research and training reactors currently
using high-enrichment fuels to low-enrichment fuels, upgrading
operational instrumentation, and sharing of reactors among
institutions of higher education;
(2) providing technical assistance, in collaboration with
the United States nuclear industry, in relicensing and
upgrading research and training reactors as part of a student
training program; and
(3) providing funding, through the Innovations in Nuclear
Infrastructure and Education Program, for reactor improvements
as part of a focused effort that emphasizes research, training,
and education.
(d) University National Laboratory Interactions.--The Secretary
shall develop sabbatical fellowship and visiting scientist programs to
encourage sharing of personnel between National Laboratories and
universities.
(e) Operating and Maintenance Costs.--Funding for a research
project provided under this section may be used to offset a portion of
the operating and maintenance costs of a research and training reactor
at an institution of higher education used in the research project.

SEC. 928. SECURITY OF REACTOR DESIGNS.

The Secretary, through the Director of the Office of Nuclear
Energy, Science, and Technology, shall conduct a research and
development program on cost-effective technologies for increasing the
safety of reactor designs from natural phenomena and the security of
reactor designs from deliberate attacks.

SEC. 929. ALTERNATIVES TO INDUSTRIAL RADIOACTIVE SOURCES.

(a) Study.--The Secretary shall conduct a study and provide a
report to Congress not later than August 1, 2004. The study shall--
(1) survey industrial applications of large radioactive
sources, including well-logging sources;
(2) review current domestic and international Department,
Department of Defense, Department of State, and commercial
programs to manage and dispose of radioactive sources;
(3) discuss disposal options and practices for currently
deployed or future sources and, if deficiencies are noted in
existing disposal options or practices for either deployed or
future sources, recommend options to remedy deficiencies; and
(4) develop a program plan for research and development to
develop alternatives to large industrial sources that reduce
safety, environmental, or proliferation risks to either workers
using the sources or the public.
(b) Program.--The Secretary shall establish a research and
development program to implement the program plan developed under
subsection (a)(4). The program shall include miniaturized particle
accelerators for well-logging or other industrial applications and
portable accelerators for production of short-lived radioactive
materials at an industrial site.

SEC. 930. GEOLOGICAL ISOLATION OF SPENT FUEL.

The Secretary shall conduct a study to determine the feasibility of
deep borehole disposal of spent nuclear fuel and high-level radioactive
waste. The study shall emphasize geological, chemical, and hydrological
characterization of, and design of engineered structures for, deep
borehole environments. Not later than 1 year after the date of
enactment of this Act, the Secretary shall transmit the study to
Congress.

Subtitle E--Fossil Energy

PART I--RESEARCH PROGRAMS

SEC. 931. FOSSIL ENERGY.

(a) In General.--The following sums are authorized to be
appropriated to the Secretary for fossil energy research, development,
demonstration, and commercial application activities, including
activities authorized under this part:
(1) For fiscal year 2004, $530,000,000.
(2) For fiscal year 2005, $556,000,000.
(3) For fiscal year 2006, $583,000,000.
(4) For fiscal year 2007, $611,000,000.
(5) For fiscal year 2008, $626,000,000.
(b) Allocations.--From amounts authorized under subsection (a), the
following sums are authorized:
(1) For activities under section 932(b)(2), $28,000,000 for
each of the fiscal years 2004 through 2008.
(2) For activities under section 934--
(A) for fiscal year 2004, $12,000,000;
(B) for fiscal year 2005, $15,000,000; and
(C) for each of fiscal years 2006 through 2008,
$20,000,000.
(3) For activities under section 935--
(A) for fiscal year 2004, $259,000,000;
(B) for fiscal year 2005, $272,000,000;
(C) for fiscal year 2006, $285,000,000;
(D) for fiscal year 2007, $298,000,000; and
(E) for fiscal year 2008, $308,000,000.
(4) For the Office of Arctic Energy under section 3197 of
the Floyd D. Spence National Defense Authorization Act for
Fiscal Year 2001 (42 U.S.C. 7144d), $25,000,000 for each of
fiscal years 2004 through 2008.
(5) For activities under section 933, $4,000,000 for fiscal
year 2004 and $2,000,000 for each of fiscal years 2005 through
2008.
(c) Extended Authorization.--There are authorized to be
appropriated to the Secretary for the Office of Arctic Energy under
section 3197 of the Floyd D. Spence National Defense Authorization Act
for Fiscal Year 2001 (42 U.S.C. 7144d), $25,000,000 for each of fiscal
years 2009 through 2012.
(d) Limits on Use of Funds.--
(1) No funds for certain programs.--None of the funds
authorized under this section may be used for Fossil Energy
Environmental Restoration or Import/Export Authorization.
(2) Institutions of higher education.--Of the funds
authorized under subsection (b)(2), not less than 20 percent of
the funds appropriated for each fiscal year shall be dedicated
to research and development carried out at institutions of
higher education.

SEC. 932. OIL AND GAS RESEARCH PROGRAMS.

(a) Oil and Gas Research.--The Secretary shall conduct a program of
research, development, demonstration, and commercial application on oil
and gas, including--
(1) exploration and production;
(2) gas hydrates;
(3) reservoir life and extension;
(4) transportation and distribution infrastructure;
(5) ultraclean fuels;
(6) heavy oil and oil shale;
(7) related environmental research; and
(8) compressed natural gas marine transport.
(b) Fuel Cells.--
(1) In general.--The Secretary shall conduct a program of
research, development, demonstration, and commercial
application on fuel cells for low-cost, high-efficiency, fuel-
flexible, modular power systems.
(2) Improved manufacturing production and processes.--The
demonstrations under paragraph (1) shall include fuel cell
technology for commercial, residential, and transportation
applications, and distributed generation systems, utilizing
improved manufacturing production and processes.
(c) Natural Gas and Oil Deposits Report.--Not later than 2 years
after the date of enactment of this Act, and every 2 years thereafter,
the Secretary of the Interior, in consultation with other appropriate
Federal agencies, shall transmit a report to Congress of the latest
estimates of natural gas and oil reserves, reserves growth, and
undiscovered resources in Federal and State waters off the coast of
Louisiana and Texas.
(d) Integrated Clean Power and Energy Research.--
(1) National center or consortium of excellence.--The
Secretary shall establish a national center or consortium of
excellence in clean energy and power generation, utilizing the
resources of the existing Clean Power and Energy Research
Consortium, to address the Nation's critical dependence on
energy and the need to reduce emissions.
(2) Program.--The center or consortium shall conduct a
program of research, development, demonstration, and commercial
application on integrating the following focus areas:
(A) Efficiency and reliability of gas turbines for
power generation.
(B) Reduction in emissions from power generation.
(C) Promotion of energy conservation issues.
(D) Effectively utilizing alternative fuels and
renewable energy.
(E) Development of advanced materials technology
for oil and gas exploration and utilization in harsh
environments.
(F) Education on energy and power generation
issues.

SEC. 933. TECHNOLOGY TRANSFER.

The Secretary shall establish a competitive program to award a
contract to a nonprofit entity for the purpose of transferring
technologies developed with public funds. The entity selected under
this section shall have experience in offshore oil and gas technology
research management, in the transfer of technologies developed with
public funds to the offshore and maritime industry, and in management
of an offshore and maritime industry consortium. The program consortium
selected under section 942 shall not be eligible for selection under
this section. When appropriate, the Secretary shall consider utilizing
the entity selected under this section when implementing the activities
authorized by section 975.

SEC. 934. RESEARCH AND DEVELOPMENT FOR COAL MINING TECHNOLOGIES.

(a) Establishment.--The Secretary shall carry out a program of
research and development on coal mining technologies. The Secretary
shall cooperate with appropriate Federal agencies, coal producers,
trade associations, equipment manufacturers, institutions of higher
education with mining engineering departments, and other relevant
entities.
(b) Program.--The research and development activities carried out
under this section shall--
(1) be guided by the mining research and development
priorities identified by the Mining Industry of the Future
Program and in the recommendations from relevant reports of the
National Academy of Sciences on mining technologies;
(2) include activities exploring minimization of
contaminants in mined coal that contribute to environmental
concerns including development and demonstration of
electromagnetic wave imaging ahead of mining operations;
(3) develop and demonstrate electromagnetic wave imaging
and radar techniques for horizontal drilling in coal beds in
order to increase methane recovery efficiency, prevent spoilage
of domestic coal reserves, and minimize water disposal
associated with methane extraction; and
(4) expand mining research capabilities at institutions of
higher education.

SEC. 935. COAL AND RELATED TECHNOLOGIES PROGRAM.

(a) In General.--In addition to the programs authorized under title
IV, the Secretary shall conduct a program of technology research,
development, demonstration, and commercial application for coal and
power systems, including programs to facilitate production and
generation of coal-based power through--
(1) innovations for existing plants;
(2) integrated gasification combined cycle;
(3) advanced combustion systems;
(4) turbines for synthesis gas derived from coal;
(5) carbon capture and sequestration research and
development;
(6) coal-derived transportation fuels and chemicals;
(7) solid fuels and feedstocks;
(8) advanced coal-related research;
(9) advanced separation technologies; and
(10) a joint project for permeability enhancement in coals
for natural gas production and carbon dioxide sequestration.
(b) Cost and Performance Goals.--In carrying out programs
authorized by this section, the Secretary shall identify cost and
performance goals for coal-based technologies that would permit the
continued cost-competitive use of coal for electricity generation, as
chemical feedstocks, and as transportation fuel in 2007, 2015, and the
years after 2020. In establishing such cost and performance goals, the
Secretary shall--
(1) consider activities and studies undertaken to date by
industry in cooperation with the Department in support of such
assessment;
(2) consult with interested entities, including coal
producers, industries using coal, organizations to promote coal
and advanced coal technologies, environmental organizations,
and organizations representing workers;
(3) not later than 120 days after the date of enactment of
this Act, publish in the Federal Register proposed draft cost
and performance goals for public comments; and
(4) not later than 180 days after the date of enactment of
this Act and every 4 years thereafter, submit to Congress a
report describing final cost and performance goals for such
technologies that includes a list of technical milestones as
well as an explanation of how programs authorized in this
section will not duplicate the activities authorized under the
Clean Coal Power Initiative authorized under subtitle A of
title IV.

SEC. 936. COMPLEX WELL TECHNOLOGY TESTING FACILITY.

The Secretary, in coordination with industry leaders in extended
research drilling technology, shall establish a Complex Well Technology
Testing Facility at the Rocky Mountain Oilfield Testing Center to
increase the range of extended drilling technologies.

SEC. 937. FISCHER-TROPSCH DIESEL FUEL LOAN GUARANTEE PROGRAM.

(a) Definition of Fischer-Tropsch Diesel Fuel.--In this section,
the term ``Fischer-Tropsch diesel fuel'' means diesel fuel that--
(1) contains less than 10 parts per million sulfur; and
(2) is produced through the Fischer-Tropsch liquification
process from coal or waste from coal that was mined in the
United States.
(b) Loan Guarantees.--
(1) Establishment of program.--The Secretary of Energy
shall establish a program to provide guarantees of loans by
private lending institutions for the construction of facilities
for the production of Fischer-Tropsch diesel fuel and
commercial byproducts of that production.
(2) Requirements.--The Secretary may provide a loan
guarantee under paragraph (1) if--
(A) without a loan guarantee, credit is not
available to the applicant under reasonable terms or
conditions sufficient to finance the construction of a
facility described in paragraph (1);
(B) the prospective earning power of the applicant
and the character and value of the security pledged
provide a reasonable assurance of repayment of the loan
to be guaranteed in accordance with the terms of the
loan; and
(C) the loan bears interest at a rate determined by
the Secretary to be reasonable, taking into account the
current average yield on outstanding obligations of the
United States with remaining periods of maturity
comparable to the maturity of the loan.
(3) Criteria.--In selecting recipients of loan guarantees
from among applicants, the Secretary shall give preference to
proposals that--
(A) meet all Federal and State permitting
requirements;
(B) are most likely to be successful; and
(C) are located in local markets that have the
greatest need for the facility because of--
(i) the availability of domestic coal or
coal waste for conversion; or
(ii) a projected high level of demand for
Fischer-Tropsch diesel fuel or other commercial
byproducts of the facility.
(4) Maturity.--A loan guaranteed under paragraph (1) shall
have a maturity of not more than 25 years.
(5) Terms and conditions.--The loan agreement for a loan
guaranteed under paragraph (1) shall provide that no provision
of the loan may be amended or waived without the consent of the
Secretary.
(6) Guarantee fee.--A recipient of a loan guarantee under
paragraph (1) shall pay the Secretary an amount to be
determined by the Secretary to be sufficient to cover the
administrative costs of the Secretary relating to the loan
guarantee.
(7) Full faith and credit.--
(A) In general.--The full faith and credit of the
United States is pledged to payment of loan guarantees
made under this section.
(B) Conclusive evidence.--Any loan guarantee made
by the Secretary under this section shall be conclusive
evidence of the eligibility of the loan for the
guarantee with respect to principal and interest.
(C) Validity.--The validity of a loan guarantee
shall be incontestable in the hands of a holder of the
guaranteed loan.
(8) Reports.--Until each guaranteed loan under this section
is repaid in full, the Secretary shall annually submit to
Congress a report on the activities of the Secretary under this
section.
(9) Authorization of appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out this
section.
(10) Termination of authority.--The authority of the
Secretary to issue a new loan guarantee under paragraph (1)
terminates on the date that is 5 years after the date of
enactment of this Act.

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

SEC. 941. PROGRAM AUTHORITY.

(a) In General.--The Secretary shall carry out a program under this
part of research, development, demonstration, and commercial
application of technologies for ultra-deepwater and unconventional
natural gas and other petroleum resource exploration and production,
including addressing the technology challenges for small producers,
safe operations, and environmental mitigation (including reduction of
greenhouse gas emissions and sequestration of carbon).
(b) Program Elements.--The program under this part shall address
the following areas, including improving safety and minimizing
environmental impacts of activities within each area:
(1) Ultra-deepwater technology, including drilling to
formations in the Outer Continental Shelf to depths greater
than 15,000 feet.
(2) Ultra-deepwater architecture.
(3) Unconventional natural gas and other petroleum resource
exploration and production technology, including the technology
challenges of small producers.
(c) Limitation on Location of Field Activities.--Field activities
under the program under this part shall be carried out only--
(1) in--
(A) areas in the territorial waters of the United
States not under any Outer Continental Shelf moratorium
as of September 30, 2002;
(B) areas onshore in the United States on public
land administered by the Secretary of the Interior
available for oil and gas leasing, where consistent
with applicable law and land use plans; and
(C) areas onshore in the United States on State or
private land, subject to applicable law; and
(2) with the approval of the appropriate Federal or State
land management agency or private land owner.
(d) Research at National Energy Technology Laboratory.--The
Secretary, through the National Energy Technology Laboratory, shall
carry out research complementary to research under subsection (b).
(e) Consultation With Secretary of the Interior.--In carrying out
this part, the Secretary shall consult regularly with the Secretary of
the Interior.

SEC. 942. ULTRA-DEEPWATER PROGRAM.

(a) In General.--The Secretary shall carry out the activities under
section 941(a), to maximize the use of the ultra-deepwater natural gas
and other petroleum resources of the United States by increasing the
supply of such resources, through reducing the cost and increasing the
efficiency of exploration for and production of such resources, while
improving safety and minimizing environmental impacts.
(b) Role of the Secretary.--The Secretary shall have ultimate
responsibility for, and oversight of, all aspects of the program under
this section.
(c) Role of the Program Consortium.--
(1) In general.--The Secretary may contract with a
consortium to--
(A) manage awards pursuant to subsection (f)(4);
(B) make recommendations to the Secretary for
project solicitations;
(C) disburse funds awarded under subsection (f) as
directed by the Secretary in accordance with the annual
plan under subsection (e); and
(D) carry out other activities assigned to the
program consortium by this section.
(2) Limitation.--The Secretary may not assign any
activities to the program consortium except as specifically
authorized under this section.
(3) Conflict of interest.--
(A) Procedures.--The Secretary shall establish
procedures--
(i) to ensure that each board member,
officer, or employee of the program consortium
who is in a decision-making capacity under
subsection (f)(3) or (4) shall disclose to the
Secretary any financial interests in, or
financial relationships with, applicants for or
recipients of awards under this section,
including those of his or her spouse or minor
child, unless such relationships or interests
would be considered to be remote or
inconsequential; and
(ii) to require any board member, officer,
or employee with a financial relationship or
interest disclosed under clause (i) to recuse
himself or herself from any review under
subsection (f)(3) or oversight under subsection
(f)(4) with respect to such applicant or
recipient.
(B) Failure to comply.--The Secretary may
disqualify an application or revoke an award under this
section if a board member, officer, or employee has
failed to comply with procedures required under
subparagraph (A)(ii).
(d) Selection of the Program Consortium.--
(1) In general.--The Secretary shall select the program
consortium through an open, competitive process.
(2) Members.--The program consortium may include
corporations, trade associations, institutions of higher
education, National Laboratories, or other research
institutions. After submitting a proposal under paragraph (4),
the program consortium may not add members without the consent
of the Secretary.
(3) Tax status.--The program consortium shall be an entity
that is exempt from tax under section 501(c)(3) of the Internal
Revenue Code of 1986.
(4) Schedule.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall solicit proposals
from eligible consortia to perform the duties in subsection
(c)(1), which shall be submitted not later than 360 days after
the date of enactment of this Act. The Secretary shall select
the program consortium not later than 18 months after such date
of enactment.
(5) Application.--Applicants shall submit a proposal
including such information as the Secretary may require. At a
minimum, each proposal shall--
(A) list all members of the consortium;
(B) fully describe the structure of the consortium,
including any provisions relating to intellectual
property; and
(C) describe how the applicant would carry out the
activities of the program consortium under this
section.
(6) Eligibility.--To be eligible to be selected as the
program consortium, an applicant must be an entity whose
members collectively have demonstrated capabilities in planning
and managing research, development, demonstration, and
commercial application programs in natural gas or other
petroleum exploration or production.
(7) Criterion.--The Secretary shall consider the amount of
the fee an applicant proposes to receive under subsection (g)
in selecting a consortium under this section.
(e) Annual Plan.--
(1) In general.--The program under this section shall be
carried out pursuant to an annual plan prepared by the
Secretary in accordance with paragraph (2).
(2) Development.--
(A) Solicitation of recommendations.--Before
drafting an annual plan under this subsection, the
Secretary shall solicit specific written
recommendations from the program consortium for each
element to be addressed in the plan, including those
described in paragraph (4). The Secretary may request
that the program consortium submit its recommendations
in the form of a draft annual plan.
(B) Submission of recommendations; other comment.--
The Secretary shall submit the recommendations of the
program consortium under subparagraph (A) to the Ultra-
Deepwater Advisory Committee established under section
945(a) for review, and such Advisory Committee shall
provide to the Secretary written comments by a date
determined by the Secretary. The Secretary may also
solicit comments from any other experts.
(C) Consultation.--The Secretary shall consult
regularly with the program consortium throughout the
preparation of the annual plan.
(3) Publication.--The Secretary shall transmit to Congress
and publish in the Federal Register the annual plan, along with
any written comments received under paragraph (2)(A) and (B).
(4) Contents.--The annual plan shall describe the ongoing
and prospective activities of the program under this section
and shall include--
(A) a list of any solicitations for awards that the
Secretary plans to issue to carry out research,
development, demonstration, or commercial application
activities, including the topics for such work, who
would be eligible to apply, selection criteria, and the
duration of awards; and
(B) a description of the activities expected of the
program consortium to carry out subsection (f)(4).
(5) Estimates of increased royalty receipts.--The
Secretary, in consultation with the Secretary of the Interior,
shall provide an annual report to Congress with the President's
budget on the estimated cumulative increase in Federal royalty
receipts (if any) resulting from the implementation of this
part. The initial report under this paragraph shall be
submitted in the first President's budget following the
completion of the first annual plan required under this
subsection.
(f) Awards.--
(1) In general.--The Secretary shall make awards to carry
out research, development, demonstration, and commercial
application activities under the program under this section.
The program consortium shall not be eligible to receive such
awards, but members of the program consortium may receive such
awards.
(2) Proposals.--The Secretary shall solicit proposals for
awards under this subsection in such manner and at such time as
the Secretary may prescribe, in consultation with the program
consortium.
(3) Review.--The Secretary shall make awards under this
subsection through a competitive process, which shall include a
review by individuals selected by the Secretary. Such
individuals shall include, for each application, Federal
officials, the program consortium, and non-Federal experts who
are not board members, officers, or employees of the program
consortium or of a member of the program consortium.
(4) Oversight.--
(A) In general.--The program consortium shall
oversee the implementation of awards under this
subsection, consistent with the annual plan under
subsection (e), including disbursing funds and
monitoring activities carried out under such awards for
compliance with the terms and conditions of the awards.
(B) Effect.--Nothing in subparagraph (A) shall
limit the authority or responsibility of the Secretary
to oversee awards, or limit the authority of the
Secretary to review or revoke awards.
(C) Provision of information.--The Secretary shall
provide to the program consortium the information
necessary for the program consortium to carry out its
responsibilities under this paragraph.
(g) Administrative Costs.--
(1) In general.--To compensate the program consortium for
carrying out its activities under this section, the Secretary
shall provide to the program consortium funds sufficient to
administer the program. This compensation may include a
management fee consistent with Department of Energy contracting
practices and procedures.
(2) Advance.--The Secretary shall advance funds to the
program consortium upon selection of the consortium, which
shall be deducted from amounts to be provided under paragraph
(1).
(h) Audit.--The Secretary shall retain an independent, commercial
auditor to determine the extent to which funds provided to the program
consortium, and funds provided under awards made under subsection (f),
have been expended in a manner consistent with the purposes and
requirements of this part. The auditor shall transmit a report annually
to the Secretary, who shall transmit the report to Congress, along with
a plan to remedy any deficiencies cited in the report.

SEC. 943. UNCONVENTIONAL NATURAL GAS AND OTHER PETROLEUM RESOURCES
PROGRAM.

(a) In General.--The Secretary shall carry out activities under
subsection 941(b)(3), to maximize the use of the onshore unconventional
natural gas and other petroleum resources of the United States, by
increasing the supply of such resources, through reducing the cost and
increasing the efficiency of exploration for and production of such
resources, while improving safety and minimizing environmental impacts.
(b) Awards.--
(1) In general.--The Secretary shall carry out this section
through awards to research consortia made through an open,
competitive process. As a condition of award of funds,
qualified research consortia shall--
(A) demonstrate capability and experience in
unconventional onshore natural gas or other petroleum
research and development;
(B) provide a research plan that demonstrates how
additional natural gas or oil production will be
achieved; and
(C) at the request of the Secretary, provide
technical advice to the Secretary for the purposes of
developing the annual plan required under subsection
(e).
(2) Production potential.--The Secretary shall seek to
ensure that the number and types of awards made under this
subsection have reasonable potential to lead to additional oil
and natural gas production on Federal lands.
(3) Schedule.--To carry out this subsection, not later than
180 days after the date of enactment of this Act, the Secretary
shall solicit proposals from research consortia, which shall be
submitted not later than 360 days after the date of enactment
of this Act. The Secretary shall select the first group of
research consortia to receive awards under this subsection not
later than 18 months after such date of enactment.
(c) Audit.--The Secretary shall retain an independent, commercial
auditor to determine the extent to which funds provided under awards
made under this section have been expended in a manner consistent with
the purposes and requirements of this part. The auditor shall transmit
a report annually to the Secretary, who shall transmit the report to
Congress, along with a plan to remedy any deficiencies cited in the
report.
(d) Focus Areas for Awards.--
(1) Unconventional resources.--Awards from allocations
under section 949(d)(2) shall focus on areas including advanced
coalbed methane, deep drilling, natural gas production from
tight sands, natural gas production from gas shales, stranded
gas, innovative exploration and production techniques, enhanced
recovery techniques, and environmental mitigation of
unconventional natural gas and other petroleum resources
exploration and production.
(2) Small producers.--Awards from allocations under section
949(d)(3) shall be made to consortia consisting of small
producers or organized primarily for the benefit of small
producers, and shall focus on areas including complex geology
involving rapid changes in the type and quality of the oil and
gas reservoirs across the reservoir; low reservoir pressure;
unconventional natural gas reservoirs in coalbeds, deep
reservoirs, tight sands, or shales; and unconventional oil
reservoirs in tar sands and oil shales.
(e) Annual Plan.--
(1) In general.--The program under this section shall be
carried out pursuant to an annual plan prepared by the
Secretary in accordance with paragraph (2).
(2) Development.--
(A) Written recommendations.--Before drafting an
annual plan under this subsection, the Secretary shall
solicit specific written recommendations from the
research consortia receiving awards under subsection
(b) and the Unconventional Resources Technology
Advisory Committee for each element to be addressed in
the plan, including those described in subparagraph
(D).
(B) Consultation.--The Secretary shall consult
regularly with the research consortia throughout the
preparation of the annual plan.
(C) Publication.--The Secretary shall transmit to
Congress and publish in the Federal Register the annual
plan, along with any written comments received under
subparagraph (A).
(D) Contents.--The annual plan shall describe the
ongoing and prospective activities under this section
and shall include a list of any solicitations for
awards that the Secretary plans to issue to carry out
research, development, demonstration, or commercial
application activities, including the topics for such
work, who would be eligible to apply, selection
criteria, and the duration of awards.
(3) Estimates of increased royalty receipts.--The
Secretary, in consultation with the Secretary of the Interior,
shall provide an annual report to Congress with the President's
budget on the estimated cumulative increase in Federal royalty
receipts (if any) resulting from the implementation of this
part. The initial report under this paragraph shall be
submitted in the first President's budget following the
completion of the first annual plan required under this
subsection.
(f) Activities by the United States Geological Survey.--The
Secretary of the Interior, through the United States Geological Survey,
shall, where appropriate, carry out programs of long-term research to
complement the programs under this section.

SEC. 944. ADDITIONAL REQUIREMENTS FOR AWARDS.

(a) Demonstration Projects.--An application for an award under this
part for a demonstration project shall describe with specificity the
intended commercial use of the technology to be demonstrated.
(b) Flexibility in Locating Demonstration Projects.--Subject to the
limitation in section 941(c), a demonstration project under this part
relating to an ultra-deepwater technology or an ultra-deepwater
architecture may be conducted in deepwater depths.
(c) Intellectual Property Agreements.--If an award under this part
is made to a consortium (other than the program consortium), the
consortium shall provide to the Secretary a signed contract agreed to
by all members of the consortium describing the rights of each member
to intellectual property used or developed under the award.
(d) Technology Transfer.--2.5 percent of the amount of each award
made under this part shall be designated for technology transfer and
outreach activities under this title.
(e) Cost Sharing Reduction for Independent Producers.--In applying
the cost sharing requirements under section 972 to an award under this
part the Secretary may reduce or eliminate the non-Federal requirement
if the Secretary determines that the reduction is necessary and
appropriate considering the technological risks involved in the
project.

SEC. 945. ADVISORY COMMITTEES.

(a) Ultra-Deepwater Advisory Committee.--
(1) Establishment.--Not later than 270 days after the date
of enactment of this Act, the Secretary shall establish an
advisory committee to be known as the Ultra-Deepwater Advisory
Committee.
(2) Membership.--The advisory committee under this
subsection shall be composed of members appointed by the
Secretary including--
(A) individuals with extensive research experience
or operational knowledge of offshore natural gas and
other petroleum exploration and production;
(B) individuals broadly representative of the
affected interests in ultra-deepwater natural gas and
other petroleum production, including interests in
environmental protection and safe operations;
(C) no individuals who are Federal employees; and
(D) no individuals who are board members, officers,
or employees of the program consortium.
(3) Duties.--The advisory committee under this subsection
shall--
(A) advise the Secretary on the development and
implementation of programs under this part related to
ultra-deepwater natural gas and other petroleum
resources; and
(B) carry out section 942(e)(2)(B).
(4) Compensation.--A member of the advisory committee under
this subsection shall serve without compensation but shall
receive travel expenses in accordance with applicable
provisions under subchapter I of chapter 57 of title 5, United
States Code.
(b) Unconventional Resources Technology Advisory Committee.--
(1) Establishment.--Not later than 270 days after the date
of enactment of this Act, the Secretary shall establish an
advisory committee to be known as the Unconventional Resources
Technology Advisory Committee.
(2) Membership.--The advisory committee under this
subsection shall be composed of members appointed by the
Secretary including--
(A) a majority of members who are employees or
representatives of independent producers of natural gas
and other petroleum, including small producers;
(B) individuals with extensive research experience
or operational knowledge of unconventional natural gas
and other petroleum resource exploration and
production;
(C) individuals broadly representative of the
affected interests in unconventional natural gas and
other petroleum resource exploration and production,
including interests in environmental protection and
safe operations; and
(D) no individuals who are Federal employees.
(3) Duties.--The advisory committee under this subsection
shall advise the Secretary on the development and
implementation of activities under this part related to
unconventional natural gas and other petroleum resources.
(4) Compensation.--A member of the advisory committee under
this subsection shall serve without compensation but shall
receive travel expenses in accordance with applicable
provisions under subchapter I of chapter 57 of title 5, United
States Code.
(c) Prohibition.--No advisory committee established under this
section shall make recommendations on funding awards to particular
consortia or other entities, or for specific projects.

SEC. 946. LIMITS ON PARTICIPATION.

An entity shall be eligible to receive an award under this part
only if the Secretary finds--
(1) that the entity's participation in the program under
this part would be in the economic interest of the United
States; and
(2) that either--
(A) the entity is a United States-owned entity
organized under the laws of the United States; or
(B) the entity is organized under the laws of the
United States and has a parent entity organized under
the laws of a country that affords--
(i) to United States-owned entities
opportunities, comparable to those afforded to
any other entity, to participate in any
cooperative research venture similar to those
authorized under this part;
(ii) to United States-owned entities local
investment opportunities comparable to those
afforded to any other entity; and
(iii) adequate and effective protection for
the intellectual property rights of United
States-owned entities.

SEC. 947. SUNSET.

The authority provided by this part shall terminate on September
30, 2011.

SEC. 948. DEFINITIONS.

In this part:
(1) Deepwater.--The term ``deepwater'' means a water depth
that is greater than 200 but less than 1,500 meters.
(2) Independent producer of oil or gas.--
(A) In general.--The term ``independent producer of
oil or gas'' means any person that produces oil or gas
other than a person to whom subsection (c) of section
613A of the Internal Revenue Code of 1986 does not
apply by reason of paragraph (2) (relating to certain
retailers) or paragraph (4) (relating to certain
refiners) of section 613A(d) of such Code.
(B) Rules for applying paragraphs (2) and (4) of
section 613a(d).--For purposes of subparagraph (A),
paragraphs (2) and (4) of section 613A(d) of the
Internal Revenue Code of 1986 shall be applied by
substituting ``calendar year'' for ``taxable year''
each place it appears in such paragraphs.
(3) Program consortium.--The term ``program consortium''
means the consortium selected under section 942(d).
(4) Remote or inconsequential.--The term ``remote or
inconsequential'' has the meaning given that term in
regulations issued by the Office of Government Ethics under
section 208(b)(2) of title 18, United States Code.
(5) Small producer.--The term ``small producer'' means an
entity organized under the laws of the United States with
production levels of less than 1,000 barrels per day of oil
equivalent.
(6) Ultra-deepwater.--The term ``ultra-deepwater'' means a
water depth that is equal to or greater than 1,500 meters.
(7) Ultra-deepwater architecture.--The term ``ultra-
deepwater architecture'' means the integration of technologies
for the exploration for, or production of, natural gas or other
petroleum resources located at ultra-deepwater depths.
(8) Ultra-deepwater technology.--The term ``ultra-deepwater
technology'' means a discrete technology that is specially
suited to address 1 or more challenges associated with the
exploration for, or production of, natural gas or other
petroleum resources located at ultra-deepwater depths.
(9) Unconventional natural gas and other petroleum
resource.--The term ``unconventional natural gas and other
petroleum resource'' means natural gas and other petroleum
resource located onshore in an economically inaccessible
geological formation, including resources of small producers.

SEC. 949. FUNDING.

(a) In General.--
(1) Oil and gas lease income.--For each of fiscal years
2004 through 2013, from any Federal royalties, rents, and
bonuses derived from Federal onshore and offshore oil and gas
leases issued under the Outer Continental Shelf Lands Act and
the Mineral Leasing Act which are deposited in the Treasury,
and after distribution of any such funds as described in
subsection (c), $150,000,000 shall be deposited into the Ultra-
Deepwater and Unconventional Natural Gas and Other Petroleum
Research Fund (in this section referred to as the Fund). For
purposes of this section, the term ``royalties'' excludes
proceeds from the sale of royalty production taken in kind and
royalty production that is transferred under section 27(a)(3)
of the Outer Continental Shelf Lands Act (43 U.S.C.
1353(a)(3)).
(2) Authorization of appropriations.--In addition to
amounts described in paragraph (1), there are authorized to be
appropriated to the Secretary, to be deposited in the Fund,
$50,000,000 for each of the fiscal years 2004 through 2013, to
remain available until expended.
(b) Obligational Authority.--Monies in the Fund shall be available
to the Secretary for obligation under this part without fiscal year
limitation, to remain available until expended.
(c) Prior Distributions.--The distributions described in subsection
(a) are those required by law--
(1) to States and to the Reclamation Fund under the Mineral
Leasing Act (30 U.S.C. 191(a)); and
(2) to other funds receiving monies from Federal oil and
gas leasing programs, including--
(A) any recipients pursuant to section 8(g) of the
Outer Continental Shelf Lands Act (43 U.S.C. 1337(g));
(B) the Land and Water Conservation Fund, pursuant
to section 2(c) of the Land and Water Conservation Fund
Act of 1965 (16 U.S.C. 4601-5(c));
(C) the Historic Preservation Fund, pursuant to
section 108 of the National Historic Preservation Act
(16 U.S.C. 470h); and
(D) the Secure Energy Reinvestment Fund.
(d) Allocation.--Amounts obligated from the Fund under this section
in each fiscal year shall be allocated as follows:
(1) 50 percent shall be for activities under section 942.
(2) 35 percent shall be for activities under section
943(d)(1).
(3) 10 percent shall be for activities under section
943(d)(2).
(4) 5 percent shall be for research under section 941(d).
(e) Fund.--There is hereby established in the Treasury of the
United States a separate fund to be known as the ``Ultra-Deepwater and
Unconventional Natural Gas and Other Petroleum Research Fund''.

Subtitle F--Science

SEC. 951. SCIENCE.

(a) In General.--The following sums are authorized to be
appropriated to the Secretary for research, development, demonstration,
and commercial application activities of the Office of Science,
including activities authorized under this subtitle, including the
amounts authorized under the amendment made by section 958(c)(2)(C),
and including basic energy sciences, advanced scientific computing
research, biological and environmental research, fusion energy
sciences, high energy physics, nuclear physics, and research analysis
and infrastructure support:
(1) For fiscal year 2004, $3,785,000,000.
(2) For fiscal year 2005, $4,153,000,000.
(3) For fiscal year 2006, $4,618,000,000.
(4) For fiscal year 2007, $5,310,000,000.
(5) For fiscal year 2008, $5,800,000,000.
(b) Allocations.--From amounts authorized under subsection (a), the
following sums are authorized:
(1) For activities of the Fusion Energy Sciences Program,
including activities under sections 952 and 953--
(A) for fiscal year 2004, $335,000,000;
(B) for fiscal year 2005, $349,000,000;
(C) for fiscal year 2006, $362,000,000;
(D) for fiscal year 2007, $377,000,000; and
(E) for fiscal year 2008, $393,000,000.
(2) For the Spallation Neutron Source--
(A) for construction in fiscal year 2004,
$124,600,000;
(B) for construction in fiscal year 2005,
$79,800,000;
(C) for completion of construction in fiscal year
2006, $41,100,000; and
(D) for other project costs (including research and
development necessary to complete the project,
preoperations costs, and capital equipment related to
construction), $103,279,000 for the period encompassing
fiscal years 2003 through 2006, to remain available
until expended through September 30, 2006.
(3) For Catalysis Research activities under section 956--
(A) for fiscal year 2004, $33,000,000;
(B) for fiscal year 2005, $35,000,000;
(C) for fiscal year 2006, $36,500,000;
(D) for fiscal year 2007, $38,200,000; and
(E) for fiscal year 2008, $40,100,000.
(4) For Nanoscale Science and Engineering Research
activities under section 957--
(A) for fiscal year 2004, $270,000,000;
(B) for fiscal year 2005, $292,000,000;
(C) for fiscal year 2006, $322,000,000;
(D) for fiscal year 2007, $355,000,000; and
(E) for fiscal year 2008, $390,000,000.
(5) For activities under section 957(c), from the amounts
authorized under paragraph (4) of this subsection--
(A) for fiscal year 2004, $135,000,000;
(B) for fiscal year 2005, $150,000,000;
(C) for fiscal year 2006, $120,000,000;
(D) for fiscal year 2007, $100,000,000; and
(E) for fiscal year 2008, $125,000,000.
(6) For activities in the Genomes to Life Program under
section 959--
(A) for fiscal year 2004, $100,000,000; and
(B) for fiscal years 2005 through 2008, such sums
as may be necessary.
(7) For activities in the Energy-Water Supply Program under
section 961, $30,000,000 for each of fiscal years 2004 through
2008.
(c) ITER Construction.--In addition to the funds authorized under
subsection (b)(1), such sums as may be necessary for costs associated
with ITER construction, consistent with limitations under section 952.

SEC. 952. UNITED STATES PARTICIPATION IN ITER.

(a) In General.--The United States may participate in ITER in
accordance with the provisions of this section.
(b) Agreement.--
(1) In general.--The Secretary is authorized to negotiate
an agreement for United States participation in ITER.
(2) Contents.--Any agreement for United States
participation in ITER shall, at a minimum--
(A) clearly define the United States financial
contribution to construction and operating costs;
(B) ensure that the share of ITER's high-technology
components manufactured in the United States is at
least proportionate to the United States financial
contribution to ITER;
(C) ensure that the United States will not be
financially responsible for cost overruns in components
manufactured in other ITER participating countries;
(D) guarantee the United States full access to all
data generated by ITER;
(E) enable United States researchers to propose and
carry out an equitable share of the experiments at
ITER;
(F) provide the United States with a role in all
collective decisionmaking related to ITER; and
(G) describe the process for discontinuing or
decommissioning ITER and any United States role in
those processes.
(c) Plan.--The Secretary, in consultation with the Fusion Energy
Sciences Advisory Committee, shall develop a plan for the participation
of United States scientists in ITER that shall include the United
States research agenda for ITER, methods to evaluate whether ITER is
promoting progress toward making fusion a reliable and affordable
source of power, and a description of how work at ITER will relate to
other elements of the United States fusion program. The Secretary shall
request a review of the plan by the National Academy of Sciences.
(d) Limitation.--No funds shall be expended for the construction of
ITER until the Secretary has transmitted to Congress--
(1) the agreement negotiated pursuant to subsection (b) and
120 days have elapsed since that transmission;
(2) a report describing the management structure of ITER
and providing a fixed dollar estimate of the cost of United
States participation in the construction of ITER, and 120 days
have elapsed since that transmission;
(3) a report describing how United States participation in
ITER will be funded without reducing funding for other programs
in the Office of Science, including other fusion programs, and
60 days have elapsed since that transmission; and
(4) the plan required by subsection (c) (but not the
National Academy of Sciences review of that plan), and 60 days
have elapsed since that transmission.
(e) Alternative to ITER.--If at any time during the negotiations on
ITER, the Secretary determines that construction and operation of ITER
is unlikely or infeasible, the Secretary shall send to Congress, as
part of the budget request for the following year, a plan for
implementing the domestic burning plasma experiment known as FIRE,
including costs and schedules for such a plan. The Secretary shall
refine such plan in full consultation with the Fusion Energy Sciences
Advisory Committee and shall also transmit such plan to the National
Academy of Sciences for review.
(f) Definitions.--In this section and sections 951(b)(1) and (c):
(1) Construction.--The term ``construction'' means the
physical construction of the ITER facility, and the physical
construction, purchase, or manufacture of equipment or
components that are specifically designed for the ITER
facility, but does not mean the design of the facility,
equipment, or components.
(2) FIRE.--The term ``FIRE'' means the Fusion Ignition
Research Experiment, the fusion research experiment for which
design work has been supported by the Department as a possible
alternative burning plasma experiment in the event that ITER
fails to move forward.
(3) ITER.--The term ``ITER'' means the international
burning plasma fusion research project in which the President
announced United States participation on January 30, 2003.

SEC. 953. PLAN FOR FUSION ENERGY SCIENCES PROGRAM.

(a) Declaration of Policy.--It shall be the policy of the United
States to conduct research, development, demonstration, and commercial
application to provide for the scientific, engineering, and commercial
infrastructure necessary to ensure that the United States is
competitive with other nations in providing fusion energy for its own
needs and the needs of other nations, including by demonstrating
electric power or hydrogen production for the United States energy grid
utilizing fusion energy at the earliest date possible.
(b) Planning.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall present to Congress
a plan, with proposed cost estimates, budgets, and potential
international partners, for the implementation of the policy
described in subsection (a). The plan shall ensure that--
(A) existing fusion research facilities are more
fully utilized;
(B) fusion science, technology, theory, advanced
computation, modeling, and simulation are strengthened;
(C) new magnetic and inertial fusion research
facilities are selected based on scientific innovation,
cost effectiveness, and their potential to advance the
goal of practical fusion energy at the earliest date
possible, and those that are selected are funded at a
cost-effective rate;
(D) communication of scientific results and methods
between the fusion energy science community and the
broader scientific and technology communities is
improved;
(E) inertial confinement fusion facilities are
utilized to the extent practicable for the purpose of
inertial fusion energy research and development; and
(F) attractive alternative inertial and magnetic
fusion energy approaches are more fully explored.
(2) Costs and schedules.--Such plan shall also address the
status of and, to the degree possible, costs and schedules
for--
(A) in coordination with the program under section
960, the design and implementation of international or
national facilities for the testing of fusion
materials; and
(B) the design and implementation of international
or national facilities for the testing and development
of key fusion technologies.

SEC. 954. SPALLATION NEUTRON SOURCE.

(a) Definition.--For the purposes of this section, the term
``Spallation Neutron Source'' means Department Project 99-E-334, Oak
Ridge National Laboratory, Oak Ridge, Tennessee.
(b) Report.--The Secretary shall report on the Spallation Neutron
Source as part of the Department's annual budget submission, including
a description of the achievement of milestones, a comparison of actual
costs to estimated costs, and any changes in estimated project costs or
schedule.
(c) Limitations.--The total amount obligated by the Department,
including prior year appropriations, for the Spallation Neutron Source
shall not exceed--
(1) $1,192,700,000 for costs of construction;
(2) $219,000,000 for other project costs; and
(3) $1,411,700,000 for total project cost.

SEC. 955. SUPPORT FOR SCIENCE AND ENERGY FACILITIES AND INFRASTRUCTURE.

(a) Facility and Infrastructure Policy.--The Secretary shall
develop and implement a strategy for facilities and infrastructure
supported primarily from the Office of Science, the Office of Energy
Efficiency and Renewable Energy, the Office of Fossil Energy, or the
Office of Nuclear Energy, Science, and Technology Programs at all
National Laboratories and single-purpose research facilities. Such
strategy shall provide cost-effective means for--
(1) maintaining existing facilities and infrastructure, as
needed;
(2) closing unneeded facilities;
(3) making facility modifications; and
(4) building new facilities.
(b) Report.--
(1) In general.--The Secretary shall prepare and transmit,
along with the President's budget request to Congress for
fiscal year 2006, a report containing the strategy developed
under subsection (a).
(2) Contents.--For each National Laboratory and single-
purpose research facility, for the facilities primarily used
for science and energy research, such report shall contain--
(A) the current priority list of proposed
facilities and infrastructure projects, including cost
and schedule requirements;
(B) a current 10-year plan that demonstrates the
reconfiguration of its facilities and infrastructure to
meet its missions and to address its long-term
operational costs and return on investment;
(C) the total current budget for all facilities and
infrastructure funding; and
(D) the current status of each facility and
infrastructure project compared to the original
baseline cost, schedule, and scope.

SEC. 956. CATALYSIS RESEARCH AND DEVELOPMENT PROGRAM.

(a) Establishment.--The Secretary, through the Office of Science,
shall support a program of research and development in catalysis
science consistent with the Department's statutory authorities related
to research and development. The program shall include efforts to--
(1) enable catalyst design using combinations of
experimental and mechanistic methodologies coupled with
computational modeling of catalytic reactions at the molecular
level;
(2) develop techniques for high throughput synthesis,
assay, and characterization at nanometer and subnanometer
scales in situ under actual operating conditions;
(3) synthesize catalysts with specific site architectures;
(4) conduct research on the use of precious metals for
catalysis; and
(5) translate molecular understanding to the design of
catalytic compounds.
(b) Duties of the Office of Science.--In carrying out the program
under this section, the Director of the Office of Science shall--
(1) support both individual investigators and
multidisciplinary teams of investigators to pioneer new
approaches in catalytic design;
(2) develop, plan, construct, acquire, share, or operate
special equipment or facilities for the use of investigators in
collaboration with national user facilities such as nanoscience
and engineering centers;
(3) support technology transfer activities to benefit
industry and other users of catalysis science and engineering;
and
(4) coordinate research and development activities with
industry and other Federal agencies.
(c) Triennial Assessment.--The National Academy of Sciences shall
review the catalysis program every 3 years to report on gains made in
the fundamental science of catalysis and its progress towards
developing new fuels for energy production and material fabrication
processes.

SEC. 957. NANOSCALE SCIENCE AND ENGINEERING RESEARCH, DEVELOPMENT,
DEMONSTRATION, AND COMMERCIAL APPLICATION.

(a) Establishment.--The Secretary, acting through the Office of
Science, shall support a program of research, development,
demonstration, and commercial application in nanoscience and
nanoengineering. The program shall include efforts to further the
understanding of the chemistry, physics, materials science, and
engineering of phenomena on the scale of nanometers and to apply that
knowledge to the Department's mission areas.
(b) Duties of the Office of Science.--In carrying out the program
under this section, the Office of Science shall--
(1) support both individual investigators and teams of
investigators, including multidisciplinary teams;
(2) carry out activities under subsection (c);
(3) support technology transfer activities to benefit
industry and other users of nanoscience and nanoengineering;
(4) coordinate research and development activities with
other Department programs, industry, and other Federal
agencies;
(5) ensure that societal and ethical concerns will be
addressed as the technology is developed by--
(A) establishing a research program to identify
societal and ethical concerns related to
nanotechnology, and ensuring that the results of such
research are widely disseminated; and
(B) integrating, insofar as possible, research on
societal and ethical concerns with nanotechnology
research and development; and
(6) ensure that the potential of nanotechnology to produce
or facilitate the production of clean, inexpensive energy is
realized by supporting nanotechnology energy applications
research and development.
(c) Nanoscience and Nanoengineering Research Centers and Major
Instrumentation.--
(1) In general.--The Secretary shall carry out projects to
develop, plan, construct, acquire, operate, or support special
equipment, instrumentation, or facilities for investigators
conducting research and development in nanoscience and
nanoengineering.
(2) Activities.--Projects under paragraph (1) may include
the measurement of properties at the scale of nanometers,
manipulation at such scales, and the integration of
technologies based on nanoscience or nanoengineering into bulk
materials or other technologies.
(3) Facilities.--Facilities under paragraph (1) may include
electron microcharacterization facilities, microlithography
facilities, scanning probe facilities, and related
instrumentation.
(4) Collaborations.--The Secretary shall encourage
collaborations among Department programs, institutions of
higher education, laboratories, and industry at facilities
under this subsection.

SEC. 958. ADVANCED SCIENTIFIC COMPUTING FOR ENERGY MISSIONS.

(a) In General.--The Secretary, acting through the Office of
Science, shall support a program to advance the Nation's computing
capability across a diverse set of grand challenge, computationally
based, science problems related to departmental missions.
(b) Duties of the Office of Science.--In carrying out the program
under this section, the Office of Science shall--
(1) advance basic science through computation by developing
software to solve grand challenge science problems on new
generations of computing platforms in collaboration with other
Department program offices;
(2) enhance the foundations for scientific computing by
developing the basic mathematical and computing systems
software needed to take full advantage of the computing
capabilities of computers with peak speeds of 100 teraflops or
more, some of which may be unique to the scientific problem of
interest;
(3) enhance national collaboratory and networking
capabilities by developing software to integrate geographically
separated researchers into effective research teams and to
facilitate access to and movement and analysis of large
(petabyte) data sets;
(4) develop and maintain a robust scientific computing
hardware infrastructure to ensure that the computing resources
needed to address departmental missions are available; and
(5) explore new computing approaches and technologies that
promise to advance scientific computing, including developments
in quantum computing.
(c) High-Performance Computing Act of 1991 Amendments.--The High-
Performance Computing Act of 1991 is amended--
(1) in section 4 (15 U.S.C. 5503)--
(A) in paragraph (3) by striking ``means'' and
inserting ``and networking and information technology
mean'', and by striking ``(including vector
supercomputers and large scale parallel systems)''; and
(B) in paragraph (4), by striking ``packet
switched''; and
(2) in section 203 (15 U.S.C. 5523)--
(A) in subsection (a), by striking all after ``As
part of the'' and inserting ``Networking and
Information Technology Research and Development
Program, the Secretary of Energy shall conduct basic
and applied research in networking and information
technology, with emphasis on supporting fundamental
research in the physical sciences and engineering, and
energy applications; providing supercomputer access and
advanced communication capabilities and facilities to
scientific researchers; and developing tools for
distributed scientific collaboration.'';
(B) in subsection (b), by striking ``Program'' and
inserting ``Networking and Information Technology
Research and Development Program''; and
(C) by amending subsection (e) to read as follows:
``(e) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Energy to carry out the Networking and
Information Technology Research and Development Program such sums as
may be necessary for fiscal years 2004 through 2008.''.
(d) Coordination.--The Secretary shall ensure that the program
under this section is integrated and consistent with--
(1) the Advanced Simulation and Computing Program, formerly
known as the Accelerated Strategic Computing Initiative, of the
National Nuclear Security Administration; and
(2) other national efforts related to advanced scientific
computing for science and engineering.
(e) Report.--
(1) In general.--Before undertaking any new initiative to
develop any new advanced architecture for high-speed computing,
the Secretary, through the Director of the Office of Science,
shall transmit a report to Congress describing--
(A) the expected duration and cost of the
initiative;
(B) the technical milestones the initiative is
designed to achieve;
(C) how institutions of higher education and
private firms will participate in the initiative; and
(D) why the goals of the initiative could not be
achieved through existing programs.
(2) Limitation.--No funds may be expended on any initiative
described in paragraph (1) until 30 days after the report
required by that paragraph is transmitted to Congress.

SEC. 959. GENOMES TO LIFE PROGRAM.

(a) Program.--
(1) Establishment.--The Secretary shall establish a
research, development, and demonstration program in genetics,
protein science, and computational biology to support the
energy, national security, and environmental mission of the
Department.
(2) Grants.--The program shall support individual
investigators and multidisciplinary teams of investigators
through competitive, merit-reviewed grants.
(3) Consultation.--In carrying out the program, the
Secretary shall consult with other Federal agencies that
conduct genetic and protein research.
(b) Goals.--The program shall have the goal of developing
technologies and methods based on the biological functions of genomes,
microbes, and plants that--
(1) can facilitate the production of fuels, including
hydrogen;
(2) convert carbon dioxide to organic carbon;
(3) improve national security and combat terrorism;
(4) detoxify soils and water at Department facilities
contaminated with heavy metals and radiological materials; and
(5) address other Department missions as identified by the
Secretary.
(c) Plan.--
(1) Development of plan.--Not later than 1 year after the
date of enactment of this Act, the Secretary shall prepare and
transmit to Congress a research plan describing how the program
authorized pursuant to this section will be undertaken to
accomplish the program goals established in subsection (b).
(2) Review of plan.--The Secretary shall contract with the
National Academy of Sciences to review the research plan
developed under this subsection. The Secretary shall transmit
the review to Congress not later than 18 months after
transmittal of the research plan under paragraph (1), along
with the Secretary's response to the recommendations contained
in the review.
(d) Genomes to Life User Facilities and Ancillary Equipment.--
(1) In general.--Within the funds authorized to be
appropriated pursuant to this Act, the amounts specified under
section 951(b)(6) shall, subject to appropriations, be
available for projects to develop, plan, construct, acquire, or
operate special equipment, instrumentation, or facilities for
investigators conducting research, development, demonstration,
and commercial application in systems biology and proteomics
and associated biological disciplines.
(2) Facilities.--Facilities under paragraph (1) may include
facilities, equipment, or instrumentation for--
(A) the production and characterization of
proteins;
(B) whole proteome analysis;
(C) characterization and imaging of molecular
machines; and
(D) analysis and modeling of cellular systems.
(3) Collaborations.--The Secretary shall encourage
collaborations among universities, laboratories, and industry
at facilities under this subsection. All facilities under this
subsection shall have a specific mission of technology transfer
to other institutions.
(e) Prohibition on Biomedical and Human Cell and Human Subject
Research.--
(1) No biomedical research.--In carrying out the program
under this section, the Secretary shall not conduct biomedical
research.
(2) Limitations.--Nothing in this section shall authorize
the Secretary to conduct any research or demonstrations--
(A) on human cells or human subjects; or
(B) designed to have direct application with
respect to human cells or human subjects.

SEC. 960. FISSION AND FUSION ENERGY MATERIALS RESEARCH PROGRAM.

In the President's fiscal year 2006 budget request, the Secretary
shall establish a research and development program on material science
issues presented by advanced fission reactors and the Department's
fusion energy program. The program shall develop a catalog of material
properties required for these applications, develop theoretical models
for materials possessing the required properties, benchmark models
against existing data, and develop a roadmap to guide further research
and development in this area.

SEC. 961. ENERGY-WATER SUPPLY PROGRAM.

(a) Establishment.--There is established within the Department the
Energy-Water Supply Program, to study energy-related and certain other
issues associated with the supply of drinking water and operation of
community water systems and to study water supply issues related to
energy.
(b) Definitions.--For the purposes of this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Agency.--The term ``Agency'' means the Environmental
Protection Agency.
(3) Foundation.--The term ``Foundation'' means the American
Water Works Association Research Foundation.
(4) Indian tribe.--The term ``Indian tribe'' has the
meaning given the term in section 4 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b).
(5) Program.--The term ``Program'' means the Energy-Water
Supply Program established by this section.
(c) Program Areas.--The Program shall develop methods, means,
procedures, equipment, and improved technologies relating to--
(1) the arsenic removal program under subsection (d);
(2) the desalination program under subsection (e); and
(3) the water and energy sustainability program under
subsection (f).
(d) Arsenic Removal Program.--
(1) In general.--As soon as practicable after the date of
enactment of this Act, the Secretary, in coordination with the
Administrator and in partnership with the Foundation, shall
utilize the facilities, institutions, and relationships
established in the Consolidated Appropriations Resolution, 2003
as described in Senate Report 107-220 to carry out a research
program to provide innovative methods and means for removal of
arsenic.
(2) Required evaluations.--The program shall, to the
maximum extent practicable, evaluate the means of--
(A) reducing energy costs incurred in using arsenic
removal technologies;
(B) minimizing materials, operating, and
maintenance costs; and
(C) minimizing any quantities of waste (especially
hazardous waste) that result from use of arsenic
removal technologies.
(3) Peer review.--Where applicable and reasonably
available, projects undertaken under this subsection shall be
peer-reviewed.
(4) Community water systems.--In carrying out the program
under this subsection, the Secretary, in coordination with the
Administrator, shall--
(A) select projects involving a geographically and
hydrologically diverse group of community water systems
(as defined in section 1003 of the Public Health
Service Act (42 U.S.C. 300)) and water chemistries,
that have experienced technical or economic
difficulties in providing drinking water with levels of
arsenic at 10 parts-per-billion or lower, which
projects shall be designed to develop innovative
methods and means to deliver drinking water that
contains less than 10 parts per billion of arsenic; and
(B) provide not less than 40 percent of all funds
spent pursuant to this subsection to address the needs
of, and in collaboration with, rural communities or
Indian tribes.
(5) Cost effectiveness.--The Foundation shall create
methods for determining cost effectiveness of arsenic removal
technologies used in the program.
(6) Education, training, and technology.--The Foundation
shall include education, training, and technology transfer as
part of the program.
(7) Coordination.--The Secretary shall consult with the
Administrator to ensure that all activities conducted under the
program are coordinated with the Agency and do not duplicate
other programs in the Agency and other Federal agencies, State
programs, and academia.
(8) Reports.--Not later than 1 year after the date of
commencement of the program under this subsection, and once
every year thereafter, the Secretary shall submit to the
Committee on Energy and Commerce of the House of
Representatives and the Committee on Environment and Public
Works and the Committee on Energy and Natural Resources of the
Senate a report on the results of the program under this
subsection.
(e) Desalination Program.--
(1) In general.--The Secretary, in cooperation with the
Commissioner of Reclamation of the Department of the Interior,
shall carry out a program to conduct research and develop
methods and means for desalination in accordance with the
desalination technology progress plan developed under title II
of the Energy and Water Development Appropriations Act, 2002
(115 Stat. 498), and described in Senate Report 107-39 under
the heading ``water and related resources'' in the ``Bureau of
Reclamation'' section.
(2) Requirements.--The desalination program shall--
(A) use the resources of the Department and the
Department of the Interior that were involved in the
development of the 2003 National Desalination and Water
Purification Technology Roadmap for next-generation
desalination technology;
(B) focus on technologies that are appropriate for
use in desalinating brackish groundwater, drinking
water, wastewater and other saline water supplies, or
disposal of residual brine or salt; and
(C) consider the use of renewable energy sources.
(3) Construction projects.--Funds made available to carry
out this subsection may be used for construction projects,
including completion of the National Desalination Research
Center for brackish groundwater and ongoing operational costs
of this facility.
(4) Steering committee.--The Secretary and the Commissioner
of Reclamation of the Department of the Interior shall jointly
establish a steering committee for activities conducted under
this subsection. The steering committee shall be jointly
chaired by 1 representative from the program and 1
representative from the Bureau of Reclamation.
(f) Water and Energy Sustainability Program.--
(1) In general.--The Secretary shall develop a program to
identify methods, means, procedures, equipment, and improved
technologies necessary to ensure that sufficient quantities of
water are available to meet energy needs and sufficient energy
is available to meet water needs.
(2) Assessments.--In order to acquire information and avoid
duplication, the Secretary shall work in collaboration with the
Secretary of the Interior, the Army Corps of Engineers, the
Administrator, the Secretary of Commerce, the Secretary of
Defense, relevant State agencies, nongovernmental
organizations, and academia, to assess--
(A) future water resources needed to support energy
development and production within the United States
including water used for hydropower, and production of,
or electricity generation by, hydrogen, biomass, fossil
fuels, and nuclear fuel;
(B) future energy resources needed to support water
purification and wastewater treatment, including
desalination and water conveyance;
(C) use of impaired and nontraditional water
supplies for energy production other than oil and gas
extraction;
(D) technology and programs for improving water use
efficiency; and
(E) technologies to reduce water use in energy
development and production.
(3) Roadmap; tools.--The Secretary shall--
(A) develop a program plan and technology
development roadmap for the Water and Energy
Sustainability Program to identify scientific and
technical requirements and activities that are required
to support planning for energy sustainability under
current and potential future conditions of water
availability, use of impaired water for energy
production and other uses, and reduction of water use
in energy development and production;
(B) develop tools for national and local energy and
water sustainability planning, including numerical
models, decision analysis tools, economic analysis
tools, databases, and planning methodologies and
strategies;
(C) implement at least 3 planning projects
involving energy development or production that use the
tools described in subparagraph (B) and assess the
viability of those tools at the scale of river basins
with at least 1 demonstration involving an
international border; and
(D) transfer those tools to other Federal agencies,
State agencies, nonprofit organizations, industry, and
academia.
(4) Report.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall submit to Congress a
report on the Water and Energy Sustainability Program that--
(A) includes the results of the assessment under
paragraph (2) and the program plan and technology
development roadmap; and
(B) identifies policy, legal, and institutional
issues related to water and energy sustainability.

SEC. 962. NITROGEN FIXATION.

The Secretary, acting through the Office of Science, shall support
a program of research, development, demonstration, and commercial
application on biological nitrogen fixation, including plant genomics
research relevant to the development of commercial crop varieties with
enhanced nitrogen fixation efficiency and ability.

Subtitle G--Energy and Environment

SEC. 964. UNITED STATES-MEXICO ENERGY TECHNOLOGY COOPERATION.

(a) Program.--The Secretary shall establish a research,
development, demonstration, and commercial application program to be
carried out in collaboration with entities in Mexico and the United
States to promote energy efficient, environmentally sound economic
development along the United States-Mexico border that minimizes public
health risks from industrial activities in the border region.
(b) Program Management.--The program under subsection (a) shall be
managed by the Department of Energy Carlsbad Environmental Management
Field Office.
(c) Technology Transfer.--In carrying out projects and activities
under this section, the Secretary shall assess the applicability of
technology developed under the Environmental Management Science Program
of the Department.
(d) Intellectual Property.--In carrying out this section, the
Secretary shall comply with the requirements of any agreement entered
into between the United States and Mexico regarding intellectual
property protection.
(e) Authorization of Appropriations.--The following sums are
authorized to be appropriated to the Secretary to carry out activities
under this section:
(1) For each of fiscal years 2004 and 2005, $5,000,000.
(2) For each of fiscal years 2006, 2007, and 2008,
$6,000,000.

SEC. 965. WESTERN HEMISPHERE ENERGY COOPERATION.

(a) Program.--The Secretary shall carry out a program to promote
cooperation on energy issues with Western Hemisphere countries.
(b) Activities.--Under the program, the Secretary shall fund
activities to work with Western Hemisphere countries to--
(1) assist the countries in formulating and adopting
changes in economic policies and other policies to--
(A) increase the production of energy supplies; and
(B) improve energy efficiency; and
(2) assist in the development and transfer of energy supply
and efficiency technologies that would have a beneficial impact
on world energy markets.
(c) University Participation.--To the extent practicable, the
Secretary shall carry out the program under this section with the
participation of universities so as to take advantage of the acceptance
of universities by Western Hemisphere countries as sources of unbiased
technical and policy expertise when assisting the Secretary in--
(1) evaluating new technologies;
(2) resolving technical issues;
(3) working with those countries in the development of new
policies; and
(4) training policymakers, particularly in the case of
universities that involve the participation of minority
students, such as Hispanic-serving institutions and
Historically Black Colleges and Universities.
(d) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section--
(1) $8,000,000 for fiscal year 2004;
(2) $10,000,000 for fiscal year 2005;
(3) $13,000,000 for fiscal year 2006;
(4) $16,000,000 for fiscal year 2007; and
(5) $19,000,000 for fiscal year 2008.

SEC. 966. WASTE REDUCTION AND USE OF ALTERNATIVES.

(a) Grant Authority.--The Secretary may make a single grant to a
qualified institution to examine and develop the feasibility of burning
post-consumer carpet in cement kilns as an alternative energy source.
The purposes of the grant shall include determining--
(1) how post-consumer carpet can be burned without
disrupting kiln operations;
(2) the extent to which overall kiln emissions may be
reduced;
(3) the emissions of air pollutants and other relevant
environmental impacts; and
(4) how this process provides benefits to both cement kiln
operations and carpet suppliers.
(b) Qualified Institution.--For the purposes of subsection (a), a
qualified institution is a research-intensive institution of higher
education with demonstrated expertise in the fields of fiber recycling
and logistical modeling of carpet waste collection and preparation.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary for carrying out this section $500,000.

SEC. 967. REPORT ON FUEL CELL TEST CENTER.

(a) Report.--Not later than 1 year after the date of enactment of
this Act, the Secretary shall transmit to Congress a report on the
results of a study of the establishment of a test center for next-
generation fuel cells at an institution of higher education that has
available a continuous source of hydrogen and access to the electric
transmission grid. Such report shall include a conceptual design for
such test center and a projection of the costs of establishing the test
center.
(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary for carrying out this section $500,000.

SEC. 968. ARCTIC ENGINEERING RESEARCH CENTER.

(a) In General.--The Secretary of Energy (referred to in this
section as the ``Secretary'') in consultation with the Secretary of
Transportation and the United States Arctic Research Commission shall
provide annual grants to a university located adjacent to the Arctic
Energy Office of the Department of Energy, to establish and operate a
university research center to be headquartered in Fairbanks and to be
known as the ``Arctic Engineering Research Center'' (referred to in
this section as the ``Center'').
(b) Purpose.--The purpose of the Center shall be to conduct
research on, and develop improved methods of, construction and use of
materials to improve the overall performance of roads, bridges,
residential, commercial, and industrial structures, and other
infrastructure in the Arctic region, with an emphasis on developing--
(1) new construction techniques for roads, bridges, rail,
and related transportation infrastructure and residential,
commercial, and industrial infrastructure that are capable of
withstanding the Arctic environment and using limited energy
resources as efficiently as possible;
(2) technologies and procedures for increasing road,
bridge, rail, and related transportation infrastructure and
residential, commercial, and industrial infrastructure safety,
reliability, and integrity in the Arctic region;
(3) new materials and improving the performance and energy
efficiency of existing materials for the construction of roads,
bridges, rail, and related transportation infrastructure and
residential, commercial, and industrial infrastructure in the
Arctic region; and
(4) recommendations for new local, regional, and State
permitting and building codes to ensure transportation and
building safety and efficient energy use when constructing,
using, and occupying such infrastructure in the Arctic region.
(c) Objectives.--The Center shall carry out--
(1) basic and applied research in the subjects described in
subsection (b), the products of which shall be judged by peers
or other experts in the field to advance the body of knowledge
in road, bridge, rail, and infrastructure engineering in the
Arctic region; and
(2) an ongoing program of technology transfer that makes
research results available to potential users in a form that
can be implemented.
(d) Amount of Grant.--For each of fiscal years 2004 through 2009,
the Secretary shall provide a grant in the amount of $3,000,000 to the
institution specified in subsection (a) to carry out this section.
(e) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $3,000,000 for each of fiscal
years 2004 through 2009.

SEC. 969. BARROW GEOPHYSICAL RESEARCH FACILITY.

(a) Establishment.--The Secretary of Commerce, in consultation with
the Secretaries of Energy and the Interior, the Director of the
National Science Foundation, and the Administrator of the Environmental
Protection Agency, shall establish a joint research facility in Barrow,
Alaska, to be known as the ``Barrow Geophysical Research Facility'', to
support scientific research activities in the Arctic.
(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretaries of Commerce, Energy, and the Interior,
the Director of the National Science Foundation, and the Administrator
of the Environmental Protection Agency for the planning, design,
construction, and support of the Barrow Geophysical Research Facility
$61,000,000.

SEC. 970. WESTERN MICHIGAN DEMONSTRATION PROJECT.

The Administrator of the Environmental Protection Agency, in
consultation with the State of Michigan and affected local officials,
shall conduct a demonstration project to address the effect of
transported ozone and ozone precursors in Southwestern Michigan. The
demonstration program shall address projected nonattainment areas in
Southwestern Michigan that include counties with design values for
ozone of less than .095 based on years 2000 to 2002 or the most current
3-year period of air quality data. The Administrator shall assess any
difficulties such areas may experience in meeting the 8 hour national
ambient air quality standard for ozone due to the effect of transported
ozone or ozone precursors into the areas. The Administrator shall work
with State and local officials to determine the extent of ozone and
ozone precursor transport, to assess alternatives to achieve compliance
with the 8 hour standard apart from local controls, and to determine
the timeframe in which such compliance could take place. The
Administrator shall complete this demonstration project no later than 2
years after the date of enactment of this section and shall not impose
any requirement or sanction that might otherwise apply during the
pendency of the demonstration project.

Subtitle H--Management

SEC. 971. AVAILABILITY OF FUNDS.

Funds authorized to be appropriated to the Department under this
title shall remain available until expended.

SEC. 972. COST SHARING.

(a) Research and Development.--Except as otherwise provided in this
title, for research and development programs carried out under this
title the Secretary shall require a commitment from non-Federal sources
of at least 20 percent of the cost of the project. The Secretary may
reduce or eliminate the non-Federal requirement under this subsection
if the Secretary determines that the research and development is of a
basic or fundamental nature or involves technical analyses or
educational activities.
(b) Demonstration and Commercial Application.--Except as otherwise
provided in this title, the Secretary shall require at least 50 percent
of the costs directly and specifically related to any demonstration or
commercial application project under this title to be provided from
non-Federal sources. The Secretary may reduce the non-Federal
requirement under this subsection if the Secretary determines that the
reduction is necessary and appropriate considering the technological
risks involved in the project and is necessary to meet the objectives
of this title.
(c) Calculation of Amount.--In calculating the amount of the non-
Federal commitment under subsection (a) or (b), the Secretary may
include personnel, services, equipment, and other resources.
(d) Size of Non-Federal Share.--The Secretary may consider the size
of the non-Federal share in selecting projects.

SEC. 973. MERIT REVIEW OF PROPOSALS.

Awards of funds authorized under this title shall be made only
after an impartial review of the scientific and technical merit of the
proposals for such awards has been carried out by or for the
Department.

SEC. 974. EXTERNAL TECHNICAL REVIEW OF DEPARTMENTAL PROGRAMS.

(a) National Energy Research and Development Advisory Boards.--
(1) In general.--The Secretary shall establish 1 or more
advisory boards to review Department research, development,
demonstration, and commercial application programs in energy
efficiency, renewable energy, nuclear energy, and fossil
energy.
(2) Existing advisory boards.--The Secretary may designate
an existing advisory board within the Department to fulfill the
responsibilities of an advisory board under this subsection,
and may enter into appropriate arrangements with the National
Academy of Sciences to establish such an advisory board.
(b) Office of Science Advisory Committees.--
(1) Utilization of existing committees.--The Secretary
shall continue to use the scientific program advisory
committees chartered under the Federal Advisory Committee Act
(5 U.S.C. App.) by the Office of Science to oversee research
and development programs under that Office.
(2) Science advisory committee.--
(A) Establishment.--There shall be in the Office of
Science a Science Advisory Committee that includes the
chairs of each of the advisory committees described in
paragraph (1).
(B) Responsibilities.--The Science Advisory
Committee shall--
(i) serve as the science advisor to the
Director of the Office of Science;
(ii) advise the Director with respect to
the well-being and management of the National
Laboratories and single-purpose research
facilities;
(iii) advise the Director with respect to
education and workforce training activities
required for effective short-term and long-term
basic and applied research activities of the
Office of Science; and
(iv) advise the Director with respect to
the well being of the university research
programs supported by the Office of Science.
(c) Membership.--Each advisory board under this section shall
consist of persons with appropriate expertise representing a diverse
range of interests.
(d) Meetings and Purposes.--Each advisory board under this section
shall meet at least semiannually to review and advise on the progress
made by the respective research, development, demonstration, and
commercial application program or programs. The advisory board shall
also review the measurable cost and performance-based goals for such
programs as established under section 901(b), and the progress on
meeting such goals.
(e) Periodic Reviews and Assessments.--The Secretary shall enter
into appropriate arrangements with the National Academy of Sciences to
conduct periodic reviews and assessments of the programs authorized by
this title, the measurable cost and performance-based goals for such
programs as established under section 901(b), if any, and the progress
on meeting such goals. Such reviews and assessments shall be conducted
every 5 years, or more often as the Secretary considers necessary, and
the Secretary shall transmit to Congress reports containing the results
of all such reviews and assessments.

SEC. 975. IMPROVED COORDINATION OF TECHNOLOGY TRANSFER ACTIVITIES.

(a) Technology Transfer Coordinator.--The Secretary shall designate
a Technology Transfer Coordinator to perform oversight of and policy
development for technology transfer activities at the Department. The
Technology Transfer Coordinator shall--
(1) coordinate the activities of the Technology Transfer
Working Group;
(2) oversee the expenditure of funds allocated to the
Technology Transfer Working Group; and
(3) coordinate with each technology partnership ombudsman
appointed under section 11 of the Technology Transfer
Commercialization Act of 2000 (42 U.S.C. 7261c).
(b) Technology Transfer Working Group.--The Secretary shall
establish a Technology Transfer Working Group, which shall consist of
representatives of the National Laboratories and single-purpose
research facilities, to--
(1) coordinate technology transfer activities occurring at
National Laboratories and single-purpose research facilities;
(2) exchange information about technology transfer
practices, including alternative approaches to resolution of
disputes involving intellectual property rights and other
technology transfer matters; and
(3) develop and disseminate to the public and prospective
technology partners information about opportunities and
procedures for technology transfer with the Department,
including those related to alternative approaches to resolution
of disputes involving intellectual property rights and other
technology transfer matters.
(c) Technology Transfer Responsibility.--Nothing in this section
shall affect the technology transfer responsibilities of Federal
employees under the Stevenson-Wydler Technology Innovation Act of 1980
(15 U.S.C. 3701 et seq.).

SEC. 976. FEDERAL LABORATORY EDUCATIONAL PARTNERS.

(a) Distribution of Royalties Received by Federal Agencies.--
Section 14(a)(1)(B)(v) of the Stevenson-Wydler Technology Innovation
Act of 1980 (15 U.S.C. 3710c(a)(1)(B)(v)), is amended to read as
follows:
``(v) for scientific research and development and
for educational assistance and other purposes
consistent with the missions and objectives of the
agency and the laboratory.''.
(b) Cooperative Research and Development Agreements.--Section
12(b)(5)(C) of the Stevenson-Wydler Technology Innovation Act of 1980
(15 U.S.C. 3710a(b)(5)(C)) is amended to read as follows:
``(C) for scientific research and development and for
educational assistance consistent with the missions and
objectives of the agency and the laboratory.''.

SEC. 977. INTERAGENCY COOPERATION.

The Secretary shall enter into discussions with the Administrator
of the National Aeronautics and Space Administration with the goal of
reaching an interagency working agreement between the 2 agencies that
would make the National Aeronautics and Space Administration's
expertise in energy, gained from its existing and planned programs,
more readily available to the relevant research, development,
demonstration, and commercial applications programs of the Department.
Technologies to be discussed should include the National Aeronautics
and Space Administration's modeling, research, development, testing,
and evaluation of new energy technologies, including solar, wind, fuel
cells, and hydrogen storage and distribution.

SEC. 978. TECHNOLOGY INFRASTRUCTURE PROGRAM.

(a) Establishment.--The Secretary shall establish a Technology
Infrastructure Program in accordance with this section.
(b) Purpose.--The purpose of the Technology Infrastructure Program
shall be to improve the ability of National Laboratories and single-
purpose research facilities to support departmental missions by--
(1) stimulating the development of technology clusters that
can support departmental missions at the National Laboratories
or single-purpose research facilities;
(2) improving the ability of National Laboratories and
single-purpose research facilities to leverage and benefit from
commercial research, technology, products, processes, and
services; and
(3) encouraging the exchange of scientific and
technological expertise between National Laboratories or
single-purpose research facilities and entities that can
support departmental missions at the National Laboratories or
single-purpose research facilities, such as institutions of
higher education; technology-related business concerns;
nonprofit institutions; and agencies of State, tribal, or local
governments.
(c) Projects.--The Secretary shall authorize the Director of each
National Laboratory or single-purpose research facility to implement
the Technology Infrastructure Program at such National Laboratory or
facility through projects that meet the requirements of subsections (d)
and (e).
(d) Program Requirements.--Each project funded under this section
shall meet the following requirements:
(1) Each project shall include at least 1 of each of the
following entities: a business; an institution of higher
education; a nonprofit institution; and an agency of a State,
local, or tribal government.
(2) Not less than 50 percent of the costs of each project
funded under this section shall be provided from non-Federal
sources. The calculation of costs paid by the non-Federal
sources to a project shall include cash, personnel, services,
equipment, and other resources expended on the project after
start of the project. Independent research and development
expenses of Government contractors that qualify for
reimbursement under section 31.205-18(e) of the Federal
Acquisition Regulation issued pursuant to section 25(c)(1) of
the Office of Federal Procurement Policy Act (41 U.S.C.
421(c)(1)) may be credited toward costs paid by non-Federal
sources to a project, if the expenses meet the other
requirements of this section.
(3) All projects under this section shall be competitively
selected using procedures determined by the Secretary.
(4) Any participant that receives funds under this section
may use generally accepted accounting principles for
maintaining accounts, books, and records relating to the
project.
(5) No Federal funds shall be made available under this
section for construction or any project for more than 5 years.
(e) Selection Criteria.--
(1) In general.--The Secretary shall allocate funds under
this section only if the Director of the National Laboratory or
single-purpose research facility managing the project
determines that the project is likely to improve the ability of
the National Laboratory or single-purpose research facility to
achieve technical success in meeting departmental missions.
(2) Criteria.--The Secretary shall consider the following
criteria in selecting a project to receive Federal funds:
(A) The potential of the project to promote the
development of a commercially sustainable technology
cluster following the period of Department investment,
which will derive most of the demand for its products
or services from the private sector, and which will
support departmental missions at the participating
National Laboratory or single-purpose research
facility.
(B) The potential of the project to promote the use
of commercial research, technology, products,
processes, and services by the participating National
Laboratory or single-purpose research facility to
achieve its mission or the commercial development of
technological innovations made at the participating
National Laboratory or single-purpose research
facility.
(C) The extent to which the project involves a wide
variety and number of institutions of higher education,
nonprofit institutions, and technology-related business
concerns that can support the missions of the
participating National Laboratory or single-purpose
research facility and that will make substantive
contributions to achieving the goals of the project.
(D) The extent to which the project focuses on
promoting the development of technology-related
business concerns that are small businesses or involves
such small businesses substantively in the project.
(E) Such other criteria as the Secretary determines
to be appropriate.
(f) Allocation.--In allocating funds for projects approved under
this section, the Secretary shall provide--
(1) the Federal share of the project costs; and
(2) additional funds to the National Laboratory or single-
purpose research facility managing the project to permit the
National Laboratory or single-purpose research facility to
carry out activities relating to the project, and to coordinate
such activities with the project.
(g) Report to Congress.--Not later than July 1, 2006, the Secretary
shall report to Congress on whether the Technology Infrastructure
Program should be continued and, if so, how the program should be
managed.
(h) Definitions.--In this section:
(1) Technology cluster.--The term ``technology cluster''
means a concentration of technology-related business concerns,
institutions of higher education, or nonprofit institutions
that reinforce each other's performance in the areas of
technology development through formal or informal
relationships.
(2) Technology-related business concern.--The term
``technology-related business concern'' means a for-profit
corporation, company, association, firm, partnership, or small
business concern that conducts scientific or engineering
research; develops new technologies; manufactures products
based on new technologies; or performs technological services.
(i) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary for activities under this section
$10,000,000 for each of fiscal years 2004, 2005, and 2006.

SEC. 979. REPROGRAMMING.

(a) Distribution Report.--Not later than 60 days after the date of
the enactment of an Act appropriating amounts authorized under this
title, the Secretary shall transmit to the appropriate authorizing
committees of Congress a report explaining how such amounts will be
distributed among the authorizations contained in this title.
(b) Prohibition.--
(1) In general.--No amount identified under subsection (a)
shall be reprogrammed if such reprogramming would result in an
obligation which changes an individual distribution required to
be reported under subsection (a) by more than 5 percent unless
the Secretary has transmitted to the appropriate authorizing
committees of Congress a report described in subsection (c) and
a period of 30 days has elapsed after such committees receive
the report.
(2) Computation.--In the computation of the 30-day period
described in paragraph (1), there shall be excluded any day on
which either House of Congress is not in session because of an
adjournment of more than 3 days to a day certain.
(c) Reprogramming Report.--A report referred to in subsection
(b)(1) shall contain a full and complete statement of the action
proposed to be taken and the facts and circumstances relied on in
support of the proposed action.

SEC. 980. CONSTRUCTION WITH OTHER LAWS.

Except as otherwise provided in this title, the Secretary shall
carry out the research, development, demonstration, and commercial
application programs, projects, and activities authorized by this title
in accordance with the applicable provisions of the Atomic Energy Act
of 1954 (42 U.S.C. 2011 et seq.), the Federal Nonnuclear Research and
Development Act of 1974 (42 U.S.C. 5901 et seq.), the Energy Policy Act
of 1992 (42 U.S.C. 13201 et seq.), the Stevenson-Wydler Technology
Innovation Act of 1980 (15 U.S.C. 3701 et seq.), chapter 18 of title
35, United States Code (commonly referred to as the Bayh-Dole Act), and
any other Act under which the Secretary is authorized to carry out such
activities.

SEC. 981. REPORT ON RESEARCH AND DEVELOPMENT PROGRAM EVALUATION
METHODOLOGIES.

Not later than 180 days after the date of enactment of this Act,
the Secretary shall enter into appropriate arrangements with the
National Academy of Sciences to investigate and report on the
scientific and technical merits of any evaluation methodology currently
in use or proposed for use in relation to the scientific and technical
programs of the Department by the Secretary or other Federal official.
Not later than 6 months after receiving the report of the National
Academy, the Secretary shall submit such report to Congress, along with
any other views or plans of the Secretary with respect to the future
use of such evaluation methodology.

SEC. 982. DEPARTMENT OF ENERGY SCIENCE AND TECHNOLOGY SCHOLARSHIP
PROGRAM.

(a) Establishment of Program.--
(1) In general.--The Secretary is authorized to establish a
Department of Energy Science and Technology Scholarship Program
to award scholarships to individuals that is designed to
recruit and prepare students for careers in the Department.
(2) Competitive process.--Individuals shall be selected to
receive scholarships under this section through a competitive
process primarily on the basis of academic merit, with
consideration given to financial need and the goal of promoting
the participation of individuals identified in section 33 or 34
of the Science and Engineering Equal Opportunities Act (42
U.S.C. 1885a or 1885b).
(3) Service agreements.--To carry out the Program the
Secretary shall enter into contractual agreements with
individuals selected under paragraph (2) under which the
individuals agree to serve as full-time employees of the
Department, for the period described in subsection (f)(1), in
positions needed by the Department and for which the
individuals are qualified, in exchange for receiving a
scholarship.
(b) Scholarship Eligibility.--In order to be eligible to
participate in the Program, an individual must--
(1) be enrolled or accepted for enrollment as a full-time
student at an institution of higher education in an academic
program or field of study described in the list made available
under subsection (d);
(2) be a United States citizen; and
(3) at the time of the initial scholarship award, not be a
Federal employee as defined in section 2105 of title 5 of the
United States Code.
(c) Application Required.--An individual seeking a scholarship
under this section shall submit an application to the Secretary at such
time, in such manner, and containing such information, agreements, or
assurances as the Secretary may require.
(d) Eligible Academic Programs.--The Secretary shall make publicly
available a list of academic programs and fields of study for which
scholarships under the Program may be utilized, and shall update the
list as necessary.
(e) Scholarship Requirement.--
(1) In general.--The Secretary may provide a scholarship
under the Program for an academic year if the individual
applying for the scholarship has submitted to the Secretary, as
part of the application required under subsection (c), a
proposed academic program leading to a degree in a program or
field of study on the list made available under subsection (d).
(2) Duration of eligibility.--An individual may not receive
a scholarship under this section for more than 4 academic
years, unless the Secretary grants a waiver.
(3) Scholarship amount.--The dollar amount of a scholarship
under this section for an academic year shall be determined
under regulations issued by the Secretary, but shall in no case
exceed the cost of attendance.
(4) Authorized uses.--A scholarship provided under this
section may be expended for tuition, fees, and other authorized
expenses as established by the Secretary by regulation.
(5) Contracts regarding direct payments to institutions.--
The Secretary may enter into a contractual agreement with an
institution of higher education under which the amounts
provided for a scholarship under this section for tuition,
fees, and other authorized expenses are paid directly to the
institution with respect to which the scholarship is provided.
(f) Period of Obligated Service.--
(1) Duration of service.--The period of service for which
an individual shall be obligated to serve as an employee of the
Department is, except as provided in subsection (h)(2), 24
months for each academic year for which a scholarship under
this section is provided.
(2) Schedule for service.--
(A) In general.--Except as provided in subparagraph
(B), obligated service under paragraph (1) shall begin
not later than 60 days after the individual obtains the
educational degree for which the scholarship was
provided.
(B) Deferral.--The Secretary may defer the
obligation of an individual to provide a period of
service under paragraph (1) if the Secretary determines
that such a deferral is appropriate. The Secretary
shall prescribe the terms and conditions under which a
service obligation may be deferred through regulation.
(g) Penalties for Breach of Scholarship Agreement.--
(1) Failure to complete academic training.--Scholarship
recipients who fail to maintain a high level of academic
standing, as defined by the Secretary by regulation, who are
dismissed from their educational institutions for disciplinary
reasons, or who voluntarily terminate academic training before
graduation from the educational program for which the
scholarship was awarded, shall be in breach of their
contractual agreement and, in lieu of any service obligation
arising under such agreement, shall be liable to the United
States for repayment not later than 1 year after the date of
default of all scholarship funds paid to them and to the
institution of higher education on their behalf under the
agreement, except as provided in subsection (h)(2). The
repayment period may be extended by the Secretary when
determined to be necessary, as established by regulation.
(2) Failure to begin or complete the service obligation or
meet the terms and conditions of deferment.--A scholarship
recipient who, for any reason, fails to begin or complete a
service obligation under this section after completion of
academic training, or fails to comply with the terms and
conditions of deferment established by the Secretary pursuant
to subsection (f)(2)(B), shall be in breach of the contractual
agreement. When a recipient breaches an agreement for the
reasons stated in the preceding sentence, the recipient shall
be liable to the United States for an amount equal to--
(A) the total amount of scholarships received by
such individual under this section; plus
(B) the interest on the amounts of such awards
which would be payable if at the time the awards were
received they were loans bearing interest at the
maximum legal prevailing rate, as determined by the
Treasurer of the United States,
multiplied by 3.
(h) Waiver or Suspension of Obligation.--
(1) Death of individual.--Any obligation of an individual
incurred under the Program (or a contractual agreement
thereunder) for service or payment shall be canceled upon the
death of the individual.
(2) Impossibility or extreme hardship.--The Secretary shall
by regulation provide for the partial or total waiver or
suspension of any obligation of service or payment incurred by
an individual under the Program (or a contractual agreement
thereunder) whenever compliance by the individual is impossible
or would involve extreme hardship to the individual, or if
enforcement of such obligation with respect to the individual
would be contrary to the best interests of the Government.
(i) Definitions.--In this section the following definitions apply:
(1) Cost of attendance.--The term ``cost of attendance''
has the meaning given that term in section 472 of the Higher
Education Act of 1965 (20 U.S.C. 1087ll).
(2) Program.--The term ``Program'' means the Department of
Energy Science and Technology Scholarship Program established
under this section.
(j) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary for activities under this section--
(1) for fiscal year 2004, $800,000;
(2) for fiscal year 2005, $1,600,000;
(3) for fiscal year 2006, $2,000,000;
(4) for fiscal year 2007, $2,000,000; and
(5) for fiscal year 2008, $2,000,000.

SEC. 983. REPORT ON EQUAL EMPLOYMENT OPPORTUNITY PRACTICES.

Not later than 12 months after the date of enactment of this Act,
and biennially thereafter, the Secretary shall transmit to Congress a
report on the equal employment opportunity practices at National
Laboratories. Such report shall include--
(1) a thorough review of each laboratory contractor's equal
employment opportunity policies, including promotion to
management and professional positions and pay raises;
(2) a statistical report on complaints and their
disposition in the laboratories;
(3) a description of how equal employment opportunity
practices at the laboratories are treated in the contract and
in calculating award fees for each contractor;
(4) a summary of disciplinary actions and their disposition
by either the Department or the relevant contractors for each
laboratory;
(5) a summary of outreach efforts to attract women and
minorities to the laboratories;
(6) a summary of efforts to retain women and minorities in
the laboratories; and
(7) a summary of collaboration efforts with the Office of
Federal Contract Compliance Programs to improve equal
employment opportunity practices at the laboratories.

SEC. 984. SMALL BUSINESS ADVOCACY AND ASSISTANCE.

(a) Small Business Advocate.--The Secretary shall require the
Director of each National Laboratory, and may require the Director of a
single-purpose research facility, to designate a small business
advocate to--
(1) increase the participation of small business concerns,
including socially and economically disadvantaged small
business concerns, in procurement, collaborative research,
technology licensing, and technology transfer activities
conducted by the National Laboratory or single-purpose research
facility;
(2) report to the Director of the National Laboratory or
single-purpose research facility on the actual participation of
small business concerns, including socially and economically
disadvantaged small business concerns, in procurement,
collaborative research, technology licensing, and technology
transfer activities along with recommendations, if appropriate,
on how to improve participation;
(3) make available to small businesses training, mentoring,
and information on how to participate in procurement and
collaborative research activities;
(4) increase the awareness inside the National Laboratory
or single-purpose research facility of the capabilities and
opportunities presented by small business concerns; and
(5) establish guidelines for the program under subsection
(b) and report on the effectiveness of such program to the
Director of the National Laboratory or single-purpose research
facility.
(b) Establishment of Small Business Assistance Program.--The
Secretary shall require the Director of each National Laboratory, and
may require the Director of a single-purpose research facility, to
establish a program to provide small business concerns--
(1) assistance directed at making them more effective and
efficient subcontractors or suppliers to the National
Laboratory or single-purpose research facility; or
(2) general technical assistance, the cost of which shall
not exceed $10,000 per instance of assistance, to improve the
small business concerns' products or services.
(c) Use of Funds.--None of the funds expended under subsection (b)
may be used for direct grants to the small business concerns.
(d) Definitions.--In this section:
(1) Small business concern.--The term ``small business
concern'' has the meaning given such term in section 3 of the
Small Business Act (15 U.S.C. 632).
(2) Socially and economically disadvantaged small business
concerns.--The term ``socially and economically disadvantaged
small business concerns'' has the meaning given such term in
section 8(a)(4) of the Small Business Act (15 U.S.C.
637(a)(4)).
(e) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary for activities under this section
$5,000,000 for each of fiscal years 2004 through 2008.

SEC. 985. REPORT ON MOBILITY OF SCIENTIFIC AND TECHNICAL PERSONNEL.

Not later than 2 years after the date of enactment of this Act, the
Secretary shall transmit a report to Congress identifying any policies
or procedures of a contractor operating a National Laboratory or
single-purpose research facility that create disincentives to the
temporary transfer of scientific and technical personnel among the
contractor-operated National Laboratories or contractor-operated
single-purpose research facilities and provide suggestions for
improving interlaboratory exchange of scientific and technical
personnel.

SEC. 986. NATIONAL ACADEMY OF SCIENCES REPORT.

Not later than 90 days after the date of enactment of this Act, the
Secretary shall enter into an arrangement with the National Academy of
Sciences for the Academy to--
(1) conduct a study on--
(A) the obstacles to accelerating the commercial
application of energy technology; and
(B) the adequacy of Department policies and
procedures for, and oversight of, technology transfer-
related disputes between contractors of the Department
and the private sector; and
(2) transmit a report to Congress on recommendations
developed as a result of the study.

SEC. 987. OUTREACH.

The Secretary shall ensure that each program authorized by this
title includes an outreach component to provide information, as
appropriate, to manufacturers, consumers, engineers, architects,
builders, energy service companies, institutions of higher education,
small businesses, facility planners and managers, State and local
governments, and other entities.

SEC. 988. COMPETITIVE AWARD OF MANAGEMENT CONTRACTS.

None of the funds authorized to be appropriated to the Secretary by
this title may be used to award a management and operating contract for
a nonmilitary energy laboratory of the Department unless such contract
is competitively awarded or the Secretary grants, on a case-by-case
basis, a waiver to allow for such a deviation. The Secretary may not
delegate the authority to grant such a waiver and shall submit to
Congress a report notifying Congress of the waiver and setting forth
the reasons for the waiver at least 60 days prior to the date of the
award of such a contract.

SEC. 989. EDUCATIONAL PROGRAMS IN SCIENCE AND MATHEMATICS.

(a) Activities.--Section 3165(a) of the Department of Energy
Science Education Enhancement Act (42 U.S.C. 7381b(a)) is amended by
adding at the end the following:
``(14) Support competitive events for students, under
supervision of teachers, designed to encourage student interest
and knowledge in science and mathematics.''.
(b) Authorization of Appropriations.--Section 3169 of the
Department of Energy Science Education Enhancement Act (42 U.S.C.
7381e), as so redesignated by section 1102(b), is amended by inserting
before the period ``; and $40,000,000 for each of fiscal years 2004
through 2008''.

TITLE X--DEPARTMENT OF ENERGY MANAGEMENT

SEC. 1001. ADDITIONAL ASSISTANT SECRETARY POSITION.

(a) Additional Assistant Secretary Position to Enable Improved
Management of Nuclear Energy Issues.--
(1) In general.--Section 203(a) of the Department of Energy
Organization Act (42 U.S.C. 7133(a)) is amended by striking
``six Assistant Secretaries'' and inserting ``7 Assistant
Secretaries''.
(2) Sense of congress.--It is the sense of Congress that
the leadership for departmental missions in nuclear energy
should be at the Assistant Secretary level.
(b) Technical and Conforming Amendments.--
(1) Title 5.--Section 5315 of title 5, United States Code,
is amended by striking ``Assistant Secretaries of Energy (6)''
and inserting ``Assistant Secretaries of Energy (7)''.
(2) Department of energy organization act.--The table of
contents for the Department of Energy Organization Act (42
U.S.C. 7101 note) is amended--
(A) by striking ``Section 209'' and inserting
``Sec. 209'';
(B) by striking ``213.'' and inserting ``Sec.
213.'';
(C) by striking ``214.'' and inserting ``Sec.
214.'';
(D) by striking ``215.'' and inserting ``Sec.
215.''; and
(E) by striking ``216.'' and inserting ``Sec.
216.''.

SEC. 1002. OTHER TRANSACTIONS AUTHORITY.

Section 646 of the Department of Energy Organization Act (42 U.S.C.
7256) is amended by adding at the end the following:
``(g)(1) In addition to other authorities granted to the Secretary
under law, the Secretary may enter into other transactions on such
terms as the Secretary may deem appropriate in furtherance of research,
development, or demonstration functions vested in the Secretary. Such
other transactions shall not be subject to the provisions of section 9
of the Federal Nonnuclear Energy Research and Development Act of 1974
(42 U.S.C. 5908) or section 152 of the Atomic Energy Act of 1954 (42
U.S.C. 2182).
``(2)(A) The Secretary shall ensure that--
``(i) to the maximum extent the Secretary determines
practicable, no transaction entered into under paragraph (1)
provides for research, development, or demonstration that
duplicates research, development, or demonstration being
conducted under existing projects carried out by the
Department;
``(ii) to the extent the Secretary determines practicable,
the funds provided by the Government under a transaction
authorized by paragraph (1) do not exceed the total amount
provided by other parties to the transaction; and
``(iii) to the extent the Secretary determines practicable,
competitive, merit-based selection procedures shall be used
when entering into transactions under paragraph (1).
``(B) A transaction authorized by paragraph (1) may be used for a
research, development, or demonstration project only if the Secretary
makes a written determination that the use of a standard contract,
grant, or cooperative agreement for the project is not feasible or
appropriate.
``(3)(A) The Secretary shall protect from disclosure, including
disclosure under section 552 of title 5, United States Code, for up to
5 years after the date the information is received by the Secretary--
``(i) a proposal, proposal abstract, and supporting
documents submitted to the Department in a competitive or
noncompetitive process having the potential for resulting in an
award under paragraph (1) to the party submitting the
information; and
``(ii) a business plan and technical information relating
to a transaction authorized by paragraph (1) submitted to the
Department as confidential business information.
``(B) The Secretary may protect from disclosure, for up to 5 years
after the information was developed, any information developed pursuant
to a transaction under paragraph (1) which developed information is of
a character that it would be protected from disclosure under section
552(b)(4) of title 5, United States Code, if obtained from a person
other than a Federal agency.
``(4) Not later than 90 days after the date of enactment of this
subsection, the Secretary shall prescribe guidelines for using other
transactions authorized by paragraph (1). Such guidelines shall be
published in the Federal Register for public comment under rulemaking
procedures of the Department.
``(5) The authority of the Secretary under this subsection may be
delegated only to an officer of the Department who is appointed by the
President by and with the advice and consent of the Senate and may not
be delegated to any other person.
``(6)(A) Not later than September 31, 2005, the Comptroller General
of the United States shall report to Congress on the Department's use
of the authorities granted under this section, including the ability to
attract nontraditional government contractors and whether additional
safeguards are needed with respect to the use of such authorities.
``(B) In this section, the term `nontraditional Government
contractor' has the same meaning as the term `nontraditional defense
contractor' as defined in section 845(e) of the National Defense
Authorization Act for Fiscal Year 1994 (Public Law 103-160; 10 U.S.C.
2371 note).''.

TITLE XI--PERSONNEL AND TRAINING

SEC. 1101. TRAINING GUIDELINES FOR ELECTRIC ENERGY INDUSTRY PERSONNEL.

The Secretary of Energy, in consultation with the Secretary of
Labor and jointly with the electric industry and recognized employee
representatives, shall develop model personnel training guidelines to
support electric system reliability and safety. The training guidelines
shall, at a minimum--
(1) include training requirements for workers engaged in
the construction, operation, inspection, and maintenance of
electric generation, transmission, and distribution, including
competency and certification requirements, and assessment
requirements that include initial and ongoing evaluation of
workers, recertification assessment procedures, and methods for
examining or testing the qualification of individuals
performing covered tasks; and
(2) consolidate existing training guidelines on the
construction, operation, maintenance, and inspection of
electric generation, transmission, and distribution facilities,
such as those established by the National Electric Safety Code
and other industry consensus standards.

SEC. 1102. IMPROVED ACCESS TO ENERGY-RELATED SCIENTIFIC AND TECHNICAL
CAREERS.

(a) Department of Energy Science Education Programs.--Section 3164
of the Department of Energy Science Education Enhancement Act (42
U.S.C. 7381a) is amended by adding at the end the following:
``(c) Programs for Students From Underrepresented Groups.--In
carrying out a program under subsection (a), the Secretary shall give
priority to activities that are designed to encourage students from
underrepresented groups to pursue scientific and technical careers.''.
(b) Partnerships With Historically Black Colleges and Universities,
Hispanic-Servicing Institutions, and Tribal Colleges.--The Department
of Energy Science Education Enhancement Act (42 U.S.C. 7381 et seq.) is
amended--
(1) by redesignating sections 3167 and 3168 as sections
3168 and 3169, respectively; and
(2) by inserting after section 3166 the following:

``SEC. 3167. PARTNERSHIPS WITH HISTORICALLY BLACK COLLEGES AND
UNIVERSITIES, HISPANIC-SERVING INSTITUTIONS, AND TRIBAL
COLLEGES.

``(a) Definitions.--In this section:
``(1) Hispanic-serving institution.--The term `Hispanic-
serving institution' has the meaning given that term in section
502(a) of the Higher Education Act of 1965 (20 U.S.C.
1101a(a)).
``(2) Historically black college or university.--The term
`historically Black college or university' has the meaning
given the term `part B institution' in section 322 of the
Higher Education Act of 1965 (20 U.S.C. 1061).
``(3) National laboratory.--The term `National Laboratory'
has the meaning given that term in section 902 of the Energy
Policy Act of 2003.
``(4) Science facility.--The term `science facility' has
the meaning given the term `single-purpose research facility'
in section 902 of the Energy Policy Act of 2003.
``(5) Tribal college.--The term `tribal college' has the
meaning given the term `Tribal College or University' in
section 316(b)(3) of the Higher Education Act of 1965 (20
U.S.C. 1059c(b)(3)).
``(b) Education Partnership.--The Secretary shall direct the
Director of each National Laboratory and, to the extent practicable,
the head of any science facility to increase the participation of
historically Black colleges or universities, Hispanic-serving
institutions, or tribal colleges in activities that increase the
capacity of the historically Black colleges or universities, Hispanic-
serving institutions, or tribal colleges to train personnel in science
or engineering.
``(c) Activities.--An activity under subsection (b) may include--
``(1) collaborative research;
``(2) equipment transfer;
``(3) training activities conducted at a National
Laboratory or science facility; and
``(4) mentoring activities conducted at a National
Laboratory or science facility.
``(d) Report.--Not later than 2 years after the date of enactment
of the Energy Policy Act of 2003, the Secretary shall submit to
Congress a report on the activities carried out under this section.''.

SEC. 1103. NATIONAL POWER PLANT OPERATIONS TECHNOLOGY AND EDUCATION
CENTER.

(a) Establishment.--The Secretary shall support the establishment
of a National Power Plant Operations Technology and Education Center
(in this section referred to as the ``Center''), to address the need
for training and educating certified operators for nonnuclear electric
power generation plants.
(b) Role.--The Center shall provide both training and continuing
education relating to nonnuclear electric power generation plant
technologies and operations. The Center shall conduct training and
education activities on site and through Internet-based information
technologies that allow for learning at remote sites.
(c) Criteria for Competitive Selection.--The Secretary shall
support the establishment of the Center at an institution of higher
education with expertise in power plant technology and operation and
with the ability to provide onsite as well as Internet-based training.

SEC. 1104. INTERNATIONAL ENERGY TRAINING.

(a) In General.--The Secretary of Energy, in consultation with the
Secretaries of Commerce, Interior, and State and the Federal Energy
Regulatory Commission, shall coordinate training and outreach efforts
for international commercial energy markets in countries with
developing and restructuring economies.
(b) Components.--The efforts may address--
(1) production-related fiscal regimes;
(2) grid and network issues;
(3) energy user and demand side response;
(4) international trade of energy; and
(5) international transportation of energy.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $1,500,000 for each of fiscal
years 2004 through 2007.

TITLE XII--ELECTRICITY

SEC. 1201. SHORT TITLE.

This title may be cited as the ``Electric Reliability Act of
2004''.

Subtitle A--Reliability Standards

SEC. 1211. ELECTRIC RELIABILITY STANDARDS.

(a) In General.--Part II of the Federal Power Act (16 U.S.C 824 et
seq.) is amended by adding at the end the following:

``SEC. 215. ELECTRIC RELIABILITY.

``(a) Definitions.--For purposes of this section:
``(1) The term `bulk-power system' means--
``(A) facilities and control systems necessary for
operating an interconnected electric energy
transmission network (or any portion thereof); and
``(B) electric energy from generation facilities
needed to maintain transmission system reliability.
The term does not include facilities used in the local
distribution of electric energy.
``(2) The terms `Electric Reliability Organization' and
`ERO' mean the organization certified by the Commission under
subsection (c) the purpose of which is to establish and enforce
reliability standards for the bulk-power system, subject to
Commission review.
``(3) The term `reliability standard' means a requirement,
approved by the Commission under this section, to provide for
reliable operation of the bulk-power system. The term includes
requirements for the operation of existing bulk-power system
facilities and the design of planned additions or modifications
to such facilities to the extent necessary to provide for
reliable operation of the bulk-power system, but the term does
not include any requirement to enlarge such facilities or to
construct new transmission capacity or generation capacity.
``(4) The term `reliable operation' means operating the
elements of the bulk-power system within equipment and electric
system thermal, voltage, and stability limits so that
instability, uncontrolled separation, or cascading failures of
such system will not occur as a result of a sudden disturbance
or unanticipated failure of system elements.
``(5) The term `Interconnection' means a geographic area in
which the operation of bulk-power system components is
synchronized such that the failure of 1 or more of such
components may adversely affect the ability of the operators of
other components within the system to maintain reliable
operation of the facilities within their control.
``(6) The term `transmission organization' means a Regional
Transmission Organization, Independent System Operator,
independent transmission provider, or other transmission
organization finally approved by the Commission for the
operation of transmission facilities.
``(7) The term `regional entity' means an entity having
enforcement authority pursuant to subsection (e)(4).
``(b) Jurisdiction and Applicability.--(1) The Commission shall
have jurisdiction, within the United States, over the ERO certified by
the Commission under subsection (c), any regional entities, and all
users, owners and operators of the bulk-power system, including but not
limited to the entities described in section 201(f), for purposes of
approving reliability standards established under this section and
enforcing compliance with this section. All users, owners and operators
of the bulk-power system shall comply with reliability standards that
take effect under this section.
``(2) The Commission shall issue a final rule to implement the
requirements of this section not later than 180 days after the date of
enactment of this section.
``(c) Certification.--Following the issuance of a Commission rule
under subsection (b)(2), any person may submit an application to the
Commission for certification as the Electric Reliability Organization.
The Commission may certify 1 such ERO if the Commission determines that
such ERO--
``(1) has the ability to develop and enforce, subject to
subsection (e)(2), reliability standards that provide for an
adequate level of reliability of the bulk-power system; and
``(2) has established rules that--
``(A) assure its independence of the users and
owners and operators of the bulk-power system, while
assuring fair stakeholder representation in the
selection of its directors and balanced decisionmaking
in any ERO committee or subordinate organizational
structure;
``(B) allocate equitably reasonable dues, fees, and
other charges among end users for all activities under
this section;
``(C) provide fair and impartial procedures for
enforcement of reliability standards through the
imposition of penalties in accordance with subsection
(e) (including limitations on activities, functions, or
operations, or other appropriate sanctions);
``(D) provide for reasonable notice and opportunity
for public comment, due process, openness, and balance
of interests in developing reliability standards and
otherwise exercising its duties; and
``(E) provide for taking, after certification,
appropriate steps to gain recognition in Canada and
Mexico.
``(d) Reliability Standards.--(1) The Electric Reliability
Organization shall file each reliability standard or modification to a
reliability standard that it proposes to be made effective under this
section with the Commission.
``(2) The Commission may approve, by rule or order, a proposed
reliability standard or modification to a reliability standard if it
determines that the standard is just, reasonable, not unduly
discriminatory or preferential, and in the public interest. The
Commission shall give due weight to the technical expertise of the
Electric Reliability Organization with respect to the content of a
proposed standard or modification to a reliability standard and to the
technical expertise of a regional entity organized on an
Interconnection-wide basis with respect to a reliability standard to be
applicable within that Interconnection, but shall not defer with
respect to the effect of a standard on competition. A proposed standard
or modification shall take effect upon approval by the Commission.
``(3) The Electric Reliability Organization shall rebuttably
presume that a proposal from a regional entity organized on an
Interconnection-wide basis for a reliability standard or modification
to a reliability standard to be applicable on an Interconnection-wide
basis is just, reasonable, and not unduly discriminatory or
preferential, and in the public interest.
``(4) The Commission shall remand to the Electric Reliability
Organization for further consideration a proposed reliability standard
or a modification to a reliability standard that the Commission
disapproves in whole or in part.
``(5) The Commission, upon its own motion or upon complaint, may
order the Electric Reliability Organization to submit to the Commission
a proposed reliability standard or a modification to a reliability
standard that addresses a specific matter if the Commission considers
such a new or modified reliability standard appropriate to carry out
this section.
``(6) The final rule adopted under subsection (b)(2) shall include
fair processes for the identification and timely resolution of any
conflict between a reliability standard and any function, rule, order,
tariff, rate schedule, or agreement accepted, approved, or ordered by
the Commission applicable to a transmission organization. Such
transmission organization shall continue to comply with such function,
rule, order, tariff, rate schedule or agreement accepted approved, or
ordered by the Commission until--
``(A) the Commission finds a conflict exists between a
reliability standard and any such provision;
``(B) the Commission orders a change to such provision
pursuant to section 206 of this part; and
``(C) the ordered change becomes effective under this part.
If the Commission determines that a reliability standard needs to be
changed as a result of such a conflict, it shall order the ERO to
develop and file with the Commission a modified reliability standard
under paragraph (4) or (5) of this subsection.
``(e) Enforcement.--(1) The ERO may impose, subject to paragraph
(2), a penalty on a user or owner or operator of the bulk-power system
for a violation of a reliability standard approved by the Commission
under subsection (d) if the ERO, after notice and an opportunity for a
hearing--
``(A) finds that the user or owner or operator has violated
a reliability standard approved by the Commission under
subsection (d); and
``(B) files notice and the record of the proceeding with
the Commission.
``(2) A penalty imposed under paragraph (1) may take effect not
earlier than the 31st day after the ERO files with the Commission
notice of the penalty and the record of proceedings. Such penalty shall
be subject to review by the Commission, on its own motion or upon
application by the user, owner or operator that is the subject of the
penalty filed within 30 days after the date such notice is filed with
the Commission. Application to the Commission for review, or the
initiation of review by the Commission on its own motion, shall not
operate as a stay of such penalty unless the Commission otherwise
orders upon its own motion or upon application by the user, owner or
operator that is the subject of such penalty. In any proceeding to
review a penalty imposed under paragraph (1), the Commission, after
notice and opportunity for hearing (which hearing may consist solely of
the record before the ERO and opportunity for the presentation of
supporting reasons to affirm, modify, or set aside the penalty), shall
by order affirm, set aside, reinstate, or modify the penalty, and, if
appropriate, remand to the ERO for further proceedings. The Commission
shall implement expedited procedures for such hearings.
``(3) On its own motion or upon complaint, the Commission may order
compliance with a reliability standard and may impose a penalty against
a user or owner or operator of the bulk-power system if the Commission
finds, after notice and opportunity for a hearing, that the user or
owner or operator of the bulk-power system has engaged or is about to
engage in any acts or practices that constitute or will constitute a
violation of a reliability standard.
``(4) The Commission shall issue regulations authorizing the ERO to
enter into an agreement to delegate authority to a regional entity for
the purpose of proposing reliability standards to the ERO and enforcing
reliability standards under paragraph (1) if--
``(A) the regional entity is governed by--
``(i) an independent board;
``(ii) a balanced stakeholder board; or
``(iii) a combination independent and balanced
stakeholder board.
``(B) the regional entity otherwise satisfies the
provisions of subsection (c)(1) and (2); and
``(C) the agreement promotes effective and efficient
administration of bulk-power system reliability.
The Commission may modify such delegation. The ERO and the Commission
shall rebuttably presume that a proposal for delegation to a regional
entity organized on an Interconnection-wide basis promotes effective
and efficient administration of bulk-power system reliability and
should be approved. Such regulation may provide that the Commission may
assign the ERO's authority to enforce reliability standards under
paragraph (1) directly to a regional entity consistent with the
requirements of this paragraph.
``(5) The Commission may take such action as is necessary or
appropriate against the ERO or a regional entity to ensure compliance
with a reliability standard or any Commission order affecting the ERO
or a regional entity.
``(6) Any penalty imposed under this section shall bear a
reasonable relation to the seriousness of the violation and shall take
into consideration the efforts of such user, owner, or operator to
remedy the violation in a timely manner.
``(f) Changes in Electric Reliability Organization Rules.--The
Electric Reliability Organization shall file with the Commission for
approval any proposed rule or proposed rule change, accompanied by an
explanation of its basis and purpose. The Commission, upon its own
motion or complaint, may propose a change to the rules of the ERO. A
proposed rule or proposed rule change shall take effect upon a finding
by the Commission, after notice and opportunity for comment, that the
change is just, reasonable, not unduly discriminatory or preferential,
is in the public interest, and satisfies the requirements of subsection
(c).
``(g) Reliability Reports.--The ERO shall conduct periodic
assessments of the reliability and adequacy of the bulk-power system in
North America.
``(h) Coordination With Canada and Mexico.--The President is urged
to negotiate international agreements with the governments of Canada
and Mexico to provide for effective compliance with reliability
standards and the effectiveness of the ERO in the United States and
Canada or Mexico.
``(i) Savings Provisions.--(1) The ERO shall have authority to
develop and enforce compliance with reliability standards for only the
bulk-power system.
``(2) This section does not authorize the ERO or the Commission to
order the construction of additional generation or transmission
capacity or to set and enforce compliance with standards for adequacy
or safety of electric facilities or services.
``(3) Nothing in this section shall be construed to preempt any
authority of any State to take action to ensure the safety, adequacy,
and reliability of electric service within that State, as long as such
action is not inconsistent with any reliability standard.
``(4) Within 90 days of the application of the Electric Reliability
Organization or other affected party, and after notice and opportunity
for comment, the Commission shall issue a final order determining
whether a State action is inconsistent with a reliability standard,
taking into consideration any recommendation of the ERO.
``(5) The Commission, after consultation with the ERO and the State
taking action, may stay the effectiveness of any State action, pending
the Commission's issuance of a final order.
``(j) Regional Advisory Bodies.--The Commission shall establish a
regional advisory body on the petition of at least \2/3\ of the States
within a region that have more than \1/2\ of their electric load served
within the region. A regional advisory body shall be composed of 1
member from each participating State in the region, appointed by the
Governor of each State, and may include representatives of agencies,
States, and provinces outside the United States. A regional advisory
body may provide advice to the Electric Reliability Organization, a
regional entity, or the Commission regarding the governance of an
existing or proposed regional entity within the same region, whether a
standard proposed to apply within the region is just, reasonable, not
unduly discriminatory or preferential, and in the public interest,
whether fees proposed to be assessed within the region are just,
reasonable, not unduly discriminatory or preferential, and in the
public interest and any other responsibilities requested by the
Commission. The Commission may give deference to the advice of any such
regional advisory body if that body is organized on an Interconnection-
wide basis.
``(k) Alaska and Hawaii.--The provisions of this section do not
apply to Alaska or Hawaii.''.
(b) Status of ERO.--The Electric Reliability Organization certified
by the Federal Energy Regulatory Commission under section 215(c) of the
Federal Power Act and any regional entity delegated enforcement
authority pursuant to section 215(e)(4) of that Act are not
departments, agencies, or instrumentalities of the United States
Government.

Subtitle B--Transmission Infrastructure Modernization

SEC. 1221. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES.

(a) Amendment of Federal Power Act.--Part II of the Federal Power
Act is amended by adding at the end the following:

``SEC. 216. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES.

``(a) Designation of National Interest Electric Transmission
Corridors.--
``(1) Transmission congestion study.--Within 1 year after
the enactment of this section, and every 3 years thereafter,
the Secretary of Energy, in consultation with affected States,
shall conduct a study of electric transmission congestion.
After considering alternatives and recommendations from
interested parties, including an opportunity for comment from
affected States, the Secretary shall issue a report, based on
such study, which may designate any geographic area
experiencing electric energy transmission capacity constraints
or congestion that adversely affects consumers as a national
interest electric transmission corridor. The Secretary shall
conduct the study and issue the report in consultation with any
appropriate regional entity referenced in section 215 of this
Act.
``(2) Considerations.--In determining whether to designate
a national interest electric transmission corridor referred to
in paragraph (1) under this section, the Secretary may consider
whether--
``(A) the economic vitality and development of the
corridor, or the end markets served by the corridor,
may be constrained by lack of adequate or reasonably
priced electricity;
``(B)(i) economic growth in the corridor, or the
end markets served by the corridor, may be jeopardized
by reliance on limited sources of energy; and
``(ii) a diversification of supply is warranted;
``(C) the energy independence of the United States
would be served by the designation;
``(D) the designation would be in the interest of
national energy policy; and
``(E) the designation would enhance national
defense and homeland security.
``(b) Construction Permit.--Except as provided in subsection (i),
the Commission is authorized, after notice and an opportunity for
hearing, to issue a permit or permits for the construction or
modification of electric transmission facilities in a national interest
electric transmission corridor designated by the Secretary under
subsection (a) if the Commission finds that--
``(1)(A) a State in which the transmission facilities are
to be constructed or modified is without authority to--
``(i) approve the siting of the facilities; or
``(ii) consider the interstate benefits expected to
be achieved by the proposed construction or
modification of transmission facilities in the State;
``(B) the applicant for a permit is a transmitting utility
under this Act but does not qualify to apply for a permit or
siting approval for the proposed project in a State because the
applicant does not serve end-use customers in the State; or
``(C) a State commission or other entity that has authority
to approve the siting of the facilities has--
``(i) withheld approval for more than 1 year after
the filing of an application pursuant to applicable law
seeking approval or 1 year after the designation of the
relevant national interest electric transmission
corridor, whichever is later; or
``(ii) conditioned its approval in such a manner
that the proposed construction or modification will not
significantly reduce transmission congestion in
interstate commerce or is not economically feasible;
``(2) the facilities to be authorized by the permit will be
used for the transmission of electric energy in interstate
commerce;
``(3) the proposed construction or modification is
consistent with the public interest;
``(4) the proposed construction or modification will
significantly reduce transmission congestion in interstate
commerce and protects or benefits consumers; and
``(5) the proposed construction or modification is
consistent with sound national energy policy and will enhance
energy independence.
``(c) Permit Applications.--Permit applications under subsection
(b) shall be made in writing to the Commission. The Commission shall
issue rules setting forth the form of the application, the information
to be contained in the application, and the manner of service of notice
of the permit application upon interested persons.
``(d) Comments.--In any proceeding before the Commission under
subsection (b), the Commission shall afford each State in which a
transmission facility covered by the permit is or will be located, each
affected Federal agency and Indian tribe, private property owners, and
other interested persons, a reasonable opportunity to present their
views and recommendations with respect to the need for and impact of a
facility covered by the permit.
``(e) Rights-of-way.--In the case of a permit under subsection (b)
for electric transmission facilities to be located on property other
than property owned by the United States or a State, if the permit
holder cannot acquire by contract, or is unable to agree with the owner
of the property to the compensation to be paid for, the necessary
right-of-way to construct or modify such transmission facilities, the
permit holder may acquire the right-of-way by the exercise of the right
of eminent domain in the district court of the United States for the
district in which the property concerned is located, or in the
appropriate court of the State in which the property is located. The
practice and procedure in any action or proceeding for that purpose in
the district court of the United States shall conform as nearly as may
be with the practice and procedure in similar action or proceeding in
the courts of the State where the property is situated.
``(f) State Law.--Nothing in this section shall preclude any person
from constructing or modifying any transmission facility pursuant to
State law.
``(g) Compensation.--Any exercise of eminent domain authority
pursuant to this section shall be considered a taking of private
property for which just compensation is due. Just compensation shall be
an amount equal to the full fair market value of the property taken on
the date of the exercise of eminent domain authority, except that the
compensation shall exceed fair market value if necessary to make the
landowner whole for decreases in the value of any portion of the land
not subject to eminent domain. Any parcel of land acquired by eminent
domain under this subsection shall be transferred back to the owner
from whom it was acquired (or his heirs or assigns) if the land is not
used for the construction or modification of electric transmission
facilities within a reasonable period of time after the acquisition.
Other than construction, modification, operation, or maintenance of
electric transmission facilities and related facilities, property
acquired under subsection (e) may not be used for any purpose
(including use for any heritage area, recreational trail, or park)
without the consent of the owner of the parcel from whom the property
was acquired (or the owner's heirs or assigns).
``(h) Coordination of Federal Authorizations for Transmission and
Distribution Facilities.--
``(1) Lead agency.--If an applicant, or prospective
applicant, for a Federal authorization related to an electric
transmission or distribution facility so requests, the
Department of Energy (DOE) shall act as the lead agency for
purposes of coordinating all applicable Federal authorizations
and related environmental reviews of the facility. For purposes
of this subsection, the term `Federal authorization' means any
authorization required under Federal law in order to site a
transmission or distribution facility, including but not
limited to such permits, special use authorizations,
certifications, opinions, or other approvals as may be
required, whether issued by a Federal or a State agency. To the
maximum extent practicable under applicable Federal law, the
Secretary of Energy shall coordinate this Federal authorization
and review process with any Indian tribes, multi-State
entities, and State agencies that are responsible for
conducting any separate permitting and environmental reviews of
the facility, to ensure timely and efficient review and permit
decisions.
``(2) Authority to set deadlines.--As lead agency, the
Department of Energy, in consultation with agencies responsible
for Federal authorizations and, as appropriate, with Indian
tribes, multi-State entities, and State agencies that are
willing to coordinate their own separate permitting and
environmental reviews with the Federal authorization and
environmental reviews, shall establish prompt and binding
intermediate milestones and ultimate deadlines for the review
of, and Federal authorization decisions relating to, the
proposed facility. The Secretary of Energy shall ensure that
once an application has been submitted with such data as the
Secretary considers necessary, all permit decisions and related
environmental reviews under all applicable Federal laws shall
be completed within 1 year or, if a requirement of another
provision of Federal law makes this impossible, as soon
thereafter as is practicable. The Secretary of Energy also
shall provide an expeditious pre-application mechanism for
prospective applicants to confer with the agencies involved to
have each such agency determine and communicate to the
prospective applicant within 60 days of when the prospective
applicant submits a request for such information concerning--
``(A) the likelihood of approval for a potential
facility; and
``(B) key issues of concern to the agencies and
public.
``(3) Consolidated environmental review and record of
decision.--As lead agency head, the Secretary of Energy, in
consultation with the affected agencies, shall prepare a single
environmental review document, which shall be used as the basis
for all decisions on the proposed project under Federal law.
The document may be an environmental assessment or
environmental impact statement under the National Environmental
Policy Act of 1969 if warranted, or such other form of analysis
as may be warranted. The Secretary of Energy and the heads of
other agencies shall streamline the review and permitting of
transmission and distribution facilities within corridors
designated under section 503 of the Federal Land Policy and
Management Act (43 U.S.C. 1763) by fully taking into account
prior analyses and decisions relating to the corridors. Such
document shall include consideration by the relevant agencies
of any applicable criteria or other matters as required under
applicable laws.
``(4) Appeals.--In the event that any agency has denied a
Federal authorization required for a transmission or
distribution facility, or has failed to act by the deadline
established by the Secretary pursuant to this section for
deciding whether to issue the authorization, the applicant or
any State in which the facility would be located may file an
appeal with the Secretary, who shall, in consultation with the
affected agency, review the denial or take action on the
pending application. Based on the overall record and in
consultation with the affected agency, the Secretary may then
either issue the necessary authorization with any appropriate
conditions, or deny the application. The Secretary shall issue
a decision within 90 days of the filing of the appeal. In
making a decision under this paragraph, the Secretary shall
comply with applicable requirements of Federal law, including
any requirements of the Endangered Species Act, the Clean Water
Act, the National Forest Management Act, the National
Environmental Policy Act of 1969, and the Federal Land Policy
and Management Act.
``(5) Conforming regulations and memoranda of
understanding.--Not later than 18 months after the date of
enactment of this section, the Secretary of Energy shall issue
any regulations necessary to implement this subsection. Not
later than 1 year after the date of enactment of this section,
the Secretary and the heads of all Federal agencies with
authority to issue Federal authorizations shall enter into
Memoranda of Understanding to ensure the timely and coordinated
review and permitting of electricity transmission and
distribution facilities. The head of each Federal agency with
authority to issue a Federal authorization shall designate a
senior official responsible for, and dedicate sufficient other
staff and resources to ensure, full implementation of the DOE
regulations and any Memoranda. Interested Indian tribes, multi-
State entities, and State agencies may enter such Memoranda of
Understanding.
``(6) Duration and renewal.--Each Federal land use
authorization for an electricity transmission or distribution
facility shall be issued--
``(A) for a duration, as determined by the
Secretary of Energy, commensurate with the anticipated
use of the facility, and
``(B) with appropriate authority to manage the
right-of-way for reliability and environmental
protection.
Upon the expiration of any such authorization (including an
authorization issued prior to enactment of this section), the
authorization shall be reviewed for renewal taking fully into
account reliance on such electricity infrastructure,
recognizing its importance for public health, safety and
economic welfare and as a legitimate use of Federal lands.
``(7) Maintaining and enhancing the transmission
infrastructure.--In exercising the responsibilities under this
section, the Secretary of Energy shall consult regularly with
the Federal Energy Regulatory Commission (FERC), FERC-approved
electric reliability organizations (including related regional
entities), and FERC-approved Regional Transmission
Organizations and Independent System Operators.
``(i) Interstate Compacts.--The consent of Congress is hereby given
for 3 or more contiguous States to enter into an interstate compact,
subject to approval by Congress, establishing regional transmission
siting agencies to facilitate siting of future electric energy
transmission facilities within such States and to carry out the
electric energy transmission siting responsibilities of such States.
The Secretary of Energy may provide technical assistance to regional
transmission siting agencies established under this subsection. Such
regional transmission siting agencies shall have the authority to
review, certify, and permit siting of transmission facilities,
including facilities in national interest electric transmission
corridors (other than facilities on property owned by the United
States). The Commission shall have no authority to issue a permit for
the construction or modification of electric transmission facilities
within a State that is a party to a compact, unless the members of a
compact are in disagreement and the Secretary makes, after notice and
an opportunity for a hearing, the finding described in section
(b)(1)(C).
``(j) Savings Clause.--Nothing in this section shall be construed
to affect any requirement of the environmental laws of the United
States, including, but not limited to, the National Environmental
Policy Act of 1969. Subsection (h)(4) of this section shall not apply
to any Congressionally-designated components of the National Wilderness
Preservation System, the National Wild and Scenic Rivers System, or the
National Park system (including National Monuments therein).
``(k) ERCOT.--This section shall not apply within the area referred
to in section 212(k)(2)(A).''.
(b) Reports to Congress on Corridors and Rights of Way on Federal
Lands.--The Secretary of the Interior, the Secretary of Energy, the
Secretary of Agriculture, and the Chairman of the Council on
Environmental Quality shall, within 90 days of the date of enactment of
this subsection, submit a joint report to Congress identifying each of
the following:
(1) All existing designated transmission and distribution
corridors on Federal land and the status of work related to
proposed transmission and distribution corridor designations
under Title V of the Federal Land Policy and Management Act (43
U.S.C. 1761 et. Seq.), the schedule for completing such work,
any impediments to completing the work, and steps that Congress
could take to expedite the process.
(2) The number of pending applications to locate
transmission and distribution facilities on Federal lands, key
information relating to each such facility, how long each
application has been pending, the schedule for issuing a timely
decision as to each facility, and progress in incorporating
existing and new such rights-of-way into relevant land use and
resource management plans or their equivalent.
(3) The number of existing transmission and distribution
rights-of-way on Federal lands that will come up for renewal
within the following 5, 10, and 15 year periods, and a
description of how the Secretaries plan to manage such
renewals.

SEC. 1222. THIRD-PARTY FINANCE.

(a) Existing Facilities.--The Secretary of Energy (hereinafter in
this section referred to as the ``Secretary''), acting through the
Administrator of the Western Area Power Administration (hereinafter in
this section referred to as ``WAPA''), or through the Administrator of
the Southwestern Power Administration (hereinafter in this section
referred to as ``SWPA''), or both, may design, develop, construct,
operate, maintain, or own, or participate with other entities in
designing, developing, constructing, operating, maintaining, or owning,
an electric power transmission facility and related facilities
(``Project'') needed to upgrade existing transmission facilities owned
by SWPA or WAPA if the Secretary of Energy, in consultation with the
applicable Administrator, determines that the proposed Project--
(1)(A) is located in a national interest electric
transmission corridor designated under section 216(a) of the
Federal Power Act and will reduce congestion of electric
transmission in interstate commerce; or
(B) is necessary to accommodate an actual or projected
increase in demand for electric transmission capacity;
(2) is consistent with--
(A) transmission needs identified, in a
transmission expansion plan or otherwise, by the
appropriate Regional Transmission Organization or
Independent System Operator (as defined in the Federal
Power Act), if any, or approved regional reliability
organization; and
(B) efficient and reliable operation of the
transmission grid; and
(3) would be operated in conformance with prudent utility
practice.
(b) New Facilities.--The Secretary, acting through WAPA or SWPA, or
both, may design, develop, construct, operate, maintain, or own, or
participate with other entities in designing, developing, constructing,
operating, maintaining, or owning, a new electric power transmission
facility and related facilities (``Project'') located within any State
in which WAPA or SWPA operates if the Secretary, in consultation with
the applicable Administrator, determines that the proposed Project--
(1)(A) is located in an area designated under section
216(a) of the Federal Power Act and will reduce congestion of
electric transmission in interstate commerce; or
(B) is necessary to accommodate an actual or projected
increase in demand for electric transmission capacity;
(2) is consistent with--
(A) transmission needs identified, in a
transmission expansion plan or otherwise, by the
appropriate Regional Transmission Organization or
Independent System Operator, if any, or approved
regional reliability organization; and
(B) efficient and reliable operation of the
transmission grid;
(3) will be operated in conformance with prudent utility
practice;
(4) will be operated by, or in conformance with the rules
of, the appropriate (A) Regional Transmission Organization or
Independent System Operator, if any, or (B) if such an
organization does not exist, regional reliability organization;
and
(5) will not duplicate the functions of existing
transmission facilities or proposed facilities which are the
subject of ongoing or approved siting and related permitting
proceedings.
(c) Other Funds.--
(1) In general.--In carrying out a Project under subsection
(a) or (b), the Secretary may accept and use funds contributed
by another entity for the purpose of carrying out the Project.
(2) Availability.--The contributed funds shall be available
for expenditure for the purpose of carrying out the Project--
(A) without fiscal year limitation; and
(B) as if the funds had been appropriated
specifically for that Project.
(3) Allocation of costs.--In carrying out a Project under
subsection (a) or (b), any costs of the Project not paid for by
contributions from another entity shall be collected through
rates charged to customers using the new transmission
capability provided by the Project and allocated equitably
among these project beneficiaries using the new transmission
capability.
(d) Relationship to Other Laws.--Nothing in this section affects
any requirement of--
(1) any Federal environmental law, including the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.);
(2) any Federal or State law relating to the siting of
energy facilities; or
(3) any existing authorizing statutes.
(e) Savings Clause.--Nothing in this section shall constrain or
restrict an Administrator in the utilization of other authority
delegated to the Administrator of WAPA or SWPA.
(f) Secretarial Determinations.--Any determination made pursuant to
subsections (a) or (b) shall be based on findings by the Secretary
using the best available data.
(g) Maximum Funding Amount.--The Secretary shall not accept and use
more than $100,000,000 under subsection (c)(1) for the period
encompassing fiscal years 2004 through 2013.

SEC. 1223. TRANSMISSION SYSTEM MONITORING.

Within 6 months after the date of enactment of this Act, the
Secretary of Energy and the Federal Energy Regulatory Commission shall
study and report to Congress on the steps which must be taken to
establish a system to make available to all transmission system owners
and Regional Transmission Organizations (as defined in the Federal
Power Act) within the Eastern and Western Interconnections real-time
information on the functional status of all transmission lines within
such Interconnections. In such study, the Commission shall assess
technical means for implementing such transmission information system
and identify the steps the Commission or Congress must take to require
the implementation of such system.

SEC. 1224. ADVANCED TRANSMISSION TECHNOLOGIES.

(a) Authority.--The Federal Energy Regulatory Commission, in the
exercise of its authorities under the Federal Power Act and the Public
Utility Regulatory Policies Act of 1978, shall encourage the deployment
of advanced transmission technologies.
(b) Definition.--For the purposes of this section, the term
``advanced transmission technologies'' means technologies that increase
the capacity, efficiency, or reliability of existing or new
transmission facilities, including, but not limited to--
(1) high-temperature lines (including superconducting
cables);
(2) underground cables;
(3) advanced conductor technology (including advanced
composite conductors, high-temperature low-sag conductors, and
fiber optic temperature sensing conductors);
(4) high-capacity ceramic electric wire, connectors, and
insulators;
(5) optimized transmission line configurations (including
multiple phased transmission lines);
(6) modular equipment;
(7) wireless power transmission;
(8) ultra-high voltage lines;
(9) high-voltage DC technology;
(10) flexible AC transmission systems;
(11) energy storage devices (including pumped hydro,
compressed air, superconducting magnetic energy storage,
flywheels, and batteries);
(12) controllable load;
(13) distributed generation (including PV, fuel cells,
microturbines);
(14) enhanced power device monitoring;
(15) direct system state sensors;
(16) fiber optic technologies;
(17) power electronics and related software (including real
time monitoring and analytical software); and
(18) any other technologies the Commission considers
appropriate.
(c) Obsolete or Impracticable Technologies.--The Commission is
authorized to cease encouraging the deployment of any technology
described in this section on a finding that such technology has been
rendered obsolete or otherwise impracticable to deploy.

SEC. 1225. ELECTRIC TRANSMISSION AND DISTRIBUTION PROGRAMS.

(a) Electric Transmission and Distribution Program.--The Secretary
of Energy (hereinafter in this section referred to as the
``Secretary'') acting through the Director of the Office of Electric
Transmission and Distribution shall establish a comprehensive research,
development, demonstration and commercial application program to
promote improved reliability and efficiency of electrical transmission
and distribution systems. This program shall include--
(1) advanced energy delivery and storage technologies,
materials, and systems, including new transmission
technologies, such as flexible alternating current transmission
systems, composite conductor materials and other technologies
that enhance reliability, operational flexibility, or power-
carrying capability;
(2) advanced grid reliability and efficiency technology
development;
(3) technologies contributing to significant load
reductions;
(4) advanced metering, load management, and control
technologies;
(5) technologies to enhance existing grid components;
(6) the development and use of high-temperature
superconductors to--
(A) enhance the reliability, operational
flexibility, or power-carrying capability of electric
transmission or distribution systems; or
(B) increase the efficiency of electric energy
generation, transmission, distribution, or storage
systems;
(7) integration of power systems, including systems to
deliver high-quality electric power, electric power
reliability, and combined heat and power;
(8) supply of electricity to the power grid by small scale,
distributed and residential-based power generators;
(9) the development and use of advanced grid design,
operation and planning tools;
(10) any other infrastructure technologies, as appropriate;
and
(11) technology transfer and education.
(b) Program Plan.--Not later than 1 year after the date of the
enactment of this legislation, the Secretary, in consultation with
other appropriate Federal agencies, shall prepare and transmit to
Congress a 5-year program plan to guide activities under this section.
In preparing the program plan, the Secretary may consult with
utilities, energy services providers, manufacturers, institutions of
higher education, other appropriate State and local agencies,
environmental organizations, professional and technical societies, and
any other persons the Secretary considers appropriate.
(c) Implementation.--The Secretary shall consider implementing this
program using a consortium of industry, university and national
laboratory participants.
(d) Report.--Not later than 2 years after the transmittal of the
plan under subsection (b), the Secretary shall transmit a report to
Congress describing the progress made under this section and
identifying any additional resources needed to continue the development
and commercial application of transmission and distribution
infrastructure technologies.
(e) Power Delivery Research Initiative.--
(1) In general.--The Secretary shall establish a research,
development, demonstration, and commercial application
initiative specifically focused on power delivery utilizing
components incorporating high temperature superconductivity.
(2) Goals.--The goals of this initiative shall be to--
(A) establish facilities to develop high
temperature superconductivity power applications in
partnership with manufacturers and utilities;
(B) provide technical leadership for establishing
reliability for high temperature superconductivity
power applications including suitable modeling and
analysis;
(C) facilitate commercial transition toward direct
current power transmission, storage, and use for high
power systems utilizing high temperature
superconductivity; and
(D) facilitate the integration of very low
impedance high temperature superconducting wires and
cables in existing electric networks to improve system
performance, power flow control and reliability.
(3) Requirements.--The initiative shall include--
(A) feasibility analysis, planning, research, and
design to construct demonstrations of superconducting
links in high power, direct current and controllable
alternating current transmission systems;
(B) public-private partnerships to demonstrate
deployment of high temperature superconducting cable
into testbeds simulating a realistic transmission grid
and under varying transmission conditions, including
actual grid insertions; and
(C) testbeds developed in cooperation with national
laboratories, industries, and universities to
demonstrate these technologies, prepare the
technologies for commercial introduction, and address
cost or performance roadblocks to successful commercial
use.
(4) Authorization of appropriations.--For purposes of
carrying out this subsection, there are authorized to be
appropriated--
(A) for fiscal year 2004, $15,000,000;
(B) for fiscal year 2005, $20,000,000;
(C) for fiscal year 2006, $30,000,000;
(D) for fiscal year 2007, $35,000,000; and
(E) for fiscal year 2008, $40,000,000.

SEC. 1226. ADVANCED POWER SYSTEM TECHNOLOGY INCENTIVE PROGRAM.

(a) Program.--The Secretary of Energy is authorized to establish an
Advanced Power System Technology Incentive Program to support the
deployment of certain advanced power system technologies and to improve
and protect certain critical governmental, industrial, and commercial
processes. Funds provided under this section shall be used by the
Secretary to make incentive payments to eligible owners or operators of
advanced power system technologies to increase power generation through
enhanced operational, economic, and environmental performance. Payments
under this section may only be made upon receipt by the Secretary of an
incentive payment application establishing an applicant as either--
(1) a qualifying advanced power system technology facility;
or
(2) a qualifying security and assured power facility.
(b) Incentives.--Subject to availability of funds, a payment of 1.8
cents per kilowatt-hour shall be paid to the owner or operator of a
qualifying advanced power system technology facility under this section
for electricity generated at such facility. An additional 0.7 cents per
kilowatt-hour shall be paid to the owner or operator of a qualifying
security and assured power facility for electricity generated at such
facility. Any facility qualifying under this section shall be eligible
for an incentive payment for up to, but not more than, the first
10,000,000 kilowatt-hours produced in any fiscal year.
(c) Eligibility.--For purposes of this section:
(1) Qualifying advanced power system technology facility.--
The term ``qualifying advanced power system technology
facility'' means a facility using an advanced fuel cell,
turbine, or hybrid power system or power storage system to
generate or store electric energy.
(2) Qualifying security and assured power facility.--The
term ``qualifying security and assured power facility'' means a
qualifying advanced power system technology facility determined
by the Secretary of Energy, in consultation with the Secretary
of Homeland Security, to be in critical need of secure,
reliable, rapidly available, high-quality power for critical
governmental, industrial, or commercial applications.
(d) Authorization.--There are authorized to be appropriated to the
Secretary of Energy for the purposes of this section, $10,000,000 for
each of the fiscal years 2004 through 2010.

SEC. 1227. OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION.

(a) Creation of an Office of Electric Transmission and
Distribution.--Title II of the Department of Energy Organization Act
(42 U.S.C. 7131 et seq.) (as amended by section 502(a) of this Act) is
amended by inserting the following after section 217, as added by title
V of this Act:

``SEC. 218. OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION.

``(a) Establishment.--There is established within the Department an
Office of Electric Transmission and Distribution. This Office shall be
headed by a Director, subject to the authority of the Secretary. The
Director shall be appointed by the Secretary. The Director shall be
compensated at the annual rate prescribed for level IV of the Executive
Schedule under section 5315 of title 5, United States Code.
``(b) Director.--The Director shall--
``(1) coordinate and develop a comprehensive, multi-year
strategy to improve the Nation's electricity transmission and
distribution;
``(2) implement or, where appropriate, coordinate the
implementation of, the recommendations made in the Secretary's
May 2002 National Transmission Grid Study;
``(3) oversee research, development, and demonstration to
support Federal energy policy related to electricity
transmission and distribution;
``(4) grant authorizations for electricity import and
export pursuant to section 202(c), (d), (e), and (f) of the
Federal Power Act (16 U.S.C. 824a);
``(5) perform other functions, assigned by the Secretary,
related to electricity transmission and distribution; and
``(6) develop programs for workforce training in power and
transmission engineering.''.
(b) Conforming Amendments.--(1) The table of contents of the
Department of Energy Organization Act (42 U.S.C. 7101 note) is amended
by inserting after the item relating to section 217 the following new
item:

``Sec. 218. Office of Electric Transmission and Distribution.''.
(2) Section 5315 of title 5, United States Code, is amended by
inserting after the item relating to ``Inspector General, Department of
Energy.'' the following:
``Director, Office of Electric Transmission and
Distribution, Department of Energy.''.

Subtitle C--Transmission Operation Improvements

SEC. 1231. OPEN NONDISCRIMINATORY ACCESS.

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

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

``(a) Transmission Services.--Subject to section 212(h), the
Commission may, by rule or order, require an unregulated transmitting
utility to provide transmission services--
``(1) at rates that are comparable to those that the
unregulated transmitting utility charges itself; and
``(2) on terms and conditions (not relating to rates) that
are comparable to those under which such unregulated
transmitting utility provides transmission services to itself
and that are not unduly discriminatory or preferential.
``(b) Exemption.--The Commission shall exempt from any rule or
order under this section any unregulated transmitting utility that--
``(1) sells no more than 4,000,000 megawatt hours of
electricity per year; or
``(2) does not own or operate any transmission facilities
that are necessary for operating an interconnected transmission
system (or any portion thereof); or
``(3) meets other criteria the Commission determines to be
in the public interest.
``(c) Local Distribution Facilities.--The requirements of
subsection (a) shall not apply to facilities used in local
distribution.
``(d) Exemption Termination.--Whenever the Commission, after an
evidentiary hearing held upon a complaint and after giving
consideration to reliability standards established under section 215,
finds on the basis of a preponderance of the evidence that any
exemption granted pursuant to subsection (b) unreasonably impairs the
continued reliability of an interconnected transmission system, it
shall revoke the exemption granted to that transmitting utility.
``(e) Application to Unregulated Transmitting Utilities.--The rate
changing procedures applicable to public utilities under subsections
(c) and (d) of section 205 are applicable to unregulated transmitting
utilities for purposes of this section.
``(f) Remand.--In exercising its authority under paragraph (1) of
subsection (a), the Commission may remand transmission rates to an
unregulated transmitting utility for review and revision where
necessary to meet the requirements of subsection (a).
``(g) Other Requests.--The provision of transmission services under
subsection (a) does not preclude a request for transmission services
under section 211.
``(h) Limitation.--The Commission may not require a State or
municipality to take action under this section that would violate a
private activity bond rule for purposes of section 141 of the Internal
Revenue Code of 1986 (26 U.S.C. 141).
``(i) Transfer of Control of Transmitting Facilities.--Nothing in
this section authorizes the Commission to require an unregulated
transmitting utility to transfer control or operational control of its
transmitting facilities to an RTO or any other Commission-approved
independent transmission organization designated to provide
nondiscriminatory transmission access.
``(j) Definition.--For purposes of this section, the term
`unregulated transmitting utility' means an entity that--
``(1) owns or operates facilities used for the transmission
of electric energy in interstate commerce; and
``(2) is an entity described in section 201(f).''.

SEC. 1232. SENSE OF CONGRESS ON REGIONAL TRANSMISSION ORGANIZATIONS.

It is the sense of Congress that, in order to promote fair, open
access to electric transmission service, benefit retail consumers,
facilitate wholesale competition, improve efficiencies in transmission
grid management, promote grid reliability, remove opportunities for
unduly discriminatory or preferential transmission practices, and
provide for the efficient development of transmission infrastructure
needed to meet the growing demands of competitive wholesale power
markets, all transmitting utilities in interstate commerce should
voluntarily become members of Regional Transmission Organizations as
defined in section 3 of the Federal Power Act.

SEC. 1233. REGIONAL TRANSMISSION ORGANIZATION APPLICATIONS PROGRESS
REPORT.

Not later than 120 days after the date of enactment of this
section, the Federal Energy Regulatory Commission shall submit to
Congress a report containing each of the following:
(1) A list of all regional transmission organization
applications filed at the Commission pursuant to subpart F of
part 35 of title 18, Code of Federal Regulations (in this
section referred to as ``Order No. 2000''), including an
identification of each public utility and other entity included
within the proposed membership of the regional transmission
organization.
(2) A brief description of the status of each pending
regional transmission organization application, including a
precise explanation of how each fails to comply with the
minimal requirements of Order No. 2000 and what steps need to
be taken to bring each application into such compliance.
(3) For any application that has not been finally approved
by the Commission, a detailed description of every aspect of
the application that the Commission has determined does not
conform to the requirements of Order No. 2000.
(4) For any application that has not been finally approved
by the Commission, an explanation by the Commission of why the
items described pursuant to paragraph (3) constitute material
noncompliance with the requirements of the Commission's Order
No. 2000 sufficient to justify denial of approval by the
Commission.
(5) For all regional transmission organization applications
filed pursuant to the Commission's Order No. 2000, whether
finally approved or not--
(A) a discussion of that regional transmission
organization's efforts to minimize rate seams between
itself and--
(i) other regional transmission
organizations; and
(ii) entities not participating in a
regional transmission organization;
(B) a discussion of the impact of such seams on
consumers and wholesale competition; and
(C) a discussion of minimizing cost-shifting on
consumers.

SEC. 1234. FEDERAL UTILITY PARTICIPATION IN REGIONAL TRANSMISSION
ORGANIZATIONS.

(a) Definitions.--For purposes of this section--
(1) Appropriate federal regulatory authority.--The term
``appropriate Federal regulatory authority'' means--
(A) with respect to a Federal power marketing
agency (as defined in the Federal Power Act), the
Secretary of Energy, except that the Secretary may
designate the Administrator of a Federal power
marketing agency to act as the appropriate Federal
regulatory authority with respect to the transmission
system of that Federal power marketing agency; and
(B) with respect to the Tennessee Valley Authority,
the Board of Directors of the Tennessee Valley
Authority.
(2) Federal utility.--The term ``Federal utility'' means a
Federal power marketing agency or the Tennessee Valley
Authority.
(3) Transmission system.--The term ``transmission system''
means electric transmission facilities owned, leased, or
contracted for by the United States and operated by a Federal
utility.
(b) Transfer.--The appropriate Federal regulatory authority is
authorized to enter into a contract, agreement or other arrangement
transferring control and use of all or part of the Federal utility's
transmission system to an RTO or ISO (as defined in the Federal Power
Act), approved by the Federal Energy Regulatory Commission. Such
contract, agreement or arrangement shall include--
(1) performance standards for operation and use of the
transmission system that the head of the Federal utility
determines necessary or appropriate, including standards that
assure recovery of all the Federal utility's costs and expenses
related to the transmission facilities that are the subject of
the contract, agreement or other arrangement; consistency with
existing contracts and third-party financing arrangements; and
consistency with said Federal utility's statutory authorities,
obligations, and limitations;
(2) provisions for monitoring and oversight by the Federal
utility of the RTO's or ISO's fulfillment of the terms and
conditions of the contract, agreement or other arrangement,
including a provision for the resolution of disputes through
arbitration or other means with the regional transmission
organization or with other participants, notwithstanding the
obligations and limitations of any other law regarding
arbitration; and
(3) a provision that allows the Federal utility to withdraw
from the RTO or ISO and terminate the contract, agreement or
other arrangement in accordance with its terms.
Neither this section, actions taken pursuant to it, nor any other
transaction of a Federal utility using an RTO or ISO shall confer upon
the Federal Energy Regulatory Commission jurisdiction or authority over
the Federal utility's electric generation assets, electric capacity or
energy that the Federal utility is authorized by law to market, or the
Federal utility's power sales activities.
(c) Existing Statutory and Other Obligations.--
(1) System operation requirements.--No statutory provision
requiring or authorizing a Federal utility to transmit electric
power or to construct, operate or maintain its transmission
system shall be construed to prohibit a transfer of control and
use of its transmission system pursuant to, and subject to all
requirements of subsection (b).
(2) Other obligations.--This subsection shall not be
construed to--
(A) suspend, or exempt any Federal utility from,
any provision of existing Federal law, including but
not limited to any requirement or direction relating to
the use of the Federal utility's transmission system,
environmental protection, fish and wildlife protection,
flood control, navigation, water delivery, or
recreation; or
(B) authorize abrogation of any contract or treaty
obligation.
(3) Repeal.--Section 311 of title III of Appendix B of the
Act of October 27, 2000 (P.L. 106-377, section 1(a)(2); 114
Stat. 1441, 1441A-80; 16 U.S.C. 824n) is repealed.

SEC. 1235. STANDARD MARKET DESIGN.

(a) Remand.--The Commission's proposed rulemaking entitled
``Remedying Undue Discrimination through Open Access Transmission
Service and Standard Electricity Market Design'' (Docket No. RM01-12-
000) (``SMD NOPR'') is remanded to the Commission for reconsideration.
No final rule mandating a standard electricity market design pursuant
to the proposed rulemaking, including any rule or order of general
applicability within the scope of the proposed rulemaking, may be
issued before October 31, 2006, or take effect before December 31,
2006. Any final rule issued by the Commission pursuant to the proposed
rulemaking shall be preceded by a second notice of proposed rulemaking
issued after the date of enactment of this Act and an opportunity for
public comment.
(b) Savings Clause.--This section shall not be construed to modify
or diminish any authority or obligation the Commission has under this
Act, the Federal Power Act, or other applicable law, including, but not
limited to, any authority to--
(1) issue any rule or order (of general or particular
applicability) pursuant to any such authority or obligation; or
(2) act on a filing or filings by 1 or more transmitting
utilities for the voluntary formation of a Regional
Transmission Organization or Independent System Operator (as
defined in the Federal Power Act) (and related market
structures or rules) or voluntary modification of an existing
Regional Transmission Organization or Independent System
Operator (and related market structures or rules).

SEC. 1236. NATIVE LOAD SERVICE OBLIGATION.

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

``SEC. 217. NATIVE LOAD SERVICE OBLIGATION.

``(a) Meeting Service Obligations.--(1) Any load-serving entity
that, as of the date of enactment of this section--
``(A) owns generation facilities, markets the output of
Federal generation facilities, or holds rights under 1 or more
wholesale contracts to purchase electric energy, for the
purpose of meeting a service obligation, and
``(B) by reason of ownership of transmission facilities, or
1 or more contracts or service agreements for firm transmission
service, holds firm transmission rights for delivery of the
output of such generation facilities or such purchased energy
to meet such service obligation,
is entitled to use such firm transmission rights, or, equivalent
tradable or financial transmission rights, in order to deliver such
output or purchased energy, or the output of other generating
facilities or purchased energy to the extent deliverable using such
rights, to the extent required to meet its service obligation.
``(2) To the extent that all or a portion of the service obligation
covered by such firm transmission rights or equivalent tradable or
financial transmission rights is transferred to another load-serving
entity, the successor load-serving entity shall be entitled to use the
firm transmission rights or equivalent tradable or financial
transmission rights associated with the transferred service obligation.
Subsequent transfers to another load-serving entity, or back to the
original load-serving entity, shall be entitled to the same rights.
``(3) The Commission shall exercise its authority under this Act in
a manner that facilitates the planning and expansion of transmission
facilities to meet the reasonable needs of load-serving entities to
satisfy their service obligations.
``(b) Allocation of Transmission Rights.--Nothing in this section
shall affect any methodology approved by the Commission prior to
September 15, 2003, for the allocation of transmission rights by an RTO
or ISO that has been authorized by the Commission to allocate
transmission rights.
``(c) Certain Transmission Rights.--The Commission may exercise
authority under this Act to make transmission rights not used to meet
an obligation covered by subsection (a) available to other entities in
a manner determined by the Commission to be just, reasonable, and not
unduly discriminatory or preferential.
``(d) Obligation to Build.--Nothing in this Act shall relieve a
load-serving entity from any obligation under State or local law to
build transmission or distribution facilities adequate to meet its
service obligations.
``(e) Contracts.--Nothing in this section shall provide a basis for
abrogating any contract or service agreement for firm transmission
service or rights in effect as of the date of the enactment of this
subsection.
``(f) Water Pumping Facilities.--The Commission shall ensure that
any entity described in section 201(f) that owns transmission
facilities used predominately to support its own water pumping
facilities shall have, with respect to such facilities, protections for
transmission service comparable to those provided to load-serving
entities pursuant to this section.
``(g) ERCOT.--This section shall not apply within the area referred
to in section 212(k)(2)(A).
``(h) Jurisdiction.--This section does not authorize the Commission
to take any action not otherwise within its jurisdiction.
``(i) Effect of Exercising Rights.--An entity that lawfully
exercises rights granted under subsection (a) shall not be considered
by such action as engaging in undue discrimination or preference under
this Act.
``(j) TVA Area.--For purposes of subsection (a)(1)(B), a load-
serving entity that is located within the service area of the Tennessee
Valley Authority and that has a firm wholesale power supply contract
with the Tennessee Valley Authority shall be deemed to hold firm
transmission rights for the transmission of such power.
``(k) Definitions.--For purposes of this section:
``(1) The term `distribution utility' means an electric
utility that has a service obligation to end-users or to a
State utility or electric cooperative that, directly or
indirectly, through 1 or more additional State utilities or
electric cooperatives, provides electric service to end-users.
``(2) The term `load-serving entity' means a distribution
utility or an electric utility that has a service obligation.
``(3) The term `service obligation' means a requirement
applicable to, or the exercise of authority granted to, an
electric utility under Federal, State or local law or under
long-term contracts to provide electric service to end-users or
to a distribution utility.
``(4) The term `State utility' means a State or any
political subdivision of a State, or any agency, authority, or
instrumentality of any 1 or more of the foregoing, or a
corporation which is wholly owned, directly or indirectly, by
any 1 or more of the foregoing, competent to carry on the
business of developing, transmitting, utilizing or distributing
power.''.

SEC. 1237. STUDY ON THE BENEFITS OF ECONOMIC DISPATCH.

(a) Study.--The Secretary of Energy, in coordination and
consultation with the States, shall conduct a study on--
(1) the procedures currently used by electric utilities to
perform economic dispatch;
(2) identifying possible revisions to those procedures to
improve the ability of nonutility generation resources to offer
their output for sale for the purpose of inclusion in economic
dispatch; and
(3) the potential benefits to residential, commercial, and
industrial electricity consumers nationally and in each state
if economic dispatch procedures were revised to improve the
ability of nonutility generation resources to offer their
output for inclusion in economic dispatch.
(b) Definition.--The term ``economic dispatch'' when used in this
section means the operation of generation facilities to produce energy
at the lowest cost to reliably serve consumers, recognizing any
operational limits of generation and transmission facilities.
(c) Report to Congress and the States.--Not later than 90 days
after the date of enactment of this Act, and on a yearly basis
following, the Secretary of Energy shall submit a report to Congress
and the States on the results of the study conducted under subsection
(a), including recommendations to Congress and the States for any
suggested legislative or regulatory changes.

Subtitle D--Transmission Rate Reform

SEC. 1241. TRANSMISSION INFRASTRUCTURE INVESTMENT.

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

``SEC. 218. TRANSMISSION INFRASTRUCTURE INVESTMENT.

``(a) Rulemaking Requirement.--Within 1 year after the enactment of
this section, the Commission shall establish, by rule, incentive-based
(including, but not limited to performance-based) rate treatments for
the transmission of electric energy in interstate commerce by public
utilities for the purpose of benefiting consumers by ensuring
reliability and reducing the cost of delivered power by reducing
transmission congestion. Such rule shall--
``(1) promote reliable and economically efficient
transmission and generation of electricity by promoting capital
investment in the enlargement, improvement, maintenance and
operation of facilities for the transmission of electric energy
in interstate commerce;
``(2) provide a return on equity that attracts new
investment in transmission facilities (including related
transmission technologies);
``(3) encourage deployment of transmission technologies and
other measures to increase the capacity and efficiency of
existing transmission facilities and improve the operation of
such facilities; and
``(4) allow recovery of all prudently incurred costs
necessary to comply with mandatory reliability standards issued
pursuant to section 215 of this Act.
The Commission may, from time to time, revise such rule.
``(b) Additional Incentives for RTO Participation.--In the rule
issued under this section, the Commission shall, to the extent within
its jurisdiction, provide for incentives to each transmitting utility
or electric utility that joins a Regional Transmission Organization or
Independent System Operator. Incentives provided by the Commission
pursuant to such rule shall include--
``(1) recovery of all prudently incurred costs to develop
and participate in any proposed or approved RTO, ISO, or
independent transmission company;
``(2) recovery of all costs previously approved by a State
commission which exercised jurisdiction over the transmission
facilities prior to the utility's participation in the RTO or
ISO, including costs necessary to honor preexisting
transmission service contracts, in a manner which does not
reduce the revenues the utility receives for transmission
services for a reasonable transition period after the utility
joins the RTO or ISO;
``(3) recovery as an expense in rates of the costs
prudently incurred to conduct transmission planning and
reliability activities, including the costs of participating in
RTO, ISO and other regional planning activities and design,
study and other precertification costs involved in seeking
permits and approvals for proposed transmission facilities;
``(4) a current return in rates for construction work in
progress for transmission facilities and full recovery of
prudently incurred costs for constructing transmission
facilities;
``(5) formula transmission rates; and
``(6) a maximum 15 year accelerated depreciation on new
transmission facilities for rate treatment purposes.
The Commission shall ensure that any costs recoverable pursuant to this
subsection may be recovered by such utility through the transmission
rates charged by such utility or through the transmission rates charged
by the RTO or ISO that provides transmission service to such utility.
``(c) Just and Reasonable Rates.--All rates approved under the
rules adopted pursuant to this section, including any revisions to such
rules, are subject to the requirement of sections 205 and 206 that all
rates, charges, terms, and conditions be just and reasonable and not
unduly discriminatory or preferential.''.

SEC. 1242. VOLUNTARY TRANSMISSION PRICING PLANS.

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

``SEC. 219. VOLUNTARY TRANSMISSION PRICING PLANS.

``(a) In General.--Any transmission provider, including an RTO or
ISO, may submit to the Commission a plan or plans under section 205
containing the criteria for determining the person or persons that will
be required to pay for any construction of new transmission facilities
or expansion, modification or upgrade of transmission facilities (in
this section referred to as `transmission service related expansion')
or new generator interconnection.
``(b) Voluntary Transmission Pricing Plans.--(1) Any plan or plans
submitted under subsection (a) shall specify the method or methods by
which costs may be allocated or assigned. Such methods may include, but
are not limited to:
``(A) directly assigned;
``(B) participant funded; or
``(C) rolled into regional or sub-regional rates.
``(2) FERC shall approve a plan or plans submitted under
subparagraph (B) of paragraph (1) if such plan or plans--
``(A) result in rates that are just and reasonable and not
unduly discriminatory or preferential consistent with section
205; and
``(B) ensure that the costs of any transmission service
related expansion or new generator interconnection not required
to meet applicable reliability standards established under
section 215 are assigned in a fair manner, meaning that those
who benefit from the transmission service related expansion or
new generator interconnection pay an appropriate share of the
associated costs, provided that--
``(i) costs may not be assigned or allocated to an
electric utility if the native load customers of that
utility would not have required such transmission
service related expansion or new generator
interconnection absent the request for transmission
service related expansion or new generator
interconnection that necessitated the investment;
``(ii) the party requesting such transmission
service related expansion or new generator
interconnection shall not be required to pay for both--
``(I) the assigned cost of the upgrade; and
``(II) the difference between--
``(aa) the embedded cost paid for
transmission services (including the
cost of the requested upgrade); and
``(bb) the embedded cost that would
have been paid absent the upgrade; and
``(iii) the party or parties who pay for facilities
necessary for the transmission service related
expansion or new generator interconnection receives
full compensation for its costs for the participant
funded facilities in the form of--
``(I) monetary credit equal to the cost of
the participant funded facilities (accounting
for the time value of money at the Gross
Domestic Product deflator), which credit shall
be pro-rated in equal installments over a
period of not more than 30 years and shall not
exceed in total the amount of the initial
investment, against the transmission charges
that the funding entity or its assignee is
otherwise assessed by the transmission
provider;
``(II) appropriate financial or physical
rights; or
``(III) any other method of cost recovery
or compensation approved by the Commission.
``(3) A plan submitted under this section shall apply only to--
``(A) a contract or interconnection agreement executed or
filed with the Commission after the date of enactment of this
section; or
``(B) an interconnection agreement pending rehearing as of
November 1, 2003.
``(4) Nothing in this section diminishes or alters the rights of
individual members of an RTO or ISO under this Act.
``(5) Nothing in this section shall affect the allocation of costs
or the cost methodology employed by an RTO or ISO authorized by the
Commission to allocate costs (including costs for transmission service
related expansion or new generator interconnection) prior to the date
of enactment of this section.
``(6) This section shall not apply within the area referred to in
section 212(k)(2)(A).
``(7) The term `transmission provider' means a public utility that
owns or operates facilities that provide interconnection or
transmission service in interstate commerce.''.

Subtitle E--Amendments to PURPA

SEC. 1251. NET METERING AND ADDITIONAL STANDARDS.

(a) Adoption of Standards.--Section 111(d) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by
adding at the end the following:
``(11) Net metering.--Each electric utility shall make
available upon request net metering service to any electric
consumer that the electric utility serves. For purposes of this
paragraph, the term `net metering service' means service to an
electric consumer under which electric energy generated by that
electric consumer from an eligible on-site generating facility
and delivered to the local distribution facilities may be used
to offset electric energy provided by the electric utility to
the electric consumer during the applicable billing period.
``(12) Fuel sources.--Each electric utility shall develop a
plan to minimize dependence on 1 fuel source and to ensure that
the electric energy it sells to consumers is generated using a
diverse range of fuels and technologies, including renewable
technologies.
``(13) Fossil fuel generation efficiency.--Each electric
utility shall develop and implement a 10-year plan to increase
the efficiency of its fossil fuel generation.''.
(b) Compliance.--
(1) Time limitations.--Section 112(b) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended
by adding at the end the following:
``(3)(A) Not later than 2 years after the enactment of this
paragraph, each State regulatory authority (with respect to each
electric utility for which it has ratemaking authority) and each
nonregulated electric utility shall commence the consideration referred
to in section 111, or set a hearing date for such consideration, with
respect to each standard established by paragraphs (11) through (13) of
section 111(d).
``(B) Not later than 3 years after the date of the enactment of
this paragraph, each State regulatory authority (with respect to each
electric utility for which it has ratemaking authority), and each
nonregulated electric utility, shall complete the consideration, and
shall make the determination, referred to in section 111 with respect
to each standard established by paragraphs (11) through (13) of section
111(d).''.
(2) Failure to comply.--Section 112(c) of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is
amended by adding at the end the following:
``In the case of each standard established by paragraphs (11) through
(13) of section 111(d), the reference contained in this subsection to
the date of enactment of this Act shall be deemed to be a reference to
the date of enactment of such paragraphs (11) through (13).''.
(3) Prior state actions.--
(A) In general.--Section 112 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622) is
amended by adding at the end the following:
``(d) Prior State Actions.--Subsections (b) and (c) of this section
shall not apply to the standards established by paragraphs (11) through
(13) of section 111(d) in the case of any electric utility in a State
if, before the enactment of this subsection--
``(1) the State has implemented for such utility the
standard concerned (or a comparable standard);
``(2) the State regulatory authority for such State or
relevant nonregulated electric utility has conducted a
proceeding to consider implementation of the standard concerned
(or a comparable standard) for such utility; or
``(3) the State legislature has voted on the implementation
of such standard (or a comparable standard) for such
utility.''.
(B) Cross reference.--Section 124 of such Act (16
U.S.C. 2634) is amended by adding the following at the
end thereof: ``In the case of each standard established
by paragraphs (11) through (13) of section 111(d), the
reference contained in this subsection to the date of
enactment of this Act shall be deemed to be a reference
to the date of enactment of such paragraphs (11)
through (13).''.

SEC. 1252. SMART METERING.

(a) In General.--Section 111(d) of the Public Utilities Regulatory
Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding at the
end the following:
``(14) Time-based metering and communications.--
``(A) Not later than 18 months after the date of
enactment of this paragraph, each electric utility
shall offer each of its customer classes, and provide
individual customers upon customer request, a time-
based rate schedule under which the rate charged by the
electric utility varies during different time periods
and reflects the variance, if any, in the utility's
costs of generating and purchasing electricity at the
wholesale level. The time-based rate schedule shall
enable the electric consumer to manage energy use and
cost through advanced metering and communications
technology.
``(B) The types of time-based rate schedules that
may be offered under the schedule referred to in
subparagraph (A) include, among others--
``(i) time-of-use pricing whereby
electricity prices are set for a specific time
period on an advance or forward basis,
typically not changing more often than twice a
year, based on the utility's cost of generating
and/or purchasing such electricity at the
wholesale level for the benefit of the
consumer. Prices paid for energy consumed
during these periods shall be pre-established
and known to consumers in advance of such
consumption, allowing them to vary their demand
and usage in response to such prices and manage
their energy costs by shifting usage to a lower
cost period or reducing their consumption
overall;
``(ii) critical peak pricing whereby time-
of-use prices are in effect except for certain
peak days, when prices may reflect the costs of
generating and/or purchasing electricity at the
wholesale level and when consumers may receive
additional discounts for reducing peak period
energy consumption; and
``(iii) real-time pricing whereby
electricity prices are set for a specific time
period on an advanced or forward basis,
reflecting the utility's cost of generating
and/or purchasing electricity at the wholesale
level, and may change as often as hourly.
``(C) Each electric utility subject to subparagraph
(A) shall provide each customer requesting a time-based
rate with a time-based meter capable of enabling the
utility and customer to offer and receive such rate,
respectively.
``(D) For purposes of implementing this paragraph,
any reference contained in this section to the date of
enactment of the Public Utility Regulatory Policies Act
of 1978 shall be deemed to be a reference to the date
of enactment of this paragraph.
``(E) In a State that permits third-party marketers
to sell electric energy to retail electric consumers,
such consumers shall be entitled to receive the same
time-based metering and communications device and
service as a retail electric consumer of the electric
utility.
``(F) Notwithstanding subsections (b) and (c) of
section 112, each State regulatory authority shall, not
later than 18 months after the date of enactment of
this paragraph conduct an investigation in accordance
with section 115(i) and issue a decision whether it is
appropriate to implement the standards set out in
subparagraphs (A) and (C).''.
(b) State Investigation of Demand Response and Time-Based
Metering.--Section 115 of the Public Utilities Regulatory Policies Act
of 1978 (16 U.S.C. 2625) is amended as follows:
(1) By inserting in subsection (b) after the phrase ``the
standard for time-of-day rates established by section
111(d)(3)'' the following: ``and the standard for time-based
metering and communications established by section
111(d)(14)''.
(2) By inserting in subsection (b) after the phrase ``are
likely to exceed the metering'' the following: ``and
communications''.
(3) By adding the at the end the following:
``(i) Time-Based Metering and Communications.--In making a
determination with respect to the standard established by section
111(d)(14), the investigation requirement of section 111(d)(14)(F)
shall be as follows: Each State regulatory authority shall conduct an
investigation and issue a decision whether or not it is appropriate for
electric utilities to provide and install time-based meters and
communications devices for each of their customers which enable such
customers to participate in time-based pricing rate schedules and other
demand response programs.''.
(c) Federal Assistance on Demand Response.--Section 132(a) of the
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2642(a)) is
amended by striking ``and'' at the end of paragraph (3), striking the
period at the end of paragraph (4) and inserting ``; and'', and by
adding the following at the end thereof:
``(5) technologies, techniques, and rate-making methods
related to advanced metering and communications and the use of
these technologies, techniques and methods in demand response
programs.''.
(d) Federal Guidance.--Section 132 of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2642) is amended by adding the
following at the end thereof:
``(d) Demand Response.--The Secretary shall be responsible for--
``(1) educating consumers on the availability, advantages,
and benefits of advanced metering and communications
technologies, including the funding of demonstration or pilot
projects;
``(2) working with States, utilities, other energy
providers and advanced metering and communications experts to
identify and address barriers to the adoption of demand
response programs; and
``(3) not later than 180 days after the date of enactment
of the Energy Policy Act of 2003, providing Congress with a
report that identifies and quantifies the national benefits of
demand response and makes a recommendation on achieving
specific levels of such benefits by January 1, 2005.''.
(e) Demand Response and Regional Coordination.--
(1) In general.--It is the policy of the United States to
encourage States to coordinate, on a regional basis, State
energy policies to provide reliable and affordable demand
response services to the public.
(2) Technical assistance.--The Secretary of Energy shall
provide technical assistance to States and regional
organizations formed by 2 or more States to assist them in--
(A) identifying the areas with the greatest demand
response potential;
(B) identifying and resolving problems in
transmission and distribution networks, including
through the use of demand response;
(C) developing plans and programs to use demand
response to respond to peak demand or emergency needs;
and
(D) identifying specific measures consumers can
take to participate in these demand response programs.
(3) Report.--Not later than 1 year after the date of
enactment of the Energy Policy Act of 2003, the Commission
shall prepare and publish an annual report, by appropriate
region, that assesses demand response resources, including
those available from all consumer classes, and which identifies
and reviews--
(A) saturation and penetration rate of advanced
meters and communications technologies, devices and
systems;
(B) existing demand response programs and time-
based rate programs;
(C) the annual resource contribution of demand
resources;
(D) the potential for demand response as a
quantifiable, reliable resource for regional planning
purposes; and
(E) steps taken to ensure that, in regional
transmission planning and operations, demand resources
are provided equitable treatment as a quantifiable,
reliable resource relative to the resource obligations
of any load-serving entity, transmission provider, or
transmitting party.
(f) Federal Encouragement of Demand Response Devices.--It is the
policy of the United States that time-based pricing and other forms of
demand response, whereby electricity customers are provided with
electricity price signals and the ability to benefit by responding to
them, shall be encouraged, and the deployment of such technology and
devices that enable electricity customers to participate in such
pricing and demand response systems shall be facilitated. It is further
the policy of the United States that the benefits of such demand
response that accrue to those not deploying such technology and
devices, but who are part of the same regional electricity entity,
shall be recognized.
(g) Time Limitations.--Section 112(b) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended by
adding at the end the following:
``(4)(A) Not later than 1 year after the enactment of this
paragraph, each State regulatory authority (with respect to
each electric utility for which it has ratemaking authority)
and each nonregulated electric utility shall commence the
consideration referred to in section 111, or set a hearing date
for such consideration, with respect to the standard
established by paragraph (14) of section 111(d).
``(B) Not later than 2 years after the date of the
enactment of this paragraph, each State regulatory authority
(with respect to each electric utility for which it has
ratemaking authority), and each nonregulated electric utility,
shall complete the consideration, and shall make the
determination, referred to in section 111 with respect to the
standard established by paragraph (14) of section 111(d).''.
(h) Failure to Comply.--Section 112(c) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended by
adding at the end the following:
``In the case of the standard established by paragraph (14) of section
111(d), the reference contained in this subsection to the date of
enactment of this Act shall be deemed to be a reference to the date of
enactment of such paragraph (14).''.
(i) Prior State Actions Regarding Smart Metering Standards.--
(1) In general.--Section 112 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622) is amended by
adding at the end the following:
``(e) Prior State Actions.--Subsections (b) and (c) of this section
shall not apply to the standard established by paragraph (14) of
section 111(d) in the case of any electric utility in a State if,
before the enactment of this subsection--
``(1) the State has implemented for such utility the
standard concerned (or a comparable standard);
``(2) the State regulatory authority for such State or
relevant nonregulated electric utility has conducted a
proceeding to consider implementation of the standard concerned
(or a comparable standard) for such utility within the previous
3 years; or
``(3) the State legislature has voted on the implementation
of such standard (or a comparable standard) for such utility
within the previous 3 years.''.
(2) Cross reference.--Section 124 of such Act (16 U.S.C.
2634) is amended by adding the following at the end thereof:
``In the case of the standard established by paragraph (14) of
section 111(d), the reference contained in this subsection to
the date of enactment of this Act shall be deemed to be a
reference to the date of enactment of such paragraph (14).''.

SEC. 1253. COGENERATION AND SMALL POWER PRODUCTION PURCHASE AND SALE
REQUIREMENTS.

(a) Termination of Mandatory Purchase and Sale Requirements.--
Section 210 of the Public Utility Regulatory Policies Act of 1978 (16
U.S.C. 824a-3) is amended by adding at the end the following:
``(m) Termination of Mandatory Purchase and Sale Requirements.--
``(1) Obligation to purchase.--After the date of enactment
of this subsection, no electric utility shall be required to
enter into a new contract or obligation to purchase electric
energy from a qualifying cogeneration facility or a qualifying
small power production facility under this section if the
Commission finds that the qualifying cogeneration facility or
qualifying small power production facility has
nondiscriminatory access to--
``(A)(i) independently administered, auction-based
day ahead and real time wholesale markets for the sale
of electric energy; and (ii) wholesale markets for
long-term sales of capacity and electric energy; or
``(B)(i) transmission and interconnection services
that are provided by a Commission-approved regional
transmission entity and administered pursuant to an
open access transmission tariff that affords
nondiscriminatory treatment to all customers; and (ii)
competitive wholesale markets that provide a meaningful
opportunity to sell capacity, including long-term and
short-term sales, and electric energy, including long-
term, short-term and real-time sales, to buyers other
than the utility to which the qualifying facility is
interconnected. In determining whether a meaningful
opportunity to sell exists, the Commission shall
consider, among other factors, evidence of transactions
within the relevant market; or
``(C) wholesale markets for the sale of capacity
and electric energy that are, at a minimum, of
comparable competitive quality as markets described in
subparagraphs (A) and (B).
``(2) Revised purchase and sale obligation for new
facilities.--(A) After the date of enactment of this
subsection, no electric utility shall be required pursuant to
this section to enter into a new contract or obligation to
purchase from or sell electric energy to a facility that is not
an existing qualifying cogeneration facility unless the
facility meets the criteria for qualifying cogeneration
facilities established by the Commission pursuant to the
rulemaking required by subsection (n).
``(B) For the purposes of this paragraph, the term
`existing qualifying cogeneration facility' means a facility
that--
``(i) was a qualifying cogeneration facility on the
date of enactment of subsection (m); or
``(ii) had filed with the Commission a notice of
self-certification, self recertification or an
application for Commission certification under 18
C.F.R. 292.207 prior to the date on which the
Commission issues the final rule required by subsection
(n).
``(3) Commission review.--Any electric utility may file an
application with the Commission for relief from the mandatory
purchase obligation pursuant to this subsection on a service
territory-wide basis. Such application shall set forth the
factual basis upon which relief is requested and describe why
the conditions set forth in subparagraphs (A), (B) or (C) of
paragraph (1) of this subsection have been met. After notice,
including sufficient notice to potentially affected qualifying
cogeneration facilities and qualifying small power production
facilities, and an opportunity for comment, the Commission
shall make a final determination within 90 days of such
application regarding whether the conditions set forth in
subparagraphs (A), (B) or (C) of paragraph (1) have been met.
``(4) Reinstatement of obligation to purchase.--At any time
after the Commission makes a finding under paragraph (3)
relieving an electric utility of its obligation to purchase
electric energy, a qualifying cogeneration facility, a
qualifying small power production facility, a State agency, or
any other affected person may apply to the Commission for an
order reinstating the electric utility's obligation to purchase
electric energy under this section. Such application shall set
forth the factual basis upon which the application is based and
describe why the conditions set forth in subparagraphs (A), (B)
or (C) of paragraph (1) of this subsection are no longer met.
After notice, including sufficient notice to potentially
affected utilities, and opportunity for comment, the Commission
shall issue an order within 90 days of such application
reinstating the electric utility's obligation to purchase
electric energy under this section if the Commission finds that
the conditions set forth in subparagraphs (A), (B) or (C) of
paragraph (1) which relieved the obligation to purchase, are no
longer met.
``(5) Obligation to sell.--After the date of enactment of
this subsection, no electric utility shall be required to enter
into a new contract or obligation to sell electric energy to a
qualifying cogeneration facility or a qualifying small power
production facility under this section if the Commission finds
that--
``(A) competing retail electric suppliers are
willing and able to sell and deliver electric energy to
the qualifying cogeneration facility or qualifying
small power production facility; and
``(B) the electric utility is not required by State
law to sell electric energy in its service territory.
``(6) No effect on existing rights and remedies.--Nothing
in this subsection affects the rights or remedies of any party
under any contract or obligation, in effect or pending approval
before the appropriate State regulatory authority or non-
regulated electric utility on the date of enactment of this
subsection, to purchase electric energy or capacity from or to
sell electric energy or capacity to a qualifying cogeneration
facility or qualifying small power production facility under
this Act (including the right to recover costs of purchasing
electric energy or capacity).
``(7) Recovery of costs.--(A) The Commission shall issue
and enforce such regulations as are necessary to ensure that an
electric utility that purchases electric energy or capacity
from a qualifying cogeneration facility or qualifying small
power production facility in accordance with any legally
enforceable obligation entered into or imposed under this
section recovers all prudently incurred costs associated with
the purchase.
``(B) A regulation under subparagraph (A) shall be
enforceable in accordance with the provisions of law applicable
to enforcement of regulations under the Federal Power Act (16
U.S.C. 791a et seq.).
``(n) Rulemaking for New Qualifying Facilities.--(1)(A) Not later
than 180 days after the date of enactment of this section, the
Commission shall issue a rule revising the criteria in 18 C.F.R.
292.205 for new qualifying cogeneration facilities seeking to sell
electric energy pursuant to section 210 of this Act to ensure--
``(i) that the thermal energy output of a new qualifying
cogeneration facility is used in a productive and beneficial
manner;
``(ii) the electrical, thermal, and chemical output of the
cogeneration facility is used fundamentally for industrial,
commercial, or institutional purposes and is not intended
fundamentally for sale to an electric utility, taking into
account technological, efficiency, economic, and variable
thermal energy requirements, as well as State laws applicable
to sales of electric energy from a qualifying facility to its
host facility; and
``(iii) continuing progress in the development of efficient
electric energy generating technology.
``(B) The rule issued pursuant to section (n)(1)(A) shall be
applicable only to facilities that seek to sell electric energy
pursuant to section 210 of this Act. For all other purposes, except as
specifically provided in section (m)(2)(A), qualifying facility status
shall be determined in accordance with the rules and regulations of
this Act.
``(2) Notwithstanding rule revisions under paragraph (1), the
Commission's criteria for qualifying cogeneration facilities in effect
prior to the date on which the Commission issues the final rule
required by paragraph (1) shall continue to apply to any cogeneration
facility that--
``(A) was a qualifying cogeneration facility on the date of
enactment of subsection (m), or
``(B) had filed with the Commission a notice of self-
certification, self-recertification or an application for
Commission certification under 18 C.F.R. 292.207 prior to the
date on which the Commission issues the final rule required by
paragraph (1).''.
(b) Elimination of Ownership Limitations.--
(1) Qualifying small power production facility.--Section
3(17)(C) of the Federal Power Act (16 U.S.C. 796(17)(C)) is
amended to read as follows:
``(C) `qualifying small power production facility'
means a small power production facility that the
Commission determines, by rule, meets such requirements
(including requirements respecting fuel use, fuel
efficiency, and reliability) as the Commission may, by
rule, prescribe;''.
(2) Qualifying cogeneration facility.--Section 3(18)(B) of
the Federal Power Act (16 U.S.C. 796(18)(B)) is amended to read
as follows:
``(B) `qualifying cogeneration facility' means a
cogeneration facility that the Commission determines,
by rule, meets such requirements (including
requirements respecting minimum size, fuel use, and
fuel efficiency) as the Commission may, by rule,
prescribe;''.

Subtitle F--Repeal of PUHCA

SEC. 1261. SHORT TITLE.

This subtitle may be cited as the ``Public Utility Holding Company
Act of 2004''.

SEC. 1262. DEFINITIONS.

For purposes of this subtitle:
(1) Affiliate.--The term ``affiliate'' of a company means
any company, 5 percent or more of the outstanding voting
securities of which are owned, controlled, or held with power
to vote, directly or indirectly, by such company.
(2) Associate company.--The term ``associate company'' of a
company means any company in the same holding company system
with such company.
(3) Commission.--The term ``Commission'' means the Federal
Energy Regulatory Commission.
(4) Company.--The term ``company'' means a corporation,
partnership, association, joint stock company, business trust,
or any organized group of persons, whether incorporated or not,
or a receiver, trustee, or other liquidating agent of any of
the foregoing.
(5) Electric utility company.--The term ``electric utility
company'' means any company that owns or operates facilities
used for the generation, transmission, or distribution of
electric energy for sale.
(6) Exempt wholesale generator and foreign utility
company.--The terms ``exempt wholesale generator'' and
``foreign utility company'' have the same meanings as in
sections 32 and 33, respectively, of the Public Utility Holding
Company Act of 1935 (15 U.S.C. 79z-5a, 79z-5b), as those
sections existed on the day before the effective date of this
subtitle.
(7) Gas utility company.--The term ``gas utility company''
means any company that owns or operates facilities used for
distribution at retail (other than the distribution only in
enclosed portable containers or distribution to tenants or
employees of the company operating such facilities for their
own use and not for resale) of natural or manufactured gas for
heat, light, or power.
(8) Holding company.--The term ``holding company'' means--
(A) any company that directly or indirectly owns,
controls, or holds, with power to vote, 10 percent or
more of the outstanding voting securities of a public-
utility company or of a holding company of any public-
utility company; and
(B) any person, determined by the Commission, after
notice and opportunity for hearing, to exercise
directly or indirectly (either alone or pursuant to an
arrangement or understanding with 1 or more persons)
such a controlling influence over the management or
policies of any public-utility company or holding
company as to make it necessary or appropriate for the
rate protection of utility customers with respect to
rates that such person be subject to the obligations,
duties, and liabilities imposed by this subtitle upon
holding companies.
(9) Holding company system.--The term ``holding company
system'' means a holding company, together with its subsidiary
companies.
(10) Jurisdictional rates.--The term ``jurisdictional
rates'' means rates accepted or established by the Commission
for the transmission of electric energy in interstate commerce,
the sale of electric energy at wholesale in interstate
commerce, the transportation of natural gas in interstate
commerce, and the sale in interstate commerce of natural gas
for resale for ultimate public consumption for domestic,
commercial, industrial, or any other use.
(11) Natural gas company.--The term ``natural gas company''
means a person engaged in the transportation of natural gas in
interstate commerce or the sale of such gas in interstate
commerce for resale.
(12) Person.--The term ``person'' means an individual or
company.
(13) Public utility.--The term ``public utility'' means any
person who owns or operates facilities used for transmission of
electric energy in interstate commerce or sales of electric
energy at wholesale in interstate commerce.
(14) Public-utility company.--The term ``public-utility
company'' means an electric utility company or a gas utility
company.
(15) State commission.--The term ``State commission'' means
any commission, board, agency, or officer, by whatever name
designated, of a State, municipality, or other political
subdivision of a State that, under the laws of such State, has
jurisdiction to regulate public utility companies.
(16) Subsidiary company.--The term ``subsidiary company''
of a holding company means--
(A) any company, 10 percent or more of the
outstanding voting securities of which are directly or
indirectly owned, controlled, or held with power to
vote, by such holding company; and
(B) any person, the management or policies of which
the Commission, after notice and opportunity for
hearing, determines to be subject to a controlling
influence, directly or indirectly, by such holding
company (either alone or pursuant to an arrangement or
understanding with 1 or more other persons) so as to
make it necessary for the rate protection of utility
customers with respect to rates that such person be
subject to the obligations, duties, and liabilities
imposed by this subtitle upon subsidiary companies of
holding companies.
(17) Voting security.--The term ``voting security'' means
any security presently entitling the owner or holder thereof to
vote in the direction or management of the affairs of a
company.

SEC. 1263. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.

The Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et
seq.) is repealed.

SEC. 1264. FEDERAL ACCESS TO BOOKS AND RECORDS.

(a) In General.--Each holding company and each associate company
thereof shall maintain, and shall make available to the Commission,
such books, accounts, memoranda, and other records as the Commission
determines are relevant to costs incurred by a public utility or
natural gas company that is an associate company of such holding
company and necessary or appropriate for the protection of utility
customers with respect to jurisdictional rates.
(b) Affiliate Companies.--Each affiliate of a holding company or of
any subsidiary company of a holding company shall maintain, and shall
make available to the Commission, such books, accounts, memoranda, and
other records with respect to any transaction with another affiliate,
as the Commission determines are relevant to costs incurred by a public
utility or natural gas company that is an associate company of such
holding company and necessary or appropriate for the protection of
utility customers with respect to jurisdictional rates.
(c) Holding Company Systems.--The Commission may examine the books,
accounts, memoranda, and other records of any company in a holding
company system, or any affiliate thereof, as the Commission determines
are relevant to costs incurred by a public utility or natural gas
company within such holding company system and necessary or appropriate
for the protection of utility customers with respect to jurisdictional
rates.
(d) Confidentiality.--No member, officer, or employee of the
Commission shall divulge any fact or information that may come to his
or her knowledge during the course of examination of books, accounts,
memoranda, or other records as provided in this section, except as may
be directed by the Commission or by a court of competent jurisdiction.

SEC. 1265. STATE ACCESS TO BOOKS AND RECORDS.

(a) In General.--Upon the written request of a State commission
having jurisdiction to regulate a public-utility company in a holding
company system, the holding company or any associate company or
affiliate thereof, other than such public-utility company, wherever
located, shall produce for inspection books, accounts, memoranda, and
other records that--
(1) have been identified in reasonable detail in a
proceeding before the State commission;
(2) the State commission determines are relevant to costs
incurred by such public-utility company; and
(3) are necessary for the effective discharge of the
responsibilities of the State commission with respect to such
proceeding.
(b) Limitation.--Subsection (a) does not apply to any person that
is a holding company solely by reason of ownership of 1 or more
qualifying facilities under the Public Utility Regulatory Policies Act
of 1978 (16 U.S.C. 2601 et seq.).
(c) Confidentiality of Information.--The production of books,
accounts, memoranda, and other records under subsection (a) shall be
subject to such terms and conditions as may be necessary and
appropriate to safeguard against unwarranted disclosure to the public
of any trade secrets or sensitive commercial information.
(d) Effect on State Law.--Nothing in this section shall preempt
applicable State law concerning the provision of books, accounts,
memoranda, and other records, or in any way limit the rights of any
State to obtain books, accounts, memoranda, and other records under any
other Federal law, contract, or otherwise.
(e) Court Jurisdiction.--Any United States district court located
in the State in which the State commission referred to in subsection
(a) is located shall have jurisdiction to enforce compliance with this
section.

SEC. 1266. EXEMPTION AUTHORITY.

(a) Rulemaking.--Not later than 90 days after the effective date of
this subtitle, the Commission shall issue a final rule to exempt from
the requirements of section 1264 (relating to Federal access to books
and records) any person that is a holding company, solely with respect
to 1 or more--
(1) qualifying facilities under the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.);
(2) exempt wholesale generators; or
(3) foreign utility companies.
(b) Other Authority.--The Commission shall exempt a person or
transaction from the requirements of section 1264 (relating to Federal
access to books and records) if, upon application or upon the motion of
the Commission--
(1) the Commission finds that the books, accounts,
memoranda, and other records of any person are not relevant to
the jurisdictional rates of a public utility or natural gas
company; or
(2) the Commission finds that any class of transactions is
not relevant to the jurisdictional rates of a public utility or
natural gas company.

SEC. 1267. AFFILIATE TRANSACTIONS.

(a) Commission Authority Unaffected.--Nothing in this subtitle
shall limit the authority of the Commission under the Federal Power Act
(16 U.S.C. 791a et seq.) to require that jurisdictional rates are just
and reasonable, including the ability to deny or approve the pass
through of costs, the prevention of cross-subsidization, and the
issuance of such rules and regulations as are necessary or appropriate
for the protection of utility consumers.
(b) Recovery of Costs.--Nothing in this subtitle shall preclude the
Commission or a State commission from exercising its jurisdiction under
otherwise applicable law to determine whether a public-utility company,
public utility, or natural gas company may recover in rates any costs
of an activity performed by an associate company, or any costs of goods
or services acquired by such public-utility company from an associate
company.

SEC. 1268. APPLICABILITY.

Except as otherwise specifically provided in this subtitle, no
provision of this subtitle shall apply to, or be deemed to include--
(1) the United States;
(2) a State or any political subdivision of a State;
(3) any foreign governmental authority not operating in the
United States;
(4) any agency, authority, or instrumentality of any entity
referred to in paragraph (1), (2), or (3); or
(5) any officer, agent, or employee of any entity referred
to in paragraph (1), (2), (3), or (4) acting as such in the
course of his or her official duty.

SEC. 1269. EFFECT ON OTHER REGULATIONS.

Nothing in this subtitle precludes the Commission or a State
commission from exercising its jurisdiction under otherwise applicable
law to protect utility customers.

SEC. 1270. ENFORCEMENT.

The Commission shall have the same powers as set forth in sections
306 through 317 of the Federal Power Act (16 U.S.C. 825e-825p) to
enforce the provisions of this subtitle.

SEC. 1271. SAVINGS PROVISIONS.

(a) In General.--Nothing in this subtitle, or otherwise in the
Public Utility Holding Company Act of 1935, or rules, regulations, or
orders thereunder, prohibits a person from engaging in or continuing to
engage in activities or transactions in which it is legally engaged or
authorized to engage on the date of enactment of this Act, if that
person continues to comply with the terms (other than an expiration
date or termination date) of any such authorization, whether by rule or
by order.
(b) Effect on Other Commission Authority.--Nothing in this subtitle
limits the authority of the Commission under the Federal Power Act (16
U.S.C. 791a et seq.) or the Natural Gas Act (15 U.S.C. 717 et seq.).

SEC. 1272. IMPLEMENTATION.

Not later than 12 months after the date of enactment of this
subtitle, the Commission shall--
(1) issue such regulations as may be necessary or
appropriate to implement this subtitle (other than section
1265, relating to State access to books and records); and
(2) submit to Congress detailed recommendations on
technical and conforming amendments to Federal law necessary to
carry out this subtitle and the amendments made by this
subtitle.

SEC. 1273. TRANSFER OF RESOURCES.

All books and records that relate primarily to the functions
transferred to the Commission under this subtitle shall be transferred
from the Securities and Exchange Commission to the Commission.

SEC. 1274. EFFECTIVE DATE.

(a) In General.--Except for section 1272 (relating to
implementation), this subtitle shall take effect 12 months after the
date of enactment of this subtitle.
(b) Compliance With Certain Rules.--If the Commission approves and
makes effective any final rulemaking modifying the standards of conduct
governing entities that own, operate, or control facilities for
transmission of electricity in interstate commerce or transportation of
natural gas in interstate commerce prior to the effective date of this
subtitle, any action taken by a public-utility company or utility
holding company to comply with the requirements of such rulemaking
shall not subject such public-utility company or utility holding
company to any regulatory requirement applicable to a holding company
under the Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et
seq.).

SEC. 1275. SERVICE ALLOCATION.

(a) FERC Review.--In the case of non-power goods or administrative
or management services provided by an associate company organized
specifically for the purpose of providing such goods or services to any
public utility in the same holding company system, at the election of
the system or a State commission having jurisdiction over the public
utility, the Commission, after the effective date of this subtitle,
shall review and authorize the allocation of the costs for such goods
or services to the extent relevant to that associate company in order
to assure that each allocation is appropriate for the protection of
investors and consumers of such public utility.
(b) Cost Allocation.--Nothing in this section shall preclude the
Commission or a State commission from exercising its jurisdiction under
other applicable law with respect to the review or authorization of any
costs allocated to a public utility in a holding company system located
in the affected State as a result of the acquisition of non-power goods
or administrative and management services by such public utility from
an associate company organized specifically for that purpose.
(c) Rules.--Not later than 6 months after the date of enactment of
this Act, the Commission shall issue rules (which rules shall be
effective no earlier than the effective date of this subtitle) to
exempt from the requirements of this section any company in a holding
company system whose public utility operations are confined
substantially to a single State and any other class of transactions
that the Commission finds is not relevant to the jurisdictional rates
of a public utility.
(d) Public Utility.--As used in this section, the term ``public
utility'' has the meaning given that term in section 201(e) of the
Federal Power Act.

SEC. 1276. AUTHORIZATION OF APPROPRIATIONS.

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

SEC. 1277. CONFORMING AMENDMENTS TO THE FEDERAL POWER ACT.

(a) Conflict of Jurisdiction.--Section 318 of the Federal Power Act
(16 U.S.C. 825q) is repealed.
(b) Definitions.--(1) Section 201(g)(5) of the Federal Power Act
(16 U.S.C. 824(g)(5)) is amended by striking ``1935'' and inserting
``2003''.
(2) Section 214 of the Federal Power Act (16 U.S.C. 824m) is
amended by striking ``1935'' and inserting ``2003''.

Subtitle G--Market Transparency, Enforcement, and Consumer Protection

SEC. 1281. MARKET TRANSPARENCY RULES.

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

``SEC. 220. MARKET TRANSPARENCY RULES.

``(a) In General.--Not later than 180 days after the date of
enactment of this section, the Commission shall issue rules
establishing an electronic information system to provide the Commission
and the public with access to such information as is necessary or
appropriate to facilitate price transparency and participation in
markets subject to the Commission's jurisdiction under this Act. Such
systems shall provide information about the availability and market
price of wholesale electric energy and transmission services to the
Commission, State commissions, buyers and sellers of wholesale electric
energy, users of transmission services, and the public on a timely
basis. The Commission shall have authority to obtain such information
from any electric utility or transmitting utility, including any entity
described in section 201(f).
``(b) Exemptions.--The Commission shall exempt from disclosure
information it determines would, if disclosed, be detrimental to the
operation of an effective market or jeopardize system security. This
section shall not apply to transactions for the purchase or sale of
wholesale electric energy or transmission services within the area
described in section 212(k)(2)(A). In determining the information to be
made available under this section and time to make such information
available, the Commission shall seek to ensure that consumers and
competitive markets are protected from the adverse effects of potential
collusion or other anti-competitive behaviors that can be facilitated
by untimely public disclosure of transaction-specific information.
``(c) Commodity Futures Trading Commission.--This section shall not
affect the exclusive jurisdiction of the Commodity Futures Trading
Commission with respect to accounts, agreements, contracts, or
transactions in commodities under the Commodity Exchange Act (7 U.S.C.
1 et seq.). Any request for information to a designated contract
market, registered derivatives transaction execution facility, board of
trade, exchange, or market involving accounts, agreements, contracts,
or transactions in commodities (including natural gas, electricity and
other energy commodities) within the exclusive jurisdiction of the
Commodity Futures Trading Commission shall be directed to the Commodity
Futures Trading Commission.
``(d) Savings Provision.--In exercising its authority under this
section, the Commission shall not--
``(1) compete with, or displace from the market place, any
price publisher; or
``(2) regulate price publishers or impose any requirements
on the publication of information.''.

SEC. 1282. MARKET MANIPULATION.

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

``SEC. 221. PROHIBITION ON FILING FALSE INFORMATION.

``No person or other entity (including an entity described in
section 201(f)) shall willfully and knowingly report any information
relating to the price of electricity sold at wholesale or availability
of transmission capacity, which information the person or any other
entity knew to be false at the time of the reporting, to a Federal
agency with intent to fraudulently affect the data being compiled by
such Federal agency.

``SEC. 222. PROHIBITION ON ROUND TRIP TRADING.

``(a) Prohibition.--No person or other entity (including an entity
described in section 201(f)) shall willfully and knowingly enter into
any contract or other arrangement to execute a `round trip trade' for
the purchase or sale of electric energy at wholesale.
``(b) Definition.--For the purposes of this section, the term
`round trip trade' means a transaction, or combination of transactions,
in which a person or any other entity--
``(1) enters into a contract or other arrangement to
purchase from, or sell to, any other person or other entity
electric energy at wholesale;
``(2) simultaneously with entering into the contract or
arrangement described in paragraph (1), arranges a financially
offsetting trade with such other person or entity for the same
such electric energy, at the same location, price, quantity and
terms so that, collectively, the purchase and sale transactions
in themselves result in no financial gain or loss; and
``(3) enters into the contract or arrangement with a
specific intent to fraudulently affect reported revenues,
trading volumes, or prices.''.

SEC. 1283. ENFORCEMENT.

(a) Complaints.--Section 306 of the Federal Power Act (16 U.S.C.
825e) is amended as follows:
(1) By inserting ``electric utility,'' after ``Any
person,''.
(2) By inserting ``, transmitting utility,'' after
``licensee'' each place it appears.
(b) Review of Commission Orders.--Section 313(a) of the Federal
Power Act (16 U.S.C. 8251) is amended by inserting ``electric
utility,'' after ``person,'' in the first 2 places it appears and by
striking ``any person unless such person'' and inserting ``any entity
unless such entity''.
(c) Investigations.--Section 307(a) of the Federal Power Act (16
U.S.C. 825f(a)) is amended as follows:
(1) By inserting ``, electric utility, transmitting
utility, or other entity'' after ``person'' each time it
appears.
(2) By striking the period at the end of the first sentence
and inserting the following: ``or in obtaining information
about the sale of electric energy at wholesale in interstate
commerce and the transmission of electric energy in interstate
commerce.''.
(d) Criminal Penalties.--Section 316 of the Federal Power Act (16
U.S.C. 825o) is amended--
(1) in subsection (a), by striking ``$5,000'' and inserting
``$1,000,000'', and by striking ``two years'' and inserting ``5
years'';
(2) in subsection (b), by striking ``$500'' and inserting
``$25,000''; and
(3) by striking subsection (c).
(e) Civil Penalties.--Section 316A of the Federal Power Act (16
U.S.C. 825o-1) is amended as follows:
(1) In subsections (a) and (b), by striking ``section 211,
212, 213, or 214'' each place it appears and inserting ``Part
II''.
(2) In subsection (b), by striking ``$10,000'' and
inserting ``$1,000,000''.

SEC. 1284. REFUND EFFECTIVE DATE.

Section 206(b) of the Federal Power Act (16 U.S.C. 824e(b)) is
amended as follows:
(1) By striking ``the date 60 days after the filing of such
complaint nor later than 5 months after the expiration of such
60-day period'' in the second sentence and inserting ``the date
of the filing of such complaint nor later than 5 months after
the filing of such complaint''.
(2) By striking ``60 days after'' in the third sentence and
inserting ``of''.
(3) By striking ``expiration of such 60-day period'' in the
third sentence and inserting ``publication date''.
(4) By striking the fifth sentence and inserting the
following: ``If no final decision is rendered by the conclusion
of the 180-day period commencing upon initiation of a
proceeding pursuant to this section, the Commission shall state
the reasons why it has failed to do so and shall state its best
estimate as to when it reasonably expects to make such
decision.''.

SEC. 1285. REFUND AUTHORITY.

Section 206 of the Federal Power Act (16 U.S.C. 824e) is amended by
adding the following new subsection at the end thereof:
``(e)(1) Except as provided in paragraph (2), if an entity
described in section 201(f) voluntarily makes a short-term sale of
electric energy and the sale violates Commission rules in effect at the
time of the sale, such entity shall be subject to the Commission's
refund authority under this section with respect to such violation.
``(2) This section shall not apply to--
``(A) any entity that sells less than 8,000,000 megawatt
hours of electricity per year; or
``(B) any electric cooperative.
``(3) For purposes of this subsection, the term `short-term sale'
means an agreement for the sale of electric energy at wholesale in
interstate commerce that is for a period of 31 days or less (excluding
monthly contracts subject to automatic renewal).
``(4) The Commission shall have refund authority under subsection
(e)(1) with respect to a voluntary short-term sale of electric energy
by the Bonneville Power Administration (in this section `Bonneville')
only if the sale is at an unjust and unreasonable rate and, in that
event, may order a refund only for short-term sales made by Bonneville
at rates that are higher than the highest just and reasonable rate
charged by any other entity for a short-term sale of electric energy in
the same geographic market for the same, or most nearly comparable,
period as the sale by Bonneville.
``(5) With respect to any Federal power marketing agency or the
Tennessee Valley Authority, the Commission shall not assert or exercise
any regulatory authority or powers under subsection (e)(1) other than
the ordering of refunds to achieve a just and reasonable rate.''.

SEC. 1286. SANCTITY OF CONTRACT.

(a) In General.--The Federal Energy Regulatory Commission (in this
section, ``the Commission'') shall have no authority to abrogate or
modify any provision of an executed contract or executed contract
amendment described in subsection (b) that has been entered into or
taken effect, except upon a finding that failure to take such action
would be contrary to the public interest.
(b) Limitation.--Except as provided in subsection (c), this section
shall apply only to a contract or contract amendment--
(1) executed on or after the date of enactment of this Act;
and
(2) entered into--
(A) for the purchase or sale of electric energy
under section 205 of the Federal Power Act (16 U.S.C.
824d) where the seller has been authorized by the
Commission to charge market-based rates; or
(B) under section 4 of the Natural Gas Act (15
U.S.C. 717c) where the natural gas company has been
authorized by the Commission to charge market-based
rates for the service described in the contract.
(c) Exclusion.--This section shall not apply to an executed
contract or executed contract amendment that expressly provides for a
standard of review other than the public interest standard.
(d) Savings Provision.--With respect to contracts to which this
section does not apply, nothing in this section alters existing law
regarding the applicable standard of review for a contract subject to
the jurisdiction of the Commission.

SEC. 1287. CONSUMER PRIVACY AND UNFAIR TRADE PRACTICES.

(a) Privacy.--The Federal Trade Commission may issue rules
protecting the privacy of electric consumers from the disclosure of
consumer information obtained in connection with the sale or delivery
of electric energy to electric consumers.
(b) Slamming.--The Federal Trade Commission may issue rules
prohibiting the change of selection of an electric utility except with
the informed consent of the electric consumer or if approved by the
appropriate State regulatory authority.
(c) Cramming.--The Federal Trade Commission may issue rules
prohibiting the sale of goods and services to an electric consumer
unless expressly authorized by law or the electric consumer.
(d) Rulemaking.--The Federal Trade Commission shall proceed in
accordance with section 553 of title 5, United States Code, when
prescribing a rule under this section.
(e) State Authority.--If the Federal Trade Commission determines
that a State's regulations provide equivalent or greater protection
than the provisions of this section, such State regulations shall apply
in that State in lieu of the regulations issued by the Commission under
this section.
(f) Definitions.--For purposes of this section:
(1) State regulatory authority.--The term ``State
regulatory authority'' has the meaning given that term in
section 3(21) of the Federal Power Act (16 U.S.C. 796(21)).
(2) Electric consumer and electric utility.--The terms
``electric consumer'' and ``electric utility'' have the
meanings given those terms in section 3 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2602).

Subtitle H--Merger Reform

SEC. 1291. MERGER REVIEW REFORM AND ACCOUNTABILITY.

(a) Merger Review Reform.--Within 180 days after the date of
enactment of this Act, the Secretary of Energy, in consultation with
the Federal Energy Regulatory Commission and the Attorney General of
the United States, shall prepare, and transmit to Congress each of the
following:
(1) A study of the extent to which the authorities vested
in the Federal Energy Regulatory Commission under section 203
of the Federal Power Act are duplicative of authorities vested
in--
(A) other agencies of Federal and State Government;
and
(B) the Federal Energy Regulatory Commission,
including under sections 205 and 206 of the Federal
Power Act.
(2) Recommendations on reforms to the Federal Power Act
that would eliminate any unnecessary duplication in the
exercise of regulatory authority or unnecessary delays in the
approval (or disapproval) of applications for the sale, lease,
or other disposition of public utility facilities.
(b) Merger Review Accountability.--Not later than 1 year after the
date of enactment of this Act and annually thereafter, with respect to
all orders issued within the preceding year that impose a condition on
a sale, lease, or other disposition of public utility facilities under
section 203(b) of the Federal Power Act, the Federal Energy Regulatory
Commission shall transmit a report to Congress explaining each of the
following:
(1) The condition imposed.
(2) Whether the Commission could have imposed such
condition by exercising its authority under any provision of
the Federal Power Act other than under section 203(b).
(3) If the Commission could not have imposed such condition
other than under section 203(b), why the Commission determined
that such condition was consistent with the public interest.

SEC. 1292. ELECTRIC UTILITY MERGERS.

(a) Amendment.--Section 203(a) of the Federal Power Act (16 U.S.C.
824b(a)) is amended to read as follows:
``(a)(1) No public utility shall, without first having secured an
order of the Commission authorizing it to do so--
``(A) sell, lease, or otherwise dispose of the whole of its
facilities subject to the jurisdiction of the Commission, or
any part thereof of a value in excess of $10,000,000;
``(B) merge or consolidate, directly or indirectly, such
facilities or any part thereof with those of any other person,
by any means whatsoever; or
``(C) purchase, acquire, or take any security with a value
in excess of $10,000,000 of any other public utility.
``(2) No holding company in a holding company system that includes
a public utility shall purchase, acquire, or take any security with a
value in excess of $10,000,000 of, or, by any means whatsoever,
directly or indirectly, merge or consolidate with, a public utility or
a holding company in a holding company system that includes a public
utility with a value in excess of $10,000,000 without first having
secured an order of the Commission authorizing it to do so.
``(3) Upon receipt of an application for such approval the
Commission shall give reasonable notice in writing to the Governor and
State commission of each of the States in which the physical property
affected, or any part thereof, is situated, and to such other persons
as it may deem advisable.
``(4) After notice and opportunity for hearing, the Commission
shall approve the proposed disposition, consolidation, acquisition, or
change in control, if it finds that the proposed transaction will be
consistent with the public interest. In evaluating whether a
transaction will be consistent with the public interest, the Commission
shall consider whether the proposed transaction--
``(A) will adequately protect consumer interests;
``(B) will be consistent with competitive wholesale
markets;
``(C) will impair the financial integrity of any public
utility that is a party to the transaction or an associate
company of any party to the transaction; and
``(D) satisfies such other criteria as the Commission
considers consistent with the public interest.
``(5) The Commission shall, by rule, adopt procedures for the
expeditious consideration of applications for the approval of
dispositions, consolidations, or acquisitions under this section. Such
rules shall identify classes of transactions, or specify criteria for
transactions, that normally meet the standards established in paragraph
(4). The Commission shall provide expedited review for such
transactions. The Commission shall grant or deny any other application
for approval of a transaction not later than 180 days after the
application is filed. If the Commission does not act within 180 days,
such application shall be deemed granted unless the Commission finds,
based on good cause, that further consideration is required to
determine whether the proposed transaction meets the standards of
paragraph (4) and issues an order tolling the time for acting on the
application for not more than 180 days, at the end of which additional
period the Commission shall grant or deny the application.
``(6) For purposes of this subsection, the terms `associate
company', `holding company', and `holding company system' have the
meaning given those terms in the Public Utility Holding Company Act of
2004.''.
(b) Effective Date.--The amendments made by this section shall take
effect 12 months after the date of enactment of this section.

Subtitle I--Definitions

SEC. 1295. DEFINITIONS.

(a) Electric Utility.--Section 3(22) of the Federal Power Act (16
U.S.C. 796(22)) is amended to read as follows:
``(22) Electric utility.--The term `electric utility' means
any person or Federal or State agency (including any entity
described in section 201(f)) that sells electric energy; such
term includes the Tennessee Valley Authority and each Federal
power marketing administration.''.
(b) Transmitting Utility.--Section 3(23) of the Federal Power Act
(16 U.S.C. 796(23)) is amended to read as follows:
``(23) Transmitting utility.--The term `transmitting
utility' means an entity, including any entity described in
section 201(f), that owns, operates, or controls facilities
used for the transmission of electric energy--
``(A) in interstate commerce; or
``(B) for the sale of electric energy at
wholesale.''.
(c) Additional Definitions.--Section 3 of the Federal Power Act (16
U.S.C. 796) is amended by adding at the end the following:
``(26) Electric cooperative.--The term `electric
cooperative' means a cooperatively owned electric utility.
``(27) RTO.--The term `Regional Transmission Organization'
or `RTO' means an entity of sufficient regional scope approved
by the Commission to exercise operational or functional control
of facilities used for the transmission of electric energy in
interstate commerce and to ensure nondiscriminatory access to
such facilities.
``(28) ISO.--The term `Independent System Operator' or
`ISO' means an entity approved by the Commission to exercise
operational or functional control of facilities used for the
transmission of electric energy in interstate commerce and to
ensure nondiscriminatory access to such facilities.''.
(d) Commission.--For the purposes of this title, the term
``Commission'' means the Federal Energy Regulatory Commission.
(e) Applicability.--Section 201(f) of the Federal Power Act (16
U.S.C. 824(f)) is amended by adding after ``political subdivision of a
state,'' the following: ``an electric cooperative that has financing
under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.) or
that sells less than 4,000,000 megawatt hours of electricity per
year,''.

Subtitle J--Technical and Conforming Amendments

SEC. 1297. CONFORMING AMENDMENTS.

The Federal Power Act is amended as follows:
(1) Section 201(b)(2) of such Act (16 U.S.C. 824(b)(2)) is
amended as follows:
(A) In the first sentence by striking ``210, 211,
and 212'' and inserting ``203(a)(2), 206(e), 210, 211,
211A, 212, 215, 216, 217, 218, 219, 220, 221, and
222''.
(B) In the second sentence by striking ``210 or
211'' and inserting ``203(a)(2), 206(e), 210, 211,
211A, 212, 215, 216, 217, 218, 219, 220, 221, and
222''.
(C) Section 201(b)(2) of such Act is amended by
striking ``The'' in the first place it appears and
inserting ``Notwithstanding section 201(f), the'' and
in the second sentence after ``any order'' by inserting
``or rule''.
(2) Section 201(e) of such Act is amended by striking
``210, 211, or 212'' and inserting ``206(e), 206(f), 210, 211,
211A, 212, 215, 216, 217, 218, 219, 220, 221, and 222''.
(3) Section 206 of such Act (16 U.S.C. 824e) is amended as
follows:
(A) In subsection (b), in the seventh sentence, by
striking ``the public utility to make''.
(B) In the first sentence of subsection (a), by
striking ``hearing had'' and inserting ``hearing
held''.
(4) Section 211(c) of such Act (16 U.S.C. 824j(c)) is
amended by--
(A) striking ``(2)'';
(B) striking ``(A)'' and inserting ``(1)''
(C) striking ``(B)'' and inserting ``(2)''; and
(D) striking ``termination of modification'' and
inserting ``termination or modification''.
(5) Section 211(d)(1) of such Act (16 U.S.C. 824j(d)(1)) is
amended by striking ``electric utility'' the second time it
appears and inserting ``transmitting utility''.
(6) Section 315 (c) of such Act (16 U.S.C. 825n(c)) is
amended by striking ``subsection'' and inserting ``section''.

TITLE XIII--ENERGY TAX INCENTIVES

SEC. 1300. SHORT TITLE; AMENDMENT OF 1986 CODE.

(a) Short Title.--This title may be cited as the ``Energy Tax
Policy Act of 2004''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this title an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.

Subtitle A--Conservation

PART I--RESIDENTIAL AND BUSINESS PROPERTY

SEC. 1301. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

(a) In General.--Subpart A of part IV of subchapter A of chapter 1
(relating to nonrefundable personal credits) is amended by inserting
after section 25B the following new section:

``SEC. 25C. RESIDENTIAL ENERGY EFFICIENT PROPERTY.

``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to the sum of--
``(1) 15 percent of the qualified solar water heating
property expenditures made by the taxpayer during such year,
``(2) 15 percent of the qualified photovoltaic property
expenditures made by the taxpayer during such year,
``(3) 15 percent of the qualified wind energy property
expenditures made by the taxpayer during such year, and
``(4) 20 percent of the qualified fuel cell property
expenditures made by the taxpayer during such year.
``(b) Limitations.--
``(1) Maximum credit.--
``(A) In general.--The credit allowed under
subsection (a) shall not exceed--
``(i) $2,000 for property described in
paragraph (1), (2), or (3) of subsection (c),
and
``(ii) $500 for each 0.5 kilowatt of
capacity of property described in subsection
(c)(4).
``(B) Prior expenditures by taxpayer on same
residence taken into account.--In determining the
amount of the credit allowed to a taxpayer with respect
to any dwelling unit under this section, the dollar
amount under subparagraph (A)(i) with respect to each
type of property described in such subparagraph shall
be reduced by the credit allowed to the taxpayer under
this section with respect to such property for all
preceding taxable years with respect to such dwelling
unit.
``(2) Property standards.--No credit shall be allowed under
this section for an item of property unless--
``(A) the original use of such property commences
with the taxpayer,
``(B) such property reasonably can be expected to
remain in use for at least 5 years,
``(C) such property is installed on or in
connection with a dwelling unit located in the United
States and used as a residence by the taxpayer,
``(D) in the case of solar water heating property,
such property is certified for performance by the non-
profit Solar Rating and Certification Corporation or a
comparable entity endorsed by the government of the
State in which such property is installed,
``(E) in the case of fuel cell property, such
property meets the performance and quality standards
(if any) which have been prescribed by the Secretary by
regulations (after consultation with the Secretary of
Energy), and
``(F) in the case of any photovoltaic property,
fuel cell property, or wind energy property, such
property meets appropriate fire and electric code
requirements.
``(c) Definitions.--For purposes of this section--
``(1) Qualified solar water heating property expenditure.--
The term `qualified solar water heating property expenditure'
means an expenditure for property which uses solar energy to
heat water for use in a dwelling unit.
``(2) Qualified photovoltaic property expenditure.--The
term `qualified photovoltaic property expenditure' means an
expenditure for property which uses solar energy to generate
electricity for use in a dwelling unit and which is not
described in paragraph (1).
``(3) Qualified wind energy property expenditure.--The term
`qualified wind energy property expenditure' means an
expenditure for property which uses wind energy to generate
electricity for use in a dwelling unit.
``(4) Qualified fuel cell property expenditure.--The term
`qualified fuel cell property expenditure' means an expenditure
for any qualified fuel cell property (as defined in section
48(c)(1)).
``(d) Special Rules.--For purposes of this section--
``(1) Solar panels.--No expenditure relating to a solar
panel or other property installed as a roof (or portion
thereof) shall fail to be treated as property described in
paragraph (1) or (2) of subsection (c) solely because it
constitutes a structural component of the structure on which it
is installed.
``(2) Swimming pools, etc., used as storage medium.--
Expenditures which are properly allocable to a swimming pool,
hot tub, or any other energy storage medium which has a
function other than the function of such storage shall not be
taken into account for purposes of this section.
``(3) Dollar amounts in case of joint occupancy.--In the
case of any dwelling unit which is jointly occupied and used
during any calendar year as a residence by 2 or more
individuals, the following rules shall apply:
``(A) The amount of the credit allowable under
subsection (a) by reason of expenditures made during
such calendar year by any of such individuals with
respect to such dwelling unit shall be determined by
treating all of such individuals as 1 taxpayer whose
taxable year is such calendar year.
``(B) There shall be allowable, with respect to
such expenditures to each of such individuals, a credit
under subsection (a) for the taxable year in which such
calendar year ends in an amount which bears the same
ratio to the amount determined under subparagraph (A)
as the amount of such expenditures made by such
individual during such calendar year bears to the
aggregate of such expenditures made by all of such
individuals during such calendar year.
``(C) Subparagraphs (A) and (B) shall be applied
separately with respect to expenditures described in
paragraphs (1), (2), (3), and (4) of subsection (c).
``(4) Tenant-stockholder in cooperative housing
corporation.--In the case of an individual who is a tenant-
stockholder (as defined in section 216) in a cooperative
housing corporation (as defined in such section), such
individual shall be treated as having made the individual's
tenant-stockholder's proportionate share (as defined in section
216(b)(3)) of any expenditures of such corporation.
``(5) Condominiums.--
``(A) In general.--In the case of an individual who
is a member of a condominium management association
with respect to a condominium which the individual
owns, such individual shall be treated as having made
the individual's proportionate share of any
expenditures of such association.
``(B) Condominium management association.--For
purposes of this paragraph, the term `condominium
management association' means an organization which
meets the requirements of paragraph (1) of section
528(c) (other than subparagraph (E) thereof) with
respect to a condominium project substantially all of
the units of which are used as residences.
``(6) Allocation in certain cases.--Except in the case of
qualified wind energy property expenditures, if less than 80
percent of the use of an item is for nonbusiness purposes, only
that portion of the expenditures for such item which is
properly allocable to use for nonbusiness purposes shall be
taken into account.
``(7) When expenditure made; amount of expenditure.--
``(A) In general.--Except as provided in
subparagraph (B), an expenditure with respect to an
item shall be treated as made when the original
installation of the item is completed.
``(B) Expenditures part of building construction.--
In the case of an expenditure in connection with the
construction or reconstruction of a structure, such
expenditure shall be treated as made when the original
use of the constructed or reconstructed structure by
the taxpayer begins.
``(C) Amount.--The amount of any expenditure shall
be the cost thereof.
``(8) Property financed by subsidized energy financing.--
For purposes of determining the amount of expenditures made by
any individual with respect to any dwelling unit, there shall
not be taken into account expenditures which are made from
subsidized energy financing (as defined in section
48(a)(4)(C)).
``(9) Denial of depreciation on wind energy property for
which credit allowed.--No deduction shall be allowed under
section 167 for property which uses wind energy to generate
electricity if the taxpayer is allowed a credit under this
section with respect to such property.
``(e) Basis Adjustments.--For purposes of this subtitle, if a
credit is allowed under this section for any expenditure with respect
to any property, the increase in the basis of such property which would
(but for this subsection) result from such expenditure shall be reduced
by the amount of the credit so allowed.
``(f) Termination.--The credit allowed under this section shall not
apply to taxable years beginning after December 31, 2006 (December 31,
2008, with respect to qualified photovoltaic property expenditures).''.
(b) Conforming Amendments.--
(1) Section 1016(a) is amended by striking ``and'' at the
end of paragraph (27), by striking the period at the end of
paragraph (28) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(29) to the extent provided in section 25C(e), in the
case of amounts with respect to which a credit has been allowed
under section 25C.''.
(2) The table of sections for subpart A of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 25B the following new item:

``Sec. 25C. Residential energy efficient property.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after December 31, 2003.

SEC. 1302. EXTENSION AND EXPANSION OF CREDIT FOR ELECTRICITY PRODUCED
FROM CERTAIN RENEWABLE RESOURCES.

(a) Expansion of Qualified Energy Resources.--Subsection (c) of
section 45 (relating to electricity produced from certain renewable
resources) is amended to read as follows:
``(c) Qualified Energy Resources.--For purposes of this section--
``(1) In general.--The term `qualified energy resources'
means--
``(A) wind,
``(B) closed-loop biomass,
``(C) open-loop biomass,
``(D) geothermal energy,
``(E) solar energy,
``(F) small irrigation power, and
``(G) municipal solid waste.
``(2) Closed-loop biomass.--The term `closed-loop biomass'
means any organic material from a plant which is planted
exclusively for purposes of being used at a qualified facility
to produce electricity.
``(3) Open-loop biomass.--
``(A) In general.--The term `open-loop biomass'
means--
``(i) any agricultural livestock waste
nutrients, or
``(ii) any solid, nonhazardous, cellulosic
waste material which is segregated from other
waste materials and which is derived from--
``(I) any of the following forest-
related resources: mill and harvesting
residues, precommercial thinnings,
slash, and brush,
``(II) solid wood waste materials,
including waste pallets, crates,
dunnage, manufacturing and construction
wood wastes (other than pressure-
treated, chemically-treated, or painted
wood wastes), and landscape or right-
of-way tree trimmings, but not
including municipal solid waste, gas
derived from the biodegradation of
solid waste, or paper which is commonly
recycled, or
``(III) agriculture sources,
including orchard tree crops, vineyard,
grain, legumes, sugar, and other crop
by-products or residues.
Such term shall not include closed-loop biomass.
``(B) Agricultural livestock waste nutrients.--
``(i) In general.--The term `agricultural
livestock waste nutrients' means agricultural
livestock manure and litter, including wood
shavings, straw, rice hulls, and other bedding
material for the disposition of manure.
``(ii) Agricultural livestock.--The term
`agricultural livestock' includes bovine,
swine, poultry, and sheep.
``(4) Geothermal energy.--The term `geothermal energy'
means energy derived from a geothermal deposit (within the
meaning of section 613(e)(2)).
``(5) Small irrigation power.--The term `small irrigation
power' means power--
``(A) generated without any dam or impoundment of
water through an irrigation system canal or ditch, and
``(B) the nameplate capacity rating of which is not
less than 150 kilowatts but is less than 5 megawatts.
``(6) Municipal solid waste.--The term `municipal solid
waste' has the meaning given the term `solid waste' under
section 2(27) of the Solid Waste Disposal Act (42 U.S.C.
6903).''.
(b) Extension and Expansion of Qualified Facilities.--
(1) In general.--Section 45 is amended by redesignating
subsection (d) as subsection (e) and by inserting after
subsection (c) the following new subsection:
``(d) Qualified Facilities.--For purposes of this section--
``(1) Wind facility.--In the case of a facility using wind
to produce electricity, the term `qualified facility' means any
facility owned by the taxpayer which is originally placed in
service after December 31, 1993, and before January 1, 2007.
``(2) Closed-loop biomass facility.--
``(A) In general.--In the case of a facility using
closed-loop biomass to produce electricity, the term
`qualified facility' means any facility--
``(i) owned by the taxpayer which is
originally placed in service after December 31,
1992, and before January 1, 2007, or
``(ii) owned by the taxpayer which before
January 1, 2007, is originally placed in
service and modified to use closed-loop biomass
to co-fire with coal, with other biomass, or
with both, but only if the modification is
approved under the Biomass Power for Rural
Development Programs or is part of a pilot
project of the Commodity Credit Corporation as
described in 65 Fed. Reg. 63052.
``(B) Special rules.--In the case of a qualified
facility described in subparagraph (A)(ii)--
``(i) the 10-year period referred to in
subsection (a) shall be treated as beginning no
earlier than the date of the enactment of the
Energy Tax Policy Act of 2004,
``(ii) the amount of the credit determined
under subsection (a) with respect to the
facility shall be an amount equal to the amount
determined without regard to this clause
multiplied by the ratio of the thermal content
of the closed-loop biomass used in such
facility to the thermal content of all fuels
used in such facility, and
``(iii) if the owner of such facility is
not the producer of the electricity, the person
eligible for the credit allowable under
subsection (a) shall be the lessee or the
operator of such facility.
``(3) Open-loop biomass facilities.--
``(A) In general.--In the case of a facility using
open-loop biomass to produce electricity, the term
`qualified facility' means any facility owned by the
taxpayer which--
``(i) in the case of a facility using
agricultural livestock waste nutrients--
``(I) is originally placed in
service after the date of the enactment
of the Energy Tax Policy Act of 2004
and before January 1, 2007, and
``(II) the nameplate capacity
rating of which is not less than 150
kilowatts, and
``(ii) in the case of any other facility,
is originally placed in service before January
1, 2007.
``(B) Credit eligibility.--In the case of any
facility described in subparagraph (A), if the owner of
such facility is not the producer of the electricity,
the person eligible for the credit allowable under
subsection (a) shall be the lessee or the operator of
such facility.
``(4) Geothermal or solar energy facility.--In the case of
a facility using geothermal or solar energy to produce
electricity, the term `qualified facility' means any facility
owned by the taxpayer which is originally placed in service
after the date of the enactment of the Energy Tax Policy Act of
2004 and before January 1, 2007. Such term shall not include
any property described in section 48(a)(3) the basis of which
is taken into account by the taxpayer for purposes of
determining the energy credit under section 48.
``(5) Small irrigation power facility.--In the case of a
facility using small irrigation power to produce electricity,
the term `qualified facility' means any facility owned by the
taxpayer which is originally placed in service after the date
of the enactment of the Energy Tax Policy Act of 2004 and
before January 1, 2007.
``(6) Landfill gas facilities.--In the case of a facility
producing electricity from gas derived from the biodegradation
of municipal solid waste, the term `qualified facility' means
any facility owned by the taxpayer which is originally placed
in service after the date of the enactment of the Energy Tax
Policy Act of 2004 and before January 1, 2007.
``(7) Trash combustion facilities.--In the case of a
facility which burns municipal solid waste to produce
electricity, the term `qualified facility' means any facility
owned by the taxpayer which is originally placed in service
after the date of the enactment of the Energy Tax Policy Act of
2004 and before January 1, 2007.''.
(2) Conforming amendment.--Section 45(e), as so
redesignated, is amended by striking ``subsection (c)(3)(A)''
in paragraph (7)(A)(i) and inserting ``subsection (d)(1)''.
(c) Special Credit Rate and Period for Electricity Produced and
Sold After Enactment Date.--Section 45(b) is amended by adding at the
end the following new paragraph:
``(4) Credit rate and period for electricity produced and
sold from certain facilities.--
``(A) Credit rate.--In the case of electricity
produced and sold in any calendar year after 2003 at
any qualified facility described in paragraph (3), (5),
(6), or (7) of subsection (d), the amount in effect
under subsection (a)(1) for such calendar year
(determined before the application of the last sentence
of paragraph (2) of this subsection) shall be reduced
by one-third.
``(B) Credit period.--
``(i) In general.--Except as provided in
clause (ii), in the case of any facility
described in paragraph (3), (4), (5), (6), or
(7) of subsection (d), the 5-year period
beginning on the date the facility was
originally placed in service shall be
substituted for the 10-year period in
subsection (a)(2)(A)(ii).
``(ii) Certain open-loop biomass
facilities.--In the case of any facility
described in subsection (d)(3)(A)(ii) placed in
service before the date of the enactment of
this paragraph, the 5-year period beginning on
January 1, 2004, shall be substituted for the
10-year period in subsection (a)(2)(A)(ii).''.
(d) Coordination With Other Credits.--Section 45(e), as so
redesignated, is amended by adding at the end the following new
paragraph:
``(8) Coordination with other credits.--The term `qualified
facility' shall not include--
``(A) any property with respect to which a credit
is allowed under section 25C, and
``(B) any facility the production from which is
allowed as a credit under section 45K,
for the taxable year or any prior taxable year.''.
(e) Coordination With Section 48.--Section 48(a)(3) (defining
energy property) is amended by adding at the end the following new
sentence: ``Such term shall not include any property which is part of a
facility the production from which is allowed as a credit under section
45 for the taxable year or any prior taxable year.''.
(f) Elimination of Certain Credit Reductions.--Section 45(b)(3)
(relating to credit reduced for grants, tax-exempt bonds, subsidized
energy financing, and other credits) is amended--
(1) by inserting ``the lesser of \1/2\ or'' before ``a
fraction'' in the matter preceding subparagraph (A), and
(2) by adding at the end the following new sentence: ``This
paragraph shall not apply with respect to any facility
described in subsection (d)(2)(A)(ii).''.
(g) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
electricity produced and sold after the date of the enactment
of this Act, in taxable years ending after such date.
(2) Certain biomass facilities.--With respect to any
facility described in section 45(d)(3)(A)(ii) of the Internal
Revenue Code of 1986, as added by subsection (b)(1), which is
placed in service before the date of the enactment of this Act,
the amendments made by this section shall apply to electricity
produced and sold after December 31, 2003, in taxable years
ending after such date.
(3) Credit rate and period for new facilities.--The
amendments made by subsection (c) shall apply to electricity
produced and sold after December 31, 2003, in taxable years
ending after such date.
(4) Nonapplication of amendments to preeffective date
poultry waste facilities.--The amendments made by this section
shall not apply with respect to any poultry waste facility
(within the meaning of section 45(c)(3)(C), as in effect on the
day before the date of the enactment of this Act) placed in
service before January 1, 2004.
(h) GAO Study.--The Comptroller General of the United States shall
conduct a study on the market viability of producing electricity from
resources with respect to which credit is allowed under section 45 of
the Internal Revenue Code of 1986 but without such credit. In the case
of open-loop biomass and municipal solid waste resources, the study
should take into account savings associated with not having to dispose
of such resources. In conducting such study, the Comptroller shall
estimate the dollar value of the environmental impact of producing
electricity from such resources relative to producing electricity from
fossil fuels using the latest generation of technology. Not later than
June 30, 2006, the Comptroller shall report on such study to the
Committee on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate.

SEC. 1303. CREDIT FOR BUSINESS INSTALLATION OF QUALIFIED FUEL CELLS.

(a) In General.--Section 48(a)(3)(A) (defining energy property) is
amended by striking ``or'' at the end of clause (i), by adding ``or''
at the end of clause (ii), and by inserting after clause (ii) the
following new clause:
``(iii) qualified fuel cell property,''.
(b) Qualified Fuel Cell Property.--Section 48 (relating to energy
credit; reforestation credit) is amended by adding at the end the
following new subsection:
``(c) Qualified Fuel Cell Property.--For purposes of subsection
(a)(3)(A)(iii)--
``(1) In general.--The term `qualified fuel cell property'
means a fuel cell power plant which generates at least 0.5
kilowatt of electricity using an electrochemical process.
``(2) Limitation.--The energy credit with respect to any
qualified fuel cell property shall not exceed an amount equal
to $500 for each 0.5 kilowatt of capacity of such property.
``(3) Fuel cell power plant.--The term `fuel cell power
plant' means an integrated system, comprised of a fuel cell
stack assembly and associated balance of plant components,
which converts a fuel into electricity using electrochemical
means.
``(4) Termination.--The term `qualified fuel cell property'
shall not include any property placed in service after December
31, 2006.''.
(c) Energy Percentage.--Subparagraph (A) of section 48(a)(2)
(relating to energy percentage) is amended to read as follows:
``(A) In general.--The energy percentage is--
``(i) in the case of qualified fuel cell
property, 20 percent, and
``(ii) in the case of any other energy
property, 10 percent.''.
(d) Conforming Amendment.--Section 48(a)(1) is amended by inserting
``except as provided in subsection (c)(2),'' before ``the energy''.
(e) Effective Date.--The amendments made by this section shall
apply to periods after December 31, 2003, under rules similar to the
rules of section 48(m) of the Internal Revenue Code of 1986 (as in
effect on the day before the date of the enactment of the Revenue
Reconciliation Act of 1990).

SEC. 1304. CREDIT FOR ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

(a) In General.--Subpart A of part IV of subchapter A of chapter 1
(relating to nonrefundable personal credits), as amended by this Act,
is amended by inserting after section 25C the following new section:

``SEC. 25D. ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to 20 percent of the amount paid
or incurred by the taxpayer for qualified energy efficiency
improvements installed during such taxable year.
``(b) Limitations.--
``(1) Maximum credit.--The credit allowed by this section
with respect to a dwelling unit shall not exceed $2,000.
``(2) Prior credit amounts for taxpayer on same dwelling
taken into account.--If a credit was allowed to the taxpayer
under subsection (a) with respect to a dwelling unit in 1 or
more prior taxable years, the amount of the credit otherwise
allowable for the taxable year with respect to that dwelling
unit shall be reduced by the sum of the credits allowed under
subsection (a) to the taxpayer with respect to the dwelling
unit for all prior taxable years.
``(c) Qualified Energy Efficiency Improvements.--For purposes of
this section, the term `qualified energy efficiency improvements' means
any energy efficient building envelope component which meets the
prescriptive criteria for such component established by the 2000
International Energy Conservation Code, as such Code (including
supplements) is in effect on the date of the enactment of this section
(or, in the case of a metal roof with appropriate pigmented coatings
which meet the Energy Star program requirements), if--
``(1) such component is installed in or on a dwelling
unit--
``(A) located in the United States,
``(B) owned and used by the taxpayer as the
taxpayer's principal residence (within the meaning of
section 121), and
``(C) which has not been treated as a qualified new
energy efficient home for purposes of any credit
allowed under section 45G,
``(2) the original use of such component commences with the
taxpayer, and
``(3) such component reasonably can be expected to remain
in use for at least 5 years.
If the aggregate cost of such components with respect to any dwelling
unit exceeds $1,000, such components shall be treated as qualified
energy efficiency improvements only if such components are also
certified in accordance with subsection (d) as meeting such
prescriptive criteria.
``(d) Certification.--The certification described in subsection (c)
shall be--
``(1) determined on the basis of the technical
specifications or applicable ratings (including product
labeling requirements) for the measurement of energy efficiency
(based upon energy use or building envelope component
performance) for the energy efficient building envelope
component,
``(2) provided by a local building regulatory authority, a
utility, a manufactured home production inspection primary
inspection agency (IPIA), or an accredited home energy rating
system provider who is accredited by or otherwise authorized to
use approved energy performance measurement methods by the
Residential Energy Services Network (RESNET), and
``(3) made in writing in a manner which specifies in
readily verifiable fashion the energy efficient building
envelope components installed and their respective energy
efficiency levels.
``(e) Definitions and Special Rules.--For purposes of this
section--
``(1) Building envelope component.--The term `building
envelope component' means--
``(A) any insulation material or system which is
specifically and primarily designed to reduce the heat
loss or gain of a dwelling unit when installed in or on
such dwelling unit,
``(B) exterior windows (including skylights),
``(C) exterior doors, and
``(D) any metal roof installed on a dwelling unit,
but only if such roof has appropriate pigmented
coatings which are specifically and primarily designed
to reduce the heat gain of such dwelling unit.
``(2) Manufactured homes included.--The term `dwelling
unit' includes a manufactured home which conforms to Federal
Manufactured Home Construction and Safety Standards (section
3280 of title 24, Code of Federal Regulations).
``(3) Application of rules.--Rules similar to the rules
under paragraphs (3), (4), and (5) of section 25C(d) shall
apply.
``(f) Basis Adjustment.--For purposes of this subtitle, if a credit
is allowed under this section for any expenditure with respect to any
property, the increase in the basis of such property which would (but
for this subsection) result from such expenditure shall be reduced by
the amount of the credit so allowed.
``(g) Application of Section.--This section shall apply to
qualified energy efficiency improvements installed after December 31,
2003, and before January 1, 2007.''.
(b) Conforming Amendments.--
(1) Subsection (a) of section 1016, as amended by this Act,
is amended by striking ``and'' at the end of paragraph (28), by
striking the period at the end of paragraph (29) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(30) to the extent provided in section 25D(f), in the
case of amounts with respect to which a credit has been allowed
under section 25D.''.
(2) The table of sections for subpart A of part IV of
subchapter A of chapter 1, as amended by this Act, is amended
by inserting after the item relating to section 25C the
following new item:

``Sec. 25D. Energy efficiency improvements to existing homes.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after December 31, 2003.

SEC. 1305. CREDIT FOR CONSTRUCTION OF NEW ENERGY EFFICIENT HOMES.

(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business related credits) is amended by adding at the end
the following new section:

``SEC. 45G. NEW ENERGY EFFICIENT HOME CREDIT.

``(a) In General.--For purposes of section 38, in the case of an
eligible contractor with respect to a qualified new energy efficient
home, the credit determined under this section for the taxable year
with respect to such home is an amount equal to the aggregate adjusted
bases of all energy efficient property installed in such home during
construction of such home.
``(b) Limitations.--
``(1) Maximum credit.--
``(A) In general.--The credit allowed by this
section with respect to a dwelling unit shall not
exceed--
``(i) in the case of a dwelling unit
described in clause (i) or (iii) of subsection
(c)(3)(D), $1,000, and
``(ii) in the case of a dwelling unit
described in subsection (c)(3)(D)(ii), $2,000.
``(B) Prior credit amounts on same dwelling unit
taken into account.--If a credit was allowed under
subsection (a) with respect to a dwelling unit in 1 or
more prior taxable years, the amount of the credit
otherwise allowable for the taxable year with respect
to such dwelling unit shall be reduced by the sum of
the credits allowed under subsection (a) with respect
to the dwelling unit for all prior taxable years.
``(2) Coordination with certain credits.--For purposes of
this section--
``(A) the basis of any property referred to in
subsection (a) shall be reduced by that portion of the
basis of any property which is attributable to
qualified rehabilitation expenditures (as defined in
section 47(c)(2)) or to the energy percentage of energy
property (as determined under section 48(a)), and
``(B) expenditures taken into account under section
47 or 48(a) shall not be taken into account under this
section.
``(c) Definitions.--For purposes of this section--
``(1) Eligible contractor.--The term `eligible contractor'
means--
``(A) the person who constructed the qualified new
energy efficient home, or
``(B) in the case of a qualified new energy
efficient home which is a manufactured home, the
manufactured home producer of such home.
If more than 1 person is described in subparagraph (A) or (B)
with respect to any qualified new energy efficient home, such
term means the person designated as such by the owner of such
home.
``(2) Energy efficient property.--The term `energy
efficient property' means any energy efficient building
envelope component, and any energy efficient heating or cooling
equipment or system, which can, individually or in combination
with other components, result in a dwelling unit meeting the
requirements of this section.
``(3) Qualified new energy efficient home.--The term
`qualified new energy efficient home' means a dwelling unit--
``(A) located in the United States,
``(B) the construction of which is substantially
completed after December 31, 2003,
``(C) the original use of which, after such
construction, is reasonably expected to be as a
residence by the person who acquires such dwelling unit
from the eligible contractor,
``(D) which is--
``(i) certified to have a level of annual
heating and cooling energy consumption which is
at least 30 percent below the annual level of
heating and cooling energy consumption of a
comparable dwelling unit constructed in
accordance with the standards of chapter 4 of
the 2000 International Energy Conservation
Code, as such Code (including supplements) is
in effect on the date of the enactment of this
section, and to have building envelope
component improvements account for at least \1/
3\ of such 30 percent,
``(ii) certified to have a level of annual
heating and cooling energy consumption which is
at least 50 percent below such annual level and
to have building envelope component
improvements account for at least \1/5\ of such
50 percent, or
``(iii) a manufactured home which--
``(I) conforms to Federal
Manufactured Home Construction and
Safety Standards (section 3280 of title
24, Code of Federal Regulations), and
``(II) meets the applicable
standards required by the Administrator
of the Environmental Protection Agency
under the Energy Star Labeled Homes
program.
``(4) Construction.--The term `construction' includes
substantial reconstruction and rehabilitation.
``(5) Acquire.--The term `acquire' includes purchase and,
in the case of reconstruction and rehabilitation, such term
includes a binding written contract for such reconstruction or
rehabilitation.
``(6) Building envelope component.--The term `building
envelope component' means--
``(A) any insulation material or system which is
specifically and primarily designed to reduce the heat
loss or gain of a dwelling unit when installed in or on
such dwelling unit,
``(B) exterior windows (including skylights),
``(C) exterior doors, and
``(D) any metal roof installed on a dwelling unit,
but only if such roof has appropriate pigmented
coatings which--
``(i) are specifically and primarily
designed to reduce the heat gain of such
dwelling unit, and
``(ii) meet the Energy Star program
requirements.
``(d) Certification.--
``(1) Method of certification.--A certification described
in subsection (c)(3)(D) shall be determined in accordance with
guidance prescribed by the Secretary. Such guidance shall
specify procedures and methods for calculating energy and cost
savings.
``(2) Form.--A certification described in subsection
(c)(3)(D) shall be made in writing--
``(A) in a manner which specifies in readily
verifiable fashion the energy efficient building
envelope components and energy efficient heating or
cooling equipment installed and their respective rated
energy efficiency performance, and
``(B) in the case of a qualified new energy
efficient home which is a manufactured home,
accompanied by such documentation as required by the
Administrator of the Environmental Protection Agency
under the Energy Star Labeled Homes program.
``(e) Basis Adjustment.--For purposes of this subtitle, if a credit
is determined under this section for any expenditure with respect to
any property, the increase in the basis of such property which would
(but for this subsection) result from such expenditure shall be reduced
by the amount of the credit so determined.
``(f) Application of Section.--Subsection (a) shall apply to
qualified new energy efficient homes acquired during the period
beginning on January 1, 2004, and ending on December 31, 2006.''.
(b) Credit Made Part of General Business Credit.--Section 38(b)
(relating to current year business credit) is amended by striking
``plus'' at the end of paragraph (14), by striking the period at the
end of paragraph (15) and inserting ``, plus'', and by adding at the
end the following new paragraph:
``(16) the new energy efficient home credit determined
under section 45G(a).''.
(c) Basis Adjustment.--Subsection (a) of section 1016, as amended
by this Act, is amended by striking ``and'' at the end of paragraph
(29), by striking the period at the end of paragraph (30) and inserting
``, and'', and by adding at the end the following new paragraph:
``(31) to the extent provided in section 45G(e), in the
case of amounts with respect to which a credit has been allowed
under section 45G.''.
(d) Limitation on Carryback.--
(1) In general.--Subsection (d) of section 39 is amended to
read as follows:
``(d) Transitional Rule.--No portion of the unused business credit
for any taxable year which is attributable to a credit specified in
section 38(b) or any portion thereof may be carried back to any taxable
year before the first taxable year for which such specified credit or
such portion is allowable (without regard to subsection (a)).''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply with respect to taxable years ending after December
31, 2002.
(e) Deduction for Certain Unused Business Credits.--Section 196(c)
(defining qualified business credits) is amended by striking ``and'' at
the end of paragraph (10), by striking the period at the end of
paragraph (11) and inserting ``, and'', and by adding after paragraph
(11) the following new paragraph:
``(12) the new energy efficient home credit determined
under section 45G(a).''.
(f) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 is amended by adding at the end
the following new item:

``Sec. 45G. New energy efficient home credit.''.
(g) Effective Date.--The amendments made by this section shall
apply to taxable years ending after December 31, 2003.

SEC. 1306. ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM PROPERTY.

(a) In General.--Section 48(a)(3)(A) (defining energy property), as
amended by this Act, is amended by striking ``or'' at the end of clause
(ii), by adding ``or'' at the end of clause (iii), and by inserting
after clause (iii) the following new clause:
``(iv) combined heat and power system
property,''.
(b) Combined Heat and Power System Property.--Section 48 (relating
to energy credit; reforestation credit), as amended by this Act, is
amended by adding at the end the following new subsection:
``(d) Combined Heat and Power System Property.--For purposes of
subsection (a)(3)(A)(iv)--
``(1) Combined heat and power system property.--The term
`combined heat and power system property' means property
comprising a system--
``(A) which uses the same energy source for the
simultaneous or sequential generation of electrical
power, mechanical shaft power, or both, in combination
with the generation of steam or other forms of useful
thermal energy (including heating and cooling
applications),
``(B) which has an electrical capacity of not more
than 15 megawatts or a mechanical energy capacity of
not more than 2,000 horsepower or an equivalent
combination of electrical and mechanical energy
capacities,
``(C) which produces--
``(i) at least 20 percent of its total
useful energy in the form of thermal energy
which is not used to produce electrical or
mechanical power (or combination thereof), and
``(ii) at least 20 percent of its total
useful energy in the form of electrical or
mechanical power (or combination thereof),
``(D) the energy efficiency percentage of which
exceeds 60 percent, and
``(E) which is placed in service before January 1,
2007.
``(2) Special rules.--
``(A) Energy efficiency percentage.--For purposes
of this subsection, the energy efficiency percentage of
a system is the fraction--
``(i) the numerator of which is the total
useful electrical, thermal, and mechanical
power produced by the system at normal
operating rates, and expected to be consumed in
its normal application, and
``(ii) the denominator of which is the
lower heating value of the fuel sources for the
system.
``(B) Determinations made on btu basis.--The energy
efficiency percentage and the percentages under
paragraph (1)(C) shall be determined on a Btu basis.
``(C) Input and output property not included.--The
term `combined heat and power system property' does not
include property used to transport the energy source to
the facility or to distribute energy produced by the
facility.
``(D) Public utility property.--
``(i) Accounting rule for public utility
property.--If the combined heat and power
system property is public utility property (as
defined in section 168(i)(10)), the taxpayer
may only claim the credit under subsection (a)
if, with respect to such property, the taxpayer
uses a normalization method of accounting.
``(ii) Certain exception not to apply.--The
matter in subsection (a)(3) which follows
subparagraph (D) thereof shall not apply to
combined heat and power system property.
``(3) Systems using bagasse.--If a system is designed to
use bagasse for at least 90 percent of the energy source--
``(A) paragraph (1)(D) shall not apply, but
``(B) the amount of credit determined under
subsection (a) with respect to such system shall not
exceed the amount which bears the same ratio to such
amount of credit (determined without regard to this
paragraph) as the energy efficiency percentage of such
system bears to 60 percent.''.
(c) Effective Date.--The amendments made by this subsection shall
apply to periods after December 31, 2003, in taxable years ending after
such date, under rules similar to the rules of section 48(m) of the
Internal Revenue Code of 1986 (as in effect on the day before the date
of the enactment of the Revenue Reconciliation Act of 1990).

SEC. 1307. CREDIT FOR ENERGY EFFICIENT APPLIANCES.

(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business-related credits), as amended by this Act, is
amended by adding at the end the following new section:

``SEC. 45H. ENERGY EFFICIENT APPLIANCE CREDIT.

``(a) Allowance of Credit.--For purposes of section 38, the energy
efficient appliance credit determined under this section for the
taxable year is an amount equal to the sum of--
``(1) the tier I appliance amount, and
``(2) the tier II appliance amount,
with respect to qualified energy efficient appliances produced by the
taxpayer during the calendar year ending with or within the taxable
year.
``(b) Appliance Amounts.--For purposes of subsection (a)--
``(1) Tier i appliance amount.--The tier I appliance amount
is equal to--
``(A) $100, multiplied by
``(B) an amount (rounded to the nearest whole
number) equal to the applicable percentage of the
eligible production.
``(2) Tier ii appliance amount.--The tier II appliance
amount is equal to $150, multiplied by an amount equal to the
eligible production reduced by the amount determined under
paragraph (1)(B).
``(3) Applicable percentage.--The applicable percentage is
the percentage determined by dividing the tier I appliances
produced by the taxpayer during the calendar year by the sum of
the tier I and tier II appliances so produced.
``(4) Eligible production.--The eligible production of
qualified energy efficient appliances by the taxpayer for any
calendar year is the excess of--
``(A) the number of such appliances which are
produced by the taxpayer during such calendar year,
over
``(B) 110 percent of the average annual number of
such appliances which were produced by the taxpayer (or
any predecessor) during the preceding 3-calendar year
period.
``(c) Qualified Energy Efficient Appliance.--For purposes of this
section--
``(1) In general.--The term `qualified energy efficient
appliance' means any tier I appliance or tier II appliance
which is produced in the United States.
``(2) Tier i appliance.--The term `tier I appliance'
means--
``(A) a clothes washer which is produced with at
least a 1.50 MEF, and
``(B) a refrigerator which consumes at least 15
percent (20 percent in the case of a refrigerator
produced after 2006) less kilowatt hours per year than
the energy conservation standards for refrigerators
promulgated by the Department of Energy and effective
on July 1, 2001.
``(3) Tier ii appliance.--The term `tier II appliance'
means a refrigerator produced before 2007 which consumes at
least 20 percent less kilowatt hours per year than the energy
conservation standards described in paragraph (2)(B).
``(4) Clothes washer.--The term `clothes washer' means a
residential clothes washer, including a residential style coin
operated washer.
``(5) Refrigerator.--The term `refrigerator' means an
automatic defrost refrigerator-freezer which has an internal
volume of at least 16.5 cubic feet.
``(6) MEF.--The term `MEF' means Modified Energy Factor (as
determined by the Secretary of Energy).
``(7) Produced.--The term `produced' includes manufactured.
``(d) Limitation on Maximum Credit.--
``(1) In general.--The amount of credit allowed under
subsection (a) with respect to a taxpayer for any taxable year
shall not exceed $60,000,000, reduced by the amount of the
credit allowed under subsection (a) to the taxpayer (or any
predecessor) for any prior taxable year.
``(2) Limitation based on gross receipts.--The credit
allowed under subsection (a) with respect to a taxpayer for the
taxable year shall not exceed an amount equal to 2 percent of
the average annual gross receipts of the taxpayer for the 3
taxable years preceding the taxable year for which the credit
is determined.
``(3) Gross receipts.--For purposes of this subsection, the
rules of paragraphs (2) and (3) of section 448(c) shall apply.
``(e) Special Rules.--For purposes of this section--
``(1) In general.--Rules similar to the rules of
subsections (c), (d), and (e) of section 52 shall apply.
``(2) Controlled groups.--
``(A) In general.--All persons treated as a single
employer under subsection (a) or (b) of section 52 or
subsection (m) or (o) of section 414 shall be treated
as a single manufacturer.
``(B) Inclusion of foreign corporations.--For
purposes of subparagraph (A), in applying subsections
(a) and (b) of section 52 to this section, section 1563
shall be applied without regard to subsection (b)(2)(C)
thereof.
``(f) Verification.--The taxpayer shall submit such information or
certification as the Secretary, after consultation with the Secretary
of Energy, determines necessary to claim the credit amount under
subsection (a).
``(g) Termination.--This section shall not apply with respect to
appliances produced after December 31, 2007.''.
(b) Credit Made Part of General Business Credit.--Section 38(b)
(relating to current year business credit), as amended by this Act, is
amended by striking ``plus'' at the end of paragraph (15), by striking
the period at the end of paragraph (16) and inserting ``, plus'', and
by adding at the end the following new paragraph:
``(17) the energy efficient appliance credit determined
under section 45H(a).''.
(c) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1, as amended by this Act, is
amended by adding at the end the following new item:

``Sec. 45H. Energy efficient appliance credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to appliances produced after December 31, 2003, in taxable years
ending after such date.

SEC. 1308. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

(a) In General.--Part VI of subchapter B of chapter 1 (relating to
itemized deductions for individuals and corporations) is amended by
inserting after section 179A the following new section:

``SEC. 179B. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

``(a) In General.--There shall be allowed as a deduction an amount
equal to the cost of energy efficient commercial building property
placed in service during the taxable year.
``(b) Maximum Amount of Deduction.--The deduction under subsection
(a) with respect to any building for the taxable year and all prior
taxable years shall not exceed an amount equal to the product of--
``(1) $1.50, and
``(2) the square footage of the building.
``(c) Definitions.--For purposes of this section--
``(1) Energy efficient commercial building property.--The
term `energy efficient commercial building property' means
property--
``(A) which is installed on or in a building--
``(i) which is located in the United
States, and
``(ii) which is the type of structure to
which the Standard 90.1-2001 is applicable,
``(B) which is installed as part of--
``(i) the lighting systems,
``(ii) the heating, cooling, ventilation,
and hot water systems, or
``(iii) the building envelope, and
``(C) which is certified in accordance with
subsection (d)(4) as being installed as part of a plan
designed to reduce the total annual energy and power
costs with respect to the lighting systems, heating,
cooling, ventilation, and hot water systems of the
building by 50 percent or more in comparison to a
reference building which meets the minimum requirements
of Standard 90.1-2001 using methods of calculation
under subsection (d)(2).
``(2) Standard 90.1-2001.--The term `Standard 90.1-2001'
means Standard 90.1-2001 of the American Society of Heating,
Refrigerating, and Air Conditioning Engineers and the
Illuminating Engineering Society of North America (as in effect
on April 2, 2003).
``(d) Special Rules.--
``(1) Partial allowance.--
``(A) In general.--Except as provided in subsection
(f), in the case of a building placed in service on or
before the date of the enactment of this section, if--
``(i) the requirement of subsection
(c)(1)(C) is not met, but
``(ii) there is a certification in
accordance with subsection (d)(4) that any
system referred to in subsection (c)(1)(B)
satisfies the energy-savings targets
established by the Secretary under subparagraph
(B) with respect to such system,
then the requirement of subsection (c)(1)(C) shall be
treated as met with respect to such system, and the
deduction under subsection (a) shall be allowed with
respect to energy efficient commercial building
property installed as part of such system and as part
of a plan to meet such targets, except that subsection
(b) shall be applied to such property by substituting
`$.50' for `$1.50'.
``(B) Regulations.--The Secretary, after
consultation with the Secretary of Energy, shall
establish a target for each system described in
subsection (c)(1)(B) which, if such targets were met
for all such systems, the building would meet the
requirements of subsection (c)(1)(C).
``(2) Methods of calculation.--The Secretary, after
consultation with the Secretary of Energy, shall promulgate
regulations which describe in detail methods for calculating
and verifying energy and power cost for purposes of this
section.
``(3) Notice to owner.--Each certification required under
this section shall include an explanation to the building owner
regarding the energy efficiency features of the building and
its projected annual energy costs.
``(4) Certification.--
``(A) In general.--The Secretary shall prescribe
the manner and method for the making of certifications
under this section.
``(B) Procedures.--The Secretary shall include as
part of the certification process procedures for
inspection and testing by qualified individuals
described in subparagraph (C) to ensure compliance of
buildings with energy-savings plans and targets. Such
procedures shall be--
``(i) comparable, given the difference
between commercial and residential buildings,
to the requirements in the Mortgage Industry
National Accreditation Procedures for Home
Energy Rating Systems, and
``(ii) fuel neutral such that the same
energy efficiency measures allow a building to
be eligible for the deduction under this
section regardless of whether such building
uses a gas or oil furnace or boiler, an
electric heat pump, or other fuel source.
``(C) Qualified individuals.--Individuals qualified
to determine compliance shall be only those individuals
who are recognized by an organization certified by the
Secretary for such purposes.
``(e) Basis Reduction.--For purposes of this subtitle, if a
deduction is allowed under this section with respect to any energy
efficient commercial building property, the basis of such property
shall be reduced by the amount of the deduction so allowed.
``(f) Interim Rules for Lighting Systems.--Until such time as the
Secretary issues final regulations under subsection (d)(1)(B) with
respect to property which is part of a lighting system--
``(1) In general.--The lighting system target under
subsection (d)(1)(A)(ii) shall be a reduction in lighting power
density of 25 percent (50 percent in the case of a warehouse)
of the minimum requirements in Table 9.3.1.1 or Table 9.3.1.2
(not including additional interior lighting power allowances)
of Standard 90.1-2001.
``(2) Reduction in deduction if reduction less than 40
percent.--
``(A) In general.--If, with respect to the lighting
system of any building other than a warehouse, the
reduction in lighting power density of the lighting
system is not at least 40 percent, only the applicable
percentage of the amount of deduction otherwise
allowable under this section with respect to such
property shall be allowed.
``(B) Applicable percentage.--For purposes of
subparagraph (A), the applicable percentage is the
number of percentage points (not greater than 100)
equal to the sum of--
``(i) 50, and
``(ii) the amount which bears the same
ratio to 50 as the excess of the reduction of
lighting power density of the lighting system
over 25 percentage points bears to 15.
``(C) Exceptions.--This subsection shall not apply
to any system--
``(i) the controls and circuiting of which
do not comply fully with the mandatory and
prescriptive requirements of Standard 90.1-2001
and which do not include provision for bilevel
switching in all occupancies except hotel and
motel guest rooms, store rooms, restrooms, and
public lobbies, or
``(ii) which does not meet the minimum
requirements for calculated lighting levels as
set forth in the Illuminating Engineering
Society of North America Lighting Handbook,
Performance and Application, Ninth Edition,
2000.
``(g) Regulations.--The Secretary shall promulgate such regulations
as necessary--
``(1) to take into account new technologies regarding
energy efficiency and renewable energy for purposes of
determining energy efficiency and savings under this section,
and
``(2) to provide for a recapture of the deduction allowed
under this section if the plan described in subsection
(c)(1)(C) or (d)(1)(A) is not fully implemented.
``(h) Termination.--This section shall not apply with respect to
property placed in service after December 31, 2007.''.
(b) Conforming Amendments.--
(1) Section 1016(a), as amended by this section, is amended
by striking ``and'' at the end of paragraph (30), by striking
the period at the end of paragraph (31) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(32) to the extent provided in section 179B(e).''.
(2) Section 1245(a) is amended by inserting ``179B,'' after
``179A,'' both places it appears in paragraphs (2)(C) and
(3)(C).
(3) Section 1250(b)(3) is amended by inserting before the
period at the end of the first sentence ``or by section 179B''.
(4) Section 263(a)(1) is amended by striking ``or'' at the
end of subparagraph (G), by striking the period at the end of
subparagraph (H) and inserting ``, or'', and by inserting after
subparagraph (H) the following new subparagraph:
``(I) expenditures for which a deduction is allowed
under section 179B.''.
(5) Section 312(k)(3)(B) is amended by striking ``or 179A''
each place it appears in the heading and text and inserting ``,
179A, or 179B''.
(c) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1 is amended by inserting after section 179A
the following new item:

``Sec. 179B. Energy efficient commercial buildings deduction.''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act in taxable years ending after such date.

SEC. 1309. THREE-YEAR APPLICABLE RECOVERY PERIOD FOR DEPRECIATION OF
QUALIFIED ENERGY MANAGEMENT DEVICES.

(a) In General.--Section 168(e)(3)(A) (defining 3-year property) is
amended by striking ``and'' at the end of clause (ii), by striking the
period at the end of clause (iii) and inserting ``, and'', and by
adding at the end the following new clause:
``(iv) any qualified energy management
device.''.
(b) Definition of Qualified Energy Management Device.--Section
168(i) (relating to definitions and special rules) is amended by
inserting at the end the following new paragraph:
``(15) Qualified energy management device.--
``(A) In general.--The term `qualified energy
management device' means any energy management device
which is placed in service before January 1, 2008, by a
taxpayer who is a supplier of electric energy or a
provider of electric energy services.
``(B) Energy management device.--For purposes of
subparagraph (A), the term `energy management device'
means any meter or metering device which is used by the
taxpayer--
``(i) to measure and record electricity
usage data on a time-differentiated basis in at
least 4 separate time segments per day, and
``(ii) to provide such data on at least a
monthly basis to both consumers and the
taxpayer.''.
(c) Alternative System.--The table contained in section
168(g)(3)(B) is amended by inserting after the item relating to
subparagraph (A)(iii) the following:

``(A) (iv)..................................................      20''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act, in taxable years ending after such date.

SEC. 1310. CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR POWER
FACILITIES.

(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business related credits), as amended by this Act, is
amended by adding after section 45K the following new section:

``SEC. 45L. CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR POWER
FACILITIES.

``(a) General Rule.--For purposes of section 38, the advanced
nuclear power facility production credit of any taxpayer for any
taxable year is equal to the product of--
``(1) 1.8 cents, multiplied by
``(2) the kilowatt hours of electricity--
``(A) produced by the taxpayer at an advanced
nuclear power facility during the 8-year period
beginning on the date the facility was originally
placed in service, and
``(B) sold by the taxpayer to an unrelated person
during the taxable year.
``(b) National Limitation.--
``(1) In general.--The amount of credit which would (but
for this subsection and subsection (c)) be allowed with respect
to any facility for any taxable year shall not exceed the
amount which bears the same ratio to such amount of credit as--
``(A) the national megawatt capacity limitation
allocated to the facility, bears to
``(B) the total megawatt nameplate capacity of such
facility.
``(2) Amount of national limitation.--The national megawatt
capacity limitation shall be 6,000 megawatts.
``(3) Allocation of limitation.--The Secretary shall
allocate the national megawatt capacity limitation in such
manner as the Secretary may prescribe.
``(4) Regulations.--Not later than 6 months after the date
of the enactment of this section, the Secretary shall prescribe
such regulations as may be necessary or appropriate to carry
out the purposes of this subsection. Such regulations shall
provide a certification process under which the Secretary,
after consultation with the Secretary of Energy, shall approve
and allocate the national megawatt capacity limitation.
``(c) Other Limitations.--
``(1) Annual limitation.--The amount of the credit
allowable under subsection (a) (after the application of
subsection (b)) for any taxable year with respect to any
facility shall not exceed an amount which bears the same ratio
to $125,000,000 as--
``(A) the national megawatt capacity limitation
allocated under subsection (b) to the facility, bears
to
``(B) 1,000.
``(2) Other limitations.--Rules similar to the rules of
section 45(b) shall apply for purposes of this section, except
that paragraph (2) thereof shall not apply to the 1.8 cents
under subsection (a)(1).
``(d) Advanced Nuclear Power Facility.--For purposes of this
section--
``(1) In general.--The term `advanced nuclear power
facility' means any advanced nuclear facility--
``(A) which is owned by the taxpayer and which uses
nuclear energy to produce electricity, and
``(B) which is placed in service after the date of
the enactment of this paragraph and before January 1,
2021.
``(2) Advanced nuclear facility.--For purposes of paragraph
(1), the term `advanced nuclear facility' means any nuclear
facility the reactor design for which is approved after the
date of the enactment of this paragraph by the Nuclear
Regulatory Commission (and such design or a substantially
similar design of comparable capacity was not approved on or
before such date).
``(e) Other Rules to Apply.--Rules similar to the rules of
paragraphs (1), (2), (3), (4), and (5) of section 45(e) shall apply for
purposes of this section.''.
(b) Credit Treated as Business Credit.--Section 38(b), as amended
by this Act, is amended by striking ``plus'' at the end of paragraph
(20), by striking the period at the end of paragraph (21) and inserting
``, plus'', and by adding at the end the following:
``(22) the advanced nuclear power facility production
credit determined under section 45L(a).''.
(c) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1, as amended by this Act, is
amended by adding at the end the following:

``Sec. 45L. Credit for production from advanced nuclear power
facilities.''.
(d) Effective Date.--The amendments made by this section shall
apply to production in taxable years beginning after December 31, 2003.

PART II--FUELS AND ALTERNATIVE MOTOR VEHICLES

SEC. 1311. REPEAL OF 4.3-CENT MOTOR FUEL EXCISE TAXES ON RAILROADS AND
INLAND WATERWAY TRANSPORTATION WHICH REMAIN IN GENERAL
FUND.

(a) Taxes on Trains.--
(1) In general.--Subparagraph (A) of section 4041(a)(1) is
amended by striking ``or a diesel-powered train'' each place it
appears and by striking ``or train''.
(2) Conforming amendments.--
(A) Subparagraph (C) of section 4041(a)(1) is
amended by striking clause (ii) and by redesignating
clause (iii) as clause (ii).
(B) Subparagraph (C) of section 4041(b)(1) is
amended by striking all that follows ``section
6421(e)(2)'' and inserting a period.
(C) Subsection (d) of section 4041 is amended by
redesignating paragraph (3) as paragraph (4) and by
inserting after paragraph (2) the following new
paragraph:
``(3) Diesel fuel used in trains.--There is hereby imposed
a tax of 0.1 cent per gallon on any liquid other than gasoline
(as defined in section 4083)--
``(A) sold by any person to an owner, lessee, or
other operator of a diesel-powered train for use as a
fuel in such train, or
``(B) used by any person as a fuel in a diesel-
powered train unless there was a taxable sale of such
fuel under subparagraph (A).
No tax shall be imposed by this paragraph on the sale or use of
any liquid if tax was imposed on such liquid under section
4081.''.
(D) Subsection (f) of section 4082 is amended by
striking ``section 4041(a)(1)'' and inserting
``subsections (d)(3) and (a)(1) of section 4041,
respectively''.
(E) Paragraph (3) of section 4083(a) is amended by
striking ``or a diesel-powered train''.
(F) Paragraph (3) of section 6421(f) is amended to
read as follows:
``(3) Gasoline used in trains.--In the case of gasoline
used as a fuel in a train, this section shall not apply with
respect to the Leaking Underground Storage Tank Trust Fund
financing rate under section 4081.''.
(G) Paragraph (3) of section 6427(l) is amended to
read as follows:
``(3) Refund of certain taxes on fuel used in diesel-
powered trains.--For purposes of this subsection, the term
`nontaxable use' includes fuel used in a diesel-powered train.
The preceding sentence shall not apply to the tax imposed by
section 4041(d) and the Leaking Underground Storage Tank Trust
Fund financing rate under section 4081 except with respect to
fuel sold for exclusive use by a State or any political
subdivision thereof.''.
(b) Fuel Used on Inland Waterways.--
(1) In general.--Paragraph (1) of section 4042(b) is
amended by adding ``and'' at the end of subparagraph (A), by
striking ``, and'' at the end of subparagraph (B) and inserting
a period, and by striking subparagraph (C).
(2) Conforming amendment.--Paragraph (2) of section 4042(b)
is amended by striking subparagraph (C).
(c) Effective Date.--The amendments made by this section shall take
effect on January 1, 2004.

SEC. 1312. REDUCED MOTOR FUEL EXCISE TAX ON CERTAIN MIXTURES OF DIESEL
FUEL.

(a) In General.--Paragraph (2) of section 4081(a) is amended by
adding at the end the following:
``(C) Diesel-water fuel emulsion.--In the case of
diesel-water fuel emulsion at least 14 percent of which
is water and with respect to which the emulsion
additive is registered by a United States manufacturer
with the Environmental Protection Agency pursuant to
section 211 of the Clean Air Act (as in effect on March
31, 2003), subparagraph (A)(iii) shall be applied by
substituting `19.7 cents' for `24.3 cents'.''.
(b) Special Rules for Diesel-Water Fuel Emulsions.--
(1) Refunds for tax-paid purchases.--Section 6427 is
amended by redesignating subsections (m) through (p) as
subsections (n) through (q), respectively, and by inserting
after subsection (l) the following new subsection:
``(m) Diesel Fuel Used to Produce Emulsion.--
``(1) In general.--Except as provided in subsection (k), if
any diesel fuel on which tax was imposed by section 4081 at the
regular tax rate is used by any person in producing an emulsion
described in section 4081(a)(2)(C) which is sold or used in
such person's trade or business, the Secretary shall pay
(without interest) to such person an amount equal to the excess
of the regular tax rate over the incentive tax rate with
respect to such fuel.
``(2) Definitions.--For purposes of paragraph (1)--
``(A) Regular tax rate.--The term `regular tax
rate' means the aggregate rate of tax imposed by
section 4081 determined without regard to section
4081(a)(2)(C).
``(B) Incentive tax rate.--The term `incentive tax
rate' means the aggregate rate of tax imposed by
section 4081 determined with regard to section
4081(a)(2)(C).''.
(2) Later separation of fuel.--
(A) In general.--Section 4081 (relating to
imposition of tax) is amended by redesignating
subsections (d) and (e) as subsections (e) and (f),
respectively, and by inserting after subsection (c) the
following new subsection:
``(d) Later Separation of Fuel From Diesel-Water Fuel Emulsion.--If
any person separates the taxable fuel from a diesel-water fuel emulsion
on which tax was imposed under subsection (a) at a rate determined
under subsection (a)(2)(C) (or with respect to which a credit or
payment was allowed or made by reason of section 6427), such person
shall be treated as the refiner of such taxable fuel. The amount of tax
imposed on any removal of such fuel by such person shall be reduced by
the amount of tax imposed (and not credited or refunded) on any prior
removal or entry of such fuel.''.
(B) Conforming amendment.--Subsection (d) of
section 6416 is amended by striking ``section 4081(e)''
and inserting ``section 4081(f)''.
(c) Effective Date.--The amendments made by this section shall take
effect on January 1, 2004.

SEC. 1313. SMALL ETHANOL PRODUCER CREDIT.

(a) Allocation of Alcohol Fuels Credit to Patrons of a
Cooperative.--Section 40(g) (relating to definitions and special rules
for eligible small ethanol producer credit) is amended by adding at the
end the following new paragraph:
``(6) Allocation of small ethanol producer credit to
patrons of cooperative.--
``(A) Election to allocate.--
``(i) In general.--In the case of a
cooperative organization described in section
1381(a), any portion of the credit determined
under subsection (a)(3) for the taxable year
may, at the election of the organization, be
apportioned pro rata among patrons of the
organization on the basis of the quantity or
value of business done with or for such patrons
for the taxable year.
``(ii) Form and effect of election.--An
election under clause (i) for any taxable year
shall be made on a timely filed return for such
year. Such election, once made, shall be
irrevocable for such taxable year.
``(B) Treatment of organizations and patrons.--The
amount of the credit apportioned to patrons under
subparagraph (A)--
``(i) shall not be included in the amount
determined under subsection (a) with respect to
the organization for the taxable year, and
``(ii) shall be included in the amount
determined under subsection (a) for the taxable
year of each patron for which the patronage
dividends for the taxable year described in
subparagraph (A) are included in gross income.
``(C) Special rule.--If the amount of a credit
which has been apportioned to any patron under this
paragraph is decreased for any reason--
``(i) such amount shall not increase the
tax imposed on such patron, and
``(ii) the tax imposed by this chapter on
such organization shall be increased by such
amount.
The increase under clause (ii) shall not be treated as
tax imposed by this chapter for purposes of determining
the amount of any credit under this chapter or for
purposes of section 55.''.
(b) Definition of Small Ethanol Producer.--Section 40(g) (relating
to definitions and special rules for eligible small ethanol producer
credit) is amended by striking ``30,000,000'' each place it appears and
inserting ``60,000,000''.
(c) Conforming Amendment.--Section 1388 (relating to definitions
and special rules for cooperative organizations) is amended by adding
at the end the following new subsection:
``(k) Cross Reference.--For provisions relating to the
apportionment of the alcohol fuels credit between cooperative
organizations and their patrons, see section 40(g)(6).''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.

SEC. 1314. INCENTIVES FOR BIODIESEL.

(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business related credits) is amended by inserting after
section 40 the following new section:

``SEC. 40A. BIODIESEL USED AS FUEL.

``(a) General Rule.--For purposes of section 38, the biodiesel
fuels credit determined under this section for the taxable year is an
amount equal to the sum of--
``(1) the biodiesel mixture credit, plus
``(2) the biodiesel credit.
``(b) Definition of Biodiesel Mixture Credit and Biodiesel
Credit.--For purposes of this section--
``(1) Biodiesel mixture credit.--
``(A) In general.--The biodiesel mixture credit of
any taxpayer for any taxable year is 50 cents for each
gallon of biodiesel used by the taxpayer in the
production of a qualified biodiesel mixture.
``(B) Qualified biodiesel mixture.--The term
`qualified biodiesel mixture' means a mixture of
biodiesel and a taxable fuel (within the meaning of
section 4083(a)(1)) which--
``(i) is sold by the taxpayer producing
such mixture to any person for use as a fuel,
or
``(ii) is used as a fuel by the taxpayer
producing such mixture.
``(C) Sale or use must be in trade or business,
etc.--Biodiesel used in the production of a qualified
biodiesel mixture shall be taken into account--
``(i) only if the sale or use described in
subparagraph (B) is in a trade or business of
the taxpayer, and
``(ii) for the taxable year in which such
sale or use occurs.
``(D) Casual off-farm production not eligible.--No
credit shall be allowed under this section with respect
to any casual off-farm production of a qualified
biodiesel mixture.
``(2) Biodiesel credit.--
``(A) In general.--The biodiesel credit of any
taxpayer for any taxable year is 50 cents for each
gallon of biodiesel which is not in a mixture and which
during the taxable year--
``(i) is used by the taxpayer as a fuel in
a trade or business, or
``(ii) is sold by the taxpayer at retail to
a person and placed in the fuel tank of such
person's vehicle.
``(B) User credit not to apply to biodiesel sold at
retail.--No credit shall be allowed under subparagraph
(A)(i) with respect to any biodiesel which was sold in
a retail sale described in subparagraph (A)(ii).
``(3) Credit for agri-biodiesel.--In the case of any
biodiesel which is agri-biodiesel, paragraphs (1)(A) and (2)(A)
shall be applied by substituting `$1.00' for `50 cents'.
``(4) Certification for biodiesel.--No credit shall be
allowed under this section unless the taxpayer obtains a
certification (in such form and manner as prescribed by the
Secretary) from the producer of the biodiesel which identifies
the product produced and the percentage of biodiesel and agri-
biodiesel in the product.
``(c) Coordination With Credit Against Excise Tax.--The amount of
the credit determined under this section with respect to any biodiesel
shall be properly reduced to take into account any benefit provided
with respect to such biodiesel solely by reason of the application of
section 6426.
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Biodiesel.--The term `biodiesel' means the monoalkyl
esters of long chain fatty acids derived from plant or animal
matter which meet--
``(A) the registration requirements for fuels and
fuel additives established by the Environmental
Protection Agency under section 211 of the Clean Air
Act (42 U.S.C. 7545), and
``(B) the requirements of the American Society of
Testing and Materials D6751.
``(2) Agri-biodiesel.--The term `agri-biodiesel' means
biodiesel derived solely from virgin oils, including esters
derived from virgin vegetable oils from corn, soybeans,
sunflower seeds, cottonseeds, canola, crambe, rapeseeds,
safflowers, flaxseeds, rice bran, and mustard seeds, and from
animal fats.
``(3) Mixture or biodiesel not used as a fuel, etc.--
``(A) Mixtures.--If--
``(i) any credit was determined under this
section with respect to biodiesel used in the
production of any qualified biodiesel mixture,
and
``(ii) any person--
``(I) separates the biodiesel from
the mixture, or
``(II) without separation, uses the
mixture other than as a fuel,
then there is hereby imposed on such person a tax equal
to the product of the rate applicable under subsection
(b)(1)(A) and the number of gallons of such biodiesel
in such mixture.
``(B) Biodiesel.--If--
``(i) any credit was determined under this
section with respect to the retail sale of any
biodiesel, and
``(ii) any person mixes such biodiesel or
uses such biodiesel other than as a fuel,
then there is hereby imposed on such person a tax equal
to the product of the rate applicable under subsection
(b)(2)(A) and the number of gallons of such biodiesel.
``(C) Applicable laws.--All provisions of law,
including penalties, shall, insofar as applicable and
not inconsistent with this section, apply in respect of
any tax imposed under subparagraph (A) or (B) as if
such tax were imposed by section 4081 and not by this
chapter.
``(4) Pass-thru in the case of estates and trusts.--Under
regulations prescribed by the Secretary, rules similar to the
rules of subsection (d) of section 52 shall apply.
``(e) Termination.--This section shall not apply to any sale or use
after December 31, 2005.''.
(b) Credit Treated as Part of General Business Credit.--Section
38(b) (relating to current year business credit) is amended by striking
``plus'' at the end of paragraph (16), by striking the period at the
end of paragraph (17) and inserting ``, plus'', and by adding at the
end the following new paragraph:
``(18) the biodiesel fuels credit determined under section
40A(a).''.
(c) Conforming Amendments.--
(1)(A) Section 87 is amended to read as follows:

``SEC. 87. ALCOHOL AND BIODIESEL FUELS CREDITS.

``Gross income includes--
``(1) the amount of the alcohol fuels credit determined
with respect to the taxpayer for the taxable year under section
40(a), and
``(2) the biodiesel fuels credit determined with respect to
the taxpayer for the taxable year under section 40A(a).''.
(B) The item relating to section 87 in the table of
sections for part II of subchapter B of chapter 1 is amended by
striking ``fuel credit'' and inserting ``and biodiesel fuels
credits''.
(2) Section 196(c), as amended by this Act, is amended by
striking ``and'' at the end of paragraph (11), by striking the
period at the end of paragraph (12) and inserting ``, and'',
and by adding at the end the following new paragraph:
``(13) the biodiesel fuels credit determined under section
40A(a).''.
(3) The table of sections for subpart D of part IV of
subchapter A of chapter 1 is amended by adding after the item
relating to section 40 the following new item:

``Sec. 40A. Biodiesel used as fuel.''.
(d) Effective Date.--The amendments made by this section shall
apply to fuel produced, and sold or used, after December 31, 2003, in
taxable years ending after such date.

SEC. 1315. ALCOHOL FUEL AND BIODIESEL MIXTURES EXCISE TAX CREDIT.

(a) In General.--Subchapter B of chapter 65 (relating to rules of
special application) is amended by inserting after section 6425 the
following new section:

``SEC. 6426. CREDIT FOR ALCOHOL FUEL AND BIODIESEL MIXTURES.

``(a) Allowance of Credits.--There shall be allowed as a credit
against the tax imposed by section 4081 an amount equal to the sum of--
``(1) the alcohol fuel mixture credit, plus
``(2) the biodiesel mixture credit.
``(b) Alcohol Fuel Mixture Credit.--
``(1) In general.--For purposes of this section, the
alcohol fuel mixture credit is the product of the applicable
amount and the number of gallons of alcohol used by the
taxpayer in producing any alcohol fuel mixture for sale or use
in a trade or business of the taxpayer.
``(2) Applicable amount.--For purposes of this subsection--
``(A) In general.--Except as provided in
subparagraph (B), the applicable amount is 52 cents (51
cents in the case of any sale or use after 2004).
``(B) Mixtures not containing ethanol.--In the case
of an alcohol fuel mixture in which none of the alcohol
consists of ethanol, the applicable amount is 60 cents.
``(3) Alcohol fuel mixture.--For purposes of this
subsection, the term `alcohol fuel mixture' means a mixture of
alcohol and a taxable fuel which--
``(A) is sold by the taxpayer producing such
mixture to any person for use as a fuel,
``(B) is used as a fuel by the taxpayer producing
such mixture, or
``(C) is removed from the refinery by a person
producing such mixture.
``(4) Other definitions.--For purposes of this subsection--
``(A) Alcohol.--The term `alcohol' includes
methanol and ethanol but does not include--
``(i) alcohol produced from petroleum,
natural gas, or coal (including peat), or
``(ii) alcohol with a proof of less than
190 (determined without regard to any added
denaturants).
Such term also includes an alcohol gallon equivalent of
ethyl tertiary butyl ether or other ethers produced
from such alcohol.
``(B) Taxable fuel.--The term `taxable fuel' has
the meaning given such term by section 4083(a)(1).
``(5) Termination.--This subsection shall not apply to any
sale, use, or removal for any period after December 31, 2010.
``(c) Biodiesel Mixture Credit.--
``(1) In general.--For purposes of this section, the
biodiesel mixture credit is the product of the applicable
amount and the number of gallons of biodiesel used by the
taxpayer in producing any biodiesel mixture for sale or use in
a trade or business of the taxpayer.
``(2) Applicable amount.--For purposes of this subsection--
``(A) In general.--Except as provided in
subparagraph (B), the applicable amount is 50 cents.
``(B) Amount for agri-biodiesel.--In the case of
any biodiesel which is agri-biodiesel, the applicable
amount is $1.00.
``(3) Biodiesel mixture.--For purposes of this section, the
term `biodiesel mixture' means a mixture of biodiesel and a
taxable fuel which--
``(A) is sold by the taxpayer producing such
mixture to any person for use as a fuel,
``(B) is used as a fuel by the taxpayer producing
such mixture, or
``(C) is removed from the refinery by a person
producing such mixture.
``(4) Certification for biodiesel.--No credit shall be
allowed under this section unless the taxpayer obtains a
certification (in such form and manner as prescribed by the
Secretary) from the producer of the biodiesel which identifies
the product produced and the percentage of biodiesel and agri-
biodiesel in the product.
``(5) Other definitions.--Any term used in this subsection
which is also used in section 40A shall have the meaning given
such term by section 40A.
``(6) Termination.--This subsection shall not apply to any
sale, use, or removal for any period after December 31, 2005.
``(d) Mixture not Used as a Fuel, Etc.--
``(1) Imposition of tax.--If--
``(A) any credit was determined under this section
with respect to alcohol or biodiesel used in the
production of any alcohol fuel mixture or biodiesel
mixture, respectively, and
``(B) any person--
``(i) separates the alcohol or biodiesel
from the mixture, or
``(ii) without separation, uses the mixture
other than as a fuel,
then there is hereby imposed on such person a tax equal
to the product of the applicable amount and the number
of gallons of such alcohol or biodiesel.
``(2) Applicable laws.--All provisions of law, including
penalties, shall, insofar as applicable and not inconsistent
with this section, apply in respect of any tax imposed under
paragraph (1) as if such tax were imposed by section 4081 and
not by this section.
``(e) Coordination With Exemption From Excise Tax.--Rules similar
to the rules under section 40(c) shall apply for purposes of this
section.''.
(b) Registration Requirement.--Section 4101(a) (relating to
registration) is amended by inserting ``and every person producing
biodiesel (as defined in section 40A(d)(1)) or alcohol (as defined in
section 6426(b)(4)(A))'' after ``4091''.
(c) Additional Amendments.--
(1) Section 40(c) is amended by striking ``or section
4091(c)'' and inserting ``section 4091(c), or section 6426''.
(2) Section 40(e)(1) is amended--
(A) by striking ``2007'' in subparagraph (A) and
inserting ``2010'', and
(B) by striking ``2008'' in subparagraph (B) and
inserting ``2011''.
(3) Section 40(h) is amended--
(A) by striking ``2007'' in paragraph (1) and
inserting ``2010'', and
(B) by striking ``, 2006, or 2007'' in the table
contained in paragraph (2) and inserting ``through
2010''.
(4)(A) Subpart C of part III of subchapter A of chapter 32
is amended by adding at the end the following new section:

``SEC. 4104. INFORMATION REPORTING FOR PERSONS CLAIMING CERTAIN TAX
BENEFITS.

``(a) In General.--The Secretary shall require any person claiming
tax benefits under the provisions of section 34, 40, 40A, 4041(b)(2),
4041(k), 4081(c), 6426, or 6427(f) to file a quarterly return (in such
manner as the Secretary may prescribe) providing such information
relating to such benefits and the coordination of such benefits as the
Secretary may require to ensure the proper administration and use of
such benefits.
``(b) Enforcement.--With respect to any person described in
subsection (a) and subject to registration requirements under this
title, rules similar to rules of section 4222(c) shall apply with
respect to any requirement under this section.''.
(B) The table of sections for subpart C of part III of
subchapter A of chapter 32 is amended by adding at the end the
following new item:

``Sec. 4104. Information reporting for persons claiming certain tax
benefits.''.
(5) Section 6427(i)(3) is amended--
(A) by adding at the end of subparagraph (A) the
following new flush sentence:
``In the case of an electronic claim, this subparagraph
shall be applied without regard to clause (i).'', and
(B) by striking ``20 days of the date of the filing
of such claim'' in subparagraph (B) and inserting ``45
days of the date of the filing of such claim (20 days
in the case of an electronic claim)''.
(6) Section 9503(b)(1) is amended by adding at the end the
following new flush sentence:
``For purposes of this paragraph, taxes received under sections
4041 and 4081 shall be determined without reduction for credits
under section 6426.''.
(d) Clerical Amendment.--The table of sections for subchapter B of
chapter 65 is amended by inserting after the item relating to section
6425 the following new item:

``Sec. 6426. Credit for alcohol fuel and biodiesel mixtures.''.
(e) Effective Dates.--
(1) In general.--Except as provided in paragraphs (2) and
(3), the amendments made by this section shall apply to fuel
sold, used, or removed after December 31, 2003.
(2) Subsection (c)(4).--The amendments made by subsection
(c)(4) shall take effect on January 1, 2004.
(3) Subsection (c)(5).--The amendments made by subsection
(c)(5) shall apply to claims filed after December 31, 2004.
(f) Format for Filing.--The Secretary of the Treasury shall
prescribe the electronic format for filing claims described in section
6427(i)(3)(B) of the Internal Revenue Code of 1986 (as amended by
subsection (c)(5)(A)) not later than December 31, 2004.

SEC. 1316. NONAPPLICATION OF EXPORT EXEMPTION TO DELIVERY OF FUEL TO
MOTOR VEHICLES REMOVED FROM UNITED STATES.

(a) In General.--Section 4221(d)(2) (defining export) is amended by
adding at the end the following new sentence: ``Such term does not
include the delivery of a taxable fuel (as defined in section
4083(a)(1)) into a fuel tank of a motor vehicle which is shipped or
driven out of the United States.''.
(b) Conforming Amendments.--
(1) Section 4041(g) (relating to other exemptions) is
amended by adding at the end the following new sentence:
``Paragraph (3) shall not apply to the sale for delivery of a
liquid into a fuel tank of a motor vehicle which is shipped or
driven out of the United States.''.
(2) Clause (iv) of section 4081(a)(1)(A) (relating to tax
on removal, entry, or sale) is amended by inserting ``or at a
duty-free sales enterprise (as defined in section 555(b)(8) of
the Tariff Act of 1930)'' after ``section 4101''.
(c) Effective Date.--The amendments made by this section shall
apply to sales or deliveries made after the date of the enactment of
this Act.

SEC. 1317. REPEAL OF PHASEOUTS FOR QUALIFIED ELECTRIC VEHICLE CREDIT
AND DEDUCTION FOR CLEAN FUEL-VEHICLES.

(a) Credit for Qualified Electric Vehicles.--Subsection (b) of
section 30 (relating to limitations) is amended by striking paragraph
(2) and redesignating paragraph (3) as paragraph (2).
(b) Deduction for Clean-Fuel Vehicles and Certain Refueling
Property.--Paragraph (1) of section 179A(b) (relating to qualified
clean-fuel vehicle property) is amended to read as follows:
``(1) Qualified clean-fuel vehicle property.--The cost
which may be taken into account under subsection (a)(1)(A) with
respect to any motor vehicle shall not exceed--
``(A) in the case of a motor vehicle not described
in subparagraph (B) or (C), $2,000,
``(B) in the case of any truck or van with a gross
vehicle weight rating greater than 10,000 pounds but
not greater than 26,000 pounds, $5,000, or
``(C) $50,000 in the case of--
``(i) a truck or van with a gross vehicle
weight rating greater than 26,000 pounds, or
``(ii) any bus which has a seating capacity
of at least 20 adults (not including the
driver).''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act.

SEC. 1318. ALTERNATIVE MOTOR VEHICLE CREDIT.

(a) In General.--Subpart B of part IV of subchapter A of chapter 1
(relating to foreign tax credit, etc.) is amended by adding at the end
the following:

``SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.

``(a) Allowance of Credit.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year an amount
equal to the sum of--
``(1) the new qualified fuel cell motor vehicle credit
determined under subsection (b),
``(2) the new advanced lean burn technology motor vehicle
credit determined under subsection (c),
``(3) the new qualified hybrid motor vehicle credit
determined under subsection (d), and
``(4) the new qualified alternative fuel motor vehicle
credit determined under subsection (e).
``(b) New Qualified Fuel Cell Motor Vehicle Credit.--
``(1) In general.--For purposes of subsection (a), the new
qualified fuel cell motor vehicle credit determined under this
subsection with respect to a new qualified fuel cell motor
vehicle placed in service by the taxpayer during the taxable
year shall be determined in accordance with the following
table:

``In the case of a vehicle which     The new qualified fuel cell motor
has a gross vehicle weight                  vehicle credit is--
rating of--
Not more than 8,500 lbs................................  $4,000
More than 8,500 lbs but not more than 14,000 lbs....... $10,000
More than 14,000 lbs but not more than 26,000 lbs...... $20,000
More than 26,000 lbs...................................$40,000.
``(2) Increase for fuel efficiency.--
``(A) In general.--The amount determined under
paragraph (1) with respect to a new qualified fuel cell
motor vehicle which is a passenger automobile or light
truck shall be increased by the additional credit
amount.
``(B) Additional credit amount.--For purposes of
subparagraph (A), the additional credit amount shall be
determined in accordance with the following table:

``In the case of a vehicle which      The additional credit amount is--
achieves a fuel economy
(expressed as a percentage
of the 2002 model year city
fuel economy) of--
At least 150 percent but less than 175 percent.........  $1,000
At least 175 percent but less than 200 percent.........  $1,500
At least 200 percent but less than 225 percent.........  $2,000
At least 225 percent but less than 250 percent.........  $2,500
At least 250 percent but less than 275 percent.........  $3,000
At least 275 percent but less than 300 percent.........  $3,500
At least 300 percent................................... $4,000.
``(3) New qualified fuel cell motor vehicle.--For purposes
of this subsection, the term `new qualified fuel cell motor
vehicle' means a motor vehicle--
``(A) which is propelled by power derived from one
or more cells which 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,
``(B) which, in the case of a passenger automobile
or light truck, has received--
``(i) a certificate of conformity under the
Clean Air Act and meets or exceeds the
equivalent qualifying California low emission
vehicle standard under section 243(e)(2) of the
Clean Air Act for that make and model year, and
``(ii) a certificate that such vehicle
meets or exceeds the Bin 5 Tier II emission
standard established in regulations prescribed
by the Administrator of the Environmental
Protection Agency under section 202(i) of the
Clean Air Act for that make and model year
vehicle,
``(C) the original use of which commences with the
taxpayer,
``(D) which is acquired for use or lease by the
taxpayer and not for resale, and
``(E) which is made by a manufacturer.
``(c) New Advanced Lean Burn Technology Motor Vehicle Credit.--
``(1) In general.--For purposes of subsection (a), the new
advanced lean burn technology motor vehicle credit determined
under this subsection with respect to a new advanced lean burn
technology motor vehicle placed in service by the taxpayer
during the taxable year is the credit amount determined under
paragraph (2).
``(2) Credit amount.--
``(A) Fuel economy.--The credit amount determined
under this paragraph shall be determined in accordance
with the following table:

``In the case of a vehicle which                 The credit amount is--
achieves a fuel economy
(expressed as a percentage
of the 2002 model year city
fuel economy) of--
At least 125 percent but less than 150 percent.........    $400
At least 150 percent but less than 175 percent.........    $800
At least 175 percent but less than 200 percent.........  $1,200
At least 200 percent but less than 225 percent.........  $1,600
At least 225 percent but less than 250 percent.........  $2,000
At least 250 percent................................... $2,400.
``(B) Conservation credit.--The amount determined
under subparagraph (A) with respect to a new advanced
lean burn technology motor vehicle shall be increased
by the conservation credit amount determined in
accordance with the following table:

``In the case of a vehicle which    The conservation credit amount is--
achieves a lifetime fuel
savings (expressed in
gallons of gasoline) of--
At least 1,200 but less than 1,800.....................    $250
At least 1,800 but less than 2,400.....................    $500
At least 2,400 but less than 3,000.....................    $750
At least 3,000......................................... $1,000.
``(3) New advanced lean burn technology motor vehicle.--For
purposes of this subsection, the term `new advanced lean burn
technology motor vehicle' means a passenger automobile or a
light truck--
``(A) with an internal combustion engine which--
``(i) is designed to operate primarily
using more air than is necessary for complete
combustion of the fuel,
``(ii) incorporates direct injection,
``(iii) achieves at least 125 percent of
the 2002 model year city fuel economy,
``(iv) for 2004 and later model vehicles,
has received a certificate that such vehicle
meets or exceeds--
``(I) in the case of a vehicle
having a gross vehicle weight rating of
6,000 pounds or less, the Bin 5 Tier II
emission standard established in
regulations prescribed by the
Administrator of the Environmental
Protection Agency under section 202(i)
of the Clean Air Act for that make and
model year vehicle, and
``(II) in the case of a vehicle
having a gross vehicle weight rating of
more than 6,000 pounds but not more
than 8,500 pounds, the Bin 8 Tier II
emission standard which is so
established.
``(B) the original use of which commences with the
taxpayer,
``(C) which is acquired for use or lease by the
taxpayer and not for resale, and
``(D) which is made by a manufacturer.
``(4) Lifetime fuel savings.--For purposes of this
subsection, the term `lifetime fuel savings' means, in the case
of any new advanced lean burn technology motor vehicle, an
amount equal to the excess (if any) of--
``(A) 120,000 divided by the 2002 model year city
fuel economy for the vehicle inertia weight class, over
``(B) 120,000 divided by the city fuel economy for
such vehicle.
``(d) New Qualified Hybrid Motor Vehicle Credit.--
``(1) In general.--For purposes of subsection (a), the new
qualified hybrid motor vehicle credit determined under this
subsection with respect to a new qualified hybrid motor vehicle
placed in service by the taxpayer during the taxable year is
the credit amount determined under paragraph (2).
``(2) Credit amount.--
``(A) Credit amount for passenger automobiles and
light trucks.--In the case of a new qualified hybrid
motor vehicle which is a passenger automobile or light
truck and which has a gross vehicle weight rating of
not more than 8,500 pounds, the amount determined under
this paragraph is the sum of the amounts determined
under clauses (i) and (ii).
``(i) Fuel economy.--The amount determined
under this clause is the amount which would be
determined under subsection (c)(2)(A) if such
vehicle were a vehicle referred to in such
subsection.
``(ii) Conservation credit.--The amount
determined under this clause is the amount
which would be determined under subsection
(c)(2)(B) if such vehicle were a vehicle
referred to in such subsection.
``(B) Credit amount for other motor vehicles.--
``(i) In general.--In the case of any new
qualified hybrid motor vehicle to which
subparagraph (A) does not apply, the amount
determined under this paragraph is the amount
equal to the applicable percentage of the
qualified incremental hybrid cost of the
vehicle as certified under clause (v).
``(ii) Applicable percentage.--For purposes
of clause (i), the applicable percentage is--
``(I) 20 percent if the vehicle
achieves an increase in city fuel
economy relative to a comparable
vehicle of at least 30 percent but less
than 40 percent,
``(II) 30 percent if the vehicle
achieves such an increase of at least
40 percent but less than 50 percent,
and
``(III) 40 percent if the vehicle
achieves such an increase of at least
50 percent.
``(iii) Qualified incremental hybrid
cost.--For purposes of this subparagraph, the
qualified incremental hybrid cost of any
vehicle is equal to the amount of the excess of
the manufacturer's suggested retail price for
such vehicle over such price for a comparable
vehicle, to the extent such amount does not
exceed--
``(I) $7,500, if such vehicle has a
gross vehicle weight rating of not more
than 14,000 pounds,
``(II) $15,000, if such vehicle has
a gross vehicle weight rating of more
than 14,000 pounds but not more than
26,000 pounds, and
``(III) $30,000, if such vehicle
has a gross vehicle weight rating of
more than 26,000 pounds.
``(iv) Comparable vehicle.--For purposes of
this subparagraph, the term `comparable
vehicle' means, with respect to any new
qualified hybrid motor vehicle, any vehicle
which is powered solely by a gasoline or diesel
internal combustion engine and which is
comparable in weight, size, and use to such
vehicle.
``(v) Certification.--A certification
described in clause (i) shall be made by the
manufacturer and shall be determined in
accordance with guidance prescribed by the
Secretary. Such guidance shall specify
procedures and methods for calculating fuel
economy savings and incremental hybrid costs.
``(3) New qualified hybrid motor vehicle.--For purposes of
this subsection--
``(A) In general.--The term `new qualified hybrid
motor vehicle' means a motor vehicle--
``(i) which draws propulsion energy from
onboard sources of stored energy which are
both--
``(I) an internal combustion or
heat engine using consumable fuel, and
``(II) a rechargeable energy
storage system,
``(ii) which, in the case of a vehicle to
which paragraph (2)(A) applies, has received a
certificate of conformity under the Clean Air
Act and meets or exceeds the equivalent
qualifying California low emission vehicle
standard under section 243(e)(2) of the Clean
Air Act for that make and model year, and
``(I) in the case of a vehicle
having a gross vehicle weight rating of
6,000 pounds or less, the Bin 5 Tier II
emission standard established in
regulations prescribed by the
Administrator of the Environmental
Protection Agency under section 202(i)
of the Clean Air Act for that make and
model year vehicle, and
``(II) in the case of a vehicle
having a gross vehicle weight rating of
more than 6,000 pounds but not more
than 8,500 pounds, the Bin 8 Tier II
emission standard which is so
established,
``(iii) which has a maximum available power
of at least--
``(I) 4 percent in the case of a
vehicle to which paragraph (2)(A)
applies,
``(II) 10 percent in the case of a
vehicle which has a gross vehicle
weight rating or more than 8,500 pounds
and not than 14,000 pounds, and
``(III) 15 percent in the case of a
vehicle in excess of 14,000 pounds,
``(iv) which, in the case of a vehicle to
which paragraph (2)(B) applies, has an internal
combustion or heat engine which has received a
certificate of conformity under the Clean Air
Act as meeting the emission standards set in
the regulations prescribed by the Administrator
of the Environmental Protection Agency for 2004
through 2007 model year diesel heavy duty
engines or ottocycle heavy duty engines, as
applicable,
``(v) the original use of which commences
with the taxpayer,
``(vi) which is acquired for use or lease
by the taxpayer and not for resale, and
``(vii) which is made by a manufacturer.
Such term shall not include any vehicle which is not a
passenger automobile or light truck if such vehicle has
a gross vehicle weight rating of less than 8,500
pounds.
``(B) Consumable fuel.--For purposes of
subparagraph (A)(i)(I), the term `consumable fuel'
means any solid, liquid, or gaseous matter which
releases energy when consumed by an auxiliary power
unit.
``(C) Maximum available power.--
``(i) Certain passenger automobiles and
light trucks.--In the case of a vehicle to
which paragraph (2)(A) applies, the term
`maximum available power' means the maximum
power available from the rechargeable energy
storage system, during a standard 10 second
pulse power or equivalent test, divided by such
maximum power and the SAE net power of the heat
engine.
``(ii) Other motor vehicles.--In the case
of a vehicle to which paragraph (2)(B) applies,
the term `maximum available power' means the
maximum power available from the rechargeable
energy storage system, during a standard 10
second pulse power or equivalent test, divided
by the vehicle's total traction power. For
purposes of the preceding sentence, the term
`total traction power' means the sum of the
peak power from the rechargeable energy storage
system and the heat engine peak power of the
vehicle, except that if such storage system is
the sole means by which the vehicle can be
driven, the total traction power is the peak
power of such storage system.
``(e) New Qualified Alternative Fuel Motor Vehicle Credit.--
``(1) Allowance of credit.--Except as provided in paragraph
(5), the new qualified alternative fuel motor vehicle credit
determined under this subsection is an amount equal to the
applicable percentage of the incremental cost of any new
qualified alternative fuel motor vehicle placed in service by
the taxpayer during the taxable year.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage with respect to any new
qualified alternative fuel motor vehicle is--
``(A) 40 percent, plus
``(B) 30 percent, if such vehicle--
``(i) has received a certificate of
conformity under the Clean Air Act and meets or
exceeds the most stringent standard available
for certification under the Clean Air Act for
that make and model year vehicle (other than a
zero emission standard), or
``(ii) has received an order certifying the
vehicle as meeting the same requirements as
vehicles which may be sold or leased in
California and meets or exceeds the most
stringent standard available for certification
under the State laws of California (enacted in
accordance with a waiver granted under section
209(b) of the Clean Air Act) for that make and
model year vehicle (other than a zero emission
standard).
For purposes of the preceding sentence, in the case of any new
qualified alternative fuel motor vehicle which has a gross
vehicle weight rating of more than 14,000 pounds, the most
stringent standard available shall be such standard available
for certification on the date of the enactment of the Energy
Tax Policy Act of 2003.
``(3) Incremental cost.--For purposes of this subsection,
the incremental cost of any new qualified alternative fuel
motor vehicle is equal to the amount of the excess of the
manufacturer's suggested retail price for such vehicle over
such price for a gasoline or diesel fuel motor vehicle of the
same model, to the extent such amount does not exceed--
``(A) $5,000, if such vehicle has a gross vehicle
weight rating of not more than 8,500 pounds,
``(B) $10,000, if such vehicle has a gross vehicle
weight rating of more than 8,500 pounds but not more
than 14,000 pounds,
``(C) $25,000, if such vehicle has a gross vehicle
weight rating of more than 14,000 pounds but not more
than 26,000 pounds, and
``(D) $40,000, if such vehicle has a gross vehicle
weight rating of more than 26,000 pounds.
``(4) New qualified alternative fuel motor vehicle.--For
purposes of this subsection--
``(A) In general.--The term `new qualified
alternative fuel motor vehicle' means any motor
vehicle--
``(i) which is only capable of operating on
an alternative fuel,
``(ii) the original use of which commences
with the taxpayer,
``(iii) which is acquired by the taxpayer
for use or lease, but not for resale, and
``(iv) which is made by a manufacturer.
``(B) Alternative fuel.--The term `alternative
fuel' means compressed natural gas, liquefied natural
gas, liquefied petroleum gas, hydrogen, and any liquid
at least 85 percent of the volume of which consists of
methanol.
``(5) Credit for mixed-fuel vehicles.--
``(A) In general.--In the case of a mixed-fuel
vehicle placed in service by the taxpayer during the
taxable year, the credit determined under this
subsection is an amount equal to--
``(i) in the case of a 75/25 mixed-fuel
vehicle, 70 percent of the credit which would
have been allowed under this subsection if such
vehicle was a qualified alternative fuel motor
vehicle, and
``(ii) in the case of a 90/10 mixed-fuel
vehicle, 90 percent of the credit which would
have been allowed under this subsection if such
vehicle was a qualified alternative fuel motor
vehicle.
``(B) Mixed-fuel vehicle.--For purposes of this
subsection, the term `mixed-fuel vehicle' means any
motor vehicle described in subparagraph (C) or (D) of
paragraph (3), which--
``(i) is certified by the manufacturer as
being able to perform efficiently in normal
operation on a combination of an alternative
fuel and a petroleum-based fuel,
``(ii) either--
``(I) has received a certificate of
conformity under the Clean Air Act, or
``(II) has received an order
certifying the vehicle as meeting the
same requirements as vehicles which may
be sold or leased in California and
meets or exceeds the low emission
vehicle standard under section 88.105-
94 of title 40, Code of Federal
Regulations, for that make and model
year vehicle,
``(iii) the original use of which commences
with the taxpayer,
``(iv) which is acquired by the taxpayer
for use or lease, but not for resale, and
``(v) which is made by a manufacturer.
``(C) 75/25 mixed-fuel vehicle.--For purposes of
this subsection, the term `75/25 mixed-fuel vehicle'
means a mixed-fuel vehicle which operates using at
least 75 percent alternative fuel and not more than 25
percent petroleum-based fuel.
``(D) 90/10 mixed-fuel vehicle.--For purposes of
this subsection, the term `90/10 mixed-fuel vehicle'
means a mixed-fuel vehicle which operates using at
least 90 percent alternative fuel and not more than 10
percent petroleum-based fuel.
``(f) Limitation on Number of New Qualified Hybrid and Advanced
Lean-Burn Technology Vehicles Eligible for Credit.--
``(1) In general.--In the case of a qualified vehicle sold
during the phaseout period, only the applicable percentage of
the credit otherwise allowable under subsection (c) or (d)
shall be allowed.
``(2) Phaseout period.--For purposes of this subsection,
the phaseout period is the period beginning with the second
calendar quarter following the calendar quarter which includes
the first date on which the number of qualified vehicles
manufactured by the manufacturer of the vehicle referred to in
paragraph (1) sold for use in the United States after the date
of the enactment of this section is at least 80,000.
``(3) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage is--
``(A) 50 percent for the first 2 calendar quarters
of the phaseout period,
``(B) 25 percent for the 3d and 4th calendar
quarters of the phaseout period, and
``(C) 0 percent for each calendar quarter
thereafter.
``(4) Controlled groups.--
``(A) In general.--For purposes of this subsection,
all persons treated as a single employer under
subsection (a) or (b) of section 52 or subsection (m)
or (o) of section 414 shall be treated as a single
manufacturer.
``(B) Inclusion of foreign corporations.--For
purposes of subparagraph (A), in applying subsections
(a) and (b) of section 52 to this section, section 1563
shall be applied without regard to subsection (b)(2)(C)
thereof.
``(5) Qualified vehicle.--For purposes of this subsection,
the term `qualified vehicle' means any new qualified hybrid
motor vehicle and any new advanced lean burn technology motor
vehicle.
``(g) Limitation Based on Amount of Tax.--The credit allowed under
subsection (a) for the taxable year shall not exceed the excess of--
``(1) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(2) the sum of the credits allowable under subpart A and
sections 27 and 30 for the taxable year.
``(h) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Motor vehicle.--The term `motor vehicle' has the
meaning given such term by section 30(c)(2).
``(2) Other terms.--The terms `automobile', `passenger
automobile', `light truck', and `manufacturer' have the
meanings given such terms in regulations prescribed by the
Administrator of the Environmental Protection Agency for
purposes of the administration of title II of the Clean Air Act
(42 U.S.C. 7521 et seq.).
``(3) 2002 model year city fuel economy.--
``(A) In general.--The 2002 model year city fuel
economy with respect to a vehicle shall be determined
in accordance with the following tables:
``(i) In the case of a passenger
automobile:
``(ii) In the case of a light truck:
``(B) Vehicle inertia weight class.--For purposes
of subparagraph (A), the term `vehicle inertia weight
class' has the same meaning as when defined in
regulations prescribed by the Administrator of the
Environmental Protection Agency for purposes of the
administration of title II of the Clean Air Act (42
U.S.C. 7521 et seq.).
``(4) Fuel economy.--Fuel economy with respect to any
vehicle shall be measured under rules similar to the rules
under section 4064(c).
``(5) Reduction in basis.--For purposes of this subtitle,
if a credit is allowed under this section for any expenditure
with respect to any property, the increase in the basis of such
property which would (but for this paragraph) result from such
expenditure shall be reduced by the amount of the credit so
allowed.
``(6) No double benefit.--The amount of any deduction or
credit allowable under this chapter (other than the credits
allowable under this section and section 30) shall be reduced
by the amount of credit allowed under subsection (a) for such
vehicle for the taxable year.
``(7) Recapture.--The Secretary shall, by regulations,
provide for recapturing the benefit of any credit allowable
under subsection (a) with respect to any property which ceases
to be property eligible for such credit (including recapture in
the case of a lease period of less than the economic life of a
vehicle).
``(8) Property used outside united states, etc., not
qualified.--No credit shall be allowed under subsection (a)
with respect to any property referred to in section 50(b) or
with respect to the portion of the cost of any property taken
into account under section 179.
``(9) Election not to take credit.--No credit shall be
allowed under subsection (a) for any vehicle if the taxpayer
elects to not have this section apply to such vehicle.
``(10) Business carryovers allowed.--If the credit
allowable under subsection (a) for a taxable year exceeds the
limitation under subsection (g) for such taxable year, such
excess (to the extent of the credit allowable with respect to
property subject to the allowance for depreciation) shall be
allowed as a credit carryback and carryforward under rules
similar to the rules of section 39.
``(11) Interaction with motor vehicle safety standards.--
Unless otherwise provided in this section, a motor vehicle
shall not be considered eligible for a credit under this
section unless such vehicle is in compliance with the motor
vehicle safety provisions of sections 30101 through 30169 of
title 49, United States Code.
``(i) Regulations.--
``(1) In general.--The Secretary shall promulgate such
regulations as necessary to carry out the provisions of this
section.
``(2) Determination of motor vehicle eligibility.--The
Secretary, after coordination with the Secretary of
Transportation and the Administrator of the Environmental
Protection Agency, shall prescribe such regulations as
necessary to determine whether a motor vehicle meets the
requirements to be eligible for a credit under this section.
``(j) Termination.--This section shall not apply to any property
placed in service after--
``(1) in the case of a new qualified alternative fuel motor
vehicle, December 31, 2006,
``(2) in the case of a new advanced lean burn technology
motor vehicle or a new qualified hybrid motor vehicle, December
31, 2008, and
``(3) in the case of a new qualified fuel cell motor
vehicle, December 31, 2012.''.
(b) Conforming Amendments.--
(1) Section 30(d) (relating to special rules) is amended by
adding at the end the following new paragraphs:
``(5) No double benefit.--No credit shall be allowed under
this section for any motor vehicle for which a credit is also
allowed under section 30B.''.
(2) Section 1016(a), as amended by this Act, is amended by
striking ``and'' at the end of paragraph (31), by striking the
period at the end of paragraph (32) and inserting ``, and'',
and by adding at the end the following:
``(33) to the extent provided in section 30B(h)(5).''.
(3) Section 6501(m) is amended by inserting ``30B(h)(9),''
after ``30(d)(4),''.
(4) The table of sections for subpart B of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 30A the following:

``Sec. 30B. Alternative motor vehicle credit.''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act, in taxable years ending after such date.
(d) Sticker Information Required at Retail Sale.--
(1) In general.--The Secretary of the Treasury shall issue
regulations under which each qualified vehicle sold at retail
shall display a notice--
(A) that such vehicle is a qualified vehicle, and
(B) that the buyer may not benefit from the credit
allowed under section 30B of the Internal Revenue Code
of 1986 if such buyer has insufficient tax liability.
(2) Qualified vehicle.--For purposes of paragraph (1), the
term ``qualified vehicle'' means a vehicle with respect to
which a credit is allowed under section 30B of the Internal
Revenue Code of 1986.

SEC. 1319. MODIFICATIONS OF DEDUCTION FOR CERTAIN REFUELING PROPERTY.

(a) In General.--Subsection (f) of section 179A is amended to read
as follows:
``(f) Termination.--This section shall not apply to any property
placed in service--
``(1) in the case of property relating to hydrogen, after
December 31, 2011, and
``(2) in the case of any other property, after December 31,
2008.''.
(b) Incentive for Production of Hydrogen at Qualified Clean-Fuel
Vehicle Refueling Property.--Section 179A(d) (defining qualified clean-
fuel vehicle refueling property) is amended by adding at the end the
following new flush sentence:
``In the case of clean-burning fuel which is hydrogen produced from
another clean-burning fuel, paragraph (3)(A) shall be applied by
substituting `production, storage, or dispensing' for `storage or
dispensing' both places it appears.''.
(c) Increase in Location Expenditures.--Section 179A(b)(2)(A)(i) is
amended by striking ``$100,000'' and inserting ``$150,000''.
(d) Nonbusiness Use of Qualified Clean-Fuel Vehicle Refueling
Property.--Section 179A(d) is amended by striking paragraph (1) and by
redesignating paragraphs (2) and (3) as paragraphs (1) and (2),
respectively.
(e) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act, in taxable years ending after such date.

Subtitle B--Reliability

SEC. 1321. NATURAL GAS GATHERING LINES TREATED AS 7-YEAR PROPERTY.

(a) In General.--Subparagraph (C) of section 168(e)(3) (relating to
classification of certain property) is amended by striking ``and'' at
the end of clause (i), by redesignating clause (ii) as clause (iii),
and by inserting after clause (i) the following new clause:
``(ii) any natural gas gathering line,
and''.
(b) Natural Gas Gathering Line.--Subsection (i) of section 168, as
amended by this Act, is amended by adding after paragraph (15) the
following new paragraph:
``(16) Natural gas gathering line.--The term `natural gas
gathering line' means--
``(A) the pipe, equipment, and appurtenances
determined to be a gathering line by the Federal Energy
Regulatory Commission, or
``(B) the pipe, equipment, and appurtenances used
to deliver natural gas from the wellhead or a
commonpoint to the point at which such gas first
reaches--
``(i) a gas processing plant,
``(ii) an interconnection with a
transmission pipeline for which a certificate
as an interstate transmission pipeline has been
issued by the Federal Energy Regulatory
Commission,
``(iii) an interconnection with an
intrastate transmission pipeline, or
``(iv) a direct interconnection with a
local distribution company, a gas storage
facility, or an industrial consumer.''.
(c) Alternative System.--The table contained in section
168(g)(3)(B) is amended by inserting after the item relating to
subparagraph (C)(i) the following:

``(C) (ii)..................................................      14''.
(d) Alternative Minimum Tax Exception.--Subparagraph (B) of section
56(a)(1) is amended by inserting before the period the following: ``,
or in section 168(e)(3)(C)(ii)''.
(e) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act, in taxable years ending after such date.

SEC. 1322. NATURAL GAS DISTRIBUTION LINES TREATED AS 15-YEAR PROPERTY.

(a) In General.--Subparagraph (E) of section 168(e)(3) (relating to
classification of certain property) is amended by striking ``and'' at
the end of clause (ii), by striking the period at the end of clause
(iii) and by inserting ``, and'', and by adding at the end the
following new clause:
``(iv) any natural gas distribution
line.''.
(b) Alternative System.--The table contained in section
168(g)(3)(B) is amended by inserting after the item relating to
subparagraph (E)(iii) the following:

``(E) (iv)..................................................      35''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act, in taxable years ending after such date.

SEC. 1323. ELECTRIC TRANSMISSION PROPERTY TREATED AS 15-YEAR PROPERTY.

(a) In General.--Subparagraph (E) of section 168(e)(3) (relating to
classification of certain property), as amended by this Act, is amended
by striking ``and'' at the end of clause (iii), by striking the period
at the end of clause (iv) and by inserting ``, and'', and by adding at
the end the following new clause:
``(v) any section 1245 property (as defined
in section 1245(a)(3)) used in the transmission
at 69 or more kilovolts of electricity for sale
the original use of which commences with the
taxpayer after the date of the enactment of
this clause.''.
(b) Alternative System.--The table contained in section
168(g)(3)(B) is amended by inserting after the item relating to
subparagraph (E)(iv) the following:

``(E) (v)...................................................      30''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act, in taxable years ending after such date.

SEC. 1324. EXPENSING OF CAPITAL COSTS INCURRED IN COMPLYING WITH
ENVIRONMENTAL PROTECTION AGENCY SULFUR REGULATIONS.

(a) In General.--Part VI of subchapter B of chapter 1 (relating to
itemized deductions for individuals and corporations), as amended by
this Act, is amended by inserting after section 179B the following new
section:

``SEC. 179C. DEDUCTION FOR CAPITAL COSTS INCURRED IN COMPLYING WITH
ENVIRONMENTAL PROTECTION AGENCY SULFUR REGULATIONS.

``(a) Treatment as Expenses.--A small business refiner (as defined
in section 45I(c)(1)) may elect to treat 75 percent of qualified
capital costs (as defined in section 45I(c)(2)) which are paid or
incurred by the taxpayer during the taxable year as expenses which are
not chargeable to capital account. Any cost so treated shall be allowed
as a deduction for the taxable year in which paid or incurred.
``(b) Reduced Percentage.--In the case of a small business refiner
with average daily domestic refinery runs for the 1-year period ending
on December 31, 2002, in excess of 155,000 barrels, the number of
percentage points described in subsection (a) shall be reduced (not
below zero) by the product of such number (before the application of
this subsection) and the ratio of such excess to 50,000 barrels.
``(c) Basis Reduction.--
``(1) In general.--For purposes of this title, the basis of
any property shall be reduced by the portion of the cost of
such property taken into account under subsection (a).
``(2) Ordinary income recapture.--For purposes of section
1245, the amount of the deduction allowable under subsection
(a) with respect to any property which is of a character
subject to the allowance for depreciation shall be treated as a
deduction allowed for depreciation under section 167.''.
``(d) Coordination With Other Provisions.--Section 280B shall not
apply to amounts which are treated as expenses under this section.''.
(b) Conforming Amendments.--
(1) Section 263(a)(1), as amended by this Act, is amended
by striking ``or'' at the end of subparagraph (H), by striking
the period at the end of subparagraph (I) and inserting ``;
or'', and by adding at the end the following new subparagraph:
``(J) expenditures for which a deduction is allowed
under section 179C.''.
(2) Section 263A(c)(3) is amended by inserting ``179C,''
after ``section''.
(3) Section 312(k)(3)(B), as amended by this Act, is
amended by striking ``or 179B'' each place it appears in the
heading and text and inserting ``179B, or 179C''.
(4) Section 1016(a), as amended by this Act, is amended by
striking ``and'' at the end of paragraph (32), by striking the
period at the end of paragraph (33) and inserting ``, and'',
and by adding at the end the following new paragraph:
``(34) to the extent provided in section 179C(c).''.
(5) Paragraphs (2)(C) and (3)(C) of section 1245(a), as
amended by this Act, are each amended by inserting ``179C,''
after ``179B,''.
(6) The table of sections for part VI of subchapter B of
chapter 1, as amended by this Act, is amended by inserting
after the item relating to section 179B the following new item:

``Sec. 179C. Deduction for capital costs incurred in complying with
Environmental Protection Agency sulfur
regulations.''.
(c) Effective Date.--The amendment made by this section shall apply
to expenses paid or incurred after December 31, 2002, in taxable years
ending after such date.

SEC. 1325. CREDIT FOR PRODUCTION OF LOW SULFUR DIESEL FUEL.

(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business-related credits), as amended by this Act, is
amended by adding at the end the following new section:

``SEC. 45I. CREDIT FOR PRODUCTION OF LOW SULFUR DIESEL FUEL.

``(a) In General.--For purposes of section 38, the amount of the
low sulfur diesel fuel production credit determined under this section
with respect to any facility of a small business refiner is an amount
equal to 5 cents for each gallon of low sulfur diesel fuel produced
during the taxable year by such small business refiner at such
facility.
``(b) Maximum Credit.--
``(1) In general.--The aggregate credit determined under
subsection (a) for any taxable year with respect to any
facility shall not exceed--
``(A) 25 percent of the qualified capital costs
incurred by the small business refiner with respect to
such facility, reduced by
``(B) the aggregate credits determined under this
section for all prior taxable years with respect to
such facility.
``(2) Reduced percentage.--In the case of a small business
refiner with average daily domestic refinery runs for the 1-
year period ending on December 31, 2002, in excess of 155,000
barrels, the number of percentage points described in paragraph
(1) shall be reduced (not below zero) by the product of such
number (before the application of this paragraph) and the ratio
of such excess to 50,000 barrels.
``(c) Definitions and Special Rule.--For purposes of this section--
``(1) Small business refiner.--The term `small business
refiner' means, with respect to any taxable year, a refiner of
crude oil--
``(A) with respect to which not more than 1,500
individuals are engaged in the refinery operations of
the business on any day during such taxable year, and
``(B) the average daily domestic refinery run or
average retained production of which for all facilities
of the taxpayer for the 1-year period ending on
December 31, 2002, did not exceed 205,000 barrels.
``(2) Qualified capital costs.--The term `qualified capital
costs' means, with respect to any facility, those costs paid or
incurred during the applicable period for compliance with the
applicable EPA regulations with respect to such facility,
including expenditures for the construction of new process
operation units or the dismantling and reconstruction of
existing process units to be used in the production of low
sulfur diesel fuel, associated adjacent or offsite equipment
(including tankage, catalyst, and power supply), engineering,
construction period interest, and sitework.
``(3) Applicable epa regulations.--The term `applicable EPA
regulations' means the Highway Diesel Fuel Sulfur Control
Requirements of the Environmental Protection Agency.
``(4) Applicable period.--The term `applicable period'
means, with respect to any facility, the period beginning on
January 1, 2003, and ending on the earlier of the date which is
1 year after the date on which the taxpayer must comply with
the applicable EPA regulations with respect to such facility or
December 31, 2009.
``(5) Low sulfur diesel fuel.--The term `low sulfur diesel
fuel' means diesel fuel with a sulfur content of 15 parts per
million or less.
``(d) Reduction in Basis.--For purposes of this subtitle, if a
credit is determined under this section for any expenditure with
respect to any property, the increase in basis of such property which
would (but for this subsection) result from such expenditure shall be
reduced by the amount of the credit so determined.
``(e) Special Rule for Determination of Refinery Runs.--For
purposes this section and section 179C(b), in the calculation of
average daily domestic refinery run or retained production, only
refineries which on April 1, 2003, were refineries of the refiner or a
related person (within the meaning of section 613A(d)(3)), shall be
taken into account.
``(f) Certification.--
``(1) Required.--No credit shall be allowed unless, not
later than the date which is 30 months after the first day of
the first taxable year in which the low sulfur diesel fuel
production credit is allowed with respect to a facility, the
small business refiner obtains certification from the
Secretary, after consultation with the Administrator of the
Environmental Protection Agency, that the taxpayer's qualified
capital costs with respect to such facility will result in
compliance with the applicable EPA regulations.
``(2) Contents of application.--An application for
certification shall include relevant information regarding unit
capacities and operating characteristics sufficient for the
Secretary, after consultation with the Administrator of the
Environmental Protection Agency, to determine that such
qualified capital costs are necessary for compliance with the
applicable EPA regulations.
``(3) Review period.--Any application shall be reviewed and
notice of certification, if applicable, shall be made within 60
days of receipt of such application. In the event the Secretary
does not notify the taxpayer of the results of such
certification within such period, the taxpayer may presume the
certification to be issued until so notified.
``(4) Statute of limitations.--With respect to the credit
allowed under this section--
``(A) the statutory period for the assessment of
any deficiency attributable to such credit shall not
expire before the end of the 3-year period ending on
the date that the review period described in paragraph
(3) ends with respect to the taxpayer, and
``(B) such deficiency may be assessed before the
expiration of such 3-year period notwithstanding the
provisions of any other law or rule of law which would
otherwise prevent such assessment.
``(g) Cooperative Organizations.--
``(1) Apportionment of credit.--
``(A) In general.--In the case of a cooperative
organization described in section 1381(a), any portion
of the credit determined under subsection (a) for the
taxable year may, at the election of the organization,
be apportioned among patrons eligible to share in
patronage dividends on the basis of the quantity or
value of business done with or for such patrons for the
taxable year.
``(B) Form and effect of election.--An election
under subparagraph (A) for any taxable year shall be
made on a timely filed return for such year. Such
election, once made, shall be irrevocable for such
taxable year.
``(2) Treatment of organizations and patrons.--
``(A) Organizations.--The amount of the credit not
apportioned to patrons pursuant to paragraph (1) shall
be included in the amount determined under subsection
(a) for the taxable year of the organization.
``(B) Patrons.--The amount of the credit
apportioned to patrons pursuant to paragraph (1) shall
be included in the amount determined under subsection
(a) for the first taxable year of each patron ending on
or after the last day of the payment period (as defined
in section 1382(d)) for the taxable year of the
organization or, if earlier, for the taxable year of
each patron ending on or after the date on which the
patron receives notice from the cooperative of the
apportionment.
``(3) Special rule.--If the amount of a credit which has
been apportioned to any patron under this subsection is
decreased for any reason--
``(A) such amount shall not increase the tax
imposed on such patron, and
``(B) the tax imposed by this chapter on such
organization shall be increased by such amount.
The increase under subparagraph (B) shall not be treated as tax
imposed by this chapter for purposes of determining the amount
of any credit under this chapter or for purposes of section
55.''.
(b) Credit Made Part of General Business Credit.--Subsection (b) of
section 38 (relating to general business credit), as amended by this
Act, is amended by striking ``plus'' at the end of paragraph (17), by
striking the period at the end of paragraph (18) and inserting ``,
plus'', and by adding at the end the following new paragraph:
``(19) in the case of a small business refiner, the low
sulfur diesel fuel production credit determined under section
45I(a).''.
(c) Denial of Double Benefit.--Section 280C (relating to certain
expenses for which credits are allowable) is amended by adding at the
end the following new subsection:
``(d) Low Sulfur Diesel Fuel Production Credit.--No deduction shall
be allowed for that portion of the expenses otherwise allowable as a
deduction for the taxable year which is equal to the amount of the
credit determined for the taxable year under section 45I(a).''.
(d) Basis Adjustment.--Section 1016(a) (relating to adjustments to
basis), as amended by this Act, is amended by striking ``and'' at the
end of paragraph (33), by striking the period at the end of paragraph
(34) and inserting ``, and'', and by adding at the end the following
new paragraph:
``(35) in the case of a facility with respect to which a
credit was allowed under section 45I, to the extent provided in
section 45I(d).''.
(e) Deduction for Certain Unused Business Credits.--Section 196(c)
(defining qualified business credits), as amended by this Act, is
amended by striking ``and'' at the end of paragraph (12), by striking
the period at the end of paragraph (13) and inserting ``, and'', and by
adding after paragraph (13) the following new paragraph:
``(14) the low sulfur diesel fuel production credit
determined under section 45I(a).''.
(f) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1, as amended by this Act, is
amended by adding at the end the following new item:

``Sec. 45I. Credit for production of low sulfur diesel fuel.''.
(g) Effective Date.--The amendments made by this section shall
apply to expenses paid or incurred after December 31, 2002, in taxable
years ending after such date.

SEC. 1326. DETERMINATION OF SMALL REFINER EXCEPTION TO OIL DEPLETION
DEDUCTION.

(a) In General.--Paragraph (4) of section 613A(d) (relating to
limitations on application of subsection (c)) is amended to read as
follows:
``(4) Certain refiners excluded.--If the taxpayer or 1 or
more related persons engages in the refining of crude oil,
subsection (c) shall not apply to the taxpayer for a taxable
year if the average daily refinery runs of the taxpayer and
such persons for the taxable year exceed 67,500 barrels. For
purposes of this paragraph, the average daily refinery runs for
any taxable year shall be determined by dividing the aggregate
refinery runs for the taxable year by the number of days in the
taxable year.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years ending after the date of the enactment of this Act.

SEC. 1327. SALES OR DISPOSITIONS TO IMPLEMENT FEDERAL ENERGY REGULATORY
COMMISSION OR STATE ELECTRIC RESTRUCTURING POLICY.

(a) In General.--Section 451 (relating to general rule for taxable
year of inclusion) is amended by adding at the end the following new
subsection:
``(i) Special Rule for Sales or Dispositions to Implement Federal
Energy Regulatory Commission or State Electric Restructuring Policy.--
``(1) In general.--In the case of any qualifying electric
transmission transaction for which the taxpayer elects the
application of this section, qualified gain from such
transaction shall be recognized--
``(A) in the taxable year which includes the date
of such transaction to the extent the amount realized
from such transaction exceeds--
``(i) the cost of exempt utility property
which is purchased by the taxpayer during the
4-year period beginning on such date, reduced
(but not below zero) by
``(ii) any portion of such cost previously
taken into account under this subsection, and
``(B) ratably over the 8-taxable year period
beginning with the taxable year which includes the date
of such transaction, in the case of any such gain not
recognized under subparagraph (A).
``(2) Qualified gain.--For purposes of this subsection, the
term `qualified gain' means, with respect to any qualifying
electric transmission transaction in any taxable year--
``(A) any ordinary income derived from such
transaction which would be required to be recognized
under section 1245 or 1250 for such taxable year
(determined without regard to this subsection), and
``(B) any income derived from such transaction in
excess of the amount described in subparagraph (A)
which is required to be included in gross income for
such taxable year (determined without regard to this
subsection).
``(3) Qualifying electric transmission transaction.--For
purposes of this subsection, the term `qualifying electric
transmission transaction' means any sale or other disposition
before January 1, 2007, of--
``(A) property used in the trade or business of
providing electric transmission services, or
``(B) any stock or partnership interest in a
corporation or partnership, as the case may be, whose
principal trade or business consists of providing
electric transmission services,
but only if such sale or disposition is to an independent
transmission company.
``(4) Independent transmission company.--For purposes of
this subsection, the term `independent transmission company'
means--
``(A) an independent transmission provider approved
by the Federal Energy Regulatory Commission,
``(B) a person--
``(i) who the Federal Energy Regulatory
Commission determines in its authorization of
the transaction under section 203 of the
Federal Power Act (16 U.S.C. 824b) or by
declaratory order is not a market participant
within the meaning of such Commission's rules
applicable to independent transmission
providers, and
``(ii) whose transmission facilities to
which the election under this subsection
applies are under the operational control of a
Federal Energy Regulatory Commission-approved
independent transmission provider before the
close of the period specified in such
authorization, but not later than the close of
the period applicable under subsection
(a)(2)(B) as extended under paragraph (2), or
``(C) in the case of facilities subject to the
jurisdiction of the Public Utility Commission of
Texas--
``(i) a person which is approved by that
Commission as consistent with Texas State law
regarding an independent transmission provider,
or
``(ii) a political subdivision or affiliate
thereof whose transmission facilities are under
the operational control of a person described
in clause (i).
``(5) Exempt utility property.--For purposes of this
subsection--
``(A) In general.--The term `exempt utility
property' means property used in the trade or business
of--
``(i) generating, transmitting,
distributing, or selling electricity, or
``(ii) producing, transmitting,
distributing, or selling natural gas.
``(B) Nonrecognition of gain by reason of
acquisition of stock.--Acquisition of control of a
corporation shall be taken into account under this
subsection with respect to a qualifying electric
transmission transaction only if the principal trade or
business of such corporation is a trade or business
referred to in subparagraph (A).
``(6) Special rule for consolidated groups.--In the case of
a corporation which is a member of an affiliated group filing a
consolidated return, any exempt utility property purchased by
another member of such group shall be treated as purchased by
such corporation for purposes of applying paragraph (1)(A).
``(7) Time for assessment of deficiencies.--If the taxpayer
has made the election under paragraph (1) and any gain is
recognized by such taxpayer as provided in paragraph (1)(B),
then--
``(A) the statutory period for the assessment of
any deficiency, for any taxable year in which any part
of the gain on the transaction is realized,
attributable to such gain shall not expire prior to the
expiration of 3 years from the date the Secretary is
notified by the taxpayer (in such manner as the
Secretary may by regulations prescribe) of the purchase
of exempt utility property or of an intention not to
purchase such property, and
``(B) such deficiency may be assessed before the
expiration of such 3-year period notwithstanding any
law or rule of law which would otherwise prevent such
assessment.
``(8) Purchase.--For purposes of this subsection, the
taxpayer shall be considered to have purchased any property if
the unadjusted basis of such property is its cost within the
meaning of section 1012.
``(9) Election.--An election under paragraph (1) shall be
made at such time and in such manner as the Secretary may
require and, once made, shall be irrevocable.
``(10) Nonapplication of installment sales treatment.--
Section 453 shall not apply to any qualifying electric
transmission transaction with respect to which an election to
apply this subsection is made.''.
(b) Effective Date.--The amendments made by this section shall
apply to transactions occurring after the date of the enactment of this
Act, in taxable years ending after such date.

SEC. 1328. MODIFICATIONS TO SPECIAL RULES FOR NUCLEAR DECOMMISSIONING
COSTS.

(a) Repeal of Limitation on Deposits Into Fund Based on Cost of
Service; Contributions After Funding Period.--Subsection (b) of section
468A (relating to special rules for nuclear decommissioning costs) is
amended to read as follows:
``(b) Limitation on Amounts Paid Into Fund.--
``(1) In general.--The amount which a taxpayer may pay into
the Fund for any taxable year shall not exceed the ruling
amount applicable to such taxable year.
``(2) Contributions after funding period.--Notwithstanding
any other provision of this section, a taxpayer may pay into
the Fund in any taxable year after the last taxable year to
which the ruling amount applies. Payments may not be made under
the preceding sentence to the extent such payments would cause
the assets of the Fund to exceed the nuclear decommissioning
costs allocable to the taxpayer's current or former interest in
the nuclear power plant to which the Fund relates. The
limitation under the preceding sentence shall be determined by
taking into account a reasonable rate of inflation for the
nuclear decommissioning costs and a reasonable after-tax rate
of return on the assets of the Fund until such assets are
anticipated to be expended.''.
(b) Clarification of Treatment of Fund Transfers.--Section 468A(e)
(relating to Nuclear Decommissioning Reserve Fund) is amended by adding
at the end the following new paragraph:
``(8) Treatment of fund transfers.--
``(A) In general.--If, in connection with the
transfer of the taxpayer's interest in a nuclear power
plant, the taxpayer transfers the Fund with respect to
such power plant to the transferee of such interest and
the transferee elects to continue the application of
this section to such Fund--
``(i) the transfer of such Fund shall not
cause such Fund to be disqualified from the
application of this section, and
``(ii) no amount shall be treated as
distributed from such Fund, or be includable in
gross income, by reason of such transfer.
``(B) Special rules if transferor is tax-exempt
entity.--
``(i) In general.--If--
``(I) a person exempt from taxation
under this title transfers an interest
in a nuclear power plant,
``(II) such person has set aside
amounts for nuclear decommissioning
which are transferred to the transferee
of the interest, and
``(III) the transferee elects the
application of this subparagraph no
later than the due date (including
extensions) of its return of tax for
the taxable year in which the transfer
occurs,
the amounts so set aside shall be treated as if
contributed by such person to a Fund
immediately before the transfer and then
transferred in the Fund to the transferee.
``(ii) Limitation.--The amount treated as
transferred to a Fund under clause (i) shall
not exceed the amount which bears the same
ratio to the present value of the nuclear
decommissioning costs of the transferor with
respect to the nuclear power plant as the
number of years the nuclear power plant has
been in service bears to the estimated useful
life of such power plant.
``(iii) Basis.--The transferee's basis in
any asset treated as transferred in the Fund
shall be the same as the adjusted basis of such
asset in the hands of the transferor.
``(iv) Ruling amount required.--This
subparagraph shall not apply to any transfer
unless the transferee requests from the
Secretary a schedule of ruling amounts.
``(v) Election disregarded.--An election
under this subparagraph shall be disregarded in
determining the Federal income tax of the
transferor.''.
(c) Treatment of Certain Decommissioning Costs.--
(1) In general.--Section 468A is amended by redesignating
subsections (f) and (g) as subsections (g) and (h),
respectively, and by inserting after subsection (e) the
following new subsection:
``(f) Transfers Into Qualified Funds.--
``(1) In general.--Notwithstanding subsection (b), any
taxpayer maintaining a Fund to which this section applies with
respect to a nuclear power plant may transfer into such Fund
not more than an amount equal to the present value of the
portion of the total nuclear decommissioning costs with respect
to such nuclear power plant previously excluded for such
nuclear power plant under subsection (d)(2)(A) as in effect
immediately before the date of the enactment of the Energy Tax
Policy Act of 2004.
``(2) Deduction for amounts transferred.--
``(A) In general.--Except as provided in
subparagraph (C), the deduction allowed by subsection
(a) for any transfer permitted by this subsection shall
be allowed ratably over the remaining estimated useful
life (within the meaning of subsection (d)(2)(A)) of
the nuclear power plant beginning with the taxable year
during which the transfer is made.
``(B) Denial of deduction for previously deducted
amounts.--No deduction shall be allowed for any
transfer under this subsection of an amount for which a
deduction was previously allowed to the taxpayer (or a
predecessor) or a corresponding amount was not included
in gross income of the taxpayer (or a predecessor). For
purposes of the preceding sentence, a ratable portion
of each transfer shall be treated as being from
previously deducted or excluded amounts to the extent
thereof.
``(C) Transfers of qualified funds.--If--
``(i) any transfer permitted by this
subsection is made to any Fund to which this
section applies, and
``(ii) such Fund is transferred thereafter,
any deduction under this subsection for taxable years
ending after the date that such Fund is transferred
shall be allowed to the transferor for the taxable year
which includes such date.
``(D) Special rules.--
``(i) Gain or loss not recognized.--No gain
or loss shall be recognized on any transfer
permitted by this subsection.
``(ii) Transfers of appreciated property.--
If appreciated property is transferred in a
transfer permitted by this subsection, the
amount of the deduction shall not exceed the
adjusted basis of such property.
``(3) New ruling amount required.--Paragraph (1) shall not
apply to any transfer unless the taxpayer requests from the
Secretary a new schedule of ruling amounts in connection with
such transfer.
``(4) No basis in qualified funds.--Notwithstanding any
other provision of law, the taxpayer's basis in any Fund to
which this section applies shall not be increased by reason of
any transfer permitted by this subsection.''.
(2) New ruling amount to take into account total costs.--
Subparagraph (A) of section 468A(d)(2) (defining ruling amount)
is amended to read as follows:
``(A) fund the total nuclear decommissioning costs
with respect to such power plant over the estimated
useful life of such power plant, and''.
(d) Technical Amendments.--Section 468A(e)(2) (relating to taxation
of Fund) is amended--
(1) by striking ``rate set forth in subparagraph (B)'' in
subparagraph (A) and inserting ``rate of 20 percent'',
(2) by striking subparagraph (B), and
(3) by redesignating subparagraphs (C) and (D) as
subparagraphs (B) and (C), respectively.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.

SEC. 1329. TREATMENT OF CERTAIN INCOME OF COOPERATIVES.

(a) Income From Open Access and Nuclear Decommissioning
Transactions.--
(1) In general.--Subparagraph (C) of section 501(c)(12) is
amended by striking ``or'' at the end of clause (i), by
striking clause (ii), and by adding at the end the following
new clauses:
``(ii) from any provision or sale of
electric energy transmission services or
ancillary services if such services are
provided on a nondiscriminatory open access
basis under an open access transmission tariff
approved or accepted by FERC or under an
independent transmission provider agreement
approved or accepted by FERC (other than income
received or accrued directly or indirectly from
a member),
``(iii) from the provision or sale of
electric energy distribution services or
ancillary services if such services are
provided on a nondiscriminatory open access
basis to distribute electric energy not owned
by the mutual or electric cooperative company--
``(I) to end-users who are served
by distribution facilities not owned by
such company or any of its members
(other than income received or accrued
directly or indirectly from a member),
or
``(II) generated by a generation
facility not owned or leased by such
company or any of its members and which
is directly connected to distribution
facilities owned by such company or any
of its members (other than income
received or accrued directly or
indirectly from a member),
``(iv) from any nuclear decommissioning
transaction, or
``(v) from any asset exchange or conversion
transaction.''.
(2) Definitions and special rules.--Paragraph (12) of
section 501(c) is amended by adding at the end the following
new subparagraphs:
``(E) For purposes of subparagraph (C)(ii), the
term `FERC' means the Federal Energy Regulatory
Commission and references to such term shall be treated
as including the Public Utility Commission of Texas
with respect to any ERCOT utility (as defined in
section 212(k)(2)(B) of the Federal Power Act (16
U.S.C. 824k(k)(2)(B))).
``(F) For purposes of subparagraph (C)(iii), the
term `nuclear decommissioning transaction' means--
``(i) any transfer into a trust, fund, or
instrument established to pay any nuclear
decommissioning costs if the transfer is in
connection with the transfer of the mutual or
cooperative electric company's interest in a
nuclear power plant or nuclear power plant
unit,
``(ii) any distribution from any trust,
fund, or instrument established to pay any
nuclear decommissioning costs, or
``(iii) any earnings from any trust, fund,
or instrument established to pay any nuclear
decommissioning costs.
``(G) For purposes of subparagraph (C)(iv), the
term `asset exchange or conversion transaction' means
any voluntary exchange or involuntary conversion of any
property related to generating, transmitting,
distributing, or selling electric energy by a mutual or
cooperative electric company, the gain from which
qualifies for deferred recognition under section 1031
or 1033, but only if the replacement property acquired
by such company pursuant to such section constitutes
property which is used, or to be used, for--
``(i) generating, transmitting,
distributing, or selling electric energy, or
``(ii) producing, transmitting,
distributing, or selling natural gas.''.
(b) Treatment of Income From Load Loss Transactions, Etc.--
Paragraph (12) of section 501(c), as amended by subsection (a)(2), is
amended by adding after subparagraph (G) the following new
subparagraph:
``(H)(i) In the case of a mutual or cooperative
electric company described in this paragraph or an
organization described in section 1381(a)(2)(C), income
received or accrued from a load loss transaction shall
be treated as an amount collected from members for the
sole purpose of meeting losses and expenses.
``(ii) For purposes of clause (i), the term `load
loss transaction' means any wholesale or retail sale of
electric energy (other than to members) to the extent
that the aggregate sales during the recovery period do
not exceed the load loss mitigation sales limit for
such period.
``(iii) For purposes of clause (ii), the load loss
mitigation sales limit for the recovery period is the
sum of the annual load losses for each year of such
period.
``(iv) For purposes of clause (iii), a mutual or
cooperative electric company's annual load loss for
each year of the recovery period is the amount (if any)
by which--
``(I) the megawatt hours of electric energy
sold during such year to members of such
electric company are less than
``(II) the megawatt hours of electric
energy sold during the base year to such
members.
``(v) For purposes of clause (iv)(II), the term
`base year' means--
``(I) the calendar year preceding the
start-up year, or
``(II) at the election of the mutual or
cooperative electric company, the second or
third calendar years preceding the start-up
year.
``(vi) For purposes of this subparagraph, the
recovery period is the 7-year period beginning with the
start-up year.
``(vii) For purposes of this subparagraph, the
start-up year is the first year that the mutual or
cooperative electric company offers nondiscriminatory
open access or the calendar year which includes the
date of the enactment of this subparagraph, if later,
at the election of such company.
``(viii) A company shall not fail to be treated as
a mutual or cooperative electric company for purposes
of this paragraph or as a corporation operating on a
cooperative basis for purposes of section 1381(a)(2)(C)
by reason of the treatment under clause (i).
``(ix) For purposes of subparagraph (A), in the
case of a mutual or cooperative electric company,
income received, or accrued, indirectly from a member
shall be treated as an amount collected from members
for the sole purpose of meeting losses and expenses.''.
(c) Exception From Unrelated Business Taxable Income.--Subsection
(b) of section 512 (relating to modifications) is amended by adding at
the end the following new paragraph:
``(18) Treatment of mutual or cooperative electric
companies.--In the case of a mutual or cooperative electric
company described in section 501(c)(12), there shall be
excluded income which is treated as member income under
subparagraph (H) thereof.''.
(d) Cross Reference.--Section 1381 is amended by adding at the end
the following new subsection:
``(c) Cross Reference.--For treatment of income from load loss
transactions of organizations described in subsection (a)(2)(C), see
section 501(c)(12)(H).''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.

SEC. 1330. ARBITRAGE RULES NOT TO APPLY TO PREPAYMENTS FOR NATURAL GAS.

(a) In General.--Subsection (b) of section 148 (relating to higher
yielding investments) is amended by adding at the end the following new
paragraph:
``(4) Safe harbor for prepaid natural gas.--
``(A) In general.--The term `investment-type
property' does not include a prepayment under a
qualified natural gas supply contract.
``(B) Qualified natural gas supply contract.--For
purposes of this paragraph, the term `qualified natural
gas supply contract' means any contract to acquire
natural gas for resale by a utility owned by a
governmental unit if the amount of gas permitted to be
acquired under the contract by the utility during any
year does not exceed the sum of--
``(i) the annual average amount during the
testing period of natural gas purchased (other
than for resale) by customers of such utility
who are located within the service area of such
utility, and
``(ii) the amount of natural gas to be used
to transport the prepaid natural gas to the
utility during such year.
``(C) Natural gas used to generate electricity.--
Natural gas used to generate electricity shall be taken
into account in determining the average under
subparagraph (B)(i)--
``(i) only if the electricity is generated
by a utility owned by a governmental unit, and
``(ii) only to the extent that the
electricity is sold (other than for resale) to
customers of such utility who are located
within the service area of such utility.
``(D) Adjustments for changes in customer base.--
``(i) New business customers.--If--
``(I) after the close of the
testing period and before the date of
issuance of the issue, the utility
owned by a governmental unit enters
into a contract to supply natural gas
(other than for resale) for a business
use at a property within the service
area of such utility, and
``(II) the utility did not supply
natural gas to such property during the
testing period or the ratable amount of
natural gas to be supplied under the
contract is significantly greater than
the ratable amount of gas supplied to
such property during the testing
period,
then a contract shall not fail to be treated as
a qualified natural gas supply contract by
reason of supplying the additional natural gas
under the contract referred to in subclause
(I).
``(ii) Lost customers.--The average under
subparagraph (B)(i) shall not exceed the annual
amount of natural gas reasonably expected to be
purchased (other than for resale) by persons
who are located within the service area of such
utility and who, as of the date of issuance of
the issue, are customers of such utility.
``(E) Ruling requests.--The Secretary may increase
the average under subparagraph (B)(i) for any period if
the utility owned by the governmental unit establishes
to the satisfaction of the Secretary that, based on
objective evidence of growth in natural gas consumption
or population, such average would otherwise be
insufficient for such period.
``(F) Adjustment for natural gas otherwise on
hand.--
``(i) In general.--The amount otherwise
permitted to be acquired under the contract for
any period shall be reduced by--
``(I) the applicable share of
natural gas held by the utility on the
date of issuance of the issue, and
``(II) the natural gas (not taken
into account under subclause (I)) which
the utility has a right to acquire
during such period (determined as of
the date of issuance of the issue).
``(ii) Applicable share.--For purposes of
the clause (i), the term `applicable share'
means, with respect to any period, the natural
gas allocable to such period if the gas were
allocated ratably over the period to which the
prepayment relates.
``(G) Intentional acts.--Subparagraph (A) shall
cease to apply to any issue if the utility owned by the
governmental unit engages in any intentional act to
render the volume of natural gas acquired by such
prepayment to be in excess of the sum of--
``(i) the amount of natural gas needed
(other than for resale) by customers of such
utility who are located within the service area
of such utility, and
``(ii) the amount of natural gas used to
transport such natural gas to the utility.
``(H) Testing period.--For purposes of this
paragraph, the term `testing period' means, with
respect to an issue, the most recent 5 calendar years
ending before the date of issuance of the issue.
``(I) Service area.--For purposes of this
paragraph, the service area of a utility owned by a
governmental unit shall be comprised of--
``(i) any area throughout which such
utility provided at all times during the
testing period--
``(I) in the case of a natural gas
utility, natural gas transmission or
distribution services, and
``(II) in the case of an electric
utility, electricity distribution
services,
``(ii) any area within a county contiguous
to the area described in clause (i) in which
retail customers of such utility are located if
such area is not also served by another utility
providing natural gas or electricity services,
as the case may be, and
``(iii) any area recognized as the service
area of such utility under State or Federal
law.''.
(b) Private Loan Financing Test not to Apply to Prepayments for
Natural Gas.--Paragraph (2) of section 141(c) (providing exceptions to
the private loan financing test) is amended by striking ``or'' at the
end of subparagraph (A), by striking the period at the end of
subparagraph (B) and inserting ``, or'', and by adding at the end the
following new subparagraph:
``(C) is a qualified natural gas supply contract
(as defined in section 148(b)(4)).''.
(c) Exception for Qualified Electric and Natural Gas Supply
Contracts.--Section 141(d) is amended by adding at the end the
following new paragraph:
``(7) Exception for qualified electric and natural gas
supply contracts.--The term `nongovernmental output property'
shall not include any contract for the prepayment of
electricity or natural gas which is not investment property
under section 148(b)(2).''.
(d) Effective Date.--The amendments made by this section shall
apply to obligations issued after the date of the enactment of this
Act.

Subtitle C--Production

PART I--OIL AND GAS PROVISIONS

SEC. 1341. OIL AND GAS FROM MARGINAL WELLS.

(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business credits), as amended by this Act, is amended by
adding at the end the following:

``SEC. 45J. CREDIT FOR PRODUCING OIL AND GAS FROM MARGINAL WELLS.

``(a) General Rule.--For purposes of section 38, the marginal well
production credit for any taxable year is an amount equal to the
product of--
``(1) the credit amount, and
``(2) the qualified credit oil production and the qualified
natural gas production which is attributable to the taxpayer.
``(b) Credit Amount.--For purposes of this section--
``(1) In general.--The credit amount is--
``(A) $3 per barrel of qualified crude oil
production, and
``(B) 50 cents per 1,000 cubic feet of qualified
natural gas production.
``(2) Reduction as oil and gas prices increase.--
``(A) In general.--The $3 and 50 cents amounts
under paragraph (1) shall each be reduced (but not
below zero) by an amount which bears the same ratio to
such amount (determined without regard to this
paragraph) as--
``(i) the excess (if any) of the applicable
reference price over $15 ($1.67 for qualified
natural gas production), bears to
``(ii) $3 ($0.33 for qualified natural gas
production).
The applicable reference price for a taxable year is
the reference price of the calendar year preceding the
calendar year in which the taxable year begins.
``(B) Inflation adjustment.--In the case of any
taxable year beginning in a calendar year after 2003,
each of the dollar amounts contained in subparagraph
(A) shall be increased to an amount equal to such
dollar amount multiplied by the inflation adjustment
factor for such calendar year (determined under section
43(b)(3)(B) by substituting `2002' for `1990').
``(C) Reference price.--For purposes of this
paragraph, the term `reference price' means, with
respect to any calendar year--
``(i) in the case of qualified crude oil
production, the reference price determined
under section 45K(d)(2)(C), and
``(ii) in the case of qualified natural gas
production, the Secretary's estimate of the
annual average wellhead price per 1,000 cubic
feet for all domestic natural gas.
``(c) Qualified Crude Oil and Natural Gas Production.--For purposes
of this section--
``(1) In general.--The terms `qualified crude oil
production' and `qualified natural gas production' mean
domestic crude oil or natural gas which is produced from a
qualified marginal well.
``(2) Limitation on amount of production which may
qualify.--
``(A) In general.--Crude oil or natural gas
produced during any taxable year from any well shall
not be treated as qualified crude oil production or
qualified natural gas production to the extent
production from the well during the taxable year
exceeds 1,095 barrels or barrel-of-oil equivalents (as
defined in section 45K(d)(5)).
``(B) Proportionate reductions.--
``(i) Short taxable years.--In the case of
a short taxable year, the limitations under
this paragraph shall be proportionately reduced
to reflect the ratio which the number of days
in such taxable year bears to 365.
``(ii) Wells not in production entire
year.--In the case of a well which is not
capable of production during each day of a
taxable year, the limitations under this
paragraph applicable to the well shall be
proportionately reduced to reflect the ratio
which the number of days of production bears to
the total number of days in the taxable year.
``(3) Definitions.--
``(A) Qualified marginal well.--The term `qualified
marginal well' means a domestic well--
``(i) the production from which during the
taxable year is treated as marginal production
under section 613A(c)(6), or
``(ii) which, during the taxable year--
``(I) has average daily production
of not more than 25 barrel-of-oil
equivalents (as so defined), and
``(II) produces water at a rate not
less than 95 percent of total well
effluent.
``(B) Crude oil, etc.--The terms `crude oil',
`natural gas', `domestic', and `barrel' have the
meanings given such terms by section 613A(e).
``(d) Other Rules.--
``(1) Production attributable to the taxpayer.--In the case
of a qualified marginal well in which there is more than one
owner of operating interests in the well and the crude oil or
natural gas production exceeds the limitation under subsection
(c)(2), qualifying crude oil production or qualifying natural
gas production attributable to the taxpayer shall be determined
on the basis of the ratio which taxpayer's revenue interest in
the production bears to the aggregate of the revenue interests
of all operating interest owners in the production.
``(2) Operating interest required.--Any credit under this
section may be claimed only on production which is attributable
to the holder of an operating interest.
``(3) Production from nonconventional sources excluded.--In
the case of production from a qualified marginal well which is
eligible for the credit allowed under section 45K for the
taxable year, no credit shall be allowable under this section
unless the taxpayer elects not to claim the credit under
section 45K with respect to the well.''.
(b) Credit Treated as Business Credit.--Section 38(b), as amended
by this Act, is amended by striking ``plus'' at the end of paragraph
(18), by striking the period at the end of paragraph (19) and inserting
``, plus'', and by adding at the end the following:
``(20) the marginal oil and gas well production credit
determined under section 45J(a).''.
(c) Carryback.--Subsection (a) of section 39 (relating to carryback
and carryforward of unused credits generally) is amended by adding at
the end the following:
``(3) 5-year carryback for marginal oil and gas well
production credit.--Notwithstanding subsection (d), in the case
of the marginal oil and gas well production credit--
``(A) this section shall be applied separately from
the business credit (other than the marginal oil and
gas well production credit),
``(B) paragraph (1) shall be applied by
substituting `5 taxable years' for `1 taxable years' in
subparagraph (A) thereof, and
``(C) paragraph (2) shall be applied--
``(i) by substituting `25 taxable years'
for `21 taxable years' in subparagraph (A)
thereof, and
``(ii) by substituting `24 taxable years'
for `20 taxable years' in subparagraph (B)
thereof.''.
(d) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1, as amended by this Act, is
amended by adding at the end the following:

``Sec. 45J. Credit for producing oil and gas from marginal wells.''.
(e) Effective Date.--The amendments made by this section shall
apply to production in taxable years beginning after December 31, 2003.

SEC. 1342. TEMPORARY SUSPENSION OF LIMITATION BASED ON 65 PERCENT OF
TAXABLE INCOME AND EXTENSION OF SUSPENSION OF TAXABLE
INCOME LIMIT WITH RESPECT TO MARGINAL PRODUCTION.

(a) Limitation Based on 65 Percent of Taxable Income.--Subsection
(d) of section 613A (relating to limitation on percentage depletion in
case of oil and gas wells) is amended by adding at the end the
following new paragraph:
``(6) Temporary suspension of taxable income limit.--
Paragraph (1) shall not apply to taxable years beginning after
December 31, 2003, and before January 1, 2005, including with
respect to amounts carried under the second sentence of
paragraph (1) to such taxable years.''.
(b) Extension of Suspension of Taxable Income Limit With Respect to
Marginal Production.--Subparagraph (H) of section 613A(c)(6) (relating
to temporary suspension of taxable income limit with respect to
marginal production) is amended by striking ``2004'' and inserting
``2005''.
(c) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 2003.

SEC. 1343. AMORTIZATION OF DELAY RENTAL PAYMENTS.

(a) In General.--Section 167 (relating to depreciation) is amended
by redesignating subsection (h) as subsection (i) and by inserting
after subsection (g) the following new subsection:
``(h) Amortization of Delay Rental Payments for Domestic Oil and
Gas Wells.--
``(1) In general.--Any delay rental payment paid or
incurred in connection with the development of oil or gas wells
within the United States (as defined in section 638) shall be
allowed as a deduction ratably over the 24-month period
beginning on the date that such payment was paid or incurred.
``(2) Half-year convention.--For purposes of paragraph (1),
any payment paid or incurred during the taxable year shall be
treated as paid or incurred on the mid-point of such taxable
year.
``(3) Exclusive method.--Except as provided in this
subsection, no depreciation or amortization deduction shall be
allowed with respect to such payments.
``(4) Treatment upon abandonment.--If any property to which
a delay rental payment relates is retired or abandoned during
the 24-month period described in paragraph (1), no deduction
shall be allowed on account of such retirement or abandonment
and the amortization deduction under this subsection shall
continue with respect to such payment.
``(5) Delay rental payments.--For purposes of this
subsection, the term `delay rental payment' means an amount
paid for the privilege of deferring development of an oil or
gas well under an oil or gas lease.''.
(b) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after the
date of the enactment of this Act.

SEC. 1344. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES.

(a) In General.--Section 167 (relating to depreciation), as amended
by this Act, is amended by redesignating subsection (i) as subsection
(j) and by inserting after subsection (h) the following new subsection:
``(i) Amortization of Geological and Geophysical Expenditures.--
``(1) In general.--Any geological and geophysical expenses
paid or incurred in connection with the exploration for, or
development of, oil or gas within the United States (as defined
in section 638) shall be allowed as a deduction ratably over
the 24-month period beginning on the date that such expense was
paid or incurred.
``(2) Special rules.--For purposes of this subsection,
rules similar to the rules of paragraphs (2), (3), and (4) of
subsection (h) shall apply.''.
(b) Conforming Amendment.--Section 263A(c)(3) is amended by
inserting ``167(h), 167(i),'' after ``under section''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after the
date of the enactment of this Act.

SEC. 1345. EXTENSION AND MODIFICATION OF CREDIT FOR PRODUCING FUEL FROM
A NONCONVENTIONAL SOURCE.

(a) In General.--Section 29 (relating to credit for producing fuel
from a nonconventional source) is amended by adding at the end the
following new subsection:
``(h) Extension for Other Facilities.--Notwithstanding subsection
(f)--
``(1) New oil and gas wells and facilities.--In the case of
a well or facility for producing qualified fuels described in
subparagraph (A) or (B) of subsection (c)(1) which was drilled
or placed in service after the date of the enactment of this
subsection and before January 1, 2007, this section shall apply
with respect to such fuels produced at such well or facility
and sold during the period--
``(A) beginning on the later of January 1, 2004, or
the date that such well is drilled or such facility is
placed in service, and
``(B) ending on the earlier of the date which is 4
years after the date such period began or December 31,
2009.
``(2) Old oil and gas wells and facilities.--In the case of
a well or facility producing qualified fuels described in
subparagraph (A) or (B)(i) of subsection (c)(1) or a facility
producing natural gas and byproducts by coal gasification from
lignite, subsection (f)(2) shall be applied by substituting
`2008' for `2003' with respect to wells and facilities
described in subsection (f)(1) with respect to such fuels.
``(3) Extension for facilities producing qualified fuel
from landfill gas.--
``(A) In general.--In the case of a facility for
producing qualified fuel from landfill gas which was
placed in service after June 30, 1998, and before
January 1, 2007, this section shall apply to fuel
produced at such facility and sold during the period--
``(i) beginning on the later of January 1,
2004, or the date that such facility is placed
in service, and
``(ii) ending on the earlier of the date
which is 4 years after the date such period
began or December 31, 2009.
``(B) Reduction of credit for certain landfill
facilities.--In the case of a facility to which
subparagraph (A) applies and which is located at a
landfill which is required pursuant to section
60.751(b)(2) or section 60.33c of title 40, Code of
Federal Regulations (as in effect on April 3, 2003) to
install and operate a collection and control system
which captures gas generated within the landfill,
subsection (a)(1) shall be applied to gas so captured
by substituting `$2' for `$3' for the taxable year
during which such system is required to be installed
and operated.
``(4) Facilities producing fuels from agricultural and
animal waste.--
``(A) In general.--In the case of any facility for
producing liquid, gaseous, or solid fuels from
qualified agricultural and animal wastes, including
such fuels when used as feedstocks, which is placed in
service after the date of the enactment of this
subsection and before January 1, 2007, this section
shall apply with respect to fuel produced at such
facility and sold during the period--
``(i) beginning on the later of January 1,
2004, or the date that such facility is placed
in service, and
``(ii) ending on the earlier of the date
which is 4 years after the date such period
began or December 31, 2009.
``(B) Qualified agricultural and animal waste.--For
purposes of this paragraph, the term `qualified
agricultural and animal waste' means agriculture and
animal waste, including by-products, packaging, and any
materials associated with the processing, feeding,
selling, transporting, or disposal of agricultural or
animal products or wastes.
``(5) Facilities producing refined coal.--
``(A) In general.--In the case of a facility
described in subparagraph (C) for producing refined
coal which is placed in service after the date of the
enactment of this subsection and before January 1,
2008, this section shall apply with respect to fuel
produced at such facility and sold before the close of
the 5-year period beginning on the date such facility
is placed in service.
``(B) Refined coal.--For purposes of this
paragraph, the term `refined coal' means a fuel which
is a liquid, gaseous, or solid synthetic fuel produced
from coal (including lignite) or high carbon fly ash,
including such fuel used as a feedstock.
``(C) Covered facilities.--
``(i) In general.--A facility is described
in this subparagraph if such facility produces
refined coal using a technology which the
taxpayer certifies (in such manner as the
Secretary may prescribe) results in--
``(I) a qualified emission
reduction, and
``(II) a qualified enhanced value.
``(ii) Qualified emission reduction.--For
purposes of this subparagraph, the term
`qualified emission reduction' means a
reduction of at least 20 percent of the
emissions of nitrogen oxide and either sulfur
dioxide or mercury released when burning the
refined coal (excluding any dilution caused by
materials combined or added during the
production process), as compared to the
emissions released when burning the feedstock
coal or comparable coal predominantly available
in the marketplace as of January 1, 2003.
``(iii) Qualified enhanced value.--For
purposes of this subparagraph, the term
`qualified enhanced value' means an increase of
at least 50 percent in the market value of the
refined coal (excluding any increase caused by
materials combined or added during the
production process), as compared to the value
of the feedstock coal.
``(iv) Advanced clean coal technology units
excluded.--A facility described in this
subparagraph shall not include any advanced
clean coal technology unit (as defined in
section 48A(e)).
``(6) Coalmine gas.--
``(A) In general.--This section shall apply to
coalmine gas--
``(i) captured or extracted by the taxpayer
during the period beginning on the day after
the date of the enactment of this subsection
and ending on December 31, 2006, and
``(ii) utilized as a fuel source or sold by
or on behalf of the taxpayer to an unrelated
person during such period.
``(B) Coalmine gas.--For purposes of this
paragraph, the term `coalmine gas' means any methane
gas which is--
``(i) liberated during or as a result of
coal mining operations, or
``(ii) extracted up to 10 years in advance
of coal mining operations as part of a specific
plan to mine a coal deposit.
``(C) Special rule for advanced extraction.--In the
case of coalmine gas which is captured in advance of
coal mining operations, the credit under subsection (a)
shall be allowed only after the date the coal
extraction occurs in the immediate area where the
coalmine gas was removed.
``(D) Noncompliance with pollution laws.--This
paragraph shall not apply to the capture or extraction
of coalmine gas from coal mining operations with
respect to any period in which such coal mining
operations are not in compliance with applicable
Federal pollution prevention, control, and permit
requirements.
``(7) Coke and coke gas.--In the case of a facility for
producing coke or coke gas which was placed in service before
January 1, 1993, or after June 30, 1998, and before January 1,
2007, this section shall apply with respect to coke and coke
gas produced in such facility and sold during the during the
period--
``(A) beginning on the later of January 1, 2004, or
the date that such facility is placed in service, and
``(B) ending on the earlier of the date which is 4
years after the date such period began or December 31,
2009.
``(8) Special rules.--In determining the amount of credit
allowable under this section solely by reason of this
subsection--
``(A) Fuels treated as qualified fuels.--Any fuel
described in paragraph (3), (4), (5), or (6) shall be
treated as a qualified fuel for purposes of this
section.
``(B) Daily limit.--The amount of qualified fuels
sold during any taxable year which may be taken into
account by reason of this subsection with respect to
any property or facility shall not exceed an average
barrel-of-oil equivalent of 200,000 cubic feet of
natural gas per day. Days before the date the property
or facility is placed in service shall not be taken
into account in determining such average.
``(C) Extension period to commence with unadjusted
credit amount and new phaseout adjustment.--For
purposes of applying subsection (b)(2), in the case of
fuels sold after 2003--
``(i) paragraphs (1)(A) and (2) of
subsection (b) shall be applied by substituting
`$35.00' for `$23.50', and
``(ii) subparagraph (B) of subsection
(d)(2) shall be applied by substituting `2002'
for `1979'.
``(D) Denial of double benefit.--This subsection
shall not apply to any facility producing qualified
fuels for which a credit was allowed under this section
for the taxable year or any preceding taxable year by
reason of subsection (g).''.
(b) Treatment as Business Credit.--
(1) Credit moved to subpart relating to business related
credits.--The Internal Revenue Code of 1986 is amended by
redesignating section 29, as amended by this Act, as section
45K and by moving section 45K (as so redesignated) from subpart
B of part IV of subchapter A of chapter 1 to the end of subpart
D of part IV of subchapter A of chapter 1.
(2) Credit treated as business credit.--Section 38(b) is
amended by striking ``plus'' at the end of paragraph (19), by
striking the period at the end of paragraph (20) and inserting
``, plus'', and by adding at the end the following:
``(21) the nonconventional source production credit
determined under section 45K(a).''.
(3) Conforming amendments.--
(A) Section 30(b)(2)(A), as redesignated by section
1317(a), is amended by striking ``sections 27 and 29''
and inserting ``section 27''.
(B) Sections 43(b)(2) and 613A(c)(6)(C) are each
amended by striking ``section 29(d)(2)(C)'' and
inserting ``section 45K(d)(2)(C)''.
(C) Section 45K(a), as redesignated by paragraph
(1), is amended by striking ``At the election of the
taxpayer, there shall be allowed as a credit against
the tax imposed by this chapter for the taxable year''
and inserting ``For purposes of section 38, if the
taxpayer elects to have this section apply, the
nonconventional source production credit determined
under this section for the taxable year is''.
(D) Section 45K(b), as so redesignated, is amended
by striking paragraph (6).
(E) Section 53(d)(1)(B)(iii) is amended by striking
``under section 29'' and all that follows through ``or
not allowed''.
(F) Section 55(c)(2) is amended by striking
``29(b)(6),''.
(G) Subsection (a) of section 772 is amended by
inserting ``and'' at the end of paragraph (9), by
striking paragraph (10), and by redesignating paragraph
(11) as paragraph (10).
(H) Paragraph (5) of section 772(d) is amended by
striking ``the foreign tax credit, and the credit
allowable under section 29'' and inserting ``and the
foreign tax credit''.
(I) The table of sections for subpart B of part IV
of subchapter A of chapter 1 is amended by striking the
item relating to section 29.
(J) The table of sections for subpart D of part IV
of subchapter A of chapter 1, as amended by this Act,
is amended by inserting after the item relating to
section 45J the following new item:

``Sec. 45K. Credit for producing fuel from a nonconventional source.''.
(c) Determinations Under Natural Gas Policy Act of 1978.--
Subparagraph (A) of section 45K(c)(2), as redesignated by subsection
(b)(1), is amended--
(1) by inserting ``by the Secretary, after consultation
with the Federal Energy Regulatory Commission,'' after ``shall
be made'', and
(2) by inserting ``(as in effect before the repeal of such
section)'' after ``1978''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to fuel produced
and sold after December 31, 2003, in taxable years ending after
such date.
(2) Determinations under natural gas policy act of 1978.--
The amendments made by subsection (c) shall apply as if
included in the provisions repealing section 503 of the Natural
Gas Policy Act of 1978.

PART II--ALTERNATIVE MINIMUM TAX PROVISIONS

SEC. 1346. NEW NONREFUNDABLE PERSONAL CREDITS ALLOWED AGAINST REGULAR
AND MINIMUM TAXES.

(a) In General.--
(1) Section 25c.--Section 25C(b), as added by section 1301
of this Act, is amended by adding at the end the following new
paragraph:
``(3) Limitation based on amount of tax.--The credit
allowed under subsection (a) for the taxable year shall not
exceed the excess of--
``(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed by
section 55, over
``(B) the sum of the credits allowable under this
subpart (other than this section and section 25D) and
section 27 for the taxable year.''.
(2) Section 25d.--Section 25D(b), as added by section 1304
of this Act, is amended by adding at the end the following new
paragraph:
``(3) Limitation based on amount of tax.--The credit
allowed under subsection (a) for the taxable year shall not
exceed the excess of--
``(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed by
section 55, over
``(B) the sum of the credits allowable under this
subpart (other than this section) and section 27 for
the taxable year.''.
(b) Conforming Amendments.--
(1) Section 23(b)(4)(B) is amended by inserting ``and
sections 25C and 25D'' after ``this section''.
(2) Section 24(b)(3)(B) is amended by striking ``and 25B''
and inserting ``, 25B, 25C, and 25D''.
(3) Section 25(e)(1)(C) is amended by inserting ``25C, and
25D'' after ``25B,''.
(4) Section 25B(g)(2) is amended by striking ``section 23''
and inserting ``sections 23, 25C, and 25D''.
(5) Section 26(a)(1) is amended by striking ``and 25B'' and
inserting ``25B, 25C, and 25D''.
(6) Section 904(h) is amended by striking ``and 25B'' and
inserting ``25B, 25C, and 25D''.
(7) Section 1400C(d) is amended by striking ``and 25B'' and
inserting ``25B, 25C, and 25D''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.

SEC. 1347. BUSINESS RELATED ENERGY CREDITS ALLOWED AGAINST REGULAR AND
MINIMUM TAX.

(a) In General.--Subsection (c) of section 38 (relating to
limitation based on amount of tax) is amended by redesignating
paragraph (4) as paragraph (5) and by inserting after paragraph (3) the
following new paragraph:
``(4) Special rules for specified energy credits.--
``(A) In general.--In the case of specified energy
credits--
``(i) this section and section 39 shall be
applied separately with respect to such
credits, and
``(ii) in applying paragraph (1) to such
credits--
``(I) the tentative minimum tax
shall be treated as being zero, and
``(II) the limitation under
paragraph (1) (as modified by subclause
(I)) shall be reduced by the credit
allowed under subsection (a) for the
taxable year (other than the specified
energy credits).
``(B) Specified energy credits.--For purposes of
this subsection, the term `specified energy credits'
means the credits determined under sections 45G, 45H,
45I, and 45J. For taxable years beginning after
December 31, 2003, such term includes the credit
determined under section 40. For taxable years
beginning after December 31, 2003, and before January
1, 2006, such term includes the credit determined under
section 43.
``(C) Special rule for electricity produced from
qualified facilities.--For purposes of this subsection,
the term `specified energy credits' shall include the
credit determined under section 45 to the extent that
such credit is attributable to electricity produced--
``(i) at a facility which is originally
placed in service after the date of the
enactment of this paragraph, and
``(ii) during the 4-year period beginning
on the date that such facility was originally
placed in service.''.
(b) Conforming Amendments.--
(1) Paragraph (2)(A)(ii)(II) of section 38(c) is amended by
striking ``or'' and inserting a comma and by inserting ``, and
the specified energy credits'' after ``employee credit''.
(2) Paragraph (3)(A)(ii)(II) of section 38(c) is amended by
inserting ``and the specified energy credits'' after ``employee
credit''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment of this
Act.

SEC. 1348. TEMPORARY REPEAL OF ALTERNATIVE MINIMUM TAX PREFERENCE FOR
INTANGIBLE DRILLING COSTS.

(a) In General.--Clause (ii) of section 57(a)(2)(E) is amended by
adding at the end the following new sentence: ``The preceding sentence
shall not apply to taxable years beginning after December 31, 2003, and
before January 1, 2006.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2003.

PART III--CLEAN COAL INCENTIVES

SEC. 1351. CREDIT FOR CLEAN COAL TECHNOLOGY UNITS.

(a) In General.--Subpart E of part IV of subchapter A of chapter 1
(relating to rules for computing investment credit) is amended by
inserting after section 48 the following new section:

``SEC. 48A. CLEAN COAL TECHNOLOGY CREDIT.

``(a) In General.--For purposes of section 46, the clean coal
technology credit for any taxable year is an amount equal to the
applicable percentage of the basis of qualified clean coal property
placed in service during such year.
``(b) Applicable Percentage.--For purposes of this section, the
applicable percentage is--
``(1) 15 percent in the case of property placed in service
in connection with any basic clean coal technology unit, and
``(2) 17.5 percent in the case of property placed in
service in connection with any advanced clean coal technology
unit.
``(c) Qualified Clean Coal Property.--For purposes of this
section--
``(1) In general.--The term `qualified clean coal property'
means section 1245 property--
``(A) which is installed in connection with--
``(i) an existing coal-based unit as part
of the conversion of such unit to any basic or
advanced clean coal technology unit, or
``(ii) any new advanced clean coal
technology unit,
``(B) which is placed in service after December 31,
2003, and before--
``(i) in the case of property to which
subsection (b)(1) applies, January 1, 2014, and
``(ii) in the case of property to which
subsection (b)(2) applies, January 1, 2017
(January 1, 2013, in the case of property
installed in connection with an eligible
advanced pulverized coal or atmospheric
fluidized bed combustion technology unit),
``(C) the original use of which commences with the
taxpayer, and
``(D) which has a useful life of not less than 4
years.
``(2) Existing coal-based unit.--The term `existing coal-
based unit' means a coal-based electricity generating steam
generator-turbine unit--
``(A) which is not a basic or advanced clean coal
technology unit, and
``(B) which is in operation on or before January 1,
2004.
In the case of a unit being converted to a basic clean coal
technology unit, such term shall not include a unit having a
nameplate capacity rating of more than 300 megawatts.
``(3) New advanced clean coal technology unit.--The term
`new advanced clean coal technology unit' means any advanced
clean coal technology unit which is placed in service after
December 31, 2003, and the original use of which commences with
the taxpayer.
``(d) Basic Clean Coal Technology Unit.--For purposes of this
section--
``(1) In general.--The term `basic clean coal technology
unit' means a unit which--
``(A) uses clean coal technology (including
advanced pulverized coal or atmospheric fluidized bed
combustion, pressurized fluidized bed combustion, and
integrated gasification combined cycle) for the
production of electricity,
``(B) uses an input of at least 75 percent coal to
produce at least 50 percent of its thermal output as
electricity,
``(C) has a design net heat rate of at least 500
less than that of the existing coal-based unit prior to
its conversion,
``(D) has a maximum design net heat rate of not
more than 9,500, and
``(E) meets the pollution control requirements of
paragraph (2).
Such term shall not include an advanced clean coal technology
unit.
``(2) Pollution control requirements.--
``(A) In general.--A unit meets the requirements of
this paragraph if--
``(i) its emissions of sulfur dioxide,
nitrogen oxide, or particulates meet the lower
of the emission levels for each such emission
specified in--
``(I) subparagraph (B), or
``(II) the new source performance
standards of the Clean Air Act (42
U.S.C. 7411) which are in effect for
the category of source at the time of
the conversion of the unit, and
``(ii) its emissions do not exceed any
relevant emission level specified by regulation
pursuant to the hazardous air pollutant
requirements of the Clean Air Act (42 U.S.C.
7412) in effect at the time of the conversion
of the unit.
``(B) Specific levels.--The levels specified in
this subparagraph are--
``(i) in the case of sulfur dioxide
emissions, 50 percent of the sulfur dioxide
emission levels specified in the new source
performance standards of the Clean Air Act (42
U.S.C. 7411) in effect on the date of the
enactment of this section for the category of
source,
``(ii) in the case of nitrogen oxide
emissions--
``(I) 0.1 pound per million Btu of
heat input if the unit is not a
cyclone-fired boiler, and
``(II) if the unit is a cyclone-
fired boiler, 15 percent of the
uncontrolled nitrogen oxide emissions
from such boilers, and
``(iii) in the case of particulate
emissions, 0.02 pound per million Btu of heat
input.
``(3) Design net heat rate.--The design net heat rate with
respect to any unit, measured in Btu per kilowatt hour (HHV)--
``(A) shall be based on the design annual heat
input to and the design annual net electrical power,
fuels, and chemicals output from such unit (determined
without regard to such unit's co-generation of steam),
``(B) shall be adjusted for the heat content of the
design coal to be used by the unit if it is less than
12,000 Btu per pound according to the following
formula:
``(C) shall be corrected for the site reference
conditions of--
``(i) elevation above sea level of 500
feet,
``(ii) air pressure of 14.4 pounds per
square inch absolute (psia),
``(iii) temperature, dry bulb of 63 deg.F,
``(iv) temperature, wet bulb of 54 deg.F,
and
``(v) relative humidity of 55 percent, and
``(D) if carbon capture controls have been
installed with respect to any existing coal-based unit
and such controls remove at least 50 percent of the
unit's carbon dioxide emissions, shall be adjusted up
to the design heat rate level which would have resulted
without the installation of such controls.
``(4) HHV.--The term `HHV' means higher heating value.
``(e) Advanced Clean Coal Technology Unit.--For purposes of this
section--
``(1) In general.--The term `advanced clean coal technology
unit' means any electricity generating unit of the taxpayer--
``(A) which is--
``(i) an eligible advanced pulverized coal
or atmospheric fluidized bed combustion
technology unit,
``(ii) an eligible pressurized fluidized
bed combustion technology unit,
``(iii) an eligible integrated gasification
combined cycle technology unit, or
``(iv) an eligible other technology unit,
``(B) which uses an input of at least 75 percent
coal to produce at least 50 percent of its thermal
output as electricity, and
``(C) which meets the carbon emission rate
requirements of paragraph (6).
``(2) Eligible advanced pulverized coal or atmospheric
fluidized bed combustion technology unit.--The term `eligible
advanced pulverized coal or atmospheric fluidized bed
combustion technology unit' means a clean coal technology unit
using advanced pulverized coal or atmospheric fluidized bed
combustion technology which has a design net heat rate of not
more than 8,500 (8,900 in the case of units placed in service
before 2009).
``(3) Eligible pressurized fluidized bed combustion
technology unit.--The term `eligible pressurized fluidized bed
combustion technology unit' means a clean coal technology unit
using pressurized fluidized bed combustion technology which has
a design net heat rate of not more than 7,720 (8,900 in the
case of units placed in service before 2009, and 8,500 in the
case of units placed in service after 2008 and before 2013).
``(4) Eligible integrated gasification combined cycle
technology unit.--The term `eligible integrated gasification
combined cycle technology unit' means a clean coal technology
unit using integrated gasification combined cycle technology,
with or without fuel or chemical co-production--
``(A) which has a design net heat rate of not more
than 7,720 (8,900 in the case of units placed in
service before 2009, and 8,500 in the case of units
placed in service after 2008 and before 2013), and
``(B) has a net thermal efficiency (HHV) using coal
with fuel or chemical co-production of not less than
44.2 percent (38.4 percent in the case of units placed
in service before 2009, and 40.2 percent in the case of
units placed in service after 2008 and before 2013).
``(5) Eligible other technology unit.--The term `eligible
other technology unit' means a clean coal technology unit--
``(A) which uses any other technology for the
production of electricity, and
``(B) which has a design net heat rate which meets
the requirement of paragraph (2).
``(6) Carbon emission rate requirements.--
``(A) In general.--Except as provided in
subparagraph (B), a unit meets the requirements of this
paragraph if--
``(i) in the case of a unit using design
coal with a heat content of not more than 9,000
Btu per pound, the carbon emission rate is less
than 0.60 pound of carbon per kilowatt hour,
and
``(ii) in the case of a unit using design
coal with a heat content of more than 9,000 Btu
per pound, the carbon emission rate is less
than 0.54 pound of carbon per kilowatt hour.
``(B) Eligible other technology unit.--In the case
of an eligible other technology unit, subparagraph (A)
shall be applied by substituting `0.51' and `0.459' for
`0.60' and `0.54', respectively.
``(f) National Limitations on Credit.--For purposes of this
section--
``(1) In general.--The amount of credit which would (but
for this subsection) be allowed with respect to any property
shall not exceed the amount which bears the same ratio to such
amount of credit as--
``(A) the national megawatt capacity limitation
allocated to the taxpayer with respect to the basic or
advanced clean coal technology unit to which such
property relates, bears to
``(B) the total megawatt capacity of such unit.
The capacity described in subparagraph (B) shall be the
reasonably expected capacity after the installation of the
property.
``(2) Amount of national limitation.--
``(A) Advanced units.--The national megawatt
capacity limitation for advanced clean coal technology
units shall be 6,000 megawatts. Of such amount, the
national megawatt capacity limitation is--
``(i) for advanced clean coal technology
units using advanced pulverized coal or
atmospheric fluidized bed combustion
technology, not more than 1,500 megawatts (not
more than 750 megawatts in the case of units
placed in service before 2009),
``(ii) for such units using pressurized
fluidized bed combustion technology, not more
than 750 megawatts (not more than 375 megawatts
in the case of units placed in service before
2009),
``(iii) for such units using integrated
gasification combined cycle technology, with or
without fuel or chemical co-production, not
more than 3,000 megawatts (not more than 1,250
megawatts in the case of units placed in
service before 2009), and
``(iv) for such units using other
technology for the production of electricity,
not more than 750 megawatts (not more than 375
megawatts in the case of units placed in
service before 2009).
``(B) Basic units.--The national megawatt capacity
limitation for basic clean coal technology units shall
be 4,000 megawatts.
``(3) Allocation of limitation.--The Secretary shall
allocate the national megawatt capacity limitations in such
manner as the Secretary may prescribe, except that the
Secretary may not allocate more than 300 megawatts to any basic
clean coal technology unit.
``(4) Regulations.--Not later than 6 months after the date
of the enactment of this section, the Secretary shall prescribe
such regulations as may be necessary or appropriate to carry
out the purposes of this subsection. Such regulations shall
provide a certification process under which the Secretary,
after consultation with the Secretary of Energy, shall approve
and allocate the national megawatt capacity limitations--
``(A) to encourage that units with the highest
thermal efficiencies, when adjusted for the heat
content of the design coal and site reference
conditions, and environmental performance, be placed in
service as soon as possible, and
``(B) to allocate capacity to taxpayers which have
a definite and credible plan for placing into
commercial operation a basic or advanced clean coal
technology unit, including--
``(i) a site,
``(ii) contractual commitments for
procurement and construction or, in the case of
regulated utilities, the agreement of the State
utility commission,
``(iii) filings for all necessary
preconstruction approvals,
``(iv) a demonstrated record of having
successfully completed comparable projects on a
timely basis, and
``(v) such other factors which the
Secretary determines are appropriate.
``(g) Special Rules.--For purposes of this section--
``(1) Certain progress expenditure rules made applicable.--
Rules similar to the rules of subsections (c)(4) and (d) of
section 46 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990) shall
apply for purposes of this section.
``(2) Property financed by subsidized financing or
industrial development bonds.--Rules similar to the rules of
section 45(b)(3) shall apply for purposes of this section.
``(3) Noncompliance with pollution laws.--The terms `basic
clean coal technology unit' and `advanced clean coal technology
unit' shall not include any unit which is not in compliance
with the applicable Federal pollution prevention, control, and
permit requirements at any time during the period applicable
under subsection (c)(1)(B).
``(4) Denial of credit for units receiving certain other
federal assistance.--The terms `basic clean coal technology
unit' and `advanced clean coal technology unit' shall not
include any unit if, at any time during the period applicable
under subsection (c)(1)(B), any funding is provided to such
unit under the Clean Coal Technology Program, the Power Plant
Improvement Initiative, or the Clean Coal Power Initiative
administered by the Secretary of Energy.
``(5) Coordination with other credits.--This section shall
not apply to any property with respect to which the
rehabilitation credit under section 47, the energy credit under
section 48, or any credit under section 45 or 45K is allowable
unless the taxpayer elects to waive the application of such
credit to such property.''.
(b) Special Recapture Rules.--
(1) Subsection (a) of section 50 is amended by
redesignating paragraph (3), (4), and (5) as paragraphs (4),
(5), and (6), respectively, and by inserting after paragraph
(2) the following new paragraph:
``(3) Special rules for clean coal technology credits.--
``(A) Early disposition, etc.--If, during any
taxable year, qualified clean coal property is disposed
of, or otherwise ceases to be part of a basic or
advanced clean coal technology unit with respect to the
taxpayer, before the close of the recovery period under
section 168 for such unit, then the tax under this
chapter for such taxable year shall be increased by--
``(i) the aggregate decrease in the credits
allowed under section 38 for all prior taxable
years which would have resulted solely from
reducing to zero any credit determined under
section 48A with respect to such property,
multiplied by
``(ii) a fraction--
``(I) the numerator of which is the
number of years in the period beginning
with the year of such disposition or
cessation and ending with the last year
of such recovery period, and
``(II) the denominator of which is
the total number of years in such
recovery period.
``(B) Property ceases to qualify for progress
expenditures.--Rules similar to the rules of this
paragraph shall apply in cases where qualified progress
expenditures were taken into account under the rules
referred to in section 48A(g)(1).
``(C) Increased recapture in certain cases.--The
fraction in subparagraph (A)(ii) shall be 1 in any case
in which the property ceases to be a basic or advanced
clean coal technology unit by reason of paragraph (3),
(4), or (5) of section 48A(g).
``(D) Coordination with other recapture rules.--
Paragraphs (1) and (2) shall not apply to qualified
clean coal property.
``(E) Definitions.--Terms used in this section
which are also used in section 48A shall have the
meanings given to such terms in section 48A.''.
(2) Paragraph (4) of section 50(a), as redesignated by
paragraph (1), is amended by striking ``or (2)'' and inserting
``, (2), or (3)''.
(3) Paragraph (5) of section 50(a), as so redesignated, is
amended by striking ``and (2)'' and inserting ``, (2), and
(3)''.
(4) Section 1371(d)(1) is amended by striking ``section
50(a)(4)'' and inserting ``section 50(a)(5)''.
(c) Technical Amendments.--
(1) Section 46 (relating to amount of credit) is amended by
striking ``and'' at the end of paragraph (2), by striking the
period at the end of paragraph (3) and inserting ``, and'', and
by adding at the end the following new paragraph:
``(4) the clean coal technology credit.''.
(2) Section 49(a)(1)(C) is amended by striking ``and'' at
the end of clause (ii), by striking the period at the end of
clause (iii) and inserting ``, and'', and by adding at the end
the following new clause:
``(iv) the portion of the basis of any
qualified clean coal property (as defined by
section 48A(c)).''.
(3) The table of sections for subpart E of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 48 the following new item:

``Sec. 48A. Clean coal technology credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to periods after December 31, 2003, under rules similar to the
rules of section 48(m) of the Internal Revenue Code of 1986 (as in
effect on the day before the date of the enactment of the Revenue
Reconciliation Act of 1990).

SEC. 1352. EXPANSION OF AMORTIZATION FOR CERTAIN POLLUTION CONTROL
FACILITIES.

(a) Eligibility of Post-1975 Pollution Control Facilities.--
(1) In general.--Paragraph (1) of section 169(d) is amended
by striking ``before January 1, 1976,'' and by striking ``a new
identifiable'' and inserting ``an identifiable''.
(2) Identifiable treatment facility.--Paragraph (4) of
section 169(d) is amended to read as follows:
``(4) Identifiable treatment facility.--For purposes of
paragraph (1), the term `identifiable treatment facility'
includes only tangible property (not including a building and
its structural components, other than a building which is
exclusively a treatment facility) which is of a character
subject to the allowance for depreciation provided in section
167, which is identifiable as a treatment facility, and which
is property--
``(A) the construction, reconstruction, or erection
of which is completed by the taxpayer, or
``(B) the original use of the property commences
with the taxpayer.''.
(3) Technical amendment.--Section 169(d)(3) is amended by
striking ``Health, Education, and Welfare'' and inserting
``Health and Human Services''.
(b) Coordination With Section 48A Investment Credit.--Section 169
is amended by redesignating subsections (e) though (j) as subsection
(f) through (k), respectively, and by inserting after subsection (d)
the following new subsection:
``(e) Coordination With Section 48A Investment Credit.--
``(1) In general.--In the case of any treatment facility
used in connection with a plant or other property to which an
amount is allocated under section 48A(f), this section shall
apply only if such plant or other property was in operation
before January 1, 1976.
``(2) 36-month amortization with respect to pre-1976 plants
not allocated credit.--References in this section to 60 months
shall be treated as references to 36 months in the case of
treatment facilities used in connection with a plant or other
property in operation before January 1, 1976, if no allocation
is made under section 48A(f) with respect to such plant or
property.''.
(c) Effective Date.--The amendments made by this section shall
apply to facilities placed in service after the date of the enactment
of this Act.

SEC. 1353. 5-YEAR RECOVERY PERIOD FOR ELIGIBLE INTEGRATED GASIFICATION
COMBINED CYCLE TECHNOLOGY UNIT ELIGIBLE FOR CREDIT.

(a) In General.--Subparagraph (B) of section 168(e)(3) (defining 5-
year property) is amended by striking ``and'' at the end of clause (v),
by striking the period at the end of clause (vi) and inserting ``,
and'', and by inserting after clause (vi) the following new clause:
``(vii) any section 1245 property which is
part of an eligible integrated gasification
combined cycle technology unit (as defined in
section 48A(e)(4)) for which an allocation is
made under section 48A(f).''.
(b) Alternative System.--The table contained in section
168(g)(3)(B) (relating to special rule for certain property assigned to
classes) is amended by inserting after the item relating to
subparagraph (B)(iii) the following new item:

``(B) (vii).................................................      20''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act in taxable years ending after such date.

PART IV--HIGH VOLUME NATURAL GAS PROVISIONS

SEC. 1355. HIGH VOLUME NATURAL GAS PIPE TREATED AS 7-YEAR PROPERTY.

(a) In General.--Section 168(e)(3)(C) (defining 7-year property),
as amended by this Act, is amended by striking ``and'' at the end of
clause (ii), by redesignating clause (iii) as clause (iv), and by
inserting after clause (ii) the following new clause:
``(iii) any high volume natural gas pipe
the original use of which commences with the
taxpayer after the date of the enactment of
this clause, and''.
(b) High Volume Natural Gas Pipe.--Section 168(i) (relating to
definitions and special rules), as amended by this Act, is amended by
adding at the end the following new paragraph:
``(17) High volume natural gas pipe.--The term `high volume
natural gas pipe' means--
``(A) pipe which has an interior diameter of at
least 42 inches and which is part of a natural gas
pipeline system, and
``(B) any related equipment and appurtenances used
in connection with such pipe.''.
(c) Alternative System.--The table contained in section
168(g)(3)(B) (relating to special rule for certain property assigned to
classes), as amended by this Act, is amended by inserting after the
item relating to subparagraph (C)(ii) the following new item:

``(C) (iii).................................................      22''.
(d) Alternative Minimum Tax Exception.--Subparagraph (B) of section
56(a)(1), as amended by this Act, is amended by inserting before the
period the following: ``, or in section 168(e)(3)(C)(iii)''.
(e) Effective Date.--The amendments made by this section shall
apply to property placed in service on or after the date of the
enactment of this Act.

SEC. 1356. EXTENSION OF ENHANCED OIL RECOVERY CREDIT TO HIGH VOLUME
NATURAL GAS FACILITIES.

(a) In General.--Section 43(c)(1) (defining qualified enhanced oil
recovery costs) is amended by adding at the end the following new
subparagraph:
``(D) Any amount which is paid or incurred during
the taxable year in connection with the construction of
a gas treatment plant which--
``(i) prepares natural gas for
transportation through a pipeline with a
capacity of at least 1,000,000,000,000 Btu of
natural gas per day, and
``(ii) produces carbon dioxide which is
injected into hydrocarbon-bearing geological
formations.''.
(b) Effective Date.--The amendment made by this section shall apply
to costs paid or incurred in taxable years beginning after December 31,
2003.

Subtitle D--Additional Provisions

SEC. 1361. EXTENSION OF ACCELERATED DEPRECIATION BENEFIT FOR ENERGY-
RELATED BUSINESSES ON INDIAN RESERVATIONS.

Paragraph (8) of section 168(j) (relating to termination) is
amended by adding at the end the following new sentence: ``The
preceding sentence shall be applied by substituting ``December 31,
2005'' for ``December 31, 2004'' in the case of property placed in
service as part of a facility for--
``(A) the generation or transmission of electricity
(including from any qualified energy resource, as
defined in section 45(c)),
``(B) an oil or gas well,
``(C) the transmission or refining of oil or gas,
or
``(D) the production of any qualified fuel (as
defined in section 45K(c)).''.

SEC. 1362. PAYMENT OF DIVIDENDS ON STOCK OF COOPERATIVES WITHOUT
REDUCING PATRONAGE DIVIDENDS.

(a) In General.--Subsection (a) of section 1388 (relating to
patronage dividend defined) is amended by adding at the end the
following: ``For purposes of paragraph (3), net earnings shall not be
reduced by amounts paid during the year as dividends on capital stock
or other proprietary capital interests of the organization to the
extent that the articles of incorporation or bylaws of such
organization or other contract with patrons provide that such dividends
are in addition to amounts otherwise payable to patrons which are
derived from business done with or for patrons during the taxable
year.''.
(b) Effective Date.--The amendment made by this section shall apply
to distributions in taxable years ending after the date of the
enactment of this Act.

SEC. 1363. DISTRIBUTIONS FROM PUBLICLY TRADED PARTNERSHIPS TREATED AS
QUALIFYING INCOME OF REGULATED INVESTMENT COMPANIES.

(a) In General.--Paragraph (2) of section 851(b) (defining
regulated investment company) is amended to read as follows:
``(2) at least 90 percent of its gross income is derived
from--
``(A) dividends, interest, payments with respect to
securities loans (as defined in section 512(a)(5)), and
gains from the sale or other disposition of stock or
securities (as defined in section 2(a)(36) of the
Investment Company Act of 1940, as amended) or foreign
currencies, or other income (including but not limited
to gains from options, futures or forward contracts)
derived with respect to its business of investing in
such stock, securities, or currencies, and
``(B) distributions or other income derived from an
interest in a qualified publicly traded partnership (as
defined in subsection (h)); and''.
(b) Source Flow-Through Rule not to Apply.--The last sentence of
section 851(b) is amended by inserting ``(other than a qualified
publicly traded partnership as defined in subsection (h))'' after
``derived from a partnership''.
(c) Limitation on Ownership.--Subsection (c) of section 851 is
amended by redesignating paragraph (5) as paragraph (6) and inserting
after paragraph (4) the following new paragraph:
``(5) The term `outstanding voting securities of such
issuer' shall include the equity securities of a qualified
publicly traded partnership (as defined in subsection (h)).''.
(d) Definition of Qualified Publicly Traded Partnership.--Section
851 is amended by adding at the end the following new subsection:
``(h) Qualified Publicly Traded Partnership.--For purposes of this
section, the term `qualified publicly traded partnership' means a
publicly traded partnership described in section 7704(b) other than a
partnership which would satisfy the gross income requirements of
section 7704(c)(2) if qualifying income included only income described
in subsection (b)(2)(A).''.
(e) Definition of Qualifying Income.--Section 7704(d)(4) is amended
by striking ``section 851(b)(2)'' and inserting ``section
851(b)(2)(A)''.
(f) Limitation on Composition of Assets.--Subparagraph (B) of
section 851(b)(3) is amended to read as follows:
``(B) not more than 25 percent of the value of its
total assets is invested in--
``(i) the securities (other than Government
securities or the securities of other regulated
investment companies) of any one issuer,
``(ii) the securities (other than the
securities of other regulated investment
companies) of two or more issuers which the
taxpayer controls and which are determined,
under regulations prescribed by the Secretary,
to be engaged in the same or similar trades or
businesses or related trades or businesses, or
``(iii) the securities of one or more
qualified publicly traded partnerships (as
defined in subsection (h)).''.
(g) Application of Special Passive Activity Rule to Regulated
Investment Companies.--Subsection (k) of section 469 (relating to
separate application of section in case of publicly traded
partnerships) is amended by adding at the end the following new
paragraph:
``(4) Application to regulated investment companies.--For
purposes of this section, a regulated investment company (as
defined in section 851) holding an interest in a qualified
publicly traded partnership (as defined in section 851(h))
shall be treated as a taxpayer described in subsection (a)(2)
with respect to items attributable to such interest.''.
(h) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.

SEC. 1364. CEILING FANS.

(a) In General.--Subchapter II of chapter 99 of the Harmonized
Tariff Schedule of the United States is amended by inserting in
numerical sequence the following new heading:

``      9902.84.14      Ceiling fans for    Free         No change        No change        On or before 12/  ''.
permanent                                                          31/2005
installation
(provided for in
subheading
8414.51.00)......

(b) Effective Date.--The amendment made by this section applies to
goods entered, or withdrawn from warehouse, for consumption on or after
the 15th day after the date of enactment of this Act.

SEC. 1365. CERTAIN STEAM GENERATORS, AND CERTAIN REACTOR VESSEL HEADS,
USED IN NUCLEAR FACILITIES.

(a) Certain Steam Generators.--Heading 9902.84.02 of the Harmonized
Tariff Schedule of the United States is amended by striking ``12/31/
2006'' and inserting ``12/31/2008''.
(b) Certain Reactor Vessel Heads.--Subchapter II of chapter 99 of
the Harmonized Tariff Schedule of the United States is amended by
inserting in numerical sequence the following new heading:

``      9902.84.03      Reactor vessel      Free         No change        No change        On or before 12/  ''.
heads for nuclear                                                  31/2007
reactors
(provided for in
subheading
8401.40.00)......

(c) Effective Date.--
(1) Subsection (a).--The amendment made by subsection (a)
shall take effect on the date of the enactment of this Act.
(2) Subsection (b).--The amendment made by subsection (b)
shall apply to goods entered, or withdrawn from warehouse, for
consumption on or after the 15th day after the date of the
enactment of this Act.

SEC. 1366. BROWNFIELDS DEMONSTRATION PROGRAM FOR QUALIFIED GREEN
BUILDING AND SUSTAINABLE DESIGN PROJECTS.

(a) Treatment as Exempt Facility Bond.--Subsection (a) of section
142 (relating to the definition of exempt facility bond) is amended by
striking ``or'' at the end of paragraph (12), by striking the period at
the end of paragraph (13) and inserting ``, or'', and by inserting at
the end the following new paragraph:
``(14) qualified green building and sustainable design
projects.''.
(b) Qualified Green Building and Sustainable Design Projects.--
Section 142 (relating to exempt facility bonds) is amended by adding at
the end thereof the following new subsection:
``(l) Qualified Green Building and Sustainable Design Projects.--
``(1) In general.--For purposes of subsection (a)(14), the
term `qualified green building and sustainable design project'
means any project which is designated by the Secretary, after
consultation with the Administrator of the Environmental
Protection Agency, as a qualified green building and
sustainable design project and which meets the requirements of
clauses (i), (ii), (iii), and (iv) of paragraph (4)(A).
``(2) Designations.--
``(A) In general.--Within 60 days after the end of
the application period described in paragraph (3)(A),
the Secretary, after consultation with the
Administrator of the Environmental Protection Agency,
shall designate qualified green building and
sustainable design projects. At least one of the
projects designated shall be located in, or within a
10-mile radius of, an empowerment zone as designated
pursuant to section 1391, and at least one of the
projects designated shall be located in a rural State.
No more than one project shall be designated in a
State. A project shall not be designated if such
project includes a stadium or arena for professional
sports exhibitions or games.
``(B) Minimum conservation and technology
innovation objectives.--The Secretary, after
consultation with the Administrator of the
Environmental Protection Agency, shall ensure that, in
the aggregate, the projects designated shall--
``(i) reduce electric consumption by more
than 150 megawatts annually as compared to
conventional construction,
``(ii) reduce daily sulfur dioxide
emissions by at least 10 tons compared to coal
generation power,
``(iii) expand by 75 percent the domestic
solar photovoltaic market in the United States
(measured in megawatts) as compared to the
expansion of that market from 2001 to 2002, and
``(iv) use at least 25 megawatts of fuel
cell energy generation.
``(3) Limited designations.--A project may not be
designated under this subsection unless--
``(A) the project is nominated by a State or local
government within 180 days of the enactment of this
subsection, and
``(B) such State or local government provides
written assurances that the project will satisfy the
eligibility criteria described in paragraph (4).
``(4) Application.--
``(A) In general.--A project may not be designated
under this subsection unless the application for such
designation includes a project proposal which describes
the energy efficiency, renewable energy, and
sustainable design features of the project and
demonstrates that the project satisfies the following
eligibility criteria:
``(i) Green building and sustainable
design.--At least 75 percent of the square
footage of commercial buildings which are part
of the project is registered for United States
Green Building Council's LEED certification and
is reasonably expected (at the time of the
designation) to receive such certification.
``(ii) Brownfield redevelopment.--The
project includes a brownfield site as defined
by section 101(39) of the Comprehensive
Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9601),
including a site described in subparagraph
(D)(ii)(II)(aa) thereof.
``(iii) State and local support.--The
project receives specific State or local
government resources which will support the
project in an amount equal to at least
$5,000,000. For purposes of the preceding
sentence, the term `resources' includes tax
abatement benefits and contributions in kind.
``(iv) Size.--The project includes at least
one of the following:
``(I) At least 1,000,000 square
feet of building.
``(II) At least 20 acres.
``(v) Use of tax benefit.--The project
proposal includes a description of the net
benefit of the tax-exempt financing provided
under this subsection which will be allocated
for financing of one or more of the following:
``(I) The purchase, construction,
integration, or other use of energy
efficiency, renewable energy, and
sustainable design features of the
project.
``(II) Compliance with LEED
certification standards.
``(III) The purchase, remediation,
and foundation construction and
preparation of the brownfields site.
``(vi) Employment.--The project is
projected to provide permanent employment of at
least 1,500 full time equivalents (150 full
time equivalents in rural States) when
completed and construction employment of at
least 1,000 full time equivalents (100 full
time equivalents in rural States).
The application shall include an independent analysis
which describes the project's economic impact,
including the amount of projected employment.
``(B) Project description.--Each application
described in subparagraph (A) shall contain for each
project a description of--
``(i) the amount of electric consumption
reduced as compared to conventional
construction,
``(ii) the amount of sulfur dioxide daily
emissions reduced compared to coal generation,
``(iii) the amount of the gross installed
capacity of the project's solar photovoltaic
capacity measured in megawatts, and
``(iv) the amount, in megawatts, of the
project's fuel cell energy generation.
``(5) Certification of use of tax benefit.--No later than
30 days after the completion of the project, each project must
certify to the Secretary that the net benefit of the tax-exempt
financing was used for the purposes described in paragraph (4).
``(6) Definitions.--For purposes of this subsection--
``(A) Rural state.--The term `rural State' means
any State which has--
``(i) a population of less than 4,500,000
according to the 2000 census,
``(ii) a population density of less than
150 people per square mile according to the
2000 census, and
``(iii) increased in population by less
than half the rate of the national increase
between the 1990 and 2000 censuses.
``(B) Local government.--The term `local
government' has the meaning given such term by section
1393(a)(5).
``(C) Net benefit of tax-exempt financing.--The
term `net benefit of tax-exempt financing' means the
present value of the interest savings (determined by a
calculation established by the Secretary) which result
from the tax-exempt status of the bonds.
``(7) Aggregate face amount of tax-exempt financing.--
``(A) In general.--An issue shall not be treated as
an issue described in subsection (a)(14) if the
aggregate face amount of bonds issued by the State or
local government pursuant thereto for a project (when
added to the aggregate face amount of bonds previously
so issued for such project) exceeds an amount
designated by the Secretary as part of the designation.
``(B) Limitation on amount of bonds.--The Secretary
may not allocate authority to issue qualified green
building and sustainable design project bonds in an
aggregate face amount exceeding $2,000,000,000.
``(8) Termination.--Subsection (a)(14) shall not apply with
respect to any bond issued after September 30, 2009.
``(9) Treatment of current refunding bonds.--Paragraphs
(7)(B) and (8) shall not apply to any bond (or series of bonds)
issued to refund a bond issued under subsection (a)(14) before
October 1, 2009, if--
``(A) the average maturity date of the issue of
which the refunding bond is a part is not later than
the average maturity date of the bonds to be refunded
by such issue,
``(B) the amount of the refunding bond does not
exceed the outstanding amount of the refunded bond, and
``(C) the net proceeds of the refunding bond are
used to redeem the refunded bond not later than 90 days
after the date of the issuance of the refunding bond.
For purposes of subparagraph (A), average maturity shall be determined
in accordance with section 147(b)(2)(A).''.
(c) Exemption From General State Volume Caps.--Paragraph (3) of
section 146(g) (relating to exception for certain bonds) is amended--
(1) by striking ``or (13)'' and inserting ``(13), or
(14)'', and
(2) by striking ``and qualified public educational
facilities'' and inserting ``qualified public educational
facilities, and qualified green building and sustainable design
projects''.
(d) Special Rule for Assets Financed Under This Section and
Accountability.--
(1) Denial of double benefit.--Any asset financed with
bonds issued pursuant to this section shall be ineligible for
any credit or deduction established under the Energy Tax Policy
Act of 2004.
(2) Accountability.--Each issuer shall maintain, on behalf
of each project, an interest bearing reserve account equal to 1
percent of the net proceeds of any bond issued under this
section for such project. Not later than 5 years after the date
of issuance, the Secretary of the Treasury, after consultation
with the Administrator of the Environmental Protection Agency,
shall determine whether the project financed with such bonds
has substantially complied with the terms and conditions
described in section 142(l)(4) of the Internal Revenue Code of
1986 (as added by this section). If the Secretary, after such
consultation, certifies that the project has substantially
complied with such terms and conditions and meets the
commitments set forth in the application for such project
described in section 142(l)(4) of such Code, amounts in the
reserve account, including all interest, shall be released to
the project. If the Secretary determines that the project has
not substantially complied with such terms and conditions,
amounts in the reserve account, including all interest, shall
be paid to the United States Treasury.
(e) Effective Date.--The amendments made by this section shall
apply to bonds issues after the date of the enactment of this Act.

TITLE XIV--MISCELLANEOUS

Subtitle A--Rural and Remote Electricity Construction

SEC. 1401. DENALI COMMISSION PROGRAMS.

(a) Power Cost Equalization Program.--There are authorized to be
appropriated to the Denali Commission established by the Denali
Commission Act of 1998 (42 U.S.C. 3121 note) not more than $5,000,000
for each of fiscal years 2005 through 2011 for the purposes of funding
the power cost equalization program established under section 42.45.100
of the Alaska Statutes.
(b) Availability of Funds.--
(1) Purpose.--Amounts described in paragraph (2) shall be
available to the Denali Commission to permit energy generation
and development (including fuel cells, hydroelectric, solar,
wind, wave, and tidal energy, and alternative energy sources),
energy transmission (including interties), fuel tank
replacement and clean-up, fuel transportation networks and
related facilities, power cost equalization programs, and other
energy programs, notwithstanding any other provision of law.
(2) Amounts.--(A) Except as provided in subparagraph (B),
the amounts referred to in paragraph (1) shall be any Federal
royalties, rents, and bonuses derived from the Federal share of
Federal oil and gas leases in the National Petroleum Reserve in
Alaska, up to a maximum of $50,000,000, for each of the fiscal
years 2004 through 2013.
(B) If amounts available under subparagraph (A) for one of
the fiscal years 2004 through 2013 are less than $50,000,000,
the Secretary of Energy shall make available an amount
sufficient to ensure that the amount available under this
subsection for that fiscal year equals $50,000,000, from
amounts remaining after deposits are made under section
949(a)(1), from the same source from which those deposits are
made.

SEC. 1402. RURAL AND REMOTE COMMUNITY ASSISTANCE.

(a) Program.--Section 19 of the Rural Electrification Act of 1936
(7 U.S.C 918a) is amended by striking all that precedes subsection (b)
and inserting the following:

``SEC. 19. ELECTRIC GENERATION, TRANSMISSION, AND DISTRIBUTION
FACILITIES EFFICIENCY GRANTS AND LOANS TO RURAL AND
REMOTE COMMUNITIES WITH EXTREMELY HIGH ELECTRICITY COSTS.

``(a) In General.--The Secretary, acting through the Rural
Utilities Service, may--
``(1) in coordination with State rural development
initiatives, make grants and loans to persons, States,
political subdivisions of States, and other entities organized
under the laws of States, to acquire, construct, extend,
upgrade, and otherwise improve electric generation,
transmission, and distribution facilities serving communities
in which the average revenue per kilowatt hour of electricity
for all consumers is greater than 150 percent of the average
revenue per kilowatt hour of electricity for all consumers in
the United States (as determined by the Energy Information
Administration using the most recent data available);
``(2) make grants and loans to the Denali Commission
established by the Denali Commission Act of 1998 (42 U.S.C.
3121 note; Public 105-277) to be used for the purpose of
providing funds to acquire, construct, extend, upgrade,
finance, and otherwise improve electric generation,
transmission, and distribution facilities serving communities
described in paragraph (1); and
``(3) make grants to State entities to establish and
support a revolving fund to provide a more cost-effective means
of purchasing fuel in areas where the fuel cannot be shipped by
means of surface transportation.''.
(b) Definition of Person.--Section 13 of the Rural Electrification
Act of 1936 (7 U.S.C. 913) is amended by striking ``or association''
and inserting ``association, or Indian tribe (as defined in section 4
of the Indian Self-Determination and Education Assistance Act)''.

Subtitle B--Coastal Programs

SEC. 1411. ROYALTY PAYMENTS UNDER LEASES UNDER THE OUTER CONTINENTAL
SHELF LANDS ACT.

(a) Royalty Relief.--
(1) In general.--For purposes of providing compensation for
lessees and a State for which amounts are authorized by section
6004(c) of the Oil Pollution Act of 1990 (Public Law 101-380),
a lessee may withhold from payment any royalty due and owing to
the United States under any leases under the Outer Continental
Shelf Lands Act (43 U.S.C. 1301 et seq.) for offshore oil or
gas production from a covered lease tract if, on or before the
date that the payment is due and payable to the United States,
the lessee makes a payment to the Secretary of the Interior of
44 cents for every $1 of royalty withheld.
(2) Use of amounts paid to secretary.--Within 30 days after
the Secretary of the Interior receives payments under paragraph
(1), the Secretary of the Interior shall--
(A) make 47.5 percent of such payments available to
the State referred to in section 6004(c) of the Oil
Pollution Act of 1990; and
(B) make 52.5 percent of such payments available
equally, only for the programs and purposes identified
as number 282 at page 1389 of House Report number 108-
10 and for a program described at page 1159 of that
Report in the State referred to in such section
6004(c).
(3) Treatment of amounts.--Any royalty withheld by a lessee
in accordance with this section (including any portion thereof
that is paid to the Secretary of the Interior under paragraph
(1)) shall be treated as paid for purposes of satisfaction of
the royalty obligations of the lessee to the United States.
(4) Certification of withheld amounts.--The Secretary of
the Treasury shall--
(A) determine the amount of royalty withheld by a
lessee under this section; and
(B) promptly publish a certification when the total
amount of royalty withheld by the lessee under this
section is equal to--
(i) the dollar amount stated at page 47 of
Senate Report number 101-534, which is
designated therein as the total drainage claim
for the West Delta field; plus
(ii) interest as described at page 47 of
that Report.
(b) Period of Royalty Relief.--Subsection (a) shall apply to
royalty amounts that are due and payable in the period beginning on
January 1, 2004, and ending on the date on which the Secretary of the
Treasury publishes a certification under subsection (a)(4)(B).
(c) Definitions.--As used in this section:
(1) Covered lease tract.--The term ``covered lease tract''
means a leased tract (or portion of a leased tract)--
(A) lying seaward of the zone defined and governed
by section 8(g) of the Outer Continental Shelf Lands
Act (43 U.S.C. 1337(g)); or
(B) lying within such zone but to which such
section does not apply.
(2) Lessee.--The term ``lessee''--
(A) means a person or entity that, on the date of
the enactment of the Oil Pollution Act of 1990, was a
lessee referred to in section 6004(c) of that Act (as
in effect on that date of the enactment), but did not
hold lease rights in Federal offshore lease OCS-G-5669;
and
(B) includes successors and affiliates of a person
or entity described in subparagraph (A).

SEC. 1412. DOMESTIC OFFSHORE ENERGY REINVESTMENT.

(a) Domestic Offshore Energy Reinvestment Program.--The Outer
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) is amended by
adding at the end the following:

``SEC. 32. DOMESTIC OFFSHORE ENERGY REINVESTMENT PROGRAM.

``(a) Definitions.--In this section:
``(1) Approved plan.--The term `approved plan' means a
Secure Energy Reinvestment Plan approved by the Secretary under
this section.
``(2) Coastal energy state.--The term `Coastal Energy
State' means a Coastal State off the coastline of which, within
the seaward lateral boundary as determined by the map
referenced in subsection (c)(2)(A), outer Continental Shelf
bonus bids or royalties are generated, other than bonus bids or
royalties from a leased tract within any area of the outer
Continental Shelf for which a moratorium on new leasing was in
effect as of January 1, 2002, unless the lease was issued
before the establishment of the moratorium and was in
production on such date.
``(3) Coastal political subdivision.--The term `coastal
political subdivision' means a county, parish, or other
equivalent subdivision of a Coastal Energy State, all or part
of which lies within the boundaries of the coastal zone of the
State, as identified in the State's approved coastal zone
management program under the Coastal Zone Management Act of
1972 (16 U.S.C. 1451 et seq.) on the date of the enactment of
this section.
``(4) Coastal population.--The term `coastal population'
means the population of a coastal political subdivision, as
determined by the most recent official data of the Census
Bureau.
``(5) Coastline.--The term `coastline' has the same meaning
as the term `coast line' in subsection 2(c) of the Submerged
Lands Act (43 U.S.C. 1301(c)).
``(6) Fund.--The term `Fund' means the Secure Energy
Reinvestment Fund established by this section.
``(7) Leased tract.--The term `leased tract' means a tract
maintained under section 6 or leased under section 8 for the
purpose of drilling for, developing, and producing oil and
natural gas resources.
``(8) Qualified outer continental shelf revenues.--(A)
Except as provided in subparagraph (B), the term `qualified
outer Continental Shelf revenues' means all amounts received by
the United States on or after October 1, 2003, from each leased
tract or portion of a leased tract lying seaward of the zone
defined and governed by section 8(g), or lying within such zone
but to which section 8(g) does not apply, including bonus bids,
rents, royalties (including payments for royalties taken in
kind and sold), net profit share payments, and related
interest.
``(B) Such term does not include any revenues from a leased
tract or portion of a leased tract that is included within any
area of the outer Continental Shelf for which a moratorium on
new leasing was in effect as of January 1, 2002, unless the
lease was issued before the establishment of the moratorium and
was in production on such date.
``(9) Secretary.--The term `Secretary' means the Secretary
of the Interior.
``(b) Secure Energy Reinvestment Fund.--
``(1) Establishment.--There is established in the Treasury
of the United States a separate account which shall be known as
the `Secure Energy Reinvestment Fund'. The Fund shall consist
of amounts deposited under paragraph (2), and such other
amounts as may be appropriated to the Fund.
``(2) Deposits.--For each fiscal year after fiscal year
2003, the Secretary of the Treasury shall deposit into the Fund
the following:
``(A) Notwithstanding section 9, all qualified
outer Continental Shelf revenues attributable to
royalties received by the United States in the fiscal
year that are in excess of the following amount:
``(i) $3,455,000,000 in the case of
royalties received in fiscal year 2004.
``(ii) $3,726,000,000 in the case of
royalties received in fiscal year 2005.
``(iii) $4,613,000,000 in the case of
royalties received in fiscal year 2006.
``(iv) $5,226,000,000 in the case of
royalties received in fiscal year 2007.
``(v) $5,841,000,000 in the case of
royalties received in fiscal year 2008.
``(vi) $5,763,000,000 in the case of
royalties received in fiscal year 2009.
``(vii) $6,276,000,000 in the case of
royalties received in fiscal year 2010.
``(viii) $6,351,000,000 in the case of
royalties received in fiscal year 2011.
``(ix) $6,551,000,000 in the case of
royalties received in fiscal year 2012.
``(x) $5,120,000,000 in the case of
royalties received in fiscal year 2013.
``(B) Notwithstanding section 9, all qualified
outer Continental shelf revenues attributable to bonus
bids received by the United States in each of the
fiscal years 2004 through 2013 that are in excess of
$1,000,000,000.
``(C) Notwithstanding section 9, in addition to
amounts deposited under subparagraphs (A) and (B),
$35,000,000 of amounts received by the United States
each fiscal year as royalties for oil or gas production
on the outer Continental Shelf, except that no amounts
shall be deposited under this subparagraph before
fiscal year 2004 or after fiscal year 2013.
``(D) All interest earned under paragraph (4).
``(E) All repayments under subsection (f).
``(3) Reduction in deposit.--(A) For each fiscal year after
fiscal year 2013 in which amounts received by the United States
as royalties for oil or gas production on the outer Continental
Shelf are less than the sum of the amounts described in
subparagraph (B) (before the application of this subparagraph),
the Secretary of the Treasury shall reduce each of the amounts
described in subparagraph (B) proportionately.
``(B) The amounts referred to in subparagraph (A) are the
following:
``(i) The amount required to be covered into the
Historic Preservation Fund under section 108 of the
National Historic Preservation Act (16 U.S.C. 470h) on
the date of the enactment of this paragraph.
``(ii) The amount required to be credited to the
Land and Water Conservation Fund under section 2(c)(2)
of the Land and Water Conservation Fund Act of 1965 (16
U.S.C. 4601-5(c)(2)) on the date of the enactment of
this paragraph.
``(iii) The amount required to be deposited under
subparagraph (C) of paragraph (2) of this subsection.
``(4) Investment.--The Secretary of the Treasury shall
invest moneys in the Fund (including interest) in public debt
securities with maturities suitable to the needs of the Fund,
as determined by the Secretary of the Treasury, and bearing
interest at rates determined by the Secretary of the Treasury,
taking into consideration current market yields on outstanding
marketable obligations of the United States of comparable
maturity. Such invested moneys shall remain invested until
needed to meet requirements for disbursement under this
section.
``(5) Review and revision of baseline amounts.--Not later
than December 31, 2008, the Secretary of the Interior, in
consultation with the Secretary of the Treasury, shall--
``(A) determine the amount and composition of outer
Continental Shelf revenues that were received by the
United States in each of the fiscal years 2004 through
2008;
``(B) project the amount and composition of outer
Continental Shelf revenues that will be received in the
United States in each of the fiscal years 2009 through
2013; and
``(C) submit to the Congress a report regarding
whether any of the dollar amounts set forth in clauses
(v) though (x) of paragraph (2)(A) or paragraph (2)(B)
should be modified to reflect those projections.
``(6) Authorization of appropriation of additional
amounts.--In addition to the amounts deposited into the Fund
under paragraph (2) there are authorized to be appropriated to
the Fund--
``(A) for each of fiscal years 2004 through 2013 up
to $500,000,000; and
``(B) for each fiscal year after fiscal year 2013
up to 25 percent of qualified outer Continental Shelf
revenues received by the United States in the preceding
fiscal year.
``(c) Use of Secure Energy Reinvestment Fund.--
``(1) In general.--(A) The Secretary shall use amounts in
the Fund remaining after the application of subsections (h) and
(i) to pay to each Coastal Energy State that has a Secure
Energy Reinvestment Plan approved by the Secretary under this
section, and to coastal political subdivisions of such State,
the amount allocated to the State or coastal political
subdivision, respectively, under this subsection.
``(B) The Secretary shall make payments under this
paragraph in December of 2004, and of each year thereafter,
from revenues received by the United States in the immediately
preceding fiscal year.
``(2) Allocation.--The Secretary shall allocate amounts
deposited into the Fund in a fiscal year, and other amounts
determined by the Secretary to be available, among Coastal
Energy States that have an approved plan, and to coastal
political subdivisions of such States, as follows:
``(A)(i) Of the amounts made available for each of
the first 10 fiscal years for which amounts are
available for allocation under this paragraph, the
allocation for each Coastal Energy State shall be
calculated based on the ratio of qualified outer
Continental Shelf revenues generated off the coastline
of the Coastal Energy State to the qualified outer
Continental Shelf revenues generated off the coastlines
of all Coastal Energy States for the period beginning
January 1, 1992, and ending December 31, 2001.
``(ii) Of the amounts available for a fiscal year
in a subsequent 10-fiscal-year period, the allocation
for each Coastal Energy State shall be calculated based
on such ratio determined by the Secretary with respect
to qualified outer Continental Shelf revenues generated
in each subsequent corresponding 10-year period.
``(iii) For purposes of this subparagraph,
qualified outer Continental Shelf revenues shall be
considered to be generated off the coastline of a
Coastal Energy State if the geographic center of the
lease tract from which the revenues are generated is
located within the area formed by the extension of the
State's seaward lateral boundaries, calculated using
the strict and scientifically derived conventions
established to delimit international lateral boundaries
under the Law of the Sea, as indicated on the map
entitled `Calculated Seaward Lateral Boundaries' and
dated October 2003, on file in the Office of the
Director, Minerals Management Service.
``(B) 35 percent of each Coastal Energy State's
allocable share as determined under subparagraph (A)
shall be allocated among and paid directly to the
coastal political subdivisions of the State by the
Secretary based on the following formula:
``(i) 25 percent shall be allocated based
on the ratio of each coastal political
subdivision's coastal population to the coastal
population of all coastal political
subdivisions of the Coastal Energy State.
``(ii) 25 percent shall be allocated based
on the ratio of each coastal political
subdivision's coastline miles to the coastline
miles of all coastal political subdivisions of
the State. In the case of a coastal political
subdivision without a coastline, the coastline
of the political subdivision for purposes of
this clause shall be one-third the average
length of the coastline of the other coastal
political subdivisions of the State.
``(iii) 50 percent shall be allocated based
on a formula that allocates 75 percent of the
funds based on such coastal political
subdivision's relative distance from any leased
tract used to calculate that State's allocation
and 25 percent of the funds based on the
relative level of outer Continental Shelf oil
and gas activities in a coastal political
subdivision to the level of outer Continental
Shelf oil and gas activities in all coastal
political subdivisions in such State, as
determined by the Secretary, except that in the
case of a coastal political subdivision in the
State of California that has a coastal
shoreline, that is not within 200 miles of the
geographic center of a leased tract or portion
of a leased tract, and in which there is
located one or more oil refineries the
allocation under this clause shall be
determined as if that coastal political
subdivision were located within a distance of
50 miles from the geographic center of the
closest leased tract with qualified outer
Continental Shelf revenues.
``(3) Reallocation.--Any amount allocated to a Coastal
Energy State or coastal political subdivision of such a State
but not disbursed because of a failure of a Coastal Energy
State to have an approved plan shall be reallocated by the
Secretary among all other Coastal Energy States in a manner
consistent with this subsection, except that the Secretary--
``(A) shall hold the amount in escrow within the
Fund until the earlier of the end of the next fiscal
year in which the allocation is made or the final
resolution of any appeal regarding the disapproval of a
plan submitted by the State under this section; and
``(B) shall continue to hold such amount in escrow
until the end of the subsequent fiscal year thereafter,
if the Secretary determines that such State is making a
good faith effort to develop and submit, or update, a
Secure Energy Reinvestment Plan under subsection (d).
``(4) Minimum share.--Notwithstanding any other provision
of this subsection, the amount allocated under this subsection
to each Coastal Energy State each fiscal year shall be not less
than 5 percent of the total amount available for that fiscal
year for allocation under this subsection to Coastal Energy
States, except that for any Coastal Energy State determined by
the Secretary to have an area formed by the extension of the
State's seaward lateral boundary, as designated by the map
referenced in paragraph (2)(A)(iii), of less than 490 square
statute miles, the amount allocated to such State shall not be
less than 10 percent of the total amount available for that
fiscal year for allocation under this subsection.
``(5) Recomputation.--If the allocation to one or more
Coastal Energy States under paragraph (4) with respect to a
fiscal year is greater than the amount that would be allocated
to such States under this subsection if paragraph (4) did not
apply, then the allocations under this subsection to all other
Coastal Energy States shall be paid from the amount remaining
after deduction of the amounts allocated under paragraph (4),
but shall be reduced on a pro rata basis by the sum of the
allocations under paragraph (4) so that not more than 100
percent of the funds available in the Fund for allocation with
respect to that fiscal year is allocated.
``(d) Secure Energy Reinvestment Plan.--
``(1) Development and submission of state plans.--The
Governor of each State seeking to receive funds under this
section shall prepare, and submit to the Secretary, a Secure
Energy Reinvestment Plan describing planned expenditures of
funds received under this section. The Governor shall include
in the State plan submitted to the Secretary plans prepared by
the coastal political subdivisions of the State. The Governor
and the coastal political subdivision shall solicit local input
and provide for public participation in the development of the
State plan. In describing the planned expenditures, the State
and coastal political subdivisions shall include only items
that are uses authorized under subsection (e).
``(2) Approval or disapproval.--
``(A) In general.--The Secretary may not disburse
funds to a State or coastal political subdivision of a
State under this section before the date the State has
an approved plan. The Secretary shall approve a Secure
Energy Reinvestment Plan submitted by a State under
paragraph (1) if the Secretary determines that the
expenditures provided for in the plan are uses
authorized under subsection (e), and that the plan
contains each of the following:
``(i) The name of the State agency that
will have the authority to represent and act
for the State in dealing with the Secretary for
purposes of this section.
``(ii) A program for the implementation of
the plan, that (I) has as a goal improving the
environment, (II) has as a goal addressing the
impacts of oil and gas production from the
outer Continental Shelf, and (III) includes a
description of how the State and coastal
political subdivisions of the State will
evaluate the effectiveness of the plan.
``(iii) Certification by the Governor that
ample opportunity has been accorded for public
participation in the development and revision
of the plan.
``(iv) Measures for taking into account
other relevant Federal resources and programs.
The plan shall be correlated so far as
practicable with other State, regional, and
local plans.
``(v) For any State for which the ratio
determined under subsection (c)(2)(A)(i) or
(c)(2)(A)(ii), as appropriate, expressed as a
percentage, exceeds 25 percent, a plan to spend
not less than 30 percent of the total funds
provided under this section each fiscal year to
that State and appropriate coastal political
subdivisions, to address the socioeconomic or
environmental impacts identified in the plan
that remain significant or progressive after
implementation of mitigation measures
identified in the most current environmental
impact statement (as of the date of the
enactment of this clause) required under the
National Environmental Protection Act of 1969
for lease sales under this Act.
``(vi) A plan to utilize at least one-half
of the funds provided pursuant to subsection
(c)(2)(B), and a portion of other funds
provided to such State under this section, on
programs or projects that are coordinated and
conducted in partnership between the State and
coastal political subdivision.
``(B) Procedure and timing.--The Secretary shall
approve or disapprove each plan submitted in accordance
with this subsection within 90 days after its
submission.
``(3) Amendment or revision.--Any amendment to or revision
of an approved plan shall be prepared and submitted in
accordance with the requirements under this paragraph for the
submittal of plans, and shall be approved or disapproved by the
Secretary in accordance with paragraph (2)(B).
``(e) Authorized Uses.--A Coastal Energy State, and a coastal
political subdivision of such a State, shall use amounts paid under
this section (including any such amounts deposited into a trust fund
administered by the State or coastal political subdivision dedicated to
uses consistent with this subsection), in compliance with Federal and
State law and the approved plan of the State, only for one or more of
the following purposes:
``(1) Projects and activities, including educational
activities, for the conservation, protection, or restoration of
coastal areas including wetlands.
``(2) Mitigating damage to, or the protection of, fish,
wildlife, or natural resources.
``(3) To the extent of such sums as are considered
reasonable by the Secretary, planning assistance and
administrative costs of complying with this section.
``(4) Implementation of federally approved plans or
programs for marine, coastal, subsidence, or conservation
management or for protection of resources from natural
disasters.
``(5) Mitigating impacts of outer Continental Shelf
activities through funding onshore infrastructure and public
service needs.
``(f) Compliance With Authorized Uses.--If the Secretary determines
that an expenditure of an amount made by a Coastal Energy State or
coastal political subdivision is not in accordance with the approved
plan of the State (including the plans of coastal political
subdivisions included in such plan), the Secretary shall not disburse
any further amounts under this section to that Coastal Energy State or
coastal political subdivision until--
``(1) the amount is repaid to the Secretary; or
``(2) the Secretary approves an amendment to the plan that
authorizes the expenditure.
``(g) Arbitration of State and Local Disputes.--The Secretary may
require, as a condition of any payment under this section, that a State
or coastal political subdivision in a State must submit to
arbitration--
``(1) any dispute between the State or coastal political
subdivision (or both) and the Secretary regarding
implementation of this section; and
``(2) any dispute between the State and political
subdivision regarding implementation of this section, including
any failure to include, in the plan submitted by the State for
purposes of subsection (d), any spending plan of the coastal
political subdivision.
``(h) Administrative Expenses.--Of amounts in the Fund each fiscal
year, the Secretary may use up to one-half of one percent for the
administrative costs of implementing this section.
``(i) Funding for Consortium.--
``(1) In general.--Of amounts deposited into the Fund in
each fiscal year 2004 through 2013, 2 percent shall be
available to the Secretary of the Interior to provide funding
for the Coastal Restoration and Enhancement through Science and
Technology program.
``(2) Treatment.--Any amount available under this
subsection for a fiscal year shall, for purposes of determining
the amount appropriated under any other provision of law that
authorizes appropriations to carry out the program referred to
in paragraph (1), be treated as appropriated under that other
provision.
``(j) Disposition of Funds.--A Coastal Energy State or coastal
political subdivision may use funds provided to such entity under this
section, subject to subsection (e), for any payment that is eligible to
be made with funds provided to States under section 35 of the Mineral
Leasing Act (30 U.S.C. 191).
``(k) Reports.--Each fiscal year following a fiscal year in which a
Coastal Energy State or coastal political subdivision of a Coastal
Energy State receives funds under this section, the Governor of the
Coastal Energy State, in coordination with such State's coastal
political subdivisions, shall account for all funds so received for the
previous fiscal year in a written report to the Secretary. The report
shall include, in accordance with regulations prescribed by the
Secretary, a description of all projects and activities that received
such funds. In order to avoid duplication, such report may incorporate,
by reference, any other reports required to be submitted under other
provisions of law.
``(l) Signs.--The Secretary shall require, as a condition of any
allocation of funds provided with amounts made available by this
section, that each State and coastal political subdivision shall
include on any sign otherwise installed at any site at or near an
entrance or public use focal point area for which such funds are used,
a statement that the existence or development of the site (or both), as
appropriate, is a product of such funds.''.
(b) Additional Amendments.--Section 31 of the Outer Continental
Shelf Lands Act (43 U.S.C. 1356a) is amended--
(1) by striking subsection (a);
(2) in subsection (c) by striking ``For fiscal year 2001,
$150,000,000 is'' and inserting ``Such sums as may be necessary
to carry out this section are'';
(3) in subsection (d)(1)(B) by striking ``, except'' and
all that follows through the end of the sentence and inserting
a period;
(4) by redesignating subsections (b) though (g) in order as
subsection (a) through (f); and
(5) by striking ``subsection (f)'' each place it appears
and inserting ``subsection (e)''.
(c) Utilization of Coastal Restoration and Enhancement Through
Science and Technology Program.--
(1) Authorization.--The Secretary of the Interior and the
Secretary of Commerce may each use the Coastal Restoration and
Enhancement through Science and Technology program for the
purposes of--
(A) assessing the effects of coastal habitat
restoration techniques;
(B) developing improved ecosystem modeling
capabilities for improved predictions of coastal
conditions and habitat change and for developing new
technologies for restoration activities; and
(C) identifying economic options to address
socioeconomic consequences of coastal degradation.
(2) Condition.--The Secretary of the Interior, in
consultation with the Secretary of Commerce, shall ensure that
the program--
(A) establishes procedures designed to avoid
duplicative activities among Federal agencies and
entities receiving Federal funds;
(B) coordinates with persons involved in similar
activities; and
(C) establishes a mechanism to collect, organize,
and make available information and findings on coastal
restoration.
(3) Report.--Not later than September 30, 2008, the
Secretary of the Interior, in consultation with the Secretary
of Commerce, shall transmit a report to the Congress on the
effectiveness of any Federal and State restoration efforts
conducted pursuant to this subsection and make recommendations
to improve coordinated coastal restoration efforts.
(4) Funding.--For each of fiscal years 2004 through 2013,
there is authorized to be appropriated to the Secretary
$10,000,000 to carry out activities under this subsection.

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

SEC. 1431. CHANGE IN COMPOSITION, OPERATION, AND DUTIES OF THE BOARD OF
DIRECTORS OF THE TENNESSEE VALLEY AUTHORITY.

The Tennessee Valley Authority Act of 1933 (16 U.S.C. 831 et seq.)
is amended by striking section 2 and inserting the following:

``SEC. 2. MEMBERSHIP, OPERATION, AND DUTIES OF THE BOARD OF DIRECTORS.

``(a) Membership.--
``(1) Appointment.--The Board of Directors of the
Corporation (referred to in this Act as the `Board') shall be
composed of 9 members appointed by the President by and with
the advice and consent of the Senate, at least 5 of whom shall
be a legal resident of a State any part of which is in the
service area of the Corporation.
``(2) Chairman.--The members of the Board shall select 1 of
the members to act as chairman of the Board.
``(b) Qualifications.--To be eligible to be appointed as a member
of the Board, an individual--
``(1) shall be a citizen of the United States;
``(2) shall have management expertise relative to a large
for-profit or nonprofit corporate, government, or academic
structure;
``(3) shall not be an employee of the Corporation; and
``(4) shall make full disclosure to Congress of any
investment or other financial interest that the individual
holds in the energy industry.
``(c) Recommendations.--In appointing members of the Board, the
President shall--
``(1) consider recommendations from such public officials
as--
``(A) the Governors of States in the service area;
``(B) individual citizens;
``(C) business, industrial, labor, electric power
distribution, environmental, civic, and service
organizations; and
``(D) the congressional delegations of the States
in the service area; and
``(2) seek qualified members from among persons who reflect
the diversity, including the geographical diversity, and needs
of the service area of the Corporation.
``(d) Terms.--
``(1) In general.--A member of the Board shall serve a term
of 5 years. A member of the Board whose term has expired may
continue to serve after the member's term has expired until the
date on which a successor takes office, except that the member
shall not serve beyond the end of the session of Congress in
which the term of the member expires.
``(2) Vacancies.--A member appointed to fill a vacancy on
the Board occurring before the expiration of the term for which
the predecessor of the member was appointed shall be appointed
for the remainder of that term.
``(e) Quorum.--
``(1) In general.--Five of the members of the Board shall
constitute a quorum for the transaction of business.
``(2) Vacancies.--A vacancy on the Board shall not impair
the power of the Board to act.
``(f) Compensation.--
``(1) In general.--A member of the Board shall be entitled
to receive--
``(A) a stipend of--
``(i) $45,000 per year; or
``(ii)(I) in the case of the chairman of
any committee of the Board created by the
Board, $46,000 per year; or
``(II) in the case of the chairman of the
Board, $50,000 per year; and
``(B) travel expenses, including per diem in lieu
of subsistence, in the same manner as persons employed
intermittently in Government service under section 5703
of title 5, United States Code.
``(2) Adjustments in stipends.--The amount of the stipend
under paragraph (1)(A)(i) shall be adjusted by the same
percentage, at the same time and manner, and subject to the
same limitations as are applicable to adjustments under section
5318 of title 5, United States Code.
``(g) Duties.--
``(1) In general.--The Board shall--
``(A) establish the broad goals, objectives, and
policies of the Corporation that are appropriate to
carry out this Act;
``(B) develop long-range plans to guide the
Corporation in achieving the goals, objectives, and
policies of the Corporation and provide assistance to
the chief executive officer to achieve those goals,
objectives, and policies;
``(C) ensure that those goals, objectives, and
policies are achieved;
``(D) approve an annual budget for the Corporation;
``(E) adopt and submit to Congress a conflict-of-
interest policy applicable to members of the Board and
employees of the Corporation;
``(F) establish a compensation plan for employees
of the Corporation in accordance with subsection (i);
``(G) approve all compensation (including salary or
any other pay, bonuses, benefits, incentives, and any
other form of remuneration) of all managers and
technical personnel that report directly to the chief
executive officer (including any adjustment to
compensation);
``(H) ensure that all activities of the Corporation
are carried out in compliance with applicable law;
``(I) create an audit committee, composed solely of
Board members independent of the management of the
Corporation, which shall--
``(i) in consultation with the inspector
general of the Corporation, recommend to the
Board an external auditor;
``(ii) receive and review reports from the
external auditor of the Corporation and
inspector general of the Corporation; and
``(iii) make such recommendations to the
Board as the audit committee considers
necessary;
``(J) create such other committees of Board members
as the Board considers to be appropriate;
``(K) conduct such public hearings as it deems
appropriate on issues that could have a substantial
effect on--
``(i) the electric ratepayers in the
service area; or
``(ii) the economic, environmental, social,
or physical well-being of the people of the
service area;
``(L) establish the electricity rates charged by
the Corporation; and
``(M) engage the services of an external auditor
for the Corporation.
``(2) Meetings.--The Board shall meet at least 4 times each
year.
``(h) Chief Executive Officer.--
``(1) Appointment.--The Board shall appoint a person to
serve as chief executive officer of the Corporation.
``(2) Qualifications.--
``(A) In general.--To serve as chief executive
officer of the Corporation, a person--
``(i) shall have senior executive-level
management experience in large, complex
organizations;
``(ii) shall not be a current member of the
Board or have served as a member of the Board
within 2 years before being appointed chief
executive officer; and
``(iii) shall comply with the conflict-of-
interest policy adopted by the Board.
``(B) Expertise.--In appointing a chief executive
officer, the Board shall give particular consideration
to appointing an individual with expertise in the
electric industry and with strong financial skills.
``(3) Tenure.--The chief executive officer shall serve at
the pleasure of the Board.
``(i) Compensation Plan.--
``(1) In general.--The Board shall approve a compensation
plan that specifies all compensation (including salary or any
other pay, bonuses, benefits, incentives, and any other form of
remuneration) for the chief executive officer and employees of
the Corporation.
``(2) Annual survey.--The compensation plan shall be based
on an annual survey of the prevailing compensation for similar
positions in private industry, including engineering and
electric utility companies, publicly owned electric utilities,
and Federal, State, and local governments.
``(3) Considerations.--The compensation plan shall provide
that education, experience, level of responsibility, geographic
differences, and retention and recruitment needs will be taken
into account in determining compensation of employees.
``(4) Positions at or below level iv.--The chief executive
officer shall determine the salary and benefits of employees
whose annual salary is not greater than the annual rate payable
for positions at level IV of the Executive Schedule under
section 5315 of title 5, United States Code.
``(5) Positions above level iv.--On the recommendation of
the chief executive officer, the Board shall approve the
salaries of employees whose annual salaries would be in excess
of the annual rate payable for positions at level IV of the
Executive Schedule under section 5315 of title 5, United States
Code.''.

SEC. 1432. CHANGE IN MANNER OF APPOINTMENT OF STAFF.

Section 3 of the Tennessee Valley Authority Act of 1933 (16 U.S.C.
831b) is amended--
(1) by striking the first undesignated paragraph and
inserting the following:
``(a) Appointment by the Chief Executive Officer.--The chief
executive officer shall appoint, with the advice and consent of the
Board, and without regard to the provisions of the civil service laws
applicable to officers and employees of the United States, such
managers, assistant managers, officers, employees, attorneys, and
agents as are necessary for the transaction of the business of the
Corporation.''; and
(2) by striking ``All contracts'' and inserting the
following:
``(b) Wage Rates.--All contracts''.

SEC. 1433. CONFORMING AMENDMENTS.

(a) The Tennessee Valley Authority Act of 1933 (16 U.S.C. 831 et
seq.) is amended--
(1) by striking ``board of directors'' each place it
appears and inserting ``Board of Directors''; and
(2) by striking ``board'' each place it appears and
inserting ``Board''.
(b) Section 9 of the Tennessee Valley Authority Act of 1933 (16
U.S.C. 831h) is amended--
(1) by striking ``The Comptroller General of the United
States shall audit'' and inserting the following:
``(c) Audits.--The Comptroller General of the United States shall
audit''; and
(2) by striking ``The Corporation shall determine'' and
inserting the following:
``(d) Administrative Accounts and Business Documents.--The
Corporation shall determine''.
(c) Title 5, United States Code, is amended--
(1) in section 5314, by striking ``Chairman, Board of
Directors of the Tennessee Valley Authority.''; and
(2) in section 5315, by striking ``Members, Board of
Directors of the Tennessee Valley Authority.''.

SEC. 1434. APPOINTMENTS; EFFECTIVE DATE; TRANSITION.

(a) Appointments.--
(1) In general.--As soon as practicable after the date of
enactment of this Act, the President shall submit to the Senate
nominations of 6 persons to serve as members of the Board of
Directors of the Tennessee Valley Authority in addition to the
members serving on the date of enactment of this Act.
(2) Initial terms.--Notwithstanding section 2(d) of the
Tennessee Valley Authority Act of 1933 (as amended by this
subtitle), in making the appointments under paragraph (1), the
President shall appoint--
(A) 2 members for a term to expire on May 18, 2006;
(B) 2 members for a term to expire on May 18, 2008;
and
(C) 2 members for a term to expire on May 18, 2010.
(b) Effective Date.--The amendments made by this section and
sections 1431, 1432, and 1433 take effect on the later of the date on
which at least 3 persons nominated under subsection (a) take office or
May 18, 2005.
(c) Selection of Chairman.--The Board of Directors of the Tennessee
Valley Authority shall select 1 of the members to act as chairman of
the Board not later than 30 days after the effective date of this
section.
(d) Conflict-Of-Interest Policy.--The Board of Directors of the
Tennessee Valley Authority shall adopt and submit to Congress a
conflict-of-interest policy, as required by section 2(g)(1)(E) of the
Tennessee Valley Authority Act of 1933 (as amended by this subtitle),
as soon as practicable after the effective date of this section.
(e) Transition.--A person who is serving as a member of the board
of directors of the Tennessee Valley Authority on the date of enactment
of this Act--
(1) shall continue to serve until the end of the current
term of the member; but
(2) after the effective date specified in subsection (b),
shall serve under the terms of the Tennessee Valley Authority
Act of 1933 (as amended by this subtitle); and
(3) may not be reappointed.

Subtitle D--Other Provisions

SEC. 1441. CONTINUATION OF TRANSMISSION SECURITY ORDER.

Department of Energy Order No. 202-03-2, issued by the Secretary of
Energy on August 28, 2003, shall remain in effect unless rescinded by
Federal statute.

SEC. 1442. REVIEW OF AGENCY DETERMINATIONS.

Section 7 of the Natural Gas Act (15 U.S.C. 717f) is amended by
adding at the end the following:
``(i)(1) The United States Court of Appeals for the District of
Columbia Circuit shall have original and exclusive jurisdiction over
any civil action--
``(A) for review of any order or action of any Federal or
State administrative agency or officer to issue, condition, or
deny any permit, license, concurrence, or approval issued under
authority of any Federal law, other than the Coastal Zone
Management Act of 1972 (16 U.S.C. 1451 et seq.), required for
the construction of a natural gas pipeline for which a
certificate of public convenience and necessity is issued by
the Commission under this section;
``(B) alleging unreasonable delay by any Federal or State
administrative agency or officer in entering an order or taking
other action described in subparagraph (A); or
``(C) challenging any decision made or action taken under
this subsection.
``(2)(A) If the Court finds that the order, action, or failure to
act is not consistent with the public convenience and necessity (as
determined by the Commission under this section), or would prevent the
construction and operation of natural gas facilities authorized by the
certificate of public convenience and necessity, the permit, license,
concurrence, or approval that is the subject of the order, action, or
failure to act shall be deemed to have been issued subject to any
conditions set forth in the reviewed order or action that the Court
finds to be consistent with the public convenience and necessity.
``(B) For purposes of paragraph (1)(B), the failure of an agency or
officer to issue any such permit, license, concurrence, or approval
within the later of 1 year after the date of filing of an application
for the permit, license, concurrence, or approval or 60 days after the
date of issuance of the certificate of public convenience and necessity
under this section, shall be considered to be unreasonable delay unless
the Court, for good cause shown, determines otherwise.
``(C) The Court shall set any action brought under paragraph (1)
for expedited consideration.''.

SEC. 1443. ATTAINMENT DATES FOR DOWNWIND OZONE NONATTAINMENT AREAS.

Section 181 of the Clean Air Act (42 U.S.C.7511) is amended by
adding the following new subsection at the end thereof:
``(d) Extended Attainment Date for Certain Downwind Areas.--
``(1) Definitions.--(A) The term `upwind area' means an
area that--
``(i) significantly contributes to nonattainment in
another area, hereinafter referred to as a `downwind
area'; and
``(ii) is either--
``(I) a nonattainment area with a later
attainment date than the downwind area, or
``(II) an area in another State that the
Administrator has found to be significantly
contributing to nonattainment in the downwind
area in violation of section 110(a)(2)(D) and
for which the Administrator has established
requirements through notice and comment
rulemaking to eliminate the emissions causing
such significant contribution.
``(B) The term `current classification' means the
classification of a downwind area under this section at the
time of the determination under paragraph (2).
``(2) Extension.--If the Administrator--
``(A) determines that any area is a downwind area
with respect to a particular national ambient air
quality standard for ozone; and
``(B) approves a plan revision for such area as
provided in paragraph (3) prior to a reclassification
under subsection (b)(2)(A),
the Administrator, in lieu of such reclassification, shall
extend the attainment date for such downwind area for such
standard in accordance with paragraph (5).
``(3) Required approval.--In order to extend the attainment
date for a downwind area under this subsection, the
Administrator must approve a revision of the applicable
implementation plan for the downwind area for such standard
that--
``(A) complies with all requirements of this Act
applicable under the current classification of the
downwind area, including any requirements applicable to
the area under section 172(c) for such standard; and
``(B) includes any additional measures needed to
demonstrate attainment by the extended attainment date
provided under this subsection.
``(4) Prior reclassification determination.--If, no more
than 18 months prior to the date of enactment of this
subsection, the Administrator made a reclassification
determination under subsection (b)(2)(A) for any downwind area,
and the Administrator approves the plan revision referred to in
paragraph (3) for such area within 12 months after the date of
enactment of this subsection, the reclassification shall be
withdrawn and the attainment date extended in accordance with
paragraph (5) upon such approval. The Administrator shall also
withdraw a reclassification determination under subsection
(b)(2)(A) made after the date of enactment of this subsection
and extend the attainment date in accordance with paragraph (5)
if the Administrator approves the plan revision referred to in
paragraph (3) within 12 months of the date the reclassification
determination under subsection (b)(2)(A) is issued. In such
instances the `current classification' used for evaluating the
revision of the applicable implementation plan under paragraph
(3) shall be the classification of the downwind area under this
section immediately prior to such reclassification.
``(5) Extended date.--The attainment date extended under
this subsection shall provide for attainment of such national
ambient air quality standard for ozone in the downwind area as
expeditiously as practicable but no later than the date on
which the last reductions in pollution transport necessary for
attainment in the downwind area are required to be achieved by
the upwind area or areas.''.

SEC. 1444. ENERGY PRODUCTION INCENTIVES.

(a) In General.--A State may provide to any entity--
(1) a credit against any tax or fee owed to the State under
a State law, or
(2) any other tax incentive,
determined by the State to be appropriate, in the amount calculated
under and in accordance with a formula determined by the State, for
production described in subsection (b) in the State by the entity that
receives such credit or such incentive.
(b) Eligible Entities.--Subsection (a) shall apply with respect to
the production in the State of--
(1) electricity from coal mined in the State and used in a
facility, if such production meets all applicable Federal and
State laws and if such facility uses scrubbers or other forms
of clean coal technology,
(2) electricity from a renewable source such as wind,
solar, or biomass, or
(3) ethanol.
(c) Effect on Interstate Commerce.--Any action taken by a State in
accordance with this section with respect to a tax or fee payable, or
incentive applicable, for any period beginning after the date of the
enactment of this Act shall--
(1) be considered to be a reasonable regulation of
commerce; and
(2) not be considered to impose an undue burden on
interstate commerce or to otherwise impair, restrain, or
discriminate, against interstate commerce.

SEC. 1445. USE OF GRANULAR MINE TAILINGS.

(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:

``SEC. 6006. USE OF GRANULAR MINE TAILINGS.

``(a) Mine Tailings.--
``(1) In general.--Not later than 180 days after the date
of enactment of this section, the Administrator, in
consultation with the Secretary of Transportation and heads of
other Federal agencies, shall establish criteria (including an
evaluation of whether to establish a numerical standard for
concentration of lead and other hazardous substances) for the
safe and environmentally protective use of granular mine
tailings from the Tar Creek, Oklahoma Mining District, known as
`chat', for--
``(A) cement or concrete projects; and
``(B) transportation construction projects
(including transportation construction projects
involving the use of asphalt) that are carried out, in
whole or in part, using Federal funds.
``(2) Requirements.--In establishing criteria under
paragraph (1), the Administrator shall consider--
``(A) the current and previous uses of granular
mine tailings as an aggregate for asphalt; and
``(B) any environmental and public health risks and
benefits derived from the removal, transportation, and
use in transportation projects of granular mine
tailings.
``(3) Public participation.--In establishing the criteria
under paragraph (1), the Administrator shall solicit and
consider comments from the public.
``(4) Applicability of criteria.--On the establishment of
the criteria under paragraph (1), any use of the granular mine
tailings described in paragraph (1) in a transportation project
that is carried out, in whole or in part, using Federal funds,
shall meet the criteria established under paragraph (1).
``(b) Effect of Sections.--Nothing in this section or section 6005
affects any requirement of any law (including a regulation) in effect
on the date of enactment of this section.''.
(b) Conforming Amendment.--The table of contents of the Solid Waste
Disposal Act (42 U.S.C. prec. 6901) is amended by adding at the end of
the items relating to subtitle F the following:

``Sec. 6006. Use of granular mine tailings.''.

TITLE XV--ETHANOL AND MOTOR FUELS

Subtitle A--General Provisions

SEC. 1501. 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) Ethanol.--(i) 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; and
``(VI) fibers.
``(ii) The term `waste derived ethanol' means
ethanol derived from--
``(I) animal wastes, including poultry fats
and poultry wastes, and other waste materials;
or
``(II) 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,
waste derived 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 after the
enactment of this subsection, the Administrator shall
promulgate regulations ensuring that motor vehicle fuel
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 renewable
fuel can be used, or impose any per-gallon obligation
for the use of renewable fuel. If the Administrator
does not promulgate such regulations, the applicable
percentage referred to in paragraph (4), on a volume
percentage of gasoline basis, shall be 2.2 in 2005.
``(B) Applicable volume.--
``(i) Calendar years 2005 through 2012.--
For the purpose of subparagraph (A), the
applicable volume for any of calendar years
2005 through 2012 shall be determined in
accordance with the following table:
Applicable volume of renewable fuel
``Calendar year                              (in billions of gallons)
2005...................................................     3.1
2006...................................................     3.3
2007...................................................     3.5
2008...................................................     3.8
2009...................................................     4.1
2010...................................................     4.4
2011...................................................     4.7
2012...................................................     5.0
``(ii) Calendar year 2013 and thereafter.--
For the purpose of subparagraph (A), the
applicable volume for calendar year 2013 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 2012.
``(3) Non-contiguous state opt-in.--Upon the petition of a
non-contiguous State, the Administrator may allow the renewable
fuel program established by subtitle A of title XV of the
Energy Policy Act of 2003 to apply in such non-contiguous State
at the same time or any time after the Administrator
promulgates regulations under paragraph (2). The Administrator
may promulgate or revise regulations under paragraph (2),
establish applicable percentages under paragraph (4), provide
for the generation of credits under paragraph (6), and take
such other actions as may be necessary to allow for the
application of the renewable fuels program in a non-contiguous
State.
``(4) Applicable percentages.--
``(A) Provision of estimate of volumes of gasoline
sales.--Not later than October 31 of each of calendar
years 2004 through 2011, the Administrator of the
Energy Information Administration shall provide to the
Administrator of the Environmental Protection Agency an
estimate of the volumes of gasoline that will be sold
or introduced into commerce in the United States during
the following calendar year.
``(B) Determination of applicable percentages.--
``(i) In general.--Not later than November
30 of each of the calendar years 2004 through
2011, based on the estimate provided under
subparagraph (A), the Administrator shall
determine and publish in the Federal Register,
with respect to the following calendar year,
the renewable fuel obligation that ensures that
the requirements of paragraph (2) are met.
``(ii) Required elements.--The renewable
fuel obligation determined for a calendar year
under clause (i) shall--
``(I) be applicable to refiners,
blenders, and importers, as
appropriate;
``(II) be expressed in terms of a
volume percentage of gasoline sold or
introduced into commerce; and
``(III) subject to subparagraph
(C)(i), consist of a single applicable
percentage that applies to all
categories of persons specified in
subclause (I).
``(C) Adjustments.--In determining the applicable
percentage for a calendar year, the Administrator shall
make adjustments--
``(i) to prevent the imposition of
redundant obligations to any person specified
in subparagraph (B)(ii)(I); and
``(ii) to account for the use of renewable
fuel during the previous calendar year by small
refineries that are exempt under paragraph
(11).
``(5) Equivalency.--For the purpose of paragraph (2), 1
gallon of either cellulosic biomass ethanol or waste derived
ethanol--
``(A) shall be considered to be the equivalent of
1.5 gallon of renewable fuel; or
``(B) if the cellulostic biomass ethanol or waste
derived ethanol is derived from agricultural residue or
is an agricultural byproduct (as that term is used in
section 919 of the Energy Policy Act of 2003), shall be
considered to be the equivalent of 2.5 gallons of
renewable fuel.
``(6) 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 paragraph (11), 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 (7).
``(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 renewable fuel deficit provided that,
in the calendar year following the year in which the
renewable fuel deficit is created, such person shall
achieve compliance with the renewable fuel requirement
under paragraph (2), and shall generate or purchase
additional renewable fuel credits to offset the
renewable fuel deficit of the previous year.
``(7) Seasonal variations in renewable fuel use.--
``(A) Study.--For each of the calendar years 2005
through 2012, 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 percent 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).
``(8) 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 severely harm the economy
or environment of a State, a region, or the
United States; 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.
``(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.
``(9) Study and waiver for initial year of program.--Not
later than 180 days after the enactment of this subsection, 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 after the
enactment of this subsection, 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 paragraph
shall not be interpreted as limiting the Administrator's
authority to waive the requirements of paragraph (2) in whole,
or in part, under paragraph (8) or paragraph (10), pertaining
to waivers.
``(10) Assessment and waiver.--The Administrator, in
consultation with the Secretary of Energy and the Secretary of
Agriculture, shall evaluate the requirement of paragraph (2)
and determine, prior to January 1, 2007, and 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 Administrator 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 of
paragraph (2);
``(B) the potential of the requirement of paragraph
(2) to significantly raise the price of gasoline, food
(excluding the net price impact on the requirement in
paragraph (2) on commodities used in the production of
ethanol), 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 such requirement;
``(C) the potential of the requirement of 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 of paragraph
(2) to cause or promote exceedances of Federal, State,
or local air quality standards.
If the Administrator determines, by clear and convincing
information, 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, public health, or
environment of any significant area or region of the country,
the Administrator may waive, in whole or in part, the
requirement of paragraph (2) in any one year for which the
determination is made for that area or region of the country,
except that any such waiver shall not have the effect of
reducing the applicable volume of renewable fuel specified in
paragraph (2)(B) with respect to any year for which the
determination is made. In determining economic impact under
this paragraph, the Administrator shall not consider the
reduced revenues available from the Highway Trust Fund (section
9503 of the Internal Revenue Code of 1986) as a result of the
use of ethanol.
``(11) 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, 2007, 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).
``(12) Ethanol market concentration analysis.--
``(A) Analysis.--
``(i) In general.--Not later than 180 days
after the date of enactment of this subsection,
and annually thereafter, the Federal Trade
Commission shall perform a market concentration
analysis of the ethanol production industry
using the Herfindahl-Hirschman Index to
determine whether there is sufficient
competition among industry participants to
avoid price setting and other anticompetitive
behavior.
``(ii) Scoring.--For the purpose of scoring
under clause (i) using the Herfindahl-Hirschman
Index, all marketing arrangements among
industry participants shall be considered.
``(B) Report.--Not later than December 1, 2004, and
annually thereafter, the Federal Trade Commission shall
submit to Congress and the Administrator a report on
the results of the market concentration analysis
performed under subparagraph (A)(i).''.
(b) Penalties and Enforcement.--Section 211(d) of the Clean Air Act
(42 U.S.C. 7545(d)) is amended as follows:
(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)''.
(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 of the Environmental Protection Agency
(hereinafter in this subsection referred to as 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, to avoid duplicative
requirements, shall rely, to the extent practicable, on
existing reporting and recordkeeping requirements and other
information available to the Administrator including gasoline
distribution patterns that include multistate use areas.
(3) Applicable law.--Activities carried out under this
subsection shall be conducted in a manner designed to protect
confidentiality of individual responses.

SEC. 1502. 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 methyl tertiary butyl ether (hereinafterin this
section referred to as ``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 a defective product 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 of the Environmental Protection Agency (hereinafter in
this section referred to as 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 of such Act. If
the safe harbor provided by this section does not apply, the existence
of a claim of defective product shall be determined under otherwise
applicable law. Nothing in this subsection shall be construed to affect
the liability of any person for environmental remediation costs,
drinking water contamination, negligence for spills or other reasonably
foreseeable events, public or private nuisance, trespass, breach of
warranty, breach of contract, or any other liability other than
liability based upon a claim of defective product.
(b) Effective Date.--This section shall be effective as of
September 5, 2003, and shall apply with respect to all claims filed on
or after that date.

SEC. 1503. FINDINGS AND MTBE TRANSITION ASSISTANCE.

(a) Findings.--Congress finds that--
(1) since 1979, methyl tertiary butyl ether (hereinafter in
this section referred to 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) having previously required oxygenates like MTBE for air
quality purposes, Congress has--
(A) reconsidered the relative value of MTBE in
gasoline;
(B) decided to establish a date certain for action
by the Environmental Protection Agency to prohibit the
use of MTBE in gasoline; and
(C) decided to provide for the elimination of the
oxygenate requirement for reformulated gasoline and to
provide for a renewable fuels 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 and
from the decision to establish a date certain for
action by the Environmental Protection Agency to
prohibit the use of MTBE in 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 (hereinafter in this subsection
referred to as `MTBE') 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, iso-octene, alkylates, or renewable
fuels.
``(ii) Determination.--The Administrator,
in consultation with the Secretary of Energy,
may determine that transition assistance for
the production of iso-octane, iso-octene,
alkylates, or renewable fuels is inconsistent
with the provisions of subparagraph (B) and, on
that basis, may deny applications for grants
authorized by this paragraph.
``(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 (unless the Administrator determines that
such fuel additives may reasonably be anticipated to
endanger public health or the environment) that,
consistent with this subsection--
``(i) have been registered and have been
tested or are being tested in accordance with
the requirements of this section; and
``(ii) will contribute to replacing
gasoline volumes lost as a result of amendments
made to subsection (k) of this section by
section 1504(a) and 1506 of the Energy Policy
Act of 2003.
``(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 MTBE for consumption before
April 1, 2003 and ceased production at any time
after the date of enactment of this paragraph.
``(D) Authorization of appropriations.--There are
authorized to be appropriated to carry out this
paragraph $250,000,000 for each of fiscal years 2005
through 2012, 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. 1504. USE OF MTBE.

(a) In General.--Subject to subsections (e) and (f), not later than
December 31, 2014, the use of methyl tertiary butyl ether (hereinafter
in this section referred to as ``MTBE'') in motor vehicle fuel in any
State other than a State described in subsection (c) is prohibited.
(b) Regulations.--The Administrator of the Environmental Protection
Agency (hereafter referred to in this section as the ``Administrator'')
shall promulgate regulations to effect the prohibition in subsection
(a).
(c) States That Authorize Use.--A State described in this
subsection is a State in which the Governor of the State submits a
notification to the Administrator authorizing the use of MTBE in motor
vehicle fuel sold or used in the State.
(d) Publication of Notice.--The Administrator shall publish in the
Federal Register each notice submitted by a State under subsection (c).
(e) Trace Quantities.--In carrying out subsection (a), the
Administrator may allow trace quantities of MTBE, not to exceed 0.5
percent by volume, to be present in motor vehicle fuel in cases that
the Administrator determines to be appropriate.
(f) Limitation.--The Administrator, under authority of subsection
(a), shall not prohibit or control the production of MTBE for export
from the United States or for any other use other than for use in motor
vehicle fuel.

SEC. 1505. NATIONAL ACADEMY OF SCIENCES REVIEW AND PRESIDENTIAL
DETERMINATION.

(a) NAS Review.--Not later than May 31, 2013, the Secretary shall
enter into an arrangement with the National Academy of Sciences to
review the use of methyl tertiary butyl ether (hereafter referred to in
this section as ``MTBE'') in fuel and fuel additives. The review shall
only use the best available scientific information and data collected
by accepted methods or the best available means. The review shall
examine the use of MTBE in fuel and fuel additives, significant
beneficial and detrimental effects of this use on environmental quality
or public health or welfare including the costs and benefits of such
effects, likely effects of controls or prohibitions on MTBE regarding
fuel availability and price, and other appropriate and reasonable
actions that are available to protect the environment or public health
or welfare from any detrimental effects of the use of MTBE in fuel or
fuel additives. The review shall be peer-reviewed prior to publication
and all supporting data and analytical models shall be available to the
public. The review shall be completed no later than May 31, 2014.
(b) Presidential Determination.--No later than June 30, 2014, the
President may make a determination that restrictions on the use of MTBE
to be implemented pursuant to section 1504 shall not take place and
that the legal authority contained in section 1504 to prohibit the use
of MTBE in motor vehicle fuel shall become null and void.

SEC. 1506. 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 as follows:
(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).
(II) by redesignating clause (iii)
as clause (ii).
(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 such date of
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 as follows:
(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,''.
(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 of the Environmental Protection Agency 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 of the Environmental
Protection Agency (hereinafter in this subsection referred to as the
``Administrator'') prior to the date of 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 Federal or State
prohibitions on the use of methyl tertiary butyl ether imposed
after the 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 years 1999-2000 in the average annual
aggregate emissions of toxic air pollutants from reformulated
gasoline produced or distributed by the refinery or importer;
Provided, that 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. 1507. 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 subsection, 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 subtitle A of title XV 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. 1508. 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 each of the following:
``(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.
``(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 5 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. 1509. REDUCING THE PROLIFERATION OF STATE FUEL CONTROLS.

(a) EPA Approval of State Plans With Fuel Controls.--Section
211(c)(4)(C) of the Clean Air Act (42 U.S.C. 7545(c)(4)(C)) is amended
by adding at the end the following: ``The Administrator shall not
approve a control or prohibition respecting the use of a fuel or fuel
additive under this subparagraph unless the Administrator, after
consultation with the Secretary of Energy, publishes in the Federal
Register a finding that, in the Administrator's judgment, such control
or prohibition will not cause fuel supply or distribution interruptions
or have a significant adverse impact on fuel producibility in the
affected area or contiguous areas.''.
(b) Study.--The Administrator of the Environmental Protection
Agency (hereinafter in this subsection referred to as the
``Administrator''), in cooperation with the Secretary of Energy, shall
undertake a study of the projected effects on air quality, the
proliferation of fuel blends, fuel availability, and fuel costs of
providing a preference for each of the following:
(A) Reformulated gasoline referred to in subsection (k) of
section 211 of the Clean Air Act.
(B) A low RVP gasoline blend that has been certified by the
Administrator as having a Reid Vapor Pressure of 7.0 pounds per
square inch (psi).
(C) A low RVP gasoline blend that has been certified by the
Administrator as having a Reid Vapor Pressure of 7.8 pounds per
square inch (psi).
In carrying out such study, the Administrator shall obtain comments
from affected parties. The Administrator shall submit the results of
such study to the Congress not later than 18 months after the date of
enactment of this Act, together with any recommended legislative
changes.

SEC. 1510. FUEL SYSTEM REQUIREMENTS HARMONIZATION STUDY.

(a) Study.--
(1) In general.--The Administrator of the Environmental
Protection Agency (hereinafter in this section referred to as
the ``Administrator'') 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, 2007, the
Administrator 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 under this subsection
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 under this
subsection, the Administrator 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.

SEC. 1511. COMMERCIAL BYPRODUCTS FROM MUNICIPAL SOLID WASTE AND
CELLULOSIC BIOMASS LOAN GUARANTEE PROGRAM.

(a) Definition of Municipal Solid Waste.--In this section, the term
``municipal solid waste'' has the meaning given the term ``solid
waste'' in section 1004 of the Solid Waste Disposal Act (42 U.S.C.
6903).
(b) Establishment of Program.--The Secretary of Energy (hereinafter
in this section referred to as the ``Secretary'') shall establish a
program to provide guarantees of loans by private institutions for the
construction of facilities for the processing and conversion of
municipal solid waste and cellulosic biomass into fuel ethanol and
other commercial byproducts.
(c) Requirements.--The Secretary may provide a loan guarantee under
subsection (b) to an applicant if--
(1) without a loan guarantee, credit is not available to
the applicant under reasonable terms or conditions sufficient
to finance the construction of a facility described in
subsection (b);
(2) the prospective earning power of the applicant and the
character and value of the security pledged provide a
reasonable assurance of repayment of the loan to be guaranteed
in accordance with the terms of the loan; and
(3) the loan bears interest at a rate determined by the
Secretary to be reasonable, taking into account the current
average yield on outstanding obligations of the United States
with remaining periods of maturity comparable to the maturity
of the loan.
(d) Criteria.--In selecting recipients of loan guarantees from
among applicants, the Secretary shall give preference to proposals
that--
(1) meet all applicable Federal and State permitting
requirements;
(2) are most likely to be successful; and
(3) are located in local markets that have the greatest
need for the facility because of--
(A) the limited availability of land for waste
disposal;
(B) the availability of sufficient quantities of
cellulosic biomass; or
(C) a high level of demand for fuel ethanol or
other commercial byproducts of the facility.
(e) Maturity.--A loan guaranteed under subsection (b) shall have a
maturity of not more than 20 years.
(f) Terms and Conditions.--The loan agreement for a loan guaranteed
under subsection (b) shall provide that no provision of the loan
agreement may be amended or waived without the consent of the
Secretary.
(g) Assurance of Repayment.--The Secretary shall require that an
applicant for a loan guarantee under subsection (b) provide an
assurance of repayment in the form of a performance bond, insurance,
collateral, or other means acceptable to the Secretary in an amount
equal to not less than 20 percent of the amount of the loan.
(h) Guarantee Fee.--The recipient of a loan guarantee under
subsection (b) shall pay the Secretary an amount determined by the
Secretary to be sufficient to cover the administrative costs of the
Secretary relating to the loan guarantee.
(i) Full Faith and Credit.--The full faith and credit of the United
States is pledged to the payment of all guarantees made under this
section. Any such guarantee made by the Secretary shall be conclusive
evidence of the eligibility of the loan for the guarantee with respect
to principal and interest. The validity of the guarantee shall be
incontestable in the hands of a holder of the guaranteed loan.
(j) Reports.--Until each guaranteed loan under this section has
been repaid in full, the Secretary shall annually submit to Congress a
report on the activities of the Secretary under this section.
(k) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
(l) Termination of Authority.--The authority of the Secretary to
issue a loan guarantee under subsection (b) terminates on the date that
is 10 years after the date of enactment of this Act.

SEC. 1512. RESOURCE CENTER.

(a) Definition.--In this section, the term ``RFG State'' means a
State in which is located one or more covered areas (as defined in
section 211(k)(10)(D) of the Clean Air Act (42 U.S.C. 7545(k)(10)(D)).
(b) Authorization of Appropriations for Resource Center.--There are
authorized to be appropriated, for a resource center to further develop
bioconversion technology using low-cost biomass for the production of
ethanol at the Center for Biomass-Based Energy at the University of
Mississippi and the University of Oklahoma, $4,000,000 for each of
fiscal years 2004 through 2006.
(c) Renewable Fuel Production Research and Development Grants.--
(1) In general.--The Administrator of the Environmental
Protection Agency shall provide grants for the research into,
and development and implementation of, renewable fuel
production technologies in RFG States with low rates of ethanol
production, including low rates of production of cellulosic
biomass ethanol.
(2) Eligibility.--
(A) In general.--The entities eligible to receive a
grant under this subsection are academic institutions
in RFG States, and consortia made up of combinations of
academic institutions, industry, State government
agencies, or local government agencies in RFG States,
that have proven experience and capabilities with
relevant technologies.
(B) Application.--To be eligible to receive a grant
under this subsection, an eligible entity shall submit
to the Administrator an application in such manner and
form, and accompanied by such information, as the
Administrator may specify.
(3) Authorization of appropriations.--There are authorized
to be appropriated to carry out this subsection $25,000,000 for
each of fiscal years 2004 through 2008.

SEC. 1513. CELLULOSIC BIOMASS AND WASTE-DERIVED ETHANOL CONVERSION
ASSISTANCE.

Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by
adding at the end the following:
``(r) Cellulosic Biomass and Waste-Derived Ethanol Conversion
Assistance.--
``(1) In general.--The Secretary of Energy may provide
grants to merchant producers of cellulosic biomass ethanol and
waste-derived ethanol in the United States to assist the
producers in building eligible production facilities described
in paragraph (2) for the production of ethanol.
``(2) Eligible production facilities.--A production
facility shall be eligible to receive a grant under this
subsection if the production facility--
``(A) is located in the United States; and
``(B) uses cellulosic biomass or waste-derived
feedstocks derived from agricultural residues,
municipal solid waste, or agricultural byproducts as
that term is used in section 919 of the Energy Policy
Act of 2003.
``(3) Authorization of appropriations.--There are
authorized to be appropriated the following amounts to carry
out this subsection:
``(A) $100,000,000 for fiscal year 2004.
``(B) $250,000,000 for fiscal year 2005.
``(C) $400,000,000 for fiscal year 2006.''.

SEC. 1514. BLENDING OF COMPLIANT REFORMULATED GASOLINES.

Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by
adding at the end the following:
``(s) Blending of Compliant Reformulated Gasolines.--
``(1) In general.--Notwithstanding subsections (h) and (k)
and subject to the limitations in paragraph (2) of this
subsection, it shall not be a violation of this subtitle for a
gasoline retailer, during any month of the year, to blend at a
retail location batches of ethanol-blended and non-ethanol-
blended reformulated gasoline, provided that--
``(A) each batch of gasoline to be blended has been
individually certified as in compliance with
subsections (h) and (k) prior to being blended;
``(B) the retailer notifies the Administrator prior
to such blending, and identifies the exact location of
the retail station and the specific tank in which such
blending will take place;
``(C) the retailer retains and, as requested by the
Administrator or the Administrator's designee, makes
available for inspection such certifications accounting
for all gasoline at the retail outlet; and
``(D) the retailer does not, between June 1 and
September 15 of each year, blend a batch of VOC-
controlled, or `summer', gasoline with a batch of non-
VOC-controlled, or `winter', gasoline (as these terms
are defined under subsections (h) and (k)).
``(2) Limitations.--
``(A) Frequency limitation.--A retailer shall only be
permitted to blend batches of compliant reformulated gasoline
under this subsection a maximum of two blending periods between
May 1 and September 15 of each calendar year.
``(B) Duration of blending period.--Each blending period
authorized under subparagraph (A) shall extend for a period of
no more than 10 consecutive calendar days.
``(3) Surveys.--A sample of gasoline taken from a retail
location that has blended gasoline within the past 30 days and
is in compliance with subparagraphs (A), (B), (C), and (D) of
paragraph (1) shall not be used in a VOC survey mandated by 40
C.F.R. Part 80.
``(4) State implementation plans.--A State shall be held
harmless and shall not be required to revise its State
implementation plan under section 110 to account for the
emissions from blended gasoline authorized under paragraph (1).
``(5) Preservation of state law.--Nothing in this
subsection shall--
``(A) preempt existing State laws or regulations
regulating the blending of compliant gasolines; or
``(B) prohibit a State from adopting such
restrictions in the future.
``(6) Regulations.--The Administrator shall promulgate,
after notice and comment, regulations implementing this
subsection within one year after the date of enactment of this
subsection.
``(7) Effective date.--This subsection shall become
effective 15 months after the date of its enactment and shall
apply to blended batches of reformulated gasoline on or after
that date, regardless of whether the implementing regulations
required by paragraph (6) have been promulgated by the
Administrator by that date.
``(8) Liability.--No person other than the person
responsible for blending under this subsection shall be subject
to an enforcement action or penalties under subsection (d)
solely arising from the blending of compliant reformulated
gasolines by the retailers.
``(9) Formulation of gasoline.--This subsection does not
grant authority to the Administrator or any State (or any
subdivision thereof) to require reformulation of gasoline at
the refinery to adjust for potential or actual emissions
increases due to the blending authorized by this subsection.''.

Subtitle B--Underground Storage Tank Compliance

SEC. 1521. SHORT TITLE.

This subtitle may be cited as the ``Underground Storage Tank
Compliance Act of 2004''.

SEC. 1522. LEAKING UNDERGROUND STORAGE TANKS.

(a) In General.--Section 9004 of the Solid Waste Disposal Act (42
U.S.C. 6991c) is amended by adding at the end the following:
``(f) Trust Fund Distribution.--
``(1) In general.--
``(A) Amount and permitted uses of distribution.--
The Administrator shall distribute to States not less
than 80 percent of the funds from the Trust Fund that
are made available to the Administrator under section
9014(2)(A) for each fiscal year for use in paying the
reasonable costs, incurred under a cooperative
agreement with any State for--
``(i) actions taken by the State under
section 9003(h)(7)(A);
``(ii) necessary administrative expenses,
as determined by the Administrator, that are
directly related to State fund or State
assurance programs under subsection (c)(1);
``(iii) any State fund or State assurance
program carried out under subsection (c)(1) for
a release from an underground storage tank
regulated under this subtitle to the extent
that, as determined by the State in accordance
with guidelines developed jointly by the
Administrator and the States, the financial
resources of the owner and operator of the
underground storage tank (including resources
provided by a program in accordance with
subsection (c)(1)) are not adequate to pay the
cost of a corrective action without
significantly impairing the ability of the
owner or operator to continue in business; or
``(iv) enforcement, by a State or a local
government, of State or local regulations
pertaining to underground storage tanks
regulated under this subtitle.
``(B) Use of funds for enforcement.--In addition to
the uses of funds authorized under subparagraph (A),
the Administrator may use funds from the Trust Fund
that are not distributed to States under subparagraph
(A) for enforcement of any regulation promulgated by
the Administrator under this subtitle.
``(C) Prohibited uses.--Funds provided to a State
by the Administrator under subparagraph (A) shall not
be used by the State to provide financial assistance to
an owner or operator to meet any requirement relating
to underground storage tanks under subparts B, C, D, H,
and G of part 280 of title 40, Code of Federal
Regulations (as in effect on the date of enactment of
this subsection).
``(2) Allocation.--
``(A) Process.--Subject to subparagraphs (B) and
(C), in the case of a State with which the
Administrator has entered into a cooperative agreement
under section 9003(h)(7)(A), the Administrator shall
distribute funds from the Trust Fund to the State using
an allocation process developed by the Administrator.
``(B) Diversion of state funds.--The Administrator
shall not distribute funds under subparagraph (A)(iii)
of subsection (f)(1) to any State that has diverted
funds from a State fund or State assurance program for
purposes other than those related to the regulation of
underground storage tanks covered by this subtitle,
with the exception of those transfers that had been
completed earlier than the date of enactment of this
subsection.
``(C) Revisions to process.--The Administrator may
revise the allocation process referred to in
subparagraph (A) after--
``(i) consulting with State agencies
responsible for overseeing corrective action
for releases from underground storage tanks;
and
``(ii) taking into consideration, at a
minimum, each of the following:
``(I) The number of confirmed
releases from federally regulated
leaking underground storage tanks in
the States.
``(II) The number of federally
regulated underground storage tanks in
the States.
``(III) The performance of the
States in implementing and enforcing
the program.
``(IV) The financial needs of the
States.
``(V) The ability of the States to
use the funds referred to in
subparagraph (A) in any year.
``(3) Distributions to state agencies.--Distributions from
the Trust Fund under this subsection shall be made directly to
a State agency that--
``(A) enters into a cooperative agreement referred
to in paragraph (2)(A); or
``(B) is enforcing a State program approved under
this section.
``(4) Cost recovery prohibition.--Funds from the Trust Fund
provided by States to owners or operators under paragraph
(1)(A)(iii) shall not be subject to cost recovery by the
Administrator under section 9003(h)(6).''.
(b) Withdrawal of Approval of State Funds.--Section 9004(c) of the
Solid Waste Disposal Act (42 U.S.C. 6991c(c)) is amended by inserting
the following new paragraph at the end thereof:
``(6) Withdrawal of approval.--After an opportunity for
good faith, collaborative efforts to correct financial
deficiencies with a State fund, the Administrator may withdraw
approval of any State fund or State assurance program to be
used as a financial responsibility mechanism without
withdrawing approval of a State underground storage tank
program under section 9004(a).''.

SEC. 1523. INSPECTION OF UNDERGROUND STORAGE TANKS.

(a) Inspection Requirements.--Section 9005 of the Solid Waste
Disposal Act (42 U.S.C. 6991d) is amended by inserting the following
new subsection at the end thereof:
``(c) Inspection Requirements.--
``(1) Uninspected tanks.--In the case of underground
storage tanks regulated under this subtitle that have not
undergone an inspection since December 22, 1998, not later than
2 years after the date of enactment of this subsection, the
Administrator or a State that receives funding under this
subtitle, as appropriate, shall conduct on-site inspections of
all such tanks to determine compliance with this subtitle and
the regulations under this subtitle (40 C.F.R. 280) or a
requirement or standard of a State program developed under
section 9004.
``(2) Periodic inspections.--After completion of all
inspections required under paragraph (1), the Administrator or
a State that receives funding under this subtitle, as
appropriate, shall conduct on-site inspections of each
underground storage tank regulated under this subtitle at least
once every 3 years to determine compliance with this subtitle
and the regulations under this subtitle (40 C.F.R. 280) or a
requirement or standard of a State program developed under
section 9004. The Administrator may extend for up to one
additional year the first 3-year inspection interval under this
paragraph if the State demonstrates that it has insufficient
resources to complete all such inspections within the first 3-
year period.
``(3) Inspection authority.--Nothing in this section shall
be construed to diminish the Administrator's or a State's
authorities under section 9005(a).''.
(b) Study of Alternative Inspection Programs.--The Administrator of
the Environmental Protection Agency, in coordination with a State,
shall gather information on compliance assurance programs that could
serve as an alternative to the inspection programs under section
9005(c) of the Solid Waste Disposal Act (42 U.S.C. 6991d(c)) and shall,
within 4 years after the date of enactment of this Act, submit a report
to the Congress containing the results of such study.

SEC. 1524. OPERATOR TRAINING.

(a) In General.--Section 9010 of the Solid Waste Disposal Act (42
U.S.C. 6991i) is amended to read as follows:

``SEC. 9010. OPERATOR TRAINING.

``(a) Guidelines.--
``(1) In general.--Not later than 2 years after the date of
enactment of the Underground Storage Tank Compliance Act of
2004, in consultation and cooperation with States and after
public notice and opportunity for comment, the Administrator
shall publish guidelines that specify training requirements for
persons having primary daily on-site management responsibility
for the operation and maintenance of underground storage tanks.
``(2) Considerations.--The guidelines described in
paragraph (1) shall take into account--
``(A) State training programs in existence as of
the date of publication of the guidelines;
``(B) training programs that are being employed by
tank owners and tank operators as of the date of
enactment of the Underground Storage Tank Compliance
Act of 2004;
``(C) the high turnover rate of tank operators and
other personnel;
``(D) the frequency of improvement in underground
storage tank equipment technology;
``(E) the nature of the businesses in which the
tank operators are engaged; and
``(F) such other factors as the Administrator
determines to be necessary to carry out this section.
``(b) State Programs.--
``(1) In general.--Not later than 2 years after the date on
which the Administrator publishes the guidelines under
subsection (a)(1), each State that receives funding under this
subtitle shall develop State-specific training requirements
that are consistent with the guidelines developed under
subsection (a)(1).
``(2) Requirements.--State requirements described in
paragraph (1) shall--
``(A) be consistent with subsection (a);
``(B) be developed in cooperation with tank owners
and tank operators;
``(C) take into consideration training programs
implemented by tank owners and tank operators as of the
date of enactment of this section; and
``(D) be appropriately communicated to tank owners
and operators.
``(3) Financial incentive.--The Administrator may award to
a State that develops and implements requirements described in
paragraph (1), in addition to any funds that the State is
entitled to receive under this subtitle, not more than
$200,000, to be used to carry out the requirements.
``(c) Operators.--All persons having primary daily on-site
management responsibility for the operation and maintenance of any
underground storage tank shall--
``(1) meet the training requirements developed under
subsection (b); and
``(2) repeat the applicable requirements developed under
subsection (b), if the tank for which they have primary daily
on-site management responsibilities is determined to be out of
compliance with--
``(A) a requirement or standard promulgated by the
Administrator under section 9003; or
``(B) a requirement or standard of a State program
approved under section 9004.''.
(b) State Program Requirement.--Section 9004(a) of the Solid Waste
Disposal Act (42 U.S.C. 6991c(a)) is amended by striking ``and'' at the
end of paragraph (7), by striking the period at the end of paragraph
(8) and inserting ``; and'', and by adding the following new paragraph
at the end thereof:
``(9) State-specific training requirements as required by
section 9010.''.
(c) Enforcement.--Section 9006(d)(2) of such Act (42 U.S.C. 6991e)
is amended as follows:
(1) By striking ``or'' at the end of subparagraph (B).
(2) By adding the following new subparagraph after
subparagraph (C):
``(D) the training requirements established by States
pursuant to section 9010 (relating to operator training); or''.
(d) Table of Contents.--The item relating to section 9010 in table
of contents for the Solid Waste Disposal Act is amended to read as
follows:

``Sec. 9010. Operator training.''.

SEC. 1525. REMEDIATION FROM OXYGENATED FUEL ADDITIVES.

Section 9003(h) of the Solid Waste Disposal Act (42 U.S.C.
6991b(h)) is amended as follows:
(1) In paragraph (7)(A)--
(A) by striking ``paragraphs (1) and (2) of this
subsection'' and inserting ``paragraphs (1), (2), and
(12)'' ; and
(B) by striking ``and including the authorities of
paragraphs (4), (6), and (8) of this subsection'' and
inserting ``and the authority under sections 9011 and
9012 and paragraphs (4), (6), and (8),''.
(2) By adding at the end the following:
``(12) Remediation of oxygenated fuel contamination.--
``(A) In general.--The Administrator and the States
may use funds made available under section 9014(2)(B)
to carry out corrective actions with respect to a
release of a fuel containing an oxygenated fuel
additive that presents a threat to human health or
welfare or the environment.
``(B) Applicable authority.--The Administrator or a
State shall carry out subparagraph (A) in accordance
with paragraph (2), and in the case of a State, in
accordance with a cooperative agreement entered into by
the Administrator and the State under paragraph (7).''.

SEC. 1526. RELEASE PREVENTION, COMPLIANCE, AND ENFORCEMENT.

(a) Release Prevention and Compliance.--Subtitle I of the Solid
Waste Disposal Act (42 U.S.C. 6991 et seq.) is amended by adding at the
end the following:

``SEC. 9011. USE OF FUNDS FOR RELEASE PREVENTION AND COMPLIANCE.

``Funds made available under section 9014(2)(D) from the Trust Fund
may be used to conduct inspections, issue orders, or bring actions
under this subtitle--
``(1) by a State, in accordance with a grant or cooperative
agreement with the Administrator, of State regulations
pertaining to underground storage tanks regulated under this
subtitle; and
``(2) by the Administrator, for tanks regulated under this
subtitle (including under a State program approved under
section 9004).''.
(b) Government-Owned Tanks.--Section 9003 of the Solid Waste
Disposal Act (42 U.S.C. 6991b) is amended by adding at the end the
following:
``(i) Government-Owned Tanks.--
``(1) State compliance report.--(A) Not later than 2 years
after the date of enactment of this subsection, each State that
receives funding under this subtitle shall submit to the
Administrator a State compliance report that--
``(i) lists the location and owner of each
underground storage tank described in subparagraph (B)
in the State that, as of the date of submission of the
report, is not in compliance with section 9003; and
``(ii) specifies the date of the last inspection
and describes the actions that have been and will be
taken to ensure compliance of the underground storage
tank listed under clause (i) with this subtitle.
``(B) An underground storage tank described in this
subparagraph is an underground storage tank that is--
``(i) regulated under this subtitle; and
``(ii) owned or operated by the Federal, State, or
local government.
``(C) The Administrator shall make each report, received
under subparagraph (A), available to the public through an
appropriate media.
``(2) Financial incentive.--The Administrator may award to
a State that develops a report described in paragraph (1), in
addition to any other funds that the State is entitled to
receive under this subtitle, not more than $50,000, to be used
to carry out the report.
``(3) Not a safe harbor.--This subsection does not relieve
any person from any obligation or requirement under this
subtitle.''.
(c) Public Record.--Section 9002 of the Solid Waste Disposal Act
(42 U.S.C. 6991a) is amended by adding at the end the following:
``(d) Public Record.--
``(1) In general.--The Administrator shall require each
State that receives Federal funds to carry out this subtitle to
maintain, update at least annually, and make available to the
public, in such manner and form as the Administrator shall
prescribe (after consultation with States), a record of
underground storage tanks regulated under this subtitle.
``(2) Considerations.--To the maximum extent practicable,
the public record of a State, respectively, shall include, for
each year--
``(A) the number, sources, and causes of
underground storage tank releases in the State;
``(B) the record of compliance by underground
storage tanks in the State with--
``(i) this subtitle; or
``(ii) an applicable State program approved
under section 9004; and
``(C) data on the number of underground storage
tank equipment failures in the State.''.
(d) Incentive for Performance.--Section 9006 of the Solid Waste
Disposal Act (42 U.S.C. 6991e) is amended by adding at the end the
following:
``(e) Incentive for Performance.--Both of the following may be
taken into account in determining the terms of a civil penalty under
subsection (d):
``(1) The compliance history of an owner or operator in
accordance with this subtitle or a program approved under
section 9004.
``(2) Any other factor the Administrator considers
appropriate.''.
(e) Table of Contents.--The table of contents for such subtitle I
is amended by adding the following new item at the end thereof:

``Sec. 9011. Use of funds for release prevention and compliance.''.

SEC. 1527. DELIVERY PROHIBITION.

(a) In General.--Subtitle I of the Solid Waste Disposal Act (42
U.S.C. 6991 et seq.) is amended by adding at the end the following:

``SEC. 9012. DELIVERY PROHIBITION.

``(a) Requirements.--
``(1) Prohibition of delivery or deposit.--Beginning 2
years after the date of enactment of this section, it shall be
unlawful to deliver to, deposit into, or accept a regulated
substance into an underground storage tank at a facility which
has been identified by the Administrator or a State
implementing agency to be ineligible for fuel delivery or
deposit.
``(2) Guidance.--Within 1 year after the date of enactment
of this section, the Administrator and States that receive
funding under this subtitle shall, in consultation with the
underground storage tank owner and product delivery industries,
for territory for which they are the primary implementing
agencies, publish guidelines detailing the specific processes
and procedures they will use to implement the provisions of
this section. The processes and procedures include, at a
minimum--
``(A) the criteria for determining which
underground storage tank facilities are ineligible for
delivery or deposit;
``(B) the mechanisms for identifying which
facilities are ineligible for delivery or deposit to
the underground storage tank owning and fuel delivery
industries;
``(C) the process for reclassifying ineligible
facilities as eligible for delivery or deposit; and
``(D) a delineation of, or a process for
determining, the specified geographic areas subject to
paragraph (4).
``(3) Delivery prohibition notice.--
``(A) Roster.--The Administrator and each State
implementing agency that receives funding under this
subtitle shall establish within 24 months after the
date of enactment of this section a Delivery
Prohibition Roster listing underground storage tanks
under the Administrator's or the State's jurisdiction
that are determined to be ineligible for delivery or
deposit pursuant to paragraph (2).
``(B) Notification.--The Administrator and each
State, as appropriate, shall make readily known, to
underground storage tank owners and operators and to
product delivery industries, the underground storage
tanks listed on a Delivery Prohibition Roster by:
``(i) posting such Rosters, including the
physical location and street address of each
listed underground storage tank, on official
web sites and, if the Administrator or the
State so chooses, other electronic means;
``(ii) updating these Rosters periodically;
and
``(iii) installing a tamper-proof tag,
seal, or other device blocking the fill pipes
of such underground storage tanks to prevent
the delivery of product into such underground
storage tanks.
``(C) Roster updates.--The Administrator and the
State shall update the Delivery Prohibition Rosters as
appropriate, but not less than once a month on the
first day of the month.
``(D) Tampering with device.--
``(i) Prohibition.--It shall be unlawful
for any person, other than an authorized
representative of the Administrator or a State,
as appropriate, to remove, tamper with,
destroy, or damage a device installed by the
Administrator or a State, as appropriate, under
subparagraph (B)(iii) of this subsection.
``(ii) Civil penalties.--Any person
violating clause (i) of this subparagraph shall
be subject to a civil penalty not to exceed
$10,000 for each violation.
``(4) Limitation.--
``(A) Rural and remote areas.--Subject to
subparagraph (B), the Administrator or a State shall
not include an underground storage tank on a Delivery
Prohibition Roster under paragraph (3) if an urgent
threat to public health, as determined by the
Administrator, does not exist and if such a delivery
prohibition would jeopardize the availability of, or
access to, fuel in any rural and remote areas.
``(B) Applicability of limitation.--The limitation
under subparagraph (A) shall apply only during the 180-
day period following the date of a determination by the
Administrator or the appropriate State that exercising
the authority of paragraph (3) is limited by
subparagraph (A).
``(b) Effect on State Authority.--Nothing in this section shall
affect the authority of a State to prohibit the delivery of a regulated
substance to an underground storage tank.
``(c) Defense to Violation.--A person shall not be in violation of
subsection (a)(1) if the underground storage tank into which a
regulated substance is delivered is not listed on the Administrator's
or the appropriate State's Prohibited Delivery Roster 7 calendar days
prior to the delivery being made.''.
(b) Enforcement.--Section 9006(d)(2) of such Act (42 U.S.C.
6991e(d)(2)) is amended as follows:
(1) By adding the following new subparagraph after
subparagraph (D):
``(E) the delivery prohibition requirement established by
section 9012,''.
(2) By adding the following new sentence at the end
thereof: ``Any person making or accepting a delivery or deposit
of a regulated substance to an underground storage tank at an
ineligible facility in violation of section 9012 shall also be
subject to the same civil penalty for each day of such
violation.''.
(c) Table of Contents.--The table of contents for such subtitle I
is amended by adding the following new item at the end thereof:

``Sec. 9012. Delivery prohibition.''.

SEC. 1528. FEDERAL FACILITIES.

Section 9007 of the Solid Waste Disposal Act (42 U.S.C. 6991f) is
amended to read as follows:

``SEC. 9007. FEDERAL FACILITIES.

``(a) In General.--Each department, agency, and instrumentality of
the executive, legislative, and judicial branches of the Federal
Government (1) having jurisdiction over any underground storage tank or
underground storage tank system, or (2) engaged in any activity
resulting, or which may result, in the installation, operation,
management, or closure of any underground storage tank, release
response activities related thereto, or in the delivery, acceptance, or
deposit of any regulated substance to an underground storage tank or
underground storage tank system shall be subject to, and comply with,
all Federal, State, interstate, and local requirements, both
substantive and procedural (including any requirement for permits or
reporting or any provisions for injunctive relief and such sanctions as
may be imposed by a court to enforce such relief), respecting
underground storage tanks in the same manner, and to the same extent,
as any person is subject to such requirements, including the payment of
reasonable service charges. The Federal, State, interstate, and local
substantive and procedural requirements referred to in this subsection
include, but are not limited to, all administrative orders and all
civil and administrative penalties and fines, regardless of whether
such penalties or fines are punitive or coercive in nature or are
imposed for isolated, intermittent, or continuing violations. The
United States hereby expressly waives any immunity otherwise applicable
to the United States with respect to any such substantive or procedural
requirement (including, but not limited to, any injunctive relief,
administrative order or civil or administrative penalty or fine
referred to in the preceding sentence, or reasonable service charge).
The reasonable service charges referred to in this subsection include,
but are not limited to, fees or charges assessed in connection with the
processing and issuance of permits, renewal of permits, amendments to
permits, review of plans, studies, and other documents, and inspection
and monitoring of facilities, as well as any other nondiscriminatory
charges that are assessed in connection with a Federal, State,
interstate, or local underground storage tank regulatory program.
Neither the United States, nor any agent, employee, or officer thereof,
shall be immune or exempt from any process or sanction of any State or
Federal Court with respect to the enforcement of any such injunctive
relief. No agent, employee, or officer of the United States shall be
personally liable for any civil penalty under any Federal, State,
interstate, or local law concerning underground storage tanks with
respect to any act or omission within the scope of the official duties
of the agent, employee, or officer. An agent, employee, or officer of
the United States shall be subject to any criminal sanction (including,
but not limited to, any fine or imprisonment) under any Federal or
State law concerning underground storage tanks, but no department,
agency, or instrumentality of the executive, legislative, or judicial
branch of the Federal Government shall be subject to any such sanction.
The President may exempt any underground storage tank of any
department, agency, or instrumentality in the executive branch from
compliance with such a requirement if he determines it to be in the
paramount interest of the United States to do so. No such exemption
shall be granted due to lack of appropriation unless the President
shall have specifically requested such appropriation as a part of the
budgetary process and the Congress shall have failed to make available
such requested appropriation. Any exemption shall be for a period not
in excess of one year, but additional exemptions may be granted for
periods not to exceed one year upon the President's making a new
determination. The President shall report each January to the Congress
all exemptions from the requirements of this section granted during the
preceding calendar year, together with his reason for granting each
such exemption.
``(b) Review of and Report on Federal Underground Storage Tanks.--
``(1) Review.--Not later than 12 months after the date of
enactment of the Underground Storage Tank Compliance Act of
2004, each Federal agency that owns or operates 1 or more
underground storage tanks, or that manages land on which 1 or
more underground storage tanks are located, shall submit to the
Administrator, the Committee on Energy and Commerce of the
United States House of Representatives, and the Committee on
the Environment and Public Works of the United States Senate a
compliance strategy report that--
``(A) lists the location and owner of each
underground storage tank described in this paragraph;
``(B) lists all tanks that are not in compliance
with this subtitle that are owned or operated by the
Federal agency;
``(C) specifies the date of the last inspection by
a State or Federal inspector of each underground
storage tank owned or operated by the agency;
``(D) lists each violation of this subtitle
respecting any underground storage tank owned or
operated by the agency;
``(E) describes the operator training that has been
provided to the operator and other persons having
primary daily on-site management responsibility for the
operation and maintenance of underground storage tanks
owned or operated by the agency; and
``(F) describes the actions that have been and will
be taken to ensure compliance for each underground
storage tank identified under subparagraph (B).
``(2) Not a safe harbor.--This subsection does not relieve
any person from any obligation or requirement under this
subtitle.''.

SEC. 1529. TANKS ON TRIBAL LANDS.

(a) In General.--Subtitle I of the Solid Waste Disposal Act (42
U.S.C. 6991 et seq.) is amended by adding the following at the end
thereof:

``SEC. 9013. TANKS ON TRIBAL LANDS.

``(a) Strategy.--The Administrator, in coordination with Indian
tribes, shall, not later than 1 year after the date of enactment of
this section, develop and implement a strategy--
``(1) giving priority to releases that present the greatest
threat to human health or the environment, to take necessary
corrective action in response to releases from leaking
underground storage tanks located wholly within the boundaries
of--
``(A) an Indian reservation; or
``(B) any other area under the jurisdiction of an
Indian tribe; and
``(2) to implement and enforce requirements concerning
underground storage tanks located wholly within the boundaries
of--
``(A) an Indian reservation; or
``(B) any other area under the jurisdiction of an
Indian tribe.
``(b) Report.--Not later than 2 years after the date of enactment
of this section, the Administrator shall submit to Congress a report
that summarizes the status of implementation and enforcement of this
subtitle in areas located wholly within--
``(1) the boundaries of Indian reservations; and
``(2) any other areas under the jurisdiction of an Indian
tribe.
The Administrator shall make the report under this subsection available
to the public.
``(c) Not a Safe Harbor.--This section does not relieve any person
from any obligation or requirement under this subtitle.
``(d) State Authority.--Nothing in this section applies to any
underground storage tank that is located in an area under the
jurisdiction of a State, or that is subject to regulation by a State,
as of the date of enactment of this section.''.
(b) Table of Contents.--The table of contents for such subtitle I
is amended by adding the following new item at the end thereof:

``Sec. 9013. Tanks on Tribal lands.''.

SEC. 1530. FUTURE RELEASE CONTAINMENT TECHNOLOGY.

Not later than 2 years after the date of enactment of this Act, the
Administrator of the Environmental Protection Agency, after
consultation with States, shall make available to the public and to the
Committee on Energy and Commerce of the House of Representatives and
the Committee on Environment and Public Works of the Senate information
on the effectiveness of alternative possible methods and means for
containing releases from underground storage tanks systems.

SEC. 1531. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--Subtitle I of the Solid Waste Disposal Act (42
U.S.C. 6991 et seq.) is amended by adding at the end the following:

``SEC. 9014. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated to the Administrator the
following amounts:
``(1) To carry out subtitle I (except sections 9003(h),
9005(c), 9011 and 9012) $50,000,000 for each of fiscal years
2004 through 2008.
``(2) From the Trust Fund, notwithstanding section
9508(c)(1) of the Internal Revenue Code of 1986:
``(A) to carry out section 9003(h) (except section
9003(h)(12)) $200,000,000 for each of fiscal years 2004
through 2008;
``(B) to carry out section 9003(h)(12),
$200,000,000 for each of fiscal years 2004 through
2008;
``(C) to carry out sections 9004(f) and 9005(c)
$100,000,000 for each of fiscal years 2004 through
2008; and
``(D) to carry out sections 9011 and 9012
$55,000,000 for each of fiscal years 2004 through
2008.''.
(b) Table of Contents.--The table of contents for such subtitle I
is amended by adding the following new item at the end thereof:

``Sec. 9014. Authorization of appropriations.''.

SEC. 1532. CONFORMING AMENDMENTS.

(a) In General.--Section 9001 of the Solid Waste Disposal Act (42
U.S.C. 6991) is amended as follows:
(1) By striking ``For the purposes of this subtitle--'' and
inserting ``In this subtitle:''.
(2) By redesignating paragraphs (1), (2), (3), (4), (5),
(6), (7), and (8) as paragraphs (10), (7), (4), (3), (8), (5),
(2), and (6), respectively.
(3) By inserting before paragraph (2) (as redesignated by
paragraph (2) of this subsection) the following:
``(1) Indian tribe.--
``(A) In general.--The term `Indian tribe' means
any Indian tribe, band, nation, or other organized
group or community that is recognized as being eligible
for special programs and services provided by the
United States to Indians because of their status as
Indians.
``(B) Inclusions.--The term `Indian tribe' includes
an Alaska Native village, as defined in or established
under the Alaska Native Claims Settlement Act (43
U.S.C. 1601 et seq.); and''.
(4) By inserting after paragraph (8) (as redesignated by
paragraph (2) of this subsection) the following:
``(9) Trust fund.--The term `Trust Fund' means the Leaking
Underground Storage Tank Trust Fund established by section 9508
of the Internal Revenue Code of 1986.''.
(b) Conforming Amendments.--The Solid Waste Disposal Act (42 U.S.C.
6901 and following) is amended as follows:
(1) Section 9003(f) (42 U.S.C. 6991b(f)) is amended--
(A) in paragraph (1), by striking ``9001(2)(B)''
and inserting ``9001(7)(B)''; and
(B) in paragraphs (2) and (3), by striking
``9001(2)(A)'' each place it appears and inserting
``9001(7)(A)''.
(2) Section 9003(h) (42 U.S.C. 6991b(h)) is amended in
paragraphs (1), (2)(C), (7)(A), and (11) by striking ``Leaking
Underground Storage Tank Trust Fund'' each place it appears and
inserting ``Trust Fund''.
(3) Section 9009 (42 U.S.C. 6991h) is amended--
(A) in subsection (a), by striking ``9001(2)(B)''
and inserting ``9001(7)(B)''; and
(B) in subsection (d), by striking ``section
9001(1) (A) and (B)'' and inserting ``subparagraphs (A)
and (B) of section 9001(10)''.

SEC. 1533. TECHNICAL AMENDMENTS.

The Solid Waste Disposal Act is amended as follows:
(1) Section 9001(4)(A) (42 U.S.C. 6991(4)(A)) is amended by
striking ``sustances'' and inserting ``substances''.
(2) Section 9003(f)(1) (42 U.S.C. 6991b(f)(1)) is amended
by striking ``subsection (c) and (d) of this section'' and
inserting ``subsections (c) and (d)''.
(3) Section 9004(a) (42 U.S.C. 6991c(a)) is amended by
striking ``in 9001(2) (A) or (B) or both'' and inserting ``in
subparagraph (A) or (B) of section 9001(7)''.
(4) Section 9005 (42 U.S.C. 6991d) is amended--
(A) in subsection (a), by striking ``study taking''
and inserting ``study, taking'';
(B) in subsection (b)(1), by striking ``relevent''
and inserting ``relevant''; and
(C) in subsection (b)(4), by striking
``Evironmental'' and inserting ``Environmental''.

TITLE XVI--STUDIES

SEC. 1601. STUDY ON INVENTORY OF PETROLEUM AND NATURAL GAS STORAGE.

(a) Definition.--For purposes of this section ``petroleum'' means
crude oil, motor gasoline, jet fuel, distillates, and propane.
(b) Study.--The Secretary of Energy shall conduct a study on
petroleum and natural gas storage capacity and operational inventory
levels, nationwide and by major geographical regions.
(c) Contents.--The study shall address--
(1) historical normal ranges for petroleum and natural gas
inventory levels;
(2) historical and projected storage capacity trends;
(3) estimated operation inventory levels below which
outages, delivery slowdown, rationing, interruptions in
service, or other indicators of shortage begin to appear;
(4) explanations for inventory levels dropping below normal
ranges; and
(5) the ability of industry to meet United States demand
for petroleum and natural gas without shortages or price
spikes, when inventory levels are below normal ranges.
(d) Report to Congress.--Not later than 1 year after the date of
enactment of this Act, the Secretary of Energy shall submit a report to
Congress on the results of the study, including findings and any
recommendations for preventing future supply shortages.

SEC. 1602. NATURAL GAS SUPPLY SHORTAGE REPORT.

(a) Report.--Not later than 6 months after the date of enactment of
this Act, the Secretary of Energy shall submit to Congress a report on
natural gas supplies and demand. In preparing the report, the Secretary
shall consult with experts in natural gas supply and demand as well as
representatives of State and local units of government, tribal
organizations, and consumer and other organizations. As the Secretary
deems advisable, the Secretary may hold public hearings and provide
other opportunities for public comment. The report shall contain
recommendations for Federal actions that, if implemented, will result
in a balance between natural gas supply and demand at a level that will
ensure, to the maximum extent practicable, achievement of the
objectives established in subsection (b).
(b) Objectives of Report.--In preparing the report, the Secretary
shall seek to develop a series of recommendations that will result in a
balance between natural gas supply and demand adequate to--
(1) provide residential consumers with natural gas at
reasonable and stable prices;
(2) accommodate long-term maintenance and growth of
domestic natural gas-dependent industrial, manufacturing, and
commercial enterprises;
(3) facilitate the attainment of national ambient air
quality standards under the Clean Air Act;
(4) permit continued progress in reducing emissions
associated with electric power generation; and
(5) support development of the preliminary phases of
hydrogen-based energy technologies.
(c) Contents of Report.--The report shall provide a comprehensive
analysis of natural gas supply and demand in the United States for the
period from 2004 to 2015. The analysis shall include, at a minimum--
(1) estimates of annual domestic demand for natural gas
that take into account the effect of Federal policies and
actions that are likely to increase and decrease demand for
natural gas;
(2) projections of annual natural gas supplies, from
domestic and foreign sources, under existing Federal policies;
(3) an identification of estimated natural gas supplies
that are not available under existing Federal policies;
(4) scenarios for decreasing natural gas demand and
increasing natural gas supplies comparing relative economic and
environmental impacts of Federal policies that--
(A) encourage or require the use of natural gas to
meet air quality, carbon dioxide emission reduction, or
energy security goals;
(B) encourage or require the use of energy sources
other than natural gas, including coal, nuclear, and
renewable sources;
(C) support technologies to develop alternative
sources of natural gas and synthetic gas, including
coal gasification technologies;
(D) encourage or require the use of energy
conservation and demand side management practices; and
(E) affect access to domestic natural gas supplies;
and
(5) recommendations for Federal actions to achieve the
objectives of the report, including recommendations that--
(A) encourage or require the use of energy sources
other than natural gas, including coal, nuclear, and
renewable sources;
(B) encourage or require the use of energy
conservation or demand side management practices;
(C) support technologies for the development of
alternative sources of natural gas and synthetic gas,
including coal gasification technologies; and
(D) will improve access to domestic natural gas
supplies.

SEC. 1603. SPLIT-ESTATE FEDERAL OIL AND GAS LEASING AND DEVELOPMENT
PRACTICES.

(a) Review.--In consultation with affected private surface owners,
oil and gas industry, and other interested parties, the Secretary of
the Interior shall undertake a review of the current policies and
practices with respect to management of Federal subsurface oil and gas
development activities and their effects on the privately owned
surface. This review shall include--
(1) a comparison of the rights and responsibilities under
existing mineral and land law for the owner of a Federal
mineral lease, the private surface owners and the Department;
(2) a comparison of the surface owner consent provisions in
section 714 of the Surface Mining Control and Reclamation Act
of 1977 (30 U.S.C. 1304) concerning surface mining of Federal
coal deposits and the surface owner consent provisions for oil
and gas development, including coalbed methane production; and
(3) recommendations for administrative or legislative
action necessary to facilitate reasonable access for Federal
oil and gas activities while addressing surface owner concerns
and minimizing impacts to private surface.
(b) Report.--The Secretary of the Interior shall report the results
of such review to Congress not later than 180 days after the date of
enactment of this Act.

SEC. 1604. RESOLUTION OF FEDERAL RESOURCE DEVELOPMENT CONFLICTS IN THE
POWDER RIVER BASIN.

The Secretary of the Interior shall--
(1) undertake a review of existing authorities to resolve
conflicts between the development of Federal coal and the
development of Federal and non-Federal coalbed methane in the
Powder River Basin in Wyoming and Montana; and
(2) not later than 6 months after the date of enactment of
this Act, report to Congress on alternatives to resolve these
conflicts and identification of a preferred alternative with
specific legislative language, if any, required to implement
the preferred alternative.

SEC. 1605. 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 after the date 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 Congress.

SEC. 1606. TELECOMMUTING STUDY.

(a) Study Required.--The Secretary, in consultation with the
Commission, the Director of the Office of Personnel Management, the
Administrator of General Services, and the Administrator of NTIA, shall
conduct a study of the energy conservation implications of the
widespread adoption of telecommuting by Federal employees in the United
States.
(b) Required Subjects of Study.--The study required by subsection
(a) shall analyze the following subjects in relation to the energy
saving potential of telecommuting by Federal employees:
(1) Reductions of energy use and energy costs in commuting
and regular office heating, cooling, and other operations.
(2) Other energy reductions accomplished by telecommuting.
(3) Existing regulatory barriers that hamper telecommuting,
including barriers to broadband telecommunications services
deployment.
(4) Collateral benefits to the environment, family life,
and other values.
(c) Report Required.--The Secretary shall submit to the President
and Congress a report on the study required by this section not later
than 6 months after the date of enactment of this Act. Such report
shall include a description of the results of the analysis of each of
the subject described in subsection (b).
(d) Definitions.--As used in this section:
(1) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(2) Commission.--The term ``Commission'' means the Federal
Communications Commission.
(3) NTIA.--The term ``NTIA'' means the National
Telecommunications and Information Administration of the
Department of Commerce.
(4) Telecommuting.--The term ``telecommuting'' means the
performance of work functions using communications
technologies, thereby eliminating or substantially reducing the
need to commute to and from traditional worksites.
(5) Federal employee.--The term ``Federal employee'' has
the meaning provided the term ``employee'' by section 2105 of
title 5, United States Code.

SEC. 1607. LIHEAP REPORT.

Not later than 1 year after the date of enactment of this Act, the
Secretary of Health and Human Services shall transmit to 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. 1608. 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;
(2) examine the feasibility of using oil bypass filtration
technology in Federal motor vehicle fleets; and
(3) include in such study, prior to any determination of
the feasibility of using oil bypass filtration technology, the
evaluation of products and various manufacturers.

SEC. 1609. TOTAL INTEGRATED THERMAL SYSTEMS.

The Secretary of Energy 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. 1610. UNIVERSITY COLLABORATION.

Not later than 2 years after the date of enactment of this Act, the
Secretary of Energy shall transmit to Congress a report that examines
the feasibility of promoting collaborations between large institutions
of higher education and small institutions of higher education through
grants, contracts, and cooperative agreements made by the Secretary for
energy projects. The Secretary shall also consider providing incentives
for the inclusion of small institutions of higher education, including
minority-serving institutions, in energy research grants, contracts,
and cooperative agreements.

SEC. 1611. RELIABILITY AND CONSUMER PROTECTION ASSESSMENT.

Not later than 5 years after the date of enactment of this Act, and
each 5 years thereafter, the Federal Energy Regulatory Commission shall
assess the effects of the exemption of electric cooperatives and
government-owned utilities from Commission regulation under section
201(f) of the Federal Power Act. The assessment shall include any
effects on--
(1) reliability of interstate electric transmission
networks;
(2) benefit to consumers, and efficiency, of competitive
wholesale electricity markets;
(3) just and reasonable rates for electricity consumers;
and
(4) the ability of the Commission to protect electricity
consumers.
If the Commission finds that the 201(f) exemption results in adverse
effects on consumers or electric reliability, the Commission shall make
appropriate recommendations to Congress pursuant to section 311 of the
Federal Power Act.

Passed the House of Representatives June 15, 2004.

Attest:

JEFF TRANDAHL,

Clerk.