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109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     109-456

======================================================================



 
                          H-PRIZE ACT OF 2006

                                _______
                                

  May 9, 2006.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Boehlert, from the Committee on Science, submitted the following

                              R E P O R T

                        [To accompany H.R. 5143]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Science, to whom was referred the bill (H.R. 
5143) to authorize the Secretary of Energy to establish 
monetary prizes for achievements in overcoming scientific and 
technical barriers associated with hydrogen energy, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
   I. Amendment.......................................................2
  II. Purpose of the Bill.............................................4
 III. Background and Need for the Legislation.........................4
  IV. Summary of Hearings.............................................6
   V. Committee Actions...............................................8
  VI. Summary of Major Provisions of the Bill, as Reported............8
 VII. Section-by-Section Analysis (by Title and Section) of the Bill, 
      as Reported.....................................................9
VIII. Committee Views................................................11
  IX. Cost Estimate..................................................14
   X. Congressional Budget Office Cost Estimate......................15
  XI. Compliance With Public Law 104-4 (Unfunded Mandates)...........16
 XII. Committee Oversight Findings and Recommendations...............16
XIII. Statement on General Performance Goals and Objectives..........16
 XIV. Constitutional Authority Statement.............................16
  XV. Federal Advisory Committee Statement...........................16
 XVI. Congressional Accountability Act...............................16
XVII. Statement on Preemption of State, Local, or Tribal Law.........16
XVIII.Changes in Existing Law Made by the Bill, As Reported..........17

 XIX. Committee Recommendations......................................17
  XX. Proceedings of Full Committee Markup...........................19

                              I. Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION. 1. SHORT TITLE.

  This Act may be cited as the ``H-Prize Act of 2006''.

SEC. 2. DEFINITIONS.

  In this Act:
          (1) Administering entity.--The term ``administering entity'' 
        means the entity with which the Secretary enters into an 
        agreement under section 3(c).
          (2) Department.--The term ``Department'' means the Department 
        of Energy.
          (3) Secretary.--The term ``Secretary'' means the Secretary of 
        Energy.

SEC. 3. PRIZE AUTHORITY.

  (a) In General.--The Secretary shall carry out a program to 
competitively award cash prizes only in conformity with this Act to 
advance the research, development, demonstration, and commercial 
application of hydrogen energy technologies.
  (b) Advertising and Solicitation of Competitors.--
          (1) Advertising.--The Secretary shall widely advertise prize 
        competitions to encourage broad participation, including by 
        individuals, universities (including historically Black 
        colleges and universities and other minority serving 
        institutions), and large and small businesses (including 
        businesses owned or controlled by socially and economically 
        disadvantaged persons).
          (2) Announcement through federal register notice.--The 
        Secretary shall announce each prize competition by publishing a 
        notice in the Federal Register. This notice shall include the 
        subject of the competition, the duration of the competition, 
        the eligibility requirements for participation in the 
        competition, the process for participants to register for the 
        competition, the amount of the prize, and the criteria for 
        awarding the prize.
  (c) Administering the Competitions.--The Secretary shall enter into 
an agreement with a private, nonprofit entity to administer the prize 
competitions, subject to the provisions of this Act. The duties of the 
administering entity under the agreement shall include--
          (1) advertising prize competitions and their results;
          (2) raising funds from private entities and individuals to 
        pay for administrative costs and to contribute to cash prizes;
          (3) working with the Secretary to develop the criteria for 
        selecting winners in prize competitions, based on goals 
        provided by the Secretary;
          (4) determining, in consultation with the Secretary, the 
        appropriate amount for each prize to be awarded under section 
        4(b)(3); and
          (5) selecting judges in accordance with section 4(d), using 
        criteria developed in consultation with the Secretary.
  (d) Funding Sources.--Prizes under this Act may consist of Federal 
appropriated funds and funds provided by the administering entity 
(including funds raised pursuant to subsection (c)(2)) for such cash 
prizes. The Secretary may accept funds from other Federal agencies for 
such cash prizes. The Secretary may not give any special consideration 
to any private sector entity or individual in return for a donation to 
the administering entity.
  (e) Announcement of Prizes.--The Secretary may not issue a notice 
required by subsection (b)(2) until all the funds needed to pay out the 
announced amount of the prize have been appropriated or committed in 
writing by the administering entity. The Secretary may increase the 
amount of a prize after an initial announcement is made under 
subsection (b)(2) if--
          (1) notice of the increase is provided in the same manner as 
        the initial notice of the prize; and
          (2) the funds needed to pay out the announced amount of the 
        increase have been appropriated or committed in writing by the 
        administering entity.
  (f) Sunset.--The authority to announce prize competitions under this 
Act shall terminate on September 30, 2017.

SEC. 4. PRIZE CATEGORIES.

  (a) Categories.--The Secretary shall establish prizes for--
          (1) advancements in components or systems related to--
                  (A) hydrogen production;
                  (B) hydrogen storage;
                  (C) hydrogen distribution; and
                  (D) hydrogen utilization;
          (2) prototypes of hydrogen-powered vehicles or other 
        hydrogen-based products that best meet or exceed objective 
        performance criteria, such as completion of a race over a 
        certain distance or terrain or generation of energy at certain 
        levels of efficiency; and
          (3) transformational changes in technologies for the 
        distribution or production of hydrogen that meet or exceed far-
        reaching objective criteria, which shall include minimal carbon 
        emissions and which may include cost criteria designed to 
        facilitate the eventual market success of a winning technology.
  (b) Awards.--
          (1) Advancements.--To the extent permitted under section 
        3(e), the prizes authorized under subsection (a)(1) shall be 
        awarded biennially to the most significant advance made in each 
        of the four subcategories described in subparagraphs (A) 
        through (D) of subsection (a)(1) since the submission deadline 
        of the previous prize competition in the same category under 
        subsection (a)(1) or the date of enactment of this Act, 
        whichever is later. No one such prize may exceed $1,000,000. If 
        less than $4,000,000 is available for a prize competition under 
        subsection (a)(1), the Secretary may omit one or more 
        subcategories, reduce the amount of the prizes, or not hold a 
        prize competition.
          (2) Prototypes.--To the extent permitted under section 3(e), 
        prizes authorized under subsection (a)(2) shall be awarded 
        biennially in alternate years from the prizes authorized under 
        subsection (a)(1). The Secretary is authorized to award up to 
        one prize in this category in each 2-year period. No such prize 
        may exceed $4,000,000. If no registered participants meet the 
        objective performance criteria established pursuant to 
        subsection (c) for a competition under this paragraph, the 
        Secretary shall not award a prize.
          (3) Transformational technologies.--To the extent permitted 
        under section 3(e), the Secretary shall announce at least one 
        prize competition authorized under subsection (a)(3) as soon 
        after the date of enactment of this Act as is practicable. To 
        the extent permitted under section 3(e), the Secretary may 
        announce additional prize competitions authorized under 
        subsection (a)(3) as appropriate to accelerate the development 
        and adoption of hydrogen technologies. A prize offered under 
        this paragraph shall be not less than $10,000,000, paid to the 
        winner in a lump sum, and an additional amount paid to the 
        winner as a match for each dollar of private funding raised by 
        the winner for the hydrogen technology beginning on the date 
        the winner was named. The match shall be provided for 3 years 
        after the date the prize winner is named or until the full 
        amount of the prize has been paid out, whichever occurs first. 
        A prize winner may elect to have the match amount paid to 
        another entity that is continuing the development of the 
        winning technology. The Secretary shall announce the rules for 
        receiving the match in the notice required by section 3(b)(2). 
        The Secretary shall award a prize under this paragraph only 
        when a registered participant has met the objective criteria 
        established for the prize pursuant to subsection (c) and 
        announced pursuant to section 3(b)(2). Not more than 
        $10,000,000 in Federal funds may be used for each prize award 
        under this paragraph. The administering entity shall seek to 
        raise $40,000,000 toward each matching award under this 
        paragraph.
  (c) Criteria.--In establishing the criteria required by this Act, the 
Secretary shall consult with--
          (1) the Department's Hydrogen Technical and Fuel Cell 
        Advisory Committee;
          (2) other Federal agencies, including the National Science 
        Foundation; and
          (3) private organizations, including professional societies, 
        industry associations, and the National Academy of Sciences and 
        the National Academy of Engineering.
  (d) Judges.--For each prize competition, the Secretary shall assemble 
a panel of qualified judges to select the winner or winners on the 
basis of the criteria established under subsection (c). Judges for each 
prize competition shall include individuals from outside the 
Department, including from the private sector. A judge may not--
          (1) have personal or financial interests in, or be an 
        employee, officer, director, or agent of, any entity that is a 
        registered participant in the prize competition for which he or 
        she will serve as a judge; or
          (2) have a familial or financial relationship with an 
        individual who is a registered participant in the prize 
        competition for which he or she will serve as a judge.

SEC. 5. ELIGIBILITY.

  To be eligible to win a prize under this Act, an individual or 
entity--
          (1) shall have complied with all the requirements in 
        accordance with the Federal Register notice required under 
        section 3(b)(2);
          (2) in the case of a private entity, shall be incorporated in 
        and maintain a primary place of business in the United States, 
        and in the case of an individual, whether participating singly 
        or in a group, shall be a citizen of, or an alien lawfully 
        admitted for permanent residence in, the United States; and
          (3) shall not be a Federal entity, a Federal employee acting 
        within the scope of his employment, or an employee of a 
        national laboratory acting within the scope of his employment.

SEC. 6. INTELLECTUAL PROPERTY.

  The Federal Government shall not, by virtue of offering or awarding a 
prize under this Act, be entitled to any intellectual property rights 
derived as a consequence of, or direct relation to, the participation 
by a registered participant in a competition authorized by this Act. 
This section shall not be construed to prevent the Federal Government 
from negotiating a license for the use of intellectual property 
developed for a prize competition under this Act.

SEC. 7. LIABILITY.

  (a) Waiver of Liability.--Registered participants shall be required 
to agree to assume any and all risks, and waive claims against the 
Federal Government and its related entities, except in the case of 
willful misconduct, for any injury, death, damage, or loss of property, 
revenue, or profits, whether direct, indirect, or consequential, 
arising from their participation in a competition under this Act, 
whether such injury, death, damage, or loss arises through negligence 
or otherwise. For the purposes of this subsection, the term ``related 
entity'' means a contractor or subcontractor at any tier, and a 
supplier, user, customer, cooperating party, grantee, investigator, or 
detailee.
  (b) Liability Insurance.--
          (1) Requirements.--Registered participants shall be required 
        to obtain liability insurance or demonstrate financial 
        responsibility, in amounts determined by the Secretary, for 
        claims by--
                  (A) a third party for death, bodily injury, or 
                property damage or loss resulting from an activity 
                carried out in connection with participation in a 
                competition under this Act; and
                  (B) the Federal Government for damage or loss to 
                Government property resulting from such an activity.
          (2) Federal government insured.--The Federal Government shall 
        be named as an additional insured under a registered 
        participant's insurance policy required under paragraph (1)(A), 
        and registered participants shall be required to agree to 
        indemnify the Federal Government against third party claims for 
        damages arising from or related to competition activities.

SEC. 8. AUTHORIZATION OF APPROPRIATIONS.

  (a) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for carrying out this Act $11,000,000 for 
each of the fiscal years 2007 through 2016, of which no more than 
$2,000,000 for any fiscal year may be used for administrative expenses.
  (b) Carryover of Funds.--Funds appropriated for prize awards under 
this Act shall remain available until expended, and may be transferred, 
reprogrammed, or expended for other purposes only after the expiration 
of 10 fiscal years after the fiscal year for which the funds were 
originally appropriated. No provision in this Act permits obligation or 
payment of funds in violation of section 1341 of title 31 of the United 
States Code (commonly referred to as the Anti-Deficiency Act).

SEC. 9. NONSUBSTITUTION.

  The programs created under this Act shall not be considered a 
substitute for Federal research and development programs.

                        II. Purpose of the Bill

    The purpose of the bill is to authorize the Secretary of 
Energy to establish monetary prizes for achievements in 
overcoming scientific and technical barriers associated with 
hydrogen energy.

              III. Background and Need for the Legislation

    Hydrogen gas is considered by many experts to be a 
promising fuel, particularly in the transportation sector. When 
used as a fuel, its only combustion byproduct is water vapor. 
The widespread adoption of hydrogen as a transportation fuel 
has the potential to reduce or eliminate air pollution 
generated by cars and trucks.
    However, unlike coal or oil, the hydrogen gas used as a 
fuel is not a naturally occurring energy resource. Hydrogen 
must be produced from hydrogen-bearing compounds, like water or 
natural gas, and that requires energy--and, unlike gasoline or 
biofuels, more energy is always required to produce it than is 
recovered when hydrogen is burned in a fuel cell. Hydrogen has 
the potential to reduce America's dependence on foreign oil, 
but the degree to which hydrogen will displace foreign energy 
supplies depends on what energy source is used to generate 
hydrogen gas in the first place.
    If hydrogen can be produced economically from energy 
sources that do not release carbon dioxide into the 
atmosphere--from renewable sources such as wind power or solar 
power, from nuclear power, or possibly from coal with carbon 
sequestration, then the widespread use of hydrogen as a fuel 
could make a major contribution to reducing the emission of 
greenhouse gases.
    While the promise of hydrogen is great, so are the 
technical challenges. Experts suggest that major advances will 
be required across a wide range of technologies for hydrogen to 
be affordable, safe, cleanly produced, and readily distributed. 
The production, storage, and use of hydrogen all present 
significant technical challenges. While Department of Energy 
(DOE) research programs have produced promising advances, much 
work must still be done to meet the goal of developing 
economically viable hydrogen technologies. Indeed, the American 
Physical Society in a 2004 report \1\ stated that ``no material 
exists today that can be used to construct a hydrogen fuel tank 
that can meet the consumer benchmarks'' for affordably storing 
enough fuel on-board a car or truck to meet consumer 
expectations of time between refueling stops.
---------------------------------------------------------------------------
    \1\ The Hydrogen Initiative, APS Panel on Public Affairs, 
Washington, DC: The American Physical Society (March 2004).
---------------------------------------------------------------------------
    Prizes are one tool the Federal government can employ to 
stimulate efforts to overcome such technical hurdles.
    A 1999 National Academy of Engineering (NAE) panel 
examining the use of prizes by federal agencies \2\ suggested 
the following design principles for prize programs:
---------------------------------------------------------------------------
    \2\ Concerning Federally Sponsored Inducement Prizes in Engineering 
and Science, Steering Committee for the Workshop to Assess the 
Potential for Promoting Technological Advance Through Government-
Sponsored Inducement Prizes in Engineering and Science, Washington, DC: 
National Academy of Engineering (1999).
---------------------------------------------------------------------------
          1. Treatment of intellectual property resulting from 
        prize contests should be properly aligned with the 
        objectives and incentive structure of the prize 
        contest.
          2. Contest rules should be seen as transparent, 
        simple, fair, and unbiased.
          3. Prizes should be commensurate with the effort 
        required and goals sought.
    The Act establishes three types of prizes that are in 
keeping with the principles laid out by the NAE:
          1. Biennial prizes for advancements in each of 
        hydrogen storage, hydrogen production, hydrogen use and 
        hydrogen distribution;
          2. A goal-oriented, biennial contest for prototypes 
        that meet objective contest criteria established in 
        advance; and
          3. A prize of at least $10 million for a goal-
        oriented contest for the best invention that leads to 
        transformational changes in the distribution or 
        production of hydrogen. Winners of this prize could 
        also receive matching funds for every dollar of private 
        funding raised by the winner for commercialization of 
        their winning technology.

                        IV. Summary of Hearings

    On February 7, 2002, the House Committee on Science held a 
hearing titled The Future of DOE's Automotive Research 
Programs. The hearing addressed the Administration's newly 
announced FreedomCAR program, and examined how it compared with 
the Partnership for a New Generation of Vehicles (PNGV) 
program. The Committee heard testimony from the Hon. David K. 
Garman, Assistant Secretary for Energy Efficiency and Renewable 
Energy, DOE; Dr. Vernon P. Roan, Vice Chair, National Research 
Council Panel on the Partnership for a New Generation of 
Vehicles and Professor and Director, Fuel Cell Laboratory, 
Mechanical Engineering Department, University of Florida at 
Gainesville; Dr. Daniel Sperling, Director, Institute of 
Transportation Studies and Professor of Civil & Environmental 
Engineering, University of California at Davis; and Mr. Ross 
Witschonke, Vice President of Electrics and Power Electronics, 
Ballard Power.
    On June 24, 2002, the Energy Subcommittee of the House 
Committee on Science held a hearing titled Fuel Cells: The Key 
to Energy Independence? The hearing focused on developments in 
hydrogen fuel cell R&D; and in the fuel cell business, and 
provided a broad overview of fuel cells for all applications, 
not just transportation. The Subcommittee heard testimony from 
Dr. Hermann Grunder, Director, Argonne National Laboratory; Mr. 
Robert Culver, Executive Director, United States Council for 
Automotive Research; Mr. Stan Borys, Executive Vice President 
and Chief Operating Officer, Gas Technology Institute; Mr. Jeff 
Serfass, President, National Hydrogen Association; Mr. James 
Uihlein, Fuels Project Manager, BP; and Mr. Elias (Lee) Camara, 
Vice President, H2Fuels.
    On June 26, 2002, the Energy Subcommittee of the House 
Committee on Science held a hearing titled FreedomCAR: Getting 
New Technology into the Marketplace, which primarily solicited 
views on the best ways to proceed with automotive research and 
development (R&D;) and how to integrate advanced technologies 
into production vehicles that can gain customer acceptance. One 
of the recurring questions was the ``chicken and egg'' problem 
with hydrogen fuel cells, i.e., how can you establish an 
effective hydrogen infrastructure before there are great 
numbers of fuel cell vehicles? The Subcommittee heard testimony 
from Mr. Amory B. Lovins, Chief Executive Officer, Rocky 
Mountain Institute; Dr. Byron McCormick, Executive Director, 
Fuel Cell Activities, General Motors Corporation; Mr. Doug 
Rothwell, President and Chief Executive Officer, the Michigan 
Economic Development Corporation; Mr. Roger Saillant, 
President, Plug Power, Inc.; Mr. Robert Templin, Member of the 
Board of Directors, PAICE Corporation.
    On March 5, 2003, the House Committee on Science held a 
hearing titled The Path to a Hydrogen Economy on the 
President's Hydrogen Initiative, which is intended to enable 
the transition to an economy powered by hydrogen. Witnesses 
testified that, if the widespread use of hydrogen is to become 
a reality, significant advances must be made, not only in 
vehicle technology, but also in hydrogen production and the 
infrastructure necessary to deliver it. The hearing focused on 
the barriers to a hydrogen economy, and how the President's 
initiative might address those barriers. The Committee heard 
testimony from the Hon. David K. Garman, Assistant Secretary 
for Energy Efficiency and Renewable Energy, DOE; Dr. Alan C. 
Lloyd, 2003 Chairman, California Fuel Cell Partnership; Dr. 
Joan Ogden, Research Scientist, Princeton Environmental 
Institute; Dr. Larry Burns, Vice President, Research, 
Development and Planning, General Motors Corporation; and Mr. 
Don Huberts, Chief Executive Officer, Shell Hydrogen.
    On March 3, 2004, the House Committee on Science held a 
hearing titled Reviewing the Hydrogen Fuels and FreedomCar 
Initiatives. Specifically, the hearing focused on two recent 
reports from the National Academy of Sciences (NAS) and the 
American Physical Society (APS) on DOE's hydrogen initiatives, 
and the Administration's response to the reports' 
recommendations for changes to the Administration's programs. 
The Committee heard testimony from the Hon. David K. Garman, 
Assistant Secretary for Energy Efficiency and Renewable Energy, 
DOE; Dr. Michael Ramage, Chair of the NAS Committee on 
Alternatives and Strategies for Future Hydrogen Production and 
Use; and Dr. Peter Eisenberger, Chair of the APS Panel on 
Public Affairs Energy Subcommittee.
    On July 20, 2005, the Energy and Research Subcommittees of 
the House Committee on Science held a joint hearing titled 
Funding the Future: On the Road to a Hydrogen Economy to 
examine the progress that had been made in hydrogen research 
since the launch of the President's Hydrogen Initiative and the 
next steps the Federal government should take to best advance a 
hydrogen economy. The Subcommittees heard testimony from Mr. 
Douglas Faulkner, Acting Assistant Secretary for Energy 
Efficiency and Renewable Energy, DOE; Dr. David Bodde, Director 
of Innovation and Public Policy, Clemson University 
International Center for Automotive Research; Mr. Mark 
Chernoby, Vice President for Advanced Vehicle Engineering, 
DaimlerChrysler Corporation; Dr. George Crabtree, Director, 
Materials Science Division, Argonne National Laboratory; and 
Dr. John Heywood, Director, Sloan Automotive Laboratory, 
Massachusetts Institute of Technology.
    On April 27, 2006, the House Committee on Science held a 
hearing titled H.R. 5143, the H-Prize Act of 2006. The 
Committee heard testimony from Mr. Phillip Baxley, President, 
Shell Hydrogen; Dr. David Bodde, Director of Innovation and 
Public Policy, Clemson University International Center for 
Automotive Research; Dr. Peter Diamandis, Chairman, X Prize 
Foundation, a non-profit organization dedicated to fostering 
innovation through the use of competitions; and Dr. David L. 
Greene, Corporate Fellow, Oak Ridge National Laboratory. All 
four witnesses expressed support for the creation of a hydrogen 
prize. Dr. Diamandis emphasized the ability of prizes to 
attract many times the value of the purse in private investment 
by generating excitement and publicity. He noted that it is 
important to formulate the goals and the size of each prize 
carefully, and that a prize needs to be properly sized to both 
attract attention and to efficiently employ the resources 
available. Dr. Bodde testified that the H-Prize program should 
operate with several principles in mind: the prizes must be 
offered reliably and for a period long enough to bring in new 
participants; funds must supplement rather than compete with 
the core hydrogen research funding; and administration of the 
prize program must carefully document its experience, learn 
from that experience, and adapt accordingly. Dr. Greene 
testified that creating the H-Prize cannot substitute for 
adequately funding research, development and demonstration. Mr. 
Baxley testified that prizes could bring additional 
participants into efforts to use hydrogen more widely and that 
finding the most efficient and marketable way to develop a 
prize is something the government is in the position to 
promote. Both Dr. Diamandis and Dr. Greene suggested that 
amendments to the bill could help clarify the division of 
duties between the Secretary and the private entity that would 
administer the prize. Several witnesses, in response to 
questions, also indicated that the prize program could be 
successful with a prize of less than $100 million.

                          V. Committee Actions

    On April 6, 2006, Research Subcommittee Chairman Bob 
Inglis, Rep. Daniel Lipinski, Science Committee Chairman 
Sherwood Boehlert, Environment, Technology and Standards 
Subcommittee Chairman Vernon Ehlers, Rep. Roscoe Bartlett, Rep. 
Michael McCaul and nine other co-sponsors introduced H.R. 5143, 
The H-Prize Act of 2006.
    The Full Committee on Science met on Thursday, May 3, 2006, 
to consider the bill. An amendment in the nature of a 
substitute was offered by Chairman Inglis. The amendment 
reduced the size of the largest prize, capped at $10,000,000 
the federal contribution to that prize and set a private 
fundraising goal of $40,000,000 for that prize; and delineated 
some of the duties of the administering entity. The amendment 
was agreed to by a voice vote.
    The motion to adopt the bill, as amended, was agreed to by 
a voice vote. Mr. Lipinski moved that the Full Committee 
favorably report the bill, H.R. 5143, as amended, to the House 
with the recommendation that the bill, as amended, do pass, and 
that the staff be instructed to prepare the legislative report 
and make necessary technical and conforming changes, and that 
the Chairman take all necessary steps to bring the bill before 
the House for consideration. The motion was agreed to by a 
voice vote.

        VI. Summary of Major Provisions of the Bill, as Reported

     Creates a prize program at DOE for advances in 
hydrogen technologies to be administered through a private, 
non-profit entity (``the administering entity''). DOE is to 
award three types of prizes (described below).
     Establishes prizes of not more than $1 million to 
be awarded every other year to the best technology advancements 
in components or systems related to each of hydrogen 
production, hydrogen storage, hydrogen distribution, and 
hydrogen utilization.
     Establishes a prize of not more than $4 million to 
be awarded for prototypes of hydrogen-powered vehicles or 
hydrogen-based products that best meet or exceed objective 
performance criteria. Awards for the prototype prize are to be 
given in alternate years from the technology advancement 
prizes.
     Establishes a prize of at least $10 million to be 
awarded for transformational changes in technologies for the 
production and distribution of hydrogen that meet or exceed 
far-reaching objective criteria. Limits the federal 
contribution to $10,000,000, and sets a private fundraising 
goal of $40,000,000. Prize money over $10,000,000 may be 
provided as matching funds for every dollar of private funding 
raised by the winner for the continued development and 
commercialization of their winning technology.
     Enumerates duties of the ``administering entity.'' 
These include broad advertising of the prizes and their 
results, fundraising for administrative costs and cash prizes, 
working with the Secretary to develop prize criteria based on 
goals provided by the Secretary; working with the Secretary to 
determine the appropriate prize amounts to be awarded under the 
transformational changes prize category; and selecting judges 
using criteria developed in consultation with the Secretary.
     Authorizes $11,000,000 for each of fiscal years 
2007 through 2016, of which not more than $2,000,000 each year 
may be spent on administrative costs.
     Sunsets the ability to announce new prize contests 
in 2017.

VII. Section-by-Section Analysis (by Title and Section) of the Bill, as 
                                Reported


Section 1. Short title

    The H-Prize Act of 2006.

Sec. 2. Definitions

    Defines ``Administering Entity'', ``Department'' and 
``Secretary''.

Sec. 3. Prize authority

    Requires the Secretary of Energy to create a prize to 
advance the research, development, demonstration and commercial 
application of hydrogen energy technologies.
    Requires the Secretary to advertise the prize competitions 
widely to encourage broad participation, including outreach to 
historically Black colleges and universities, other minority 
serving institutions, as well as large and small businesses, 
including minority and disadvantaged businesses. Includes a 
specific direction to announce the prize competitions through 
publication of a Federal Register notice.
    Requires the Secretary to enter into an agreement with a 
private, non-profit entity to administer the prize 
competitions. Enumerates the duties of the administering entity 
to include advertising the prizes and their results, 
fundraising for administrative costs and cash prizes, working 
with the Secretary to develop prize criteria based upon goals 
provided by the Secretary, working with the Secretary to 
determine the appropriate amounts for prizes awarded under the 
transformational changes prize category described in section 4, 
and selecting judges using criteria developed in consultation 
with the Secretary.
    Authorizes the Secretary to use appropriated funds and 
private funds raised by the administering entity to fund the 
prize program. Prohibits the announcement of any prize 
competition until sufficient funds are available. Sunsets the 
authority to announce prize competitions in 2017.

Sec. 4. Prize categories

    Defines prize categories for:
    (i) Components or Systems Advancements. Establishes up to 
four prizes of not more than $1 million awarded every other 
year to the best technology advancements in components or 
systems related to hydrogen production, hydrogen storage, 
hydrogen distribution, and hydrogen utilization. Provides the 
Secretary the discretion to reduce the amount or number of 
prizes based upon the availability of funds.
    (ii) Prototypes. Establishes a prize of not more than $4 
million for prototypes of hydrogen-powered vehicles or 
hydrogen-based products that best meet or exceed objective 
performance criteria. Awards prototype prizes in years that 
alternate with the technology advancement prizes. Prohibits the 
Secretary from awarding the prize if no entrant meets the 
objectively defined performance criteria.
    (iii) Transformational Changes. Establishes a minimum 
$10,000,000 lump sum prize award for transformational changes 
in technologies for the production and distribution of hydrogen 
that meet or exceed far-reaching objective criteria. Limits the 
federal contribution to $10,000,000, and sets a private 
fundraising goal of $40,000,000. Prize money over $10,000,000 
may be provided as matching funds for every dollar of private 
funding raised by the winner for the continued development and 
commercialization of their winning technology.
    Requires the Secretary to establish contest criteria 
through consultation with the Hydrogen Technical Advisory 
Committee, other federal agencies including the National 
Science Foundation, and private organizations including the 
National Academy of Sciences.
    Requires the Secretary to appoint contest judges from 
outside DOE, including from the private sector. Prevents 
individuals who have a personal or financial relationship with 
any contest participant from serving as judges.

Sec. 5. Eligibility

    Requires participants to register through the process 
published in the Federal Register. To be eligible, private 
entities must be incorporated in and maintain a primary place 
of business in the U.S. and individuals must be a U.S. citizen 
or an alien lawfully admitted for permanent residence in the 
U.S. Excludes from participation any Federal entities or 
Federal or national laboratory employees acting within the 
scope of their employment.

Sec. 6. Intellectual property

    Prevents the Federal Government from receiving intellectual 
property rights through the operation of the prize contests.

Sec. 7. Liability

    Requires registered participants to waive certain claims 
against the Federal Government and related entities resulting 
from participation in prize competition activities. Requires 
registered participants to have liability insurance against 
damages resulting from participation in any prize competition 
activity and to name the Federal Government as an additional 
insured entity.

Sec. 8. Authorization of appropriations

    Authorizes $11 million for each of fiscal years 2007 
through 2016, and prevents funds from being used for any other 
purpose for at least 10 fiscal years after the fiscal year in 
which they were appropriated. Limits the use of appropriated 
funds for administrative expenses to no more than $2 million in 
any fiscal year.

Sec. 9. Nonsubstitution

    Expresses the sense of Congress that the prize competitions 
shall not act as a substitute for any research and development 
programs.

                         VIII. Committee Views


Appropriateness of prizes

    The Committee believes that prizes can be a useful tool to 
help stimulate technological advancement. The language of this 
Act is based on the prize program created in the NASA 
Authorization Act of 2005 (P.L. 109-155).
    Prizes can help accelerate the pace of technological 
advancement. For example, in 2004 and 2005, the Defense 
Advanced Research Projects Agency (DARPA) ran a prize 
competition in which teams designed and built an autonomous 
ground vehicle that had to navigate a 131-mile course through 
the Mojave Desert. In 2005, three of 23 entrants finished the 
course. Just one year prior, none of 15 entrants completed that 
year's course.
    Prizes can also draw more private funds into solving key 
technological challenges. For example, the $10 million Ansari X 
Prize was awarded in 2004 after SpaceShipOne, a privately built 
three-person craft, made a required second flight 62 miles (100 
km) above the surface of the Earth within a two-week period. 
The X Prize Foundation reports that the 26 teams from around 
the world that entered the competition collectively spent more 
than $100 million to win the $10 million prize.
    Prizes can also help bring public attention to new 
technologies. The best example of this is probably the Orteig 
Prize, which was awarded to Charles Lindbergh in 1927 for the 
first non-stop trans-Atlantic airplane flight. Mobbed by crowds 
when he landed outside Paris, Lindbergh's flight changed the 
way the public thought about aviation. According to a witness 
at the Committee's April 27, 2006 hearing, the number of 
passengers increased 30-fold, the number of planes quadrupled, 
and the number of pilots tripled in the United States within 18 
months of Lindbergh's historic flight.
    Prize competitions can also help experts evaluate the state 
of technology development, enabling funding to be devoted to 
the most pressing questions. For example, the DARPA Grand 
Challenge Race, mentioned above, pointed out where the greatest 
weaknesses were in the design of autonomous vehicles.
    Prize competitions also allow for many different technical 
solutions to be tried out as the prizes are awarded for 
achieving a specific goal, not for developing a particular, 
preordained technology. Prize competitions may also draw 
interest from a wide variety of participants, including those 
who were initially working in other fields and those who do not 
have the desire or the means to participate in grant programs.

Design of prizes in H.R. 5143

    The Act requires that the Secretary and the administering 
entity work together, in consultation with outside groups 
(including those named in section 4(c)), to develop the 
criteria for the prizes. The criteria are to be based on 
technical goals set by the Secretary to advance the development 
of hydrogen technologies. In setting those goals, the Committee 
expects the Secretary to take into account progress being made 
under DOE's research and development grant programs. Goals 
could be set, for example, to leap ahead of progress in the 
grant programs, to integrate advances achieved through the 
grant programs, or to determine what problems the grant 
programs should focus on. The Committee also expects the goals 
to include minimizing overall carbon emissions from hydrogen 
production, hydrogen storage, hydrogen distribution, or 
hydrogen utilization.
    The prizes created by section 4(a)(1) are designed to 
ensure steady progress and ongoing interest in hydrogen 
technologies. The advancement prizes in this Act are best-entry 
contests that should recognize substantive performance 
improvements. The Secretary and the administering entity are to 
set criteria that are as objective as possible to determine the 
winners and should not award a prize in a contest if no 
registered participant in a category has significantly advanced 
the state of technology. Advancement prizes should do more than 
reward the barely better, the slightly faster, or the 
marginally cheaper.
    Appropriately designed, the Committee believes that these 
advancement prizes have the potential to attract developers and 
manufacturers of hydrogen components or systems who may not 
otherwise see their products as applicable to the 
transportation sector. Best-entry contests of this type also 
have the potential to provide useful information to the ongoing 
DOE research program about the depth, breadth and technical 
strength of technologists beyond those who would normally 
participate in DOE research programs.
    The Committee intends the advancement prizes for hydrogen 
utilization to include not only energy conversion technologies, 
such as fuel cells, but also ``enabling technologies.'' These 
``enabling technologies'' include, but are not limited to, 
power train systems, control system technologies, and batteries 
or technologies that allow integration of hydrogen-fueled 
components into plug-in hybrid electric vehicles.
    The prizes created in section 4(a)(2) are designed to 
promote the integration of hydrogen technologies in prototypes. 
The Act requires that the prizes be awarded to prototypes that 
meet an objective contest goal established in advance, such as 
a race for a hydrogen-powered vehicle to go the farthest, go 
the fastest or operate in the coldest environment. The DARPA 
contest for autonomous vehicles is one model for this prize. 
Aside from the excitement of a race, a particular strength of 
prototype contests is their ability to reveal unexpected 
sources of failure when independently developed components are 
forced to operate together, facing unexpected conditions in the 
real world.
    The prizes created in section 4(a)(3) are designed to 
promote transformational advances related to the distribution 
or production of hydrogen. With adequate publicity announcing 
such a prize and the societal benefits that its success would 
yield, the transformational changes prize may induce innovators 
to approach a new goal in radically different and wholly 
unexpected ways. The Committee expects this prize to be used to 
stimulate work on the most difficult hurdles blocking the path 
to a hydrogen economy such as finding an affordable way to 
store an adequate amount of hydrogen on-board a vehicle.

Announcing and advertising prizes

    The Act makes clear that no prize competition can be 
announced until the full amount of the announced prize is in 
hand, whether from Federal appropriations or the administering 
entity, or both. DOE may subsequently increase the announced 
size of the prize, but again only if the additional amount is 
in hand. The Secretary must make sure that there is no quid pro 
quo, real or apparent, with regard to private contributions to 
the administering entity, i.e., that the contribution will not 
raise conflict of interest issues either in the prize program 
or any other DOE program.
    The Committee expects that both DOE and the administering 
entity will fund and engage in efforts to publicize the 
competitions and the winners. DOE administrative funds 
authorized by the Act may be used for that purpose.

Administering entity

    The Committee expects that DOE will carry out an open 
competition to select the private, non-profit entity to 
administer the prize competitions through standard procurement 
procedures.
    While much of the day-to-day operation of the prize program 
will fall to the administering entity, the Secretary is 
ultimately responsible for the program, which is awarding a 
Federal prize. The Committee expects the Secretary to ensure 
that Federal funds are being used efficiently and effectively 
by the administering entity. The Secretary should encourage the 
administering entity to cover its administrative costs with 
privately raised funds.
    The Act divides duties between the Secretary and 
administering entity to maximize the success of the program. 
For example, the Secretary and the administering entity are to 
work together to set the criteria for selecting judges to 
ensure that the public interest will be well served in the 
selection. But the actual selection is left to the 
administering entity to ensure independence from DOE so that 
the contest is not biased toward technologies in which DOE has 
an interest.
    The Secretary may assign duties to the administering entity 
beyond those enumerated in the Act, but remains ultimately 
responsible for the prize competition and for adherence to the 
Act.
    The Secretary must ensure that nothing about a contest--the 
way the technology or activity is described, the way winners 
will be judged, the way judges are selected--introduces a bias.

Funding sources

    The administering entity may contribute funds to any of the 
prizes created by the Act, and any prize awarded under the Act 
may commingle public and private funds. The administering 
entity and the Secretary should work together to determine the 
appropriate size for each award based on the nature of the 
challenge, the number of potential participants and the 
availability of funds. However, no prize may exceed the maximum 
amounts allowed by the Act or be less than the minimum amount 
required by the Act, regardless of the source of funds.

Eligibility

    The Act, in keeping with past Committee practice, requires 
that companies participating be based in the U.S. That 
requirement allows the participation of U.S.-based subsidiaries 
of foreign companies if they are incorporated in and maintain a 
primary place of business in the U.S.
    Under the Act, federal and National laboratory employees 
may participate in prize competitions in the same fashion as 
any other eligible party as long as they are not acting within 
the scope of their employment, and are abiding by all 
applicable regulations regarding outside activities.

Intellectual property

    The Committee expects the administering entity to prevent 
the unauthorized use or disclosure of a registered 
participant's trade secrets, intellectual property, or other 
confidential information.

Authorization of appropriations

    The Committee intends for the federal contribution to the 
$10,000,000 transformational changes prize to be provided over 
the first two years after enactment.
    The Act makes clear that funds appropriated for the prize 
competition are ``no year'' funds. Such funds are absolutely 
unavailable for any other purpose, and may not be reprogrammed 
until at least 10 years have elapsed from the initial 
appropriation. Any funds reprogrammed after 10 years would 
continue to be ``no year'' funds.
    The Committee expects the Department to make available to 
the Congress, on request, any information relating to the prize 
program.

Relationship to existing energy prizes

    The Act requires that any prize program DOE operates 
relating to hydrogen be carried out in accordance with the Act. 
DOE may develop inducement prize programs in areas other than 
hydrogen under the authority provided in section 1008 of the 
Energy Policy Act of 2005 (P.L. 109-58) or other authorities. 
If DOE chooses to create additional new inducement prize 
programs, the Committee expects the Secretary to review the H-
Prize program to determine the extent to which other prizes 
should be similarly administered.

                           IX. Cost Estimate

    A cost estimate and comparison prepared by the Director of 
the Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974 has been timely submitted to 
the Committee on Science prior to the filing of this report and 
is included in Section X of this report pursuant to House Rule 
XIII, clause 3(c)(3). H.R. 5143 does not contain new budget 
authority, credit authority, or changes in revenues or tax 
expenditures. Assuming that the sums authorized under the bill 
are appropriated, H.R. 5143 does authorize additional 
discretionary spending, as described in the Congressional 
Budget Office report on the bill, which is contained in Section 
X of this report.

              X. Congressional Budget Office Cost Estimate

                                                       May 5, 2006.
Hon. Sherwood L. Boehlert,
Chairman, Committee on Science,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed estimate for H.R. 5143, the H-Prize Act 
of 2006.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lisa Cash 
Driskill.
            Sincerely,
                                          Donald B. Marron,
                                                   Acting Director.
    Enclosure.

H.R. 5143--H-Prize Act of 2006

    Summary: H.R. 5143 would authorize the appropriation of $11 
million a year over the 2007-2016 period for a new program at 
the Department of Energy (DOE) to award prize money for 
achievements in the development of hydrogen energy technologies 
could include advances in the production and storage of 
hydrogen, advancements in hydrogen-powered vehicles, or 
innovations that transform hydrogen distribution and production 
technologies for energy purposes. The bill would require DOE to 
enter into an agreement with a private, nonprofit entity to 
administer the prize competition. Such an entity may contribute 
its own funds toward the prices authorized in the bill.
    Assuming the availability of appropriated funds, and based 
on information from DOE, CBO estimates that implementing the 
prize program would cost $2 million in 2007 and $39 million 
over the 2007-2011 period (with additional spending of the 
authorized amounts after 2011). We estimate that enacting the 
bill would have no effect on direct spending or revenues. H.R. 
5143 contains no intergovernmental or private-sector mandates 
as defined in the Unfunded Mandates Reform Act (UMRA); any 
costs to state, local, or tribal governments would be incurred 
voluntarily.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 5143 is shown in the following table. 
The bill would authorize the appropriation of $11 million a 
year over the 2007-2016 period to administer and award prizes 
for advancements in technologies using hydrogen. The costs of 
this legislation fall within budget function 250 (general 
science, space, and technology).

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2007     2008     2009     2010     2011
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level................................................       11       11       11       11       11
Estimated Outlays..................................................        2        7       10       10       10
----------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 5143 
contains no intergovernmental or private-sector mandates as 
defind in UMRA. Funding authorized in the bill may benefit 
institutions of higher education that compete for funds in 
connection with hydrogen research. Any costs they might incur 
to comply with the requirements of the competition would be 
incurred voluntarily.
    Estimate prepared by: Federal Costs: Lisa Cash Driskill; 
Impact on State, Local, and Tribal Governments: Lisa Ramirez-
Branum; Impact on the Private Sector: Craig Cammarata.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

        XI. Compliance With Public Law 104-4 (Unfunded Mandates)

    H.R. 5143 contains no unfunded mandates.

         XII. Committee Oversight Findings and Recommendations

    The Committee on Science's oversight findings and 
recommendations are reflected in the body of this report.

      XIII. Statement on General Performance Goals and Objectives

    Pursuant to clause (3)(c) of House rule XIII, the goals of 
H.R. 5143 are to establish a Program of inducement prizes to 
reward advancements in the development of components or 
systems, prototypes and transformational changes related to the 
production, distribution, storage and utilization of hydrogen 
as a transportation fuel; and, to authorize appropriations for 
DOE to carry out the Program.

                XIV. Constitutional Authority Statement

    Article I, section 8 of the Constitution of the United 
States grants Congress the authority to enact H.R. 5143.

                XV. Federal Advisory Committee Statement

    H.R. 5143 does not create any advisory committees.

                 XVI. Congressional Accountability Act

    The Committee finds that H.R. 5143 does not relate to the 
terms and conditions of employment or access to public services 
or accommodations within the meaning of section 102(b)(3) of 
the Congressional Accountability Act (Public Law 104-1).

      XVII. Statement on Preemption of State, Local, or Tribal Law

    This bill is not intended to preempt any state, local, or 
tribal law.

      XVIII. Changes in Existing Law Made by the Bill, as Reported

    This legislation does not amend any existing Federal 
statute.

                     XIX. Committee Recommendations

    On May 3, 2006, the Committee on Science favorably reported 
H.R. 5143, The H-Prize Act of 2006, by a voice vote, and 
recommended its enactment.


XX. PROCEEDINGS OF THE FULL COMMITTEE MARKUP ON H.R. 5143, THE H-PRIZE 
                              ACT OF 2006

                              ----------                              


                         WEDNESDAY, MAY 3, 2006

                  House of Representatives,
                                      Committee on Science,
                                                    Washington, DC.

    The Committee met, pursuant to call, at 3:34 p.m. in Room 
2318, Rayburn House Office Building, Hon. Sherwood L. Boehlert 
[Chairman of the Committee] Presiding.
    Chairman Boehlert. Good afternoon. The Science Committee 
will come to order. Pursuant to notice the Committee on Science 
meets to consider the following measure: H.R. 5143, the H-Prize 
Act of 2006.
    I ask unanimous consent for the authority to recess the 
Committee at any point during consideration of these matters. 
And without objection, it is so ordered.
    We will now proceed with the markup beginning with the 
opening statements, and I will begin.
    I want to welcome everyone to what I assume will be a very 
brief markup. I know how busy everyone is, and I appreciate the 
cooperation of all. This is on a bill to push a set of 
technologies that could turn out to be a key to the U.S. energy 
future.
    Let me begin by thanking Chairman Inglis for bringing this 
idea forward and for Mr. Lipinski for introducing the bill with 
him, Chairman Biggert for her tireless efforts to improve the 
bill and for making sure we stay on course on our efforts to 
promote a comprehensive research and development agenda, Ms. 
Jackson Lee for her helpful amendment recognizing the role that 
could be played by minority education institutions and 
businesses, and all the Members of this committee who have co-
sponsored this bill.
    The bill before us today is one sensible element of a 
comprehensive strategy to give the American people more energy 
options than they have today. If--and admittedly it is a big 
if--if we can figure out ways to make hydrogen affordable using 
nuclear or renewable fuels, and if we can figure out how to--
ways to make affordable, practical hydrogen storage tanks and 
fuel cells, then we will be able to tap a non-polluting fuel. 
The potential benefits are worth the effort.
    And precisely before the technology is long-range, prizes 
are a logical way to get as many people working on hydrogen in 
as many ways as possible. This is a useful supplement to our 
ongoing Department of Energy research and development programs, 
all of which must continue. So this is a simple, logical bill 
that builds on our past interests in prize programs. Guess 
what? When there is a prize, a lot of people want to get it, 
and we want to have it awarded.
    The amendment that Mr. Inglis will offer improves the bill 
in response to last week's testimony and concerns expressed by 
Members, including me. The substitute will clarify the 
responsibilities of whatever private entity DOE contracts with 
to run the program. And the substitute reduces the financial 
exposure of the Federal Government by an order of magnitude.
    So I think we are ready to move forward on this bill, which 
I expect to be on the House Floor this month, and I urge its 
adoption.
    [The prepared statement of Chairman Boehlert follows:]
          Prepared Statement of Chairman Sherwood L. Boehlert
    I want to welcome everyone to what I assume will be a very brief 
markup on a bill to push a set of technologies that could turn out to 
be a key to the U.S. energy future.
    Let me begin by thanking Chairman Inglis for bringing this idea 
forward and Mr. Lipinski for introducing the bill with him; Chairman 
Biggert for her tireless efforts to improve the bill and for making 
sure we stay on course in our efforts to promote a comprehensive R&D; 
agenda; Ms. Jackson-Lee for her helpful amendment recognizing the role 
that could be played by minority education institutions and businesses; 
and all the Members of this committee who have co-sponsored this bill.
    The bill before us today is one sensible element of a comprehensive 
strategy to give the American people more energy options than they have 
today. If--and admittedly it's a big if--if we can figure out ways to 
make hydrogen affordably using nuclear or renewable fuels, and if we 
can figure out ways to make affordable, practical hydrogen storage 
tanks and fuel cells, then we will be able to tap a non-polluting fuel. 
The potential benefits are worth the effort.
    And precisely because the technology is long-range, prizes are a 
logical way to get as many people working on hydrogen in as many ways 
as possible. This is a useful supplement to our ongoing Department of 
Energy (DOE) research and development (R&D;) programs, which must and 
will continue.
    So this is a simple, logical bill that builds on our past interest 
in prize programs. The amendment that Mr. Inglis will offer improves 
the bill in response to last week's testimony and concerns expressed by 
Members, including me. The substitute will clarify the responsibilities 
of whatever private entity DOE contracts with to run the program. And 
the substitute reduces the financial exposure of the Federal Government 
by an order of magnitude.
    So I think we're ready to move forward on this bill, which I expect 
will be on the House Floor this month.
    I urge its adoption.

    Chairman Boehlert. And I am glad to yield to my 
distinguished colleague Mr. Lipinski.
    Mr. Lipinski. Thank you, Mr. Chairman.
    What may be the brevity of this markup really belies the 
importance of this bill. And I would like to thank the Chairman 
for working so closely with us to make changes and make sure we 
can get this bill through the Committee and hopefully to the 
Floor very quickly.
    I am pleased to be here today for the markup of H.R. 5143, 
The H-Prize Act of 2006. I would like to thank Mr. Inglis for 
taking leadership on this important issue, and I am proud to 
have joined with the gentleman from South Carolina in 
introducing this creative legislation.
    It is obvious to all of us here the damage being caused by 
our current energy situation. Gas prices have skyrocketed over 
the last few weeks, inflicting pain on our constituents and on 
our economy. But the costs not only affect our pocketbooks, 
they affect our health and our safety.
    We cannot continue the pollution of our environment, and we 
cannot continue to rely on energy sources from unstable parts 
of the world. We must find a new solution to our energy needs.
    Hydrogen has a great potential to be a solution, but the 
technical and economic barriers are significant. By focusing 
specifically on hydrogen, the H-Prize will help us confront and 
solve these challenges. This will be done by rewarding 
innovation for specific advances in storage, production, 
utilization and distribution; and also rewarding one grand 
prize for special breakthrough in hydrogen energy.
    The environmental promise of hydrogen is great because it 
produces no emissions besides water when it is used as an 
energy source. Zero polluting emissions. But right now hydrogen 
is most efficiently created by using fossil fuels, which is not 
the most environmentally friendly or secure method. That is why 
the H-Prize rewards the development of more efficient ways to 
use renewable energy sources to create hydrogen so we can 
lessen or greenhouse gas emissions and improve our air quality.
    America has been at the forefront of new technologies for 
more than a century because our society encourages creativity 
and imagination while protecting property rights and promoting 
entrepreneurship. As we heard from our four distinguished 
witnesses last week, prizes can have the potential to spur 
innovation and ingenuity.
    It is important to emphasize that the H-Prize will not 
replace the scientific research that the Federal Government 
funds, but the H-Prize will tap into America's creativity and 
imagination to solve one of the greatest problems facing us 
today.
    Breakthroughs in hydrogen R&D;, which I believe this bill 
will induce, will unfortunately not lower energy prices this 
year or next, but it will help our country address our long-
term energy needs in a unique way.
    I would like to thank the Chairman again for the work on 
this bill. I look forward to working on more important energy 
legislation, working together on that in the future, and I urge 
my colleagues to vote for the H-Prize bill.
    [The prepared statement of Mr. Lipinski follows:]
          Prepared Statement of Representative Daniel Lipinski
    Thank you, Mr. Chairman; I am pleased to be here today for the 
markup on H.R. 5143, The H-Prize Act of 2006. I would like to thank Mr. 
Inglis for taking leadership on this important issue and I am proud to 
have introduced this creative legislation with the gentleman from South 
Carolina.
    It is obvious to all of us here the damage being caused by our 
current energy situation. Gas prices have skyrocketed over the last few 
weeks, inflicting pain on our constituents and on our economy. But the 
costs not only affect our pocketbooks, they affect our health and 
safety. We cannot continue the pollution of our environment and we 
cannot continue to rely on energy sources from unstable parts of the 
world. We must find a new solution to our energy needs.
    Hydrogen has great potential to be a solution. But the technical 
and economic barriers are significant. By focusing specifically on 
hydrogen, the H-Prize will help us confront and solve these challenges. 
This will be done by rewarding innovation for specific advances in 
storage, production, utilization, and distribution, and also awarding 
one grand prize for a special breakthrough in hydrogen energy.
    The environmental promise of hydrogen is also great. Hydrogen 
produces no emission besides water as an energy source. Zero polluting 
emissions. But right now, hydrogen is most efficiently created by using 
fossil fuels, which is not the most environmentally-friendly or secure 
method. That is why the H-Prize rewards the development of more 
efficient ways to use renewable energy sources to create hydrogen, so 
we can lessen our greenhouse gas emissions and improve our air quality.
    America has been at the forefront of new technologies for more than 
a century because our society encourages creativity and imagination, 
while protecting property rights and promoting entrepreneurship. As we 
heard from our four distinguished witnesses last week, prizes can have 
the potential to spur innovation and ingenuity. It is important to 
emphasize that the H-Prize will not replace the scientific research 
that the Federal Government funds. But the H-Prize will tap into 
American's creativity and imagination to solve one of the greatest 
problems facing us today.
    Breakthroughs in hydrogen R&D;, which I believe this bill will 
induce, unfortunately will not lower energy prices this year or next. 
But it will help our country address our long-term energy needs in a 
unique way.
    Thank you, Mr. Chairman, and I encourage all of my colleagues to 
vote for the H-Prize bill. I yield back the balance of my time.

    Chairman Boehlert. Thank you very much, Mr. Lipinski. And I 
want to thank you personally for your leadership in this issue. 
It is nice to have an engineer's perspective as we deal with 
some of these subjects.
    Without objection, Members may place statements in the 
record at this point.
    [The prepared statement of Ms. Johnson follows:]
       Prepared Statement of Representative Eddie Bernice Johnson
    Thank you, Mr. Chairman and Ranking Member.
    A collective spirit of innovation has been one of America's 
greatest assets.
    With gas prices soaring higher than ever before, the American 
public looks to its elected officials to devise a national plan to 
attain independence from foreign oil. My home state of Texas is an 
``energy-producing state.'' For many years, Texas has been in the 
business of drilling oil, refining petroleum, and producing energy.
    Texas is also an enterprising state with the foresight and 
resources to invest in the future. From nanotechnology to agricultural 
research and development, my state has led the way.
    Just this week, a Texas sugar grower came to my office and stated 
that they have made the sugar agricultural and refining process so 
efficient that the company actually produces energy from incinerating 
its cane solid waste. The incineration actually produces electricity, 
which they sell to the local grid and is enough power to fuel a town of 
two thousand people. Now that's innovation!
    H.R. 5143, introduced by my colleague Representative Inglis, is a 
step in the right direction with regard to our hydrogen economy. I feel 
it is important to fund initiatives that spur innovation and encourages 
bright minds to address pressing problems facing our society.
    Thank you, Mr. Chairman. I yield back.

    [The prepared statement of Ms. Jackson Lee follows:]
        Prepared Statement of Representative Sheila Jackson Lee
    Thank you, Mr. Chairman and Members of the Committee. I appreciate 
all of the Members who agreed with me in considering my recommended 
provisions to be important and for incorporating my provisions into the 
bill.
    The need for hydrogen energy research is vital in a time when our 
dependence on foreign oil is playing a heavy burden on our economy. I 
welcome such a program which will lead to advancements related to 
hydrogen production, storage, distribution, and utilization. Research 
in alternative energy sources is crucial for our nation to prosper. 
Fostering and providing incentives for such programs is a positive step 
in the right direction.
    Many experts consider hydrogen gas to be a promising fuel, 
particularly in the transportation sector. Used as transportation fuel, 
Hydrogen has the potential in helping overcoming, reducing or 
eliminating air pollution generated by cars and trucks. The Hydrogen 
Prize Act will help promote potentially innovative results that will 
reduce technical and other barriers to the advancement of hydrogen 
technologies.
    I was particularly concerned that the Hydrogen Prize program be 
widely advertised to historically black colleges and universities and 
other minority serving institutions. I am interested also in that the 
Hydrogen Prize program is advertised to women and disadvantaged small 
businesses. Minorities, women and disadvantaged enterprises can 
contribute significantly in these programs. That is why it is essential 
that these groups be informed about such projects.
    Therefore, I am very pleased that the bill incorporates the 
requirement to advertise widely so minority, women and disadvantaged 
businesses learn about the opportunity.
    With that, I can support the bill.
    Thank you again, Mr. Chairman and Members of the Committee.

    Chairman Boehlert. We will now consider H.R. 5143, The H-
Prize Act of 2006. I ask unanimous consent that the bill is 
considered as read and open to amendment at any point, and that 
Members proceed with the amendments in the order of the roster.
    Without objection, so ordered.
    The first amendment on the roster is an amendment in the 
nature of a substitute offered by the gentleman from South 
Carolina Mr. Inglis. I ask unanimous consent that the amendment 
in the nature of a substitute be treated as the original text 
for purposes of amendment under the five-minute rule.
    Without objection, so ordered.
    Mr. Inglis, are you ready to proceed.
    Mr. Inglis. I am, Mr. Chairman.
    Chairman Boehlert. The Clerk will report the amendment.
    The Clerk. Amendment in the nature of a substitute offered 
by Mr. Inglis of South Carolina.
    Chairman Boehlert. I ask unanimous consent to dispense with 
the reading.
    Without objection, so ordered.
    And the gentleman is recognized for five minutes to explain 
the substitute amendment.
    Mr. Inglis. First of all, Mr. Chairman, I want to thank you 
for moving this bill so quickly, and thank Mr. Lipinski for his 
work in being one of our prime co-sponsors, and very much 
appreciate the bipartisan way in which this is advancing.
    We have here an amendment in the nature of a substitute 
that fixes some things that were revealed in the course of our 
hearing last week, really one of the most helpful hearings that 
I have been to in my time in Congress because we had excellent 
witnesses that made some helpful suggestions.
    The substitute works to define ``administering entity'' and 
provides further clarity in the role of the Secretary of Energy 
and the duties that the Secretary will have in administrating 
or setting up the administrating entity. It will also--the 
substitute also addresses some advertising, fund-raising, 
criteria development and transformational prize amount, and 
judge selection issues.
    In fact, I was just speaking with one of our colleagues 
about what we hope to improve even further by report language, 
and that is further direction to the Secretary to come up with 
the clearest metrics possible that we know when someone has 
clearly won the prize. As you recall from Peter Diamandis' 
testimony, that was an essential element of the X-Prize.
    The substitute creates different prize amounts than the 
bill as original introduced. Originally we had $100 million 
grand prize offered within 10 years. Now that will be a $10 
million grand prize, but with the goal of $40 million being 
raised from private funds. It is important to note that that 
$40 million flows out in a dollar-for-dollar match to the 
venture capital that the winner has amassed.
    So it is a test to make certain that the winner not just 
has a technology that can technically work, but rather one that 
the market is ready to embrace, which, of course, is the 
government's objective in this, which is to get all the way to 
the marketplace rather than simply have a technology that we 
can put on the shelf.
    So the substitute sets up a $10 million prize--grand prize 
with the goal of raising $40 million in private funds that 
would be the matching portion of that grand prize. It is 
important to note that the federal contribution to the grand 
prize will be limited to $10 million in deference to a number 
of colleagues who expressed concern that $10 million was 
sufficient. So it is possible, I would point out, that the 
private fund-raising could outstrip that $40 million amount, 
which would be all the better, in my opinion.
    The substitute also makes changes in the authorizing--
authorized amounts. The substitute would authorize $11 million 
per year, which includes not more than $2 million for 
administration expenses--$2 million annually.
    Another change in the substitute is that the funds would 
expire in 10 fiscal years after the fiscal year in which they 
were first appropriated, rather than remaining available until 
expended. The reason for that is to push toward a granting of a 
prize within 10 years.
    Finally, the substitute incorporates helpful language 
suggested by Ms. Jackson Lee that ensures that the prize 
advertising efforts reach out to minority colleges, 
universities and institutions, and minority and disadvantaged 
businesses, and we were happy to receive her suggestion there.
    And, Mr. Chairman, as a baseball fan that you are, I note 
that you see this as an opportunity for a triple play. It 
really is an opportunity for a great triple play for us. We can 
clean up the air if we can get to hydrogen, we can create a lot 
of new jobs and expand our economy, and we can also make a more 
secure country by ending our addiction to oil. So it really is 
an opportunity for a triple play, and I thank you for moving 
the bill so rapidly.
    Chairman Boehlert. Mr. Inglis, if can you keep coming up 
with triple plays, I can guarantee you a spot in the Baseball 
Hall of Fame.
    Mr. Miller.
    Mr. Miller. Thank you. Strike the last word, Mr. Chairman.
    Chairman Boehlert. The gentleman is recognized for five 
minutes.
    Mr. Miller. Thank you. I will support this bill, but I hope 
we are back here sometime soon to create an E-Prize and perhaps 
a C-Prize. I think we should be proceeding on several fronts at 
one time, not putting all of our emphasis on hydrogen as a 
solution to our energy needs.
    I agree with Mr. Inglis of what we need to accomplish. I 
think we need to find a source of energy that is sustainable, 
that does not make us dependent for 60 percent of our fuel on 
the most unstable parts of the world, and that we have an 
energy source that does not produce greenhouse gases that may 
and probably is changing our climate, perhaps with cataclysmic 
results.
    So I want all the same runners out that Mr. Inglis wants 
out, but I am not sure that we need to put all of our emphasis 
on hydrogen as the way to do it. Many who are expert in this 
area are skeptical that hydrogen is the best solution to our 
needs. And I would strongly recommend, Mr. Chairman, that we 
develop similar legislation to create an energy prize, an E-
Prize, a conservation prize, a C-Prize.
    One of the witnesses last week is trying to develop a prize 
for an automobile that will get 100 miles to the gallon and an 
automobile that is commercially feasible. One hundred miles a 
gallon; now we are talking. That would really, really make a 
difference in our economy, in our environment, and in our role 
in the world in not having to be as dependent as we are upon 
very frightening governments around the world.
    So I will produce--I will support this legislation. But 
again, I hope that we will come back and continue to focus on 
all the potential solutions to our energy problem.
    Chairman Boehlert. Thank you very much. And just let me 
say, I agree with the gentleman's observations. We don't need 
prizes for everything, but we need some good, sound policies 
for a lot of things that we don't have sound policies for. So I 
look forward to continuing to work productively and 
cooperatively with the gentleman.
    Is there anyone else who seeks recognition?
    Mr. Rohrabacher.
    Mr. Rohrabacher. Strike the last word.
    Chairman Boehlert. The gentleman is recognized.
    Mr. Rohrabacher. Mr. Chairman, I oppose H.R. 5143, The H-
Prize Act of 2006. Energy policy, of course, is critically 
important to the United States of America for a number of 
reasons, as have already been stated. And I would like to 
congratulate Chairman Inglis and yourself and others who are 
trying to reach out and do something to further the cause of 
energy independence, et cetera. And I understand the leadership 
that you two are certainly demonstrating, and I appreciate 
that.
    But this bill has several flaws which I would--which cause 
me to oppose it, and if they can be corrected, or if we can 
work out some of the details before it gets to the Floor, maybe 
there might be an amendment on the Floor that would permit me 
to support the legislation. But by its nature, we have just 
heard one criticism from someone who is going to support it. 
Mr. Miller mentioned we should have an E-Prize, an energy 
prize, rather than just a hydrogen prize, and I agree with that 
sentiment. That is, we should not just be singling out hydrogen 
from biomass, nuclear energy, solar energy, hydrocarbon 
extraction, or other types of ideas as a means of achieving our 
energy goals.
    So this does just focus on hydrogen. However, this is a 
step forward. I mean, if we have some success in hydrogen, we 
recognize that is a step forward. That in and of itself would 
not warrant me opposing the legislation. But I do agree with 
the general concept. We should have an energy prize or a 
conservation prize, and maybe we should all just take this 
opportunity to commit ourselves to coming up with that type of 
an approach. However, with that said, there are some specifics 
that I think need to be corrected in the bill.
    We heard in testimony from Dr. Peter Diamandis, who 
established the prize which led to Space Ship 1 and is one of 
the most successful prizes in the history, as well as we know 
about the other prizes which led to Lindbergh's solo flight 
across the Atlantic; the DARPA Grand Challenge, which has 
helped tremendously in the creation of vehicle technology.
    Well, these things had one thing in common. All of these 
prizes had very defined goals. The four biennial $1 million H-
prizes in this bill will not--they do not have this 
specifically designed goal. Instead, they will be awarded every 
two years to the winners determined on points by a panel of 
judges.
    Mr. Chairman, the prizes that succeeded are the ones for 
feats that are analogous for who is the first one to climb 
Mount Everest or the first one to go across this specific line. 
But this group of prizes are not the equivalent of winning a 
100-yard dash or achieving something specifically. It is more 
like winning the hearts of judges at an ice skating 
competition. So, yes, the $4 million and $10 million prizes in 
the bill do seem to involve objective and specific criteria, 
but the others do not.
    I think this needs to be dealt with. I will be happy to 
work with Chairman Inglis and others to try to see if we can 
find language that will correct that flaw. And if we can, I 
will be very happy to support it on the Floor and work--and 
look forward to working with everyone here, including you, Mr. 
Chairman, and Chairman Inglis, on these idea of other prizes 
that we can further the cause of energy independence and 
conservation of energy.
    Chairman Boehlert. Thank you very much, Mr. Rohrabacher. 
And I always appreciate the spirit of cooperation that you 
evidence in your comments, and we look forward, Chairman Inglis 
and I, working with you. Maybe--maybe you should amend that 
from a triple play to a triple Axel. That would be appropriate.
    Is there any--Mr. Gutknecht.
    Mr. Gutknecht. Mr. Chairman, first of all, I think Mr. 
Inglis wanted to respond, and I would yield to him such time as 
he may need.
    Mr. Inglis. Thank the gentleman.
    Two points. One is I agree, Mr. Rohrabacher, that we really 
do want to make these very defined goals. In other words, the 
metrics for the granting of the prize are left to the 
discretion of the Secretary of Energy as drafted here out of 
necessity. That is that we are not--I am not certainly an 
expert that would come up with the metrics that would work 
exactly right for this prize. And what we heard from Peter 
Diamandis is that you need to set the metrics very clearly and 
have a lot of thought from a lot of very helpful people that 
know the subject matter to set up the prize just right.
    So the goal is to have very clear metrics, and that is part 
of the essence of having the prize. So if there are ways that 
we can improve our language between here and the Floor, I am 
happy to do that.
    The other thing that I think is helpful from both Mr. 
Rohrabacher and Mr. Miller is there is some breakthroughs that 
are needed in hydrogen. The difference between, I think, some 
of the technologies that Mr. Rohrabacher mentioned, like 
ethanol and biomass and things like that, is that they are 
pretty much here and now. There is a question of 
commercialization in some cases, but they are here and now. The 
challenge with hydrogen is there is some breakthroughs that are 
out there a little bit. And the beauty of a prize is you 
incentivize people, as we heard from the panel last week, 
incentivize people to go out and reach for those things without 
the oversight of the government, without the appropriations 
from the government, on their own dime breaking through.
    And as the former Chairman of this committee reminded me 
earlier this week, he told me--Bob Walker told me to tell 
everybody: Remember, if nobody wins the prize, no money flows. 
So you have to win the prize in order for the money to flow.
    So I yield back. I thank the gentleman for yielding.
    Mr. Gutknecht. Mr. Chairman, reclaiming my time.
    I just want to say, based on the objections we have heard 
so far today, I don't really think there is a reason to not 
move this bill out of this committee today. And I hope that the 
author and Congressman Rohrabacher will work together and with 
others who have concerns. But I think Mr. Inglis made the point 
exactly right in his last statement, and that is that nothing 
is going to happen unless somebody does something on this.
    And in many respects I remain relatively skeptical about 
hydrogen, even though I also believe it is sort of the holy 
grail. I mean, if we ultimately figure out how to use hydrogen, 
it is so abundant, it is so cheap, that it really will present 
us with an unlimited energy future. So if nobody can break 
through, then we won't have to pay any money. And I really--if 
you wait until all the lights are on green, we will never leave 
the house.
    And so I think we should move this bill out of Committee 
today. Between here and the Floor, and between here and the 
Senate, and between here and Conference Committee, obviously we 
can make some adjustments. But I don't think we should delay 
moving this bill forward today simply because we haven't 
answered every single question about the future of hydrogen, 
because those questions are going to be answered probably 
beyond our term here in this body.
    Chairman Boehlert. Thank you very much.
    Before moving on to a vote on the substitute, I would like 
to take a few minutes to engage in a colloquy with the 
gentleman from Illinois Mr. Lipinski concerning the issue of 
intellectual property rights with regard to the prizes.
    Mr. Lipinski. Mr. Chairman, would the gentleman yield?
    Chairman Boehlert. I am glad to yield to the gentleman.
    Mr. Lipinski. Mr. Chairman, we do not have specific text of 
the amendment at this point, but I would like to raise two 
concerns with the current text of H.R. 5143 that have been 
raised by Democratic Members.
    First, H.R. 5143 asks participants in the competition set 
up under this bill to entrust the private nonprofit entity 
chosen to administer the prize competitions with such trade 
secrets, intellectual property and other confidential 
information as are necessary to choose competition winners. In 
the case of individuals and small businesses, these assets may 
very well be their most important ones. However, the 
intellectual property and liability sections of the bill are 
written in terms of responsibilities and waiver of claims 
against the Federal Government and related entities.
    If we are to expect broad participation in these 
competitions, we need to be explicitly clear that after 
submission, the ideas remain those of the participant who 
submitted them, and that the nonprofit administrator has an 
affirmed duty to protect this property from public disclosure.
    Secondly, it is my reading of the statute that American 
subsidiaries of foreign companies are eligible to participate 
in the competition. Is that your understanding of the 
Committee's intent?
    Chairman Boehlert. I thank the gentleman for his comments.
    We all want to make sure that a wide group of applicants 
are eligible for and actually apply under these prize 
competitions. You raise some serious concerns regarding the 
intellectual property and confidential information of the 
applicants, and I agree--I agree that we will need to address 
these issues in a bipartisan manner before the bill goes to the 
Floor.
    Also, the gentleman is correct that American subsidiaries 
of foreign companies have the same eligibility to participate 
as other U.S.-based companies. This is the standard language we 
use to ensure that companies involved in federal programs are 
operating in the United States. So I think we are all set.
    Are there any other amendments to the amendment in the 
nature of a substitute? If not, the vote occurs on the 
amendment in the nature of a substitute.
    All those in favor, signify by saying aye.
    Opposed, no.
    In the opinion of the Chair, the ayes have it. And the 
amendment is agreed to.
    Are there any other amendments?
    Hearing none, the vote is on the bill, H.R. 5143, The H-
Prize Act of 2006, as amended.
    All those in favor, signify by saying aye.
    Opposed, no.
    In the opinion of the Chair, the ayes have it.
    I recognize Mr. Lipinski to offer a motion.
    Mr. Lipinski. Mr. Chairman, I move that the Committee 
favorably report H.R. 5143, as amended, to the House with the 
recommendation that the bill, as amended, do pass. Furthermore, 
I move that staff be instructed to prepare the legislative 
report and make necessary technical and conforming changes, and 
that the Chairman take all necessary steps to bring the bill 
before the House for consideration.
    Chairman Boehlert. The question is the motion to report the 
bill as amended favorably. Those in favor of the motion will 
signify by saying aye.
    Opposed, no.
    The ayes have it, the and bill is favorably reported. 
Without objection, the motion to reconsider is laid upon the 
table.
    I move that Members have two subsequent calendar days in 
which to submit supplemental minority or additional views on 
the measure. I further move pursuant to clause 1 of rule 22 of 
the House of Representatives that the Committee authorizes the 
Chairman to offer such motions as may be necessary in the House 
to adopt and pass H.R. 5143, The H-Prize Act of 2006, as 
amended. Without objection, so ordered.
    I want to thank Members for their attention. And it lived 
up to its advance billing. We did not take too long.
    Thank you. This markup is adjourned.
    [Whereupon, at 4:00 p.m., the Committee was adjourned.]
                                Appendix

                              ----------                              


H.R. 5143, Summary of H.R. 5143, Section-by-Section Analysis, Amendment 
Roster, Summary of Manager's Amendment to H.R. 5143, Section-by-Section 
Analysis of Amendment, Description of Major Changes in the Amendment in 
    the Nature of a Substitute Compared With H.R. 5143 as Introduced






                          Summary of H.R. 5143

    This bill is intended to create a new incentive to achieve 
scientific and technical breakthroughs required to accelerate 
the drive to a hydrogen economy. The following three prize 
programs are intended to draw new, entrepreneurial players to 
join the race to break down technical and other barriers to the 
advancement of hydrogen technologies.
    First, four $1 million prizes are to be awarded every other 
year to the best technology advancements in components or 
systems related to hydrogen production, hydrogen storage, 
hydrogen distribution, and hydrogen utilization.
    Next, one $4 million prize is to be awarded for prototypes 
of hydrogen-powered vehicles or hydrogen-based products that 
best meet or exceed objective performance criteria. Awards for 
prototype prizes alternate years with the technology 
advancements prize.
    Finally, one $10 million prize is to be awarded for 
transformational changes in technologies for the production and 
distribution of hydrogen that meet or exceed far-reaching 
objective criteria. The Secretary of Energy is authorized to 
provide up to $90 million more in matching funds for every 
dollar of private funding raised by the winner for the 
continued development of their winning technology.
    The bill also includes provisions to:

          Sunset the prize program in 2017;

          Require the Secretary to enter into an 
        agreement with a private, non-profit entity to 
        administer the prize competitions;

          Define contestant eligibility, waive 
        intellectual property rights, waive federal liability, 
        and require purchase of liability insurance by 
        contestants;

          Authorize annual appropriations of 
        $55,000,000 for fiscal years 2007 through 2016 for the 
        Department of Energy.
                     Section-by-Section Analysis of

                   H.R. 5143, The H-Prize Act of 2006

Section 1. Short Title.

    The H-Prize Act of 2006.

Sec. 2. Definitions.

    Defines Department and Secretary.

Sec. 3. Prize Authority.

    Requires the Secretary of Energy to create a prize to 
advance the research, development, demonstration and commercial 
application of hydrogen energy technologies.
    Requires the Secretary to advertise the prize competitions 
widely to encourage broad participation, including a specific 
direction to announce the prize competitions through 
publication of a Federal Register notice. Requires the 
Secretary to enter into an agreement with a private, non-profit 
entity to administer the prize competitions. Authorizes the 
Secretary to use funding directly appropriated for such 
purposes to the Department of Energy (DOE) or other agencies 
and to accept funds provided by private entities or 
individuals. Prohibits the announcement of any prize 
competition until sufficient funds are available. Sunsets the 
authority to award prizes in 2017.

Sec. 4. Prize Categories.

    Defines prize categories for:

          (i)  Components or Systems. Establishes up to four $1 
        million prizes awarded every other year to the best 
        technology advancements in components or systems 
        related to hydrogen production, hydrogen storage, 
        hydrogen distribution, and hydrogen utilization. 
        Provides the Secretary the discretion to reduce the 
        amount or number of prizes based upon the availability 
        of funds.

         (ii)  Prototypes. Establishes one $4 million prize for 
        prototypes of hydrogen-powered vehicles or hydrogen-
        based products that best meet or exceed objective 
        performance criteria. Awards prototype prizes in years 
        alternate with the technology advancements prize. 
        Prohibits the Secretary from awarding the prize if no 
        entrant meets the objectively defined performance 
        criteria.

        (iii)  Transformational Changes. Establishes a $10 
        million prize for transformational changes in 
        technologies for the production and distribution of 
        hydrogen that meet or exceed far-reaching objective 
        criteria. Authorizes the Secretary to provide up to $90 
        million more in matching funds for every dollar of 
        private funding raised by the winner for the continued 
        development of their winning technology. Authorizes 
        prize winners to accept these additional funds as cash 
        or as a government contract equivalent to the prize 
        amount. Limits the total award to $100 million.

    Requires the Secretary to establish contest criteria 
through consultation with the Hydrogen Technical Advisory 
Committee, other federal agencies including the National 
Science Foundation, and private organizations including the 
National Academy of Sciences. Requires the Secretary to appoint 
contest judges from the private sector and agencies outside 
DOE. Excludes judges who may have a personal or financial 
relationship with any contest participant.

Sec. 5. Eligibility.

    Requires contestants to register through the process 
published in the Federal Register. Requires contestants be 
incorporated and maintain a primary place of business in the 
U.S. if a private entity, or must be a U.S. citizen if an 
individual. Excludes from participation any federal entities or 
federal or national laboratory employees while on duty.

Sec. 6. Intellectual Property.

    Waives claims by the Federal Government to any intellectual 
property rights derived from participation in the prize 
competitions.

Sec. 7. Liability.

    Requires contestants to waive claims against the Federal 
Government resulting from participation in prize competition 
activities. Requires contestants to have liability insurance 
against damages resulting from participation in any prize 
competition activity and to name the Federal Government as an 
additional insured entity.

Sec. 8. Authorization of Appropriations.

    Authorizes $55 million for each of fiscal years 2007 
through 2016. Limits the use of appropriated funds for 
administrative expenses to no more than $1 million in any 
fiscal year.

Sec. 9. Non-substitution.

    Expresses a sense of the Congress that the prize 
competitions shall not act as a substitute for any research and 
development programs.


            Summary of the Manager's Amendment to H.R. 5143

    This Manager's Amendment is offered as an Amendment in the 
Nature of a Substitute. The changes introduced to the bill by 
the Amendment are in response to Member and witness comments 
expressed during the April 27, 2006 hearing. The main changes 
are to set a private sector fund raising goal of $40,000,000 
for the transformational technologies prize; reduce and cap the 
federal contribution to the transformational technologies prize 
of $10,000,000; and clearly delineate the duties of the 
administering entity.

Definitions: Defines the ``administering entity.''

Prize Authority: Adds language ensuring that prize advertising 
efforts reach out to historically black colleges and 
universities, other minority serving institutions, as well as 
large and small businesses, including minority and 
disadvantaged businesses.

    Enumerates the duties of the ``administering entity.'' 
These include advertising the prizes and their results, 
fundraising for administrative costs and cash prizes, working 
with the Secretary to develop prize criteria based upon goals 
provided by the Secretary, working with the Secretary to 
determine the appropriate amounts prizes awarded under the 
transformational changes category described in section 4, and 
selecting judges using criteria developed in consultation with 
the Secretary.

Prize Categories: For transformational technologies, creates a 
minimum $10,000,000 lump sum prize award, limits the federal 
contribution to $10,000,000, and sets a private fundraising 
goal of $40,000,000 for the matching funds portion of the 
transformational prize.

Authorization of Appropriations: Reduces the annual 
authorization of appropriations from $55,000,000 to 
$11,000,000. Increases the limitation on administrative 
expenses within the total authorization from $1,000,000 to 
$2,000,000.

    Inserts a limitation on the carryover of funds. Funds 
expire 10 fiscal years after the fiscal year in which they were 
appropriated rather than remaining available until expended.

                   Section-by-Section Analysis of the

               Amendment in the Nature of a Substitute to

                   H.R. 5143, the H-Prize Act of 2006

Section 1. Short Title.

    The H-Prize Act of 2006.

Sec. 2. Definitions.

    Defines Administering Entity, Department and Secretary.

Sec. 3. Prize Authority.

    Requires the Secretary of Energy to create a prize to 
advance the research, development, demonstration and commercial 
application of hydrogen energy technologies.
    Requires the Secretary to advertise the prize competitions 
widely to encourage broad participation, including outreach to 
historically black colleges and universities, other minority 
serving institutions, as well as large and small businesses, 
including minority and disadvantaged businesses. Includes a 
specific direction to announce the prize competitions through 
publication of a Federal Register notice.
    Requires the Secretary to enter into an agreement with a 
private, non-profit entity to administer the prize 
competitions. Enumerates the duties of the administering entity 
to include advertising the prizes and their results, 
fundraising for administrative costs and cash prizes, working 
with the Secretary to develop prize criteria based upon goals 
provided by the Secretary, working with the Secretary to 
determine the appropriate amounts for prizes awarded under the 
transformational changes category described in section 4, and 
selecting judges using criteria developed in consultation with 
the Secretary.
    Authorizes the Secretary to use funding directly 
appropriated for such purposes to the Department of Energy 
(DOE) or other agencies and to accept funds provided by private 
entities or individuals. Prohibits the announcement of any 
prize competition until sufficient funds are available. Sunsets 
the authority to award prizes in 2017.

Sec. 4. Prize Categories.

    Defines prize categories for:

          (i)  Components or Systems. Establishes up to four $1 
        million prizes awarded every other year to the best 
        technology advancements in components or systems 
        related to hydrogen production, hydrogen storage, 
        hydrogen distribution, and hydrogen utilization. 
        Provides the Secretary the discretion to reduce the 
        amount or number of prizes based upon the availability 
        of funds.

         (ii)  Prototypes. Establishes one $4 million prize for 
        prototypes of hydrogen-powered vehicles or hydrogen-
        based products that best meet or exceed objective 
        performance criteria. Awards prototype prizes in years 
        alternate with the technology advancements prize. 
        Prohibits the Secretary from awarding the prize if no 
        entrant meets the objectively defined performance 
        criteria.

        (iii)  Transformational Changes. Establishes a minimum 
        $10,000,000 lump sum prize award for transformational 
        changes in technologies for the production and 
        distribution of hydrogen that meet or exceed far-
        reaching objective criteria. Limits the federal 
        contribution to $10,000,000, and sets a private 
        fundraising goal of $40,000,000 for prize money 
        provided as matching funds for every dollar of private 
        funding raised by the winner for the continued 
        development of their winning technology.

    Requires the Secretary to establish contest criteria 
through consultation with the Hydrogen Technical Advisory 
Committee, other federal agencies including the National 
Science Foundation, and private organizations including the 
National Academy of Sciences. Requires the Secretary to appoint 
contest judges from the private sector and agencies outside 
DOE. Excludes judges who may have a personal or financial 
relationship with any contest participant.

Sec. 5. Eligibility.

    Requires contestants to register through the process 
published in the Federal Register. Requires contestants be 
incorporated and maintain a primary place of business in the 
U.S. if a private entity, or must be a U.S. citizen if an 
individual. Excludes from participation any federal entities or 
federal or national laboratory employees while on duty.

Sec. 6. Intellectual Property.

    Waives claims by the Federal Government to any intellectual 
property rights derived from participation in the prize 
competitions.

Sec. 7. Liability.

    Requires contestants to waive claims against the Federal 
Government resulting from participation in prize competition 
activities. Requires contestants to have liability insurance 
against damages resulting from participation in any prize 
competition activity and to name the Federal Government as an 
additional insured entity.

Sec. 8. Authorization of Appropriations.

    Authorizes $11 million for each of fiscal years 2007 
through 2016, with funds expiring 10 fiscal years after the 
fiscal year in which they were appropriated. Limits the use of 
appropriated funds for administrative expenses to no more than 
$2 million in any fiscal year.

Sec. 9. Non-substitution.

    Expresses a sense of the Congress that the prize 
competitions shall not act as a substitute for any research and 
development programs.