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[DOCID: f:publ058.109]

[[Page 593]]

ENERGY POLICY ACT OF 2005

[[Page 119 STAT. 594]]

Public Law 109-58

109th Congress

An Act

.

To ensure jobs for our future with secure, affordable, and reliable

energy. <<NOTE: Aug. 8, 2005 -  [H.R. 6]>>

Be it enacted by the Senate and House of Representatives of the

United States of America in <<NOTE: Energy Policy Act of 2005. 42 USC

15801 note.>> Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Energy Policy Act

of 2005''.

(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. Voluntary commitments to reduce industrial energy intensity.

Sec. 107. Advanced Building Efficiency Testbed.

Sec. 108. Increased use of recovered mineral component in federally

funded projects involving procurement of cement or concrete.

Sec. 109. Federal building performance standards.

Sec. 110. Daylight savings.

Sec. 111. Enhancing energy efficiency in management of Federal lands.

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.

Sec. 127. State Technologies Advancement Collaborative.

Sec. 128. State building energy efficiency codes incentives.

Subtitle C--Energy Efficient Products

Sec. 131. Energy Star program.

Sec. 132. HVAC maintenance consumer education program.

Sec. 133. Public energy education program.

Sec. 134. Energy efficiency public information initiative.

Sec. 135. Energy conservation standards for additional products.

Sec. 136. Energy conservation standards for commercial equipment.

Sec. 137. Energy labeling.

Sec. 138. Intermittent escalator study.

Sec. 139. Energy efficient electric and natural gas utilities study.

Sec. 140. Energy efficiency pilot program.

Sec. 141. Report on failure to comply with deadlines for new or revised

energy

conservation standards.

Subtitle D--Public Housing

Sec. 151. Public housing capital fund.

[[Page 119 STAT. 595]]

Sec. 152. Energy-efficient appliances.

Sec. 153. Energy efficiency standards.

Sec. 154. 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. Use of photovoltaic energy in public buildings.

Sec. 205. Biobased products.

Sec. 206. Renewable energy security.

Sec. 207. Installation of photovoltaic system.

Sec. 208. Sugar cane ethanol program.

Sec. 209. Rural and remote community electrification grants.

Sec. 210. Grants to improve the commercial value of forest biomass for

electric energy, useful heat, transportation fuels, and other

commercial purposes.

Sec. 211. Sense of Congress regarding generation capacity of electricity

from renewable energy resources on public lands.

Subtitle B--Geothermal Energy

Sec. 221. Short title.

Sec. 222. Competitive lease sale requirements.

Sec. 223. Direct use.

Sec. 224. Royalties and near-term production incentives.

Sec. 225. Coordination of geothermal leasing and permitting on Federal

lands.

Sec. 226. Assessment of geothermal energy potential.

Sec. 227. Cooperative or unit plans.

Sec. 228. Royalty on byproducts.

Sec. 229. Authorities of Secretary to readjust terms, conditions,

rentals, and royalties.

Sec. 230. Crediting of rental toward royalty.

Sec. 231. Lease duration and work commitment requirements.

Sec. 232. Advanced royalties required for cessation of production.

Sec. 233. Annual rental.

Sec. 234. Deposit and use of geothermal lease revenues for 5 fiscal

years.

Sec. 235. Acreage limitations.

Sec. 236. Technical amendments.

Sec. 237. Intermountain West Geothermal Consortium.

Subtitle C--Hydroelectric

Sec. 241. Alternative conditions and fishways.

Sec. 242. Hydroelectric production incentives.

Sec. 243. Hydroelectric efficiency improvement.

Sec. 244. Alaska State jurisdiction over small hydroelectric projects.

Sec. 245. Flint Creek hydroelectric project.

Sec. 246. Small hydroelectric power projects.

Subtitle D--Insular Energy

Sec. 251. Insular areas energy security.

Sec. 252. Projects enhancing insular energy independence.

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.

Sec. 303. Site selection.

Subtitle B--Natural Gas

Sec. 311. Exportation or importation of natural gas.

Sec. 312. New natural gas storage facilities.

Sec. 313. Process coordination; hearings; rules of procedure.

Sec. 314. Penalties.

Sec. 315. Market manipulation.

Sec. 316. Natural gas market transparency rules.

Sec. 317. Federal-State liquefied natural gas forums.

Sec. 318. Prohibition of trading and serving by certain individuals.

Subtitle C--Production

Sec. 321. Outer Continental Shelf provisions.

[[Page 119 STAT. 596]]

Sec. 322. Hydraulic fracturing.

Sec. 323. Oil and gas exploration and production defined.

Subtitle D--Naval Petroleum Reserve

Sec. 331. Transfer of administrative jurisdiction and environmental

remediation, Naval Petroleum Reserve Numbered 2, Kern County,

California.

Sec. 332. Naval Petroleum Reserve Numbered 2 Lease Revenue Account.

Sec. 333. Land conveyance, portion of Naval Petroleum Reserve Numbered

2, to City of Taft, California.

Sec. 334. Revocation of land withdrawal.

Subtitle E--Production Incentives

Sec. 341. Definition of Secretary.

Sec. 342. Program on oil and gas royalties in-kind.

Sec. 343. Marginal property production incentives.

Sec. 344. Incentives for natural gas production from deep wells in the

shallow waters of the Gulf of Mexico.

Sec. 345. Royalty relief for deep water production.

Sec. 346. Alaska offshore royalty suspension.

Sec. 347. Oil and gas leasing in the National Petroleum Reserve in

Alaska.

Sec. 348. North Slope Science Initiative.

Sec. 349. Orphaned, abandoned, or idled wells on Federal land.

Sec. 350. Combined hydrocarbon leasing.

Sec. 351. Preservation of geological and geophysical data.

Sec. 352. Oil and gas lease acreage limitations.

Sec. 353. Gas hydrate production incentive.

Sec. 354. Enhanced oil and natural gas production through carbon dioxide

injection.

Sec. 355. Assessment of dependence of State of Hawaii on oil.

Sec. 356. Denali Commission.

Sec. 357. Comprehensive inventory of OCS oil and natural gas resources.

Subtitle F--Access to Federal Lands

Sec. 361. Federal onshore oil and gas leasing and permitting practices.

Sec. 362. Management of Federal oil and gas leasing programs.

Sec. 363. Consultation regarding oil and gas leasing on public land.

Sec. 364. Estimates of oil and gas resources underlying onshore Federal

land.

Sec. 365. Pilot project to improve Federal permit coordination.

Sec. 366. Deadline for consideration of applications for permits.

Sec. 367. Fair market value determinations for linear rights-of-way

across public lands and National Forests.

Sec. 368. Energy right-of-way corridors on Federal land.

Sec. 369. Oil shale, tar sands, and other strategic unconventional

fuels.

Sec. 370. Finger Lakes withdrawal.

Sec. 371. Reinstatement of leases.

Sec. 372. Consultation regarding energy rights-of-way on public land.

Sec. 373. Sense of Congress regarding development of minerals under

Padre Island National Seashore.

Sec. 374. Livingston Parish mineral rights transfer.

Subtitle G--Miscellaneous

Sec. 381. Deadline for decision on appeals of consistency determination

under the Coastal Zone Management Act of 1972.

Sec. 382. Appeals relating to offshore mineral development.

Sec. 383. Royalty payments under leases under the Outer Continental

Shelf Lands Act.

Sec. 384. Coastal impact assistance program.

Sec. 385. Study of availability of skilled workers.

Sec. 386. Great Lakes oil and gas drilling ban.

Sec. 387. Federal coalbed methane regulation.

Sec. 388. Alternate energy-related uses on the Outer Continental Shelf.

Sec. 389. Oil Spill Recovery Institute.

Sec. 390. NEPA review.

Subtitle H--Refinery Revitalization

Sec. 391. Findings and definitions.

Sec. 392. Federal-State regulatory coordination and assistance.

TITLE IV--COAL

Subtitle A--Clean Coal Power Initiative

Sec. 401. Authorization of appropriations.

[[Page 119 STAT. 597]]

Sec. 402. Project criteria.

Sec. 403. Report.

Sec. 404. Clean coal centers of excellence.

Subtitle B--Clean Power Projects

Sec. 411. Integrated coal/renewable energy system.

Sec. 412. Loan to place Alaska clean coal technology facility in

service.

Sec. 413. Western integrated coal gasification demonstration project.

Sec. 414. Coal gasification.

Sec. 415. Petroleum coke gasification.

Sec. 416. Electron scrubbing demonstration.

Sec. 417. Department of Energy transportation fuels from Illinois basin

coal.

Subtitle C--Coal and Related Programs

Sec. 421. Amendment of the Energy Policy Act of 1992.

Subtitle D--Federal Coal Leases

Sec. 431. Short title.

Sec. 432. Repeal of the 160-acre limitation for coal leases.

Sec. 433. Approval of logical mining units.

Sec. 434. Payment of advance royalties under coal leases.

Sec. 435. Elimination of deadline for submission of coal lease operation

and reclamation plan.

Sec. 436. Amendment relating to financial assurances with respect to

bonus bids.

Sec. 437. Inventory requirement.

Sec. 438. Application of amendments.

TITLE V--INDIAN ENERGY

Sec. 501. Short title.

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

Sec. 503. Indian energy.

Sec. 504. Consultation with Indian tribes.

Sec. 505. Four Corners transmission line project and electrification.

Sec. 506. Energy efficiency in federally assisted housing.

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 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. Civil penalties.

Subtitle B--General Nuclear Matters

Sec. 621. Licenses.

Sec. 622. Nuclear Regulatory Commission scholarship and fellowship

program.

Sec. 623. Cost recovery from Government agencies.

Sec. 624. Elimination of pension offset for certain rehired Federal

retirees.

Sec. 625. Antitrust review.

Sec. 626. Decommissioning.

Sec. 627. Limitation on legal fee reimbursement.

Sec. 628. Decommissioning pilot program.

Sec. 629. Whistleblower protection.

Sec. 630. Medical isotope production.

Sec. 631. Safe disposal of greater-than-Class C radioactive waste.

Sec. 632. Prohibition on nuclear exports to countries that sponsor

terrorism.

Sec. 633. Employee benefits.

Sec. 634. Demonstration hydrogen production at existing nuclear power

plants.

Sec. 635. Prohibition on assumption by United States Government of

liability for certain foreign incidents.

Sec. 636. Authorization of appropriations.

Sec. 637. Nuclear Regulatory Commission user fees and annual charges.

Sec. 638. Standby support for certain nuclear plant delays.

Sec. 639. Conflicts of interest relating to contracts and other

arrangements.

[[Page 119 STAT. 598]]

Subtitle C--Next Generation Nuclear Plant Project

Sec. 641. Project establishment.

Sec. 642. Project management.

Sec. 643. Project organization.

Sec. 644. Nuclear Regulatory Commission.

Sec. 645. Project timelines and authorization of appropriations.

Subtitle D--Nuclear Security

Sec. 651. Nuclear facility and materials security.

Sec. 652. Fingerprinting and criminal history record checks.

Sec. 653. Use of firearms by security personnel.

Sec. 654. Unauthorized introduction of dangerous weapons.

Sec. 655. Sabotage of nuclear facilities, fuel, or designated material.

Sec. 656. Secure transfer of nuclear materials.

Sec. 657. Department of Homeland Security consultation.

TITLE VII--VEHICLES AND FUELS

Subtitle A--Existing Programs

Sec. 701. Use of alternative fuels by dual fueled vehicles.

Sec. 702. Incremental cost allocation.

Sec. 703. Alternative compliance and flexibility.

Sec. 704. Review of Energy Policy Act of 1992 programs.

Sec. 705. Report concerning compliance with alternative fueled vehicle

purchasing requirements.

Sec. 706. Joint flexible fuel/hybrid vehicle commercialization

initiative.

Sec. 707. Emergency exemption.

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

Part 1--Hybrid Vehicles

Sec. 711. Hybrid vehicles.

Sec. 712. Efficient hybrid and advanced diesel vehicles.

Part 2--Advanced Vehicles

Sec. 721. Pilot program.

Sec. 722. Reports to Congress.

Sec. 723. Authorization of appropriations.

Part 3--Fuel Cell Buses

Sec. 731. Fuel cell transit bus demonstration.

Subtitle C--Clean School Buses

Sec. 741. Clean school bus program.

Sec. 742. Diesel truck retrofit and fleet modernization program.

Sec. 743. 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.

Sec. 757. Biodiesel engine testing program.

Sec. 758. Ultra-efficient engine technology for aircraft.

Sec. 759. Fuel economy incentive requirements.

Subtitle E--Automobile Efficiency

Sec. 771. Authorization of appropriations for implementation and

enforcement of fuel economy standards.

Sec. 772. Extension of maximum fuel economy increase for alternative

fueled vehicles.

Sec. 773. Study of feasibility and effects of reducing use of fuel for

automobiles.

Sec. 774. Update testing procedures.

Subtitle F--Federal and State Procurement

Sec. 781. Definitions.

Sec. 782. Federal and State procurement of fuel cell vehicles and

hydrogen energy systems.

[[Page 119 STAT. 599]]

Sec. 783. Federal procurement of stationary, portable, and micro fuel

cells.

Subtitle G--Diesel Emissions Reduction

Sec. 791. Definitions.

Sec. 792. National grant and loan programs.

Sec. 793. State grant and loan programs.

Sec. 794. Evaluation and report.

Sec. 795. Outreach and incentives.

Sec. 796. Effect of subtitle.

Sec. 797. Authorization of appropriations.

TITLE VIII--HYDROGEN

Sec. 801. Hydrogen and fuel cell program.

Sec. 802. Purposes.

Sec. 803. Definitions.

Sec. 804. Plan.

Sec. 805. Programs.

Sec. 806. Hydrogen and Fuel Cell Technical Task Force.

Sec. 807. Technical Advisory Committee.

Sec. 808. Demonstration.

Sec. 809. Codes and standards.

Sec. 810. Disclosure.

Sec. 811. Reports.

Sec. 812. Solar and wind technologies.

Sec. 813. Technology transfer.

Sec. 814. Miscellaneous provisions.

Sec. 815. Cost sharing.

Sec. 816. Savings clause.

TITLE IX--RESEARCH AND DEVELOPMENT

Sec. 901. Short title.

Sec. 902. Goals.

Sec. 903. Definitions.

Subtitle A--Energy Efficiency

Sec. 911. Energy efficiency.

Sec. 912. Next Generation Lighting Initiative.

Sec. 913. National Building Performance Initiative.

Sec. 914. Building standards.

Sec. 915. Secondary electric vehicle battery use program.

Sec. 916. Energy Efficiency Science Initiative.

Sec. 917. Advanced Energy Efficiency Technology Transfer Centers.

Subtitle B--Distributed Energy and Electric Energy Systems

Sec. 921. Distributed energy and electric energy systems.

Sec. 922. High power density industry program.

Sec. 923. Micro-cogeneration energy technology.

Sec. 924. Distributed energy technology demonstration programs.

Sec. 925. Electric transmission and distribution programs.

Subtitle C--Renewable Energy

Sec. 931. Renewable energy.

Sec. 932. Bioenergy program.

Sec. 933. Low-cost renewable hydrogen and infrastructure for vehicle

propulsion.

Sec. 934. Concentrating solar power research program.

Sec. 935. Renewable energy in public buildings.

Subtitle D--Agricultural Biomass Research and Development Programs

Sec. 941. Amendments to the Biomass Research and Development Act of

2000.

Sec. 942. Production incentives for cellulosic biofuels.

Sec. 943. Procurement of biobased products.

Sec. 944. Small business bioproduct marketing and certification grants.

Sec. 945. Regional bioeconomy development grants.

Sec. 946. Preprocessing and harvesting demonstration grants.

Sec. 947. Education and outreach.

Sec. 948. Reports.

Subtitle E--Nuclear Energy

Sec. 951. Nuclear energy.

Sec. 952. Nuclear energy research programs.

[[Page 119 STAT. 600]]

Sec. 953. Advanced fuel cycle initiative.

Sec. 954. University nuclear science and engineering support.

Sec. 955. Department of Energy civilian nuclear infrastructure and

facilities.

Sec. 956. Security of nuclear facilities.

Sec. 957. Alternatives to industrial radioactive sources.

Subtitle F--Fossil Energy

Sec. 961. Fossil energy.

Sec. 962. Coal and related technologies program.

Sec. 963. Carbon capture research and development program.

Sec. 964. Research and development for coal mining technologies.

Sec. 965. Oil and gas research programs.

Sec. 966. Low-volume oil and gas reservoir research program.

Sec. 967. Complex well technology testing facility.

Sec. 968. Methane hydrate research.

Subtitle G--Science

Sec. 971. Science.

Sec. 972. Fusion energy sciences program.

Sec. 973. Catalysis research program.

Sec. 974. Hydrogen.

Sec. 975. Solid state lighting.

Sec. 976. Advanced scientific computing for energy missions.

Sec. 977. Systems biology program.

Sec. 978. Fission and fusion energy materials research program.

Sec. 979. Energy and water supplies.

Sec. 980. Spallation Neutron Source.

Sec. 981. Rare isotope accelerator.

Sec. 982. Office of Scientific and Technical Information.

Sec. 983. Science and engineering education pilot program.

Sec. 984. Energy research fellowships.

Sec. 984A. Science and technology scholarship program.

Subtitle H--International Cooperation

Sec. 985. Western Hemisphere energy cooperation.

Sec. 986. Cooperation between United States and Israel.

Sec. 986A. International energy training.

Subtitle I--Research Administration and Operations

Sec. 987. Availability of funds.

Sec. 988. Cost sharing.

Sec. 989. Merit review of proposals.

Sec. 990. External technical review of Departmental programs.

Sec. 991. National Laboratory designation.

Sec. 992. Report on equal employment opportunity practices.

Sec. 993. Strategy and plan for science and energy facilities and

infrastructure.

Sec. 994. Strategic research portfolio analysis and coordination plan.

Sec. 995. Competitive award of management contracts.

Sec. 996. Western Michigan demonstration project.

Sec. 997. Arctic Engineering Research Center.

Sec. 998. Barrow Geophysical Research Facility.

Subtitle J--Ultra-Deepwater and Unconventional Natural Gas and Other

Petroleum Resources

Sec. 999A. Program authority.

Sec. 999B. Ultra-deepwater and unconventional onshore natural gas and

other petroleum research and development program.

Sec. 999C. Additional requirements for awards.

Sec. 999D. Advisory committees.

Sec. 999E. Limits on participation.

Sec. 999F. Sunset.

Sec. 999G. Definitions.

Sec. 999H. Funding.

TITLE X--DEPARTMENT OF ENERGY MANAGEMENT

Sec. 1001. Improved technology transfer of energy technologies.

Sec. 1002. Technology Infrastructure Program.

Sec. 1003. Small business advocacy and assistance.

Sec. 1004. Outreach.

Sec. 1005. Relationship to other laws.

[[Page 119 STAT. 601]]

Sec. 1006. Improved coordination and management of civilian science and

technology programs.

Sec. 1007. Other transactions authority.

Sec. 1008. Prizes for achievement in grand challenges of science and

technology.

Sec. 1009. Technical corrections.

Sec. 1010. University collaboration.

Sec. 1011. Sense of Congress.

TITLE XI--PERSONNEL AND TRAINING

Sec. 1101. Workforce trends and traineeship grants.

Sec. 1102. Educational programs in science and mathematics.

Sec. 1103. Training guidelines for nonnuclear electric energy industry

personnel.

Sec. 1104. National Center for Energy Management and Building

Technologies.

Sec. 1105. Improved access to energy-related scientific and technical

careers.

Sec. 1106. National Power Plant Operations Technology and Educational

Center.

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. Advanced transmission technologies.

Sec. 1224. Advanced Power System Technology Incentive Program.

Subtitle C--Transmission Operation Improvements

Sec. 1231. Open nondiscriminatory access.

Sec. 1232. Federal utility participation in Transmission Organizations.

Sec. 1233. Native load service obligation.

Sec. 1234. Study on the benefits of economic dispatch.

Sec. 1235. Protection of transmission contracts in the Pacific

Northwest.

Sec. 1236. Sense of Congress regarding locational installed capacity

mechanism.

Subtitle D--Transmission Rate Reform

Sec. 1241. Transmission infrastructure investment.

Sec. 1242. Funding new interconnection and transmission upgrades.

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.

Sec. 1254. Interconnection.

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. Electricity market transparency.

Sec. 1282. False statements.

[[Page 119 STAT. 602]]

Sec. 1283. Market manipulation.

Sec. 1284. Enforcement.

Sec. 1285. Refund effective date.

Sec. 1286. Refund authority.

Sec. 1287. Consumer privacy and unfair trade practices.

Sec. 1288. Authority of court to prohibit individuals from serving as

officers, directors, and energy traders.

Sec. 1289. Merger review reform.

Sec. 1290. Relief for extraordinary violations.

Subtitle H--Definitions

Sec. 1291. Definitions.

Subtitle I--Technical and Conforming Amendments

Sec. 1295. Conforming amendments.

Subtitle J--Economic Dispatch

Sec. 1298. Economic dispatch.

TITLE XIII--ENERGY POLICY TAX INCENTIVES

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

Subtitle A--Electricity Infrastructure

Sec. 1301. Extension and modification of renewable electricity

production credit.

Sec. 1302. Application of section 45 credit to agricultural

cooperatives.

Sec. 1303. Clean renewable energy bonds.

Sec. 1304. Treatment of income of certain electric cooperatives.

Sec. 1305. Dispositions of transmission property to implement FERC

restructuring policy.

Sec. 1306. Credit for production from advanced nuclear power facilities.

Sec. 1307. Credit for investment in clean coal facilities.

Sec. 1308. Electric transmission property treated as 15-year property.

Sec. 1309. Expansion of amortization for certain atmospheric pollution

control facilities in connection with plants first placed in

service after 1975.

Sec. 1310. Modifications to special rules for nuclear decommissioning

costs.

Sec. 1311. Five-year net operating loss carryover for certain losses.

Subtitle B--Domestic Fossil Fuel Security

Sec. 1321. Extension of credit for producing fuel from a nonconventional

source for facilities producing coke or coke gas.

Sec. 1322. Modification of credit for producing fuel from a

nonconventional source.

Sec. 1323. Temporary expensing for equipment used in refining of liquid

fuels.

Sec. 1324. Pass through to owners of deduction for capital costs

incurred by small refiner cooperatives in complying with

Environmental Protection Agency sulfur regulations.

Sec. 1325. Natural gas distribution lines treated as 15-year property.

Sec. 1326. Natural gas gathering lines treated as 7-year property.

Sec. 1327. Arbitrage rules not to apply to prepayments for natural gas.

Sec. 1328. Determination of small refiner exception to oil depletion

deduction.

Sec. 1329. Amortization of geological and geophysical expenditures.

Subtitle C--Conservation and Energy Efficiency Provisions

Sec. 1331. Energy efficient commercial buildings deduction.

Sec. 1332. Credit for construction of new energy efficient homes.

Sec. 1333. Credit for certain nonbusiness energy property.

Sec. 1334. Credit for energy efficient appliances.

Sec. 1335. Credit for residential energy efficient property.

Sec. 1336. Credit for business installation of qualified fuel cells and

stationary microturbine power plants.

Sec. 1337. Business solar investment tax credit.

Subtitle D--Alternative Motor Vehicles and Fuels Incentives

Sec. 1341. Alternative motor vehicle credit.

Sec. 1342. Credit for installation of alternative fueling stations.

Sec. 1343. Reduced motor fuel excise tax on certain mixtures of diesel

fuel.

Sec. 1344. Extension of excise tax provisions and income tax credit for

biodiesel.

Sec. 1345. Small agri-biodiesel producer credit.

Sec. 1346. Renewable diesel.

Sec. 1347. Modification of small ethanol producer credit.

Sec. 1348. Sunset of deduction for clean-fuel vehicles and certain

refueling property.

[[Page 119 STAT. 603]]

Subtitle E--Additional Energy Tax Incentives

Sec. 1351. Expansion of research credit.

Sec. 1352. National Academy of Sciences study and report.

Sec. 1353. Recycling study.

Subtitle F--Revenue Raising Provisions

Sec. 1361. Oil Spill Liability Trust Fund financing rate.

Sec. 1362. Extension of Leaking Underground Storage Tank Trust Fund

financing rate.

Sec. 1363. Modification of recapture rules for amortizable section 197

intangibles.

Sec. 1364. Clarification of tire excise tax.

TITLE XIV--MISCELLANEOUS

Subtitle A--In General

Sec. 1401. Sense of Congress on risk assessments.

Sec. 1402. Energy production incentives.

Sec. 1403. Regulation of certain oil used in transformers.

Sec. 1404. Petrochemical and oil refinery facility health assessment.

Sec. 1405. National Priority Project Designation.

Sec. 1406. Cold cracking.

Sec. 1407. Oxygen-fuel.

Subtitle B--Set America Free

Sec. 1421. Short title.

Sec. 1422. Purpose.

Sec. 1423. United States Commission on North American Energy Freedom.

Sec. 1424. North American energy freedom policy.

TITLE XV--ETHANOL AND MOTOR FUELS

Subtitle A--General Provisions

Sec. 1501. Renewable content of gasoline.

Sec. 1502. Findings.

Sec. 1503. Claims filed after enactment.

Sec. 1504. Elimination of oxygen content requirement for reformulated

gasoline.

Sec. 1505. Public health and environmental impacts of fuels and fuel

additives.

Sec. 1506. Analyses of motor vehicle fuel changes.

Sec. 1507. Additional opt-in areas under reformulated gasoline program.

Sec. 1508. Data collection.

Sec. 1509. Fuel system requirements harmonization study.

Sec. 1510. Commercial byproducts from municipal solid waste and

cellulosic biomass loan guarantee program.

Sec. 1511. Renewable fuel.

Sec. 1512. Conversion assistance for cellulosic biomass, waste-derived

ethanol, approved renewable fuels.

Sec. 1513. Blending of compliant reformulated gasolines.

Sec. 1514. Advanced biofuel technologies program.

Sec. 1515. Waste-derived ethanol and biodiesel.

Sec. 1516. Sugar ethanol loan guarantee program.

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. Additional measures to protect groundwater.

Sec. 1531. Authorization of appropriations.

Sec. 1532. Conforming amendments.

Sec. 1533. Technical amendments.

Subtitle C--Boutique Fuels

Sec. 1541. Reducing the proliferation of boutique fuels.

TITLE XVI--CLIMATE CHANGE

Subtitle A--National Climate Change Technology Deployment

Sec. 1601. Greenhouse gas intensity reducing technology strategies.

[[Page 119 STAT. 604]]

Subtitle B--Climate Change Technology Deployment in Developing Countries

Sec. 1611. Climate change technology deployment in developing countries.

TITLE XVII--INCENTIVES FOR INNOVATIVE TECHNOLOGIES

Sec. 1701. Definitions.

Sec. 1702. Terms and conditions.

Sec. 1703. Eligible projects.

Sec. 1704. Authorization of appropriations.

TITLE XVIII--STUDIES

Sec. 1801. Study on inventory of petroleum and natural gas storage.

Sec. 1802. Study of energy efficiency standards.

Sec. 1803. Telecommuting study.

Sec. 1804. LIHEAP Report.

Sec. 1805. Oil bypass filtration technology.

Sec. 1806. Total integrated thermal systems.

Sec. 1807. Report on energy integration with Latin America.

Sec. 1808. Low-volume gas reservoir study.

Sec. 1809. Investigation of gasoline prices.

Sec. 1810. Alaska natural gas pipeline.

Sec. 1811. Coal bed methane study.

Sec. 1812. Backup fuel capability study.

Sec. 1813. Indian land rights-of-way.

Sec. 1814. Mobility of scientific and technical personnel.

Sec. 1815. Interagency review of competition in the wholesale and retail

markets for electric energy.

Sec. 1816. Study of rapid electrical grid restoration.

Sec. 1817. Study of distributed generation.

Sec. 1818. Natural gas supply shortage report.

Sec. 1819. Hydrogen participation study.

Sec. 1820. Overall employment in a hydrogen economy.

Sec. 1821. Study of best management practices for energy research and

development programs.

Sec. 1822. Effect of electrical contaminants on reliability of energy

production systems.

Sec. 1823. Alternative fuels reports.

Sec. 1824. Final action on refunds for excessive charges.

Sec. 1825. Fuel cell and hydrogen technology study.

Sec. 1826. Passive solar technologies.

Sec. 1827. Study of link between energy security and increases in

vehicle miles traveled.

Sec. 1828. Science study on cumulative impacts of multiple offshore

liquefied natural gas facilities.

Sec. 1829. Energy and water saving measures in congressional buildings.

Sec. 1830. Study of availability of skilled workers.

Sec. 1831. Review of Energy Policy Act of 1992 programs.

Sec. 1832. Study on the benefits of economic dispatch.

Sec. 1833. Renewable energy on Federal land.

Sec. 1834. Increased hydroelectric generation at existing Federal

facilities.

Sec. 1835. Split-estate Federal oil and gas leasing and development

practices.

Sec. 1836. Resolution of Federal resource development conflicts in the

Powder River Basin.

Sec. 1837. National security review of international energy

requirements.

Sec. 1838. Used oil re-refining study.

Sec. 1839. Transmission system monitoring.

Sec. 1840. Report identifying and describing the status of potential

hydropower facilities.

SEC. 2. <<NOTE: 42 USC 15801.>> DEFINITIONS.

Except as otherwise provided, in this Act:

(1) Department.--The term ``Department'' means the

Department of Energy.

(2) Institution of higher education.--

(A) In general.--The term ``institution of higher

education'' has the meaning given the term in section

101(a) of the Higher Education Act of 1065 (20 U.S.C.

1001(a)).

(B) Inclusion.--The term ``institution of higher

education'' includes an organization that--

[[Page 119 STAT. 605]]

(i) is organized, and at all times thereafter

operated, exclusively for the benefit of, to

perform the functions of, or to carry out the

functions of one or more organizations referred to

in subparagraph (A); and

(ii) is operated, supervised, or controlled by

or in connection with one or more of those

organizations.

(3) 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 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) Savannah River National Laboratory.

(P) Stanford Linear Accelerator Center.

(Q) Thomas Jefferson National Accelerator Facility.

(4) Secretary.--The term ``Secretary'' means the Secretary

of Energy.

(5) Small business concern.--The term ``small business

concern'' has the meaning given the term in section 3 of the

Small Business Act (15 U.S.C. 632).

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. <<NOTE: 42 USC 8259a.>> 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) <<NOTE: Deadline.>> 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--

[[Page 119 STAT. 606]]

``(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.

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 2006 through 2015 is

reduced, as compared with the energy consumption per gross

square foot of the Federal buildings of the agency in fiscal

year 2003, by the percentage specified in the following table:

``Fiscal Year           Percentage reduction......................

2006........................................     2

2007........................................     4

2008........................................     6

2009........................................     8

2010........................................    10

2011........................................    12

2012........................................    14

2013........................................    16

2014........................................    18

2015........................................  20.''.

(2) Reporting baseline.--The <<NOTE: 42 USC 8253

note.>> energy reduction goals and baseline established in

paragraph (1) of section 543(a) of the

[[Page 119 STAT. 607]]

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) <<NOTE: Deadline.>> Not later than December 31, 2014, 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 2016 through 2025.''.

(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) <<NOTE: Deadline. Guidelines.>> 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

[[Page 119 STAT. 608]]

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. Such projects shall be subject to the requirements

of section 3307 of title 40, United States Code.''.

(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, 2012, 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. 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 managers.

``(2) Guidelines.--

``(A) In general.--Not <<NOTE: Deadline.>> 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 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 the

reduced cost of operation and

maintenance expected to result from

metering;

``(II) the extent to which metering

is expected to result in increased

potential for energy management,

increased potential for energy savings

and energy efficiency improvement, and

cost and

[[Page 119 STAT. 609]]

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 based on

cost-effectiveness and a schedule of one or more

dates, not later than 1 year after the date of

issuance of the guidelines, on which the

requirements specified in paragraph (1) shall take

effect; and

``(iv) establish exclusions from the

requirements specified in paragraph (1) based on

the de minimis quantity of energy use of a Federal

building, industrial process, or structure.

``(3) Plan.--Not <<NOTE: Deadline.>> 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. <<NOTE: 42 USC 8259b.>> FEDERAL PROCUREMENT OF ENERGY

EFFICIENT PRODUCTS.

``(a) Definitions.--In this section:

``(1) Agency.--The term `agency' has the meaning given that

term in section 7902(a) of title 5, United States Code.

``(2) Energy star product.--The term `Energy Star product'

means a product that is rated for energy efficiency under an

Energy Star program.

``(3) Energy star program.--The term `Energy Star program'

means the program established by section 324A of the Energy

Policy and Conservation Act.

``(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.

``(5) Product.--The term `product' does not include any

energy consuming product or system designed or procured for

combat or combat-related missions.

``(b) Procurement of Energy Efficient Products.--

``(1) Requirement.--To meet the requirements of an agency

for an energy consuming product, the head of the agency shall,

except as provided in paragraph (2), procure--

``(A) an Energy Star product; or

[[Page 119 STAT. 610]]

``(B) a FEMP designated product.

``(2) Exceptions.--The head of an agency is not required to

procure an Energy Star product or FEMP designated product under

paragraph (1) if the head of the 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 agency.

``(3) Procurement planning.--The head of an 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 <<NOTE: Standards.>> the case of

electric motors of 1 to 500 horsepower, agencies shall select only

premium efficient motors that meet a standard designated by

the <<NOTE: Deadline.>> 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

[[Page 119 STAT. 611]]

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 <<NOTE: Federal Register, publication.>> 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) Extension.--Section 801(c) of the National Energy Conservation

Policy Act (42 U.S.C. 8287(c)) is amended by striking ``2006'' and

inserting ``2016''.

(b) Extension of Authority.--Any <<NOTE: 42 USC 8257 note.>> 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

considered to have been entered into under that section.

SEC. 106. <<NOTE: 42 USC 15811.>> VOLUNTARY COMMITMENTS TO REDUCE

INDUSTRIAL ENERGY INTENSITY.

(a) Definition of Energy Intensity.--In this section, the term

``energy intensity'' means the primary energy consumed for each unit of

physical output in an industrial process.

(b) Voluntary Agreements.--The Secretary may enter into voluntary

agreements with one or more persons in industrial sectors that consume

significant quantities of primary energy for each unit of physical

output to reduce the energy intensity of the production activities of

the persons.

(c) Goal.--Voluntary agreements under this section shall have as a

goal the reduction of energy intensity by not less than 2.5 percent each

year during the period of calendar years 2007 through 2016.

(d) Recognition.--The Secretary, in cooperation with other

appropriate Federal agencies, shall develop mechanisms to recognize and

publicize the achievements of participants in voluntary agreements under

this section.

(e) Technical Assistance.--A person that enters into an agreement

under this section and continues to make a good faith effort to achieve

the energy efficiency goals specified in the agreement shall be eligible

to receive from the Secretary a grant or technical assistance, as

appropriate, to assist in the achievement of those goals.

(f) Report.--Not later than each of June 30, 2012, and June 30,

2017, the Secretary shall submit to Congress a report that--

(1) evaluates the success of the voluntary agreements under

this section; and

(2) provides independent verification of a sample of the

energy savings estimates provided by participating firms.

[[Page 119 STAT. 612]]

SEC. 107. <<NOTE: 42 USC 15812.>> ADVANCED BUILDING EFFICIENCY TESTBED.

(a) Establishment.--The Secretary, 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 to carry out this section $6,000,000 for

each of the fiscal years 2006 through 2008, to remain available until

expended. For any fiscal year in which funds are expended under this

section, the Secretary shall provide one-third of the total amount to

the lead university described in subsection (b), and provide the

remaining two-thirds to the other participants referred to in subsection

(b) on an equal basis.

SEC. 108. 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:

``increased <<NOTE: 42 usc 6966.>> 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 any 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.

[[Page 119 STAT. 613]]

``(3) Recovered mineral component.--The term `recovered

mineral component' means--

``(A) ground granulated blast furnace slag,

excluding lead 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 <<NOTE: Deadline.>> 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) Federal procurement requirements.--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

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--

``(i) the extent to which recovered mineral

components are being substituted for Portland

cement, particularly as a result of procurement

requirements; and

``(ii) the energy savings and environmental

benefits associated with the substitution;

``(B) identify all barriers in procurement

requirements to greater realization of energy savings

and environmental benefits, including barriers resulting

from exceptions from the 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

[[Page 119 STAT. 614]]

``(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 <<NOTE: Deadline.>> 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 date on which the report under

subsection (c)(3) is submitted, take additional actions 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--

``(1) to realize more fully the energy savings and

environmental benefits associated with increased substitution;

and

``(2) to eliminate barriers identified under subsection

(c)(2)(B).

``(e) Effect of Section.--Nothing in this section affects the

requirements of section 6002 (including the guidelines and

specifications for implementing those requirements).''.

(b) Conforming Amendment.--The table of contents of the Solid Waste

Disposal Act is amended by adding after the item relating to section

6004 the following:

``Sec. 6005. Increased use of recovered mineral component in federally

funded projects involving procurement of cement or

concrete.''.

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 (in the case of residential buildings) or ASHRAE

Standard 90.1-1989'' and inserting ``the 2004 International

Energy Conservation Code (in the case of residential buildings)

or ASHRAE Standard 90.1-2004''; and

(2) by adding at the end the following:

``(3)(A) <<NOTE: Deadline. Regulations.>> Not later than 1 year

after the date of enactment of this paragraph, the Secretary 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) the buildings be designed to achieve energy

consumption levels that are at least 30 percent below

the levels established in the version of the ASHRAE

Standard or the International Energy Conservation Code,

as appropriate, that is in effect as of the date of

enactment of this paragraph; and

``(II) sustainable design principles are applied to

the siting, design, and construction of all new and

replacement buildings; and

``(ii) if water is used to achieve energy efficiency, water

conservation technologies shall be applied to the extent that

the technologies are life-cycle cost-effective.

[[Page 119 STAT. 615]]

``(B) <<NOTE: Deadline.>> 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

shall determine, based on the cost-effectiveness of the requirements

under the amendment, whether the revised standards established under

this paragraph should be updated to reflect the amendment.

``(C) 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 specifying whether the Federal buildings

meet or exceed the revised standards established under this

paragraph.''.

SEC. 110. DAYLIGHT SAVINGS.

(a) Amendment.--Section 3(a) of the Uniform Time Act of 1966 (15

U.S.C. 260a(a)) is amended--

(1) by striking ``first Sunday of April'' and inserting

``second Sunday of March''; and

(2) by striking ``last Sunday of October'' and inserting

``first Sunday of November''.

(b) Effective Date.--Subsection (a) <<NOTE: 15 USC 260a

note.>> shall take effect 1 year after the date of enactment of this Act

or March 1, 2007, whichever is later.

(c) Report to Congress.--Not <<NOTE: 15 USC 260a note.>> later than

9 months after the effective date stated in subsection (b), the

Secretary shall report to Congress on the impact of this section on

energy consumption in the United States.

(d) Right to Revert.--Congress retains the right to revert the

Daylight Saving Time back to the 2005 time schedules once the Department

study is complete.

SEC. 111. <<NOTE: 42 USC 15813.>> ENHANCING ENERGY EFFICIENCY IN

MANAGEMENT OF FEDERAL LANDS.

(a) Sense of the Congress.--It is the sense of the Congress that

Federal agencies should enhance the use of energy efficient technologies

in the management of natural resources.

(b) Energy Efficient Buildings.--To the extent practicable, the

Secretary of the Interior, the Secretary of Commerce, and the Secretary

of Agriculture shall seek to incorporate energy efficient technologies

in public and administrative buildings associated with management of the

National Park System, National Wildlife Refuge System, National Forest

System, National Marine Sanctuaries System, and other public lands and

resources managed by the Secretaries.

(c) Energy Efficient Vehicles.--To the extent practicable, the

Secretary of the Interior, the Secretary of Commerce, and the Secretary

of Agriculture shall seek to use energy efficient motor vehicles,

including vehicles equipped with biodiesel or hybrid engine

technologies, in the management of the National Park System, National

Wildlife Refuge System, National Forest System, National Marine

Sanctuaries System, and other public lands and resources managed by the

Secretaries.

[[Page 119 STAT. 616]]

Subtitle B--Energy Assistance and State Programs

SEC. 121. LOW-INCOME HOME ENERGY ASSISTANCE PROGRAM.

(a) Authorization of Appropriations.--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 ``and $5,100,000,000 for each of fiscal years 2005

through 2007''.

(b) Renewable Fuels.--The Low-Income Home Energy Assistance Act of

1981 (42 U.S.C. 8621 et seq.) is amended by adding at the end the

following new section:

``renewable fuels

``Sec. 2612. <<NOTE: 42 USC 8630.>> In providing assistance pursuant

to this title, a State, or any other person with which the State makes

arrangements to carry out the purposes of this title, may purchase

renewable fuels, including biomass.''.

(c) Report to Congress.--The <<NOTE: 42 USC 8630 note.>> Secretary

shall report to Congress on the use of renewable fuels in providing

assistance under the Low-Income Home Energy Assistance Act of 1981 (42

U.S.C. 8621 et seq.).

SEC. 122. WEATHERIZATION ASSISTANCE.

(a) Authorization of Appropriations.--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 ``$500,000,000 for fiscal year 2006, $600,000,000 for fiscal

year 2007, and $700,000,000 for fiscal year 2008''.

(b) Eligibility.--Section 412(7) of the Energy Conservation and

Production Act (42 U.S.C. 6862(7)) is amended by striking ``125

percent'' both places it appears and inserting ``150 percent''.

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 2005 shall contain a goal,

consisting of an improvement of 25 percent or more in the efficiency of

use of energy in the State concerned

[[Page 119 STAT. 617]]

in calendar year 2012 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 2006 and 2007 and

$125,000,000 for fiscal year 2008''.

SEC. 124. <<NOTE: 42 USC 15821.>> ENERGY EFFICIENT APPLIANCE REBATE

PROGRAMS.

(a) Definitions.--In this section:

(1) Eligible state.--The term ``eligible State'' means a

State that meets the requirements of subsection (b).

(2) Energy star program.--The term ``Energy Star program''

means the program established by section 324A of the Energy

Policy and Conservation Act.

(3) Residential energy star product.--The term ``residential

Energy Star product'' means a product for a residence that is

rated for energy efficiency under the Energy Star program.

(4) State energy office.--The term ``State energy office''

means the State agency responsible for developing State energy

conservation plans under section 362 of the Energy Policy and

Conservation Act (42 U.S.C. 6322).

(5) State program.--The term ``State program'' means a State

energy efficient appliance rebate program described in

subsection (b)(1).

(b) Eligible States.--A State shall be eligible to receive an

allocation under subsection (c) if the State--

(1) establishes (or has established) a State energy

efficient appliance rebate program to provide rebates to

residential consumers for the purchase of residential Energy

Star products to replace used appliances of the same type;

(2) submits an application for the allocation at such time,

in such form, and containing such information as the Secretary

may require; and

(3) provides assurances satisfactory to the Secretary that

the State will use the allocation to supplement, but not

supplant, funds made available to carry out the State program.

(c) Amount of Allocations.--

(1) In general.--Subject to paragraph (2), for each fiscal

year, the Secretary shall allocate to the State energy office of

each eligible State to carry out subsection (d) an amount equal

to the product obtained by multiplying the amount made available

under subsection (f) for the fiscal year by the ratio that the

population of the State in the most recent calendar year for

which data are available bears to the total population of all

eligible States in that calendar year.

(2) Minimum allocations.--For each fiscal year, the amounts

allocated under this subsection shall be adjusted

proportionately so that no eligible State is allocated a sum

that is less than an amount determined by the Secretary.

(d) Use of Allocated Funds.--The allocation to a State energy office

under subsection (c) may be used to pay up to 50 percent of the cost of

establishing and carrying out a State program.

(e) Issuance of Rebates.--Rebates may be provided to residential

consumers that meet the requirements of the State program.

[[Page 119 STAT. 618]]

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 2006 through 2010.

SEC. 125. <<NOTE: 42 USC 15822.>> ENERGY EFFICIENT PUBLIC BUILDINGS.

(a) Grants.--The Secretary 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) <<NOTE: Records.>> 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

$30,000,000 for each of fiscal years 2006 through 2010. Not more than 10

percent of appropriated funds shall be used for administration.

SEC. 126. <<NOTE: 42 USC 15823.>> LOW INCOME COMMUNITY ENERGY EFFICIENCY

PILOT PROGRAM.

(a) Grants.--The Secretary 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.

[[Page 119 STAT. 619]]

(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

$20,000,000 for each of fiscal years 2006 through 2008.

SEC. 127. <<NOTE: 42 USC 15824.>> STATE TECHNOLOGIES ADVANCEMENT

COLLABORATIVE.

(a) In General.--The Secretary, in cooperation with the States,

shall establish a cooperative program for research, development,

demonstration, and deployment of technologies in which there is a common

Federal and State energy efficiency, renewable energy, and fossil energy

interest, to be known as the ``State Technologies Advancement

Collaborative'' (referred to in this section as the ``Collaborative'').

(b) Duties.--The Collaborative shall--

(1) leverage Federal and State funding through cost-shared

activity;

(2) reduce redundancies in Federal and State funding; and

(3) create multistate projects to be awarded through a

competitive process.

(c) Administration.--The Collaborative shall be administered through

an agreement between the Department and appropriate State-based

organizations.

(d) Funding Sources.--Funding for the Collaborative may be provided

from--

(1) amounts specifically appropriated for the Collaborative;

or

(2) amounts that may be allocated from other appropriations

without changing the purpose for which the amounts are

appropriated.

(e) Authorization of Appropriations.--There are authorized to carry

out this section such sums as are necessary for each of fiscal years

2006 through 2010.

SEC. 128. STATE BUILDING ENERGY EFFICIENCY CODES INCENTIVES.

Section 304(e) of the Energy Conservation and Production Act (42

U.S.C. 6833(e)) is amended--

[[Page 119 STAT. 620]]

(1) in paragraph (1), by inserting before the period at the

end of the first sentence the following: ``, including

increasing and verifying compliance with such codes''; and

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

``(2) Additional funding shall be provided under this subsection for

implementation of a plan to achieve and document at least a 90 percent

rate of compliance with residential and commercial building energy

efficiency codes, based on energy performance--

``(A) to a State that has adopted and is implementing, on a

statewide basis--

``(i) a residential building energy efficiency code

that meets or exceeds the requirements of the 2004

International Energy Conservation Code, or any

succeeding version of that code that has received an

affirmative determination from the Secretary under

subsection (a)(5)(A); and

``(ii) a commercial building energy efficiency code

that meets or exceeds the requirements of the ASHRAE

Standard 90.1-2004, or any succeeding version of that

standard that has received an affirmative determination

from the Secretary under subsection (b)(2)(A); or

``(B) in a State in which there is no statewide energy code

either for residential buildings or for commercial buildings, to

a local government that has adopted and is implementing

residential and commercial building energy efficiency codes, as

described in subparagraph (A).

``(3) Of the amounts made available under this subsection, the

Secretary may use $500,000 for each fiscal year to train State and local

officials to implement codes described in paragraph (2).

``(4)(A) <<NOTE: Appropriation authorization.>> There are authorized

to be appropriated to carry out this subsection--

``(i) $25,000,000 for each of fiscal years 2006 through

2010; and

``(ii) such sums as are necessary for fiscal year 2011 and

each fiscal year thereafter.

``(B) Funding provided to States under paragraph (2) for each fiscal

year shall not exceed one-half of the excess of funding under this

subsection over $5,000,000 for the fiscal year.''.

Subtitle C--Energy Efficient Products

SEC. 131. ENERGY STAR PROGRAM.

(a) In General.--The Energy Policy and Conservation Act is amended

by inserting after section 324 (42 U.S.C. 6294) the following:

``energy star program

``Sec. 324A. (a) In General.--There is <<NOTE: 42 USC

6294a.>> established within 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 conservation

standards.

``(b) Division of Responsibilities.--Responsibilities under the

program shall be divided between the Department of Energy and

[[Page 119 STAT. 621]]

the Environmental Protection Agency in accordance with the terms of

applicable agreements between those agencies.

``(c) Duties.--The Administrator and the Secretary shall--

``(1) promote Energy Star compliant technologies as the

preferred technologies in the marketplace for--

``(A) achieving energy efficiency; and

``(B) reducing pollution;

``(2) work to enhance public awareness of the Energy Star

label, including by providing special outreach to small

businesses;

``(3) preserve the integrity of the Energy Star label;

``(4) regularly update Energy Star product criteria for

product categories;

``(5) solicit comments from interested parties prior to

establishing or revising an Energy Star product category,

specification, or criterion (or prior to effective dates for any

such product category, specification, or criterion);

``(6) on 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--

``(A) an explanation of the changes; and

``(B) as appropriate, responses to comments

submitted by interested parties; and

``(7) provide appropriate lead time (which shall be 270

days, unless the Agency or Department specifies otherwise) prior

to the applicable 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.

``(d) Deadlines.--The Secretary shall establish new qualifying

levels--

``(1) not later than January 1, 2006, for clothes washers

and dishwashers, effective beginning January 1, 2007; and

``(2) not later than January 1, 2008, for clothes washers,

effective beginning January 1, 2010.''.

(b) Table of Contents Amendment.--The table of contents of the

Energy Policy and Conservation Act (42 U.S.C. prec. 6201) is amended by

inserting after the item relating to section 324 the following:

``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.--(1) <<NOTE: Deadline.>> To ensure that

installed air conditioning and heating systems operate at 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 from

properly conducted maintenance of air conditioning, heating, and

ventilating systems.

``(2) The Secretary shall carry out the program under paragraph (1),

on a cost-shared basis, in cooperation with the Administrator of the

Environmental Protection Agency and any other entities that the

Secretary determines to be appropriate, including industry

[[Page 119 STAT. 622]]

trade associations, industry members, and energy efficiency

organizations.

``(d) Small Business Education and Assistance.--(1) The

Administrator of the Small Business Administration, in consultation with

the Secretary and the Administrator of the Environmental Protection

Agency, shall develop and coordinate a Government-wide program, building

on the Energy Star for Small Business Program, to assist small

businesses in--

``(A) becoming more energy efficient;

``(B) understanding the cost savings from improved energy

efficiency;

``(C) understanding and accessing Federal procurement

opportunities with regard to Energy Star technologies and

products; and

``(D) identifying financing options for energy efficiency

upgrades.

``(2) The Secretary, the Administrator of the Environmental

Protection Agency, and the Administrator of the Small Business

Administration shall--

``(A) make program information available to small business

concerns directly through the district offices and resource

partners of the Small Business Administration, including small

business development centers, women's business centers, and the

Service Corps of Retired Executives (SCORE), and through other

Federal agencies, including the Federal Emergency Management

Agency and the Department of Agriculture; and

``(B) coordinate assistance with the Secretary of Commerce

for manufacturing-related efforts, including the Manufacturing

Extension Partnership Program.

``(3) The Secretary, on a cost shared basis in cooperation with the

Administrator of the Environmental Protection Agency, shall provide to

the Small Business Administration all advertising, marketing, and other

written materials necessary for the dissemination of information under

paragraph (2).

``(4) The Secretary, the Administrator of the Environmental

Protection Agency, and the Administrator of the Small Business

Administration, as part of the outreach to small business concerns under

the Energy Star Program for Small Business Program, may enter into

cooperative agreements with qualified resources partners (including the

National Center for Appropriate Technology) to establish, maintain, and

promote a Small Business Energy Clearinghouse (in this subsection

referred to as the `Clearinghouse').

``(5) The Secretary, the Administrator of the Environmental

Protection Agency, and the Administrator of the Small Business

Administration shall ensure that the Clearinghouse provides a

centralized resource where small business concerns may access,

telephonically and electronically, technical information and advice to

help increase energy efficiency and reduce energy costs.

``(6) <<NOTE: Appropriation authorization.>> There are authorized to

be appropriated such sums as are necessary to carry out this subsection,

to remain available until expended.''.

SEC. 133. <<NOTE: 42 USC 15831.>> PUBLIC ENERGY EDUCATION PROGRAM.

(a) In General.--Not <<NOTE: Deadline.>> later than 180 days after

the date of enactment of this Act, the Secretary shall convene an

organizational conference for the purpose of establishing an ongoing,

self-sustaining national public energy education program.

[[Page 119 STAT. 623]]

(b) Participants.--The Secretary shall invite to participate in the

conference individuals and entities representing all aspects of energy

production and distribution, including--

(1) industrial firms;

(2) professional societies;

(3) educational organizations;

(4) trade associations; and

(5) governmental agencies.

(c) Purpose, Scope, and Structure.--

(1) Purpose.--The purpose of the conference shall be to

establish an ongoing, self-sustaining national public energy

education program to examine and recognize interrelationships

between energy sources in all forms, including--

(A) conservation and energy efficiency;

(B) the role of energy use in the economy; and

(C) the impact of energy use on the environment.

(2) Scope and structure.--Taking into consideration the

purpose described in paragraph (1), the participants in the

conference invited under subsection (b) shall design the scope

and structure of the program described in subsection (a).

(d) Technical Assistance.--The Secretary shall provide technical

assistance and other guidance necessary to carry out the program

described in subsection (a).

(e) Authorization of Appropriations.--There are authorized to be

appropriated such sums as are necessary to carry out this section.

SEC. 134. <<NOTE: 42 USC 15832.>> ENERGY EFFICIENCY PUBLIC INFORMATION

INITIATIVE.

(a) In General.--The Secretary shall carry out a comprehensive

national program, including advertising and media awareness, to inform

consumers about--

(1) the need to reduce energy consumption during the 4-year

period beginning on the date of enactment of this Act;

(2) the benefits to consumers of reducing consumption of

electricity, natural gas, and petroleum, particularly during

peak use periods;

(3) the importance of low energy costs to economic growth

and preserving manufacturing jobs in the United States; and

(4) practical, cost-effective measures that consumers can

take to reduce consumption of electricity, natural gas, and

gasoline, including--

(A) maintaining and repairing heating and cooling

ducts and equipment;

(B) weatherizing homes and buildings;

(C) purchasing energy efficient products; and

(D) proper tire maintenance.

(b) Cooperation.--The program carried out under subsection (a)

shall--

(1) include collaborative efforts with State and local

government officials and the private sector; and

(2) incorporate, to the maximum extent practicable,

successful State and local public education programs.

(c) Report.--Not later than July 1, 2009, the Secretary shall submit

to Congress a report describing the effectiveness of the program under

this section.

(d) Termination of Authority.--The program carried out under this

section shall terminate on December 31, 2010.

[[Page 119 STAT. 624]]

(e) Authorization of Appropriations.--There are authorized to be

appropriated to carry out this section $90,000,000 for each of fiscal

years 2006 through 2010.

SEC. 135. 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 (29)--

(A) in subparagraph (D)--

(i) in clause (i), by striking ``C78.1-

1978(R1984)'' and inserting ``C78.81-2003 (Data

Sheet 7881-ANSI-1010-1)'';

(ii) in clause (ii), by striking ``C78.1-

1978(R1984)'' and inserting ``C78.81-2003 (Data

Sheet 7881-ANSI-3007-1)''; and

(iii) in clause (iii), by striking ``C78.1-

1978(R1984)'' and inserting ``C78.81-2003 (Data

Sheet 7881-ANSI-1019-1)''; and

(B) by adding at the end the following:

``(M) The term `F34T12 lamp' (also known as a `F40T12/ES

lamp') means a nominal 34 watt tubular fluorescent lamp that is

48 inches in length and 1\1/2\ inches in diameter, and conforms

to ANSI standard C78.81-2003 (Data Sheet 7881-ANSI-1006-1).

``(N) The term `F96T12/ES lamp' means a nominal 60 watt

tubular fluorescent lamp that is 96 inches in length and 1\1/2\

inches in diameter, and conforms to ANSI standard C78.81-2003

(Data Sheet 7881-ANSI-3006-1).

``(O) The term `F96T12HO/ES lamp' means a nominal 95 watt

tubular fluorescent lamp that is 96 inches in length and 1\1/2\

inches in diameter, and conforms to ANSI standard C78.81-2003

(Data Sheet 7881-ANSI-1017-1).

``(P) The term `replacement ballast' means a ballast that--

``(i) is designed for use to replace an existing

ballast in a previously installed luminaire;

``(ii) is marked `FOR REPLACEMENT USE ONLY';

``(iii) is shipped by the manufacturer in packages

containing not more than 10 ballasts; and

``(iv) has output leads that when fully extended are

a total length that is less than the length of the lamp

with which the ballast is intended to be operated.'';

(2) in paragraph (30)(S)--

(A) by inserting ``(i)'' before ``The term''; and

(B) by adding at the end the following:

``(ii) The term `medium base compact fluorescent

lamp' does not include--

``(I) any lamp that is--

``(aa) specifically designed to be

used for special purpose applications;

and

``(bb) unlikely to be used in

general purpose applications, such as

the applications described in

subparagraph (D); or

``(II) any lamp not described in subparagraph

(D) that is excluded by the Secretary, by rule,

because the lamp is--

``(aa) designed for special

applications; and

[[Page 119 STAT. 625]]

``(bb) unlikely to be used in

general purpose applications.''; and

(3) by adding at the end the following:

``(32) The term `battery charger' means a device that

charges batteries for consumer products, including battery

chargers embedded in other consumer products.

``(33)(A) The term `commercial prerinse spray valve' means a

handheld device designed and marketed for use with commercial

dishwashing and ware washing equipment that sprays water on

dishes, flatware, and other food service items for the purpose

of removing food residue before cleaning the items.

``(B) The Secretary may modify the definition of `commercial

prerinse spray valve' by rule--

``(i) to include products--

``(I) that are extensively used in conjunction

with commercial dishwashing and ware washing

equipment;

``(II) the application of standards to which

would result in significant energy savings; and

``(III) the application of standards to which

would meet the criteria specified in section

325(o)(4); and

``(ii) to exclude products--

``(I) that are used for special food service

applications;

``(II) that are unlikely to be widely used in

conjunction with commercial dishwashing and ware

washing equipment; and

``(III) the application of standards to which

would not result in significant energy savings.

``(34) The term `dehumidifier' means a self-contained,

electrically operated, and mechanically encased assembly

consisting of--

``(A) a refrigerated surface (evaporator) that

condenses moisture from the atmosphere;

``(B) a refrigerating system, including an electric

motor;

``(C) an air-circulating fan; and

``(D) means for collecting or disposing of the

condensate.

``(35)(A) 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) a transformer with multiple voltage taps, the

highest of which equals at least 20 percent more than

the lowest;

``(ii) a transformer that is designed to be used in

a special purpose application and is unlikely to be used

in general purpose applications, such as a drive

transformer, rectifier transformer, auto-transformer,

Uninterruptible Power System transformer, impedance

transformer, regulating transformer, sealed and

nonventilating transformer, machine tool transformer,

welding transformer, grounding transformer, or testing

transformer; 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;

[[Page 119 STAT. 626]]

``(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.

``(36) The term `external power supply' means an external

power supply circuit that is used to convert household electric

current into DC current or lower-voltage AC current to operate a

consumer product.

``(37) 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--

``(i) illuminates the legend `EXIT' and any

directional indicators; and

``(ii) provides contrast between the legend,

any directional indicators, and the background.

``(38) 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.

``(39) The term `pedestrian module' means a light signal

used to convey movement information to pedestrians.

``(40) The term `refrigerated bottled or canned beverage

vending machine' means a commercial refrigerator that cools

bottled or canned beverages and dispenses the bottled or canned

beverages on payment.

``(41) The term `standby mode' means the lowest power

consumption mode, as established on an individual product basis

by the Secretary, that--

``(A) cannot be switched off or influenced by the

user; and

``(B) may persist for an indefinite time when an

appliance is--

``(i) connected to the main electricity

supply; and

``(ii) used in accordance with the

instructions of the manufacturer.

``(42) The term `torchiere' means a portable electric lamp

with a reflector bowl that directs light upward to give indirect

illumination.

``(43) The term `traffic signal module' means a standard 8-

inch (200mm) or 12-inch (300mm) traffic signal indication that--

``(A) consists of a light source, a lens, and all

other parts necessary for operation; and

``(B) communicates movement messages to drivers

through red, amber, and green colors.

``(44) 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.

``(45)(A) The term `unit heater' means a self-contained fan-

type heater designed to be installed within the heated space.

``(B) The term `unit heater' does not include a warm air

furnace.

[[Page 119 STAT. 627]]

``(46)(A) The term `high intensity discharge lamp' means an

electric-discharge lamp in which--

``(i) the light-producing arc is stabilized by bulb

wall temperature; and

``(ii) the arc tube has a bulb wall loading in

excess of 3 Watts/cm<SUP>2</SUP>.

``(B) The term `high intensity discharge lamp' includes

mercury vapor, metal halide, and high-pressure sodium lamps

described in subparagraph (A).

``(47)(A) The term `mercury vapor lamp' means a high

intensity discharge lamp in which the major portion of the light

is produced by radiation from mercury operating at a partial

pressure in excess of 100,000 Pa (approximately 1 atm).

``(B) The term `mercury vapor lamp' includes clear,

phosphor-coated, and self-ballasted lamps described in

subparagraph (A).

``(48) The term `mercury vapor lamp ballast' means a device

that is designed and marketed to start and operate mercury vapor

lamps by providing the necessary voltage and current.

``(49) The term `ceiling fan' means a nonportable device

that is suspended from a ceiling for circulating air via the

rotation of fan blades.

``(50) The term `ceiling fan light kit' means equipment

designed to provide light from a ceiling fan that can be--

``(A) integral, such that the equipment is attached

to the ceiling fan prior to the time of retail sale; or

``(B) attachable, such that at the time of retail

sale the equipment is not physically attached to the

ceiling fan, but may be included inside the ceiling fan

at the time of sale or sold separately for subsequent

attachment to the fan.

``(51) The term `medium screw base' means an Edison screw

base identified with the prefix E-26 in the `American National

Standard for Electric Lamp Bases', ANSI/IEC C81.61-2003,

published by the American National Standards Institute.''.

(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)(A) 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).

``(B) The Secretary may review and revise the test procedures

established under subparagraph (A).

``(C) For purposes of section 346(a), the test procedures

established under subparagraph (A) shall be considered to be the 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--

``(i) be technologically feasible and economically

justified; and

``(ii) result in significant energy savings.

[[Page 119 STAT. 628]]

``(11) Test procedures for traffic signal modules and pedestrian

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)(A) Test procedures for medium base compact fluorescent lamps

shall be based on the test methods for compact fluorescent lamps used

under the August 9, 2001, version of the Energy Star program of the

Environmental Protection Agency and the Department of Energy.

``(B) Except as provided in subparagraph (C), medium base compact

fluorescent lamps shall meet all test requirements for regulated

parameters of section 325(cc).

``(C) Notwithstanding subparagraph (B), if manufacturers document

engineering predictions and analysis that support expected attainment of

lumen maintenance at 40 percent rated life and lamp lifetime, medium

base compact fluorescent lamps may be marketed before completion of the

testing of lamp life and lumen maintenance at 40 percent of rated life.

``(13) Test procedures for dehumidifiers shall be based on the test

criteria used under the Energy Star Program Requirements for

Dehumidifiers developed by the Environmental Protection Agency, as in

effect on the date of enactment of this paragraph unless revised by the

Secretary pursuant to this section.

``(14) The test procedure for measuring flow rate for commercial

prerinse spray valves shall be based on American Society for Testing and

Materials Standard F2324, entitled `Standard Test Method for Pre-Rinse

Spray Valves'.

``(15) The test procedure for refrigerated bottled or canned

beverage vending machines shall be based on American National Standards

Institute/American Society of Heating, Refrigerating and Air-

Conditioning Engineers Standard 32.1-2004, entitled `Methods of Testing

for Rating Vending Machines for Bottled, Canned or Other Sealed

Beverages'.

``(16)(A)(i) Test procedures for ceiling fans shall be based on the

`Energy Star Testing Facility Guidance Manual: Building a Testing

Facility and Performing the Solid State Test Method for ENERGY STAR

Qualified Ceiling Fans, Version 1.1' published by the Environmental

Protection Agency.

``(ii) Test procedures for ceiling fan light kits shall be based on

the test procedures referenced in the Energy Star specifications for

Residential Light Fixtures and Compact Fluorescent Light Bulbs, as in

effect on the date of enactment of this paragraph.

``(B) The Secretary may review and revise the test procedures

established under subparagraph (A).''; and

(2) by adding at the end the following:

``(f) Additional <<NOTE: Deadline. Requirements.>> Consumer and

Commercial Products.--(1) Not later than 2 years after the date of

enactment of this subsection, the Secretary shall prescribe testing

requirements for refrigerated bottled or canned beverage vending

machines.

``(2) To the maximum extent practicable, the testing requirements

prescribed under paragraph (1) shall be based on existing test

procedures used in industry.''.

(c) Standard Setting Authority.--Section 325 of the Energy Policy

and Conservation Act (42 U.S.C. 6295) is amended--

(1) in subsection (f)(3), by adding at the end the

following:

[[Page 119 STAT. 629]]

``(D) Notwithstanding any other provision of this Act, if the

requirements of subsection (o) are met, the Secretary may consider and

prescribe energy conservation standards or energy use standards for

electricity used for purposes of circulating air through duct work.'';

(2) in subsection (g)--

(A) in paragraph (6)(B), by inserting ``and

labeled'' after ``designed''; and

(B) by adding at the end the following:

``(8)(A) Each fluorescent lamp ballast (other than replacement

ballasts or ballasts described in subparagraph (C))--

``(i)(I) manufactured on or after July 1, 2009;

``(II) sold by the manufacturer on or after October 1, 2009;

or

``(III) incorporated into a luminaire by a luminaire

manufacturer on or after July 1, 2010; and

``(ii) designed--

``(I) to operate at nominal input voltages of 120 or

277 volts;

``(II) to operate with an input current frequency of

60 Hertz; and

``(III) for use in connection with F34T12 lamps,

F96T12/ES lamps, or F96T12HO/ES lamps;

shall have a power factor of 0.90 or greater and shall have a

ballast efficacy factor of not less than the following:

...................  Total              .....................

``Applica  Ballast              nominal            Ballast

tion for  input                lamp               efficacy

operatio  voltage              watts              factor

n of

One        120/277              34                 2.61

F34T12

lamp

Two        120/277              68                 1.35

F34T12

lamps

Two        120/277              120                0.77

F96T12/

ES lamps

Two        120/277              190                0.42.

F96T12HO/

ES lamps

``(B) <<NOTE: Applicability.>> The standards described in

subparagraph (A) shall apply to all ballasts covered by subparagraph

(A)(ii) that are manufactured on or after July 1, 2010, or sold by the

manufacturer on or after October 1, 2010.

``(C) The standards described in subparagraph (A) do not apply to--

``(i) a ballast that is designed for dimming to 50 percent

or less of the maximum output of the ballast;

``(ii) a ballast that is designed for use with 2 F96T12HO

lamps at ambient temperatures of 20F or less and for use in an

outdoor sign; or

``(iii) a ballast that has a power factor of less than 0.90

and is designed and labeled for use only in residential

applications.'';

(3) in subsection (o), by adding at the end the following:

``(5) The Secretary may set more than 1 energy conservation standard

for products that serve more than 1 major function by setting 1 energy

conservation standard for each major function.''; and

(4) by adding at the end the following:

``(u) Battery <<NOTE: Deadline. Notice. Regulations.>> Charger and

External Power Supply Electric Energy Consumption.--(1)(A) Not later

than 18 months after the date of enactment of this subsection, the

Secretary shall, after providing notice and an opportunity for comment,

prescribe, by

[[Page 119 STAT. 630]]

rule, definitions and test procedures for the power use of battery

chargers and external power supplies.

``(B) In establishing the test procedures under subparagraph (A),

the Secretary shall--

``(i) consider existing definitions and test procedures used

for measuring energy consumption in standby mode and other

modes; and

``(ii) assess the current and projected future market for

battery chargers and external power supplies.

``(C) The assessment under subparagraph (B)(ii) shall include--

``(i) estimates of the significance of potential energy

savings from technical improvements to battery chargers and

external power supplies; and

``(ii) suggested product classes for energy conservation

standards.

``(D) <<NOTE: Deadline.>> Not later than 18 months after the date of

enactment of this subsection, the Secretary shall hold a scoping

workshop to discuss and receive comments on plans for developing energy

conservation standards for energy use for battery chargers and external

power supplies.

``(E)(i) <<NOTE: Deadline. Regultions.>> Not later than 3 years

after the date of enactment of this subsection, the Secretary shall

issue a final rule that determines whether energy conservation standards

shall be issued for battery chargers and external power supplies or

classes of battery chargers and external power supplies.

``(ii) For each product class, any energy conservation standards

issued under clause (i) 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) would result in significant overall annual energy

savings, considering standby mode and other operating modes.

``(2) In determining under section 323 whether test procedures and

energy conservation standards under this section should be revised with

respect to covered products that are major sources of standby mode

energy consumption, the Secretary shall consider whether to incorporate

standby mode into the test procedures and energy conservation standards,

taking into account standby mode power consumption compared to overall

product energy consumption.

``(3) The Secretary shall not propose an energy conservation

standard under this section, unless the Secretary has issued applicable

test procedures for each product under section 323.

``(4) <<NOTE: Applicability. Effective date.>> Any energy

conservation standard issued under this subsection shall be applicable

to products manufactured or imported beginning on the date that is 3

years after the date of issuance.

``(5) The Secretary and the Administrator shall collaborate and

develop programs (including programs under section 324A and other

voluntary industry agreements or codes of conduct) that are designed to

reduce standby mode energy use.

``(v) Ceiling <<NOTE: Deadline. Regulations.>> Fans and Refrigerated

Beverage Vending Machines.--(1) Not later than 1 year after the date of

enactment of this subsection, the Secretary shall prescribe, by rule,

test procedures and energy conservation standards for ceiling fans and

ceiling fan light kits. If the Secretary sets such standards, the

Secretary shall consider exempting or setting different standards for

certain product classes for which the primary standards are not

technically

[[Page 119 STAT. 631]]

feasible or economically justified, and establishing separate or

exempted product classes for highly decorative fans for which air

movement performance is a secondary design feature.

``(2) <<NOTE: Deadline. Regulations.>> Not later than 4 years after

the date of enactment of this subsection, the Secretary shall prescribe,

by rule, energy conservation standards for refrigerated bottle or canned

beverage vending machines.

``(3) In establishing energy conservation standards under this

subsection, the Secretary shall use the criteria and procedures

prescribed under subsections (o) and (p).

``(4) <<NOTE: Applicability.>> Any energy conservation standard

prescribed under this subsection shall apply to products manufactured 3

years after the date of publication of a final rule establishing the

energy conservation standard.

``(w) Illuminated Exit Signs.--An illuminated exit sign manufactured

on or after January 1, 2006, shall meet the version 2.0 Energy Star

Program performance requirements for illuminated exit signs prescribed

by the Environmental Protection Agency.

``(x) Torchieres.--A torchiere manufactured on or after January 1,

2006--

``(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 a low voltage dry-type distribution transformer

manufactured on or after January 1, 2007, 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 and Pedestrian Modules.--Any traffic

signal module or pedestrian module manufactured on or after January 1,

2006, shall--

``(1) 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

``(2) be installed with compatible, electrically connected

signal control interface devices and conflict monitoring

systems.

``(aa) Unit Heaters.--A unit heater manufactured on or after the

date that is 3 years after the date of enactment of this subsection

shall--

``(1) be equipped with an intermittent ignition device; and

``(2) have power venting or an automatic flue damper.

``(bb) Medium Base Compact Fluorescent Lamps.--(1) A bare lamp and

covered lamp (no reflector) medium base compact fluorescent lamp

manufactured on or after January 1, 2006, 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:

``(A) Minimum initial efficacy.

``(B) Lumen maintenance at 1000 hours.

``(C) Lumen maintenance at 40 percent of rated life.

``(D) Rapid cycle stress test.

[[Page 119 STAT. 632]]

``(E) Lamp life.

``(2) 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.

``(3) The Secretary may, by rule--

``(A) revise the requirements established under paragraph

(2); or

``(B) establish other requirements, after considering energy

savings, cost effectiveness, and consumer satisfaction.

``(cc) Dehumidifiers.--(1) Dehumidifiers manufactured on or after

October 1, 2007, shall have an Energy Factor that meets or exceeds the

following values:

``Product Capacity (pints/day)Minimum Energy Factor (Liters/kWh)........

25.00 or less                                                      1.00

25.01 - 35.00                                                      1.20

35.01 - 54.00                                                      1.30

54.01 - 74.99                                                      1.50

75.00 or more                                                      2.25.

``(2)(A) <<NOTE: Deadline. Publication. Regulations.>> Not later

than October 1, 2009, the Secretary shall publish a final rule in

accordance with subsections (o) and (p), to determine whether the energy

conservation standards established under paragraph (1) should be

amended.

``(B) The final rule published under subparagraph (A) shall--

``(i) contain any amendment by the Secretary; and

``(ii) <<NOTE: Applicability.>> provide that the amendment

applies to products manufactured on or after October 1, 2012.

``(C) If the Secretary does not publish an amendment that takes

effect by October 1, 2012, dehumidifiers manufactured on or after

October 1, 2012, shall have an Energy Factor that meets or exceeds the

following values:

``Product Capacity (pints/day)Minimum Energy Factor (Liters/kWh)........

25.00 or less                                                      1.20

25.01 - 35.00                                                      1.30

35.01 - 45.00                                                      1.40

45.01 - 54.00                                                      1.50

54.01 - 74.99                                                      1.60

75.00 or more                                                       2.5.

``(dd) Commercial Prerinse Spray Valves.--Commercial prerinse spray

valves manufactured on or after January 1, 2006, shall have a flow rate

of not more than 1.6 gallons per minute.

``(ee) Mercury Vapor Lamp Ballasts.--Mercury vapor lamp ballasts

shall not be manufactured or imported after January 1, 2008.

``(ff) Ceiling Fans and Ceiling Fan Light Kits.--(1)(A) All ceiling

fans manufactured on or after January 1, 2007, shall have the following

features:

``(i) Fan speed controls separate from any lighting

controls.

``(ii) Adjustable speed controls (either more than 1 speed

or variable speed).

``(iii) Adjustable speed controls (either more than 1 speed

or variable speed).

``(iv) The capability of reversible fan action, except for--

[[Page 119 STAT. 633]]

``(I) fans sold for industrial applications;

``(II) outdoor applications; and

``(III) cases in which safety standards would be

violated by the use of the reversible mode.

``(B) The Secretary may define the exceptions described in clause

(iv) in greater detail, but shall not substantively expand the

exceptions.

``(2)(A) Ceiling fan light kits with medium screw base sockets

manufactured on or after January 1, 2007, shall be packaged with screw-

based lamps to fill all screw base sockets.

``(B) The screw-based lamps required under subparagraph (A) shall--

``(i) meet the Energy Star Program Requirements for Compact

Fluorescent Lamps, version 3.0, issued by the Department of

Energy; or

``(ii) use light sources other than compact fluorescent

lamps that have lumens per watt performance at least equivalent

to comparably configured compact fluorescent lamps meeting the

Energy Star Program Requirements described in clause (i).

``(3) Ceiling fan light kits with pin-based sockets for fluorescent

lamps manufactured on or after January 1, 2007 shall--

``(A) meet the Energy Star Program Requirements for

Residential Light Fixtures version 4.0 issued by the

Environmental Protection Agency; and

``(B) be packaged with lamps to fill all sockets.

``(4)(A) <<NOTE: Deadline. Requirements.>> By January 1, 2007, the

Secretary shall consider and issue requirements for any ceiling fan

lighting kits other than those covered in paragraphs (2) and (3),

including candelabra screw base sockets.

``(B) The requirements issued under subparagraph (A) shall be

effective for products manufactured 2 years after the date of the final

rule.

``(C) If the Secretary fails to issue a final rule by the date

specified in subparagraph (B), any type of ceiling fan lighting kit

described in subparagraph (A) that is manufactured after January 1,

2009--

``(i) shall not be capable of operating with lamps that

total more than 190 watts; and

``(ii) shall include the lamps described in clause (i) in

the ceiling fan lighting kits.

``(5)(A) After January 1, 2010, the Secretary may consider, and

issue, if the requirements of subsections (o) and (p) are met, amended

energy efficiency standards for ceiling fan light kits.

``(B) <<NOTE: Applicability.>> Any amended standards issued under

subparagraph (A) shall apply to products manufactured not earlier than 2

years after the date of publication of the final rule establishing the

amended standard.

``(6)(A) Notwithstanding any other provision of this Act, the

Secretary may consider, and issue, if the requirements of subsections

(o) and (p) are met, energy efficiency or energy use standards for

electricity used by ceiling fans to circulate air in a room.

``(B) In issuing the standards under subparagraph (A), the Secretary

shall consider--

``(C) exempting, or setting different standards for, certain

product classes for which the primary standards are not

technically feasible or economically justified; and

[[Page 119 STAT. 634]]

``(D) establishing separate exempted product classes for

highly decorative fans for which air movement performance is a

secondary design feature.

``(7) <<NOTE: Applicability.>> Section 327 shall apply to the

products covered in paragraphs (1) through (4) beginning on the date of

enactment of this subsection, except that any State or local labeling

requirement for ceiling fans prescribed or enacted before the date of

enactment of this subsection shall not be preempted until the labeling

requirements applicable to ceiling fans established under section 327

take effect.

``(gg) Application Date.--Section 327 applies--

``(1) to products for which energy conservation standards

are to be established under subsection (l), (u), or (v)

beginning on the date on which a final rule is issued by the

Secretary, except that any State or local standard prescribed or

enacted for the product before the date on which the final rule

is issued shall not be preempted until the energy conservation

standard established under subsection (l), (u), or (v) for the

product takes effect; and

``(2) to products for which energy conservation standards

are established under subsections (w) through (ff) on the date

of enactment of those subsections, except that any State or

local standard prescribed or enacted before the date of

enactment of those subsections shall not be preempted until the

energy conservation standards established under subsections (w)

through (ff) take effect.''.

(d) General Rule of Preemption.--Section 327(c) of the Energy Policy

and Conservation Act (42 U.S.C. 6297(c)) is amended--

(1) in paragraph (5), by striking ``or'' at the end;

(2) in paragraph (6), by striking the period at the end and

inserting ``; or''; and

(3) by adding at the end the following:

``(7)(A) is a regulation concerning standards for commercial

prerinse spray valves adopted by the California Energy

Commission before January 1, 2005; or

``(B) is an amendment to a regulation described in

subparagraph (A) that was developed to align California

regulations with changes in American Society for Testing and

Materials Standard F2324;

``(8)(A) is a regulation concerning standards for pedestrian

modules adopted by the California Energy Commission before

January 1, 2005; or

``(B) is an amendment to a regulation described in

subparagraph (A) that was developed to align California

regulations to changes in the Institute for Transportation

Engineers standards, entitled `Performance Specification:

Pedestrian Traffic Control Signal Indications'.''.

SEC. 136. ENERGY CONSERVATION STANDARDS FOR COMMERCIAL EQUIPMENT.

(a) Definitions.--Section 340 of the Energy Policy and Conservation

Act (42 U.S.C. 6311) is amended--

(1) in paragraph (1)--

(A) by redesignating subparagraphs (D) through (G)

as subparagraphs (H) through (K), respectively; and

(B) by inserting after subparagraph (C) the

following:

[[Page 119 STAT. 635]]

``(D) Very large commercial package air conditioning

and heating equipment.

``(E) Commercial refrigerators, freezers, and

refrigerator-freezers.

``(F) Automatic commercial ice makers.

``(G) Commercial clothes washers.'';

(2) in paragraph (2)(B), by striking ``small and large

commercial package air conditioning and heating equipment'' and

inserting ``commercial package air conditioning and heating

equipment, commercial refrigerators, freezers, and refrigerator-

freezers, automatic commercial ice makers, commercial clothes

washers'';

(3) by striking paragraphs (8) and (9) and inserting the

following:

``(8)(A) The term `commercial package air conditioning and

heating equipment' means air-cooled, water-cooled,

evaporatively-cooled, or water source (not including ground

water source) electrically operated, unitary central air

conditioners and central air conditioning heat pumps for

commercial application.

``(B) The term `small commercial package air conditioning

and heating equipment' means commercial package air conditioning

and heating equipment that is rated below 135,000 Btu per hour

(cooling capacity).

``(C) The term `large commercial package air conditioning

and heating equipment' means commercial package air conditioning

and heating equipment that is rated--

``(i) at or above 135,000 Btu per hour; and

``(ii) below 240,000 Btu per hour (cooling

capacity).

``(D) The term `very large commercial package air

conditioning and heating equipment' means commercial package air

conditioning and heating equipment that is rated--

``(i) at or above 240,000 Btu per hour; and

``(ii) below 760,000 Btu per hour (cooling

capacity).

``(9)(A) The term `commercial refrigerator, freezer, and

refrigerator-freezer' means refrigeration equipment that--

``(i) is not a consumer product (as defined in

section 321);

``(ii) is not designed and marketed exclusively for

medical, scientific, or research purposes;

``(iii) operates at a chilled, frozen, combination

chilled and frozen, or variable temperature;

``(iv) displays or stores merchandise and other

perishable materials horizontally, semivertically, or

vertically;

``(v) has transparent or solid doors, sliding or

hinged doors, a combination of hinged, sliding,

transparent, or solid doors, or no doors;

``(vi) is designed for pull-down temperature

applications or holding temperature applications; and

``(vii) is connected to a self-contained condensing

unit or to a remote condensing unit.

``(B) The term `holding temperature application' means a use

of commercial refrigeration equipment other than a pull-down

temperature application, except a blast chiller or freezer.

``(C) The term `integrated average temperature' means the

average temperature of all test package measurements taken

during the test.

[[Page 119 STAT. 636]]

``(D) The term `pull-down temperature application' means a

commercial refrigerator with doors that, when fully loaded with

12 ounce beverage cans at 90 degrees F, can cool those beverages

to an average stable temperature of 38 degrees F in 12 hours or

less.

``(E) The term `remote condensing unit' means a factory-made

assembly of refrigerating components designed to compress and

liquefy a specific refrigerant that is remotely located from the

refrigerated equipment and consists of one or more refrigerant

compressors, refrigerant condensers, condenser fans and motors,

and factory supplied accessories.

``(F) The term `self-contained condensing unit' means a

factory-made assembly of refrigerating components designed to

compress and liquefy a specific refrigerant that is an integral

part of the refrigerated equipment and consists of one or more

refrigerant compressors, refrigerant condensers, condenser fans

and motors, and factory supplied accessories.''; and

(4) by adding at the end the following:

``(19) The term `automatic commercial ice maker' means a

factory-made assembly (not necessarily shipped in one package)

that--

``(A) consists of a condensing unit and ice-making

section operating as an integrated unit, with means for

making and harvesting ice; and

``(B) may include means for storing ice, dispensing

ice, or storing and dispensing ice.

``(20) The term `commercial clothes washer' means a soft-

mount front-loading or soft-mount top-loading clothes washer

that--

``(A) has a clothes container compartment that--

``(i) for horizontal-axis clothes washers, is

not more than 3.5 cubic feet; and

``(ii) for vertical-axis clothes washers, is

not more than 4.0 cubic feet; and

``(B) is designed for use in--

``(i) applications in which the occupants of

more than one household will be using the clothes

washer, such as multi-family housing common areas

and coin laundries; or

``(ii) other commercial applications.

``(21) The term `harvest rate' means the amount of ice (at

32 degrees F) in pounds produced per 24 hours.''.

(b) Standards for Commercial Package Air Conditioning and Heating

Equipment.--Section 342(a) of the Energy Policy and Conservation Act (42

U.S.C. 6313(a)) is amended--

(1) in the subsection heading, by striking ``Small and

Large'' and inserting ``Small, Large, and Very Large'';

(2) in paragraph (1), by inserting ``but before January 1,

2010,'' after ``January 1, 1994,'';

(3) in paragraph (2), by inserting ``but before January 1,

2010,'' after ``January 1, 1995,''; and

(4) in paragraph (6)--

(A) in subparagraph (A)--

(i) by inserting ``(i)'' after ``(A)'';

(ii) by striking ``the date of enactment of

the Energy Policy Act of 1992'' and inserting

``January 1, 2010'';

[[Page 119 STAT. 637]]

(iii) by inserting after ``large commercial

package air conditioning and heating equipment,''

the following: ``and very large commercial package

air conditioning and heating equipment, or if

ASHRAE/IES Standard 90.1, as in effect on October

24, 1992, is amended with respect to any''; and

(iv) by adding at the end the following:

``(ii) If ASHRAE/IES Standard 90.1 is not amended with respect to

small commercial package air conditioning and heating equipment, large

commercial package air conditioning and heating equipment, and very

large commercial package air conditioning and heating equipment during

the 5-year period beginning on the effective date of a standard, the

Secretary may initiate a rulemaking to determine whether a more

stringent standard--

``(I) would result in significant additional conservation of

energy; and

``(II) is technologically feasible and economically

justified.''; and

(B) in subparagraph (C)(ii), by inserting ``and very

large commercial package air conditioning and heating

equipment'' after ``large commercial package air

conditioning and heating equipment''; and

(5) by adding at the end the following:

``(7) Small commercial package air conditioning and heating

equipment manufactured on or after January 1, 2010, shall meet the

following standards:

``(A) The minimum energy efficiency ratio of air-cooled

central air conditioners at or above 65,000 Btu per hour

(cooling capacity) and less than 135,000 Btu per hour (cooling

capacity) shall be--

``(i) 11.2 for equipment with no heating or electric

resistance heating; and

``(ii) 11.0 for equipment with all other heating

system types that are integrated into the equipment (at

a standard rating of 95 degrees F db).

``(B) The minimum energy efficiency ratio of air-cooled

central air conditioner heat pumps at or above 65,000 Btu per

hour (cooling capacity) and less than 135,000 Btu per hour

(cooling capacity) shall be--

``(i) 11.0 for equipment with no heating or electric

resistance heating; and

``(ii) 10.8 for equipment with all other heating

system types that are integrated into the equipment (at

a standard rating of 95 degrees F db).

``(C) The minimum coefficient of performance in the heating

mode of air-cooled central air conditioning heat pumps at or

above 65,000 Btu per hour (cooling capacity) and less than

135,000 Btu per hour (cooling capacity) shall be 3.3 (at a high

temperature rating of 47 degrees F db).

``(8) Large commercial package air conditioning and heating

equipment manufactured on or after January 1, 2010, shall meet the

following standards:

``(A) The minimum energy efficiency ratio of air-cooled

central air conditioners at or above 135,000 Btu per hour

(cooling capacity) and less than 240,000 Btu per hour (cooling

capacity) shall be--

[[Page 119 STAT. 638]]

``(i) 11.0 for equipment with no heating or electric

resistance heating; and

``(ii) 10.8 for equipment with all other heating

system types that are integrated into the equipment (at

a standard rating of 95 degrees F db).

``(B) The minimum energy efficiency ratio of air-cooled

central air conditioner heat pumps at or above 135,000 Btu per

hour (cooling capacity) and less than 240,000 Btu per hour

(cooling capacity) shall be--

``(i) 10.6 for equipment with no heating or electric

resistance heating; and

``(ii) 10.4 for equipment with all other heating

system types that are integrated into the equipment (at

a standard rating of 95 degrees F db).

``(C) The minimum coefficient of performance in the heating

mode of air-cooled central air conditioning heat pumps at or

above 135,000 Btu per hour (cooling capacity) and less than

240,000 Btu per hour (cooling capacity) shall be 3.2 (at a high

temperature rating of 47 degrees F db).

``(9) Very large commercial package air conditioning and heating

equipment manufactured on or after January 1, 2010, shall meet the

following standards:

``(A) The minimum energy efficiency ratio of air-cooled

central air conditioners at or above 240,000 Btu per hour

(cooling capacity) and less than 760,000 Btu per hour (cooling

capacity) shall be--

``(i) 10.0 for equipment with no heating or electric

resistance heating; and

``(ii) 9.8 for equipment with all other heating

system types that are integrated into the equipment (at

a standard rating of 95 degrees F db).

``(B) The minimum energy efficiency ratio of air-cooled

central air conditioner heat pumps at or above 240,000 Btu per

hour (cooling capacity) and less than 760,000 Btu per hour

(cooling capacity) shall be--

``(i) 9.5 for equipment with no heating or electric

resistance heating; and

``(ii) 9.3 for equipment with all other heating

system types that are integrated into the equipment (at

a standard rating of 95 degrees F db).

``(C) The minimum coefficient of performance in the heating

mode of air-cooled central air conditioning heat pumps at or

above 240,000 Btu per hour (cooling capacity) and less than

760,000 Btu per hour (cooling capacity) shall be 3.2 (at a high

temperature rating of 47 degrees F db).''.

(c) Standards for Commercial Refrigerators, Freezers, and

Refrigerator-Freezers.--Section 342 of the Energy Policy and

Conservation Act (42 U.S.C. 6313) is amended by adding at the end the

following:

``(c) Commercial Refrigerators, Freezers, and Refrigerator-

Freezers.--(1) In this subsection:

``(A) The term `AV' means the adjusted volume

(ft<SUP>3</SUP>) (defined as 1.63 x frozen temperature

compartment volume (ft<SUP>3</SUP>) + chilled temperature

compartment volume (ft<SUP>3</SUP>)) with compartment volumes

measured in accordance with the Association of Home Appliance

Manufacturers Standard HRF1-1979.

[[Page 119 STAT. 639]]

``(B) The term `V' means the chilled or frozen compartment

volume (ft<SUP>3</SUP>) (as defined in the Association of Home

Appliance Manufacturers Standard HRF1-1979).

``(C) Other terms have such meanings as may be established

by the Secretary, based on industry-accepted definitions and

practice.

``(2) Each commercial refrigerator, freezer, and refrigerator-

freezer with a self-contained condensing unit designed for holding

temperature applications manufactured on or after January 1, 2010, shall

have a daily energy consumption (in kilowatt hours per day) that does

not exceed the following:

Refrigerators with solid doors..  0.10 V + 2.04

Refrigerators with transparent    0.12 V + 3.34

doors.

Freezers with solid doors.......  0.40 V + 1.38

Freezers with transparent doors.  0.75 V + 4.10

Refrigerators/freezers with       0.27 AV - 0.71 or 0.70.

solid doors the greater of.

``(3) Each commercial refrigerator with a self-contained condensing

unit designed for pull-down temperature applications and transparent

doors manufactured on or after January 1, 2010, shall have a daily

energy consumption (in kilowatt hours per day) of not more than 0.126 V

+ 3.51.

``(4)(A) <<NOTE: Deadline. Regulations.>> Not later than January 1,

2009, the Secretary shall issue, by rule, standard levels for ice-cream

freezers, self-contained commercial refrigerators, freezers, and

refrigerator-freezers without doors, and remote condensing commercial

refrigerators, freezers, and refrigerator-freezers, with the standard

levels effective for equipment manufactured on or after January 1, 2012.

``(B) The Secretary may issue, by rule, standard levels for other

types of commercial refrigerators, freezers, and refrigerator-freezers

not covered by paragraph (2)(A) with the standard levels effective for

equipment manufactured 3 or more years after the date on which the final

rule is published.

``(5)(A) <<NOTE: Deadlines. Regulations.>> Not later than January 1,

2013, the Secretary shall issue a final rule to determine whether the

standards established under this subsection should be amended.

``(B) Not later than 3 years after the effective date of any amended

standards under subparagraph (A) or the publication of a final rule

determining that the standards should not be amended, the Secretary

shall issue a final rule to determine whether the standards established

under this subsection or the amended standards, as applicable, should be

amended.

``(C) <<NOTE: Applicability.>> If the Secretary issues a final rule

under subparagraph (A) or (B) establishing amended standards, the final

rule shall provide that the amended standards apply to products

manufactured on or after the date that is--

``(i) 3 years after the date on which the final amended

standard is published; or

``(ii) if the Secretary determines, by rule, that 3 years is

inadequate, not later than 5 years after the date on which the

final rule is published.''.

(d) Standards for Automatic Commercial Ice Makers.--Section 342 of

the Energy Policy and Conservation Act (42 U.S.C.

[[Page 119 STAT. 640]]

6313) (as amended by subsection (c)) is amended by adding at the end the

following:

``(d) Automatic Commercial Ice Makers.--(1) Each automatic

commercial ice maker that produces cube type ice with capacities between

50 and 2500 pounds per 24-hour period when tested according to the test

standard established in section 343(a)(7) and is manufactured on or

after January 1, 2010, shall meet the following standard levels:

----------------------------------------------------------------------------------------------------------------

Maximum Condenser

Equipment Type             Type of     Harvest Rate (lbs ice/   Maximum Energy Use   Water Use (gal/100

Cooling           24 hours)           (kWh/100 lbs Ice)        lbs Ice)

----------------------------------------------------------------------------------------------------------------

Ice Making Head                  Water         <500                     7.80-0.0055H          200-0.022H

------------------------------------------------------------------

500 and <1436            5.58-0.0011H          200-0.022H

------------------------------------------------------------------

1436                     4.0                   200-0.022H

----------------------------------------------------------------------------------------------------------------

Ice Making Head                  Air           <450                     10.26-0.0086H         Not Applicable

------------------------------------------------------------------

450                      6.89-0.0011H          Not Applicable

----------------------------------------------------------------------------------------------------------------

Remote Condensing                Air           <1000                    8.85-0.0038H          Not Applicable

(but not remote

compressor)

------------------------------------------------------------------

1000                     5.10                  Not Applicable

----------------------------------------------------------------------------------------------------------------

Remote Condensing                Air           <934                     8.85-0.0038H          Not Applicable

and Remote

Compressor

------------------------------------------------------------------

934                      5.3                   Not Applicable

----------------------------------------------------------------------------------------------------------------

Self Contained                   Water         <200                     11.40-0.019H          191-0.0315H

------------------------------------------------------------------

200                      7.60                  191-0.0315H

----------------------------------------------------------------------------------------------------------------

Self Contained                   Air           <175                     18.0-0.0469H          Not Applicable

------------------------------------------------------------------

175                      9.80                  Not Applicable

----------------------------------------------------------------------------------------------------------------

H = Harvest rate in pounds per 24 hours.

Water use is for the condenser only and does not include potable water used to make ice.

``(2)(A) The Secretary may issue, by rule, standard levels for types

of automatic commercial ice makers that are not covered by paragraph

(1).

``(B) <<NOTE: Applicability.>> The standards established under

subparagraph (A) shall apply to products manufactured on or after the

date that is--

``(i) 3 years after the date on which the rule is published

under subparagraph (A); or

[[Page 119 STAT. 641]]

``(ii) <<NOTE: Deadline.>> if the Secretary determines, by

rule, that 3 years is inadequate, not later than 5 years after

the date on which the final rule is published.

``(3)(A) <<NOTE: Deadlines. Regulations.>> Not later than January 1,

2015, with respect to the standards established under paragraph (1),

and, with respect to the standards established under paragraph (2), not

later than 5 years after the date on which the standards take effect,

the Secretary shall issue a final rule to determine whether amending the

applicable standards is technologically feasible and economically

justified.

``(B) Not later than 5 years after the effective date of any amended

standards under subparagraph (A) or the publication of a final rule

determining that amending the standards is not technologically feasible

or economically justified, the Secretary shall issue a final rule to

determine whether amending the standards established under paragraph (1)

or the amended standards, as applicable, is technologically feasible or

economically justified.

``(C) <<NOTE: Applicability.>> If the Secretary issues a final rule

under subparagraph (A) or (B) establishing amended standards, the final

rule shall provide that the amended standards apply to products

manufactured on or after the date that is--

``(i) 3 years after the date on which the final amended

standard is published; or

``(ii) if the Secretary determines, by rule, that 3 years is

inadequate, not later than 5 years after the date on which the

final amended standard is published.

``(4) A final rule issued under paragraph (2) or (3) shall establish

standards at the maximum level that is technically feasible and

economically justified, as provided in subsections (o) and (p) of

section 325.''.

(e) Standards for Commercial Clothes Washers.--Section 342 of the

Energy Policy and Conservation Act (42 U.S.C. 6313) (as amended by

subsection (d)) is amended by adding at the end the following:

``(e) Commercial Clothes Washers.--(1) Each commercial clothes

washer manufactured on or after January 1, 2007, shall have--

``(A) a Modified Energy Factor of at least 1.26; and

``(B) a Water Factor of not more than 9.5.

``(2)(A)(i) <<NOTE: Deadlines. Publication. Regulations.>> Not later

than January 1, 2010, the Secretary shall publish a final rule to

determine whether the standards established under paragraph (1) should

be amended.

``(ii) <<NOTE: Applicability.>> The rule published under clause (i)

shall provide that any amended standard shall apply to products

manufactured 3 years after the date on which the final amended standard

is published.

``(B)(i) Not later than January 1, 2015, the Secretary shall publish

a final rule to determine whether the standards established under

paragraph (1) should be amended.

``(ii) <<NOTE: Applicability.>> The rule published under clause (i)

shall provide that any amended standard shall apply to products

manufactured 3 years after the date on which the final amended standard

is published.''.

(f) Test Procedures.--Section 343 of the Energy Policy and

Conservation Act (42 U.S.C. 6314) is amended--

(1) in subsection (a)--

(A) in paragraph (4)--

[[Page 119 STAT. 642]]

(i) in subparagraph (A), by inserting ``very

large commercial package air conditioning and

heating equipment,'' after ``large commercial

package air conditioning and heating equipment,'';

and

(ii) in subparagraph (B), by inserting ``very

large commercial package air conditioning and

heating equipment,'' after ``large commercial

package air conditioning and heating equipment,'';

and

(B) by adding at the end the following:

``(6)(A)(i) In the case of commercial refrigerators, freezers, and

refrigerator-freezers, the test procedures shall be--

``(I) the test procedures determined by the Secretary to be

generally accepted industry testing procedures; or

``(II) rating procedures developed or recognized by the

ASHRAE or by the American National Standards Institute.

``(ii) In the case of self-contained refrigerators, freezers, and

refrigerator-freezers to which standards are applicable under paragraphs

(2) and (3) of section 342(c), the initial test procedures shall be the

ASHRAE 117 test procedure that is in effect on January 1, 2005.

``(B)(i) In the case of commercial refrigerators, freezers, and

refrigerator-freezers with doors covered by the standards adopted in

February 2002, by the California Energy Commission, the rating

temperatures shall be the integrated average temperature of 38 degrees F

( <plus-minus>  2 degrees F) for refrigerator compartments and 0 degrees

F ( <plus-minus>  2 degrees F) for freezer compartments.

``(C) <<NOTE: Regulations.>> The Secretary shall issue a rule in

accordance with paragraphs (2) and (3) to establish the appropriate

rating temperatures for the other products for which standards will be

established under section 342(c)(4).

``(D) In establishing the appropriate test temperatures under this

subparagraph, the Secretary shall follow the procedures and meet the

requirements under section 323(e).

``(E)(i) <<NOTE: Deadline. Regulations.>> Not later than 180 days

after the publication of the new ASHRAE 117 test procedure, if the

ASHRAE 117 test procedure for commercial refrigerators, freezers, and

refrigerator-freezers is amended, the Secretary shall, by rule, amend

the test procedure for the product as necessary to ensure that the test

procedure is consistent with the amended ASHRAE 117 test procedure,

unless the Secretary makes a determination, by rule, and supported by

clear and convincing evidence, that to do so would not meet the

requirements for test procedures under paragraphs (2) and (3).

``(ii) <<NOTE: Notice. Federal Register, publication.>> If the

Secretary determines that 180 days is an insufficient period during

which to review and adopt the amended test procedure or rating procedure

under clause (i), the Secretary shall publish a notice in the Federal

Register stating the intent of the Secretary to wait not longer than 1

additional year before putting into effect an amended test procedure or

rating procedure.

``(F)(i) <<NOTE: Regulations.>> If a test procedure other than the

ASHRAE 117 test procedure is approved by the American National Standards

Institute, the Secretary shall, by rule--

``(I) review the relative strengths and weaknesses of the

new test procedure relative to the ASHRAE 117 test procedure;

and

``(II) based on that review, adopt one new test procedure

for use in the standards program.

``(ii) <<NOTE: Applicability.>> If a new test procedure is adopted

under clause (i)--

[[Page 119 STAT. 643]]

``(I) section 323(e) shall apply; and

``(II) subparagraph (B) shall apply to the adopted test

procedure.

``(7)(A) In the case of automatic commercial ice makers, the test

procedures shall be the test procedures specified in Air-Conditioning

and Refrigeration Institute Standard 810-2003, as in effect on January

1, 2005.

``(B)(i) <<NOTE: Regulations. Federal Register, publication.>> If

Air-Conditioning and Refrigeration Institute Standard 810-2003 is

amended, the Secretary shall amend the test procedures established in

subparagraph (A) as necessary to be consistent with the amended Air-

Conditioning and Refrigeration Institute Standard, unless the Secretary

determines, by rule, published in the Federal Register and supported by

clear and convincing evidence, that to do so would not meet the

requirements for test procedures under paragraphs (2) and (3).

``(ii) If the Secretary issues a rule under clause (i) containing a

determination described in clause (ii), the rule may establish an

amended test procedure for the product that meets the requirements of

paragraphs (2) and (3).

``(C) The Secretary shall comply with section 323(e) in establishing

any amended test procedure under this paragraph.

``(8) With respect to commercial clothes washers, the test

procedures shall be the same as the test procedures established by the

Secretary for residential clothes washers under section 325(g).''; and

(2) in subsection (d)(1), by inserting ``very large

commercial package air conditioning and heating equipment,

commercial refrigerators, freezers, and refrigerator-freezers,

automatic commercial ice makers, commercial clothes washers,''

after ``large commercial package air conditioning and heating

equipment,''.

(g) Labeling.--Section 344(e) of the Energy Policy and Conservation

Act (42 U.S.C. 6315(e)) is amended by inserting ``very large commercial

package air conditioning and heating equipment, commercial

refrigerators, freezers, and refrigerator-freezers, automatic commercial

ice makers, commercial clothes washers,'' after ``large commercial

package air conditioning and heating equipment,'' each place it appears.

(h) Administration, <<NOTE: Applicability.>> Penalties, Enforcement,

and Preemption.--Section 345 of the Energy Policy and Conservation Act

(42 U.S.C. 6316) is amended--

(1) in subsection (a)--

(A) in paragraph (7), by striking ``and'' at the

end;

(B) in paragraph (8), by striking the period at the

end and inserting ``; and''; and

(C) by adding at the end the following:

``(9) in the case of commercial clothes washers, section

327(b)(1) shall be applied as if the National Appliance Energy

Conservation Act of 1987 was the Energy Policy Act of 2005.'';

(2) in the first sentence of subsection (b)(1), by striking

``part B'' and inserting ``part A''; and

(3) by adding at the end the following:

``(d)(1) Except as provided in paragraphs (2) and (3), section 327

shall apply with respect to very large commercial package air

conditioning and heating equipment to the same extent and in the same

manner as section 327 applies under part A on the date of enactment of

this subsection.

[[Page 119 STAT. 644]]

``(2) <<NOTE: Effective date.>> Any State or local standard issued

before the date of enactment of this subsection shall not be preempted

until the standards established under section 342(a)(9) take effect on

January 1, 2010.

``(e)(1)(A) <<NOTE: Applicability.>> Subsections (a), (b), and (d)

of section 326, subsections (m) through (s) of section 325, and sections

328 through 336 shall apply with respect to commercial refrigerators,

freezers, and refrigerator-freezers to the same extent and in the same

manner as those provisions apply under part A.

``(B) In applying those provisions to commercial refrigerators,

freezers, and refrigerator-freezers, paragraphs (1), (2), (3), and (4)

of subsection (a) shall apply.

``(2)(A) Section 327 shall apply to commercial refrigerators,

freezers, and refrigerator-freezers for which standards are established

under paragraphs (2) and (3) of section 342(c) to the same extent and in

the same manner as those provisions apply under part A on the date of

enactment of this subsection, except that any State or local standard

issued before the date of enactment of this subsection shall not be

preempted until the standards established under paragraphs (2) and (3)

of section 342(c) take effect.

``(B) In applying section 327 in accordance with subparagraph (A),

paragraphs (1), (2), and (3) of subsection (a) shall apply.

``(3)(A) Section 327 shall apply to commercial refrigerators,

freezers, and refrigerator-freezers for which standards are established

under section 342(c)(4) to the same extent and in the same manner as the

provisions apply under part A on the date of publication of the final

rule by the Secretary, except that any State or local standard issued

before the date of publication of the final rule by the Secretary shall

not be preempted until the standards take effect.

``(B) In applying section 327 in accordance with subparagraph (A),

paragraphs (1), (2), and (3) of subsection (a) shall apply.

``(4)(A) If the Secretary does not issue a final rule for a specific

type of commercial refrigerator, freezer, or refrigerator-freezer within

the time frame specified in section 342(c)(5), subsections (b) and (c)

of section 327 shall not apply to that specific type of refrigerator,

freezer, or refrigerator-freezer for the period beginning on the date

that is 2 years after the scheduled date for a final rule and ending on

the date on which the Secretary publishes a final rule covering the

specific type of refrigerator, freezer, or refrigerator-freezer.

``(B) Any State or local standard issued before the date of

publication of the final rule shall not be preempted until the final

rule takes effect.

``(5)(A) <<NOTE: Certification.>> In the case of any commercial

refrigerator, freezer, or refrigerator-freezer to which standards are

applicable under paragraphs (2) and (3) of section 342(c), the Secretary

shall require manufacturers to certify, through an independent,

nationally recognized testing or certification program, that the

commercial refrigerator, freezer, or refrigerator-freezer meets the

applicable standard.

``(B) The Secretary shall, to the maximum extent practicable,

encourage the establishment of at least 2 independent testing and

certification programs.

``(C) <<NOTE: Records.>> As part of certification, information on

equipment energy use and interior volume shall be made available to the

Secretary.

``(f)(1)(A)(i) <<NOTE: Applicability.>> Except as provided in clause

(ii), section 327 shall apply to automatic commercial ice makers for

which standards

[[Page 119 STAT. 645]]

have been established under section 342(d)(1) to the same extent and in

the same manner as the section applies under part A on the date of

enactment of this subsection.

``(ii) Any State standard issued before the date of enactment of

this subsection shall not be preempted until the standards established

under section 342(d)(1) take effect.

``(B) In applying section 327 to the equipment under subparagraph

(A), paragraphs (1), (2), and (3) of subsection (a) shall apply.

``(2)(A)(i) Except as provided in clause (ii), section 327 shall

apply to automatic commercial ice makers for which standards have been

established under section 342(d)(2) to the same extent and in the same

manner as the section applies under part A on the date of publication of

the final rule by the Secretary.

``(ii) Any State standard issued before the date of publication of

the final rule by the Secretary shall not be preempted until the

standards established under section 342(d)(2) take effect.

``(B) In applying section 327 in accordance with subparagraph (A),

paragraphs (1), (2), and (3) of subsection (a) shall apply.

``(3)(A) If the Secretary does not issue a final rule for a specific

type of automatic commercial ice maker within the time frame specified

in section 342(d), subsections (b) and (c) of section 327 shall no

longer apply to the specific type of automatic commercial ice maker for

the period beginning on the day after the scheduled date for a final

rule and ending on the date on which the Secretary publishes a final

rule covering the specific type of automatic commercial ice maker.

``(B) Any State standard issued before the publication of the final

rule shall not be preempted until the standards established in the final

rule take effect.

``(4)(A) The Secretary shall monitor whether manufacturers are

reducing harvest rates below tested values for the purpose of bringing

non-complying equipment into compliance.

``(B) If the Secretary finds that there has been a substantial

amount of manipulation with respect to harvest rates under subparagraph

(A), the Secretary shall take steps to minimize the manipulation, such

as requiring harvest rates to be within 5 percent of tested values.

``(g)(1)(A) If the Secretary does not issue a final rule for

commercial clothes washers within the timeframe specified in section

342(e)(2), subsections (b) and (c) of section 327 shall not apply to

commercial clothes washers for the period beginning on the day after the

scheduled date for a final rule and ending on the date on which the

Secretary publishes a final rule covering commercial clothes washers.

``(B) Any State or local standard issued before the date on which

the Secretary publishes a final rule shall not be preempted until the

standards established under section 342(e)(2) take effect.

``(2) The Secretary shall undertake an educational program to inform

owners of laundromats, multifamily housing, and other sites where

commercial clothes washers are located about the new standard, including

impacts on washer purchase costs and options for recovering those costs

through coin collection.''.

SEC. 137. ENERGY LABELING.

(a) Rulemaking on Effectiveness of Consumer Product Labeling.--

Section 324(a)(2) of the Energy Policy and Conservation

[[Page 119 STAT. 646]]

Act (42 U.S.C. 6294(a)(2)) is amended by adding at the end the

following:

``(F)(i) <<NOTE: Deadlines.>> Not later than 90 days after the date

of enactment of this subparagraph, the Commission shall initiate a

rulemaking to consider--

``(I) the effectiveness of the consumer products labeling

program in assisting consumers in making purchasing decisions

and improving energy efficiency; and

``(II) changes to the labeling rules (including categorical

labeling) that would improve the effectiveness of consumer

product labels.

``(ii) Not later than 2 years after the date of enactment of this

subparagraph, the Commission shall complete the rulemaking initiated

under clause (i).

``(G)(i) <<NOTE: Deadline.>> Not later than 18 months after the date

of enactment of this subparagraph, the Commission shall issue by rule,

in accordance with this section, labeling requirements for the

electricity used by ceiling fans to circulate air in a room.

``(ii) <<NOTE: Applicability.>> The rule issued under clause (i)

shall apply to products manufactured after the later of--

``(I) January 1, 2009; or

``(II) the date that is 60 days after the final rule is

issued.''.

(b) Rulemaking on Labeling for Additional Products.--Section 324(a)

of the Energy Policy and Conservation Act (42 U.S.C. 6294(a)) is amended

by adding at the end the following:

``(5)(A) For covered products described in subsections (u) through

(ff) of section 325, after a test procedure has been prescribed under

section 323, the Secretary or the Commission, as appropriate, may

prescribe, by rule, under this section labeling requirements for the

products.

``(B) 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

on the date of enactment of this paragraph.

``(C) In the case of dehumidifiers covered under section 325(dd),

the Commission shall not require an `Energy Guide' label.''.

SEC. 138. INTERMITTENT ESCALATOR STUDY.

(a) In General.--The Administrator of General Services shall conduct

a study on the advantages and disadvantages of employing intermittent

escalators in the United States.

(b) Contents.--Such study shall include an analysis of--

(1) the energy end-cost savings derived from the use of

intermittent escalators;

(2) the cost savings derived from reduced maintenance

requirements; and

(3) such other issues as the Administrator considers

appropriate.

(c) Report to Congress.--Not later than 1 year after the date of

enactment of this Act, the Administrator shall transmit to Congress a

report on the results of the study.

(d) Definition.--For purposes of this section, the term

``intermittent escalator'' means an escalator that remains in a

stationary

[[Page 119 STAT. 647]]

position until it automatically operates at the approach of a passenger,

returning to a stationary position after the passenger completes

passage.

SEC. 139. ENERGY EFFICIENT ELECTRIC AND NATURAL GAS UTILITIES STUDY.

(a) In General.--Not <<NOTE: Deadline.>> later than 1 year after the

date of enactment of this Act, the Secretary, in consultation with the

National Association of Regulatory Utility Commissioners and the

National Association of State Energy Officials, shall conduct a study of

State and regional policies that promote cost-effective programs to

reduce energy consumption (including energy efficiency programs) that

are carried out by--

(1) utilities that are subject to State regulation; and

(2) nonregulated utilities.

(b) Consideration.--In conducting the study under subsection (a),

the Secretary shall take into consideration--

(1) performance standards for achieving energy use and

demand reduction targets;

(2) funding sources, including rate surcharges;

(3) infrastructure planning approaches (including energy

efficiency programs) and infrastructure improvements;

(4) the costs and benefits of consumer education programs

conducted by State and local governments and local utilities to

increase consumer awareness of energy efficiency technologies

and measures; and

(5) methods of--

(A) removing disincentives for utilities to

implement energy efficiency programs;

(B) encouraging utilities to undertake voluntary

energy efficiency programs; and

(C) ensuring appropriate returns on energy

efficiency programs.

(c) Report.--Not later than 1 year after the date of enactment of

this Act, the Secretary shall submit to Congress a report that

includes--

(1) the findings of the study; and

(2) any recommendations of the Secretary, including

recommendations on model policies to promote energy efficiency

programs.

SEC. 140. <<NOTE: 42 USC 15833.>> ENERGY EFFICIENCY PILOT PROGRAM.

(a) In General.--The Secretary shall establish a pilot program under

which the Secretary provides financial assistance to at least 3, but not

more than 7, States to carry out pilot projects in the States for--

(1) planning and adopting statewide programs that encourage,

for each year in which the pilot project is carried out--

(A) energy efficiency; and

(B) reduction of consumption of electricity or

natural gas in the State by at least 0.75 percent, as

compared to a baseline determined by the Secretary for

the period preceding the implementation of the program;

or

(2) for any State that has adopted a statewide program as of

the date of enactment of this Act, activities that reduce energy

consumption in the State by expanding and improving the program.

[[Page 119 STAT. 648]]

(b) Verification.--A State that receives financial assistance under

subsection (a)(1) shall submit to the Secretary independent verification

of any energy savings achieved through the statewide program.

(c) Authorization of Appropriations.--There is authorized to be

appropriated to carry out this section $5,000,000 for each of fiscal

years 2006 through 2010, to remain available until expended.

SEC. 141. <<NOTE: 42 USC 15834.>> REPORT ON FAILURE TO COMPLY WITH

DEADLINES FOR NEW OR REVISED ENERGY CONSERVATION STANDARDS.

(a) Initial Report.--The Secretary shall submit a report to Congress

regarding each new or revised energy conservation or water use standard

which the Secretary has failed to issue in conformance with the

deadlines established in the Energy Policy and Conservation Act. Such

report shall state the reasons why the Secretary has failed to comply

with the deadline for issuances of the new or revised standard and set

forth the Secretary's plan for expeditiously prescribing such new or

revised standard. The Secretary's initial report shall be submitted not

later than 6 months following enactment of this Act and subsequent

reports shall be submitted whenever the Secretary determines that

additional deadlines for issuance of new or revised standards have been

missed.

(b) Implementation Report.--Every 6 months following the submission

of a report under subsection (a) until the adoption of a new or revised

standard described in such report, the Secretary shall submit to the

Congress an implementation report describing the Secretary's progress in

implementing the Secretary's plan or the issuance of the new or revised

standard.

Subtitle D--Public Housing

SEC. 151. 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:

[[Page 119 STAT. 649]]

``(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. 152. <<NOTE: 42 USC 15841.>> 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, unless the purchase of energy-

efficient appliances is not cost-effective to the agency.

SEC. 153. 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, 2006'';

(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 inserting ``, and, with

respect to 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), the 2003 International Energy

Conservation Code'' after ``90.1-1989')'';

(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, 2006''; and

(B) by inserting ``, and, with respect to

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), the 2003 International Energy

Conservation Code'' before the period at the end; and

[[Page 119 STAT. 650]]

(3) in subsection (c)--

(A) in the heading, by inserting ``and the

International Energy Conservation Code'' after ``Model

Energy Code''; and

(B) by inserting ``, or, with respect to

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), the 2003 International Energy

Conservation Code'' after ``1989''.

SEC. 154. <<NOTE: 42 USC 15842.>> 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 <<NOTE: Reports. Deadlines.>> 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. <<NOTE: 42 USC 15851.>> ASSESSMENT OF RENEWABLE ENERGY

RESOURCES.

(a) Resource Assessment.--Not <<NOTE: Deadlines.>> later than 6

months after the date of enactment of this Act, and each year

thereafter, the Secretary shall review the available assessments of

renewable energy resources within the United States, including solar,

wind, biomass, ocean (including 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.

[[Page 119 STAT. 651]]

(c) Authorization of Appropriations.--For <<NOTE: 42 USC 13311

note.>> the purposes of this section, there are authorized to be

appropriated to the Secretary $10,000,000 for each of fiscal years 2006

through 2010.

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--

(1) by striking the last sentence;

(2) by designating the first, second, and third sentences as

paragraphs (1), (2), and (3), respectively;

(3) in paragraph (3) (as so designated), by striking ``and

which satisfies'' and all that follows through ``deems

necessary''; and

(4) by adding at the end the following:

``(4)(A) Subject to subparagraph (B), if there are insufficient

appropriations to make full payments for electric production from all

qualified renewable energy facilities for a fiscal year, the Secretary

shall assign--

``(i) 60 percent of appropriated funds for the fiscal year

to facilities that use solar, wind, ocean (including tidal,

wave, current, and thermal), geothermal, or closed-loop

(dedicated energy crops) biomass technologies to generate

electricity; and

``(ii) 40 percent of appropriated funds for the fiscal year

to other projects.

``(B) After submitting to Congress an explanation of the reasons for

the alteration, the Secretary may alter the percentage requirements of

subparagraph (A).''.

(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, an Indian tribal government or subdivision

thereof, or a Native Corporation (as defined in section 3 of the

Alaska Native Claims Settlement Act (43 U.S.C. 1602)),''; and

(2) by inserting ``landfill gas, livestock methane, ocean

(including tidal, wave, current, and thermal),'' 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 ``before October 1,

2016''.

(d) Payment Period.--Section 1212(d) of the Energy Policy Act of

1992 (42 U.S.C. 13317(d)) is amended in the second sentence by inserting

``, or in which the Secretary determines that all necessary Federal and

State authorizations have been obtained to begin construction of the

facility'' after ``eligible for such payments''.

(e) Amount of Payment.--Section 1212(e)(1) of the Energy Policy Act

of 1992 (42 U.S.C. 13317(e)(1)) is amended in the first sentence by

inserting ``landfill gas, livestock methane, ocean (including tidal,

wave, current, and thermal),'' after ``wind, biomass,''.

[[Page 119 STAT. 652]]

(f) Termination of Authority.--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, 2026''.

(g) Authorization of Appropriations.--Section 1212 of the Energy

Policy Act of 1992 (42 U.S.C. 13317) is amended by striking subsection

(g) and inserting the following:

``(g) Authorization of Appropriations.--There are authorized to be

appropriated such sums as are necessary to carry out this section for

each of fiscal years 2006 through 2026, to remain available until

expended.''.

SEC. 203. <<NOTE: 42 USC 15852.>> FEDERAL PURCHASE REQUIREMENT.

(a) Requirement.--The <<NOTE: President.>> President, acting through

the Secretary, 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 2007 through

2009.

(2) Not less than 5 percent in fiscal years 2010 through

2012.

(3) Not less than 7.5 percent in fiscal year 2013 and each

fiscal year thereafter.

(b) Definitions.--In this section:

(1) Biomass.--The term ``biomass'' means any lignin waste

material that is segregated from other waste materials and is

determined to be nonhazardous by the Administrator of the

Environmental Protection Agency and 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, ocean (including tidal, wave, current, and thermal),

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;

[[Page 119 STAT. 653]]

(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, 2007, and every 2 years

thereafter, the Secretary shall provide a report to Congress on the

progress of the Federal Government in meeting the goals established by

this section.

SEC. 204. 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) <<NOTE: Reports.>> develop innovative

procurement strategies for the acquisition of such

systems; and

[[Page 119 STAT. 654]]

``(C) transmit to Congress an annual report on the

results of the program.

``(b) Photovoltaic Systems Evaluation Program.--

``(1) In general.--Not <<NOTE: Deadline.>> later than 60

days after the date of enactment of this section, the

Administrator 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 2006 through 2010. 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 2006 through 2010. Such

sums shall remain available until expended.''.

(b) Conforming Amendment.--The table of sections for the National

Energy Conservation Policy Act is amended by inserting after the item

relating to section 569 the following:

``Sec. 570. Use of photovoltaic energy in public buildings.''.

SEC. 205. 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''.

SEC. 206. RENEWABLE ENERGY SECURITY.

(a) Weatherization Assistance.--Section 415(c) of the Energy

Conservation and Production Act (42 U.S.C. 6865(c)) is amended--

(1) in paragraph (1), by striking ``in paragraph (3)'' and

inserting ``in paragraphs (3) and (4)'';

(2) in paragraph (3), by striking ``$2,500 per dwelling unit

average provided in paragraph (1)'' and inserting ``dwelling

unit averages provided in paragraphs (1) and (4)''; and

(3) by adding at the end the following new paragraphs:

``(4) The expenditure of financial assistance provided under this

part for labor, weatherization materials, and related matters for a

renewable energy system shall not exceed an average of $3,000 per

dwelling unit.

``(5)(A) <<NOTE: Regulations.>> The Secretary shall by regulations--

``(i) establish the criteria which are to be used in

prescribing performance and quality standards under paragraph

(6)(A)(ii) or in specifying any form of renewable energy under

paragraph (6)(A)(i)(I); and

``(ii) establish a procedure under which a manufacturer of

an item may request the Secretary to certify that the item will

be treated, for purposes of this paragraph, as a renewable

energy system.

``(B) The Secretary shall make a final determination with respect to

any request filed under subparagraph (A)(ii) within 1

[[Page 119 STAT. 655]]

year after the filing of the request, together with any information

required to be filed with such request under subparagraph (A)(ii).

``(C) <<NOTE: Reports.>> Each month the Secretary shall publish a

report of any request under subparagraph (A)(ii) which has been denied

during the preceding month and the reasons for the denial.

``(D) The Secretary shall not specify any form of renewable energy

under paragraph (6)(A)(i)(I) unless the Secretary determines that--

``(i) there will be a reduction in oil or natural gas

consumption as a result of such specification;

``(ii) such specification will not result in an increased

use of any item which is known to be, or reasonably suspected to

be, environmentally hazardous or a threat to public health or

safety; and

``(iii) available Federal subsidies do not make such

specification unnecessary or inappropriate (in the light of the

most advantageous allocation of economic resources).

``(6) In this subsection--

``(A) the term `renewable energy system' means a system

which--

``(i) when installed in connection with a dwelling,

transmits or uses--

``(I) solar energy, energy derived from the

geothermal deposits, energy derived from biomass,

or any other form of renewable energy which the

Secretary specifies by regulations, for the

purpose of heating or cooling such dwelling or

providing hot water or electricity for use within

such dwelling; or

``(II) wind energy for nonbusiness residential

purposes;

``(ii) meets the performance and quality standards

(if any) which have been prescribed by the Secretary by

regulations;

``(iii) in the case of a combustion rated system,

has a thermal efficiency rating of at least 75 percent;

and

``(iv) in the case of a solar system, has a thermal

efficiency rating of at least 15 percent; and

``(B) the term `biomass' means any organic matter that is

available on a renewable or recurring basis, including

agricultural crops and trees, wood and wood wastes and residues,

plants (including aquatic plants), grasses, residues, fibers,

and animal wastes, municipal wastes, and other waste

materials.''.

(b) District Heating and Cooling Programs.--Section 172 of the

Energy Policy Act of 1992 (42 U.S.C. 13451 note) is amended--

(1) in subsection (a)--

(A) by striking ``and'' at the end of paragraph (3);

(B) by striking the period at the end of paragraph

(4) and inserting ``; and''; and

(C) by adding at the end the following new

paragraph:

``(5) evaluate the use of renewable energy systems (as such

term is defined in section 415(c) of the Energy Conservation and

Production Act (42 U.S.C. 6865(c))) in residential buildings.'';

and

(2) in subsection (b), by striking ``this Act'' and

inserting ``the Energy Policy Act of 2005''.

(c) Rebate <<NOTE: 42 USC 15853.>> Program.--

[[Page 119 STAT. 656]]

(1) Establishment.--The Secretary shall establish a program

providing rebates for consumers for expenditures made for the

installation of a renewable energy system in connection with a

dwelling unit or small business.

(2) Amount of rebate.--Rebates provided under the program

established under paragraph (1) shall be in an amount not to

exceed the lesser of--

(A) 25 percent of the expenditures described in

paragraph (1) made by the consumer; or

(B) $3,000.

(3) Definition.--For purposes of this subsection, the term

``renewable energy system'' has the meaning given that term in

section 415(c)(6)(A) of the Energy Conservation and Production

Act (42 U.S.C. 6865(c)(6)(A)), as added by subsection (a)(3) of

this section.

(4) Authorization of appropriations.--There are authorized

to be appropriated to the Secretary for carrying out this

subsection, to remain available until expended--

(A) $150,000,000 for fiscal year 2006;

(B) $150,000,000 for fiscal year 2007;

(C) $200,000,000 for fiscal year 2008;

(D) $250,000,000 for fiscal year 2009; and

(E) $250,000,000 for fiscal year 2010.

(d) Renewable Fuel Inventory.--

Not <<NOTE: Deadline. Reports.>> later than 180 days after the date of

enactment of this Act, the Secretary shall transmit to Congress a report

containing--

(1) an inventory of renewable fuels available for consumers;

and

(2) a projection of future inventories of renewable fuels

based on the incentives provided in this section.

SEC. 207. INSTALLATION OF PHOTOVOLTAIC SYSTEM.

There <<NOTE: Appropriation authorization.>> is authorized to be

appropriated to the General Services Administration to install a

photovoltaic system, as set forth in the Sun Wall Design Project, for

the headquarters building of the Department of Energy located at 1000

Independence Avenue Southwest in the District of Columbia, commonly know

as the Forrestal Building, $20,000,000 for fiscal year 2006. Such sums

shall remain available until expended.

SEC. 208. <<NOTE: 42 USC 15854.>> SUGAR CANE ETHANOL PROGRAM.

(a) Definition of Program.--In this section, the term ``program''

means the Sugar Cane Ethanol Program established by subsection (b).

(b) Establishment.--There is established within the Environmental

Protection Agency a program to be known as the ``Sugar Cane Ethanol

Program''.

(c) Project.--

(1) In general.--Subject to the availability of

appropriations under subsection (d), in carrying out the

program, the Administrator of the Environmental Protection

Agency shall establish a project that is--

(A) carried out in multiple States--

(i) in each of which is produced cane sugar

that is eligible for loans under section 156 of

the Federal Agriculture Improvement and Reform Act

of 1996 (7 U.S.C. 7272), or a similar subsequent

authority; and

[[Page 119 STAT. 657]]

(ii) at the option of each such State, that

have an incentive program that requires the use of

ethanol in the State; and

(B) designed to study the production of ethanol from

cane sugar, sugarcane, and sugarcane byproducts.

(2) Requirements.--A project described in paragraph (1)

shall--

(A) be limited to sugar producers and the production

of ethanol in the States of Florida, Louisiana, Texas,

and Hawaii, divided equally among the States, to

demonstrate that the process may be applicable to cane

sugar, sugarcane, and sugarcane byproducts;

(B) include information on the ways in which the

scale of production may be replicated once the sugar

cane industry has located sites for, and constructed,

ethanol production facilities; and

(C) not last more than 3 years.

(d) Authorization of Appropriations.--There is authorized to be

appropriated to carry out this section $36,000,000, to remain available

until expended.

SEC. 209. RURAL AND REMOTE COMMUNITY ELECTRIFICATION GRANTS.

The Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601

et seq.) is amended in title VI by adding at the end the following:

``SEC. 609. <<NOTE: 7 USC 918c.>> RURAL AND REMOTE COMMUNITIES

ELECTRIFICATION GRANTS.

``(a) Definitions.--In this section:

``(1) The term `eligible grantee' means a local government

or municipality, peoples' utility district, irrigation district,

and cooperative, nonprofit, or limited-dividend association in a

rural area.

``(2) The term `incremental hydropower' means additional

generation achieved from increased efficiency after January 1,

2005, at a hydroelectric dam that was placed in service before

January 1, 2005.

``(3) The term `renewable energy' means electricity

generated from--

``(A) a renewable energy source; or

``(B) hydrogen, other than hydrogen produced from a

fossil fuel, that is produced from a renewable energy

source.

``(4) The term `renewable energy source' means--

``(A) wind;

``(B) ocean waves;

``(C) biomass;

``(D) solar;

``(E) landfill gas;

``(F) incremental hydropower;

``(G) livestock methane; or

``(H) geothermal energy.

``(5) The term `rural area' means a city, town, or

unincorporated area that has a population of not more than

10,000 inhabitants.

``(b) Grants.--The Secretary, in consultation with the Secretary of

Agriculture and the Secretary of the Interior, may provide grants under

this section to eligible grantees for the purpose of--

[[Page 119 STAT. 658]]

``(1) increasing energy efficiency, siting or upgrading

transmission and distribution lines serving rural areas; or

``(2) providing or modernizing electric generation

facilities that serve rural areas.

``(c) Grant Administration.--(1) The Secretary shall make grants

under this section based on a determination of cost-effectiveness and

the most effective use of the funds to achieve the purposes described in

subsection (b).

``(2) For each fiscal year, the Secretary shall allocate grant funds

under this section equally between the purposes described in paragraphs

(1) and (2) of subsection (b).

``(3) In making grants for the purposes described in subsection

(b)(2), the Secretary shall give preference to renewable energy

facilities.

``(d) Authorization of Appropriations.--There is authorized to be

appropriated to the Secretary to carry out this section $20,000,000 for

each of fiscal years 2006 through 2012.''.

SEC. 210. <<NOTE: 42 USC 15855.>> GRANTS TO IMPROVE THE COMMERCIAL VALUE

OF FOREST BIOMASS FOR ELECTRIC ENERGY, USEFUL HEAT,

TRANSPORTATION FUELS, AND OTHER COMMERCIAL PURPOSES.

(a) Definitions.--In this section:

(1) Biomass.--The term ``biomass'' means nonmerchantable

materials or precommercial thinnings that are byproducts of

preventive treatments, such as trees, wood, brush, thinnings,

chips, and slash, that are removed--

(A) to reduce hazardous fuels;

(B) to reduce or contain disease or insect

infestation; or

(C) to restore forest health.

(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) Nonmerchantable.--For purposes of subsection (b), the

term ``nonmerchantable'' means that portion of the byproducts of

preventive treatments that would not otherwise be used for

higher value products.

(4) 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 or a corporation that is

incorporated in the United States; and

(E) a nonprofit organization.

(5) Preferred community.--The term ``preferred community''

means--

(A) any Indian tribe;

(B) 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 Federal or Indian

land, the condition of

[[Page 119 STAT. 659]]

which is at significant risk of catastrophic

wildfire, disease, or insect infestation or which

suffers from disease or insect infestation; or

(C) 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 Federal or Indian

land, the condition of which is at significant

risk of catastrophic wildfire, disease, or insect

infestation or which suffers from disease or

insect infestation.

(6) Secretary concerned.--The term ``Secretary concerned''

means the Secretary of Agriculture or the Secretary of the

Interior.

(b) Biomass Commercial Use Grant Program.--

(1) In general.--The Secretary concerned may make grants to

any person in a preferred community that owns or operates a

facility that uses biomass as a raw material to produce electric

energy, sensible heat, or transportation fuels 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.

(c) 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--

(A) the anticipated public benefits of the project,

including the potential to develop thermal or electric

energy resources or affordable energy;

(B) opportunities for the creation or expansion of

small businesses and micro-businesses;

(C) the potential for new job creation;

(D) the potential for the project to improve

efficiency or develop cleaner technologies for biomass

utilization; and

(E) the potential for the project to reduce the

hazardous fuels from the areas in greatest need of

treatment.

(3) Grant amount.--A grant under this subsection may not

exceed $500,000.

(d) Authorization of Appropriations.--There are authorized to be

appropriated $50,000,000 for each of the fiscal years 2006 through 2016

to carry out this section.

[[Page 119 STAT. 660]]

(e) 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 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. 211. SENSE OF CONGRESS REGARDING GENERATION CAPACITY OF ELECTRICITY

FROM RENEWABLE ENERGY RESOURCES ON PUBLIC LANDS.

It is the sense of the Congress that the Secretary of the Interior

should, before the end of the 10-year period beginning on the date of

enactment of this Act, seek to have approved non-hydropower renewable

energy projects located on the public lands with a generation capacity

of at least 10,000 megawatts of electricity.

Subtitle B--Geothermal <<NOTE: John Rishel Geothermal Steam Act

Amendments of 2005.>> Energy

SEC. 221. <<NOTE: 30 USC 1001 note.>> SHORT TITLE.

This subtitle may be cited as the ``John Rishel Geothermal Steam Act

Amendments of 2005''.

SEC. 222. 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 land

to be leased at any time from qualified companies and individuals under

this Act.

``(b) Competitive Lease Sale Required.--

``(1) In general.--Except as otherwise specifically provided

by this Act, all land to be leased that is not subject to

leasing under subsection (c) shall be leased as provided in this

subsection to the highest responsible qualified bidder, as

determined by the Secretary.

``(2) Competitive lease sales.--The Secretary shall hold a

competitive lease sale at least once every 2 years for land in a

State that has nominations pending under subsection (a) if the

land is otherwise available for leasing.

``(3) Lands subject to mining claims.--Lands that are

subject to a mining claim for which a plan of operations has

been approved by the relevant Federal land management agency may

be available for noncompetitive leasing under this section to

the mining claim holder.

``(c) Noncompetitive Leasing.--The Secretary shall make available

for a period of 2 years for noncompetitive leasing any

[[Page 119 STAT. 661]]

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) Pending Lease Applications.--

``(1) In general.--It shall be a priority for the Secretary,

and for the Secretary of Agriculture with respect to National

Forest Systems land, to ensure timely completion of

administrative actions, including amendments to applicable

forest plans and resource management plans, necessary to process

applications for geothermal leasing pending on the date of

enactment of this subsection. All future forest plans and

resource management plans for areas with high geothermal

resource potential shall consider geothermal leasing and

development.

``(2) Administration.--An application described in paragraph

(1) and any lease issued pursuant to the application--

``(A) except as provided in subparagraph (B), shall

be subject to this section as in effect on the day

before the date of enactment of this paragraph; or

``(B) at the election of the applicant, shall be

subject to this section as in effect on the effective

date of this paragraph.

``(e) 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.''.

SEC. 223. 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 subsection (c), by redesignating paragraphs (1) and

(2) as subparagraphs (A) and (B), respectively;

(2) by redesignating subsections (a) through (d) as

paragraphs (1) through (4), respectively;

(3) by inserting ``(a) In General.--'' after ``Sec. 5.'';

and

(4) by adding at the end the following:

``(b) Direct Use.--

``(1) In general.--

Notwithstanding <<NOTE: Fees.>> subsection (a)(1), the Secretary

shall establish a schedule of fees, in lieu of royalties for

geothermal resources, that a lessee or its affiliate--

``(A) uses for a purpose other than the commercial

generation of electricity; and

``(B) does not sell.

``(2) Schedule of fees.--The schedule of fees--

``(A) may be based on the quantity or thermal

content, or both, of geothermal resources used;

``(B) shall ensure a fair return to the United

States for use of the resource; and

``(C) shall encourage development of the resource.

``(3) State, tribal, or local governments.--If a State,

tribal, or local government is the lessee and uses geothermal

resources without sale and for public purposes other than

commercial generation of electricity, the Secretary shall charge

only a nominal fee for use of the resource.

[[Page 119 STAT. 662]]

``(4) Final regulation.--In issuing any final regulation

establishing a schedule of fees under this subsection, the

Secretary shall seek--

``(A) to provide lessees with a simplified

administrative system;

``(B) to facilitate development of direct use of

geothermal resources; and

``(C) to contribute to sustainable economic

development opportunities in the area.''.

(b) Leasing for Direct Use.--Section 4 of the Geothermal Steam Act

of 1970 (30 U.S.C. 1003) (as amended by section 222) is further amended

by adding at the end the following:

``(f) Leasing for Direct Use of Geothermal Resources.--

Notwithstanding subsection (b), the Secretary may identify areas in

which the land to be leased under this Act exclusively for direct use of

geothermal resources, without sale for purposes other than commercial

generation of electricity, may be leased to any qualified applicant that

first applies for such a lease under regulations issued by the

Secretary, if the Secretary--

``(1) <<NOTE: Notice. Deadline.>> publishes a notice of the

land proposed for leasing not later than 90 days before the date

of the issuance of the lease;

``(2) does not receive during the 90-day period beginning on

the date of the publication any nomination to include the land

concerned in the next competitive lease sale; and

``(3) determines there is no competitive interest in the

geothermal resources in the land to be leased.

``(g) Area Subject to Lease for Direct Use.--

``(1) In general.--Subject to paragraph (2), a geothermal

lease for the direct use of geothermal resources shall cover not

more than the quantity of acreage determined by the Secretary to

be reasonably necessary for the proposed use.

``(2) Limitations.--The quantity of acreage covered by the

lease shall not exceed the limitations established under section

7.''.

(c) Application of New Lease Terms.--The <<NOTE: 30 USC 1004

note.>> schedule of fees established under 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, and have been

paid, on or after July 16, 2003. This subsection shall not require the

refund of royalties paid to a State under section 20 of the Geothermal

Steam Act of 1970 (30 U.S.C. 1019) prior to the date of enactment of

this Act.

SEC. 224. 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

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

[[Page 119 STAT. 663]]

``(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 level of royalty revenues over a

10-year period 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), except as otherwise provided by this

section, 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 Rents.--

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 subsection (b) 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 <<NOTE: 30 USC 1004 note.>> 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

[[Page 119 STAT. 664]]

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 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 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 (as such average is

adjusted to reflect any trend in changes in production during

that period).

(e) Royalty Under Existing Leases.--

(1) In general.--Any lessee under a lease issued under the

Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) before the

date of enactment of this Act may, within the time period

specified in paragraph (2), submit to the Secretary of the

Interior a request to modify the terms of the lease relating to

payment of royalties to provide--

(A) in the case of a lease that meets the

requirements of subsection (b) of section 5 of the

Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as

amended by section 223), that royalties be based on the

schedule of fees established under that section; and

(B) in the case of any other lease, that royalties

be computed on a percentage of the gross proceeds from

the sale of electricity, at a royalty rate that is

expected to yield total royalty payments equivalent to

payments that would have been received for comparable

production under the royalty rate in effect for the

lease before the date of enactment of this subsection.

(2) Timing.--A <<NOTE: Deadlines.>> request for a

modification under paragraph (1) shall be submitted to the

Secretary of the Interior by the date that is not later than--

(A) in the case of a lease for direct use, 18 months

after the effective date of the schedule of fees

established by the Secretary of the Interior under

section 5 of the Geothermal Steam Act of 1970 (30 U.S.C.

1004); or

(B) in the case of any other lease, 18 months after

the effective date of the final regulation issued under

subsection (a).

(3) Application of modification.--If the lessee requests

modification of a lease under paragraph (1)--

(A) <<NOTE: Deadline.>> the Secretary of the

Interior shall, within 180 days after the receipt of the

request for modification, modify the lease to comply

with--

[[Page 119 STAT. 665]]

(i) in the case of a lease for direct use, the

schedule of fees established by the Secretary

under section 5 of the Geothermal Steam Act of

1970 (30 U.S.C. 1004); or

(ii) in the case of any other lease, the

royalty for the lease established under paragraph

(1)(B); and

(B) the modification shall apply to any use of

geothermal resources to which subsection (a) applies

that occurs after the date of the modification.

(4) Consultation.--The Secretary of the Interior shall

consult with the State and local governments affected by any

proposed changes in lease royalty terms under this subsection.

SEC. 225. <<NOTE: 42 USC 15871.>> COORDINATION OF GEOTHERMAL LEASING AND

PERMITTING ON FEDERAL LANDS.

(a) In General.--Not <<NOTE: Deadline. Memorandum.>> later than 180

days after the date of 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,

the Geothermal Steam Act of 1970 (as amended by this Act), and other

applicable laws, regarding coordination of 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) establish an administrative procedure for processing

geothermal lease applications, including lines of authority,

steps in application processing, and time limits for application

procession;

(2) establish a 5-year program for geothermal leasing of

lands in the National Forest System, and a process for updating

that program every 5 years; and

(3) <<NOTE: Effective date.>> establish a program for

reducing the backlog of geothermal lease application pending on

January 1, 2005, by 90 percent within the 5-year period

beginning on the date of enactment of this Act, including, as

necessary, by issuing leases, rejecting lease applications for

failure to comply with the provisions of the regulations under

which they were filed, or determining that an original applicant

(or the applicant's assigns, heirs, or estate) is no longer

interested in pursuing the lease application.

(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. 226. <<NOTE: Deadline. 42 USC 15872.>> ASSESSMENT OF GEOTHERMAL

ENERGY POTENTIAL.

Not later than 3 years after the date of enactment of this Act and

thereafter as the availability of data and developments in technology

warrants, the Secretary of the Interior, acting through the Director of

the United States Geological Survey and in cooperation with the States,

shall--

(1) update the Assessment of Geothermal Resources made

during 1978; and

(2) submit to Congress the updated assessment.

[[Page 119 STAT. 666]]

SEC. 227. 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 reservoir, field, or like area, is

subject to any cooperative plan of development or operation

(referred to in this section as a `unit agreement')), 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 the reservoir, 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.

``(2) Majority interest of single leases.--A majority

interest of owners of any single lease shall have the authority

to commit the lease to a unit agreement.

``(3) Initiative of secretary.--The Secretary may also

initiate the formation of a unit agreement, or require an

existing Federal lease to commit to a unit agreement, if in the

public interest.

``(4) Modification of lease requirements by secretary.--

``(A) In general.--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 the

leases and make conditions with respect to the leases,

with the consent of the lessees, in connection with the

creation and operation of any such unit agreement as the

Secretary may consider necessary or advisable to secure

the protection of the public interest.

``(B) Unlike terms or rates.--Leases with unlike

lease terms or royalty rates shall not be required to be

modified to be in the same unit.

``(b) Requirement of Plans Under New Leases.--The Secretary may--

``(1) provide that geothermal leases issued under this Act

shall contain a provision requiring the lessee to operate under

a unit agreement; and

``(2) prescribe the unit agreement under which the 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 unit agreement

authorized by this section that applies to land 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 unit agreement to alter or modify,

from time to time, the rate of prospecting and development and the

quantity and rate of production under the unit agreement.

[[Page 119 STAT. 667]]

``(d) Exclusion From Determination of Holding or Control.--Any land

that is subject to a unit agreement approved or prescribed by the

Secretary under this section shall not be considered in determining

holdings or control under section 7.

``(e) Pooling of Certain Land.--If separate tracts of land cannot be

independently developed and operated to use geothermal resources

pursuant to any section of this Act--

``(1) the land, or a portion of the land, may be pooled with

other land, 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 the pooling is determined by the Secretary

to be in the public interest; and

``(2) operation or production pursuant to the

communitization agreement shall be treated as operation or

production with respect to each tract of land that is subject to

the communitization agreement.

``(f) Unit Agreement Review.--

``(1) In general.--Not <<NOTE: Deadlines.>> later than 5

years after the date of approval of any unit agreement and at

least every 5 years thereafter, the Secretary shall--

``(A) review each unit agreement; and

``(B) after notice and opportunity for comment,

eliminate from inclusion in the unit agreement any land

that the Secretary determines is not reasonably

necessary for unit operations under the unit agreement.

``(2) Basis for elimination.--The elimination shall--

``(A) be based on scientific evidence; and

``(B) occur only if the elimination is determined by

the Secretary to be for the purpose of conserving and

properly managing the geothermal resource.

``(3) Extension.--Any land eliminated under this subsection

shall be eligible for an extension under section 6(g) if the

land meets the requirements for the extension.

``(g) Drilling or Development Contracts.--

``(1) In general.--The Secretary may, on such conditions as

the Secretary may prescribe, approve drilling or development

contracts made by one or more lessees of geothermal leases, with

one 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 by the

approval.

``(2) Holdings or control.--Each lease operated under an

approved drilling or development contract, and interest under

the contract, 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 appropriate State

agencies.''.

SEC. 228. ROYALTY ON BYPRODUCTS.

Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as

amended by section 223(a)) is further amended in subsection (a) by

striking paragraph (2) and inserting the following:

[[Page 119 STAT. 668]]

``(2) a royalty on any byproduct that is a mineral specified

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 the

mineral under a lease under that Act;''.

SEC. 229. AUTHORITIES OF SECRETARY TO READJUST TERMS, CONDITIONS,

RENTALS, AND ROYALTIES.

Section 8(b) of the Geothermal Steam Act of 1970 (30 U.S.C. 1006) is

amended in the <<NOTE: 30 USC 1007.>> second sentence by striking

``period, and in no event'' and all that follows through the end of the

sentence and inserting ``period''.

SEC. 230. CREDITING OF RENTAL TOWARD ROYALTY.

Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as

amended by sections 223 and 224) 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. 231. 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. <<NOTE: Regulations.>> 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 10th year of the lease--

``(A) the Secretary determined under subsection (b)

that the lessee satisfied the work commitment

requirements that applied to the lease for that year; or

``(B) the lessee paid in annual payments accordance

with subsection (c).

``(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 (b) that the lessee satisfied the

minimum work requirements that applied to the lease for that

year.

[[Page 119 STAT. 669]]

``(b) Requirement to Satisfy Annual Minimum Work Requirement.--

``(1) In general.--The lessee for a geothermal lease shall,

for each year after the 10th year of the lease, satisfy minimum

work requirements prescribed by the Secretary that apply to the

lease for that year.

``(2) Prescription of minimum work requirements.--The

Secretary shall issue regulations prescribing minimum work

requirements for geothermal leases, that--

``(A) establish a geothermal potential; and

``(B) if a geothermal potential has been

established, confirm the existence of producible

geothermal resources.

``(c) Payments in Lieu of Minimum Work Requirements.--In lieu of the

minimum work requirements set forth in subsection (b)(2), the Secretary

shall by regulation establish minimum annual payments which may be made

by the lessee for a limited number of years that the Secretary

determines will not impair achieving diligent development of the

geothermal resource, but in no event shall the number of years exceed

the duration of the extension period provided in subsection (a).

``(d) Transition Rules for Leases Issued Prior to Enactment of

Energy Policy Act of 2005.--The Secretary shall by regulation 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--

``(1) to allow achievement of production under the lease; or

``(2) to allow the lease to be included in a producing unit.

``(e) Geothermal Lease Overlying Mining Claim.--

``(1) Exemption.--The lessee for a geothermal lease of an

area overlying an area subject to a mining claim for which a

plan of operations has been approved by the relevant Federal

land management agency is exempt from annual work requirements

established under this Act, if development of the geothermal

resource subject to the lease would interfere with the mining

operations under such claim.

``(2) Termination of exemption.--An exemption under this

paragraph expires upon the termination of the mining operations.

``(f) Termination of Application of Requirements.--Minimum work

requirements prescribed under this section shall not apply to a

geothermal lease after the date on which the geothermal resource is

utilized under the lease in commercial quantities.''.

SEC. 232. ADVANCED ROYALTIES REQUIRED FOR CESSATION OF PRODUCTION.

Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as

amended by sections 223, 224, and 230) is further amended by adding at

the end the following:

``(f) Advanced Royalties Required for Cessation of Production.--

``(1) In general.--Subject to paragraphs (2) and (3), if, at

any time after commercial production under a lease is achieved,

production ceases for any reason, the lease shall remain in full

force and effect for a period of not more than

[[Page 119 STAT. 670]]

an aggregate number of 10 years beginning on the date production

ceases, if, during the period in which production is ceased, the

lessee pays royalties in advance at the monthly average rate at

which the royalty was paid during the period of production.

``(2) Reduction.--The amount of any production royalty paid

for any year shall be reduced (but not below 0) by the amount of

any advanced royalties paid under the lease to the extent that

the advance royalties have not been used to reduce production

royalties for a prior year.

``(3) Exceptions.--Paragraph (1) shall not apply if the

cessation in production is required or otherwise caused by--

``(A) the Secretary;

``(B) the Secretary of the Air Force;

``(C) the Secretary of the Army;

``(D) the Secretary of the Navy;

``(E) a State or a political subdivision of a State;

or

``(F) a force majeure.''.

SEC. 233. ANNUAL RENTAL.

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

1970 (30 U.S.C. 1004) (as amended by section 223(a)) is further amended

in subsection (a) by striking paragraph (3) and inserting the following:

``(3) payment in advance of an annual rental of not less

than--

``(A) for each of the 1st through 10th years of the

lease--

``(i) in the case of a lease awarded in a

noncompetitive lease sale, $1 per acre or fraction

thereof; or

``(ii) in the case of a lease awarded in a

competitive lease sale, $2 per acre or fraction

thereof for the 1st year and $3 per acre or

fraction thereof for each of the 2nd through 10th

years; and

``(B) for each year after the 10th year of the

lease, $5 per acre or fraction thereof;''.

(b) Termination of Lease for Failure to Pay Rental.--Section 5 of

the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as amended by

sections 223, 224, 230, and 232) 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, on the expiration of the 45-day period beginning on

the date of the failure to pay the 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 the amount.''.

[[Page 119 STAT. 671]]

SEC. 234. <<NOTE: 42 USC 15873.>> DEPOSIT AND USE OF GEOTHERMAL LEASE

REVENUES FOR 5 FISCAL YEARS.

(a) Deposit of Geothermal Resources Leases.--Notwithstanding any

other provision of law, amounts received by the United States in the

first 5 fiscal years beginning after the date of enactment of this Act

as rentals, royalties, and other payments required under leases under

the Geothermal Steam Act of 1970, excluding funds required to be paid to

State and county governments, shall be deposited into a separate account

in the Treasury.

(b) Use of Deposits.--Amounts deposited under subsection (a) shall

be available to the Secretary of the Interior for expenditure, without

further appropriation and without fiscal year limitation, to implement

the Geothermal Steam Act of 1970 and this Act.

(c) Transfer of Funds.--For the purposes of coordination and

processing of geothermal leases and geothermal use authorizations on

Federal land the Secretary of the Interior may authorize the expenditure

or transfer of such funds as are necessary to the Forest Service.

SEC. 235. ACREAGE LIMITATIONS.

Section 7 of the Geothermal Steam Act of 1970 (30 U.S.C. 1006) is

amended--

(1) by striking ``sec. 7.'', and by inserting immediately

before and above the first paragraph the following:

``SEC. 7. ACREAGE LIMITATIONS.'';

(2) in the first paragraph--

(A) by striking ``two thousand five hundred and

sixty acres'' and inserting ``5,120 acres''; and

(B) by striking ``twenty thousand four hundred and

eighty acres'' and inserting ``51,200 acres''; and

(3) by striking the second paragraph.

SEC. 236. TECHNICAL AMENDMENTS.

The Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) is further

amended as follows:

(1) <<NOTE: 30 USC 1001, 1002, 1005, 1020, 1022, 1024-

1026.>> By striking ``geothermal steam and associated geothermal

resources'' each place it appears and inserting ``geothermal

resources''.

(2) Section 2 (30 U.S.C. 1001) is amended by adding at the

end the following:

``(g) `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''.

[[Page 119 STAT. 672]]

(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 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''.

(9) Section 9 (30 U.S.C. 1008) is amended by striking ``sec.

9. If'' and inserting the following:

``SEC. 9. BYPRODUCTS.

``If''.

(10) 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''.

(11) 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''.

(12) Section 12 (30 U.S.C. 1011) is amended by striking

``sec. 12. Leases'' and inserting the following:

``SEC. 12. TERMINATION OF LEASES.

``Leases''.

(13) 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''.

(14) Section 14 (30 U.S.C. 1013) is amended by striking

``sec. 14. Subject'' and inserting the following:

``SEC. 14. SURFACE LAND USE.

``Subject''.

(15) 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''.

(16) Section 16 (30 U.S.C. 1015) is amended by striking

``sec. 16. Leases'' and inserting the following:

``SEC. 16. REQUIREMENT FOR LESSEES.

``Leases''.

(17) Section 17 (30 U.S.C. 1016) is amended by striking

``sec. 17. Administration'' and inserting the following:

[[Page 119 STAT. 673]]

``SEC. 17. ADMINISTRATION.

``Administration''.

(18) 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''.

(19) 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.''.

(20) 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''.

(21) 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''.

(22) Section 24 (30 U.S.C. 1023) is amended by striking

``sec. 24. The'' and inserting the following:

``SEC. 24. RULES AND REGULATIONS.

``The''.

(23) 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''.

(24) Section 26 <<NOTE: 30 USC 530.>> is amended by striking

``sec. 26. The'' and inserting the following:

``SEC. 26. AMENDMENT.

``The''.

(25) 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''.

(26) 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''.

(27) 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''.

SEC. 237. INTERMOUNTAIN WEST GEOTHERMAL CONSORTIUM.

(a) Participation Authorized.--The Secretary, acting through the

Idaho National Laboratory, may participate in a consortium described in

subsection (b) to address science and science policy

[[Page 119 STAT. 674]]

issues surrounding the expanded discovery and use of geothermal energy,

including from geothermal resources on public lands.

(b) Members.--The <<NOTE: Establishment.>> consortium referred to in

subsection (a) shall--

(1) be known as the ``Intermountain West Geothermal

Consortium'';

(2) be a regional consortium of institutions and government

agencies that focuses on building collaborative efforts among

the universities in the State of Idaho, other regional

universities, State agencies, and the Idaho National Laboratory;

(3) include Boise State University, the University of Idaho

(including the Idaho Water Resources Research Institute), the

Oregon Institute of Technology, the Desert Research Institute

with the University and Community College System of Nevada, and

the Energy and Geoscience Institute at the University of Utah;

(4) be hosted and managed by Boise State University; and

(5) have a director appointed by Boise State University, and

associate directors appointed by each participating institution.

(c) Financial Assistance.--The Secretary, acting through the Idaho

National Laboratory and subject to the availability of appropriations,

will provide financial assistance to Boise State University for

expenditure under contracts with members of the consortium to carry out

the activities of the consortium.

Subtitle C--Hydroelectric

SEC. 241. 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 and any party to the proceeding shall

be entitled to a determination on the record, after opportunity for an

agency trial-type hearing of no more than 90 days, on any disputed

issues of material fact with respect to such conditions. All disputed

issues of material fact raised by any party shall be determined in a

single trial-type hearing to be conducted by the relevant resource

agency in accordance with the regulations promulgated under this

subsection and within the time frame established by the Commission for

each license proceeding.

Within <<NOTE: Deadline. Regulations. Procedures.>> 90 days of the date

of enactment of the Energy Policy Act of 2005, the Secretaries of the

Interior, Commerce, and Agriculture shall establish jointly, by rule,

the procedures for such expedited trial-type hearing, including the

opportunity to undertake discovery and cross-examine witnesses, 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 <<NOTE: Deadline.>> following: ``The

license applicant and any party to the proceeding shall be entitled to a

determination on the record, after opportunity for an agency trial-type

hearing of no more than 90 days, on any disputed issues of material fact

with respect to such fishways. All disputed issues of material fact

raised by any party shall be determined in a

[[Page 119 STAT. 675]]

single trial-type hearing to be conducted by the relevant resource

agency in accordance with the regulations promulgated under this

subsection and within the time frame established by the Commission for

each license

proceeding. <<NOTE: Deadline. Regulations. Procedures.>> Within 90 days

of the date of enactment of the Energy Policy Act of 2005, the

Secretaries of the Interior, Commerce, and Agriculture shall establish

jointly, by rule, the procedures for such expedited trial-type hearing,

including the opportunity to undertake discovery and cross-examine

witnesses, 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. <<NOTE: 16 USC 823d.>> 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 or any other party to the

license proceeding 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, any other party to the

proceeding, 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, as compared to the condition initially by

the Secretary--

``(i) cost significantly less to implement; or

``(ii) result in improved operation of the project

works for electricity production.

``(3) In making a determination under paragraph (2), the Secretary

shall consider evidence provided for the record by any party to a

licensing proceeding, or otherwise available to the Secretary, including

any evidence provided by the Commission, on the implementation costs or

operational impacts for electricity production of a proposed

alternative.

``(4) <<NOTE: Public information. Records.>> The Secretary concerned

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

[[Page 119 STAT. 676]]

other factual information available to the Secretary and relevant to the

Secretary's decision.

``(5) If the Commission finds that the Secretary's final 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. <<NOTE: Deadline.>> The Dispute Resolution

Service shall consult with the Secretary and the Commission and issue a

non-binding advisory within 90 days. The Secretary may accept the

Dispute Resolution Service advisory unless the Secretary finds that the

recommendation will not adequately protect the

reservation. <<NOTE: Records.>> 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 any other party to the license proceeding

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 license

applicant, any other party to the proceeding, 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, as compared to the fishway initially

prescribed by the Secretary--

``(i) cost significantly less to implement; or

``(ii) result in improved operation of the project

works for electricity production.

``(3) In making a determination under paragraph (2), the Secretary

shall consider evidence provided for the record by any party to a

licensing proceeding, or otherwise available to the Secretary, including

any evidence provided by the Commission, on the implementation costs or

operational impacts for electricity production of a proposed

alternative.

``(4) <<NOTE: Public information. Records.>> 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 prescription

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.

``(5) If the Commission finds that the Secretary's final

prescription would be inconsistent with the purposes of this part, or

other applicable law, the Commission may refer the dispute to the

[[Page 119 STAT. 677]]

Commission's Dispute Resolution Service. <<NOTE: Deadline.>> The Dispute

Resolution Service shall consult with the Secretary and the Commission

and issue a non-binding advisory within 90 days. The Secretary may

accept the Dispute Resolution Service advisory unless the Secretary

finds that the recommendation will not adequately protect the fish

resources. <<NOTE: Records.>> The Secretary shall submit the advisory

and the Secretary's final written determination into the record of the

Commission's proceeding.''.

SEC. 242. <<NOTE: 42 USC 15881.>> HYDROELECTRIC PRODUCTION INCENTIVES.

(a) Incentive Payments.--For electric energy generated and sold by a

qualified hydroelectric facility during the incentive period, 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 <<NOTE: Applicability.>> 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

[[Page 119 STAT. 678]]

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 2005 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 2005 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 2006 through 2015.

SEC. 243. <<NOTE: 42 USC 15882.>> HYDROELECTRIC EFFICIENCY IMPROVEMENT.

(a) Incentive Payments.--The Secretary 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 2006 through 2015.

SEC. 244. ALASKA STATE JURISDICTION OVER SMALL HYDROELECTRIC PROJECTS.

Section 32 of the Federal Power Act (16 U.S.C. 823c) is amended--

(1) in subsection (a)(3)(C), by inserting ``except as

provided in subsection (j),'' before ``conditions''; and

(2) by adding at the end the following:

``(j) Fish and Wildlife.--If the State of Alaska determines that a

recommendation under subsection (a)(3)(C) is inconsistent with

paragraphs (1) and (2) of subsection (a), the State of Alaska may

decline to adopt all or part of the recommendations in accordance with

the procedures established under section 10(j)(2).''.

SEC. 245. <<NOTE: Montana.>> FLINT CREEK HYDROELECTRIC PROJECT.

(a) Extension of Time.--

Notwithstanding <<NOTE: Applicability. Effective dates.>> the time

period specified in section 5 of the Federal Power Act (16 U.S.C. 798)

[[Page 119 STAT. 679]]

that would otherwise apply to the Federal Energy Regulatory Commission

(referred to in this section as the ``Commission'') project numbered

12107, the Commission shall--

(1) if the preliminary permit is in effect on the date of

enactment of this Act, extend the preliminary permit for a

period of 3 years beginning on the date on which the preliminary

permit expires; or

(2) if the preliminary permit expired before the date of

enactment of this Act, on request of the permittee, reinstate

the preliminary permit for an additional 3-year period beginning

on the date of enactment of this Act.

(b) Limitation on Certain Fees.--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 Commission, any

political subdivision of the State of Montana that holds a Commission

license for the Commission project numbered 12107 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. 246. 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 ``July 22, 2005''.

Subtitle D--Insular Energy

SEC. 251. 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:

[[Page 119 STAT. 680]]

``(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 2012, 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) In carrying out this subsection, the Secretary of Energy shall

identify and evaluate the strategies or projects with the greatest

potential for reducing the dependence on imported fossil fuels as used

for the generation of electricity, including strategies and projects

for--

``(A) improved supply-side efficiency of centralized

electrical generation, transmission, and distribution systems;

``(B) improved demand-side management through--

``(i) the application of established standards for

energy efficiency for appliances;

``(ii) the conduct of energy audits for business and

industrial customers; and

``(iii) the use of energy savings performance

contracts;

``(C) increased use of renewable energy, including--

``(i) solar thermal energy for electric generation;

``(ii) solar thermal energy for water heating in

large buildings, such as hotels, hospitals, government

buildings, and residences;

``(iii) photovoltaic energy;

``(iv) wind energy;

``(v) hydroelectric energy;

``(vi) wave energy;

``(vii) energy from ocean thermal resources,

including ocean thermal-cooling for community air

conditioning;

``(viii) water vapor condensation for the production

of potable water;

``(ix) fossil fuel and renewable hybrid electrical

generation systems; and

``(x) other strategies or projects that the

Secretary may identify as having significant potential;

and

``(D) fuel substitution and minimization with indigenous

biofuels, such as coconut oil.

``(3) In carrying out this subsection, for each insular area with a

significant need for distributed generation, the Secretary of Energy

shall identify and evaluate the most promising strategies and projects

described in subparagraphs (C) and (D) of paragraph (2) for meeting that

need.

``(4) In assessing the potential of any strategy or project under

paragraphs (2) and (3), the Secretary of Energy shall consider--

``(A) the estimated cost of the power or energy to be

produced, including--

``(i) any additional costs associated with the

distribution of the generation; and

[[Page 119 STAT. 681]]

``(ii) the long-term availability of the generation

source;

``(B) the capacity of the local electrical utility to

manage, operate, and maintain any project that may be

undertaken; and

``(C) other factors the Secretary of Energy considers to be

appropriate.

``(5) <<NOTE: Deadline.>> Not later than 1 year after the date of

enactment of this subsection, the Secretary of the Interior shall submit

to the Committee on Energy and Natural Resources of the Senate, the

Committee on Resources of the House of Representatives, and the

Committee on Energy and Commerce of the House of Representatives, 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 of the

Interior 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 of the Interior shall give

priority to grants for projects which are likely to--

``(i) have the greatest impact on reducing

future disaster losses; and

[[Page 119 STAT. 682]]

``(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 $6,000,000 for each fiscal year beginning

after the date of the enactment of this paragraph.''.

SEC. 252. <<NOTE: 42 USC 15891.>> PROJECTS ENHANCING INSULAR ENERGY

INDEPENDENCE.

(a) Project Feasibilty Studies.--

(1) In general.--On a request described in paragraph (2),

the Secretary shall conduct a feasibility study of a project to

implement a strategy or project identified in the plans

submitted to Congress pursuant to 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), as having the

potential to--

(A) significantly reduce the dependence of an

insular area on imported fossil fuels; or

(B) provide needed distributed generation to an

insular area.

(2) Request.--The Secretary shall conduct a feasibility

study under paragraph (1) on--

(A) the request of an electric utility located in an

insular area that commits to fund at least 10 percent of

the cost of the study; and

(B) if the electric utility is located in the

Federated States of Micronesia, the Republic of the

Marshall Islands, or the Republic of Palau, written

support for that request by the President or the

Ambassador of the affected freely associated state.

(3) Consultation.--The Secretary shall consult with regional

utility organizations in--

(A) conducting feasibility studies under paragraph

(1); and

(B) determining the feasibility of potential

projects.

(4) Feasibility.--For the purpose of a feasibility study

under paragraph (1), a project shall be determined to be

feasible if the project would significantly reduce the

dependence of an insular area on imported fossil fuels, or

provide needed distributed generation to an insular area, at a

reasonable cost.

(b) Implementation.--

(1) In general.--On a determination by the Secretary (in

consultation with the Secretary of the Interior) that a project

[[Page 119 STAT. 683]]

is feasible under subsection (a) and a commitment by an electric

utility to operate and maintain the project, the Secretary may

provide such technical and financial assistance as the Secretary

determines is appropriate for the implementation of the project.

(2) Regional utility organizations.--In providing assistance

under paragraph (1), the Secretary shall consider providing the

assistance through regional utility organizations.

(c) Authorization of Appropriations.--

(1) In general.--There are authorized to be appropriated to

the Secretary--

(A) $500,000 for each fiscal year for project

feasibility studies under subsection (a); and

(B) $4,000,000 for each fiscal year for project

implementation under subsection (b).

(2) Limitation of funds received by insular areas.--No

insular area may receive, during any 3-year period, more than 20

percent of the total funds made available during that 3-year

period under subparagraphs (A) and (B) of paragraph (1) unless

the Secretary determines that providing funding in excess of

that percentage best advances existing opportunities to meet the

objectives of this section.

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. 6212

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 are 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).

(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)); and

(3) by striking part D (42 U.S.C. 6285).

(c) Technical Amendments.--The table of contents for the Energy

Policy and Conservation Act is amended--

[[Page 119 STAT. 684]]

(1) by inserting after the items relating to part C of title

I the following:

``Part D--Northeast Home Heating Oil Reserve

``Sec. 181. Establishment.

``Sec. 182. Authority.

``Sec. 183. Conditions for release; plan.

``Sec. 184. Northeast Home Heating Oil Reserve Account.

``Sec. 185. Exemptions.'';

(2) by amending the items relating to part C of title II to

read as follows:

``Part C--Summer Fill and Fuel Budgeting Programs

``Sec. 273. Summer fill and fuel budgeting programs.'';

and

(3) by striking the items relating to part D of title II.

(d) Amendment to the Energy Policy and Conservation Act.--Section

183(b)(1) of the Energy Policy and Conservation Act (42 U.S.C.

6250b(b)(1)) is amended by striking ``by more'' and all that follows

through ``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 <<NOTE: 42 USC 6240 note.>> Strategic Petroleum Reserve to

Capacity.--

(1) In general.--The Secretary shall, as expeditiously as

practicable, without incurring excessive cost or appreciably

affecting the price of petroleum products to consumers, acquire

petroleum in quantities 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)), in accordance with the

sections 159 and 160 of that Act (42 U.S.C. 6239, 6240).

(2) Procedures.--

(A) Amendment.--Section 160 of the Energy Policy and

Conservation Act (42 U.S.C. 6240) is amended by

inserting after subsection (b) the following new

subsection:

``(c) Procedures.--The <<NOTE: Public

information. Notice.>> Secretary shall develop, with public notice and

opportunity for comment, procedures consistent with the objectives of

this section to acquire petroleum for the Reserve. Such procedures shall

take into account the need to--

``(1) maximize overall domestic supply of crude oil

(including quantities stored in private sector inventories);

``(2) avoid incurring excessive cost or appreciably

affecting the price of petroleum products to consumers;

``(3) minimize the costs to the Department of the Interior

and the Department of Energy in acquiring such petroleum

products (including foregone revenues to the Treasury when

petroleum products for the Reserve are obtained through the

royalty-in-kind program);

``(4) protect national security;

``(5) avoid adversely affecting current and futures prices,

supplies, and inventories of oil; and

``(6) address other factors that the Secretary determines to

be appropriate.''.

(B) Review of <<NOTE: 42 USC 6240 note.>> requests

for deferrals of scheduled deliveries.--The procedures

developed under section 160(c) of the Energy Policy and

Conservation Act, as added by subparagraph (A), shall

include procedures and criteria

[[Page 119 STAT. 685]]

for the review of requests for the deferrals of

scheduled deliveries.

(C) Deadlines.--The Secretary shall--

(i) propose the procedures required under the

amendment made by subparagraph (A) not later than

120 days after the date of enactment of this Act;

(ii) promulgate the procedures not later than

180 days after the date of enactment of this Act;

and

(iii) comply with the procedures in acquiring

petroleum for the Reserve effective beginning on

the date that is 180 days after the date of

enactment of this Act.

SEC. 302. NATIONAL OILHEAT RESEARCH ALLIANCE.

Section 713 of the Energy Act of 2000 (Public Law 106-469; 42 U.S.C.

6201 note) is amended by striking ``4'' and inserting ``9''.

SEC. 303. <<NOTE: Deadline.>> SITE SELECTION.

Not later than 1 year after the date of enactment of this Act, the

Secretary shall complete a proceeding to select, from sites that the

Secretary has previously studied, sites necessary to enable acquisition

by the Secretary of the full authorized volume of the Strategic

Petroleum Reserve. In such proceeding, the Secretary shall first

consider and give preference to the five sites which the Secretary

previously assessed in the Draft Environmental Impact Statement, DOE/

EIS-0165-D. However, the Secretary in his discretion may select other

sites as proposed by a State where a site has been previously studied by

the Secretary to meet the full authorized volume of the Strategic

Petroleum Reserve.

Subtitle B--Natural Gas

SEC. 311. EXPORTATION OR IMPORTATION OF NATURAL GAS.

(a) Scope of Natural Gas Act.--Section 1(b) of the Natural Gas Act

(15 U.S.C. 717(b)) is amended by inserting ``and to the importation or

exportation of natural gas in foreign commerce and to persons engaged in

such importation or exportation,'' after ``such transportation or

sale,''.

(b) Definition.--Section 2 of the Natural Gas Act (15 U.S.C. 717a)

is amended by adding at the end the following new paragraph:

``(11) `LNG terminal' includes all natural gas facilities

located onshore or in State waters that are used to receive,

unload, load, store, transport, gasify, liquefy, or process

natural gas that is imported to the United States from a foreign

country, exported to a foreign country from the United States,

or transported in interstate commerce by waterborne vessel, but

does not include--

``(A) waterborne vessels used to deliver natural gas

to or from any such facility; or

``(B) any pipeline or storage facility subject to

the jurisdiction of the Commission under section 7.''.

(c) Authorization for Siting, Construction, Expansion, or Operation

of LNG Terminals.--(1) The title for section 3 of the Natural Gas Act

(15 U.S.C. 717b) is amended by inserting ``; lng terminals'' after

``exportation or importation of natural gas''.

[[Page 119 STAT. 686]]

(2) Section 3 of the Natural Gas Act (15 U.S.C. 717b) is amended by

adding at the end the following:

``(d) Except as specifically provided in this Act, nothing in this

Act affects the rights of States under--

``(1) the Coastal Zone Management Act of 1972 (16 U.S.C.

1451 et seq.);

``(2) the Clean Air Act (42 U.S.C. 7401 et seq.); or

``(3) the Federal Water Pollution Control Act (33 U.S.C.

1251 et seq.).

``(e)(1) The Commission shall have the exclusive authority to

approve or deny an application for the siting, construction, expansion,

or operation of an LNG terminal. Except as specifically provided in this

Act, nothing in this Act is intended to affect otherwise applicable law

related to any Federal agency's authorities or responsibilities related

to LNG terminals.

``(2) Upon the filing of any application to site, construct, expand,

or operate an LNG terminal, the Commission shall--

``(A) set the matter for hearing;

``(B) <<NOTE: Notice.>> give reasonable notice of the

hearing to all interested persons, including the State

commission of the State in which the LNG terminal is located

and, if not the same, the Governor-appointed State agency

described in section 3A;

``(C) decide the matter in accordance with this subsection;

and

``(D) issue or deny the appropriate order accordingly.

``(3)(A) Except as provided in subparagraph (B), the Commission may

approve an application described in paragraph (2), in whole or part,

with such modifications and upon such terms and conditions as the

Commission find necessary or appropriate.

``(B) Before January 1, 2015, the Commission shall not--

``(i) deny an application solely on the basis that the

applicant proposes to use the LNG terminal exclusively or

partially for gas that the applicant or an affiliate of the

applicant will supply to the facility; or

``(ii) condition an order on--

``(I) a requirement that the LNG terminal offer

service to customers other than the applicant, or any

affiliate of the applicant, securing the order;

``(II) any regulation of the rates, charges, terms,

or conditions of service of the LNG terminal; or

``(III) a requirement to file with the Commission

schedules or contracts related to the rates, charges,

terms, or conditions of service of the LNG terminal.

``(C) <<NOTE: Termination date.>> Subparagraph (B) shall cease to

have effect on January 1, 2030.

``(4) An order issued for an LNG terminal that also offers service

to customers on an open access basis shall not result in subsidization

of expansion capacity by existing customers, degradation of service to

existing customers, or undue discrimination against existing customers

as to their terms or conditions of service at the facility, as all of

those terms are defined by the Commission.

``(f)(1) In this subsection, the term `military installation'--

``(A) means a base, camp, post, range, station, yard,

center, or homeport facility for any ship or other activity

under the jurisdiction of the Department of Defense, including

any leased facility, that is located within a State, the

District of Columbia, or any territory of the United States; and

[[Page 119 STAT. 687]]

``(B) does not include any facility used primarily for civil

works, rivers and harbors projects, or flood control projects,

as determined by the Secretary of Defense.

``(2) <<NOTE: Memorandum.>> The Commission shall enter into a

memorandum of understanding with the Secretary of Defense for the

purpose of ensuring that the Commission coordinate and consult with the

Secretary of Defense on the siting, construction, expansion, or

operation of liquefied natural gas facilities that may affect an active

military installation.

``(3) The Commission shall obtain the concurrence of the Secretary

of Defense before authorizing the siting, construction, expansion, or

operation of liquefied natural gas facilities affecting the training or

activities of an active military installation.''.

(d) LNG Terminal State and Local Safety Concerns.--After section 3

of the Natural Gas Act (15 U.S.C. 717b) insert the following:

``state and local safety considerations

``Sec. 3A. (a) <<NOTE: Regulations. Deadline. 15 USC 717b-1.>> The

Commission shall promulgate regulations on the National Environmental

Policy Act of 1969 (42 U.S.C. 4321 et seq.) pre-filing process within 60

days after the date of enactment of this section. An applicant shall

comply with pre-filing process required under the National Environmental

Policy Act of 1969 prior to filing an application with the Commission.

The regulations shall require that the pre-filing process commence at

least 6 months prior to the filing of an application for authorization

to construct an LNG terminal and encourage applicants to cooperate with

State and local officials.

``(b) The Governor of a State in which an LNG terminal is proposed

to be located shall designate the appropriate State agency for the

purposes of consulting with the Commission regarding an application

under section 3. The Commission shall consult with such State agency

regarding State and local safety considerations prior to issuing an

order pursuant to section 3. For the purposes of this section, State and

local safety considerations include--

``(1) the kind and use of the facility;

``(2) the existing and projected population and demographic

characteristics of the location;

``(3) the existing and proposed land use near the location;

``(4) the natural and physical aspects of the location;

``(5) the emergency response capabilities near the facility

location; and

``(6) the need to encourage remote siting.

``(c) The State agency may furnish an advisory report on State and

local safety considerations to the Commission with respect to an

application no later than 30 days after the application was filed with

the Commission. Before issuing an order authorizing an applicant to

site, construct, expand, or operate an LNG terminal, the Commission

shall review and respond specifically to the issues raised by the State

agency described in subsection (b) in the advisory

report. <<NOTE: Applicability.>> This subsection shall apply to any

application filed after the date of enactment of the Energy Policy Act

of 2005. A <<NOTE: Deadline. Reports.>> State agency has 30 days after

such date of enactment to file an advisory report related to any

applications pending at the Commission as of such date of enactment.

``(d) The State commission of the State in which an LNG terminal is

located may, after the terminal is operational, conduct

[[Page 119 STAT. 688]]

safety inspections in conformance with Federal regulations and

guidelines with respect to the LNG terminal upon written notice to the

Commission. The State commission may notify the Commission of any

alleged safety violations. <<NOTE: Notification.>> The Commission shall

transmit information regarding such allegations to the appropriate

Federal agency, which shall take appropriate action and notify the State

commission.

``(e)(1) In any order authorizing an LNG terminal the Commission

shall require the LNG terminal operator to develop an Emergency Response

Plan. The Emergency Response Plan shall be prepared in consultation with

the United States Coast Guard and State and local agencies and be

approved by the Commission prior to any final approval to begin

construction. The Plan shall include a cost-sharing plan.

``(2) A cost-sharing plan developed under paragraph (1) shall

include a description of any direct cost reimbursements that the

applicant agrees to provide to any State and local agencies with

responsibility for security and safety--

``(A) at the LNG terminal; and

``(B) in proximity to vessels that serve the facility.''.

SEC. 312. NEW NATURAL GAS STORAGE FACILITIES.

Section 4 of the Natural Gas Act (15 U.S.C. 717c) is amended by

adding at the end the following:

``(f)(1) In exercising its authority under this Act or the Natural

Gas Policy Act of 1978 (15 U.S.C. 3301 et seq.), the Commission may

authorize a natural gas company (or any person that will be a natural

gas company on completion of any proposed construction) to provide

storage and storage-related services at market-based rates for new

storage capacity related to a specific facility placed in service after

the date of enactment of the Energy Policy Act of 2005, notwithstanding

the fact that the company is unable to demonstrate that the company

lacks market power, if the Commission determines that--

``(A) market-based rates are in the public interest and

necessary to encourage the construction of the storage capacity

in the area needing storage services; and

``(B) customers are adequately protected.

``(2) The Commission shall ensure that reasonable terms and

conditions are in place to protect consumers.

``(3) If the Commission authorizes a natural gas company to charge

market-based rates under this subsection, the Commission shall review

periodically whether the market-based rate is just, reasonable, and not

unduly discriminatory or preferential.''.

SEC. 313. PROCESS COORDINATION; HEARINGS; RULES OF PROCEDURE.

(a) In General.--Section 15 of the Natural Gas Act (15 U.S.C. 717n)

is amended--

(1) by striking the section heading and inserting ``process

coordination; hearings; rules of procedure'';

(2) by redesignating subsections (a) and (b) as subsections

(e) and (f), respectively; and

(3) by striking ``sec. 15.'' and inserting the following:

``Sec. 15.(a) In this section, the term `Federal authorization'--

``(1) means any authorization required under Federal law

with respect to an application for authorization under section

[[Page 119 STAT. 689]]

3 or a certificate of public convenience and necessity under

section 7; and

``(2) includes any permits, special use authorizations,

certifications, opinions, or other approvals as may be required

under Federal law with respect to an application for

authorization under section 3 or a certificate of public

convenience and necessity under section 7.

``(b) Designation as Lead Agency.--

``(1) In general.--The Commission shall act as the lead

agency for the purposes of coordinating all applicable Federal

authorizations and for the purposes of complying with the

National Environmental Policy Act of 1969 (42 U.S.C. 4321 et

seq.).

``(2) Other agencies.--Each Federal and State agency

considering an aspect of an application for Federal

authorization shall cooperate with the Commission and comply

with the deadlines established by the Commission.

``(c) Schedule.--

``(1) Commission authority to set schedule.--The Commission

shall establish a schedule for all Federal authorizations. In

establishing the schedule, the Commission shall--

``(A) ensure expeditious completion of all such

proceedings; and

``(B) comply with applicable schedules established

by Federal law.

``(2) Failure to meet schedule.--If a Federal or State

administrative agency does not complete a proceeding for an

approval that is required for a Federal authorization in

accordance with the schedule established by the Commission, the

applicant may pursue remedies under section 19(d).

``(d) Consolidated Record.--The Commission shall, with the

cooperation of Federal and State administrative agencies and officials,

maintain a complete consolidated record of all decisions made or actions

taken by the Commission or by a Federal administrative agency or officer

(or State administrative agency or officer acting under delegated

Federal authority) with respect to any Federal authorization. Such

record shall be the record for--

``(1) appeals or reviews under the Coastal Zone Management

Act of 1972 (16 U.S.C. 1451 et seq.), provided that the record

may be supplemented as expressly provided pursuant to section

319 of that Act; or

``(2) judicial review under section 19(d) of decisions made

or actions taken of Federal and State administrative agencies

and officials, provided that, if the Court determines that the

record does not contain sufficient information, the Court may

remand the proceeding to the Commission for further development

of the consolidated record.''.

(b) Judicial Review.--Section 19 of the Natural Gas Act (15 U.S.C.

717r) is amended by adding at the end the following:

``(d) Judicial Review.--

``(1) In general.--The United States Court of Appeals for

the circuit in which a facility subject to section 3 or section

7 is proposed to be constructed, expanded, or operated shall

have original and exclusive jurisdiction over any civil action

for the review of an order or action of a Federal agency (other

than the Commission) or State administrative agency acting

pursuant to Federal law to issue, condition, or deny any permit,

[[Page 119 STAT. 690]]

license, concurrence, or approval (hereinafter collectively

referred to as `permit') required under Federal law, other than

the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et

seq.).

``(2) Agency delay.--The United States Court of Appeals for

the District of Columbia shall have original and exclusive

jurisdiction over any civil action for the review of an alleged

failure to act by a Federal agency (other than the Commission)

or State administrative agency acting pursuant to Federal law to

issue, condition, or deny any permit required under Federal law,

other than the Coastal Zone Management Act of 1972 (16 U.S.C.

1451 et seq.), for a facility subject to section 3 or section 7.

The failure of an agency to take action on a permit required

under Federal law, other than the Coastal Zone Management Act of

1972, in accordance with the Commission schedule established

pursuant to section 15(c) shall be considered inconsistent with

Federal law for the purposes of paragraph (3).

``(3) Court action.--If the Court finds that such order or

action is inconsistent with the Federal law governing such

permit and would prevent the construction, expansion, or

operation of the facility subject to section 3 or section 7, the

Court shall remand the proceeding to the agency to take

appropriate action consistent with the order of the Court. If

the Court remands the order or action to the Federal or State

agency, the Court shall set a reasonable schedule and deadline

for the agency to act on remand.

``(4) Commission action.--For any action described in this

subsection, the Commission shall file with the Court the

consolidated record of such order or action to which the appeal

hereunder relates.

``(5) Expedited review.--The Court shall set any action

brought under this subsection for expedited consideration.''.

SEC. 314. PENALTIES.

(a) Criminal Penalties.--

(1) Natural gas act.--Section 21 of the Natural Gas Act (15

U.S.C. 717t) is amended--

(A) in subsection (a)--

(i) by striking ``$5,000'' and inserting

``$1,000,000''; and

(ii) by striking ``two years'' and inserting

``5 years''; and

(B) in subsection (b), by striking ``$500'' and

inserting ``$50,000''.

(2) Natural gas policy act of 1978.--Section 504(c) of the

Natural Gas Policy Act of 1978 (15 U.S.C. 3414(c)) is amended--

(A) in paragraph (1)--

(i) in subparagraph (A), by striking

``$5,000'' and inserting ``$1,000,000''; and

(ii) in subparagraph (B), by striking ``two

years'' and inserting ``5 years''; and

(B) in paragraph (2), by striking ``$500 for each

violation'' and inserting ``$50,000 for each day on

which the offense occurs''.

(b) Civil Penalties.--

[[Page 119 STAT. 691]]

(1) Natural gas act.--The Natural Gas Act (15 U.S.C. 717 et

seq.) is amended--

(A) <<NOTE: 15 USC 717u-717w.>> by redesignating

sections 22 through 24 as sections 24 through 26,

respectively; and

(B) by inserting after section 21 (15 U.S.C. 717t)

the following:

``civil penalty authority

``Sec. 22. (a) <<NOTE: 15 USC 717t-1.>> Any person that violates

this Act, or any rule, regulation, restriction, condition, or order made

or imposed by the Commission under authority of this Act, shall be

subject to a civil penalty of not more than $1,000,000 per day per

violation for as long as the violation continues.

``(b) The penalty shall be assessed by the Commission after notice

and opportunity for public hearing.

``(c) In determining the amount of a proposed penalty, the

Commission shall take into consideration the nature and seriousness of

the violation and the efforts to remedy the violation.''.

(2) Natural gas policy act of 1978.--Section 504(b)(6)(A) of

the Natural Gas Policy Act of 1978 (15 U.S.C. 3414(b)(6)(A)) is

amended--

(A) in clause (i), by striking ``$5,000'' and

inserting ``$1,000,000''; and

(B) in clause (ii), by striking ``$25,000'' and

inserting ``$1,000,000''.

SEC. 315. MARKET MANIPULATION.

The Natural Gas Act is amended by inserting after section 4 (15

U.S.C. 717c) the following:

``prohibition on market manipulation

``Sec. 4A. <<NOTE: 15 USC 717c-1.>> It shall be unlawful for any

entity, directly or indirectly, to use or employ, in connection with the

purchase or sale of natural gas or the purchase or sale of

transportation services subject to the jurisdiction of the Commission,

any manipulative or deceptive device or contrivance (as those terms are

used in section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C.

78j(b))) in contravention of such rules and regulations as the

Commission may prescribe as necessary in the public interest or for the

protection of natural gas ratepayers. Nothing in this section shall be

construed to create a private right of action.''.

SEC. 316. NATURAL GAS MARKET TRANSPARENCY RULES.

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

after section 22 the following:

``natural gas market transparency rules

``Sec. 23. (a)(1) <<NOTE: 15 USC 717t-2.>> The Commission is

directed to facilitate price transparency in markets for the sale or

transportation of physical natural gas in interstate commerce, having

due regard for the public interest, the integrity of those markets, fair

competition, and the protection of consumers.

``(2) The Commission may prescribe such rules as the Commission

determines necessary and appropriate to carry out the purposes of this

section. The rules shall provide for the dissemination, on a timely

basis, of information about the availability and prices

[[Page 119 STAT. 692]]

of natural gas sold at wholesale and in interstate commerce to the

Commission, State commissions, buyers and sellers of wholesale natural

gas, and the public.

``(3) The Commission may--

``(A) obtain the information described in paragraph (2) from

any market participant; and

``(B) rely on entities other than the Commission to receive

and make public the information, subject to the disclosure rules

in subsection (b).

``(4) In carrying out this section, the Commission shall consider

the degree of price transparency provided by existing price publishers

and providers of trade processing services, and shall rely on such

publishers and services to the maximum extent possible. The Commission

may establish an electronic information system if it determines that

existing price publications are not adequately providing price discovery

or market transparency.

``(b)(1) Rules described in subsection (a)(2), if adopted, shall

exempt from disclosure information the Commission determines would, if

disclosed, be detrimental to the operation of an effective market or

jeopardize system security.

``(2) In determining the information to be made available under this

section and the time to make the information available, the Commission

shall seek to ensure that consumers and competitive markets are

protected from the adverse effects of potential collusion or other

anticompetitive behaviors that can be facilitated by untimely public

disclosure of transaction-specific information.

``(c)(1) <<NOTE: Deadline. Memorandum.>> Within 180 days of

enactment of this section, the Commission shall conclude a memorandum of

understanding with the Commodity Futures Trading Commission relating to

information sharing, which shall include, among other things, provisions

ensuring that information requests to markets within the respective

jurisdiction of each agency are properly coordinated to minimize

duplicative information requests, and provisions regarding the treatment

of proprietary trading information.

``(2) Nothing in this section may be construed to limit or affect

the exclusive jurisdiction of the Commodity Futures Trading Commission

under the Commodity Exchange Act (7 U.S.C. 1 et seq.).

``(d)(1) The Commission shall not condition access to interstate

pipeline transportation on the reporting requirements of this section.

``(2) The Commission shall not require natural gas producers,

processors, or users who have a de minimis market presence to comply

with the reporting requirements of this section.

``(e)(1) Except as provided in paragraph (2), no person shall be

subject to any civil penalty under this section with respect to any

violation occurring more than 3 years before the date on which the

person is provided notice of the proposed penalty under section 22(b).

``(2) Paragraph (1) shall not apply in any case in which the

Commission finds that a seller that has entered into a contract for the

transportation or sale of natural gas subject to the jurisdiction of the

Commission has engaged in fraudulent market manipulation activities

materially affecting the contract in violation of section 4A.''.

[[Page 119 STAT. 693]]

SEC. 317. FEDERAL-STATE LIQUEFIED NATURAL GAS FORUMS.

(a) In General.--Not <<NOTE: Deadline.>> later than 1 year after the

date of enactment of this Act, the Secretary, in cooperation and

consultation with the Secretary of Transportation, the Secretary of

Homeland Security, the Federal Energy Regulatory Commission, and the

Governors of the Coastal States, shall convene not less than 3 forums on

liquefied natural gas.

(b) Requirements.--The forums shall--

(1) be located in areas where liquefied natural gas

facilities are under consideration;

(2) be designed to foster dialogue among Federal officials,

State and local officials, the general public, independent

experts, and industry representatives; and

(3) at a minimum, provide an opportunity for public

education and dialogue on--

(A) the role of liquefied natural gas in meeting

current and future United States energy supply

requirements and demand, in the context of the full

range of energy supply options;

(B) the Federal and State siting and permitting

processes;

(C) the potential risks and rewards associated with

importing liquefied natural gas;

(D) the Federal safety and environmental

requirements (including regulations) applicable to

liquefied natural gas;

(E) prevention, mitigation, and response strategies

for liquefied natural gas hazards; and

(F) additional issues as appropriate.

(c) Purpose.--The purpose of the forums shall be to identify and

develop best practices for addressing the issues and challenges

associated with liquefied natural gas imports, building on existing

cooperative efforts.

(d) Authorization of Appropriations.--There are authorized to be

appropriated such sums as are necessary to carry out this section.

SEC. 318. PROHIBITION OF TRADING AND SERVING BY CERTAIN INDIVIDUALS.

Section 20 of the Natural Gas Act (15 U.S.C. 717s) is amended by

adding at the end the following:

``(d) In any proceedings under subsection (a), the court may

prohibit, conditionally or unconditionally, and permanently or for such

period of time as the court determines, any individual who is engaged or

has engaged in practices constituting a violation of section 4A

(including related rules and regulations) from--

``(1) acting as an officer or director of a natural gas

company; or

``(2) engaging in the business of--

``(A) the purchasing or selling of natural gas; or

``(B) the purchasing or selling of transmission

services subject to the jurisdiction of the

Commission.''.

[[Page 119 STAT. 694]]

Subtitle C--Production

SEC. 321. 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) Natural Gas Defined.--Section 3(13) of the Deepwater Port Act of

1974 (33 U.S.C. 1502(13)) is amended by adding at the end before the

semicolon the following: ``, natural gas liquids, liquefied petroleum

gas, and condensate recovered from natural gas''.

SEC. 322. 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 (other than diesel fuels) pursuant

to hydraulic fracturing operations related to oil,

gas, or geothermal production activities.''.

SEC. 323. 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.''.

Subtitle D--Naval Petroleum Reserve

SEC. 331. <<NOTE: 10 USC 7420 note.>> TRANSFER OF ADMINISTRATIVE

JURISDICTION AND ENVIRONMENTAL REMEDIATION, NAVAL PETROLEUM

RESERVE NUMBERED 2, KERN COUNTY, CALIFORNIA.

(a) Administration <<NOTE: Effective date.>> Jurisdiction Transfer

to Secretary of the Interior.--Effective on the date of the enactment of

this Act, administrative jurisdiction and control over all public domain

lands included within Naval Petroleum Reserve Numbered 2 located in Kern

County, California (other than the lands specified in subsection (b)),

are transferred from the Secretary to the Secretary of the Interior for

management, subject to subsection (c), in accordance with the laws

governing management of the public lands, and the regulations

promulgated under such laws, including the

[[Page 119 STAT. 695]]

Mineral Leasing Act (30 U.S.C. 181 et seq.) and the Federal Land Policy

and Management Act of 1976 (43 U.S.C. 1701 et seq.).

(b) Exclusion of Certain Reserve Lands.--The transfer of

administrative jurisdiction made by subsection (a) does not include the

following lands:

(1) That portion of Naval Petroleum Reserve Numbered 2

authorized for disposal under section 3403(a) of the Strom

Thurmond National Defense Authorization Act for Fiscal Year 1999

(Public Law 105-261; 10 U.S.C. 7420 note).

(2) That portion of the surface estate of Naval Petroleum

Reserve Numbered 2 conveyed to the City of Taft, California, by

section 333.

(c) Purpose of Transfer.--

(1) Production of hydrocarbon resources.--Notwithstanding

any other provision of law, the principal purpose of the lands

subject to transfer under subsection (a) is the production of

hydrocarbon resources, and the Secretary of the Interior shall

manage the lands in a fashion consistent with this purpose. In

managing the lands, the Secretary of the Interior shall regulate

operations to prevent unnecessary degradation and to provide for

ultimate economic recovery of the resources.

(2) Disposal authority and surface use.--The Secretary of

the Interior may make disposals of lands subject to transfer

under subsection (a), or allow commercial or non-profit surface

use of such lands, not to exceed 10 acres each, so long as the

disposals or surface uses do not materially interfere with the

ultimate economic recovery of the hydrocarbon resources of such

lands. All revenues received from the disposal of lands under

this paragraph or from allowing the surface use of such lands

shall be deposited in the Naval Petroleum Reserve Numbered 2

Lease Revenue Account established by section 332.

(d) Conforming Amendment.--Section 3403 of the Strom Thurmond

National Defense Authorization Act for Fiscal Year 1999 (Public Law 105-

261; 10 U.S.C. 7420 note) is amended by striking subsection (b).

SEC. 332. <<NOTE: 10 USC 7420 note.>> NAVAL PETROLEUM RESERVE NUMBERED 2

LEASE REVENUE ACCOUNT.

(a) Establishment.--There is established in the Treasury a special

deposit account to be known as the ``Naval Petroleum Reserve Numbered 2

Lease Revenue Account'' (in this section referred to as the ``lease

revenue account''). The lease revenue account is a revolving account,

and amounts in the lease revenue account shall be available to the

Secretary of the Interior, without further appropriation, for the

purposes specified in subsection (b).

(b) Purposes of Account.--

(1) Environmental-related costs.--The lease revenue account

shall be the sole and exclusive source of funds to pay for any

and all costs and expenses incurred by the United States for--

(A) environmental investigations (other than any

environmental investigations that were conducted by the

Secretary before the transfer of the Naval Petroleum

Reserve Numbered 2 lands under section 331),

remediation, compliance actions, response, waste

management, impediments, fines or penalties, or any

other costs or expenses

[[Page 119 STAT. 696]]

of any kind arising from, or relating to, conditions

existing on or below the Naval Petroleum Reserve

Numbered 2 lands, or activities occurring or having

occurred on such lands, on or before the date of the

transfer of such lands; and

(B) any future remediation necessitated as a result

of pre-transfer and leasing activities on such lands.

(2) Transition costs.--The lease revenue account shall also

be available for use by the Secretary of the Interior to pay for

transition costs incurred by the Department of the Interior

associated with the transfer and leasing of the Naval Petroleum

Reserve Numbered 2 lands.

(c) Funding.--The lease revenue account shall consist of the

following:

(1) Notwithstanding any other provision of law, for a period

of three years after the date of the transfer of the Naval

Petroleum Reserve Numbered 2 lands under section 331, the sum of

$500,000 per year of revenue from leases entered into before

that date, including bonuses, rents, royalties, and interest

charges collected pursuant to the Federal Oil and Gas Royalty

Management Act of 1982 (30 U.S.C. 1701 et. seq.), derived from

the Naval Petroleum Reserve Numbered 2 lands, shall be deposited

into the lease revenue account.

(2) Subject to subsection (d), all revenues derived from

leases on Naval Petroleum Reserve Numbered 2 lands issued on or

after the date of the transfer of such lands, including bonuses,

rents, royalties, and interest charges collected pursuant to the

Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C.

1701 et seq.), shall be deposited into the lease revenue

account.

(d) Limitation.--Funds in the lease revenue account shall not exceed

$3,000,000 at any one time. Whenever funds in the lease revenue account

are obligated or expended so that the balance in the account falls below

that amount, lease revenues referred to in subsection (c)(2) shall be

deposited in the account to maintain a balance of $3,000,000.

(e) Termination of Account.--At <<NOTE: Certification.>> such time

as the Secretary of the Interior certifies that remediation of all

environmental contamination of Naval Petroleum Reserve Numbered 2 lands

in existence as of the date of the transfer of such lands under section

331 has been successfully completed, that all costs and expenses of

investigation, remediation, compliance actions, response, waste

management, impediments, fines, or penalties associated with

environmental contamination of such lands in existence as of the date of

the transfer have been paid in full, and that the transition costs of

the Department of the Interior referred to in subsection (b)(2) have

been paid in full, the lease revenue account shall be terminated and any

remaining funds shall be distributed in accordance with subsection (f).

(f) Distribution of <<NOTE: Applicability.>> Remaining Funds.--

Section 35 of the Mineral Leasing Act (30 U.S.C. 191) shall apply to the

payment and distribution of all funds remaining in the lease revenue

account upon its termination under subsection (e).

[[Page 119 STAT. 697]]

SEC. 333. <<NOTE: 10 USC 7420 note.>> LAND CONVEYANCE, PORTION OF NAVAL

PETROLEUM RESERVE NUMBERED 2, TO CITY OF TAFT, CALIFORNIA.

(a) Conveyance.--Effective <<NOTE: Effective date.>> on the date of

the enactment of this Act, there is conveyed to the City of Taft,

California (in this section referred to as the ``City''), all surface

right, title, and interest of the United States in and to a parcel of

real property consisting of approximately 220 acres located in the NE\1/

4\, the NE\1/4\ of the NW\1/4\, and the N\1/2\ of the SE\1/4\ of the

NW\1/4\ of section 18, township 32 south, range 24 east, Mount Diablo

meridian, Kern County, California.

(b) Consideration.--The conveyance under subsection (a) is made

without the payment of consideration by the City.

(c) Treatment of Existing Rights.--The conveyance under subsection

(a) is subject to valid existing rights, including Federal oil and gas

lease SAC-019577.

(d) Treatment of Minerals.--All coal, oil, gas, and other minerals

within the lands conveyed under subsection (a) are reserved to the

United States, except that the United States and its lessees, licensees,

permittees, or assignees shall have no right of surface use or occupancy

of the lands. Nothing in this subsection shall be construed to require

the United States or its lessees, licensees, permittees, or assignees to

support the surface of the conveyed lands.

(e) Indemnify and Hold Harmless.--The City shall indemnify, defend,

and hold harmless the United States for, from, and against, and the City

shall assume all responsibility for, any and all liability of any kind

or nature, including all loss, cost, expense, or damage, arising from

the City's use or occupancy of, or operations on, the land conveyed

under subsection (a), whether such use or occupancy of, or operations

on, occurred before or occur after the date of the enactment of this

Act.

(f) Instrument of Conveyance.--

Not <<NOTE: Deadline. Records.>> later than 1 year after the date of the

enactment of this Act, the Secretary shall execute, file, and cause to

be recorded in the appropriate office a deed or other appropriate

instrument documenting the conveyance made by this section.

SEC. 334. <<NOTE: Effective date. 10 USC 7420 note.>> REVOCATION OF LAND

WITHDRAWAL.

Effective on the date of the enactment of this Act, the Executive

Order of December 13, 1912, which created Naval Petroleum Reserve

Numbered 2, is revoked in its entirety.

Subtitle E--Production Incentives

SEC. 341. <<NOTE: 42 USC 15901.>> DEFINITION OF SECRETARY.

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

Interior.

SEC. 342. <<NOTE: 42 USC 15902.>> 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--

(1) section 36 of the Mineral Leasing Act (30 U.S.C. 192);

(2) section 27 of the Outer Continental Shelf Lands Act (43

U.S.C. 1353); or

[[Page 119 STAT. 698]]

(3) 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-kind. If the Secretary

makes such a demand, the following provisions apply to the 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 royalty obligation of the lessee 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) 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.

(B) Requirement.--Royalty production shall be placed

in marketable condition by the lessee at no cost to the

United States.

(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 (referred to in this paragraph 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

royalty in-kind sales, without fiscal year limitation,

to pay salaries and other administrative costs directly

related to the royalty in-kind program.

(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--

[[Page 119 STAT. 699]]

(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, 2006, the

Secretary shall submit to Congress a report that addresses--

(A) actions taken to develop business 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 2006 through 2015 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 1 or more 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 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 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.

[[Page 119 STAT. 700]]

(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;

(2) may delegate management of any portion of the Federal

royalty in-kind program to the State except as otherwise

prohibited by Federal law; and

(3) 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 the

revenues 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 those 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 those 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 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 submit a report to

Congress--

(A) assessing the effectiveness of granting

preferences specified in paragraph (1); and

(B) providing a specific recommendation on the

continuation of authority to grant preferences.

SEC. 343. <<NOTE: 42 USC 15903.>> 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 90,000,000

British thermal units of gas per

[[Page 119 STAT. 701]]

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 standards or requirements, the Secretary shall reduce the

royalty rate on--

(1) oil production from marginal properties as prescribed in

subsection (c) if the spot price of West Texas Intermediate

crude oil at Cushing, Oklahoma, is, on average, less than $15

per barrel (adjusted in accordance with the Consumer Price Index

for all-urban consumers, United States city average, as

published by the Bureau of Labor Statistics) for 90 consecutive

trading days; and

(2) gas production from marginal properties as prescribed in

subsection (c) if the spot price of natural gas delivered at

Henry Hub, Louisiana, is, on average, less than $2.00 per

million British thermal units (adjusted in accordance with the

Consumer Price Index for all-urban consumers, United States city

average, as published by the Bureau of Labor Statistics) 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 (c)(1) 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 (adjusted in accordance with the Consumer Price

Index for all-urban consumers, United States city

average, as published by the Bureau of Labor Statistics)

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 (adjusted in accordance with the

Consumer Price Index for all-urban consumers, United

States city average, as published by the Bureau of Labor

Statistics) for 90 consecutive trading days; or

(B) the property no longer qualifies as a marginal

property.

[[Page 119 STAT. 702]]

(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.--Unless

a <<NOTE: Deadline.>> determination is made under paragraph (3),

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) Report.--To the extent the Secretary determines that it

is not practicable to issue the regulations referred to in

paragraph (2), the Secretary shall provide a report to Congress

explaining such determination by not later than 18 months after

the date of enactment of this Act.

(4) Considerations.--In issuing 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, as determined by the

Secretary.

(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. 344. <<NOTE: 42 USC 15904.>> INCENTIVES FOR NATURAL GAS PRODUCTION

FROM DEEP WELLS IN THE SHALLOW WATERS OF THE GULF OF MEXICO.

(a) Royalty Incentive Regulations for Ultra Deep Gas Wells.--

(1) In general.--Not <<NOTE: Deadline.>> 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

granting royalty relief suspension volumes of not less than 35

billion cubic feet with respect to the production of natural gas

from ultra deep wells on leases issued in shallow waters less

than 400 meters deep located in the Gulf of Mexico wholly west

of 87 degrees, 30 minutes west longitude. <<NOTE: Effective

date. Notices. Federal Register, publication.>> Regulations

issued under this subsection shall be retroactive to the date

that the notice of proposed rulemaking is published in the

Federal Register.

[[Page 119 STAT. 703]]

(2) Suspension volumes.--The Secretary may grant suspension

volumes of not less than 35 billion cubic feet in any case in

which--

(A) the ultra deep well is a sidetrack; or

(B) the lease has previously produced from wells

with a perforated interval the top of which is at least

15,000 feet true vertical depth below the datum at mean

sea level.

(3) Definitions.--In this subsection:

(A) Ultra deep well.--The term ``ultra deep well''

means a well drilled with a perforated interval, the top

of which is at least 20,000 true vertical depth below

the datum at mean sea level.

(B) Sidetrack.--

(i) In general.--The term ``sidetrack'' means

a well resulting from drilling an additional hole

to a new objective bottom-hole location by leaving

a previously drilled hole.

(ii) Inclusion.--The term ``sidetrack''

includes--

(I) drilling a well from a platform

slot reclaimed from a previously drilled

well;

(II) re-entering and deepening a

previously drilled well; and

(III) a bypass from a sidetrack,

including drilling around material

blocking a hole or drilling to

straighten a crooked hole.

(b) Royalty <<NOTE: Deadline.>> Incentive Regulations for Deep Gas

Wells.--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 granting royalty relief

suspension volumes with respect to production of natural gas from deep

wells on leases issued in waters more than 200 meters but less than 400

meters deep located in the Gulf of Mexico wholly west of 87 degrees, 30

minutes west longitude. The suspension volumes for deep wells within 200

to 400 meters of water depth shall be calculated using the same

methodology used to calculate the suspension volumes for deep wells in

the shallower waters of the Gulf of Mexico, and in no case shall the

suspension volumes for deep wells within 200 to 400 meters of water

depth be lower than those for deep wells in shallower

waters. <<NOTE: Effective date. Notices. Federal

Register, publication.>> Regulations issued under this subsection shall

be retroactive to the date that the notice of proposed rulemaking is

published in the Federal Register.

(c) Limitations.--The Secretary may place limitations on the royalty

relief granted under this section based on market price. The royalty

relief granted under this section shall not apply to a lease for which

deep water royalty relief is available.

SEC. 345. <<NOTE: 42 USC 15905.>> ROYALTY RELIEF FOR DEEP WATER

PRODUCTION.

(a) In General.--Subject to <<NOTE: Effective date.>> subsections

(b) and (c), for each tract 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

[[Page 119 STAT. 704]]

Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) occurring during

the 5-year period beginning on the date of enactment of this Act shall

use the bidding system authorized under section 8(a)(1)(H) of the Outer

Continental Shelf Lands Act (43 U.S.C. 1337(a)(1)(H)).

(b) Suspension of Royalties.--The suspension of royalties under

subsection (a) shall be established 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;

(3) 12,000,000 barrels of oil equivalent for each lease in

water depths of 1,600 to 2,000 meters; and

(4) 16,000,000 barrels of oil equivalent for each lease in

water depths greater than 2,000 meters.

(c) Limitation.--The Secretary may place limitations on royalty

relief granted under this section based on market price.

SEC. 346. 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. 347. 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 <<NOTE: 42 USC 6506a.>> 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)(2)) 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.--The Secretary shall conduct an expeditious

program of competitive leasing of oil and gas in the Reserve in

accordance with this Act.

``(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'';

[[Page 119 STAT. 705]]

(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) <<NOTE: Deadlines.>> Terms.--

``(1) In general.--Each lease shall be issued for an initial

period of not more than 10 years, and shall be extended for so

long thereafter as oil or gas is produced from the lease in

paying quantities, oil or gas is capable of being produced in

paying quantities, or drilling or reworking operations, as

approved by the Secretary, are conducted on the leased land.

``(2) Renewal of leases with discoveries.--At the end of the

primary term of a lease the Secretary shall renew for an

additional 10-year term a lease that does not meet the

requirements of paragraph (1) if the lessee submits to the

Secretary an application for renewal not later than 60 days

before the expiration of the primary lease and the lessee

certifies, and the Secretary agrees, that hydrocarbon resources

were discovered on one or more wells drilled on the leased land

in such quantities that a prudent operator would hold the lease

for potential future development.

``(3) Renewal of leases without discoveries.--At the end of

the primary term of a lease the Secretary shall renew for an

additional 10-year term a lease that does not meet the

requirements of paragraph (1) if the lessee submits to the

Secretary an application for renewal not later than 60 days

before the expiration of the primary lease and pays the

Secretary a renewal fee of $100 per acre of leased land, and--

``(A) the lessee provides evidence, and the

Secretary agrees that, the lessee has diligently pursued

exploration that warrants continuation with the intent

of continued exploration or future potential development

of the leased land; or

``(B) all or part of the lease--

``(i) is part of a unit agreement covering a

lease described in subparagraph (A); and

``(ii) has not been previously contracted out

of the unit.

``(4) Applicability.--This subsection applies to a lease

that is in effect on or after the date of enactment of the

Energy Policy Act of 2005.

``(5) Expiration for <<NOTE: Deadline.>> failure to

produce.--Notwithstanding any other provision of this Act, if no

oil or gas is produced from a lease within 30 years after the

date of the issuance of the lease the lease shall expire.

``(6) Termination.--No lease issued under this section

covering lands capable of producing oil or gas in paying

quantities shall expire because the lessee fails to produce the

same due to circumstances beyond the control of the lessee.

``(j) Unit Agreements.--

[[Page 119 STAT. 706]]

``(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. In

determining the public interest, the Secretary should consider,

among other things, the extent to which the unit agreement will

minimize the impact to surface resources of the leases and will

facilitate consolidation of facilities.

``(2) Consultation.--In making a determination under

paragraph (1), the Secretary shall consult with and provide

opportunities for participation by the State of Alaska or a

Regional Corporation (as defined in section 3 of the Alaska

Native Claims Settlement Act (43 U.S.C. 1602)) with respect to

the creation or expansion of units that include acreage in which

the State of Alaska or the Regional Corporation has an interest

in the mineral estate.

``(3) Production allocation methodology.--(A) The Secretary

may use a production allocation methodology for each

participating area within a unit that includes solely Federal

land in the Reserve.

``(B) The Secretary shall use a production allocation

methodology for each participating area within a unit that

includes Federal land in the Reserve and non-Federal land based

on the characteristics of each specific oil or gas pool, field,

reservoir, or like area to take into account reservoir

heterogeneity and area variation in reservoir producibility

across diverse leasehold interests. The implementation of the

foregoing production allocation methodology shall be controlled

by agreement among the affected lessors and lessees.

``(4) Benefit of operations.--Drilling, production,'';

(9) by striking ``When separate'' and inserting the

following:

``(5) 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), whenever (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 land that was made available for acquisition by

the Regional Corporation under the provisions of section

1431(o) of the Alaska National

[[Page 119 STAT. 707]]

Interest Lands Conservation Act (16 U.S.C. 3101 et

seq.)) in the judgment of the Secretary it is necessary

to do so to promote development, or whenever in the

judgment of the Secretary the leases cannot be

successfully operated under the terms provided therein.

``(B) Applicability.--This paragraph applies to a

lease that is in effect on or after the date of

enactment of the Energy Policy Act of 2005.'';

(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 subparagraphs (A), (B), and (C) as

paragraphs (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 ``section 104(b) of the Naval Petroleum

Reserves Production Act of 1976 (90 Stat. 304; 42 U.S.C. 6504)''

and inserting ``section 104(a)''; and

(20) by adding at the end the following:

``(o) Regulations.--As soon as practicable after the date of

enactment of the Energy Policy Act of 2005, the Secretary shall issue

regulations to implement this section.

``(p) Waiver of Administration for Conveyed Lands.--

``(1) In general.--Notwithstanding section 14(g) of the

Alaska Native Claims Settlement Act (43 U.S.C. 1613(g))--

``(A) the Secretary of the Interior shall waive

administration of any oil and gas lease to the extent

that the lease covers any land in the Reserve in which

all of the subsurface estate is conveyed to the Arctic

Slope Regional Corporation (referred to in this

subsection as the `Corporation');

``(B)(i) in a case in which a conveyance of a

subsurface estate described in subparagraph (A) does not

include all of the land covered by the oil and gas

lease, the person that owns the subsurface estate in any

particular portion of the land covered by the lease

shall be entitled to all of the revenues reserved under

the lease as to that portion, including, without

limitation, all the royalty payable with respect to oil

or gas produced from or allocated to that portion;

``(ii) in a case described in clause (i), the

Secretary of the Interior shall--

``(I) segregate the lease into 2

leases, 1 of which shall cover only the

subsurface estate conveyed to the

Corporation; and

[[Page 119 STAT. 708]]

``(II) waive administration of the

lease that covers the subsurface estate

conveyed to the Corporation; and

``(iii) the segregation of the lease described

in clause (ii)(I) has no effect on the obligations

of the lessee under either of the resulting

leases, including obligations relating to

operations, production, or other circumstances

(other than payment of rentals or royalties); and

``(C) nothing in this subsection limits the

authority of the Secretary of the Interior to manage the

federally-owned surface estate within the Reserve.''.

(c) Conforming Amendments.--Section 104 of the Naval Petroleum

Reserves Production Act of 1976 (42 U.S.C. 6504) is amended--

(1) by striking subsection (a); and

(2) by redesignating subsections (b) through (d) as

subsections (a) through (c), respectively.

SEC. 348. <<NOTE: Alaska. 42 USC 15906.>> NORTH SLOPE SCIENCE

INITIATIVE.

(a) Establishment.--

(1) In general.--The Secretary of the Interior shall

establish a long-term initiative to be known as the ``North

Slope Science Initiative'' (referred to in this section as the

``Initiative'').

(2) Purpose.--The purpose of the Initiative shall be to

implement efforts to coordinate collection of scientific data

that will provide a better understanding of the terrestrial,

aquatic, and marine ecosystems of the North Slope of Alaska.

(b) Objectives.--To ensure that the Initiative is conducted through

a comprehensive science strategy and implementation plan, the Initiative

shall, at a minimum--

(1) identify and prioritize information needs for inventory,

monitoring, and research activities to address the individual

and cumulative effects of past, ongoing, and anticipated

development activities and environmental change on the North

Slope;

(2) develop an understanding of information needs for

regulatory and land management agencies, local governments, and

the public;

(3) focus on prioritization of pressing natural resource

management and ecosystem information needs, coordination, and

cooperation among agencies and organizations;

(4) coordinate ongoing and future inventory, monitoring, and

research activities to minimize duplication of effort, share

financial resources and expertise, and assure the collection of

quality information;

(5) identify priority needs not addressed by agency science

programs in effect on the date of enactment of this Act and

develop a funding strategy to meet those needs;

(6) provide a consistent approach to high caliber science,

including inventory, monitoring, and research;

(7) maintain and improve public and agency access to--

(A) accumulated and ongoing research; and

(B) contemporary and traditional local knowledge;

and

[[Page 119 STAT. 709]]

(8) ensure through appropriate peer review that the science

conducted by participating agencies and organizations is of the

highest technical quality.

(c) Membership.--

(1) In general.--To ensure comprehensive collection of

scientific data, in carrying out the Initiative, the Secretary

shall consult and coordinate with Federal, State, and local

agencies that have responsibilities for land and resource

management across the North Slope.

(2) Cooperative agreements.--The Secretary shall enter into

cooperative agreements with the State of Alaska, the North Slope

Borough, the Arctic Slope Regional Corporation, and other

Federal agencies as appropriate to coordinate efforts, share

resources, and fund projects under this section.

(d) Science <<NOTE: Establishment.>> Technical Advisory Panel.--

(1) In general.--The Initiative shall include a panel to

provide advice on proposed inventory, monitoring, and research

functions.

(2) Membership.--The panel described in paragraph (1) shall

consist of a representative group of not more than 15 scientists

and technical experts from diverse professions and interests,

including the oil and gas industry, subsistence users, Native

Alaskan entities, conservation organizations, wildlife

management organizations, and academia, as determined by the

Secretary.

(e) Reports.--Not later than 3 years after the date of enactment of

this section and each year thereafter, the Secretary shall publish a

report that describes the studies and findings of the Initiative.

(f) Authorization of Appropriations.--There are authorized to be

appropriated such sums as are necessary to carry out this section.

SEC. 349. <<NOTE: 42 USC 15907.>> ORPHANED, ABANDONED, OR IDLED WELLS ON

FEDERAL LAND.

(a) In General.--The <<NOTE: Deadline.>> 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--

[[Page 119 STAT. 710]]

(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 <<NOTE: Deadline.>> 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) 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, other than 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 wells 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 100 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) Regulations.--The Secretary may issue such regulations

as are appropriate to carry out this subsection.

(g) 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

[[Page 119 STAT. 711]]

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.

(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 2006

through 2010.

(2) Use.--Of the amounts authorized under paragraph (1),

$5,000,000 are authorized for each fiscal year for activities

under subsection (f).

SEC. 350. 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 <<NOTE: Deadline. 30 USC 226 note.>> later

than 45 days after the date of enactment of this Act, the Secretary

shall issue final regulations to implement this section.

SEC. 351. <<NOTE: National Geographical and Geophysical Data

Preservation Program Act of 2005. 42 USC

15908.>> 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 2005''.

[[Page 119 STAT. 712]]

(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 <<NOTE: Deadline.>> 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.

[[Page 119 STAT. 713]]

(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 <<NOTE: Applicability.>> 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).

[[Page 119 STAT. 714]]

(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 2006 through 2010.

SEC. 352. 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. 353. <<NOTE: 42 USC 15909.>> GAS HYDRATE PRODUCTION INCENTIVE.

(a) Purpose.--The purpose of this section is to promote natural gas

production from the natural gas hydrate resources on the outer

Continental Shelf and Federal lands in Alaska by providing royalty

incentives.

(b) Suspension of Royalties.--

(1) In general.--The Secretary may grant royalty relief in

accordance with this section for natural gas produced from gas

hydrate resources under an eligible lease.

(2) Eligible leases.--A lease shall be an eligible lease for

purposes of this section if--

(A) it is issued under the Outer Continental Shelf

Lands Act (43 U.S.C. 1331 et seq.), or is an oil and gas

lease issued for onshore Federal lands in Alaska;

(B) it is issued prior to January 1, 2016; and

(C) production under the lease of natural gas from

gas hydrate resources commences prior to January 1,

2018.

(3) Amount of relief.--The Secretary shall conduct a

rulemaking and grant royalty relief under this section as a

suspension volume if the Secretary determines that such royalty

relief would encourage production of natural gas from gas

hydrate resources from an eligible lease. The maximum suspension

volume shall be 30 billion cubic feet of natural gas per lease.

Such relief shall be in addition to any other royalty relief

under any other provision applicable to the lease that does not

specifically grant a gas hydrate production incentive. Such

royalty suspension volume shall be applied to any eligible

production occurring on or after the date of publication of the

advanced notice of proposed rulemaking.

(4) Limitation.--The Secretary may place limitations on

royalty relief granted under this section based on market price.

(c) Application.--This section shall apply to any eligible lease

issued before, on, or after the date of enactment of this Act.

(d) Rulemakings.--

(1) Requirement.--

The <<NOTE: Publication. Notices. Deadlines.>> Secretary shall

publish the advanced notice of proposed rulemaking within 180

days after the date of enactment of this Act and complete the

rulemaking

[[Page 119 STAT. 715]]

implementing this section within 365 days after the date of

enactment of this Act.

(2) Gas hydrate resources defined.--Such regulations shall

define the term ``gas hydrate resources'' to include both the

natural gas content of gas hydrates within the hydrate stability

zone and free natural gas trapped by and beneath the hydrate

stability zone.

(e) Review.--Not <<NOTE: Deadline. Reports.>> later than 365 days

after the date of enactment of this Act, the Secretary, in consultation

with the Secretary of Energy, shall carry out a review of, and submit to

Congress a report on, further opportunities to enhance production of

natural gas from gas hydrate resources on the outer Continental Shelf

and on Federal lands in Alaska through the provision of other production

incentives or through technical or financial assistance.

SEC. 354. <<NOTE: 42 USC 15910.>> ENHANCED OIL AND NATURAL GAS

PRODUCTION THROUGH CARBON DIOXIDE INJECTION.

(a) Production Incentive.--

(1) Findings.--Congress finds the following:

(A) Approximately two-thirds of the original oil in

place in the United States remains unproduced.

(B) Enhanced oil and natural gas production from the

sequestering of carbon dioxide and other appropriate

gases has the potential to increase oil and natural gas

production.

(C) Capturing and productively using carbon dioxide

would help reduce the carbon intensity of the economy.

(2) Purpose.--The purpose of this section is--

(A) to promote the capturing, transportation, and

injection of produced carbon dioxide, natural carbon

dioxide, and other appropriate gases or other matter for

sequestration into oil and gas fields; and

(B) to promote oil and natural gas production from

the outer Continental Shelf and onshore Federal lands

under lease by providing royalty incentives to use

enhanced recovery techniques using injection of the

substances referred to in subparagraph (A).

(b) Suspension of Royalties.--

(1) In general.--If the Secretary determines that reduction

of the royalty under a Federal oil and gas lease that is an

eligible lease is in the public interest and promotes the

purposes of this section, the Secretary shall undertake a

rulemaking to provide for such reduction for an eligible lease.

(2) Rulemakings.--

The <<NOTE: Publication. Notices. Deadlines.>> Secretary shall

publish the advanced notice of proposed rulemaking within 180

days after the date of enactment of this Act and complete the

rulemaking implementing this section within 365 days after the

date of enactment of this Act.

(3) Eligible leases.--A lease shall be an eligible lease for

purposes of this section if--

(A) it is a lease for production of oil and gas from

the outer Continental Shelf or Federal onshore lands;

(B) the injection of the substances referred to in

subsection (a)(2)(A) will be used as an enhanced

recovery technique on such lease; and

(C) the Secretary determines that the lease contains

oil or gas that would not likely be produced without the

royalty reduction provided under this section.

[[Page 119 STAT. 716]]

(4) Amount of relief.--The rulemaking shall provide for a

suspension volume, which shall not exceed 5,000,000 barrels of

oil equivalent for each eligible lease. Such suspension volume

shall be applied to any production from an eligible lease

occurring on or after the date of publication of any advanced

notice of proposed rulemaking under this subsection.

(5) Limitation.--The Secretary may place limitations on the

royalty reduction granted under this section based on market

price.

(6) Application.--This section shall apply to any eligible

lease issued before, on, or after the date of enactment of this

Act.

(c) Demonstration Program.--

(1) Establishment.--

(A) In general.--The Secretary of Energy shall

establish a competitive grant program to provide grants

to producers of oil and gas to carry out projects to

inject carbon dioxide for the purpose of enhancing

recovery of oil or natural gas while increasing the

sequestration of carbon dioxide.

(B) Projects.--The demonstration program shall

provide for--

(i) not more than 10 projects in the Willistin

Basin in North Dakota and Montana; and

(ii) 1 project in the Cook Inlet Basin in

Alaska.

(2) Requirements.--

(A) In general.--The Secretary of Energy shall issue

requirements relating to applications for grants under

paragraph (1).

(B) Rulemaking.--The issuance of requirements under

subparagraph (A) shall not require a rulemaking.

(C) Minimum requirements.--At a minimum, the

Secretary shall require under subparagraph (A) that an

application for a grant include--

(i) a description of the project proposed in

the application;

(ii) an estimate of the production increase

and the duration of the production increase from

the project, as compared to conventional recovery

techniques, including water flooding;

(iii) an estimate of the carbon dioxide

sequestered by project, over the life of the

project;

(iv) a plan to collect and disseminate data

relating to each project to be funded by the

grant;

(v) a description of the means by which the

project will be sustainable without Federal

assistance after the completion of the term of the

grant;

(vi) a complete description of the costs of

the project, including acquisition, construction,

operation, and maintenance costs over the expected

life of the project;

(vii) a description of which costs of the

project will be supported by Federal assistance

under this section; and

(viii) a description of any secondary or

tertiary recovery efforts in the field and the

efficacy of water flood recovery techniques used.

[[Page 119 STAT. 717]]

(3) Partners.--An applicant for a grant under paragraph (1)

may carry out a project under a pilot program in partnership

with 1 or more other public or private entities.

(4) Selection criteria.--In evaluating applications under

this subsection, the Secretary of Energy shall--

(A) consider the previous experience with similar

projects of each applicant; and

(B) give priority consideration to applications

that--

(i) are most likely to maximize production of

oil and gas in a cost-effective manner;

(ii) sequester significant quantities of

carbon dioxide from anthropogenic sources;

(iii) 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 section is

completed; and

(iv) minimize any adverse environmental

effects from the project.

(5) Demonstration program requirements.--

(A) Maximum amount.--The Secretary of Energy shall

not provide more than $3,000,000 in Federal assistance

under this subsection to any applicant.

(B) Cost sharing.--The Secretary of Energy shall

require cost-sharing under this subsection in accordance

with section 988.

(C) Period of grants.--

(i) In general.--A <<NOTE: Deadline.>> project

funded by a grant under this subsection shall

begin construction not later than 2 years after

the date of provision of the grant, but in any

case not later than December 31, 2010.

(ii) Term.--The Secretary shall not provide

grant funds to any applicant under this subsection

for a period of more than 5 years.

(6) Transfer of <<NOTE: Procedures.>> information and

knowledge.--The Secretary of Energy shall establish mechanisms

to ensure that the information and knowledge gained by

participants in the program under this subsection are

transferred among other participants and interested persons,

including other applicants that submitted applications for a

grant under this subsection.

(7) Schedule.--

(A) Publication.--Not <<NOTE: Deadline. Federal

Register, publication.>> later than 180 days after the

date of enactment of this Act, the Secretary of Energy

shall publish in the Federal Register, and elsewhere, as

appropriate, a request for applications to carry out

projects under this subsection.

(B) Date for applications.--

An <<NOTE: Deadline.>> application for a grant under

this subsection shall be submitted not later than 180

days after the date of publication of the request under

subparagraph (A).

(C) Selection.--After the date by which applications

for grants are required to be submitted under

subparagraph (B), the Secretary of Energy, in a timely

manner, shall select, after peer review and based on the

criteria under paragraph (4), those projects to be

awarded a grant under this subsection.

[[Page 119 STAT. 718]]

(d) Authorization of Appropriations.--There are authorized to be

appropriated such sums as are necessary to carry out this section.

SEC. 355. ASSESSMENT OF DEPENDENCE OF STATE OF HAWAII ON OIL.

(a) Assessment.--The Secretary of Energy shall assess the economic

implications 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) the 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

liquefied 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 liquefied 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 paragraph (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.

[[Page 119 STAT. 719]]

(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 describing 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. 356. <<NOTE: 42 USC 15911.>> DENALI COMMISSION.

(a) Definition of Commission.--In this section, the term

``Commission'' means the Denali Commission established by the Denali

Commission Act of 1998 (42 U.S.C. 3121 note; Public Law 105-277).

(b) Energy Programs.--The Commission shall use amounts made

available under subsection (d) to carry out energy programs, including--

(1) energy generation and development, including--

(A) fuel cells, hydroelectric, solar, wind, wave,

and tidal energy; and

(B) alternative energy sources;

(2) the construction of energy transmission, including

interties;

(3) the replacement and cleanup of fuel tanks;

(4) the construction of fuel transportation networks and

related facilities;

(5) power cost equalization programs; and

(6) projects using coal as a fuel, including coal

gasification projects.

(c) Open Meetings.--

(1) In general.--Except as provided in paragraph (2), a

meeting of the Commission shall be open to the public if--

(A) the Commission members take action on behalf of

the Commission; or

(B) the deliberations of the Commission determine,

or result in the joint conduct or disposition of,

official Commission business.

(2) Exceptions.--Paragraph (1) shall not apply to any

portion of a Commission meeting for which the Commission, in

public session, votes to close the meeting for the reasons

described in paragraph (2), (4), (5), or (6) of subsection (c)

of section 552b of title 5, United States Code.

(3) Public notice.--

(A) In general.--At <<NOTE: Deadline.>> least 1 week

before a meeting of the Commission, the Commission shall

make a public announcement of the meeting that

describes--

(i) the time, place, and subject matter of the

meeting;

(ii) whether the meeting is to be open or

closed to the public; and

(iii) the name and telephone number of an

appropriate person to respond to requests for

information about the meeting.

(B) Additional notice.--The Commission shall make a

public announcement of any change to the information

[[Page 119 STAT. 720]]

made available under subparagraph (A) at the earliest

practicable time.

(4) Minutes.--The Commission shall keep, and make available

to the public, a transcript, electronic recording, or minutes

from each Commission meeting, except for portions of the meeting

closed under paragraph (2).

(d) Authorization of Appropriations.--There is authorized to be

appropriated to the Commission not more than $55,000,000 for each of

fiscal years 2006 through 2015 to carry out subsection (b).

SEC. 357. <<NOTE: 42 USC 15912.>> COMPREHENSIVE INVENTORY OF OCS OIL AND

NATURAL GAS RESOURCES.

(a) In General.--The Secretary shall conduct an inventory and

analysis of oil and natural gas resources beneath all of the waters of

the United States Outer Continental Shelf (``OCS''). The inventory and

analysis shall--

(1) use available data on oil and gas resources in areas

offshore of Mexico and Canada that will provide information on

trends of oil and gas accumulation in areas of the OCS;

(2) use any available technology, except drilling, but

including 3-D seismic technology to obtain accurate resource

estimates;

(3) analyze how resource estimates in OCS areas have changed

over time in regards to gathering geological and geophysical

data, initial exploration, or full field development, including

areas such as the deepwater and subsalt areas in the Gulf of

Mexico;

(4) estimate the effect that understated oil and gas

resource inventories have on domestic energy investments; and

(5) identify and explain how legislative, regulatory, and

administrative programs or processes restrict or impede the

development of identified resources and the extent that they

affect domestic supply, such as moratoria, lease terms and

conditions, operational stipulations and requirements, approval

delays by the Federal Government and coastal States, and local

zoning restrictions for onshore processing facilities and

pipeline landings.

(b) Reports.--The Secretary shall submit a report to Congress on the

inventory of estimates and the analysis of restrictions or impediments,

together with any recommendations, within 6 months of the date of

enactment of the section. <<NOTE: Public information.>> The report shall

be publicly available and updated at least every 5 years.

Subtitle F--Access to Federal Lands

SEC. 361. 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;

[[Page 119 STAT. 721]]

(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. 362. <<NOTE: 42 USC 15921.>> MANAGEMENT OF FEDERAL OIL AND GAS

LEASING PROGRAMS.

(a) Timely Action on Leases and Permits.--

(1) Secretary of the interior.--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

(referred to in this section as the ``Secretary'') shall--

(A) ensure expeditious compliance with section

102(2)(C) of the National Environmental Policy Act of

1969 (42 U.S.C. 4332(2)(C)) and any other applicable

environmental and cultural resources laws;

(B) improve consultation and coordination with the

States and the public; and

(C) improve the collection, storage, and retrieval

of information relating to the oil and gas leasing

activities.

(2) Secretary of agriculture.--To ensure timely action on

oil and gas lease applications for permits to drill on land

otherwise available for leasing, the Secretary of Agriculture

shall--

(A) ensure expeditious compliance with all

applicable environmental and cultural resources laws;

and

(B) improve the collection, storage, and retrieval

of information relating to the oil and gas leasing

activities.

(b) Best Management Practices.--

(1) In general.--Not <<NOTE: Deadline.>> 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 land 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 361.

(3) Regulations.--Not <<NOTE: Deadline.>> later than 180

days after the development of the best management practices

under paragraph (1), the Secretary shall publish, for public

comment,

[[Page 119 STAT. 722]]

proposed regulations that set forth specific timeframes for

processing leases and applications in accordance with the best

management practices, including deadlines for--

(A) approving or disapproving--

(i) resource management plans and related

documents;

(ii) lease applications;

(iii) applications for permits to drill; and

(iv) surface use plans; and

(B) related administrative appeals.

(c) Improved Enforcement.--The Secretary and the Secretary of

Agriculture shall improve inspection and enforcement of oil and gas

activities, including enforcement of terms and conditions in permits to

drill on land under the jurisdiction of the Secretary and the Secretary

of Agriculture, respectively.

(d) Authorization of Appropriations.--In addition to amounts made

available to carry out activities relating to oil and gas leasing on

public land administered by the Secretary and National Forest System

land administered by the Secretary of Agriculture, there are authorized

to be appropriated for each of fiscal years 2006 through 2010--

(1) to the Secretary, acting through the Director of the

Bureau of Land Management--

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

(b); and

(B) $20,000,000 to carry out subsection (c);

(2) to the Secretary, acting through the Director of the

United States Fish and Wildlife Service, $5,000,000 to carry out

subsection (a)(1); and

(3) to the Secretary of Agriculture, acting through the

Chief of the Forest Service, $5,000,000 to carry out subsections

(a)(2) and (c).

SEC. 363. <<NOTE: 42 USC 15922.>> CONSULTATION REGARDING OIL AND GAS

LEASING ON PUBLIC LAND.

(a) In General.--Not <<NOTE: Deadline. Memorandum.>> 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 land under the jurisdiction of the Secretary of

the Interior; and

(2) National Forest System land 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--

(A) oil and gas lease applications;

(B) surface use plans of operation, including steps

for processing surface use plans; and

(C) applications for permits to drill consistent

with applicable timelines;

(2) eliminate duplication of effort by providing for

coordination of planning and environmental compliance efforts;

(3) ensure that lease stipulations are--

(A) applied consistently;

(B) coordinated between agencies; and

[[Page 119 STAT. 723]]

(C) only as restrictive as necessary to protect the

resource for which the stipulations are applied;

(4) 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; and

(5) 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. 364. 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 <<NOTE: 42 USC 15923.>> 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. 365. <<NOTE: 42 USC 15924.>> PILOT PROJECT TO IMPROVE FEDERAL

PERMIT COORDINATION.

(a) Establishment.--The Secretary of the Interior (referred to in

this section as the ``Secretary'') shall establish a Federal Permit

Streamlining Pilot Project (referred to in this section as the ``Pilot

Project'').

[[Page 119 STAT. 724]]

(b) Memorandum of Understanding.--

(1) In general.--Not <<NOTE: Deadline.>> later than 90 days

after the date of enactment of this Act, the Secretary shall

enter into a memorandum of understanding for purposes of this

section with--

(A) the Secretary of Agriculture;

(B) the Administrator of the Environmental

Protection Agency; and

(C) the Chief of Engineers.

(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 <<NOTE: Deadline.>> later than 30 days

after the date of the signing of the memorandum of understanding

under subsection (b), all Federal signatory parties shall, if

appropriate, assign to each of the field offices identified in

subsection (d) 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) <<NOTE: Deadline.>> 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) Grand Junction/Glenwood Springs, Colorado.

(7) Vernal, Utah.

(e) Reports.--Not later than 3 years after the date of enactment of

this Act, the Secretary shall submit 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.

[[Page 119 STAT. 725]]

(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) Permit Processing Improvement Fund.--Section 35 of the Mineral

Leasing Act (30 U.S.C. 191) is amended by adding at the end the

following:

``(c)(1) Notwithstanding the first sentence of subsection (a), any

rentals received from leases in any State (other than the State of

Alaska) on or after the date of enactment of this subsection shall be

deposited in the Treasury, to be allocated in accordance with paragraph

(2).

``(2) Of the amounts deposited in the Treasury under paragraph (1)--

``(A) 50 percent shall be paid by the Secretary of the

Treasury to the State within the boundaries of which the leased

land is located or the deposits were derived; and

``(B) 50 percent shall be deposited in a special fund in the

Treasury, to be known as the `BLM Permit Processing Improvement

Fund' (referred to in this subsection as the `Fund').

``(3) For each of fiscal years 2006 through 2015, the Fund shall be

available to the Secretary of the Interior for expenditure, without

further appropriation and without fiscal year limitation, for the

coordination and processing of oil and gas use authorizations on onshore

Federal land under the jurisdiction of the Pilot Project offices

identified in section 365(d) of the Energy Policy Act of 2005.''.

(h) Transfer of Funds.--For the purposes of coordination and

processing of oil and gas use authorizations on Federal land under the

administration of the Pilot Project offices identified in subsection

(d), the Secretary may authorize the expenditure or transfer of such

funds as are necessary to--

(1) the United States Fish and Wildlife Service;

(2) the Bureau of Indian Affairs;

(3) the Forest Service;

(4) the Environmental Protection Agency;

(5) the Corps of Engineers; and

(6) the States of Wyoming, Montana, Colorado, Utah, and New

Mexico.

(i) Fees.--During the period in which the Pilot Project is

authorized, the Secretary shall not implement a rulemaking that would

enable an increase in fees to recover additional costs related to

processing drilling-related permit applications and use authorizations.

(j) 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.

[[Page 119 STAT. 726]]

SEC. 366. 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 <<NOTE: Notification.>> 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, if the requirements under

the National Environmental Policy Act of 1969 and other

applicable law have been completed within such

timeframe; or

``(B) <<NOTE: Notice.>> defer the decision on the

permit and provide to the applicant a notice--

``(i) that specifies any steps that the

applicant could take for the permit to be issued;

and

``(ii) a list of actions that need to be taken

by the agency to complete compliance with

applicable law together with timelines and

deadlines for completing such actions.

``(3) Requirements for deferred applications.--

``(A) In general.--If the Secretary provides notice

under paragraph (2)(B), 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.

``(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), unless compliance with the National

Environmental Policy Act of 1969 and other applicable

law has not been completed within such timeframe.

``(C) Denial of permit.--If the applicant does not

complete the requirements within the period specified in

subparagraph (A) or if the applicant does not comply

with applicable law, the Secretary shall deny the

permit.''.

SEC. 367. <<NOTE: 42 USC 15925.>> FAIR MARKET VALUE DETERMINATIONS FOR

LINEAR RIGHTS-OF-WAY ACROSS PUBLIC LANDS AND NATIONAL

FORESTS.

(a) Update of Fee Schedule.--Not <<NOTE: Deadline.>> later than 1

year after the date of enactment of this section--

(1) the Secretary of the Interior shall update section

2806.20 of title 43, Code of Federal Regulations, as in effect

on the date of enactment of this section, to revise the per

[[Page 119 STAT. 727]]

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

(2) the Secretary of Agriculture shall make the same

revision for linear rights-of-way granted, issued, or renewed

under title V of the Federal Lands Policy and Management Act of

1976 (43 U.S.C. 1761 et seq.) on National Forest System land.

(b) Fair Market Value Rental Determination for Linear Rights-of-

way.--The fair market value rent of a linear right-of-way across public

lands or National Forest System lands issued under section 504 of the

Federal Land Policy and Management Act of 1976 (43 U.S.C. 1764) or

section 28 of the Mineral Leasing Act (30 U.S.C. 185) shall be

determined in accordance with subpart 2806 of title 43, Code of Federal

Regulations, as in effect on the date of enactment of this section

(including the annual or periodic updates specified in the regulations)

and as updated in accordance with subsection (a).

SEC. 368. <<NOTE: 42 USC 15926.>> ENERGY RIGHT-OF-WAY CORRIDORS ON

FEDERAL LAND.

(a) Western States.--Not <<NOTE: Deadline.>> 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 this section referred to

collectively as ``the Secretaries''), in consultation with the Federal

Energy Regulatory Commission, States, tribal or local units of

governments as appropriate, affected utility industries, and other

interested persons, shall consult with each other and shall--

(1) designate, under their respective authorities, corridors

for oil, gas, and hydrogen pipelines and electricity

transmission and distribution facilities on Federal land in the

eleven contiguous Western States (as defined in section 103(o)

of the Federal Land Policy and Management Act of 1976 (43 U.S.C.

1702(o));

(2) perform any environmental reviews that may be required

to complete the designation of such corridors; and

(3) incorporate the designated corridors into the relevant

agency land use and resource management plans or equivalent

plans.

(b) Other States.--Not <<NOTE: Deadline.>> later than 4 years after

the date of enactment of this Act, the Secretaries, in consultation with

the Federal Energy Regulatory Commission, affected utility industries,

and other interested persons, shall jointly--

(1) identify corridors for oil, gas, and hydrogen pipelines

and electricity transmission and distribution facilities on

Federal land in States other than those described in subsection

(a); and

(2) schedule prompt action to identify, designate, and

incorporate the corridors into the applicable land use plans.

(c) Ongoing Responsibilities.--

The <<NOTE: Procedures.>> Secretaries, in consultation with the Federal

Energy Regulatory Commission, affected utility industries, and other

interested parties, shall establish procedures under their respective

authorities that--

(1) ensure that additional corridors for oil, gas, and

hydrogen pipelines and electricity transmission and distribution

facilities on Federal land are promptly identified and

designated as necessary; and

[[Page 119 STAT. 728]]

(2) expedite applications to construct or modify oil, gas,

and hydrogen pipelines and electricity transmission and

distribution facilities within such corridors, taking into

account prior analyses and environmental reviews undertaken

during the designation of such corridors.

(d) 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.

(e) Specifications of Corridor.--A corridor designated under this

section shall, at a minimum, specify the centerline, width, and

compatible uses of the corridor.

SEC. 369. <<NOTE: Oil Shale, Tar Sands, and Other Strategic

Unconventional Fuels Act of 2005. Deadlines. 42 USC

15927.>> OIL SHALE, TAR SANDS, AND OTHER STRATEGIC

UNCONVENTIONAL FUELS.

(a) Short Title.--This section may be cited as the ``Oil Shale, Tar

Sands, and Other Strategic Unconventional Fuels Act of 2005''.

(b) Declaration of Policy.--Congress declares that it is the policy

of the United States that--

(1) United States oil shale, tar sands, and other

unconventional fuels are strategically important domestic

resources that should be developed to reduce the growing

dependence of the United States on politically and economically

unstable sources of foreign oil imports;

(2) the development of oil shale, tar sands, and other

strategic unconventional fuels, for research and commercial

development, should be conducted in an environmentally sound

manner, using practices that minimize impacts; and

(3) development of those strategic unconventional fuels

should occur, with an emphasis on sustainability, to benefit the

United States while taking into account affected States and

communities.

(c) Leasing Program for Research and Development of Oil Shale and

Tar Sands.--In accordance with section 21 of the Mineral Leasing Act (30

U.S.C. 241) and any other applicable law, except as provided in this

section, not later than 180 days after the date of enactment of this

Act, from land otherwise available for leasing, the Secretary of the

Interior (referred to in this section as the ``Secretary'') shall make

available for leasing such land as the Secretary considers to be

necessary to conduct research and development activities with respect to

technologies for the recovery of liquid fuels from oil shale and tar

sands resources on public lands. Prospective public lands within each of

the States of Colorado, Utah, and Wyoming shall be made available for

such research and development leasing.

(d) Programmatic Environmental Impact Statement and Commercial

Leasing Program for Oil Shale and Tar Sands.--

(1) Programmatic environmental impact statement.--Not later

than 18 months after the date of enactment of this Act, in

accordance with section 102(2)(C) of the National Environmental

Policy Act of 1969 (42 U.S.C. 4332(2)(C)), the Secretary shall

complete a programmatic environmental impact statement for a

commercial leasing program for oil shale and tar sands resources

on public lands, with an emphasis on

[[Page 119 STAT. 729]]

the most geologically prospective lands within each of the

States of Colorado, Utah, and Wyoming.

(2) Final regulation.--Not later than 6 months after the

completion of the programmatic environmental impact statement

under this subsection, the Secretary shall publish a final

regulation establishing such program.

(e) Commencement of Commercial Leasing of Oil Shale and Tar Sands.--

Not later than 180 days after publication of the final regulation

required by subsection (d), the Secretary shall consult with the

Governors of States with significant oil shale and tar sands resources

on public lands, representatives of local governments in such States,

interested Indian tribes, and other interested persons, to determine the

level of support and interest in the States in the development of tar

sands and oil shale resources. If the Secretary finds sufficient support

and interest exists in a State, the Secretary may conduct a lease sale

in that State under the commercial leasing program regulations. Evidence

of interest in a lease sale under this subsection shall include, but not

be limited to, appropriate areas nominated for leasing by potential

lessees and other interested parties.

(f) Diligent Development Requirements.--

The <<NOTE: Regulations.>> Secretary shall, by regulation, designate

work requirements and milestones to ensure the diligent development of

the lease.

(g) Initial Report by the Secretary of the Interior.--Within 90 days

after the date of enactment of this Act, the Secretary of the Interior

shall report to the Committee on Resources of the House of

Representatives and the Committee on Energy and Natural Resources of the

Senate on--

(1) the interim actions necessary to--

(A) develop the program, complete the programmatic

environmental impact statement, and promulgate the final

regulation as required by subsection (d); and

(B) conduct the first lease sales under the program

as required by subsection (e); and

(2) a schedule to complete such actions within the time

limits mandated by this section.

(h) Task Force.--

(1) Establishment.--The Secretary of Energy, in cooperation

with the Secretary of the Interior and the Secretary of Defense,

shall establish a task force to develop a program to coordinate

and accelerate the commercial development of strategic

unconventional fuels, including but not limited to oil shale and

tar sands resources within the United States, in an integrated

manner.

(2) Composition.--The Task Force shall be composed of--

(A) the Secretary of Energy (or the designee of the

Secretary);

(B) the Secretary of the Interior (or the designee

of the Secretary of the Interior);

(C) the Secretary of Defense (or the designee of the

Secretary of Defense);

(D) the Governors of affected States; and

(E) representatives of local governments in affected

areas.

(3) Recommendations.--The Task Force shall make such

recommendations regarding promoting the development of the

[[Page 119 STAT. 730]]

strategic unconventional fuels resources within the United

States as it may deem appropriate.

(4) Partnerships.--The Task Force shall make recommendations

with respect to initiating a partnership with the Province of

Alberta, Canada, for purposes of sharing information relating to

the development and production of oil from tar sands, and

similar partnerships with other nations that contain significant

oil shale resources.

(5) Reports.--

(A) Initial report.--Not later than 180 days after

the date of enactment of this Act, the Task Force shall

submit to the President and Congress a report that

describes the analysis and recommendations of the Task

Force.

(B) Subsequent reports.--The Secretary shall provide

an annual report describing the progress in developing

the strategic unconventional fuels resources within the

United States for each of the 5 years following

submission of the report provided for in subparagraph

(A).

(i) Office of <<NOTE: Establishment.>> Petroleum Reserves.--

(1) In general.--The Office of Petroleum Reserves of the

Department of Energy shall--

(A) coordinate the creation and implementation of a

commercial strategic fuel development program for the

United States;

(B) evaluate the strategic importance of

unconventional sources of strategic fuels to the

security of the United States;

(C) promote and coordinate Federal Government

actions that facilitate the development of strategic

fuels in order to effectively address the energy supply

needs of the United States;

(D) identify, assess, and recommend appropriate

actions of the Federal Government required to assist in

the development and manufacturing of strategic fuels;

and

(E) coordinate and facilitate appropriate

relationships between private industry and the Federal

Government to promote sufficient and timely private

investment to commercialize strategic fuels for domestic

and military use.

(2) Consultation and coordination.--The Office of Petroleum

Reserves shall work closely with the Task Force and coordinate

its staff support.

(3) Annual reports.--Not later than 180 days after the date

of enactment of this Act and annually thereafter, the Secretary

shall submit to Congress a report that describes the activities

of the Office of Petroleum Reserves carried out under this

subsection.

(j) Mineral Leasing Act Amendments.--

(1) Section 17.--Section 17(b)(2) of the Mineral Leasing Act

(30 U.S.C. 226(b)(2)), as amended by section 350, is further

amended--

(A) in subparagraph (A) (as designated by the

amendment made by subsection (a)(1) of that section) by

designating the first, second, and third sentences as

clauses (i), (ii), and (iii), respectively;

(B) by moving clause (ii), as so designated, so as

to begin immediately after and below clause (i);

[[Page 119 STAT. 731]]

(C) by moving clause (iii), as so designated, so as

to begin immediately after and below clause (ii);

(D) in clause (i) of subparagraph (A) (as designated

by subparagraph (A) of this paragraph) by striking

``five thousand one hundred and twenty'' and inserting

``5,760''; and

(E) by adding at the end the following:

``(iv) No lease issued under this paragraph shall be

included in any chargeability limitation associated with oil and

gas leases.''.

(2) Section 21.--Section 21(a) of the Mineral Leasing Act

(30 U.S.C. 241(a)) is amended--

(A) by striking ``(a) That the Secretary'' and

inserting the following:

``(a)(1) The Secretary'';

(B) by striking ``; that no lease'' and inserting a

period, followed by the following:

``(2) No lease'';

(C) by striking ``Leases may be for'' and inserting

the following:

``(3) Leases may be for'';

(D) by striking ``For the privilege'' and inserting

the following:

``(4) For the privilege'';

(E) in paragraph (2) (as designated by subparagraph

(B) of this paragraph) by striking ``five thousand one

hundred and twenty'' and inserting ``5,760'';

(F) in paragraph (4) (as designated by subparagraph

(D) of this paragraph) by striking ``rate of 50 cents

per acre'' and inserting ``rate of $2.00 per acre'';

(G)(i) by striking ``: Provided further, That not

more than one lease shall be granted under this section

to any'' and inserting ``: Provided further, That no'';

and

(ii) by striking ``except that with respect to

leases for'' and inserting ``shall acquire or hold more

than 50,000 acres of oil shale leases in any one State.

For''; and

(H) by adding at the end the following:

``(5) No lease issued under this section shall be included

in any chargeability limitation associated with oil and gas

leases.''.

(k) Interagency Coordination and Expeditious Review of Permitting

Process.--

(1) Department of the interior as lead agency.--Upon written

request of a prospective applicant for Federal authorization to

develop a proposed oil shale or tar sands project, the

Department of the Interior shall act as the lead Federal agency

for the purposes of coordinating all applicable Federal

authorizations and environmental reviews. To the maximum extent

practicable under applicable Federal law, the Secretary shall

coordinate this Federal authorization and review process with

any Indian tribes and State and local agencies responsible for

conducting any separate permitting and environmental reviews.

(2) Implementing regulations.--Not later than 6 months after

the date of enactment of this Act, the Secretary shall issue any

regulations necessary to implement this subsection.

(l) Cost-shared Demonstration Technologies.--

[[Page 119 STAT. 732]]

(1) Identification.--The Secretary of Energy shall identify

technologies for the development of oil shale and tar sands

that--

(A) are ready for demonstration at a commercially-

representative scale; and

(B) have a high probability of leading to commercial

production.

(2) Assistance.--For each technology identified under

paragraph (1), the Secretary of Energy may provide--

(A) technical assistance;

(B) assistance in meeting environmental and

regulatory requirements; and

(C) cost-sharing assistance.

(m) National Oil Shale and Tar Sands Assessment.--

(1) Assessment.--

(A) In general.--The Secretary shall carry out a

national assessment of oil shale and tar sands resources

for the purposes of evaluating and mapping oil shale and

tar sands deposits, in the geographic areas described in

subparagraph (B). In conducting such an assessment, the

Secretary shall make use of the extensive geological

assessment work for oil shale and tar sands already

conducted by the United States Geological Survey.

(B) Geographic areas.--The geographic areas referred

to in subparagraph (A), listed in the order in which the

Secretary shall assign priority, are--

(i) the Green River Region of the States of

Colorado, Utah, and Wyoming;

(ii) the Devonian oil shales and other

hydrocarbon-bearing rocks having the nomenclature

of ``shale'' located east of the Mississippi

River; and

(iii) any remaining area in the central and

western United States (including the State of

Alaska) that contains oil shale and tar sands, as

determined by the Secretary.

(2) Use of state surveys and universities.--In carrying out

the assessment under paragraph (1), the Secretary may request

assistance from any State-administered geological survey or

university.

(n) Land Exchanges.--

(1) In general.--To facilitate the recovery of oil shale and

tar sands, especially in areas where Federal, State, and private

lands are intermingled, the Secretary shall consider the use of

land exchanges where appropriate and feasible to consolidate

land ownership and mineral interests into manageable areas.

(2) Identification and priority of public lands.--The

Secretary shall identify public lands containing deposits of oil

shale or tar sands within the Green River, Piceance Creek,

Uintah, and Washakie geologic basins, and shall give priority to

implementing land exchanges within those basins. The Secretary

shall consider the geology of the respective basin in

determining the optimum size of the lands to be consolidated.

(3) Compliance with section 206 of flpma.--A land exchange

undertaken in furtherance of this subsection shall be

implemented in accordance with section 206 of the Federal Land

Policy and Management Act of 1976 (43 U.S.C. 1716).

[[Page 119 STAT. 733]]

(o) Royalty Rates for Leases.--The Secretary shall establish

royalties, fees, rentals, bonus, or other payments for leases under this

section that shall--

(1) encourage development of the oil shale and tar sands

resource; and

(2) ensure a fair return to the United States.

(p) Heavy Oil Technical and Economic Assessment.--The Secretary of

Energy shall update the 1987 technical and economic assessment of

domestic heavy oil resources that was prepared by the Interstate Oil and

Gas Compact Commission. Such an update should include all of North

America and cover all unconventional oil, including heavy oil, tar sands

(oil sands), and oil shale.

(q) Procurement of Unconventional Fuels by the Department of

Defense.--

(1) In general.--Chapter 141 of title 10, United States

Code, is amended by inserting after section 2398 the following:

``Sec. 2398a. Procurement of fuel derived from coal, oil shale, and tar

sands

``(a) Use of Fuel to Meet Department of Defense Needs.--The

Secretary of Defense shall develop a strategy to use fuel produced, in

whole or in part, from coal, oil shale, and tar sands (referred to in

this section as a `covered fuel') that are extracted by either mining or

in-situ methods and refined or otherwise processed in the United States

in order to assist in meeting the fuel requirements of the Department of

Defense when the Secretary determines that it is in the national

interest.

``(b) Authority to Procure.--The Secretary of Defense may enter into

1 or more contracts or other agreements (that meet the requirements of

this section) to procure a covered fuel to meet 1 or more fuel

requirements of the Department of Defense.

``(c) Clean Fuel Requirements.--A covered fuel may be procured under

subsection (b) only if the covered fuel meets such standards for clean

fuel produced from domestic sources as the Secretary of Defense shall

establish for purposes of this section in consultation with the

Department of Energy.

``(d) Multiyear Contract Authority.--Subject to applicable

provisions of law, any contract or other agreement for the procurement

of covered fuel under subsection (b) may be for 1 or more years at the

election of the Secretary of Defense.

``(e) Fuel Source Analysis.--In order to facilitate the procurement

by the Department of Defense of covered fuel under subsection (b), the

Secretary of Defense may carry out a comprehensive assessment of current

and potential locations in the United States for the supply of covered

fuel to the Department.''.

(2) Clerical amendment.--The table of sections for chapter

141 of title 10, United States Code, is amended by inserting

after the item relating to section 2398 the following:

``2398a. Procurement of fuel derived from coal, oil shale, and tar

sands.''.

(r) State Water Rights.--Nothing in this section preempts or affects

any State water law or interstate compact relating to water.

(s) Authorization of Appropriations.--There are authorized to be

appropriated such sums as are necessary to carry out this section.

[[Page 119 STAT. 734]]

SEC. 370. FINGER LAKES 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. 371. <<NOTE: 30 USC 188 note.>> REINSTATEMENT OF LEASES.

(a) Leases <<NOTE: Effective date. Termination date.>> Terminated

for Certain Failure to Pay Rental.--Notwithstanding section 31(d)(2)(B)

of the Mineral Leasing Act (30 U.S.C. 188(d)(2)(B)) as in effect before

the effective date of this section, and notwithstanding the amendment

made by subsection (b) of this section, the Secretary of the Interior

may reinstate any oil and gas lease issued under that Act that was

terminated for failure of a lessee to pay the full amount of rental on

or before the anniversary date of the lease, during the period beginning

on September 1, 2001, and ending on June 30, 2004, if--

(1) <<NOTE: Deadline.>> not later than 120 days after the

date of enactment of this Act, the lessee--

(A) files a petition for reinstatement of the lease;

(B) complies with the conditions of section 31(e) of

the Mineral Leasing Act (30 U.S.C. 188(e)); and

(C) <<NOTE: Certification.>> certifies that the

lessee did not receive a notice of termination by the

date that was 13 months before the date of termination;

and

(2) the land is available for leasing.

(b) Deadline for Petitions, Generally.--Section 31(d)(2) of the

Mineral Leasing Act (30 U.S.C. 188(d)(2)) is amended by striking

subparagraphs (A) and (B) and inserting the following:

``(A) with respect to any lease that terminated

under subsection (b) on or before the date of the

enactment of the Energy Policy Act of 2005, a petition

for reinstatement (together with the required back

rental and royalty accruing after the date of

termination) is filed on or before the earlier of--

``(i) 60 days after the lessee receives from

the Secretary notice of termination, whether by

return of check or by any other form of actual

notice; or

``(ii) 15 months after the termination of the

lease; or

``(B) with respect to any lease that terminates

under subsection (b) after the date of the enactment of

the Energy Policy Act of 2005, a petition for

reinstatement (together with the required back rental

and royalty accruing after the date of termination) is

filed on or before the earlier of--

``(i) 60 days after receipt of the notice of

termination sent by the Secretary by certified

mail to all lessees of record; or

``(ii) 24 months after the termination of the

lease.''.

SEC. 372. <<NOTE: 42 USC 15928.>> CONSULTATION REGARDING ENERGY RIGHTS-

OF-WAY ON PUBLIC LAND.

(a) Memorandum of Understanding.--

[[Page 119 STAT. 735]]

(1) In general.--Not <<NOTE: Deadline.>> 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.

[[Page 119 STAT. 736]]

(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. 373. 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. 374. <<NOTE: Louisiana.>> LIVINGSTON PARISH MINERAL RIGHTS

TRANSFER.

Section 102 of Public Law 102-562 (106 Stat. 4234) is amended by

striking subsection (b) and inserting the following:

``(b) Reservation of Oil and Gas Rights and Conveyance of Remaining

Mineral Rights.--Subject to the limitations set forth in subsection (c),

the United States hereby excepts and reserves from the provisions of

subsection (a), all rights to oil and gas underlying such lands, along

with the right to explore

[[Page 119 STAT. 737]]

for, and produce the oil and gas under applicable law and such

regulations as the Secretary of the Interior may prescribe. Not later

than 180 days after the date of enactment of the Energy Policy Act of

2005, the Secretary of the Interior shall convey the remaining mineral

rights to the parties who as of the date of enactment of the Energy

Policy Act of 2005 would be recognized as holders of a right, title, or

interest to any portion of such minerals under the laws of the State of

Louisiana, but for the interest of the United States in such minerals.

``(c) Oil and Gas <<NOTE: Deadlines.>> Resource Assessment and

Report.--The United States Geological Survey shall conduct a resource

assessment and publish a report of the findings of such resource

assessment (`USGS Assessment and Report') within 1 year of the date of

enactment of the Energy Policy Act of 2005. The USGS Assessment and

Report shall provide an assessment of all oil and gas resources

underlying the certain lands in Livingston Parish, Louisiana, as

described in section 103 (the `Livingston Parish lands'). Upon a finding

by the Secretary of the Interior based upon the USGS Assessment and

Report that it is unlikely that economically recoverable oil and gas

resources are present, the Secretary shall convey all rights to oil and

gas underlying such lands to the recipients, or their successors, heirs,

or assigns, of the conveyances under subsection (b). Such further

conveyances shall be made within 180 days after a finding by the

Secretary that it is unlikely that economically recoverable oil and gas

resources are present.''.

Subtitle G--Miscellaneous

SEC. 381. DEADLINE FOR DECISION ON APPEALS OF CONSISTENCY DETERMINATION

UNDER THE COASTAL ZONE MANAGEMENT ACT OF 1972.

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.--Not <<NOTE: Federal

Register, publication.>> later than 30 days after the date of the filing

of an appeal to the Secretary of a consistency determination under

section 307, the Secretary shall publish an initial notice in the

Federal Register.

``(b) Closure of Record.--

``(1) In general.--Not later than the end of the 160-day

period beginning on the date of publication of an initial notice

under subsection (a), except as provided in paragraph (3), the

Secretary shall immediately close the decision record and

receive no more filings on the appeal.

``(2) Notice.--After <<NOTE: Federal

Register, publication.>> closing the administrative record, the

Secretary shall immediately publish a notice in the Federal

Register that the administrative record has been closed.

``(3) Exception.--

``(A) In general.--Subject to subparagraph (B),

during the 160-day period described in paragraph (1),

the Secretary may stay the closing of the decision

record--

``(i) for a specific period mutually agreed to

in writing by the appellant and the State agency;

or

``(ii) as the Secretary determines necessary

to receive, on an expedited basis--

[[Page 119 STAT. 738]]

``(I) any supplemental information

specifically requested by the Secretary

to complete a consistency review under

this Act; or

``(II) any clarifying information

submitted by a party to the proceeding

related to information in the

consolidated record compiled by the lead

Federal permitting agency.

``(B) Applicability.--The Secretary may only stay

the 160-day period described in paragraph (1) for a

period not to exceed 60 days.

``(c) Deadline for Decision.--

``(1) In general.--Not <<NOTE: Notices. Federal

Register, publication.>> later than 60 days after the date of

publication of a Federal Register notice stating when the

decision record for an appeal has been closed, the Secretary

shall issue a decision or publish a notice in the Federal

Register explaining why a decision cannot be issued at that

time.

``(2) Subsequent decision.--Not later than 15 days after the

date of publication of a Federal Register notice explaining why

a decision cannot be issued within the 60-day period, the

Secretary shall issue a decision.''.

SEC. 382. <<NOTE: 16 USC 1466.>> APPEALS RELATING TO OFFSHORE MINERAL

DEVELOPMENT.

For 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 any Federal

authorization for the permitting, approval, or other authorization of an

energy project, the lead Federal permitting agency for the project

shall, with the cooperation of Federal and State administrative

agencies, maintain a consolidated record of all decisions made or

actions taken by the lead agency or by another Federal or State

administrative agency or officer. Such record shall be the initial

record for appeals or reviews under that Act, provided that the record

may be supplemented as expressly provided pursuant to section 319 of

that Act.

SEC. 383. 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 State of 44 cents for every $1 of

royalty withheld.

(2) Treatment of amounts.--Any royalty withheld by a lessee

in accordance with this section (including any portion thereof

that is paid to the State under paragraph (1)) shall be treated

as paid for purposes of satisfaction of the royalty obligations

of the lessee to the United States.

(3) Certification of withheld amounts.--The Secretary of the

Treasury shall--

(A) determine the amount of royalty withheld by a

lessee under this section; and

[[Page 119 STAT. 739]]

(B) <<NOTE: Publication.>> 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) <<NOTE: Applicability. Effective date. Termination date.>> shall

apply to royalty amounts that are due and payable in the period

beginning on October 1, 2006, and ending on the date on which the

Secretary of the Treasury publishes a certification under subsection

(a)(3)(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. 384. COASTAL IMPACT ASSISTANCE PROGRAM.

Section 31 of the Outer Continental Shelf Lands Act (43 U.S.C.

1356a) is amended to read as follows:

``SEC. 31. COASTAL IMPACT ASSISTANCE PROGRAM.

``(a) Definitions.--In this section:

``(1) Coastal political subdivision.--The term `coastal

political subdivision' means a political subdivision of a

coastal State any part of which political subdivision is--

``(A) within the coastal zone (as defined in section

304 of the Coastal Zone Management Act of 1972 (16

U.S.C. 1453)) of the coastal State as of the date of

enactment of the Energy Policy Act of 2005; and

``(B) not more than 200 nautical miles from the

geographic center of any leased tract.

``(2) Coastal population.--The term `coastal population'

means the population, as determined by the most recent official

data of the Census Bureau, of each political subdivision any

part of which lies within the designated coastal boundary of a

State (as defined in a State's coastal zone management program

under the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et

seq.)).

``(3) Coastal state.--The term `coastal State' has the

meaning given the term in section 304 of the Coastal Zone

Management Act of 1972 (16 U.S.C. 1453).

``(4) Coastline.--The term `coastline' has the meaning given

the term `coast line' in section 2 of the Submerged Lands Act

(43 U.S.C. 1301).

[[Page 119 STAT. 740]]

``(5) Distance.--The term `distance' means the minimum great

circle distance, measured in statute miles.

``(6) Leased tract.--The term `leased tract' means a tract

that is subject to a lease under section 6 or 8 for the purpose

of drilling for, developing, and producing oil or natural gas

resources.

``(7) Leasing moratoria.--The term `leasing moratoria' means

the prohibitions on preleasing, leasing, and related activities

on any geographic area of the outer Continental Shelf as

contained in sections 107 through 109 of division E of the

Consolidated Appropriations Act, 2005 (Public Law 108-447; 118

Stat. 3063).

``(8) Political subdivision.--The term `political

subdivision' means the local political jurisdiction immediately

below the level of State government, including counties,

parishes, and boroughs.

``(9) Producing state.--

``(A) In general.--The term `producing State' means

a coastal State that has a coastal seaward boundary

within 200 nautical miles of the geographic center of a

leased tract within any area of the outer Continental

Shelf.

``(B) Exclusion.--The term `producing State' does

not include a producing State, a majority of the

coastline of which is subject to leasing moratoria,

unless production was occurring on January 1, 2005, from

a lease within 10 nautical miles of the coastline of

that State.

``(10) Qualified outer continental shelf revenues.--

``(A) In general.--The term `qualified Outer

Continental Shelf revenues' means all amounts received

by the United States from each leased tract or portion

of a leased tract--

``(i) lying--

``(I) seaward of the zone covered by

section 8(g); or

``(II) within that zone, but to

which section 8(g) does not apply; and

``(ii) the geographic center of which lies

within a distance of 200 nautical miles from any

part of the coastline of any coastal State.

``(B) Inclusions.--The term `qualified Outer

Continental Shelf revenues' includes bonus bids, rents,

royalties (including payments for royalty taken in kind

and sold), net profit share payments, and related late-

payment interest from natural gas and oil leases issued

under this Act.

``(C) Exclusion.--The term `qualified Outer

Continental Shelf revenues' does not include any

revenues from a leased tract or portion of a leased

tract that is located in a geographic area subject to a

leasing moratorium on January 1, 2005, unless the lease

was in production on January 1, 2005.

``(b) Payments to Producing States and Coastal Political

Subdivisions.--

``(1) In general.--The Secretary shall, without further

appropriation, disburse to producing States and coastal

political subdivisions in accordance with this section

$250,000,000 for each of fiscal years 2007 through 2010.

[[Page 119 STAT. 741]]

``(2) Disbursement.--In each fiscal year, the Secretary

shall disburse to each producing State for which the Secretary

has approved a plan under subsection (c), and to coastal

political subdivisions under paragraph (4), such funds as are

allocated to the producing State or coastal political

subdivision, respectively, under this section for the fiscal

year.

``(3) Allocation among producing states.--

``(A) In general.--Except as provided in

subparagraph (C) and subject to subparagraph (D), the

amounts available under paragraph (1) shall be allocated

to each producing State based on the ratio that--

``(i) the amount of qualified outer

Continental Shelf revenues generated off the

coastline of the producing State; bears to

``(ii) the amount of qualified outer

Continental Shelf revenues generated off the

coastline of all producing States.

``(B) Amount of outer continental shelf revenues.--

For purposes of subparagraph (A)--

``(i) the amount of qualified outer

Continental Shelf revenues for each of fiscal

years 2007 and 2008 shall be determined using

qualified outer Continental Shelf revenues

received for fiscal year 2006; and

``(ii) the amount of qualified outer

Continental Shelf revenues for each of fiscal

years 2009 and 2010 shall be determined using

qualified outer Continental Shelf revenues

received for fiscal year 2008.

``(C) Multiple producing states.--In a case in which

more than one producing State is located within 200

nautical miles of any portion of a leased tract, the

amount allocated to each producing State for the leased

tract shall be inversely proportional to the distance

between--

``(i) the nearest point on the coastline of

the producing State; and

``(ii) the geographic center of the leased

tract.

``(D) Minimum allocation.--The amount allocated to a

producing State under subparagraph (A) shall be at least

1 percent of the amounts available under paragraph (1).

``(4) Payments to coastal political subdivisions.--

``(A) In general.--The Secretary shall pay 35

percent of the allocable share of each producing State,

as determined under paragraph (3) to the coastal

political subdivisions in the producing State.

``(B) Formula.--Of the amount paid by the Secretary

to coastal political subdivisions under subparagraph

(A)--

``(i) 25 percent shall be allocated to each

coastal political subdivision in the proportion

that--

``(I) the coastal population of the

coastal political subdivision; bears to

``(II) the coastal population of all

coastal political subdivisions in the

producing State;

``(ii) 25 percent shall be allocated to each

coastal political subdivision in the proportion

that--

``(I) the number of miles of

coastline of the coastal political

subdivision; bears to

[[Page 119 STAT. 742]]

``(II) the number of miles of

coastline of all coastal political

subdivisions in the producing State; and

``(iii) 50 percent shall be allocated in

amounts that are inversely proportional to the

respective distances between the points in each

coastal political subdivision that are closest to

the geographic center of each leased tract, as

determined by the Secretary.

``(C) Exception for the state of louisiana.--For the

purposes of subparagraph (B)(ii), the coastline for

coastal political subdivisions in the State of Louisiana

without a coastline shall be considered to be \1/3\ the

average length of the coastline of all coastal political

subdivisions with a coastline in the State of Louisiana.

``(D) Exception for the state of alaska.--For the

purposes of carrying out subparagraph (B)(iii) in the

State of Alaska, the amounts allocated shall be divided

equally among the two coastal political subdivisions

that are closest to the geographic center of a leased

tract.

``(E) Exclusion of certain leased tracts.--For

purposes of subparagraph (B)(iii), a leased tract or

portion of a leased tract shall be excluded if the tract

or portion of a leased tract is located in a geographic

area subject to a leasing moratorium on January 1, 2005,

unless the lease was in production on that date.

``(5) No approved plan.--

``(A) In general.--Subject to subparagraph (B) and

except as provided in subparagraph (C), in a case in

which any amount allocated to a producing State or

coastal political subdivision under paragraph (4) or (5)

is not disbursed because the producing State does not

have in effect a plan that has been approved by the

Secretary under subsection (c), the Secretary shall

allocate the undisbursed amount equally among all other

producing States.

``(B) Retention of allocation.--The Secretary shall

hold in escrow an undisbursed amount described in

subparagraph (A) until such date as the final appeal

regarding the disapproval of a plan submitted under

subsection (c) is decided.

``(C) Waiver.--The Secretary may waive subparagraph

(A) with respect to an allocated share of a producing

State and hold the allocable share in escrow if the

Secretary determines that the producing State is making

a good faith effort to develop and submit, or update, a

plan in accordance with subsection (c).

``(c) Coastal Impact Assistance Plan.--

``(1) Submission of state plans.--

``(A) In general.--Not <<NOTE: Deadline.>> later

than July 1, 2008, the Governor of a producing State

shall submit to the Secretary a coastal impact

assistance plan.

``(B) Public participation.--In carrying out

subparagraph (A), the Governor shall solicit local input

and provide for public participation in the development

of the plan.

``(2) Approval.--

``(A) In general.--The Secretary shall approve a

plan of a producing State submitted under paragraph (1)

before disbursing any amount to the producing State, or

to a

[[Page 119 STAT. 743]]

coastal political subdivision located in the producing

State, under this section.

``(B) Components.--The Secretary shall approve a

plan submitted under paragraph (1) if--

``(i) the Secretary determines that the plan

is consistent with the uses described in

subsection (d); and

``(ii) the plan contains--

``(I) the name of the State agency

that will have the authority to

represent and act on behalf of the

producing State in dealing with the

Secretary for purposes of this section;

``(II) a program for the

implementation of the plan that

describes how the amounts provided under

this section to the producing State will

be used;

``(III) for each coastal political

subdivision that receives an amount

under this section--

``(aa) the name of a contact

person; and

``(bb) a description of how

the coastal political

subdivision will use amounts

provided under this section;

``(IV) <<NOTE: Certification.>> a

certification by the Governor that ample

opportunity has been provided for public

participation in the development and

revision of the plan; and

``(V) a description of measures that

will be taken to determine the

availability of assistance from other

relevant Federal resources and programs.

``(3) Amendment.--Any amendment to a plan submitted under

paragraph (1) shall be--

``(A) developed in accordance with this subsection;

and

``(B) submitted to the Secretary for approval or

disapproval under paragraph (4).

``(4) Procedure.--Not <<NOTE: Deadline.>> later than 90 days

after the date on which a plan or amendment to a plan is

submitted under paragraph (1) or (3), the Secretary shall

approve or disapprove the plan or amendment.

``(d) Authorized Uses.--

``(1) In general.--A producing State or coastal political

subdivision shall use all amounts received under this section,

including any amount deposited in a trust fund that is

administered by the State or coastal political subdivision and

dedicated to uses consistent with this section, in accordance

with all applicable Federal and State laws, only for one or more

of the following purposes:

``(A) Projects and activities for the conservation,

protection, or restoration of coastal areas, including

wetland.

``(B) Mitigation of damage to fish, wildlife, or

natural resources.

``(C) Planning assistance and the administrative

costs of complying with this section.

``(D) Implementation of a federally-approved marine,

coastal, or comprehensive conservation management plan.

``(E) Mitigation of the impact of outer Continental

Shelf activities through funding of onshore

infrastructure projects and public service needs.

[[Page 119 STAT. 744]]

``(2) Compliance with authorized uses.--If the Secretary

determines that any expenditure made by a producing State or

coastal political subdivision is not consistent with this

subsection, the Secretary shall not disburse any additional

amount under this section to the producing State or the coastal

political subdivision until such time as all amounts obligated

for unauthorized uses have been repaid or reobligated for

authorized uses.

``(3) Limitation.--Not more than 23 percent of amounts

received by a producing State or coastal political subdivision

for any 1 fiscal year shall be used for the purposes described

in subparagraphs (C) and (E) of paragraph (1).''.

SEC. 385. STUDY OF AVAILABILITY OF SKILLED WORKERS.

(a) In General.--The <<NOTE: Contracts.>> Secretary shall enter into

an arrangement with the National Academy of Sciences under which the

National Academy of Sciences shall conduct a study of the short-term and

long-term availability of skilled workers to meet the energy and mineral

security requirements of the United States.

(b) Inclusions.--The study shall include an analysis of--

(1) the need for and availability of workers for the oil,

gas, and mineral industries;

(2) the availability of skilled labor at both entry level

and more senior levels; and

(3) recommendations for future actions needed to meet future

labor requirements.

(c) Report.--Not later than 2 years after the date of enactment of

this Act, the Secretary shall submit to Congress a report that describes

the results of the study.

SEC. 386. <<NOTE: 42 USC 15941.>> GREAT LAKES OIL AND GAS DRILLING BAN.

No Federal or State permit or lease shall be issued for new oil and

gas slant, directional, or offshore drilling in or under one or more of

the Great Lakes.

SEC. 387. <<NOTE: Deadline. 42 USC 13368 note.>> 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. 388. 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.), the Ocean Thermal Energy Conversion

[[Page 119 STAT. 745]]

Act of 1980 (42 U.S.C. 9101 et seq.), or other applicable law,

if those activities--

``(A) support exploration, development, production,

or storage of oil or natural gas, except that a lease,

easement, or right-of-way shall not be granted in an

area in which oil and gas preleasing, leasing, and

related activities are prohibited by a moratorium;

``(B) support transportation of oil or natural gas,

excluding shipping activities;

``(C) produce or support production, transportation,

or transmission of energy from sources other than oil

and gas; or

``(D) use, for energy-related purposes or for other

authorized marine-related purposes, facilities currently

or previously used for activities authorized under this

Act, except that any oil and gas energy-related uses

shall not be authorized in areas in which oil and gas

preleasing, leasing, and related activities are

prohibited by a moratorium.

``(2) Payments and revenues.--(A) The Secretary shall

establish royalties, fees, rentals, bonuses, or other payments

to ensure a fair return to the United States for any lease,

easement, or right-of-way granted under this subsection.

``(B) The Secretary shall provide for the payment of 27

percent of the revenues received by the Federal Government as a

result of payments under this section from projects that are

located wholly or partially within the area extending three

nautical miles seaward of State submerged

lands. <<NOTE: Regulations. Deadline.>> Payments shall be made

based on a formula established by the Secretary by rulemaking no

later than 180 days after the date of enactment of this section

that provides for equitable distribution, based on proximity to

the project, among coastal states that have a coastline that is

located within 15 miles of the geographic center of the project.

``(3) Competitive or noncompetitive basis.--Except with

respect to projects that meet the criteria established under

section 388(d) of the Energy Policy Act of 2005, the Secretary

shall issue a lease, easement, or right-of-way under paragraph

(1) on a competitive basis unless the Secretary determines after

public notice of a proposed lease, easement, or right-of-way

that there is no competitive interest.

``(4) Requirements.--The Secretary shall ensure that any

activity under this subsection is carried out in a manner that

provides for--

``(A) safety;

``(B) protection of the environment;

``(C) prevention of waste;

``(D) conservation of the natural resources of the

outer Continental Shelf;

``(E) coordination with relevant Federal agencies;

``(F) protection of national security interests of

the United States;

``(G) protection of correlative rights in the outer

Continental Shelf;

``(H) a fair return to the United States for any

lease, easement, or right-of-way under this subsection;

[[Page 119 STAT. 746]]

``(I) prevention of interference with reasonable

uses (as determined by the Secretary) of the exclusive

economic zone, the high seas, and the territorial seas;

``(J) consideration of--

``(i) the location of, and any schedule

relating to, a lease, easement, or right-of-way

for an area of the outer Continental Shelf; and

``(ii) any other use of the sea or seabed,

including use for a fishery, a sealane, a

potential site of a deepwater port, or navigation;

``(K) public notice and comment on any proposal

submitted for a lease, easement, or right-of-way under

this subsection; and

``(L) oversight, inspection, research, monitoring,

and enforcement relating to a lease, easement, or right-

of-way under this subsection.

``(5) Lease duration, suspension, and cancellation.--The

Secretary shall provide for the duration, issuance, transfer,

renewal, suspension, and cancellation of a lease, easement, or

right-of-way under this subsection.

``(6) Security.--The Secretary shall require the holder of a

lease, easement, or right-of-way granted under this subsection

to--

``(A) furnish a surety bond or other form of

security, as prescribed by the Secretary;

``(B) comply with such other requirements as the

Secretary considers necessary to protect the interests

of the public and the United States; and

``(C) provide for the restoration of the lease,

easement, or right-of-way.

``(7) Coordination and consultation with affected state and

local governments.--The Secretary shall provide for coordination

and consultation with the Governor of any State or the executive

of any local government that may be affected by a lease,

easement, or right-of-way under this subsection.

``(8) Regulations.--Not <<NOTE: Deadline.>> later than 270

days after the date of enactment of the Energy Policy Act of

2005, the Secretary, in consultation with the Secretary of

Defense, the Secretary of the Department in which the Coast

Guard is operating, the Secretary of Commerce, heads of other

relevant departments and agencies of the Federal Government, and

the Governor of any affected State, shall issue any necessary

regulations to carry out this subsection.

``(9) 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.

``(10) Applicability.--This subsection does not apply to any

area on the outer Continental Shelf within the exterior

boundaries of any unit of the National Park System, National

Wildlife Refuge System, or National Marine Sanctuary System, or

any National Monument.''.

(b) Coordinated <<NOTE: 43 USC 1337 note.>> OCS Mapping

Initiative.--

(1) In general.--The Secretary of the Interior, in

cooperation with the Secretary of Commerce, the Commandant of

the Coast Guard, and the Secretary of Defense, shall establish

[[Page 119 STAT. 747]]

an interagency comprehensive digital mapping initiative for the

outer Continental Shelf to assist in decisionmaking relating to

the siting of activities under subsection (p) of section 8 of

the Outer Continental Shelf Lands Act (43 U.S.C. 1337) (as added

by subsection (a)).

(2) Use of data.--The mapping initiative shall use, and

develop procedures for accessing, data collected before the date

on which the mapping initiative is established, to the maximum

extent practicable.

(3) Inclusions.--Mapping carried out under the mapping

initiative shall include an indication of the locations on the

outer Continental Shelf of--

(A) Federally-permitted activities;

(B) obstructions to navigation;

(C) submerged cultural resources;

(D) undersea cables;

(E) offshore aquaculture projects; and

(F) any area designated for the purpose of safety,

national security, environmental protection, or

conservation and management of living marine resources.

(c) 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.--''.

(d) Savings Provision.--Nothing <<NOTE: 43 USC 1337 note.>> in the

amendment made by subsection (a) requires the resubmittal of any

document that was previously submitted or the reauthorization of any

action that was previously authorized with respect to a project for

which, before the date of enactment of this Act--

(1) an offshore test facility has been constructed; or

(2) a request for a proposal has been issued by a public

authority.

(e) State <<NOTE: 43 USC 1337 note.>> Claims to Jurisdiction Over

Submerged Lands.--Nothing in this section shall be construed to alter,

limit, or modify any claim of any State to any jurisdiction over, or any

right, title, or interest in, any submerged lands.

SEC. 389. OIL SPILL RECOVERY INSTITUTE.

Title V of the Oil Pollution Act of 1990 (33 U.S.C. 2731 et seq.) is

amended--

(1) <<NOTE: 33 USC 2731.>> in section 5001(i), by striking

``September 30, 2012'' and inserting ``1 year after the date on

which the Secretary, in consultation with the Secretary of the

Interior, determines that oil and gas exploration, development,

and production in the State of Alaska have ceased''; and

(2) <<NOTE: 33 USC 2736.>> in section 5006(c), by striking

``October 1, 2012'' and inserting ``1 year after the date on

which the Secretary, in consultation with the Secretary of the

Interior, determines that oil and gas exploration, development,

and production in the State of Alaska have ceased,''.

SEC. 390. <<NOTE: 42 USC 15942.>> NEPA REVIEW.

(a) NEPA Review.--Action by the Secretary of the Interior in

managing the public lands, or the Secretary of Agriculture in managing

National Forest System Lands, with respect to any of the activities

described in subsection (b) shall be subject to a rebuttable presumption

that the use of a categorical exclusion under

[[Page 119 STAT. 748]]

the National Environmental Policy Act of 1969 (NEPA) would apply if the

activity is conducted pursuant to the Mineral Leasing Act for the

purpose of exploration or development of oil or gas.

(b) Activities Described.--The activities referred to in subsection

(a) are the following:

(1) Individual surface disturbances of less than 5 acres so

long as the total surface disturbance on the lease is not

greater than 150 acres and site-specific analysis in a document

prepared pursuant to NEPA has been previously completed.

(2) Drilling an oil or gas well at a location or well pad

site at which drilling has occurred previously within 5 years

prior to the date of spudding the well.

(3) Drilling an oil or gas well within a developed field for

which an approved land use plan or any environmental document

prepared pursuant to NEPA analyzed such drilling as a reasonably

foreseeable activity, so long as such plan or document was

approved within 5 years prior to the date of spudding the well.

(4) Placement of a pipeline in an approved right-of-way

corridor, so long as the corridor was approved within 5 years

prior to the date of placement of the pipeline.

(5) Maintenance of a minor activity, other than any

construction or major renovation or a building or facility.

Subtitle H--Refinery Revitalization

SEC. 391. <<NOTE: 42 USC 15951.>> FINDINGS AND DEFINITIONS.

(a) Findings.--Congress finds that--

(1) it serves the national interest to increase petroleum

refining capacity for gasoline, heating oil, diesel fuel, jet

fuel, kerosene, and petrochemical feedstocks wherever located

within the United States, to bring more supply to the markets

for the use of the American people;

(2) United States demand for refined petroleum products

currently exceeds the country's petroleum refining capacity to

produce such products;

(3) this excess demand has been met with increased imports;

(4) due to lack of capacity, refined petroleum product

imports are expected to grow from 7.9 percent to 10.7 percent of

total refined product by 2025;

(5) refiners are still subject to significant environmental

and other regulations and face several new requirements under

the Clean Air Act (42 U.S.C. 7401 et seq.) over the next decade;

and

(6) better coordination of Federal and State regulatory

reviews may help facilitate siting and construction of new

refineries to meet the demand in the United States for refined

products.

(b) Definitions.--In this subtitle:

(1) Administrator.--The term ``Administrator'' means the

Administrator of the Environmental Protection Agency.

(2) State.--The term ``State'' means--

(A) a State;

(B) the Commonwealth of Puerto Rico; and

[[Page 119 STAT. 749]]

(C) any other territory or possession of the United

States.

SEC. 392. <<NOTE: 42 USC 15952.>> FEDERAL-STATE REGULATORY COORDINATION

AND ASSISTANCE.

(a) In General.--At the request of the Governor of a State, the

Administrator may enter into a refinery permitting cooperative agreement

with the State, under which each party to the agreement identifies

steps, including timelines, that it will take to streamline the

consideration of Federal and State environmental permits for a new

refinery.

(b) Authority Under Agreement.--The Administrator shall be

authorized to--

(1) accept from a refiner a consolidated application for all

permits required from the Environmental Protection Agency, to

the extent consistent with other applicable law;

(2) enter into memoranda of agreement with other Federal

agencies to coordinate consideration of refinery applications

and permits among Federal agencies; and

(3) enter into memoranda of agreement with a State, under

which Federal and State review of refinery permit applications

will be coordinated and concurrently considered, to the extent

practicable.

(c) State Assistance.--The Administrator is authorized to provide

financial assistance to State governments to facilitate the hiring of

additional personnel with expertise in fields relevant to consideration

of refinery permits.

(d) Other Assistance.--The Administrator is authorized to provide

technical, legal, or other assistance to State governments to facilitate

their review of applications to build new refineries.

TITLE IV--COAL

Subtitle A--Clean Coal Power Initiative

SEC. 401. <<NOTE: 42 USC 15961.>> AUTHORIZATION OF APPROPRIATIONS.

(a) Clean Coal Power Initiative.--There are authorized to be

appropriated to the Secretary to carry out the activities authorized by

this subtitle $200,000,000 for each of fiscal years 2006 through 2014,

to remain available until expended.

(b) Report.--The Secretary shall submit to Congress the report

required by this subsection not later than March 31, 2007. The report

shall include, with respect to subsection (a), a 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 Government Accountability Office

[[Page 119 STAT. 750]]

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. <<NOTE: 42 USC 15962.>> PROJECT CRITERIA.

(a) In General.--To be eligible to receive assistance under this

subtitle, a project shall 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 70 percent of the funds are used

only to fund projects on coal-based gasification

technologies, including--

(i) gasification combined cycle;

(ii) gasification fuel cells and turbine

combined cycle;

(iii) gasification coproduction;

(iv) hybrid gasification and combustion; and

(v) other advanced coal based technologies

capable of producing a concentrated stream of

carbon dioxide.

(B) Technical milestones.--

(i) Periodic determination.--

(I) In general.--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.

(II) Prescriptive milestones.--The

technical milestones shall become more

prescriptive during the period of the

clean coal power initiative.

(ii) 2020 goals.--The Secretary shall

establish the periodic milestones so as to achieve

by the year 2020 coal gasification projects able--

(I) to remove at least 99 percent of

sulfur dioxide;

(II) to emit not more than .05 lbs

of NO<INF>x</INF> per million Btu;

(III) to achieve at least 95 percent

reductions in mercury emissions; and

(IV) to achieve a thermal efficiency

of at least--

(aa) 50 percent for coal of

more than 9,000 Btu;

(bb) 48 percent for coal of

7,000 to 9,000 Btu; and

(cc) 46 percent for coal of

less than 7,000 Btu.

(2) Other projects.--

(A) Allocation of funds.--The Secretary shall ensure

that up to 30 percent of the funds made available under

section 401(a) are used to fund projects other than

those described in paragraph (1).

[[Page 119 STAT. 751]]

(B) Technical milestones.--

(i) Periodic determination.--

(I) In general.--The Secretary shall

periodically establish technical

milestones specifying the emission and

thermal efficiency levels that projects

funded under this paragraph shall be

designed, and reasonably expected, to

achieve.

(II) Prescriptive milestones.--The

technical milestones shall become more

prescriptive during the period of the

clean coal power initiative.

(ii) 2020 goals.--The Secretary shall set the

periodic milestones so as to achieve by the year

2020 projects able--

(I) to remove at least 97 percent of

sulfur dioxide;

(II) to emit no more than .08 lbs of

NO<INF>x</INF> per million Btu;

(III) to achieve at least 90 percent

reductions in mercury emissions; and

(IV) to achieve a thermal efficiency

of at least--

(aa) 43 percent for coal of

more than 9,000 Btu;

(bb) 41 percent for coal of

7,000 to 9,000 Btu; and

(cc) 39 percent for coal of

less than 7,000 Btu.

(3) Consultation.--Before setting the technical milestones

under paragraphs (1)(B) and (2)(B), the Secretary shall consult

with--

(A) the Administrator of the Environmental

Protection Agency; and

(B) interested entities, including--

(i) coal producers;

(ii) industries using coal;

(iii) organizations that promote coal or

advanced coal technologies;

(iv) environmental organizations;

(v) organizations representing workers; and

(vi) organizations representing consumers.

(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 described in paragraphs

(1)(B)(ii)(IV) and (2)(B)(ii)(IV), 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) Administration.--

(A) Elevation of site.--In evaluating project

proposals to achieve thermal efficiency levels

established under paragraphs (1)(B)(i) and (2)(B)(i) and

in determining progress towards thermal efficiency

milestones under paragraphs (1)(B)(ii)(IV),

(2)(B)(ii)(IV), and (4), the Secretary

[[Page 119 STAT. 752]]

shall take into account and make adjustments for the

elevation of the site at which a project is proposed to

be constructed.

(B) Applicability of milestones.--In applying the

thermal efficiency milestones under paragraphs

(1)(B)(ii)(IV), (2)(B)(ii)(IV), and (4) to projects that

separate and capture at least 50 percent of the

potential emissions of carbon dioxide by a facility, the

energy used for separation and capture of carbon dioxide

shall not be counted in calculating the thermal

efficiency.

(C) Permitted uses.--In carrying out this section,

the Secretary may give priority to projects that

include, as part of the project--

(i) the separation or capture of carbon

dioxide; or

(ii) the reduction of the demand for natural

gas if deployed.

(c) Financial Criteria.--The Secretary shall not provide financial

assistance under this subtitle for a project unless the recipient

documents to the satisfaction of the Secretary that--

(1) the recipient is financially responsible;

(2) the recipient will provide sufficient information to the

Secretary to enable the Secretary to ensure that the 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, as determined by the Secretary--

(1) meet the requirements of subsections (a), (b), and (c);

and

(2) are likely--

(A) to achieve overall cost reductions in the use of

coal to generate useful forms of energy or chemical

feedstocks;

(B) to 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

(C) to 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) Cost-Sharing.--In carrying out this subtitle, the Secretary

shall require cost sharing in accordance with section 988.

(f) Scheduled Completion of Selected Projects.--

(1) In general.--In selecting a project for financial

assistance under this section, the Secretary shall establish a

reasonable period of time during which the owner or operator of

the project shall complete the construction or demonstration

phase of the project, as the Secretary determines to be

appropriate.

(2) Condition of financial assistance.--The Secretary shall

require as a condition of receipt of any financial assistance

under this subtitle that the recipient of the assistance enter

[[Page 119 STAT. 753]]

into an agreement with the Secretary not to request an extension

of the time period established for the project by the Secretary

under paragraph (1).

(3) Extension of time period.--

(A) In general.--Subject to subparagraph (B), the

Secretary may extend the time period established under

paragraph (1) if the Secretary determines, in the sole

discretion of the Secretary, that the owner or operator

of the project cannot complete the construction or

demonstration phase of the project within the time

period due to circumstances beyond the control of the

owner or operator.

(B) Limitation.--The Secretary shall not extend a

time period under subparagraph (A) by more than 4 years.

(g) Fee Title.--The Secretary may vest fee title or other property

interests acquired under cost-share clean coal power initiative

agreements under this subtitle in any entity, including the United

States.

(h) Data Protection.--For a period not exceeding 5 years after

completion of the operations phase of a cooperative agreement, the

Secretary may provide appropriate protections (including exemptions from

subchapter II of chapter 5 of title 5, United States Code) against the

dissemination of information that--

(1) results from demonstration activities carried out under

the clean coal power initiative program; and

(2) would be a trade secret or commercial or financial

information that is privileged or confidential if the

information had been obtained from and first produced by a non-

Federal party participating in a clean coal power initiative

project.

(i) Applicability.--No technology, or level of emission reduction,

solely by reason of the use of the technology, or the achievement of the

emission reduction, by 1 or more facilities receiving assistance under

this Act, shall be considered to be--

(1) adequately demonstrated for purposes of section 111 of

the Clean Air Act (42 U.S.C. 7411);

(2) achievable for purposes of section 169 of that Act (42

U.S.C. 7479); or

(3) achievable in practice for purposes of section 171 of

that Act (42 U.S.C. 7501).

SEC. 403. <<NOTE: 42 USC 15963.>> REPORT.

Not later than 1 year after the date of enactment of this Act, and

once every 2 years thereafter through 2014, 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. <<NOTE: 42 USC 15964.>> CLEAN COAL CENTERS OF EXCELLENCE.

(a) In General.--As part of the clean coal power initiative, the

Secretary shall award competitive, merit-based grants to institutions of

higher education for the establishment of centers of excellence for

energy systems of the future.

(b) Basis for Grants.--The Secretary shall award grants under this

section to institutions of higher education that show the greatest

potential for advancing new clean coal technologies.

[[Page 119 STAT. 754]]

Subtitle B--Clean Power Projects

SEC. 411. <<NOTE: 42 USC 15971.>> INTEGRATED COAL/RENEWABLE ENERGY

SYSTEM.

(a) In General.--Subject to the availability of appropriations, the

Secretary may provide loan guarantees for a project to produce energy

from coal of less than 7,000 Btu/lb. using appropriate advanced

integrated gasification combined cycle technology, including repowering

of existing facilities, that--

(1) is combined with wind and other renewable sources;

(2) minimizes and offers the potential to sequester carbon

dioxide emissions; and

(3) provides a ready source of hydrogen for near-site fuel

cell demonstrations.

(b) Requirements.--The facility--

(1) may be built in stages;

(2) shall have a combined output of at least 200 megawatts

at successively more competitive rates; and

(3) shall be located in the Upper Great Plains.

(c) Technical Criteria.--Technical <<NOTE: Applicability.>> criteria

described in section 402(b) shall apply to the facility.

(d) Investment Tax Credits.--

(1) In general.--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.

(2) Other funding.--Use of the investment tax credit

described in paragraph (1) does not prohibit the use of other

clean coal program funding.

SEC. 412. <<NOTE: 42 USC 15972.>> LOAN TO PLACE ALASKA CLEAN COAL

TECHNOLOGY FACILITY IN SERVICE.

(a) Definitions.--In this section:

(1) Borrower.--The term ``borrower'' means the owner of the

clean coal technology plant.

(2) Clean coal technology plant.--The term ``clean coal

technology plant'' means the plant located near Healy, Alaska,

constructed under Department cooperative agreement number DE-FC-

22-91PC90544.

(3) Cost of a direct loan.--The term ``cost of a direct

loan'' has the meaning given the term in section 502(5)(B) of

the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(B)).

(b) Authorization.--Subject to subsection (c), the Secretary shall

use amounts made available under subsection (e) to provide the cost of a

direct loan to the borrower for purposes of placing the clean coal

technology plant into reliable operation for the generation of

electricity.

(c) Requirements.--

(1) Maximum loan amount.--The amount of the direct loan

provided under subsection (b) shall not exceed $80,000,000.

(2) Determinations by secretary.--Before providing the

direct loan to the borrower under subsection (b), the Secretary

shall determine that--

(A) the plan of the borrower for placing the clean

coal technology plant in reliable operation has a

reasonable prospect of success;

[[Page 119 STAT. 755]]

(B) the amount of the loan (when combined with

amounts available to the borrower from other sources)

will be sufficient to carry out the project; and

(C) there is a reasonable prospect that the borrower

will repay the principal and interest on the loan.

(3) Interest; term.--The direct loan provided under

subsection (b) shall bear interest at a rate and for a term that

the Secretary determines appropriate, after consultation with

the Secretary of the Treasury, taking into account the needs and

capacities of the borrower and the prevailing rate of interest

for similar loans made by public and private lenders.

(4) Additional terms and conditions.--The Secretary may

require any other terms and conditions that the Secretary

determines to be appropriate.

(d) Use of Payments.--The Secretary shall retain any payments of

principal and interest on the direct loan provided under subsection (b)

to support energy research and development activities, to remain

available until expended, subject to any other conditions in an

applicable appropriations Act.

(e) Authorization of Appropriations.--There are authorized to be

appropriated such sums as are necessary to provide the cost of a direct

loan under subsection (b).

SEC. 413. <<NOTE: 42 USC 15973.>> WESTERN INTEGRATED COAL GASIFICATION

DEMONSTRATION PROJECT.

(a) In General.--Subject to the availability of appropriations, the

Secretary shall carry out a project to demonstrate production of energy

from coal mined in the western United States using integrated

gasification combined cycle technology (referred to in this section as

the ``demonstration project'').

(b) Components.--The demonstration project--

(1) may include repowering of existing facilities;

(2) shall be designed to demonstrate the ability to use coal

with an energy content of not more than 9,000 Btu/lb.; and

(3) shall be capable of removing and sequestering carbon

dioxide emissions.

(c) All Types of Western Coals.--Notwithstanding the foregoing, and

to the extent economically feasible, the demonstration project shall

also be designed to demonstrate the ability to use a variety of types of

coal (including subbituminous and bituminous coal with an energy content

of up to 13,000 Btu/lb.) mined in the western United States.

(d) Location.--The demonstration project shall be located in a

western State at an altitude of greater than 4,000 feet above sea level.

(e) Cost Sharing.--The Federal share of the cost of the

demonstration project shall be determined in accordance with section

988.

(f) Loan Guarantees.--Notwithstanding title XIV, the demonstration

project shall not be eligible for Federal loan guarantees.

SEC. 414. <<NOTE: 42 USC 15974.>> 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

[[Page 119 STAT. 756]]

energy generation markets and that does not receive any subsidy (direct

or indirect) from ratepayers.

SEC. 415. <<NOTE: 42 USC 15975.>> PETROLEUM COKE GASIFICATION.

The Secretary is authorized to provide loan guarantees for at least

5 petroleum coke gasification projects.

SEC. 416. <<NOTE: 42 USC 15976.>> 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.

SEC. 417. <<NOTE: 42 USC 15977.>> DEPARTMENT OF ENERGY TRANSPORTATION

FUELS FROM ILLINOIS BASIN COAL.

(a) In General.--The Secretary shall carry out a program to evaluate

the commercial and technical viability of advanced technologies for the

production of Fischer-Tropsch transportation fuels, and other

transportation fuels, manufactured from Illinois basin coal, including

the capital modification of existing facilities and the construction of

testing facilities under subsection (b).

(b) Facilities.--For the purpose of evaluating the commercial and

technical viability of different processes for producing Fischer-Tropsch

transportation fuels, and other transportation fuels, from Illinois

basin coal, the Secretary shall support the use and capital modification

of existing facilities and the construction of new facilities at--

(1) Southern Illinois University Coal Research Center;

(2) University of Kentucky Center for Applied Energy

Research; and

(3) Energy Center at Purdue University.

(c) Gasification Products Test Center.--In conjunction with the

activities described in subsections (a) and (b), the Secretary shall

construct a test center to evaluate and confirm liquid and gas products

from syngas catalysis in order that the system has an output of at least

500 gallons of Fischer-Tropsch transportation fuel per day in a 24-hour

operation.

(d) <<NOTE: Deadlines.>> Milestones.--

(1) Selection of processes.--Not later than 180 days after

the date of enactment of this Act, the Secretary shall select

processes for evaluating the commercial and technical viability

of different processes of producing Fischer-Tropsch

transportation fuels, and other transportation fuels, from

Illinois basin coal.

(2) Agreements.--Not later than 1 year after the date of

enactment of this Act, the Secretary shall offer to enter into

agreements--

(A) to carry out the activities described in this

section, at the facilities described in subsection (b);

and

(B) for the capital modifications or construction of

the facilities at the locations described in subsection

(b).

(3) Evaluations.--Not later than 3 years after the date of

enactment of the Act, the Secretary shall begin, at the

facilities described in subsection (b), evaluation of the

technical and commercial viability of different processes of

producing Fischer-Tropsch transportation fuels, and other

transportation fuels, from Illinois basin coal.

[[Page 119 STAT. 757]]

(4) Construction of facilities.--

(A) In general.--The Secretary shall construct the

facilities described in subsection (b) at the lowest

cost practicable.

(B) Grants or agreements.--The Secretary may make

grants or enter into agreements or contracts with the

institutions of higher education described in subsection

(b).

(e) Cost Sharing.--The cost of making grants under this section

shall be shared in accordance with section 988.

(f) Authorization of Appropriations.--There is authorized to be

appropriated to carry out this section $85,000,000 for the period of

fiscal years 2006 through 2010.

Subtitle C--Coal and Related Programs

SEC. 421. AMENDMENT OF THE ENERGY POLICY ACT OF 1992.

(a) Amendment.--The Energy Policy Act of 1992 (42 U.S.C. 13201 et

seq.) is amended by adding at the end the following:

``TITLE XXXI--CLEAN AIR COAL PROGRAM

``SEC. 3101. <<NOTE: 42 USC 13571.>> 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 of clean

coal generation, and increase the marketplace acceptance of

clean coal generation and pollution control equipment and

processes; and

``(3) facilitate the environmental performance of clean coal

generation.

``SEC. 3102. <<NOTE: 42 USC 13572.>> AUTHORIZATION OF PROGRAM.

``(a) In General.--The Secretary shall carry out a program of

financial assistance to--

``(1) facilitate the production and generation of coal-based

power, through the deployment of clean coal electric generating

equipment and processes that, compared to equipment or processes

that are in operation on a full scale--

``(A) improve--

``(i) energy efficiency; or

``(ii) environmental performance consistent

with relevant Federal and State clean air

requirements, including those promulgated under

the Clean Air Act (42 U.S.C. 7401 et seq.); and

``(B) are not yet cost competitive; and

``(2) facilitate the utilization of existing coal-based

electricity generation plants through projects that--

``(A) deploy advanced air pollution control

equipment and processes; and

``(B) are designed to voluntarily enhance

environmental performance above current applicable

obligations under the

[[Page 119 STAT. 758]]

Clean Air Act and State implementation efforts pursuant

to such Act.

``(b) Financial Criteria.--As determined by the Secretary for a

particular project, financial assistance under this title shall be in

the form of--

``(1) cost-sharing of an appropriate percentage of the total

project cost, not to exceed 50 percent as calculated under

section 988 of the Energy Policy Act of 2005; or

``(2) financial assistance, including grants, cooperative

agreements, or loans as authorized under this Act or other

statutory authority of the Secretary.

``SEC. 3103. <<NOTE: 42 USC 13573.>> GENERATION PROJECTS.

``(a) Eligible Projects.--Projects supported under section

3102(a)(1) may include--

``(1) equipment or processes previously supported by a

Department of Energy program;

``(2) advanced combustion equipment and processes that the

Secretary determines will be cost-effective and could

substantially contribute to meeting environmental or energy

needs, including gasification, gasification fuel cells,

gasification coproduction, oxidation combustion techniques,

ultra-supercritical boilers, and chemical looping; and

``(3) hybrid gasification/combustion systems, including

systems integrating fuel cells with gasification or combustion

units.

``(b) Criteria.--The Secretary shall establish criteria for the

selection of generation projects under section 3102(a)(1). 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. The 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 whose installation is

likely to result in lower emission rates of pollution;

``(3) prioritization of projects that result in the

repowering or replacement of older, less efficient units;

``(4) documented broad interest in the procurement of the

equipment and utilization of the processes used in the projects

by owners or operators of facilities for electricity generation;

``(5) equipment and processes beginning in 2006 through 2011

that are projected to achieve a 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 passed 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

``(6) equipment and processes beginning in 2012 and 2013

that are projected to achieve a 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 passed on higher heating values; and

[[Page 119 STAT. 759]]

``(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.

``(c) Program Balance and Priority.--In carrying out the program

under section 3102(a)(1), the Secretary shall ensure, to the extent

practicable, that--

``(1) between 25 percent and 75 percent of the projects

supported are for the sole purpose of electrical generation; and

``(2) priority is given to projects that use electrical

generation equipment and processes that have been developed and

demonstrated and applied in actual production of electricity,

but are not yet cost-competitive, and that achieve greater

efficiency and environmental performance.

``(d) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary to carry out section 3102(a)(1)--

``(1) $250,000,000 for fiscal year 2007;

``(2) $350,000,000 for fiscal year 2008;

``(3) $400,000,000 for each of fiscal years 2009 through

2012; and

``(4) $300,000,000 for fiscal year 2013.

``(e) Applicability.--No technology, or level of emission reduction,

shall be treated as adequately demonstrated for purpose 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 one or more facilities receiving assistance under section

3102(a)(1).

``SEC. 3104. <<NOTE: 42 USC 13574.>> AIR QUALITY ENHANCEMENT PROGRAM.

``(a) Eligible Projects.--Projects supported under section

3102(a)(2) shall--

``(1) utilize technologies that meet relevant Federal and

State clean air requirements applicable to the unit or facility,

including being 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); or

``(2) utilize equipment or processes that exceed relevant

Federal or State clean air requirements applicable to the unit

or facilities included in the projects by achieving greater

efficiency or environmental performance.

``(b) Priority in Project Selection.--In making an award under

section 3102(a)(2), the Secretary shall give priority to--

``(1) projects whose installation is likely to result in

significant air quality improvements in nonattainment air

quality areas or substantially reduce the emission level of

criteria pollutants and mercury air emissions;

``(2) projects for pollution control that result in the

mitigation or collection of more than 1 pollutant; and

``(3) projects designed to allow the use of the waste

byproducts or other byproducts of the equipment.

[[Page 119 STAT. 760]]

``(c) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary to carry out section 3102(a)(2)--

``(1) $300,000,000 for fiscal year 2007;

``(2) $100,000,000 for fiscal year 2008;

``(3) $40,000,000 for fiscal year 2009;

``(4) $30,000,000 for fiscal year 2010; and

``(5) $30,000,000 for fiscal year 2011.

``(d) Applicability.--No technology, or level of emission reduction

under subsection (a)(2) shall be treated as adequately demonstrated for

purpose 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 one or more facilities receiving assistance

under section 3102(a)(2).''.

(b) 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 the following:

``TITLE XXXI--CLEAN AIR COAL PROGRAM

``Sec. 3101. Purposes.

``Sec. 3102. Authorization of program.

``Sec. 3103. Generation projects.

``Sec. 3104. Air quality enhancement program.''.

Subtitle D--Federal <<NOTE: Coal Leasing Amendments Act of 2005.>> Coal

Leases

SEC. 431. <<NOTE: 42 USC 15801.>> SHORT TITLE.

This subtitle may be cited as the ``Coal Leasing Amendments Act of

2005''.

SEC. 432. 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, by striking ``Any person'' and

inserting the following: ``(a)(1) Except as provided in

paragraph (3), on a finding by the Secretary under paragraph

(2), any person'';

(2) in the second sentence, by striking ``The Secretary''

and inserting the following:

``(b) The Secretary'';

(3) in the third sentence, by striking ``The minimum'' and

inserting the following:

``(c) The minimum'';

(4) in subsection (a) (as designated by paragraph (1))--

(A) by striking ``upon'' and all that follows and

inserting the following: ``secure modifications of the

original coal lease by including additional coal lands

or coal deposits contiguous or cornering to those

embraced in the lease.''; and

(B) by adding at the end the following:

``(2) A finding referred to in paragraph (1) is a finding by the

Secretary that the modifications--

``(A) would be in the interest of the United States;

``(B) would not displace a competitive interest in the

lands; and

[[Page 119 STAT. 761]]

``(C) would not include lands or deposits that can be

developed as part of another potential or existing operation.

``(3) In no case shall the total area added by modifications to an

existing coal lease under paragraph (1)--

``(A) exceed 960 acres; or

``(B) add acreage larger than that in the original lease.''.

SEC. 433. APPROVAL OF LOGICAL MINING UNITS.

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. 434. PAYMENT OF ADVANCE ROYALTIES UNDER COAL LEASES.

Section 7(b) of the Mineral Leasing Act (30 U.S.C. 207(b)) is

amended--

(1) in the first sentence, by striking ``Each lease'' and

inserting the following: ``(1) Each lease'';

(2) in the second sentence, by striking ``The Secretary''

and inserting the following:

``(2) The Secretary'';

(3) in the third sentence, by striking ``Such advance

royalties'' and inserting the following:

``(3) Advance royalties described in paragraph (2)'';

(4) in the seventh sentence, by striking ``The Secretary''

and inserting the following:

``(6) The Secretary'';

(5) in the last sentence, by striking ``Nothing'' and

inserting the following:

``(7) Nothing'';

(6) by striking the fourth, fifth, and sixth sentences; and

(7) by inserting after paragraph (3) (as designated by

paragraph (3)) the following:

``(4) Advance royalties described in paragraph (2) shall be

computed--

``(A) based on--

``(i) the average price in the spot market for sales

of comparable coal from the same region during the last

month of each applicable continued operation year; or

``(ii) in the absence of a spot market for

comparable coal from the same region, by using a

comparable method established by the Secretary of the

Interior to capture the commercial value of coal; and

``(B) based on commercial quantities, as defined by

regulation by the Secretary of the Interior.

``(5) The aggregate number of years during the period of any lease

for which advance royalties may be accepted in lieu of the condition of

continued operation shall not exceed 20 years.

``(6) 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 a lease described in paragraph (5) to the

[[Page 119 STAT. 762]]

extent that the advance royalties have not been used to reduce

production royalties for a prior year.''.

SEC. 435. 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 by striking ``and not later than three years after a lease is

issued,''.

SEC. 436. 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 to guarantee payment of

deferred bonus bid installment with respect to any coal lease issued

before the date of the enactment of the Energy Policy Act of 2005 only

if the Secretary determines that the lessee has a history of making

timely payments referred to in subparagraph (A).

``(5) <<NOTE: Deadline. Notices.>> 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. 437. <<NOTE: 42 USC 15991.>> 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) Federal lands with coal resources that are

available for development;

(B) the extent and nature of any restrictions on the

development of coal resources on Federal lands

identified under paragraph (1); and

(C) with respect to areas of such lands for which

sufficient data exists, resources of compliant coal and

supercompliant coal.

(2) Definitions.--For purposes of this subsection--

(A) 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; and

(B) 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 Sec- retary--

[[Page 119 STAT. 763]]

(1) <<NOTE: Deadline.>> shall complete the inventory under

subsection (a) by not later than 2 years after the date of

enactment of this Act; and

(2) shall update the inventory as the availability of data

and developments in technology warrant.

(c) Report.--The Secretary shall submit to the Committee on

Resources of the House of Representatives and to the Committee on Energy

and Natural Resources of the Senate 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 such inventory.

SEC. 438. <<NOTE: 30 USC 201 note.>> APPLICATION OF AMENDMENTS.

The amendments made by this subtitle apply with respect to any coal

lease issued before, on, or after the date of the enactment of this Act.

TITLE V--INDIAN <<NOTE: Indian Tribal Energy Development and Self-

Determination Act of 2005.>> ENERGY

SEC. 501. <<NOTE: 42 USC 15801 note.>> SHORT TITLE.

This title may be cited as the ``Indian Tribal Energy Development

and Self-Determination Act of 2005''.

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 <<NOTE: 42 USC 7144e.>> 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--

[[Page 119 STAT. 764]]

(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 after the item related to the Inspector General,

Department of Energy the following new item:

``Director, Office of Indian Energy Policy and Programs,

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. <<NOTE: 25 USC 3501.>> DEFINITIONS.

``In 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

State or States.

``(4)(A) 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).

[[Page 119 STAT. 765]]

``(B) For the purpose of paragraph (12) and sections

2603(b)(1)(C) and 2604, the term `Indian tribe' does 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 `sequestration' means the long-term

separation, isolation, or removal of greenhouse gases from the

atmosphere, including through a biological or geologic method

such as reforestation or an underground reservoir.

``(11) The term `tribal energy resource development

organization' means an organization of two or more entities, at

least one 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 under section 2602.

``(12) 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 is subject to a restriction against

alienation under laws of the United States.

``SEC. 2602. <<NOTE: 25 USC 3502.>> 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) <<NOTE: Grants.>> 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;

[[Page 119 STAT. 766]]

``(C) <<NOTE: Loans.>> 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; and

``(D) provide grants and technical assistance to an

appropriate tribal environmental organization, as

determined by the Secretary, that represents multiple

Indian tribes to establish a national resource center to

develop tribal capacity to establish and carry out

tribal environmental programs in support of energy-

related programs and activities under this title,

including--

``(i) training programs for tribal

environmental officials, program managers, and

other governmental representatives;

``(ii) the development of model environmental

policies and tribal laws, including tribal

environmental review codes, and the creation and

maintenance of a clearinghouse of best

environmental management practices; and

``(iii) recommended standards for reviewing

the implementation of tribal environmental laws

and policies within tribal judicial or other

tribal appeals systems.

``(3) <<NOTE: Appropriation authorization.>> There are

authorized to be appropriated to carry out this subsection such

sums as are necessary for each of fiscal years 2006 through

2016.

``(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, including the creation of tribal utilities

to assist in securing electricity to promote

electrification of homes and businesses on Indian land;

``(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 shall develop a program to support and

implement research projects that provide Indian tribes with

opportunities to participate in carbon sequestration practices

on Indian land, including--

``(i) geologic sequestration;

``(ii) forest sequestration;

``(iii) agricultural sequestration; and

[[Page 119 STAT. 767]]

``(iv) any other sequestration opportunities the

Director considers to be appropriate.

``(B) The activities carried out under subparagraph (A)

shall be--

``(i) coordinated with other carbon sequestration

research and development programs conducted by the

Secretary of Energy;

``(ii) conducted to determine methods consistent

with existing standardized measurement protocols to

account and report the quantity of carbon dioxide or

other greenhouse gases sequestered in projects that may

be implemented on Indian land; and

``(iii) reviewed periodically to collect and

distribute to Indian tribes information on carbon

sequestration practices that will increase the

sequestration of carbon without threatening the social

and economic well-being of Indian tribes.

``(4)(A) The Director, in consultation with Indian tribes,

may develop a formula for providing grants under this

subsection.

``(B) In providing a grant under this subsection, the

Director shall give priority to any application received from an

Indian tribe with inadequate electric service (as determined by

the Director).

``(C) In providing a grant under this subsection for an

activity to provide, or expand the provision of, electricity on

Indian land, the Director shall encourage cooperative

arrangements between Indian tribes and utilities that provide

service to Indian tribes, as the Director determines to be

appropriate.

``(5) The Secretary of Energy may issue such regulations as

the Secretary determines to be necessary to carry out this

subsection.

``(6) <<NOTE: Appropriation authorization.>> There is

authorized to be appropriated to carry out this subsection

$20,000,000 for each of fiscal years 2006 through 2016.

``(c) Department of Energy Loan Guarantee Program.--

``(1) Subject to paragraphs (2) and (4), 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 an

amount equal to not more than 90 percent of the unpaid principal

and interest due on any loan made to an Indian tribe for energy

development.

``(2) In providing a loan guarantee under this subsection

for an activity to provide, or expand the provision of,

electricity on Indian land, the Secretary of Energy shall

encourage cooperative arrangements between Indian tribes and

utilities that provide service to Indian tribes, as the

Secretary determines to be appropriate.

``(3) 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.

``(4) The aggregate outstanding amount guaranteed by the

Secretary of Energy at any time under this subsection shall not

exceed $2,000,000,000.

[[Page 119 STAT. 768]]

``(5) <<NOTE: Appropriation authorization.>> The Secretary

of Energy may issue such regulations as the Secretary of Energy

determines are necessary to carry out this subsection.

``(6) There are authorized to be appropriated such sums as

are necessary to carry out this subsection, to remain available

until expended.

``(7) <<NOTE: Deadline. Reports.>> Not later than 1 year

after the date of enactment of this section, the Secretary of

Energy shall submit to Congress a report on the financing

requirements of Indian tribes for energy development on Indian

land.

``(d) 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. <<NOTE: 25 USC 3503.>> 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)(A) by an Indian tribe for the development of a tribal

energy resource inventory or tribal energy resource on Indian

land;

``(B) by an Indian tribe for the development of a

feasibility study or other report necessary to the development

of energy resources on Indian land;

``(C) by an Indian tribe (other than an Indian Tribe in the

State of Alaska, except the Metlakatla Indian Community) for--

``(i) the development and enforcement of tribal laws

(including regulations) relating to tribal energy

resource development; and

``(ii) the development of technical infrastructure

to protect the environment under applicable law; or

``(D) 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

``(2) 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.--

``(1) 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 on the request of an Indian tribe, the Indian tribe shall

[[Page 119 STAT. 769]]

have available scientific and technical information and

expertise, for use in the regulation, development, and

management of energy resources of the Indian tribe on Indian

land.

``(2) The Secretary may carry out paragraph (1)--

``(A) directly, through the use of Federal

officials; or

``(B) indirectly, by providing financial assistance

to an Indian tribe to secure independent assistance.

``SEC. 2604. <<NOTE: 25 USC 3504.>> LEASES, BUSINESS AGREEMENTS, AND

RIGHTS-OF-WAY INVOLVING ENERGY DEVELOPMENT OR TRANSMISSION.

``(a) Leases and Business Agreements.--In accordance with this

section--

``(1) an Indian tribe may, at the discretion of the Indian

tribe, 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 energy mineral resources of

the Indian tribe located on tribal land; or

``(B) construction or operation of--

``(i) an electric generation, transmission, or

distribution facility located on tribal land; or

``(ii) a facility to process or refine energy

resources developed on tribal land; and

``(2) a lease or business agreement described in paragraph

(1) shall not require review by or 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 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 review or 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--

[[Page 119 STAT. 770]]

``(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 activities of the Indian tribe under an 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 under this

section shall be valid unless the lease, business agreement, or right-

of-way is authorized by a tribal energy resource agreement approved by

the Secretary under subsection (e)(2).

``(e) Tribal Energy Resource Agreements.--

``(1) On the date on which regulations are promulgated 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) <<NOTE: Deadlines.>> Not later than 270 days after

the date on which the Secretary receives a tribal energy

resource agreement from an Indian tribe under paragraph (1), or

not later than 60 days after the Secretary receives a revised

tribal energy resource agreement from an Indian tribe under

paragraph (4)(C) (or a later date, as 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;

[[Page 119 STAT. 771]]

``(VI) establish requirements for

environmental review in accordance with

subparagraph (C);

``(VII) ensure compliance with all applicable

environmental laws, including a requirement that

each lease, business agreement, and right-of-way

state that the lessee, operator, or right-of-way

grantee shall comply with all such laws;

``(VIII) identify final approval authority;

``(IX) provide for public notification of

final approvals;

``(X) establish a process for consultation

with any affected States regarding off-reservation

impacts, if any, identified 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, if any of its provisions violates an express

term or requirement of the tribal energy resource

agreement pursuant to which the lease, business

agreement, or right-of-way was executed--

``(aa) the provision shall be null

and void; and

``(bb) if the Secretary determines

the provision to be material, the

Secretary may 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 promulgated under

paragraph (8);

``(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 under

paragraph (7)(B);

``(XV) specify the financial assistance, if

any, to be provided by the Secretary to the Indian

tribe to assist in implementation of the tribal

energy resource agreement, including environmental

review of individual projects; and

``(XVI) in accordance with the regulations

promulgated by the Secretary under paragraph (8),

require that the Indian tribe, as soon as

practicable after receipt of a notice by the

Indian tribe, give written notice to the Secretary

of--

``(aa) any breach or other violation

by another party of any provision in a

lease, business agreement, or right-of-

way entered into under the tribal energy

resource agreement; and

``(bb) any activity or occurrence

under a lease, business agreement, or

right-of-way that constitutes a

violation of Federal or tribal

environmental laws.

[[Page 119 STAT. 772]]

``(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, at a minimum--

``(i) the identification and evaluation of all

significant environmental effects (as compared to

a no-action alternative), including effects on

cultural resources;

``(ii) the identification of proposed

mitigation measures, if any, and incorporation of

appropriate mitigation measures into the lease,

business agreement, or right-of-way;

``(iii) a process for ensuring that--

``(I) the public is informed of, and

has an opportunity to comment on, the

environmental impacts of the proposed

action; and

``(II) responses to relevant and

substantive comments are provided,

before tribal approval of the lease,

business agreement, or right-of-way;

``(iv) sufficient administrative support and

technical capability to carry out the

environmental review process; and

``(v) oversight by the Indian tribe of energy

development activities by any other party under

any lease, business agreement, or right-of-way

entered into pursuant to the tribal energy

resource agreement, to determine whether the

activities are in compliance with the tribal

energy resource agreement and applicable Federal

environmental laws.

``(D) A tribal energy resource agreement between the

Secretary and an Indian tribe under this subsection

shall include--

``(i) provisions requiring the Secretary to

conduct a periodic review and evaluation to

monitor the performance of the activities of the

Indian tribe associated with the development of

energy resources under the tribal energy resource

agreement; and

``(ii) if a periodic review and evaluation, or

an investigation, by the Secretary of any breach

or violation described in a notice provided by the

Indian tribe to the Secretary in accordance with

subparagraph (B)(iii)(XVI), results 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 actions determined by the Secretary to be

necessary to protect the asset, including

reassumption of responsibility for activities

associated with the development of energy

resources on tribal land until the violation and

any condition that caused the jeopardy are

corrected.

``(E) Periodic review and evaluation under

subparagraph (D) shall be conducted on an annual basis,

except that, after the third annual review and

evaluation, the Secretary and the Indian tribe may

mutually agree to amend the tribal energy resource

agreement to authorize

[[Page 119 STAT. 773]]

the review and evaluation under subparagraph (D) to be

conducted once every 2 years.

``(3) <<NOTE: Notice. Public information.>> 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 shall be limited to activities specified by

the provisions of the tribal energy resource agreement.

``(4) <<NOTE: Deadline.>> 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) <<NOTE: Notification.>> 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 under regulations promulgated under paragraph (8),

provide to the Secretary--

``(A) <<NOTE: Records.>> 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 rights of the Indian tribe

under, the lease, business agreement, or right-of-way.

``(6)(A) In carrying out this section, the Secretary shall--

``(i) act in accordance 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 fulfill the trust

obligation of the United States to ensure that the rights and

interests of an Indian tribe are protected if--

``(i) any other party to a lease, business

agreement, or right-of-way violates any applicable

Federal law or the

[[Page 119 STAT. 774]]

terms of any lease, business agreement, or right-of-way

under this section; or

``(ii) any provision in a lease, business agreement,

or right-of-way violates the tribal energy resource

agreement pursuant to which the lease, business

agreement, or right-of-way was executed.

``(D)(i) In this subparagraph, the term `negotiated term'

means any term or provision that is negotiated by an Indian

tribe and any other party to a lease, business agreement, or

right-of-way entered into pursuant to an approved tribal energy

resource agreement.

``(ii) Notwithstanding subparagraph (B), the United States

shall not be liable to any party (including any Indian tribe)

for any negotiated term of, or any loss 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).

``(7)(A) In this paragraph, the term `interested party'

means any person (including an entity) that has demonstrated

that an interest of the person has sustained, or will sustain,

an 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 any tribal remedy, and in

accordance with regulations promulgated by the Secretary under

paragraph (8), an interested party may submit to the Secretary a

petition to review the compliance by an Indian tribe with a

tribal energy resource agreement of the Indian tribe approved by

the Secretary under paragraph (2).

``(C)(i) <<NOTE: Deadline.>> Not later than 20 days after

the date on which the Secretary receives a petition under

subparagraph (B), the Secretary shall--

``(I) <<NOTE: Records.>> provide to the Indian tribe

a copy of the petition; and

``(II) consult with the Indian tribe regarding any

noncompliance alleged in the petition.

``(ii) <<NOTE: Deadline. Claims.>> Not later than 45 days

after the date on which a consultation under clause (i)(II)

takes place, the Indian tribe shall respond to any claim made in

a petition under subparagraph (B).

``(iii) The Secretary shall act in accordance with

subparagraphs (D) and (E) only if the Indian tribe--

``(I) denies, or fails to respond to, each claim

made in the petition within the period described in

clause (ii); or

``(II) fails, refuses, or is unable to cure or

otherwise resolve each claim made in the petition within

a reasonable period, as determined by the Secretary,

after the expiration of the period described in clause

(ii).

``(D)(i) <<NOTE: Deadline.>> 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.

``(ii) The Secretary may adopt procedures under paragraph

(8) authorizing an extension of time, not to exceed 120 days,

[[Page 119 STAT. 775]]

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 (E), if the Secretary

determines that the Indian tribe is not in compliance with the

tribal energy resource agreement, the Secretary shall take such

action as the Secretary determines to be necessary to ensure

compliance with the tribal energy resource agreement,

including--

``(I) temporarily suspending any activity under a

lease, business agreement, or right-of-way under this

section until the Indian tribe is in compliance with the

approved tribal energy resource agreement; or

``(II) rescinding approval of all or part of the

tribal energy resource agreement, and if all of the

agreement is rescinded, reassuming the responsibility

for approval of any future leases, business agreements,

or rights-of-way described in subsection (a) or (b).

``(E) Before taking an action described in subparagraph

(D)(iii), the Secretary shall--

``(i) make a written determination that describes

the manner in which the tribal energy resource agreement

has been violated;

``(ii) <<NOTE: Notice.>> 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 (D)(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.

``(F) An Indian tribe described in subparagraph (E) shall

retain all rights to appeal under any regulation promulgated by

the Secretary.

``(8) <<NOTE: Deadline. Regulations.>> Not later than 1 year

after the date of enactment of the Energy Policy Act of 2005,

the Secretary shall promulgate regulations that implement this

subsection, including--

``(A) criteria to be used in determining the

capacity of an Indian tribe under 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 lease,

business agreement, or right-of-way under this

subsection;

``(C) provisions establishing the scope of, and

procedures for, the periodic review and evaluation

described in subparagraphs (D) and (E) of paragraph (2),

including

[[Page 119 STAT. 776]]

provisions for review of transactions, reports, site

inspections, and any other review activities the

Secretary determines to be appropriate; and

``(D) provisions describing 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 environmental 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.).

``(g) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary such sums as are necessary for each of

fiscal years 2006 through 2016 to carry out 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 this section.

``SEC. 2605. <<NOTE: 25 USC 3505.>> 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 the Administrators determine to be appropriate,

including administration of programs of the power marketing

administration, in accordance with this section.

``(c) Action by Administrators.--In carrying out this section, in

accordance with laws in existence on the date of enactment of the Energy

Policy Act of 2005--

``(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--

``(A) pay more than the prevailing market price for

an energy product; or

``(B) obtain less than prevailing market terms and

conditions.

``(d) Assistance for Transmission System Use.--

[[Page 119 STAT. 777]]

``(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--

``(A) by the Secretary of Energy using

nonreimbursable funds appropriated for that purpose; or

``(B) by any appropriate Indian tribe.

``(e) Power Allocation Study.--

Not <<NOTE: Deadline. Reports.>> later than 2 years after the date of

enactment of the Energy Policy Act of 2005, the Secretary of Energy

shall submit to Congress a report that--

``(1) describes the use by Indian tribes of Federal power

allocations of the power marketing administration (or power sold

by the Southwestern Power Administration) to or for the benefit

of Indian tribes in a service area of the power marketing

administration; 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

any other power marketing administration; 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, non-reimbursable, to

remain available until expended.

``SEC. 2606. <<NOTE: 25 USC 3506.>> 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 uses

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 economic and engineering feasibility of

blending wind energy and hydropower generated from the Missouri

River dams operated by the Army Corps of Engineers, including an

assessment of the costs and benefits of blending wind energy and

hydropower compared to current sources used for firming power to

the Western Area Power Administration;

``(2) review historical and projected requirements for,

patterns of availability and use of, and reasons for historical

patterns concerning the availability 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 identify costs associated with these activities;

``(5) include an independent tribal engineer and a Western

Area Power Administration customer representative as study team

members; and

[[Page 119 STAT. 778]]

``(6) incorporate, to the extent appropriate, the results of

the Dakotas Wind Transmission study prepared by the Western Area

Power Administration.

``(c) Report.--Not later than 1 year after the date of enactment of

the Energy Policy Act of 2005, the Secretary of Energy, the Secretary,

and the Secretary of the Army shall submit to Congress a report that

describes the results of the study, including--

``(1) an analysis and comparison 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 economic and engineering 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) if found feasible, recommendations for a demonstration

project to be carried out by the Western Area Power

Administration, in partnership with an Indian tribal government

or tribal energy resource development organization, and Western

Area Power Administration customers to demonstrate the

feasibility and potential of using wind energy produced on

Indian land to supply firming energy to the Western Area Power

Administration; and

``(4) an identification of--

``(A) the economic and environmental costs of, or

benefits to be realized through, a Federal-tribal-

customer partnership; and

``(B) the manner in which a Federal-tribal-customer

partnership could contribute to the energy security of

the United States.

``(d) Funding.--

``(1) Authorization of appropriations.--There is authorized

to be appropriated to carry out this section $1,000,000, 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. Federal Power Marketing Administrations.

``Sec. 2606. Wind and hydropower feasibility study.''.

SEC. 504. <<NOTE: 25 USC 3501 note.>> CONSULTATION WITH INDIAN TRIBES.

In carrying out this title and the amendments made by this title,

the Secretary and the Secretary of the Interior shall, as appropriate

and to the maximum extent practicable, involve and consult with Indian

tribes.

SEC. 505. FOUR CORNERS TRANSMISSION LINE PROJECT AND ELECTRIFICATION.

(a) Transmission Line Project.--The Dine Power Authority, an

enterprise of the Navajo Nation, shall be eligible to receive grants and

other assistance under section 217 of the Department of Energy

Organization Act, as added by section 502, and section

[[Page 119 STAT. 779]]

2602 of the Energy Policy Act of 1992, as amended by this Act, for

activities associated with the development of a transmission line from

the Four Corners Area to southern Nevada, including related power

generation opportunities.

(b) Navajo Electrification.--Section 602 of Public Law 106-511 (114

Stat. 2376) is amended--

(1) in subsection (a)--

(A) in the first sentence, by striking ``5-year''

and inserting ``10-year''; and

(B) in the third sentence, by striking ``2006'' and

inserting ``2011''; and

(2) in the first sentence of subsection (e) by striking

``2006'' and inserting ``2011''.

SEC. 506. <<NOTE: 42 USC 16001.>> 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,''.

TITLE VI--NUCLEAR MATTERS

Subtitle A--Price-Anderson <<NOTE: Price-Anderson Amendments Act of

2005.>> Act Amendments

SEC. 601. <<NOTE: 42 USC 2011 note.>> SHORT TITLE.

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

2005''.

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, 2025''.

(b) Indemnification of Department 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, 2006'' and inserting ``December 31, 2025''.

(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, 2025''.

[[Page 119 STAT. 780]]

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 LIABILITY LIMIT.

(a) Indemnification of Department 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 2005, 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.''.

[[Page 119 STAT. 781]]

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,

2021''.

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

two 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. <<NOTE: 42 USC 2210 note.>> 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. 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.

[[Page 119 STAT. 782]]

``(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 <<NOTE: 42 USC 2282a note.>> 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. NUCLEAR REGULATORY COMMISSION SCHOLARSHIP AND FELLOWSHIP

PROGRAM.

(a) In General.--Chapter 19 of the Atomic Energy Act of 1954 is

amended by inserting after section 242 (42 U.S.C. 2015a) the following:

``SEC. 243. <<NOTE: 42 USC 2015b.>> SCHOLARSHIP AND FELLOWSHIP PROGRAM.

``a. Scholarship Program.--To enable students to study, for at least

1 academic semester or equivalent term, science, engineering, or another

field of study that the Commission determines is in a critical skill

area related to the regulatory mission of the Commission, the Commission

may carry out a program to--

``(1) award scholarships to undergraduate students who--

``(A) are United States citizens; and

``(B) enter into an agreement under subsection c. to

be employed by the Commission in the area of study for

which the scholarship is awarded.

``b. Fellowship Program.--To enable students to pursue education in

science, engineering, or another field of study that the Commission

determines is in a critical skill area related to its regulatory

mission, in a graduate or professional degree program offered by an

institution of higher education in the United States, the Commission may

carry out a program to--

``(1) award fellowships to graduate students who--

``(A) are United States citizens; and

``(B) enter into an agreement under subsection c. to

be employed by the Commission in the area of study for

which the fellowship is awarded.

``c. Requirements.--

``(1) In general.--As a condition of receiving a scholarship

or fellowship under subsection a. or b., a recipient of the

scholarship or fellowship shall enter into an agreement with the

Commission under which, in return for the assistance, the

recipient shall--

``(A) maintain satisfactory academic progress in the

studies of the recipient, as determined by criteria

established by the Commission;

``(B) agree that failure to maintain satisfactory

academic progress shall constitute grounds on which the

Commission may terminate the assistance;

[[Page 119 STAT. 783]]

``(C) on completion of the academic course of study

in connection with which the assistance was provided,

and in accordance with criteria established by the

Commission, engage in employment by the Commission for a

period specified by the Commission, that shall be not

less than 1 time and not more than 3 times the period

for which the assistance was provided; and

``(D) if the recipient fails to meet the

requirements of subparagraph (A), (B), or (C), reimburse

the United States Government for--

``(i) the entire amount of the assistance

provided the recipient under the scholarship or

fellowship; and

``(ii) interest at a rate determined by the

Commission.

``(2) Waiver or suspension.--The Commission may establish

criteria for the partial or total waiver or suspension of any

obligation of service or payment incurred by a recipient of a

scholarship or fellowship under this section.

``d. Competitive Process.--Recipients of scholarships or fellowships

under this section shall be selected through a competitive process

primarily on the basis of academic merit and such other criteria as the

Commission may establish, 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, 1885b).

``e. Direct Appointment.--The Commission may appoint directly, with

no further competition, public notice, or consideration of any other

potential candidate, an individual who has--

``(1) received a scholarship or fellowship awarded by the

Commission under this section; and

``(2) completed the academic program for which the

scholarship or fellowship was awarded.''.

(b) Conforming Amendment.--The table of sections of the Atomic

Energy Act of 1954 (42 U.S.C. prec. 2011) is amended by adding after the

item relating to section 242 the following:

``Sec. 243. Scholarship and fellowship program.''.

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 FOR CERTAIN REHIRED FEDERAL

RETIREES.

(a) In General.--Chapter 14 of the Atomic Energy Act of 1954 (42

U.S.C. 2201 et seq.) is amended by adding at the end the following:

[[Page 119 STAT. 784]]

``SEC. 170C. <<NOTE: 42 USC 2210c.>> ELIMINATION OF PENSION OFFSET FOR

CERTAIN REHIRED FEDERAL RETIREES.

``a. In General.--The Commission may waive the application of

section 8344 or 8468 of title 5, United States Code, on a case-by-case

basis for employment of an annuitant--

``(1) in a position of the Commission for which there is

exceptional difficulty in recruiting or retaining a qualified

employee; or

``(2) when a temporary emergency hiring need exists.

``b. Procedures.--The Commission shall prescribe procedures for the

exercise of authority under this section, including--

``(1) criteria for any exercise of authority; and

``(2) procedures for a delegation of authority.

``c. Effect of Waiver.--An employee as to whom a waiver under this

section is in effect shall not be considered an employee for purposes of

subchapter II of chapter 83, or chapter 84, of title 5, United States

Code.''.

(b) Conforming Amendment.--The table of sections of the Atomic

Energy Act of 1954 (42 U.S.C. prec. 2011) is amended by adding at the

end of the items relating to chapter 14 the following:

``Sec. 170C. Elimination of pension offset for certain rehired Federal

retirees.''.

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.

Title II of the Energy Reorganization Act of 1974 (42 U.S.C. 5841 et

seq.) is amended by adding at the end the following new section:

``limitation on legal fee reimbursement

``Sec. 212. <<NOTE: 42 USC 5853.>> The Department of Energy shall

not, except as required under a contract entered into before the date of

enactment of this section, 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

[[Page 119 STAT. 785]]

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 this Act; 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 this Act, 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 shall establish a decommissioning

pilot program under which the Secretary shall 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 report of the Department

relating to the reactor, dated August 31, 1998.

(b) Authorization of Appropriations.--There is authorized to be

appropriated to the Secretary to carry out this section $16,000,000.

SEC. 629. 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 a semicolon; and

(3) by adding at the end the following:

``(E) a contractor or subcontractor of the

Commission;

``(F) the Commission; and

``(G) the Department of Energy.''.

(b) De Novo Review.--Subsection (b) of such section 211 is amended

by adding at the end the following new paragraph:

``(4) <<NOTE: Deadline.>> If the Secretary has not issued a

final decision within 1 year 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. 630. 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.

[[Page 119 STAT. 786]]

``(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.--

[[Page 119 STAT. 787]]

``(A) NAS study.--The <<NOTE: Contracts.>> 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 2005, 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 2005, the Secretary shall submit to Congress a

report that describes options for developing domestic supplies

of medical isotopes in quantities that are

[[Page 119 STAT. 788]]

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. 631. SAFE DISPOSAL OF GREATER-THAN-CLASS C RADIOACTIVE WASTE.

(a) Responsibility for <<NOTE: Notification.>> Activities To Provide

Storage Facility.--The Secretary shall provide to Congress official

notification of the final designation of an entity within the Department

to have the responsibility of completing activities needed to provide a

facility for safely disposing of all greater-than-Class C low-level

radioactive waste.

(b) Reports and Plans.--

(1) Report on permanent disposal facility.--

(A) Plan regarding cost and schedule for completion

of eis and rod.--Not later than 1 year after the date of

enactment of this Act, the Secretary, in consultation

with Congress, shall submit to Congress a report

containing an estimate of the cost and a proposed

schedule to complete an environmental impact statement

and record of decision for a permanent disposal facility

for greater-than-Class C radioactive waste.

(B) Analysis of alternatives.--Before the Secretary

makes a final decision on the disposal alternative or

alternatives to be implemented, the Secretary shall--

(i) submit to Congress a report that describes

all alternatives under consideration, including

all information required in the comprehensive

report making recommendations for ensuring the

safe disposal of all greater-than-Class C low-

level radioactive waste that was submitted by the

Secretary to Congress in February 1987; and

(ii) await action by Congress.

(2) Short-term plan for recovery and storage.--

(A) In general.--Not <<NOTE: Deadline.>> later than

180 days after the date of enactment of this Act, the

Secretary shall submit to Congress a plan to ensure the

continued recovery and storage of greater-than-Class C

low-level radioactive sealed sources that pose a

security threat until a permanent disposal facility is

available.

(B) Contents.--The plan shall address estimated

cost, resource, and facility needs.

SEC. 632. 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--

[[Page 119 STAT. 789]]

(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 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 <<NOTE: 42 USC 2158 note.>> 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

[[Page 119 STAT. 790]]

of the date of the enactment of this Act but have not yet been

transferred as of that date.

SEC. 633. EMPLOYEE BENEFITS.

Section 3110(a) of the USEC Privatization Act (42 U.S.C. 2297h-8(a))

is amended by adding at the end the following new paragraph:

``(8) Continuity of benefits.--

To <<NOTE: Deadline. Ohio. Kentucky.>> the extent appropriations are

provided in advance for this purpose or are otherwise available, not

later than 30 days after the date of enactment of this paragraph, the

Secretary shall implement such actions as are necessary to ensure that

any employee who--

``(A) is involved in providing infrastructure or

environmental remediation services at the Portsmouth, Ohio, or

the Paducah, Kentucky, Gaseous Diffusion Plant;

``(B) has been an employee of the Department of Energy's

predecessor management and integrating contractor (or its first

or second tier subcontractors), or of the Corporation, at the

Portsmouth, Ohio, or the Paducah, Kentucky, facility; and

``(C) was eligible as of April 1, 2005, to participate in or

transfer into the Multiple Employer Pension Plan or the

associated multiple employer retiree health care benefit plans,

as defined in those plans,

shall continue to be eligible to participate in or transfer into such

pension or health care benefit plans.''.

SEC. 634. <<NOTE: 42 USC 16011.>> DEMONSTRATION HYDROGEN PRODUCTION AT

EXISTING NUCLEAR POWER PLANTS.

(a) Demonstration Projects.--The Secretary shall provide for the

establishment of 2 projects in geographic areas that are regionally and

climatically diverse to demonstrate the commercial production of

hydrogen at existing nuclear power plants.

(b) Economic Analysis.--Prior to making an award under subsection

(a), the Secretary shall determine whether the use of existing nuclear

power plants is a cost-effective means of producing hydrogen.

(c) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary for the purposes of carrying out this

section not more than $100,000,000.

SEC. 635. <<NOTE: 42 USC 16012.>> PROHIBITION ON ASSUMPTION BY UNITED

STATES GOVERNMENT OF LIABILITY FOR CERTAIN FOREIGN

INCIDENTS.

(a) In General.--Notwithstanding 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

[[Page 119 STAT. 791]]

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

section shall not apply to nuclear incidents occurring as a result of

missions, carried out under the direction of the Secretary, 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.

(b) Definitions.--The terms used in this section shall have the same

meaning as those terms have under section 11 of the Atomic Energy Act of

1954 (42 U.S.C. 2014), unless otherwise expressly provided in this

section.

SEC. 636. <<NOTE: 42 USC 16013.>> AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated such sums as are necessary

to carry out this subtitle and the amendments made by this subtitle.

SEC. 637. NUCLEAR REGULATORY COMMISSION USER FEES AND ANNUAL CHARGES.

(a) In General.--Section 6101 of the Omnibus Budget Reconciliation

Act of 1990 (42 U.S.C. 2214) is amended--

(1) in subsection (a)--

(A) by striking ``Except as provided in paragraph

(3), the'' and inserting ``The'' in paragraph (1); and

(B) by striking paragraph (3); and

(2) in subsection (c)--

(A) by striking ``and'' at the end of paragraph

(2)(A)(i);

(B) by striking the period at the end of paragraph

(2)(A)(ii) and inserting a semicolon;

(C) by adding at the end of paragraph (2)(A) the

following new clauses:

``(iii) amounts appropriated to the Commission

for the fiscal year for implementation of section

3116 of the Ronald W. Reagan National Defense

Authorization Act for Fiscal Year 2005; and

``(iv) 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.''; and

(D) by amending paragraph (2)(B)(v) to read as

follows:

``(v) 90 percent for fiscal year 2005 and each

fiscal year thereafter.''.

(b) Repeal.--Section 7601 of the Consolidated Omnibus Budget

Reconciliation Act of 1985 (42 U.S.C. 2213) is repealed.

(c) Effective Date.--The <<NOTE: 42 USC 2214 note.>> amendments made

by this section take effect on October 1, 2006.

SEC. 638. <<NOTE: 42 USC 16014.>> STANDBY SUPPORT FOR CERTAIN NUCLEAR

PLANT DELAYS.

(a) Definitions.--In this section:

(1) Advanced nuclear facility.--The term ``advanced nuclear

facility'' means any nuclear facility the reactor design for

which is approved after December 31, 1993, by the Commission

(and such design or a substantially similar design of comparable

capacity was not approved on or before that date).

[[Page 119 STAT. 792]]

(2) Combined license.--The term ``combined license'' means a

combined construction and operating license for an advanced

nuclear facility issued by the Commission.

(3) Commission.--The term ``Commission'' means the Nuclear

Regulatory Commission.

(4) Sponsor.--The term ``sponsor'' means a person who has

applied for or been granted a combined license.

(b) Contract Authority.--

(1) In general.--The Secretary may enter into contracts

under this section with sponsors of an advanced nuclear facility

that cover a total of 6 reactors, with the 6 reactors consisting

of not more than 3 different reactor designs, in accordance with

paragraph (2).

(2) Requirement for contracts.--

(A) Definition of loan cost.--In this paragraph, the

term ``loan cost'' has the meaning given the term ``cost

of a loan guarantee'' under section 502(5)(C) of the

Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(C)).

(B) Establishment of accounts.--There is established

in the Department 2 separate accounts, which shall be

known as the--

(i) ``Standby Support Program Account''; and

(ii) ``Standby Support Grant Account''.

(C) Requirement.--The Secretary shall not enter into

a contract under this section unless the Secretary

deposits--

(i) in the Standby Support Program Account

established under subparagraph (B), funds

appropriated to the Secretary in advance of the

contract or a combination of appropriated funds

and loan guarantee fees that are in an amount

sufficient to cover the loan costs described in

subsection (d)(5)(A); and

(ii) in the Standby Support Grant Account

established under subparagraph (B), funds

appropriated to the Secretary in advance of the

contract, paid to the Secretary by the sponsor of

the advanced nuclear facility, or a combination of

appropriations and payments that are in an amount

sufficient cover the costs described in

subparagraphs (B), (C), and (D) of subsection

(d)(5).

(c) Covered Delays.--

(1) Inclusions.--Under each contract authorized by this

section, the Secretary shall pay the costs specified in

subsection (d), using funds appropriated or collected for the

covered costs, if full power operation of the advanced nuclear

facility is delayed by--

(A) the failure of the Commission to comply with

schedules for review and approval of inspections, tests,

analyses, and acceptance criteria established under the

combined license or the conduct of preoperational

hearings by the Commission for the advanced nuclear

facility; or

(B) litigation that delays the commencement of full-

power operations of the advanced nuclear facility.

(2) Exclusions.--The Secretary may not enter into any

contract under this section that would obligate the Secretary to

pay any costs resulting from--

[[Page 119 STAT. 793]]

(A) the failure of the sponsor to take any action

required by law or regulation;

(B) events within the control of the sponsor; or

(C) normal business risks.

(d) Covered Costs.--

(1) In general.--Subject to paragraphs (2), (3), and (4),

the costs that shall be paid by the Secretary pursuant to a

contract entered into under this section are the costs that

result from a delay covered by the contract.

(2) Initial 2 reactors.--In the case of the first 2 reactors

that receive combined licenses and on which construction is

commenced, the Secretary shall pay--

(A) 100 percent of the covered costs of delay; but

(B) not more than $500,000,000 per contract.

(3) Subsequent 4 reactors.--In the case of the next 4

reactors that receive a combined license and on which

construction is commenced, the Secretary shall pay--

(A) 50 percent of the covered costs of delay that

occur after the initial 180-day period of covered delay;

but

(B) not more than $250,000,000 per contract.

(4) Conditions on payment of certain covered costs.--

(A) In general.--The obligation of the Secretary to

pay the covered costs described in subparagraph (B) of

paragraph (5) is subject to the Secretary receiving from

appropriations or payments from other non-Federal

sources amounts sufficient to pay the covered costs.

(B) Non-federal sources.--The Secretary may receive

and accept payments from any non-Federal source, which

shall be made available without further appropriation

for the payment of the covered costs.

(5) Types of covered costs.--Subject to paragraphs (2), (3),

and (4), the contract entered into under this section for an

advanced nuclear facility shall include as covered costs those

costs that result from a delay during construction and in

gaining approval for fuel loading and full-power operation,

including--

(A) principal or interest on any debt obligation of

an advanced nuclear facility owned by a non-Federal

entity; and

(B) the incremental difference between--

(i) the fair market price of power purchased

to meet the contractual supply agreements that

would have been met by the advanced nuclear

facility but for the delay; and

(ii) the contractual price of power from the

advanced nuclear facility subject to the delay.

(e) Requirements.--Any contract between a sponsor and the Secretary

covering an advanced nuclear facility under this section shall require

the sponsor to use due diligence to shorten, and to end, the delay

covered by the contract.

(f) Reports.--For each advanced nuclear facility that is covered by

a contract under this section, the Commission shall submit to Congress

and the Secretary quarterly reports summarizing the status of licensing

actions associated with the advanced nuclear facility.

(g) Regulations.--

[[Page 119 STAT. 794]]

(1) In general.--Subject to paragraphs (2) and (3), the

Secretary shall issue such regulations as are necessary to carry

out this section.

(2) Interim final rulemaking.--Not <<NOTE: Deadline. Public

information.>> later than 270 days after the date of enactment

of this Act, the Secretary shall issue for public comment an

interim final rule regulating contracts authorized by this

section.

(3) Notice of final rulemaking.--

Not <<NOTE: Deadline.>> later than 1 year after the date of

enactment of this Act, the Secretary shall issue a notice of

final rulemaking regulating the contracts.

(h) Authorization of Appropriations.--There are authorized to be

appropriated such sums as are necessary to carry out this section.

SEC. 639. CONFLICTS OF INTEREST RELATING TO CONTRACTS AND OTHER

ARRANGEMENTS.

Section 170A b. of the Atomic Energy Act of 1954 (42 U.S.C.

2210a(b)) is amended--

(1) by redesignating paragraphs (1) and (2) as subparagraphs

(A) and (B), respectively, and indenting appropriately;

(2) by striking ``b. The Commission'' and inserting the

following:

``b. Evaluation.--

``(1) In general.--Except as provided in paragraph (2), the

Nuclear Regulatory Commission''; and

(3) by adding at the end the following:

``(2) Nuclear regulatory commission.--Notwithstanding any

conflict of interest, the Nuclear Regulatory Commission may

enter into a contract, agreement, or arrangement with the

Department of Energy or the operator of a Department of Energy

facility, if the Nuclear Regulatory Commission determines that--

``(A) the conflict of interest cannot be mitigated;

and

``(B) adequate justification exists to proceed

without mitigation of the conflict of interest.''.

Subtitle C--Next Generation Nuclear Plant Project

SEC. 641. <<NOTE: 42 USC 16021.>> PROJECT ESTABLISHMENT.

(a) Establishment.--The Secretary shall establish a project to be

known as the ``Next Generation Nuclear Plant Project'' (referred to in

this subtitle as the ``Project'').

(b) Content.--The Project shall consist of the research,

development, design, construction, and operation of a prototype plant,

including a nuclear reactor that--

(1) is based on research and development activities

supported by the Generation IV Nuclear Energy Systems Initiative

under section 942(d); and

(2) shall be used--

(A) to generate electricity;

(B) to produce hydrogen; or

(C) both to generate electricity and to produce

hydrogen.

[[Page 119 STAT. 795]]

SEC. 642. <<NOTE: 42 USC 16022.>> PROJECT MANAGEMENT.

(a) Departmental Management.--

(1) In general.--The Project shall be managed in the

Department by the Office of Nuclear Energy, Science, and

Technology.

(2) Generation iv nuclear energy systems program.--The

Secretary may combine the Project with the Generation IV Nuclear

Energy Systems Initiative.

(3) Existing doe project management expertise.--The

Secretary may utilize capabilities for review of construction

projects for advanced scientific facilities within the Office of

Science to track the progress of the Project.

(b) Laboratory Management.--

(1) Lead laboratory.--The Idaho National Laboratory shall be

the lead National Laboratory for the Project and shall

collaborate with other National Laboratories, institutions of

higher education, other research institutes, industrial

researchers, and international researchers to carry out the

Project.

(2) Industrial partnerships.--

(A) In general.--The Idaho National Laboratory shall

organize a consortium of appropriate industrial partners

that will carry out cost-shared research, development,

design, and construction activities, and operate

research facilities, on behalf of the Project.

(B) Cost-sharing.--Activities of industrial partners

funded by the Project shall be cost-shared in accordance

with section 988.

(C) Preference.--Preference in determining the final

structure of the consortium or any partnerships under

this subtitle shall be given to a structure (including

designating as a lead industrial partner an entity

incorporated in the United States) that retains United

States technological leadership in the Project while

maximizing cost sharing opportunities and minimizing

Federal funding responsibilities.

(3) Prototype plant siting.--The prototype nuclear reactor

and associated plant shall be sited at the Idaho National

Laboratory in Idaho.

(4) Reactor test capabilities.--The Project shall use, if

appropriate, reactor test capabilities at the Idaho National

Laboratory.

(5) Other laboratory capabilities.--The Project may use, if

appropriate, facilities at other National Laboratories.

SEC. 643. <<NOTE: 42 USC 16023.>> PROJECT ORGANIZATION.

(a) Major Project Elements.--The Project shall consist of the

following major program elements:

(1) High-temperature hydrogen production technology

development and validation.

(2) Energy conversion technology development and validation.

(3) Nuclear fuel development, characterization, and

qualification.

(4) Materials selection, development, testing, and

qualification.

[[Page 119 STAT. 796]]

(5) Reactor and balance-of-plant design, engineering, safety

analysis, and qualification.

(b) Project Phases.--The Project shall be conducted in the following

phases:

(1) First project phase.--A first project phase shall be

conducted to--

(A) select and validate the appropriate technology

under subsection (a)(1);

(B) carry out enabling research, development, and

demonstration activities on technologies and components

under paragraphs (2) through (4) of subsection (a);

(C) determine whether it is appropriate to combine

electricity generation and hydrogen production in a

single prototype nuclear reactor and plant; and

(D) carry out initial design activities for a

prototype nuclear reactor and plant, including

development of design methods and safety analytical

methods and studies under subsection (a)(5).

(2) Second project phase.--A second project phase shall be

conducted to--

(A) continue appropriate activities under paragraphs

(1) through (5) of subsection (a);

(B) develop, through a competitive process, a final

design for the prototype nuclear reactor and plant;

(C) apply for licenses to construct and operate the

prototype nuclear reactor from the Nuclear Regulatory

Commission; and

(D) construct and start up operations of the

prototype nuclear reactor and its associated hydrogen or

electricity production facilities.

(c) Project Requirements.--

(1) In general.--The Secretary shall ensure that the Project

is structured so as to maximize the technical interchange and

transfer of technologies and ideas into the Project from other

sources of relevant expertise, including--

(A) the nuclear power industry, including nuclear

powerplant construction firms, particularly with respect

to issues associated with plant design, construction,

and operational and safety issues;

(B) the chemical processing industry, particularly

with respect to issues relating to--

(i) the use of process energy for production

of hydrogen; and

(ii) the integration of technologies developed

by the Project into chemical processing

environments; and

(C) international efforts in areas related to the

Project, particularly with respect to hydrogen

production technologies.

(2) International collaboration.--

(A) In general.--The Secretary shall seek

international cooperation, participation, and financial

contributions for the Project.

(B) Assistance from international partners.--The

Secretary, through the Idaho National Laboratory, may

contract for assistance from specialists or facilities

from member countries of the Generation IV International

[[Page 119 STAT. 797]]

Forum, the Russian Federation, or other international

partners if the specialists or facilities provide access

to cost-effective and relevant skills or test

capabilities.

(C) Partner nations.--The Project may involve

demonstration of selected project objectives in a

partner country.

(D) Generation iv international forum.--The

Secretary shall ensure that international activities of

the Project are coordinated with the Generation IV

International Forum.

(3) Review by nuclear energy research advisory committee.--

(A) In general.--The Nuclear Energy Research

Advisory Committee of the Department (referred to in

this paragraph as the ``NERAC'') shall--

(i) review all program plans for the Project

and all progress under the Project on an ongoing

basis; and

(ii) ensure that important scientific,

technical, safety, and program management issues

receive attention in the Project and by the

Secretary.

(B) Additional expertise.--The NERAC shall

supplement the expertise of the NERAC or appoint

subpanels to incorporate into the review by the NERAC

the relevant sources of expertise described under

paragraph (1).

(C) Initial review.--Not <<NOTE: Deadline.>> later

than 180 days after the date of enactment of this Act,

the NERAC shall--

(i) review existing program plans for the

Project in light of the recommendations of the

document entitled ``Design Features and Technology

Uncertainties for the Next Generation Nuclear

Plant,'' dated June 30, 2004; and

(ii) address any recommendations of the

document not incorporated in program plans for the

Project.

(D) First project phase review.--On a determination

by the Secretary that the appropriate activities under

the first project phase under subsection (b)(1) are

nearly complete, the Secretary shall request the NERAC

to conduct a comprehensive review of the Project and to

report to the Secretary the recommendation of the NERAC

concerning whether the Project is ready to proceed to

the second project phase under subsection (b)(2).

(E) Transmittal of reports to congress.--Not later

than 60 days after receiving any report from the NERAC

related to the Project, the Secretary shall submit to

the appropriate committees of the Senate and the House

of Representatives a copy of the report, along with any

additional views of the Secretary that the Secretary may

consider appropriate.

SEC. 644. <<NOTE: 42 USC 16024.>> NUCLEAR REGULATORY COMMISSION.

(a) In General.--In accordance with section 202 of the Energy

Reorganization Act of 1974 (42 U.S.C. 5842), the Nuclear Regulatory

Commission shall have licensing and regulatory authority for any reactor

authorized under this subtitle.

(b) Licensing Strategy.--Not <<NOTE: Deadline.>> later than 3 years

after the date of enactment of this Act, the Secretary and the Chairman

[[Page 119 STAT. 798]]

of the Nuclear Regulatory Commission shall jointly submit to the

appropriate committees of the Senate and the House of Representatives a

licensing strategy for the prototype nuclear reactor, including--

(1) a description of ways in which current licensing

requirements relating to light-water reactors need to be adapted

for the types of prototype nuclear reactor being considered by

the Project;

(2) a description of analytical tools that the Nuclear

Regulatory Commission will have to develop to independently

verify designs and performance characteristics of components,

equipment, systems, or structures associated with the prototype

nuclear reactor;

(3) other research or development activities that may be

required on the part of the Nuclear Regulatory Commission in

order to review a license application for the prototype nuclear

reactor; and

(4) an estimate of the budgetary requirements associated

with the licensing strategy.

(c) Ongoing Interaction.--The Secretary shall seek the active

participation of the Nuclear Regulatory Commission throughout the

duration of the Project to--

(1) avoid design decisions that will compromise adequate

safety margins in the design of the reactor or impair the

accessibility of nuclear safety-related components of the

prototype reactor for inspection and maintenance;

(2) develop tools to facilitate inspection and maintenance

needed for safety purposes; and

(3) develop risk-based criteria for any future commercial

development of a similar reactor architectures.

SEC. 645. <<NOTE: 42 USC 16025.>> PROJECT TIMELINES AND AUTHORIZATION OF

APPROPRIATIONS.

(a) Target <<NOTE: Deadline.>> Date to Complete the First Project

Phase.--Not later than September 30, 2011, the Secretary shall--

(1) select the technology to be used by the Project for

high-temperature hydrogen production and the initial design

parameters for the prototype nuclear plant; or

(2) <<NOTE: Reports.>> submit to Congress a report

establishing an alternative date for making the selection.

(b) Design Competition for Second Project Phase.--

(1) In general.--The Secretary, acting through the Idaho

National Laboratory, shall fund not more than 4 teams for not

more than 2 years to develop detailed proposals for competitive

evaluation and selection of a single proposal for a final design

of the prototype nuclear reactor.

(2) Systems integration.--The Secretary may structure

Project activities in the second project phase to use the lead

industrial partner of the competitively selected design under

paragraph (1) in a systems integration role for final design and

construction of the Project.

(c) Target <<NOTE: Deadline.>> Date to Complete Project

Construction.--Not later than September 30, 2021, the Secretary shall--

(1) complete construction and begin operations of the

prototype nuclear reactor and associated energy or hydrogen

facilities; or

[[Page 119 STAT. 799]]

(2) <<NOTE: Reports.>> submit to Congress a report

establishing an alternative date for completion.

(d) Authorization of Appropriations.--There is authorized to be

appropriated to the Secretary for research and construction activities

under this subtitle (including for transfer to the Nuclear Regulatory

Commission for activities under section 644 as appropriate)--

(1) $1,250,000,000 for the period of fiscal years 2006

through 2015; and

(2) such sums as are necessary for each of fiscal years 2016

through 2021.

Subtitle D--Nuclear Security

SEC. 651. <<NOTE: 42 USC 16041.>> NUCLEAR FACILITY AND MATERIALS

SECURITY.

(a) Security Evaluations; Design Basis Threat Rulemaking.--

(1) In general.--Chapter 14 of the Atomic Energy Act of 1954

(42 U.S.C. 2201 et seq.) (as amended by section 624(a)) is

amended by adding at the end the following:

``SEC. 170D. <<NOTE: 42 USC 2210d.>> SECURITY EVALUATIONS.

``a. Security Response Evaluations.--Not <<NOTE: Deadline.>> less

often than once every 3 years, the Commission shall conduct security

evaluations at each licensed facility that is part of a class of

licensed facilities, as the Commission considers to be appropriate, to

assess the ability of a private security force of a licensed facility to

defend against any applicable design basis threat.

``b. Force-on-Force Exercises.--(1) The security evaluations shall

include force-on-force exercises.

``(2) The force-on-force exercises shall, to the maximum extent

practicable, simulate security threats in accordance with any design

basis threat applicable to a facility.

``(3) In conducting a security evaluation, the Commission shall

mitigate any potential conflict of interest that could influence the

results of a force-on-force exercise, as the Commission determines to be

necessary and appropriate.

``c. Action by Licensees.--The Commission shall ensure that an

affected licensee corrects those material defects in performance that

adversely affect the ability of a private security force at that

facility to defend against any applicable design basis threat.

``d. Facilities Under Heightened Threat Levels.--The Commission may

suspend a security evaluation under this section if the Commission

determines that the evaluation would compromise security at a nuclear

facility under a heightened threat level.

``e. Report.--Not less often than once each year, the Commission

shall submit to the Committee on Environment and Public Works of the

Senate and the Committee on Energy and Commerce of the House of

Representatives a report, in classified form and unclassified form, that

describes the results of each security response evaluation conducted and

any relevant corrective action taken by a licensee during the previous

year.

``SEC. 170E. <<NOTE: 42 USC 2210e.>> DESIGN BASIS THREAT RULEMAKING.

``a. Rulemaking.--The <<NOTE: Deadlines.>> Commission shall--

[[Page 119 STAT. 800]]

``(1) not later than 90 days after the date of enactment of

this section, initiate a rulemaking proceeding, including notice

and opportunity for public comment, to be completed not later

than 18 months after that date, to revise the design basis

threats of the Commission; or

``(2) not later than 18 months after the date of enactment

of this section, complete any ongoing rulemaking to revise the

design basis threats.

``b. Factors.--When conducting its rulemaking, the Commission shall

consider the following, 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.''.

(2) Conforming amendment.--The table of sections of the

Atomic Energy Act of 1954 (42 U.S.C. prec. 2011) (as amended by

section 624(b)) is amended by adding at the end of the items

relating to chapter 14 the following:

``Sec. 170D. Security evaluations.

``Sec. 170E. Design basis threat rulemaking.''.

(3) Federal security coordinators.--

(A) Regional offices.--Not <<NOTE: Deadline.>> later

than 18 months after the date of enactment of this Act,

the Nuclear Regulatory Commission (referred to in this

section as the ``Commission'') shall assign a Federal

security coordinator, under the employment of the

Commission, to each region of the Commission.

(B) Responsibilities.--The Federal security

coordinator shall be responsible for--

(i) 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;

(ii) monitoring such classes of facilities as

the Commission determines to be appropriate to

ensure that they maintain security consistent with

the security plan in accordance with the

appropriate threat level; and

[[Page 119 STAT. 801]]

(iii) 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.

(b) Backup <<NOTE: Deadline.>> Power for Certain Emergency

Notification Systems.--For any licensed nuclear power plants located

where there is a permanent population, as determined by the 2000

decennial census, in excess of 15,000,000 within a 50-mile radius of the

power plant, not later than 18 months after enactment of this Act, the

Commission shall require that backup power to be available for the

emergency notification system of the power plant, including the

emergency siren warning system, if the alternating current supply within

the 10-mile emergency planning zone of the power plant is lost.

(c) Additional Provisions.--

(1) Provision of support to university nuclear safety,

security, and environmental protection programs.--Section 31 b.

of the Atomic Energy Act of 1954 (42 U.S.C. 2051(b)) is

amended--

(A) by striking ``b. The Commission is further

authorized to make'' and inserting the following:

``b. Grants and Contributions.--The Commission is authorized--

``(1) to make'';

(B) in paragraph (1) (as designated by subparagraph

(A)) by striking the period at the end and inserting ``;

and''; and

(C) by adding at the end the following:

``(2) to provide grants, loans, cooperative agreements,

contracts, and equipment to institutions of higher education (as

defined in section 102 of the Higher Education Act of 1965 (20

U.S.C. 1002)) to support courses, studies, training, curricula,

and disciplines pertaining to nuclear safety, security, or

environmental protection, or any other field that the Commission

determines to be critical to the regulatory mission of the

Commission.''.

(2) Recruitment tools.--Chapter 14 of the Atomic Energy Act

of 1954 (42 U.S.C. 2201 et seq.) (as amended by subsection

(a)(1)) is amended by adding at the end the following:

``SEC. 170F. <<NOTE: 42 USC 2210f.>> RECRUITMENT TOOLS.

``The Commission may purchase promotional items of nominal value for

use in the recruitment of individuals for employment.''.

(3) Expenses authorized to be paid by the commission.--

Chapter 14 of the Atomic Energy Act of 1954 (42 U.S.C. 2201 et

seq.) (as amended by paragraph (2)) is amended by adding at the

end the following:

``SEC. 170G. <<NOTE: 42 USC 2210g.>> EXPENSES AUTHORIZED TO BE PAID BY

THE COMMISSION.

``The Commission may--

``(1) pay transportation, lodging, and subsistence expenses

of employees who--

``(A) assist scientific, professional,

administrative, or technical employees of the

Commission; and

``(B) are students in good standing at an

institution of higher education (as defined in section

102 of the Higher Education Act of 1965 (20 U.S.C.

1002)) pursuing courses

[[Page 119 STAT. 802]]

related to the field in which the students are employed

by the Commission; and

``(2) pay the costs of health and medical services

furnished, pursuant to an agreement between the Commission and

the Department of State, to employees of the Commission and

dependents of the employees serving in foreign countries.''.

(4) Partnership program with institutions of higher

education.--

(A) In general.--Chapter 19 of the Atomic Energy Act

of 1954 (42 U.S.C. 2015 et seq.) (as amended by section

622(a)) is amended by inserting after section 243 the

following:

``SEC. 244. <<NOTE: 42 USC 2015c.>> PARTNERSHIP PROGRAM WITH

INSTITUTIONS OF HIGHER EDUCATION.

``a. Definitions.--In this section:

``(1) Hispanic-serving institution.--The term `Hispanic-

serving institution' has the meaning given the term in section

502(a) of the Higher Education Act of 1965 (20 U.S.C. 1101a(a)).

``(2) Historically black college and 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) Tribal college.--The term `Tribal college' has the

meaning given the term `tribally controlled college or

university' in section 2(a) of the Tribally Controlled College

or University Assistance Act of 1978 (25 U.S.C. 1801(a)).

``b. Partnership Program.--The Commission may establish and

participate in activities relating to research, mentoring, instruction,

and training with institutions of higher education, including Hispanic-

serving institutions, historically Black colleges or universities, and

Tribal colleges, to strengthen the capacity of the institutions--

``(1) to educate and train students (including present or

potential employees of the Commission); and

``(2) to conduct research in the field of science,

engineering, or law, or any other field that the Commission

determines is important to the work of the Commission.''.

(5) Conforming amendments.--The table of sections of the

Atomic Energy Act of 1954 (42 U.S.C. prec. 2011) (as amended by

subsection (a)(2)) is amended--

(A) by adding at the end of the items relating to

chapter 14 the following:

``Sec. 170F. Recruitment tools.

``Sec. 170G. Expenses authorized to be paid by the Commission.'';

and

(B) by inserting after the item relating to section

243 the following:

``Sec. 244. Partnership program with institutions of higher

education.''.

(d) Radiation Source Protection.--

(1) Amendment.--Chapter 14 of the Atomic Energy Act of 1954

(42 U.S.C. 2201 et seq.) (as amended by subsection (c)(3)) is

amended by adding at the end the following:

``SEC. 170H. <<NOTE: 42 USC 2210h.>> RADIATION SOURCE PROTECTION.

``a. Definitions.--In this section:

[[Page 119 STAT. 803]]

``(1) Code of conduct.--The term `Code of Conduct' means the

code entitled the `Code of Conduct on the Safety and Security of

Radioactive Sources', approved by the Board of Governors of the

International Atomic Energy Agency and dated September 8, 2003.

``(2) Radiation source.--The term `radiation source' means--

``(A) a Category 1 Source or a Category 2 Source, as

defined in the Code of Conduct; and

``(B) any other material that poses a threat such

that the material is subject to this section, as

determined by the Commission, by regulation, other than

spent nuclear fuel and special nuclear materials.

``b. Commission Approval.--

Not <<NOTE: Deadline. Regulations.>> later than 180 days after the date

of enactment of this section, the Commission shall issue regulations

prohibiting a person from--

``(1) exporting a radiation source, unless the Commission

has specifically determined under section 57 or 82, consistent

with the Code of Conduct, with respect to the exportation,

that--

``(A) the recipient of the radiation source may

receive and possess the radiation source under the laws

and regulations of the country of the recipient;

``(B) the recipient country has the appropriate

technical and administrative capability, resources, and

regulatory structure to ensure that the radiation source

will be managed in a safe and secure manner; and

``(C) <<NOTE: Deadline. Notification.>> before the

date on which the radiation source is shipped--

``(i) a notification has been provided to the

recipient country; and

``(ii) a notification has been received from

the recipient country;

as the Commission determines to be appropriate;

``(2) importing a radiation source, unless the Commission

has determined, with respect to the importation, that--

``(A) the proposed recipient is authorized by law to

receive the radiation source; and

``(B) the shipment will be made in accordance with

any applicable Federal or State law or regulation; and

``(3) selling or otherwise transferring ownership of a

radiation source, unless the Commission--

``(A) has determined that the licensee has verified

that the proposed recipient is authorized under law to

receive the radiation source; and

``(B) has required that the transfer shall be made

in accordance with any applicable Federal or State law

or regulation.

``c. Tracking System.--(1)(A)

Not <<NOTE: Deadline. Regulations.>> later than 1 year after the date of

enactment of this section, the Commission shall issue regulations

establishing a mandatory tracking system for radiation sources in the

United States.

``(B) In establishing the tracking system under subparagraph (A),

the Commission shall coordinate with the Secretary of Transportation to

ensure compatibility, to the maximum extent

[[Page 119 STAT. 804]]

practicable, between the tracking system and any system established by

the Secretary of Transportation to track the shipment of radiation

sources.

``(2) The tracking system under paragraph (1) shall--

``(A) enable the identification of each radiation source by

serial number or other unique identifier;

``(B) require reporting within 7 days of any change of

possession of a radiation source;

``(C) require reporting within 24 hours of any loss of

control of, or accountability for, a radiation source; and

``(D) provide for reporting under subparagraphs (B) and (C)

through a secure Internet connection.

``d. Penalty.--A violation of a regulation issued under subsection

a. or b. shall be punishable by a civil penalty not to exceed

$1,000,000.

``e. National <<NOTE: Deadline. Contracts.>> Academy of Sciences

Study.--(1) Not later than 60 days after the date of enactment of this

section, the Commission shall enter into an arrangement with the

National Academy of Sciences under which the National Academy of

Sciences shall conduct a study of industrial, research, and commercial

uses for radiation sources.

``(2) The study under paragraph (1) shall include a review of uses

of radiation sources in existence on the date on which the study is

conducted, including an identification of any industrial or other

process that--

``(A) uses a radiation source that could be replaced with an

economically and technically equivalent (or improved) process

that does not require the use of a radiation source; or

``(B) may be used with a radiation source that would pose a

lower risk to public health and safety in the event of an

accident or attack involving the radiation source.

``(3) <<NOTE: Deadline.>> Not later than 2 years after the date of

enactment of this section, the Commission shall submit to Congress the

results of the study under paragraph (1).

``f. Task <<NOTE: Establishment.>> Force on Radiation Source

Protection and Security.--(1) There is established a task force on

radiation source protection and security (referred to in this section as

the `task force').

``(2)(A) The chairperson of the task force shall be the Chairperson

of the Commission (or a designee).

``(B) The membership of the task force shall consist of the

following:

``(i) The Secretary of Homeland Security (or a designee).

``(ii) The Secretary of Defense (or a designee).

``(iii) The Secretary of Energy (or a designee).

``(iv) The Secretary of Transportation (or a designee).

``(v) The Attorney General (or a designee).

``(vi) The Secretary of State (or a designee).

``(vii) The Director of National Intelligence (or a

designee).

``(viii) The Director of the Central Intelligence Agency (or

a designee).

``(ix) The Director of the Federal Emergency Management

Agency (or a designee).

``(x) The Director of the Federal Bureau of Investigation

(or a designee).

[[Page 119 STAT. 805]]

``(xi) The Administrator of the Environmental Protection

Agency (or a designee).

``(3)(A) The task force, in consultation with Federal, State, and

local agencies, the Conference of Radiation Control Program Directors,

and the Organization of Agreement States, and after public notice and an

opportunity for comment, shall evaluate, and provide recommendations

relating to, the security of radiation sources in the United States from

potential terrorist threats, including acts of sabotage, theft, or use

of a radiation source in a radiological dispersal device.

``(B) <<NOTE: Deadlines. Reports.>> Not later than 1 year after the

date of enactment of this section, and not less than once every 4 years

thereafter, the task force shall submit to Congress and the President a

report, in unclassified form with a classified annex if necessary,

providing recommendations, including recommendations for appropriate

regulatory and legislative changes, for--

``(i) a list of additional radiation sources that should be

required to be secured under this Act, based on the potential

attractiveness of the sources to terrorists and the extent of

the threat to public health and safety of the sources, taking

into consideration--

``(I) radiation source radioactivity levels;

``(II) radioactive half-life of a radiation source;

``(III) dispersability;

``(IV) chemical and material form;

``(V) for radioactive materials with a medical use,

the availability of the sources to physicians and

patients for medical treatment; and

``(VI) any other factor that the Chairperson of the

Commission determines to be appropriate;

``(ii) the establishment of, or modifications to, a national

system for recovery of lost or stolen radiation sources;

``(iii) the storage of radiation sources that are not used

in a safe and secure manner as of the date on which the report

is submitted;

``(iv) modifications to the national tracking system for

radiation sources;

``(v) the establishment of, or modifications to, a national

system (including user fees and other methods) to provide for

the proper disposal of radiation sources secured under this Act;

``(vi) modifications to export controls on radiation sources

to ensure that foreign recipients of radiation sources are able

and willing to adequately control radiation sources from the

United States;

``(vii)(I) any alternative technologies available as of the

date on which the report is submitted that may perform some or

all of the functions performed by devices or processes that

employ radiation sources; and

``(II) the establishment of appropriate regulations and

incentives for the replacement of the devices and processes

described in subclause (I)--

``(aa) with alternative technologies in order to

reduce the number of radiation sources in the United

States; or

``(bb) with radiation sources that would pose a

lower risk to public health and safety in the event of

an accident or attack involving the radiation source;

and

[[Page 119 STAT. 806]]

``(viii) the creation of, or modifications to, procedures

for improving the security of use, transportation, and storage

of radiation sources, including--

``(I) periodic audits or inspections by the

Commission to ensure that radiation sources are properly

secured and can be fully accounted for;

``(II) evaluation of the security measures by the

Commission;

``(III) increased fines for violations of Commission

regulations relating to security and safety measures

applicable to licensees that possess radiation sources;

``(IV) criminal and security background checks for

certain individuals with access to radiation sources

(including individuals involved with transporting

radiation sources);

``(V) requirements for effective and timely

exchanges of information relating to the results of

criminal and security background checks between the

Commission and any State with which the Commission has

entered into an agreement under section 274 b.;

``(VI) assurances of the physical security of

facilities that contain radiation sources (including

facilities used to temporarily store radiation sources

being transported); and

``(VII) the screening of shipments to facilities

that the Commission determines to be particularly at

risk for sabotage of radiation sources to ensure that

the shipments do not contain explosives.

``g. Action by Commission.--Not <<NOTE: Deadline.>> later than 60

days after the date of receipt by Congress and the President of a report

under subsection f.(3)(B), the Commission, in accordance with the

recommendations of the task force, shall--

``(1) take any action the Commission determines to be

appropriate, including revising the system of the Commission for

licensing radiation sources; and

``(2) ensure that States that have entered into agreements

with the Commission under section 274 b. take similar action in

a timely manner.''.

(2) Conforming amendment.--The table of sections of the

Atomic Energy Act of 1954 (42 U.S.C. prec. 2011) (as amended by

subsection (c)(5)(A)) is amended by adding at the end of the

items relating to chapter 14 the following:

``Sec. 170H. Radiation source protection.''.

(e) Treatment of Accelerator-produced and Other Radioactive Material

as Byproduct Material.--

(1) Definition of byproduct material.--Section 11 e. of the

Atomic Energy Act of 1954 (42 U.S.C. 2014(e)) is amended--

(A) by striking ``means (1) any radioactive'' and

inserting the following: ``means--

``(1) any radioactive''.

(B) by striking ``material, and (2) the tailings''

and inserting the following: ``material;

``(2) the tailings''.

(C) by striking ``content.'' and inserting the

following: ``content;

``(3)(A) any discrete source of radium-226 that is produced,

extracted, or converted after extraction, before, on, or after

[[Page 119 STAT. 807]]

the date of enactment of this paragraph for use for a

commercial, medical, or research activity; or

``(B) any material that--

``(i) has been made radioactive by use of a particle

accelerator; and

``(ii) is produced, extracted, or converted after

extraction, before, on, or after the date of enactment

of this paragraph for use for a commercial, medical, or

research activity; and

``(4) any discrete source of naturally occurring radioactive

material, other than source material, that--

``(A) the Commission, in consultation with the

Administrator of the Environmental Protection Agency,

the Secretary of Energy, the Secretary of Homeland

Security, and the head of any other appropriate Federal

agency, determines would pose a threat similar to the

threat posed by a discrete source of radium-226 to the

public health and safety or the common defense and

security; and

``(B) before, on, or after the date of enactment of

this paragraph is extracted or converted after

extraction for use in a commercial, medical, or research

activity.''.

(2) Agreements with governors.--Section 274 b. of the Atomic

Energy Act of 1954 (42 U.S.C. 2021(b)) is amended by striking

``State--'' and all that follows through paragraph (4) and

inserting the following: ``State:

``(1) Byproduct materials (as defined in section 11 e.).

``(2) Source materials.

``(3) Special nuclear materials in quantities not sufficient

to form a critical mass.''.

(3) Waste disposal.--

(A) Domestic distribution.--Section 81 of the Atomic

Energy Act of 1954 (42 U.S.C. 2111) is amended--

(i) by striking ``No person may'' and

inserting the following:

``a. In General.--No person may''.

(ii) by adding at the end the following:

``b. Requirements.--

``(1) In general.--Except as provided in paragraph (2),

byproduct material, as defined in paragraphs (3) and (4) of

section 11 e., may only be transferred to and disposed of in a

disposal facility that--

``(A) is adequate to protect public health and

safety; and

``(B)(i) is licensed by the Commission; or

``(ii) is licensed by a State that has entered into

an agreement with the Commission under section 274 b.,

if the licensing requirements of the State are

compatible with the licensing requirements of the

Commission.

``(2) Effect of subsection.--Nothing in this subsection

affects the authority of any entity to dispose of byproduct

material, as defined in paragraphs (3) and (4) of section 11 e.,

at a disposal facility in accordance with any Federal or State

solid or hazardous waste law, including the Solid Waste Disposal

Act (42 U.S.C. 6901 et seq.).

``c. Treatment as Low-level Radioactive Waste.--Byproduct material,

as defined in paragraphs (3) and (4) of section 11 e.,

[[Page 119 STAT. 808]]

disposed of under this section shall not be considered to be low-level

radioactive waste for the purposes of--

``(1) section 2 of the Low-Level Radioactive Waste Policy

Act (42 U.S.C. 2021b); or

``(2) carrying out a compact that is--

``(A) entered into in accordance with that Act (42

U.S.C. 2021b et seq.); and

``(B) approved by Congress.''.

(B) Definition of low-level radioactive waste.--

Section 2(9) of the Low-Level Radioactive Waste Policy

Act (42 U.S.C. 2021b(9)) is amended--

(i) by redesignating subparagraphs (A) and (B)

as clauses (i) and (ii), respectively, and

indenting the clauses appropriately;

(ii) in the matter preceding clause (i) (as

redesignated by subparagraph (A)) by striking

``The term'' and inserting the following:

``(A) In general.--The term''; and

(iii) by adding at the end the following:

``(B) Exclusion.--The term `low-level radioactive

waste' does not include byproduct material (as defined

in paragraphs (3) and (4) of section 11 e. of the Atomic

Energy Act of 1954 (42 U.S.C. 2014(e)).''.

(4) Final regulations.--

(A) Regulations.--

(i) In general.--Not <<NOTE: Deadline.>> later

than 18 months after the date of enactment of this

Act, the Commission, after consultation with

States and other stakeholders, shall issue final

regulations establishing such requirements as the

Commission determines to be necessary to carry out

this section and the amendments made by this

section.

(ii) Inclusions.--The regulations shall

include a definition of the term ``discrete

source'' for purposes of paragraphs (3) and (4) of

section 11 e. of the Atomic Energy Act of 1954 (42

U.S.C. 2014(e)) (as amended by paragraph (1)).

(B) Cooperation.--In promulgating regulations under

paragraph (1), the Commission shall, to the maximum

extent practicable--

(i) cooperate with States; and

(ii) use model State standards in existence on

the date of enactment of this Act.

(C) Transition plan.--

(i) Definition of byproduct material.--In this

paragraph, the term ``byproduct material'' has the

meaning given the term in paragraphs (3) and (4)

of section 11 e. of the Atomic Energy Act of 1954

(42 U.S.C. 2014(e)) (as amended by paragraph (1)).

(ii) Preparation and publication.--To

facilitate an orderly transition of regulatory

authority with respect to byproduct material, the

Commission, in issuing regulations under

subparagraph (A), shall prepare and publish a

transition plan for--

(I) States that have not, before the

date on which the plan is published,

entered into an agreement with the

Commission under section 274 b.

[[Page 119 STAT. 809]]

of the Atomic Energy Act of 1954 (42

U.S.C. 2021(b)); and

(II) States that have entered into

an agreement with the Commission under

that section before the date on which

the plan is published.

(iii) Inclusions.--The transition plan under

clause (ii) shall include--

(I) a description of the conditions

under which a State may exercise

authority over byproduct material; and

(II) a statement of the Commission

that any agreement covering byproduct

material, as defined in paragraph (1) or

(2) of section 11e. of the Atomic Energy

Act of 1954 (42 U.S.C. 2014(e)), entered

into between the Commission and a State

under section 274 b. of that Act (42

U.S.C. 2021(b)) before the date of

publication of the transition plan shall

be considered to include byproduct

material, as defined in paragraph (3) or

(4) of section 11e. of that Act (42

U.S.C. 2014(e)) (as amended by paragraph

(1)), if the Governor of the State

certifies to the Commission on the date

of publication of the transition plan

that--

(aa) the State has a program

for licensing byproduct

material, as defined in

paragraph (3) or (4) of section

11e. of the Atomic Energy Act of

1954, that is adequate to

protect the public health and

safety, as determined by the

Commission; and

(bb) the State intends to

continue to implement the

regulatory responsibility of the

State with respect to the

byproduct material.

(D) Availability of radiopharmaceuticals.--In

promulgating regulations under subparagraph (A), the

Commission shall consider the impact on the availability

of radiopharmaceuticals to--

(i) physicians; and

(ii) patients the medical treatment of which

relies on radiopharmaceuticals.

(5) Waivers.--

(A) In general.--Except as provided in subparagraph

(B), the Commission may grant a waiver to any entity of

any requirement under this section or an amendment made

by this section with respect to a matter relating to

byproduct material (as defined in paragraphs (3) and (4)

of section 11 e. of the Atomic Energy Act of 1954 (42

U.S.C. 2014(e)) (as amended by paragraph (1))) if the

Commission determines that the waiver is in accordance

with the protection of the public health and safety and

the promotion of the common defense and security.

(B) Exceptions.--

(i) In general.--The Commission may not grant

a waiver under subparagraph (A) with respect to--

(I) any requirement under the

amendments made by subsection (c)(1);

(II) a matter relating to an

importation into, or exportation from,

the United States for a period

[[Page 119 STAT. 810]]

ending after the date that is 1 year

after the date of enactment of this Act;

or

(III) any other matter for a period

ending after the date that is 4 years

after the date of enactment of this Act.

(ii) Waivers to states.--The Commission shall

terminate any waiver granted to a State under

subparagraph (A) if the Commission determines

that--

(I) the State has entered into an

agreement with the Commission under

section 274 b. of the Atomic Energy Act

of 1954 (42 U.S.C. 2021(b));

(II) the agreement described in

subclause (I) covers byproduct material

(as described in paragraph (3) or (4) of

section 11 e. of the Atomic Energy Act

of 1954 (42 U.S.C. 2014(e)) (as amended

by paragraph (1))); and

(III) the program of the State for

licensing such byproduct material is

adequate to protect the public health

and safety.

(C) Publication.--The <<NOTE: Federal

Register, publication. Notice.>> Commission shall

publish in the Federal Register a notice of any waiver

granted under this subsection.

SEC. 652. FINGERPRINTING AND CRIMINAL HISTORY RECORD CHECKS.

Section 149 of the Atomic Energy Act of 1954 (42 U.S.C. 2169) is

amended--

(1) in subsection a.--

(A) by striking ``a. The Nuclear'' and all that

follows through ``section 147.'' and inserting the

following:

``a.(1)(A)(i) The Commission shall require each individual or entity

described in clause (ii) to fingerprint each individual described in

subparagraph (B) before the individual described in subparagraph (B) is

permitted access under subparagraph (B).

``(ii) The individuals and entities referred to in clause (i) are

individuals and entities that, on or before the date on which an

individual is permitted access under subparagraph (B)--

``(I) are licensed or certified to engage in an activity

subject to regulation by the Commission;

``(II) have filed an application for a license or

certificate to engage in an activity subject to regulation by

the Commission; or

``(III) <<NOTE: Notification.>> have 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.

``(B) The Commission shall require to be fingerprinted any

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.'';

[[Page 119 STAT. 811]]

(B) by striking ``All fingerprints obtained by a

licensee or applicant as required in the preceding

sentence'' and inserting the following:

``(2) All fingerprints obtained by an individual or entity as

required in paragraph (1)'';

(C) 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) The costs of an identification or records check under

paragraph (2) shall be paid by the individual or entity required to

conduct the fingerprinting under paragraph (1)(A).''; and

(D) 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) Notwithstanding any other provision of law--

``(A) the Attorney General may provide any result of an

identification or records check under paragraph (2) to the

Commission; and

``(B) the Commission, in accordance with regulations

prescribed under this section, may provide the results to the

individual or entity required to conduct the fingerprinting

under paragraph (1)(A).'';

(2) in subsection c.--

(A) by striking ``, subject to public notice and

comment, regulations--'' and inserting ``requirements--

''; and

(B) in paragraph (2)(B), by striking ``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)'';

(3) by redesignating subsection d. as subsection e.; and

(4) by inserting after subsection c. the following:

``d. The Commission may require a person or individual to conduct

fingerprinting under subsection a.(1) by authorizing or requiring the

use of any alternative biometric method for identification that has been

approved by--

``(1) the Attorney General; and

``(2) the Commission, by regulation.''.

SEC. 653. USE OF FIREARMS BY SECURITY PERSONNEL.

The Atomic Energy Act of 1954 is amended by inserting after section

161 (42 U.S.C. 2201) the following:

``SEC. 161A. <<NOTE: 42 USC 2201a.>> USE OF FIREARMS BY SECURITY

PERSONNEL.

``a. Definitions.--In this section, the terms `handgun', `rifle',

`shotgun', `firearm', `ammunition', `machinegun', `short-barreled

shotgun', and `short-barreled rifle' have the meanings given the terms

in section 921(a) of title 18, United States Code.

``b. Authorization.--Notwithstanding subsections (a)(4), (a)(5),

(b)(2), (b)(4), and (o) of section 922 of title 18, United States Code,

section 925(d)(3) of title 18, United States Code, section 5844 of the

Internal Revenue Code of 1986, and any law (including regulations) of a

State or a political subdivision of a State that prohibits the transfer,

receipt, possession, transportation, importation, or use of a handgun, a

rifle, a shotgun, a short-barreled shotgun, a short-

[[Page 119 STAT. 812]]

barreled rifle, a machinegun, a semiautomatic assault weapon, ammunition

for any such gun or weapon, or a large capacity ammunition feeding

device, in carrying out the duties of the Commission, the Commission may

authorize the security personnel of any licensee or certificate holder

of the Commission (including an employee of a contractor of such a

licensee or certificate holder) to transfer, receive, possess,

transport, import, and use 1 or more such guns, weapons, ammunition, or

devices, if the Commission determines that--

``(1) the authorization is necessary to the discharge of the

official duties of the security personnel; and

``(2) the security personnel--

``(A) are not otherwise prohibited from possessing

or receiving a firearm under Federal or State laws

relating to possession of firearms by a certain category

of persons;

``(B) have successfully completed any requirement

under this section for training in the use of firearms

and tactical maneuvers;

``(C) are engaged in the protection of--

``(i) a facility owned or operated by a

licensee or certificate holder of the Commission

that is designated by the Commission; or

``(ii) radioactive material or other property

owned or possessed by 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

``(D) are discharging the official duties of the

security personnel in transferring, receiving,

possessing, transporting, or importing the weapons,

ammunition, or devices.

``c. Background Checks.--A person that receives, possesses,

transports, imports, or uses a weapon, ammunition, or a device under

subsection (b) shall be subject to a background check by the Attorney

General, based on fingerprints and including a background check under

section 103(b) of the Brady Handgun Violence Prevention Act (Public Law

103-159; 18 U.S.C. 922 note) to determine whether the person is

prohibited from possessing or receiving a firearm under Federal or State

law.

``d. Effective Date.--This section takes effect on the date on which

guidelines are issued by the Commission, with the approval of the

Attorney General, to carry out this section.''.

SEC. 654. UNAUTHORIZED INTRODUCTION OF DANGEROUS WEAPONS.

Section 229 of the Atomic Energy Act of 1954 (42 U.S.C. 2278a) is

amended--

(1) by striking ``Sec. 229, Trespass Upon Commission

Installations.--'' and inserting the following:

``SEC. 229. TRESPASS ON COMMISSION INSTALLATIONS.'';

(2) by adjusting the indentations of subsections a., b., and

c. so as to reflect proper subsection indentations; and

(3) in subsection a.--

(A) in the first sentence, by striking ``a. The''

and inserting the following:

``a.(1) The'';

[[Page 119 STAT. 813]]

(B) in the second sentence, by striking ``Every''

and inserting the following:

``(2) Every''; and

(C) in paragraph (1) (as designated by subparagraph

(A))--

(i) by striking ``or in the custody'' and

inserting ``in the custody''; and

(ii) by inserting ``, or subject to the

licensing authority of the Commission or

certification by the Commission under this Act or

any other Act'' before the period.

SEC. 655. SABOTAGE OF NUCLEAR FACILITIES, FUEL, OR DESIGNATED MATERIAL.

(a) In General.--Section 236a. 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 ``treatment, storage, 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 Commission that, before the date of the

offense, the 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) Conforming Amendment.--Section 236 of the Atomic Energy Act of

1954 (42 U.S.C. 2284) is amended by striking ``intentionally and

willfully'' each place it appears and inserting ``knowingly''.

SEC. 656. SECURE TRANSFER OF NUCLEAR MATERIALS.

(a) Amendment.--Chapter 14 of the Atomic Energy Act of 1954 (42

U.S.C. 2201-2210b) (as amended by section 651(d)(1)) is amended by

adding at the end the following new section:

``SEC. 170I. <<NOTE: 42 USC 2210i.>> SECURE TRANSFER OF NUCLEAR

MATERIALS.

``a. <<NOTE: Procedures.>> The 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

[[Page 119 STAT. 814]]

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 <<NOTE: Deadline. 42 USC 2210i note.>> 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 170D of the Atomic Energy Act

of 1954, as added by subsection (a) of this section.

(c) Effective Date.--The <<NOTE: 42 USC 2210i note.>> 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 <<NOTE: 42 USC 2210i note.>> 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) Conforming Amendment.--The table of sections of the Atomic

Energy Act of 1954 (42 U.S.C. prec. 2011) (as amended by subsection (a))

is amended by adding at the end of the items relating to chapter 14 the

following:

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

SEC. 657. <<NOTE: 42 USC 16042.>> 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.

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

[[Page 119 STAT. 815]]

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) <<NOTE: Reports.>> 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. 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. 703. ALTERNATIVE COMPLIANCE AND FLEXIBILITY.

(a) Alternative Compliance.--Title V of the Energy Policy Act of

1992 (42 U.S.C. 13251 et seq.) is amended--

(1) by redesignating section 514 (42 U.S.C. 13264) as

section 515; and

(2) by inserting after section 513 (42 U.S.C. 13263) the

following:

``SEC. 514. <<NOTE: 42 USC 13263a.>> 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 shall grant a waiver of the

requirements of section 501 or 507(o) on a showing that the fleet owned,

operated, leased, or otherwise controlled by the State or covered

person--

``(1) will achieve a reduction in the annual consumption of

petroleum fuels by the fleet equal to--

``(A) the reduction in consumption of petroleum that

would result from 100 percent cumulative compliance with

the fuel use requirements of section 501; or

``(B) in the case of an entity covered under section

507(o), a reduction equal to the annual consumption by

the State entity of alternative fuels if all of the

cumulative alternative fuel vehicles of the State entity

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 of the Environmental

Protection Agency under the Clean Air Act (42 U.S.C. 7401 et

seq.).

``(c) Reporting Requirement.--Not later than December 31 of a model

year, any State or covered person granted a waiver under this section

for the preceding model year shall submit to the Secretary an annual

report that--

``(1) <<NOTE: Certification.>> certifies the quantity of the

petroleum motor fuel reduction of the State or covered person

during the preceding model year; and

[[Page 119 STAT. 816]]

``(2) projects the baseline quantity of the petroleum motor

fuel reduction of the State or covered person during the

following model year.

``(d) Revocation of Waiver.--If a State or covered person that

receives a waiver under this section fails to comply with this section,

the Secretary--

``(1) shall revoke the waiver; and

``(2) may impose on the State or covered person a penalty

under section 512.''.

(b) Conforming Amendment.--Section 511 of the Energy Policy Act of

1992 (42 U.S.C. 13261) is amended by striking ``or 507'' and inserting

``507, or 514''.

(c) 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.''.

SEC. 704. REVIEW OF ENERGY POLICY ACT OF 1992 PROGRAMS.

(a) In General.--Not <<NOTE: Deadline.>> later than 180 days after

the date of enactment of this section, the Secretary 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.

[[Page 119 STAT. 817]]

(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. 705. 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, 2006''.

SEC. 706. <<NOTE: 42 USC 16051.>> JOINT FLEXIBLE FUEL/HYBRID VEHICLE

COMMERCIALIZATION INITIATIVE.

(a) Definitions.--In this section:

(1) Eligible entity.--The term ``eligible entity'' means--

(A) a for-profit corporation;

(B) a nonprofit corporation; or

(C) an institution of higher education.

(2) Program.--The term ``program'' means a program

established under subsection (b).

(b) Establishment.--The Secretary shall establish a program to

improve technologies for the commercialization of--

(1) a combination hybrid/flexible fuel vehicle; or

(2) a plug-in hybrid/flexible fuel vehicle.

(c) Grants.--In carrying out the program, the Secretary shall

provide grants that give preference to proposals that--

(1) achieve the greatest reduction in miles per gallon of

petroleum fuel consumption;

(2) achieve not less than 250 miles per gallon of petroleum

fuel consumption; and

(3) have the greatest potential of commercialization to the

general public within 5 years.

(d) Verification.--Not <<NOTE: Deadline. Federal

Register, publication. Procedures.>> later than 90 days after the date

of enactment of this Act, the Secretary shall publish in the Federal

Register procedures to verify--

(1) the hybrid/flexible fuel vehicle technologies to be

demonstrated; and

(2) that grants are administered in accordance with this

section.

(e) Report.--Not later than 260 days after the date of enactment of

this Act, and annually thereafter, the Secretary shall submit to

Congress a report that--

(1) identifies the grant recipients;

(2) describes the technologies to be funded under the

program;

(3) assesses the feasibility of the technologies described

in paragraph (2) in meeting the goals described in subsection

(c);

(4) identifies applications submitted for the program that

were not funded; and

(5) makes recommendations for Federal legislation to achieve

commercialization of the technology demonstrated.

(f) Authorization of Appropriations.--There are authorized to be

appropriated to carry out this section, to remain available until

expended--

(1) $3,000,000 for fiscal year 2006;

[[Page 119 STAT. 818]]

(2) $7,000,000 for fiscal year 2007;

(3) $10,000,000 for fiscal year 2008; and

(4) $20,000,000 for fiscal year 2009.

SEC. 707. EMERGENCY EXEMPTION.

Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211) 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''.

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

PART 1--HYBRID VEHICLES

SEC. 711. <<NOTE: 42 USC 16061.>> HYBRID VEHICLES.

The Secretary 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.

SEC. 712. <<NOTE: 42 USC 16062.>> EFFICIENT HYBRID AND ADVANCED DIESEL

VEHICLES.

(a) Program.--The Secretary shall establish a program to encourage

domestic production and sales of efficient hybrid and advanced diesel

vehicles. The program shall include grants to automobile manufacturers

to encourage domestic production of efficient hybrid and advanced diesel

vehicles.

(b) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary for carrying out this section such sums as

may be necessary for each of the fiscal years 2006 through 2015.

PART 2--ADVANCED VEHICLES

SEC. 721. <<NOTE: 42 USC 16071.>> PILOT PROGRAM.

(a) Establishment.--The Secretary, in consultation with the

Secretary of Transportation, shall establish a competitive grant pilot

program (referred to in this part as the ``pilot program''), to be

administered through the Clean Cities Program of the Department, to

provide not more than 30 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 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--

[[Page 119 STAT. 819]]

(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; 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--

[[Page 119 STAT. 820]]

(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 $15,000,000 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 <<NOTE: Procedures.>> 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) <<NOTE: Deadlines.>> Schedule.--

(1) Publication.--Not <<NOTE: Federal

Register, publication. Commerce Business Daily,

publication.>> 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) Definitions.--For <<NOTE: Regulations.>> purposes of carrying

out the pilot program, the Secretary shall issue regulations defining

any term, as the Secretary determines to be necessary.

SEC. 722. <<NOTE: 42 USC 16072.>> 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

[[Page 119 STAT. 821]]

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. 723. <<NOTE: 42 USC 16073.>> 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 3--FUEL CELL BUSES

SEC. 731. <<NOTE: 42 USC 16081.>> FUEL CELL TRANSIT BUS DEMONSTRATION.

(a) In General.--The Secretary, 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 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 to carry out this section $10,000,000 for

each of fiscal years 2006 through 2010.

Subtitle C--Clean School Buses

SEC. 741. <<NOTE: 42 USC 16091.>> CLEAN SCHOOL BUS PROGRAM.

(a) Definitions.--In this section:

(1) Administrator.--The term ``Administrator'' means the

Administrator of the Environmental Protection Agency.

(2) Alternative fuel.--The term ``alternative fuel'' means--

(A) liquefied natural gas, compressed natural gas,

liquefied petroleum gas, hydrogen, or propane;

(B) methanol or ethanol at no less than 85 percent

by volume; or

(C) biodiesel conforming with standards published by

the American Society for Testing and Materials as of the

date of enactment of this Act.

(3) Clean school bus.--The term ``clean school bus'' means a

school bus with a gross vehicle weight of greater than 14,000

pounds that--

(A) is powered by a heavy duty engine; and

(B) is operated solely on an alternative fuel or

ultra-low sulfur diesel fuel.

(4) Eligible recipient.--

[[Page 119 STAT. 822]]

(A) In general.--Subject to subparagraph (B), the

term ``eligible recipient'' means--

(i) 1 or more local or State governmental

entities responsible for--

(I) providing school bus service to

1 or more public school systems; or

(II) the purchase of school buses;

(ii) 1 or more contracting entities that

provide school bus service to 1 or more public

school systems; or

(iii) a nonprofit school transportation

association.

(B) Special requirements.--In the case of eligible

recipients identified under clauses (ii) and (iii), the

Administrator shall establish timely and appropriate

requirements for notice and may establish timely and

appropriate requirements for approval by the public

school systems that would be served by buses purchased

or retrofit using grant funds made available under this

section.

(5) Retrofit technology.--The term ``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.

(6) 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.

(b) Program for Retrofit or Replacement of Certain Existing School

Buses With Clean School Buses.--

(1) Establishment.--

(A) In general.--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

recipients for the replacement, or retrofit (including

repowering, aftertreatment, and remanufactured engines)

of, certain existing school buses.

(B) Balancing.--In awarding grants under this

section, the Administrator shall, to the maximum extent

practicable, achieve an appropriate balance between

awarding grants--

(i) to replace school buses; and

(ii) to install retrofit technologies.

(2) Priority of grant applications.--

(A) Replacement.--In the case of grant applications

to replace school buses, the Administrator shall give

priority to applicants that propose to replace school

buses manufactured before model year 1977.

(B) Retrofitting.--In the case of grant applications

to retrofit school buses, the Administrator shall give

priority to applicants that propose to retrofit school

buses manufactured in or after model year 1991.

(3) Use of school bus fleet.--

(A) In general.--All school buses acquired or

retrofitted with funds provided under this section shall

be operated as part of the school bus fleet for which

the grant was made for not less than 5 years.

[[Page 119 STAT. 823]]

(B) Maintenance, operation, and fueling.--New school

buses and retrofit technology shall be maintained,

operated, and fueled according to manufacturer

recommendations or State requirements.

(4) Retrofit grants.--The Administrator may award grants for

up to 100 percent of the retrofit technologies and installation

costs.

(5) Replacement grants.--

(A) Eligibility for 50 percent grants.--The

Administrator may award grants for replacement of school

buses in the amount of up to one-half of the acquisition

costs (including fueling infrastructure) for--

(i) clean school buses with engines

manufactured in model year 2005 or 2006 that emit

not more than--

(I) 1.8 grams per brake horsepower-

hour of non-methane hydrocarbons and

oxides of nitrogen; and

(II) .01 grams per brake horsepower-

hour of particulate matter; or

(ii) clean school buses with engines

manufactured in model year 2007, 2008, or 2009

that satisfy regulatory requirements established

by the Administrator for emissions of oxides of

nitrogen and particulate matter to be applicable

for school buses manufactured in model year 2010.

(B) Eligibility for 25 percent grants.--The

Administrator may award grants for replacement of school

buses in the amount of up to one-fourth of the

acquisition costs (including fueling infrastructure)

for--

(i) clean school buses with engines

manufactured in model year 2005 or 2006 that emit

not more than--

(I) 2.5 grams per brake horsepower-

hour of non-methane hydrocarbons and

oxides of nitrogen; and

(II) .01 grams per brake horsepower-

hour of particulate matter; or

(ii) clean school buses with engines

manufactured in model year 2007 or thereafter that

satisfy regulatory requirements established by the

Administrator for emissions of oxides of nitrogen

and particulate matter from school buses

manufactured in that model year.

(6) Ultra-low sulfur diesel fuel.--

(A) In general.--In the case of a grant recipient

receiving a grant for the acquisition of ultra-low

sulfur diesel fuel school buses with engines

manufactured in model year 2005 or 2006, the grant

recipient shall provide, to the satisfaction of the

Administrator--

(i) documentation that diesel fuel containing

sulfur at not more than 15 parts per million is

available for carrying out the purposes of the

grant; and

(ii) a commitment by the applicant to use that

fuel in carrying out the purposes of the grant.

(7) Deployment and distribution.--The Administrator shall,

to the maximum extent practicable--

(A) achieve nationwide deployment of clean school

buses through the program under this section; and

[[Page 119 STAT. 824]]

(B) ensure a broad geographic distribution of grant

awards, with no State receiving more than 10 percent of

the grant funding made available under this section

during a fiscal year.

(8) Annual report.--

(A) In general.--Not later than January 31 of each

year, the Administrator shall submit to Congress a

report that--

(i) evaluates the implementation of this

section; and

(ii) describes--

(I) the total number of grant

applications received;

(II) the number and types of

alternative fuel school buses, ultra-low

sulfur diesel fuel school buses, and

retrofitted buses requested in grant

applications;

(III) grants awarded and the

criteria used to select the grant

recipients;

(IV) certified engine emission

levels of all buses purchased or

retrofitted under this section;

(V) an evaluation of the in-use

emission level of buses purchased or

retrofitted under this section; and

(VI) any other information the

Administrator considers appropriate.

(c) Education.--

(1) In general.--Not <<NOTE: Deadline.>> later than 90 days

after the date of enactment of this Act, the Administrator shall

develop an education outreach program to promote and explain the

grant program.

(2) Coordination with stakeholders.--The outreach program

shall be designed and conducted in conjunction with national

school bus transportation associations and other stakeholders.

(3) Components.--The outreach program shall--

(A) inform potential grant recipients on the process

of applying for grants;

(B) describe the available technologies and the

benefits of the technologies;

(C) explain the benefits of participating in the

grant program; and

(D) include, as appropriate, information from the

annual report required under subsection (b)(8).

(d) Authorization of Appropriations.--There are authorized to be

appropriated to the Administrator to carry out this section, to remain

available until expended--

(1) $55,000,000 for each of fiscal years 2006 and 2007; and

(2) such sums as are necessary for each of fiscal years

2008, 2009, and 2010.

SEC. 742. <<NOTE: 42 USC 16092.>> DIESEL TRUCK RETROFIT AND FLEET

MODERNIZATION PROGRAM.

(a) Establishment.--The Administrator, in consultation with the

Secretary, shall establish a program for awarding grants on

[[Page 119 STAT. 825]]

a competitive basis to public agencies and entities for fleet

modernization programs including installation of retrofit technologies

for diesel trucks.

(b) Eligible Recipients.--A grant shall be awarded under this

section only to a State or local government or an agency or

instrumentality of a State or local government or of two or more State

or local governments who will allocate funds, with preference to ports

and other major hauling operations.

(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, and/or particulate matter per proposal or per

truck; or

(B) involve the use of Environmental Protection

Agency or California Air Resources Board verified

emissions control retrofit technology on diesel trucks

that operate solely on ultra-low sulfur diesel fuel

after September 2006.

(d) Conditions of Grant.--A grant shall be provided under this

section on the conditions that--

(1) trucks which are replacing scrapped trucks and 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 1998 and before;

and

(C) will be used for the transportation of cargo

goods especially in port areas or used in goods movement

and major hauling operations;

(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 50 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, from any source other than this

section.

(e) Verification.--Not <<NOTE: Deadline. Federal

Register, publication. Procedures.>> later than 90 days after the date

of enactment of this Act, the Administrator shall publish in the Federal

Register procedures to--

(1) make grants pursuant to this section;

(2) verify that trucks 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 after September 2006; and

(3) verify 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 the following sums:

(1) $20,000,000 for fiscal year 2006.

(2) $35,000,000 for fiscal year 2007.

[[Page 119 STAT. 826]]

(3) $45,000,000 for fiscal year 2008.

(4) Such sums as are necessary for each of fiscal years 2009

and 2010.

SEC. 743. <<NOTE: 42 USC 16093.>> 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 2006 through 2009.

Subtitle D--Miscellaneous

SEC. 751. <<NOTE: 42 USC 16101.>> RAILROAD EFFICIENCY.

(a) Establishment.--The Secretary 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 to carry out this section--

(1) $15,000,000 for fiscal year 2006;

(2) $20,000,000 for fiscal year 2007; and

(3) $30,000,000 for fiscal year 2008.

SEC. 752. MOBILE EMISSION REDUCTIONS TRADING AND CREDITING.

(a) In General.--Not <<NOTE: Deadline. Reports.>> 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--

[[Page 119 STAT. 827]]

(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 whether

the emission reduction credits may be considered to be

additional in relation to other requirements;

(6) the potential, for attainment purposes, of emission

reduction credits relating to transit and land use policies; and

(7) 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 <<NOTE: Deadline.>> 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;

(2) ways to promote fuel conservation measures for aviation

to enhance fuel efficiency and reduce emissions; and

(3) opportunities to reduce air traffic inefficiencies that

increase fuel burn and 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 those emissions on the human health.

[[Page 119 STAT. 828]]

(d) Risk Assessments.--Any assessment of risk to human health and

the environment prepared by the Administrator of the Federal Aviation

Administration or the Administrator of the Environmental Protection

Agency to support the report in this section shall be based on sound and

objective scientific practices, shall consider the best available

science, and shall present the weight of the scientific evidence

concerning such risks.

SEC. 754. <<NOTE: 42 USC 16102.>> 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 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. <<NOTE: 42 USC 16103.>> 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--

[[Page 119 STAT. 829]]

(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

non-Federal sources.

(d) Energy and Bicycling Research Study.--

(1) In general.--

Not <<NOTE: Deadline. Contracts. Reports.>> 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 is 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. <<NOTE: 42 USC 16104.>> REDUCTION OF ENGINE IDLING.

(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, or 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

with or

[[Page 119 STAT. 830]]

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,

or electricity to components on a heavy-duty vehicle;

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

8,500 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 technology that--

(A) is used to reduce long-duration idling; and

(B) allows for the main drive engine or auxiliary

refrigeration engine to be shut down.

(6) Energy conservation technology.--the term ``energy

conservation technology'' means any device, system of devices,

or equipment that improves the fuel economy.

(7) Long-duration idling.--

(A) In general.--The term ``long-duration idling''

means the operation of a main drive engine or auxiliary

refrigeration engine, 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 during a routine stoppage

associated with traffic movement or congestion.

(b) Idle Reduction Technology Benefits, Programs, and Studies.--

(1) In general.--Not <<NOTE: Deadline.>> 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 one or more

reports on the results of the reviews.

[[Page 119 STAT. 831]]

(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 and energy conservation deployment

program.--

(A) Establishment.--

(i) In general.--Not <<NOTE: Deadline.>> later

than 90 days after the date of enactment of this

Act, the Administrator, in consultation with the

Secretary of Transportation shall, through the

Environmental Protection Agency's SmartWay

Transport Partnership, establish a program to

support deployment of idle reduction and energy

conservation technologies.

(ii) Priority.--The Administrator shall give

priority to the deployment of idle reduction and

energy conservation technologies based on the

costs and 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) for

the purpose of reducing extended idling from

heavy-duty vehicles $19,500,000 for fiscal year

2006, $30,000,000 for fiscal year 2007, and

$45,000,000 for fiscal year 2008.

(ii) Locomotives.--There are authorized to be

appropriated to the administrator to carry out

subparagraph (A) for the purpose of reducing

extended idling from locomotives $10,000,000 for

fiscal year 2006, $15,000,000 for fiscal year

2007, and $20,000,000 for fiscal year 2008.

(iii) Cost sharing.--Subject to clause (iv),

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.

(iv) Necessary and appropriate reductions.--

The Administrator may reduce the non-Federal

requirement under clause (iii) 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 <<NOTE: Deadline.>> 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--

[[Page 119 STAT. 832]]

(i) complete the study under subparagraph (A);

and

(ii) prepare and make publicly available one

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 400

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 400-pound gross weight increase is

not used for any purpose other than the use of

idle reduction technology described in

subparagraph (A).''.

(d) Report.--Not later than 60 days after the date on which funds

are initially awarded under this section, and on an annual basis

thereafter, the Administrator shall submit to Congress a report

containing--

(1) an identification of the grant recipients, a description

of the projects to be funded and the amount of funding provided;

and

(2) an identification of all other applicants that submitted

applications under the program.

SEC. 757. <<NOTE: 42 USC 16105.>> BIODIESEL ENGINE TESTING PROGRAM.

(a) In General.--Not <<NOTE: Deadline.>> 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

[[Page 119 STAT. 833]]

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 2006 through 2010 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. <<NOTE: 42 USC 16106.>> ULTRA-EFFICIENT ENGINE TECHNOLOGY FOR

AIRCRAFT.

(a) Ultra-Efficient <<NOTE: Contracts.>> Engine Technology

Partnership.--The Secretary shall enter into a cooperative agreement

with the National Aeronautics and Space Administration for the

development of ultra-efficient engine technology for aircraft.

(b) Performance Objective.--The Secretary shall establish the

following performance objectives for the program set forth in subsection

(a):

(1) A fuel efficiency increase of at least 10 percent.

(2) A reduction in the impact of landing and takeoff

nitrogen oxides emissions on local air quality of 70 percent.

(3) Exploring advanced concepts, alternate propulsion, and

power configurations, including hybrid fuel cell powered

systems.

(4) Exploring the use of alternate fuel in conventional or

nonconventional turbine-based systems.

(c) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary for carrying out this section $50,000,000

for each of the fiscal years 2006, 2007, 2008, 2009, and 2010.

SEC. 759. FUEL ECONOMY INCENTIVE REQUIREMENTS.

Section 32905 of title 49, United States Code, is amended by adding

the following new subsection at the end thereof:

``(h) Fuel Economy Incentive Requirements.--In order for any model

of dual fueled automobile to be eligible to receive the fuel economy

incentives included in section 32906(a) and (b), a label shall be

attached to the fuel compartment of each dual fueled automobile of that

model, notifying that the vehicle can be operated on an alternative fuel

and on gasoline or diesel, with the form of alternative fuel stated on

the notice. <<NOTE: Applicability. Effective date.>> This requirement

applies to dual fueled automobiles manufactured on or after September 1,

2006.''.

[[Page 119 STAT. 834]]

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 $3,500,000 for each of the fiscal years 2006 through

2010.

SEC. 772. 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 ``1993-2010'';

(2) in subsection (f), by striking ``2001'' and inserting

``2007''; and

(3) in subsection (f)(1), by striking ``2004'' and inserting

``2010''.

(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 1993-2010''; and

(2) in subparagraph (B), by striking ``the model years 2005-

2008'' and inserting ``model years 2011-2014''.

SEC. 773. STUDY OF FEASIBILITY AND EFFECTS OF REDUCING USE OF FUEL FOR

AUTOMOBILES.

(a) In General.--Not <<NOTE: Deadline.>> 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 2014, 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.

[[Page 119 STAT. 835]]

(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.

SEC. 774. UPDATE TESTING PROCEDURES.

The Administrator of the Environmental Protection Agency shall

update or revise the adjustment factors in sections 600.209-85 and

600.209-95, of the Code of Federal Regulations, CFR Part 600 (1995) Fuel

Economy Regulations for 1977 and Later Model Year Automobiles to take

into consideration higher speed limits, faster acceleration rates,

variations in temperature, use of air conditioning, shorter city test

cycle lengths, current reference fuels, and the use of other fuel

depleting features.

Subtitle F--Federal and State Procurement

SEC. 781. <<NOTE: 42 USC 16121.>> DEFINITIONS.

In this subtitle:

(1) Fuel cell.--The term ``fuel cell'' means a device that

directly converts the chemical energy of a fuel and an oxidant

into electricity by electrochemical processes occurring at

separate electrodes in the device.

(2) Light-duty or heavy-duty vehicle fleet.--The term

``light-duty or heavy-duty vehicle fleet'' does not include any

vehicle designed or procured for combat or combat-related

missions.

(3) Stationary; portable.--The terms ``stationary'' and

``portable'', when used in reference to a fuel cell, include--

(A) continuous electric power; and

(B) backup electric power.

(4) Task force.--The term ``Task Force'' means the Hydrogen

and Fuel Cell Technical Task Force established under section 806

of this Act.

(5) Technical advisory committee.--The term ``Technical

Advisory Committee'' means the independent Technical Advisory

Committee selected under section 807 of this Act.

SEC. 782. <<NOTE: 42 USC 16122.>> FEDERAL AND STATE PROCUREMENT OF FUEL

CELL VEHICLES AND HYDROGEN ENERGY SYSTEMS.

(a) Purposes.--The purposes of this section are--

(1) to stimulate acceptance by the market of fuel cell

vehicles and hydrogen energy systems;

(2) to support development of technologies relating to fuel

cell vehicles, public refueling stations, and hydrogen energy

systems; and

(3) to require the Federal government, which is the largest

single user of energy in the United States, to adopt those

technologies as soon as practicable after the technologies are

developed, in conjunction with private industry partners.

(b) Federal Leases and Purchases.--

(1) Requirement.--

(A) In general.--Not <<NOTE: Deadline.>> later than

January 1, 2010, the head of any Federal agency that

uses a light-duty or heavy-duty vehicle fleet shall

lease or purchase fuel cell vehicles

[[Page 119 STAT. 836]]

and hydrogen energy systems to meet any applicable

energy savings goal described in subsection (c).

(B) Learning demonstration vehicles.--The Secretary

may lease or purchase appropriate vehicles developed

under subsections (a)(10) and (b)(1)(A) of section 808

to meet the requirement in subparagraph (A).

(2) Costs of leases and purchases.--

(A) In general.--The Secretary, in cooperation with

the Task Force and the Technical Advisory Committee,

shall pay to Federal agencies (or share the cost under

interagency agreements) the difference in cost between--

(i) the cost to the agencies of leasing or

purchasing fuel cell vehicles and hydrogen energy

systems under paragraph (1); and

(ii) the cost to the agencies of a feasible

alternative to leasing or purchasing fuel cell

vehicles and hydrogen energy systems, as

determined by the Secretary.

(B) Competitive costs and management structures.--In

carrying out subparagraph (A), the Secretary, in

consultation with the agency, may use the General

Services Administration or any commercial vendor to

ensure--

(i) a cost-effective purchase of a fuel cell

vehicle or hydrogen energy system; or

(ii) a cost-effective management structure of

the lease of a fuel cell vehicle or hydrogen

energy system.

(3) Exception.--

(A) In general.--If the Secretary determines that

the head of an agency described in paragraph (1) cannot

find an appropriately efficient and reliable fuel cell

vehicle or hydrogen energy system in accordance with

paragraph (1), that agency shall be excepted from

compliance with paragraph (1).

(B) Consideration.--In making a determination under

subparagraph (A), the Secretary shall consider--

(i) the needs of the agency; and

(ii) an evaluation performed by--

(I) the Task Force; or

(II) the Technical Advisory

Committee.

(c) Energy Savings Goals.--

(1) In <<NOTE: Deadlines.>> general.--

(A) Regulations.--Not later than December 31, 2006,

the Secretary shall--

(i) in cooperation with the Task Force,

promulgate regulations for the period of 2008

through 2010 that extend and augment energy

savings goals for each Federal agency, in

accordance with any Executive order issued after

March 2000; and

(ii) promulgate regulations to expand the

minimum Federal fleet requirement and credit

allowances for fuel cell vehicle systems under

section 303 of the Energy Policy Act of 1992 (42

U.S.C. 13212).

(B) Review, evaluation, and new regulations.--Not

later than December 31, 2010, the Secretary shall--

(i) review the regulations promulgated under

subparagraph (A);

(ii) evaluate any progress made toward

achieving energy savings by Federal agencies; and

[[Page 119 STAT. 837]]

(iii) promulgate new regulations for the

period of 2011 through 2015 to achieve additional

energy savings by Federal agencies relating to

technical and cost-performance standards.

(2) Offsetting energy savings goals.--An agency that leases

or purchases a fuel cell vehicle or hydrogen energy system in

accordance with subsection (b)(1) may use that lease or purchase

to count toward an energy savings goal of the agency.

(d) Cooperative Program With State Agencies.--

(1) In general.--The Secretary may establish a cooperative

program with State agencies managing motor vehicle fleets to

encourage purchase of fuel cell vehicles by the agencies.

(2) Incentives.--In carrying out the cooperative program,

the Secretary may offer incentive payments to a State agency to

assist with the cost of planning, differential purchases, and

administration.

(e) Authorization of Appropriations.--There is authorized to be

appropriated to carry out this section--

(1) $15,000,000 for fiscal year 2008;

(2) $25,000,000 for fiscal year 2009;

(3) $65,000,000 for fiscal year 2010; and

(4) such sums as are necessary for each of fiscal years 2011

through 2015.

SEC. 783. <<NOTE: 42 USC 16123.>> FEDERAL PROCUREMENT OF STATIONARY,

PORTABLE, AND MICRO FUEL CELLS.

(a) Purposes.--The purposes of this section are--

(1) to stimulate acceptance by the market of stationary,

portable, and micro fuel cells; and

(2) to support development of technologies relating to

stationary, portable, and micro fuel cells.

(b) Federal Leases and Purchases.--

(1) In general.--Not <<NOTE: Deadline.>> later than January

1, 2006, the head of any Federal agency that uses electrical

power from stationary, portable, or microportable devices shall

lease or purchase a stationary, portable, or micro fuel cell to

meet any applicable energy savings goal described in subsection

(c).

(2) Costs of leases and purchases.--

(A) In general.--The Secretary, in cooperation with

the Task Force and the Technical Advisory Committee,

shall pay the cost to Federal agencies (or share the

cost under interagency agreements) of leasing or

purchasing stationary, portable, and micro fuel cells

under paragraph (1).

(B) Competitive costs and management structures.--In

carrying out subparagraph (A), the Secretary, in

consultation with the agency, may use the General

Services Administration or any commercial vendor to

ensure--

(i) a cost-effective purchase of a stationary,

portable, or micro fuel cell; or

(ii) a cost-effective management structure of

the lease of a stationary, portable, or micro fuel

cell.

(3) Exception.--

(A) In general.--If the Secretary determines that

the head of an agency described in paragraph (1) cannot

find an appropriately efficient and reliable stationary,

portable,

[[Page 119 STAT. 838]]

or micro fuel cell in accordance with paragraph (1),

that agency shall be excepted from compliance with

paragraph (1).

(B) Consideration.--In making a determination under

subparagraph (A), the Secretary shall consider--

(i) the needs of the agency; and

(ii) an evaluation performed by--

(I) the Task Force; or

(II) the Technical Advisory

Committee of the Task Force.

(c) Energy Savings Goals.--An agency that leases or purchases a

stationary, portable, or micro fuel cell in accordance with subsection

(b)(1) may use that lease or purchase to count toward an energy savings

goal described in section 808 of this Act that is applicable to the

agency.

(d) Authorization of Appropriations.--There is authorized to be

appropriated to carry out this section--

(1) $20,000,000 for fiscal year 2006;

(2) $50,000,000 for fiscal year 2007;

(3) $75,000,000 for fiscal year 2008;

(4) $100,000,000 for fiscal year 2009;

(5) $100,000,000 for fiscal year 2010; and

(6) such sums as are necessary for each of fiscal years 2011

through 2015.

Subtitle G--Diesel Emissions Reduction

SEC. 791. <<NOTE: 42 USC 16131.>> DEFINITIONS.

In this subtitle:

(1) Administrator.--The term ``Administrator'' means the

Administrator of the Environmental Protection Agency.

(2) Certified engine configuration.--The term ``certified

engine configuration'' means a new, rebuilt, or remanufactured

engine configuration--

(A) that has been certified or verified by--

(i) the Administrator; or

(ii) the California Air Resources Board;

(B) that meets or is rebuilt or remanufactured to a

more stringent set of engine emission standards, as

determined by the Administrator; and

(C) in the case of a certified engine configuration

involving the replacement of an existing engine or

vehicle, an engine configuration that replaced an engine

that was--

(i) removed from the vehicle; and

(ii) returned to the supplier for

remanufacturing to a more stringent set of engine

emissions standards or for scrappage.

(3) Eligible entity.--The term ``eligible entity'' means--

(A) a regional, State, local, or tribal agency or

port authority with jurisdiction over transportation or

air quality; and

(B) a nonprofit organization or institution that--

(i) represents or provides pollution reduction

or educational services to persons or

organizations that own or operate diesel fleets;

or

[[Page 119 STAT. 839]]

(ii) has, as its principal purpose, the

promotion of transportation or air quality.

(4) Emerging technology.--The term ``emerging technology''

means a technology that is not certified or verified by the

Administrator or the California Air Resources Board but for

which an approvable application and test plan has been submitted

for verification to the Administrator or the California Air

Resources Board.

(5) Fleet.--The term ``fleet'' means one or more diesel

vehicles or mobile or stationary diesel engines.

(6) Heavy-duty truck.--The term ``heavy-duty truck'' has the

meaning given the term ``heavy duty vehicle'' in section 202 of

the Clean Air Act (42 U.S.C. 7521).

(7) Medium-duty truck.--The term ``medium-duty truck'' has

such meaning as shall be determined by the Administrator, by

regulation.

(8) Verified technology.--The term ``verified technology''

means a pollution control technology, including a retrofit

technology, advanced truckstop electrification system, or

auxiliary power unit, that has been verified by--

(A) the Administrator; or

(B) the California Air Resources Board.

SEC. 792. <<NOTE: 42 USC 16132.>> NATIONAL GRANT AND LOAN PROGRAMS.

(a) In General.--The Administrator shall use 70 percent of the funds

made available to carry out this subtitle for each fiscal year to

provide grants and low-cost revolving loans, as determined by the

Administrator, on a competitive basis, to eligible entities to achieve

significant reductions in diesel emissions in terms of--

(1) tons of pollution produced; and

(2) diesel emissions exposure, particularly from fleets

operating in areas designated by the Administrator as poor air

quality areas.

(b) Distribution.--

(1) In general.--The Administrator shall distribute funds

made available for a fiscal year under this subtitle in

accordance with this section.

(2) Fleets.--The Administrator shall provide not less than

50 percent of funds available for a fiscal year under this

section to eligible entities for the benefit of public fleets.

(3) Engine configurations and technologies.--

(A) Certified engine configurations and verified

technologies.--The Administrator shall provide not less

than 90 percent of funds available for a fiscal year

under this section to eligible entities for projects

using--

(i) a certified engine configuration; or

(ii) a verified technology.

(B) Emerging technologies.--

(i) In general.--The Administrator shall

provide not more than 10 percent of funds

available for a fiscal year under this section to

eligible entities for the development and

commercialization of emerging technologies.

(ii) Application and test plan.--To receive

funds under clause (i), a manufacturer, in

consultation with an eligible entity, shall submit

for verification to the Administrator or the

California Air Resources Board

[[Page 119 STAT. 840]]

a test plan for the emerging technology, together

with the application under subsection (c).

(c) Applications.--

(1) In general.--To receive a grant or loan under this

section, an eligible entity shall submit to the Administrator an

application at a time, in a manner, and including such

information as the Administrator may require.

(2) Inclusions.--An application under this subsection shall

include--

(A) a description of the air quality of the area

served by the eligible entity;

(B) the quantity of air pollution produced by the

diesel fleets in the area served by the eligible entity;

(C) a description of the project proposed by the

eligible entity, including--

(i) any certified engine configuration,

verified technology, or emerging technology to be

used or funded by the eligible entity; and

(ii) the means by which the project will

achieve a significant reduction in diesel

emissions;

(D) an evaluation (using methodology approved by the

Administrator or the National Academy of Sciences) of

the quantifiable and unquantifiable benefits of the

emissions reductions of the proposed project;

(E) an estimate of the cost of the proposed project;

(F) a description of the age and expected lifetime

control of the equipment used or funded by the eligible

entity;

(G) a description of the diesel fuel available in

the areas to be served by the eligible entity, including

the sulfur content of the fuel; and

(H) provisions for the monitoring and verification

of the project.

(3) Priority.--In providing a grant or loan under this

section, the Administrator shall give priority to proposed

projects that, as determined by the Administrator--

(A) maximize public health benefits;

(B) are the most cost-effective;

(C) serve areas--

(i) with the highest population density;

(ii) that are poor air quality areas,

including areas identified by the Administrator

as--

(I) in nonattainment or maintenance

of national ambient air quality

standards for a criteria pollutant;

(II) Federal Class I areas; or

(III) areas with toxic air pollutant

concerns;

(iii) that receive a disproportionate quantity

of air pollution from a diesel fleets, including

truckstops, ports, rail yards, terminals, and

distribution centers; or

(iv) that use a community-based

multistakeholder collaborative process to reduce

toxic emissions;

(D) include a certified engine configuration,

verified technology, or emerging technology that has a

long expected useful life;

[[Page 119 STAT. 841]]

(E) will maximize the useful life of any certified

engine configuration, verified technology, or emerging

technology used or funded by the eligible entity;

(F) conserve diesel fuel; and

(G) use diesel fuel with a sulfur content of less

than or equal to 15 parts per million, as the

Administrator determines to be appropriate.

(d) Use of Funds.--

(1) In general.--An eligible entity may use a grant or loan

provided under this section to fund the costs of--

(A) a retrofit technology (including any incremental

costs of a repowered or new diesel engine) that

significantly reduces emissions through development and

implementation of a certified engine configuration,

verified technology, or emerging technology for--

(i) a bus;

(ii) a medium-duty truck or a heavy-duty

truck;

(iii) a marine engine;

(iv) a locomotive; or

(v) a nonroad engine or vehicle used in--

(I) construction;

(II) handling of cargo (including at

a port or airport);

(III) agriculture;

(IV) mining; or

(V) energy production; or

(B) programs or projects to reduce long-duration

idling using verified technology involving a vehicle or

equipment described in subparagraph (A).

(2) Regulatory programs.--

(A) In general.--Notwithstanding paragraph (1), no

grant or loan provided under this section shall be used

to fund the costs of emissions reductions that are

mandated under Federal, State or local law.

(B) Mandated.--For purposes of subparagraph (A),

voluntary or elective emission reduction measures shall

not be considered ``mandated'', regardless of whether

the reductions are included in the State implementation

plan of a State.

SEC. 793. <<NOTE: 42 USC 16133.>> STATE GRANT AND LOAN PROGRAMS.

(a) In General.--Subject to the availability of adequate

appropriations, the Administrator shall use 30 percent of the funds made

available for a fiscal year under this subtitle to support grant and

loan programs administered by States that are designed to achieve

significant reductions in diesel emissions.

(b) Applications.--The Administrator shall--

(1) <<NOTE: Guidelines.>> provide to States guidance for use

in applying for grant or loan funds under this section,

including information regarding--

(A) the process and forms for applications;

(B) permissible uses of funds received; and

(C) the cost-effectiveness of various emission

reduction technologies eligible to be carried out using

funds provided under this section; and

(2) <<NOTE: Procedures.>> establish, for applications

described in paragraph (1)--

[[Page 119 STAT. 842]]

(A) <<NOTE: Deadline.>> an annual deadline for

submission of the applications;

(B) a process by which the Administrator shall

approve or disapprove each application; and

(C) a streamlined process by which a State may renew

an application described in paragraph (1) for subsequent

fiscal years.

(c) Allocation of Funds.--

(1) In general.--For each fiscal year, the Administrator

shall allocate among States for which applications are approved

by the Administrator under subsection (b)(2)(B) funds made

available to carry out this section for the fiscal year.

(2) Allocation.--Using not more than 20 percent of the funds

made available to carry out this subtitle for a fiscal year, the

Administrator shall provide to each State described in paragraph

(1) for the fiscal year an allocation of funds that is equal

to--

(A) if each of the 50 States qualifies for an

allocation, an amount equal to 2 percent of the funds

made available to carry out this section; or

(B) if fewer than 50 States qualifies for an

allocation, an amount equal to the amount described in

subparagraph (A), plus an additional amount equal to the

product obtained by multiplying--

(i) the proportion that--

(I) the population of the State;

bears to

(II) the population of all States

described in paragraph (1); by

(ii) the amount of funds remaining after each

State described in paragraph (1) receives the 2-

percent allocation under this paragraph.

(3) State matching incentive.--

(A) In general.--If a State agrees to match the

allocation provided to the State under paragraph (2) for

a fiscal year, the Administrator shall provide to the

State for the fiscal year an additional amount equal to

50 percent of the allocation of the State under

paragraph (2).

(B) Requirements.--A State--

(i) may not use funds received under this

subtitle to pay a matching share required under

this subsection; and

(ii) shall not be required to provide a

matching share for any additional amount received

under subparagraph (A).

(4) Unclaimed funds.--Any funds that are not claimed by a

State for a fiscal year under this subsection shall be used to

carry out section 792.

(d) Administration.--

(1) In general.--Subject to paragraphs (2) and (3) and, to

the extent practicable, the priority areas listed in section

792(c)(3), a State shall use any funds provided under this

section to develop and implement such grant and low-cost

revolving loan programs in the State as are appropriate to meet

State needs and goals relating to the reduction of diesel

emissions.

[[Page 119 STAT. 843]]

(2) Apportionment of funds.--The Governor of a State that

receives funding under this section may determine the portion of

funds to be provided as grants or loans.

(3) Use of funds.--A grant or loan provided under this

section may be used for a project relating to--

(A) a certified engine configuration; or

(B) a verified technology.

SEC. 794. <<NOTE: 42 USC 16134.>> EVALUATION AND REPORT.

(a) In General.--Not later than 1 year after the date on which funds

are made available under this subtitle, and biennially thereafter, the

Administrator shall submit to Congress a report evaluating the

implementation of the programs under this subtitle.

(b) Inclusions.--The report shall include a description of--

(1) the total number of grant applications received;

(2) each grant or loan made under this subtitle, including

the amount of the grant or loan;

(3) each project for which a grant or loan is provided under

this subtitle, including the criteria used to select the grant

or loan recipients;

(4) the actual and estimated air quality and diesel fuel

conservation benefits, cost-effectiveness, and cost-benefits of

the grant and loan programs under this subtitle;

(5) the problems encountered by projects for which a grant

or loan is provided under this subtitle; and

(6) any other information the Administrator considers to be

appropriate.

SEC. 795. <<NOTE: 42 USC 16135.>> OUTREACH AND INCENTIVES.

(a) Definition of Eligible Technology.--In this section, the term

``eligible technology'' means--

(1) a verified technology; or

(2) an emerging technology.

(b) Technology Transfer Program.--

(1) In general.--The Administrator shall establish a program

under which the Administrator--

(A) informs stakeholders of the benefits of eligible

technologies; and

(B) develops nonfinancial incentives to promote the

use of eligible technologies.

(2) Eligible stakeholders.--Eligible stakeholders under this

section include--

(A) equipment owners and operators;

(B) emission and pollution control technology

manufacturers;

(C) engine and equipment manufacturers;

(D) State and local officials responsible for air

quality management;

(E) community organizations; and

(F) public health, educational, and environmental

organizations.

(c) State Implementation Plans.--

The <<NOTE: Guidelines.>> Administrator shall develop appropriate

guidance to provide credit to a State for emission reductions in the

State created by the use of eligible technologies through a State

implementation plan under section 110 of the Clean Air Act (42 U.S.C.

7410).

(d) International Markets.--The Administrator, in coordination with

the Department of Commerce and industry stakeholders,

[[Page 119 STAT. 844]]

shall inform foreign countries with air quality problems of the

potential of technology developed or used in the United States to

provide emission reductions in those countries.

SEC. 796. <<NOTE: 42 USC 16136.>> EFFECT OF SUBTITLE.

Nothing in this subtitle affects any authority under the Clean Air

Act (42 U.S.C. 7401 et seq.) in existence on the day before the date of

enactment of this Act.

SEC. 797. <<NOTE: 42 USC 16137.>> AUTHORIZATION OF APPROPRIATIONS.

There is authorized to be appropriated to carry out this subtitle

$200,000,000 for each of fiscal years 2007 through 2011, to remain

available until expended.

TITLE <<NOTE: Spark M. Matsunaga Hydrogen Act of 2005.>> VIII--HYDROGEN

SEC. 801. <<NOTE: 42 USC 15801 note.>> HYDROGEN AND FUEL CELL PROGRAM.

This title may be cited as the ``Spark M. Matsunaga Hydrogen Act of

2005''.

SEC. 802. <<NOTE: 42 USC 16151.>> PURPOSES.

The purposes of this title are--

(1) to enable and promote comprehensive development,

demonstration, and commercialization of hydrogen and fuel cell

technology in partnership with industry;

(2) to make critical public investments in building strong

links to private industry, institutions of higher education,

National Laboratories, and research institutions to expand

innovation and industrial growth;

(3) to build a mature hydrogen economy that creates fuel

diversity in the massive transportation sector of the United

States;

(4) to sharply decrease the dependency of the United States

on imported oil, eliminate most emissions from the

transportation sector, and greatly enhance our energy security;

and

(5) to create, strengthen, and protect a sustainable

national energy economy.

SEC. 803. <<NOTE: 42 USC 16152.>> DEFINITIONS.

In this title:

(1) Fuel cell.--The term ``fuel cell'' means a device that

directly converts the chemical energy of a fuel, which is

supplied from an external source, and an oxidant into

electricity by electrochemical processes occurring at separate

electrodes in the device.

(2) Heavy-duty vehicle.--The term ``heavy-duty vehicle''

means a motor vehicle that--

(A) is rated at more than 8,500 pounds gross vehicle

weight;

(B) has a curb weight of more than 6,000 pounds; or

(C) has a basic vehicle frontal area in excess of 45

square feet.

(3) Infrastructure.--The term ``infrastructure'' means the

equipment, systems, or facilities used to produce, distribute,

deliver, or store hydrogen (except for onboard storage).

[[Page 119 STAT. 845]]

(4) Light-duty vehicle.--The term ``light-duty vehicle''

means a motor vehicle that is rated at 8,500 or less pounds

gross vehicle weight.

(5) Stationary; portable.--The terms ``stationary'' and

``portable'', when used in reference to a fuel cell, include--

(A) continuous electric power; and

(B) backup electric power.

(6) Task force.--The term ``Task Force'' means the Hydrogen

and Fuel Cell Technical Task Force established under section

806.

(7) Technical advisory committee.--The term ``Technical

Advisory Committee'' means the independent Technical Advisory

Committee established under section 807.

SEC. 804. <<NOTE: Deadline. 42 USC 16153.>> 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 805(e);

(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 805, 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. 805. <<NOTE: 42 USC 16154.>> PROGRAMS.

(a) In General.--The Secretary, in consultation with other Federal

agencies and the private sector, shall conduct a research and

development program on technologies relating to the production,

purification, distribution, storage, and use of hydrogen energy, fuel

cells, and related infrastructure.

(b) Goal.--The goal of the program shall be to demonstrate and

commercialize the use of hydrogen for transportation (in light-duty

vehicles and heavy-duty vehicles), utility, industrial, commercial, and

residential applications.

(c) Focus.--In carrying out activities under this section, the

Secretary shall focus on factors that are common to the development of

hydrogen infrastructure and the supply of vehicle and electric power for

critical consumer and commercial applications, and that achieve

continuous technical evolution and cost reduction, particularly for

hydrogen production, the supply of hydrogen, storage of hydrogen, and

end uses of hydrogen that--

(1) steadily increase production, distribution, and end use

efficiency and reduce life-cycle emissions;

(2) resolve critical problems relating to catalysts,

membranes, storage, lightweight materials, electronic controls,

manufacturability, and other problems that emerge from the

program;

[[Page 119 STAT. 846]]

(3) enhance sources of renewable fuels and biofuels for

hydrogen production; and

(4) enable widespread use of distributed electricity

generation and storage.

(d) Public Education and Research.--In carrying out this section,

the Secretary shall support enhanced public education and research

conducted at institutions of higher education in fundamental sciences,

application design, and systems concepts (including education and

research relating to materials, subsystems, manufacturability,

maintenance, and safety) relating to hydrogen and fuel cells.

(e) 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 onsite 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; and

(7) the ability of domestic automobile manufacturers to

manufacture commercially available competitive hybrid vehicle

technologies in the United States.

(f) 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

[[Page 119 STAT. 847]]

hydrogen-powered vehicles that will have, when compared

to light duty vehicles in model year 2005--

(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, micro, critical needs facilities,

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.

(g) 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.

(h) Hydrogen Supply.--There are authorized to be appropriated to

carry out projects and activities relating to hydrogen production,

storage, distribution and dispensing, transport, education and

coordination, and technology transfer under this section--

(1) $160,000,000 for fiscal year 2006;

(2) $200,000,000 for fiscal year 2007;

(3) $220,000,000 for fiscal year 2008;

(4) $230,000,000 for fiscal year 2009;

(5) $250,000,000 for fiscal year 2010; and

(6) such sums as are necessary for each of fiscal years 2011

through 2020.

[[Page 119 STAT. 848]]

(i) Fuel Cell Technologies.--There are authorized to be appropriated

to carry out projects and activities relating to fuel cell technologies

under this section--

(1) $150,000,000 for fiscal year 2006;

(2) $160,000,000 for fiscal year 2007;

(3) $170,000,000 for fiscal year 2008;

(4) $180,000,000 for fiscal year 2009;

(5) $200,000,000 for fiscal year 2010; and

(6) such sums as are necessary for each of fiscal years 2011

through 2020.

SEC. 806. <<NOTE: 42 USC 16155.>> HYDROGEN AND FUEL CELL TECHNICAL TASK

FORCE.

(a) Establishment.--Not <<NOTE: Deadline. President.>> 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 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 Task Force may organize workshops and

conferences, may issue publications, and may create databases to

carry out its duties. The 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;

[[Page 119 STAT. 849]]

(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 Task Force, shall cooperate

with and furnish information to the Task Force, the Technical Advisory

Committee, and the Department.

SEC. 807. <<NOTE: 42 USC 16156.>> TECHNICAL 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 Technical 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 Technical Advisory Committee members and the

needs of the Technical Advisory Committee.

(2) Terms.--The term of a member of the Technical Advisory

Committee shall not be more than 3 years. The Secretary may

appoint members of the Technical 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 Technical Advisory Committee. A member of the

Technical Advisory Committee whose term is expiring may be

reappointed.

(3) Chairperson.--The Technical Advisory Committee shall

have a chairperson, who shall be elected by the members from

among their number.

(c) Review.--The Technical 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 804.

(d) Response.--

(1) Consideration of recommendations.--The Secretary shall

consider, but need not adopt, any recommendations of the

Technical Advisory Committee under subsection (c).

(2) Biennial report.--The Secretary shall transmit a

biennial report to Congress describing any recommendations made

by the Technical 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 Technical Advisory Committee to carry

out its responsibilities under this title.

[[Page 119 STAT. 850]]

SEC. 808. <<NOTE: 42 USC 16157.>> DEMONSTRATION.

(a) In General.--In carrying out the programs under this section,

the Secretary shall fund a limited number of demonstration projects,

consistent with this title and 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;

(9) carry out demonstrations of evolving hydrogen and fuel

cell technologies in national parks, remote island areas, and on

Indian tribal land, as selected by the Secretary;

(10) carry out a program to demonstrate developmental

hydrogen and fuel cell systems for mobile, portable, and

stationary uses, using improved versions of the learning

demonstrations program concept of the Department including

demonstrations involving--

(A) light-duty vehicles;

(B) heavy-duty vehicles;

(C) fleet vehicles;

(D) specialty industrial and farm vehicles; and

(E) commercial and residential portable, continuous,

and backup electric power generation;

(11) in accordance with any code or standards developed in a

region, fund prototype, pilot fleet, and infrastructure regional

hydrogen supply corridors along the interstate highway system in

varied climates across the United States; and

(12) fund demonstration programs that explore the use of

hydrogen blends, hybrid hydrogen, and hydrogen reformed from

renewable agricultural fuels, including the use of hydrogen in

hybrid electric, heavier duty, and advanced internal combustion-

powered vehicles.

The Secretary shall give preference to projects which address multiple

elements contained in paragraphs (1) through (12).

(b) System Demonstrations.--

(1) In general.--As a <<NOTE: Grants.>> component of the

demonstration program under this section, the Secretary shall

provide grants, on a cost share basis as appropriate, to

eligible entities (as determined by the Secretary) for use in--

[[Page 119 STAT. 851]]

(A) devising system design concepts that provide for

the use of advanced composite vehicles in programs under

section 782 that--

(i) have as a primary goal the reduction of

drive energy requirements;

(ii) after 2010, add another research and

development phase, as defined in subsection (c),

including the vehicle and infrastructure

partnerships developed under the learning

demonstrations program concept of the Department;

and

(iii) are managed through an enhanced

FreedomCAR program within the Department that

encourages involvement in cost-shared projects by

manufacturers and governments; and

(B) designing a local distributed energy system

that--

(i) incorporates renewable hydrogen

production, off-grid electricity production, and

fleet applications in industrial or commercial

service;

(ii) integrates energy or applications

described in clause (i), such as stationary,

portable, micro, and mobile fuel cells, into a

high-density commercial or residential building

complex or agricultural community; and

(iii) is managed in cooperation with industry,

State, tribal, and local governments, agricultural

organizations, and nonprofit generators and

distributors of electricity.

(c) Identification of New Program Requirements.--In carrying out the

demonstrations under subsection (a), the Secretary, in consultation with

the Task Force and the Technical Advisory Committee, shall--

(1) after 2008 for stationary and portable applications, and

after 2010 for vehicles, identify new requirements that refine

technological concepts, planning, and applications; and

(2) during the second phase of the learning demonstrations

under subsection (b)(1)(A)(ii), redesign subsequent program work

to incorporate those requirements.

(d) Authorization of Appropriations.--There are authorized to be

appropriated to carry out this section--

(1) $185,000,000 for fiscal year 2006;

(2) $200,000,000 for fiscal year 2007;

(3) $250,000,000 for fiscal year 2008;

(4) $300,000,000 for fiscal year 2009;

(5) $375,000,000 for fiscal year 2010; and

(6) such sums as are necessary for each of fiscal years 2011

through 2020.

SEC. 809. <<NOTE: 42 USC 16158.>> CODES AND STANDARDS.

(a) In General.--The <<NOTE: Grants. Contracts.>> Secretary, in

cooperation with the Task Force, shall provide grants to, or offer to

enter into contracts with, such professional organizations, public

service organizations, and government agencies as the Secretary

determines appropriate to support timely and extensive development of

safety codes and standards relating to fuel cell vehicles, hydrogen

energy systems, and stationary, portable, and micro fuel cells.

[[Page 119 STAT. 852]]

(b) Educational Efforts.--The Secretary shall support educational

efforts by organizations and agencies described in subsection (a) to

share information, including information relating to best practices,

among those organizations and agencies.

(c) Authorization of Appropriations.--There are authorized to be

appropriated to carry out this section--

(1) $4,000,000 for fiscal year 2006;

(2) $7,000,000 for fiscal year 2007;

(3) $8,000,000 for fiscal year 2008;

(4) $10,000,000 for fiscal year 2009;

(5) $9,000,000 for fiscal year 2010; and

(6) such sums as are necessary for each of fiscal years 2011

through 2020.

SEC. 810. <<NOTE: Applicability. 42 USC 16159.>> DISCLOSURE.

Section 623 of the Energy Policy Act of 1992 (42 U.S.C. 13293) shall

apply to any project carried out through a grant, cooperative agreement,

or contract under this title.

SEC. 811. <<NOTE: 42 USC 16160.>> REPORTS.

(a) Secretary.--Subject to subsection (c), not later than 2 years

after the date of enactment of this Act, and triennially thereafter, the

Secretary shall submit to Congress a report describing--

(1) activities carried out by the Department under this

title, for hydrogen and fuel cell technology;

(2) measures the Secretary has taken during the preceding 3

years to support the transition of primary industry (or a

related industry) to a fully commercialized hydrogen economy;

(3) any change made to the strategy relating to hydrogen and

fuel cell technology to reflect the results of a learning

demonstrations;

(4) progress, including progress in infrastructure, made

toward achieving the goal of producing and deploying not less

than--

(A) 100,000 hydrogen-fueled vehicles in the United

States by 2010; and

(B) 2,500,000 hydrogen-fueled vehicles in the United

States by 2020;

(5) progress made toward achieving the goal of supplying

hydrogen at a sufficient number of fueling stations in the

United States by 2010 including by integrating--

(A) hydrogen activities; and

(B) associated targets and timetables for the

development of hydrogen technologies;

(6) any problem relating to the design, execution, or

funding of a program under this title;

(7) progress made toward and goals achieved in carrying out

this title and updates to the developmental roadmap, including

the results of the reviews conducted by the National Academy of

Sciences under subsection (b) for the fiscal years covered by

the report; and

(8) any updates to strategic plans that are necessary to

meet the goals described in paragraph (4).

(b) External Review.--The <<NOTE: Deadlines.>> Secretary shall enter

into an arrangement with the National Academy of Sciences under which

the Academy will review the programs under sections 805 and 808 every

fourth year following the date of enactment of this Act. The Academy's

review shall include the program priorities and

[[Page 119 STAT. 853]]

technical milestones, and evaluate the progress toward achieving them.

The first 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.

(c) Authorization of Appropriations.--There is authorized to be

appropriated to carry out this section $1,500,000 for each of fiscal

years 2006 through 2020.

SEC. 812. <<NOTE: 42 USC 16161.>> SOLAR AND WIND TECHNOLOGIES.

(a) Solar Energy Technologies.--The Secretary shall--

(1) prepare a detailed roadmap for carrying out the

provisions in this title related to solar energy technologies

and for implementing the recommendations related to solar energy

technologies that are included in the report transmitted under

subsection (e);

(2) provide for the establishment of 5 projects in

geographic areas that are regionally and climatically diverse to

demonstrate the production of hydrogen at solar energy

facilities, including one demonstration project at a National

Laboratory or institution of higher education;

(3) establish a program--

(A) to develop optimized concentrating solar power

devices that may be used for the production of both

electricity and hydrogen; and

(B) to evaluate the use of thermochemical cycles for

hydrogen production at the temperatures attainable with

concentrating solar power devices;

(4) coordinate with activities sponsored by the Department's

Office of Nuclear Energy, Science, and Technology on high-

temperature materials, thermochemical cycles, and economic

issues related to solar energy;

(5) provide for the construction and operation of new

concentrating solar power devices or solar power cogeneration

facilities that produce hydrogen either concurrently with, or

independently of, the production of electricity;

(6) support existing facilities and programs of study

related to concentrating solar power devices; and

(7) establish a program--

(A) to develop methods that use electricity from

photovoltaic devices for the onsite production of

hydrogen, such that no intermediate transmission or

distribution infrastructure is required or used and

future demand growth may be accommodated;

(B) to evaluate the economics of small-scale

electrolysis for hydrogen production; and

(C) to study the potential of modular photovoltaic

devices for the development of a hydrogen

infrastructure, the security implications of a hydrogen

infrastructure, and the benefits potentially derived

from a hydrogen infrastructure.

(b) Wind Energy Technologies.--The Secretary shall--

(1) prepare a detailed roadmap for carrying out the

provisions in this title related to wind energy technologies and

for implementing the recommendations related to wind energy

[[Page 119 STAT. 854]]

technologies that are included in the report transmitted under

subsection (e); and

(2) provide for the establishment of 5 projects in

geographic areas that are regionally and climatically diverse to

demonstrate the production of hydrogen at existing wind energy

facilities, including one demonstration project at a National

Laboratory or institution of higher education.

(c) Program Support.--The Secretary shall support programs at

institutions of higher education for the development of solar energy

technologies and wind energy technologies for the production of

hydrogen. The programs supported under this subsection shall--

(1) enhance fellowship and faculty assistance programs;

(2) provide support for fundamental research;

(3) encourage collaborative research among industry,

National Laboratories, and institutions of higher education;

(4) support communication and outreach; and

(5) to the greatest extent possible--

(A) be located in geographic areas that are

regionally and climatically diverse; and

(B) be located at part B institutions, minority

institutions, and institutions of higher education

located in States participating in the Experimental

Program to Stimulate Competitive Research of the

Department.

(d) Institutions of Higher Education and National Laboratory

Interactions.--In conjunction with the programs supported under this

section, the Secretary shall develop sabbatical, fellowship, and

visiting scientist programs to encourage National Laboratories and

institutions of higher education to share and exchange personnel.

(e) Report.--The Secretary shall transmit to the Congress not later

than 120 days after the date of enactment of this Act a report

containing detailed summaries of the roadmaps prepared under subsections

(a)(1) and (b)(1), descriptions of the Secretary's progress in

establishing the projects and other programs required under this

section, and recommendations for promoting the availability of advanced

solar and wind energy technologies for the production of hydrogen.

(f) Definitions.--For purposes of this section--

(1) the term ``concentrating solar power devices'' means

devices that concentrate the power of the sun by reflection or

refraction to improve the efficiency of a photovoltaic or

thermal generation process;

(2) the term ``minority institution'' has the meaning given

to that term in section 365 of the Higher Education Act of 1965

(20 U.S.C. 1067k);

(3) the term ``part B institution'' has the meaning given to

that term in section 322 of the Higher Education Act of 1965 (20

U.S.C. 1061); and

(4) the term ``photovoltaic devices'' means devices that

convert light directly into electricity through a solid-state,

semiconductor process.

(g) Authorization of Appropriations.--There is authorized to be

appropriated such sums as are necessary for carrying out the activities

under this section for each of fiscal years 2006 through 2020.

[[Page 119 STAT. 855]]

SEC. 813. <<NOTE: 42 USC 16162.>> TECHNOLOGY TRANSFER.

In carrying out this title, the Secretary shall carry out programs

that--

(1) provide for the transfer of critical hydrogen and fuel

cell technologies to the private sector;

(2) accelerate wider application of those technologies in

the global market;

(3) foster the exchange of generic, nonproprietary

information; and

(4) assess technical and commercial viability of

technologies relating to the production, distribution, storage,

and use of hydrogen energy and fuel cells.

SEC. 814. <<NOTE: 42 USC 16163.>> 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. 815. <<NOTE: 42 USC 16164.>> COST SHARING.

The costs of carrying out projects and activities under this title

shall be shared in accordance with section 988.

SEC. 816. <<NOTE: 42 USC 16165.>> 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.

[[Page 119 STAT. 856]]

TITLE IX--RESEARCH <<NOTE: Energy Research, Development, Demonstration,

and Commercial Application Act of 2005.>> AND DEVELOPMENT

SEC. 901. <<NOTE: 42 USC 15801 note.>> SHORT TITLE.

This title may be cited as the ``Energy Research, Development,

Demonstration, and Commercial Application Act of 2005''.

SEC. 902. <<NOTE: 42 USC 16181.>> GOALS.

(a) In General.--In order to achieve the purposes of this title, the

Secretary shall conduct a balanced set of programs of energy research,

development, demonstration, and commercial application with the general

goals of--

(1) increasing the efficiency of all energy intensive

sectors through conservation and improved technologies;

(2) promoting diversity of energy supply;

(3) decreasing the dependence of the United States on

foreign energy supplies;

(4) improving the energy security of the United States; and

(5) decreasing the environmental impact of energy-related

activities.

(b) Goals.--The <<NOTE: Publication.>> Secretary shall publish

measurable cost and performance-based goals, comparable over time, 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

fuels.

(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, institutions of

higher education, and other public sources.

(d) Effect of Goals.--Nothing in subsection (a) or the annually

published goals creates any new authority for any Federal agency, or may

be used by any Federal agency, to support the establishment of

regulatory standards or regulatory requirements.

SEC. 903. <<NOTE: 42 USC 16182.>> DEFINITIONS.

In this title:

(1) Departmental mission.--The term ``departmental mission''

means any of the functions vested in the Secretary by the

Department of Energy Organization Act (42 U.S.C. 7101 et seq.)

or other law.

(2) Hispanic-serving institution.--The term ``Hispanic-

serving institution'' has the meaning given the term in section

502(a) of the Higher Education Act of 1965 (20 U.S.C. 1101a(a)).

(3) Nonmilitary energy laboratory.--The term ``nonmilitary

energy laboratory'' means a National Laboratory other

[[Page 119 STAT. 857]]

than a National Laboratory listed in subparagraph (G), (H), or

(N) of section 2(3).

(4) Part b institution.--The term ``part B institution'' has

the meaning given the term in section 322 of the Higher

Education Act of 1965 (20 U.S.C. 1061).

(5) Single-purpose research facility.--The term ``single-

purpose research facility'' means--

(A) any of the primarily single-purpose entities

owned by the Department; or

(B) any other organization of the Department

designated by the Secretary.

(6) University.--The term ``university'' has the meaning

given the term ``institution of higher education'' in section

101 of the Higher Education Act of 1965 (20 U.S.C. 1001).

Subtitle A--Energy Efficiency

SEC. 911. <<NOTE: 42 USC 16191.>> ENERGY EFFICIENCY.

(a) In General.--

(1) Objectives.--The Secretary shall conduct programs of

energy efficiency research, development, demonstration, and

commercial application, including activities described in this

subtitle. Such programs shall take into consideration the

following objectives:

(A) Increasing the energy efficiency of vehicles,

buildings, and industrial processes.

(B) Reducing the demand of the United States for

energy, especially energy from foreign sources.

(C) Reducing the cost of energy and making the

economy more efficient and competitive.

(D) Improving the energy security of the United

States.

(E) Reducing the environmental impact of energy-

related activities.

(2) Programs.--Programs under this subtitle shall include

research, development, demonstration, and commercial application

of--

(A) advanced, cost-effective technologies to improve

the energy efficiency and environmental performance of

vehicles, including--

(i) hybrid and electric propulsion systems;

(ii) plug-in hybrid systems;

(iii) advanced combustion engines;

(iv) weight and drag reduction technologies;

(v) whole-vehicle design optimization; and

(vi) advanced drive trains;

(B) cost-effective technologies, for new

construction and retrofit, to improve the energy

efficiency and environmental performance of buildings,

using a whole-buildings approach, including onsite

renewable energy generation;

(C) advanced technologies to improve the energy

efficiency, environmental performance, and process

efficiency of energy-intensive and waste-intensive

industries; and

(D) advanced control devices to improve the energy

efficiency of electric motors, including those used in

industrial processes, heating, ventilation, and cooling.

[[Page 119 STAT. 858]]

(b) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary to carry out energy efficiency and

conservation research, development, demonstration, and commercial

application activities, including activities authorized under this

subtitle--

(1) $783,000,000 for fiscal year 2007;

(2) $865,000,000 for fiscal year 2008; and

(3) $952,000,000 for fiscal year 2009.

(c) Allocations.--From amounts authorized under subsection (b), the

following sums are authorized:

(1) For activities under section 912, $50,000,000 for each

of fiscal years 2007 through 2009.

(2) For activities under section 915, $7,000,000 for each of

fiscal years 2007 through 2009.

(3) For activities under subsection (a)(2)(A)--

(A) $200,000,000 for fiscal year 2007;

(B) $270,000,000 for fiscal year 2008; and

(C) $310,000,000 for fiscal year 2009.

(4) For activities under subsection (a)(2)(D), $2,000,000

for each of fiscal years 2007 and 2008.

(d) Extended Authorization.--There are authorized to be appropriated

to the Secretary to carry out section 912 $50,000,000 for each of fiscal

years 2010 through 2013.

(e) Limitations.--None of the funds authorized to be appropriated

under this section may be used for--

(1) the issuance or implementation of energy efficiency

regulations;

(2) the weatherization program established under part A of

title IV of the Energy Conservation and Production Act (42

U.S.C. 6861 et seq.);

(3) a State energy conservation plan established under part

D of title III of the Energy Policy and Conservation Act (42

U.S.C. 6321 et seq.); or

(4) a Federal energy management measure carried out under

part 3 of title V of the National Energy Conservation Policy Act

(42 U.S.C. 8251 et seq.).

SEC. 912. <<NOTE: 42 USC 16192.>> NEXT GENERATION LIGHTING INITIATIVE.

(a) Definitions.--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) Industry alliance.--The term ``Industry Alliance'' means

an entity selected by the Secretary under subsection (d).

(3) Initiative.--The term ``Initiative'' means the Next

Generation Lighting Initiative carried out under this section.

(4) Research.--The term ``research'' includes research on

the technologies, materials, and manufacturing processes

required for white light emitting diodes.

(5) White light emitting diode.--The term ``white light

emitting diode'' means a semiconducting package, using either

organic or inorganic materials, that produces white light using

externally applied voltage.

(b) Initiative.--The Secretary shall carry out a Next Generation

Lighting Initiative in accordance with this section to support

[[Page 119 STAT. 859]]

research, development, demonstration, and commercial application

activities related to advanced solid-state lighting technologies based

on white light emitting diodes.

(c) 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, are more energy-

efficient and cost-competitive, and have less environmental impact.

(d) Industry Alliance.--Not <<NOTE: Deadline.>> later than 90 days

after the date of enactment of this Act, the Secretary shall

competitively select an Industry Alliance to represent participants who

are private, for-profit firms, open to large and small businesses, that,

as a group, are broadly representative of United States solid-state

lighting research, development, infrastructure, and manufacturing

expertise as a whole.

(e) Research.--

(1) Grants.--The Secretary shall carry out the research

activities of the Initiative through competitively awarded

grants to--

(A) researchers, including Industry Alliance

participants;

(B) small businesses;

(C) National Laboratories; and

(D) institutions of higher education.

(2) Industry alliance.--The Secretary shall annually solicit

from the Industry Alliance--

(A) comments to identify solid-state lighting

technology needs;

(B) an assessment of the progress of the research

activities of the Initiative; and

(C) assistance in annually updating solid-state

lighting technology roadmaps.

(3) Availability to public.--The information and roadmaps

under paragraph (2) shall be available to the public.

(f) Development, <<NOTE: Grants.>> Demonstration, and Commercial

Application.--

(1) In general.--The Secretary shall carry out a

development, demonstration, and commercial application program

for the Initiative through competitively selected awards.

(2) Preference.--In making the awards, the Secretary may

give preference to participants in the Industry Alliance.

(g) Cost Sharing.--In carrying out this section, the Secretary shall

require cost sharing in accordance with section 988.

(h) Intellectual Property.--The Secretary may require (in accordance

with 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 for any new invention developed under subsection

(e)--

(1) that the Industry Alliance participants who are active

participants in research, development, and demonstration

activities related to the advanced solid-state lighting

technologies that are covered by this section shall be granted

the first option to negotiate with the invention owner, at least

in the field of solid-state lighting, nonexclusive licenses and

royalties on terms that are reasonable under the circumstances;

[[Page 119 STAT. 860]]

(2)(A) that, 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 paragraph (1); and

(B) that, during the year described in subparagraph (A), the

patent holder shall negotiate nonexclusive licenses and

royalties in good faith with any interested participant in the

Industry Alliance described in paragraph (1); and

(3) such other terms as the Secretary determines are

required to promote accelerated commercialization of inventions

made under the Initiative.

(i) National Academy Review.--The Secretary shall enter into an

arrangement with the National Academy of Sciences to conduct periodic

reviews of the Initiative.

SEC. 913. <<NOTE: 42 USC 16193.>> NATIONAL BUILDING PERFORMANCE

INITIATIVE.

(a) Interagency Group.--

(1) In general.--

Not <<NOTE: Deadline. Establishment.>> 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 (referred to in this section as the

``Initiative'').

(2) Cochairs.--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 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.--

(1) In general.--Not <<NOTE: Deadline.>> 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.

(2) Inclusions.--The plan shall include--

(A) research, development, demonstration, and

commercial application of energy technology systems and

materials for new construction and retrofit relating to

the building envelope and building system components;

(B) research, development, demonstration, and

commercial application of energy technology and

infrastructure enabling the energy efficient, automated

operation of buildings and building equipment; and

(C) 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.--The <<NOTE: Establishment.>> Director of

the Office of Science and Technology Policy shall establish an advisory

committee to--

(1) analyze and provide recommendations on potential private

sector roles and participation in the Initiative; and

[[Page 119 STAT. 861]]

(2) review and provide recommendations on the plan described

in subsection (c).

(f) Administration.--Nothing in this section provides any Federal

agency with new authority to regulate building performance.

SEC. 914. <<NOTE: 42 USC 16194.>> BUILDING STANDARDS.

(a) Definition of High Performance Building.--In this section, the

term ``high performance building'' means a building that integrates and

optimizes all major high-performance building attributes, including

energy efficiency, durability, life-cycle performance, and occupant

productivity.

(b) Assessment.--Not <<NOTE: Deadline. Contracts.>> later than 120

days after the date of enactment of this Act, the Secretary shall enter

into an agreement with the National Institute of Building Sciences to--

(1) conduct an assessment (in cooperation with industry,

standards development organizations, and other entities, as

appropriate) of whether the current voluntary consensus

standards and rating systems for high performance buildings are

consistent with the current technological state of the art,

including relevant results from the research, development and

demonstration activities of the Department;

(2) determine if additional research is required, based on

the findings of the assessment; and

(3) recommend steps for the Secretary to accelerate the

development of voluntary consensus-based standards for high

performance buildings that are based on the findings of the

assessment.

(c) Grant and Technical Assistance Program.--Consistent with

subsection (b) and section 12(d) of the National Technology Transfer and

Advancement Act of 1995 (15 U.S.C. 272 note), the Secretary shall

establish a grant and technical assistance program to support the

development of voluntary consensus-based standards for high performance

buildings.

SEC. 915. <<NOTE: 42 USC 16195.>> SECONDARY ELECTRIC VEHICLE BATTERY USE

PROGRAM.

(a) Definitions.--In this section:

(1) 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.

(2) 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.

(b) Program.--

(1) In general.--The Secretary shall establish and conduct a

program of research, development, demonstration, and commercial

application of energy technology for the secondary use of

batteries, if the Secretary finds that there are sufficient

numbers of batteries to support the program.

(2) Administration.--The program shall be--

(A) designed to demonstrate the use of batteries in

secondary applications, including utility and commercial

power storage and power quality;

(B) 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

[[Page 119 STAT. 862]]

(C) coordinated with ongoing secondary battery use

programs at the National Laboratories and in industry.

(c) Solicitation.--

(1) In general.--Not <<NOTE: Deadline.>> later than 180 days

after the date of enactment of this Act, the Secretary shall

solicit proposals to demonstrate the secondary use of batteries

and associated equipment and supporting infrastructure in

geographic locations throughout the United States.

(2) Additional solicitations.--The Secretary may make

additional solicitations for proposals if the Secretary

determines that the solicitations are necessary to carry out

this section.

(d) Selection of Proposals.--

(1) In general.--Not <<NOTE: Deadline.>> later than 90 days

after the closing date established by the Secretary for receipt

of proposals under subsection (c), the Secretary shall select up

to five proposals that may receive financial assistance under

this section once the Department receives appropriated funds to

carry out this section.

(2) Factors.--In selecting proposals, the Secretary shall

consider--

(A) the diversity of battery type;

(B) geographic and climatic diversity; and

(C) life-cycle environmental effects of the

approaches.

(3) Limitation.--No one project selected under this section

shall receive more than 25 percent of the funds made available

to carry out the program under this section.

(4) Non-federal involvement.--In selecting proposals, 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.--In selecting proposals, the Secretary

may consider such other criteria as the Secretary considers

appropriate.

(e) Conditions.--In carrying out this section, the Secretary shall

require that--

(1) relevant information be provided to--

(A) the Department;

(B) the users of the batteries;

(C) the proposers of a project under this section;

and

(D) the battery manufacturers; and

(2) the costs of carrying out projects and activities under

this section are shared in accordance with section 988.

SEC. 916. <<NOTE: 42 USC 16196.>> 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

annual budget request of the President submitted to Congress, 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.

[[Page 119 STAT. 863]]

SEC. 917. <<NOTE: 42 USC 16197.>> ADVANCED ENERGY EFFICIENCY TECHNOLOGY

TRANSFER CENTERS.

(a) Grants.--Not <<NOTE: Deadline. Establishment.>> 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 Efficiency Technology Transfer

Centers, to be located in areas the Secretary determines have the

greatest need of the services of such Centers. In establishing the

network, the Secretary shall consider the special needs and

opportunities for increased energy efficiency for manufactured and site-

built housing.

(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 <<NOTE: Establishment.>> 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

described in subsection (b)(1).

(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) Cost-Sharing.--In carrying out this section, the Secretary shall

require cost-sharing in accordance with the requirements of section 988

for commercial application activities.

(f) Advisory Committee.--The <<NOTE: Establishment.>> 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 one 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.

[[Page 119 STAT. 864]]

(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.

(h) Authorization of Appropriations.--In addition to amounts

otherwise authorized to be appropriated in section 911, there are

authorized to be appropriated for the program under this section such

sums as may be appropriated.

Subtitle B--Distributed Energy and Electric Energy Systems

SEC. 921. <<NOTE: 42 USC 16211.>> DISTRIBUTED ENERGY AND ELECTRIC ENERGY

SYSTEMS.

(a) In General.--The Secretary shall carry out programs of research,

development, demonstration, and commercial application on distributed

energy resources and systems reliability and efficiency, to improve the

reliability and efficiency of distributed energy resources and systems,

integrating advanced energy technologies with grid connectivity,

including activities described in this subtitle. The programs shall

address advanced energy technologies and systems and advanced grid

reliability technologies.

(b) Authorization of Appropriations.--

(1) Distributed energy and electric energy systems

activities.--There are authorized to be appropriated to the

Secretary to carry out distributed energy and electric energy

systems activities, including activities authorized under this

subtitle--

(A) $240,000,000 for fiscal year 2007;

(B) $255,000,000 for fiscal year 2008; and

(C) $273,000,000 for fiscal year 2009.

(2) Power delivery research initiative.--There are

authorized to be appropriated to the Secretary to carry out the

Power Delivery Research Initiative under subsection 925(e) such

sums as may be necessary for each of fiscal years 2007 through

2009.

(c) Micro-Cogeneration Energy Technology.--From amounts authorized

under subsection (b), $20,000,000 for each of fiscal years 2007 and 2008

shall be available to carry out activities under section 923.

(d) High-Voltage Transmission Lines.--From amounts authorized under

subsection (b), $2,000,000 for fiscal year 2007 shall be available to

carry out activities under section 925(g).

SEC. 922. <<NOTE: 42 USC 16212.>> HIGH POWER DENSITY INDUSTRY PROGRAM.

(a) In General.--The Secretary shall establish a comprehensive

research, development, demonstration, and commercial application to

improve the energy efficiency of high power density facilities,

including data centers, server farms, and telecommunications facilities.

(b) Technologies.--The program shall consider technologies that

provide significant improvement in thermal controls, metering, load

management, peak load reduction, or the efficient cooling of

electronics.

[[Page 119 STAT. 865]]

SEC. 923. <<NOTE: 42 USC 16213.>> MICRO-COGENERATION ENERGY TECHNOLOGY.

(a) In General.--The Secretary shall make competitive, merit-based

grants to consortia for the development of micro-cogeneration energy

technology.

(b) Uses.--The consortia shall explore--

(1) the use of small-scale combined heat and power in

residential heating appliances;

(2) the use of excess power to operate other appliances

within the residence; and

(3) the supply of excess generated power to the power grid.

SEC. 924. <<NOTE: 42 USC 16214.>> DISTRIBUTED ENERGY TECHNOLOGY

DEMONSTRATION PROGRAMS.

(a) Coordinating Consortia Program.--The Secretary may provide

financial assistance to coordinating consortia of interdisciplinary

participants for demonstrations designed to accelerate the use of

distributed energy technologies (such as fuel cells, microturbines,

reciprocating engines, thermally activated technologies, and combined

heat and power systems) in high-energy intensive commercial

applications.

(b) Small-Scale Portable Power Program.--

(1) In general.--The Secretary shall--

(A) establish a research, development, and

demonstration program to develop working models of small

scale portable power devices; and

(B) to the fullest extent practicable, identify and

utilize the resources of universities that have shown

expertise with respect to advanced portable power

devices for either civilian or military use.

(2) Organization.--The universities identified and utilized

under paragraph (1)(B) are authorized to establish an

organization to promote small scale portable power devices.

(3) Definition.--For purposes of this subsection, the term

``small scale portable power device'' means a field-deployable

portable mechanical or electromechanical device that can be used

for applications such as communications, computation, mobility

enhancement, weapons systems, optical devices, cooling, sensors,

medical devices, and active biological agent detection systems.

SEC. 925. <<NOTE: 42 USC 16215.>> ELECTRIC TRANSMISSION AND DISTRIBUTION

PROGRAMS.

(a) Program.--The Secretary shall establish a comprehensive

research, development, and demonstration program to ensure the

reliability, efficiency, and environmental integrity of electrical

transmission and distribution systems, which shall include--

(1) advanced energy delivery technologies, energy storage

technologies, materials, and systems, giving priority to new

transmission technologies, including 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;

[[Page 119 STAT. 866]]

(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.--

(1) In general.--Not <<NOTE: Deadline.>> later than 1 year

after the date of enactment of this Act, the Secretary, in

consultation with other appropriate Federal agencies, shall

prepare and submit to Congress a 5-year program plan to guide

activities under this section.

(2) Consultation.--In preparing the program plan, the

Secretary shall consult with--

(A) utilities;

(B) energy service providers;

(C) manufacturers;

(D) institutions of higher education;

(E) other appropriate State and local agencies;

(F) environmental organizations;

(G) professional and technical societies; and

(H) any other persons the Secretary considers

appropriate.

(c) Implementation.--The Secretary shall consider implementing the

program under this section using a consortium of participants from

industry, institutions of higher education, and National Laboratories.

(d) Report.--Not later than 2 years after the submission of the plan

under subsection (b), the Secretary shall submit to Congress a report--

(1) describing the progress made under this section; and

(2) identifying any additional resources needed to continue

the development and commercial application of transmission and

distribution of infrastructure technologies.

(e) Power Delivery Research Initiative.--

(1) In general.--The Secretary shall establish a research,

development, and demonstration initiative specifically focused

on power delivery using components incorporating high

temperature superconductivity.

(2) Goals.--The goals of the Initiative shall be--

(A) to establish world-class facilities to develop

high temperature superconductivity power applications in

partnership with manufacturers and utilities;

(B) to provide technical leadership for establishing

reliability for high temperature superconductivity power

applications, including suitable modeling and analysis;

[[Page 119 STAT. 867]]

(C) to facilitate the commercial transition toward

direct current power transmission, storage, and use for

high power systems using high temperature

superconductivity; and

(D) to 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) Inclusions.--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 institutions of higher

education to--

(i) demonstrate those technologies;

(ii) prepare the technologies for commercial

introduction; and

(iii) address cost or performance roadblocks

to successful commercial use.

(f) Transmission and Distribution Grid Planning and Operations

Initiative.--

(1) In general.--The Secretary shall establish a research,

development, and demonstration initiative specifically focused

on tools needed to plan, operate, and expand the transmission

and distribution grids in the presence of competitive market

mechanisms for energy, load demand, customer response, and

ancillary services.

(2) Goals.--The goals of the Initiative shall be--

(A)(i) to develop and use a geographically

distributed center, consisting of institutions of higher

education, and National Laboratories, with expertise and

facilities to develop the underlying theory and software

for power system application; and

(ii) to ensure commercial development in partnership

with software vendors and utilities;

(B) to provide technical leadership in engineering

and economic analysis for the reliability and efficiency

of power systems planning and operations in the presence

of competitive markets for electricity;

(C) to model, simulate, and experiment with new

market mechanisms and operating practices to understand

and optimize those new methods before actual use; and

(D) to provide technical support and technology

transfer to electric utilities and other participants in

the domestic electric industry and marketplace.

(g) High-voltage <<NOTE: Grants.>> Transmission Lines.--As part of

the program described in subsection (a), the Secretary shall award a

grant to a university research program to design and test, in

consultation with the Tennessee Valley Authority, state-of-the-art

optimization

[[Page 119 STAT. 868]]

techniques for power flow through existing high voltage transmission

lines.

Subtitle C--Renewable Energy

SEC. 931. <<NOTE: 42 USC 16231.>> RENEWABLE ENERGY.

(a) In General.--

(1) Objectives.--The Secretary shall conduct programs of

renewable energy research, development, demonstration, and

commercial application, including activities described in this

subtitle. Such programs shall take into consideration the

following objectives:

(A) Increasing the conversion efficiency of all

forms of renewable energy through improved technologies.

(B) Decreasing the cost of renewable energy

generation and delivery.

(C) Promoting the diversity of the energy supply.

(D) Decreasing the dependence of the United States

on foreign energy supplies.

(E) Improving United States energy security.

(F) Decreasing the environmental impact of energy-

related activities.

(G) Increasing the export of renewable generation

equipment from the United States.

(2) Programs.--

(A) Solar energy.--The Secretary shall conduct a

program of research, development, demonstration, and

commercial application for solar energy, including--

(i) photovoltaics;

(ii) solar hot water and solar space heating;

(iii) concentrating solar power;

(iv) lighting systems that integrate sunlight

and electrical lighting in complement to each

other in common lighting fixtures for the purpose

of improving energy efficiency;

(v) manufacturability of low cost, high

quality solar systems; and

(vi) development of products that can be

easily integrated into new and existing buildings.

(B) Wind energy.--The Secretary shall conduct a

program of research, development, demonstration, and

commercial application for wind energy, including--

(i) low speed wind energy;

(ii) offshore wind energy;

(iii) testing and verification (including

construction and operation of a research and

testing facility capable of testing wind

turbines); and

(iv) distributed wind energy generation.

(C) Geothermal.--The Secretary shall conduct a

program of research, development, demonstration, and

commercial application for geothermal energy. The

program shall focus on developing improved technologies

for reducing the costs of geothermal energy

installations, including technologies for--

(i) improving detection of geothermal

resources;

(ii) decreasing drilling costs;

[[Page 119 STAT. 869]]

(iii) decreasing maintenance costs through

improved materials;

(iv) increasing the potential for other

revenue sources, such as mineral production; and

(v) increasing the understanding of reservoir

life cycle and management.

(D) Hydropower.--The Secretary shall conduct a

program of research, development, demonstration, and

commercial application for cost competitive technologies

that enable the development of new and incremental

hydropower capacity, adding to the diversity of the

energy supply of the United States, including:

(i) Fish-friendly large turbines.

(ii) Advanced technologies to enhance

environmental performance and yield greater energy

efficiencies.

(E) Miscellaneous projects.--The Secretary shall

conduct research, development, demonstration, and

commercial application programs for--

(i) ocean energy, including wave energy;

(ii) 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;

(iii) renewable energy technologies for

cogeneration of hydrogen and electricity; and

(iv) kinetic hydro turbines.

(b) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary to carry out renewable energy research,

development, demonstration, and commercial application activities,

including activities authorized under this subtitle--

(1) $632,000,000 for fiscal year 2007;

(2) $743,000,000 for fiscal year 2008; and

(3) $852,000,000 for fiscal year 2009.

(c) Bioenergy.--From the amounts authorized under subsection (b),

there are authorized to be appropriated to carry out section 932--

(1) $213,000,000 for fiscal year 2007, of which $100,000,000

shall be for section 932(d);

(2) $251,000,000 for fiscal year 2008, of which $125,000,000

shall be for section 932(d); and

(3) $274,000,000 for fiscal year 2009, of which $150,000,000

shall be for section 932(d).

(d) Solar Power.--From amounts authorized under subsection (b),

there is authorized to be appropriated to carry out activities under

subsection (a)(2)(A)--

(1) $140,000,000 for fiscal year 2007, of which $40,000,000

shall be for activities under section 935;

(2) $200,000,000 for fiscal year 2008, of which $50,000,000

shall be for activities under section 935; and

(3) $250,000,000 for fiscal year 2009, of which $50,000,000

shall be for activities under section 935.

(e) Administration.--Of the funds authorized under subsection (c),

not less than $5,000,000 for each fiscal year shall be made available

for grants to--

(1) part B institutions;

[[Page 119 STAT. 870]]

(2) Tribal Colleges or Universities (as defined in section

316(b) of the Higher Education Act of 1965 (20 U.S.C.

1059c(b))); and

(3) Hispanic-serving institutions.

(f) Rural Demonstration Projects.--In carrying out this section, the

Secretary, in consultation with the Secretary of Agriculture, shall

demonstrate the use of renewable energy technologies to assist in

delivering electricity to rural and remote locations including --

(1) advanced wind power technology, including combined use

with coal gasification;

(2) biomass; and

(3) geothermal energy systems.

(g) Analysis and Evaluation.--

(1) In general.--The Secretary shall conduct analysis and

evaluation in support of the renewable energy programs under

this subtitle. These activities shall be used to guide budget

and program decisions, and shall include--

(A) economic and technical analysis of renewable

energy potential, including resource assessment;

(B) analysis of past program performance, both in

terms of technical advances and in market introduction

of renewable energy; and

(C) any other analysis or evaluation that the

Secretary considers appropriate.

(2) Funding.--The Secretary may designate up to 1 percent of

the funds appropriated for carrying out this subtitle for

analysis and evaluation activities under this subsection.

SEC. 932. <<NOTE: 42 USC 16232.>> BIOENERGY PROGRAM.

(a) Definitions.--In this section:

(1) Biomass.--The term ``biomass'' means--

(A) any organic material grown for the purpose of

being converted to energy;

(B) any organic byproduct of agriculture (including

wastes from food production and processing) that can be

converted into energy; or

(C) any waste material that can be converted to

energy, is segregated from other waste materials, and is

derived from--

(i) any of the following forest-related

resources: mill residues, precommercial thinnings,

slash, brush, or otherwise nonmerchantable

material; or

(ii) 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

municipal solid waste, or paper that is commonly

recycled.

(2) Lignocellulosic feedstock.--The term ``lignocellulosic

feedstock'' means any portion of a plant or coproduct from

conversion, including crops, trees, forest residues, and

agricultural residues not specifically grown for food, including

from barley grain, grapeseed, rice bran, rice hulls, rice straw,

soybean matter, and sugarcane bagasse.

[[Page 119 STAT. 871]]

(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) bioproducts;

(4) integrated biorefineries that may produce biopower,

biofuels, and bioproducts;

(5) cross-cutting research and development in feedstocks;

and

(6) economic analysis.

(c) Biofuels and Bioproducts.--The goals of the biofuels and

bioproducts programs shall be to develop, in partnership with industry

and institutions of higher education--

(1) advanced biochemical and thermochemical conversion

technologies capable of making fuels from lignocellulosic

feedstocks that are price-competitive with gasoline or diesel in

either internal combustion engines or fuel cell-powered

vehicles;

(2) advanced biotechnology processes capable of making

biofuels and bioproducts with emphasis on development of

biorefinery technologies using enzyme-based processing systems;

(3) advanced biotechnology processes capable of increasing

energy production from lignocellulosic feedstocks, with emphasis

on reducing the dependence of industry on fossil fuels in

manufacturing facilities; and

(4) other advanced processes that will enable the

development of cost-effective bioproducts, including biofuels.

(d) Integrated Biorefinery Demonstration Projects.--

(1) In general.--The Secretary shall carry out a program to

demonstrate the commercial application of integrated

biorefineries. The Secretary shall ensure geographical

distribution of biorefinery demonstrations under this

subsection. The Secretary shall not provide more than

$100,000,000 under this subsection for any single biorefinery

demonstration. In making awards under this subsection, the

Secretary shall encourage--

(A) the demonstration of a wide variety of

lignocellulosic feedstocks;

(B) the commercial application of biomass

technologies for a variety of uses, including--

(i) liquid transportation fuels;

(ii) high-value biobased chemicals;

(iii) substitutes for petroleum-based

feedstocks and products; and

(iv) energy in the form of electricity or

useful heat; and

(C) the demonstration of the collection and

treatment of a variety of biomass feedstocks.

(2) Proposals.--Not <<NOTE: Deadline.>> later than 6 months

after the date of enactment of this Act, the Secretary shall

solicit proposals for demonstration of advanced biorefineries.

The Secretary shall select only proposals that--

(A) demonstrate that the project will be able to

operate profitably without direct Federal subsidy after

initial construction costs are paid; and

(B) enable the biorefinery to be easily replicated.

(e) University Biodiesel Program.--The Secretary shall establish a

demonstration program to determine the feasibility of

[[Page 119 STAT. 872]]

the operation of diesel electric power generators, using biodiesel fuels

with ratings as high as B100, at electric generation facilities owned by

institutions of higher education. The program shall examine--

(1) heat rates of diesel fuels with large quantities of

cellulosic content;

(2) the reliability of operation of various fuel blends;

(3) performance in cold or freezing weather;

(4) stability of fuel after extended storage; and

(5) other criteria, as determined by the Secretary.

SEC. 933. <<NOTE: 42 USC 16233.>> LOW-COST RENEWABLE HYDROGEN AND

INFRASTRUCTURE FOR VEHICLE PROPULSION.

The Secretary shall--

(1) establish a research, development, and demonstration

program to determine the feasibility of using hydrogen

propulsion in light-weight vehicles and the integration of the

associated hydrogen production infrastructure using off-the-

shelf components; and

(2) identify universities and institutions that--

(A) have expertise in researching and testing

vehicles fueled by hydrogen, methane, and other fuels;

(B) have expertise in integrating off-the-shelf

components to minimize cost; and

(C) within 2 years can test a vehicle based on an

existing commercially available platform with a curb

weight of not less than 2,000 pounds before

modifications, that--

(i) operates solely on hydrogen;

(ii) qualifies as a light-duty passenger

vehicle; and

(iii) uses hydrogen produced from water using

only solar energy.

SEC. 934. <<NOTE: 42 USC 16234.>> CONCENTRATING SOLAR POWER RESEARCH

PROGRAM.

(a) In General.--The Secretary shall conduct a program of research

and development to evaluate the potential for concentrating solar power

for hydrogen production, including cogeneration approaches for both

hydrogen and electricity.

(b) Administration.--The program shall take advantage of existing

facilities to the extent practicable 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) cogeneration of solar thermal electric power and photo-

synthetic-based hydrogen production;

(5) system architectures and economics studies; and

(6) coordination with activities under the Next Generation

Nuclear Plant Project established under subtitle C of title VI

on high temperature materials, thermochemical cycles, and

economic issues.

(c) 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 in the report entitled

[[Page 119 STAT. 873]]

``Renewable Power Pathways: A Review of the U.S. Department of

Energy's Renewable Energy Programs'' and dated 2000 and

subsequent reviews of that report funded by the Department; and

(2) provide an assessment of the potential impact of

technology used to concentrate solar power for electricity

before, or concurrent with, submission of the budget for fiscal

year 2008.

(d) Report.--Not later than 5 years after the date of enactment of

this Act, the Secretary shall provide to Congress a report 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. 935. <<NOTE: 42 USC 16235.>> 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.--Notwithstanding section 988, 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) Requirements.--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.

Subtitle D--Agricultural Biomass Research and Development Programs

SEC. 941. <<NOTE: 7 USC 8101 note.>> AMENDMENTS TO THE BIOMASS RESEARCH

AND DEVELOPMENT ACT OF 2000.

(a) Definitions.--Section 303 of the Biomass Research and

Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 note) is

amended--

(1) by striking paragraphs (2), (9), and (10);

(2) by redesignating paragraphs (3), (4), (5), (6), (7), and

(8) as paragraphs (4), (5), (7), (8), (9), and (10),

respectively;

(3) by inserting after paragraph (1) the following:

``(2) Biobased fuel.--The term `biobased fuel' means any

transportation fuel produced from biomass.

``(3) Biobased product.--The term `biobased product' means

an industrial product (including chemicals, materials, and

polymers) produced from biomass, or a commercial or industrial

product (including animal feed and electric power) derived in

connection with the conversion of biomass to fuel.'';

(4) by inserting after paragraph (5) (as redesignated by

paragraph (2)) the following:

[[Page 119 STAT. 874]]

``(6) Demonstration.--The term `demonstration' means

demonstration of technology in a pilot plant or semi-works scale

facility.''; and

(5) by striking paragraph (9) (as redesignated by paragraph

(2)) and inserting the following:

``(9) National laboratory.--The term `National Laboratory'

has the meaning given that term in section 2 of the Energy

Policy Act of 2005.''

(b) Cooperation and Coordination in Biomass Research and

Development.--Section 304 of the Biomass Research and Development Act of

2000 (Public Law 106-224; 7 U.S.C. 8101 note) is amended--

(1) in subsections (a) and (d), by striking ``industrial

products'' each place it appears and inserting ``fuels and

biobased products'';

(2) by striking subsections (b) and (c); and

(3) by redesignating subsection (d) as subsection (b).

(c) Biomass Research and Development Board.--Section 305 of the

Biomass Research and Development Act of 2000 (Public Law 106-224; 7

U.S.C. 8101 note) is amended--

(1) in subsections (a) and (c), by striking ``industrial

products'' each place it appears and inserting ``fuels and

biobased products'';

(2) in subsection (b)--

(A) in paragraph (1), by striking ``304(d)(1)(B)''

and inserting ``304(b)(1)(B)''; and

(B) in paragraph (2), by striking ``304(d)(1)(A)''

and inserting ``304(b)(1)(A)''; and

(3) in subsection (c)--

(A) in paragraph (1)(B), by striking ``and'' at the

end;

(B) in paragraph (2), by striking the period at the

end and inserting a semicolon; and

(C) by adding at the end the following:

``(3) ensure that--

``(A) solicitations are open and competitive with

awards made annually; and

``(B) objectives and evaluation criteria of the

solicitations are clearly stated and minimally

prescriptive, with no areas of special interest; and

``(4) ensure that the panel of scientific and technical

peers assembled under section 307(g)(1)(C) to review proposals

is composed predominantly of independent experts selected from

outside the Departments of Agriculture and Energy.''.

(d) Biomass Research and Development Technical Advisory Committee.--

Section 306 of the Biomass Research and Development Act of 2000 (Public

Law 106-224; 7 U.S.C. 8101 note) is amended--

(1) in subsection (b)(1)--

(A) in subparagraph (A), by striking ``biobased

industrial products'' and inserting ``biofuels'';

(B) by redesignating subparagraphs (B) through (J)

as subparagraphs (C) through (K), respectively;

(C) by inserting after subparagraph (A) the

following:

``(B) an individual affiliated with the biobased

industrial and commercial products industry;'';

[[Page 119 STAT. 875]]

(D) in subparagraph (F) (as redesignated by

subparagraph (B)) by striking ``an individual has'' and

inserting ``2 individuals have'';

(E) in subparagraphs (C), (D), (G), and (I) (as

redesignated by subparagraph (B)) by striking

``industrial products'' each place it appears and

inserting ``fuels and biobased products''; and

(F) in subparagraph (H) (as redesignated by

subparagraph (B)), by inserting ``and environmental''

before ``analysis'';

(2) in subsection (c)(2)--

(A) in subparagraph (A), by striking ``goals'' and

inserting ``objectives, purposes, and considerations'';

(B) by redesignating subparagraphs (B) and (C) as

subparagraphs (C) and (D), respectively;

(C) by inserting after subparagraph (A) the

following:

``(B) solicitations are open and competitive with

awards made annually and that objectives and evaluation

criteria of the solicitations are clearly stated and

minimally prescriptive, with no areas of special

interest;''; and

(D) in subparagraph (C) (as redesignated by

subparagraph (B)) by inserting ``predominantly from

outside the Departments of Agriculture and Energy''

after ``technical peers''.

(e) Biomass Research and Development Initiative.--Section 307 of the

Biomass Research and Development Act of 2000 (Public Law 106-224; 7

U.S.C. 8101 note) is amended--

(1) in subsection (a), by striking ``research on biobased

industrial products'' and inserting ``research on, and

development and demonstration of, biobased fuels and biobased

products, and the methods, practices and technologies, for their

production''; and

(2) by striking subsections (b) through (e) and inserting

the following:

``(b) Objectives.--The objectives of the Initiative are to develop--

``(1) technologies and processes necessary for abundant

commercial production of biobased fuels at prices competitive

with fossil fuels;

``(2) high-value biobased products--

``(A) to enhance the economic viability of biobased

fuels and power; and

``(B) as substitutes for petroleum-based feedstocks

and products; and

``(3) a diversity of sustainable domestic sources of biomass

for conversion to biobased fuels and biobased products.

``(c) Purposes.--The purposes of the Initiative are--

``(1) to increase the energy security of the United States;

``(2) to create jobs and enhance the economic development of

the rural economy;

``(3) to enhance the environment and public health; and

``(4) to diversify markets for raw agricultural and forestry

products.

``(d) Technical Areas.--To advance the objectives and purposes of

the Initiative, the Secretary of Agriculture and the Secretary

[[Page 119 STAT. 876]]

of Energy, in consultation with the Administrator of the Environmental

Protection Agency and heads of other appropriate departments and

agencies (referred to in this section as the `Secretaries'), shall

direct research and development toward--

``(1) feedstock production through the development of crops

and cropping systems relevant to production of raw materials for

conversion to biobased fuels and biobased products, including--

``(A) development of advanced and dedicated crops

with desired features, including enhanced productivity,

broader site range, low requirements for chemical

inputs, and enhanced processing;

``(B) advanced crop production methods to achieve

the features described in subparagraph (A);

``(C) feedstock harvest, handling, transport, and

storage; and

``(D) strategies for integrating feedstock

production into existing managed land;

``(2) overcoming recalcitrance of cellulosic biomass through

developing technologies for converting cellulosic biomass into

intermediates that can subsequently be converted into biobased

fuels and biobased products, including--

``(A) pretreatment in combination with enzymatic or

microbial hydrolysis; and

``(B) thermochemical approaches, including

gasification and pyrolysis;

``(3) product diversification through technologies relevant

to production of a range of biobased products (including

chemicals, animal feeds, and cogenerated power) that eventually

can increase the feasibility of fuel production in a

biorefinery, including--

``(A) catalytic processing, including thermochemical

fuel production;

``(B) metabolic engineering, enzyme engineering, and

fermentation systems for biological production of

desired products or cogeneration of power;

``(C) product recovery;

``(D) power production technologies; and

``(E) integration into existing biomass processing

facilities, including starch ethanol plants, paper

mills, and power plants; and

``(4) analysis that provides strategic guidance for the

application of biomass technologies in accordance with

realization of improved sustainability and environmental

quality, cost effectiveness, security, and rural economic

development, usually featuring system-wide approaches.

``(e) Additional Considerations.--Within the technical areas

described in subsection (d), and in addition to advancing the purposes

described in subsection (c) and the objectives described in subsection

(b), the Secretaries shall support research and development--

``(1) to create continuously expanding opportunities for

participants in existing biofuels production by seeking

synergies and continuity with current technologies and

practices, such as the use of dried distillers grains as a

bridge feedstock;

``(2) to maximize the environmental, economic, and social

benefits of production of biobased fuels and biobased products

[[Page 119 STAT. 877]]

on a large scale through life-cycle economic and environmental

analysis and other means; and

``(3) to assess the potential of Federal land and land

management programs as feedstock resources for biobased fuels

and biobased products, consistent with the integrity of soil and

water resources and with other environmental considerations.

``(f) Eligible Entities.--To be eligible for a grant, contract, or

assistance under this section, an applicant shall be--

``(1) an institution of higher education;

``(2) a National Laboratory;

``(3) a Federal research agency;

``(4) a State research agency;

``(5) a private sector entity;

``(6) a nonprofit organization; or

``(7) a consortium of two or more entities described in

paragraphs (1) through (6).

``(g) Administration.--

``(1) In general.--After consultation with the Board, the

points of contact shall--

``(A) publish annually one or more joint requests

for proposals for grants, contracts, and assistance

under this section;

``(B) require that grants, contracts, and assistance

under this section be awarded competitively, on the

basis of merit, after the establishment of procedures

that provide for scientific peer review by an

independent panel of scientific and technical peers; and

``(C) give some preference to applications that--

``(i) involve a consortia of experts from

multiple institutions;

``(ii) encourage the integration of

disciplines and application of the best technical

resources; and

``(iii) increase the geographic diversity of

demonstration projects.

``(2) Distribution of funding by technical area.--Of the

funds authorized to be appropriated for activities described in

this section, funds shall be distributed for each of fiscal

years 2007 through 2010 so as to achieve an approximate

distribution of--

``(A) 20 percent of the funds to carry out

activities for feedstock production under subsection

(d)(1);

``(B) 45 percent of the funds to carry out

activities for overcoming recalcitrance of cellulosic

biomass under subsection (d)(2);

``(C) 30 percent of the funds to carry out

activities for product diversification under subsection

(d)(3); and

``(D) 5 percent of the funds to carry out activities

for strategic guidance under subsection (d)(4).

``(3) Distribution of funding within each technical area.--

Within each technical area described in paragraphs (1) through

(3) of subsection (d), funds shall be distributed for each of

fiscal years 2007 through 2010 so as to achieve an approximate

distribution of--

``(A) 15 percent of the funds for applied

fundamentals;

``(B) 35 percent of the funds for innovation; and

``(C) 50 percent of the funds for demonstration.

[[Page 119 STAT. 878]]

``(4) Matching funds.--

``(A) In general.--A minimum 20 percent funding

match shall be required for demonstration projects under

this title.

``(B) Commercial applications.--A minimum of 50

percent funding match shall be required for commercial

application projects under this title.

``(5) Technology and information transfer to agricultural

users.--The Administrator of the Cooperative State Research,

Education, and Extension Service and the Chief of the Natural

Resources Conservation Service shall ensure that applicable

research results and technologies from the Initiative are

adapted, made available, and disseminated through those

services, as appropriate.''.

(f) Annual Reports.--Section 309 of the Biomass Research and

Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 note) is

amended--

(1) in subsection (b)--

(A) in paragraph (1)--

(i) in subparagraph (A), by striking

``purposes described in section 307(b)'' and

inserting ``objectives, purposes, and additional

considerations described in subsections (b)

through (e) of section 307'';

(ii) in subparagraph (B), by striking ``and''

at the end;

(iii) by redesignating subparagraph (C) as

subparagraph (D); and

(iv) by inserting after subparagraph (B) the

following:

``(C) achieves the distribution of funds described

in paragraphs (2) and (3) of section 307(g); and''; and

(B) in paragraph (2), by striking ``industrial

products'' and inserting ``fuels and biobased

products''; and

(2) by adding at the end the following:

``(c) Updates.--The Secretary and the Secretary of Energy shall

update the Vision and Roadmap documents prepared for Federal biomass

research and development activities.''.

(g) Authorization of Appropriations.--Section 310(b) of the Biomass

Research and Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101

note) is amended by striking ``title $54,000,000 for each of fiscal

years 2002 through 2007'' and inserting ``title $200,000,000 for each of

fiscal years 2006 through 2015''.

(h) Repeal of Sunset Provision.--Section 311 of the Biomass Research

and Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 note) is

repealed.

SEC. 942. <<NOTE: 42 USC 16251.>> PRODUCTION INCENTIVES FOR CELLULOSIC

BIOFUELS.

(a) Purpose.--The purpose of this section is to--

(1) accelerate deployment and commercialization of biofuels;

(2) deliver the first 1,000,000,000 gallons in annual

cellulosic biofuels production by 2015;

(3) ensure biofuels produced after 2015 are cost competitive

with gasoline and diesel; and

(4) ensure that small feedstock producers and rural small

businesses are full participants in the development of the

cellulosic biofuels industry.

[[Page 119 STAT. 879]]

(b) Definitions.--In this section:

(1) Cellulosic biofuels.--The term ``cellulosic biofuels''

means any fuel that is produced from cellulosic feedstocks.

(2) Eligible entity.--The term ``eligible entity'' means a

producer of fuel from cellulosic biofuels the production

facility of which--

(A) is located in the United States;

(B) meets all applicable Federal and State

permitting requirements; and

(C) meets any financial criteria established by the

Secretary.

(c) Program.--

(1) Establishment.--The Secretary, in consultation with the

Secretary of Agriculture, the Secretary of Defense, and the

Administrator of the Environmental Protection Agency, shall

establish an incentive program for the production of cellulosic

biofuels.

(2) Basis of incentives.--Under the program, the Secretary

shall award production incentives on a per gallon basis of

cellulosic biofuels from eligible entities, through--

(A) set payments per gallon of cellulosic biofuels

produced in an amount determined by the Secretary, until

initiation of the first reverse auction; and

(B) reverse auction thereafter.

(3) First reverse auction.--The <<NOTE: Deadlines.>> first

reverse auction shall be held on the earlier of--

(A) not later than 1 year after the first year of

annual production in the United States of 100,000,000

gallons of cellulosic biofuels, as determined by the

Secretary; or

(B) not later than 3 years after the date of

enactment of this Act.

(4) Reverse auction procedure.--

(A) In general.--On initiation of the first reverse

auction, and each year thereafter until the earlier of

the first year of annual production in the United States

of 1,000,000,000 gallons of cellulosic biofuels, as

determined by the Secretary, or 10 years after the date

of enactment of this Act, the Secretary shall conduct a

reverse auction at which--

(i) the Secretary shall solicit bids from

eligible entities;

(ii) eligible entities shall submit--

(I) a desired level of production

incentive on a per gallon basis; and

(II) an estimated annual production

amount in gallons; and

(iii) the Secretary shall issue awards for the

production amount submitted, beginning with the

eligible entity submitting the bid for the lowest

level of production incentive on a per gallon

basis and meeting such other criteria as are

established by the Secretary, until the amount of

funds available for the reverse auction is

committed.

(B) Amount of incentive received.--An eligible

entity selected by the Secretary through a reverse

auction shall receive the amount of performance

incentive

[[Page 119 STAT. 880]]

requested in the auction for each gallon produced and

sold by the entity during the first 6 years of

operation.

(C) Commencement

of <<NOTE: Deadline. Contracts.>> production of

cellulosic biofuels.--As a condition of the receipt of

an award under this section, an eligible entity shall

enter into an agreement with the Secretary under which

the eligible entity agrees to begin production of

cellulosic biofuels not later than 3 years after the

date of the reverse auction in which the eligible entity

participates.

(d) Limitations.--Awards under this section shall be limited to--

(1) a per gallon amount determined by the Secretary during

the first 4 years of the program;

(2) a declining per gallon cap over the remaining lifetime

of the program, to be established by the Secretary so that

cellulosic biofuels produced after the first year of annual

cellulosic biofuels production in the United States in excess of

1,000,000,000 gallons are cost competitive with gasoline and

diesel;

(3) not more than 25 percent of the funds committed within

each reverse auction to any 1 project;

(4) not more than $100,000,000 in any 1 year; and

(5) not more than $1,000,000,000 over the lifetime of the

program.

(e) Priority.--In selecting a project under the program, the

Secretary shall give priority to projects that--

(1) demonstrate outstanding potential for local and regional

economic development;

(2) include agricultural producers or cooperatives of

agricultural producers as equity partners in the ventures; and

(3) have a strategic agreement in place to fairly reward

feedstock suppliers.

(f) Authorizations of Appropriations.--There is authorized to be

appropriated to carry out this section $250,000,000.

SEC. 943. PROCUREMENT OF BIOBASED PRODUCTS.

(a) Federal Procurement.--

(1) Definition of procuring agency.--Section 9001 of the

Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8101)

is amended--

(A) by redesignating paragraphs (4), (5), and (6) as

paragraphs (5), (6), and (7), respectively; and

(B) by inserting after paragraph (3) the following:

``(4) Procuring agency.--The term `procuring agency' means--

``(A) any Federal agency that is using Federal funds

for procurement; or

``(B) any person contracting with any Federal agency

with respect to work performed under the contract.''.

(2) Procurement.--Section 9002 of the Farm Security and

Rural Investment Act of 2002 (7 U.S.C. 8102) is amended--

(A) by striking ``Federal agency'' each place it

appears (other than in subsections (f) and (g)) and

inserting ``procuring agency'';

(B) in subsection (c)(2)--

(i) by striking ``(2)'' and all that follows

through ``Notwithstanding'' and inserting the

following:

[[Page 119 STAT. 881]]

``(2) Flexibility.--Notwithstanding'';

(ii) by striking ``an agency'' and inserting

``a procuring agency''; and

(iii) by striking ``the agency'' and inserting

``the procuring agency'';

(C) in subsection (d), by striking ``procured by

Federal agencies'' and inserting ``procured by procuring

agencies''; and

(D) in subsection (f), by striking ``Federal

agencies'' and inserting ``procuring agencies''.

(b) Capitol Complex Procurement.--Section 9002 of the Farm Security

and Rural Investment Act of 2002 (7 U.S.C. 8102) (as amended by

subsection (a)(2)) is amended--

(1) by redesignating subsection (j) as subsection (k); and

(2) by inserting after subsection (i) the following:

``(j) Inclusion.--Not <<NOTE: Deadline. Procedures.>> later than 90

days after the date of enactment of the Energy Policy Act of 2005, the

Architect of the Capitol, the Sergeant at Arms of the Senate, and the

Chief Administrative Officer of the House of Representatives shall

establish procedures that apply the requirements of this section to

procurement for the Capitol Complex.''.

(c) <<NOTE: 42 USC 16252.>> Education.--

(1) In general.--The Architect of the Capitol shall

establish in the Capitol Complex a program of public education

regarding use by the Architect of the Capitol of biobased

products.

(2) Purposes.--The purposes of the program shall be--

(A) to establish the Capitol Complex as a showcase

for the existence and benefits of biobased products; and

(B) to provide access to further information on

biobased products to occupants and visitors.

(d) Procedure.--Requirements <<NOTE: 7 USC 8102 note.>> issued under

the amendments made by subsection (b) shall be made in accordance with

directives issued by the Committee on Rules and Administration of the

Senate and the Committee on House Administration of the House of

Representatives.

SEC. 944. <<NOTE: 42 USC 16253.>> SMALL BUSINESS BIOPRODUCT MARKETING

AND CERTIFICATION GRANTS.

(a) In General.--Using amounts made available under subsection (g),

the Secretary of Agriculture (referred to in this section as the

``Secretary'') shall make available on a competitive basis grants to

eligible entities described in subsection (b) for the biobased product

marketing and certification purposes described in subsection (c).

(b) Eligible Entities.--

(1) In general.--An entity eligible for a grant under this

section is any manufacturer of biobased products that--

(A) proposes to use the grant for the biobased

product marketing and certification purposes described

in subsection (c); and

(B) has not previously received a grant under this

section.

(2) Preference.--In making grants under this section, the

Secretary shall provide a preference to an eligible entity that

has fewer than 50 employees.

[[Page 119 STAT. 882]]

(c) Biobased Product Marketing and Certification Grant Purposes.--A

grant made under this section shall be used--

(1) to provide working capital for marketing of biobased

products; and

(2) to provide for the certification of biobased products

to--

(A) qualify for the label described in section

9002(h)(1) of the Farm Security and Rural Investment Act

of 2002 (7 U.S.C. 8102(h)(1)); or

(B) meet other biobased standards determined

appropriate by the Secretary.

(d) Matching Funds.--

(1) In general.--Grant recipients shall provide matching

non-Federal funds equal to the amount of the grant received.

(2) Expenditure.--Matching funds shall be expended in

advance of grant funding, so that for every dollar of grant that

is advanced, an equal amount of matching funds shall have been

funded prior to submitting the request for reimbursement.

(e) Amount.--A grant made under this section shall not exceed

$100,000.

(f) Administration.--The Secretary shall establish such

administrative requirements for grants under this section, including

requirements for applications for the grants, as the Secretary considers

appropriate.

(g) Authorizations of Appropriations.--There are authorized to be

appropriated to make grants under this section--

(1) $1,000,000 for fiscal year 2006; and

(2) such sums as are necessary for each of fiscal years 2007

through 2015.

SEC. 945. <<NOTE: 42 USC 16254.>> REGIONAL BIOECONOMY DEVELOPMENT

GRANTS.

(a) In General.--Using amounts made available under subsection (g),

the Secretary of Agriculture (referred to in this section as the

``Secretary'') shall make available on a competitive basis grants to

eligible entities described in subsection (b) for the purposes described

in subsection (c).

(b) Eligible Entities.--An entity eligible for a grant under this

section is any regional bioeconomy development association, agricultural

or energy trade association, or Land Grant institution that--

(1) proposes to use the grant for the purposes described in

subsection (c); and

(2) has not previously received a grant under this section.

(c) Regional Bioeconomy Development Association Grant Purposes.--A

grant made under this section shall be used to support and promote the

growth and development of the bioeconomy within the region served by the

eligible entity, through coordination, education, outreach, and other

endeavors by the eligible entity.

(d) Matching Funds.--

(1) In general.--Grant recipients shall provide matching

non-Federal funds equal to the amount of the grant received.

(2) Expenditure.--Matching funds shall be expended in

advance of grant funding, so that for every dollar of grant that

is advanced, an equal amount of matching funds shall have been

funded prior to submitting the request for reimbursement.

[[Page 119 STAT. 883]]

(e) Administration.--The <<NOTE: Requirements.>> Secretary shall

establish such administrative requirements for grants under this

section, including requirements for applications for the grants, as the

Secretary considers appropriate.

(f) Amount.--A grant made under this section shall not exceed

$500,000.

(g) Authorizations of Appropriations.--There are authorized to be

appropriated to make grants under this section--

(1) $1,000,000 for fiscal year 2006; and

(2) such sums as are necessary for each of fiscal years 2007

through 2015.

SEC. 946. <<NOTE: 42 USC 16255.>> PREPROCESSING AND HARVESTING

DEMONSTRATION GRANTS.

(a) In General.--The Secretary of Agriculture (referred to in this

section as the ``Secretary'') shall make grants available on a

competitive basis to enterprises owned by agricultural producers, for

the purposes of demonstrating cost-effective, cellulosic biomass

innovations in--

(1) preprocessing of feedstocks, including cleaning,

separating and sorting, mixing or blending, and chemical or

biochemical treatments, to add value and lower the cost of

feedstock processing at a biorefinery; or

(2) 1-pass or other efficient, multiple crop harvesting

techniques.

(b) Limitations on Grants.--

(1) Number of grants.--Not more than 5 demonstration

projects per fiscal year shall be funded under this section.

(2) Non-federal cost share.--The non-Federal cost share of a

project under this section shall be not less than 20 percent, as

determined by the Secretary.

(c) Condition of Grant.--To be eligible for a grant for a project

under this section, a recipient of a grant or a participating entity

shall agree to use the material harvested under the project--

(1) to produce ethanol; or

(2) for another energy purpose, such as the generation of

heat or electricity.

(d) Authorization for Appropriations.--There is authorized to be

appropriated to carry out this section $5,000,000 for each of fiscal

years 2006 through 2010.

SEC. 947. <<NOTE: 42 USC 16256.>> EDUCATION AND OUTREACH.

(a) In General.--The Secretary of Agriculture shall establish,

within the Department of Agriculture or through an independent

contracting entity, a program of education and outreach on biobased

fuels and biobased products consisting of--

(1) training and technical assistance programs for feedstock

producers to promote producer ownership, investment, and

participation in the operation of processing facilities; and

(2) public education and outreach to familiarize consumers

with the biobased fuels and biobased products.

(b) Authorization of Appropriations.--There is authorized to be

appropriated to carry out this section $1,000,000 for each of fiscal

years 2006 through 2010.

SEC. 948. REPORTS.

(a) Biobased Product Potential.--Not later than 1 year after the

date of enactment of this Act, the Secretary of Agriculture

[[Page 119 STAT. 884]]

(referred to in this section as the ``Secretary'') shall submit to the

Committee on Agriculture of the House of Representatives and the

Committee on Agriculture, Nutrition, and Forestry of the Senate a report

that--

(1) describes the economic potential for the United States

of the widespread production and use of commercial and

industrial biobased products through calendar year 2025; and

(2) as the maximum extent practicable, identifies the

economic potential by product area.

(b) Analysis of Economic Indicators.--Not <<NOTE: Deadline.>> later

than 2 years after the date of enactment of this Act, the Secretary

shall submit to Congress an analysis of economic indicators of the

biobased economy.

Subtitle E--Nuclear Energy

SEC. 951. <<NOTE: 42 USC 16271.>> NUCLEAR ENERGY.

(a) In General.--The Secretary shall conduct programs of civilian

nuclear energy research, development, demonstration, and commercial

application, including activities described in this subtitle. Programs

under this subtitle shall take into consideration the following

objectives:

(1) Enhancing nuclear power's viability as part of the

United States energy portfolio.

(2) Providing the technical means to reduce the likelihood

of nuclear proliferation.

(3) Maintaining a cadre of nuclear scientists and engineers.

(4) Maintaining National Laboratory and university nuclear

programs, including their infrastructure.

(5) Supporting both individual researchers and

multidisciplinary teams of researchers to pioneer new approaches

in nuclear energy, science, and technology.

(6) Developing, planning, constructing, acquiring, and

operating special equipment and facilities for the use of

researchers.

(7) Supporting technology transfer and other appropriate

activities to assist the nuclear energy industry, and other

users of nuclear science and engineering, including activities

addressing reliability, availability, productivity, component

aging, safety, and security of nuclear power plants.

(8) Reducing the environmental impact of nuclear energy-

related activities.

(b) Authorization of Appropriations for Core Programs.--There are

authorized to be appropriated to the Secretary to carry out nuclear

energy research, development, demonstration, and commercial application

activities, including activities authorized under this subtitle, other

than those described in subsection (c)--

(1) $330,000,000 for fiscal year 2007;

(2) $355,000,000 for fiscal year 2008; and

(3) $495,000,000 for fiscal year 2009.

(c) Nuclear Infrastructure and Facilities.--There are authorized to

be appropriated to the Secretary to carry out activities under section

955--

(1) $135,000,000 for fiscal year 2007;

(2) $140,000,000 for fiscal year 2008; and

(3) $145,000,000 for fiscal year 2009.

[[Page 119 STAT. 885]]

(d) Allocations.--From amounts authorized under subsection (a), the

following sums are authorized:

(1) For activities under section 953--

(A) $150,000,000 for fiscal year 2007;

(B) $155,000,000 for fiscal year 2008; and

(C) $275,000,000 for fiscal year 2009.

(2) For activities under section 954--

(A) $43,600,000 for fiscal year 2007;

(B) $50,100,000 for fiscal year 2008; and

(C) $56,000,000 for fiscal year 2009.

(3) For activities under section 957, $6,000,000 for each of

fiscal years 2007 through 2009.

(e) Limitation.--None of the funds authorized under this section may

be used to decommission the Fast Flux Test Facility.

SEC. 952. <<NOTE: 42 USC 16272.>> NUCLEAR ENERGY RESEARCH PROGRAMS.

(a) Nuclear Energy Research Initiative.--The Secretary shall carry

out a Nuclear Energy Research Initiative for research and development

related to nuclear energy.

(b) Nuclear Energy Systems Support Program.--The Secretary shall

carry out a Nuclear Energy Systems Support 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.--

(1) In general.--The Secretary shall carry out a Nuclear

Power 2010 Program, consistent with recommendations of the

Nuclear Energy Research Advisory Committee of the Department in

the report entitled ``A Roadmap to Deploy New Nuclear Power

Plants in the United States by 2010'' and dated October 2001.

(2) Administration.--The Program shall include--

(A) use of the expertise and capabilities of

industry, institutions of higher education, and National

Laboratories in evaluation of advanced nuclear fuel

cycles and fuels testing;

(B) consideration of a variety of reactor designs

suitable for both developed and developing nations;

(C) participation of international collaborators in

research, development, and design efforts, as

appropriate; and

(D) encouragement for participation by institutions

of higher education and industry.

(d) Generation IV Nuclear Energy Systems Initiative.--

(1) In general.--The Secretary shall carry out a Generation

IV Nuclear Energy Systems Initiative to develop an overall

technology plan for and to support research and development

necessary to make an informed technical decision about the most

promising candidates for eventual commercial application.

(2) Administration.--In conducting the Initiative, the

Secretary shall examine advanced proliferation-resistant and

passively safe reactor designs, including designs that--

(A) are economically competitive with other electric

power generation plants;

(B) have higher efficiency, lower cost, and improved

safety compared to reactors in operation on the date of

enactment of this Act;

[[Page 119 STAT. 886]]

(C) use fuels that are proliferation resistant and

have substantially reduced production of high-level

waste per unit of output; and

(D) use improved instrumentation.

(e) Reactor Production of Hydrogen.--The Secretary shall carry out

research to examine designs for high-temperature reactors capable of

producing large-scale quantities of hydrogen.

SEC. 953. <<NOTE: 42 USC 16273.>> ADVANCED FUEL CYCLE INITIATIVE.

(a) In General.--The Secretary, acting through the Director of the

Office of Nuclear Energy, Science and Technology, shall conduct an

advanced fuel recycling technology research, development, and

demonstration program (referred to in this section as the ``program'')

to evaluate proliferation-resistant fuel recycling and transmutation

technologies that minimize environmental and 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.

(b) Annual Review.--The program shall be subject to annual review by

the Nuclear Energy Research Advisory Committee of the Department or

other independent entity, as appropriate.

(c) International Cooperation.--In carrying out the program, the

Secretary is encouraged to seek opportunities to enhance the progress of

the program through international cooperation.

(d) Reports.--The Secretary shall submit, as part of the annual

budget submission of the Department, a report on the activities of the

program.

SEC. 954. <<NOTE: 42 USC 16274.>> UNIVERSITY NUCLEAR SCIENCE AND

ENGINEERING SUPPORT.

(a) In General.--The Secretary shall conduct a program to invest in

human resources and infrastructure in the nuclear sciences and related

fields, including health physics, nuclear engineering, and

radiochemistry, consistent with missions of the Department related to

civilian nuclear research, development, demonstration, and commercial

application.

(b) Requirements.--In carrying out the program under this section,

the Secretary shall--

(1) conduct a graduate and undergraduate fellowship program

to attract new and talented students, which may include

fellowships for students to spend time at National Laboratories

in the areas of nuclear science, engineering, and health physics

with a member of the National Laboratory staff acting as a

mentor;

(2) conduct a junior faculty research initiation grant

program to assist universities in recruiting and retaining new

faculty in the nuclear sciences and engineering by awarding

grants to junior faculty for research on issues related to

nuclear energy engineering and science;

(3) support fundamental nuclear sciences, engineering, and

health physics research through a nuclear engineering education

and research program;

(4) encourage collaborative nuclear research among industry,

National Laboratories, and universities; and

(5) support communication and outreach related to nuclear

science, engineering, and health physics.

[[Page 119 STAT. 887]]

(c) University-National Laboratory Interactions.--The Secretary

shall conduct--

(1) a fellowship program for professors at universities to

spend sabbaticals at National Laboratories in the areas of

nuclear science and technology; and

(2) a visiting scientist program in which National

Laboratory staff can spend time in academic nuclear science and

engineering departments.

(d) Strengthening University Research and Training Reactors and

Associated Infrastructure.--In carrying out the program under this

section, the Secretary may support--

(1) converting research reactors from high-enrichment fuels

to low-enrichment fuels and upgrading operational

instrumentation;

(2) consortia of universities to broaden access to

university research reactors;

(3) student training programs, in collaboration with the

United States nuclear industry, in relicensing and upgrading

reactors, including through the provision of technical

assistance; and

(4) reactor improvements as part of a taking into

consideration effort that emphasizes research, training, and

education, including through the Innovations in Nuclear

Infrastructure and Education Program or any similar program.

(e) Operations and Maintenance.--Funding for a project provided

under this section may be used for a portion of the operating and

maintenance costs of a research reactor at a university used in the

project.

(f) Definition.--In this section, the term ``junior faculty'' means

a faculty member who was awarded a doctorate less than 10 years before

receipt of an award from the grant program described in subsection

(b)(2).

SEC. 955. <<NOTE: 42 USC 16275.>> DEPARTMENT OF ENERGY CIVILIAN NUCLEAR

INFRASTRUCTURE AND FACILITIES.

(a) In General.--The Secretary shall operate and maintain

infrastructure and facilities to support the nuclear energy research,

development, demonstration, and commercial application programs,

including radiological facilities management, isotope production, and

facilities management.

(b) Duties.--In carrying out this section, the Secretary shall--

(1) develop an inventory of nuclear science and engineering

facilities, equipment, expertise, and other assets at all of the

National Laboratories;

(2) develop a prioritized list of nuclear science and

engineering plant and equipment improvements needed at each of

the National Laboratories;

(3) consider the available facilities and expertise at all

National Laboratories and emphasize investments which complement

rather than duplicate capabilities; and

(4) develop a timeline and a proposed budget for the

completion of deferred maintenance on plant and equipment, with

the goal of ensuring that Department programs under this

subtitle will be generally recognized to be among the best in

the world.

(c) Plan.--The Secretary shall develop a comprehensive plan for the

facilities at the Idaho National Laboratory, especially taking

[[Page 119 STAT. 888]]

into account the resources available at other National Laboratories. In

developing the plan, the Secretary shall--

(1) evaluate the facilities planning processes utilized by

other physical science and engineering research and development

institutions, both in the United States and abroad, that are

generally recognized as being among the best in the world, and

consider how those processes might be adapted toward developing

such facilities plan;

(2) avoid duplicating, moving, or transferring nuclear

science and engineering facilities, equipment, expertise, and

other assets that currently exist at other National

Laboratories;

(3) consider the establishment of a national transuranic

analytic chemistry laboratory as a user facility at the Idaho

National Laboratory;

(4) include a plan to develop, if feasible, the Advanced

Test Reactor and Test Reactor Area into a user facility that is

more readily accessible to academic and industrial researchers;

(5) consider the establishment of a fast neutron source as a

user facility;

(6) consider the establishment of new hot cells and the

configuration of hot cells most likely to advance research,

development, demonstration, and commercial application in

nuclear science and engineering, especially in the context of

the condition and availability of these facilities elsewhere in

the National Laboratories; and

(7) include a timeline and a proposed budget for the

completion of deferred maintenance on plant and equipment.

(d) Transmittal to Congress.--Not <<NOTE: Deadline.>> later than 1

year after the date of enactment of this Act, the Secretary shall

transmit the plan under subsection (c) to Congress.

SEC. 956. <<NOTE: 42 USC 16276.>> SECURITY OF NUCLEAR FACILITIES.

The Secretary, acting 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--

(1) the safety of nuclear facilities from natural phenomena;

and

(2) the security of nuclear facilities from deliberate

attacks.

SEC. 957. <<NOTE: 42 USC 16277.>> ALTERNATIVES TO INDUSTRIAL RADIOACTIVE

SOURCES.

(a) Survey.--

(1) In general.--Not <<NOTE: Deadline.>> later than August

1, 2006, the Secretary shall submit to Congress the results of a

survey of industrial applications of large radioactive sources.

(2) Administration.--The survey shall--

(A) consider well-logging sources as one class of

industrial sources;

(B) include information on current domestic and

international Department, Department of Defense, State

Department, and commercial programs to manage and

dispose of radioactive sources; and

(C) analyze available disposal options for currently

deployed or future sources and, if deficiencies are

noted for either deployed or future sources, recommend

legislative options that Congress may consider to remedy

identified deficiencies.

[[Page 119 STAT. 889]]

(b) Plan.--

(1) In general.--In conjunction with the survey conducted

under subsection (a), the Secretary shall establish a research

and development program to develop alternatives to sources

described in subsection (a) that reduce safety, environmental,

or proliferation risks to either workers using the sources or

the public.

(2) Accelerators.--Miniaturized particle accelerators for

well-logging or other industrial applications and portable

accelerators for production of short-lived radioactive materials

at an industrial site shall be considered as part of the

research and development efforts.

(3) Report.--Not later than August 1, 2006, the Secretary

shall submit to Congress a report describing the details of the

program plan.

Subtitle F--Fossil Energy

SEC. 961. <<NOTE: 42 USC 16291.>> FOSSIL ENERGY.

(a) In General.--The Secretary shall carry out research,

development, demonstration, and commercial application programs in

fossil energy, including activities under this subtitle, with the goal

of improving the efficiency, effectiveness, and environmental

performance of fossil energy production, upgrading, conversion, and

consumption. Such programs take into consideration the following

objectives:

(1) Increasing the energy conversion efficiency of all forms

of fossil energy through improved technologies.

(2) Decreasing the cost of all fossil energy production,

generation, and delivery.

(3) Promoting diversity of energy supply.

(4) Decreasing the dependence of the United States on

foreign energy supplies.

(5) Improving United States energy security.

(6) Decreasing the environmental impact of energy-related

activities.

(7) Increasing the export of fossil energy-related

equipment, technology, and services from the United States.

(b) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary to carry out fossil energy research,

development, demonstration, and commercial application activities,

including activities authorized under this subtitle--

(1) $611,000,000 for fiscal year 2007;

(2) $626,000,000 for fiscal year 2008; and

(3) $641,000,000 for fiscal year 2009.

(c) Allocations.--From amounts authorized under subsection (a), the

following sums are authorized:

(1) For activities under section 962--

(A) $367,000,000 for fiscal year 2007;

(B) $376,000,000 for fiscal year 2008; and

(C) $394,000,000 for fiscal year 2009.

(2) For activities under section 964--

(A) $20,000,000 for fiscal year 2007;

(B) $25,000,000 for fiscal year 2008; and

(C) $30,000,000 for fiscal year 2009.

(3) For activities under section 966--

[[Page 119 STAT. 890]]

(A) $1,500,000 for fiscal year 2007; and

(B) $450,000 for each of fiscal years 2008 and 2009.

(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 2007 through 2009.

(d) Extended Authorization.--There are authorized to be appropriated

to the Secretary for the Office of Arctic Energy established 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 2010 through 2012.

(e) Limitations.--

(1) Uses.--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 (c)(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. 962. <<NOTE: 42 USC 16292.>> 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 (including mercury

removal);

(2) gasification systems;

(3) advanced combustion systems;

(4) turbines for synthesis gas derived from coal;

(5) carbon capture and sequestration research and

development;

(6) coal-derived chemicals and transportation fuels;

(7) liquid fuels derived from low rank coal water slurry;

(8) solid fuels and feedstocks;

(9) advanced coal-related research;

(10) advanced separation technologies; and

(11) fuel cells for the operation of synthesis gas derived

from coal.

(b) Cost and Performance Goals.--

(1) In general.--In carrying out programs authorized by this

section, during each of calendar years 2008, 2010, 2012, and

2016, and during each fiscal year beginning after September 30,

2021, the Secretary shall identify cost and performance goals

for coal-based technologies that would permit the continued

cost-competitive use of coal for the production of electricity,

chemical feedstocks, and transportation fuels.

(2) Administration.--In establishing the cost and

performance goals, the Secretary shall--

(A) consider activities and studies undertaken as of

the date of enactment of this Act by industry in

cooperation with the Department in support of the

identification of the goals;

(B) consult with interested entities, including--

(i) coal producers;

[[Page 119 STAT. 891]]

(ii) industries using coal;

(iii) organizations that promote coal and

advanced coal technologies;

(iv) environmental organizations;

(v) organizations representing workers; and

(vi) organizations representing consumers;

(C) <<NOTE: Deadline. Federal

Register, publication.>> 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

(D) <<NOTE: Deadline. Reports.>> not later than 180

days after the date of enactment of this Act and every 4

years thereafter, submit to Congress a report describing

the final cost and performance goals for the

technologies that includes--

(i) a list of technical milestones; and

(ii) an explanation of how programs authorized

in this section will not duplicate the activities

authorized under the Clean Coal Power Initiative

authorized under title IV.

(c) Powder River Basin and Fort Union Lignite Coal Mercury

Removal.--

(1) In general.--In addition to the programs authorized by

subsection (a), the Secretary shall establish a program to test

and develop technologies to control and remove mercury emissions

from subbituminous coal mined in the Powder River Basin, and

Fort Union lignite coals, that are used for the generation of

electricity.

(2) Efficacy of mercury removal technology.--In carrying out

the program under paragraph (1), the Secretary shall examine the

efficacy of mercury removal technologies on coals described in

that paragraph that are blended with other types of coal.

(d) 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) Demonstrations.--The demonstrations referred to in

paragraph (1) shall include solid oxide fuel cell technology for

commercial, residential, and transportation applications, and

distributed generation systems, using improved manufacturing

production and processes.

SEC. 963. <<NOTE: 42 USC 16293.>> CARBON CAPTURE RESEARCH AND

DEVELOPMENT PROGRAM.

(a) In General.--The Secretary shall carry out a 10-year carbon

capture research and development program to develop carbon dioxide

capture technologies on combustion-based systems for use--

(1) in new coal utilization facilities; and

(2) on the fleet of coal-based units in existence on the

date of enactment of this Act.

(b) Objectives.--The objectives of the program under subsection (a)

shall be--

(1) to develop carbon dioxide capture technologies,

including adsorption and absorption techniques and chemical

processes, to remove the carbon dioxide from gas streams

containing carbon dioxide potentially amenable to sequestration;

[[Page 119 STAT. 892]]

(2) to develop technologies that would directly produce

concentrated streams of carbon dioxide potentially amenable to

sequestration;

(3) to increase the efficiency of the overall system to

reduce the quantity of carbon dioxide emissions released from

the system per megawatt generated; and

(4) in accordance with the carbon dioxide capture program,

to promote a robust carbon sequestration program and continue

the work of the Department, in conjunction with the private

sector, through regional carbon sequestration partnerships.

(c) Authorization of Appropriations.--From amounts authorized under

section 961(b), the following sums are authorized for activities

described in subsection (a)(2):

(1) $25,000,000 for fiscal year 2006;

(2) $30,000,000 for fiscal year 2007; and

(3) $35,000,000 for fiscal year 2008.

SEC. 964. <<NOTE: 42 USC 16294.>> RESEARCH AND DEVELOPMENT FOR COAL

MINING TECHNOLOGIES.

(a) Establishment.--The Secretary shall carry out a program for

research and development on coal mining technologies.

(b) Cooperation.--In carrying out the program, 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.

(c) 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 coal bed electromagnetic wave

imaging, spectroscopic reservoir analysis technology, and

techniques for horizontal drilling in order to--

(A) identify areas of high coal gas content;

(B) increase methane recovery efficiency;

(C) prevent spoilage of domestic coal reserves; and

(D) minimize water disposal associated with methane

extraction; and

(4) expand mining research capabilities at institutions of

higher education.

SEC. 965. <<NOTE: 42 USC 16295.>> OIL AND GAS RESEARCH PROGRAMS.

(a) In General.--The Secretary shall conduct a program of research,

development, demonstration, and commercial application of 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, oil shale, and tar sands; and

(7) related environmental research.

[[Page 119 STAT. 893]]

(b) Objectives.--The objectives of this program shall include

advancing the science and technology available to domestic petroleum

producers, particularly independent operators, to minimize the economic

dislocation caused by the decline of domestic supplies of oil and

natural gas resources.

(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 submit to Congress a report on the latest

estimates of natural gas and oil reserves, reserves growth, and

undiscovered resources in Federal and State waters off the coast of

Louisiana, Texas, Alabama, and Mississippi.

(d) Integrated Clean Power and Energy Research.--

(1) Establishment of center.--The Secretary shall establish

a national center or consortium of excellence in clean energy

and power generation, using the resources of the Clean Power and

Energy Research Consortium in existence on the date of enactment

of this Act, to address the critical dependence of the United

States on energy and the need to reduce emissions.

(2) Focus areas.--The center or consortium shall conduct a

program of research, development, demonstration, and commercial

application on integrating the following 6 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 using alternative fuels and

renewable energy.

(E) Development of advanced materials technology for

oil and gas exploration and use in harsh environments.

(F) Education on energy and power generation issues.

SEC. 966. <<NOTE: 42 USC 16296.>> LOW-VOLUME OIL AND GAS RESERVOIR

RESEARCH PROGRAM.

(a) Definition of GIS.--In this section, the term ``GIS'' means

geographic information systems technology that facilitates the

organization and management of data with a geographic component.

(b) Program.--The Secretary shall establish a program of research,

development, demonstration, and commercial application to maximize the

productive capacity of marginal wells and reservoirs.

(c) Data Collection.--Under the program, the Secretary shall collect

data on--

(1) the status and location of marginal wells and oil and

gas reservoirs;

(2) the production capacity of marginal wells and oil and

gas reservoirs;

(3) the location of low-pressure gathering facilities and

pipelines; and

(4) the quantity of natural gas vented or flared in

association with crude oil production.

(d) Analysis.--Under the program, the Secretary shall--

(1) estimate the remaining producible reserves based on

variable pipeline pressures; and

[[Page 119 STAT. 894]]

(2) recommend measures that will enable the continued

production of those resources.

(e) Study.--

(1) In general.--The Secretary may award a grant to an

organization of States that contain significant numbers of

marginal oil and natural gas wells to conduct an annual study of

low-volume natural gas reservoirs.

(2) Organization with no gis capabilities.--If an

organization receiving a grant under paragraph (1) does not have

GIS capabilities, the organization shall contract with an

institution of higher education with GIS capabilities.

(3) State geologists.--The organization receiving a grant

under paragraph (1) shall collaborate with the State geologist

of each State being studied.

(f) Public Information.--The Secretary may use the data collected

and analyzed under this section to produce maps and literature to

disseminate to States to promote conservation of natural gas reserves.

SEC. 967. COMPLEX <<NOTE: Establishment. 42 USC 16297.>> 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. 968. METHANE <<NOTE: 30 USC 1902 note.>> HYDRATE RESEARCH.

(a) In General.--The Methane Hydrate Research and Development Act of

2000 (30 U.S.C. 1902 note; Public Law 106-193) is amended to read as

follows:

``SECTION 1. SHORT TITLE.

``This Act may be cited as the `Methane Hydrate Research and

Development Act of 2000'.

``SEC. 2. FINDINGS.

``Congress finds that--

``(1) in order to promote energy independence and meet the

increasing demand for energy, the United States will require a

diversified portfolio of substantially increased quantities of

electricity, natural gas, and transportation fuels;

``(2) according to the report submitted to Congress by the

National Research Council entitled `Charting the Future of

Methane Hydrate Research in the United States', the total United

States resources of gas hydrates have been estimated to be on

the order of 200,000 trillion cubic feet;

``(3) according to the report of the National Commission on

Energy Policy entitled `Ending the Energy Stalemate--A

Bipartisan Strategy to Meet America's Energy Challenge', and

dated December 2004, the United States may be endowed with over

one-fourth of the methane hydrate deposits in the world;

``(4) according to the Energy Information Administration, a

shortfall in natural gas supply from conventional and

unconventional sources is expected to occur in or about 2020;

and

``(5) the National Academy of Sciences states that methane

hydrate may have the potential to alleviate the projected

shortfall in the natural gas supply.

[[Page 119 STAT. 895]]

``SEC. 3. DEFINITIONS.

``In this Act:

``(1) Contract.--The term `contract' means a procurement

contract within the meaning of section 6303 of title 31, United

States Code.

``(2) Cooperative agreement.--The term `cooperative

agreement' means a cooperative agreement within the meaning of

section 6305 of title 31, United States Code.

``(3) Director.--The term `Director' means the Director of

the National Science Foundation.

``(4) Grant.--The term `grant' means a grant awarded under a

grant agreement (within the meaning of section 6304 of title 31,

United States Code).

``(5) Industrial enterprise.--The term `industrial

enterprise' means a private, nongovernmental enterprise that has

an expertise or capability that relates to methane hydrate

research and development.

``(6) Institution of higher education.--The term

`institution of higher education' means an institution of higher

education (as defined in section 102 of the Higher Education Act

of 1965 (20 U.S.C. 1002)).

``(7) Secretary.--The term `Secretary' means the Secretary

of Energy, acting through the Assistant Secretary for Fossil

Energy.

``(8) Secretary of commerce.--The term `Secretary of

Commerce' means the Secretary of Commerce, acting through the

Administrator of the National Oceanic and Atmospheric

Administration.

``(9) Secretary of defense.--The term `Secretary of Defense'

means the Secretary of Defense, acting through the Secretary of

the Navy.

``(10) Secretary of the interior.--The term `Secretary of

the Interior' means the Secretary of the Interior, acting

through the Director of the United States Geological Survey, the

Director of the Bureau of Land Management, and the Director of

the Minerals Management Service.

``SEC. 4. METHANE HYDRATE RESEARCH AND DEVELOPMENT PROGRAM.

``(a) In General.--

``(1) Commencement <<NOTE: Deadline.>>  of program.--Not

later than 90 days after the date of enactment of the Energy

Research, Development, Demonstration, and Commercial Application

Act of 2005, the Secretary, in consultation with the Secretary

of Commerce, the Secretary of Defense, the Secretary of the

Interior, and the Director, shall commence a program of methane

hydrate research and development in accordance with this

section.

``(2) Designations.--The Secretary, the Secretary of

Commerce, the Secretary of Defense, the Secretary of the

Interior, and the Director shall designate individuals to carry

out this section.

``(3) Coordination.--The individual designated by the

Secretary shall coordinate all activities within the Department

of Energy relating to methane hydrate research and development.

``(4) Meetings.--The <<NOTE: Deadlines.>> individuals

designated under paragraph (2) shall meet not later than 180

days after the date

[[Page 119 STAT. 896]]

of enactment of the Energy Research, Development, Demonstration,

and Commercial Application Act of 2005 and not less frequently

than every 180 days thereafter to--

``(A) review the progress of the program under

paragraph (1); and

``(B) coordinate interagency research and

partnership efforts in carrying out the program.

``(b) Grants, Contracts, Cooperative Agreements, Interagency Funds

Transfer Agreements, and Field Work Proposals.--

``(1) Assistance and coordination.--In carrying out the

program of methane hydrate research and development authorized

by this section, the Secretary may award grants to, or enter

into contracts or cooperative agreements with, institutions of

higher education, oceanographic institutions, and industrial

enterprises to--

``(A) conduct basic and applied research to

identify, explore, assess, and develop methane hydrate

as a commercially viable source of energy;

``(B) identify methane hydrate resources through

remote sensing;

``(C) acquire and reprocess seismic data suitable

for characterizing methane hydrate accumulations;

``(D) assist in developing technologies required for

efficient and environmentally sound development of

methane hydrate resources;

``(E) promote education and training in methane

hydrate resource research and resource development

through fellowships or other means for graduate

education and training;

``(F) conduct basic and applied research to assess

and mitigate the environmental impact of hydrate

degassing (including both natural degassing and

degassing associated with commercial development);

``(G) develop technologies to reduce the risks of

drilling through methane hydrates; and

``(H) conduct exploratory drilling, well testing,

and production testing operations on permafrost and non-

permafrost gas hydrates in support of the activities

authorized by this paragraph, including drilling of one

or more full-scale production test wells.

``(2) Competitive peer review.--Funds made available under

paragraph (1) shall be made available based on a competitive

process using external scientific peer review of proposed

research.

``(c) Methane Hydrates Advisory Panel.--

``(1) In general.--The <<NOTE: Establishment.>> Secretary

shall establish an advisory panel (including the hiring of

appropriate staff) consisting of representatives of industrial

enterprises, institutions of higher education, oceanographic

institutions, State agencies, and environmental organizations

with knowledge and expertise in the natural gas hydrates field,

to--

``(A) assist in developing recommendations and broad

programmatic priorities for the methane hydrate research

and development program carried out under subsection

(a)(1);

[[Page 119 STAT. 897]]

``(B) provide scientific oversight for the methane

hydrates program, including assessing progress toward

program goals, evaluating program balance, and providing

recommendations to enhance the quality of the program

over time; and

``(C) not <<NOTE: Deadline.>> later than 2 years

after the date of enactment of the Energy Research,

Development, Demonstration, and Commercial Application

Act of 2005, and at such later dates as the panel

considers advisable, submit to Congress--

``(i) an assessment of the methane hydrate

research program; and

``(ii) an assessment of the 5-year research

plan of the Department of Energy.

``(2) Conflicts of interest.--In appointing each member of

the advisory panel established under paragraph (1), the

Secretary shall ensure, to the maximum extent practicable, that

the appointment of the member does not pose a conflict of

interest with respect to the duties of the member under this

Act.

``(3) Meetings.--The advisory panel shall--

``(A) <<NOTE: Deadline.>> hold the initial meeting

of the advisory panel not later than 180 days after the

date of establishment of the advisory panel; and

``(B) meet biennially thereafter.

``(4) Coordination.--The advisory panel shall coordinate

activities of the advisory panel with program managers of the

Department of Energy at appropriate National Laboratories.

``(d) Construction Costs.--None of the funds made available to carry

out this section may be used for the construction of a new building or

the acquisition, expansion, remodeling, or alteration of an existing

building (including site grading and improvement and architect fees).

``(e) Responsibilities of the Secretary.--In carrying out subsection

(b)(1), the Secretary shall--

``(1) facilitate and develop partnerships among government,

industrial enterprises, and institutions of higher education to

research, identify, assess, and explore methane hydrate

resources;

``(2) undertake programs to develop basic information

necessary for promoting long-term interest in methane hydrate

resources as an energy source;

``(3) ensure that the data and information developed through

the program are accessible and widely disseminated as needed and

appropriate;

``(4) promote cooperation among agencies that are developing

technologies that may hold promise for methane hydrate resource

development;

``(5) <<NOTE: Reports.>> report annually to Congress on the

results of actions taken to carry out this Act; and

``(6) ensure, to the maximum extent practicable, greater

participation by the Department of Energy in international

cooperative efforts.

[[Page 119 STAT. 898]]

``SEC. 5. NATIONAL RESEARCH COUNCIL STUDY.

``(a) Agreement for Study.--The Secretary shall offer to enter into

an agreement with the National Research Council under which the National

Research Council shall--

``(1) conduct a study of the progress made under the methane

hydrate research and development program implemented under this

Act; and

``(2) make recommendations for future methane hydrate

research and development needs.

``(b) Report.--Not later than September 30, 2009, the Secretary

shall submit to Congress a report containing the findings and

recommendations of the National Research Council under this section.

``SEC. 6. REPORTS AND STUDIES FOR CONGRESS.

``The Secretary shall provide to the Committee on Science of the

House of Representatives and the Committee on Energy and Natural

Resources of the Senate copies of any report or study that the

Department of Energy prepares at the direction of any committee of

Congress relating to the methane hydrate research and development

program implemented under this Act.

``SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated to the Secretary to carry

out this Act, to remain available until expended--

``(1) $15,000,000 for fiscal year 2006;

``(2) $20,000,000 for fiscal year 2007;

``(3) $30,000,000 for fiscal year 2008;

``(4) $40,000,000 for fiscal year 2009; and

``(5) $50,000,000 for fiscal year 2010.''.

(b) Reclassification.-- <<NOTE: 30 USC 2001 note.>> The Law Revision

Counsel shall reclassify the Methane Hydrate Research and Development

Act of 2000 (30 U.S.C. 1902 note; Public Law 106-193) to a new chapter

at the end of title 30, United States Code.

Subtitle G--Science

SEC. 971. <<NOTE: 42 USC 16311.>> SCIENCE.

(a) In General.--The Secretary shall conduct, through the Office of

Science, programs of research, development, demonstration, and

commercial application in high energy physics, nuclear physics,

biological and environmental research, basic energy sciences, advanced

scientific computing research, and fusion energy sciences, including

activities described in this subtitle. The programs shall include

support for facilities and infrastructure, education, outreach,

information, analysis, and coordination activities.

(b) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary to carry out 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 976(b) and

including basic energy sciences, advanced scientific and computing

research, biological and environmental research, fusion energy sciences,

high energy physics, nuclear physics, research analysis, and

infrastructure support)--

(1) $4,153,000,000 for fiscal year 2007;

(2) $4,586,000,000 for fiscal year 2008; and

[[Page 119 STAT. 899]]

(3) $5,200,000,000 for fiscal year 2009.

(c) Allocations.--From amounts authorized under subsection (b), the

following sums are authorized:

(1) For activities under the Fusion Energy Sciences program

(including activities under section 972)--

(A) $355,500,000 for fiscal year 2007;

(B) $369,500,000 for fiscal year 2008;

(C) $384,800,000 for fiscal year 2009; and

(D) in addition to the amounts authorized under

subparagraphs (A), (B), and (C), such sums as may be

necessary for ITER construction, consistent with the

limitations of section 972(c)(5).

(2) For activities under the catalysis research program

under section 973--

(A) $36,500,000 for fiscal year 2007;

(B) $38,200,000 for fiscal year 2008; and

(C) such sums as may be necessary for fiscal year

2009.

(3) For activities under the Systems Biology Program under

section 977 such sums as may be necessary for each of fiscal

years 2007 through 2009.

(4) For activities under the Energy and Water Supplies

program under section 979, $30,000,000 for each of fiscal years

2007 through 2009.

(5) For the energy research fellowships programs under

section 984, $40,000,000 for each of fiscal years 2007 through

2009.

(6) For the advanced scientific computing activities under

section 976--

(A) $270,000,000 for fiscal year 2007;

(B) $350,000,000 for fiscal year 2008; and

(C) $375,000,000 for fiscal year 2009.

(7) For the science and engineering education pilot program

under section 983--

(A) $4,000,000 for each of fiscal years 2007 and

2008; and

(B) $8,000,000 for fiscal year 2009.

(d) Integrated Bioenergy Research and Development.--In addition to

amounts otherwise authorized by this section, there are authorized to be

appropriated to the Secretary for integrated bioenergy research and

development programs, projects, and activities, $49,000,000 for each of

the fiscal years 2005 through 2009. Activities funded under this

subsection shall be coordinated with ongoing related programs of other

Federal agencies, including the Plant Genome Program of the National

Science Foundation. Of the funds authorized under this subsection, at

least $5,000,000 for each fiscal year shall be for training and

education targeted to minority and socially disadvantaged farmers and

ranchers.

SEC. 972. FUSION <<NOTE: 42 USC 16312.>> ENERGY SCIENCES PROGRAM.

(a) Declaration of Policy.--It shall be the policy of the United

States to conduct research, development, demonstration, and commercial

applications to provide for the scientific, engineering, and commercial

infrastructure necessary to ensure that the United States is competitive

with other countries in providing fusion energy for its own needs and

the needs of other countries, including by demonstrating electric power

or hydrogen

[[Page 119 STAT. 900]]

production for the United States energy grid using fusion energy at the

earliest date.

(b) Planning.--

(1) In <<NOTE: Deadline.>> general.--Not later than 180 days

after the date of enactment of this Act, the Secretary shall

submit to Congress a plan (with proposed cost estimates,

budgets, and lists of potential international partners) for the

implementation of the policy described in subsection (a) in a

manner that ensures that--

(A) existing fusion research facilities are more

fully used;

(B) fusion science, technology, theory, advanced

computation, modeling, and simulation are strengthened;

(C) new magnetic and inertial fusion research and

development facilities are selected based on scientific

innovation and cost effectiveness, and the potential of

the facilities to advance the goal of practical fusion

energy at the earliest date practicable;

(D) facilities that are selected are funded at a

cost-effective rate;

(E) communication of scientific results and methods

between the fusion energy science community and the

broader scientific and technology communities is

improved;

(F) inertial confinement fusion facilities are used

to the extent practicable for the purpose of inertial

fusion energy research and development;

(G) attractive alternative inertial and magnetic

fusion energy approaches are more fully explored; and

(H) to the extent practicable, the recommendations

of the Fusion Energy Sciences Advisory Committee in the

report on workforce planning, dated March 2004, are

carried out, including periodic reassessment of program

needs.

(2) Costs and schedules.--The plan shall also address the

status of and, to the extent practicable, costs and schedules

for--

(A) 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.

(c) United States Participation in ITER.--

(1) Definitions.--In this subsection:

(A) Construction.--

(i) In general.--The term ``construction''

means--

(I) the physical construction of the

ITER facility; and

(II) the physical construction,

purchase, or manufacture of equipment or

components that are specifically

designed for the ITER facility.

(ii) Exclusions.--The term ``construction''

does not include the design of the facility,

equipment, or components.

(B) ITER.--The term ``ITER'' means the international

burning plasma fusion research project in which the

President announced United States participation on

January 30, 2003, or any similar international project.

[[Page 119 STAT. 901]]

(2) Participation.--The United States may participate in the

ITER only in accordance with this subsection.

(3) Agreement.--

(A) In general.--The Secretary may negotiate an

agreement for United States participation in the ITER.

(B) Contents.--Any agreement for United States

participation in the ITER shall, at a minimum--

(i) clearly define the United States financial

contribution to construction and operating costs,

as well as any other costs associated with a

project;

(ii) ensure that the share of high-technology

components of the ITER manufactured in the United

States is at least proportionate to the United

States financial contribution to the ITER;

(iii) ensure that the United States will not

be financially responsible for cost overruns in

components manufactured in other ITER

participating countries;

(iv) guarantee the United States full access

to all data generated by the ITER;

(v) enable United States researchers to

propose and carry out an equitable share of the

experiments at the ITER;

(vi) provide the United States with a role in

all collective decisionmaking related to the ITER;

and

(vii) describe the process for discontinuing

or decommissioning the ITER and any United States

role in that process.

(4) Plan.--

(A) Development.--The Secretary, in consultation

with the Fusion Energy Sciences Advisory Committee,

shall develop a plan for the participation of United

States scientists in the ITER that shall include--

(i) the United States research agenda for the

ITER;

(ii) methods to evaluate whether the ITER is

promoting progress toward making fusion a reliable

and affordable source of power; and

(iii) a description of how work at the ITER

will relate to other elements of the United States

fusion program.

(B) Review.--The Secretary shall request a review of

the plan by the National Academy of Sciences.

(5) Limitation.-- <<NOTE: Reports. Deadlines.>> No Federal

funds shall be expended for the construction of the ITER until

the Secretary has submitted to Congress--

(A) the agreement negotiated in accordance with

paragraph (3) and 120 days have elapsed since that

submission;

(B) a report describing the management structure of

the ITER and providing a fixed dollar estimate of the

cost of United States participation in the construction

of the ITER, and 120 days have elapsed since that

submission;

(C) a report describing how United States

participation in the 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 submission; and

[[Page 119 STAT. 902]]

(D) the plan required by paragraph (4) (but not the

National Academy of Sciences review of that plan), and

60 days have elapsed since that submission.

(6) Alternative to iter.--

(A) In general.--If at any time during the

negotiations on the ITER, the Secretary determines that

construction and operation of the ITER is unlikely or

infeasible, the Secretary shall submit to Congress,

along with the budget request of the President submitted

to Congress for the following fiscal year, a plan for

implementing a domestic burning plasma experiment such

as the Fusion Ignition Research Experiment, including

costs and schedules for the plan.

(B) Administration.--The Secretary shall--

(i) refine the plan in full consultation with

the Fusion Energy Sciences Advisory Committee; and

(ii) transmit the plan to the National Academy

of Sciences for review.

SEC. 973. <<NOTE: 42 USC 16313.>> CATALYSIS RESEARCH PROGRAM.

(a) Establishment.--The Secretary, acting through the Office of

Science, shall support a program of research and development in

catalysis science consistent with the statutory authorities of the

Department related to research and development.

(b) Components.--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.

(c) Duties of the Office of Science.--In carrying out the program,

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.

(d) Assessment.--Not <<NOTE: Deadline.>> later than 3 years after

the date of enactment of this Act, the Secretary shall enter into an

arrangement with the National Academy of Sciences to--

(1) review the catalysis program to measure--

(A) gains made in the fundamental science of

catalysis; and

(B) progress towards developing new fuels for energy

production and material fabrication processes; and

[[Page 119 STAT. 903]]

(2) submit <<NOTE: Reports.>> to Congress a report

describing the results of the review.

SEC. 974. <<NOTE: 42 USC 16314.>> HYDROGEN.

(a) In General.--The Secretary shall conduct a program of

fundamental research and development in support of programs authorized

under title VIII.

(b) Methods.--The program shall include support for methods of

generating hydrogen without the use of natural gas.

SEC. 975. <<NOTE: 42 USC 16315.>> SOLID STATE LIGHTING.

The Secretary shall conduct a program of fundamental research on

solid state lighting in support of the Next Generation Lighting

Initiative carried out under section 912.

SEC. 976. <<NOTE: 42 USC 16316.>> ADVANCED SCIENTIFIC COMPUTING FOR

ENERGY MISSIONS.

(a) Program.--

(1) In general.--The Secretary shall conduct an advanced

scientific computing research and development program that

includes activities related to applied mathematics and

activities authorized by the Department of Energy High-End

Computing Revitalization Act of 2004 (15 U.S.C. 5541 et seq.).

(2) Goal.--The Secretary shall carry out the program with

the goal of supporting departmental missions, and providing the

high-performance computational, networking, advanced

visualization technologies, and workforce resources, that are

required for world leadership in science.

(b) High-Performance Computing.--Section 203 of the High-Performance

Computing Act of 1991 (15 U.S.C. 5523) is amended to read as follows:

``SEC. 203. DEPARTMENT OF ENERGY ACTIVITIES.

``(a) General Responsibilities.--As part of the Program described in

title I, the Secretary of Energy shall--

``(1) conduct and support basic and applied research in

high-performance computing and networking to support fundamental

research in science and engineering disciplines related to

energy applications; and

``(2) provide computing and networking infrastructure

support, including--

``(A) the provision of high-performance computing

systems that are among the most advanced in the world in

terms of performance in solving scientific and

engineering problems; and

``(B) support for advanced software and applications

development for science and engineering disciplines

related to energy applications.

``(b) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary of Energy such sums as are necessary to

carry out this section.''.

SEC. 977. <<NOTE: 42 USC 16317.>> SYSTEMS BIOLOGY PROGRAM.

(a) Program.--

(1) Establishment.--The Secretary shall establish a

research, development, and demonstration program in microbial

and plant systems biology, protein science, and computational

biology to support the energy, national security, and

environmental missions of the Department.

[[Page 119 STAT. 904]]

(2) Grants.--The program shall support individual

researchers and multidisciplinary teams of researchers 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) detoxify soils and water, including at facilities of the

Department, contaminated with heavy metals and radiological

materials; and

(4) address other Department missions as identified by the

Secretary.

(c) Plan.--

(1) Development <<NOTE: Deadline.>> 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 <<NOTE: Contracts.>> of plan.--The Secretary

shall contract with the National Academy of Sciences to review

the research plan developed under this

subsection. <<NOTE: Deadline.>> 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) User Facilities and Ancillary Equipment.--Within the funds

authorized to be appropriated pursuant to this subtitle, amounts shall

be available for projects to develop, plan, construct, acquire, or

operate special equipment, instrumentation, or facilities, including

user facilities at National Laboratories, for researchers conducting

research, development, demonstration, and commercial application in

systems biology and proteomics and associated biological disciplines.

(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. 978. FISSION <<NOTE: 42 USC 16318.>> AND FUSION ENERGY MATERIALS

RESEARCH PROGRAM.

(a) In General.--Along with the budget request of the President

submitted to Congress for fiscal year 2007, the Secretary shall

establish a research and development program on material science issues

presented by advanced fission reactors and the fusion energy program of

the Department.

[[Page 119 STAT. 905]]

(b) Administration.--In carrying out the program, the Secretary

shall develop--

(1) a catalog of material properties required for

applications described in subsection (a);

(2) theoretical models for materials possessing the required

properties;

(3) benchmark models against existing data; and

(4) a roadmap to guide further research and development in

the area covered by the program.

SEC. 979. <<NOTE: 42 USC 16319.>> ENERGY AND WATER SUPPLIES.

(a) In General.--The Secretary shall carry out a program of

research, development, demonstration, and commercial application to--

(1) address energy-related issues associated with provision

of adequate water supplies, optimal management, and efficient

use of water;

(2) address water-related issues associated with the

provision of adequate supplies, optimal management, and

efficient use of energy; and

(3) assess the effectiveness of existing programs within the

Department and other Federal agencies to address these energy

and water related issues.

(b) Program Elements.--The program under this section shall

include--

(1) arsenic treatment;

(2) desalination; and

(3) planning, analysis, and modeling of energy and water

supply and demand.

(c) Collaboration.--In carrying out this section, the Secretary

shall consult with the Administrator of the Environmental Protection

Agency, the Secretary of the Interior, the Chief Engineer of the Army

Corps of Engineers, the Secretary of Commerce, the Secretary of Defense,

and other Federal agencies as appropriate.

(d) Facilities.--The Secretary may utilize all existing facilities

within the Department and may design and construct additional facilities

as needed to carry out the purposes of this program.

(e) Advisory <<NOTE: Establishment.>> Committee.--The Secretary

shall establish or utilize an advisory committee to provide independent

advice and review of the program.

(f) Reports.--Not later than 2 years after the date of enactment of

this Act, the Secretary shall submit to Congress a report on the

assessment described in subsection (b) and recommendations for future

actions.

SEC. 980. <<NOTE: 42 USC 16320.>> SPALLATION NEUTRON SOURCE.

(a) Definitions.--In this section:

(1) SING.--The term ``SING'' means the Spallation Neutron

Source Instruments Next Generation major item of equipment.

(2) SNS power upgrade.--The term ``SNS power upgrade'' means

the Spallation Neutron Source power upgrade described in the 20-

year facilities plan of the Office of Science of the Department.

(3) SNS second target station.--The term ``SNS second target

station'' means the Spallation Neutron Source second target

station described in the 20-year facilities plan of the Office

of Science of the Department.

[[Page 119 STAT. 906]]

(4) Spallation neutron source facility.--The terms

``Spallation Neutron Source Facility'' and ``Facility'' mean the

completed Spallation Neutron Source scientific user facility

located at Oak Ridge National Laboratory, Oak Ridge, Tennessee.

(5) Spallation neutron source project.--The terms

``Spallation Neutron Source Project'' and ``Project'' means

Department Project 99-E-334, Oak Ridge National Laboratory, Oak

Ridge, Tennessee.

(b) Spallation Neutron Source Project.--

(1) In <<NOTE: Reports.>> general.--The Secretary shall

submit to Congress, as part of the annual budget request of the

President submitted to Congress, a report on progress on the

Spallation Neutron Source Project.

(2) Contents.--The report shall include for the Project--

(A) a description of the achievement of milestones;

(B) a comparison of actual costs to estimated costs;

and

(C) any changes in estimated Project costs or

schedule.

(c) Spallation Neutron Source Facility Plan.--

(1) In general.--The Secretary shall develop an operational

plan for the Spallation Neutron Source Facility that ensures

that the Facility is employed to the full capability of the

Facility in support of the study of advanced materials,

nanoscience, and other missions of the Office of Science of the

Department.

(2) Plan.--The operational plan shall--

(A) include a plan for the operation of an effective

scientific user program that--

(i) is based on peer review of proposals

submitted for use of the Facility;

(ii) includes scientific and technical support

to ensure that external users, including

researchers based at institutions of higher

education, are able to make full use of a variety

of high quality scientific instruments; and

(iii) phases in systems upgrades to ensure

that the Facility remains at the forefront of

international scientific endeavors in the field of

the Facility throughout the operating life of the

Facility;

(B) include an ongoing program to develop new

instruments that builds on the high performance neutron

source and that allows neutron scattering techniques to

be applied to a growing range of scientific problems and

disciplines; and

(C) address the status of and, to the maximum extent

practicable, costs and schedules for--

(i) full user mode operations of the Facility;

(ii) instrumentation built at the Facility

during the operating phase through full use of the

experimental hall, including the SING;

(iii) the SNS power upgrade; and

(iv) the SNS second target station.

(d) Authorization of Appropriations.--

[[Page 119 STAT. 907]]

(1) Spallation neutron source project.--There is authorized

to be appropriated to carry out the Spallation Neutron Source

Project for the lifetime of the Project $1,411,700,000 for total

project costs, of which--

(A) $1,192,700,000 shall be used for the costs of

construction; and

(B) $219,000,000 shall be used for other Project

costs.

(2) Spallation neutron source facility.--

(A) In general.--Except as provided in subparagraph

(B), there is authorized to be appropriated for the

Spallation Neutron Source Facility for--

(i) the SING, $75,000,000 for each of fiscal

year 2007 through 2009; and

(ii) the SNS power upgrade, $160,000,000, to

remain available until expended.

(B) Insufficient stockpiles of heavy water.--If

stockpiles of heavy water of the Department are

insufficient to meet the needs of the Facility, there is

authorized to be appropriated for the Facility

$12,000,000 for fiscal year 2007.

SEC. 981. RARE <<NOTE: 42 USC 16321.>> ISOTOPE ACCELERATOR.

(a) Establishment.--The Secretary shall construct and operate a Rare

Isotope Accelerator. The Secretary shall <<NOTE: Deadline.>> commence

construction no later than September 30, 2008.

(b) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary such sums as may be necessary to carry out

this section. The Secretary shall not spend more than $1,100,000,000 in

Federal funds for all activities associated with the Rare Isotope

Accelerator, prior to operation of the Accelerator.

SEC. 982. <<NOTE: 42 USC 16322.>> OFFICE OF SCIENTIFIC AND TECHNICAL

INFORMATION.

The Secretary, through the Office of Scientific and Technical

Information, shall maintain within the Department publicly available

collections of scientific and technical information resulting from

research, development, demonstration, and commercial applications

activities supported by the Department.

SEC. 983. <<NOTE: 42 USC 16323.>> SCIENCE AND ENGINEERING EDUCATION

PILOT PROGRAM.

(a) Establishment <<NOTE: Grants.>> of Pilot Program.--The Secretary

shall award a grant to a Southeastern United States consortium of major

research universities that currently advances science and education by

partnering with National Laboratories, to establish a regional pilot

program of its SEEK-16 program for enhancing scientific, technological,

engineering, and mathematical literacy, creativity, and decision-making.

The consortium shall include leading research universities, one or more

universities that train substantial numbers of elementary and secondary

school teachers, and (where appropriate) National Laboratories.

(b) Program Elements.--The regional pilot program shall include--

(1) expanding strategic, formal partnerships among

universities with strength in research, universities that train

substantial numbers of elementary and secondary school teachers,

and the private sector;

(2) combining Department expertise with one or more National

Aeronautics and Space Administration Educator Resource Centers;

[[Page 119 STAT. 908]]

(3) developing programs to permit current and future

teachers to participate in ongoing research projects at National

Laboratories and research universities and to adapt lessons

learned to the classroom;

(4) designing and implementing course work;

(5) designing and implementing a strategy for measuring and

assessing progress under the program; and

(6) developing models for transferring knowledge gained

under the pilot program to other institutions and areas of the

United States.

(c) Categorization.--A grant under this section shall be considered

an authorized activity under section 3165 of the Department of Energy

Science Education Enhancement Act (42 U.S.C. 7381b).

(d) Report.--No later than 2 years after the award of the grant, the

Secretary shall transmit to Congress a report outlining lessons learned

and, if determined appropriate by the Secretary, containing a plan for

expanding the program throughout the United States.

SEC. 984. <<NOTE: 42 USC 16324.>> ENERGY RESEARCH FELLOWSHIPS.

(a) Postdoctoral Fellowship Program.--The Secretary shall establish

a program under which the Secretary provides fellowships to encourage

outstanding young scientists and engineers to pursue postdoctoral

research appointments in energy research and development at institutions

of higher education of their choice.

(b) Senior Research Fellowships.--

(1) In general.--The Secretary shall establish a program

under which the Secretary provides fellowships to allow

outstanding senior researchers and their research groups in

energy research and development to explore research and

development topics of their choosing for a period of not less

than 3 years, to be determined by the Secretary.

(2) Consideration.--In providing a fellowship under the

program described in paragraph (1), the Secretary shall

consider--

(A) the past scientific or technical accomplishment

of a senior researcher; and

(B) the potential for continued accomplishment by

the researcher during the period of the fellowship.

SEC. 984A. <<NOTE: 42 USC 16325.>> SCIENCE AND TECHNOLOGY SCHOLARSHIP

PROGRAM.

(a) In General.--The Secretary is authorized to establish a Science

and Technology Scholarship Program to award scholarships to individuals

that is designed to recruit and prepare students for careers in the

Department and National Laboratories.

(b) Service Requirement.--The Secretary may require that an

individual receiving a scholarship under this section serve as a full-

time employee of the Department or a National Laboratory for a fixed

period in return for receiving the scholarship.

Subtitle H--International Cooperation

SEC. 985. <<NOTE: 42 USC 16341.>> WESTERN HEMISPHERE ENERGY COOPERATION.

(a) Program.--The Secretary shall carry out a program to promote

cooperation on energy issues with countries of the Western Hemisphere.

[[Page 119 STAT. 909]]

(b) Activities.--Under the program, the Secretary shall fund

activities to work with countries of the Western Hemisphere to--

(1) increase the production of energy supplies;

(2) improve energy efficiency; and

(3) assist in the development and transfer of energy supply

and efficiency technologies that would have a beneficial impact

on world energy markets.

(c) Participation by Institutions of Higher Education.--To the

extent practicable, the Secretary shall carry out the program under this

section with the participation of institutions of higher education so as

to take advantage of the acceptance of institutions of higher education

by countries of the Western Hemisphere 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

institutions of higher education that involve the participation

of minority students, such as--

(A) Hispanic-serving institutions; and

(B) part B institutions.

(d) Authorization of Appropriations.--There are authorized to be

appropriated to carry out this section--

(1) $10,000,000 for fiscal year 2007;

(2) $13,000,000 for fiscal year 2008; and

(3) $16,000,000 for fiscal year 2009.

SEC. 986. COOPERATION BETWEEN UNITED STATES AND ISRAEL.

(a) Findings.--Congress finds that--

(1) on February 1, 1996, the United States and Israel signed

the agreement entitled ``Agreement between the Department of

Energy of the United States of America and the Ministry of

Energy and Infrastructure of Israel Concerning Energy

Cooperation'' (referred to in this section as the

``Agreement''), to establish a framework for collaboration

between the United States and Israel in energy research and

development activities;

(2) the Agreement entered into force in February 2000;

(3) in February 2005, the Agreement was automatically

renewed for 1 additional 5-year period pursuant to Article X of

the Agreement; and

(4) under the Agreement, the United States and Israel may

cooperate in energy research and development in a variety of

alternative and advanced energy sectors.

(b) Report to Congress.--Not later than 90 days after the date of

enactment of this Act, the Secretary shall submit to the Committee on

Energy and Natural Resources and the Committee on Foreign Relations of

the Senate and the Committee on Energy and Commerce and the Committee on

International Relations of the House of Representatives a report that

describes--

(1) the ways in which the United States and Israel have

cooperated on energy research and development activities under

the Agreement;

(2) projects initiated pursuant to the Agreement; and

(3) plans for future cooperation and joint projects under

the Agreement.

[[Page 119 STAT. 910]]

(c) Sense of Congress.--It is the sense of Congress that energy

cooperation between the Governments of the United States and Israel is

mutually beneficial in the development of energy technology.

SEC. 986A. <<NOTE: 42 USC 16342.>> INTERNATIONAL ENERGY TRAINING.

(a) In General.--The Secretary, in consultation with the Secretary

of Commerce, the Secretary of the Interior, and Secretary of 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 training and outreach efforts referred to in

subsection (a) may include--

(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 is authorized to be

appropriated to carry out this section $1,500,000 for each of fiscal

years 2007 through 2010.

Subtitle I--Research Administration and Operations

SEC. 987. <<NOTE: 42 USC 16351.>> AVAILABILITY OF FUNDS.

Funds authorized to be appropriated to the Department under this Act

or an amendment made by this Act shall remain available until expended.

SEC. 988. <<NOTE: 42 USC 16352.>> COST SHARING.

(a) Applicability.--Notwithstanding any other provision of law, in

carrying out a research, development, demonstration, or commercial

application program or activity that is initiated after the date of

enactment of this section, the Secretary shall require cost-sharing in

accordance with this section.

(b) Research and Development.--

(1) In general.--Except as provided in paragraphs (2) and

(3) and subsection (f), the Secretary shall require not less

than 20 percent of the cost of a research or development

activity described in subsection (a) to be provided by a non-

Federal source.

(2) Exclusion.--Paragraph (1) shall not apply to a research

or development activity described in subsection (a) that is of a

basic or fundamental nature, as determined by the appropriate

officer of the Department.

(3) Reduction.--The Secretary may reduce or eliminate the

requirement of paragraph (1) for a research and development

activity of an applied nature if the Secretary determines that

the reduction is necessary and appropriate.

(c) Demonstration and Commercial Application.--

(1) In general.--Except as provided in paragraph (2) and

subsection (f), the Secretary shall require that not less than

[[Page 119 STAT. 911]]

50 percent of the cost of a demonstration or commercial

application activity described in subsection (a) to be provided

by a non-Federal source.

(2) Reduction of non-federal share.--The Secretary may

reduce the non-Federal share required under paragraph (1) if the

Secretary determines the reduction to be necessary and

appropriate, taking into consideration any technological risk

relating to the activity.

(d) Calculation of Amount.--In calculating the amount of a non-

Federal contribution under this section, the Secretary--

(1) may include allowable costs in accordance with the

applicable cost principles, including--

(A) cash;

(B) personnel costs;

(C) the value of a service, other resource, or third

party in-kind contribution determined in accordance with

the applicable circular of the Office of Management and

Budget;

(D) indirect costs or facilities and administrative

costs; or

(E) any funds received under the power program of

the Tennessee Valley Authority (except to the extent

that such funds are made available under an annual

appropriation Act); and

(2) shall not include--

(A) revenues or royalties from the prospective

operation of an activity beyond the time considered in

the award;

(B) proceeds from the prospective sale of an asset

of an activity; or

(C) other appropriated Federal funds.

(e) Repayment of Federal Share.--The Secretary shall not require

repayment of the Federal share of a cost-shared activity under this

section as a condition of making an award.

(f) Exclusions.--This section shall not apply to--

(1) a cooperative research and development agreement under

the Stevenson-Wydler Technology Innovation Act of 1980 (15

U.S.C. 3701 et seq.);

(2) a fee charged for the use of a Department facility; or

(3) an award under--

(A) the small business innovation research program

under section 9 of the Small Business Act (15 U.S.C.

638); or

(B) the small business technology transfer program

under that section.

SEC. 989. <<NOTE: 42 USC 16353.>> MERIT REVIEW OF PROPOSALS.

(a) Awards.--Awards of funds authorized under this Act or an

amendment made by this Act shall be made only after an impartial review

of the scientific and technical merit of the proposals for the awards

has been carried out by or for the Department.

(b) Competition.--Competitive awards under this Act shall involve

competitions open to all qualified entities within one or more of the

following categories:

(1) Institutions of higher education.

(2) National Laboratories.

(3) Nonprofit and for-profit private entities.

[[Page 119 STAT. 912]]

(4) State and local governments.

(5) Consortia of entities described in paragraphs (1)

through (4).

(c) Sense of Congress.--It is the sense of Congress that research,

development, demonstration, and commercial application activities

carried out by the Department should be awarded using competitive

procedures, to the maximum extent practicable.

SEC. 990. <<NOTE: 42 USC 16354.>> EXTERNAL TECHNICAL REVIEW OF

DEPARTMENTAL PROGRAMS.

(a) National Energy Research and Development Advisory Boards.--

(1) Establishment.--The Secretary shall establish one or

more advisory boards to review research, development,

demonstration, and commercial application programs of the

Department in energy efficiency, renewable energy, nuclear

energy, and fossil energy.

(2) Alternatives.--The Secretary may--

(A) designate an existing advisory board within the

Department to fulfill the responsibilities of an

advisory board under this section; and

(B) enter into appropriate arrangements with the

National Academy of Sciences to establish such an

advisory board.

(b) Use 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.

(c) Membership.--Each advisory board under this section shall

consist of persons with appropriate expertise representing a diverse

range of interests.

(d) Meetings and Goals.--

(1) Meetings.--Each advisory board under this section shall

meet at least semiannually to review and advise on the progress

made by the respective one or more research, development,

demonstration, and commercial application programs.

(2) Goals.--The advisory board shall review the measurable

cost and performance-based goals for the programs as established

under section 902, and the progress on meeting the goals.

(e) Periodic Reviews and Assessments.--

(1) In general.--The Secretary shall enter into appropriate

arrangements with the National Academy of Sciences to conduct

periodic reviews and assessments of--

(A) the research, development, demonstration, and

commercial application programs authorized by this Act

and amendments made by this Act;

(B) the measurable cost and performance-based goals

for the programs as established under section 902, if

any; and

(C) the progress on meeting the goals.

(2) Timing.--The reviews and assessments shall be conducted

every 5 years or more often as the Secretary considers

necessary.

[[Page 119 STAT. 913]]

(3) Reports.--The Secretary shall submit to Congress reports

describing the results of all the reviews and assessments.

SEC. 991. <<NOTE: 42 USC 16355.>> NATIONAL LABORATORY DESIGNATION.

After the date of enactment of this Act, the Secretary shall not

designate a facility that is not listed in section 2(3) as a National

Laboratory.

SEC. 992. <<NOTE: 42 USC 16356.>> 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 National 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 National Laboratories;

(3) a description of how equal employment opportunity

practices at the National 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

National Laboratory;

(5) a summary of outreach efforts to attract women and

minorities to the National Laboratories;

(6) a summary of efforts to retain women and minorities in

the National Laboratories; and

(7) a summary of collaboration efforts with the Office of

Federal Contract Compliance Programs to improve equal employment

opportunity practices at the National Laboratories.

SEC. 993. <<NOTE: 42 USC 16357.>> STRATEGY AND PLAN FOR SCIENCE AND

ENERGY FACILITIES AND INFRASTRUCTURE.

(a) Facility and Infrastructure Policy.--

(1) In general.--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.

(2) Strategy.--The strategy shall provide cost-effective

means for--

(A) maintaining existing facilities and

infrastructure;

(B) closing unneeded facilities;

(C) making facility modifications; and

(D) building new facilities.

(b) Report.--

(1) In general.--The Secretary shall prepare and submit,

along with the budget request of the President submitted to

Congress for fiscal year 2008, a report describing the strategy

developed under subsection (a).

[[Page 119 STAT. 914]]

(2) Contents.--For each National Laboratory and single-

purpose research facility that is primarily used for science and

energy research, the 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. 994. <<NOTE: 42 USC 16358.>> STRATEGIC RESEARCH PORTFOLIO ANALYSIS

AND COORDINATION PLAN.

(a) In General.--The Secretary shall periodically review all of the

science and technology activities of the Department in a strategic

framework that takes into account both the frontiers of science to which

the Department can contribute and the national needs relevant to the

Department's statutory missions.

(b) Coordination Analysis and Plan.--As part of the review under

subsection (a), the Secretary shall develop a coordination plan to

improve coordination and collaboration in research, development,

demonstration, and commercial application activities across Department

organizational boundaries.

(c) Plan Contents.--The plan shall describe--

(1) cross-cutting scientific and technical issues and

research questions that span more than one program or major

office of the Department;

(2) how the applied technology programs of the Department

are coordinating their activities, and addressing those

questions;

(3) ways in which the technical interchange within the

Department, particularly between the Office of Science and the

applied technology programs, can be enhanced, including ways in

which the research agendas of the Office of Science and the

applied programs can interact and assist each other;

(4) a description of how the Secretary will ensure that the

Department's overall research agenda include, in addition to

fundamental, curiosity-driven research, fundamental research

related to topics of concern to the applied programs, and

applications in Departmental technology programs of research

results generated by fundamental, curiosity-driven research.

(d) Plan <<NOTE: Deadlines.>> Transmittal.--Not later than 12 months

after the date of enactment of this Act, and every 4 years thereafter,

the Secretary shall transmit to Congress the results of the review under

subsection (a) and the coordination plan under subsection (b).

SEC. 995. <<NOTE: 42 USC 16359.>> 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 National Laboratory (excluding those named in subparagraphs (G), (H),

(N), and (O) of section 2 (3)), unless

[[Page 119 STAT. 915]]

such contract is competitively awarded, or the Secretary grants, on a

case-by-case basis, a waiver. <<NOTE: Reports. Deadline.>> The Secretary

may not delegate the authority to grant such a waiver and shall submit

to Congress a report notifying it of the waiver, and setting forth the

reasons for the waiver, at least 60 days prior to the date of the award

of such contract.

SEC. 996. <<NOTE: 42 USC 16360.>> 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. <<NOTE: Deadline.>> 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 under

the Clean Air Act (42 U.S.C. 7401 et seq.) that might otherwise apply

during the pendency of the demonstration project.

SEC. 997. <<NOTE: 42 USC 16361.>> ARCTIC ENGINEERING RESEARCH CENTER.

(a) In <<NOTE: Establishment. Grants.>> General.--The Secretary of

Transportation, in consultation with the Secretary 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 practicable;

(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

[[Page 119 STAT. 916]]

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 2006 through 2011,

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 2006 through 2011.

SEC. 998. <<NOTE: 42 USC 16362.>> 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.

Subtitle J--Ultra-Deepwater and Unconventional Natural Gas and Other

Petroleum Resources

SEC. 999A. <<NOTE: 42 USC 16371.>> PROGRAM AUTHORITY.

(a) In General.--The Secretary shall carry out a program under this

subtitle 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 subtitle shall address

the following areas, including improving safety and minimizing

environmental impacts of activities within each area:

[[Page 119 STAT. 917]]

(1) Ultra-deepwater architecture and technology, including

drilling to formations in the Outer Continental Shelf to depths

greater than 15,000 feet.

(2) Unconventional natural gas and other petroleum resource

exploration and production technology.

(3) The technology challenges of small producers.

(4) Complementary research performed by the National Energy

Technology Laboratory for the Department.

(c) Limitation on Location of Field Activities.--Field activities

under the program under this subtitle 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) Activities at the National Energy Technology Laboratory.--The

Secretary, through the National Energy Technology Laboratory, shall

carry out a program of research and other activities complementary to

and supportive of the research programs under subsection (b).

(e) Consultation With Secretary of the Interior.--In carrying out

this subtitle, the Secretary shall consult regularly with the Secretary

of the Interior.

SEC. 999B. <<NOTE: 42 USC 16372.>> ULTRA-DEEPWATER AND UNCONVENTIONAL

ONSHORE NATURAL GAS AND OTHER PETROLEUM RESEARCH AND

DEVELOPMENT PROGRAM.

(a) In General.--The Secretary shall carry out the activities under

section 999A, to maximize the value of 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 shall contract with a

corporation that is structured as a consortium to administer the

programmatic activities outlined in this chapter. The program

consortium shall--

(A) administer the program pursuant to subsection

(f)(3), utilizing program administration funds only;

(B) issue research project solicitations upon

approval of the Secretary or the Secretary's designee;

(C) make project awards to research performers upon

approval of the Secretary or the Secretary's designee;

(D) disburse research funds to research performers

awarded under subsection (f) as directed by the

Secretary

[[Page 119 STAT. 918]]

in accordance with the annual plan under subsection (e);

and

(E) 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

decisionmaking capacity under subsection (f)(3)

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 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) Requirement of section 501(c)(3) status.--The Secretary

shall not select a consortium under this section unless such

consortium is an organization described in section 501(c)(3) of

the Internal Revenue Code of 1986 and exempt from tax under such

section 501(a) of such Code.

(4) Schedule.-- <<NOTE: Deadlines.>> Not later than 90 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

180 days after the date of enactment of this Act. The Secretary

shall select the program consortium not later than 270 days

after such date of enactment.

(5) Application.--Applicants shall submit a proposal

including such information as the Secretary may require. At a

minimum, each proposal shall--

(A) list all members of the consortium;

(B) fully describe the structure of the consortium,

including any provisions relating to intellectual

property; and

[[Page 119 STAT. 919]]

(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

have collectively demonstrated capabilities and experience in

planning and managing research, development, demonstration, and

commercial application programs for ultra-deepwater and

unconventional natural gas or other petroleum exploration or

production.

(7) Focus areas for awards.--

(A) Ultra-deepwater resources.--Awards from

allocations under section 999H(d)(1) shall focus on the

development and demonstration of individual exploration

and production technologies as well as integrated

systems technologies including new architectures for

production in ultra-deepwater.

(B) Unconventional resources.--Awards from

allocations under section 999H(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.

(C) Small producers.--Awards from allocations under

section 999H(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) 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 program consortium shall 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

999D(a) and to the Unconventional Resources Technology

Advisory Committee established under section 999D(b),

and such Advisory Committees shall provide to the

Secretary written comments by a date determined by the

Secretary. The Secretary may also solicit comments from

any other experts.

[[Page 119 STAT. 920]]

(C) Consultation.--The Secretary shall consult

regularly with the program consortium throughout the

preparation of the annual plan.

(3) Publication.-- <<NOTE: Federal Register,

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 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)(3).

(5) Estimates <<NOTE: Reports.>> 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 subtitle. 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.--Upon approval of the Secretary the program

consortium shall make awards to research performers 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

provided that conflict of interest procedures in section

999B(c)(3) are followed, entities who are members of the program

consortium are not precluded from receiving research awards as

either individual research performers or as research performers

who are members of a research collaboration.

(2) Proposals.--Upon approval of the Secretary the program

consortium 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) 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.

(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

[[Page 119 STAT. 921]]

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 auditor, which

shall include a review by the General Accountability Office, 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 subtitle. <<NOTE: Reports.>> The auditor shall transmit a report

(including any review by the General Accountability Office) annually to

the Secretary, who shall transmit the report to Congress, along with a

plan to remedy any deficiencies cited in the report.

(i) 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.

(j) Program <<NOTE: Contracts.>> Review and Oversight.--The National

Energy Technology Laboratory, on behalf of the Secretary, shall (1)

issue a competitive solicitation for the program consortium, (2)

evaluate, select, and award a contract or other agreement to a qualified

program consortium, and (3) have primary review and oversight

responsibility for the program consortium, including review and approval

of research awards proposed to be made by the program consortium, to

ensure that its activities are consistent with the purposes and

requirements described in this subtitle. Up to 5 percent of program

funds allocated under paragraphs (1) through (3) of section 999H(d) may

be used for this purpose, including program direction and the

establishment of a site office if determined to be necessary to carry

out the purposes of this subsection.

SEC. 999C. <<NOTE: 42 USC 16373.>> ADDITIONAL REQUIREMENTS FOR AWARDS.

(a) Demonstration Projects.--An application for an award under this

subtitle 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 999A(c), a demonstration project under this

subtitle 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

subtitle 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.--Two and one-half percent of the amount of

each award made under this subtitle shall be designated for technology

transfer and outreach activities under this subtitle.

(e) Cost Sharing Reduction for Independent Producers.--In applying

the cost sharing requirements under section 988 to an award under this

subtitle the Secretary may reduce or eliminate the non-Federal

requirement if the Secretary determines that the

[[Page 119 STAT. 922]]

reduction is necessary and appropriate considering the technological

risks involved in the project.

(f) Information Sharing.--All results of the research administered

by the program consortium shall be made available to the public

consistent with Department policy and practice on information sharing

and intellectual property agreements.

SEC. 999D. <<NOTE: 42 USC 16374.>> ADVISORY COMMITTEES.

(a) Ultra-Deepwater Advisory Committee.--

(1) Establishment.-- <<NOTE: Deadline.>> 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 subtitle related

to ultra-deepwater natural gas and other petroleum

resources; and

(B) carry out section 999B(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.-- <<NOTE: Deadline.>> 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 Secretary shall endeavor to have a

balanced representation of members on the Advisory Committee to

reflect the breadth of geographic areas of potential gas supply.

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;

[[Page 119 STAT. 923]]

(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;

(D) individuals with expertise in the various

geographic areas of potential supply of unconventional

onshore natural gas and other petroleum in the United

States;

(E) no individuals who are Federal employees; and

(F) 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 activities under this subtitle related

to unconventional natural gas and other petroleum

resources; and

(B) carry out section 999B(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.

(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. 999E. <<NOTE: 42 USC 16375.>> LIMITS ON PARTICIPATION.

An entity shall be eligible to receive an award under this subtitle

only if the Secretary finds--

(1) that the entity's participation in the program under

this subtitle would be in the economic interest of the United

States; 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 subtitle;

(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. 999F. <<NOTE: 42 USC 16376.>> SUNSET.

The authority provided by this subtitle shall terminate on September

30, 2014.

SEC. 999G. <<NOTE: 42 USC 16377.>> DEFINITIONS.

In this subtitle:

(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.--

[[Page 119 STAT. 924]]

(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 administration funds.--The term ``program

administration funds'' means funds used by the program

consortium to administer the program under this subtitle, but

not to exceed 10 percent of the total funds allocated under

paragraphs (1) through (3) of section 999H(d).

(4) Program consortium.--The term ``program consortium''

means the consortium selected under section 999B(d).

(5) Program research funds.--The term ``program research

funds'' means funds awarded to research performers by the

program consortium consistent with the annual plan.

(6) 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.

(7) 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.

(8) Ultra-deepwater.--The term ``ultra-deepwater'' means a

water depth that is equal to or greater than 1,500 meters.

(9) 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.

(10) Ultra-deepwater technology.--The term ``ultra-deepwater

technology'' means a discrete technology that is specially

suited to address one or more challenges associated with the

exploration for, or production of, natural gas or other

petroleum resources located at ultra-deepwater depths.

(11) 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. 999H. <<NOTE: 42 USC 16378.>> FUNDING.

(a) Oil and Gas Lease Income.--For each of fiscal years 2007 through

2017, 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 (43 U.S.C. 1331 et seq.) and the Mineral

Leasing Act (30 U.S.C. 181 et seq.) which are deposited in the Treasury,

and after distribution of any such funds as described in subsection (c),

$50,000,000 shall be deposited into the Ultra-Deepwater and

Unconventional Natural Gas and

[[Page 119 STAT. 925]]

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)).

(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 coastal impact assistance program

established under section 31 of the Outer Continental

Shelf Lands Act (as amended by section 384).

(d) Allocation.--Amounts obligated from the Fund under subsection

(a)(1) in each fiscal year shall be allocated as follows:

(1) 35 percent shall be for activities under section

999A(b)(1).

(2) 32.5 percent shall be for activities under section

999A(b)(2).

(3) 7.5 percent shall be for activities under section

999A(b)(3).

(4) 25 percent shall be for complementary research under

section 999A(b)(4) and other activities under section 999A(b) to

include program direction funds, overall program oversight,

contract management, and the establishment and operation of a

technical committee to ensure that in-house research activities

funded under section 999A(b)(4) are technically complementary

to, and not duplicative of, research conducted under paragraphs

(1), (2), and (3) of section 999A(b).

(e) Authorization of Appropriations.--In addition to other amounts

that are made available to carry out this section, there is authorized

to be appropriated to carry out this section $100,000,000 for each of

fiscal years 2007 through 2016.

(f) 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''.

[[Page 119 STAT. 926]]

TITLE X--DEPARTMENT OF ENERGY MANAGEMENT

SEC. 1001. <<NOTE: 42 USC 16391.>> IMPROVED TECHNOLOGY TRANSFER OF

ENERGY TECHNOLOGIES.

(a) Technology <<NOTE: Establishment.>> Transfer Coordinator.--The

Secretary shall appoint a Technology Transfer Coordinator to be the

principal advisor to the Secretary on all matters relating to technology

transfer and commercialization.

(b) Qualifications.--The Coordinator shall be an individual who, by

reason of professional background and experience, is specially qualified

to advise the Secretary on matters pertaining to technology transfer at

the Department.

(c) Duties of the Coordinator.--The Coordinator shall oversee--

(1) the activities of the Technology Transfer Working Group

established under subsection (d);

(2) the expenditure of funds allocated for technology

transfer within the Department;

(3) the activities of each technology partnership ombudsman

appointed under section 11 of the Technology Transfer

Commercialization Act of 2000 (42 U.S.C. 7261c); and

(4) efforts to engage private sector entities, including

venture capital companies.

(d) Technology <<NOTE: Establishment.>> 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 opportunities and procedures related to alternative

approaches to resolution of disputes involving intellectual

property rights and other technology transfer matters.

(e) Technology Commercialization Fund.--The Secretary shall

establish an Energy Technology Commercialization Fund, using 0.9 percent

of the amount made available to the Department for applied energy

research, development, demonstration, and commercial application for

each fiscal year, to be used to provide matching funds with private

partners to promote promising energy technologies for commercial

purposes.

(f) Technology Transfer Responsibility.--Nothing in this section

affects the technology transfer responsibilities of Federal employees

under the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C.

3701 et seq.).

(g) Planning and Reporting.--

(1) In general.--Not later than 180 days after the date of

enactment of this Act, the Secretary shall submit to Congress a

technology transfer execution plan.

[[Page 119 STAT. 927]]

(2) Updates.--Each year after the submission of the plan

under paragraph (1), the Secretary shall submit to Congress an

updated execution plan and reports that describe progress toward

meeting goals set forth in the execution plan and the funds

expended under subsection (e).

SEC. 1002. <<NOTE: 42 USC 16392.>> TECHNOLOGY INFRASTRUCTURE PROGRAM.

(a) Definitions.--In this section:

(1) Program.--The term ``Program'' means the Technology

Infrastructure Program established under subsection (b).

(2) 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.

(3) Technology-related business concern.--The term

``technology-related business concern'' means a for-profit

corporation, company, association, firm, partnership, or small

business concern that--

(A) conducts scientific or engineering research;

(B) develops new technologies;

(C) manufactures products based on new technologies;

or

(D) performs technological services.

(b) Establishment.--The Secretary shall establish a Technology

Infrastructure Program in accordance with this section.

(c) Purpose.--The purpose of the 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--

(A) National Laboratories or single-purpose research

facilities; and

(B) entities that can support departmental missions

at the National Laboratories or single-purpose research

facilities, such as--

(i) institutions of higher education;

(ii) technology-related business concerns;

(iii) nonprofit institutions; and

(iv) agencies of State, tribal, or local

governments.

(d) Projects.--The Secretary shall authorize the director of each

National Laboratory or single-purpose research facility to implement the

Program at the National Laboratory or facility through one or more

projects that meet the requirements of subsections (e) and (f).

(e) Program Requirements.--

(1) In general.--Each project funded under this section

shall meet the requirements of this subsection.

(2) Entities.--Each project shall include at least one of

each of the following entities:

[[Page 119 STAT. 928]]

(A) A business.

(B) An institution of higher education.

(C) A nonprofit institution.

(D) An agency of a State, local, or tribal

government.

(3) Cost-sharing.--

(A) In general.--The costs of carrying out projects

under this section shall be shared in accordance with

section 988.

(B) Sources.--The calculation of costs paid by the

non-Federal sources for a project shall include cash,

personnel, services, equipment, and other resources

expended on the project after the commencement of the

project.

(C) Research and development expenses.--Independent

research and development expenses of Government

contractors that qualify for reimbursement under section

31.205-18(e) of title 48, Code of Federal Regulations,

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 towards costs paid by non-Federal

sources to a project, if the expenses meet the other

requirements of this section.

(4) Competitive selection.--A project under this section

shall be competitively selected using procedures determined by

the Secretary.

(5) Accounting.--Any participant that receives funds under

this section may use generally accepted accounting principles

for maintaining accounts, books, and records relating to the

project.

(6) Duration.--No Federal funds shall be made available

under this section for a construction project or for any project

with a duration of more than 5 years.

(f) Selection Criteria.--

(1) Departmental missions.--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) Other criteria.--In selecting a project to receive

Federal funds, the Secretary shall consider--

(A) the potential of the project to promote the

development of a commercially sustainable technology

cluster following the period of investment by the

Department, 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,

[[Page 119 STAT. 929]]

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; and

(E) such other criteria as the Secretary determines

to be appropriate.

(g) 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 the

activities with the project.

(h) Report to Congress.--Not later than July 1, 2008, the Secretary

shall submit to Congress a report on whether the Program should be

continued and, if so, how the program should be managed.

(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 2006 through 2008.

SEC. 1003. <<NOTE: 42 USC 16393.>> 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 (as defined in section 8(a)(4) of the Small Business

Act (15 U.S.C. 637(a)(4))), in procurement, collaborative

research, technology licensing, and technology transfer

activities conducted by the National Laboratory or single-

purpose research facility;

(2) <<NOTE: Reports.>> report to the Director of the

National Laboratory or single-purpose research facility on the

actual participation of small business concerns in procurement

and collaborative research along with recommendations, if

appropriate, on how to improve participation;

(3) make available to small business concerns 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 <<NOTE: Guidelines. Reports.>> guidelines for

the program under subsection (b) and report on the effectiveness

of the 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

[[Page 119 STAT. 930]]

research facility, to establish a program to provide small business

concerns with--

(1) assistance directed at making the small business

concerns more effective and efficient subcontractors or

suppliers to the National Laboratory or single-purpose research

facilities; or

(2) general technical assistance, the cost of which shall

not exceed $10,000 per instance of assistance, to improve the

products or services of the small business concern.

(c) Use of Funds.--None of the funds expended under subsection (b)

may be used for direct grants to small business concerns.

(d) Authorization of Appropriations.--There is authorized to be

appropriated to the Secretary for activities under this section

$5,000,000 for each of fiscal years 2006 through 2008.

SEC. 1004. <<NOTE: 42 USC 16394.>> OUTREACH.

The Secretary shall ensure that each program authorized by this Act

or an amendment made by this Act includes an outreach component to

provide information, as appropriate, to manufacturers, consumers,

engineers, architects, builders, energy service companies, institutions

of higher education, facility planners and managers, State and local

governments, and other entities.

SEC. 1005. <<NOTE: Applicability. 42 USC 16395.>> RELATIONSHIP TO OTHER

LAWS.

Except as otherwise provided in this Act or an amendment made by

this Act, the Secretary shall carry out the research, development,

demonstration, and commercial application programs, projects, and

activities authorized by this Act or an amendment made by this Act in

accordance with the applicable provisions of--

(1) the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.);

(2) the Federal Nonnuclear Energy Research and Development

Act of 1974 (42 U.S.C. 5901 et seq.);

(3) the Energy Policy Act of 1992 (42 U.S.C. 13201 et seq.);

(4) the Stevenson-Wydler Technology Innovation Act of 1980

(15 U.S.C. 3701 et seq.);

(5) chapter 18 of title 35, United States Code (commonly

known as the ``Bayh-Dole Act''); and

(6) any other Act under which the Secretary is authorized to

carry out the programs, projects, and activities.

SEC. 1006. <<NOTE: Government organization and employees.>> IMPROVED

COORDINATION AND MANAGEMENT OF CIVILIAN SCIENCE AND

TECHNOLOGY PROGRAMS.

(a) Effective Top-Level Coordination of Research and Development

Programs.--Section 202 of the Department of Energy Organization Act (42

U.S.C. 7132) is amended by striking subsection (b) and inserting the

following:

``(b)(1) There <<NOTE: President.>> shall be in the Department an

Under Secretary for Science, who shall be appointed by the President, by

and with the advice and consent of the Senate.

``(2) The Under Secretary shall be compensated at the rate provided

for level III of the Executive Schedule under section 5314 of title 5,

United States Code.

``(3) The Under Secretary for Science shall be appointed from among

persons who--

[[Page 119 STAT. 931]]

``(A) have extensive background in scientific or engineering

fields; and

``(B) are well qualified to manage the civilian research and

development programs of the Department.

``(4) The Under Secretary for Science shall--

``(A) serve as the Science and Technology Advisor to the

Secretary;

``(B) monitor the research and development programs of the

Department in order to advise the Secretary with respect to any

undesirable duplication or gaps in the programs;

``(C) advise the Secretary with respect to the well-being

and management of the multipurpose laboratories under the

jurisdiction of the Department;

``(D) advise the Secretary with respect to education and

training activities required for effective short- and long-term

basic and applied research activities of the Department;

``(E) advise the Secretary with respect to grants and other

forms of financial assistance required for effective short- and

long-term basic and applied research activities of the

Department;

``(F) advise the Secretary with respect to long-term

planning, coordination, and development of a strategic framework

for Department research and development activities; and

``(G) carry out such additional duties assigned to the Under

Secretary by the Secretary relating to basic and applied

research, including supervision or support of research

activities carried out by any of the Assistant Secretaries

designated by section 203 of this Act, as the Secretary

considers advantageous.''.

(b) Additional Assistant Secretary Position.--

(1) In general.--Section 203(a) of the Department of Energy

Organization Act (42 U.S.C. 7133(a)) is amended in the first

sentence by striking ``six Assistant Secretaries'' and inserting

``7 Assistant Secretaries''.

(2) Assistant secretary level.--It is the sense of Congress

that the leadership for departmental missions in nuclear energy

should be at the Assistant Secretary level.

(c) Technical and Conforming Amendments.--

(1) Section 202 of the Department of Energy Organization Act

(42 U.S.C. 7132) is amended by adding at the end the following:

``(d)(1) There <<NOTE: President.>> shall be in the Department an

Under Secretary, who shall be appointed by the President, by and with

the advice and consent of the Senate, and who shall perform such

functions and duties as the Secretary shall prescribe, consistent with

this section.

``(2) The Under Secretary shall be compensated at the rate provided

for level III of the Executive Schedule under section 5314 of title 5,

United States Code.

``(e)(1) There <<NOTE: President.>> shall be in the Department a

General Counsel, who shall be appointed by the President, by and with

the advice and consent of the Senate, and who shall perform such

functions and duties as the Secretary shall prescribe.

``(2) The General Counsel shall be compensated at the rate provided

for level IV of the Executive Schedule under section 5315 of title 5,

United States Code.''.

[[Page 119 STAT. 932]]

(2) Section 5314 of title 5, United States Code, is amended

by striking ``Under Secretaries of Energy (2)'' and inserting

``Under Secretaries of Energy (3)''.

(3) Section 5315 of title 5, United States Code, is amended

by striking ``Assistant Secretaries of Energy (6)'' and

inserting ``Assistant Secretaries of Energy (7)''.

(4) Section 209(b) of the Department of Energy Organization

Act (42 U.S.C. 7139(b)) is amended by striking paragraph (6) and

inserting the following:

``(6) to carry out such additional duties assigned to the

Office by the Secretary.''.

SEC. 1007. 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 authority granted to the Secretary under any

other provision of law, the Secretary may exercise the same authority to

enter into transactions (other than contracts, cooperative agreements,

and grants), subject to the same terms and conditions as the Secretary

of Defense under section 2371 of title 10, United States Code (other

than subsections (b) and (f) of that section).

``(2) In applying section 2371 of title 10, United States Code, to

the Secretary under paragraph (1)--

``(A) the term `basic' shall be replaced by the term

`research';

``(B) the term `applied' shall be replaced by the term

`development'; and

``(C) the terms `advanced research projects' and `advanced

research' shall be replaced by the term `demonstration

projects'.

``(3) The authority of the Secretary under paragraph (1) shall not

be subject to--

``(A) section 9 of the Federal Nonnuclear Energy Research

and Development Act of 1974 (42 U.S.C. 5908); or

``(B) section 152 of the Atomic Energy Act of 1954 (42

U.S.C. 2182).

``(4)(A) The Secretary shall use such competitive, merit-based

selection procedures in entering into transactions under paragraph (1),

as the Secretary determines in writing to be practicable.

``(B) A transaction under paragraph (1) shall relate to a research,

development, or demonstration project only if the Secretary determines

in writing that the use of a standard contract, grant, or cooperative

agreement for the project is not feasible or appropriate.

``(5) The Secretary may protect from disclosure, for up to 5 years

after the date on which the information is developed, any information

developed pursuant to a transaction under paragraph (1) that 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.

``(6)(A) Not <<NOTE: Deadline. Guidelines.>> later than 90 days

after the date of enactment of this subsection, the Secretary shall

issue guidelines for transactions under paragraph (1).

``(B) The <<NOTE: Federal Register, publication.>> guidelines shall

be published in the Federal Register for public comment in accordance

with rulemaking procedures of the Department.

[[Page 119 STAT. 933]]

``(C) The Secretary shall not have authority to carry out

transactions under paragraph (1) until the guidelines for transactions

required under subparagraph (A) are final.

``(7) The <<NOTE: Reports.>> annual report of the head of an

executive agency under section 2371(h) of title 10, United States Code,

shall be submitted to Congress.

``(8)(A) In this paragraph, the term `nontraditional Government

contractor' has the meaning given the term `nontraditional defense

contractor' in section 845(f) of the National Defense Authorization Act

for Fiscal Year 1994 (Public Law 103-160; 10 U.S.C. 2371 note).

``(B) Not <<NOTE: Deadline. Reports.>> later than 1 year after the

date on which the final guidelines are published under paragraph (6),

the Comptroller General of the United States shall submit to Congress a

report describing--

``(i) the use by the Department of authorities under this

section, including the ability to attract nontraditional

Government contractors; and

``(ii) whether additional safeguards are necessary to carry

out the authorities.

``(9) 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.

``(10) Notwithstanding <<NOTE: Termination date.>> any other

provision of law, the authority to enter into transactions under

paragraph (1) shall terminate on September 30, 2010.''.

SEC. 1008. <<NOTE: 42 USC 16396.>> PRIZES FOR ACHIEVEMENT IN GRAND

CHALLENGES OF SCIENCE AND TECHNOLOGY.

(a) Authority.--The Secretary may carry out a program to award cash

prizes in recognition of breakthrough achievements in research,

development, demonstration, and commercial application that have the

potential for application to the performance of the mission of the

Department.

(b) Competition Requirements.--The program under subsection (a) may

include prizes for the achievement of goals articulated by the Secretary

in a specific area through a widely advertised solicitation of

submission of results for research, development, demonstration, or

commercial application projects.

(c) Prizes for Processes and Technologies to Reduce Dependence on

Imported Oil.--The Secretary, in cooperation with the Freedom Prize

Foundation, shall support a program of awarding prizes, to be known as

Freedom Prizes, to encourage and recognize the development and

deployment of processes and technologies that serve to reduce the

dependence of the United States on imported oil.

(d) Relationship to Other Authority.--The program under subsection

(a) may be carried out in conjunction with or in addition to the

exercise of any other authority of the Secretary to acquire, support, or

stimulate research, development, demonstration, or commercial

application projects.

(e) Authorization of Appropriations.--There are authorized to be

appropriated--

(1) $10,000,000 to carry out the program under subsection

(a); and

(2) $5,000,000 to carry out the program under subsection

(c).

[[Page 119 STAT. 934]]

SEC. 1009. TECHNICAL CORRECTIONS.

(a) Coal Research and Development.--

(1) In general.--Public Law 86-599 (30 U.S.C. 661 et seq.)

is amended--

(A) by striking the first section (30 U.S.C. 661)

and inserting the following:

``Sec. 1. (a) This Act may be cited as the `Coal Research and

Development Act of 1960'.

``(b) In this Act:

``(1) The term `research' means scientific, technical, and

economic research and the practical application of that

research.

``(2) The term `Secretary' means the Secretary of Energy.'';

(B) in section 2 (30 U.S.C. 662), by striking

``shall establish within'' and all that follows through

``such Office'';

(C) by striking sections 3, 4, and 7 (30 U.S.C. 663,

664, 667); and

(D) by redesignating sections 5, 6, and 8 (30 U.S.C.

665, 666, 668) as sections 3, 4, and 5, respectively.

(2) Patents.--Section 210(a)(8) of title 35, United States

Code, is amended by striking ``Coal Research Development Act of

1960'' and inserting ``Coal Research and Development Act of

1960''.

(b) Nonnuclear Energy Research and Development.--

(1) Short title; definitions.--Section 1 of the Federal

Nonnuclear Energy Research and Development Act of 1974 (42

U.S.C. 5902) is amended to read as follows:

``short title and definitions

``Sec. 1. <<NOTE: 42 USC 5901 note.>> (a) This Act may be cited as

the `Federal Nonnuclear Energy Research and Development Act of 1974'.

``(b) In this Act:

``(1) The term `Department' means the Department of Energy.

``(2) The term `Secretary' means the Secretary of Energy.''.

(2) Statement of policy.--Section 3(b) of the Federal

Nonnuclear Energy Research and Development Act of 1974 (42

U.S.C. 5902(b)) is amended--

(A) in paragraph (1), by striking ``Energy Research

and Development Administration'' and inserting

``Department'';

(B) in paragraph (2), by striking ``Administrator of

the Energy Research and Development Administration

(hereinafter in this Act referred to as the

`Administrator')'' and inserting ``Secretary''; and

(C) in paragraph (3)--

(i) by striking ``Administrator'' and

inserting ``Secretary''; and

(ii) by inserting ``Demonstration'' after

``Cooling''.

(3) Duties and authorities.--Section 4 of the Federal

Nonnuclear Energy Research and Development Act of 1974 (42

U.S.C. 5903) is amended--

(A) by striking the section heading and inserting

the following: ``duties and authorities of the

secretary''; and

(B) in the matter preceding subsection (a), by

striking ``Administrator'' and inserting ``Secretary''.

[[Page 119 STAT. 935]]

(4) Comprehensive planning and programming.--Section 6 of

the Federal Nonnuclear Energy Research and Development Act of

1974 (42 U.S.C. 5905) is amended--

(A) by striking ``Administrator'' each place it

appears and inserting ``Secretary''; and

(B) in subsection (b)(3)--

(i) in subparagraph (I), by inserting

``Demonstration'' after ``Cooling''; and

(ii) in subparagraph (L), by inserting

``Energy'' after ``Solar''.

(5) Forms of federal assistance.--Section 7 of the Federal

Nonnuclear Energy Research and Development Act of 1974 (42

U.S.C. 5906) is amended--

(A) by striking ``Administrator'' each place it

appears and inserting ``Secretary''; and

(B) in subsection (a)(4), by striking ``of the

section''.

(6) Demonstrations.--Section 8 of the Federal Nonnuclear

Energy Research and Development Act of 1974 (42 U.S.C. 5907) is

amended--

(A) in subsections (a) through (c), by striking

``Administrator'' each place it appears and inserting

``Secretary'';

(B) in subsection (d)--

(i) in the first sentence of paragraph (1), by

inserting ``of the Energy Research and Development

Administration'' after ``Administrator''; and

(ii) in paragraph (3), by striking

``Administrator'' and inserting ``Secretary''; and

(C) in subsection (f)--

(i) by striking ``Administrator'' each place

it appears and inserting ``Secretary''; and

(ii) in the proviso of the first sentence, by

striking ``Administrator's'' and inserting

``Secretary's''.

(7) Patent policy.--Section 9 of the Federal Nonnuclear

Energy Research and Development Act of 1974 (42 U.S.C. 5908) is

amended--

(A) by striking ``Administration'' each place it

appears and inserting ``Department'';

(B) by striking ``Administrator'' each place it

appears and inserting ``Secretary''; and

(C) in subsection (c)(3), by striking

``Administration's'' and inserting ``Department's''.

(8) Acquisition of essential materials.--Section 12 of the

Federal Nonnuclear Energy Research and Development Act of 1974

(42 U.S.C. 5911) is amended by striking subsection (b) and

inserting the following:

``(b) A rule or order under subsection (a) shall be considered to be

a major rule subject to chapter 8 of title 5, United States Code.''.

(9) Water resource evaluation.--Section 13 of the Federal

Nonnuclear Energy Research and Development Act of 1974 (42

U.S.C. 5912) is amended by striking ``Administrator'' each place

it appears and inserting ``Secretary''.

(10) Authorization of appropriations.--Section 16 of the

Federal Nonnuclear Energy Research and Development Act of 1974

(42 U.S.C. 5915) is amended--

(A) by striking the section heading and inserting

the following: ``authorization of appropriations'';

[[Page 119 STAT. 936]]

(B) by striking ``(a) There may be appropriated to

the Administrator'' and inserting ``There may be

appropriated to the Secretary''; and

(C) by striking subsections (b) and (c).

(11) Central source of nonnuclear energy information.--

Section 17 of the Federal Nonnuclear Energy Research and

Development Act of 1974 (42 U.S.C. 5916) is amended--

(A) by striking ``Administrator'' each place it

appears and inserting ``Secretary'';

(B) in the first sentence, by striking

``Administrator's'';

(C) in the second sentence, by striking ``he'' and

inserting ``the Secretary'';

(D) in the third sentence--

(i) in paragraph (2) of the first proviso, by

striking ``section 1905 or title 18'' and

inserting ``section 1905 of title 18''; and

(ii) in subparagraph (B) of the second

proviso--

(I) by striking ``the Federal Energy

Administration,'';

(II) by striking ``the Federal Power

Commission,'' and inserting ``the

Federal Energy Regulatory Commission'';

and

(III) by striking ``General

Accounting Office'' and inserting

``Government Accountability Office'';

and

(E) in the last sentence, by inserting ``or ranking

minority member'' after ``chairman''.

(12) Energy information, loan guarantees, and financial

support.--Sections 18 through 20 of the Federal Nonnuclear

Energy Research and Development Act of 1974 (42 U.S.C. 5917

through 5920) are repealed.

(c) Stevenson-Wydler Technology Innovation Act of 1980.--Section 20

of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C.

3712) is amended by striking ``and the National Science Foundation'' and

inserting ``, the Secretary of Energy, and the Director of the National

Science Foundation''.

SEC. 1010. <<NOTE: Deadline. Reports.>>  UNIVERSITY COLLABORATION.

Not later than 2 years after the date of enactment of this Act, the

Secretary shall transmit to the Congress a report that examines the

feasibility of promoting collaborations between major universities and

other colleges and universities in grants, contracts, and cooperative

agreements made by the Secretary for energy projects. For purposes of

this section, major universities are schools listed by the Carnegie

Foundation as Doctoral Research Extensive Universities. The Secretary

shall also consider providing incentives to increase the inclusion of

small institutions of higher education, including minority-serving

institutions, in energy grants, contracts, and cooperative agreements.

SEC. 1011. SENSE OF CONGRESS.

It is the sense of Congress that--

(1) the Secretary should develop and implement more

stringent procurement and inventory controls, including controls

on the purchase card program, to prevent waste, fraud, and abuse

of taxpayer funds by employees and contractors of the

Department; and

[[Page 119 STAT. 937]]

(2) the Department's Inspector General should continue to

closely review purchase card purchases and other procurement and

inventory practices at the Department.

TITLE XI--PERSONNEL AND TRAINING

SEC. 1101. <<NOTE: 42 USC 16411.>>  WORKFORCE TRENDS AND TRAINEESHIP

GRANTS.

(a) Definitions.--In this section:

(1) Energy technology industry.--The term ``energy

technology industry'' includes--

(A) a renewable energy industry;

(B) a company that develops or commercializes a

device to increase energy efficiency;

(C) the oil and gas industry;

(D) the nuclear power industry;

(E) the coal industry;

(F) the electric utility industry; and

(G) any other industrial sector, as the Secretary

determines to be appropriate.

(2) Skilled technical personnel.--The term ``skilled

technical personnel'' means--

(A) journey- and apprentice-level workers who are

enrolled in, or have completed, a federally-recognized

or State-recognized apprenticeship program; and

(B) other skilled workers in energy technology

industries, as determined by the Secretary.

(b) Workforce Trends.--

(1) Monitoring.--The Secretary, in consultation with, and

using data collected by, the Secretary of Labor, shall monitor

trends in the workforce of--

(A) skilled technical personnel that support energy

technology industries; and

(B) electric power and transmission engineers.

(2) Report on trends.--Not later than 1 year after the date

of enactment of this Act, the Secretary shall submit to Congress

a report on current trends under paragraph (1), with

recommendations (as appropriate) to meet the future labor

requirements for the energy technology industries.

(3) Report on shortage.--As soon as practicable after the

date on which the Secretary identifies or predicts a significant

national shortage of skilled technical personnel in one or more

energy technology industries, the Secretary shall submit to

Congress a report describing the shortage.

(c) Traineeship Grants for Skilled Technical Personnel.--The

Secretary, in consultation with the Secretary of Labor, may establish

programs in the appropriate offices of the Department under which the

Secretary provides grants to enhance training (including distance

learning) for any workforce category for which a shortage is identified

or predicted under subsection (b)(2).

(d) Authorization of Appropriations.--There is authorized to be

appropriated to carry out this section $20,000,000 for each of fiscal

years 2006 through 2008.

[[Page 119 STAT. 938]]

SEC. 1102. EDUCATIONAL PROGRAMS IN SCIENCE AND MATHEMATICS.

(a) Science Education Enhancement Fund.--Section 3164 of the

Department of Energy Science Education Enhancement Act (42 U.S.C. 7381a)

is amended by adding at the end:

``(c) Science Education Enhancement Fund.--The Secretary shall use

not less than 0.3 percent of the amount made available to the Department

for research, development, demonstration, and commercial application for

fiscal year 2006 and each fiscal year thereafter to carry out activities

authorized by this part.''.

(b) Authorized Education Activities.--Section 3165 of the Department

of Energy Science Education Enhancement Act (42 U.S.C. 7381b) is amended

by adding at the end the following:

``(14) Support competitive events for students under the

supervision of teachers, designed to encourage student interest

and knowledge in science and mathematics.

``(15) Support competitively-awarded, peer-reviewed programs

to promote professional development for mathematics teachers and

science teachers who teach in grades from kindergarten through

grade 12 at Department research and development facilities.

``(16) Support summer internships at Department research and

development facilities, for mathematics teachers and science

teachers who teach in grades from kindergarten through grade 12.

``(17) Sponsor and assist in educational and training

activities identified as critical skills needs for future

workforce development at Department research and development

facilities.''.

(c) Educational Partnerships.--Section 3166(b) of the Department of

Energy Science Education Enhancement Act (42 U.S.C. 7381c(b)) is

amended--

(1) by striking paragraph (1) and inserting the following:

``(1) loaning or transferring equipment to the

institution;'';

(2) in paragraph (5), by striking ``and'' at the end;

(3) in paragraph (6), by striking the period at the end and

inserting ``; and''; and

(4) by adding at the end the following:

``(7) providing funds to educational institutions to hire

personnel to facilitate interactions between local school

systems, Department research and development facilities, and

corporate and governmental entities.''.

(d) Definition of Department Research and Development Facilities.--

Section 3167(3) of the Department of Energy Science Education

Enhancement Act (42 U.S.C. 7381d(3)) is amended by striking ``from the

Office of Science of the Department of Energy'' and inserting ``by the

Department of Energy''.

(e) Study.--

(1) In general.--The Secretary, in consultation with the

Secretary of Education, shall enter into an arrangement with the

National Academy of Public Administration to conduct a study of

the priorities, quality, local and regional flexibility, and

plans for educational programs at Department research and

development facilities.

(2) Inclusion.--The study shall recommend measures that the

Secretary may take to improve Department-wide coordination of

educational, workforce development, and critical skills

development activities.

[[Page 119 STAT. 939]]

(3) Report.--Not later than 2 years after the date of

enactment of this Act, the Secretary shall submit to Congress a

report on the results of the study conducted under this

subsection.

SEC. 1103. TRAINING <<NOTE: 42 USC 16412.>> GUIDELINES FOR NONNUCLEAR

ELECTRIC ENERGY INDUSTRY PERSONNEL.

(a) In General.--The Secretary of Labor, in consultation with the

Secretary and in conjunction with the electric industry and recognized

employee representatives, shall develop model personnel training

guidelines to support the reliability and safety of the nonnuclear

electric system.

(b) Requirements.--The training guidelines under subsection (a)

shall, at a minimum--

(1) include training requirements for workers engaged in the

construction, operation, inspection, or maintenance of

nonnuclear electric generation, transmission, or distribution

systems, including requirements relating to--

(A) competency;

(B) certification; and

(C) assessment, including--

(i) initial and continuous evaluation of

workers;

(ii) recertification procedures; and

(iii) methods for examining or testing the

qualification of an individual who performs a

covered task; and

(2) consolidate training guidelines in existence on the date

on which the guidelines under subsection (a) are developed

relating to the construction, operation, maintenance, and

inspection of nonnuclear electric generation, transmission, and

distribution facilities, such as guidelines established by the

National Electric Safety Code and other industry consensus

standards.

SEC. 1104. <<NOTE: 42 USC 16413.>> NATIONAL CENTER FOR ENERGY MANAGEMENT

AND BUILDING TECHNOLOGIES.

The Secretary shall support the ongoing activities of and explore

opportunities for expansion of the National Center for Energy Management

and Building Technologies to carry out research, education, and training

activities to facilitate the improvement of energy efficiency, indoor

environmental quality, and security of industrial, commercial,

residential, and public buildings.

SEC. 1105. IMPROVED ACCESS TO ENERGY-RELATED SCIENTIFIC AND TECHNICAL

CAREERS.

(a) Science Education Programs.--Section 3164 of the Department of

Energy Science Education Enhancement Act (42 U.S.C. 7381a) (as amended

by section 1102(a)) is amended by adding at the end the following:

``(d) Programs for Students From Under-Represented Groups.--In

carrying out a program under subsection (a), the Secretary shall give

priority to activities that are designed to encourage students from

under-represented 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--

[[Page 119 STAT. 940]]

(1) by redesignating sections 3167 and 3168 <<NOTE: 42 USC

7381d, 7381e.>> as sections 3168 and 3169, respectively; and

(2) by inserting after section 3166 the following:

``SEC. 3167. <<NOTE: 42 USC 7381c-1.>> 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 the 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 the term in section 2 of the Energy Policy

Act of 2005.

``(4) Science facility.--The term `science facility' has the

meaning given the term `single-purpose research facility' in

section 903 of the Energy Policy Act of 2005.

``(5) Tribal college.--The term `tribal college' has the

meaning given the term `tribally controlled college or

university' in section 2(a) of the Tribally Controlled College

Assistance Act of 1978 (25 U.S.C. 1801(a)).

``(b) Education Partnership.--The Secretary shall require the

director of each National Laboratory, and may require the head of any

science facility, to increase the participation of historically Black

colleges or universities, Hispanic-serving institutions, or tribal

colleges in any activity that increases 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 described in subsection (b)

includes--

``(1) collaborative research;

``(2) equipment transfer;

``(3) training activities carried out at a National

Laboratory or science facility; and

``(4) mentoring activities carried out at a National

Laboratory or science facility.

``(d) Report.--Not later than 2 years after the date of enactment of

this subsection, the Secretary shall submit to Congress a report

describing the activities carried out under this section.''.

SEC. 1106. <<NOTE: 42 USC 16414.>> NATIONAL POWER PLANT OPERATIONS

TECHNOLOGY AND EDUCATIONAL CENTER.

(a) Establishment.--The Secretary shall support the establishment of

a National Power Plant Operations Technology and Education Center

(referred to in this section as the ``Center''), to address the need for

training and educating certified operators and technicians for the

electric power industry.

(b) Location of Center.--The Secretary shall support the

establishment of the Center at an institution of higher education that

has--

(1) expertise in providing degree programs in electric power

generation, transmission, and distribution technologies;

(2) expertise in providing onsite and Internet-based

training; and

[[Page 119 STAT. 941]]

(3) demonstrated responsiveness to workforce and training

requirements in the electric power industry.

(c) Training and Continuing Education.--

(1) In general.--The Center shall provide training and

continuing education in electric power generation, transmission,

and distribution technologies and operations.

(2) Location.--The Center shall carry out training and

education activities under paragraph (1)--

(A) at the Center; and

(B) through Internet-based information technologies

that allow for learning at remote sites.

TITLE <<NOTE: Electricity Modernization Act of 2005.>> XII--ELECTRICITY

SEC. 1201. <<NOTE: 42 USC 15801 note.>> SHORT TITLE.

This title may be cited as the ``Electricity Modernization Act of

2005''.

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. <<NOTE: 16 USC 824o.>> 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, including cybersecurity protection, 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,

including a cybersecurity incident, or unanticipated failure of

system elements.

[[Page 119 STAT. 942]]

``(5) The term `Interconnection' means a geographic area in

which the operation of bulk-power system components is

synchronized such that the failure of one or more of such

components may adversely affect the ability of the operators of

other components within the system to maintain reliable

operation of the facilities within their control.

``(6) The term `transmission organization' means a Regional

Transmission Organization, Independent System Operator,

independent transmission provider, or other transmission

organization finally approved by the Commission for the

operation of transmission facilities.

``(7) The term `regional entity' means an entity having

enforcement authority pursuant to subsection (e)(4).

``(8) The term `cybersecurity incident' means a malicious

act or suspicious event that disrupts, or was an attempt to

disrupt, the operation of those programmable electronic devices

and communication networks including hardware, software and data

that are essential to the reliable operation of the bulk power

system.

``(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) <<NOTE: Regulations. Deadline.>> 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 one such ERO if the Commission determines

that such ERO--

``(1) has the ability to develop and enforce, subject to

subsection (e)(2), reliability standards that provide for an

adequate level of reliability of the bulk-power system; 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

[[Page 119 STAT. 943]]

``(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--

[[Page 119 STAT. 944]]

``(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) <<NOTE: Regulations. Contracts.>> 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.

[[Page 119 STAT. 945]]

``(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, except that

the State of New York may establish rules that result in greater

reliability within that State, as long as such action does not result in

lesser reliability outside the State than that provided by the

reliability standards.

``(4) <<NOTE: Deadline. Standards.>> 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) <<NOTE: Establishment.>> Regional Advisory Bodies.--The

Commission shall establish a regional advisory body on the petition of

at least two-thirds of the States within a region that have more than

one-half of their electric load served within the region. A regional

advisory body shall be composed of one member from each participating

State in the region, appointed by the Governor of each State, and may

include representatives of agencies, States, and provinces outside the

United States. A regional advisory body may provide advice to the

Electric Reliability Organization, a regional entity, or the Commission

regarding the governance of an existing or proposed regional entity

within the same region, whether a standard

[[Page 119 STAT. 946]]

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) <<NOTE: 16 USC 824o note.>> 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.

(c) <<NOTE: 16 USC 824o note.>> Access Approvals by Federal

Agencies.--Federal agencies responsible for approving access to electric

transmission or distribution facilities located on lands within the

United States shall, in accordance with applicable law, expedite any

Federal agency approvals that are necessary to allow the owners or

operators of such facilities to comply with any reliability standard,

approved by the Commission under section 215 of the Federal Power Act,

that pertains to vegetation management, electric service restoration, or

resolution of situations that imminently endanger the reliability or

safety of the facilities.

Subtitle B--Transmission Infrastructure Modernization

SEC. 1221. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES.

(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. 216. <<NOTE: 16 USC 824p.>> SITING OF INTERSTATE ELECTRIC

TRANSMISSION FACILITIES.

``(a) <<NOTE: Deadlines.>> Designation of National Interest Electric

Transmission Corridors.--(1) Not later than 1 year after the date of

enactment of this section and every 3 years thereafter, the Secretary of

Energy (referred to in this section as the `Secretary'), in consultation

with affected States, shall conduct a study of electric transmission

congestion.

``(2) <<NOTE: Reports.>> After considering alternatives and

recommendations from interested parties (including an opportunity for

comment from affected States), the Secretary shall issue a report, based

on the 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.

``(3) The Secretary shall conduct the study and issue the report in

consultation with any appropriate regional entity referred to in section

215.

``(4) In determining whether to designate a national interest

electric transmission corridor under paragraph (2), the Secretary may

consider whether--

[[Page 119 STAT. 947]]

``(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 may, after notice and an opportunity for hearing, issue

one or more 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 does not have 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 seeking approval pursuant

to applicable law 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;

``(5) the proposed construction or modification is

consistent with sound national energy policy and will enhance

energy independence; and

``(6) the proposed modification will maximize, to the extent

reasonable and economical, the transmission capabilities of

existing towers or structures.

``(c) Permit Applications.--(1) Permit applications under subsection

(b) shall be made in writing to the Commission.

[[Page 119 STAT. 948]]

``(2) <<NOTE: Regulations.>> The Commission shall issue rules

specifying--

``(A) the form of the application;

``(B) the information to be contained in the application;

and

``(C) the manner of service of notice of the permit

application on 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.--(1) 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 the 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.

``(2) Any right-of-way acquired under paragraph (1) shall be used

exclusively for the construction or modification of electric

transmission facilities within a reasonable period of time after the

acquisition.

``(3) The practice and procedure in any action or proceeding under

this subsection in the district court of the United States shall conform

as nearly as practicable to the practice and procedure in a similar

action or proceeding in the courts of the State in which the property is

located.

``(4) Nothing in this subsection shall be construed to authorize the

use of eminent domain to acquire a right-of-way for any purpose other

than the construction, modification, operation, or maintenance of

electric transmission facilities and related facilities. The right-of-

way cannot be used for any other purpose, and the right-of-way shall

terminate upon the termination of the use for which the right-of-way was

acquired.

``(f) Compensation.--(1) Any right-of-way acquired pursuant to

subsection (e) shall be considered a taking of private property for

which just compensation is due.

``(2) Just compensation shall be an amount equal to the fair market

value (including applicable severance damages) of the property taken on

the date of the exercise of eminent domain authority.

``(g) State Law.--Nothing in this section precludes any person from

constructing or modifying any transmission facility in accordance with

State law.

``(h) Coordination of Federal Authorizations for Transmission

Facilities.--(1) In this subsection:

``(A) The term `Federal authorization' means any

authorization required under Federal law in order to site a

transmission facility.

``(B) The term `Federal authorization' includes such

permits, special use authorizations, certifications, opinions,

or other

[[Page 119 STAT. 949]]

approvals as may be required under Federal law in order to site

a transmission facility.

``(2) The Department of Energy shall act as the lead agency for

purposes of coordinating all applicable Federal authorizations and

related environmental reviews of the facility.

``(3) To the maximum extent practicable under applicable Federal

law, the Secretary shall coordinate the Federal authorization and review

process under this subsection with any Indian tribes, multistate

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.

``(4)(A) As head of the lead agency, the Secretary, in consultation

with agencies responsible for Federal authorizations and, as

appropriate, with Indian tribes, multistate 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.

``(B) <<NOTE: Deadline.>> The Secretary 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--

``(i) within 1 year; or

``(ii) if a requirement of another provision of Federal law

does not permit compliance with clause (i), as soon thereafter

as is practicable.

``(C) <<NOTE: Deadline.>> The Secretary 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 not later than 60 days after the prospective

applicant submits a request for such information concerning--

``(i) the likelihood of approval for a potential facility;

and

``(ii) key issues of concern to the agencies and public.

``(5)(A) As lead agency head, the Secretary, 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.

``(B) The Secretary and the heads of other agencies shall streamline

the review and permitting of transmission 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.

``(C) The document shall include consideration by the relevant

agencies of any applicable criteria or other matters as required under

applicable law.

``(6)(A) If any agency has denied a Federal authorization required

for a transmission 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 President, who

shall, in consultation with the affected agency, review the denial or

failure to take action on the pending application.

``(B) Based on the overall record and in consultation with the

affected agency, the President may--

[[Page 119 STAT. 950]]

``(i) issue the necessary authorization with any appropriate

conditions; or

``(ii) deny the application.

``(C) <<NOTE: President. Deadline.>> The President shall issue a

decision not later than 90 days after the date of the filing of the

appeal.

``(D) <<NOTE: President.>> In making a decision under this

paragraph, the President shall comply with applicable requirements of

Federal law, including any requirements of--

``(i) the National Forest Management Act of 1976 (16 U.S.C.

472a et seq.);

``(ii) the Endangered Species Act of 1973 (16 U.S.C. 1531 et

seq.);

``(iii) the Federal Water Pollution Control Act (33 U.S.C.

1251 et seq.);

``(iv) the National Environmental Policy Act of 1969 (42

U.S.C. 4321 et seq.); and

``(v) the Federal Land Policy and Management Act of 1976 (43

U.S.C. 1701 et seq.).

``(7)(A) <<NOTE: Deadline. Regulations.>> Not later than 18 months

after the date of enactment of this section, the Secretary shall issue

any regulations necessary to implement this subsection.

``(B)(i) <<NOTE: Deadline. Memorandum.>> 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 a memorandum of understanding to ensure the timely and

coordinated review and permitting of electricity transmission

facilities.

``(ii) Interested Indian tribes, multistate entities, and State

agencies may enter the memorandum of understanding.

``(C) 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 regulations and memorandum required under this

paragraph.

``(8)(A) Each Federal land use authorization for an electricity

transmission facility shall be issued--

``(i) for a duration, as determined by the Secretary,

commensurate with the anticipated use of the facility; and

``(ii) with appropriate authority to manage the right-of-way

for reliability and environmental protection.

``(B) On the expiration of the authorization (including an

authorization issued before the date of enactment of this section), the

authorization shall be reviewed for renewal taking fully into account

reliance on such electricity infrastructure, recognizing the importance

of the authorization for public health, safety, and economic welfare and

as a legitimate use of Federal land.

``(9) In exercising the responsibilities under this section, the

Secretary shall consult regularly with--

``(A) the Federal Energy Regulatory Commission;

``(B) electric reliability organizations (including related

regional entities) approved by the Commission; and

``(C) Transmission Organizations approved by the Commission.

``(i) Interstate Compacts.--(1) The consent of Congress is given for

three or more contiguous States to enter into an interstate compact,

subject to approval by Congress, establishing regional transmission

siting agencies to--

[[Page 119 STAT. 951]]

``(A) facilitate siting of future electric energy

transmission facilities within those States; and

``(B) carry out the electric energy transmission siting

responsibilities of those States.

``(2) The Secretary may provide technical assistance to regional

transmission siting agencies established under this subsection.

``(3) The 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).

``(4) The Commission shall have no authority to issue a permit for

the construction or modification of an electric transmission facility

within a State that is a party to a compact, unless the members of the

compact are in disagreement and the Secretary makes, after notice and an

opportunity for a hearing, the finding described in subsection

(b)(1)(C).

``(j) Relationship to Other Laws.--(1) Except as specifically

provided, nothing in this section affects any requirement of an

environmental law of the United States, including the National

Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).

``(2) Subsection (h)(6) shall not apply to any unit of the National

Park System, the National Wildlife Refuge System, the National Wild and

Scenic Rivers System, the National Trails System, the National

Wilderness Preservation System, or a National Monument.

``(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.--Not later than 90 days after the date of enactment of this Act,

the Secretary of the Interior, the Secretary, the Secretary of

Agriculture, and the Chairman of the Council on Environmental Quality

shall submit to Congress a joint report identifying--

(1)(A) 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 of

1976 (43 U.S.C. 1761 et seq.);

(B) the schedule for completing the work;

(C) any impediments to completing the work; and

(D) steps that Congress could take to expedite the process;

(2)(A) the number of pending applications to locate

transmission facilities on Federal land;

(B) key information relating to each such facility;

(C) how long each application has been pending;

(D) the schedule for issuing a timely decision as to each

facility; and

(E) progress in incorporating existing and new such rights-

of-way into relevant land use and resource management plans or

the equivalent of those plans; and

(3)(A) the number of existing transmission and distribution

rights-of-way on Federal land that will come up for renewal

within the following 5-, 10-, and 15-year periods; and

(B) a description of how the Secretaries plan to manage the

renewals.

[[Page 119 STAT. 952]]

SEC. 1222. <<NOTE: 42 USC 16421.>> THIRD-PARTY FINANCE.

(a) Existing Facilities.--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, 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

Transmission Organization (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

Transmission Organization (as defined in the Federal

Power Act) 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) Transmission Organization, if any, or

(B) if such an organization does not exist, regional reliability

organization; and

[[Page 119 STAT. 953]]

(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 2006 through 2015.

SEC. 1223. <<NOTE: 42 USC 16422.>> ADVANCED TRANSMISSION TECHNOLOGIES.

(a) Definition of Advanced Transmission Technology.--In this

section, the term ``advanced transmission technology'' means a

technology that increases the capacity, efficiency, or reliability of an

existing or new transmission facility, including--

(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;

[[Page 119 STAT. 954]]

(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, and

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);

(18) mobile transformers and mobile substations; and

(19) any other technologies the Commission considers

appropriate.

(b) Authority.--In carrying out the Federal Power Act (16 U.S.C.

791a et seq.) and the Public Utility Regulatory Policies Act of 1978 (16

U.S.C. 2601 et seq.), the Commission shall encourage, as appropriate,

the deployment of advanced transmission technologies.

SEC. 1224. <<NOTE: 42 USC 16423.>> ADVANCED POWER SYSTEM TECHNOLOGY

INCENTIVE PROGRAM.

(a) Program.--The Secretary 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, in consultation with the Secretary of Homeland

Security, to be in critical need of secure, reliable,

[[Page 119 STAT. 955]]

rapidly available, high-quality power for critical governmental,

industrial, or commercial applications.

(d) Authorization.--There are authorized to be appropriated to the

Secretary for the purposes of this section, $10,000,000 for each of the

fiscal years 2006 through 2012.

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 (16 U.S.C. 824j) the following:

``SEC. 211A. <<NOTE: 16 USC 824j-1.>> OPEN ACCESS BY UNREGULATED

TRANSMITTING UTILITIES.

``(a) Definition of Unregulated Transmitting Utility.--In 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).

``(b) Transmission Operation 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 the unregulated transmitting

utility provides transmission services to itself and that are

not unduly discriminatory or preferential.

``(c) Exemption.--The Commission shall exempt from any rule or order

under this section any unregulated transmitting utility that--

``(1) sells not more than 4,000,000 megawatt hours of

electricity per year;

``(2) does not own or operate any transmission facilities

that are necessary for operating an interconnected transmission

system (or any portion of the system); or

``(3) meets other criteria the Commission determines to be

in the public interest.

``(d) Local Distribution Facilities.--The requirements of subsection

(b) shall not apply to facilities used in local distribution.

``(e) Exemption Termination.--If the Commission, after an

evidentiary hearing held on 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 (c) unreasonably impairs the continued

reliability of an interconnected transmission system, the Commission

shall revoke the exemption granted to the transmitting utility.

``(f) 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.

[[Page 119 STAT. 956]]

``(g) Remand.--In exercising authority under subsection (b)(1), the

Commission may remand transmission rates to an unregulated transmitting

utility for review and revision if necessary to meet the requirements of

subsection (b).

``(h) Other Requests.--The provision of transmission services under

subsection (b) does not preclude a request for transmission services

under section 211.

``(i) 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.

``(j) 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 a Transmission Organization that is

designated to provide nondiscriminatory transmission access.''.

SEC. 1232. <<NOTE: 42 USC 16431.>> FEDERAL UTILITY PARTICIPATION IN

TRANSMISSION ORGANIZATIONS.

(a) Definitions.--In this section:

(1) Appropriate federal regulatory authority.--The term

``appropriate Federal regulatory authority'' means--

(A) in the case of a Federal power marketing agency,

the Secretary, 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 the Federal power

marketing agency; and

(B) in the case of the Tennessee Valley Authority,

the Board of Directors of the Tennessee Valley

Authority.

(2) Federal power marketing agency.--The term ``Federal

power marketing agency'' has the meaning given the term in

section 3 of the Federal Power Act (16 U.S.C. 796).

(3) Federal utility.--The term ``Federal utility'' means--

(A) a Federal power marketing agency; or

(B) the Tennessee Valley Authority.

(4) Transmission organization.--The term ``Transmission

Organization'' has the meaning given the term in section 3 of

the Federal Power Act (16 U.S.C. 796).

(5) Transmission system.--The term ``transmission system''

means an electric transmission facility owned, leased, or

contracted for by the United States and operated by a Federal

utility.

(b) Transfer.--The appropriate Federal regulatory authority may

enter into a contract, agreement, or other arrangement transferring

control and use of all or part of the transmission system of a Federal

utility to a Transmission Organization.

(c) Contents.--The 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 are necessary or appropriate, including standards

that ensure--

(A) recovery of all of the costs and expenses of the

Federal utility related to the transmission facilities

that

[[Page 119 STAT. 957]]

are the subject of the contract, agreement, or other

arrangement;

(B) consistency with existing contracts and third-

party financing arrangements; and

(C) consistency with the statutory authorities,

obligations, and limitations of the Federal utility;

(2) provisions for monitoring and oversight by the Federal

utility of the Transmission Organization's 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 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 Transmission Organization and terminate the contract,

agreement, or other arrangement in accordance with its terms.

(d) Commission.--Neither this section, actions taken pursuant to

this section, nor any other transaction of a Federal utility

participating in a Transmission Organization shall confer on the

Commission jurisdiction or authority over--

(1) the electric generation assets, electric capacity, or

energy of the Federal utility that the Federal utility is

authorized by law to market; or

(2) the power sales activities of the Federal utility.

(e) 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 the transmission

system of the Federal utility prohibits a transfer of control

and use of the transmission system pursuant to, and subject to,

the requirements of this section.

(2) Other obligations.--This subsection does not--

(A) suspend, or exempt any Federal utility from, any

provision of Federal law in effect on the date of

enactment of this Act, including any requirement or

direction relating to the use of the transmission system

of the Federal utility, environmental protection, fish

and wildlife protection, flood control, navigation,

water delivery, or recreation; or

(B) authorize abrogation of any contract or treaty

obligation.

(3) Conforming amendment.--Section 311 of the Energy and

Water Development Appropriations Act, 2001 (16 U.S.C. 824n) is

repealed.

SEC. 1233. NATIVE LOAD SERVICE OBLIGATION.

(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. 217. <<NOTE: 16 USC 824q.>> NATIVE LOAD SERVICE OBLIGATION.

``(a) Definitions.--In 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 one 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.

[[Page 119 STAT. 958]]

``(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 one or more of the foregoing, or a

corporation that is wholly owned, directly or indirectly, by any

one or more of the foregoing, competent to carry on the business

of developing, transmitting, utilizing, or distributing power.

``(b) <<NOTE: Applicability.>> Meeting Service Obligations.--(1)

Paragraph (2) applies to 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 one 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

one or more contracts or service agreements for firm

transmission service, holds firm transmission rights for

delivery of the output of the generation facilities or the

purchased energy to meet the service obligation.

``(2) Any load-serving entity described in paragraph (1) is entitled

to use the firm transmission rights, or, equivalent tradable or

financial transmission rights, in order to deliver the output or

purchased energy, or the output of other generating facilities or

purchased energy to the extent deliverable using the rights, to the

extent required to meet the service obligation of the load-serving

entity.

``(3)(A) To the extent that all or a portion of the service

obligation covered by the 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.

``(B) Subsequent transfers to another load-serving entity, or back

to the original load-serving entity, shall be entitled to the same

rights.

``(4) The Commission shall exercise the authority of the Commission

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 the service obligations of the load-serving

entities, and enables load-serving entities to secure firm transmission

rights (or equivalent tradable or financial rights) on a long-term basis

for long-term power supply arrangements made, or planned, to meet such

needs.

``(c) Allocation of Transmission Rights.--Nothing in subsections

(b)(1), (b)(2), and (b)(3) of this section shall affect any existing or

future methodology employed by a Transmission Organization for

allocating or auctioning transmission rights if such Transmission

Organization was authorized by the Commission to allocate or auction

financial transmission rights on its system as of January 1, 2005, and

the Commission determines that any future allocation or auction is just,

reasonable and not unduly discriminatory or preferential, provided,

however, that if such a Transmission

[[Page 119 STAT. 959]]

Organization never allocated financial transmission rights on its system

that pertained to a period before January 1, 2005, with respect to any

application by such Transmission Organization that would change its

methodology the Commission shall exercise its authority in a manner

consistent with the Act and that takes into account the policies

expressed in subsections (b)(1), (b)(2), and (b)(3) as applied to firm

transmission rights held by a load-serving entity as of January 1, 2005,

to the extent the associated generation ownership or power purchase

arrangements remain in effect.

``(d) Certain Transmission Rights.--The Commission may exercise

authority under this Act to make transmission rights not used to meet an

obligation covered by subsection (b) available to other entities in a

manner determined by the Commission to be just, reasonable, and not

unduly discriminatory or preferential.

``(e) Obligation to Build.--Nothing in this Act relieves a load-

serving entity from any obligation under State or local law to build

transmission or distribution facilities adequate to meet the service

obligations of the load-serving entity.

``(f) 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. If an ISO in the Western Interconnection had allocated

financial transmission rights prior to the date of enactment of this

section but had not done so with respect to one or more load-serving

entities' firm transmission rights held under contracts to which the

preceding sentence applies (or held by reason of ownership or future

ownership of transmission facilities), such load-serving entities may

not be required, without their consent, to convert such firm

transmission rights to tradable or financial rights, except where the

load-serving entity has voluntarily joined the ISO as a participating

transmission owner (or its successor) in accordance with the ISO tariff.

``(g) 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 the facilities, protections for transmission

service comparable to those provided to load-serving entities pursuant

to this section.

``(h) ERCOT.--This section shall not apply within the area referred

to in section 212(k)(2)(A).

``(i) Jurisdiction.--This section does not authorize the Commission

to take any action not otherwise within the jurisdiction of the

Commission.

``(j) TVA Area.--(1) Subject to paragraphs (2) and (3), for purposes

of subsection (b)(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 considered to hold firm transmission rights for the

transmission of the power provided.

``(2) Nothing in this subsection affects the requirements of section

212(j).

``(3) The Commission shall not issue an order on the basis of this

subsection that is contrary to the purposes of section 212(j).

``(k) Effect of Exercising Rights.--An entity that to the extent

required to meet its service obligations exercises rights

[[Page 119 STAT. 960]]

described in subsection (b) shall not be considered by such action as

engaging in undue discrimination or preference under this Act.''.

(b) <<NOTE: Deadline. 16 USC 824q note.>> FERC Rulemaking on Long-

Term Transmission Rights in Organized Markets.--Within 1 year after the

date of enactment of this section and after notice and an opportunity

for comment, the Commission shall by rule or order, implement section

217(b)(4) of the Federal Power Act in Transmission Organizations, as

defined by that Act with organized electricity markets.

SEC. 1234. <<NOTE: 42 USC 16432.>> STUDY ON THE BENEFITS OF ECONOMIC

DISPATCH.

(a) Study.--The Secretary, 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 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.

SEC. 1235. PROTECTION OF TRANSMISSION CONTRACTS IN THE PACIFIC

NORTHWEST.

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. <<NOTE: 16 USC 824r.>> PROTECTION OF TRANSMISSION CONTRACTS

IN THE PACIFIC NORTHWEST.

``(a) Definition of Electric Utility or Person.--In this section,

the term `electric utility or person' means an electric utility or

person that--

``(1) as of the date of enactment of the Energy Policy Act

of 2005 holds firm transmission rights pursuant to contract or

by reason of ownership of transmission facilities; and

``(2) is located--

``(A) in the Pacific Northwest, as that region is

defined in section 3 of the Pacific Northwest Electric

Power Planning and Conservation Act (16 U.S.C. 839a); or

``(B) in that portion of a State included in the

geographic area proposed for a regional transmission

organization in Commission Docket Number RT01-35 on the

date on which that docket was opened.

``(b) Protection of Transmission Contracts.--Nothing in this Act

confers on the Commission the authority to require an electric utility

or person to convert to tradable or financial rights--

[[Page 119 STAT. 961]]

``(1) firm transmission rights described in subsection (a);

or

``(2) firm transmission rights obtained by exercising

contract or tariff rights associated with the firm transmission

rights described in subsection (a).''.

SEC. 1236. SENSE OF CONGRESS REGARDING LOCATIONAL INSTALLED CAPACITY

MECHANISM.

(a) Findings.--Congress finds that--

(1) in regard to a proposal to develop and implement a

specific type of locational installed capacity mechanism in New

England pending before the Federal Energy Regulatory Commission;

and

(2) the Governors of the States have objected to the

proposed mechanism, arguing that the mechanism--

(A) would not provide adequate assurance that

necessary electric generation capacity or reliability

will be provided; and

(B) would impose a high cost on consumers and have a

significant negative economic impact.

(b) Sense of Congress.--Congress--

(1) notes the concerns of the New England States to the

proposed mechanism; and

(2) declares that it is the sense of Congress that the

Federal Energy Regulatory Commission should carefully consider

the States' objections.

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. 219. <<NOTE: 16 USC 824s.>> TRANSMISSION INFRASTRUCTURE

INVESTMENT.

``(a) <<NOTE: Deadline.>> Rulemaking Requirement.--Not later than 1

year after the date of enactment of this section, the Commission shall

establish, by rule, incentive-based (including performance-based) rate

treatments for the transmission of electric energy in interstate

commerce by public utilities for the purpose of benefitting consumers by

ensuring reliability and reducing the cost of delivered power by

reducing transmission congestion.

``(b) Contents.--The 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 all facilities for the transmission of electric

energy in interstate commerce, regardless of the ownership of

the facilities;

``(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

the facilities; and

``(4) allow recovery of--

[[Page 119 STAT. 962]]

``(A) all prudently incurred costs necessary to

comply with mandatory reliability standards issued

pursuant to section 215; and

``(B) all prudently incurred costs related to

transmission infrastructure development pursuant to

section 216.

``(c) Incentives.--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

Transmission Organization. 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 Transmission Organization that

provides transmission service to such utility.

``(d) Just and Reasonable Rates.--All rates approved under the rules

adopted pursuant to this section, including any revisions to the rules,

are subject to the requirements of sections 205 and 206 that all rates,

charges, terms, and conditions be just and reasonable and not unduly

discriminatory or preferential.''.

SEC. 1242. <<NOTE: 42 USC 16441.>> FUNDING NEW INTERCONNECTION AND

TRANSMISSION UPGRADES.

The Commission may approve a participant funding plan that allocates

costs related to transmission upgrades or new generator interconnection,

without regard to whether an applicant is a member of a Commission-

approved Transmission Organization, if the plan results in rates that--

(1) are just and reasonable;

(2) are not unduly discriminatory or preferential; and

(3) are otherwise consistent with sections 205 and 206 of

the Federal Power Act (16 U.S.C. 824d, 824e).

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.''.

[[Page 119 STAT. 963]]

(b) Compliance.--

(1) <<NOTE: Deadlines.>> 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 Utility Regulatory

Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding at the end

the following:

``(14) <<NOTE: Deadline.>> 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

[[Page 119 STAT. 964]]

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;

``(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; and

``(iv) credits for consumers with large loads who

enter into pre-established peak load reduction

agreements that reduce a utility's planned capacity

obligations.

``(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) <<NOTE: Deadline.>> 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).''.

[[Page 119 STAT. 965]]

(b) State Investigation of Demand Response and Time-Based

Metering.--Section 115 of the Public Utility 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 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) <<NOTE: Deadline. Reports.>> not later than 180 days

after the date of enactment of the Energy Policy Act of 2005,

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, 2007.''.

(e) <<NOTE: 16 USC 2642 note.>> 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 shall provide

technical assistance to States and regional organizations formed

by two or more States to assist them in--

(A) identifying the areas with the greatest demand

response potential;

[[Page 119 STAT. 966]]

(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 2005, 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;

(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; and

(F) regulatory barriers to improve customer

participation in demand response, peak reduction and

critical period pricing programs.

(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, the deployment of such technology and devices

that enable electricity customers to participate in such pricing and

demand response systems shall be facilitated, and unnecessary barriers

to demand response participation in energy, capacity and ancillary

service markets shall be eliminated. 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) <<NOTE: Deadlines.>> 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),

[[Page 119 STAT. 967]]

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

[[Page 119 STAT. 968]]

``(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 CFR

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 subparagraph (A), (B), or (C) of

paragraph (1) of this subsection have been

met. <<NOTE: Notice. Deadline.>> 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 subparagraph (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

[[Page 119 STAT. 969]]

why the conditions set forth in subparagraph (A), (B), or (C) of

paragraph (1) of this subsection are no longer

met. <<NOTE: Notice. Deadline.>> 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) <<NOTE: Deadline.>> 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 CFR 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

[[Page 119 STAT. 970]]

``(iii) continuing progress in the development of efficient

electric energy generating technology.

``(B) <<NOTE: Applicability.>> The rule issued pursuant to paragraph

(1)(A) of this subsection 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 subsection

(m)(2)(A), qualifying facility status shall be determined in accordance

with the rules and regulations of this Act.

``(2) <<NOTE: Applicability.>> 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 CFR 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;''.

SEC. 1254. INTERCONNECTION.

(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:

``(15) Interconnection.--Each electric utility shall make

available, upon request, interconnection service to any electric

consumer that the electric utility serves. For purposes of this

paragraph, the term `interconnection service' means service to

an electric consumer under which an on-site generating facility

on the consumer's premises shall be connected to the local

distribution facilities. Interconnection services shall be

offered based upon the standards developed by the Institute of

Electrical and Electronics Engineers: IEEE Standard 1547 for

Interconnecting Distributed Resources with Electric Power

Systems, as they may be amended from time to time. In addition,

agreements and procedures shall be established whereby the

services are offered shall promote current best practices of

interconnection for distributed generation, including but not

limited to practices stipulated in model codes adopted by

[[Page 119 STAT. 971]]

associations of state regulatory agencies. All such agreements

and procedures shall be just and reasonable, and not unduly

discriminatory or preferential.''.

(b) Compliance.--

(1) <<NOTE: Deadlines.>> 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:

``(5)(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 utility shall commence the consideration referred

to in section 111, or set a hearing date for consideration, with

respect to the standard established by paragraph (15) of section

111(d).

``(B) Not later than two years after the date of the

enactment of the 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 paragraph (15) of section 111(d).''.

(2) Failure to comply.--Section 112(d) 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 (15), 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 paragraph

(15).''.

(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:

``(f) Prior State Actions.--Subsections (b) and (c) of this section

shall not apply to the standard established by paragraph (15) 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 paragraph (15) of section 111(d), the reference

contained in this subsection to the date of enactment of

the Act shall be deemed to be a reference to the date of

enactment of paragraph (15).''.

[[Page 119 STAT. 972]]

Subtitle <<NOTE: Public Utility Holding Company Act of 2005.>> F--Repeal

of PUHCA

SEC. 1261. <<NOTE: 42 USC 15801 note.>> SHORT TITLE.

This subtitle may be cited as the ``Public Utility Holding Company

Act of 2005''.

SEC. 1262. <<NOTE: 42 USC 16451.>> 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.--

(A) In general.--The term ``holding company''

means--

(i) 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

(ii) any person, determined by the Commission,

after notice and opportunity for hearing, to

exercise directly or indirectly (either alone or

pursuant to an arrangement or understanding with

one or more persons) such a controlling influence

over the management or policies of any public-

utility company or holding company as to make it

necessary or appropriate for the rate protection

of utility customers with respect to rates that

such person be subject to the obligations,

[[Page 119 STAT. 973]]

duties, and liabilities imposed by this subtitle

upon holding companies.

(B) Exclusions.--The term ``holding company'' shall

not include--

(i) a bank, savings association, or trust

company, or their operating subsidiaries that own,

control, or hold, with the power to vote, public

utility or public utility holding company

securities so long as the securities are--

(I) held as collateral for a loan;

(II) held in the ordinary course of

business as a fiduciary; or

(III) acquired solely for purposes

of liquidation and in connection with a

loan previously contracted for and owned

beneficially for a period of not more

than two years; or

(ii) a broker or dealer that owns, controls,

or holds with the power to vote public utility or

public utility holding company securities so long

as the securities are--

(I) not beneficially owned by the

broker or dealer and are subject to any

voting instructions which may be given

by customers or their assigns; or

(II) acquired within 12 months in

the ordinary course of business as a

broker, dealer, or underwriter with the

bona fide intention of effecting

distribution of the specific securities

so acquired.

(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.

[[Page 119 STAT. 974]]

(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 one or more other persons) so as to

make it necessary for the rate protection of utility

customers with respect to rates that such person be

subject to the obligations, duties, and liabilities

imposed by this subtitle upon subsidiary companies of

holding companies.

(17) 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. <<NOTE: 42 USC 16452.>> 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.

[[Page 119 STAT. 975]]

SEC. 1265. <<NOTE: 42 USC 16453.>> 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 one or more

qualifying facilities under the Public Utility Regulatory Policies Act

of 1978 (16 U.S.C. 2601 et seq.).

(c) Confidentiality of Information.--The production of books,

accounts, memoranda, and other records under subsection (a) shall be

subject to such terms and conditions as may be necessary and appropriate

to safeguard against unwarranted disclosure to the public of any trade

secrets or sensitive commercial information.

(d) Effect on State Law.--Nothing in this section shall preempt

applicable State law concerning the provision of books, accounts,

memoranda, and other records, or in any way limit the rights of any

State to obtain books, accounts, memoranda, and other records under any

other Federal law, contract, or otherwise.

(e) Court Jurisdiction.--Any United States district court located in

the State in which the State commission referred to in subsection (a) is

located shall have jurisdiction to enforce compliance with this section.

SEC. 1266. <<NOTE: 42 USC 16454.>> EXEMPTION AUTHORITY.

(a) <<NOTE: Deadline.>> 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 one or more--

(1) qualifying facilities under the Public Utility

Regulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.);

(2) exempt wholesale generators; or

(3) foreign utility companies.

(b) Other Authority.--The Commission shall exempt a person or

transaction from the requirements of section 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.

[[Page 119 STAT. 976]]

SEC. 1267. <<NOTE: 42 USC 16455.>> 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. <<NOTE: 42 USC 16456.>> 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. <<NOTE: 42 USC 16457.>> 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. <<NOTE: 42 USC 16458.>> 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. <<NOTE: 42 USC 16459.>> 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.).

(c) Tax Treatment.--Tax treatment under section 1081 of the Internal

Revenue Code of 1986 as a result of transactions ordered in compliance

with the Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et

seq.) shall not be affected in any manner due to the repeal of that Act

and the enactment of the Public Utility Holding Company Act of 2005.

[[Page 119 STAT. 977]]

SEC. 1272. <<NOTE: Deadline. 42 USC 16460.>> IMPLEMENTATION.

Not later than 4 months after the date of enactment of this

subtitle, the Commission shall--

(1) <<NOTE: Regulations.>> 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 <<NOTE: Records. 42 USC 16461.>> 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. <<NOTE: 42 USC 16451 note.>> EFFECTIVE DATE.

(a) In General.--Except for section 1272 (relating to

implementation), this subtitle shall take effect 6 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. <<NOTE: 42 USC 16462.>> SERVICE ALLOCATION.

(a) Definition of Public Utility.--In this section, the term

``public utility'' has the meaning given the term in section 201(e) of

the Federal Power Act (16 U.S.C. 824(e)).

(b) 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.

(c) Effect on Federal and State Law.--Nothing in this section shall

affect the authority of the Commission or a State commission under other

applicable law.

(d) <<NOTE: Deadline.>> Rules.--Not later than 4 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.

[[Page 119 STAT. 978]]

SEC. 1276. <<NOTE: 42 USC 16463.>> 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

``2005''.

(2) Section 214 of the Federal Power Act (16 U.S.C. 824m) is amended

by striking ``1935'' and inserting ``2005''.

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

SEC. 1281. ELECTRICITY MARKET TRANSPARENCY.

Part II of the Federal Power Act is amended by adding at the end the

following:

``SEC. 220. <<NOTE: 16 USC 824t.>> ELECTRICITY MARKET TRANSPARENCY

RULES.

``(a)(1) The Commission is directed to facilitate price transparency

in markets for the sale and transmission of electric energy in

interstate commerce, having due regard for the public interest, the

integrity of those markets, fair competition, and the protection of

consumers.

``(2) The Commission may prescribe such rules as the Commission

determines necessary and appropriate to carry out the purposes of this

section. The rules shall provide for the dissemination, on a timely

basis, of information about the availability and prices of wholesale

electric energy and transmission service to the Commission, State

commissions, buyers and sellers of wholesale electric energy, users of

transmission services, and the public.

``(3) The Commission may--

``(A) obtain the information described in paragraph (2) from

any market participant; and

``(B) rely on entities other than the Commission to receive

and make public the information, subject to the disclosure rules

in subsection (b).

``(4) In carrying out this section, the Commission shall consider

the degree of price transparency provided by existing price publishers

and providers of trade processing services, and shall rely on such

publishers and services to the maximum extent possible. The Commission

may establish an electronic information system if it determines that

existing price publications are not adequately providing price discovery

or market transparency. Nothing in this section, however, shall affect

any electronic information filing requirements in effect under this Act

as of the date of enactment of this section.

``(b)(1) Rules described in subsection (a)(2), if adopted, shall

exempt from disclosure information the Commission determines would, if

disclosed, be detrimental to the operation of an effective market or

jeopardize system security.

``(2) In determining the information to be made available under this

section and time to make the information available, the Commission shall

seek to ensure that consumers and competitive

[[Page 119 STAT. 979]]

markets are protected from the adverse effects of potential collusion or

other anticompetitive behaviors that can be facilitated by untimely

public disclosure of transaction-specific information.

``(c)(1) <<NOTE: Deadline.>> Within 180 days of enactment of this

section, the Commission shall conclude a memorandum of understanding

with the Commodity Futures Trading Commission relating to information

sharing, which shall include, among other things, provisions ensuring

that information requests to markets within the respective jurisdiction

of each agency are properly coordinated to minimize duplicative

information requests, and provisions regarding the treatment of

proprietary trading information.

``(2) Nothing in this section may be construed to limit or affect

the exclusive jurisdiction of the Commodity Futures Trading Commission

under the Commodity Exchange Act (7 U.S.C. 1 et seq.).

``(d) The Commission shall not require entities who have a de

minimis market presence to comply with the reporting requirements of

this section.

``(e)(1) Except as provided in paragraph (2), no person shall be

subject to any civil penalty under this section with respect to any

violation occurring more than 3 years before the date on which the

person is provided notice of the proposed penalty under section 316A.

``(2) Paragraph (1) shall not apply in any case in which the

Commission finds that a seller that has entered into a contract for the

sale of electric energy at wholesale or transmission service subject to

the jurisdiction of the Commission has engaged in fraudulent market

manipulation activities materially affecting the contract in violation

of section 222.

``(f) This section shall not apply to a transaction for the purchase

or sale of wholesale electric energy or transmission services within the

area described in section 212(k)(2)(A).''.

SEC. 1282. FALSE STATEMENTS.

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. <<NOTE: 16 USC 824u.>> PROHIBITION ON FILING FALSE

INFORMATION.

``No 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 the 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 the Federal agency.''.

SEC. 1283. 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. 222. <<NOTE: 16 USC 824v.>> PROHIBITION OF ENERGY MARKET

MANIPULATION.

``(a) In General.--It shall be unlawful for any entity (including an

entity described in section 201(f)), directly or indirectly, to use or

employ, in connection with the purchase or sale of electric energy or

the purchase or sale of transmission services subject to the

jurisdiction of the Commission, any manipulative or deceptive device or

contrivance (as those terms are used in section 10(b) of the Securities

Exchange Act of 1934 (15 U.S.C. 78j(b))), in contravention

[[Page 119 STAT. 980]]

of such rules and regulations as the Commission may prescribe as

necessary or appropriate in the public interest or for the protection of

electric ratepayers.

``(b) No Private Right of Action.--Nothing in this section shall be

construed to create a private right of action.''.

SEC. 1284. ENFORCEMENT.

(a) Complaints.--Section 306 of the Federal Power Act (16 U.S.C.

825e) is amended--

(1) by inserting ``electric utility,'' after ``Any

person,''; and

(2) by inserting ``, transmitting utility,'' after

``licensee'' each place it appears.

(b) Investigations.--Section 307(a) of the Federal Power Act (16

U.S.C. 825f(a)) is amended--

(1) by inserting ``, electric utility, transmitting utility,

or other entity'' after ``person'' each place it appears; and

(2) in the first sentence, by inserting before the period at

the end 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''.

(c) Review of Commission Orders.--Section 313(a) of the Federal

Power Act (16 U.S.C. 825l) 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''.

(d) Criminal Penalties.--Section 316 of the Federal Power Act (16

U.S.C. 825o) 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'';

(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--

(1) by striking ``section 211, 212, 213, or 214'' each place

it appears and inserting ``part II''; and

(2) in subsection (b), by striking ``$10,000'' and inserting

``$1,000,000''.

SEC. 1285. 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

[[Page 119 STAT. 981]]

why it has failed to do so and shall state its best estimate as

to when it reasonably expects to make such decision.''.

SEC. 1286. REFUND AUTHORITY.

Section 206 of the Federal Power Act (16 U.S.C. 824e) is amended by

adding at the end the following:

``(e)(1) In this subsection:

``(A) 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).

``(B) The term `applicable Commission rule' means a

Commission rule applicable to sales at wholesale by public

utilities that the Commission determines after notice and

comment should also be applicable to entities subject to this

subsection.

``(2) If an entity described in section 201(f) voluntarily makes a

short-term sale of electric energy through an organized market in which

the rates for the sale are established by Commission-approved tariff

(rather than by contract) and the sale violates the terms of the tariff

or applicable Commission rules in effect at the time of the sale, the

entity shall be subject to the refund authority of the Commission under

this section with respect to the violation.

``(3) This section shall not apply to--

``(A) any entity that sells in total (including affiliates

of the entity) less than 8,000,000 megawatt hours of electricity

per year; or

``(B) an electric cooperative.

``(4)(A) The Commission shall have refund authority under paragraph

(2) with respect to a voluntary short term sale of electric energy by

the Bonneville Power Administration only if the sale is at an unjust and

unreasonable rate.

``(B) The Commission may order a refund under subparagraph (A) only

for short-term sales made by the Bonneville Power Administration 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 the Bonneville Power Administration.

``(C) In the case of any Federal power marketing agency or the

Tennessee Valley Authority, the Commission shall not assert or exercise

any regulatory authority or power under paragraph (2) other than the

ordering of refunds to achieve a just and reasonable rate.''.

SEC. 1287. <<NOTE: 42 USC 16471.>> 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.

[[Page 119 STAT. 982]]

(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).

SEC. 1288. AUTHORITY OF COURT TO PROHIBIT INDIVIDUALS FROM SERVING AS

OFFICERS, DIRECTORS, AND ENERGY TRADERS.

Section 314 of the Federal Power Act (16 U.S.C. 825m) is amended by

adding at the end the following:

``(d) In any proceedings under subsection (a), the court may

prohibit, conditionally or unconditionally, and permanently or for such

period of time as the court determines, any individual who is engaged or

has engaged in practices constituting a violation of section 221 (and

related rules and regulations) from--

``(1) acting as an officer or director of an electric

utility; or

``(2) engaging in the business of purchasing or selling--

``(A) electric energy; or

``(B) transmission services subject to the

jurisdiction of the Commission.''.

SEC. 1289. MERGER REVIEW REFORM.

(a) In General.--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;

``(C) purchase, acquire, or take any security with a

value in excess of $10,000,000 of any other public

utility; or

``(D) purchase, lease, or otherwise acquire an

existing generation facility--

``(i) that has a value in excess of

$10,000,000; and

``(ii) that is used for interstate wholesale

sales and over which the Commission has

jurisdiction for ratemaking purposes.

``(2) No holding company in a holding company system that

includes a transmitting utility or an electric utility shall

purchase, acquire, or take any security with a value in excess

[[Page 119 STAT. 983]]

of $10,000,000 of, or, by any means whatsoever, directly or

indirectly, merge or consolidate with, a transmitting utility,

an electric utility company, or a holding company in a holding

company system that includes a transmitting utility, or an

electric utility company, with a value in excess of $10,000,000

without first having secured an order of the Commission

authorizing it to do so.

``(3) <<NOTE: Notice.>> 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, and will not result in cross-subsidization of a non-

utility associate company or the pledge or encumbrance of

utility assets for the benefit of an associate company, unless

the Commission determines that the cross-subsidization, pledge,

or encumbrance will be consistent with the public interest.

``(5) <<NOTE: Regulations. Procedures.>> 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. <<NOTE: Deadlines.>> 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 2005.''.

(b) <<NOTE: 16 USC 824b note.>> Effective Date.--The amendments made

by this section shall take effect 6 months after the date of enactment

of this Act.

(c) Transition Provision.--The amendments made by subsection (a)

shall not apply to any application under section 203 of the Federal

Power Act (16 U.S.C. 824b) that was filed on or before the date of

enactment of this Act.

SEC. 1290. RELIEF FOR EXTRAORDINARY VIOLATIONS.

(a) Application.--This section applies to any contract entered into

the Western Interconnection prior to June 20, 2001, with a seller of

wholesale electricity that the Commission has--

(1) found to have manipulated the electricity market

resulting in unjust and unreasonable rates; and

[[Page 119 STAT. 984]]

(2) revoked the seller's authority to sell any electricity

at market-based rates.

(b) Relief.--Notwithstanding section 222 of the Federal Power Act

(as added by section 1262), any provision of title 11, United States

Code, or any other provision of law, in the case of a contract described

in subsection (a), the Commission shall have exclusive jurisdiction

under the Federal Power Act (16 U.S.C. 791a et seq.) to determine

whether a requirement to make termination payments for power not

delivered by the seller, or any successor in interest of the seller, is

not permitted under a rate schedule (or contract under such a schedule)

or is otherwise unlawful on the grounds that the contract is unjust and

unreasonable or contrary to the public interest.

(c) Applicability.--This section applies to any proceeding pending

on the date of enactment of this section involving a seller described in

subsection (a) in which there is not a final, nonappealable order by the

Commission or any other jurisdiction determining the respective rights

of the seller.

Subtitle H--Definitions

SEC. 1291. DEFINITIONS.

(a) <<NOTE: 42 USC 16481.>> Commission.--In this title, the term

``Commission'' means the Federal Energy Regulatory Commission.

(b) Amendment.--Section 3 of the Federal Power Act (16 U.S.C. 796)

is amended--

(1) by striking paragraphs (22) and (23) and inserting the

following:

``(22) Electric utility.--(A) The term `electric utility'

means a person or Federal or State agency (including an entity

described in section 201(f)) that sells electric energy.

``(B) The term `electric utility' includes the Tennessee

Valley Authority and each Federal power marketing

administration.

``(23) Transmitting utility.--The term `transmitting

utility' means an entity (including an entity described in

section 201(f)) that owns, operates, or controls facilities used

for the transmission of electric energy--

``(A) in interstate commerce;

``(B) for the sale of electric energy at

wholesale.''; and

(2) 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--

``(A) to exercise operational or functional control

of facilities used for the transmission of electric

energy in interstate commerce; and

``(B) to ensure nondiscriminatory access to the

facilities.

``(28) ISO.--The term `Independent System Operator' or `ISO'

means an entity approved by the Commission--

``(A) to exercise operational or functional control

of facilities used for the transmission of electric

energy in interstate commerce; and

``(B) to ensure nondiscriminatory access to the

facilities.

[[Page 119 STAT. 985]]

``(29) Transmission organization.--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.''.

(c) Applicability.--Section 201(f) of the Federal Power Act (16

U.S.C. 824(f)) is amended by striking ``political subdivision of a

state,'' and inserting ``political subdivision of a State, an electric

cooperative that receives 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 I--Technical and Conforming Amendments

SEC. 1295. CONFORMING AMENDMENTS.

(a) Section 201 of the Federal Power Act (16 U.S.C. 824) is

amended--

(1) in subsection (b)(2)--

(A) in the first sentence--

(i) by striking ``The'' and inserting

``Notwithstanding section 201(f), the''; and

(ii) 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'';

and

(B) in the second sentence--

(i) by inserting ``or rule'' after ``any

order''; and

(ii) by striking ``210 or 211'' and inserting

``203(a)(2), 206(e), 210, 211, 211A, 212, 215,

216, 217, 218, 219, 220, 221, or 222''; and

(2) in subsection (e), by striking ``210, 211, or 212'' and

inserting ``206(e), 206(f), 210, 211, 211A, 212, 215, 216, 217,

218, 219, 220, 221, or 222''.

(b) Section 206 of the Federal Power Act (16 U.S.C. 824e) is

amended--

(1) in the first sentence of subsection (a), by striking

``hearing had'' and inserting ``hearing held''; and

(2) in the seventh sentence of subsection (b), by striking

``the public utility to make''.

(c) Section 211 of the Federal Power Act (16 U.S.C. 824j) is

amended--

(1) in subsection (c)--

(A) by striking ``(2)'';

(B) by striking ``(A)'' and inserting ``(1)''

(C) by striking ``(B)'' and inserting ``(2)''; and

(D) by striking ``termination of modification'' and

inserting ``termination or modification''; and

(2) in the second sentence of subsection (d)(1), by striking

``electric utility'' the second place it appears and inserting

``transmitting utility''.

(d) Section 315(c) of the Federal Power Act (16 U.S.C. 825n(c)) is

amended by striking ``subsection'' and inserting ``section''.

[[Page 119 STAT. 986]]

Subtitle J--Economic Dispatch

SEC. 1298. ECONOMIC DISPATCH.

Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended

by adding at the end the following:

``SEC. 223. <<NOTE: 16 USC 824w.>> JOINT BOARDS ON ECONOMIC DISPATCH.

``(a) <<NOTE: Establishment.>> In General.--The Commission shall

convene joint boards on a regional basis pursuant to section 209 of this

Act to study the issue of security constrained economic dispatch for the

various market regions. The Commission shall designate the appropriate

regions to be covered by each such joint board for purposes of this

section.

``(b) Membership.--The Commission shall request each State to

nominate a representative for the appropriate regional joint board, and

shall designate a member of the Commission to chair and participate as a

member of each such board.

``(c) Powers.--The sole authority of each joint board convened under

this section shall be to consider issues relevant to what constitutes

`security constrained economic dispatch' and how such a mode of

operating an electric energy system affects or enhances the reliability

and affordability of service to customers in the region concerned and to

make recommendations to the Commission regarding such issues.

``(d) Report to the Congress.--Within 1 year after enactment of this

section, the Commission shall issue a report and submit such report to

the Congress regarding the recommendations of the joint boards under

this section and the Commission may consolidate the recommendations of

more than one such regional joint board, including any consensus

recommendations for statutory or regulatory reform.''.

TITLE <<NOTE: Energy Tax Incentives Act of 2005.>> XIII--ENERGY POLICY

TAX INCENTIVES

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

(a) <<NOTE: 26 USC 1 note.>> Short Title.--This title may be cited

as the ``Energy Tax Incentives Act of 2005''.

(b) <<NOTE: 26 USC 1 et seq.>> 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--Electricity Infrastructure

SEC. 1301. EXTENSION AND MODIFICATION OF RENEWABLE ELECTRICITY

PRODUCTION CREDIT.

(a) <<NOTE: 26 USC 45.>> 2-Year Extension for Certain Facilities.--

Section 45(d) (relating to qualified facilities) is amended--

(1) by striking ``January 1, 2006'' each place it appears in

paragraphs (1), (2), (3), (5), (6), and (7) and inserting

``January 1, 2008'', and

[[Page 119 STAT. 987]]

(2) by striking ``January 1, 2006'' in paragraph (4) and

inserting ``January 1, 2008 (January 1, 2006, in the case of a

facility using solar energy)''.

(b) <<NOTE: 26 USC 45.>> Increase in Credit Period.--Section

45(b)(4)(B) (relating to credit period) is amended--

(1) by inserting ``or clause (iii)'' after ``clause (ii)''

in clause (i), and

(2) by adding at the end the following:

``(iii) Termination.--Clause (i) shall not

apply to any facility placed in service after the

date of the enactment of this clause.''.

(c) Expansion of Qualified Resources to Certain Hydropower.--

(1) In general.--Section 45(c)(1) (defining qualified energy

resources) is amended by striking ``and'' at the end of

subparagraph (F), by striking the period at the end of

subparagraph (G) and inserting ``, and'', and by adding at the

end the following new subparagraph:

``(H) qualified hydropower production.''.

(2) Credit rate.--Section 45(b)(4)(A) (relating to credit

rate) is amended by striking ``or (7)'' and inserting ``(7), or

(9)''.

(3) Definition of resources.--Section 45(c) (relating to

qualified energy resources and refined coal) is amended by

adding at the end the following new paragraph:

``(8) Qualified hydropower production.--

``(A) In general.--The term `qualified hydropower

production' means--

``(i) in the case of any hydroelectric dam

which was placed in service on or before the date

of the enactment of this paragraph, the

incremental hydropower production for the taxable

year, and

``(ii) in the case of any nonhydroelectric dam

described in subparagraph (C), the hydropower

production from the facility for the taxable year.

``(B) Determination of incremental hydropower

production.--

``(i) In general.--For purposes of

subparagraph (A), incremental hydropower

production for any taxable year shall be equal to

the percentage of average annual hydropower

production at the facility attributable to the

efficiency improvements or additions of capacity

placed in service after the date of the enactment

of this paragraph, determined by using the same

water flow information used to determine an

historic average annual hydropower production

baseline for such facility. Such percentage and

baseline shall be certified by the Federal Energy

Regulatory Commission.

``(ii) Operational changes disregarded.--For

purposes of clause (i), the determination of

incremental hydropower production shall not be

based on any operational changes at such facility

not directly associated with the efficiency

improvements or additions of capacity.

``(C) Nonhydroelectric dam.--For purposes of

subparagraph (A), a facility is described in this

subparagraph if--

[[Page 119 STAT. 988]]

``(i) the facility is licensed by the Federal

Energy Regulatory Commission and meets all other

applicable environmental, licensing, and

regulatory requirements,

``(ii) the facility was placed in service

before the date of the enactment of this paragraph

and did not produce hydroelectric power on the

date of the enactment of this paragraph, and

``(iii) turbines or other generating devices

are to be added to the facility after such date to

produce hydroelectric power, but only if there is

not any enlargement of the diversion structure, or

construction or enlargement of a bypass channel,

or the impoundment or any withholding of any

additional water from the natural stream

channel.''.

(4) Facilities.--Section 45(d) <<NOTE: 26 USC

45.>> (relating to qualified facilities) is amended by adding at

the end the following new paragraph:

``(9) Qualified hydropower facility.--In the case of a

facility producing qualified hydroelectric production described

in subsection (c)(8), the term `qualified facility' means--

``(A) in the case of any facility producing

incremental hydropower production, such facility but

only to the extent of its incremental hydropower

production attributable to efficiency improvements or

additions to capacity described in subsection (c)(8)(B)

placed in service after the date of the enactment of

this paragraph and before January 1, 2008, and

``(B) any other facility placed in service after the

date of the enactment of this paragraph and before

January 1, 2008.

``(C) Credit period.--In the case of a qualified

facility described in subparagraph (A), the 10-year

period referred to in subsection (a) shall be treated as

beginning on the date the efficiency improvements or

additions to capacity are placed in service.''.

(d) Indian Coal.--

(1) Production facilities.--Subsection (e) of section 45

(relating to definitions and special rules) is amended by adding

at the end the following new paragraph:

``(10) Indian coal production facilities.--

``(A) Determination of credit amount.--In the case

of a producer of Indian coal, the credit determined

under this section (without regard to this paragraph)

for any taxable year shall be increased by an amount

equal to the applicable dollar amount per ton of Indian

coal--

``(i) produced by the taxpayer at an Indian

coal production facility during the 7-year period

beginning on January 1, 2006, and

``(ii) sold by the taxpayer--

``(I) to an unrelated person, and

``(II) during such 7-year period and

such taxable year.

``(B) Applicable dollar amount.--

``(i) In general.--The term `applicable dollar

amount' for any taxable year beginning in a

calendar year means--

[[Page 119 STAT. 989]]

``(I) $1.50 in the case of calendar

years 2006 through 2009, and

``(II) $2.00 in the case of calendar

years beginning after 2009.

``(ii) Inflation adjustment.--In the case of

any calendar year after 2006, each of the dollar

amounts under clause (i) shall be equal to the

product of such dollar amount and the inflation

adjustment factor determined under paragraph

(2)(B) for the calendar year, except that such

paragraph shall be applied by substituting `2005'

for `1992'.

``(C) Application of rules.--Rules similar to the

rules of the subsection (b)(3) and paragraphs (1), (3),

(4), and (5) of this subsection shall apply for purposes

of determining the amount of any increase under this

paragraph.

``(D) <<NOTE: Effective date.>> Treatment as

specified credit.--The increase in the credit determined

under subsection (a) by reason of this paragraph with

respect to any facility shall be treated as a specified

credit for purposes of section 38(c)(4)(A) during the 4-

year period beginning on the later of January 1, 2006,

or the date on which such facility is placed in service

by the taxpayer.''.

(2) <<NOTE: 26 USC 45.>> Resource.--Subsection (c) of

section 45 (relating to qualified energy resources and refined

coal), as amended by this Act, is amended by adding at the end

the following new paragraph:

``(9) Indian coal.--

``(A) In general.--The term `Indian coal' means coal

which is produced from coal reserves which, on June 14,

2005--

``(i) were owned by an Indian tribe, or

``(ii) were held in trust by the United States

for the benefit of an Indian tribe or its members.

``(B) Indian tribe.--For purposes of this paragraph,

the term `Indian tribe' has the meaning given such term

by section 7871(c)(3)(E)(ii).''.

(3) Indian coal production facility.--Subsection (d) of

section 45, as amended by this Act, is amended by adding at the

end the following new paragraph:

``(10) Indian coal production facility.--The term `Indian

coal production facility' means a facility which is placed in

service before January 1, 2009.''.

(4) Conforming amendment.--The heading for section 45(c) is

amended by striking ``Qualified Energy Resources and Refined

Coal'' and inserting ``Resources''.

(e) Technical Amendment Related to Trash Combustion Facilities.--

Section 45(d)(7) (relating to trash combustion facilities) is amended by

adding at the end the following: ``Such term shall include a new unit

placed in service in connection with a facility placed in service on or

before the date of the enactment of this paragraph, but only to the

extent of the increased amount of electricity produced at the facility

by reason of such new unit.''.

(f) Additional Technical Amendments Related to Section 710 of the

American Jobs Creation Act of 2004.--

(1) Clause (ii) of section 45(b)(4)(B) is amended by

striking ``the date of the enactment of this Act'' and inserting

``January 1, 2005,''.

[[Page 119 STAT. 990]]

(2) <<NOTE: 26 USC 45.>> Clause (ii) of section 45(c)(3)(A)

is amended by inserting ``or any nonhazardous lignin waste

material'' after ``cellulosic waste material''.

(3) Subsection (e) of section 45 is amended by striking

paragraph (6).

(4)(A) Paragraph (9) of section 45(e) is amended to read as

follows:

``(9) Coordination with credit for producing fuel from a

nonconventional source.--

``(A) In general.--The term `qualified facility'

shall not include any facility which produces

electricity from gas derived from the biodegradation of

municipal solid waste if such biodegradation occurred in

a facility (within the meaning of section 29) the

production from which is allowed as a credit under

section 29 for the taxable year or any prior taxable

year.

``(B) Refined coal facilities.--The term `refined

coal production facility' shall not include any facility

the production from which is allowed as a credit under

section 29 for the taxable year or any prior taxable

year.''.

(B) Subparagraph (C) of section 45(e)(8) is amended by

striking ``and (9)''.

(5) <<NOTE: 26 USC 168.>> Subclause (I) of section

168(e)(3)(B)(vi) is amended to read as follows:

``(I) is described in subparagraph

(A) of section 48(a)(3) (or would be so

described if `solar and wind' were

substituted for `solar' in clause (i)

thereof and the last sentence of such

section did not apply to such

subparagraph),''.

(6) Paragraph (4) of section 710(g) of the American Jobs

Creation Act of 2004 <<NOTE: 26 USC 45 note.>>  is amended by

striking ``January 1, 2004'' and inserting ``January 1, 2005''.

(g) <<NOTE: 26 USC 45 note.>> Effective Dates.--

(1) In general.--Except as provided in paragraph (2), the

amendments made by this section shall take effect of the date of

the enactment of this Act.

(2) Technical amendments.--The amendments made by

subsections (e) and (f) shall take effect as if included in the

amendments made by section 710 of the American Jobs Creation Act

of 2004.

SEC. 1302. APPLICATION OF SECTION 45 CREDIT TO AGRICULTURAL

COOPERATIVES.

(a) In General.--Section 45(e) (relating to definitions and special

rules), as amended by this Act, is amended by adding at the end the

following:

``(11) Allocation of credit to patrons of agricultural

cooperative.--

``(A) Election to allocate.--

``(i) In general.--In the case of an eligible

cooperative organization, any portion of the

credit determined under subsection (a) for the

taxable year may, at the election of the

organization, be apportioned among patrons of the

organization on the basis of the amount of

business done by the patrons during the taxable

year.

[[Page 119 STAT. 991]]

``(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. Such election

shall not take effect unless the organization

designates the apportionment as such in a written

notice mailed to its patrons during the payment

period described in section 1382(d).

``(B) Treatment of organizations and patrons.--The

amount of the credit apportioned to any 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 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.

``(C) Special rules for decrease in credits for

taxable year.--If the amount of the credit of a

cooperative organization determined under subsection (a)

for a taxable year is less than the amount of such

credit shown on the return of the cooperative

organization for such year, an amount equal to the

excess of--

``(i) such reduction, over

``(ii) the amount not apportioned to such

patrons under subparagraph (A) for the taxable

year,

shall be treated as an increase in tax imposed by this

chapter on the organization. Such increase shall not be

treated as tax imposed by this chapter for purposes of

determining the amount of any credit under this chapter.

``(D) Eligible cooperative defined.--For purposes of

this section the term `eligible cooperative' means a

cooperative organization described in section 1381(a)

which is owned more than 50 percent by agricultural

producers or by entities owned by agricultural

producers. For this purpose an entity owned by an

agricultural producer is one that is more than 50

percent owned by agricultural producers.''.

(b) Conforming Amendment.--The last sentence of section 55(c)(1)

is <<NOTE: 26 USC 55.>> amended by inserting ``45(e)(11)(C),'' after

``section''.

(c) <<NOTE: 26 USC 45 note.>> Effective Date.--The amendments made

by this section shall apply to taxable years of cooperative

organizations ending after the date of the enactment of this Act.

SEC. 1303. CLEAN RENEWABLE ENERGY BONDS.

(a) In General.--Part IV of subchapter A of chapter 1 (relating to

credits against tax) is amended by adding at the end the following new

subpart:

[[Page 119 STAT. 992]]

``Subpart H--Nonrefundable Credit to Holders of Certain Bonds

``Sec. 54. Credit to holders of clean renewable energy bonds.

``SEC. 54. CREDIT TO HOLDERS OF CLEAN RENEWABLE ENERGY BONDS.

``(a) Allowance of Credit.--If a taxpayer holds a clean renewable

energy bond on one or more credit allowance dates of the bond occurring

during any taxable year, 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 the credits determined under subsection (b) with respect to such

dates.

``(b) Amount of Credit.--

``(1) In general.--The amount of the credit determined under

this subsection with respect to any credit allowance date for a

clean renewable energy bond is 25 percent of the annual credit

determined with respect to such bond.

``(2) Annual credit.--The annual credit determined with

respect to any clean renewable energy bond is the product of--

``(A) the credit rate determined by the Secretary

under paragraph (3) for the day on which such bond was

sold, multiplied by

``(B) the outstanding face amount of the bond.

``(3) Determination.--For purposes of paragraph (2), with

respect to any clean renewable energy bond, the Secretary shall

determine daily or cause to be determined daily a credit rate

which shall apply to the first day on which there is a binding,

written contract for the sale or exchange of the bond. The

credit rate for any day is the credit rate which the Secretary

or the Secretary's designee estimates will permit the issuance

of clean renewable energy bonds with a specified maturity or

redemption date without discount and without interest cost to

the qualified issuer.

``(4) Credit allowance date.--For purposes of this section,

the term `credit allowance date' means--

``(A) March 15,

``(B) June 15,

``(C) September 15, and

``(D) December 15.

Such term also includes the last day on which the bond is

outstanding.

``(5) Special rule for issuance and redemption.--In the case

of a bond which is issued during the 3-month period ending on a

credit allowance date, the amount of the credit determined under

this subsection with respect to such credit allowance date shall

be a ratable portion of the credit otherwise determined based on

the portion of the 3-month period during which the bond is

outstanding. A similar rule shall apply when the bond is

redeemed or matures.

``(c) Limitation Based on Amount of Tax.--The credit allowed under

subsection (a) for any 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

[[Page 119 STAT. 993]]

``(2) the sum of the credits allowable under this part

(other than subpart C and this section).

``(d) Clean Renewable Energy Bond.--For purposes of this section--

``(1) In general.--The term `clean renewable energy bond'

means any bond issued as part of an issue if--

``(A) the bond is issued by a qualified issuer

pursuant to an allocation by the Secretary to such

issuer of a portion of the national clean renewable

energy bond limitation under subsection (f)(2),

``(B) 95 percent or more of the proceeds of such

issue are to be used for capital expenditures incurred

by qualified borrowers for one or more qualified

projects,

``(C) the qualified issuer designates such bond for

purposes of this section and the bond is in registered

form, and

``(D) the issue meets the requirements of subsection

(h).

``(2) Qualified project; special use rules.--

``(A) In general.--The term `qualified project'

means any qualified facility (as determined under

section 45(d) without regard to paragraph (10) and to

any placed in service date) owned by a qualified

borrower.

``(B) Refinancing rules.--For purposes of paragraph

(1)(B), a qualified project may be refinanced with

proceeds of a clean renewable energy bond only if the

indebtedness being refinanced (including any obligation

directly or indirectly refinanced by such indebtedness)

was originally incurred by a qualified borrower after

the date of the enactment of this section.

``(C) <<NOTE: Deadlines.>> Reimbursement.--For

purposes of paragraph (1)(B), a clean renewable energy

bond may be issued to reimburse a qualified borrower for

amounts paid after the date of the enactment of this

section with respect to a qualified project, but only

if--

``(i) prior to the payment of the original

expenditure, the qualified borrower declared its

intent to reimburse such expenditure with the

proceeds of a clean renewable energy bond,

``(ii) not later than 60 days after payment of

the original expenditure, the qualified issuer

adopts an official intent to reimburse the

original expenditure with such proceeds, and

``(iii) the reimbursement is made not later

than 18 months after the date the original

expenditure is paid.

``(D) Treatment of changes in use.--For purposes of

paragraph (1)(B), the proceeds of an issue shall not be

treated as used for a qualified project to the extent

that a qualified borrower or qualified issuer takes any

action within its control which causes such proceeds not

to be used for a qualified project. The Secretary shall

prescribe regulations specifying remedial actions that

may be taken (including conditions to taking such

remedial actions) to prevent an action described in the

preceding sentence from causing a bond to fail to be a

clean renewable energy bond.

[[Page 119 STAT. 994]]

``(e) Maturity Limitations.--

``(1) Duration of term.--A bond shall not be treated as a

clean renewable energy bond if the maturity of such bond exceeds

the maximum term determined by the Secretary under paragraph (2)

with respect to such bond.

``(2) Maximum term.--During each calendar month, the

Secretary shall determine the maximum term permitted under this

paragraph for bonds issued during the following calendar month.

Such maximum term shall be the term which the Secretary

estimates will result in the present value of the obligation to

repay the principal on the bond being equal to 50 percent of the

face amount of such bond. Such present value shall be determined

without regard to the requirements of subsection (l)(6) and

using as a discount rate the average annual interest rate of

tax-exempt obligations having a term of 10 years or more which

are issued during the month. If the term as so determined is not

a multiple of a whole year, such term shall be rounded to the

next highest whole year.

``(f) Limitation on Amount of Bonds Designated.--

``(1) National limitation.--There is a national clean

renewable energy bond limitation of $800,000,000.

``(2) Allocation by secretary.--The Secretary shall allocate

the amount described in paragraph (1) among qualified projects

in such manner as the Secretary determines appropriate, except

that the Secretary may not allocate more than $500,000,000 of

the national clean renewable energy bond limitation to finance

qualified projects of qualified borrowers which are governmental

bodies.

``(g) Credit Included in Gross Income.--Gross income includes the

amount of the credit allowed to the taxpayer under this section

(determined without regard to subsection (c)) and the amount so included

shall be treated as interest income.

``(h) Special Rules Relating to Expenditures.--

``(1) In general.--An issue shall be treated as meeting the

requirements of this subsection if, as of the date of issuance,

the qualified issuer reasonably expects--

``(A) at least 95 percent of the proceeds of such

issue are to be spent for one or more qualified projects

within the 5-year period beginning on the date of

issuance of the clean energy bond,

``(B) a binding commitment with a third party to

spend at least 10 percent of the proceeds of such issue

will be incurred within the 6-month period beginning on

the date of issuance of the clean energy bond or, in the

case of a clean energy bond the proceeds of which are to

be loaned to two or more qualified borrowers, such

binding commitment will be incurred within the 6-month

period beginning on the date of the loan of such

proceeds to a qualified borrower, and

``(C) such projects will be completed with due

diligence and the proceeds of such issue will be spent

with due diligence.

``(2) Extension of period.--Upon submission of a request

prior to the expiration of the period described in paragraph

(1)(A), the Secretary may extend such period if the qualified

[[Page 119 STAT. 995]]

issuer establishes that the failure to satisfy the 5-year

requirement is due to reasonable cause and the related projects

will continue to proceed with due diligence.

``(3) Failure to spend required amount of bond proceeds

within 5 years.--To the extent that less than 95 percent of the

proceeds of such issue are expended by the close of the 5-year

period beginning on the date of issuance (or if an extension has

been obtained under paragraph (2), by the close of the extended

period), the qualified issuer shall redeem all of the

nonqualified bonds within 90 days after the end of such period.

For purposes of this paragraph, the amount of the nonqualified

bonds required to be redeemed shall be determined in the same

manner as under section 142.

``(i) Special Rules Relating to Arbitrage.--A bond which is part of

an issue shall not be treated as a clean renewable energy bond unless,

with respect to the issue of which the bond is a part, the qualified

issuer satisfies the arbitrage requirements of section 148 with respect

to proceeds of the issue.

``(j) Cooperative Electric Company; Qualified Energy Tax Credit Bond

Lender; Governmental Body; Qualified Borrower.--For purposes of this

section--

``(1) Cooperative electric company.--The term `cooperative

electric company' means a mutual or cooperative electric company

described in section 501(c)(12) or section 1381(a)(2)(C), or a

not-for-profit electric utility which has received a loan or

loan guarantee under the Rural Electrification Act.

``(2) Clean renewable energy bond lender.--The term `clean

renewable energy bond lender' means a lender which is a

cooperative which is owned by, or has outstanding loans to, 100

or more cooperative electric companies and is in existence on

February 1, 2002, and shall include any affiliated entity which

is controlled by such lender.

``(3) Governmental body.--The term `governmental body' means

any State, territory, possession of the United States, the

District of Columbia, Indian tribal government, and any

political subdivision thereof.

``(4) Qualified issuer.--The term `qualified issuer' means--

``(A) a clean renewable energy bond lender,

``(B) a cooperative electric company, or

``(C) a governmental body.

``(5) Qualified borrower.--The term `qualified borrower'

means--

``(A) a mutual or cooperative electric company

described in section 501(c)(12) or 1381(a)(2)(C), or

``(B) a governmental body.

``(k) Special Rules Relating to Pool Bonds.--No portion of a pooled

financing bond may be allocable to any loan unless the borrower has

entered into a written loan commitment for such portion prior to the

issue date of such issue.

``(l) Other Definitions and Special Rules.--For purposes of this

section--

``(1) Bond.--The term `bond' includes any obligation.

``(2) Pooled financing bond.--The term `pooled financing

bond' shall have the meaning given such term by section

149(f)(4)(A).

[[Page 119 STAT. 996]]

``(3) Partnership; s <<NOTE: Applicability.>>  corporation;

and other pass-thru entities.--

``(A) In general.--

Under <<NOTE: Regulations.>> regulations prescribed by

the Secretary, in the case of a partnership, trust, S

corporation, or other pass-thru entity, rules similar to

the rules of section 41(g) shall apply with respect to

the credit allowable under subsection (a).

``(B) No basis adjustment.--In the case of a bond

held by a partnership or an S corporation, rules similar

to the rules under section 1397E(i) shall apply.

``(4) Bonds <<NOTE: Procedures.>> held by regulated

investment companies.--If any clean renewable energy bond is

held by a regulated investment company, the credit determined

under subsection (a) shall be allowed to shareholders of such

company under procedures prescribed by the Secretary.

``(5) Treatment for estimated tax purposes.--Solely for

purposes of sections 6654 and 6655, the credit allowed by this

section (determined without regard to subsection (c)) to a

taxpayer by reason of holding a clean renewable energy bond on a

credit allowance date shall be treated as if it were a payment

of estimated tax made by the taxpayer on such date.

``(6) Ratable principal amortization required.--A bond shall

not be treated as a clean renewable energy bond unless it is

part of an issue which provides for an equal amount of principal

to be paid by the qualified issuer during each calendar year

that the issue is outstanding.

``(7) Reporting.--Issuers of clean renewable energy bonds

shall submit reports similar to the reports required under

section 149(e).

``(m) Termination.--This section shall not apply with respect to any

bond issued after December 31, 2007.''.

(b) Reporting.--Subsection (d) of section 6049 (relating to returns

regarding payments of interest) is amended by adding at the end the

following new paragraph:

``(8) Reporting of credit on clean renewable energy bonds.--

``(A) In general.--For purposes of subsection (a),

the term `interest' includes amounts includible in gross

income under section 54(g) and such amounts shall be

treated as paid on the credit allowance date (as defined

in section 54(b)(4)).

``(B) Reporting to corporations, etc.--Except as

otherwise provided in regulations, in the case of any

interest described in subparagraph (A), subsection

(b)(4) shall be applied without regard to subparagraphs

(A), (H), (I), (J), (K), and (L)(i) of such subsection.

``(C) Regulatory authority.--The Secretary may

prescribe such regulations as are necessary or

appropriate to carry out the purposes of this paragraph,

including regulations which require more frequent or

more detailed reporting.''.

(c) Conforming Amendments.--

(1) The table of subparts for part IV of subchapter A of

chapter 1 is amended by adding at the end the following new

item:

[[Page 119 STAT. 997]]

``subpart h. nonrefundable credit to holders of certain bonds.''.

(2) Section 1397E(c)(2) is amended by inserting ``, and

subpart H thereof'' after ``refundable credits''.

(3) Subsection (h) of section 1397E is amended to read as

follows:

``(h) Credit Treated as Nonrefundable Bondholder Credit.--For

purposes of this title, the credit allowed by this section shall be

treated as a credit allowable under subpart H of part IV of subchapter A

of this chapter.''.

(4) Section 6401(b)(1) is amended by striking ``and G'' and

inserting ``G, and H''.

(d) Issuance of Regulations.--The <<NOTE: Deadline. 26 USC 54

note.>> Secretary of the Treasury shall issue regulations required under

section 54 of the Internal Revenue Code of 1986 (as added by this

section) not later than 120 days after the date of the enactment of this

Act.

(e) Effective Date.--The <<NOTE: 26 USC 54 note.>> amendments made

by this section shall apply to bonds issued after December 31, 2005.

SEC. 1304. TREATMENT OF INCOME OF CERTAIN ELECTRIC COOPERATIVES.

(a) Elimination of Sunset on Treatment of Income From Open Access

and Nuclear Decommissioning Transactions.--Section 501(c)(12)(C) is

amended by striking the last sentence.

(b) Elimination of Sunset on Treatment of Income From Load Loss

Transactions.--Section 501(c)(12)(H) is amended by striking clause (x).

(c) Effective Date.--The <<NOTE: 26 USC 501 note.>> amendments made

by this section shall take effect on the date of the enactment of this

Act.

SEC. 1305. DISPOSITIONS OF TRANSMISSION PROPERTY TO IMPLEMENT FERC

RESTRUCTURING POLICY.

(a) In General.--Section 451(i)(3) (defining qualifying electric

transmission transaction) is amended by striking ``2007'' and inserting

``2008''.

(b) Technical Amendment Related to Section 909 of the American Jobs

Creation Act of 2004.--Clause (ii) of section 451(i)(4)(B) is amended by

striking ``the close of the period applicable under subsection (a)(2)(B)

as extended under paragraph (2)'' and inserting ``December 31, 2007''.

(c) Effective <<NOTE: 26 USC 451 note.>> Dates.--

(1) In general.--The amendment made by subsection (a) shall

apply to transactions occurring after the date of the enactment

of this Act.

(2) Technical amendment.--The amendment made by subsection

(b) shall take effect as if included in the amendments made by

section 909 of the American Jobs Creation Act of 2004.

SEC. 1306. 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) is amended by adding after

section 45I the following new section:

[[Page 119 STAT. 998]]

``SEC. 45J. 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 <<NOTE: Deadline.>> 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)(1) shall apply for purposes of this section.

``(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 December

31, 1993, by the Nuclear Regulatory Commission

[[Page 119 STAT. 999]]

(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

the Transportation Equity Act: A Legacy for Users, 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 advanced nuclear power facility production credit

determined under section 45J(a).''.

(c) 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:

``Sec. 45J. Credit for production from advanced nuclear power

facilities.''.

(d) Effective Date.--The <<NOTE: 26 USC 38 note.>> amendments made

by this section shall apply to production in taxable years beginning

after the date of the enactment of this Act.

SEC. 1307. CREDIT FOR INVESTMENT IN CLEAN COAL FACILITIES.

(a) In General.--Section 46 (relating to amount of credit) is

amended by striking ``and'' at the end of paragraph (1), by striking the

period at the end of paragraph (2), and by adding at the end the

following new paragraphs:

``(3) the qualifying advanced coal project credit, and

``(4) the qualifying gasification project credit.''.

(b) Amount of Credits.--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 sections:

``SEC. 48A. QUALIFYING ADVANCED COAL PROJECT CREDIT.

``(a) In General.--For purposes of section 46, the qualifying

advanced coal project credit for any taxable year is an amount equal

to--

``(1) 20 percent of the qualified investment for such

taxable year in the case of projects described in subsection

(d)(3)(B)(i), and

``(2) 15 percent of the qualified investment for such

taxable year in the case of projects described in subsection

(d)(3)(B)(ii).

``(b) Qualified Investment.--

``(1) In general.--For purposes of subsection (a), the

qualified investment for any taxable year is the basis of

eligible property placed in service by the taxpayer during such

taxable year which is part of a qualifying advanced coal

project--

``(A)(i) the construction, reconstruction, or

erection of which is completed by the taxpayer, or

``(ii) which is acquired by the taxpayer if the

original use of such property commences with the

taxpayer, and

``(B) with respect to which depreciation (or

amortization in lieu of depreciation) is allowable.

``(2) Special rule for certain subsidized property.--Rules

similar to section 48(a)(4) shall apply for purposes of this

section.

``(3) Certain qualified progress expenditures rules made

applicable.--Rules similar to the rules of subsections (c)(4)

and (d) of section 46 (as in effect on the day before

[[Page 119 STAT. 1000]]

the enactment of the Revenue Reconciliation Act of 1990) shall

apply for purposes of this section.

``(c) Definitions.--For purposes of this section--

``(1) Qualifying advanced coal project.--The term

`qualifying advanced coal project' means a project which meets

the requirements of subsection (e).

``(2) Advanced coal-based generation technology.--The term

`advanced coal-based generation technology' means a technology

which meets the requirements of subsection (f).

``(3) Eligible property.--The term `eligible property'

means--

``(A) in the case of any qualifying advanced coal

project using an integrated gasification combined cycle,

any property which is a part of such project and is

necessary for the gasification of coal, including any

coal handling and gas separation equipment, and

``(B) in the case of any other qualifying advanced

coal project, any property which is a part of such

project.

``(4) Coal.--The term `coal' means anthracite, bituminous

coal, subbituminous coal, lignite, and peat.

``(5) Greenhouse gas capture capability.--The term

`greenhouse gas capture capability' means an integrated

gasification combined cycle technology facility capable of

adding components which can capture, separate on a long-term

basis, isolate, remove, and sequester greenhouse gases which

result from the generation of electricity.

``(6) Electric generation unit.--The term `electric

generation unit' means any facility at least 50 percent of the

total annual net output of which is electrical power, including

an otherwise eligible facility which is used in an industrial

application.

``(7) Integrated gasification combined cycle.--The term

`integrated gasification combined cycle' means an electric

generation unit which produces electricity by converting coal to

synthesis gas which is used to fuel a combined-cycle plant which

produces electricity from both a combustion turbine (including a

combustion turbine/fuel cell hybrid) and a steam turbine.

``(d) Qualifying <<NOTE: Deadlines.>> Advanced Coal Project

Program.--

``(1) Establishment.--Not later than 180 days after the date

of enactment of this section, the Secretary, in consultation

with the Secretary of Energy, shall establish a qualifying

advanced coal project program for the deployment of advanced

coal-based generation technologies.

``(2) Certification.--

``(A) Application period.--Each applicant for

certification under this paragraph shall submit an

application meeting the requirements of subparagraph

(B). An applicant may only submit an application during

the 3-year period beginning on the date the Secretary

establishes the program under paragraph (1).

``(B) Requirements for applications for

certification.--An application under subparagraph (A)

shall contain such information as the Secretary may

require in order to make a determination to accept or

reject an application for certification as meeting the

requirements under subsection (e)(1). <<NOTE: Trade

secrets. Confidential information.>> Any information

contained in the

[[Page 119 STAT. 1001]]

application shall be protected as provided in section

552(b)(4) of title 5, United States Code.

``(C) Time to act upon applications for

certification.--The Secretary shall issue a

determination as to whether an applicant has met the

requirements under subsection (e)(1) within 60 days

following the date of submittal of the application for

certification.

``(D) Time to meet criteria for certification.--Each

applicant for certification shall have 2 years from the

date of acceptance by the Secretary of the application

during which to provide to the Secretary evidence that

the criteria set forth in subsection (e)(2) have been

met.

``(E) Period of issuance.--An applicant which

receives a certification shall have 5 years from the

date of issuance of the certification in order to place

the project in service and if such project is not placed

in service by that time period then the certification

shall no longer be valid.

``(3) Aggregate credits.--

``(A) In general.--The aggregate credits allowed

under subsection (a) for projects certified by the

Secretary under paragraph (2) may not exceed

$1,300,000,000.

``(B) Particular projects.--Of the dollar amount in

subparagraph (A), the Secretary is authorized to

certify--

``(i) $800,000,000 for integrated gasification

combined cycle projects, and

``(ii) $500,000,000 for projects which use

other advanced coal-based generation technologies.

``(4) Review and redistribution.--

``(A) Review.--Not later than 6 years after the date

of enactment of this section, the Secretary shall review

the credits allocated under this section as of the date

which is 6 years after the date of enactment of this

section.

``(B) Redistribution.--The Secretary may reallocate

credits available under clauses (i) and (ii) of

paragraph (3)(B) if the Secretary determines that--

``(i) there is an insufficient quantity of

qualifying applications for certification pending

at the time of the review, or

``(ii) any certification made pursuant to

subsection paragraph (2) has been revoked pursuant

to subsection paragraph (2)(D) because the project

subject to the certification has been delayed as a

result of third party opposition or litigation to

the proposed project.

``(C) Reallocation.--If the Secretary determines

that credits under clause (i) or (ii) of paragraph

(3)(B) are available for reallocation pursuant to the

requirements set forth in paragraph (2), the Secretary

is authorized to conduct an additional program for

applications for certification.

``(e) Qualifying Advanced Coal Projects.--

``(1) Requirements.--For purposes of subsection (c)(1), a

project shall be considered a qualifying advanced coal project

that the Secretary may certify under subsection (d)(2) if the

Secretary determines that, at a minimum--

``(A) the project uses an advanced coal-based

generation technology--

``(i) to power a new electric generation unit;

or

[[Page 119 STAT. 1002]]

``(ii) to retrofit or repower an existing

electric generation unit (including an existing

natural gas-fired combined cycle unit);

``(B) the fuel input for the project, when

completed, is at least 75 percent coal;

``(C) the project, consisting of one or more

electric generation units at one site, will have a total

nameplate generating capacity of at least 400 megawatts;

``(D) the applicant provides evidence that a

majority of the output of the project is reasonably

expected to be acquired or utilized;

``(E) the applicant provides evidence of ownership

or control of a site of sufficient size to allow the

proposed project to be constructed and to operate on a

long-term basis; and

``(F) the project will be located in the United

States.

``(2) Requirements for certification.--For the purpose of

subsection (d)(2)(D), a project shall be eligible for

certification only if the Secretary determines that--

``(A) the applicant for certification has received

all Federal and State environmental authorizations or

reviews necessary to commence construction of the

project; and

``(B) the applicant for certification, except in the

case of a retrofit or repower of an existing electric

generation unit, has purchased or entered into a binding

contract for the purchase of the main steam turbine or

turbines for the project, except that such contract may

be contingent upon receipt of a certification under

subsection (d)(2).

``(3) Priority for integrated gasification combined cycle

projects.--In determining which qualifying advanced coal

projects to certify under subsection (d)(2), the Secretary

shall--

``(A) certify capacity, in accordance with the

procedures set forth in subsection (d), in relatively

equal amounts to--

``(i) projects using bituminous coal as a

primary feedstock,

``(ii) projects using subbituminous coal as a

primary feedstock, and

``(iii) projects using lignite as a primary

feedstock, and

``(B) give high priority to projects which include,

as determined by the Secretary--

``(i) greenhouse gas capture capability,

``(ii) increased by-product utilization, and

``(iii) other benefits.

``(f) Advanced Coal-Based Generation Technology.--

``(1) In general.--For the purpose of this section, an

electric generation unit uses advanced coal-based generation

technology if--

``(A) the unit--

``(i) uses integrated gasification combined

cycle technology, or

``(ii) except as provided in paragraph (3),

has a design net heat rate of 8530 Btu/kWh (40

percent efficiency), and

[[Page 119 STAT. 1003]]

``(B) the unit is designed to meet the performance

requirements in the following table:

Performance characteristic:         Design level for project:

SO2 (percent removal)...........  99 percent

NOx (emissions).................  0.07 lbs/MMBTU

PM* (emissions).................  0.015 lbs/MMBTU

Hg (percent removal)............  90 percent

``(2) Design net heat rate.--For purposes of this

subsection, design net heat rate with respect to an electric

generation unit shall--

``(A) be measured in Btu per kilowatt hour (higher

heating value),

``(B) be based on the design annual heat input to

the unit and the rated net electrical power, fuels, and

chemicals output of the unit (determined without regard

to the cogeneration of steam by the unit),

``(C) be adjusted for the heat content of the design

coal to be used by the unit--

``(i) if the heat content is less than 13,500

Btu per pound, but greater than 7,000 Btu per

pound, according to the following formula: design

net heat rate = unit net heat rate x [1-[((13,500-

design coal heat content, Btu per pound)/1,000)*

0.013]], and

``(ii) if the heat content is less than or

equal to 7,000 Btu per pound, according to the

following formula: design net heat rate = unit net

heat rate x [1-[((13,500-design coal heat content,

Btu per pound)/1,000)* 0.018]], and

``(D) 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,

``(iii) temperature, dry bulb of 63F,

``(iv) temperature, wet bulb of 54F, and

``(v) relative humidity of 55 percent.

``(3) Existing units.--In the case of any electric

generation unit in existence on the date of the enactment of

this section, such unit uses advanced coal-based generation

technology if, in lieu of the requirements under paragraph

(1)(A)(ii), such unit achieves a minimum efficiency of 35

percent and an overall thermal design efficiency improvement,

compared to the efficiency of the unit as operated, of not less

than--

``(A) 7 percentage points for coal of more than

9,000 Btu,

``(B) 6 percentage points for coal of 7,000 to 9,000

Btu, or

``(C) 4 percentage points for coal of less than

7,000 Btu.

``(g) Applicability.--No use of technology (or level of emission

reduction solely by reason of the use of the technology), and no

achievement of any emission reduction by the demonstration of any

technology or performance level, by or at one or more facilities with

respect to which a credit is allowed under this section, shall

[[Page 119 STAT. 1004]]

be considered to indicate that the technology or performance level is--

``(1) adequately demonstrated for purposes of section 111 of

the Clean Air Act (42 U.S.C. 7411);

``(2) achievable for purposes of section 169 of that Act (42

U.S.C. 7479); or

``(3) achievable in practice for purposes of section 171 of

such Act (42 U.S.C. 7501).

``SEC. 48B. QUALIFYING GASIFICATION PROJECT CREDIT.

``(a) In General.--For purposes of section 46, the qualifying

gasification project credit for any taxable year is an amount equal to

20 percent of the qualified investment for such taxable year.

``(b) Qualified Investment.--

``(1) In general.--For purposes of subsection (a), the

qualified investment for any taxable year is the basis of

eligible property placed in service by the taxpayer during such

taxable year which is part of a qualifying gasification

project--

``(A)(i) the construction, reconstruction, or

erection of which is completed by the taxpayer, or

``(ii) which is acquired by the taxpayer if the

original use of such property commences with the

taxpayer, and

``(B) with respect to which depreciation (or

amortization in lieu of depreciation) is allowable.

``(2) Special rule for certain subsidized property.--Rules

similar to section 48(a)(4) shall apply for purposes of this

section.

``(3) Certain qualified progress expenditures 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

enactment of the Revenue Reconciliation Act of 1990) shall apply

for purposes of this section.

``(c) Definitions.--For purposes of this section--

``(1) Qualifying gasification project.--The term `qualifying

gasification project' means any project which--

``(A) employs gasification technology,

``(B) will be carried out by an eligible entity, and

``(C) any portion of the qualified investment of

which is certified under the qualifying gasification

program as eligible for credit under this section in an

amount (not to exceed $650,000,000) determined by the

Secretary.

``(2) Gasification technology.--The term `gasification

technology' means any process which converts a solid or liquid

product from coal, petroleum residue, biomass, or other

materials which are recovered for their energy or feedstock

value into a synthesis gas composed primarily of carbon monoxide

and hydrogen for direct use or subsequent chemical or physical

conversion.

``(3) Eligible property.--The term `eligible property' means

any property which is a part of a qualifying gasification

project and is necessary for the gasification technology of such

project.

``(4) Biomass.--

``(A) In general.--The term `biomass' means any--

``(i) agricultural or plant waste,

``(ii) byproduct of wood or paper mill

operations, including lignin in spent pulping

liquors, and

[[Page 119 STAT. 1005]]

``(iii) other products of forestry

maintenance.

``(B) Exclusion.--The term `biomass' does not

include paper which is commonly recycled.

``(5) Carbon capture capability.--The term `carbon capture

capability' means a gasification plant design which is

determined by the Secretary to reflect reasonable consideration

for, and be capable of, accommodating the equipment likely to be

necessary to capture carbon dioxide from the gaseous stream, for

later use or sequestration, which would otherwise be emitted in

the flue gas from a project which uses a nonrenewable fuel.

``(6) Coal.--The term `coal' means anthracite, bituminous

coal, subbituminous coal, lignite, and peat.

``(7) Eligible entity.--The term `eligible entity' means any

person whose application for certification is principally

intended for use in a domestic project which employs domestic

gasification applications related to--

``(A) chemicals,

``(B) fertilizers,

``(C) glass,

``(D) steel,

``(E) petroleum residues,

``(F) forest products, and

``(G) agriculture, including feedlots and dairy

operations.

``(8) Petroleum residue.--The term `petroleum residue' means

the carbonized product of high-boiling hydrocarbon fractions

obtained in petroleum processing.

``(d) Qualifying Gasification Project Program.--

``(1) In general.--Not <<NOTE: Deadline.>> later than 180

days after the date of the enactment of this section, the

Secretary, in consultation with the Secretary of Energy, shall

establish a qualifying gasification project program to consider

and award certifications for qualified investment eligible for

credits under this section to qualifying gasification project

sponsors under this section. The total amounts of credit that

may be allocated under the program shall not exceed $350,000,000

under rules similar to the rules of section 48A(d)(4).

``(2) Period of issuance.--A <<NOTE: Deadline.>> certificate

of eligibility under paragraph (1) may be issued only during the

10-fiscal year period beginning on October 1, 2005.

``(3) Selection criteria.--The Secretary shall not make a

competitive certification award for qualified investment for

credit eligibility under this section unless the recipient has

documented to the satisfaction of the Secretary that--

``(A) the award recipient is financially viable

without the receipt of additional Federal funding

associated with the proposed project,

``(B) the recipient will provide sufficient

information to the Secretary for the Secretary to ensure

that the qualified investment is spent efficiently and

effectively,

``(C) a market exists for the products of the

proposed project as evidenced by contracts or written

statements of intent from potential customers,

``(D) the fuels identified with respect to the

gasification technology for such project will comprise

at least 90 percent of the fuels required by the project

for the production

[[Page 119 STAT. 1006]]

of chemical feedstocks, liquid transportation fuels, or

coproduction of electricity,

``(E) the award recipient's project team is

competent in the construction and operation of the

gasification technology proposed, with preference given

to those recipients with experience which demonstrates

successful and reliable operations of the technology on

domestic fuels so identified, and

``(F) the award recipient has met other criteria

established and published by the Secretary.

``(e) Denial of Double Benefit.--A credit shall not be allowed under

this section for any qualified investment for which a credit is allowed

under section 48A.''.

(c) Conforming Amendments.--

(1) Section 49(a)(1)(C) is amended by striking ``and'' at

the end of clause (ii), by striking clause (iii), and by adding

after clause (ii) the following new clauses:

``(iii) the basis of any property which is

part of a qualifying advanced coal project under

section 48A, and

``(iv) the basis of any property which is part

of a qualifying gasification project under section

48B.''.

(2) 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 items:

``Sec. 48A. Qualifying advanced coal project credit.

``Sec. 48B. Qualifying gasification project credit.''.

(d) Effective Date.--The <<NOTE: 26 USC 46 note.>> amendments made

by this section shall apply to periods after the date of the enactment

of this Act, 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. 1308. ELECTRIC TRANSMISSION PROPERTY 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 (v), by striking the period at the end of clause (vi)

and inserting ``, and'', and by adding at the end the following new

clause:

``(vii) any section 1245 property (as defined

in section 1245(a)(3)) used in the transmission at

69 or more kilovolts of electricity for sale and

the original use of which commences with the

taxpayer after April 11, 2005.''.

(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 (E)(vi) the

following new item:

``(E)(vii).................................................        30''.

(c) Effective <<NOTE: 26 USC 168 note.>> Date.--

(1) In general.--The amendments made by this section shall

apply to property placed in service after April 11, 2005.

[[Page 119 STAT. 1007]]

(2) Exception.--The amendments made by this section shall

not apply to any property with respect to which the taxpayer or

a related party has entered into a binding contract for the

construction thereof on or before April 11, 2005, or, in the

case of self-constructed property, has started construction on

or before such date.

SEC. 1309. EXPANSION OF AMORTIZATION FOR CERTAIN ATMOSPHERIC POLLUTION

CONTROL FACILITIES IN CONNECTION WITH PLANTS FIRST PLACED IN

SERVICE AFTER 1975.

(a) Eligibility of Post-1975 Pollution Control Facilities.--

Subsection (d) of section 169 (relating to definitions) is amended by

adding at the end the following:

``(5) Special rule relating to certain atmospheric pollution

control facilities.--In the case of any atmospheric pollution

control facility which is placed in service after April 11,

2005, and used in connection with an electric generation plant

or other property which is primarily coal fired--

``(A) paragraph (1) shall be applied without regard

to the phrase `in operation before January 1, 1976', and

``(B) this section shall be applied by substituting

`84' for `60' each place it appears in subsections (a)

and (b).''.

(b) Treatment as New Identifiable Treatment Facility.--Subparagraph

(B) of section 169(d)(4) is amended to read as follows:

``(B) Certain facilities placed in operation after

april 11, 2005.--In the case of any facility described

in paragraph (1) solely by reason of paragraph (5),

subparagraph (A) shall be applied by substituting `April

11, 2005' for `December 31, 1968' each place it appears

therein.''.

(c) Conforming Amendment.--The heading for section 169(d) is amended

by inserting ``and Special Rules'' after ``Definitions''.

(d) Technical Amendment.--Section 169(d)(3) is amended by striking

``Health, Education, and Welfare'' and inserting ``Health and Human

Services''.

(e) Effective Date.--The <<NOTE: 26 USC 169 note.>> amendments made

by this section shall apply to facilities placed in service after April

11, 2005.

SEC. 1310. 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.--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.''.

(b) 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

[[Page 119 STAT. 1008]]

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 this subsection.

``(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 on transfers

to fund.--No gain or loss shall be recognized on

any transfer described in paragraph (1).

``(ii) Transfers of appreciated property to

fund.--If appreciated property is transferred in a

transfer described in paragraph (1), 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''.

(c) New Ruling Amount Required Upon License Renewal.--Paragraph (1)

of section 468A(d) (relating to request required) is amended by adding

at the end the following new sentence: ``For purposes of the preceding

sentence, the taxpayer shall request a schedule of ruling amounts upon

each renewal of the operating license of the nuclear powerplant.''.

[[Page 119 STAT. 1009]]

(d) Conforming Amendment.--Section 468A(e)(3) (relating to review of

amount) is amended by striking ``The Fund'' and inserting ``Except as

provided in subsection (f), the Fund''.

(e) 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.

(f) Effective Date.--The <<NOTE: 26 USC 468A note.>> amendments made

by this section shall apply to taxable years beginning after December

31, 2005.

SEC. 1311. FIVE-YEAR NET OPERATING LOSS CARRYOVER FOR CERTAIN LOSSES.

Paragraph (1) of section 172(b) (relating to net operating loss

carrybacks and carryovers) is amended by adding at the end the following

new subparagraph:

``(I) Transmission property and pollution control

investment.--

``(i) In general.--At the election of the

taxpayer in any taxable year ending after December

31, 2005, and before January 1, 2009, in the case

of a net operating loss in a taxable year ending

after December 31, 2002, and before January 1,

2006, there shall be a net operating loss

carryback to each of the 5 years preceding the

taxable year of such loss to the extent that such

loss does not exceed 20 percent of the sum of

electric transmission property capital

expenditures and pollution control facility

capital expenditures of the taxpayer for the

taxable year preceding the taxable year in which

such election is made.

``(ii) Limitations.--For purposes of this

subsection--

``(I) not more than one election may

be made under clause (i) with respect to

any net operating loss in a taxable

year, and

``(II) an election may not be made

under clause (i) for more than 1 taxable

year beginning in any calendar year.

``(iii) Coordination with ordering rule.--For

purposes of applying subsection (b)(2), the

portion of any loss which is carried back 5 years

by reason of clause (i) shall be treated in a

manner similar to the manner in which a specified

liability loss is treated.

``(iv) Application <<NOTE: Deadline.>> for

adjustment.--In the case of any portion of a net

operating loss to which an election under clause

(i) applies, an application under section 6411(a)

with respect to such loss shall not fail to be

treated as timely filed if filed within 24 months

after the due date specified under such section.

``(v) Special rules relating to refund.--For

purposes of a net operating loss to which an

election under clause (i) applies, references in

sections 6501(h), 6511(d)(2)(A), and 6611(f)(1) to

the taxable year in which such net operating loss

arises or result in a

[[Page 119 STAT. 1010]]

net loss carryback shall be treated as references

to the taxable year in which such election occurs.

``(vi) Definitions.--For purposes of this

subparagraph--

``(I) Electric transmission property

capital expenditures.--The term

`electric transmission property capital

expenditures' means any expenditure,

chargeable to capital account, made by

the taxpayer which is attributable to

electric transmission property used by

the taxpayer in the transmission at 69

or more kilovolts of electricity for

sale. Such term shall not include any

expenditure which may be refunded or the

purpose of which may be modified at the

option of the taxpayer so as to cease to

be treated as an expenditure within the

meaning of such term.

``(II) Pollution control facility

capital expenditures.--The term

`pollution control facility capital

expenditures' means any expenditure,

chargeable to capital account, made by

an electric utility company (as defined

in section 2(3) of the Public Utility

Holding Company Act (15 U.S.C. 79b(3)),

as in effect on the day before the date

of the enactment of the Energy Tax

Incentives Act of 2005) which is

attributable to a facility which will

qualify as a certified pollution control

facility as determined under section

169(d)(1) by striking `before January 1,

1976,' and by substituting `an

identifiable' for `a new identifiable'.

Such term shall not include any

expenditure which may be refunded or the

purpose of which may be modified at the

option of the taxpayer so as to cease to

be treated as an expenditure within the

meaning of such term.''.

Subtitle B--Domestic Fossil Fuel Security

SEC. 1321. EXTENSION OF CREDIT FOR PRODUCING FUEL FROM A NONCONVENTIONAL

SOURCE FOR FACILITIES PRODUCING COKE OR COKE GAS.

(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 Facilities Producing Coke or Coke Gas.--

Notwithstanding subsection (f)--

``(1) In general.--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, 2010, this

section shall apply with respect to coke and coke gas produced

in such facility and sold during the period--

``(A) beginning on the later of January 1, 2006, or

the date that such facility is placed in service, and

``(B) ending on the date which is 4 years after the

date such period began.

[[Page 119 STAT. 1011]]

``(2) Special rules.--In determining the amount of credit

allowable under this section solely by reason of this

subsection--

``(A) 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

facility shall not exceed an average barrel-of-oil

equivalent of 4,000 barrels per day. Days before the

date the facility is placed in service shall not be

taken into account in determining such average.

``(B) Extension period to commence with unadjusted

credit amount.--For purposes of applying subsection

(b)(2) to the $3 amount in subsection (a), in the case

of fuels sold after 2005, subsection (d)(2)(B) shall be

applied by substituting `2004' for `1979'.

``(C) 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) Effective Date.--The <<NOTE: 26 USC 29 note.>> amendment made by

this section shall apply to fuel produced and sold after December 31,

2005, in taxable years ending after such date.

SEC. 1322. MODIFICATION OF CREDIT FOR PRODUCING FUEL FROM A

NONCONVENTIONAL SOURCE.

(a) 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 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), 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 nonconventional source production credit

determined under section 45K(a).''.

(3) Conforming amendments.--

(A) Section 30(b)(3)(A) is amended by striking

``sections 27 and 29'' and inserting ``section 27''.

(B) Sections 43(b)(2), 45I(b)(2)(C)(i), and

613A(c)(6)(C) are each amended by striking ``section

29(d)(2)(C)'' and inserting ``section 45K(d)(2)(C)''.

(C) Section 45(e)(9), as added by this Act, is

amended--

(i) by striking ``section 29'' each place it

appears and inserting ``section 45K'', and

(ii) by inserting ``(or under section 29, as

in effect on the day before the date of enactment

of the Energy Tax Incentives Act of 2005, for any

prior taxable year)'' before the period at the end

thereof.

(D) Section 45I is amended--

(i) in subsection (c)(2)(A) by striking

``section 29(d)(5))'' and inserting ``section

45K(d)(5))'', and

[[Page 119 STAT. 1012]]

(ii) in subsection (d)(3) by striking

``section 29'' both places it appears and

inserting ``section 45K''.

(E) Section 45K(a), as redesignated by paragraph

(1), is amended by striking ``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''.

(F) Section 45K(b), as so redesignated, is amended

by striking paragraph (6).

(G) Section 53(d)(1)(B)(iii) is amended by striking

``under section 29'' and all that follows through ``or

not allowed''.

(H) Section 55(c)(3) is amended by striking

``29(b)(6),''.

(I) 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).

(J) 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''.

(K) 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.

(L) The table of sections for subpart D of part IV

of subchapter A of chapter 1 is amended by inserting

after the item relating to section 45I the following new

item:

``Sec. 45K. Credit for producing fuel from a nonconventional source.''.

(b) Amendments Conforming to the Repeal of the Natural Gas Policy

Act of 1978.--

(1) In general.--Section 29(c)(2)(A) (before redesignation

under subsection (a) and as amended by section 1321) is

amended--

(A) by inserting ``(as in effect before the repeal

of such section)'' after ``1978'', and

(B) by striking subsection (e) and redesignating

subsections (f), (g), and (h) as subsections (e), (f),

and (g), respectively.

(2) Conforming amendments.--Section 29(g)(1) (before

redesignation under subsection (a) and paragraph (1) of this

subsection) is amended--

(A) in subparagraph (A) by striking ``subsection

(f)(1)(B)'' and inserting ``subsection (e)(1)(B)'', and

(B) in subparagraph (B) by striking ``subsection

(f)'' and inserting ``subsection (e)''.

(c) Effective <<NOTE: 26 USC 29 note.>> Dates.--

(1) In general.--Except as provided in paragraph (2), the

amendments made by this section shall apply to credits

determined under the Internal Revenue Code of 1986 for taxable

years ending after December 31, 2005.

(2) Subsection (b).--The amendments made by subsection (b)

shall take effect on the date of the enactment of this Act.

[[Page 119 STAT. 1013]]

SEC. 1323. TEMPORARY EXPENSING FOR EQUIPMENT USED IN REFINING OF LIQUID

FUELS.

(a) In General.--Part VI of subchapter B of chapter 1 is amended by

inserting after section 179B the following new section:

``SEC. 179C. ELECTION TO EXPENSE CERTAIN REFINERIES.

``(a) Treatment as Expenses.--A taxpayer may elect to treat 50

percent of the cost of any qualified refinery property as an expense

which is not chargeable to capital account. Any cost so treated shall be

allowed as a deduction for the taxable year in which the qualified

refinery property is placed in service.

``(b) Election.--

``(1) In general.--An election under this section for any

taxable year shall be made on the taxpayer's return of the tax

imposed by this chapter for the taxable year. Such election

shall be made in such manner as the Secretary may by regulations

prescribe.

``(2) Election irrevocable.--Any election made under this

section may not be revoked except with the consent of the

Secretary.

``(c) Qualified Refinery Property.--

``(1) In general.--The term `qualified refinery property'

means any portion of a qualified refinery--

``(A) the original use of which commences with the

taxpayer,

``(B) which is placed in service by the taxpayer

after the date of the enactment of this section and

before January 1, 2012,

``(C) in the case any portion of a qualified

refinery (other than a qualified refinery which is

separate from any existing refinery), which meets the

requirements of subsection (e),

``(D) which meets all applicable environmental laws

in effect on the date such portion was placed in

service,

``(E) no written binding contract for the

construction of which was in effect on or before June

14, 2005, and

``(F)(i) the construction of which is subject to a

written binding construction contract entered into

before January 1, 2008,

``(ii) which is placed in service before January 1,

2008, or

``(iii) in the case of self-constructed property,

the construction of which began after June 14, 2005, and

before January 1, 2008.

``(2) Special rule for sale-leasebacks.--For purposes of

paragraph (1)(A), if property is--

``(A) originally placed in service after the date of

the enactment of this section by a person, and

``(B) sold and leased back by such person within 3

months after the date such property was originally

placed in service,

such property shall be treated as originally placed in service

not earlier than the date on which such property is used under

the leaseback referred to in subparagraph (B).

``(3) Effect of waiver under clean air act.--A waiver under

the Clean Air Act shall not be taken into account in

[[Page 119 STAT. 1014]]

determining whether the requirements of paragraph (1)(D) are

met.

``(d) Qualified Refinery.--For purposes of this section, the term

`qualified refinery' means any refinery located in the United States

which is designed to serve the primary purpose of processing liquid fuel

from crude oil or qualified fuels (as defined in section 45K(c)).

``(e) Production Capacity.--The requirements of this subsection are

met if the portion of the qualified refinery--

``(1) enables the existing qualified refinery to increase

total volume output (determined without regard to asphalt or

lube oil) by 5 percent or more on an average daily basis, or

``(2) enables the existing qualified refinery to process

qualified fuels (as defined in section 45K(c)) at a rate which

is equal to or greater than 25 percent of the total throughput

of such qualified refinery on an average daily basis.

``(f) Ineligible Refinery Property.--No deduction shall be allowed

under subsection (a) for any qualified refinery property--

``(1) the primary purpose of which is for use as a topping

plant, asphalt plant, lube oil facility, crude or product

terminal, or blending facility, or

``(2) which is built solely to comply with consent decrees

or projects mandated by Federal, State, or local governments.

``(g) Election to Allocate Deduction to Cooperative Owner.--

``(1) In general.--If--

``(A) a taxpayer to which subsection (a) applies is

an organization to which part I of subchapter T applies,

and

``(B) one or more persons directly holding an

ownership interest in the taxpayer are organizations to

which part I of subchapter T apply,

the taxpayer may elect to allocate all or a portion of the

deduction allowable under subsection (a) to such persons. Such

allocation shall be equal to the person's ratable share of the

total amount allocated, determined on the basis of the person's

ownership interest in the taxpayer. The taxable income of the

taxpayer shall not be reduced under section 1382 by reason of

any amount to which the preceding sentence applies.

``(2) Form and effect of election.--An election under

paragraph (1) 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.

``(3) Written notice to owners.--If any portion of the

deduction available under subsection (a) is allocated to owners

under paragraph (1), the cooperative shall provide any owner

receiving an allocation written notice of the amount of the

allocation. <<NOTE: Deadline.>> Such notice shall be provided

before the date on which the return described in paragraph (2)

is due.

``(h) Reporting.--No deduction shall be allowed under subsection (a)

to any taxpayer for any taxable year unless such taxpayer files with the

Secretary a report containing such information with respect to the

operation of the refineries of the taxpayer as the Secretary shall

require.''.

(b) Conforming Amendments.--

(1) Section 1245(a) is amended by inserting ``179C,'' after

``179B,'' both places it appears in paragraphs (2)(C) and

(3)(C).

[[Page 119 STAT. 1015]]

(2) Section 263(a)(1) 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 inserting after

subparagraph (I) the following new subparagraph:

``(J) expenditures for which a deduction is allowed

under section 179C.''.

(3) Section 312(k)(3)(B) is amended by striking ``179 179A,

or 179B'' each place it appears in the heading and text and

inserting ``179, 179A, 179B, or 179C''.

(4) The table of sections for part VI of subchapter B of

chapter 1 is amended by inserting after the item relating to

section 179B the following new item:

``Sec. 179C. Election to expense certain refineries.''.

(c) Effective Date.--The <<NOTE: 26 USC 179C note.>> amendments made

by this section shall apply to properties placed in service after the

date of the enactment of this Act.

SEC. 1324. PASS THROUGH TO OWNERS OF DEDUCTION FOR CAPITAL COSTS

INCURRED BY SMALL REFINER COOPERATIVES IN COMPLYING WITH

ENVIRONMENTAL PROTECTION AGENCY SULFUR REGULATIONS.

(a) In General.--Section 179B (relating to deduction for capital

costs incurred in complying with Environmental Protection Agency sulfur

regulations) is amended by adding at the end the following new

subsection:

``(e) Election to Allocate Deduction to Cooperative Owner.--

``(1) In general.--If--

``(A) a small business refiner to which subsection

(a) applies is an organization to which part I of

subchapter T applies, and

``(B) one or more persons directly holding an

ownership interest in the refiner are organizations to

which part I of subchapter T apply,

the refiner may elect to allocate all or a portion of the

deduction allowable under subsection (a) to such persons. Such

allocation shall be equal to the person's ratable share of the

total amount allocated, determined on the basis of the person's

ownership interest in the taxpayer. The taxable income of the

refiner shall not be reduced under section 1382 by reason of any

amount to which the preceding sentence applies.

``(2) Form and effect of election.--An election under

paragraph (1) 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.

``(3) Written notice to owners.--If any portion of the

deduction available under subsection (a) is allocated to owners

under paragraph (1), the cooperative shall provide any owner

receiving an allocation written notice of the amount of the

allocation. <<NOTE: Deadline.>> Such notice shall be provided

before the date on which the return described in paragraph (2)

is due.''.

(b) Effective Date.--The <<NOTE: 26 USC 179B note.>> amendment made

by this section shall take effect as if included in the amendment made

by section 338(a) of the American Jobs Creation Act of 2004.

[[Page 119 STAT. 1016]]

SEC. 1325. NATURAL GAS DISTRIBUTION LINES TREATED AS 15-YEAR PROPERTY.

(a) In General.--Section 168(e)(3)(E) (defining 15-year property),

as amended by this Act, is amended by striking ``and'' at the end of

clause (vi), by striking the period at the end of clause (vii) and by

inserting ``, and'', and by adding at the end the following new clause:

``(viii) any natural gas distribution line the

original use of which commences with the taxpayer

after April 11, 2005, and which is placed in

service before January 1, 2011.''.

(b) 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 (E)(vii) the following new item:

``(E)(viii)................................................        35''.

(c) Effective <<NOTE: 26 USC 168 note.>> Date.--

(1) In general.--The amendments made by this section shall

apply to property placed in service after April 11, 2005.

(2) Exception.--The amendments made by this section shall

not apply to any property with respect to which the taxpayer or

a related party has entered into a binding contract for the

construction thereof on or before April 11, 2005, or, in the

case of self-constructed property, has started construction on

or before such date.

SEC. 1326. 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 (iii), by redesignating clause (iv) as clause (v), and

by inserting after clause (iii) the following new clause:

``(iv) any natural gas gathering line the

original use of which commences with the taxpayer

after April 11, 2005, and''.

(b) Natural Gas Gathering Line.--Subsection (i) of section 168 is

amended by inserting after paragraph (16) the following new paragraph:

``(17) 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, and

``(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,

[[Page 119 STAT. 1017]]

``(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)

(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)(iii) the following new item:

``(C)(iv)..................................................        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)(iv)''.

(e) Effective <<NOTE: 26 USC 56 note.>> Date.--

(1) In general.--The amendments made by this section shall

apply to property placed in service after April 11, 2005.

(2) Exception.--The amendments made by this section shall

not apply to any property with respect to which the taxpayer or

a related party has entered into a binding contract for the

construction thereof on or before April 11, 2005, or, in the

case of self-constructed property, has started construction on

or before such date.

SEC. 1327. 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

[[Page 119 STAT. 1018]]

``(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 <<NOTE: Contracts.>> 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--

[[Page 119 STAT. 1019]]

``(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 <<NOTE: 26 USC 141 note.>> amendments made

by this section shall apply to obligations issued after the date of the

enactment of this Act.

SEC. 1328. 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 one 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 75,000 barrels. For purposes

of this paragraph, the average daily refinery runs

[[Page 119 STAT. 1020]]

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 <<NOTE: 26 USC 613A note.>> amendment made

by this section shall apply to taxable years ending after the date of

the enactment of this Act.

SEC. 1329. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES.

(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 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) 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 with

respect to which geological and geophysical expenses are paid or

incurred 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.''.

(b) Conforming Amendment.--Section 263A(c)(3) is amended by

inserting ``167(h),'' after ``under section''.

(c) Effective Date.--The <<NOTE: 26 USC 167 note.>> 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.

Subtitle C--Conservation and Energy Efficiency Provisions

SEC. 1331. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

(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 179C the following new

section:

``SEC. 179D. 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 any taxable year shall not exceed

the excess (if any) of--

[[Page 119 STAT. 1021]]

``(1) the product of--

``(A) $1.80, and

``(B) the square footage of the building, over

``(2) the aggregate amount of the deductions under

subsection (a) with respect to the building for all prior

taxable years.

``(c) Definitions.--For purposes of this section--

``(1) Energy efficient commercial building property.--The

term `energy efficient commercial building property' means

property--

``(A) with respect to which depreciation (or

amortization in lieu of depreciation) is allowable,

``(B) which is installed on or in any building which

is--

``(i) located in the United States, and

``(ii) within the scope of Standard 90.1-2001,

``(C) which is installed as part of--

``(i) the interior lighting systems,

``(ii) the heating, cooling, ventilation, and

hot water systems, or

``(iii) the building envelope, and

``(D) which is certified in accordance with

subsection (d)(6) as being installed as part of a plan

designed to reduce the total annual energy and power

costs with respect to the interior 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), if--

``(i) the requirement of subsection (c)(1)(D)

is not met, but

``(ii) there is a certification in accordance

with paragraph (6) that any system referred to in

subsection (c)(1)(C) satisfies the energy-savings

targets established by the Secretary under

subparagraph (B) with respect to such system,

then the requirement of subsection (c)(1)(D) 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 `$.60' for

`$1.80'.

``(B) Regulations.--The Secretary, after

consultation with the Secretary of Energy, shall

establish a target for each system described in

subsection (c)(1)(C) which, if such targets were met for

all such systems, the building would meet the

requirements of subsection (c)(1)(D).

[[Page 119 STAT. 1022]]

``(2) Methods of calculation.--

The <<NOTE: Regulations.>> Secretary, after consultation with

the Secretary of Energy, shall promulgate regulations which

describe in detail methods for calculating and verifying energy

and power consumption and cost, based on the provisions of the

2005 California Nonresidential Alternative Calculation Method

Approval Manual.

``(3) Computer software.--

``(A) In general.--Any calculation under paragraph

(2) shall be prepared by qualified computer software.

``(B) Qualified computer software.--For purposes of

this paragraph, the term `qualified computer software'

means software--

``(i) for which the software designer has

certified that the software meets all procedures

and detailed methods for calculating energy and

power consumption and costs as required by the

Secretary,

``(ii) which provides such forms as required

to be filed by the Secretary in connection with

energy efficiency of property and the deduction

allowed under this section, and

``(iii) which provides a notice form which

documents the energy efficiency features of the

building and its projected annual energy costs.

``(4) Allocation of deduction for public property.--In the

case of energy efficient commercial building property installed

on or in property owned by a Federal, State, or local government

or a political subdivision thereof, the Secretary shall

promulgate a regulation to allow the allocation of the deduction

to the person primarily responsible for designing the property

in lieu of the owner of such property. Such person shall be

treated as the taxpayer for purposes of this section.

``(5) 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 as provided in the notice under

paragraph (3)(B)(iii).

``(6) 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 comparable, given the difference

between commercial and residential buildings, to the

requirements in the Mortgage Industry National

Accreditation Procedures for Home Energy Rating Systems.

``(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.

[[Page 119 STAT. 1023]]

``(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)(D)

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) 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 179D(e).''.

[[Page 119 STAT. 1024]]

(2) Section 1245(a), as amended by this Act, is amended by

inserting ``179D,'' after ``179C,'' 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 179D''.

(4) Section 263(a)(1), as amended by this Act, is amended by

striking ``or'' at the end of subparagraph (I), by striking the

period at the end of subparagraph (J) and inserting ``, or'',

and by inserting after subparagraph (J) the following new

subparagraph:

``(K) expenditures for which a deduction is allowed

under section 179D.''.

(5) Section 312(k)(3)(B), as amended by this Act, is amended

by striking ``179, 179A, 179B, or 179C'' each place it appears

in the heading and text and inserting ``179, 179A, 179B, 179C,

or 179D''.

(c) Clerical Amendment.--The table of sections for part VI of

subchapter B of chapter 1, as amended by this Act, is amended by

inserting after section 179C the following new item:

``Sec. 179D. Energy efficient commercial buildings deduction.''.

(d) Effective Date.--The <<NOTE: 26 USC 179D note.>> amendments made

by this section shall apply to property placed in service after December

31, 2005.

SEC. 1332. 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), as amended by this Act, is

amended by adding at the end the following new section:

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

``(a) Allowance of Credit.--

``(1) In general.--For purposes of section 38, in the case

of an eligible contractor, the new energy efficient home credit

for the taxable year is the applicable amount for each qualified

new energy efficient home which is--

``(A) constructed by the eligible contractor, and

``(B) acquired by a person from such eligible

contractor for use as a residence during the taxable

year.

``(2) Applicable amount.--For purposes of paragraph (1), the

applicable amount is an amount equal to--

``(A) in the case of a dwelling unit described in

paragraph (1) or (2) of subsection (c), $2,000, and

``(B) in the case of a dwelling unit described in

paragraph (3) of subsection (c), $1,000.

``(b) 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.

``(2) Qualified new energy efficient home.--The term

`qualified new energy efficient home' means a dwelling unit--

``(A) located in the United States,

[[Page 119 STAT. 1025]]

``(B) the construction of which is substantially

completed after the date of the enactment of this

section, and

``(C) which meets the energy saving requirements of

subsection (c).

``(3) Construction.--The term `construction' includes

substantial reconstruction and rehabilitation.

``(4) Acquire.--The term `acquire' includes purchase.

``(c) Energy Saving Requirements.--A dwelling unit meets the energy

saving requirements of this subsection if such unit is--

``(1) certified--

``(A) to have a level of annual heating and cooling

energy consumption which is at least 50 percent below

the annual level of heating and cooling energy

consumption of a comparable dwelling unit--

``(i) which is constructed in accordance with

the standards of chapter 4 of the 2003

International Energy Conservation Code, as such

Code (including supplements) is in effect on the

date of the enactment of this section, and

``(ii) for which the heating and cooling

equipment efficiencies correspond to the minimum

allowed under the regulations established by the

Department of Energy pursuant to the National

Appliance Energy Conservation Act of 1987 and in

effect at the time of completion of construction,

and

``(B) to have building envelope component

improvements account for at least \1/5\ of such 50

percent,

``(2) a manufactured home which conforms to Federal

Manufactured Home Construction and Safety Standards (section

3280 of title 24, Code of Federal Regulations) and which meets

the requirements of paragraph (1), or

``(3) a manufactured home which conforms to Federal

Manufactured Home Construction and Safety Standards (section

3280 of title 24, Code of Federal Regulations) and which--

``(A) meets the requirements of paragraph (1)

applied by substituting `30 percent' for `50 percent'

both places it appears therein and by substituting `\1/

3\' for `\1/5\' in subparagraph (B) thereof, or

``(B) meets the requirements established by the

Administrator of the Environmental Protection Agency

under the Energy Star Labeled Homes program.

``(d) Certification.--

``(1) Method of certification.--A certification described in

subsection (c) shall be made in accordance with guidance

prescribed by the Secretary, after consultation with the

Secretary of Energy. Such guidance shall specify procedures and

methods for calculating energy and cost savings.

``(2) Form.--Any certification described in subsection (c)

shall be made in writing 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.

[[Page 119 STAT. 1026]]

``(e) Basis Adjustment.--For purposes of this subtitle, if a credit

is allowed under this section in connection with any expenditure for 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) Coordination With Investment Credit.--For purposes of this

section, expenditures taken into account under section 47 or 48(a) shall

not be taken into account under this section.

``(g) Termination.--This section shall not apply to any qualified

new energy efficient home acquired 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 (21), by striking

the period at the end of paragraph (22) and inserting ``, plus'', and by

adding at the end the following new paragraph:

``(23) the new energy efficient home credit determined under

section 45L(a).''.

(c) Basis Adjustment.--Subsection (a) of section 1016, 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 new paragraph:

``(33) to the extent provided in section 45L(e), in the case

of amounts with respect to which a credit has been allowed under

section 45L.''.

(d) Deduction for Certain Unused Business Credits.--Section 196(c)

(defining qualified business credits) 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 after paragraph

(12) the following new paragraph:

``(13) the new energy efficient home credit determined under

section 45L(a).''.

(e) 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. 45L. New energy efficient home credit.''.

(f) Effective Date.--The <<NOTE: 26 USC 38 note.>> amendments made

by this section shall apply to qualified new energy efficient homes

acquired after December 31, 2005, in taxable years ending after such

date.

SEC. 1333. CREDIT FOR CERTAIN NONBUSINESS ENERGY 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. NONBUSINESS ENERGY 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) 10 percent of the amount paid or incurred by the

taxpayer for qualified energy efficiency improvements installed

during such taxable year, and

``(2) the amount of the residential energy property

expenditures paid or incurred by the taxpayer during such

taxable year.

``(b) Limitations.--

[[Page 119 STAT. 1027]]

``(1) Lifetime limitation.--The credit allowed under this

section with respect to any taxpayer for any taxable year shall

not exceed the excess (if any) of $500 over the aggregate

credits allowed under this section with respect to such taxpayer

for all prior taxable years.

``(2) Windows.--In the case of amounts paid or incurred for

components described in subsection (c)(3)(B) by any taxpayer for

any taxable year, the credit allowed under this section with

respect to such amounts for such year shall not exceed the

excess (if any) of $200 over the aggregate credits allowed under

this section with respect to such amounts for all prior taxable

years.

``(3) Limitation on residential energy property

expenditures.--The amount of the credit allowed under this

section by reason of subsection (a)(2) shall not exceed--

``(A) $50 for any advanced main air circulating fan,

``(B) $150 for any qualified natural gas, propane,

or oil furnace or hot water boiler, and

``(C) $300 for any item of energy-efficient building

property.

``(c) Qualified Energy Efficiency Improvements.--For purposes of

this section--

``(1) In general.--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--

``(A) such component is installed in or on a

dwelling unit located in the United States and owned and

used by the taxpayer as the taxpayer's principal

residence (within the meaning of section 121),

``(B) the original use of such component commences

with the taxpayer, and

``(C) such component reasonably can be expected to

remain in use for at least 5 years.

``(2) 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.

``(3) 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).

``(d) Residential Energy Property Expenditures.--For purposes of

this section--

[[Page 119 STAT. 1028]]

``(1) In general.--The term `residential energy property

expenditures' means expenditures made by the taxpayer for

qualified energy property which is--

``(A) installed on or in connection with a dwelling

unit located in the United States and owned and used by

the taxpayer as the taxpayer's principal residence

(within the meaning of section 121), and

``(B) originally placed in service by the taxpayer.

Such term includes expenditures for labor costs properly

allocable to the onsite preparation, assembly, or original

installation of the property.

``(2) Qualified energy property.--

``(A) In general.--The term `qualified energy

property' means--

``(i) energy-efficient building property,

``(ii) a qualified natural gas, propane, or

oil furnace or hot water boiler, or

``(iii) an advanced main air circulating fan.

``(B) Performance and quality standards.--Property

described under subparagraph (A) shall meet the

performance and quality standards, and the certification

requirements (if any), which--

``(i) have been prescribed by the Secretary by

regulations (after consultation with the Secretary

of Energy or the Administrator of the

Environmental Protection Agency, as appropriate),

and

``(ii) are in effect at the time of the

acquisition of the property, or at the time of the

completion of the construction, reconstruction, or

erection of the property, as the case may be.

``(C) Requirements for standards.--The standards and

requirements prescribed by the Secretary under

subparagraph (B)--

``(i) in the case of the energy efficiency

ratio (EER) for central air conditioners and

electric heat pumps--

``(I) shall require measurements to

be based on published data which is

tested by manufacturers at 95 degrees

Fahrenheit, and

``(II) may be based on the certified

data of the Air Conditioning and

Refrigeration Institute that are

prepared in partnership with the

Consortium for Energy Efficiency, and

``(ii) in the case of geothermal heat pumps--

``(I) shall be based on testing

under the conditions of ARI/ISO Standard

13256-1 for Water Source Heat Pumps or

ARI 870 for Direct Expansion GeoExchange

Heat Pumps (DX), as appropriate, and

``(II) shall include evidence that

water heating services have been

provided through a desuperheater or

integrated water heating system

connected to the storage water heater

tank.

``(3) Energy-efficient building property.--The term `energy-

efficient building property' means--

``(A) an electric heat pump water heater which

yields an energy factor of at least 2.0 in the standard

Department of Energy test procedure,

[[Page 119 STAT. 1029]]

``(B) an electric heat pump which has a heating

seasonal performance factor (HSPF) of at least 9, a

seasonal energy efficiency ratio (SEER) of at least 15,

and an energy efficiency ratio (EER) of at least 13,

``(C) a geothermal heat pump which--

``(i) in the case of a closed loop product,

has an energy efficiency ratio (EER) of at least

14.1 and a heating coefficient of performance

(COP) of at least 3.3,

``(ii) in the case of an open loop product,

has an energy efficiency ratio (EER) of at least

16.2 and a heating coefficient of performance

(COP) of at least 3.6, and

``(iii) in the case of a direct expansion (DX)

product, has an energy efficiency ratio (EER) of

at least 15 and a heating coefficient of

performance (COP) of at least 3.5,

``(D) a central air conditioner which achieves the

highest efficiency tier established by the Consortium

for Energy Efficiency, as in effect on January 1, 2006,

and

``(E) a natural gas, propane, or oil water heater

which has an energy factor of at least 0.80.

``(4) Qualified natural gas, propane, or oil furnace or hot

water boiler.--The term `qualified natural gas, propane, or oil

furnace or hot water boiler' means a natural gas, propane, or

oil furnace or hot water boiler which achieves an annual fuel

utilization efficiency rate of not less than 95.

``(5) Advanced main air circulating fan.--The term `advanced

main air circulating fan' means a fan used in a natural gas,

propane, or oil furnace and which has an annual electricity use

of no more than 2 percent of the total annual energy use of the

furnace (as determined in the standard Department of Energy test

procedures).

``(e) Special Rules.--For purposes of this section--

``(1) Application of rules.--Rules similar to the rules

under paragraphs (4), (5), (6), (7), (8), and (9) of section

25D(e) shall apply.

``(2) Joint ownership of energy items.--

``(A) In general.--Any expenditure otherwise

qualifying as an expenditure under this section shall

not be treated as failing to so qualify merely because

such expenditure was made with respect to two or more

dwelling units.

``(B) Limits applied separately.--In the case of any

expenditure described in subparagraph (A), the amount of

the credit allowable under subsection (a) shall (subject

to paragraph (1)) be computed separately with respect to

the amount of the expenditure made for each dwelling

unit.

``(f) 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.

``(g) Termination.--This section shall not apply with respect to any

property placed in service after December 31, 2007.''.

(b) Conforming Amendments.--

[[Page 119 STAT. 1030]]

(1) Subsection (a) of section 1016, 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 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. Nonbusiness energy property.''.

(c) Effective Dates.--The <<NOTE: 26 USC 25C note.>> amendments made

by this section shall apply to property placed in service after December

31, 2005.

SEC. 1334. 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. 45M. ENERGY EFFICIENT APPLIANCE CREDIT.

``(a) General Rule.--

``(1) In general.--For purposes of section 38, the energy

efficient appliance credit determined under this section for any

taxable year is an amount equal to the sum of the credit amounts

determined under paragraph (2) for each type of qualified energy

efficient appliance produced by the taxpayer during the calendar

year ending with or within the taxable year.

``(2) Credit amounts.--The credit amount determined for any

type of qualified energy efficient appliance is--

``(A) the applicable amount determined under

subsection (b) with respect to such type, multiplied by

``(B) the eligible production for such type.

``(b) Applicable Amount.--

``(1) In general.--For purposes of subsection (a)--

``(A) Dishwashers.--The applicable amount is the

energy savings amount in the case of a dishwasher

which--

``(i) is manufactured in calendar year 2006 or

2007, and

``(ii) meets the requirements of the Energy

Star program which are in effect for dishwashers

in 2007.

``(B) Clothes washers.--The applicable amount is

$100 in the case of a clothes washer which--

``(i) is manufactured in calendar year 2006 or

2007, and

``(ii) meets the requirements of the Energy

Star program which are in effect for clothes

washers in 2007.

``(C) Refrigerators.--

``(i) 15 percent savings.--The applicable

amount is $75 in the case of a refrigerator

which--

``(I) is manufactured in calendar

year 2006, and

``(II) consumes at least 15 percent

but not more than 20 percent less

kilowatt hours per year than the 2001

energy conservation standards.

[[Page 119 STAT. 1031]]

``(ii) 20 percent savings.--The applicable

amount is $125 in the case of a refrigerator

which--

``(I) is manufactured in calendar

year 2006 or 2007, and

``(II) consumes at least 20 percent

but not more than 25 percent less

kilowatt hours per year than the 2001

energy conservation standards.

``(iii) 25 percent savings.--The applicable

amount is $175 in the case of a refrigerator

which--

``(I) is manufactured in calendar

year 2006 or 2007, and

``(II) consumes at least 25 percent

less kilowatt hours per year than the

2001 energy conservation standards.

``(2) Energy savings amount.--For purposes of paragraph

(1)(A)--

``(A) In general.--The energy savings amount is the

lesser of--

``(i) the product of--

``(I) $3, and

``(II) 100 multiplied by the energy

savings percentage, or

``(ii) $100.

``(B) Energy savings percentage.--For purposes of

subparagraph (A), the energy savings percentage is the

ratio of--

``(i) the EF required by the Energy Star

program for dishwashers in 2007 minus the EF

required by the Energy Star program for

dishwashers in 2005, to

``(ii) the EF required by the Energy Star

program for dishwashers in 2007.

``(c) Eligible Production.--

``(1) In general.--Except as provided in paragraphs (2), the

eligible production in a calendar year with respect to each type

of energy efficient appliance is the excess of--

``(A) the number of appliances of such type which

are produced by the taxpayer in the United States during

such calendar year, over

``(B) the average number of appliances of such type

which were produced by the taxpayer (or any predecessor)

in the United States during the preceding 3-calendar

year period.

``(2) Special rule for refrigerators.--The eligible

production in a calendar year with respect to each type of

refrigerator described in subsection (b)(1)(C) is the excess

of--

``(A) the number of appliances of such type which

are produced by the taxpayer in the United States during

such calendar year, over

``(B) 110 percent of the average number of

appliances of such type which were produced by the

taxpayer (or any predecessor) in the United States

during the preceding 3-calendar year period.

``(d) Types of Energy Efficient Appliance.--For purposes of this

section, the types of energy efficient appliances are--

``(1) dishwashers described in subsection (b)(1)(A),

``(2) clothes washers described in subsection (b)(1)(B),

[[Page 119 STAT. 1032]]

``(3) refrigerators described in subsection (b)(1)(C)(i),

``(4) refrigerators described in subsection (b)(1)(C)(ii),

and

``(5) refrigerators described in subsection (b)(1)(C)(iii).

``(e) Limitations.--

``(1) Aggregate credit amount allowed.--The aggregate amount

of credit allowed under subsection (a) with respect to a

taxpayer for any taxable year shall not exceed $75,000,000

reduced by the amount of the credit allowed under subsection (a)

to the taxpayer (or any predecessor) for all prior taxable

years.

``(2) Amount allowed for 15 percent savings refrigerators.--

In the case of refrigerators described in subsection

(b)(1)(C)(i), the aggregate amount of the credit allowed under

subsection (a) with respect to a taxpayer for any taxable year

shall not exceed $20,000,000.

``(3) 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 in which the credit is

determined.

``(4) Gross receipts.--For <<NOTE: Applicability.>> purposes

of this subsection, the rules of paragraphs (2) and (3) of

section 448(c) shall apply.

``(f) Definitions.--For purposes of this section--

``(1) Qualified energy efficient appliance.--The term

`qualified energy efficient appliance' means--

``(A) any dishwasher described in subsection

(b)(1)(A),

``(B) any clothes washer described in subsection

(b)(1)(B), and

``(C) any refrigerator described in subsection

(b)(1)(C).

``(2) Dishwasher.--The term `dishwasher' means a residential

dishwasher subject to the energy conservation standards

established by the Department of Energy.

``(3) Clothes washer.--The term `clothes washer' means a

residential model clothes washer, including a residential style

coin operated washer.

``(4) Refrigerator.--The term `refrigerator' means a

residential model automatic defrost refrigerator-freezer which

has an internal volume of at least 16.5 cubic feet.

``(5) EF.--The term `EF' means the energy factor established

by the Department of Energy for compliance with the Federal

energy conservation standards.

``(6) Produced.--The term `produced' includes manufactured.

``(7) 2001 energy conservation standard.--The term `2001

energy conservation standard' means the energy conservation

standards promulgated by the Department of Energy and effective

July 1, 2001.

``(g) Special Rules.--For purposes of this section--

``(1) In general.--Rules <<NOTE: Applicability.>> similar to

the rules of subsections (c), (d), and (e) of section 52 shall

apply.

``(2) Controlled group.--

``(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 producer.

[[Page 119 STAT. 1033]]

``(B) Inclusion of <<NOTE: Applicability.>> 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.

``(3) Verification.--No amount shall be allowed as a credit

under subsection (a) with respect to which the taxpayer has not

submitted such information or certification as the Secretary, in

consultation with the Secretary of Energy, determines

necessary.''.

(b) Conforming Amendment.--Section 38(b) (relating to general

business credit), as amended by this Act, is amended by striking

``plus'' at the end of paragraph (22), by striking the period at the end

of paragraph (23) and inserting ``, plus'', and by adding at the end the

following new paragraph:

``(24) the energy efficient appliance credit determined

under section 45M(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. 45M. Energy efficient appliance credit.''.

(d) Effective Date.--The <<NOTE: 26 USC 38 note.>> amendments made

by this section shall apply to appliances produced after December 31,

2005.

SEC. 1335. 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), as amended by this Act, is

amended by inserting after section 25C the following new section:

``SEC. 25D. 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) 30 percent of the qualified photovoltaic property

expenditures made by the taxpayer during such year,

``(2) 30 percent of the qualified solar water heating

property expenditures made by the taxpayer during such year, and

``(3) 30 percent of the qualified fuel cell property

expenditures made by the taxpayer during such year.

``(b) Limitations.--

``(1) Maximum credit.--The credit allowed under subsection

(a) for any taxable year shall not exceed--

``(A) $2,000 with respect to any qualified

photovoltaic property expenditures,

``(B) $2,000 with respect to any qualified solar

water heating property expenditures, and

``(C) $500 with respect to each half kilowatt of

capacity of qualified fuel cell property (as defined in

section 48(c)(1)) for which qualified fuel cell property

expenditures are made.

``(2) Certification of solar water heating property.--No

credit shall be allowed under this section for an item of

property described in subsection (d)(1) unless such property is

certified for performance by the non-profit Solar Rating

Certification Corporation or a comparable entity endorsed by the

government of the State in which such property is installed.

[[Page 119 STAT. 1034]]

``(c) Carryforward of Unused Credit.--If the credit allowable under

subsection (a) exceeds the limitation imposed by section 26(a) for such

taxable year reduced by the sum of the credits allowable under this

subpart (other than this section), such excess shall be carried to the

succeeding taxable year and added to the credit allowable under

subsection (a) for such succeeding taxable year.

``(d) 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 to heat water for use in a

dwelling unit located in the United States and used as a

residence by the taxpayer if at least half of the energy used by

such property for such purpose is derived from the sun.

``(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 located in the United

States and used as a residence by the taxpayer.

``(3) Qualified fuel cell property expenditure.--The term

`qualified fuel cell property expenditure' means an expenditure

for qualified fuel cell property (as defined in section

48(c)(1)) installed on or in connection with a dwelling unit

located in the United States and used as a principal residence

(within the meaning of section 121) by the taxpayer.

``(e) Special Rules.--For purposes of this section--

``(1) Labor costs.--Expenditures for labor costs properly

allocable to the onsite preparation, assembly, or original

installation of the property described in subsection (d) and for

piping or wiring to interconnect such property to the dwelling

unit shall be taken into account for purposes of this section.

``(2) 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 (d) solely because it constitutes a

structural component of the structure on which it is installed.

``(3) 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.

``(4) 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 two or more

individuals the following rules shall apply:

``(A) The amount of the credit allowable, under

subsection (a) by reason of expenditures (as the case

may be) 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

[[Page 119 STAT. 1035]]

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) <<NOTE: Applicability.>> shall be applied separately

with respect to expenditures described in paragraphs

(1), (2), and (3) of subsection (d).

``(5) 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 his tenant-stockholder's proportionate

share (as defined in section 216(b)(3)) of any expenditures of

such corporation.

``(6) 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.

``(7) Allocation in certain cases.--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.

``(8) 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.

``(9) 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)).

``(f) 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.

[[Page 119 STAT. 1036]]

``(g) Termination.--The credit allowed under this section shall not

apply to property placed in service after December 31, 2007.''.

(b) Conforming Amendments.--

(1) Section 23(c) is amended by striking ``this section and

section 1400C'' and inserting ``this section, section 25D, and

section 1400C''.

(2) Section 25(e)(1)(C) is amended by striking ``this

section and sections 23 and 1400C'' and inserting ``other than

this section, section 23, section 25D, and section 1400C''.

(3) Section 1400C(d) is amended by striking ``this section''

and inserting ``this section and section 25D''.

(4) Section 1016(a), 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) 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.''.

(5) 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. Residential energy efficient property.''.

(c) Effective Dates.--The <<NOTE: 26 USC 23 note.>> amendments made

by this section shall apply to property placed in service after December

31, 2005, in taxable years ending after such date.

SEC. 1336. CREDIT FOR BUSINESS INSTALLATION OF QUALIFIED FUEL CELLS AND

STATIONARY MICROTURBINE POWER PLANTS.

(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 or

qualified microturbine property,''.

(b) Qualified Fuel Cell Property; Qualified Microturbine Property.--

Section 48 (relating to energy credit) is amended by adding at the end

the following new subsection:

``(c) Qualified Fuel Cell Property; Qualified Microturbine

Property.--For purposes of this subsection--

``(1) Qualified fuel cell property.--

``(A) In general.--The term `qualified fuel cell

property' means a fuel cell power plant which--

``(i) has a nameplate capacity of at least 0.5

kilowatt of electricity using an electrochemical

process, and

``(ii) has an electricity-only generation

efficiency greater than 30 percent.

``(B) Limitation.--In the case of qualified fuel

cell property placed in service during the taxable year,

the credit otherwise determined under paragraph (1) for

such year with respect to such property shall not exceed

an amount equal to $500 for each 0.5 kilowatt of

capacity of such property.

``(C) Fuel cell power plant.--The term `fuel cell

power plant' means an integrated system comprised of

[[Page 119 STAT. 1037]]

a fuel cell stack assembly and associated balance of

plant components which converts a fuel into electricity

using electrochemical means.

``(D) Special rule.--The first sentence of the

matter in subsection (a)(3) which follows subparagraph

(D) thereof shall not apply to qualified fuel cell

property which is used predominantly in the trade or

business of the furnishing or sale of telephone service,

telegraph service by means of domestic telegraph

operations, or other telegraph services (other than

international telegraph services).

``(E) Termination.--The term `qualified fuel cell

property' shall not include any property for any period

after December 31, 2007.

``(2) Qualified microturbine property.--

``(A) In general.--The term `qualified microturbine

property' means a stationary microturbine power plant

which--

``(i) has a nameplate capacity of less than

2,000 kilowatts, and

``(ii) has an electricity-only generation

efficiency of not less than 26 percent at

International Standard Organization conditions.

``(B) Limitation.--In the case of qualified

microturbine property placed in service during the

taxable year, the credit otherwise determined under

paragraph (1) for such year with respect to such

property shall not exceed an amount equal $200 for each

kilowatt of capacity of such property.

``(C) Stationary microturbine power plant.--The term

`stationary microturbine power plant' means an

integrated system comprised of a gas turbine engine, a

combustor, a recuperator or regenerator, a generator or

alternator, and associated balance of plant components

which converts a fuel into electricity and thermal

energy. Such term also includes all secondary components

located between the existing infrastructure for fuel

delivery and the existing infrastructure for power

distribution, including equipment and controls for

meeting relevant power standards, such as voltage,

frequency, and power factors.

``(D) Special rule.--The first sentence of the

matter in subsection (a)(3) which follows subparagraph

(D) thereof shall not apply to qualified microturbine

property which is used predominantly in the trade or

business of the furnishing or sale of telephone service,

telegraph service by means of domestic telegraph

operations, or other telegraph services (other than

international telegraph services).

``(E) Termination.--The term `qualified microturbine

property' shall not include any property for any period

after December 31, 2007.''.

(c) Energy Percentage.--Section 48(a)(2)(A) (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, 30 percent, and

``(ii) in the case of any other energy

property, 10 percent.''.

[[Page 119 STAT. 1038]]

(d) Conforming Amendment.--Section 48(a)(1) is amended by inserting

``except as provided in paragraph (1)(B) or (2)(B) of subsection (d),''

before ``the energy''.

(e) Effective Date.--The <<NOTE: 26 USC 48 note.>> amendments made

by this section shall apply to periods after December 31, 2005, 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. 1337. BUSINESS SOLAR INVESTMENT TAX CREDIT.

(a) Increase in Energy Percentage.--Section 48(a)(2)(A) (relating to

energy percentage), as amended by this Act, is amended to read as

follows:

``(A) In general.--The energy percentage is--

``(i) 30 percent in the case of--

``(I) qualified fuel cell property,

``(II) energy property described in

paragraph (3)(A)(i) but only with

respect to periods ending before January

1, 2008, and

``(III) energy property described in

paragraph (3)(A)(ii), and

``(ii) in the case of any energy property to

which clause (i) does not apply, 10 percent.''.

(b) Hybrid Solar Lighting Systems.--Subparagraph (A) of section

48(a)(3) is amended by striking ``or'' at the end of clause (i), by

redesignating clause (ii) as clause (iii), and by inserting after clause

(i) the following new clause:

``(ii) equipment which uses solar energy to

illuminate the inside of a structure using fiber-

optic distributed sunlight but only with respect

to periods ending before January 1, 2008, or''.

(c) Limitation on Use of Solar Energy to Heat Swimming Pools.--

Clause (i) of section 48(a)(3)(A) is amended by inserting ``excepting

property used to generate energy for the purposes of heating a swimming

pool,'' after ``solar process heat,''.

(d) Effective Date.--The <<NOTE: 26 USC 48 note.>> amendments made

by this section shall apply to periods after December 31, 2005, 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).

Subtitle D--Alternative Motor Vehicles and Fuels Incentives

SEC. 1341. 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 new section:

``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--

[[Page 119 STAT. 1039]]

``(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 is--

``(A) $8,000 ($4,000 in the case of a vehicle placed

in service after December 31, 2009), 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) $20,000, 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.

``(2) Increase for fuel efficiency.--

``(A) In general.--The amount determined under

paragraph (1)(A) with respect to a new qualified fuel

cell motor vehicle which is a passenger automobile or

light truck shall be increased by--

``(i) $1,000, if such vehicle achieves at

least 150 percent but less than 175 percent of the

2002 model year city fuel economy,

``(ii) $1,500, if such vehicle achieves at

least 175 percent but less than 200 percent of the

2002 model year city fuel economy,

``(iii) $2,000, if such vehicle achieves at

least 200 percent but less than 225 percent of the

2002 model year city fuel economy,

``(iv) $2,500, if such vehicle achieves at

least 225 percent but less than 250 percent of the

2002 model year city fuel economy,

``(v) $3,000, if such vehicle achieves at

least 250 percent but less than 275 percent of the

2002 model year city fuel economy,

``(vi) $3,500, if such vehicle achieves at

least 275 percent but less than 300 percent of the

2002 model year city fuel economy, and

``(vii) $4,000, if such vehicle achieves at

least 300 percent of the 2002 model year city fuel

economy.

``(B) 2002 model year city fuel economy.--For

purposes of subparagraph (A), 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:

[[Page 119 STAT. 1040]]

The 2002 model year city..................

``If vehicle inertiafuel economy is:..........................

class is:

1,500 or 1,750 lbs                              45.2 mpg

2,000 lbs                                       39.6 mpg

2,250 lbs                                       35.2 mpg

2,500 lbs                                       31.7 mpg

2,750 lbs                                       28.8 mpg

3,000 lbs                                       26.4 mpg

3,500 lbs                                       22.6 mpg

4,000 lbs                                       19.8 mpg

4,500 lbs                                       17.6 mpg

5,000 lbs                                       15.9 mpg

5,500 lbs                                       14.4 mpg

6,000 lbs                                       13.2 mpg

6,500 lbs                                       12.2 mpg

7,000 to 8,500 lbs                             11.3 mpg.

``(ii) In the case of a light truck:

The 2002 model year city..................

``If vehicle inertiafuel economy is:..........................

class is:

1,500 or 1,750 lbs                              39.4 mpg

2,000 lbs                                       35.2 mpg

2,250 lbs                                       31.8 mpg

2,500 lbs                                       29.0 mpg

2,750 lbs                                       26.8 mpg

3,000 lbs                                       24.9 mpg

3,500 lbs                                       21.8 mpg

4,000 lbs                                       19.4 mpg

4,500 lbs                                       17.6 mpg

5,000 lbs                                       16.1 mpg

5,500 lbs                                       14.8 mpg

6,000 lbs                                       13.7 mpg

6,500 lbs                                       12.8 mpg

7,000 to 8,500 lbs                             12.1 mpg.

``(C) Vehicle inertia weight class.--For purposes of

subparagraph (B), 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.).

``(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 1 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 on or after the date of the

enactment of this section a certificate that such

vehicle meets or exceeds the Bin 5 Tier II emission

level 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,

[[Page 119 STAT. 1041]]

``(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 for the taxable year is the credit amount

determined under paragraph (2) with respect to a new advanced

lean burn technology motor vehicle placed in service by the

taxpayer during the taxable year.

``(2) Credit amount.--

``(A) Fuel economy.--

``(i) In general.--The credit amount

determined under this paragraph shall be

determined in accordance with the following table:

``In the case of a vehicle whiThe 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                              $400

percent

At least 150 percent but less than 175                              $800

percent

At least 175 percent but less than 200                            $1,200

percent

At least 200 percent but less than 225                            $1,600

percent

At least 225 percent but less than 250                            $2,000

percent

At least 250 percent                                             $2,400.

``(ii) 2002 model year city fuel economy.--For

purposes of clause (i), the 2002 model year city

fuel economy with respect to a vehicle shall be

determined on a gasoline gallon equivalent basis

as determined by the Administrator of the

Environmental Protection Agency using the tables

provided in subsection (b)(2)(B) with respect to

such vehicle.

``(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 whiThe 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,

[[Page 119 STAT. 1042]]

``(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 for the taxable year is the credit amount determined

under paragraph (2) with respect to a new qualified hybrid motor

vehicle placed in service by the taxpayer during the taxable

year.

``(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).

[[Page 119 STAT. 1043]]

``(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

[[Page 119 STAT. 1044]]

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 <<NOTE: Applicability.>> 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 of more than 8,500 pounds and not

more than 14,000 pounds, and

``(III) 15 percent in the case of a

vehicle in excess of 14,000 pounds,

``(iv) <<NOTE: Applicability.>> 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 <<NOTE: Applicability.>> 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

[[Page 119 STAT. 1045]]

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) 50 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 weighs more than

14,000 pounds gross vehicle weight rating, the most stringent

standard available shall be such standard available for

certification on the date of the enactment of the Energy Tax

Incentives Act of 2005.

``(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,

[[Page 119 STAT. 1046]]

``(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.

[[Page 119 STAT. 1047]]

``(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 December 31, 2005, is at

least 60,000.

``(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 <<NOTE: Applicability.>> 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 (described in subsection (d)(2)(A)) and any new

advanced lean burn technology motor vehicle.

``(g) Application With Other Credits.--

``(1) Business credit treated as part of general business

credit.--So much of the credit which would be allowed under

subsection (a) for any taxable year (determined without regard

to this subsection) that is attributable to property of a

character subject to an allowance for depreciation shall be

treated as a credit listed in section 38(b) for such taxable

year (and not allowed under subsection (a)).

``(2) Personal credit.--The credit allowed under subsection

(a) (after the application of paragraph (1)) for any taxable

year shall not exceed the excess (if any) of--

``(A) the regular tax reduced by the sum of the

credits allowable under subpart A and sections 27 and

30, over

``(B) the tentative minimum tax 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) City fuel economy.--The city fuel economy with respect

to any vehicle shall be measured in a manner which is

substantially similar to the manner city fuel economy is

measured in accordance with procedures under part 600 of

[[Page 119 STAT. 1048]]

subchapter Q of chapter I of title 40, Code of Federal

Regulations, as in effect on the date of the enactment of this

section.

``(3) Other terms.--The terms `automobile', `passenger

automobile', `medium duty passenger vehicle', `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.).

``(4) Reduction in basis.--For purposes of this subtitle,

the basis of any property for which a credit is allowable under

subsection (a) shall be reduced by the amount of such credit so

allowed (determined without regard to subsection (g)).

``(5) No double benefit.--The amount of any deduction or

other credit allowable under this chapter--

``(A) for any incremental cost taken into account in

computing the amount of the credit determined under

subsection (e) shall be reduced by the amount of such

credit attributable to such cost, and

``(B) with respect to a vehicle described under

subsection (b) or (c), shall be reduced by the amount of

credit allowed under subsection (a) for such vehicle for

the taxable year.

``(6) Property used by tax-exempt entity.--In the case of a

vehicle whose use is described in paragraph (3) or (4) of

section 50(b) and which is not subject to a lease, the person

who sold such vehicle to the person or entity using such vehicle

shall be treated as the taxpayer that placed such vehicle in

service, but only if such person clearly discloses to such

person or entity in a document the amount of any credit

allowable under subsection (a) with respect to such vehicle

(determined without regard to subsection (g)).

``(7) Property used outside united states, etc., not

qualified.--No credit shall be allowable under subsection (a)

with respect to any property referred to in section 50(b)(1) or

with respect to the portion of the cost of any property taken

into account under section 179.

``(8) Recapture.--The <<NOTE: Regulations.>> 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).

``(9) Election to not 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) Interaction with air quality and 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--

``(A) the applicable provisions of the Clean Air Act

for the applicable make and model year of the vehicle

(or applicable air quality provisions of State law in

the case of a State which has adopted such provision

under a waiver under section 209(b) of the Clean Air

Act), and

``(B) the motor vehicle safety provisions of

sections 30101 through 30169 of title 49, United States

Code.

``(i) Regulations.--

[[Page 119 STAT. 1049]]

``(1) In general.--Except as provided in paragraph (2), the

Secretary shall promulgate such regulations as necessary to

carry out the provisions of this section.

``(2) Coordination in prescription of certain regulations.--

The Secretary of the Treasury, in 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

purchased after--

``(1) in the case of a new qualified fuel cell motor vehicle

(as described in subsection (b)), December 31, 2014,

``(2) in the case of a new advanced lean burn technology

motor vehicle (as described in subsection (c)) or a new

qualified hybrid motor vehicle (as described in subsection

(d)(2)(A)), December 31, 2010,

``(3) in the case of a new qualified hybrid motor vehicle

(as described in subsection (d)(2)(B)), December 31, 2009, and

``(4) in the case of a new qualified alternative fuel

vehicle (as described in subsection (e)), December 31, 2010.''.

(b) Conforming Amendments.--

(1) Section 38(b), as amended by this Act, is amended by

striking ``plus'' at the end of paragraph (23), by striking the

period at the end of paragraph (24) and inserting ``, and'', and

by adding at the end the following new paragraph:

``(25) the portion of the alternative motor vehicle credit

to which section 30B(g)(1) applies.''.

(2) Section 1016(a), as amended by this Act, is amended by

striking ``and'' at the end of paragraph (34), by striking the

period at the end of paragraph (35) and inserting ``, and'', and

by adding at the end the following new paragraph:

``(36) to the extent provided in section 30B(h)(4).''.

(3) Section 55(c)(2), as amended by this Act, is amended by

inserting ``30B(g)(2),'' after ``30(b)(2),''.

(4) Section 6501(m) is amended by inserting ``30B(h)(9),''

after ``30(d)(4),''.

(5) 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 new item:

``Sec. 30B. Alternative motor vehicle credit.''.

(c) Effective Date.--The <<NOTE: 26 USC 30B note.>> amendments made

by this section shall apply to property placed in service after December

31, 2005, in taxable years ending after such date.

SEC. 1342. CREDIT FOR INSTALLATION OF ALTERNATIVE FUELING STATIONS.

(a) In General.--Subpart B of part IV of subchapter A of chapter 1

(relating to other credits), as amended by this Act, is amended by

adding at the end the following new section:

``SEC. 30C. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

``(a) Credit Allowed.--There shall be allowed as a credit against

the tax imposed by this chapter for the taxable year an amount equal to

30 percent of the cost of any qualified alternative

[[Page 119 STAT. 1050]]

fuel vehicle refueling property placed in service by the taxpayer during

the taxable year.

``(b) Limitation.--The credit allowed under subsection (a) with

respect to any alternative fuel vehicle refueling property shall not

exceed--

``(1) $30,000 in the case of a property of a character

subject to an allowance for depreciation, and

``(2) $1,000 in any other case.

``(c) Qualified Alternative Fuel Vehicle Refueling Property.--

``(1) In general.--Except as provided in paragraph (2), the

term `qualified alternative fuel vehicle refueling property' has

the meaning given to such term by section 179A(d), but only with

respect to any fuel--

``(A) at least 85 percent of the volume of which

consists of one or more of the following: ethanol,

natural gas, compressed natural gas, liquefied natural

gas, liquefied petroleum gas, or hydrogen, or

``(B) any mixture of biodiesel (as defined in

section 40A(d)(1)) and diesel fuel (as defined in

section 4083(a)(3)), determined without regard to any

use of kerosene and containing at least 20 percent

biodiesel.

``(2) Residential property.--In the case of any property

installed on property which is used as the principal residence

(within the meaning of section 121) of the taxpayer, paragraph

(1) of section 179A(d) shall not apply.

``(d) Application With Other Credits.--

``(1) Business credit treated as part of general business

credit.--So much of the credit which would be allowed under

subsection (a) for any taxable year (determined without regard

to this subsection) that is attributable to property of a

character subject to an allowance for depreciation shall be

treated as a credit listed in section 38(b) for such taxable

year (and not allowed under subsection (a)).

``(2) Personal credit.--The credit allowed under subsection

(a) (after the application of paragraph (1)) for any taxable

year shall not exceed the excess (if any) of--

``(A) the regular tax reduced by the sum of the

credits allowable under subpart A and sections 27, 30,

and 30B, over

``(B) the tentative minimum tax for the taxable

year.

``(e) Special Rules.--For purposes of this section--

``(1) Basis reduction.--The basis of any property shall be

reduced by the portion of the cost of such property taken into

account under subsection (a).

``(2) Property used by tax-exempt entity.--In the case of

any qualified alternative fuel vehicle refueling property the

use of which is described in paragraph (3) or (4) of section

50(b) and which is not subject to a lease, the person who sold

such property to the person or entity using such property shall

be treated as the taxpayer that placed such property in service,

but only if such person clearly discloses to such person or

entity in a document the amount of any credit allowable under

subsection (a) with respect to such property (determined without

regard to subsection (d)).

``(3) Property used outside united states not qualified.--No

credit shall be allowable under subsection (a) with

[[Page 119 STAT. 1051]]

respect to any property referred to in section 50(b)(1) or with

respect to the portion of the cost of any property taken into

account under section 179.

``(4) Election not to take credit.--No credit shall be

allowed under subsection (a) for any property if the taxpayer

elects not to have this section apply to such property.

``(5) Recapture rules.--

Rules <<NOTE: Applicability.>> similar to the rules of section

179A(e)(4) shall apply.

``(f) Regulations.--The Secretary shall prescribe such regulations

as necessary to carry out the provisions of this section.

``(g) Termination.--This section shall not apply to any property

placed in service--

``(1) in the case of property relating to hydrogen, after

December 31, 2014, and

``(2) in the case of any other property, after December 31,

2009.''.

(b) Conforming Amendments.--

(1) Section 38(b), as amended by this Act, is amended by

striking ``plus'' at the end of paragraph (24), by striking the

period at the end of paragraph (25) and inserting ``, and'', and

by adding at the end the following new paragraph:

``(26) the portion of the alternative fuel vehicle refueling

property credit to which section 30C(d)(1) applies.''.

(2) Section 1016(a), as amended by this Act, is amended by

striking ``and'' at the end of paragraph (35), by striking the

period at the end of paragraph (36) and inserting ``, and'', and

by adding at the end the following new paragraph:

``(37) to the extent provided in section 30C(f).''.

(3) Section 55(c)(2), as amended by this Act, is amended by

inserting ``30C(d)(2),'' after ``30B(g)(2),''.

(4) Section 6501(m) is amended by inserting ``30C(e)(5),''

after ``30B(h)(9),''.

(5) The table of sections for subpart B of part IV of

subchapter A of chapter 1, as amended by this Act, is amended by

inserting after the item relating to section 30B the following

new item:

``Sec. 30C. Clean-fuel vehicle refueling property credit.''.

(c) Effective Date.--The <<NOTE: 26 USC 30C note.>> amendments made

by this section shall apply to property placed in service after December

31, 2005, in taxable years ending after such date.

SEC. 1343. 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:

``(D) Diesel-water fuel emulsion.--

In <<NOTE: Applicability.>> 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'. The preceding sentence

shall not apply to the removal, sale, or use of diesel-

water fuel emulsion unless the person so removing,

selling, or using such fuel is registered under section

4101.''.

(b) Special Rules for Diesel-Water Fuel Emulsions.--

[[Page 119 STAT. 1052]]

(1) Refunds for tax-paid purchases.--Section <<NOTE: 26 USC

6427.>> 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)(D) 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)(D).

``(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)(D).''.

(2) Later separation of fuel.--Section 4081 (relating to

imposition of tax) is amended by inserting after subsection (b)

the following new subsection:

``(c) 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)(D) (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.''.

(3) Credit claims.--Paragraphs (1) and (2) of section

6427(i) are both amended by inserting ``(m),'' after ``(l),''.

(c) Effective Date.--The <<NOTE: 26 USC 4081 note.>> amendments made

by this section shall take effect on January 1, 2006.

SEC. 1344. EXTENSION OF EXCISE TAX PROVISIONS AND INCOME TAX CREDIT FOR

BIODIESEL.

(a) In General.--Sections 40A(e), 6426(c)(6), and 6427(e)(4)(B) are

each amended by striking ``2006'' and inserting ``2008''.

(b) Effective Date.--The <<NOTE: 26 USC 40A note.>> amendments made

by this section shall take effect on the date of the enactment of this

Act.

SEC. 1345. SMALL AGRI-BIODIESEL PRODUCER CREDIT.

(a) In General.--Subsection (a) of section 40A (relating to

biodiesel used as a fuel) is amended to read as follows:

``(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, plus

``(3) in the case of an eligible small agri-biodiesel

producer, the small agri-biodiesel producer credit.''.

(b) Small Agri-Biodiesel Producer Credit Defined.--Section 40A(b)

(relating to definition of biodiesel mixture credit and

[[Page 119 STAT. 1053]]

biodiesel credit) is amended by adding at the end the following new

paragraph:

``(5) Small agri-biodiesel producer credit.--

``(A) In general.--The small agri-biodiesel producer

credit of any eligible small agri-biodiesel producer for

any taxable year is 10 cents for each gallon of

qualified agri-biodiesel production of such producer.

``(B) Qualified agri-biodiesel production.--For

purposes of this paragraph, the term `qualified agri-

biodiesel production' means any agri-biodiesel

(determined without regard to the last sentence of

subsection (d)(2)) which is produced by an eligible

small agri-biodiesel producer, and which during the

taxable year--

``(i) is sold by such producer to another

person--

``(I) for use by such other person

in the production of a qualified

biodiesel mixture in such other person's

trade or business (other than casual

off-farm production),

``(II) for use by such other person

as a fuel in a trade or business, or

``(III) who sells such agri-

biodiesel at retail to another person

and places such agri-biodiesel in the

fuel tank of such other person, or

``(ii) is used or sold by such producer for

any purpose described in clause (i).

``(C) Limitation.--The qualified agri-biodiesel

production of any producer for any taxable year shall

not exceed 15,000,000 gallons.''.

(c) Definitions and Special Rules.--Section 40A is amended by

redesignating subsection (e) as subsection (f) and by inserting after

subsection (d) the following new subsection:

``(e) Definitions and Special Rules for Small Agri-Biodiesel

Producer Credit.--For purposes of this section--

``(1) Eligible small agri-biodiesel producer.--The term

`eligible small agri-biodiesel producer' means a person who, at

all times during the taxable year, has a productive capacity for

agri-biodiesel not in excess of 60,000,000 gallons.

``(2) Aggregation rule.--For purposes of the 15,000,000

gallon limitation under subsection (b)(5)(C) and the 60,000,000

gallon limitation under paragraph (1), all members of the same

controlled group of corporations (within the meaning of section

267(f)) and all persons under common control (within the meaning

of section 52(b) but determined by treating an interest of more

than 50 percent as a controlling interest) shall be treated as 1

person.

``(3) Partnership, s <<NOTE: Applicability.>> corporation,

and other pass-thru entities.--In the case of a partnership,

trust, S corporation, or other pass-thru entity, the limitations

contained in subsection (b)(5)(C) and paragraph (1) shall be

applied at the entity level and at the partner or similar level.

``(4) Allocation.--For purposes of this subsection, in the

case of a facility in which more than 1 person has an interest,

productive capacity shall be allocated among such persons in

such manner as the Secretary may prescribe.

``(5) Regulations.--The Secretary may prescribe such

regulations as may be necessary--

[[Page 119 STAT. 1054]]

``(A) to prevent the credit provided for in

subsection (a)(3) from directly or indirectly benefiting

any person with a direct or indirect productive capacity

of more than 60,000,000 gallons of agri-biodiesel during

the taxable year, or

``(B) to prevent any person from directly or

indirectly benefiting with respect to more than

15,000,000 gallons during the taxable year.

``(6) Allocation of small agri-biodiesel 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. Such election

shall not take effect unless the organization

designates the apportionment as such in a written

notice mailed to its patrons during the payment

period described in section 1382(d).

``(B) Treatment of organizations and patrons.--

``(i) Organizations.--The amount of the credit

not apportioned to patrons pursuant to

subparagraph (A) shall be included in the amount

determined under subsection (a)(3) for the taxable

year of the organization.

``(ii) Patrons.--The amount of the credit

apportioned to patrons pursuant to subparagraph

(A) shall be included in the amount determined

under such subsection 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.

``(iii) Special rules for decrease in credits

for taxable year.--If the amount of the credit of

the organization determined under such subsection

for a taxable year is less than the amount of such

credit shown on the return of the organization for

such year, an amount equal to the excess of--

``(I) such reduction, over

``(II) the amount not apportioned to

such patrons under subparagraph (A) for

the taxable year, shall be treated as an

increase in tax imposed by this chapter

on the organization. Such increase shall

not be treated as tax imposed by this

chapter for purposes of determining the

amount of any

[[Page 119 STAT. 1055]]

credit under this chapter or for

purposes of section 55.''.

(d) Conforming Amendments.--

(1) Paragraph (4) of section 40A(b) is amended by striking

``this section'' and inserting ``paragraph (1) or (2) of

subsection (a)''.

(2) The heading of subsection (b) of section 40A is amended

by striking ``and Biodiesel Credit'' and inserting ``, Biodiesel

Credit, and Small Agri-biodiesel Producer Credit''.

(3) Paragraph (3) of section 40A(d) is amended by

redesignating subparagraph (C) as subparagraph (D) and by

inserting after subparagraph (B) the following new subparagraph:

``(C) Producer credit.--If--

``(i) any credit was determined under

subsection (a)(3), and

``(ii) any person does not use such fuel for a

purpose described in subsection (b)(5)(B), then

there is hereby imposed on such person a tax equal

to 10 cents a gallon for each gallon of such agri-

biodiesel.''.

(e) Effective Date.--The <<NOTE: 26 USC 40A note.>> amendments made

by this section shall apply to taxable years ending after the date of

the enactment of this Act.

SEC. 1346. RENEWABLE DIESEL.

(a) In General.--Section 40A (relating to biodiesel used as fuel),

as amended by this Act, is amended by redesignating subsection (f) as

subsection (g) and by inserting after subsection (e) the following new

subsection:

``(f) Renewable Diesel.--For purposes of this title--

``(1) Treatment in the same manner as biodiesel.--Except as

provided in paragraph (2), renewable diesel shall be treated in

the same manner as biodiesel.

``(2) Exceptions.--

``(A) Rate of <<NOTE: Applicability.>> credit.--

Subsections (b)(1)(A) and (b)(2)(A) shall be applied

with respect to renewable diesel by substituting `$1.00'

for `50 cents'.

``(B) Nonapplication of certain credits.--

Subsections (b)(3) and (b)(5) shall not apply with

respect to renewable diesel.

``(3) Renewable diesel defined.--The term `renewable diesel'

means diesel fuel derived from biomass (as defined in section

45K(c)(3)) using a thermal depolymerization process which

meets--

``(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 D975 or D396.''.

(b) Clerical Amendments.--

(1) The heading for section 40A is amended by inserting

``and renewable diesel'' after ``biodiesel''.

(2) The item in the table of contents for subpart D of part

IV of subchapter A of chapter 1 relating to section 40A is

amended to read as follows:

``Sec. 40A. Biodiesel and renewable diesel used as fuel.''.

[[Page 119 STAT. 1056]]

(c) Effective Date.--The <<NOTE: 26 USC 40A note.>> amendment made

by subsection (a) shall apply with respect to fuel sold or used after

December 31, 2005.

SEC. 1347. MODIFICATION OF SMALL ETHANOL PRODUCER CREDIT.

(a) 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''.

(b) Written Notice of Election to Allocate Credit to Patrons.--

Section 40(g)(6)(A)(ii) (relating to form and effect of election) is

amended by adding at the end the following new sentence: ``Such election

shall not take effect unless the organization designates the

apportionment as such in a written notice mailed to its patrons during

the payment period described in section 1382(d).''.

(c) Effective Date.--The <<NOTE: 26 USC 40 note.>> amendments made

by this section shall apply to taxable years ending after the date of

the enactment of this Act.

SEC. 1348. SUNSET OF DEDUCTION FOR CLEAN-FUEL VEHICLES AND CERTAIN

REFUELING PROPERTY.

Subsection (f) of section 179A (relating to termination) is amended

by striking ``December 31, 2006'' and inserting ``December 31, 2005''.

Subtitle E--Additional Energy Tax Incentives

SEC. 1351. EXPANSION OF RESEARCH CREDIT.

(a) Credit for Expenses Attributable to Certain Collaborative Energy

Research Consortia.--

(1) In general.--Section 41(a) (relating to credit for

increasing research activities) is amended by striking ``and''

at the end of paragraph (1), by striking the period at the end

of paragraph (2) and inserting ``, and'', and by adding at the

end the following new paragraph:

``(3) 20 percent of the amounts paid or incurred by the

taxpayer in carrying on any trade or business of the taxpayer

during the taxable year (including as contributions) to an

energy research consortium.''.

(2) Energy research consortium defined.--Section 41(f)

(relating to special rules) is amended by adding at the end the

following new paragraph:

``(6) Energy research consortium.--

``(A) In general.--The term `energy research

consortium' means any organization--

``(i) which is--

``(I) described in section 501(c)(3)

and is exempt from tax under section

501(a) and is organized and operated

primarily to conduct energy research, or

``(II) organized and operated

primarily to conduct energy research in

the public interest (within the meaning

of section 501(c)(3)),

``(ii) which is not a private foundation,

[[Page 119 STAT. 1057]]

``(iii) to which at least 5 unrelated persons

paid or incurred during the calendar year in which

the taxable year of the organization begins

amounts (including as contributions) to such

organization for energy research, and

``(iv) to which no single person paid or

incurred (including as contributions) during such

calendar year an amount equal to more than 50

percent of the total amounts received by such

organization during such calendar year for energy

research.

``(B) Treatment of persons.--All persons treated as

a single employer under subsection (a) or (b) of section

52 shall be treated as related persons for purposes of

subparagraph (A)(iii) and as a single person for

purposes of subparagraph (A)(iv).''.

(3) Conforming amendment.--Section 41(b)(3)(C) is amended by

inserting ``(other than an energy research consortium)'' after

``organization''.

(b) Repeal of Limitation on Contract Research Expenses Paid to Small

Businesses, Universities, and Federal Laboratories.--Section 41(b)(3)

(relating to contract research expenses) is amended by adding at the end

the following new subparagraph:

``(D) Amounts paid to eligible small businesses,

universities, and federal laboratories.--

``(i) In general.--In the case of amounts paid

by the taxpayer to--

``(I) an eligible small business,

``(II) an institution of higher

education (as defined in section

3304(f)), or

``(III)

an <<NOTE: Applicability.>> organization

which is a Federal laboratory,

for qualified research which is energy research,

subparagraph (A) shall be applied by substituting

`100 percent' for `65 percent'.

``(ii) Eligible small business.--For purposes

of this subparagraph, the term `eligible small

business' means a small business with respect to

which the taxpayer does not own (within the

meaning of section 318) 50 percent or more of--

``(I) in the case of a corporation,

the outstanding stock of the corporation

(either by vote or value), and

``(II) in the case of a small

business which is not a corporation, the

capital and profits interests of the

small business.

``(iii) Small business.--For purposes of this

subparagraph--

``(I) In general.--The term `small

business' means, with respect to any

calendar year, any person if the annual

average number of employees employed by

such person during either of the 2

preceding calendar years was 500 or

fewer. For purposes of the preceding

sentence, a preceding calendar year may

be taken into account only if the person

was in existence throughout the year.

[[Page 119 STAT. 1058]]

``(II) Startups, controlled groups,

and predecessors.--Rules similar to the

rules of subparagraphs (B) and (D) of

section 220(c)(4) shall apply for

purposes of this clause.

``(iv) Federal laboratory.--For purposes of

this subparagraph, the term `Federal laboratory'

has the meaning given such term by section 4(6) of

the Stevenson-Wydler Technology Innovation Act of

1980 (15 U.S.C. 3703(6)), as in effect on the date

of the enactment of the Energy Tax Incentives Act

of 2005.''.

(c) Effective Date.--The amendments made by this section shall apply

to amounts paid or incurred after the date of the enactment of this Act,

in taxable years ending after such date.

SEC. 1352. <<NOTE: 26 USC 41 note.>> NATIONAL ACADEMY OF SCIENCES STUDY

AND REPORT.

(a) Study.--Not <<NOTE: Contracts.>> later than 60 days after the

date of the enactment of this Act, the Secretary of the Treasury shall

enter into an agreement with the National Academy of Sciences under

which the National Academy of Sciences shall conduct a study to define

and evaluate the health, environmental, security, and infrastructure

external costs and benefits associated with the production and

consumption of energy that are not or may not be fully incorporated into

the market price of such energy, or into the Federal tax or fee or other

applicable revenue measure related to such production or consumption.

(b) Report.--Not later than 2 years after the date on which the

agreement under subsection (a) is entered into, the National Academy of

Sciences shall submit to Congress a report on the study conducted under

subsection (a).

SEC. 1353. RECYCLING STUDY.

(a) Study.--The Secretary of the Treasury, in consultation with the

Secretary of Energy, shall conduct a study--

(1) to determine and quantify the energy savings achieved

through the recycling of glass, paper, plastic, steel, aluminum,

and electronic devices, and

(2) to identify tax incentives which would encourage

recycling of such material.

(b) Report.--Not later than 1 year after the date of the enactment

of this Act, the Secretary of the Treasury shall submit to Congress a

report on the study conducted under subsection (a).

Subtitle F--Revenue Raising Provisions

SEC. 1361. OIL SPILL LIABILITY TRUST FUND FINANCING RATE.

Section 4611(f) (relating to application of oil spill liability

trust fund financing rate) is amended to read as follows:

``(f) Application of Oil Spill Liability Trust Fund Financing

Rate.--

``(1) In general.--Except <<NOTE: Effective date.>> as

provided in paragraphs (2) and (3), the Oil Spill Liability

Trust Fund financing rate under subsection (c) shall apply on

and after April 1, 2006, or if later, the date which is 30 days

after the last day of any calendar quarter for which the

Secretary estimates that, as of the close of that quarter, the

unobligated balance in the Oil Spill Liability Trust Fund is

less than $2,000,000,000.

[[Page 119 STAT. 1059]]

``(2) Fund balance.--The Oil Spill Liability Trust Fund

financing rate shall not apply during a calendar quarter if the

Secretary estimates that, as of the close of the preceding

calendar quarter, the unobligated balance in the Oil Spill

Liability Trust Fund exceeds $2,700,000,000.

``(3) Termination.--The Oil Spill Liability Trust Fund

financing rate shall not apply after December 31, 2014.''.

SEC. 1362. EXTENSION OF LEAKING UNDERGROUND STORAGE TANK TRUST FUND

FINANCING RATE.

(a) In General.--Paragraph (3) of section 4081(d) (relating to

Leaking Underground Storage Tank Trust Fund financing rate) is amended

by striking ``2005'' and inserting ``2011''.

(b) No Exemptions From Tax Except for Exports.--

(1) In general.--Section 4082(a) (relating to exemptions for

diesel fuel and kerosene) is amended by inserting ``(other than

such tax at the Leaking Underground Storage Tank Trust Fund

financing rate imposed in all cases other than for export)''

after ``section 4081''.

(2) Amendments relating to section 4041.--

(A) Subsections (a)(1)(B), (a)(2)(A), and (c)(2) of

section 4041 are each amended by inserting ``(other than

such tax at the Leaking Underground Storage Tank Trust

Fund financing rate)'' after ``section 4081''.

(B) Section 4041(b)(1)(A) is amended by striking

``or (d)(1))''.

(C) Section 4041(d) is amended by adding at the end

the following new paragraph:

``(5) Nonapplication of exemptions other than for exports.--

For purposes of this section, the tax imposed under this

subsection shall be determined without regard to subsections

(f), (g) (other than with respect to any sale for export under

paragraph (3) thereof), (h), and (l).''.

(3) No refund.--

(A) In general.--Subchapter B of chapter 65 is

amended by adding at the end the following new section:

``SEC. 6430. TREATMENT OF TAX IMPOSED AT LEAKING UNDERGROUND STORAGE

TANK TRUST FUND FINANCING RATE.

``No refunds, credits, or payments shall be made under this

subchapter for any tax imposed at the Leaking Underground Storage Tank

Trust Fund financing rate, except in the case of fuels destined for

export.''.

(B) Clerical amendment.--The table of sections for

subchapter B of chapter 65 is amended by adding at the

end the following new item:

``Sec. 6430. Treatment of tax imposed at Leaking Underground Storage

Tank Trust Fund financing rate.''.

(c) Certain Refunds and Credits Not Charged to LUST Trust Fund.--

Subsection (c) of section 9508 (relating to Leaking Underground Storage

Tank Trust Fund) is amended to read as follows:

``(c) Expenditures.--Amounts in the Leaking Underground Storage Tank

Trust Fund shall be available, as provided in appropriation Acts, only

for purposes of making expenditures to carry out section 9003(h) of the

Solid Waste Disposal Act as in effect

[[Page 119 STAT. 1060]]

on the date of the enactment of the Superfund Amendments and

Reauthorization Act of 1986.''.

(d) Effective <<NOTE: 26 USC 4041 note.>> Dates.--

(1) In general.--Except as provided in paragraph (2), the

amendments made by this section shall take effect on October 1,

2005.

(2) No exemption.--The amendments made by subsection (b)

shall apply to fuel entered, removed, or sold after September

30, 2005.

SEC. 1363. MODIFICATION OF RECAPTURE RULES FOR AMORTIZABLE SECTION 197

INTANGIBLES.

(a) In General.--Subsection (b) of section 1245 (relating to gain

from dispositions of certain depreciable property) is amended by adding

at the end the following new paragraph:

``(9) Disposition of amortizable section 197 intangibles.--

``(A) In general.--If a taxpayer disposes of more

than 1 amortizable section 197 intangible (as defined in

section 197(c)) in a transaction or a series of related

transactions, all such amortizable 197 intangibles shall

be treated as 1 section 1245 property for purposes of

this section.

``(B) Exception.--Subparagraph (A) shall not apply

to any amortizable section 197 intangible (as so

defined) with respect to which the adjusted basis

exceeds the fair market value.''.

(b) Effective Date.--The <<NOTE: 26 USC 1245 note.>> amendment made

by this section shall apply to dispositions of property after the date

of the enactment of this Act.

SEC. 1364. CLARIFICATION OF TIRE EXCISE TAX.

(a) In General.--Section 4072(e) (defining super single tire) is

amended by adding at the end the following: ``Such term shall not

include any tire designed for steering.''

(b) Effective Date.--The <<NOTE: 26 USC 4072 note.>> amendment made

by this section shall take effect as if included in section 869 of the

American Jobs Creation Act of 2004.

(c) Study.--

(1) In general.--With <<NOTE: Effective date.>> respect to

the 1-year period beginning on January 1, 2006, the Secretary of

the Treasury shall conduct a study to determine--

(A) the amount of tax collected during such period

under section 4071 of the Internal Revenue Code of 1986

with respect to each class of tire, and

(B) the number of tires in each such class on which

tax is imposed under such section during such period.

(2) Report.--Not later than July 1, 2007, the Secretary of

the Treasury shall submit to Congress a report on the study

conducted under paragraph (1).

[[Page 119 STAT. 1061]]

TITLE XIV--MISCELLANEOUS

Subtitle A--In General

SEC. 1401. SENSE OF CONGRESS ON RISK ASSESSMENTS.

Subtitle B of title XXX of the Energy Policy Act of 1992 is amended

by adding at the end the following new section:

``SEC. 3022. <<NOTE: 42 USC 13557.>> SENSE OF CONGRESS ON RISK

ASSESSMENTS.

``It is the sense of Congress that Federal agencies conducting

assessments of risks to human health and the environment from energy

technology, production, transport, transmission, distribution, storage,

use, or conservation activities shall use sound and objective scientific

practices in assessing such risks, shall consider the best available

science (including peer reviewed studies), and shall include a

description of the weight of the scientific evidence concerning such

risks.''.

SEC. 1402. <<NOTE: 42 USC 16491.>> 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) <<NOTE: Applicability.>> shall apply with respect to the production

in the State of 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.

(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. 1403. <<NOTE: 42 USC 16492.>> REGULATION OF CERTAIN OIL USED IN

TRANSFORMERS.

Notwithstanding any other provision of law, or rule promulgated by

the Environmental Protection Agency, vegetable oil made from soybeans

and used in electric transformers as thermal insulation shall not be

regulated as an oil identified under section 2(a)(1)(B) of the Edible

Oil Regulatory Reform Act (33 U.S.C. 2720(a)(1)(B)).

SEC. 1404. PETROCHEMICAL AND OIL REFINERY FACILITY HEALTH ASSESSMENT.

(a) Establishment.--The Secretary shall conduct a study of direct

and significant health impacts to persons resulting from living in

proximity to petrochemical and oil refinery facilities. The Secretary

shall consult with the Director of the National Cancer Institute and

other Federal Government bodies with expertise in

[[Page 119 STAT. 1062]]

the field it deems appropriate in the design of such study. The study

shall be conducted according to sound and objective scientific practices

and present the weight of the scientific evidence. The Secretary shall

obtain scientific peer review of the draft study.

(b) Report to Congress.--The Secretary shall transmit the results of

the study to Congress within 6 months of the enactment of this section.

(c) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary for activities under this section such

sums as are necessary for the completion of the study.

SEC. 1405. <<NOTE: 42 USC 16493.>> NATIONAL PRIORITY PROJECT

DESIGNATION.

(a) Designation of National Priority Projects.--

(1) In general.--There is established the National Priority

Project Designation (referred to in this section as the

``Designation''), which shall be evidenced by a medal bearing

the inscription ``National Priority Project''.

(2) Design and materials.--The medal shall be of such design

and materials and bear such additional inscriptions as the

President may prescribe.

(b) Making <<NOTE: President.>> and Presentation of Designation.--

(1) In general.--The President, on the basis of

recommendations made by the Secretary, shall annually designate

organizations that have--

(A) advanced the field of renewable energy

technology and contributed to North American energy

independence; and

(B) <<NOTE: Certification.>> been certified by the

Secretary under subsection (e).

(2) Presentation.--The President shall designate projects

with such ceremonies as the President may prescribe.

(3) Use of designation.--An organization that receives a

Designation under this section may publicize the Designation of

the organization as a National Priority Project in advertising.

(4) Categories in which the designation may be given.--

Separate Designations shall be made to qualifying projects in

each of the following categories:

(A) Wind and biomass energy generation projects.

(B) Photovoltaic and fuel cell energy generation

projects.

(C) Energy efficient building and renewable energy

projects.

(D) First-in-Class projects.

(c) Selection Criteria.--

(1) In general.--Certification and selection of the projects

to receive the Designation shall be based on criteria

established under this subsection.

(2) Wind, biomass, and building projects.--In the case of a

wind, biomass, or building project, the project shall

demonstrate that the project will install not less than 30

megawatts of renewable energy generation capacity.

(3) Solar photovoltaic and fuel cell projects.--In the case

of a solar photovoltaic or fuel cell project, the project shall

demonstrate that the project will install not less than 3

megawatts of renewable energy generation capacity.

[[Page 119 STAT. 1063]]

(4) Energy efficient building and renewable energy

projects.--In the case of an energy efficient building or

renewable energy project, in addition to meeting the criteria

established under paragraph (2), each building project shall

demonstrate that the project will--

(A) comply with third-party certification standards

for high-performance, sustainable buildings;

(B) use whole-building integration of energy

efficiency and environmental performance design and

technology, including advanced building controls;

(C) use renewable energy for at least 50 percent of

the energy consumption of the project;

(D) comply with applicable Energy Star standards;

and

(E) include at least 5,000,000 square feet of

enclosed space.

(5) First-in-class use.--Notwithstanding paragraphs (2)

through (4), a new building project may qualify under this

section if the Secretary determines that the project--

(A) represents a First-In-Class use of renewable

energy; or

(B) otherwise establishes a new paradigm of building

integrated renewable energy use or energy efficiency.

(d) Application.--

(1) Initial applications.--No <<NOTE: Deadline. Federal

Register, publication. Guidelines.>> later than 120 days after

the date of enactment of this Act, and annually thereafter, the

Secretary shall publish in the Federal Register an invitation

and guidelines for submitting applications, consistent with this

section.

(2) Contents.--The application shall describe the project,

or planned project, and the plans to meet the criteria

established under subsection (c).

(e) Certification.--

(1) In general.--Not <<NOTE: Deadline.>> later than 60 days

after the application period described in subsection (d), and

annually thereafter, the Secretary shall certify projects that

are reasonably expected to meet the criteria established under

subsection (c).

(2) Certified projects.--The Secretary shall designate

personnel of the Department to work with persons carrying out

each certified project and ensure that the personnel--

(A) provide each certified project with guidance in

meeting the criteria established under subsection (c);

(B) identify programs of the Department, including

National Laboratories and Technology Centers, that will

assist each project in meeting the criteria established

under subsection (c); and

(C) ensure that knowledge and transfer of the most

current technology between the applicable resources of

the Federal Government (including the National

Laboratories and Technology Centers, the Department, and

the Environmental Protection Agency) and the certified

projects is being facilitated to accelerate

commercialization of work developed through those

resources.

(f) Authorization of Appropriations.--There are authorized to be

appropriated such sums as are necessary to carry out this section for

each of fiscal years 2006 through 2010.

[[Page 119 STAT. 1064]]

SEC. 1406. COLD CRACKING.

(a) Study.--The Secretary shall conduct a study of the application

of radiation to petroleum at standard temperature and pressure to refine

petroleum products, whose objective shall be to increase the economic

yield from each barrel of oil.

(b) Goals.--The goals of the study shall include--

(1) increasing the value of our current oil supply;

(2) reducing the capital investment cost for cracking oil;

(3) reducing the operating energy cost for cracking oil; and

(4) reducing sulfur content using an environmentally

responsible method.

(c) Authorization of Appropriations.--There are authorized to be

appropriated to carry out this section $250,000 for fiscal year 2006.

SEC. 1407. <<NOTE: 42 USC 16494.>> OXYGEN-FUEL.

(a) Program.--The Secretary shall establish a program on oxygen-fuel

systems. If feasible, the program shall include renovation of at least

one existing large unit and one existing small unit, and construction of

one new large unit and one new small unit.

(b) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary for carrying out this section--

(1) $100,000,000 for fiscal year 2006;

(2) $100,000,000 for fiscal year 2007; and

(3) $100,000,000 for fiscal year 2008.

(c) Definitions.--For purposes of this section--

(1) the term ``large unit'' means a unit with a generating

capacity of 100 megawatts or more;

(2) the term ``oxygen-fuel systems'' means systems that

utilize fuel efficiency benefits of oil, gas, coal, and biomass

combustion using substantially pure oxygen, with high flame

temperatures and the exclusion of air from the boiler, in

industrial or electric utility steam generating units; and

(3) the term ``small unit'' means a unit with a generating

capacity in the 10-50 megawatt range.

Subtitle B--Set <<NOTE: Set America Free Act of

2005. Canada. Mexico.>> America Free

SEC. 1421. SHORT TITLE.

This subtitle may be cited as the ``Set America Free Act of 2005''

or the ``SAFE Act''.

SEC. 1422. PURPOSE.

The purpose of this subtitle is to establish a United States

commission to make recommendations for a coordinated and comprehensive

North American energy policy that will achieve energy self-sufficiency

by 2025 within the three contiguous North American nation area of

Canada, Mexico, and the United States.

SEC. 1423. UNITED STATES COMMISSION ON NORTH AMERICAN ENERGY FREEDOM.

(a) Establishment.--There is hereby established the United States

Commission on North American Energy Freedom (in this subtitle referred

to as the ``Commission''). The Federal Advisory

[[Page 119 STAT. 1065]]

Committee Act (5 U.S.C. App.), except sections 3, 7, and 12, does not

apply to the Commission.

(b) <<NOTE: President.>> Membership.--

(1) Appointment.--The Commission shall be composed of 16

members appointed by the President from among individuals

described in paragraph (2) who are knowledgeable on energy

issues, including oil and gas exploration and production, crude

oil refining, oil and gas pipelines, electricity production and

transmission, coal, unconventional hydrocarbon resources, fuel

cells, motor vehicle power systems, nuclear energy, renewable

energy, biofuels, energy efficiency, and energy conservation.

The membership of the Commission shall be balanced by area of

expertise to the extent consistent with maintaining the highest

level of expertise on the Commission. Members of the Commission

may be citizens of Canada, Mexico, or the United States, and the

President shall ensure that citizens of all three nations are

appointed to the Commission.

(2) Nominations.--The <<NOTE: Deadline.>> President shall

appoint the members of the Commission within 60 days after the

effective date of this Act, including individuals nominated as

follows:

(A) Four members shall be appointed from amongst

individuals independently determined by the President to

be qualified for appointment.

(B) Four members shall be appointed from a list of

eight individuals who shall be nominated by the majority

leader of the Senate in consultation with the chairman

of the Committee on Energy and Natural Resources of the

Senate.

(C) Four members shall be appointed from a list of

eight individuals who shall be nominated by the Speaker

of the House of Representatives in consultation with the

chairmen of the Committees on Energy and Commerce and

Resources of the House of Representatives.

(D) Two members shall be appointed from a list of

four individuals who shall be nominated by the minority

leader of the Senate in consultation with the ranking

Member of the Committee on Energy and Natural Resources

of the Senate.

(E) Two members shall be appointed from a list of

four individuals who shall be nominated by the minority

leader of the House in consultation with the ranking

Members of the Committees on Energy and Commerce and

Resources of the House of Representatives.

(3) Chairman.--The chairman of the Commission shall be

selected by the President. The chairman of the Commission shall

be responsible for--

(A) the assignment of duties and responsibilities

among staff personnel and their continuing supervision;

and

(B) the use and expenditure of funds available to

the Commission.

(4) Vacancies.--Any vacancy on the Commission shall be

filled in the same manner as the original incumbent was

appointed.

(c) Resources.--In carrying out its functions under this section,

the Commission--

(1) is authorized to secure directly from any Federal agency

or department any information it deems necessary to carry

[[Page 119 STAT. 1066]]

out its functions under this Act, and each such agency or

department is authorized to cooperate with the Commission and,

to the extent permitted by law, to furnish such information

(other than information described in section 552(b)(1)(A) of

title 5, United States Code) to the Commission, upon the request

of the Commission;

(2) may enter into contracts, subject to the availability of

appropriations for contracting, and employ such staff experts

and consultants as may be necessary to carry out the duties of

the Commission, as provided by section 3109 of title 5, United

States Code; and

(3) <<NOTE: Establishment.>> shall establish a

multidisciplinary science and technical advisory panel of

experts in the field of energy to assist the Commission in

preparing its report, including ensuring that the scientific and

technical information considered by the Commission is based on

the best scientific and technical information available.

(d) Staffing.--The chairman of the Commission may, without regard to

the civil service laws and regulations, appoint and terminate an

executive director and such other additional personnel as may be

necessary for the Commission to perform its duties. The executive

director shall be compensated at a rate not to exceed the rate payable

for Level IV of the Executive Schedule under chapter 5136 of title 5,

United States Code. The chairman shall select staff from among qualified

citizens of Canada, Mexico, and the United States of America.

(e) Meetings.--

(1) Administration.--All meetings of the Commission shall be

open to the public, except that a meeting or any portion of it

may be closed to the public if it concerns matters or

information described in section 552b(c) of title 5, United

States Code. Interested persons shall be permitted to appear at

open meetings and present oral or written statements on the

subject matter of the meeting. The Commission may administer

oaths or affirmations to any person appearing before it.

(2) Notice; minutes; public availability of documents.--

(A) Notice.--All open meetings of the Commission

shall be preceded by timely public notice in the Federal

Register of the time, place, and subject of the meeting.

(B) Minutes.--Minutes of each meeting shall be kept

and shall contain a record of the people present, a

description of the discussion that occurred, and copies

of all statements filed. Subject to section 552 of title

5, United States Code, the minutes and records of all

meetings and other documents that were made available to

or prepared for the Commission shall be available for

public inspection and copying at a single location in

the offices of the Commission.

(3) Initial meeting.--The <<NOTE: Deadline.>> Commission

shall hold its first meeting within 30 days after all 16 members

have been appointed.

(f) Report.--Within 12 months after the effective date of this Act,

the Commission shall submit to Congress and the President a final report

of its findings and recommendations regarding North American energy

freedom.

[[Page 119 STAT. 1067]]

(g) Administrative Procedure for Report and Review.--Chapter 5 and

chapter 7 of title 5, United States Code, do not apply to the

preparation, review, or submission of the report required by subsection

(f).

(h) Termination.--The Commission shall cease to exist 90 days after

the date on which it submits its final report.

(i) Authorization of Appropriations.--There is authorized to be

appropriated to carry out this chapter a total of $10,000,000 for the 2

fiscal-year period beginning with fiscal year 2005, such sums to remain

available until expended.

SEC. 1424. <<NOTE: Deadline. President.>> NORTH AMERICAN ENERGY FREEDOM

POLICY.

Within 90 days after receiving and considering the report and

recommendations of the Commission under section 1423, the President

shall submit to Congress a statement of proposals to implement or

respond to the Commission's recommendations for a coordinated,

comprehensive, and long-range national policy to achieve North American

energy freedom by 2025.

TITLE XV--ETHANOL AND MOTOR FUELS

Subtitle A--General Provisions

SEC. 1501. RENEWABLE CONTENT OF GASOLINE.

(a) In General.--Section 211 of the Clean Air Act (42 U.S.C. 7545)

is amended--

(1) by redesignating subsection (o) as subsection (r); and

(2) by inserting after subsection (n) the following:

``(o) Renewable Fuel Program.--

``(1) Definitions.--In this section:

``(A) Cellulosic biomass ethanol.--The term

`cellulosic biomass ethanol' means ethanol derived from

any lignocellulosic or hemicellulosic matter that is

available on a renewable or recurring basis, including--

``(i) dedicated energy crops and trees;

``(ii) wood and wood residues;

``(iii) plants;

``(iv) grasses;

``(v) agricultural residues;

``(vi) fibers;

``(vii) animal wastes and other waste

materials; and

``(viii) municipal solid waste.

The term also includes any ethanol produced in

facilities where animal wastes or other waste materials

are digested or otherwise used to displace 90 percent or

more of the fossil fuel normally used in the production

of ethanol.

``(B) Waste derived ethanol.--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.

``(C) Renewable fuel.--

[[Page 119 STAT. 1068]]

``(i) In general.--The term `renewable fuel'

means motor vehicle fuel that--

``(I)(aa) is produced from grain,

starch, oilseeds, vegetable, animal, or

fish materials including fats, greases,

and oils, sugarcane, sugar beets, sugar

components, tobacco, potatoes, 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--

``(I) cellulosic biomass ethanol and

`waste derived ethanol'; and

``(II) 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).

``(D) Small refinery.--The term `small refinery'

means a refinery for which the average aggregate daily

crude oil throughput for a 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) Regulations.--

``(i) In general.--

Not <<NOTE: Deadline.>> later than 1 year after

the date of enactment of this paragraph, the

Administrator shall promulgate regulations to

ensure that gasoline sold or introduced into

commerce in the United States (except in

noncontiguous States or territories), on an annual

average basis, contains the applicable volume of

renewable fuel determined in accordance with

subparagraph (B).

``(ii) Noncontiguous state opt-in.--

``(I) In general.--On the petition

of a noncontiguous State or territory,

the Administrator may allow the

renewable fuel program established under

this subsection to apply in the

noncontiguous State or territory at the

same time or any time after the

Administrator promulgates regulations

under this subparagraph.

``(II) Other actions.--In carrying

out this clause, the Administrator may--

``(aa) issue or revise

regulations under this

paragraph;

``(bb) establish applicable

percentages under paragraph (3);

[[Page 119 STAT. 1069]]

``(cc) provide for the

generation of credits under

paragraph (5); and

``(dd) take such other

actions as are necessary to

allow for the application of the

renewable fuels program in a

noncontiguous State or

territory.

``(iii) Provisions of regulations.--Regardless

of the date of promulgation, the regulations

promulgated under clause (i)--

``(I) shall contain compliance

provisions applicable to refineries,

blenders, distributors, and importers,

as appropriate, to ensure that the

requirements of this paragraph are met;

but

``(II) shall not--

``(aa) restrict geographic

areas in which renewable fuel

may be used; or

``(bb) impose any per-gallon

obligation for the use of

renewable fuel.

``(iv) Requirement in case of failure to

promulgate regulations.--If the Administrator does

not promulgate regulations under clause (i), the

percentage of renewable fuel in gasoline sold or

dispensed to consumers in the United States, on a

volume basis, shall be 2.78 percent for calendar

year 2006.

``(B) Applicable volume.--

``(i) Calendar years 2006 through 2012.--For

the purpose of subparagraph (A), the applicable

volume for any of calendar years 2006 through 2012

shall be determined in accordance with the

following table:

Applicable volume of renewable fuel.......

``Calendar yea(in billions of gallons):.................

2006                                                 4.0

2007                                                 4.7

2008                                                 5.4

2009                                                 6.1

2010                                                 6.8

2011                                                 7.4

2012                                                7.5.

``(ii) Calendar year 2013 and thereafter.--

Subject to clauses (iii) and (iv), for the

purposes of subparagraph (A), the applicable

volume for calendar year 2013 and each calendar

year thereafter shall be determined by the

Administrator, in coordination with the Secretary

of Agriculture and the Secretary of Energy, based

on a review of the implementation of the program

during calendar years 2006 through 2012, including

a review of--

``(I) the impact of the use of

renewable fuels on the environment, air

quality, energy security, job creation,

and rural economic development; and

``(II) the expected annual rate of

future production of renewable fuels,

including cellulosic ethanol.

[[Page 119 STAT. 1070]]

``(iii) Minimum quantity derived from

cellulosic biomass.--For calendar year 2013 and

each calendar year thereafter--

``(I) the applicable volume referred

to in clause (ii) shall contain a

minimum of 250,000,000 gallons that are

derived from cellulosic biomass; and

``(II) the 2.5-to-1 ratio referred

to in paragraph (4) shall not apply.

``(iv) Minimum applicable volume.--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) 7,500,000,000 gallons

of renewable fuel; bears to

``(bb) the number of gallons

of gasoline sold or introduced

into commerce in calendar year

2012.

``(3) Applicable <<NOTE: Deadlines.>> percentages.--

``(A) Provision of estimate of volumes of gasoline

sales.--Not later than October 31 of each of calendar

years 2005 through 2011, the Administrator of the Energy

Information Administration shall provide to the

Administrator of the Environmental Protection Agency an

estimate, with respect to the following calendar year,

of the volumes of gasoline projected to be sold or

introduced into commerce in the United States.

``(B) Determination of applicable percentages.--

``(i) In general.--Not later than November 30

of each of calendar years 2005 through 2012, based

on the estimate provided under subparagraph (A),

the Administrator of the Environmental Protection

Agency 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 refineries,

blenders, and importers, as appropriate;

``(II) be expressed in terms of a

volume percentage of gasoline sold or

introduced into commerce in the United

States; 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 on any person specified in

subparagraph (B)(ii)(I); and

[[Page 119 STAT. 1071]]

``(ii) to account for the use of renewable

fuel during the previous calendar year by small

refineries that are exempt under paragraph (9).

``(4) Cellulosic biomass ethanol or waste derived ethanol.--

For the purpose of paragraph (2), 1 gallon of cellulosic biomass

ethanol or waste derived ethanol shall be considered to be the

equivalent of 2.5 gallons of renewable fuel.

``(5) Credit program.--

``(A) In general.--The regulations promulgated under

paragraph (2)(A) shall provide--

``(i) 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);

``(ii) for the generation of an appropriate

amount of credits for biodiesel; and

``(iii) for the generation of credits by small

refineries in accordance with paragraph (9)(C).

``(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) Duration of credits.--A credit generated under

this paragraph shall be valid to show compliance for the

12 months as of the date of generation.

``(D) Inability to generate or purchase sufficient

credits.--The regulations promulgated under paragraph

(2)(A) shall include provisions allowing any person that

is unable to generate or purchase sufficient credits to

meet the requirements of paragraph (2) to carry forward

a renewable fuel deficit on condition that the person,

in the calendar year following the year in which the

renewable fuel deficit is created--

``(i) achieves compliance with the renewable

fuel requirement under paragraph (2); and

``(ii) generates or purchases additional

renewable fuel credits to offset the renewable

fuel deficit of the previous year.

``(6) Seasonal variations in renewable fuel use.--

``(A) Study.--For each of calendar years 2006

through 2012, the Administrator of the Energy

Information Administration shall conduct a study of

renewable fuel blending to determine whether there are

excessive seasonal variations in the use of renewable

fuel.

``(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 of the

Environmental Protection Agency shall promulgate

regulations to ensure that 25 percent or more of the

quantity of renewable fuel necessary to meet the

requirements of paragraph (2) is used during each of the

2 periods specified in subparagraph (D) of each

subsequent calendar year.

``(C) Determinations.--The determinations referred

to in subparagraph (B) are that--

[[Page 119 STAT. 1072]]

``(i) less than 25 percent of the quantity of

renewable fuel necessary to meet the requirements

of paragraph (2) has been used during 1 of the 2

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 25 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 2 periods referred to in this

paragraph are--

``(i) April through September; and

``(ii) January through March and October

through December.

``(E) Exclusion.--Renewable fuel blended or consumed

in calendar year 2006 in a State that has received a

waiver under section 209(b) shall not be included in the

study under subparagraph (A).

``(F) State exemption from seasonality

requirements.--Notwithstanding any other provision of

law, the seasonality requirement relating to renewable

fuel use established by this paragraph shall not apply

to any State that has received a waiver under section

209(b) or any State dependent on refineries in such

State for gasoline supplies.

``(7) Waivers.--

``(A) In general.--The Administrator, in

consultation with the Secretary of Agriculture and the

Secretary of Energy, may waive the requirements 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 paragraph (2)--

``(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.

``(B) Petitions for waivers.--

The <<NOTE: Deadline.>> 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 requirements 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.

``(8) Study and waiver for initial year of program.--

[[Page 119 STAT. 1073]]

``(A) In general.--Not <<NOTE: Deadline.>> later

than 180 days after the date of enactment of this

paragraph, the Secretary of Energy shall conduct for the

Administrator a study assessing whether the renewable

fuel requirement under paragraph (2) will likely result

in significant adverse impacts on consumers in 2006, on

a national, regional, or State basis.

``(B) Required evaluations.--The study shall

evaluate renewable fuel--

``(i) supplies and prices;

``(ii) blendstock supplies; and

``(iii) supply and distribution system

capabilities.

``(C) Recommendations by the secretary.--Based on

the results of the study, the Secretary of Energy shall

make specific recommendations to the Administrator

concerning waiver of the requirements of paragraph (2),

in whole or in part, to prevent any adverse impacts

described in subparagraph (A).

``(D) Waiver.--

``(i) In general.--

Not <<NOTE: Deadline.>> later than 270 days after

the date of enactment of this paragraph, the

Administrator shall, if and to the extent

recommended by the Secretary of Energy under

subparagraph (C), waive, in whole or in part, the

renewable fuel requirement under paragraph (2) by

reducing the national quantity of renewable fuel

required under paragraph (2) in calendar year

2006.

``(ii) No effect on waiver authority.--Clause

(i) does not limit the authority of the

Administrator to waive the requirements of

paragraph (2) in whole, or in part, under

paragraph (7).

``(9) Small refineries.--

``(A) Temporary exemption.--

``(i) In general.--The requirements of

paragraph (2) shall not apply to small refineries

until calendar year 2011.

``(ii) Extension of exemption.--

``(I) <<NOTE: Deadline.>> Study by

secretary of energy.--Not later than

December 31, 2008, the Secretary of

Energy shall conduct for the

Administrator a study to determine

whether compliance with the requirements

of paragraph (2) would impose a

disproportionate economic hardship on

small refineries.

``(II) Extension of exemption.--In

the case of a small refinery that the

Secretary of Energy determines under

subclause (I) would be subject to a

disproportionate economic hardship if

required to comply with paragraph (2),

the Administrator shall extend the

exemption under clause (i) for the small

refinery for a period of not less than 2

additional years.

``(B) Petitions based on disproportionate economic

hardship.--

``(i) Extension of exemption.--A small

refinery may at any time petition the

Administrator for an extension of the exemption

under subparagraph (A) for the reason of

disproportionate economic hardship.

[[Page 119 STAT. 1074]]

``(ii) Evaluation of petitions.--In evaluating

a petition under clause (i), the Administrator, in

consultation with the Secretary of Energy, shall

consider the findings of the study under

subparagraph (A)(ii) and other economic factors.

``(iii) 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 date of receipt of

the petition.

``(C) Credit program.--If a small refinery notifies

the Administrator that the small refinery waives the

exemption under subparagraph (A), the regulations

promulgated under paragraph (2)(A) shall provide for the

generation of credits by the small refinery under

paragraph (5) beginning in the calendar year following

the date of notification.

``(D) Opt-in for small refineries.--A small refinery

shall be subject to the requirements of paragraph (2) if

the small refinery notifies the Administrator that the

small refinery waives the exemption under subparagraph

(A).

``(10) Ethanol market concentration analysis.--

``(A) Analysis.--

``(i) In general.--

Not <<NOTE: Deadline.>> later than 180 days after

the date of enactment of this paragraph, 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, 2005, 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--

(1) in paragraph (1)--

(A) in the first sentence, by striking ``or (n)''

each place it appears and inserting ``(n), or (o)''; and

(B) in the second sentence, by striking ``or (m)''

and inserting ``(m), or (o)''; and

(2) in the first sentence of paragraph (2), by striking

``and (n)'' each place it appears and inserting ``(n), and

(o)''.

(c) Exclusion From Ethanol Waiver.--Section 211(h) of the Clean Air

Act (42 U.S.C. 7545(h)) is amended--

(1) by redesignating paragraph (5) as paragraph (6); and

(2) by inserting after paragraph (4) the following:

``(5) Exclusion from ethanol waiver.--

``(A) Promulgation

of <<NOTE: Notification.>> regulations.--Upon

notification, accompanied by supporting documentation,

from the Governor of a State that the Reid vapor

pressure limitation established by paragraph (4) will

increase emissions that contribute to air pollution in

any area in the State, the

[[Page 119 STAT. 1075]]

Administrator shall, by regulation, apply, in lieu of

the Reid vapor pressure limitation established by

paragraph (4), the Reid vapor pressure limitation

established by paragraph (1) to all fuel blends

containing gasoline and 10 percent denatured anhydrous

ethanol that are sold, offered for sale, dispensed,

supplied, offered for supply, transported, or introduced

into commerce in the area during the high ozone season.

``(B) Deadline for promulgation.--The Administrator

shall promulgate regulations under subparagraph (A) not

later than 90 days after the date of receipt of a

notification from a Governor under that subparagraph.

``(C) Effective date.--

``(i) In general.--With respect to an area in

a State for which the Governor submits a

notification under subparagraph (A), the

regulations under that subparagraph shall take

effect on the later of--

``(I) the first day of the first

high ozone season for the area that

begins after the date of receipt of the

notification; or

``(II) 1 year after the date of

receipt of the notification.

``(ii) Extension of effective date based on

determination of insufficient supply.--

``(I) In general.--

If, <<NOTE: Regulations.>> after receipt

of a notification with respect to an

area from a Governor of a State under

subparagraph (A), the Administrator

determines, on the Administrator's own

motion or on petition of any person and

after consultation with the Secretary of

Energy, that the promulgation of

regulations described in subparagraph

(A) would result in an insufficient

supply of gasoline in the State, the

Administrator, by regulation--

``(aa) shall extend the

effective date of the

regulations under clause (i)

with respect to the area for not

more than 1 year; and

``(bb) may renew the

extension under item (aa) for

two additional periods, each of

which shall not exceed 1 year.

``(II) Deadline for action on

petitions.--The Administrator shall act

on any petition submitted under

subclause (I) not later than 180 days

after the date of receipt of the

petition.''.

(d) Survey <<NOTE: 47 USC 7545 note.>> 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 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

[[Page 119 STAT. 1076]]

(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. <<NOTE: 42 USC 7545 note.>> 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; and

(3) 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.

SEC. 1503. <<NOTE: 42 USC 7545 note.>> CLAIMS FILED AFTER ENACTMENT.

Claims and legal actions filed after the date of enactment of this

Act related to allegations involving actual or threatened contamination

of methyl tertiary butyl ether (MTBE) may be removed to the appropriate

United States district court.

SEC. 1504. ELIMINATION OF OXYGEN CONTENT REQUIREMENT FOR REFORMULATED

GASOLINE.

(a) Elimination.--

(1) In general.--Section 211(k) of the Clean Air Act (42

U.S.C. 7545(k)) is amended--

(A) in paragraph (2)--

(i) in the second sentence of subparagraph

(A), by striking ``(including the oxygen content

requirement contained in subparagraph (B))'';

(ii) by striking subparagraph (B); and

(iii) by redesignating subparagraphs (C) and

(D) as subparagraphs (B) and (C), respectively;

(B) in paragraph (3)(A), by striking clause (v); and

(C) in paragraph (7)--

[[Page 119 STAT. 1077]]

(i) in subparagraph (A)--

(I) by striking clause (i); and

(II) by redesignating clauses (ii)

and (iii) as clauses (i) and (ii),

respectively; and

(ii) in subparagraph (C)--

(I) by striking clause (ii); and

(II) by redesignating clause (iii)

as clause (ii).

(2) Applicability.--The <<NOTE: Effective dates. 42 USC 7545

note.>> amendments made by paragraph (1) apply--

(A) in the case of a State that has received a

waiver under section 209(b) of the Clean Air Act (42

U.S.C. 7543(b)), beginning on the date of enactment of

this Act; and

(B) in the case of any other State, beginning 270

days after the date of enactment of this Act.

(b) Maintenance of Toxic Air Pollutant Emission Reductions.--Section

211(k)(1) of the Clean Air Act (42 U.S.C. 7545(k)(1)) is amended--

(1) by striking ``Within 1 year after the enactment of the

Clean Air Act Amendments of 1990,'' and inserting the following:

``(A) In general.--Not <<NOTE: Deadline.>> later

than November 15, 1991,''; and

(2) by adding at the end the following:

``(B) Maintenance of toxic air pollutant emissions

reductions from reformulated gasoline.--

``(i) Definition of padd.--In this

subparagraph the term `PADD' means a Petroleum

Administration for Defense District.

``(ii)

Regulations <<NOTE: Deadline.>> concerning

emissions of toxic air pollutants.--Not later than

270 days after the date of enactment of this

subparagraph, the Administrator shall establish by

regulation, for each refinery or importer (other

than a refiner or importer in a State that has

received a waiver under section 209(b) with

respect to gasoline produced for use in that

State), standards for toxic air pollutants from

use of the reformulated gasoline produced or

distributed by the refiner or importer that

maintain the reduction of the average annual

aggregate emissions of toxic air pollutants for

reformulated gasoline produced or distributed by

the refiner or importer during calendar years 2001

and 2002 (as determined on the basis of data

collected by the Administrator with respect to the

refiner or importer).

``(iii) Standards applicable to specific

refineries or importers.--

``(I) Applicability of standards.--

For any calendar year, the standards

applicable to a refiner or importer

under clause (ii) shall apply to the

quantity of gasoline produced or

distributed by the refiner 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 refiner or importer

during calendar years 2001 and 2002.

[[Page 119 STAT. 1078]]

``(II) Applicability of other

standards.--For any calendar year, the

quantity of gasoline produced or

distributed by a refiner or importer

that is in excess of the quantity

subject to subclause (I) shall be

subject to standards for emissions of

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 <<NOTE: Deadlines. Federal

Register, publication. Reports.>> 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 2001 and

2002; 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 2001 and 2002, 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) <<NOTE: Effective

dates. Regulations.>> 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 refiner or importer

shall meet the standards

applicable under clause (iii)(I)

beginning not later than April 1

of the calendar year following

publication of the report under

subclause (I) and in each

calendar year thereafter.

``(vi) <<NOTE: Deadline. Regulations.>> Not

later than July 1, 2007, the Administrator shall

promulgate final regulations to control hazardous

[[Page 119 STAT. 1079]]

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), and as authorized under section

202(1) of the Clean Air Act. If the Administrator

promulgates by such date, final regulations to

control hazardous air pollutants from motor

vehicles and motor vehicle fuels that achieve and

maintain greater overall reductions in emissions

of air toxics from reformulated gasoline than the

reductions that would be achieved under section

211(k)(1)(B) of the Clean Air Act as amended by

this clause, then sections 211(k)(1)(B)(i) through

211(k)(1)(B)(v) shall be null and void and

regulations promulgated thereunder shall be

rescinded and have no further effect.''.

(c) Consolidation in <<NOTE: Deadline.>> 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 <<NOTE: 42 USC 7545 note.>> Clause.--

(1) In general.--Nothing in this section or any amendment

made by this section affects or prejudices any legal claim or

action with respect to regulations promulgated by the

Administrator before the date of enactment of this Act

regarding--

(A) emissions of toxic air pollutants from motor

vehicles; or

(B) the adjustment of standards applicable to a

specific refinery or importer made under those

regulations.

(2) Adjustment of standards.--

(A) Applicability.--The Administrator may apply any

adjustments to the standards applicable to a refinery or

importer under subparagraph (B)(iii)(I) of section

211(k)(1) of the Clean Air Act (as added by subsection

(b)(2)), except that--

(i) the Administrator shall revise the

adjustments to be based only on calendar years

1999 and 2000;

(ii) 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 and 2000; and

(iii) in the case of an adjustment based on

toxic air pollutant emissions from reformulated

gasoline significantly below the national annual

average emissions of toxic air pollutants from all

reformulated gasoline--

(I) the Administrator may revise the

adjustment to take account of the scope

of the prohibition on methyl tertiary

butyl ether imposed by a State; and

[[Page 119 STAT. 1080]]

(II) any such adjustment shall

require the refiner or importer, to the

maximum extent practicable, to maintain

the reduction achieved during calendar

years 1999 and 2000 in the average

annual aggregate emissions of toxic air

pollutants from reformulated gasoline

produced or distributed by the refiner

or importer.

SEC. 1505. PUBLIC HEALTH AND ENVIRONMENTAL IMPACTS OF FUELS AND FUEL

ADDITIVES.

Section 211(b) of the Clean Air Act (42 U.S.C. 7545(b)) is amended--

(1) in paragraph (2)--

(A) by striking ``may also'' and inserting ``shall,

on a regular basis,''; and

(B) by striking subparagraph (A) and inserting the

following:

``(A) to conduct tests to determine potential public

health and environmental effects of the fuel or additive

(including carcinogenic, teratogenic, or mutagenic

effects); and''; and

(2) by adding at the end the following:

``(4) Study on certain fuel additives and blendstocks.--

``(A) In general.--Not <<NOTE: Deadline.>> later

than 2 years after the date of enactment of this

paragraph, the Administrator shall--

``(i) conduct a study on the effects on public

health (including the effects on children,

pregnant women, minority or low-income

communities, and other sensitive populations), air

quality, and water resources of increased use of,

and the feasibility of using as substitutes for

methyl tertiary butyl ether in gasoline--

``(I) ethyl tertiary butyl ether;

``(II) tertiary amyl methyl ether;

``(III) di-isopropyl ether;

``(IV) tertiary butyl alcohol;

``(V) other ethers and heavy

alcohols, as determined by then

Administrator;

``(VI) ethanol;

``(VII) iso-octane; and

``(VIII) alkylates; and

``(ii) conduct a study on the effects on

public health (including the effects on children,

pregnant women, minority or low-income

communities, and other sensitive populations), air

quality, and water resources of the adjustment for

ethanol-blended reformulated gasoline to the

volatile organic compounds performance

requirements that are applicable under paragraphs

(1) and (3) of section 211(k); and

``(iii) <<NOTE: Reports.>> submit to the

Committee on Environment and Public Works of the

Senate and the Committee on Energy and Commerce of

the House of Representatives a report describing

the results of the studies under clauses (i) and

(ii).

[[Page 119 STAT. 1081]]

``(B) Contracts for study.--In carrying out this

paragraph, the Administrator may enter into one or more

contracts with nongovernmental entities such as--

``(i) the national energy laboratories; and

``(ii) institutions of higher education (as

defined in section 101 of the Higher Education Act

of 1965 (20 U.S.C. 1001)).''.

SEC. 1506. <<NOTE: Deadlines.>> ANALYSES OF MOTOR VEHICLE FUEL CHANGES.

Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by

inserting after subsection (p) the following:

``(q) Analyses of <<NOTE: Publication.>> Motor Vehicle Fuel Changes

and Emissions Model.--

``(1) Anti-backsliding analysis.--

``(A) Draft analysis.--Not <<NOTE: Public

information.>> later than 4 years after the date of

enactment of this paragraph, the Administrator shall

publish for public comment a draft analysis of the

changes in emissions of air pollutants and air quality

due to the use of motor vehicle fuel and fuel additives

resulting from implementation of the amendments made by

the Energy Policy Act of 2005.

``(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 section,

not later than 4 years after the date of enactment of this

paragraph, the Administrator shall develop and finalize an

emissions model that reflects, to the maximum extent

practicable, the effects of gasoline characteristics or

components on emissions from vehicles in the motor vehicle fleet

during calendar year 2007.

``(3) Permeation effects study.--

``(A) In general.--Not later than 1 year after the

date of enactment of this paragraph, the Administrator

shall conduct a study, and report to Congress the

results of the study, on the effects of ethanol content

in gasoline on permeation, the process by which fuel

molecules migrate through the elastomeric materials

(rubber and plastic parts) that make up the fuel and

fuel vapor systems of a motor vehicle.

``(B) Evaporative emissions.--The study shall

include estimates of the increase in total evaporative

emissions likely to result from the use of gasoline with

ethanol content in a motor vehicle, and the fleet of

motor vehicles, due to permeation.''.

SEC. 1507. ADDITIONAL OPT-IN AREAS UNDER REFORMULATED GASOLINE PROGRAM.

Section 211(k)(6) of the Clean Air Act (42 U.S.C. 7545(k)(6)) is

amended--

(1) by striking ``(6) Opt-in areas.--(A) Upon'' and

inserting the following:

``(6) Opt-in areas.--

``(A) Classified areas.--

``(i) In general.--Upon'';

(2) in subparagraph (B), by striking ``(B) If'' and

inserting the following:

[[Page 119 STAT. 1082]]

``(ii) Effect of insufficient domestic

capacity to produce reformulated gasoline.--If'';

(3) in subparagraph (A)(ii) (as redesignated by paragraph

(2))--

(A) in the first sentence, by striking

``subparagraph (A)'' and inserting ``clause (i)''; and

(B) in the second sentence, by striking ``this

paragraph'' and inserting ``this subparagraph''; and

(4) by adding at the end the following:

``(B) Ozone <<NOTE: Deadlines.>> transport region.--

``(i) Application of prohibition.--

``(I) In general.--On application of

the Governor of a State in the ozone

transport region established by section

184(a), the Administrator, not later

than 180 days after the date of receipt

of the application, shall apply the

prohibition specified in paragraph (5)

to any area in the State (other than an

area classified as a marginal, moderate,

serious, or severe ozone nonattainment

area under subpart 2 of part D of title

I) unless the Administrator determines

under clause (iii) that there is

insufficient capacity to supply

reformulated gasoline.

``(II) Publication

of <<NOTE: Federal

Register, publication.>> application.--

As soon as practicable after the date of

receipt of an application under

subclause (I), the Administrator shall

publish the application in the Federal

Register.

``(ii) Period of applicability.--Under clause

(i), the prohibition specified in paragraph (5)

shall apply in a State--

``(I) commencing as soon as

practicable but not later than 2 years

after the date of approval by the

Administrator of the application of the

Governor of the State; and

``(II) ending not earlier than 4

years after the commencement date

determined under subclause (I).

``(iii) Extension of commencement date based

on insufficient capacity.--

``(I) In general.--If, after receipt

of an application from a Governor of a

State under clause (i), the

Administrator determines, on the

Administrator's own motion or on

petition of any person, after

consultation with the Secretary of

Energy, that there is insufficient

capacity to supply reformulated

gasoline, the Administrator, by

regulation--

``(aa) shall extend the

commencement date with respect

to the State under clause

(ii)(I) for not more than 1

year; and

``(bb) may renew the

extension under item (aa) for 2

additional periods, each of

which shall not exceed 1 year.

[[Page 119 STAT. 1083]]

``(II) Deadline for action on

petitions.--The Administrator shall act

on any petition submitted under

subclause (I) not later than 180 days

after the date of receipt of the

petition.''.

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) <<NOTE: Publication.>> 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 are 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. FUEL SYSTEM REQUIREMENTS HARMONIZATION STUDY.

(a) Study.--

(1) In general.--The Administrator of the Environmental

Protection Agency and the Secretary 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 the consumer;

(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 (including the

protection of children, pregnant women, minority

or low-income communities, and other sensitive

populations);

(C) the effect of Federal, State, and local motor

vehicle fuel regulations, including multiple motor

vehicle fuel requirements, on--

[[Page 119 STAT. 1084]]

(i) domestic refiners;

(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, refiners, and

fuel handling facilities;

(E) the feasibility of developing national or

regional motor vehicle fuel slates for the 48 contiguous

States that, while protecting and improving air quality

at the national, regional, and local levels, 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, and the

need for the development of national standards

necessary, 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, on-

road and off-road diesel rules, the reformulated

gasoline program, the renewable content requirements

established by this subtitle, State programs regarding

gasoline volatility, and any other requirements imposed

by the Federal Government, States or localities

affecting the composition of motor fuel.

(b) Report.--

(1) In general.--Not later than June 1, 2008, the

Administrator of the Environmental Protection Agency and the

Secretary shall submit to Congress a report on the results of

the study conducted under subsection (a).

(2) Recommendations.--

(A) In general.--The report shall contain

recommendations for legislative and administrative

actions that may be taken--

(i) to improve air quality;

(ii) to reduce costs to consumers and

producers; and

(iii) to increase supply liquidity.

(B) Required considerations.--The recommendations

under subparagraph (A) shall take into account the need

to provide advance notice of required modifications to

refinery and fuel distribution systems in order to

ensure an adequate supply of motor vehicle fuel in all

States.

(3) Consultation.--In developing the report, the

Administrator of the Environmental Protection Agency and the

Secretary shall consult with--

(A) the Governors of the States;

(B) automobile manufacturers;

(C) State and local air pollution control

regulators;

(D) public health experts;

(E) motor vehicle fuel producers and distributors;

and

(F) the public.

[[Page 119 STAT. 1085]]

SEC. 1510. <<NOTE: 42 USC 16501.>> 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 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.

[[Page 119 STAT. 1086]]

(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. 1511. RENEWABLE FUEL.

The Clean Air Act is amended by inserting after section 211 (42

U.S.C. 7411) the following:

``SEC. 212. <<NOTE: 42 USC 7546.>> RENEWABLE FUEL.

``(a) Definitions.--In this section:

``(1) Municipal solid waste.--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).

``(2) RFG state.--The term `RFG State' means a State in

which is located one or more covered areas (as defined in

section 211(k)(10)(D)).

``(3) Secretary.--The term `Secretary' means the Secretary

of Energy.

``(b) Cellulosic Biomass Ethanol and Municipal Solid Waste Loan

Guarantee Program.--

``(1) In general.--Funds may be provided for the cost (as

defined in the Federal Credit Reform Act of 1990 (2 U.S.C. 661

et seq.)) of loan guarantees issued under title XIV of the

Energy Policy Act to carry out commercial demonstration projects

for celluosic biomass and sucrose-derived ethanol.

``(2) Demonstration projects.--

``(A) In general.--The Secretary shall issue loan

guarantees under this section to carry out not more than

4 projects to commercially demonstrate the feasibility

and viability of producing cellulosic biomass ethanol or

sucrose-derived ethanol, including at least 1 project

that uses cereal straw as a feedstock and 1 project that

uses municipal solid waste as a feedstock.

``(B) Design capacity.--Each project shall have a

design capacity to produce at least 30,000,000 gallons

of cellulosic biomass ethanol each year.

``(3) Applicant assurances.--An applicant for a loan

guarantee under this section shall provide assurances,

satisfactory to the Secretary, that--

``(A) the project design has been validated through

the operation of a continuous process facility with a

cumulative output of at least 50,000 gallons of ethanol;

``(B) the project has been subject to a full

technical review;

[[Page 119 STAT. 1087]]

``(C) the project is covered by adequate project

performance guarantees;

``(D) the project, with the loan guarantee, is

economically viable; and

``(E) there is a reasonable assurance of repayment

of the guaranteed loan.

``(4) Limitations.--

``(A) Maximum guarantee.--Except as provided in

subparagraph (B), a loan guarantee under this section

may be issued for up to 80 percent of the estimated cost

of a project, but may not exceed $250,000,000 for a

project.

``(B) Additional guarantees.--

``(i) In general.--The Secretary may issue

additional loan guarantees for a project to cover

up to 80 percent of the excess of actual project

cost over estimated project cost but not to exceed

15 percent of the amount of the original

guarantee.

``(ii) Principal and interest.--Subject to

subparagraph (A), the Secretary shall guarantee

100 percent of the principal and interest of a

loan made under subparagraph (A).

``(5) Equity contributions.--To be eligible for a loan

guarantee under this section, an applicant for the loan

guarantee shall have binding commitments from equity investors

to provide an initial equity contribution of at least 20 percent

of the total project cost.

``(6) Insufficient amounts.--If the amount made available to

carry out this section is insufficient to allow the Secretary to

make loan guarantees for 3 projects described in subsection (b),

the Secretary shall issue loan guarantees for one or more

qualifying projects under this section in the order in which the

applications for the projects are received by the Secretary.

``(7) Approval.--An <<NOTE: Deadline.>> application for a

loan guarantee under this section shall be approved or

disapproved by the Secretary not later than 90 days after the

application is received by the Secretary.

``(c) Authorization

of <<NOTE: Mississippi. Oklahoma.>> Appropriations for Resource

Center.--There is 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

Mississippi State University and the Oklahoma State University,

$4,000,000 for each of fiscal years 2005 through 2007.

``(d) Renewable Fuel Production Research and Development Grants.--

``(1) In general.--The Administrator 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

[[Page 119 STAT. 1088]]

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 is authorized

to be appropriated to carry out this subsection $25,000,000 for

each of fiscal years 2006 through 2010.

``(e) Cellulosic Biomass Ethanol Conversion Assistance.--

``(1) In general.--The Secretary may provide grants to

merchant producers of cellulosic biomass ethanol in the United

States to assist the producers in building eligible production

facilities described in paragraph (2) for the production of

cellulosic biomass 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 feedstocks derived

from agricultural residues or municipal solid waste.

``(3) Authorization of appropriations.--There is authorized

to be appropriated to carry out this subsection--

``(A) $250,000,000 for fiscal year 2006; and

``(B) $400,000,000 for fiscal year 2007.''.

SEC. 1512. CONVERSION ASSISTANCE FOR CELLULOSIC BIOMASS, WASTE-DERIVED

ETHANOL, APPROVED RENEWABLE FUELS.

Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by

adding at the end the following:

``(r) Conversion Assistance for Cellulosic Biomass, Waste-Derived

Ethanol, Approved Renewable Fuels.--

``(1) In general.--The Secretary of Energy may provide

grants to merchant producers of cellulosic biomass ethanol,

waste-derived ethanol, and approved renewable fuels in the

United States to assist the producers in building eligible

production facilities described in paragraph (2) for the

production of ethanol or approved renewable fuels.

``(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 or renewable biomass or waste-

derived feedstocks derived from agricultural residues,

wood residues, municipal solid waste, or agricultural

byproducts.

``(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 2006.

``(B) $250,000,000 for fiscal year 2007.

``(C) $400,000,000 for fiscal year 2008.

``(4) Definitions.--For the purposes of this subsection:

``(A) The term `approved renewable fuels' are fuels

and components of fuels that have been approved by the

Department of Energy, as defined in section 301 of the

Energy

[[Page 119 STAT. 1089]]

Policy Act of 1992 (42 U.S.C. 13211), which have been

made from renewable biomass.

``(B) The term `renewable biomass' is, as defined in

Presidential Executive Order 13134, published in the

Federal Register on August 16, 1999, any organic matter

that is available on a renewable or recurring basis

(excluding old-growth timber), including dedicated

energy crops and trees, agricultural food and feed crop

residues, aquatic plants, animal wastes, wood and wood

residues, paper and paper residues, and other vegetative

waste materials. Old-growth timber means timber of a

forest from the late successional stage of forest

development.''.

SEC. 1513. 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

CFR 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).

[[Page 119 STAT. 1090]]

``(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 <<NOTE: Notice. Deadline.>> Administrator shall promulgate,

after notice and comment, regulations implementing this

subsection within 1 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.''.

SEC. 1514. <<NOTE: 42 USC 16502.>> ADVANCED BIOFUEL TECHNOLOGIES

PROGRAM.

(a) In General.--Subject to the availability of appropriations under

subsection (d), the Administrator of the Environmental Protection Agency

shall, in consultation with the Secretary of Agriculture and the Biomass

Research and Development Technical Advisory Committee established under

section 306 of the Biomass Research and Development Act of 2000 (Public

Law 106-224; 7 U.S.C. 8101 note), establish a program, to be known as

the ``Advanced Biofuel Technologies Program'', to demonstrate advanced

technologies for the production of alternative transportation fuels.

(b) Priority.--In carrying out the program under subsection (a), the

Administrator shall give priority to projects that enhance the

geographical diversity of alternative fuels production and utilize

feedstocks that represent 10 percent or less of ethanol or biodiesel

fuel production in the United States during the previous fiscal year.

(c) Demonstration Projects.--

(1) In general.--As part of the program under subsection

(a), the Administrator shall fund demonstration projects--

(A) to develop not less than 4 different conversion

technologies for producing cellulosic biomass ethanol;

and

(B) to develop not less than 5 technologies for

coproducing value-added bioproducts (such as

fertilizers, herbicides, and pesticides) resulting from

the production of biodiesel fuel.

(2) Administration.--Demonstration projects under this

subsection shall be--

(A) conducted based on a merit-reviewed, competitive

process; and

[[Page 119 STAT. 1091]]

(B) subject to the cost-sharing requirements of

section 988.

(d) Authorization of Appropriations.--There are authorized to be

appropriated to carry out this section $110,000,000 for each of fiscal

years 2005 through 2009.

SEC. 1515. WASTE-DERIVED ETHANOL AND BIODIESEL.

Section 312(f)(1) of the Energy Policy Act of 1992 (42 U.S.C.

13220(f)(1)) is amended--

(1) by striking `` `biodiesel' means'' and inserting the

following: `` `biodiesel'--

``(A) means''; and

(2) in subparagraph (A) (as designated by paragraph (1)) by

striking ``and'' at the end and inserting the following:

``(B) includes biodiesel derived from--

``(i) animal wastes, including poultry fats

and poultry wastes, and other waste materials; or

``(ii) municipal solid waste and sludges and

oils derived from wastewater and the treatment of

wastewater; and''.

SEC. 1516. <<NOTE: 42 USC 16503.>> SUGAR ETHANOL LOAN GUARANTEE PROGRAM.

(a) In General.--Funds may be provided for the cost (as defined in

section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of

loan guarantees issued under title XIV to carry out commercial

demonstration projects for ethanol derived from sugarcane, bagasse, and

other sugarcane byproducts.

(b) Demonstration Projects.--The Secretary may issue loan guarantees

under this section to projects to demonstrate commercially the

feasibility and viability of producing ethanol using sugarcane,

sugarcane bagasse, and other sugarcane byproducts as a feedstock.

(c) Requirements.--An applicant for a loan guarantee under this

section may provide assurances, satisfactory to the Secretary, that--

(1) the project design has been validated through the

operation of a continuous process facility;

(2) the project has been subject to a full technical review;

(3) the project, with the loan guarantee, is economically

viable; and

(4) there is a reasonable assurance of repayment of the

guaranteed loan.

(d) Limitations.--

(1) Maximum guarantee.--Except as provided in paragraph (2),

a loan guarantee under this section--

(A) may be issued for up to 80 percent of the

estimated cost of a project; but

(B) shall not exceed $50,000,000 for any 1 project.

(2) Additional guarantees.--

(A) In general.--The Secretary may issue additional

loan guarantees for a project to cover--

(i) up to 80 percent of the excess of actual

project costs; but

(ii) not to exceed 15 percent of the amount of

the original loan guarantee.

[[Page 119 STAT. 1092]]

(B) Principal and interest.--Subject to subparagraph

(A), the Secretary shall guarantee 100 percent of the

principal and interest of a loan guarantee made under

subparagraph (A).

Subtitle B--Underground <<NOTE: Underground Storage Tank Compliance

Act.>> Storage Tank Compliance

SEC. 1521. <<NOTE: 42 USC 6901 note.>> SHORT TITLE.

This subtitle may be cited as the ``Underground Storage Tank

Compliance Act''.

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) corrective 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); or

``(iii) 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

[[Page 119 STAT. 1093]]

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.''.

(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).''.

(c) Ability to Pay.--Section 9003(h)(6) of the Solid Waste Disposal

Act (42 U.S.C. 6591a(h)(6)) is <<NOTE: 42 USC 6991b.>> amended by adding

the following new subparagraph at the end thereof:

``(E) Inability or limited ability to pay.--

``(i) In general.--In determining the level of

recovery effort, or amount that should be

recovered, the Administrator (or the State

pursuant to paragraph (7)) shall consider the

owner or operator's ability to pay. An inability

or limited ability to pay corrective action costs

must be demonstrated to the Administrator (or the

State pursuant to paragraph (7)) by the owner or

operator.

``(ii) Considerations.--In determining whether

or not a demonstration is made under clause (i),

the Administrator (or the State pursuant to

paragraph (7)) shall take into consideration the

ability of the

[[Page 119 STAT. 1094]]

owner or operator to pay corrective action costs

and still maintain its basic business operations,

including consideration of the overall financial

condition of the owner or operator and

demonstrable constraints on the ability of the

owner or operator to raise revenues.

``(iii) Information.--An owner or operator

requesting consideration under this subparagraph

shall promptly provide the Administrator (or the

State pursuant to paragraph (7)) with all relevant

information needed to determine the ability of the

owner or operator to pay corrective action costs.

``(iv) Alternative payment methods.--The

Administrator (or the State pursuant to paragraph

(7)) shall consider alternative payment methods as

may be necessary or appropriate if the

Administrator (or the State pursuant to paragraph

(7)) determines that an owner or operator cannot

pay all or a portion of the costs in a lump sum

payment.

``(v) Misrepresentation.--If an owner or

operator provides false information or otherwise

misrepresents their financial situation under

clause (ii), the Administrator (or the State

pursuant to paragraph (7)) shall seek full

recovery of the costs of all such actions pursuant

to the provisions of subparagraph (A) without

consideration of the factors in subparagraph

(B).''.

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 <<NOTE: Deadline.>> 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 CFR 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 CFR 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).''.

[[Page 119 STAT. 1095]]

(b) Study of <<NOTE: Reports. Deadline.>> 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) <<NOTE: Deadline. Notification. Public

information. Publication.>> Guidelines.--

``(1) In general.--Not later than 2 years after the date of

enactment of the Underground Storage Tank Compliance Act, in

consultation and cooperation with States and after public notice

and opportunity for comment, the Administrator shall publish

guidelines that specify training requirements for--

``(A) persons having primary responsibility for on-

site operation and maintenance of underground storage

tank systems;

``(B) persons having daily on-site responsibility

for the operation and maintenance of underground storage

tanks systems; and

``(C) daily, on-site employees having primary

responsibility for addressing emergencies presented by a

spill or release from an underground storage tank

system.

``(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;

``(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;

``(F) the substantial differences in the scope and

length of training needed for the different classes of

persons described in subparagraphs (A), (B), and (C) of

paragraph (1); and

``(G) such other factors as the Administrator

determines to be necessary to carry out this section.

``(b) State <<NOTE: Deadline.>> 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);

[[Page 119 STAT. 1096]]

``(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) Training.--All persons that are subject to the operator

training requirements of subsection (a) 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 the

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.--

[[Page 119 STAT. 1097]]

``(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 <<NOTE: Contracts.>> 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. <<NOTE: 42 USC 6991j.>> 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) <<NOTE: Deadline.>> 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.

[[Page 119 STAT. 1098]]

``(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. <<NOTE: 42 USC 6991k.>> DELIVERY PROHIBITION.

``(a) Requirements.--

``(1) Prohibition <<NOTE: Effective date.>> 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 such delivery,

deposit, or acceptance.

``(2) Guidance.--Within 1 <<NOTE: Deadline.>> year after the

date of enactment of this section, the Administrator shall, in

consultation with the States, underground storage tank owners,

and product delivery industries, publish guidelines detailing

the specific

[[Page 119 STAT. 1099]]

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,

deposit, or acceptance of a regulated substance;

``(B) the mechanisms for identifying which

facilities are ineligible for delivery, deposit, or

acceptance of a regulated substance to the underground

storage tank owning and fuel delivery industries;

``(C) the process for reclassifying ineligible

facilities as eligible for delivery, deposit, or

acceptance of a regulated substance;

``(D) one or more processes for providing adequate

notice to underground storage tank owners and operators

and supplier industries that an underground storage tank

has been determined to be ineligible for delivery,

deposit, or acceptance or a regulated substance; and

``(E) a delineation of, or a process for

determining, the specified geographic areas subject to

paragraph (4).

``(3) Compliance.--States that receive funding under this

subtitle shall, at a minimum, comply with the processes and

procedures published under paragraph (2).

``(4) Consideration.--

``(A) Rural and remote areas.--Subject to

subparagraph (B), the Administrator or a State may

consider not treating an underground storage tank as

ineligible for delivery, deposit, or acceptance of a

regulated substance if such treatment would jeopardize

the availability of, or access to, fuel in any rural and

remote areas unless an urgent threat to public health,

as determined by the Administrator, exists.

``(B) Applicability.--Subparagraph (A) shall apply

only during the 180-day period following the date of a

determination by the Administrator or the appropriate

State under subparagraph (A).

``(b) Effect on State Authority.--Nothing in this section shall

affect or preempt the authority of a State to prohibit the delivery,

deposit, or acceptance 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 person has not been provided with notice

pursuant to subsection (a)(2)(D) of the ineligibility of a facility for

delivery, deposit, or acceptance of a regulated substance as determined

by the Administrator or a State, as appropriate, under this section.''.

(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.''.

[[Page 119 STAT. 1100]]

(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. <<NOTE: Penalties. Exemptions.>> 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

[[Page 119 STAT. 1101]]

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 1 year, but additional exemptions may be granted for periods

not to exceed 1 year upon the President's making a new

determination. <<NOTE: President. Reports.>> 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) <<NOTE: Deadline.>> Review.--Not later than 12 months

after the date of enactment of the Underground Storage Tank

Compliance Act, each Federal agency that owns or operates one or

more underground storage tanks, or that manages land on which

one 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 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. <<NOTE: 42 USC 6991l.>> TANKS ON TRIBAL LANDS.

``(a) Strategy.--The <<NOTE: Deadline.>> 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

[[Page 119 STAT. 1102]]

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 <<NOTE: Public information.>> 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. ADDITIONAL MEASURES TO PROTECT GROUNDWATER.

(a) In General.--Section 9003 of the Solid Waste Disposal Act (42

U.S.C. 6991b) is amended by adding the following new subsection at the

end:

``(i) Additional Measures to Protect Groundwater From

Contamination.--The Administrator shall require each State that receives

funding under this subtitle to require one of the following:

``(1) Tank and piping secondary containment.--(A) Each new

underground storage tank, or piping connected to any such new

tank, installed after the effective date of this subsection, or

any existing underground storage tank, or existing piping

connected to such existing tank, that is replaced after the

effective date of this subsection, shall be secondarily

contained and monitored for leaks if the new or replaced

underground storage tank or piping is within 1,000 feet of any

existing community water system or any existing potable drinking

water well.

``(B) In the case of a new underground storage tank system

consisting of one or more underground storage tanks and

connected by piping, subparagraph (A) shall apply to all

underground storage tanks and connected pipes comprising such

system.

``(C) In the case of a replacement of an existing

underground storage tank or existing piping connected to the

underground storage tank, subparagraph (A) shall apply only to

the specific underground storage tank or piping being replaced,

[[Page 119 STAT. 1103]]

not to other underground storage tanks and connected pipes

comprising such system.

``(D) Each installation of a new motor fuel dispenser

system, after the effective date of this subsection, shall

include under-dispenser spill containment if the new dispenser

is within 1,000 feet of any existing community water system or

any existing potable drinking water well.

``(E) This paragraph shall not apply to repairs to an

underground storage tank, piping, or dispenser that are meant to

restore a tank, pipe, or dispenser to operating condition.

``(F) As used in this subsection:

``(i) The term `secondarily contained' means a

release detection and prevention system that meets the

requirements of 40 CFR 280.43(g), but shall not include

under-dispenser spill containment or control systems.

``(ii) The term `underground storage tank' has the

meaning given to it in section 9001, except that such

term does not include tank combinations or more than a

single underground pipe connected to a tank.

``(iii) The term `installation of a new motor fuel

dispenser system' means the installation of a new motor

fuel dispenser and the equipment necessary to connect

the dispenser to the underground storage tank system,

but does not mean the installation of a motor fuel

dispenser installed separately from the equipment need

to connect the dispenser to the underground storage tank

system.

``(2) Evidence of financial responsibility and

certification.--

``(A) Manufacturer and installer financial

responsibility.--A person that manufactures an

underground storage tank or piping for an underground

storage tank system or that installs an underground

storage tank system is required to maintain evidence of

financial responsibility under section 9003(d) in order

to provide for the costs of corrective actions directly

related to releases caused by improper manufacture or

installation unless the person can demonstrate

themselves to be already covered as an owner or operator

of an underground storage tank under section 9003.

``(B) Installer certification.--The Administrator

and each State that receives funding under this

subtitle, as appropriate, shall require that a person

that installs an underground storage tank system is--

``(i) certified or licensed by the tank and

piping manufacturer;

``(ii) certified or licensed by the

Administrator or a State, as appropriate;

``(iii) has their underground storage tank

system installation certified by a registered

professional engineer with education and

experience in underground storage tank system

installation;

``(iv) has had their installation of the

underground storage tank inspected and approved by

the Administrator or the State, as appropriate;

``(v) compliant with a code of practice

developed by a nationally recognized association

or independent

[[Page 119 STAT. 1104]]

testing laboratory and in accordance with the

manufacturer's instructions; or

``(vi) compliant with another method that is

determined by the Administrator or a State, as

appropriate, to be no less protective of human

health and the environment.

``(C) Savings clause.--Nothing in subparagraph (A)

alters or affects the liability of any owner or operator

of an underground storage tank.''.

(b) Effective Date.--This <<NOTE: 42 USC 6991b note.>> subsection

shall take effect 18 months after the date of enactment of this

subsection.

(c) Promulgation of <<NOTE: 42 USC 6991b note.>> Regulations or

Guidelines.--The Administrator shall issue regulations or guidelines

implementing the requirements of this subsection, including guidance to

differentiate between the terms ``repair'' and ``replace'' for the

purposes of section 9003(i)(1) of the Solid Waste Disposal Act.

(d) Penalties.--Section 9006(d)(2) of such Act (42 U.S.C.

6991e(d)(2)) is amended as follows:

(1) By striking ``or'' at the end of subparagraph (B).

(2) By inserting ``; or'' at the end of subparagraph (C).

(3) By adding the following new subparagraph after

subparagraph (C):

``(D) the requirements established in section

9003(i),''.

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. <<NOTE: 42 USC 6991m.>> 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

2005 through 2009.

``(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 2005

through 2009;

``(B) to carry out section 9003(h)(12), $200,000,000

for each of fiscal years 2005 through 2009;

``(C) to carry out sections 9003(i), 9004(f), and

9005(c) $100,000,000 for each of fiscal years 2005

through 2009; and

``(D) to carry out sections 9010, 9011, 9012, and

9013 $55,000,000 for each of fiscal years 2005 through

2009.''.

(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:''.

[[Page 119 STAT. 1105]]

(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''.

[[Page 119 STAT. 1106]]

Subtitle C--Boutique Fuels

SEC. 1541. REDUCING THE PROLIFERATION OF BOUTIQUE FUELS.

(a) Temporary Waivers During Supply Emergencies.--Section

211(c)(4)(C) of the Clean Air Act (42 U.S.C. 7545(c)(4)(C)) is amended

by inserting ``(i)'' after ``(C)'' and by adding the following new

clauses at the end thereof:

``(ii) The Administrator may temporarily waive a control or

prohibition respecting the use of a fuel or fuel additive required or

regulated by the Administrator pursuant to subsection (c), (h), (i),

(k), or (m) of this section or prescribed in an applicable

implementation plan under section 110 approved by the Administrator

under clause (i) of this subparagraph if, after consultation with, and

concurrence by, the Secretary of Energy, the Administrator determines

that--

``(I) extreme and unusual fuel or fuel additive supply

circumstances exist in a State or region of the Nation which

prevent the distribution of an adequate supply of the fuel or

fuel additive to consumers;

``(II) such extreme and unusual fuel and fuel additive

supply circumstances are the result of a natural disaster, an

Act of God, a pipeline or refinery equipment failure, or another

event that could not reasonably have been foreseen or prevented

and not the lack of prudent planning on the part of the

suppliers of the fuel or fuel additive to such State or region;

and

``(III) it is in the public interest to grant the waiver

(for example, when a waiver is necessary to meet projected

temporary shortfalls in the supply of the fuel or fuel additive

in a State or region of the Nation which cannot otherwise be

compensated for).

``(iii) If the Administrator makes the determinations required under

clause (ii), such a temporary extreme and unusual fuel and fuel additive

supply circumstances waiver shall be permitted only if--

``(I) the waiver applies to the smallest geographic area

necessary to address the extreme and unusual fuel and fuel

additive supply circumstances;

``(II) the waiver is effective for a period of 20 calendar

days or, if the Administrator determines that a shorter waiver

period is adequate, for the shortest practicable time period

necessary to permit the correction of the extreme and unusual

fuel and fuel additive supply circumstances and to mitigate

impact on air quality;

``(III) the waiver permits a transitional period, the exact

duration of which shall be determined by the Administrator (but

which shall be for the shortest practicable period), after the

termination of the temporary waiver to permit wholesalers and

retailers to blend down their wholesale and retail inventory;

``(IV) the waiver applies to all persons in the motor fuel

distribution system; and

``(V) the Administrator has given public notice to all

parties in the motor fuel distribution system, and local and

State regulators, in the State or region to be covered by the

waiver.

The term `motor fuel distribution system' as used in this clause shall

be defined by the Administrator through rulemaking.

[[Page 119 STAT. 1107]]

``(iv) <<NOTE: Regulations. Deadline.>> Within 180 days of the date

of enactment of this clause, the Administrator shall promulgate

regulations to implement clauses (ii) and (iii).

``(v) Nothing in this subparagraph shall--

``(I) limit or otherwise affect the application of any other

waiver authority of the Administrator pursuant to this section

or pursuant to a regulation promulgated pursuant to this

section; and

``(II) subject any State or person to an enforcement action,

penalties, or liability solely arising from actions taken

pursuant to the issuance of a waiver under this subparagraph.''.

(b) Limit on Number of Boutique Fuels.--Section 211(c)(4)(C) of the

Clean Air Act (42 U.S.C. 7545(c)(4)(C)), as amended by subsection (a),

is further amended by adding at the end the following:

``(v)(I) The Administrator shall have no authority, when considering

a State implementation plan or a State implementation plan revision, to

approve under this paragraph any fuel included in such plan or revision

if the effect of such approval increases the total number of fuels

approved under this paragraph as of September 1, 2004, in all State

implementation plans.

``(II) <<NOTE: Deadline. Federal Register, publication. Public

information.>> The Administrator, in consultation with the Secretary of

Energy, shall determine the total number of fuels approved under this

paragraph as of September 1, 2004, in all State implementation plans and

shall publish a list of such fuels, including the States and Petroleum

Administration for Defense District in which they are used, in the

Federal Register for public review and comment no later than 90 days

after enactment.

``(III) The Administrator shall remove a fuel from the list

published under subclause (II) if a fuel ceases to be included in a

State implementation plan or if a fuel in a State implementation plan is

identical to a Federal fuel formulation implemented by the

Administrator, but the Administrator shall not reduce the total number

of fuels authorized under the list published under subclause (II).

``(IV) Subclause (I) shall not limit the Administrator's authority

to approve a control or prohibition respecting any new fuel under this

paragraph in a State implementation plan or revision to a State

implementation plan if such new fuel--

``(aa) completely replaces a fuel on the list published

under subclause (II); or

``(bb) does not increase the total number of fuels on the

list published under subclause (II) as of September 1, 2004.

In the <<NOTE: Supply. Federal Register, publication.>> event that the

total number of fuels on the list published under subclause (II) at the

time of the Administrator's consideration of a control or prohibition

respecting a new fuel is lower than the total number of fuels on such

list as of September 1, 2004, the Administrator may approve a control or

prohibition respecting a new fuel under this subclause if the

Administrator, after consultation with the Secretary of Energy,

publishes in the Federal Register after notice and comment a finding

that, in the Administrator's judgment, such control or prohibition

respecting a new fuel will not cause fuel supply or distribution

interruptions or have a significant adverse impact on fuel producibility

in the affected area or contiguous areas.

``(V) The Administrator shall have no authority under this

paragraph, when considering any particular State's implementation

[[Page 119 STAT. 1108]]

plan or a revision to that State's implementation plan, to approve any

fuel unless that fuel was, as of the date of such consideration,

approved in at least one State implementation plan in the applicable

Petroleum Administration for Defense District. However, the

Administrator may approve as part of a State implementation plan or

State implementation plan revision a fuel with a summertime Reid Vapor

Pressure of 7.0 psi. In no event shall such approval by the

Administrator cause an increase in the total number of fuels on the list

published under subclause (II).

``(VI) Nothing in this clause shall be construed to have any effect

regarding any available authority of States to require the use of any

fuel additive registered in accordance with subsection (b), including

any fuel additive registered in accordance with subsection (b) after the

enactment of this subclause.''.

(c) Study and Report to Congress on Boutique Fuels.--

(1) Joint study.--The Administrator of the Environmental

Protection Agency and the Secretary shall undertake a study of

the effects on air quality, on the number of fuel blends, on

fuel availability, on fuel fungibility, and on fuel costs of the

State plan provisions adopted pursuant to section 211(c)(4)(C)

of the Clean Air Act (42 U.S.C. 7545(c)(4)(C)).

(2) Focus of study.--The primary focus of the study required

under paragraph (1) shall be to determine how to develop a

Federal fuels system that maximizes motor fuel fungibility and

supply, addresses air quality requirements, and reduces motor

fuel price volatility including that which has resulted from the

proliferation of boutique fuels, and to recommend to Congress

such legislative changes as are necessary to implement such a

system. The study should include the impacts on overall energy

supply, distribution, and use as a result of the legislative

changes recommended.

(3) Conduct of study.--In <<NOTE: Science and

technology.>> carrying out their joint duties under this

section, the Administrator and the Secretary shall use sound

science and objective science practices, shall consider the best

available science, shall use data collected by accepted means

and shall consider and include a description of the weight of

the scientific evidence. The Administrator and the Secretary

shall coordinate the study required by this section with other

studies required by the Act.

(4) Responsibility of administrator.--In carrying out the

study required by this section, the Administrator shall

coordinate obtaining comments from affected parties interested

in the air quality impact assessment portion of the study.

(5) Responsibility of secretary.--In carrying out the study

required by this section, the Secretary shall coordinate

obtaining comments from affected parties interested in the fuel

availability, number of fuel blends, fuel fungibility, and fuel

costs portion of the study.

(6) Report to congress.--

The <<NOTE: Deadline.>> Administrator and the Secretary jointly

shall submit the results of the study required by this section

in a report to the Congress not later than 12 months after the

date of the enactment of this Act, together with any recommended

regulatory and legislative changes. Such report shall be

submitted to the Committee on Energy and Commerce of the United

States House of Representatives and the Committees on Energy and

Natural Resources and on Environment and Public Works of the

Senate.

[[Page 119 STAT. 1109]]

(7) Authorization of appropriations.--There is authorized to

be appropriated jointly to the Administrator and the Secretary

$500,000 for the completion of the study required under this

subsection.

(d) Definitions.--In this section:

(1) The term ``Administrator'' means the Administrator of

the Environmental Protection Agency.

(2) The term ``fuel'' means gasoline, diesel fuel, and any

other liquid petroleum product commercially known as gasoline

and diesel fuel for use in highway and nonroad motor vehicles.

(3) The term ``a control or prohibition respecting a new

fuel'' means a control or prohibition on the formulation,

composition, or emissions characteristics of a fuel that would

require the increase or decrease of a constituent in gasoline or

diesel fuel.

TITLE XVI--CLIMATE CHANGE

Subtitle A--National Climate Change Technology Deployment

SEC. 1601. GREENHOUSE GAS INTENSITY REDUCING TECHNOLOGY STRATEGIES.

Title XVI of the Energy Policy Act of 1992 (42 U.S.C. 13381 et seq.)

is amended by adding at the end the following:

``SEC. 1610. <<NOTE: 42 USC 13389.>> GREENHOUSE GAS INTENSITY REDUCING

STRATEGIES.

``(a) Definitions.--In this section:

``(1) Advisory committee.--The term `Advisory Committee'

means the Climate Change Technology Advisory Committee

established under subsection (f)(1).

``(2) Carbon sequestration.--The term `carbon sequestration'

means the capture of carbon dioxide through terrestrial,

geological, biological, or other means, which prevents the

release of carbon dioxide into the atmosphere.

``(3) Committee.--The term `Committee' means the Committee

on Climate Change Technology established under subsection

(b)(1).

``(4) Developing country.--The term `developing country' has

the meaning given the term in section 1608(m).

``(5) Greenhouse gas.--The term `greenhouse gas' means--

``(A) carbon dioxide;

``(B) methane;

``(C) nitrous oxide;

``(D) hydrofluorocarbons;

``(E) perfluorocarbons; and

``(F) sulfur hexafluoride.

``(6) Greenhouse gas intensity.--The term `greenhouse gas

intensity' means the ratio of greenhouse gas emissions to

economic output.

``(7) National laboratory.--The term `National Laboratory'

has the meaning given the term in section 3(3) of the Energy

Policy Act of 2005.

``(b) Committee on <<NOTE: Establishment. Deadline.>> Climate Change

Technology.--

[[Page 119 STAT. 1110]]

``(1) In general.--Not later than 180 days after the date of

enactment of this section, the President shall establish a

Committee on Climate Change Technology to--

``(A) integrate current Federal climate reports; and

``(B) coordinate Federal climate change technology

activities and programs carried out in furtherance of

the strategy developed under subsection (c)(1).

``(2) Membership.--The Committee shall be composed of at

least 7 members, including--

``(A) the Secretary, who shall chair the Committee;

``(B) the Secretary of Commerce;

``(C) the Chairman of the Council on Environmental

Quality;

``(D) the Secretary of Agriculture;

``(E) the Administrator of the Environmental

Protection Agency;

``(F) the Secretary of Transportation;

``(G) the Director of the Office of Science and

Technology Policy; and

``(H) other representatives as may be determined by

the President.

``(3) Staff.--The members of the Committee shall provide

such personnel as are necessary to enable the Committee to

perform its duties.

``(c) National <<NOTE: Research and development. Deadline.>> Climate

Change Technology Policy.--

``(1) In general.--Not later than 18 months after the date

of enactment of this section, the Committee shall, based on

applicable Federal climate reports, submit to the Secretary and

the President a national strategy to promote the deployment and

commercialization of greenhouse gas intensity reducing

technologies and practices developed through research and

development programs conducted by the National Laboratories,

other Federal research facilities, institutions of higher

education, and the private sector.

``(2) Updates.--The Committee shall--

``(A) <<NOTE: Public information.>> at the time of

submission of the strategy to the President under

paragraph (1), also make the strategy available to the

public; and

``(B) update the strategy every 5 years, or more

frequently as the Committee determines to be necessary.

``(d) Climate <<NOTE: Establishment. Deadline.>> Change Technology

Program.--Not later than 180 days after the date on which the Committee

is established under subsection (b)(1), the Secretary, in consultation

with the Committee, shall establish within the Department of Energy the

Climate Change Technology Program to--

``(1) assist the Committee in the interagency coordination

of climate change technology research, development,

demonstration, and deployment to reduce greenhouse gas

intensity; and

``(2) carry out the programs authorized under this section.

``(e) Technology Inventory.--

``(1) In general.--The <<NOTE: Public

information.>> Secretary shall conduct and make public an

inventory and evaluation of greenhouse gas intensity reducing

technologies that have been developed, or are under development,

by the National Laboratories, other Federal research facilities,

institutions of higher education, and the private sector to

determine which technologies are suitable for commercialization

and deployment.

[[Page 119 STAT. 1111]]

``(2) Report.--Not later than 180 days after the completion

of the inventory under paragraph (1), the Secretary shall submit

to Congress a report that includes the results of the completed

inventory and any recommendations of the Secretary.

``(3) Use.--The Secretary shall use the results of the

inventory as guidance in the commercialization and deployment of

greenhouse gas intensity reducing technologies.

``(4) Updated inventory.--The Secretary shall--

``(A) periodically update the inventory under

paragraph (1), including when determined necessary by

the Committee; and

``(B) make the updated inventory available to the

public.

``(f) Climate Change Technology Advisory Committee.--

``(1) In general.--The Secretary, in consultation with the

Committee, may establish under section 624 of the Department of

Energy Organization Act (42 U.S.C. 7234) a Climate Change

Technology Advisory Committee to identify statutory, regulatory,

economic, and other barriers to the commercialization and

deployment of greenhouse gas intensity reducing technologies and

practices in the United States.

``(2) Composition.--The Advisory Committee shall be composed

of the following members, to be appointed by the Secretary, in

consultation with the Committee:

``(A) 1 representative shall be appointed from each

National Laboratory.

``(B) 3 members shall be representatives of energy-

producing trade organizations.

``(C) 3 members shall represent energy-intensive

trade organizations.

``(D) 3 members shall represent groups that

represent end-use energy and other consumers.

``(E) 3 members shall be employees of the Federal

Government who are experts in energy technology,

intellectual property, and tax.

``(F) 3 members shall be representatives of

institutions of higher education with expertise in

energy technology development that are recommended by

the National Academy of Engineering.

``(3) Report.--Not later than 1 year after the date of

enactment of this section and annually thereafter, the Advisory

Committee shall submit to the Committee a report that

describes--

``(A) the findings of the Advisory Committee; and

``(B) any recommendations of the Advisory Committee

for the removal or reduction of barriers to

commercialization, deployment, and increasing the use of

greenhouse gas intensity reducing technologies and

practices.

``(g) Greenhouse Gas Intensity Reducing Technology Deployment.--

``(1) In general.--Based on the strategy developed under

subsection (c)(1), the technology inventory conducted under

subsection (e)(1), the greenhouse gas intensity reducing

technology study report submitted under subsection (e)(2), and

reports under subsection (f)(3), if any, the Committee shall

develop recommendations that would provide for the removal of

[[Page 119 STAT. 1112]]

domestic barriers to the commercialization and deployment of

greenhouse gas intensity reducing technologies and practices.

``(2) Requirements.--In developing the recommendations under

paragraph (1), the Committee shall consider in the aggregate--

``(A) the cost-effectiveness of the technology;

``(B) fiscal and regulatory barriers;

``(C) statutory and other barriers; and

``(D) intellectual property issues.

``(3) Demonstration projects.--In developing recommendations

under paragraph (1), the Committee may identify the need for

climate change technology demonstration projects.

``(4) Report.--Not later than 18 months after the date of

enactment of this section, the Committee shall submit to the

President and Congress a report that--

``(A) identifies, based on the report submitted

under subsection (f)(3), any barriers to, and commercial

risks associated with, the deployment of greenhouse gas

intensity reducing technologies; and

``(B) includes a plan for carrying out demonstration

projects.

``(5) Updates.--The Committee shall--

``(A) <<NOTE: Public information.>> at the time of

submission of the report to Congress under paragraph

(4), also make the report available to the public; and

``(B) update the report every 5 years, or more

frequently as the Committee determines to be necessary.

``(h) Procedures for <<NOTE: Notification. Public

information.>> Calculating, Monitoring, and Analyzing Greenhouse Gas

Intensity.--The Secretary, in collaboration with the Committee and the

National Institute of Standards and Technology, and after public notice

and opportunity for comment, shall develop standards and best practices

for calculating, monitoring, and analyzing greenhouse gas intensity.

``(i) Demonstration Projects.--

``(1) In general.--The Secretary shall, subject to the

availability of appropriations, support demonstration projects

that--

``(A) increase the reduction of the greenhouse gas

intensity to levels below that which would be achieved

by technologies being used in the United States as of

the date of enactment of this section;

``(B) maximize the potential return on Federal

investment;

``(C) demonstrate distinct roles in public-private

partnerships;

``(D) produce a large-scale reduction of greenhouse

gas intensity if commercialization occurred; and

``(E) support a diversified portfolio to mitigate

the uncertainty associated with a single technology.

``(2) Cost sharing.--In supporting a demonstration project

under this subsection, the Secretary shall require cost-sharing

in accordance with section 988 of the Energy Policy Act of 2005.

``(3) Authorization of appropriations.--There are authorized

to be appropriated such sums as are necessary to carry out this

subsection.

[[Page 119 STAT. 1113]]

``(j) Cooperative Research and Development Agreements.--In carrying

out greenhouse gas intensity reduction research and technology

deployment activities under this subtitle, the Secretary may enter into

cooperative research and development agreements under section 12 of the

Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a).''.

Subtitle B--Climate Change Technology Deployment in Developing Countries

SEC. 1611. CLIMATE CHANGE TECHNOLOGY DEPLOYMENT IN DEVELOPING COUNTRIES.

The Global Environmental Protection Assistance Act of 1989 (Public

Law 101-240; 103 Stat. 2521) is amending by adding at the end the

following:

``PART C--TECHNOLOGY DEPLOYMENT IN DEVELOPING COUNTRIES

``SEC. 731. <<NOTE: 22 USC 7901.>> DEFINITIONS.

``In this part:

``(1) Carbon sequestration.--The term `carbon sequestration'

means the capture of carbon dioxide through terrestrial,

geological, biological, or other means, which prevents the

release of carbon dioxide into the atmosphere.

``(2) Greenhouse gas.--The term `greenhouse gas' means

carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,

perfluorocarbons, and sulfur hexafluoride.

``(3) Greenhouse gas intensity.--The term `greenhouse gas

intensity' means the ratio of greenhouse gas emissions to

economic output.

``SEC. 732. <<NOTE: 22 USC 7902.>> REDUCTION OF GREENHOUSE GAS

INTENSITY.

``(a) Lead Agency.--

``(1) In general.--The Department of State shall act as the

lead agency for integrating into United States foreign policy

the goal of reducing greenhouse gas intensity in developing

countries.

``(2) Reports.--

``(A) Initial report.--Not later than 180 days after

the date of enactment of this part, the Secretary of

State shall submit to the appropriate authorizing and

appropriating committees of Congress an initial report,

based on the most recent information available to the

Secretary from reliable public sources, that identifies

the 25 developing countries that are the largest

greenhouse gas emitters, including for each country--

``(i) an estimate of the quantity and types of

energy used;

``(ii) an estimate of the greenhouse gas

intensity of the energy, manufacturing,

agricultural, and transportation sectors;

``(iii) a description the progress of any

significant projects undertaken to reduce

greenhouse gas intensity;

[[Page 119 STAT. 1114]]

``(iv) a description of the potential for

undertaking projects to reduce greenhouse gas

intensity;

``(v) a description of any obstacles to the

reduction of greenhouse gas intensity; and

``(vi) a description of the best practices

learned by the Agency for International

Development from conducting previous pilot and

demonstration projects to reduce greenhouse gas

intensity.

``(B) Update.--Not later than 18 months after the

date on which the initial report is submitted under

subparagraph (A), the Secretary shall submit to the

appropriate authorizing and appropriating committees of

Congress, based on the best information available to the

Secretary, an update of the information provided in the

initial report.

``(C) Use.--

``(i) Initial report.--The Secretary of State

shall use the initial report submitted under

subparagraph (A) to establish baselines for the

developing countries identified in the report with

respect to the information provided under clauses

(i) and (ii) of that subparagraph.

``(ii) Annual reports.--The Secretary of State

shall use the annual reports prepared under

subparagraph (B) and any other information

available to the Secretary to track the progress

of the developing countries with respect to

reducing greenhouse gas intensity.

``(b) Projects.--The Secretary of State, in coordination with

Administrator of the United States Agency for International Development,

shall (directly or through agreements with the World Bank, the

International Monetary Fund, the Overseas Private Investment

Corporation, and other development institutions) provide assistance to

developing countries specifically for projects to reduce greenhouse gas

intensity, including projects to--

``(1) leverage, through bilateral agreements, funds for

reduction of greenhouse gas intensity;

``(2) increase private investment in projects and activities

to reduce greenhouse gas intensity; and

``(3) expedite the deployment of technology to reduce

greenhouse gas intensity.

``(c) Focus.--In providing assistance under subsection (b), the

Secretary of State shall focus on--

``(1) promoting the rule of law, property rights, contract

protection, and economic freedom; and

``(2) increasing capacity, infrastructure, and training.

``(d) Priority.--In providing assistance under subsection (b), the

Secretary of State shall give priority to projects in the 25 developing

countries identified in the report submitted under subsection (a)(2)(A).

``SEC. 733. <<NOTE: 22 USC 7903.>> TECHNOLOGY INVENTORY FOR DEVELOPING

COUNTRIES.

``(a) In General.--The Secretary of Energy, in coordination with the

Secretary of State and the Secretary of Commerce, shall conduct an

inventory of greenhouse gas intensity reducing technologies that are

developed, or under development in the United States, to identify

technologies that are suitable for transfer to, deployment in, and

commercialization in the developing countries identified in the report

submitted under section 732(a)(2)(A).

[[Page 119 STAT. 1115]]

``(b) Report.--Not later than 180 days after the completion of the

inventory under subsection (a), the Secretary of State and the Secretary

of Energy shall jointly submit to Congress a report that--

``(1) includes the results of the completed inventory;

``(2) identifies obstacles to the transfer, deployment, and

commercialization of the inventoried technologies;

``(3) includes results from previous Federal reports related

to the inventoried technologies; and

``(4) includes an analysis of market forces related to the

inventoried technologies.

``SEC. 734. <<NOTE: 22 USC 7904.>> TRADE-RELATED BARRIERS TO EXPORT OF

GREENHOUSE GAS INTENSITY REDUCING TECHNOLOGIES.

``(a) In General.--Not <<NOTE: Deadline.>> later than 1 year after

the date of enactment of this part, the United States Trade

Representative shall (as appropriate and consistent with applicable

bilateral, regional, and mutual trade agreements)--

``(1) identify trade-relations barriers maintained by

foreign countries to the export of greenhouse gas intensity

reducing technologies and practices from the United States to

the developing countries identified in the report submitted

under section 732(a)(2)(A); and

``(2) negotiate with foreign countries for the removal of

those barriers.

``(b) Annual Report.--Not later than 1 year after the date on which

a report is submitted under subsection (a)(1) and annually thereafter,

the United States Trade Representative shall submit to Congress a report

that describes any progress made with respect to removing the barriers

identified by the United States Trade Representative under subsection

(a)(1).

``SEC. 735. <<NOTE: 22 USC 7905.>> GREENHOUSE GAS INTENSITY REDUCING

TECHNOLOGY EXPORT INITIATIVE.

``(a) In General.--There is <<NOTE: Establishment.>> established an

interagency working group to carry out a Greenhouse Gas Intensity

Reducing Technology Export Initiative to--

``(1) promote the export of greenhouse gas intensity

reducing technologies and practices from the United States;

``(2) identify developing countries that should be

designated as priority countries for the purpose of exporting

greenhouse gas intensity reducing technologies and practices,

based on the report submitted under section 732(a)(2)(A);

``(3) identify potential barriers to adoption of exported

greenhouse gas intensity reducing technologies and practices

based on the reports submitted under section 734; and

``(4) identify previous efforts to export energy

technologies to learn best practices.

``(b) Composition.--The working group shall be composed of--

``(1) the Secretary of State, who shall act as the head of

the working group;

``(2) the Administrator of the United States Agency for

International Development;

``(3) the United States Trade Representative;

``(4) a designee of the Secretary of Energy;

``(5) a designee of the Secretary of Commerce; and

``(6) a designee of the Administrator of the Environmental

Protection Agency.

[[Page 119 STAT. 1116]]

``(c) Performance Reviews and Reports.--Not later than 180 days

after the date of enactment of this part and each year thereafter, the

interagency working group shall--

``(1) conduct a performance review of actions taken and

results achieved by the Federal Government (including each of

the agencies represented on the interagency working group) to

promote the export of greenhouse gas intensity reducing

technologies and practices from the United States; and

``(2) submit to the appropriate authorizing and

appropriating committees of Congress a report that describes the

results of the performance reviews and evaluates progress in

promoting the export of greenhouse gas intensity reducing

technologies and practices from the United States, including any

recommendations for increasing the export of the technologies

and practices.

``SEC. 736. <<NOTE: 22 USC 7906.>> TECHNOLOGY DEMONSTRATION PROJECTS.

``(a) In General.--The Secretary of State, in coordination with the

Secretary of Energy and the Administrator of the United States Agency

for International Development, shall promote the adoption of

technologies and practices that reduce greenhouse gas intensity in

developing countries in accordance with this section.

``(b) Demonstration Projects.--

``(1) In general.--The Secretaries and the Administrator

shall plan, coordinate, and carry out, or provide assistance for

the planning, coordination, or carrying out of, demonstration

projects under this section in at least 10 eligible countries,

as determined by the Secretaries and the Administrator.

``(2) Eligibility.--A country shall be eligible for

assistance under this subsection if the Secretaries and the

Administrator determine that the country has demonstrated a

commitment to--

``(A) just governance, including--

``(i) promoting the rule of law;

``(ii) respecting human and civil rights;

``(iii) protecting private property rights;

and

``(iv) combating corruption; and

``(B) economic freedom, including economic policies

that--

``(i) encourage citizens and firms to

participate in global trade and international

capital markets;

``(ii) promote private sector growth and the

sustainable management of natural resources; and

``(iii) strengthen market forces in the

economy.

``(3) Selection.--In determining which eligible countries to

provide assistance to under paragraph (1), the Secretaries and

the Administrator shall consider--

``(A) the opportunity to reduce greenhouse gas

intensity in the eligible country; and

``(B) the opportunity to generate economic growth in

the eligible country.

``(4) Types of projects.--Demonstration projects under this

section may include--

``(A) coal gasification, coal liquefaction, and

clean coal projects;

``(B) carbon sequestration projects;

``(C) cogeneration technology initiatives;

[[Page 119 STAT. 1117]]

``(D) renewable projects; and

``(E) lower emission transportation.

``SEC. 737. <<NOTE: 22 USC 7907.>> FELLOWSHIP AND EXCHANGE PROGRAMS.

``The Secretary of State, in coordination with the Secretary of

Energy, the Secretary of Commerce, and the Administrator of the

Environmental Protection Agency, shall carry out fellowship and exchange

programs under which officials from developing countries visit the

United States to acquire expertise and knowledge of best practices to

reduce greenhouse gas intensity in their countries.

``SEC. 738. <<NOTE: 22 USC 7908.>> AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated such sums as are necessary

to carry out this part.

``SEC. 739. <<NOTE: 22 USC 7901 note.>> EFFECTIVE DATE.

``Except as otherwise provided in this part, this part takes effect

on October 1, 2005.''.

TITLE XVII--INCENTIVES FOR INNOVATIVE TECHNOLOGIES

SEC. 1701. <<NOTE: 22 USC 16511.>> DEFINITIONS.

In this title:

(1) Commercial technology.--

(A) In general.--The term ``commercial technology''

means a technology in general use in the commercial

marketplace.

(B) Inclusions.--The term ``commercial technology''

does not include a technology solely by use of the

technology in a demonstration project funded by the

Department.

(2) Cost.--The term ``cost'' has the meaning given the term

``cost of a loan guarantee'' within the meaning of section

502(5)(C) of the Federal Credit Reform Act of 1990 (2 U.S.C.

661a(5)(C)).

(3) Eligible project.--The term ``eligible project'' means a

project described in section 1703.

(4) Guarantee.--

(A) In general.--The term ``guarantee'' has the

meaning given the term ``loan guarantee'' in section 502

of the Federal Credit Reform Act of 1990 (2 U.S.C.

661a).

(B) Inclusion.--The term ``guarantee'' includes a

loan guarantee commitment (as defined in section 502 of

the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)).

(5) Obligation.--The term ``obligation'' means the loan or

other debt obligation that is guaranteed under this section.

SEC. 1702. <<NOTE: 22 USC 16512.>> TERMS AND CONDITIONS.

(a) In General.--Except for division C of Public Law 108-324, the

Secretary shall make guarantees under this or any other Act for projects

on such terms and conditions as the Secretary determines, after

consultation with the Secretary of the Treasury, only in accordance with

this section.

(b) Specific Appropriation or Contribution.--No guarantee shall be

made unless--

(1) an appropriation for the cost has been made; or

[[Page 119 STAT. 1118]]

(2) the Secretary has received from the borrower a payment

in full for the cost of the obligation and deposited the payment

into the Treasury.

(c) Amount.--Unless otherwise provided by law, a guarantee by the

Secretary shall not exceed an amount equal to 80 percent of the project

cost of the facility that is the subject of the guarantee, as estimated

at the time at which the guarantee is issued.

(d) Repayment.--

(1) In general.--No guarantee shall be made unless the

Secretary determines that there is reasonable prospect of

repayment of the principal and interest on the obligation by the

borrower.

(2) Amount.--No guarantee shall be made unless the Secretary

determines that the amount of the obligation (when combined with

amounts available to the borrower from other sources) will be

sufficient to carry out the project.

(3) Subordination.--The obligation shall be subject to the

condition that the obligation is not subordinate to other

financing.

(e) Interest Rate.--An obligation shall bear interest at a rate that

does not exceed a level that the Secretary determines appropriate,

taking into account the prevailing rate of interest in the private

sector for similar loans and risks.

(f) Term.--The term of an obligation shall require full repayment

over a period not to exceed the lesser of--

(1) 30 years; or

(2) 90 percent of the projected useful life of the physical

asset to be financed by the obligation (as determined by the

Secretary).

(g) Defaults.--

(1) Payment by secretary.--

(A) In general.--If a borrower defaults on the

obligation (as defined in regulations promulgated by the

Secretary and specified in the guarantee contract), the

holder of the guarantee shall have the right to demand

payment of the unpaid amount from the Secretary.

(B) Payment required.--Within such period as may be

specified in the guarantee or related agreements, the

Secretary shall pay to the holder of the guarantee the

unpaid interest on, and unpaid principal of the

obligation as to which the borrower has defaulted,

unless the Secretary finds that there was no default by

the borrower in the payment of interest or principal or

that the default has been remedied.

(C) Forbearance.--Nothing in this subsection

precludes any forbearance by the holder of the

obligation for the benefit of the borrower which may be

agreed upon by the parties to the obligation and

approved by the Secretary.

(2) Subrogation.--

(A) In general.--If the Secretary makes a payment

under paragraph (1), the Secretary shall be subrogated

to the rights of the recipient of the payment as

specified in the guarantee or related agreements

including, where appropriate, the authority

(notwithstanding any other provision of law) to--

[[Page 119 STAT. 1119]]

(i) complete, maintain, operate, lease, or

otherwise dispose of any property acquired

pursuant to such guarantee or related agreements;

or

(ii) permit the borrower, pursuant to an

agreement with the Secretary, to continue to

pursue the purposes of the project if the

Secretary determines this to be in the public

interest.

(B) Superiority of rights.--The rights of the

Secretary, with respect to any property acquired

pursuant to a guarantee or related agreements, shall be

superior to the rights of any other person with respect

to the property.

(C) Terms and conditions.--A guarantee agreement

shall include such detailed terms and conditions as the

Secretary determines appropriate to--

(i) protect the interests of the United States

in the case of default; and

(ii) have available all the patents and

technology necessary for any person selected,

including the Secretary, to complete and operate

the project.

(3) Payment of principal and interest by secretary.--With

respect to any obligation guaranteed under this section, the

Secretary may enter into a contract to pay, and pay, holders of

the obligation, for and on behalf of the borrower, from funds

appropriated for that purpose, the principal and interest

payments which become due and payable on the unpaid balance of

the obligation if the Secretary finds that--

(A)(i) the borrower is unable to meet the payments

and is not in default;

(ii) it is in the public interest to permit the

borrower to continue to pursue the purposes of the

project; and

(iii) the probable net benefit to the Federal

Government in paying the principal and interest will be

greater than that which would result in the event of a

default;

(B) the amount of the payment that the Secretary is

authorized to pay shall be no greater than the amount of

principal and interest that the borrower is obligated to

pay under the agreement being guaranteed; and

(C) the borrower agrees to reimburse the Secretary

for the payment (including interest) on terms and

conditions that are satisfactory to the Secretary.

(4) Action by attorney general.--

(A) Notification.--If the borrower defaults on an

obligation, the Secretary shall notify the Attorney

General of the default.

(B) Recovery.--On notification, the Attorney General

shall take such action as is appropriate to recover the

unpaid principal and interest due from--

(i) such assets of the defaulting borrower as

are associated with the obligation; or

(ii) any other security pledged to secure the

obligation.

(h) Fees.--

(1) In general.--The Secretary shall charge and collect fees

for guarantees in amounts the Secretary determines are

sufficient to cover applicable administrative expenses.

[[Page 119 STAT. 1120]]

(2) Availability.--Fees collected under this subsection

shall--

(A) be deposited by the Secretary into the Treasury;

and

(B) remain available until expended, subject to such

other conditions as are contained in annual

appropriations Acts.

(i) Records; Audits.--

(1) In general.--A recipient of a guarantee shall keep such

records and other pertinent documents as the Secretary shall

prescribe by regulation, including such records as the Secretary

may require to facilitate an effective audit.

(2) Access.--The Secretary and the Comptroller General of

the United States, or their duly authorized representatives,

shall have access, for the purpose of audit, to the records and

other pertinent documents.

(j) Full Faith and Credit.--The full faith and credit of the United

States is pledged to the payment of all guarantees issued under this

section with respect to principal and interest.

SEC. 1703. <<NOTE: 42 USC 16513.>> ELIGIBLE PROJECTS.

(a) In General.--The Secretary may make guarantees under this

section only for projects that--

(1) avoid, reduce, or sequester air pollutants or

anthropogenic emissions of greenhouse gases; and

(2) employ new or significantly improved technologies as

compared to commercial technologies in service in the United

States at the time the guarantee is issued.

(b) Categories.--Projects from the following categories shall be

eligible for a guarantee under this section:

(1) Renewable energy systems.

(2) Advanced fossil energy technology (including coal

gasification meeting the criteria in subsection (d)).

(3) Hydrogen fuel cell technology for residential,

industrial, or transportation applications.

(4) Advanced nuclear energy facilities.

(5) Carbon capture and sequestration practices and

technologies, including agricultural and forestry practices that

store and sequester carbon.

(6) Efficient electrical generation, transmission, and

distribution technologies.

(7) Efficient end-use energy technologies.

(8) Production facilities for fuel efficient vehicles,

including hybrid and advanced diesel vehicles.

(9) Pollution control equipment.

(10) Refineries, meaning facilities at which crude oil is

refined into gasoline.

(c) Gasification Projects.--The Secretary may make guarantees for

the following gasification projects:

(1) Integrated gasification combined cycle projects.--

Integrated gasification combined cycle plants meeting the

emission levels under subsection (d), including--

(A) projects for the generation of electricity--

(i) for which, during the term of the

guarantee--

(I) coal, biomass, petroleum coke,

or a combination of coal, biomass, and

petroleum coke will

[[Page 119 STAT. 1121]]

account for at least 65 percent of

annual heat input; and

(II) electricity will account for at

least 65 percent of net useful annual

energy output;

(ii) that have a design that is determined by

the Secretary to be capable of accommodating the

equipment likely to be necessary to capture the

carbon dioxide that would otherwise be emitted in

flue gas from the plant;

(iii) that have an assured revenue stream that

covers project capital and operating costs

(including servicing all debt obligations covered

by the guarantee) that is approved by the

Secretary and the relevant State public utility

commission; and

(iv) on which construction commences not later

than the date that is 3 years after the date of

the issuance of the guarantee;

(B) a project to produce energy from coal (of not

more than 13,000 Btu/lb and mined in the western United

States) using appropriate advanced integrated

gasification combined cycle technology that minimizes

and offers the potential to sequester carbon dioxide

emissions and that--

(i) may include repowering of existing

facilities;

(ii) may be built in stages;

(iii) shall have a combined output of at least

100 megawatts;

(iv) shall be located in a western State at an

altitude greater than 4,000 feet; and

(v) shall demonstrate the ability to use coal

with an energy content of not more than 9,000 Btu/

lb;

(C) a project 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;

(D) facilities that--

(i) generate one or more hydrogen-rich and

carbon monoxide-rich product streams from the

gasification of coal or coal waste; and

(ii) use those streams to facilitate the

production of ultra clean premium fuels through

the Fischer-Tropsch process; and

(E) a project to produce energy and clean fuels,

using appropriate coal liquefaction technology, from

Western bituminous or subbituminous coal, that--

(i) is owned by a State government; and

(ii) may include tribal and private coal

resources.

(2) Industrial gasification projects.--Facilities that

gasify coal, biomass, or petroleum coke in any combination to

produce synthesis gas for use as a fuel or feedstock and for

which electricity accounts for less than 65 percent of the

useful energy output of the facility.

(3) Petroleum coke <<NOTE: Loans.>> gasification projects.--

The Secretary is encouraged to make loan guarantees under this

title available for petroleum coke gasification projects.

[[Page 119 STAT. 1122]]

(4) Liquefaction project.--Notwithstanding any other

provision of law, funds awarded under the clean coal power

initiative under subtitle A of title IV for coal-to-oil

liquefaction projects may be used to finance the cost of loan

guarantees for projects awarded such funds.

(d) Emission Levels.--In addition to any other applicable Federal or

State emission limitation requirements, a project shall attain at

least--

(1) total sulfur dioxide emissions in flue gas from the

project that do not exceed 0.05 lb/MMBtu;

(2) a 90-percent removal rate (including any fuel

pretreatment) of mercury from the coal-derived gas, and any

other fuel, combusted by the project;

(3) total nitrogen oxide emissions in the flue gas from the

project that do not exceed 0.08 lb/MMBtu; and

(4) total particulate emissions in the flue gas from the

project that do not exceed 0.01 lb/MMBtu.

(e) Qualification of Facilities Receiving Tax Credits.--A project

that receives tax credits for clean coal technology shall not be

disqualified from receiving a guarantee under this title.

SEC. 1704. <<NOTE: 42 USC 16514.>> AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--There are authorized to be appropriated such sums

as are necessary to provide the cost of guarantees under this title.

(b) Use of Other Appropriated Funds.--The Department may use amounts

awarded under the clean coal power initiative under subtitle A of title

IV to carry out the project described in section 1703(c)(1)(C), on the

request of the recipient of such award, for a loan guarantee, to the

extent that the amounts have not yet been disbursed to, or have been

repaid by, the recipient.

TITLE XVIII--STUDIES

SEC. 1801. 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 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 shall submit a report

[[Page 119 STAT. 1123]]

to Congress on the results of the study, including findings and any

recommendations for preventing future supply shortages.

SEC. 1802. <<NOTE: Deadline.>> STUDY OF ENERGY EFFICIENCY STANDARDS.

The Secretary 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. <<NOTE: Reports.>> The Secretary shall submit the report to

Congress.

SEC. 1803. 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

subjects described in subsection (b).

(d) Definitions.--As used in this section:

(1) Commission.--The term ``Commission'' means the Federal

Communications Commission.

(2) NTIA.--The term ``NTIA'' means the National

Telecommunications and Information Administration of the

Department of Commerce.

(3) 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.

(4) Federal employee.--The term ``Federal employee'' has the

meaning provided the term ``employee'' by section 2105 of title

5, United States Code.

SEC. 1804. 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

[[Page 119 STAT. 1124]]

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. 1805. OIL BYPASS FILTRATION TECHNOLOGY.

The Secretary 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. 1806. TOTAL INTEGRATED THERMAL SYSTEMS.

The Secretary shall--

(1) conduct a study of the benefits of total integrated

thermal systems in reducing demand for oil and protecting the

environment; and

(2) examine the feasibility of using total integrated

thermal systems in Department of Defense and other Federal motor

vehicle fleets.

SEC. 1807. <<NOTE: 42 USC 16521.>> REPORT ON ENERGY INTEGRATION WITH

LATIN AMERICA.

The Secretary shall submit an annual report to the Committee on

Energy and Commerce of the United States House of Representatives and to

the Committee on Energy and Natural Resources of the Senate concerning

the status of energy export development in Latin America and efforts by

the Secretary and other departments and agencies of the United States to

promote energy integration with Latin America. <<NOTE: Mexico.>> The

report shall contain a detailed analysis of the status of energy export

development in Mexico and a description of all significant efforts by

the Secretary and other departments and agencies to promote a

constructive relationship with Mexico regarding the development of that

nation's energy capacity. In particular this report shall outline

efforts the Secretary and other departments and agencies have made to

ensure that regulatory approval and oversight of United States/Mexico

border projects that result in the expansion of Mexican energy capacity

are effectively coordinated across departments and with the Mexican

government.

SEC. 1808. <<NOTE: 42 USC 16522.>> LOW-VOLUME GAS RESERVOIR STUDY.

(a) Study.--The <<NOTE: Grants.>> Secretary shall make a grant to an

organization of oil and gas producing States, specifically those

containing significant numbers of marginal oil and natural gas wells,

for conducting an annual study of low-volume natural gas reservoirs.

Such organization shall work with the State geologist of each State

being studied.

(b) Contents.--The studies under this section shall--

(1) determine the status and location of marginal wells and

gas reservoirs;

(2) gather the production information of these marginal

wells and reservoirs;

(3) estimate the remaining producible reserves based on

variable pipeline pressures;

[[Page 119 STAT. 1125]]

(4) locate low-pressure gathering facilities and pipelines;

(5) recommend incentives which will enable the continued

production of these resources;

(6) produce maps and literature to disseminate to States to

promote conservation of natural gas reserves; and

(7) evaluate the amount of natural gas that is being wasted

through the practice of venting or flaring of natural gas

produced in association with crude oil well production.

(c) Data Analysis.--Data development and analysis under this section

shall be performed by an institution of higher education with GIS

capabilities. If the organization receiving the grant under subsection

(a) does not have GIS capabilities, such organization shall contract

with one or more entities with--

(1) technological capabilities and resources to perform

advanced image processing, GIS programming, and data analysis;

and

(2) the ability to--

(A) process remotely sensed imagery with high

spatial resolution;

(B) deploy global positioning systems;

(C) process and synthesize existing, variable-format

gas well, pipeline, gathering facility, and reservoir

data;

(D) create and query GIS databases with

infrastructure location and attribute information;

(E) write computer programs to customize relevant

GIS software;

(F) generate maps, charts, and graphs which

summarize findings from data research for presentation

to different audiences; and

(G) deliver data in a variety of formats, including

Internet Map Server for query and display, desktop

computer display, and access through handheld personal

digital assistants.

(d) Authorization of Appropriations.--There are authorized to be

appropriated to the Secretary for carrying out this section--

(1) $1,500,000 for fiscal year 2006; and

(2) $450,000 for each of the fiscal years 2007 through 2010.

(e) Definitions.--For purposes of this section, the term ``GIS''

means geographic information systems technology that facilitates the

organization and management of data with a geographic component.

SEC. 1809. INVESTIGATION OF GASOLINE PRICES.

(a) Investigation.--Not <<NOTE: Deadline.>> later than 90 days after

the date of enactment of this Act, the Federal Trade Commission shall

conduct an investigation to determine if the price of gasoline is being

artificially manipulated by reducing refinery capacity or by any other

form of market manipulation or price gouging practices.

(b) Evaluation and Analysis.--The Secretary shall direct the

National Petroleum Council to conduct an evaluation and analysis to

determine whether, and to what extent, environmental and other

regulations affect new domestic refinery construction and significant

expansion of existing refinery capacity.

(c) Reports to Congress.--

[[Page 119 STAT. 1126]]

(1) Investigation.--On completion of the investigation under

subsection (a), the Federal Trade Commission shall submit to

Congress a report that describes--

(A) the results of the investigation; and

(B) any recommendations of the Federal Trade

Commission.

(2) Evaluation and analysis.--On completion of the

evaluation and analysis under subsection (b), the Secretary

shall submit to Congress a report that describes--

(A) the results of the evaluation and analysis; and

(B) any recommendations of the National Petroleum

Council.

SEC. 1810. <<NOTE: Reports. Deadlines. 42 USC 16523.>> ALASKA NATURAL

GAS PIPELINE.

Not later than 180 days after the date of enactment of this Act, and

every 180 days thereafter until the Alaska natural gas pipeline

commences operation, the Federal Energy Regulatory Commission shall

submit to Congress a report describing--

(1) the progress made in licensing and constructing the

pipeline; and

(2) any issue impeding that progress.

SEC. 1811. <<NOTE: State listing.>> COAL BED METHANE STUDY.

(a) Study.--

(1) In general.--The <<NOTE: Contracts.>> Secretary of the

Interior, in consultation with the Administrator of the

Environmental Protection Agency, shall enter into an arrangement

under which the National Academy of Sciences shall conduct a

study on the effect of coal bed natural gas production on

surface and ground water resources, including ground water

aquifiers, in the States of Montana, Wyoming, Colorado, New

Mexico, North Dakota, and Utah.

(2) Matters to be addressed.--The study shall address the

effectiveness of--

(A) the management of coal bed methane produced

water;

(B) the use of best management practices; and

(C) various production techniques for coal bed

methane natural gas in minimizing impacts on water

resources.

(b) Data Analysis.--The study shall analyze available hydrologic,

geologic and water quality data, along with--

(1) production techniques, produced water management

techniques, best management practices, and other factors that

can mitigate effects of coal bed methane development;

(2) the costs associated with mitigation techniques;

(3) effects on surface or ground water resources, including

drinking water, associated with surface or subsurface disposal

of waters produced during extraction of coal bed methane; and

(4) any other significant effects on surface or ground water

resources associated with production of coal bed methane.

(c) Recommendations.--The study shall analyze the effectiveness of

current mitigation practices of coal bed methane produced water handling

in relation to existing Federal and State laws and regulations, and make

recommendations as to changes, if any, to Federal law necessary to

address adverse impacts to surface or ground water resources associated

with coal bed methane development.

[[Page 119 STAT. 1127]]

(d) Completion of Study.--The <<NOTE: Public information.>> National

Academy of Sciences shall submit the findings and recommendations of the

study to the Secretary of the Interior and the Administrator of the

Environmental Protection Agency within 12 months after the date of

enactment of this Act, and shall upon completion make the results of the

study available to the public.

(e) Report to Congress.--The Secretary of the Interior and the

Administrator of the Environmental Protection Agency, after consulting

with States, shall report to the Congress within 6 months after

receiving the results of the study on--

(1) the findings and recommendations of the study;

(2) the agreement or disagreement of the Secretary of the

Interior and the Administrator of the Environmental Protection

Agency with each of its findings and recommendations; and

(3) any recommended changes in funding to address the

effects of coal bed methane production on surface and ground

water resources.

SEC. 1812. BACKUP FUEL CAPABILITY STUDY.

(a) Study.--

(1) In general.--The Secretary shall conduct a study of the

effect of obtaining and maintaining liquid and other fuel backup

capability at--

(A) gas-fired power generation facilities; and

(B) other gas-fired industrial facilities.

(2) Contents.--The study under paragraph (1) shall address--

(A) the costs and benefits of adding a different

fuel capability to a power gas-fired power generating or

industrial facility, taking into consideration regional

differences;

(B) methods of the Federal Government and State

governments to encourage gas-fired power generators and

industries to develop the capability to power the

facilities using a backup fuel;

(C) the effect on the supply and cost of natural gas

of--

(i) a balanced portfolio of fuel choices in

power generation and industrial applications; and

(ii) State regulations that permit agencies in

the State to carry out policies that encourage the

use of other backup fuels in gas-fired power

generation; and

(D) changes required in the Clean Air Act (42 U.S.C.

7401 et seq.) to allow natural gas generators to add

clean backup fuel capabilities.

(b) Report to Congress.--Not later than 1 year after the date of

enactment of this Act, the Secretary shall submit to Congress a report

on the results of the study under subsection (a), including

recommendations regarding future activity of the Federal Government

relating to backup fuel capability.

SEC. 1813. INDIAN LAND RIGHTS-OF-WAY.

(a) Study.--

(1) In general.--The Secretary and the Secretary of the

Interior (referred to in this section as the ``Secretaries'')

shall jointly conduct a study of issues regarding energy rights-

of-way on tribal land (as defined in section 2601 of the Energy

Policy Act of 1992 (as amended by section 503)) (referred to in

this section as ``tribal land'').

[[Page 119 STAT. 1128]]

(2) Consultation.--In conducting the study under paragraph

(1), the Secretaries shall consult with Indian tribes, the

energy industry, appropriate governmental entities, and affected

businesses and consumers.

(b) Report.--Not later than 1 year after the date of enactment of

this Act, the Secretaries shall submit to Congress a report on the

findings of the study, including--

(1) an analysis of historic rates of compensation paid for

energy rights-of-way on tribal land;

(2) recommendations for appropriate standards and procedures

for determining fair and appropriate compensation to Indian

tribes for grants, expansions, and renewals of energy rights-of-

way on tribal land;

(3) an assessment of the tribal self-determination and

sovereignty interests implicated by applications for the grant,

expansion, or renewal of energy rights-of-way on tribal land;

and

(4) an analysis of relevant national energy transportation

policies relating to grants, expansions, and renewals of energy

rights-of-way on tribal land.

SEC. 1814. <<NOTE: Reports. Deadline.>> MOBILITY OF SCIENTIFIC AND

TECHNICAL PERSONNEL.

Not later than 2 years after the date of enactment of this section,

the Secretary shall transmit to Congress a report that--

(1) identifies any policies or procedures of a contractor

operating a National Laboratory or single-purpose research

facility that create disincentives to the temporary or permanent

transfer of scientific and technical personnel among the

contractor-operated National Laboratories or contractor-operated

single-purpose research facilities; and

(2) provides recommendations for improving interlaboratory

exchange of scientific and technical personnel.

SEC. 1815. INTERAGENCY REVIEW OF COMPETITION IN THE WHOLESALE AND RETAIL

MARKETS FOR ELECTRIC ENERGY.

(a) Task Force.--There is <<NOTE: Establishment.>> established an

inter-agency task force, to be known as the ``Electric Energy Market

Competition Task Force'' (referred to in this section as the ``task

force''), consisting of five members--

(1) one of whom shall be an employee of the Department of

Justice, to be appointed by the Attorney General of the United

States;

(2) one of whom shall be an employee of the Federal Energy

Regulatory Commission, to be appointed by the Chairperson of

that Commission;

(3) one of whom shall be an employee of the Federal Trade

Commission, to be appointed by the Chairperson of that

Commission;

(4) one of whom shall be an employee of the Department, to

be appointed by the Secretary; and

(5) one of whom shall be an employee of the Rural Utilities

Service, to be appointed by the Secretary of Agriculture.

(b) Study and Report.--

(1) Study.--The task force shall conduct a study and

analysis of competition within the wholesale and retail market

for electric energy in the United States.

(2) Report.--

[[Page 119 STAT. 1129]]

(A) Final report.--Not later than 1 year after the

date of enactment of this Act, the task force shall

submit to Congress a final report on the findings of the

task force under paragraph (1).

(B) Public comment.--Not later than the date that is

60 days before a final report is submitted to Congress

under subparagraph (A), the task force shall--

(i) <<NOTE: Federal

Register, publication.>> publish in the Federal

Register a draft of the report; and

(ii) provide an opportunity for public comment

on the report.

(c) Consultation.--In conducting the study under subsection (b), the

task force shall consult with and solicit comments from any advisory

entity of the task force, the States, representatives of the electric

power industry, and the public.

SEC. 1816. STUDY OF RAPID ELECTRICAL GRID RESTORATION.

(a) Study.--

(1) In general.--The Secretary shall conduct a study of the

benefits of using mobile transformers and mobile substations to

rapidly restore electrical service to areas subjected to

blackouts as a result of--

(A) equipment failure;

(B) natural disasters;

(C) acts of terrorism; or

(D) war.

(2) Contents.--The study under paragraph (1) shall contain

an analysis of--

(A) the feasibility of using mobile transformers and

mobile substations to reduce dependence on foreign

entities for key elements of the electrical grid system

of the United States;

(B) the feasibility of using mobile transformers and

mobile substations to rapidly restore electrical power

to--

(i) military bases;

(ii) the Federal Government;

(iii) communications industries;

(iv) first responders; and

(v) other critical infrastructures, as

determined by the Secretary;

(C) the quantity of mobile transformers and mobile

substations necessary--

(i) to eliminate dependence on foreign sources

for key electrical grid components in the United

States;

(ii) to rapidly deploy technology to fully

restore full electrical service to prioritized

Governmental functions; and

(iii) to identify manufacturing sources in

existence on the date of enactment of this Act

that have previously manufactured specialized

mobile transformer or mobile substation products

for Federal agencies.

(b) Report.--

(1) In general.--Not later than 1 year after the date of

enactment of this Act, the Secretary shall submit to the

President and Congress a report on the study under subsection

(a).

[[Page 119 STAT. 1130]]

(2) Inclusion.--The report shall include a description of

the results of the analysis under subsection (a)(2).

SEC. 1817. STUDY OF DISTRIBUTED GENERATION.

(a) Study.--

(1) In general.--

(A) Potential benefits.--The Secretary, in

consultation with the Federal Energy Regulatory

Commission, shall conduct a study of the potential

benefits of cogeneration and small power production.

(B) Recipients.--The benefits described in

subparagraph (A) include benefits that are received

directly or indirectly by--

(i) an electricity distribution or

transmission service provider;

(ii) other customers served by an electricity

distribution or transmission service provider; and

(iii) the general public in the area served by

the public utility in which the cogenerator or

small power producer is located.

(2) Inclusions.--The study shall include an analysis of--

(A) the potential benefits of--

(i) increased system reliability;

(ii) improved power quality;

(iii) the provision of ancillary services;

(iv) reduction of peak power requirements

through onsite generation;

(v) the provision of reactive power or volt-

ampere reactives;

(vi) an emergency supply of power;

(vii) offsets to investments in generation,

transmission, or distribution facilities that

would otherwise be recovered through rates;

(viii) diminished land use effects and right-

of-way acquisition costs; and

(ix) reducing the vulnerability of a system to

terrorism; and

(B) any rate-related issue that may impede or

otherwise discourage the expansion of cogeneration and

small power production facilities, including a review of

whether rates, rules, or other requirements imposed on

the facilities are comparable to rates imposed on

customers of the same class that do not have

cogeneration or small power production.

(3) Valuation of benefits.--In carrying out the study, the

Secretary shall determine an appropriate method of valuing

potential benefits under varying circumstances for individual

cogeneration or small power production units.

(b) Report.--Not later than 18 months after the date of enactment of

this Act, the Secretary shall--

(1) complete the study;

(2) <<NOTE: Public information.>> provide an opportunity for

public comment on the results of the study; and

(3) submit to the President and Congress a report

describing--

(A) the results of the study; and

[[Page 119 STAT. 1131]]

(B) information relating to the public comments

received under paragraph (2).

(c) Publication.--After submission of the report under subsection

(b) to the President and Congress, the Secretary shall publish the

report.

SEC. 1818. NATURAL GAS SUPPLY SHORTAGE REPORT.

(a) In General.--Not later than 180 days after the date of enactment

of this Act, the Secretary shall submit to Congress a report on natural

gas supplies and demand.

(b) Purpose.--The purpose of the report under subsection (a) is to

develop recommendations for achieving a balance between natural gas

supply and demand in order 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 (43 U.S.C. 7401 et

seq.);

(4) achieve continued progress in reducing the emissions

associated with electric power generation; and

(5) support the development of the preliminary phases of

hydrogen-based energy technologies.

(c) Comprehensive Analysis.--The report shall include a

comprehensive analysis of, for the period beginning on January 1, 2004,

and ending on December 31, 2015, natural gas supply and demand in the

United States, including--

(1) estimates of annual domestic demand for natural gas,

taking into consideration the effect of Federal policies and

actions that are likely to increase or decrease the demand for

natural gas;

(2) projections of annual natural gas supplies, from

domestic and foreign sources, under Federal policies in

existence on the date of enactment of this Act;

(3) an identification of estimated natural gas supplies that

are not available under those Federal policies;

(4) scenarios for decreasing natural gas demand and

increasing natural gas supplies that compare the 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

purposes described in subsection (b), including recommendations

that--

[[Page 119 STAT. 1132]]

(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) would improve access to domestic natural gas

supplies.

(d) Consultation.--In preparing the report under subsection (a), the

Secretary shall consult with--

(1) experts in natural gas supply and demand; and

(2) representatives of--

(A) State and local governments;

(B) tribal organizations; and

(C) consumer and other organizations.

(e) Hearings.--In preparing the report under subsection (a), the

Secretary may hold public hearings and provide other opportunities for

public comment, as the Secretary considers appropriate.

SEC. 1819. <<NOTE: Reports. Deadline.>> HYDROGEN PARTICIPATION STUDY.

Not later than 1 year after the date of enactment of this Act, the

Secretary shall submit to Congress a report evaluating methodologies to

ensure the widest participation practicable in setting goals and

milestones under the hydrogen program of the Department, including

international participants.

SEC. 1820. OVERALL EMPLOYMENT IN A HYDROGEN ECONOMY.

(a) Study.--

(1) In general.--The Secretary shall carry out a study of

the likely effects of a transition to a hydrogen economy on

overall employment in the United States.

(2) Contents.--In completing the study, the Secretary shall

take into consideration--

(A) the replacement effects of new goods and

services;

(B) international competition;

(C) workforce training requirements;

(D) multiple possible fuel cycles, including usage

of raw materials;

(E) rates of market penetration of technologies; and

(F) regional variations based on geography.

(b) Report.--Not later than 18 months after the date of enactment of

this Act, the Secretary shall submit to Congress a report describing the

findings, conclusions, and recommendations of the study under subsection

(a).

SEC. 1821. STUDY OF BEST MANAGEMENT PRACTICES FOR ENERGY RESEARCH AND

DEVELOPMENT PROGRAMS.

(a) In General.--The Secretary shall enter into an arrangement with

the National Academy of Public Administration under which the Academy

shall conduct a study to assess management practices for research,

development, and demonstration programs at the Department.

(b) Scope of the Study.--The study shall consider--

(1) management practices that act as barriers between the

Office of Science and offices conducting mission-oriented

research;

[[Page 119 STAT. 1133]]

(2) recommendations for management practices that would

improve coordination and bridge the innovation gap between the

Office of Science and offices conducting mission-oriented

research;

(3) the applicability of the management practices used by

the Department of Defense Advanced Research Projects Agency to

research programs at the Department;

(4) the advisability of creating an agency within the

Department modeled after the Department of Defense Advanced

Research Projects Agency;

(5) recommendations for management practices that could best

encourage innovative research and efficiency at the Department;

and

(6) any other relevant considerations.

(c) Report.--Not later than 18 months after the date of enactment of

this Act, the Secretary shall submit to Congress a report on the study

conducted under this section.

SEC. 1822. <<NOTE: Contracts. Deadline.>> EFFECT OF ELECTRICAL

CONTAMINANTS ON RELIABILITY OF ENERGY PRODUCTION SYSTEMS.

Not later than 180 days after the date of enactment of this Act, the

Secretary shall enter into a contract with the National Academy of

Sciences under which the National Academy of Sciences shall determine

the effect that electrical contaminants (such as tin whiskers) may have

on the reliability of energy production systems, including nuclear

energy.

SEC. 1823. ALTERNATIVE FUELS REPORTS.

(a) In General.--Not later than 1 year after the date of enactment

of this Act, the Secretary shall submit to Congress reports on the

potential for each of biodiesel and hythane to become major,

sustainable, alternative fuels.

(b) Biodiesel Report.--The report relating to biodiesel submitted

under subsection (a) shall--

(1) provide a detailed assessment of--

(A) potential biodiesel markets and manufacturing

capacity; and

(B) environmental and energy security benefits with

respect to the use of biodiesel;

(2) identify any impediments, especially in infrastructure

needed for production, distribution, and storage, to biodiesel

becoming a substantial source of fuel for conventional diesel

and heating oil applications;

(3) identify strategies to enhance the commercial deployment

of biodiesel; and

(4) include an examination and recommendations, as

appropriate, of the ways in which biodiesel may be modified to

be a cleaner-burning fuel.

(c) Hythane Report.--The report relating to hythane submitted under

subsection (a) shall--

(1) provide a detailed assessment of potential hythane

markets and the research and development activities that are

necessary to facilitate the commercialization of hythane as a

competitive, environmentally friendly transportation fuel;

(2) address--

(A) the infrastructure necessary to produce, blend,

distribute, and store hythane for widespread commercial

purposes; and

[[Page 119 STAT. 1134]]

(B) other potential market barriers to the

commercialization of hythane;

(3) examine the viability of producing hydrogen using

energy-efficient, environmentally friendly methods so that the

hydrogen can be blended with natural gas to produce hythane; and

(4) include an assessment of the modifications that would be

required to convert compressed natural gas vehicle engines to

engines that use hythane as fuel.

(d) Grants for Report Completion.--The Secretary may use such sums

as are available to the Secretary to provide, to one or more colleges or

universities selected by the Secretary, grants for use in carrying out

research to assist the Secretary in preparing the reports required to be

submitted under subsection (a).

SEC. 1824. FINAL ACTION ON REFUNDS FOR EXCESSIVE CHARGES.

The Federal Energy Regulatory Commission (FERC) shall--

(1) seek to conclude its investigation into the unjust or

unreasonable charges incurred by California during the 2000-2001

electricity crisis as soon as possible;

(2) <<NOTE: California.>> seek to ensure that refunds the

Commission determines are owed to the State of California are

paid to the State of California; and

(3) <<NOTE: Reports. Deadline.>> submit to Congress a report

by December 31, 2005, describing the actions taken by the

Commission to date under this section and timetables for further

actions.

SEC. 1825. FUEL CELL AND HYDROGEN TECHNOLOGY STUDY.

(a) In General.--As <<NOTE: Contracts.>> soon as practicable after

the date of enactment of this Act, the Secretary shall enter into a

contract with the National Academy of Sciences and the National Research

Council to carry out a study of fuel cell technologies that provides a

budget roadmap for the development of fuel cell technologies and the

transition from petroleum to hydrogen in a significant percentage of the

vehicles sold by 2020.

(b) Requirements.--In carrying out the study, the National Academy

of Sciences and the National Research Council shall--

(1) establish as a goal the maximum percentage practicable

of vehicles that the National Academy of Sciences and the

National Research Council determines can be fueled by hydrogen

by 2020;

(2) determine the amount of Federal and private funding

required to meet the goal established under paragraph (1);

(3) determine what actions are required to meet the goal

established under paragraph (1);

(4) examine the need for expanded and enhanced Federal

research and development programs, changes in regulations, grant

programs, partnerships between the Federal Government and

industry, private sector investments, infrastructure investments

by the Federal Government and industry, educational and public

information initiatives, and Federal and State tax incentives to

meet the goal established under paragraph (1);

(5) consider whether other technologies would be less

expensive or could be more quickly implemented than fuel cell

technologies to achieve significant reductions in carbon dioxide

emissions;

(6) take into account any reports relating to fuel cell

technologies and hydrogen-fueled vehicles, including--

[[Page 119 STAT. 1135]]

(A) the report prepared by the National Academy of

Engineering and the National Research Council in 2004

entitled ``Hydrogen Economy: Opportunities, Costs,

Barriers, and R&D Needs''; and

(B) the report prepared by the U.S. Fuel Cell

Council in 2003 entitled ``Fuel Cells and Hydrogen: The

Path Forward'';

(7) consider the challenges, difficulties, and potential

barriers to meeting the goal established under paragraph (1);

and

(8) with respect to the budget roadmap--

(A) specify the amount of funding required on an

annual basis from the Federal Government and industry to

carry out the budget roadmap; and

(B) specify the advantages and disadvantages to

moving toward the transition to hydrogen in vehicles in

accordance with the timeline established by the budget

roadmap.

SEC. 1826. PASSIVE SOLAR TECHNOLOGIES.

(a) Definition of Passive Solar Technology.--In this section, the

term ``passive solar technology'' means a passive solar technology,

including daylighting, that--

(1) is used exclusively to avoid electricity use; and

(2) can be metered to determine energy savings.

(b) Study.--The Secretary shall conduct a study to determine--

(1) the range of levelized costs of avoided electricity for

passive solar technologies;

(2) the quantity of electricity displaced using passive

solar technologies in the United States as of the date of

enactment of this Act; and

(3) the projected energy savings from passive solar

technologies in 5, 10, 15, 20, and 25 years after the date of

enactment of this Act if--

(A) incentives comparable to the incentives provided

for electricity generation technologies were provided

for passive solar technologies; and

(B) no new incentives for passive solar technologies

were provided.

(c) Report.--Not later than 120 days after the date of enactment of

this Act, the Secretary shall submit to Congress a report that describes

the results of the study under subsection (b).

SEC. 1827. STUDY OF LINK BETWEEN ENERGY SECURITY AND INCREASES IN

VEHICLE MILES TRAVELED.

(a) In General.--The Secretary shall enter into an arrangement with

the National Academy of Sciences under which the Academy shall conduct a

study to assess the implications on energy use and efficiency of land

development patterns in the United States.

(b) Scope.--The study shall consider--

(1) the correlation, if any, between land development

patterns and increases in vehicle miles traveled;

(2) whether petroleum use in the transportation sector can

be reduced through changes in the design of development

patterns;

(3) the potential benefits of--

[[Page 119 STAT. 1136]]

(A) information and education programs for State and

local officials (including planning officials) on the

potential for energy savings through planning, design,

development, and infrastructure decisions;

(B) incorporation of location efficiency models in

transportation infrastructure planning and investments;

and

(C) transportation policies and strategies to help

transportation planners manage the demand for the number

and length of vehicle trips, including trips that

increase the viability of other means of travel; and

(4) such other considerations relating to the study topic as

the National Academy of Sciences finds appropriate.

(c) Report.--Not later than 2 years after the date of enactment of

this Act, the National Academy of Sciences shall submit to the Secretary

and Congress a report on the study conducted under this section.

SEC. 1828. SCIENCE STUDY ON CUMULATIVE IMPACTS OF MULTIPLE OFFSHORE

LIQUEFIED NATURAL GAS FACILITIES.

(a) In General.--The Secretary (in consultation with the National

Oceanic Atmospheric Administration, the Commandant of the Coast Guard,

affected recreational and commercial fishing industries, and affected

energy and transportation stakeholders) shall carry out a study and

compile existing science (including studies and data) to determine the

risks or benefits presented by cumulative impacts of multiple offshore

liquefied natural gas facilities reasonably assumed to be constructed in

an area of the Gulf of Mexico using the open-rack vaporization system.

(b) Accuracy.--In carrying out subsection (a), the Secretary shall

verify the accuracy of available science and develop a science-based

evaluation of significant short-term and long-term cumulative impacts,

both adverse and beneficial, of multiple offshore liquefied natural gas

facilities reasonably assumed to be constructed in an area of the Gulf

of Mexico using or proposing the open-rack vaporization system on the

fisheries and marine populations in the vicinity of the facility.

SEC. 1829. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL BUILDINGS.

(a) In General.--The Architect of the Capitol, as part of the

process of updating the Master Plan Study for the Capitol complex,

shall--

(1) carry out a study to evaluate the energy infrastructure

of the Capitol complex to determine how to augment the

infrastructure to become more energy efficient--

(A) by using unconventional and renewable energy

resources;

(B) by--

(i) incorporating new technologies to

implement effective green building solutions;

(ii) adopting computer-based building

management systems; and

(iii) recommending strategies based on end-

user behavioral changes to implement low-cost

environmental gains; and

[[Page 119 STAT. 1137]]

(C) in a manner that would enable the Capitol

complex to have reliable utility service in the event of

power fluctuations, shortages, or outages;

(2) carry out a study to explore the feasibility of

installing energy and water conservation measures on the rooftop

of the Dirksen Senate Office Building, including the area

directly above the food service facilities in the center of the

building, including the installation of--

(A) a vegetative covering area, using native species

to the maximum extent practicable, to--

(i) insulate and increase the energy

efficiency of the building;

(ii) reduce precipitation runoff and conserve

water for landscaping or other uses;

(iii) increase, and provide more efficient use

of, available outdoor space through management of

the rooftop of the center of the building as a

park or garden area for occupants of the building;

and

(iv) improve the aesthetics of the building;

and

(B) onsite renewable energy and other state-of-the-

art technologies to--

(i) improve the energy efficiency and energy

security of the building or the Capitol complex by

providing additional or backup sources of power in

the event of a power shortage or other emergency;

(ii) reduce the use of resources by the

building; or

(iii) enhance worker productivity; and

(C) <<NOTE: Reports. Deadline.>> not later than 180

days after the date of enactment of this Act, submit to

Congress a report describing the findings and

recommendations of the study under subparagraph (B).

(b) Authorization of Appropriations.--There is authorized to be

appropriated to the Architect of the Capitol to carry out this section

$2,000,000 for each of fiscal years 2006 through 2010.

SEC. 1830. STUDY OF AVAILABILITY OF SKILLED WORKERS.

(a) In General.--The Secretary shall enter into an arrangement with

the National Academy of Sciences under which the National Academy of

Sciences shall conduct a study of the short-term and long-term

availability of skilled workers to meet the energy and mineral security

requirements of the United States.

(b) Inclusions.--The study shall include an analysis of--

(1) the need for and availability of workers for the oil,

gas, and mineral industries;

(2) the availability of skilled labor at both entry level

and more senior levels; and

(3) recommendations for future actions needed to meet future

labor requirements.

(c) Report.--Not later than 2 years after the date of enactment of

this Act, the Secretary shall submit to Congress a report that describes

the results of the study.

SEC. 1831. REVIEW OF ENERGY POLICY ACT OF 1992 PROGRAMS.

(a) In General.--Not <<NOTE: Deadline.>> later than 180 days after

the date of enactment of this section, the Secretary 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--

[[Page 119 STAT. 1138]]

(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. 1832. <<NOTE: 42 USC 16524.>> STUDY ON THE BENEFITS OF ECONOMIC

DISPATCH.

(a) Study.--The Secretary, 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

[[Page 119 STAT. 1139]]

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 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.

SEC. 1833. RENEWABLE ENERGY ON FEDERAL LAND.

(a) National <<NOTE: Contracts. Deadline.>> Academy of Sciences

Study.--Not later than 90 days after the date of enactment of this Act,

the Secretary of the Interior shall enter into a contract with the

National Academy of Sciences under which the National Academy of

Sciences shall--

(1) study the potential of developing wind, solar, and ocean

energy resources (including tidal, wave, and thermal energy) on

Federal land available for those uses under current law and the

outer Continental Shelf;

(2) assess any Federal law (including regulations) relating

to the development of those resources that is in existence on

the date of enactment of this Act; and

(3) recommend statutory and regulatory mechanisms for

developing those resources.

(b) Submission to Congress.--Not later than 2 years after the date

of enactment of this Act, the Secretary of the Interior shall submit to

Congress the results of the study under subsection (a).

SEC. 1834. INCREASED HYDROELECTRIC GENERATION AT EXISTING FEDERAL

FACILITIES.

(a) In General.--The Secretary of the Interior, the Secretary, and

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

[[Page 119 STAT. 1140]]

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, water supply, 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. 1835. 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. 1836. RESOLUTION OF FEDERAL RESOURCE DEVELOPMENT CONFLICTS IN THE

POWDER RIVER BASIN.

(a) Review.--The <<NOTE: Wyoming. Montana.>> Secretary of the

Interior shall review Federal and State laws in existence on the date of

enactment of this Act in order to resolve any conflict relating to the

Powder River Basin in Wyoming and Montana between--

(1) the development of Federal coal; and

(2) the development of Federal and non-Federal coalbed

methane.

(b) Report.--Not later than 180 days after the date of enactment of

this Act, the Secretary of the Interior shall submit to Congress a

report that--

[[Page 119 STAT. 1141]]

(1) describes methods of resolving a conflict described in

subsection (a); and

(2) identifies a method preferred by the Secretary of the

Interior, including proposed legislative language, if any,

required to implement the method.

SEC. 1837. <<NOTE: China.>> NATIONAL SECURITY REVIEW OF INTERNATIONAL

ENERGY REQUIREMENTS.

(a) Study.--The Secretary, in consultation with the Secretary of

Defense and Secretary of Homeland Security, shall conduct a study of the

growing energy requirements of the People's Republic of China and the

implications of such growth on the political, strategic, economic, or

national security interests of the United States, including--

(1) an assessment of the type, nationality, and location of

energy assets that have been sought for investment by entities

located in the People's Republic of China;

(2) an assessment of the extent to which investment in

energy assets by entities located in the People's Republic of

China has been on market-based terms and free from subsidies

from the People's Republic of China;

(3) an assessment of the effect of investment in energy

assets by entities located in the People's Republic of China on

the control by the United States of dual-use and export-

controlled technologies, including the effect on current and

future access to foreign and domestic sources of rare earth

elements used to produce such technologies;

(4) an assessment of the relationship between the Government

of the People's Republic of China and energy-related businesses

located in the People's Republic of China;

(5) an assessment of the impact on the world energy market

of the common practice of entities located in the People's

Republic of China of removing the energy assets owned or

controlled by such entities from the competitive market, with

emphasis on the effect if such practice expands along with the

growth in energy consumption of the People's Republic of China;

(6) an examination of the United States energy policy and

foreign policy as it relates to ensuring a competitive global

energy market;

(7) an examination of the relationship between the United

States and the People's Republic of China as it relates to

pursuing energy interests in a manner that avoids conflicts; and

(8) a comparison of the appropriate laws and regulations of

other nations to determine whether a United States company would

be permitted to purchase, acquire, merge, or otherwise establish

a joint relationship with an entity whose primary place of

business is in that other nation, including the laws and

regulations of the People's Republic of China.

(b) Report and Recommendations.--Not later than 120 days after the

date of the enactment of this Act, the Secretary, in consultation with

the Secretary of Defense, shall report to the President and the Congress

on the findings of the study described in subsection (a) and any

recommendations the Secretaries consider appropriate.

[[Page 119 STAT. 1142]]

(c) Regulatory Effect.--Notwithstanding <<NOTE: President. Effective

date.>> any other provision of law, any instrumentality of the United

States vested with authority to review a transaction that includes an

investment in a United States domestic corporation may not conclude a

national security review related to an investment in the energy assets

of a United States domestic corporation by an entity owned or controlled

by the government of the People's Republic of China for 21 days after

the report to the President and the Congress, and until the President

certifies that he has received the report described in subsection (b).

SEC. 1838. USED OIL RE-REFINING STUDY.

The Secretary, in consultation with the Administrator of the

Environmental Protection Agency, shall undertake a study of the energy

and environmental benefits of the re-refining of used lubricating oil

and report to Congress within 90 days after enactment of this Act

including recommendations of specific steps that can be taken to improve

collections of used lubricating oil and increase re-refining and other

beneficial re-use of such oil.

SEC. 1839. <<NOTE: Deadline. Reports.>> TRANSMISSION SYSTEM MONITORING.

Within 6 months after the date of enactment of this Act, the

Secretary 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. 1840. REPORT IDENTIFYING AND DESCRIBING THE STATUS OF POTENTIAL

HYDROPOWER FACILITIES.

(a) Report Requirement.--Not later than 90 days after the date of

enactment of this Act, the Secretary of the Interior, acting through the

Bureau of Reclamation, shall submit to the Committee on Resources of the

House of Representatives and the Committee on Energy and Natural

Resources of the Senate a report identifying and describing the status

of potential hydropower facilities included in water surface storage

studies undertaken by the Secretary for projects that have not been

completed or authorized for construction.

(b) Report Contents.--The report shall include the following:

(1) Identification of all surface storage studies authorized

by Congress since the enactment of the Reclamation Project Act

of 1939 (43 U.S.C. 485 et seq.).

(2) The purposes of each project included within each study

identified under paragraph (1).

(3) The status of each study identified under paragraph (1),

including for each study--

(A) whether the study is completed or, if not

completed, still authorized;

(B) the level of analyses conducted at the

feasibility and reconnaissance levels of review;

[[Page 119 STAT. 1143]]

(C) identifiable environmental impacts of each

project included in the study, including to fish and

wildlife, water quality, and recreation;

(D) projected water yield from each such project;

(E) beneficiaries of each such project;

(F) the amount authorized and expended;

(G) projected funding needs and timelines for

completing the study (if applicable);

(H) anticipated costs of each such project; and

(I) other factors that might interfere with

construction of any such project.

(4) An identification of potential hydroelectric facilities

that might be developed pursuant to each study identified under

paragraph (1).

(5) Applicable costs and benefits associated with potential

hydroelectric production pursuant to each study.

Approved August 8, 2005.

LEGISLATIVE HISTORY--H.R. 6:

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HOUSE REPORTS: No. 109-190 (Comm. of Conference).

CONGRESSIONAL RECORD, Vol. 151 (2005):

Apr. 20, 21, considered and passed House.

June 14-16, 20-23, 28, considered and passed Senate,

amended.

July 28, House agreed to conference report.

July 29, Senate agreed to conference report.

WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 41 (2005):

Aug. 8, Presidential remarks and statement.

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