[Pages S5543-S5612]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. DOMENICI:
S. 14. A bill to enhance the energy security of the United States,
and for other purposes; read the first time.
Mr. DOMENICI. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 14

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

SECTION 1. SHORT TITLE.

This Act may be cited as ``The Energy Policy Act of 2003''.

SEC. 2. TABLE OF CONTENTS.

The table of contents for this Act is as follows:
Sec. 1. Short Title.
Sec. 2. Table of Contents.

TITLE I--OIL AND GAS

Subtitle A--Production Incentives

Sec. 101. Permanent Authority to Operate the Strategic Petroleum
Reserve and Other Energy Programs.

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Sec. 102. Study on Inventory of Petroleum and Natural Gas Storage.
Sec. 103. Program on Oil and Gas Royalties in Kind.
Sec. 104. Marginal Property Production Incentives.
Sec. 105. Comprehensive Inventory of OCS Oil and Natural Gas Resources.
Sec. 106. Royalty Relief for Deep Water Production.
Sec. 107. Alaska Offshore Royalty Suspension.
Sec. 108. Orphaned, Abandoned, or Idled Wells on Federal Lands.
Sec. 109. Incentives for Natural Gas Production from Deep Wells in the
Shallow Waters of the Gulf of Mexico.
Sec. 110. Alternate Energy-Related Uses on the Outer Continental Shelf.
Sec. 111. Coastal Impact Assistance.
Sec. 112. National Energy Resource Database.
Sec. 113. Oil and Gas Lease Acreage Limitation.
Sec. 114. Assessment of Dependence of State of Hawaii on Oil.

Subtitle B--Access to Federal Lands

Sec. 121. Office of Federal Energy Permit Coordination.
Sec. 122. Pilot Project to Improve Federal Permit Coordination.
Sec. 123. Federal Onshore Leasing Programs for Oil and Gas.
Sec. 124. Estimates of Oil and Gas Resources Underlying Onshore Federal
Lands.
Sec. 125. Split-Estate Federal Oil & Gas Leasing and Development
Practices.
Sec. 126. Coordination of Federal Agencies to Establish Priority Energy
Transmission Rights-of-way.

Subtitle C--Alaska Natural Gas Pipeline

Sec. 131. Short Title.
Sec. 132. Definitions.
Sec. 133. Issuance of Certificate of Public Convenience and Necessity.
Sec. 134. Environmental Reviews.
Sec. 135. Pipeline Expansion.
Sec. 136. Federal Coordinator.
Sec. 137. Judicial Review.
Sec. 138. State Jurisdiction over In-State Delivery of Natural Gas.
Sec. 139. Study of Alternative Means of Construction.
Sec. 140. Clarification of ANGTA Status and Authorities.
Sec. 141. Sense of Congress.
Sec. 142. Participation of Small Business Concerns.
Sec. 143. Alaska Pipeline Construction Training Program.
Sec. 144. Loan Guarantee.
Sec. 145. Sense of Congress on Natural Gas Demand.

TITLE II--COAL

Subtitle A--Clean Coal Power Initiative

Sec. 201. Authorization of Appropriations.
Sec. 202. Project Criteria.
Sec. 203. Reports.
Sec. 204. Clean Coal Centers of Excellence.

Subtitle B--Federal Coal Leases

Sec. 211. Repeal of the 160-Acre Limitation for Coal Leases.
Sec. 212. Mining Plans.
Sec. 213. Payment of Advance Royalties Under Coal Leases.
Sec. 214. Elimination of Deadline for Submission of Coal Lease
Operation and Reclamation Plan.
Sec. 215. Application of Amendments.

Subtitle C--Powder River Basin

Sec. 221. Resolution of Federal Resource Development Conflicts in the
Powder River Basin.

TITLE III--INDIAN ENERGY

Sec. 301. Short Title.
Sec. 302. Office of Indian Energy Policy and Programs.
Sec. 303. Indian Energy.

``TITLE XXVI--INDIAN ENERGY

``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. Indian Mineral Development Review.
``Sec. 2607. Wind and Hydropower Feasibility Study.
Sec. 304. Four Corners Transmission Line Project.
Sec. 305. Energy Efficiency in Federally Assisted Housing.
Sec. 306. Consultation with Indian Tribes.

TITLE IV--NUCLEAR

Subtitle A--Price-Anderson Amendments

Sec. 401. Short Title.
Sec. 402. Extension of Indemnification Authority.
Sec. 403. Maximum Assessment.
Sec. 404. Department of Energy Liability Limit.
Sec. 405. Incidents Outside the United States.
Sec. 406. Reports.
Sec. 407. Inflation Adjustment.
Sec. 408. Treatment of Modular Reactors.
Sec. 409. Applicability.
Sec. 410. Civil Penalties.

Subtitle B--Deployment of Commercial Nuclear Plants

Sec. 421. Short Title.
Sec. 422. Definitions.
Sec. 423. Responsibilities of the Secretary of Energy.
Sec. 424. Limitations.
Sec. 425. Regulations.

Subtitle C--Advanced Reactor Hydrogen Co-Generation Project

Sec. 431. Project Establishment.
Sec. 432. Project Definition.
Sec. 433. Project Management.
Sec. 434. Project Requirements.
Sec. 435. Authorization of Appropriations.

Subtitle D--Miscellaneous Matters

Sec. 441. Uranium Sales and Transfers.
Sec. 442. Decommissioning Pilot Program.

TITLE V--RENEWABLE ENERGY

Subtitle A--General Provisions

Sec. 501. Assessment of Renewable Energy Resources.
Sec. 502. Renewable Energy Production Incentive.
Sec. 503. Renewable Energy on Federal Lands.
Sec. 504. Federal Purchase Requirement.
Sec. 505. Insular Area Renewable and Energy Efficient Plans.

Subtitle B--Hydroelectric Relicensing

Sec. 511. Alternative Conditions and Fishways.

Subtitle C--Geothermal Energy

Sec. 521. Competitive Lease Sale Requirements.
Sec. 522. Geothermal Leasing and Permitting on Federal Lands.
Sec. 523. Leasing and Permitting on Federal Lands Withdrawn for
Military Purposes.
Sec. 524. Reinstatement of Leases Terminated for Failure to Pay Rent.
Sec. 525. Royalty Reduction and Relief.
Sec. 526. Royalty Exemption for Direct Use of Low Temperature
Geothermal Energy Resources.

Subtitle D--Biomass Energy

Sec. 531. Definitions.
Sec. 532. Biomass Commercial Utilization Grant Program.
Sec. 533. Improved Biomass Utilization Grant Program.
Sec. 534. Report.

TITLE VI--ENERGY EFFICIENCY

Subtitle A--Federal Programs

Sec. 601. Energy Management Requirements.
Sec. 602. Energy Use Measurement and Accountability.
Sec. 603. Federal Building Performance Standards.
Sec. 604. Energy Savings Performance Contracts.
Sec. 605. Procurement of Energy Efficient Products.
Sec. 606. Congressional Building Efficiency.
Sec. 607. Increased Federal Use of Recovered Mineral Components in
Federally Funded Projects Involving Procurement of Cement
or Concrete.
Sec. 608. Utility Energy Service Contracts.
Sec. 609. Study of Energy Efficiency Standards.

Subtitle B--State and Local Programs

Sec. 611. Low Income Community Energy Efficiency Pilot Program.
Sec. 612. Energy Efficient Public Buildings.
Sec. 613. Energy Efficient Appliance Rebate Programs.

Subtitle C--Consumer Products

Sec. 621. Energy Conservation Standards for Additional Products.
Sec. 622. Energy Labeling.
Sec. 623. Energy Star Program.
Sec. 624. HVAC Maintenance Consumer Education Program.

Subtitle D--Public Housing

Sec. 631. Capacity Building for Energy-Efficient, Affordable Housing.
Sec. 632. Increase of CDBG Public Services Cap for Energy Conservation
and Efficiency Activities.
Sec. 633. FHA Mortgage Insurance Incentives for Energy Efficient
Housing.
Sec. 634. Public Housing Capital Fund.
Sec. 635. Grants for Energy-Conserving Improvements for Assisted
Housing.
Sec. 636. North American Development Bank.
Sec. 637. Energy-Efficient Appliances.
Sec. 638. Energy Efficiency Standards.
Sec. 639. Energy Strategy for HUD.

TITLE VII--TRANSPORTATION FUELS

Subtitle A--Alternative Fuel Programs

Sec. 701. Use of Alternative Fuels by Dual-Fueled Vehicles.
Sec. 702. Fuel Use Credits.
Sec. 703. Neighborhood Electric Vehicles.
Sec. 704. Credits for Medium and Heavy Duty Dedicated Vehicles.
Sec. 705. Alternative Fuel Infrastructure.
Sec. 706. Incremental Cost Allocation.
Sec. 707. Review of Alternative Fuel Programs.
Sec. 708. High Occupancy Vehicle Exception.
Sec. 709. Alternate Compliance and Flexibility.

Subtitle B--Automobile Fuel Economy

Sec. 711. Automobile Fuel Economy Standards.
Sec. 712. Dual-Fueled Automobiles.
Sec. 713. Federal Fleet Fuel Economy.
Sec. 714. Railroad Efficiency.
Sec. 715. Reduction of Engine Idling in Heavy-Use Vehicles.

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TITLE VIII--HYDROGEN

Subtitle A--Basic Research Programs

Sec. 801. Short Title.
Sec. 802. Matsunaga Act Amendment.
Sec. 803. Hydrogen Transportation and Fuel Initiative.
Sec. 804. Interagency Task Force and Coordination Plan.
Sec. 805. Review by the National Academies.

Subtitle B--Demonstration Programs

Sec. 811. Definitions.
Sec. 812. Hydrogen Vehicle Demonstration Program.
Sec. 813. Stationary Fuel Cell Demonstration Program.
Sec. 814. Hydrogen Demonstration Programs in National Parks.
Sec. 815. International Demonstration Program.
Sec. 816. Tribal Stationary Hybrid Power Demonstration.
Sec. 817. Distributed Generation Pilot Program.

Subtitle C--Federal Programs

Sec. 821. Public Education and Training.
Sec. 822. Hydrogen Transition Strategic Planning.
Sec. 823. Minimum Federal Fleet Requirement.
Sec. 824. Stationary Fuel Cell Purchase Requirement.
Sec. 825. Department of Energy Strategy.

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. Secondary Electric Vehicle Battery Use Program.
Sec. 915. Energy Efficiency Science Initiative.

Subtitle B--Distributed Energy and Electric Energy Systems

Sec. 921. Distributed Energy and Electric Energy Systems.
Sec. 922. Hybrid Distributed Power Systems.
Sec. 923. High Power Density Industry Program.
Sec. 924. Micro-Cogeneration Energy Technology.
Sec. 925. Distributed Energy Technology Demonstration Program.
Sec. 926. Office of Electric Transmission and Distribution.
Sec. 927. Electric Transmission and Distribution Programs.

Subtitle C--Renewable Energy

Sec. 931. Renewable Energy.
Sec. 932. Bioenergy Programs.
Sec. 933. Biodiesel Engine Testing Program.
Sec. 934. Concentrating Solar Power Research Program.
Sec. 935. Miscellaneous Projects.

Subtitle D--Nuclear Energy

Sec. 941. Nuclear Energy.
Sec. 942. Nuclear Energy Research Programs.
Sec. 943. Advanced Fuel Cycle Initiative.
Sec. 944. University Nuclear Science and Engineering Support.
Sec. 945. Security of Nuclear Facilities.
Sec. 946. Alternatives to Industrial Radioactive Sources.

Subtitle E--Fossil Energy

Sec. 951. Fossil Energy.
Sec. 952. Oil and Gas Research Programs.
Sec. 953. Research and Development for Coal Mining Technologies.
Sec. 954. Coal and Related Technologies Program.
Sec. 955. Complex Well Technology Testing Facility.

Subtitle F--Science

Sec. 961. Science.
Sec. 962. United States Participation in ITER.
Sec. 963. Spallation Neutron Source.
Sec. 964. Support for Science and Energy Facilities and Infrastructure.
Sec. 965. Catalysis Research Program.
Sec. 966. Nanoscale Science and Engineering Research.
Sec. 967. Advanced Scientific Computing for Energy Missions.
Sec. 968. Genomes to Life Program.
Sec. 969. Fission and Fusion Energy Materials Research Program.
Sec. 970. Energy-Water Supply Technologies Program.

Subtitle G--Energy and Environment

Sec. 971. United States-Mexico Energy Technology Cooperation.
Sec. 972. Coal Technology Loan.

Subtitle H--Management

Sec. 981. Availability of Funds.
Sec. 982. Cost Sharing.
Sec. 983. Merit Review of Proposals.
Sec. 984. External Technical Review of Departmental Programs.
Sec. 985. Improved Coordination of Technology Transfer Activities.
Sec. 986. Technology Infrastructure Program.
Sec. 987. Small Business Advocacy and Assistance.
Sec. 988. Mobility of Scientific and Technical Personnel.
Sec. 989. National Academy of Sciences Report.
Sec. 990. Outreach.
Sec. 991. Competitive Award of Management Contracts.
Sec. 992. Reprogramming.
Sec. 993. Construction with Other Laws.
Sec. 994. Improved Coordination and Management of Civilian Science and
Technology Programs.
Sec. 995. Educational Programs in Science and Mathematics.
Sec. 996. Other Transactions Authority.
Sec. 997. Report on Research and Development Program Evaluation
Methodologies.

TITLE X--PERSONNEL AND TRAINING

Sec. 1001. Workforce Trends and Traineeship Grants.
Sec. 1002. Research Fellowships in Energy Research.
Sec. 1003. Training Guidelines for Electric Energy Industry Personnel.
Sec. 1004. National Center on Energy Management and Building
Technologies.
Sec. 1005. Improved Access to Energy-related Scientific and Technical
Careers.
Sec. 1006. National Power Plant Operations Technology and Education
Center.
Sec. 1007. Federal Mine Inspectors.

TITLE XI--ELECTRICITY

Sec. 1101. Definitions.

Subtitle A--Reliability

Sec. 1111. Electric Reliability Standards.

Subtitle B--Regional Markets

Sec. 1121. Implementation Date for Proposed Rulemaking for Standard
Market Design.
Sec. 1122. Sense of the Congress on Regional Transmission
Organizations.
Sec. 1123. Federal Utility Participation in Regional Transmission
Organizations.
Sec. 1124. Regional Consideration of Competitive Wholesale Markets.

Subtitle C--Improving Transmission Access and Protecting Service
Obligations

Sec. 1131. Service Obligation Security and Parity.
Sec. 1132. Open Non-Discriminatory Access.
Sec. 1133. Transmission Infrastructure Investment.

Subtitle D--Amendments to the Public Utility Regulatory Policies Act of
1978

Sec. 1141. Net Metering.
Sec. 1142. Smart Metering.
Sec. 1143. Adoption of Additional Standards.
Sec. 1144. Technical Assistance.
Sec. 1145. Cogeneration and Small Power Production Purchase and Sale
Requirements.
Sec. 1146. Recovery of Costs.

Subtitle E--Provisions Regarding the Public Utility Holding Company Act
of 1935

Sec. 1151. Definitions.
Sec. 1152. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 1153. Federal Access to Books and Records.
Sec. 1154. State Access to Books and Records.
Sec. 1155. Exemption Authority.
Sec. 1156. Affiliate Transactions.
Sec. 1157. Applicability.
Sec. 1158. Effect on Other Regulations.
Sec. 1159. Enforcement.
Sec. 1160. Savings Provisions.
Sec. 1161. Implementation.
Sec. 1162. Transfer of Resources.
Sec. 1163. Effective Date.
Sec. 1164. Conforming Amendment to the Federal Power Act.

Subtitle F--Market Transparency, Anti-Manipulation and Enforcement

Sec. 1171. Market Transparency Rules.
Sec. 1172. Market Manipulation.
Sec. 1173. Enforcement.
Sec. 1174. Refund Effective Date.

Subtitle G--Consumer Protections

Sec. 1181. Consumer Privacy.
Sec. 1182. Unfair Trade Practices.
Sec. 1183. Definitions.

Subtitle H--Technical Amendments

Sec. 1191. Technical Amendments.

TITLE I--OIL AND GAS

Subtitle A--Production Incentives

SEC. 101. PERMANENT AUTHORITY TO OPERATE THE STRATEGIC
PETROLEUM RESERVE AND OTHER ENERGY PROGRAMS.

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

``AUTHORIZATION OF APPROPRIATIONS

``Sec. 166. There are authorized to be appropriated to the
Secretary such sums as may be necessary to carry out this
part and part D, to remain available until expended.'';
(2) by striking section 186 (42 U.S.C. 6250(e)); and
(3) by striking part E (42 U.S.C. 6251); relating to the
expiration of title I of the Act).
(b) Amendment to Title II of the Energy Policy and
Conservation Act.--Title II of the Energy Policy and
Conservation Act (42 U.S.C. 6271 et seq.) is amended--
(1) by striking section 256(h) (42 U.S.C. 6276(h)) and
inserting--
``(g) Authorization of Appropriations.--There are
authorized to be appropriated to the Secretary such sums as
may be necessary to carry out this part, to remain available
until expended.'';
(2) by inserting before section 273 (42 U.S.C. 6283) the
following:

[[Page S5546]]

``Part C--Summer Fill and Fuel Budgeting Programs'';

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

``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) Northeast Home Heating Oil.--Section 183(b)(1) of the
Energy Policy and Conservation Act (42 U.S.C. 6250(b)(1)) is
amended by striking all after ``increases'' through to ``mid-
October through March'' and inserting ``by more than 60
percent over its 5-year rolling average for the months of
mid-October through March (considered as a heating season
average)''.

SEC. 102. STUDY ON INVENTORY OF PETROLEUM AND NATURAL GAS
STORAGE.

(a) Definition.--For purposes of this section ``petroleum''
means crude oil, motor gasoline, jet fuel, distillates and
propane.
(b) Study.--The Secretary of Energy shall conduct a study
on petroleum and natural gas storage capacity and operational
inventory levels, nationwide and by major geographical
regions.
(c) Contents.--The study shall address--
(1) historical normal ranges for petroleum and natural gas
inventory levels;
(2) historical and projected storage capacity trends;
(3) estimated operation inventory levels below which
outages, delivery slowdown, rationing, interruptions in
service or other indicators of shortage begin to appear;
(4) explanations for inventory levels dropping below normal
ranges; and
(5) the ability of industry to meet U.S. 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 one year from
enactment of this Act, the Secretary of Energy shall submit a
report to Congress on the results of the study, including
findings and any recommendations for preventing future supply
shortages.

SEC. 103. PROGRAM ON OIL AND GAS ROYALTIES IN KIND.

(a) Applicability of Section.--Notwithstanding any other
provision of law, the provisions of this section shall apply
to all royalties-in-kind accepted by the Secretary (referred
to in this section as ``Secretary'') under any Federal oil or
gas lease or permit under section 36 of the Mineral Leasing
Act (30 U.S.C. 192), section 27 of the Outer Continental
Shelf Lands Act (43 U.S.C. 1353), or any other mineral
leasing law beginning on the date of the enactment of this
Act through September 30, 2013.
(b) Terms and Conditions.--All royalty accruing to the
United States under any Federal oil or gas lease or permit
under the Mineral Leasing Act (30 U.S.C. 181 et seq.) or the
Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.)
shall, on the demand of the Secretary, be paid in oil or gas.
If the Secretary makes such a demand, the following
provisions apply to such payment:
(1) Delivery by, or on behalf of, the lessee of the royalty
amount and quality due under the lease satisfies the lessee's
royalty obligation for the amount delivered, except that
transportation and processing reimbursements paid to, or
deductions claimed by, the lessee shall be subject to review
and audit.
(2) Royalty production shall be placed in marketable
condition by the lessee at no cost to the United States.
(3) 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) 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 royalties taken in kind
that otherwise would be deposited to miscellaneous receipts,
without regard to fiscal year limitation, or may use 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) The Secretary may not use revenues from the sale of oil
and gas royalties taken in kind to pay for personnel, travel,
or other administrative costs of the Federal Government.
(6) Notwithstanding the provisions of paragraph 5, the
Secretary may use a portion of the revenues from the sale of
oil royalties taken in kind, without fiscal year limitation,
to pay transportation costs, salaries, and other
administrative costs directly related to filling the
Strategic Petroleum Reserve.
(c) Reimbursement of Cost.--If the lessee, pursuant to an
agreement with the United States or as provided in the lease,
processes the royalty gas or delivers the royalty oil or gas
at a point not on or adjacent to the lease area, the
Secretary shall--
(1) reimburse the lessee for the reasonable costs of
transportation (not including gathering) from the lease to
the point of delivery or for processing costs; or
(2) allow the lessee to deduct such 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 such royalties provides
benefits to the United States greater than or equal to those
likely to have been received had royalties been taken in
value.
(e) Report to Congress.--
(1) No later than September 30, 2005, the Secretary shall
provide a report to Congress that addresses--
(A) actions taken to develop businesses processes and
automated systems to fully support the royalty-in-kind
capability to be used in tandem with the royalty-in-value
approach in managing Federal oil and gas revenue; and
(B) future royalty-in-kind businesses operation plans and
objectives.
(2) For each of the fiscal years 2004 through 2013 in which
the United States takes oil or gas royalties in kind from
production in any State or from the Outer Continental Shelf,
excluding royalties taken in kind and sold to refineries
under subsections (h), the Secretary shall provide a report
to Congress describing--
(A) the methodology or methodologies used by the Secretary
to determine compliance with subsection (d), including
performance standard for comparing amounts received by the
United States derived from such royalties in kind to amount
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 cost and savings incurred
by the United States associated with taking royalties in
kind, including but not limited to administrative savings and
any new or increased administrative costs; and
(D) an evaluation of other relevant public benefits or
detriments associated with taking royalties in kind.
(f) Deduction of Expenses.--
(1) 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 of the Interior shall deduct
amounts paid or deducted under subsections (b)(4) and (c),
and shall deposit such amounts to miscellaneous receipts.
(2) If the Secretary allows the lessee to deduct
transportation or processing costs under subsection (c), the
Secretary may not reduce any payments to recipients of
revenues derived from any other Federal oil and gas lease as
a consequence of that deduction.
(g) Consultation with States.--The Secretary shall
consult--
(1) with a State before conducting a royalty in-kind
program under this section within the State, and may delegate
management of any portion of the Federal royalty in-kind
program to such State except as otherwise prohibited by
Federal law; and
(2) annually with any State from which Federal oil or gas
royalty is being taken in kind to ensure to the maximum
extent practicable that the royalty in-kind program provides
revenues to the State greater than or equal to those likely
to have been received had royalties been taken in value.
(h) Provisions for Small Refineries.--
(1) If the Secretary determines that sufficient supplies of
crude oil are not available in the open market to refineries
not having their own source of supply for crude oil, the
Secretary may grant preference to such refineries in the sale
of any royalty oil accruing or reserved to the United States
under Federal oil and gas leases issued under any mineral
leasing law, for processing or use in such refineries at
private sale at not less than the market price.
(2) In disposing of oil under this subsection, the
Secretary may prorate such oil among such refineries in the
area in which the oil is produced.
(i) Disposition to Federal Agencies.--
(1) Any royalty oil or gas taken by the Secretary in kind
from onshore oil and gas leases may be sold at not less than
market price to any department or agency of the United
States.
(2) Any royalty oil or gas taken in kind from Federal oil
and gas leases 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) Preference for Federal Low-Income Energy Assistance
Programs.--In disposing

[[Page S5547]]

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

SEC. 104. MARGINAL PROPERTY PRODUCTION INCENTIVES.

(a) Marginal Property Defined.--Until such time as the
Secretary of the Interior issues rules under subsection (e)
that prescribe a different definition, for purposes of this
section, the term ``marginal property'' means an onshore
unit, communitization agreement, or lease not within a unit
or communitization agreement that produces on average the
combined equivalent of less than 15 barrels of oil per well
per day or 90 million British thermal units of gas per well
per day calculated based on the average over the three most
recent production months, including only those wells that
produce more than half the days in the three most recent
production months.
(b) Conditions for Reduction of Royalty Rate.--Until such
time as the Secretary of the Interior promulgates rules under
subsection (e) that prescribe different thresholds or
standards, the Secretary shall reduce the royalty rate on--
(1) oil production from marginal properties as prescribed
in subsection (c) when the spot price of West Texas
Intermediate crude oil at Cushing, Oklahoma, is, on average,
less than $15 per barrel for 90 consecutive trading days; and
(2) gas production from marginal properties as prescribed
in subsection (c) when the spot price of natural gas
delivered at Henry Hub, Louisiana, is, on average, less than
$2.00 per million British thermal units for 90 consecutive
trading days.
(c) Reduced Royalty Rate.--
(1) 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) The reduced royalty rate under this subsection shall be
effective on the first day of the production month following
the date on which the applicable price standard prescribed in
subsection (b) is met.
(d) Termination of Reduced Royalty Rate.--A royalty rate
prescribed in subsection (d)(1)(A) shall terminate--
(1) on oil production from a marginal property, on the
first day of the production month following the date on
which--
(A) the spot price of West Texas Intermediate crude oil at
Cushing, Oklahoma, on average, exceeds $15 per barrel for 90
consecutive trading days, or
(B) the property no longer qualifies as a marginal property
under subsection (a); and
(2) on gas production from a marginal property, on the
first day of the production month following the date on which
(A) the spot price of natural gas delivered at Henry Hub,
Louisiana, on average, exceeds $2.00 per million British
thermal units for 90 consecutive trading days, or
(B) the property no longer qualifies as a marginal property
under subsection (a).
(e) Rules Prescribing Different Relief.--
(1) The Secretary of the Interior, after consultation with
the Secretary of Energy, may by rule 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) The Secretary of the Interior, after consultation with
the Secretary of Energy, and within 1 year after the date of
enactment of this Act, shall, by rule--
(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) In promulgating rules under this subsection, the
Secretary of the Interior may consider--
(A) oil and gas prices and market trends;
(B) production costs;
(C) abandonment costs;
(D) Federal and State tax provisions and their effects on
production economics;
(E) other royalty relief programs; and
(F) other relevant matters.
(f) Savings Provision.--Nothing in this section shall
prevent a lessee from receiving royalty relief or a royalty
reduction pursuant to any other law or regulation that
provides more relief than the amounts provided by this
section.

SEC. 105. COMPREHENSIVE INVENTORY OF OCS OIL AND NATURAL GAS
RESOURCES.

(a) In General.--The Secretary of the Interior 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 resources
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 of Interior shall submit a
report to the Congress on the inventory of estimates and the
analysis of restrictions or impediments, together with any
recommendations, within six months of the date of enactment
of the section. The report shall be publically available and
updated at least every five years.

SEC. 106. ROYALTY RELIEF FOR DEEP WATER PRODUCTION.

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

SEC. 107. ALASKA OFFSHORE ROYALTY SUSPENSION.

Section 8(a)(3)(B) of the Outer Continental Shelf Lands Act
(43 U.S.C. 1337), is amended with the following: add ``and in
the Planning Areas offshore Alaska'' after ``West longitude''
and before ``the Secretary''.

SEC. 108. ORPHANED, ABANDONED OR IDLED WELLS ON FEDERAL
LANDS.

(a) In General.--The Secretary of the Interior, in
cooperation with the Secretary of Agriculture, shall
establish a program within 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 lands
administered by the land management agencies within the
Department of the Interior and Agriculture. The program
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.
(b) Cooperation and Consultations.--In carrying out this
program, the Secretary of the Interior shall work
cooperatively with the Secretary of Agriculture and the
States within which the Federal lands are located and consult
with the Secretary of Energy and the Interstate Oil and Gas
Compact Commission.
(c) Plan.--Within 1 year after the date of enactment of the
section, the Secretary of the Interior, in cooperation with
the Secretary of Agriculture, shall prepare a plan for
carrying out the program established under subsection (a) and
transmit copies of the plan to the Congress.
(d) Technical Assistance Program for Non-Federal Lands.--
(1) The Secretary of Energy shall establish a program to
provide technical assistance to the various 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 lands.
(2) The Secretary shall work with the States, through the
Interstate Oil and Gas Compact Commission, to assist the
States in quantifying and mitigating environmental risks of
onshore orphaned abandoned oil or gas wells on State and
private lands.
(3) The program shall include--
(A) mechanisms to facilitate identification, if possible,
of the persons or other entities 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; and

[[Page S5548]]

(C) information and training programs on best practices for
remediation of different types of sites.
(e) Definition.--For purposes of this section, a well is
idled if it has been non-operational for 7 years and there is
no anticipated beneficial use of the well.
(f) Authorization.--To carry out this section there is
authorized to be appropriated to the Secretary of the
Interior $25,000,000 for each of the fiscal years 2004
through 2008. Of the amounts authorized, $5,000,000 is
authorized for activities under subsection (d).

SEC. 109. INCENTIVES FOR NATURAL GAS PRODUCTION FROM DEEP
WELLS IN THE SHALLOW WATERS OF THE GULF OF
MEXICO.

(a) Royalty Incentive Regulations.--Not later than 90 days
after enactment, the Secretary of the Interior shall
promulgate final regulations providing royalty incentives for
natural gas produced from deep wells, as defined by the
Secretary, on oil and gas leases issued under the Outer
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) and
issued prior to January 1, 2001, in shallow waters of the
Gulf of Mexico, wholly west of 87 degrees, 30 minutes West
longitude that are less than 200 meters deep.
(b) Royalty Incentive Regulations for Ultra Deep Gas
Wells.--
(1) No later than 90 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 of the Interior shall promulgate new 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 prior to
January 1, 2001, in shallow waters less than 200 meters deep
located in the Gulf of Mexico wholly west of 87 degrees, 30
minutes West longitude. For purposes of this subsection, the
term `ultra deep wells' means wells drilled with a perforated
interval, the top of which is at least 20,000 feet true
vertical depth below the datum at mean sea level.
(2) The Secretary shall not grant the royalty incentives
outlined in this subsection if the average annual NYMEX
natural gas price exceeds for one full calendar year the
threshold price of $5 per million Btu, adjusted from the year
2000 for inflation.
(3) This subsection shall have no force or effect after the
end of the 5-year period beginning on the date of the
enactment of this Act.

SEC. 110. 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 new
subsection:
``(p) Easements or Rights-of-way for Energy and Related
Purposes.--
``(1) The Secretary may grant an easement or right-of-way
on the outer Continental Shelf for activities not otherwise
authorized in this Act, the Deepwater Port Act of 1974 (33
U.S.C. 1501 et seq.), or the Ocean Thermal Energy Conversion
Act of 1980 (42 U.S.C. 9101 et seq.), or other applicable law
when such activities--
``(A) support exploration, development, or production of
oil or natural gas, except that such easements or rights-of-
way shall not be granted in areas where oil and gas
preleasing, leasing and related activities are prohibited by
a Congressional moratorium or a withdrawal pursuant to
section 12 of this Act;
``(B) support transportation of oil or natural gas;
``(C) produce or support production, transportation, or
transmission of energy from sources other than oil and gas;
or
``(D) use facilities currently or previously used for
activities authorized under this Act.
``(2) The Secretary shall promulgate regulations to ensure
that activities authorized under this subsection are
conducted in a manner that provides for safety, protection of
the environment, conservation of the natural resources of the
outer Continental Shelf, appropriate coordination with other
Federal agencies, and a fair return to the Federal government
for any easement or right-of-way granted under this
subsection. Such regulations shall establish procedures for--
``(A) public notice and comment on proposals to be
permitted pursuant to this subsection;
``(B) consultation and review by State and local
governments that may be impacted by activities to be
permitted pursuant to this subsection;
``(C) consideration of the coastal zone management program
being developed or administered by an affected coastal State
pursuant to section 305 or section 306 of the Coastal Zone
Management Act of 1972 (16 U.S.C. 1454, 1455); and
``(D) consultation with the Secretary of Defense and other
appropriate agencies prior to the issuance of an easement or
right-of-way under this subsection concerning issues related
to national security and navigational obstruction.
``(3) The Secretary shall require the holder of an easement
or right-of-way granted under this subsection to furnish a
surety bond or other form of security, as prescribed by the
Secretary, and to comply with such other requirements as the
Secretary may deem necessary to protect the interests of the
United States.
``(4) This subsection shall not apply to any area 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.
``(5) Nothing in this subsection shall be construed to
amend or repeal, expressly by implication, the applicability
of any other law, including but not limited to, the Coastal
Zone Management Act (16 U.S.C. 1455 et seq.) or the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).''.
(b) Conforming Amendment.--The text of the heading for
section 8 of the Outer Continental Shelf Lands Act is amended
to read as follows: ``Leases, Easements, and Rights-of-Way on
the Outer Continental Shelf.''.

SEC. 111. COASTAL IMPACT ASSISTANCE.

The Outer Continental Shelf Lands Act (43 U.S.C. 1331 et
seq.) is amended by adding at the end:

``SEC. 32 COASTAL IMPACT ASSISTANCE FAIRNESS PROGRAM.

``(a) Definitions.--When used in this section:
``(1) The term `coastal political subdivision' means a
county, parish, or any equivalent subdivision of a Producing
Coastal State in all or part of which subdivision lies within
the coastal zone (as defined in section 304(1) of the Coastal
Zone Management Act (16 U.S.C. 1453(1))) and within a
distance of 200 miles from the geographic center of any
leased tract.
``(2) The term `coastal population' means the population of
all political subdivisions, as determined by the most recent
official data of the Census Bureau, contained in whole or in
part within the designated coastal boundary of a State as
defined in a State's coastal zone management program under
the Coastal Zone Management Act (16 U.S.C. 1451 et seq.).
``(3) The term `Coastal State' has the same meaning as
provided by subsection 304(4) of the Coastal Zone Management
Act (16 U.S.C. 1453(4)).
``(4) The term `coastline' has the same meaning as the term
`coast line' as defined in subsection 2(c) of the Submerged
Lands Act (43 U.S.C. 1301(c)).
``(5) The term `distance' means the minimum great circle
distance, measured in statute miles.
``(6) The term `leased tract' means a tract maintained
under section 6 or leased under section 8 for the purpose of
drilling for, developing, and producing oil and natural gas
resources.
``(7) The term `Producing Coastal State' means a Coastal
State with a coastal seaward boundary within 200 miles from
the geographic center of a leased tract other than a leased
tract within any area of the Outer Continental Shelf where a
moratorium on new leasing was in effect as of January 1, 2002
unless the lease was issued prior to the establishment of the
moratorium and was in production on January 1, 2002.
``(8) 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 lying seaward of
the zone defined and governed by section 8(g) of this Act, or
lying within such zone but to which section 8(g) does not
apply, the geographic center of which lies within a distance
of 200 miles from any part of the coastline of any Producing
Coastal State, including bonus bids, rents, royalties
(including payments for royalties taken in kind and sold),
net profit share payments, and related late payment interest.
Such term shall only apply to leases issued after January 1,
2003 and revenues from existing leases that occurs after
January 1, 2003. Such term does not include any revenues from
a leased tract or portion of a leased tract that is included
within any area of the Outer Continental Shelf where a
moratorium on new leasing was in effect as of January 1,
2002, unless the lease was issued prior to the establishment
of the moratorium and was in production on January 1, 2002.
``(9) The term `Secretary' means the Secretary of
Interior.''
``(b) Authorization.--For fiscal years 2004 through 2009,
an amount equal to not more than 12.5 percent of qualified
Outer Continental Shelf revenues is authorized to be
appropriated for the purposes of this section.
``(c) Impact Assistance Payments to States and Political
Subdivisions.--The Secretary shall make payments from the
amounts available under this section to Producing Coastal
States with an approved Coastal Impact Assistance Plan, and
to coastal political subdivisions as follows:
``(1) Of the amounts appropriated, the allocation for each
Producing Coastal State shall be calculated based on the
ratio of qualified Outer Continental Shelf revenues generated
off the coastline of the Producing Coastal State to the
qualified Outer Continental Shelf revenues generated off the
coastlines of all Producing Coastal States for each fiscal
year. Where there is more than one Producing Coastal State
within 200 miles of a leased tract, the amount of each
Producing Coastal State's allocation for such leased tract
shall be inversely proportional to the distance between the
nearest point on the coastline of such State and the
geographic center of each leased tract or portion of the
leased tract (to the nearest whole mile) that is within 200
miles of that coastline, as determined by the Secretary.
``(2) Thirty-five percent of each Producing Coastal State's
allocable share as determined under paragraph (1) shall be
paid

[[Page S5549]]

directly to the coastal political subdivisions by the
Secretary based on the following formula:
``(A) Twenty-five percent shall be allocated based on the
ratio of such coastal political subdivision's coastal
population to the coastal population of all coastal political
subdivisions in the Producing Coastal State.
``(B) Twenty-five percent shall be allocated based on the
ratio of such coastal political subdivision's coastline miles
to the coastline miles of a coastal political subdivision in
the Producing Coastal State except that for those coastal
political subdivisions in the State of Louisiana without a
coastline, the coastline for purposes of this element of the
formula shall be the average length of the coastline of the
remaining coastal subdivisions in the state.
``(C) Fifty percent shall be allocated based on the
relative distance of such coastal political subdivision from
any leased tract used to calculate the Producing Coastal
State's allocation using ratios that are inversely
proportional to the distance between the point in the coastal
political subdivision closest to the geographic center of
each leased tract or portion, as determined by the Secretary,
except that in the State of Alaska, the funds for this
element of the formula shall be divided equally among the two
closest coastal political subdivisions. For purposes of the
calculations under this subparagraph, a leased tract or
portion of a leased tract shall be excluded if the leased
tract or portion is located in a geographic area where a
moratorium on new leasing was in effect on January 1, 2002,
unless the lease was issued prior to the establishment of the
moratorium and was in production on January 1, 2002.
``(3) Any amount allocated to a Producing Coastal State or
coastal political subdivision but not disbursed because of a
failure to have an approved Coastal Impact Assistance Plan
under this section shall be allocated equally by the
Secretary among all other Producing Coastal States in a
manner consistent with this subsection except that the
Secretary shall hold in escrow such amount until the final
resolution of any appeal regarding the disapproval of a plan
submitted under this section. The Secretary may waive the
provisions of this paragraph and hold a Producing Coastal
State's allocable share in escrow if the Secretary determines
that such State is making a good faith effort to develop and
submit, or update, a Coastal Impact Assistance Plan.
``(4) For purposes of this subsection, calculations of
payments for fiscal years 2004 through 2006 shall be made
using qualified Outer Continental Shelf revenues received in
fiscal year 2003, and calculations of payments for fiscal
years 2007 through 2009 shall be made using qualified Outer
Continental Shelf revenues received in fiscal year 2006.
``(d) Coastal Impact Assistance Plan.--
``(1) The Governor of each Producing Coastal State shall
prepare, and submit to the Secretary, a Coastal Impact
Assistance Plan. The Governor shall solicit local input and
shall provide for public participation in the development of
the plan. The plan shall be submitted to the Secretary by
July 1, 2004. Amounts received by Producing Coastal States
and coastal political subdivisions may be used only for the
purposes specified in the Producing Coastal State's Coastal
Impact Assistance Plan.
``(2) The Secretary shall approve a plan under paragraph
(1) prior to disbursement of amounts under this section. The
Secretary shall approve the plan if the Secretary determines
that the plan is consistent with the uses set forth in
subsection (f) of this section and if the plan contains--
``(A) the name of the State agency that will have the
authority to represent and act for the State in dealing with
the Secretary for purposes of this section;
``(B) a program for the implementation of the plan which
describes how the amounts provided under this section will be
used;
``(C) a contact for each political subdivision and
description of how coastal political subdivisions will use
amounts provided under this section, including a
certification by the Governor that such uses are consistent
with the requirements of this section;
``(D) certification by the Governor that ample opportunity
has been accorded for public participation in the development
and revision of the plan; and
``(E) measures for taking into account other relevant
Federal resources and programs.
``(3) The Secretary shall approve or disapprove each plan
or amendment within 90 days of its submission.
``(4) Any amendment to the plan shall be prepared in
accordance with the requirements of this subsection and shall
be submitted to the Secretary for approval or disapproval.
``(e) Authorized Uses.--Producing Coastal States and
coastal political subdivisions shall use amounts provided
under this section, including any such amounts deposited in a
State or coastal political subdivision administered trust
fund dedicated to uses consistent with this subsection, in
compliance with Federal and State law and only for one or
more of the following purposes--
``(1) projects and activities for the conservation,
protection or restoration of coastal areas including
wetlands;
``(2) mitigating damage to fish, wildlife or natural
resources;
``(3) planning assistance and administrative costs of
complying with the provisions of this section;
``(4) implementation of Federally approved marine, coastal,
or comprehensive conservation management plans; and
``(5) mitigating impacts of Outer Continental Shelf
activities through funding onshore infrastructure and public
service needs.
(f) Compliance With Authorized Uses.--If the Secretary
determines that any expenditure made by a Producing Coastal
State or coastal political subdivision is not consistent with
the uses authorized in subsection (e) of this section, the
Secretary shall not disburse any further amounts under this
section to that Producing Coastal State or coastal political
subdivision until the amounts used for the inconsistent
expenditure have been repaid or obligated for authorized
uses.

SEC. 112. NATIONAL ENERGY RESOURCE DATABASE.

(a) Short Title.--This section may be cited as the
``National Energy Data Preservation Program Act of 2003''.
(b) Program.--The Secretary of the Interior (in this
section, referred to as ``Secretary'') shall carry out a
National Energy Data Preservation Program in accordance with
this section--
(1) to archive geologic, geophysical, and engineering data
and samples related to energy resources including oil, gas,
coal, and geothermal resources;
(2) to provide a national catalog of such archival
material; and
(3) to provide technical assistance related to the archival
material.
(c) Energy Data Archive System.--
(1) The Secretary shall establish, as a component of the
Program, an energy data archive system, which shall provide
for the storage, preservation, and archiving of subsurface,
and in limited cases surface, geological, geophysical and
engineering data and samples. The Secretary, in consultation
with the Association of American State Geologists and
interested members of the public, shall develop guidelines
relating to the energy data archive system, including the
types of data and samples to be preserved.
(2) The system shall be comprised of State agencies and
agencies within the Department of the Interior that maintain
geological and geophysical data and samples regarding energy
resources and 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) The Secretary may not designate a State agency as a
component of the energy data archive system unless it is the
agency that acts as the geological survey in the State.
(4) The energy data archive system shall provide for the
archiving of relevant subsurface data and samples obtained
during energy exploration and production operations on
Federal lands--
(A) in the most appropriate repository designated under
paragraph (2), with preference being given to archiving data
in the State in which the data was collected; and
(B) consistent with all applicable law and requirements
relating to confidentiality and proprietary data.
(5)(A) Subject to the availability of appropriations, the
Secretary shall provide financial assistance to a State
agency that is designated under paragraph (2) for providing
facilities to archive energy material.
(B) The Secretary, in consultation with the Association of
American State Geologists and interested members of the
public, shall establish procedures for providing assistance
under this paragraph. The procedures shall be designed to
ensure that such assistance primarily supports the expansion
of data and material archives and the collection and
preservation of new data and samples.
(d) National Catalog.--
(1) As soon as practicable after the date of the enactment
of this section, the Secretary shall develop and maintain, as
a component of the Program, a national catalog that
identifies
(A) energy data and samples available in the energy data
archive system established under subsection (c);
(B) the repository for particular material in such system;
and
(C) the means of accessing the material.
(2) The Secretary shall make the national catalog
accessible to the public on the site of the Survey on the
World Wide Web, consistent with all applicable requirements
related to confidentiality and proprietary data.
(3) The Secretary may carry out the requirements of this
subsection by contract or agreement with appropriate persons.
(e) Technical Assistance.--
(1) Subject to the availability of appropriations, as a
component of the Program, the Secretary shall provide
financial assistance to any State agency designated under
subsection (c)(2) to provide technical assistance to enhance
understanding, interpretation, and use of materials archived
in the energy data archive system established under
subsection (c).
(2) The Secretary, in consultation with the Association of
American State Geologists and interested members of the
public, shall develop a process, which shall involve the
participation of representatives of relevant Federal and
State agencies, for the approval of financial assistance to
State agencies under this subsection.
(f) Costs.--
(1) The Federal share of the cost of an activity carried
out with assistance under subsections (c) or (e) shall be no
more than 50 percent of the total cost of that activity.

[[Page S5550]]

(2) The Secretary--
(A) may accept private contributions of property and
services for technical assistance and archive activities
conducted under this section; and
(B) may apply the value of such contributions to the non-
Federal share of the costs of such technical assistance and
archive activities.
(g) Reports.--
(1) Within one year after the date of the enactment of this
Act, the Secretary shall submit an initial report to the
Congress setting forth a plan for the implementation of the
Program.
(2) Not later than 90 days after the end of the first
fiscal year beginning after the submission of the report
under paragraph (1) and after the end of each fiscal year
thereafter, the Secretary shall submit a report to the
Congress describing the status of the Program and evaluating
progress achieved during the preceding fiscal year in
developing and carrying out the Program.
(3) The Secretary shall consult with the Association of
American State Geologists and interested members of the
public in preparing the reports required by this subsection.
(h) Definitions.--As used in this section, the term:
(1) ``Association of American State Geologists'' means the
organization of the chief executives of the State geological
surveys.
(2) ``Secretary'' means the Secretary of the Interior
acting through the Director of the United States Geological
Survey.
(3) ``Program'' means the National Energy Data Preservation
Program carried out under this section.
(4) ``Survey'' means the United States Geological Survey.
(i) Maintenance of State Effort.--It is the intent of the
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) Authorization of Appropriations.--There is authorized
to be appropriated to the Secretary $30,000,000 for each of
fiscal years 2003 through 2007 for carrying out this section.

SEC. 113. OIL AND GAS LEASE ACREAGE LIMITATION.

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 sands area'' the following: ``as well as 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. 114. ASSESSMENT OF DEPENDENCE OF STATE OF HAWAII ON OIL.

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

Subtitle B--Access to Federal Lands

SEC. 121. OFFICE OF FEDERAL ENERGY PERMIT COORDINATION.

(a) Establishment.--The President shall establish the
Office of Federal Energy Permit Coordination (in this
section, referred to as ``Office'') within the Executive
Office of the President in the same manner and mission as the
White House Energy Projects Task Force established by
Executive Order 13212.
(b) Staffing.--The Office shall be staffed by functional
experts from relevant federal agencies and departments on a
nonreimbursable basis to carry out the mission of this
office.
(c) Reporting.--The Office shall provide an annual report
to Congress, detailing the activities put in place to
coordinate and expedite Federal decisions on energy projects.
The report shall list accomplishments in improving the
federal decision making process and shall include any
additional recommendations or systemic changes needed to
establish a more effective and efficient federal permitting
process.

SEC. 122. PILOT PROJECT TO IMPROVE FEDERAL PERMIT
COORDINATION.

(a) Creation of Pilot Project.--The Secretary of the
Interior (in this section, referred to as ``Secretary'')
shall establish a Federal Permit Streamlining Pilot Project.
The Secretary shall enter into a Memorandum of Understanding
with the Secretary of Agriculture, Administrator of the
Environmental Protection Agency, and the Chief of the Corps
of Engineers within 90 days after enactment of this Act. The
Secretary may also request that the Governors of Wyoming,
Montana, Colorado, and New Mexico be signatories to the
Memorandum of Understanding.
(b) Designation of Qualified Staff.--Once the Pilot Project
has been established by the Secretary, all Federal signatory
parties shall assign an employee on a nonreimbursable basis
to each of the field offices identified in section (c), who
has expertise in the regulatory issues pertaining to their
office, including, as applicable, particular expertise in
Endangered Species Act section 7 consultations and the
preparation of Biological Opinions, Clean Water Act 404
permits, Clean Air Act regulatory matters, planning under the
National Forest Management Act, and the preparation of
analyses under the National Environmental Policy Act.
Assigned staff shall report to the Bureau of Land Management
(BLM) Field Managers in the offices to which they are
assigned, and shall be responsible for all issues related to
the jurisdiction of their home office or agency, and
participate as part of the team of employees working on
proposed energy projects, planning, and environmental
analyses.
(c) Field Offices.--The following BLM Field Offices shall
serve as the Federal Permit Streamlining Pilot Project
offices:
(1) Rawlins, Wyoming;
(2) Buffalo, Wyoming;
(3) Miles City, Montana;
(4) Farmington, New Mexico;
(5) Carlsbad, New Mexico; and
(6) Glenwood Springs, Colorado.
(d) Reports.--The Secretary shall submit a report to the
Congress 3 years following the date of enactment of this
section, outlining the results of the Pilot Project to date
and including a recommendation to the President as to whether
the Pilot Project should be implemented nationwide.
(e) Additional Personnel.--The Secretary shall assign to
each of the BLM Field Offices listed in subsection (c) such
additional personnel as is necessary to ensure the effective
implementation of--
(1) the Pilot Project; and
(2) other programs administered by such offices, including
inspection and enforcement related to energy development on
federal lands, pursuant to the multiple use mandate of the
Federal Land Policy and Management Act of 1976 (43 U.S.C.
1701 et seq).
(f) Savings Provision.--Nothing in this section shall
affect the operation of any federal or state law or any
delegation of authority made by a Secretary or head of an
Agency whose employees are participating in the program
provided for by this section.
(g) Authorization of Appropriations.--There are authorized
to be appropriated such sums as may be necessary to implement
this section.

SEC. 123. FEDERAL ONSHORE LEASING PROGRAMS FOR OIL AND GAS.

(a) Timely Action on Leases and Permits.--To ensure timely
action on oil and gas leases and applications for permits to
drill on lands otherwise available for leasing, the Secretary
of the Interior shall--
(1) ensure expeditious compliance with the requirements of
section 102(2)(C) of the National Environmental Policy Act of
1969 (42 U.S.C. 4332(2)(C));
(2) improve consultation and coordination with the States;
and
(3) improve the collection, storage, and retrieval of
information related to such leasing activities.

[[Page S5551]]

(b) Improved Enforcement.--The Secretary shall improve
inspection and enforcement of oil and gas activities,
including enforcement of terms and conditions in permits to
drill.
(c) Authorization of Appropriations.--For each of the
fiscal years 2004 through 2007, in addition to amounts
otherwise authorized to be appropriated for the purpose of
carrying out section 17 of the Mineral Leasing Act (30 U.S.C.
226), there are authorized to be appropriated to the
Secretary of the Interior--
(1) $40,000,000 for the purpose of carrying out paragraphs
(1) through (3) of subsection (a); and
(2) $20,000,000 for the purpose of carrying out subsection
(b).

SEC. 124. ESTIMATES OF OIL AND GAS RESOURCES UNDERLYING
ONSHORE FEDERAL LANDS.

Section 604 of the Energy Act of 2000 (42 U.S.C. 6217) is
amended by striking ``(a) In General'' and all thereafter and
inserting--
``(a) In General.--The Secretary of the Interior, in
consultation with the Secretaries of Agriculture and Energy,
shall conduct an inventory of all onshore Federal lands and
take measures necessary to update and revise this inventory.
The inventory shall identify for all federal lands--
``(1) the United States Geological Survey estimates of the
oil and gas resources underlying these lands;
``(2) the extent and nature of any restrictions or
impediments to the exploration, production and transportation
of such resources, including--
``(A) existing land withdrawals and the underlying purpose
for each withdrawal;
``(B) restrictions or impediments affecting timeliness of
granting leases;
``(C) post-lease restrictions or impediments such as
conditions of approval, applications for permits to drill,
applicable environmental permits;
``(D) permits or restrictions associated with transporting
the resources; and
``(E) identification of the authority for each restriction
or impediment together with the impact on additional
processing or review time and potential remedies; and
``(3) the estimates of oil and gas resources not available
for exploration and production by virtue of the restrictions
identified above.
``(b) Reports.--The Secretary shall provide a progress
report to the Congress by October 1, 2006 and shall complete
the inventory by October 1, 2010.
``(c) Authorization of Appropriations.--There are
authorized to be appropriated such sums as may be necessary
to implement this section.''.

SEC. 125. SPLIT-ESTATE FEDERAL OIL & 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
(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 the Congress no later than 180 days
after enactment of this section.

SEC. 126. COORDINATION OF FEDERAL AGENCIES TO ESTABLISH
PRIORITY ENERGY TRANSMISSION RIGHTS-OF-WAY.

(a) Definitions.--For purposes of this section:
(1) The term ``utility corridor'' means any linear strip of
land across Federal lands of approved width, but limited by
technological, environmental, and topographical factors for
use by a utility facility.
(2) The term ``Federal authorization'' means any
authorization required under Federal law in order to site a
utility facility, including but not limited to such permits,
special use authorizations, certifications, opinions, or
other approvals as may be required, issued by a Federal
agency.
(3) The term ``Federal lands'' means all lands owned by the
United States, except
(A) lands in the National Park System;
(B) lands held in trust for an Indian or Indian tribe; and
(C) lands on the Outer Continental Shelf.
(4) The term ``Secretary'' means the Secretary of Energy.
(5) The term ``utility facility'' means any privately,
publicly, or cooperatively owned line, facility, or system
(A) for the transportation of oil and natural gas, synthetic
liquid or gaseous fuels, any refined product produced
therefrom, or for transportation of products in support of
production, or for storage and terminal facilities in
connection therewith; or (B) for the generation, transmission
and distribution of electric energy.
(b) Utility Corridors.--
(1) No later than 24 months after the date of enactment of
this section, the Secretary of the Interior, with respect to
public lands, and the Secretary of Agriculture, with respect
to National Forest System lands, in consultation with the
Secretary, shall--
(A) designate utility corridors pursuant to section 503 of
the Federal Land Policy and Management Act (43 U.S.C. 1763)
in the eleven contiguous Western States, as identified in
section 103(o) of such Act (43 U.S.C. 1702(o)); and
(B) incorporate the utility corridors designated under
paragraph (A) into the relevant departmental and agency land
use and resource management plans or their equivalent.
(2) The Secretary shall coordinate with the affected
Federal agencies to jointly identify potential utility
corridors on Federal lands in the other States and jointly
develop a schedule for the designation, environmental review
and incorporation of such utility corridors into relevant
departmental and agency land use and resource management
plans or their equivalent.
(c) Federal Permit Coordination.--The Secretary, in
consultation with the Secretary of the Interior, the
Secretary of Agriculture, and the Secretary of Defense, shall
develop a memorandum of understanding (``MOU'') for the
purpose of coordinating all applicable Federal authorizations
and environmental reviews related to a proposed or existing
utility facility. To the maximum extent practicable under
applicable law, the Secretary shall coordinate the process
developed in the MOU 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 to ensure timely review and
permit decisions. The MOU shall provide for--
(1) the coordination among affected Federal agencies to
ensure that the necessary Federal authorizations are
conducted concurrently with applicable State siting processes
and are considered within a specific time frame to be
identified in the MOU;
(2) 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
(3) a process to expedite applications to construct or
modify utility facilities within utility corridors.

Subtitle C--Alaska Natural Gas Pipeline

SEC. 131. SHORT TITLE.

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

SEC. 132. DEFINITIONS.

In this subtitle, the following definitions apply:
(1) The term ``Alaska natural gas'' means natural gas
derived from the area of the State of Alaska lying north of
64 degrees North latitude.
(2) The term ``Alaska natural gas transportation project''
means any natural gas pipeline system that carries Alaska
natural gas to the border between Alaska and Canada
(including related facilities subject to the jurisdiction of
the Commission) that is authorized under either--
(A) the Alaska Natural Gas Transportation Act of 1976 (15
U.S.C. 719 et seq.); or
(B) section 133.
(3) The term ``Alaska natural gas transportation system''
means the Alaska natural gas transportation project
authorized under the Alaska Natural Gas Transportation Act of
1976 and designated and described in section 2 of the
President's decision.
(4) The term ``Commission'' means the Federal Energy
Regulatory Commission.
(5) The term ``President's decision'' means the decision
and report to Congress on the Alaska natural gas
transportation system issued by the President on September
22, 1977, pursuant to section 7 of the Alaska Natural Gas
Transportation Act of 1976 (15 U.S.C. 719(e) and approved by
Public Law 95-158 (91 Stat.1268).

SEC. 133. ISSUANCE OF CERTIFICATE OF PUBLIC CONVENIENCE AND
NECESSITY.

(a) Authority of the Commission.--Notwithstanding the
provisions of the Alaska Natural Gas Transportation Act of
1976 (15 U.S.C. 719 et seq.), the Commission may, pursuant to
section 7(c) of the Natural Gas Act (15 U.S.C. 717f(c)),
consider and act on an application for the issuance of a
certificate of public convenience and necessity authorizing
the construction and operation of an Alaska natural gas
transportation project other than the Alaska natural gas
transportation system.
(b) Issuance of Certificate.--
(1) The Commission shall issue a certificate of public
convenience and necessity authorizing the construction and
operation of an Alaska natural gas transportation project
under this section if the applicant has satisfied the
requirements of section 7(e) of the Natural Gas Act (15
U.S.C. 717f(e)).
(2) In considering an application under this section, the
Commission shall presume that--
(A) a public need exists to construct and operate the
proposed Alaska natural gas transportation project; and
(B) sufficient downstream capacity will exist to transport
the Alaska natural gas moving through such project to markets
in the contiguous United States.
(c) Expedited Approval Process.--The Commission shall issue
a final order granting or denying any application for a
certificate of public convenience and necessity under section
7(c) of the Natural Gas Act (15 U.S.C. 717f(c)) and this
section not more than

[[Page S5552]]

60 days after the issuance of the final environmental impact
statement for that project pursuant to section 134.
(d) Prohibition on Certain Pipeline Route.--No license,
permit, lease, right-of-way, authorization, or other approval
required under Federal law for the construction of any
pipeline to transport natural gas from lands within the
Prudhoe Bay oil and gas lease area may be granted for any
pipeline that follows a route that traverses--
(1) the submerged lands (as defined by the Submerged Lands
Act) beneath, or the adjacent shoreline of, the Beaufort Sea;
and
(2) enters Canada at any point north of 68 degrees North
latitude.
(e) Open Season.--Except where an expansion is ordered
pursuant to section 135, initial or expansion capacity on any
Alaska natural gas transportation project shall be allocated
in accordance with procedures to be established by the
Commission in regulations governing the conduct of open
seasons for such project. Such procedures shall include the
criteria for and timing of any open seasons; promote
competition in the exploration, development, and production
of Alaska natural gas; and, for any open season for capacity
beyond the initial capacity, provide the opportunity for the
transportation of natural gas other than from the Prudhoe Bay
and Point Thompson units. The Commission shall issue such
regulations not later than 120 days after the date of
enactment of this Act.
(f) Projects in the Contiguous United States.--Applications
for additional or expanded pipeline facilities that may be
required to transport Alaska natural gas from Canada to
markets in the contiguous United States may be made pursuant
to the Natural Gas Act. To the extent such pipeline
facilities include the expansion of any facility constructed
pursuant to the Alaska Natural Gas Transportation Act of
1976, the provisions of that Act shall continue to apply.
(g) Study of In-state Needs.--The holder of the certificate
of public convenience and necessity issued, modified, or
amended by the Commission for an Alaska natural gas
transportation project shall demonstrate that it has
conducted a study of Alaska in-State needs, including tie-in
points along the Alaska natural gas transportation project
for in-State access.
(h) Alaska Royalty Gas.--The Commission, upon the request
of the State of Alaska and after a hearing, may provide for
reasonable access to the Alaska natural gas transportation
project for the State of Alaska or its designee for the
transportation of the State's royalty gas for local
consumption needs within the State; except that the rates of
existing shippers of subscribed capacity on such project
shall not be increased as a result of such access.
(i) Regulations.--The Commission may issue regulations to
carry out the provisions of this section.

SEC. 134. ENVIRONMENTAL REVIEWS.

(a) Compliance With NEPA.--The issuance of a certificate of
public convenience and necessity authorizing the construction
and operation of any Alaska natural gas transportation
project under section 133 shall be treated as a major Federal
action significantly affecting the quality of the human
environment within the meaning of section 102(2)(c) of the
National Environmental Policy Act of 1969 (42 U.S.C.
4332(2)(c)).
(b) Designation of Lead Agency.--The Commission shall be
the lead agency for purposes of complying with the National
Environmental Policy Act of 1969, and shall be responsible
for preparing the statement required by section 102(2)(c) of
that Act (42 U.S.C. 4332(2)(c)) with respect to an Alaska
natural gas transportation project under section 133. The
Commission shall prepare a single environmental statement
under this section, which shall consolidate the environmental
reviews of all Federal agencies considering any aspect of the
project.
(c) Other Agencies.--All Federal agencies considering
aspects of the construction and operation of an Alaska
natural gas transportation project under section 133 shall
cooperate with the Commission, and shall comply with
deadlines established by the Commission in the preparation of
the statement under this section. The statement prepared
under this section shall be used by all such agencies to
satisfy their responsibilities under section 102(2)(c) of the
National Environmental Policy Act of 1969 (42 U.S.C.
4332(2)(c)) with respect to such project.
(d) Expedited Process.--The Commission shall issue a draft
statement under this section not later than 12 months after
the Commission determines the application to be complete and
shall issue the final statement not later than 6 months after
the Commission issues the draft statement, unless the
Commission for good cause finds that additional time is
needed.

SEC. 135. PIPELINE EXPANSION.

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

SEC. 136. FEDERAL COORDINATOR.

(a) Establishment.--There is established, as an independent
office in the executive branch, the Office of the Federal
Coordinator for Alaska Natural Gas Transportation Projects.
(b) Federal Coordinator.--The Office shall be headed by a
Federal Coordinator for Alaska Natural Gas Transportation
Projects, who shall
(1) be appointed by the President, by and with the advice
and consent of the Senate;
(2) for a term equal to the period required to design,
permit and construction the project plus one year; and
(3) be compensated at the rate prescribed for level III of
the Executive Schedule (5 U.S.C. 5314).
(c) Duties.--The Federal Coordinator shall be responsible
for--
(1) coordinating the expeditious discharge of all
activities by Federal agencies with respect to an Alaska
natural gas transportation project; and
(2) ensuring the compliance of Federal agencies with the
provisions of this subtitle.
(d) Reviews and Actions of Other Federal Agencies.--
(1) All reviews conducted and actions taken by any Federal
officer or agency relating to an Alaska natural gas
transportation project authorized under this section shall be
expedited, in a manner consistent with completion of the
necessary reviews and approvals by the deadlines set forth in
this subtitle.
(2) No Federal officer or agency shall have the authority
to include terms and conditions that are permitted, but not
required, by law on any certificate, right-of-way, permit,
lease, or other authorization issued to an Alaska natural gas
transportation project if the Federal Coordinator determines
that the terms and conditions would prevent or impair in any
significant respect the expeditious construction and
operation, or an expansion, of the project.
(3) Unless required by law, no Federal officer or agency
shall add to, amend, or abrogate any certificate, right-of-
way, permit, lease, or other authorization issued to an
Alaska natural gas transportation project if the Federal
Coordinator determines that such action would prevent or
impair in any significant respect the expeditious
construction and operation of, or an expansion of, the
project.
(4) The Federal Coordinator's authority shall not include
the ability to override--
(A) the implementation or enforcement of regulations issued
by the Commission pursuant to Section 133(e); or
(B) an order by the Commission to expand the project
pursuant to Section 135.
(5) Nothing in this section shall give the Federal
Coordinator the authority to impose additional terms,
conditions or requirements beyond those imposed by the
Commission or any agency with respect to construction and
operation, or an expansion of, the project.
(e) State Coordination.--The Federal Coordinator shall
enter into a Joint Surveillance and Monitoring Agreement,
approved by the President and the Governor of Alaska, with
the State of Alaska similar to that in effect during
construction of the Trans-Alaska Oil Pipeline to monitor the
construction of the Alaska natural gas transportation
project. The Federal Government shall have primary
surveillance and monitoring responsibility where the Alaska
natural gas transportation project crosses Federal lands and
private lands, and the State government shall have primary
surveillance and monitoring responsibility where the Alaska
natural gas transportation project crosses State lands.

[[Page S5553]]

(f) Transfer of Federal Inspector Functions and
Authority.--Upon appointment of the Federal Coordinator by
the President, all of the functions and authority of the
Office of Federal Inspector of Construction for the Alaska
Natural Gas Transportation System vested in the Secretary of
Energy pursuant to section 3012(b) of Public Law 102-486 (15
U.S.C. 719e(b)), including all functions and authority
described and enumerated in the Reorganization Plan No. 1 of
1979 (44 Fed. Reg. 33,663), Executive Order No. 12142 of June
21, 1979 (44 Fed. Reg. 36,927), and section 5 of the
President's decision, shall be transferred to the Federal
Coordinator.

SEC. 137. JUDICIAL REVIEW.

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

SEC. 138. STATE JURISDICTION OVER IN-STATE DELIVERY OF
NATURAL GAS.

(a) Local Distribution.--Any facility receiving natural gas
from the Alaska natural gas transportation project for
delivery to consumers within the State of Alaska shall be
deemed to be a local distribution facility within the meaning
of section 1(b) of the Natural Gas Act (15 U.S.C. 717(b)),
and therefore not subject to the jurisdiction of the
Commission.
(b) Additional Pipelines.--Nothing in this subtitle, except
as provided in section 133(d), shall preclude or affect a
future gas pipeline that may be constructed to deliver
natural gas to Fairbanks, Anchorage, Matanuska-Susitna
Valley, or the Kenai peninsula or Valdez or any other site in
the State of Alaska for consumption within or distribution
outside the State of Alaska.
(c) Rate Coordination.--Pursuant to the Natural Gas Act,
the Commission shall establish rates for the transportation
of natural gas on the Alaska natural gas transportation
project. In exercising such authority, the Commission,
pursuant to section 17(b) of the Natural Gas Act (15 U.S.C.
717p(b)), shall confer with the State of Alaska regarding
rates (including rate settlements) applicable to natural gas
transported on and delivered from the Alaska natural gas
transportation project for use within the State of Alaska.

SEC. 139. STUDY OF ALTERNATIVE MEANS OF CONSTRUCTION.

(a) Requirement of Study.--If no application for the
issuance of a certificate or amended certificate of public
convenience and necessity authorizing the construction and
operation of an Alaska natural gas transportation project has
been filed with the Commission not later than 18 months after
the date of enactment of this Act, the Secretary of Energy
shall conduct a study of alternative approaches to the
construction and operation of the project.
(b) Scope of Study.--The study shall consider the
feasibility of establishing a Government corporation to
construct an Alaska natural gas transportation project, and
alternative means of providing Federal financing and
ownership (including alternative combinations of Government
and private corporate ownership) of the project.
(c) Consultation.--In conducting the study, the Secretary
of Energy shall consult with the Secretary of the Treasury
and the Secretary of the Army (acting through the Commanding
General of the Corps of Engineers).
(d) Report.--If the Secretary of Energy is required to
conduct a study under subsection (a), the Secretary shall
submit a report containing the results of the study, the
Secretary's recommendations, and any proposals for
legislation to implement the Secretary's recommendations to
Congress.

SEC. 140. CLARIFICATION OF ANGTA STATUS AND AUTHORITIES.

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

SEC. 141. SENSE OF CONGRESS.

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

SEC. 142. PARTICIPATION OF SMALL BUSINESS CONCERNS.

(a) Sense of Congress.--It is the sense of Congress that an
Alaska natural gas transportation project will provide
significant economic benefits to the United States and
Canada. In order to maximize those benefits, Congress urges
the sponsors of the pipeline project to maximize the
participation of small business concerns in contracts and
subcontracts awarded in carrying out the project.
(b) Study.--
(1) The Comptroller General shall conduct a study on the
extent to which small business concerns participate in the
construction of oil and gas pipelines in the United States.
(2) Not later that 1 year after the date of enactment of
this Act, the Comptroller General shall transmit to Congress
a report containing the results of the study.
(3) The Comptroller General shall update the study at least
once every 5 years and transmit to Congress a report
containing the results of the update.
(4) After the date of completion of the construction of an
Alaska natural gas transportation project, this subsection
shall no longer apply.
(c) Small Business Concern Defined.--In this section, the
term ``small business concern'' has the meaning given such
term in section 3(a) of the Small Business Act (15 U.S.C.
632(a)).

SEC. 143. ALASKA PIPELINE CONSTRUCTION TRAINING PROGRAM.

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

SEC. 144. LOAN GUARANTEES.

(a) Authority.

[[Page S5554]]

(1) The Secretary may enter agreements with 1 or more
holders of a certificate of public convenience and necessity
issued under section 133(b) of this Act or section 9 of the
Alaska Natural Gas Transportation Act of 1976 (15 U.S.C.
719g) to issue Federal guarantee instruments with respect to
loans and other debt obligations for a qualified
infrastructure project.
(2) Subject to the requirements of this section, the
Secretary may also enter into agreements with 1 or more
owners of the Canadian portion of a qualified infrastructure
project to issue Federal guarantee instruments with respect
to loans and other debt obligations for a qualified
infrastructure project as though such owner were a holder
described in paragraph (1).
(3) The authority of the Secretary to issue Federal
guarantee instruments under this section for a qualified
infrastructure project shall expire on the date that is 2
years after the date on which the final certificate of public
convenience and necessity (including any Canadian
certificates of public convenience and necessity) is issued
for the project. A final certificate shall be considered to
have been issued when all certificates of public convenience
and necessity have been issued that are required for the
initial transportation of commercially economic quantities of
natural gas from Alaska to the continental United States.
(b) Conditions.--
(1) The Secretary may issue a Federal guarantee instrument
for a qualified infrastructure project only after a
certificate of public convenience and necessity under section
133(b) of this Act or an amended certificate under section 9
of the Alaska Natural Gas Transportation Act of 1976 (15
U.S.C. 719g) has been issued for the project.
(2) The Secretary may issue a Federal guarantee instrument
under this section for a qualified infrastructure project
only if the loan or other debt obligation guaranteed by the
instrument has been issued by an eligible lender.
(3) The Secretary shall not require as a condition of
issuing a Federal guarantee instrument under this section any
contractual commitment or other form of credit support of the
sponsors (other than equity contribution commitments and
completion guarantees), or any throughput or other guarantee
from prospective shippers greater than such guarantees as
shall be required by the project owners.
(c) Limitations on Amounts.--
(1) The amount of loans and other debt obligations
guaranteed under this section for a qualified infrastructure
project shall not exceed 80 percent of the total capital
costs of the project, including interest during construction.
(2) The principal amount of loans and other debt
obligations guaranteed under this section shall not exceed,
in the aggregate, $18,000,000,000, which amount shall be
indexed for United States dollar inflation from the date of
enactment of this Act, as measured by the Consumer Price
Index.
(d) Loan Terms and Fees.--
(1) The Secretary may issue Federal guarantee instruments
under this section that take into account repayment profiles
and grace periods justified by project cash flows and
project-specific considerations. The term of any loan
guaranteed under this section shall not exceed 30 years.
(2) An eligible lender may assess and collect from the
borrower such other fees and costs associated with the
application and origination of the loan or other debt
obligation as are reasonable and customary for a project
finance transaction in the oil and gas sector.
(e) Regulations.--The Secretary may issue regulations to
carry out this section.
(f) Authorization of Appropriations.--There are authorized
to be appropriated such sums as may be necessary to cover the
cost of loan guarantees, as defined by section 502(5) of the
Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)). Such
sums shall remain available until expended.
(g) Definitions.--In this section, the following
definitions apply:
(1) The term ``Consumer Price Index'' means the Consumer
Price Index for all-urban consumers, United States city
average, as published by the Bureau of Labor Statistics, or
if such index shall cease to be published, any successor
index or reasonable substitute thereof.
(2) The term ``eligible lender'' means any non-Federal
qualified institutional buyer (as defined by section
230.144A(a) of title 17, Code of Federal Regulations (or any
successor regulation), known as Rule 144A(a) of the
Securities and Exchange Commission and issued under the
Securities Act of 1933), including
(A) a qualified retirement plan (as defined in section
4974(c) of the Internal Revenue Code of 1986 (26 U.S.C.
4974(c)) that is a qualified institutional buyer; and
(B) a governmental plan (as defined in section 414(d) of
the Internal Revenue Code of 1986 (26 U.S.C. 414(d)) that is
a qualified institutional buyer.
(3) The term ``Federal guarantee instrument'' means any
guarantee or other pledge by the Secretary to pledge the full
faith and credit of the United States to pay all of the
principal and interest on any loan or other debt obligation
entered into by a holder of a certificate of public
convenience and necessity.
(4) The term ``qualified infrastructure project'' means an
Alaskan natural gas transportation project consisting of the
design, engineering, finance, construction, and completion of
pipelines and related transportation and production systems
(including gas treatment plants), and appurtenances thereto,
that are used to transport natural gas from the Alaska North
Slope to the continental United States.
(5) The term ``Secretary'' means the Secretary of Energy.

SEC. 145. SENSE OF CONGRESS ON NATURAL GAS DEMAND.

It is the sense of Congress that:
(1) North American demand for natural gas will increase
dramatically over the course of the next several decades.
(2) Both the Alaska Natural Gas Pipeline and the McKenzie
Delta Natural Gas project in Canada will be necessary to help
meet the increased demand for natural gas in North America.
(3) Federal and state officials should work together with
officials in Canada to ensure both projects can move forward
in a mutually beneficial fashion.
(4) Federal and state officials should acknowledge that the
smaller scope, fewer permitting requirements and lower cost
of the McKenzie Delta project means it will most likely be
completed before the Alaska Natural Gas Pipeline.
(5) Lower 48 and Canadian natural gas production alone will
not be able to meet all domestic demand in the coming
decades.
(6) As a result, natural gas delivered from Alaska's North
Slope will not displace or reduce the commercial viability of
Canadian natural gas produced from the McKenzie Delta nor
production from the Lower 48.

TITLE II--COAL

Subtitle A--Clean Coal Power Initiative

SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

There is authorized to be appropriated to the Secretary of
Energy (in this subtitle, referred to as ``Secretary'') to
carry out the activities authorized by this subtitle
$200,000,000 for each of the fiscal years 2003 through 2011,
to remain available until expended.

SEC. 202. PROJECT CRITERIA.

(a) In General.--The Secretary shall not provide funding
under this subtitle for any project that does not advance
efficiency, environmental performance, and cost
competitiveness well beyond the level of technologies that
are in operation or have been demonstrated as of the date of
the enactment of this Act.
(b) Technical Criteria for Gasification.--In allocating the
funds made available under section 201, the Secretary shall
ensure that at least 80 percent of the funds are used for
coal-based gasification technologies or coal-based projects
that include gasification combined cycle, gasification fuel
cells, gasification co-production, or hybrid gasification/
combustion. The Secretary shall set technical milestones
specifying emissions levels that coal gasification projects
must be designed to and reasonably expected to achieve. The
milestones shall get more restrictive through the life of the
program. The milestones shall be designed to achieve by 2020
coal gasification projects able to--
(1) remove 99 percent of sulfur dioxide;
(2) emit no more than .05 lbs of NO<inf>X</inf> per million
BTU;
(3) achieve substantial reductions in mercury emissions;
and
(4) achieve a thermal efficiency of--
(A) 60 percent for coal of more than 9,000 Btu;
(B) 59 percent for coal of 7,000 to 9,000 Btu; and
(C) 57 percent for coal of less than 7,000 Btu.
(c) Technical Criteria for Other Projects.--For projects
not described in subsection (b), the Secretary shall set
technical milestones specifying emissions levels that the
projects must be designed to and reasonably expected to
achieve. The milestones shall get more restrictive through
the life of the program. The milestones shall be designed to
achieve by 2010 projects able to--
(1) remove 97 percent of sulfur dioxide;
(2) emit no more than .08 lbs of NO<inf>X</inf> per million
BTU;
(3) achieve substantial reductions in mercury emissions;
and
(4) achieve a thermal efficiency of--
(A) 45 percent for coal of more than 9,000 Btu;
(B) 44 percent for coal of 7,000 to 9,000 Btu; and
(C) 42 percent for coal of less than 7,000 Btu.
(d) Existing Units.--In the case of projects at existing
units, in lieu of the thermal efficiency requirements set
forth in paragraphs (b)(4) and (c)(4), the projects shall be
designed to achieve an overall thermal design efficiency
improvement compared to the efficiency of the unit as
operated, of not less than--
(A) 7 percent for coal of more than 9,000 Btu;
(B) 6 percent for coal of 7,000 to 9,000 Btu; or
(C) 4 percent for coal of less than 7,000 Btu.
(e) Permitted Uses.--In allocating funds made available in
this section, the Secretary may allocate funds to projects
that include, as part of the project, the separation and
capture of carbon dioxide.
(f) Consultation.--Before setting the technical milestones
under subsections (b) and (c), the Secretary shall consult
with the Administrator of the Environmental Protection Agency
and interested entities, including

[[Page S5555]]

coal producers, industries using coal, organizations to
promote coal or advanced coal technologies, environmental
organizations, and organizations representing workers.
(g) Financial Criteria.--The Secretary shall not provide a
funding award under this title unless the recipient has
documented to the satisfaction of the Secretary that--
(1) the award recipient is financially viable without the
receipt of additional Federal funding;
(2) the recipient will provide sufficient information to
the Secretary for the Secretary to ensure that the award
funds are spent efficiently and effectively; and
(3) a market exists for the technology being demonstrated
or applied, as evidenced by statements of interest in writing
from potential purchasers of the technology.
(h) Financial Assistance.--The Secretary shall provide
financial assistance to projects that meet the requirements
of this section and are likely to--
(1) achieve overall cost reductions in the utilization of
coal to generate useful forms of energy;
(2) improve the competitiveness of coal among various forms
of energy; and
(3) demonstrate methods and equipment that are applicable
to 25 percent of the electricity generating facilities that
use coal as the primary feedstock as of the date of the
enactment of this Act.
(i) Federal Share.--The Federal share of the cost of a coal
or related technology project funded by the Secretary shall
not exceed 50 percent.
(j) Applicability.--No technology, or level of emission
reduction, shall be treated as adequately demonstrated for
purposes of section 111 of the Clean Air Act, achievable for
purposes of section 169 of that Act, or achievable in
practice for purposes of section 171 of that Act solely by
reason of the use of such technology, or the achievement of
such emission reduction, by one or more facilities receiving
assistance under this title.

SEC. 203. REPORTS.

(a) Ten-Year Plan.--By September 30, 2004, the Secretary
shall transmit to Congress a report, with respect to section
202(a), a 10-year plan containing--
(1) a detailed assessment of whether the aggregate funding
levels provided under section 201 are appropriate funding
levels for that program;
(2) a detailed description of how proposals will be
solicited and evaluated, including a list of all activities
expected to be undertaken;
(3) a detailed list of technical milestones for each coal
and related technology that will be pursued; and
(4) a detailed description of how the program will avoid
problems enumerated in General Accounting Office reports on
the Clean Coal Technology Program, including problems that
have resulted in unspent funds and projects that failed
either financially or scientifically.
(b) Technical Milestones.--Not later than 1 year after the
date of the enactment of this Act, and once every 2 years
thereafter through 2011, the Secretary, in consultation with
other appropriate Federal agencies, shall transmit to the
Congress, a report describing--
(1) the technical milestones set forth in section 212 and
how those milestones ensure progress toward meeting the
requirements of subsections (b) and (c) of section 212; and
(2) the status of projects funded under this title.

SEC. 204. CLEAN COAL CENTERS OF EXCELLENCE.

As part of the program authorized in section 211, the
Secretary shall award competitive, merit-based grants to
universities for the establishment of Centers of Excellence
for Energy Systems of the Future. The Secretary shall provide
grants to universities that can show the greatest potential
for advancing new clean coal technologies.

Subtitle B--Federal Coal Leases

SEC. 211. REPEAL OF THE 160-ACRE LIMITATION FOR COAL LEASES.

Section 3 of the Mineral Leasing Act (30 U.S.C. 203) is
amended by striking all the text in the first sentence after
``upon'' and inserting the following:

``a finding by the Secretary that it (1) would be in the
interest of the United States, (2) would not displace a
competitive interest in the lands, and (3) would not include
lands or deposits that can be developed as part of another
potential or existing operation, secure modifications of the
original coal lease by including additional coal lands or
coal deposits contiguous or cornering to those embraced in
such lease, but in no event shall the total area added by
such modifications to an existing coal lease exceed 320
acres, or add acreage larger than that in the original
lease.''.

SEC. 212. MINING PLANS.

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

SEC. 213. PAYMENT OF ADVANCE ROYALTIES UNDER COAL LEASES.

Section 7(b) of the Mineral Leasing Act of 1920 (30 U.S.C.
207(b)) is amended by striking all after ``Secretary).''
through to ``a lease.'' and inserting:

``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 twenty.
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 such lease to the extent that such
advance royalties have not been used to reduce production
royalties for a prior year.''.

SEC. 214. 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. 215. APPLICATION OF AMENDMENTS.

The amendments made by this Act apply with respect to any
coal lease issued on or after the date of enactment of this
Act, and, with respect to any coal lease issued before the
date of enactment of this Act, upon the date of readjustment
of the lease as provided for by section 7(a) of the Mineral
Leasing Act, or upon request by the lessee, prior to such
date.

SUBTITLE C--POWDER RIVER BASIN SHARED MINERAL ESTATES

SEC. 221. RESOLUTION OF FEDERAL RESOURCE DEVELOPMENT
CONFLICTS IN THE POWDER RIVER BASIN.

The Secretary of the Interior shall--
(1) undertake a review of existing authorities to resolve
conflicts between the development of Federal coal and the
development of Federal and non-Federal coalbed methane in the
Powder River Basin in Wyoming and Montana; and
(2) not later than 6 months after the enactment of this
Act, report to the Congress on alternatives to resolve these
conflicts and identification of a preferred alternative with
specific legislative language, if any, required to implement
the preferred alternative.

TITLE III--INDIAN ENERGY

SEC. 301. SHORT TITLE.

This title may be cited as the ``Indian Tribal Energy
Development and Self-Determination Act of 2003''.

SEC. 302. OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS.

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

``OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS

``Sec. 217. (a) Establishment.--There is established within
the Department an Office of Indian Energy Policy and Programs
(referred to in this section as the `Office'). The Office
shall be headed by a Director, who shall be appointed by the
Secretary and compensated at a rate equal to that of level IV
of the Executive Schedule under section 5315 of title 5,
United States Code.
``(b) Duties of Director.--The Director shall in accordance
with Federal policies promoting Indian self-determination and
the purposes of this Act, 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) electrify Indian tribal land and the homes of tribal
members.

``COMPREHENSIVE INDIAN ENERGY ACTIVITIES

``Sec. 218. (a) Indian Energy Education Planning and
Management Assistance.--
``(1) The Director shall establish programs within the
Office of Indian Energy Policy and Programs to assist Indian
tribes in meeting energy education, research and development,
planning, and management needs.
``(2) In carrying out this section, the Director may
provide grants, on a competitive basis, to an Indian tribe or
tribal consortium for use in carrying out--
``(A) energy, energy efficiency, and energy conservation
programs;
``(B) studies and other activities supporting tribal
acquisition of energy supplies, services, and facilities;
``(C) planning, construction, development, operation,
maintenance, and improvement of tribal electrical generation,
transmission, and distribution facilities located on Indian
land; and
``(D) development, construction, and interconnection of
electric power transmission facilities located on Indian land
with other electric transmission facilities.
``(3)(A) The Director may develop, in consultation with
Indian tribes, a formula for providing grants under this
section.
``(B) In providing a grant under this subsection, the
Director shall give priority to an application received from
an Indian tribe with inadequate electric service (as
determined by the Director).
``(4) The Secretary may promulgate such regulations as the
Secretary determines are necessary to carry out this
subsection.
``(5) There is authorized to be appropriated to carry out
this section $20,000,000 for each of fiscal years 2004
through 2011.
``(b) Loan Guarantee Program.--
``(1) Subject to paragraph (3), the Secretary may provide
loan guarantees (as defined in

[[Page S5556]]

section 502 of the Federal Credit Reform Act of 1990 (2
U.S.C. 661a)) for not more than 90 percent of the unpaid
principal and interest due on any loan made to any Indian
tribe for energy development.
``(2) A loan guaranteed under this subsection shall be made
by--
``(A) a financial institution subject to examination by the
Secretary; or
``(B) an Indian tribe, from funds of the Indian tribe.
``(3) The aggregate outstanding amount guaranteed by the
Secretary at any time under this subsection shall not exceed
$2,000,000,000.
``(4) The Secretary may promulgate such regulations as the
Secretary determines are necessary to carry out this
subsection.
``(5) There are authorized to be appropriated such sums as
are necessary to carry out this subsection, to remain
available until expended.
``(6) Not later than 1 year from the date of enactment of
this section, the Secretary shall report to the Congress on
the financing requirements of Indian tribes for energy
development on Indian land.
``(c) Indian Energy Preference.--
``(1) In purchasing electricity or any other energy product
or byproduct, a Federal agency or department may give
preference to an energy and resource production enterprise,
partnership, consortium, corporation, or other type of
business organization the majority of the interest in which
is owned and controlled by 1 or more Indian tribes.
``(2) In carrying out this subsection, a Federal agency or
department shall not--
``(A) pay more than the prevailing market price for an
energy product or byproduct; and
``(B) obtain less than prevailing market terms and
conditions.''.
(b) Conforming Amendments.--
(1) The table of contents of the Department of Energy
Organization Act (42 U.S.C. prec. 7101) is amended--
(A) in the item relating to section 209, by striking
``Section'' and inserting ``Sec.''; and
(B) by striking the items relating to sections 213 through
216 and inserting the following:
``Sec. 213. Establishment of policy for National Nuclear Security
Administration.
``Sec. 214. Establishment of security, counterintelligence, and
intelligence policies.
``Sec. 215. Office of Counterintelligence.
``Sec. 216. Office of Intelligence.
``Sec. 217. Office of Indian Energy Policy and Programs.
``Sec. 218. Comprehensive Indian Energy Activities.''.
(2) Section 5315 of title 5, United States Code, is amended
by inserting ``Director, Office of Indian Energy Policy and
Programs, Department of Energy.'' after ``Inspector General,
Department of Energy.''.

SEC. 303. INDIAN ENERGY.

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

``TITLE XXVI INDIAN ENERGY

``SEC. 2601. DEFINITIONS.

``For purposes of this title:
``(1) The term `Director' means the Director of the Office
of Indian Energy Policy and Programs.
``(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;
``(ii) by an Indian tribe, subject to restriction by the
United States against alienation; or
``(iii) by a dependent Indian community; and ``(C) land
conveyed to a Native Corporation under the Alaska Native
Claims Settlement Act (43 U.S.C. 1601 et seq.).
``(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;
``(C) a former reservation in the State of Oklahoma;
``(D) a parcel of land owned by a Native Corporation under
the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et
seq.); and
``(E) a dependent Indian community located within the
borders of the United States, regardless of whether the
community is located--
``(i) on original or acquired territory of the community;
or
``(ii) within or outside the boundaries of any particular
State.
``(4) The term `Indian tribe' has the meaning given the
term in section 4 of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450b).
``(5) 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).
``(6) 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.
``(7) The term `Program' means the Indian energy resource
development program established under section 2602(a).
``(8) The term `Secretary' means the Secretary of the
Interior.
``(9) The term `tribal consortium' means an organization
that consists of 2 or more entities, at least 1 of which is
an Indian tribe.
``(10) The term `tribal land' means any land or interests
in land owned by any Indian tribe, band, nation, pueblo,
community, rancheria, colony or other group, title to which
is held in trust by the United States or which is subject to
a restriction against alienation imposed by the United
States.
``(11) The term `vertical 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 facility), on or near Indian land to process,
refine, generate electricity from, or otherwise develop
energy resources on, Indian land.

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

``(a) In General.--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 Indian tribes and tribal consortia in achieving the
purposes of this title.
``(b) Grants and Loans.--In carrying out the Program, the
Secretary shall--
``(1) provide development grants to Indian tribes and
tribal consortia for use in developing or obtaining the
managerial and technical capacity needed to develop energy
resources on Indian land;
``(2) provide grants to Indian tribes and tribal consortia
for use in carrying out projects to promote the vertical
integration of energy resources, and to process, use, or
develop those energy resources, on Indian land; and
``(3) provide low-interest loans to Indian tribes and
tribal consortia for use in the promotion of energy resource
development and vertical integration or energy resources on
Indian land.
``(c) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section such
sums as are necessary for each of fiscal years 2004 through
2014.

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

``(a) Grants.--The Secretary may provide to Indian tribes
and tribal consortia, on an annual basis, grants for use in
developing, administering, implementing, and enforcing tribal
laws (including regulations) governing the development and
management of energy resources on Indian land.
``(b) Use of Funds.--Funds from a grant provided under this
section may be used by an Indian tribe or tribal consortium
for--
``(1) the development of a tribal energy resource inventory
or tribal energy resource on Indian land;
``(2) the development of a feasibility study or other
report necessary to the development of energy resources on
Indian land;
``(3) the development and enforcement of tribal laws and
the development of technical infrastructure to protect the
environment under applicable law; or
``(4) 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.--To the maximum extent practicable,
the Secretary and the Secretary of Energy shall make
available to Indian tribes and tribal consortia scientific
and technical data for use in the development and management
of energy resources on Indian land.

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

``(a) Leases and Agreements.--Subject to the provisions of
this section--
``(1) an Indian tribe may, at its discretion, enter into a
lease or business agreement for the purpose of energy
development, including a lease or business agreement for--
``(A) exploration for, extraction of, processing of, or
other development of energy resources on tribal land; and
``(B) construction or operation of an electric generation,
transmission, or distribution facility located on tribal
land; or a facility to process or refine energy resources
developed on tribal land; and
``(2) a lease or business agreement described in paragraph
(1) shall not require the approval of the Secretary under
section 2103 of the Revised Statutes (25 U.S.C. 81) or any
other provision of law, if--
``(A) the lease or business agreement is executed in
accordance with 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 and
gas resources, 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 an annual trust asset
evaluation of the activities of the Indian tribe conducted in
accordance with the agreement).
``(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

[[Page S5557]]

electric transmission or distribution line without specific
approval by the Secretary if--
``(1) the right-of-way is executed in accordance with a
tribal energy resource agreement approved by the Secretary
under subsection (e);
``(2) the term of the right-of-way does not exceed 30
years;
``(3) the pipeline or electric transmission or distribution
line serves--
``(A) an electric generation, transmission, or distribution
facility located on tribal land; or
``(B) a facility located on tribal land that processes or
refines energy resources developed on tribal land; and
``(4) the Indian tribe has entered into a tribal energy
resource agreement with the Secretary, as described in
subsection (e), relating to the development of energy
resources on tribal land (including an annual trust asset
evaluation of the activities of the Indian tribe conducted in
accordance with the agreement.
``(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 under this section shall be valid unless the lease,
business agreement, or right-of-way is authorized in
accordance with tribal energy resource agreements approved by
the Secretary under subsection (e).
``(e) Tribal Energy Resource Agreements.--
``(1) On promulgation of regulations under paragraph (9),
an Indian tribe may submit to the Secretary for approval a
tribal energy resource agreement governing leases, business
agreements, and rights-of-way under this section.
``(2)(A) Not later than 180 days after the date on which
the Secretary receives a tribal energy resource agreement
submitted by an Indian tribe under paragraph (1) (or such
later date as may be agreed to by the Secretary and the
Indian tribe), the Secretary shall approve or disapprove the
tribal energy resource agreement.
``(B) The Secretary shall approve a tribal energy resource
agreement submitted under paragraph (1) if--
``(i) the Secretary determines that the Indian tribe has
demonstrated that the Indian tribe has sufficient capacity to
regulate the development of energy resources of the Indian
tribe; and
``(ii) 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 consideration for the lease, business
agreement, or right-of-way;
``(III) address amendments and renewals;
``(IV) address consideration for the lease, business
agreement, or right-of-way;
``(V) address technical or other relevant requirements;
``(VI) establish requirements for environmental review in
accordance with subparagraph (C);
``(VII) ensure compliance with all applicable environmental
laws;
``(VIII) identify final approval authority;
``(IX) provide for public notification of final approvals;
``(X) establish a process for consultation with any
affected States concerning potential off-reservation impacts
associated with the lease, business agreement, or right-of-
way; and
``(XI) describe the remedies for breach of the lease,
agreement, or right-of-way.
``(C) Tribal energy resource agreements submitted under
paragraph (1) shall establish, and include provisions to
ensure compliance with, an environmental review process that,
with respect to a lease, business agreement, or right-of-way
under this section, provides for--
``(i) the identification and evaluation of all significant
environmental impacts (as compared with a no-action
alternative), including effects on cultural resources;
``(ii) the identification of proposed mitigation;
``(iii) a process for ensuring that the public is informed
of and has an opportunity to comment on any proposed lease,
business agreement, or right-of-way before tribal approval of
the lease, business agreement, or right-of-way (or any
amendment to or renewal of the lease, business agreement, or
right-of-way); and
``(iv) sufficient administrative support and technical
capability to carry out the environmental review process.
``(D) A tribal energy resource agreement negotiated between
the Secretary and an Indian tribe in accordance with this
subsection shall include--
``(i) provisions requiring the Secretary to conduct an
annual trust asset evaluation to monitor the performance of
the activities of the Indian tribe associated with the
development of energy resources on tribal land by the Indian
tribe; and
``(ii) in the case of a finding by the Secretary of
imminent jeopardy to a physical trust asset, provisions
authorizing the Secretary to reassume responsibility for
activities associated with the development of energy
resources on tribal land.
``(3) The Secretary shall provide notice and opportunity
for public comment on tribal energy resource agreements
submitted under paragraph (1).
``(4) If the Secretary disapproves a tribal energy resource
agreement submitted by an Indian tribe under paragraph (1),
the Secretary shall--
``(A) notify the Indian tribe in writing of the basis for
the disapproval;
``(B) identify what changes or other actions are required
to address the concerns of the Secretary; and
``(C) provide the Indian tribe with an opportunity to
revise and resubmit the tribal energy resource agreement.
``(5) If an Indian tribe executes a lease or business
agreement or grants a right-of-way in accordance with a
tribal energy resource agreement approved under this
subsection, the Indian tribe shall, in accordance with the
process and requirements set forth in the Secretary's
regulations adopted pursuant to subsection (e)(9), provide to
the Secretary--
``(A) a copy of the lease, business agreement, or right-of-
way document (including all amendments to and renewals of the
document); and
``(B) in the case of a tribal energy resource agreement or
a lease, business agreement, or right-of-way that permits
payment to be made directly to the Indian tribe,
documentation of those payments sufficient to enable the
Secretary to discharge the trust responsibility of the United
States as appropriate under applicable law.
``(6) The Secretary shall continue to have a trust
obligation to ensure that the rights of an Indian tribe are
protected in the event of a violation of the terms of any
lease, business agreement or right-of-way by any other party
to the lease, business agreement, or right-of-way.
``(7)(A) The United States shall not be liable for any loss
or injury sustained by any party (including an Indian tribe
or any member of an Indian tribe) to a lease, business
agreement, or right-of-way executed in accordance with tribal
energy resource agreements approved under this subsection.
``(B) On approval of a tribal energy resource agreement of
an Indian tribe under paragraph (1), the Indian tribe shall
be stopped from asserting a claim against the United States
on the ground that Secretary should not have approved the
Tribal energy resource agreement.
``(8)(A) In this paragraph, the term `interested party'
means any person or entity the interests of which have
sustained or will sustain a significant adverse impact as a
result of the failure of an Indian tribe to comply with a
tribal energy resource agreement of the Indian tribe approved
by the Secretary under paragraph (2).
``(B) After exhaustion of tribal remedies, and in
accordance with the process and requirements set forth in
regulations adopted by the Secretary pursuant to subsection
(e)(9), an interested party may submit to the Secretary a
petition to review compliance of an Indian tribe with a
tribal energy resource agreement of the Indian tribe approved
under this subsection.
``(C) If the Secretary determines that an Indian tribe is
not in compliance with a tribal energy resource agreement
approved under this subsection, the Secretary shall take such
action as is necessary to compel compliance, including--
``(i) suspending a lease, business agreement, or right-of-
way under this section until an Indian tribe is in compliance
with the approved tribal energy resource agreement; and
``(ii) rescinding approval of the tribal energy resource
agreement and reassuming the responsibility for approval of
any future leases, business agreements, or rights-of-way
associated with an energy pipeline or distribution line
described in subsections (a) and (b).
``(D) If the Secretary seeks to compel compliance of an
Indian tribe with an approved tribal energy resource
agreement under subparagraph (C)(ii), the Secretary shall--
``(i) make a written determination that describes the
manner in which the tribal energy resource agreement has been
violated;
``(ii) provide the Indian tribe with a written notice of
the violation together with the written determination; and
``(iii) before taking any action described in subparagraph
(C)(ii) or seeking any other remedy, provide the Indian tribe
with a hearing and a reasonable opportunity to attain
compliance with the tribal energy resource agreement.
``(E)(i) An Indian tribe described in subparagraph (D)
shall retain all rights to appeal as provided in regulations
promulgated by the Secretary.
``(ii) The decision of the Secretary with respect to an
appeal described in clause (i), after any agency appeal
provided for by regulation, shall constitute a final agency
action.
``(9) Not later than 180 days after the date of enactment
of the Indian Tribal Energy Development and Self-
Determination Act of 2003, the Secretary shall promulgate
regulations that implement the provisions of this subsection,
including--
``(A) criteria to be used in determining the capacity of an
Indian tribe described in paragraph (2)(B)(i), including the
experience of the Indian tribe in managing natural resources
and financial and administrative resources available for use
by the Indian tribe in implementing the approved tribal
energy resource agreement of the Indian tribe; and
``(B) a process and requirements in accordance with which
an Indian tribe may--

[[Page S5558]]

``(i) voluntarily rescind an approved tribal energy
resource agreement approved by the Secretary under this
subsection; and
``(ii) return to the Secretary the responsibility to
approve any future leases, business agreements, and rights-
of-way described in this subsection.
``(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.).

``SEC. 2605. FEDERAL POWER MARKETING ADMINISTRATIONS.

``(a) Definitions.--In this section:
``(1) The term `Administrator' means the Administrator of
the Bonneville Power Administration and the Administrator of
the Western Area Power Administration.
``(2) The term `power marketing administration' means--
``(A) the Bonneville Power Administration;
``(B) the Western Area Power Administration; and
``(C) any other power administration the power allocation
of which is used by or for the benefit of an Indian tribe
located in the service area of the administration.
``(b) Encouragement of Indian Tribal Energy Development.--
Each Administrator shall encourage Indian tribal energy
development by taking such actions as are appropriate,
including administration of programs of the Bonneville Power
Administration and the Western Area Power Administration, in
accordance with this section.
``(c) Action by the Administrator.--In carrying out this
section, and in accordance with existing law--
``(1) each Administrator shall consider the unique
relationship that exists between the United States and Indian
tribes.
``(2) power allocations from the Western Area Power
Administration to Indian tribes may be used to meet firming
and reserve needs of Indian-owned energy projects on Indian
land;
``(3) the Administrator of the Western Area Power
Administration may purchase power from Indian tribes to meet
the firming and reserve requirements of the Western Area
Power Administration; and
``(4) each Administrator shall not pay more than the
prevailing market price for an energy product nor obtain less
than prevailing market terms and conditions.
``(d) Assistance for Transmission System Use.--
``(1) An Administrator may provide technical assistance to
Indian tribes seeking to use the high-voltage transmission
system for delivery of electric power.
``(2) The costs of technical assistance provided under
paragraph (1) shall be funded by the Secretary of Energy
using nonreimbursable funds appropriated for that purpose, or
by the applicable Indian tribes.
``(e) Power Allocation Study.--Not later than 2 years after
the date of enactment of the Indian Tribal Energy Development
and Self-Determination Act of 2003, the Secretary of Energy
shall submit to the Congress a report that--
``(1) describes the use by Indian tribes of Federal power
allocations of the Western Area Power Administration (or
power sold by the Southwestern Power Administration) and the
Bonneville Power Administration to or for the benefit of
Indian tribes in service areas of those administrations; and
``(2) identifies--
``(A) the quantity of power allocated to Indian tribes by
the Western Area Power Administration;
``(B) the quantity of power sold to Indian tribes by other
power marketing administrations; and
``(C) barriers that impede tribal access to and use of
Federal power, including an assessment of opportunities to
remove those barriers and improve the ability of power
marketing administrations to facilitate the use of Federal
power by Indian tribes.
``(f) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $750,000, which
shall remain available until expended and shall not be
reimbursable.

``SEC. 2606. INDIAN MINERAL DEVELOPMENT REVIEW.

``(a) In General.--The Secretary shall conduct a review of
all activities being conducted under the Indian Mineral
Development Act of 1982 (25 U.S.C. 2101 et seq.) as of that
date.
``(b) Report.--Not later than 1 year after the date of
enactment of the Indian Tribal Energy Development and Self-
Determination Act of 2003, the Secretary shall submit to the
Congress a report that includes--
``(1) the results of the review;
``(2) recommendations to ensure that Indian tribes have the
opportunity to develop Indian energy resources; and
``(3) an analysis of the barriers to the development of
energy resources on Indian land (including legal, fiscal,
market, and other barriers), along with recommendations for
the removal of those barriers.

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

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

SEC. 304. FOUR CORNERS TRANSMISSION LINE PROJECT.

The Dine Power Authority, an enterprise of the Navajo
Nation, shall be eligible to receive grants and other
assistance as authorized by section 302 of this title and
section 2602 of the Energy Policy Act of 1992, as amended by
this title, for activities associated with the development of
a transmission line from the Four Corners Area to southern
Nevada, including related power generation opportunities.

SEC. 305. ENERGY EFFICIENCY IN FEDERALLY ASSISTED HOUSING.

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

SEC. 306. CONSULTATION WITH INDIAN TRIBES.

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

TITLE IV--NUCLEAR MATTERS

Subtitle A--Price-Anderson Act Amendments

SEC. 401. SHORT TITLE.

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

SEC. 402. EXTENSION OF INDEMNIFICATION AUTHORITY.

(a) Indemnification of Nuclear Regulatory Commission
Licensees.--Section 170c. 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'';
(2) by striking ``licenses issued between August 30, 1954,
and December 31, 2003'' and inserting ``licenses issued after
August 30, 1954''; and
(3) by striking ``With respect to any production or
utilization facility for which a construction permit is
issued between August 30, 1954, and December 31, 2003, the
requirements of this subsection shall apply to any license
issued for such facility subsequent to December 31, 2003.''
(b) Indemnification of Department of Energy Contractors.--
Section 170d.(1)(A) of

[[Page S5559]]

the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)(1)(A)) is
amended by striking ``, until December 31, 2004,''.
(c) Indemnification of Nonprofit Educational
Institutions.--Section 170k.of the Atomic Energy Act of 1954
(42 U.S.C. 2210(k)) is amended--
(1) by striking ``licenses issued between August 30, 1954,
and August 1, 2002'' and replacing it with ``licenses issued
after August 30, 1954''; and
(2) by striking ``With respect to any production or
utilization facility for which a construction permit is
issued between August 30, 1954, and August 1, 2002, the
requirements of this subsection shall apply to any license
issued for such facility subsequent to August 1, 2002.''

SEC. 403. 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
``$94,000,000''; and
(B) by striking ``$10,000,000 in any 1 year'' and inserting
``$15,000,000 in any 1 year (subject to adjustment for
inflation under subsection t.)''; and
(2) in subsection t.(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 ``July 1,
2003''; and
(C) by striking ``such date of enactment'' and inserting
``July 1, 2003''.

SEC. 404. DEPARTMENT OF ENERGY LIABILITY LIMIT.

(a) Indemnification of Department of Energy Contractors.--
Section 170d. 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 170d. of the Atomic
Energy Act of 1954 (42 U.S.C. 2210(d)) is further amended by
striking paragraph (3) and inserting the following--
``(3) All agreements of indemnification under which the
Department of Energy (or its predecessor agencies) may be
required to indemnify any person under this section shall be
deemed to be amended, on the date of enactment of the Price-
Anderson Amendments Act of 2003, to reflect the amount of
indemnity for public liability and any applicable financial
protection required of the contractor under this
subsection.''.
(c) Liability Limit.--Section 170e.(1)(B) of the Atomic
Energy Act of 1954 (42 U.S.C. 2210(e)(1)(B)) is amended by:
(1) striking ``the maximum amount of financial protection
required under subsection b. or''; and
(2) striking ``paragraph (3) of subsection d., whichever
amount is more'' and inserting ``paragraph (2) of subsection
d.''.

SEC. 405. INCIDENTS OUTSIDE THE UNITED STATES.

(a) Amount of Indemnification.--Section 170d.(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 170e.(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. 406. REPORTS.

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

SEC. 407. INFLATION ADJUSTMENT.

Section 170t. of the Atomic Energy Act of 1954 (42 U.S.C.
2210(t)) is amended--
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by adding after paragraph (1) the following:
``(2) The Secretary shall adjust the amount of
indemnification provided under an agreement of
indemnification under subsection d. not less than once during
each 5-year period following July 1, 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. 408. TREATMENT OF MODULAR REACTORS.

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

SEC. 409. APPLICABILITY.

The amendments made by sections 403, 404, and 405 do not
apply to a nuclear incident that occurs before the date of
the enactment of this Act.

SEC. 410. CIVIL PENALTIES.

(a) Repeal of Automatic Remission.--Section 234Ab.(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 one-year
period (as determined by the Secretary) under the contract
under which the violation occurs.
``(2) For purposes of this section, the term ``not-for-
profit'' means that no part of the net earnings of the
contractor, subcontractor, or supplier inures to the benefit
of any natural person or for-profit artificial person.''.
(c) Effective Date.--The amendments made by this section
shall not apply to any violation of the Atomic Energy Act of
1954 occurring under a contract entered into before the date
of enactment of this section.

Subtitle B--Deployment of New Nuclear Plants

SEC. 421. SHORT TITLE.

This subtitle may be cited as the ``Nuclear Energy Finance
Act of 2003.''

SEC. 422. DEFINITIONS.

For purposes of this subtitle:
(1) The term ``advanced reactor design'' means a nuclear
reactor that enhances safety, efficiency, proliferation
resistance, or waste reduction compared to commercial nuclear
reactors in use in the United States on the date of enactment
of this Act.
(2) The term ``eligible project costs'' means all costs
incurred by a project developer that are reasonably related
to the development and construction of a project under this
subtitle, including costs resulting from regulatory or
licensing delays.
(3) The term ``financial assistance'' means a loan
guarantee, purchase agreement, or any combination of the
foregoing.
(4) The term ``loan guarantee'' means any guarantee or
other pledge by the Secretary to pay all or part of the
principal and interest on a loan or other debt obligation
issued by a project developer and funded by a lender.
(5) The term ``project'' means any commercial nuclear power
facility for the production of electricity that uses one or
more advanced reactor designs.
(6) The term ``project developer'' means an individual,
corporation, partnership, joint venture, trust, or other
entity that is primarily liable for payment of a project's
eligible costs.
(7) The term ``purchase agreement'' means a contract to
purchase the electric energy produced by a project under this
subtitle.
(8) The term ``Secretary'' means the Secretary of Energy.

SEC. 423. RESPONSIBILITIES OF THE SECRETARY.

(a) Financial Assistance.--Subject to the requirements of
the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.),
the Secretary may, subject to appropriations, make available
to project developers for eligible project costs such
financial assistance as the Secretary determines is necessary
to supplement private-sector financing for projects if he
determines that such projects are needed to contribute to
energy security, fuel or technology diversity, or clean air
attainment goals. The Secretary shall prescribe such terms
and conditions for financial assistance as the Secretary
deems necessary or appropriate to protect the financial
interests of the United States.
(b) Requirements.--Approval criteria for financial
assistance shall include--
(1) the creditworthiness of the project;
(2) the extent to which financial assistance would
encourage public-private partnerships and attract private-
sector investment;
(3) the likelihood that financial assistance would hasten
commencement of the project; and,
(4) any other criteria the Secretary deems necessary or
appropriate.
(c) Confidentiality.--The Secretary shall protect the
confidentiality of any information that is certified by a
project developer to be commercially sensitive.
(d) Full Faith and Credit.--All financial assistance
provided by the Secretary under this subtitle shall be
general obligations of the United States backed by its full
faith and credit.

SEC. 424. LIMITATIONS.

(a) Financial Assistance.--The total financial assistance
per project provided by this subtitle shall not exceed fifty
percent of eligible project costs.
(b) Generation.--The total electrical generation capacity
of all projects provided by this subtitle shall not exceed
8,400 megawatts.

SEC. 425. REGULATIONS.

Not later than 12 months from the date of enactment of this
Act, the Secretary shall issue regulations to implement this
subtitle.

[[Page S5560]]

Subtitle C--Advanced Reactor Hydrogen

Co-Generation Project

SEC. 431. PROJECT ESTABLISHMENT.

The Secretary is directed to establish an Advanced Reactor
Hydrogen Co-Generation Project.

SEC. 432. PROJECT DEFINITION.

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

SEC. 433. PROJECT MANAGEMENT.

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

SEC. 434. PROJECT REQUIREMENTS.

(a) Research and Development.--The project shall include
planning, research and development, design, and construction
of an advanced, next-generation, nuclear energy system
suitable for enabling further research and development on
advanced reactor technologies and alternative approaches for
reactor-based generation of hydrogen.
(1) The project shall utilize, where appropriate, extensive
reactor test capabilities resident at INEEL.
(2) The project shall be designed to explore technical,
environmental, and economic feasibility of alternative
approaches for reactor-based hydrogen production.
(3) The industrial lead for the project must be a United
States-based company.
(b) International Collaboration.--The Secretary shall seek
international cooperation, participation, and financial
contribution in this program.
(1) The project may contract for assistance from
specialists or facilities from member countries of the
Generation IV International Forum, the Russian Federation, or
other international partners where such specialists or
facilities provide access to cost-effective and relevant
skills or test capabilities.
(2) International activities shall be coordinated with the
Generation IV International Forum.
(3) The Secretary may combine this project with the
Generation IV Nuclear Energy Systems Program.
(c) Demonstration.--The overall project, which may involve
demonstration of selected project objectives in a partner
nation, must demonstrate both electricity and hydrogen
production and may provide flexibility, where technically and
economically feasible in the design and construction, to
enable tests of alternative reactor core and cooling
configurations.
(d) Partnerships.--The Secretary shall establish cost-
shared partnerships with domestic industry or international
participants for the research, development, design,
construction and operation of the demonstration facility, and
preference in determining the final project structure shall
be given to an overall project which retains United States
leadership while maximizing cost sharing opportunities and
minimizing federal funding responsibilities.
(e) Target Date.--The Secretary shall select technologies
and develop the project to provide initial testing of either
hydrogen production or electricity generation by 2010 or
provide a report to Congress why this date is not feasible.
(f) Waiver of Construction Timelines.--The Secretary is
authorized to conduct the Advanced Reactor Hydrogen Co-
Generation Project without the constraints of DOE Order 413.3
as deemed necessary to meet the specified operational date.
(g) Competition.--The Secretary may fund up to two teams
for up to one year to develop detailed proposals for
competitive evaluation and selection of a single proposal and
concept for further progress. The Secretary shall define the
format of the competitive evaluation of proposals.
(h) Use of Facilities.--Research facilities in industry,
national laboratories, or universities either within the
United States or with cooperating international partners may
be used to develop the enabling technologies for the
demonstration facility. Utilization of domestic university-
based testbeds shall be encouraged to provide educational
opportunities for student development.
(i) Role of Nuclear Regulatory Commission.--The Secretary
shall seek active participation of the Nuclear Regulatory
Commission throughout the project to develop risk-based
criteria for any future commercial development of a similar
reactor architecture.
(j) Report.--A comprehensive project plan shall be
developed no later than April 30, 2004. The project plan
shall be updated annually with each annual budget submission.

SEC. 435. AUTHORIZATION OF APPROPRIATIONS.

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

Subtitle D--Miscellaneous Matters

SEC. 441. URANIUM SALES AND TRANSFERS.

Section 3112 of the USEC Privatization Act (42 U.S.C.
2297h-10) is amended by striking subsections (d) and (e) and
inserting the following:
``(d)(1)(A) The aggregate annual deliveries of uranium in
any form (including natural uranium concentrates, natural
uranium hexafluoride, enriched uranium, and depleted uranium)
sold or transferred for commercial nuclear power end uses by
the United States Government shall not exceed 3,000,000
pounds U<inf>3</inf>O<inf>8</inf> equivalent per year through
calendar year 2009. Such aggregate annual deliveries shall
not exceed 5,000,000 pounds U<inf>3</inf>O<inf>8</inf>
equivalent per year in calendar years 2010 and 2011. Such
aggregate annual deliveries shall not exceed 7,000,000 pounds
U<inf>3</inf>O<inf>8</inf> equivalent in calendar year 2012.
Such aggregate annual deliveries shall not exceed 10,000,000
pounds U<inf>3</inf>O<inf>8</inf> equivalent per year in
calendar year 2013 and each year thereafter. Any sales or
transfers by the United States Government to commercial end
users shall be limited to long-term contracts of no less than
3 years duration.
``(B) The recovery and extraction of the uranium component
from contaminated uranium bearing materials from United
States Government sites by commercial entities shall be the
preferred method of making uranium available under this
subsection. The uranium component contained in such
contaminated materials shall be counted against the annual
maximum deliveries set forth in this section, provided that
uranium is sold to end users.
``(C) Sales or transfers of uranium by the United States
Government for the following purposes are exempt from the
provisions of this paragraph--
``(i) sales or transfers provided for under existing law
for use by the Tennessee Valley Authority in relation to the
Department of Energy's high-enriched uranium or tritium
programs;
``(ii) sales or transfers to the Department of Energy
research reactor sales program;
``(iii) the transfer of up to 3,293 metric tons of uranium
to the United States Enrichment Corporation to replace
uranium that the Secretary transferred, prior to
privatization of the United States Enrichment Corporation in
July 1998, to the Corporation on or about June 30, 1993,
April 20, 1998, and May 18, 1998, and that does not meet
commercial specifications;
``(iv) the sale or transfer of any uranium for emergency
purposes in the event of a disruption in supply to end users
in the United States;
``(v) the sale or transfer of any uranium in fulfillment of
the United States Government's obligations to provide
security of supply with respect to implementation of the
Russian HEU Agreement; and
``(vi) the sale or transfer of any enriched uranium for use
in an advanced commercial nuclear power plant in the United
States with nonstandard fuel requirements.
``(D) The Secretary may transfer or sell enriched uranium
to any person for national security purposes, as determined
by the Secretary.
``(2) Except as provided in subsections (b) and (c), and in
paragraph (1)(B), clauses (i) through (iii) of paragraph
(1)(C), and paragraph (1)(D) of this subsection, no sale or
transfer of uranium in any form shall be made by the United
States Government unless--
``(A) the President determines that the material is not
necessary for national security needs;
``(B) the price paid to the Secretary, if the transaction
is a sale, will not be less than the fair market value of the
material, as determined at the time that such material is
contracted for sale;
``(C) prior to any sale or transfer, the Secretary solicits
the written views of the Department of State and the National
Security Council with regard to whether such sale or transfer
would have any adverse effect on national security interests
of the United States, including interests related to the
implementation of the Russian HEU Agreement; and
``(D) neither the Department of State nor the National
Security Council objects to such sale or transfer.
The Secretary shall endeavor to determine whether a sale or
transfer is permitted under this paragraph within 30 days.
The Secretary's determinations pursuant to this paragraph
shall be made available to interested members of the public
prior to authorizing any such sale or transfer.

[[Page S5561]]

``(3) Within 1 year after the date of enactment of this
subsection and annually thereafter the Secretary shall
undertake an assessment for the purpose of reviewing
available excess Government uranium inventories, and
determining, consistent with the procedures and limitations
established in this subsection, the level of inventory to be
sold or transferred to end users.
``(4) Within 5 years after the date of enactment of this
subsection and biennially thereafter the Secretary shall
report to the Congress on the implementation of this
subsection. The report shall include a discussion of all
sales or transfers made by the United States Government, the
impact of such sales or transfers on the domestic uranium
industry, the spot market uranium price, and the national
security interests of the United States, and any steps taken
to remediate any adverse impacts of such sales or transfers.
``(5) For purposes of this subsection, the term `United
States Government' does not include the Tennessee Valley
Authority.''.

SEC. 442. DECOMMISSIONING PILOT PROGRAM.

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

TITLE V--RENEWABLE ENERGY

Subtitle A--General Provisions

SEC. 501. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.

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

SEC. 502. RENEWABLE ENERGY PRODUCTION INCENTIVE.

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

SEC. 503. RENEWABLE ENERGY ON FEDERAL LANDS.

(a) Report.--Within 24 months after the date of enactment
of this Act, the Secretary of the Interior, in cooperation
with the Secretary of Agriculture, shall develop and report
to the Congress recommendations on opportunities to develop
renewable energy on public lands under the jurisdiction of
the Secretary of the Interior and National Forest System
lands under the jurisdiction of the Secretary of Agriculture.
The report shall include--
(1) 5-year plans developed by the Secretary of the Interior
and the Secretary of Agriculture, respectively, for
encouraging the development of renewable energy consistent
with applicable law and management plans; and
(2) an analysis of--
(A) the use of rights-of-way, leases, or other methods to
develop renewable energy on such lands;
(B) the anticipated benefits of grants, loans, tax credits,
or other provisions to promote renewable energy development
on such lands; and
(C) any issues that the Secretary of the Interior or the
Secretary of Agriculture have encountered in managing
renewable energy projects on such lands, or believe are
likely to arise in relation to the development of renewable
energy on such lands;
(3) a list, developed in consultation with the Secretary of
Energy and the Secretary of Defense, of lands under the
jurisdiction of the Department of Energy or Defense that
would be suitable for development for renewable energy, and
any recommended statutory and regulatory mechanisms for such
development; and
(4) any recommendations pertaining to the issues addressed
in the report.
(b) National Academy of Sciences Study.--
(1) Not later than 90 days after the date of the enactment
of this section, the Secretary of the Interior shall contract
with the National Academy of Sciences to--
(A) study the potential for the development of wind, solar,
and ocean (tidal and thermal) energy on the Outer Continental
Shelf;
(B) assess existing Federal authorities for the development
of such resources; and
(C) recommend statutory and regulatory mechanisms for such
development.
(2) The results of the study shall be transmitted to the
Congress within 24 months after the date of the enactment of
this section.

SEC. 504. FEDERAL PURCHASE REQUIREMENT.

(a) Requirement.--The President, acting through the
Secretary of Energy, shall seek to ensure that, to the extent
economically feasible and technically practicable, of the
total amount of electric energy the Federal Government
consumes during any fiscal year, the following amounts shall
be renewable energy--
(1) not less than 3 percent in fiscal years 2005 through
2007,
(2) not less than 5 percent in fiscal years 2008 through
2010, and
(3) not less than 7.5 percent in fiscal year 2011 and each
fiscal year thereafter.
(b) Definition.--For purposes of this section--
(1) the term ``biomass'' means any solid, nonhazardous,
cellulosic material that is derived from--
(A) any of the following forest-related resources: mill
residues, precommercial thinnings, slash, and brush, or
nonmerchantable material;
(B) solid wood waste materials, including waste pallets,
crates, dunnage, manufacturing and construction wood wastes
(other than pressure-treated, chemically-treated, or painted
wood wastes), and landscape or right-of-way tree trimmings,
but not including municipal solid waste (garbage), gas
derived from the biodegradation of solid waste, or paper that
is commonly recycled; or
(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) the term ``renewable energy'' means electric energy
generated from solar, wind, biomass, geothermal, municipal
solid waste, or new hydroelectric generation capacity
achieved from increased efficiency or additions of new
capacity at an existing hydroelectric project.
(c) Calculation.--For purposes of determining compliance
with the requirement of this section, the amount of renewable
energy shall be doubled if--
(1) the renewable energy is produced and used on-site at a
Federal facility;
(2) the renewable energy is produced on Federal lands and
used at a Federal facility; or

[[Page S5562]]

(3) the renewable energy is produced on Indian land as
defined in Title XXVI of the Energy Policy Act of 1992 (25
U.S.C. 3501 et seq.) and used at a Federal facility.
(d) Report.--Not later than April 15, 2005, and every 2
years thereafter, the Secretary of Energy shall provide a
report to the Congress on the progress of the Federal
Government in meeting the goals established by this section.

SEC. 505. INSULAR AREA RENEWABLE AND ENERGY EFFICIENCY PLANS.

The Secretary of Energy shall update the energy surveys,
estimates, and assessments for the insular areas of Puerto
Rico, the Virgin Islands, Guam, American Samoa, the
Commonwealth of the Northern Mariana Islands, the Republic of
the Marshall Islands, the Federated States of Micronesia, and
the Republic of Palau undertaken pursuant to section 604 of
Public Law 96-597 (48 U.S.C. 1492) and revise the
comprehensive energy plan for the insular areas to reduce
reliance on energy imports and increase use of renewable
energy resources and energy efficiency opportunities. The
update and revision shall by undertaken in consultation with
the Secretary of the Interior and the chief executive officer
of each insular area and shall be completed and submitted to
Congress and to the chief executive officer of each insular
area by December 31, 2005.

Subtitle B--Hydroelectric Licensing

SEC. 511. ALTERNATIVE CONDITIONS AND FISHWAYS.

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

``SEC. 33. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS.

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

Subtitle C--Geothermal Energy

SEC. 521. COMPETITIVE LEASE SALE REQUIREMENTS.

(a) In General.--Section 4 of the Geothermal Steam Act of
1970 (30 U.S.C. 1003) is amended by striking the text and
inserting the following:
``(a) Nominations.--The Secretary shall accept nominations
at any time from companies and individuals of lands to be
leased under this Act.
``(b) Competitive Lease Sale Required.--The Secretary shall
hold a competitive lease sale at least once every 2 years for
lands in a State in which there are nominations pending under
subsection (a) where such lands are otherwise available for
leasing.
``(c) Noncompetitive Leasing.--The Secretary shall make
available for a period of 2 years for noncompetitive leasing
any tract for which a competitive lease sale is held, but for
which the Secretary does not receive any bids in the
competitive lease sale.''.
(b) Pending Lease Applications.--It shall be a priority for
the Secretary of the Interior and, with respect to National
Forest lands, the Secretary of Agriculture, to ensure timely
completion of administrative actions necessary to conduct
competitive lease sales for lands with pending applications
for geothermal leasing as of the date of enactment of this
section where such lands are otherwise available for leasing.

SEC. 522. GEOTHERMAL LEASING AND PERMITTING ON FEDERAL LANDS.

(a) In General.--Not later than 180 days after the date of
the enactment of this section, the Secretary of the Interior
and the Secretary of Agriculture shall enter into and submit
to the Congress a memorandum of understanding in accordance
with this section regarding leasing and permitting for
geothermal development of public lands and National Forest
System lands under their respective jurisdictions.
(b) Lease and Permit Applications.--The memorandum of
understanding shall--
(1) identify known geothermal resources areas on lands
included in the National Forest System and, when necessary,
require review of management plans to consider leasing under
the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) as
a land use; and
(2) establish an administrative procedure for processing
geothermal lease applications, including lines of authority,
steps in application processing, and time limits for
application processing.

[[Page S5563]]

(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. 523. LEASING AND PERMITTING ON FEDERAL LANDS WITHDRAWN
FOR MILITARY PURPOSES.

Not later than 1 year after the date of the enactment of
this Act, the Secretary of the Interior and the Secretary of
Defense, in consultation with interested states, counties,
representatives of the geothermal industry, and interested
members of the public, shall submit to the Congress a joint
report concerning leasing and permitting activities for
geothermal energy on Federal lands withdrawn for military
purposes. Such report shall--
(1) describe any differences, including differences in
royalty structure and revenue sharing with states and
counties, between--
(A) the implementation of the Geothermal Steam Act of 1970
(30 U.S.C. 1001 et seq.) and other applicable Federal law by
the Secretary of the Interior; and
(B) the administration of geothermal leasing under section
2689 of title 10, United States Code, by the Secretary of
Defense;
(2) identify procedures for interagency coordination to
ensure efficient processing and administration of leases or
contracts for geothermal energy on federal lands withdrawn
for military purposes, consistent with the defense purposes
of such withdrawals; and
(3) provide recommendations for legislative or
administrative actions that could facilitate program
administration, including a common royalty structure.

SEC. 524. REINSTATEMENT OF LEASES TERMINATED FOR FAILURE TO
PAY RENT.

Section 5(c) of the Geothermal Steam Act of 1970 (30 U.S.C.
1004(c)), is amended in the last sentence by inserting ``or
was inadvertent,'' after ``reasonable diligence,''.

SEC. 525. ROYALTY REDUCTION AND RELIEF.

(a) Rulemaking.--Within one year after the date of
enactment of this Act, the Secretary shall promulgate a final
regulation providing a methodology for determining the amount
or value of the steam for purposes of calculating the royalty
due to be paid on such production pursuant to section 5 of
the Geothermal Steam Act of 1970 (30 U.S.C. 1004). The final
regulation shall provide for a simplified methodology for
calculating the royalty. In undertaking the rulemaking, the
Secretary shall consider the use of a percent of revenue
method and shall ensure that the final rule will result in
the same level of royalty revenues as the regulation in
effect on the date of enactment of this provision.
(b) Low Temperature Direct Use.--Notwithstanding the
provisions of section 5(a) of the Geothermal Steam Act of
1979 (30 U.S.C. 1004(a)), with respect to the direct use of
low temperature geothermal resources for purposes other than
the generation of electricity, the Secretary shall establish
a schedule of fees and collect fees pursuant to such schedule
in lieu of royalties based upon the total amount of
geothermal resources used. The schedule of fees shall ensure
that there is a fair return to the public for the use of the
low temperature geothermal resource. With the consent of the
lessee, the Secretary may modify the terms of a lease in
existence on the date of enactment of this Act in order to
reflect the provisions of this subsection.

Subtitle D--Biomass Energy

SEC. 531. DEFINITIONS.

For the purposes of this subtitle:
(1) The term ``eligible operation'' means a facility that
is located within the boundaries of an eligible community and
uses biomass from federal or Indian lands as a raw material
to produce electric energy, sensible heat, transportation
fuels, or substitutes for petroleum-based products.
(2) The term ``biomass'' means pre-commercial thinnings of
trees and woody plants, or non-merchantable material, from
preventative treatments to reduce hazardous fuels, or reduce
or contain disease or insect infestations.
(3) The term ``green ton'' means 2,000 pounds of biomass
that has not been mechanically or artificially dried.
(4) The term ``Secretary'' means--
(A) with respect to lands within the National Forest
System, the Secretary of Agriculture; or
(B) with respect to Federal lands under the jurisdiction of
the Secretary of the Interior and Indian lands, the Secretary
of the Interior.
(5) The term ``eligible community'' means any Indian
Reservation, or any county, town, township, municipality, or
other similar unit of local government that has a population
of not more than 50,000 individuals and is determined by the
Secretary to be located in an area near federal of Indian
lands which is at significant risk of catastrophic wildfire,
disease, or insect infestation or which suffers from disease
or insect infestation.
(6) 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)).
(7) The term ``person'' includes--
(A) an individual;
(B) a community;
(C) an Indian tribe;
(D) a small business or a corporation that is incorporated
in the United States; or
(E) a nonprofit organization.

SEC. 532. BIOMASS COMMERCIAL UTILIZATION GRANT PROGRAM.

(a) In General.--The Secretary may make grants to any
person that owns or operates an eligible operation to offset
the costs incurred to purchase biomass for use by such
eligible operation with priority given to operations using
biomass from the highest risk areas.
(b) Limitation.--No grant provided under this subsection
shall be paid at a rate that exceeds $20 per green ton of
biomass delivered.
(c) Records.--Each grant recipient shall keep such records
as the Secretary 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 the Secretary, the
grant recipient shall provide the Secretary reasonable access
to examine the inventory and records of any eligible
operation receiving grant funds.
(d) Authorization of Appropriations.--For the purposes of
this section, there are authorized to be appropriated
$12,500,000 each to the Secretary of the Interior and the
Secretary of Agriculture for each fiscal year from 2004
through 2008, to remain available until expended.

SEC. 533. IMPROVED BIOMASS UTILIZATION GRANT PROGRAM.

(a) In General.--The Secretary may make grants to persons
in eligible communities to offset the costs of developing or
researching proposals to improve the use of biomass or add
value to biomass utilization.
(b) Selection.--Grant recipients shall be selected based on
the potential for the proposal to--
(1) develop affordable thermal or electric energy resources
for the benefit of an eligible community;
(2) provide opportunities for the creation or expansion of
small businesses within an eligible community;
(3) create new job opportunities within an eligible
community, and
(4) reduce the hazardous fuels from the highest risk areas.
(c) Limitation.--No grant awarded under this subsection
shall exceed $500,000.
(d) Authorization of Appropriations.--For the purposes of
this section, there are authorized to be appropriated
$12,500,000 each to the Secretary of the Interior and the
Secretary of Agriculture for each fiscal year from 2004
through 2008, to remain available until expended.

SEC. 534. REPORT.

Not later than 3 years after the date of enactment of this
subtitle, the Secretary of the Interior and the Secretary of
Agriculture shall jointly submit to the Congress a report
that describes the interim results of the programs authorized
under this subtitle.

TITLE VI--ENERGY EFFICIENCY

Subtitle A--Federal Programs

SEC. 601. ENERGY MANAGEMENT REQUIREMENTS.

(a) Energy Reduction Goals.--Section 543(a)(1) of the
National Energy Conservation Policy Act (42 U.S.C.
8253(a)(1)) is amended by striking ``its Federal buildings so
that'' and all that follows through the end and inserting
``the Federal buildings of the agency (including each
industrial or laboratory facility) so that the energy
consumption per gross square foot of the Federal buildings
of the agency in fiscal years 2004 through 2013 is
reduced, as compared with the energy consumption per gross
square foot of the Federal buildings of the agency in
fiscal year 2000, by the percentage specified in the
following table:

``Fiscal Year Percentage reduction
2004..................................................................2
2005..................................................................4
2006..................................................................6
2007..................................................................8
2008.................................................................10
2009.................................................................12
2010.................................................................14
2011.................................................................16
2012.................................................................18
2013.............................................................20.''.

(b) Effective Date.--The energy reduction goals and
baseline established in paragraph (1) of section 543(a) of
the National Energy Conservation Policy Act, as amended by
subsection (a) of this section, supersede all previous goals
and baselines under such paragraph, and related reporting
requirements.
(c) Review of Energy Performance Requirements.--Section
543(a) of the National Energy Conservation Policy Act (42
U.S.C. 8253(a)) is further amended by adding at the end the
following:
``(3) Not later than December 31, 2011, the Secretary shall
review the results of the implementation of the energy
performance requirement established under paragraph (1) and
submit to Congress recommendations concerning energy
performance requirements for fiscal years 2014 through
2022.''.
(d) 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;

[[Page S5564]]

``(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.''.
(e) Review by Secretary.--Section 543(c)(2) of the National
Energy Conservation Policy Act (42 U.S.C. 8253(c)(2)) is
amended--
(1) by striking ``impracticability standards'' and
inserting ``standards for exclusion''; and
(2) by striking ``a finding of impracticability'' and
inserting ``the exclusion''.
(f) Criteria.--Section 543(c) of the National Energy
Conservation Policy Act (42 U.S.C. 8253(c)) is further
amended by adding at the end the following:
``(3) Not later than 180 days after the date of enactment
of this paragraph, the Secretary shall issue guidelines that
establish criteria for exclusions under paragraph (1).''.
(g) Retention of Energy Savings.--Section 546 of the
National Energy Conservation Policy Act (42 U.S.C. 8256) is
amended by adding at the end the following new subsection:
``(e) Retention of Energy Savings.--An agency may retain
any funds appropriated to that agency for energy
expenditures, at buildings subject to the requirements of
section 543(a) and (b), that are not made because of energy
savings. Except as otherwise provided by law, such funds may
be used only for energy efficiency or unconventional and
renewable energy resources projects.''.
(h) 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''.
(i) 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. 602. ENERGY USE MEASUREMENT AND ACCOUNTABILITY.

Section 543 of the National Energy Conservation Policy Act
(42 U.S.C. 8253) is further amended by adding at the end the
following:
``(e) Metering of Energy Use.--
``(1) Deadline.--By October 1, 2010, in accordance with
guidelines established by the Secretary under paragraph (2),
all Federal buildings shall, for the purposes of efficient
use of energy and reduction in the cost of electricity used
in such buildings, be metered or submetered. Each agency
shall use, to the maximum extent practicable, advanced meters
or advanced metering devices that provide data at least daily
and that measure at least hourly consumption of electricity
in the Federal buildings of the agency. Such data shall be
incorporated into existing Federal energy tracking systems
and made available to Federal facility energy managers.
``(2) Guidelines.--
``(A) In General.--Not later than 180 days after the date
of enactment of this subsection, the Secretary, in
consultation with the Department of Defense, the General
Services Administration, representatives from the metering
industry, utility industry, energy services industry, energy
efficiency industry, national laboratories, universities, and
Federal facility energy managers, shall establish guidelines
for agencies to carry out paragraph (1).
``(B) Requirements for Guidelines.--The guidelines shall--
``(i) take into consideration
``(I) the cost of metering and submetering and the reduced
cost of operation and maintenance expected to result from
metering and submetering;
``(II) the extent to which metering and submetering are
expected to result in increased potential for energy
management, increased potential for energy savings and energy
efficiency improvement, and cost and energy savings due to
utility contract aggregation; and
``(III) the measurement and verification protocols of the
Department of Energy;
``(ii) include recommendations concerning the amount of
funds and the number of trained personnel necessary to gather
and use the metering information to track and reduce energy
use;
``(iii) establish priorities for types and locations of
buildings to be metered and submetered based on cost
effectiveness and a schedule of one or more dates, not later
than 1 year after the date of issuance of the guidelines, on
which the requirements specified in paragraph (1) shall take
effect; and
``(iv) establish exclusions from the requirements specified
in paragraph (1) based on the de minimis quantity of energy
use of a Federal building, industrial process, or structure.
``(3) Plan.--No later than 6 months after the date
guidelines are established under paragraph (2), in a report
submitted by the agency under section 548(a), each agency
shall submit to the Secretary a plan describing how the
agency will implement the requirements of paragraph (1),
including--
``(A) how the agency will designate personnel primarily
responsible for achieving the requirements; and
``(B) demonstration by the agency, complete with
documentation, of any finding that advanced meters or
advanced metering devices, as defined in paragraph (1), are
not practicable.''.

SEC. 603. FEDERAL BUILDING PERFORMANCE STANDARDS.

Section 305(a) of the Energy Conservation and Production
Act (42 U.S.C. 6834(a)) is amended--
(a) in paragraph (2)(A), by striking ``CABO Model Energy
Code, 1992'' and inserting ``the 2000 International Energy
Conservation Code''; and
(b) by adding at the end the following:
``(3) Revised Federal Building Energy Efficiency
Performance Standards.--
``(A) In General.--Not later than 1 year after the date of
enactment of this paragraph, the Secretary of Energy shall
establish, by rule, revised Federal building energy
efficiency performance standards that require that, if cost-
effective, for new Federal buildings--
``(i) such buildings be designed so as to achieve energy
consumption levels at least 30 percent below those of the
most recent version of the International Energy Conservation
Code, as appropriate; and
``(ii) sustainable design principles are applied to the
siting, design, and construction of all new and replacement
buildings.
``(B) Additional revisions.--Not later than 1 year after
the date of approval of amendments to ASHRAE Standard 90.1 or
the 2000 International Energy Conservation Code, the
Secretary of Energy shall determine, based on the cost-
effectiveness of the requirements under the amendments,
whether the revised standards established under this
paragraph should be updated to reflect the amendments.
``(C) Statement on compliance of new buildings.--In the
budget request of the Federal agency for each fiscal year and
each report submitted by the Federal agency under section
548(a) of the National Energy Conservation Policy Act (42
U.S.C. 8258(a)), the head of each Federal agency shall
include--
``(i) a list of all new Federal buildings owned, operated,
or controlled by the Federal agency; and
``(ii) a statement concerning whether the Federal buildings
meet or exceed the revised standards established under this
paragraph.''.

SEC. 604. ENERGY SAVINGS PERFORMANCE CONTRACTS.

(a) Permanent Extension.--Section 801(c) of the National
Energy Conservation Policy Act (42 U.S.C. 8287(c)) is
repealed.
(b) Replacement Facilities.--Section 801(a) of the National
Energy Conservation Policy Act (42 U.S.C. 8287(a)) is amended
by adding at the end the following new paragraph:
``(3)(A) In the case of an energy savings contract or
energy savings performance contract providing for energy
savings through the construction and operation of one or more
buildings or facilities to replace one or more existing
buildings or facilities, benefits ancillary to the purpose of
such contract under paragraph (1) may include savings
resulting from reduced life-cycle costs of operation and
maintenance at such replacement buildings or facilities when
compared with costs of operation and maintenance at the
buildings or facilities being replaced, established through a
methodology set forth in the contract.
``(B) Notwithstanding paragraph (2)(B), aggregate annual
payments by an agency under an energy savings contract or
energy savings performance contract referred to in
subparagraph (A) may take into account (through the
procedures developed pursuant to this section) savings
resulting from reduced costs of operation and maintenance as
described in that subparagraph.''.
(c) Energy Savings.--Section 804(2) of the National Energy
Conservation Policy Act (42 U.S.C. 8287c(2)) is amended to
read as follows:
``(2) The term `energy savings' means--
``(A) a reduction in the cost of energy or water, from a
base cost established through a methodology set forth in the
contract, used in an existing federally owned building or
buildings or other federally owned facilities as a result
of--
``(i) the lease or purchase of operating equipment,
improvements, altered operation and maintenance, or technical
services;
``(ii) the increased efficient use of existing energy
sources by co-generation or heat recovery, excluding any co-
generation process for other than a federally owned building
or buildings or other federally owned facilities; or
``(iii) the increased efficient use of existing water
sources; or
``(B) in the case of a replacement building or facility
described in section 801(a)(3), a reduction in the cost of
energy, from a base cost established through a methodology
set forth in the contract, that would otherwise be utilized
in one or more existing federally owned buildings or other
federally owned facilities by reason of the construction and
operation of the replacement building or facility.''.
(d) Energy Savings Contract.--Section 804(3) of the
National Energy Conservation

[[Page S5565]]

Policy Act (42 U.S.C. 8287c(3)) is amended to read as
follows:
``(3) The terms `energy savings contract' and `energy
savings performance contract' mean a contract which provides
for--
``(A) the performance of services for the design,
acquisition, installation, testing, and, where appropriate,
operation, maintenance and repair, of an identified energy or
water conservation measure or series of measures at one or
more locations; or
``(B) energy savings through the construction and operation
of one or more buildings or facilities to replace one or more
existing buildings or facilities. Such contracts shall, with
respect to an agency facility that is a public building as
such term is defined in section 13(1) of the Public Buildings
Act of 1959 (40 U.S.C. 612(1)), be in compliance with the
prospectus requirements and procedures of section 7 of the
Public Buildings Act of 1959 (40 U.S.C. 606).''.
(e) Energy or Water Conservation Measure.--Section 804(4)
of the National Energy Conservation Policy Act (42 U.S.C.
8287c(4)) is amended to read as follows:
``(4) The term `energy or water conservation measure'
means--
``(A) an energy conservation measure, as defined in section
551(4) (42 U.S.C. 8259(4)); or
``(B) a water conservation measure that improves water
efficiency, is life-cycle cost-effective, and involves water
conservation, water recycling or reuse, more efficient
treatment of wastewater or stormwater, improvements in
operation or maintenance efficiencies, retrofit activities,
or other related activities, not at a Federal hydroelectric
facility.''.
(f) Pilot Program for Non-building Applications.--
(1) The Secretary of Defense, and the heads of other
interested Federal agencies, are authorized to enter into up
to 10 energy savings performance contracts under Title VIII
of the National Energy Conservation Policy Act (42 U.S.C.
8287 et seq.) for the purpose of achieving energy or water
savings, secondary savings, and benefits incidental to those
purposes, in non-building applications, provided that the
aggregate payments to be made by the Federal government under
such contracts shall not exceed $100,000,000.
(2) The Secretary of Energy, in consultation with the
Secretary of Defense and the heads of other interested
Federal agencies, shall select projects that demonstrate the
applicability and benefits of energy savings performance
contracting to a range of non-building applications.
(3) For the purposes of this subsection:
(A) The term ``non-building application'' means--
(i) any class of vehicles, devices, or equipment that is
transportable under its own power by land, sea, or air that
consumes energy from any fuel source for the purpose of such
transportability, or to maintain a controlled environment
within such vehicle, device, or equipment; or
(ii) any Federally owned equipment used to generate
electricity or transport water.
(B) The term ``secondary savings'', means additional energy
or cost savings that are a direct consequence of the energy
or water savings that result from the financing and
implementation of the energy savings performance contract,
including, but not limited to, energy or cost savings that
result from a reduction in the need for fuel delivery and
logistical support, or the increased efficiency in the
production of electricity.
(4) Not later than 3 years after the date of enactment of
this section, the Secretary of Energy shall report to the
Congress on the progress and results of the projects funded
pursuant to this section. Such report shall include a
description of projects undertaken; the energy, water and
cost savings, secondary savings and other benefits that
resulted from such projects; and recommendations on whether
the pilot program should be extended, expanded, or authorized
permanently as a part of the program authorized under Title
VIII of the National Energy Conservation Policy act (42
U.S.C. 8287 et seq.).
(5) Section 546(c)(3) of the National Energy Conservation
Policy Act (42 U.S.C. 8256) is amended by striking the word
``facilities'', and inserting the words ``facilities,
equipment and vehicles'', in lieu thereof.
(g) Review.--Within 180 days after the date of the
enactment of this section, the Secretary of Energy shall
complete a review of the Energy Savings Performance Contract
program to identify statutory, regulatory, and administrative
obstacles that prevent Federal agencies from fully utilizing
the program. In addition, this review shall identify all
areas for increasing program flexibility and effectiveness,
including audit and measurement verification requirements,
accounting for energy use in determining savings, contracting
requirements, including the identification of additional
qualified contractors, and energy efficiency services
covered. The Secretary shall report these findings to the
Committee on Energy and Commerce of the House of
Representatives and the Committee on Energy and Natural
Resources of the Senate, and shall implement identified
administrative and regulatory changes to increase program
flexibility and effectiveness to the extent that such changes
are consistent with statutory authority.

SEC. 605. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

Part 3 of title V of the National Energy Conservation
Policy Act is amended by adding at the end the following:

``SEC. 552. FEDERAL PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

``(a) Definitions.--In this section:
``(1) The term `Energy Star product' means a product that
is rated for energy efficiency under an Energy Star program.
``(2) The term `Energy Star program' means the program
established by section 324A of the Energy Policy and
Conservation Act.
``(3) The term `executive agency' has the meaning given the
term in section 4 of the Office of Federal Procurement Policy
Act (41 U.S.C. 403).
``(4) The term `FEMP designated product' means a product
that is designated under the Federal Energy Management
Program of the Department of Energy as being among the
highest 25 percent of equivalent products for energy
efficiency.
``(b) Procurement of Energy Efficient Products.--
``(1) Requirement.--To meet the requirements of an
executive agency for an energy consuming product, the head of
the executive agency shall, except as provided in paragraph
(2), procure an Energy Star product or a FEMP designated
product.
``(2) Exceptions.--The head of an executive agency is not
required to procure an Energy Star product or FEMP designated
product under paragraph (1) if the head of the executive
agency finds in writing that--
``(A) an Energy Star product or FEMP designated product is
not cost-effective over the life of the product taking energy
cost savings into account; or
``(B) no Energy Star product or FEMP designated product is
reasonably available that meets the functional requirements
of the executive agency.
``(3) Procurement planning.--The head of an executive
agency shall incorporate into the specifications for all
procurements involving energy consuming products and systems,
including guide specifications, project specifications, and
construction, renovation, and services contracts that include
provision of energy consuming products and systems, and into
the factors for the evaluation of offers received for the
procurement, criteria for energy efficiency that are
consistent with the criteria used for rating Energy Star
products and for rating FEMP designated products.
``(c) Listing of Energy Efficient Products in Federal
Catalogs.--Energy Star products and FEMP designated products
shall be clearly identified and prominently displayed in any
inventory or listing of products by the General Services
Administration or the Defense Logistics Agency. The General
Services Administration or the Defense Logistics Agency shall
supply only Energy Star products or FEMP designated products
for all product categories covered by the Energy Star program
or the Federal Energy Management Program, except in cases
where the agency ordering a product specifies in writing that
no Energy Star product or FEMP designated product is
available to meet the buyer's functional requirements, or
that no Energy Star product or FEMP designated product is
cost-effective for the intended application over the life of
the product, taking energy cost savings into account.
``(d) Designation of Electric Motors.--In the case of
electric motors of 1 to 500 horsepower, agencies shall select
only premium efficient motors that meet a standard designated
by the Secretary. The Secretary shall designate such a
standard within 120 days after the date of the enactment of
this section, after considering the recommendations of
associated electric motor manufacturers and energy efficiency
groups.
``(e) Regulations.--Not later than 180 days after the date
of the enactment of this section, the Secretary shall issue
guidelines to carry out this section.''.
(b) Conforming Amendment.--The table of contents in section
1(b) of the National Energy Conservation Policy Act (42
U.S.C. 8201 note) is amended by inserting after the item
relating to the end of the items relating to part 3 of title
V the following:

``Sec. 552. Federal procurement of energy efficient products.''.

SEC. 606. CONGRESSIONAL BUILDING EFFICIENCY.

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

``SEC. 553. CONGRESSIONAL BUILDING EFFICIENCY.

``(a) In General.--The Architect of the Capitol--
``(1) shall develop, update, and implement a cost-effective
energy conservation and management plan (referred to in this
section as the `plan') for all facilities administered by the
Congress (referred to in this section as `congressional
buildings') to meet the energy performance requirements for
Federal buildings established under section 543(a)(1); and
``(2) shall submit the plan to Congress, not later than 180
days after the date of enactment of this section.
``(b) Plan Requirements.--The plan shall include--
``(1) a description of the life-cycle cost analysis used to
determine the cost-effectiveness of proposed energy
efficiency projects;
``(2) a schedule of energy surveys to ensure complete
surveys of all congressional buildings every 5 years to
determine the cost and payback period of energy and water
conservation measures;
``(3) a strategy for installation of life-cycle cost-
effective energy and water conservation measures;

[[Page S5566]]

``(4) the results of a study of the costs and benefits of
installation of submetering in congressional buildings; and
``(5) information packages and `how-to' guides for each
Member and employing authority of Congress that detail
simple, cost-effective methods to save energy and taxpayer
dollars in the workplace.
``(c) Annual Report.--The Architect shall submit to
Congress annually a report on congressional energy management
and conservation programs required under this section that
describes in detail--
``(1) energy expenditures and savings estimates for each
facility;
``(2) energy management and conservation projects; and
``(3) future priorities to ensure compliance with this
section.''.
(b) Table of Contents Amendment.--The table of contents in
section 1(b) 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. 553. Energy and water savings measures in
congressional buildings.''.
(c) Repeal.--Section 310 of the Legislative Branch
Appropriations Act, 1999 (40 U.S.C. 166i), is repealed.
(d) Energy Infrastructure.--The Architect of the Capitol,
building on the Master Plan Study completed in July 2000,
shall commission a study to evaluate the energy
infrastructure of the Capital Complex to determine how the
infrastructure could be augmented to become more energy
efficient, using unconventional and renewable energy
resources, in a way that would enable the Complex to have
reliable utility service in the event of power fluctuations,
shortages, or outages.
(e) Authorization.--There are authorized to be appropriated
to the Architect of the Capitol to carry out subsection (d),
not more than $2,000,000 for fiscal year 2004.

SEC. 607. INCREASED USE OF RECOVERED MINERAL COMPONENT IN
FEDERALLY FUNDED PROJECTS INVOLVING PROCUREMENT
OF CEMENT OR CONCRETE.

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

``SEC. 6005. INCREASED USE OF RECOVERED MINERAL COMPONENT IN
FEDERALLY FUNDED PROJECTS INVOLVING PROCUREMENT
OF CEMENT OR CONCRETE.

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

SEC. 608. UTILITY ENERGY SERVICE CONTRACTS.

Section 546(c)(1) of the National Energy Conservation
Policy Act (42 U.S.C. 8256(c)) is amended to read as follows:
``(1) Agencies are authorized and encouraged to participate
in programs, including utility energy services contracts,
conducted by gas, water and electric utilities and generally
available to customers of such utilities, for the purposes of
increased energy efficiency, water conservation or the
management of electricity demand.''.

SEC. 609. STUDY OF ENERGY EFFICIENCY STANDARDS.

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

Subtitle B--State and Local Programs

SEC. 611. LOW INCOME COMMUNITY ENERGY EFFICIENCY PILOT
PROGRAM.

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

[[Page S5567]]

provided by the United States to Indians because of their
status as Indians.
(d) Authorization of Appropriations.--For the purposes of
this section there are authorized to be appropriated to the
Secretary of Energy $20,000,000 for fiscal year 2004 and each
fiscal year thereafter through fiscal year 2006.

SEC. 612. ENERGY EFFICIENT PUBLIC BUILDINGS.

(a) Grants.--The Secretary of Energy may make grants to the
State agency responsible for developing State energy
conservation plans under section 362 of the Energy Policy and
Conservation Act (42 U.S.C. 6322), or, if no such agency
exists, a State agency designated by the Governor of the
State, to assist units of local government in the State in
improving the energy efficiency of public buildings and
facilities--
(1) through construction of new energy efficient public
buildings that use at least 30 percent less energy than a
comparable public building constructed in compliance with
standards prescribed in chapter 8 of the 2000 International
Energy Conservation Code, or a similar State code intended to
achieve substantially equivalent efficiency levels; or
(2) through renovation of existing public buildings to
achieve reductions in energy use of at least 30 percent as
compared to the baseline energy use in such buildings prior
to renovation, assuming a 3-year, weather-normalized average
for calculating such baseline.
(b) Administration.--State energy offices receiving grants
under this section shall--
(1) maintain such records and evidence of compliance as the
Secretary may require; and
(2) develop and distribute information and materials and
conduct programs to provide technical services and assistance
to encourage planning, financing, and design of energy
efficient public buildings by units of local government.
(c) Authorization of Appropriations.--For the purposes of
this section, there are authorized to be appropriated to the
Secretary of Energy such sums as may be necessary for each of
fiscal years 2003 through 2012. Not more than 30 percent of
appropriated funds shall be used for administration.

SEC. 613. ENERGY EFFICIENT APPLIANCE REBATE PROGRAMS.

(a) Definitions.--In this section:
(1) The term ``eligible State'' means a State that meets
the requirements of subsection (b).
(2) The term ``Energy Star program'' means the program
established by section 324A of the Energy Policy and
Conservation Act.
(3) The term ``residential Energy Star product'' means a
product for a residence that is rated for energy efficiency
under the Energy Star program.
(4) 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) 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) 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) For each fiscal year, the amounts allocated under this
subsection shall be adjusted proportionately so that no
eligible State is allocated a sum that is less than an amount
determined by the Secretary.
(d) Use of Allocated Funds.--The allocation to a State
energy office under subsection (c) may be used to pay up to
50 percent of the cost of establishing and carrying out a
State program.
(e) Issuance of Rebates.--Rebates may be provided to
residential consumers that meet the requirements of the State
program. The amount of a rebate shall be determined by the
State energy office, taking into consideration--
(1) the amount of the allocation to the State energy office
under subsection (c);
(2) the amount of any Federal or State tax incentive
available for the purchase of the residential Energy Star
product; and
(3) the difference between the cost of the residential
Energy Star product and the cost of an appliance that is not
a residential Energy Star product, but is of the same type
as, and is the nearest capacity, performance, and other
relevant characteristics (as determined by the State energy
office) to the residential Energy Star product.
(f) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section $50,000,000 for
each of the fiscal years 2004 through 2008.

Subtitle C--Consumer Products

SEC. 621. 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 subparagraph (30)(S), by striking the period and
adding at the end the following: ``but does not include any
lamps specifically designed to be used for special purpose
applications, and also does not include any lamp not
described in subparagraph (D) that is excluded by the
Secretary, by rule.''; and
(2) by adding at the end the following:
``(32) The term `battery charger' means a device that
charges batteries for consumer products.
``(33) The term `commercial refrigerator, freezer and
refrigerator-freezer' means a refrigerator, freezer or
refrigerator-freezer that--
``(A) is not a consumer product regulated under this Act;
and
``(B) incorporates most components involved in the vapor-
compression cycle and the refrigerated compartment in a
single package.
``(34) The term `external power supply' means an external
power supply circuit that is used to convert household
electric current into either DC current or lower-voltage AC
current to operate a consumer product.
``(35) The term `illuminated exit sign' means a sign that--
``(A) is designed to be permanently fixed in place to
identify an exit; and
``(B) consists of an electrically powered integral light
source that illuminates the legend `EXIT' and any directional
indicators and provides contrast between the legend, any
directional indicators, and the background.
``(36)(A) Except as provided in subparagraph (B), the term
`low-voltage dry-type transformer' means a transformer that--
``(i) has an input voltage of 600 volts or less;
``(ii) is air-cooled;
``(iii) does not use oil as a coolant; and
``(iv) is rated for operation at a frequency of 60 Hertz.
``(B) The term `low-voltage dry-type transformer' does not
include--
``(i) transformers with multiple voltage taps, with the
highest voltage tap equaling at least 20 percent more than
the lowest voltage tap;
``(ii) transformers, such as those commonly known as drive
transformers, rectifier transformers, auto-transformers,
Uninterruptible Power System transformers, impedance
transformers, harmonic transformers, regulating transformers,
sealed and nonventilating transformers, machine tool
transformers, welding transformers, grounding transformers,
or testing transformers, that are designed to be used in a
special purpose application and are unlikely to be used in
general purpose applications; or
``(iii) any transformer not listed in clause (ii) that is
excluded by the Secretary by rule because the transformer is
designed for a special application and the application of
standards to the transformer would not result in significant
energy savings.
``(37)(A) Except as provided in subsection (B), the term
`distribution transformer' means a transformer that--
``(i) has an input voltage of 34.5 kilovolts or less;
``(ii) has an output voltage of 600 volts or less; and
``(iii) is rated for operation at a frequency of 60 Hertz.
``(B) The term `distribution transformer' does not
include--
``(i) transformers with multiple voltage taps, with the
highest voltage tap equaling at least 15 percent more than
the lowest voltage tap;
``(ii) transformers, such as those commonly known as drive
transformers, rectifier transformers, autotransformers,
Uninterruptible Power System transformers, impedance
transformers, harmonic transformers, regulating transformers,
sealed and nonventilating transformers, machine tool
transformers, welding transformers, grounding transformers,
or testing transformers, that are designed to be used in a
special purpose application, and are unlikely to be used in
general purpose applications; or
``(iii) any transformer not listed in clause (ii) that is
excluded by the Secretary by rule because the transformer is
designed for a special application, is unlikely to be used in
general purpose applications, and the application of
standards to the transformer would not result in significant
energy savings.
``(38) The term `standby mode' means the lowest amount of
electric power used by a household appliance when not
performing its active functions, as defined on an individual
product basis by the Secretary.
``(39) The term `torchiere' means a portable electric lamp
with a reflector bowl that directs light upward so as to give
indirect illumination.
``(40) The term `transformer' means a device consisting of
two or more coils of insulated wire that transfers
alternating current by electromagnetic induction from one
coil to another to change the original voltage or current
value.

[[Page S5568]]

``(41) The term `unit heater' means a self-contained fan-
type heater designed to be installed within the heated space,
except that such term does not include a warm air furnace.
``(42) The term `traffic signal module' means a standard 8-
inch (200mm) or 12-inch (300mm) traffic signal indication,
consisting of a light source, a lens, and all other parts
necessary for operation, that communicates movement messages
to drivers through red, amber, and green colors.''
(b) Test Procedures.--Section 323 of the Energy Policy and
Conservation Act (42 U.S.C. 6293) is amended--
(1) in subsection (b), by adding at the end the following:
``(9) Test procedures for illuminated exit signs shall be
based on the test method used under Version 2.0 of the Energy
Star program of the Environmental Protection Agency for
illuminated exit signs.
``(10) Test procedures for low voltage dry-type
distribution transformers shall be based on the `Standard
Test Method for Measuring the Energy Consumption of
Distribution Transformers' prescribed by the National
Electrical Manufacturers Association (NEMA TP 2 1998). The
Secretary may review and revise this test procedure.
``(11) Test procedures for traffic signal modules shall be
based on the test method used under the Energy Star program
of the Environmental Protection Agency for traffic signal
modules, as in effect on the date of enactment of this
paragraph.
``(12) Test procedures for medium base compact fluorescent
lamps shall be based on the test methods used under the
August 9, 2001 version of the Energy Star program of the
Environmental Protection Agency and Department of Energy for
compact fluorescent lamps. Covered products shall meet all
test requirements for regulated parameters in section
325(bb). However, covered products may be marketed prior to
completion of lamp life and lumen maintenance at 40% of rated
life testing provided manufacturers document engineering
predictions and analysis that support expected attainment of
lumen maintenance at 40% rated life and lamp life time.'';
and
(2) by adding at the end the following:
``(f) Additional Consumer and Commercial Products.--The
Secretary shall within 24 months after the date of enactment
of this subsection prescribe testing requirements for
suspended ceiling fans, refrigerated bottled or canned
beverage vending machines, and commercial refrigerators,
freezers and refrigerator-freezers. Such testing requirements
shall be based on existing test procedures used in industry
to the extent practical and reasonable. In the case of
suspended ceiling fans, such test procedures shall include
efficiency at both maximum output and at an output no more
than 50 percent of the maximum output.''.
(c) New Standards.--Section 325 of the Energy Policy and
Conservation Act (42 U.S.C. 6295) is amended by adding at the
end the following:
``(u) Standby Mode Electric Energy Consumption.--
``(1) Initial Rulemaking.--
``(A) The Secretary shall, within 18 months after the date
of enactment of this subsection, prescribe by notice and
comment, definitions of standby mode and test procedures for
the standby mode power use of battery chargers and external
power supplies. In establishing these test procedures, the
Secretary shall consider, among other factors, existing test
procedures used for measuring energy consumption in standby
mode and assess the current and projected future market for
battery chargers and external power supplies. This assessment
shall include estimates of the significance of potential
energy savings from technical improvements to these products
and suggested product classes for standards. Prior to the end
of this time period, the Secretary shall hold a scoping
workshop to discuss and receive comments on plans for
developing energy conservation standards for standby mode
energy use for these products.
``(B) The Secretary shall, within 3 years after the date of
enactment of this subsection, issue a final rule that
determines whether energy conservation standards shall be
promulgated for battery chargers and external power supplies
or classes thereof. For each product class, any such
standards shall be set at the lowest level of standby energy
use that--
``(i) meets the criteria of subsections (o), (p), (q), (r),
(s) and (t); and
``(ii) will result in significant overall annual energy
savings, considering both standby mode and other operating
modes.
``(2) Designation of Additional Covered Products.--
``(A) Not later than 180 days after the date of enactment
of this subsection, the Secretary shall publish for public
comment and public hearing a notice to determine whether any
non-covered products should be designated as covered products
for the purpose of instituting a rulemaking under this
section to determine whether an energy conservation standard
restricting standby mode energy consumption, should be
promulgated; except that any restriction on standby mode
energy consumption shall be limited to major sources of such
consumption.
``(B) In making the determinations pursuant to subparagraph
(A) of whether to designate new covered products and
institute rulemakings, the Secretary shall, among other
relevant factors and in addition to the criteria in section
322(b), consider--
``(i) standby mode power consumption compared to overall
product energy consumption; and
``(ii) the priority and energy savings potential of
standards which may be promulgated under this subsection
compared to other required rulemakings under this section and
the available resources of the Department to conduct such
rulemakings.
``(C) Not later than 1 year after the date of enactment of
this subsection, the Secretary shall issue a determination of
any new covered products for which he intends to institute
rulemakings on standby mode pursuant to this section and he
shall state the dates by which he intends to initiate those
rulemakings.
``(3) Review of standby energy use in covered products.--In
determining pursuant to section 323 whether test procedures
and energy conservation standards pursuant to this section
should be revised, the Secretary shall consider for covered
products which are major sources of standby mode energy
consumption whether to incorporate standby mode into such
test procedures and energy conservation standards, taking
into account, among other relevant factors, the criteria for
non-covered products in subparagraph (B) of paragraph (2) of
this subsection.
``(4) Rulemaking.--
``(A) Any rulemaking instituted under this subsection or
for covered products under this section which restricts
standby mode power consumption shall be subject to the
criteria and procedures for issuing energy conservation
standards set forth in this section and the criteria set
forth in subparagraph (B) of paragraph (2) of this
subsection.
``(B) No standard can be proposed for new covered products
or covered products in a standby mode unless the Secretary
has promulgated applicable test procedures for each product
pursuant to section 323.
``(C) The provisions of section 327 shall apply to new
covered products which are subject to the rulemakings for
standby mode after a final rule has been issued.
``(5) Effective date.--Any standard promulgated under this
subsection shall be applicable to products manufactured or
imported 3 years after the date of promulgation.
``(6) Voluntary Programs.--The Secretary and the
Administrator shall collaborate and develop programs,
including programs pursuant to section 324A (relating to
Energy Star Programs) and other voluntary industry agreements
or codes of conduct, which are designed to reduce standby
mode energy use.
``(v) Suspended Ceiling Fans, Vending Machines, and
Commercial Refrigerators, Freezers and Refrigerator-
freezers.--The Secretary shall within 36 months after the
date on which testing requirements are prescribed by the
Secretary pursuant to section 323(f), prescribe, by rule,
energy conservation standards for suspended ceiling fans,
refrigerated bottled or canned beverage vending machines, and
commercial refrigerators, freezers and refrigerator-freezers.
In establishing standards under this subsection, the
Secretary shall use the criteria and procedures contained in
subsections (l) and (m). Any standard prescribed under this
subsection shall apply to products manufactured 3 years after
the date of publication of a final rule establishing such
standard.
``(w) Illuminated Exit Signs.--Illuminated exit signs
manufactured on or after January 1, 2005 shall meet the
Version 2.0 Energy Star Program performance requirements for
illuminated exit signs prescribed by the Environmental
Protection Agency.
``(x) Torchieres.--Torchieres manufactured on or after
January 1, 2005--
``(1) shall consume not more than 190 watts of power; and
``(2) shall not be capable of operating with lamps that
total more than 190 watts.
``(y) Distribution Transformers.--The efficiency of low
voltage dry-type transformers manufactured on or after
January 1, 2005 shall be the Class I Efficiency Levels for
distribution transformers specified in Table 4-2 of the
`Guide for Determining Energy Efficiency for Distribution
Transformers' published by the National Electrical
Manufacturers Association (NEMA TP-1-2002).
``(z) Traffic signal modules.--Traffic signal modules
manufactured on or after January 1, 2006 shall meet the
performance requirements used under the Energy Star program
of the Environmental Protection Agency for traffic signals,
as in effect on the date of enactment of this paragraph, and
shall be installed with compatible, electrically-connected
signal control interface devices and conflict monitoring
systems.
``(aa) Unit Heaters.--Unit heaters manufactured on or after
the date that is three years after the date of enactment of
the Energy Policy Act of 2003 shall be equipped with an
intermittent ignition device and shall have either power
venting or an automatic flue damper.
``(bb) Medium Base Compact Fluorescent Lamps.--Bare lamp
and covered lamp (no reflector) medium base compact
fluorescent lamps manufactured on or after January 1, 2005
shall meet the following requirements prescribed by the
August 9, 2001 version of the Energy Star Program
Requirements for CFLs, Energy Star Eligibility Criteria,
Energy-Efficiency Specification issued by the Environmental
Protection Agency and Department of Energy: minimum initial
efficacy; lumen maintenance at 1000 hours; lumen maintenance
at 40% of rated life; rapid cycle stress test; and lamp life.
The Secretary may, by rule, establish requirements for color
quality (CRI); power factor;

[[Page S5569]]

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 CFLs. The
Secretary may, by rule, revise these requirements or
establish other requirements considering energy savings, cost
effectiveness, and consumer satisfaction.
``(cc) Effective date.--The provisions of section 327 shall
apply--
``(1) to products for which standards are to be set
pursuant to subsection (v) of this section on the date on
which a final rule is issued by the Department of Energy,
except that any state or local standards prescribed or
enacted for any such product prior to the date on which such
final rule is issued shall not be preempted until the
standard set pursuant to subsection (v) for that product
takes effect; and
``(2) to products for which standards are set in
subsections (w) through (bb) of this section on the date of
enactment of the Energy Policy Act of 2003, except that any
state or local standards prescribed or enacted prior to the
date of enactment of the Energy Policy Act of 2003 shall not
be preempted until the standards set in subsections (w)
through (bb) take effect.''.

SEC. 622. ENERGY LABELING.

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

SEC. 623. ENERGY STAR PROGRAM.

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

``SEC. 324A. ENERGY STAR PROGRAM.

``There is established at the Department of Energy and the
Environmental Protection Agency a voluntary program to
identify and promote energy-efficient products and buildings
in order to reduce energy consumption, improve energy
security, and reduce pollution through voluntary labeling of
or other forms of communication about products and buildings
that meet the highest energy efficiency standards.
Responsibilities under the program shall be divided between
the Department of Energy and the Environmental Protection
Agency consistent with the terms of agreements between the
two agencies. The Administrator and the Secretary shall--
``(1) promote Energy Star compliant technologies as the
preferred technologies in the marketplace for achieving
energy efficiency and to reduce pollution;
``(2) work to enhance public awareness of the Energy Star
label, including special outreach to small businesses;
``(3) preserve the integrity of the Energy Star label;
``(4) solicit the comments of interested parties in
establishing a new Energy Star product category,
specifications, or criteria, or in revising a product
category, and upon adoption of a new or revised product
category, specifications, or criteria, publish a notice of
any changes in product categories, specifications or criteria
along with an explanation of such changes, and, where
appropriate, responses to comments submitted by interested
parties; and
``(5) unless waived or reduced by mutual agreement between
the Administrator, the Secretary, and the affected parties,
provide not less than 12 months lead time prior to
implementation of changes in product categories,
specifications, or criteria as may be adopted pursuant to
this section.''.
(b) Table of Contents Amendment. The table of contents of
the Energy Policy and Conservation Act is amended by
inserting after the item relating to section 324 the
following new item:

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

SEC. 624. HVAC MAINTENANCE CONSUMER EDUCATION PROGRAM.

Section 337 of the Energy Policy and Conservation Act (42
U.S.C. 6307) is amended by adding at the end the following:
``(c) HVAC Maintenance.--For the purpose of ensuring that
installed air conditioning and heating systems operate at
their maximum rated efficiency levels, the Secretary shall,
within 180 days of the date of enactment of this subsection,
carry out a program to educate homeowners and small business
owners concerning the energy savings resulting from properly
conducted maintenance of air conditioning, heating, and
ventilating systems. The Secretary shall carry out the
program in a cost-shared manner in cooperation with the
Administrator of the Environmental Protection Agency and
such other entities as the Secretary considers
appropriate, including industry trade associations,
industry members, and energy efficiency organizations.
``(d) Small Business Education and Assistance.--The
Administrator of the Small Business Administration, in
consultation with the Secretary of Energy and the
Administrator of the Environmental Protection Agency, shall
develop and coordinate a Government-wide program, building on
the existing Energy Star for Small Business Program, to
assist small business to become more energy efficient,
understand the cost savings obtainable through efficiencies,
and identify financing options for energy efficiency
upgrades. The Secretary and the Administrator shall make the
program information available directly to small businesses
and through other Federal agencies, including the Federal
Emergency Management Program, and the Department of
Agriculture.''.

Subtitle D--Public Housing

SEC. 631. CAPACITY BUILDING FOR ENERGY-EFFICIENT, AFFORDABLE
HOUSING.

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

SEC. 632. INCREASE OF CDBG PUBLIC SERVICES CAP FOR ENERGY
CONSERVATION AND EFFICIENCY ACTIVITIES.

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

SEC. 633. FHA MORTGAGE INSURANCE INCENTIVES FOR ENERGY
EFFICIENT HOUSING.

(a) Single Family Housing Mortgage Insurance.--Section
203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2))
is amended, in the first undesignated and indented paragraph
beginning after subparagraph (B)(iii) (relating to solar
energy systems)--
(1) by inserting ``or paragraph (10)'' before the first
comma; and
(2) by striking ``20 percent'' and inserting ``30
percent''.
(b) Multifamily Housing Mortgage Insurance.--Section
207(c) of the National Housing Act (12 U.S.C. 1713(c)) is
amended, in the second undesignated paragraph beginning after
paragraph (3) (relating to solar energy systems and
residential energy conservation measures), by striking ``20
percent'' and inserting ``30 percent''.
(c) Cooperative Housing Mortgage Insurance.--Section 213(p)
of the National Housing Act (12 U.S.C. 1715e(p)) is amended
by striking ``20 per centum'' and inserting ``30 percent''.
(d) Rehabilitation and Neighborhood Conservation Housing
Mortgage Insurance.--Section 220(d)(3)(B)(iii) of the
National Housing Act (12 U.S.C. 1715k(d)(3)(B)(iii)) is
amended by striking ``20 per centum'' and inserting ``30
percent''.
(e) Low-income Multifamily Housing Mortgage Insurance.--
Section 221(k) of the National Housing Act (12 U.S.C.
1715l(k)) is amended by striking ``20 per centum'' and
inserting ``30 percent''.
(f) Elderly Housing Mortgage Insurance.--The proviso at the
end of section 231(c)(2) of the National Housing Act (12
U.S.C. 1715v(c)(2)) is amended by striking ``20 per centum''
and inserting ``30 percent''.
(g) Condominium Housing Mortgage Insurance.--Section
234(j) of the National Housing Act (12 U.S.C. 1715y(j)) is
amended by striking ``20 per centum'' and inserting ``30
percent''.

SEC. 634. PUBLIC HOUSING CAPITAL FUND.

Section 9 of the United States Housing Act of 1937 (42
U.S.C. 1437g) is amended--
(a) in subsection (d)(1)--
(1) in subparagraph (I), by striking ``and'' at the end;
(2) in subparagraph (J), by striking the period at the end
and inserting a semicolon; and
(3) 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

[[Page S5570]]

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
(b) in subsection (e)(2)(C)
(1) by striking ``The'' and inserting the following:
``(i) In general. The''; and
(2) by adding at the end the following:
``(ii) Third party contracts.--Contracts described in
clause (i) may include contracts for equipment conversions to
less costly utility sources, projects with resident-paid
utilities, and adjustments to frozen base year consumption,
including systems repaired to meet applicable building and
safety codes and adjustments for occupancy rates increased by
rehabilitation.
``(iii) Term of contract.--The total term of a contract
described in clause (i) shall not exceed 20 years to allow
longer payback periods for retrofits, including windows,
heating system replacements, wall insulation, site-based
generations, advanced energy savings technologies, including
renewable energy generation, and other such retrofits.''.

SEC. 635. GRANTS FOR ENERGY-CONSERVING IMPROVEMENTS FOR
ASSISTED HOUSING.

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

SEC. 636. NORTH AMERICAN DEVELOPMENT BANK.

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

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

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

SEC. 637. 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 Policy and
Conservation Act (as amended by this Act), unless the
purchase of energy-efficient appliances is not cost-effective
to the agency.

SEC. 638. 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,
2003'';
(ii) in subparagraph (A), by striking ``and'' at the end;
(iii) in subparagraph (B), by striking the period at the
end and inserting ``; and''; and
(iv) by adding at the end the following:
``(C) rehabilitation and new construction of public and
assisted housing funded by HOPE VI revitalization grants
under section 24 of the United States Housing Act of 1937 (42
U.S.C. 1437v), where such standards are determined to be cost
effective by the Secretary of Housing and Urban
Development.''; and
(B) in paragraph (2), by striking ``Council of American''
and all that follows through ``90.1--1989') and inserting
``2000 International Energy Conservation Code'';
(2) in subsection (b)--
(A) by striking ``1 year after the date of the enactment of
the Energy Policy Act of 1992'' and inserting ``September 30,
2003''; and
(B) by striking ``CABO'' and all that follows through
``1989'' and inserting ``the 2000 International Energy
Conservation Code''; and
(3) in subsection (c)--
(A) in the heading, by striking ``MODEL ENERGY CODE'' and
inserting ``INTERNATIONAL ENERGY CONSERVATION CODE''; and
(B) by striking ``CABO'' and all that follows through
``1989'' and inserting ``the 2000 International Energy
Conservation Code''.

SEC. 639. ENERGY STRATEGY FOR HUD.

The Secretary of Housing and Urban Development shall
develop and implement an integrated strategy to reduce
utility expenses through cost-effective energy conservation
and efficiency measures and energy efficient design and
construction of public and assisted housing. The energy
strategy shall include the development of energy reduction
goals and incentives for public housing agencies. The
Secretary shall submit a report to Congress, not later than
one 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 two
years thereafter on progress in implementing the strategy.

TITLE VII--TRANSPORTATION FUELS

Subtitle A--Alternative Fuel 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 where--
``(I) the alternative fuel otherwise required to be used in
the vehicle is not reasonably available to retail purchasers
of the fuel, as certified to the Secretary by the head of the
agency; or
``(II) the cost of the alternative fuel otherwise required
to be used in the vehicle is unreasonably more expensive
compared to gasoline, as certified to the Secretary by the
head of the agency.
``(ii) The Secretary shall monitor compliance with this
subparagraph by all such fleets and shall report annually to
the 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. FUEL USE CREDITS.

(a) In General.--Section 312 of the Energy Policy Act of
1992 (42 U.S.C. 13220) is amended to read as follows:

``SEC. 312. FUEL USE CREDITS.

``(a) Allocation.--
``(1) The Secretary shall allocate one credit under this
section to a fleet or covered person for each qualifying
volume of alternative fuel or biodiesel purchased for use in
an on-road motor vehicle operated by the fleet that weighs
more than 8,500 pounds gross vehicle weight rating.
``(2) No credits shall be allocated under this section for
purchase of an alternative fuel or biodiesel that is required
by Federal or State law.
``(3) A fleet or covered person seeking a credit under this
section shall provide written documentation to the Secretary
supporting the allocation of a credit to such fleet or
covered person under this section.
``(b) Use.--At the request of a fleet or covered person
allocated a credit under subsection (a), the Secretary shall,
for the year in which the purchase of a qualifying volume is
made, treat that purchase as the acquisition of one
alternative fueled vehicle the fleet or covered person is
required to acquire under this title, title IV, or title V.
``(c) Treatment.--A credit provided to a fleet or covered
person under this section shall be considered a credit under
section 508.
``(d) Issuance of Rule.--Not later than 6 months after the
date of enactment of this section, the Secretary shall issue
a rule establishing procedures for the implementation of this
section.
``(e) Definitions.--For the purposes of this section--
``(1) the term ``biodiesel'' means a diesel fuel substitute
produced from non-petroleum 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; and
``(2) the term ``qualifying volume'' means--
``(A) in the case of biodiesel, when used as a component of
fuel containing at least 20 percent biodiesel by volume, 450
gallons, or if the Secretary determines by rule that the
average annual alternative fuel use in light duty vehicles by
fleets and covered persons exceeds 450 gallons or gallon
equivalents, the amount of such average annual alternative
fuel use; or
``(B) in the case of an alternative fuel, the amount of
such fuel determined by the Secretary to have an equivalent
energy content to the amount of biodiesel defined as a
qualifying volume pursuant to subparagraph (A).''
(b) Table of Contents Amendment.--The table of contents of
the Energy Policy Act of 1992 is amended by adding at the end
of the items relating to title III the following new item:

``Sec. 312. Fuel use credits.''

SEC. 703. NEIGHBORHOOD ELECTRIC VEHICLES.

Section 301 of the Energy Policy Act of 1992 (42 U.S.C.
13211) is amended--
(1) in paragraph (3), by striking ``or a dual fueled
vehicle'' and inserting ``, a dual fueled vehicle, or a
neighborhood electric vehicle'';
(2) by striking ``and'' at the end of paragraph (13);
(3) by striking the period at the end of paragraph (14) and
inserting ``; and''; and
(4) by adding at the end the following:
``(15) the term `neighborhood electric vehicle' means a
motor vehicle--
``(A) which meets the definition of a low-speed vehicle, as
such term is defined in part 571 of title 49, Code of Federal
Regulations;

[[Page S5571]]

``(B) which meets the definition of a zero-emission
vehicle, as such term is defined in section 86.1702-99 of
title 40, Code of Federal Regulations;
``(C) which meets the requirements of Federal Motor Vehicle
Safety Standard No. 500; and
``(D) which has a top speed of not greater than 25 miles
per hour.''.

SEC. 704. CREDITS FOR MEDIUM AND HEAVY DUTY DEDICATED
VEHICLES.

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

SEC. 705. ALTERNATIVE FUEL INFRASTRUCTURE.

Section 508 of the Energy Policy Act of 1992 (42 U.S.C.
13258) is further amended by adding at the end the following:
``(f) Credit for Investment in Alternative Fuel
Infrastructure.--
``(1) Definitions.--In this subsection, the term
`qualifying infrastructure' means--
``(A) equipment required to refuel or recharge alternative
fueled vehicles;
``(B) facilities or equipment required to maintain, repair,
or operate alternative fueled vehicles;
``(C) such other activities the Secretary considers to
constitute an appropriate expenditure in support of the
operation, maintenance, or further widespread adoption of or
utilization of alternative fueled vehicles.
``(2) Issuance of Credits.--The Secretary shall issue a
credit to a fleet or covered person under this title for
investment in qualifying infrastructure if the qualifying
infrastructure is open to the general public during regular
business hours.
``(3) Amount.--For the purposes of credits under this
subsection--
``(A) 1 credit shall be equal to a minimum investment of
$25,000 in cash or equivalent expenditure, as determined by
the Secretary; and
``(B) except in the case of a Federal or State fleet, no
part of the investment may be provided by Federal or State
funds.
``(4) Use of Credits.--At the request of a fleet or covered
person allocated a credit under this subsection, the
Secretary shall, for the year in which the investment is
made, treat that credit as the acquisition of 1 alternative
fueled vehicle that the fleet or covered person is required
to acquire under this title.''.

SEC. 706. 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. 707. REVIEW OF ALTERNATIVE FUEL PROGRAMS.

(a) In General.--Not later than 1 year 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 the development of alternative fueled vehicle
technology, its availability in the market, and the cost of
light duty motor vehicles that are alternative fueled
vehicles.
(b) Topics.--As part of such study, 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 amount, by type, of alternative fuel actually used
in alternative fueled vehicles acquired by fleets or covered
persons;
(3) the amount of petroleum displaced by the use of
alternative fuels in alternative fueled vehicles acquired by
fleets or covered persons;
(4) the cost of compliance with vehicle acquisition
requirements by fleets or covered persons; and
(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.
(c) Report.--Upon completion of the study, the Secretary
shall submit to the Congress a report that describes the
results of the study conducted under this section 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.). Such study
shall be updated on a regular basis as deemed necessary by
the Secretary.

SEC. 708. HIGH OCCUPANCY VEHICLE EXCEPTION.

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

SEC. 709. ALTERNATIVE COMPLIANCE AND FLEXIBILITY.

(a) Alternative Compliance.--Title V of the Energy Policy
Act of 1992 is amended by adding at the end the following:

``SEC. 515. ALTERNATIVE COMPLIANCE.

``(a) Application for Waiver.--Any covered person subject
to the requirements of section 501 and any State subject to
the requirement of section 507(o) may petition the Secretary
for a waiver of the applicable requirements of section 501 or
507(o).
``(b) Grant of Waiver.--The Secretary may grant a waiver of
the requirements of section 501 or 507(o) upon a showing that
the fleet owned, operated, leased, or otherwise controlled by
the State or covered person--
``(1) will achieve a reduction in its annual consumption of
petroleum fuels equal to the reduction in consumption of
petroleum that would result from compliance with section 501
or 507(o); and
``(2) is in compliance with all applicable vehicle emission
standards established by the Administrator under the Clean
Air Act.
``(c) Revocation of Waiver.--The Secretary shall revoke any
waiver granted under this section if the State or covered
person fails to comply with the requirements of subsection
(b).''.
(b) Credit for Hybrid Vehicles, Dedicated Alternative Fuel
Vehicles, and Infrastructure.--Section 507 of the Energy
Policy Act of 1992 (42 U.S.C. 13258) (as amended by section
705) is amended by adding at the end the following:
``(r) Credits for New Qualified Hybrid Motor Vehicles.--
``(1) Definitions.--In this subsection:
``(A) 2000 model year city fuel efficiency.--The term `2000
model year city fuel efficiency', with respect to a motor
vehicle, means fuel efficiency determined in accordance with
the following tables:
``(i) In the case of a passenger automobile:
``If vehicle inertia weightThe 2000 model year city fuel efficiency is:
1,500 or 1,750 lbs.............................................43.7 mpg
2,000 lbs......................................................38.3 mpg
2,250 lbs......................................................34.1 mpg
2,500 lbs......................................................30.7 mpg
2,750 lbs......................................................27.9 mpg
3,000 lbs......................................................25.6 mpg
3,500 lbs......................................................22.0 mpg
4,000 lbs......................................................19.3 mpg
4,500 lbs......................................................17.2 mpg
5,000 lbs......................................................15.5 mpg
5,500 lbs......................................................14.1 mpg
6,000 lbs......................................................12.9 mpg
6,500 lbs......................................................11.9 mpg
7,000 to 8,500 lbs............................................11.1 mpg.

``(ii) In the case of a light truck:
``If vehicle inertia weightThe 2000 model year city fuel efficiency is:
1,500 or 1,750 lbs.............................................37.6 mpg
2,000 lbs......................................................33.7 mpg
2,250 lbs......................................................30.6 mpg
2,500 lbs......................................................28.0 mpg
2,750 lbs......................................................25.9 mpg
3,000 lbs......................................................24.1 mpg
3,500 lbs......................................................21.3 mpg
4,000 lbs......................................................19.0 mpg
4,500 lbs......................................................17.3 mpg
5,000 lbs......................................................15.8 mpg
5,500 lbs......................................................14.6 mpg
6,000 lbs......................................................13.6 mpg
6,500 lbs......................................................12.8 mpg
7,000 to 8,500 lbs............................................12.0 mpg.

``(B) Administrator.--The term `Administrator' means the
Administrator of the Environmental Protection Agency.
``(C) Energy storage device.--The term `energy storage
device' means an onboard rechargeable energy storage system
or similar storage device.
``(D) Fuel efficiency.--The term `fuel efficiency' means
the percentage increased fuel efficiency specified in table 1
in paragraph (2)(C) over the average 2000 model year city
fuel efficiency of vehicles in the same weight class.
``(E) Maximum available power.--The term `maximum available
power', with respect to a new qualified hybrid motor vehicle
that is a passenger vehicle or light truck, means the
quotient obtained by dividing--
``(i) the maximum power available from the electrical
storage device of the new qualified hybrid motor vehicle,
during a standard 10-second pulse power or equivalent test;
by
``(ii) the sum of--
``(I) the maximum power described in clause (i); and
``(II) the net power of the internal combustion or heat
engine, as determined in accordance with standards
established by the Society of Automobile Engineers.
``(F) Motor vehicle.--The term `motor vehicle' has the
meaning given the term in section 216 of the Clean Air Act
(42 U.S.C. 7550).
``(G) New qualified hybrid motor vehicle.--The term `new
qualified hybrid motor vehicle' means a motor vehicle that--
``(i) draws propulsion energy from both--
``(I) an internal combustion engine (or heat engine that
uses combustible fuel); and
``(II) an energy storage device;
``(ii) in the case of a passenger automobile or light
truck--

[[Page S5572]]

``(I) in the case of a 2001 or later model vehicle,
receives a certificate of conformity under the Clean Air Act
(42 U.S.C. 7401 et seq.) and produces emissions at a level
that is at or below the standard established by a qualifying
California standard described in section 243(e)(2) of the
Clean Air Act (42 U.S.C. 7583(e)(2)) for that make and model
year; and
``(II) in the case of a 2004 or later model vehicle, is
certified by the Administrator as producing emissions at a
level that is at or below the level established for Bin 5
vehicles in the Tier 2 regulations promulgated by the
Administrator under section 202(i) of the Clean Air Act (42
U.S.C. 7521(i)) for that make and model year vehicle; and
``(iii) employs a vehicle braking system that recovers
waste energy to charge an energy storage device.
``(H) Vehicle inertia weight class. The term `vehicle
inertia weight class' has the meaning given the term in
regulations promulgated by the Administrator for purposes of
the administration of title II of the Clean Air Act (42
U.S.C. 7521 et seq.).
``(2) Allocation.--
``(A) In general.--The Secretary shall allocate a partial
credit to a fleet or covered person under this title if the
fleet or person acquires a new qualified hybrid motor vehicle
that is eligible to receive a credit under each of the tables
in subparagraph (C).
``(B) Amount.--The amount of a partial credit allocated
under subparagraph (A) for a vehicle described in that
subparagraph shall be equal to the sum of--
``(i) the partial credits determined under table 1 in
subparagraph (C); and
``(ii) the partial credits determined under table 2 in
subparagraph (C).
``(C) Tables.--The tables referred to in subparagraphs (A)
and (B) are as follows:

``Table 1

``Partial credit for increased fuel efficiency: Amount of credit:
At least 125% but less than 150% of 2000 model year city fuel
efficiency...................................................0.14.

At least 150% but less than 175% of 2000 model year city fuel
efficiency...................................................0.21.

At least 175% but less than 200% of 2000 model year city fuel
efficiency...................................................0.28.

At least 200% but less than 225% of 2000 model year city fuel
efficiency...................................................0.35.

At least 225% but less than 250% of 2000 model year city fuel
efficiency..................................................0.50..

``Table 2

``Partial credit for `Maximum Available Power': Amount of credit:
At least 5% but less than 10%.................................0.125.

At least 10% but less than 20%................................0.250.

At least 20% but less than 30%................................0.375.

At least 30% or more.........................................0.500..

``(D) Use of credits.--At the request of a fleet or covered
person allocated a credit under this subsection, the
Secretary shall, for the year in which the acquisition of the
qualified hybrid motor vehicle is made, treat that credit as
the acquisition of 1 alternative fueled vehicle that the
fleet or covered person is required to acquire under this
title.
``(3) Regulations.--The Secretary shall promulgate
regulations under which any Federal fleet that acquires a new
qualified hybrid motor vehicle will receive partial credits
determined under the tables contained in paragraph (2)(C) for
purposes of meeting the requirements of section 303.
``(s) Credit for Substantial Contribution Towards Use of
Dedicated Vehicles in Noncovered Fleets.--
``(1) Definitions.--In this subsection:
``(A) Dedicated vehicle.--The term `dedicated vehicle'
includes--
``(i) a light, medium, or heavy duty vehicle; and
``(ii) a neighborhood electric vehicle.
``(B) Medium or heavy duty vehicle.--The term `medium or
heavy duty vehicle' includes a vehicle that--
``(i) operates solely on alternative fuel; and
``(ii) (I) in the case of a medium duty vehicle, has a
gross vehicle weight rating of more than 8,500 pounds but not
more than 14,000 pounds; or
``(II) in the case of a heavy duty vehicle, has a gross
vehicle weight rating of more than 14,000 pounds.
``(C) Substantial contribution.--The term `substantial
contribution' (equal to 1 full credit) means not less than
$15,000 in cash or in kind services, as determined by the
Secretary.
``(2) Issuance of credits.--The Secretary shall issue a
credit to a fleet or covered person under this title if the
fleet or person makes a substantial contribution toward the
acquisition and use of dedicated vehicles by a person that
owns, operates, leases, or otherwise controls a fleet that
is not covered by this title.
``(3) Multiple credits for medium and heavy duty dedicated
vehicles.--The Secretary shall issue 2 full credits to a
fleet or covered person under this title if the fleet or
person acquires a medium or heavy duty dedicated vehicle.
``(4) Use of credits.--At the request of a fleet or covered
person allocated a credit under this subsection, the
Secretary shall, for the year in which the acquisition of the
dedicated vehicle is made, treat that credit as the
acquisition of 1 alternative fueled vehicle that the fleet or
covered person is required to acquire under this title.
``(5) Limitation.--Per vehicle credits acquired under this
subsection shall not exceed the per vehicle credits allowed
under this section to a fleet for qualifying vehicles in each
of the weight categories (light, medium, or heavy duty).
``(t) Credit for Substantial Investment in Alternative Fuel
Infrastructure.--
``(1) Definitions.--In this section, the term `qualifying
infrastructure' means--
``(A) equipment required to refuel or recharge alternative
fueled vehicles;
``(B) facilities or equipment required to maintain, repair,
or operate alternative fueled vehicles;
``(C) training programs, educational materials, or other
activities necessary to provide information regarding the
operation, maintenance, or benefits associated with
alternative fueled vehicles; and
``(D) such other activities the Secretary considers to
constitute an appropriate expenditure in support of the
operation, maintenance, or further widespread adoption of or
utilization of alternative fueled vehicles.
``(2) Issuance of credits.--The Secretary shall issue a
credit to a fleet or covered person under this title for
investment in qualifying infrastructure if the qualifying
infrastructure is open to the general public during regular
business hours.
``(3) Amount.--For the purposes of credits under this
subsection--
``(A) 1 credit shall be equal to a minimum investment of
$25,000 in cash or in kind services, as determined by the
Secretary; and
``(B) except in the case of a Federal or State fleet, no
part of the investment may be provided by Federal or State
funds.
``(4) Use of credits.--At the request of a fleet or covered
person allocated a credit under this subsection, the
Secretary shall, for the year in which the investment is
made, treat that credit as the acquisition of 1 alternative
fueled vehicle that the fleet or covered person is required
to acquire under this title.''.
(c) Lease Condensate Fuels.--Section 301 of the Energy
Policy Act of 1992 (42 U.S.C. 13211) is amended--
(1) in paragraph (2), by inserting ``mixtures containing 50
percent or more by volume of lease condensate or fuels
extracted from lease condensate;'' after ``liquified
petroleum gas; '';
(2) in paragraph (15), by inserting ``mixtures containing
50 percent or more by volume of lease condensate or fuels
extracted from lease condensate; '' after ``liquified
petroleum gas; ''; and
(3) by adding at the end the following:
``(16) the term `lease condensate' means a mixture,
primarily of pentanes and heavier hydrocarbons, which is
recovered as a liquid from natural gas in lease separation
facilities.''.

Subtitle B--Automobile Fuel Economy

SEC. 711. AUTOMOBILE FUEL ECONOMY STANDARDS.

(a) Title 49 Amendment.--Section 32902(f) of title 49,
United States Code, is amended to read as follows:
``(f) Considerations.--When deciding maximum feasible
average fuel economy under this section, the Secretary of
Transportation shall consider the following matters:
``(1) technological feasibility;
``(2) economic practicability;
``(3) the effect of other motor vehicle standards of the
Government on fuel economy;
``(4) the need of the United States to conserve energy;
``(5) the effects of fuel economy standards on motor
vehicle and passenger safety; and
``(6) the effects of compliance with average fuel economy
standards on levels of employment in the United States.''.
(b) Clarification of Authority.--Section 32902(b) of title
49, United States Code, is amended by inserting before the
period at the end the following: ``or such other number as
the Secretary prescribes under subsection (c)''.
(c) Environmental Assessment.--When issuing final
regulations setting forth increased average fuel economy
standards under section 32902(a) or section 32902(c) of title
49, United States Code, the Secretary of Transportation shall
also issue an environmental assessment of the effects of the
increased standards on the environment under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
(d) Authorization of Appropriations.--For the purposes of
this section, there are authorized to be appropriated to the
Secretary of Transportation $5,000,000 for each of fiscal
years 2004 through 2008.

SEC. 712. DUAL-FUELED AUTOMOBILES.

(a) Manufacturing Incentives.--Section 32905 of title 49,
United States Code, is amended--
(1) in subsections (b) and (d), by striking ``1993-2004''
and inserting ``1993-2008'';
(2) in subsection (f), by striking ``2001'' and inserting
``2005''.
(3) in subsection (f)(1), by striking ``2004'' and
inserting ``2008'';
(4) in subsection (g), by striking ``September 30, 2000''
and inserting ``September 30, 2004''.
(b) Maximum Fuel Economy Increase.--Subsection (a)(1) of
section 32906 of title 49, United States Code, is amended--
(1) in subparagraph (A), by striking ``the model years
1993-2004'' and inserting ``model years 1993-2008''; and
(2) in subparagraph (B), by striking ``the model years
2005-2008'' and inserting ``model years 2009-2012''.

[[Page S5573]]

SEC. 713. FEDERAL FLEET FUEL ECONOMY.

Section 32917 of title 49, United States Code, is amended
to read as follows:

``Sec. 32917. Standards for executive agency automobiles.

``(a) Baseline Average Fuel Economy.--The head of each
executive agency shall determine, for all automobiles in the
agency's fleet of automobiles that were leased or bought as a
new vehicle in fiscal year 1999, the average fuel economy for
such automobiles. For the purposes of this section, the
average fuel economy so determined shall be the baseline
average fuel economy for the agency's fleet of automobiles.
``(b) Increase of Average Fuel Economy.--The head of an
executive agency shall manage the procurement of automobiles
for that agency in such a manner that not later than
September 30, 2005, the average fuel economy of the new
automobiles in the agency's fleet of automobiles is not less
than 3 miles per gallon higher than the baseline average fuel
economy determined under subsection (a) for that fleet.
``(c) Calculation of Average Fuel Economy.--Average fuel
economy shall be calculated for the purposes of this section
in accordance with guidance which the Secretary of
Transportation shall prescribe for the implementation of this
section.
``(d) Definitions.--In this section:
``(1) The term `automobile' does not include any vehicle
designed for combat-related missions, law enforcement work,
or emergency rescue work.
``(2) The term `executive agency' has the meaning given
that term in section 105 of title 5.
``(3) The term `new automobile', with respect to the fleet
of automobiles of an executive agency, means an automobile
that is leased for at least 60 consecutive days or bought, by
or for the agency, after September 30, 1999.''.

SEC. 714. RAILROAD EFFICIENCY.

(a) Establishment.--The Secretary of Energy, in cooperation
with the Secretary of Transportation and the Administrator of
the Environmental Protection Agency, shall establish a cost-
shared, public-private research partnership to develop and
demonstrate railroad locomotive technologies that increase
fuel economy, reduce emissions, and lower costs of operation.
Such partnership shall involve the Federal Government,
railroad carriers, locomotive manufacturers and equipment
suppliers, and the Association of American Railroads.
(b) Authorization of Appropriations.--For the purposes of
this section, there are authorized to be appropriated to the
Secretary of Energy $25,000,000 for fiscal year 2004,
$35,000,000 for fiscal year 2005, and $50,000,000 for fiscal
year 2006.

SEC. 715. REDUCTION OF ENGINE IDLING IN HEAVY-DUTY VEHICLES.

(a) Identification.--Not later than 180 days after the date
of enactment of this section, the Secretary of Energy, in
consultation with the Secretary of Transportation and the
Administrator of the Environmental Protection Agency, shall
commence a study to analyze the potential fuel savings and
emissions reductions resulting from use of idling reduction
technologies as they are applied to heavy-duty vehicles. Upon
completion of the study, the Secretary of Energy shall, by
rule, certify those idling reduction technologies with the
greatest economic or technical feasibility and the greatest
potential for fuel savings and emissions reductions, and
publish a list of such certified technologies in the Federal
Register.
(b) Vehicle Weight Exemption.--Section 127(a) of Title 23,
United States Code, is amended by adding at the end the
following:
``In order to promote reduction of fuel use and emissions
due to engine idling, the maximum gross vehicle weight limit
and the axle weight limit for any motor vehicle equipped with
an idling reduction technology certified by the U.S.
Department of Energy will be increased by an amount necessary
to compensate for the additional weight of the idling
reduction system, provided that the weight increase shall be
no greater than 400 pounds.''
(c) Definitions.--For the purposes of this section:
(1) The term ``idling reduction technology'' means a device
or system of devices utilized to reduce long-duration idling
of a vehicle.
(2) The term ``heavy-duty vehicle'' means a vehicle that
has a gross vehicle weight rating greater than 8,500 pounds
and is powered by a diesel engine.
(3) The term ``long-duration idling'' means the operation
of a main drive engine, for a period greater than 30
consecutive minutes, where the main drive engine is not
engaged in gear. Such term does not apply to routine
stoppages associated with traffic movement or congestion.

TITLE VIII--HYDROGEN

Subtitle A--Basic Research Programs

SEC. 801. SHORT TITLE.

This subtitle may be cited as the ``George E. Brown, Jr.
and Robert S. Walker Hydrogen Future Act of 2003''.

SEC. 802. MATSUNAGA ACT AMENDMENT.

The Spark M. Matsunaga Hydrogen Research, Development, and
Demonstration Act of 1990 (42 U.S.C. 12401 et seq.) is
amended by striking sections 102 through 109 and inserting
the following:

``SEC. 102. DEFINITIONS.

In this Act--
``(a) the term `advisory committee' means the Hydrogen and
Fuel Cell Technical Advisory Committee established under
section 107.
``(b) the term `Department' means the Department of Energy.
``(c) the term `fuel cell' means a device that directly
converts the chemical energy of a fuel into electricity by an
electrochemical process.
``(d) the term `infrastructure' means the equipment,
systems, or facilities used to produce, distribute, deliver,
or store hydrogen.
``(e) the term `Secretary' means the Secretary of Energy.

``SEC. 103. HYDROGEN RESEARCH AND DEVELOPMENT.

(a) In General.--The Secretary shall conduct a research and
development program on technologies related to the
production, distribution, storage, and use of hydrogen
energy, fuel cells, and related infrastructure.
(b) Goal.--The goal of such program shall be to enable the
safe, economic, and environmentally sound use of hydrogen
energy, fuel cells, and related infrastructure for
transportation, commercial, industrial, residential, and
electric power generation applications.
(c) Focus.--In carrying out activities under this section,
the Secretary shall focus on critical technical issues
including, but not limited to--
``(1) the production of hydrogen from diverse energy
sources, with emphasis on cost-effective production from
renewable energy sources;
``(2) the delivery of hydrogen, including safe delivery in
fueling stations and use of existing hydrogen pipelines;
``(3) the storage of hydrogen, including storage of
hydrogen in surface transportation;
``(4) fuel cell technologies for transportation, stationary
and portable applications, with emphasis on cost-reduction of
fuel cell stacks; and
``(5) the use of hydrogen energy and fuel cells, including
use in--
``(A) isolated villages, islands, and areas in which other
energy sources are not available or are very expensive; and
``(B) foreign markets, particularly where an energy
infrastructure is not well developed.
``(d) Codes and Standards.--The Secretary shall facilitate
the development of domestic and international codes and
standards and seek to resolve other critical regulatory and
technical barriers preventing the introduction of hydrogen
energy and fuel cells into the marketplace.
``(e) Solicitation.--The Secretary shall carry out the
research and development activities authorized under this
section through solicitation of proposals, and evaluation
using competitive merit review.
``(f) Cost Sharing. The Secretary shall require a
commitment from non-Federal sources of at least 20 percent of
the cost of proposed research and development projects. The
Secretary may reduce or eliminate the cost sharing
requirement--
``(1) if the Secretary determines that the research and
development is of a basic or fundamental nature, or
``(2) for technical analyses, outreach activities, and
educational programs that the Secretary does not expect to
result in a marketable product.

``SEC. 104. DEMONSTRATION PROGRAMS.

``(a) Requirement.--In conjunction with activities
conducted under section 103, the Secretary shall conduct
demonstrations of hydrogen energy and fuel cell technologies
in order to evaluate the commercial potential of such
technologies.
``(b) Solicitation.--The Secretary shall carry out the
demonstrations authorized under this section through
solicitation of proposals, and evaluation using competitive
merit review.
``(c) Cost Sharing.--The Secretary shall require a
commitment from non-Federal sources of at least 50 percent of
the costs directly relating to a demonstration project under
this section. The Secretary may reduce such non-Federal
requirement if the Secretary determines that the reduction is
appropriate considering the technological risks involved in
the project.

``SEC. 105. TECHNOLOGY TRANSFER.

``The Secretary shall conduct programs to--
``(a) transfer critical hydrogen energy and fuel cell
technologies to the private sector in order to promote wider
understanding of such technologies and wider use of research
progress under this Act;
``(b) to accelerate wider application of hydrogen energy
and fuel cell technologies in foreign countries in order to
increase the global market for the technologies and foster
global development without harmful environmental effects;
``(c) foster the exchange of generic, nonproprietary
information and technology developed pursuant to this Act,
among industry, academia, and the Federal agencies; and
``(d) inventory and assess the technical and commercial
viability of technologies related to production,
distribution, storage, and use of hydrogen energy and fuel
cells.

``SEC. 106. COORDINATION AND CONSULTATION.

``The Secretary shall have overall management
responsibility for carrying out programs under this Act. In
carrying out such programs, the Secretary--
``(a) shall establish a central point for the coordination
of all hydrogen energy and fuel cell research, development,
and demonstration activities of the Department;

[[Page S5574]]

``(b) in carrying out the Secretary's authorities pursuant
to this Act, shall consult with other Federal agencies as
appropriate, and may obtain the assistance of any Federal
agency, on a reimbursable basis or otherwise and with the
consent of such agency;
``(c) shall attempt to ensure that activities under this
Act do not unnecessarily duplicate any available research and
development results or displace or compete with privately
funded hydrogen and fuel cell energy activities.

``SEC. 107. ADVISORY COMMITTEE.

``(a) Establishment.--There is hereby established the
Hydrogen and Fuel Cell Technical Advisory Committee, to
advise the Secretary on the programs under this Act.
``(b) Membership.--The advisory committee shall be
comprised of not fewer than 12 nor more than 25 members
appointed by the Secretary based on their technical and other
qualifications from domestic industry, automakers,
universities, professional societies, Federal laboratories,
financial institutions, and environmental and other
organizations as the Secretary deems appropriate. The
advisory committee shall have a chairperson, who shall be
elected by the members from among their number.
``(c) Terms.--Members of the advisory committee shall be
appointed for terms of 3 years, with each term to begin not
later than 3 months after the date of enactment of the Energy
Policy Act of 2003, except that one-third of the members
first appointed shall serve for 1 year, and one-third of the
members first appointed shall serve for 2 years, as
designated by the Secretary at the time of appointment.
``(d) Review.--The advisory committee shall review and make
any necessary recommendations to the Secretary on--
``(1) implementation and conduct of programs under this
Act;
``(2) economic, technological, and environmental
consequences of the deployment of technologies related to
production, distribution, storage, and use of hydrogen
energy, and fuel cells;
``(3) means for resolving barriers to implementing hydrogen
and fuel cell technologies; and
``(4) the coordination plan and any updates thereto
prepared by the Secretary pursuant to section 108.
``(e) Response.--The Secretary shall consider any
recommendations made by the advisory committee, and shall
provide a response to the advisory committee within 30 days
after receipt of such recommendations. Such response shall
either describe the implementation of the advisory
committee's recommendations or provide an explanation of the
reasons that any such recommendations will not be
implemented.
``(f) Support.--The Secretary shall provide such staff,
funds and other support as may be necessary to enable the
advisory committee to carry out its functions. In carrying
out activities pursuant to this section, the advisory
committee may also obtain the assistance of any Federal
agency, on a reimbursable basis or otherwise and with the
consent of such agency.

``SEC. 108. COORDINATION PLAN.

``(a) Plan.--The Secretary, in consultation with other
Federal agencies, shall prepare and maintain on an ongoing
basis a comprehensive plan for activities under this Act.
``(b) Development.--In developing such plan, the Secretary
shall--
``(1) consider the guidance of the National Hydrogen Energy
Roadmap published by the Department in November 2002 and any
updates thereto;
``(2) consult with the advisory committee;
``(3) consult with interested parties from domestic
industry, automakers, universities, professional societies,
Federal laboratories, financial institutions, and
environmental and other organizations as the Secretary deems
appropriate.
``(c) Contents.--At a minimum, the plan shall provide--
``(1) an assessment of the effectiveness of the programs
authorized under this Act, including a summary of
recommendations of the advisory committee for improvements in
such programs;
``(2) a description of proposed research, development,
and demonstration activities planned by the Department for
the next five years;
``(3) a description of the role Federal laboratories,
institutions of higher education, small businesses, and other
private sector firms are expected to play in such programs;
``(4) cost and performance milestones that will be used to
evaluate the programs for the next five years; and
``(5) any significant technical, regulatory, and other
hurdles that stand in the way of achieving such cost and
performance milestones, and how the programs will address
those hurdles; and
``(6) to the extent practicable, an analysis of Federal,
State, local, and private sector hydrogen research,
development, and demonstration activities to identify areas
for increased intergovernmental and private-public sector
collaboration.
``(d) Report.--Not later than January 1, 2005, and
biennially thereafter, the Secretary shall transmit to
Congress the comprehensive plan developed for the programs
authorized under this Act, or any updates thereto.

``SEC. 109. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated to carry out the
purposes of this Act--
``(1) such sums as may be necessary for fiscal years 1992
through 2003;
``(2) $105,000,000 for fiscal year 2004;
``(3) $150,000,000 for fiscal year 2005;
``(4) $175,000,000 for fiscal year 2006;
``(5) $200,000,000 for fiscal year 2007; and
``(6) $225,000,000 for fiscal year 2008.''.

SEC. 803. HYDROGEN TRANSPORTATION AND FUEL INITIATIVE.

(a) Vehicle Technologies.--The Secretary shall carry out a
research, development, demonstration, and commercial
application program on advanced hydrogen-powered vehicle
technologies. Such program shall address--
(1) engine and emission control systems;
(2) energy storage, electric propulsion, and hybrid
systems;
(3) automotive materials;
(4) hydrogen-carrier fuels; and
(5) other advanced vehicle technologies.
(b) Hydrogen Fuel Initiative.--In coordination with the
program authorized in subsection (a), the Secretary of
Energy, in partnership with the private sector, shall conduct
a research, development, demonstration and commercial
application program designed to enable the rapid and
coordinated introduction of hydrogen-fueled vehicles and
associated infrastructure into commerce. Such program shall
address--
(1) production of hydrogen from diverse energy resources,
including--
(A) renewable energy resources;
(B) fossil fuels, in conjunction with carbon capture and
sequestration;
(C) hydrogen-carrier fuels; and
(D) nuclear energy;
(2) delivery of hydrogen or hydrogen-carrier fuels,
including--
(A) transmission by pipeline and other distribution
methods; and
(B) safe, convenient, and economic refueling of vehicles,
either at central refueling stations or through distributed
on-site generation;
(3) storage of hydrogen or hydrogen-carrier fuels,
including development of materials for safe and economic
storage in gaseous, liquid or solid forms at refueling
facilities or onboard vehicles; and
(4) development of advanced vehicle technologies, such as
efficient fuel cells and direct hydrogen combustion engines,
and related component technologies such as advanced materials
and control systems; and
(5) development of necessary codes, standards, and safety
practices to accompany the production, distribution, storage
and use of hydrogen or hydrogen-carrier fuels in
transportation.
(c) Matsunaga Act.--In carrying out programs and projects
under subsections (a) and (b), the Secretary shall ensure
that such programs and projects are consistent with, and do
not unnecessarily duplicate, activities carried out under the
programs authorized under the Spark M. Matsunaga Hydrogen
Research, Development, and Demonstration Act of 1990 (42
U.S.C. 12401 et seq.).
(d) Advisory Committee.--The Hydrogen and Fuel Cell
Technical Advisory Committee authorized under section 107 of
the Spark M. Matsunaga Hydrogen Research, Development, and
Demonstration Act of 1990 (42 U.S.C. 12408), as amended in
this title, shall also advise the Secretary on the programs
and activities carried out under this section.
(e) Solicitation.--The Secretary shall carry out the
programs authorized under this section through solicitation
of proposals, and evaluation using competitive merit review.
(f) Cost Sharing.--The Secretary shall require a commitment
from non-Federal sources of at least 50 percent of the costs
directly relating to a demonstration project under this
section. The Secretary may reduce such non-Federal
requirement if the Secretary determines that the reduction is
appropriate considering the technological risks involved in
the project.
(g) Authorization of Appropriations.--For the purposes of
this section, there are authorized to be appropriated to the
Secretary--
(1) for activities pursuant to subsection (a), to remain
available until expended--
(A) $100,000,000 for each of fiscal years 2004 and 2005;
(B) $110,000,000 for each of fiscal years 2006 and 2007;
and
(C) $120,000,000 for fiscal year 2008; and
(2) for activities pursuant to subsection (b), to remain
available until expended--
(A) $125,000,000 for fiscal year 2004;
(B) $150,000,000 for fiscal year 2005;
(C) $175,000,000 for fiscal year 2006;
(D) $200,000,000 for each of fiscal years 2007 and 2008.

SEC. 804. INTERAGENCY TASK FORCE AND COORDINATION PLAN.

(a) Establishment.--Not later than 120 days after the date
of enactment of this Act, the Secretary shall establish an
interagency task force to coordinate Federal hydrogen and
fuel cell energy activities.
(b) Composition.--The task force shall be chaired by a
designee of the Secretary, and shall include representatives
of--
(1) the Office of Science and Technology Policy;
(2) the Department of Transportation;
(3) the Department of Defense;
(4) the Department of Commerce (including the National
Institute for Standards and Technology);
(5) the Environmental Protection Agency;
(6) the National Aeronautics and Space Administration;
(7) the Department of State; and
(8) other Federal agencies as the Director considers
appropriate.
(c) Coordination Plan.--The task force shall prepare a
comprehensive coordination

[[Page S5575]]

plan for Federal hydrogen and fuel cell energy activities,
which shall include a summary of such activities.
(d) Report.--Not later than one year after it is
established, the task force shall report to Congress on the
coordination plan in subsection (c) and on the interagency
coordination of Federal hydrogen and fuel cell energy
activities.

SEC. 805. REVIEW BY THE NATIONAL ACADEMIES.

Not later than two years after the date of enactment of
this Act, and every four years thereafter, the Secretary
shall enter into a contract with the National Academies. Such
contract shall require the National Academies to perform a
review of the progress made through Federal hydrogen and fuel
cell energy programs and activities, including the need for
modified or additional programs, and to report to the
Congress on the results of such review. There are authorized
to be appropriated to the Secretary such sums as may be
necessary to carry out the requirements of this section.

Subtitle B--Demonstration Programs

SEC. 811. DEFINITIONS.

For the purposes of this subtitle and subtitle C--
(a) the term ``fuel cell'' means a device that directly
converts the chemical energy of a fuel into electricity by an
electrochemical process.
(b) the term ``hydrogen-carrier fuel'' means any
hydrocarbon fuel that is capable of being thermochemically
processed or otherwise reformed to produce hydrogen;
(c) the term ``infrastructure'' means the equipment,
systems, or facilities used to produce, distribute, deliver,
or store hydrogen or hydrogen-carrier fuels.
(d) the term ``institution of higher education'' has the
meaning given that term in section 101(a) of the Higher
Education Act of 1965 (20 U.S.C. 1001(a)).
(b) the term ``Secretary'' means the Secretary of Energy;

SEC. 812. HYDROGEN VEHICLE DEMONSTRATION PROGRAM.

(a) In General.--The Secretary shall establish a program
for demonstration and commercial application of hydrogen-
powered vehicles and associated hydrogen fueling
infrastructure in a variety of transportation-related
applications, including--
(1) fuel cell vehicles in light-duty vehicle fleets;
(2) heavy-duty fuel cell on-road and off-road vehicles,
including mass transit buses;
(3) use of hydrogen-powered vehicles and hydrogen fueling
infrastructure (including multiple hydrogen refueling
stations) along major transportation routes or in entire
regions; and
(4) other similar projects as the Secretary may deem
necessary to contribute to the rapid demonstration and
deployment of hydrogen-based technologies in widespread use
for transportation.
(b) Eligibility.--Federal, State, tribal, and local
governments, academic and other non-profit organizations,
private entities, and consortia of these entities shall be
eligible for these projects.
(c) Selection.--In selecting projects under this section,
the Secretary shall--
(1) consult with Federal, State, local and private fleet
managers to identify potential projects where hydrogen-
powered vehicles may be placed into service;
(2) identify not less than 10 sites at which to carry out
projects under this program, 2 of which must be based at
Federal facilities;
(3) select projects based on the following factors--
(A) geographic diversity;
(B) a diverse set of operating environments, duty cycles,
and likely weather conditions;
(C) the interest and capability of the participating
agencies, entities, or fleets;
(D) the availability and appropriateness of potential sites
for refueling infrastructure and for maintenance of the
vehicle fleet;
(E) the existence of traffic congestion in the area
expected to be served by the hydrogen-powered vehicles;
(F) proximity to non-attainment areas as defined in section
171 of the Clean Air Act (42 U.S.C. 7501); and
(G) such other criteria as the Secretary determines to be
appropriate in order to carry out the purposes of the
program.
(d) Infrastructure.--In funding projects under this
section, the Secretary shall also support the installation of
refueling infrastructure at sites necessary for success of
the project, giving preference to those infrastructure
projects that include co-production of both--
(1) hydrogen for use in transportation; and
(2) electricity that can be consumed on site.
(e) Operation and Maintenance Period.--Vehicles purchased
for projects under this section shall be operated and
maintained by the participating agencies or entities in
regular duty cycles for a period of not less than 12 months.
(f) Training and Technical Support.--In funding proposals
under this section, the Secretary shall also provide funding
for training and technical support as may be necessary to
assure the success of such projects, including training and
technical support in--
(1) the installation, operation, and maintenance of fueling
infrastructure;
(2) the operation and maintenance of fuel cell vehicles;
and
(3) data collection necessary to monitor project
performance.
(g) Cost-sharing.--Except as otherwise provided, the
Secretary shall require a commitment from non-Federal sources
of at least 50 percent of the costs directly relating to a
demonstration project under this section. The Secretary may
reduce such non-Federal requirement if the Secretary
determines that the reduction is appropriate considering the
technological risks involved in the project.
(h) Authorization of Appropriations.--For the purposes of
this section, there are authorized to be appropriated to the
Secretary $50,000,000 for each of fiscal years 2006 through
2010, to remain available until expended.

SEC. 813. STATIONARY FUEL CELL DEMONSTRATION PROGRAM.

(a) In General.--The Secretary shall establish a program
for demonstration and commercial application of hydrogen fuel
cells in stationary applications, including--
(1) fuel cells for use in residential and commercial
buildings;
(2) portable fuel cells, including auxiliary power units in
trucks;
(3) small form and micro fuel cells of 20 watts or less;
(4) distributed generation systems with fuel cells using
renewable energy; and
(5) other similar projects as the Secretary may deem
necessary to contribute to the rapid demonstration and
deployment of hydrogen-based technologies in widespread use.
(b) Competitive Evaluation.--Proposals submitted in
response to solicitations issued pursuant to this section
shall be evaluated on a competitive basis using peer review.
The Secretary is not required to make an award under this
section in the absence of a meritorious proposal.
(c) Preference.--The Secretary shall give preference, in
making an award under this section, to proposals that--
(1) are submitted jointly from consortia that include two
or more participants from institutions of higher education,
industry, State, tribal, or local governments, and Federal
laboratories; and
(2) that reflect proven experience and capability with
technologies relevant to the projects proposed.
(d) Training and Technical Support.--In funding proposals
under this section, the Secretary shall also provide funding
for training and technical support as may be necessary to
assure the success of such projects, including training and
technical support in the installation, operation, and
maintenance of fuel cells and the collection of data to
monitor project performance.
(e) Cost-Sharing.--Except as otherwise provided, the
Secretary shall require a commitment from non-Federal sources
of at least 50 percent of the costs directly relating to a
demonstration project under this section. The Secretary may
reduce such non-Federal requirement if the Secretary
determines that the reduction is appropriate considering the
technological risks involved in the project.
(f) Authorization of Appropriations.-- For the purposes of
this section, there are authorized to be appropriated to the
Secretary $50,000,000 for each of fiscal years 2006 through
2010, to remain available until expended.

SEC. 814. HYDROGEN DEMONSTRATION PROGRAMS IN NATIONAL PARKS.

(a) Study.--Not later than 1 year after the date of
enactment of this section, the Secretary of the Interior and
the Secretary of Energy shall jointly study and report to
Congress on--
(1) the energy needs and uses at National Parks; and
(2) the potential for fuel cell and other hydrogen-based
technologies to meet such energy needs in--
(A) stationary applications, including power generation,
combined heat and power for buildings and campsites, and
standby and backup power systems; and
(B) transportation-related applications, including support
vehicles, passenger vehicles and heavy-duty trucks and buses.
(b) Pilot Projects.--Based on the results of the study
conducted under subsection (a), the Secretary of the Interior
shall fund not fewer than 3 pilot projects in national parks
to provide for demonstration of fuel cells or other hydrogen-
based technologies in those applications where the greatest
potential for such use in National Parks has been identified.
Such pilot projects shall be geographically distributed
throughout the United States.
(c) Definition.--For the purpose of this section, the term
``National Parks'' means those areas of land and water now or
hereafter administered by the Secretary of the Interior
through the National Park Service for park, monument,
historic, parkway, recreational, or other purposes.
(d) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of the Interior
$1,000,000 for fiscal year 2004, and $15,000,000 for fiscal
year 2005, to remain available until expended.

SEC. 815. INTERNATIONAL DEMONSTRATION PROGRAM.

(a) In General.--The Secretary, in consultation with the
Administrator of the U.S. Agency for International
Development, shall conduct demonstrations of fuel cells and
associated hydrogen fueling infrastructure in countries other
than the United States, particularly in areas where an energy
infrastructure is not already well developed.
(b) Eligible Technologies.--The program may demonstrate--
(1) fuel cell vehicles in light-duty vehicle fleets;

[[Page S5576]]

(2) heavy-duty fuel cell on-road and off-road vehicles;
(3) stationary fuel cells in residential and commercial
buildings; or
(4) portable fuel cells, including auxiliary power units in
trucks.
(c) Participants.--
(1) Eligibility.--Foreign nations, non-profit
organizations, and private companies shall be eligible for
these pilot projects.
(2) Cooperation.--Eligible entities may perform the
projects in cooperation with United States non-profit
organizations and private companies.
(3) Cost-sharing.--The Secretary may require a commitment
from participating private companies and from participating
foreign countries.
(d) Authorization of Appropriations.--For activities
conducted under this section, there are authorized to be
appropriated to the Secretary $25,000,000 for each of fiscal
years 2006 through 2010, to remain available until expended.

SEC. 816. TRIBAL STATIONARY HYBRID POWER DEMONSTRATION.

(a) In General.--Not later than 1 year after the date of
enactment of this Act, the Secretary, in cooperation with
Indian tribes, shall develop and transmit to Congress a
strategy for a demonstration and commercial application
program to develop hybrid distributed power systems on Indian
lands that combine--
(1) one renewable electric power generating technology of 2
megawatts or less located near the site of electric energy
use; and
(2) fuel cell power generation suitable for use in
distributed power systems.
(b) Definition.--For the purposes of this section, the
terms ``Indian tribe'' and ``Indian land'' have the meaning
given such terms under Title XXVI of the Energy Policy Act of
1992 (25 U.S.C. 3501 et seq.), as amended by this Act.
(c) Authorization of Appropriations.--For activities under
this section, there are authorized to be appropriated to the
Secretary of Energy $1,000,000 for fiscal year 2005, and
$5,000,000 for each of fiscal years 2006 through 2008.

SEC. 817. DISTRIBUTED GENERATION PILOT PROGRAM.

(a) Establishment.--The Secretary shall support a
demonstration program to develop, deploy, and commercialize
distributed generation systems to significantly reduce the
cost of producing hydrogen from renewable energy for use in
fuel cells. Such program shall provide the necessary
infrastructure to test these distributed generation
technologies at pilot scales in a real-world environment.
(b) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of Energy, to remain
available until expended, for the purposes of carrying out
this section:
(1) $10,000,000 for fiscal year 2004;
(2) $15,000,000 for fiscal year 2005; and
(3) $20,000,000 for each of fiscal years 2006 through 2008.

Subtitle C--Federal Programs

SEC. 821. PUBLIC EDUCATION AND TRAINING.

(a) Education.--The Secretary shall conduct a public
education program designed to increase public interest in and
acceptance of hydrogen energy and fuel cell technologies.
(b) Training.--The Secretary shall conduct a program to
promote university-based training in critical skills for
research in, production of, and use of hydrogen energy and
fuel cell technologies. Such program may include research
fellowships at institutions of higher education, centers of
excellence in critical technologies, internships in industry,
and such other measures as the Secretary deems appropriate.
(c) Authorization of Appropriations.--For activities
pursuant to this section, there are authorized to be
appropriated to the Secretary $7,000,000 for each of fiscal
years 2004 through 2008.

SEC. 822. HYDROGEN TRANSITION STRATEGIC PLANNING.

(a) In General.--Not later than September 30, 2004, the
head of each federal agency with annual outlays of greater
than $20,000,000 shall submit to the Director of the Office
of Management and Budget and to the Congress a hydrogen
transition strategic plan containing a comprehensive
assessment of how the transition to a hydrogen-based economy
could to assist the mission, operation and regulatory program
of the agency.
(b) Contents.--At a minimum, each plan shall contain--
(1) a description of areas within the agency's control
where using hydrogen and/or fuel cells could benefit the
operation of the agency, assist in the implementation of its
regulatory functions or enhance the agency's mission; and
(2) a description of any agency management practices,
procurement policies, regulations, policies, or guidelines
that may inhibit the agency's transition to use of fuel cells
and hydrogen as an energy source;
(c) Duration and Revision.--The strategic plan shall cover
a period of not less than the five years following the fiscal
year in which it is submitted, and shall be updated and
revised at least every three years.

SEC. 823. MINIMUM FEDERAL FLEET REQUIREMENT.

(a) Section 303(b) of the Energy Policy Act of 1992 (42
U.S.C. 13212(b)) is amended by adding at the end the
following:
``(4) Hydrogen Vehicles.--
``(A) Of the number of vehicles acquired under paragraph
(1)(D) by a Federal fleet of 100 or more vehicles, not less
than--
(i) 5 percent in fiscal years 2006 and 2007;
(ii) 10 percent in fiscal years 2008 and 2009;
(iii) 15 percent in fiscal years 2010 and 2011; and
(iv) 20 percent in fiscal years 2012 and thereafter,
shall be hydrogen-powered vehicles that meet standards for
performance, reliability, cost, and maintenance established
by the Secretary.
``(B) The Secretary may establish a lesser percentage, or
waive the requirement under subparagraph (A) for any fiscal
year entirely, if hydrogen-powered vehicles meeting the
standards set by the Secretary pursuant to subparagraph (A)
are not available at a purchase price that is less than 150
percent of the purchase price of other comparable alternative
fueled vehicles.
``(C) The Secretary may by rule, delay the implementation
of the requirements under subparagraph (A) in the event that
the Secretary determines that hydrogen-powered vehicles are
not commercially or economically available, or that fuel for
such vehicles is not commercially or economically available.
``(D) The Secretary, in consultation with the Administrator
of General Services, may for reasons of refueling
infrastructure use and cost optimization, elect to allocate
the acquisitions necessary to achieve the requirements in
subparagraph (A) to certain Federal fleets in lieu of
requiring each Federal fleet to achieve the requirements in
subparagraph (A).''.
(b) Refueling.--Section 304 of the Energy Policy Act of
1992 (42 U.S.C. 13213) is amended--
(1) by redesignating subsection (b) as subsection (c);
(2) in the second sentence of subsection (a), by striking
``If publicly'' and inserting the following:
``(b) Commercial Arrangements.--
``(1) In General.--If publicly''; and
(3) in subsection (b) (as designated by paragraph (2)), by
adding at the end the following:
``(2) Mandatory arrangements.--
``(A) In general.--In a case in which publicly available
fueling facilities are not convenient or accessible to the
locations of 2 or more Federal fleets for which hydrogen-
powered vehicles are required to be purchased under section
303(b)(4), the Federal agency for which the Federal fleets
are maintained (or the Federal agencies for which the Federal
fleets are maintained, acting jointly under a memorandum of
agreement providing for cost sharing) shall enter into a
commercial arrangement as provided in paragraph (1).
``(B) Sunset.--Subparagraph (A) ceases to be effective at
the end of fiscal year 2013.''.

SEC. 824. STATIONARY FUEL CELL PURCHASE REQUIREMENT.

(a) Requirement.--The President, acting through the
Secretary of Energy, shall seek to ensure that, to the extent
economically practicable and technically feasible, of the
total amount of electric energy the Federal Government
consumes during any fiscal year, the following amounts shall
be generated by fuel cells--
(1) not less than 1 percent in fiscal years 2006 through
2008;
(2) not less than 2 percent in fiscal years 2009 and 2010;
and
(3) not less than 3 percent in fiscal year 2011 and each
fiscal year thereafter.
(b) Compliance.--In complying with the requirements of
subsection (a), Federal agencies are encouraged to--
(1) use innovative purchasing practices;
(2) use fuel cells at the site of electricity usage and in
combined heat and power applications; and
(3) use fuel cells in stand alone power functions, such as
but not limited to battery power and backup power.
(c) Definitions.-- For purposes of this section--
(1) the term ``fuel cells'' means an integrated system
comprised of a fuel cell stack assembly and balance of plant
components that converts a fuel into electricity using an
electrochemical means.
(2) the term ``electrical energy'' includes on and off grid
power, including premium power applications, standby power
applications and electricity generation.
(d) Authorization of Appropriations.--For the purposes of
this section, there are authorized to be appropriated to the
Secretary of Energy $30,000,000 for fiscal years 2004,
$70,000,000 for fiscal year 2005, and $100,000,000 for each
of fiscal years 2006 and thereafter.

SEC. 825. DEPARTMENT OF ENERGY STRATEGY.

Not later than 1 year after the date of enactment of this
Act, the Secretary shall publish and transmit to Congress a
plan identifying critical technologies, enabling strategies
and applications, technical targets, and associated
timeframes that support the commercialization of hydrogen-
fueled fuel cell vehicles.

TITLE IX--RESEARCH AND DEVELOPMENT

SEC. 901. SHORT TITLE.

This Title may be cited as the ``Energy Research,
Development, Demonstration, and Commercial Application Act of
2003''.

SEC. 902. 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, focused on--
(1) increasing the efficiency of all energy intensive
sectors through conservation and improved technologies,

[[Page S5577]]

(2) promoting diversity of energy supply,
(3) decreasing the nation's dependence on foreign energy
supplies,
(4) improving United States energy security, and
(5) decreasing the environmental impact of energy-related
activities.
(b) Goals.--The Secretary shall publish measurable cost and
performance-based goals with each annual budget submission in
at least the following areas:
(1) energy efficiency for buildings, energy-consuming
industries, and vehicles;
(2) electric energy generation (including distributed
generation), transmission, and storage;
(3) renewable energy technologies including wind power,
photovoltaics, solar thermal systems, geothermal energy,
hydrogen-fueled systems, biomass-based systems, biofuels, and
hydropower;
(4) fossil energy including power generation, onshore and
offshore oil and gas resource recovery, and transportation;
and
(5) nuclear energy including programs for existing and
advanced reactors, and education of future specialists.
(c) Public Comment.--The Secretary shall provide mechanisms
for input on the annually published goals from industry,
university, and other public sources.
(d) Effect of Goals.--Nothing in subsection (a) or the
annually published goals creates any new authority for any
Federal agency, or may be used by a Federal agency to support
the establishment of regulatory standards or regulatory
requirements.

SEC. 903. DEFINITIONS.

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

Subtitle A--Energy Efficiency

SEC. 911. ENERGY EFFICIENCY.

(a) In General.--The following sums are authorized to be
appropriated to the Secretary for energy efficiency and
conservation research, development, demonstration, and
commercial application activities, including activities
authorized under this subtitle:
(1) for fiscal year 2004, $616,000,000;
(2) for fiscal year 2005, $695,000,000;
(3) for fiscal year 2006, $772,000,000;
(4) for fiscal year 2007, $865,000,000; and
(5) for fiscal year 2008, $920,000,000.
(b) Allocations.--From amounts authorized under subsection
(a), the following sums are authorized:
(1) For activities under section 912--
(A) for fiscal year 2004, $20,000,000; and
(B) for fiscal year 2005, $30,000,000.
(2) For activities under section 914--
(A) for fiscal year 2004, $4,000,000; and
(B) for each of fiscal years 2005 through 2008, $7,000,000.
(3) For activities under section 915--
(A) for fiscal year 2004, $20,000,000;
(B) for fiscal year 2005, $25,000,000;
(C) for fiscal year 2006, $30,000,000;
(D) for fiscal year 2007, $35,000,000; and
(E) for fiscal year 2008, $40,000,000.
(c) Extended Authorization.--There are authorized to be
appropriated to the Secretary for activities under section
912, $50,000,000 for each of fiscal years 2006 through 2013.
(d) None of the funds authorized to be appropriated under
this section may be used for--
(1) the promulgation and implementation of energy
efficiency regulations;
(2) the Weatherization Assistance Program under part A of
title IV of the Energy Conservation and Production Act;
(3) the State Energy Program under part D of title III of
the Energy Policy and Conservation Act; or
(4) the Federal Energy Management Program under part 3 of
title V of the National Energy Conservation Policy Act.

SEC. 912. NEXT GENERATION LIGHTING INITIATIVE.

(a) In General.--The Secretary shall carry out a Next
Generation Lighting Initiative in accordance with this
section to support research, development, demonstration, and
commercial application activities related to advanced solid-
state lighting technologies based on white light emitting
diodes.
(b) Objectives.--The objectives of the initiative shall be
to develop advanced solid-state organic and inorganic
lighting technologies based on white light emitting diodes
that, compared to incandescent and fluorescent lighting
technologies, are longer lasting; more energy-efficient;
cost-competitive and have less environmental impact.
(c) Industry Alliance.--The Secretary shall, within 3
months from the date of enactment of this section,
competitively select an Industry Alliance to represent
participants who are private, for-profit firms which, as a
group, are broadly representative of United States solid
state lighting research, development, infrastructure, and
manufacturing expertise as a whole.
(d) Research.--
(1) The Secretary shall carry out the research activities
of the Next Generation Lighting Initiative through
competitively awarded grants to researchers, including
Industry Alliance participants, national laboratories and
institutions of higher education.
(2) The Secretary shall annually solicit from the Industry
Alliance--
(A) comments to identify solid-state lighting technology
needs;
(B) assessment of the progress of the Initiative's research
activities; and
(C) assistance in annually updating solid-state lighting
technology roadmaps.
(3) The information and roadmaps under (2) shall be
available to the public.
(e) Development, Demonstration, and Commercial
Application.--The Secretary shall carry out a development,
demonstration, and commercial application program for the
Next Generation Lighting Initiative through competitively
selected awards. The Secretary may give preference to
participants of the Industry Alliance selected pursuant to
subsection (c).
(f) Cost Sharing.--The Secretary shall require cost sharing
according to 42 U.S.C. 13542.
(g) Intellectual Property.--The Secretary may require, in
accordance with the authorities provided in 35 U.S.C.
202(a)(ii), 42 U.S.C. 2182 and 42 U.S.C. 5908, that for any
new invention from subsection (d)--
(1) that the Industry Alliance members who are active
participants in research, development and demonstration
activities related to the advanced solid-state lighting
technologies that are the subject of this legislation shall
be granted first option to negotiate with the invention
owner, at least in the field of solid-state lighting, non-
exclusive licenses and royalties on terms that are reasonable
under the circumstances;
(2) that the invention owner must offer to negotiate
licenses with the Industry Alliance participants cited in
(1), in good faith, for at least 1 year after U.S. patents
are issued on any such new invention; and
(3) such other terms as the Secretary determines are
required to promote accelerated commercialization of
inventions made under the Initiative.
(h) National Academy Review.--The Secretary shall enter
into an arrangement with the National Academy of Sciences to
conduct periodic reviews of the Next Generation Lighting
Initiative.
(i) Definitions.--As used in this section:
(1) The term ``advanced solid-state lighting'' means a
semiconducting device package and delivery system that
produces white light using externally applied voltage.
(2) The term ``research'' includes basic research on the
technologies, materials and manufacturing processes required
for white light emitting diodes.
(3) The term ``Industry Alliance'' means an entity selected
by the Secretary under subsection (c).
(4) The term ``white light emitting diode'' means a
semiconducting package, utilizing either organic or inorganic
materials, that produces white light using externally applied
voltage.

SEC. 913. NATIONAL BUILDING PERFORMANCE INITIATIVE.

(a) Interagency Group.--Not later than 90 days after the
date of enactment of this Act, the Director of the Office of
Science and Technology Policy shall establish an interagency
group to develop, in coordination with the advisory committee
established under subsection (e), a National Building
Performance Initiative (in this section referred to as the
``Initiative''). The interagency group shall be co-chaired by
appropriate officials of the Department and the Department of
Commerce, who shall jointly arrange for the provision of
necessary administrative support to the group.
(b) Integration of Efforts.--The Initiative shall integrate
Federal, State, and voluntary private sector efforts to
reduce the costs of construction, operation, maintenance, and
renovation of commercial, industrial, institutional, and
residential buildings.
(c) Plan.--Not later than 1 year after the date of
enactment of this Act, the interagency group shall submit to
Congress a plan

[[Page S5578]]

for carrying out the appropriate Federal role in the
Initiative. The plan shall include--
(1) research, development, demonstration, and commercial
application of systems and materials for new construction and
retrofit relating to the building envelope and building
system components; and
(2) the collection, analysis, and dissemination of research
results and other pertinent information on enhancing building
performance to industry, government entities, and the public.
(d) Department of Energy Role.--Within the Federal portion
of the Initiative, the Department shall be the lead agency
for all aspects of building performance related to use and
conservation of energy.
(e) Advisory Committee.--The 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
(2) review and provide recommendations on the plan
described in subsection (c).
(f) Construction.--Nothing in this section provides any
Federal agency with new authority to regulate building
performance.

SEC. 914. SECONDARY ELECTRIC VEHICLE BATTERY USE PROGRAM.

(a) Definitions.--For purposes of this section:
(1) 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) 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.--The Secretary shall establish and conduct a
research, development, demonstration, and commercial
application program for the secondary use of batteries. Such
program shall be--
(1) designed to demonstrate the use of batteries in
secondary applications, including utility and commercial
power storage and power quality;
(2) structured to evaluate the performance, including
useful service life and costs, of such batteries in field
operations, and the necessary supporting infrastructure,
including reuse and disposal of batteries; and
(3) coordinated with ongoing secondary battery use programs
at the National Laboratories and in industry.
(c) Solicitation.--Not later than 180 days after the date
of the enactment of this Act, the Secretary shall solicit
proposals to demonstrate the secondary use of batteries and
associated equipment and supporting infrastructure in
geographic locations throughout the United States. The
Secretary may make additional solicitations for proposals if
the Secretary determines that such solicitations are
necessary to carry out this section.
(d) Selection of Proposals.--
(1) The Secretary shall, not later than 90 days after the
closing date established by the Secretary for receipt of
proposals under subsection (c), select up to 5 proposals
which may receive financial assistance under this section
once the Department is in receipt of appropriated funds.
(2) In selecting proposals, the Secretary shall consider
diversity of battery type, geographic and climatic diversity,
and life-cycle environmental effects of the approaches.
(3) No one project selected under this section shall
receive more than 25 percent of the funds authorized for this
Program.
(4) 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) The Secretary may consider such other criteria as the
Secretary considers appropriate.
(e) Conditions.--The Secretary shall require that--
(1) relevant information be provided to the Department, the
users of the batteries, the proposers, and the battery
manufacturers; and
(2) the proposer provide at least 50 percent of the costs
associated with the proposal.

SEC. 915. 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 the Congress,
along with the President's annual budget request under
section 1105(a) of title 31, United States Code, a report on
the activities of the Energy Efficiency Science Initiative,
including a description of the process used to award the
funds and an explanation of how the research relates to
energy efficiency.

Subtitle B--Distributed Energy and Electric Energy Systems

SEC. 921. DISTRIBUTED ENERGY AND ELECTRIC ENERGY SYSTEMS.

(a) In General.--
(1) The following sums are authorized to be appropriated to
the Secretary for distributed energy and electric energy
systems activities, including activities authorized under
this subtitle:
(A) for fiscal year 2004, $190,000,000;
(B) for fiscal year 2005, $200,000,000;
(C) for fiscal year 2006, $220,000,000;
(D) for fiscal year 2007, $240,000,000; and
(E) for fiscal year 2008, $260,000,000.
(2) For the Initiative in subsection 927(e), there are
authorized to be appropriated--
(A) for fiscal year 2004, $15,000,000;
(B) for fiscal year 2005, $20,000,000;
(C) for fiscal year 2006, $30,000,000;
(D) for fiscal year 2007, $35,000,000; and
(E) for fiscal year 2008, $40,000,000.
(b) Micro-Cogeneration Energy Technology.--From amounts
authorized under subsection (a), $20,000,000 for each of
fiscal years 2004 and 2005 shall be available for activities
under section 924.

SEC. 922. HYBRID DISTRIBUTED POWER SYSTEMS.

Not later than 1 year after the date of enactment of this
Act, the Secretary shall develop and transmit to the Congress
a strategy for a comprehensive research, development,
demonstration, and commercial application program to develop
hybrid distributed power systems that combine--
(1) one or more renewable electric power generation
technologies of 10 megawatts or less located near the site of
electric energy use; and
(2) nonintermittent electric power generation technologies
suitable for use in a distributed power system.

SEC. 923. HIGH POWER DENSITY INDUSTRY PROGRAM.

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

SEC. 924. MICRO-COGENERATION ENERGY TECHNOLOGY.

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

SEC. 925. DISTRIBUTED ENERGY TECHNOLOGY DEMONSTRATION
PROGRAM.

The Secretary, within the sums authorized under section
921(a)(1), may provide financial assistance to coordinating
consortia of interdisciplinary participants for
demonstrations designed to accelerate the utilization of
distributed energy technologies, such as fuel cells,
microturbines, reciprocating engines, thermally activated
technologies, and combined heat and power systems, in highly
energy intensive commercial applications.

SEC. 926. OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION.

(a) Creation of an Office of Electric Transmission and
Distribution.--Title II of the Department of Energy
Organization Act is amended by inserting the following after
section 217 (42 U.S.C. 7144d):

``OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION

``Sec. 218. (a) There is established within the Department
an Office of Electric Transmission and Distribution. This
Office shall be headed by a Director, who shall be appointed
by the Secretary. The Director shall be compensated at the
annual rate prescribed for level IV of the Executive Schedule
under section 5315 of title 5, United States Code.
``(b) The Director shall--
``(1) coordinate and develop a comprehensive, multi-year
strategy to improve the Nation's electricity transmission and
distribution;
``(2) ensure that the recommendations of the Secretary's
National Transmission Grid Study are implemented;
``(3) carry out the research, development, and
demonstration functions;
``(4) grant authorizations for electricity import and
export;
``(5) perform other electricity transmission and
distribution-related functions assigned by the Secretary; and
``(6) develop programs for workforce training in power and
transmission engineering.''.
(b) Conforming Amendments.--
(1) The table of contents of the Department of Energy Act
is amended by inserting after the item relating to section
217 the following new item:

``218. Office of Electric Transmission and Distribution.''.

(2) Section 5315 of title 5, United States Code, is amended
by inserting ``Director, Office of Electric Transmission and
Distribution, Department of Energy.'' after ``Inspector
General, Department of Energy.''.

SECTION 927. ELECTRIC TRANSMISSION AND DISTRIBUTION PROGRAMS.

(a) Demonstration Program.--The Secretary, acting through
the Director of the Office of Electric Transmission and
Distribution, shall establish a comprehensive research,
development, and demonstration program to ensure the
reliability, efficiency, and environmental integrity of
electrical transmission and distribution systems. This
program shall include--
(1) advanced energy and 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;

[[Page S5579]]

(3) technologies contributing to significant load
reductions;
(4) advanced metering, load management, and control
technologies;
(5) technologies to enhance existing grid components;
(6) the development and use of high-temperature
superconductors to--
(A) enhance the reliability, operational flexibility, or
power-carrying capability of electric transmission or
distribution systems; or
(B) increase the efficiency of electric energy generation,
transmission, distribution, or storage systems;
(7) integration of power systems, including systems to
deliver high-quality electric power, electric power
reliability, and combined heat and power;
(8) supply of electricity to the power grid by small scale,
distributed and residential-based power generators;
(9) the development and use of advanced grid design,
operation and planning tools;
(10) any other infrastructure technologies, as appropriate;
and
(11) technology transfer and education.
(b) Program Plan.--Not later than 1 year after the date of
the enactment of this legislation, the Secretary, in
consultation with other appropriate Federal agencies, shall
prepare and transmit to Congress a 5-year program plan to
guide activities under this section. In preparing the program
plan, the Secretary shall consult with utilities, energy
services providers, manufacturers, institutions of higher
education, other appropriate State and local agencies,
environmental organizations, professional and technical
societies, and any other persons the Secretary considers
appropriate.
(c) Implementation.--The Secretary shall consider
implementing this program using a consortium of industry,
university and national laboratory participants.
(d) Report.--Not later than 2 years after the transmittal
of the plan under subsection (b), the Secretary shall
transmit a report to Congress describing the progress made
under this section and identifying any additional resources
needed to continue the development and commercial application
of transmission and distribution infrastructure technologies.
(e) Power Delivery Research Initiative.--The Secretary
shall establish a research, development and demonstration
initiative specifically focused on power delivery utilizing
components incorporating high temperature superconductivity.
(1) Goals of this Initiative shall be to--
(A) establish world-class facilities to develop high
temperature superconductivity power applications in
partnership with manufacturers and utilities;
(B) provide technical leadership for establishing
reliability for high temperature superconductivity power
applications including suitable modeling and analysis;
(C) facilitate commercial transition toward direct current
power transmission, storage, and use for high power systems
utilizing high temperature superconductivity; and
(D) facilitate the integration of very low impedance high
temperature superconducting wires and cables in existing
electric networks to improve system performance, power flow
control and reliability.
(2) The Initiative shall include--
(A) feasibility analysis, planning, research, and design to
construct demonstrations of superconducting links in high
power, direct current and controllable alternating current
transmission systems;
(B) public-private partnerships to demonstrate deployment
of high temperature superconducting cable into testbeds
simulating a realistic transmission grid and under varying
transmission conditions, including actual grid insertions;
and
(C) testbeds developed in cooperation with national
laboratories, industries, and universities to demonstrate
these technologies, prepare the technologies for commercial
introduction, and address cost or performance roadblocks to
successful commercial use.
(g) Transmission and Distribution Grid Planning and
Operations Initiative.--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. Goals of
this Initiative shall be to:
(1) develop and utilize a geographically distributed
Center, consisting of research universities and national
laboratories, with expertise and facilities to develop the
underlying theory and software for power system application,
and to assure commercial development in partnership with
software vendors and utilities;
(2) provide technical leadership in engineering and
economic analysis for reliability and efficiency of power
systems planning and operations in the presence of
competitive markets for electricity;
(3) model, simulate and experiment with new market
mechanisms and operating practices to understand and optimize
such new methods before actual use; and
(4) provide technical support and technology transfer to
electric utilities and other participants in the domestic
electric industry and marketplace.

Subtitle C--Renewable Energy

SEC. 931. RENEWABLE ENERGY.

(a) In General.--The following sums are authorized to be
appropriated to the Secretary for renewable energy research,
development, demonstration, and commercial application
activities, including activities authorized under this
subtitle:
(1) for fiscal year 2004, $480,000,000;
(2) for fiscal year 2005, $550,000,000;
(3) for fiscal year 2006, $610,000,000;
(4) for fiscal year 2007, $659,000,000; and
(5) for fiscal year 2008, $710,000,000.
(b) Bioenergy.--From the amounts authorized under
subsection (a), the following sums are authorized to be
appropriated to carry out section 932:
(1) for fiscal year 2004, $135,425,000;
(2) for fiscal year 2005, $155,600,000;
(3) for fiscal year 2006, $167,650,000;
(4) for fiscal year 2007, $180,000,000; and
(5) for fiscal year 2008, $192,000,000.
(c) Biodiesel Engine Testing.--From amounts authorized
under subsection (a), $5,000,000 is authorized to be
appropriated in each of fiscal years 2004 and 2008 to carry
out section 933.
(d) Concentrating Solar Power.--From amounts authorized
under subsection (a), the following sums are authorized to be
appropriated to carry out section 934:
(1) for fiscal year 2004, $20,000,000;
(2) for fiscal year 2005, $40,000,000; and
(2) for each of fiscal years 2006, 2007 and 2008,
$50,000,000.
(e) Limits on Use of Funds.--
(1) None of the funds authorized to be appropriated under
this section may be used for Renewable Support and
Implementation.
(2) Of the funds authorized under subsection (b), not less
than $5,000,000 for each fiscal year shall be made available
for grants to Historically Black Colleges and Universities,
Tribal Colleges, and Hispanic-Serving Institutions.
(f) Consultation.-- In carrying out this section, the
Secretary, in consultation with the Secretary of Agriculture,
shall demonstrate the use of advanced wind power technology,
including combined use with coal gasification; biomass;
geothermal energy systems; and other renewable energy
technologies to assist in delivering electricity to rural and
remote locations.

SEC. 932. BIOENERGY PROGRAMS.

(a) In General.--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.
(b) Biofuels and Bioproducts.--The goals of the biofuels
and bioproducts programs shall be to develop, in partnership
with industry--
(1) advanced biochemical and thermo-chemical conversion
technologies capable of making fuels from cellulosic
feedstocks that are price-competitive with gasoline or diesel
in either internal combustion engines or fuel cell-powered
vehicles; and
(2) advanced biotechnology processes capable of making
biofuels and bioproducts with emphasis on development of
biorefinery technologies using enzyme-based processing
systems.
(c) Definition.--For purposes of (b), the term ``cellulosic
feedstock'' means any portion of a crop not normally used in
food production or any non-food crop grown for the purpose of
producing biomass feedstock.

SEC. 933. BIODIESEL ENGINE TESTING PROGRAM.

(a) In General.--Not later that 180 days after 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 study shall provide for testing to
determine the impact of biodiesel on current and future
emission control technologies, with emphasis on
(1) the impact of biodiesel on emissions warranty, in-use
liability, and anti-tampering provisions;
(2) the impact of long-term use of biodiesel on engine
operations;
(3) the options for optimizing these technologies for both
emissions and performance when switching between biodiesel
and diesel fuel; and
(4) the impact of using biodiesel in these fueling systems
and engines when used as a blend with 2006 Environmental
Protection Agency-mandated diesel fuel containing a maximum
of 15-parts-per-million sulfur content.
(c) Report.--Not later than 2 years after the date of
enactment, the Secretary shall provide an interim report to
Congress on the findings of this study, 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) Definition.--For purposes of this section, the term
``biodiesel'' means a diesel fuel substitute produced from
non-petroleum 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

[[Page S5580]]

D6751-02a ``Standard Specification for Biodiesel Fuel (B100)
Blend Stock for Distillate Fuels.''

SEC. 934 CONCENTRATING SOLAR POWER RESEARCH PROGRAM.

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

SEC. 935. MISCELLANEOUS PROJECTS.

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

Subtitle D--Nuclear Energy

SEC. 941. NUCLEAR ENERGY.

(a) Core Programs.--The following sums are authorized to be
appropriated to the Secretary for nuclear energy research,
development, demonstration, and commercial application
activities, including activities authorized under this
subtitle, other than those described in subsection (b):
(1) for fiscal year 2004, $273,000,000;
(2) for fiscal year 2005, $305,000,000;
(3) for fiscal year 2006, $330,000,000;
(4) for fiscal year 2007, $355,000,000; and
(5) for fiscal year 2008, $495,000,000.
(b) Nuclear Infrastructure Support.--The following sums are
authorized to be appropriated to the Secretary for activities
under section 942(f):
(1) for fiscal year 2004, $125,000,000;
(2) for fiscal year 2005, $130,000,000;
(3) for fiscal year 2006, $135,000,000;
(4) for fiscal year 2007, $140,000,000; and
(5) for fiscal year 2008, $145,000,000.
(c) Allocations.--From amounts authorized under subsection
(a), the following sums are authorized:
(1) For activities under section 943--
(A) for fiscal year 2004, $140,000,000;
(B) for fiscal year 2005, $145,000,000;
(C) for fiscal year 2006, $150,000,000;
(D) for fiscal year 2007, $155,000,000; and
(E) for fiscal year 2008, $275,000,000.
(2) For activities under section 944--
(A) for fiscal year 2004, $33,000,000;
(B) for fiscal year 2005, $37,900,000;
(C) for fiscal year 2006, $43,600,000;
(D) for fiscal year 2007, $50,100,000; and
(E) for fiscal year 2008, $56,000,000.
(3) For activities under section 946, for each of fiscal
years 2004 through 2008, $6,000,000.
(d) None of the funds authorized under this section may be
used for decommissioning the Fast Flux Test Facility.

SEC. 942. NUCLEAR ENERGY RESEARCH PROGRAMS.

(a) Nuclear Energy Research Initiative.--The Secretary
shall carry out a Nuclear Energy Research Initiative for
research and development related to nuclear energy.
(b) Nuclear Energy Plant Optimization Program.--The
Secretary shall carry out a Nuclear Energy Plant Optimization
Program to support research and development activities
addressing reliability, availability, productivity, component
aging, safety and security of existing nuclear power plants.
(c) Nuclear Power 2010 Program.--The Secretary shall carry
out a Nuclear Power 2010 Program, consistent with
recommendations in the October 2001 report entitled ``A
Roadmap to Deploy New Nuclear Power Plants in the United
States by 2010'' issued by the Nuclear Energy Research
Advisory Committee of the Department. The Program shall
include--
(1) utilization of the expertise and capabilities of
industry, universities, and National Laboratories in
evaluation of advanced nuclear fuel cycles and fuels testing;
(2) consideration of a variety of reactor designs suitable
for both developed and developing nations;
(3) participation of international collaborators in
research, development, and design efforts as appropriate; and
(4) encouragement for university and industry
participation.
(d) Generation IV Nuclear Energy Systems Initiative.--The
Secretary shall carry out a Generation IV Nuclear Energy
Systems Initiative to develop an overall technology plan and
to support research and development necessary to make an
informed technical decision about the most promising
candidates for eventual commercial application. The
Initiative shall examine advanced proliferation-resistant and
passively safe reactor designs, including designs that--
(1) are economically competitive with other electric power
generation plants;
(2) have higher efficiency, lower cost, and improved safety
compared to reactors in operation on the date of enactment of
this Act;
(3) use fuels that are proliferation resistant and have
substantially reduced production of high-level waste per unit
of output; and
(4) 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 using thermo-chemical processes.
(f) Nuclear Infrastructure Support.--The Secretary shall
develop and implement a strategy for the facilities of the
Office of Nuclear Energy, Science, and Technology and shall
transmit a report containing the strategy along with the
President's budget request to the Congress for fiscal year
2006. Such strategy shall provide a cost-effective means
for--
(1) maintaining existing facilities and infrastructure, as
needed;
(2) closing unneeded facilities;
(3) making facility upgrades and modifications; and
(4) building new facilities.

SEC. 943. ADVANCED FUEL CYCLE INITIATIVE.

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

SEC. 944. UNIVERSITY NUCLEAR SCIENCE AND ENGINEERING SUPPORT.

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

[[Page S5581]]

portion of the operating and maintenance costs of a research
reactor at an institution of higher education used in the
research project.

SEC. 945. SECURITY OF NUCLEAR FACILITIES.

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

SEC. 946. ALTERNATIVES TO INDUSTRIAL RADIOACTIVE SOURCES.

(a) Survey.--Not later than August 1, 2004, the Secretary
shall provide to the Congress results of a survey of
industrial applications of large radioactive sources. The
survey shall--
(1) consider well-logging sources as one class of
industrial sources;
(2) include information on current domestic and
international Department, Department of Defense, State
Department and commercial programs to manage and dispose of
radioactive sources; and
(3) discuss 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.
(b) Plan.--In conjunction with the survey in subsection
(a), the Secretary shall establish a research and development
program to develop alternatives to such sources that reduce
safety, environmental, or proliferation risks to either
workers using the sources or the public. 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. Details of the program plan shall be provided to the
Congress by August 1, 2004.

Subtitle E--Fossil Energy

SEC. 951. FOSSIL ENERGY.

(a) In General.--The following sums are authorized to be
appropriated to the Secretary for fossil energy research,
development, demonstration, and commercial application
activities, including activities authorized under this
subtitle:
(1) for fiscal year 2004, $523,000,000;
(2) for fiscal year 2005, $542,000,000;
(3) for fiscal year 2006, $558,000,000;
(4) for fiscal year 2007, $585,000,000; and
(5) for fiscal year 2008, $600,000,000.
(b) Allocations.--From amounts authorized under subsection
(a), the following sums are authorized:
(1) For activities under section 952(b)(2), $28,000,000 for
each of the fiscal years 2004 through 2008.
(2) For activities under section 953--
(A) for fiscal year 2004, $12,000,000;
(B) for fiscal year 2005, $15,000,000; and
(C) for each of fiscal years 2006 through 2008,
$20,000,000.
(3) For activities under section 954, to remain available
until expended,--
(A) for fiscal year 2004, $200,000,000;
(B) for fiscal year 2005, $210,000,000; and
(C) for fiscal year 2006, $220,500,000.
(4) For the Office of Arctic Energy under section 3197 of
the Floyd D. Spence National Defense Authorization Act for
Fiscal Year 2001 (Public Law 106-398), $25,000,000 for each
of fiscal years 2004 through 2008.
(c) Extended Authorization.--There are authorized to be
appropriated to the Secretary for the Office of Arctic Energy
under section 3197 of the Floyd D. Spence National Defense
Authorization Act for Fiscal Year 2001 (Public Law 106-398),
$25,000,000 for each of fiscal years 2009 through 2012.
(d) Limits on Use of Funds.--
(1) None of the funds authorized under this section may be
used for Fossil Energy Environmental Restoration or Import/
Export Authorization.
(2) Of the funds authorized under subsection (b)(2), not
less than 20 percent of the funds appropriated for each
fiscal year shall be dedicated to research and development
carried out at institutions of higher education.

SEC. 952. OIL AND GAS RESEARCH PROGRAMS.

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

SEC. 953. RESEARCH AND DEVELOPMENT FOR COAL MINING
TECHNOLOGIES.

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

SEC. 954. COAL AND RELATED TECHNOLOGIES PROGRAM.

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

SEC. 955. COMPLEX WELL TECHNOLOGY TESTING FACILITY.

The Secretary of Energy, 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.

[[Page S5582]]

Subtitle F--Science

SEC. 961. SCIENCE.

(a) In General.--The following sums are authorized to be
appropriated to the Secretary for research, development,
demonstration, and commercial application activities of the
Office of Science, including activities authorized under this
subtitle, including the amounts authorized under the
amendment made by section 967(c)(2)(D), and including basic
energy sciences, advanced scientific and computing research,
biological and environmental research, fusion energy
sciences, high energy physics, nuclear physics, and research
analysis and infrastructure support:
(1) for fiscal year 2004, $3,785,000,000;
(2) for fiscal year 2005, $4,153,000,000;
(3) for fiscal year 2006, $4,586,000,000
(4) for fiscal year 2007, $5,000,000,000; and
(5) For fiscal year 2008, $5,400,000,000.
(b) Allocations.--From amounts authorized under subsection
(a), the following sums are authorized:
(1) For activities of the Fusion Energy Sciences Program,
including activities under section 962--
(A) for fiscal year 2004, $335,000,000;
(B) for fiscal year 2005, $349,000,000;
(C) for fiscal year 2006, $362,000,000;
(D) for fiscal year 2007, $377,000,000; and
(E) for fiscal year 2008, $393,000,000.
(2) For the Spallation Neutron Source--
(A) for construction in fiscal year 2004, $124,600,000;
(B) for construction in fiscal year 2005, $79,800,000; and
(C) for completion of construction in fiscal year 2006,
$41,100,000; and
(D) for other project costs (including research and
development necessary to complete the project, preoperations
costs, and capital equipment related to construction),
$103,279,000 for the period encompassing fiscal years 2003
through 2006, to remain available until expended through
September 30, 2006.
(3) For Catalysis Research activities under section 965--
(A) for fiscal year 2004, $33,000,000;
(B) for fiscal year 2005, $35,000,000;
(C) for fiscal year 2006, $36,500,000;
(D) for fiscal year 2007, $38,200,000; and
(E) for fiscal year 2008, $40,100,000.
(4) For Nanoscale Science and Engineering Research
activities under section 966--
(A) for fiscal year 2004, $270,000,000;
(B) for fiscal year 2005, $290,000,000;
(C) for fiscal year 2006, $310,000,000;
(D) for fiscal year 2007, $330,000,000; and
(E) for fiscal year 2008, $375,000,000.
(5) For activities under subsection 966(c), from the
amounts authorized under subparagraph (4)--
(A) for fiscal year 2004, $135,000,000;
(B) for fiscal year 2005, $150,000,000;
(C) for fiscal year 2006, $120,000,000;
(D) for fiscal year 2007, $100,000,000; and
(E) for fiscal year 2008, $125,000,000.
(6) For activities in the Genomes to Life Program under
section 968--
(A) for fiscal year 2004, $100,000,000;
(B) for fiscal year 2005, $170,000,000;
(C) for fiscal year 2006, $325,000,000;
(D) for fiscal year 2007, $415,000,000; and
(E) for fiscal year 2008, $455,000,000.
(7) For construction and ancillary equipment of the Genomes
to Life User Facilities under section 968(d), of funds
authorized under (6)--
(A) for fiscal year 2004, $16,000,000;
(B) for fiscal year 2005, $70,000,000;
(C) for fiscal year 2006, $175,000,000;
(D) for fiscal year 2007, $215,000,000; and
(E) for fiscal year 2008, $205,000,000.
(8) For activities in the Water Supply Technologies Program
under section 970, $30,000,000 for each of fiscal years 2004
through 2008.
(c) In addition to the funds authorized under subsection
(b)(1), the following sums are authorized for construction
costs associated with the ITER project under section 962--
(1) for fiscal year 2006, $55,000,000;
(2) for fiscal year 2007, $95,000,000; and
(3) for fiscal year 2008, $115,000,000.

SEC. 962. UNITED STATES PARTICIPATION IN ITER.

(a) Participation.--
(1) The Secretary of Energy is authorized to undertake full
scientific and technological cooperation in the International
Thermonuclear Experimental Reactor project (referred to in
this title as ``ITER'').
(2) In the event that ITER fails to go forward within a
reasonable period of time, the Secretary shall send to
Congress a plan, including costs and schedules, for
implementing the domestic burning plasma experiment known as
the Fusion Ignition Research Experiment. Such a plan shall be
developed with full consultation with the Fusion Energy
Sciences Advisory Committee and be reviewed by the National
Research Council.
(3) It is the intent of Congress that such sums shall be
largely for work performed in the United States and that such
work contributes the maximum amount possible to the U.S.
scientific and technological base.
(b) Planning.--
(1) Not later than 180 days of the date of enactment of
this act, the Secretary shall present to Congress a plan,
with proposed cost estimates, budgets and potential
international partners, for the implementation of the goals
of this section. The plan shall ensure that--
(A) existing fusion research facilities are more fully
utilized;
(B) fusion science, technology, theory, advanced
computation, modeling and simulation are strengthened;
(C) new magnetic and inertial fusion research facilities
are selected based on scientific innovation, cost
effectiveness, and their potential to advance the goal of
practical fusion energy at the earliest date possible, and
those that are selected are funded at a cost-effective rate;
(D) communication of scientific results and methods between
the fusion energy science community and the broader
scientific and technology communities is improved;
(E) inertial confinement fusion facilities are utilized to
the extent practicable for the purpose of inertial fusion
energy research and development; and
(F) attractive alternative inertial and magnetic fusion
energy approaches are more fully explored.
(2) Such plan shall also address the status of and, to the
degree possible, costs and schedules for--
(A) in coordination with the program in section 969, the
design and implementation of international or national
facilities for the testing of fusion materials; and
(B) the design and implementation of international or
national facilities for the testing and development of key
fusion technologies.

SEC. 963. SPALLATION NEUTRON SOURCE.

(a) Definition.--For the purposes of this section, the term
``Spallation Neutron Source'' means Department Project 9909E
09334, Oak Ridge National Laboratory, Oak Ridge, Tennessee.
(b) Report.--The Secretary shall report on the Spallation
Neutron Source as part of the Department's annual budget
submission, including a description of the achievement of
milestones, a comparison of actual costs to estimated costs,
and any changes in estimated project costs or schedule.
(c) Authorization of Appropriations.--The total amount
obligated by the Department, including prior year
appropriations, for the Spallation Neutron Source may not
exceed--
(1) $1,192,700,000 for costs of construction;
(2) $219,000,000 for other project costs; and
(3) $1,411,700,000 for total project cost.

SEC. 964. SUPPORT FOR SCIENCE AND ENERGY FACILITIES AND
INFRASTRUCTURE.

(a) Facility and Infrastructure Policy.--The Secretary
shall develop and implement a strategy for facilities and
infrastructure supported primarily from the Office of
Science, the Office of Energy Efficiency and Renewable
Energy, the Office of Fossil Energy, or the Office of Nuclear
Energy, Science and Technology Programs at all national
laboratories and single-purpose research facilities. Such
strategy shall provide cost-effective means for--
(1) maintaining existing facilities and infrastructure, as
needed;
(2) closing unneeded facilities;
(3) making facility modifications; and
(4) building new facilities.
(b) Report.--
(1) The Secretary shall prepare and transmit, along with
the President's budget request to the Congress for fiscal
year 2006, a report containing the strategy developed under
subsection (a).
(2) For each national laboratory and single-purpose
research facility, for the facilities primarily used for
science and energy research, such report shall contain--
(A) the current priority list of proposed facilities and
infrastructure projects, including cost and schedule
requirements;
(B) a current ten-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. 965. CATALYSIS RESEARCH PROGRAM.

(A) Establishment.--The Secretary, through the Office of
Science, shall support a program of research and development
in catalysis science consistent with the Department's
statutory authorities related to research and development.
The program shall include efforts to--
(1) enable catalyst design using combinations of
experimental and mechanistic methodologies coupled with
computational modeling of catalytic reactions at the
molecular level;
(2) develop techniques for high throughput synthesis,
assay, and characterization at nanometer and sub-nanometer
scales in situ under actual operating conditions,
(3) synthesize catalysts with specific site architectures;
(4) conduct research on the use of precious metals for
catalysis; and
(5) translate molecular understanding to the design of
catalytic compounds.
(b) Duties of the Office of Science.--In carrying out this
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;

[[Page S5583]]

(3) support technology transfer activities to benefit
industry and other users of catalysis science and
engineering; and
(4) coordinate research and development activities with
industry and other federal agencies.
(c) Triennial Assessment.--The National Academy of Sciences
shall review the catalysis program every three years to
report on gains made in the fundamental science of catalysis
and its progress towards developing new fuels for energy
production and material fabrication processes.

SEC. 966. NANOSCALE SCIENCE AND ENGINEERING RESEARCH.

(a) Establishment.--The Secretary, acting through the
Office of Science, shall support a program of research,
development, demonstration, and commercial application in
nanoscience and nanoengineering. The program shall include
efforts to further the understanding of the chemistry,
physics, materials science, and engineering of phenomena on
the scale of nanometers and to apply this knowledge to the
Department's mission areas.
(b) Duties of the Office of Science.--In carrying out the
program under this section, the Office of Science shall--
(1) support both individual investigators and teams of
investigators, including multidisciplinary teams;
(2) carry out activities under subsection (c);
(3) support technology transfer activities to benefit
industry and other users of nanoscience and nanoengineering;
and
(4) coordinate research and development activities with
other DOE programs, industry and other Federal agencies.
(c) Nanoscience and Nanoengineering Research Centers and
Major Instrumentation.--
(1) The Secretary shall carry out projects to develop,
plan, construct, acquire, operate, or support special
equipment, instrumentation, or facilities for investigators
conducting research and development in nanoscience and
nanoengineering.
(2) Projects under paragraph (1) may include the
measurement of properties at the scale of nanometers,
manipulation at such scales, and the integration of
technologies based on nanoscience or nanoengineering into
bulk materials or other technologies.
(3) Facilities under paragraph (1) may include electron
microcharacterization facilities, microlithography
facilities, scanning probe facilities, and related
instrumentation.
(4) The Secretary shall encourage collaborations among DOE
programs, institutions of higher education, laboratories, and
industry at facilities under this subsection.

SEC. 967. ADVANCED SCIENTIFIC COMPUTING FOR ENERGY MISSIONS.

(a) In General.--The Secretary, acting through the Office
of Science, shall support a program to advance the Nation's
computing capability across a diverse set of grand challenge,
computationally based, science problems related to
departmental missions.
(b) Duties of the Office of Science.--In carrying out the
program under this section, the Office of Science shall--
(1) advance basic science through computation by developing
software to solve grand challenge science problems on new
generations of computing platforms in collaboration with
other DOE program offices;
(2) enhance the foundations for scientific computing by
developing the basic mathematical and computing systems
software needed to take full advantage of the computing
capabilities of computers with peak speeds of 100 teraflops
or more, some of which may be unique to the scientific
problem of interest;
(3) enhance national collaboratory and networking
capabilities by developing software to integrate
geographically separated researchers into effective research
teams and to facilitate access to and movement and analysis
of large (petabyte) data sets;
(4) maintain a robust scientific computing hardware
infrastructure to ensure that the computing resources needed
to address departmental missions are available; and
(5) explore new computing approaches and technologies that
promise to advance scientific computing including
developments in quantum computing.
(c) High-Performance Computing Act of 1991 Amendments.--The
High-Performance Computing Act of 1991 is amended--
(1) in section 4 (15 U.S.C. 5503)--
(A) in paragraph (3) by striking ``means'' and inserting
``and `networking and information technology' mean'', and by
striking ``(including vector supercomputers and large scale
parallel systems)''; and
(B) in paragraph (4), by striking ``packet switched''.
(2) in section 203 (15 U.S.C. 5523)--
(A) in subsection (a), by striking all after ``As part of
the'' and inserting--
``Networking and Information Technology Research and
Development Program, the Secretary of Energy shall conduct
basic and applied research in networking and information
technology, with emphasis on supporting fundamental research
in the physical sciences and engineering, and energy
applications; providing supercomputer access and advanced
communication capabilities and facilities to scientific
researchers; and developing tools for distributed scientific
collaboration.'';
(B) in subsection (b), by striking ``Program'' and
inserting ``Networking and Information Technology Research
and Development Program''; and
(C) by amending subsection (e) to read as follows:
``(e) Authorization of Appropriations.--There are
authorized to be appropriated to the Secretary of Energy to
carry out the Networking and Information Technology Research
and Development Program such sums as may be necessary for
fiscal years 2004 through 2008.''.
(d) Coordination.--The Secretary shall ensure that the
program under this section is integrated and consistent
with--
(1) the Accelerated Strategic Computing Initiative of the
National Nuclear Security Administration; and
(2) other national efforts related to advanced scientific
computing for science and engineering.

SEC. 968. GENOMES TO LIFE PROGRAM.

(a) Establishment.--The Secretary shall carry out a program
of research, development, demonstration, and commercial
application, to be known as the Genomes to Life Program, in
systems biology and proteomics consistent with the
Department's statutory authorities.
(b) Planning.--
(1) The Secretary shall prepare a program plan describing
how knowledge and capabilities would be developed by the
program and applied to Department missions relating to energy
security, environmental cleanup, and national security.
(2) The program plan will be developed in consultation with
other relevant Department technology programs.
(3) The program plan shall focus science and technology on
long-term goals, including--
(A) contributing to U.S. independence from foreign energy
sources, including production of hydrogen;
(B) converting carbon dioxide to organic carbon;
(C) advancing environmental cleanup;
(D) providing the science and technology for new
biotechnology industries; and
(E) improving national security and combating bioterrorism.
(4) The program plan shall establish specific short-term
goals and update these goals with the Secretary's annual
budget submission.
(c) Program Execution.--In carrying out the program under
this Act, the Secretary shall
(1) support individual investigators and multidisciplinary
teams of investigators;
(2) subject to subsection (d), develop, plan, construct,
acquire, or operate special equipment or facilities for the
use of investigators conducting research, development,
demonstration, or commercial application in systems biology
and proteomics;
(3) support technology transfer activities to benefit
industry and other users of systems biology and proteomics;
and
(4) coordinate activities by the Department with industry
and other federal agencies.
(d) Genomes to Life User Facilities and Ancillary
Equipment.--
(1) Within the funds authorized to be appropriated pursuant
to this Act, the amounts specified under section 961(b)(7)
shall, subject to appropriations, be available for projects
to develop, plan, construct, acquire, or operate special
equipment, instrumentation, or facilities for investigators
conducting research, development, demonstration, and
commercial application in systems biology and proteomics and
associated biological disciplines.
(2) Projects under paragraph (1) may include--
(A) the identification and characterization of multiprotein
complexes;
(B) characterization of gene regulatory networks;
(C) characterization of the functional repertoire of
complex microbial communities in their natural environments
at the molecular level; and
(D) development of computational methods and capabilities
to advance understanding of complex biological systems and
predict their behavior.
(3) Facilities under paragraph (1) may include facilities,
equipment, or instrumentation for--
(A) the production and characterization of proteins;
(B) whole proteome analysis;
(C) characterization and imaging of molecular machines; and
(D) analysis and modeling of cellular systems.
(4) The Secretary shall encourage collaborations among
universities, laboratories and industry at facilities under
this subsection. All facilities under this subsection shall
have a specific mission of technology transfer to other
institutions.

SEC. 969. FISSION AND FUSION ENERGY MATERIALS RESEARCH
PROGRAM.

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

SEC. 970. ENERGY-WATER SUPPLY TECHNOLOGIES PROGRAM.

(a) Establishment.--There is established within the Office
of Science, Office of Biological and Environmental Research,
the

[[Page S5584]]

``Energy-Water Supply Technologies Program,'' to study
energy-related issues associated with water resources and
municipal waterworks and to study water supply issues related
to energy production.
(b) Definitions.--
(1) The term ``Foundation'' means the American Water Works
Association Research Foundation.
(2) 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).
(3) The term ``Program'' means the Water Supply
Technologies Program established by section 970(a).
(c) Program Areas.-- The program shall conduct research and
development, including--
(1) arsenic removal under subsection (d);
(2) desalination research program under subsection (e);
(3) the water and energy sustainability program under
subsection (f); and
(4) other energy-intensive water supply and treatment
technologies and other technologies selected by the
Secretary.
(d) Arsenic Removal Program.--
(1) As soon as practicable after the date of enactment of
this Act, the Secretary shall enter into a contract with the
Foundation to utilize the facilities, institutions and
relationships established in the ``Consolidated
Appropriations Resolution, 2003'' as described in Senate
Report 107-220 that will carry out a research program to
develop and demonstrate innovative arsenic removal
technologies.
(2) In carrying out the arsenic removal program, the
Foundation shall, to the maximum extent practicable, conduct
research on means of--
(A) reducing energy costs incurred in using arsenic removal
technologies;
(B) minimizing materials, operating, and maintenance costs
incurred in using arsenic removal technologies; and
(C) minimizing any quantities of waste (especially
hazardous waste) that result from use of arsenic removal
technologies.
(3) The Foundation shall carry out peer-reviewed research
and demonstration projects to develop and demonstrate water
purification technologies.
(4) In carrying out the arsenic removal program--
(A) demonstration projects will be implemented with
municipal water system partners to demonstrate the
applicability of innovative arsenic removal technologies in
areas with different water chemistries representative of
areas across the United States with arsenic levels near or
exceeding EPA guidelines; and
(B) not less than 40 percent of the funds of the Department
used for demonstration projects under the arsenic removal
program shall be expended on projects focused on needs of and
in partnership with rural communities or Indian tribes.
(5) The Foundation shall develop evaluations of cost
effectiveness of arsenic removal technologies used in the
program and an education, training, and technology transfer
component for the program.
(6) The Secretary shall consult with the Administrator of
the Environmental Protection Agency to ensure that activities
under the arsenic removal program are coordinated with
appropriate programs of the Environmental Protection Agency
and other federal agencies, state programs and academia.
(7) Not later than 1 year after the date of commencement of
the arsenic removal program, and annually thereafter, the
Secretary shall submit to Congress a report on the results of
the arsenic removal program.
(e) Desalination Program.--
(1) The Secretary, in cooperation with the Commissioner of
Reclamation, shall carry out a desalination research program
in accordance with the desalination technology progress plan
developed in Title II of the Energy and Water Development
Appropriations Act, 2002 (115 Stat. 498), and described in
Senate Report 107-39 under the heading ``WATER AND RELATED
RESOURCES'' in the ``BUREAU OF RECLAMATION'' section.
(2) The desalination program shall--
(A) draw on the national laboratory partnership established
with the Bureau of Reclamation to develop the January 2003
national Desalination and Water Purification Technology
Roadmap for next-generation desalination technology;
(B) focus on research relating to, and development and
demonstration of, technologies that are appropriate for use
in desalinating brackish groundwater, wastewater and other
saline water supplies; disposal of residual brine or salt;
and
(C) consider the use of renewable energy sources.
(3) Under the desalination program, funds made available
may be used for construction projects, including completion
of the National Desalination Research Center for brackish
groundwater and ongoing facility operational costs.
(4) The Secretary and the Commissioner of Reclamation shall
jointly establish a steering committee for the desalination
program. The steering committee shall be jointly chaired by 1
representative from this Program and 1 representative from
the Bureau of Reclamation.
(f) Water and Energy Sustainability Program.--
(1) The Secretary shall carry out a research program to
develop understanding and technologies to assist in ensuring
that sufficient quantities of water are available to meet
present and future requirements.
(2) Under this program and in collaboration with other
programs within the Department including those within the
Offices of Fossil Energy and Energy Efficiency and Renewable
Energy, the Secretary of the Interior, Army Corps of
Engineers, Environmental Protection Agency, Department of
Commerce, Department of Defense, state agencies, non-
governmental agencies and academia, the Secretary shall
assess the current state of knowledge and program activities
concerning--
(A) future water resources needed to support energy
production within the United States including but not limited
to the water needs for hydropower and thermo-electric power
generation;
(B) future energy resources needed to support development
of water purification and treatment including desalination
and long-distance water conveyance;
(C) reuse and treatment of water produced as a by-product
of oil and gas extraction;
(D) use of impaired and non-traditional water supplies for
energy production and other uses; and
(E) technologies to reduce water use in energy production.
(3) In addition to the assessments in (2), the Secretary
shall--
(A) develop a research plan defining the scientific and
technology development needs and activities required to
support long-term water needs and planning for energy
sustainability, use of impaired water for energy production
and other uses, and reduction of water use in energy
production;
(B) carry out the research plan required under (A)
including development of numerical models, decision analysis
tools, economic analysis tools, databases, planning
methodologies and strategies;
(C) implement at least three planning demonstration
projects using the models, tools and planning approaches
developed under subparagraph (B) and assess the viability of
these tools at the scale of river basins with at least one
demonstration involving an international border; and
(D) transfer these tools to other federal agencies, state
agencies, non-profit organizations, industry and academia for
use in their energy and water sustainability efforts.
(4) Not later than 1 year after the date of enactment of
this Act, the Secretary shall submit to Congress a report on
the water and energy sustainability program that describes
the research elements described under paragraph (2), and
makes recommendations for a management structure that
optimizes use of Federal resources and programs.
(g) Cost Sharing.--
(1) Research projects under this section shall not require
cost-sharing.
(2) Each demonstration project carried out under the
Program shall be carried out on a cost-shared basis, as
determined by the Secretary.
(3) With respect to a demonstration project, the Secretary
may accept in-kind contributions, and waive the cost-sharing
requirement in appropriate circumstances.

Subtitle G--Energy and Environment

SEC. 971. UNITED STATES-MEXICO ENERGY TECHNOLOGY COOPERATION.

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

SEC. 972. COAL TECHNOLOGY LOAN.

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

Subtitle H--Management

SEC. 981. AVAILABILITY OF FUNDS.

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

SEC. 982. COST SHARING.

(a) Research and Development.--Except as otherwise provided
in this title, for research and development programs carried
out under this title, the Secretary shall require a
commitment from non-Federal sources of at least 20 percent of
the cost of

[[Page S5585]]

the project. Cost sharing is not required for research and
development of a basic or fundamental nature.
(b) Demonstration and Commercial Application.--Except as
otherwise provided in this subtitle, the Secretary shall
require at least 50 percent of the costs directly and
specifically related to any demonstration or commercial
application project under this subtitle to be provided from
non-Federal sources. The Secretary may reduce the non-Federal
requirement under this subsection if the Secretary determines
that the reduction is necessary and appropriate considering
the technological risks involved in the project and is
necessary to meet the objectives of this title.
(c) Calculation of Amount.--In calculating the amount of
the non-Federal commitment under subsection (a) or (b), the
Secretary may include personnel, services, equipment, and
other resources.

SEC. 983. MERIT REVIEW OF PROPOSALS.

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

SEC. 984. EXTERNAL TECHNICAL REVIEW OF DEPARTMENTAL PROGRAMS.

(a) National Energy Research and Development Advisory
Boards.--
(1) The Secretary shall establish one or more advisory
boards to review Department research, development,
demonstration, and commercial application programs in energy
efficiency, renewable energy, nuclear energy, and fossil
energy.
(2) The Secretary may designate an existing advisory board
within the Department to fulfill the responsibilities of an
advisory board under this subsection, and may enter into
appropriate arrangements with the National Academy of
Sciences to establish such an advisory board.
(b) Utilization of Existing Committees.--The Secretary
shall continue to use the scientific program advisory
committees chartered under the Federal Advisory Committee Act
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 Purposes.--Each advisory board under this
section shall meet at least semi-annually to review and
advise on the progress made by the respective research,
development, demonstration, and commercial application
program or programs. The advisory board shall also review the
measurable cost and performance-based goals for such programs
as established under section 902, and the progress on meeting
such goals.
(e) Periodic Reviews and Assessments.--The Secretary shall
enter into appropriate arrangements with the National Academy
of Sciences to conduct periodic reviews and assessments of
the programs authorized by this title, the measurable cost
and performance-based goals for such programs as established
under section 902, if any, and the progress on meeting such
goals. Such reviews and assessments shall be conducted every
5 years, or more often as the Secretary considers necessary,
and the Secretary shall transmit to the Congress reports
containing the results of all such reviews and assessments.

SEC. 985. IMPROVED COORDINATION OF TECHNOLOGY TRANSFER
ACTIVITIES.

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

SEC. 986. TECHNOLOGY INFRASTRUCTURE PROGRAM.

(a) Establishment.--The Secretary shall establish a
Technology Infrastructure Program in accordance with this
section.
(b) Purpose.--The purpose of the Technology Infrastructure
Program shall be to improve the ability of National
Laboratories and single-purpose research facilities to
support departmental missions by--
(1) stimulating the development of technology clusters that
can support departmental missions at the National
Laboratories or single-purpose research facilities;
(2) improving the ability of National Laboratories and
single-purpose research facilities to leverage and benefit
from commercial research, technology, products, processes,
and services; and
(3) encouraging the exchange of scientific and
technological expertise between National Laboratories or
single-purpose research facilities and entities that can
support departmental missions at the National Laboratories or
single-purpose research facilities, such as institutions of
higher education; technology-related business concerns;
nonprofit institutions; and agencies of State, tribal, or
local governments.
(c) Projects.--The Secretary shall authorize the Director
of each National Laboratory or single-purpose research
facility to implement the Technology Infrastructure Program
at such National Laboratory or facility through projects that
meet the requirements of subsections (d) and (e).
(d) Program Requirements.--Each project funded under this
section shall meet the following requirements:
(1) Each project shall include at least one of each of the
following entities: a business; an institution of higher
education; a nonprofit institution; and an agency of a State,
local, or tribal government.
(2) Not less than 50 percent of the costs of each project
funded under this section shall be provided from non-Federal
sources. The calculation of costs paid by the non-Federal
sources to a project shall include cash, personnel, services,
equipment, and other resources expended on the project after
start of the project. Independent research and development
expenses of Government contractors that qualify for
reimbursement under section 3109205 0918(e) of the Federal
Acquisition 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.
(3) All projects under this section shall be competitively
selected using procedures determined by the Secretary.
(4) Any participant that receives funds under this section
may use generally accepted accounting principles for
maintaining accounts, books, and records relating to the
project.
(5) No Federal funds shall be made available under this
section for construction or any project for more than 5
years.
(e) Selection Criteria.--
(1) 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) The Secretary shall consider the following criteria in
selecting a project to receive Federal funds--
(A) the potential of the project to promote the development
of a commercially sustainable technology cluster following
the period of Department investment, which will derive most
of the demand for its products or services from the private
sector, and which will support departmental missions at the
participating National Laboratory or single-purpose research
facility;
(B) the potential of the project to promote the use of
commercial research, technology, products, processes, and
services by the participating National Laboratory or single-
purpose research facility to achieve its mission or the
commercial development of technological innovations made at
the participating National Laboratory or single-purpose
research facility;
(C) the extent to which the project involves a wide variety
and number of institutions of higher education, nonprofit
institutions, and technology-related business concerns that
can support the missions of the participating National
Laboratory or single-purpose research facility and that will
make substantive contributions to achieving the goals of the
project;
(D) the extent to which the project focuses on promoting
the development of technology-related business concerns that
are small businesses or involves such small businesses
substantively in the project; and
(E) such other criteria as the Secretary determines to be
appropriate.
(f) Allocation.--In allocating funds for projects approved
under this section, the Secretary shall provide--
(1) the Federal share of the project costs; and
(2) additional funds to the National Laboratory or single-
purpose research facility managing the project to permit the
National Laboratory or single-purpose research facility to
carry out activities relating to the project, and to
coordinate such activities with the project.
(g) Report to Congress.--Not later than July 1, 2006, the
Secretary shall report to Congress on whether the Technology
Infrastructure Program should be continued and, if so, how
the program should be managed.
(h) Definitions.--In this section:
(1) The term ``technology cluster'' means a concentration
of technology-related business

[[Page S5586]]

concerns, institutions of higher education, or nonprofit
institutions, that reinforce each other's performance in the
areas of technology development through formal or informal
relationships.
(2) The term ``technology-related business concern'' means
a for-profit corporation, company, association, firm,
partnership, or small business concern that conducts
scientific or engineering research; develops new
technologies; manufactures products based on new
technologies; or performs technological services.
(i) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary for activities under this
section $10,000,000 for each of fiscal years 2004, 2005, and
2006.

SEC. 987. SMALL BUSINESS ADVOCACY AND ASSISTANCE.

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

SEC. 988. MOBILITY OF SCIENTIFIC AND TECHNICAL PERSONNEL.

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

SEC. 989. NATIONAL ACADEMY OF SCIENCES REPORT.

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

SEC. 990. OUTREACH.

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

SEC. 991. COMPETITIVE AWARD OF MANAGEMENT CONTRACTS.

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

SEC. 992. REPROGRAMMING.

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

SEC. 993. CONSTRUCTION WITH OTHER LAWS.

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

SEC. 994. IMPROVED COORDINATION AND MANAGEMENT OF CIVILIAN
SCIENCE AND TECHNOLOGY PROGRAMS.

(a) Effective Top-level Coordination of Research and
Development Programs.--Section 202(b) of the Department of
Energy Organization Act (42 U.S.C. 7132(b)) is amended to
read as follows:
``(b)(1) There shall be in the Department an Under
Secretary for Energy and Science, who shall be appointed by
the President, by and with the advice and consent of the
Senate. The Under Secretary shall be compensated at the rate
provided for at level III of the Executive Schedule under
section 5314 of title 5, United States Code.
``(2) The Under Secretary for Energy and Science shall be
appointed from among persons who--
``(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 of Energy.
``(3) The Under Secretary for Energy and Science shall--
``(A) serve as the Science and Technology Advisor to the
Secretary;
``(B) monitor the Department's research and development
programs in order to advise the Secretary with respect to any
undesirable duplication or gaps in such 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; and
``(F) exercise authority and responsibility over Assistant
Secretaries carrying out energy research and development and
energy technology functions under sections 203 and 209, as
well as other elements of the Department assigned by the
Secretary.''.
(b) Reconfiguration of Position of Director of the Office
of Science.--
(1) Section 209 of the Department of Energy Organization
Act (41 U.S.C. 7139) is amended to read as follows:

``OFFICE OF SCIENCE

``Sec. 209. (a) There shall be within the Department an
Office of Science, to be headed by an Assistant Secretary for
Science, who shall be appointed by the President, by and with
the advice and consent of the Senate, and who shall be
compensated at the rate provided for level IV of the
Executive Schedule under section 5315 of title 5, United
States Code.
``(b) The Assistant Secretary for Science shall be in
addition to the Assistant Secretaries provided for under
section 203 of this Act.

[[Page S5587]]

``(c) It shall be the duty and responsibility of the
Assistant Secretary for Science to carry out the fundamental
science and engineering research functions of the Department,
including the responsibility for policy and management of
such research, as well as other functions vested in the
Secretary which he may assign to the Assistant Secretary.''.
(2) Notwithstanding section 3345(b)(1) of title 5, United
States Code, the President may designate the Director of the
Office of Science immediately prior to the effective date of
this Act to act in the office of the Assistant Secretary of
Energy for Science until the office is filled as provided in
section 209 of the Department of Energy Organization Act, as
amended by paragraph (1). While so acting, such person shall
receive compensation at the rate provided by this Act for the
office of Assistant Secretary for Science.
(c) Additional Assistant Secretary Position to Enable
Improved Management of Nuclear Energy Issues.--
(1) Section 203(a) of the Department of Energy Organization
Act (42 U.S.C. 7133(a)) is amended by striking ``There shall
be in the Department six Assistant Secretaries'' and
inserting ``Except as provided in section 209, there shall be
in the Department seven Assistant Secretaries''.
(2) It is the sense of the Congress that the leadership for
departmental missions in nuclear energy should be at the
Assistant Secretary level.
(d) Technical and Conforming Amendments.--
(1) Section 202 of the Department of Energy Organization
Act (42 U.S.C. 7132) is further amended by adding the
following at the end:
``(d) There 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. 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) There 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. 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.''.
(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--
(A) striking ``Director, Office of Science, Department of
Energy.''; and
(B) striking ``Assistant Secretaries of Energy (6)'' and
inserting ``Assistant Secretaries of Energy (8)''.
(4) The table of contents for the Department of Energy
Organization Act (42 U.S.C. 7101 note) is amended--
(A) by striking ``Section 209'' and inserting ``Sec. 209'';
(B) by striking ``213.'' and inserting ``Sec. 213.'';
(C) by striking ``214.'' and inserting ``Sec. 214.'';
(D) by striking ``215.'' and inserting ``Sec. 215.''; and
(E) by striking ``216.'' and inserting ``Sec. 216.''.

SEC. 995. EDUCATIONAL PROGRAMS IN SCIENCE AND MATHEMATICS

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

SEC. 996. OTHER TRANSACTIONS AUTHORITY.

Section 646 of the Department of Energy Organization act
(42 U.S.C. 7256) is amended by adding at the end the
following:
``(g)(1) In addition to other authorities granted to the
Secretary under law, the Secretary may enter into other
transactions on such terms as the Secretary may deem
appropriate in furtherance of research, development, or
demonstration functions vested in the Secretary. Such other
transactions shall not be subject to the provisions of
section 9 of the Federal Nonnuclear Energy Research and
Development Act of 1974 (42 U.S.C. 5908).
``(2)(A) The Secretary shall ensure that
``(i) to the maximum extent the Secretary determines
practicable, no transaction entered into under paragraph (1)
provides for research, development, or demonstration that
duplicates research, development, or demonstration being
conducted under existing projects carried out by the
Department; and
``(ii) To the extent the Secretary determines practicable,
the funds provided by the Government under a transaction
authorized by paragraph (1) do not exceed the total amount
provided by other parties to the transaction.
``(iii) To the extent the Secretary determines practicable,
competitive, merit-based selection procedures shall be used
when entering into transactions under paragraph (1).
``(B) A transaction authorized by paragraph (1) may be used
for a research, development, or demonstration project only if
the Secretary determines the use of a standard contract,
grant, or cooperative agreement for the project is not
feasible or appropriate.
``(3)(A) The Secretary shall protect from disclosure,
including disclosure under section 552 of title 5, United
States Code, for up to 5 years after the date the information
is received by the Secretary--
``(i) a proposal, proposal abstract, and supporting
documents submitted to the Department in a competitive or
noncompetitive process having the potential for resulting in
an award to the party submitting the information entering
into a transaction under paragraph (1); and
``(ii) a business plan and technical information relating
to a transaction authorized by paragraph (1) submitted to the
Department as confidential business information.
``(B) The Secretary may protect from disclosure, for up to
5 years after the information was developed, any information
developed pursuant to a transaction under paragraph (1) which
developed information is of a character that it would be
protected from disclosure under section 552(b)(4) of title 5,
United States Code, if obtained from a person other than a
Federal agency.
``(4) Not later than 90 days after the date of enactment of
this section, the Secretary shall prescribe guidelines for
using other transactions authorized by the amendment under
subsection (a). Such guidelines shall be published in the
Federal Register for public comment under rulemaking
procedures of the Department.
``(5) The authority of the Secretary under this subsection
may be delegated only to an officer of the Department who is
appointed by the President by and with the advice and consent
of the Senate and may not be delegated to any other
person.''.

SEC. 997. REPORT ON RESEARCH AND DEVELOPMENT PROGRAM
EVALUATION METHODOLOGIES.

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

TITLE X--PERSONNEL AND TRAINING

SEC. 1001. WORKFORCE TRENDS AND TRAINEESHIP GRANTS.

(a) Workforce Trends.--
(1) The Secretary of Energy (in this title referred to as
the ``Secretary''), in consultation with the Secretary of
Labor and utilizing statistical data collected by the
Secretary of Labor, shall monitor trends in the workforce of
skilled technical personnel supporting energy technology
industries, including renewable energy industries, companies
developing and commercializing devices to increase energy
efficiency, the oil and gas industry, the nuclear power
industry, the coal industry, and other industrial sectors as
the Secretary may deem appropriate.
(2) The Secretary shall report to the Congress whenever the
Secretary determines that significant national shortfalls of
skilled technical personnel in one or more energy industry
segments are forecast or have occurred.
(b) Traineeship Grants for Skilled Technical Personnel.--
The Secretary, in consultation with the Secretary of Labor,
may establish grant programs in the appropriate offices of
the Department of Energy to enhance training of skilled
technical personnel for which a shortfall is determined under
subsection (a).
(c) Definition.--For purposes of this section, the term
``skilled technical personnel'' means journey and apprentice
level workers who are enrolled in or have completed a State
or federally recognized apprenticeship program and other
skilled workers in energy technology industries.
(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 2004 through
2008, to remain available until expended.

SEC. 1002. RESEARCH FELLOWSHIPS IN ENERGY RESEARCH.

(a) Postdoctoral Fellowships.--The Secretary shall
establish a program of 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) Distinguished Senior Research Fellowships.--The
Secretary shall establish a program of fellowships to allow
outstanding senior researchers in energy research and
development and their research groups to explore research and
development topics of their choosing for a fixed period of
time. Awards under this program shall be made on the basis of
past scientific or technical accomplishment and promise for
continued accomplishment during the period of support, which
shall not be less than 3 years.

[[Page S5588]]

(c) Authorization of Appropriations.--For the purposes of
this section, there are authorized to be appropriated to the
Secretary $40,000,000 for each of fiscal years 2004 through
2008, to remain available until expended.

SEC. 1003. TRAINING GUIDELINES FOR ELECTRIC ENERGY INDUSTRY
PERSONNEL.

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

SEC. 1004. NATIONAL CENTER ON ENERGY MANAGEMENT AND BUILDING
TECHNOLOGIES.

The Secretary shall support the establishment of a National
Center on Energy Management and Building Technologies, to
carry out research, education, and training activities to
facilitate the improvement of energy efficiency and indoor
air quality in industrial, commercial, and residential
buildings. The National Center shall be established by--
(1) recognized representatives of employees in the heating,
ventilation, and air-conditioning industry;
(2) contractors that install and maintain heating,
ventilation, and air-conditioning systems and equipment;
(3) manufacturers of heating, ventilation, and air-
conditioning systems and equipment;
(4) representatives of the advanced building envelope
industry, including design, windows, lighting, and insulation
industries; and
(5) other entities as the Secretary may deem appropriate.

SEC. 1005. IMPROVED ACCESS TO ENERGY-RELATED SCIENTIFIC AND
TECHNICAL CAREERS.

(a) Department of Energy Science Education Programs.--
Section 3164 of the Department of Energy Science Education
Enhancement Act (42 U.S.C. 7381a) is amended by adding at the
end the following:
``(c) Programs for Students From 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--
(1) by redesignating sections 3167 and 3168 as sections
3168 and 3169, respectively; and
(2) by inserting after section 3166 the following:

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

``(a) Definitions. In this section:
``(1) Hispanic-Serving Institution.--The term `Hispanic-
serving institution' has the meaning given that term in
section 502(a) of the Higher Education Act of 1965 (20 U.S.C.
1101a(a)).
``(2) Historically Black College or University.--The term
`historically Black college or university' has the meaning
given the term `part B institution' in section 322 of the
Higher Education Act of 1965 (20 U.S.C. 1061).
``(3) National Laboratory.--The term `National Laboratory'
has the meaning given that term in section 903(5) of the
Energy Policy Act of 2003.
``(4) Science Facility.--The term `science facility' has
the meaning given the term `single-purpose research facility'
in section 903(8) of the Energy Policy Act of 2003.
``(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 or University Assistance Act of 1978 (25 U.S.C.
1801(a)).
``(b) Education Partnership.--The Secretary shall direct
the Director of each National Laboratory, and may direct the
head of any science facility, to increase the participation
of historically Black colleges or universities, Hispanic-
serving institutions, or tribal colleges in activities that
increase the capacity of the historically Black colleges or
universities, Hispanic-serving institutions, or tribal
colleges to train personnel in science or engineering.
``(c) Activities.--An activity under subsection (b) may
include--
``(1) collaborative research;
``(2) equipment transfer;
``(3) training activities conducted at a National
Laboratory or science facility; and
``(4) mentoring activities conducted at a National
Laboratory or science facility.
``(d) Report.--Not later than 2 years after the date of
enactment of this section, the Secretary shall submit to the
Congress a report on the activities carried out under this
section.''.

SEC. 1006. NATIONAL POWER PLANT OPERATIONS TECHNOLOGY AND
EDUCATION CENTER.

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

SEC. 1007. FEDERAL MINE INSPECTORS.

In light of projected retirements of Federal mine
inspectors and the need for additional personnel, the
Secretary of Labor shall hire, train, and deploy such
additional skilled Federal mine inspectors as necessary to
ensure the availability of skilled and experienced
individuals and to maintain the number of Federal mine
inspectors at or above the levels authorized by law or
established by regulation.

TITLE XI--ELECTRICITY

SEC. 1101. DEFINITIONS.

(a) Electric Utility.--Section 3(22) of the Federal Power
Act (16 U.S.C. 796(22)) is amended to read as follows:
``(22) `electric utility' means any person or Federal or
State agency (including any municipality) that sells electric
energy; such term includes the Tennessee Valley Authority and
each Federal power marketing agency;''.
(b) Transmitting Utility.--Section 3(23) of the Federal
Power Act (16 U.S.C. 796(23)) is amended to read as follows:
``(23) `transmitting utility' means an entity, including
any entity described in section 201(f), that owns or operates
facilities used for the transmission of electric energy--
``(A) in interstate commerce; or
``(B) for the sale of electric energy at wholesale;''.
(c) Additional Definitions.--At the end of section (3) of
the Federal Power Act, add the following:
``(26) `unregulated transmitting utility' means an entity
that--
``(A) owns or operates facilities used for the transmission
of electric energy in interstate commerce, and
``(B) is an entity described in section 201(f) or a rural
electric cooperative with financing from the Rural Utilities
Service.
``(27) `distribution utility' means an electric utility
that does not own or operate transmission facilities or an
unregulated transmitting utility that provides 90 percent of
the electric energy its transmits to customers at retail.''
(d) For the purposes of this title, the term ``the
Commission'' means the Federal Energy Regulatory Commission.

Subtitle A--Reliability

SEC. 1111. ELECTRIC RELIABILITY STANDARDS.

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

``ELECTRIC RELIABILITY

``Sec. 215. (a) For the 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 components and the design of planned additions
or modifications to such components 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
components or to construct new transmission capacity or
generation capacity.
``(4) The term `reliable operation' means operating the
components of the bulk-power system within equipment and
electric system thermal, voltage, and stability limits so
that instability, uncontrolled separation, or cascading
failures of such system will not occur as a result of a
sudden disturbance or unanticipated failure of system
components.
``(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

[[Page S5589]]

components within the system to maintain reliable operation
of the portion of the system within their control.
``(6) The term `transmission organization' means an RTO or
other transmission organization finally approved by the
Commission for the operation of transmission facilities.
``(7) The term `regional entity' means an entity having
enforcement authority pursuant to subsection (e)(4).
``(b) 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 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. 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) Following the issuance of a Commission rule under
subsection (b), 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 (d)(2), reliability standards that provide for an
adequate level of reliability of the bulk-power system; and
``(2) has established rules that--
``(A) assure its independence of the users and owners and
operators of the bulk-power system, while assuring fair
stakeholder representation in the selection of its directors
and balanced decisionmaking in any ERO committee or
subordinate organizational structure;
``(B) allocate equitably reasonable dues, fees, and other
charges among end users for all activities under this
section;
``(C) provide fair and impartial procedures for enforcement
of reliability standards through the imposition of penalties
in accordance with subsection (e) (including limitations on
activities, functions, or operations, or other appropriate
sanctions);
``(D) provide for reasonable notice and opportunity for
public comment, due process, openness, and balance of
interests in developing reliability standards and otherwise
exercising its duties; and
``(E) provide for taking, after certification, appropriate
steps to gain recognition in Canada and Mexico.
``(d)(1) The ERO 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 ERO 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 ERO 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 ERO 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 ERO 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) 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)(1) The ERO may impose, subject to paragraph (2), a
penalty on a user or owner or operator of the bulk-power
system for a violation of a reliability standard approved by
the Commission under subsection (d) if the ERO, after notice
and an opportunity for a hearing--
``(A) finds that the user or owner or operator has violated
a reliability standard approved by the Commission under
subsection (d); and
``(B) files notice and the record of the proceeding with
the Commission.
``(2) A penalty imposed under paragraph (1) may take effect
not earlier than the 31st day after the ERO files with the
Commission notice of the penalty and the record of
proceedings. Such penalty shall be subject to review by the
Commission, on its own motion or upon application by the
user, owner or operator that is the subject of the penalty
filed within 30 days after the date such notice is filed with
the Commission. Application to the Commission for review, or
the initiation of review by the Commission on its own motion,
shall not operate as a stay of such penalty unless the
Commission otherwise orders upon its own motion or upon
application by the user, owner or operator that is the
subject of such penalty. In any proceeding to review a
penalty imposed under paragraph (1), the Commission, after
notice and opportunity for hearing (which hearing may consist
solely of the record before the ERO and opportunity for the
presentation of supporting reasons to affirm, modify, or set
aside the penalty), shall by order affirm, set aside,
reinstate, or modify the penalty, and, if appropriate, remand
to the ERO for further proceedings. The Commission shall
implement expedited procedures for such hearings.
``(3) On its own motion or upon complaint, the Commission
may order compliance with a reliability standard and may
impose a penalty against a user or owner or operator of the
bulk-power system, if the Commission finds, after notice and
opportunity for a hearing, that the user or owner or operator
of the bulk-power system has engaged or is about to engage in
any acts or practices that constitute or will constitute a
violation of a reliability standard.
``(4) The Commission shall establish regulations
authorizing the ERO to enter into an agreement to delegate
authority to a regional entity for the purpose of proposing
reliability standards to the ERO and enforcing reliability
standards under paragraph (1) if--
``(A) the regional entity is governed by an independent
board, a balanced stakeholder board, or a combination
independent and balanced stakeholder board;
``(B) the regional entity otherwise satisfies the
provisions of subsection (c)(1) and (2); and
``(C) the agreement promotes effective and efficient
administration of bulk-power system reliability.
The Commission may modify such delegation. The ERO and the
Commission shall rebuttably presume that a proposal for
delegation to a regional entity organized on an
Interconnection-wide basis promotes effective and efficient
administration of bulk-power system reliability and should be
approved. Such regulation may provide that the Commission may
assign the ERO's authority to enforce reliability standards
under paragraph (1) directly to a regional entity consistent
with the requirements of this paragraph.
``(5) The Commission may take such action as is necessary
or appropriate against the ERO or a regional entity to ensure
compliance with a reliability standard or any Commission
order affecting the ERO or a regional entity.
``(6) Any penalty imposed under this section shall bear a
reasonable relation to the seriousness of the violation and
shall take into consideration the efforts of such user,
owner, or operator to remedy the violation in a timely
manner.
``(f) The ERO 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) The ERO shall conduct periodic assessments of the
reliability and adequacy of the bulk-power system in North
America.
``(h) 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)(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.

[[Page S5590]]

``(4) Within 90 days of the application of the ERO 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, may
stay the effectiveness of any State action, pending the
Commission's issuance of a final order.
``(j) 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 ERO, a regional entity, or the
Commission regarding the governance of an existing or
proposed regional entity within the same region, whether a
standard proposed to apply within the region is just,
reasonable, not unduly discriminatory or preferential, and in
the public interest, whether fees proposed to be assessed
within the region are just, reasonable, not unduly
discriminatory or preferential, and in the public interest
and any other responsibilities requested by the Commission.
The Commission may give deference to the advice of any such
regional advisory body if that body is organized on an
Interconnection-wide basis.
``(k) The provisions of this section do not apply to Alaska
or Hawaii.''.

Subtitle B--Regional Markets

SEC. 1121. IMPLEMENTATION DATE FOR PROPOSED RULEMAKING ON
STANDARD MARKET DESIGN.

The Commission's proposed rulemaking entitled ``Remedying
Undue Discrimination through Open Access Transmission Service
and Standard Electricity Market Design'' (Docket No. RM01-12-
000) is remanded to the Commission for reconsideration. No
final rule pursuant to the proposed rulemaking, including any
rule or order of general applicability within the scope of
the proposed rulemaking, may be issued before July 1, 2005.
Any final rule issued by the Commission pursuant to the
proposed rulemaking, including any rule or order of general
applicability within the scope of the proposed rulemaking,
shall be proceeded by a notice of proposed rulemaking issued
after the date of enactment of this Act and an opportunity
for public comment.

SEC. 1122. SENSE OF THE CONGRESS ON REGIONAL TRANSMISSION
ORGANIZATIONS.

It is the sense of Congress that, in order to promote fair,
open access to electric transmission service, benefit retail
consumers, facilitate wholesale competition, improve
efficiencies in transmission grid management, promote grid
reliability, remove opportunities for unduly discriminatory
or preferential transmission practices, and provide for the
efficient development of transmission infrastructure needed
to meet the growing demands of competitive wholesale power
markets, all transmitting utilities in interstate commerce
should voluntarily become members of independently
administered Regional Transmission Organizations (``RTO'')
that have operational or functional control of facilities
used for the transmission of electric energy in interstate
commerce and do not own or control generation facilities used
to supply electric energy for sale at wholesale.

SEC. 1123. FEDERAL UTILITY PARTICIPATION IN REGIONAL
TRANSMISSION ORGANIZATIONS.

(a) Definitions.--For purposes of this section:
(1) The term ``appropriate Federal regulatory authority''
means--
(A) with respect to a Federal power marketing agency, the
Secretary of Energy, except that the Secretary may designate
the Administrator of a Federal power marketing agency to act
as the appropriate Federal regulatory authority with respect
to the transmission system of that Federal power marketing
agency; and
(B) with respect to the Tennessee Valley Authority, the
Board of Directors of the Tennessee Valley Authority.
(2) The term ``Federal utility'' means a Federal power
marketing agency or the Tennessee Valley Authority.
(3) The term ``transmission system'' means electric
transmission facilities owned, leased, or contracted for by
the United States and operated by a Federal utility.
(b) Transfer.--
(1) The appropriate Federal regulatory authority is
authorized to enter into a contract, agreement or other
arrangement transferring control and use of all or part of
the Federal utility's transmission system to a Regional
Transmission Organization (``RTO''). Such contract, agreement
or arrangement shall be voluntary and include--
(A) performance standards for operation and use of the
transmission system that the head of the Federal utility
determines necessary or appropriate, including standards that
assure recovery of all the Federal utility's costs and
expenses related to the transmission facilities that are the
subject of the contract, agreement or other arrangement,
consistency with existing contracts and third-party financing
arrangements, and consistency with said Federal utility's
statutory authorities, obligations, and limitations;
(B) provisions for monitoring and oversight by the Federal
utility of the RTO fulfillment of the terms and conditions of
the contract, agreement or other arrangement, including a
provision that may provide for the resolution of disputes
through arbitration or other means with the RTO or with other
participants, notwithstanding the obligations and limitations
of any other law regarding arbitration; and
(C) a provision that allows the Federal utility to withdraw
from the RTO and terminate the contract, agreement or other
arrangement in accordance with its terms.
(2) Neither this section, actions taken pursuant to it, nor
any other transaction of a Federal utility using an RTO shall
serve to confer upon the Commission jurisdiction or authority
over the Federal utility's electric generation assets,
electric capacity or energy that the Federal utility is
authorized by law to market, or the Federal utility's power
sales activities.
(c) Existing Statutory and Other Obligations.--
(1) Any statutory provision requiring or authorizing a
Federal utility to transmit electric power, or to construct,
operate or maintain its transmission system shall not be
construed to prohibit a transfer of control and use of its
transmission system pursuant to, and subject to all
requirements of subsection (b).
(2) This subsection shall not be construed to--
(A) suspend, or exempt any Federal utility from any
provision of existing Federal law, including but not limited
to any requirement or direction relating to the use of the
Federal utility's transmission system, environmental
protection, fish and wildlife protection, flood control,
navigation, water delivery, or recreation; or
(B) authorize abrogation of any contract or treaty
obligation.

SEC. 1124. REGIONAL CONSIDERATION OF COMPETITIVE WHOLESALE
MARKETS.

(a) State Regulatory Commissions.--Not later than 90 days
after the date of enactment of this Act, the Commission shall
convene regional discussions with State regulatory
commissions, as defined in section 3(21) of the Federal Power
Act. The regional discussions should address whether
wholesale electric markets in each region are working
effectively to provide reliable service to electric consumers
in the region at the lowest reasonable cost. Priority should
be given to discussions in regions that do not have, as of
the date of enactment of this Act, a Regional Transmission
Organization ``(RTO''). The regional discussions shall
consider--
(1) the need for an RTO or other organizations in the
region to provide non-discriminatory transmission access and
generation interconnection;
(2) a process for regional planning of transmission
facilities with State regulatory authority participation and
for consideration of multi-state projects;
(3) a means for ensuring that costs for all electric
consumers, as defined in section 3(5) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2602(5)), and
buyers of wholesale energy or capacity are reasonable and
economically efficient;
(4) a means for ensuring that all electric consumers, as
defined in section 3(5) of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2602(5)), within the region
maintain their ability to use the existing transmission
system without incurring unreasonable additional costs in
order to expand the transmission system for new customers;
(5) whether the integrated transmission and electric power
supply system can and should be operated in a manner that
schedules and economically prioritizes all available electric
generation resources, so as to minimize the costs of electric
energy to all consumers (``economic dispatch'') and
maintaining system reliability;
(6) a means to provide transparent price signals to ensure
efficient expansion of the electric system and efficiently
manage transmission congestion;
(7) eliminating in a reasonable manner, consistent with
applicable State and Federal law, multiple, cumulative
charges for transmission service across successive locations
within a region (``pancaked rates'');
(8) resolution of seams issues with neighboring regions and
inter-regional coordination;
(9) a means of providing information electronically to
potential users of the transmission system;
(10) implementation of a market monitor for the region with
State regulatory authority and Commission oversight and
establishment of rules and procedures that ensure that State
regulatory authorities are provided access to market
information and that provides for expedited consideration by
the Commission of any complaints concerning exercise of
market power and the operation of wholesale markets;
(11) a process by which to phase-in any proposed RTO or
other organization designated to provide non-discriminatory
transmission access so as to best meet the needs of a region,
and, if relevant, shall take into account the special
circumstances that may be found in the Western
Interconnection related to the existence of transmission
congestion, the existence of significant hydroelectric
capacity, the participation of unregulated

[[Page S5591]]

transmitting utilities, and the distances between generation
and load; and,
(12) a timetable to meet the objectives of this section.
(b) Report.--Not later than 1 year after the date of
enactment of this Act, the Commission shall report to
Congress on the progress made in addressing the issues in
subsection (a) of this section in discussions with the
States.
(c) Savings.--Nothing in this section shall affect any
discussions between the Commission and State or other retail
regulatory authorities that are on-going prior to enactment
of this Act.

Subtitle C--Improving Transmission Access and Protecting Service
Obligations

SEC. 1131. SERVICE OBLIGATION SECURITY AND PARITY.

The Federal Power Act (16 U.S.C. 824e) is amended by adding
the following:
``Sec. 220. (a)(1) The Commission shall exercise its
authority under this Act to ensure that 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 long-term 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 such generation facilities or such
purchased energy to meet such service obligation, is entitled
to use such firm transmission rights, or equivalent financial
transmission rights, in order to deliver such output or
purchased energy, or the output of other generating
facilities or purchased energy to the extent deliverable
using such rights, to meet its service obligation.
``(2) To the extent that all or a portion of the service
obligation covered by such firm transmission rights is
transferred to another load-serving entity, the successor
load-serving entity shall be entitled to use the firm
transmission rights associated with the transferred service
obligation. Subsequent transfers to another load-serving
entity, or back to the original load-serving entity, shall be
entitled to the same rights.
``(3) The Commission shall exercise its authority under
this Act in a manner that facilitates the planning and
expansion of transmission facilities to meet the reasonable
needs of load-serving entities to satisfy their service
obligations.
``(b) Nothing in this section shall affect any methodology
for the allocation of transmission rights by a Commission-
approved entity that, prior to the date of enactment of this
section, has been authorized by the Commission to allocate
transmission rights.
``(c) Nothing in this Act shall relieve a load-serving
entity from any obligation under State or local law to build
transmission or distribution facilities adequate to meet its
service obligations.''
``(d) 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.
``(e) For purposes of this section:
``(1) The term `distribution utility' means an electric
utility that has a service obligation to end-users.
``(2) The term `load-serving entity' means a distribution
utility or an electric utility (including an entity described
in section 201(f) or a rural cooperative) that has a service
obligation to end-users or a distribution utility.
``(3) The term `service obligation' means a requirement
applicable to, or the exercise of authority granted to, an
electric utility (including an entity described in section
201(f) or a rural cooperative) under Federal, State or local
law or under long-term contracts to provide electric service
to end-users or to a distribution utility.''
``(f) Nothing in the section shall apply to an entity
located in an area referred to in section 212(k)(2)(A).''

SEC. 1132. OPEN NON-DISCRIMINATORY ACCESS.

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

``OPEN ACCESS BY UNREGULATED TRANSMITTING UTILITIES

``Sec. 211A. (a) Subject to section 212(h), the Commission
may, by rule or order, require an unregulated transmitting
utility to provide transmission services--
``(1) at rates that are comparable to those that the
unregulated transmitting utility charges itself; and
``(2) on terms and conditions (not relating to rates) that
are comparable to those under which such unregulated
transmitting utility provides transmission services to itself
and that are not unduly discriminatory or preferential.
``(b) The Commission shall exempt from any rule or order
under this subsection any unregulated transmitting utility
that--
``(1) is a distribution utility that sells no more than
4,000,000 megawatt hours of electricity per year; or
``(2) does not own or operate any transmission facilities
that are necessary for operating an interconnected
transmission system (or any portion thereof); or
``(3) meets other criteria the Commission determines to be
in the public interest.
``(c) Whenever the Commission, after a hearing held upon a
complaint, finds any exemption granted pursuant to subsection
(b) adversely affects the reliable and efficient operation of
an interconnected transmission system, it may revoke the
exemption.
``(d) 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.
``(e) In exercising its authority under paragraph (1) of
subsection (a), the Commission may remand transmission rates
to an unregulated transmitting utility for review and
revision where necessary to meet the requirements of
subsection (a).
``(f) The provision of transmission services under
subsection (a) does not preclude a request for transmission
services under section 211.
``(g) The Commission may not require a State or
municipality to take action under this section that
constitutes a private business use for purposes of section
141 of the Internal Revenue Code of 1986 (26 U.S.C. 141).
``(h) Nothing in this Act authorizes the Commission to
require an unregulated transmitting utility to transfer
control or operational control of its transmitting facilities
to an RTO or any other Commission-approved organization
designated to provide non-discriminatory transmission
access.''.

SEC. 1133. TRANSMISSION INFRASTRUCTURE INVESTMENT.

Part II of the Federal Power Act is amended by adding the
following:

``SUSTAINABLE TRANSMISSION NETWORKS RULEMAKING

``Sec. 221. Within six months of enactment of this section,
the Commission shall issue a final rule establishing
transmission pricing policies applicable to all public
utilities and policies for the allocation of costs associated
with the expansion, modification or upgrade of existing
interstate transmission facilities and for the
interconnection of new transmission facilities for utilities
and facilities which are not included within a Commission
approved RTO. Consistent with section 205 of this Act, such
rule shall, to the maximum extent practicable:
``(1) promote capital investment in the economically
efficient transmission systems;
``(2) encourage the construction of transmission and
generation facilities in a manner which provides the lowest
overall risk and cost to consumers;
``(3) encourage improved operation of transmission
facilities and deployment of transmission technologies
designed to increase capacity and efficiency of existing
networks;
``(4) ensure that the costs of any transmission expansion
or interconnection be allocated in such a way that all users
of the affected transmission system bear the appropriate
share of costs; and
``(5) ensure that parties who pay for facilities necessary
for transmission expansion or interconnection receive
appropriate compensation for those facilities.''.

Subtitle D--Amendments to the Public Utility Regulatory Policies Act of
1978

SEC. 1141. NET METERING.

(a) Adoption of Standard.--Section 111(d) of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d))
is amended by adding at the end the following:
``(11) Net metering.--
``(A) Each electric utility shall make available upon
request net metering service to any electric consumer that
the electric utility serves.
``(B) For purposes of implementing this paragraph, any
reference contained in this section to the date of enactment
of the Public Utility Regulatory Policies Act of 1978 shall
be deemed to be a reference to the date of enactment of this
paragraph.
``(C) Notwithstanding subsections (b) and (c) of section
112, each State regulatory authority shall consider and make
a determination concerning whether it is appropriate to
implement the standard set out in subparagraph (A) not later
than 1 year after the date of enactment of this paragraph.''.
(b) Special Rules for Net Metering.--Section 115 of the
Public Utility Regulatory Policies Act of 1978 (16 U.S.C.
2625) is further amended by adding at the end the following:
``(i) Net Metering.--In undertaking the consideration and
making the determination under section 111 with respect to
the standard concerning net metering established by section
111(d)(13), the term net metering service shall mean a
service provided in accordance with the following standards:
``(1) An electric utility--
``(A) shall charge the owner or operator of an on-site
generating facility rates and charges that are identical to
those that would be charged other electric consumers of the
electric utility in the same rate class; and
``(B) shall not charge the owner or operator of an on-site
generating facility any additional standby, capacity,
interconnection, or other rate or charge.
``(2) An electric utility that sells electric energy to the
owner or operator of an on-site generating facility shall
measure the quantity of electric energy produced by the on-
site facility and the quantity of electric energy consumed by
the owner or operator of an on-site generating facility
during a billing period in accordance with reasonable
metering practices.
``(3) If the quantity of electric energy sold by the
electric utility to an on-site generating facility exceeds
the quantity of electric energy supplied by the on-site
generating facility to the electric utility during

[[Page S5592]]

the billing period, the electric utility may bill the owner
or operator for the net quantity of electric energy sold, in
accordance with reasonable metering practices.
``(4) If the quantity of electric energy supplied by the
on-site generating facility to the electric utility exceeds
the quantity of electric energy sold by the electric utility
to the on-site generating facility during the billing
period--
``(A) the electric utility may bill the owner or operator
of the on-site generating facility for the appropriate
charges for the billing period in accordance with paragraph
(2); and
``(B) the owner or operator of the on-site generating
facility shall be credited for the excess kilowatt-hours
generated during the billing period, with the kilowatt-hour
credit appearing on the bill for the following billing
period.
``(5) An eligible on-site generating facility and net
metering system used by an electric consumer shall meet all
applicable safety, performance, reliability, and
interconnection standards established by the National
Electrical Code, the Institute of Electrical and Electronics
Engineers, and Underwriters Laboratories.
``(6) The Commission, after consultation with State
regulatory authorities and unregulated electric utilities and
after notice and opportunity for comment, may adopt, by rule,
additional control and testing requirements for on-site
generating facilities and net metering systems that the
Commission determines are necessary to protect public safety
and system reliability.
``(7) For purposes of this subsection--
``(A) The term 'eligible on-site generating facility' means
a facility on the site of a residential electric consumer
with a maximum generating capacity of 10 kilowatts or less
that is fueled by solar energy, wind energy, or fuel cells;
or a facility on the site of a commercial electric consumer
with a maximum generating capacity of 500 kilowatts or less
that is fueled solely by a renewable energy resource,
landfill gas, or a high efficiency system.
``(B) The term 'renewable energy resource' means solar,
wind, biomass, or geothermal energy.
``(C) The term 'high efficiency system' means fuel cells or
combined heat and power.
``(D) 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.''.

SEC. 1142. SMART METERING.

(a) In General.--Section 111(d) of the Public Utilities
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is
amended by adding at the end the following:
``(12) Time-based metering and communications.
``(A) Each electric utility shall offer each of its
customer classes, and provide individual customers upon
customer request, a time-based rate schedule under which the
rate charged by the electric utility varies during different
time periods and reflects the variance in the costs of
generating and purchasing electricity at the wholesale level.
The time-based rate schedule shall enable the electric
consumer to manage energy use and cost through advanced
metering and communications technology.
``(B) The types of time-based rate schedules that may be
offered under the schedule referred to in subparagraph (A)
include, among others--
``(i) time-of-use pricing whereby electricity prices are
set for a specific time period on an advance or forward
basis, typically not changing more often than twice a year.
Prices paid for energy consumed during these periods shall be
pre-established and known to consumers in advance of such
consumption, allowing them to vary their demand and usage in
response to such prices and manage their energy costs by
shifting usage to a lower cost period or reducing their
consumption overall;
``(ii) critical peak pricing whereby time-of-use prices are
in effect except for certain peak days, when prices may
reflect the costs of generating and purchasing electricity at
the wholesale level and when consumers may receive additional
discounts for reducing peak period energy consumption; and
``(iii) real-time pricing whereby electricity prices are
set for a specific time period on an advanced or forward
basis and may change as often as hourly.
``(C) Each electric utility subject to subparagraph (A)
shall provide each customer requesting a time-based rate with
a time-based meter capable of enabling the utility and
customer to offer and receive such rate, respectively.
``(D) For purposes of implementing this paragraph, any
reference contained in this section to the date of enactment
of the Public Utility Regulatory Policies Act of 1978 shall
be deemed to be a reference to the date of enactment of this
paragraph.
``(E) In a State that permits third-party marketers to sell
electric energy to retail electric consumers, such consumers
shall be entitled to receive that same time-based metering
and communications device and service as a retail electric
consumer of the electric utility.
``(F) Notwithstanding subsections (b) and (c) of section
112, each State regulatory authority shall, not later than
twelve (12) months after enactment of this paragraph conduct
an investigation in accordance with section 115(i) and issue
a decision whether it is appropriate to implement the
standards set out in subparagraphs (A) and (C).''.
(b) State Investigation of Demand Response and Time-based
Metering.--Section 115 of the Public Utilities Regulatory
Policies Act of 1978 (16 U.S.C. 2625) is amended by adding
the at the end the following:
``(k) Time-based Metering and Communications.--Each State
regulatory authority shall conduct an investigation and issue
a decision whether or not it is appropriate for electric
utilities to provide and install time-based meters and
communications devices for each of their customers which
enable such customers to participate in time-based pricing
rate schedules and other demand response programs.''.
(c) Federal Assistance on Demand Response.--Section 132(a)
of the Public Utility Regulatory Polices Act of 1978 (16
U.S.C. 2642(a)) is amended by striking ``and'' at the end of
paragraph (3), striking the period at the end of paragraph
(4) and inserting ``; and'', and by adding the following at
the end thereof:
``(5) technologies, techniques and rate-making methods
related to advanced metering and communications and the use
of these technologies, techniques and methods in demand
response programs.''.
(d) Federal Guidance.--Section 132 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2643) is amended
by adding the following at the end thereof:
``(d) Demand Response.--The Secretary shall be responsible
for--
``(1) educating consumers on the availability, advantages
and benefits of advanced metering and communications
technologies, including the funding of demonstration or pilot
projects;
``(2) working with States, utilities, other energy
providers and advanced metering and communications experts to
identify and address barriers to the adoption of demand
response programs; and
``(3) not later than 180 days after the date of enactment
of the Energy Policy Act of 2003, providing the Congress with
a report that identifies and quantifies the national benefits
of demand response and makes a recommendation on achieving
specific levels of such benefits by January 1, 2005.''.
(e) Demand Response and Regional Coordination.--
(1) 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) The Secretary of Energy shall provide technical
assistance to States and regional organizations formed by two
or more States to assist them in--
(A) identifying the areas with the greatest demand response
potential;
(B) identifying and resolving problems in transmission and
distribution networks, including through the use of demand
response; and
(C) developing plans and programs to use demand response to
respond to peak demand or emergency needs.
(3) Not later than 1 year after the date of enactment of
this Act, the Commission shall prepare and publish an annual
report, by appropriate region, that assesses demand response
resources, including those available from all consumer
classes, and which identifies and reviews--
(A) saturation and penetration rate of advanced meters and
communications technologies, devices and systems;
(B) existing demand response programs and time-based rate
programs;
(C) the annual resource contribution of demand resources;
(D) the potential for demand response as a quantifiable,
reliable resource for regional planning purposes; and
(E) steps taken to ensure that, in regional transmission
planning and operations, demand resources are provided
equitable treatment as a quantifiable, reliable resource
relative to the resource obligations of any load-serving
entity, transmission provider, or transmitting party.
(f) Federal Encouragement of Demand Response Devices.--It
is the policy of the United States that time-based pricing
and other forms of demand response, whereby electricity
customers are provided with electricity price signals and the
ability to benefit by responding to them, shall be encouraged
and the deployment of such technology and devices that enable
electricity customers to participate in such pricing and
demand response systems shall be facilitated.

SEC. 1143. ADOPTION OF ADDITIONAL STANDARDS.

(a) Adoption of Standards.--Section 113(b) of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2623(b))
is amended by adding at the end the following:
``(6) Each electric utility shall provide distributed
generation, combined heat and power, and district heating and
cooling systems competitive access to the local distribution
grid and competitive pricing of service, and shall use
simplified standard contracts for the interconnection of
generating facilities that have a power production capacity
of 250 kilowatts or less.
``(7) No electric utility may refuse to interconnect a
generating facility with the distribution facilities of the
electric utility if the owner or operator of the generating
facility complies with technical standards adopted by the
State regulatory authority and agrees to pay the costs
established by such State regulatory authority.

[[Page S5593]]

``(8) Each electric utility shall develop a plan to
minimize dependence on one 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.
``(9) Each electric utility shall develop and implement a
ten-year plan to increase the efficiency of its fossil fuel
generation.''.
(b) Time for Adopting Standards.--Section 113 of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2623) is
further amended by adding at the end the following:
``(d) Special Rule.--For purposes of implementing
paragraphs (6), (7), (8), and (9) of subsection (b), 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
subsection.''.

SEC. 1144. TECHNICAL ASSISTANCE.

Section 132(c) of the Public Utility Regulatory Policies
Act of 1978 (16 U.S.C. 2642(c)) is amended to read as
follows:
``(c) Technical Assistance for Certain Responsibilities.--
The Secretary may provide such technical assistance as
determined appropriate to assist State regulatory authorities
and electric utilities in carrying out their responsibilities
under section 111(d)(11) and paragraphs (6), (7), (8), and
(9) of section 113(b).''.

SEC. 1145. 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
access to an independently administered, auction-based day
ahead and real time wholesale market for the sale of electric
energy.
``(2) 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
competing retail electric suppliers are able to provide
electric energy to the qualifying cogeneration facility or
qualifying small power production facility.
``(3) 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 on the date
of enactment of this subsection, to purchase electric energy
or capacity from or to sell electric energy or capacity to a
facility under this Act (including the right to recover costs
of purchasing electric energy or capacity).
``(4) Recovery of costs.--``(A) Regulation.--The Commission
shall promulgate 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 before the date of enactment of this
subsection recovers all prudently incurred costs associated
with the purchase.
``(B) Enforcement.--A regulation under subparagraph (A)
shall be enforceable in accordance with the provisions of law
applicable to enforcement of regulations under the Federal
Power Act (16 U.S.C. 791a et seq.).''.
(b) Elimination of Ownership Limitations.--Section 3 of the
Federal Power Act (16 U.S.C. 796) is amended
(1) by striking paragraph (17)(C) and inserting the
following:
``(C) 'qualifying small power production facility' means a
small power production facility that the Commission
determines, by rule, meets such requirements (including
requirements respecting minimum size, fuel use, and fuel
efficiency) as the Commission may, by rule, prescribe;''; and
(2) by striking paragraph (18)(B) and inserting the
following:
``(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. 1146. RECOVERY OF COSTS.

(a) Regulation.--To ensure recovery by any electric utility
that purchases electricity or capacity from a qualifying
facility pursuant to any legally enforceable obligation
entered into or imposed under section 210 of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 824a-3)
before the date of enactment of this Act of all costs
associated with the purchases, the Commission shall
promulgate and enforce such regulations as are required to
ensure that no utility shall be required directly or
indirectly to absorb the costs associated with the purchases.
(b) Treatment.--A regulation under subsection (a) shall be
treated as a rule enforceable under the Federal Power Act (16
U.S.C. 791a et seq.).

Subtitle E--Provisions Regarding the Public Utility Holding Company Act
of 1935

SEC. 1151. DEFINITIONS.

For the purposes of this subtitle:
(1) The term ``affiliate'' of a company means any company 5
percent or more of the outstanding voting securities of which
are owned, controlled, or held with power to vote, directly
or indirectly, by such company.
(2) The term ``associate company'' of a company means any
company in the same holding company system with such company.
(3) The term ``Commission'' means the Federal Energy
Regulatory Commission.
(4) The term ``company'' means a corporation, partnership,
association, joint stock company, business trust, or any
organized group of persons, whether incorporated or not, or a
receiver, trustee, or other liquidating agent of any of the
foregoing.
(5) The term ``electric utility company'' means any company
that owns or operates facilities used for the generation,
transmission, or distribution of electric energy for sale.
(6) The terms ``exempt wholesale generator'' and ``foreign
utility company'' have the same meanings as in sections 32
and 33, respectively, of the Public Utility Holding Company
Act of 1935 (15 U.S.C. 79z-5, 79z-5b), as those sections
existed on the day before the effective date of this
subtitle.
(7) The term ``gas utility company'' means any company that
owns or operates facilities used for distribution at retail
(other than the distribution only in enclosed portable
containers or distribution to tenants or employees of the
company operating such facilities for their own use and not
for resale) of natural or manufactured gas for heat, light,
or power.

(8) the term ``holding company'' means--

(A) any company that directly or indirectly owns, controls,
or holds, with power to vote, 10 percent or more of the
outstanding voting securities of a public utility company or
of a holding company of any public utility company; and
(B) any person, determined by the Commission, after notice
and opportunity for hearing, to exercise directly or
indirectly (either alone or pursuant to an arrangement or
understanding with one or more persons) such a controlling
influence over the management or policies of any public
utility company or holding company as to make it necessary or
appropriate for the rate protection of utility customers with
respect to rates that such person be subject to the
obligations, duties, and liabilities imposed by this
subtitle upon holding companies.
(9) The term ``holding company system'' means a holding
company, together with its subsidiary companies.
(10) The term ``jurisdictional rates'' means rates
established by the Commission for the transmission of
electric energy in interstate commerce, the sale of electric
energy at wholesale in interstate commerce, the
transportation of natural gas in interstate commerce, and the
sale in interstate commerce of natural gas for resale for
ultimate public consumption for domestic, commercial,
industrial, or any other use.
(11) The term ``natural gas company'' means a person
engaged in the transportation of natural gas in interstate
commerce or the sale of such gas in interstate commerce for
resale.
(12) The term ``person'' means an individual or company.
(13) The term ``public utility'' means any person who owns
or operates facilities used for transmission of electric
energy in interstate commerce or sales of electric energy at
wholesale in interstate commerce.
(14) The term ``public utility company'' means an electric
utility company or a gas utility company.
(15) The term ``State commission'' means any commission,
board, agency, or officer, by whatever name designated, of a
State, municipality, or other political subdivision of a
State that, under the laws of such State, has jurisdiction to
regulate public utility companies.
(16) The term ``subsidiary company'' of a holding company
means--
(A) any company, 10 percent or more of the outstanding
voting securities of which are directly or indirectly owned,
controlled, or held with power to vote, by such holding
company; and (B) any person, the management or policies of
which the Commission, after notice and opportunity for
hearing, determines to be subject to a controlling influence,
directly or indirectly, by such holding company (either alone
or pursuant to an arrangement or understanding with one or
more other persons) so as to make it necessary for the rate
protection of utility customers with respect to rates that
such person be subject to the obligations, duties, and
liabilities imposed by this subtitle upon subsidiary
companies of holding companies.
(17) The term ``voting security'' means any security
presently entitling the owner or holder thereof to vote in
the direction or management of the affairs of a company.

SEC. 1152. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT
OF 1935.

The Public Utility Holding Company Act of 1935 (15 U.S.C.
79a et seq.) is repealed, effective 12 months after the date
of enactment of this Act.

SEC. 1153. FEDERAL ACCESS TO BOOKS AND RECORDS.

(a) In General.--Each holding company and each associate
company thereof shall

[[Page S5594]]

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

SEC. 1154. 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, and 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, a holding
company or any associate company or affiliate thereof,
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) Effect on State Law.--Nothing in this section shall
preempt applicable State law concerning the provision of
books, accounts, memoranda, or other records, or in any way
limit the rights of any State to obtain books, accounts,
memoranda, or other records, under Federal law, contract, or
otherwise.
(c) 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. 1155. EXEMPTION AUTHORITY.

(a) Rulemaking.--Not later than 90 days after the date of
enactment of this title, the Commission shall promulgate a
final rule to exempt from the requirements of section 203 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;
(2) exempt wholesale generators; or
(3) foreign utility companies.
(b) Other Authority.--If, upon application or upon its own
motion, 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 company or
natural gas company, or if the Commission finds that any
class of transactions is not relevant to the jurisdictional
rates of a public utility company, the Commission shall
exempt such person or transaction from the requirements of
section 203.

SEC. 1156. AFFILIATE TRANSACTIONS.

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, public utility, or natural
gas company from an associate company.

SEC. 1157. APPLICABILITY.

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

SEC. 1158. 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. 1159. 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. 1160. SAVINGS PROVISIONS.

(a) In General.--Nothing in this subtitle prohibits a
person from engaging in or continuing to engage in activities
or transactions in which it is legally engaged or authorized
to engage on the date of enactment of this Act, if that
person continues to comply with the terms of any such
authorization, whether by rule or by order.
(b) Effect on Other Commission Authority.--Nothing in this
subtitle limits the authority of the Commission under the
Federal Power Act (16 U.S.C. 791a and following) (including
section 301 of that Act) or the Natural Gas Act (15 U.S.C.
717 and following) (including section 8 of that Act).

SEC. 1161. IMPLEMENTATION.

Not later than 12 months after the date of enactment of
this title, the Commission shall--
(1) promulgate such regulations as may be necessary or
appropriate to implement this subtitle; 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. 1162. TRANSFER OF RESOURCES.

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

SEC. 1163. EFFECTIVE DATE.

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

SEC. 1164. CONFORMING AMENDMENT TO THE FEDERAL POWER ACT.

Section 318 of the Federal Power Act (16 U.S.C. 825q) is
repealed.

Subtitle F--Market Transparency, Anti-Manipulation and Enforcement

SEC. 1171. MARKET TRANSPARENCY RULES.

Part II of the Federal Power Act is amended by adding:

``MARKET TRANSPARENCY RULES

``Sec. 222. (a) Not later than 180 days after the date of
enactment of this section, the Commission shall issue rules
establishing an electronic information system to provide the
Commission and the public with access to such information as
is necessary or appropriate to facilitate price transparency
and participation in markets subject to the Commission's
jurisdiction. Such systems shall provide information about
the availability and market price of wholesale electric
energy and transmission services to the Commission, State
commissions, buyers and sellers of wholesale electric energy,
users of transmission services, and the public. The
Commission shall have authority to obtain such information
from any electric and transmitting utility, including any
entity described in section 201(f).
``(b) The Commission shall exempt from disclosure
information it determines would, if disclosed, be detrimental
to the operation of an effective market or jeopardize system
security. This section shall not apply to an entity described
in section 212(k)(2)(B) with respect to transactions for the
purchase or sale of wholesale electric energy and
transmission services within the area described in section
212(k)(2)(A).''.

SEC. 1172. MARKET MANIPULATION.

Part II of the Federal Power Act is amended by the
following:

``PROHIBITION ON FILING FALSE INFORMATION

``Sec. 223. It shall be a violation of this Act for any
person or any other entity (including entities described in
section 201(f)) willfully and knowingly to report any
information relating to the price of electricity sold at
wholesale, which information the person or any other entity
knew to be false at the time of the reporting, to any
governmental entity with the intent to manipulate the data
being compiled by such governmental entity.

``PROHIBITION ON ROUND TRIP TRADING

``Sec. 224. (a) It shall be a violation of this Act for any
person or any other entity (including entities described in
section 201(f)) willfully and knowingly to enter into any
contract or other arrangement to execute a `round-trip trade'
for the purchase or sale of electric energy at wholesale.
``(b) For the purposes of this section, the term 'round
trip trade' means a transaction, or combination of
transactions, in which a person or any other entity--
``(1) enters into a contract or other arrangement to
purchase from, or sell to, any other person or other entity
electric energy at wholesale;
``(2) simultaneously with entering into the contract or
arrangement described in paragraph (1), arranges a
financially offsetting trade with such other person or entity
for the same such electric energy, at the same location,
price, quantity and terms so that, collectively, the purchase
and sale transactions in themselves result in no financial
gain or loss; and ``(3) enters into the contract or
arrangement with the intent to deceptively affect reported
revenues, trading volumes, or prices.''.

SEC. 1173. ENFORCEMENT.

(a) Complaints.--Section 306 of the Federal Power Act (16
U.S.C. 825e) is amended by
(1) inserting ``electric utility (including entities
described in section 201(f) and rural cooperative
entities),'' after ``Any person,''; and

[[Page S5595]]

(2) 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 by inserting ``or
transmitting utility'' after ``any person'' in the first
sentence.
(c) Review Of Commission Orders.--Section 313(a) of the
Federal Power Act (16 U.S.C. 8251) is amended by inserting
``electric utility,'' after ``Any person,'' in the first
sentence.
(d) Criminal Penalties.--Section 316 of the Federal Power
Act (16 U.S.C. 825o) is amended--
(1) in subsection (a), by striking ``$5,000'' and inserting
``$1,000,000'', and by striking ``two years'' and inserting
``five 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) in subsections (a) and (b), by striking ``section 211,
212, 213, or 214'' each place it appears and inserting ``Part
II''; and
(2) in subsection (b), by striking ``$10,000'' and
inserting ``$1,000,000''.
(f) General Penalties.--Section 21 of the Natural Gas Act
(15 U.S.C. 717t) is amended--
(1) in subsection (a), by striking ``$5,000'' and inserting
``$1,000,000'', and by striking ``two years'' and inserting
``five years'; and
(2) in subsection (b), by striking ``$500'' and inserting
``$50,000''.

SEC. 1174. REFUND EFFECTIVE DATE.

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

Subtitle G--Consumer Protections

SEC. 1181. CONSUMER PRIVACY.

The Federal Trade Commission shall issue rules protecting
the privacy of electric consumers from the disclosure of
consumer information in connection with the sale or delivery
of electric energy to a retail electric consumer. If the
Federal Trade Commission determines that a State's
regulations provide equivalent or greater protection than the
provisions of this section, such State regulations shall
apply in that State in lieu of the regulations issued by the
Commission under this section.

SEC. 1182. UNFAIR TRADE PRACTICES.

(a) Slamming.--The Federal Trade Commission shall issue
rules prohibiting the change of selection of an electric
utility except with the informed consent of the electric
consumer or if determined by the appropriate State regulatory
authority to be necessary to prevent loss of service.
(b) Cramming.--The Federal Trade Commission shall issue
rules prohibiting the sale of goods and services to an
electric consumer unless expressly authorized by law or the
electric consumer.
(c) State Authority.--If the Federal Trade Commission
determines that a State's regulations provide equivalent or
greater protection than the provisions of this section, such
State regulations shall apply in that State in lieu of the
regulations issued by the Commission under this section.

SEC. 1183. DEFINITIONS.

For purposes of this subtitle--
(1) ``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'' have the
meanings given those terms in section 3 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2602).

Subtitle H--Technical Amendments

SEC. 1191. TECHNICAL AMENDMENTS.

(a) Section 211(c) of the Federal Power Act (16 U.S.C.
824j(c)) is amended by--
(1) striking ``(2)';
(2) striking ``(A)'' and inserting ``(1)'''
(3) striking ``(B)'' and inserting ``(2)''; and
(4) striking ``termination of modification'' and inserting
``termination or modification''.
(b) Section 211(d)(1) of the Federal Power Act (16 U.S.C.
824j(d)) is amended by striking ``electric utility'' the
second time it appears and inserting ``transmitting
utility''.
(c) Section 315 of the Federal Power Act (16 U.S.C. 825n)
is amended by striking ``subsection'' and inserting
``section''.
______

By Mr. ENZI (for himself, Mr. Dorgan, Mr. Baucus, Mr. Dayton, Mr.
Bingaman, Mr. Chafee, Mr. Craig, Mr. Johnson, and Mrs. Murray):
S. 950. A bill to allow travel between the United States and Cuba; to
the Committee on Foreign Relations.
Mr. ENZI. Mr. President, today I offer a bill that will make a very
small change in our Cuba policy. It deals only with travel provisions
to Cuba.
I have been watching Cuba since the 1960s. I went to George
Washington University, and I was there at the time of the Cuban missile
crisis. I have had the opportunity to watch what has happened with Cuba
throughout the years. I am reminded of something my dad used to say,
which was that if you keep on doing what you always have been doing,
you are going to wind up getting what you already got. That is kind of
the situation with Cuba. We have been trying the same thing for over 40
years, and it hasn't worked.
I am suggesting just a small change to maybe get a few more people in
there to increase conversation with people who understand the way the
United States works and the way Cuba works and how they ought to drift
more rapidly toward where we are.
In recent weeks, as we shared the joy of the Iraqi people as they
were liberated from the ruthless regime of Saddam Hussein, we also felt
the pain of those in Cuba who had dared to speak out in a vain but
valiant effort to demand those same freedoms for themselves. As they
did, 75 Cuban citizens were arrested and received harsh sentences--some
for more than 20 years--all for the crime of yearning to be free. Once
again, Castro has shown himself to be his own worst enemy when it comes
to Cuba's image overseas, and so, when faced with an outcry from around
the world about his actions, he quickly tried to blame the United
States for his own actions. It was a hard sell at best, and, given the
reactions we've seen from all sides of this issue, I don't think anyone
is buying it.
Still, Castro's cruelty might tempt us to tighten the already strong
restrictions on the relations between our two countries, but I hope we
will not do that. If we increase the diplomatic pressure on the Cuban
government that is now emanating from every corner of the world, we
might be successful in bringing about a better way of life for the
Cuban people.
If, however, we stop Cuban-Americans from bringing financial
assistance to their families in Cuba, and end the people to people
exchanges that have been so successful, and stop the sale of
agricultural and medicinal products to Cuba, we will not be hurting the
Cuban government nearly as badly as we will be hurting the Cuban people
by diminishing their faith and trust in the United States and reducing
the strength of the ties that bind the people of our two countries.
If we allow more and freer travel to Cuba, if we increase trade and
dialogue, we take away Castro's ability to blame the hardships of the
Cuban people on the United States. In a very real sense, the better we
try to make things for the Cuban people, the more we will reduce the
level and the tone of the rhetoric used against us by Fidel Castro.
I have often heard it said that it is foolish to do the same thing
over and over again and expect different results. In a way, that is
what we are doing in Cuba. We are continuing to try to exert pressure
from our side and, as we do, we are giving Castro a scapegoat to blame
for the poor living conditions in his country in the process. It's time
for a different policy, one that goes further than embargoes and
replaces a restrictive and confusing travel policy with a new one that
will more effectively help us to achieve our goals in that country.
Today, Senators Dorgan, Baucus, and Bingaman and I are introducing
the Freedom to Travel to Cuba Act.
Our bill is very straightfoward. It states that the President shall
not prohibit, either directly or indirectly, travel to or from Cuba by
United States citizens or transactions incident to such travel.
In 1958 the Supreme Court affirmed or Constitutional right to travel,
but the U.S. government then prohibited Americans from spending money
in Cuba. We simply said, okay, you have a right to travel, but try
traveling without spending a dime.
Most of us know that certain people can and do continue to travel to
Cuba. Cuban Americans can apply for a license to travel for
humanitarian reasons to visit ailing family members and such, but not
always conveniently.
The way I got involved in this whole process was a Cuban American
from Jackson, WY, who had been in Cuba visiting his family, doing his
one visit a year. As he left and was on the plane coming back to
Wyoming, one of his

[[Page S5596]]

parents died. He could not go back there for a year. That is not a good
situation for any family.
Educational groups can apply for licenses to travel for scholarly
reasons, for educational opportunities and conferences. Members of the
U.S. Government can travel for fact-finding reasons, but for the
average American, that process is too complicated.
Even with the proper licenses, the regulations on where you can go
and whom you can talk to are confusing, misleading, and frustrating.
Each year the Office of Foreign Assets Control levies fines on
travelers who followed the law to the best of their ability. Fines and
punishments were imposed without guidelines and seemingly at the whim
of a nameless bureaucrat.
I must ask my colleagues, why are we continuing to support a policy
that was basically implemented 40 years ago? Why are we supporting a
policy that has had little effect on the Government we oppose? Why do
we not improve our policy so that it will improve conditions for the
Cuban people and their image of the United States?
The bill we are introducing today makes real change in our policy
toward Cuba that will lead to a real change for the people of Cuba.
What better way to let the Cuban people know of our concern for their
plight than for them to hear it from their friends and their extended
family in the United States, or let them hear it from the American
people who will go there?
The people of this country are our best ambassadors, and we should
let them show the people of Cuba what we as a nation are all about. One
thing we should not do is to play into Castro's hand by enacting
stricter and more stringent regulations and create a situation where
the United States is easy to blame for the problems in Cuba. Unilateral
sanctions will not improve human rights for Cuban citizens. The rest of
the world is not doing what we are doing. Cuba is being supplied by the
rest of the world with everything they need.
Open dialog and exchange of ideas and commerce can move a country
toward democracy. What better way to share the rewards of democracy
than through people-to-people exchanges? We cannot stop that program.
If the United States Government continues on its current course to put
an economic stranglehold on the Cuban Government, the people of Cuba
will suffer. Unilateral sanctions stop not just the flow of goods but
the flow of ideas. Ideas of freedom and democracy are the keys to
change in any nation.
Some may ask why we want to increase dialog right now, why open the
door to Cuba when Castro is behaving so poorly? No one is denying that
the actions of Castro and his government are deplorable, as is his
refusal to provide basic human rights to his people. But if we truly
believe Castro is a dictator with no good intentions, how can we say we
should wait for him to behave before we engage? He controls the entire
media in Cuba. The entire message that is coming out, unless we have
people interacting, is his message. Keeping the door closed and
hollering at Castro on the other side does not do anything.
Mr. DORGAN. Mr. President, this morning, my colleague from Wyoming,
Senator Enzi, has introduced a piece of legislation I am an original
cosponsor of. I want to make a point about the legislation.
The legislation deals with the freedom of the American people to
travel in the country of Cuba. I want to talk about that just for a
moment. I support that legislation. The legislation has nothing to do
with supporting Fidel Castro. We do not support Fidel Castro. It has
nothing to do with making life easier for Fidel Castro. This issue is
not about Fidel Castro; it is about the American people.
Ninety miles off our shores sits a country ruled by communists, a
communist government run by Fidel Castro. We have a communist
government in the country of China, with 1.3 billion people half way
around the globe. We have a communist government in the country of
Vietnam. I have visited both.
In both of those countries, we have an American Chamber of Commerce.
They are doing business in those countries. We have engaged in trade
and tourism. People travel there. People do business there. Why?
Because our country thinks engagement is the right way to move these
communist countries in the right direction toward greater personal
freedom and greater liberty for the people of China and Vietnam.
But Cuba is 90 miles off the coast of Florida, and we are told that
Cuba is different. Instead of engagement being constructive for Cuba,
we are told a 40-year embargo, which has not worked, should be
retained. That embargo includes not only an embargo on trade with Cuba,
but it also includes a restriction on the American people's ability to
travel to Cuba. And the restriction is so absurd and so byzantine, here
is what it has provoked.
I had a hearing on this about a year and a half ago. We have people
down in the Treasury Department who are spending their days, with
taxpayers' money, tracking Americans who have traveled to Cuba, so they
can levy a civil fine on those Americans.
Let me tell you of one: A retired school teacher in Illinois. She is
a cyclist, loves to bicycle. She answered an ad in a cycling magazine
and signed up for a 10-day cycling trip in Cuba. This retired school
teacher--I hope she won't mind me saying, a little, old, retired
schoolteacher--from Illinois, bicycles in Cuba for 10 days with a
cycling group, organized by a Canadian cycling company, and she gets
back to this country only to receive in the mail a notice by the U.S.
Treasury Department that she has been fined $9,600 for traveling in
Cuba.
She would not be fined for traveling in China, a communist country.
She would not be fined for traveling in Vietnam, a communist country.
But she is fined for traveling in Cuba.
Or do you want one better? How about the guy whose dad died, who was
a Cuban citizen who came to this country, and the last thing he wanted
was for his ashes to be taken back to Cuba and spread on Cuban soil. So
his son did that. But guess what? That son gets caught in the net of
the U.S. Treasury Department, because at a time when we are worried
about terrorism, we have people down at the Treasury Department who are
chasing retired school teachers and sons of deceased American citizens
who used to live in Cuba who want to take their parents' ashes back to
Cuba.
We have people down there spending the taxpayers' dollars and their
time, their effort, and energy to see if we can't levy a civil fine
against Americans who travel in Cuba. My colleague, Senator Enzi, has
introduced legislation, with myself and others, to say it is not
hurting Fidel Castro by limiting the freedom and choice of the American
people to travel in Cuba. Cuba and the Cuban people would be much
better off with additional travel by Americans and expanded trade. The
same circumstances that lead people to believe that engagement with
China and Vietnam is helpful ought to understand that it would be
helpful with Cuba as well.
I have been to Cuba. I have visited with the dissidents. Frankly,
they believe the embargo is counterproductive, and they believe lifting
the embargo and the travel restrictions would be helpful to their
cause.
Fidel Castro is a Communist and a dictator. What he has done in
recent weeks is appalling to me. He has thrown people in jail,
dissidents, for what they have said and what they think. He has
executed several people in recent weeks who attempted to allow others
to escape. Shame on him. But it makes no sense for us to continue a
policy that is counterproductive.
Again, talk to the dissidents in Cuba and they will tell you that
allowing people to travel to Cuba and allowing our family farmers to
sell grain to Cuba is constructive.
We are finally for the first time able to sell some products into the
Cuban marketplace because I and then former Senator John Ashcroft, now
Attorney General, offered legislation that opened that embargo of 40
years that did not work, and for the first time in 40 years, 22 train
carloads of dried peas left North Dakota to go to the Cuban market,
purchased by the Cubans.
Our farmers for the first time in 42 years sold some food to Cuba.
That makes good sense. We should never use food as a weapon. Travel is
the same circumstance. Limiting the freedom of the American people
makes no sense to me.

[[Page S5597]]

The Enzi bill, which I am proud to cosponsor, moves in the direction
of eliminating that limitation on travel by the American people.
Mr. BAUCUS. Madam President, I rise today to offer legislation, along
with my colleagues Senator Enzi and Senator Dorgan, that would end the
restrictions placed on travel to Cuba.
I understand our colleagues in the House will introduce companion
legislation in the coming weeks. I look forward to working with my
colleagues in both chambers, and on both sides of the aisle, as we move
forward.
With this legislation, we are undertaking a serious cause. Repeal of
the travel ban is long overdue.
There are numerous reasons to introduce this legislation, but I want
to focus today on just two: first, the current situation in Cuba; and
second, our troubled economy here at home.
Introduction of this legislation comes at a crucial time in U.S.-Cuba
relations. Last month, nearly 80 Cuban dissidents were arrested. All of
them have been sentenced to an average of almost 20 years in prison.
Democratic governments around the world, as well as human rights
organizations and others, including myself and my colleagues in the
Senate and House Cuba Working Groups, have harshly criticized the
Castro regime for these appalling acts of repression. Yet, throughout
all of this, the Castro regime has remained defiant and undaunted.
Why? In my view it is because Castro wants the embargo to continue.
Observers have noted an emerging pattern: every time we get close to
more open relations, Castro shuts the process down with some repressive
act, designed to have a chilling effect on U.S.-Cuban relations.
Castro fears an end to the embargo. He knows the day the embargo
falls is the day he runs out of excuses. Without the embargo, Castro
would have no one to blame for the failing Cuban economy.
Nor would his way of governing be able to survive the influx of
Americans and democratic ideas that would flood his island if the
embargo were lifted.
Now, some Cuba watchers have predicted that the dissident arrests and
the resulting decline of U.S.-Cuba relations are a death knell to the
engagement debate in Washington.
I strongly disagree. And I think now, more than ever, a genuine,
honest debate about the merits of the embargo is needed.
Some people seem to think tightening the embargo is a rational
response to the Castro regime. I guess if you think an embargo can hurt
Castro without hurting the Cuban people, then tightening the embargo
might make some sense.
But it does not work that way. The embargo actually hurts the Cuban
people much more than it hurts Castro.
This is why many Cuban dissidents, including Oswaldo Paya, the
founder of the Varela Project, oppose our embargo and support
engagement.
Indeed, after 43 years, it ought to be clear to everyone that the
embargo has failed to weaken Castro. A better approach is to reach out
to the Cuban people. Ending the travel ban is the first and best way to
do this.
If Castro fears contact between the Cuban people and the American
people, the rational American response is to send more Americans, not
fewer.
Of course, ending the travel ban would have benefits not only for the
Cuban people, but also for Americans. Ending the travel ban would have
an immediate and direct economic impact, beyond even the immediate
travel sector.
Most importantly for my home state of Montana, ending the travel ban
would help farmers and ranchers.
Americans are currently allowed to sell food and medicine to Cuba on
a cash basis. But there is a lot of red tape thrown in their way. And
without the ability to travel to Cuba and develop the business
contacts, the full potential of these sales is not realized.
In fact, one study has suggested that lifting the travel ban could
result in an additional quarter billion dollars of agricultural sales,
and create thousands of new jobs.
Ending the travel ban would bring benefits to both Cubans and to
Americans. And that, after all, is what this debate should be about.
Supporters of the embargo are so focused on hurting Castro that they
actually strengthen him--at the expense of the Cuban people, and at the
expense of our own economy.
I hope my colleagues will join me in co-sponsoring this important
legislation. I believe it is the best way to show that we truly care
about the Cuban people
And indeed, if we truly care about democracy, then let us send Cuba
exactly that. Let us travel to Cuba and show them democracy in action.
I yield the floor.
Mr. DAYTON. I commend my colleague from Wyoming and his leadership in
relationship to Cuba, which is of strong interest to businesses and
farmers in my home State of Minnesota. I ask unanimous consent to be
added as a cosponsor to his legislation. I look forward to working with
him as part of his caucus to further those relationships. I again
commend the Senator for his leadership in this important area and look
forward to working with him.
______

By Mr. WARNER (for himself, Mr. Dayton, and Ms. Collins):
S. 951. A bill to amend the Internal Revenue Code of 1986 to allow
medicare beneficiaries a refundable credit against income tax for the
purchase of outpatient prescription drugs; to the Committee on Finance.
Mr. WARNER. Mr. President, I rise today to introduce this morning a
bill on which my distinguished colleagues from Minnesota and Maine and
I have collaborated. That is the Older Americans Prescription Drug Tax
Relief Act. I will speak a minute or two on it, then should the Senator
from Minnesota desire to speak to this, I will yield to the Senator and
then resume the balance of my statement.
By way of introduction, all Members of this body have heard the
tragic stories about older Americans who must choose between paying for
their groceries and paying for their medicines. Many older Americans
are forced into this choice because, unbelievably, the Medicare program
still lacks an outpatient prescription drug benefit. America's seniors
deserve much better.
Our President, the House of Representatives, and every single Member
of this Senate, all 100 Members, share the common goal of enacting a
comprehensive Medicare prescription drug benefit. Over the years, we
worked diligently to achieve those goals but have yet not reached what
I would consider, and I think others would consider, success. We have
all worked in support of this vitally important goal, but, again,
success has alluded us. Unfortunately, we have not been able to reach a
consensus.
I hope this bill might be a new initiative that would merit the
attention of my colleagues, and that it might provide a basis for that
consensus. As we here in the Nation's Capital debate how best to add a
Medicare prescription drug benefit and continue to debate the specifics
of such benefits such as premiums, co-pays, deductibles, formularies,
and whether to run the program through the existing Medicare system or
through a public-private partnership, our seniors continue to suffer.
Medicare beneficiaries have waited far too long for Congress to provide
some sort of relief for their prescription drug costs.
I remain committed, as are my distinguished colleagues from Minnesota
and Maine, to working with our colleagues on creating a comprehensive
prescription drug benefit in the Medicare program. I believe we must
act now, however, to provide some relief at this point in time. We
cannot defer this decision any longer. The Warner-Dayton-Collins
proposal will provide real relief to Medicare beneficiaries. The
legislation is simple and can be described in three points.
The PRESIDING OFFICER. The Senator from Minnesota.
Mr. DAYTON. Mr. President, I thank the senior Senator from Virginia,
a leader on this measure. I will be brief because I am scheduled to
meet in my office in just a few moments with the nominee for the new
superintendent of the Air Force Academy, which is a matter on which the
Senator from Virginia has also exhibited great leadership on behalf of
this country.
I am very proud to join with Senator Warner in sponsoring this
legislation. I agree and associate myself with everything the Senator
has said regarding this matter.

[[Page S5598]]

I came to the Senate a little over 2 years ago, believing the most
urgent matter facing our country in the area of social legislation was
to provide prescription drug coverage for all of our elderly. I have
been dismayed at our inability--all of us--to reach necessary
agreements so such legislation could be enacted.
I could not agree more with the Senator from Virginia that this is
something I hope our colleagues will consider. If there is a better
approach that we can all agree on this year, then so be it. But in the
absence of that, as there has been that failure during the last 2
years, I hope our colleagues will look at this as a very feeling
alternative. Even if long-term legislation is enacted, I believe it
will be at least a year or two before that is available to our senior
citizens, before that program is set up. This is an approach that could
be implemented very swiftly, could be available almost immediately, and
could provide, on an interim basis if not a long-term basis, the
financial assistance our elderly citizens desperately need.
I thank the senior Senator from Virginia. I am proud to associate
myself with this legislation.
I yield the floor.
Mr. WARNER. I thank my distinguished colleague for responding. I wish
to emphasize a very important point the Senator from Minnesota made.
This may not be the final resolution of this complex set of issues.
But given the desperate circumstances of so many who have to make the
choice between food and drugs, I think it is a very carefully crafted
interim step that could be enacted into law and later quickly
superseded should that hoped-for event occur in the future of a more
comprehensive piece of legislation.
I think the emphasis on that is very important.
I would say, all of us here in the Senate benefit greatly by
professional staff. On my staff, Chris Yianilos really worked
diligently to bring this legislation into being and he collaborated
with a distinguished member of your staff, Mr. Bob Hall. I also thank
Priscilla Hanley, who worked with Senator Collins on the legislation.
The first is that the Warner-Dayton-Collins bill provides Medicare
beneficiaries with a refundable--I repeat--a refundable tax credit of
50 cents on every dollar of out-of-pocket prescription drug costs.
Whether you actually pay income taxes or not, you are eligible to get
the benefit of this tax credit.
The benefit is capped at $500 for the expenses of an individual
senior. Married seniors would be eligible for a credit up to $1,000.
The cap is based on a recent study by the Kaiser Family Foundation that
estimates that the average senior's out-of-pocket prescription drug
costs is almost $1,000. Thus the proposal will cover 50 percent of the
out-of-pocket drug costs for the average senior.
To take advantage of this refundable tax credit, Medicare
beneficiaries will not have to worry about whether their drug is
covered under some formulary. In addition, there are no premiums, no
deductibles. Medicare beneficiaries will simply take their
prescriptions, get them filled, and then apply for their refundable tax
credit.
Second, in recognition that a generous but necessary refundable tax
credit such as this can be costly, we have imposed a responsible income
phase-out on older Americans who can benefit from this tax credit. The
phase-out level begins for individuals who earn $75,000 per year.
Married Medicare beneficiaries begin to phase-out of the benefit at
$150,000 a year. This cost containment mechanism will affect less than
10 percent of all Medicare beneficiaries but allows us to responsibly
provide a refundable tax credit that will cover about 50 percent of the
average Medicare beneficiary's out-of-pocket drug costs.
Again 90 percent of all Medicare beneficiaries will not be affected
by the phase-out. In other words, they are beneath the phase-out caps.
Only those individuals who are blessed with a larger income among
America's seniors, who can afford in large measure to pay for their
prescription drugs, will be phased-out.
Third, the legislation will sunset once a comprehensive Medicare
prescription drug benefit is signed into law. Again, as my colleague
from Minnesota mentioned, and others, this is an interim proposal.
Therefore, it can be superseded by a more comprehensive bill.
We wholeheartedly agree this legislation is not a substitute for a
comprehensive prescription drug Medicare benefit, and we will continue
to work with the President and our colleagues from both sides of the
aisle in the Senate who support a more comprehensive piece of
legislation. But as I stated earlier, America's seniors cannot wait any
longer for relief, and this proposal provides a real benefit to
America's seniors.
I am pleased to be joined by Senator Dayton and Senator Collins in
introducing the Older Americans Prescription Drug Tax Relief Act. I
urge my colleagues to give this matter consideration and, hopefully, it
can be enacted into law.
Let us do something. Let us open the door and talk to the Cuban
people.
Travel and other policies that deal with Cuba will continue to be a
top priority for those of us in the newly formed Senate Cuba Working
Group. The working group members have expressed their support for
changes in our policies toward Cuba, and we will continue to be a part
of the dialogue. I do encourage all of my colleagues to join us in that
effort.
I encourage all of my colleagues to take a look at this bill that has
been introduced today. I know there are people looking at it. I expect
a lot more cosponsors on it. This is the most reasonable provision
dealing with Cuba that has been presented during the 6 years I have
been here. We have tried some bigger bites at the apple. They have not
worked. So we are moving back to the travel restrictions, a bill that
is very limited. It allows one to travel and to have those things that
are necessary for travel. For instance, the right to take baggage to
Cuba cannot be cut off. That is another way the law can be subverted.
So it is a very straightforward travel policy that will get Americans
into Cuba to talk to Cubans to promote the ideas we believe in. I ask
my colleagues to join me in this effort.
______

By Mr. CORZINE:
S. 952. A bill to amend title XVIII of the Social Security Act to
reduce the work hours and increase the supervision of resident-
physicians to ensure the safety of patients and resident-physicians
themselves; to the Committee on Finance.
Mr. CORZINE. Mr. President, I rise today to reintroduce my
legislation, the Patient and Physician Safety and Protection Act of
2003, to limit medical resident work hours to 80 hours a week and to
provide real protections for patients and resident physicians who are
negatively affected by excessive work hours. I feel strongly that as
Congress begins to consider proposals to reduce medical malpractice
premiums and improve quality of care, we must consider the role that
excessive work hours play in exacerbating medical liability problems
and reducing quality of care.
It is very troubling that hospitals across the Nation are requiring
young doctors to work 36 hour shifts and as many as 120 hours a week in
order to complete their residency programs. These long hours lead to a
deterioration of cognitive function similar to the effects of blood
alcohol levels of 0.1 percent. This is a level of cognitive impairment
that would make these doctors unsafe to drive--yet these physicians are
not only allowed but in fact are required to care for patients and
perform procedures on patients under these conditions.
The Patient and Physician Safety and Protection Act of 2003 will
limit medical resident work hours to 80 hours a week. Not 40 hours or
60 hours. 80 hours a week. It is hard to argue that this standard is
excessively strict. In fact, it is unconscionable that we now have
resident physicians, or any physicians for that matter, caring for very
sick patients 120 hours a week and 36 hours straight with fewer than 10
hours between shifts. This is an outrageous violation of a patient's
right to quality care.
In addition to limiting work hours to 80 hours a week, my bill limits
the length of any one shift to 24 consecutive hours, while allowing for
up to three hours of patient transition time, and limits the length of
an emergency room shift to 12 hours. The bill also ensures that
residents have at least one

[[Page S5599]]

out of seven days off and ``on-call'' shifts no more often that every
third night.
Since I first introduced the Patient and Physician Safety and
Protection Act in the 107th Congress, the medical community and the
Accreditation Council for Graduate Medical Education, ACGME,
specifically have taken critical steps to address the problem of
excessive work hours. The ACGME's recommendations to reduce resident
work hours are commendable. If appropriately enforced, these new work
hour guidelines will go a long way toward reducing the number of hours
that residents must work, thereby improving the health of our Nation's
medical residents and ensuring the safety of the patients.
Despite the medical community's best intentions to reduce work hours,
however, I am very concerned that the ACGME's policy lacks the
enforcement mechanisms that are essential to ensure compliance with the
new work hour rules. Too many hospitals failed to comply with previous
work hour requirements mandated by the ACGME because there was
insufficient oversight and enforcement. While the new policy
establishes more stringent work hours reductions, it fails to create
effective enforcement and oversight tools. These rules are meaningless
without enforcement.
That is why Federal legislation is necessary. The Patient and
Physician Safety and Protection Act of 2003 not only recognizes the
problem of excessive work hours, but also creates strong enforcement
mechanisms. The bill also provides funding support to teaching
hospitals to implement new work hour standards. Without enforcement and
financial support efforts to reduce work hours are not likely to be
successful.
Finally, my legislation provides meaningful enforcement mechanisms
that will protect the identity of resident physicians who file
complaints about work hour violations. The ACGME's guidelines do not
contain any whistleblower protections for residents that seek to report
program violations. Without this important protection, residents will
be reluctant to report these violations, which in turn will weaken
enforcement.
My legislation also makes compliance with these work hour
requirements a condition of Medicare participation. Each year, Congress
provides $8 billion to teaching hospitals to train new physicians.
While Congress must continue to vigorously support adequate funding so
that teaching hospitals are able to carry out this important public
service, these hospitals must also make a commitment to ensuring safe
working conditions for these physicians and providing the highest
quality of care to the patients they treat.

In closing I would like to read a quote from an Orthopedic Surgery
Resident from Northern California, which I think illustrates why we
need this legislation.
I quote, ``I was operating post-call after being up for over 36 hours
and was holding retractors. I literally fell asleep standing up and
nearly face-planted into the wound. My upper arm hit the side of the
gurney, and I caught myself before I fell to the floor. I nearly put my
face in the open wound, which would have contaminated the entire field
and could have resulted in an infection for the patient.''
This is a very serious problem that must be addressed before medical
errors like this occur. I hope every member of the Senate will consider
this legislation and the potential it has to reduce medical errors,
improve patient care, and create a safer working environment for the
backbone of our Nation's health system.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 952

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Patient and Physician Safety
and Protection Act of 2003''.

SEC. 2. FINDINGS.

Congress finds the following:
(1) The Federal Government, through the medicare program,
pays approximately $8,000,000,000 per year solely to train
resident-physicians in the United States, and as a result,
has an interest in assuring the safety of patients treated by
resident-physicians and the safety of resident-physicians
themselves.
(2) Resident-physicians spend as much as 30 to 40 percent
of their time performing activities not related to the
educational mission of training competent physicians.
(3) The excessive numbers of hours worked by resident-
physicians is inherently dangerous for patient care and for
the lives of resident-physicians.
(4) The scientific literature has consistently demonstrated
that the sleep deprivation of the magnitude seen in residency
training programs leads to cognitive impairment.
(5) A substantial body of research indicates that excessive
hours worked by resident-physicians lead to higher rates of
medical error, motor vehicle accidents, depression, and
pregnancy complications.
(6) The medical community has not adequately addressed the
issue of excessive resident-physician work hours.
(7) The Federal Government has regulated the work hours of
other industries when the safety of employees or the public
is at risk.
(8) The Institute of Medicine has found that as many as
98,000 deaths occur annually due to medical errors and has
suggested that 1 necessary approach to reducing errors in
hospitals is reducing the fatigue of resident-physicians.

SEC. 3. REVISION OF MEDICARE HOSPITAL CONDITIONS OF
PARTICIPATION REGARDING WORKING HOURS OF
MEDICAL RESIDENTS, INTERNS, AND FELLOWS.

(a) In General.--Section 1866 of the Social Security Act
(42 U.S.C. 1395cc) is amended--
(1) in subsection (a)(1)--
(A) by striking ``and'' at the end of subparagraph (R);
(B) by striking the period at the end of subparagraph (S)
and inserting ``, and''; and
(C) by inserting after subparagraph (S) the following new
subparagraph:
``(T) in the case of a hospital that uses the services of
postgraduate trainees (as defined in subsection (j)(4)), to
meet the requirements of subsection (j).''; and
(2) by adding at the end the following new subsection:
``(j)(1)(A) In order that the working conditions and
working hours of postgraduate trainees promote the provision
of quality medical care in hospitals, as a condition of
participation under this title, each hospital shall establish
the following limits on working hours for postgraduate
trainees:
``(i) Subject to subparagraphs (B) and (C), postgraduate
trainees may work no more than a total of 24 hours per shift.
``(ii) Subject to subparagraph (C), postgraduate trainees
may work no more than a total of 80 hours per week.
``(iii) Subject to subparagraph (C), postgraduate
trainees--
``(I) shall have at least 10 hours between scheduled
shifts;
``(II) shall have at least 1 full day out of every 7 days
off and 1 full weekend off per month;
``(III) subject to subparagraph (B), who are assigned to
patient care responsibilities in an emergency department
shall work no more than 12 continuous hours in that
department;
``(IV) shall not be scheduled to be on call in the hospital
more often than every third night; and
``(V) shall not engage in work outside of the educational
program that interferes with the ability of the postgraduate
trainee to achieve the goals and objectives of the program or
that, in combination with the program working hours, exceeds
80 hours per week.
``(B)(i) Subject to clause (ii), the Secretary shall
promulgate such regulations as may be necessary to ensure
quality of care is maintained during the transfer of direct
patient care from 1 postgraduate trainee to another at the
end of each shift.
``(ii) Such regulations shall ensure that, except in the
case of individual patient emergencies, the period in which a
postgraduate trainee is providing for the transfer of direct
patient care (as referred to in clause (i)) does not extend
such trainee's shift by more than 3 hours beyond the 24-hour
period referred to in subparagraph (A)(i) or the 12-hour
period referred to in subparagraph (A)(iii)(III), as the case
may be.
``(C) The work hour limitations under subparagraph (A) and
requirements of subparagraph (B) shall not apply to a
hospital during a state of emergency declared by the
Secretary that applies with respect to that hospital.
``(2) The Secretary shall promulgate such regulations as
may be necessary to monitor and supervise postgraduate
trainees assigned patient care responsibilities as part of an
approved medical training program, as well as to assure
quality patient care.
``(3) Each hospital shall inform postgraduate trainees of--
``(A) their rights under this subsection, including methods
to enforce such rights (including so-called whistle-blower
protections); and
``(B) the effects of their acute and chronic sleep
deprivation both on themselves and on their patients.
``(4) For purposes of this subsection, the term
`postgraduate trainee' means a postgraduate medical resident,
intern, or fellow.''.

[[Page S5600]]

(b) Designation.--
(1) In general.--The Secretary of Health and Human Services
(in this subsection referred to as the ``Secretary'') shall
designate an individual within the Department of Health and
Human Services to handle all complaints of violations that
arise from a postgraduate trainee (as defined in paragraph
(4) of section 1886(j) of the Social Security Act, as added
by subsection (a)) who reports that the hospital operating
the medical residency training program for which the trainee
is enrolled is in violation of the requirements of such
section.
(2) Grievance rights.--A postgraduate trainee may file a
complaint with the Secretary concerning a violation of the
requirements under such section 1886(j). Such a complaint may
be filed anonymously. The Secretary may conduct an
investigation and take such corrective action with respect to
such a violation.
(3) Enforcement.--
(A) Civil money penalty enforcement.--Subject to
subparagraph (B), any hospital that violates the requirements
under such section 1886(j) is subject to a civil money
penalty not to exceed $100,000 for each medical residency
training program operated by the hospital in any 6-month
period. The provisions of section 1128A of the Social
Security Act (other than subsections (a) and (b)) shall apply
to civil money penalties under this paragraph in the same
manner as they apply to a penalty or proceeding under section
1128A(a) of such Act.
(B) Corrective action plan.--The Secretary shall establish
procedures for providing a hospital that is subject to a
civil monetary penalty under subparagraph (A) with an
opportunity to avoid such penalty by submitting an
appropriate corrective action plan to the Secretary.
(4) Disclosure of violations and annual reports.--The
individual designated under paragraph (1) shall--
(A) provide for annual anonymous surveys of postgraduate
trainees to determine compliance with the requirements under
such section 1886(j) and for the disclosure of the results of
such surveys to the public on a medical residency training
program specific basis;
(B) based on such surveys, conduct appropriate on-site
investigations;
(C) provide for disclosure to the public of violations of
and compliance with, on a hospital and medical residency
training program specific basis, such requirements; and
(D) make an annual report to Congress on the compliance of
hospitals with such requirements, including providing a list
of hospitals found to be in violation of such requirements.
(c) Whistleblower Protections.--
(1) In general.--A hospital covered by the requirements of
section 1866(j) of the Social Security Act, as added by
subsection (a), shall not penalize, discriminate, or
retaliate in any manner against an employee with respect to
compensation, terms, conditions, or privileges of employment,
who in good faith (as defined in paragraph (2)), individually
or in conjunction with another person or persons--
(A) reports a violation or suspected violation of such
requirements to a public regulatory agency, a private
accreditation body, or management personnel of the hospital;
(B) initiates, cooperates, or otherwise participates in an
investigation or proceeding brought by a regulatory agency or
private accreditation body concerning matters covered by such
requirements;
(C) informs or discusses with other employees, with a
representative of the employees, with patients or patient
representatives, or with the public, violations or suspected
violations of such requirements; or
(D) otherwise avails himself or herself of the rights set
forth in such section or this subsection.
(2) Good faith defined.--For purposes of this subsection,
an employee is deemed to act ``in good faith'' if the
employee reasonably believes--
(A) that the information reported or disclosed is true; and
(B) that a violation has occurred or may occur.
(d) Effective Date.--The amendments made by subsection (a)
shall take effect on the first July 1 that begins at least 1
year after the date of enactment of this Act.

SEC. 4. ADDITIONAL FUNDING FOR HOSPITAL COSTS.

There are hereby appropriated to the Secretary of Health
and Human Services such amounts as may be required to provide
for additional payments to hospitals for their reasonable
additional, incremental costs incurred in order to comply
with the requirements imposed by this Act (and the amendments
made by this Act).
______

By Mr. SHELBY (for himself, Mr. Miller, Mr. Lott, Ms. Landrieu,
Mr. Sessions, Mr. Cochran, and Mr. Chambliss):
S. 954. A bill to amend the Federal Power Act to provide for the
protection of electric utility customers and enhance the stability of
wholesale electric markets through the clarification of State
regulatory jurisdiction; to the Committee on Energy and Natural
Resources.
Mr. SHELBY. Mr. President, on July 31, 2002, the Federal Energy
Regulatory Commission, FERC, issued a notice of proposed rulemaking to
create a one-size-fits-all template for electric markets referred to as
``standard market design,'' SMD.
The SMD rule would bring about numerous sweeping changes, the degree
and consequences of which are still being assessed. The proposed rule
would require customers to pay for transmission facility upgrades
caused by new generators, even if the customer does not need or use the
power from those generators.
FERC's proposal would also usurp State authority to obligate
utilities to serve customers, set generation reserve margins, centrally
control generation dispatch, and set rates for retail transmission
service. FERC's proposed rulemaking will effectively eliminate a
State's ability to make decisions on issues specific to their State.
Such sweeping changes to the energy industry should only be made after
careful consideration of all potential consequences. After hearing
these concerns, FERC promised a white paper to speak to the many
concerns of myself and many others.
On April 28, the Federal Energy Regulatory Commission released its
long-awaited white paper on Wholesale Power Markets and Standard Market
Design. I and others had hoped that the release of that paper would
signal a shift in the approach that the Commission has been taking with
respect to the ``federalization'' of electricity regulation and
markets. Disappointingly, despite some modest changes in approach, the
Commission and Chairman Pat Wood have decided to move away from a
partnership with the States toward Federal domination of the
electricity system and electricity regulation.
In the document, the Commission reasserts its authority to regulate
the terms and conditions of retail transmission, mandates the formation
of Regional Transmission Organizations, and limits State authority to
protect existing native load customers from the loss of transmission
rights. The paper promises more ``technical conferences'' and
consultation with the States, but does not change the premise upon
which the Commission's Standard Market Design, ``SMD'', Notice of
Proposed Rulemaking rests--that the States and regions serve only as
adjuncts to the Commission as it devises new wholesale market rules
that directly impinge upon retail markets.
In light of the Commission's white paper and the Senate's intention
of quickly addressing energy policy, my colleagues and I present
legislation today to ensure the concerns of my constituents and the
constituents of my colleagues are addressed. This crucial legislation
will ensure that States maintain their jurisdiction over retail
utilities, that native load customers can be assured of reliability of
service, that customers are not forced to socialize the cost of new
transmission developed in their area but intended for other regions,
and finally the legislation will prohibit the FERC from implementing
its current SMD rule nor any rule that is of similar substance.
______

By Mr. FEINGOLD (for himself, Mr. Jeffords, Mr. Dayton, and Mr.
Leahy):
S. 956. A bill to amend the Elementary and Secondary Education Act of
1965 to permit States and local educational agencies to decide the
frequency of using high quality assessments to measure and increase
student academic achievement, to permit States and local educational
agencies to obtain a waiver of certain testing requirements, and for
other purposes; to the Committee on Health, Education, Labor, and
Pensions.
Mr. FEINGOLD. Mr. President, as millions of public school students
and teachers around the country prepare to complete their first school
year under the No Child Left Behind Act, NCLB, I am introducing a bill
that would help to return a measure of local control that was taken
from school districts and States by its enactment last year.
I am pleased to be joined in this effort by Senators Jeffords,
Dayton, and Leahy.
I have heard a lot of concern from my constituents about various
aspects of the President's education bill. Following the enactment of
the bill last year, the drumbeat of concern has continued to
reverberate throughout my

[[Page S5601]]

State, and has gotten even louder, as students, teachers, parents,
administrators, school counselors and social workers, and others are
learning first-hand about the effect of the NCLB.
I strongly support maintaining local control over decisions affecting
our children's day-to-day classroom experiences. I also believe that
the Federal Government has an important role to play in supporting our
State educational agencies and local school districts as they carry out
their most important responsibility--the education of our children.
I voted against the President's education bill in large part because
of the new annual testing mandate for students in grades 3-8. While I
agree that there should be a strong accountability system in place to
ensure that public school students are making progress, I strongly
oppose over-testing students in our public schools. I agree that some
tests are needed to ensure that our children are keeping pace, but
taking time to test students has to take a back seat to taking the time
to teach students in the first place.
I have heard a lot about these new annual tests from the people of
Wisconsin, and their response has been almost universally negative. My
constituents are concerned about this additional layer of testing for
many reasons, including the cost of developing and implementing these
tests, the loss of teaching time every year to prepare for and take the
tests, and the extra pressure that the tests will place on students,
teachers, schools, and school districts.
I share my constituents' concerns about this new Federal mandate. I
find it interesting that proponents of the NCLB say that it will return
more control to the States and local school districts. In my view,
however, this massive new Federal testing mandate runs counter to the
idea of local control.
Many States and local school districts around the country, including
Wisconsin, already have comprehensive testing programs in place. The
Federal Government should leave decisions about the frequency of using
high quality assessments to measure and increase student academic
achievement up to the States and local school districts that bear the
responsibility for educating our children. Every State and every school
district is different. A uniform testing policy may not be the best
approach.
I have heard from many education professionals in my State that this
new testing requirement is a waste of money and a waste of time. These
people are dedicated professionals who are committed to educating
Wisconsin's children, and they don't oppose testing. I think we can all
agree that testing has its place. What they oppose is the magnitude of
testing that is required by this law.
Beginning in the 2005-2006 school year, the NCLB will pile more tests
on our Nation's public school students. And of course, when those tests
are piled on students, they burden our teachers as well, because
teachers must spend more and more time preparing students to take these
exams.
This kind of teaching, sometimes called ``teaching to the test,'' is
becoming more and more prevalent in our schools as testing has become
increasingly common. The dedicated teachers in our classrooms will now
be constrained by teaching to yet more tests, instead of being able to
use their own judgment about what subject areas the class needs to
spend extra time studying. This additional testing time could also
reduce the opportunity for teachers to create and implement innovative
learning experiences for their students.
Teachers in my State are concerned about the amount of time that they
will have to spend preparing their students to take the tests and
administering the tests. They are concerned that these additional tests
will disrupt the flow of education in their classrooms. One teacher
said the preparation for the tests Wisconsin already requires in grades
3, 4, 8, and 10 can take up to a month, and the administration of the
test takes another week. That is five weeks out of the school year. And
now the Federal Government is requiring teachers to take a huge chunk
out of instruction time each year in grades 3-8. In my view, and in the
view of the people of my state, this time can be better spent on
regular classroom instruction.
The legislation that I am introducing today, the Student Testing
Flexibility Act of 2003, would give States and local school districts
that have demonstrated academic success the flexibility to apply to
waive the new annual testing requirements in the NCLB. States and
school districts with waivers would still be required to administer
high quality tests to students in, at a minimum, reading or language
arts and mathematics at least once in grades 3-5, 6-9, and 10-12 as
required under the law.
This bill would allow States and school districts that meet the same
specific accountability criteria outlined for school-level excellence
under the State Academic Achievement Award Program to apply to the
Secretary of Education for a waiver from the new annual reading or
language arts and mathematics tests for students in grades 3-8. The
waiver would be for a period of three years and would be renewable, so
long as the state or school district meets the criteria.
To qualify for the waiver, the State or school district must have
significantly closed the achievement gap among a number of subgroups of
students as required under Title I, or must have exceeded their
adequate yearly progress, AYP, goals for two or more consecutive years.
The bill would require the Secretary to grant waivers to states or
school districts that meet these criteria and apply for the waiver.
Individual districts in states that have waivers would not be required
to apply for a separate waiver.
The Federal Government should not impose an additional layer of
testing on states that are succeeding in meeting or exceeding their AYP
goals or on closing the achievement gap. Instead, we should allow those
States that have demonstrated academic success to use their share of
Federal testing money to help those schools that need it the most.
The bill I am introducing today would do just that by allowing states
with waivers to retain their share of the Federal funding appropriated
to develop and implement the new annual tests. These important dollars
would be used for activities that these States deem appropriate for
improving student achievement at individual public elementary and
secondary schools that have failed to make AYP.
I am pleased that this legislation is supported by the American
Association of School Administrators, the National PTA, the National
Association of Elementary School Principals, the National Association
of Secondary School Principals, the School Social Work Association of
America, the Wisconsin Department of Public Instruction, the Wisconsin
Education Association Council, the Wisconsin Association of School
Boards, the Milwaukee Teachers' Education Association, and the
Wisconsin School Administrators Alliance, which includes the
Association of Wisconsin School Administrators, the Wisconsin
Association of School District Administrators, the Wisconsin
Association of School Business Officials, and the Wisconsin Council for
Administrators of Special Services.
While this bill focuses on the over-testing of students in our public
schools, I would like to note that my constituents have raised a number
of other concerns about the NCLB that I hope will be addressed by
Congress. My constituents are concerned about, among other things, the
new AYP requirements, the effect that the Act will have on rural school
districts, and about finding the funding necessary to implement all of
these provisions of this new law. I share these concerns.
I regret that, for the second year in a row, the President's budget
request did not fully fund NCLB requirements and failed to provide any
funding to crucial programs such as rural education and school
counseling. If we are to truly leave no child behind, we must provide
adequate funding for programs such as Title I, special education and
professional development in order to ensure that all students have the
means to succeed. To do less sets up some of our most vulnerable
students for failure.
I hope that my bill, the Student Testing Flexibility Act, will help
to focus attention on the perhaps unintended consequences of the
ongoing implementation of the President's education bill for states,
school districts, and individual schools, teachers, and students.

[[Page S5602]]

I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 956

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Student Testing Flexibility
Act of 2003''.

SEC. 2. FINDINGS.

Congress finds that--
(1) State and local governments bear the majority of the
cost and responsibility of educating public elementary school
and secondary school students;
(2) State and local governments often struggle to find
adequate funding to provide basic educational services;
(3) the Federal Government has not provided its full share
of funding for numerous federally mandated elementary and
secondary education programs;
(4) underfunded Federal education mandates increase
existing financial pressures on States and local educational
agencies;
(5) the cost to States and local educational agencies to
implement the annual student academic assessments required
under section 1111(b)(3)(C)(vii) of the Elementary and
Secondary Education Act of 1965 (20 U.S.C.
6311(b)(3)(C)(vii)) remains uncertain;
(6) public elementary school and secondary school students
take numerous tests each year, from classroom quizzes and
exams to standardized and other tests required by the Federal
Government, State educational agencies, or local educational
agencies;
(7) multiple measures of student academic achievement
provide a more accurate picture of a student's strengths and
weaknesses than does a single score on a high-stakes test;
and
(8) the frequency of the use of high quality assessments as
a tool to measure and increase student achievement should be
decided by State educational agencies and local educational
agencies.

SEC. 3. WAIVER AUTHORITY.

Section 1111(b)(3) of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 6311(b)(3)) is amended by
adding at the end the following:
``(E) Waiver authority.--
``(i) States.--Upon application by a State educational
agency, the Secretary shall waive the requirements of
subparagraph (C)(vii) for a State if the State educational
agency demonstrates that the State--

``(I) significantly closed the achievement gap among the
groups of students described in paragraph (2)(C)(v); or
``(II) exceeded the State's adequate yearly progress,
consistent with paragraph (2), for 2 or more consecutive
years.

``(ii) Local educational agencies.--Upon application of a
local educational agency located in a State that does not
receive a waiver under clause (i), the Secretary shall waive
the application of the requirements of subparagraph (C)(vii)
for the local educational agency if the local educational
agency demonstrates that the local educational agency--

``(I) significantly closed the achievement gap among the
groups of students described in paragraph (2)(C)(v); or
``(II) exceeded the local educational agency's adequate
yearly progress, consistent with paragraph (2), for 2 or more
consecutive years.

``(iii) Period of waiver.--A waiver under clause (i) or
(ii) shall be for a period of 3 years and may be renewed for
subsequent 3-year periods.
``(iv) Utilization of certain federal funds.--

``(I) Permissive uses.--Subject to subclause (II), a State
or local educational agency granted a waiver under clause (i)
or (ii) shall use funds, that are awarded to the State or
local educational agency, respectively, under this Act for
the development and implementation of annual assessments
under subparagraph (C)(vii), to carry out educational
activities that the State educational agency or local
educational agency, respectively, determines will improve the
academic achievement of students attending public elementary
schools and secondary schools in the State or local
educational agency, respectively, that fail to make adequate
yearly progress (as defined in paragraph (2)(C)).
``(II) Nonpermissive use of funds.--A State or local
educational agency granted a waiver under clause (i) or (ii)
shall not use funds, that are awarded to the State or local
educational agency, respectively, under this Act for the
development and implementation of annual assessments under
subparagraph (C)(vii), to pay a student's cost of tuition,
room, board, or fees at a private school.''.

______

By Mrs. BOXER:
S. 957. A bill to amend title 49, United States Code, to improve the
training requirements for and require the certification of cabin crew
members, and for other purposes; to the Committee on Commerce, Science,
and Transportation.
______

By Mr. KOHL (for himself, Mr. Reid, Mr. Nelson of Florida, Mr.
Rockefeller, Mrs. Lincoln, Ms. Landrieu, Mr. Bingaman, Mr.
Miller, and Mr. Breaux):
S. 958. A bill to amend titles XVIII and XIX of the Social Security
Act to prevent abuse of recipients of long-term care services under the
Medicare and Medicaid programs; to the Committee on Finance.
Mrs. BOXER. Mr. President, I am pleased to introduce the ``Flight
Attendant Certification Act.''
Since September 11, flight attendants have become a last line of
defense against terrorist attacks. As we all know, the terrorists
hijacked four commercial jets--all of which were heading to California.
That day forever changed air travel in this country, and in turn
forever changed the security functions of flight attendants.
No one can forget that it was a flight attendant who discovered that
Richard Reid was trying to ignite a bomb on his shoe. If not for the
aware flight attendant, the bomb could have gone off over the Atlantic
and all the passengers and crew would have been lost.
Today, I can say with certainty that air travel is more secure than
it was a year and a half ago. But that does not mean that more should
not be done. We must continue to take the appropriate steps to ensure
that we are doing everything in our power to prevent terrorist attacks
and protect the American people. That is why I am proud to offer this
legislation.
This bill would make American air travel safer by requiring that
flight attendants be certified by the Federal Aviation Administration,
FAA. Currently, flight attendants are not required to receive formal
certification even though they have the responsibility for safety,
security, and emergency response.
In addition, the legislation would close the growing gap in the
quality and content of training programs between airlines by creating a
single training standard across the industry. This bill would require
uniform training standards and establish a central approval process for
certification of flight attendants at the FAA.
The FAA already recognizes the training of other airline personnel by
issuing certification to pilots, mechanics, air-traffic controllers and
others. Flight attendants deserve the same recognition and
certification.
Mr. KOHL. Mr. President, I rise today to reintroduce the Patient
Abuse Prevention Act, which will go a long way in protecting patients
in long-term care from abuse and neglect. This legislation will
establish a National Registry of abusive long-term care workers and
require criminal background checks for potential employees. It is
necessary so we can ensure that people with violent and abusive
backgrounds cannot find work in nursing homes and home health and prey
on our elderly relatives. After many years of refinement so that the
background checks will run smoothly, and with the strong support of
both patient advocates and the American Association of Homes and
Services for the Aging, I sincerely hope that this is the year when we
will finally take action and enact these common-sense protections.
There is absolutely no excuse for abuse or neglect of the elderly and
disabled at the hands of those who are supposed to care for them. Our
parents and grandparents made our country what it is today, and they
deserve to live with dignity and the highest quality care.
Unfortunately, this is not always the case. We know that the majority
of caregivers are dedicated, professional, and do their best under
difficult circumstances. But it only takes a few abusive staff to cast
a dark shadow over what should be a healing environment.
Current State and national safeguards are inadequate to screen out
abusive workers. All States are required to maintain registries of
abusive nurse aides. But nurse aides are not the only workers involved
in abuse, and other workers are not tracked at all. Even worse, there
is no system to coordinate information about abusive nurse aides
between States. A known abuser in Iowa would have little trouble moving
to Wisconsin and continuing to work with patients there.
In addition, there is no Federal requirement that long-term care
facilities conduct criminal background checks on prospective employees.
People with violent criminal backgrounds--people who have already been

[[Page S5603]]

convicted of murder, rape, and assault--could easily get a job in a
nursing home or other health care setting without their past ever being
discovered.
Our legislation will go a long way toward solving this problem.
First, it will create a National Registry of abusive long-term care
employees. States will be required to submit information from their
current State registries to the National Registry. Facilities will be
required to check the National Registry before hiring a prospective
worker. Any worker with a substantiated finding of patient abuse will
be prohibited from working in long-term care.
Second, the bill provides a second line of defense to protect
patients from violent criminals. If the National Registry does not
contain information about a prospective worker, the facility is then
required to initiate an FBI background check. Any conviction for
patient abuse or a relevant violent crime would bar that applicant from
working with patients.
A disturbing number of cases have been reported where workers with
criminal backgrounds have been cleared to work in direct patient care,
and have subsequently abused patients in their care. Unfortunately,
these news reports have tragically become commonplace over the years.
In 1997, the Milwaukee Journal-Sentinel ran a series of articles
describing this problem, including a Green Bay employee who was
convicted of sexually assaulting a disabled woman, an Oshkosh employee
who physically and emotionally abused nursing home residents, and a
Milwaukee employee who charged more than $2,000 on a home health
client's credit card. All had prior criminal convictions. A 1999 Bergen
Record study of home health workers found that in nearly every county,
criminals were working in the homes of the elderly and infirm. Many
aides had committed offenses against patients in their care, but they
were still listed as certified and eligible for work in State records.
Most recently, the Chicago Sun-Times ran an article on November 1,
2002, in which a home care aide beat his disabled client to death with
a hammer. That caregiver had previously been convicted of shooting a
man in the face.
In 1998, at my request, the Senate Special Committee on Aging held a
hearing that focused on how easy it is for known abusers to find work
in long-term care and continue to prey on patients. At that hearing,
the HHS Inspector General presented a report which found that, in the
two States they studied, between 5 to 10 percent of employees currently
working in nursing homes had serious criminal convictions in their
past. They also found that among aides who had abused patients, 15 to
20 percent of them had at least one conviction in their past.
In 1998, I offered an amendment which became law that allowed long-
term care providers to voluntarily use the FBI system for background
checks. So far, 7 percent of those checks have come back with criminal
convictions, including rape and kidnapping.
And on July 30, 2001, the House Government Reform Committee's Special
Investigations Division of the Minority staff issued a report which
found that in the past two years, over 30 percent of nursing homes in
the U.S. were cited for a physical, sexual, or verbal abuse violation
that had the potential to harm residents. Even more striking, the
report found that nearly 10 percent of nursing homes had violations
that caused actual harm to residents.
Let me say again that despite this evidence, I know that the vast
majority of caregivers in nursing homes and home health care do an
excellent job and have their patients' best interests at heart. But
clearly, a national background check system is a critical tool that all
long-term care providers should have--after all, they don't want
abusive caregivers working for them any more than families do. I am
pleased that the nursing home industry has worked with me over the
years to refine this legislation, and I greatly appreciate their
continued support of the bill. This bill reflects their input and will
help ensure a smooth transition to an efficient, accurate background
check system. This is a common-sense, cost-effective step we can and
should take to protect patients by helping long-term care providers
thoroughly screen potential caregivers.
I realize that this legislation will not solve all instances of
abuse. We still need to do more to stop abuse from occurring in the
first place. But this bill will ensure that those who have already
abused an elderly or disabled patient, and those who have committed
violent crimes against people in the past, are kept away from
vulnerable patients.
I want to repeat again that I strongly believe that most long-term
care providers and their staff work hard to deliver the highest quality
care. However, it is imperative that Congress act immediately to get
rid of those that don't.
This bill is the product of collaboration and input from the health
care industry, patient and employee advocates--who all have the same
goal I do: protecting patients in long-term care. I look forward to
continuing to work with my colleagues, the Administration, and the
health care industry in this effort. Protecting our nation's seniors
and disabled deserves our full attention.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 958

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Patient Abuse Prevention
Act''.

SEC. 2. ESTABLISHMENT OF PROGRAM TO PREVENT ABUSE OF NURSING
FACILITY RESIDENTS.

(a) Screening of Skilled Nursing Facility and Nursing
Facility Employee Applicants.--
(1) Medicare program.--Section 1819(b) of the Social
Security Act (42 U.S.C. 1395i-3(b)) is amended by adding at
the end the following:
``(8) Screening of skilled nursing facility workers.--
``(A) Background checks on applicants.--Subject to
subparagraph (B)(ii), before hiring a skilled nursing
facility worker, a skilled nursing facility shall--
``(i) give the worker written notice that the facility is
required to perform background checks with respect to
applicants;
``(ii) require, as a condition of employment, that such
worker--

``(I) provide a written statement disclosing any conviction
for a relevant crime or finding of patient or resident abuse;
``(II) provide a statement signed by the worker authorizing
the facility to request the search and exchange of criminal
records;
``(III) provide in person to the facility a copy of the
worker's fingerprints or thumb print, depending upon
available technology; and
``(IV) provide any other identification information the
Secretary may specify in regulation;

``(iii) initiate a check of the data collection system
established under section 1128E in accordance with
regulations promulgated by the Secretary to determine whether
such system contains any disqualifying information with
respect to such worker; and
``(iv) if that system does not contain any such
disqualifying information--

``(I) request through the appropriate State agency that the
State initiate a State and national criminal background check
on such worker in accordance with the provisions of
subsection (e)(6); and
``(II) submit to such State agency the information
described in subclauses (II) through (IV) of clause (ii) not
more than 7 days (excluding Saturdays, Sundays, and legal
public holidays under section 6103(a) of title 5, United
States Code) after completion of the check against the system
initiated under clause (iii).

``(B) Prohibition on hiring of abusive workers.--
``(i) In general.--A skilled nursing facility may not
knowingly employ any skilled nursing facility worker who has
any conviction for a relevant crime or with respect to whom a
finding of patient or resident abuse has been made.
``(ii) Provisional employment.--After complying with the
requirements of clauses (i), (ii), and (iii) of subparagraph
(A), a skilled nursing facility may provide for a provisional
period of employment for a skilled nursing facility worker
pending completion of the check against the data collection
system described under subparagraph (A)(iii) and the
background check described under subparagraph (A)(iv). Such
facility shall maintain direct supervision of the covered
individual during the worker's provisional period of
employment.
``(C) Reporting requirements.--A skilled nursing facility
shall report to the State any instance in which the facility
determines that a skilled nursing facility worker has
committed an act of resident neglect or abuse or
misappropriation of resident property in the course of
employment by the facility.
``(D) Use of information.--
``(i) In general.--A skilled nursing facility that obtains
information about a skilled nursing facility worker pursuant
to clauses

[[Page S5604]]

(iii) and (iv) of subparagraph (A) may use such information
only for the purpose of determining the suitability of the
worker for employment.
``(ii) Immunity from liability.--A skilled nursing facility
that, in denying employment for an applicant (including
during the period described in subparagraph (B)(ii)),
reasonably relies upon information about such applicant
provided by the State pursuant to subsection (e)(6) or
section 1128E shall not be liable in any action brought by
such applicant based on the employment determination
resulting from the information.
``(iii) Criminal penalty.--Whoever knowingly violates the
provisions of clause (i) shall be fined in accordance with
title 18, United States Code, imprisoned for not more than 2
years, or both.
``(E) Civil penalty.--
``(i) In general.--A skilled nursing facility that violates
the provisions of this paragraph shall be subject to a civil
penalty in an amount not to exceed--

``(I) for the first such violation, $2,000; and
``(II) for the second and each subsequent violation within
any 5-year period, $5,000.

``(ii) Knowing retention of worker.--In addition to any
civil penalty under clause (i), a skilled nursing facility
that--

``(I) knowingly continues to employ a skilled nursing
facility worker in violation of subparagraph (A) or (B); or
``(II) knowingly fails to report a skilled nursing facility
worker under subparagraph (C),

shall be subject to a civil penalty in an amount not to
exceed $5,000 for the first such violation, and $10,000 for
the second and each subsequent violation within any 5-year
period.
``(F) Definitions.--In this paragraph:
``(i) Conviction for a relevant crime.--The term
`conviction for a relevant crime' means any Federal or State
criminal conviction for--

``(I) any offense described in paragraphs (1) through (4)
of section 1128(a); and
``(II) such other types of offenses as the Secretary may
specify in regulations, taking into account the severity and
relevance of such offenses, and after consultation with
representatives of long-term care providers, representatives
of long-term care employees, consumer advocates, and
appropriate Federal and State officials.

``(ii) Disqualifying information.--The term `disqualifying
information' means information about a conviction for a
relevant crime or a finding of patient or resident abuse.
``(iii) Finding of patient or resident abuse.--The term
`finding of patient or resident abuse' means any
substantiated finding by a State agency under subsection
(g)(1)(C) or a Federal agency that a skilled nursing facility
worker has committed--

``(I) an act of patient or resident abuse or neglect or a
misappropriation of patient or resident property; or
``(II) such other types of acts as the Secretary may
specify in regulations.

``(iv) Skilled nursing facility worker.--The term `skilled
nursing facility worker' means any individual (other than a
volunteer) that has access to a patient of a skilled nursing
facility under an employment or other contract, or both, with
such facility. Such term includes individuals who are
licensed or certified by the State to provide such services,
and nonlicensed individuals providing such services, as
defined by the Secretary, including nurse assistants, nurse
aides, home health aides, and personal care workers and
attendants.''.
(2) Medicaid program.--Section 1919(b) of the Social
Security Act (42 U.S.C. 1396r(b)) is amended by adding at the
end the following new paragraph:
``(8) Screening of nursing facility workers.--
``(A) Background checks on applicants.--Subject to
subparagraph (B)(ii), before hiring a nursing facility
worker, a nursing facility shall--
``(i) give the worker written notice that the facility is
required to perform background checks with respect to
applicants;
``(ii) require, as a condition of employment, that such
worker--

``(I) request through the appropriate State agency that the
State initiate a State and national criminal background check
on such worker in accordance with the provisions of
subsection (e)(8); and
``(II) submit to such State agency the information
described in subclauses (II) through (IV) of clause (ii) not
more than 7 days (excluding Saturdays, Sundays, and legal
public holidays under section 6103(a) of title 5, United
States Code) after completion of the check against the system
initiated under clause (iii).

``(B) Prohibition on hiring of abusive workers.--
``(i) In general.--A nursing facility may not knowingly
employ any nursing facility worker who has any conviction for
a relevant crime or with respect to whom a finding of patient
or resident abuse has been made.
``(ii) Provisional employment.--After complying with the
requirements of clauses (i), (ii), and (iii) of subparagraph
(A), a nursing facility may provide for a provisional period
of employment for a nursing facility worker pending
completion of the check against the data collection system
described under subparagraph (A)(iii) and the background
check described under subparagraph (A)(iv). Such facility
shall maintain direct supervision of the worker during the
worker's provisional period of employment.
``(C) Reporting requirements.--A nursing facility shall
report to the State any instance in which the facility
determines that a nursing facility worker has committed an
act of resident neglect or abuse or misappropriation of
resident property in the course of employment by the
facility.
``(D) Use of information.--
``(i) In general.--A nursing facility that obtains
information about a nursing facility worker pursuant to
clauses (iii) and (iv) of subparagraph (A) may use such
information only for the purpose of determining the
suitability of the worker for employment.
``(ii) Immunity from liability.--A nursing facility that,
in denying employment for an applicant (including during the
period described in subparagraph (B)(ii)), reasonably relies
upon information about such applicant provided by the State
pursuant to subsection (e)(8) or section 1128E shall not be
liable in any action brought by such applicant based on the
employment determination resulting from the information.
``(iii) Criminal penalty.--Whoever knowingly violates the
provisions of clause (i) shall be fined in accordance with
title 18, United States Code, imprisoned for not more than 2
years, or both.
``(E) Civil penalty.--
``(i) In general.--A nursing facility that violates the
provisions of this paragraph shall be subject to a civil
penalty in an amount not to exceed--

``(I) for the first such violation, $2,000; and
``(II) for the second and each subsequent violation within
any 5-year period, $5,000.

``(ii) Knowing retention of worker.--In addition to any
civil penalty under clause (i), a nursing facility that--

``(I) knowingly continues to employ a nursing facility
worker in violation of subparagraph (A) or (B); or

``(II) knowingly fails to report a nursing facility worker
under subparagraph (C),

``(I) an act of patient or resident abuse or neglect or a
misappropriation of patient or resident property; or
``(II) such other types of acts as the Secretary may
specify in regulations.

``(iv) Nursing facility worker.--The term `nursing facility
worker' means any individual (other than a volunteer) that
has access to a patient of a nursing facility under an
employment or other contract, or both, with such facility.
Such term includes individuals who are licensed or certified
by the State to provide such services, and nonlicensed
individuals providing such services, as defined by the
Secretary, including nurse assistants, nurse aides, home
health aides, and personal care workers and attendants.''.
(3) Federal responsibilities.--
(A) Development of standard federal and state background
check form.--The Secretary of Health and Human Services, in
consultation with the Attorney General and representatives of
appropriate State agencies, shall develop a model form that
an applicant for employment at a nursing facility may
complete and Federal and State agencies may use to conduct
the criminal background checks required under sections
1819(b)(8) and 1919(b)(8) of the Social Security Act (42
U.S.C. 1395i-3(b), 1396r(b)) (as added by this section).

[[Page S5605]]

(B) Periodic evaluation.--The Secretary of Health and Human
Services, in consultation with the Attorney General,
periodically shall evaluate the background check system
imposed under sections 1819(b)(8) and 1919(b)(8) of the
Social Security Act (42 U.S.C. 1395i-3(b), 1396r(b)) (as
added by this section) and shall implement changes, as
necessary, based on available technology, to make the
background check system more efficient and able to provide a
more immediate response to long-term care providers using the
system.
(4) No preemption of stricter state laws.--Nothing in
section 1819(b)(8) or 1919(b)(8) of the Social Security Act
(42 U.S.C. 1395i-3(b)(8), 1396r(b)(8)) (as so added) shall be
construed to supersede any provision of State law that--
(A) specifies a relevant crime for purposes of prohibiting
the employment of an individual at a long-term care facility
(as defined in section 1128E(g)(6) of the Social Security Act
(as added by section 3(f) of this Act) that is not included
in the list of such crimes specified in such sections or in
regulations promulgated by the Secretary of Health and Human
Services to carry out such sections; or
(B) requires a long-term care facility (as so defined) to
conduct a background check prior to employing an individual
in an employment position that is not included in the
positions for which a background check is required under such
sections.
(5) Technical amendments.--Effective as if included in the
enactment of section 941 of the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act of 2000 (114 Stat.
2763A-585), as enacted into law by section 1(a)(6) of Public
Law 106-554, sections 1819(b) and 1919(b) of the Social
Security Act (42 U.S.C. 1395i-3(b), 1396r(b)), as amended by
such section 941 (as so enacted into law) are each amended by
redesignating the paragraph (8) added by such section as
paragraph (9).
(b) Federal and State Requirements Concerning Background
Checks.--
(1) Medicare.--Section 1819(e) of the Social Security Act
(42 U.S.C. 1395i-3(e)) is amended by adding at the end the
following:
``(6) Federal and state requirements concerning criminal
background checks on skilled nursing facility employees.--
``(A) In general.--Upon receipt of a request by a skilled
nursing facility pursuant to subsection (b)(8) that is
accompanied by the information described in subclauses (II)
through (IV) of subsection (b)(8)(A)(ii), a State, after
checking appropriate State records and finding no
disqualifying information (as defined in subsection
(b)(8)(F)(ii)), shall immediately submit such request and
information to the Attorney General and shall request the
Attorney General to conduct a search and exchange of records
with respect to the individual as described in subparagraph
(B).
``(B) Search and exchange of records by attorney general.--
Upon receipt of a submission pursuant to subparagraph (A),
the Attorney General shall direct a search of the records of
the Federal Bureau of Investigation for any criminal history
records corresponding to the fingerprints and other positive
identification information submitted. The Attorney General
shall provide any corresponding information resulting from
the search to the State.
``(C) State reporting of information to skilled nursing
facility.--Upon receipt of the information provided by the
Attorney General pursuant to subparagraph (B), the State
shall--
``(i) review the information to determine whether the
individual has any conviction for a relevant crime (as
defined in subsection (b)(8)(F)(i));
``(ii) immediately report to the skilled nursing facility
in writing the results of such review; and
``(iii) in the case of an individual with a conviction for
a relevant crime, report the existence of such conviction of
such individual to the database established under section
1128E.
``(D) Fees for performance of criminal background checks.--
``(i) Authority to charge fees.--

``(I) Attorney general.--The Attorney General may charge a
fee to any State requesting a search and exchange of records
pursuant to this paragraph and subsection (b)(8) for
conducting the search and providing the records. The amount
of such fee shall not exceed the lesser of the actual cost of
such activities or $50. Such fees shall be available to the
Attorney General, or, in the Attorney General's discretion,
to the Federal Bureau of Investigation until expended.
``(II) State.--A State may charge a skilled nursing
facility a fee for initiating the criminal background check
under this paragraph and subsection (b)(8), including fees
charged by the Attorney General, and for performing the
review and report required by subparagraph (C). The amount of
such fee shall not exceed the actual cost of such activities.

``(ii) Prohibition on charging applicants or employees.--An
entity may not impose on an applicant for employment or an
employee any charges relating to the performance of a
background check under this paragraph.
``(E) Regulations.--
``(i) In general.--In addition to the Secretary's authority
to promulgate regulations under this title, the Attorney
General, in consultation with the Secretary, may promulgate
such regulations as are necessary to carry out the Attorney
General's responsibilities under this paragraph and
subsection (b)(9), including regulations regarding the
security confidentiality, accuracy, use, destruction, and
dissemination of information, audits and recordkeeping, and
the imposition of fees.
``(ii) Appeal procedures.--The Attorney General, in
consultation with the Secretary, shall promulgate such
regulations as are necessary to establish procedures by which
an applicant or employee may appeal or dispute the accuracy
of the information obtained in a background check conducted
under this paragraph. Appeals shall be limited to instances
in which an applicant or employee is incorrectly identified
as the subject of the background check, or when information
about the applicant or employee has not been updated to
reflect changes in the applicant's or employee's criminal
record.
``(F) Report.--Not later than 2 years after the date of
enactment of this paragraph, the Attorney General shall
submit a report to Congress on--
``(i) the number of requests for searches and exchanges of
records made under this section;
``(ii) the disposition of such requests; and
``(iii) the cost of responding to such requests.''.
(2) Medicaid.--Section 1919(e) of the Social Security Act
(42 U.S.C. 1396r(e)) is amended by adding at the end the
following:
``(8) Federal and state requirements concerning criminal
background checks on nursing facility employees.--
``(A) In general.--Upon receipt of a request by a nursing
facility pursuant to subsection (b)(8) that is accompanied by
the information described in subclauses (II) through (IV) of
subsection (b)(8)(A)(ii), a State, after checking appropriate
State records and finding no disqualifying information (as
defined in subsection (b)(8)(F)(ii)), shall immediately
submit such request and information to the Attorney General
and shall request the Attorney General to conduct a search
and exchange of records with respect to the individual as
described in subparagraph (B).
``(B) Search and exchange of records by attorney general.--
Upon receipt of a submission pursuant to subparagraph (A),
the Attorney General shall direct a search of the records of
the Federal Bureau of Investigation for any criminal history
records corresponding to the fingerprints and other positive
identification information submitted. The Attorney General
shall provide any corresponding information resulting from
the search to the State.
``(C) State reporting of information to nursing facility.--
Upon receipt of the information provided by the Attorney
General pursuant to subparagraph (B), the State shall--
``(i) review the information to determine whether the
individual has any conviction for a relevant crime (as
defined in subsection (b)(8)(F)(i));
``(ii) immediately report to the nursing facility in
writing the results of such review; and
``(iii) in the case of an individual with a conviction for
a relevant crime, report the existence of such conviction of
such individual to the database established under section
1128E.
``(D) Fees for performance of criminal background checks.--
``(i) Authority to charge fees.--

``(I) Attorney general.--The Attorney General may charge a
fee to any State requesting a search and exchange of records
pursuant to this paragraph and subsection (b)(8) for
conducting the search and providing the records. The amount
of such fee shall not exceed the lesser of the actual cost of
such activities or $50. Such fees shall be available to the
Attorney General, or, in the Attorney General's discretion,
to the Federal Bureau of Investigation, until expended.
``(II) State.--A State may charge a nursing facility a fee
for initiating the criminal background check under this
paragraph and subsection (b)(8), including fees charged by
the Attorney General, and for performing the review and
report required by subparagraph (C). The amount of such fee
shall not exceed the actual cost of such activities.

[[Page S5606]]

employee is incorrectly identified as the subject of the
background check, or when information about the applicant or
employee has not been updated to reflect changes in the
applicant's or employee's criminal record.
``(F) Report.--Not later than 2 years after the date of
enactment of this paragraph, the Attorney General shall
submit a report to Congress on--
``(i) the number of requests for searches and exchanges of
records made under this section;
``(ii) the disposition of such requests; and
``(iii) the cost of responding to such requests.''.
(c) Application to Other Entities Providing Home Health or
Long-Term Care Services.--
(1) Medicare.--Part D of title XVIII of the Social Security
Act (42 U.S.C. 1395x et seq.) is amended by adding at the end
the following:

``APPLICATION OF SKILLED NURSING FACILITY PREVENTIVE ABUSE PROVISIONS
TO ANY PROVIDER OF SERVICES OR OTHER ENTITY PROVIDING HOME HEALTH OR
LONG-TERM CARE SERVICES

``Sec. 1897. (a) In General.--The requirements of
subsections (b)(8) and (e)(6) of section 1819 shall apply to
any provider of services or any other entity that is eligible
to be paid under this title for providing home health
services, hospice care (including routine home care and other
services included in hospice care under this title), or long-
term care services to an individual entitled to benefits
under part A or enrolled under part B, including an
individual provided with a Medicare+Choice plan offered by a
Medicare+Choice organization under part C (in this section
referred to as a `medicare beneficiary').
``(b) Supervision of Provisional Employees.--
``(1) In general.--With respect to an entity that provides
home health services, such entity shall be considered to have
satisfied the requirements of section 1819(b)(8)(B)(ii) or
1919(b)(8)(B)(ii) if the entity meets such requirements for
supervision of provisional employees of the entity as the
Secretary shall, by regulation, specify in accordance with
paragraph (2).
``(2) Requirements.--The regulations required under
paragraph (1) shall provide the following:
``(A) Supervision of a provisional employee shall consist
of ongoing, good faith, verifiable efforts by the supervisor
of the provisional employee to conduct monitoring and
oversight activities to ensure the safety of a medicare
beneficiary.
``(B) For purposes of subparagraph (A), monitoring and
oversight activities may include (but are not limited to) the
following:
``(i) Follow-up telephone calls to the medicare
beneficiary.
``(ii) Unannounced visits to the medicare beneficiary's
home while the provisional employee is serving the medicare
beneficiary.
``(iii) To the extent practicable, limiting the provisional
employee's duties to serving only those medicare
beneficiaries in a home or setting where another family
member or resident of the home or setting of the medicare
beneficiary is present.''.
(2) Medicaid.--Section 1902(a) of the Social Security Act
(42 U.S.C. 1396a) is amended--
(A) in paragraph (64), by striking ``and'' at the end;
(B) in paragraph (65), by striking the period and inserting
``; and''; and
(C) by inserting after paragraph (65) the following:
``(66) provide that any entity that is eligible to be paid
under the State plan for providing home health services,
hospice care (including routine home care and other services
included in hospice care under title XVIII), or long-term
care services for which medical assistance is available under
the State plan to individuals requiring long-term care
complies with the requirements of subsections (b)(8) and
(e)(8) of section 1919 and section 1897(b) (in the same
manner as such section applies to a medicare beneficiary).''.
(3) Expansion of State Nurse Aide Registry.--
(A) Medicare.--Section 1819 of the Social Security Act (42
U.S.C. 1395i-3) is amended--
(i) in subsection (e)(2)--

(I) in the paragraph heading, by striking ``Nurse aide
registry'' and inserting ``Employee registry'';
(II) in subparagraph (A)--

(aa) by striking ``By not later than January 1, 1989, the''
and inserting ``The'';
(bb) by striking ``a registry of all individuals'' and
inserting ``a registry of (i) all individuals''; and
(cc) by inserting before the period the following: ``, (ii)
all other skilled nursing facility employees with respect to
whom the State has made a finding described in subparagraph
(B), and (iii) any employee of any provider of services or
any other entity that is eligible to be paid under this title
for providing home health services, hospice care (including
routine home care and other services included in hospice care
under this title), or long-term care services and with
respect to whom the entity has reported to the State a
finding of patient neglect or abuse or a misappropriation of
patient property''; and

(III) in subparagraph (C), by striking ``a nurse aide'' and
inserting ``an individual''; and

(ii) in subsection (g)(1)--

(I) by striking the first sentence of subparagraph (C) and
inserting the following: ``The State shall provide, through
the agency responsible for surveys and certification of
skilled nursing facilities under this subsection, for a
process for the receipt and timely review and investigation
of allegations of neglect and abuse and misappropriation of
resident property by a nurse aide or a skilled nursing
facility employee of a resident in a skilled nursing
facility, by another individual used by the facility in
providing services to such a resident, or by an individual
described in subsection (e)(2)(A)(iii).'';
(II) in the fourth sentence of subparagraph (C), by
inserting ``or described in subsection (e)(2)(A)(iii)'' after
``used by the facility'';
(III) in subparagraph (D)--

(aa) in the subparagraph heading, by striking ``nurse
aide'';
(bb) in clause (i), in the matter preceding subclause (I),
by striking ``a nurse aide'' and inserting ``an individual'';
and
(cc) in clause (i)(I), by striking ``nurse aide'' and
inserting ``individual''.
(B) Medicaid.--Section 1919 of the Social Security Act (42
U.S.C. 1396r) is amended--
(i) in subsection (e)(2)--

(I) in the paragraph heading, by striking ``Nurse aide
registry'' and inserting ``Employee registry'';
(II) in subparagraph (A)--

(aa) by striking ``By not later than January 1, 1989, the''
and inserting ``The'';
(bb) by striking ``a registry of all individuals'' and
inserting ``a registry of (i) all individuals''; and
(cc) by inserting before the period the following: ``, (ii)
all other nursing facility employees with respect to whom the
State has made a finding described in subparagraph (B), and
(iii) any employee of an entity that is eligible to be paid
under the State plan for providing home health services,
hospice care (including routine home care and other services
included in hospice care under title XVIII), or long-term
care services and with respect to whom the entity has
reported to the State a finding of patient neglect or abuse
or a misappropriation of patient property''; and

(III) in subparagraph (C), by striking ``a nurse aide'' and
inserting ``an individual''; and

(ii) in subsection (g)(1)--

(I) by striking the first sentence of subparagraph (C) and
inserting the following: ``The State shall provide, through
the agency responsible for surveys and certification of
nursing facilities under this subsection, for a process for
the receipt and timely review and investigation of
allegations of neglect and abuse and misappropriation of
resident property by a nurse aide or a nursing facility
employee of a resident in a nursing facility, by another
individual used by the facility in providing services to such
a resident, or by an individual described in subsection
(e)(2)(A)(iii).''; and
(II) in the fourth sentence of subparagraph (C), by
inserting ``or described in subsection (e)(2)(A)(iii)'' after
``used by the facility''; and
(III) in subparagraph (D)--

(aa) in the subparagraph heading, by striking ``nurse
aide''; and
(bb) in clause (i), in the matter preceding subclause (I),
by striking ``a nurse aide'' and inserting ``an individual'';
and
(cc) in clause (i)(I), by striking ``nurse aide'' and
inserting ``individual''.
(d) Reimbursement of Costs for Background Checks.--The
Secretary of Health and Human Services shall reimburse
nursing facilities, skilled nursing facilities, and other
entities for costs incurred by the facilities and entities in
order to comply with the requirements imposed under sections
1819(b)(8) and 1919(b)(8) of such Act (42 U.S.C. 1395i-
3(b)(8), 1396r(b)(8)), as added by this section.

SEC. 3. INCLUSION OF ABUSIVE WORKERS IN THE DATABASE
ESTABLISHED AS PART OF NATIONAL HEALTH CARE
FRAUD AND ABUSE DATA COLLECTION PROGRAM.

(a) Inclusion of Abusive Acts Within a Long-Term Care
Facility or Provider.--Section 1128E(g)(1)(A) of the Social
Security Act (42 U.S.C. 1320a-7e(g)(1)(A)) is amended--
(1) by redesignating clause (v) as clause (vi); and
(2) by inserting after clause (iv), the following:
``(v) A finding of abuse or neglect of a patient or a
resident of a long-term care facility, or misappropriation of
such a patient's or resident's property.''.
(b) Coverage of Long-Term Care Facility or Provider
Employees.--Section 1128E(g)(2) of the Social Security Act
(42 U.S.C. 1320a-7e(g)(2)) is amended by inserting ``, and
includes any individual of a long-term care facility or
provider (other than any volunteer) that has access to a
patient or resident of such a facility under an employment or
other contract, or both, with the facility or provider
(including individuals who are licensed or certified by the
State to provide services at the facility or through the
provider, and nonlicensed individuals, as defined by the
Secretary, providing services at the facility or through the
provider, including nurse assistants, nurse aides, home
health aides, individuals who provide home care, and personal
care workers and attendants)'' before the period.
(c) Reporting by Long-Term Care Facilities or Providers.--
(1) In general.--Section 1128E(b)(1) of the Social Security
Act (42 U.S.C. 1320a-7e(b)(1)) is amended by striking ``and
health plan'' and inserting ``, health plan, and long-term
care facility or provider''.

[[Page S5607]]

(2) Correction of information.--Section 1128E(c)(2) of the
Social Security Act (42 U.S.C. 1320a-7e(c)(2)) is amended by
striking ``and health plan'' and inserting ``, health plan,
and long-term care facility or provider''.
(d) Access to Reported Information.--Section 1128E(d)(1) of
the Social Security Act (42 U.S.C. 1320a-7e(d)(1)) is amended
by striking ``and health plans'' and inserting ``, health
plans, and long-term care facilities or providers''.
(e) Mandatory Check of Database by Long-Term Care
Facilities or Providers.--Section 1128E(d) of the Social
Security Act (42 U.S.C. 1320a-7e(d)) is amended by adding at
the end the following:
``(3) Mandatory check of database by long-term care
facilities or providers.--A long-term care facility or
provider shall check the database maintained under this
section prior to hiring under an employment or other
contract, or both, any individual as an employee of such a
facility or provider who will have access to a patient or
resident of the facility or provider (including individuals
who are licensed or certified by the State to provide
services at the facility or through the provider, and
nonlicensed individuals, as defined by the Secretary, that
will provide services at the facility or through the
provider, including nurse assistants, nurse aides, home
health aides, individuals who provide home care, and personal
care workers and attendants).''.
(f) Definition of Long-Term Care Facility or Provider.--
Section 1128E(g) of the Social Security Act (42 U.S.C. 1320a-
7e(g)) is amended by adding at the end the following:
``(6) Long-term care facility or provider.--The term `long-
term care facility or provider' means a skilled nursing
facility (as defined in section 1819(a)), a nursing facility
(as defined in section 1919(a)), a home health agency, a
provider of hospice care (as defined in section 1861(dd)(1)),
a long-term care hospital (as described in section
1886(d)(1)(B)(iv)), an intermediate care facility for the
mentally retarded (as defined in section 1905(d)), or any
other facility or entity that provides, or is a provider of,
long-term care services, home health services, or hospice
care (including routine home care and other services included
in hospice care under title XVIII), and receives payment for
such services under the medicare program under title XVIII or
the medicaid program under title XIX.''.
(g) Authorization of Appropriations.--There is authorized
to be appropriated to carry out the amendments made by this
section, $10,200,000 for fiscal year 2003.

SEC. 4. PREVENTION AND TRAINING DEMONSTRATION PROJECT.

(a) Establishment.--The Secretary of Health and Human
Services shall establish a demonstration program to provide
grants to develop information on best practices in patient
abuse prevention training (including behavior training and
interventions) for managers and staff of hospital and health
care facilities.
(b) Eligibility.--To be eligible to receive a grant under
subsection (a), an entity shall be a public or private
nonprofit entity and prepare and submit to the Secretary of
Health and Human Services an application at such time, in
such manner, and containing such information as the Secretary
may require.
(c) Use of Funds.--Amounts received under a grant under
this section shall be used to--
(1) examine ways to improve collaboration between State
health care survey and provider certification agencies, long-
term care ombudsman programs, the long-term care industry,
and local community members;
(2) examine patient care issues relating to regulatory
oversight, community involvement, and facility staffing and
management with a focus on staff training, staff stress
management, and staff supervision;
(3) examine the use of patient abuse prevention training
programs by long-term care entities, including the training
program developed by the National Association of Attorneys
General, and the extent to which such programs are used; and
(4) identify and disseminate best practices for preventing
and reducing patient abuse.
(d) Authorization of Appropriations.--There is authorized
to be appropriated such sums as may be necessary to carry out
this section.

SEC. 5. EFFECTIVE DATE.

This Act and the amendments made by the Act shall take
effect on the date that is 6 months after the effective date
of final regulations promulgated to carry out this Act and
such amendments.
______

By Mr. INHOFE (for himself, Mr. Kyl, Mr. Burns, Mr. Thomas, and
Mr. Grassley):
S. 959. A bill to limit the age restrictions imposed by the
Administrator of the Federal Aviation Administration for the issuance
or renewal of certain airman certificates, and for other purposes; to
the Committee on Commerce, Science, and Transportation.
Mr. INHOFE. Mr. President, as the Senate's only commercially licensed
pilot, I rise today, along with my colleagues, Senator Kyl, Senator
Burns, Senator Thomas and Senator Grassley, to introduce a bill that
will help end age discrimination among airline pilots.
This bill will abolish the Federal Aviation Administration's, FAA,
Age 60 Rule--the regulation that for 43 years has forced the retirement
of airline pilots the day they turn 60--and replace it with a rational
plan that raises the retirement age to 63 immediately and then
incrementally increases the age limit to 65.
Most nations have abolished mandatory age 60 retirement rules. The
United States is one of only two countries in the Joint Aviation
Authorities that requires its commercial pilots to retire at the age of
60. Some countries, including Canada, Australia, and New Zealand have
no upper age limit at all.
The Age 60 Rule has no basis in science or safety and never did. FAA
data shows that pilots over age 60 are as safe as, and in some cases
safer than, their younger colleagues. In 1981, the National Institute
of Aging stated that ``the Age 60 Rule appears indefensible on medical
grounds'' and ``there is no convincing medical evidence to support age
60, or any other specific age, for mandatory pilot retirement.''
This bill will allow our most experienced pilots--demonstrably
healthy, and fit for duty--to retain their jobs, a step that will
benefit pilots, the financially burdened airlines, and most
importantly, passengers. Now, more than ever before, we need to keep
our best pilots flying.
Again, there is no scientific justification for requiring pilots to
retire at age 60. Our pilots, our airlines, and our passengers deserve
our consideration. I urge the rest of my colleagues to support this
important legislation.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 959

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

SECTION 1. LIMITATION ON AGE RESTRICTIONS.

Section 44703 of title 49, United States Code, is amended
by adding at the end the following:
``(k) Limitation on Age Restrictions.--
``(1) In general.--Notwithstanding any other provision of
law, the Administrator may not, solely by reason of a
person's age, if such person is 65 years of age or younger--
``(A) refuse to issue to, or renew for, such person an
airman certificate for the operation of aircraft engaged in
operations under part 121 or part 135 of title 14, Code of
Federal Regulations; or
``(B) require an air carrier to terminate the employment
of, or refuse to employ, such person as a pilot on such an
aircraft owned or operated by the air carrier.
``(2) Applicability.--Paragraph (1) shall only apply to
persons who have not reached the age of 64 as of the date of
enactment of this subsection.''.
______

By Mr. AKAKA:
S. 960. A bill to amend the reclamation Wastewater and Groundwater
Study and Facilities Act to authorize certain projects in the State of
Hawaii and to amend the Hawaii Water Resources Act of 2000 to modify
the water resources study; to the Committee on Energy and Natural
Resources.
Mr. AKAKA. Mr. President, I rise today to introduce legislation to
authorize three important water reclamation projects in the State of
Hawaii. In addition, this bill increases the amount authorized for the
Federal share of the activities under P.L. 106-566, the Hawaii Water
Resources Act of 2000.
The Hawaii Water Resources Act of 2000 was an important first step in
addressing Hawaii's irrigation and water delivery systems. It allowed
the Bureau of Reclamation to survey irrigation and water delivery
systems in Hawaii. It also instructed the Bureau to identify new
opportunities for reclamation and reuse of water and wastewater for
agriculture and non-agricultural purposes. In addition, the Act
included Hawaii in the Bureau of Reclamation's wastewater reclamation
program and extended drought relief programs to Hawaii. While this was
an important beginning, more needs to be done, particularly since the
Honolulu Board of Water Supply predicts that even with improved
conservation methods, the island of Oahu will run out of potable water
by 2018. This means that the use rate exceeds the recharge rate and
Oahu residents and visitors will be ``mining'' for water. Even more
disconcerting is the fact that Oahu will run out of fresh water by
2018. It is vitally important for the State of Hawaii to begin working
on water reclamation projects.

[[Page S5608]]

This legislation authorizes three water reclamation projects. The
first project, in Honolulu, will provide reliable potable water through
resource diversification to meet existing and future demands,
particularly in the Ewa area of Oahu where water demands are outpacing
the availability of drinking water. The second project, in North Kona,
will address the issue of effluent being discharged into a temporary
disposal sump from the Kealakehe Wastewater Treatment Plant. The third
project, in Lahaina, will reduce the use of potable water by extending
the County of Maui's main recycled water pipeline. The legislation also
authorizes an additional $1.7 million for the Bureau of Reclamation to
complete its study of Hawaii's irrigation and water delivery systems.
This is a challenging task as the Bureau is reviewing the water systems
in the State.
I urge my colleagues to support this legislation which is vital to
the people of Hawaii.
______

By Ms. MURKOWSKI:
S. 961. A bill to expand the scope of the HUBzone program to include
difficult development areas; to the Committee on Small Business and
Entrepreneurship.
Ms. MURKOWSKI. Mr. President, I rise today to introduce legislation
to correct an inequity in the HUBzone contracting program administered
by the Small Business Administration, SBA. This bill amends the
criteria by which areas are designated as HUBzone under the Small
Business Act by adding a new category designated as ``Difficult
Development Areas.'' These ``Difficult Development Areas'' are already
recognized by the Internal Revenue Service and the Department of
Housing and Urban Development. For reasons I will explain, the
businesses and people in the community of Ketchikan, AK have been
wrongly denied participation in the HUBzone program. This bill will
take care of that problem.
The current HUBzone qualifications have two tiers. The first is that
the county in which a business seeking to participate in the program
must not be located in a Metropolitan Statistical Area, MSA. The second
level has three separate criteria. If an area meets any one of the
second level criteria, it qualifies as a HUBzone area. One of the
criteria simply relates to whether a business is located in an Indian
Reservation. The other two are correlated to the characteristics of the
resident population.
The first of the characteristic is that the area is not located in a
metropolitan statistical area at the time of the most recent census.
the second criterion is that the unemployment rate in the area is not
less than 140 percent of the statewide average unemployment. In the
case of Ketchikan, the community is not located in a metropolitan
statistical area. In February of this year the Alaska statewide
unemployment rate was 7.1 percent almost 2 percent higher than the
national average. But Ketchian's preliminary unemployment rate for
February is 11 percent and the reviewed rate for January was 11.9
percent. The Ketchikan figure currently exceeds the requirement. In
June of 2002 the rate was 8.6 percent in the Ketchikan Gateway Borough
in comparison to 7.4 percent statewide at that same time. But because
of the timing of the compiling of the information by the Census Bureau,
Ketchikan has been denied participation in the program although it
routinely exceeds the statewide rate. The anomaly is that for a few
short months in the summer Ketchikan does not exceed 140 percent of the
statewide average due to the influx of workers from the area related to
the tourism industry.
The SBA has the best intentions and understands the problems.
However, the SBA has stated to me that nothing short of a legislative
change can fix the problem. Part of the problem as I understand it is
that the SBA's current use of the median income and unemployment rate
criteria makes the assumption that the populations are relatively
immobile. Further, the SBA criterion assumes that the area in question
has a fully developed labor market. The criteria assume a community
model more closely aligned to the traditional urban areas.
In Alaska, our largest community, Anchorage is rightfully not
considered a HUBzone area. But the SBA's criteria based on the use of
the Census Bureau statistics fails to accurately reflect the true
unemployment and labor market in one place in particular in Alaska--
Ketchikan. The program now uses a Qualified Census Tract.
Ketchikan is a small coastal community that was highly dependent on
the timber industry which has been shut down as a result of changes in
Federal policies and activities of the U.S. Forest Service. As a
result, the population has become highly dependent on the tourism
industry. Further, the labor pool is highly transient and leaves to
collect unemployment after the summer tourist season is over.
The Census Bureau data taken when the summer population is higher and
more fully employed does not reflect the reality of the area. As a
result the Ketchikan Gateway Borough is not considered a HUBzone. There
is a dry-dock and ship repair facility located in Ketchikan that could
provide year round employment. But it cannot compete for government
vessel repair contracts offered by the U.S. Coast Guard and the NOAA
that have been set aside for HUBzone. These vessels operate in Alaska
and could be better repaired near where they operate. Now they must
leave the State and perhaps be out of service longer.
The bill adds a fourth area to qualify as a HUBzone. The Deptartment
of Housing and Urban Development already has a program that recognizes
not only the Qualified Census Tracts but also denotes a ``Non-
metropolitan Difficult Development Area.'' The amendment simply adds
this Difficult Development Area. Many of these areas already qualify as
HUBzones under the prior three criteria. I have asked the SBA to advise
me how much this would expand their program but in reality I expect the
addition to be only a minor expansion of the HUBzone program. However
small the change is, the change will be significant to the people and
businesses located in Ketchikan, AK.
Mr. President, I ask unanimous consent that a copy of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 961

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

SECTION 1. EXPANSION OF HUBZONE PROGRAM.

Section 3(p)(4)(B)(ii) of the Small Business Act (15 U.S.C.
632(p)(4)(B)(ii)) is amended--
(1) in subclause (I), by striking ``or'' at the end;
(2) in subclause (II), by striking the period at the end
and inserting ``; or''; and
(3) by adding after subclause (II) the following:

``(III) there is located a difficult development area, as
designated by the Secretary of Housing and Urban Development
in accordance with section 42(d)(5)(C)(iii) of the Internal
Revenue Code of 1986.''.

______

By Mrs. LINCOLN (for herself, Mr. Rockefeller, Mr. Bingaman, and
Mr. Breaux):
S. 962. A bill to amend the Internal Revenue Code of 1986 to
accelerate the increase in the child tax credit and to expand
refundability of such credit, and for other purposes; to the Committee
on Finance.
Mr. ROCKEFELLER. Mr. President, I am pleased to cosponsor legislation
being introduced today that will dramatically improve the child tax
credit. I thank my friend and colleague, Senator Lincoln, for her hard
work on behalf of our Nation's working families.
In the 6 years since the child tax credit was first enacted, it has
provided important tax relief to families across the country. Income
taxes can be particularly burdensome to moderate income families who
are facing increased costs for food, housing, medicine, education, and
other basic needs for their children. Indeed, almost half of the
benefits of this credit are enjoyed by families with taxable income
under $50,000 per year. This is important in States like mine; in West
Virginia, almost 80 percent of the taxpayers have annual incomes below
$50,000.
While the current child tax credit is excellent--it could be even
better. The $600 credit, which is available only for children under the
age of 17, does not truly recognize the costs that face many families
raising children. Moreover, many working families do not have enough
income to qualify for the credit. Make no mistake, I am talking about
hard-working parents who go to

[[Page S5609]]

their jobs every day and take their responsibilities to their children
very seriously. These parents are paying payroll taxes, but cannot
provide for some of the basic needs of their children. The legislation
introduced today would improve the law so that a greater portion of the
child tax credit could be refunded to these admirable parents.
Specifically, this legislation includes two important improvements to
the current child tax credit that will benefit all families who claim
the credit. First, the legislation would increase the amount of the tax
credit from $600 to $1,000 immediately. Second, the bill increases the
age of children who are eligible for the credit from 16 to 18. We know
that 17- and 18-year-old children are facing enormous educational
expenses in order to attend college or technical school. We ought to
help parents pay for this education by allowing them to continue to
receive the child tax credit until their child is a legal adult. The
bill also includes two important improvements to the eligibility
criteria for the refundable credit. By lowering the income threshold
for the refundable credit and increasing the percentage of income
eligible for the refundable credit, we can ensure that more of the
families most in need of assistance can benefit from this credit.
The child tax credit is one of the most important ways that Congress
can demonstrate its support for America's families. And I hope that my
colleagues will support this legislation which would dramatically
improve the child tax credit.
______

By Ms. STABENOW (for herself and Mr. Levin):
S. 963. A bill to require the Commandant of the Coast Guard to convey
the United States Coast Guard Cutter Bramble, upon its decommissioning,
to the Port Huron Museum of Arts and History, Port Huron, Michigan, for
use for education and historical display, and for other purposes; to
the Committee on Commerce, Science, and Transportation.
Ms. STABENOW. Mr. President, I rise today to speak on behalf of a
bill I am introducing to turn the historic United States Coast Guard
Cutter Bramble, into a floating maritime museum in Port Huron, MI,
after she is decommissioned later this year.
Once you hear the history of the Bramble, I am sure you will all
agree that not only should she be preserved, but the Port Huron Museum
of Arts and History will be able to provide the ideal home.
The Bramble has been part of many important missions since it was
first launched on October 23, 1943.
But--along with her sister ships, Spar and Storis--the Bramble is
best known for being part of the first mission by United States vessels
to steam from the Pacific Ocean to the Atlantic Ocean via the Northwest
Passage. Upon completing this mission, Bramble and her sister ships
went on to become the first to circumnavigate the North American
continent--a dream of sailors for more than 400 years.
The Bramble set out on this historic mission from Miami, Florida, on
May 24, 1957. Steaming through the Panama Canal to the Pacific Ocean,
the Bramble then headed to Seattle.
On July 1, 1957, the Bramble left Seattle and headed toward the
Atlantic Ocean via the Bering Straights and the Arctic Ocean. Sixty-
four days and 4,500 miles later, the Bramble and her sister ships
reached the Atlantic and on December 2, 1957, she tied up again in
Miami--completing the first circumnavigation of the North American
continent.
For that reason alone, the Bramble would be worth saving as a museum
of maritime history.
But over her 60 year history, the Bramble has seized tons of illegal
drugs, saved hundreds of lives in search and rescue missions, helped
train maritime police in 10 Caribbean nations, maintained buoys and
other aids to navigation, performed icebreaking duties in the Great
Lakes and been the recipient of numerous awards, service ribbons and
commendations.
The Bramble also has a long history with Michigan and Port Huron and
that is why I believe my State would make an excellent home once this
historic ship is retired.
The Bramble first came to Detroit, MI, in 1962, where she performed
search and rescue, icebreaking, law enforcement and navigation missions
throughout the Great Lakes.
Since 1975, the Bramble's homeport has been Port Huron. And that is
where I think she should stay after she is decommissioned.
The Coast Guard motto is Semper Paratus--or Always Ready.
For 60 years the Bramble has been there--always ready to serve our
country in waters close to home and far away.
And I believe that as a museum of maritime history, she can continue
serving us for years to come--still Semper Paratus--still Always Ready.
I ask unanimous consent that the text of this legislation be printed
in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 963

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

SECTION 1. CONVEYANCE OF DECOMMISSIONED COAST GUARD CUTTER
BRAMBLE.

(a) In General.--Upon the scheduled decommissioning of the
United States Coast Guard Cutter BRAMBLE (WLB 406), the
Commandant of the Coast Guard shall convey all right, title,
and interest of the United States in and to that vessel to
the Port Huron Museum of Arts and History, a nonprofit
corporation organized under the laws of the State of
Michigan, located in Port Huron, Michigan, without
consideration, if--
(1) the Museum agrees--
(A) to use the vessel for purposes of education and
historical display;
(B) not to use the vessel for commercial transportation
purposes;
(C) to make the vessel available to the United States if
needed for use by the Commandant in time of war or a national
emergency; and
(D) to hold the United States harmless for any claims
arising from exposure to hazardous materials, including
asbestos and polychlorinated biphenyls (PCBs), after
conveyance of the vessel under this subsection, except for
claims arising from the use by the United States under
subparagraph (C);
(2) the Museum has funds available, in the form of cash,
liquid assets, or a written loan commitment, in the amount of
at least $700,000 that the Museum agrees to commit to operate
and maintain the vessel in good working condition; and
(3) the Museum agrees to any other conditions the
Commandant considers appropriate.
(b) Maintenance of Vessel.--Prior to conveyance of the
vessel under this section, the Commandant shall, to the
extent practicable, and subject to other Coast Guard mission
requirements, maintain the integrity of the vessel and its
equipment until the delivery to the Museum.
(c) Delivery.--If a conveyance of the United States Coast
Guard Cutter BRAMBLE is made under this section, the
Commandant shall deliver the vessel at the place where the
vessel is located, in its present condition, and without cost
to the United States.
(d) Conveyance Not a Distribution in Commerce.--The
conveyance of the vessel under this section shall not be
considered a distribution in commerce for purposes of section
6(e) of the Toxic Substances Control Act (15 U.S.C. 2605(e)).
(e) Other Excess Equipment.--The Commandant may convey to
the Museum any excess equipment or parts from other
decommissioned Coast Guard vessels for use to enhance the
operability and function of the United States Coast Guard
Cutter BRAMBLE as an historical display.
______

By Mr. LOTT (for himself and Mr. Rockefeller):
S. 964. A bill to reauthorize the essential air service program under
chapter 471 of title 49, United States Code, and for other purposes; to
the Committee on Commerce, Science, and Transportation.
Mr. LOTT. Mr. President, I ask unanimous consent that the text of the
bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 964

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Small Community and Rural
Air Service Revitalization Act of 2003''.

SEC. 2. REAUTHORIZATION OF ESSENTIAL AIR SERVICE PROGRAM.

Section 41742(a) of title 49, United States Code, is
amended to read as follows:
``(a) In General.--There are authorized to be appropriated
to the Secretary of Transportation to carry out the essential
air service under this subchapter, $113,000,000 for each of
fiscal years 2004 through 2007, $50,000,000 of which for each
such year shall be derived from amounts received by the
Federal Aviation Administration credited to the account
established under section 45303

[[Page S5610]]

of this title or otherwise provided to the Administration.''.

SEC. 3. INCENTIVE PROGRAM.

(a) In General.--Chapter 417 of title 49, United States
Code, is amended by adding at the end the following:

``SUBCHAPTER IV--MARKETING INCENTIVE PROGRAM

``Sec. 41781. Purpose.
``Sec. 41782. Marketing program.
``Sec. 41783. State marketing assistance.
``Sec. 41784. Definitions.
``Sec. 41785. Authorization of appropriations.

``Sec. 41781. Purposes

``The purposes of this subchapter are--
``(1) to enable essential air service communities to
increase boardings and the level of passenger usage of
airport facilities at an eligible place by providing
technical, financial, and other marketing assistance to such
communities and to States;
``(2) to reduce subsidy costs under subchapter II of this
chapter as a consequence of such increased usage; and
``(3) to provide such communities with opportunities to
obtain, retain, and improve transportation services.

``Sec. 41782. Marketing program

``(a) In General.--The Secretary of Transportation shall
establish a marketing incentive program for eligible
essential air service communities receiving assistance under
subchapter II under which the airport sponsor in such a
community may receive a grant of not more than $50,000 to
develop and implement a marketing plan to increase passenger
boardings and the level of passenger usage of its airport
facilities.
``(b) Matching Requirement; Success Bonuses----
``(1) In general.--Except as provided in paragraphs (2) and
(3), not less than 25 percent of the publicly financed costs
associated with the marketing plan shall come from non-
Federal sources. For purposes of this paragraph--
``(A) the non-Federal portion of the publicly financed
costs may be derived from contributions in kind; and
``(B) State or local matching contributions may not be
derived, directly or indirectly, from Federal funds, but the
use by a state or local government of proceeds from the sale
of bonds to provide the matching contribution is not
considered to be a contribution derived directly or
indirectly from Federal funds, without regard to the Federal
income tax treatment of interest paid on those bonds or the
Federal income tax treatment of those bonds.
``(2) Bonus for 25-percent increase in usage.--Except as
provided in paragraph (3), if, after any 12-month period
during which a marketing plan has been in effect, the
Secretary determines that the marketing plan has increased
average monthly boardings, or the level of passenger usage,
at the airport facilities at the eligible place, by 25
percent or more, then only 10 percent of the publicly
financed costs associated with the marketing plan shall be
required to come from non-Federal sources for the following
12-month period.
``(3) Bonus for 50-percent increase in usage.--If, after
any 12-month period during which a marketing plan has been in
effect, the Secretary determines that the marketing plan has
increased average monthly boardings, or the level of
passenger usage, at the airport facilities at the eligible
place, by 50 percent or more, then no portion of the publicly
financed costs associated with the marketing plan shall be
required to come from non-Federal sources for the following
12-month period.

``Sec. 41783. State marketing assistance

The Secretary of Transportation may provide up to $50,000
in technical assistance to any State within which an eligible
essential air service community is located for the purpose of
assisting the State and such communities to develop methods
to increase boardings in such communities. At least 10
percent of the costs of the activity with which the
assistance is associated shall come from non-Federal sources,
including contributions in kind.

``Sec. 41784. Definitions

``In this subchapter:
``(1) Eligible place.--The term `eligible place' has the
meaning given that term in section 41731(a)(1).
``(2) Eligible essential air service community.--The term
`eligible essential air service community' means an eligible
place that--
``(A) submits an application to the Secretary in such form,
at such time, and containing such information as the
Secretary may require, including a detailed marketing plan,
or specifications for the development of such a plan, to
increase average boardings, or the level of passenger usage,
at its airport facilities; and
``(B) provides assurances, satisfactory to the Secretary,
that it is able to meet the non-Federal funding requirements
of section 41782(b)(1).
``(3) Passenger boardings.--The term `passenger boardings'
has the meaning given that term by section 47102(10).
``(4) Sponsor.--The term `sponsor' has the meaning given
that term in section 47102(19).

``Sec. 41785. Authorization of appropriations

``There are authorized to be appropriated to the Secretary
of Transportation $12,000,000 for each of fiscal years 2004
through 2007, not more than $200,000 per year of which may be
used for administrative costs.''.
(b) Conforming Amendment.--The chapter analysis for chapter
417 of such title is amended by inserting after the item
relating to section 41767 the following:

``SUBCHAPTER IV--MARKETING INCENTIVE PROGRAM

``41781. Purpose.
``41782. Marketing program.
``41783. State marketing assistance.
``41784. Definitions.
``41785. Authorization of appropriations.''.

SEC. 4. PILOT PROGRAMS.

(a) In General.--Subchapter II of chapter 417 of title 49,
United States Code, is amended by adding at the end the
following:

``Sec. 41745. Other pilot programs

``(a) In General.--If the entire amount authorized to be
appropriated to the Secretary of Transportation by section
41785 is appropriated for fiscal years 2004 through 2007, the
Secretary of Transportation shall establish pilot programs
that meet the requirements of this section for improving
service to communities receiving essential air service
assistance under this subchapter or consortia of such
communities.
``(b) Programs Authorized.--
``(1) Community flexibility.--The Secretary shall establish
a pilot program for not more than 10 communities or consortia
of communities under which the airport sponsor of an airport
serving the community or consortium may elect to forego any
essential air service assistance under preceding sections of
this subchapter for a 10-year period in exchange for a grant
from the Secretary equal in value to twice the annual
essential air service assistance received for the most
recently ended calendar year. Under the program, and
notwithstanding any provision of law to the contrary, the
Secretary shall make a grant to each participating sponsor
for use by the recipient for any project that--
``(A) is eligible for assistance under chapter 471;
``(B) is located on the airport property; or
``(C) will improve airport facilities in a way that would
make such facilities more usable for general aviation.
``(2) Equipment changes.--
``(A) In General.--The Secretary shall establish a pilot
program for not more than 10 communities or consortia of
communities under which, upon receiving a petition from the
sponsor of the airport serving the community or consortium,
the Secretary shall authorize and request the essential air
service provider for that community or consortium to use
smaller equipment to provide the service and to consider
increasing the frequency of service using such smaller
equipment. Before granting any such petition, the Secretary
shall determine that passenger safety would not be
compromised by the use of such smaller equipment.
``(B) Alternative services.--For any 3 aiport sponsors
participating in the program established under subparagraph
(A), the Secretary may establish a pilot program under
which--
``(i) the Secretary provides 100 percent Federal funding
for reasonable levels of alternative transportation services
from the eligible place to the nearest hub airport or small
hub airport;
``(ii) the Secretary will authorize the sponsor to use its
essential air service subsidy funds provided under preceding
sections of this subchapter for any airport-related project
that would improve airport facilities; and
``(iii) the sponsor may make an irrevocable election to
terminate its participation in the pilot program established
under this paragraph after 1 year.
``(3) Cost-sharing.--The Secretary shall establish a pilot
program under which the sponsors of airports serving a
community or consortium of communities share the cost of
providing air transportation service greater than the basic
essential air service provided under this subchapter.
``(4) EAS local participation program.--
``(A) In general.--The Secretary of Transportation shall
establish a pilot program under which designated essential
air service communities located in proximity to hub airports
are required to assume 10 percent of their essential air
service subsidy costs for a 3-year period.
``(B) Designation of communities.--
``(i) In general.--The Secretary may not designate any
community under this paragraph unless it is located within
100 miles by road of a hub airport and is not located in a
noncontiguous State. In making the designation, the Secretary
may take into consideration the total traveltime between a
community and the nearest hub airport, taking into account
terrain, traffic, weather, road conditions, and other
relevant factors.
``(ii) One community per state.--The Secretary may not
designate--

``(I) more than 1 community per State under this paragraph;
or
``(II) a community in a State in which another community
that is eligible to participate in the essential air service
program has elected not to participate in the essential air
service program.

``(C) Appeal of designation.--A community may appeal its
designation under this section. The Secretary may withdraw
the designation of a community under this paragraph based
on--
``(i) the airport sponsor's ability to pay; or

[[Page S5611]]

``(ii) the relative lack of financial resources in a
community, based on a comparison of the median income of the
community with other communities in the State.
``(D) Non-federal share.--
``(i) Non-federal amounts.--For purposes of this section,
the non-Federal portion of the essential air service subsidy
may be derived from contributions in kind, or through
reduction in the amount of the essential air service subsidy
through reduction of air carrier costs, increased ridership,
pre-purchase of tickets, or other means. The Secretary shall
provide assistance to designated communities in identifying
potential means of reducing the amount of the subsidy without
adversely affecting air transportation service to the
community.
``(ii) Application with other matching requirements.--This
section shall apply to the Federal share of essential air
service provided this subchapter, after the application of
any other non-Federal share matching requirements imposed by
law.
``(E) Eligibility for other programs not affected.--Nothing
in this paragraph affects the eligibility of a community or
consortium of communities, an airport sponsor, or any other
person to participate in any program authorized by this
subchapter. A community designated under this paragraph may
participate in any program (including pilot programs)
authorized by this subchapter for which it is otherwise
eligible--
``(i) without regard to any limitation on the number of
communities that may participate in that program; and
``(ii) without reducing the number of other communities
that may participate in that program.
``(F) Secretary to report to congress on impact.--The
Secretary shall transmit a report to the Senate Committee on
Commerce, Science, and Transportation and the House of
Representatives Committee on Transportation and
Infrastructure on--
``(i) the economic condition of communities designated
under this paragraph before their designation;
``(ii) the impact of designation under this paragraph on
such communities at the end of each of the 3 years following
their designation; and
``(iii) the impact of designation on air traffic patterns
affecting air transportation to and from communities
designated under this paragraph.
``(c) Code-sharing.--Under the pilot program established
under subsection (a), the Secretary is authorized to require
air carriers providing service to participating communities
and major air carriers (as defined in section 41716(a)(2))
serving large hub airports (as defined in section
41731(a)(3)) to participate in multiple code-share
arrangements consistent with normal industry practice
whenever and wherever the Secretary determines that such
multiple code-sharing arrangements would improve air
transportation services. The Secretary may not require air
carriers to participate in such arrangements under this
subsection for more than 10 such communities.
``(d) Track Service.--The Secretary shall require essential
air service providers to track changes in service, including
on-time arrivals and departures.
``(e) Administrative Provisions.--In order to participate
in a pilot program established under this section, the
airport sponsor for a community or consortium of communities
shall submit an application to the Secretary in such form, at
such time, and containing such information as the Secretary
may require.''.
(b) Conforming Amendment.--The chapter analysis for chapter
417 of such title is amended by inserting after the item
relating to section 41744 the following:

``41745. Other pilot programs''.

SEC. 5. EAS PROGRAM AUTHORITY CHANGES.

(a) Rate Renegotiation.--If the Secretary of Transportation
determines that essential air service providers are
experiencing significantly increased costs of providing
service under subchapter II of chapter 417 of title 49,
United States Code, the Secretary of Transportation may
increase the rates of compensation payable under that
subchapter within 30 days after the date of enactment of this
Act without regard to any agreements or requirements relating
to the renegotiation of contracts. For purposes of this
subsection, the term ``significantly increased costs'' means
an average monthly cost increase of 10 percent or more.
(b) Returned Funds.--Notwithstanding any provision of law
to the contrary, any funds made available under subchapter II
of chapter 417 of title 49, United States Code, that are
returned to the Secretary by an airport sponsor because of
decreased subsidy needs for essential air service under that
subchapter shall remain available to the Secretary and may be
used by the Secretary under that subchapter to increase the
frequency of flights at that airport.
(c) Small Community Air Service Development Pilot
Program.--Section 41743(h) of such title is amended by
striking ``an airport'' and inserting ``each airport''.
____

Mr. ROCKEFELLER. Mr. President, the continuing economic crisis facing
the U.S. airline industry also imperils the future of hundreds of small
and rural communities across our country as air carriers drastically
reduce service to small and rural communities. While small and rural
communities have long had to cope with limited and unreliable service,
these problems have been exacerbated by the weakened financial
condition of most major U.S. airlines.
Faced with declining revenues brought on by the Nation's economic
downturn, the events of September 11, 2001 and the war in Iraq most
carriers have substantially reduced or eliminated service to many
communities. In the last month, United Air Lines, US Airways and
Continental Airlines announced significant service cuts to West
Virginia.
Last month, this Congress provided $3.5 billion in direct and
indirect benefits to the Nation's airlines. I strongly supported this
package because our economy requires a strong and vibrant airline
industry. In my own aviation relief package, I had provided resources
to the airlines to continue to provide air service to small and rural
communities. Even in the best of times, these communities face a
difficult time maintaining and developing new air service options.
Today, their challenge is preventing the complete loss of air service.
In these difficult economic and uncertain times, I strongly believe
that the Federal Government must continue to assist our most vulnerable
communities stay connected to the Nation's aviation network--a network
paid for by all Americans.
The reduction or elimination of air service had a devastating effect
on the economy of a community. Having adequate air service is not just
a matter of convenience, but a matter of economic survival. Without
access to reliable air service, no business is willing to locate their
operations in these areas of the country no matter how attractive the
quality of life. Airports are economic engines that attract critical
new development opportunities and jobs.
West Virginia has been able to attract firms from around the world
because corporate executives know they can visit their operations with
ease. Rural and small town America must continue to be adequately
linked to the Nation's air transportation network if its people and
businesses are to compete economically with larger urban areas in this
country and around the world.
In the Aviation Investment and Reform Act for the 21st Century, we
began to address the need to improve air service in small and rural
communities. I, along with many of my colleagues, supported the
creation of the Small Community Air Service Development Pilot Program,
a competitive grant program to provide communities with the resources
they needed to attract new air service to their communities. The
program is an enormous success. Over 180 communities applied for 40
grants in the first year funds were available. The Department of
Transportation has announced the next round of funding.

In West Virginia, Charleston received money under the program and has
used it to successfully attract a new service connection to Houston, an
important gateway to the markets of Latin America. This program gave
local communities the ability and flexibility to meet local air
transportation needs.
The Aviation Investment and Revitalization Vision Act, cosponsored by
myself and Senator Lott, reauthorizes the expands the successful Small
Community Air Service Development Program. The bill authorizes the
participation of 120 communities over 3 years.
Many of our most isolated and vulnerable communities whose only
service is through the Essential Air Service Program have indicated
that they would like to develop innovative and flexible programs that
communities who received Small Community Air Service Development grants
to improve the quality of their air service.
It is for this reason that I, along with Senator Lott, have
introduced the Small Community and Rural Air Service Revitalization Act
of 2003. The legislation reauthorizes the Department of
Transportation's Essential Air Service, EAS, program and creates a
series of pilot programs for EAS communities to participate to
stimulate passenger demand for air service in their communities.
Under the bill, communities are given the option on continuing their
EAS as is or they may apply to participate in new incentive programs to
help them develop new and innovative solutions to increasing local
demand for air

[[Page S5612]]

service. The EAS Marketing and Community Flexibility Programs would
provide communities new resources and tools to implement locally
developed plans to improve their air service. By providing communities
the ability to design their own air service proposals, a community has
the ability to develop a plan that meets it locally determined needs,
improves air service choices, and gives the community a greater stake
in the EAS program.
Specifically, these new EAS pilot programs include authorization for
the use of smaller planes to decrease cost or increase frequency,
communities to cost-share for service above base EAS subsidy level,
alternative service at up to 3 EAS points if a community applies, an
opt out of the EAS program with a one-time infusion of funding to
assist in transition out of the program, and DOT to mandate multiple
code-sharing arrangements for EAS providers.
A pilot program added at the request of Senator Lott would allow DOT
to require a cost-share for up to 10 communities within 100 miles of a
hub. I have significant reservations about forcing communities to pay
for a service the Federal Government promised them.
In addition, the communities that participate in EAS are small and
isolated and have lower than average per captia incomes than urban or
suburban communities. Cash-strapped communities will have to provide
anywhere between $50,000 and $120,000 in local funds to continue their
EAS service. I worked with Senator Lott to make sure DOT considers a
variety of relevant factors when selecting communities, to provide
communities appeal rights, and to make sure they have access to all
other pro-active pilot programs. I will monitor DOT's implementation of
this pilot program closely.
Small and rural communities are the first to bear the brunt of bad
economic times and the last to see the benefits of good times. The
general economic downturn and the dire straits of the aviation industry
have placed exceptional burdens on air service to our most isolated
communities. The Federal Government must provide additional resources
and tools for small communities to help themselves attract adequate air
service. The Federal Government must make sure that our most vulnerable
towns and cities are linked to the rest of the Nation. My legislation
builds on existing programs and strengthens them. If these bills are
enacted, our constituents will have the tools and resources necessary
to attract air service, related economic development, and most
importantly expand their connections to the national and global
economy.

____________________