[109th Congress Public Law 58]
[From the U.S. Government Printing Office]


[DOCID: f:publ058.109]

[[Page 593]]

                        ENERGY POLICY ACT OF 2005

[[Page 119 STAT. 594]]

Public Law 109-58
109th Congress

                                 An Act


 
  To ensure jobs for our future with secure, affordable, and reliable 
               energy. <<NOTE: Aug. 8, 2005 -  [H.R. 6]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in <<NOTE: Energy Policy Act of 2005. 42 USC 
15801 note.>> Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Energy Policy Act 
of 2005''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

                       TITLE I--ENERGY EFFICIENCY

                      Subtitle A--Federal Programs

Sec. 101. Energy and water saving measures in congressional buildings.
Sec. 102. Energy management requirements.
Sec. 103. Energy use measurement and accountability.
Sec. 104. Procurement of energy efficient products.
Sec. 105. Energy savings performance contracts.
Sec. 106. Voluntary commitments to reduce industrial energy intensity.
Sec. 107. Advanced Building Efficiency Testbed.
Sec. 108. Increased use of recovered mineral component in federally 
           funded projects involving procurement of cement or concrete.
Sec. 109. Federal building performance standards.
Sec. 110. Daylight savings.
Sec. 111. Enhancing energy efficiency in management of Federal lands.

            Subtitle B--Energy Assistance and State Programs

Sec. 121. Low-income home energy assistance program.
Sec. 122. Weatherization assistance.
Sec. 123. State energy programs.
Sec. 124. Energy efficient appliance rebate programs.
Sec. 125. Energy efficient public buildings.
Sec. 126. Low income community energy efficiency pilot program.
Sec. 127. State Technologies Advancement Collaborative.
Sec. 128. State building energy efficiency codes incentives.

                  Subtitle C--Energy Efficient Products

Sec. 131. Energy Star program.
Sec. 132. HVAC maintenance consumer education program.
Sec. 133. Public energy education program.
Sec. 134. Energy efficiency public information initiative.
Sec. 135. Energy conservation standards for additional products.
Sec. 136. Energy conservation standards for commercial equipment.
Sec. 137. Energy labeling.
Sec. 138. Intermittent escalator study.
Sec. 139. Energy efficient electric and natural gas utilities study.
Sec. 140. Energy efficiency pilot program.
Sec. 141. Report on failure to comply with deadlines for new or revised 
           energy 
           conservation standards.

                       Subtitle D--Public Housing

Sec. 151. Public housing capital fund.

[[Page 119 STAT. 595]]

Sec. 152. Energy-efficient appliances.
Sec. 153. Energy efficiency standards.
Sec. 154. Energy strategy for HUD.

                       TITLE II--RENEWABLE ENERGY

                     Subtitle A--General Provisions

Sec. 201. Assessment of renewable energy resources.
Sec. 202. Renewable energy production incentive.
Sec. 203. Federal purchase requirement.
Sec. 204. Use of photovoltaic energy in public buildings.
Sec. 205. Biobased products.
Sec. 206. Renewable energy security.
Sec. 207. Installation of photovoltaic system.
Sec. 208. Sugar cane ethanol program.
Sec. 209. Rural and remote community electrification grants.
Sec. 210. Grants to improve the commercial value of forest biomass for 
           electric energy, useful heat, transportation fuels, and other 
           commercial purposes.
Sec. 211. Sense of Congress regarding generation capacity of electricity 
           from renewable energy resources on public lands.

                      Subtitle B--Geothermal Energy

Sec. 221. Short title.
Sec. 222. Competitive lease sale requirements.
Sec. 223. Direct use.
Sec. 224. Royalties and near-term production incentives.
Sec. 225. Coordination of geothermal leasing and permitting on Federal 
           lands.
Sec. 226. Assessment of geothermal energy potential.
Sec. 227. Cooperative or unit plans.
Sec. 228. Royalty on byproducts.
Sec. 229. Authorities of Secretary to readjust terms, conditions, 
           rentals, and royalties.
Sec. 230. Crediting of rental toward royalty.
Sec. 231. Lease duration and work commitment requirements.
Sec. 232. Advanced royalties required for cessation of production.
Sec. 233. Annual rental.
Sec. 234. Deposit and use of geothermal lease revenues for 5 fiscal 
           years.
Sec. 235. Acreage limitations.
Sec. 236. Technical amendments.
Sec. 237. Intermountain West Geothermal Consortium.

                        Subtitle C--Hydroelectric

Sec. 241. Alternative conditions and fishways.
Sec. 242. Hydroelectric production incentives.
Sec. 243. Hydroelectric efficiency improvement.
Sec. 244. Alaska State jurisdiction over small hydroelectric projects.
Sec. 245. Flint Creek hydroelectric project.
Sec. 246. Small hydroelectric power projects.

                       Subtitle D--Insular Energy

Sec. 251. Insular areas energy security.
Sec. 252. Projects enhancing insular energy independence.

                         TITLE III--OIL AND GAS

           Subtitle A--Petroleum Reserve and Home Heating Oil

Sec. 301. Permanent authority to operate the Strategic Petroleum Reserve 
           and other energy programs.
Sec. 302. National Oilheat Research Alliance.
Sec. 303. Site selection.

                         Subtitle B--Natural Gas

Sec. 311. Exportation or importation of natural gas.
Sec. 312. New natural gas storage facilities.
Sec. 313. Process coordination; hearings; rules of procedure.
Sec. 314. Penalties.
Sec. 315. Market manipulation.
Sec. 316. Natural gas market transparency rules.
Sec. 317. Federal-State liquefied natural gas forums.
Sec. 318. Prohibition of trading and serving by certain individuals.

                         Subtitle C--Production

Sec. 321. Outer Continental Shelf provisions.

[[Page 119 STAT. 596]]

Sec. 322. Hydraulic fracturing.
Sec. 323. Oil and gas exploration and production defined.

                   Subtitle D--Naval Petroleum Reserve

Sec. 331. Transfer of administrative jurisdiction and environmental 
           remediation, Naval Petroleum Reserve Numbered 2, Kern County, 
           California.
Sec. 332. Naval Petroleum Reserve Numbered 2 Lease Revenue Account.
Sec. 333. Land conveyance, portion of Naval Petroleum Reserve Numbered 
           2, to City of Taft, California.
Sec. 334. Revocation of land withdrawal.

                    Subtitle E--Production Incentives

Sec. 341. Definition of Secretary.
Sec. 342. Program on oil and gas royalties in-kind.
Sec. 343. Marginal property production incentives.
Sec. 344. Incentives for natural gas production from deep wells in the 
           shallow waters of the Gulf of Mexico.
Sec. 345. Royalty relief for deep water production.
Sec. 346. Alaska offshore royalty suspension.
Sec. 347. Oil and gas leasing in the National Petroleum Reserve in 
           Alaska.
Sec. 348. North Slope Science Initiative.
Sec. 349. Orphaned, abandoned, or idled wells on Federal land.
Sec. 350. Combined hydrocarbon leasing.
Sec. 351. Preservation of geological and geophysical data.
Sec. 352. Oil and gas lease acreage limitations.
Sec. 353. Gas hydrate production incentive.
Sec. 354. Enhanced oil and natural gas production through carbon dioxide 
           injection.
Sec. 355. Assessment of dependence of State of Hawaii on oil.
Sec. 356. Denali Commission.
Sec. 357. Comprehensive inventory of OCS oil and natural gas resources.

                   Subtitle F--Access to Federal Lands

Sec. 361. Federal onshore oil and gas leasing and permitting practices.
Sec. 362. Management of Federal oil and gas leasing programs.
Sec. 363. Consultation regarding oil and gas leasing on public land.
Sec. 364. Estimates of oil and gas resources underlying onshore Federal 
           land.
Sec. 365. Pilot project to improve Federal permit coordination.
Sec. 366. Deadline for consideration of applications for permits.
Sec. 367. Fair market value determinations for linear rights-of-way 
           across public lands and National Forests.
Sec. 368. Energy right-of-way corridors on Federal land.
Sec. 369. Oil shale, tar sands, and other strategic unconventional 
           fuels.
Sec. 370. Finger Lakes withdrawal.
Sec. 371. Reinstatement of leases.
Sec. 372. Consultation regarding energy rights-of-way on public land.
Sec. 373. Sense of Congress regarding development of minerals under 
           Padre Island National Seashore.
Sec. 374. Livingston Parish mineral rights transfer.

                        Subtitle G--Miscellaneous

Sec. 381. Deadline for decision on appeals of consistency determination 
           under the Coastal Zone Management Act of 1972.
Sec. 382. Appeals relating to offshore mineral development.
Sec. 383. Royalty payments under leases under the Outer Continental 
           Shelf Lands Act.
Sec. 384. Coastal impact assistance program.
Sec. 385. Study of availability of skilled workers.
Sec. 386. Great Lakes oil and gas drilling ban.
Sec. 387. Federal coalbed methane regulation.
Sec. 388. Alternate energy-related uses on the Outer Continental Shelf.
Sec. 389. Oil Spill Recovery Institute.
Sec. 390. NEPA review.

                   Subtitle H--Refinery Revitalization

Sec. 391. Findings and definitions.
Sec. 392. Federal-State regulatory coordination and assistance.

                             TITLE IV--COAL

                 Subtitle A--Clean Coal Power Initiative

Sec. 401. Authorization of appropriations.

[[Page 119 STAT. 597]]

Sec. 402. Project criteria.
Sec. 403. Report.
Sec. 404. Clean coal centers of excellence.

                    Subtitle B--Clean Power Projects

Sec. 411. Integrated coal/renewable energy system.
Sec. 412. Loan to place Alaska clean coal technology facility in 
           service.
Sec. 413. Western integrated coal gasification demonstration project.
Sec. 414. Coal gasification.
Sec. 415. Petroleum coke gasification.
Sec. 416. Electron scrubbing demonstration.
Sec. 417. Department of Energy transportation fuels from Illinois basin 
           coal.

                  Subtitle C--Coal and Related Programs

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

                     Subtitle D--Federal Coal Leases

Sec. 431. Short title.
Sec. 432. Repeal of the 160-acre limitation for coal leases.
Sec. 433. Approval of logical mining units.
Sec. 434. Payment of advance royalties under coal leases.
Sec. 435. Elimination of deadline for submission of coal lease operation 
           and reclamation plan.
Sec. 436. Amendment relating to financial assurances with respect to 
           bonus bids.
Sec. 437. Inventory requirement.
Sec. 438. Application of amendments.

                         TITLE V--INDIAN ENERGY

Sec. 501. Short title.
Sec. 502. Office of Indian Energy Policy and Programs.
Sec. 503. Indian energy.
Sec. 504. Consultation with Indian tribes.
Sec. 505. Four Corners transmission line project and electrification.
Sec. 506. Energy efficiency in federally assisted housing.

                        TITLE VI--NUCLEAR MATTERS

                Subtitle A--Price-Anderson Act Amendments

Sec. 601. Short title.
Sec. 602. Extension of indemnification authority.
Sec. 603. Maximum assessment.
Sec. 604. Department liability limit.
Sec. 605. Incidents outside the United States.
Sec. 606. Reports.
Sec. 607. Inflation adjustment.
Sec. 608. Treatment of modular reactors.
Sec. 609. Applicability.
Sec. 610. Civil penalties.

                   Subtitle B--General Nuclear Matters

Sec. 621. Licenses.
Sec. 622. Nuclear Regulatory Commission scholarship and fellowship 
           program.
Sec. 623. Cost recovery from Government agencies.
Sec. 624. Elimination of pension offset for certain rehired Federal 
           retirees.
Sec. 625. Antitrust review.
Sec. 626. Decommissioning.
Sec. 627. Limitation on legal fee reimbursement.
Sec. 628. Decommissioning pilot program.
Sec. 629. Whistleblower protection.
Sec. 630. Medical isotope production.
Sec. 631. Safe disposal of greater-than-Class C radioactive waste.
Sec. 632. Prohibition on nuclear exports to countries that sponsor 
           terrorism.
Sec. 633. Employee benefits.
Sec. 634. Demonstration hydrogen production at existing nuclear power 
           plants.
Sec. 635. Prohibition on assumption by United States Government of 
           liability for certain foreign incidents.
Sec. 636. Authorization of appropriations.
Sec. 637. Nuclear Regulatory Commission user fees and annual charges.
Sec. 638. Standby support for certain nuclear plant delays.
Sec. 639. Conflicts of interest relating to contracts and other 
           arrangements.

[[Page 119 STAT. 598]]

            Subtitle C--Next Generation Nuclear Plant Project

Sec. 641. Project establishment.
Sec. 642. Project management.
Sec. 643. Project organization.
Sec. 644. Nuclear Regulatory Commission.
Sec. 645. Project timelines and authorization of appropriations.

                      Subtitle D--Nuclear Security

Sec. 651. Nuclear facility and materials security.
Sec. 652. Fingerprinting and criminal history record checks.
Sec. 653. Use of firearms by security personnel.
Sec. 654. Unauthorized introduction of dangerous weapons.
Sec. 655. Sabotage of nuclear facilities, fuel, or designated material.
Sec. 656. Secure transfer of nuclear materials.
Sec. 657. Department of Homeland Security consultation.

                      TITLE VII--VEHICLES AND FUELS

                      Subtitle A--Existing Programs

Sec. 701. Use of alternative fuels by dual fueled vehicles.
Sec. 702. Incremental cost allocation.
Sec. 703. Alternative compliance and flexibility.
Sec. 704. Review of Energy Policy Act of 1992 programs.
Sec. 705. Report concerning compliance with alternative fueled vehicle 
           purchasing requirements.
Sec. 706. Joint flexible fuel/hybrid vehicle commercialization 
           initiative.
Sec. 707. Emergency exemption.

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

                         Part 1--Hybrid Vehicles

Sec. 711. Hybrid vehicles.
Sec. 712. Efficient hybrid and advanced diesel vehicles.

                        Part 2--Advanced Vehicles

Sec. 721. Pilot program.
Sec. 722. Reports to Congress.
Sec. 723. Authorization of appropriations.

                         Part 3--Fuel Cell Buses

Sec. 731. Fuel cell transit bus demonstration.

                     Subtitle C--Clean School Buses

Sec. 741. Clean school bus program.
Sec. 742. Diesel truck retrofit and fleet modernization program.
Sec. 743. Fuel cell school buses.

                        Subtitle D--Miscellaneous

Sec. 751. Railroad efficiency.
Sec. 752. Mobile emission reductions trading and crediting.
Sec. 753. Aviation fuel conservation and emissions.
Sec. 754. Diesel fueled vehicles.
Sec. 755. Conserve by Bicycling Program.
Sec. 756. Reduction of engine idling.
Sec. 757. Biodiesel engine testing program.
Sec. 758. Ultra-efficient engine technology for aircraft.
Sec. 759. Fuel economy incentive requirements.

                    Subtitle E--Automobile Efficiency

Sec. 771. Authorization of appropriations for implementation and 
           enforcement of fuel economy standards.
Sec. 772. Extension of maximum fuel economy increase for alternative 
           fueled vehicles.
Sec. 773. Study of feasibility and effects of reducing use of fuel for 
           automobiles.
Sec. 774. Update testing procedures.

                Subtitle F--Federal and State Procurement

Sec. 781. Definitions.
Sec. 782. Federal and State procurement of fuel cell vehicles and 
           hydrogen energy systems.

[[Page 119 STAT. 599]]

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

                 Subtitle G--Diesel Emissions Reduction

Sec. 791. Definitions.
Sec. 792. National grant and loan programs.
Sec. 793. State grant and loan programs.
Sec. 794. Evaluation and report.
Sec. 795. Outreach and incentives.
Sec. 796. Effect of subtitle.
Sec. 797. Authorization of appropriations.

                          TITLE VIII--HYDROGEN

Sec. 801. Hydrogen and fuel cell program.
Sec. 802. Purposes.
Sec. 803. Definitions.
Sec. 804. Plan.
Sec. 805. Programs.
Sec. 806. Hydrogen and Fuel Cell Technical Task Force.
Sec. 807. Technical Advisory Committee.
Sec. 808. Demonstration.
Sec. 809. Codes and standards.
Sec. 810. Disclosure.
Sec. 811. Reports.
Sec. 812. Solar and wind technologies.
Sec. 813. Technology transfer.
Sec. 814. Miscellaneous provisions.
Sec. 815. Cost sharing.
Sec. 816. Savings clause.

                   TITLE IX--RESEARCH AND DEVELOPMENT

Sec. 901. Short title.
Sec. 902. Goals.
Sec. 903. Definitions.

                      Subtitle A--Energy Efficiency

Sec. 911. Energy efficiency.
Sec. 912. Next Generation Lighting Initiative.
Sec. 913. National Building Performance Initiative.
Sec. 914. Building standards.
Sec. 915. Secondary electric vehicle battery use program.
Sec. 916. Energy Efficiency Science Initiative.
Sec. 917. Advanced Energy Efficiency Technology Transfer Centers.

       Subtitle B--Distributed Energy and Electric Energy Systems

Sec. 921. Distributed energy and electric energy systems.
Sec. 922. High power density industry program.
Sec. 923. Micro-cogeneration energy technology.
Sec. 924. Distributed energy technology demonstration programs.
Sec. 925. Electric transmission and distribution programs.

                      Subtitle C--Renewable Energy

Sec. 931. Renewable energy.
Sec. 932. Bioenergy program.
Sec. 933. Low-cost renewable hydrogen and infrastructure for vehicle 
           propulsion.
Sec. 934. Concentrating solar power research program.
Sec. 935. Renewable energy in public buildings.

   Subtitle D--Agricultural Biomass Research and Development Programs

Sec. 941. Amendments to the Biomass Research and Development Act of 
           2000.
Sec. 942. Production incentives for cellulosic biofuels.
Sec. 943. Procurement of biobased products.
Sec. 944. Small business bioproduct marketing and certification grants.
Sec. 945. Regional bioeconomy development grants.
Sec. 946. Preprocessing and harvesting demonstration grants.
Sec. 947. Education and outreach.
Sec. 948. Reports.

                       Subtitle E--Nuclear Energy

Sec. 951. Nuclear energy.
Sec. 952. Nuclear energy research programs.

[[Page 119 STAT. 600]]

Sec. 953. Advanced fuel cycle initiative.
Sec. 954. University nuclear science and engineering support.
Sec. 955. Department of Energy civilian nuclear infrastructure and 
           facilities.
Sec. 956. Security of nuclear facilities.
Sec. 957. Alternatives to industrial radioactive sources.

                        Subtitle F--Fossil Energy

Sec. 961. Fossil energy.
Sec. 962. Coal and related technologies program.
Sec. 963. Carbon capture research and development program.
Sec. 964. Research and development for coal mining technologies.
Sec. 965. Oil and gas research programs.
Sec. 966. Low-volume oil and gas reservoir research program.
Sec. 967. Complex well technology testing facility.
Sec. 968. Methane hydrate research.

                           Subtitle G--Science

Sec. 971. Science.
Sec. 972. Fusion energy sciences program.
Sec. 973. Catalysis research program.
Sec. 974. Hydrogen.
Sec. 975. Solid state lighting.
Sec. 976. Advanced scientific computing for energy missions.
Sec. 977. Systems biology program.
Sec. 978. Fission and fusion energy materials research program.
Sec. 979. Energy and water supplies.
Sec. 980. Spallation Neutron Source.
Sec. 981. Rare isotope accelerator.
Sec. 982. Office of Scientific and Technical Information.
Sec. 983. Science and engineering education pilot program.
Sec. 984. Energy research fellowships.
Sec. 984A. Science and technology scholarship program.

                  Subtitle H--International Cooperation

Sec. 985. Western Hemisphere energy cooperation.
Sec. 986. Cooperation between United States and Israel.
Sec. 986A. International energy training.

           Subtitle I--Research Administration and Operations

Sec. 987. Availability of funds.
Sec. 988. Cost sharing.
Sec. 989. Merit review of proposals.
Sec. 990. External technical review of Departmental programs.
Sec. 991. National Laboratory designation.
Sec. 992. Report on equal employment opportunity practices.
Sec. 993. Strategy and plan for science and energy facilities and 
           infrastructure.
Sec. 994. Strategic research portfolio analysis and coordination plan.
Sec. 995. Competitive award of management contracts.
Sec. 996. Western Michigan demonstration project.
Sec. 997. Arctic Engineering Research Center.
Sec. 998. Barrow Geophysical Research Facility.

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

Sec. 999A. Program authority.
Sec. 999B. Ultra-deepwater and unconventional onshore natural gas and 
           other petroleum research and development program.
Sec. 999C. Additional requirements for awards.
Sec. 999D. Advisory committees.
Sec. 999E. Limits on participation.
Sec. 999F. Sunset.
Sec. 999G. Definitions.
Sec. 999H. Funding.

                TITLE X--DEPARTMENT OF ENERGY MANAGEMENT

Sec. 1001. Improved technology transfer of energy technologies.
Sec. 1002. Technology Infrastructure Program.
Sec. 1003. Small business advocacy and assistance.
Sec. 1004. Outreach.
Sec. 1005. Relationship to other laws.

[[Page 119 STAT. 601]]

Sec. 1006. Improved coordination and management of civilian science and 
           technology programs.
Sec. 1007. Other transactions authority.
Sec. 1008. Prizes for achievement in grand challenges of science and 
           technology.
Sec. 1009. Technical corrections.
Sec. 1010. University collaboration.
Sec. 1011. Sense of Congress.

                    TITLE XI--PERSONNEL AND TRAINING

Sec. 1101. Workforce trends and traineeship grants.
Sec. 1102. Educational programs in science and mathematics.
Sec. 1103. Training guidelines for nonnuclear electric energy industry 
           personnel.
Sec. 1104. National Center for Energy Management and Building 
           Technologies.
Sec. 1105. Improved access to energy-related scientific and technical 
           careers.
Sec. 1106. National Power Plant Operations Technology and Educational 
           Center.

                         TITLE XII--ELECTRICITY

Sec. 1201. Short title.

                    Subtitle A--Reliability Standards

Sec. 1211. Electric reliability standards.

          Subtitle B--Transmission Infrastructure Modernization

Sec. 1221. Siting of interstate electric transmission facilities.
Sec. 1222. Third-party finance.
Sec. 1223. Advanced transmission technologies.
Sec. 1224. Advanced Power System Technology Incentive Program.

             Subtitle C--Transmission Operation Improvements

Sec. 1231. Open nondiscriminatory access.
Sec. 1232. Federal utility participation in Transmission Organizations.
Sec. 1233. Native load service obligation.
Sec. 1234. Study on the benefits of economic dispatch.
Sec. 1235. Protection of transmission contracts in the Pacific 
           Northwest.
Sec. 1236. Sense of Congress regarding locational installed capacity 
           mechanism.

                  Subtitle D--Transmission Rate Reform

Sec. 1241. Transmission infrastructure investment.
Sec. 1242. Funding new interconnection and transmission upgrades.

                     Subtitle E--Amendments to PURPA

Sec. 1251. Net metering and additional standards.
Sec. 1252. Smart metering.
Sec. 1253. Cogeneration and small power production purchase and sale 
           requirements.
Sec. 1254. Interconnection.

                       Subtitle F--Repeal of PUHCA

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

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

Sec. 1281. Electricity market transparency.
Sec. 1282. False statements.

[[Page 119 STAT. 602]]

Sec. 1283. Market manipulation.
Sec. 1284. Enforcement.
Sec. 1285. Refund effective date.
Sec. 1286. Refund authority.
Sec. 1287. Consumer privacy and unfair trade practices.
Sec. 1288. Authority of court to prohibit individuals from serving as 
           officers, directors, and energy traders.
Sec. 1289. Merger review reform.
Sec. 1290. Relief for extraordinary violations.

                         Subtitle H--Definitions

Sec. 1291. Definitions.

             Subtitle I--Technical and Conforming Amendments

Sec. 1295. Conforming amendments.

                      Subtitle J--Economic Dispatch

Sec. 1298. Economic dispatch.

                TITLE XIII--ENERGY POLICY TAX INCENTIVES

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

                 Subtitle A--Electricity Infrastructure

Sec. 1301. Extension and modification of renewable electricity 
           production credit.
Sec. 1302. Application of section 45 credit to agricultural 
           cooperatives.
Sec. 1303. Clean renewable energy bonds.
Sec. 1304. Treatment of income of certain electric cooperatives.
Sec. 1305. Dispositions of transmission property to implement FERC 
           restructuring policy.
Sec. 1306. Credit for production from advanced nuclear power facilities.
Sec. 1307. Credit for investment in clean coal facilities.
Sec. 1308. Electric transmission property treated as 15-year property.
Sec. 1309. Expansion of amortization for certain atmospheric pollution 
           control facilities in connection with plants first placed in 
           service after 1975.
Sec. 1310. Modifications to special rules for nuclear decommissioning 
           costs.
Sec. 1311. Five-year net operating loss carryover for certain losses.

                Subtitle B--Domestic Fossil Fuel Security

Sec. 1321. Extension of credit for producing fuel from a nonconventional 
           source for facilities producing coke or coke gas.
Sec. 1322. Modification of credit for producing fuel from a 
           nonconventional source.
Sec. 1323. Temporary expensing for equipment used in refining of liquid 
           fuels.
Sec. 1324. Pass through to owners of deduction for capital costs 
           incurred by small refiner cooperatives in complying with 
           Environmental Protection Agency sulfur regulations.
Sec. 1325. Natural gas distribution lines treated as 15-year property.
Sec. 1326. Natural gas gathering lines treated as 7-year property.
Sec. 1327. Arbitrage rules not to apply to prepayments for natural gas.
Sec. 1328. Determination of small refiner exception to oil depletion 
           deduction.
Sec. 1329. Amortization of geological and geophysical expenditures.

        Subtitle C--Conservation and Energy Efficiency Provisions

Sec. 1331. Energy efficient commercial buildings deduction.
Sec. 1332. Credit for construction of new energy efficient homes.
Sec. 1333. Credit for certain nonbusiness energy property.
Sec. 1334. Credit for energy efficient appliances.
Sec. 1335. Credit for residential energy efficient property.
Sec. 1336. Credit for business installation of qualified fuel cells and 
           stationary microturbine power plants.
Sec. 1337. Business solar investment tax credit.

       Subtitle D--Alternative Motor Vehicles and Fuels Incentives

Sec. 1341. Alternative motor vehicle credit.
Sec. 1342. Credit for installation of alternative fueling stations.
Sec. 1343. Reduced motor fuel excise tax on certain mixtures of diesel 
           fuel.
Sec. 1344. Extension of excise tax provisions and income tax credit for 
           biodiesel.
Sec. 1345. Small agri-biodiesel producer credit.
Sec. 1346. Renewable diesel.
Sec. 1347. Modification of small ethanol producer credit.
Sec. 1348. Sunset of deduction for clean-fuel vehicles and certain 
           refueling property.

[[Page 119 STAT. 603]]

              Subtitle E--Additional Energy Tax Incentives

Sec. 1351. Expansion of research credit.
Sec. 1352. National Academy of Sciences study and report.
Sec. 1353. Recycling study.

                 Subtitle F--Revenue Raising Provisions

Sec. 1361. Oil Spill Liability Trust Fund financing rate.
Sec. 1362. Extension of Leaking Underground Storage Tank Trust Fund 
           financing rate.
Sec. 1363. Modification of recapture rules for amortizable section 197 
           intangibles.
Sec. 1364. Clarification of tire excise tax.

                        TITLE XIV--MISCELLANEOUS

                         Subtitle A--In General

Sec. 1401. Sense of Congress on risk assessments.
Sec. 1402. Energy production incentives.
Sec. 1403. Regulation of certain oil used in transformers.
Sec. 1404. Petrochemical and oil refinery facility health assessment.
Sec. 1405. National Priority Project Designation.
Sec. 1406. Cold cracking.
Sec. 1407. Oxygen-fuel.

                      Subtitle B--Set America Free

Sec. 1421. Short title.
Sec. 1422. Purpose.
Sec. 1423. United States Commission on North American Energy Freedom.
Sec. 1424. North American energy freedom policy.

                    TITLE XV--ETHANOL AND MOTOR FUELS

                     Subtitle A--General Provisions

Sec. 1501. Renewable content of gasoline.
Sec. 1502. Findings.
Sec. 1503. Claims filed after enactment.
Sec. 1504. Elimination of oxygen content requirement for reformulated 
           gasoline.
Sec. 1505. Public health and environmental impacts of fuels and fuel 
           additives.
Sec. 1506. Analyses of motor vehicle fuel changes.
Sec. 1507. Additional opt-in areas under reformulated gasoline program.
Sec. 1508. Data collection.
Sec. 1509. Fuel system requirements harmonization study.
Sec. 1510. Commercial byproducts from municipal solid waste and 
           cellulosic biomass loan guarantee program.
Sec. 1511. Renewable fuel.
Sec. 1512. Conversion assistance for cellulosic biomass, waste-derived 
           ethanol, approved renewable fuels.
Sec. 1513. Blending of compliant reformulated gasolines.
Sec. 1514. Advanced biofuel technologies program.
Sec. 1515. Waste-derived ethanol and biodiesel.
Sec. 1516. Sugar ethanol loan guarantee program.

             Subtitle B--Underground Storage Tank Compliance

Sec. 1521. Short title.
Sec. 1522. Leaking underground storage tanks.
Sec. 1523. Inspection of underground storage tanks.
Sec. 1524. Operator training.
Sec. 1525. Remediation from oxygenated fuel additives.
Sec. 1526. Release prevention, compliance, and enforcement.
Sec. 1527. Delivery prohibition.
Sec. 1528. Federal facilities.
Sec. 1529. Tanks on tribal lands.
Sec. 1530. Additional measures to protect groundwater.
Sec. 1531. Authorization of appropriations.
Sec. 1532. Conforming amendments.
Sec. 1533. Technical amendments.

                       Subtitle C--Boutique Fuels

Sec. 1541. Reducing the proliferation of boutique fuels.

                        TITLE XVI--CLIMATE CHANGE

        Subtitle A--National Climate Change Technology Deployment

Sec. 1601. Greenhouse gas intensity reducing technology strategies.

[[Page 119 STAT. 604]]

Subtitle B--Climate Change Technology Deployment in Developing Countries

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

           TITLE XVII--INCENTIVES FOR INNOVATIVE TECHNOLOGIES

Sec. 1701. Definitions.
Sec. 1702. Terms and conditions.
Sec. 1703. Eligible projects.
Sec. 1704. Authorization of appropriations.

                          TITLE XVIII--STUDIES

Sec. 1801. Study on inventory of petroleum and natural gas storage.
Sec. 1802. Study of energy efficiency standards.
Sec. 1803. Telecommuting study.
Sec. 1804. LIHEAP Report.
Sec. 1805. Oil bypass filtration technology.
Sec. 1806. Total integrated thermal systems.
Sec. 1807. Report on energy integration with Latin America.
Sec. 1808. Low-volume gas reservoir study.
Sec. 1809. Investigation of gasoline prices.
Sec. 1810. Alaska natural gas pipeline.
Sec. 1811. Coal bed methane study.
Sec. 1812. Backup fuel capability study.
Sec. 1813. Indian land rights-of-way.
Sec. 1814. Mobility of scientific and technical personnel.
Sec. 1815. Interagency review of competition in the wholesale and retail 
           markets for electric energy.
Sec. 1816. Study of rapid electrical grid restoration.
Sec. 1817. Study of distributed generation.
Sec. 1818. Natural gas supply shortage report.
Sec. 1819. Hydrogen participation study.
Sec. 1820. Overall employment in a hydrogen economy.
Sec. 1821. Study of best management practices for energy research and 
           development programs.
Sec. 1822. Effect of electrical contaminants on reliability of energy 
           production systems.
Sec. 1823. Alternative fuels reports.
Sec. 1824. Final action on refunds for excessive charges.
Sec. 1825. Fuel cell and hydrogen technology study.
Sec. 1826. Passive solar technologies.
Sec. 1827. Study of link between energy security and increases in 
           vehicle miles traveled.
Sec. 1828. Science study on cumulative impacts of multiple offshore 
           liquefied natural gas facilities.
Sec. 1829. Energy and water saving measures in congressional buildings.
Sec. 1830. Study of availability of skilled workers.
Sec. 1831. Review of Energy Policy Act of 1992 programs.
Sec. 1832. Study on the benefits of economic dispatch.
Sec. 1833. Renewable energy on Federal land.
Sec. 1834. Increased hydroelectric generation at existing Federal 
           facilities.
Sec. 1835. Split-estate Federal oil and gas leasing and development 
           practices.
Sec. 1836. Resolution of Federal resource development conflicts in the 
           Powder River Basin.
Sec. 1837. National security review of international energy 
           requirements.
Sec. 1838. Used oil re-refining study.
Sec. 1839. Transmission system monitoring.
Sec. 1840. Report identifying and describing the status of potential 
           hydropower facilities.

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

    Except as otherwise provided, in this Act:
            (1) Department.--The term ``Department'' means the 
        Department of Energy.
            (2) Institution of higher education.--
                    (A) In general.--The term ``institution of higher 
                education'' has the meaning given the term in section 
                101(a) of the Higher Education Act of 1065 (20 U.S.C. 
                1001(a)).
                    (B) Inclusion.--The term ``institution of higher 
                education'' includes an organization that--

[[Page 119 STAT. 605]]

                          (i) is organized, and at all times thereafter 
                      operated, exclusively for the benefit of, to 
                      perform the functions of, or to carry out the 
                      functions of one or more organizations referred to 
                      in subparagraph (A); and
                          (ii) is operated, supervised, or controlled by 
                      or in connection with one or more of those 
                      organizations.
            (3) National laboratory.--The term ``National Laboratory'' 
        means any of the following laboratories owned by the Department:
                    (A) Ames Laboratory.
                    (B) Argonne National Laboratory.
                    (C) Brookhaven National Laboratory.
                    (D) Fermi National Accelerator Laboratory.
                    (E) Idaho National Laboratory.
                    (F) Lawrence Berkeley National Laboratory.
                    (G) Lawrence Livermore National Laboratory.
                    (H) Los Alamos National Laboratory.
                    (I) National Energy Technology Laboratory.
                    (J) National Renewable Energy Laboratory.
                    (K) Oak Ridge National Laboratory.
                    (L) Pacific Northwest National Laboratory.
                    (M) Princeton Plasma Physics Laboratory.
                    (N) Sandia National Laboratories.
                    (O) Savannah River National Laboratory.
                    (P) Stanford Linear Accelerator Center.
                    (Q) Thomas Jefferson National Accelerator Facility.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (5) Small business concern.--The term ``small business 
        concern'' has the meaning given the term in section 3 of the 
        Small Business Act (15 U.S.C. 632).

                       TITLE I--ENERGY EFFICIENCY

                      Subtitle A--Federal Programs

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

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

``SEC. 552. <<NOTE: 42 USC 8259a.>> ENERGY AND WATER SAVINGS MEASURES IN 
            CONGRESSIONAL BUILDINGS.

    ``(a) In General.--The Architect of the Capitol--
            ``(1) shall develop, update, and implement a cost-effective 
        energy conservation and management plan (referred to in this 
        section as the `plan') for all facilities administered by 
        Congress (referred to in this section as `congressional 
        buildings') to meet the energy performance requirements for 
        Federal buildings established under section 543(a)(1); and
            ``(2) <<NOTE: Deadline.>> shall submit the plan to Congress, 
        not later than 180 days after the date of enactment of this 
        section.

    ``(b) Plan Requirements.--The plan shall include--

[[Page 119 STAT. 606]]

            ``(1) a description of the life cycle cost analysis used to 
        determine the cost-effectiveness of proposed energy efficiency 
        projects;
            ``(2) a schedule of energy surveys to ensure complete 
        surveys of all congressional buildings every 5 years to 
        determine the cost and payback period of energy and water 
        conservation measures;
            ``(3) a strategy for installation of life cycle cost-
        effective energy and water conservation measures;
            ``(4) the results of a study of the costs and benefits of 
        installation of submetering in congressional buildings; and
            ``(5) information packages and `how-to' guides for each 
        Member and employing authority of Congress that detail simple, 
        cost-effective methods to save energy and taxpayer dollars in 
        the workplace.

    ``(c) Annual Report.--The Architect of the Capitol shall submit to 
Congress annually a report on congressional energy management and 
conservation programs required under this section that describes in 
detail--
            ``(1) energy expenditures and savings estimates for each 
        facility;
            ``(2) energy management and conservation projects; and
            ``(3) future priorities to ensure compliance with this 
        section.''.

    (b) Table of Contents Amendment.--The table of contents of the 
National Energy Conservation Policy Act is amended by adding at the end 
of the items relating to part 3 of title V the following new item:

``Sec. 552. Energy and water savings measures in congressional 
           buildings.''.

    (c) Repeal.--Section 310 of the Legislative Branch Appropriations 
Act, 1999 (2 U.S.C. 1815), is repealed.

SEC. 102. ENERGY MANAGEMENT REQUIREMENTS.

    (a) Energy Reduction Goals.--
            (1) Amendment.--Section 543(a)(1) of the National Energy 
        Conservation Policy Act (42 U.S.C. 8253(a)(1)) is amended by 
        striking ``its Federal buildings so that'' and all that follows 
        through the end and inserting ``the Federal buildings of the 
        agency (including each industrial or laboratory facility) so 
        that the energy consumption per gross square foot of the Federal 
        buildings of the agency in fiscal years 2006 through 2015 is 
        reduced, as compared with the energy consumption per gross 
        square foot of the Federal buildings of the agency in fiscal 
        year 2003, by the percentage specified in the following table:

      ``Fiscal Year           Percentage reduction......................
                    2006........................................     2  
                    2007........................................     4  
                    2008........................................     6  
                    2009........................................     8  
                    2010........................................    10  
                    2011........................................    12  
                    2012........................................    14  
                    2013........................................    16  
                    2014........................................    18  
                    2015........................................  20.''.

            (2) Reporting baseline.--The <<NOTE: 42 USC 8253 
        note.>> energy reduction goals and baseline established in 
        paragraph (1) of section 543(a) of the

[[Page 119 STAT. 607]]

        National Energy Conservation Policy Act (42 U.S.C. 8253(a)(1)), 
        as amended by this subsection, supersede all previous goals and 
        baselines under such paragraph, and related reporting 
        requirements.

    (b) Review and Revision of Energy Performance Requirement.--Section 
543(a) of the National Energy Conservation Policy Act (42 U.S.C. 
8253(a)) is further amended by adding at the end the following:
    ``(3) <<NOTE: Deadline.>> Not later than December 31, 2014, the 
Secretary shall review the results of the implementation of the energy 
performance requirement established under paragraph (1) and submit to 
Congress recommendations concerning energy performance requirements for 
fiscal years 2016 through 2025.''.

    (c) Exclusions.--Section 543(c)(1) of the National Energy 
Conservation Policy Act (42 U.S.C. 8253(c)(1)) is amended by striking 
``An agency may exclude'' and all that follows through the end and 
inserting ``(A) An agency may exclude, from the energy performance 
requirement for a fiscal year established under subsection (a) and the 
energy management requirement established under subsection (b), any 
Federal building or collection of Federal buildings, if the head of the 
agency finds that--
            ``(i) compliance with those requirements would be 
        impracticable;
            ``(ii) the agency has completed and submitted all federally 
        required energy management reports;
            ``(iii) the agency has achieved compliance with the energy 
        efficiency requirements of this Act, the Energy Policy Act of 
        1992, Executive orders, and other Federal law; and
            ``(iv) the agency has implemented all practicable, life 
        cycle cost-effective projects with respect to the Federal 
        building or collection of Federal buildings to be excluded.

    ``(B) A finding of impracticability under subparagraph (A)(i) shall 
be based on--
            ``(i) the energy intensiveness of activities carried out in 
        the Federal building or collection of Federal buildings; or
            ``(ii) the fact that the Federal building or collection of 
        Federal buildings is used in the performance of a national 
        security function.''.

    (d) Review by Secretary.--Section 543(c)(2) of the National Energy 
Conservation Policy Act (42 U.S.C. 8253(c)(2)) is amended--
            (1) by striking ``impracticability standards'' and inserting 
        ``standards for exclusion'';
            (2) by striking ``a finding of impracticability'' and 
        inserting ``the exclusion''; and
            (3) by striking ``energy consumption requirements'' and 
        inserting ``requirements of subsections (a) and (b)(1)''.

    (e) Criteria.--Section 543(c) of the National Energy Conservation 
Policy Act (42 U.S.C. 8253(c)) is further amended by adding at the end 
the following:
    ``(3) <<NOTE: Deadline. Guidelines.>> Not later than 180 days after 
the date of enactment of this paragraph, the Secretary shall issue 
guidelines that establish criteria for exclusions under paragraph 
(1).''.

    (f) Retention of Energy and Water Savings.--Section 546 of the 
National Energy Conservation Policy Act (42 U.S.C. 8256) is amended by 
adding at the end the following new subsection:
    ``(e) Retention of Energy and Water Savings.--An agency may retain 
any funds appropriated to that agency for energy

[[Page 119 STAT. 608]]

expenditures, water expenditures, or wastewater treatment expenditures, 
at buildings subject to the requirements of section 543(a) and (b), that 
are not made because of energy savings or water savings. Except as 
otherwise provided by law, such funds may be used only for energy 
efficiency, water conservation, or unconventional and renewable energy 
resources projects. Such projects shall be subject to the requirements 
of section 3307 of title 40, United States Code.''.
    (g) Reports.--Section 548(b) of the National Energy Conservation 
Policy Act (42 U.S.C. 8258(b)) is amended--
            (1) in the subsection heading, by inserting ``the President 
        and'' before ``Congress''; and
            (2) by inserting ``President and'' before ``Congress''.

    (h) Conforming Amendment.--Section 550(d) of the National Energy 
Conservation Policy Act (42 U.S.C. 8258b(d)) is amended in the second 
sentence by striking ``the 20 percent reduction goal established under 
section 543(a) of the National Energy Conservation Policy Act (42 U.S.C. 
8253(a)).'' and inserting ``each of the energy reduction goals 
established under section 543(a).''.

SEC. 103. ENERGY USE MEASUREMENT AND ACCOUNTABILITY.

    Section 543 of the National Energy Conservation Policy Act (42 
U.S.C. 8253) is further amended by adding at the end the following:
    ``(e) Metering of Energy Use.--
            ``(1) Deadline.--By October 1, 2012, in accordance with 
        guidelines established by the Secretary under paragraph (2), all 
        Federal buildings shall, for the purposes of efficient use of 
        energy and reduction in the cost of electricity used in such 
        buildings, be metered. Each agency shall use, to the maximum 
        extent practicable, advanced meters or advanced metering devices 
        that provide data at least daily and that measure at least 
        hourly consumption of electricity in the Federal buildings of 
        the agency. Such data shall be incorporated into existing 
        Federal energy tracking systems and made available to Federal 
        facility managers.
            ``(2) Guidelines.--
                    ``(A) In general.--Not <<NOTE: Deadline.>> later 
                than 180 days after the date of enactment of this 
                subsection, the Secretary, in consultation with the 
                Department of Defense, the General Services 
                Administration, representatives from the metering 
                industry, utility industry, energy services industry, 
                energy efficiency industry, energy efficiency advocacy 
                organizations, national laboratories, universities, and 
                Federal facility managers, shall establish guidelines 
                for agencies to carry out paragraph (1).
                    ``(B) Requirements for guidelines.--The guidelines 
                shall--
                          ``(i) take into consideration--
                                    ``(I) the cost of metering and the 
                                reduced cost of operation and 
                                maintenance expected to result from 
                                metering;
                                    ``(II) the extent to which metering 
                                is expected to result in increased 
                                potential for energy management, 
                                increased potential for energy savings 
                                and energy efficiency improvement, and 
                                cost and

[[Page 119 STAT. 609]]

                                energy savings due to utility contract 
                                aggregation; and
                                    ``(III) the measurement and 
                                verification protocols of the Department 
                                of Energy;
                          ``(ii) include recommendations concerning the 
                      amount of funds and the number of trained 
                      personnel necessary to gather and use the metering 
                      information to track and reduce energy use;
                          ``(iii) establish priorities for types and 
                      locations of buildings to be metered based on 
                      cost-effectiveness and a schedule of one or more 
                      dates, not later than 1 year after the date of 
                      issuance of the guidelines, on which the 
                      requirements specified in paragraph (1) shall take 
                      effect; and
                          ``(iv) establish exclusions from the 
                      requirements specified in paragraph (1) based on 
                      the de minimis quantity of energy use of a Federal 
                      building, industrial process, or structure.
            ``(3) Plan.--Not <<NOTE: Deadline.>> later than 6 months 
        after the date guidelines are established under paragraph (2), 
        in a report submitted by the agency under section 548(a), each 
        agency shall submit to the Secretary a plan describing how the 
        agency will implement the requirements of paragraph (1), 
        including (A) how the agency will designate personnel primarily 
        responsible for achieving the requirements and (B) demonstration 
        by the agency, complete with documentation, of any finding that 
        advanced meters or advanced metering devices, as defined in 
        paragraph (1), are not practicable.''.

SEC. 104. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

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

``SEC. 553. <<NOTE: 42 USC 8259b.>> FEDERAL PROCUREMENT OF ENERGY 
            EFFICIENT PRODUCTS.

    ``(a) Definitions.--In this section:
            ``(1) Agency.--The term `agency' has the meaning given that 
        term in section 7902(a) of title 5, United States Code.
            ``(2) Energy star product.--The term `Energy Star product' 
        means a product that is rated for energy efficiency under an 
        Energy Star program.
            ``(3) Energy star program.--The term `Energy Star program' 
        means the program established by section 324A of the Energy 
        Policy and Conservation Act.
            ``(4) FEMP designated product.--The term `FEMP designated 
        product' means a product that is designated under the Federal 
        Energy Management Program of the Department of Energy as being 
        among the highest 25 percent of equivalent products for energy 
        efficiency.
            ``(5) Product.--The term `product' does not include any 
        energy consuming product or system designed or procured for 
        combat or combat-related missions.

    ``(b) Procurement of Energy Efficient Products.--
            ``(1) Requirement.--To meet the requirements of an agency 
        for an energy consuming product, the head of the agency shall, 
        except as provided in paragraph (2), procure--
                    ``(A) an Energy Star product; or

[[Page 119 STAT. 610]]

                    ``(B) a FEMP designated product.
            ``(2) Exceptions.--The head of an agency is not required to 
        procure an Energy Star product or FEMP designated product under 
        paragraph (1) if the head of the agency finds in writing that--
                    ``(A) an Energy Star product or FEMP designated 
                product is not cost-effective over the life of the 
                product taking energy cost savings into account; or
                    ``(B) no Energy Star product or FEMP designated 
                product is reasonably available that meets the 
                functional requirements of the agency.
            ``(3) Procurement planning.--The head of an agency shall 
        incorporate into the specifications for all procurements 
        involving energy consuming products and systems, including guide 
        specifications, project specifications, and construction, 
        renovation, and services contracts that include provision of 
        energy consuming products and systems, and into the factors for 
        the evaluation of offers received for the procurement, criteria 
        for energy efficiency that are consistent with the criteria used 
        for rating Energy Star products and for rating FEMP designated 
        products.

    ``(c) Listing of Energy Efficient Products in Federal Catalogs.--
Energy Star products and FEMP designated products shall be clearly 
identified and prominently displayed in any inventory or listing of 
products by the General Services Administration or the Defense Logistics 
Agency. The General Services Administration or the Defense Logistics 
Agency shall supply only Energy Star products or FEMP designated 
products for all product categories covered by the Energy Star program 
or the Federal Energy Management Program, except in cases where the 
agency ordering a product specifies in writing that no Energy Star 
product or FEMP designated product is available to meet the buyer's 
functional requirements, or that no Energy Star product or FEMP 
designated product is cost-effective for the intended application over 
the life of the product, taking energy cost savings into account.
    ``(d) Specific Products.--(1) In <<NOTE: Standards.>> the case of 
electric motors of 1 to 500 horsepower, agencies shall select only 
premium efficient motors that meet a standard designated by 
the <<NOTE: Deadline.>> Secretary. The Secretary shall designate such a 
standard not later than 120 days after the date of the enactment of this 
section, after considering the recommendations of associated electric 
motor manufacturers and energy efficiency groups.

    ``(2) All Federal agencies are encouraged to take actions to 
maximize the efficiency of air conditioning and refrigeration equipment, 
including appropriate cleaning and maintenance, including the use of any 
system treatment or additive that will reduce the electricity consumed 
by air conditioning and refrigeration equipment. Any such treatment or 
additive must be--
            ``(A) determined by the Secretary to be effective in 
        increasing the efficiency of air conditioning and refrigeration 
        equipment without having an adverse impact on air conditioning 
        performance (including cooling capacity) or equipment useful 
        life;
            ``(B) determined by the Administrator of the Environmental 
        Protection Agency to be environmentally safe; and
            ``(C) shown to increase seasonal energy efficiency ratio 
        (SEER) or energy efficiency ratio (EER) when tested by the

[[Page 119 STAT. 611]]

        National Institute of Standards and Technology according to 
        Department of Energy test procedures without causing any adverse 
        impact on the system, system components, the refrigerant or 
        lubricant, or other materials in the system.
        Results of <<NOTE: Federal Register, publication.>> testing 
        described in subparagraph (C) shall be published in the Federal 
        Register for public review and comment. For purposes of this 
        section, a hardware device or primary refrigerant shall not be 
        considered an additive.

    ``(e) Regulations.--Not later than 180 days after the date of the 
enactment of this section, the Secretary shall issue guidelines to carry 
out this section.''.
    (b) Conforming Amendment.--The table of contents of the National 
Energy Conservation Policy Act is further amended by inserting after the 
item relating to section 552 the following new item:

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

SEC. 105. ENERGY SAVINGS PERFORMANCE CONTRACTS.

    (a) Extension.--Section 801(c) of the National Energy Conservation 
Policy Act (42 U.S.C. 8287(c)) is amended by striking ``2006'' and 
inserting ``2016''.
    (b) Extension of Authority.--Any <<NOTE: 42 USC 8257 note.>> energy 
savings performance contract entered into under section 801 of the 
National Energy Conservation Policy Act (42 U.S.C. 8287) after October 
1, 2003, and before the date of enactment of this Act, shall be 
considered to have been entered into under that section.

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

    (a) Definition of Energy Intensity.--In this section, the term 
``energy intensity'' means the primary energy consumed for each unit of 
physical output in an industrial process.
    (b) Voluntary Agreements.--The Secretary may enter into voluntary 
agreements with one or more persons in industrial sectors that consume 
significant quantities of primary energy for each unit of physical 
output to reduce the energy intensity of the production activities of 
the persons.
    (c) Goal.--Voluntary agreements under this section shall have as a 
goal the reduction of energy intensity by not less than 2.5 percent each 
year during the period of calendar years 2007 through 2016.
    (d) Recognition.--The Secretary, in cooperation with other 
appropriate Federal agencies, shall develop mechanisms to recognize and 
publicize the achievements of participants in voluntary agreements under 
this section.
    (e) Technical Assistance.--A person that enters into an agreement 
under this section and continues to make a good faith effort to achieve 
the energy efficiency goals specified in the agreement shall be eligible 
to receive from the Secretary a grant or technical assistance, as 
appropriate, to assist in the achievement of those goals.
    (f) Report.--Not later than each of June 30, 2012, and June 30, 
2017, the Secretary shall submit to Congress a report that--
            (1) evaluates the success of the voluntary agreements under 
        this section; and
            (2) provides independent verification of a sample of the 
        energy savings estimates provided by participating firms.

[[Page 119 STAT. 612]]

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

    (a) Establishment.--The Secretary, in consultation with the 
Administrator of General Services, shall establish an Advanced Building 
Efficiency Testbed program for the development, testing, and 
demonstration of advanced engineering systems, components, and materials 
to enable innovations in building technologies. The program shall 
evaluate efficiency concepts for government and industry buildings, and 
demonstrate the ability of next generation buildings to support 
individual and organizational productivity and health (including by 
improving indoor air quality) as well as flexibility and technological 
change to improve environmental sustainability. Such program shall 
complement and not duplicate existing national programs.
    (b) Participants.--The program established under subsection (a) 
shall be led by a university with the ability to combine the expertise 
from numerous academic fields including, at a minimum, intelligent 
workplaces and advanced building systems and engineering, electrical and 
computer engineering, computer science, architecture, urban design, and 
environmental and mechanical engineering. Such university shall partner 
with other universities and entities who have established programs and 
the capability of advancing innovative building efficiency technologies.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section $6,000,000 for 
each of the fiscal years 2006 through 2008, to remain available until 
expended. For any fiscal year in which funds are expended under this 
section, the Secretary shall provide one-third of the total amount to 
the lead university described in subsection (b), and provide the 
remaining two-thirds to the other participants referred to in subsection 
(b) on an equal basis.

SEC. 108. INCREASED USE OF RECOVERED MINERAL COMPONENT IN FEDERALLY 
            FUNDED PROJECTS INVOLVING PROCUREMENT OF CEMENT OR CONCRETE.

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


``increased <<NOTE: 42 usc 6966.>> use of recovered mineral component in 
federally funded projects involving procurement of cement or concrete

    ``Sec. 6005. (a) Definitions.--In this section:
            ``(1) Agency head.--The term `agency head' means--
                    ``(A) the Secretary of Transportation; and
                    ``(B) the head of any other Federal agency that, on 
                a regular basis, procures, or provides Federal funds to 
                pay or assist in paying the cost of procuring, material 
                for cement or concrete projects.
            ``(2) Cement or concrete project.--The term `cement or 
        concrete project' means a project for the construction or 
        maintenance of a highway or other transportation facility or a 
        Federal, State, or local government building or other public 
        facility that--
                    ``(A) involves the procurement of cement or 
                concrete; and
                    ``(B) is carried out, in whole or in part, using 
                Federal funds.

[[Page 119 STAT. 613]]

            ``(3) Recovered mineral component.--The term `recovered 
        mineral component' means--
                    ``(A) ground granulated blast furnace slag, 
                excluding lead slag;
                    ``(B) coal combustion fly ash; and
                    ``(C) any other waste material or byproduct 
                recovered or diverted from solid waste that the 
                Administrator, in consultation with an agency head, 
                determines should be treated as recovered mineral 
                component under this section for use in cement or 
                concrete projects paid for, in whole or in part, by the 
                agency head.

    ``(b) Implementation of Requirements.--
            ``(1) In general.--Not <<NOTE: Deadline.>> later than 1 year 
        after the date of enactment of this section, the Administrator 
        and each agency head shall take such actions as are necessary to 
        implement fully all procurement requirements and incentives in 
        effect as of the date of enactment of this section (including 
        guidelines under section 6002) that provide for the use of 
        cement and concrete incorporating recovered mineral component in 
        cement or concrete projects.
            ``(2) Priority.--In carrying out paragraph (1), an agency 
        head shall give priority to achieving greater use of recovered 
        mineral component in cement or concrete projects for which 
        recovered mineral components historically have not been used or 
        have been used only minimally.
            ``(3) Federal procurement requirements.--The Administrator 
        and each agency head shall carry out this subsection in 
        accordance with section 6002.

    ``(c) Full Implementation Study.--
            ``(1) In general.--The Administrator, in cooperation with 
        the Secretary of Transportation and the Secretary of Energy, 
        shall conduct a study to determine the extent to which 
        procurement requirements, when fully implemented in accordance 
        with subsection (b), may realize energy savings and 
        environmental benefits attainable with substitution of recovered 
        mineral component in cement used in cement or concrete projects.
            ``(2) Matters to be addressed.--The study shall--
                    ``(A) quantify--
                          ``(i) the extent to which recovered mineral 
                      components are being substituted for Portland 
                      cement, particularly as a result of procurement 
                      requirements; and
                          ``(ii) the energy savings and environmental 
                      benefits associated with the substitution;
                    ``(B) identify all barriers in procurement 
                requirements to greater realization of energy savings 
                and environmental benefits, including barriers resulting 
                from exceptions from the law; and
                    ``(C)(i) identify potential mechanisms to achieve 
                greater substitution of recovered mineral component in 
                types of cement or concrete projects for which recovered 
                mineral components historically have not been used or 
                have been used only minimally;
                    ``(ii) evaluate the feasibility of establishing 
                guidelines or standards for optimized substitution rates 
                of recovered mineral component in those cement or 
                concrete projects; and

[[Page 119 STAT. 614]]

                    ``(iii) identify any potential environmental or 
                economic effects that may result from greater 
                substitution of recovered mineral component in those 
                cement or concrete projects.
            ``(3) Report.--Not later than 30 months after the date of 
        enactment of this section, the Administrator shall submit to 
        Congress a report on the study.

    ``(d) Additional <<NOTE: Deadline.>> Procurement Requirements.--
Unless the study conducted under subsection (c) identifies any effects 
or other problems described in subsection (c)(2)(C)(iii) that warrant 
further review or delay, the Administrator and each agency head shall, 
not later than 1 year after the date on which the report under 
subsection (c)(3) is submitted, take additional actions under this Act 
to establish procurement requirements and incentives that provide for 
the use of cement and concrete with increased substitution of recovered 
mineral component in the construction and maintenance of cement or 
concrete projects--
            ``(1) to realize more fully the energy savings and 
        environmental benefits associated with increased substitution; 
        and
            ``(2) to eliminate barriers identified under subsection 
        (c)(2)(B).

    ``(e) Effect of Section.--Nothing in this section affects the 
requirements of section 6002 (including the guidelines and 
specifications for implementing those requirements).''.
    (b) Conforming Amendment.--The table of contents of the Solid Waste 
Disposal Act is amended by adding after the item relating to section 
6004 the following:

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

SEC. 109. FEDERAL BUILDING PERFORMANCE STANDARDS.

    Section 305(a) of the Energy Conservation and Production Act (42 
U.S.C. 6834(a)) is amended--
            (1) in paragraph (2)(A), by striking ``CABO Model Energy 
        Code, 1992 (in the case of residential buildings) or ASHRAE 
        Standard 90.1-1989'' and inserting ``the 2004 International 
        Energy Conservation Code (in the case of residential buildings) 
        or ASHRAE Standard 90.1-2004''; and
            (2) by adding at the end the following:

    ``(3)(A) <<NOTE: Deadline. Regulations.>> Not later than 1 year 
after the date of enactment of this paragraph, the Secretary shall 
establish, by rule, revised Federal building energy efficiency 
performance standards that require that--
            ``(i) if life-cycle cost-effective for new Federal 
        buildings--
                    ``(I) the buildings be designed to achieve energy 
                consumption levels that are at least 30 percent below 
                the levels established in the version of the ASHRAE 
                Standard or the International Energy Conservation Code, 
                as appropriate, that is in effect as of the date of 
                enactment of this paragraph; and
                    ``(II) sustainable design principles are applied to 
                the siting, design, and construction of all new and 
                replacement buildings; and
            ``(ii) if water is used to achieve energy efficiency, water 
        conservation technologies shall be applied to the extent that 
        the technologies are life-cycle cost-effective.

[[Page 119 STAT. 615]]

    ``(B) <<NOTE: Deadline.>> Not later than 1 year after the date of 
approval of each subsequent revision of the ASHRAE Standard or the 
International Energy Conservation Code, as appropriate, the Secretary 
shall determine, based on the cost-effectiveness of the requirements 
under the amendment, whether the revised standards established under 
this paragraph should be updated to reflect the amendment.

    ``(C) In the budget request of the Federal agency for each fiscal 
year and each report submitted by the Federal agency under section 
548(a) of the National Energy Conservation Policy Act (42 U.S.C. 
8258(a)), the head of each Federal agency shall include--
            ``(i) a list of all new Federal buildings owned, operated, 
        or controlled by the Federal agency; and
            ``(ii) a statement specifying whether the Federal buildings 
        meet or exceed the revised standards established under this 
        paragraph.''.

SEC. 110. DAYLIGHT SAVINGS.

    (a) Amendment.--Section 3(a) of the Uniform Time Act of 1966 (15 
U.S.C. 260a(a)) is amended--
            (1) by striking ``first Sunday of April'' and inserting 
        ``second Sunday of March''; and
            (2) by striking ``last Sunday of October'' and inserting 
        ``first Sunday of November''.

    (b) Effective Date.--Subsection (a) <<NOTE: 15 USC 260a 
note.>> shall take effect 1 year after the date of enactment of this Act 
or March 1, 2007, whichever is later.

    (c) Report to Congress.--Not <<NOTE: 15 USC 260a note.>> later than 
9 months after the effective date stated in subsection (b), the 
Secretary shall report to Congress on the impact of this section on 
energy consumption in the United States.

    (d) Right to Revert.--Congress retains the right to revert the 
Daylight Saving Time back to the 2005 time schedules once the Department 
study is complete.

SEC. 111. <<NOTE: 42 USC 15813.>> ENHANCING ENERGY EFFICIENCY IN 
            MANAGEMENT OF FEDERAL LANDS.

    (a) Sense of the Congress.--It is the sense of the Congress that 
Federal agencies should enhance the use of energy efficient technologies 
in the management of natural resources.
    (b) Energy Efficient Buildings.--To the extent practicable, the 
Secretary of the Interior, the Secretary of Commerce, and the Secretary 
of Agriculture shall seek to incorporate energy efficient technologies 
in public and administrative buildings associated with management of the 
National Park System, National Wildlife Refuge System, National Forest 
System, National Marine Sanctuaries System, and other public lands and 
resources managed by the Secretaries.
    (c) Energy Efficient Vehicles.--To the extent practicable, the 
Secretary of the Interior, the Secretary of Commerce, and the Secretary 
of Agriculture shall seek to use energy efficient motor vehicles, 
including vehicles equipped with biodiesel or hybrid engine 
technologies, in the management of the National Park System, National 
Wildlife Refuge System, National Forest System, National Marine 
Sanctuaries System, and other public lands and resources managed by the 
Secretaries.

[[Page 119 STAT. 616]]

            Subtitle B--Energy Assistance and State Programs

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

    (a) Authorization of Appropriations.--Section 2602(b) of the Low-
Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621(b)) is amended 
by striking ``and $2,000,000,000 for each of fiscal years 2002 through 
2004'' and inserting ``and $5,100,000,000 for each of fiscal years 2005 
through 2007''.
    (b) Renewable Fuels.--The Low-Income Home Energy Assistance Act of 
1981 (42 U.S.C. 8621 et seq.) is amended by adding at the end the 
following new section:


                            ``renewable fuels


    ``Sec. 2612. <<NOTE: 42 USC 8630.>> In providing assistance pursuant 
to this title, a State, or any other person with which the State makes 
arrangements to carry out the purposes of this title, may purchase 
renewable fuels, including biomass.''.

    (c) Report to Congress.--The <<NOTE: 42 USC 8630 note.>> Secretary 
shall report to Congress on the use of renewable fuels in providing 
assistance under the Low-Income Home Energy Assistance Act of 1981 (42 
U.S.C. 8621 et seq.).

SEC. 122. WEATHERIZATION ASSISTANCE.

    (a) Authorization of Appropriations.--Section 422 of the Energy 
Conservation and Production Act (42 U.S.C. 6872) is amended by striking 
``for fiscal years 1999 through 2003 such sums as may be necessary'' and 
inserting ``$500,000,000 for fiscal year 2006, $600,000,000 for fiscal 
year 2007, and $700,000,000 for fiscal year 2008''.
    (b) Eligibility.--Section 412(7) of the Energy Conservation and 
Production Act (42 U.S.C. 6862(7)) is amended by striking ``125 
percent'' both places it appears and inserting ``150 percent''.

SEC. 123. STATE ENERGY PROGRAMS.

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


                     ``state energy efficiency goals


    ``Sec. 364. Each State energy conservation plan with respect to 
which assistance is made available under this part on or after the date 
of enactment of the Energy Policy Act of 2005 shall contain a goal, 
consisting of an improvement of 25 percent or more in the efficiency of 
use of energy in the State concerned

[[Page 119 STAT. 617]]

in calendar year 2012 as compared to calendar year 1990, and may contain 
interim goals.''.
    (c) Authorization of Appropriations.--Section 365(f) of the Energy 
Policy and Conservation Act (42 U.S.C. 6325(f)) is amended by striking 
``for fiscal years 1999 through 2003 such sums as may be necessary'' and 
inserting ``$100,000,000 for each of the fiscal years 2006 and 2007 and 
$125,000,000 for fiscal year 2008''.

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

    (a) Definitions.--In this section:
            (1) Eligible state.--The term ``eligible State'' means a 
        State that meets the requirements of subsection (b).
            (2) Energy star program.--The term ``Energy Star program'' 
        means the program established by section 324A of the Energy 
        Policy and Conservation Act.
            (3) Residential energy star product.--The term ``residential 
        Energy Star product'' means a product for a residence that is 
        rated for energy efficiency under the Energy Star program.
            (4) State energy office.--The term ``State energy office'' 
        means the State agency responsible for developing State energy 
        conservation plans under section 362 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6322).
            (5) State program.--The term ``State program'' means a State 
        energy efficient appliance rebate program described in 
        subsection (b)(1).

    (b) Eligible States.--A State shall be eligible to receive an 
allocation under subsection (c) if the State--
            (1) establishes (or has established) a State energy 
        efficient appliance rebate program to provide rebates to 
        residential consumers for the purchase of residential Energy 
        Star products to replace used appliances of the same type;
            (2) submits an application for the allocation at such time, 
        in such form, and containing such information as the Secretary 
        may require; and
            (3) provides assurances satisfactory to the Secretary that 
        the State will use the allocation to supplement, but not 
        supplant, funds made available to carry out the State program.

    (c) Amount of Allocations.--
            (1) In general.--Subject to paragraph (2), for each fiscal 
        year, the Secretary shall allocate to the State energy office of 
        each eligible State to carry out subsection (d) an amount equal 
        to the product obtained by multiplying the amount made available 
        under subsection (f) for the fiscal year by the ratio that the 
        population of the State in the most recent calendar year for 
        which data are available bears to the total population of all 
        eligible States in that calendar year.
            (2) Minimum allocations.--For each fiscal year, the amounts 
        allocated under this subsection shall be adjusted 
        proportionately so that no eligible State is allocated a sum 
        that is less than an amount determined by the Secretary.

    (d) Use of Allocated Funds.--The allocation to a State energy office 
under subsection (c) may be used to pay up to 50 percent of the cost of 
establishing and carrying out a State program.
    (e) Issuance of Rebates.--Rebates may be provided to residential 
consumers that meet the requirements of the State program.

[[Page 119 STAT. 618]]

The amount of a rebate shall be determined by the State energy office, 
taking into consideration--
            (1) the amount of the allocation to the State energy office 
        under subsection (c);
            (2) the amount of any Federal or State tax incentive 
        available for the purchase of the residential Energy Star 
        product; and
            (3) the difference between the cost of the residential 
        Energy Star product and the cost of an appliance that is not a 
        residential Energy Star product, but is of the same type as, and 
        is the nearest capacity, performance, and other relevant 
        characteristics (as determined by the State energy office) to, 
        the residential Energy Star product.

    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section $50,000,000 for 
each of the fiscal years 2006 through 2010.

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

    (a) Grants.--The Secretary may make grants to the State agency 
responsible for developing State energy conservation plans under section 
362 of the Energy Policy and Conservation Act (42 U.S.C. 6322), or, if 
no such agency exists, a State agency designated by the Governor of the 
State, to assist units of local government in the State in improving the 
energy efficiency of public buildings and facilities--
            (1) through construction of new energy efficient public 
        buildings that use at least 30 percent less energy than a 
        comparable public building constructed in compliance with 
        standards prescribed in the most recent version of the 
        International Energy Conservation Code, or a similar State code 
        intended to achieve substantially equivalent efficiency levels; 
        or
            (2) through renovation of existing public buildings to 
        achieve reductions in energy use of at least 30 percent as 
        compared to the baseline energy use in such buildings prior to 
        renovation, assuming a 3-year, weather-normalized average for 
        calculating such baseline.

    (b) Administration.--State energy offices receiving grants under 
this section shall--
            (1) <<NOTE: Records.>> maintain such records and evidence of 
        compliance as the Secretary may require; and
            (2) develop and distribute information and materials and 
        conduct programs to provide technical services and assistance to 
        encourage planning, financing, and design of energy efficient 
        public buildings by units of local government.

    (c) Authorization of Appropriations.--For the purposes of this 
section, there are authorized to be appropriated to the Secretary 
$30,000,000 for each of fiscal years 2006 through 2010. Not more than 10 
percent of appropriated funds shall be used for administration.

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

    (a) Grants.--The Secretary is authorized to make grants to units of 
local government, private, non-profit community development 
organizations, and Indian tribe economic development entities to improve 
energy efficiency; identify and develop alternative, renewable, and 
distributed energy supplies; and increase energy conservation in low 
income rural and urban communities.

[[Page 119 STAT. 619]]

    (b) Purpose of Grants.--The Secretary may make grants on a 
competitive basis for--
            (1) investments that develop alternative, renewable, and 
        distributed energy supplies;
            (2) energy efficiency projects and energy conservation 
        programs;
            (3) studies and other activities that improve energy 
        efficiency in low income rural and urban communities;
            (4) planning and development assistance for increasing the 
        energy efficiency of buildings and facilities; and
            (5) technical and financial assistance to local government 
        and private entities on developing new renewable and distributed 
        sources of power or combined heat and power generation.

    (c) Definition.--For purposes of this section, the term ``Indian 
tribe'' means any Indian tribe, band, nation, or other organized group 
or community, including any Alaskan Native village or regional or 
village corporation as defined in or established pursuant to the Alaska 
Native Claims Settlement Act (43 U.S.C. 1601 et seq.), that is 
recognized as eligible for the special programs and services provided by 
the United States to Indians because of their status as Indians.
    (d) Authorization of Appropriations.--For the purposes of this 
section there are authorized to be appropriated to the Secretary 
$20,000,000 for each of fiscal years 2006 through 2008.

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

    (a) In General.--The Secretary, in cooperation with the States, 
shall establish a cooperative program for research, development, 
demonstration, and deployment of technologies in which there is a common 
Federal and State energy efficiency, renewable energy, and fossil energy 
interest, to be known as the ``State Technologies Advancement 
Collaborative'' (referred to in this section as the ``Collaborative'').
    (b) Duties.--The Collaborative shall--
            (1) leverage Federal and State funding through cost-shared 
        activity;
            (2) reduce redundancies in Federal and State funding; and
            (3) create multistate projects to be awarded through a 
        competitive process.

    (c) Administration.--The Collaborative shall be administered through 
an agreement between the Department and appropriate State-based 
organizations.
    (d) Funding Sources.--Funding for the Collaborative may be provided 
from--
            (1) amounts specifically appropriated for the Collaborative; 
        or
            (2) amounts that may be allocated from other appropriations 
        without changing the purpose for which the amounts are 
        appropriated.

    (e) Authorization of Appropriations.--There are authorized to carry 
out this section such sums as are necessary for each of fiscal years 
2006 through 2010.

SEC. 128. STATE BUILDING ENERGY EFFICIENCY CODES INCENTIVES.

    Section 304(e) of the Energy Conservation and Production Act (42 
U.S.C. 6833(e)) is amended--

[[Page 119 STAT. 620]]

            (1) in paragraph (1), by inserting before the period at the 
        end of the first sentence the following: ``, including 
        increasing and verifying compliance with such codes''; and
            (2) by striking paragraph (2) and inserting the following:

    ``(2) Additional funding shall be provided under this subsection for 
implementation of a plan to achieve and document at least a 90 percent 
rate of compliance with residential and commercial building energy 
efficiency codes, based on energy performance--
            ``(A) to a State that has adopted and is implementing, on a 
        statewide basis--
                    ``(i) a residential building energy efficiency code 
                that meets or exceeds the requirements of the 2004 
                International Energy Conservation Code, or any 
                succeeding version of that code that has received an 
                affirmative determination from the Secretary under 
                subsection (a)(5)(A); and
                    ``(ii) a commercial building energy efficiency code 
                that meets or exceeds the requirements of the ASHRAE 
                Standard 90.1-2004, or any succeeding version of that 
                standard that has received an affirmative determination 
                from the Secretary under subsection (b)(2)(A); or
            ``(B) in a State in which there is no statewide energy code 
        either for residential buildings or for commercial buildings, to 
        a local government that has adopted and is implementing 
        residential and commercial building energy efficiency codes, as 
        described in subparagraph (A).

    ``(3) Of the amounts made available under this subsection, the 
Secretary may use $500,000 for each fiscal year to train State and local 
officials to implement codes described in paragraph (2).
    ``(4)(A) <<NOTE: Appropriation authorization.>> There are authorized 
to be appropriated to carry out this subsection--
            ``(i) $25,000,000 for each of fiscal years 2006 through 
        2010; and
            ``(ii) such sums as are necessary for fiscal year 2011 and 
        each fiscal year thereafter.

    ``(B) Funding provided to States under paragraph (2) for each fiscal 
year shall not exceed one-half of the excess of funding under this 
subsection over $5,000,000 for the fiscal year.''.

                  Subtitle C--Energy Efficient Products

SEC. 131. ENERGY STAR PROGRAM.

    (a) In General.--The Energy Policy and Conservation Act is amended 
by inserting after section 324 (42 U.S.C. 6294) the following:


                          ``energy star program


    ``Sec. 324A. (a) In General.--There is <<NOTE: 42 USC 
6294a.>> established within the Department of Energy and the 
Environmental Protection Agency a voluntary program to identify and 
promote energy-efficient products and buildings in order to reduce 
energy consumption, improve energy security, and reduce pollution 
through voluntary labeling of, or other forms of communication about, 
products and buildings that meet the highest energy conservation 
standards.

    ``(b) Division of Responsibilities.--Responsibilities under the 
program shall be divided between the Department of Energy and

[[Page 119 STAT. 621]]

the Environmental Protection Agency in accordance with the terms of 
applicable agreements between those agencies.
    ``(c) Duties.--The Administrator and the Secretary shall--
            ``(1) promote Energy Star compliant technologies as the 
        preferred technologies in the marketplace for--
                    ``(A) achieving energy efficiency; and
                    ``(B) reducing pollution;
            ``(2) work to enhance public awareness of the Energy Star 
        label, including by providing special outreach to small 
        businesses;
            ``(3) preserve the integrity of the Energy Star label;
            ``(4) regularly update Energy Star product criteria for 
        product categories;
            ``(5) solicit comments from interested parties prior to 
        establishing or revising an Energy Star product category, 
        specification, or criterion (or prior to effective dates for any 
        such product category, specification, or criterion);
            ``(6) on adoption of a new or revised product category, 
        specification, or criterion, provide reasonable notice to 
        interested parties of any changes (including effective dates) in 
        product categories, specifications, or criteria, along with--
                    ``(A) an explanation of the changes; and
                    ``(B) as appropriate, responses to comments 
                submitted by interested parties; and
            ``(7) provide appropriate lead time (which shall be 270 
        days, unless the Agency or Department specifies otherwise) prior 
        to the applicable effective date for a new or a significant 
        revision to a product category, specification, or criterion, 
        taking into account the timing requirements of the 
        manufacturing, product marketing, and distribution process for 
        the specific product addressed.

    ``(d) Deadlines.--The Secretary shall establish new qualifying 
levels--
            ``(1) not later than January 1, 2006, for clothes washers 
        and dishwashers, effective beginning January 1, 2007; and
            ``(2) not later than January 1, 2008, for clothes washers, 
        effective beginning January 1, 2010.''.

    (b) Table of Contents Amendment.--The table of contents of the 
Energy Policy and Conservation Act (42 U.S.C. prec. 6201) is amended by 
inserting after the item relating to section 324 the following:

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

SEC. 132. HVAC MAINTENANCE CONSUMER EDUCATION PROGRAM.

    Section 337 of the Energy Policy and Conservation Act (42 U.S.C. 
6307) is amended by adding at the end the following:
    ``(c) HVAC Maintenance.--(1) <<NOTE: Deadline.>> To ensure that 
installed air conditioning and heating systems operate at maximum rated 
efficiency levels, the Secretary shall, not later than 180 days after 
the date of enactment of this subsection, carry out a program to educate 
homeowners and small business owners concerning the energy savings from 
properly conducted maintenance of air conditioning, heating, and 
ventilating systems.

    ``(2) The Secretary shall carry out the program under paragraph (1), 
on a cost-shared basis, in cooperation with the Administrator of the 
Environmental Protection Agency and any other entities that the 
Secretary determines to be appropriate, including industry

[[Page 119 STAT. 622]]

trade associations, industry members, and energy efficiency 
organizations.
    ``(d) Small Business Education and Assistance.--(1) The 
Administrator of the Small Business Administration, in consultation with 
the Secretary and the Administrator of the Environmental Protection 
Agency, shall develop and coordinate a Government-wide program, building 
on the Energy Star for Small Business Program, to assist small 
businesses in--
            ``(A) becoming more energy efficient;
            ``(B) understanding the cost savings from improved energy 
        efficiency;
            ``(C) understanding and accessing Federal procurement 
        opportunities with regard to Energy Star technologies and 
        products; and
            ``(D) identifying financing options for energy efficiency 
        upgrades.

    ``(2) The Secretary, the Administrator of the Environmental 
Protection Agency, and the Administrator of the Small Business 
Administration shall--
            ``(A) make program information available to small business 
        concerns directly through the district offices and resource 
        partners of the Small Business Administration, including small 
        business development centers, women's business centers, and the 
        Service Corps of Retired Executives (SCORE), and through other 
        Federal agencies, including the Federal Emergency Management 
        Agency and the Department of Agriculture; and
            ``(B) coordinate assistance with the Secretary of Commerce 
        for manufacturing-related efforts, including the Manufacturing 
        Extension Partnership Program.

    ``(3) The Secretary, on a cost shared basis in cooperation with the 
Administrator of the Environmental Protection Agency, shall provide to 
the Small Business Administration all advertising, marketing, and other 
written materials necessary for the dissemination of information under 
paragraph (2).
    ``(4) The Secretary, the Administrator of the Environmental 
Protection Agency, and the Administrator of the Small Business 
Administration, as part of the outreach to small business concerns under 
the Energy Star Program for Small Business Program, may enter into 
cooperative agreements with qualified resources partners (including the 
National Center for Appropriate Technology) to establish, maintain, and 
promote a Small Business Energy Clearinghouse (in this subsection 
referred to as the `Clearinghouse').
    ``(5) The Secretary, the Administrator of the Environmental 
Protection Agency, and the Administrator of the Small Business 
Administration shall ensure that the Clearinghouse provides a 
centralized resource where small business concerns may access, 
telephonically and electronically, technical information and advice to 
help increase energy efficiency and reduce energy costs.
    ``(6) <<NOTE: Appropriation authorization.>> There are authorized to 
be appropriated such sums as are necessary to carry out this subsection, 
to remain available until expended.''.

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

    (a) In General.--Not <<NOTE: Deadline.>> later than 180 days after 
the date of enactment of this Act, the Secretary shall convene an 
organizational conference for the purpose of establishing an ongoing, 
self-sustaining national public energy education program.

[[Page 119 STAT. 623]]

    (b) Participants.--The Secretary shall invite to participate in the 
conference individuals and entities representing all aspects of energy 
production and distribution, including--
            (1) industrial firms;
            (2) professional societies;
            (3) educational organizations;
            (4) trade associations; and
            (5) governmental agencies.

    (c) Purpose, Scope, and Structure.--
            (1) Purpose.--The purpose of the conference shall be to 
        establish an ongoing, self-sustaining national public energy 
        education program to examine and recognize interrelationships 
        between energy sources in all forms, including--
                    (A) conservation and energy efficiency;
                    (B) the role of energy use in the economy; and
                    (C) the impact of energy use on the environment.
            (2) Scope and structure.--Taking into consideration the 
        purpose described in paragraph (1), the participants in the 
        conference invited under subsection (b) shall design the scope 
        and structure of the program described in subsection (a).

    (d) Technical Assistance.--The Secretary shall provide technical 
assistance and other guidance necessary to carry out the program 
described in subsection (a).
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

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

    (a) In General.--The Secretary shall carry out a comprehensive 
national program, including advertising and media awareness, to inform 
consumers about--
            (1) the need to reduce energy consumption during the 4-year 
        period beginning on the date of enactment of this Act;
            (2) the benefits to consumers of reducing consumption of 
        electricity, natural gas, and petroleum, particularly during 
        peak use periods;
            (3) the importance of low energy costs to economic growth 
        and preserving manufacturing jobs in the United States; and
            (4) practical, cost-effective measures that consumers can 
        take to reduce consumption of electricity, natural gas, and 
        gasoline, including--
                    (A) maintaining and repairing heating and cooling 
                ducts and equipment;
                    (B) weatherizing homes and buildings;
                    (C) purchasing energy efficient products; and
                    (D) proper tire maintenance.

    (b) Cooperation.--The program carried out under subsection (a) 
shall--
            (1) include collaborative efforts with State and local 
        government officials and the private sector; and
            (2) incorporate, to the maximum extent practicable, 
        successful State and local public education programs.

    (c) Report.--Not later than July 1, 2009, the Secretary shall submit 
to Congress a report describing the effectiveness of the program under 
this section.
    (d) Termination of Authority.--The program carried out under this 
section shall terminate on December 31, 2010.

[[Page 119 STAT. 624]]

    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $90,000,000 for each of fiscal 
years 2006 through 2010.

SEC. 135. ENERGY CONSERVATION STANDARDS FOR ADDITIONAL PRODUCTS.

    (a) Definitions.--Section 321 of the Energy Policy and Conservation 
Act (42 U.S.C. 6291) is amended--
            (1) in paragraph (29)--
                    (A) in subparagraph (D)--
                          (i) in clause (i), by striking ``C78.1-
                      1978(R1984)'' and inserting ``C78.81-2003 (Data 
                      Sheet 7881-ANSI-1010-1)'';
                          (ii) in clause (ii), by striking ``C78.1-
                      1978(R1984)'' and inserting ``C78.81-2003 (Data 
                      Sheet 7881-ANSI-3007-1)''; and
                          (iii) in clause (iii), by striking ``C78.1-
                      1978(R1984)'' and inserting ``C78.81-2003 (Data 
                      Sheet 7881-ANSI-1019-1)''; and
                    (B) by adding at the end the following:
            ``(M) The term `F34T12 lamp' (also known as a `F40T12/ES 
        lamp') means a nominal 34 watt tubular fluorescent lamp that is 
        48 inches in length and 1\1/2\ inches in diameter, and conforms 
        to ANSI standard C78.81-2003 (Data Sheet 7881-ANSI-1006-1).
            ``(N) The term `F96T12/ES lamp' means a nominal 60 watt 
        tubular fluorescent lamp that is 96 inches in length and 1\1/2\ 
        inches in diameter, and conforms to ANSI standard C78.81-2003 
        (Data Sheet 7881-ANSI-3006-1).
            ``(O) The term `F96T12HO/ES lamp' means a nominal 95 watt 
        tubular fluorescent lamp that is 96 inches in length and 1\1/2\ 
        inches in diameter, and conforms to ANSI standard C78.81-2003 
        (Data Sheet 7881-ANSI-1017-1).
            ``(P) The term `replacement ballast' means a ballast that--
                    ``(i) is designed for use to replace an existing 
                ballast in a previously installed luminaire;
                    ``(ii) is marked `FOR REPLACEMENT USE ONLY';
                    ``(iii) is shipped by the manufacturer in packages 
                containing not more than 10 ballasts; and
                    ``(iv) has output leads that when fully extended are 
                a total length that is less than the length of the lamp 
                with which the ballast is intended to be operated.'';
            (2) in paragraph (30)(S)--
                    (A) by inserting ``(i)'' before ``The term''; and
                    (B) by adding at the end the following:
                    ``(ii) The term `medium base compact fluorescent 
                lamp' does not include--
                          ``(I) any lamp that is--
                                    ``(aa) specifically designed to be 
                                used for special purpose applications; 
                                and
                                    ``(bb) unlikely to be used in 
                                general purpose applications, such as 
                                the applications described in 
                                subparagraph (D); or
                          ``(II) any lamp not described in subparagraph 
                      (D) that is excluded by the Secretary, by rule, 
                      because the lamp is--
                                    ``(aa) designed for special 
                                applications; and

[[Page 119 STAT. 625]]

                                    ``(bb) unlikely to be used in 
                                general purpose applications.''; and
            (3) by adding at the end the following:
            ``(32) The term `battery charger' means a device that 
        charges batteries for consumer products, including battery 
        chargers embedded in other consumer products.
            ``(33)(A) The term `commercial prerinse spray valve' means a 
        handheld device designed and marketed for use with commercial 
        dishwashing and ware washing equipment that sprays water on 
        dishes, flatware, and other food service items for the purpose 
        of removing food residue before cleaning the items.
            ``(B) The Secretary may modify the definition of `commercial 
        prerinse spray valve' by rule--
                    ``(i) to include products--
                          ``(I) that are extensively used in conjunction 
                      with commercial dishwashing and ware washing 
                      equipment;
                          ``(II) the application of standards to which 
                      would result in significant energy savings; and
                          ``(III) the application of standards to which 
                      would meet the criteria specified in section 
                      325(o)(4); and
                    ``(ii) to exclude products--
                          ``(I) that are used for special food service 
                      applications;
                          ``(II) that are unlikely to be widely used in 
                      conjunction with commercial dishwashing and ware 
                      washing equipment; and
                          ``(III) the application of standards to which 
                      would not result in significant energy savings.
            ``(34) The term `dehumidifier' means a self-contained, 
        electrically operated, and mechanically encased assembly 
        consisting of--
                    ``(A) a refrigerated surface (evaporator) that 
                condenses moisture from the atmosphere;
                    ``(B) a refrigerating system, including an electric 
                motor;
                    ``(C) an air-circulating fan; and
                    ``(D) means for collecting or disposing of the 
                condensate.
            ``(35)(A) The term `distribution transformer' means a 
        transformer that--
                    ``(i) has an input voltage of 34.5 kilovolts or 
                less;
                    ``(ii) has an output voltage of 600 volts or less; 
                and
                    ``(iii) is rated for operation at a frequency of 60 
                Hertz.
            ``(B) The term `distribution transformer' does not include--
                    ``(i) a transformer with multiple voltage taps, the 
                highest of which equals at least 20 percent more than 
                the lowest;
                    ``(ii) a transformer that is designed to be used in 
                a special purpose application and is unlikely to be used 
                in general purpose applications, such as a drive 
                transformer, rectifier transformer, auto-transformer, 
                Uninterruptible Power System transformer, impedance 
                transformer, regulating transformer, sealed and 
                nonventilating transformer, machine tool transformer, 
                welding transformer, grounding transformer, or testing 
                transformer; or
                    ``(iii) any transformer not listed in clause (ii) 
                that is excluded by the Secretary by rule because--
                          ``(I) the transformer is designed for a 
                      special application;

[[Page 119 STAT. 626]]

                          ``(II) the transformer is unlikely to be used 
                      in general purpose applications; and
                          ``(III) the application of standards to the 
                      transformer would not result in significant energy 
                      savings.
            ``(36) The term `external power supply' means an external 
        power supply circuit that is used to convert household electric 
        current into DC current or lower-voltage AC current to operate a 
        consumer product.
            ``(37) The term `illuminated exit sign' means a sign that--
                    ``(A) is designed to be permanently fixed in place 
                to identify an exit; and
                    ``(B) consists of an electrically powered integral 
                light source that--
                          ``(i) illuminates the legend `EXIT' and any 
                      directional indicators; and
                          ``(ii) provides contrast between the legend, 
                      any directional indicators, and the background.
            ``(38) The term `low-voltage dry-type distribution 
        transformer' means a distribution transformer that--
                    ``(A) has an input voltage of 600 volts or less;
                    ``(B) is air-cooled; and
                    ``(C) does not use oil as a coolant.
            ``(39) The term `pedestrian module' means a light signal 
        used to convey movement information to pedestrians.
            ``(40) The term `refrigerated bottled or canned beverage 
        vending machine' means a commercial refrigerator that cools 
        bottled or canned beverages and dispenses the bottled or canned 
        beverages on payment.
            ``(41) The term `standby mode' means the lowest power 
        consumption mode, as established on an individual product basis 
        by the Secretary, that--
                    ``(A) cannot be switched off or influenced by the 
                user; and
                    ``(B) may persist for an indefinite time when an 
                appliance is--
                          ``(i) connected to the main electricity 
                      supply; and
                          ``(ii) used in accordance with the 
                      instructions of the manufacturer.
            ``(42) The term `torchiere' means a portable electric lamp 
        with a reflector bowl that directs light upward to give indirect 
        illumination.
            ``(43) The term `traffic signal module' means a standard 8-
        inch (200mm) or 12-inch (300mm) traffic signal indication that--
                    ``(A) consists of a light source, a lens, and all 
                other parts necessary for operation; and
                    ``(B) communicates movement messages to drivers 
                through red, amber, and green colors.
            ``(44) The term `transformer' means a device consisting of 2 
        or more coils of insulated wire that transfers alternating 
        current by electromagnetic induction from 1 coil to another to 
        change the original voltage or current value.
            ``(45)(A) The term `unit heater' means a self-contained fan-
        type heater designed to be installed within the heated space.
            ``(B) The term `unit heater' does not include a warm air 
        furnace.

[[Page 119 STAT. 627]]

            ``(46)(A) The term `high intensity discharge lamp' means an 
        electric-discharge lamp in which--
                    ``(i) the light-producing arc is stabilized by bulb 
                wall temperature; and
                    ``(ii) the arc tube has a bulb wall loading in 
                excess of 3 Watts/cm<SUP>2</SUP>.
            ``(B) The term `high intensity discharge lamp' includes 
        mercury vapor, metal halide, and high-pressure sodium lamps 
        described in subparagraph (A).
            ``(47)(A) The term `mercury vapor lamp' means a high 
        intensity discharge lamp in which the major portion of the light 
        is produced by radiation from mercury operating at a partial 
        pressure in excess of 100,000 Pa (approximately 1 atm).
            ``(B) The term `mercury vapor lamp' includes clear, 
        phosphor-coated, and self-ballasted lamps described in 
        subparagraph (A).
            ``(48) The term `mercury vapor lamp ballast' means a device 
        that is designed and marketed to start and operate mercury vapor 
        lamps by providing the necessary voltage and current.
            ``(49) The term `ceiling fan' means a nonportable device 
        that is suspended from a ceiling for circulating air via the 
        rotation of fan blades.
            ``(50) The term `ceiling fan light kit' means equipment 
        designed to provide light from a ceiling fan that can be--
                    ``(A) integral, such that the equipment is attached 
                to the ceiling fan prior to the time of retail sale; or
                    ``(B) attachable, such that at the time of retail 
                sale the equipment is not physically attached to the 
                ceiling fan, but may be included inside the ceiling fan 
                at the time of sale or sold separately for subsequent 
                attachment to the fan.
            ``(51) The term `medium screw base' means an Edison screw 
        base identified with the prefix E-26 in the `American National 
        Standard for Electric Lamp Bases', ANSI/IEC C81.61-2003, 
        published by the American National Standards Institute.''.

    (b) Test Procedures.--Section 323 of the Energy Policy and 
Conservation Act (42 U.S.C. 6293) is amended--
            (1) in subsection (b), by adding at the end the following:

    ``(9) Test procedures for illuminated exit signs shall be based on 
the test method used under version 2.0 of the Energy Star program of the 
Environmental Protection Agency for illuminated exit signs.
    ``(10)(A) Test procedures for distribution transformers and low 
voltage dry-type distribution transformers shall be based on the 
`Standard Test Method for Measuring the Energy Consumption of 
Distribution Transformers' prescribed by the National Electrical 
Manufacturers Association (NEMA TP 2-1998).
    ``(B) The Secretary may review and revise the test procedures 
established under subparagraph (A).
    ``(C) For purposes of section 346(a), the test procedures 
established under subparagraph (A) shall be considered to be the testing 
requirements prescribed by the Secretary under section 346(a)(1) for 
distribution transformers for which the Secretary makes a determination 
that energy conservation standards would--
            ``(i) be technologically feasible and economically 
        justified; and
            ``(ii) result in significant energy savings.

[[Page 119 STAT. 628]]

    ``(11) Test procedures for traffic signal modules and pedestrian 
modules shall be based on the test method used under the Energy Star 
program of the Environmental Protection Agency for traffic signal 
modules, as in effect on the date of enactment of this paragraph.
    ``(12)(A) Test procedures for medium base compact fluorescent lamps 
shall be based on the test methods for compact fluorescent lamps used 
under the August 9, 2001, version of the Energy Star program of the 
Environmental Protection Agency and the Department of Energy.
    ``(B) Except as provided in subparagraph (C), medium base compact 
fluorescent lamps shall meet all test requirements for regulated 
parameters of section 325(cc).
    ``(C) Notwithstanding subparagraph (B), if manufacturers document 
engineering predictions and analysis that support expected attainment of 
lumen maintenance at 40 percent rated life and lamp lifetime, medium 
base compact fluorescent lamps may be marketed before completion of the 
testing of lamp life and lumen maintenance at 40 percent of rated life.
    ``(13) Test procedures for dehumidifiers shall be based on the test 
criteria used under the Energy Star Program Requirements for 
Dehumidifiers developed by the Environmental Protection Agency, as in 
effect on the date of enactment of this paragraph unless revised by the 
Secretary pursuant to this section.
    ``(14) The test procedure for measuring flow rate for commercial 
prerinse spray valves shall be based on American Society for Testing and 
Materials Standard F2324, entitled `Standard Test Method for Pre-Rinse 
Spray Valves'.
    ``(15) The test procedure for refrigerated bottled or canned 
beverage vending machines shall be based on American National Standards 
Institute/American Society of Heating, Refrigerating and Air-
Conditioning Engineers Standard 32.1-2004, entitled `Methods of Testing 
for Rating Vending Machines for Bottled, Canned or Other Sealed 
Beverages'.
    ``(16)(A)(i) Test procedures for ceiling fans shall be based on the 
`Energy Star Testing Facility Guidance Manual: Building a Testing 
Facility and Performing the Solid State Test Method for ENERGY STAR 
Qualified Ceiling Fans, Version 1.1' published by the Environmental 
Protection Agency.
    ``(ii) Test procedures for ceiling fan light kits shall be based on 
the test procedures referenced in the Energy Star specifications for 
Residential Light Fixtures and Compact Fluorescent Light Bulbs, as in 
effect on the date of enactment of this paragraph.
    ``(B) The Secretary may review and revise the test procedures 
established under subparagraph (A).''; and
            (2) by adding at the end the following:

    ``(f) Additional <<NOTE: Deadline. Requirements.>> Consumer and 
Commercial Products.--(1) Not later than 2 years after the date of 
enactment of this subsection, the Secretary shall prescribe testing 
requirements for refrigerated bottled or canned beverage vending 
machines.

    ``(2) To the maximum extent practicable, the testing requirements 
prescribed under paragraph (1) shall be based on existing test 
procedures used in industry.''.
    (c) Standard Setting Authority.--Section 325 of the Energy Policy 
and Conservation Act (42 U.S.C. 6295) is amended--
            (1) in subsection (f)(3), by adding at the end the 
        following:

[[Page 119 STAT. 629]]

    ``(D) Notwithstanding any other provision of this Act, if the 
requirements of subsection (o) are met, the Secretary may consider and 
prescribe energy conservation standards or energy use standards for 
electricity used for purposes of circulating air through duct work.'';
            (2) in subsection (g)--
                    (A) in paragraph (6)(B), by inserting ``and 
                labeled'' after ``designed''; and
                    (B) by adding at the end the following:

    ``(8)(A) Each fluorescent lamp ballast (other than replacement 
ballasts or ballasts described in subparagraph (C))--
            ``(i)(I) manufactured on or after July 1, 2009;
            ``(II) sold by the manufacturer on or after October 1, 2009; 
        or
            ``(III) incorporated into a luminaire by a luminaire 
        manufacturer on or after July 1, 2010; and
            ``(ii) designed--
                    ``(I) to operate at nominal input voltages of 120 or 
                277 volts;
                    ``(II) to operate with an input current frequency of 
                60 Hertz; and
                    ``(III) for use in connection with F34T12 lamps, 
                F96T12/ES lamps, or F96T12HO/ES lamps;
        shall have a power factor of 0.90 or greater and shall have a 
        ballast efficacy factor of not less than the following:

           ...................  Total              .....................
``Applica  Ballast              nominal            Ballast
 tion for  input                lamp               efficacy
 operatio  voltage              watts              factor
 n of
One        120/277              34                 2.61
 F34T12
 lamp
Two        120/277              68                 1.35
 F34T12
 lamps
Two        120/277              120                0.77
 F96T12/
 ES lamps
Two        120/277              190                0.42.
 F96T12HO/
 ES lamps
 

    ``(B) <<NOTE: Applicability.>> The standards described in 
subparagraph (A) shall apply to all ballasts covered by subparagraph 
(A)(ii) that are manufactured on or after July 1, 2010, or sold by the 
manufacturer on or after October 1, 2010.

    ``(C) The standards described in subparagraph (A) do not apply to--
            ``(i) a ballast that is designed for dimming to 50 percent 
        or less of the maximum output of the ballast;
            ``(ii) a ballast that is designed for use with 2 F96T12HO 
        lamps at ambient temperatures of 20F or less and for use in an 
        outdoor sign; or
            ``(iii) a ballast that has a power factor of less than 0.90 
        and is designed and labeled for use only in residential 
        applications.'';
            (3) in subsection (o), by adding at the end the following:

    ``(5) The Secretary may set more than 1 energy conservation standard 
for products that serve more than 1 major function by setting 1 energy 
conservation standard for each major function.''; and
            (4) by adding at the end the following:

    ``(u) Battery <<NOTE: Deadline. Notice. Regulations.>> Charger and 
External Power Supply Electric Energy Consumption.--(1)(A) Not later 
than 18 months after the date of enactment of this subsection, the 
Secretary shall, after providing notice and an opportunity for comment, 
prescribe, by

[[Page 119 STAT. 630]]

rule, definitions and test procedures for the power use of battery 
chargers and external power supplies.
    ``(B) In establishing the test procedures under subparagraph (A), 
the Secretary shall--
            ``(i) consider existing definitions and test procedures used 
        for measuring energy consumption in standby mode and other 
        modes; and
            ``(ii) assess the current and projected future market for 
        battery chargers and external power supplies.

    ``(C) The assessment under subparagraph (B)(ii) shall include--
            ``(i) estimates of the significance of potential energy 
        savings from technical improvements to battery chargers and 
        external power supplies; and
            ``(ii) suggested product classes for energy conservation 
        standards.

    ``(D) <<NOTE: Deadline.>> Not later than 18 months after the date of 
enactment of this subsection, the Secretary shall hold a scoping 
workshop to discuss and receive comments on plans for developing energy 
conservation standards for energy use for battery chargers and external 
power supplies.

    ``(E)(i) <<NOTE: Deadline. Regultions.>> Not later than 3 years 
after the date of enactment of this subsection, the Secretary shall 
issue a final rule that determines whether energy conservation standards 
shall be issued for battery chargers and external power supplies or 
classes of battery chargers and external power supplies.

    ``(ii) For each product class, any energy conservation standards 
issued under clause (i) shall be set at the lowest level of energy use 
that--
            ``(I) meets the criteria and procedures of subsections (o), 
        (p), (q), (r), (s), and (t); and
            ``(II) would result in significant overall annual energy 
        savings, considering standby mode and other operating modes.

    ``(2) In determining under section 323 whether test procedures and 
energy conservation standards under this section should be revised with 
respect to covered products that are major sources of standby mode 
energy consumption, the Secretary shall consider whether to incorporate 
standby mode into the test procedures and energy conservation standards, 
taking into account standby mode power consumption compared to overall 
product energy consumption.
    ``(3) The Secretary shall not propose an energy conservation 
standard under this section, unless the Secretary has issued applicable 
test procedures for each product under section 323.
    ``(4) <<NOTE: Applicability. Effective date.>> Any energy 
conservation standard issued under this subsection shall be applicable 
to products manufactured or imported beginning on the date that is 3 
years after the date of issuance.

    ``(5) The Secretary and the Administrator shall collaborate and 
develop programs (including programs under section 324A and other 
voluntary industry agreements or codes of conduct) that are designed to 
reduce standby mode energy use.
    ``(v) Ceiling <<NOTE: Deadline. Regulations.>> Fans and Refrigerated 
Beverage Vending Machines.--(1) Not later than 1 year after the date of 
enactment of this subsection, the Secretary shall prescribe, by rule, 
test procedures and energy conservation standards for ceiling fans and 
ceiling fan light kits. If the Secretary sets such standards, the 
Secretary shall consider exempting or setting different standards for 
certain product classes for which the primary standards are not 
technically

[[Page 119 STAT. 631]]

feasible or economically justified, and establishing separate or 
exempted product classes for highly decorative fans for which air 
movement performance is a secondary design feature.
    ``(2) <<NOTE: Deadline. Regulations.>> Not later than 4 years after 
the date of enactment of this subsection, the Secretary shall prescribe, 
by rule, energy conservation standards for refrigerated bottle or canned 
beverage vending machines.

    ``(3) In establishing energy conservation standards under this 
subsection, the Secretary shall use the criteria and procedures 
prescribed under subsections (o) and (p).
    ``(4) <<NOTE: Applicability.>> Any energy conservation standard 
prescribed under this subsection shall apply to products manufactured 3 
years after the date of publication of a final rule establishing the 
energy conservation standard.

    ``(w) Illuminated Exit Signs.--An illuminated exit sign manufactured 
on or after January 1, 2006, shall meet the version 2.0 Energy Star 
Program performance requirements for illuminated exit signs prescribed 
by the Environmental Protection Agency.
    ``(x) Torchieres.--A torchiere manufactured on or after January 1, 
2006--
            ``(1) shall consume not more than 190 watts of power; and
            ``(2) shall not be capable of operating with lamps that 
        total more than 190 watts.

    ``(y) Low Voltage Dry-Type Distribution Transformers.--The 
efficiency of a low voltage dry-type distribution transformer 
manufactured on or after January 1, 2007, shall be the Class I 
Efficiency Levels for distribution transformers specified in table 4-2 
of the `Guide for Determining Energy Efficiency for Distribution 
Transformers' published by the National Electrical Manufacturers 
Association (NEMA TP-1-2002).
    ``(z) Traffic Signal Modules and Pedestrian Modules.--Any traffic 
signal module or pedestrian module manufactured on or after January 1, 
2006, shall--
            ``(1) meet the performance requirements used under the 
        Energy Star program of the Environmental Protection Agency for 
        traffic signals, as in effect on the date of enactment of this 
        subsection; and
            ``(2) be installed with compatible, electrically connected 
        signal control interface devices and conflict monitoring 
        systems.

    ``(aa) Unit Heaters.--A unit heater manufactured on or after the 
date that is 3 years after the date of enactment of this subsection 
shall--
            ``(1) be equipped with an intermittent ignition device; and
            ``(2) have power venting or an automatic flue damper.

    ``(bb) Medium Base Compact Fluorescent Lamps.--(1) A bare lamp and 
covered lamp (no reflector) medium base compact fluorescent lamp 
manufactured on or after January 1, 2006, shall meet the following 
requirements prescribed by the August 9, 2001, version of the Energy 
Star Program Requirements for Compact Fluorescent Lamps, Energy Star 
Eligibility Criteria, Energy-Efficiency Specification issued by the 
Environmental Protection Agency and Department of Energy:
            ``(A) Minimum initial efficacy.
            ``(B) Lumen maintenance at 1000 hours.
            ``(C) Lumen maintenance at 40 percent of rated life.
            ``(D) Rapid cycle stress test.

[[Page 119 STAT. 632]]

            ``(E) Lamp life.

    ``(2) The Secretary may, by rule, establish requirements for color 
quality (CRI), power factor, operating frequency, and maximum allowable 
start time based on the requirements prescribed by the August 9, 2001, 
version of the Energy Star Program Requirements for Compact Fluorescent 
Lamps.
    ``(3) The Secretary may, by rule--
            ``(A) revise the requirements established under paragraph 
        (2); or
            ``(B) establish other requirements, after considering energy 
        savings, cost effectiveness, and consumer satisfaction.

    ``(cc) Dehumidifiers.--(1) Dehumidifiers manufactured on or after 
October 1, 2007, shall have an Energy Factor that meets or exceeds the 
following values:

``Product Capacity (pints/day)Minimum Energy Factor (Liters/kWh)........
25.00 or less                                                      1.00 
25.01 - 35.00                                                      1.20 
35.01 - 54.00                                                      1.30 
54.01 - 74.99                                                      1.50 
75.00 or more                                                      2.25.

    ``(2)(A) <<NOTE: Deadline. Publication. Regulations.>> Not later 
than October 1, 2009, the Secretary shall publish a final rule in 
accordance with subsections (o) and (p), to determine whether the energy 
conservation standards established under paragraph (1) should be 
amended.

    ``(B) The final rule published under subparagraph (A) shall--
            ``(i) contain any amendment by the Secretary; and
            ``(ii) <<NOTE: Applicability.>> provide that the amendment 
        applies to products manufactured on or after October 1, 2012.

    ``(C) If the Secretary does not publish an amendment that takes 
effect by October 1, 2012, dehumidifiers manufactured on or after 
October 1, 2012, shall have an Energy Factor that meets or exceeds the 
following values:

``Product Capacity (pints/day)Minimum Energy Factor (Liters/kWh)........
25.00 or less                                                      1.20 
25.01 - 35.00                                                      1.30 
35.01 - 45.00                                                      1.40 
45.01 - 54.00                                                      1.50 
54.01 - 74.99                                                      1.60 
75.00 or more                                                       2.5.

    ``(dd) Commercial Prerinse Spray Valves.--Commercial prerinse spray 
valves manufactured on or after January 1, 2006, shall have a flow rate 
of not more than 1.6 gallons per minute.
    ``(ee) Mercury Vapor Lamp Ballasts.--Mercury vapor lamp ballasts 
shall not be manufactured or imported after January 1, 2008.
    ``(ff) Ceiling Fans and Ceiling Fan Light Kits.--(1)(A) All ceiling 
fans manufactured on or after January 1, 2007, shall have the following 
features:
            ``(i) Fan speed controls separate from any lighting 
        controls.
            ``(ii) Adjustable speed controls (either more than 1 speed 
        or variable speed).
            ``(iii) Adjustable speed controls (either more than 1 speed 
        or variable speed).
            ``(iv) The capability of reversible fan action, except for--

[[Page 119 STAT. 633]]

                    ``(I) fans sold for industrial applications;
                    ``(II) outdoor applications; and
                    ``(III) cases in which safety standards would be 
                violated by the use of the reversible mode.

    ``(B) The Secretary may define the exceptions described in clause 
(iv) in greater detail, but shall not substantively expand the 
exceptions.
    ``(2)(A) Ceiling fan light kits with medium screw base sockets 
manufactured on or after January 1, 2007, shall be packaged with screw-
based lamps to fill all screw base sockets.
    ``(B) The screw-based lamps required under subparagraph (A) shall--
            ``(i) meet the Energy Star Program Requirements for Compact 
        Fluorescent Lamps, version 3.0, issued by the Department of 
        Energy; or
            ``(ii) use light sources other than compact fluorescent 
        lamps that have lumens per watt performance at least equivalent 
        to comparably configured compact fluorescent lamps meeting the 
        Energy Star Program Requirements described in clause (i).

    ``(3) Ceiling fan light kits with pin-based sockets for fluorescent 
lamps manufactured on or after January 1, 2007 shall--
            ``(A) meet the Energy Star Program Requirements for 
        Residential Light Fixtures version 4.0 issued by the 
        Environmental Protection Agency; and
            ``(B) be packaged with lamps to fill all sockets.

    ``(4)(A) <<NOTE: Deadline. Requirements.>> By January 1, 2007, the 
Secretary shall consider and issue requirements for any ceiling fan 
lighting kits other than those covered in paragraphs (2) and (3), 
including candelabra screw base sockets.

    ``(B) The requirements issued under subparagraph (A) shall be 
effective for products manufactured 2 years after the date of the final 
rule.
    ``(C) If the Secretary fails to issue a final rule by the date 
specified in subparagraph (B), any type of ceiling fan lighting kit 
described in subparagraph (A) that is manufactured after January 1, 
2009--
            ``(i) shall not be capable of operating with lamps that 
        total more than 190 watts; and
            ``(ii) shall include the lamps described in clause (i) in 
        the ceiling fan lighting kits.

    ``(5)(A) After January 1, 2010, the Secretary may consider, and 
issue, if the requirements of subsections (o) and (p) are met, amended 
energy efficiency standards for ceiling fan light kits.
    ``(B) <<NOTE: Applicability.>> Any amended standards issued under 
subparagraph (A) shall apply to products manufactured not earlier than 2 
years after the date of publication of the final rule establishing the 
amended standard.

    ``(6)(A) Notwithstanding any other provision of this Act, the 
Secretary may consider, and issue, if the requirements of subsections 
(o) and (p) are met, energy efficiency or energy use standards for 
electricity used by ceiling fans to circulate air in a room.
    ``(B) In issuing the standards under subparagraph (A), the Secretary 
shall consider--
            ``(C) exempting, or setting different standards for, certain 
        product classes for which the primary standards are not 
        technically feasible or economically justified; and

[[Page 119 STAT. 634]]

            ``(D) establishing separate exempted product classes for 
        highly decorative fans for which air movement performance is a 
        secondary design feature.

    ``(7) <<NOTE: Applicability.>> Section 327 shall apply to the 
products covered in paragraphs (1) through (4) beginning on the date of 
enactment of this subsection, except that any State or local labeling 
requirement for ceiling fans prescribed or enacted before the date of 
enactment of this subsection shall not be preempted until the labeling 
requirements applicable to ceiling fans established under section 327 
take effect.

    ``(gg) Application Date.--Section 327 applies--
            ``(1) to products for which energy conservation standards 
        are to be established under subsection (l), (u), or (v) 
        beginning on the date on which a final rule is issued by the 
        Secretary, except that any State or local standard prescribed or 
        enacted for the product before the date on which the final rule 
        is issued shall not be preempted until the energy conservation 
        standard established under subsection (l), (u), or (v) for the 
        product takes effect; and
            ``(2) to products for which energy conservation standards 
        are established under subsections (w) through (ff) on the date 
        of enactment of those subsections, except that any State or 
        local standard prescribed or enacted before the date of 
        enactment of those subsections shall not be preempted until the 
        energy conservation standards established under subsections (w) 
        through (ff) take effect.''.

    (d) General Rule of Preemption.--Section 327(c) of the Energy Policy 
and Conservation Act (42 U.S.C. 6297(c)) is amended--
            (1) in paragraph (5), by striking ``or'' at the end;
            (2) in paragraph (6), by striking the period at the end and 
        inserting ``; or''; and
            (3) by adding at the end the following:
            ``(7)(A) is a regulation concerning standards for commercial 
        prerinse spray valves adopted by the California Energy 
        Commission before January 1, 2005; or
            ``(B) is an amendment to a regulation described in 
        subparagraph (A) that was developed to align California 
        regulations with changes in American Society for Testing and 
        Materials Standard F2324;
            ``(8)(A) is a regulation concerning standards for pedestrian 
        modules adopted by the California Energy Commission before 
        January 1, 2005; or
            ``(B) is an amendment to a regulation described in 
        subparagraph (A) that was developed to align California 
        regulations to changes in the Institute for Transportation 
        Engineers standards, entitled `Performance Specification: 
        Pedestrian Traffic Control Signal Indications'.''.

SEC. 136. ENERGY CONSERVATION STANDARDS FOR COMMERCIAL EQUIPMENT.

    (a) Definitions.--Section 340 of the Energy Policy and Conservation 
Act (42 U.S.C. 6311) is amended--
            (1) in paragraph (1)--
                    (A) by redesignating subparagraphs (D) through (G) 
                as subparagraphs (H) through (K), respectively; and
                    (B) by inserting after subparagraph (C) the 
                following:

[[Page 119 STAT. 635]]

                    ``(D) Very large commercial package air conditioning 
                and heating equipment.
                    ``(E) Commercial refrigerators, freezers, and 
                refrigerator-freezers.
                    ``(F) Automatic commercial ice makers.
                    ``(G) Commercial clothes washers.'';
            (2) in paragraph (2)(B), by striking ``small and large 
        commercial package air conditioning and heating equipment'' and 
        inserting ``commercial package air conditioning and heating 
        equipment, commercial refrigerators, freezers, and refrigerator-
        freezers, automatic commercial ice makers, commercial clothes 
        washers'';
            (3) by striking paragraphs (8) and (9) and inserting the 
        following:
            ``(8)(A) The term `commercial package air conditioning and 
        heating equipment' means air-cooled, water-cooled, 
        evaporatively-cooled, or water source (not including ground 
        water source) electrically operated, unitary central air 
        conditioners and central air conditioning heat pumps for 
        commercial application.
            ``(B) The term `small commercial package air conditioning 
        and heating equipment' means commercial package air conditioning 
        and heating equipment that is rated below 135,000 Btu per hour 
        (cooling capacity).
            ``(C) The term `large commercial package air conditioning 
        and heating equipment' means commercial package air conditioning 
        and heating equipment that is rated--
                    ``(i) at or above 135,000 Btu per hour; and
                    ``(ii) below 240,000 Btu per hour (cooling 
                capacity).
            ``(D) The term `very large commercial package air 
        conditioning and heating equipment' means commercial package air 
        conditioning and heating equipment that is rated--
                    ``(i) at or above 240,000 Btu per hour; and
                    ``(ii) below 760,000 Btu per hour (cooling 
                capacity).
            ``(9)(A) The term `commercial refrigerator, freezer, and 
        refrigerator-freezer' means refrigeration equipment that--
                    ``(i) is not a consumer product (as defined in 
                section 321);
                    ``(ii) is not designed and marketed exclusively for 
                medical, scientific, or research purposes;
                    ``(iii) operates at a chilled, frozen, combination 
                chilled and frozen, or variable temperature;
                    ``(iv) displays or stores merchandise and other 
                perishable materials horizontally, semivertically, or 
                vertically;
                    ``(v) has transparent or solid doors, sliding or 
                hinged doors, a combination of hinged, sliding, 
                transparent, or solid doors, or no doors;
                    ``(vi) is designed for pull-down temperature 
                applications or holding temperature applications; and
                    ``(vii) is connected to a self-contained condensing 
                unit or to a remote condensing unit.
            ``(B) The term `holding temperature application' means a use 
        of commercial refrigeration equipment other than a pull-down 
        temperature application, except a blast chiller or freezer.
            ``(C) The term `integrated average temperature' means the 
        average temperature of all test package measurements taken 
        during the test.

[[Page 119 STAT. 636]]

            ``(D) The term `pull-down temperature application' means a 
        commercial refrigerator with doors that, when fully loaded with 
        12 ounce beverage cans at 90 degrees F, can cool those beverages 
        to an average stable temperature of 38 degrees F in 12 hours or 
        less.
            ``(E) The term `remote condensing unit' means a factory-made 
        assembly of refrigerating components designed to compress and 
        liquefy a specific refrigerant that is remotely located from the 
        refrigerated equipment and consists of one or more refrigerant 
        compressors, refrigerant condensers, condenser fans and motors, 
        and factory supplied accessories.
            ``(F) The term `self-contained condensing unit' means a 
        factory-made assembly of refrigerating components designed to 
        compress and liquefy a specific refrigerant that is an integral 
        part of the refrigerated equipment and consists of one or more 
        refrigerant compressors, refrigerant condensers, condenser fans 
        and motors, and factory supplied accessories.''; and
            (4) by adding at the end the following:
            ``(19) The term `automatic commercial ice maker' means a 
        factory-made assembly (not necessarily shipped in one package) 
        that--
                    ``(A) consists of a condensing unit and ice-making 
                section operating as an integrated unit, with means for 
                making and harvesting ice; and
                    ``(B) may include means for storing ice, dispensing 
                ice, or storing and dispensing ice.
            ``(20) The term `commercial clothes washer' means a soft-
        mount front-loading or soft-mount top-loading clothes washer 
        that--
                    ``(A) has a clothes container compartment that--
                          ``(i) for horizontal-axis clothes washers, is 
                      not more than 3.5 cubic feet; and
                          ``(ii) for vertical-axis clothes washers, is 
                      not more than 4.0 cubic feet; and
                    ``(B) is designed for use in--
                          ``(i) applications in which the occupants of 
                      more than one household will be using the clothes 
                      washer, such as multi-family housing common areas 
                      and coin laundries; or
                          ``(ii) other commercial applications.
            ``(21) The term `harvest rate' means the amount of ice (at 
        32 degrees F) in pounds produced per 24 hours.''.

    (b) Standards for Commercial Package Air Conditioning and Heating 
Equipment.--Section 342(a) of the Energy Policy and Conservation Act (42 
U.S.C. 6313(a)) is amended--
            (1) in the subsection heading, by striking ``Small and 
        Large'' and inserting ``Small, Large, and Very Large'';
            (2) in paragraph (1), by inserting ``but before January 1, 
        2010,'' after ``January 1, 1994,'';
            (3) in paragraph (2), by inserting ``but before January 1, 
        2010,'' after ``January 1, 1995,''; and
            (4) in paragraph (6)--
                    (A) in subparagraph (A)--
                          (i) by inserting ``(i)'' after ``(A)'';
                          (ii) by striking ``the date of enactment of 
                      the Energy Policy Act of 1992'' and inserting 
                      ``January 1, 2010'';

[[Page 119 STAT. 637]]

                          (iii) by inserting after ``large commercial 
                      package air conditioning and heating equipment,'' 
                      the following: ``and very large commercial package 
                      air conditioning and heating equipment, or if 
                      ASHRAE/IES Standard 90.1, as in effect on October 
                      24, 1992, is amended with respect to any''; and
                          (iv) by adding at the end the following:

    ``(ii) If ASHRAE/IES Standard 90.1 is not amended with respect to 
small commercial package air conditioning and heating equipment, large 
commercial package air conditioning and heating equipment, and very 
large commercial package air conditioning and heating equipment during 
the 5-year period beginning on the effective date of a standard, the 
Secretary may initiate a rulemaking to determine whether a more 
stringent standard--
            ``(I) would result in significant additional conservation of 
        energy; and
            ``(II) is technologically feasible and economically 
        justified.''; and
                    (B) in subparagraph (C)(ii), by inserting ``and very 
                large commercial package air conditioning and heating 
                equipment'' after ``large commercial package air 
                conditioning and heating equipment''; and
            (5) by adding at the end the following:

    ``(7) Small commercial package air conditioning and heating 
equipment manufactured on or after January 1, 2010, shall meet the 
following standards:
            ``(A) The minimum energy efficiency ratio of air-cooled 
        central air conditioners at or above 65,000 Btu per hour 
        (cooling capacity) and less than 135,000 Btu per hour (cooling 
        capacity) shall be--
                    ``(i) 11.2 for equipment with no heating or electric 
                resistance heating; and
                    ``(ii) 11.0 for equipment with all other heating 
                system types that are integrated into the equipment (at 
                a standard rating of 95 degrees F db).
            ``(B) The minimum energy efficiency ratio of air-cooled 
        central air conditioner heat pumps at or above 65,000 Btu per 
        hour (cooling capacity) and less than 135,000 Btu per hour 
        (cooling capacity) shall be--
                    ``(i) 11.0 for equipment with no heating or electric 
                resistance heating; and
                    ``(ii) 10.8 for equipment with all other heating 
                system types that are integrated into the equipment (at 
                a standard rating of 95 degrees F db).
            ``(C) The minimum coefficient of performance in the heating 
        mode of air-cooled central air conditioning heat pumps at or 
        above 65,000 Btu per hour (cooling capacity) and less than 
        135,000 Btu per hour (cooling capacity) shall be 3.3 (at a high 
        temperature rating of 47 degrees F db).

    ``(8) Large commercial package air conditioning and heating 
equipment manufactured on or after January 1, 2010, shall meet the 
following standards:
            ``(A) The minimum energy efficiency ratio of air-cooled 
        central air conditioners at or above 135,000 Btu per hour 
        (cooling capacity) and less than 240,000 Btu per hour (cooling 
        capacity) shall be--

[[Page 119 STAT. 638]]

                    ``(i) 11.0 for equipment with no heating or electric 
                resistance heating; and
                    ``(ii) 10.8 for equipment with all other heating 
                system types that are integrated into the equipment (at 
                a standard rating of 95 degrees F db).
            ``(B) The minimum energy efficiency ratio of air-cooled 
        central air conditioner heat pumps at or above 135,000 Btu per 
        hour (cooling capacity) and less than 240,000 Btu per hour 
        (cooling capacity) shall be--
                    ``(i) 10.6 for equipment with no heating or electric 
                resistance heating; and
                    ``(ii) 10.4 for equipment with all other heating 
                system types that are integrated into the equipment (at 
                a standard rating of 95 degrees F db).
            ``(C) The minimum coefficient of performance in the heating 
        mode of air-cooled central air conditioning heat pumps at or 
        above 135,000 Btu per hour (cooling capacity) and less than 
        240,000 Btu per hour (cooling capacity) shall be 3.2 (at a high 
        temperature rating of 47 degrees F db).

    ``(9) Very large commercial package air conditioning and heating 
equipment manufactured on or after January 1, 2010, shall meet the 
following standards:
            ``(A) The minimum energy efficiency ratio of air-cooled 
        central air conditioners at or above 240,000 Btu per hour 
        (cooling capacity) and less than 760,000 Btu per hour (cooling 
        capacity) shall be--
                    ``(i) 10.0 for equipment with no heating or electric 
                resistance heating; and
                    ``(ii) 9.8 for equipment with all other heating 
                system types that are integrated into the equipment (at 
                a standard rating of 95 degrees F db).
            ``(B) The minimum energy efficiency ratio of air-cooled 
        central air conditioner heat pumps at or above 240,000 Btu per 
        hour (cooling capacity) and less than 760,000 Btu per hour 
        (cooling capacity) shall be--
                    ``(i) 9.5 for equipment with no heating or electric 
                resistance heating; and
                    ``(ii) 9.3 for equipment with all other heating 
                system types that are integrated into the equipment (at 
                a standard rating of 95 degrees F db).
            ``(C) The minimum coefficient of performance in the heating 
        mode of air-cooled central air conditioning heat pumps at or 
        above 240,000 Btu per hour (cooling capacity) and less than 
        760,000 Btu per hour (cooling capacity) shall be 3.2 (at a high 
        temperature rating of 47 degrees F db).''.

    (c) Standards for Commercial Refrigerators, Freezers, and 
Refrigerator-Freezers.--Section 342 of the Energy Policy and 
Conservation Act (42 U.S.C. 6313) is amended by adding at the end the 
following:
    ``(c) Commercial Refrigerators, Freezers, and Refrigerator-
Freezers.--(1) In this subsection:
            ``(A) The term `AV' means the adjusted volume 
        (ft<SUP>3</SUP>) (defined as 1.63 x frozen temperature 
        compartment volume (ft<SUP>3</SUP>) + chilled temperature 
        compartment volume (ft<SUP>3</SUP>)) with compartment volumes 
        measured in accordance with the Association of Home Appliance 
        Manufacturers Standard HRF1-1979.

[[Page 119 STAT. 639]]

            ``(B) The term `V' means the chilled or frozen compartment 
        volume (ft<SUP>3</SUP>) (as defined in the Association of Home 
        Appliance Manufacturers Standard HRF1-1979).
            ``(C) Other terms have such meanings as may be established 
        by the Secretary, based on industry-accepted definitions and 
        practice.

    ``(2) Each commercial refrigerator, freezer, and refrigerator-
freezer with a self-contained condensing unit designed for holding 
temperature applications manufactured on or after January 1, 2010, shall 
have a daily energy consumption (in kilowatt hours per day) that does 
not exceed the following:

 
 
 
  Refrigerators with solid doors..  0.10 V + 2.04
  Refrigerators with transparent    0.12 V + 3.34
   doors.
  Freezers with solid doors.......  0.40 V + 1.38
  Freezers with transparent doors.  0.75 V + 4.10
  Refrigerators/freezers with       0.27 AV - 0.71 or 0.70.
   solid doors the greater of.


    ``(3) Each commercial refrigerator with a self-contained condensing 
unit designed for pull-down temperature applications and transparent 
doors manufactured on or after January 1, 2010, shall have a daily 
energy consumption (in kilowatt hours per day) of not more than 0.126 V 
+ 3.51.
    ``(4)(A) <<NOTE: Deadline. Regulations.>> Not later than January 1, 
2009, the Secretary shall issue, by rule, standard levels for ice-cream 
freezers, self-contained commercial refrigerators, freezers, and 
refrigerator-freezers without doors, and remote condensing commercial 
refrigerators, freezers, and refrigerator-freezers, with the standard 
levels effective for equipment manufactured on or after January 1, 2012.

    ``(B) The Secretary may issue, by rule, standard levels for other 
types of commercial refrigerators, freezers, and refrigerator-freezers 
not covered by paragraph (2)(A) with the standard levels effective for 
equipment manufactured 3 or more years after the date on which the final 
rule is published.
    ``(5)(A) <<NOTE: Deadlines. Regulations.>> Not later than January 1, 
2013, the Secretary shall issue a final rule to determine whether the 
standards established under this subsection should be amended.

    ``(B) Not later than 3 years after the effective date of any amended 
standards under subparagraph (A) or the publication of a final rule 
determining that the standards should not be amended, the Secretary 
shall issue a final rule to determine whether the standards established 
under this subsection or the amended standards, as applicable, should be 
amended.
    ``(C) <<NOTE: Applicability.>> If the Secretary issues a final rule 
under subparagraph (A) or (B) establishing amended standards, the final 
rule shall provide that the amended standards apply to products 
manufactured on or after the date that is--
            ``(i) 3 years after the date on which the final amended 
        standard is published; or
            ``(ii) if the Secretary determines, by rule, that 3 years is 
        inadequate, not later than 5 years after the date on which the 
        final rule is published.''.

    (d) Standards for Automatic Commercial Ice Makers.--Section 342 of 
the Energy Policy and Conservation Act (42 U.S.C.

[[Page 119 STAT. 640]]

6313) (as amended by subsection (c)) is amended by adding at the end the 
following:
    ``(d) Automatic Commercial Ice Makers.--(1) Each automatic 
commercial ice maker that produces cube type ice with capacities between 
50 and 2500 pounds per 24-hour period when tested according to the test 
standard established in section 343(a)(7) and is manufactured on or 
after January 1, 2010, shall meet the following standard levels:
      

----------------------------------------------------------------------------------------------------------------
                                                                                               Maximum Condenser
         Equipment Type             Type of     Harvest Rate (lbs ice/   Maximum Energy Use   Water Use (gal/100
                                    Cooling           24 hours)           (kWh/100 lbs Ice)        lbs Ice)
----------------------------------------------------------------------------------------------------------------
Ice Making Head                  Water         <500                     7.80-0.0055H          200-0.022H
                                              ------------------------------------------------------------------
                                               500 and <1436            5.58-0.0011H          200-0.022H
                                              ------------------------------------------------------------------
                                               1436                     4.0                   200-0.022H
----------------------------------------------------------------------------------------------------------------
Ice Making Head                  Air           <450                     10.26-0.0086H         Not Applicable
                                              ------------------------------------------------------------------
                                               450                      6.89-0.0011H          Not Applicable
----------------------------------------------------------------------------------------------------------------
Remote Condensing                Air           <1000                    8.85-0.0038H          Not Applicable
(but not remote
compressor)
                                              ------------------------------------------------------------------
                                               1000                     5.10                  Not Applicable
----------------------------------------------------------------------------------------------------------------
Remote Condensing                Air           <934                     8.85-0.0038H          Not Applicable
and Remote
Compressor
                                              ------------------------------------------------------------------
                                               934                      5.3                   Not Applicable
----------------------------------------------------------------------------------------------------------------
Self Contained                   Water         <200                     11.40-0.019H          191-0.0315H
                                              ------------------------------------------------------------------
                                               200                      7.60                  191-0.0315H
----------------------------------------------------------------------------------------------------------------
Self Contained                   Air           <175                     18.0-0.0469H          Not Applicable
                                              ------------------------------------------------------------------
                                               175                      9.80                  Not Applicable
----------------------------------------------------------------------------------------------------------------
H = Harvest rate in pounds per 24 hours.
Water use is for the condenser only and does not include potable water used to make ice.

    ``(2)(A) The Secretary may issue, by rule, standard levels for types 
of automatic commercial ice makers that are not covered by paragraph 
(1).
    ``(B) <<NOTE: Applicability.>> The standards established under 
subparagraph (A) shall apply to products manufactured on or after the 
date that is--
            ``(i) 3 years after the date on which the rule is published 
        under subparagraph (A); or

[[Page 119 STAT. 641]]

            ``(ii) <<NOTE: Deadline.>> if the Secretary determines, by 
        rule, that 3 years is inadequate, not later than 5 years after 
        the date on which the final rule is published.

    ``(3)(A) <<NOTE: Deadlines. Regulations.>> Not later than January 1, 
2015, with respect to the standards established under paragraph (1), 
and, with respect to the standards established under paragraph (2), not 
later than 5 years after the date on which the standards take effect, 
the Secretary shall issue a final rule to determine whether amending the 
applicable standards is technologically feasible and economically 
justified.

    ``(B) Not later than 5 years after the effective date of any amended 
standards under subparagraph (A) or the publication of a final rule 
determining that amending the standards is not technologically feasible 
or economically justified, the Secretary shall issue a final rule to 
determine whether amending the standards established under paragraph (1) 
or the amended standards, as applicable, is technologically feasible or 
economically justified.
    ``(C) <<NOTE: Applicability.>> If the Secretary issues a final rule 
under subparagraph (A) or (B) establishing amended standards, the final 
rule shall provide that the amended standards apply to products 
manufactured on or after the date that is--
            ``(i) 3 years after the date on which the final amended 
        standard is published; or
            ``(ii) if the Secretary determines, by rule, that 3 years is 
        inadequate, not later than 5 years after the date on which the 
        final amended standard is published.

    ``(4) A final rule issued under paragraph (2) or (3) shall establish 
standards at the maximum level that is technically feasible and 
economically justified, as provided in subsections (o) and (p) of 
section 325.''.
    (e) Standards for Commercial Clothes Washers.--Section 342 of the 
Energy Policy and Conservation Act (42 U.S.C. 6313) (as amended by 
subsection (d)) is amended by adding at the end the following:
    ``(e) Commercial Clothes Washers.--(1) Each commercial clothes 
washer manufactured on or after January 1, 2007, shall have--
            ``(A) a Modified Energy Factor of at least 1.26; and
            ``(B) a Water Factor of not more than 9.5.

    ``(2)(A)(i) <<NOTE: Deadlines. Publication. Regulations.>> Not later 
than January 1, 2010, the Secretary shall publish a final rule to 
determine whether the standards established under paragraph (1) should 
be amended.

    ``(ii) <<NOTE: Applicability.>> The rule published under clause (i) 
shall provide that any amended standard shall apply to products 
manufactured 3 years after the date on which the final amended standard 
is published.

    ``(B)(i) Not later than January 1, 2015, the Secretary shall publish 
a final rule to determine whether the standards established under 
paragraph (1) should be amended.
    ``(ii) <<NOTE: Applicability.>> The rule published under clause (i) 
shall provide that any amended standard shall apply to products 
manufactured 3 years after the date on which the final amended standard 
is published.''.

    (f) Test Procedures.--Section 343 of the Energy Policy and 
Conservation Act (42 U.S.C. 6314) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (4)--

[[Page 119 STAT. 642]]

                          (i) in subparagraph (A), by inserting ``very 
                      large commercial package air conditioning and 
                      heating equipment,'' after ``large commercial 
                      package air conditioning and heating equipment,''; 
                      and
                          (ii) in subparagraph (B), by inserting ``very 
                      large commercial package air conditioning and 
                      heating equipment,'' after ``large commercial 
                      package air conditioning and heating equipment,''; 
                      and
                    (B) by adding at the end the following:

    ``(6)(A)(i) In the case of commercial refrigerators, freezers, and 
refrigerator-freezers, the test procedures shall be--
            ``(I) the test procedures determined by the Secretary to be 
        generally accepted industry testing procedures; or
            ``(II) rating procedures developed or recognized by the 
        ASHRAE or by the American National Standards Institute.

    ``(ii) In the case of self-contained refrigerators, freezers, and 
refrigerator-freezers to which standards are applicable under paragraphs 
(2) and (3) of section 342(c), the initial test procedures shall be the 
ASHRAE 117 test procedure that is in effect on January 1, 2005.
    ``(B)(i) In the case of commercial refrigerators, freezers, and 
refrigerator-freezers with doors covered by the standards adopted in 
February 2002, by the California Energy Commission, the rating 
temperatures shall be the integrated average temperature of 38 degrees F 
( <plus-minus>  2 degrees F) for refrigerator compartments and 0 degrees 
F ( <plus-minus>  2 degrees F) for freezer compartments.
    ``(C) <<NOTE: Regulations.>> The Secretary shall issue a rule in 
accordance with paragraphs (2) and (3) to establish the appropriate 
rating temperatures for the other products for which standards will be 
established under section 342(c)(4).

    ``(D) In establishing the appropriate test temperatures under this 
subparagraph, the Secretary shall follow the procedures and meet the 
requirements under section 323(e).
    ``(E)(i) <<NOTE: Deadline. Regulations.>> Not later than 180 days 
after the publication of the new ASHRAE 117 test procedure, if the 
ASHRAE 117 test procedure for commercial refrigerators, freezers, and 
refrigerator-freezers is amended, the Secretary shall, by rule, amend 
the test procedure for the product as necessary to ensure that the test 
procedure is consistent with the amended ASHRAE 117 test procedure, 
unless the Secretary makes a determination, by rule, and supported by 
clear and convincing evidence, that to do so would not meet the 
requirements for test procedures under paragraphs (2) and (3).

    ``(ii) <<NOTE: Notice. Federal Register, publication.>> If the 
Secretary determines that 180 days is an insufficient period during 
which to review and adopt the amended test procedure or rating procedure 
under clause (i), the Secretary shall publish a notice in the Federal 
Register stating the intent of the Secretary to wait not longer than 1 
additional year before putting into effect an amended test procedure or 
rating procedure.

    ``(F)(i) <<NOTE: Regulations.>> If a test procedure other than the 
ASHRAE 117 test procedure is approved by the American National Standards 
Institute, the Secretary shall, by rule--
            ``(I) review the relative strengths and weaknesses of the 
        new test procedure relative to the ASHRAE 117 test procedure; 
        and
            ``(II) based on that review, adopt one new test procedure 
        for use in the standards program.

    ``(ii) <<NOTE: Applicability.>> If a new test procedure is adopted 
under clause (i)--

[[Page 119 STAT. 643]]

            ``(I) section 323(e) shall apply; and
            ``(II) subparagraph (B) shall apply to the adopted test 
        procedure.

    ``(7)(A) In the case of automatic commercial ice makers, the test 
procedures shall be the test procedures specified in Air-Conditioning 
and Refrigeration Institute Standard 810-2003, as in effect on January 
1, 2005.
    ``(B)(i) <<NOTE: Regulations. Federal Register, publication.>> If 
Air-Conditioning and Refrigeration Institute Standard 810-2003 is 
amended, the Secretary shall amend the test procedures established in 
subparagraph (A) as necessary to be consistent with the amended Air-
Conditioning and Refrigeration Institute Standard, unless the Secretary 
determines, by rule, published in the Federal Register and supported by 
clear and convincing evidence, that to do so would not meet the 
requirements for test procedures under paragraphs (2) and (3).

    ``(ii) If the Secretary issues a rule under clause (i) containing a 
determination described in clause (ii), the rule may establish an 
amended test procedure for the product that meets the requirements of 
paragraphs (2) and (3).
    ``(C) The Secretary shall comply with section 323(e) in establishing 
any amended test procedure under this paragraph.
    ``(8) With respect to commercial clothes washers, the test 
procedures shall be the same as the test procedures established by the 
Secretary for residential clothes washers under section 325(g).''; and
            (2) in subsection (d)(1), by inserting ``very large 
        commercial package air conditioning and heating equipment, 
        commercial refrigerators, freezers, and refrigerator-freezers, 
        automatic commercial ice makers, commercial clothes washers,'' 
        after ``large commercial package air conditioning and heating 
        equipment,''.

    (g) Labeling.--Section 344(e) of the Energy Policy and Conservation 
Act (42 U.S.C. 6315(e)) is amended by inserting ``very large commercial 
package air conditioning and heating equipment, commercial 
refrigerators, freezers, and refrigerator-freezers, automatic commercial 
ice makers, commercial clothes washers,'' after ``large commercial 
package air conditioning and heating equipment,'' each place it appears.
    (h) Administration, <<NOTE: Applicability.>> Penalties, Enforcement, 
and Preemption.--Section 345 of the Energy Policy and Conservation Act 
(42 U.S.C. 6316) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (7), by striking ``and'' at the 
                end;
                    (B) in paragraph (8), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(9) in the case of commercial clothes washers, section 
        327(b)(1) shall be applied as if the National Appliance Energy 
        Conservation Act of 1987 was the Energy Policy Act of 2005.'';
            (2) in the first sentence of subsection (b)(1), by striking 
        ``part B'' and inserting ``part A''; and
            (3) by adding at the end the following:

    ``(d)(1) Except as provided in paragraphs (2) and (3), section 327 
shall apply with respect to very large commercial package air 
conditioning and heating equipment to the same extent and in the same 
manner as section 327 applies under part A on the date of enactment of 
this subsection.

[[Page 119 STAT. 644]]

    ``(2) <<NOTE: Effective date.>> Any State or local standard issued 
before the date of enactment of this subsection shall not be preempted 
until the standards established under section 342(a)(9) take effect on 
January 1, 2010.

    ``(e)(1)(A) <<NOTE: Applicability.>> Subsections (a), (b), and (d) 
of section 326, subsections (m) through (s) of section 325, and sections 
328 through 336 shall apply with respect to commercial refrigerators, 
freezers, and refrigerator-freezers to the same extent and in the same 
manner as those provisions apply under part A.

    ``(B) In applying those provisions to commercial refrigerators, 
freezers, and refrigerator-freezers, paragraphs (1), (2), (3), and (4) 
of subsection (a) shall apply.
    ``(2)(A) Section 327 shall apply to commercial refrigerators, 
freezers, and refrigerator-freezers for which standards are established 
under paragraphs (2) and (3) of section 342(c) to the same extent and in 
the same manner as those provisions apply under part A on the date of 
enactment of this subsection, except that any State or local standard 
issued before the date of enactment of this subsection shall not be 
preempted until the standards established under paragraphs (2) and (3) 
of section 342(c) take effect.
    ``(B) In applying section 327 in accordance with subparagraph (A), 
paragraphs (1), (2), and (3) of subsection (a) shall apply.
    ``(3)(A) Section 327 shall apply to commercial refrigerators, 
freezers, and refrigerator-freezers for which standards are established 
under section 342(c)(4) to the same extent and in the same manner as the 
provisions apply under part A on the date of publication of the final 
rule by the Secretary, except that any State or local standard issued 
before the date of publication of the final rule by the Secretary shall 
not be preempted until the standards take effect.
    ``(B) In applying section 327 in accordance with subparagraph (A), 
paragraphs (1), (2), and (3) of subsection (a) shall apply.
    ``(4)(A) If the Secretary does not issue a final rule for a specific 
type of commercial refrigerator, freezer, or refrigerator-freezer within 
the time frame specified in section 342(c)(5), subsections (b) and (c) 
of section 327 shall not apply to that specific type of refrigerator, 
freezer, or refrigerator-freezer for the period beginning on the date 
that is 2 years after the scheduled date for a final rule and ending on 
the date on which the Secretary publishes a final rule covering the 
specific type of refrigerator, freezer, or refrigerator-freezer.
    ``(B) Any State or local standard issued before the date of 
publication of the final rule shall not be preempted until the final 
rule takes effect.
    ``(5)(A) <<NOTE: Certification.>> In the case of any commercial 
refrigerator, freezer, or refrigerator-freezer to which standards are 
applicable under paragraphs (2) and (3) of section 342(c), the Secretary 
shall require manufacturers to certify, through an independent, 
nationally recognized testing or certification program, that the 
commercial refrigerator, freezer, or refrigerator-freezer meets the 
applicable standard.

    ``(B) The Secretary shall, to the maximum extent practicable, 
encourage the establishment of at least 2 independent testing and 
certification programs.
    ``(C) <<NOTE: Records.>> As part of certification, information on 
equipment energy use and interior volume shall be made available to the 
Secretary.

    ``(f)(1)(A)(i) <<NOTE: Applicability.>> Except as provided in clause 
(ii), section 327 shall apply to automatic commercial ice makers for 
which standards

[[Page 119 STAT. 645]]

have been established under section 342(d)(1) to the same extent and in 
the same manner as the section applies under part A on the date of 
enactment of this subsection.
    ``(ii) Any State standard issued before the date of enactment of 
this subsection shall not be preempted until the standards established 
under section 342(d)(1) take effect.
    ``(B) In applying section 327 to the equipment under subparagraph 
(A), paragraphs (1), (2), and (3) of subsection (a) shall apply.
    ``(2)(A)(i) Except as provided in clause (ii), section 327 shall 
apply to automatic commercial ice makers for which standards have been 
established under section 342(d)(2) to the same extent and in the same 
manner as the section applies under part A on the date of publication of 
the final rule by the Secretary.
    ``(ii) Any State standard issued before the date of publication of 
the final rule by the Secretary shall not be preempted until the 
standards established under section 342(d)(2) take effect.
    ``(B) In applying section 327 in accordance with subparagraph (A), 
paragraphs (1), (2), and (3) of subsection (a) shall apply.
    ``(3)(A) If the Secretary does not issue a final rule for a specific 
type of automatic commercial ice maker within the time frame specified 
in section 342(d), subsections (b) and (c) of section 327 shall no 
longer apply to the specific type of automatic commercial ice maker for 
the period beginning on the day after the scheduled date for a final 
rule and ending on the date on which the Secretary publishes a final 
rule covering the specific type of automatic commercial ice maker.
    ``(B) Any State standard issued before the publication of the final 
rule shall not be preempted until the standards established in the final 
rule take effect.
    ``(4)(A) The Secretary shall monitor whether manufacturers are 
reducing harvest rates below tested values for the purpose of bringing 
non-complying equipment into compliance.
    ``(B) If the Secretary finds that there has been a substantial 
amount of manipulation with respect to harvest rates under subparagraph 
(A), the Secretary shall take steps to minimize the manipulation, such 
as requiring harvest rates to be within 5 percent of tested values.
    ``(g)(1)(A) If the Secretary does not issue a final rule for 
commercial clothes washers within the timeframe specified in section 
342(e)(2), subsections (b) and (c) of section 327 shall not apply to 
commercial clothes washers for the period beginning on the day after the 
scheduled date for a final rule and ending on the date on which the 
Secretary publishes a final rule covering commercial clothes washers.
    ``(B) Any State or local standard issued before the date on which 
the Secretary publishes a final rule shall not be preempted until the 
standards established under section 342(e)(2) take effect.
    ``(2) The Secretary shall undertake an educational program to inform 
owners of laundromats, multifamily housing, and other sites where 
commercial clothes washers are located about the new standard, including 
impacts on washer purchase costs and options for recovering those costs 
through coin collection.''.

SEC. 137. ENERGY LABELING.

    (a) Rulemaking on Effectiveness of Consumer Product Labeling.--
Section 324(a)(2) of the Energy Policy and Conservation

[[Page 119 STAT. 646]]

Act (42 U.S.C. 6294(a)(2)) is amended by adding at the end the 
following:
    ``(F)(i) <<NOTE: Deadlines.>> Not later than 90 days after the date 
of enactment of this subparagraph, the Commission shall initiate a 
rulemaking to consider--
            ``(I) the effectiveness of the consumer products labeling 
        program in assisting consumers in making purchasing decisions 
        and improving energy efficiency; and
            ``(II) changes to the labeling rules (including categorical 
        labeling) that would improve the effectiveness of consumer 
        product labels.

    ``(ii) Not later than 2 years after the date of enactment of this 
subparagraph, the Commission shall complete the rulemaking initiated 
under clause (i).
    ``(G)(i) <<NOTE: Deadline.>> Not later than 18 months after the date 
of enactment of this subparagraph, the Commission shall issue by rule, 
in accordance with this section, labeling requirements for the 
electricity used by ceiling fans to circulate air in a room.

    ``(ii) <<NOTE: Applicability.>> The rule issued under clause (i) 
shall apply to products manufactured after the later of--
            ``(I) January 1, 2009; or
            ``(II) the date that is 60 days after the final rule is 
        issued.''.

    (b) Rulemaking on Labeling for Additional Products.--Section 324(a) 
of the Energy Policy and Conservation Act (42 U.S.C. 6294(a)) is amended 
by adding at the end the following:
    ``(5)(A) For covered products described in subsections (u) through 
(ff) of section 325, after a test procedure has been prescribed under 
section 323, the Secretary or the Commission, as appropriate, may 
prescribe, by rule, under this section labeling requirements for the 
products.
    ``(B) In the case of products to which TP-1 standards under section 
325(y) apply, labeling requirements shall be based on the `Standard for 
the Labeling of Distribution Transformer Efficiency' prescribed by the 
National Electrical Manufacturers Association (NEMA TP-3) as in effect 
on the date of enactment of this paragraph.
    ``(C) In the case of dehumidifiers covered under section 325(dd), 
the Commission shall not require an `Energy Guide' label.''.

SEC. 138. INTERMITTENT ESCALATOR STUDY.

    (a) In General.--The Administrator of General Services shall conduct 
a study on the advantages and disadvantages of employing intermittent 
escalators in the United States.
    (b) Contents.--Such study shall include an analysis of--
            (1) the energy end-cost savings derived from the use of 
        intermittent escalators;
            (2) the cost savings derived from reduced maintenance 
        requirements; and
            (3) such other issues as the Administrator considers 
        appropriate.

    (c) Report to Congress.--Not later than 1 year after the date of 
enactment of this Act, the Administrator shall transmit to Congress a 
report on the results of the study.
    (d) Definition.--For purposes of this section, the term 
``intermittent escalator'' means an escalator that remains in a 
stationary

[[Page 119 STAT. 647]]

position until it automatically operates at the approach of a passenger, 
returning to a stationary position after the passenger completes 
passage.

SEC. 139. ENERGY EFFICIENT ELECTRIC AND NATURAL GAS UTILITIES STUDY.

    (a) In General.--Not <<NOTE: Deadline.>> later than 1 year after the 
date of enactment of this Act, the Secretary, in consultation with the 
National Association of Regulatory Utility Commissioners and the 
National Association of State Energy Officials, shall conduct a study of 
State and regional policies that promote cost-effective programs to 
reduce energy consumption (including energy efficiency programs) that 
are carried out by--
            (1) utilities that are subject to State regulation; and
            (2) nonregulated utilities.

    (b) Consideration.--In conducting the study under subsection (a), 
the Secretary shall take into consideration--
            (1) performance standards for achieving energy use and 
        demand reduction targets;
            (2) funding sources, including rate surcharges;
            (3) infrastructure planning approaches (including energy 
        efficiency programs) and infrastructure improvements;
            (4) the costs and benefits of consumer education programs 
        conducted by State and local governments and local utilities to 
        increase consumer awareness of energy efficiency technologies 
        and measures; and
            (5) methods of--
                    (A) removing disincentives for utilities to 
                implement energy efficiency programs;
                    (B) encouraging utilities to undertake voluntary 
                energy efficiency programs; and
                    (C) ensuring appropriate returns on energy 
                efficiency programs.

    (c) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall submit to Congress a report that 
includes--
            (1) the findings of the study; and
            (2) any recommendations of the Secretary, including 
        recommendations on model policies to promote energy efficiency 
        programs.

SEC. 140. <<NOTE: 42 USC 15833.>> ENERGY EFFICIENCY PILOT PROGRAM.

    (a) In General.--The Secretary shall establish a pilot program under 
which the Secretary provides financial assistance to at least 3, but not 
more than 7, States to carry out pilot projects in the States for--
            (1) planning and adopting statewide programs that encourage, 
        for each year in which the pilot project is carried out--
                    (A) energy efficiency; and
                    (B) reduction of consumption of electricity or 
                natural gas in the State by at least 0.75 percent, as 
                compared to a baseline determined by the Secretary for 
                the period preceding the implementation of the program; 
                or
            (2) for any State that has adopted a statewide program as of 
        the date of enactment of this Act, activities that reduce energy 
        consumption in the State by expanding and improving the program.

[[Page 119 STAT. 648]]

    (b) Verification.--A State that receives financial assistance under 
subsection (a)(1) shall submit to the Secretary independent verification 
of any energy savings achieved through the statewide program.
    (c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $5,000,000 for each of fiscal 
years 2006 through 2010, to remain available until expended.

SEC. 141. <<NOTE: 42 USC 15834.>> REPORT ON FAILURE TO COMPLY WITH 
            DEADLINES FOR NEW OR REVISED ENERGY CONSERVATION STANDARDS.

    (a) Initial Report.--The Secretary shall submit a report to Congress 
regarding each new or revised energy conservation or water use standard 
which the Secretary has failed to issue in conformance with the 
deadlines established in the Energy Policy and Conservation Act. Such 
report shall state the reasons why the Secretary has failed to comply 
with the deadline for issuances of the new or revised standard and set 
forth the Secretary's plan for expeditiously prescribing such new or 
revised standard. The Secretary's initial report shall be submitted not 
later than 6 months following enactment of this Act and subsequent 
reports shall be submitted whenever the Secretary determines that 
additional deadlines for issuance of new or revised standards have been 
missed.
    (b) Implementation Report.--Every 6 months following the submission 
of a report under subsection (a) until the adoption of a new or revised 
standard described in such report, the Secretary shall submit to the 
Congress an implementation report describing the Secretary's progress in 
implementing the Secretary's plan or the issuance of the new or revised 
standard.

                       Subtitle D--Public Housing

SEC. 151. PUBLIC HOUSING CAPITAL FUND.

    Section 9 of the United States Housing Act of 1937 (42 U.S.C. 1437g) 
is amended--
            (1) in subsection (d)(1)--
                    (A) in subparagraph (I), by striking ``and'' at the 
                end;
                    (B) in subparagraph (J), by striking the period at 
                the end and inserting a semicolon; and
                    (C) by adding at the end the following new 
                subparagraphs:
                    ``(K) improvement of energy and water-use efficiency 
                by installing fixtures and fittings that conform to the 
                American Society of Mechanical Engineers/American 
                National Standards Institute standards A112.19.2-1998 
                and A112.18.1-2000, or any revision thereto, applicable 
                at the time of installation, and by increasing energy 
                efficiency and water conservation by such other means as 
                the Secretary determines are appropriate; and
                    ``(L) integrated utility management and capital 
                planning to maximize energy conservation and efficiency 
                measures.''; and
            (2) in subsection (e)(2)(C)--
                    (A) by striking ``The'' and inserting the following:
                          ``(i) In general.--The''; and
                    (B) by adding at the end the following:

[[Page 119 STAT. 649]]

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

SEC. 152. <<NOTE: 42 USC 15841.>> ENERGY-EFFICIENT APPLIANCES.

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

SEC. 153. ENERGY EFFICIENCY STANDARDS.

    Section 109 of the Cranston-Gonzalez National Affordable Housing Act 
(42 U.S.C. 12709) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                          (i) by striking ``1 year after the date of the 
                      enactment of the Energy Policy Act of 1992'' and 
                      inserting ``September 30, 2006'';
                          (ii) in subparagraph (A), by striking ``and'' 
                      at the end;
                          (iii) in subparagraph (B), by striking the 
                      period at the end and inserting ``; and''; and
                          (iv) by adding at the end the following:
                    ``(C) rehabilitation and new construction of public 
                and assisted housing funded by HOPE VI revitalization 
                grants under section 24 of the United States Housing Act 
                of 1937 (42 U.S.C. 1437v), where such standards are 
                determined to be cost effective by the Secretary of 
                Housing and Urban Development.''; and
                    (B) in paragraph (2), by inserting ``, and, with 
                respect to rehabilitation and new construction of public 
                and assisted housing funded by HOPE VI revitalization 
                grants under section 24 of the United States Housing Act 
                of 1937 (42 U.S.C. 1437v), the 2003 International Energy 
                Conservation Code'' after ``90.1-1989')'';
            (2) in subsection (b)--
                    (A) by striking ``within 1 year after the date of 
                the enactment of the Energy Policy Act of 1992'' and 
                inserting ``by September 30, 2006''; and
                    (B) by inserting ``, and, with respect to 
                rehabilitation and new construction of public and 
                assisted housing funded by HOPE VI revitalization grants 
                under section 24 of the United States Housing Act of 
                1937 (42 U.S.C. 1437v), the 2003 International Energy 
                Conservation Code'' before the period at the end; and

[[Page 119 STAT. 650]]

            (3) in subsection (c)--
                    (A) in the heading, by inserting ``and the 
                International Energy Conservation Code'' after ``Model 
                Energy Code''; and
                    (B) by inserting ``, or, with respect to 
                rehabilitation and new construction of public and 
                assisted housing funded by HOPE VI revitalization grants 
                under section 24 of the United States Housing Act of 
                1937 (42 U.S.C. 1437v), the 2003 International Energy 
                Conservation Code'' after ``1989''.

SEC. 154. <<NOTE: 42 USC 15842.>> ENERGY STRATEGY FOR HUD.

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

                       TITLE II--RENEWABLE ENERGY

                     Subtitle A--General Provisions

SEC. 201. <<NOTE: 42 USC 15851.>> ASSESSMENT OF RENEWABLE ENERGY 
            RESOURCES.

    (a) Resource Assessment.--Not <<NOTE: Deadlines.>> later than 6 
months after the date of enactment of this Act, and each year 
thereafter, the Secretary shall review the available assessments of 
renewable energy resources within the United States, including solar, 
wind, biomass, ocean (including tidal, wave, current, and thermal), 
geothermal, and hydroelectric energy resources, and undertake new 
assessments as necessary, taking into account changes in market 
conditions, available technologies, and other relevant factors.

    (b) Contents of Reports.--Not later than 1 year after the date of 
enactment of this Act, and each year thereafter, the Secretary shall 
publish a report based on the assessment under subsection (a). The 
report shall contain--
            (1) a detailed inventory describing the available amount and 
        characteristics of the renewable energy resources; and
            (2) such other information as the Secretary believes would 
        be useful in developing such renewable energy resources, 
        including descriptions of surrounding terrain, population and 
        load centers, nearby energy infrastructure, location of energy 
        and water resources, and available estimates of the costs needed 
        to develop each resource, together with an identification of any 
        barriers to providing adequate transmission for remote sources 
        of renewable energy resources to current and emerging markets, 
        recommendations for removing or addressing such barriers, and 
        ways to provide access to the grid that do not unfairly 
        disadvantage renewable or other energy producers.

[[Page 119 STAT. 651]]

    (c) Authorization of Appropriations.--For <<NOTE: 42 USC 13311 
note.>> the purposes of this section, there are authorized to be 
appropriated to the Secretary $10,000,000 for each of fiscal years 2006 
through 2010.

SEC. 202. RENEWABLE ENERGY PRODUCTION INCENTIVE.

    (a) Incentive Payments.--Section 1212(a) of the Energy Policy Act of 
1992 (42 U.S.C. 13317(a)) is amended--
            (1) by striking the last sentence;
            (2) by designating the first, second, and third sentences as 
        paragraphs (1), (2), and (3), respectively;
            (3) in paragraph (3) (as so designated), by striking ``and 
        which satisfies'' and all that follows through ``deems 
        necessary''; and
            (4) by adding at the end the following:

    ``(4)(A) Subject to subparagraph (B), if there are insufficient 
appropriations to make full payments for electric production from all 
qualified renewable energy facilities for a fiscal year, the Secretary 
shall assign--
            ``(i) 60 percent of appropriated funds for the fiscal year 
        to facilities that use solar, wind, ocean (including tidal, 
        wave, current, and thermal), geothermal, or closed-loop 
        (dedicated energy crops) biomass technologies to generate 
        electricity; and
            ``(ii) 40 percent of appropriated funds for the fiscal year 
        to other projects.

    ``(B) After submitting to Congress an explanation of the reasons for 
the alteration, the Secretary may alter the percentage requirements of 
subparagraph (A).''.
    (b) Qualified Renewable Energy Facility.--Section 1212(b) of the 
Energy Policy Act of 1992 (42 U.S.C. 13317(b)) is amended--
            (1) by striking ``a State or any political'' and all that 
        follows through ``nonprofit electrical cooperative'' and 
        inserting ``a not-for-profit electric cooperative, a public 
        utility described in section 115 of the Internal Revenue Code of 
        1986, a State, Commonwealth, territory, or possession of the 
        United States, or the District of Columbia, or a political 
        subdivision thereof, an Indian tribal government or subdivision 
        thereof, or a Native Corporation (as defined in section 3 of the 
        Alaska Native Claims Settlement Act (43 U.S.C. 1602)),''; and
            (2) by inserting ``landfill gas, livestock methane, ocean 
        (including tidal, wave, current, and thermal),'' after ``wind, 
        biomass,''.

    (c) Eligibility Window.--Section 1212(c) of the Energy Policy Act of 
1992 (42 U.S.C. 13317(c)) is amended by striking ``during the 10-fiscal 
year period beginning with the first full fiscal year occurring after 
the enactment of this section'' and inserting ``before October 1, 
2016''.
    (d) Payment Period.--Section 1212(d) of the Energy Policy Act of 
1992 (42 U.S.C. 13317(d)) is amended in the second sentence by inserting 
``, or in which the Secretary determines that all necessary Federal and 
State authorizations have been obtained to begin construction of the 
facility'' after ``eligible for such payments''.
    (e) Amount of Payment.--Section 1212(e)(1) of the Energy Policy Act 
of 1992 (42 U.S.C. 13317(e)(1)) is amended in the first sentence by 
inserting ``landfill gas, livestock methane, ocean (including tidal, 
wave, current, and thermal),'' after ``wind, biomass,''.

[[Page 119 STAT. 652]]

    (f) Termination of Authority.--Section 1212(f) of the Energy Policy 
Act of 1992 (42 U.S.C. 13317(f)) is amended by striking ``the expiration 
of'' and all that follows through ``of this section'' and inserting 
``September 30, 2026''.
    (g) Authorization of Appropriations.--Section 1212 of the Energy 
Policy Act of 1992 (42 U.S.C. 13317) is amended by striking subsection 
(g) and inserting the following:
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section for 
each of fiscal years 2006 through 2026, to remain available until 
expended.''.

SEC. 203. <<NOTE: 42 USC 15852.>> FEDERAL PURCHASE REQUIREMENT.

    (a) Requirement.--The <<NOTE: President.>> President, acting through 
the Secretary, shall seek to ensure that, to the extent economically 
feasible and technically practicable, of the total amount of electric 
energy the Federal Government consumes during any fiscal year, the 
following amounts shall be renewable energy:
            (1) Not less than 3 percent in fiscal years 2007 through 
        2009.
            (2) Not less than 5 percent in fiscal years 2010 through 
        2012.
            (3) Not less than 7.5 percent in fiscal year 2013 and each 
        fiscal year thereafter.

    (b) Definitions.--In this section:
            (1) Biomass.--The term ``biomass'' means any lignin waste 
        material that is segregated from other waste materials and is 
        determined to be nonhazardous by the Administrator of the 
        Environmental Protection Agency and any solid, nonhazardous, 
        cellulosic material that is derived from--
                    (A) any of the following forest-related resources: 
                mill residues, precommercial thinnings, slash, and 
                brush, or nonmerchantable material;
                    (B) solid wood waste materials, including waste 
                pallets, crates, dunnage, manufacturing and construction 
                wood wastes (other than pressure-treated, chemically-
                treated, or painted wood wastes), and landscape or 
                right-of-way tree trimmings, but not including municipal 
                solid waste (garbage), gas derived from the 
                biodegradation of solid waste, or paper that is commonly 
                recycled;
                    (C) agriculture wastes, including orchard tree 
                crops, vineyard, grain, legumes, sugar, and other crop 
                by-products or residues, and livestock waste nutrients; 
                or
                    (D) a plant that is grown exclusively as a fuel for 
                the production of electricity.
            (2) Renewable energy.--The term ``renewable energy'' means 
        electric energy generated from solar, wind, biomass, landfill 
        gas, ocean (including tidal, wave, current, and thermal), 
        geothermal, municipal solid waste, or new hydroelectric 
        generation capacity achieved from increased efficiency or 
        additions of new capacity at an existing hydroelectric project.

    (c) Calculation.--For purposes of determining compliance with the 
requirement of this section, the amount of renewable energy shall be 
doubled if--
            (1) the renewable energy is produced and used on-site at a 
        Federal facility;

[[Page 119 STAT. 653]]

            (2) the renewable energy is produced on Federal lands and 
        used at a Federal facility; or
            (3) the renewable energy is produced on Indian land as 
        defined in title XXVI of the Energy Policy Act of 1992 (25 
        U.S.C. 3501 et seq.) and used at a Federal facility.

    (d) Report.--Not later than April 15, 2007, and every 2 years 
thereafter, the Secretary shall provide a report to Congress on the 
progress of the Federal Government in meeting the goals established by 
this section.

SEC. 204. USE OF PHOTOVOLTAIC ENERGY IN PUBLIC BUILDINGS.

    (a) In General.--Subchapter VI of chapter 31 of title 40, United 
States Code, is amended by adding at the end the following:

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

    ``(a) Photovoltaic Energy Commercialization Program.--
            ``(1) In general.--The Administrator of General Services may 
        establish a photovoltaic energy commercialization program for 
        the procurement and installation of photovoltaic solar electric 
        systems for electric production in new and existing public 
        buildings.
            ``(2) Purposes.--The purposes of the program shall be to 
        accomplish the following:
                    ``(A) To accelerate the growth of a commercially 
                viable photovoltaic industry to make this energy system 
                available to the general public as an option which can 
                reduce the national consumption of fossil fuel.
                    ``(B) To reduce the fossil fuel consumption and 
                costs of the Federal Government.
                    ``(C) To attain the goal of installing solar energy 
                systems in 20,000 Federal buildings by 2010, as 
                contained in the Federal Government's Million Solar Roof 
                Initiative of 1997.
                    ``(D) To stimulate the general use within the 
                Federal Government of life-cycle costing and innovative 
                procurement methods.
                    ``(E) To develop program performance data to support 
                policy decisions on future incentive programs with 
                respect to energy.
            ``(3) Acquisition of photovoltaic solar electric systems.--
                    ``(A) In general.--The program shall provide for the 
                acquisition of photovoltaic solar electric systems and 
                associated storage capability for use in public 
                buildings.
                    ``(B) Acquisition levels.--The acquisition of 
                photovoltaic electric systems shall be at a level 
                substantial enough to allow use of low-cost production 
                techniques with at least 150 megawatts (peak) cumulative 
                acquired during the 5 years of the program.
            ``(4) Administration.--The Administrator shall administer 
        the program and shall--
                    ``(A) issue such rules and regulations as may be 
                appropriate to monitor and assess the performance and 
                operation of photovoltaic solar electric systems 
                installed pursuant to this subsection;
                    ``(B) <<NOTE: Reports.>> develop innovative 
                procurement strategies for the acquisition of such 
                systems; and

[[Page 119 STAT. 654]]

                    ``(C) transmit to Congress an annual report on the 
                results of the program.

    ``(b) Photovoltaic Systems Evaluation Program.--
            ``(1) In general.--Not <<NOTE: Deadline.>> later than 60 
        days after the date of enactment of this section, the 
        Administrator shall establish a photovoltaic solar energy 
        systems evaluation program to evaluate such photovoltaic solar 
        energy systems as are required in public buildings.
            ``(2) Program requirement.--In evaluating photovoltaic solar 
        energy systems under the program, the Administrator shall ensure 
        that such systems reflect the most advanced technology.

    ``(c) Authorization of Appropriations.--
            ``(1) Photovoltaic energy commercialization program.--There 
        are authorized to be appropriated to carry out subsection (a) 
        $50,000,000 for each of fiscal years 2006 through 2010. Such 
        sums shall remain available until expended.
            ``(2) Photovoltaic systems evaluation program.--There are 
        authorized to be appropriated to carry out subsection (b) 
        $10,000,000 for each of fiscal years 2006 through 2010. Such 
        sums shall remain available until expended.''.

    (b) Conforming Amendment.--The table of sections for the National 
Energy Conservation Policy Act is amended by inserting after the item 
relating to section 569 the following:

``Sec. 570. Use of photovoltaic energy in public buildings.''.

SEC. 205. BIOBASED PRODUCTS.

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

SEC. 206. RENEWABLE ENERGY SECURITY.

    (a) Weatherization Assistance.--Section 415(c) of the Energy 
Conservation and Production Act (42 U.S.C. 6865(c)) is amended--
            (1) in paragraph (1), by striking ``in paragraph (3)'' and 
        inserting ``in paragraphs (3) and (4)'';
            (2) in paragraph (3), by striking ``$2,500 per dwelling unit 
        average provided in paragraph (1)'' and inserting ``dwelling 
        unit averages provided in paragraphs (1) and (4)''; and
            (3) by adding at the end the following new paragraphs:

    ``(4) The expenditure of financial assistance provided under this 
part for labor, weatherization materials, and related matters for a 
renewable energy system shall not exceed an average of $3,000 per 
dwelling unit.
    ``(5)(A) <<NOTE: Regulations.>> The Secretary shall by regulations--
            ``(i) establish the criteria which are to be used in 
        prescribing performance and quality standards under paragraph 
        (6)(A)(ii) or in specifying any form of renewable energy under 
        paragraph (6)(A)(i)(I); and
            ``(ii) establish a procedure under which a manufacturer of 
        an item may request the Secretary to certify that the item will 
        be treated, for purposes of this paragraph, as a renewable 
        energy system.

    ``(B) The Secretary shall make a final determination with respect to 
any request filed under subparagraph (A)(ii) within 1

[[Page 119 STAT. 655]]

year after the filing of the request, together with any information 
required to be filed with such request under subparagraph (A)(ii).
    ``(C) <<NOTE: Reports.>> Each month the Secretary shall publish a 
report of any request under subparagraph (A)(ii) which has been denied 
during the preceding month and the reasons for the denial.

    ``(D) The Secretary shall not specify any form of renewable energy 
under paragraph (6)(A)(i)(I) unless the Secretary determines that--
            ``(i) there will be a reduction in oil or natural gas 
        consumption as a result of such specification;
            ``(ii) such specification will not result in an increased 
        use of any item which is known to be, or reasonably suspected to 
        be, environmentally hazardous or a threat to public health or 
        safety; and
            ``(iii) available Federal subsidies do not make such 
        specification unnecessary or inappropriate (in the light of the 
        most advantageous allocation of economic resources).

    ``(6) In this subsection--
            ``(A) the term `renewable energy system' means a system 
        which--
                    ``(i) when installed in connection with a dwelling, 
                transmits or uses--
                          ``(I) solar energy, energy derived from the 
                      geothermal deposits, energy derived from biomass, 
                      or any other form of renewable energy which the 
                      Secretary specifies by regulations, for the 
                      purpose of heating or cooling such dwelling or 
                      providing hot water or electricity for use within 
                      such dwelling; or
                          ``(II) wind energy for nonbusiness residential 
                      purposes;
                    ``(ii) meets the performance and quality standards 
                (if any) which have been prescribed by the Secretary by 
                regulations;
                    ``(iii) in the case of a combustion rated system, 
                has a thermal efficiency rating of at least 75 percent; 
                and
                    ``(iv) in the case of a solar system, has a thermal 
                efficiency rating of at least 15 percent; and
            ``(B) the term `biomass' means any organic matter that is 
        available on a renewable or recurring basis, including 
        agricultural crops and trees, wood and wood wastes and residues, 
        plants (including aquatic plants), grasses, residues, fibers, 
        and animal wastes, municipal wastes, and other waste 
        materials.''.

    (b) District Heating and Cooling Programs.--Section 172 of the 
Energy Policy Act of 1992 (42 U.S.C. 13451 note) is amended--
            (1) in subsection (a)--
                    (A) by striking ``and'' at the end of paragraph (3);
                    (B) by striking the period at the end of paragraph 
                (4) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(5) evaluate the use of renewable energy systems (as such 
        term is defined in section 415(c) of the Energy Conservation and 
        Production Act (42 U.S.C. 6865(c))) in residential buildings.''; 
        and
            (2) in subsection (b), by striking ``this Act'' and 
        inserting ``the Energy Policy Act of 2005''.

    (c) Rebate <<NOTE: 42 USC 15853.>> Program.--

[[Page 119 STAT. 656]]

            (1) Establishment.--The Secretary shall establish a program 
        providing rebates for consumers for expenditures made for the 
        installation of a renewable energy system in connection with a 
        dwelling unit or small business.
            (2) Amount of rebate.--Rebates provided under the program 
        established under paragraph (1) shall be in an amount not to 
        exceed the lesser of--
                    (A) 25 percent of the expenditures described in 
                paragraph (1) made by the consumer; or
                    (B) $3,000.
            (3) Definition.--For purposes of this subsection, the term 
        ``renewable energy system'' has the meaning given that term in 
        section 415(c)(6)(A) of the Energy Conservation and Production 
        Act (42 U.S.C. 6865(c)(6)(A)), as added by subsection (a)(3) of 
        this section.
            (4) Authorization of appropriations.--There are authorized 
        to be appropriated to the Secretary for carrying out this 
        subsection, to remain available until expended--
                    (A) $150,000,000 for fiscal year 2006;
                    (B) $150,000,000 for fiscal year 2007;
                    (C) $200,000,000 for fiscal year 2008;
                    (D) $250,000,000 for fiscal year 2009; and
                    (E) $250,000,000 for fiscal year 2010.

    (d) Renewable Fuel Inventory.--
Not <<NOTE: Deadline. Reports.>> later than 180 days after the date of 
enactment of this Act, the Secretary shall transmit to Congress a report 
containing--
            (1) an inventory of renewable fuels available for consumers; 
        and
            (2) a projection of future inventories of renewable fuels 
        based on the incentives provided in this section.

SEC. 207. INSTALLATION OF PHOTOVOLTAIC SYSTEM.

    There <<NOTE: Appropriation authorization.>> is authorized to be 
appropriated to the General Services Administration to install a 
photovoltaic system, as set forth in the Sun Wall Design Project, for 
the headquarters building of the Department of Energy located at 1000 
Independence Avenue Southwest in the District of Columbia, commonly know 
as the Forrestal Building, $20,000,000 for fiscal year 2006. Such sums 
shall remain available until expended.

SEC. 208. <<NOTE: 42 USC 15854.>> SUGAR CANE ETHANOL PROGRAM.

    (a) Definition of Program.--In this section, the term ``program'' 
means the Sugar Cane Ethanol Program established by subsection (b).
    (b) Establishment.--There is established within the Environmental 
Protection Agency a program to be known as the ``Sugar Cane Ethanol 
Program''.
    (c) Project.--
            (1) In general.--Subject to the availability of 
        appropriations under subsection (d), in carrying out the 
        program, the Administrator of the Environmental Protection 
        Agency shall establish a project that is--
                    (A) carried out in multiple States--
                          (i) in each of which is produced cane sugar 
                      that is eligible for loans under section 156 of 
                      the Federal Agriculture Improvement and Reform Act 
                      of 1996 (7 U.S.C. 7272), or a similar subsequent 
                      authority; and

[[Page 119 STAT. 657]]

                          (ii) at the option of each such State, that 
                      have an incentive program that requires the use of 
                      ethanol in the State; and
                    (B) designed to study the production of ethanol from 
                cane sugar, sugarcane, and sugarcane byproducts.
            (2) Requirements.--A project described in paragraph (1) 
        shall--
                    (A) be limited to sugar producers and the production 
                of ethanol in the States of Florida, Louisiana, Texas, 
                and Hawaii, divided equally among the States, to 
                demonstrate that the process may be applicable to cane 
                sugar, sugarcane, and sugarcane byproducts;
                    (B) include information on the ways in which the 
                scale of production may be replicated once the sugar 
                cane industry has located sites for, and constructed, 
                ethanol production facilities; and
                    (C) not last more than 3 years.

    (d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $36,000,000, to remain available 
until expended.

SEC. 209. RURAL AND REMOTE COMMUNITY ELECTRIFICATION GRANTS.

    The Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601 
et seq.) is amended in title VI by adding at the end the following:

``SEC. 609. <<NOTE: 7 USC 918c.>> RURAL AND REMOTE COMMUNITIES 
            ELECTRIFICATION GRANTS.

    ``(a) Definitions.--In this section:
            ``(1) The term `eligible grantee' means a local government 
        or municipality, peoples' utility district, irrigation district, 
        and cooperative, nonprofit, or limited-dividend association in a 
        rural area.
            ``(2) The term `incremental hydropower' means additional 
        generation achieved from increased efficiency after January 1, 
        2005, at a hydroelectric dam that was placed in service before 
        January 1, 2005.
            ``(3) The term `renewable energy' means electricity 
        generated from--
                    ``(A) a renewable energy source; or
                    ``(B) hydrogen, other than hydrogen produced from a 
                fossil fuel, that is produced from a renewable energy 
                source.
            ``(4) The term `renewable energy source' means--
                    ``(A) wind;
                    ``(B) ocean waves;
                    ``(C) biomass;
                    ``(D) solar;
                    ``(E) landfill gas;
                    ``(F) incremental hydropower;
                    ``(G) livestock methane; or
                    ``(H) geothermal energy.
            ``(5) The term `rural area' means a city, town, or 
        unincorporated area that has a population of not more than 
        10,000 inhabitants.

    ``(b) Grants.--The Secretary, in consultation with the Secretary of 
Agriculture and the Secretary of the Interior, may provide grants under 
this section to eligible grantees for the purpose of--

[[Page 119 STAT. 658]]

            ``(1) increasing energy efficiency, siting or upgrading 
        transmission and distribution lines serving rural areas; or
            ``(2) providing or modernizing electric generation 
        facilities that serve rural areas.

    ``(c) Grant Administration.--(1) The Secretary shall make grants 
under this section based on a determination of cost-effectiveness and 
the most effective use of the funds to achieve the purposes described in 
subsection (b).
    ``(2) For each fiscal year, the Secretary shall allocate grant funds 
under this section equally between the purposes described in paragraphs 
(1) and (2) of subsection (b).
    ``(3) In making grants for the purposes described in subsection 
(b)(2), the Secretary shall give preference to renewable energy 
facilities.
    ``(d) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary to carry out this section $20,000,000 for 
each of fiscal years 2006 through 2012.''.

SEC. 210. <<NOTE: 42 USC 15855.>> GRANTS TO IMPROVE THE COMMERCIAL VALUE 
            OF FOREST BIOMASS FOR ELECTRIC ENERGY, USEFUL HEAT, 
            TRANSPORTATION FUELS, AND OTHER COMMERCIAL PURPOSES.

    (a) Definitions.--In this section:
            (1) Biomass.--The term ``biomass'' means nonmerchantable 
        materials or precommercial thinnings that are byproducts of 
        preventive treatments, such as trees, wood, brush, thinnings, 
        chips, and slash, that are removed--
                    (A) to reduce hazardous fuels;
                    (B) to reduce or contain disease or insect 
                infestation; or
                    (C) to restore forest health.
            (2) Indian tribe.--The term ``Indian tribe'' has the meaning 
        given the term in section 4(e) of the Indian Self-Determination 
        and Education Assistance Act (25 U.S.C. 450b(e)).
            (3) Nonmerchantable.--For purposes of subsection (b), the 
        term ``nonmerchantable'' means that portion of the byproducts of 
        preventive treatments that would not otherwise be used for 
        higher value products.
            (4) Person.--The term ``person'' includes--
                    (A) an individual;
                    (B) a community (as determined by the Secretary 
                concerned);
                    (C) an Indian tribe;
                    (D) a small business or a corporation that is 
                incorporated in the United States; and
                    (E) a nonprofit organization.
            (5) Preferred community.--The term ``preferred community'' 
        means--
                    (A) any Indian tribe;
                    (B) any town, township, municipality, or other 
                similar unit of local government (as determined by the 
                Secretary concerned) that--
                          (i) has a population of not more than 50,000 
                      individuals; and
                          (ii) the Secretary concerned, in the sole 
                      discretion of the Secretary concerned, determines 
                      contains or is located near Federal or Indian 
                      land, the condition of

[[Page 119 STAT. 659]]

                      which is at significant risk of catastrophic 
                      wildfire, disease, or insect infestation or which 
                      suffers from disease or insect infestation; or
                    (C) any county that--
                          (i) is not contained within a metropolitan 
                      statistical area; and
                          (ii) the Secretary concerned, in the sole 
                      discretion of the Secretary concerned, determines 
                      contains or is located near Federal or Indian 
                      land, the condition of which is at significant 
                      risk of catastrophic wildfire, disease, or insect 
                      infestation or which suffers from disease or 
                      insect infestation.
            (6) Secretary concerned.--The term ``Secretary concerned'' 
        means the Secretary of Agriculture or the Secretary of the 
        Interior.

    (b) Biomass Commercial Use Grant Program.--
            (1) In general.--The Secretary concerned may make grants to 
        any person in a preferred community that owns or operates a 
        facility that uses biomass as a raw material to produce electric 
        energy, sensible heat, or transportation fuels to offset the 
        costs incurred to purchase biomass for use by such facility.
            (2) Grant amounts.--A grant under this subsection may not 
        exceed $20 per green ton of biomass delivered.
            (3) Monitoring of grant recipient activities.--As a 
        condition of a grant under this subsection, the grant recipient 
        shall keep such records as the Secretary concerned may require 
        to fully and correctly disclose the use of the grant funds and 
        all transactions involved in the purchase of biomass. Upon 
        notice by a representative of the Secretary concerned, the grant 
        recipient shall afford the representative reasonable access to 
        the facility that purchases or uses biomass and an opportunity 
        to examine the inventory and records of the facility.

    (c) Improved Biomass Use Grant Program.--
            (1) In general.--The Secretary concerned may make grants to 
        persons to offset the cost of projects to develop or research 
        opportunities to improve the use of, or add value to, biomass. 
        In making such grants, the Secretary concerned shall give 
        preference to persons in preferred communities.
            (2) Selection.--The Secretary concerned shall select a grant 
        recipient under paragraph (1) after giving consideration to--
                    (A) the anticipated public benefits of the project, 
                including the potential to develop thermal or electric 
                energy resources or affordable energy;
                    (B) opportunities for the creation or expansion of 
                small businesses and micro-businesses;
                    (C) the potential for new job creation;
                    (D) the potential for the project to improve 
                efficiency or develop cleaner technologies for biomass 
                utilization; and
                    (E) the potential for the project to reduce the 
                hazardous fuels from the areas in greatest need of 
                treatment.
            (3) Grant amount.--A grant under this subsection may not 
        exceed $500,000.

    (d) Authorization of Appropriations.--There are authorized to be 
appropriated $50,000,000 for each of the fiscal years 2006 through 2016 
to carry out this section.

[[Page 119 STAT. 660]]

    (e) Report.--Not later than October 1, 2010, the Secretary of 
Agriculture, in consultation with the Secretary of the Interior, shall 
submit to the Committee on Energy and Natural Resources and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate, and the 
Committee on Resources, the Committee on Energy and Commerce, and the 
Committee on Agriculture of the House of Representatives, a report 
describing the results of the grant programs authorized by this section. 
The report shall include the following:
            (1) An identification of the size, type, and use of biomass 
        by persons that receive grants under this section.
            (2) The distance between the land from which the biomass was 
        removed and the facility that used the biomass.
            (3) The economic impacts, particularly new job creation, 
        resulting from the grants to and operation of the eligible 
        operations.

SEC. 211. SENSE OF CONGRESS REGARDING GENERATION CAPACITY OF ELECTRICITY 
            FROM RENEWABLE ENERGY RESOURCES ON PUBLIC LANDS.

    It is the sense of the Congress that the Secretary of the Interior 
should, before the end of the 10-year period beginning on the date of 
enactment of this Act, seek to have approved non-hydropower renewable 
energy projects located on the public lands with a generation capacity 
of at least 10,000 megawatts of electricity.

    Subtitle B--Geothermal <<NOTE: John Rishel Geothermal Steam Act 
Amendments of 2005.>> Energy

SEC. 221. <<NOTE: 30 USC 1001 note.>> SHORT TITLE.

    This subtitle may be cited as the ``John Rishel Geothermal Steam Act 
Amendments of 2005''.

SEC. 222. COMPETITIVE LEASE SALE REQUIREMENTS.

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

``SEC. 4. LEASING PROCEDURES.

    ``(a) Nominations.--The Secretary shall accept nominations of land 
to be leased at any time from qualified companies and individuals under 
this Act.
    ``(b) Competitive Lease Sale Required.--
            ``(1) In general.--Except as otherwise specifically provided 
        by this Act, all land to be leased that is not subject to 
        leasing under subsection (c) shall be leased as provided in this 
        subsection to the highest responsible qualified bidder, as 
        determined by the Secretary.
            ``(2) Competitive lease sales.--The Secretary shall hold a 
        competitive lease sale at least once every 2 years for land in a 
        State that has nominations pending under subsection (a) if the 
        land is otherwise available for leasing.
            ``(3) Lands subject to mining claims.--Lands that are 
        subject to a mining claim for which a plan of operations has 
        been approved by the relevant Federal land management agency may 
        be available for noncompetitive leasing under this section to 
        the mining claim holder.

    ``(c) Noncompetitive Leasing.--The Secretary shall make available 
for a period of 2 years for noncompetitive leasing any

[[Page 119 STAT. 661]]

tract for which a competitive lease sale is held, but for which the 
Secretary does not receive any bids in a competitive lease sale.
    ``(d) Pending Lease Applications.--
            ``(1) In general.--It shall be a priority for the Secretary, 
        and for the Secretary of Agriculture with respect to National 
        Forest Systems land, to ensure timely completion of 
        administrative actions, including amendments to applicable 
        forest plans and resource management plans, necessary to process 
        applications for geothermal leasing pending on the date of 
        enactment of this subsection. All future forest plans and 
        resource management plans for areas with high geothermal 
        resource potential shall consider geothermal leasing and 
        development.
            ``(2) Administration.--An application described in paragraph 
        (1) and any lease issued pursuant to the application--
                    ``(A) except as provided in subparagraph (B), shall 
                be subject to this section as in effect on the day 
                before the date of enactment of this paragraph; or
                    ``(B) at the election of the applicant, shall be 
                subject to this section as in effect on the effective 
                date of this paragraph.

    ``(e) Leases Sold as a Block.--If information is available to the 
Secretary indicating a geothermal resource that could be produced as 1 
unit can reasonably be expected to underlie more than 1 parcel to be 
offered in a competitive lease sale, the parcels for such a resource may 
be offered for bidding as a block in the competitive lease sale.''.

SEC. 223. DIRECT USE.

    (a) Fees for Direct Use.--Section 5 of the Geothermal Steam Act of 
1970 (30 U.S.C. 1004) is amended--
            (1) in subsection (c), by redesignating paragraphs (1) and 
        (2) as subparagraphs (A) and (B), respectively;
            (2) by redesignating subsections (a) through (d) as 
        paragraphs (1) through (4), respectively;
            (3) by inserting ``(a) In General.--'' after ``Sec. 5.''; 
        and
            (4) by adding at the end the following:

    ``(b) Direct Use.--
            ``(1) In general.--
        Notwithstanding <<NOTE: Fees.>> subsection (a)(1), the Secretary 
        shall establish a schedule of fees, in lieu of royalties for 
        geothermal resources, that a lessee or its affiliate--
                    ``(A) uses for a purpose other than the commercial 
                generation of electricity; and
                    ``(B) does not sell.
            ``(2) Schedule of fees.--The schedule of fees--
                    ``(A) may be based on the quantity or thermal 
                content, or both, of geothermal resources used;
                    ``(B) shall ensure a fair return to the United 
                States for use of the resource; and
                    ``(C) shall encourage development of the resource.
            ``(3) State, tribal, or local governments.--If a State, 
        tribal, or local government is the lessee and uses geothermal 
        resources without sale and for public purposes other than 
        commercial generation of electricity, the Secretary shall charge 
        only a nominal fee for use of the resource.

[[Page 119 STAT. 662]]

            ``(4) Final regulation.--In issuing any final regulation 
        establishing a schedule of fees under this subsection, the 
        Secretary shall seek--
                    ``(A) to provide lessees with a simplified 
                administrative system;
                    ``(B) to facilitate development of direct use of 
                geothermal resources; and
                    ``(C) to contribute to sustainable economic 
                development opportunities in the area.''.

    (b) Leasing for Direct Use.--Section 4 of the Geothermal Steam Act 
of 1970 (30 U.S.C. 1003) (as amended by section 222) is further amended 
by adding at the end the following:
    ``(f) Leasing for Direct Use of Geothermal Resources.--
Notwithstanding subsection (b), the Secretary may identify areas in 
which the land to be leased under this Act exclusively for direct use of 
geothermal resources, without sale for purposes other than commercial 
generation of electricity, may be leased to any qualified applicant that 
first applies for such a lease under regulations issued by the 
Secretary, if the Secretary--
            ``(1) <<NOTE: Notice. Deadline.>> publishes a notice of the 
        land proposed for leasing not later than 90 days before the date 
        of the issuance of the lease;
            ``(2) does not receive during the 90-day period beginning on 
        the date of the publication any nomination to include the land 
        concerned in the next competitive lease sale; and
            ``(3) determines there is no competitive interest in the 
        geothermal resources in the land to be leased.

    ``(g) Area Subject to Lease for Direct Use.--
            ``(1) In general.--Subject to paragraph (2), a geothermal 
        lease for the direct use of geothermal resources shall cover not 
        more than the quantity of acreage determined by the Secretary to 
        be reasonably necessary for the proposed use.
            ``(2) Limitations.--The quantity of acreage covered by the 
        lease shall not exceed the limitations established under section 
        7.''.

    (c) Application of New Lease Terms.--The <<NOTE: 30 USC 1004 
note.>> schedule of fees established under the amendment made by 
subsection (a)(4) shall apply with respect to payments under a lease 
converted under this subsection that are due and owing, and have been 
paid, on or after July 16, 2003. This subsection shall not require the 
refund of royalties paid to a State under section 20 of the Geothermal 
Steam Act of 1970 (30 U.S.C. 1019) prior to the date of enactment of 
this Act.

SEC. 224. ROYALTIES AND NEAR-TERM PRODUCTION INCENTIVES.

    (a) Royalty.--Section 5 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1004) is further amended--
            (1) in subsection (a) by striking paragraph (1) and 
        inserting the following:
            ``(1) a royalty on electricity produced using geothermal 
        resources, other than direct use of geothermal resources, that 
        shall be--
                    ``(A) not less than 1 percent and not more than 2.5 
                percent of the gross proceeds from the sale of 
                electricity produced from such resources during the 
                first 10 years of production under the lease; and

[[Page 119 STAT. 663]]

                    ``(B) not less than 2 and not more than 5 percent of 
                the gross proceeds from the sale of electricity produced 
                from such resources during each year after such 10-year 
                period;''; and
            (2) by adding at the end the following:

    ``(c) Final Regulation Establishing Royalty Rates.--In issuing any 
final regulation establishing royalty rates under this section, the 
Secretary shall seek--
            ``(1) to provide lessees a simplified administrative system;
            ``(2) to encourage new development; and
            ``(3) to achieve the same level of royalty revenues over a 
        10-year period as the regulation in effect on the date of 
        enactment of this subsection.

    ``(d) Credits for In-Kind Payments of Electricity.--The Secretary 
may provide to a lessee a credit against royalties owed under this Act, 
in an amount equal to the value of electricity provided under contract 
to a State or county government that is entitled to a portion of such 
royalties under section 20 of this Act, section 35 of the Mineral 
Leasing Act (30 U.S.C. 191), except as otherwise provided by this 
section, or section 6 of the Mineral Leasing Act for Acquired Lands (30 
U.S.C. 355), if--
            ``(1) the Secretary has approved in advance the contract 
        between the lessee and the State or county government for such 
        in-kind payments;
            ``(2) the contract establishes a specific methodology to 
        determine the value of such credits; and
            ``(3) the maximum credit will be equal to the royalty value 
        owed to the State or county that is a party to the contract and 
        the electricity received will serve as the royalty payment from 
        the Federal Government to that entity.''.

    (b) Disposal of Moneys From Sales, Bonuses, Royalties, and Rents.--
Section 20 of the Geothermal Steam Act of 1970 (30 U.S.C. 1019) is 
amended to read as follows:

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

    ``(a) In General.--Except with respect to lands in the State of 
Alaska, all monies received by the United States from sales, bonuses, 
rentals, and royalties under this Act shall be paid into the Treasury of 
the United States. Of amounts deposited under this subsection, subject 
to the provisions of subsection (b) of section 35 of the Mineral Leasing 
Act (30 U.S.C. 191(b)) and section 5(a)(2) of this Act--
            ``(1) 50 percent shall be paid to the State within the 
        boundaries of which the leased lands or geothermal resources are 
        or were located; and
            ``(2) 25 percent shall be paid to the county within the 
        boundaries of which the leased lands or geothermal resources are 
        or were located.

    ``(b) Use of Payments.--Amounts paid to a State or county under 
subsection (a) shall be used consistent with the terms of section 35 of 
the Mineral Leasing Act (30 U.S.C. 191).''.
    (c) Near-Term Production <<NOTE: 30 USC 1004 note.>> Incentive for 
Existing Leases.--
            (1) In general.--Notwithstanding section 5(a) of the 
        Geothermal Steam Act of 1970, the royalty required to be paid 
        shall be 50 percent of the amount of the royalty otherwise 
        required, on any lease issued before the date of enactment

[[Page 119 STAT. 664]]

        of this Act that does not convert to new royalty terms under 
        subsection (e)--
                    (A) with respect to commercial production of energy 
                from a facility that begins such production in the 6-
                year period beginning on the date of enactment of this 
                Act; or
                    (B) on qualified expansion geothermal energy.
            (2) 4-year application.--Paragraph (1) applies only to new 
        commercial production of energy from a facility in the first 4 
        years of such production.

    (d) Definition of Qualified Expansion Geothermal Energy.--In this 
section, the term ``qualified expansion geothermal energy'' means 
geothermal energy produced from a generation facility for which--
            (1) the production is increased by more than 10 percent as a 
        result of expansion of the facility carried out in the 6-year 
        period beginning on the date of enactment of this Act; and
            (2) such production increase is greater than 10 percent of 
        the average production by the facility during the 5-year period 
        preceding the expansion of the facility (as such average is 
        adjusted to reflect any trend in changes in production during 
        that period).

    (e) Royalty Under Existing Leases.--
            (1) In general.--Any lessee under a lease issued under the 
        Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) before the 
        date of enactment of this Act may, within the time period 
        specified in paragraph (2), submit to the Secretary of the 
        Interior a request to modify the terms of the lease relating to 
        payment of royalties to provide--
                    (A) in the case of a lease that meets the 
                requirements of subsection (b) of section 5 of the 
                Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as 
                amended by section 223), that royalties be based on the 
                schedule of fees established under that section; and
                    (B) in the case of any other lease, that royalties 
                be computed on a percentage of the gross proceeds from 
                the sale of electricity, at a royalty rate that is 
                expected to yield total royalty payments equivalent to 
                payments that would have been received for comparable 
                production under the royalty rate in effect for the 
                lease before the date of enactment of this subsection.
            (2) Timing.--A <<NOTE: Deadlines.>> request for a 
        modification under paragraph (1) shall be submitted to the 
        Secretary of the Interior by the date that is not later than--
                    (A) in the case of a lease for direct use, 18 months 
                after the effective date of the schedule of fees 
                established by the Secretary of the Interior under 
                section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 
                1004); or
                    (B) in the case of any other lease, 18 months after 
                the effective date of the final regulation issued under 
                subsection (a).
            (3) Application of modification.--If the lessee requests 
        modification of a lease under paragraph (1)--
                    (A) <<NOTE: Deadline.>> the Secretary of the 
                Interior shall, within 180 days after the receipt of the 
                request for modification, modify the lease to comply 
                with--

[[Page 119 STAT. 665]]

                          (i) in the case of a lease for direct use, the 
                      schedule of fees established by the Secretary 
                      under section 5 of the Geothermal Steam Act of 
                      1970 (30 U.S.C. 1004); or
                          (ii) in the case of any other lease, the 
                      royalty for the lease established under paragraph 
                      (1)(B); and
                    (B) the modification shall apply to any use of 
                geothermal resources to which subsection (a) applies 
                that occurs after the date of the modification.
            (4) Consultation.--The Secretary of the Interior shall 
        consult with the State and local governments affected by any 
        proposed changes in lease royalty terms under this subsection.

SEC. 225. <<NOTE: 42 USC 15871.>> COORDINATION OF GEOTHERMAL LEASING AND 
            PERMITTING ON FEDERAL LANDS.

    (a) In General.--Not <<NOTE: Deadline. Memorandum.>> later than 180 
days after the date of enactment of this section, the Secretary of the 
Interior and the Secretary of Agriculture shall enter into and submit to 
Congress a memorandum of understanding in accordance with this section, 
the Geothermal Steam Act of 1970 (as amended by this Act), and other 
applicable laws, regarding coordination of leasing and permitting for 
geothermal development of public lands and National Forest System lands 
under their respective jurisdictions.

    (b) Lease and Permit Applications.--The memorandum of understanding 
shall--
            (1) establish an administrative procedure for processing 
        geothermal lease applications, including lines of authority, 
        steps in application processing, and time limits for application 
        procession;
            (2) establish a 5-year program for geothermal leasing of 
        lands in the National Forest System, and a process for updating 
        that program every 5 years; and
            (3) <<NOTE: Effective date.>> establish a program for 
        reducing the backlog of geothermal lease application pending on 
        January 1, 2005, by 90 percent within the 5-year period 
        beginning on the date of enactment of this Act, including, as 
        necessary, by issuing leases, rejecting lease applications for 
        failure to comply with the provisions of the regulations under 
        which they were filed, or determining that an original applicant 
        (or the applicant's assigns, heirs, or estate) is no longer 
        interested in pursuing the lease application.

    (c) Data Retrieval System.--The memorandum of understanding shall 
establish a joint data retrieval system that is capable of tracking 
lease and permit applications and providing to the applicant information 
as to their status within the Departments of the Interior and 
Agriculture, including an estimate of the time required for 
administrative action.

SEC. 226. <<NOTE: Deadline. 42 USC 15872.>> ASSESSMENT OF GEOTHERMAL 
            ENERGY POTENTIAL.

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

[[Page 119 STAT. 666]]

SEC. 227. COOPERATIVE OR UNIT PLANS.

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

``SEC. 18. UNIT AND COMMUNITIZATION AGREEMENTS.

    ``(a) Adoption of Units by Lessees.--
            ``(1) In general.--For the purpose of more properly 
        conserving the natural resources of any geothermal reservoir, 
        field, or like area, or any part thereof (whether or not any 
        part of the geothermal reservoir, field, or like area, is 
        subject to any cooperative plan of development or operation 
        (referred to in this section as a `unit agreement')), lessees 
        thereof and their representatives may unite with each other, or 
        jointly or separately with others, in collectively adopting and 
        operating under a unit agreement for the reservoir, field, or 
        like area, or any part thereof, including direct use resources, 
        if determined and certified by the Secretary to be necessary or 
        advisable in the public interest.
            ``(2) Majority interest of single leases.--A majority 
        interest of owners of any single lease shall have the authority 
        to commit the lease to a unit agreement.
            ``(3) Initiative of secretary.--The Secretary may also 
        initiate the formation of a unit agreement, or require an 
        existing Federal lease to commit to a unit agreement, if in the 
        public interest.
            ``(4) Modification of lease requirements by secretary.--
                    ``(A) In general.--The Secretary may, in the 
                discretion of the Secretary and with the consent of the 
                holders of leases involved, establish, alter, change, or 
                revoke rates of operations (including drilling, 
                operations, production, and other requirements) of the 
                leases and make conditions with respect to the leases, 
                with the consent of the lessees, in connection with the 
                creation and operation of any such unit agreement as the 
                Secretary may consider necessary or advisable to secure 
                the protection of the public interest.
                    ``(B) Unlike terms or rates.--Leases with unlike 
                lease terms or royalty rates shall not be required to be 
                modified to be in the same unit.

    ``(b) Requirement of Plans Under New Leases.--The Secretary may--
            ``(1) provide that geothermal leases issued under this Act 
        shall contain a provision requiring the lessee to operate under 
        a unit agreement; and
            ``(2) prescribe the unit agreement under which the lessee 
        shall operate, which shall adequately protect the rights of all 
        parties in interest, including the United States.

    ``(c) Modification of Rate of Prospecting, Development, and 
Production.--The Secretary may require that any unit agreement 
authorized by this section that applies to land owned by the United 
States contain a provision under which authority is vested in the 
Secretary, or any person, committee, or State or Federal officer or 
agency as may be designated in the unit agreement to alter or modify, 
from time to time, the rate of prospecting and development and the 
quantity and rate of production under the unit agreement.

[[Page 119 STAT. 667]]

    ``(d) Exclusion From Determination of Holding or Control.--Any land 
that is subject to a unit agreement approved or prescribed by the 
Secretary under this section shall not be considered in determining 
holdings or control under section 7.
    ``(e) Pooling of Certain Land.--If separate tracts of land cannot be 
independently developed and operated to use geothermal resources 
pursuant to any section of this Act--
            ``(1) the land, or a portion of the land, may be pooled with 
        other land, whether or not owned by the United States, for 
        purposes of development and operation under a communitization 
        agreement providing for an apportionment of production or 
        royalties among the separate tracts of land comprising the 
        production unit, if the pooling is determined by the Secretary 
        to be in the public interest; and
            ``(2) operation or production pursuant to the 
        communitization agreement shall be treated as operation or 
        production with respect to each tract of land that is subject to 
        the communitization agreement.

    ``(f) Unit Agreement Review.--
            ``(1) In general.--Not <<NOTE: Deadlines.>> later than 5 
        years after the date of approval of any unit agreement and at 
        least every 5 years thereafter, the Secretary shall--
                    ``(A) review each unit agreement; and
                    ``(B) after notice and opportunity for comment, 
                eliminate from inclusion in the unit agreement any land 
                that the Secretary determines is not reasonably 
                necessary for unit operations under the unit agreement.
            ``(2) Basis for elimination.--The elimination shall--
                    ``(A) be based on scientific evidence; and
                    ``(B) occur only if the elimination is determined by 
                the Secretary to be for the purpose of conserving and 
                properly managing the geothermal resource.
            ``(3) Extension.--Any land eliminated under this subsection 
        shall be eligible for an extension under section 6(g) if the 
        land meets the requirements for the extension.

    ``(g) Drilling or Development Contracts.--
            ``(1) In general.--The Secretary may, on such conditions as 
        the Secretary may prescribe, approve drilling or development 
        contracts made by one or more lessees of geothermal leases, with 
        one or more persons, associations, or corporations if, in the 
        discretion of the Secretary, the conservation of natural 
        resources or the public convenience or necessity may require or 
        the interests of the United States may be best served by the 
        approval.
            ``(2) Holdings or control.--Each lease operated under an 
        approved drilling or development contract, and interest under 
        the contract, shall be excepted in determining holdings or 
        control under section 7.

    ``(h) Coordination With State Governments.--The Secretary shall 
coordinate unitization and pooling activities with appropriate State 
agencies.''.

SEC. 228. ROYALTY ON BYPRODUCTS.

    Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as 
amended by section 223(a)) is further amended in subsection (a) by 
striking paragraph (2) and inserting the following:

[[Page 119 STAT. 668]]

            ``(2) a royalty on any byproduct that is a mineral specified 
        in the first section of the Mineral Leasing Act (30 U.S.C. 181), 
        and that is derived from production under the lease, at the rate 
        of the royalty that applies under that Act to production of the 
        mineral under a lease under that Act;''.

SEC. 229. AUTHORITIES OF SECRETARY TO READJUST TERMS, CONDITIONS, 
            RENTALS, AND ROYALTIES.

    Section 8(b) of the Geothermal Steam Act of 1970 (30 U.S.C. 1006) is 
amended in the <<NOTE: 30 USC 1007.>> second sentence by striking 
``period, and in no event'' and all that follows through the end of the 
sentence and inserting ``period''.

SEC. 230. CREDITING OF RENTAL TOWARD ROYALTY.

    Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as 
amended by sections 223 and 224) is further amended--
            (1) in subsection (a)(2) by inserting ``and'' after the 
        semicolon at the end;
            (2) in subsection (a)(3) by striking ``; and'' and inserting 
        a period;
            (3) by striking paragraph (4) of subsection (a); and
            (4) by adding at the end the following:

    ``(e) Crediting of Rental Toward Royalty.--Any annual rental under 
this section that is paid with respect to a lease before the first day 
of the year for which the annual rental is owed shall be credited to the 
amount of royalty that is required to be paid under the lease for that 
year.''.

SEC. 231. LEASE DURATION AND WORK COMMITMENT REQUIREMENTS.

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

``SEC. 6. <<NOTE: Regulations.>> LEASE TERM AND WORK COMMITMENT 
            REQUIREMENTS.

    ``(a) In General.--
            ``(1) Primary term.--A geothermal lease shall be for a 
        primary term of 10 years.
            ``(2) Initial extension.--The Secretary shall extend the 
        primary term of a geothermal lease for 5 years if, for each year 
        after the 10th year of the lease--
                    ``(A) the Secretary determined under subsection (b) 
                that the lessee satisfied the work commitment 
                requirements that applied to the lease for that year; or
                    ``(B) the lessee paid in annual payments accordance 
                with subsection (c).
            ``(3) Additional extension.--The Secretary shall extend the 
        primary term of a geothermal lease (after an initial extension 
        under paragraph (2)) for an additional 5 years if, for each year 
        of the initial extension under paragraph (2), the Secretary 
        determined under subsection (b) that the lessee satisfied the 
        minimum work requirements that applied to the lease for that 
        year.

[[Page 119 STAT. 669]]

    ``(b) Requirement to Satisfy Annual Minimum Work Requirement.--
            ``(1) In general.--The lessee for a geothermal lease shall, 
        for each year after the 10th year of the lease, satisfy minimum 
        work requirements prescribed by the Secretary that apply to the 
        lease for that year.
            ``(2) Prescription of minimum work requirements.--The 
        Secretary shall issue regulations prescribing minimum work 
        requirements for geothermal leases, that--
                    ``(A) establish a geothermal potential; and
                    ``(B) if a geothermal potential has been 
                established, confirm the existence of producible 
                geothermal resources.

    ``(c) Payments in Lieu of Minimum Work Requirements.--In lieu of the 
minimum work requirements set forth in subsection (b)(2), the Secretary 
shall by regulation establish minimum annual payments which may be made 
by the lessee for a limited number of years that the Secretary 
determines will not impair achieving diligent development of the 
geothermal resource, but in no event shall the number of years exceed 
the duration of the extension period provided in subsection (a).
    ``(d) Transition Rules for Leases Issued Prior to Enactment of 
Energy Policy Act of 2005.--The Secretary shall by regulation establish 
transition rules for leases issued before the date of the enactment of 
this subsection, including terms under which a lease that is near the 
end of its term on the date of enactment of this subsection may be 
extended for up to 2 years--
            ``(1) to allow achievement of production under the lease; or
            ``(2) to allow the lease to be included in a producing unit.

    ``(e) Geothermal Lease Overlying Mining Claim.--
            ``(1) Exemption.--The lessee for a geothermal lease of an 
        area overlying an area subject to a mining claim for which a 
        plan of operations has been approved by the relevant Federal 
        land management agency is exempt from annual work requirements 
        established under this Act, if development of the geothermal 
        resource subject to the lease would interfere with the mining 
        operations under such claim.
            ``(2) Termination of exemption.--An exemption under this 
        paragraph expires upon the termination of the mining operations.

    ``(f) Termination of Application of Requirements.--Minimum work 
requirements prescribed under this section shall not apply to a 
geothermal lease after the date on which the geothermal resource is 
utilized under the lease in commercial quantities.''.

SEC. 232. ADVANCED ROYALTIES REQUIRED FOR CESSATION OF PRODUCTION.

    Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as 
amended by sections 223, 224, and 230) is further amended by adding at 
the end the following:
    ``(f) Advanced Royalties Required for Cessation of Production.--
            ``(1) In general.--Subject to paragraphs (2) and (3), if, at 
        any time after commercial production under a lease is achieved, 
        production ceases for any reason, the lease shall remain in full 
        force and effect for a period of not more than

[[Page 119 STAT. 670]]

        an aggregate number of 10 years beginning on the date production 
        ceases, if, during the period in which production is ceased, the 
        lessee pays royalties in advance at the monthly average rate at 
        which the royalty was paid during the period of production.
            ``(2) Reduction.--The amount of any production royalty paid 
        for any year shall be reduced (but not below 0) by the amount of 
        any advanced royalties paid under the lease to the extent that 
        the advance royalties have not been used to reduce production 
        royalties for a prior year.
            ``(3) Exceptions.--Paragraph (1) shall not apply if the 
        cessation in production is required or otherwise caused by--
                    ``(A) the Secretary;
                    ``(B) the Secretary of the Air Force;
                    ``(C) the Secretary of the Army;
                    ``(D) the Secretary of the Navy;
                    ``(E) a State or a political subdivision of a State; 
                or
                    ``(F) a force majeure.''.

SEC. 233. ANNUAL RENTAL.

    (a) Annual Rental Rate.--Section 5 of the Geothermal Steam Act of 
1970 (30 U.S.C. 1004) (as amended by section 223(a)) is further amended 
in subsection (a) by striking paragraph (3) and inserting the following:
            ``(3) payment in advance of an annual rental of not less 
        than--
                    ``(A) for each of the 1st through 10th years of the 
                lease--
                          ``(i) in the case of a lease awarded in a 
                      noncompetitive lease sale, $1 per acre or fraction 
                      thereof; or
                          ``(ii) in the case of a lease awarded in a 
                      competitive lease sale, $2 per acre or fraction 
                      thereof for the 1st year and $3 per acre or 
                      fraction thereof for each of the 2nd through 10th 
                      years; and
                    ``(B) for each year after the 10th year of the 
                lease, $5 per acre or fraction thereof;''.

    (b) Termination of Lease for Failure to Pay Rental.--Section 5 of 
the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as amended by 
sections 223, 224, 230, and 232) is further amended by adding at the end 
the following:
    ``(g) Termination of Lease for Failure to Pay Rental.--
            ``(1) In general.--The Secretary shall terminate any lease 
        with respect to which rental is not paid in accordance with this 
        Act and the terms of the lease under which the rental is 
        required, on the expiration of the 45-day period beginning on 
        the date of the failure to pay the rental.
            ``(2) Notification.--The Secretary shall promptly notify a 
        lessee that has not paid rental required under the lease that 
        the lease will be terminated at the end of the period referred 
        to in paragraph (1).
            ``(3) Reinstatement.--A lease that would otherwise terminate 
        under paragraph (1) shall not terminate under that paragraph if 
        the lessee pays to the Secretary, before the end of the period 
        referred to in paragraph (1), the amount of rental due plus a 
        late fee equal to 10 percent of the amount.''.

[[Page 119 STAT. 671]]

SEC. 234. <<NOTE: 42 USC 15873.>> DEPOSIT AND USE OF GEOTHERMAL LEASE 
            REVENUES FOR 5 FISCAL YEARS.

    (a) Deposit of Geothermal Resources Leases.--Notwithstanding any 
other provision of law, amounts received by the United States in the 
first 5 fiscal years beginning after the date of enactment of this Act 
as rentals, royalties, and other payments required under leases under 
the Geothermal Steam Act of 1970, excluding funds required to be paid to 
State and county governments, shall be deposited into a separate account 
in the Treasury.
    (b) Use of Deposits.--Amounts deposited under subsection (a) shall 
be available to the Secretary of the Interior for expenditure, without 
further appropriation and without fiscal year limitation, to implement 
the Geothermal Steam Act of 1970 and this Act.
    (c) Transfer of Funds.--For the purposes of coordination and 
processing of geothermal leases and geothermal use authorizations on 
Federal land the Secretary of the Interior may authorize the expenditure 
or transfer of such funds as are necessary to the Forest Service.

SEC. 235. ACREAGE LIMITATIONS.

    Section 7 of the Geothermal Steam Act of 1970 (30 U.S.C. 1006) is 
amended--
            (1) by striking ``sec. 7.'', and by inserting immediately 
        before and above the first paragraph the following:

``SEC. 7. ACREAGE LIMITATIONS.'';

            (2) in the first paragraph--
                    (A) by striking ``two thousand five hundred and 
                sixty acres'' and inserting ``5,120 acres''; and
                    (B) by striking ``twenty thousand four hundred and 
                eighty acres'' and inserting ``51,200 acres''; and
            (3) by striking the second paragraph.

SEC. 236. TECHNICAL AMENDMENTS.

    The Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) is further 
amended as follows:
            (1) <<NOTE: 30 USC 1001, 1002, 1005, 1020, 1022, 1024-
        1026.>> By striking ``geothermal steam and associated geothermal 
        resources'' each place it appears and inserting ``geothermal 
        resources''.
            (2) Section 2 (30 U.S.C. 1001) is amended by adding at the 
        end the following:
            ``(g) `direct use' means utilization of geothermal resources 
        for commercial, residential, agricultural, public facilities, or 
        other energy needs other than the commercial production of 
        electricity; and''.
            (3) Section 21 (30 U.S.C. 1020) is amended by striking ``(a) 
        Within one hundred'' and all that follows through ``(b) 
        Geothermal'' and inserting ``Geothermal''.
            (4) The first section (30 U.S.C. 1001 note) is amended by 
        striking ``That this'' and inserting the following:

``SEC. 1. SHORT TITLE.

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

``SEC. 2. DEFINITIONS.

    ``As''.

[[Page 119 STAT. 672]]

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

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

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

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

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

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

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

``SEC. 9. BYPRODUCTS.

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

``SEC. 10. RELINQUISHMENT OF GEOTHERMAL RIGHTS.

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

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

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

``SEC. 12. TERMINATION OF LEASES.

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

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

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

``SEC. 14. SURFACE LAND USE.

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

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

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

``SEC. 16. REQUIREMENT FOR LESSEES.

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

[[Page 119 STAT. 673]]

``SEC. 17. ADMINISTRATION.

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

``SEC. 19. DATA FROM FEDERAL AGENCIES.

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

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

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

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

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

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

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

``SEC. 24. RULES AND REGULATIONS.

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

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

    ``As''.
            (24) Section 26 <<NOTE: 30 USC 530.>> is amended by striking 
        ``sec. 26. The'' and inserting the following:

``SEC. 26. AMENDMENT.

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

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

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

``SEC. 28. SIGNIFICANT THERMAL FEATURES.

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

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

    ``The''.

SEC. 237. INTERMOUNTAIN WEST GEOTHERMAL CONSORTIUM.

    (a) Participation Authorized.--The Secretary, acting through the 
Idaho National Laboratory, may participate in a consortium described in 
subsection (b) to address science and science policy

[[Page 119 STAT. 674]]

issues surrounding the expanded discovery and use of geothermal energy, 
including from geothermal resources on public lands.
    (b) Members.--The <<NOTE: Establishment.>> consortium referred to in 
subsection (a) shall--
            (1) be known as the ``Intermountain West Geothermal 
        Consortium'';
            (2) be a regional consortium of institutions and government 
        agencies that focuses on building collaborative efforts among 
        the universities in the State of Idaho, other regional 
        universities, State agencies, and the Idaho National Laboratory;
            (3) include Boise State University, the University of Idaho 
        (including the Idaho Water Resources Research Institute), the 
        Oregon Institute of Technology, the Desert Research Institute 
        with the University and Community College System of Nevada, and 
        the Energy and Geoscience Institute at the University of Utah;
            (4) be hosted and managed by Boise State University; and
            (5) have a director appointed by Boise State University, and 
        associate directors appointed by each participating institution.

    (c) Financial Assistance.--The Secretary, acting through the Idaho 
National Laboratory and subject to the availability of appropriations, 
will provide financial assistance to Boise State University for 
expenditure under contracts with members of the consortium to carry out 
the activities of the consortium.

                        Subtitle C--Hydroelectric

SEC. 241. ALTERNATIVE CONDITIONS AND FISHWAYS.

    (a) Federal Reservations.--Section 4(e) of the Federal Power Act (16 
U.S.C. 797(e)) is amended by inserting after ``adequate protection and 
utilization of such reservation.'' at the end of the first proviso the 
following: ``The license applicant and any party to the proceeding shall 
be entitled to a determination on the record, after opportunity for an 
agency trial-type hearing of no more than 90 days, on any disputed 
issues of material fact with respect to such conditions. All disputed 
issues of material fact raised by any party shall be determined in a 
single trial-type hearing to be conducted by the relevant resource 
agency in accordance with the regulations promulgated under this 
subsection and within the time frame established by the Commission for 
each license proceeding. 
Within <<NOTE: Deadline. Regulations. Procedures.>> 90 days of the date 
of enactment of the Energy Policy Act of 2005, the Secretaries of the 
Interior, Commerce, and Agriculture shall establish jointly, by rule, 
the procedures for such expedited trial-type hearing, including the 
opportunity to undertake discovery and cross-examine witnesses, in 
consultation with the Federal Energy Regulatory Commission.''.

    (b) Fishways.--Section 18 of the Federal Power Act (16 U.S.C. 811) 
is amended by inserting after ``and such fishways as may be prescribed 
by the Secretary of Commerce.'' the <<NOTE: Deadline.>> following: ``The 
license applicant and any party to the proceeding shall be entitled to a 
determination on the record, after opportunity for an agency trial-type 
hearing of no more than 90 days, on any disputed issues of material fact 
with respect to such fishways. All disputed issues of material fact 
raised by any party shall be determined in a

[[Page 119 STAT. 675]]

single trial-type hearing to be conducted by the relevant resource 
agency in accordance with the regulations promulgated under this 
subsection and within the time frame established by the Commission for 
each license 
proceeding. <<NOTE: Deadline. Regulations. Procedures.>> Within 90 days 
of the date of enactment of the Energy Policy Act of 2005, the 
Secretaries of the Interior, Commerce, and Agriculture shall establish 
jointly, by rule, the procedures for such expedited trial-type hearing, 
including the opportunity to undertake discovery and cross-examine 
witnesses, in consultation with the Federal Energy Regulatory 
Commission.''.

    (c) Alternative Conditions and Prescriptions.--Part I of the Federal 
Power Act (16 U.S.C. 791a et seq.) is amended by adding the following 
new section at the end thereof:

``SEC. 33. <<NOTE: 16 USC 823d.>> ALTERNATIVE CONDITIONS AND 
            PRESCRIPTIONS.

    ``(a) Alternative Conditions.--(1) Whenever any person applies for a 
license for any project works within any reservation of the United 
States, and the Secretary of the department under whose supervision such 
reservation falls (referred to in this subsection as the `Secretary') 
deems a condition to such license to be necessary under the first 
proviso of section 4(e), the license applicant or any other party to the 
license proceeding may propose an alternative condition.
    ``(2) Notwithstanding the first proviso of section 4(e), the 
Secretary shall accept the proposed alternative condition referred to in 
paragraph (1), and the Commission shall include in the license such 
alternative condition, if the Secretary determines, based on substantial 
evidence provided by the license applicant, any other party to the 
proceeding, or otherwise available to the Secretary, that such 
alternative condition--
            ``(A) provides for the adequate protection and utilization 
        of the reservation; and
            ``(B) will either, as compared to the condition initially by 
        the Secretary--
                    ``(i) cost significantly less to implement; or
                    ``(ii) result in improved operation of the project 
                works for electricity production.

    ``(3) In making a determination under paragraph (2), the Secretary 
shall consider evidence provided for the record by any party to a 
licensing proceeding, or otherwise available to the Secretary, including 
any evidence provided by the Commission, on the implementation costs or 
operational impacts for electricity production of a proposed 
alternative.
    ``(4) <<NOTE: Public information. Records.>> The Secretary concerned 
shall submit into the public record of the Commission proceeding with 
any condition under section 4(e) or alternative condition it accepts 
under this section, a written statement explaining the basis for such 
condition, and reason for not accepting any alternative condition under 
this section. The written statement must demonstrate that the Secretary 
gave equal consideration to the effects of the condition adopted and 
alternatives not accepted on energy supply, distribution, cost, and use; 
flood control; navigation; water supply; and air quality (in addition to 
the preservation of other aspects of environmental quality); based on 
such information as may be available to the Secretary, including 
information voluntarily provided in a timely manner by the applicant and 
others. The Secretary shall also submit, together with the 
aforementioned written statement, all studies, data, and

[[Page 119 STAT. 676]]

other factual information available to the Secretary and relevant to the 
Secretary's decision.
    ``(5) If the Commission finds that the Secretary's final condition 
would be inconsistent with the purposes of this part, or other 
applicable law, the Commission may refer the dispute to the Commission's 
Dispute Resolution Service. <<NOTE: Deadline.>> The Dispute Resolution 
Service shall consult with the Secretary and the Commission and issue a 
non-binding advisory within 90 days. The Secretary may accept the 
Dispute Resolution Service advisory unless the Secretary finds that the 
recommendation will not adequately protect the 
reservation. <<NOTE: Records.>> The Secretary shall submit the advisory 
and the Secretary's final written determination into the record of the 
Commission's proceeding.

    ``(b) Alternative Prescriptions.--(1) Whenever the Secretary of the 
Interior or the Secretary of Commerce prescribes a fishway under section 
18, the license applicant or any other party to the license proceeding 
may propose an alternative to such prescription to construct, maintain, 
or operate a fishway.
    ``(2) Notwithstanding section 18, the Secretary of the Interior or 
the Secretary of Commerce, as appropriate, shall accept and prescribe, 
and the Commission shall require, the proposed alternative referred to 
in paragraph (1), if the Secretary of the appropriate department 
determines, based on substantial evidence provided by the license 
applicant, any other party to the proceeding, or otherwise available to 
the Secretary, that such alternative--
            ``(A) will be no less protective than the fishway initially 
        prescribed by the Secretary; and
            ``(B) will either, as compared to the fishway initially 
        prescribed by the Secretary--
                    ``(i) cost significantly less to implement; or
                    ``(ii) result in improved operation of the project 
                works for electricity production.

    ``(3) In making a determination under paragraph (2), the Secretary 
shall consider evidence provided for the record by any party to a 
licensing proceeding, or otherwise available to the Secretary, including 
any evidence provided by the Commission, on the implementation costs or 
operational impacts for electricity production of a proposed 
alternative.
    ``(4) <<NOTE: Public information. Records.>> The Secretary concerned 
shall submit into the public record of the Commission proceeding with 
any prescription under section 18 or alternative prescription it accepts 
under this section, a written statement explaining the basis for such 
prescription, and reason for not accepting any alternative prescription 
under this section. The written statement must demonstrate that the 
Secretary gave equal consideration to the effects of the prescription 
adopted and alternatives not accepted on energy supply, distribution, 
cost, and use; flood control; navigation; water supply; and air quality 
(in addition to the preservation of other aspects of environmental 
quality); based on such information as may be available to the 
Secretary, including information voluntarily provided in a timely manner 
by the applicant and others. The Secretary shall also submit, together 
with the aforementioned written statement, all studies, data, and other 
factual information available to the Secretary and relevant to the 
Secretary's decision.

    ``(5) If the Commission finds that the Secretary's final 
prescription would be inconsistent with the purposes of this part, or 
other applicable law, the Commission may refer the dispute to the

[[Page 119 STAT. 677]]

Commission's Dispute Resolution Service. <<NOTE: Deadline.>> The Dispute 
Resolution Service shall consult with the Secretary and the Commission 
and issue a non-binding advisory within 90 days. The Secretary may 
accept the Dispute Resolution Service advisory unless the Secretary 
finds that the recommendation will not adequately protect the fish 
resources. <<NOTE: Records.>> The Secretary shall submit the advisory 
and the Secretary's final written determination into the record of the 
Commission's proceeding.''.

SEC. 242. <<NOTE: 42 USC 15881.>> HYDROELECTRIC PRODUCTION INCENTIVES.

    (a) Incentive Payments.--For electric energy generated and sold by a 
qualified hydroelectric facility during the incentive period, the 
Secretary shall make, subject to the availability of appropriations, 
incentive payments to the owner or operator of such facility. The amount 
of such payment made to any such owner or operator shall be as 
determined under subsection (e) of this section. Payments under this 
section may only be made upon receipt by the Secretary of an incentive 
payment application which establishes that the applicant is eligible to 
receive such payment and which satisfies such other requirements as the 
Secretary deems necessary. Such application shall be in such form, and 
shall be submitted at such time, as the Secretary shall establish.
    (b) Definitions.--For purposes of this section:
            (1) Qualified hydroelectric facility.--The term ``qualified 
        hydroelectric facility'' means a turbine or other generating 
        device owned or solely operated by a non-Federal entity which 
        generates hydroelectric energy for sale and which is added to an 
        existing dam or conduit.
            (2) Existing dam or conduit.--The term ``existing dam or 
        conduit'' means any dam or conduit the construction of which was 
        completed before the date of the enactment of this section and 
        which does not require any construction or enlargement of 
        impoundment or diversion structures (other than repair or 
        reconstruction) in connection with the installation of a turbine 
        or other generating device.
            (3) Conduit.--The term ``conduit'' has the same meaning as 
        when used in section 30(a)(2) of the Federal Power Act (16 
        U.S.C. 823a(a)(2)).

The <<NOTE: Applicability.>> terms defined in this subsection shall 
apply without regard to the hydroelectric kilowatt capacity of the 
facility concerned, without regard to whether the facility uses a dam 
owned by a governmental or nongovernmental entity, and without regard to 
whether the facility begins operation on or after the date of the 
enactment of this section.

    (c) Eligibility Window.--Payments may be made under this section 
only for electric energy generated from a qualified hydroelectric 
facility which begins operation during the period of 10 fiscal years 
beginning with the first full fiscal year occurring after the date of 
enactment of this subtitle.
    (d) Incentive Period.--A qualified hydroelectric facility may 
receive payments under this section for a period of 10 fiscal years 
(referred to in this section as the ``incentive period''). Such period 
shall begin with the fiscal year in which electric energy generated from 
the facility is first eligible for such payments.
    (e) Amount of Payment.--
            (1) In general.--Payments made by the Secretary under this 
        section to the owner or operator of a qualified hydroelectric

[[Page 119 STAT. 678]]

        facility shall be based on the number of kilowatt hours of 
        hydroelectric energy generated by the facility during the 
        incentive period. For any such facility, the amount of such 
        payment shall be 1.8 cents per kilowatt hour (adjusted as 
        provided in paragraph (2)), subject to the availability of 
        appropriations under subsection (g), except that no facility may 
        receive more than $750,000 in 1 calendar year.
            (2) Adjustments.--The amount of the payment made to any 
        person under this section as provided in paragraph (1) shall be 
        adjusted for inflation for each fiscal year beginning after 
        calendar year 2005 in the same manner as provided in the 
        provisions of section 29(d)(2)(B) of the Internal Revenue Code 
        of 1986, except that in applying such provisions the calendar 
        year 2005 shall be substituted for calendar year 1979.

    (f) Sunset.--No payment may be made under this section to any 
qualified hydroelectric facility after the expiration of the period of 
20 fiscal years beginning with the first full fiscal year occurring 
after the date of enactment of this subtitle, and no payment may be made 
under this section to any such facility after a payment has been made 
with respect to such facility for a period of 10 fiscal years.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out the purposes of this section 
$10,000,000 for each of the fiscal years 2006 through 2015.

SEC. 243. <<NOTE: 42 USC 15882.>> HYDROELECTRIC EFFICIENCY IMPROVEMENT.

    (a) Incentive Payments.--The Secretary shall make incentive payments 
to the owners or operators of hydroelectric facilities at existing dams 
to be used to make capital improvements in the facilities that are 
directly related to improving the efficiency of such facilities by at 
least 3 percent.
    (b) Limitations.--Incentive payments under this section shall not 
exceed 10 percent of the costs of the capital improvement concerned and 
not more than 1 payment may be made with respect to improvements at a 
single facility. No payment in excess of $750,000 may be made with 
respect to improvements at a single facility.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section not more than $10,000,000 for 
each of the fiscal years 2006 through 2015.

SEC. 244. ALASKA STATE JURISDICTION OVER SMALL HYDROELECTRIC PROJECTS.

    Section 32 of the Federal Power Act (16 U.S.C. 823c) is amended--
            (1) in subsection (a)(3)(C), by inserting ``except as 
        provided in subsection (j),'' before ``conditions''; and
            (2) by adding at the end the following:

    ``(j) Fish and Wildlife.--If the State of Alaska determines that a 
recommendation under subsection (a)(3)(C) is inconsistent with 
paragraphs (1) and (2) of subsection (a), the State of Alaska may 
decline to adopt all or part of the recommendations in accordance with 
the procedures established under section 10(j)(2).''.

SEC. 245. <<NOTE: Montana.>> FLINT CREEK HYDROELECTRIC PROJECT.

    (a) Extension of Time.--
Notwithstanding <<NOTE: Applicability. Effective dates.>> the time 
period specified in section 5 of the Federal Power Act (16 U.S.C. 798)

[[Page 119 STAT. 679]]

that would otherwise apply to the Federal Energy Regulatory Commission 
(referred to in this section as the ``Commission'') project numbered 
12107, the Commission shall--
            (1) if the preliminary permit is in effect on the date of 
        enactment of this Act, extend the preliminary permit for a 
        period of 3 years beginning on the date on which the preliminary 
        permit expires; or
            (2) if the preliminary permit expired before the date of 
        enactment of this Act, on request of the permittee, reinstate 
        the preliminary permit for an additional 3-year period beginning 
        on the date of enactment of this Act.

    (b) Limitation on Certain Fees.--Notwithstanding section 10(e)(1) of 
the Federal Power Act (16 U.S.C. 803(e)(1)) or any other provision of 
Federal law providing for the payment to the United States of charges 
for the use of Federal land for the purposes of operating and 
maintaining a hydroelectric development licensed by the Commission, any 
political subdivision of the State of Montana that holds a Commission 
license for the Commission project numbered 12107 in Granite and Deer 
Lodge Counties, Montana, shall be required to pay to the United States 
for the use of that land for each year during which the political 
subdivision continues to hold the license for the project, the lesser 
of--
            (1) $25,000; or
            (2) such annual charge as the Commission or any other 
        department or agency of the Federal Government may assess.

SEC. 246. SMALL HYDROELECTRIC POWER PROJECTS.

    Section 408(a)(6) of the Public Utility Regulatory Policies Act of 
1978 (16 U.S.C. 2708(a)(6)) is amended by striking ``April 20, 1977'' 
and inserting ``July 22, 2005''.

                       Subtitle D--Insular Energy

SEC. 251. INSULAR AREAS ENERGY SECURITY.

    Section 604 of the Act entitled ``An Act to authorize appropriations 
for certain insular areas of the United States, and for other 
purposes'', approved December 24, 1980 (48 U.S.C. 1492), is amended--
            (1) in subsection (a)(4) by striking the period and 
        inserting a semicolon;
            (2) by adding at the end of subsection (a) the following new 
        paragraphs:
            ``(5) electric power transmission and distribution lines in 
        insular areas are inadequate to withstand damage caused by the 
        hurricanes and typhoons which frequently occur in insular areas 
        and such damage often costs millions of dollars to repair; and
            ``(6) the refinement of renewable energy technologies since 
        the publication of the 1982 Territorial Energy Assessment 
        prepared pursuant to subsection (c) reveals the need to reassess 
        the state of energy production, consumption, infrastructure, 
        reliance on imported energy, opportunities for energy 
        conservation and increased energy efficiency, and indigenous 
        sources in regard to the insular areas.'';
            (3) by amending subsection (e) to read as follows:

[[Page 119 STAT. 680]]

    ``(e)(1) The Secretary of the Interior, in consultation with the 
Secretary of Energy and the head of government of each insular area, 
shall update the plans required under subsection (c) by--
            ``(A) updating the contents required by subsection (c);
            ``(B) drafting long-term energy plans for such insular areas 
        with the objective of reducing, to the extent feasible, their 
        reliance on energy imports by the year 2012, increasing energy 
        conservation and energy efficiency, and maximizing, to the 
        extent feasible, use of indigenous energy sources; and
            ``(C) drafting long-term energy transmission line plans for 
        such insular areas with the objective that the maximum 
        percentage feasible of electric power transmission and 
        distribution lines in each insular area be protected from damage 
        caused by hurricanes and typhoons.

    ``(2) In carrying out this subsection, the Secretary of Energy shall 
identify and evaluate the strategies or projects with the greatest 
potential for reducing the dependence on imported fossil fuels as used 
for the generation of electricity, including strategies and projects 
for--
            ``(A) improved supply-side efficiency of centralized 
        electrical generation, transmission, and distribution systems;
            ``(B) improved demand-side management through--
                    ``(i) the application of established standards for 
                energy efficiency for appliances;
                    ``(ii) the conduct of energy audits for business and 
                industrial customers; and
                    ``(iii) the use of energy savings performance 
                contracts;
            ``(C) increased use of renewable energy, including--
                    ``(i) solar thermal energy for electric generation;
                    ``(ii) solar thermal energy for water heating in 
                large buildings, such as hotels, hospitals, government 
                buildings, and residences;
                    ``(iii) photovoltaic energy;
                    ``(iv) wind energy;
                    ``(v) hydroelectric energy;
                    ``(vi) wave energy;
                    ``(vii) energy from ocean thermal resources, 
                including ocean thermal-cooling for community air 
                conditioning;
                    ``(viii) water vapor condensation for the production 
                of potable water;
                    ``(ix) fossil fuel and renewable hybrid electrical 
                generation systems; and
                    ``(x) other strategies or projects that the 
                Secretary may identify as having significant potential; 
                and
            ``(D) fuel substitution and minimization with indigenous 
        biofuels, such as coconut oil.

    ``(3) In carrying out this subsection, for each insular area with a 
significant need for distributed generation, the Secretary of Energy 
shall identify and evaluate the most promising strategies and projects 
described in subparagraphs (C) and (D) of paragraph (2) for meeting that 
need.
    ``(4) In assessing the potential of any strategy or project under 
paragraphs (2) and (3), the Secretary of Energy shall consider--
            ``(A) the estimated cost of the power or energy to be 
        produced, including--
                    ``(i) any additional costs associated with the 
                distribution of the generation; and

[[Page 119 STAT. 681]]

                    ``(ii) the long-term availability of the generation 
                source;
            ``(B) the capacity of the local electrical utility to 
        manage, operate, and maintain any project that may be 
        undertaken; and
            ``(C) other factors the Secretary of Energy considers to be 
        appropriate.

    ``(5) <<NOTE: Deadline.>> Not later than 1 year after the date of 
enactment of this subsection, the Secretary of the Interior shall submit 
to the Committee on Energy and Natural Resources of the Senate, the 
Committee on Resources of the House of Representatives, and the 
Committee on Energy and Commerce of the House of Representatives, the 
updated plans for each insular area required by this subsection.''; and
            (4) by amending subsection (g)(4) to read as follows:
            ``(4) Power line grants for insular areas.--
                    ``(A) In general.--The Secretary of the Interior is 
                authorized to make grants to governments of insular 
                areas of the United States to carry out eligible 
                projects to protect electric power transmission and 
                distribution lines in such insular areas from damage 
                caused by hurricanes and typhoons.
                    ``(B) Eligible projects.--The Secretary of the 
                Interior may award grants under subparagraph (A) only to 
                governments of insular areas of the United States that 
                submit written project plans to the Secretary for 
                projects that meet the following criteria:
                          ``(i) The project is designed to protect 
                      electric power transmission and distribution lines 
                      located in 1 or more of the insular areas of the 
                      United States from damage caused by hurricanes and 
                      typhoons.
                          ``(ii) The project is likely to substantially 
                      reduce the risk of future damage, hardship, loss, 
                      or suffering.
                          ``(iii) The project addresses 1 or more 
                      problems that have been repetitive or that pose a 
                      significant risk to public health and safety.
                          ``(iv) The project is not likely to cost more 
                      than the value of the reduction in direct damage 
                      and other negative impacts that the project is 
                      designed to prevent or mitigate. The cost benefit 
                      analysis required by this criterion shall be 
                      computed on a net present value basis.
                          ``(v) The project design has taken into 
                      consideration long-term changes to the areas and 
                      persons it is designed to protect and has 
                      manageable future maintenance and modification 
                      requirements.
                          ``(vi) The project plan includes an analysis 
                      of a range of options to address the problem it is 
                      designed to prevent or mitigate and a 
                      justification for the selection of the project in 
                      light of that analysis.
                          ``(vii) The applicant has demonstrated to the 
                      Secretary that the matching funds required by 
                      subparagraph (D) are available.
                    ``(C) Priority.--When making grants under this 
                paragraph, the Secretary of the Interior shall give 
                priority to grants for projects which are likely to--
                          ``(i) have the greatest impact on reducing 
                      future disaster losses; and

[[Page 119 STAT. 682]]

                          ``(ii) best conform with plans that have been 
                      approved by the Federal Government or the 
                      government of the insular area where the project 
                      is to be carried out for development or hazard 
                      mitigation for that insular area.
                    ``(D) Matching requirement.--The Federal share of 
                the cost for a project for which a grant is provided 
                under this paragraph shall not exceed 75 percent of the 
                total cost of that project. The non-Federal share of the 
                cost may be provided in the form of cash or services.
                    ``(E) Treatment of funds for certain purposes.--
                Grants provided under this paragraph shall not be 
                considered as income, a resource, or a duplicative 
                program when determining eligibility or benefit levels 
                for Federal major disaster and emergency assistance.
                    ``(F) Authorization of appropriations.--There are 
                authorized to be appropriated to carry out this 
                paragraph $6,000,000 for each fiscal year beginning 
                after the date of the enactment of this paragraph.''.

SEC. 252. <<NOTE: 42 USC 15891.>> PROJECTS ENHANCING INSULAR ENERGY 
            INDEPENDENCE.

    (a) Project Feasibilty Studies.--
            (1) In general.--On a request described in paragraph (2), 
        the Secretary shall conduct a feasibility study of a project to 
        implement a strategy or project identified in the plans 
        submitted to Congress pursuant to section 604 of the Act 
        entitled ``An Act to authorize appropriations for certain 
        insular areas of the United States, and for other purposes'', 
        approved December 24, 1980 (48 U.S.C. 1492), as having the 
        potential to--
                    (A) significantly reduce the dependence of an 
                insular area on imported fossil fuels; or
                    (B) provide needed distributed generation to an 
                insular area.
            (2) Request.--The Secretary shall conduct a feasibility 
        study under paragraph (1) on--
                    (A) the request of an electric utility located in an 
                insular area that commits to fund at least 10 percent of 
                the cost of the study; and
                    (B) if the electric utility is located in the 
                Federated States of Micronesia, the Republic of the 
                Marshall Islands, or the Republic of Palau, written 
                support for that request by the President or the 
                Ambassador of the affected freely associated state.
            (3) Consultation.--The Secretary shall consult with regional 
        utility organizations in--
                    (A) conducting feasibility studies under paragraph 
                (1); and
                    (B) determining the feasibility of potential 
                projects.
            (4) Feasibility.--For the purpose of a feasibility study 
        under paragraph (1), a project shall be determined to be 
        feasible if the project would significantly reduce the 
        dependence of an insular area on imported fossil fuels, or 
        provide needed distributed generation to an insular area, at a 
        reasonable cost.

    (b) Implementation.--
            (1) In general.--On a determination by the Secretary (in 
        consultation with the Secretary of the Interior) that a project

[[Page 119 STAT. 683]]

        is feasible under subsection (a) and a commitment by an electric 
        utility to operate and maintain the project, the Secretary may 
        provide such technical and financial assistance as the Secretary 
        determines is appropriate for the implementation of the project.
            (2) Regional utility organizations.--In providing assistance 
        under paragraph (1), the Secretary shall consider providing the 
        assistance through regional utility organizations.

    (c) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated to 
        the Secretary--
                    (A) $500,000 for each fiscal year for project 
                feasibility studies under subsection (a); and
                    (B) $4,000,000 for each fiscal year for project 
                implementation under subsection (b).
            (2) Limitation of funds received by insular areas.--No 
        insular area may receive, during any 3-year period, more than 20 
        percent of the total funds made available during that 3-year 
        period under subparagraphs (A) and (B) of paragraph (1) unless 
        the Secretary determines that providing funding in excess of 
        that percentage best advances existing opportunities to meet the 
        objectives of this section.

                         TITLE III--OIL AND GAS

           Subtitle A--Petroleum Reserve and Home Heating Oil

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

    (a) Amendment to Title I of the Energy Policy and Conservation 
Act.--Title I of the Energy Policy and Conservation Act (42 U.S.C. 6212 
et seq.) is amended--
            (1) by striking section 166 (42 U.S.C. 6246) and inserting 
        the following:


                    ``authorization of appropriations


    ``Sec. 166. There are authorized to be appropriated to the Secretary 
such sums as are necessary to carry out this part and part D, to remain 
available until expended.'';
            (2) by striking section 186 (42 U.S.C. 6250e); and
            (3) by striking part E (42 U.S.C. 6251).

    (b) Amendment to Title II of the Energy Policy and Conservation 
Act.--Title II of the Energy Policy and Conservation Act (42 U.S.C. 6271 
et seq.) is amended--
            (1) by inserting before section 273 (42 U.S.C. 6283) the 
        following:

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

            (2) by striking section 273(e) (42 U.S.C. 6283(e)); and
            (3) by striking part D (42 U.S.C. 6285).

    (c) Technical Amendments.--The table of contents for the Energy 
Policy and Conservation Act is amended--

[[Page 119 STAT. 684]]

            (1) by inserting after the items relating to part C of title 
        I the following:

              ``Part D--Northeast Home Heating Oil Reserve

``Sec. 181. Establishment.
``Sec. 182. Authority.
``Sec. 183. Conditions for release; plan.
``Sec. 184. Northeast Home Heating Oil Reserve Account.
``Sec. 185. Exemptions.'';

            (2) by amending the items relating to part C of title II to 
        read as follows:

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

``Sec. 273. Summer fill and fuel budgeting programs.'';

        and
            (3) by striking the items relating to part D of title II.

    (d) Amendment to the Energy Policy and Conservation Act.--Section 
183(b)(1) of the Energy Policy and Conservation Act (42 U.S.C. 
6250b(b)(1)) is amended by striking ``by more'' and all that follows 
through ``mid-October through March'' and inserting ``by more than 60 
percent over its 5-year rolling average for the months of mid-October 
through March (considered as a heating season average)''.
    (e) Fill <<NOTE: 42 USC 6240 note.>> Strategic Petroleum Reserve to 
Capacity.--
            (1) In general.--The Secretary shall, as expeditiously as 
        practicable, without incurring excessive cost or appreciably 
        affecting the price of petroleum products to consumers, acquire 
        petroleum in quantities sufficient to fill the Strategic 
        Petroleum Reserve to the 1,000,000,000-barrel capacity 
        authorized under section 154(a) of the Energy Policy and 
        Conservation Act (42 U.S.C. 6234(a)), in accordance with the 
        sections 159 and 160 of that Act (42 U.S.C. 6239, 6240).
            (2) Procedures.--
                    (A) Amendment.--Section 160 of the Energy Policy and 
                Conservation Act (42 U.S.C. 6240) is amended by 
                inserting after subsection (b) the following new 
                subsection:

    ``(c) Procedures.--The <<NOTE: Public 
information. Notice.>> Secretary shall develop, with public notice and 
opportunity for comment, procedures consistent with the objectives of 
this section to acquire petroleum for the Reserve. Such procedures shall 
take into account the need to--
            ``(1) maximize overall domestic supply of crude oil 
        (including quantities stored in private sector inventories);
            ``(2) avoid incurring excessive cost or appreciably 
        affecting the price of petroleum products to consumers;
            ``(3) minimize the costs to the Department of the Interior 
        and the Department of Energy in acquiring such petroleum 
        products (including foregone revenues to the Treasury when 
        petroleum products for the Reserve are obtained through the 
        royalty-in-kind program);
            ``(4) protect national security;
            ``(5) avoid adversely affecting current and futures prices, 
        supplies, and inventories of oil; and
            ``(6) address other factors that the Secretary determines to 
        be appropriate.''.
                    (B) Review of <<NOTE: 42 USC 6240 note.>> requests 
                for deferrals of scheduled deliveries.--The procedures 
                developed under section 160(c) of the Energy Policy and 
                Conservation Act, as added by subparagraph (A), shall 
                include procedures and criteria

[[Page 119 STAT. 685]]

                for the review of requests for the deferrals of 
                scheduled deliveries.
                    (C) Deadlines.--The Secretary shall--
                          (i) propose the procedures required under the 
                      amendment made by subparagraph (A) not later than 
                      120 days after the date of enactment of this Act;
                          (ii) promulgate the procedures not later than 
                      180 days after the date of enactment of this Act; 
                      and
                          (iii) comply with the procedures in acquiring 
                      petroleum for the Reserve effective beginning on 
                      the date that is 180 days after the date of 
                      enactment of this Act.

SEC. 302. NATIONAL OILHEAT RESEARCH ALLIANCE.

    Section 713 of the Energy Act of 2000 (Public Law 106-469; 42 U.S.C. 
6201 note) is amended by striking ``4'' and inserting ``9''.

SEC. 303. <<NOTE: Deadline.>> SITE SELECTION.

    Not later than 1 year after the date of enactment of this Act, the 
Secretary shall complete a proceeding to select, from sites that the 
Secretary has previously studied, sites necessary to enable acquisition 
by the Secretary of the full authorized volume of the Strategic 
Petroleum Reserve. In such proceeding, the Secretary shall first 
consider and give preference to the five sites which the Secretary 
previously assessed in the Draft Environmental Impact Statement, DOE/
EIS-0165-D. However, the Secretary in his discretion may select other 
sites as proposed by a State where a site has been previously studied by 
the Secretary to meet the full authorized volume of the Strategic 
Petroleum Reserve.

                         Subtitle B--Natural Gas

SEC. 311. EXPORTATION OR IMPORTATION OF NATURAL GAS.

    (a) Scope of Natural Gas Act.--Section 1(b) of the Natural Gas Act 
(15 U.S.C. 717(b)) is amended by inserting ``and to the importation or 
exportation of natural gas in foreign commerce and to persons engaged in 
such importation or exportation,'' after ``such transportation or 
sale,''.
    (b) Definition.--Section 2 of the Natural Gas Act (15 U.S.C. 717a) 
is amended by adding at the end the following new paragraph:
            ``(11) `LNG terminal' includes all natural gas facilities 
        located onshore or in State waters that are used to receive, 
        unload, load, store, transport, gasify, liquefy, or process 
        natural gas that is imported to the United States from a foreign 
        country, exported to a foreign country from the United States, 
        or transported in interstate commerce by waterborne vessel, but 
        does not include--
                    ``(A) waterborne vessels used to deliver natural gas 
                to or from any such facility; or
                    ``(B) any pipeline or storage facility subject to 
                the jurisdiction of the Commission under section 7.''.

    (c) Authorization for Siting, Construction, Expansion, or Operation 
of LNG Terminals.--(1) The title for section 3 of the Natural Gas Act 
(15 U.S.C. 717b) is amended by inserting ``; lng terminals'' after 
``exportation or importation of natural gas''.

[[Page 119 STAT. 686]]

    (2) Section 3 of the Natural Gas Act (15 U.S.C. 717b) is amended by 
adding at the end the following:
    ``(d) Except as specifically provided in this Act, nothing in this 
Act affects the rights of States under--
            ``(1) the Coastal Zone Management Act of 1972 (16 U.S.C. 
        1451 et seq.);
            ``(2) the Clean Air Act (42 U.S.C. 7401 et seq.); or
            ``(3) the Federal Water Pollution Control Act (33 U.S.C. 
        1251 et seq.).

    ``(e)(1) The Commission shall have the exclusive authority to 
approve or deny an application for the siting, construction, expansion, 
or operation of an LNG terminal. Except as specifically provided in this 
Act, nothing in this Act is intended to affect otherwise applicable law 
related to any Federal agency's authorities or responsibilities related 
to LNG terminals.
    ``(2) Upon the filing of any application to site, construct, expand, 
or operate an LNG terminal, the Commission shall--
            ``(A) set the matter for hearing;
            ``(B) <<NOTE: Notice.>> give reasonable notice of the 
        hearing to all interested persons, including the State 
        commission of the State in which the LNG terminal is located 
        and, if not the same, the Governor-appointed State agency 
        described in section 3A;
            ``(C) decide the matter in accordance with this subsection; 
        and
            ``(D) issue or deny the appropriate order accordingly.

    ``(3)(A) Except as provided in subparagraph (B), the Commission may 
approve an application described in paragraph (2), in whole or part, 
with such modifications and upon such terms and conditions as the 
Commission find necessary or appropriate.
    ``(B) Before January 1, 2015, the Commission shall not--
            ``(i) deny an application solely on the basis that the 
        applicant proposes to use the LNG terminal exclusively or 
        partially for gas that the applicant or an affiliate of the 
        applicant will supply to the facility; or
            ``(ii) condition an order on--
                    ``(I) a requirement that the LNG terminal offer 
                service to customers other than the applicant, or any 
                affiliate of the applicant, securing the order;
                    ``(II) any regulation of the rates, charges, terms, 
                or conditions of service of the LNG terminal; or
                    ``(III) a requirement to file with the Commission 
                schedules or contracts related to the rates, charges, 
                terms, or conditions of service of the LNG terminal.

    ``(C) <<NOTE: Termination date.>> Subparagraph (B) shall cease to 
have effect on January 1, 2030.

    ``(4) An order issued for an LNG terminal that also offers service 
to customers on an open access basis shall not result in subsidization 
of expansion capacity by existing customers, degradation of service to 
existing customers, or undue discrimination against existing customers 
as to their terms or conditions of service at the facility, as all of 
those terms are defined by the Commission.
    ``(f)(1) In this subsection, the term `military installation'--
            ``(A) means a base, camp, post, range, station, yard, 
        center, or homeport facility for any ship or other activity 
        under the jurisdiction of the Department of Defense, including 
        any leased facility, that is located within a State, the 
        District of Columbia, or any territory of the United States; and

[[Page 119 STAT. 687]]

            ``(B) does not include any facility used primarily for civil 
        works, rivers and harbors projects, or flood control projects, 
        as determined by the Secretary of Defense.

    ``(2) <<NOTE: Memorandum.>> The Commission shall enter into a 
memorandum of understanding with the Secretary of Defense for the 
purpose of ensuring that the Commission coordinate and consult with the 
Secretary of Defense on the siting, construction, expansion, or 
operation of liquefied natural gas facilities that may affect an active 
military installation.

    ``(3) The Commission shall obtain the concurrence of the Secretary 
of Defense before authorizing the siting, construction, expansion, or 
operation of liquefied natural gas facilities affecting the training or 
activities of an active military installation.''.
    (d) LNG Terminal State and Local Safety Concerns.--After section 3 
of the Natural Gas Act (15 U.S.C. 717b) insert the following:


                 ``state and local safety considerations


    ``Sec. 3A. (a) <<NOTE: Regulations. Deadline. 15 USC 717b-1.>> The 
Commission shall promulgate regulations on the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321 et seq.) pre-filing process within 60 
days after the date of enactment of this section. An applicant shall 
comply with pre-filing process required under the National Environmental 
Policy Act of 1969 prior to filing an application with the Commission. 
The regulations shall require that the pre-filing process commence at 
least 6 months prior to the filing of an application for authorization 
to construct an LNG terminal and encourage applicants to cooperate with 
State and local officials.

    ``(b) The Governor of a State in which an LNG terminal is proposed 
to be located shall designate the appropriate State agency for the 
purposes of consulting with the Commission regarding an application 
under section 3. The Commission shall consult with such State agency 
regarding State and local safety considerations prior to issuing an 
order pursuant to section 3. For the purposes of this section, State and 
local safety considerations include--
            ``(1) the kind and use of the facility;
            ``(2) the existing and projected population and demographic 
        characteristics of the location;
            ``(3) the existing and proposed land use near the location;
            ``(4) the natural and physical aspects of the location;
            ``(5) the emergency response capabilities near the facility 
        location; and
            ``(6) the need to encourage remote siting.

    ``(c) The State agency may furnish an advisory report on State and 
local safety considerations to the Commission with respect to an 
application no later than 30 days after the application was filed with 
the Commission. Before issuing an order authorizing an applicant to 
site, construct, expand, or operate an LNG terminal, the Commission 
shall review and respond specifically to the issues raised by the State 
agency described in subsection (b) in the advisory 
report. <<NOTE: Applicability.>> This subsection shall apply to any 
application filed after the date of enactment of the Energy Policy Act 
of 2005. A <<NOTE: Deadline. Reports.>> State agency has 30 days after 
such date of enactment to file an advisory report related to any 
applications pending at the Commission as of such date of enactment.

    ``(d) The State commission of the State in which an LNG terminal is 
located may, after the terminal is operational, conduct

[[Page 119 STAT. 688]]

safety inspections in conformance with Federal regulations and 
guidelines with respect to the LNG terminal upon written notice to the 
Commission. The State commission may notify the Commission of any 
alleged safety violations. <<NOTE: Notification.>> The Commission shall 
transmit information regarding such allegations to the appropriate 
Federal agency, which shall take appropriate action and notify the State 
commission.

    ``(e)(1) In any order authorizing an LNG terminal the Commission 
shall require the LNG terminal operator to develop an Emergency Response 
Plan. The Emergency Response Plan shall be prepared in consultation with 
the United States Coast Guard and State and local agencies and be 
approved by the Commission prior to any final approval to begin 
construction. The Plan shall include a cost-sharing plan.
    ``(2) A cost-sharing plan developed under paragraph (1) shall 
include a description of any direct cost reimbursements that the 
applicant agrees to provide to any State and local agencies with 
responsibility for security and safety--
            ``(A) at the LNG terminal; and
            ``(B) in proximity to vessels that serve the facility.''.

SEC. 312. NEW NATURAL GAS STORAGE FACILITIES.

    Section 4 of the Natural Gas Act (15 U.S.C. 717c) is amended by 
adding at the end the following:
    ``(f)(1) In exercising its authority under this Act or the Natural 
Gas Policy Act of 1978 (15 U.S.C. 3301 et seq.), the Commission may 
authorize a natural gas company (or any person that will be a natural 
gas company on completion of any proposed construction) to provide 
storage and storage-related services at market-based rates for new 
storage capacity related to a specific facility placed in service after 
the date of enactment of the Energy Policy Act of 2005, notwithstanding 
the fact that the company is unable to demonstrate that the company 
lacks market power, if the Commission determines that--
            ``(A) market-based rates are in the public interest and 
        necessary to encourage the construction of the storage capacity 
        in the area needing storage services; and
            ``(B) customers are adequately protected.

    ``(2) The Commission shall ensure that reasonable terms and 
conditions are in place to protect consumers.
    ``(3) If the Commission authorizes a natural gas company to charge 
market-based rates under this subsection, the Commission shall review 
periodically whether the market-based rate is just, reasonable, and not 
unduly discriminatory or preferential.''.

SEC. 313. PROCESS COORDINATION; HEARINGS; RULES OF PROCEDURE.

    (a) In General.--Section 15 of the Natural Gas Act (15 U.S.C. 717n) 
is amended--
            (1) by striking the section heading and inserting ``process 
        coordination; hearings; rules of procedure'';
            (2) by redesignating subsections (a) and (b) as subsections 
        (e) and (f), respectively; and
            (3) by striking ``sec. 15.'' and inserting the following:

    ``Sec. 15.(a) In this section, the term `Federal authorization'--
            ``(1) means any authorization required under Federal law 
        with respect to an application for authorization under section

[[Page 119 STAT. 689]]

        3 or a certificate of public convenience and necessity under 
        section 7; and
            ``(2) includes any permits, special use authorizations, 
        certifications, opinions, or other approvals as may be required 
        under Federal law with respect to an application for 
        authorization under section 3 or a certificate of public 
        convenience and necessity under section 7.

    ``(b) Designation as Lead Agency.--
            ``(1) In general.--The Commission shall act as the lead 
        agency for the purposes of coordinating all applicable Federal 
        authorizations and for the purposes of complying with the 
        National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
        seq.).
            ``(2) Other agencies.--Each Federal and State agency 
        considering an aspect of an application for Federal 
        authorization shall cooperate with the Commission and comply 
        with the deadlines established by the Commission.

    ``(c) Schedule.--
            ``(1) Commission authority to set schedule.--The Commission 
        shall establish a schedule for all Federal authorizations. In 
        establishing the schedule, the Commission shall--
                    ``(A) ensure expeditious completion of all such 
                proceedings; and
                    ``(B) comply with applicable schedules established 
                by Federal law.
            ``(2) Failure to meet schedule.--If a Federal or State 
        administrative agency does not complete a proceeding for an 
        approval that is required for a Federal authorization in 
        accordance with the schedule established by the Commission, the 
        applicant may pursue remedies under section 19(d).

    ``(d) Consolidated Record.--The Commission shall, with the 
cooperation of Federal and State administrative agencies and officials, 
maintain a complete consolidated record of all decisions made or actions 
taken by the Commission or by a Federal administrative agency or officer 
(or State administrative agency or officer acting under delegated 
Federal authority) with respect to any Federal authorization. Such 
record shall be the record for--
            ``(1) appeals or reviews under the Coastal Zone Management 
        Act of 1972 (16 U.S.C. 1451 et seq.), provided that the record 
        may be supplemented as expressly provided pursuant to section 
        319 of that Act; or
            ``(2) judicial review under section 19(d) of decisions made 
        or actions taken of Federal and State administrative agencies 
        and officials, provided that, if the Court determines that the 
        record does not contain sufficient information, the Court may 
        remand the proceeding to the Commission for further development 
        of the consolidated record.''.

    (b) Judicial Review.--Section 19 of the Natural Gas Act (15 U.S.C. 
717r) is amended by adding at the end the following:
    ``(d) Judicial Review.--
            ``(1) In general.--The United States Court of Appeals for 
        the circuit in which a facility subject to section 3 or section 
        7 is proposed to be constructed, expanded, or operated shall 
        have original and exclusive jurisdiction over any civil action 
        for the review of an order or action of a Federal agency (other 
        than the Commission) or State administrative agency acting 
        pursuant to Federal law to issue, condition, or deny any permit,

[[Page 119 STAT. 690]]

        license, concurrence, or approval (hereinafter collectively 
        referred to as `permit') required under Federal law, other than 
        the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et 
        seq.).
            ``(2) Agency delay.--The United States Court of Appeals for 
        the District of Columbia shall have original and exclusive 
        jurisdiction over any civil action for the review of an alleged 
        failure to act by a Federal agency (other than the Commission) 
        or State administrative agency acting pursuant to Federal law to 
        issue, condition, or deny any permit required under Federal law, 
        other than the Coastal Zone Management Act of 1972 (16 U.S.C. 
        1451 et seq.), for a facility subject to section 3 or section 7. 
        The failure of an agency to take action on a permit required 
        under Federal law, other than the Coastal Zone Management Act of 
        1972, in accordance with the Commission schedule established 
        pursuant to section 15(c) shall be considered inconsistent with 
        Federal law for the purposes of paragraph (3).
            ``(3) Court action.--If the Court finds that such order or 
        action is inconsistent with the Federal law governing such 
        permit and would prevent the construction, expansion, or 
        operation of the facility subject to section 3 or section 7, the 
        Court shall remand the proceeding to the agency to take 
        appropriate action consistent with the order of the Court. If 
        the Court remands the order or action to the Federal or State 
        agency, the Court shall set a reasonable schedule and deadline 
        for the agency to act on remand.
            ``(4) Commission action.--For any action described in this 
        subsection, the Commission shall file with the Court the 
        consolidated record of such order or action to which the appeal 
        hereunder relates.
            ``(5) Expedited review.--The Court shall set any action 
        brought under this subsection for expedited consideration.''.

SEC. 314. PENALTIES.

    (a) Criminal Penalties.--
            (1) Natural gas act.--Section 21 of the Natural Gas Act (15 
        U.S.C. 717t) is amended--
                    (A) in subsection (a)--
                          (i) by striking ``$5,000'' and inserting 
                      ``$1,000,000''; and
                          (ii) by striking ``two years'' and inserting 
                      ``5 years''; and
                    (B) in subsection (b), by striking ``$500'' and 
                inserting ``$50,000''.
            (2) Natural gas policy act of 1978.--Section 504(c) of the 
        Natural Gas Policy Act of 1978 (15 U.S.C. 3414(c)) is amended--
                    (A) in paragraph (1)--
                          (i) in subparagraph (A), by striking 
                      ``$5,000'' and inserting ``$1,000,000''; and
                          (ii) in subparagraph (B), by striking ``two 
                      years'' and inserting ``5 years''; and
                    (B) in paragraph (2), by striking ``$500 for each 
                violation'' and inserting ``$50,000 for each day on 
                which the offense occurs''.

    (b) Civil Penalties.--

[[Page 119 STAT. 691]]

            (1) Natural gas act.--The Natural Gas Act (15 U.S.C. 717 et 
        seq.) is amended--
                    (A) <<NOTE: 15 USC 717u-717w.>> by redesignating 
                sections 22 through 24 as sections 24 through 26, 
                respectively; and
                    (B) by inserting after section 21 (15 U.S.C. 717t) 
                the following:


                        ``civil penalty authority


    ``Sec. 22. (a) <<NOTE: 15 USC 717t-1.>> Any person that violates 
this Act, or any rule, regulation, restriction, condition, or order made 
or imposed by the Commission under authority of this Act, shall be 
subject to a civil penalty of not more than $1,000,000 per day per 
violation for as long as the violation continues.

    ``(b) The penalty shall be assessed by the Commission after notice 
and opportunity for public hearing.
    ``(c) In determining the amount of a proposed penalty, the 
Commission shall take into consideration the nature and seriousness of 
the violation and the efforts to remedy the violation.''.
            (2) Natural gas policy act of 1978.--Section 504(b)(6)(A) of 
        the Natural Gas Policy Act of 1978 (15 U.S.C. 3414(b)(6)(A)) is 
        amended--
                    (A) in clause (i), by striking ``$5,000'' and 
                inserting ``$1,000,000''; and
                    (B) in clause (ii), by striking ``$25,000'' and 
                inserting ``$1,000,000''.

SEC. 315. MARKET MANIPULATION.

    The Natural Gas Act is amended by inserting after section 4 (15 
U.S.C. 717c) the following:


                  ``prohibition on market manipulation


    ``Sec. 4A. <<NOTE: 15 USC 717c-1.>> It shall be unlawful for any 
entity, directly or indirectly, to use or employ, in connection with the 
purchase or sale of natural gas or the purchase or sale of 
transportation services subject to the jurisdiction of the Commission, 
any manipulative or deceptive device or contrivance (as those terms are 
used in section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. 
78j(b))) in contravention of such rules and regulations as the 
Commission may prescribe as necessary in the public interest or for the 
protection of natural gas ratepayers. Nothing in this section shall be 
construed to create a private right of action.''.

SEC. 316. NATURAL GAS MARKET TRANSPARENCY RULES.

    The Natural Gas Act (15 U.S.C. 717 et seq.) is amended by inserting 
after section 22 the following:


                 ``natural gas market transparency rules


    ``Sec. 23. (a)(1) <<NOTE: 15 USC 717t-2.>> The Commission is 
directed to facilitate price transparency in markets for the sale or 
transportation of physical natural gas in interstate commerce, having 
due regard for the public interest, the integrity of those markets, fair 
competition, and the protection of consumers.

    ``(2) The Commission may prescribe such rules as the Commission 
determines necessary and appropriate to carry out the purposes of this 
section. The rules shall provide for the dissemination, on a timely 
basis, of information about the availability and prices

[[Page 119 STAT. 692]]

of natural gas sold at wholesale and in interstate commerce to the 
Commission, State commissions, buyers and sellers of wholesale natural 
gas, and the public.
    ``(3) The Commission may--
            ``(A) obtain the information described in paragraph (2) from 
        any market participant; and
            ``(B) rely on entities other than the Commission to receive 
        and make public the information, subject to the disclosure rules 
        in subsection (b).

    ``(4) In carrying out this section, the Commission shall consider 
the degree of price transparency provided by existing price publishers 
and providers of trade processing services, and shall rely on such 
publishers and services to the maximum extent possible. The Commission 
may establish an electronic information system if it determines that 
existing price publications are not adequately providing price discovery 
or market transparency.
    ``(b)(1) Rules described in subsection (a)(2), if adopted, shall 
exempt from disclosure information the Commission determines would, if 
disclosed, be detrimental to the operation of an effective market or 
jeopardize system security.
    ``(2) In determining the information to be made available under this 
section and the time to make the information available, the Commission 
shall seek to ensure that consumers and competitive markets are 
protected from the adverse effects of potential collusion or other 
anticompetitive behaviors that can be facilitated by untimely public 
disclosure of transaction-specific information.
    ``(c)(1) <<NOTE: Deadline. Memorandum.>> Within 180 days of 
enactment of this section, the Commission shall conclude a memorandum of 
understanding with the Commodity Futures Trading Commission relating to 
information sharing, which shall include, among other things, provisions 
ensuring that information requests to markets within the respective 
jurisdiction of each agency are properly coordinated to minimize 
duplicative information requests, and provisions regarding the treatment 
of proprietary trading information.

    ``(2) Nothing in this section may be construed to limit or affect 
the exclusive jurisdiction of the Commodity Futures Trading Commission 
under the Commodity Exchange Act (7 U.S.C. 1 et seq.).
    ``(d)(1) The Commission shall not condition access to interstate 
pipeline transportation on the reporting requirements of this section.
    ``(2) The Commission shall not require natural gas producers, 
processors, or users who have a de minimis market presence to comply 
with the reporting requirements of this section.
    ``(e)(1) Except as provided in paragraph (2), no person shall be 
subject to any civil penalty under this section with respect to any 
violation occurring more than 3 years before the date on which the 
person is provided notice of the proposed penalty under section 22(b).
    ``(2) Paragraph (1) shall not apply in any case in which the 
Commission finds that a seller that has entered into a contract for the 
transportation or sale of natural gas subject to the jurisdiction of the 
Commission has engaged in fraudulent market manipulation activities 
materially affecting the contract in violation of section 4A.''.

[[Page 119 STAT. 693]]

SEC. 317. FEDERAL-STATE LIQUEFIED NATURAL GAS FORUMS.

    (a) In General.--Not <<NOTE: Deadline.>> later than 1 year after the 
date of enactment of this Act, the Secretary, in cooperation and 
consultation with the Secretary of Transportation, the Secretary of 
Homeland Security, the Federal Energy Regulatory Commission, and the 
Governors of the Coastal States, shall convene not less than 3 forums on 
liquefied natural gas.

    (b) Requirements.--The forums shall--
            (1) be located in areas where liquefied natural gas 
        facilities are under consideration;
            (2) be designed to foster dialogue among Federal officials, 
        State and local officials, the general public, independent 
        experts, and industry representatives; and
            (3) at a minimum, provide an opportunity for public 
        education and dialogue on--
                    (A) the role of liquefied natural gas in meeting 
                current and future United States energy supply 
                requirements and demand, in the context of the full 
                range of energy supply options;
                    (B) the Federal and State siting and permitting 
                processes;
                    (C) the potential risks and rewards associated with 
                importing liquefied natural gas;
                    (D) the Federal safety and environmental 
                requirements (including regulations) applicable to 
                liquefied natural gas;
                    (E) prevention, mitigation, and response strategies 
                for liquefied natural gas hazards; and
                    (F) additional issues as appropriate.

    (c) Purpose.--The purpose of the forums shall be to identify and 
develop best practices for addressing the issues and challenges 
associated with liquefied natural gas imports, building on existing 
cooperative efforts.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 318. PROHIBITION OF TRADING AND SERVING BY CERTAIN INDIVIDUALS.

    Section 20 of the Natural Gas Act (15 U.S.C. 717s) is amended by 
adding at the end the following:
    ``(d) In any proceedings under subsection (a), the court may 
prohibit, conditionally or unconditionally, and permanently or for such 
period of time as the court determines, any individual who is engaged or 
has engaged in practices constituting a violation of section 4A 
(including related rules and regulations) from--
            ``(1) acting as an officer or director of a natural gas 
        company; or
            ``(2) engaging in the business of--
                    ``(A) the purchasing or selling of natural gas; or
                    ``(B) the purchasing or selling of transmission 
                services subject to the jurisdiction of the 
                Commission.''.

[[Page 119 STAT. 694]]

                         Subtitle C--Production

SEC. 321. OUTER CONTINENTAL SHELF PROVISIONS.

    (a) Storage on the Outer Continental Shelf.--Section 5(a)(5) of the 
Outer Continental Shelf Lands Act (43 U.S.C. 1334(a)(5)) is amended by 
inserting ``from any source'' after ``oil and gas''.
    (b) Natural Gas Defined.--Section 3(13) of the Deepwater Port Act of 
1974 (33 U.S.C. 1502(13)) is amended by adding at the end before the 
semicolon the following: ``, natural gas liquids, liquefied petroleum 
gas, and condensate recovered from natural gas''.

SEC. 322. HYDRAULIC FRACTURING.

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

SEC. 323. OIL AND GAS EXPLORATION AND PRODUCTION DEFINED.

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

                   Subtitle D--Naval Petroleum Reserve

SEC. 331. <<NOTE: 10 USC 7420 note.>> TRANSFER OF ADMINISTRATIVE 
            JURISDICTION AND ENVIRONMENTAL REMEDIATION, NAVAL PETROLEUM 
            RESERVE NUMBERED 2, KERN COUNTY, CALIFORNIA.

    (a) Administration <<NOTE: Effective date.>> Jurisdiction Transfer 
to Secretary of the Interior.--Effective on the date of the enactment of 
this Act, administrative jurisdiction and control over all public domain 
lands included within Naval Petroleum Reserve Numbered 2 located in Kern 
County, California (other than the lands specified in subsection (b)), 
are transferred from the Secretary to the Secretary of the Interior for 
management, subject to subsection (c), in accordance with the laws 
governing management of the public lands, and the regulations 
promulgated under such laws, including the

[[Page 119 STAT. 695]]

Mineral Leasing Act (30 U.S.C. 181 et seq.) and the Federal Land Policy 
and Management Act of 1976 (43 U.S.C. 1701 et seq.).
    (b) Exclusion of Certain Reserve Lands.--The transfer of 
administrative jurisdiction made by subsection (a) does not include the 
following lands:
            (1) That portion of Naval Petroleum Reserve Numbered 2 
        authorized for disposal under section 3403(a) of the Strom 
        Thurmond National Defense Authorization Act for Fiscal Year 1999 
        (Public Law 105-261; 10 U.S.C. 7420 note).
            (2) That portion of the surface estate of Naval Petroleum 
        Reserve Numbered 2 conveyed to the City of Taft, California, by 
        section 333.

    (c) Purpose of Transfer.--
            (1) Production of hydrocarbon resources.--Notwithstanding 
        any other provision of law, the principal purpose of the lands 
        subject to transfer under subsection (a) is the production of 
        hydrocarbon resources, and the Secretary of the Interior shall 
        manage the lands in a fashion consistent with this purpose. In 
        managing the lands, the Secretary of the Interior shall regulate 
        operations to prevent unnecessary degradation and to provide for 
        ultimate economic recovery of the resources.
            (2) Disposal authority and surface use.--The Secretary of 
        the Interior may make disposals of lands subject to transfer 
        under subsection (a), or allow commercial or non-profit surface 
        use of such lands, not to exceed 10 acres each, so long as the 
        disposals or surface uses do not materially interfere with the 
        ultimate economic recovery of the hydrocarbon resources of such 
        lands. All revenues received from the disposal of lands under 
        this paragraph or from allowing the surface use of such lands 
        shall be deposited in the Naval Petroleum Reserve Numbered 2 
        Lease Revenue Account established by section 332.

    (d) Conforming Amendment.--Section 3403 of the Strom Thurmond 
National Defense Authorization Act for Fiscal Year 1999 (Public Law 105-
261; 10 U.S.C. 7420 note) is amended by striking subsection (b).

SEC. 332. <<NOTE: 10 USC 7420 note.>> NAVAL PETROLEUM RESERVE NUMBERED 2 
            LEASE REVENUE ACCOUNT.

    (a) Establishment.--There is established in the Treasury a special 
deposit account to be known as the ``Naval Petroleum Reserve Numbered 2 
Lease Revenue Account'' (in this section referred to as the ``lease 
revenue account''). The lease revenue account is a revolving account, 
and amounts in the lease revenue account shall be available to the 
Secretary of the Interior, without further appropriation, for the 
purposes specified in subsection (b).
    (b) Purposes of Account.--
            (1) Environmental-related costs.--The lease revenue account 
        shall be the sole and exclusive source of funds to pay for any 
        and all costs and expenses incurred by the United States for--
                    (A) environmental investigations (other than any 
                environmental investigations that were conducted by the 
                Secretary before the transfer of the Naval Petroleum 
                Reserve Numbered 2 lands under section 331), 
                remediation, compliance actions, response, waste 
                management, impediments, fines or penalties, or any 
                other costs or expenses

[[Page 119 STAT. 696]]

                of any kind arising from, or relating to, conditions 
                existing on or below the Naval Petroleum Reserve 
                Numbered 2 lands, or activities occurring or having 
                occurred on such lands, on or before the date of the 
                transfer of such lands; and
                    (B) any future remediation necessitated as a result 
                of pre-transfer and leasing activities on such lands.
            (2) Transition costs.--The lease revenue account shall also 
        be available for use by the Secretary of the Interior to pay for 
        transition costs incurred by the Department of the Interior 
        associated with the transfer and leasing of the Naval Petroleum 
        Reserve Numbered 2 lands.

    (c) Funding.--The lease revenue account shall consist of the 
following:
            (1) Notwithstanding any other provision of law, for a period 
        of three years after the date of the transfer of the Naval 
        Petroleum Reserve Numbered 2 lands under section 331, the sum of 
        $500,000 per year of revenue from leases entered into before 
        that date, including bonuses, rents, royalties, and interest 
        charges collected pursuant to the Federal Oil and Gas Royalty 
        Management Act of 1982 (30 U.S.C. 1701 et. seq.), derived from 
        the Naval Petroleum Reserve Numbered 2 lands, shall be deposited 
        into the lease revenue account.
            (2) Subject to subsection (d), all revenues derived from 
        leases on Naval Petroleum Reserve Numbered 2 lands issued on or 
        after the date of the transfer of such lands, including bonuses, 
        rents, royalties, and interest charges collected pursuant to the 
        Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 
        1701 et seq.), shall be deposited into the lease revenue 
        account.

    (d) Limitation.--Funds in the lease revenue account shall not exceed 
$3,000,000 at any one time. Whenever funds in the lease revenue account 
are obligated or expended so that the balance in the account falls below 
that amount, lease revenues referred to in subsection (c)(2) shall be 
deposited in the account to maintain a balance of $3,000,000.
    (e) Termination of Account.--At <<NOTE: Certification.>> such time 
as the Secretary of the Interior certifies that remediation of all 
environmental contamination of Naval Petroleum Reserve Numbered 2 lands 
in existence as of the date of the transfer of such lands under section 
331 has been successfully completed, that all costs and expenses of 
investigation, remediation, compliance actions, response, waste 
management, impediments, fines, or penalties associated with 
environmental contamination of such lands in existence as of the date of 
the transfer have been paid in full, and that the transition costs of 
the Department of the Interior referred to in subsection (b)(2) have 
been paid in full, the lease revenue account shall be terminated and any 
remaining funds shall be distributed in accordance with subsection (f).

    (f) Distribution of <<NOTE: Applicability.>> Remaining Funds.--
Section 35 of the Mineral Leasing Act (30 U.S.C. 191) shall apply to the 
payment and distribution of all funds remaining in the lease revenue 
account upon its termination under subsection (e).

[[Page 119 STAT. 697]]

SEC. 333. <<NOTE: 10 USC 7420 note.>> LAND CONVEYANCE, PORTION OF NAVAL 
            PETROLEUM RESERVE NUMBERED 2, TO CITY OF TAFT, CALIFORNIA.

    (a) Conveyance.--Effective <<NOTE: Effective date.>> on the date of 
the enactment of this Act, there is conveyed to the City of Taft, 
California (in this section referred to as the ``City''), all surface 
right, title, and interest of the United States in and to a parcel of 
real property consisting of approximately 220 acres located in the NE\1/
4\, the NE\1/4\ of the NW\1/4\, and the N\1/2\ of the SE\1/4\ of the 
NW\1/4\ of section 18, township 32 south, range 24 east, Mount Diablo 
meridian, Kern County, California.

    (b) Consideration.--The conveyance under subsection (a) is made 
without the payment of consideration by the City.
    (c) Treatment of Existing Rights.--The conveyance under subsection 
(a) is subject to valid existing rights, including Federal oil and gas 
lease SAC-019577.
    (d) Treatment of Minerals.--All coal, oil, gas, and other minerals 
within the lands conveyed under subsection (a) are reserved to the 
United States, except that the United States and its lessees, licensees, 
permittees, or assignees shall have no right of surface use or occupancy 
of the lands. Nothing in this subsection shall be construed to require 
the United States or its lessees, licensees, permittees, or assignees to 
support the surface of the conveyed lands.
    (e) Indemnify and Hold Harmless.--The City shall indemnify, defend, 
and hold harmless the United States for, from, and against, and the City 
shall assume all responsibility for, any and all liability of any kind 
or nature, including all loss, cost, expense, or damage, arising from 
the City's use or occupancy of, or operations on, the land conveyed 
under subsection (a), whether such use or occupancy of, or operations 
on, occurred before or occur after the date of the enactment of this 
Act.
    (f) Instrument of Conveyance.--
Not <<NOTE: Deadline. Records.>> later than 1 year after the date of the 
enactment of this Act, the Secretary shall execute, file, and cause to 
be recorded in the appropriate office a deed or other appropriate 
instrument documenting the conveyance made by this section.

SEC. 334. <<NOTE: Effective date. 10 USC 7420 note.>> REVOCATION OF LAND 
            WITHDRAWAL.

    Effective on the date of the enactment of this Act, the Executive 
Order of December 13, 1912, which created Naval Petroleum Reserve 
Numbered 2, is revoked in its entirety.

                    Subtitle E--Production Incentives

SEC. 341. <<NOTE: 42 USC 15901.>> DEFINITION OF SECRETARY.

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

SEC. 342. <<NOTE: 42 USC 15902.>> PROGRAM ON OIL AND GAS ROYALTIES IN-
            KIND.

    (a) Applicability of Section.--Notwithstanding any other provision 
of law, this section applies to all royalty in-kind accepted by the 
Secretary on or after the date of enactment of this Act under any 
Federal oil or gas lease or permit under--
            (1) section 36 of the Mineral Leasing Act (30 U.S.C. 192);
            (2) section 27 of the Outer Continental Shelf Lands Act (43 
        U.S.C. 1353); or

[[Page 119 STAT. 698]]

            (3) any other Federal law governing leasing of Federal land 
        for oil and gas development.

    (b) Terms and Conditions.--All royalty accruing to the United States 
shall, on the demand of the Secretary, be paid in-kind. If the Secretary 
makes such a demand, the following provisions apply to the payment:
            (1) Satisfaction of royalty obligation.--Delivery by, or on 
        behalf of, the lessee of the royalty amount and quality due 
        under the lease satisfies royalty obligation of the lessee for 
        the amount delivered, except that transportation and processing 
        reimbursements paid to, or deductions claimed by, the lessee 
        shall be subject to review and audit.
            (2) Marketable condition.--
                    (A) Definition of marketable condition.--In this 
                paragraph, the term ``in marketable condition'' means 
                sufficiently free from impurities and otherwise in a 
                condition that the royalty production will be accepted 
                by a purchaser under a sales contract typical of the 
                field or area in which the royalty production was 
                produced.
                    (B) Requirement.--Royalty production shall be placed 
                in marketable condition by the lessee at no cost to the 
                United States.
            (3) Disposition by the secretary.--The Secretary may--
                    (A) sell or otherwise dispose of any royalty 
                production taken in-kind (other than oil or gas 
                transferred under section 27(a)(3) of the Outer 
                Continental Shelf Lands Act (43 U.S.C. 1353(a)(3)) for 
                not less than the market price; and
                    (B) transport or process (or both) any royalty 
                production taken in-kind.
            (4) Retention by the secretary.--The Secretary may, 
        notwithstanding section 3302 of title 31, United States Code, 
        retain and use a portion of the revenues from the sale of oil 
        and gas taken in-kind that otherwise would be deposited to 
        miscellaneous receipts, without regard to fiscal year 
        limitation, or may use oil or gas received as royalty taken in-
        kind (referred to in this paragraph as ``royalty production'') 
        to pay the cost of--
                    (A) transporting the royalty production;
                    (B) processing the royalty production;
                    (C) disposing of the royalty production; or
                    (D) any combination of transporting, processing, and 
                disposing of the royalty production.
            (5) Limitation.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the Secretary may not use revenues from the sale of 
                oil and gas taken in-kind to pay for personnel, travel, 
                or other administrative costs of the Federal Government.
                    (B) Exception.--Notwithstanding subparagraph (A), 
                the Secretary may use a portion of the revenues from 
                royalty in-kind sales, without fiscal year limitation, 
                to pay salaries and other administrative costs directly 
                related to the royalty in-kind program.

    (c) Reimbursement of Cost.--If the lessee, pursuant to an agreement 
with the United States or as provided in the lease, processes the 
royalty gas or delivers the royalty oil or gas at a point not on or 
adjacent to the lease area, the Secretary shall--

[[Page 119 STAT. 699]]

            (1) reimburse the lessee for the reasonable costs of 
        transportation (not including gathering) from the lease to the 
        point of delivery or for processing costs; or
            (2) allow the lessee to deduct the transportation or 
        processing costs in reporting and paying royalties in-value for 
        other Federal oil and gas leases.

    (d) Benefit to the United States Required.--The Secretary may 
receive oil or gas royalties in-kind only if the Secretary determines 
that receiving royalties in-kind provides benefits to the United States 
that are greater than or equal to the benefits that are likely to have 
been received had royalties been taken in-value.
    (e) Reports.--
            (1) In general.--Not later than September 30, 2006, the 
        Secretary shall submit to Congress a report that addresses--
                    (A) actions taken to develop business processes and 
                automated systems to fully support the royalty-in-kind 
                capability to be used in tandem with the royalty-in-
                value approach in managing Federal oil and gas revenue; 
                and
                    (B) future royalty-in-kind businesses operation 
                plans and objectives.
            (2) Reports on oil or gas royalties taken in-kind.--For each 
        of fiscal years 2006 through 2015 in which the United States 
        takes oil or gas royalties in-kind from production in any State 
        or from the outer Continental Shelf, excluding royalties taken 
        in-kind and sold to refineries under subsection (h), the 
        Secretary shall submit to Congress a report that describes--
                    (A) the 1 or more methodologies used by the 
                Secretary to determine compliance with subsection (d), 
                including the performance standard for comparing amounts 
                received by the United States derived from royalties in-
                kind to amounts likely to have been received had 
                royalties been taken in-value;
                    (B) an explanation of the evaluation that led the 
                Secretary to take royalties in-kind from a lease or 
                group of leases, including the expected revenue effect 
                of taking royalties in-kind;
                    (C) actual amounts received by the United States 
                derived from taking royalties in-kind and costs and 
                savings incurred by the United States associated with 
                taking royalties in-kind, including administrative 
                savings and any new or increased administrative costs; 
                and
                    (D) an evaluation of other relevant public benefits 
                or detriments associated with taking royalties in-kind.

    (f) Deduction of Expenses.--
            (1) In general.--Before making payments under section 35 of 
        the Mineral Leasing Act (30 U.S.C. 191) or section 8(g) of the 
        Outer Continental Shelf Lands Act (43 U.S.C. 1337(g)) of 
        revenues derived from the sale of royalty production taken in-
        kind from a lease, the Secretary shall deduct amounts paid or 
        deducted under subsections (b)(4) and (c) and deposit the amount 
        of the deductions in the miscellaneous receipts of the Treasury.
            (2) Accounting for deductions.--When the Secretary allows 
        the lessee to deduct transportation or processing costs under 
        subsection (c), the Secretary may not reduce any payments to 
        recipients of revenues derived from any other Federal oil and 
        gas lease as a consequence of that deduction.

[[Page 119 STAT. 700]]

    (g) Consultation With States.--The Secretary--
            (1) shall consult with a State before conducting a royalty 
        in-kind program under this subtitle within the State;
            (2) may delegate management of any portion of the Federal 
        royalty in-kind program to the State except as otherwise 
        prohibited by Federal law; and
            (3) shall consult annually with any State from which Federal 
        oil or gas royalty is being taken in-kind to ensure, to the 
        maximum extent practicable, that the royalty in-kind program 
        provides revenues to the State greater than or equal to the 
        revenues likely to have been received had royalties been taken 
        in-value.

    (h) Small Refineries.--
            (1) Preference.--If the Secretary finds that sufficient 
        supplies of crude oil are not available in the open market to 
        refineries that do not have their own source of supply for crude 
        oil, the Secretary may grant preference to those refineries in 
        the sale of any royalty oil accruing or reserved to the United 
        States under Federal oil and gas leases issued under any mineral 
        leasing law, for processing or use in those refineries at 
        private sale at not less than the market price.
            (2) Proration among refineries in production area.--In 
        disposing of oil under this subsection, the Secretary may, at 
        the discretion of the Secretary, prorate the oil among 
        refineries described in paragraph (1) in the area in which the 
        oil is produced.

    (i) Disposition to Federal Agencies.--
            (1) Onshore royalty.--Any royalty oil or gas taken by the 
        Secretary in-kind from onshore oil and gas leases may be sold at 
        not less than the market price to any Federal agency.
            (2) Offshore royalty.--Any royalty oil or gas taken in-kind 
        from a Federal oil or gas lease on the outer Continental Shelf 
        may be disposed of only under section 27 of the Outer 
        Continental Shelf Lands Act (43 U.S.C. 1353).

    (j) Federal Low-Income Energy Assistance Programs.--
            (1) Preference.--In disposing of royalty oil or gas taken 
        in-kind under this section, the Secretary may grant a preference 
        to any person, including any Federal or State agency, for the 
        purpose of providing additional resources to any Federal low-
        income energy assistance program.
            (2) Report.--Not later than 3 years after the date of 
        enactment of this Act, the Secretary shall submit a report to 
        Congress--
                    (A) assessing the effectiveness of granting 
                preferences specified in paragraph (1); and
                    (B) providing a specific recommendation on the 
                continuation of authority to grant preferences.

SEC. 343. <<NOTE: 42 USC 15903.>> MARGINAL PROPERTY PRODUCTION 
            INCENTIVES.

    (a) Definition of Marginal Property.--Until such time as the 
Secretary issues regulations under subsection (e) that prescribe a 
different definition, in this section, the term ``marginal property'' 
means an onshore unit, communitization agreement, or lease not within a 
unit or communitization agreement, that produces on average the combined 
equivalent of less than 15 barrels of oil per well per day or 90,000,000 
British thermal units of gas per

[[Page 119 STAT. 701]]

well per day calculated based on the average over the 3 most recent 
production months, including only wells that produce on more than half 
of the days during those 3 production months.
    (b) Conditions for Reduction of Royalty Rate.--Until such time as 
the Secretary issues regulations under subsection (e) that prescribe 
different standards or requirements, the Secretary shall reduce the 
royalty rate on--
            (1) oil production from marginal properties as prescribed in 
        subsection (c) if the spot price of West Texas Intermediate 
        crude oil at Cushing, Oklahoma, is, on average, less than $15 
        per barrel (adjusted in accordance with the Consumer Price Index 
        for all-urban consumers, United States city average, as 
        published by the Bureau of Labor Statistics) for 90 consecutive 
        trading days; and
            (2) gas production from marginal properties as prescribed in 
        subsection (c) if the spot price of natural gas delivered at 
        Henry Hub, Louisiana, is, on average, less than $2.00 per 
        million British thermal units (adjusted in accordance with the 
        Consumer Price Index for all-urban consumers, United States city 
        average, as published by the Bureau of Labor Statistics) for 90 
        consecutive trading days.

    (c) Reduced Royalty Rate.--
            (1) In general.--When a marginal property meets the 
        conditions specified in subsection (b), the royalty rate shall 
        be the lesser of--
                    (A) 5 percent; or
                    (B) the applicable rate under any other statutory or 
                regulatory royalty relief provision that applies to the 
                affected production.
            (2) Period of effectiveness.--The reduced royalty rate under 
        this subsection shall be effective beginning on the first day of 
        the production month following the date on which the applicable 
        condition specified in subsection (b) is met.

    (d) Termination of Reduced Royalty Rate.--A royalty rate prescribed 
in subsection (c)(1) shall terminate--
            (1) with respect to oil production from a marginal property, 
        on the first day of the production month following the date on 
        which--
                    (A) the spot price of West Texas Intermediate crude 
                oil at Cushing, Oklahoma, on average, exceeds $15 per 
                barrel (adjusted in accordance with the Consumer Price 
                Index for all-urban consumers, United States city 
                average, as published by the Bureau of Labor Statistics) 
                for 90 consecutive trading days; or
                    (B) the property no longer qualifies as a marginal 
                property; and
            (2) with respect to gas production from a marginal property, 
        on the first day of the production month following the date on 
        which--
                    (A) the spot price of natural gas delivered at Henry 
                Hub, Louisiana, on average, exceeds $2.00 per million 
                British thermal units (adjusted in accordance with the 
                Consumer Price Index for all-urban consumers, United 
                States city average, as published by the Bureau of Labor 
                Statistics) for 90 consecutive trading days; or
                    (B) the property no longer qualifies as a marginal 
                property.

[[Page 119 STAT. 702]]

    (e) Regulations Prescribing Different Relief.--
            (1) Discretionary regulations.--The Secretary may by 
        regulation prescribe different parameters, standards, and 
        requirements for, and a different degree or extent of, royalty 
        relief for marginal properties in lieu of those prescribed in 
        subsections (a) through (d).
            (2) Mandatory regulations.--Unless 
        a <<NOTE: Deadline.>> determination is made under paragraph (3), 
        not later than 18 months after the date of enactment of this 
        Act, the Secretary shall by regulation--
                    (A) prescribe standards and requirements for, and 
                the extent of royalty relief for, marginal properties 
                for oil and gas leases on the outer Continental Shelf; 
                and
                    (B) define what constitutes a marginal property on 
                the outer Continental Shelf for purposes of this 
                section.
            (3) Report.--To the extent the Secretary determines that it 
        is not practicable to issue the regulations referred to in 
        paragraph (2), the Secretary shall provide a report to Congress 
        explaining such determination by not later than 18 months after 
        the date of enactment of this Act.
            (4) Considerations.--In issuing regulations under this 
        subsection, the Secretary may consider--
                    (A) oil and gas prices and market trends;
                    (B) production costs;
                    (C) abandonment costs;
                    (D) Federal and State tax provisions and the effects 
                of those provisions on production economics;
                    (E) other royalty relief programs;
                    (F) regional differences in average wellhead prices;
                    (G) national energy security issues; and
                    (H) other relevant matters, as determined by the 
                Secretary.

    (f) Savings Provision.--Nothing in this section prevents a lessee 
from receiving royalty relief or a royalty reduction pursuant to any 
other law (including a regulation) that provides more relief than the 
amounts provided by this section.

SEC. 344. <<NOTE: 42 USC 15904.>> INCENTIVES FOR NATURAL GAS PRODUCTION 
            FROM DEEP WELLS IN THE SHALLOW WATERS OF THE GULF OF MEXICO.

    (a) Royalty Incentive Regulations for Ultra Deep Gas Wells.--
            (1) In general.--Not <<NOTE: Deadline.>> later than 180 days 
        after the date of enactment of this Act, in addition to any 
        other regulations that may provide royalty incentives for 
        natural gas produced from deep wells on oil and gas leases 
        issued pursuant to the Outer Continental Shelf Lands Act (43 
        U.S.C. 1331 et seq.), the Secretary shall issue regulations 
        granting royalty relief suspension volumes of not less than 35 
        billion cubic feet with respect to the production of natural gas 
        from ultra deep wells on leases issued in shallow waters less 
        than 400 meters deep located in the Gulf of Mexico wholly west 
        of 87 degrees, 30 minutes west longitude. <<NOTE: Effective 
        date. Notices. Federal Register, publication.>> Regulations 
        issued under this subsection shall be retroactive to the date 
        that the notice of proposed rulemaking is published in the 
        Federal Register.

[[Page 119 STAT. 703]]

            (2) Suspension volumes.--The Secretary may grant suspension 
        volumes of not less than 35 billion cubic feet in any case in 
        which--
                    (A) the ultra deep well is a sidetrack; or
                    (B) the lease has previously produced from wells 
                with a perforated interval the top of which is at least 
                15,000 feet true vertical depth below the datum at mean 
                sea level.
            (3) Definitions.--In this subsection:
                    (A) Ultra deep well.--The term ``ultra deep well'' 
                means a well drilled with a perforated interval, the top 
                of which is at least 20,000 true vertical depth below 
                the datum at mean sea level.
                    (B) Sidetrack.--
                          (i) In general.--The term ``sidetrack'' means 
                      a well resulting from drilling an additional hole 
                      to a new objective bottom-hole location by leaving 
                      a previously drilled hole.
                          (ii) Inclusion.--The term ``sidetrack'' 
                      includes--
                                    (I) drilling a well from a platform 
                                slot reclaimed from a previously drilled 
                                well;
                                    (II) re-entering and deepening a 
                                previously drilled well; and
                                    (III) a bypass from a sidetrack, 
                                including drilling around material 
                                blocking a hole or drilling to 
                                straighten a crooked hole.

    (b) Royalty <<NOTE: Deadline.>> Incentive Regulations for Deep Gas 
Wells.--Not later than 180 days after the date of enactment of this Act, 
in addition to any other regulations that may provide royalty incentives 
for natural gas produced from deep wells on oil and gas leases issued 
pursuant to the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et 
seq.), the Secretary shall issue regulations granting royalty relief 
suspension volumes with respect to production of natural gas from deep 
wells on leases issued in waters more than 200 meters but less than 400 
meters deep located in the Gulf of Mexico wholly west of 87 degrees, 30 
minutes west longitude. The suspension volumes for deep wells within 200 
to 400 meters of water depth shall be calculated using the same 
methodology used to calculate the suspension volumes for deep wells in 
the shallower waters of the Gulf of Mexico, and in no case shall the 
suspension volumes for deep wells within 200 to 400 meters of water 
depth be lower than those for deep wells in shallower 
waters. <<NOTE: Effective date. Notices. Federal 
Register, publication.>> Regulations issued under this subsection shall 
be retroactive to the date that the notice of proposed rulemaking is 
published in the Federal Register.

    (c) Limitations.--The Secretary may place limitations on the royalty 
relief granted under this section based on market price. The royalty 
relief granted under this section shall not apply to a lease for which 
deep water royalty relief is available.

SEC. 345. <<NOTE: 42 USC 15905.>> ROYALTY RELIEF FOR DEEP WATER 
            PRODUCTION.

    (a) In General.--Subject to <<NOTE: Effective date.>> subsections 
(b) and (c), for each tract located in water depths of greater than 400 
meters in the Western and Central Planning Area of the Gulf of Mexico 
(including the portion of the Eastern Planning Area of the Gulf of 
Mexico encompassing whole lease blocks lying west of 87 degrees, 30 
minutes West longitude), any oil or gas lease sale under the Outer

[[Page 119 STAT. 704]]

Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) occurring during 
the 5-year period beginning on the date of enactment of this Act shall 
use the bidding system authorized under section 8(a)(1)(H) of the Outer 
Continental Shelf Lands Act (43 U.S.C. 1337(a)(1)(H)).
    (b) Suspension of Royalties.--The suspension of royalties under 
subsection (a) shall be established at a volume of not less than--
            (1) 5,000,000 barrels of oil equivalent for each lease in 
        water depths of 400 to 800 meters;
            (2) 9,000,000 barrels of oil equivalent for each lease in 
        water depths of 800 to 1,600 meters;
            (3) 12,000,000 barrels of oil equivalent for each lease in 
        water depths of 1,600 to 2,000 meters; and
            (4) 16,000,000 barrels of oil equivalent for each lease in 
        water depths greater than 2,000 meters.

    (c) Limitation.--The Secretary may place limitations on royalty 
relief granted under this section based on market price.

SEC. 346. ALASKA OFFSHORE ROYALTY SUSPENSION.

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

SEC. 347. OIL AND GAS LEASING IN THE NATIONAL PETROLEUM RESERVE IN 
            ALASKA.

    (a) Transfer of Authority.--
            (1) Redesignation.--The Naval Petroleum Reserves Production 
        Act of 1976 (42 U.S.C. 6501 et seq.) is amended by redesignating 
        section 107 (42 U.S.C. 6507) as section 108.
            (2) Transfer.--The <<NOTE: 42 USC 6506a.>> matter under the 
        heading ``exploration of national petroleum reserve in alaska'' 
        under the heading ``energy and minerals'' of title I of Public 
        Law 96-514 (42 U.S.C. 6508) is--
                    (A) transferred to the Naval Petroleum Reserves 
                Production Act of 1976 (42 U.S.C. 6501 et seq.);
                    (B) redesignated as section 107 of that Act; and
                    (C) moved so as to appear after section 106 of that 
                Act (42 U.S.C. 6506).

    (b) Competitive Leasing.--Section 107 of the Naval Petroleum 
Reserves Production Act of 1976 (as amended by subsection (a)(2)) is 
amended--
            (1) by striking the heading and all that follows through 
        ``Provided, That (1) activities'' and inserting the following:

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

    ``(a) In General.--The Secretary shall conduct an expeditious 
program of competitive leasing of oil and gas in the Reserve in 
accordance with this Act.
    ``(b) Mitigation of Adverse Effects.--Activities'';
            (2) by striking ``Alaska (the Reserve); (2) the'' and 
        inserting ``Alaska''.

    ``(c) Land Use Planning; BLM Wilderness Study.--The'';
            (3) by striking ``Reserve; (3) the'' and inserting 
        ``Reserve''.

    ``(d) First Lease Sale.--The;'';
            (4) by striking ``4332); (4) the'' and inserting ``4321 et 
        seq.)''.

    ``(e) Withdrawals.--The'';

[[Page 119 STAT. 705]]

            (5) by striking ``herein; (5) bidding'' and inserting 
        ``under this section''.

    ``(f) Bidding Systems.--Bidding'';
            (6) by striking ``629); (6) lease'' and inserting ``629)''.

    ``(g) Geological Structures.--Lease'';
            (7) by striking ``structures; (7) the'' and inserting 
        ``structures''.

    ``(h) Size of Lease Tracts.--The'';
            (8) by striking ``Secretary; (8)'' and all that follows 
        through ``Drilling, production,'' and inserting ``Secretary''.

    ``(i) <<NOTE: Deadlines.>> Terms.--
            ``(1) In general.--Each lease shall be issued for an initial 
        period of not more than 10 years, and shall be extended for so 
        long thereafter as oil or gas is produced from the lease in 
        paying quantities, oil or gas is capable of being produced in 
        paying quantities, or drilling or reworking operations, as 
        approved by the Secretary, are conducted on the leased land.
            ``(2) Renewal of leases with discoveries.--At the end of the 
        primary term of a lease the Secretary shall renew for an 
        additional 10-year term a lease that does not meet the 
        requirements of paragraph (1) if the lessee submits to the 
        Secretary an application for renewal not later than 60 days 
        before the expiration of the primary lease and the lessee 
        certifies, and the Secretary agrees, that hydrocarbon resources 
        were discovered on one or more wells drilled on the leased land 
        in such quantities that a prudent operator would hold the lease 
        for potential future development.
            ``(3) Renewal of leases without discoveries.--At the end of 
        the primary term of a lease the Secretary shall renew for an 
        additional 10-year term a lease that does not meet the 
        requirements of paragraph (1) if the lessee submits to the 
        Secretary an application for renewal not later than 60 days 
        before the expiration of the primary lease and pays the 
        Secretary a renewal fee of $100 per acre of leased land, and--
                    ``(A) the lessee provides evidence, and the 
                Secretary agrees that, the lessee has diligently pursued 
                exploration that warrants continuation with the intent 
                of continued exploration or future potential development 
                of the leased land; or
                    ``(B) all or part of the lease--
                          ``(i) is part of a unit agreement covering a 
                      lease described in subparagraph (A); and
                          ``(ii) has not been previously contracted out 
                      of the unit.
            ``(4) Applicability.--This subsection applies to a lease 
        that is in effect on or after the date of enactment of the 
        Energy Policy Act of 2005.
            ``(5) Expiration for <<NOTE: Deadline.>> failure to 
        produce.--Notwithstanding any other provision of this Act, if no 
        oil or gas is produced from a lease within 30 years after the 
        date of the issuance of the lease the lease shall expire.
            ``(6) Termination.--No lease issued under this section 
        covering lands capable of producing oil or gas in paying 
        quantities shall expire because the lessee fails to produce the 
        same due to circumstances beyond the control of the lessee.

    ``(j) Unit Agreements.--

[[Page 119 STAT. 706]]

            ``(1) In general.--For the purpose of conservation of the 
        natural resources of all or part of any oil or gas pool, field, 
        reservoir, or like area, lessees (including representatives) of 
        the pool, field, reservoir, or like area may unite with each 
        other, or jointly or separately with others, in collectively 
        adopting and operating under a unit agreement for all or part of 
        the pool, field, reservoir, or like area (whether or not any 
        other part of the oil or gas pool, field, reservoir, or like 
        area is already subject to any cooperative or unit plan of 
        development or operation), if the Secretary determines the 
        action to be necessary or advisable in the public interest. In 
        determining the public interest, the Secretary should consider, 
        among other things, the extent to which the unit agreement will 
        minimize the impact to surface resources of the leases and will 
        facilitate consolidation of facilities.
            ``(2) Consultation.--In making a determination under 
        paragraph (1), the Secretary shall consult with and provide 
        opportunities for participation by the State of Alaska or a 
        Regional Corporation (as defined in section 3 of the Alaska 
        Native Claims Settlement Act (43 U.S.C. 1602)) with respect to 
        the creation or expansion of units that include acreage in which 
        the State of Alaska or the Regional Corporation has an interest 
        in the mineral estate.
            ``(3) Production allocation methodology.--(A) The Secretary 
        may use a production allocation methodology for each 
        participating area within a unit that includes solely Federal 
        land in the Reserve.
            ``(B) The Secretary shall use a production allocation 
        methodology for each participating area within a unit that 
        includes Federal land in the Reserve and non-Federal land based 
        on the characteristics of each specific oil or gas pool, field, 
        reservoir, or like area to take into account reservoir 
        heterogeneity and area variation in reservoir producibility 
        across diverse leasehold interests. The implementation of the 
        foregoing production allocation methodology shall be controlled 
        by agreement among the affected lessors and lessees.
            ``(4) Benefit of operations.--Drilling, production,'';
            (9) by striking ``When separate'' and inserting the 
        following:
            ``(5) Pooling.--If separate'';
            (10) by inserting ``(in consultation with the owners of the 
        other land)'' after ``determined by the Secretary of the 
        Interior'';
            (11) by striking ``thereto; (10) to'' and all that follows 
        through ``the terms provided therein'' and inserting ``to the 
        agreement.

    ``(k) Exploration Incentives.--
            ``(1) In general.--
                    ``(A) Waiver, suspension, or reduction.--To 
                encourage the greatest ultimate recovery of oil or gas 
                or in the interest of conservation, the Secretary may 
                waive, suspend, or reduce the rental fees or minimum 
                royalty, or reduce the royalty on an entire leasehold 
                (including on any lease operated pursuant to a unit 
                agreement), whenever (after consultation with the State 
                of Alaska and the North Slope Borough of Alaska and the 
                concurrence of any Regional Corporation for leases that 
                include land that was made available for acquisition by 
                the Regional Corporation under the provisions of section 
                1431(o) of the Alaska National

[[Page 119 STAT. 707]]

                Interest Lands Conservation Act (16 U.S.C. 3101 et 
                seq.)) in the judgment of the Secretary it is necessary 
                to do so to promote development, or whenever in the 
                judgment of the Secretary the leases cannot be 
                successfully operated under the terms provided therein.
                    ``(B) Applicability.--This paragraph applies to a 
                lease that is in effect on or after the date of 
                enactment of the Energy Policy Act of 2005.'';
            (12) by striking ``The Secretary is authorized to'' and 
        inserting the following:
            ``(2) Suspension of operations and production.--The 
        Secretary may'';
            (13) by striking ``In the event'' and inserting the 
        following:
            ``(3) Suspension of payments.--If'';
            (14) by striking ``thereto; and (11) all'' and inserting 
        ``to the lease.

    ``(l) Receipts.--All'';
            (15) by redesignating subparagraphs (A), (B), and (C) as 
        paragraphs (1), (2), and (3), respectively;
            (16) by striking ``Any agency'' and inserting the following:

    ``(m) Explorations.--Any agency'';
            (17) by striking ``Any action'' and inserting the following:

    ``(n) Environmental Impact Statements.--
            ``(1) Judicial review.--Any action'';
            (18) by striking ``The detailed'' and inserting the 
        following:
            ``(2) Initial lease sales.--The detailed'';
            (19) by striking ``section 104(b) of the Naval Petroleum 
        Reserves Production Act of 1976 (90 Stat. 304; 42 U.S.C. 6504)'' 
        and inserting ``section 104(a)''; and
            (20) by adding at the end the following:

    ``(o) Regulations.--As soon as practicable after the date of 
enactment of the Energy Policy Act of 2005, the Secretary shall issue 
regulations to implement this section.
    ``(p) Waiver of Administration for Conveyed Lands.--
            ``(1) In general.--Notwithstanding section 14(g) of the 
        Alaska Native Claims Settlement Act (43 U.S.C. 1613(g))--
                    ``(A) the Secretary of the Interior shall waive 
                administration of any oil and gas lease to the extent 
                that the lease covers any land in the Reserve in which 
                all of the subsurface estate is conveyed to the Arctic 
                Slope Regional Corporation (referred to in this 
                subsection as the `Corporation');
                    ``(B)(i) in a case in which a conveyance of a 
                subsurface estate described in subparagraph (A) does not 
                include all of the land covered by the oil and gas 
                lease, the person that owns the subsurface estate in any 
                particular portion of the land covered by the lease 
                shall be entitled to all of the revenues reserved under 
                the lease as to that portion, including, without 
                limitation, all the royalty payable with respect to oil 
                or gas produced from or allocated to that portion;
                          ``(ii) in a case described in clause (i), the 
                      Secretary of the Interior shall--
                                    ``(I) segregate the lease into 2 
                                leases, 1 of which shall cover only the 
                                subsurface estate conveyed to the 
                                Corporation; and

[[Page 119 STAT. 708]]

                                    ``(II) waive administration of the 
                                lease that covers the subsurface estate 
                                conveyed to the Corporation; and
                          ``(iii) the segregation of the lease described 
                      in clause (ii)(I) has no effect on the obligations 
                      of the lessee under either of the resulting 
                      leases, including obligations relating to 
                      operations, production, or other circumstances 
                      (other than payment of rentals or royalties); and
                    ``(C) nothing in this subsection limits the 
                authority of the Secretary of the Interior to manage the 
                federally-owned surface estate within the Reserve.''.

    (c) Conforming Amendments.--Section 104 of the Naval Petroleum 
Reserves Production Act of 1976 (42 U.S.C. 6504) is amended--
            (1) by striking subsection (a); and
            (2) by redesignating subsections (b) through (d) as 
        subsections (a) through (c), respectively.

SEC. 348. <<NOTE: Alaska. 42 USC 15906.>> NORTH SLOPE SCIENCE 
            INITIATIVE.

    (a) Establishment.--
            (1) In general.--The Secretary of the Interior shall 
        establish a long-term initiative to be known as the ``North 
        Slope Science Initiative'' (referred to in this section as the 
        ``Initiative'').
            (2) Purpose.--The purpose of the Initiative shall be to 
        implement efforts to coordinate collection of scientific data 
        that will provide a better understanding of the terrestrial, 
        aquatic, and marine ecosystems of the North Slope of Alaska.

    (b) Objectives.--To ensure that the Initiative is conducted through 
a comprehensive science strategy and implementation plan, the Initiative 
shall, at a minimum--
            (1) identify and prioritize information needs for inventory, 
        monitoring, and research activities to address the individual 
        and cumulative effects of past, ongoing, and anticipated 
        development activities and environmental change on the North 
        Slope;
            (2) develop an understanding of information needs for 
        regulatory and land management agencies, local governments, and 
        the public;
            (3) focus on prioritization of pressing natural resource 
        management and ecosystem information needs, coordination, and 
        cooperation among agencies and organizations;
            (4) coordinate ongoing and future inventory, monitoring, and 
        research activities to minimize duplication of effort, share 
        financial resources and expertise, and assure the collection of 
        quality information;
            (5) identify priority needs not addressed by agency science 
        programs in effect on the date of enactment of this Act and 
        develop a funding strategy to meet those needs;
            (6) provide a consistent approach to high caliber science, 
        including inventory, monitoring, and research;
            (7) maintain and improve public and agency access to--
                    (A) accumulated and ongoing research; and
                    (B) contemporary and traditional local knowledge; 
                and

[[Page 119 STAT. 709]]

            (8) ensure through appropriate peer review that the science 
        conducted by participating agencies and organizations is of the 
        highest technical quality.

    (c) Membership.--
            (1) In general.--To ensure comprehensive collection of 
        scientific data, in carrying out the Initiative, the Secretary 
        shall consult and coordinate with Federal, State, and local 
        agencies that have responsibilities for land and resource 
        management across the North Slope.
            (2) Cooperative agreements.--The Secretary shall enter into 
        cooperative agreements with the State of Alaska, the North Slope 
        Borough, the Arctic Slope Regional Corporation, and other 
        Federal agencies as appropriate to coordinate efforts, share 
        resources, and fund projects under this section.

    (d) Science <<NOTE: Establishment.>> Technical Advisory Panel.--
            (1) In general.--The Initiative shall include a panel to 
        provide advice on proposed inventory, monitoring, and research 
        functions.
            (2) Membership.--The panel described in paragraph (1) shall 
        consist of a representative group of not more than 15 scientists 
        and technical experts from diverse professions and interests, 
        including the oil and gas industry, subsistence users, Native 
        Alaskan entities, conservation organizations, wildlife 
        management organizations, and academia, as determined by the 
        Secretary.

    (e) Reports.--Not later than 3 years after the date of enactment of 
this section and each year thereafter, the Secretary shall publish a 
report that describes the studies and findings of the Initiative.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 349. <<NOTE: 42 USC 15907.>> ORPHANED, ABANDONED, OR IDLED WELLS ON 
            FEDERAL LAND.

    (a) In General.--The <<NOTE: Deadline.>> Secretary, in cooperation 
with the Secretary of Agriculture, shall establish a program not later 
than 1 year after the date of enactment of this Act to remediate, 
reclaim, and close orphaned, abandoned, or idled oil and gas wells 
located on land administered by the land management agencies within the 
Department of the Interior and the Department of Agriculture.

    (b) Activities.--The program under subsection (a) shall--
            (1) include a means of ranking orphaned, abandoned, or idled 
        wells sites for priority in remediation, reclamation, and 
        closure, based on public health and safety, potential 
        environmental harm, and other land use priorities;
            (2) provide for identification and recovery of the costs of 
        remediation, reclamation, and closure from persons or other 
        entities currently providing a bond or other financial assurance 
        required under State or Federal law for an oil or gas well that 
        is orphaned, abandoned, or idled; and
            (3) provide for recovery from the persons or entities 
        identified under paragraph (2), or their sureties or guarantors, 
        of the costs of remediation, reclamation, and closure of such 
        wells.

    (c) Cooperation and Consultations.--In carrying out the program 
under subsection (a), the Secretary shall--

[[Page 119 STAT. 710]]

            (1) work cooperatively with the Secretary of Agriculture and 
        the States within which Federal land is located; and
            (2) consult with the Secretary of Energy and the Interstate 
        Oil and Gas Compact Commission.

    (d) Plan.--Not <<NOTE: Deadline.>> later than 1 year after the date 
of enactment of this Act, the Secretary, in cooperation with the 
Secretary of Agriculture, shall submit to Congress a plan for carrying 
out the program under subsection (a).

    (e) Idled Well.--For the purposes of this section, a well is idled 
if--
            (1) the well has been nonoperational for at least 7 years; 
        and
            (2) there is no anticipated beneficial use for the well.

    (f) Federal Reimbursement for Orphaned Well Reclamation Pilot 
Program.--
            (1) Reimbursement for remediating, reclaiming, and closing 
        wells on land subject to a new lease.--The Secretary shall carry 
        out a pilot program under which, in issuing a new oil and gas 
        lease on federally owned land on which 1 or more orphaned wells 
        are located, the Secretary--
                    (A) may require, other than as a condition of the 
                lease, that the lessee remediate, reclaim, and close in 
                accordance with standards established by the Secretary, 
                all orphaned wells on the land leased; and
                    (B) shall develop a program to reimburse a lessee, 
                through a royalty credit against the Federal share of 
                royalties owed or other means, for the reasonable actual 
                costs of remediating, reclaiming, and closing the 
                orphaned wells pursuant to that requirement.
            (2) Reimbursement for reclaiming orphaned wells on other 
        land.--In carrying out this subsection, the Secretary--
                    (A) may authorize any lessee under an oil and gas 
                lease on federally owned land to reclaim in accordance 
                with the Secretary's standards--
                          (i) an orphaned well on unleased federally 
                      owned land; or
                          (ii) an orphaned well located on an existing 
                      lease on federally owned land for the reclamation 
                      of which the lessee is not legally responsible; 
                      and
                    (B) shall develop a program to provide reimbursement 
                of 100 percent of the reasonable actual costs of 
                remediating, reclaiming, and closing the orphaned well, 
                through credits against the Federal share of royalties 
                or other means.
            (3) Regulations.--The Secretary may issue such regulations 
        as are appropriate to carry out this subsection.

    (g) Technical Assistance Program for Non-Federal Land.--
            (1) In general.--The Secretary of Energy shall establish a 
        program to provide technical and financial assistance to oil and 
        gas producing States to facilitate State efforts over a 10-year 
        period to ensure a practical and economical remedy for 
        environmental problems caused by orphaned or abandoned oil and 
        gas exploration or production well sites on State or private 
        land.
            (2) Assistance.--The Secretary of Energy shall work with the 
        States, through the Interstate Oil and Gas Compact Commission, 
        to assist the States in quantifying and mitigating

[[Page 119 STAT. 711]]

        environmental risks of onshore orphaned or abandoned oil or gas 
        wells on State and private land.
            (3) Activities.--The program under paragraph (1) shall 
        include--
                    (A) mechanisms to facilitate identification, if 
                feasible, of the persons currently providing a bond or 
                other form of financial assurance required under State 
                or Federal law for an oil or gas well that is orphaned 
                or abandoned;
                    (B) criteria for ranking orphaned or abandoned well 
                sites based on factors such as public health and safety, 
                potential environmental harm, and other land use 
                priorities;
                    (C) information and training programs on best 
                practices for remediation of different types of sites; 
                and
                    (D) funding of State mitigation efforts on a cost-
                shared basis.

    (h) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated to 
        carry out this section $25,000,000 for each of fiscal years 2006 
        through 2010.
            (2) Use.--Of the amounts authorized under paragraph (1), 
        $5,000,000 are authorized for each fiscal year for activities 
        under subsection (f).

SEC. 350. COMBINED HYDROCARBON LEASING.

    (a) Special Provisions Regarding Leasing.--Section 17(b)(2) of the 
Mineral Leasing Act (30 U.S.C. 226(b)(2)) is amended--
            (1) by inserting ``(A)'' after ``(2)''; and
            (2) by adding at the end the following:

    ``(B) For any area that contains any combination of tar sand and oil 
or gas (or both), the Secretary may issue under this Act, separately--
            ``(i) a lease for exploration for and extraction of tar 
        sand; and
            ``(ii) a lease for exploration for and development of oil 
        and gas.

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

SEC. 351. <<NOTE: National Geographical and Geophysical Data 
            Preservation Program Act of 2005. 42 USC 
            15908.>> PRESERVATION OF GEOLOGICAL AND GEOPHYSICAL DATA.

    (a) Short Title.--This section may be cited as the ``National 
Geological and Geophysical Data Preservation Program Act of 2005''.

[[Page 119 STAT. 712]]

    (b) Program.--The Secretary shall carry out a National Geological 
and Geophysical Data Preservation Program in accordance with this 
section--
            (1) to archive geologic, geophysical, and engineering data, 
        maps, well logs, and samples;
            (2) to provide a national catalog of such archival material; 
        and
            (3) to provide technical and financial assistance related to 
        the archival material.

    (c) Plan.--Not <<NOTE: Deadline.>> later than 1 year after the date 
of enactment of this Act, the Secretary shall submit to Congress a plan 
for the implementation of the Program.

    (d) Data Archive System.--
            (1) Establishment.--The Secretary shall establish, as a 
        component of the Program, a data archive system to provide for 
        the storage, preservation, and archiving of subsurface, surface, 
        geological, geophysical, and engineering data and samples. The 
        Secretary, in consultation with the Advisory Committee, shall 
        develop guidelines relating to the data archive system, 
        including the types of data and samples to be preserved.
            (2) System components.--The system shall be comprised of 
        State agencies that elect to be part of the system and agencies 
        within the Department of the Interior that maintain geological 
        and geophysical data and samples that are designated by the 
        Secretary in accordance with this subsection. The Program shall 
        provide for the storage of data and samples through data 
        repositories operated by such agencies.
            (3) Limitation of designation.--The Secretary may not 
        designate a State agency as a component of the data archive 
        system unless that agency is the agency that acts as the 
        geological survey in the State.
            (4) Data from federal land.--The data archive system shall 
        provide for the archiving of relevant subsurface data and 
        samples obtained from Federal land--
                    (A) in the most appropriate repository designated 
                under paragraph (2), with preference being given to 
                archiving data in the State in which the data were 
                collected; and
                    (B) consistent with all applicable law and 
                requirements relating to confidentiality and proprietary 
                data.

    (e) National Catalog.--
            (1) In general.--As soon as practicable after the date of 
        enactment of this Act, the Secretary shall develop and maintain, 
        as a component of the Program, a national catalog that 
        identifies--
                    (A) data and samples available in the data archive 
                system established under subsection (d);
                    (B) the repository for particular material in the 
                system; and
                    (C) the means of accessing the material.
            (2) Availability.--The Secretary shall make the national 
        catalog accessible to the public on the site of the Survey on 
        the Internet, consistent with all applicable requirements 
        related to confidentiality and proprietary data.

    (f) Advisory Committee.--
            (1) In general.--The Advisory Committee shall advise the 
        Secretary on planning and implementation of the Program.

[[Page 119 STAT. 713]]

            (2) New duties.--In addition to its duties under the 
        National Geologic Mapping Act of 1992 (43 U.S.C. 31a et seq.), 
        the Advisory Committee shall perform the following duties:
                    (A) Advise the Secretary on developing guidelines 
                and procedures for providing assistance for facilities 
                under subsection (g)(1).
                    (B) Review and critique the draft implementation 
                plan prepared by the Secretary under subsection (c).
                    (C) Identify useful studies of data archived under 
                the Program that will advance understanding of the 
                Nation's energy and mineral resources, geologic hazards, 
                and engineering geology.
                    (D) Review the progress of the Program in archiving 
                significant data and preventing the loss of such data, 
                and the scientific progress of the studies funded under 
                the Program.
                    (E) Include in the annual report to the Secretary 
                required under section 5(b)(3) of the National Geologic 
                Mapping Act of 1992 (43 U.S.C. 31d(b)(3)) an evaluation 
                of the progress of the Program toward fulfilling the 
                purposes of the Program under subsection (b).

    (g) Financial Assistance.--
            (1) Archive facilities.--Subject to the availability of 
        appropriations, the Secretary shall provide financial assistance 
        to a State agency that is designated under subsection (d)(2) for 
        providing facilities to archive energy material.
            (2) Studies.--Subject to the availability of appropriations, 
        the Secretary shall provide financial assistance to any State 
        agency designated under subsection (d)(2) for studies and 
        technical assistance activities that enhance understanding, 
        interpretation, and use of materials archived in the data 
        archive system established under subsection (d).
            (3) Federal share.--The Federal share of the cost of an 
        activity carried out with assistance under this subsection shall 
        be not more than 50 percent of the total cost of the activity.
            (4) Private contributions.--
        The <<NOTE: Applicability.>> Secretary shall apply to the non-
        Federal share of the cost of an activity carried out with 
        assistance under this subsection the value of private 
        contributions of property and services used for that activity.

    (h) Report.--The Secretary shall include in each report under 
section 8 of the National Geologic Mapping Act of 1992 (43 U.S.C. 31g)--
            (1) a description of the status of the Program;
            (2) an evaluation of the progress achieved in developing the 
        Program during the period covered by the report; and
            (3) any recommendations for legislative or other action the 
        Secretary considers necessary and appropriate to fulfill the 
        purposes of the Program under subsection (b).

    (i) Maintenance of State Effort.--It is the intent of Congress that 
the States not use this section as an opportunity to reduce State 
resources applied to the activities that are the subject of the Program.
    (j) Definitions.--In this section:
            (1) Advisory committee.--The term ``Advisory Committee'' 
        means the advisory committee established under section 5 of the 
        National Geologic Mapping Act of 1992 (43 U.S.C. 31d).

[[Page 119 STAT. 714]]

            (2) Program.--The term ``Program'' means the National 
        Geological and Geophysical Data Preservation Program carried out 
        under this section.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior, acting through the Director of the United 
        States Geological Survey.
            (4) Survey.--The term ``Survey'' means the United States 
        Geological Survey.

    (k) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $30,000,000 for each of fiscal 
years 2006 through 2010.

SEC. 352. OIL AND GAS LEASE ACREAGE LIMITATIONS.

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

SEC. 353. <<NOTE: 42 USC 15909.>> GAS HYDRATE PRODUCTION INCENTIVE.

    (a) Purpose.--The purpose of this section is to promote natural gas 
production from the natural gas hydrate resources on the outer 
Continental Shelf and Federal lands in Alaska by providing royalty 
incentives.
    (b) Suspension of Royalties.--
            (1) In general.--The Secretary may grant royalty relief in 
        accordance with this section for natural gas produced from gas 
        hydrate resources under an eligible lease.
            (2) Eligible leases.--A lease shall be an eligible lease for 
        purposes of this section if--
                    (A) it is issued under the Outer Continental Shelf 
                Lands Act (43 U.S.C. 1331 et seq.), or is an oil and gas 
                lease issued for onshore Federal lands in Alaska;
                    (B) it is issued prior to January 1, 2016; and
                    (C) production under the lease of natural gas from 
                gas hydrate resources commences prior to January 1, 
                2018.
            (3) Amount of relief.--The Secretary shall conduct a 
        rulemaking and grant royalty relief under this section as a 
        suspension volume if the Secretary determines that such royalty 
        relief would encourage production of natural gas from gas 
        hydrate resources from an eligible lease. The maximum suspension 
        volume shall be 30 billion cubic feet of natural gas per lease. 
        Such relief shall be in addition to any other royalty relief 
        under any other provision applicable to the lease that does not 
        specifically grant a gas hydrate production incentive. Such 
        royalty suspension volume shall be applied to any eligible 
        production occurring on or after the date of publication of the 
        advanced notice of proposed rulemaking.
            (4) Limitation.--The Secretary may place limitations on 
        royalty relief granted under this section based on market price.

    (c) Application.--This section shall apply to any eligible lease 
issued before, on, or after the date of enactment of this Act.
    (d) Rulemakings.--
            (1) Requirement.--
        The <<NOTE: Publication. Notices. Deadlines.>> Secretary shall 
        publish the advanced notice of proposed rulemaking within 180 
        days after the date of enactment of this Act and complete the 
        rulemaking

[[Page 119 STAT. 715]]

        implementing this section within 365 days after the date of 
        enactment of this Act.
            (2) Gas hydrate resources defined.--Such regulations shall 
        define the term ``gas hydrate resources'' to include both the 
        natural gas content of gas hydrates within the hydrate stability 
        zone and free natural gas trapped by and beneath the hydrate 
        stability zone.

    (e) Review.--Not <<NOTE: Deadline. Reports.>> later than 365 days 
after the date of enactment of this Act, the Secretary, in consultation 
with the Secretary of Energy, shall carry out a review of, and submit to 
Congress a report on, further opportunities to enhance production of 
natural gas from gas hydrate resources on the outer Continental Shelf 
and on Federal lands in Alaska through the provision of other production 
incentives or through technical or financial assistance.

SEC. 354. <<NOTE: 42 USC 15910.>> ENHANCED OIL AND NATURAL GAS 
            PRODUCTION THROUGH CARBON DIOXIDE INJECTION.

    (a) Production Incentive.--
            (1) Findings.--Congress finds the following:
                    (A) Approximately two-thirds of the original oil in 
                place in the United States remains unproduced.
                    (B) Enhanced oil and natural gas production from the 
                sequestering of carbon dioxide and other appropriate 
                gases has the potential to increase oil and natural gas 
                production.
                    (C) Capturing and productively using carbon dioxide 
                would help reduce the carbon intensity of the economy.
            (2) Purpose.--The purpose of this section is--
                    (A) to promote the capturing, transportation, and 
                injection of produced carbon dioxide, natural carbon 
                dioxide, and other appropriate gases or other matter for 
                sequestration into oil and gas fields; and
                    (B) to promote oil and natural gas production from 
                the outer Continental Shelf and onshore Federal lands 
                under lease by providing royalty incentives to use 
                enhanced recovery techniques using injection of the 
                substances referred to in subparagraph (A).

    (b) Suspension of Royalties.--
            (1) In general.--If the Secretary determines that reduction 
        of the royalty under a Federal oil and gas lease that is an 
        eligible lease is in the public interest and promotes the 
        purposes of this section, the Secretary shall undertake a 
        rulemaking to provide for such reduction for an eligible lease.
            (2) Rulemakings.--
        The <<NOTE: Publication. Notices. Deadlines.>> Secretary shall 
        publish the advanced notice of proposed rulemaking within 180 
        days after the date of enactment of this Act and complete the 
        rulemaking implementing this section within 365 days after the 
        date of enactment of this Act.
            (3) Eligible leases.--A lease shall be an eligible lease for 
        purposes of this section if--
                    (A) it is a lease for production of oil and gas from 
                the outer Continental Shelf or Federal onshore lands;
                    (B) the injection of the substances referred to in 
                subsection (a)(2)(A) will be used as an enhanced 
                recovery technique on such lease; and
                    (C) the Secretary determines that the lease contains 
                oil or gas that would not likely be produced without the 
                royalty reduction provided under this section.

[[Page 119 STAT. 716]]

            (4) Amount of relief.--The rulemaking shall provide for a 
        suspension volume, which shall not exceed 5,000,000 barrels of 
        oil equivalent for each eligible lease. Such suspension volume 
        shall be applied to any production from an eligible lease 
        occurring on or after the date of publication of any advanced 
        notice of proposed rulemaking under this subsection.
            (5) Limitation.--The Secretary may place limitations on the 
        royalty reduction granted under this section based on market 
        price.
            (6) Application.--This section shall apply to any eligible 
        lease issued before, on, or after the date of enactment of this 
        Act.

    (c) Demonstration Program.--
            (1) Establishment.--
                    (A) In general.--The Secretary of Energy shall 
                establish a competitive grant program to provide grants 
                to producers of oil and gas to carry out projects to 
                inject carbon dioxide for the purpose of enhancing 
                recovery of oil or natural gas while increasing the 
                sequestration of carbon dioxide.
                    (B) Projects.--The demonstration program shall 
                provide for--
                          (i) not more than 10 projects in the Willistin 
                      Basin in North Dakota and Montana; and
                          (ii) 1 project in the Cook Inlet Basin in 
                      Alaska.
            (2) Requirements.--
                    (A) In general.--The Secretary of Energy shall issue 
                requirements relating to applications for grants under 
                paragraph (1).
                    (B) Rulemaking.--The issuance of requirements under 
                subparagraph (A) shall not require a rulemaking.
                    (C) Minimum requirements.--At a minimum, the 
                Secretary shall require under subparagraph (A) that an 
                application for a grant include--
                          (i) a description of the project proposed in 
                      the application;
                          (ii) an estimate of the production increase 
                      and the duration of the production increase from 
                      the project, as compared to conventional recovery 
                      techniques, including water flooding;
                          (iii) an estimate of the carbon dioxide 
                      sequestered by project, over the life of the 
                      project;
                          (iv) a plan to collect and disseminate data 
                      relating to each project to be funded by the 
                      grant;
                          (v) a description of the means by which the 
                      project will be sustainable without Federal 
                      assistance after the completion of the term of the 
                      grant;
                          (vi) a complete description of the costs of 
                      the project, including acquisition, construction, 
                      operation, and maintenance costs over the expected 
                      life of the project;
                          (vii) a description of which costs of the 
                      project will be supported by Federal assistance 
                      under this section; and
                          (viii) a description of any secondary or 
                      tertiary recovery efforts in the field and the 
                      efficacy of water flood recovery techniques used.

[[Page 119 STAT. 717]]

            (3) Partners.--An applicant for a grant under paragraph (1) 
        may carry out a project under a pilot program in partnership 
        with 1 or more other public or private entities.
            (4) Selection criteria.--In evaluating applications under 
        this subsection, the Secretary of Energy shall--
                    (A) consider the previous experience with similar 
                projects of each applicant; and
                    (B) give priority consideration to applications 
                that--
                          (i) are most likely to maximize production of 
                      oil and gas in a cost-effective manner;
                          (ii) sequester significant quantities of 
                      carbon dioxide from anthropogenic sources;
                          (iii) demonstrate the greatest commitment on 
                      the part of the applicant to ensure funding for 
                      the proposed project and the greatest likelihood 
                      that the project will be maintained or expanded 
                      after Federal assistance under this section is 
                      completed; and
                          (iv) minimize any adverse environmental 
                      effects from the project.
            (5) Demonstration program requirements.--
                    (A) Maximum amount.--The Secretary of Energy shall 
                not provide more than $3,000,000 in Federal assistance 
                under this subsection to any applicant.
                    (B) Cost sharing.--The Secretary of Energy shall 
                require cost-sharing under this subsection in accordance 
                with section 988.
                    (C) Period of grants.--
                          (i) In general.--A <<NOTE: Deadline.>> project 
                      funded by a grant under this subsection shall 
                      begin construction not later than 2 years after 
                      the date of provision of the grant, but in any 
                      case not later than December 31, 2010.
                          (ii) Term.--The Secretary shall not provide 
                      grant funds to any applicant under this subsection 
                      for a period of more than 5 years.
            (6) Transfer of <<NOTE: Procedures.>> information and 
        knowledge.--The Secretary of Energy shall establish mechanisms 
        to ensure that the information and knowledge gained by 
        participants in the program under this subsection are 
        transferred among other participants and interested persons, 
        including other applicants that submitted applications for a 
        grant under this subsection.
            (7) Schedule.--
                    (A) Publication.--Not <<NOTE: Deadline. Federal 
                Register, publication.>> later than 180 days after the 
                date of enactment of this Act, the Secretary of Energy 
                shall publish in the Federal Register, and elsewhere, as 
                appropriate, a request for applications to carry out 
                projects under this subsection.
                    (B) Date for applications.--
                An <<NOTE: Deadline.>> application for a grant under 
                this subsection shall be submitted not later than 180 
                days after the date of publication of the request under 
                subparagraph (A).
                    (C) Selection.--After the date by which applications 
                for grants are required to be submitted under 
                subparagraph (B), the Secretary of Energy, in a timely 
                manner, shall select, after peer review and based on the 
                criteria under paragraph (4), those projects to be 
                awarded a grant under this subsection.

[[Page 119 STAT. 718]]

    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 355. ASSESSMENT OF DEPENDENCE OF STATE OF HAWAII ON OIL.

    (a) Assessment.--The Secretary of Energy shall assess the economic 
implications of the dependence of the State of Hawaii on oil as the 
principal source of energy for the State, including--
            (1) the short- and long-term prospects for crude oil supply 
        disruption and price volatility and potential impacts on the 
        economy of Hawaii;
            (2) the economic relationship between oil-fired generation 
        of electricity from residual fuel and refined petroleum products 
        consumed for ground, marine, and air transportation;
            (3) the technical and economic feasibility of increasing the 
        contribution of renewable energy resources for generation of 
        electricity, on an island-by-island basis, including--
                    (A) siting and facility configuration;
                    (B) environmental, operational, and safety 
                considerations;
                    (C) the availability of technology;
                    (D) the effects on the utility system, including 
                reliability;
                    (E) infrastructure and transport requirements;
                    (F) community support; and
                    (G) other factors affecting the economic impact of 
                such an increase and any effect on the economic 
                relationship described in paragraph (2);
            (4) the technical and economic feasibility of using 
        liquefied natural gas to displace residual fuel oil for electric 
        generation, including neighbor island opportunities, and the 
        effect of the displacement on the economic relationship 
        described in paragraph (2), including--
                    (A) the availability of supply;
                    (B) siting and facility configuration for onshore 
                and offshore liquefied natural gas receiving terminals;
                    (C) the factors described in subparagraphs (B) 
                through (F) of paragraph (3); and
                    (D) other economic factors;
            (5) the technical and economic feasibility of using 
        renewable energy sources (including hydrogen) for ground, 
        marine, and air transportation energy applications to displace 
        the use of refined petroleum products, on an island-by-island 
        basis, and the economic impact of the displacement on the 
        relationship described in paragraph (2); and
            (6) an island-by-island approach to--
                    (A) the development of hydrogen from renewable 
                resources; and
                    (B) the application of hydrogen to the energy needs 
                of Hawaii.

    (b) Contracting Authority.--The Secretary of Energy may carry out 
the assessment under subsection (a) directly or, in whole or in part, 
through 1 or more contracts with qualified public or private entities.

[[Page 119 STAT. 719]]

    (c) Report.--Not later than 300 days after the date of enactment of 
this Act, the Secretary of Energy shall prepare (in consultation with 
agencies of the State of Hawaii and other stakeholders, as appropriate), 
and submit to Congress, a report describing the findings, conclusions, 
and recommendations resulting from the assessment.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 356. <<NOTE: 42 USC 15911.>> DENALI COMMISSION.

    (a) Definition of Commission.--In this section, the term 
``Commission'' means the Denali Commission established by the Denali 
Commission Act of 1998 (42 U.S.C. 3121 note; Public Law 105-277).
    (b) Energy Programs.--The Commission shall use amounts made 
available under subsection (d) to carry out energy programs, including--
            (1) energy generation and development, including--
                    (A) fuel cells, hydroelectric, solar, wind, wave, 
                and tidal energy; and
                    (B) alternative energy sources;
            (2) the construction of energy transmission, including 
        interties;
            (3) the replacement and cleanup of fuel tanks;
            (4) the construction of fuel transportation networks and 
        related facilities;
            (5) power cost equalization programs; and
            (6) projects using coal as a fuel, including coal 
        gasification projects.

    (c) Open Meetings.--
            (1) In general.--Except as provided in paragraph (2), a 
        meeting of the Commission shall be open to the public if--
                    (A) the Commission members take action on behalf of 
                the Commission; or
                    (B) the deliberations of the Commission determine, 
                or result in the joint conduct or disposition of, 
                official Commission business.
            (2) Exceptions.--Paragraph (1) shall not apply to any 
        portion of a Commission meeting for which the Commission, in 
        public session, votes to close the meeting for the reasons 
        described in paragraph (2), (4), (5), or (6) of subsection (c) 
        of section 552b of title 5, United States Code.
            (3) Public notice.--
                    (A) In general.--At <<NOTE: Deadline.>> least 1 week 
                before a meeting of the Commission, the Commission shall 
                make a public announcement of the meeting that 
                describes--
                          (i) the time, place, and subject matter of the 
                      meeting;
                          (ii) whether the meeting is to be open or 
                      closed to the public; and
                          (iii) the name and telephone number of an 
                      appropriate person to respond to requests for 
                      information about the meeting.
                    (B) Additional notice.--The Commission shall make a 
                public announcement of any change to the information

[[Page 119 STAT. 720]]

                made available under subparagraph (A) at the earliest 
                practicable time.
            (4) Minutes.--The Commission shall keep, and make available 
        to the public, a transcript, electronic recording, or minutes 
        from each Commission meeting, except for portions of the meeting 
        closed under paragraph (2).

    (d) Authorization of Appropriations.--There is authorized to be 
appropriated to the Commission not more than $55,000,000 for each of 
fiscal years 2006 through 2015 to carry out subsection (b).

SEC. 357. <<NOTE: 42 USC 15912.>> COMPREHENSIVE INVENTORY OF OCS OIL AND 
            NATURAL GAS RESOURCES.

    (a) In General.--The Secretary shall conduct an inventory and 
analysis of oil and natural gas resources beneath all of the waters of 
the United States Outer Continental Shelf (``OCS''). The inventory and 
analysis shall--
            (1) use available data on oil and gas resources in areas 
        offshore of Mexico and Canada that will provide information on 
        trends of oil and gas accumulation in areas of the OCS;
            (2) use any available technology, except drilling, but 
        including 3-D seismic technology to obtain accurate resource 
        estimates;
            (3) analyze how resource estimates in OCS areas have changed 
        over time in regards to gathering geological and geophysical 
        data, initial exploration, or full field development, including 
        areas such as the deepwater and subsalt areas in the Gulf of 
        Mexico;
            (4) estimate the effect that understated oil and gas 
        resource inventories have on domestic energy investments; and
            (5) identify and explain how legislative, regulatory, and 
        administrative programs or processes restrict or impede the 
        development of identified resources and the extent that they 
        affect domestic supply, such as moratoria, lease terms and 
        conditions, operational stipulations and requirements, approval 
        delays by the Federal Government and coastal States, and local 
        zoning restrictions for onshore processing facilities and 
        pipeline landings.

    (b) Reports.--The Secretary shall submit a report to Congress on the 
inventory of estimates and the analysis of restrictions or impediments, 
together with any recommendations, within 6 months of the date of 
enactment of the section. <<NOTE: Public information.>> The report shall 
be publicly available and updated at least every 5 years.

                   Subtitle F--Access to Federal Lands

SEC. 361. FEDERAL ONSHORE OIL AND GAS LEASING AND PERMITTING PRACTICES.

    (a) Review of Onshore Oil and Gas Leasing Practices.--
            (1) In general.--The Secretary of the Interior, in 
        consultation with the Secretary of Agriculture with respect to 
        National Forest System lands under the jurisdiction of the 
        Department of Agriculture, shall perform an internal review of 
        current Federal onshore oil and gas leasing and permitting 
        practices.
            (2) Inclusions.--The review shall include the process for--
                    (A) accepting or rejecting offers to lease;

[[Page 119 STAT. 721]]

                    (B) administrative appeals of decisions or orders of 
                officers or employees of the Bureau of Land Management 
                with respect to a Federal oil or gas lease;
                    (C) considering surface use plans of operation, 
                including the timeframes in which the plans are 
                considered, and any recommendations for improving and 
                expediting the process; and
                    (D) identifying stipulations to address site-
                specific concerns and conditions, including those 
                stipulations relating to the environment and resource 
                use conflicts.

    (b) Report.--Not later than 180 days after the date of enactment of 
this Act, the Secretary of the Interior and the Secretary of Agriculture 
shall transmit a report to Congress that describes--
            (1) actions taken under section 3 of Executive Order No. 
        13212 (42 U.S.C. 13201 note); and
            (2) actions taken or any plans to improve the Federal 
        onshore oil and gas leasing program.

SEC. 362. <<NOTE: 42 USC 15921.>> MANAGEMENT OF FEDERAL OIL AND GAS 
            LEASING PROGRAMS.

    (a) Timely Action on Leases and Permits.--
            (1) Secretary of the interior.--To ensure timely action on 
        oil and gas leases and applications for permits to drill on land 
        otherwise available for leasing, the Secretary of the Interior 
        (referred to in this section as the ``Secretary'') shall--
                    (A) ensure expeditious compliance with section 
                102(2)(C) of the National Environmental Policy Act of 
                1969 (42 U.S.C. 4332(2)(C)) and any other applicable 
                environmental and cultural resources laws;
                    (B) improve consultation and coordination with the 
                States and the public; and
                    (C) improve the collection, storage, and retrieval 
                of information relating to the oil and gas leasing 
                activities.
            (2) Secretary of agriculture.--To ensure timely action on 
        oil and gas lease applications for permits to drill on land 
        otherwise available for leasing, the Secretary of Agriculture 
        shall--
                    (A) ensure expeditious compliance with all 
                applicable environmental and cultural resources laws; 
                and
                    (B) improve the collection, storage, and retrieval 
                of information relating to the oil and gas leasing 
                activities.

    (b) Best Management Practices.--
            (1) In general.--Not <<NOTE: Deadline.>> later than 18 
        months after the date of enactment of this Act, the Secretary 
        shall develop and implement best management practices to--
                    (A) improve the administration of the onshore oil 
                and gas leasing program under the Mineral Leasing Act 
                (30 U.S.C. 181 et seq.); and
                    (B) ensure timely action on oil and gas leases and 
                applications for permits to drill on land otherwise 
                available for leasing.
            (2) Considerations.--In developing the best management 
        practices under paragraph (1), the Secretary shall consider any 
        recommendations from the review under section 361.
            (3) Regulations.--Not <<NOTE: Deadline.>> later than 180 
        days after the development of the best management practices 
        under paragraph (1), the Secretary shall publish, for public 
        comment,

[[Page 119 STAT. 722]]

        proposed regulations that set forth specific timeframes for 
        processing leases and applications in accordance with the best 
        management practices, including deadlines for--
                    (A) approving or disapproving--
                          (i) resource management plans and related 
                      documents;
                          (ii) lease applications;
                          (iii) applications for permits to drill; and
                          (iv) surface use plans; and
                    (B) related administrative appeals.

    (c) Improved Enforcement.--The Secretary and the Secretary of 
Agriculture shall improve inspection and enforcement of oil and gas 
activities, including enforcement of terms and conditions in permits to 
drill on land under the jurisdiction of the Secretary and the Secretary 
of Agriculture, respectively.
    (d) Authorization of Appropriations.--In addition to amounts made 
available to carry out activities relating to oil and gas leasing on 
public land administered by the Secretary and National Forest System 
land administered by the Secretary of Agriculture, there are authorized 
to be appropriated for each of fiscal years 2006 through 2010--
            (1) to the Secretary, acting through the Director of the 
        Bureau of Land Management--
                    (A) $40,000,000 to carry out subsections (a)(1) and 
                (b); and
                    (B) $20,000,000 to carry out subsection (c);
            (2) to the Secretary, acting through the Director of the 
        United States Fish and Wildlife Service, $5,000,000 to carry out 
        subsection (a)(1); and
            (3) to the Secretary of Agriculture, acting through the 
        Chief of the Forest Service, $5,000,000 to carry out subsections 
        (a)(2) and (c).

SEC. 363. <<NOTE: 42 USC 15922.>> CONSULTATION REGARDING OIL AND GAS 
            LEASING ON PUBLIC LAND.

    (a) In General.--Not <<NOTE: Deadline. Memorandum.>> later than 180 
days after the date of enactment of this Act, the Secretary of the 
Interior and the Secretary of Agriculture shall enter into a memorandum 
of understanding regarding oil and gas leasing on--
            (1) public land under the jurisdiction of the Secretary of 
        the Interior; and
            (2) National Forest System land under the jurisdiction of 
        the Secretary of Agriculture.

    (b) Contents.--The memorandum of understanding shall include 
provisions that--
            (1) establish administrative procedures and lines of 
        authority that ensure timely processing of--
                    (A) oil and gas lease applications;
                    (B) surface use plans of operation, including steps 
                for processing surface use plans; and
                    (C) applications for permits to drill consistent 
                with applicable timelines;
            (2) eliminate duplication of effort by providing for 
        coordination of planning and environmental compliance efforts;
            (3) ensure that lease stipulations are--
                    (A) applied consistently;
                    (B) coordinated between agencies; and

[[Page 119 STAT. 723]]

                    (C) only as restrictive as necessary to protect the 
                resource for which the stipulations are applied;
            (4) establish a joint data retrieval system that is capable 
        of--
                    (A) tracking applications and formal requests made 
                in accordance with procedures of the Federal onshore oil 
                and gas leasing program; and
                    (B) providing information regarding the status of 
                the applications and requests within the Department of 
                the Interior and the Department of Agriculture; and
            (5) establish a joint geographic information system mapping 
        system for use in--
                    (A) tracking surface resource values to aid in 
                resource management; and
                    (B) processing surface use plans of operation and 
                applications for permits to drill.

SEC. 364. ESTIMATES OF OIL AND GAS RESOURCES UNDERLYING ONSHORE FEDERAL 
            LAND.

    (a) Assessment.--Section 604 of the Energy Act of 2000 (42 U.S.C. 
6217) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                          (i) by striking ``reserve''; and
                          (ii) by striking ``and'' after the semicolon; 
                      and
                    (B) by striking paragraph (2) and inserting the 
                following:
            ``(2) the extent and nature of any restrictions or 
        impediments to the development of the resources, including--
                    ``(A) impediments to the timely granting of leases;
                    ``(B) post-lease restrictions, impediments, or 
                delays on development for conditions of approval, 
                applications for permits to drill, or processing of 
                environmental permits; and
                    ``(C) permits or restrictions associated with 
                transporting the resources for entry into commerce; and
            ``(3) the quantity of resources not produced or introduced 
        into commerce because of the restrictions.'';
            (2) in subsection (b)--
                    (A) by striking ``reserve'' and inserting 
                ``resource''; and
                    (B) by striking ``publically'' and inserting 
                ``publicly''; and
            (3) by striking subsection (d) and inserting the following:

    ``(d) Assessments.--Using the inventory, the Secretary of Energy 
shall make periodic assessments of economically recoverable resources 
accounting for a range of parameters such as current costs, commodity 
prices, technology, and regulations.''.
    (b) Methodology.--The <<NOTE: 42 USC 15923.>> Secretary of the 
Interior shall use the same assessment methodology across all geological 
provinces, areas, and regions in preparing and issuing national 
geological assessments to ensure accurate comparisons of geological 
resources.

SEC. 365. <<NOTE: 42 USC 15924.>> PILOT PROJECT TO IMPROVE FEDERAL 
            PERMIT COORDINATION.

    (a) Establishment.--The Secretary of the Interior (referred to in 
this section as the ``Secretary'') shall establish a Federal Permit 
Streamlining Pilot Project (referred to in this section as the ``Pilot 
Project'').

[[Page 119 STAT. 724]]

    (b) Memorandum of Understanding.--
            (1) In general.--Not <<NOTE: Deadline.>> later than 90 days 
        after the date of enactment of this Act, the Secretary shall 
        enter into a memorandum of understanding for purposes of this 
        section with--
                    (A) the Secretary of Agriculture;
                    (B) the Administrator of the Environmental 
                Protection Agency; and
                    (C) the Chief of Engineers.
            (2) State participation.--The Secretary may request that the 
        Governors of Wyoming, Montana, Colorado, Utah, and New Mexico be 
        signatories to the memorandum of understanding.

    (c) Designation of Qualified Staff.--
            (1) In general.--Not <<NOTE: Deadline.>> later than 30 days 
        after the date of the signing of the memorandum of understanding 
        under subsection (b), all Federal signatory parties shall, if 
        appropriate, assign to each of the field offices identified in 
        subsection (d) an employee who has expertise in the regulatory 
        issues relating to the office in which the employee is employed, 
        including, as applicable, particular expertise in--
                    (A) the consultations and the preparation of 
                biological opinions under section 7 of the Endangered 
                Species Act of 1973 (16 U.S.C. 1536);
                    (B) permits under section 404 of Federal Water 
                Pollution Control Act (33 U.S.C. 1344);
                    (C) regulatory matters under the Clean Air Act (42 
                U.S.C. 7401 et seq.);
                    (D) planning under the National Forest Management 
                Act of 1976 (16 U.S.C. 472a et seq.); and
                    (E) the preparation of analyses under the National 
                Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
                seq.).
            (2) Duties.--Each employee assigned under paragraph (1) 
        shall--
                    (A) <<NOTE: Deadline.>> not later than 90 days after 
                the date of assignment, report to the Bureau of Land 
                Management Field Managers in the office to which the 
                employee is assigned;
                    (B) be responsible for all issues relating to the 
                jurisdiction of the home office or agency of the 
                employee; and
                    (C) participate as part of the team of personnel 
                working on proposed energy projects, planning, and 
                environmental analyses.

    (d) Field Offices.--The following Bureau of Land Management Field 
Offices shall serve as the Pilot Project offices:
            (1) Rawlins, Wyoming.
            (2) Buffalo, Wyoming.
            (3) Miles City, Montana.
            (4) Farmington, New Mexico.
            (5) Carlsbad, New Mexico.
            (6) Grand Junction/Glenwood Springs, Colorado.
            (7) Vernal, Utah.

    (e) Reports.--Not later than 3 years after the date of enactment of 
this Act, the Secretary shall submit to Congress a report that--
            (1) outlines the results of the Pilot Project to date; and
            (2) makes a recommendation to the President regarding 
        whether the Pilot Project should be implemented throughout the 
        United States.

[[Page 119 STAT. 725]]

    (f) Additional Personnel.--The Secretary shall assign to each field 
office identified in subsection (d) any additional personnel that are 
necessary to ensure the effective implementation of--
            (1) the Pilot Project; and
            (2) other programs administered by the field offices, 
        including inspection and enforcement relating to energy 
        development on Federal land, in accordance with the multiple use 
        mandate of the Federal Land Policy and Management Act of 1976 
        (43 U.S.C. 1701 et seq.).

    (g) Permit Processing Improvement Fund.--Section 35 of the Mineral 
Leasing Act (30 U.S.C. 191) is amended by adding at the end the 
following:
    ``(c)(1) Notwithstanding the first sentence of subsection (a), any 
rentals received from leases in any State (other than the State of 
Alaska) on or after the date of enactment of this subsection shall be 
deposited in the Treasury, to be allocated in accordance with paragraph 
(2).
    ``(2) Of the amounts deposited in the Treasury under paragraph (1)--
            ``(A) 50 percent shall be paid by the Secretary of the 
        Treasury to the State within the boundaries of which the leased 
        land is located or the deposits were derived; and
            ``(B) 50 percent shall be deposited in a special fund in the 
        Treasury, to be known as the `BLM Permit Processing Improvement 
        Fund' (referred to in this subsection as the `Fund').

    ``(3) For each of fiscal years 2006 through 2015, the Fund shall be 
available to the Secretary of the Interior for expenditure, without 
further appropriation and without fiscal year limitation, for the 
coordination and processing of oil and gas use authorizations on onshore 
Federal land under the jurisdiction of the Pilot Project offices 
identified in section 365(d) of the Energy Policy Act of 2005.''.
    (h) Transfer of Funds.--For the purposes of coordination and 
processing of oil and gas use authorizations on Federal land under the 
administration of the Pilot Project offices identified in subsection 
(d), the Secretary may authorize the expenditure or transfer of such 
funds as are necessary to--
            (1) the United States Fish and Wildlife Service;
            (2) the Bureau of Indian Affairs;
            (3) the Forest Service;
            (4) the Environmental Protection Agency;
            (5) the Corps of Engineers; and
            (6) the States of Wyoming, Montana, Colorado, Utah, and New 
        Mexico.

    (i) Fees.--During the period in which the Pilot Project is 
authorized, the Secretary shall not implement a rulemaking that would 
enable an increase in fees to recover additional costs related to 
processing drilling-related permit applications and use authorizations.
    (j) Savings Provision.--Nothing in this section affects--
            (1) the operation of any Federal or State law; or
            (2) any delegation of authority made by the head of a 
        Federal agency whose employees are participating in the Pilot 
        Project.

[[Page 119 STAT. 726]]

SEC. 366. DEADLINE FOR CONSIDERATION OF APPLICATIONS FOR PERMITS.

    Section 17 of the Mineral Leasing Act (30 U.S.C. 226) is amended by 
adding at the end the following:
    ``(p) Deadlines for Consideration of Applications for Permits.--
            ``(1) In general.--Not <<NOTE: Notification.>> later than 10 
        days after the date on which the Secretary receives an 
        application for any permit to drill, the Secretary shall--
                    ``(A) notify the applicant that the application is 
                complete; or
                    ``(B) notify the applicant that information is 
                missing and specify any information that is required to 
                be submitted for the application to be complete.
            ``(2) Issuance or deferral.--Not later than 30 days after 
        the applicant for a permit has submitted a complete application, 
        the Secretary shall--
                    ``(A) issue the permit, if the requirements under 
                the National Environmental Policy Act of 1969 and other 
                applicable law have been completed within such 
                timeframe; or
                    ``(B) <<NOTE: Notice.>> defer the decision on the 
                permit and provide to the applicant a notice--
                          ``(i) that specifies any steps that the 
                      applicant could take for the permit to be issued; 
                      and
                          ``(ii) a list of actions that need to be taken 
                      by the agency to complete compliance with 
                      applicable law together with timelines and 
                      deadlines for completing such actions.
            ``(3) Requirements for deferred applications.--
                    ``(A) In general.--If the Secretary provides notice 
                under paragraph (2)(B), the applicant shall have a 
                period of 2 years from the date of receipt of the notice 
                in which to complete all requirements specified by the 
                Secretary, including providing information needed for 
                compliance with the National Environmental Policy Act of 
                1969.
                    ``(B) Issuance of decision on permit.--If the 
                applicant completes the requirements within the period 
                specified in subparagraph (A), the Secretary shall issue 
                a decision on the permit not later than 10 days after 
                the date of completion of the requirements described in 
                subparagraph (A), unless compliance with the National 
                Environmental Policy Act of 1969 and other applicable 
                law has not been completed within such timeframe.
                    ``(C) Denial of permit.--If the applicant does not 
                complete the requirements within the period specified in 
                subparagraph (A) or if the applicant does not comply 
                with applicable law, the Secretary shall deny the 
                permit.''.

SEC. 367. <<NOTE: 42 USC 15925.>> FAIR MARKET VALUE DETERMINATIONS FOR 
            LINEAR RIGHTS-OF-WAY ACROSS PUBLIC LANDS AND NATIONAL 
            FORESTS.

    (a) Update of Fee Schedule.--Not <<NOTE: Deadline.>> later than 1 
year after the date of enactment of this section--
            (1) the Secretary of the Interior shall update section 
        2806.20 of title 43, Code of Federal Regulations, as in effect 
        on the date of enactment of this section, to revise the per

[[Page 119 STAT. 727]]

        acre rental fee zone value schedule by State, county, and type 
        of linear right-of-way use to reflect current values of land in 
        each zone; and
            (2) the Secretary of Agriculture shall make the same 
        revision for linear rights-of-way granted, issued, or renewed 
        under title V of the Federal Lands Policy and Management Act of 
        1976 (43 U.S.C. 1761 et seq.) on National Forest System land.

    (b) Fair Market Value Rental Determination for Linear Rights-of-
way.--The fair market value rent of a linear right-of-way across public 
lands or National Forest System lands issued under section 504 of the 
Federal Land Policy and Management Act of 1976 (43 U.S.C. 1764) or 
section 28 of the Mineral Leasing Act (30 U.S.C. 185) shall be 
determined in accordance with subpart 2806 of title 43, Code of Federal 
Regulations, as in effect on the date of enactment of this section 
(including the annual or periodic updates specified in the regulations) 
and as updated in accordance with subsection (a).

SEC. 368. <<NOTE: 42 USC 15926.>> ENERGY RIGHT-OF-WAY CORRIDORS ON 
            FEDERAL LAND.

    (a) Western States.--Not <<NOTE: Deadline.>> later than 2 years 
after the date of enactment of this Act, the Secretary of Agriculture, 
the Secretary of Commerce, the Secretary of Defense, the Secretary of 
Energy, and the Secretary of the Interior (in this section referred to 
collectively as ``the Secretaries''), in consultation with the Federal 
Energy Regulatory Commission, States, tribal or local units of 
governments as appropriate, affected utility industries, and other 
interested persons, shall consult with each other and shall--
            (1) designate, under their respective authorities, corridors 
        for oil, gas, and hydrogen pipelines and electricity 
        transmission and distribution facilities on Federal land in the 
        eleven contiguous Western States (as defined in section 103(o) 
        of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 
        1702(o));
            (2) perform any environmental reviews that may be required 
        to complete the designation of such corridors; and
            (3) incorporate the designated corridors into the relevant 
        agency land use and resource management plans or equivalent 
        plans.

    (b) Other States.--Not <<NOTE: Deadline.>> later than 4 years after 
the date of enactment of this Act, the Secretaries, in consultation with 
the Federal Energy Regulatory Commission, affected utility industries, 
and other interested persons, shall jointly--
            (1) identify corridors for oil, gas, and hydrogen pipelines 
        and electricity transmission and distribution facilities on 
        Federal land in States other than those described in subsection 
        (a); and
            (2) schedule prompt action to identify, designate, and 
        incorporate the corridors into the applicable land use plans.

    (c) Ongoing Responsibilities.--
The <<NOTE: Procedures.>> Secretaries, in consultation with the Federal 
Energy Regulatory Commission, affected utility industries, and other 
interested parties, shall establish procedures under their respective 
authorities that--
            (1) ensure that additional corridors for oil, gas, and 
        hydrogen pipelines and electricity transmission and distribution 
        facilities on Federal land are promptly identified and 
        designated as necessary; and

[[Page 119 STAT. 728]]

            (2) expedite applications to construct or modify oil, gas, 
        and hydrogen pipelines and electricity transmission and 
        distribution facilities within such corridors, taking into 
        account prior analyses and environmental reviews undertaken 
        during the designation of such corridors.

    (d) Considerations.--In carrying out this section, the Secretaries 
shall take into account the need for upgraded and new electricity 
transmission and distribution facilities to--
            (1) improve reliability;
            (2) relieve congestion; and
            (3) enhance the capability of the national grid to deliver 
        electricity.

    (e) Specifications of Corridor.--A corridor designated under this 
section shall, at a minimum, specify the centerline, width, and 
compatible uses of the corridor.

SEC. 369. <<NOTE: Oil Shale, Tar Sands, and Other Strategic 
            Unconventional Fuels Act of 2005. Deadlines. 42 USC 
            15927.>> OIL SHALE, TAR SANDS, AND OTHER STRATEGIC 
            UNCONVENTIONAL FUELS.

    (a) Short Title.--This section may be cited as the ``Oil Shale, Tar 
Sands, and Other Strategic Unconventional Fuels Act of 2005''.
    (b) Declaration of Policy.--Congress declares that it is the policy 
of the United States that--
            (1) United States oil shale, tar sands, and other 
        unconventional fuels are strategically important domestic 
        resources that should be developed to reduce the growing 
        dependence of the United States on politically and economically 
        unstable sources of foreign oil imports;
            (2) the development of oil shale, tar sands, and other 
        strategic unconventional fuels, for research and commercial 
        development, should be conducted in an environmentally sound 
        manner, using practices that minimize impacts; and
            (3) development of those strategic unconventional fuels 
        should occur, with an emphasis on sustainability, to benefit the 
        United States while taking into account affected States and 
        communities.

    (c) Leasing Program for Research and Development of Oil Shale and 
Tar Sands.--In accordance with section 21 of the Mineral Leasing Act (30 
U.S.C. 241) and any other applicable law, except as provided in this 
section, not later than 180 days after the date of enactment of this 
Act, from land otherwise available for leasing, the Secretary of the 
Interior (referred to in this section as the ``Secretary'') shall make 
available for leasing such land as the Secretary considers to be 
necessary to conduct research and development activities with respect to 
technologies for the recovery of liquid fuels from oil shale and tar 
sands resources on public lands. Prospective public lands within each of 
the States of Colorado, Utah, and Wyoming shall be made available for 
such research and development leasing.
    (d) Programmatic Environmental Impact Statement and Commercial 
Leasing Program for Oil Shale and Tar Sands.--
            (1) Programmatic environmental impact statement.--Not later 
        than 18 months after the date of enactment of this Act, in 
        accordance with section 102(2)(C) of the National Environmental 
        Policy Act of 1969 (42 U.S.C. 4332(2)(C)), the Secretary shall 
        complete a programmatic environmental impact statement for a 
        commercial leasing program for oil shale and tar sands resources 
        on public lands, with an emphasis on

[[Page 119 STAT. 729]]

        the most geologically prospective lands within each of the 
        States of Colorado, Utah, and Wyoming.
            (2) Final regulation.--Not later than 6 months after the 
        completion of the programmatic environmental impact statement 
        under this subsection, the Secretary shall publish a final 
        regulation establishing such program.

    (e) Commencement of Commercial Leasing of Oil Shale and Tar Sands.--
Not later than 180 days after publication of the final regulation 
required by subsection (d), the Secretary shall consult with the 
Governors of States with significant oil shale and tar sands resources 
on public lands, representatives of local governments in such States, 
interested Indian tribes, and other interested persons, to determine the 
level of support and interest in the States in the development of tar 
sands and oil shale resources. If the Secretary finds sufficient support 
and interest exists in a State, the Secretary may conduct a lease sale 
in that State under the commercial leasing program regulations. Evidence 
of interest in a lease sale under this subsection shall include, but not 
be limited to, appropriate areas nominated for leasing by potential 
lessees and other interested parties.
    (f) Diligent Development Requirements.--
The <<NOTE: Regulations.>> Secretary shall, by regulation, designate 
work requirements and milestones to ensure the diligent development of 
the lease.

    (g) Initial Report by the Secretary of the Interior.--Within 90 days 
after the date of enactment of this Act, the Secretary of the Interior 
shall report to the Committee on Resources of the House of 
Representatives and the Committee on Energy and Natural Resources of the 
Senate on--
            (1) the interim actions necessary to--
                    (A) develop the program, complete the programmatic 
                environmental impact statement, and promulgate the final 
                regulation as required by subsection (d); and
                    (B) conduct the first lease sales under the program 
                as required by subsection (e); and
            (2) a schedule to complete such actions within the time 
        limits mandated by this section.

    (h) Task Force.--
            (1) Establishment.--The Secretary of Energy, in cooperation 
        with the Secretary of the Interior and the Secretary of Defense, 
        shall establish a task force to develop a program to coordinate 
        and accelerate the commercial development of strategic 
        unconventional fuels, including but not limited to oil shale and 
        tar sands resources within the United States, in an integrated 
        manner.
            (2) Composition.--The Task Force shall be composed of--
                    (A) the Secretary of Energy (or the designee of the 
                Secretary);
                    (B) the Secretary of the Interior (or the designee 
                of the Secretary of the Interior);
                    (C) the Secretary of Defense (or the designee of the 
                Secretary of Defense);
                    (D) the Governors of affected States; and
                    (E) representatives of local governments in affected 
                areas.
            (3) Recommendations.--The Task Force shall make such 
        recommendations regarding promoting the development of the

[[Page 119 STAT. 730]]

        strategic unconventional fuels resources within the United 
        States as it may deem appropriate.
            (4) Partnerships.--The Task Force shall make recommendations 
        with respect to initiating a partnership with the Province of 
        Alberta, Canada, for purposes of sharing information relating to 
        the development and production of oil from tar sands, and 
        similar partnerships with other nations that contain significant 
        oil shale resources.
            (5) Reports.--
                    (A) Initial report.--Not later than 180 days after 
                the date of enactment of this Act, the Task Force shall 
                submit to the President and Congress a report that 
                describes the analysis and recommendations of the Task 
                Force.
                    (B) Subsequent reports.--The Secretary shall provide 
                an annual report describing the progress in developing 
                the strategic unconventional fuels resources within the 
                United States for each of the 5 years following 
                submission of the report provided for in subparagraph 
                (A).

    (i) Office of <<NOTE: Establishment.>> Petroleum Reserves.--
            (1) In general.--The Office of Petroleum Reserves of the 
        Department of Energy shall--
                    (A) coordinate the creation and implementation of a 
                commercial strategic fuel development program for the 
                United States;
                    (B) evaluate the strategic importance of 
                unconventional sources of strategic fuels to the 
                security of the United States;
                    (C) promote and coordinate Federal Government 
                actions that facilitate the development of strategic 
                fuels in order to effectively address the energy supply 
                needs of the United States;
                    (D) identify, assess, and recommend appropriate 
                actions of the Federal Government required to assist in 
                the development and manufacturing of strategic fuels; 
                and
                    (E) coordinate and facilitate appropriate 
                relationships between private industry and the Federal 
                Government to promote sufficient and timely private 
                investment to commercialize strategic fuels for domestic 
                and military use.
            (2) Consultation and coordination.--The Office of Petroleum 
        Reserves shall work closely with the Task Force and coordinate 
        its staff support.
            (3) Annual reports.--Not later than 180 days after the date 
        of enactment of this Act and annually thereafter, the Secretary 
        shall submit to Congress a report that describes the activities 
        of the Office of Petroleum Reserves carried out under this 
        subsection.

    (j) Mineral Leasing Act Amendments.--
            (1) Section 17.--Section 17(b)(2) of the Mineral Leasing Act 
        (30 U.S.C. 226(b)(2)), as amended by section 350, is further 
        amended--
                    (A) in subparagraph (A) (as designated by the 
                amendment made by subsection (a)(1) of that section) by 
                designating the first, second, and third sentences as 
                clauses (i), (ii), and (iii), respectively;
                    (B) by moving clause (ii), as so designated, so as 
                to begin immediately after and below clause (i);

[[Page 119 STAT. 731]]

                    (C) by moving clause (iii), as so designated, so as 
                to begin immediately after and below clause (ii);
                    (D) in clause (i) of subparagraph (A) (as designated 
                by subparagraph (A) of this paragraph) by striking 
                ``five thousand one hundred and twenty'' and inserting 
                ``5,760''; and
                    (E) by adding at the end the following:
            ``(iv) No lease issued under this paragraph shall be 
        included in any chargeability limitation associated with oil and 
        gas leases.''.
            (2) Section 21.--Section 21(a) of the Mineral Leasing Act 
        (30 U.S.C. 241(a)) is amended--
                    (A) by striking ``(a) That the Secretary'' and 
                inserting the following:

    ``(a)(1) The Secretary'';
                    (B) by striking ``; that no lease'' and inserting a 
                period, followed by the following:
            ``(2) No lease'';
                    (C) by striking ``Leases may be for'' and inserting 
                the following:
            ``(3) Leases may be for'';
                    (D) by striking ``For the privilege'' and inserting 
                the following:
            ``(4) For the privilege'';
                    (E) in paragraph (2) (as designated by subparagraph 
                (B) of this paragraph) by striking ``five thousand one 
                hundred and twenty'' and inserting ``5,760'';
                    (F) in paragraph (4) (as designated by subparagraph 
                (D) of this paragraph) by striking ``rate of 50 cents 
                per acre'' and inserting ``rate of $2.00 per acre'';
                    (G)(i) by striking ``: Provided further, That not 
                more than one lease shall be granted under this section 
                to any'' and inserting ``: Provided further, That no''; 
                and
                    (ii) by striking ``except that with respect to 
                leases for'' and inserting ``shall acquire or hold more 
                than 50,000 acres of oil shale leases in any one State. 
                For''; and
                    (H) by adding at the end the following:
            ``(5) No lease issued under this section shall be included 
        in any chargeability limitation associated with oil and gas 
        leases.''.

    (k) Interagency Coordination and Expeditious Review of Permitting 
Process.--
            (1) Department of the interior as lead agency.--Upon written 
        request of a prospective applicant for Federal authorization to 
        develop a proposed oil shale or tar sands project, the 
        Department of the Interior shall act as the lead Federal agency 
        for the purposes of coordinating all applicable Federal 
        authorizations and environmental reviews. To the maximum extent 
        practicable under applicable Federal law, the Secretary shall 
        coordinate this Federal authorization and review process with 
        any Indian tribes and State and local agencies responsible for 
        conducting any separate permitting and environmental reviews.
            (2) Implementing regulations.--Not later than 6 months after 
        the date of enactment of this Act, the Secretary shall issue any 
        regulations necessary to implement this subsection.

    (l) Cost-shared Demonstration Technologies.--

[[Page 119 STAT. 732]]

            (1) Identification.--The Secretary of Energy shall identify 
        technologies for the development of oil shale and tar sands 
        that--
                    (A) are ready for demonstration at a commercially-
                representative scale; and
                    (B) have a high probability of leading to commercial 
                production.
            (2) Assistance.--For each technology identified under 
        paragraph (1), the Secretary of Energy may provide--
                    (A) technical assistance;
                    (B) assistance in meeting environmental and 
                regulatory requirements; and
                    (C) cost-sharing assistance.

    (m) National Oil Shale and Tar Sands Assessment.--
            (1) Assessment.--
                    (A) In general.--The Secretary shall carry out a 
                national assessment of oil shale and tar sands resources 
                for the purposes of evaluating and mapping oil shale and 
                tar sands deposits, in the geographic areas described in 
                subparagraph (B). In conducting such an assessment, the 
                Secretary shall make use of the extensive geological 
                assessment work for oil shale and tar sands already 
                conducted by the United States Geological Survey.
                    (B) Geographic areas.--The geographic areas referred 
                to in subparagraph (A), listed in the order in which the 
                Secretary shall assign priority, are--
                          (i) the Green River Region of the States of 
                      Colorado, Utah, and Wyoming;
                          (ii) the Devonian oil shales and other 
                      hydrocarbon-bearing rocks having the nomenclature 
                      of ``shale'' located east of the Mississippi 
                      River; and
                          (iii) any remaining area in the central and 
                      western United States (including the State of 
                      Alaska) that contains oil shale and tar sands, as 
                      determined by the Secretary.
            (2) Use of state surveys and universities.--In carrying out 
        the assessment under paragraph (1), the Secretary may request 
        assistance from any State-administered geological survey or 
        university.

    (n) Land Exchanges.--
            (1) In general.--To facilitate the recovery of oil shale and 
        tar sands, especially in areas where Federal, State, and private 
        lands are intermingled, the Secretary shall consider the use of 
        land exchanges where appropriate and feasible to consolidate 
        land ownership and mineral interests into manageable areas.
            (2) Identification and priority of public lands.--The 
        Secretary shall identify public lands containing deposits of oil 
        shale or tar sands within the Green River, Piceance Creek, 
        Uintah, and Washakie geologic basins, and shall give priority to 
        implementing land exchanges within those basins. The Secretary 
        shall consider the geology of the respective basin in 
        determining the optimum size of the lands to be consolidated.
            (3) Compliance with section 206 of flpma.--A land exchange 
        undertaken in furtherance of this subsection shall be 
        implemented in accordance with section 206 of the Federal Land 
        Policy and Management Act of 1976 (43 U.S.C. 1716).

[[Page 119 STAT. 733]]

    (o) Royalty Rates for Leases.--The Secretary shall establish 
royalties, fees, rentals, bonus, or other payments for leases under this 
section that shall--
            (1) encourage development of the oil shale and tar sands 
        resource; and
            (2) ensure a fair return to the United States.

    (p) Heavy Oil Technical and Economic Assessment.--The Secretary of 
Energy shall update the 1987 technical and economic assessment of 
domestic heavy oil resources that was prepared by the Interstate Oil and 
Gas Compact Commission. Such an update should include all of North 
America and cover all unconventional oil, including heavy oil, tar sands 
(oil sands), and oil shale.
    (q) Procurement of Unconventional Fuels by the Department of 
Defense.--
            (1) In general.--Chapter 141 of title 10, United States 
        Code, is amended by inserting after section 2398 the following:

``Sec. 2398a. Procurement of fuel derived from coal, oil shale, and tar 
                        sands

    ``(a) Use of Fuel to Meet Department of Defense Needs.--The 
Secretary of Defense shall develop a strategy to use fuel produced, in 
whole or in part, from coal, oil shale, and tar sands (referred to in 
this section as a `covered fuel') that are extracted by either mining or 
in-situ methods and refined or otherwise processed in the United States 
in order to assist in meeting the fuel requirements of the Department of 
Defense when the Secretary determines that it is in the national 
interest.
    ``(b) Authority to Procure.--The Secretary of Defense may enter into 
1 or more contracts or other agreements (that meet the requirements of 
this section) to procure a covered fuel to meet 1 or more fuel 
requirements of the Department of Defense.
    ``(c) Clean Fuel Requirements.--A covered fuel may be procured under 
subsection (b) only if the covered fuel meets such standards for clean 
fuel produced from domestic sources as the Secretary of Defense shall 
establish for purposes of this section in consultation with the 
Department of Energy.
    ``(d) Multiyear Contract Authority.--Subject to applicable 
provisions of law, any contract or other agreement for the procurement 
of covered fuel under subsection (b) may be for 1 or more years at the 
election of the Secretary of Defense.
    ``(e) Fuel Source Analysis.--In order to facilitate the procurement 
by the Department of Defense of covered fuel under subsection (b), the 
Secretary of Defense may carry out a comprehensive assessment of current 
and potential locations in the United States for the supply of covered 
fuel to the Department.''.
            (2) Clerical amendment.--The table of sections for chapter 
        141 of title 10, United States Code, is amended by inserting 
        after the item relating to section 2398 the following:

``2398a. Procurement of fuel derived from coal, oil shale, and tar 
           sands.''.

    (r) State Water Rights.--Nothing in this section preempts or affects 
any State water law or interstate compact relating to water.
    (s) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

[[Page 119 STAT. 734]]

SEC. 370. FINGER LAKES WITHDRAWAL.

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

SEC. 371. <<NOTE: 30 USC 188 note.>> REINSTATEMENT OF LEASES.

    (a) Leases <<NOTE: Effective date. Termination date.>> Terminated 
for Certain Failure to Pay Rental.--Notwithstanding section 31(d)(2)(B) 
of the Mineral Leasing Act (30 U.S.C. 188(d)(2)(B)) as in effect before 
the effective date of this section, and notwithstanding the amendment 
made by subsection (b) of this section, the Secretary of the Interior 
may reinstate any oil and gas lease issued under that Act that was 
terminated for failure of a lessee to pay the full amount of rental on 
or before the anniversary date of the lease, during the period beginning 
on September 1, 2001, and ending on June 30, 2004, if--
            (1) <<NOTE: Deadline.>> not later than 120 days after the 
        date of enactment of this Act, the lessee--
                    (A) files a petition for reinstatement of the lease;
                    (B) complies with the conditions of section 31(e) of 
                the Mineral Leasing Act (30 U.S.C. 188(e)); and
                    (C) <<NOTE: Certification.>> certifies that the 
                lessee did not receive a notice of termination by the 
                date that was 13 months before the date of termination; 
                and
            (2) the land is available for leasing.

    (b) Deadline for Petitions, Generally.--Section 31(d)(2) of the 
Mineral Leasing Act (30 U.S.C. 188(d)(2)) is amended by striking 
subparagraphs (A) and (B) and inserting the following:
                    ``(A) with respect to any lease that terminated 
                under subsection (b) on or before the date of the 
                enactment of the Energy Policy Act of 2005, a petition 
                for reinstatement (together with the required back 
                rental and royalty accruing after the date of 
                termination) is filed on or before the earlier of--
                          ``(i) 60 days after the lessee receives from 
                      the Secretary notice of termination, whether by 
                      return of check or by any other form of actual 
                      notice; or
                          ``(ii) 15 months after the termination of the 
                      lease; or
                    ``(B) with respect to any lease that terminates 
                under subsection (b) after the date of the enactment of 
                the Energy Policy Act of 2005, a petition for 
                reinstatement (together with the required back rental 
                and royalty accruing after the date of termination) is 
                filed on or before the earlier of--
                          ``(i) 60 days after receipt of the notice of 
                      termination sent by the Secretary by certified 
                      mail to all lessees of record; or
                          ``(ii) 24 months after the termination of the 
                      lease.''.

SEC. 372. <<NOTE: 42 USC 15928.>> CONSULTATION REGARDING ENERGY RIGHTS-
            OF-WAY ON PUBLIC LAND.

    (a) Memorandum of Understanding.--

[[Page 119 STAT. 735]]

            (1) In general.--Not <<NOTE: Deadline.>> later than 6 months 
        after the date of enactment of this Act, the Secretary of 
        Energy, in consultation with the Secretary of the Interior, the 
        Secretary of Agriculture, and the Secretary of Defense with 
        respect to lands under their respective jurisdictions, shall 
        enter into a memorandum of understanding to coordinate all 
        applicable Federal authorizations and environmental reviews 
        relating to a proposed or existing utility facility. To the 
        maximum extent practicable under applicable law, the Secretary 
        of Energy shall, to ensure timely review and permit decisions, 
        coordinate such authorizations and reviews with any Indian 
        tribes, multi-State entities, and State agencies that are 
        responsible for conducting any separate permitting and 
        environmental reviews of the affected utility facility.
            (2) Contents.--The memorandum of understanding shall include 
        provisions that--
                    (A) establish--
                          (i) a unified right-of-way application form; 
                      and
                          (ii) an administrative procedure for 
                      processing right-of-way applications, including 
                      lines of authority, steps in application 
                      processing, and timeframes for application 
                      processing;
                    (B) provide for coordination of planning relating to 
                the granting of the rights-of-way;
                    (C) provide for an agreement among the affected 
                Federal agencies to prepare a single environmental 
                review document to be used as the basis for all Federal 
                authorization decisions; and
                    (D) provide for coordination of use of right-of-way 
                stipulations to achieve consistency.

    (b) Natural Gas Pipelines.--
            (1) In general.--With respect to permitting activities for 
        interstate natural gas pipelines, the May 2002 document entitled 
        ``Interagency Agreement On Early Coordination Of Required 
        Environmental And Historic Preservation Reviews Conducted In 
        Conjunction With The Issuance Of Authorizations To Construct And 
        Operate Interstate Natural Gas Pipelines Certificated By The 
        Federal Energy Regulatory Commission'' shall constitute 
        compliance with subsection (a).
            (2) Report.--
                    (A) In general.--Not later than 1 year after the 
                date of enactment of this Act, and every 2 years 
                thereafter, agencies that are signatories to the 
                document referred to in paragraph (1) shall transmit to 
                Congress a report on how the agencies under the 
                jurisdiction of the Secretaries are incorporating and 
                implementing the provisions of the document referred to 
                in paragraph (1).
                    (B) Contents.--The report shall address--
                          (i) efforts to implement the provisions of the 
                      document referred to in paragraph (1);
                          (ii) whether the efforts have had a 
                      streamlining effect;
                          (iii) further improvements to the permitting 
                      process of the agency; and
                          (iv) recommendations for inclusion of State 
                      and tribal governments in a coordinated permitting 
                      process.

[[Page 119 STAT. 736]]

    (c) Definition of Utility Facility.--In this section, the term 
``utility facility'' means any privately, publicly, or cooperatively 
owned line, facility, or system--
            (1) for the transportation of--
                    (A) oil, natural gas, synthetic liquid fuel, or 
                gaseous fuel;
                    (B) any refined product produced from oil, natural 
                gas, synthetic liquid fuel, or gaseous fuel; or
                    (C) products in support of the production of 
                material referred to in subparagraph (A) or (B);
            (2) for storage and terminal facilities in connection with 
        the production of material referred to in paragraph (1); or
            (3) for the generation, transmission, and distribution of 
        electric energy.

SEC. 373. SENSE OF CONGRESS REGARDING DEVELOPMENT OF MINERALS UNDER 
            PADRE ISLAND NATIONAL SEASHORE.

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

    (b) Sense of Congress.--It is the sense of Congress that with regard 
to Federal law, any regulation of the development of oil, gas, or other 
minerals in the subsurface of the lands constituting Padre Island 
National Seashore should be made as if those lands retained the status 
that the lands had on September 27, 1962.

SEC. 374. <<NOTE: Louisiana.>> LIVINGSTON PARISH MINERAL RIGHTS 
            TRANSFER.

    Section 102 of Public Law 102-562 (106 Stat. 4234) is amended by 
striking subsection (b) and inserting the following:
    ``(b) Reservation of Oil and Gas Rights and Conveyance of Remaining 
Mineral Rights.--Subject to the limitations set forth in subsection (c), 
the United States hereby excepts and reserves from the provisions of 
subsection (a), all rights to oil and gas underlying such lands, along 
with the right to explore

[[Page 119 STAT. 737]]

for, and produce the oil and gas under applicable law and such 
regulations as the Secretary of the Interior may prescribe. Not later 
than 180 days after the date of enactment of the Energy Policy Act of 
2005, the Secretary of the Interior shall convey the remaining mineral 
rights to the parties who as of the date of enactment of the Energy 
Policy Act of 2005 would be recognized as holders of a right, title, or 
interest to any portion of such minerals under the laws of the State of 
Louisiana, but for the interest of the United States in such minerals.
    ``(c) Oil and Gas <<NOTE: Deadlines.>> Resource Assessment and 
Report.--The United States Geological Survey shall conduct a resource 
assessment and publish a report of the findings of such resource 
assessment (`USGS Assessment and Report') within 1 year of the date of 
enactment of the Energy Policy Act of 2005. The USGS Assessment and 
Report shall provide an assessment of all oil and gas resources 
underlying the certain lands in Livingston Parish, Louisiana, as 
described in section 103 (the `Livingston Parish lands'). Upon a finding 
by the Secretary of the Interior based upon the USGS Assessment and 
Report that it is unlikely that economically recoverable oil and gas 
resources are present, the Secretary shall convey all rights to oil and 
gas underlying such lands to the recipients, or their successors, heirs, 
or assigns, of the conveyances under subsection (b). Such further 
conveyances shall be made within 180 days after a finding by the 
Secretary that it is unlikely that economically recoverable oil and gas 
resources are present.''.

                        Subtitle G--Miscellaneous

SEC. 381. DEADLINE FOR DECISION ON APPEALS OF CONSISTENCY DETERMINATION 
            UNDER THE COASTAL ZONE MANAGEMENT ACT OF 1972.

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


                       ``appeals to the secretary


    ``Sec. 319. (a) Notice.--Not <<NOTE: Federal 
Register, publication.>> later than 30 days after the date of the filing 
of an appeal to the Secretary of a consistency determination under 
section 307, the Secretary shall publish an initial notice in the 
Federal Register.

    ``(b) Closure of Record.--
            ``(1) In general.--Not later than the end of the 160-day 
        period beginning on the date of publication of an initial notice 
        under subsection (a), except as provided in paragraph (3), the 
        Secretary shall immediately close the decision record and 
        receive no more filings on the appeal.
            ``(2) Notice.--After <<NOTE: Federal 
        Register, publication.>> closing the administrative record, the 
        Secretary shall immediately publish a notice in the Federal 
        Register that the administrative record has been closed.
            ``(3) Exception.--
                    ``(A) In general.--Subject to subparagraph (B), 
                during the 160-day period described in paragraph (1), 
                the Secretary may stay the closing of the decision 
                record--
                          ``(i) for a specific period mutually agreed to 
                      in writing by the appellant and the State agency; 
                      or
                          ``(ii) as the Secretary determines necessary 
                      to receive, on an expedited basis--

[[Page 119 STAT. 738]]

                                    ``(I) any supplemental information 
                                specifically requested by the Secretary 
                                to complete a consistency review under 
                                this Act; or
                                    ``(II) any clarifying information 
                                submitted by a party to the proceeding 
                                related to information in the 
                                consolidated record compiled by the lead 
                                Federal permitting agency.
                    ``(B) Applicability.--The Secretary may only stay 
                the 160-day period described in paragraph (1) for a 
                period not to exceed 60 days.

    ``(c) Deadline for Decision.--
            ``(1) In general.--Not <<NOTE: Notices. Federal 
        Register, publication.>> later than 60 days after the date of 
        publication of a Federal Register notice stating when the 
        decision record for an appeal has been closed, the Secretary 
        shall issue a decision or publish a notice in the Federal 
        Register explaining why a decision cannot be issued at that 
        time.
            ``(2) Subsequent decision.--Not later than 15 days after the 
        date of publication of a Federal Register notice explaining why 
        a decision cannot be issued within the 60-day period, the 
        Secretary shall issue a decision.''.

SEC. 382. <<NOTE: 16 USC 1466.>> APPEALS RELATING TO OFFSHORE MINERAL 
            DEVELOPMENT.

    For any Federal administrative agency proceeding that is an appeal 
or review under section 319 of the Coastal Zone Management Act of 1972 
(16 U.S.C. 1465), as amended by this Act, related to any Federal 
authorization for the permitting, approval, or other authorization of an 
energy project, the lead Federal permitting agency for the project 
shall, with the cooperation of Federal and State administrative 
agencies, maintain a consolidated record of all decisions made or 
actions taken by the lead agency or by another Federal or State 
administrative agency or officer. Such record shall be the initial 
record for appeals or reviews under that Act, provided that the record 
may be supplemented as expressly provided pursuant to section 319 of 
that Act.

SEC. 383. ROYALTY PAYMENTS UNDER LEASES UNDER THE OUTER CONTINENTAL 
            SHELF LANDS ACT.

    (a) Royalty Relief.--
            (1) In general.--For purposes of providing compensation for 
        lessees and a State for which amounts are authorized by section 
        6004(c) of the Oil Pollution Act of 1990 (Public Law 101-380), a 
        lessee may withhold from payment any royalty due and owing to 
        the United States under any leases under the Outer Continental 
        Shelf Lands Act (43 U.S.C. 1301 et seq.) for offshore oil or gas 
        production from a covered lease tract if, on or before the date 
        that the payment is due and payable to the United States, the 
        lessee makes a payment to the State of 44 cents for every $1 of 
        royalty withheld.
            (2) Treatment of amounts.--Any royalty withheld by a lessee 
        in accordance with this section (including any portion thereof 
        that is paid to the State under paragraph (1)) shall be treated 
        as paid for purposes of satisfaction of the royalty obligations 
        of the lessee to the United States.
            (3) Certification of withheld amounts.--The Secretary of the 
        Treasury shall--
                    (A) determine the amount of royalty withheld by a 
                lessee under this section; and

[[Page 119 STAT. 739]]

                    (B) <<NOTE: Publication.>> promptly publish a 
                certification when the total amount of royalty withheld 
                by the lessee under this section is equal to--
                          (i) the dollar amount stated at page 47 of 
                      Senate Report number 101-534, which is designated 
                      therein as the total drainage claim for the West 
                      Delta field; plus
                          (ii) interest as described at page 47 of that 
                      Report.

    (b) Period of Royalty Relief.--Subsection 
(a) <<NOTE: Applicability. Effective date. Termination date.>> shall 
apply to royalty amounts that are due and payable in the period 
beginning on October 1, 2006, and ending on the date on which the 
Secretary of the Treasury publishes a certification under subsection 
(a)(3)(B).

    (c) Definitions.--As used in this section:
            (1) Covered lease tract.--The term ``covered lease tract'' 
        means a leased tract (or portion of a leased tract)--
                    (A) lying seaward of the zone defined and governed 
                by section 8(g) of the Outer Continental Shelf Lands Act 
                (43 U.S.C. 1337(g)); or
                    (B) lying within such zone but to which such section 
                does not apply.
            (2) Lessee.--The term ``lessee''--
                    (A) means a person or entity that, on the date of 
                the enactment of the Oil Pollution Act of 1990, was a 
                lessee referred to in section 6004(c) of that Act (as in 
                effect on that date of the enactment), but did not hold 
                lease rights in Federal offshore lease OCS-G-5669; and
                    (B) includes successors and affiliates of a person 
                or entity described in subparagraph (A).

SEC. 384. COASTAL IMPACT ASSISTANCE PROGRAM.

    Section 31 of the Outer Continental Shelf Lands Act (43 U.S.C. 
1356a) is amended to read as follows:

``SEC. 31. COASTAL IMPACT ASSISTANCE PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Coastal political subdivision.--The term `coastal 
        political subdivision' means a political subdivision of a 
        coastal State any part of which political subdivision is--
                    ``(A) within the coastal zone (as defined in section 
                304 of the Coastal Zone Management Act of 1972 (16 
                U.S.C. 1453)) of the coastal State as of the date of 
                enactment of the Energy Policy Act of 2005; and
                    ``(B) not more than 200 nautical miles from the 
                geographic center of any leased tract.
            ``(2) Coastal population.--The term `coastal population' 
        means the population, as determined by the most recent official 
        data of the Census Bureau, of each political subdivision any 
        part of which lies within the designated coastal boundary of a 
        State (as defined in a State's coastal zone management program 
        under the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et 
        seq.)).
            ``(3) Coastal state.--The term `coastal State' has the 
        meaning given the term in section 304 of the Coastal Zone 
        Management Act of 1972 (16 U.S.C. 1453).
            ``(4) Coastline.--The term `coastline' has the meaning given 
        the term `coast line' in section 2 of the Submerged Lands Act 
        (43 U.S.C. 1301).

[[Page 119 STAT. 740]]

            ``(5) Distance.--The term `distance' means the minimum great 
        circle distance, measured in statute miles.
            ``(6) Leased tract.--The term `leased tract' means a tract 
        that is subject to a lease under section 6 or 8 for the purpose 
        of drilling for, developing, and producing oil or natural gas 
        resources.
            ``(7) Leasing moratoria.--The term `leasing moratoria' means 
        the prohibitions on preleasing, leasing, and related activities 
        on any geographic area of the outer Continental Shelf as 
        contained in sections 107 through 109 of division E of the 
        Consolidated Appropriations Act, 2005 (Public Law 108-447; 118 
        Stat. 3063).
            ``(8) Political subdivision.--The term `political 
        subdivision' means the local political jurisdiction immediately 
        below the level of State government, including counties, 
        parishes, and boroughs.
            ``(9) Producing state.--
                    ``(A) In general.--The term `producing State' means 
                a coastal State that has a coastal seaward boundary 
                within 200 nautical miles of the geographic center of a 
                leased tract within any area of the outer Continental 
                Shelf.
                    ``(B) Exclusion.--The term `producing State' does 
                not include a producing State, a majority of the 
                coastline of which is subject to leasing moratoria, 
                unless production was occurring on January 1, 2005, from 
                a lease within 10 nautical miles of the coastline of 
                that State.
            ``(10) Qualified outer continental shelf revenues.--
                    ``(A) In general.--The term `qualified Outer 
                Continental Shelf revenues' means all amounts received 
                by the United States from each leased tract or portion 
                of a leased tract--
                          ``(i) lying--
                                    ``(I) seaward of the zone covered by 
                                section 8(g); or
                                    ``(II) within that zone, but to 
                                which section 8(g) does not apply; and
                          ``(ii) the geographic center of which lies 
                      within a distance of 200 nautical miles from any 
                      part of the coastline of any coastal State.
                    ``(B) Inclusions.--The term `qualified Outer 
                Continental Shelf revenues' includes bonus bids, rents, 
                royalties (including payments for royalty taken in kind 
                and sold), net profit share payments, and related late-
                payment interest from natural gas and oil leases issued 
                under this Act.
                    ``(C) Exclusion.--The term `qualified Outer 
                Continental Shelf revenues' does not include any 
                revenues from a leased tract or portion of a leased 
                tract that is located in a geographic area subject to a 
                leasing moratorium on January 1, 2005, unless the lease 
                was in production on January 1, 2005.

    ``(b) Payments to Producing States and Coastal Political 
Subdivisions.--
            ``(1) In general.--The Secretary shall, without further 
        appropriation, disburse to producing States and coastal 
        political subdivisions in accordance with this section 
        $250,000,000 for each of fiscal years 2007 through 2010.

[[Page 119 STAT. 741]]

            ``(2) Disbursement.--In each fiscal year, the Secretary 
        shall disburse to each producing State for which the Secretary 
        has approved a plan under subsection (c), and to coastal 
        political subdivisions under paragraph (4), such funds as are 
        allocated to the producing State or coastal political 
        subdivision, respectively, under this section for the fiscal 
        year.
            ``(3) Allocation among producing states.--
                    ``(A) In general.--Except as provided in 
                subparagraph (C) and subject to subparagraph (D), the 
                amounts available under paragraph (1) shall be allocated 
                to each producing State based on the ratio that--
                          ``(i) the amount of qualified outer 
                      Continental Shelf revenues generated off the 
                      coastline of the producing State; bears to
                          ``(ii) the amount of qualified outer 
                      Continental Shelf revenues generated off the 
                      coastline of all producing States.
                    ``(B) Amount of outer continental shelf revenues.--
                For purposes of subparagraph (A)--
                          ``(i) the amount of qualified outer 
                      Continental Shelf revenues for each of fiscal 
                      years 2007 and 2008 shall be determined using 
                      qualified outer Continental Shelf revenues 
                      received for fiscal year 2006; and
                          ``(ii) the amount of qualified outer 
                      Continental Shelf revenues for each of fiscal 
                      years 2009 and 2010 shall be determined using 
                      qualified outer Continental Shelf revenues 
                      received for fiscal year 2008.
                    ``(C) Multiple producing states.--In a case in which 
                more than one producing State is located within 200 
                nautical miles of any portion of a leased tract, the 
                amount allocated to each producing State for the leased 
                tract shall be inversely proportional to the distance 
                between--
                          ``(i) the nearest point on the coastline of 
                      the producing State; and
                          ``(ii) the geographic center of the leased 
                      tract.
                    ``(D) Minimum allocation.--The amount allocated to a 
                producing State under subparagraph (A) shall be at least 
                1 percent of the amounts available under paragraph (1).
            ``(4) Payments to coastal political subdivisions.--
                    ``(A) In general.--The Secretary shall pay 35 
                percent of the allocable share of each producing State, 
                as determined under paragraph (3) to the coastal 
                political subdivisions in the producing State.
                    ``(B) Formula.--Of the amount paid by the Secretary 
                to coastal political subdivisions under subparagraph 
                (A)--
                          ``(i) 25 percent shall be allocated to each 
                      coastal political subdivision in the proportion 
                      that--
                                    ``(I) the coastal population of the 
                                coastal political subdivision; bears to
                                    ``(II) the coastal population of all 
                                coastal political subdivisions in the 
                                producing State;
                          ``(ii) 25 percent shall be allocated to each 
                      coastal political subdivision in the proportion 
                      that--
                                    ``(I) the number of miles of 
                                coastline of the coastal political 
                                subdivision; bears to

[[Page 119 STAT. 742]]

                                    ``(II) the number of miles of 
                                coastline of all coastal political 
                                subdivisions in the producing State; and
                          ``(iii) 50 percent shall be allocated in 
                      amounts that are inversely proportional to the 
                      respective distances between the points in each 
                      coastal political subdivision that are closest to 
                      the geographic center of each leased tract, as 
                      determined by the Secretary.
                    ``(C) Exception for the state of louisiana.--For the 
                purposes of subparagraph (B)(ii), the coastline for 
                coastal political subdivisions in the State of Louisiana 
                without a coastline shall be considered to be \1/3\ the 
                average length of the coastline of all coastal political 
                subdivisions with a coastline in the State of Louisiana.
                    ``(D) Exception for the state of alaska.--For the 
                purposes of carrying out subparagraph (B)(iii) in the 
                State of Alaska, the amounts allocated shall be divided 
                equally among the two coastal political subdivisions 
                that are closest to the geographic center of a leased 
                tract.
                    ``(E) Exclusion of certain leased tracts.--For 
                purposes of subparagraph (B)(iii), a leased tract or 
                portion of a leased tract shall be excluded if the tract 
                or portion of a leased tract is located in a geographic 
                area subject to a leasing moratorium on January 1, 2005, 
                unless the lease was in production on that date.
            ``(5) No approved plan.--
                    ``(A) In general.--Subject to subparagraph (B) and 
                except as provided in subparagraph (C), in a case in 
                which any amount allocated to a producing State or 
                coastal political subdivision under paragraph (4) or (5) 
                is not disbursed because the producing State does not 
                have in effect a plan that has been approved by the 
                Secretary under subsection (c), the Secretary shall 
                allocate the undisbursed amount equally among all other 
                producing States.
                    ``(B) Retention of allocation.--The Secretary shall 
                hold in escrow an undisbursed amount described in 
                subparagraph (A) until such date as the final appeal 
                regarding the disapproval of a plan submitted under 
                subsection (c) is decided.
                    ``(C) Waiver.--The Secretary may waive subparagraph 
                (A) with respect to an allocated share of a producing 
                State and hold the allocable share in escrow if the 
                Secretary determines that the producing State is making 
                a good faith effort to develop and submit, or update, a 
                plan in accordance with subsection (c).

    ``(c) Coastal Impact Assistance Plan.--
            ``(1) Submission of state plans.--
                    ``(A) In general.--Not <<NOTE: Deadline.>> later 
                than July 1, 2008, the Governor of a producing State 
                shall submit to the Secretary a coastal impact 
                assistance plan.
                    ``(B) Public participation.--In carrying out 
                subparagraph (A), the Governor shall solicit local input 
                and provide for public participation in the development 
                of the plan.
            ``(2) Approval.--
                    ``(A) In general.--The Secretary shall approve a 
                plan of a producing State submitted under paragraph (1) 
                before disbursing any amount to the producing State, or 
                to a

[[Page 119 STAT. 743]]

                coastal political subdivision located in the producing 
                State, under this section.
                    ``(B) Components.--The Secretary shall approve a 
                plan submitted under paragraph (1) if--
                          ``(i) the Secretary determines that the plan 
                      is consistent with the uses described in 
                      subsection (d); and
                          ``(ii) the plan contains--
                                    ``(I) the name of the State agency 
                                that will have the authority to 
                                represent and act on behalf of the 
                                producing State in dealing with the 
                                Secretary for purposes of this section;
                                    ``(II) a program for the 
                                implementation of the plan that 
                                describes how the amounts provided under 
                                this section to the producing State will 
                                be used;
                                    ``(III) for each coastal political 
                                subdivision that receives an amount 
                                under this section--
                                            ``(aa) the name of a contact 
                                        person; and
                                            ``(bb) a description of how 
                                        the coastal political 
                                        subdivision will use amounts 
                                        provided under this section;
                                    ``(IV) <<NOTE: Certification.>> a 
                                certification by the Governor that ample 
                                opportunity has been provided for public 
                                participation in the development and 
                                revision of the plan; and
                                    ``(V) a description of measures that 
                                will be taken to determine the 
                                availability of assistance from other 
                                relevant Federal resources and programs.
            ``(3) Amendment.--Any amendment to a plan submitted under 
        paragraph (1) shall be--
                    ``(A) developed in accordance with this subsection; 
                and
                    ``(B) submitted to the Secretary for approval or 
                disapproval under paragraph (4).
            ``(4) Procedure.--Not <<NOTE: Deadline.>> later than 90 days 
        after the date on which a plan or amendment to a plan is 
        submitted under paragraph (1) or (3), the Secretary shall 
        approve or disapprove the plan or amendment.

    ``(d) Authorized Uses.--
            ``(1) In general.--A producing State or coastal political 
        subdivision shall use all amounts received under this section, 
        including any amount deposited in a trust fund that is 
        administered by the State or coastal political subdivision and 
        dedicated to uses consistent with this section, in accordance 
        with all applicable Federal and State laws, only for one or more 
        of the following purposes:
                    ``(A) Projects and activities for the conservation, 
                protection, or restoration of coastal areas, including 
                wetland.
                    ``(B) Mitigation of damage to fish, wildlife, or 
                natural resources.
                    ``(C) Planning assistance and the administrative 
                costs of complying with this section.
                    ``(D) Implementation of a federally-approved marine, 
                coastal, or comprehensive conservation management plan.
                    ``(E) Mitigation of the impact of outer Continental 
                Shelf activities through funding of onshore 
                infrastructure projects and public service needs.

[[Page 119 STAT. 744]]

            ``(2) Compliance with authorized uses.--If the Secretary 
        determines that any expenditure made by a producing State or 
        coastal political subdivision is not consistent with this 
        subsection, the Secretary shall not disburse any additional 
        amount under this section to the producing State or the coastal 
        political subdivision until such time as all amounts obligated 
        for unauthorized uses have been repaid or reobligated for 
        authorized uses.
            ``(3) Limitation.--Not more than 23 percent of amounts 
        received by a producing State or coastal political subdivision 
        for any 1 fiscal year shall be used for the purposes described 
        in subparagraphs (C) and (E) of paragraph (1).''.

SEC. 385. STUDY OF AVAILABILITY OF SKILLED WORKERS.

    (a) In General.--The <<NOTE: Contracts.>> Secretary shall enter into 
an arrangement with the National Academy of Sciences under which the 
National Academy of Sciences shall conduct a study of the short-term and 
long-term availability of skilled workers to meet the energy and mineral 
security requirements of the United States.

    (b) Inclusions.--The study shall include an analysis of--
            (1) the need for and availability of workers for the oil, 
        gas, and mineral industries;
            (2) the availability of skilled labor at both entry level 
        and more senior levels; and
            (3) recommendations for future actions needed to meet future 
        labor requirements.

    (c) Report.--Not later than 2 years after the date of enactment of 
this Act, the Secretary shall submit to Congress a report that describes 
the results of the study.

SEC. 386. <<NOTE: 42 USC 15941.>> GREAT LAKES OIL AND GAS DRILLING BAN.

    No Federal or State permit or lease shall be issued for new oil and 
gas slant, directional, or offshore drilling in or under one or more of 
the Great Lakes.

SEC. 387. <<NOTE: Deadline. 42 USC 13368 note.>> FEDERAL COALBED METHANE 
            REGULATION.

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

SEC. 388. ALTERNATE ENERGY-RELATED USES ON THE OUTER CONTINENTAL SHELF.

    (a) Amendment to Outer Continental Shelf Lands Act.--Section 8 of 
the Outer Continental Shelf Lands Act (43 U.S.C. 1337) is amended by 
adding at the end the following:
    ``(p) Leases, Easements, or Rights-of-way for Energy and Related 
Purposes.--
            ``(1) In general.--The Secretary, in consultation with the 
        Secretary of the Department in which the Coast Guard is 
        operating and other relevant departments and agencies of the 
        Federal Government, may grant a lease, easement, or right-of-way 
        on the outer Continental Shelf for activities not otherwise 
        authorized in this Act, the Deepwater Port Act of 1974 (33 
        U.S.C. 1501 et seq.), the Ocean Thermal Energy Conversion

[[Page 119 STAT. 745]]

        Act of 1980 (42 U.S.C. 9101 et seq.), or other applicable law, 
        if those activities--
                    ``(A) support exploration, development, production, 
                or storage of oil or natural gas, except that a lease, 
                easement, or right-of-way shall not be granted in an 
                area in which oil and gas preleasing, leasing, and 
                related activities are prohibited by a moratorium;
                    ``(B) support transportation of oil or natural gas, 
                excluding shipping activities;
                    ``(C) produce or support production, transportation, 
                or transmission of energy from sources other than oil 
                and gas; or
                    ``(D) use, for energy-related purposes or for other 
                authorized marine-related purposes, facilities currently 
                or previously used for activities authorized under this 
                Act, except that any oil and gas energy-related uses 
                shall not be authorized in areas in which oil and gas 
                preleasing, leasing, and related activities are 
                prohibited by a moratorium.
            ``(2) Payments and revenues.--(A) The Secretary shall 
        establish royalties, fees, rentals, bonuses, or other payments 
        to ensure a fair return to the United States for any lease, 
        easement, or right-of-way granted under this subsection.
            ``(B) The Secretary shall provide for the payment of 27 
        percent of the revenues received by the Federal Government as a 
        result of payments under this section from projects that are 
        located wholly or partially within the area extending three 
        nautical miles seaward of State submerged 
        lands. <<NOTE: Regulations. Deadline.>> Payments shall be made 
        based on a formula established by the Secretary by rulemaking no 
        later than 180 days after the date of enactment of this section 
        that provides for equitable distribution, based on proximity to 
        the project, among coastal states that have a coastline that is 
        located within 15 miles of the geographic center of the project.
            ``(3) Competitive or noncompetitive basis.--Except with 
        respect to projects that meet the criteria established under 
        section 388(d) of the Energy Policy Act of 2005, the Secretary 
        shall issue a lease, easement, or right-of-way under paragraph 
        (1) on a competitive basis unless the Secretary determines after 
        public notice of a proposed lease, easement, or right-of-way 
        that there is no competitive interest.
            ``(4) Requirements.--The Secretary shall ensure that any 
        activity under this subsection is carried out in a manner that 
        provides for--
                    ``(A) safety;
                    ``(B) protection of the environment;
                    ``(C) prevention of waste;
                    ``(D) conservation of the natural resources of the 
                outer Continental Shelf;
                    ``(E) coordination with relevant Federal agencies;
                    ``(F) protection of national security interests of 
                the United States;
                    ``(G) protection of correlative rights in the outer 
                Continental Shelf;
                    ``(H) a fair return to the United States for any 
                lease, easement, or right-of-way under this subsection;

[[Page 119 STAT. 746]]

                    ``(I) prevention of interference with reasonable 
                uses (as determined by the Secretary) of the exclusive 
                economic zone, the high seas, and the territorial seas;
                    ``(J) consideration of--
                          ``(i) the location of, and any schedule 
                      relating to, a lease, easement, or right-of-way 
                      for an area of the outer Continental Shelf; and
                          ``(ii) any other use of the sea or seabed, 
                      including use for a fishery, a sealane, a 
                      potential site of a deepwater port, or navigation;
                    ``(K) public notice and comment on any proposal 
                submitted for a lease, easement, or right-of-way under 
                this subsection; and
                    ``(L) oversight, inspection, research, monitoring, 
                and enforcement relating to a lease, easement, or right-
                of-way under this subsection.
            ``(5) Lease duration, suspension, and cancellation.--The 
        Secretary shall provide for the duration, issuance, transfer, 
        renewal, suspension, and cancellation of a lease, easement, or 
        right-of-way under this subsection.
            ``(6) Security.--The Secretary shall require the holder of a 
        lease, easement, or right-of-way granted under this subsection 
        to--
                    ``(A) furnish a surety bond or other form of 
                security, as prescribed by the Secretary;
                    ``(B) comply with such other requirements as the 
                Secretary considers necessary to protect the interests 
                of the public and the United States; and
                    ``(C) provide for the restoration of the lease, 
                easement, or right-of-way.
            ``(7) Coordination and consultation with affected state and 
        local governments.--The Secretary shall provide for coordination 
        and consultation with the Governor of any State or the executive 
        of any local government that may be affected by a lease, 
        easement, or right-of-way under this subsection.
            ``(8) Regulations.--Not <<NOTE: Deadline.>> later than 270 
        days after the date of enactment of the Energy Policy Act of 
        2005, the Secretary, in consultation with the Secretary of 
        Defense, the Secretary of the Department in which the Coast 
        Guard is operating, the Secretary of Commerce, heads of other 
        relevant departments and agencies of the Federal Government, and 
        the Governor of any affected State, shall issue any necessary 
        regulations to carry out this subsection.
            ``(9) Effect of subsection.--Nothing in this subsection 
        displaces, supersedes, limits, or modifies the jurisdiction, 
        responsibility, or authority of any Federal or State agency 
        under any other Federal law.
            ``(10) Applicability.--This subsection does not apply to any 
        area on the outer Continental Shelf within the exterior 
        boundaries of any unit of the National Park System, National 
        Wildlife Refuge System, or National Marine Sanctuary System, or 
        any National Monument.''.

    (b) Coordinated <<NOTE: 43 USC 1337 note.>> OCS Mapping 
Initiative.--
            (1) In general.--The Secretary of the Interior, in 
        cooperation with the Secretary of Commerce, the Commandant of 
        the Coast Guard, and the Secretary of Defense, shall establish

[[Page 119 STAT. 747]]

        an interagency comprehensive digital mapping initiative for the 
        outer Continental Shelf to assist in decisionmaking relating to 
        the siting of activities under subsection (p) of section 8 of 
        the Outer Continental Shelf Lands Act (43 U.S.C. 1337) (as added 
        by subsection (a)).
            (2) Use of data.--The mapping initiative shall use, and 
        develop procedures for accessing, data collected before the date 
        on which the mapping initiative is established, to the maximum 
        extent practicable.
            (3) Inclusions.--Mapping carried out under the mapping 
        initiative shall include an indication of the locations on the 
        outer Continental Shelf of--
                    (A) Federally-permitted activities;
                    (B) obstructions to navigation;
                    (C) submerged cultural resources;
                    (D) undersea cables;
                    (E) offshore aquaculture projects; and
                    (F) any area designated for the purpose of safety, 
                national security, environmental protection, or 
                conservation and management of living marine resources.

    (c) Conforming Amendment.--Section 8 of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1337) is amended by striking the section heading 
and inserting the following: ``Leases, Easements, and Rights-of-way on 
the Outer Continental 
Shelf.--''.
    (d) Savings Provision.--Nothing <<NOTE: 43 USC 1337 note.>> in the 
amendment made by subsection (a) requires the resubmittal of any 
document that was previously submitted or the reauthorization of any 
action that was previously authorized with respect to a project for 
which, before the date of enactment of this Act--
            (1) an offshore test facility has been constructed; or
            (2) a request for a proposal has been issued by a public 
        authority.

    (e) State <<NOTE: 43 USC 1337 note.>> Claims to Jurisdiction Over 
Submerged Lands.--Nothing in this section shall be construed to alter, 
limit, or modify any claim of any State to any jurisdiction over, or any 
right, title, or interest in, any submerged lands.

SEC. 389. OIL SPILL RECOVERY INSTITUTE.

    Title V of the Oil Pollution Act of 1990 (33 U.S.C. 2731 et seq.) is 
amended--
            (1) <<NOTE: 33 USC 2731.>> in section 5001(i), by striking 
        ``September 30, 2012'' and inserting ``1 year after the date on 
        which the Secretary, in consultation with the Secretary of the 
        Interior, determines that oil and gas exploration, development, 
        and production in the State of Alaska have ceased''; and
            (2) <<NOTE: 33 USC 2736.>> in section 5006(c), by striking 
        ``October 1, 2012'' and inserting ``1 year after the date on 
        which the Secretary, in consultation with the Secretary of the 
        Interior, determines that oil and gas exploration, development, 
        and production in the State of Alaska have ceased,''.

SEC. 390. <<NOTE: 42 USC 15942.>> NEPA REVIEW.

    (a) NEPA Review.--Action by the Secretary of the Interior in 
managing the public lands, or the Secretary of Agriculture in managing 
National Forest System Lands, with respect to any of the activities 
described in subsection (b) shall be subject to a rebuttable presumption 
that the use of a categorical exclusion under

[[Page 119 STAT. 748]]

the National Environmental Policy Act of 1969 (NEPA) would apply if the 
activity is conducted pursuant to the Mineral Leasing Act for the 
purpose of exploration or development of oil or gas.
    (b) Activities Described.--The activities referred to in subsection 
(a) are the following:
            (1) Individual surface disturbances of less than 5 acres so 
        long as the total surface disturbance on the lease is not 
        greater than 150 acres and site-specific analysis in a document 
        prepared pursuant to NEPA has been previously completed.
            (2) Drilling an oil or gas well at a location or well pad 
        site at which drilling has occurred previously within 5 years 
        prior to the date of spudding the well.
            (3) Drilling an oil or gas well within a developed field for 
        which an approved land use plan or any environmental document 
        prepared pursuant to NEPA analyzed such drilling as a reasonably 
        foreseeable activity, so long as such plan or document was 
        approved within 5 years prior to the date of spudding the well.
            (4) Placement of a pipeline in an approved right-of-way 
        corridor, so long as the corridor was approved within 5 years 
        prior to the date of placement of the pipeline.
            (5) Maintenance of a minor activity, other than any 
        construction or major renovation or a building or facility.

                   Subtitle H--Refinery Revitalization

SEC. 391. <<NOTE: 42 USC 15951.>> FINDINGS AND DEFINITIONS.

    (a) Findings.--Congress finds that--
            (1) it serves the national interest to increase petroleum 
        refining capacity for gasoline, heating oil, diesel fuel, jet 
        fuel, kerosene, and petrochemical feedstocks wherever located 
        within the United States, to bring more supply to the markets 
        for the use of the American people;
            (2) United States demand for refined petroleum products 
        currently exceeds the country's petroleum refining capacity to 
        produce such products;
            (3) this excess demand has been met with increased imports;
            (4) due to lack of capacity, refined petroleum product 
        imports are expected to grow from 7.9 percent to 10.7 percent of 
        total refined product by 2025;
            (5) refiners are still subject to significant environmental 
        and other regulations and face several new requirements under 
        the Clean Air Act (42 U.S.C. 7401 et seq.) over the next decade; 
        and
            (6) better coordination of Federal and State regulatory 
        reviews may help facilitate siting and construction of new 
        refineries to meet the demand in the United States for refined 
        products.

    (b) Definitions.--In this subtitle:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) State.--The term ``State'' means--
                    (A) a State;
                    (B) the Commonwealth of Puerto Rico; and

[[Page 119 STAT. 749]]

                    (C) any other territory or possession of the United 
                States.

SEC. 392. <<NOTE: 42 USC 15952.>> FEDERAL-STATE REGULATORY COORDINATION 
            AND ASSISTANCE.

    (a) In General.--At the request of the Governor of a State, the 
Administrator may enter into a refinery permitting cooperative agreement 
with the State, under which each party to the agreement identifies 
steps, including timelines, that it will take to streamline the 
consideration of Federal and State environmental permits for a new 
refinery.
    (b) Authority Under Agreement.--The Administrator shall be 
authorized to--
            (1) accept from a refiner a consolidated application for all 
        permits required from the Environmental Protection Agency, to 
        the extent consistent with other applicable law;
            (2) enter into memoranda of agreement with other Federal 
        agencies to coordinate consideration of refinery applications 
        and permits among Federal agencies; and
            (3) enter into memoranda of agreement with a State, under 
        which Federal and State review of refinery permit applications 
        will be coordinated and concurrently considered, to the extent 
        practicable.

    (c) State Assistance.--The Administrator is authorized to provide 
financial assistance to State governments to facilitate the hiring of 
additional personnel with expertise in fields relevant to consideration 
of refinery permits.
    (d) Other Assistance.--The Administrator is authorized to provide 
technical, legal, or other assistance to State governments to facilitate 
their review of applications to build new refineries.

                             TITLE IV--COAL

                 Subtitle A--Clean Coal Power Initiative

SEC. 401. <<NOTE: 42 USC 15961.>> AUTHORIZATION OF APPROPRIATIONS.

    (a) Clean Coal Power Initiative.--There are authorized to be 
appropriated to the Secretary to carry out the activities authorized by 
this subtitle $200,000,000 for each of fiscal years 2006 through 2014, 
to remain available until expended.
    (b) Report.--The Secretary shall submit to Congress the report 
required by this subsection not later than March 31, 2007. The report 
shall include, with respect to subsection (a), a plan containing--
            (1) a detailed assessment of whether the aggregate funding 
        levels provided under subsection (a) are the appropriate funding 
        levels for that program;
            (2) a detailed description of how proposals will be 
        solicited and evaluated, including a list of all activities 
        expected to be undertaken;
            (3) a detailed list of technical milestones for each coal 
        and related technology that will be pursued; and
            (4) a detailed description of how the program will avoid 
        problems enumerated in Government Accountability Office

[[Page 119 STAT. 750]]

        reports on the Clean Coal Technology Program, including problems 
        that have resulted in unspent funds and projects that failed 
        either financially or scientifically.

SEC. 402. <<NOTE: 42 USC 15962.>> PROJECT CRITERIA.

    (a) In General.--To be eligible to receive assistance under this 
subtitle, a project shall advance efficiency, environmental performance, 
and cost competitiveness well beyond the level of technologies that are 
in commercial service or have been demonstrated on a scale that the 
Secretary determines is sufficient to demonstrate that commercial 
service is viable as of the date of enactment of this Act.
    (b) Technical Criteria for Clean Coal Power Initiative.--
            (1) Gasification projects.--
                    (A) In general.--In allocating the funds made 
                available under section 401(a), the Secretary shall 
                ensure that at least 70 percent of the funds are used 
                only to fund projects on coal-based gasification 
                technologies, including--
                          (i) gasification combined cycle;
                          (ii) gasification fuel cells and turbine 
                      combined cycle;
                          (iii) gasification coproduction;
                          (iv) hybrid gasification and combustion; and
                          (v) other advanced coal based technologies 
                      capable of producing a concentrated stream of 
                      carbon dioxide.
                    (B) Technical milestones.--
                          (i) Periodic determination.--
                                    (I) In general.--The Secretary shall 
                                periodically set technical milestones 
                                specifying the emission and thermal 
                                efficiency levels that coal gasification 
                                projects under this subtitle shall be 
                                designed, and reasonably expected, to 
                                achieve.
                                    (II) Prescriptive milestones.--The 
                                technical milestones shall become more 
                                prescriptive during the period of the 
                                clean coal power initiative.
                          (ii) 2020 goals.--The Secretary shall 
                      establish the periodic milestones so as to achieve 
                      by the year 2020 coal gasification projects able--
                                    (I) to remove at least 99 percent of 
                                sulfur dioxide;
                                    (II) to emit not more than .05 lbs 
                                of NO<INF>x</INF> per million Btu;
                                    (III) to achieve at least 95 percent 
                                reductions in mercury emissions; and
                                    (IV) to achieve a thermal efficiency 
                                of at least--
                                            (aa) 50 percent for coal of 
                                        more than 9,000 Btu;
                                            (bb) 48 percent for coal of 
                                        7,000 to 9,000 Btu; and
                                            (cc) 46 percent for coal of 
                                        less than 7,000 Btu.
            (2) Other projects.--
                    (A) Allocation of funds.--The Secretary shall ensure 
                that up to 30 percent of the funds made available under 
                section 401(a) are used to fund projects other than 
                those described in paragraph (1).

[[Page 119 STAT. 751]]

                    (B) Technical milestones.--
                          (i) Periodic determination.--
                                    (I) In general.--The Secretary shall 
                                periodically establish technical 
                                milestones specifying the emission and 
                                thermal efficiency levels that projects 
                                funded under this paragraph shall be 
                                designed, and reasonably expected, to 
                                achieve.
                                    (II) Prescriptive milestones.--The 
                                technical milestones shall become more 
                                prescriptive during the period of the 
                                clean coal power initiative.
                          (ii) 2020 goals.--The Secretary shall set the 
                      periodic milestones so as to achieve by the year 
                      2020 projects able--
                                    (I) to remove at least 97 percent of 
                                sulfur dioxide;
                                    (II) to emit no more than .08 lbs of 
                                NO<INF>x</INF> per million Btu;
                                    (III) to achieve at least 90 percent 
                                reductions in mercury emissions; and
                                    (IV) to achieve a thermal efficiency 
                                of at least--
                                            (aa) 43 percent for coal of 
                                        more than 9,000 Btu;
                                            (bb) 41 percent for coal of 
                                        7,000 to 9,000 Btu; and
                                            (cc) 39 percent for coal of 
                                        less than 7,000 Btu.
            (3) Consultation.--Before setting the technical milestones 
        under paragraphs (1)(B) and (2)(B), the Secretary shall consult 
        with--
                    (A) the Administrator of the Environmental 
                Protection Agency; and
                    (B) interested entities, including--
                          (i) coal producers;
                          (ii) industries using coal;
                          (iii) organizations that promote coal or 
                      advanced coal technologies;
                          (iv) environmental organizations;
                          (v) organizations representing workers; and
                          (vi) organizations representing consumers.
            (4) Existing units.--In the case of projects at units in 
        existence on the date of enactment of this Act, in lieu of the 
        thermal efficiency requirements described in paragraphs 
        (1)(B)(ii)(IV) and (2)(B)(ii)(IV), the milestones shall be 
        designed to achieve an overall thermal design efficiency 
        improvement, compared to the efficiency of the unit as operated, 
        of not less than--
                    (A) 7 percent for coal of more than 9,000 Btu;
                    (B) 6 percent for coal of 7,000 to 9,000 Btu; or
                    (C) 4 percent for coal of less than 7,000 Btu.
            (5) Administration.--
                    (A) Elevation of site.--In evaluating project 
                proposals to achieve thermal efficiency levels 
                established under paragraphs (1)(B)(i) and (2)(B)(i) and 
                in determining progress towards thermal efficiency 
                milestones under paragraphs (1)(B)(ii)(IV), 
                (2)(B)(ii)(IV), and (4), the Secretary

[[Page 119 STAT. 752]]

                shall take into account and make adjustments for the 
                elevation of the site at which a project is proposed to 
                be constructed.
                    (B) Applicability of milestones.--In applying the 
                thermal efficiency milestones under paragraphs 
                (1)(B)(ii)(IV), (2)(B)(ii)(IV), and (4) to projects that 
                separate and capture at least 50 percent of the 
                potential emissions of carbon dioxide by a facility, the 
                energy used for separation and capture of carbon dioxide 
                shall not be counted in calculating the thermal 
                efficiency.
                    (C) Permitted uses.--In carrying out this section, 
                the Secretary may give priority to projects that 
                include, as part of the project--
                          (i) the separation or capture of carbon 
                      dioxide; or
                          (ii) the reduction of the demand for natural 
                      gas if deployed.

    (c) Financial Criteria.--The Secretary shall not provide financial 
assistance under this subtitle for a project unless the recipient 
documents to the satisfaction of the Secretary that--
            (1) the recipient is financially responsible;
            (2) the recipient will provide sufficient information to the 
        Secretary to enable the Secretary to ensure that the funds are 
        spent efficiently and effectively; and
            (3) a market exists for the technology being demonstrated or 
        applied, as evidenced by statements of interest in writing from 
        potential purchasers of the technology.

    (d) Financial Assistance.--The Secretary shall provide financial 
assistance to projects that, as determined by the Secretary--
            (1) meet the requirements of subsections (a), (b), and (c); 
        and
            (2) are likely--
                    (A) to achieve overall cost reductions in the use of 
                coal to generate useful forms of energy or chemical 
                feedstocks;
                    (B) to improve the competitiveness of coal among 
                various forms of energy in order to maintain a diversity 
                of fuel choices in the United States to meet electricity 
                generation requirements; and
                    (C) to demonstrate methods and equipment that are 
                applicable to 25 percent of the electricity generating 
                facilities, using various types of coal, that use coal 
                as the primary feedstock as of the date of enactment of 
                this Act.

    (e) Cost-Sharing.--In carrying out this subtitle, the Secretary 
shall require cost sharing in accordance with section 988.
    (f) Scheduled Completion of Selected Projects.--
            (1) In general.--In selecting a project for financial 
        assistance under this section, the Secretary shall establish a 
        reasonable period of time during which the owner or operator of 
        the project shall complete the construction or demonstration 
        phase of the project, as the Secretary determines to be 
        appropriate.
            (2) Condition of financial assistance.--The Secretary shall 
        require as a condition of receipt of any financial assistance 
        under this subtitle that the recipient of the assistance enter

[[Page 119 STAT. 753]]

        into an agreement with the Secretary not to request an extension 
        of the time period established for the project by the Secretary 
        under paragraph (1).
            (3) Extension of time period.--
                    (A) In general.--Subject to subparagraph (B), the 
                Secretary may extend the time period established under 
                paragraph (1) if the Secretary determines, in the sole 
                discretion of the Secretary, that the owner or operator 
                of the project cannot complete the construction or 
                demonstration phase of the project within the time 
                period due to circumstances beyond the control of the 
                owner or operator.
                    (B) Limitation.--The Secretary shall not extend a 
                time period under subparagraph (A) by more than 4 years.

    (g) Fee Title.--The Secretary may vest fee title or other property 
interests acquired under cost-share clean coal power initiative 
agreements under this subtitle in any entity, including the United 
States.
    (h) Data Protection.--For a period not exceeding 5 years after 
completion of the operations phase of a cooperative agreement, the 
Secretary may provide appropriate protections (including exemptions from 
subchapter II of chapter 5 of title 5, United States Code) against the 
dissemination of information that--
            (1) results from demonstration activities carried out under 
        the clean coal power initiative program; and
            (2) would be a trade secret or commercial or financial 
        information that is privileged or confidential if the 
        information had been obtained from and first produced by a non-
        Federal party participating in a clean coal power initiative 
        project.

    (i) Applicability.--No technology, or level of emission reduction, 
solely by reason of the use of the technology, or the achievement of the 
emission reduction, by 1 or more facilities receiving assistance under 
this Act, shall be considered to be--
            (1) adequately demonstrated for purposes of section 111 of 
        the Clean Air Act (42 U.S.C. 7411);
            (2) achievable for purposes of section 169 of that Act (42 
        U.S.C. 7479); or
            (3) achievable in practice for purposes of section 171 of 
        that Act (42 U.S.C. 7501).

SEC. 403. <<NOTE: 42 USC 15963.>> REPORT.

    Not later than 1 year after the date of enactment of this Act, and 
once every 2 years thereafter through 2014, the Secretary, in 
consultation with other appropriate Federal agencies, shall submit to 
Congress a report describing--
            (1) the technical milestones set forth in section 402 and 
        how those milestones ensure progress toward meeting the 
        requirements of subsections (b)(1)(B) and (b)(2) of section 402; 
        and
            (2) the status of projects funded under this subtitle.

SEC. 404. <<NOTE: 42 USC 15964.>> CLEAN COAL CENTERS OF EXCELLENCE.

    (a) In General.--As part of the clean coal power initiative, the 
Secretary shall award competitive, merit-based grants to institutions of 
higher education for the establishment of centers of excellence for 
energy systems of the future.
    (b) Basis for Grants.--The Secretary shall award grants under this 
section to institutions of higher education that show the greatest 
potential for advancing new clean coal technologies.

[[Page 119 STAT. 754]]

                    Subtitle B--Clean Power Projects

SEC. 411. <<NOTE: 42 USC 15971.>> INTEGRATED COAL/RENEWABLE ENERGY 
            SYSTEM.

    (a) In General.--Subject to the availability of appropriations, the 
Secretary may provide loan guarantees for a project to produce energy 
from coal of less than 7,000 Btu/lb. using appropriate advanced 
integrated gasification combined cycle technology, including repowering 
of existing facilities, that--
            (1) is combined with wind and other renewable sources;
            (2) minimizes and offers the potential to sequester carbon 
        dioxide emissions; and
            (3) provides a ready source of hydrogen for near-site fuel 
        cell demonstrations.

    (b) Requirements.--The facility--
            (1) may be built in stages;
            (2) shall have a combined output of at least 200 megawatts 
        at successively more competitive rates; and
            (3) shall be located in the Upper Great Plains.

    (c) Technical Criteria.--Technical <<NOTE: Applicability.>> criteria 
described in section 402(b) shall apply to the facility.

    (d) Investment Tax Credits.--
            (1) In general.--The loan guarantees provided under this 
        section do not preclude the facility from receiving an 
        allocation for investment tax credits under section 48A of the 
        Internal Revenue Code of 1986.
            (2) Other funding.--Use of the investment tax credit 
        described in paragraph (1) does not prohibit the use of other 
        clean coal program funding.

SEC. 412. <<NOTE: 42 USC 15972.>> LOAN TO PLACE ALASKA CLEAN COAL 
            TECHNOLOGY FACILITY IN SERVICE.

    (a) Definitions.--In this section:
            (1) Borrower.--The term ``borrower'' means the owner of the 
        clean coal technology plant.
            (2) Clean coal technology plant.--The term ``clean coal 
        technology plant'' means the plant located near Healy, Alaska, 
        constructed under Department cooperative agreement number DE-FC-
        22-91PC90544.
            (3) Cost of a direct loan.--The term ``cost of a direct 
        loan'' has the meaning given the term in section 502(5)(B) of 
        the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(B)).

    (b) Authorization.--Subject to subsection (c), the Secretary shall 
use amounts made available under subsection (e) to provide the cost of a 
direct loan to the borrower for purposes of placing the clean coal 
technology plant into reliable operation for the generation of 
electricity.
    (c) Requirements.--
            (1) Maximum loan amount.--The amount of the direct loan 
        provided under subsection (b) shall not exceed $80,000,000.
            (2) Determinations by secretary.--Before providing the 
        direct loan to the borrower under subsection (b), the Secretary 
        shall determine that--
                    (A) the plan of the borrower for placing the clean 
                coal technology plant in reliable operation has a 
                reasonable prospect of success;

[[Page 119 STAT. 755]]

                    (B) the amount of the loan (when combined with 
                amounts available to the borrower from other sources) 
                will be sufficient to carry out the project; and
                    (C) there is a reasonable prospect that the borrower 
                will repay the principal and interest on the loan.
            (3) Interest; term.--The direct loan provided under 
        subsection (b) shall bear interest at a rate and for a term that 
        the Secretary determines appropriate, after consultation with 
        the Secretary of the Treasury, taking into account the needs and 
        capacities of the borrower and the prevailing rate of interest 
        for similar loans made by public and private lenders.
            (4) Additional terms and conditions.--The Secretary may 
        require any other terms and conditions that the Secretary 
        determines to be appropriate.

    (d) Use of Payments.--The Secretary shall retain any payments of 
principal and interest on the direct loan provided under subsection (b) 
to support energy research and development activities, to remain 
available until expended, subject to any other conditions in an 
applicable appropriations Act.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to provide the cost of a direct 
loan under subsection (b).

SEC. 413. <<NOTE: 42 USC 15973.>> WESTERN INTEGRATED COAL GASIFICATION 
            DEMONSTRATION PROJECT.

    (a) In General.--Subject to the availability of appropriations, the 
Secretary shall carry out a project to demonstrate production of energy 
from coal mined in the western United States using integrated 
gasification combined cycle technology (referred to in this section as 
the ``demonstration project'').
    (b) Components.--The demonstration project--
            (1) may include repowering of existing facilities;
            (2) shall be designed to demonstrate the ability to use coal 
        with an energy content of not more than 9,000 Btu/lb.; and
            (3) shall be capable of removing and sequestering carbon 
        dioxide emissions.

    (c) All Types of Western Coals.--Notwithstanding the foregoing, and 
to the extent economically feasible, the demonstration project shall 
also be designed to demonstrate the ability to use a variety of types of 
coal (including subbituminous and bituminous coal with an energy content 
of up to 13,000 Btu/lb.) mined in the western United States.
    (d) Location.--The demonstration project shall be located in a 
western State at an altitude of greater than 4,000 feet above sea level.
    (e) Cost Sharing.--The Federal share of the cost of the 
demonstration project shall be determined in accordance with section 
988.
    (f) Loan Guarantees.--Notwithstanding title XIV, the demonstration 
project shall not be eligible for Federal loan guarantees.

SEC. 414. <<NOTE: 42 USC 15974.>> COAL GASIFICATION.

    The Secretary is authorized to provide loan guarantees for a project 
to produce energy from a plant using integrated gasification combined 
cycle technology of at least 400 megawatts in capacity that produces 
power at competitive rates in deregulated

[[Page 119 STAT. 756]]

energy generation markets and that does not receive any subsidy (direct 
or indirect) from ratepayers.

SEC. 415. <<NOTE: 42 USC 15975.>> PETROLEUM COKE GASIFICATION.

    The Secretary is authorized to provide loan guarantees for at least 
5 petroleum coke gasification projects.

SEC. 416. <<NOTE: 42 USC 15976.>> ELECTRON SCRUBBING DEMONSTRATION.

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

SEC. 417. <<NOTE: 42 USC 15977.>> DEPARTMENT OF ENERGY TRANSPORTATION 
            FUELS FROM ILLINOIS BASIN COAL.

    (a) In General.--The Secretary shall carry out a program to evaluate 
the commercial and technical viability of advanced technologies for the 
production of Fischer-Tropsch transportation fuels, and other 
transportation fuels, manufactured from Illinois basin coal, including 
the capital modification of existing facilities and the construction of 
testing facilities under subsection (b).
    (b) Facilities.--For the purpose of evaluating the commercial and 
technical viability of different processes for producing Fischer-Tropsch 
transportation fuels, and other transportation fuels, from Illinois 
basin coal, the Secretary shall support the use and capital modification 
of existing facilities and the construction of new facilities at--
            (1) Southern Illinois University Coal Research Center;
            (2) University of Kentucky Center for Applied Energy 
        Research; and
            (3) Energy Center at Purdue University.

    (c) Gasification Products Test Center.--In conjunction with the 
activities described in subsections (a) and (b), the Secretary shall 
construct a test center to evaluate and confirm liquid and gas products 
from syngas catalysis in order that the system has an output of at least 
500 gallons of Fischer-Tropsch transportation fuel per day in a 24-hour 
operation.
    (d) <<NOTE: Deadlines.>> Milestones.--
            (1) Selection of processes.--Not later than 180 days after 
        the date of enactment of this Act, the Secretary shall select 
        processes for evaluating the commercial and technical viability 
        of different processes of producing Fischer-Tropsch 
        transportation fuels, and other transportation fuels, from 
        Illinois basin coal.
            (2) Agreements.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary shall offer to enter into 
        agreements--
                    (A) to carry out the activities described in this 
                section, at the facilities described in subsection (b); 
                and
                    (B) for the capital modifications or construction of 
                the facilities at the locations described in subsection 
                (b).
            (3) Evaluations.--Not later than 3 years after the date of 
        enactment of the Act, the Secretary shall begin, at the 
        facilities described in subsection (b), evaluation of the 
        technical and commercial viability of different processes of 
        producing Fischer-Tropsch transportation fuels, and other 
        transportation fuels, from Illinois basin coal.

[[Page 119 STAT. 757]]

            (4) Construction of facilities.--
                    (A) In general.--The Secretary shall construct the 
                facilities described in subsection (b) at the lowest 
                cost practicable.
                    (B) Grants or agreements.--The Secretary may make 
                grants or enter into agreements or contracts with the 
                institutions of higher education described in subsection 
                (b).

    (e) Cost Sharing.--The cost of making grants under this section 
shall be shared in accordance with section 988.
    (f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $85,000,000 for the period of 
fiscal years 2006 through 2010.

                  Subtitle C--Coal and Related Programs

SEC. 421. AMENDMENT OF THE ENERGY POLICY ACT OF 1992.

    (a) Amendment.--The Energy Policy Act of 1992 (42 U.S.C. 13201 et 
seq.) is amended by adding at the end the following:

                  ``TITLE XXXI--CLEAN AIR COAL PROGRAM

``SEC. 3101. <<NOTE: 42 USC 13571.>> PURPOSES.

    ``The purposes of this title are to--
            ``(1) promote national energy policy and energy security, 
        diversity, and economic competitiveness benefits that result 
        from the increased use of coal;
            ``(2) mitigate financial risks, reduce the cost of clean 
        coal generation, and increase the marketplace acceptance of 
        clean coal generation and pollution control equipment and 
        processes; and
            ``(3) facilitate the environmental performance of clean coal 
        generation.

``SEC. 3102. <<NOTE: 42 USC 13572.>> AUTHORIZATION OF PROGRAM.

    ``(a) In General.--The Secretary shall carry out a program of 
financial assistance to--
            ``(1) facilitate the production and generation of coal-based 
        power, through the deployment of clean coal electric generating 
        equipment and processes that, compared to equipment or processes 
        that are in operation on a full scale--
                    ``(A) improve--
                          ``(i) energy efficiency; or
                          ``(ii) environmental performance consistent 
                      with relevant Federal and State clean air 
                      requirements, including those promulgated under 
                      the Clean Air Act (42 U.S.C. 7401 et seq.); and
                    ``(B) are not yet cost competitive; and
            ``(2) facilitate the utilization of existing coal-based 
        electricity generation plants through projects that--
                    ``(A) deploy advanced air pollution control 
                equipment and processes; and
                    ``(B) are designed to voluntarily enhance 
                environmental performance above current applicable 
                obligations under the

[[Page 119 STAT. 758]]

                Clean Air Act and State implementation efforts pursuant 
                to such Act.

    ``(b) Financial Criteria.--As determined by the Secretary for a 
particular project, financial assistance under this title shall be in 
the form of--
            ``(1) cost-sharing of an appropriate percentage of the total 
        project cost, not to exceed 50 percent as calculated under 
        section 988 of the Energy Policy Act of 2005; or
            ``(2) financial assistance, including grants, cooperative 
        agreements, or loans as authorized under this Act or other 
        statutory authority of the Secretary.

``SEC. 3103. <<NOTE: 42 USC 13573.>> GENERATION PROJECTS.

    ``(a) Eligible Projects.--Projects supported under section 
3102(a)(1) may include--
            ``(1) equipment or processes previously supported by a 
        Department of Energy program;
            ``(2) advanced combustion equipment and processes that the 
        Secretary determines will be cost-effective and could 
        substantially contribute to meeting environmental or energy 
        needs, including gasification, gasification fuel cells, 
        gasification coproduction, oxidation combustion techniques, 
        ultra-supercritical boilers, and chemical looping; and
            ``(3) hybrid gasification/combustion systems, including 
        systems integrating fuel cells with gasification or combustion 
        units.

    ``(b) Criteria.--The Secretary shall establish criteria for the 
selection of generation projects under section 3102(a)(1). The Secretary 
may modify the criteria as appropriate to reflect improvements in 
equipment, except that the criteria shall not be modified to be less 
stringent. The selection criteria shall include--
            ``(1) prioritization of projects whose installation is 
        likely to result in significant air quality improvements in 
        nonattainment air quality areas;
            ``(2) prioritization of projects whose installation is 
        likely to result in lower emission rates of pollution;
            ``(3) prioritization of projects that result in the 
        repowering or replacement of older, less efficient units;
            ``(4) documented broad interest in the procurement of the 
        equipment and utilization of the processes used in the projects 
        by owners or operators of facilities for electricity generation;
            ``(5) equipment and processes beginning in 2006 through 2011 
        that are projected to achieve a thermal efficiency of--
                    ``(A) 40 percent for coal of more than 9,000 Btu per 
                pound based on higher heating values;
                    ``(B) 38 percent for coal of 7,000 to 9,000 Btu per 
                pound passed on higher heating values; and
                    ``(C) 36 percent for coal of less than 7,000 Btu per 
                pound based on higher heating values;
        except that energy used for coproduction or cogeneration shall 
        not be counted in calculating the thermal efficiency under this 
        paragraph; and
            ``(6) equipment and processes beginning in 2012 and 2013 
        that are projected to achieve a thermal efficiency of--
                    ``(A) 45 percent for coal of more than 9,000 Btu per 
                pound based on higher heating values;
                    ``(B) 44 percent for coal of 7,000 to 9,000 Btu per 
                pound passed on higher heating values; and

[[Page 119 STAT. 759]]

                    ``(C) 40 percent for coal of less than 7,000 Btu per 
                pound based on higher heating values;
        except that energy used for coproduction or cogeneration shall 
        not be counted in calculating the thermal efficiency under this 
        paragraph.

    ``(c) Program Balance and Priority.--In carrying out the program 
under section 3102(a)(1), the Secretary shall ensure, to the extent 
practicable, that--
            ``(1) between 25 percent and 75 percent of the projects 
        supported are for the sole purpose of electrical generation; and
            ``(2) priority is given to projects that use electrical 
        generation equipment and processes that have been developed and 
        demonstrated and applied in actual production of electricity, 
        but are not yet cost-competitive, and that achieve greater 
        efficiency and environmental performance.

    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out section 3102(a)(1)--
            ``(1) $250,000,000 for fiscal year 2007;
            ``(2) $350,000,000 for fiscal year 2008;
            ``(3) $400,000,000 for each of fiscal years 2009 through 
        2012; and
            ``(4) $300,000,000 for fiscal year 2013.

    ``(e) Applicability.--No technology, or level of emission reduction, 
shall be treated as adequately demonstrated for purpose of section 111 
of the Clean Air Act (42 U.S.C. 7411), achievable for purposes of 
section 169 of that Act (42 U.S.C. 7479), or achievable in practice for 
purposes of section 171 of that Act (42 U.S.C. 7501) solely by reason of 
the use of such technology, or the achievement of such emission 
reduction, by one or more facilities receiving assistance under section 
3102(a)(1).

``SEC. 3104. <<NOTE: 42 USC 13574.>> AIR QUALITY ENHANCEMENT PROGRAM.

    ``(a) Eligible Projects.--Projects supported under section 
3102(a)(2) shall--
            ``(1) utilize technologies that meet relevant Federal and 
        State clean air requirements applicable to the unit or facility, 
        including being adequately demonstrated for purposes of section 
        111 of the Clean Air Act (42 U.S.C. 7411), achievable for 
        purposes of section 169 of that Act (42 U.S.C. 7479), or 
        achievable in practice for purposes of section 171 of that Act 
        (42 U.S.C. 7501); or
            ``(2) utilize equipment or processes that exceed relevant 
        Federal or State clean air requirements applicable to the unit 
        or facilities included in the projects by achieving greater 
        efficiency or environmental performance.

    ``(b) Priority in Project Selection.--In making an award under 
section 3102(a)(2), the Secretary shall give priority to--
            ``(1) projects whose installation is likely to result in 
        significant air quality improvements in nonattainment air 
        quality areas or substantially reduce the emission level of 
        criteria pollutants and mercury air emissions;
            ``(2) projects for pollution control that result in the 
        mitigation or collection of more than 1 pollutant; and
            ``(3) projects designed to allow the use of the waste 
        byproducts or other byproducts of the equipment.

[[Page 119 STAT. 760]]

    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out section 3102(a)(2)--
            ``(1) $300,000,000 for fiscal year 2007;
            ``(2) $100,000,000 for fiscal year 2008;
            ``(3) $40,000,000 for fiscal year 2009;
            ``(4) $30,000,000 for fiscal year 2010; and
            ``(5) $30,000,000 for fiscal year 2011.

    ``(d) Applicability.--No technology, or level of emission reduction 
under subsection (a)(2) shall be treated as adequately demonstrated for 
purpose of Section 111 of the Clean Air Act (42 U.S.C. 7411), achievable 
for purposes of section 169 of that Act (42 U.S.C. 7479), or achievable 
in practice for purposes of section 171 of that Act (42 U.S.C. 7501) 
solely by reason of the use of such technology, or the achievement of 
such emission reduction, by one or more facilities receiving assistance 
under section 3102(a)(2).''.
    (b) Table of Contents Amendment.--The table of contents of the 
Energy Policy Act of 1992 (42 U.S.C. prec. 13201) is amended by adding 
at the end the following:

                  ``TITLE XXXI--CLEAN AIR COAL PROGRAM

        ``Sec. 3101. Purposes.
        ``Sec. 3102. Authorization of program.
        ``Sec. 3103. Generation projects.
        ``Sec. 3104. Air quality enhancement program.''.

Subtitle D--Federal <<NOTE: Coal Leasing Amendments Act of 2005.>> Coal 
Leases

SEC. 431. <<NOTE: 42 USC 15801.>> SHORT TITLE.

    This subtitle may be cited as the ``Coal Leasing Amendments Act of 
2005''.

SEC. 432. REPEAL OF THE 160-ACRE LIMITATION FOR COAL LEASES.

    Section 3 of the Mineral Leasing Act (30 U.S.C. 203) is amended--
            (1) in the first sentence, by striking ``Any person'' and 
        inserting the following: ``(a)(1) Except as provided in 
        paragraph (3), on a finding by the Secretary under paragraph 
        (2), any person'';
            (2) in the second sentence, by striking ``The Secretary'' 
        and inserting the following:

    ``(b) The Secretary'';
            (3) in the third sentence, by striking ``The minimum'' and 
        inserting the following:

    ``(c) The minimum'';
            (4) in subsection (a) (as designated by paragraph (1))--
                    (A) by striking ``upon'' and all that follows and 
                inserting the following: ``secure modifications of the 
                original coal lease by including additional coal lands 
                or coal deposits contiguous or cornering to those 
                embraced in the lease.''; and
                    (B) by adding at the end the following:

    ``(2) A finding referred to in paragraph (1) is a finding by the 
Secretary that the modifications--
            ``(A) would be in the interest of the United States;
            ``(B) would not displace a competitive interest in the 
        lands; and

[[Page 119 STAT. 761]]

            ``(C) would not include lands or deposits that can be 
        developed as part of another potential or existing operation.

    ``(3) In no case shall the total area added by modifications to an 
existing coal lease under paragraph (1)--
            ``(A) exceed 960 acres; or
            ``(B) add acreage larger than that in the original lease.''.

SEC. 433. APPROVAL OF LOGICAL MINING UNITS.

    Section 2(d)(2) of the Mineral Leasing Act (30 U.S.C. 202a(2)) is 
amended--
            (1) by inserting ``(A)'' after ``(2)''; and
            (2) by adding at the end the following:

    ``(B) The Secretary may establish a period of more than 40 years if 
the Secretary determines that the longer period--
            ``(i) will ensure the maximum economic recovery of a coal 
        deposit; or
            ``(ii) the longer period is in the interest of the orderly, 
        efficient, or economic development of a coal resource.''.

SEC. 434. PAYMENT OF ADVANCE ROYALTIES UNDER COAL LEASES.

    Section 7(b) of the Mineral Leasing Act (30 U.S.C. 207(b)) is 
amended--
            (1) in the first sentence, by striking ``Each lease'' and 
        inserting the following: ``(1) Each lease'';
            (2) in the second sentence, by striking ``The Secretary'' 
        and inserting the following:

    ``(2) The Secretary'';
            (3) in the third sentence, by striking ``Such advance 
        royalties'' and inserting the following:

    ``(3) Advance royalties described in paragraph (2)'';
            (4) in the seventh sentence, by striking ``The Secretary'' 
        and inserting the following:

    ``(6) The Secretary'';
            (5) in the last sentence, by striking ``Nothing'' and 
        inserting the following:

    ``(7) Nothing'';
            (6) by striking the fourth, fifth, and sixth sentences; and
            (7) by inserting after paragraph (3) (as designated by 
        paragraph (3)) the following:

    ``(4) Advance royalties described in paragraph (2) shall be 
computed--
            ``(A) based on--
                    ``(i) the average price in the spot market for sales 
                of comparable coal from the same region during the last 
                month of each applicable continued operation year; or
                    ``(ii) in the absence of a spot market for 
                comparable coal from the same region, by using a 
                comparable method established by the Secretary of the 
                Interior to capture the commercial value of coal; and
            ``(B) based on commercial quantities, as defined by 
        regulation by the Secretary of the Interior.

    ``(5) The aggregate number of years during the period of any lease 
for which advance royalties may be accepted in lieu of the condition of 
continued operation shall not exceed 20 years.
    ``(6) The amount of any production royalty paid for any year shall 
be reduced (but not below 0) by the amount of any advance royalties paid 
under a lease described in paragraph (5) to the

[[Page 119 STAT. 762]]

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

SEC. 435. ELIMINATION OF DEADLINE FOR SUBMISSION OF COAL LEASE OPERATION 
            AND RECLAMATION PLAN.

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

SEC. 436. AMENDMENT RELATING TO FINANCIAL ASSURANCES WITH RESPECT TO 
            BONUS BIDS.

    Section 2(a) of the Mineral Leasing Act (30 U.S.C. 201(a)) is 
amended by adding at the end the following:
    ``(4)(A) The Secretary shall not require a surety bond or any other 
financial assurance to guarantee payment of deferred bonus bid 
installments with respect to any coal lease issued on a cash bonus bid 
to a lessee or successor in interest having a history of a timely 
payment of noncontested coal royalties and advanced coal royalties in 
lieu of production (where applicable) and bonus bid installment 
payments.
    ``(B) The Secretary may waive any requirement that a lessee provide 
a surety bond or other financial assurance to guarantee payment of 
deferred bonus bid installment with respect to any coal lease issued 
before the date of the enactment of the Energy Policy Act of 2005 only 
if the Secretary determines that the lessee has a history of making 
timely payments referred to in subparagraph (A).
    ``(5) <<NOTE: Deadline. Notices.>> Notwithstanding any other 
provision of law, if the lessee under a coal lease fails to pay any 
installment of a deferred cash bonus bid within 10 days after the 
Secretary provides written notice that payment of the installment is 
past due--
            ``(A) the lease shall automatically terminate; and
            ``(B) any bonus payments already made to the United States 
        with respect to the lease shall not be returned to the lessee or 
        credited in any future lease sale.''.

SEC. 437. <<NOTE: 42 USC 15991.>> INVENTORY REQUIREMENT.

    (a) Review of Assessments.--
            (1) In general.--The Secretary of the Interior, in 
        consultation with the Secretary of Agriculture and the 
        Secretary, shall review coal assessments and other available 
        data to identify--
                    (A) Federal lands with coal resources that are 
                available for development;
                    (B) the extent and nature of any restrictions on the 
                development of coal resources on Federal lands 
                identified under paragraph (1); and
                    (C) with respect to areas of such lands for which 
                sufficient data exists, resources of compliant coal and 
                supercompliant coal.
            (2) Definitions.--For purposes of this subsection--
                    (A) the term ``compliant coal'' means coal that 
                contains not less than 1.0 and not more than 1.2 pounds 
                of sulfur dioxide per million Btu; and
                    (B) the term ``supercompliant coal'' means coal that 
                contains less than 1.0 pounds of sulfur dioxide per 
                million Btu.

    (b) Completion and Updating of the Inventory.--The Sec- retary--

[[Page 119 STAT. 763]]

            (1) <<NOTE: Deadline.>> shall complete the inventory under 
        subsection (a) by not later than 2 years after the date of 
        enactment of this Act; and
            (2) shall update the inventory as the availability of data 
        and developments in technology warrant.

    (c) Report.--The Secretary shall submit to the Committee on 
Resources of the House of Representatives and to the Committee on Energy 
and Natural Resources of the Senate and make publicly available--
            (1) a report containing the inventory under this section, by 
        not later than 2 years after the effective date of this section; 
        and
            (2) each update of such inventory.

SEC. 438. <<NOTE: 30 USC 201 note.>> APPLICATION OF AMENDMENTS.

    The amendments made by this subtitle apply with respect to any coal 
lease issued before, on, or after the date of the enactment of this Act.

   TITLE V--INDIAN <<NOTE: Indian Tribal Energy Development and Self-
Determination Act of 2005.>> ENERGY

SEC. 501. <<NOTE: 42 USC 15801 note.>> SHORT TITLE.

    This title may be cited as the ``Indian Tribal Energy Development 
and Self-Determination Act of 2005''.

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

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


              ``office of indian energy policy and programs


    ``Sec. 217. (a) Establishment.--There <<NOTE: 42 USC 7144e.>> is 
established within the Department an Office of Indian Energy Policy and 
Programs (referred to in this section as the `Office'). The Office shall 
be headed by a Director, who shall be appointed by the Secretary and 
compensated at a rate equal to that of level IV of the Executive 
Schedule under section 5315 of title 5, United States Code.

    ``(b) Duties of Director.--The Director, in accordance with Federal 
policies promoting Indian self-determination and the purposes of this 
Act, shall provide, direct, foster, coordinate, and implement energy 
planning, education, management, conservation, and delivery programs of 
the Department that--
            ``(1) promote Indian tribal energy development, efficiency, 
        and use;
            ``(2) reduce or stabilize energy costs;
            ``(3) enhance and strengthen Indian tribal energy and 
        economic infrastructure relating to natural resource development 
        and electrification; and
            ``(4) bring electrical power and service to Indian land and 
        the homes of tribal members located on Indian lands or acquired, 
        constructed, or improved (in whole or in part) with Federal 
        funds.''.

    (b) Conforming Amendments.--
            (1) The table of contents of the Department of Energy 
        Organization Act (42 U.S.C. prec. 7101) is amended--

[[Page 119 STAT. 764]]

                    (A) in the item relating to section 209, by striking 
                ``Section'' and inserting ``Sec.''; and
                    (B) by striking the items relating to sections 213 
                through 216 and inserting the following:

``Sec. 213. Establishment of policy for National Nuclear Security 
           Administration.
``Sec. 214. Establishment of security, counterintelligence, and 
           intelligence policies.
``Sec. 215. Office of Counterintelligence.
``Sec. 216. Office of Intelligence.
``Sec. 217. Office of Indian Energy Policy and Programs.''.

            (2) Section 5315 of title 5, United States Code, is amended 
        by inserting after the item related to the Inspector General, 
        Department of Energy the following new item:
            ``Director, Office of Indian Energy Policy and Programs, 
        Department of Energy.''.

SEC. 503. INDIAN ENERGY.

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

                       ``TITLE XXVI--INDIAN ENERGY

``SEC. 2601. <<NOTE: 25 USC 3501.>> DEFINITIONS.

    ``In this title:
            ``(1) The term `Director' means the Director of the Office 
        of Indian Energy Policy and Programs, Department of Energy.
            ``(2) The term `Indian land' means--
                    ``(A) any land located within the boundaries of an 
                Indian reservation, pueblo, or rancheria;
                    ``(B) any land not located within the boundaries of 
                an Indian reservation, pueblo, or rancheria, the title 
                to which is held--
                          ``(i) in trust by the United States for the 
                      benefit of an Indian tribe or an individual 
                      Indian;
                          ``(ii) by an Indian tribe or an individual 
                      Indian, subject to restriction against alienation 
                      under laws of the United States; or
                          ``(iii) by a dependent Indian community; and
                    ``(C) land that is owned by an Indian tribe and was 
                conveyed by the United States to a Native Corporation 
                pursuant to the Alaska Native Claims Settlement Act (43 
                U.S.C. 1601 et seq.), or that was conveyed by the United 
                States to a Native Corporation in exchange for such 
                land.
            ``(3) The term `Indian reservation' includes--
                    ``(A) an Indian reservation in existence in any 
                State or States as of the date of enactment of this 
                paragraph;
                    ``(B) a public domain Indian allotment; and
                    ``(C) a dependent Indian community located within 
                the borders of the United States, regardless of whether 
                the community is located--
                          ``(i) on original or acquired territory of the 
                      community; or
                          ``(ii) within or outside the boundaries of any 
                      State or States.
            ``(4)(A) The term `Indian tribe' has the meaning given the 
        term in section 4 of the Indian Self-Determination and Education 
        Assistance Act (25 U.S.C. 450b).

[[Page 119 STAT. 765]]

            ``(B) For the purpose of paragraph (12) and sections 
        2603(b)(1)(C) and 2604, the term `Indian tribe' does not include 
        any Native Corporation.
            ``(5) The term `integration of energy resources' means any 
        project or activity that promotes the location and operation of 
        a facility (including any pipeline, gathering system, 
        transportation system or facility, or electric transmission or 
        distribution facility) on or near Indian land to process, 
        refine, generate electricity from, or otherwise develop energy 
        resources on, Indian land.
            ``(6) The term `Native Corporation' has the meaning given 
        the term in section 3 of the Alaska Native Claims Settlement Act 
        (43 U.S.C. 1602).
            ``(7) The term `organization' means a partnership, joint 
        venture, limited liability company, or other unincorporated 
        association or entity that is established to develop Indian 
        energy resources.
            ``(8) The term `Program' means the Indian energy resource 
        development program established under section 2602(a).
            ``(9) The term `Secretary' means the Secretary of the 
        Interior.
            ``(10) The term `sequestration' means the long-term 
        separation, isolation, or removal of greenhouse gases from the 
        atmosphere, including through a biological or geologic method 
        such as reforestation or an underground reservoir.
            ``(11) The term `tribal energy resource development 
        organization' means an organization of two or more entities, at 
        least one of which is an Indian tribe, that has the written 
        consent of the governing bodies of all Indian tribes 
        participating in the organization to apply for a grant, loan, or 
        other assistance under section 2602.
            ``(12) The term `tribal land' means any land or interests in 
        land owned by any Indian tribe, title to which is held in trust 
        by the United States, or is subject to a restriction against 
        alienation under laws of the United States.

``SEC. 2602. <<NOTE: 25 USC 3502.>> INDIAN TRIBAL ENERGY RESOURCE 
            DEVELOPMENT.

    ``(a) Department of the Interior Program.--
            ``(1) To assist Indian tribes in the development of energy 
        resources and further the goal of Indian self-determination, the 
        Secretary shall establish and implement an Indian energy 
        resource development program to assist consenting Indian tribes 
        and tribal energy resource development organizations in 
        achieving the purposes of this title.
            ``(2) <<NOTE: Grants.>> In carrying out the Program, the 
        Secretary shall--
                    ``(A) provide development grants to Indian tribes 
                and tribal energy resource development organizations for 
                use in developing or obtaining the managerial and 
                technical capacity needed to develop energy resources on 
                Indian land, and to properly account for resulting 
                energy production and revenues;
                    ``(B) provide grants to Indian tribes and tribal 
                energy resource development organizations for use in 
                carrying out projects to promote the integration of 
                energy resources, and to process, use, or develop those 
                energy resources, on Indian land;

[[Page 119 STAT. 766]]

                    ``(C) <<NOTE: Loans.>> provide low-interest loans to 
                Indian tribes and tribal energy resource development 
                organizations for use in the promotion of energy 
                resource development on Indian land and integration of 
                energy resources; and
                    ``(D) provide grants and technical assistance to an 
                appropriate tribal environmental organization, as 
                determined by the Secretary, that represents multiple 
                Indian tribes to establish a national resource center to 
                develop tribal capacity to establish and carry out 
                tribal environmental programs in support of energy-
                related programs and activities under this title, 
                including--
                          ``(i) training programs for tribal 
                      environmental officials, program managers, and 
                      other governmental representatives;
                          ``(ii) the development of model environmental 
                      policies and tribal laws, including tribal 
                      environmental review codes, and the creation and 
                      maintenance of a clearinghouse of best 
                      environmental management practices; and
                          ``(iii) recommended standards for reviewing 
                      the implementation of tribal environmental laws 
                      and policies within tribal judicial or other 
                      tribal appeals systems.
            ``(3) <<NOTE: Appropriation authorization.>> There are 
        authorized to be appropriated to carry out this subsection such 
        sums as are necessary for each of fiscal years 2006 through 
        2016.

    ``(b) Department of Energy Indian Energy Education Planning and 
Management Assistance Program.--
            ``(1) The Director shall establish programs to assist 
        consenting Indian tribes in meeting energy education, research 
        and development, planning, and management needs.
            ``(2) In carrying out this subsection, the Director may 
        provide grants, on a competitive basis, to an Indian tribe or 
        tribal energy resource development organization for use in 
        carrying out--
                    ``(A) energy, energy efficiency, and energy 
                conservation programs;
                    ``(B) studies and other activities supporting tribal 
                acquisitions of energy supplies, services, and 
                facilities, including the creation of tribal utilities 
                to assist in securing electricity to promote 
                electrification of homes and businesses on Indian land;
                    ``(C) planning, construction, development, 
                operation, maintenance, and improvement of tribal 
                electrical generation, transmission, and distribution 
                facilities located on Indian land; and
                    ``(D) development, construction, and interconnection 
                of electric power transmission facilities located on 
                Indian land with other electric transmission facilities.
            ``(3)(A) The Director shall develop a program to support and 
        implement research projects that provide Indian tribes with 
        opportunities to participate in carbon sequestration practices 
        on Indian land, including--
                    ``(i) geologic sequestration;
                    ``(ii) forest sequestration;
                    ``(iii) agricultural sequestration; and

[[Page 119 STAT. 767]]

                    ``(iv) any other sequestration opportunities the 
                Director considers to be appropriate.
            ``(B) The activities carried out under subparagraph (A) 
        shall be--
                    ``(i) coordinated with other carbon sequestration 
                research and development programs conducted by the 
                Secretary of Energy;
                    ``(ii) conducted to determine methods consistent 
                with existing standardized measurement protocols to 
                account and report the quantity of carbon dioxide or 
                other greenhouse gases sequestered in projects that may 
                be implemented on Indian land; and
                    ``(iii) reviewed periodically to collect and 
                distribute to Indian tribes information on carbon 
                sequestration practices that will increase the 
                sequestration of carbon without threatening the social 
                and economic well-being of Indian tribes.
            ``(4)(A) The Director, in consultation with Indian tribes, 
        may develop a formula for providing grants under this 
        subsection.
            ``(B) In providing a grant under this subsection, the 
        Director shall give priority to any application received from an 
        Indian tribe with inadequate electric service (as determined by 
        the Director).
            ``(C) In providing a grant under this subsection for an 
        activity to provide, or expand the provision of, electricity on 
        Indian land, the Director shall encourage cooperative 
        arrangements between Indian tribes and utilities that provide 
        service to Indian tribes, as the Director determines to be 
        appropriate.
            ``(5) The Secretary of Energy may issue such regulations as 
        the Secretary determines to be necessary to carry out this 
        subsection.
            ``(6) <<NOTE: Appropriation authorization.>> There is 
        authorized to be appropriated to carry out this subsection 
        $20,000,000 for each of fiscal years 2006 through 2016.

    ``(c) Department of Energy Loan Guarantee Program.--
            ``(1) Subject to paragraphs (2) and (4), the Secretary of 
        Energy may provide loan guarantees (as defined in section 502 of 
        the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) for an 
        amount equal to not more than 90 percent of the unpaid principal 
        and interest due on any loan made to an Indian tribe for energy 
        development.
            ``(2) In providing a loan guarantee under this subsection 
        for an activity to provide, or expand the provision of, 
        electricity on Indian land, the Secretary of Energy shall 
        encourage cooperative arrangements between Indian tribes and 
        utilities that provide service to Indian tribes, as the 
        Secretary determines to be appropriate.
            ``(3) A loan guarantee under this subsection shall be made 
        by--
                    ``(A) a financial institution subject to examination 
                by the Secretary of Energy; or
                    ``(B) an Indian tribe, from funds of the Indian 
                tribe.
            ``(4) The aggregate outstanding amount guaranteed by the 
        Secretary of Energy at any time under this subsection shall not 
        exceed $2,000,000,000.

[[Page 119 STAT. 768]]

            ``(5) <<NOTE: Appropriation authorization.>> The Secretary 
        of Energy may issue such regulations as the Secretary of Energy 
        determines are necessary to carry out this subsection.
            ``(6) There are authorized to be appropriated such sums as 
        are necessary to carry out this subsection, to remain available 
        until expended.
            ``(7) <<NOTE: Deadline. Reports.>> Not later than 1 year 
        after the date of enactment of this section, the Secretary of 
        Energy shall submit to Congress a report on the financing 
        requirements of Indian tribes for energy development on Indian 
        land.

    ``(d) Preference.--
            ``(1) In purchasing electricity or any other energy product 
        or byproduct, a Federal agency or department may give preference 
        to an energy and resource production enterprise, partnership, 
        consortium, corporation, or other type of business organization 
        the majority of the interest in which is owned and controlled by 
        1 or more Indian tribes.
            ``(2) In carrying out this subsection, a Federal agency or 
        department shall not--
                    ``(A) pay more than the prevailing market price for 
                an energy product or byproduct; or
                    ``(B) obtain less than prevailing market terms and 
                conditions.

``SEC. 2603. <<NOTE: 25 USC 3503.>> INDIAN TRIBAL ENERGY RESOURCE 
            REGULATION.

    ``(a) Grants.--The Secretary may provide to Indian tribes, on an 
annual basis, grants for use in accordance with subsection (b).
    ``(b) Use of Funds.--Funds from a grant provided under this section 
may be used--
            ``(1)(A) by an Indian tribe for the development of a tribal 
        energy resource inventory or tribal energy resource on Indian 
        land;
            ``(B) by an Indian tribe for the development of a 
        feasibility study or other report necessary to the development 
        of energy resources on Indian land;
            ``(C) by an Indian tribe (other than an Indian Tribe in the 
        State of Alaska, except the Metlakatla Indian Community) for--
                    ``(i) the development and enforcement of tribal laws 
                (including regulations) relating to tribal energy 
                resource development; and
                    ``(ii) the development of technical infrastructure 
                to protect the environment under applicable law; or
            ``(D) by a Native Corporation for the development and 
        implementation of corporate policies and the development of 
        technical infrastructure to protect the environment under 
        applicable law; and
            ``(2) by an Indian tribe for the training of employees 
        that--
                    ``(A) are engaged in the development of energy 
                resources on Indian land; or
                    ``(B) are responsible for protecting the 
                environment.

    ``(c) Other Assistance.--
            ``(1) In carrying out the obligations of the United States 
        under this title, the Secretary shall ensure, to the maximum 
        extent practicable and to the extent of available resources, 
        that on the request of an Indian tribe, the Indian tribe shall

[[Page 119 STAT. 769]]

        have available scientific and technical information and 
        expertise, for use in the regulation, development, and 
        management of energy resources of the Indian tribe on Indian 
        land.
            ``(2) The Secretary may carry out paragraph (1)--
                    ``(A) directly, through the use of Federal 
                officials; or
                    ``(B) indirectly, by providing financial assistance 
                to an Indian tribe to secure independent assistance.

``SEC. 2604. <<NOTE: 25 USC 3504.>> LEASES, BUSINESS AGREEMENTS, AND 
            RIGHTS-OF-WAY INVOLVING ENERGY DEVELOPMENT OR TRANSMISSION.

    ``(a) Leases and Business Agreements.--In accordance with this 
section--
            ``(1) an Indian tribe may, at the discretion of the Indian 
        tribe, enter into a lease or business agreement for the purpose 
        of energy resource development on tribal land, including a lease 
        or business agreement for--
                    ``(A) exploration for, extraction of, processing of, 
                or other development of the energy mineral resources of 
                the Indian tribe located on tribal land; or
                    ``(B) construction or operation of--
                          ``(i) an electric generation, transmission, or 
                      distribution facility located on tribal land; or
                          ``(ii) a facility to process or refine energy 
                      resources developed on tribal land; and
            ``(2) a lease or business agreement described in paragraph 
        (1) shall not require review by or the approval of the Secretary 
        under section 2103 of the Revised Statutes (25 U.S.C. 81), or 
        any other provision of law, if--
                    ``(A) the lease or business agreement is executed 
                pursuant to a tribal energy resource agreement approved 
                by the Secretary under subsection (e);
                    ``(B) the term of the lease or business agreement 
                does not exceed--
                          ``(i) 30 years; or
                          ``(ii) in the case of a lease for the 
                      production of oil resources, gas resources, or 
                      both, 10 years and as long thereafter as oil or 
                      gas is produced in paying quantities; and
                    ``(C) the Indian tribe has entered into a tribal 
                energy resource agreement with the Secretary, as 
                described in subsection (e), relating to the development 
                of energy resources on tribal land (including the 
                periodic review and evaluation of the activities of the 
                Indian tribe under the agreement, to be conducted 
                pursuant to subsection (e)(2)(D)(i)).

    ``(b) Rights-of-Way for Pipelines or Electric Transmission or 
Distribution Lines.--An Indian tribe may grant a right-of-way over 
tribal land for a pipeline or an electric transmission or distribution 
line without review or approval by the Secretary if--
            ``(1) the right-of-way is executed in accordance with a 
        tribal energy resource agreement approved by the Secretary under 
        subsection (e);
            ``(2) the term of the right-of-way does not exceed 30 years;
            ``(3) the pipeline or electric transmission or distribution 
        line serves--

[[Page 119 STAT. 770]]

                    ``(A) an electric generation, transmission, or 
                distribution facility located on tribal land; or
                    ``(B) a facility located on tribal land that 
                processes or refines energy resources developed on 
                tribal land; and
            ``(4) the Indian tribe has entered into a tribal energy 
        resource agreement with the Secretary, as described in 
        subsection (e), relating to the development of energy resources 
        on tribal land (including the periodic review and evaluation of 
        the activities of the Indian tribe under an agreement described 
        in subparagraphs (D) and (E) of subsection (e)(2)).

    ``(c) Renewals.--A lease or business agreement entered into, or a 
right-of-way granted, by an Indian tribe under this section may be 
renewed at the discretion of the Indian tribe in accordance with this 
section.
    ``(d) Validity.--No lease, business agreement, or right-of-way 
relating to the development of tribal energy resources under this 
section shall be valid unless the lease, business agreement, or right-
of-way is authorized by a tribal energy resource agreement approved by 
the Secretary under subsection (e)(2).
    ``(e) Tribal Energy Resource Agreements.--
            ``(1) On the date on which regulations are promulgated under 
        paragraph (8), an Indian tribe may submit to the Secretary for 
        approval a tribal energy resource agreement governing leases, 
        business agreements, and rights-of-way under this section.
            ``(2)(A) <<NOTE: Deadlines.>> Not later than 270 days after 
        the date on which the Secretary receives a tribal energy 
        resource agreement from an Indian tribe under paragraph (1), or 
        not later than 60 days after the Secretary receives a revised 
        tribal energy resource agreement from an Indian tribe under 
        paragraph (4)(C) (or a later date, as agreed to by the Secretary 
        and the Indian tribe), the Secretary shall approve or disapprove 
        the tribal energy resource agreement.
            ``(B) The Secretary shall approve a tribal energy resource 
        agreement submitted under paragraph (1) if--
                    ``(i) the Secretary determines that the Indian tribe 
                has demonstrated that the Indian tribe has sufficient 
                capacity to regulate the development of energy resources 
                of the Indian tribe;
                    ``(ii) the tribal energy resource agreement includes 
                provisions required under subparagraph (D); and
                    ``(iii) the tribal energy resource agreement 
                includes provisions that, with respect to a lease, 
                business agreement, or right-of-way under this section--
                          ``(I) ensure the acquisition of necessary 
                      information from the applicant for the lease, 
                      business agreement, or right-of-way;
                          ``(II) address the term of the lease or 
                      business agreement or the term of conveyance of 
                      the right-of-way;
                          ``(III) address amendments and renewals;
                          ``(IV) address the economic return to the 
                      Indian tribe under leases, business agreements, 
                      and rights-of-way;
                          ``(V) address technical or other relevant 
                      requirements;

[[Page 119 STAT. 771]]

                          ``(VI) establish requirements for 
                      environmental review in accordance with 
                      subparagraph (C);
                          ``(VII) ensure compliance with all applicable 
                      environmental laws, including a requirement that 
                      each lease, business agreement, and right-of-way 
                      state that the lessee, operator, or right-of-way 
                      grantee shall comply with all such laws;
                          ``(VIII) identify final approval authority;
                          ``(IX) provide for public notification of 
                      final approvals;
                          ``(X) establish a process for consultation 
                      with any affected States regarding off-reservation 
                      impacts, if any, identified under subparagraph 
                      (C)(i);
                          ``(XI) describe the remedies for breach of the 
                      lease, business agreement, or right-of-way;
                          ``(XII) require each lease, business 
                      agreement, and right-of-way to include a statement 
                      that, if any of its provisions violates an express 
                      term or requirement of the tribal energy resource 
                      agreement pursuant to which the lease, business 
                      agreement, or right-of-way was executed--
                                    ``(aa) the provision shall be null 
                                and void; and
                                    ``(bb) if the Secretary determines 
                                the provision to be material, the 
                                Secretary may suspend or rescind the 
                                lease, business agreement, or right-of-
                                way or take other appropriate action 
                                that the Secretary determines to be in 
                                the best interest of the Indian tribe;
                          ``(XIII) require each lease, business 
                      agreement, and right-of-way to provide that it 
                      will become effective on the date on which a copy 
                      of the executed lease, business agreement, or 
                      right-of-way is delivered to the Secretary in 
                      accordance with regulations promulgated under 
                      paragraph (8);
                          ``(XIV) include citations to tribal laws, 
                      regulations, or procedures, if any, that set out 
                      tribal remedies that must be exhausted before a 
                      petition may be submitted to the Secretary under 
                      paragraph (7)(B);
                          ``(XV) specify the financial assistance, if 
                      any, to be provided by the Secretary to the Indian 
                      tribe to assist in implementation of the tribal 
                      energy resource agreement, including environmental 
                      review of individual projects; and
                          ``(XVI) in accordance with the regulations 
                      promulgated by the Secretary under paragraph (8), 
                      require that the Indian tribe, as soon as 
                      practicable after receipt of a notice by the 
                      Indian tribe, give written notice to the Secretary 
                      of--
                                    ``(aa) any breach or other violation 
                                by another party of any provision in a 
                                lease, business agreement, or right-of-
                                way entered into under the tribal energy 
                                resource agreement; and
                                    ``(bb) any activity or occurrence 
                                under a lease, business agreement, or 
                                right-of-way that constitutes a 
                                violation of Federal or tribal 
                                environmental laws.

[[Page 119 STAT. 772]]

                    ``(C) Tribal energy resource agreements submitted 
                under paragraph (1) shall establish, and include 
                provisions to ensure compliance with, an environmental 
                review process that, with respect to a lease, business 
                agreement, or right-of-way under this section, provides 
                for, at a minimum--
                          ``(i) the identification and evaluation of all 
                      significant environmental effects (as compared to 
                      a no-action alternative), including effects on 
                      cultural resources;
                          ``(ii) the identification of proposed 
                      mitigation measures, if any, and incorporation of 
                      appropriate mitigation measures into the lease, 
                      business agreement, or right-of-way;
                          ``(iii) a process for ensuring that--
                                    ``(I) the public is informed of, and 
                                has an opportunity to comment on, the 
                                environmental impacts of the proposed 
                                action; and
                                    ``(II) responses to relevant and 
                                substantive comments are provided, 
                                before tribal approval of the lease, 
                                business agreement, or right-of-way;
                          ``(iv) sufficient administrative support and 
                      technical capability to carry out the 
                      environmental review process; and
                          ``(v) oversight by the Indian tribe of energy 
                      development activities by any other party under 
                      any lease, business agreement, or right-of-way 
                      entered into pursuant to the tribal energy 
                      resource agreement, to determine whether the 
                      activities are in compliance with the tribal 
                      energy resource agreement and applicable Federal 
                      environmental laws.
                    ``(D) A tribal energy resource agreement between the 
                Secretary and an Indian tribe under this subsection 
                shall include--
                          ``(i) provisions requiring the Secretary to 
                      conduct a periodic review and evaluation to 
                      monitor the performance of the activities of the 
                      Indian tribe associated with the development of 
                      energy resources under the tribal energy resource 
                      agreement; and
                          ``(ii) if a periodic review and evaluation, or 
                      an investigation, by the Secretary of any breach 
                      or violation described in a notice provided by the 
                      Indian tribe to the Secretary in accordance with 
                      subparagraph (B)(iii)(XVI), results in a finding 
                      by the Secretary of imminent jeopardy to a 
                      physical trust asset arising from a violation of 
                      the tribal energy resource agreement or applicable 
                      Federal laws, provisions authorizing the Secretary 
                      to take actions determined by the Secretary to be 
                      necessary to protect the asset, including 
                      reassumption of responsibility for activities 
                      associated with the development of energy 
                      resources on tribal land until the violation and 
                      any condition that caused the jeopardy are 
                      corrected.
                    ``(E) Periodic review and evaluation under 
                subparagraph (D) shall be conducted on an annual basis, 
                except that, after the third annual review and 
                evaluation, the Secretary and the Indian tribe may 
                mutually agree to amend the tribal energy resource 
                agreement to authorize

[[Page 119 STAT. 773]]

                the review and evaluation under subparagraph (D) to be 
                conducted once every 2 years.
            ``(3) <<NOTE: Notice. Public information.>> The Secretary 
        shall provide notice and opportunity for public comment on 
        tribal energy resource agreements submitted for approval under 
        paragraph (1). The Secretary's review of a tribal energy 
        resource agreement shall be limited to activities specified by 
        the provisions of the tribal energy resource agreement.
            ``(4) <<NOTE: Deadline.>> If the Secretary disapproves a 
        tribal energy resource agreement submitted by an Indian tribe 
        under paragraph (1), the Secretary shall, not later than 10 days 
        after the date of disapproval--
                    ``(A) <<NOTE: Notification.>> notify the Indian 
                tribe in writing of the basis for the disapproval;
                    ``(B) identify what changes or other actions are 
                required to address the concerns of the Secretary; and
                    ``(C) provide the Indian tribe with an opportunity 
                to revise and resubmit the tribal energy resource 
                agreement.
            ``(5) If an Indian tribe executes a lease or business 
        agreement, or grants a right-of-way, in accordance with a tribal 
        energy resource agreement approved under this subsection, the 
        Indian tribe shall, in accordance with the process and 
        requirements under regulations promulgated under paragraph (8), 
        provide to the Secretary--
                    ``(A) <<NOTE: Records.>> a copy of the lease, 
                business agreement, or right-of-way document (including 
                all amendments to and renewals of the document); and
                    ``(B) in the case of a tribal energy resource 
                agreement or a lease, business agreement, or right-of-
                way that permits payments to be made directly to the 
                Indian tribe, information and documentation of those 
                payments sufficient to enable the Secretary to discharge 
                the trust responsibility of the United States to enforce 
                the terms of, and protect the rights of the Indian tribe 
                under, the lease, business agreement, or right-of-way.
            ``(6)(A) In carrying out this section, the Secretary shall--
                    ``(i) act in accordance with the trust 
                responsibility of the United States relating to mineral 
                and other trust resources; and
                    ``(ii) act in good faith and in the best interests 
                of the Indian tribes.
            ``(B) Subject to the provisions of subsections (a)(2), (b), 
        and (c) waiving the requirement of Secretarial approval of 
        leases, business agreements, and rights-of-way executed pursuant 
        to tribal energy resource agreements approved under this 
        section, and the provisions of subparagraph (D), nothing in this 
        section shall absolve the United States from any responsibility 
        to Indians or Indian tribes, including, but not limited to, 
        those which derive from the trust relationship or from any 
        treaties, statutes, and other laws of the United States, 
        Executive orders, or agreements between the United States and 
        any Indian tribe.
            ``(C) The Secretary shall continue to fulfill the trust 
        obligation of the United States to ensure that the rights and 
        interests of an Indian tribe are protected if--
                    ``(i) any other party to a lease, business 
                agreement, or right-of-way violates any applicable 
                Federal law or the

[[Page 119 STAT. 774]]

                terms of any lease, business agreement, or right-of-way 
                under this section; or
                    ``(ii) any provision in a lease, business agreement, 
                or right-of-way violates the tribal energy resource 
                agreement pursuant to which the lease, business 
                agreement, or right-of-way was executed.
            ``(D)(i) In this subparagraph, the term `negotiated term' 
        means any term or provision that is negotiated by an Indian 
        tribe and any other party to a lease, business agreement, or 
        right-of-way entered into pursuant to an approved tribal energy 
        resource agreement.
            ``(ii) Notwithstanding subparagraph (B), the United States 
        shall not be liable to any party (including any Indian tribe) 
        for any negotiated term of, or any loss resulting from the 
        negotiated terms of, a lease, business agreement, or right-of-
        way executed pursuant to and in accordance with a tribal energy 
        resource agreement approved by the Secretary under paragraph 
        (2).
            ``(7)(A) In this paragraph, the term `interested party' 
        means any person (including an entity) that has demonstrated 
        that an interest of the person has sustained, or will sustain, 
        an adverse environmental impact as a result of the failure of an 
        Indian tribe to comply with a tribal energy resource agreement 
        of the Indian tribe approved by the Secretary under paragraph 
        (2).
            ``(B) After exhaustion of any tribal remedy, and in 
        accordance with regulations promulgated by the Secretary under 
        paragraph (8), an interested party may submit to the Secretary a 
        petition to review the compliance by an Indian tribe with a 
        tribal energy resource agreement of the Indian tribe approved by 
        the Secretary under paragraph (2).
            ``(C)(i) <<NOTE: Deadline.>> Not later than 20 days after 
        the date on which the Secretary receives a petition under 
        subparagraph (B), the Secretary shall--
                    ``(I) <<NOTE: Records.>> provide to the Indian tribe 
                a copy of the petition; and
                    ``(II) consult with the Indian tribe regarding any 
                noncompliance alleged in the petition.
            ``(ii) <<NOTE: Deadline. Claims.>> Not later than 45 days 
        after the date on which a consultation under clause (i)(II) 
        takes place, the Indian tribe shall respond to any claim made in 
        a petition under subparagraph (B).
            ``(iii) The Secretary shall act in accordance with 
        subparagraphs (D) and (E) only if the Indian tribe--
                    ``(I) denies, or fails to respond to, each claim 
                made in the petition within the period described in 
                clause (ii); or
                    ``(II) fails, refuses, or is unable to cure or 
                otherwise resolve each claim made in the petition within 
                a reasonable period, as determined by the Secretary, 
                after the expiration of the period described in clause 
                (ii).
            ``(D)(i) <<NOTE: Deadline.>> Not later than 120 days after 
        the date on which the Secretary receives a petition under 
        subparagraph (B), the Secretary shall determine whether the 
        Indian tribe is not in compliance with the tribal energy 
        resource agreement.
            ``(ii) The Secretary may adopt procedures under paragraph 
        (8) authorizing an extension of time, not to exceed 120 days,

[[Page 119 STAT. 775]]

        for making the determination under clause (i) in any case in 
        which the Secretary determines that additional time is necessary 
        to evaluate the allegations of the petition.
            ``(iii) Subject to subparagraph (E), if the Secretary 
        determines that the Indian tribe is not in compliance with the 
        tribal energy resource agreement, the Secretary shall take such 
        action as the Secretary determines to be necessary to ensure 
        compliance with the tribal energy resource agreement, 
        including--
                    ``(I) temporarily suspending any activity under a 
                lease, business agreement, or right-of-way under this 
                section until the Indian tribe is in compliance with the 
                approved tribal energy resource agreement; or
                    ``(II) rescinding approval of all or part of the 
                tribal energy resource agreement, and if all of the 
                agreement is rescinded, reassuming the responsibility 
                for approval of any future leases, business agreements, 
                or rights-of-way described in subsection (a) or (b).
            ``(E) Before taking an action described in subparagraph 
        (D)(iii), the Secretary shall--
                    ``(i) make a written determination that describes 
                the manner in which the tribal energy resource agreement 
                has been violated;
                    ``(ii) <<NOTE: Notice.>> provide the Indian tribe 
                with a written notice of the violations together with 
                the written determination; and
                    ``(iii) before taking any action described in 
                subparagraph (D)(iii) or seeking any other remedy, 
                provide the Indian tribe with a hearing and a reasonable 
                opportunity to attain compliance with the tribal energy 
                resource agreement.
            ``(F) An Indian tribe described in subparagraph (E) shall 
        retain all rights to appeal under any regulation promulgated by 
        the Secretary.
            ``(8) <<NOTE: Deadline. Regulations.>> Not later than 1 year 
        after the date of enactment of the Energy Policy Act of 2005, 
        the Secretary shall promulgate regulations that implement this 
        subsection, including--
                    ``(A) criteria to be used in determining the 
                capacity of an Indian tribe under paragraph (2)(B)(i), 
                including the experience of the Indian tribe in managing 
                natural resources and financial and administrative 
                resources available for use by the Indian tribe in 
                implementing the approved tribal energy resource 
                agreement of the Indian tribe;
                    ``(B) a process and requirements in accordance with 
                which an Indian tribe may--
                          ``(i) voluntarily rescind a tribal energy 
                      resource agreement approved by the Secretary under 
                      this subsection; and
                          ``(ii) return to the Secretary the 
                      responsibility to approve any future lease, 
                      business agreement, or right-of-way under this 
                      subsection;
                    ``(C) provisions establishing the scope of, and 
                procedures for, the periodic review and evaluation 
                described in subparagraphs (D) and (E) of paragraph (2), 
                including

[[Page 119 STAT. 776]]

                provisions for review of transactions, reports, site 
                inspections, and any other review activities the 
                Secretary determines to be appropriate; and
                    ``(D) provisions describing final agency actions 
                after exhaustion of administrative appeals from 
                determinations of the Secretary under paragraph (7).

    ``(f) No Effect on Other Law.--Nothing in this section affects the 
application of--
            ``(1) any Federal environmental law;
            ``(2) the Surface Mining Control and Reclamation Act of 1977 
        (30 U.S.C. 1201 et seq.); or
            ``(3) except as otherwise provided in this title, the Indian 
        Mineral Development Act of 1982 (25 U.S.C. 2101 et seq.).

    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary such sums as are necessary for each of 
fiscal years 2006 through 2016 to carry out this section and to make 
grants or provide other appropriate assistance to Indian tribes to 
assist the Indian tribes in developing and implementing tribal energy 
resource agreements in accordance with this section.

``SEC. 2605. <<NOTE: 25 USC 3505.>> FEDERAL POWER MARKETING 
            ADMINISTRATIONS.

    ``(a) Definitions.--In this section:
            ``(1) The term `Administrator' means the Administrator of 
        the Bonneville Power Administration and the Administrator of the 
        Western Area Power Administration.
            ``(2) The term `power marketing administration' means--
                    ``(A) the Bonneville Power Administration;
                    ``(B) the Western Area Power Administration; and
                    ``(C) any other power administration the power 
                allocation of which is used by or for the benefit of an 
                Indian tribe located in the service area of the 
                administration.

    ``(b) Encouragement of Indian Tribal Energy Development.--Each 
Administrator shall encourage Indian tribal energy development by taking 
such actions as the Administrators determine to be appropriate, 
including administration of programs of the power marketing 
administration, in accordance with this section.
    ``(c) Action by Administrators.--In carrying out this section, in 
accordance with laws in existence on the date of enactment of the Energy 
Policy Act of 2005--
            ``(1) each Administrator shall consider the unique 
        relationship that exists between the United States and Indian 
        tribes;
            ``(2) power allocations from the Western Area Power 
        Administration to Indian tribes may be used to meet firming and 
        reserve needs of Indian-owned energy projects on Indian land;
            ``(3) the Administrator of the Western Area Power 
        Administration may purchase non-federally generated power from 
        Indian tribes to meet the firming and reserve requirements of 
        the Western Area Power Administration; and
            ``(4) each Administrator shall not--
                    ``(A) pay more than the prevailing market price for 
                an energy product; or
                    ``(B) obtain less than prevailing market terms and 
                conditions.

    ``(d) Assistance for Transmission System Use.--

[[Page 119 STAT. 777]]

            ``(1) An Administrator may provide technical assistance to 
        Indian tribes seeking to use the high-voltage transmission 
        system for delivery of electric power.
            ``(2) The costs of technical assistance provided under 
        paragraph (1) shall be funded--
                    ``(A) by the Secretary of Energy using 
                nonreimbursable funds appropriated for that purpose; or
                    ``(B) by any appropriate Indian tribe.

    ``(e) Power Allocation Study.--
Not <<NOTE: Deadline. Reports.>> later than 2 years after the date of 
enactment of the Energy Policy Act of 2005, the Secretary of Energy 
shall submit to Congress a report that--
            ``(1) describes the use by Indian tribes of Federal power 
        allocations of the power marketing administration (or power sold 
        by the Southwestern Power Administration) to or for the benefit 
        of Indian tribes in a service area of the power marketing 
        administration; and
            ``(2) identifies--
                    ``(A) the quantity of power allocated to, or used 
                for the benefit of, Indian tribes by the Western Area 
                Power Administration;
                    ``(B) the quantity of power sold to Indian tribes by 
                any other power marketing administration; and
                    ``(C) barriers that impede tribal access to and use 
                of Federal power, including an assessment of 
                opportunities to remove those barriers and improve the 
                ability of power marketing administrations to deliver 
                Federal power.

    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $750,000, non-reimbursable, to 
remain available until expended.

``SEC. 2606. <<NOTE: 25 USC 3506.>> WIND AND HYDROPOWER FEASIBILITY 
            STUDY.

    ``(a) Study.--The Secretary of Energy, in coordination with the 
Secretary of the Army and the Secretary, shall conduct a study of the 
cost and feasibility of developing a demonstration project that uses 
wind energy generated by Indian tribes and hydropower generated by the 
Army Corps of Engineers on the Missouri River to supply firming power to 
the Western Area Power Administration.
    ``(b) Scope of Study.--The study shall--
            ``(1) determine the economic and engineering feasibility of 
        blending wind energy and hydropower generated from the Missouri 
        River dams operated by the Army Corps of Engineers, including an 
        assessment of the costs and benefits of blending wind energy and 
        hydropower compared to current sources used for firming power to 
        the Western Area Power Administration;
            ``(2) review historical and projected requirements for, 
        patterns of availability and use of, and reasons for historical 
        patterns concerning the availability of firming power;
            ``(3) assess the wind energy resource potential on tribal 
        land and projected cost savings through a blend of wind and 
        hydropower over a 30-year period;
            ``(4) determine seasonal capacity needs and associated 
        transmission upgrades for integration of tribal wind generation 
        and identify costs associated with these activities;
            ``(5) include an independent tribal engineer and a Western 
        Area Power Administration customer representative as study team 
        members; and

[[Page 119 STAT. 778]]

            ``(6) incorporate, to the extent appropriate, the results of 
        the Dakotas Wind Transmission study prepared by the Western Area 
        Power Administration.

    ``(c) Report.--Not later than 1 year after the date of enactment of 
the Energy Policy Act of 2005, the Secretary of Energy, the Secretary, 
and the Secretary of the Army shall submit to Congress a report that 
describes the results of the study, including--
            ``(1) an analysis and comparison of the potential energy 
        cost or benefits to the customers of the Western Area Power 
        Administration through the use of combined wind and hydropower;
            ``(2) an economic and engineering evaluation of whether a 
        combined wind and hydropower system can reduce reservoir 
        fluctuation, enhance efficient and reliable energy production, 
        and provide Missouri River management flexibility;
            ``(3) if found feasible, recommendations for a demonstration 
        project to be carried out by the Western Area Power 
        Administration, in partnership with an Indian tribal government 
        or tribal energy resource development organization, and Western 
        Area Power Administration customers to demonstrate the 
        feasibility and potential of using wind energy produced on 
        Indian land to supply firming energy to the Western Area Power 
        Administration; and
            ``(4) an identification of--
                    ``(A) the economic and environmental costs of, or 
                benefits to be realized through, a Federal-tribal-
                customer partnership; and
                    ``(B) the manner in which a Federal-tribal-customer 
                partnership could contribute to the energy security of 
                the United States.

    ``(d) Funding.--
            ``(1) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this section $1,000,000, to 
        remain available until expended.
            ``(2) Nonreimbursability.--Costs incurred by the Secretary 
        in carrying out this section shall be nonreimbursable.''.

    (b) Conforming Amendments.--The table of contents for the Energy 
Policy Act of 1992 is amended by striking the items relating to title 
XXVI and inserting the following:

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

SEC. 504. <<NOTE: 25 USC 3501 note.>> CONSULTATION WITH INDIAN TRIBES.

    In carrying out this title and the amendments made by this title, 
the Secretary and the Secretary of the Interior shall, as appropriate 
and to the maximum extent practicable, involve and consult with Indian 
tribes.

SEC. 505. FOUR CORNERS TRANSMISSION LINE PROJECT AND ELECTRIFICATION.

    (a) Transmission Line Project.--The Dine Power Authority, an 
enterprise of the Navajo Nation, shall be eligible to receive grants and 
other assistance under section 217 of the Department of Energy 
Organization Act, as added by section 502, and section

[[Page 119 STAT. 779]]

2602 of the Energy Policy Act of 1992, as amended by this Act, for 
activities associated with the development of a transmission line from 
the Four Corners Area to southern Nevada, including related power 
generation opportunities.
    (b) Navajo Electrification.--Section 602 of Public Law 106-511 (114 
Stat. 2376) is amended--
            (1) in subsection (a)--
                    (A) in the first sentence, by striking ``5-year'' 
                and inserting ``10-year''; and
                    (B) in the third sentence, by striking ``2006'' and 
                inserting ``2011''; and
            (2) in the first sentence of subsection (e) by striking 
        ``2006'' and inserting ``2011''.

SEC. 506. <<NOTE: 42 USC 16001.>> ENERGY EFFICIENCY IN FEDERALLY 
            ASSISTED HOUSING.

    (a) In General.--The Secretary of Housing and Urban Development 
shall promote energy conservation in housing that is located on Indian 
land and assisted with Federal resources through--
            (1) the use of energy-efficient technologies and innovations 
        (including the procurement of energy-efficient refrigerators and 
        other appliances);
            (2) the promotion of shared savings contracts; and
            (3) the use and implementation of such other similar 
        technologies and innovations as the Secretary of Housing and 
        Urban Development considers to be appropriate.

    (b) Amendment.--Section 202(2) of the Native American Housing and 
Self-Determination Act of 1996 (25 U.S.C. 4132(2)) is amended by 
inserting ``improvement to achieve greater energy efficiency,'' after 
``planning,''.

                        TITLE VI--NUCLEAR MATTERS

  Subtitle A--Price-Anderson <<NOTE: Price-Anderson Amendments Act of 
2005.>> Act Amendments

SEC. 601. <<NOTE: 42 USC 2011 note.>> SHORT TITLE.

    This subtitle may be cited as the ``Price-Anderson Amendments Act of 
2005''.

SEC. 602. EXTENSION OF INDEMNIFICATION AUTHORITY.

    (a) Indemnification of Nuclear Regulatory Commission Licensees.--
Section 170 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(c)) is 
amended--
            (1) in the subsection heading, by striking ``Licenses'' and 
        inserting ``Licensees''; and
            (2) by striking ``December 31, 2003'' each place it appears 
        and inserting ``December 31, 2025''.

    (b) Indemnification of Department Contractors.--Section 170 d.(1)(A) 
of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)(1)(A)) is amended by 
striking ``December 31, 2006'' and inserting ``December 31, 2025''.
    (c) Indemnification of Nonprofit Educational Institutions.--Section 
170 k. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(k)) is amended 
by striking ``August 1, 2002'' each place it appears and inserting 
``December 31, 2025''.

[[Page 119 STAT. 780]]

SEC. 603. MAXIMUM ASSESSMENT.

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

SEC. 604. DEPARTMENT LIABILITY LIMIT.

    (a) Indemnification of Department Contractors.--Section 170 d. of 
the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) is amended by striking 
paragraph (2) and inserting the following:
    ``(2) In an agreement of indemnification entered into under 
paragraph (1), the Secretary--
            ``(A) may require the contractor to provide and maintain 
        financial protection of such a type and in such amounts as the 
        Secretary shall determine to be appropriate to cover public 
        liability arising out of or in connection with the contractual 
        activity; and
            ``(B) shall indemnify the persons indemnified against such 
        liability above the amount of the financial protection required, 
        in the amount of $10,000,000,000 (subject to adjustment for 
        inflation under subsection t.), in the aggregate, for all 
        persons indemnified in connection with the contract and for each 
        nuclear incident, including such legal costs of the contractor 
        as are approved by the Secretary.''.

    (b) Contract Amendments.--Section 170 d. of the Atomic Energy Act of 
1954 (42 U.S.C. 2210(d)) is further amended by striking paragraph (3) 
and inserting the following--
    ``(3) All agreements of indemnification under which the Department 
of Energy (or its predecessor agencies) may be required to indemnify any 
person under this section shall be deemed to be amended, on the date of 
enactment of the Price-Anderson Amendments Act of 2005, to reflect the 
amount of indemnity for public liability and any applicable financial 
protection required of the contractor under this subsection.''.
    (c) Liability Limit.--Section 170 e.(1)(B) of the Atomic Energy Act 
of 1954 (42 U.S.C. 2210(e)(1)(B)) is amended--
            (1) by striking ``the maximum amount of financial protection 
        required under subsection b. or''; and
            (2) by striking ``paragraph (3) of subsection d., whichever 
        amount is more'' and inserting ``paragraph (2) of subsection 
        d.''.

[[Page 119 STAT. 781]]

SEC. 605. INCIDENTS OUTSIDE THE UNITED STATES.

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

SEC. 606. REPORTS.

    Section 170 p. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(p)) 
is amended by striking ``August 1, 1998'' and inserting ``December 31, 
2021''.

SEC. 607. INFLATION ADJUSTMENT.

    Section 170 t. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(t)) 
is amended--
            (1) by redesignating paragraph (2) as paragraph (3); and
            (2) by inserting after paragraph (1) the following:

    ``(2) The Secretary shall adjust the amount of indemnification 
provided under an agreement of indemnification under subsection d. not 
less than once during each 5-year period following July 1, 2003, in 
accordance with the aggregate percentage change in the Consumer Price 
Index since--
            ``(A) that date, in the case of the first adjustment under 
        this paragraph; or
            ``(B) the previous adjustment under this paragraph.''.

SEC. 608. TREATMENT OF MODULAR REACTORS.

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

SEC. 609. <<NOTE: 42 USC 2210 note.>> APPLICABILITY.

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

SEC. 610. CIVIL PENALTIES.

    (a) Repeal of Automatic Remission.--Section 234A b.(2) of the Atomic 
Energy Act of 1954 (42 U.S.C. 2282a(b)(2)) is amended by striking the 
last sentence.
    (b) Limitation for Not-for-Profit Institutions.--Subsection d. of 
section 234A of the Atomic Energy Act of 1954 (42 U.S.C. 2282a(d)) is 
amended to read as follows:
    ``d.(1) Notwithstanding subsection a., in the case of any not-for-
profit contractor, subcontractor, or supplier, the total amount of civil 
penalties paid under subsection a. may not exceed the total amount of 
fees paid within any 1-year period (as determined by the Secretary) 
under the contract under which the violation occurs.

[[Page 119 STAT. 782]]

    ``(2) For purposes of this section, the term `not-for-profit' means 
that no part of the net earnings of the contractor, subcontractor, or 
supplier inures to the benefit of any natural person or for-profit 
artificial person.''.
    (c) Effective Date.--The <<NOTE: 42 USC 2282a note.>> amendments 
made by this section shall not apply to any violation of the Atomic 
Energy Act of 1954 (42 U.S.C. 2011 et seq.) occurring under a contract 
entered into before the date of enactment of this section.

                   Subtitle B--General Nuclear Matters

SEC. 621. LICENSES.

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

SEC. 622. NUCLEAR REGULATORY COMMISSION SCHOLARSHIP AND FELLOWSHIP 
            PROGRAM.

    (a) In General.--Chapter 19 of the Atomic Energy Act of 1954 is 
amended by inserting after section 242 (42 U.S.C. 2015a) the following:

``SEC. 243. <<NOTE: 42 USC 2015b.>> SCHOLARSHIP AND FELLOWSHIP PROGRAM.

    ``a. Scholarship Program.--To enable students to study, for at least 
1 academic semester or equivalent term, science, engineering, or another 
field of study that the Commission determines is in a critical skill 
area related to the regulatory mission of the Commission, the Commission 
may carry out a program to--
            ``(1) award scholarships to undergraduate students who--
                    ``(A) are United States citizens; and
                    ``(B) enter into an agreement under subsection c. to 
                be employed by the Commission in the area of study for 
                which the scholarship is awarded.

    ``b. Fellowship Program.--To enable students to pursue education in 
science, engineering, or another field of study that the Commission 
determines is in a critical skill area related to its regulatory 
mission, in a graduate or professional degree program offered by an 
institution of higher education in the United States, the Commission may 
carry out a program to--
            ``(1) award fellowships to graduate students who--
                    ``(A) are United States citizens; and
                    ``(B) enter into an agreement under subsection c. to 
                be employed by the Commission in the area of study for 
                which the fellowship is awarded.

    ``c. Requirements.--
            ``(1) In general.--As a condition of receiving a scholarship 
        or fellowship under subsection a. or b., a recipient of the 
        scholarship or fellowship shall enter into an agreement with the 
        Commission under which, in return for the assistance, the 
        recipient shall--
                    ``(A) maintain satisfactory academic progress in the 
                studies of the recipient, as determined by criteria 
                established by the Commission;
                    ``(B) agree that failure to maintain satisfactory 
                academic progress shall constitute grounds on which the 
                Commission may terminate the assistance;

[[Page 119 STAT. 783]]

                    ``(C) on completion of the academic course of study 
                in connection with which the assistance was provided, 
                and in accordance with criteria established by the 
                Commission, engage in employment by the Commission for a 
                period specified by the Commission, that shall be not 
                less than 1 time and not more than 3 times the period 
                for which the assistance was provided; and
                    ``(D) if the recipient fails to meet the 
                requirements of subparagraph (A), (B), or (C), reimburse 
                the United States Government for--
                          ``(i) the entire amount of the assistance 
                      provided the recipient under the scholarship or 
                      fellowship; and
                          ``(ii) interest at a rate determined by the 
                      Commission.
            ``(2) Waiver or suspension.--The Commission may establish 
        criteria for the partial or total waiver or suspension of any 
        obligation of service or payment incurred by a recipient of a 
        scholarship or fellowship under this section.

    ``d. Competitive Process.--Recipients of scholarships or fellowships 
under this section shall be selected through a competitive process 
primarily on the basis of academic merit and such other criteria as the 
Commission may establish, with consideration given to financial need and 
the goal of promoting the participation of individuals identified in 
section 33 or 34 of the Science and Engineering Equal Opportunities Act 
(42 U.S.C. 1885a, 1885b).
    ``e. Direct Appointment.--The Commission may appoint directly, with 
no further competition, public notice, or consideration of any other 
potential candidate, an individual who has--
            ``(1) received a scholarship or fellowship awarded by the 
        Commission under this section; and
            ``(2) completed the academic program for which the 
        scholarship or fellowship was awarded.''.

    (b) Conforming Amendment.--The table of sections of the Atomic 
Energy Act of 1954 (42 U.S.C. prec. 2011) is amended by adding after the 
item relating to section 242 the following:

``Sec. 243. Scholarship and fellowship program.''.

SEC. 623. COST RECOVERY FROM GOVERNMENT AGENCIES.

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

SEC. 624. ELIMINATION OF PENSION OFFSET FOR CERTAIN REHIRED FEDERAL 
            RETIREES.

    (a) In General.--Chapter 14 of the Atomic Energy Act of 1954 (42 
U.S.C. 2201 et seq.) is amended by adding at the end the following:

[[Page 119 STAT. 784]]

``SEC. 170C. <<NOTE: 42 USC 2210c.>> ELIMINATION OF PENSION OFFSET FOR 
            CERTAIN REHIRED FEDERAL RETIREES.

    ``a. In General.--The Commission may waive the application of 
section 8344 or 8468 of title 5, United States Code, on a case-by-case 
basis for employment of an annuitant--
            ``(1) in a position of the Commission for which there is 
        exceptional difficulty in recruiting or retaining a qualified 
        employee; or
            ``(2) when a temporary emergency hiring need exists.

    ``b. Procedures.--The Commission shall prescribe procedures for the 
exercise of authority under this section, including--
            ``(1) criteria for any exercise of authority; and
            ``(2) procedures for a delegation of authority.

    ``c. Effect of Waiver.--An employee as to whom a waiver under this 
section is in effect shall not be considered an employee for purposes of 
subchapter II of chapter 83, or chapter 84, of title 5, United States 
Code.''.
    (b) Conforming Amendment.--The table of sections of the Atomic 
Energy Act of 1954 (42 U.S.C. prec. 2011) is amended by adding at the 
end of the items relating to chapter 14 the following:

``Sec. 170C. Elimination of pension offset for certain rehired Federal 
           retirees.''.

SEC. 625. ANTITRUST REVIEW.

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

SEC. 626. DECOMMISSIONING.

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

SEC. 627. LIMITATION ON LEGAL FEE REIMBURSEMENT.

    Title II of the Energy Reorganization Act of 1974 (42 U.S.C. 5841 et 
seq.) is amended by adding at the end the following new section:


                 ``limitation on legal fee reimbursement


    ``Sec. 212. <<NOTE: 42 USC 5853.>> The Department of Energy shall 
not, except as required under a contract entered into before the date of 
enactment of this section, reimburse any contractor or subcontractor of 
the Department for any legal fees or expenses incurred with respect to a 
complaint subsequent to--
            ``(1) an adverse determination on the merits with respect to 
        such complaint against the contractor or subcontractor by the 
        Director of the Department of Energy's Office of Hearings

[[Page 119 STAT. 785]]

        and Appeals pursuant to part 708 of title 10, Code of Federal 
        Regulations, or by a Department of Labor Administrative Law 
        Judge pursuant to section 211 of this Act; or
            ``(2) an adverse final judgment by any State or Federal 
        court with respect to such complaint against the contractor or 
        subcontractor for wrongful termination or retaliation due to the 
        making of disclosures protected under chapter 12 of title 5, 
        United States Code, section 211 of this Act, or any comparable 
        State law,

unless the adverse determination or final judgment is reversed upon 
further administrative or judicial review.''.

SEC. 628. DECOMMISSIONING PILOT PROGRAM.

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

SEC. 629. WHISTLEBLOWER PROTECTION.

    (a) Definition of Employer.--Section 211(a)(2) of the Energy 
Reorganization Act of 1974 (42 U.S.C. 5851(a)(2)) is amended--
            (1) in subparagraph (C), by striking ``and'' at the end;
            (2) in subparagraph (D), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding at the end the following:
                    ``(E) a contractor or subcontractor of the 
                Commission;
                    ``(F) the Commission; and
                    ``(G) the Department of Energy.''.

    (b) De Novo Review.--Subsection (b) of such section 211 is amended 
by adding at the end the following new paragraph:
            ``(4) <<NOTE: Deadline.>> If the Secretary has not issued a 
        final decision within 1 year after the filing of a complaint 
        under paragraph (1), and there is no showing that such delay is 
        due to the bad faith of the person seeking relief under this 
        paragraph, such person may bring an action at law or equity for 
        de novo review in the appropriate district court of the United 
        States, which shall have jurisdiction over such an action 
        without regard to the amount in controversy.''.

SEC. 630. MEDICAL ISOTOPE PRODUCTION.

    Section 134 of the Atomic Energy Act of 1954 (42 U.S.C. 2160d) is 
amended--
            (1) in subsection a., by striking ``a. The Commission'' and 
        inserting ``a. In General.--Except as provided in subsection b., 
        the Commission'';
            (2) by redesignating subsection b. as subsection c.; and
            (3) by inserting after subsection a. the following:

    ``b. Medical Isotope Production.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Highly enriched uranium.--The term `highly 
                enriched uranium' means uranium enriched to include 
                concentration of U-235 above 20 percent.

[[Page 119 STAT. 786]]

                    ``(B) Medical isotope.--The term `medical isotope' 
                includes Molybdenum 99, Iodine 131, Xenon 133, and other 
                radioactive materials used to produce a 
                radiopharmaceutical for diagnostic, therapeutic 
                procedures or for research and development.
                    ``(C) Radiopharmaceutical.--The term 
                `radiopharmaceutical' means a radioactive isotope that--
                          ``(i) contains byproduct material combined 
                      with chemical or biological material; and
                          ``(ii) is designed to accumulate temporarily 
                      in a part of the body for therapeutic purposes or 
                      for enabling the production of a useful image for 
                      use in a diagnosis of a medical condition.
                    ``(D) Recipient country.--The term `recipient 
                country' means Canada, Belgium, France, Germany, and the 
                Netherlands.
            ``(2) Licenses.--The Commission may issue a license 
        authorizing the export (including shipment to and use at 
        intermediate and ultimate consignees specified in the license) 
        to a recipient country of highly enriched uranium for medical 
        isotope production if, in addition to any other requirements of 
        this Act (except subsection a.), the Commission determines 
        that--
                    ``(A) a recipient country that supplies an assurance 
                letter to the United States Government in connection 
                with the consideration by the Commission of the export 
                license application has informed the United States 
                Government that any intermediate consignees and the 
                ultimate consignee specified in the application are 
                required to use the highly enriched uranium solely to 
                produce medical isotopes; and
                    ``(B) the highly enriched uranium for medical 
                isotope production will be irradiated only in a reactor 
                in a recipient country that--
                          ``(i) uses an alternative nuclear reactor 
                      fuel; or
                          ``(ii) is the subject of an agreement with the 
                      United States Government to convert to an 
                      alternative nuclear reactor fuel when alternative 
                      nuclear reactor fuel can be used in the reactor.
            ``(3) Review of physical protection requirements.--
                    ``(A) In general.--The Commission shall review the 
                adequacy of physical protection requirements that, as of 
                the date of an application under paragraph (2), are 
                applicable to the transportation and storage of highly 
                enriched uranium for medical isotope production or 
                control of residual material after irradiation and 
                extraction of medical isotopes.
                    ``(B) Imposition of additional requirements.--If the 
                Commission determines that additional physical 
                protection requirements are necessary (including a limit 
                on the quantity of highly enriched uranium that may be 
                contained in a single shipment), the Commission shall 
                impose such requirements as license conditions or 
                through other appropriate means.
            ``(4) First report to congress.--

[[Page 119 STAT. 787]]

                    ``(A) NAS study.--The <<NOTE: Contracts.>> Secretary 
                shall enter into an arrangement with the National 
                Academy of Sciences to conduct a study to determine--
                          ``(i) the feasibility of procuring supplies of 
                      medical isotopes from commercial sources that do 
                      not use highly enriched uranium;
                          ``(ii) the current and projected demand and 
                      availability of medical isotopes in regular 
                      current domestic use;
                          ``(iii) the progress that is being made by the 
                      Department of Energy and others to eliminate all 
                      use of highly enriched uranium in reactor fuel, 
                      reactor targets, and medical isotope production 
                      facilities; and
                          ``(iv) the potential cost differential in 
                      medical isotope production in the reactors and 
                      target processing facilities if the products were 
                      derived from production systems that do not 
                      involve fuels and targets with highly enriched 
                      uranium.
                    ``(B) Feasibility.--For the purpose of this 
                subsection, the use of low enriched uranium to produce 
                medical isotopes shall be determined to be feasible if--
                          ``(i) low enriched uranium targets have been 
                      developed and demonstrated for use in the reactors 
                      and target processing facilities that produce 
                      significant quantities of medical isotopes to 
                      serve United States needs for such isotopes;
                          ``(ii) sufficient quantities of medical 
                      isotopes are available from low enriched uranium 
                      targets and fuel to meet United States domestic 
                      needs; and
                          ``(iii) the average anticipated total cost 
                      increase from production of medical isotopes in 
                      such facilities without use of highly enriched 
                      uranium is less than 10 percent.
                    ``(C) Report by the secretary.--Not later than 5 
                years after the date of enactment of the Energy Policy 
                Act of 2005, the Secretary shall submit to Congress a 
                report that--
                          ``(i) contains the findings of the National 
                      Academy of Sciences made in the study under 
                      subparagraph (A); and
                          ``(ii) discloses the existence of any 
                      commitments from commercial producers to provide 
                      domestic requirements for medical isotopes without 
                      use of highly enriched uranium consistent with the 
                      feasibility criteria described in subparagraph (B) 
                      not later than the date that is 4 years after the 
                      date of submission of the report.
            ``(5) Second report to congress.--If the study of the 
        National Academy of Sciences determines under paragraph 
        (4)(A)(i) that the procurement of supplies of medical isotopes 
        from commercial sources that do not use highly enriched uranium 
        is feasible, but the Secretary is unable to report the existence 
        of commitments under paragraph (4)(C)(ii), not later than the 
        date that is 6 years after the date of enactment of the Energy 
        Policy Act of 2005, the Secretary shall submit to Congress a 
        report that describes options for developing domestic supplies 
        of medical isotopes in quantities that are

[[Page 119 STAT. 788]]

        adequate to meet domestic demand without the use of highly 
        enriched uranium consistent with the cost increase described in 
        paragraph (4)(B)(iii).
            ``(6) Certification.--At such time as commercial facilities 
        that do not use highly enriched uranium are capable of meeting 
        domestic requirements for medical isotopes, within the cost 
        increase described in paragraph (4)(B)(iii) and without 
        impairing the reliable supply of medical isotopes for domestic 
        utilization, the Secretary shall submit to Congress a 
        certification to that effect.
            ``(7) Sunset provision.--After the Secretary submits a 
        certification under paragraph (6), the Commission shall, by 
        rule, terminate its review of export license applications under 
        this subsection.''.

SEC. 631. SAFE DISPOSAL OF GREATER-THAN-CLASS C RADIOACTIVE WASTE.

    (a) Responsibility for <<NOTE: Notification.>> Activities To Provide 
Storage Facility.--The Secretary shall provide to Congress official 
notification of the final designation of an entity within the Department 
to have the responsibility of completing activities needed to provide a 
facility for safely disposing of all greater-than-Class C low-level 
radioactive waste.

    (b) Reports and Plans.--
            (1) Report on permanent disposal facility.--
                    (A) Plan regarding cost and schedule for completion 
                of eis and rod.--Not later than 1 year after the date of 
                enactment of this Act, the Secretary, in consultation 
                with Congress, shall submit to Congress a report 
                containing an estimate of the cost and a proposed 
                schedule to complete an environmental impact statement 
                and record of decision for a permanent disposal facility 
                for greater-than-Class C radioactive waste.
                    (B) Analysis of alternatives.--Before the Secretary 
                makes a final decision on the disposal alternative or 
                alternatives to be implemented, the Secretary shall--
                          (i) submit to Congress a report that describes 
                      all alternatives under consideration, including 
                      all information required in the comprehensive 
                      report making recommendations for ensuring the 
                      safe disposal of all greater-than-Class C low-
                      level radioactive waste that was submitted by the 
                      Secretary to Congress in February 1987; and
                          (ii) await action by Congress.
            (2) Short-term plan for recovery and storage.--
                    (A) In general.--Not <<NOTE: Deadline.>> later than 
                180 days after the date of enactment of this Act, the 
                Secretary shall submit to Congress a plan to ensure the 
                continued recovery and storage of greater-than-Class C 
                low-level radioactive sealed sources that pose a 
                security threat until a permanent disposal facility is 
                available.
                    (B) Contents.--The plan shall address estimated 
                cost, resource, and facility needs.

SEC. 632. PROHIBITION ON NUCLEAR EXPORTS TO COUNTRIES THAT SPONSOR 
            TERRORISM.

    (a) In General.--Section 129 of the Atomic Energy Act of 1954 (42 
U.S.C. 2158) is amended--

[[Page 119 STAT. 789]]

            (1) by inserting ``a.'' before ``No nuclear materials and 
        equipment''; and
            (2) by adding at the end the following new subsection:

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

    (b) Applicability to <<NOTE: 42 USC 2158 note.>> Exports Approved 
for Transfer but Not Transferred.--Subsection b. of section 129 of 
Atomic Energy Act of 1954, as added by subsection (a) of this section, 
shall apply with respect to exports that have been approved for transfer 
as

[[Page 119 STAT. 790]]

of the date of the enactment of this Act but have not yet been 
transferred as of that date.

SEC. 633. EMPLOYEE BENEFITS.

    Section 3110(a) of the USEC Privatization Act (42 U.S.C. 2297h-8(a)) 
is amended by adding at the end the following new paragraph:
    ``(8) Continuity of benefits.--
To <<NOTE: Deadline. Ohio. Kentucky.>> the extent appropriations are 
provided in advance for this purpose or are otherwise available, not 
later than 30 days after the date of enactment of this paragraph, the 
Secretary shall implement such actions as are necessary to ensure that 
any employee who--
            ``(A) is involved in providing infrastructure or 
        environmental remediation services at the Portsmouth, Ohio, or 
        the Paducah, Kentucky, Gaseous Diffusion Plant;
            ``(B) has been an employee of the Department of Energy's 
        predecessor management and integrating contractor (or its first 
        or second tier subcontractors), or of the Corporation, at the 
        Portsmouth, Ohio, or the Paducah, Kentucky, facility; and
            ``(C) was eligible as of April 1, 2005, to participate in or 
        transfer into the Multiple Employer Pension Plan or the 
        associated multiple employer retiree health care benefit plans, 
        as defined in those plans,

shall continue to be eligible to participate in or transfer into such 
pension or health care benefit plans.''.

SEC. 634. <<NOTE: 42 USC 16011.>> DEMONSTRATION HYDROGEN PRODUCTION AT 
            EXISTING NUCLEAR POWER PLANTS.

    (a) Demonstration Projects.--The Secretary shall provide for the 
establishment of 2 projects in geographic areas that are regionally and 
climatically diverse to demonstrate the commercial production of 
hydrogen at existing nuclear power plants.
    (b) Economic Analysis.--Prior to making an award under subsection 
(a), the Secretary shall determine whether the use of existing nuclear 
power plants is a cost-effective means of producing hydrogen.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for the purposes of carrying out this 
section not more than $100,000,000.

SEC. 635. <<NOTE: 42 USC 16012.>> PROHIBITION ON ASSUMPTION BY UNITED 
            STATES GOVERNMENT OF LIABILITY FOR CERTAIN FOREIGN 
            INCIDENTS.

    (a) In General.--Notwithstanding any other provision of law, no 
officer of the United States or of any department, agency, or 
instrumentality of the United States Government may enter into any 
contract or other arrangement, or into any amendment or modification of 
a contract or other arrangement, the purpose or effect of which would be 
to directly or indirectly impose liability on the United States 
Government, or any department, agency, or instrumentality of the United 
States Government, or to otherwise directly or indirectly require an 
indemnity by the United States Government, for nuclear incidents 
occurring in connection with the design, construction, or operation of a 
production facility or utilization facility in any country whose 
government has been identified by the Secretary of State as engaged in 
state sponsorship of terrorist activities (specifically including any 
country the government of which, as of September 11, 2001, had been 
determined by the Secretary of State under section 620A(a) of the 
Foreign

[[Page 119 STAT. 791]]

Assistance Act of 1961 (22 U.S.C. 2371(a)), section 6(j)(1) of the 
Export Administration Act of 1979 (50 U.S.C. App. 2405(j)(1)), or 
section 40(d) of the Arms Export Control Act (22 U.S.C. 2780(d)) to have 
repeatedly provided support for acts of international terrorism). This 
section shall not apply to nuclear incidents occurring as a result of 
missions, carried out under the direction of the Secretary, the 
Secretary of Defense, or the Secretary of State, that are necessary to 
safely secure, store, transport, or remove nuclear materials for nuclear 
safety or nonproliferation purposes.
    (b) Definitions.--The terms used in this section shall have the same 
meaning as those terms have under section 11 of the Atomic Energy Act of 
1954 (42 U.S.C. 2014), unless otherwise expressly provided in this 
section.

SEC. 636. <<NOTE: 42 USC 16013.>> AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as are necessary 
to carry out this subtitle and the amendments made by this subtitle.

SEC. 637. NUCLEAR REGULATORY COMMISSION USER FEES AND ANNUAL CHARGES.

    (a) In General.--Section 6101 of the Omnibus Budget Reconciliation 
Act of 1990 (42 U.S.C. 2214) is amended--
            (1) in subsection (a)--
                    (A) by striking ``Except as provided in paragraph 
                (3), the'' and inserting ``The'' in paragraph (1); and
                    (B) by striking paragraph (3); and
            (2) in subsection (c)--
                    (A) by striking ``and'' at the end of paragraph 
                (2)(A)(i);
                    (B) by striking the period at the end of paragraph 
                (2)(A)(ii) and inserting a semicolon;
                    (C) by adding at the end of paragraph (2)(A) the 
                following new clauses:
                          ``(iii) amounts appropriated to the Commission 
                      for the fiscal year for implementation of section 
                      3116 of the Ronald W. Reagan National Defense 
                      Authorization Act for Fiscal Year 2005; and
                          ``(iv) amounts appropriated to the Commission 
                      for homeland security activities of the Commission 
                      for the fiscal year, except for the costs of 
                      fingerprinting and background checks required by 
                      section 149 of the Atomic Energy Act of 1954 (42 
                      U.S.C. 2169) and the costs of conducting security 
                      inspections.''; and
                    (D) by amending paragraph (2)(B)(v) to read as 
                follows:
                          ``(v) 90 percent for fiscal year 2005 and each 
                      fiscal year thereafter.''.

    (b) Repeal.--Section 7601 of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (42 U.S.C. 2213) is repealed.
    (c) Effective Date.--The <<NOTE: 42 USC 2214 note.>> amendments made 
by this section take effect on October 1, 2006.

SEC. 638. <<NOTE: 42 USC 16014.>> STANDBY SUPPORT FOR CERTAIN NUCLEAR 
            PLANT DELAYS.

    (a) Definitions.--In this section:
            (1) Advanced nuclear facility.--The term ``advanced nuclear 
        facility'' means any nuclear facility the reactor design for 
        which is approved after December 31, 1993, by the Commission 
        (and such design or a substantially similar design of comparable 
        capacity was not approved on or before that date).

[[Page 119 STAT. 792]]

            (2) Combined license.--The term ``combined license'' means a 
        combined construction and operating license for an advanced 
        nuclear facility issued by the Commission.
            (3) Commission.--The term ``Commission'' means the Nuclear 
        Regulatory Commission.
            (4) Sponsor.--The term ``sponsor'' means a person who has 
        applied for or been granted a combined license.

    (b) Contract Authority.--
            (1) In general.--The Secretary may enter into contracts 
        under this section with sponsors of an advanced nuclear facility 
        that cover a total of 6 reactors, with the 6 reactors consisting 
        of not more than 3 different reactor designs, in accordance with 
        paragraph (2).
            (2) Requirement for contracts.--
                    (A) Definition of loan cost.--In this paragraph, the 
                term ``loan cost'' has the meaning given the term ``cost 
                of a loan guarantee'' under section 502(5)(C) of the 
                Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(C)).
                    (B) Establishment of accounts.--There is established 
                in the Department 2 separate accounts, which shall be 
                known as the--
                          (i) ``Standby Support Program Account''; and
                          (ii) ``Standby Support Grant Account''.
                    (C) Requirement.--The Secretary shall not enter into 
                a contract under this section unless the Secretary 
                deposits--
                          (i) in the Standby Support Program Account 
                      established under subparagraph (B), funds 
                      appropriated to the Secretary in advance of the 
                      contract or a combination of appropriated funds 
                      and loan guarantee fees that are in an amount 
                      sufficient to cover the loan costs described in 
                      subsection (d)(5)(A); and
                          (ii) in the Standby Support Grant Account 
                      established under subparagraph (B), funds 
                      appropriated to the Secretary in advance of the 
                      contract, paid to the Secretary by the sponsor of 
                      the advanced nuclear facility, or a combination of 
                      appropriations and payments that are in an amount 
                      sufficient cover the costs described in 
                      subparagraphs (B), (C), and (D) of subsection 
                      (d)(5).

    (c) Covered Delays.--
            (1) Inclusions.--Under each contract authorized by this 
        section, the Secretary shall pay the costs specified in 
        subsection (d), using funds appropriated or collected for the 
        covered costs, if full power operation of the advanced nuclear 
        facility is delayed by--
                    (A) the failure of the Commission to comply with 
                schedules for review and approval of inspections, tests, 
                analyses, and acceptance criteria established under the 
                combined license or the conduct of preoperational 
                hearings by the Commission for the advanced nuclear 
                facility; or
                    (B) litigation that delays the commencement of full-
                power operations of the advanced nuclear facility.
            (2) Exclusions.--The Secretary may not enter into any 
        contract under this section that would obligate the Secretary to 
        pay any costs resulting from--

[[Page 119 STAT. 793]]

                    (A) the failure of the sponsor to take any action 
                required by law or regulation;
                    (B) events within the control of the sponsor; or
                    (C) normal business risks.

    (d) Covered Costs.--
            (1) In general.--Subject to paragraphs (2), (3), and (4), 
        the costs that shall be paid by the Secretary pursuant to a 
        contract entered into under this section are the costs that 
        result from a delay covered by the contract.
            (2) Initial 2 reactors.--In the case of the first 2 reactors 
        that receive combined licenses and on which construction is 
        commenced, the Secretary shall pay--
                    (A) 100 percent of the covered costs of delay; but
                    (B) not more than $500,000,000 per contract.
            (3) Subsequent 4 reactors.--In the case of the next 4 
        reactors that receive a combined license and on which 
        construction is commenced, the Secretary shall pay--
                    (A) 50 percent of the covered costs of delay that 
                occur after the initial 180-day period of covered delay; 
                but
                    (B) not more than $250,000,000 per contract.
            (4) Conditions on payment of certain covered costs.--
                    (A) In general.--The obligation of the Secretary to 
                pay the covered costs described in subparagraph (B) of 
                paragraph (5) is subject to the Secretary receiving from 
                appropriations or payments from other non-Federal 
                sources amounts sufficient to pay the covered costs.
                    (B) Non-federal sources.--The Secretary may receive 
                and accept payments from any non-Federal source, which 
                shall be made available without further appropriation 
                for the payment of the covered costs.
            (5) Types of covered costs.--Subject to paragraphs (2), (3), 
        and (4), the contract entered into under this section for an 
        advanced nuclear facility shall include as covered costs those 
        costs that result from a delay during construction and in 
        gaining approval for fuel loading and full-power operation, 
        including--
                    (A) principal or interest on any debt obligation of 
                an advanced nuclear facility owned by a non-Federal 
                entity; and
                    (B) the incremental difference between--
                          (i) the fair market price of power purchased 
                      to meet the contractual supply agreements that 
                      would have been met by the advanced nuclear 
                      facility but for the delay; and
                          (ii) the contractual price of power from the 
                      advanced nuclear facility subject to the delay.

    (e) Requirements.--Any contract between a sponsor and the Secretary 
covering an advanced nuclear facility under this section shall require 
the sponsor to use due diligence to shorten, and to end, the delay 
covered by the contract.
    (f) Reports.--For each advanced nuclear facility that is covered by 
a contract under this section, the Commission shall submit to Congress 
and the Secretary quarterly reports summarizing the status of licensing 
actions associated with the advanced nuclear facility.
    (g) Regulations.--

[[Page 119 STAT. 794]]

            (1) In general.--Subject to paragraphs (2) and (3), the 
        Secretary shall issue such regulations as are necessary to carry 
        out this section.
            (2) Interim final rulemaking.--Not <<NOTE: Deadline. Public 
        information.>> later than 270 days after the date of enactment 
        of this Act, the Secretary shall issue for public comment an 
        interim final rule regulating contracts authorized by this 
        section.
            (3) Notice of final rulemaking.--
        Not <<NOTE: Deadline.>> later than 1 year after the date of 
        enactment of this Act, the Secretary shall issue a notice of 
        final rulemaking regulating the contracts.

    (h) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 639. CONFLICTS OF INTEREST RELATING TO CONTRACTS AND OTHER 
            ARRANGEMENTS.

    Section 170A b. of the Atomic Energy Act of 1954 (42 U.S.C. 
2210a(b)) is amended--
            (1) by redesignating paragraphs (1) and (2) as subparagraphs 
        (A) and (B), respectively, and indenting appropriately;
            (2) by striking ``b. The Commission'' and inserting the 
        following:

    ``b. Evaluation.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Nuclear Regulatory Commission''; and
            (3) by adding at the end the following:
            ``(2) Nuclear regulatory commission.--Notwithstanding any 
        conflict of interest, the Nuclear Regulatory Commission may 
        enter into a contract, agreement, or arrangement with the 
        Department of Energy or the operator of a Department of Energy 
        facility, if the Nuclear Regulatory Commission determines that--
                    ``(A) the conflict of interest cannot be mitigated; 
                and
                    ``(B) adequate justification exists to proceed 
                without mitigation of the conflict of interest.''.

            Subtitle C--Next Generation Nuclear Plant Project

SEC. 641. <<NOTE: 42 USC 16021.>> PROJECT ESTABLISHMENT.

    (a) Establishment.--The Secretary shall establish a project to be 
known as the ``Next Generation Nuclear Plant Project'' (referred to in 
this subtitle as the ``Project'').
    (b) Content.--The Project shall consist of the research, 
development, design, construction, and operation of a prototype plant, 
including a nuclear reactor that--
            (1) is based on research and development activities 
        supported by the Generation IV Nuclear Energy Systems Initiative 
        under section 942(d); and
            (2) shall be used--
                    (A) to generate electricity;
                    (B) to produce hydrogen; or
                    (C) both to generate electricity and to produce 
                hydrogen.

[[Page 119 STAT. 795]]

SEC. 642. <<NOTE: 42 USC 16022.>> PROJECT MANAGEMENT.

    (a) Departmental Management.--
            (1) In general.--The Project shall be managed in the 
        Department by the Office of Nuclear Energy, Science, and 
        Technology.
            (2) Generation iv nuclear energy systems program.--The 
        Secretary may combine the Project with the Generation IV Nuclear 
        Energy Systems Initiative.
            (3) Existing doe project management expertise.--The 
        Secretary may utilize capabilities for review of construction 
        projects for advanced scientific facilities within the Office of 
        Science to track the progress of the Project.

    (b) Laboratory Management.--
            (1) Lead laboratory.--The Idaho National Laboratory shall be 
        the lead National Laboratory for the Project and shall 
        collaborate with other National Laboratories, institutions of 
        higher education, other research institutes, industrial 
        researchers, and international researchers to carry out the 
        Project.
            (2) Industrial partnerships.--
                    (A) In general.--The Idaho National Laboratory shall 
                organize a consortium of appropriate industrial partners 
                that will carry out cost-shared research, development, 
                design, and construction activities, and operate 
                research facilities, on behalf of the Project.
                    (B) Cost-sharing.--Activities of industrial partners 
                funded by the Project shall be cost-shared in accordance 
                with section 988.
                    (C) Preference.--Preference in determining the final 
                structure of the consortium or any partnerships under 
                this subtitle shall be given to a structure (including 
                designating as a lead industrial partner an entity 
                incorporated in the United States) that retains United 
                States technological leadership in the Project while 
                maximizing cost sharing opportunities and minimizing 
                Federal funding responsibilities.
            (3) Prototype plant siting.--The prototype nuclear reactor 
        and associated plant shall be sited at the Idaho National 
        Laboratory in Idaho.
            (4) Reactor test capabilities.--The Project shall use, if 
        appropriate, reactor test capabilities at the Idaho National 
        Laboratory.
            (5) Other laboratory capabilities.--The Project may use, if 
        appropriate, facilities at other National Laboratories.

SEC. 643. <<NOTE: 42 USC 16023.>> PROJECT ORGANIZATION.

    (a) Major Project Elements.--The Project shall consist of the 
following major program elements:
            (1) High-temperature hydrogen production technology 
        development and validation.
            (2) Energy conversion technology development and validation.
            (3) Nuclear fuel development, characterization, and 
        qualification.
            (4) Materials selection, development, testing, and 
        qualification.

[[Page 119 STAT. 796]]

            (5) Reactor and balance-of-plant design, engineering, safety 
        analysis, and qualification.

    (b) Project Phases.--The Project shall be conducted in the following 
phases:
            (1) First project phase.--A first project phase shall be 
        conducted to--
                    (A) select and validate the appropriate technology 
                under subsection (a)(1);
                    (B) carry out enabling research, development, and 
                demonstration activities on technologies and components 
                under paragraphs (2) through (4) of subsection (a);
                    (C) determine whether it is appropriate to combine 
                electricity generation and hydrogen production in a 
                single prototype nuclear reactor and plant; and
                    (D) carry out initial design activities for a 
                prototype nuclear reactor and plant, including 
                development of design methods and safety analytical 
                methods and studies under subsection (a)(5).
            (2) Second project phase.--A second project phase shall be 
        conducted to--
                    (A) continue appropriate activities under paragraphs 
                (1) through (5) of subsection (a);
                    (B) develop, through a competitive process, a final 
                design for the prototype nuclear reactor and plant;
                    (C) apply for licenses to construct and operate the 
                prototype nuclear reactor from the Nuclear Regulatory 
                Commission; and
                    (D) construct and start up operations of the 
                prototype nuclear reactor and its associated hydrogen or 
                electricity production facilities.

    (c) Project Requirements.--
            (1) In general.--The Secretary shall ensure that the Project 
        is structured so as to maximize the technical interchange and 
        transfer of technologies and ideas into the Project from other 
        sources of relevant expertise, including--
                    (A) the nuclear power industry, including nuclear 
                powerplant construction firms, particularly with respect 
                to issues associated with plant design, construction, 
                and operational and safety issues;
                    (B) the chemical processing industry, particularly 
                with respect to issues relating to--
                          (i) the use of process energy for production 
                      of hydrogen; and
                          (ii) the integration of technologies developed 
                      by the Project into chemical processing 
                      environments; and
                    (C) international efforts in areas related to the 
                Project, particularly with respect to hydrogen 
                production technologies.
            (2) International collaboration.--
                    (A) In general.--The Secretary shall seek 
                international cooperation, participation, and financial 
                contributions for the Project.
                    (B) Assistance from international partners.--The 
                Secretary, through the Idaho National Laboratory, may 
                contract for assistance from specialists or facilities 
                from member countries of the Generation IV International

[[Page 119 STAT. 797]]

                Forum, the Russian Federation, or other international 
                partners if the specialists or facilities provide access 
                to cost-effective and relevant skills or test 
                capabilities.
                    (C) Partner nations.--The Project may involve 
                demonstration of selected project objectives in a 
                partner country.
                    (D) Generation iv international forum.--The 
                Secretary shall ensure that international activities of 
                the Project are coordinated with the Generation IV 
                International Forum.
            (3) Review by nuclear energy research advisory committee.--
                    (A) In general.--The Nuclear Energy Research 
                Advisory Committee of the Department (referred to in 
                this paragraph as the ``NERAC'') shall--
                          (i) review all program plans for the Project 
                      and all progress under the Project on an ongoing 
                      basis; and
                          (ii) ensure that important scientific, 
                      technical, safety, and program management issues 
                      receive attention in the Project and by the 
                      Secretary.
                    (B) Additional expertise.--The NERAC shall 
                supplement the expertise of the NERAC or appoint 
                subpanels to incorporate into the review by the NERAC 
                the relevant sources of expertise described under 
                paragraph (1).
                    (C) Initial review.--Not <<NOTE: Deadline.>> later 
                than 180 days after the date of enactment of this Act, 
                the NERAC shall--
                          (i) review existing program plans for the 
                      Project in light of the recommendations of the 
                      document entitled ``Design Features and Technology 
                      Uncertainties for the Next Generation Nuclear 
                      Plant,'' dated June 30, 2004; and
                          (ii) address any recommendations of the 
                      document not incorporated in program plans for the 
                      Project.
                    (D) First project phase review.--On a determination 
                by the Secretary that the appropriate activities under 
                the first project phase under subsection (b)(1) are 
                nearly complete, the Secretary shall request the NERAC 
                to conduct a comprehensive review of the Project and to 
                report to the Secretary the recommendation of the NERAC 
                concerning whether the Project is ready to proceed to 
                the second project phase under subsection (b)(2).
                    (E) Transmittal of reports to congress.--Not later 
                than 60 days after receiving any report from the NERAC 
                related to the Project, the Secretary shall submit to 
                the appropriate committees of the Senate and the House 
                of Representatives a copy of the report, along with any 
                additional views of the Secretary that the Secretary may 
                consider appropriate.

SEC. 644. <<NOTE: 42 USC 16024.>> NUCLEAR REGULATORY COMMISSION.

    (a) In General.--In accordance with section 202 of the Energy 
Reorganization Act of 1974 (42 U.S.C. 5842), the Nuclear Regulatory 
Commission shall have licensing and regulatory authority for any reactor 
authorized under this subtitle.
    (b) Licensing Strategy.--Not <<NOTE: Deadline.>> later than 3 years 
after the date of enactment of this Act, the Secretary and the Chairman

[[Page 119 STAT. 798]]

of the Nuclear Regulatory Commission shall jointly submit to the 
appropriate committees of the Senate and the House of Representatives a 
licensing strategy for the prototype nuclear reactor, including--
            (1) a description of ways in which current licensing 
        requirements relating to light-water reactors need to be adapted 
        for the types of prototype nuclear reactor being considered by 
        the Project;
            (2) a description of analytical tools that the Nuclear 
        Regulatory Commission will have to develop to independently 
        verify designs and performance characteristics of components, 
        equipment, systems, or structures associated with the prototype 
        nuclear reactor;
            (3) other research or development activities that may be 
        required on the part of the Nuclear Regulatory Commission in 
        order to review a license application for the prototype nuclear 
        reactor; and
            (4) an estimate of the budgetary requirements associated 
        with the licensing strategy.

    (c) Ongoing Interaction.--The Secretary shall seek the active 
participation of the Nuclear Regulatory Commission throughout the 
duration of the Project to--
            (1) avoid design decisions that will compromise adequate 
        safety margins in the design of the reactor or impair the 
        accessibility of nuclear safety-related components of the 
        prototype reactor for inspection and maintenance;
            (2) develop tools to facilitate inspection and maintenance 
        needed for safety purposes; and
            (3) develop risk-based criteria for any future commercial 
        development of a similar reactor architectures.

SEC. 645. <<NOTE: 42 USC 16025.>> PROJECT TIMELINES AND AUTHORIZATION OF 
            APPROPRIATIONS.

    (a) Target <<NOTE: Deadline.>> Date to Complete the First Project 
Phase.--Not later than September 30, 2011, the Secretary shall--
            (1) select the technology to be used by the Project for 
        high-temperature hydrogen production and the initial design 
        parameters for the prototype nuclear plant; or
            (2) <<NOTE: Reports.>> submit to Congress a report 
        establishing an alternative date for making the selection.

    (b) Design Competition for Second Project Phase.--
            (1) In general.--The Secretary, acting through the Idaho 
        National Laboratory, shall fund not more than 4 teams for not 
        more than 2 years to develop detailed proposals for competitive 
        evaluation and selection of a single proposal for a final design 
        of the prototype nuclear reactor.
            (2) Systems integration.--The Secretary may structure 
        Project activities in the second project phase to use the lead 
        industrial partner of the competitively selected design under 
        paragraph (1) in a systems integration role for final design and 
        construction of the Project.

    (c) Target <<NOTE: Deadline.>> Date to Complete Project 
Construction.--Not later than September 30, 2021, the Secretary shall--
            (1) complete construction and begin operations of the 
        prototype nuclear reactor and associated energy or hydrogen 
        facilities; or

[[Page 119 STAT. 799]]

            (2) <<NOTE: Reports.>> submit to Congress a report 
        establishing an alternative date for completion.

    (d) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary for research and construction activities 
under this subtitle (including for transfer to the Nuclear Regulatory 
Commission for activities under section 644 as appropriate)--
            (1) $1,250,000,000 for the period of fiscal years 2006 
        through 2015; and
            (2) such sums as are necessary for each of fiscal years 2016 
        through 2021.

                      Subtitle D--Nuclear Security

SEC. 651. <<NOTE: 42 USC 16041.>> NUCLEAR FACILITY AND MATERIALS 
            SECURITY.

    (a) Security Evaluations; Design Basis Threat Rulemaking.--
            (1) In general.--Chapter 14 of the Atomic Energy Act of 1954 
        (42 U.S.C. 2201 et seq.) (as amended by section 624(a)) is 
        amended by adding at the end the following:

``SEC. 170D. <<NOTE: 42 USC 2210d.>> SECURITY EVALUATIONS.

    ``a. Security Response Evaluations.--Not <<NOTE: Deadline.>> less 
often than once every 3 years, the Commission shall conduct security 
evaluations at each licensed facility that is part of a class of 
licensed facilities, as the Commission considers to be appropriate, to 
assess the ability of a private security force of a licensed facility to 
defend against any applicable design basis threat.

    ``b. Force-on-Force Exercises.--(1) The security evaluations shall 
include force-on-force exercises.
    ``(2) The force-on-force exercises shall, to the maximum extent 
practicable, simulate security threats in accordance with any design 
basis threat applicable to a facility.
    ``(3) In conducting a security evaluation, the Commission shall 
mitigate any potential conflict of interest that could influence the 
results of a force-on-force exercise, as the Commission determines to be 
necessary and appropriate.
    ``c. Action by Licensees.--The Commission shall ensure that an 
affected licensee corrects those material defects in performance that 
adversely affect the ability of a private security force at that 
facility to defend against any applicable design basis threat.
    ``d. Facilities Under Heightened Threat Levels.--The Commission may 
suspend a security evaluation under this section if the Commission 
determines that the evaluation would compromise security at a nuclear 
facility under a heightened threat level.
    ``e. Report.--Not less often than once each year, the Commission 
shall submit to the Committee on Environment and Public Works of the 
Senate and the Committee on Energy and Commerce of the House of 
Representatives a report, in classified form and unclassified form, that 
describes the results of each security response evaluation conducted and 
any relevant corrective action taken by a licensee during the previous 
year.

``SEC. 170E. <<NOTE: 42 USC 2210e.>> DESIGN BASIS THREAT RULEMAKING.

    ``a. Rulemaking.--The <<NOTE: Deadlines.>> Commission shall--

[[Page 119 STAT. 800]]

            ``(1) not later than 90 days after the date of enactment of 
        this section, initiate a rulemaking proceeding, including notice 
        and opportunity for public comment, to be completed not later 
        than 18 months after that date, to revise the design basis 
        threats of the Commission; or
            ``(2) not later than 18 months after the date of enactment 
        of this section, complete any ongoing rulemaking to revise the 
        design basis threats.

    ``b. Factors.--When conducting its rulemaking, the Commission shall 
consider the following, but not be limited to--
            ``(1) the events of September 11, 2001;
            ``(2) an assessment of physical, cyber, biochemical, and 
        other terrorist threats;
            ``(3) the potential for attack on facilities by multiple 
        coordinated teams of a large number of individuals;
            ``(4) the potential for assistance in an attack from several 
        persons employed at the facility;
            ``(5) the potential for suicide attacks;
            ``(6) the potential for water-based and air-based threats;
            ``(7) the potential use of explosive devices of considerable 
        size and other modern weaponry;
            ``(8) the potential for attacks by persons with a 
        sophisticated knowledge of facility operations;
            ``(9) the potential for fires, especially fires of long 
        duration;
            ``(10) the potential for attacks on spent fuel shipments by 
        multiple coordinated teams of a large number of individuals;
            ``(11) the adequacy of planning to protect the public health 
        and safety at and around nuclear facilities, as appropriate, in 
        the event of a terrorist attack against a nuclear facility; and
            ``(12) the potential for theft and diversion of nuclear 
        materials from such facilities.''.
            (2) Conforming amendment.--The table of sections of the 
        Atomic Energy Act of 1954 (42 U.S.C. prec. 2011) (as amended by 
        section 624(b)) is amended by adding at the end of the items 
        relating to chapter 14 the following:

``Sec. 170D. Security evaluations.
``Sec. 170E. Design basis threat rulemaking.''.

            (3) Federal security coordinators.--
                    (A) Regional offices.--Not <<NOTE: Deadline.>> later 
                than 18 months after the date of enactment of this Act, 
                the Nuclear Regulatory Commission (referred to in this 
                section as the ``Commission'') shall assign a Federal 
                security coordinator, under the employment of the 
                Commission, to each region of the Commission.
                    (B) Responsibilities.--The Federal security 
                coordinator shall be responsible for--
                          (i) communicating with the Commission and 
                      other Federal, State, and local authorities 
                      concerning threats, including threats against such 
                      classes of facilities as the Commission determines 
                      to be appropriate;
                          (ii) monitoring such classes of facilities as 
                      the Commission determines to be appropriate to 
                      ensure that they maintain security consistent with 
                      the security plan in accordance with the 
                      appropriate threat level; and

[[Page 119 STAT. 801]]

                          (iii) assisting in the coordination of 
                      security measures among the private security 
                      forces at such classes of facilities as the 
                      Commission determines to be appropriate and 
                      Federal, State, and local authorities, as 
                      appropriate.

    (b) Backup <<NOTE: Deadline.>> Power for Certain Emergency 
Notification Systems.--For any licensed nuclear power plants located 
where there is a permanent population, as determined by the 2000 
decennial census, in excess of 15,000,000 within a 50-mile radius of the 
power plant, not later than 18 months after enactment of this Act, the 
Commission shall require that backup power to be available for the 
emergency notification system of the power plant, including the 
emergency siren warning system, if the alternating current supply within 
the 10-mile emergency planning zone of the power plant is lost.

    (c) Additional Provisions.--
            (1) Provision of support to university nuclear safety, 
        security, and environmental protection programs.--Section 31 b. 
        of the Atomic Energy Act of 1954 (42 U.S.C. 2051(b)) is 
        amended--
                    (A) by striking ``b. The Commission is further 
                authorized to make'' and inserting the following:

    ``b. Grants and Contributions.--The Commission is authorized--
            ``(1) to make'';
                    (B) in paragraph (1) (as designated by subparagraph 
                (A)) by striking the period at the end and inserting ``; 
                and''; and
                    (C) by adding at the end the following:
            ``(2) to provide grants, loans, cooperative agreements, 
        contracts, and equipment to institutions of higher education (as 
        defined in section 102 of the Higher Education Act of 1965 (20 
        U.S.C. 1002)) to support courses, studies, training, curricula, 
        and disciplines pertaining to nuclear safety, security, or 
        environmental protection, or any other field that the Commission 
        determines to be critical to the regulatory mission of the 
        Commission.''.
            (2) Recruitment tools.--Chapter 14 of the Atomic Energy Act 
        of 1954 (42 U.S.C. 2201 et seq.) (as amended by subsection 
        (a)(1)) is amended by adding at the end the following:

``SEC. 170F. <<NOTE: 42 USC 2210f.>> RECRUITMENT TOOLS.

    ``The Commission may purchase promotional items of nominal value for 
use in the recruitment of individuals for employment.''.
            (3) Expenses authorized to be paid by the commission.--
        Chapter 14 of the Atomic Energy Act of 1954 (42 U.S.C. 2201 et 
        seq.) (as amended by paragraph (2)) is amended by adding at the 
        end the following:

``SEC. 170G. <<NOTE: 42 USC 2210g.>> EXPENSES AUTHORIZED TO BE PAID BY 
            THE COMMISSION.

    ``The Commission may--
            ``(1) pay transportation, lodging, and subsistence expenses 
        of employees who--
                    ``(A) assist scientific, professional, 
                administrative, or technical employees of the 
                Commission; and
                    ``(B) are students in good standing at an 
                institution of higher education (as defined in section 
                102 of the Higher Education Act of 1965 (20 U.S.C. 
                1002)) pursuing courses

[[Page 119 STAT. 802]]

                related to the field in which the students are employed 
                by the Commission; and
            ``(2) pay the costs of health and medical services 
        furnished, pursuant to an agreement between the Commission and 
        the Department of State, to employees of the Commission and 
        dependents of the employees serving in foreign countries.''.
            (4) Partnership program with institutions of higher 
        education.--
                    (A) In general.--Chapter 19 of the Atomic Energy Act 
                of 1954 (42 U.S.C. 2015 et seq.) (as amended by section 
                622(a)) is amended by inserting after section 243 the 
                following:

``SEC. 244. <<NOTE: 42 USC 2015c.>> PARTNERSHIP PROGRAM WITH 
            INSTITUTIONS OF HIGHER EDUCATION.

    ``a. Definitions.--In this section:
            ``(1) Hispanic-serving institution.--The term `Hispanic-
        serving institution' has the meaning given the term in section 
        502(a) of the Higher Education Act of 1965 (20 U.S.C. 1101a(a)).
            ``(2) Historically black college and university.--The term 
        `historically Black college or university' has the meaning given 
        the term `part B institution' in section 322 of the Higher 
        Education Act of 1965 (20 U.S.C. 1061).
            ``(3) Tribal college.--The term `Tribal college' has the 
        meaning given the term `tribally controlled college or 
        university' in section 2(a) of the Tribally Controlled College 
        or University Assistance Act of 1978 (25 U.S.C. 1801(a)).

    ``b. Partnership Program.--The Commission may establish and 
participate in activities relating to research, mentoring, instruction, 
and training with institutions of higher education, including Hispanic-
serving institutions, historically Black colleges or universities, and 
Tribal colleges, to strengthen the capacity of the institutions--
            ``(1) to educate and train students (including present or 
        potential employees of the Commission); and
            ``(2) to conduct research in the field of science, 
        engineering, or law, or any other field that the Commission 
        determines is important to the work of the Commission.''.
            (5) Conforming amendments.--The table of sections of the 
        Atomic Energy Act of 1954 (42 U.S.C. prec. 2011) (as amended by 
        subsection (a)(2)) is amended--
                    (A) by adding at the end of the items relating to 
                chapter 14 the following:

``Sec. 170F. Recruitment tools.
``Sec. 170G. Expenses authorized to be paid by the Commission.'';

                and
                    (B) by inserting after the item relating to section 
                243 the following:

``Sec. 244. Partnership program with institutions of higher 
           education.''.

    (d) Radiation Source Protection.--
            (1) Amendment.--Chapter 14 of the Atomic Energy Act of 1954 
        (42 U.S.C. 2201 et seq.) (as amended by subsection (c)(3)) is 
        amended by adding at the end the following:

``SEC. 170H. <<NOTE: 42 USC 2210h.>> RADIATION SOURCE PROTECTION.

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

[[Page 119 STAT. 803]]

            ``(1) Code of conduct.--The term `Code of Conduct' means the 
        code entitled the `Code of Conduct on the Safety and Security of 
        Radioactive Sources', approved by the Board of Governors of the 
        International Atomic Energy Agency and dated September 8, 2003.
            ``(2) Radiation source.--The term `radiation source' means--
                    ``(A) a Category 1 Source or a Category 2 Source, as 
                defined in the Code of Conduct; and
                    ``(B) any other material that poses a threat such 
                that the material is subject to this section, as 
                determined by the Commission, by regulation, other than 
                spent nuclear fuel and special nuclear materials.

    ``b. Commission Approval.--
Not <<NOTE: Deadline. Regulations.>> later than 180 days after the date 
of enactment of this section, the Commission shall issue regulations 
prohibiting a person from--
            ``(1) exporting a radiation source, unless the Commission 
        has specifically determined under section 57 or 82, consistent 
        with the Code of Conduct, with respect to the exportation, 
        that--
                    ``(A) the recipient of the radiation source may 
                receive and possess the radiation source under the laws 
                and regulations of the country of the recipient;
                    ``(B) the recipient country has the appropriate 
                technical and administrative capability, resources, and 
                regulatory structure to ensure that the radiation source 
                will be managed in a safe and secure manner; and
                    ``(C) <<NOTE: Deadline. Notification.>> before the 
                date on which the radiation source is shipped--
                          ``(i) a notification has been provided to the 
                      recipient country; and
                          ``(ii) a notification has been received from 
                      the recipient country;
                as the Commission determines to be appropriate;
            ``(2) importing a radiation source, unless the Commission 
        has determined, with respect to the importation, that--
                    ``(A) the proposed recipient is authorized by law to 
                receive the radiation source; and
                    ``(B) the shipment will be made in accordance with 
                any applicable Federal or State law or regulation; and
            ``(3) selling or otherwise transferring ownership of a 
        radiation source, unless the Commission--
                    ``(A) has determined that the licensee has verified 
                that the proposed recipient is authorized under law to 
                receive the radiation source; and
                    ``(B) has required that the transfer shall be made 
                in accordance with any applicable Federal or State law 
                or regulation.

    ``c. Tracking System.--(1)(A) 
Not <<NOTE: Deadline. Regulations.>> later than 1 year after the date of 
enactment of this section, the Commission shall issue regulations 
establishing a mandatory tracking system for radiation sources in the 
United States.

    ``(B) In establishing the tracking system under subparagraph (A), 
the Commission shall coordinate with the Secretary of Transportation to 
ensure compatibility, to the maximum extent

[[Page 119 STAT. 804]]

practicable, between the tracking system and any system established by 
the Secretary of Transportation to track the shipment of radiation 
sources.
    ``(2) The tracking system under paragraph (1) shall--
            ``(A) enable the identification of each radiation source by 
        serial number or other unique identifier;
            ``(B) require reporting within 7 days of any change of 
        possession of a radiation source;
            ``(C) require reporting within 24 hours of any loss of 
        control of, or accountability for, a radiation source; and
            ``(D) provide for reporting under subparagraphs (B) and (C) 
        through a secure Internet connection.

    ``d. Penalty.--A violation of a regulation issued under subsection 
a. or b. shall be punishable by a civil penalty not to exceed 
$1,000,000.
    ``e. National <<NOTE: Deadline. Contracts.>> Academy of Sciences 
Study.--(1) Not later than 60 days after the date of enactment of this 
section, the Commission shall enter into an arrangement with the 
National Academy of Sciences under which the National Academy of 
Sciences shall conduct a study of industrial, research, and commercial 
uses for radiation sources.

    ``(2) The study under paragraph (1) shall include a review of uses 
of radiation sources in existence on the date on which the study is 
conducted, including an identification of any industrial or other 
process that--
            ``(A) uses a radiation source that could be replaced with an 
        economically and technically equivalent (or improved) process 
        that does not require the use of a radiation source; or
            ``(B) may be used with a radiation source that would pose a 
        lower risk to public health and safety in the event of an 
        accident or attack involving the radiation source.

    ``(3) <<NOTE: Deadline.>> Not later than 2 years after the date of 
enactment of this section, the Commission shall submit to Congress the 
results of the study under paragraph (1).

    ``f. Task <<NOTE: Establishment.>> Force on Radiation Source 
Protection and Security.--(1) There is established a task force on 
radiation source protection and security (referred to in this section as 
the `task force').

    ``(2)(A) The chairperson of the task force shall be the Chairperson 
of the Commission (or a designee).
    ``(B) The membership of the task force shall consist of the 
following:
            ``(i) The Secretary of Homeland Security (or a designee).
            ``(ii) The Secretary of Defense (or a designee).
            ``(iii) The Secretary of Energy (or a designee).
            ``(iv) The Secretary of Transportation (or a designee).
            ``(v) The Attorney General (or a designee).
            ``(vi) The Secretary of State (or a designee).
            ``(vii) The Director of National Intelligence (or a 
        designee).
            ``(viii) The Director of the Central Intelligence Agency (or 
        a designee).
            ``(ix) The Director of the Federal Emergency Management 
        Agency (or a designee).
            ``(x) The Director of the Federal Bureau of Investigation 
        (or a designee).

[[Page 119 STAT. 805]]

            ``(xi) The Administrator of the Environmental Protection 
        Agency (or a designee).

    ``(3)(A) The task force, in consultation with Federal, State, and 
local agencies, the Conference of Radiation Control Program Directors, 
and the Organization of Agreement States, and after public notice and an 
opportunity for comment, shall evaluate, and provide recommendations 
relating to, the security of radiation sources in the United States from 
potential terrorist threats, including acts of sabotage, theft, or use 
of a radiation source in a radiological dispersal device.
    ``(B) <<NOTE: Deadlines. Reports.>> Not later than 1 year after the 
date of enactment of this section, and not less than once every 4 years 
thereafter, the task force shall submit to Congress and the President a 
report, in unclassified form with a classified annex if necessary, 
providing recommendations, including recommendations for appropriate 
regulatory and legislative changes, for--
            ``(i) a list of additional radiation sources that should be 
        required to be secured under this Act, based on the potential 
        attractiveness of the sources to terrorists and the extent of 
        the threat to public health and safety of the sources, taking 
        into consideration--
                    ``(I) radiation source radioactivity levels;
                    ``(II) radioactive half-life of a radiation source;
                    ``(III) dispersability;
                    ``(IV) chemical and material form;
                    ``(V) for radioactive materials with a medical use, 
                the availability of the sources to physicians and 
                patients for medical treatment; and
                    ``(VI) any other factor that the Chairperson of the 
                Commission determines to be appropriate;
            ``(ii) the establishment of, or modifications to, a national 
        system for recovery of lost or stolen radiation sources;
            ``(iii) the storage of radiation sources that are not used 
        in a safe and secure manner as of the date on which the report 
        is submitted;
            ``(iv) modifications to the national tracking system for 
        radiation sources;
            ``(v) the establishment of, or modifications to, a national 
        system (including user fees and other methods) to provide for 
        the proper disposal of radiation sources secured under this Act;
            ``(vi) modifications to export controls on radiation sources 
        to ensure that foreign recipients of radiation sources are able 
        and willing to adequately control radiation sources from the 
        United States;
            ``(vii)(I) any alternative technologies available as of the 
        date on which the report is submitted that may perform some or 
        all of the functions performed by devices or processes that 
        employ radiation sources; and
            ``(II) the establishment of appropriate regulations and 
        incentives for the replacement of the devices and processes 
        described in subclause (I)--
                    ``(aa) with alternative technologies in order to 
                reduce the number of radiation sources in the United 
                States; or
                    ``(bb) with radiation sources that would pose a 
                lower risk to public health and safety in the event of 
                an accident or attack involving the radiation source; 
                and

[[Page 119 STAT. 806]]

            ``(viii) the creation of, or modifications to, procedures 
        for improving the security of use, transportation, and storage 
        of radiation sources, including--
                    ``(I) periodic audits or inspections by the 
                Commission to ensure that radiation sources are properly 
                secured and can be fully accounted for;
                    ``(II) evaluation of the security measures by the 
                Commission;
                    ``(III) increased fines for violations of Commission 
                regulations relating to security and safety measures 
                applicable to licensees that possess radiation sources;
                    ``(IV) criminal and security background checks for 
                certain individuals with access to radiation sources 
                (including individuals involved with transporting 
                radiation sources);
                    ``(V) requirements for effective and timely 
                exchanges of information relating to the results of 
                criminal and security background checks between the 
                Commission and any State with which the Commission has 
                entered into an agreement under section 274 b.;
                    ``(VI) assurances of the physical security of 
                facilities that contain radiation sources (including 
                facilities used to temporarily store radiation sources 
                being transported); and
                    ``(VII) the screening of shipments to facilities 
                that the Commission determines to be particularly at 
                risk for sabotage of radiation sources to ensure that 
                the shipments do not contain explosives.

    ``g. Action by Commission.--Not <<NOTE: Deadline.>> later than 60 
days after the date of receipt by Congress and the President of a report 
under subsection f.(3)(B), the Commission, in accordance with the 
recommendations of the task force, shall--
            ``(1) take any action the Commission determines to be 
        appropriate, including revising the system of the Commission for 
        licensing radiation sources; and
            ``(2) ensure that States that have entered into agreements 
        with the Commission under section 274 b. take similar action in 
        a timely manner.''.
            (2) Conforming amendment.--The table of sections of the 
        Atomic Energy Act of 1954 (42 U.S.C. prec. 2011) (as amended by 
        subsection (c)(5)(A)) is amended by adding at the end of the 
        items relating to chapter 14 the following:

``Sec. 170H. Radiation source protection.''.

    (e) Treatment of Accelerator-produced and Other Radioactive Material 
as Byproduct Material.--
            (1) Definition of byproduct material.--Section 11 e. of the 
        Atomic Energy Act of 1954 (42 U.S.C. 2014(e)) is amended--
                    (A) by striking ``means (1) any radioactive'' and 
                inserting the following: ``means--
            ``(1) any radioactive''.
                    (B) by striking ``material, and (2) the tailings'' 
                and inserting the following: ``material;
            ``(2) the tailings''.
                    (C) by striking ``content.'' and inserting the 
                following: ``content;
            ``(3)(A) any discrete source of radium-226 that is produced, 
        extracted, or converted after extraction, before, on, or after

[[Page 119 STAT. 807]]

        the date of enactment of this paragraph for use for a 
        commercial, medical, or research activity; or
            ``(B) any material that--
                    ``(i) has been made radioactive by use of a particle 
                accelerator; and
                    ``(ii) is produced, extracted, or converted after 
                extraction, before, on, or after the date of enactment 
                of this paragraph for use for a commercial, medical, or 
                research activity; and
            ``(4) any discrete source of naturally occurring radioactive 
        material, other than source material, that--
                    ``(A) the Commission, in consultation with the 
                Administrator of the Environmental Protection Agency, 
                the Secretary of Energy, the Secretary of Homeland 
                Security, and the head of any other appropriate Federal 
                agency, determines would pose a threat similar to the 
                threat posed by a discrete source of radium-226 to the 
                public health and safety or the common defense and 
                security; and
                    ``(B) before, on, or after the date of enactment of 
                this paragraph is extracted or converted after 
                extraction for use in a commercial, medical, or research 
                activity.''.
            (2) Agreements with governors.--Section 274 b. of the Atomic 
        Energy Act of 1954 (42 U.S.C. 2021(b)) is amended by striking 
        ``State--'' and all that follows through paragraph (4) and 
        inserting the following: ``State:
            ``(1) Byproduct materials (as defined in section 11 e.).
            ``(2) Source materials.
            ``(3) Special nuclear materials in quantities not sufficient 
        to form a critical mass.''.
            (3) Waste disposal.--
                    (A) Domestic distribution.--Section 81 of the Atomic 
                Energy Act of 1954 (42 U.S.C. 2111) is amended--
                          (i) by striking ``No person may'' and 
                      inserting the following:

    ``a. In General.--No person may''.
                          (ii) by adding at the end the following:

    ``b. Requirements.--
            ``(1) In general.--Except as provided in paragraph (2), 
        byproduct material, as defined in paragraphs (3) and (4) of 
        section 11 e., may only be transferred to and disposed of in a 
        disposal facility that--
                    ``(A) is adequate to protect public health and 
                safety; and
                    ``(B)(i) is licensed by the Commission; or
                    ``(ii) is licensed by a State that has entered into 
                an agreement with the Commission under section 274 b., 
                if the licensing requirements of the State are 
                compatible with the licensing requirements of the 
                Commission.
            ``(2) Effect of subsection.--Nothing in this subsection 
        affects the authority of any entity to dispose of byproduct 
        material, as defined in paragraphs (3) and (4) of section 11 e., 
        at a disposal facility in accordance with any Federal or State 
        solid or hazardous waste law, including the Solid Waste Disposal 
        Act (42 U.S.C. 6901 et seq.).

    ``c. Treatment as Low-level Radioactive Waste.--Byproduct material, 
as defined in paragraphs (3) and (4) of section 11 e.,

[[Page 119 STAT. 808]]

disposed of under this section shall not be considered to be low-level 
radioactive waste for the purposes of--
            ``(1) section 2 of the Low-Level Radioactive Waste Policy 
        Act (42 U.S.C. 2021b); or
            ``(2) carrying out a compact that is--
                    ``(A) entered into in accordance with that Act (42 
                U.S.C. 2021b et seq.); and
                    ``(B) approved by Congress.''.
                    (B) Definition of low-level radioactive waste.--
                Section 2(9) of the Low-Level Radioactive Waste Policy 
                Act (42 U.S.C. 2021b(9)) is amended--
                          (i) by redesignating subparagraphs (A) and (B) 
                      as clauses (i) and (ii), respectively, and 
                      indenting the clauses appropriately;
                          (ii) in the matter preceding clause (i) (as 
                      redesignated by subparagraph (A)) by striking 
                      ``The term'' and inserting the following:
                    ``(A) In general.--The term''; and
                          (iii) by adding at the end the following:
                    ``(B) Exclusion.--The term `low-level radioactive 
                waste' does not include byproduct material (as defined 
                in paragraphs (3) and (4) of section 11 e. of the Atomic 
                Energy Act of 1954 (42 U.S.C. 2014(e)).''.
            (4) Final regulations.--
                    (A) Regulations.--
                          (i) In general.--Not <<NOTE: Deadline.>> later 
                      than 18 months after the date of enactment of this 
                      Act, the Commission, after consultation with 
                      States and other stakeholders, shall issue final 
                      regulations establishing such requirements as the 
                      Commission determines to be necessary to carry out 
                      this section and the amendments made by this 
                      section.
                          (ii) Inclusions.--The regulations shall 
                      include a definition of the term ``discrete 
                      source'' for purposes of paragraphs (3) and (4) of 
                      section 11 e. of the Atomic Energy Act of 1954 (42 
                      U.S.C. 2014(e)) (as amended by paragraph (1)).
                    (B) Cooperation.--In promulgating regulations under 
                paragraph (1), the Commission shall, to the maximum 
                extent practicable--
                          (i) cooperate with States; and
                          (ii) use model State standards in existence on 
                      the date of enactment of this Act.
                    (C) Transition plan.--
                          (i) Definition of byproduct material.--In this 
                      paragraph, the term ``byproduct material'' has the 
                      meaning given the term in paragraphs (3) and (4) 
                      of section 11 e. of the Atomic Energy Act of 1954 
                      (42 U.S.C. 2014(e)) (as amended by paragraph (1)).
                          (ii) Preparation and publication.--To 
                      facilitate an orderly transition of regulatory 
                      authority with respect to byproduct material, the 
                      Commission, in issuing regulations under 
                      subparagraph (A), shall prepare and publish a 
                      transition plan for--
                                    (I) States that have not, before the 
                                date on which the plan is published, 
                                entered into an agreement with the 
                                Commission under section 274 b.

[[Page 119 STAT. 809]]

                                of the Atomic Energy Act of 1954 (42 
                                U.S.C. 2021(b)); and
                                    (II) States that have entered into 
                                an agreement with the Commission under 
                                that section before the date on which 
                                the plan is published.
                          (iii) Inclusions.--The transition plan under 
                      clause (ii) shall include--
                                    (I) a description of the conditions 
                                under which a State may exercise 
                                authority over byproduct material; and
                                    (II) a statement of the Commission 
                                that any agreement covering byproduct 
                                material, as defined in paragraph (1) or 
                                (2) of section 11e. of the Atomic Energy 
                                Act of 1954 (42 U.S.C. 2014(e)), entered 
                                into between the Commission and a State 
                                under section 274 b. of that Act (42 
                                U.S.C. 2021(b)) before the date of 
                                publication of the transition plan shall 
                                be considered to include byproduct 
                                material, as defined in paragraph (3) or 
                                (4) of section 11e. of that Act (42 
                                U.S.C. 2014(e)) (as amended by paragraph 
                                (1)), if the Governor of the State 
                                certifies to the Commission on the date 
                                of publication of the transition plan 
                                that--
                                            (aa) the State has a program 
                                        for licensing byproduct 
                                        material, as defined in 
                                        paragraph (3) or (4) of section 
                                        11e. of the Atomic Energy Act of 
                                        1954, that is adequate to 
                                        protect the public health and 
                                        safety, as determined by the 
                                        Commission; and
                                            (bb) the State intends to 
                                        continue to implement the 
                                        regulatory responsibility of the 
                                        State with respect to the 
                                        byproduct material.
                    (D) Availability of radiopharmaceuticals.--In 
                promulgating regulations under subparagraph (A), the 
                Commission shall consider the impact on the availability 
                of radiopharmaceuticals to--
                          (i) physicians; and
                          (ii) patients the medical treatment of which 
                      relies on radiopharmaceuticals.
            (5) Waivers.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the Commission may grant a waiver to any entity of 
                any requirement under this section or an amendment made 
                by this section with respect to a matter relating to 
                byproduct material (as defined in paragraphs (3) and (4) 
                of section 11 e. of the Atomic Energy Act of 1954 (42 
                U.S.C. 2014(e)) (as amended by paragraph (1))) if the 
                Commission determines that the waiver is in accordance 
                with the protection of the public health and safety and 
                the promotion of the common defense and security.
                    (B) Exceptions.--
                          (i) In general.--The Commission may not grant 
                      a waiver under subparagraph (A) with respect to--
                                    (I) any requirement under the 
                                amendments made by subsection (c)(1);
                                    (II) a matter relating to an 
                                importation into, or exportation from, 
                                the United States for a period

[[Page 119 STAT. 810]]

                                ending after the date that is 1 year 
                                after the date of enactment of this Act; 
                                or
                                    (III) any other matter for a period 
                                ending after the date that is 4 years 
                                after the date of enactment of this Act.
                          (ii) Waivers to states.--The Commission shall 
                      terminate any waiver granted to a State under 
                      subparagraph (A) if the Commission determines 
                      that--
                                    (I) the State has entered into an 
                                agreement with the Commission under 
                                section 274 b. of the Atomic Energy Act 
                                of 1954 (42 U.S.C. 2021(b));
                                    (II) the agreement described in 
                                subclause (I) covers byproduct material 
                                (as described in paragraph (3) or (4) of 
                                section 11 e. of the Atomic Energy Act 
                                of 1954 (42 U.S.C. 2014(e)) (as amended 
                                by paragraph (1))); and
                                    (III) the program of the State for 
                                licensing such byproduct material is 
                                adequate to protect the public health 
                                and safety.
                    (C) Publication.--The <<NOTE: Federal 
                Register, publication. Notice.>> Commission shall 
                publish in the Federal Register a notice of any waiver 
                granted under this subsection.

SEC. 652. FINGERPRINTING AND CRIMINAL HISTORY RECORD CHECKS.

    Section 149 of the Atomic Energy Act of 1954 (42 U.S.C. 2169) is 
amended--
            (1) in subsection a.--
                    (A) by striking ``a. The Nuclear'' and all that 
                follows through ``section 147.'' and inserting the 
                following:

    ``a.(1)(A)(i) The Commission shall require each individual or entity 
described in clause (ii) to fingerprint each individual described in 
subparagraph (B) before the individual described in subparagraph (B) is 
permitted access under subparagraph (B).
    ``(ii) The individuals and entities referred to in clause (i) are 
individuals and entities that, on or before the date on which an 
individual is permitted access under subparagraph (B)--
            ``(I) are licensed or certified to engage in an activity 
        subject to regulation by the Commission;
            ``(II) have filed an application for a license or 
        certificate to engage in an activity subject to regulation by 
        the Commission; or
            ``(III) <<NOTE: Notification.>> have notified the Commission 
        in writing of an intent to file an application for licensing, 
        certification, permitting, or approval of a product or activity 
        subject to regulation by the Commission.

    ``(B) The Commission shall require to be fingerprinted any 
individual who--
            ``(i) is permitted unescorted access to--
                    ``(I) a utilization facility; or
                    ``(II) radioactive material or other property 
                subject to regulation by the Commission that the 
                Commission determines to be of such significance to the 
                public health and safety or the common defense and 
                security as to warrant fingerprinting and background 
                checks; or
            ``(ii) is permitted access to safeguards information under 
        section 147.'';

[[Page 119 STAT. 811]]

                    (B) by striking ``All fingerprints obtained by a 
                licensee or applicant as required in the preceding 
                sentence'' and inserting the following:

    ``(2) All fingerprints obtained by an individual or entity as 
required in paragraph (1)'';
                    (C) by striking ``The costs of any identification 
                and records check conducted pursuant to the preceding 
                sentence shall be paid by the licensee or applicant.'' 
                and inserting the following:

    ``(3) The costs of an identification or records check under 
paragraph (2) shall be paid by the individual or entity required to 
conduct the fingerprinting under paragraph (1)(A).''; and
                    (D) by striking ``Notwithstanding any other 
                provision of law, the Attorney General may provide all 
                the results of the search to the Commission, and, in 
                accordance with regulations prescribed under this 
                section, the Commission may provide such results to 
                licensee or applicant submitting such fingerprints.'' 
                and inserting the following:

    ``(4) Notwithstanding any other provision of law--
            ``(A) the Attorney General may provide any result of an 
        identification or records check under paragraph (2) to the 
        Commission; and
            ``(B) the Commission, in accordance with regulations 
        prescribed under this section, may provide the results to the 
        individual or entity required to conduct the fingerprinting 
        under paragraph (1)(A).'';
            (2) in subsection c.--
                    (A) by striking ``, subject to public notice and 
                comment, regulations--'' and inserting ``requirements--
                ''; and
                    (B) in paragraph (2)(B), by striking ``unescorted 
                access to the facility of a licensee or applicant'' and 
                inserting ``unescorted access to a utilization facility, 
                radioactive material, or other property described in 
                subsection a.(1)(B)'';
            (3) by redesignating subsection d. as subsection e.; and
            (4) by inserting after subsection c. the following:

    ``d. The Commission may require a person or individual to conduct 
fingerprinting under subsection a.(1) by authorizing or requiring the 
use of any alternative biometric method for identification that has been 
approved by--
            ``(1) the Attorney General; and
            ``(2) the Commission, by regulation.''.

SEC. 653. USE OF FIREARMS BY SECURITY PERSONNEL.

    The Atomic Energy Act of 1954 is amended by inserting after section 
161 (42 U.S.C. 2201) the following:

``SEC. 161A. <<NOTE: 42 USC 2201a.>> USE OF FIREARMS BY SECURITY 
            PERSONNEL.

    ``a. Definitions.--In this section, the terms `handgun', `rifle', 
`shotgun', `firearm', `ammunition', `machinegun', `short-barreled 
shotgun', and `short-barreled rifle' have the meanings given the terms 
in section 921(a) of title 18, United States Code.
    ``b. Authorization.--Notwithstanding subsections (a)(4), (a)(5), 
(b)(2), (b)(4), and (o) of section 922 of title 18, United States Code, 
section 925(d)(3) of title 18, United States Code, section 5844 of the 
Internal Revenue Code of 1986, and any law (including regulations) of a 
State or a political subdivision of a State that prohibits the transfer, 
receipt, possession, transportation, importation, or use of a handgun, a 
rifle, a shotgun, a short-barreled shotgun, a short-

[[Page 119 STAT. 812]]

barreled rifle, a machinegun, a semiautomatic assault weapon, ammunition 
for any such gun or weapon, or a large capacity ammunition feeding 
device, in carrying out the duties of the Commission, the Commission may 
authorize the security personnel of any licensee or certificate holder 
of the Commission (including an employee of a contractor of such a 
licensee or certificate holder) to transfer, receive, possess, 
transport, import, and use 1 or more such guns, weapons, ammunition, or 
devices, if the Commission determines that--
            ``(1) the authorization is necessary to the discharge of the 
        official duties of the security personnel; and
            ``(2) the security personnel--
                    ``(A) are not otherwise prohibited from possessing 
                or receiving a firearm under Federal or State laws 
                relating to possession of firearms by a certain category 
                of persons;
                    ``(B) have successfully completed any requirement 
                under this section for training in the use of firearms 
                and tactical maneuvers;
                    ``(C) are engaged in the protection of--
                          ``(i) a facility owned or operated by a 
                      licensee or certificate holder of the Commission 
                      that is designated by the Commission; or
                          ``(ii) radioactive material or other property 
                      owned or possessed by a licensee or certificate 
                      holder of the Commission, or that is being 
                      transported to or from a facility owned or 
                      operated by such a licensee or certificate holder, 
                      and that has been determined by the Commission to 
                      be of significance to the common defense and 
                      security or public health and safety; and
                    ``(D) are discharging the official duties of the 
                security personnel in transferring, receiving, 
                possessing, transporting, or importing the weapons, 
                ammunition, or devices.

    ``c. Background Checks.--A person that receives, possesses, 
transports, imports, or uses a weapon, ammunition, or a device under 
subsection (b) shall be subject to a background check by the Attorney 
General, based on fingerprints and including a background check under 
section 103(b) of the Brady Handgun Violence Prevention Act (Public Law 
103-159; 18 U.S.C. 922 note) to determine whether the person is 
prohibited from possessing or receiving a firearm under Federal or State 
law.
    ``d. Effective Date.--This section takes effect on the date on which 
guidelines are issued by the Commission, with the approval of the 
Attorney General, to carry out this section.''.

SEC. 654. UNAUTHORIZED INTRODUCTION OF DANGEROUS WEAPONS.

    Section 229 of the Atomic Energy Act of 1954 (42 U.S.C. 2278a) is 
amended--
            (1) by striking ``Sec. 229, Trespass Upon Commission 
        Installations.--'' and inserting the following:

``SEC. 229. TRESPASS ON COMMISSION INSTALLATIONS.'';

            (2) by adjusting the indentations of subsections a., b., and 
        c. so as to reflect proper subsection indentations; and
            (3) in subsection a.--
                    (A) in the first sentence, by striking ``a. The'' 
                and inserting the following:

    ``a.(1) The'';

[[Page 119 STAT. 813]]

                    (B) in the second sentence, by striking ``Every'' 
                and inserting the following:

    ``(2) Every''; and
                    (C) in paragraph (1) (as designated by subparagraph 
                (A))--
                          (i) by striking ``or in the custody'' and 
                      inserting ``in the custody''; and
                          (ii) by inserting ``, or subject to the 
                      licensing authority of the Commission or 
                      certification by the Commission under this Act or 
                      any other Act'' before the period.

SEC. 655. SABOTAGE OF NUCLEAR FACILITIES, FUEL, OR DESIGNATED MATERIAL.

    (a) In General.--Section 236a. of the Atomic Energy Act of 1954 (42 
U.S.C. 2284(a)) is amended--
            (1) in paragraph (2), by striking ``storage facility'' and 
        inserting ``treatment, storage, or disposal facility'';
            (2) in paragraph (3)--
                    (A) by striking ``such a utilization facility'' and 
                inserting ``a utilization facility licensed under this 
                Act''; and
                    (B) by striking ``or'' at the end;
            (3) in paragraph (4)--
                    (A) by striking ``facility licensed'' and inserting 
                ``, uranium conversion, or nuclear fuel fabrication 
                facility licensed or certified''; and
                    (B) by striking the comma at the end and inserting a 
                semicolon; and
            (4) by inserting after paragraph (4) the following:
            ``(5) any production, utilization, waste storage, waste 
        treatment, waste disposal, uranium enrichment, uranium 
        conversion, or nuclear fuel fabrication facility subject to 
        licensing or certification under this Act during construction of 
        the facility, if the destruction or damage caused or attempted 
        to be caused could adversely affect public health and safety 
        during the operation of the facility;
            ``(6) any primary facility or backup facility from which a 
        radiological emergency preparedness alert and warning system is 
        activated; or
            ``(7) any radioactive material or other property subject to 
        regulation by the Commission that, before the date of the 
        offense, the Commission determines, by order or regulation 
        published in the Federal Register, is of significance to the 
        public health and safety or to common defense and security;''.

    (b) Conforming Amendment.--Section 236 of the Atomic Energy Act of 
1954 (42 U.S.C. 2284) is amended by striking ``intentionally and 
willfully'' each place it appears and inserting ``knowingly''.

SEC. 656. SECURE TRANSFER OF NUCLEAR MATERIALS.

    (a) Amendment.--Chapter 14 of the Atomic Energy Act of 1954 (42 
U.S.C. 2201-2210b) (as amended by section 651(d)(1)) is amended by 
adding at the end the following new section:

``SEC. 170I. <<NOTE: 42 USC 2210i.>> SECURE TRANSFER OF NUCLEAR 
            MATERIALS.

    ``a. <<NOTE: Procedures.>> The Commission shall establish a system 
to ensure that materials described in subsection b., when transferred or 
received in the United States by any party pursuant to an import or 
export

[[Page 119 STAT. 814]]

license issued pursuant to this Act, are accompanied by a manifest 
describing the type and amount of materials being transferred or 
received. Each individual receiving or accompanying the transfer of such 
materials shall be subject to a security background check conducted by 
appropriate Federal entities.
    ``b. Except as otherwise provided by the Commission by regulation, 
the materials referred to in subsection a. are byproduct materials, 
source materials, special nuclear materials, high-level radioactive 
waste, spent nuclear fuel, transuranic waste, and low-level radioactive 
waste (as defined in section 2(16) of the Nuclear Waste Policy Act of 
1982 (42 U.S.C. 10101(16))).''.
    (b) Regulations.--Not <<NOTE: Deadline. 42 USC 2210i note.>> later 
than 1 year after the date of the enactment of this Act, and from time 
to time thereafter as it considers necessary, the Nuclear Regulatory 
Commission shall issue regulations identifying radioactive materials or 
classes of individuals that, consistent with the protection of public 
health and safety and the common defense and security, are appropriate 
exceptions to the requirements of section 170D of the Atomic Energy Act 
of 1954, as added by subsection (a) of this section.

    (c) Effective Date.--The <<NOTE: 42 USC 2210i note.>> amendment made 
by subsection (a) shall take effect upon the issuance of regulations 
under subsection (b), except that the background check requirement shall 
become effective on a date established by the Commission.

    (d) Effect on Other Law.--Nothing <<NOTE: 42 USC 2210i note.>> in 
this section or the amendment made by this section shall waive, modify, 
or affect the application of chapter 51 of title 49, United States Code, 
part A of subtitle V of title 49, United States Code, part B of subtitle 
VI of title 49, United States Code, and title 23, United States Code.

    (e) Conforming Amendment.--The table of sections of the Atomic 
Energy Act of 1954 (42 U.S.C. prec. 2011) (as amended by subsection (a)) 
is amended by adding at the end of the items relating to chapter 14 the 
following:

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

SEC. 657. <<NOTE: 42 USC 16042.>> DEPARTMENT OF HOMELAND SECURITY 
            CONSULTATION.

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

                      TITLE VII--VEHICLES AND FUELS

                      Subtitle A--Existing Programs

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

    Section 400AA(a)(3)(E) of the Energy Policy and Conservation Act (42 
U.S.C. 6374(a)(3)(E)) is amended to read as follows:
    ``(E)(i) Dual fueled vehicles acquired pursuant to this section 
shall be operated on alternative fuels unless the Secretary determines 
that an agency qualifies for a waiver of such requirement for vehicles 
operated by the agency in a particular geographic area in which--
            ``(I) the alternative fuel otherwise required to be used in 
        the vehicle is not reasonably available to retail purchasers

[[Page 119 STAT. 815]]

        of the fuel, as certified to the Secretary by the head of the 
        agency; or
            ``(II) the cost of the alternative fuel otherwise required 
        to be used in the vehicle is unreasonably more expensive 
        compared to gasoline, as certified to the Secretary by the head 
        of the agency.

    ``(ii) <<NOTE: Reports.>> The Secretary shall monitor compliance 
with this subparagraph by all such fleets and shall report annually to 
Congress on the extent to which the requirements of this subparagraph 
are being achieved. The report shall include information on annual 
reductions achieved from the use of petroleum-based fuels and the 
problems, if any, encountered in acquiring alternative fuels.''.

SEC. 702. INCREMENTAL COST ALLOCATION.

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

SEC. 703. ALTERNATIVE COMPLIANCE AND FLEXIBILITY.

    (a) Alternative Compliance.--Title V of the Energy Policy Act of 
1992 (42 U.S.C. 13251 et seq.) is amended--
            (1) by redesignating section 514 (42 U.S.C. 13264) as 
        section 515; and
            (2) by inserting after section 513 (42 U.S.C. 13263) the 
        following:

``SEC. 514. <<NOTE: 42 USC 13263a.>> ALTERNATIVE COMPLIANCE.

    ``(a) Application for Waiver.--Any covered person subject to section 
501 and any State subject to section 507(o) may petition the Secretary 
for a waiver of the applicable requirements of section 501 or 507(o).
    ``(b) Grant of Waiver.--The Secretary shall grant a waiver of the 
requirements of section 501 or 507(o) on a showing that the fleet owned, 
operated, leased, or otherwise controlled by the State or covered 
person--
            ``(1) will achieve a reduction in the annual consumption of 
        petroleum fuels by the fleet equal to--
                    ``(A) the reduction in consumption of petroleum that 
                would result from 100 percent cumulative compliance with 
                the fuel use requirements of section 501; or
                    ``(B) in the case of an entity covered under section 
                507(o), a reduction equal to the annual consumption by 
                the State entity of alternative fuels if all of the 
                cumulative alternative fuel vehicles of the State entity 
                given credit under section 508 were to use alternative 
                fuel 100 percent of the time; and
            ``(2) is in compliance with all applicable vehicle emission 
        standards established by the Administrator of the Environmental 
        Protection Agency under the Clean Air Act (42 U.S.C. 7401 et 
        seq.).

    ``(c) Reporting Requirement.--Not later than December 31 of a model 
year, any State or covered person granted a waiver under this section 
for the preceding model year shall submit to the Secretary an annual 
report that--
            ``(1) <<NOTE: Certification.>> certifies the quantity of the 
        petroleum motor fuel reduction of the State or covered person 
        during the preceding model year; and

[[Page 119 STAT. 816]]

            ``(2) projects the baseline quantity of the petroleum motor 
        fuel reduction of the State or covered person during the 
        following model year.

    ``(d) Revocation of Waiver.--If a State or covered person that 
receives a waiver under this section fails to comply with this section, 
the Secretary--
            ``(1) shall revoke the waiver; and
            ``(2) may impose on the State or covered person a penalty 
        under section 512.''.

    (b) Conforming Amendment.--Section 511 of the Energy Policy Act of 
1992 (42 U.S.C. 13261) is amended by striking ``or 507'' and inserting 
``507, or 514''.
    (c) Table of Contents Amendment.--The table of contents of the 
Energy Policy Act of 1992 (42 U.S.C. prec. 13201) is amended by striking 
the item relating to section 514 and inserting the following:

``Sec. 514. Alternative compliance.
``Sec. 515. Authorization of appropriations.''.

SEC. 704. REVIEW OF ENERGY POLICY ACT OF 1992 PROGRAMS.

    (a) In General.--Not <<NOTE: Deadline.>> later than 180 days after 
the date of enactment of this section, the Secretary shall complete a 
study to determine the effect that titles III, IV, and V of the Energy 
Policy Act of 1992 (42 U.S.C. 13211 et seq.) have had on--
            (1) the development of alternative fueled vehicle 
        technology;
            (2) the availability of that technology in the market; and
            (3) the cost of alternative fueled vehicles.

    (b) Topics.--As part of the study under subsection (a), the 
Secretary shall specifically identify--
            (1) the number of alternative fueled vehicles acquired by 
        fleets or covered persons required to acquire alternative fueled 
        vehicles;
            (2) the quantity, by type, of alternative fuel actually used 
        in alternative fueled vehicles acquired by fleets or covered 
        persons;
            (3) the quantity of petroleum displaced by the use of 
        alternative fuels in alternative fueled vehicles acquired by 
        fleets or covered persons;
            (4) the direct and indirect costs of compliance with 
        requirements under titles III, IV, and V of the Energy Policy 
        Act of 1992 (42 U.S.C. 13211 et seq.), including--
                    (A) vehicle acquisition requirements imposed on 
                fleets or covered persons;
                    (B) administrative and recordkeeping expenses;
                    (C) fuel and fuel infrastructure costs;
                    (D) associated training and employee expenses; and
                    (E) any other factors or expenses the Secretary 
                determines to be necessary to compile reliable estimates 
                of the overall costs and benefits of complying with 
                programs under those titles for fleets, covered persons, 
                and the national economy;
            (5) the existence of obstacles preventing compliance with 
        vehicle acquisition requirements and increased use of 
        alternative fuel in alternative fueled vehicles acquired by 
        fleets or covered persons; and
            (6) the projected impact of amendments to the Energy Policy 
        Act of 1992 made by this title.

[[Page 119 STAT. 817]]

    (c) Report.--Upon completion of the study under this section, the 
Secretary shall submit to Congress a report that describes the results 
of the study and includes any recommendations of the Secretary for 
legislative or administrative changes concerning the alternative fueled 
vehicle requirements under titles III, IV, and V of the Energy Policy 
Act of 1992 (42 U.S.C. 13211 et seq.).

SEC. 705. REPORT CONCERNING COMPLIANCE WITH ALTERNATIVE FUELED VEHICLE 
            PURCHASING REQUIREMENTS.

    Section 310(b)(1) of the Energy Policy Act of 1992 (42 U.S.C. 
13218(b)(1)) is amended by striking ``1 year after the date of enactment 
of this subsection'' and inserting ``February 15, 2006''.

SEC. 706. <<NOTE: 42 USC 16051.>> JOINT FLEXIBLE FUEL/HYBRID VEHICLE 
            COMMERCIALIZATION INITIATIVE.

    (a) Definitions.--In this section:
            (1) Eligible entity.--The term ``eligible entity'' means--
                    (A) a for-profit corporation;
                    (B) a nonprofit corporation; or
                    (C) an institution of higher education.
            (2) Program.--The term ``program'' means a program 
        established under subsection (b).

    (b) Establishment.--The Secretary shall establish a program to 
improve technologies for the commercialization of--
            (1) a combination hybrid/flexible fuel vehicle; or
            (2) a plug-in hybrid/flexible fuel vehicle.

    (c) Grants.--In carrying out the program, the Secretary shall 
provide grants that give preference to proposals that--
            (1) achieve the greatest reduction in miles per gallon of 
        petroleum fuel consumption;
            (2) achieve not less than 250 miles per gallon of petroleum 
        fuel consumption; and
            (3) have the greatest potential of commercialization to the 
        general public within 5 years.

    (d) Verification.--Not <<NOTE: Deadline. Federal 
Register, publication. Procedures.>> later than 90 days after the date 
of enactment of this Act, the Secretary shall publish in the Federal 
Register procedures to verify--
            (1) the hybrid/flexible fuel vehicle technologies to be 
        demonstrated; and
            (2) that grants are administered in accordance with this 
        section.

    (e) Report.--Not later than 260 days after the date of enactment of 
this Act, and annually thereafter, the Secretary shall submit to 
Congress a report that--
            (1) identifies the grant recipients;
            (2) describes the technologies to be funded under the 
        program;
            (3) assesses the feasibility of the technologies described 
        in paragraph (2) in meeting the goals described in subsection 
        (c);
            (4) identifies applications submitted for the program that 
        were not funded; and
            (5) makes recommendations for Federal legislation to achieve 
        commercialization of the technology demonstrated.

    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, to remain available until 
expended--
            (1) $3,000,000 for fiscal year 2006;

[[Page 119 STAT. 818]]

            (2) $7,000,000 for fiscal year 2007;
            (3) $10,000,000 for fiscal year 2008; and
            (4) $20,000,000 for fiscal year 2009.

SEC. 707. EMERGENCY EXEMPTION.

    Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211) is 
amended in paragraph (9)(E) by inserting before the semicolon at the end 
``, including vehicles directly used in the emergency repair of 
transmission lines and in the restoration of electricity service 
following power outages, as determined by the Secretary''.

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

                         PART 1--HYBRID VEHICLES

SEC. 711. <<NOTE: 42 USC 16061.>> HYBRID VEHICLES.

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

SEC. 712. <<NOTE: 42 USC 16062.>> EFFICIENT HYBRID AND ADVANCED DIESEL 
            VEHICLES.

    (a) Program.--The Secretary shall establish a program to encourage 
domestic production and sales of efficient hybrid and advanced diesel 
vehicles. The program shall include grants to automobile manufacturers 
to encourage domestic production of efficient hybrid and advanced diesel 
vehicles.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for carrying out this section such sums as 
may be necessary for each of the fiscal years 2006 through 2015.

                        PART 2--ADVANCED VEHICLES

SEC. 721. <<NOTE: 42 USC 16071.>> PILOT PROGRAM.

    (a) Establishment.--The Secretary, in consultation with the 
Secretary of Transportation, shall establish a competitive grant pilot 
program (referred to in this part as the ``pilot program''), to be 
administered through the Clean Cities Program of the Department, to 
provide not more than 30 geographically dispersed project grants to 
State governments, local governments, or metropolitan transportation 
authorities to carry out a project or projects for the purposes 
described in subsection (b).
    (b) Grant Purposes.--A grant under this section may be used for the 
following purposes:
            (1) The acquisition of alternative fueled vehicles or fuel 
        cell vehicles, including--
                    (A) passenger vehicles (including neighborhood 
                electric vehicles); and
                    (B) motorized 2-wheel bicycles or other vehicles for 
                use by law enforcement personnel or other State or local 
                government or metropolitan transportation authority 
                employees.
            (2) The acquisition of alternative fueled vehicles, hybrid 
        vehicles, or fuel cell vehicles, including--

[[Page 119 STAT. 819]]

                    (A) buses used for public transportation or 
                transportation to and from schools;
                    (B) delivery vehicles for goods or services; and
                    (C) ground support vehicles at public airports 
                (including vehicles to carry baggage or push or pull 
                airplanes toward or away from terminal gates).
            (3) The acquisition of ultra-low sulfur diesel vehicles.
            (4) Installation or acquisition of infrastructure necessary 
        to directly support an alternative fueled vehicle, fuel cell 
        vehicle, or hybrid vehicle project funded by the grant, 
        including fueling and other support equipment.
            (5) Operation and maintenance of vehicles, infrastructure, 
        and equipment acquired as part of a project funded by the grant.

    (c) Applications.--
            (1) Requirements.--
                    (A) In general.--The Secretary shall issue 
                requirements for applying for grants under the pilot 
                program.
                    (B) Minimum requirements.--At a minimum, the 
                Secretary shall require that an application for a 
                grant--
                          (i) be submitted by the head of a State or 
                      local government or a metropolitan transportation 
                      authority, or any combination thereof, and a 
                      registered participant in the Clean Cities Program 
                      of the Department; and
                          (ii) include--
                                    (I) a description of the project 
                                proposed in the application, including 
                                how the project meets the requirements 
                                of this part;
                                    (II) an estimate of the ridership or 
                                degree of use of the project;
                                    (III) an estimate of the air 
                                pollution emissions reduced and fossil 
                                fuel displaced as a result of the 
                                project, and a plan to collect and 
                                disseminate environmental data, related 
                                to the project to be funded under the 
                                grant, over the life of the project;
                                    (IV) a description of how the 
                                project will be sustainable without 
                                Federal assistance after the completion 
                                of the term of the grant;
                                    (V) a complete description of the 
                                costs of the project, including 
                                acquisition, construction, operation, 
                                and maintenance costs over the expected 
                                life of the project;
                                    (VI) a description of which costs of 
                                the project will be supported by Federal 
                                assistance under this part; and
                                    (VII) documentation to the 
                                satisfaction of the Secretary that 
                                diesel fuel containing sulfur at not 
                                more than 15 parts per million is 
                                available for carrying out the project, 
                                and a commitment by the applicant to use 
                                such fuel in carrying out the project.
            (2) Partners.--An applicant under paragraph (1) may carry 
        out a project under the pilot program in partnership with public 
        and private entities.

    (d) Selection Criteria.--In evaluating applications under the pilot 
program, the Secretary shall--

[[Page 119 STAT. 820]]

            (1) consider each applicant's previous experience with 
        similar projects; and
            (2) give priority consideration to applications that--
                    (A) are most likely to maximize protection of the 
                environment;
                    (B) demonstrate the greatest commitment on the part 
                of the applicant to ensure funding for the proposed 
                project and the greatest likelihood that the project 
                will be maintained or expanded after Federal assistance 
                under this part is completed; and
                    (C) exceed the minimum requirements of subsection 
                (c)(1)(B)(ii).

    (e) Pilot Project Requirements.--
            (1) Maximum amount.--The Secretary shall not provide more 
        than $15,000,000 in Federal assistance under the pilot program 
        to any applicant.
            (2) Cost sharing.--The Secretary shall not provide more than 
        50 percent of the cost, incurred during the period of the grant, 
        of any project under the pilot program.
            (3) Maximum period of grants.--The Secretary shall not fund 
        any applicant under the pilot program for more than 5 years.
            (4) Deployment and distribution.--The Secretary shall seek 
        to the maximum extent practicable to ensure a broad geographic 
        distribution of project sites.
            (5) Transfer of <<NOTE: Procedures.>> information and 
        knowledge.--The Secretary shall establish mechanisms to ensure 
        that the information and knowledge gained by participants in the 
        pilot program are transferred among the pilot program 
        participants and to other interested parties, including other 
        applicants that submitted applications.

    (f) <<NOTE: Deadlines.>> Schedule.--
            (1) Publication.--Not <<NOTE: Federal 
        Register, publication. Commerce Business Daily, 
        publication.>> later than 90 days after the date of enactment of 
        this Act, the Secretary shall publish in the Federal Register, 
        Commerce Business Daily, and elsewhere as appropriate, a request 
        for applications to undertake projects under the pilot program. 
        Applications shall be due not later than 180 days after the date 
        of publication of the notice.
            (2) Selection.--Not later than 180 days after the date by 
        which applications for grants are due, the Secretary shall 
        select by competitive, peer reviewed proposal, all applications 
        for projects to be awarded a grant under the pilot program.

    (g) Definitions.--For <<NOTE: Regulations.>> purposes of carrying 
out the pilot program, the Secretary shall issue regulations defining 
any term, as the Secretary determines to be necessary.

SEC. 722. <<NOTE: 42 USC 16072.>> REPORTS TO CONGRESS.

    (a) Initial Report.--Not later than 60 days after the date on which 
grants are awarded under this part, the Secretary shall submit to 
Congress a report containing--
            (1) an identification of the grant recipients and a 
        description of the projects to be funded;
            (2) an identification of other applicants that submitted 
        applications for the pilot program; and
            (3) a description of the mechanisms used by the Secretary to 
        ensure that the information and knowledge gained by participants 
        in the pilot program are transferred among the pilot

[[Page 119 STAT. 821]]

        program participants and to other interested parties, including 
        other applicants that submitted applications.

    (b) Evaluation.--Not later than 3 years after the date of enactment 
of this Act, and annually thereafter until the pilot program ends, the 
Secretary shall submit to Congress a report containing an evaluation of 
the effectiveness of the pilot program, including--
            (1) an assessment of the benefits to the environment derived 
        from the projects included in the pilot program; and
            (2) an estimate of the potential benefits to the environment 
        to be derived from widespread application of alternative fueled 
        vehicles and ultra-low sulfur diesel vehicles.

SEC. 723. <<NOTE: 42 USC 16073.>> AUTHORIZATION OF APPROPRIATIONS.

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

                         PART 3--FUEL CELL BUSES

SEC. 731. <<NOTE: 42 USC 16081.>> FUEL CELL TRANSIT BUS DEMONSTRATION.

    (a) In General.--The Secretary, in consultation with the Secretary 
of Transportation, shall establish a transit bus demonstration program 
to make competitive, merit-based awards for 5-year projects to 
demonstrate not more than 25 fuel cell transit buses (and necessary 
infrastructure) in 5 geographically dispersed localities.
    (b) Preference.--In selecting projects under this section, the 
Secretary shall give preference to projects that are most likely to 
mitigate congestion and improve air quality.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section $10,000,000 for 
each of fiscal years 2006 through 2010.

                     Subtitle C--Clean School Buses

SEC. 741. <<NOTE: 42 USC 16091.>> CLEAN SCHOOL BUS PROGRAM.

    (a) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Alternative fuel.--The term ``alternative fuel'' means--
                    (A) liquefied natural gas, compressed natural gas, 
                liquefied petroleum gas, hydrogen, or propane;
                    (B) methanol or ethanol at no less than 85 percent 
                by volume; or
                    (C) biodiesel conforming with standards published by 
                the American Society for Testing and Materials as of the 
                date of enactment of this Act.
            (3) Clean school bus.--The term ``clean school bus'' means a 
        school bus with a gross vehicle weight of greater than 14,000 
        pounds that--
                    (A) is powered by a heavy duty engine; and
                    (B) is operated solely on an alternative fuel or 
                ultra-low sulfur diesel fuel.
            (4) Eligible recipient.--

[[Page 119 STAT. 822]]

                    (A) In general.--Subject to subparagraph (B), the 
                term ``eligible recipient'' means--
                          (i) 1 or more local or State governmental 
                      entities responsible for--
                                    (I) providing school bus service to 
                                1 or more public school systems; or
                                    (II) the purchase of school buses;
                          (ii) 1 or more contracting entities that 
                      provide school bus service to 1 or more public 
                      school systems; or
                          (iii) a nonprofit school transportation 
                      association.
                    (B) Special requirements.--In the case of eligible 
                recipients identified under clauses (ii) and (iii), the 
                Administrator shall establish timely and appropriate 
                requirements for notice and may establish timely and 
                appropriate requirements for approval by the public 
                school systems that would be served by buses purchased 
                or retrofit using grant funds made available under this 
                section.
            (5) Retrofit technology.--The term ``retrofit technology'' 
        means a particulate filter or other emissions control equipment 
        that is verified or certified by the Administrator or the 
        California Air Resources Board as an effective emission 
        reduction technology when installed on an existing school bus.
            (6) Ultra-low sulfur diesel fuel.--The term ``ultra-low 
        sulfur diesel fuel'' means diesel fuel that contains sulfur at 
        not more than 15 parts per million.

    (b) Program for Retrofit or Replacement of Certain Existing School 
Buses With Clean School Buses.--
            (1) Establishment.--
                    (A) In general.--The Administrator, in consultation 
                with the Secretary and other appropriate Federal 
                departments and agencies, shall establish a program for 
                awarding grants on a competitive basis to eligible 
                recipients for the replacement, or retrofit (including 
                repowering, aftertreatment, and remanufactured engines) 
                of, certain existing school buses.
                    (B) Balancing.--In awarding grants under this 
                section, the Administrator shall, to the maximum extent 
                practicable, achieve an appropriate balance between 
                awarding grants--
                          (i) to replace school buses; and
                          (ii) to install retrofit technologies.
            (2) Priority of grant applications.--
                    (A) Replacement.--In the case of grant applications 
                to replace school buses, the Administrator shall give 
                priority to applicants that propose to replace school 
                buses manufactured before model year 1977.
                    (B) Retrofitting.--In the case of grant applications 
                to retrofit school buses, the Administrator shall give 
                priority to applicants that propose to retrofit school 
                buses manufactured in or after model year 1991.
            (3) Use of school bus fleet.--
                    (A) In general.--All school buses acquired or 
                retrofitted with funds provided under this section shall 
                be operated as part of the school bus fleet for which 
                the grant was made for not less than 5 years.

[[Page 119 STAT. 823]]

                    (B) Maintenance, operation, and fueling.--New school 
                buses and retrofit technology shall be maintained, 
                operated, and fueled according to manufacturer 
                recommendations or State requirements.
            (4) Retrofit grants.--The Administrator may award grants for 
        up to 100 percent of the retrofit technologies and installation 
        costs.
            (5) Replacement grants.--
                    (A) Eligibility for 50 percent grants.--The 
                Administrator may award grants for replacement of school 
                buses in the amount of up to one-half of the acquisition 
                costs (including fueling infrastructure) for--
                          (i) clean school buses with engines 
                      manufactured in model year 2005 or 2006 that emit 
                      not more than--
                                    (I) 1.8 grams per brake horsepower-
                                hour of non-methane hydrocarbons and 
                                oxides of nitrogen; and
                                    (II) .01 grams per brake horsepower-
                                hour of particulate matter; or
                          (ii) clean school buses with engines 
                      manufactured in model year 2007, 2008, or 2009 
                      that satisfy regulatory requirements established 
                      by the Administrator for emissions of oxides of 
                      nitrogen and particulate matter to be applicable 
                      for school buses manufactured in model year 2010.
                    (B) Eligibility for 25 percent grants.--The 
                Administrator may award grants for replacement of school 
                buses in the amount of up to one-fourth of the 
                acquisition costs (including fueling infrastructure) 
                for--
                          (i) clean school buses with engines 
                      manufactured in model year 2005 or 2006 that emit 
                      not more than--
                                    (I) 2.5 grams per brake horsepower-
                                hour of non-methane hydrocarbons and 
                                oxides of nitrogen; and
                                    (II) .01 grams per brake horsepower-
                                hour of particulate matter; or
                          (ii) clean school buses with engines 
                      manufactured in model year 2007 or thereafter that 
                      satisfy regulatory requirements established by the 
                      Administrator for emissions of oxides of nitrogen 
                      and particulate matter from school buses 
                      manufactured in that model year.
            (6) Ultra-low sulfur diesel fuel.--
                    (A) In general.--In the case of a grant recipient 
                receiving a grant for the acquisition of ultra-low 
                sulfur diesel fuel school buses with engines 
                manufactured in model year 2005 or 2006, the grant 
                recipient shall provide, to the satisfaction of the 
                Administrator--
                          (i) documentation that diesel fuel containing 
                      sulfur at not more than 15 parts per million is 
                      available for carrying out the purposes of the 
                      grant; and
                          (ii) a commitment by the applicant to use that 
                      fuel in carrying out the purposes of the grant.
            (7) Deployment and distribution.--The Administrator shall, 
        to the maximum extent practicable--
                    (A) achieve nationwide deployment of clean school 
                buses through the program under this section; and

[[Page 119 STAT. 824]]

                    (B) ensure a broad geographic distribution of grant 
                awards, with no State receiving more than 10 percent of 
                the grant funding made available under this section 
                during a fiscal year.
            (8) Annual report.--
                    (A) In general.--Not later than January 31 of each 
                year, the Administrator shall submit to Congress a 
                report that--
                          (i) evaluates the implementation of this 
                      section; and
                          (ii) describes--
                                    (I) the total number of grant 
                                applications received;
                                    (II) the number and types of 
                                alternative fuel school buses, ultra-low 
                                sulfur diesel fuel school buses, and 
                                retrofitted buses requested in grant 
                                applications;
                                    (III) grants awarded and the 
                                criteria used to select the grant 
                                recipients;
                                    (IV) certified engine emission 
                                levels of all buses purchased or 
                                retrofitted under this section;
                                    (V) an evaluation of the in-use 
                                emission level of buses purchased or 
                                retrofitted under this section; and
                                    (VI) any other information the 
                                Administrator considers appropriate.

    (c) Education.--
            (1) In general.--Not <<NOTE: Deadline.>> later than 90 days 
        after the date of enactment of this Act, the Administrator shall 
        develop an education outreach program to promote and explain the 
        grant program.
            (2) Coordination with stakeholders.--The outreach program 
        shall be designed and conducted in conjunction with national 
        school bus transportation associations and other stakeholders.
            (3) Components.--The outreach program shall--
                    (A) inform potential grant recipients on the process 
                of applying for grants;
                    (B) describe the available technologies and the 
                benefits of the technologies;
                    (C) explain the benefits of participating in the 
                grant program; and
                    (D) include, as appropriate, information from the 
                annual report required under subsection (b)(8).

    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Administrator to carry out this section, to remain 
available until expended--
            (1) $55,000,000 for each of fiscal years 2006 and 2007; and
            (2) such sums as are necessary for each of fiscal years 
        2008, 2009, and 2010.

SEC. 742. <<NOTE: 42 USC 16092.>> DIESEL TRUCK RETROFIT AND FLEET 
            MODERNIZATION PROGRAM.

    (a) Establishment.--The Administrator, in consultation with the 
Secretary, shall establish a program for awarding grants on

[[Page 119 STAT. 825]]

a competitive basis to public agencies and entities for fleet 
modernization programs including installation of retrofit technologies 
for diesel trucks.
    (b) Eligible Recipients.--A grant shall be awarded under this 
section only to a State or local government or an agency or 
instrumentality of a State or local government or of two or more State 
or local governments who will allocate funds, with preference to ports 
and other major hauling operations.
    (c) Awards.--
            (1) In general.--The Administrator shall seek, to the 
        maximum extent practicable, to ensure a broad geographic 
        distribution of grants under this section.
            (2) Preferences.--In making awards of grants under this 
        section, the Administrator shall give preference to proposals 
        that--
                    (A) will achieve the greatest reductions in 
                emissions of nonmethane hydrocarbons, oxides of 
                nitrogen, and/or particulate matter per proposal or per 
                truck; or
                    (B) involve the use of Environmental Protection 
                Agency or California Air Resources Board verified 
                emissions control retrofit technology on diesel trucks 
                that operate solely on ultra-low sulfur diesel fuel 
                after September 2006.

    (d) Conditions of Grant.--A grant shall be provided under this 
section on the conditions that--
            (1) trucks which are replacing scrapped trucks and on which 
        retrofit emissions-control technology are to be demonstrated--
                    (A) will operate on ultra-low sulfur diesel fuel 
                where such fuel is reasonably available or required for 
                sale by State or local law or regulation;
                    (B) were manufactured in model year 1998 and before; 
                and
                    (C) will be used for the transportation of cargo 
                goods especially in port areas or used in goods movement 
                and major hauling operations;
            (2) grant funds will be used for the purchase of emission 
        control retrofit technology, including State taxes and contract 
        fees; and
            (3) grant recipients will provide at least 50 percent of the 
        total cost of the retrofit, including the purchase of emission 
        control retrofit technology and all necessary labor for 
        installation of the retrofit, from any source other than this 
        section.

    (e) Verification.--Not <<NOTE: Deadline. Federal 
Register, publication. Procedures.>> later than 90 days after the date 
of enactment of this Act, the Administrator shall publish in the Federal 
Register procedures to--
            (1) make grants pursuant to this section;
            (2) verify that trucks powered by ultra-low sulfur diesel 
        fuel on which retrofit emissions-control technology are to be 
        demonstrated will operate on diesel fuel containing not more 
        than 15 parts per million of sulfur after September 2006; and
            (3) verify that grants are administered in accordance with 
        this section.

    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to the Administrator to carry out this section, to remain 
available until expended the following sums:
            (1) $20,000,000 for fiscal year 2006.
            (2) $35,000,000 for fiscal year 2007.

[[Page 119 STAT. 826]]

            (3) $45,000,000 for fiscal year 2008.
            (4) Such sums as are necessary for each of fiscal years 2009 
        and 2010.

SEC. 743. <<NOTE: 42 USC 16093.>> FUEL CELL SCHOOL BUSES.

    (a) Establishment.--The Secretary shall establish a program for 
entering into cooperative agreements--
            (1) with private sector fuel cell bus developers for the 
        development of fuel cell-powered school buses; and
            (2) subsequently, with not less than 2 units of local 
        government using natural gas-powered school buses and such 
        private sector fuel cell bus developers to demonstrate the use 
        of fuel cell-powered school buses.

    (b) Cost Sharing.--The non-Federal contribution for activities 
funded under this section shall be not less than--
            (1) 20 percent for fuel infrastructure development 
        activities; and
            (2) 50 percent for demonstration activities and for 
        development activities not described in paragraph (1).

    (c) Reports to Congress.--Not later than 3 years after the date of 
enactment of this Act, the Secretary shall transmit to Congress a report 
that--
            (1) evaluates the process of converting natural gas 
        infrastructure to accommodate fuel cell-powered school buses; 
        and
            (2) assesses the results of the development and 
        demonstration program under this section.

    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section $25,000,000 for 
the period of fiscal years 2006 through 2009.

                        Subtitle D--Miscellaneous

SEC. 751. <<NOTE: 42 USC 16101.>> RAILROAD EFFICIENCY.

    (a) Establishment.--The Secretary shall (in cooperation with the 
Secretary of Transportation and the Administrator of the Environmental 
Protection Agency) establish a cost-shared, public-private research 
partnership involving the Federal Government, railroad carriers, 
locomotive manufacturers and equipment suppliers, and the Association of 
American Railroads, to develop and demonstrate railroad locomotive 
technologies that increase fuel economy, reduce emissions, and lower 
costs of operation.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section--
            (1) $15,000,000 for fiscal year 2006;
            (2) $20,000,000 for fiscal year 2007; and
            (3) $30,000,000 for fiscal year 2008.

SEC. 752. MOBILE EMISSION REDUCTIONS TRADING AND CREDITING.

    (a) In General.--Not <<NOTE: Deadline. Reports.>> later than 180 
days after the date of enactment of this Act, the Administrator of the 
Environmental Protection Agency shall submit to Congress a report on the 
experience of the Administrator with the trading of mobile source 
emission reduction credits for use by owners and operators of stationary 
source emission sources to meet emission offset requirements within a 
nonattainment area.

    (b) Contents.--The report shall describe--

[[Page 119 STAT. 827]]

            (1) projects approved by the Administrator that include the 
        trading of mobile source emission reduction credits for use by 
        stationary sources in complying with offset requirements, 
        including a description of--
                    (A) project and stationary sources location;
                    (B) volumes of emissions offset and traded;
                    (C) the sources of mobile emission reduction 
                credits; and
                    (D) if available, the cost of the credits;
            (2) the significant issues identified by the Administrator 
        in consideration and approval of trading in the projects;
            (3) the requirements for monitoring and assessing the air 
        quality benefits of any approved project;
            (4) the statutory authority on which the Administrator has 
        based approval of the projects;
            (5) an evaluation of how the resolution of issues in 
        approved projects could be used in other projects and whether 
        the emission reduction credits may be considered to be 
        additional in relation to other requirements;
            (6) the potential, for attainment purposes, of emission 
        reduction credits relating to transit and land use policies; and
            (7) any other issues that the Administrator considers 
        relevant to the trading and generation of mobile source emission 
        reduction credits for use by stationary sources or for other 
        purposes.

SEC. 753. AVIATION FUEL CONSERVATION AND EMISSIONS.

    (a) In General.--Not <<NOTE: Deadline.>> later than 60 days after 
the date of enactment of this Act, the Administrator of the Federal 
Aviation Administration and the Administrator of the Environmental 
Protection Agency shall jointly initiate a study to identify--
            (1) the impact of aircraft emissions on air quality in 
        nonattainment areas;
            (2) ways to promote fuel conservation measures for aviation 
        to enhance fuel efficiency and reduce emissions; and
            (3) opportunities to reduce air traffic inefficiencies that 
        increase fuel burn and emissions.

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

[[Page 119 STAT. 828]]

    (d) Risk Assessments.--Any assessment of risk to human health and 
the environment prepared by the Administrator of the Federal Aviation 
Administration or the Administrator of the Environmental Protection 
Agency to support the report in this section shall be based on sound and 
objective scientific practices, shall consider the best available 
science, and shall present the weight of the scientific evidence 
concerning such risks.

SEC. 754. <<NOTE: 42 USC 16102.>> DIESEL FUELED VEHICLES.

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

SEC. 755. <<NOTE: 42 USC 16103.>> CONSERVE BY BICYCLING PROGRAM.

    (a) Definitions.--In this section:
            (1) Program.--The term ``program'' means the Conserve by 
        Bicycling Program established by subsection (b).
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Transportation.

    (b) Establishment.--There is established within the Department of 
Transportation a program to be known as the ``Conserve by Bicycling 
Program''.
    (c) Projects.--
            (1) In general.--In carrying out the program, the Secretary 
        shall establish not more than 10 pilot projects that are--
                    (A) dispersed geographically throughout the United 
                States; and
                    (B) designed to conserve energy resources by 
                encouraging the use of bicycles in place of motor 
                vehicles.
            (2) Requirements.--A pilot project described in paragraph 
        (1) shall--
                    (A) use education and marketing to convert motor 
                vehicle trips to bicycle trips;
                    (B) document project results and energy savings (in 
                estimated units of energy conserved);
                    (C) facilitate partnerships among interested parties 
                in at least 2 of the fields of--

[[Page 119 STAT. 829]]

                          (i) transportation;
                          (ii) law enforcement;
                          (iii) education;
                          (iv) public health;
                          (v) environment; and
                          (vi) energy;
                    (D) maximize bicycle facility investments;
                    (E) demonstrate methods that may be used in other 
                regions of the United States; and
                    (F) facilitate the continuation of ongoing programs 
                that are sustained by local resources.
            (3) Cost sharing.--At least 20 percent of the cost of each 
        pilot project described in paragraph (1) shall be provided from 
        non-Federal sources.

    (d) Energy and Bicycling Research Study.--
            (1) In general.--
        Not <<NOTE: Deadline. Contracts. Reports.>> later than 2 years 
        after the date of enactment of this Act, the Secretary shall 
        enter into a contract with the National Academy of Sciences for, 
        and the National Academy of Sciences shall conduct and submit to 
        Congress a report on, a study on the feasibility of converting 
        motor vehicle trips to bicycle trips.
            (2) Components.--The study shall--
                    (A) document the results or progress of the pilot 
                projects under subsection (c);
                    (B) determine the type and duration of motor vehicle 
                trips that people in the United States may feasibly make 
                by bicycle, taking into consideration factors such as--
                          (i) weather;
                          (ii) land use and traffic patterns;
                          (iii) the carrying capacity of bicycles; and
                          (iv) bicycle infrastructure;
                    (C) determine any energy savings that would result 
                from the conversion of motor vehicle trips to bicycle 
                trips;
                    (D) include a cost-benefit analysis of bicycle 
                infrastructure investments; and
                    (E) include a description of any factors that would 
                encourage more motor vehicle trips to be replaced with 
                bicycle trips.

    (e) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary to carry out this section $6,200,000, to 
remain available until expended, of which--
            (1) $5,150,000 shall be used to carry out pilot projects 
        described in subsection (c);
            (2) $300,000 shall be used by the Secretary to coordinate, 
        publicize, and disseminate the results of the program; and
            (3) $750,000 shall be used to carry out subsection (d).

SEC. 756. <<NOTE: 42 USC 16104.>> REDUCTION OF ENGINE IDLING.

    (a) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Advanced truck stop electrification system.--The term 
        ``advanced truck stop electrification system'' means a 
        stationary system that delivers heat, air conditioning, 
        electricity, or communications, and is capable of providing 
        verifiable and auditable evidence of use of those services, to a 
        heavy-duty vehicle and any occupants of the heavy-duty vehicle 
        with or

[[Page 119 STAT. 830]]

        without relying on components mounted onboard the heavy-duty 
        vehicle for delivery of those services.
            (3) Auxiliary power unit.--The term ``auxiliary power unit'' 
        means an integrated system that--
                    (A) provides heat, air conditioning, engine warming, 
                or electricity to components on a heavy-duty vehicle; 
                and
                    (B) is certified by the Administrator under part 89 
                of title 40, Code of Federal Regulations (or any 
                successor regulation), as meeting applicable emission 
                standards.
            (4) Heavy-duty vehicle.--The term ``heavy-duty vehicle'' 
        means a vehicle that--
                    (A) has a gross vehicle weight rating greater than 
                8,500 pounds; and
                    (B) is powered by a diesel engine.
            (5) Idle reduction technology.--The term ``idle reduction 
        technology'' means an advanced truck stop electrification 
        system, auxiliary power unit, or other technology that--
                    (A) is used to reduce long-duration idling; and
                    (B) allows for the main drive engine or auxiliary 
                refrigeration engine to be shut down.
            (6) Energy conservation technology.--the term ``energy 
        conservation technology'' means any device, system of devices, 
        or equipment that improves the fuel economy.
            (7) Long-duration idling.--
                    (A) In general.--The term ``long-duration idling'' 
                means the operation of a main drive engine or auxiliary 
                refrigeration engine, for a period greater than 15 
                consecutive minutes, at a time at which the main drive 
                engine is not engaged in gear.
                    (B) Exclusions.--The term ``long-duration idling'' 
                does not include the operation of a main drive engine or 
                auxiliary refrigeration engine during a routine stoppage 
                associated with traffic movement or congestion.

    (b) Idle Reduction Technology Benefits, Programs, and Studies.--
            (1) In general.--Not <<NOTE: Deadline.>> later than 90 days 
        after the date of enactment of this Act, the Administrator 
        shall--
                    (A)(i) commence a review of the mobile source air 
                emission models of the Environmental Protection Agency 
                used under the Clean Air Act (42 U.S.C. 7401 et seq.) to 
                determine whether the models accurately reflect the 
                emissions resulting from long-duration idling of heavy-
                duty vehicles and other vehicles and engines; and
                    (ii) update those models as the Administrator 
                determines to be appropriate; and
                    (B)(i) commence a review of the emission reductions 
                achieved by the use of idle reduction technology; and
                    (ii) complete such revisions of the regulations and 
                guidance of the Environmental Protection Agency as the 
                Administrator determines to be appropriate.
            (2) Deadline for completion.--Not later than 180 days after 
        the date of enactment of this Act, the Administrator shall--
                    (A) complete the reviews under subparagraphs (A)(i) 
                and (B)(i) of paragraph (1); and
                    (B) prepare and make publicly available one or more 
                reports on the results of the reviews.

[[Page 119 STAT. 831]]

            (3) Discretionary inclusions.--The reviews under 
        subparagraphs (A)(i) and (B)(i) of paragraph (1) and the reports 
        under paragraph (2)(B) may address the potential fuel savings 
        resulting from use of idle reduction technology.
            (4) Idle reduction and energy conservation deployment 
        program.--
                    (A) Establishment.--
                          (i) In general.--Not <<NOTE: Deadline.>> later 
                      than 90 days after the date of enactment of this 
                      Act, the Administrator, in consultation with the 
                      Secretary of Transportation shall, through the 
                      Environmental Protection Agency's SmartWay 
                      Transport Partnership, establish a program to 
                      support deployment of idle reduction and energy 
                      conservation technologies.
                          (ii) Priority.--The Administrator shall give 
                      priority to the deployment of idle reduction and 
                      energy conservation technologies based on the 
                      costs and beneficial effects on air quality and 
                      ability to lessen the emission of criteria air 
                      pollutants.
                    (B) Funding.--
                          (i) Authorization of appropriations.--There 
                      are authorized to be appropriated to the 
                      Administrator to carry out subparagraph (A) for 
                      the purpose of reducing extended idling from 
                      heavy-duty vehicles $19,500,000 for fiscal year 
                      2006, $30,000,000 for fiscal year 2007, and 
                      $45,000,000 for fiscal year 2008.
                          (ii) Locomotives.--There are authorized to be 
                      appropriated to the administrator to carry out 
                      subparagraph (A) for the purpose of reducing 
                      extended idling from locomotives $10,000,000 for 
                      fiscal year 2006, $15,000,000 for fiscal year 
                      2007, and $20,000,000 for fiscal year 2008.
                          (iii) Cost sharing.--Subject to clause (iv), 
                      the Administrator shall require at least 50 
                      percent of the costs directly and specifically 
                      related to any project under this section to be 
                      provided from non-Federal sources.
                          (iv) Necessary and appropriate reductions.--
                      The Administrator may reduce the non-Federal 
                      requirement under clause (iii) if the 
                      Administrator determines that the reduction is 
                      necessary and appropriate to meet the objectives 
                      of this section.
            (5) Idling location study.--
                    (A) In general.--Not <<NOTE: Deadline.>> later than 
                90 days after the date of enactment of this Act, the 
                Administrator, in consultation with the Secretary of 
                Transportation, shall commence a study to analyze all 
                locations at which heavy-duty vehicles stop for long-
                duration idling, including--
                          (i) truck stops;
                          (ii) rest areas;
                          (iii) border crossings;
                          (iv) ports;
                          (v) transfer facilities; and
                          (vi) private terminals.
                    (B) Deadline for completion.--Not later than 180 
                days after the date of enactment of this Act, the 
                Administrator shall--

[[Page 119 STAT. 832]]

                          (i) complete the study under subparagraph (A); 
                      and
                          (ii) prepare and make publicly available one 
                      or more reports of the results of the study.

    (c) Vehicle Weight Exemption.--Section 127(a) of title 23, United 
States Code, is amended--
            (1) by designating the first through eleventh sentences as 
        paragraphs (1) through (11), respectively; and
            (2) by adding at the end the following:
            ``(12) Heavy duty vehicles.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), in order to promote reduction of fuel use and 
                emissions because of engine idling, the maximum gross 
                vehicle weight limit and the axle weight limit for any 
                heavy-duty vehicle equipped with an idle reduction 
                technology shall be increased by a quantity necessary to 
                compensate for the additional weight of the idle 
                reduction system.
                    ``(B) Maximum weight increase.--The weight increase 
                under subparagraph (A) shall be not greater than 400 
                pounds.
                    ``(C) Proof.--On request by a regulatory agency or 
                law enforcement agency, the vehicle operator shall 
                provide proof (through demonstration or certification) 
                that--
                          ``(i) the idle reduction technology is fully 
                      functional at all times; and
                          ``(ii) the 400-pound gross weight increase is 
                      not used for any purpose other than the use of 
                      idle reduction technology described in 
                      subparagraph (A).''.

    (d) Report.--Not later than 60 days after the date on which funds 
are initially awarded under this section, and on an annual basis 
thereafter, the Administrator shall submit to Congress a report 
containing--
            (1) an identification of the grant recipients, a description 
        of the projects to be funded and the amount of funding provided; 
        and
            (2) an identification of all other applicants that submitted 
        applications under the program.

SEC. 757. <<NOTE: 42 USC 16105.>> BIODIESEL ENGINE TESTING PROGRAM.

    (a) In General.--Not <<NOTE: Deadline.>> later that 180 days after 
the date of enactment of this Act, the Secretary shall initiate a 
partnership with diesel engine, diesel fuel injection system, and diesel 
vehicle manufacturers and diesel and biodiesel fuel providers, to 
include biodiesel testing in advanced diesel engine and fuel system 
technology.

    (b) Scope.--The program shall provide for testing to determine the 
impact of biodiesel from different sources on current and future 
emission control technologies, with emphasis on--
            (1) the impact of biodiesel on emissions warranty, in-use 
        liability, and antitampering provisions;
            (2) the impact of long-term use of biodiesel on engine 
        operations;
            (3) the options for optimizing these technologies for both 
        emissions and performance when switching between biodiesel and 
        diesel fuel; and
            (4) the impact of using biodiesel in these fueling systems 
        and engines when used as a blend with 2006 Environmental

[[Page 119 STAT. 833]]

        Protection Agency-mandated diesel fuel containing a maximum of 
        15-parts-per-million sulfur content.

    (c) Report.--Not later than 2 years after the date of enactment of 
this Act, the Secretary shall provide an interim report to Congress on 
the findings of the program, including a comprehensive analysis of 
impacts from biodiesel on engine operation for both existing and 
expected future diesel technologies, and recommendations for ensuring 
optimal emissions reductions and engine performance with biodiesel.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated $5,000,000 for each of fiscal years 2006 through 2010 to 
carry out this section.
    (e) Definition.--For purposes of this section, the term 
``biodiesel'' means a diesel fuel substitute produced from nonpetroleum 
renewable resources that meets the registration requirements for fuels 
and fuel additives established by the Environmental Protection Agency 
under section 211 of the Clean Air Act (42 U.S.C. 7545) and that meets 
the American Society for Testing and Materials D6751-02a Standard 
Specification for Biodiesel Fuel (B100) Blend Stock for Distillate 
Fuels.

SEC. 758. <<NOTE: 42 USC 16106.>> ULTRA-EFFICIENT ENGINE TECHNOLOGY FOR 
            AIRCRAFT.

    (a) Ultra-Efficient <<NOTE: Contracts.>> Engine Technology 
Partnership.--The Secretary shall enter into a cooperative agreement 
with the National Aeronautics and Space Administration for the 
development of ultra-efficient engine technology for aircraft.

    (b) Performance Objective.--The Secretary shall establish the 
following performance objectives for the program set forth in subsection 
(a):
            (1) A fuel efficiency increase of at least 10 percent.
            (2) A reduction in the impact of landing and takeoff 
        nitrogen oxides emissions on local air quality of 70 percent.
            (3) Exploring advanced concepts, alternate propulsion, and 
        power configurations, including hybrid fuel cell powered 
        systems.
            (4) Exploring the use of alternate fuel in conventional or 
        nonconventional turbine-based systems.

    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for carrying out this section $50,000,000 
for each of the fiscal years 2006, 2007, 2008, 2009, and 2010.

SEC. 759. FUEL ECONOMY INCENTIVE REQUIREMENTS.

    Section 32905 of title 49, United States Code, is amended by adding 
the following new subsection at the end thereof:
    ``(h) Fuel Economy Incentive Requirements.--In order for any model 
of dual fueled automobile to be eligible to receive the fuel economy 
incentives included in section 32906(a) and (b), a label shall be 
attached to the fuel compartment of each dual fueled automobile of that 
model, notifying that the vehicle can be operated on an alternative fuel 
and on gasoline or diesel, with the form of alternative fuel stated on 
the notice. <<NOTE: Applicability. Effective date.>> This requirement 
applies to dual fueled automobiles manufactured on or after September 1, 
2006.''.

[[Page 119 STAT. 834]]

                    Subtitle E--Automobile Efficiency

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

    In addition to any other funds authorized by law, there are 
authorized to be appropriated to the National Highway Traffic Safety 
Administration to carry out its obligations with respect to average fuel 
economy standards $3,500,000 for each of the fiscal years 2006 through 
2010.

SEC. 772. EXTENSION OF MAXIMUM FUEL ECONOMY INCREASE FOR ALTERNATIVE 
            FUELED VEHICLES.

    (a) Manufacturing Incentives.--Section 32905 of title 49, United 
States Code, is amended--
            (1) in each of subsections (b) and (d), by striking ``1993-
        2004'' and inserting ``1993-2010'';
            (2) in subsection (f), by striking ``2001'' and inserting 
        ``2007''; and
            (3) in subsection (f)(1), by striking ``2004'' and inserting 
        ``2010''.

    (b) Maximum Fuel Economy Increase.--Subsection (a)(1) of section 
32906 of title 49, United States Code, is amended--
            (1) in subparagraph (A), by striking ``the model years 1993-
        2004'' and inserting ``model years 1993-2010''; and
            (2) in subparagraph (B), by striking ``the model years 2005-
        2008'' and inserting ``model years 2011-2014''.

SEC. 773. STUDY OF FEASIBILITY AND EFFECTS OF REDUCING USE OF FUEL FOR 
            AUTOMOBILES.

    (a) In General.--Not <<NOTE: Deadline.>> later than 30 days after 
the date of the enactment of this Act, the Administrator of the National 
Highway Traffic Safety Administration shall initiate a study of the 
feasibility and effects of reducing by model year 2014, by a significant 
percentage, the amount of fuel consumed by automobiles.

    (b) Subjects of Study.--The study under this section shall include--
            (1) examination of, and recommendation of alternatives to, 
        the policy under current Federal law of establishing average 
        fuel economy standards for automobiles and requiring each 
        automobile manufacturer to comply with average fuel economy 
        standards that apply to the automobiles it manufactures;
            (2) examination of how automobile manufacturers could 
        contribute toward achieving the reduction referred to in 
        subsection (a);
            (3) examination of the potential of fuel cell technology in 
        motor vehicles in order to determine the extent to which such 
        technology may contribute to achieving the reduction referred to 
        in subsection (a); and
            (4) examination of the effects of the reduction referred to 
        in subsection (a) on--
                    (A) gasoline supplies;
                    (B) the automobile industry, including sales of 
                automobiles manufactured in the United States;
                    (C) motor vehicle safety; and
                    (D) air quality.

[[Page 119 STAT. 835]]

    (c) Report.--The Administrator shall submit to Congress a report on 
the findings, conclusion, and recommendations of the study under this 
section by not later than 1 year after the date of the enactment of this 
Act.

SEC. 774. UPDATE TESTING PROCEDURES.

    The Administrator of the Environmental Protection Agency shall 
update or revise the adjustment factors in sections 600.209-85 and 
600.209-95, of the Code of Federal Regulations, CFR Part 600 (1995) Fuel 
Economy Regulations for 1977 and Later Model Year Automobiles to take 
into consideration higher speed limits, faster acceleration rates, 
variations in temperature, use of air conditioning, shorter city test 
cycle lengths, current reference fuels, and the use of other fuel 
depleting features.

                Subtitle F--Federal and State Procurement

SEC. 781. <<NOTE: 42 USC 16121.>> DEFINITIONS.

    In this subtitle:
            (1) Fuel cell.--The term ``fuel cell'' means a device that 
        directly converts the chemical energy of a fuel and an oxidant 
        into electricity by electrochemical processes occurring at 
        separate electrodes in the device.
            (2) Light-duty or heavy-duty vehicle fleet.--The term 
        ``light-duty or heavy-duty vehicle fleet'' does not include any 
        vehicle designed or procured for combat or combat-related 
        missions.
            (3) Stationary; portable.--The terms ``stationary'' and 
        ``portable'', when used in reference to a fuel cell, include--
                    (A) continuous electric power; and
                    (B) backup electric power.
            (4) Task force.--The term ``Task Force'' means the Hydrogen 
        and Fuel Cell Technical Task Force established under section 806 
        of this Act.
            (5) Technical advisory committee.--The term ``Technical 
        Advisory Committee'' means the independent Technical Advisory 
        Committee selected under section 807 of this Act.

SEC. 782. <<NOTE: 42 USC 16122.>> FEDERAL AND STATE PROCUREMENT OF FUEL 
            CELL VEHICLES AND HYDROGEN ENERGY SYSTEMS.

    (a) Purposes.--The purposes of this section are--
            (1) to stimulate acceptance by the market of fuel cell 
        vehicles and hydrogen energy systems;
            (2) to support development of technologies relating to fuel 
        cell vehicles, public refueling stations, and hydrogen energy 
        systems; and
            (3) to require the Federal government, which is the largest 
        single user of energy in the United States, to adopt those 
        technologies as soon as practicable after the technologies are 
        developed, in conjunction with private industry partners.

    (b) Federal Leases and Purchases.--
            (1) Requirement.--
                    (A) In general.--Not <<NOTE: Deadline.>> later than 
                January 1, 2010, the head of any Federal agency that 
                uses a light-duty or heavy-duty vehicle fleet shall 
                lease or purchase fuel cell vehicles

[[Page 119 STAT. 836]]

                and hydrogen energy systems to meet any applicable 
                energy savings goal described in subsection (c).
                    (B) Learning demonstration vehicles.--The Secretary 
                may lease or purchase appropriate vehicles developed 
                under subsections (a)(10) and (b)(1)(A) of section 808 
                to meet the requirement in subparagraph (A).
            (2) Costs of leases and purchases.--
                    (A) In general.--The Secretary, in cooperation with 
                the Task Force and the Technical Advisory Committee, 
                shall pay to Federal agencies (or share the cost under 
                interagency agreements) the difference in cost between--
                          (i) the cost to the agencies of leasing or 
                      purchasing fuel cell vehicles and hydrogen energy 
                      systems under paragraph (1); and
                          (ii) the cost to the agencies of a feasible 
                      alternative to leasing or purchasing fuel cell 
                      vehicles and hydrogen energy systems, as 
                      determined by the Secretary.
                    (B) Competitive costs and management structures.--In 
                carrying out subparagraph (A), the Secretary, in 
                consultation with the agency, may use the General 
                Services Administration or any commercial vendor to 
                ensure--
                          (i) a cost-effective purchase of a fuel cell 
                      vehicle or hydrogen energy system; or
                          (ii) a cost-effective management structure of 
                      the lease of a fuel cell vehicle or hydrogen 
                      energy system.
            (3) Exception.--
                    (A) In general.--If the Secretary determines that 
                the head of an agency described in paragraph (1) cannot 
                find an appropriately efficient and reliable fuel cell 
                vehicle or hydrogen energy system in accordance with 
                paragraph (1), that agency shall be excepted from 
                compliance with paragraph (1).
                    (B) Consideration.--In making a determination under 
                subparagraph (A), the Secretary shall consider--
                          (i) the needs of the agency; and
                          (ii) an evaluation performed by--
                                    (I) the Task Force; or
                                    (II) the Technical Advisory 
                                Committee.

    (c) Energy Savings Goals.--
            (1) In <<NOTE: Deadlines.>> general.--
                    (A) Regulations.--Not later than December 31, 2006, 
                the Secretary shall--
                          (i) in cooperation with the Task Force, 
                      promulgate regulations for the period of 2008 
                      through 2010 that extend and augment energy 
                      savings goals for each Federal agency, in 
                      accordance with any Executive order issued after 
                      March 2000; and
                          (ii) promulgate regulations to expand the 
                      minimum Federal fleet requirement and credit 
                      allowances for fuel cell vehicle systems under 
                      section 303 of the Energy Policy Act of 1992 (42 
                      U.S.C. 13212).
                    (B) Review, evaluation, and new regulations.--Not 
                later than December 31, 2010, the Secretary shall--
                          (i) review the regulations promulgated under 
                      subparagraph (A);
                          (ii) evaluate any progress made toward 
                      achieving energy savings by Federal agencies; and

[[Page 119 STAT. 837]]

                          (iii) promulgate new regulations for the 
                      period of 2011 through 2015 to achieve additional 
                      energy savings by Federal agencies relating to 
                      technical and cost-performance standards.
            (2) Offsetting energy savings goals.--An agency that leases 
        or purchases a fuel cell vehicle or hydrogen energy system in 
        accordance with subsection (b)(1) may use that lease or purchase 
        to count toward an energy savings goal of the agency.

    (d) Cooperative Program With State Agencies.--
            (1) In general.--The Secretary may establish a cooperative 
        program with State agencies managing motor vehicle fleets to 
        encourage purchase of fuel cell vehicles by the agencies.
            (2) Incentives.--In carrying out the cooperative program, 
        the Secretary may offer incentive payments to a State agency to 
        assist with the cost of planning, differential purchases, and 
        administration.

    (e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section--
            (1) $15,000,000 for fiscal year 2008;
            (2) $25,000,000 for fiscal year 2009;
            (3) $65,000,000 for fiscal year 2010; and
            (4) such sums as are necessary for each of fiscal years 2011 
        through 2015.

SEC. 783. <<NOTE: 42 USC 16123.>> FEDERAL PROCUREMENT OF STATIONARY, 
            PORTABLE, AND MICRO FUEL CELLS.

    (a) Purposes.--The purposes of this section are--
            (1) to stimulate acceptance by the market of stationary, 
        portable, and micro fuel cells; and
            (2) to support development of technologies relating to 
        stationary, portable, and micro fuel cells.

    (b) Federal Leases and Purchases.--
            (1) In general.--Not <<NOTE: Deadline.>> later than January 
        1, 2006, the head of any Federal agency that uses electrical 
        power from stationary, portable, or microportable devices shall 
        lease or purchase a stationary, portable, or micro fuel cell to 
        meet any applicable energy savings goal described in subsection 
        (c).
            (2) Costs of leases and purchases.--
                    (A) In general.--The Secretary, in cooperation with 
                the Task Force and the Technical Advisory Committee, 
                shall pay the cost to Federal agencies (or share the 
                cost under interagency agreements) of leasing or 
                purchasing stationary, portable, and micro fuel cells 
                under paragraph (1).
                    (B) Competitive costs and management structures.--In 
                carrying out subparagraph (A), the Secretary, in 
                consultation with the agency, may use the General 
                Services Administration or any commercial vendor to 
                ensure--
                          (i) a cost-effective purchase of a stationary, 
                      portable, or micro fuel cell; or
                          (ii) a cost-effective management structure of 
                      the lease of a stationary, portable, or micro fuel 
                      cell.
            (3) Exception.--
                    (A) In general.--If the Secretary determines that 
                the head of an agency described in paragraph (1) cannot 
                find an appropriately efficient and reliable stationary, 
                portable,

[[Page 119 STAT. 838]]

                or micro fuel cell in accordance with paragraph (1), 
                that agency shall be excepted from compliance with 
                paragraph (1).
                    (B) Consideration.--In making a determination under 
                subparagraph (A), the Secretary shall consider--
                          (i) the needs of the agency; and
                          (ii) an evaluation performed by--
                                    (I) the Task Force; or
                                    (II) the Technical Advisory 
                                Committee of the Task Force.

    (c) Energy Savings Goals.--An agency that leases or purchases a 
stationary, portable, or micro fuel cell in accordance with subsection 
(b)(1) may use that lease or purchase to count toward an energy savings 
goal described in section 808 of this Act that is applicable to the 
agency.
    (d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section--
            (1) $20,000,000 for fiscal year 2006;
            (2) $50,000,000 for fiscal year 2007;
            (3) $75,000,000 for fiscal year 2008;
            (4) $100,000,000 for fiscal year 2009;
            (5) $100,000,000 for fiscal year 2010; and
            (6) such sums as are necessary for each of fiscal years 2011 
        through 2015.

                 Subtitle G--Diesel Emissions Reduction

SEC. 791. <<NOTE: 42 USC 16131.>> DEFINITIONS.

    In this subtitle:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Certified engine configuration.--The term ``certified 
        engine configuration'' means a new, rebuilt, or remanufactured 
        engine configuration--
                    (A) that has been certified or verified by--
                          (i) the Administrator; or
                          (ii) the California Air Resources Board;
                    (B) that meets or is rebuilt or remanufactured to a 
                more stringent set of engine emission standards, as 
                determined by the Administrator; and
                    (C) in the case of a certified engine configuration 
                involving the replacement of an existing engine or 
                vehicle, an engine configuration that replaced an engine 
                that was--
                          (i) removed from the vehicle; and
                          (ii) returned to the supplier for 
                      remanufacturing to a more stringent set of engine 
                      emissions standards or for scrappage.
            (3) Eligible entity.--The term ``eligible entity'' means--
                    (A) a regional, State, local, or tribal agency or 
                port authority with jurisdiction over transportation or 
                air quality; and
                    (B) a nonprofit organization or institution that--
                          (i) represents or provides pollution reduction 
                      or educational services to persons or 
                      organizations that own or operate diesel fleets; 
                      or

[[Page 119 STAT. 839]]

                          (ii) has, as its principal purpose, the 
                      promotion of transportation or air quality.
            (4) Emerging technology.--The term ``emerging technology'' 
        means a technology that is not certified or verified by the 
        Administrator or the California Air Resources Board but for 
        which an approvable application and test plan has been submitted 
        for verification to the Administrator or the California Air 
        Resources Board.
            (5) Fleet.--The term ``fleet'' means one or more diesel 
        vehicles or mobile or stationary diesel engines.
            (6) Heavy-duty truck.--The term ``heavy-duty truck'' has the 
        meaning given the term ``heavy duty vehicle'' in section 202 of 
        the Clean Air Act (42 U.S.C. 7521).
            (7) Medium-duty truck.--The term ``medium-duty truck'' has 
        such meaning as shall be determined by the Administrator, by 
        regulation.
            (8) Verified technology.--The term ``verified technology'' 
        means a pollution control technology, including a retrofit 
        technology, advanced truckstop electrification system, or 
        auxiliary power unit, that has been verified by--
                    (A) the Administrator; or
                    (B) the California Air Resources Board.

SEC. 792. <<NOTE: 42 USC 16132.>> NATIONAL GRANT AND LOAN PROGRAMS.

    (a) In General.--The Administrator shall use 70 percent of the funds 
made available to carry out this subtitle for each fiscal year to 
provide grants and low-cost revolving loans, as determined by the 
Administrator, on a competitive basis, to eligible entities to achieve 
significant reductions in diesel emissions in terms of--
            (1) tons of pollution produced; and
            (2) diesel emissions exposure, particularly from fleets 
        operating in areas designated by the Administrator as poor air 
        quality areas.

    (b) Distribution.--
            (1) In general.--The Administrator shall distribute funds 
        made available for a fiscal year under this subtitle in 
        accordance with this section.
            (2) Fleets.--The Administrator shall provide not less than 
        50 percent of funds available for a fiscal year under this 
        section to eligible entities for the benefit of public fleets.
            (3) Engine configurations and technologies.--
                    (A) Certified engine configurations and verified 
                technologies.--The Administrator shall provide not less 
                than 90 percent of funds available for a fiscal year 
                under this section to eligible entities for projects 
                using--
                          (i) a certified engine configuration; or
                          (ii) a verified technology.
                    (B) Emerging technologies.--
                          (i) In general.--The Administrator shall 
                      provide not more than 10 percent of funds 
                      available for a fiscal year under this section to 
                      eligible entities for the development and 
                      commercialization of emerging technologies.
                          (ii) Application and test plan.--To receive 
                      funds under clause (i), a manufacturer, in 
                      consultation with an eligible entity, shall submit 
                      for verification to the Administrator or the 
                      California Air Resources Board

[[Page 119 STAT. 840]]

                      a test plan for the emerging technology, together 
                      with the application under subsection (c).

    (c) Applications.--
            (1) In general.--To receive a grant or loan under this 
        section, an eligible entity shall submit to the Administrator an 
        application at a time, in a manner, and including such 
        information as the Administrator may require.
            (2) Inclusions.--An application under this subsection shall 
        include--
                    (A) a description of the air quality of the area 
                served by the eligible entity;
                    (B) the quantity of air pollution produced by the 
                diesel fleets in the area served by the eligible entity;
                    (C) a description of the project proposed by the 
                eligible entity, including--
                          (i) any certified engine configuration, 
                      verified technology, or emerging technology to be 
                      used or funded by the eligible entity; and
                          (ii) the means by which the project will 
                      achieve a significant reduction in diesel 
                      emissions;
                    (D) an evaluation (using methodology approved by the 
                Administrator or the National Academy of Sciences) of 
                the quantifiable and unquantifiable benefits of the 
                emissions reductions of the proposed project;
                    (E) an estimate of the cost of the proposed project;
                    (F) a description of the age and expected lifetime 
                control of the equipment used or funded by the eligible 
                entity;
                    (G) a description of the diesel fuel available in 
                the areas to be served by the eligible entity, including 
                the sulfur content of the fuel; and
                    (H) provisions for the monitoring and verification 
                of the project.
            (3) Priority.--In providing a grant or loan under this 
        section, the Administrator shall give priority to proposed 
        projects that, as determined by the Administrator--
                    (A) maximize public health benefits;
                    (B) are the most cost-effective;
                    (C) serve areas--
                          (i) with the highest population density;
                          (ii) that are poor air quality areas, 
                      including areas identified by the Administrator 
                      as--
                                    (I) in nonattainment or maintenance 
                                of national ambient air quality 
                                standards for a criteria pollutant;
                                    (II) Federal Class I areas; or
                                    (III) areas with toxic air pollutant 
                                concerns;
                          (iii) that receive a disproportionate quantity 
                      of air pollution from a diesel fleets, including 
                      truckstops, ports, rail yards, terminals, and 
                      distribution centers; or
                          (iv) that use a community-based 
                      multistakeholder collaborative process to reduce 
                      toxic emissions;
                    (D) include a certified engine configuration, 
                verified technology, or emerging technology that has a 
                long expected useful life;

[[Page 119 STAT. 841]]

                    (E) will maximize the useful life of any certified 
                engine configuration, verified technology, or emerging 
                technology used or funded by the eligible entity;
                    (F) conserve diesel fuel; and
                    (G) use diesel fuel with a sulfur content of less 
                than or equal to 15 parts per million, as the 
                Administrator determines to be appropriate.

    (d) Use of Funds.--
            (1) In general.--An eligible entity may use a grant or loan 
        provided under this section to fund the costs of--
                    (A) a retrofit technology (including any incremental 
                costs of a repowered or new diesel engine) that 
                significantly reduces emissions through development and 
                implementation of a certified engine configuration, 
                verified technology, or emerging technology for--
                          (i) a bus;
                          (ii) a medium-duty truck or a heavy-duty 
                      truck;
                          (iii) a marine engine;
                          (iv) a locomotive; or
                          (v) a nonroad engine or vehicle used in--
                                    (I) construction;
                                    (II) handling of cargo (including at 
                                a port or airport);
                                    (III) agriculture;
                                    (IV) mining; or
                                    (V) energy production; or
                    (B) programs or projects to reduce long-duration 
                idling using verified technology involving a vehicle or 
                equipment described in subparagraph (A).
            (2) Regulatory programs.--
                    (A) In general.--Notwithstanding paragraph (1), no 
                grant or loan provided under this section shall be used 
                to fund the costs of emissions reductions that are 
                mandated under Federal, State or local law.
                    (B) Mandated.--For purposes of subparagraph (A), 
                voluntary or elective emission reduction measures shall 
                not be considered ``mandated'', regardless of whether 
                the reductions are included in the State implementation 
                plan of a State.

SEC. 793. <<NOTE: 42 USC 16133.>> STATE GRANT AND LOAN PROGRAMS.

    (a) In General.--Subject to the availability of adequate 
appropriations, the Administrator shall use 30 percent of the funds made 
available for a fiscal year under this subtitle to support grant and 
loan programs administered by States that are designed to achieve 
significant reductions in diesel emissions.
    (b) Applications.--The Administrator shall--
            (1) <<NOTE: Guidelines.>> provide to States guidance for use 
        in applying for grant or loan funds under this section, 
        including information regarding--
                    (A) the process and forms for applications;
                    (B) permissible uses of funds received; and
                    (C) the cost-effectiveness of various emission 
                reduction technologies eligible to be carried out using 
                funds provided under this section; and
            (2) <<NOTE: Procedures.>> establish, for applications 
        described in paragraph (1)--

[[Page 119 STAT. 842]]

                    (A) <<NOTE: Deadline.>> an annual deadline for 
                submission of the applications;
                    (B) a process by which the Administrator shall 
                approve or disapprove each application; and
                    (C) a streamlined process by which a State may renew 
                an application described in paragraph (1) for subsequent 
                fiscal years.

    (c) Allocation of Funds.--
            (1) In general.--For each fiscal year, the Administrator 
        shall allocate among States for which applications are approved 
        by the Administrator under subsection (b)(2)(B) funds made 
        available to carry out this section for the fiscal year.
            (2) Allocation.--Using not more than 20 percent of the funds 
        made available to carry out this subtitle for a fiscal year, the 
        Administrator shall provide to each State described in paragraph 
        (1) for the fiscal year an allocation of funds that is equal 
        to--
                    (A) if each of the 50 States qualifies for an 
                allocation, an amount equal to 2 percent of the funds 
                made available to carry out this section; or
                    (B) if fewer than 50 States qualifies for an 
                allocation, an amount equal to the amount described in 
                subparagraph (A), plus an additional amount equal to the 
                product obtained by multiplying--
                          (i) the proportion that--
                                    (I) the population of the State; 
                                bears to
                                    (II) the population of all States 
                                described in paragraph (1); by
                          (ii) the amount of funds remaining after each 
                      State described in paragraph (1) receives the 2-
                      percent allocation under this paragraph.
            (3) State matching incentive.--
                    (A) In general.--If a State agrees to match the 
                allocation provided to the State under paragraph (2) for 
                a fiscal year, the Administrator shall provide to the 
                State for the fiscal year an additional amount equal to 
                50 percent of the allocation of the State under 
                paragraph (2).
                    (B) Requirements.--A State--
                          (i) may not use funds received under this 
                      subtitle to pay a matching share required under 
                      this subsection; and
                          (ii) shall not be required to provide a 
                      matching share for any additional amount received 
                      under subparagraph (A).
            (4) Unclaimed funds.--Any funds that are not claimed by a 
        State for a fiscal year under this subsection shall be used to 
        carry out section 792.

    (d) Administration.--
            (1) In general.--Subject to paragraphs (2) and (3) and, to 
        the extent practicable, the priority areas listed in section 
        792(c)(3), a State shall use any funds provided under this 
        section to develop and implement such grant and low-cost 
        revolving loan programs in the State as are appropriate to meet 
        State needs and goals relating to the reduction of diesel 
        emissions.

[[Page 119 STAT. 843]]

            (2) Apportionment of funds.--The Governor of a State that 
        receives funding under this section may determine the portion of 
        funds to be provided as grants or loans.
            (3) Use of funds.--A grant or loan provided under this 
        section may be used for a project relating to--
                    (A) a certified engine configuration; or
                    (B) a verified technology.

SEC. 794. <<NOTE: 42 USC 16134.>> EVALUATION AND REPORT.

    (a) In General.--Not later than 1 year after the date on which funds 
are made available under this subtitle, and biennially thereafter, the 
Administrator shall submit to Congress a report evaluating the 
implementation of the programs under this subtitle.
    (b) Inclusions.--The report shall include a description of--
            (1) the total number of grant applications received;
            (2) each grant or loan made under this subtitle, including 
        the amount of the grant or loan;
            (3) each project for which a grant or loan is provided under 
        this subtitle, including the criteria used to select the grant 
        or loan recipients;
            (4) the actual and estimated air quality and diesel fuel 
        conservation benefits, cost-effectiveness, and cost-benefits of 
        the grant and loan programs under this subtitle;
            (5) the problems encountered by projects for which a grant 
        or loan is provided under this subtitle; and
            (6) any other information the Administrator considers to be 
        appropriate.

SEC. 795. <<NOTE: 42 USC 16135.>> OUTREACH AND INCENTIVES.

    (a) Definition of Eligible Technology.--In this section, the term 
``eligible technology'' means--
            (1) a verified technology; or
            (2) an emerging technology.

    (b) Technology Transfer Program.--
            (1) In general.--The Administrator shall establish a program 
        under which the Administrator--
                    (A) informs stakeholders of the benefits of eligible 
                technologies; and
                    (B) develops nonfinancial incentives to promote the 
                use of eligible technologies.
            (2) Eligible stakeholders.--Eligible stakeholders under this 
        section include--
                    (A) equipment owners and operators;
                    (B) emission and pollution control technology 
                manufacturers;
                    (C) engine and equipment manufacturers;
                    (D) State and local officials responsible for air 
                quality management;
                    (E) community organizations; and
                    (F) public health, educational, and environmental 
                organizations.

    (c) State Implementation Plans.--
The <<NOTE: Guidelines.>> Administrator shall develop appropriate 
guidance to provide credit to a State for emission reductions in the 
State created by the use of eligible technologies through a State 
implementation plan under section 110 of the Clean Air Act (42 U.S.C. 
7410).

    (d) International Markets.--The Administrator, in coordination with 
the Department of Commerce and industry stakeholders,

[[Page 119 STAT. 844]]

shall inform foreign countries with air quality problems of the 
potential of technology developed or used in the United States to 
provide emission reductions in those countries.

SEC. 796. <<NOTE: 42 USC 16136.>> EFFECT OF SUBTITLE.

    Nothing in this subtitle affects any authority under the Clean Air 
Act (42 U.S.C. 7401 et seq.) in existence on the day before the date of 
enactment of this Act.

SEC. 797. <<NOTE: 42 USC 16137.>> AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to carry out this subtitle 
$200,000,000 for each of fiscal years 2007 through 2011, to remain 
available until expended.

TITLE <<NOTE: Spark M. Matsunaga Hydrogen Act of 2005.>> VIII--HYDROGEN

SEC. 801. <<NOTE: 42 USC 15801 note.>> HYDROGEN AND FUEL CELL PROGRAM.

    This title may be cited as the ``Spark M. Matsunaga Hydrogen Act of 
2005''.

SEC. 802. <<NOTE: 42 USC 16151.>> PURPOSES.

    The purposes of this title are--
            (1) to enable and promote comprehensive development, 
        demonstration, and commercialization of hydrogen and fuel cell 
        technology in partnership with industry;
            (2) to make critical public investments in building strong 
        links to private industry, institutions of higher education, 
        National Laboratories, and research institutions to expand 
        innovation and industrial growth;
            (3) to build a mature hydrogen economy that creates fuel 
        diversity in the massive transportation sector of the United 
        States;
            (4) to sharply decrease the dependency of the United States 
        on imported oil, eliminate most emissions from the 
        transportation sector, and greatly enhance our energy security; 
        and
            (5) to create, strengthen, and protect a sustainable 
        national energy economy.

SEC. 803. <<NOTE: 42 USC 16152.>> DEFINITIONS.

    In this title:
            (1) Fuel cell.--The term ``fuel cell'' means a device that 
        directly converts the chemical energy of a fuel, which is 
        supplied from an external source, and an oxidant into 
        electricity by electrochemical processes occurring at separate 
        electrodes in the device.
            (2) Heavy-duty vehicle.--The term ``heavy-duty vehicle'' 
        means a motor vehicle that--
                    (A) is rated at more than 8,500 pounds gross vehicle 
                weight;
                    (B) has a curb weight of more than 6,000 pounds; or
                    (C) has a basic vehicle frontal area in excess of 45 
                square feet.
            (3) Infrastructure.--The term ``infrastructure'' means the 
        equipment, systems, or facilities used to produce, distribute, 
        deliver, or store hydrogen (except for onboard storage).

[[Page 119 STAT. 845]]

            (4) Light-duty vehicle.--The term ``light-duty vehicle'' 
        means a motor vehicle that is rated at 8,500 or less pounds 
        gross vehicle weight.
            (5) Stationary; portable.--The terms ``stationary'' and 
        ``portable'', when used in reference to a fuel cell, include--
                    (A) continuous electric power; and
                    (B) backup electric power.
            (6) Task force.--The term ``Task Force'' means the Hydrogen 
        and Fuel Cell Technical Task Force established under section 
        806.
            (7) Technical advisory committee.--The term ``Technical 
        Advisory Committee'' means the independent Technical Advisory 
        Committee established under section 807.

SEC. 804. <<NOTE: Deadline. 42 USC 16153.>> PLAN.

    Not later than 6 months after the date of enactment of this Act, the 
Secretary shall transmit to Congress a coordinated plan for the programs 
described in this title and any other programs of the Department that 
are directly related to fuel cells or hydrogen. The plan shall describe, 
at a minimum--
            (1) the agenda for the next 5 years for the programs 
        authorized under this title, including the agenda for each 
        activity enumerated in section 805(e);
            (2) the types of entities that will carry out the activities 
        under this title and what role each entity is expected to play;
            (3) the milestones that will be used to evaluate the 
        programs for the next 5 years;
            (4) the most significant technical and nontechnical hurdles 
        that stand in the way of achieving the goals described in 
        section 805, and how the programs will address those hurdles; 
        and
            (5) the policy assumptions that are implicit in the plan, 
        including any assumptions that would affect the sources of 
        hydrogen or the marketability of hydrogen-related products.

SEC. 805. <<NOTE: 42 USC 16154.>> PROGRAMS.

    (a) In General.--The Secretary, in consultation with other Federal 
agencies and the private sector, shall conduct a research and 
development program on technologies relating to the production, 
purification, distribution, storage, and use of hydrogen energy, fuel 
cells, and related infrastructure.
    (b) Goal.--The goal of the program shall be to demonstrate and 
commercialize the use of hydrogen for transportation (in light-duty 
vehicles and heavy-duty vehicles), utility, industrial, commercial, and 
residential applications.
    (c) Focus.--In carrying out activities under this section, the 
Secretary shall focus on factors that are common to the development of 
hydrogen infrastructure and the supply of vehicle and electric power for 
critical consumer and commercial applications, and that achieve 
continuous technical evolution and cost reduction, particularly for 
hydrogen production, the supply of hydrogen, storage of hydrogen, and 
end uses of hydrogen that--
            (1) steadily increase production, distribution, and end use 
        efficiency and reduce life-cycle emissions;
            (2) resolve critical problems relating to catalysts, 
        membranes, storage, lightweight materials, electronic controls, 
        manufacturability, and other problems that emerge from the 
        program;

[[Page 119 STAT. 846]]

            (3) enhance sources of renewable fuels and biofuels for 
        hydrogen production; and
            (4) enable widespread use of distributed electricity 
        generation and storage.

    (d) Public Education and Research.--In carrying out this section, 
the Secretary shall support enhanced public education and research 
conducted at institutions of higher education in fundamental sciences, 
application design, and systems concepts (including education and 
research relating to materials, subsystems, manufacturability, 
maintenance, and safety) relating to hydrogen and fuel cells.
    (e) Activities.--The Secretary, in partnership with the private 
sector, shall conduct programs to address--
            (1) production of hydrogen from diverse energy sources, 
        including--
                    (A) fossil fuels, which may include carbon capture 
                and sequestration;
                    (B) hydrogen-carrier fuels (including ethanol and 
                methanol);
                    (C) renewable energy resources, including biomass; 
                and
                    (D) nuclear energy;
            (2) use of hydrogen for commercial, industrial, and 
        residential electric power generation;
            (3) safe delivery of hydrogen or hydrogen-carrier fuels, 
        including--
                    (A) transmission by pipeline and other distribution 
                methods; and
                    (B) convenient and economic refueling of vehicles 
                either at central refueling stations or through 
                distributed onsite generation;
            (4) advanced vehicle technologies, including--
                    (A) engine and emission control systems;
                    (B) energy storage, electric propulsion, and hybrid 
                systems;
                    (C) automotive materials; and
                    (D) other advanced vehicle technologies;
            (5) storage of hydrogen or hydrogen-carrier fuels, including 
        development of materials for safe and economic storage in 
        gaseous, liquid, or solid form at refueling facilities and 
        onboard vehicles;
            (6) development of safe, durable, affordable, and efficient 
        fuel cells, including fuel-flexible fuel cell power systems, 
        improved manufacturing processes, high-temperature membranes, 
        cost-effective fuel processing for natural gas, fuel cell stack 
        and system reliability, low temperature operation, and cold 
        start capability; and
            (7) the ability of domestic automobile manufacturers to 
        manufacture commercially available competitive hybrid vehicle 
        technologies in the United States.

    (f) Program Goals.--
            (1) Vehicles.--For vehicles, the goals of the program are--
                    (A) to enable a commitment by automakers no later 
                than year 2015 to offer safe, affordable, and 
                technically viable hydrogen fuel cell vehicles in the 
                mass consumer market; and
                    (B) to enable production, delivery, and acceptance 
                by consumers of model year 2020 hydrogen fuel cell and 
                other

[[Page 119 STAT. 847]]

                hydrogen-powered vehicles that will have, when compared 
                to light duty vehicles in model year 2005--
                          (i) fuel economy that is substantially higher;
                          (ii) substantially lower emissions of air 
                      pollutants; and
                          (iii) equivalent or improved vehicle fuel 
                      system crash integrity and occupant protection.
            (2) Hydrogen energy and energy infrastructure.--For hydrogen 
        energy and energy infrastructure, the goals of the program are 
        to enable a commitment not later than 2015 that will lead to 
        infrastructure by 2020 that will provide--
                    (A) safe and convenient refueling;
                    (B) improved overall efficiency;
                    (C) widespread availability of hydrogen from 
                domestic energy sources through--
                          (i) production, with consideration of 
                      emissions levels;
                          (ii) delivery, including transmission by 
                      pipeline and other distribution methods for 
                      hydrogen; and
                          (iii) storage, including storage in surface 
                      transportation vehicles;
                    (D) hydrogen for fuel cells, internal combustion 
                engines, and other energy conversion devices for 
                portable, stationary, micro, critical needs facilities, 
                and transportation applications; and
                    (E) other technologies consistent with the 
                Department's plan.
            (3) Fuel cells.--The goals for fuel cells and their 
        portable, stationary, and transportation applications are to 
        enable--
                    (A) safe, economical, and environmentally sound 
                hydrogen fuel cells;
                    (B) fuel cells for light duty and other vehicles; 
                and
                    (C) other technologies consistent with the 
                Department's plan.

    (g) Funding.--
            (1) In general.--The Secretary shall carry out the programs 
        under this section using a competitive, merit-based review 
        process and consistent with the generally applicable Federal 
        laws and regulations governing awards of financial assistance, 
        contracts, or other agreements.
            (2) Research centers.--Activities under this section may be 
        carried out by funding nationally recognized university-based or 
        Federal laboratory research centers.

    (h) Hydrogen Supply.--There are authorized to be appropriated to 
carry out projects and activities relating to hydrogen production, 
storage, distribution and dispensing, transport, education and 
coordination, and technology transfer under this section--
            (1) $160,000,000 for fiscal year 2006;
            (2) $200,000,000 for fiscal year 2007;
            (3) $220,000,000 for fiscal year 2008;
            (4) $230,000,000 for fiscal year 2009;
            (5) $250,000,000 for fiscal year 2010; and
            (6) such sums as are necessary for each of fiscal years 2011 
        through 2020.

[[Page 119 STAT. 848]]

    (i) Fuel Cell Technologies.--There are authorized to be appropriated 
to carry out projects and activities relating to fuel cell technologies 
under this section--
            (1) $150,000,000 for fiscal year 2006;
            (2) $160,000,000 for fiscal year 2007;
            (3) $170,000,000 for fiscal year 2008;
            (4) $180,000,000 for fiscal year 2009;
            (5) $200,000,000 for fiscal year 2010; and
            (6) such sums as are necessary for each of fiscal years 2011 
        through 2020.

SEC. 806. <<NOTE: 42 USC 16155.>> HYDROGEN AND FUEL CELL TECHNICAL TASK 
            FORCE.

    (a) Establishment.--Not <<NOTE: Deadline. President.>> later than 
120 days after the date of enactment of this Act, the President shall 
establish an interagency task force chaired by the Secretary with 
representatives from each of the following:
            (1) The Office of Science and Technology Policy within the 
        Executive Office of the President.
            (2) The Department of Transportation.
            (3) The Department of Defense.
            (4) The Department of Commerce (including the National 
        Institute of Standards and Technology).
            (5) The Department of State.
            (6) The Environmental Protection Agency.
            (7) The National Aeronautics and Space Administration.
            (8) Other Federal agencies as the Secretary determines 
        appropriate.

    (b) Duties.--
            (1) Planning.--The Task Force shall work toward--
                    (A) a safe, economical, and environmentally sound 
                fuel infrastructure for hydrogen and hydrogen-carrier 
                fuels, including an infrastructure that supports buses 
                and other fleet transportation;
                    (B) fuel cells in government and other applications, 
                including portable, stationary, and transportation 
                applications;
                    (C) distributed power generation, including the 
                generation of combined heat, power, and clean fuels 
                including hydrogen;
                    (D) uniform hydrogen codes, standards, and safety 
                protocols; and
                    (E) vehicle hydrogen fuel system integrity safety 
                performance.
            (2) Activities.--The Task Force may organize workshops and 
        conferences, may issue publications, and may create databases to 
        carry out its duties. The Task Force shall--
                    (A) foster the exchange of generic, nonproprietary 
                information and technology among industry, academia, and 
                government;
                    (B) develop and maintain an inventory and assessment 
                of hydrogen, fuel cells, and other advanced 
                technologies, including the commercial capability of 
                each technology for the economic and environmentally 
                safe production, distribution, delivery, storage, and 
                use of hydrogen;
                    (C) integrate technical and other information made 
                available as a result of the programs and activities 
                under this title;

[[Page 119 STAT. 849]]

                    (D) promote the marketplace introduction of 
                infrastructure for hydrogen fuel vehicles; and
                    (E) conduct an education program to provide hydrogen 
                and fuel cell information to potential end-users.

    (c) Agency Cooperation.--The heads of all agencies, including those 
whose agencies are not represented on the Task Force, shall cooperate 
with and furnish information to the Task Force, the Technical Advisory 
Committee, and the Department.

SEC. 807. <<NOTE: 42 USC 16156.>> TECHNICAL ADVISORY COMMITTEE.

    (a) Establishment.--The Hydrogen Technical and Fuel Cell Advisory 
Committee is established to advise the Secretary on the programs and 
activities under this title.
    (b) Membership.--
            (1) Members.--The Technical Advisory Committee shall be 
        comprised of not fewer than 12 nor more than 25 members. The 
        members shall be appointed by the Secretary to represent 
        domestic industry, academia, professional societies, government 
        agencies, Federal laboratories, previous advisory panels, and 
        financial, environmental, and other appropriate organizations 
        based on the Department's assessment of the technical and other 
        qualifications of Technical Advisory Committee members and the 
        needs of the Technical Advisory Committee.
            (2) Terms.--The term of a member of the Technical Advisory 
        Committee shall not be more than 3 years. The Secretary may 
        appoint members of the Technical Advisory Committee in a manner 
        that allows the terms of the members serving at any time to 
        expire at spaced intervals so as to ensure continuity in the 
        functioning of the Technical Advisory Committee. A member of the 
        Technical Advisory Committee whose term is expiring may be 
        reappointed.
            (3) Chairperson.--The Technical Advisory Committee shall 
        have a chairperson, who shall be elected by the members from 
        among their number.

    (c) Review.--The Technical Advisory Committee shall review and make 
recommendations to the Secretary on--
            (1) the implementation of programs and activities under this 
        title;
            (2) the safety, economical, and environmental consequences 
        of technologies for the production, distribution, delivery, 
        storage, or use of hydrogen energy and fuel cells; and
            (3) the plan under section 804.

    (d) Response.--
            (1) Consideration of recommendations.--The Secretary shall 
        consider, but need not adopt, any recommendations of the 
        Technical Advisory Committee under subsection (c).
            (2) Biennial report.--The Secretary shall transmit a 
        biennial report to Congress describing any recommendations made 
        by the Technical Advisory Committee since the previous report. 
        The report shall include a description of how the Secretary has 
        implemented or plans to implement the recommendations, or an 
        explanation of the reasons that a recommendation will not be 
        implemented. The report shall be transmitted along with the 
        President's budget proposal.

    (e) Support.--The Secretary shall provide resources necessary in the 
judgment of the Secretary for the Technical Advisory Committee to carry 
out its responsibilities under this title.

[[Page 119 STAT. 850]]

SEC. 808. <<NOTE: 42 USC 16157.>> DEMONSTRATION.

    (a) In General.--In carrying out the programs under this section, 
the Secretary shall fund a limited number of demonstration projects, 
consistent with this title and a determination of the maturity, cost-
effectiveness, and environmental impacts of technologies supporting each 
project. In selecting projects under this subsection, the Secretary 
shall, to the extent practicable and in the public interest, select 
projects that--
            (1) involve using hydrogen and related products at existing 
        facilities or installations, such as existing office buildings, 
        military bases, vehicle fleet centers, transit bus authorities, 
        or units of the National Park System;
            (2) depend on reliable power from hydrogen to carry out 
        essential activities;
            (3) lead to the replication of hydrogen technologies and 
        draw such technologies into the marketplace;
            (4) include vehicle, portable, and stationary demonstrations 
        of fuel cell and hydrogen-based energy technologies;
            (5) address the interdependency of demand for hydrogen fuel 
        cell applications and hydrogen fuel infrastructure;
            (6) raise awareness of hydrogen technology among the public;
            (7) facilitate identification of an optimum technology among 
        competing alternatives;
            (8) address distributed generation using renewable sources;
            (9) carry out demonstrations of evolving hydrogen and fuel 
        cell technologies in national parks, remote island areas, and on 
        Indian tribal land, as selected by the Secretary;
            (10) carry out a program to demonstrate developmental 
        hydrogen and fuel cell systems for mobile, portable, and 
        stationary uses, using improved versions of the learning 
        demonstrations program concept of the Department including 
        demonstrations involving--
                    (A) light-duty vehicles;
                    (B) heavy-duty vehicles;
                    (C) fleet vehicles;
                    (D) specialty industrial and farm vehicles; and
                    (E) commercial and residential portable, continuous, 
                and backup electric power generation;
            (11) in accordance with any code or standards developed in a 
        region, fund prototype, pilot fleet, and infrastructure regional 
        hydrogen supply corridors along the interstate highway system in 
        varied climates across the United States; and
            (12) fund demonstration programs that explore the use of 
        hydrogen blends, hybrid hydrogen, and hydrogen reformed from 
        renewable agricultural fuels, including the use of hydrogen in 
        hybrid electric, heavier duty, and advanced internal combustion-
        powered vehicles.

The Secretary shall give preference to projects which address multiple 
elements contained in paragraphs (1) through (12).
    (b) System Demonstrations.--
            (1) In general.--As a <<NOTE: Grants.>> component of the 
        demonstration program under this section, the Secretary shall 
        provide grants, on a cost share basis as appropriate, to 
        eligible entities (as determined by the Secretary) for use in--

[[Page 119 STAT. 851]]

                    (A) devising system design concepts that provide for 
                the use of advanced composite vehicles in programs under 
                section 782 that--
                          (i) have as a primary goal the reduction of 
                      drive energy requirements;
                          (ii) after 2010, add another research and 
                      development phase, as defined in subsection (c), 
                      including the vehicle and infrastructure 
                      partnerships developed under the learning 
                      demonstrations program concept of the Department; 
                      and
                          (iii) are managed through an enhanced 
                      FreedomCAR program within the Department that 
                      encourages involvement in cost-shared projects by 
                      manufacturers and governments; and
                    (B) designing a local distributed energy system 
                that--
                          (i) incorporates renewable hydrogen 
                      production, off-grid electricity production, and 
                      fleet applications in industrial or commercial 
                      service;
                          (ii) integrates energy or applications 
                      described in clause (i), such as stationary, 
                      portable, micro, and mobile fuel cells, into a 
                      high-density commercial or residential building 
                      complex or agricultural community; and
                          (iii) is managed in cooperation with industry, 
                      State, tribal, and local governments, agricultural 
                      organizations, and nonprofit generators and 
                      distributors of electricity.

    (c) Identification of New Program Requirements.--In carrying out the 
demonstrations under subsection (a), the Secretary, in consultation with 
the Task Force and the Technical Advisory Committee, shall--
            (1) after 2008 for stationary and portable applications, and 
        after 2010 for vehicles, identify new requirements that refine 
        technological concepts, planning, and applications; and
            (2) during the second phase of the learning demonstrations 
        under subsection (b)(1)(A)(ii), redesign subsequent program work 
        to incorporate those requirements.

    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            (1) $185,000,000 for fiscal year 2006;
            (2) $200,000,000 for fiscal year 2007;
            (3) $250,000,000 for fiscal year 2008;
            (4) $300,000,000 for fiscal year 2009;
            (5) $375,000,000 for fiscal year 2010; and
            (6) such sums as are necessary for each of fiscal years 2011 
        through 2020.

SEC. 809. <<NOTE: 42 USC 16158.>> CODES AND STANDARDS.

    (a) In General.--The <<NOTE: Grants. Contracts.>> Secretary, in 
cooperation with the Task Force, shall provide grants to, or offer to 
enter into contracts with, such professional organizations, public 
service organizations, and government agencies as the Secretary 
determines appropriate to support timely and extensive development of 
safety codes and standards relating to fuel cell vehicles, hydrogen 
energy systems, and stationary, portable, and micro fuel cells.

[[Page 119 STAT. 852]]

    (b) Educational Efforts.--The Secretary shall support educational 
efforts by organizations and agencies described in subsection (a) to 
share information, including information relating to best practices, 
among those organizations and agencies.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            (1) $4,000,000 for fiscal year 2006;
            (2) $7,000,000 for fiscal year 2007;
            (3) $8,000,000 for fiscal year 2008;
            (4) $10,000,000 for fiscal year 2009;
            (5) $9,000,000 for fiscal year 2010; and
            (6) such sums as are necessary for each of fiscal years 2011 
        through 2020.

SEC. 810. <<NOTE: Applicability. 42 USC 16159.>> DISCLOSURE.

    Section 623 of the Energy Policy Act of 1992 (42 U.S.C. 13293) shall 
apply to any project carried out through a grant, cooperative agreement, 
or contract under this title.

SEC. 811. <<NOTE: 42 USC 16160.>> REPORTS.

    (a) Secretary.--Subject to subsection (c), not later than 2 years 
after the date of enactment of this Act, and triennially thereafter, the 
Secretary shall submit to Congress a report describing--
            (1) activities carried out by the Department under this 
        title, for hydrogen and fuel cell technology;
            (2) measures the Secretary has taken during the preceding 3 
        years to support the transition of primary industry (or a 
        related industry) to a fully commercialized hydrogen economy;
            (3) any change made to the strategy relating to hydrogen and 
        fuel cell technology to reflect the results of a learning 
        demonstrations;
            (4) progress, including progress in infrastructure, made 
        toward achieving the goal of producing and deploying not less 
        than--
                    (A) 100,000 hydrogen-fueled vehicles in the United 
                States by 2010; and
                    (B) 2,500,000 hydrogen-fueled vehicles in the United 
                States by 2020;
            (5) progress made toward achieving the goal of supplying 
        hydrogen at a sufficient number of fueling stations in the 
        United States by 2010 including by integrating--
                    (A) hydrogen activities; and
                    (B) associated targets and timetables for the 
                development of hydrogen technologies;
            (6) any problem relating to the design, execution, or 
        funding of a program under this title;
            (7) progress made toward and goals achieved in carrying out 
        this title and updates to the developmental roadmap, including 
        the results of the reviews conducted by the National Academy of 
        Sciences under subsection (b) for the fiscal years covered by 
        the report; and
            (8) any updates to strategic plans that are necessary to 
        meet the goals described in paragraph (4).

    (b) External Review.--The <<NOTE: Deadlines.>> Secretary shall enter 
into an arrangement with the National Academy of Sciences under which 
the Academy will review the programs under sections 805 and 808 every 
fourth year following the date of enactment of this Act. The Academy's 
review shall include the program priorities and

[[Page 119 STAT. 853]]

technical milestones, and evaluate the progress toward achieving them. 
The first review shall be completed not later than 5 years after the 
date of enactment of this Act. Not later than 45 days after receiving 
the review, the Secretary shall transmit the review to Congress along 
with a plan to implement the review's recommendations or an explanation 
for the reasons that a recommendation will not be implemented.
    (c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $1,500,000 for each of fiscal 
years 2006 through 2020.

SEC. 812. <<NOTE: 42 USC 16161.>> SOLAR AND WIND TECHNOLOGIES.

    (a) Solar Energy Technologies.--The Secretary shall--
            (1) prepare a detailed roadmap for carrying out the 
        provisions in this title related to solar energy technologies 
        and for implementing the recommendations related to solar energy 
        technologies that are included in the report transmitted under 
        subsection (e);
            (2) provide for the establishment of 5 projects in 
        geographic areas that are regionally and climatically diverse to 
        demonstrate the production of hydrogen at solar energy 
        facilities, including one demonstration project at a National 
        Laboratory or institution of higher education;
            (3) establish a program--
                    (A) to develop optimized concentrating solar power 
                devices that may be used for the production of both 
                electricity and hydrogen; and
                    (B) to evaluate the use of thermochemical cycles for 
                hydrogen production at the temperatures attainable with 
                concentrating solar power devices;
            (4) coordinate with activities sponsored by the Department's 
        Office of Nuclear Energy, Science, and Technology on high-
        temperature materials, thermochemical cycles, and economic 
        issues related to solar energy;
            (5) provide for the construction and operation of new 
        concentrating solar power devices or solar power cogeneration 
        facilities that produce hydrogen either concurrently with, or 
        independently of, the production of electricity;
            (6) support existing facilities and programs of study 
        related to concentrating solar power devices; and
            (7) establish a program--
                    (A) to develop methods that use electricity from 
                photovoltaic devices for the onsite production of 
                hydrogen, such that no intermediate transmission or 
                distribution infrastructure is required or used and 
                future demand growth may be accommodated;
                    (B) to evaluate the economics of small-scale 
                electrolysis for hydrogen production; and
                    (C) to study the potential of modular photovoltaic 
                devices for the development of a hydrogen 
                infrastructure, the security implications of a hydrogen 
                infrastructure, and the benefits potentially derived 
                from a hydrogen infrastructure.

    (b) Wind Energy Technologies.--The Secretary shall--
            (1) prepare a detailed roadmap for carrying out the 
        provisions in this title related to wind energy technologies and 
        for implementing the recommendations related to wind energy

[[Page 119 STAT. 854]]

        technologies that are included in the report transmitted under 
        subsection (e); and
            (2) provide for the establishment of 5 projects in 
        geographic areas that are regionally and climatically diverse to 
        demonstrate the production of hydrogen at existing wind energy 
        facilities, including one demonstration project at a National 
        Laboratory or institution of higher education.

    (c) Program Support.--The Secretary shall support programs at 
institutions of higher education for the development of solar energy 
technologies and wind energy technologies for the production of 
hydrogen. The programs supported under this subsection shall--
            (1) enhance fellowship and faculty assistance programs;
            (2) provide support for fundamental research;
            (3) encourage collaborative research among industry, 
        National Laboratories, and institutions of higher education;
            (4) support communication and outreach; and
            (5) to the greatest extent possible--
                    (A) be located in geographic areas that are 
                regionally and climatically diverse; and
                    (B) be located at part B institutions, minority 
                institutions, and institutions of higher education 
                located in States participating in the Experimental 
                Program to Stimulate Competitive Research of the 
                Department.

    (d) Institutions of Higher Education and National Laboratory 
Interactions.--In conjunction with the programs supported under this 
section, the Secretary shall develop sabbatical, fellowship, and 
visiting scientist programs to encourage National Laboratories and 
institutions of higher education to share and exchange personnel.
    (e) Report.--The Secretary shall transmit to the Congress not later 
than 120 days after the date of enactment of this Act a report 
containing detailed summaries of the roadmaps prepared under subsections 
(a)(1) and (b)(1), descriptions of the Secretary's progress in 
establishing the projects and other programs required under this 
section, and recommendations for promoting the availability of advanced 
solar and wind energy technologies for the production of hydrogen.
    (f) Definitions.--For purposes of this section--
            (1) the term ``concentrating solar power devices'' means 
        devices that concentrate the power of the sun by reflection or 
        refraction to improve the efficiency of a photovoltaic or 
        thermal generation process;
            (2) the term ``minority institution'' has the meaning given 
        to that term in section 365 of the Higher Education Act of 1965 
        (20 U.S.C. 1067k);
            (3) the term ``part B institution'' has the meaning given to 
        that term in section 322 of the Higher Education Act of 1965 (20 
        U.S.C. 1061); and
            (4) the term ``photovoltaic devices'' means devices that 
        convert light directly into electricity through a solid-state, 
        semiconductor process.

    (g) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as are necessary for carrying out the activities 
under this section for each of fiscal years 2006 through 2020.

[[Page 119 STAT. 855]]

SEC. 813. <<NOTE: 42 USC 16162.>> TECHNOLOGY TRANSFER.

    In carrying out this title, the Secretary shall carry out programs 
that--
            (1) provide for the transfer of critical hydrogen and fuel 
        cell technologies to the private sector;
            (2) accelerate wider application of those technologies in 
        the global market;
            (3) foster the exchange of generic, nonproprietary 
        information; and
            (4) assess technical and commercial viability of 
        technologies relating to the production, distribution, storage, 
        and use of hydrogen energy and fuel cells.

SEC. 814. <<NOTE: 42 USC 16163.>> MISCELLANEOUS PROVISIONS.

    (a) Representation.--The Secretary may represent the United States 
interests with respect to activities and programs under this title, in 
coordination with the Department of Transportation, the National 
Institute of Standards and Technology, and other relevant Federal 
agencies, before governments and nongovernmental organizations 
including--
            (1) other Federal, State, regional, and local governments 
        and their representatives;
            (2) industry and its representatives, including members of 
        the energy and transportation industries; and
            (3) in consultation with the Department of State, foreign 
        governments and their representatives including international 
        organizations.

    (b) Regulatory Authority.--Nothing in this title shall be construed 
to alter the regulatory authority of the Department.

SEC. 815. <<NOTE: 42 USC 16164.>> COST SHARING.

    The costs of carrying out projects and activities under this title 
shall be shared in accordance with section 988.

SEC. 816. <<NOTE: 42 USC 16165.>> SAVINGS CLAUSE.

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

[[Page 119 STAT. 856]]

TITLE IX--RESEARCH <<NOTE: Energy Research, Development, Demonstration, 
and Commercial Application Act of 2005.>> AND DEVELOPMENT

SEC. 901. <<NOTE: 42 USC 15801 note.>> SHORT TITLE.

    This title may be cited as the ``Energy Research, Development, 
Demonstration, and Commercial Application Act of 2005''.

SEC. 902. <<NOTE: 42 USC 16181.>> GOALS.

    (a) In General.--In order to achieve the purposes of this title, the 
Secretary shall conduct a balanced set of programs of energy research, 
development, demonstration, and commercial application with the general 
goals of--
            (1) increasing the efficiency of all energy intensive 
        sectors through conservation and improved technologies;
            (2) promoting diversity of energy supply;
            (3) decreasing the dependence of the United States on 
        foreign energy supplies;
            (4) improving the energy security of the United States; and
            (5) decreasing the environmental impact of energy-related 
        activities.

    (b) Goals.--The <<NOTE: Publication.>> Secretary shall publish 
measurable cost and performance-based goals, comparable over time, with 
each annual budget submission in at least the following areas:
            (1) Energy efficiency for buildings, energy-consuming 
        industries, and vehicles.
            (2) Electric energy generation (including distributed 
        generation), transmission, and storage.
            (3) Renewable energy technologies, including wind power, 
        photovoltaics, solar thermal systems, geothermal energy, 
        hydrogen-fueled systems, biomass-based systems, biofuels, and 
        hydropower.
            (4) Fossil energy, including power generation, onshore and 
        offshore oil and gas resource recovery, and transportation 
        fuels.
            (5) Nuclear energy, including programs for existing and 
        advanced reactors, and education of future specialists.

    (c) Public Comment.--The Secretary shall provide mechanisms for 
input on the annually published goals from industry, institutions of 
higher education, and other public sources.
    (d) Effect of Goals.--Nothing in subsection (a) or the annually 
published goals creates any new authority for any Federal agency, or may 
be used by any Federal agency, to support the establishment of 
regulatory standards or regulatory requirements.

SEC. 903. <<NOTE: 42 USC 16182.>> DEFINITIONS.

    In this title:
            (1) Departmental mission.--The term ``departmental mission'' 
        means any of the functions vested in the Secretary by the 
        Department of Energy Organization Act (42 U.S.C. 7101 et seq.) 
        or other law.
            (2) Hispanic-serving institution.--The term ``Hispanic-
        serving institution'' has the meaning given the term in section 
        502(a) of the Higher Education Act of 1965 (20 U.S.C. 1101a(a)).
            (3) Nonmilitary energy laboratory.--The term ``nonmilitary 
        energy laboratory'' means a National Laboratory other

[[Page 119 STAT. 857]]

        than a National Laboratory listed in subparagraph (G), (H), or 
        (N) of section 2(3).
            (4) Part b institution.--The term ``part B institution'' has 
        the meaning given the term in section 322 of the Higher 
        Education Act of 1965 (20 U.S.C. 1061).
            (5) Single-purpose research facility.--The term ``single-
        purpose research facility'' means--
                    (A) any of the primarily single-purpose entities 
                owned by the Department; or
                    (B) any other organization of the Department 
                designated by the Secretary.
            (6) University.--The term ``university'' has the meaning 
        given the term ``institution of higher education'' in section 
        101 of the Higher Education Act of 1965 (20 U.S.C. 1001).

                      Subtitle A--Energy Efficiency

SEC. 911. <<NOTE: 42 USC 16191.>> ENERGY EFFICIENCY.

    (a) In General.--
            (1) Objectives.--The Secretary shall conduct programs of 
        energy efficiency research, development, demonstration, and 
        commercial application, including activities described in this 
        subtitle. Such programs shall take into consideration the 
        following objectives:
                    (A) Increasing the energy efficiency of vehicles, 
                buildings, and industrial processes.
                    (B) Reducing the demand of the United States for 
                energy, especially energy from foreign sources.
                    (C) Reducing the cost of energy and making the 
                economy more efficient and competitive.
                    (D) Improving the energy security of the United 
                States.
                    (E) Reducing the environmental impact of energy-
                related activities.
            (2) Programs.--Programs under this subtitle shall include 
        research, development, demonstration, and commercial application 
        of--
                    (A) advanced, cost-effective technologies to improve 
                the energy efficiency and environmental performance of 
                vehicles, including--
                          (i) hybrid and electric propulsion systems;
                          (ii) plug-in hybrid systems;
                          (iii) advanced combustion engines;
                          (iv) weight and drag reduction technologies;
                          (v) whole-vehicle design optimization; and
                          (vi) advanced drive trains;
                    (B) cost-effective technologies, for new 
                construction and retrofit, to improve the energy 
                efficiency and environmental performance of buildings, 
                using a whole-buildings approach, including onsite 
                renewable energy generation;
                    (C) advanced technologies to improve the energy 
                efficiency, environmental performance, and process 
                efficiency of energy-intensive and waste-intensive 
                industries; and
                    (D) advanced control devices to improve the energy 
                efficiency of electric motors, including those used in 
                industrial processes, heating, ventilation, and cooling.

[[Page 119 STAT. 858]]

    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out energy efficiency and 
conservation research, development, demonstration, and commercial 
application activities, including activities authorized under this 
subtitle--
            (1) $783,000,000 for fiscal year 2007;
            (2) $865,000,000 for fiscal year 2008; and
            (3) $952,000,000 for fiscal year 2009.

    (c) Allocations.--From amounts authorized under subsection (b), the 
following sums are authorized:
            (1) For activities under section 912, $50,000,000 for each 
        of fiscal years 2007 through 2009.
            (2) For activities under section 915, $7,000,000 for each of 
        fiscal years 2007 through 2009.
            (3) For activities under subsection (a)(2)(A)--
                    (A) $200,000,000 for fiscal year 2007;
                    (B) $270,000,000 for fiscal year 2008; and
                    (C) $310,000,000 for fiscal year 2009.
            (4) For activities under subsection (a)(2)(D), $2,000,000 
        for each of fiscal years 2007 and 2008.

    (d) Extended Authorization.--There are authorized to be appropriated 
to the Secretary to carry out section 912 $50,000,000 for each of fiscal 
years 2010 through 2013.
    (e) Limitations.--None of the funds authorized to be appropriated 
under this section may be used for--
            (1) the issuance or implementation of energy efficiency 
        regulations;
            (2) the weatherization program established under part A of 
        title IV of the Energy Conservation and Production Act (42 
        U.S.C. 6861 et seq.);
            (3) a State energy conservation plan established under part 
        D of title III of the Energy Policy and Conservation Act (42 
        U.S.C. 6321 et seq.); or
            (4) a Federal energy management measure carried out under 
        part 3 of title V of the National Energy Conservation Policy Act 
        (42 U.S.C. 8251 et seq.).

SEC. 912. <<NOTE: 42 USC 16192.>> NEXT GENERATION LIGHTING INITIATIVE.

    (a) Definitions.--In this section:
            (1) Advanced solid-state lighting.--The term ``advanced 
        solid-state lighting'' means a semiconducting device package and 
        delivery system that produces white light using externally 
        applied voltage.
            (2) Industry alliance.--The term ``Industry Alliance'' means 
        an entity selected by the Secretary under subsection (d).
            (3) Initiative.--The term ``Initiative'' means the Next 
        Generation Lighting Initiative carried out under this section.
            (4) Research.--The term ``research'' includes research on 
        the technologies, materials, and manufacturing processes 
        required for white light emitting diodes.
            (5) White light emitting diode.--The term ``white light 
        emitting diode'' means a semiconducting package, using either 
        organic or inorganic materials, that produces white light using 
        externally applied voltage.

    (b) Initiative.--The Secretary shall carry out a Next Generation 
Lighting Initiative in accordance with this section to support

[[Page 119 STAT. 859]]

research, development, demonstration, and commercial application 
activities related to advanced solid-state lighting technologies based 
on white light emitting diodes.
    (c) Objectives.--The objectives of the Initiative shall be to 
develop advanced solid-state organic and inorganic lighting technologies 
based on white light emitting diodes that, compared to incandescent and 
fluorescent lighting technologies, are longer lasting, are more energy-
efficient and cost-competitive, and have less environmental impact.
    (d) Industry Alliance.--Not <<NOTE: Deadline.>> later than 90 days 
after the date of enactment of this Act, the Secretary shall 
competitively select an Industry Alliance to represent participants who 
are private, for-profit firms, open to large and small businesses, that, 
as a group, are broadly representative of United States solid-state 
lighting research, development, infrastructure, and manufacturing 
expertise as a whole.

    (e) Research.--
            (1) Grants.--The Secretary shall carry out the research 
        activities of the Initiative through competitively awarded 
        grants to--
                    (A) researchers, including Industry Alliance 
                participants;
                    (B) small businesses;
                    (C) National Laboratories; and
                    (D) institutions of higher education.
            (2) Industry alliance.--The Secretary shall annually solicit 
        from the Industry Alliance--
                    (A) comments to identify solid-state lighting 
                technology needs;
                    (B) an assessment of the progress of the research 
                activities of the Initiative; and
                    (C) assistance in annually updating solid-state 
                lighting technology roadmaps.
            (3) Availability to public.--The information and roadmaps 
        under paragraph (2) shall be available to the public.

    (f) Development, <<NOTE: Grants.>> Demonstration, and Commercial 
Application.--
            (1) In general.--The Secretary shall carry out a 
        development, demonstration, and commercial application program 
        for the Initiative through competitively selected awards.
            (2) Preference.--In making the awards, the Secretary may 
        give preference to participants in the Industry Alliance.

    (g) Cost Sharing.--In carrying out this section, the Secretary shall 
require cost sharing in accordance with section 988.
    (h) Intellectual Property.--The Secretary may require (in accordance 
with section 202(a)(ii) of title 35, United States Code, section 152 of 
the Atomic Energy Act of 1954 (42 U.S.C. 2182), and section 9 of the 
Federal Nonnuclear Energy Research and Development Act of 1974 (42 
U.S.C. 5908)) that for any new invention developed under subsection 
(e)--
            (1) that the Industry Alliance participants who are active 
        participants in research, development, and demonstration 
        activities related to the advanced solid-state lighting 
        technologies that are covered by this section shall be granted 
        the first option to negotiate with the invention owner, at least 
        in the field of solid-state lighting, nonexclusive licenses and 
        royalties on terms that are reasonable under the circumstances;

[[Page 119 STAT. 860]]

            (2)(A) that, for 1 year after a United States patent is 
        issued for the invention, the patent holder shall not negotiate 
        any license or royalty with any entity that is not a participant 
        in the Industry Alliance described in paragraph (1); and
            (B) that, during the year described in subparagraph (A), the 
        patent holder shall negotiate nonexclusive licenses and 
        royalties in good faith with any interested participant in the 
        Industry Alliance described in paragraph (1); and
            (3) such other terms as the Secretary determines are 
        required to promote accelerated commercialization of inventions 
        made under the Initiative.

    (i) National Academy Review.--The Secretary shall enter into an 
arrangement with the National Academy of Sciences to conduct periodic 
reviews of the Initiative.

SEC. 913. <<NOTE: 42 USC 16193.>> NATIONAL BUILDING PERFORMANCE 
            INITIATIVE.

    (a) Interagency Group.--
            (1) In general.--
        Not <<NOTE: Deadline. Establishment.>> later than 90 days after 
        the date of enactment of this Act, the Director of the Office of 
        Science and Technology Policy shall establish an interagency 
        group to develop, in coordination with the advisory committee 
        established under subsection (e), a National Building 
        Performance Initiative (referred to in this section as the 
        ``Initiative'').
            (2) Cochairs.--The interagency group shall be co-chaired by 
        appropriate officials of the Department and the Department of 
        Commerce, who shall jointly arrange for the provision of 
        necessary administrative support to the group.

    (b) Integration of Efforts.--The Initiative shall integrate Federal, 
State, and voluntary private sector efforts to reduce the costs of 
construction, operation, maintenance, and renovation of commercial, 
industrial, institutional, and residential buildings.
    (c) Plan.--
            (1) In general.--Not <<NOTE: Deadline.>> later than 1 year 
        after the date of enactment of this Act, the interagency group 
        shall submit to Congress a plan for carrying out the appropriate 
        Federal role in the Initiative.
            (2) Inclusions.--The plan shall include--
                    (A) research, development, demonstration, and 
                commercial application of energy technology systems and 
                materials for new construction and retrofit relating to 
                the building envelope and building system components;
                    (B) research, development, demonstration, and 
                commercial application of energy technology and 
                infrastructure enabling the energy efficient, automated 
                operation of buildings and building equipment; and
                    (C) the collection, analysis, and dissemination of 
                research results and other pertinent information on 
                enhancing building performance to industry, government 
                entities, and the public.

    (d) Department of Energy Role.--Within the Federal portion of the 
Initiative, the Department shall be the lead agency for all aspects of 
building performance related to use and conservation of energy.
    (e) Advisory Committee.--The <<NOTE: Establishment.>> Director of 
the Office of Science and Technology Policy shall establish an advisory 
committee to--
            (1) analyze and provide recommendations on potential private 
        sector roles and participation in the Initiative; and

[[Page 119 STAT. 861]]

            (2) review and provide recommendations on the plan described 
        in subsection (c).

    (f) Administration.--Nothing in this section provides any Federal 
agency with new authority to regulate building performance.

SEC. 914. <<NOTE: 42 USC 16194.>> BUILDING STANDARDS.

    (a) Definition of High Performance Building.--In this section, the 
term ``high performance building'' means a building that integrates and 
optimizes all major high-performance building attributes, including 
energy efficiency, durability, life-cycle performance, and occupant 
productivity.
    (b) Assessment.--Not <<NOTE: Deadline. Contracts.>> later than 120 
days after the date of enactment of this Act, the Secretary shall enter 
into an agreement with the National Institute of Building Sciences to--
            (1) conduct an assessment (in cooperation with industry, 
        standards development organizations, and other entities, as 
        appropriate) of whether the current voluntary consensus 
        standards and rating systems for high performance buildings are 
        consistent with the current technological state of the art, 
        including relevant results from the research, development and 
        demonstration activities of the Department;
            (2) determine if additional research is required, based on 
        the findings of the assessment; and
            (3) recommend steps for the Secretary to accelerate the 
        development of voluntary consensus-based standards for high 
        performance buildings that are based on the findings of the 
        assessment.

    (c) Grant and Technical Assistance Program.--Consistent with 
subsection (b) and section 12(d) of the National Technology Transfer and 
Advancement Act of 1995 (15 U.S.C. 272 note), the Secretary shall 
establish a grant and technical assistance program to support the 
development of voluntary consensus-based standards for high performance 
buildings.

SEC. 915. <<NOTE: 42 USC 16195.>> SECONDARY ELECTRIC VEHICLE BATTERY USE 
            PROGRAM.

    (a) Definitions.--In this section:
            (1) Battery.--The term ``battery'' means an energy storage 
        device that previously has been used to provide motive power in 
        a vehicle powered in whole or in part by electricity.
            (2) Associated equipment.--The term ``associated equipment'' 
        means equipment located where the batteries will be used that is 
        necessary to enable the use of the energy stored in the 
        batteries.

    (b) Program.--
            (1) In general.--The Secretary shall establish and conduct a 
        program of research, development, demonstration, and commercial 
        application of energy technology for the secondary use of 
        batteries, if the Secretary finds that there are sufficient 
        numbers of batteries to support the program.
            (2) Administration.--The program shall be--
                    (A) designed to demonstrate the use of batteries in 
                secondary applications, including utility and commercial 
                power storage and power quality;
                    (B) structured to evaluate the performance, 
                including useful service life and costs, of such 
                batteries in field operations, and the necessary 
                supporting infrastructure, including reuse and disposal 
                of batteries; and

[[Page 119 STAT. 862]]

                    (C) coordinated with ongoing secondary battery use 
                programs at the National Laboratories and in industry.

    (c) Solicitation.--
            (1) In general.--Not <<NOTE: Deadline.>> later than 180 days 
        after the date of enactment of this Act, the Secretary shall 
        solicit proposals to demonstrate the secondary use of batteries 
        and associated equipment and supporting infrastructure in 
        geographic locations throughout the United States.
            (2) Additional solicitations.--The Secretary may make 
        additional solicitations for proposals if the Secretary 
        determines that the solicitations are necessary to carry out 
        this section.

    (d) Selection of Proposals.--
            (1) In general.--Not <<NOTE: Deadline.>> later than 90 days 
        after the closing date established by the Secretary for receipt 
        of proposals under subsection (c), the Secretary shall select up 
        to five proposals that may receive financial assistance under 
        this section once the Department receives appropriated funds to 
        carry out this section.
            (2) Factors.--In selecting proposals, the Secretary shall 
        consider--
                    (A) the diversity of battery type;
                    (B) geographic and climatic diversity; and
                    (C) life-cycle environmental effects of the 
                approaches.
            (3) Limitation.--No one project selected under this section 
        shall receive more than 25 percent of the funds made available 
        to carry out the program under this section.
            (4) Non-federal involvement.--In selecting proposals, the 
        Secretary shall consider the extent of involvement of State or 
        local government and other persons in each demonstration project 
        to optimize use of Federal resources.
            (5) Other criteria.--In selecting proposals, the Secretary 
        may consider such other criteria as the Secretary considers 
        appropriate.

    (e) Conditions.--In carrying out this section, the Secretary shall 
require that--
            (1) relevant information be provided to--
                    (A) the Department;
                    (B) the users of the batteries;
                    (C) the proposers of a project under this section; 
                and
                    (D) the battery manufacturers; and
            (2) the costs of carrying out projects and activities under 
        this section are shared in accordance with section 988.

SEC. 916. <<NOTE: 42 USC 16196.>> ENERGY EFFICIENCY SCIENCE INITIATIVE.

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

[[Page 119 STAT. 863]]

SEC. 917. <<NOTE: 42 USC 16197.>> ADVANCED ENERGY EFFICIENCY TECHNOLOGY 
            TRANSFER CENTERS.

    (a) Grants.--Not <<NOTE: Deadline. Establishment.>> later than 18 
months after the date of enactment of this Act, the Secretary shall make 
grants to nonprofit institutions, State and local governments, or 
universities (or consortia thereof), to establish a geographically 
dispersed network of Advanced Energy Efficiency Technology Transfer 
Centers, to be located in areas the Secretary determines have the 
greatest need of the services of such Centers. In establishing the 
network, the Secretary shall consider the special needs and 
opportunities for increased energy efficiency for manufactured and site-
built housing.

    (b) Activities.--
            (1) In general.--Each Center shall operate a program to 
        encourage demonstration and commercial application of advanced 
        energy methods and technologies through education and outreach 
        to building and industrial professionals, and to other 
        individuals and organizations with an interest in efficient 
        energy use.
            (2) Advisory panel.--Each <<NOTE: Establishment.>> Center 
        shall establish an advisory panel to advise the Center on how 
        best to accomplish the activities under paragraph (1).

    (c) Application.--A person seeking a grant under this section shall 
submit to the Secretary an application in such form and containing such 
information as the Secretary may require. The Secretary may award a 
grant under this section to an entity already in existence if the entity 
is otherwise eligible under this section.
    (d) Selection Criteria.--The Secretary shall award grants under this 
section on the basis of the following criteria, at a minimum:
            (1) The ability of the applicant to carry out the activities 
        described in subsection (b)(1).
            (2) The extent to which the applicant will coordinate the 
        activities of the Center with other entities, such as State and 
        local governments, utilities, and educational and research 
        institutions.

    (e) Cost-Sharing.--In carrying out this section, the Secretary shall 
require cost-sharing in accordance with the requirements of section 988 
for commercial application activities.
    (f) Advisory Committee.--The <<NOTE: Establishment.>> Secretary 
shall establish an advisory committee to advise the Secretary on the 
establishment of Centers under this section. The advisory committee 
shall be composed of individuals with expertise in the area of advanced 
energy methods and technologies, including at least one representative 
from--
            (1) State or local energy offices;
            (2) energy professionals;
            (3) trade or professional associations;
            (4) architects, engineers, or construction professionals;
            (5) manufacturers;
            (6) the research community; and
            (7) nonprofit energy or environmental organizations.

    (g) Definitions.--For purposes of this section:
            (1) Advanced energy methods and technologies.--The term 
        ``advanced energy methods and technologies'' means all methods 
        and technologies that promote energy efficiency and 
        conservation, including distributed generation technologies, and 
        life-cycle analysis of energy use.

[[Page 119 STAT. 864]]

            (2) Center.--The term ``Center'' means an Advanced Energy 
        Technology Transfer Center established pursuant to this section.
            (3) Distributed generation.--The term ``distributed 
        generation'' means an electric power generation facility that is 
        designed to serve retail electric consumers at or near the 
        facility site.

    (h) Authorization of Appropriations.--In addition to amounts 
otherwise authorized to be appropriated in section 911, there are 
authorized to be appropriated for the program under this section such 
sums as may be appropriated.

       Subtitle B--Distributed Energy and Electric Energy Systems

SEC. 921. <<NOTE: 42 USC 16211.>> DISTRIBUTED ENERGY AND ELECTRIC ENERGY 
            SYSTEMS.

    (a) In General.--The Secretary shall carry out programs of research, 
development, demonstration, and commercial application on distributed 
energy resources and systems reliability and efficiency, to improve the 
reliability and efficiency of distributed energy resources and systems, 
integrating advanced energy technologies with grid connectivity, 
including activities described in this subtitle. The programs shall 
address advanced energy technologies and systems and advanced grid 
reliability technologies.
    (b) Authorization of Appropriations.--
            (1) Distributed energy and electric energy systems 
        activities.--There are authorized to be appropriated to the 
        Secretary to carry out distributed energy and electric energy 
        systems activities, including activities authorized under this 
        subtitle--
                    (A) $240,000,000 for fiscal year 2007;
                    (B) $255,000,000 for fiscal year 2008; and
                    (C) $273,000,000 for fiscal year 2009.
            (2) Power delivery research initiative.--There are 
        authorized to be appropriated to the Secretary to carry out the 
        Power Delivery Research Initiative under subsection 925(e) such 
        sums as may be necessary for each of fiscal years 2007 through 
        2009.

    (c) Micro-Cogeneration Energy Technology.--From amounts authorized 
under subsection (b), $20,000,000 for each of fiscal years 2007 and 2008 
shall be available to carry out activities under section 923.
    (d) High-Voltage Transmission Lines.--From amounts authorized under 
subsection (b), $2,000,000 for fiscal year 2007 shall be available to 
carry out activities under section 925(g).

SEC. 922. <<NOTE: 42 USC 16212.>> HIGH POWER DENSITY INDUSTRY PROGRAM.

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

[[Page 119 STAT. 865]]

SEC. 923. <<NOTE: 42 USC 16213.>> MICRO-COGENERATION ENERGY TECHNOLOGY.

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

SEC. 924. <<NOTE: 42 USC 16214.>> DISTRIBUTED ENERGY TECHNOLOGY 
            DEMONSTRATION PROGRAMS.

    (a) Coordinating Consortia Program.--The Secretary may provide 
financial assistance to coordinating consortia of interdisciplinary 
participants for demonstrations designed to accelerate the use of 
distributed energy technologies (such as fuel cells, microturbines, 
reciprocating engines, thermally activated technologies, and combined 
heat and power systems) in high-energy intensive commercial 
applications.
    (b) Small-Scale Portable Power Program.--
            (1) In general.--The Secretary shall--
                    (A) establish a research, development, and 
                demonstration program to develop working models of small 
                scale portable power devices; and
                    (B) to the fullest extent practicable, identify and 
                utilize the resources of universities that have shown 
                expertise with respect to advanced portable power 
                devices for either civilian or military use.
            (2) Organization.--The universities identified and utilized 
        under paragraph (1)(B) are authorized to establish an 
        organization to promote small scale portable power devices.
            (3) Definition.--For purposes of this subsection, the term 
        ``small scale portable power device'' means a field-deployable 
        portable mechanical or electromechanical device that can be used 
        for applications such as communications, computation, mobility 
        enhancement, weapons systems, optical devices, cooling, sensors, 
        medical devices, and active biological agent detection systems.

SEC. 925. <<NOTE: 42 USC 16215.>> ELECTRIC TRANSMISSION AND DISTRIBUTION 
            PROGRAMS.

    (a) Program.--The Secretary shall establish a comprehensive 
research, development, and demonstration program to ensure the 
reliability, efficiency, and environmental integrity of electrical 
transmission and distribution systems, which shall include--
            (1) advanced energy delivery technologies, energy storage 
        technologies, materials, and systems, giving priority to new 
        transmission technologies, including composite conductor 
        materials and other technologies that enhance reliability, 
        operational flexibility, or power-carrying capability;
            (2) advanced grid reliability and efficiency technology 
        development;
            (3) technologies contributing to significant load 
        reductions;
            (4) advanced metering, load management, and control 
        technologies;
            (5) technologies to enhance existing grid components;

[[Page 119 STAT. 866]]

            (6) the development and use of high-temperature 
        superconductors to--
                    (A) enhance the reliability, operational 
                flexibility, or power-carrying capability of electric 
                transmission or distribution systems; or
                    (B) increase the efficiency of electric energy 
                generation, transmission, distribution, or storage 
                systems;
            (7) integration of power systems, including systems to 
        deliver high-quality electric power, electric power reliability, 
        and combined heat and power;
            (8) supply of electricity to the power grid by small scale, 
        distributed and residential-based power generators;
            (9) the development and use of advanced grid design, 
        operation, and planning tools;
            (10) any other infrastructure technologies, as appropriate; 
        and
            (11) technology transfer and education.

    (b) Program Plan.--
            (1) In general.--Not <<NOTE: Deadline.>> later than 1 year 
        after the date of enactment of this Act, the Secretary, in 
        consultation with other appropriate Federal agencies, shall 
        prepare and submit to Congress a 5-year program plan to guide 
        activities under this section.
            (2) Consultation.--In preparing the program plan, the 
        Secretary shall consult with--
                    (A) utilities;
                    (B) energy service providers;
                    (C) manufacturers;
                    (D) institutions of higher education;
                    (E) other appropriate State and local agencies;
                    (F) environmental organizations;
                    (G) professional and technical societies; and
                    (H) any other persons the Secretary considers 
                appropriate.

    (c) Implementation.--The Secretary shall consider implementing the 
program under this section using a consortium of participants from 
industry, institutions of higher education, and National Laboratories.
    (d) Report.--Not later than 2 years after the submission of the plan 
under subsection (b), the Secretary shall submit to Congress a report--
            (1) describing the progress made under this section; and
            (2) identifying any additional resources needed to continue 
        the development and commercial application of transmission and 
        distribution of infrastructure technologies.

    (e) Power Delivery Research Initiative.--
            (1) In general.--The Secretary shall establish a research, 
        development, and demonstration initiative specifically focused 
        on power delivery using components incorporating high 
        temperature superconductivity.
            (2) Goals.--The goals of the Initiative shall be--
                    (A) to establish world-class facilities to develop 
                high temperature superconductivity power applications in 
                partnership with manufacturers and utilities;
                    (B) to provide technical leadership for establishing 
                reliability for high temperature superconductivity power 
                applications, including suitable modeling and analysis;

[[Page 119 STAT. 867]]

                    (C) to facilitate the commercial transition toward 
                direct current power transmission, storage, and use for 
                high power systems using high temperature 
                superconductivity; and
                    (D) to facilitate the integration of very low 
                impedance high temperature superconducting wires and 
                cables in existing electric networks to improve system 
                performance, power flow control, and reliability.
            (3) Inclusions.--The Initiative shall include--
                    (A) feasibility analysis, planning, research, and 
                design to construct demonstrations of superconducting 
                links in high power, direct current, and controllable 
                alternating current transmission systems;
                    (B) public-private partnerships to demonstrate 
                deployment of high temperature superconducting cable 
                into testbeds simulating a realistic transmission grid 
                and under varying transmission conditions, including 
                actual grid insertions; and
                    (C) testbeds developed in cooperation with National 
                Laboratories, industries, and institutions of higher 
                education to--
                          (i) demonstrate those technologies;
                          (ii) prepare the technologies for commercial 
                      introduction; and
                          (iii) address cost or performance roadblocks 
                      to successful commercial use.

    (f) Transmission and Distribution Grid Planning and Operations 
Initiative.--
            (1) In general.--The Secretary shall establish a research, 
        development, and demonstration initiative specifically focused 
        on tools needed to plan, operate, and expand the transmission 
        and distribution grids in the presence of competitive market 
        mechanisms for energy, load demand, customer response, and 
        ancillary services.
            (2) Goals.--The goals of the Initiative shall be--
                    (A)(i) to develop and use a geographically 
                distributed center, consisting of institutions of higher 
                education, and National Laboratories, with expertise and 
                facilities to develop the underlying theory and software 
                for power system application; and
                    (ii) to ensure commercial development in partnership 
                with software vendors and utilities;
                    (B) to provide technical leadership in engineering 
                and economic analysis for the reliability and efficiency 
                of power systems planning and operations in the presence 
                of competitive markets for electricity;
                    (C) to model, simulate, and experiment with new 
                market mechanisms and operating practices to understand 
                and optimize those new methods before actual use; and
                    (D) to provide technical support and technology 
                transfer to electric utilities and other participants in 
                the domestic electric industry and marketplace.

    (g) High-voltage <<NOTE: Grants.>> Transmission Lines.--As part of 
the program described in subsection (a), the Secretary shall award a 
grant to a university research program to design and test, in 
consultation with the Tennessee Valley Authority, state-of-the-art 
optimization

[[Page 119 STAT. 868]]

techniques for power flow through existing high voltage transmission 
lines.

                      Subtitle C--Renewable Energy

SEC. 931. <<NOTE: 42 USC 16231.>> RENEWABLE ENERGY.

    (a) In General.--
            (1) Objectives.--The Secretary shall conduct programs of 
        renewable energy research, development, demonstration, and 
        commercial application, including activities described in this 
        subtitle. Such programs shall take into consideration the 
        following objectives:
                    (A) Increasing the conversion efficiency of all 
                forms of renewable energy through improved technologies.
                    (B) Decreasing the cost of renewable energy 
                generation and delivery.
                    (C) Promoting the diversity of the energy supply.
                    (D) Decreasing the dependence of the United States 
                on foreign energy supplies.
                    (E) Improving United States energy security.
                    (F) Decreasing the environmental impact of energy-
                related activities.
                    (G) Increasing the export of renewable generation 
                equipment from the United States.
            (2) Programs.--
                    (A) Solar energy.--The Secretary shall conduct a 
                program of research, development, demonstration, and 
                commercial application for solar energy, including--
                          (i) photovoltaics;
                          (ii) solar hot water and solar space heating;
                          (iii) concentrating solar power;
                          (iv) lighting systems that integrate sunlight 
                      and electrical lighting in complement to each 
                      other in common lighting fixtures for the purpose 
                      of improving energy efficiency;
                          (v) manufacturability of low cost, high 
                      quality solar systems; and
                          (vi) development of products that can be 
                      easily integrated into new and existing buildings.
                    (B) Wind energy.--The Secretary shall conduct a 
                program of research, development, demonstration, and 
                commercial application for wind energy, including--
                          (i) low speed wind energy;
                          (ii) offshore wind energy;
                          (iii) testing and verification (including 
                      construction and operation of a research and 
                      testing facility capable of testing wind 
                      turbines); and
                          (iv) distributed wind energy generation.
                    (C) Geothermal.--The Secretary shall conduct a 
                program of research, development, demonstration, and 
                commercial application for geothermal energy. The 
                program shall focus on developing improved technologies 
                for reducing the costs of geothermal energy 
                installations, including technologies for--
                          (i) improving detection of geothermal 
                      resources;
                          (ii) decreasing drilling costs;

[[Page 119 STAT. 869]]

                          (iii) decreasing maintenance costs through 
                      improved materials;
                          (iv) increasing the potential for other 
                      revenue sources, such as mineral production; and
                          (v) increasing the understanding of reservoir 
                      life cycle and management.
                    (D) Hydropower.--The Secretary shall conduct a 
                program of research, development, demonstration, and 
                commercial application for cost competitive technologies 
                that enable the development of new and incremental 
                hydropower capacity, adding to the diversity of the 
                energy supply of the United States, including:
                          (i) Fish-friendly large turbines.
                          (ii) Advanced technologies to enhance 
                      environmental performance and yield greater energy 
                      efficiencies.
                    (E) Miscellaneous projects.--The Secretary shall 
                conduct research, development, demonstration, and 
                commercial application programs for--
                          (i) ocean energy, including wave energy;
                          (ii) the combined use of renewable energy 
                      technologies with one another and with other 
                      energy technologies, including the combined use of 
                      wind power and coal gasification technologies;
                          (iii) renewable energy technologies for 
                      cogeneration of hydrogen and electricity; and
                          (iv) kinetic hydro turbines.

    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out renewable energy research, 
development, demonstration, and commercial application activities, 
including activities authorized under this subtitle--
            (1) $632,000,000 for fiscal year 2007;
            (2) $743,000,000 for fiscal year 2008; and
            (3) $852,000,000 for fiscal year 2009.

    (c) Bioenergy.--From the amounts authorized under subsection (b), 
there are authorized to be appropriated to carry out section 932--
            (1) $213,000,000 for fiscal year 2007, of which $100,000,000 
        shall be for section 932(d);
            (2) $251,000,000 for fiscal year 2008, of which $125,000,000 
        shall be for section 932(d); and
            (3) $274,000,000 for fiscal year 2009, of which $150,000,000 
        shall be for section 932(d).

    (d) Solar Power.--From amounts authorized under subsection (b), 
there is authorized to be appropriated to carry out activities under 
subsection (a)(2)(A)--
            (1) $140,000,000 for fiscal year 2007, of which $40,000,000 
        shall be for activities under section 935;
            (2) $200,000,000 for fiscal year 2008, of which $50,000,000 
        shall be for activities under section 935; and
            (3) $250,000,000 for fiscal year 2009, of which $50,000,000 
        shall be for activities under section 935.

    (e) Administration.--Of the funds authorized under subsection (c), 
not less than $5,000,000 for each fiscal year shall be made available 
for grants to--
            (1) part B institutions;

[[Page 119 STAT. 870]]

            (2) Tribal Colleges or Universities (as defined in section 
        316(b) of the Higher Education Act of 1965 (20 U.S.C. 
        1059c(b))); and
            (3) Hispanic-serving institutions.

    (f) Rural Demonstration Projects.--In carrying out this section, the 
Secretary, in consultation with the Secretary of Agriculture, shall 
demonstrate the use of renewable energy technologies to assist in 
delivering electricity to rural and remote locations including --
            (1) advanced wind power technology, including combined use 
        with coal gasification;
            (2) biomass; and
            (3) geothermal energy systems.

    (g) Analysis and Evaluation.--
            (1) In general.--The Secretary shall conduct analysis and 
        evaluation in support of the renewable energy programs under 
        this subtitle. These activities shall be used to guide budget 
        and program decisions, and shall include--
                    (A) economic and technical analysis of renewable 
                energy potential, including resource assessment;
                    (B) analysis of past program performance, both in 
                terms of technical advances and in market introduction 
                of renewable energy; and
                    (C) any other analysis or evaluation that the 
                Secretary considers appropriate.
            (2) Funding.--The Secretary may designate up to 1 percent of 
        the funds appropriated for carrying out this subtitle for 
        analysis and evaluation activities under this subsection.

SEC. 932. <<NOTE: 42 USC 16232.>> BIOENERGY PROGRAM.

    (a) Definitions.--In this section:
            (1) Biomass.--The term ``biomass'' means--
                    (A) any organic material grown for the purpose of 
                being converted to energy;
                    (B) any organic byproduct of agriculture (including 
                wastes from food production and processing) that can be 
                converted into energy; or
                    (C) any waste material that can be converted to 
                energy, is segregated from other waste materials, and is 
                derived from--
                          (i) any of the following forest-related 
                      resources: mill residues, precommercial thinnings, 
                      slash, brush, or otherwise nonmerchantable 
                      material; or
                          (ii) wood waste materials, including waste 
                      pallets, crates, dunnage, manufacturing and 
                      construction wood wastes (other than pressure-
                      treated, chemically-treated, or painted wood 
                      wastes), and landscape or right-of-way tree 
                      trimmings, but not including municipal solid 
                      waste, gas derived from the biodegradation of 
                      municipal solid waste, or paper that is commonly 
                      recycled.
            (2) Lignocellulosic feedstock.--The term ``lignocellulosic 
        feedstock'' means any portion of a plant or coproduct from 
        conversion, including crops, trees, forest residues, and 
        agricultural residues not specifically grown for food, including 
        from barley grain, grapeseed, rice bran, rice hulls, rice straw, 
        soybean matter, and sugarcane bagasse.

[[Page 119 STAT. 871]]

    (b) Program.--The Secretary shall conduct a program of research, 
development, demonstration, and commercial application for bioenergy, 
including--
            (1) biopower energy systems;
            (2) biofuels;
            (3) bioproducts;
            (4) integrated biorefineries that may produce biopower, 
        biofuels, and bioproducts;
            (5) cross-cutting research and development in feedstocks; 
        and
            (6) economic analysis.

    (c) Biofuels and Bioproducts.--The goals of the biofuels and 
bioproducts programs shall be to develop, in partnership with industry 
and institutions of higher education--
            (1) advanced biochemical and thermochemical conversion 
        technologies capable of making fuels from lignocellulosic 
        feedstocks that are price-competitive with gasoline or diesel in 
        either internal combustion engines or fuel cell-powered 
        vehicles;
            (2) advanced biotechnology processes capable of making 
        biofuels and bioproducts with emphasis on development of 
        biorefinery technologies using enzyme-based processing systems;
            (3) advanced biotechnology processes capable of increasing 
        energy production from lignocellulosic feedstocks, with emphasis 
        on reducing the dependence of industry on fossil fuels in 
        manufacturing facilities; and
            (4) other advanced processes that will enable the 
        development of cost-effective bioproducts, including biofuels.

    (d) Integrated Biorefinery Demonstration Projects.--
            (1) In general.--The Secretary shall carry out a program to 
        demonstrate the commercial application of integrated 
        biorefineries. The Secretary shall ensure geographical 
        distribution of biorefinery demonstrations under this 
        subsection. The Secretary shall not provide more than 
        $100,000,000 under this subsection for any single biorefinery 
        demonstration. In making awards under this subsection, the 
        Secretary shall encourage--
                    (A) the demonstration of a wide variety of 
                lignocellulosic feedstocks;
                    (B) the commercial application of biomass 
                technologies for a variety of uses, including--
                          (i) liquid transportation fuels;
                          (ii) high-value biobased chemicals;
                          (iii) substitutes for petroleum-based 
                      feedstocks and products; and
                          (iv) energy in the form of electricity or 
                      useful heat; and
                    (C) the demonstration of the collection and 
                treatment of a variety of biomass feedstocks.
            (2) Proposals.--Not <<NOTE: Deadline.>> later than 6 months 
        after the date of enactment of this Act, the Secretary shall 
        solicit proposals for demonstration of advanced biorefineries. 
        The Secretary shall select only proposals that--
                    (A) demonstrate that the project will be able to 
                operate profitably without direct Federal subsidy after 
                initial construction costs are paid; and
                    (B) enable the biorefinery to be easily replicated.

    (e) University Biodiesel Program.--The Secretary shall establish a 
demonstration program to determine the feasibility of

[[Page 119 STAT. 872]]

the operation of diesel electric power generators, using biodiesel fuels 
with ratings as high as B100, at electric generation facilities owned by 
institutions of higher education. The program shall examine--
            (1) heat rates of diesel fuels with large quantities of 
        cellulosic content;
            (2) the reliability of operation of various fuel blends;
            (3) performance in cold or freezing weather;
            (4) stability of fuel after extended storage; and
            (5) other criteria, as determined by the Secretary.

SEC. 933. <<NOTE: 42 USC 16233.>> LOW-COST RENEWABLE HYDROGEN AND 
            INFRASTRUCTURE FOR VEHICLE PROPULSION.

    The Secretary shall--
            (1) establish a research, development, and demonstration 
        program to determine the feasibility of using hydrogen 
        propulsion in light-weight vehicles and the integration of the 
        associated hydrogen production infrastructure using off-the-
        shelf components; and
            (2) identify universities and institutions that--
                    (A) have expertise in researching and testing 
                vehicles fueled by hydrogen, methane, and other fuels;
                    (B) have expertise in integrating off-the-shelf 
                components to minimize cost; and
                    (C) within 2 years can test a vehicle based on an 
                existing commercially available platform with a curb 
                weight of not less than 2,000 pounds before 
                modifications, that--
                          (i) operates solely on hydrogen;
                          (ii) qualifies as a light-duty passenger 
                      vehicle; and
                          (iii) uses hydrogen produced from water using 
                      only solar energy.

SEC. 934. <<NOTE: 42 USC 16234.>> CONCENTRATING SOLAR POWER RESEARCH 
            PROGRAM.

    (a) In General.--The Secretary shall conduct a program of research 
and development to evaluate the potential for concentrating solar power 
for hydrogen production, including cogeneration approaches for both 
hydrogen and electricity.
    (b) Administration.--The program shall take advantage of existing 
facilities to the extent practicable and shall include--
            (1) development of optimized technologies that are common to 
        both electricity and hydrogen production;
            (2) evaluation of thermochemical cycles for hydrogen 
        production at the temperatures attainable with concentrating 
        solar power;
            (3) evaluation of materials issues for the thermochemical 
        cycles described in paragraph (2);
            (4) cogeneration of solar thermal electric power and photo-
        synthetic-based hydrogen production;
            (5) system architectures and economics studies; and
            (6) coordination with activities under the Next Generation 
        Nuclear Plant Project established under subtitle C of title VI 
        on high temperature materials, thermochemical cycles, and 
        economic issues.

    (c) Assessment.--In carrying out the program under this section, the 
Secretary shall--
            (1) assess conflicting guidance on the economic potential of 
        concentrating solar power for electricity production received 
        from the National Research Council in the report entitled

[[Page 119 STAT. 873]]

        ``Renewable Power Pathways: A Review of the U.S. Department of 
        Energy's Renewable Energy Programs'' and dated 2000 and 
        subsequent reviews of that report funded by the Department; and
            (2) provide an assessment of the potential impact of 
        technology used to concentrate solar power for electricity 
        before, or concurrent with, submission of the budget for fiscal 
        year 2008.

    (d) Report.--Not later than 5 years after the date of enactment of 
this Act, the Secretary shall provide to Congress a report on the 
economic and technical potential for electricity or hydrogen production, 
with or without cogeneration, with concentrating solar power, including 
the economic and technical feasibility of potential construction of a 
pilot demonstration facility suitable for commercial production of 
electricity or hydrogen from concentrating solar power.

SEC. 935. <<NOTE: 42 USC 16235.>> RENEWABLE ENERGY IN PUBLIC BUILDINGS.

    (a) Demonstration and Technology Transfer Program.--The Secretary 
shall establish a program for the demonstration of innovative 
technologies for solar and other renewable energy sources in buildings 
owned or operated by a State or local government, and for the 
dissemination of information resulting from such demonstration to 
interested parties.
    (b) Limit on Federal Funding.--Notwithstanding section 988, the 
Secretary shall provide under this section no more than 40 percent of 
the incremental costs of the solar or other renewable energy source 
project funded.
    (c) Requirements.--As part of the application for awards under this 
section, the Secretary shall require all applicants---
            (1) to demonstrate a continuing commitment to the use of 
        solar and other renewable energy sources in buildings they own 
        or operate; and
            (2) to state how they expect any award to further their 
        transition to the significant use of renewable energy.

   Subtitle D--Agricultural Biomass Research and Development Programs

SEC. 941. <<NOTE: 7 USC 8101 note.>> AMENDMENTS TO THE BIOMASS RESEARCH 
            AND DEVELOPMENT ACT OF 2000.

    (a) Definitions.--Section 303 of the Biomass Research and 
Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 note) is 
amended--
            (1) by striking paragraphs (2), (9), and (10);
            (2) by redesignating paragraphs (3), (4), (5), (6), (7), and 
        (8) as paragraphs (4), (5), (7), (8), (9), and (10), 
        respectively;
            (3) by inserting after paragraph (1) the following:
            ``(2) Biobased fuel.--The term `biobased fuel' means any 
        transportation fuel produced from biomass.
            ``(3) Biobased product.--The term `biobased product' means 
        an industrial product (including chemicals, materials, and 
        polymers) produced from biomass, or a commercial or industrial 
        product (including animal feed and electric power) derived in 
        connection with the conversion of biomass to fuel.'';
            (4) by inserting after paragraph (5) (as redesignated by 
        paragraph (2)) the following:

[[Page 119 STAT. 874]]

            ``(6) Demonstration.--The term `demonstration' means 
        demonstration of technology in a pilot plant or semi-works scale 
        facility.''; and
            (5) by striking paragraph (9) (as redesignated by paragraph 
        (2)) and inserting the following:
            ``(9) National laboratory.--The term `National Laboratory' 
        has the meaning given that term in section 2 of the Energy 
        Policy Act of 2005.''

    (b) Cooperation and Coordination in Biomass Research and 
Development.--Section 304 of the Biomass Research and Development Act of 
2000 (Public Law 106-224; 7 U.S.C. 8101 note) is amended--
            (1) in subsections (a) and (d), by striking ``industrial 
        products'' each place it appears and inserting ``fuels and 
        biobased products'';
            (2) by striking subsections (b) and (c); and
            (3) by redesignating subsection (d) as subsection (b).

    (c) Biomass Research and Development Board.--Section 305 of the 
Biomass Research and Development Act of 2000 (Public Law 106-224; 7 
U.S.C. 8101 note) is amended--
            (1) in subsections (a) and (c), by striking ``industrial 
        products'' each place it appears and inserting ``fuels and 
        biobased products'';
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking ``304(d)(1)(B)'' 
                and inserting ``304(b)(1)(B)''; and
                    (B) in paragraph (2), by striking ``304(d)(1)(A)'' 
                and inserting ``304(b)(1)(A)''; and
            (3) in subsection (c)--
                    (A) in paragraph (1)(B), by striking ``and'' at the 
                end;
                    (B) in paragraph (2), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(3) ensure that--
                    ``(A) solicitations are open and competitive with 
                awards made annually; and
                    ``(B) objectives and evaluation criteria of the 
                solicitations are clearly stated and minimally 
                prescriptive, with no areas of special interest; and
            ``(4) ensure that the panel of scientific and technical 
        peers assembled under section 307(g)(1)(C) to review proposals 
        is composed predominantly of independent experts selected from 
        outside the Departments of Agriculture and Energy.''.

    (d) Biomass Research and Development Technical Advisory Committee.--
Section 306 of the Biomass Research and Development Act of 2000 (Public 
Law 106-224; 7 U.S.C. 8101 note) is amended--
            (1) in subsection (b)(1)--
                    (A) in subparagraph (A), by striking ``biobased 
                industrial products'' and inserting ``biofuels'';
                    (B) by redesignating subparagraphs (B) through (J) 
                as subparagraphs (C) through (K), respectively;
                    (C) by inserting after subparagraph (A) the 
                following:
                    ``(B) an individual affiliated with the biobased 
                industrial and commercial products industry;'';

[[Page 119 STAT. 875]]

                    (D) in subparagraph (F) (as redesignated by 
                subparagraph (B)) by striking ``an individual has'' and 
                inserting ``2 individuals have'';
                    (E) in subparagraphs (C), (D), (G), and (I) (as 
                redesignated by subparagraph (B)) by striking 
                ``industrial products'' each place it appears and 
                inserting ``fuels and biobased products''; and
                    (F) in subparagraph (H) (as redesignated by 
                subparagraph (B)), by inserting ``and environmental'' 
                before ``analysis'';
            (2) in subsection (c)(2)--
                    (A) in subparagraph (A), by striking ``goals'' and 
                inserting ``objectives, purposes, and considerations'';
                    (B) by redesignating subparagraphs (B) and (C) as 
                subparagraphs (C) and (D), respectively;
                    (C) by inserting after subparagraph (A) the 
                following:
                    ``(B) solicitations are open and competitive with 
                awards made annually and that objectives and evaluation 
                criteria of the solicitations are clearly stated and 
                minimally prescriptive, with no areas of special 
                interest;''; and
                    (D) in subparagraph (C) (as redesignated by 
                subparagraph (B)) by inserting ``predominantly from 
                outside the Departments of Agriculture and Energy'' 
                after ``technical peers''.

    (e) Biomass Research and Development Initiative.--Section 307 of the 
Biomass Research and Development Act of 2000 (Public Law 106-224; 7 
U.S.C. 8101 note) is amended--
            (1) in subsection (a), by striking ``research on biobased 
        industrial products'' and inserting ``research on, and 
        development and demonstration of, biobased fuels and biobased 
        products, and the methods, practices and technologies, for their 
        production''; and
            (2) by striking subsections (b) through (e) and inserting 
        the following:

    ``(b) Objectives.--The objectives of the Initiative are to develop--
            ``(1) technologies and processes necessary for abundant 
        commercial production of biobased fuels at prices competitive 
        with fossil fuels;
            ``(2) high-value biobased products--
                    ``(A) to enhance the economic viability of biobased 
                fuels and power; and
                    ``(B) as substitutes for petroleum-based feedstocks 
                and products; and
            ``(3) a diversity of sustainable domestic sources of biomass 
        for conversion to biobased fuels and biobased products.

    ``(c) Purposes.--The purposes of the Initiative are--
            ``(1) to increase the energy security of the United States;
            ``(2) to create jobs and enhance the economic development of 
        the rural economy;
            ``(3) to enhance the environment and public health; and
            ``(4) to diversify markets for raw agricultural and forestry 
        products.

    ``(d) Technical Areas.--To advance the objectives and purposes of 
the Initiative, the Secretary of Agriculture and the Secretary

[[Page 119 STAT. 876]]

of Energy, in consultation with the Administrator of the Environmental 
Protection Agency and heads of other appropriate departments and 
agencies (referred to in this section as the `Secretaries'), shall 
direct research and development toward--
            ``(1) feedstock production through the development of crops 
        and cropping systems relevant to production of raw materials for 
        conversion to biobased fuels and biobased products, including--
                    ``(A) development of advanced and dedicated crops 
                with desired features, including enhanced productivity, 
                broader site range, low requirements for chemical 
                inputs, and enhanced processing;
                    ``(B) advanced crop production methods to achieve 
                the features described in subparagraph (A);
                    ``(C) feedstock harvest, handling, transport, and 
                storage; and
                    ``(D) strategies for integrating feedstock 
                production into existing managed land;
            ``(2) overcoming recalcitrance of cellulosic biomass through 
        developing technologies for converting cellulosic biomass into 
        intermediates that can subsequently be converted into biobased 
        fuels and biobased products, including--
                    ``(A) pretreatment in combination with enzymatic or 
                microbial hydrolysis; and
                    ``(B) thermochemical approaches, including 
                gasification and pyrolysis;
            ``(3) product diversification through technologies relevant 
        to production of a range of biobased products (including 
        chemicals, animal feeds, and cogenerated power) that eventually 
        can increase the feasibility of fuel production in a 
        biorefinery, including--
                    ``(A) catalytic processing, including thermochemical 
                fuel production;
                    ``(B) metabolic engineering, enzyme engineering, and 
                fermentation systems for biological production of 
                desired products or cogeneration of power;
                    ``(C) product recovery;
                    ``(D) power production technologies; and
                    ``(E) integration into existing biomass processing 
                facilities, including starch ethanol plants, paper 
                mills, and power plants; and
            ``(4) analysis that provides strategic guidance for the 
        application of biomass technologies in accordance with 
        realization of improved sustainability and environmental 
        quality, cost effectiveness, security, and rural economic 
        development, usually featuring system-wide approaches.

    ``(e) Additional Considerations.--Within the technical areas 
described in subsection (d), and in addition to advancing the purposes 
described in subsection (c) and the objectives described in subsection 
(b), the Secretaries shall support research and development--
            ``(1) to create continuously expanding opportunities for 
        participants in existing biofuels production by seeking 
        synergies and continuity with current technologies and 
        practices, such as the use of dried distillers grains as a 
        bridge feedstock;
            ``(2) to maximize the environmental, economic, and social 
        benefits of production of biobased fuels and biobased products

[[Page 119 STAT. 877]]

        on a large scale through life-cycle economic and environmental 
        analysis and other means; and
            ``(3) to assess the potential of Federal land and land 
        management programs as feedstock resources for biobased fuels 
        and biobased products, consistent with the integrity of soil and 
        water resources and with other environmental considerations.

    ``(f) Eligible Entities.--To be eligible for a grant, contract, or 
assistance under this section, an applicant shall be--
            ``(1) an institution of higher education;
            ``(2) a National Laboratory;
            ``(3) a Federal research agency;
            ``(4) a State research agency;
            ``(5) a private sector entity;
            ``(6) a nonprofit organization; or
            ``(7) a consortium of two or more entities described in 
        paragraphs (1) through (6).

    ``(g) Administration.--
            ``(1) In general.--After consultation with the Board, the 
        points of contact shall--
                    ``(A) publish annually one or more joint requests 
                for proposals for grants, contracts, and assistance 
                under this section;
                    ``(B) require that grants, contracts, and assistance 
                under this section be awarded competitively, on the 
                basis of merit, after the establishment of procedures 
                that provide for scientific peer review by an 
                independent panel of scientific and technical peers; and
                    ``(C) give some preference to applications that--
                          ``(i) involve a consortia of experts from 
                      multiple institutions;
                          ``(ii) encourage the integration of 
                      disciplines and application of the best technical 
                      resources; and
                          ``(iii) increase the geographic diversity of 
                      demonstration projects.
            ``(2) Distribution of funding by technical area.--Of the 
        funds authorized to be appropriated for activities described in 
        this section, funds shall be distributed for each of fiscal 
        years 2007 through 2010 so as to achieve an approximate 
        distribution of--
                    ``(A) 20 percent of the funds to carry out 
                activities for feedstock production under subsection 
                (d)(1);
                    ``(B) 45 percent of the funds to carry out 
                activities for overcoming recalcitrance of cellulosic 
                biomass under subsection (d)(2);
                    ``(C) 30 percent of the funds to carry out 
                activities for product diversification under subsection 
                (d)(3); and
                    ``(D) 5 percent of the funds to carry out activities 
                for strategic guidance under subsection (d)(4).
            ``(3) Distribution of funding within each technical area.--
        Within each technical area described in paragraphs (1) through 
        (3) of subsection (d), funds shall be distributed for each of 
        fiscal years 2007 through 2010 so as to achieve an approximate 
        distribution of--
                    ``(A) 15 percent of the funds for applied 
                fundamentals;
                    ``(B) 35 percent of the funds for innovation; and
                    ``(C) 50 percent of the funds for demonstration.

[[Page 119 STAT. 878]]

            ``(4) Matching funds.--
                    ``(A) In general.--A minimum 20 percent funding 
                match shall be required for demonstration projects under 
                this title.
                    ``(B) Commercial applications.--A minimum of 50 
                percent funding match shall be required for commercial 
                application projects under this title.
            ``(5) Technology and information transfer to agricultural 
        users.--The Administrator of the Cooperative State Research, 
        Education, and Extension Service and the Chief of the Natural 
        Resources Conservation Service shall ensure that applicable 
        research results and technologies from the Initiative are 
        adapted, made available, and disseminated through those 
        services, as appropriate.''.

    (f) Annual Reports.--Section 309 of the Biomass Research and 
Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 note) is 
amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)--
                          (i) in subparagraph (A), by striking 
                      ``purposes described in section 307(b)'' and 
                      inserting ``objectives, purposes, and additional 
                      considerations described in subsections (b) 
                      through (e) of section 307'';
                          (ii) in subparagraph (B), by striking ``and'' 
                      at the end;
                          (iii) by redesignating subparagraph (C) as 
                      subparagraph (D); and
                          (iv) by inserting after subparagraph (B) the 
                      following:
                    ``(C) achieves the distribution of funds described 
                in paragraphs (2) and (3) of section 307(g); and''; and
                    (B) in paragraph (2), by striking ``industrial 
                products'' and inserting ``fuels and biobased 
                products''; and
            (2) by adding at the end the following:

    ``(c) Updates.--The Secretary and the Secretary of Energy shall 
update the Vision and Roadmap documents prepared for Federal biomass 
research and development activities.''.
    (g) Authorization of Appropriations.--Section 310(b) of the Biomass 
Research and Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 
note) is amended by striking ``title $54,000,000 for each of fiscal 
years 2002 through 2007'' and inserting ``title $200,000,000 for each of 
fiscal years 2006 through 2015''.
    (h) Repeal of Sunset Provision.--Section 311 of the Biomass Research 
and Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 note) is 
repealed.

SEC. 942. <<NOTE: 42 USC 16251.>> PRODUCTION INCENTIVES FOR CELLULOSIC 
            BIOFUELS.

    (a) Purpose.--The purpose of this section is to--
            (1) accelerate deployment and commercialization of biofuels;
            (2) deliver the first 1,000,000,000 gallons in annual 
        cellulosic biofuels production by 2015;
            (3) ensure biofuels produced after 2015 are cost competitive 
        with gasoline and diesel; and
            (4) ensure that small feedstock producers and rural small 
        businesses are full participants in the development of the 
        cellulosic biofuels industry.

[[Page 119 STAT. 879]]

    (b) Definitions.--In this section:
            (1) Cellulosic biofuels.--The term ``cellulosic biofuels'' 
        means any fuel that is produced from cellulosic feedstocks.
            (2) Eligible entity.--The term ``eligible entity'' means a 
        producer of fuel from cellulosic biofuels the production 
        facility of which--
                    (A) is located in the United States;
                    (B) meets all applicable Federal and State 
                permitting requirements; and
                    (C) meets any financial criteria established by the 
                Secretary.

    (c) Program.--
            (1) Establishment.--The Secretary, in consultation with the 
        Secretary of Agriculture, the Secretary of Defense, and the 
        Administrator of the Environmental Protection Agency, shall 
        establish an incentive program for the production of cellulosic 
        biofuels.
            (2) Basis of incentives.--Under the program, the Secretary 
        shall award production incentives on a per gallon basis of 
        cellulosic biofuels from eligible entities, through--
                    (A) set payments per gallon of cellulosic biofuels 
                produced in an amount determined by the Secretary, until 
                initiation of the first reverse auction; and
                    (B) reverse auction thereafter.
            (3) First reverse auction.--The <<NOTE: Deadlines.>> first 
        reverse auction shall be held on the earlier of--
                    (A) not later than 1 year after the first year of 
                annual production in the United States of 100,000,000 
                gallons of cellulosic biofuels, as determined by the 
                Secretary; or
                    (B) not later than 3 years after the date of 
                enactment of this Act.
            (4) Reverse auction procedure.--
                    (A) In general.--On initiation of the first reverse 
                auction, and each year thereafter until the earlier of 
                the first year of annual production in the United States 
                of 1,000,000,000 gallons of cellulosic biofuels, as 
                determined by the Secretary, or 10 years after the date 
                of enactment of this Act, the Secretary shall conduct a 
                reverse auction at which--
                          (i) the Secretary shall solicit bids from 
                      eligible entities;
                          (ii) eligible entities shall submit--
                                    (I) a desired level of production 
                                incentive on a per gallon basis; and
                                    (II) an estimated annual production 
                                amount in gallons; and
                          (iii) the Secretary shall issue awards for the 
                      production amount submitted, beginning with the 
                      eligible entity submitting the bid for the lowest 
                      level of production incentive on a per gallon 
                      basis and meeting such other criteria as are 
                      established by the Secretary, until the amount of 
                      funds available for the reverse auction is 
                      committed.
                    (B) Amount of incentive received.--An eligible 
                entity selected by the Secretary through a reverse 
                auction shall receive the amount of performance 
                incentive

[[Page 119 STAT. 880]]

                requested in the auction for each gallon produced and 
                sold by the entity during the first 6 years of 
                operation.
                    (C) Commencement 
                of <<NOTE: Deadline. Contracts.>> production of 
                cellulosic biofuels.--As a condition of the receipt of 
                an award under this section, an eligible entity shall 
                enter into an agreement with the Secretary under which 
                the eligible entity agrees to begin production of 
                cellulosic biofuels not later than 3 years after the 
                date of the reverse auction in which the eligible entity 
                participates.

    (d) Limitations.--Awards under this section shall be limited to--
            (1) a per gallon amount determined by the Secretary during 
        the first 4 years of the program;
            (2) a declining per gallon cap over the remaining lifetime 
        of the program, to be established by the Secretary so that 
        cellulosic biofuels produced after the first year of annual 
        cellulosic biofuels production in the United States in excess of 
        1,000,000,000 gallons are cost competitive with gasoline and 
        diesel;
            (3) not more than 25 percent of the funds committed within 
        each reverse auction to any 1 project;
            (4) not more than $100,000,000 in any 1 year; and
            (5) not more than $1,000,000,000 over the lifetime of the 
        program.

    (e) Priority.--In selecting a project under the program, the 
Secretary shall give priority to projects that--
            (1) demonstrate outstanding potential for local and regional 
        economic development;
            (2) include agricultural producers or cooperatives of 
        agricultural producers as equity partners in the ventures; and
            (3) have a strategic agreement in place to fairly reward 
        feedstock suppliers.

    (f) Authorizations of Appropriations.--There is authorized to be 
appropriated to carry out this section $250,000,000.

SEC. 943. PROCUREMENT OF BIOBASED PRODUCTS.

    (a) Federal Procurement.--
            (1) Definition of procuring agency.--Section 9001 of the 
        Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8101) 
        is amended--
                    (A) by redesignating paragraphs (4), (5), and (6) as 
                paragraphs (5), (6), and (7), respectively; and
                    (B) by inserting after paragraph (3) the following:
            ``(4) Procuring agency.--The term `procuring agency' means--
                    ``(A) any Federal agency that is using Federal funds 
                for procurement; or
                    ``(B) any person contracting with any Federal agency 
                with respect to work performed under the contract.''.
            (2) Procurement.--Section 9002 of the Farm Security and 
        Rural Investment Act of 2002 (7 U.S.C. 8102) is amended--
                    (A) by striking ``Federal agency'' each place it 
                appears (other than in subsections (f) and (g)) and 
                inserting ``procuring agency'';
                    (B) in subsection (c)(2)--
                          (i) by striking ``(2)'' and all that follows 
                      through ``Notwithstanding'' and inserting the 
                      following:

[[Page 119 STAT. 881]]

            ``(2) Flexibility.--Notwithstanding'';
                          (ii) by striking ``an agency'' and inserting 
                      ``a procuring agency''; and
                          (iii) by striking ``the agency'' and inserting 
                      ``the procuring agency'';
                    (C) in subsection (d), by striking ``procured by 
                Federal agencies'' and inserting ``procured by procuring 
                agencies''; and
                    (D) in subsection (f), by striking ``Federal 
                agencies'' and inserting ``procuring agencies''.

    (b) Capitol Complex Procurement.--Section 9002 of the Farm Security 
and Rural Investment Act of 2002 (7 U.S.C. 8102) (as amended by 
subsection (a)(2)) is amended--
            (1) by redesignating subsection (j) as subsection (k); and
            (2) by inserting after subsection (i) the following:

    ``(j) Inclusion.--Not <<NOTE: Deadline. Procedures.>> later than 90 
days after the date of enactment of the Energy Policy Act of 2005, the 
Architect of the Capitol, the Sergeant at Arms of the Senate, and the 
Chief Administrative Officer of the House of Representatives shall 
establish procedures that apply the requirements of this section to 
procurement for the Capitol Complex.''.

    (c) <<NOTE: 42 USC 16252.>> Education.--
            (1) In general.--The Architect of the Capitol shall 
        establish in the Capitol Complex a program of public education 
        regarding use by the Architect of the Capitol of biobased 
        products.
            (2) Purposes.--The purposes of the program shall be--
                    (A) to establish the Capitol Complex as a showcase 
                for the existence and benefits of biobased products; and
                    (B) to provide access to further information on 
                biobased products to occupants and visitors.

    (d) Procedure.--Requirements <<NOTE: 7 USC 8102 note.>> issued under 
the amendments made by subsection (b) shall be made in accordance with 
directives issued by the Committee on Rules and Administration of the 
Senate and the Committee on House Administration of the House of 
Representatives.

SEC. 944. <<NOTE: 42 USC 16253.>> SMALL BUSINESS BIOPRODUCT MARKETING 
            AND CERTIFICATION GRANTS.

    (a) In General.--Using amounts made available under subsection (g), 
the Secretary of Agriculture (referred to in this section as the 
``Secretary'') shall make available on a competitive basis grants to 
eligible entities described in subsection (b) for the biobased product 
marketing and certification purposes described in subsection (c).
    (b) Eligible Entities.--
            (1) In general.--An entity eligible for a grant under this 
        section is any manufacturer of biobased products that--
                    (A) proposes to use the grant for the biobased 
                product marketing and certification purposes described 
                in subsection (c); and
                    (B) has not previously received a grant under this 
                section.
            (2) Preference.--In making grants under this section, the 
        Secretary shall provide a preference to an eligible entity that 
        has fewer than 50 employees.

[[Page 119 STAT. 882]]

    (c) Biobased Product Marketing and Certification Grant Purposes.--A 
grant made under this section shall be used--
            (1) to provide working capital for marketing of biobased 
        products; and
            (2) to provide for the certification of biobased products 
        to--
                    (A) qualify for the label described in section 
                9002(h)(1) of the Farm Security and Rural Investment Act 
                of 2002 (7 U.S.C. 8102(h)(1)); or
                    (B) meet other biobased standards determined 
                appropriate by the Secretary.

    (d) Matching Funds.--
            (1) In general.--Grant recipients shall provide matching 
        non-Federal funds equal to the amount of the grant received.
            (2) Expenditure.--Matching funds shall be expended in 
        advance of grant funding, so that for every dollar of grant that 
        is advanced, an equal amount of matching funds shall have been 
        funded prior to submitting the request for reimbursement.

    (e) Amount.--A grant made under this section shall not exceed 
$100,000.
    (f) Administration.--The Secretary shall establish such 
administrative requirements for grants under this section, including 
requirements for applications for the grants, as the Secretary considers 
appropriate.
    (g) Authorizations of Appropriations.--There are authorized to be 
appropriated to make grants under this section--
            (1) $1,000,000 for fiscal year 2006; and
            (2) such sums as are necessary for each of fiscal years 2007 
        through 2015.

SEC. 945. <<NOTE: 42 USC 16254.>> REGIONAL BIOECONOMY DEVELOPMENT 
            GRANTS.

    (a) In General.--Using amounts made available under subsection (g), 
the Secretary of Agriculture (referred to in this section as the 
``Secretary'') shall make available on a competitive basis grants to 
eligible entities described in subsection (b) for the purposes described 
in subsection (c).
    (b) Eligible Entities.--An entity eligible for a grant under this 
section is any regional bioeconomy development association, agricultural 
or energy trade association, or Land Grant institution that--
            (1) proposes to use the grant for the purposes described in 
        subsection (c); and
            (2) has not previously received a grant under this section.

    (c) Regional Bioeconomy Development Association Grant Purposes.--A 
grant made under this section shall be used to support and promote the 
growth and development of the bioeconomy within the region served by the 
eligible entity, through coordination, education, outreach, and other 
endeavors by the eligible entity.
    (d) Matching Funds.--
            (1) In general.--Grant recipients shall provide matching 
        non-Federal funds equal to the amount of the grant received.
            (2) Expenditure.--Matching funds shall be expended in 
        advance of grant funding, so that for every dollar of grant that 
        is advanced, an equal amount of matching funds shall have been 
        funded prior to submitting the request for reimbursement.

[[Page 119 STAT. 883]]

    (e) Administration.--The <<NOTE: Requirements.>> Secretary shall 
establish such administrative requirements for grants under this 
section, including requirements for applications for the grants, as the 
Secretary considers appropriate.

    (f) Amount.--A grant made under this section shall not exceed 
$500,000.
    (g) Authorizations of Appropriations.--There are authorized to be 
appropriated to make grants under this section--
            (1) $1,000,000 for fiscal year 2006; and
            (2) such sums as are necessary for each of fiscal years 2007 
        through 2015.

SEC. 946. <<NOTE: 42 USC 16255.>> PREPROCESSING AND HARVESTING 
            DEMONSTRATION GRANTS.

    (a) In General.--The Secretary of Agriculture (referred to in this 
section as the ``Secretary'') shall make grants available on a 
competitive basis to enterprises owned by agricultural producers, for 
the purposes of demonstrating cost-effective, cellulosic biomass 
innovations in--
            (1) preprocessing of feedstocks, including cleaning, 
        separating and sorting, mixing or blending, and chemical or 
        biochemical treatments, to add value and lower the cost of 
        feedstock processing at a biorefinery; or
            (2) 1-pass or other efficient, multiple crop harvesting 
        techniques.

    (b) Limitations on Grants.--
            (1) Number of grants.--Not more than 5 demonstration 
        projects per fiscal year shall be funded under this section.
            (2) Non-federal cost share.--The non-Federal cost share of a 
        project under this section shall be not less than 20 percent, as 
        determined by the Secretary.

    (c) Condition of Grant.--To be eligible for a grant for a project 
under this section, a recipient of a grant or a participating entity 
shall agree to use the material harvested under the project--
            (1) to produce ethanol; or
            (2) for another energy purpose, such as the generation of 
        heat or electricity.

    (d) Authorization for Appropriations.--There is authorized to be 
appropriated to carry out this section $5,000,000 for each of fiscal 
years 2006 through 2010.

SEC. 947. <<NOTE: 42 USC 16256.>> EDUCATION AND OUTREACH.

    (a) In General.--The Secretary of Agriculture shall establish, 
within the Department of Agriculture or through an independent 
contracting entity, a program of education and outreach on biobased 
fuels and biobased products consisting of--
            (1) training and technical assistance programs for feedstock 
        producers to promote producer ownership, investment, and 
        participation in the operation of processing facilities; and
            (2) public education and outreach to familiarize consumers 
        with the biobased fuels and biobased products.

    (b) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $1,000,000 for each of fiscal 
years 2006 through 2010.

SEC. 948. REPORTS.

    (a) Biobased Product Potential.--Not later than 1 year after the 
date of enactment of this Act, the Secretary of Agriculture

[[Page 119 STAT. 884]]

(referred to in this section as the ``Secretary'') shall submit to the 
Committee on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate a report 
that--
            (1) describes the economic potential for the United States 
        of the widespread production and use of commercial and 
        industrial biobased products through calendar year 2025; and
            (2) as the maximum extent practicable, identifies the 
        economic potential by product area.

    (b) Analysis of Economic Indicators.--Not <<NOTE: Deadline.>> later 
than 2 years after the date of enactment of this Act, the Secretary 
shall submit to Congress an analysis of economic indicators of the 
biobased economy.

                       Subtitle E--Nuclear Energy

SEC. 951. <<NOTE: 42 USC 16271.>> NUCLEAR ENERGY.

    (a) In General.--The Secretary shall conduct programs of civilian 
nuclear energy research, development, demonstration, and commercial 
application, including activities described in this subtitle. Programs 
under this subtitle shall take into consideration the following 
objectives:
            (1) Enhancing nuclear power's viability as part of the 
        United States energy portfolio.
            (2) Providing the technical means to reduce the likelihood 
        of nuclear proliferation.
            (3) Maintaining a cadre of nuclear scientists and engineers.
            (4) Maintaining National Laboratory and university nuclear 
        programs, including their infrastructure.
            (5) Supporting both individual researchers and 
        multidisciplinary teams of researchers to pioneer new approaches 
        in nuclear energy, science, and technology.
            (6) Developing, planning, constructing, acquiring, and 
        operating special equipment and facilities for the use of 
        researchers.
            (7) Supporting technology transfer and other appropriate 
        activities to assist the nuclear energy industry, and other 
        users of nuclear science and engineering, including activities 
        addressing reliability, availability, productivity, component 
        aging, safety, and security of nuclear power plants.
            (8) Reducing the environmental impact of nuclear energy-
        related activities.

    (b) Authorization of Appropriations for Core Programs.--There are 
authorized to be appropriated to the Secretary to carry out nuclear 
energy research, development, demonstration, and commercial application 
activities, including activities authorized under this subtitle, other 
than those described in subsection (c)--
            (1) $330,000,000 for fiscal year 2007;
            (2) $355,000,000 for fiscal year 2008; and
            (3) $495,000,000 for fiscal year 2009.

    (c) Nuclear Infrastructure and Facilities.--There are authorized to 
be appropriated to the Secretary to carry out activities under section 
955--
            (1) $135,000,000 for fiscal year 2007;
            (2) $140,000,000 for fiscal year 2008; and
            (3) $145,000,000 for fiscal year 2009.

[[Page 119 STAT. 885]]

    (d) Allocations.--From amounts authorized under subsection (a), the 
following sums are authorized:
            (1) For activities under section 953--
                    (A) $150,000,000 for fiscal year 2007;
                    (B) $155,000,000 for fiscal year 2008; and
                    (C) $275,000,000 for fiscal year 2009.
            (2) For activities under section 954--
                    (A) $43,600,000 for fiscal year 2007;
                    (B) $50,100,000 for fiscal year 2008; and
                    (C) $56,000,000 for fiscal year 2009.
            (3) For activities under section 957, $6,000,000 for each of 
        fiscal years 2007 through 2009.

    (e) Limitation.--None of the funds authorized under this section may 
be used to decommission the Fast Flux Test Facility.

SEC. 952. <<NOTE: 42 USC 16272.>> NUCLEAR ENERGY RESEARCH PROGRAMS.

    (a) Nuclear Energy Research Initiative.--The Secretary shall carry 
out a Nuclear Energy Research Initiative for research and development 
related to nuclear energy.
    (b) Nuclear Energy Systems Support Program.--The Secretary shall 
carry out a Nuclear Energy Systems Support Program to support research 
and development activities addressing reliability, availability, 
productivity, component aging, safety, and security of existing nuclear 
power plants.
    (c) Nuclear Power 2010 Program.--
            (1) In general.--The Secretary shall carry out a Nuclear 
        Power 2010 Program, consistent with recommendations of the 
        Nuclear Energy Research Advisory Committee of the Department in 
        the report entitled ``A Roadmap to Deploy New Nuclear Power 
        Plants in the United States by 2010'' and dated October 2001.
            (2) Administration.--The Program shall include--
                    (A) use of the expertise and capabilities of 
                industry, institutions of higher education, and National 
                Laboratories in evaluation of advanced nuclear fuel 
                cycles and fuels testing;
                    (B) consideration of a variety of reactor designs 
                suitable for both developed and developing nations;
                    (C) participation of international collaborators in 
                research, development, and design efforts, as 
                appropriate; and
                    (D) encouragement for participation by institutions 
                of higher education and industry.

    (d) Generation IV Nuclear Energy Systems Initiative.--
            (1) In general.--The Secretary shall carry out a Generation 
        IV Nuclear Energy Systems Initiative to develop an overall 
        technology plan for and to support research and development 
        necessary to make an informed technical decision about the most 
        promising candidates for eventual commercial application.
            (2) Administration.--In conducting the Initiative, the 
        Secretary shall examine advanced proliferation-resistant and 
        passively safe reactor designs, including designs that--
                    (A) are economically competitive with other electric 
                power generation plants;
                    (B) have higher efficiency, lower cost, and improved 
                safety compared to reactors in operation on the date of 
                enactment of this Act;

[[Page 119 STAT. 886]]

                    (C) use fuels that are proliferation resistant and 
                have substantially reduced production of high-level 
                waste per unit of output; and
                    (D) use improved instrumentation.

    (e) Reactor Production of Hydrogen.--The Secretary shall carry out 
research to examine designs for high-temperature reactors capable of 
producing large-scale quantities of hydrogen.

SEC. 953. <<NOTE: 42 USC 16273.>> ADVANCED FUEL CYCLE INITIATIVE.

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

SEC. 954. <<NOTE: 42 USC 16274.>> UNIVERSITY NUCLEAR SCIENCE AND 
            ENGINEERING SUPPORT.

    (a) In General.--The Secretary shall conduct a program to invest in 
human resources and infrastructure in the nuclear sciences and related 
fields, including health physics, nuclear engineering, and 
radiochemistry, consistent with missions of the Department related to 
civilian nuclear research, development, demonstration, and commercial 
application.
    (b) Requirements.--In carrying out the program under this section, 
the Secretary shall--
            (1) conduct a graduate and undergraduate fellowship program 
        to attract new and talented students, which may include 
        fellowships for students to spend time at National Laboratories 
        in the areas of nuclear science, engineering, and health physics 
        with a member of the National Laboratory staff acting as a 
        mentor;
            (2) conduct a junior faculty research initiation grant 
        program to assist universities in recruiting and retaining new 
        faculty in the nuclear sciences and engineering by awarding 
        grants to junior faculty for research on issues related to 
        nuclear energy engineering and science;
            (3) support fundamental nuclear sciences, engineering, and 
        health physics research through a nuclear engineering education 
        and research program;
            (4) encourage collaborative nuclear research among industry, 
        National Laboratories, and universities; and
            (5) support communication and outreach related to nuclear 
        science, engineering, and health physics.

[[Page 119 STAT. 887]]

    (c) University-National Laboratory Interactions.--The Secretary 
shall conduct--
            (1) a fellowship program for professors at universities to 
        spend sabbaticals at National Laboratories in the areas of 
        nuclear science and technology; and
            (2) a visiting scientist program in which National 
        Laboratory staff can spend time in academic nuclear science and 
        engineering departments.

    (d) Strengthening University Research and Training Reactors and 
Associated Infrastructure.--In carrying out the program under this 
section, the Secretary may support--
            (1) converting research reactors from high-enrichment fuels 
        to low-enrichment fuels and upgrading operational 
        instrumentation;
            (2) consortia of universities to broaden access to 
        university research reactors;
            (3) student training programs, in collaboration with the 
        United States nuclear industry, in relicensing and upgrading 
        reactors, including through the provision of technical 
        assistance; and
            (4) reactor improvements as part of a taking into 
        consideration effort that emphasizes research, training, and 
        education, including through the Innovations in Nuclear 
        Infrastructure and Education Program or any similar program.

    (e) Operations and Maintenance.--Funding for a project provided 
under this section may be used for a portion of the operating and 
maintenance costs of a research reactor at a university used in the 
project.
    (f) Definition.--In this section, the term ``junior faculty'' means 
a faculty member who was awarded a doctorate less than 10 years before 
receipt of an award from the grant program described in subsection 
(b)(2).

SEC. 955. <<NOTE: 42 USC 16275.>> DEPARTMENT OF ENERGY CIVILIAN NUCLEAR 
            INFRASTRUCTURE AND FACILITIES.

    (a) In General.--The Secretary shall operate and maintain 
infrastructure and facilities to support the nuclear energy research, 
development, demonstration, and commercial application programs, 
including radiological facilities management, isotope production, and 
facilities management.
    (b) Duties.--In carrying out this section, the Secretary shall--
            (1) develop an inventory of nuclear science and engineering 
        facilities, equipment, expertise, and other assets at all of the 
        National Laboratories;
            (2) develop a prioritized list of nuclear science and 
        engineering plant and equipment improvements needed at each of 
        the National Laboratories;
            (3) consider the available facilities and expertise at all 
        National Laboratories and emphasize investments which complement 
        rather than duplicate capabilities; and
            (4) develop a timeline and a proposed budget for the 
        completion of deferred maintenance on plant and equipment, with 
        the goal of ensuring that Department programs under this 
        subtitle will be generally recognized to be among the best in 
        the world.

    (c) Plan.--The Secretary shall develop a comprehensive plan for the 
facilities at the Idaho National Laboratory, especially taking

[[Page 119 STAT. 888]]

into account the resources available at other National Laboratories. In 
developing the plan, the Secretary shall--
            (1) evaluate the facilities planning processes utilized by 
        other physical science and engineering research and development 
        institutions, both in the United States and abroad, that are 
        generally recognized as being among the best in the world, and 
        consider how those processes might be adapted toward developing 
        such facilities plan;
            (2) avoid duplicating, moving, or transferring nuclear 
        science and engineering facilities, equipment, expertise, and 
        other assets that currently exist at other National 
        Laboratories;
            (3) consider the establishment of a national transuranic 
        analytic chemistry laboratory as a user facility at the Idaho 
        National Laboratory;
            (4) include a plan to develop, if feasible, the Advanced 
        Test Reactor and Test Reactor Area into a user facility that is 
        more readily accessible to academic and industrial researchers;
            (5) consider the establishment of a fast neutron source as a 
        user facility;
            (6) consider the establishment of new hot cells and the 
        configuration of hot cells most likely to advance research, 
        development, demonstration, and commercial application in 
        nuclear science and engineering, especially in the context of 
        the condition and availability of these facilities elsewhere in 
        the National Laboratories; and
            (7) include a timeline and a proposed budget for the 
        completion of deferred maintenance on plant and equipment.

    (d) Transmittal to Congress.--Not <<NOTE: Deadline.>> later than 1 
year after the date of enactment of this Act, the Secretary shall 
transmit the plan under subsection (c) to Congress.

SEC. 956. <<NOTE: 42 USC 16276.>> SECURITY OF NUCLEAR FACILITIES.

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

SEC. 957. <<NOTE: 42 USC 16277.>> ALTERNATIVES TO INDUSTRIAL RADIOACTIVE 
            SOURCES.

    (a) Survey.--
            (1) In general.--Not <<NOTE: Deadline.>> later than August 
        1, 2006, the Secretary shall submit to Congress the results of a 
        survey of industrial applications of large radioactive sources.
            (2) Administration.--The survey shall--
                    (A) consider well-logging sources as one class of 
                industrial sources;
                    (B) include information on current domestic and 
                international Department, Department of Defense, State 
                Department, and commercial programs to manage and 
                dispose of radioactive sources; and
                    (C) analyze available disposal options for currently 
                deployed or future sources and, if deficiencies are 
                noted for either deployed or future sources, recommend 
                legislative options that Congress may consider to remedy 
                identified deficiencies.

[[Page 119 STAT. 889]]

    (b) Plan.--
            (1) In general.--In conjunction with the survey conducted 
        under subsection (a), the Secretary shall establish a research 
        and development program to develop alternatives to sources 
        described in subsection (a) that reduce safety, environmental, 
        or proliferation risks to either workers using the sources or 
        the public.
            (2) Accelerators.--Miniaturized particle accelerators for 
        well-logging or other industrial applications and portable 
        accelerators for production of short-lived radioactive materials 
        at an industrial site shall be considered as part of the 
        research and development efforts.
            (3) Report.--Not later than August 1, 2006, the Secretary 
        shall submit to Congress a report describing the details of the 
        program plan.

                        Subtitle F--Fossil Energy

SEC. 961. <<NOTE: 42 USC 16291.>> FOSSIL ENERGY.

    (a) In General.--The Secretary shall carry out research, 
development, demonstration, and commercial application programs in 
fossil energy, including activities under this subtitle, with the goal 
of improving the efficiency, effectiveness, and environmental 
performance of fossil energy production, upgrading, conversion, and 
consumption. Such programs take into consideration the following 
objectives:
            (1) Increasing the energy conversion efficiency of all forms 
        of fossil energy through improved technologies.
            (2) Decreasing the cost of all fossil energy production, 
        generation, and delivery.
            (3) Promoting diversity of energy supply.
            (4) Decreasing the dependence of the United States on 
        foreign energy supplies.
            (5) Improving United States energy security.
            (6) Decreasing the environmental impact of energy-related 
        activities.
            (7) Increasing the export of fossil energy-related 
        equipment, technology, and services from the United States.

    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out fossil energy research, 
development, demonstration, and commercial application activities, 
including activities authorized under this subtitle--
            (1) $611,000,000 for fiscal year 2007;
            (2) $626,000,000 for fiscal year 2008; and
            (3) $641,000,000 for fiscal year 2009.

    (c) Allocations.--From amounts authorized under subsection (a), the 
following sums are authorized:
            (1) For activities under section 962--
                    (A) $367,000,000 for fiscal year 2007;
                    (B) $376,000,000 for fiscal year 2008; and
                    (C) $394,000,000 for fiscal year 2009.
            (2) For activities under section 964--
                    (A) $20,000,000 for fiscal year 2007;
                    (B) $25,000,000 for fiscal year 2008; and
                    (C) $30,000,000 for fiscal year 2009.
            (3) For activities under section 966--

[[Page 119 STAT. 890]]

                    (A) $1,500,000 for fiscal year 2007; and
                    (B) $450,000 for each of fiscal years 2008 and 2009.
            (4) For the Office of Arctic Energy under section 3197 of 
        the Floyd D. Spence National Defense Authorization Act for 
        Fiscal Year 2001 (42 U.S.C. 7144d) $25,000,000 for each of 
        fiscal years 2007 through 2009.

    (d) Extended Authorization.--There are authorized to be appropriated 
to the Secretary for the Office of Arctic Energy established under 
section 3197 of the Floyd D. Spence National Defense Authorization Act 
for Fiscal Year 2001 (42 U.S.C. 7144d) $25,000,000 for each of fiscal 
years 2010 through 2012.
    (e) Limitations.--
            (1) Uses.--None of the funds authorized under this section 
        may be used for Fossil Energy Environmental Restoration or 
        Import/Export Authorization.
            (2) Institutions of higher education.--Of the funds 
        authorized under subsection (c)(2), not less than 20 percent of 
        the funds appropriated for each fiscal year shall be dedicated 
        to research and development carried out at institutions of 
        higher education.

SEC. 962. <<NOTE: 42 USC 16292.>> COAL AND RELATED TECHNOLOGIES PROGRAM.

    (a) In General.--In addition to the programs authorized under title 
IV, the Secretary shall conduct a program of technology research, 
development, demonstration, and commercial application for coal and 
power systems, including programs to facilitate production and 
generation of coal-based power through--
            (1) innovations for existing plants (including mercury 
        removal);
            (2) gasification systems;
            (3) advanced combustion systems;
            (4) turbines for synthesis gas derived from coal;
            (5) carbon capture and sequestration research and 
        development;
            (6) coal-derived chemicals and transportation fuels;
            (7) liquid fuels derived from low rank coal water slurry;
            (8) solid fuels and feedstocks;
            (9) advanced coal-related research;
            (10) advanced separation technologies; and
            (11) fuel cells for the operation of synthesis gas derived 
        from coal.

    (b) Cost and Performance Goals.--
            (1) In general.--In carrying out programs authorized by this 
        section, during each of calendar years 2008, 2010, 2012, and 
        2016, and during each fiscal year beginning after September 30, 
        2021, the Secretary shall identify cost and performance goals 
        for coal-based technologies that would permit the continued 
        cost-competitive use of coal for the production of electricity, 
        chemical feedstocks, and transportation fuels.
            (2) Administration.--In establishing the cost and 
        performance goals, the Secretary shall--
                    (A) consider activities and studies undertaken as of 
                the date of enactment of this Act by industry in 
                cooperation with the Department in support of the 
                identification of the goals;
                    (B) consult with interested entities, including--
                          (i) coal producers;

[[Page 119 STAT. 891]]

                          (ii) industries using coal;
                          (iii) organizations that promote coal and 
                      advanced coal technologies;
                          (iv) environmental organizations;
                          (v) organizations representing workers; and
                          (vi) organizations representing consumers;
                    (C) <<NOTE: Deadline. Federal 
                Register, publication.>> not later than 120 days after 
                the date of enactment of this Act, publish in the 
                Federal Register proposed draft cost and performance 
                goals for public comments; and
                    (D) <<NOTE: Deadline. Reports.>> not later than 180 
                days after the date of enactment of this Act and every 4 
                years thereafter, submit to Congress a report describing 
                the final cost and performance goals for the 
                technologies that includes--
                          (i) a list of technical milestones; and
                          (ii) an explanation of how programs authorized 
                      in this section will not duplicate the activities 
                      authorized under the Clean Coal Power Initiative 
                      authorized under title IV.

    (c) Powder River Basin and Fort Union Lignite Coal Mercury 
Removal.--
            (1) In general.--In addition to the programs authorized by 
        subsection (a), the Secretary shall establish a program to test 
        and develop technologies to control and remove mercury emissions 
        from subbituminous coal mined in the Powder River Basin, and 
        Fort Union lignite coals, that are used for the generation of 
        electricity.
            (2) Efficacy of mercury removal technology.--In carrying out 
        the program under paragraph (1), the Secretary shall examine the 
        efficacy of mercury removal technologies on coals described in 
        that paragraph that are blended with other types of coal.

    (d) Fuel Cells.--
            (1) In general.--The Secretary shall conduct a program of 
        research, development, demonstration, and commercial application 
        on fuel cells for low-cost, high-efficiency, fuel-flexible, 
        modular power systems.
            (2) Demonstrations.--The demonstrations referred to in 
        paragraph (1) shall include solid oxide fuel cell technology for 
        commercial, residential, and transportation applications, and 
        distributed generation systems, using improved manufacturing 
        production and processes.

SEC. 963. <<NOTE: 42 USC 16293.>> CARBON CAPTURE RESEARCH AND 
            DEVELOPMENT PROGRAM.

    (a) In General.--The Secretary shall carry out a 10-year carbon 
capture research and development program to develop carbon dioxide 
capture technologies on combustion-based systems for use--
            (1) in new coal utilization facilities; and
            (2) on the fleet of coal-based units in existence on the 
        date of enactment of this Act.

    (b) Objectives.--The objectives of the program under subsection (a) 
shall be--
            (1) to develop carbon dioxide capture technologies, 
        including adsorption and absorption techniques and chemical 
        processes, to remove the carbon dioxide from gas streams 
        containing carbon dioxide potentially amenable to sequestration;

[[Page 119 STAT. 892]]

            (2) to develop technologies that would directly produce 
        concentrated streams of carbon dioxide potentially amenable to 
        sequestration;
            (3) to increase the efficiency of the overall system to 
        reduce the quantity of carbon dioxide emissions released from 
        the system per megawatt generated; and
            (4) in accordance with the carbon dioxide capture program, 
        to promote a robust carbon sequestration program and continue 
        the work of the Department, in conjunction with the private 
        sector, through regional carbon sequestration partnerships.

    (c) Authorization of Appropriations.--From amounts authorized under 
section 961(b), the following sums are authorized for activities 
described in subsection (a)(2):
            (1) $25,000,000 for fiscal year 2006;
            (2) $30,000,000 for fiscal year 2007; and
            (3) $35,000,000 for fiscal year 2008.

SEC. 964. <<NOTE: 42 USC 16294.>> RESEARCH AND DEVELOPMENT FOR COAL 
            MINING TECHNOLOGIES.

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

SEC. 965. <<NOTE: 42 USC 16295.>> OIL AND GAS RESEARCH PROGRAMS.

    (a) In General.--The Secretary shall conduct a program of research, 
development, demonstration, and commercial application of oil and gas, 
including--
            (1) exploration and production;
            (2) gas hydrates;
            (3) reservoir life and extension;
            (4) transportation and distribution infrastructure;
            (5) ultraclean fuels;
            (6) heavy oil, oil shale, and tar sands; and
            (7) related environmental research.

[[Page 119 STAT. 893]]

    (b) Objectives.--The objectives of this program shall include 
advancing the science and technology available to domestic petroleum 
producers, particularly independent operators, to minimize the economic 
dislocation caused by the decline of domestic supplies of oil and 
natural gas resources.
    (c) Natural Gas and Oil Deposits Report.--Not later than 2 years 
after the date of enactment of this Act and every 2 years thereafter, 
the Secretary of the Interior, in consultation with other appropriate 
Federal agencies, shall submit to Congress a report on the latest 
estimates of natural gas and oil reserves, reserves growth, and 
undiscovered resources in Federal and State waters off the coast of 
Louisiana, Texas, Alabama, and Mississippi.
    (d) Integrated Clean Power and Energy Research.--
            (1) Establishment of center.--The Secretary shall establish 
        a national center or consortium of excellence in clean energy 
        and power generation, using the resources of the Clean Power and 
        Energy Research Consortium in existence on the date of enactment 
        of this Act, to address the critical dependence of the United 
        States on energy and the need to reduce emissions.
            (2) Focus areas.--The center or consortium shall conduct a 
        program of research, development, demonstration, and commercial 
        application on integrating the following 6 focus areas:
                    (A) Efficiency and reliability of gas turbines for 
                power generation.
                    (B) Reduction in emissions from power generation.
                    (C) Promotion of energy conservation issues.
                    (D) Effectively using alternative fuels and 
                renewable energy.
                    (E) Development of advanced materials technology for 
                oil and gas exploration and use in harsh environments.
                    (F) Education on energy and power generation issues.

SEC. 966. <<NOTE: 42 USC 16296.>> LOW-VOLUME OIL AND GAS RESERVOIR 
            RESEARCH PROGRAM.

    (a) Definition of GIS.--In this section, the term ``GIS'' means 
geographic information systems technology that facilitates the 
organization and management of data with a geographic component.
    (b) Program.--The Secretary shall establish a program of research, 
development, demonstration, and commercial application to maximize the 
productive capacity of marginal wells and reservoirs.
    (c) Data Collection.--Under the program, the Secretary shall collect 
data on--
            (1) the status and location of marginal wells and oil and 
        gas reservoirs;
            (2) the production capacity of marginal wells and oil and 
        gas reservoirs;
            (3) the location of low-pressure gathering facilities and 
        pipelines; and
            (4) the quantity of natural gas vented or flared in 
        association with crude oil production.

    (d) Analysis.--Under the program, the Secretary shall--
            (1) estimate the remaining producible reserves based on 
        variable pipeline pressures; and

[[Page 119 STAT. 894]]

            (2) recommend measures that will enable the continued 
        production of those resources.

    (e) Study.--
            (1) In general.--The Secretary may award a grant to an 
        organization of States that contain significant numbers of 
        marginal oil and natural gas wells to conduct an annual study of 
        low-volume natural gas reservoirs.
            (2) Organization with no gis capabilities.--If an 
        organization receiving a grant under paragraph (1) does not have 
        GIS capabilities, the organization shall contract with an 
        institution of higher education with GIS capabilities.
            (3) State geologists.--The organization receiving a grant 
        under paragraph (1) shall collaborate with the State geologist 
        of each State being studied.

    (f) Public Information.--The Secretary may use the data collected 
and analyzed under this section to produce maps and literature to 
disseminate to States to promote conservation of natural gas reserves.

SEC. 967. COMPLEX <<NOTE: Establishment. 42 USC 16297.>> WELL TECHNOLOGY 
            TESTING FACILITY.

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

SEC. 968. METHANE <<NOTE: 30 USC 1902 note.>> HYDRATE RESEARCH.

    (a) In General.--The Methane Hydrate Research and Development Act of 
2000 (30 U.S.C. 1902 note; Public Law 106-193) is amended to read as 
follows:

``SECTION 1. SHORT TITLE.

    ``This Act may be cited as the `Methane Hydrate Research and 
Development Act of 2000'.

``SEC. 2. FINDINGS.

    ``Congress finds that--
            ``(1) in order to promote energy independence and meet the 
        increasing demand for energy, the United States will require a 
        diversified portfolio of substantially increased quantities of 
        electricity, natural gas, and transportation fuels;
            ``(2) according to the report submitted to Congress by the 
        National Research Council entitled `Charting the Future of 
        Methane Hydrate Research in the United States', the total United 
        States resources of gas hydrates have been estimated to be on 
        the order of 200,000 trillion cubic feet;
            ``(3) according to the report of the National Commission on 
        Energy Policy entitled `Ending the Energy Stalemate--A 
        Bipartisan Strategy to Meet America's Energy Challenge', and 
        dated December 2004, the United States may be endowed with over 
        one-fourth of the methane hydrate deposits in the world;
            ``(4) according to the Energy Information Administration, a 
        shortfall in natural gas supply from conventional and 
        unconventional sources is expected to occur in or about 2020; 
        and
            ``(5) the National Academy of Sciences states that methane 
        hydrate may have the potential to alleviate the projected 
        shortfall in the natural gas supply.

[[Page 119 STAT. 895]]

``SEC. 3. DEFINITIONS.

    ``In this Act:
            ``(1) Contract.--The term `contract' means a procurement 
        contract within the meaning of section 6303 of title 31, United 
        States Code.
            ``(2) Cooperative agreement.--The term `cooperative 
        agreement' means a cooperative agreement within the meaning of 
        section 6305 of title 31, United States Code.
            ``(3) Director.--The term `Director' means the Director of 
        the National Science Foundation.
            ``(4) Grant.--The term `grant' means a grant awarded under a 
        grant agreement (within the meaning of section 6304 of title 31, 
        United States Code).
            ``(5) Industrial enterprise.--The term `industrial 
        enterprise' means a private, nongovernmental enterprise that has 
        an expertise or capability that relates to methane hydrate 
        research and development.
            ``(6) Institution of higher education.--The term 
        `institution of higher education' means an institution of higher 
        education (as defined in section 102 of the Higher Education Act 
        of 1965 (20 U.S.C. 1002)).
            ``(7) Secretary.--The term `Secretary' means the Secretary 
        of Energy, acting through the Assistant Secretary for Fossil 
        Energy.
            ``(8) Secretary of commerce.--The term `Secretary of 
        Commerce' means the Secretary of Commerce, acting through the 
        Administrator of the National Oceanic and Atmospheric 
        Administration.
            ``(9) Secretary of defense.--The term `Secretary of Defense' 
        means the Secretary of Defense, acting through the Secretary of 
        the Navy.
            ``(10) Secretary of the interior.--The term `Secretary of 
        the Interior' means the Secretary of the Interior, acting 
        through the Director of the United States Geological Survey, the 
        Director of the Bureau of Land Management, and the Director of 
        the Minerals Management Service.

``SEC. 4. METHANE HYDRATE RESEARCH AND DEVELOPMENT PROGRAM.

    ``(a) In General.--
            ``(1) Commencement <<NOTE: Deadline.>>  of program.--Not 
        later than 90 days after the date of enactment of the Energy 
        Research, Development, Demonstration, and Commercial Application 
        Act of 2005, the Secretary, in consultation with the Secretary 
        of Commerce, the Secretary of Defense, the Secretary of the 
        Interior, and the Director, shall commence a program of methane 
        hydrate research and development in accordance with this 
        section.
            ``(2) Designations.--The Secretary, the Secretary of 
        Commerce, the Secretary of Defense, the Secretary of the 
        Interior, and the Director shall designate individuals to carry 
        out this section.
            ``(3) Coordination.--The individual designated by the 
        Secretary shall coordinate all activities within the Department 
        of Energy relating to methane hydrate research and development.
            ``(4) Meetings.--The <<NOTE: Deadlines.>> individuals 
        designated under paragraph (2) shall meet not later than 180 
        days after the date

[[Page 119 STAT. 896]]

        of enactment of the Energy Research, Development, Demonstration, 
        and Commercial Application Act of 2005 and not less frequently 
        than every 180 days thereafter to--
                    ``(A) review the progress of the program under 
                paragraph (1); and
                    ``(B) coordinate interagency research and 
                partnership efforts in carrying out the program.

    ``(b) Grants, Contracts, Cooperative Agreements, Interagency Funds 
Transfer Agreements, and Field Work Proposals.--
            ``(1) Assistance and coordination.--In carrying out the 
        program of methane hydrate research and development authorized 
        by this section, the Secretary may award grants to, or enter 
        into contracts or cooperative agreements with, institutions of 
        higher education, oceanographic institutions, and industrial 
        enterprises to--
                    ``(A) conduct basic and applied research to 
                identify, explore, assess, and develop methane hydrate 
                as a commercially viable source of energy;
                    ``(B) identify methane hydrate resources through 
                remote sensing;
                    ``(C) acquire and reprocess seismic data suitable 
                for characterizing methane hydrate accumulations;
                    ``(D) assist in developing technologies required for 
                efficient and environmentally sound development of 
                methane hydrate resources;
                    ``(E) promote education and training in methane 
                hydrate resource research and resource development 
                through fellowships or other means for graduate 
                education and training;
                    ``(F) conduct basic and applied research to assess 
                and mitigate the environmental impact of hydrate 
                degassing (including both natural degassing and 
                degassing associated with commercial development);
                    ``(G) develop technologies to reduce the risks of 
                drilling through methane hydrates; and
                    ``(H) conduct exploratory drilling, well testing, 
                and production testing operations on permafrost and non-
                permafrost gas hydrates in support of the activities 
                authorized by this paragraph, including drilling of one 
                or more full-scale production test wells.
            ``(2) Competitive peer review.--Funds made available under 
        paragraph (1) shall be made available based on a competitive 
        process using external scientific peer review of proposed 
        research.

    ``(c) Methane Hydrates Advisory Panel.--
            ``(1) In general.--The <<NOTE: Establishment.>> Secretary 
        shall establish an advisory panel (including the hiring of 
        appropriate staff) consisting of representatives of industrial 
        enterprises, institutions of higher education, oceanographic 
        institutions, State agencies, and environmental organizations 
        with knowledge and expertise in the natural gas hydrates field, 
        to--
                    ``(A) assist in developing recommendations and broad 
                programmatic priorities for the methane hydrate research 
                and development program carried out under subsection 
                (a)(1);

[[Page 119 STAT. 897]]

                    ``(B) provide scientific oversight for the methane 
                hydrates program, including assessing progress toward 
                program goals, evaluating program balance, and providing 
                recommendations to enhance the quality of the program 
                over time; and
                    ``(C) not <<NOTE: Deadline.>> later than 2 years 
                after the date of enactment of the Energy Research, 
                Development, Demonstration, and Commercial Application 
                Act of 2005, and at such later dates as the panel 
                considers advisable, submit to Congress--
                          ``(i) an assessment of the methane hydrate 
                      research program; and
                          ``(ii) an assessment of the 5-year research 
                      plan of the Department of Energy.
            ``(2) Conflicts of interest.--In appointing each member of 
        the advisory panel established under paragraph (1), the 
        Secretary shall ensure, to the maximum extent practicable, that 
        the appointment of the member does not pose a conflict of 
        interest with respect to the duties of the member under this 
        Act.
            ``(3) Meetings.--The advisory panel shall--
                    ``(A) <<NOTE: Deadline.>> hold the initial meeting 
                of the advisory panel not later than 180 days after the 
                date of establishment of the advisory panel; and
                    ``(B) meet biennially thereafter.
            ``(4) Coordination.--The advisory panel shall coordinate 
        activities of the advisory panel with program managers of the 
        Department of Energy at appropriate National Laboratories.

    ``(d) Construction Costs.--None of the funds made available to carry 
out this section may be used for the construction of a new building or 
the acquisition, expansion, remodeling, or alteration of an existing 
building (including site grading and improvement and architect fees).
    ``(e) Responsibilities of the Secretary.--In carrying out subsection 
(b)(1), the Secretary shall--
            ``(1) facilitate and develop partnerships among government, 
        industrial enterprises, and institutions of higher education to 
        research, identify, assess, and explore methane hydrate 
        resources;
            ``(2) undertake programs to develop basic information 
        necessary for promoting long-term interest in methane hydrate 
        resources as an energy source;
            ``(3) ensure that the data and information developed through 
        the program are accessible and widely disseminated as needed and 
        appropriate;
            ``(4) promote cooperation among agencies that are developing 
        technologies that may hold promise for methane hydrate resource 
        development;
            ``(5) <<NOTE: Reports.>> report annually to Congress on the 
        results of actions taken to carry out this Act; and
            ``(6) ensure, to the maximum extent practicable, greater 
        participation by the Department of Energy in international 
        cooperative efforts.

[[Page 119 STAT. 898]]

``SEC. 5. NATIONAL RESEARCH COUNCIL STUDY.

    ``(a) Agreement for Study.--The Secretary shall offer to enter into 
an agreement with the National Research Council under which the National 
Research Council shall--
            ``(1) conduct a study of the progress made under the methane 
        hydrate research and development program implemented under this 
        Act; and
            ``(2) make recommendations for future methane hydrate 
        research and development needs.

    ``(b) Report.--Not later than September 30, 2009, the Secretary 
shall submit to Congress a report containing the findings and 
recommendations of the National Research Council under this section.

``SEC. 6. REPORTS AND STUDIES FOR CONGRESS.

    ``The Secretary shall provide to the Committee on Science of the 
House of Representatives and the Committee on Energy and Natural 
Resources of the Senate copies of any report or study that the 
Department of Energy prepares at the direction of any committee of 
Congress relating to the methane hydrate research and development 
program implemented under this Act.

``SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to the Secretary to carry 
out this Act, to remain available until expended--
            ``(1) $15,000,000 for fiscal year 2006;
            ``(2) $20,000,000 for fiscal year 2007;
            ``(3) $30,000,000 for fiscal year 2008;
            ``(4) $40,000,000 for fiscal year 2009; and
            ``(5) $50,000,000 for fiscal year 2010.''.

    (b) Reclassification.-- <<NOTE: 30 USC 2001 note.>> The Law Revision 
Counsel shall reclassify the Methane Hydrate Research and Development 
Act of 2000 (30 U.S.C. 1902 note; Public Law 106-193) to a new chapter 
at the end of title 30, United States Code.

                           Subtitle G--Science

SEC. 971. <<NOTE: 42 USC 16311.>> SCIENCE.

    (a) In General.--The Secretary shall conduct, through the Office of 
Science, programs of research, development, demonstration, and 
commercial application in high energy physics, nuclear physics, 
biological and environmental research, basic energy sciences, advanced 
scientific computing research, and fusion energy sciences, including 
activities described in this subtitle. The programs shall include 
support for facilities and infrastructure, education, outreach, 
information, analysis, and coordination activities.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out research, development, 
demonstration, and commercial application activities of the Office of 
Science, including activities authorized under this subtitle (including 
the amounts authorized under the amendment made by section 976(b) and 
including basic energy sciences, advanced scientific and computing 
research, biological and environmental research, fusion energy sciences, 
high energy physics, nuclear physics, research analysis, and 
infrastructure support)--
            (1) $4,153,000,000 for fiscal year 2007;
            (2) $4,586,000,000 for fiscal year 2008; and

[[Page 119 STAT. 899]]

            (3) $5,200,000,000 for fiscal year 2009.

    (c) Allocations.--From amounts authorized under subsection (b), the 
following sums are authorized:
            (1) For activities under the Fusion Energy Sciences program 
        (including activities under section 972)--
                    (A) $355,500,000 for fiscal year 2007;
                    (B) $369,500,000 for fiscal year 2008;
                    (C) $384,800,000 for fiscal year 2009; and
                    (D) in addition to the amounts authorized under 
                subparagraphs (A), (B), and (C), such sums as may be 
                necessary for ITER construction, consistent with the 
                limitations of section 972(c)(5).
            (2) For activities under the catalysis research program 
        under section 973--
                    (A) $36,500,000 for fiscal year 2007;
                    (B) $38,200,000 for fiscal year 2008; and
                    (C) such sums as may be necessary for fiscal year 
                2009.
            (3) For activities under the Systems Biology Program under 
        section 977 such sums as may be necessary for each of fiscal 
        years 2007 through 2009.
            (4) For activities under the Energy and Water Supplies 
        program under section 979, $30,000,000 for each of fiscal years 
        2007 through 2009.
            (5) For the energy research fellowships programs under 
        section 984, $40,000,000 for each of fiscal years 2007 through 
        2009.
            (6) For the advanced scientific computing activities under 
        section 976--
                    (A) $270,000,000 for fiscal year 2007;
                    (B) $350,000,000 for fiscal year 2008; and
                    (C) $375,000,000 for fiscal year 2009.
            (7) For the science and engineering education pilot program 
        under section 983--
                    (A) $4,000,000 for each of fiscal years 2007 and 
                2008; and
                    (B) $8,000,000 for fiscal year 2009.

    (d) Integrated Bioenergy Research and Development.--In addition to 
amounts otherwise authorized by this section, there are authorized to be 
appropriated to the Secretary for integrated bioenergy research and 
development programs, projects, and activities, $49,000,000 for each of 
the fiscal years 2005 through 2009. Activities funded under this 
subsection shall be coordinated with ongoing related programs of other 
Federal agencies, including the Plant Genome Program of the National 
Science Foundation. Of the funds authorized under this subsection, at 
least $5,000,000 for each fiscal year shall be for training and 
education targeted to minority and socially disadvantaged farmers and 
ranchers.

SEC. 972. FUSION <<NOTE: 42 USC 16312.>> ENERGY SCIENCES PROGRAM.

    (a) Declaration of Policy.--It shall be the policy of the United 
States to conduct research, development, demonstration, and commercial 
applications to provide for the scientific, engineering, and commercial 
infrastructure necessary to ensure that the United States is competitive 
with other countries in providing fusion energy for its own needs and 
the needs of other countries, including by demonstrating electric power 
or hydrogen

[[Page 119 STAT. 900]]

production for the United States energy grid using fusion energy at the 
earliest date.
    (b) Planning.--
            (1) In <<NOTE: Deadline.>> general.--Not later than 180 days 
        after the date of enactment of this Act, the Secretary shall 
        submit to Congress a plan (with proposed cost estimates, 
        budgets, and lists of potential international partners) for the 
        implementation of the policy described in subsection (a) in a 
        manner that ensures that--
                    (A) existing fusion research facilities are more 
                fully used;
                    (B) fusion science, technology, theory, advanced 
                computation, modeling, and simulation are strengthened;
                    (C) new magnetic and inertial fusion research and 
                development facilities are selected based on scientific 
                innovation and cost effectiveness, and the potential of 
                the facilities to advance the goal of practical fusion 
                energy at the earliest date practicable;
                    (D) facilities that are selected are funded at a 
                cost-effective rate;
                    (E) communication of scientific results and methods 
                between the fusion energy science community and the 
                broader scientific and technology communities is 
                improved;
                    (F) inertial confinement fusion facilities are used 
                to the extent practicable for the purpose of inertial 
                fusion energy research and development;
                    (G) attractive alternative inertial and magnetic 
                fusion energy approaches are more fully explored; and
                    (H) to the extent practicable, the recommendations 
                of the Fusion Energy Sciences Advisory Committee in the 
                report on workforce planning, dated March 2004, are 
                carried out, including periodic reassessment of program 
                needs.
            (2) Costs and schedules.--The plan shall also address the 
        status of and, to the extent practicable, costs and schedules 
        for--
                    (A) the design and implementation of international 
                or national facilities for the testing of fusion 
                materials; and
                    (B) the design and implementation of international 
                or national facilities for the testing and development 
                of key fusion technologies.

    (c) United States Participation in ITER.--
            (1) Definitions.--In this subsection:
                    (A) Construction.--
                          (i) In general.--The term ``construction'' 
                      means--
                                    (I) the physical construction of the 
                                ITER facility; and
                                    (II) the physical construction, 
                                purchase, or manufacture of equipment or 
                                components that are specifically 
                                designed for the ITER facility.
                          (ii) Exclusions.--The term ``construction'' 
                      does not include the design of the facility, 
                      equipment, or components.
                    (B) ITER.--The term ``ITER'' means the international 
                burning plasma fusion research project in which the 
                President announced United States participation on 
                January 30, 2003, or any similar international project.

[[Page 119 STAT. 901]]

            (2) Participation.--The United States may participate in the 
        ITER only in accordance with this subsection.
            (3) Agreement.--
                    (A) In general.--The Secretary may negotiate an 
                agreement for United States participation in the ITER.
                    (B) Contents.--Any agreement for United States 
                participation in the ITER shall, at a minimum--
                          (i) clearly define the United States financial 
                      contribution to construction and operating costs, 
                      as well as any other costs associated with a 
                      project;
                          (ii) ensure that the share of high-technology 
                      components of the ITER manufactured in the United 
                      States is at least proportionate to the United 
                      States financial contribution to the ITER;
                          (iii) ensure that the United States will not 
                      be financially responsible for cost overruns in 
                      components manufactured in other ITER 
                      participating countries;
                          (iv) guarantee the United States full access 
                      to all data generated by the ITER;
                          (v) enable United States researchers to 
                      propose and carry out an equitable share of the 
                      experiments at the ITER;
                          (vi) provide the United States with a role in 
                      all collective decisionmaking related to the ITER; 
                      and
                          (vii) describe the process for discontinuing 
                      or decommissioning the ITER and any United States 
                      role in that process.
            (4) Plan.--
                    (A) Development.--The Secretary, in consultation 
                with the Fusion Energy Sciences Advisory Committee, 
                shall develop a plan for the participation of United 
                States scientists in the ITER that shall include--
                          (i) the United States research agenda for the 
                      ITER;
                          (ii) methods to evaluate whether the ITER is 
                      promoting progress toward making fusion a reliable 
                      and affordable source of power; and
                          (iii) a description of how work at the ITER 
                      will relate to other elements of the United States 
                      fusion program.
                    (B) Review.--The Secretary shall request a review of 
                the plan by the National Academy of Sciences.
            (5) Limitation.-- <<NOTE: Reports. Deadlines.>> No Federal 
        funds shall be expended for the construction of the ITER until 
        the Secretary has submitted to Congress--
                    (A) the agreement negotiated in accordance with 
                paragraph (3) and 120 days have elapsed since that 
                submission;
                    (B) a report describing the management structure of 
                the ITER and providing a fixed dollar estimate of the 
                cost of United States participation in the construction 
                of the ITER, and 120 days have elapsed since that 
                submission;
                    (C) a report describing how United States 
                participation in the ITER will be funded without 
                reducing funding for other programs in the Office of 
                Science (including other fusion programs), and 60 days 
                have elapsed since that submission; and

[[Page 119 STAT. 902]]

                    (D) the plan required by paragraph (4) (but not the 
                National Academy of Sciences review of that plan), and 
                60 days have elapsed since that submission.
            (6) Alternative to iter.--
                    (A) In general.--If at any time during the 
                negotiations on the ITER, the Secretary determines that 
                construction and operation of the ITER is unlikely or 
                infeasible, the Secretary shall submit to Congress, 
                along with the budget request of the President submitted 
                to Congress for the following fiscal year, a plan for 
                implementing a domestic burning plasma experiment such 
                as the Fusion Ignition Research Experiment, including 
                costs and schedules for the plan.
                    (B) Administration.--The Secretary shall--
                          (i) refine the plan in full consultation with 
                      the Fusion Energy Sciences Advisory Committee; and
                          (ii) transmit the plan to the National Academy 
                      of Sciences for review.

SEC. 973. <<NOTE: 42 USC 16313.>> CATALYSIS RESEARCH PROGRAM.

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

    (c) Duties of the Office of Science.--In carrying out the program, 
the Director of the Office of Science shall--
            (1) support both individual investigators and 
        multidisciplinary teams of investigators to pioneer new 
        approaches in catalytic design;
            (2) develop, plan, construct, acquire, share, or operate 
        special equipment or facilities for the use of investigators in 
        collaboration with national user facilities, such as nanoscience 
        and engineering centers;
            (3) support technology transfer activities to benefit 
        industry and other users of catalysis science and engineering; 
        and
            (4) coordinate research and development activities with 
        industry and other Federal agencies.

    (d) Assessment.--Not <<NOTE: Deadline.>> later than 3 years after 
the date of enactment of this Act, the Secretary shall enter into an 
arrangement with the National Academy of Sciences to--
            (1) review the catalysis program to measure--
                    (A) gains made in the fundamental science of 
                catalysis; and
                    (B) progress towards developing new fuels for energy 
                production and material fabrication processes; and

[[Page 119 STAT. 903]]

            (2) submit <<NOTE: Reports.>> to Congress a report 
        describing the results of the review.

SEC. 974. <<NOTE: 42 USC 16314.>> HYDROGEN.

    (a) In General.--The Secretary shall conduct a program of 
fundamental research and development in support of programs authorized 
under title VIII.
    (b) Methods.--The program shall include support for methods of 
generating hydrogen without the use of natural gas.

SEC. 975. <<NOTE: 42 USC 16315.>> SOLID STATE LIGHTING.

    The Secretary shall conduct a program of fundamental research on 
solid state lighting in support of the Next Generation Lighting 
Initiative carried out under section 912.

SEC. 976. <<NOTE: 42 USC 16316.>> ADVANCED SCIENTIFIC COMPUTING FOR 
            ENERGY MISSIONS.

    (a) Program.--
            (1) In general.--The Secretary shall conduct an advanced 
        scientific computing research and development program that 
        includes activities related to applied mathematics and 
        activities authorized by the Department of Energy High-End 
        Computing Revitalization Act of 2004 (15 U.S.C. 5541 et seq.).
            (2) Goal.--The Secretary shall carry out the program with 
        the goal of supporting departmental missions, and providing the 
        high-performance computational, networking, advanced 
        visualization technologies, and workforce resources, that are 
        required for world leadership in science.

    (b) High-Performance Computing.--Section 203 of the High-Performance 
Computing Act of 1991 (15 U.S.C. 5523) is amended to read as follows:

``SEC. 203. DEPARTMENT OF ENERGY ACTIVITIES.

    ``(a) General Responsibilities.--As part of the Program described in 
title I, the Secretary of Energy shall--
            ``(1) conduct and support basic and applied research in 
        high-performance computing and networking to support fundamental 
        research in science and engineering disciplines related to 
        energy applications; and
            ``(2) provide computing and networking infrastructure 
        support, including--
                    ``(A) the provision of high-performance computing 
                systems that are among the most advanced in the world in 
                terms of performance in solving scientific and 
                engineering problems; and
                    ``(B) support for advanced software and applications 
                development for science and engineering disciplines 
                related to energy applications.

    ``(b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy such sums as are necessary to 
carry out this section.''.

SEC. 977. <<NOTE: 42 USC 16317.>> SYSTEMS BIOLOGY PROGRAM.

    (a) Program.--
            (1) Establishment.--The Secretary shall establish a 
        research, development, and demonstration program in microbial 
        and plant systems biology, protein science, and computational 
        biology to support the energy, national security, and 
        environmental missions of the Department.

[[Page 119 STAT. 904]]

            (2) Grants.--The program shall support individual 
        researchers and multidisciplinary teams of researchers through 
        competitive, merit-reviewed grants.
            (3) Consultation.--In carrying out the program, the 
        Secretary shall consult with other Federal agencies that conduct 
        genetic and protein research.

    (b) Goals.--The program shall have the goal of developing 
technologies and methods based on the biological functions of genomes, 
microbes, and plants that--
            (1) can facilitate the production of fuels, including 
        hydrogen;
            (2) convert carbon dioxide to organic carbon;
            (3) detoxify soils and water, including at facilities of the 
        Department, contaminated with heavy metals and radiological 
        materials; and
            (4) address other Department missions as identified by the 
        Secretary.

    (c) Plan.--
            (1) Development <<NOTE: Deadline.>> of plan.--Not later than 
        1 year after the date of enactment of this Act, the Secretary 
        shall prepare and transmit to Congress a research plan 
        describing how the program authorized pursuant to this section 
        will be undertaken to accomplish the program goals established 
        in subsection (b).
            (2) Review <<NOTE: Contracts.>> of plan.--The Secretary 
        shall contract with the National Academy of Sciences to review 
        the research plan developed under this 
        subsection. <<NOTE: Deadline.>> The Secretary shall transmit the 
        review to Congress not later than 18 months after transmittal of 
        the research plan under paragraph (1), along with the 
        Secretary's response to the recommendations contained in the 
        review.

    (d) User Facilities and Ancillary Equipment.--Within the funds 
authorized to be appropriated pursuant to this subtitle, amounts shall 
be available for projects to develop, plan, construct, acquire, or 
operate special equipment, instrumentation, or facilities, including 
user facilities at National Laboratories, for researchers conducting 
research, development, demonstration, and commercial application in 
systems biology and proteomics and associated biological disciplines.
    (e) Prohibition on Biomedical and Human Cell and Human Subject 
Research.--
            (1) No biomedical research.--In carrying out the program 
        under this section, the Secretary shall not conduct biomedical 
        research.
            (2) Limitations.--Nothing in this section shall authorize 
        the Secretary to conduct any research or demonstrations--
                    (A) on human cells or human subjects; or
                    (B) designed to have direct application with respect 
                to human cells or human subjects.

SEC. 978. FISSION <<NOTE: 42 USC 16318.>> AND FUSION ENERGY MATERIALS 
            RESEARCH PROGRAM.

    (a) In General.--Along with the budget request of the President 
submitted to Congress for fiscal year 2007, the Secretary shall 
establish a research and development program on material science issues 
presented by advanced fission reactors and the fusion energy program of 
the Department.

[[Page 119 STAT. 905]]

    (b) Administration.--In carrying out the program, the Secretary 
shall develop--
            (1) a catalog of material properties required for 
        applications described in subsection (a);
            (2) theoretical models for materials possessing the required 
        properties;
            (3) benchmark models against existing data; and
            (4) a roadmap to guide further research and development in 
        the area covered by the program.

SEC. 979. <<NOTE: 42 USC 16319.>> ENERGY AND WATER SUPPLIES.

    (a) In General.--The Secretary shall carry out a program of 
research, development, demonstration, and commercial application to--
            (1) address energy-related issues associated with provision 
        of adequate water supplies, optimal management, and efficient 
        use of water;
            (2) address water-related issues associated with the 
        provision of adequate supplies, optimal management, and 
        efficient use of energy; and
            (3) assess the effectiveness of existing programs within the 
        Department and other Federal agencies to address these energy 
        and water related issues.

    (b) Program Elements.--The program under this section shall 
include--
            (1) arsenic treatment;
            (2) desalination; and
            (3) planning, analysis, and modeling of energy and water 
        supply and demand.

    (c) Collaboration.--In carrying out this section, the Secretary 
shall consult with the Administrator of the Environmental Protection 
Agency, the Secretary of the Interior, the Chief Engineer of the Army 
Corps of Engineers, the Secretary of Commerce, the Secretary of Defense, 
and other Federal agencies as appropriate.
    (d) Facilities.--The Secretary may utilize all existing facilities 
within the Department and may design and construct additional facilities 
as needed to carry out the purposes of this program.
    (e) Advisory <<NOTE: Establishment.>> Committee.--The Secretary 
shall establish or utilize an advisory committee to provide independent 
advice and review of the program.

    (f) Reports.--Not later than 2 years after the date of enactment of 
this Act, the Secretary shall submit to Congress a report on the 
assessment described in subsection (b) and recommendations for future 
actions.

SEC. 980. <<NOTE: 42 USC 16320.>> SPALLATION NEUTRON SOURCE.

    (a) Definitions.--In this section:
            (1) SING.--The term ``SING'' means the Spallation Neutron 
        Source Instruments Next Generation major item of equipment.
            (2) SNS power upgrade.--The term ``SNS power upgrade'' means 
        the Spallation Neutron Source power upgrade described in the 20-
        year facilities plan of the Office of Science of the Department.
            (3) SNS second target station.--The term ``SNS second target 
        station'' means the Spallation Neutron Source second target 
        station described in the 20-year facilities plan of the Office 
        of Science of the Department.

[[Page 119 STAT. 906]]

            (4) Spallation neutron source facility.--The terms 
        ``Spallation Neutron Source Facility'' and ``Facility'' mean the 
        completed Spallation Neutron Source scientific user facility 
        located at Oak Ridge National Laboratory, Oak Ridge, Tennessee.
            (5) Spallation neutron source project.--The terms 
        ``Spallation Neutron Source Project'' and ``Project'' means 
        Department Project 99-E-334, Oak Ridge National Laboratory, Oak 
        Ridge, Tennessee.

    (b) Spallation Neutron Source Project.--
            (1) In <<NOTE: Reports.>> general.--The Secretary shall 
        submit to Congress, as part of the annual budget request of the 
        President submitted to Congress, a report on progress on the 
        Spallation Neutron Source Project.
            (2) Contents.--The report shall include for the Project--
                    (A) a description of the achievement of milestones;
                    (B) a comparison of actual costs to estimated costs; 
                and
                    (C) any changes in estimated Project costs or 
                schedule.

    (c) Spallation Neutron Source Facility Plan.--
            (1) In general.--The Secretary shall develop an operational 
        plan for the Spallation Neutron Source Facility that ensures 
        that the Facility is employed to the full capability of the 
        Facility in support of the study of advanced materials, 
        nanoscience, and other missions of the Office of Science of the 
        Department.
            (2) Plan.--The operational plan shall--
                    (A) include a plan for the operation of an effective 
                scientific user program that--
                          (i) is based on peer review of proposals 
                      submitted for use of the Facility;
                          (ii) includes scientific and technical support 
                      to ensure that external users, including 
                      researchers based at institutions of higher 
                      education, are able to make full use of a variety 
                      of high quality scientific instruments; and
                          (iii) phases in systems upgrades to ensure 
                      that the Facility remains at the forefront of 
                      international scientific endeavors in the field of 
                      the Facility throughout the operating life of the 
                      Facility;
                    (B) include an ongoing program to develop new 
                instruments that builds on the high performance neutron 
                source and that allows neutron scattering techniques to 
                be applied to a growing range of scientific problems and 
                disciplines; and
                    (C) address the status of and, to the maximum extent 
                practicable, costs and schedules for--
                          (i) full user mode operations of the Facility;
                          (ii) instrumentation built at the Facility 
                      during the operating phase through full use of the 
                      experimental hall, including the SING;
                          (iii) the SNS power upgrade; and
                          (iv) the SNS second target station.

    (d) Authorization of Appropriations.--

[[Page 119 STAT. 907]]

            (1) Spallation neutron source project.--There is authorized 
        to be appropriated to carry out the Spallation Neutron Source 
        Project for the lifetime of the Project $1,411,700,000 for total 
        project costs, of which--
                    (A) $1,192,700,000 shall be used for the costs of 
                construction; and
                    (B) $219,000,000 shall be used for other Project 
                costs.
            (2) Spallation neutron source facility.--
                    (A) In general.--Except as provided in subparagraph 
                (B), there is authorized to be appropriated for the 
                Spallation Neutron Source Facility for--
                          (i) the SING, $75,000,000 for each of fiscal 
                      year 2007 through 2009; and
                          (ii) the SNS power upgrade, $160,000,000, to 
                      remain available until expended.
                    (B) Insufficient stockpiles of heavy water.--If 
                stockpiles of heavy water of the Department are 
                insufficient to meet the needs of the Facility, there is 
                authorized to be appropriated for the Facility 
                $12,000,000 for fiscal year 2007.

SEC. 981. RARE <<NOTE: 42 USC 16321.>> ISOTOPE ACCELERATOR.

    (a) Establishment.--The Secretary shall construct and operate a Rare 
Isotope Accelerator. The Secretary shall <<NOTE: Deadline.>> commence 
construction no later than September 30, 2008.

    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary such sums as may be necessary to carry out 
this section. The Secretary shall not spend more than $1,100,000,000 in 
Federal funds for all activities associated with the Rare Isotope 
Accelerator, prior to operation of the Accelerator.

SEC. 982. <<NOTE: 42 USC 16322.>> OFFICE OF SCIENTIFIC AND TECHNICAL 
            INFORMATION.

    The Secretary, through the Office of Scientific and Technical 
Information, shall maintain within the Department publicly available 
collections of scientific and technical information resulting from 
research, development, demonstration, and commercial applications 
activities supported by the Department.

SEC. 983. <<NOTE: 42 USC 16323.>> SCIENCE AND ENGINEERING EDUCATION 
            PILOT PROGRAM.

    (a) Establishment <<NOTE: Grants.>> of Pilot Program.--The Secretary 
shall award a grant to a Southeastern United States consortium of major 
research universities that currently advances science and education by 
partnering with National Laboratories, to establish a regional pilot 
program of its SEEK-16 program for enhancing scientific, technological, 
engineering, and mathematical literacy, creativity, and decision-making. 
The consortium shall include leading research universities, one or more 
universities that train substantial numbers of elementary and secondary 
school teachers, and (where appropriate) National Laboratories.

    (b) Program Elements.--The regional pilot program shall include--
            (1) expanding strategic, formal partnerships among 
        universities with strength in research, universities that train 
        substantial numbers of elementary and secondary school teachers, 
        and the private sector;
            (2) combining Department expertise with one or more National 
        Aeronautics and Space Administration Educator Resource Centers;

[[Page 119 STAT. 908]]

            (3) developing programs to permit current and future 
        teachers to participate in ongoing research projects at National 
        Laboratories and research universities and to adapt lessons 
        learned to the classroom;
            (4) designing and implementing course work;
            (5) designing and implementing a strategy for measuring and 
        assessing progress under the program; and
            (6) developing models for transferring knowledge gained 
        under the pilot program to other institutions and areas of the 
        United States.

    (c) Categorization.--A grant under this section shall be considered 
an authorized activity under section 3165 of the Department of Energy 
Science Education Enhancement Act (42 U.S.C. 7381b).
    (d) Report.--No later than 2 years after the award of the grant, the 
Secretary shall transmit to Congress a report outlining lessons learned 
and, if determined appropriate by the Secretary, containing a plan for 
expanding the program throughout the United States.

SEC. 984. <<NOTE: 42 USC 16324.>> ENERGY RESEARCH FELLOWSHIPS.

    (a) Postdoctoral Fellowship Program.--The Secretary shall establish 
a program under which the Secretary provides fellowships to encourage 
outstanding young scientists and engineers to pursue postdoctoral 
research appointments in energy research and development at institutions 
of higher education of their choice.
    (b) Senior Research Fellowships.--
            (1) In general.--The Secretary shall establish a program 
        under which the Secretary provides fellowships to allow 
        outstanding senior researchers and their research groups in 
        energy research and development to explore research and 
        development topics of their choosing for a period of not less 
        than 3 years, to be determined by the Secretary.
            (2) Consideration.--In providing a fellowship under the 
        program described in paragraph (1), the Secretary shall 
        consider--
                    (A) the past scientific or technical accomplishment 
                of a senior researcher; and
                    (B) the potential for continued accomplishment by 
                the researcher during the period of the fellowship.

SEC. 984A. <<NOTE: 42 USC 16325.>> SCIENCE AND TECHNOLOGY SCHOLARSHIP 
            PROGRAM.

    (a) In General.--The Secretary is authorized to establish a Science 
and Technology Scholarship Program to award scholarships to individuals 
that is designed to recruit and prepare students for careers in the 
Department and National Laboratories.
    (b) Service Requirement.--The Secretary may require that an 
individual receiving a scholarship under this section serve as a full-
time employee of the Department or a National Laboratory for a fixed 
period in return for receiving the scholarship.

                  Subtitle H--International Cooperation

SEC. 985. <<NOTE: 42 USC 16341.>> WESTERN HEMISPHERE ENERGY COOPERATION.

    (a) Program.--The Secretary shall carry out a program to promote 
cooperation on energy issues with countries of the Western Hemisphere.

[[Page 119 STAT. 909]]

    (b) Activities.--Under the program, the Secretary shall fund 
activities to work with countries of the Western Hemisphere to--
            (1) increase the production of energy supplies;
            (2) improve energy efficiency; and
            (3) assist in the development and transfer of energy supply 
        and efficiency technologies that would have a beneficial impact 
        on world energy markets.

    (c) Participation by Institutions of Higher Education.--To the 
extent practicable, the Secretary shall carry out the program under this 
section with the participation of institutions of higher education so as 
to take advantage of the acceptance of institutions of higher education 
by countries of the Western Hemisphere as sources of unbiased technical 
and policy expertise when assisting the Secretary in--
            (1) evaluating new technologies;
            (2) resolving technical issues;
            (3) working with those countries in the development of new 
        policies; and
            (4) training policymakers, particularly in the case of 
        institutions of higher education that involve the participation 
        of minority students, such as--
                    (A) Hispanic-serving institutions; and
                    (B) part B institutions.

    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            (1) $10,000,000 for fiscal year 2007;
            (2) $13,000,000 for fiscal year 2008; and
            (3) $16,000,000 for fiscal year 2009.

SEC. 986. COOPERATION BETWEEN UNITED STATES AND ISRAEL.

    (a) Findings.--Congress finds that--
            (1) on February 1, 1996, the United States and Israel signed 
        the agreement entitled ``Agreement between the Department of 
        Energy of the United States of America and the Ministry of 
        Energy and Infrastructure of Israel Concerning Energy 
        Cooperation'' (referred to in this section as the 
        ``Agreement''), to establish a framework for collaboration 
        between the United States and Israel in energy research and 
        development activities;
            (2) the Agreement entered into force in February 2000;
            (3) in February 2005, the Agreement was automatically 
        renewed for 1 additional 5-year period pursuant to Article X of 
        the Agreement; and
            (4) under the Agreement, the United States and Israel may 
        cooperate in energy research and development in a variety of 
        alternative and advanced energy sectors.

    (b) Report to Congress.--Not later than 90 days after the date of 
enactment of this Act, the Secretary shall submit to the Committee on 
Energy and Natural Resources and the Committee on Foreign Relations of 
the Senate and the Committee on Energy and Commerce and the Committee on 
International Relations of the House of Representatives a report that 
describes--
            (1) the ways in which the United States and Israel have 
        cooperated on energy research and development activities under 
        the Agreement;
            (2) projects initiated pursuant to the Agreement; and
            (3) plans for future cooperation and joint projects under 
        the Agreement.

[[Page 119 STAT. 910]]

    (c) Sense of Congress.--It is the sense of Congress that energy 
cooperation between the Governments of the United States and Israel is 
mutually beneficial in the development of energy technology.

SEC. 986A. <<NOTE: 42 USC 16342.>> INTERNATIONAL ENERGY TRAINING.

    (a) In General.--The Secretary, in consultation with the Secretary 
of Commerce, the Secretary of the Interior, and Secretary of State, and 
the Federal Energy Regulatory Commission, shall coordinate training and 
outreach efforts for international commercial energy markets in 
countries with developing and restructuring economies.
    (b) Components.--The training and outreach efforts referred to in 
subsection (a) may include--
            (1) production-related fiscal regimes;
            (2) grid and network issues;
            (3) energy user and demand side response;
            (4) international trade of energy; and
            (5) international transportation of energy.

    (c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $1,500,000 for each of fiscal 
years 2007 through 2010.

           Subtitle I--Research Administration and Operations

SEC. 987. <<NOTE: 42 USC 16351.>> AVAILABILITY OF FUNDS.

    Funds authorized to be appropriated to the Department under this Act 
or an amendment made by this Act shall remain available until expended.

SEC. 988. <<NOTE: 42 USC 16352.>> COST SHARING.

    (a) Applicability.--Notwithstanding any other provision of law, in 
carrying out a research, development, demonstration, or commercial 
application program or activity that is initiated after the date of 
enactment of this section, the Secretary shall require cost-sharing in 
accordance with this section.
    (b) Research and Development.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3) and subsection (f), the Secretary shall require not less 
        than 20 percent of the cost of a research or development 
        activity described in subsection (a) to be provided by a non-
        Federal source.
            (2) Exclusion.--Paragraph (1) shall not apply to a research 
        or development activity described in subsection (a) that is of a 
        basic or fundamental nature, as determined by the appropriate 
        officer of the Department.
            (3) Reduction.--The Secretary may reduce or eliminate the 
        requirement of paragraph (1) for a research and development 
        activity of an applied nature if the Secretary determines that 
        the reduction is necessary and appropriate.

    (c) Demonstration and Commercial Application.--
            (1) In general.--Except as provided in paragraph (2) and 
        subsection (f), the Secretary shall require that not less than

[[Page 119 STAT. 911]]

        50 percent of the cost of a demonstration or commercial 
        application activity described in subsection (a) to be provided 
        by a non-Federal source.
            (2) Reduction of non-federal share.--The Secretary may 
        reduce the non-Federal share required under paragraph (1) if the 
        Secretary determines the reduction to be necessary and 
        appropriate, taking into consideration any technological risk 
        relating to the activity.

    (d) Calculation of Amount.--In calculating the amount of a non-
Federal contribution under this section, the Secretary--
            (1) may include allowable costs in accordance with the 
        applicable cost principles, including--
                    (A) cash;
                    (B) personnel costs;
                    (C) the value of a service, other resource, or third 
                party in-kind contribution determined in accordance with 
                the applicable circular of the Office of Management and 
                Budget;
                    (D) indirect costs or facilities and administrative 
                costs; or
                    (E) any funds received under the power program of 
                the Tennessee Valley Authority (except to the extent 
                that such funds are made available under an annual 
                appropriation Act); and
            (2) shall not include--
                    (A) revenues or royalties from the prospective 
                operation of an activity beyond the time considered in 
                the award;
                    (B) proceeds from the prospective sale of an asset 
                of an activity; or
                    (C) other appropriated Federal funds.

    (e) Repayment of Federal Share.--The Secretary shall not require 
repayment of the Federal share of a cost-shared activity under this 
section as a condition of making an award.
    (f) Exclusions.--This section shall not apply to--
            (1) a cooperative research and development agreement under 
        the Stevenson-Wydler Technology Innovation Act of 1980 (15 
        U.S.C. 3701 et seq.);
            (2) a fee charged for the use of a Department facility; or
            (3) an award under--
                    (A) the small business innovation research program 
                under section 9 of the Small Business Act (15 U.S.C. 
                638); or
                    (B) the small business technology transfer program 
                under that section.

SEC. 989. <<NOTE: 42 USC 16353.>> MERIT REVIEW OF PROPOSALS.

    (a) Awards.--Awards of funds authorized under this Act or an 
amendment made by this Act shall be made only after an impartial review 
of the scientific and technical merit of the proposals for the awards 
has been carried out by or for the Department.
    (b) Competition.--Competitive awards under this Act shall involve 
competitions open to all qualified entities within one or more of the 
following categories:
            (1) Institutions of higher education.
            (2) National Laboratories.
            (3) Nonprofit and for-profit private entities.

[[Page 119 STAT. 912]]

            (4) State and local governments.
            (5) Consortia of entities described in paragraphs (1) 
        through (4).

    (c) Sense of Congress.--It is the sense of Congress that research, 
development, demonstration, and commercial application activities 
carried out by the Department should be awarded using competitive 
procedures, to the maximum extent practicable.

SEC. 990. <<NOTE: 42 USC 16354.>> EXTERNAL TECHNICAL REVIEW OF 
            DEPARTMENTAL PROGRAMS.

    (a) National Energy Research and Development Advisory Boards.--
            (1) Establishment.--The Secretary shall establish one or 
        more advisory boards to review research, development, 
        demonstration, and commercial application programs of the 
        Department in energy efficiency, renewable energy, nuclear 
        energy, and fossil energy.
            (2) Alternatives.--The Secretary may--
                    (A) designate an existing advisory board within the 
                Department to fulfill the responsibilities of an 
                advisory board under this section; and
                    (B) enter into appropriate arrangements with the 
                National Academy of Sciences to establish such an 
                advisory board.

    (b) Use of Existing Committees.--The Secretary shall continue to use 
the scientific program advisory committees chartered under the Federal 
Advisory Committee Act (5 U.S.C. App.) by the Office of Science to 
oversee research and development programs under that Office.
    (c) Membership.--Each advisory board under this section shall 
consist of persons with appropriate expertise representing a diverse 
range of interests.
    (d) Meetings and Goals.--
            (1) Meetings.--Each advisory board under this section shall 
        meet at least semiannually to review and advise on the progress 
        made by the respective one or more research, development, 
        demonstration, and commercial application programs.
            (2) Goals.--The advisory board shall review the measurable 
        cost and performance-based goals for the programs as established 
        under section 902, and the progress on meeting the goals.

    (e) Periodic Reviews and Assessments.--
            (1) In general.--The Secretary shall enter into appropriate 
        arrangements with the National Academy of Sciences to conduct 
        periodic reviews and assessments of--
                    (A) the research, development, demonstration, and 
                commercial application programs authorized by this Act 
                and amendments made by this Act;
                    (B) the measurable cost and performance-based goals 
                for the programs as established under section 902, if 
                any; and
                    (C) the progress on meeting the goals.
            (2) Timing.--The reviews and assessments shall be conducted 
        every 5 years or more often as the Secretary considers 
        necessary.

[[Page 119 STAT. 913]]

            (3) Reports.--The Secretary shall submit to Congress reports 
        describing the results of all the reviews and assessments.

SEC. 991. <<NOTE: 42 USC 16355.>> NATIONAL LABORATORY DESIGNATION.

    After the date of enactment of this Act, the Secretary shall not 
designate a facility that is not listed in section 2(3) as a National 
Laboratory.

SEC. 992. <<NOTE: 42 USC 16356.>> REPORT ON EQUAL EMPLOYMENT OPPORTUNITY 
            PRACTICES.

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

SEC. 993. <<NOTE: 42 USC 16357.>> STRATEGY AND PLAN FOR SCIENCE AND 
            ENERGY FACILITIES AND INFRASTRUCTURE.

    (a) Facility and Infrastructure Policy.--
            (1) In general.--The Secretary shall develop and implement a 
        strategy for facilities and infrastructure supported primarily 
        from the Office of Science, the Office of Energy Efficiency and 
        Renewable Energy, the Office of Fossil Energy, or the Office of 
        Nuclear Energy, Science and Technology Programs at all National 
        Laboratories and single-purpose research facilities.
            (2) Strategy.--The strategy shall provide cost-effective 
        means for--
                    (A) maintaining existing facilities and 
                infrastructure;
                    (B) closing unneeded facilities;
                    (C) making facility modifications; and
                    (D) building new facilities.

    (b) Report.--
            (1) In general.--The Secretary shall prepare and submit, 
        along with the budget request of the President submitted to 
        Congress for fiscal year 2008, a report describing the strategy 
        developed under subsection (a).

[[Page 119 STAT. 914]]

            (2) Contents.--For each National Laboratory and single-
        purpose research facility that is primarily used for science and 
        energy research, the report shall contain--
                    (A) the current priority list of proposed facilities 
                and infrastructure projects, including cost and schedule 
                requirements;
                    (B) a current 10-year plan that demonstrates the 
                reconfiguration of its facilities and infrastructure to 
                meet its missions and to address its long-term 
                operational costs and return on investment;
                    (C) the total current budget for all facilities and 
                infrastructure funding; and
                    (D) the current status of each facility and 
                infrastructure project compared to the original baseline 
                cost, schedule, and scope.

SEC. 994. <<NOTE: 42 USC 16358.>> STRATEGIC RESEARCH PORTFOLIO ANALYSIS 
            AND COORDINATION PLAN.

    (a) In General.--The Secretary shall periodically review all of the 
science and technology activities of the Department in a strategic 
framework that takes into account both the frontiers of science to which 
the Department can contribute and the national needs relevant to the 
Department's statutory missions.
    (b) Coordination Analysis and Plan.--As part of the review under 
subsection (a), the Secretary shall develop a coordination plan to 
improve coordination and collaboration in research, development, 
demonstration, and commercial application activities across Department 
organizational boundaries.
    (c) Plan Contents.--The plan shall describe--
            (1) cross-cutting scientific and technical issues and 
        research questions that span more than one program or major 
        office of the Department;
            (2) how the applied technology programs of the Department 
        are coordinating their activities, and addressing those 
        questions;
            (3) ways in which the technical interchange within the 
        Department, particularly between the Office of Science and the 
        applied technology programs, can be enhanced, including ways in 
        which the research agendas of the Office of Science and the 
        applied programs can interact and assist each other;
            (4) a description of how the Secretary will ensure that the 
        Department's overall research agenda include, in addition to 
        fundamental, curiosity-driven research, fundamental research 
        related to topics of concern to the applied programs, and 
        applications in Departmental technology programs of research 
        results generated by fundamental, curiosity-driven research.

    (d) Plan <<NOTE: Deadlines.>> Transmittal.--Not later than 12 months 
after the date of enactment of this Act, and every 4 years thereafter, 
the Secretary shall transmit to Congress the results of the review under 
subsection (a) and the coordination plan under subsection (b).

SEC. 995. <<NOTE: 42 USC 16359.>> COMPETITIVE AWARD OF MANAGEMENT 
            CONTRACTS.

    None of the funds authorized to be appropriated to the Secretary by 
this title may be used to award a management and operating contract for 
a National Laboratory (excluding those named in subparagraphs (G), (H), 
(N), and (O) of section 2 (3)), unless

[[Page 119 STAT. 915]]

such contract is competitively awarded, or the Secretary grants, on a 
case-by-case basis, a waiver. <<NOTE: Reports. Deadline.>> The Secretary 
may not delegate the authority to grant such a waiver and shall submit 
to Congress a report notifying it of the waiver, and setting forth the 
reasons for the waiver, at least 60 days prior to the date of the award 
of such contract.

SEC. 996. <<NOTE: 42 USC 16360.>> WESTERN MICHIGAN DEMONSTRATION 
            PROJECT.

    The Administrator of the Environmental Protection Agency, in 
consultation with the State of Michigan and affected local officials, 
shall conduct a demonstration project to address the effect of 
transported ozone and ozone precursors in Southwestern Michigan. The 
demonstration program shall address projected nonattainment areas in 
Southwestern Michigan that include counties with design values for ozone 
of less than .095 based on years 2000 to 2002 or the most current 3-year 
period of air quality data. The Administrator shall assess any 
difficulties such areas may experience in meeting the 8-hour national 
ambient air quality standard for ozone due to the effect of transported 
ozone or ozone precursors into the areas. The Administrator shall work 
with State and local officials to determine the extent of ozone and 
ozone precursor transport, to assess alternatives to achieve compliance 
with the 8-hour standard apart from local controls, and to determine the 
timeframe in which such compliance could take 
place. <<NOTE: Deadline.>> The Administrator shall complete this 
demonstration project no later than 2 years after the date of enactment 
of this section and shall not impose any requirement or sanction under 
the Clean Air Act (42 U.S.C. 7401 et seq.) that might otherwise apply 
during the pendency of the demonstration project.

SEC. 997. <<NOTE: 42 USC 16361.>> ARCTIC ENGINEERING RESEARCH CENTER.

    (a) In <<NOTE: Establishment. Grants.>> General.--The Secretary of 
Transportation, in consultation with the Secretary and the United States 
Arctic Research Commission, shall provide annual grants to a university 
located adjacent to the Arctic Energy Office of the Department of 
Energy, to establish and operate a university research center to be 
headquartered in Fairbanks and to be known as the ``Arctic Engineering 
Research Center'' (referred to in this section as the ``Center'').

    (b) Purpose.--The purpose of the Center shall be to conduct research 
on, and develop improved methods of, construction and use of materials 
to improve the overall performance of roads, bridges, residential, 
commercial, and industrial structures, and other infrastructure in the 
Arctic region, with an emphasis on developing--
            (1) new construction techniques for roads, bridges, rail, 
        and related transportation infrastructure and residential, 
        commercial, and industrial infrastructure that are capable of 
        withstanding the Arctic environment and using limited energy 
        resources as efficiently as practicable;
            (2) technologies and procedures for increasing road, bridge, 
        rail, and related transportation infrastructure and residential, 
        commercial, and industrial infrastructure safety, reliability, 
        and integrity in the Arctic region;
            (3) new materials and improving the performance and energy 
        efficiency of existing materials for the construction of roads, 
        bridges, rail, and related transportation infrastructure

[[Page 119 STAT. 916]]

        and residential, commercial, and industrial infrastructure in 
        the Arctic region; and
            (4) recommendations for new local, regional, and State 
        permitting and building codes to ensure transportation and 
        building safety and efficient energy use when constructing, 
        using, and occupying such infrastructure in the Arctic region.

    (c) Objectives.--The Center shall carry out--
            (1) basic and applied research in the subjects described in 
        subsection (b), the products of which shall be judged by peers 
        or other experts in the field to advance the body of knowledge 
        in road, bridge, rail, and infrastructure engineering in the 
        Arctic region; and
            (2) an ongoing program of technology transfer that makes 
        research results available to potential users in a form that can 
        be implemented.

    (d) Amount of Grant.--For each of fiscal years 2006 through 2011, 
the Secretary shall provide a grant in the amount of $3,000,000 to the 
institution specified in subsection (a) to carry out this section.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $3,000,000 for each of fiscal 
years 2006 through 2011.

SEC. 998. <<NOTE: 42 USC 16362.>> BARROW GEOPHYSICAL RESEARCH FACILITY.

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

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

SEC. 999A. <<NOTE: 42 USC 16371.>> PROGRAM AUTHORITY.

    (a) In General.--The Secretary shall carry out a program under this 
subtitle of research, development, demonstration, and commercial 
application of technologies for ultra-deepwater and unconventional 
natural gas and other petroleum resource exploration and production, 
including addressing the technology challenges for small producers, safe 
operations, and environmental mitigation (including reduction of 
greenhouse gas emissions and sequestration of carbon).
    (b) Program Elements.--The program under this subtitle shall address 
the following areas, including improving safety and minimizing 
environmental impacts of activities within each area:

[[Page 119 STAT. 917]]

            (1) Ultra-deepwater architecture and technology, including 
        drilling to formations in the Outer Continental Shelf to depths 
        greater than 15,000 feet.
            (2) Unconventional natural gas and other petroleum resource 
        exploration and production technology.
            (3) The technology challenges of small producers.
            (4) Complementary research performed by the National Energy 
        Technology Laboratory for the Department.

    (c) Limitation on Location of Field Activities.--Field activities 
under the program under this subtitle shall be carried out only--
            (1) in--
                    (A) areas in the territorial waters of the United 
                States not under any Outer Continental Shelf moratorium 
                as of September 30, 2002;
                    (B) areas onshore in the United States on public 
                land administered by the Secretary of the Interior 
                available for oil and gas leasing, where consistent with 
                applicable law and land use plans; and
                    (C) areas onshore in the United States on State or 
                private land, subject to applicable law; and
            (2) with the approval of the appropriate Federal or State 
        land management agency or private land owner.

    (d) Activities at the National Energy Technology Laboratory.--The 
Secretary, through the National Energy Technology Laboratory, shall 
carry out a program of research and other activities complementary to 
and supportive of the research programs under subsection (b).
    (e) Consultation With Secretary of the Interior.--In carrying out 
this subtitle, the Secretary shall consult regularly with the Secretary 
of the Interior.

SEC. 999B. <<NOTE: 42 USC 16372.>> ULTRA-DEEPWATER AND UNCONVENTIONAL 
            ONSHORE NATURAL GAS AND OTHER PETROLEUM RESEARCH AND 
            DEVELOPMENT PROGRAM.

    (a) In General.--The Secretary shall carry out the activities under 
section 999A, to maximize the value of natural gas and other petroleum 
resources of the United States, by increasing the supply of such 
resources, through reducing the cost and increasing the efficiency of 
exploration for and production of such resources, while improving safety 
and minimizing environmental impacts.
    (b) Role of the Secretary.--The Secretary shall have ultimate 
responsibility for, and oversight of, all aspects of the program under 
this section.
    (c) Role of the Program Consortium.--
            (1) In general.--The Secretary shall contract with a 
        corporation that is structured as a consortium to administer the 
        programmatic activities outlined in this chapter. The program 
        consortium shall--
                    (A) administer the program pursuant to subsection 
                (f)(3), utilizing program administration funds only;
                    (B) issue research project solicitations upon 
                approval of the Secretary or the Secretary's designee;
                    (C) make project awards to research performers upon 
                approval of the Secretary or the Secretary's designee;
                    (D) disburse research funds to research performers 
                awarded under subsection (f) as directed by the 
                Secretary

[[Page 119 STAT. 918]]

                in accordance with the annual plan under subsection (e); 
                and
                    (E) carry out other activities assigned to the 
                program consortium by this section.
            (2) Limitation.--The Secretary may not assign any activities 
        to the program consortium except as specifically authorized 
        under this section.
            (3) Conflict of interest.--
                    (A) Procedures.--The Secretary shall establish 
                procedures--
                          (i) to ensure that each board member, officer, 
                      or employee of the program consortium who is in a 
                      decisionmaking capacity under subsection (f)(3) 
                      shall disclose to the Secretary any financial 
                      interests in, or financial relationships with, 
                      applicants for or recipients of awards under this 
                      section, including those of his or her spouse or 
                      minor child, unless such relationships or 
                      interests would be considered to be remote or 
                      inconsequential; and
                          (ii) to require any board member, officer, or 
                      employee with a financial relationship or interest 
                      disclosed under clause (i) to recuse himself or 
                      herself from any oversight under subsection (f)(4) 
                      with respect to such applicant or recipient.
                    (B) Failure to comply.--The Secretary may disqualify 
                an application or revoke an award under this section if 
                a board member, officer, or employee has failed to 
                comply with procedures required under subparagraph 
                (A)(ii).

    (d) Selection of the Program Consortium.--
            (1) In general.--The Secretary shall select the program 
        consortium through an open, competitive process.
            (2) Members.--The program consortium may include 
        corporations, trade associations, institutions of higher 
        education, National Laboratories, or other research 
        institutions. After submitting a proposal under paragraph (4), 
        the program consortium may not add members without the consent 
        of the Secretary.
            (3) Requirement of section 501(c)(3) status.--The Secretary 
        shall not select a consortium under this section unless such 
        consortium is an organization described in section 501(c)(3) of 
        the Internal Revenue Code of 1986 and exempt from tax under such 
        section 501(a) of such Code.
            (4) Schedule.-- <<NOTE: Deadlines.>> Not later than 90 days 
        after the date of enactment of this Act, the Secretary shall 
        solicit proposals from eligible consortia to perform the duties 
        in subsection (c)(1), which shall be submitted not later than 
        180 days after the date of enactment of this Act. The Secretary 
        shall select the program consortium not later than 270 days 
        after such date of enactment.
            (5) Application.--Applicants shall submit a proposal 
        including such information as the Secretary may require. At a 
        minimum, each proposal shall--
                    (A) list all members of the consortium;
                    (B) fully describe the structure of the consortium, 
                including any provisions relating to intellectual 
                property; and

[[Page 119 STAT. 919]]

                    (C) describe how the applicant would carry out the 
                activities of the program consortium under this section.
            (6) Eligibility.--To be eligible to be selected as the 
        program consortium, an applicant must be an entity whose members 
        have collectively demonstrated capabilities and experience in 
        planning and managing research, development, demonstration, and 
        commercial application programs for ultra-deepwater and 
        unconventional natural gas or other petroleum exploration or 
        production.
            (7) Focus areas for awards.--
                    (A) Ultra-deepwater resources.--Awards from 
                allocations under section 999H(d)(1) shall focus on the 
                development and demonstration of individual exploration 
                and production technologies as well as integrated 
                systems technologies including new architectures for 
                production in ultra-deepwater.
                    (B) Unconventional resources.--Awards from 
                allocations under section 999H(d)(2) shall focus on 
                areas including advanced coalbed methane, deep drilling, 
                natural gas production from tight sands, natural gas 
                production from gas shales, stranded gas, innovative 
                exploration and production techniques, enhanced recovery 
                techniques, and environmental mitigation of 
                unconventional natural gas and other petroleum resources 
                exploration and production.
                    (C) Small producers.--Awards from allocations under 
                section 999H(d)(3) shall be made to consortia consisting 
                of small producers or organized primarily for the 
                benefit of small producers, and shall focus on areas 
                including complex geology involving rapid changes in the 
                type and quality of the oil and gas reservoirs across 
                the reservoir; low reservoir pressure; unconventional 
                natural gas reservoirs in coalbeds, deep reservoirs, 
                tight sands, or shales; and unconventional oil 
                reservoirs in tar sands and oil shales.

    (e) Annual Plan.--
            (1) In general.--The program under this section shall be 
        carried out pursuant to an annual plan prepared by the Secretary 
        in accordance with paragraph (2).
            (2) Development.--
                    (A) Solicitation of recommendations.--Before 
                drafting an annual plan under this subsection, the 
                Secretary shall solicit specific written recommendations 
                from the program consortium for each element to be 
                addressed in the plan, including those described in 
                paragraph (4). The program consortium shall submit its 
                recommendations in the form of a draft annual plan.
                    (B) Submission of recommendations; other comment.--
                The Secretary shall submit the recommendations of the 
                program consortium under subparagraph (A) to the Ultra-
                Deepwater Advisory Committee established under section 
                999D(a) and to the Unconventional Resources Technology 
                Advisory Committee established under section 999D(b), 
                and such Advisory Committees shall provide to the 
                Secretary written comments by a date determined by the 
                Secretary. The Secretary may also solicit comments from 
                any other experts.

[[Page 119 STAT. 920]]

                    (C) Consultation.--The Secretary shall consult 
                regularly with the program consortium throughout the 
                preparation of the annual plan.
            (3) Publication.-- <<NOTE: Federal Register, 
        publication.>> The Secretary shall transmit to Congress and 
        publish in the Federal Register the annual plan, along with any 
        written comments received under paragraph (2)(A) and (B).
            (4) Contents.--The annual plan shall describe the ongoing 
        and prospective activities of the program under this section and 
        shall include--
                    (A) a list of any solicitations for awards to carry 
                out research, development, demonstration, or commercial 
                application activities, including the topics for such 
                work, who would be eligible to apply, selection 
                criteria, and the duration of awards; and
                    (B) a description of the activities expected of the 
                program consortium to carry out subsection (f)(3).
            (5) Estimates <<NOTE: Reports.>> of increased royalty 
        receipts.--The Secretary, in consultation with the Secretary of 
        the Interior, shall provide an annual report to Congress with 
        the President's budget on the estimated cumulative increase in 
        Federal royalty receipts (if any) resulting from the 
        implementation of this subtitle. The initial report under this 
        paragraph shall be submitted in the first President's budget 
        following the completion of the first annual plan required under 
        this subsection.

    (f) Awards.--
            (1) In general.--Upon approval of the Secretary the program 
        consortium shall make awards to research performers to carry out 
        research, development, demonstration, and commercial application 
        activities under the program under this section. The program 
        consortium shall not be eligible to receive such awards, but 
        provided that conflict of interest procedures in section 
        999B(c)(3) are followed, entities who are members of the program 
        consortium are not precluded from receiving research awards as 
        either individual research performers or as research performers 
        who are members of a research collaboration.
            (2) Proposals.--Upon approval of the Secretary the program 
        consortium shall solicit proposals for awards under this 
        subsection in such manner and at such time as the Secretary may 
        prescribe, in consultation with the program consortium.
            (3) Oversight.--
                    (A) In general.--The program consortium shall 
                oversee the implementation of awards under this 
                subsection, consistent with the annual plan under 
                subsection (e), including disbursing funds and 
                monitoring activities carried out under such awards for 
                compliance with the terms and conditions of the awards.
                    (B) Effect.--Nothing in subparagraph (A) shall limit 
                the authority or responsibility of the Secretary to 
                oversee awards, or limit the authority of the Secretary 
                to review or revoke awards.

    (g) Administrative Costs.--
            (1) In general.--To compensate the program consortium for 
        carrying out its activities under this section, the Secretary 
        shall provide to the program consortium funds sufficient to 
        administer the program. This compensation may include a

[[Page 119 STAT. 921]]

        management fee consistent with Department of Energy contracting 
        practices and procedures.
            (2) Advance.--The Secretary shall advance funds to the 
        program consortium upon selection of the consortium, which shall 
        be deducted from amounts to be provided under paragraph (1).

    (h) Audit.--The Secretary shall retain an independent auditor, which 
shall include a review by the General Accountability Office, to 
determine the extent to which funds provided to the program consortium, 
and funds provided under awards made under subsection (f), have been 
expended in a manner consistent with the purposes and requirements of 
this subtitle. <<NOTE: Reports.>> The auditor shall transmit a report 
(including any review by the General Accountability Office) annually to 
the Secretary, who shall transmit the report to Congress, along with a 
plan to remedy any deficiencies cited in the report.

    (i) Activities by the United States Geological Survey.--The 
Secretary of the Interior, through the United States Geological Survey, 
shall, where appropriate, carry out programs of long-term research to 
complement the programs under this section.
    (j) Program <<NOTE: Contracts.>> Review and Oversight.--The National 
Energy Technology Laboratory, on behalf of the Secretary, shall (1) 
issue a competitive solicitation for the program consortium, (2) 
evaluate, select, and award a contract or other agreement to a qualified 
program consortium, and (3) have primary review and oversight 
responsibility for the program consortium, including review and approval 
of research awards proposed to be made by the program consortium, to 
ensure that its activities are consistent with the purposes and 
requirements described in this subtitle. Up to 5 percent of program 
funds allocated under paragraphs (1) through (3) of section 999H(d) may 
be used for this purpose, including program direction and the 
establishment of a site office if determined to be necessary to carry 
out the purposes of this subsection.

SEC. 999C. <<NOTE: 42 USC 16373.>> ADDITIONAL REQUIREMENTS FOR AWARDS.

    (a) Demonstration Projects.--An application for an award under this 
subtitle for a demonstration project shall describe with specificity the 
intended commercial use of the technology to be demonstrated.
    (b) Flexibility in Locating Demonstration Projects.--Subject to the 
limitation in section 999A(c), a demonstration project under this 
subtitle relating to an ultra-deepwater technology or an ultra-deepwater 
architecture may be conducted in deepwater depths.
    (c) Intellectual Property Agreements.--If an award under this 
subtitle is made to a consortium (other than the program consortium), 
the consortium shall provide to the Secretary a signed contract agreed 
to by all members of the consortium describing the rights of each member 
to intellectual property used or developed under the award.
    (d) Technology Transfer.--Two and one-half percent of the amount of 
each award made under this subtitle shall be designated for technology 
transfer and outreach activities under this subtitle.
    (e) Cost Sharing Reduction for Independent Producers.--In applying 
the cost sharing requirements under section 988 to an award under this 
subtitle the Secretary may reduce or eliminate the non-Federal 
requirement if the Secretary determines that the

[[Page 119 STAT. 922]]

reduction is necessary and appropriate considering the technological 
risks involved in the project.
    (f) Information Sharing.--All results of the research administered 
by the program consortium shall be made available to the public 
consistent with Department policy and practice on information sharing 
and intellectual property agreements.

SEC. 999D. <<NOTE: 42 USC 16374.>> ADVISORY COMMITTEES.

    (a) Ultra-Deepwater Advisory Committee.--
            (1) Establishment.-- <<NOTE: Deadline.>> Not later than 270 
        days after the date of enactment of this Act, the Secretary 
        shall establish an advisory committee to be known as the Ultra-
        Deepwater Advisory Committee.
            (2) Membership.--The Advisory Committee under this 
        subsection shall be composed of members appointed by the 
        Secretary, including--
                    (A) individuals with extensive research experience 
                or operational knowledge of offshore natural gas and 
                other petroleum exploration and production;
                    (B) individuals broadly representative of the 
                affected interests in ultra-deepwater natural gas and 
                other petroleum production, including interests in 
                environmental protection and safe operations;
                    (C) no individuals who are Federal employees; and
                    (D) no individuals who are board members, officers, 
                or employees of the program consortium.
            (3) Duties.--The Advisory Committee under this subsection 
        shall--
                    (A) advise the Secretary on the development and 
                implementation of programs under this subtitle related 
                to ultra-deepwater natural gas and other petroleum 
                resources; and
                    (B) carry out section 999B(e)(2)(B).
            (4) Compensation.--A member of the Advisory Committee under 
        this subsection shall serve without compensation but shall 
        receive travel expenses in accordance with applicable provisions 
        under subchapter I of chapter 57 of title 5, United States Code.

    (b) Unconventional Resources Technology Advisory Committee.--
            (1) Establishment.-- <<NOTE: Deadline.>> Not later than 270 
        days after the date of enactment of this Act, the Secretary 
        shall establish an advisory committee to be known as the 
        Unconventional Resources Technology Advisory Committee.
            (2) Membership.--The Secretary shall endeavor to have a 
        balanced representation of members on the Advisory Committee to 
        reflect the breadth of geographic areas of potential gas supply. 
        The Advisory Committee under this subsection shall be composed 
        of members appointed by the Secretary, including--
                    (A) a majority of members who are employees or 
                representatives of independent producers of natural gas 
                and other petroleum, including small producers;
                    (B) individuals with extensive research experience 
                or operational knowledge of unconventional natural gas 
                and other petroleum resource exploration and production;

[[Page 119 STAT. 923]]

                    (C) individuals broadly representative of the 
                affected interests in unconventional natural gas and 
                other petroleum resource exploration and production, 
                including interests in environmental protection and safe 
                operations;
                    (D) individuals with expertise in the various 
                geographic areas of potential supply of unconventional 
                onshore natural gas and other petroleum in the United 
                States;
                    (E) no individuals who are Federal employees; and
                    (F) no individuals who are board members, officers, 
                or employees of the program consortium.
            (3) Duties.--The Advisory Committee under this subsection 
        shall--
                    (A) advise the Secretary on the development and 
                implementation of activities under this subtitle related 
                to unconventional natural gas and other petroleum 
                resources; and
                    (B) carry out section 999B(e)(2)(B).
            (4) Compensation.--A member of the Advisory Committee under 
        this subsection shall serve without compensation but shall 
        receive travel expenses in accordance with applicable provisions 
        under subchapter I of chapter 57 of title 5, United States Code.

    (c) Prohibition.--No advisory committee established under this 
section shall make recommendations on funding awards to particular 
consortia or other entities, or for specific projects.

SEC. 999E. <<NOTE: 42 USC 16375.>> LIMITS ON PARTICIPATION.

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

SEC. 999F. <<NOTE: 42 USC 16376.>> SUNSET.

    The authority provided by this subtitle shall terminate on September 
30, 2014.

SEC. 999G. <<NOTE: 42 USC 16377.>> DEFINITIONS.

    In this subtitle:
            (1) Deepwater.--The term ``deepwater'' means a water depth 
        that is greater than 200 but less than 1,500 meters.
            (2) Independent producer of oil or gas.--

[[Page 119 STAT. 924]]

                    (A) In general.--The term ``independent producer of 
                oil or gas'' means any person that produces oil or gas 
                other than a person to whom subsection (c) of section 
                613A of the Internal Revenue Code of 1986 does not apply 
                by reason of paragraph (2) (relating to certain 
                retailers) or paragraph (4) (relating to certain 
                refiners) of section 613A(d) of such Code.
                    (B) Rules for applying paragraphs (2) and (4) of 
                section 613a(d).--For purposes of subparagraph (A), 
                paragraphs (2) and (4) of section 613A(d) of the 
                Internal Revenue Code of 1986 shall be applied by 
                substituting ``calendar year'' for ``taxable year'' each 
                place it appears in such paragraphs.
            (3) Program administration funds.--The term ``program 
        administration funds'' means funds used by the program 
        consortium to administer the program under this subtitle, but 
        not to exceed 10 percent of the total funds allocated under 
        paragraphs (1) through (3) of section 999H(d).
            (4) Program consortium.--The term ``program consortium'' 
        means the consortium selected under section 999B(d).
            (5) Program research funds.--The term ``program research 
        funds'' means funds awarded to research performers by the 
        program consortium consistent with the annual plan.
            (6) Remote or inconsequential.--The term ``remote or 
        inconsequential'' has the meaning given that term in regulations 
        issued by the Office of Government Ethics under section 
        208(b)(2) of title 18, United States Code.
            (7) Small producer.--The term ``small producer'' means an 
        entity organized under the laws of the United States with 
        production levels of less than 1,000 barrels per day of oil 
        equivalent.
            (8) Ultra-deepwater.--The term ``ultra-deepwater'' means a 
        water depth that is equal to or greater than 1,500 meters.
            (9) Ultra-deepwater architecture.--The term ``ultra-
        deepwater architecture'' means the integration of technologies 
        for the exploration for, or production of, natural gas or other 
        petroleum resources located at ultra-deepwater depths.
            (10) Ultra-deepwater technology.--The term ``ultra-deepwater 
        technology'' means a discrete technology that is specially 
        suited to address one or more challenges associated with the 
        exploration for, or production of, natural gas or other 
        petroleum resources located at ultra-deepwater depths.
            (11) Unconventional natural gas and other petroleum 
        resource.--The term ``unconventional natural gas and other 
        petroleum resource'' means natural gas and other petroleum 
        resource located onshore in an economically inaccessible 
        geological formation, including resources of small producers.

SEC. 999H. <<NOTE: 42 USC 16378.>> FUNDING.

    (a) Oil and Gas Lease Income.--For each of fiscal years 2007 through 
2017, from any Federal royalties, rents, and bonuses derived from 
Federal onshore and offshore oil and gas leases issued under the Outer 
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) and the Mineral 
Leasing Act (30 U.S.C. 181 et seq.) which are deposited in the Treasury, 
and after distribution of any such funds as described in subsection (c), 
$50,000,000 shall be deposited into the Ultra-Deepwater and 
Unconventional Natural Gas and

[[Page 119 STAT. 925]]

Other Petroleum Research Fund (in this section referred to as the 
``Fund''). For purposes of this section, the term ``royalties'' excludes 
proceeds from the sale of royalty production taken in kind and royalty 
production that is transferred under section 27(a)(3) of the Outer 
Continental Shelf Lands Act (43 U.S.C. 1353(a)(3)).
    (b) Obligational Authority.--Monies in the Fund shall be available 
to the Secretary for obligation under this part without fiscal year 
limitation, to remain available until expended.
    (c) Prior Distributions.--The distributions described in subsection 
(a) are those required by law--
            (1) to States and to the Reclamation Fund under the Mineral 
        Leasing Act (30 U.S.C. 191(a)); and
            (2) to other funds receiving monies from Federal oil and gas 
        leasing programs, including--
                    (A) any recipients pursuant to section 8(g) of the 
                Outer Continental Shelf Lands Act (43 U.S.C. 1337(g));
                    (B) the Land and Water Conservation Fund, pursuant 
                to section 2(c) of the Land and Water Conservation Fund 
                Act of 1965 (16 U.S.C. 4601-5(c));
                    (C) the Historic Preservation Fund, pursuant to 
                section 108 of the National Historic Preservation Act 
                (16 U.S.C. 470h); and
                    (D) the coastal impact assistance program 
                established under section 31 of the Outer Continental 
                Shelf Lands Act (as amended by section 384).

    (d) Allocation.--Amounts obligated from the Fund under subsection 
(a)(1) in each fiscal year shall be allocated as follows:
            (1) 35 percent shall be for activities under section 
        999A(b)(1).
            (2) 32.5 percent shall be for activities under section 
        999A(b)(2).
            (3) 7.5 percent shall be for activities under section 
        999A(b)(3).
            (4) 25 percent shall be for complementary research under 
        section 999A(b)(4) and other activities under section 999A(b) to 
        include program direction funds, overall program oversight, 
        contract management, and the establishment and operation of a 
        technical committee to ensure that in-house research activities 
        funded under section 999A(b)(4) are technically complementary 
        to, and not duplicative of, research conducted under paragraphs 
        (1), (2), and (3) of section 999A(b).

    (e) Authorization of Appropriations.--In addition to other amounts 
that are made available to carry out this section, there is authorized 
to be appropriated to carry out this section $100,000,000 for each of 
fiscal years 2007 through 2016.
    (f) Fund.--There is hereby established in the Treasury of the United 
States a separate fund to be known as the ``Ultra-Deepwater and 
Unconventional Natural Gas and Other Petroleum Research Fund''.

[[Page 119 STAT. 926]]

                TITLE X--DEPARTMENT OF ENERGY MANAGEMENT

SEC. 1001. <<NOTE: 42 USC 16391.>> IMPROVED TECHNOLOGY TRANSFER OF 
            ENERGY TECHNOLOGIES.

    (a) Technology <<NOTE: Establishment.>> Transfer Coordinator.--The 
Secretary shall appoint a Technology Transfer Coordinator to be the 
principal advisor to the Secretary on all matters relating to technology 
transfer and commercialization.

    (b) Qualifications.--The Coordinator shall be an individual who, by 
reason of professional background and experience, is specially qualified 
to advise the Secretary on matters pertaining to technology transfer at 
the Department.
    (c) Duties of the Coordinator.--The Coordinator shall oversee--
            (1) the activities of the Technology Transfer Working Group 
        established under subsection (d);
            (2) the expenditure of funds allocated for technology 
        transfer within the Department;
            (3) the activities of each technology partnership ombudsman 
        appointed under section 11 of the Technology Transfer 
        Commercialization Act of 2000 (42 U.S.C. 7261c); and
            (4) efforts to engage private sector entities, including 
        venture capital companies.

    (d) Technology <<NOTE: Establishment.>> Transfer Working Group.--The 
Secretary shall establish a Technology Transfer Working Group, which 
shall consist of representatives of the National Laboratories and 
single-purpose research facilities, to--
            (1) coordinate technology transfer activities occurring at 
        National Laboratories and single-purpose research facilities;
            (2) exchange information about technology transfer 
        practices, including alternative approaches to resolution of 
        disputes involving intellectual property rights and other 
        technology transfer matters; and
            (3) develop and disseminate to the public and prospective 
        technology partners information about opportunities and 
        procedures for technology transfer with the Department, 
        including opportunities and procedures related to alternative 
        approaches to resolution of disputes involving intellectual 
        property rights and other technology transfer matters.

    (e) Technology Commercialization Fund.--The Secretary shall 
establish an Energy Technology Commercialization Fund, using 0.9 percent 
of the amount made available to the Department for applied energy 
research, development, demonstration, and commercial application for 
each fiscal year, to be used to provide matching funds with private 
partners to promote promising energy technologies for commercial 
purposes.
    (f) Technology Transfer Responsibility.--Nothing in this section 
affects the technology transfer responsibilities of Federal employees 
under the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 
3701 et seq.).
    (g) Planning and Reporting.--
            (1) In general.--Not later than 180 days after the date of 
        enactment of this Act, the Secretary shall submit to Congress a 
        technology transfer execution plan.

[[Page 119 STAT. 927]]

            (2) Updates.--Each year after the submission of the plan 
        under paragraph (1), the Secretary shall submit to Congress an 
        updated execution plan and reports that describe progress toward 
        meeting goals set forth in the execution plan and the funds 
        expended under subsection (e).

SEC. 1002. <<NOTE: 42 USC 16392.>> TECHNOLOGY INFRASTRUCTURE PROGRAM.

    (a) Definitions.--In this section:
            (1) Program.--The term ``Program'' means the Technology 
        Infrastructure Program established under subsection (b).
            (2) Technology cluster.--The term ``technology cluster'' 
        means a concentration of technology-related business concerns, 
        institutions of higher education, or nonprofit institutions, 
        that reinforce each other's performance in the areas of 
        technology development through formal or informal relationships.
            (3) Technology-related business concern.--The term 
        ``technology-related business concern'' means a for-profit 
        corporation, company, association, firm, partnership, or small 
        business concern that--
                    (A) conducts scientific or engineering research;
                    (B) develops new technologies;
                    (C) manufactures products based on new technologies; 
                or
                    (D) performs technological services.

    (b) Establishment.--The Secretary shall establish a Technology 
Infrastructure Program in accordance with this section.
    (c) Purpose.--The purpose of the Program shall be to improve the 
ability of National Laboratories and single-purpose research facilities 
to support departmental missions by--
            (1) stimulating the development of technology clusters that 
        can support departmental missions at the National Laboratories 
        or single-purpose research facilities;
            (2) improving the ability of National Laboratories and 
        single-purpose research facilities to leverage and benefit from 
        commercial research, technology, products, processes, and 
        services; and
            (3) encouraging the exchange of scientific and technological 
        expertise between--
                    (A) National Laboratories or single-purpose research 
                facilities; and
                    (B) entities that can support departmental missions 
                at the National Laboratories or single-purpose research 
                facilities, such as--
                          (i) institutions of higher education;
                          (ii) technology-related business concerns;
                          (iii) nonprofit institutions; and
                          (iv) agencies of State, tribal, or local 
                      governments.

    (d) Projects.--The Secretary shall authorize the director of each 
National Laboratory or single-purpose research facility to implement the 
Program at the National Laboratory or facility through one or more 
projects that meet the requirements of subsections (e) and (f).
    (e) Program Requirements.--
            (1) In general.--Each project funded under this section 
        shall meet the requirements of this subsection.
            (2) Entities.--Each project shall include at least one of 
        each of the following entities:

[[Page 119 STAT. 928]]

                    (A) A business.
                    (B) An institution of higher education.
                    (C) A nonprofit institution.
                    (D) An agency of a State, local, or tribal 
                government.
            (3) Cost-sharing.--
                    (A) In general.--The costs of carrying out projects 
                under this section shall be shared in accordance with 
                section 988.
                    (B) Sources.--The calculation of costs paid by the 
                non-Federal sources for a project shall include cash, 
                personnel, services, equipment, and other resources 
                expended on the project after the commencement of the 
                project.
                    (C) Research and development expenses.--Independent 
                research and development expenses of Government 
                contractors that qualify for reimbursement under section 
                31.205-18(e) of title 48, Code of Federal Regulations, 
                issued pursuant to section 25(c)(1) of the Office of 
                Federal Procurement Policy Act (41 U.S.C. 421(c)(1)), 
                may be credited towards costs paid by non-Federal 
                sources to a project, if the expenses meet the other 
                requirements of this section.
            (4) Competitive selection.--A project under this section 
        shall be competitively selected using procedures determined by 
        the Secretary.
            (5) Accounting.--Any participant that receives funds under 
        this section may use generally accepted accounting principles 
        for maintaining accounts, books, and records relating to the 
        project.
            (6) Duration.--No Federal funds shall be made available 
        under this section for a construction project or for any project 
        with a duration of more than 5 years.

    (f) Selection Criteria.--
            (1) Departmental missions.--The Secretary shall allocate 
        funds under this section only if the Director of the National 
        Laboratory or single-purpose research facility managing the 
        project determines that the project is likely to improve the 
        ability of the National Laboratory or single-purpose research 
        facility to achieve technical success in meeting departmental 
        missions.
            (2) Other criteria.--In selecting a project to receive 
        Federal funds, the Secretary shall consider--
                    (A) the potential of the project to promote the 
                development of a commercially sustainable technology 
                cluster following the period of investment by the 
                Department, which will derive most of the demand for its 
                products or services from the private sector, and which 
                will support departmental missions at the participating 
                National Laboratory or single-purpose research facility;
                    (B) the potential of the project to promote the use 
                of commercial research, technology, products, processes, 
                and services by the participating National Laboratory or 
                single-purpose research facility to achieve its mission 
                or the commercial development of technological 
                innovations made at the participating National 
                Laboratory or single-purpose research facility;
                    (C) the extent to which the project involves a wide 
                variety and number of institutions of higher education,

[[Page 119 STAT. 929]]

                nonprofit institutions, and technology-related business 
                concerns that can support the missions of the 
                participating National Laboratory or single-purpose 
                research facility and that will make substantive 
                contributions to achieving the goals of the project;
                    (D) the extent to which the project focuses on 
                promoting the development of technology-related business 
                concerns that are small businesses or involves such 
                small businesses substantively in the project; and
                    (E) such other criteria as the Secretary determines 
                to be appropriate.

    (g) Allocation.--In allocating funds for projects approved under 
this section, the Secretary shall provide--
            (1) the Federal share of the project costs; and
            (2) additional funds to the National Laboratory or single-
        purpose research facility managing the project to permit the 
        National Laboratory or single-purpose research facility to carry 
        out activities relating to the project, and to coordinate the 
        activities with the project.

    (h) Report to Congress.--Not later than July 1, 2008, the Secretary 
shall submit to Congress a report on whether the Program should be 
continued and, if so, how the program should be managed.
    (i) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for activities under this section 
$10,000,000 for each of fiscal years 2006 through 2008.

SEC. 1003. <<NOTE: 42 USC 16393.>> SMALL BUSINESS ADVOCACY AND 
            ASSISTANCE.

    (a) Small Business Advocate.--The Secretary shall require the 
Director of each National Laboratory, and may require the Director of a 
single-purpose research facility, to designate a small business advocate 
to--
            (1) increase the participation of small business concerns, 
        including socially and economically disadvantaged small business 
        concerns (as defined in section 8(a)(4) of the Small Business 
        Act (15 U.S.C. 637(a)(4))), in procurement, collaborative 
        research, technology licensing, and technology transfer 
        activities conducted by the National Laboratory or single-
        purpose research facility;
            (2) <<NOTE: Reports.>> report to the Director of the 
        National Laboratory or single-purpose research facility on the 
        actual participation of small business concerns in procurement 
        and collaborative research along with recommendations, if 
        appropriate, on how to improve participation;
            (3) make available to small business concerns training, 
        mentoring, and information on how to participate in procurement 
        and collaborative research activities;
            (4) increase the awareness inside the National Laboratory or 
        single-purpose research facility of the capabilities and 
        opportunities presented by small business concerns; and
            (5) establish <<NOTE: Guidelines. Reports.>> guidelines for 
        the program under subsection (b) and report on the effectiveness 
        of the program to the Director of the National Laboratory or 
        single-purpose research facility.

    (b) Establishment of Small Business Assistance Program.--The 
Secretary shall require the Director of each National Laboratory, and 
may require the Director of a single-purpose

[[Page 119 STAT. 930]]

research facility, to establish a program to provide small business 
concerns with--
            (1) assistance directed at making the small business 
        concerns more effective and efficient subcontractors or 
        suppliers to the National Laboratory or single-purpose research 
        facilities; or
            (2) general technical assistance, the cost of which shall 
        not exceed $10,000 per instance of assistance, to improve the 
        products or services of the small business concern.

    (c) Use of Funds.--None of the funds expended under subsection (b) 
may be used for direct grants to small business concerns.
    (d) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary for activities under this section 
$5,000,000 for each of fiscal years 2006 through 2008.

SEC. 1004. <<NOTE: 42 USC 16394.>> OUTREACH.

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

SEC. 1005. <<NOTE: Applicability. 42 USC 16395.>> RELATIONSHIP TO OTHER 
            LAWS.

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

SEC. 1006. <<NOTE: Government organization and employees.>> IMPROVED 
            COORDINATION AND MANAGEMENT OF CIVILIAN SCIENCE AND 
            TECHNOLOGY PROGRAMS.

    (a) Effective Top-Level Coordination of Research and Development 
Programs.--Section 202 of the Department of Energy Organization Act (42 
U.S.C. 7132) is amended by striking subsection (b) and inserting the 
following:
    ``(b)(1) There <<NOTE: President.>> shall be in the Department an 
Under Secretary for Science, who shall be appointed by the President, by 
and with the advice and consent of the Senate.

    ``(2) The Under Secretary shall be compensated at the rate provided 
for level III of the Executive Schedule under section 5314 of title 5, 
United States Code.
    ``(3) The Under Secretary for Science shall be appointed from among 
persons who--

[[Page 119 STAT. 931]]

            ``(A) have extensive background in scientific or engineering 
        fields; and
            ``(B) are well qualified to manage the civilian research and 
        development programs of the Department.

    ``(4) The Under Secretary for Science shall--
            ``(A) serve as the Science and Technology Advisor to the 
        Secretary;
            ``(B) monitor the research and development programs of the 
        Department in order to advise the Secretary with respect to any 
        undesirable duplication or gaps in the programs;
            ``(C) advise the Secretary with respect to the well-being 
        and management of the multipurpose laboratories under the 
        jurisdiction of the Department;
            ``(D) advise the Secretary with respect to education and 
        training activities required for effective short- and long-term 
        basic and applied research activities of the Department;
            ``(E) advise the Secretary with respect to grants and other 
        forms of financial assistance required for effective short- and 
        long-term basic and applied research activities of the 
        Department;
            ``(F) advise the Secretary with respect to long-term 
        planning, coordination, and development of a strategic framework 
        for Department research and development activities; and
            ``(G) carry out such additional duties assigned to the Under 
        Secretary by the Secretary relating to basic and applied 
        research, including supervision or support of research 
        activities carried out by any of the Assistant Secretaries 
        designated by section 203 of this Act, as the Secretary 
        considers advantageous.''.

    (b) Additional Assistant Secretary Position.--
            (1) In general.--Section 203(a) of the Department of Energy 
        Organization Act (42 U.S.C. 7133(a)) is amended in the first 
        sentence by striking ``six Assistant Secretaries'' and inserting 
        ``7 Assistant Secretaries''.
            (2) Assistant secretary level.--It is the sense of Congress 
        that the leadership for departmental missions in nuclear energy 
        should be at the Assistant Secretary level.

    (c) Technical and Conforming Amendments.--
            (1) Section 202 of the Department of Energy Organization Act 
        (42 U.S.C. 7132) is amended by adding at the end the following:

    ``(d)(1) There <<NOTE: President.>> shall be in the Department an 
Under Secretary, who shall be appointed by the President, by and with 
the advice and consent of the Senate, and who shall perform such 
functions and duties as the Secretary shall prescribe, consistent with 
this section.

    ``(2) The Under Secretary shall be compensated at the rate provided 
for level III of the Executive Schedule under section 5314 of title 5, 
United States Code.
    ``(e)(1) There <<NOTE: President.>> shall be in the Department a 
General Counsel, who shall be appointed by the President, by and with 
the advice and consent of the Senate, and who shall perform such 
functions and duties as the Secretary shall prescribe.

    ``(2) The General Counsel shall be compensated at the rate provided 
for level IV of the Executive Schedule under section 5315 of title 5, 
United States Code.''.

[[Page 119 STAT. 932]]

            (2) Section 5314 of title 5, United States Code, is amended 
        by striking ``Under Secretaries of Energy (2)'' and inserting 
        ``Under Secretaries of Energy (3)''.
            (3) Section 5315 of title 5, United States Code, is amended 
        by striking ``Assistant Secretaries of Energy (6)'' and 
        inserting ``Assistant Secretaries of Energy (7)''.
            (4) Section 209(b) of the Department of Energy Organization 
        Act (42 U.S.C. 7139(b)) is amended by striking paragraph (6) and 
        inserting the following:
            ``(6) to carry out such additional duties assigned to the 
        Office by the Secretary.''.

SEC. 1007. OTHER TRANSACTIONS AUTHORITY.

    Section 646 of the Department of Energy Organization Act (42 U.S.C. 
7256) is amended by adding at the end the following:
    ``(g)(1) In addition to authority granted to the Secretary under any 
other provision of law, the Secretary may exercise the same authority to 
enter into transactions (other than contracts, cooperative agreements, 
and grants), subject to the same terms and conditions as the Secretary 
of Defense under section 2371 of title 10, United States Code (other 
than subsections (b) and (f) of that section).
    ``(2) In applying section 2371 of title 10, United States Code, to 
the Secretary under paragraph (1)--
            ``(A) the term `basic' shall be replaced by the term 
        `research';
            ``(B) the term `applied' shall be replaced by the term 
        `development'; and
            ``(C) the terms `advanced research projects' and `advanced 
        research' shall be replaced by the term `demonstration 
        projects'.

    ``(3) The authority of the Secretary under paragraph (1) shall not 
be subject to--
            ``(A) section 9 of the Federal Nonnuclear Energy Research 
        and Development Act of 1974 (42 U.S.C. 5908); or
            ``(B) section 152 of the Atomic Energy Act of 1954 (42 
        U.S.C. 2182).

    ``(4)(A) The Secretary shall use such competitive, merit-based 
selection procedures in entering into transactions under paragraph (1), 
as the Secretary determines in writing to be practicable.
    ``(B) A transaction under paragraph (1) shall relate to a research, 
development, or demonstration project only if the Secretary determines 
in writing that the use of a standard contract, grant, or cooperative 
agreement for the project is not feasible or appropriate.
    ``(5) The Secretary may protect from disclosure, for up to 5 years 
after the date on which the information is developed, any information 
developed pursuant to a transaction under paragraph (1) that would be 
protected from disclosure under section 552(b)(4) of title 5, United 
States Code, if obtained from a person other than a Federal agency.
    ``(6)(A) Not <<NOTE: Deadline. Guidelines.>> later than 90 days 
after the date of enactment of this subsection, the Secretary shall 
issue guidelines for transactions under paragraph (1).

    ``(B) The <<NOTE: Federal Register, publication.>> guidelines shall 
be published in the Federal Register for public comment in accordance 
with rulemaking procedures of the Department.

[[Page 119 STAT. 933]]

    ``(C) The Secretary shall not have authority to carry out 
transactions under paragraph (1) until the guidelines for transactions 
required under subparagraph (A) are final.
    ``(7) The <<NOTE: Reports.>> annual report of the head of an 
executive agency under section 2371(h) of title 10, United States Code, 
shall be submitted to Congress.

    ``(8)(A) In this paragraph, the term `nontraditional Government 
contractor' has the meaning given the term `nontraditional defense 
contractor' in section 845(f) of the National Defense Authorization Act 
for Fiscal Year 1994 (Public Law 103-160; 10 U.S.C. 2371 note).
    ``(B) Not <<NOTE: Deadline. Reports.>> later than 1 year after the 
date on which the final guidelines are published under paragraph (6), 
the Comptroller General of the United States shall submit to Congress a 
report describing--
            ``(i) the use by the Department of authorities under this 
        section, including the ability to attract nontraditional 
        Government contractors; and
            ``(ii) whether additional safeguards are necessary to carry 
        out the authorities.

    ``(9) The authority of the Secretary under this subsection may be 
delegated only to an officer of the Department who is appointed by the 
President by and with the advice and consent of the Senate.
    ``(10) Notwithstanding <<NOTE: Termination date.>> any other 
provision of law, the authority to enter into transactions under 
paragraph (1) shall terminate on September 30, 2010.''.

SEC. 1008. <<NOTE: 42 USC 16396.>> PRIZES FOR ACHIEVEMENT IN GRAND 
            CHALLENGES OF SCIENCE AND TECHNOLOGY.

    (a) Authority.--The Secretary may carry out a program to award cash 
prizes in recognition of breakthrough achievements in research, 
development, demonstration, and commercial application that have the 
potential for application to the performance of the mission of the 
Department.
    (b) Competition Requirements.--The program under subsection (a) may 
include prizes for the achievement of goals articulated by the Secretary 
in a specific area through a widely advertised solicitation of 
submission of results for research, development, demonstration, or 
commercial application projects.
    (c) Prizes for Processes and Technologies to Reduce Dependence on 
Imported Oil.--The Secretary, in cooperation with the Freedom Prize 
Foundation, shall support a program of awarding prizes, to be known as 
Freedom Prizes, to encourage and recognize the development and 
deployment of processes and technologies that serve to reduce the 
dependence of the United States on imported oil.
    (d) Relationship to Other Authority.--The program under subsection 
(a) may be carried out in conjunction with or in addition to the 
exercise of any other authority of the Secretary to acquire, support, or 
stimulate research, development, demonstration, or commercial 
application projects.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated--
            (1) $10,000,000 to carry out the program under subsection 
        (a); and
            (2) $5,000,000 to carry out the program under subsection 
        (c).

[[Page 119 STAT. 934]]

SEC. 1009. TECHNICAL CORRECTIONS.

    (a) Coal Research and Development.--
            (1) In general.--Public Law 86-599 (30 U.S.C. 661 et seq.) 
        is amended--
                    (A) by striking the first section (30 U.S.C. 661) 
                and inserting the following:

    ``Sec. 1. (a) This Act may be cited as the `Coal Research and 
Development Act of 1960'.
    ``(b) In this Act:
            ``(1) The term `research' means scientific, technical, and 
        economic research and the practical application of that 
        research.
            ``(2) The term `Secretary' means the Secretary of Energy.'';
                    (B) in section 2 (30 U.S.C. 662), by striking 
                ``shall establish within'' and all that follows through 
                ``such Office'';
                    (C) by striking sections 3, 4, and 7 (30 U.S.C. 663, 
                664, 667); and
                    (D) by redesignating sections 5, 6, and 8 (30 U.S.C. 
                665, 666, 668) as sections 3, 4, and 5, respectively.
            (2) Patents.--Section 210(a)(8) of title 35, United States 
        Code, is amended by striking ``Coal Research Development Act of 
        1960'' and inserting ``Coal Research and Development Act of 
        1960''.

    (b) Nonnuclear Energy Research and Development.--
            (1) Short title; definitions.--Section 1 of the Federal 
        Nonnuclear Energy Research and Development Act of 1974 (42 
        U.S.C. 5902) is amended to read as follows:


                      ``short title and definitions


    ``Sec. 1. <<NOTE: 42 USC 5901 note.>> (a) This Act may be cited as 
the `Federal Nonnuclear Energy Research and Development Act of 1974'.

    ``(b) In this Act:
            ``(1) The term `Department' means the Department of Energy.
            ``(2) The term `Secretary' means the Secretary of Energy.''.
            (2) Statement of policy.--Section 3(b) of the Federal 
        Nonnuclear Energy Research and Development Act of 1974 (42 
        U.S.C. 5902(b)) is amended--
                    (A) in paragraph (1), by striking ``Energy Research 
                and Development Administration'' and inserting 
                ``Department'';
                    (B) in paragraph (2), by striking ``Administrator of 
                the Energy Research and Development Administration 
                (hereinafter in this Act referred to as the 
                `Administrator')'' and inserting ``Secretary''; and
                    (C) in paragraph (3)--
                          (i) by striking ``Administrator'' and 
                      inserting ``Secretary''; and
                          (ii) by inserting ``Demonstration'' after 
                      ``Cooling''.
            (3) Duties and authorities.--Section 4 of the Federal 
        Nonnuclear Energy Research and Development Act of 1974 (42 
        U.S.C. 5903) is amended--
                    (A) by striking the section heading and inserting 
                the following: ``duties and authorities of the 
                secretary''; and
                    (B) in the matter preceding subsection (a), by 
                striking ``Administrator'' and inserting ``Secretary''.

[[Page 119 STAT. 935]]

            (4) Comprehensive planning and programming.--Section 6 of 
        the Federal Nonnuclear Energy Research and Development Act of 
        1974 (42 U.S.C. 5905) is amended--
                    (A) by striking ``Administrator'' each place it 
                appears and inserting ``Secretary''; and
                    (B) in subsection (b)(3)--
                          (i) in subparagraph (I), by inserting 
                      ``Demonstration'' after ``Cooling''; and
                          (ii) in subparagraph (L), by inserting 
                      ``Energy'' after ``Solar''.
            (5) Forms of federal assistance.--Section 7 of the Federal 
        Nonnuclear Energy Research and Development Act of 1974 (42 
        U.S.C. 5906) is amended--
                    (A) by striking ``Administrator'' each place it 
                appears and inserting ``Secretary''; and
                    (B) in subsection (a)(4), by striking ``of the 
                section''.
            (6) Demonstrations.--Section 8 of the Federal Nonnuclear 
        Energy Research and Development Act of 1974 (42 U.S.C. 5907) is 
        amended--
                    (A) in subsections (a) through (c), by striking 
                ``Administrator'' each place it appears and inserting 
                ``Secretary'';
                    (B) in subsection (d)--
                          (i) in the first sentence of paragraph (1), by 
                      inserting ``of the Energy Research and Development 
                      Administration'' after ``Administrator''; and
                          (ii) in paragraph (3), by striking 
                      ``Administrator'' and inserting ``Secretary''; and
                    (C) in subsection (f)--
                          (i) by striking ``Administrator'' each place 
                      it appears and inserting ``Secretary''; and
                          (ii) in the proviso of the first sentence, by 
                      striking ``Administrator's'' and inserting 
                      ``Secretary's''.
            (7) Patent policy.--Section 9 of the Federal Nonnuclear 
        Energy Research and Development Act of 1974 (42 U.S.C. 5908) is 
        amended--
                    (A) by striking ``Administration'' each place it 
                appears and inserting ``Department'';
                    (B) by striking ``Administrator'' each place it 
                appears and inserting ``Secretary''; and
                    (C) in subsection (c)(3), by striking 
                ``Administration's'' and inserting ``Department's''.
            (8) Acquisition of essential materials.--Section 12 of the 
        Federal Nonnuclear Energy Research and Development Act of 1974 
        (42 U.S.C. 5911) is amended by striking subsection (b) and 
        inserting the following:

    ``(b) A rule or order under subsection (a) shall be considered to be 
a major rule subject to chapter 8 of title 5, United States Code.''.
            (9) Water resource evaluation.--Section 13 of the Federal 
        Nonnuclear Energy Research and Development Act of 1974 (42 
        U.S.C. 5912) is amended by striking ``Administrator'' each place 
        it appears and inserting ``Secretary''.
            (10) Authorization of appropriations.--Section 16 of the 
        Federal Nonnuclear Energy Research and Development Act of 1974 
        (42 U.S.C. 5915) is amended--
                    (A) by striking the section heading and inserting 
                the following: ``authorization of appropriations'';

[[Page 119 STAT. 936]]

                    (B) by striking ``(a) There may be appropriated to 
                the Administrator'' and inserting ``There may be 
                appropriated to the Secretary''; and
                    (C) by striking subsections (b) and (c).
            (11) Central source of nonnuclear energy information.--
        Section 17 of the Federal Nonnuclear Energy Research and 
        Development Act of 1974 (42 U.S.C. 5916) is amended--
                    (A) by striking ``Administrator'' each place it 
                appears and inserting ``Secretary'';
                    (B) in the first sentence, by striking 
                ``Administrator's'';
                    (C) in the second sentence, by striking ``he'' and 
                inserting ``the Secretary'';
                    (D) in the third sentence--
                          (i) in paragraph (2) of the first proviso, by 
                      striking ``section 1905 or title 18'' and 
                      inserting ``section 1905 of title 18''; and
                          (ii) in subparagraph (B) of the second 
                      proviso--
                                    (I) by striking ``the Federal Energy 
                                Administration,'';
                                    (II) by striking ``the Federal Power 
                                Commission,'' and inserting ``the 
                                Federal Energy Regulatory Commission''; 
                                and
                                    (III) by striking ``General 
                                Accounting Office'' and inserting 
                                ``Government Accountability Office''; 
                                and
                    (E) in the last sentence, by inserting ``or ranking 
                minority member'' after ``chairman''.
            (12) Energy information, loan guarantees, and financial 
        support.--Sections 18 through 20 of the Federal Nonnuclear 
        Energy Research and Development Act of 1974 (42 U.S.C. 5917 
        through 5920) are repealed.

    (c) Stevenson-Wydler Technology Innovation Act of 1980.--Section 20 
of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 
3712) is amended by striking ``and the National Science Foundation'' and 
inserting ``, the Secretary of Energy, and the Director of the National 
Science Foundation''.

SEC. 1010. <<NOTE: Deadline. Reports.>>  UNIVERSITY COLLABORATION.

    Not later than 2 years after the date of enactment of this Act, the 
Secretary shall transmit to the Congress a report that examines the 
feasibility of promoting collaborations between major universities and 
other colleges and universities in grants, contracts, and cooperative 
agreements made by the Secretary for energy projects. For purposes of 
this section, major universities are schools listed by the Carnegie 
Foundation as Doctoral Research Extensive Universities. The Secretary 
shall also consider providing incentives to increase the inclusion of 
small institutions of higher education, including minority-serving 
institutions, in energy grants, contracts, and cooperative agreements.

SEC. 1011. SENSE OF CONGRESS.

    It is the sense of Congress that--
            (1) the Secretary should develop and implement more 
        stringent procurement and inventory controls, including controls 
        on the purchase card program, to prevent waste, fraud, and abuse 
        of taxpayer funds by employees and contractors of the 
        Department; and

[[Page 119 STAT. 937]]

            (2) the Department's Inspector General should continue to 
        closely review purchase card purchases and other procurement and 
        inventory practices at the Department.

                    TITLE XI--PERSONNEL AND TRAINING

SEC. 1101. <<NOTE: 42 USC 16411.>>  WORKFORCE TRENDS AND TRAINEESHIP 
            GRANTS.

    (a) Definitions.--In this section:
            (1) Energy technology industry.--The term ``energy 
        technology industry'' includes--
                    (A) a renewable energy industry;
                    (B) a company that develops or commercializes a 
                device to increase energy efficiency;
                    (C) the oil and gas industry;
                    (D) the nuclear power industry;
                    (E) the coal industry;
                    (F) the electric utility industry; and
                    (G) any other industrial sector, as the Secretary 
                determines to be appropriate.
            (2) Skilled technical personnel.--The term ``skilled 
        technical personnel'' means--
                    (A) journey- and apprentice-level workers who are 
                enrolled in, or have completed, a federally-recognized 
                or State-recognized apprenticeship program; and
                    (B) other skilled workers in energy technology 
                industries, as determined by the Secretary.

    (b) Workforce Trends.--
            (1) Monitoring.--The Secretary, in consultation with, and 
        using data collected by, the Secretary of Labor, shall monitor 
        trends in the workforce of--
                    (A) skilled technical personnel that support energy 
                technology industries; and
                    (B) electric power and transmission engineers.
            (2) Report on trends.--Not later than 1 year after the date 
        of enactment of this Act, the Secretary shall submit to Congress 
        a report on current trends under paragraph (1), with 
        recommendations (as appropriate) to meet the future labor 
        requirements for the energy technology industries.
            (3) Report on shortage.--As soon as practicable after the 
        date on which the Secretary identifies or predicts a significant 
        national shortage of skilled technical personnel in one or more 
        energy technology industries, the Secretary shall submit to 
        Congress a report describing the shortage.

    (c) Traineeship Grants for Skilled Technical Personnel.--The 
Secretary, in consultation with the Secretary of Labor, may establish 
programs in the appropriate offices of the Department under which the 
Secretary provides grants to enhance training (including distance 
learning) for any workforce category for which a shortage is identified 
or predicted under subsection (b)(2).
    (d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $20,000,000 for each of fiscal 
years 2006 through 2008.

[[Page 119 STAT. 938]]

SEC. 1102. EDUCATIONAL PROGRAMS IN SCIENCE AND MATHEMATICS.

    (a) Science Education Enhancement Fund.--Section 3164 of the 
Department of Energy Science Education Enhancement Act (42 U.S.C. 7381a) 
is amended by adding at the end:
    ``(c) Science Education Enhancement Fund.--The Secretary shall use 
not less than 0.3 percent of the amount made available to the Department 
for research, development, demonstration, and commercial application for 
fiscal year 2006 and each fiscal year thereafter to carry out activities 
authorized by this part.''.
    (b) Authorized Education Activities.--Section 3165 of the Department 
of Energy Science Education Enhancement Act (42 U.S.C. 7381b) is amended 
by adding at the end the following:
            ``(14) Support competitive events for students under the 
        supervision of teachers, designed to encourage student interest 
        and knowledge in science and mathematics.
            ``(15) Support competitively-awarded, peer-reviewed programs 
        to promote professional development for mathematics teachers and 
        science teachers who teach in grades from kindergarten through 
        grade 12 at Department research and development facilities.
            ``(16) Support summer internships at Department research and 
        development facilities, for mathematics teachers and science 
        teachers who teach in grades from kindergarten through grade 12.
            ``(17) Sponsor and assist in educational and training 
        activities identified as critical skills needs for future 
        workforce development at Department research and development 
        facilities.''.

    (c) Educational Partnerships.--Section 3166(b) of the Department of 
Energy Science Education Enhancement Act (42 U.S.C. 7381c(b)) is 
amended--
            (1) by striking paragraph (1) and inserting the following:
            ``(1) loaning or transferring equipment to the 
        institution;'';
            (2) in paragraph (5), by striking ``and'' at the end;
            (3) in paragraph (6), by striking the period at the end and 
        inserting ``; and''; and
            (4) by adding at the end the following:
            ``(7) providing funds to educational institutions to hire 
        personnel to facilitate interactions between local school 
        systems, Department research and development facilities, and 
        corporate and governmental entities.''.

    (d) Definition of Department Research and Development Facilities.--
Section 3167(3) of the Department of Energy Science Education 
Enhancement Act (42 U.S.C. 7381d(3)) is amended by striking ``from the 
Office of Science of the Department of Energy'' and inserting ``by the 
Department of Energy''.
    (e) Study.--
            (1) In general.--The Secretary, in consultation with the 
        Secretary of Education, shall enter into an arrangement with the 
        National Academy of Public Administration to conduct a study of 
        the priorities, quality, local and regional flexibility, and 
        plans for educational programs at Department research and 
        development facilities.
            (2) Inclusion.--The study shall recommend measures that the 
        Secretary may take to improve Department-wide coordination of 
        educational, workforce development, and critical skills 
        development activities.

[[Page 119 STAT. 939]]

            (3) Report.--Not later than 2 years after the date of 
        enactment of this Act, the Secretary shall submit to Congress a 
        report on the results of the study conducted under this 
        subsection.

SEC. 1103. TRAINING <<NOTE: 42 USC 16412.>> GUIDELINES FOR NONNUCLEAR 
            ELECTRIC ENERGY INDUSTRY PERSONNEL.

    (a) In General.--The Secretary of Labor, in consultation with the 
Secretary and in conjunction with the electric industry and recognized 
employee representatives, shall develop model personnel training 
guidelines to support the reliability and safety of the nonnuclear 
electric system.
    (b) Requirements.--The training guidelines under subsection (a) 
shall, at a minimum--
            (1) include training requirements for workers engaged in the 
        construction, operation, inspection, or maintenance of 
        nonnuclear electric generation, transmission, or distribution 
        systems, including requirements relating to--
                    (A) competency;
                    (B) certification; and
                    (C) assessment, including--
                          (i) initial and continuous evaluation of 
                      workers;
                          (ii) recertification procedures; and
                          (iii) methods for examining or testing the 
                      qualification of an individual who performs a 
                      covered task; and
            (2) consolidate training guidelines in existence on the date 
        on which the guidelines under subsection (a) are developed 
        relating to the construction, operation, maintenance, and 
        inspection of nonnuclear electric generation, transmission, and 
        distribution facilities, such as guidelines established by the 
        National Electric Safety Code and other industry consensus 
        standards.

SEC. 1104. <<NOTE: 42 USC 16413.>> NATIONAL CENTER FOR ENERGY MANAGEMENT 
            AND BUILDING TECHNOLOGIES.

    The Secretary shall support the ongoing activities of and explore 
opportunities for expansion of the National Center for Energy Management 
and Building Technologies to carry out research, education, and training 
activities to facilitate the improvement of energy efficiency, indoor 
environmental quality, and security of industrial, commercial, 
residential, and public buildings.

SEC. 1105. IMPROVED ACCESS TO ENERGY-RELATED SCIENTIFIC AND TECHNICAL 
            CAREERS.

    (a) Science Education Programs.--Section 3164 of the Department of 
Energy Science Education Enhancement Act (42 U.S.C. 7381a) (as amended 
by section 1102(a)) is amended by adding at the end the following:
    ``(d) Programs for Students From Under-Represented Groups.--In 
carrying out a program under subsection (a), the Secretary shall give 
priority to activities that are designed to encourage students from 
under-represented groups to pursue scientific and technical careers.''.
    (b) Partnerships With Historically Black Colleges and Universities, 
Hispanic-Servicing Institutions, and Tribal Colleges.--The Department of 
Energy Science Education Enhancement Act (42 U.S.C. 7381 et seq.) is 
amended--

[[Page 119 STAT. 940]]

            (1) by redesignating sections 3167 and 3168 <<NOTE: 42 USC 
        7381d, 7381e.>> as sections 3168 and 3169, respectively; and
            (2) by inserting after section 3166 the following:

``SEC. 3167. <<NOTE: 42 USC 7381c-1.>> PARTNERSHIPS WITH HISTORICALLY 
            BLACK COLLEGES AND UNIVERSITIES, HISPANIC-SERVING 
            INSTITUTIONS, AND TRIBAL COLLEGES.

    ``(a) Definitions.--In this section:
            ``(1) Hispanic-serving institution.--The term `Hispanic-
        serving institution' has the meaning given the term in section 
        502(a) of the Higher Education Act of 1965 (20 U.S.C. 1101a(a)).
            ``(2) Historically black college or university.--The term 
        `historically Black college or university' has the meaning given 
        the term `part B institution' in section 322 of the Higher 
        Education Act of 1965 (20 U.S.C. 1061).
            ``(3) National laboratory.--The term `National Laboratory' 
        has the meaning given the term in section 2 of the Energy Policy 
        Act of 2005.
            ``(4) Science facility.--The term `science facility' has the 
        meaning given the term `single-purpose research facility' in 
        section 903 of the Energy Policy Act of 2005.
            ``(5) Tribal college.--The term `tribal college' has the 
        meaning given the term `tribally controlled college or 
        university' in section 2(a) of the Tribally Controlled College 
        Assistance Act of 1978 (25 U.S.C. 1801(a)).

    ``(b) Education Partnership.--The Secretary shall require the 
director of each National Laboratory, and may require the head of any 
science facility, to increase the participation of historically Black 
colleges or universities, Hispanic-serving institutions, or tribal 
colleges in any activity that increases the capacity of the historically 
Black colleges or universities, Hispanic-serving institutions, or tribal 
colleges to train personnel in science or engineering.
    ``(c) Activities.--An activity described in subsection (b) 
includes--
            ``(1) collaborative research;
            ``(2) equipment transfer;
            ``(3) training activities carried out at a National 
        Laboratory or science facility; and
            ``(4) mentoring activities carried out at a National 
        Laboratory or science facility.

    ``(d) Report.--Not later than 2 years after the date of enactment of 
this subsection, the Secretary shall submit to Congress a report 
describing the activities carried out under this section.''.

SEC. 1106. <<NOTE: 42 USC 16414.>> NATIONAL POWER PLANT OPERATIONS 
            TECHNOLOGY AND EDUCATIONAL CENTER.

    (a) Establishment.--The Secretary shall support the establishment of 
a National Power Plant Operations Technology and Education Center 
(referred to in this section as the ``Center''), to address the need for 
training and educating certified operators and technicians for the 
electric power industry.
    (b) Location of Center.--The Secretary shall support the 
establishment of the Center at an institution of higher education that 
has--
            (1) expertise in providing degree programs in electric power 
        generation, transmission, and distribution technologies;
            (2) expertise in providing onsite and Internet-based 
        training; and

[[Page 119 STAT. 941]]

            (3) demonstrated responsiveness to workforce and training 
        requirements in the electric power industry.

    (c) Training and Continuing Education.--
            (1) In general.--The Center shall provide training and 
        continuing education in electric power generation, transmission, 
        and distribution technologies and operations.
            (2) Location.--The Center shall carry out training and 
        education activities under paragraph (1)--
                    (A) at the Center; and
                    (B) through Internet-based information technologies 
                that allow for learning at remote sites.

TITLE <<NOTE: Electricity Modernization Act of 2005.>> XII--ELECTRICITY

SEC. 1201. <<NOTE: 42 USC 15801 note.>> SHORT TITLE.

    This title may be cited as the ``Electricity Modernization Act of 
2005''.

                    Subtitle A--Reliability Standards

SEC. 1211. ELECTRIC RELIABILITY STANDARDS.

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

``SEC. 215. <<NOTE: 16 USC 824o.>> ELECTRIC RELIABILITY.

    ``(a) Definitions.--For purposes of this section:
            ``(1) The term `bulk-power system' means--
                    ``(A) facilities and control systems necessary for 
                operating an interconnected electric energy transmission 
                network (or any portion thereof); and
                    ``(B) electric energy from generation facilities 
                needed to maintain transmission system reliability.
        The term does not include facilities used in the local 
        distribution of electric energy.
            ``(2) The terms `Electric Reliability Organization' and 
        `ERO' mean the organization certified by the Commission under 
        subsection (c) the purpose of which is to establish and enforce 
        reliability standards for the bulk-power system, subject to 
        Commission review.
            ``(3) The term `reliability standard' means a requirement, 
        approved by the Commission under this section, to provide for 
        reliable operation of the bulk-power system. The term includes 
        requirements for the operation of existing bulk-power system 
        facilities, including cybersecurity protection, and the design 
        of planned additions or modifications to such facilities to the 
        extent necessary to provide for reliable operation of the bulk-
        power system, but the term does not include any requirement to 
        enlarge such facilities or to construct new transmission 
        capacity or generation capacity.
            ``(4) The term `reliable operation' means operating the 
        elements of the bulk-power system within equipment and electric 
        system thermal, voltage, and stability limits so that 
        instability, uncontrolled separation, or cascading failures of 
        such system will not occur as a result of a sudden disturbance, 
        including a cybersecurity incident, or unanticipated failure of 
        system elements.

[[Page 119 STAT. 942]]

            ``(5) The term `Interconnection' means a geographic area in 
        which the operation of bulk-power system components is 
        synchronized such that the failure of one or more of such 
        components may adversely affect the ability of the operators of 
        other components within the system to maintain reliable 
        operation of the facilities within their control.
            ``(6) The term `transmission organization' means a Regional 
        Transmission Organization, Independent System Operator, 
        independent transmission provider, or other transmission 
        organization finally approved by the Commission for the 
        operation of transmission facilities.
            ``(7) The term `regional entity' means an entity having 
        enforcement authority pursuant to subsection (e)(4).
            ``(8) The term `cybersecurity incident' means a malicious 
        act or suspicious event that disrupts, or was an attempt to 
        disrupt, the operation of those programmable electronic devices 
        and communication networks including hardware, software and data 
        that are essential to the reliable operation of the bulk power 
        system.

    ``(b) Jurisdiction and Applicability.--(1) The Commission shall have 
jurisdiction, within the United States, over the ERO certified by the 
Commission under subsection (c), any regional entities, and all users, 
owners and operators of the bulk-power system, including but not limited 
to the entities described in section 201(f), for purposes of approving 
reliability standards established under this section and enforcing 
compliance with this section. All users, owners and operators of the 
bulk-power system shall comply with reliability standards that take 
effect under this section.
    ``(2) <<NOTE: Regulations. Deadline.>> The Commission shall issue a 
final rule to implement the requirements of this section not later than 
180 days after the date of enactment of this section.

    ``(c) Certification.--Following the issuance of a Commission rule 
under subsection (b)(2), any person may submit an application to the 
Commission for certification as the Electric Reliability Organization. 
The Commission may certify one such ERO if the Commission determines 
that such ERO--
            ``(1) has the ability to develop and enforce, subject to 
        subsection (e)(2), reliability standards that provide for an 
        adequate level of reliability of the bulk-power system; and
            ``(2) has established rules that--
                    ``(A) assure its independence of the users and 
                owners and operators of the bulk-power system, while 
                assuring fair stakeholder representation in the 
                selection of its directors and balanced decisionmaking 
                in any ERO committee or subordinate organizational 
                structure;
                    ``(B) allocate equitably reasonable dues, fees, and 
                other charges among end users for all activities under 
                this section;
                    ``(C) provide fair and impartial procedures for 
                enforcement of reliability standards through the 
                imposition of penalties in accordance with subsection 
                (e) (including limitations on activities, functions, or 
                operations, or other appropriate sanctions);
                    ``(D) provide for reasonable notice and opportunity 
                for public comment, due process, openness, and balance 
                of interests in developing reliability standards and 
                otherwise exercising its duties; and

[[Page 119 STAT. 943]]

                    ``(E) provide for taking, after certification, 
                appropriate steps to gain recognition in Canada and 
                Mexico.

    ``(d) Reliability Standards.--(1) The Electric Reliability 
Organization shall file each reliability standard or modification to a 
reliability standard that it proposes to be made effective under this 
section with the Commission.
    ``(2) The Commission may approve, by rule or order, a proposed 
reliability standard or modification to a reliability standard if it 
determines that the standard is just, reasonable, not unduly 
discriminatory or preferential, and in the public interest. The 
Commission shall give due weight to the technical expertise of the 
Electric Reliability Organization with respect to the content of a 
proposed standard or modification to a reliability standard and to the 
technical expertise of a regional entity organized on an 
Interconnection-wide basis with respect to a reliability standard to be 
applicable within that Interconnection, but shall not defer with respect 
to the effect of a standard on competition. A proposed standard or 
modification shall take effect upon approval by the Commission.
    ``(3) The Electric Reliability Organization shall rebuttably presume 
that a proposal from a regional entity organized on an Interconnection-
wide basis for a reliability standard or modification to a reliability 
standard to be applicable on an Interconnection-wide basis is just, 
reasonable, and not unduly discriminatory or preferential, and in the 
public interest.
    ``(4) The Commission shall remand to the Electric Reliability 
Organization for further consideration a proposed reliability standard 
or a modification to a reliability standard that the Commission 
disapproves in whole or in part.
    ``(5) The Commission, upon its own motion or upon complaint, may 
order the Electric Reliability Organization to submit to the Commission 
a proposed reliability standard or a modification to a reliability 
standard that addresses a specific matter if the Commission considers 
such a new or modified reliability standard appropriate to carry out 
this section.
    ``(6) The final rule adopted under subsection (b)(2) shall include 
fair processes for the identification and timely resolution of any 
conflict between a reliability standard and any function, rule, order, 
tariff, rate schedule, or agreement accepted, approved, or ordered by 
the Commission applicable to a transmission organization. Such 
transmission organization shall continue to comply with such function, 
rule, order, tariff, rate schedule or agreement accepted, approved, or 
ordered by the Commission until--
            ``(A) the Commission finds a conflict exists between a 
        reliability standard and any such provision;
            ``(B) the Commission orders a change to such provision 
        pursuant to section 206 of this part; and
            ``(C) the ordered change becomes effective under this part.

If the Commission determines that a reliability standard needs to be 
changed as a result of such a conflict, it shall order the ERO to 
develop and file with the Commission a modified reliability standard 
under paragraph (4) or (5) of this subsection.
    ``(e) Enforcement.--(1) The ERO may impose, subject to paragraph 
(2), a penalty on a user or owner or operator of the bulk-power system 
for a violation of a reliability standard approved by the Commission 
under subsection (d) if the ERO, after notice and an opportunity for a 
hearing--

[[Page 119 STAT. 944]]

            ``(A) finds that the user or owner or operator has violated 
        a reliability standard approved by the Commission under 
        subsection (d); and
            ``(B) files notice and the record of the proceeding with the 
        Commission.

    ``(2) A penalty imposed under paragraph (1) may take effect not 
earlier than the 31st day after the ERO files with the Commission notice 
of the penalty and the record of proceedings. Such penalty shall be 
subject to review by the Commission, on its own motion or upon 
application by the user, owner or operator that is the subject of the 
penalty filed within 30 days after the date such notice is filed with 
the Commission. Application to the Commission for review, or the 
initiation of review by the Commission on its own motion, shall not 
operate as a stay of such penalty unless the Commission otherwise orders 
upon its own motion or upon application by the user, owner or operator 
that is the subject of such penalty. In any proceeding to review a 
penalty imposed under paragraph (1), the Commission, after notice and 
opportunity for hearing (which hearing may consist solely of the record 
before the ERO and opportunity for the presentation of supporting 
reasons to affirm, modify, or set aside the penalty), shall by order 
affirm, set aside, reinstate, or modify the penalty, and, if 
appropriate, remand to the ERO for further proceedings. The Commission 
shall implement expedited procedures for such hearings.
    ``(3) On its own motion or upon complaint, the Commission may order 
compliance with a reliability standard and may impose a penalty against 
a user or owner or operator of the bulk-power system if the Commission 
finds, after notice and opportunity for a hearing, that the user or 
owner or operator of the bulk-power system has engaged or is about to 
engage in any acts or practices that constitute or will constitute a 
violation of a reliability standard.
    ``(4) <<NOTE: Regulations. Contracts.>> The Commission shall issue 
regulations authorizing the ERO to enter into an agreement to delegate 
authority to a regional entity for the purpose of proposing reliability 
standards to the ERO and enforcing reliability standards under paragraph 
(1) if--
            ``(A) the regional entity is governed by--
                    ``(i) an independent board;
                    ``(ii) a balanced stakeholder board; or
                    ``(iii) a combination independent and balanced 
                stakeholder board.
            ``(B) the regional entity otherwise satisfies the provisions 
        of subsection (c)(1) and (2); and
            ``(C) the agreement promotes effective and efficient 
        administration of bulk-power system reliability.

The Commission may modify such delegation. The ERO and the Commission 
shall rebuttably presume that a proposal for delegation to a regional 
entity organized on an Interconnection-wide basis promotes effective and 
efficient administration of bulk-power system reliability and should be 
approved. Such regulation may provide that the Commission may assign the 
ERO's authority to enforce reliability standards under paragraph (1) 
directly to a regional entity consistent with the requirements of this 
paragraph.
    ``(5) The Commission may take such action as is necessary or 
appropriate against the ERO or a regional entity to ensure compliance 
with a reliability standard or any Commission order affecting the ERO or 
a regional entity.

[[Page 119 STAT. 945]]

    ``(6) Any penalty imposed under this section shall bear a reasonable 
relation to the seriousness of the violation and shall take into 
consideration the efforts of such user, owner, or operator to remedy the 
violation in a timely manner.
    ``(f) Changes in Electric Reliability Organization Rules.--The 
Electric Reliability Organization shall file with the Commission for 
approval any proposed rule or proposed rule change, accompanied by an 
explanation of its basis and purpose. The Commission, upon its own 
motion or complaint, may propose a change to the rules of the ERO. A 
proposed rule or proposed rule change shall take effect upon a finding 
by the Commission, after notice and opportunity for comment, that the 
change is just, reasonable, not unduly discriminatory or preferential, 
is in the public interest, and satisfies the requirements of subsection 
(c).
    ``(g) Reliability Reports.--The ERO shall conduct periodic 
assessments of the reliability and adequacy of the bulk-power system in 
North America.
    ``(h) Coordination With Canada and Mexico.--The President is urged 
to negotiate international agreements with the governments of Canada and 
Mexico to provide for effective compliance with reliability standards 
and the effectiveness of the ERO in the United States and Canada or 
Mexico.
    ``(i) Savings Provisions.--(1) The ERO shall have authority to 
develop and enforce compliance with reliability standards for only the 
bulk-power system.
    ``(2) This section does not authorize the ERO or the Commission to 
order the construction of additional generation or transmission capacity 
or to set and enforce compliance with standards for adequacy or safety 
of electric facilities or services.
    ``(3) Nothing in this section shall be construed to preempt any 
authority of any State to take action to ensure the safety, adequacy, 
and reliability of electric service within that State, as long as such 
action is not inconsistent with any reliability standard, except that 
the State of New York may establish rules that result in greater 
reliability within that State, as long as such action does not result in 
lesser reliability outside the State than that provided by the 
reliability standards.
    ``(4) <<NOTE: Deadline. Standards.>> Within 90 days of the 
application of the Electric Reliability Organization or other affected 
party, and after notice and opportunity for comment, the Commission 
shall issue a final order determining whether a State action is 
inconsistent with a reliability standard, taking into consideration any 
recommendation of the ERO.

    ``(5) The Commission, after consultation with the ERO and the State 
taking action, may stay the effectiveness of any State action, pending 
the Commission's issuance of a final order.
    ``(j) <<NOTE: Establishment.>> Regional Advisory Bodies.--The 
Commission shall establish a regional advisory body on the petition of 
at least two-thirds of the States within a region that have more than 
one-half of their electric load served within the region. A regional 
advisory body shall be composed of one member from each participating 
State in the region, appointed by the Governor of each State, and may 
include representatives of agencies, States, and provinces outside the 
United States. A regional advisory body may provide advice to the 
Electric Reliability Organization, a regional entity, or the Commission 
regarding the governance of an existing or proposed regional entity 
within the same region, whether a standard

[[Page 119 STAT. 946]]

proposed to apply within the region is just, reasonable, not unduly 
discriminatory or preferential, and in the public interest, whether fees 
proposed to be assessed within the region are just, reasonable, not 
unduly discriminatory or preferential, and in the public interest and 
any other responsibilities requested by the Commission. The Commission 
may give deference to the advice of any such regional advisory body if 
that body is organized on an Interconnection-wide basis.

    ``(k) Alaska and Hawaii.--The provisions of this section do not 
apply to Alaska or Hawaii.''.
    (b) <<NOTE: 16 USC 824o note.>> Status of ERO.--The Electric 
Reliability Organization certified by the Federal Energy Regulatory 
Commission under section 215(c) of the Federal Power Act and any 
regional entity delegated enforcement authority pursuant to section 
215(e)(4) of that Act are not departments, agencies, or 
instrumentalities of the United States Government.

    (c) <<NOTE: 16 USC 824o note.>> Access Approvals by Federal 
Agencies.--Federal agencies responsible for approving access to electric 
transmission or distribution facilities located on lands within the 
United States shall, in accordance with applicable law, expedite any 
Federal agency approvals that are necessary to allow the owners or 
operators of such facilities to comply with any reliability standard, 
approved by the Commission under section 215 of the Federal Power Act, 
that pertains to vegetation management, electric service restoration, or 
resolution of situations that imminently endanger the reliability or 
safety of the facilities.

          Subtitle B--Transmission Infrastructure Modernization

SEC. 1221. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES.

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

``SEC. 216. <<NOTE: 16 USC 824p.>> SITING OF INTERSTATE ELECTRIC 
            TRANSMISSION FACILITIES.

    ``(a) <<NOTE: Deadlines.>> Designation of National Interest Electric 
Transmission Corridors.--(1) Not later than 1 year after the date of 
enactment of this section and every 3 years thereafter, the Secretary of 
Energy (referred to in this section as the `Secretary'), in consultation 
with affected States, shall conduct a study of electric transmission 
congestion.

    ``(2) <<NOTE: Reports.>> After considering alternatives and 
recommendations from interested parties (including an opportunity for 
comment from affected States), the Secretary shall issue a report, based 
on the study, which may designate any geographic area experiencing 
electric energy transmission capacity constraints or congestion that 
adversely affects consumers as a national interest electric transmission 
corridor.

    ``(3) The Secretary shall conduct the study and issue the report in 
consultation with any appropriate regional entity referred to in section 
215.
    ``(4) In determining whether to designate a national interest 
electric transmission corridor under paragraph (2), the Secretary may 
consider whether--

[[Page 119 STAT. 947]]

            ``(A) the economic vitality and development of the corridor, 
        or the end markets served by the corridor, may be constrained by 
        lack of adequate or reasonably priced electricity;
            ``(B)(i) economic growth in the corridor, or the end markets 
        served by the corridor, may be jeopardized by reliance on 
        limited sources of energy; and
            ``(ii) a diversification of supply is warranted;
            ``(C) the energy independence of the United States would be 
        served by the designation;
            ``(D) the designation would be in the interest of national 
        energy policy; and
            ``(E) the designation would enhance national defense and 
        homeland security.

    ``(b) Construction Permit.--Except as provided in subsection (i), 
the Commission may, after notice and an opportunity for hearing, issue 
one or more permits for the construction or modification of electric 
transmission facilities in a national interest electric transmission 
corridor designated by the Secretary under subsection (a) if the 
Commission finds that--
            ``(1)(A) a State in which the transmission facilities are to 
        be constructed or modified does not have authority to--
                    ``(i) approve the siting of the facilities; or
                    ``(ii) consider the interstate benefits expected to 
                be achieved by the proposed construction or modification 
                of transmission facilities in the State;
            ``(B) the applicant for a permit is a transmitting utility 
        under this Act but does not qualify to apply for a permit or 
        siting approval for the proposed project in a State because the 
        applicant does not serve end-use customers in the State; or
            ``(C) a State commission or other entity that has authority 
        to approve the siting of the facilities has--
                    ``(i) withheld approval for more than 1 year after 
                the filing of an application seeking approval pursuant 
                to applicable law or 1 year after the designation of the 
                relevant national interest electric transmission 
                corridor, whichever is later; or
                    ``(ii) conditioned its approval in such a manner 
                that the proposed construction or modification will not 
                significantly reduce transmission congestion in 
                interstate commerce or is not economically feasible;
            ``(2) the facilities to be authorized by the permit will be 
        used for the transmission of electric energy in interstate 
        commerce;
            ``(3) the proposed construction or modification is 
        consistent with the public interest;
            ``(4) the proposed construction or modification will 
        significantly reduce transmission congestion in interstate 
        commerce and protects or benefits consumers;
            ``(5) the proposed construction or modification is 
        consistent with sound national energy policy and will enhance 
        energy independence; and
            ``(6) the proposed modification will maximize, to the extent 
        reasonable and economical, the transmission capabilities of 
        existing towers or structures.

    ``(c) Permit Applications.--(1) Permit applications under subsection 
(b) shall be made in writing to the Commission.

[[Page 119 STAT. 948]]

    ``(2) <<NOTE: Regulations.>> The Commission shall issue rules 
specifying--
            ``(A) the form of the application;
            ``(B) the information to be contained in the application; 
        and
            ``(C) the manner of service of notice of the permit 
        application on interested persons.

    ``(d) Comments.--In any proceeding before the Commission under 
subsection (b), the Commission shall afford each State in which a 
transmission facility covered by the permit is or will be located, each 
affected Federal agency and Indian tribe, private property owners, and 
other interested persons, a reasonable opportunity to present their 
views and recommendations with respect to the need for and impact of a 
facility covered by the permit.
    ``(e) Rights-of-Way.--(1) In the case of a permit under subsection 
(b) for electric transmission facilities to be located on property other 
than property owned by the United States or a State, if the permit 
holder cannot acquire by contract, or is unable to agree with the owner 
of the property to the compensation to be paid for, the necessary right-
of-way to construct or modify the transmission facilities, the permit 
holder may acquire the right-of-way by the exercise of the right of 
eminent domain in the district court of the United States for the 
district in which the property concerned is located, or in the 
appropriate court of the State in which the property is located.
    ``(2) Any right-of-way acquired under paragraph (1) shall be used 
exclusively for the construction or modification of electric 
transmission facilities within a reasonable period of time after the 
acquisition.
    ``(3) The practice and procedure in any action or proceeding under 
this subsection in the district court of the United States shall conform 
as nearly as practicable to the practice and procedure in a similar 
action or proceeding in the courts of the State in which the property is 
located.
    ``(4) Nothing in this subsection shall be construed to authorize the 
use of eminent domain to acquire a right-of-way for any purpose other 
than the construction, modification, operation, or maintenance of 
electric transmission facilities and related facilities. The right-of-
way cannot be used for any other purpose, and the right-of-way shall 
terminate upon the termination of the use for which the right-of-way was 
acquired.
    ``(f) Compensation.--(1) Any right-of-way acquired pursuant to 
subsection (e) shall be considered a taking of private property for 
which just compensation is due.
    ``(2) Just compensation shall be an amount equal to the fair market 
value (including applicable severance damages) of the property taken on 
the date of the exercise of eminent domain authority.
    ``(g) State Law.--Nothing in this section precludes any person from 
constructing or modifying any transmission facility in accordance with 
State law.
    ``(h) Coordination of Federal Authorizations for Transmission 
Facilities.--(1) In this subsection:
            ``(A) The term `Federal authorization' means any 
        authorization required under Federal law in order to site a 
        transmission facility.
            ``(B) The term `Federal authorization' includes such 
        permits, special use authorizations, certifications, opinions, 
        or other

[[Page 119 STAT. 949]]

        approvals as may be required under Federal law in order to site 
        a transmission facility.

    ``(2) The Department of Energy shall act as the lead agency for 
purposes of coordinating all applicable Federal authorizations and 
related environmental reviews of the facility.
    ``(3) To the maximum extent practicable under applicable Federal 
law, the Secretary shall coordinate the Federal authorization and review 
process under this subsection with any Indian tribes, multistate 
entities, and State agencies that are responsible for conducting any 
separate permitting and environmental reviews of the facility, to ensure 
timely and efficient review and permit decisions.
    ``(4)(A) As head of the lead agency, the Secretary, in consultation 
with agencies responsible for Federal authorizations and, as 
appropriate, with Indian tribes, multistate entities, and State agencies 
that are willing to coordinate their own separate permitting and 
environmental reviews with the Federal authorization and environmental 
reviews, shall establish prompt and binding intermediate milestones and 
ultimate deadlines for the review of, and Federal authorization 
decisions relating to, the proposed facility.
    ``(B) <<NOTE: Deadline.>> The Secretary shall ensure that, once an 
application has been submitted with such data as the Secretary considers 
necessary, all permit decisions and related environmental reviews under 
all applicable Federal laws shall be completed--
            ``(i) within 1 year; or
            ``(ii) if a requirement of another provision of Federal law 
        does not permit compliance with clause (i), as soon thereafter 
        as is practicable.

    ``(C) <<NOTE: Deadline.>> The Secretary shall provide an expeditious 
pre-application mechanism for prospective applicants to confer with the 
agencies involved to have each such agency determine and communicate to 
the prospective applicant not later than 60 days after the prospective 
applicant submits a request for such information concerning--
            ``(i) the likelihood of approval for a potential facility; 
        and
            ``(ii) key issues of concern to the agencies and public.

    ``(5)(A) As lead agency head, the Secretary, in consultation with 
the affected agencies, shall prepare a single environmental review 
document, which shall be used as the basis for all decisions on the 
proposed project under Federal law.
    ``(B) The Secretary and the heads of other agencies shall streamline 
the review and permitting of transmission within corridors designated 
under section 503 of the Federal Land Policy and Management Act (43 
U.S.C. 1763) by fully taking into account prior analyses and decisions 
relating to the corridors.
    ``(C) The document shall include consideration by the relevant 
agencies of any applicable criteria or other matters as required under 
applicable law.
    ``(6)(A) If any agency has denied a Federal authorization required 
for a transmission facility, or has failed to act by the deadline 
established by the Secretary pursuant to this section for deciding 
whether to issue the authorization, the applicant or any State in which 
the facility would be located may file an appeal with the President, who 
shall, in consultation with the affected agency, review the denial or 
failure to take action on the pending application.
    ``(B) Based on the overall record and in consultation with the 
affected agency, the President may--

[[Page 119 STAT. 950]]

            ``(i) issue the necessary authorization with any appropriate 
        conditions; or
            ``(ii) deny the application.

    ``(C) <<NOTE: President. Deadline.>> The President shall issue a 
decision not later than 90 days after the date of the filing of the 
appeal.

    ``(D) <<NOTE: President.>> In making a decision under this 
paragraph, the President shall comply with applicable requirements of 
Federal law, including any requirements of--
            ``(i) the National Forest Management Act of 1976 (16 U.S.C. 
        472a et seq.);
            ``(ii) the Endangered Species Act of 1973 (16 U.S.C. 1531 et 
        seq.);
            ``(iii) the Federal Water Pollution Control Act (33 U.S.C. 
        1251 et seq.);
            ``(iv) the National Environmental Policy Act of 1969 (42 
        U.S.C. 4321 et seq.); and
            ``(v) the Federal Land Policy and Management Act of 1976 (43 
        U.S.C. 1701 et seq.).

    ``(7)(A) <<NOTE: Deadline. Regulations.>> Not later than 18 months 
after the date of enactment of this section, the Secretary shall issue 
any regulations necessary to implement this subsection.

    ``(B)(i) <<NOTE: Deadline. Memorandum.>> Not later than 1 year after 
the date of enactment of this section, the Secretary and the heads of 
all Federal agencies with authority to issue Federal authorizations 
shall enter into a memorandum of understanding to ensure the timely and 
coordinated review and permitting of electricity transmission 
facilities.

    ``(ii) Interested Indian tribes, multistate entities, and State 
agencies may enter the memorandum of understanding.
    ``(C) The head of each Federal agency with authority to issue a 
Federal authorization shall designate a senior official responsible for, 
and dedicate sufficient other staff and resources to ensure, full 
implementation of the regulations and memorandum required under this 
paragraph.
    ``(8)(A) Each Federal land use authorization for an electricity 
transmission facility shall be issued--
            ``(i) for a duration, as determined by the Secretary, 
        commensurate with the anticipated use of the facility; and
            ``(ii) with appropriate authority to manage the right-of-way 
        for reliability and environmental protection.

    ``(B) On the expiration of the authorization (including an 
authorization issued before the date of enactment of this section), the 
authorization shall be reviewed for renewal taking fully into account 
reliance on such electricity infrastructure, recognizing the importance 
of the authorization for public health, safety, and economic welfare and 
as a legitimate use of Federal land.
    ``(9) In exercising the responsibilities under this section, the 
Secretary shall consult regularly with--
            ``(A) the Federal Energy Regulatory Commission;
            ``(B) electric reliability organizations (including related 
        regional entities) approved by the Commission; and
            ``(C) Transmission Organizations approved by the Commission.

    ``(i) Interstate Compacts.--(1) The consent of Congress is given for 
three or more contiguous States to enter into an interstate compact, 
subject to approval by Congress, establishing regional transmission 
siting agencies to--

[[Page 119 STAT. 951]]

            ``(A) facilitate siting of future electric energy 
        transmission facilities within those States; and
            ``(B) carry out the electric energy transmission siting 
        responsibilities of those States.

    ``(2) The Secretary may provide technical assistance to regional 
transmission siting agencies established under this subsection.
    ``(3) The regional transmission siting agencies shall have the 
authority to review, certify, and permit siting of transmission 
facilities, including facilities in national interest electric 
transmission corridors (other than facilities on property owned by the 
United States).
    ``(4) The Commission shall have no authority to issue a permit for 
the construction or modification of an electric transmission facility 
within a State that is a party to a compact, unless the members of the 
compact are in disagreement and the Secretary makes, after notice and an 
opportunity for a hearing, the finding described in subsection 
(b)(1)(C).
    ``(j) Relationship to Other Laws.--(1) Except as specifically 
provided, nothing in this section affects any requirement of an 
environmental law of the United States, including the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
    ``(2) Subsection (h)(6) shall not apply to any unit of the National 
Park System, the National Wildlife Refuge System, the National Wild and 
Scenic Rivers System, the National Trails System, the National 
Wilderness Preservation System, or a National Monument.
    ``(k) ERCOT.--This section shall not apply within the area referred 
to in section 212(k)(2)(A).''.
    (b) Reports to Congress on Corridors and Rights-of-Way on Federal 
Lands.--Not later than 90 days after the date of enactment of this Act, 
the Secretary of the Interior, the Secretary, the Secretary of 
Agriculture, and the Chairman of the Council on Environmental Quality 
shall submit to Congress a joint report identifying--
            (1)(A) all existing designated transmission and distribution 
        corridors on Federal land and the status of work related to 
        proposed transmission and distribution corridor designations 
        under title V of the Federal Land Policy and Management Act of 
        1976 (43 U.S.C. 1761 et seq.);
            (B) the schedule for completing the work;
            (C) any impediments to completing the work; and
            (D) steps that Congress could take to expedite the process;
            (2)(A) the number of pending applications to locate 
        transmission facilities on Federal land;
            (B) key information relating to each such facility;
            (C) how long each application has been pending;
            (D) the schedule for issuing a timely decision as to each 
        facility; and
            (E) progress in incorporating existing and new such rights-
        of-way into relevant land use and resource management plans or 
        the equivalent of those plans; and
            (3)(A) the number of existing transmission and distribution 
        rights-of-way on Federal land that will come up for renewal 
        within the following 5-, 10-, and 15-year periods; and
            (B) a description of how the Secretaries plan to manage the 
        renewals.

[[Page 119 STAT. 952]]

SEC. 1222. <<NOTE: 42 USC 16421.>> THIRD-PARTY FINANCE.

    (a) Existing Facilities.--The Secretary, acting through the 
Administrator of the Western Area Power Administration (hereinafter in 
this section referred to as ``WAPA''), or through the Administrator of 
the Southwestern Power Administration (hereinafter in this section 
referred to as ``SWPA''), or both, may design, develop, construct, 
operate, maintain, or own, or participate with other entities in 
designing, developing, constructing, operating, maintaining, or owning, 
an electric power transmission facility and related facilities 
(``Project'') needed to upgrade existing transmission facilities owned 
by SWPA or WAPA if the Secretary, in consultation with the applicable 
Administrator, determines that the proposed Project--
            (1)(A) is located in a national interest electric 
        transmission corridor designated under section 216(a) of the 
        Federal Power Act and will reduce congestion of electric 
        transmission in interstate commerce; or
            (B) is necessary to accommodate an actual or projected 
        increase in demand for electric transmission capacity;
            (2) is consistent with--
                    (A) transmission needs identified, in a transmission 
                expansion plan or otherwise, by the appropriate 
                Transmission Organization (as defined in the Federal 
                Power Act), if any, or approved regional reliability 
                organization; and
                    (B) efficient and reliable operation of the 
                transmission grid; and
            (3) would be operated in conformance with prudent utility 
        practice.

    (b) New Facilities.--The Secretary, acting through WAPA or SWPA, or 
both, may design, develop, construct, operate, maintain, or own, or 
participate with other entities in designing, developing, constructing, 
operating, maintaining, or owning, a new electric power transmission 
facility and related facilities (``Project'') located within any State 
in which WAPA or SWPA operates if the Secretary, in consultation with 
the applicable Administrator, determines that the proposed Project--
            (1)(A) is located in an area designated under section 216(a) 
        of the Federal Power Act and will reduce congestion of electric 
        transmission in interstate commerce; or
            (B) is necessary to accommodate an actual or projected 
        increase in demand for electric transmission capacity;
            (2) is consistent with--
                    (A) transmission needs identified, in a transmission 
                expansion plan or otherwise, by the appropriate 
                Transmission Organization (as defined in the Federal 
                Power Act) if any, or approved regional reliability 
                organization; and
                    (B) efficient and reliable operation of the 
                transmission grid;
            (3) will be operated in conformance with prudent utility 
        practice;
            (4) will be operated by, or in conformance with the rules 
        of, the appropriate (A) Transmission Organization, if any, or 
        (B) if such an organization does not exist, regional reliability 
        organization; and

[[Page 119 STAT. 953]]

            (5) will not duplicate the functions of existing 
        transmission facilities or proposed facilities which are the 
        subject of ongoing or approved siting and related permitting 
        proceedings.

    (c) Other Funds.--
            (1) In general.--In carrying out a Project under subsection 
        (a) or (b), the Secretary may accept and use funds contributed 
        by another entity for the purpose of carrying out the Project.
            (2) Availability.--The contributed funds shall be available 
        for expenditure for the purpose of carrying out the Project--
                    (A) without fiscal year limitation; and
                    (B) as if the funds had been appropriated 
                specifically for that Project.
            (3) Allocation of costs.--In carrying out a Project under 
        subsection (a) or (b), any costs of the Project not paid for by 
        contributions from another entity shall be collected through 
        rates charged to customers using the new transmission capability 
        provided by the Project and allocated equitably among these 
        project beneficiaries using the new transmission capability.

    (d) Relationship to Other Laws.--Nothing in this section affects any 
requirement of--
            (1) any Federal environmental law, including the National 
        Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.);
            (2) any Federal or State law relating to the siting of 
        energy facilities; or
            (3) any existing authorizing statutes.

    (e) Savings Clause.--Nothing in this section shall constrain or 
restrict an Administrator in the utilization of other authority 
delegated to the Administrator of WAPA or SWPA.
    (f) Secretarial Determinations.--Any determination made pursuant to 
subsections (a) or (b) shall be based on findings by the Secretary using 
the best available data.
    (g) Maximum Funding Amount.--The Secretary shall not accept and use 
more than $100,000,000 under subsection (c)(1) for the period 
encompassing fiscal years 2006 through 2015.

SEC. 1223. <<NOTE: 42 USC 16422.>> ADVANCED TRANSMISSION TECHNOLOGIES.

    (a) Definition of Advanced Transmission Technology.--In this 
section, the term ``advanced transmission technology'' means a 
technology that increases the capacity, efficiency, or reliability of an 
existing or new transmission facility, including--
            (1) high-temperature lines (including superconducting 
        cables);
            (2) underground cables;
            (3) advanced conductor technology (including advanced 
        composite conductors, high-temperature low-sag conductors, and 
        fiber optic temperature sensing conductors);
            (4) high-capacity ceramic electric wire, connectors, and 
        insulators;
            (5) optimized transmission line configurations (including 
        multiple phased transmission lines);
            (6) modular equipment;
            (7) wireless power transmission;
            (8) ultra-high voltage lines;
            (9) high-voltage DC technology;
            (10) flexible AC transmission systems;

[[Page 119 STAT. 954]]

            (11) energy storage devices (including pumped hydro, 
        compressed air, superconducting magnetic energy storage, 
        flywheels, and batteries);
            (12) controllable load;
            (13) distributed generation (including PV, fuel cells, and 
        microturbines);
            (14) enhanced power device monitoring;
            (15) direct system state sensors;
            (16) fiber optic technologies;
            (17) power electronics and related software (including real 
        time monitoring and analytical software);
            (18) mobile transformers and mobile substations; and
            (19) any other technologies the Commission considers 
        appropriate.

    (b) Authority.--In carrying out the Federal Power Act (16 U.S.C. 
791a et seq.) and the Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2601 et seq.), the Commission shall encourage, as appropriate, 
the deployment of advanced transmission technologies.

SEC. 1224. <<NOTE: 42 USC 16423.>> ADVANCED POWER SYSTEM TECHNOLOGY 
            INCENTIVE PROGRAM.

    (a) Program.--The Secretary is authorized to establish an Advanced 
Power System Technology Incentive Program to support the deployment of 
certain advanced power system technologies and to improve and protect 
certain critical governmental, industrial, and commercial processes. 
Funds provided under this section shall be used by the Secretary to make 
incentive payments to eligible owners or operators of advanced power 
system technologies to increase power generation through enhanced 
operational, economic, and environmental performance. Payments under 
this section may only be made upon receipt by the Secretary of an 
incentive payment application establishing an applicant as either--
            (1) a qualifying advanced power system technology facility; 
        or
            (2) a qualifying security and assured power facility.

    (b) Incentives.--Subject to availability of funds, a payment of 1.8 
cents per kilowatt-hour shall be paid to the owner or operator of a 
qualifying advanced power system technology facility under this section 
for electricity generated at such facility. An additional 0.7 cents per 
kilowatt-hour shall be paid to the owner or operator of a qualifying 
security and assured power facility for electricity generated at such 
facility. Any facility qualifying under this section shall be eligible 
for an incentive payment for up to, but not more than, the first 
10,000,000 kilowatt-hours produced in any fiscal year.
    (c) Eligibility.--For purposes of this section:
            (1) Qualifying advanced power system technology facility.--
        The term ``qualifying advanced power system technology 
        facility'' means a facility using an advanced fuel cell, 
        turbine, or hybrid power system or power storage system to 
        generate or store electric energy.
            (2) Qualifying security and assured power facility.--The 
        term ``qualifying security and assured power facility'' means a 
        qualifying advanced power system technology facility determined 
        by the Secretary, in consultation with the Secretary of Homeland 
        Security, to be in critical need of secure, reliable,

[[Page 119 STAT. 955]]

        rapidly available, high-quality power for critical governmental, 
        industrial, or commercial applications.

    (d) Authorization.--There are authorized to be appropriated to the 
Secretary for the purposes of this section, $10,000,000 for each of the 
fiscal years 2006 through 2012.

             Subtitle C--Transmission Operation Improvements

SEC. 1231. OPEN NONDISCRIMINATORY ACCESS.

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

``SEC. 211A. <<NOTE: 16 USC 824j-1.>> OPEN ACCESS BY UNREGULATED 
            TRANSMITTING UTILITIES.

    ``(a) Definition of Unregulated Transmitting Utility.--In this 
section, the term `unregulated transmitting utility' means an entity 
that--
            ``(1) owns or operates facilities used for the transmission 
        of electric energy in interstate commerce; and
            ``(2) is an entity described in section 201(f).

    ``(b) Transmission Operation Services.--Subject to section 212(h), 
the Commission may, by rule or order, require an unregulated 
transmitting utility to provide transmission services--
            ``(1) at rates that are comparable to those that the 
        unregulated transmitting utility charges itself; and
            ``(2) on terms and conditions (not relating to rates) that 
        are comparable to those under which the unregulated transmitting 
        utility provides transmission services to itself and that are 
        not unduly discriminatory or preferential.

    ``(c) Exemption.--The Commission shall exempt from any rule or order 
under this section any unregulated transmitting utility that--
            ``(1) sells not more than 4,000,000 megawatt hours of 
        electricity per year;
            ``(2) does not own or operate any transmission facilities 
        that are necessary for operating an interconnected transmission 
        system (or any portion of the system); or
            ``(3) meets other criteria the Commission determines to be 
        in the public interest.

    ``(d) Local Distribution Facilities.--The requirements of subsection 
(b) shall not apply to facilities used in local distribution.
    ``(e) Exemption Termination.--If the Commission, after an 
evidentiary hearing held on a complaint and after giving consideration 
to reliability standards established under section 215, finds on the 
basis of a preponderance of the evidence that any exemption granted 
pursuant to subsection (c) unreasonably impairs the continued 
reliability of an interconnected transmission system, the Commission 
shall revoke the exemption granted to the transmitting utility.
    ``(f) Application to Unregulated Transmitting Utilities.--The rate 
changing procedures applicable to public utilities under subsections (c) 
and (d) of section 205 are applicable to unregulated transmitting 
utilities for purposes of this section.

[[Page 119 STAT. 956]]

    ``(g) Remand.--In exercising authority under subsection (b)(1), the 
Commission may remand transmission rates to an unregulated transmitting 
utility for review and revision if necessary to meet the requirements of 
subsection (b).
    ``(h) Other Requests.--The provision of transmission services under 
subsection (b) does not preclude a request for transmission services 
under section 211.
    ``(i) Limitation.--The Commission may not require a State or 
municipality to take action under this section that would violate a 
private activity bond rule for purposes of section 141 of the Internal 
Revenue Code of 1986.
    ``(j) Transfer of Control of Transmitting Facilities.--Nothing in 
this section authorizes the Commission to require an unregulated 
transmitting utility to transfer control or operational control of its 
transmitting facilities to a Transmission Organization that is 
designated to provide nondiscriminatory transmission access.''.

SEC. 1232. <<NOTE: 42 USC 16431.>> FEDERAL UTILITY PARTICIPATION IN 
            TRANSMISSION ORGANIZATIONS.

    (a) Definitions.--In this section:
            (1) Appropriate federal regulatory authority.--The term 
        ``appropriate Federal regulatory authority'' means--
                    (A) in the case of a Federal power marketing agency, 
                the Secretary, except that the Secretary may designate 
                the Administrator of a Federal power marketing agency to 
                act as the appropriate Federal regulatory authority with 
                respect to the transmission system of the Federal power 
                marketing agency; and
                    (B) in the case of the Tennessee Valley Authority, 
                the Board of Directors of the Tennessee Valley 
                Authority.
            (2) Federal power marketing agency.--The term ``Federal 
        power marketing agency'' has the meaning given the term in 
        section 3 of the Federal Power Act (16 U.S.C. 796).
            (3) Federal utility.--The term ``Federal utility'' means--
                    (A) a Federal power marketing agency; or
                    (B) the Tennessee Valley Authority.
            (4) Transmission organization.--The term ``Transmission 
        Organization'' has the meaning given the term in section 3 of 
        the Federal Power Act (16 U.S.C. 796).
            (5) Transmission system.--The term ``transmission system'' 
        means an electric transmission facility owned, leased, or 
        contracted for by the United States and operated by a Federal 
        utility.

    (b) Transfer.--The appropriate Federal regulatory authority may 
enter into a contract, agreement, or other arrangement transferring 
control and use of all or part of the transmission system of a Federal 
utility to a Transmission Organization.
    (c) Contents.--The contract, agreement, or arrangement shall 
include--
            (1) performance standards for operation and use of the 
        transmission system that the head of the Federal utility 
        determines are necessary or appropriate, including standards 
        that ensure--
                    (A) recovery of all of the costs and expenses of the 
                Federal utility related to the transmission facilities 
                that

[[Page 119 STAT. 957]]

                are the subject of the contract, agreement, or other 
                arrangement;
                    (B) consistency with existing contracts and third-
                party financing arrangements; and
                    (C) consistency with the statutory authorities, 
                obligations, and limitations of the Federal utility;
            (2) provisions for monitoring and oversight by the Federal 
        utility of the Transmission Organization's terms and conditions 
        of the contract, agreement, or other arrangement, including a 
        provision for the resolution of disputes through arbitration or 
        other means with the Transmission Organization or with other 
        participants, notwithstanding the obligations and limitations of 
        any other law regarding arbitration; and
            (3) a provision that allows the Federal utility to withdraw 
        from the Transmission Organization and terminate the contract, 
        agreement, or other arrangement in accordance with its terms.

    (d) Commission.--Neither this section, actions taken pursuant to 
this section, nor any other transaction of a Federal utility 
participating in a Transmission Organization shall confer on the 
Commission jurisdiction or authority over--
            (1) the electric generation assets, electric capacity, or 
        energy of the Federal utility that the Federal utility is 
        authorized by law to market; or
            (2) the power sales activities of the Federal utility.

    (e) Existing Statutory and Other Obligations.--
            (1) System operation requirements.--No statutory provision 
        requiring or authorizing a Federal utility to transmit electric 
        power or to construct, operate, or maintain the transmission 
        system of the Federal utility prohibits a transfer of control 
        and use of the transmission system pursuant to, and subject to, 
        the requirements of this section.
            (2) Other obligations.--This subsection does not--
                    (A) suspend, or exempt any Federal utility from, any 
                provision of Federal law in effect on the date of 
                enactment of this Act, including any requirement or 
                direction relating to the use of the transmission system 
                of the Federal utility, environmental protection, fish 
                and wildlife protection, flood control, navigation, 
                water delivery, or recreation; or
                    (B) authorize abrogation of any contract or treaty 
                obligation.
            (3) Conforming amendment.--Section 311 of the Energy and 
        Water Development Appropriations Act, 2001 (16 U.S.C. 824n) is 
        repealed.

SEC. 1233. NATIVE LOAD SERVICE OBLIGATION.

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

``SEC. 217. <<NOTE: 16 USC 824q.>> NATIVE LOAD SERVICE OBLIGATION.

    ``(a) Definitions.--In this section:
            ``(1) The term `distribution utility' means an electric 
        utility that has a service obligation to end-users or to a State 
        utility or electric cooperative that, directly or indirectly, 
        through one or more additional State utilities or electric 
        cooperatives, provides electric service to end-users.
            ``(2) The term `load-serving entity' means a distribution 
        utility or an electric utility that has a service obligation.

[[Page 119 STAT. 958]]

            ``(3) The term `service obligation' means a requirement 
        applicable to, or the exercise of authority granted to, an 
        electric utility under Federal, State, or local law or under 
        long-term contracts to provide electric service to end-users or 
        to a distribution utility.
            ``(4) The term `State utility' means a State or any 
        political subdivision of a State, or any agency, authority, or 
        instrumentality of any one or more of the foregoing, or a 
        corporation that is wholly owned, directly or indirectly, by any 
        one or more of the foregoing, competent to carry on the business 
        of developing, transmitting, utilizing, or distributing power.

    ``(b) <<NOTE: Applicability.>> Meeting Service Obligations.--(1) 
Paragraph (2) applies to any load-serving entity that, as of the date of 
enactment of this section--
            ``(A) owns generation facilities, markets the output of 
        Federal generation facilities, or holds rights under one or more 
        wholesale contracts to purchase electric energy, for the purpose 
        of meeting a service obligation; and
            ``(B) by reason of ownership of transmission facilities, or 
        one or more contracts or service agreements for firm 
        transmission service, holds firm transmission rights for 
        delivery of the output of the generation facilities or the 
        purchased energy to meet the service obligation.

    ``(2) Any load-serving entity described in paragraph (1) is entitled 
to use the firm transmission rights, or, equivalent tradable or 
financial transmission rights, in order to deliver the output or 
purchased energy, or the output of other generating facilities or 
purchased energy to the extent deliverable using the rights, to the 
extent required to meet the service obligation of the load-serving 
entity.
    ``(3)(A) To the extent that all or a portion of the service 
obligation covered by the firm transmission rights or equivalent 
tradable or financial transmission rights is transferred to another 
load-serving entity, the successor load-serving entity shall be entitled 
to use the firm transmission rights or equivalent tradable or financial 
transmission rights associated with the transferred service obligation.
    ``(B) Subsequent transfers to another load-serving entity, or back 
to the original load-serving entity, shall be entitled to the same 
rights.
    ``(4) The Commission shall exercise the authority of the Commission 
under this Act in a manner that facilitates the planning and expansion 
of transmission facilities to meet the reasonable needs of load-serving 
entities to satisfy the service obligations of the load-serving 
entities, and enables load-serving entities to secure firm transmission 
rights (or equivalent tradable or financial rights) on a long-term basis 
for long-term power supply arrangements made, or planned, to meet such 
needs.
    ``(c) Allocation of Transmission Rights.--Nothing in subsections 
(b)(1), (b)(2), and (b)(3) of this section shall affect any existing or 
future methodology employed by a Transmission Organization for 
allocating or auctioning transmission rights if such Transmission 
Organization was authorized by the Commission to allocate or auction 
financial transmission rights on its system as of January 1, 2005, and 
the Commission determines that any future allocation or auction is just, 
reasonable and not unduly discriminatory or preferential, provided, 
however, that if such a Transmission

[[Page 119 STAT. 959]]

Organization never allocated financial transmission rights on its system 
that pertained to a period before January 1, 2005, with respect to any 
application by such Transmission Organization that would change its 
methodology the Commission shall exercise its authority in a manner 
consistent with the Act and that takes into account the policies 
expressed in subsections (b)(1), (b)(2), and (b)(3) as applied to firm 
transmission rights held by a load-serving entity as of January 1, 2005, 
to the extent the associated generation ownership or power purchase 
arrangements remain in effect.
    ``(d) Certain Transmission Rights.--The Commission may exercise 
authority under this Act to make transmission rights not used to meet an 
obligation covered by subsection (b) available to other entities in a 
manner determined by the Commission to be just, reasonable, and not 
unduly discriminatory or preferential.
    ``(e) Obligation to Build.--Nothing in this Act relieves a load-
serving entity from any obligation under State or local law to build 
transmission or distribution facilities adequate to meet the service 
obligations of the load-serving entity.
    ``(f) Contracts.--Nothing in this section shall provide a basis for 
abrogating any contract or service agreement for firm transmission 
service or rights in effect as of the date of the enactment of this 
subsection. If an ISO in the Western Interconnection had allocated 
financial transmission rights prior to the date of enactment of this 
section but had not done so with respect to one or more load-serving 
entities' firm transmission rights held under contracts to which the 
preceding sentence applies (or held by reason of ownership or future 
ownership of transmission facilities), such load-serving entities may 
not be required, without their consent, to convert such firm 
transmission rights to tradable or financial rights, except where the 
load-serving entity has voluntarily joined the ISO as a participating 
transmission owner (or its successor) in accordance with the ISO tariff.
    ``(g) Water Pumping Facilities.--The Commission shall ensure that 
any entity described in section 201(f) that owns transmission facilities 
used predominately to support its own water pumping facilities shall 
have, with respect to the facilities, protections for transmission 
service comparable to those provided to load-serving entities pursuant 
to this section.
    ``(h) ERCOT.--This section shall not apply within the area referred 
to in section 212(k)(2)(A).
    ``(i) Jurisdiction.--This section does not authorize the Commission 
to take any action not otherwise within the jurisdiction of the 
Commission.
    ``(j) TVA Area.--(1) Subject to paragraphs (2) and (3), for purposes 
of subsection (b)(1)(B), a load-serving entity that is located within 
the service area of the Tennessee Valley Authority and that has a firm 
wholesale power supply contract with the Tennessee Valley Authority 
shall be considered to hold firm transmission rights for the 
transmission of the power provided.
    ``(2) Nothing in this subsection affects the requirements of section 
212(j).
    ``(3) The Commission shall not issue an order on the basis of this 
subsection that is contrary to the purposes of section 212(j).
    ``(k) Effect of Exercising Rights.--An entity that to the extent 
required to meet its service obligations exercises rights

[[Page 119 STAT. 960]]

described in subsection (b) shall not be considered by such action as 
engaging in undue discrimination or preference under this Act.''.
    (b) <<NOTE: Deadline. 16 USC 824q note.>> FERC Rulemaking on Long-
Term Transmission Rights in Organized Markets.--Within 1 year after the 
date of enactment of this section and after notice and an opportunity 
for comment, the Commission shall by rule or order, implement section 
217(b)(4) of the Federal Power Act in Transmission Organizations, as 
defined by that Act with organized electricity markets.

SEC. 1234. <<NOTE: 42 USC 16432.>> STUDY ON THE BENEFITS OF ECONOMIC 
            DISPATCH.

    (a) Study.--The Secretary, in coordination and consultation with the 
States, shall conduct a study on--
            (1) the procedures currently used by electric utilities to 
        perform economic dispatch;
            (2) identifying possible revisions to those procedures to 
        improve the ability of nonutility generation resources to offer 
        their output for sale for the purpose of inclusion in economic 
        dispatch; and
            (3) the potential benefits to residential, commercial, and 
        industrial electricity consumers nationally and in each State if 
        economic dispatch procedures were revised to improve the ability 
        of nonutility generation resources to offer their output for 
        inclusion in economic dispatch.

    (b) Definition.--The term ``economic dispatch'' when used in this 
section means the operation of generation facilities to produce energy 
at the lowest cost to reliably serve consumers, recognizing any 
operational limits of generation and transmission facilities.
    (c) Report to Congress and the States.--Not later than 90 days after 
the date of enactment of this Act, and on a yearly basis following, the 
Secretary shall submit a report to Congress and the States on the 
results of the study conducted under subsection (a), including 
recommendations to Congress and the States for any suggested legislative 
or regulatory changes.

SEC. 1235. PROTECTION OF TRANSMISSION CONTRACTS IN THE PACIFIC 
            NORTHWEST.

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

``SEC. 218. <<NOTE: 16 USC 824r.>> PROTECTION OF TRANSMISSION CONTRACTS 
            IN THE PACIFIC NORTHWEST.

    ``(a) Definition of Electric Utility or Person.--In this section, 
the term `electric utility or person' means an electric utility or 
person that--
            ``(1) as of the date of enactment of the Energy Policy Act 
        of 2005 holds firm transmission rights pursuant to contract or 
        by reason of ownership of transmission facilities; and
            ``(2) is located--
                    ``(A) in the Pacific Northwest, as that region is 
                defined in section 3 of the Pacific Northwest Electric 
                Power Planning and Conservation Act (16 U.S.C. 839a); or
                    ``(B) in that portion of a State included in the 
                geographic area proposed for a regional transmission 
                organization in Commission Docket Number RT01-35 on the 
                date on which that docket was opened.

    ``(b) Protection of Transmission Contracts.--Nothing in this Act 
confers on the Commission the authority to require an electric utility 
or person to convert to tradable or financial rights--

[[Page 119 STAT. 961]]

            ``(1) firm transmission rights described in subsection (a); 
        or
            ``(2) firm transmission rights obtained by exercising 
        contract or tariff rights associated with the firm transmission 
        rights described in subsection (a).''.

SEC. 1236. SENSE OF CONGRESS REGARDING LOCATIONAL INSTALLED CAPACITY 
            MECHANISM.

    (a) Findings.--Congress finds that--
            (1) in regard to a proposal to develop and implement a 
        specific type of locational installed capacity mechanism in New 
        England pending before the Federal Energy Regulatory Commission; 
        and
            (2) the Governors of the States have objected to the 
        proposed mechanism, arguing that the mechanism--
                    (A) would not provide adequate assurance that 
                necessary electric generation capacity or reliability 
                will be provided; and
                    (B) would impose a high cost on consumers and have a 
                significant negative economic impact.

    (b) Sense of Congress.--Congress--
            (1) notes the concerns of the New England States to the 
        proposed mechanism; and
            (2) declares that it is the sense of Congress that the 
        Federal Energy Regulatory Commission should carefully consider 
        the States' objections.

                  Subtitle D--Transmission Rate Reform

SEC. 1241. TRANSMISSION INFRASTRUCTURE INVESTMENT.

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

``SEC. 219. <<NOTE: 16 USC 824s.>> TRANSMISSION INFRASTRUCTURE 
            INVESTMENT.

    ``(a) <<NOTE: Deadline.>> Rulemaking Requirement.--Not later than 1 
year after the date of enactment of this section, the Commission shall 
establish, by rule, incentive-based (including performance-based) rate 
treatments for the transmission of electric energy in interstate 
commerce by public utilities for the purpose of benefitting consumers by 
ensuring reliability and reducing the cost of delivered power by 
reducing transmission congestion.

    ``(b) Contents.--The rule shall--
            ``(1) promote reliable and economically efficient 
        transmission and generation of electricity by promoting capital 
        investment in the enlargement, improvement, maintenance, and 
        operation of all facilities for the transmission of electric 
        energy in interstate commerce, regardless of the ownership of 
        the facilities;
            ``(2) provide a return on equity that attracts new 
        investment in transmission facilities (including related 
        transmission technologies);
            ``(3) encourage deployment of transmission technologies and 
        other measures to increase the capacity and efficiency of 
        existing transmission facilities and improve the operation of 
        the facilities; and
            ``(4) allow recovery of--

[[Page 119 STAT. 962]]

                    ``(A) all prudently incurred costs necessary to 
                comply with mandatory reliability standards issued 
                pursuant to section 215; and
                    ``(B) all prudently incurred costs related to 
                transmission infrastructure development pursuant to 
                section 216.

    ``(c) Incentives.--In the rule issued under this section, the 
Commission shall, to the extent within its jurisdiction, provide for 
incentives to each transmitting utility or electric utility that joins a 
Transmission Organization. The Commission shall ensure that any costs 
recoverable pursuant to this subsection may be recovered by such utility 
through the transmission rates charged by such utility or through the 
transmission rates charged by the Transmission Organization that 
provides transmission service to such utility.
    ``(d) Just and Reasonable Rates.--All rates approved under the rules 
adopted pursuant to this section, including any revisions to the rules, 
are subject to the requirements of sections 205 and 206 that all rates, 
charges, terms, and conditions be just and reasonable and not unduly 
discriminatory or preferential.''.

SEC. 1242. <<NOTE: 42 USC 16441.>> FUNDING NEW INTERCONNECTION AND 
            TRANSMISSION UPGRADES.

    The Commission may approve a participant funding plan that allocates 
costs related to transmission upgrades or new generator interconnection, 
without regard to whether an applicant is a member of a Commission-
approved Transmission Organization, if the plan results in rates that--
            (1) are just and reasonable;
            (2) are not unduly discriminatory or preferential; and
            (3) are otherwise consistent with sections 205 and 206 of 
        the Federal Power Act (16 U.S.C. 824d, 824e).

                     Subtitle E--Amendments to PURPA

SEC. 1251. NET METERING AND ADDITIONAL STANDARDS.

    (a) Adoption of Standards.--Section 111(d) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding 
at the end the following:
            ``(11) Net metering.--Each electric utility shall make 
        available upon request net metering service to any electric 
        consumer that the electric utility serves. For purposes of this 
        paragraph, the term `net metering service' means service to an 
        electric consumer under which electric energy generated by that 
        electric consumer from an eligible on-site generating facility 
        and delivered to the local distribution facilities may be used 
        to offset electric energy provided by the electric utility to 
        the electric consumer during the applicable billing period.
            ``(12) Fuel sources.--Each electric utility shall develop a 
        plan to minimize dependence on 1 fuel source and to ensure that 
        the electric energy it sells to consumers is generated using a 
        diverse range of fuels and technologies, including renewable 
        technologies.
            ``(13) Fossil fuel generation efficiency.--Each electric 
        utility shall develop and implement a 10-year plan to increase 
        the efficiency of its fossil fuel generation.''.

[[Page 119 STAT. 963]]

    (b) Compliance.--
            (1) <<NOTE: Deadlines.>> Time limitations.--Section 112(b) 
        of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
        2622(b)) is amended by adding at the end the following:

    ``(3)(A) Not later than 2 years after the enactment of this 
paragraph, each State regulatory authority (with respect to each 
electric utility for which it has ratemaking authority) and each 
nonregulated electric utility shall commence the consideration referred 
to in section 111, or set a hearing date for such consideration, with 
respect to each standard established by paragraphs (11) through (13) of 
section 111(d).
    ``(B) Not later than 3 years after the date of the enactment of this 
paragraph, each State regulatory authority (with respect to each 
electric utility for which it has ratemaking authority), and each 
nonregulated electric utility, shall complete the consideration, and 
shall make the determination, referred to in section 111 with respect to 
each standard established by paragraphs (11) through (13) of section 
111(d).''.
            (2) Failure to comply.--Section 112(c) of the Public Utility 
        Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended 
        by adding at the end the following: ``In the case of each 
        standard established by paragraphs (11) through (13) of section 
        111(d), the reference contained in this subsection to the date 
        of enactment of this Act shall be deemed to be a reference to 
        the date of enactment of such paragraphs (11) through (13).''.
            (3) Prior state actions.--
                    (A) In general.--Section 112 of the Public Utility 
                Regulatory Policies Act of 1978 (16 U.S.C. 2622) is 
                amended by adding at the end the following:

    ``(d) Prior State Actions.--Subsections (b) and (c) of this section 
shall not apply to the standards established by paragraphs (11) through 
(13) of section 111(d) in the case of any electric utility in a State 
if, before the enactment of this subsection--
            ``(1) the State has implemented for such utility the 
        standard concerned (or a comparable standard);
            ``(2) the State regulatory authority for such State or 
        relevant nonregulated electric utility has conducted a 
        proceeding to consider implementation of the standard concerned 
        (or a comparable standard) for such utility; or
            ``(3) the State legislature has voted on the implementation 
        of such standard (or a comparable standard) for such utility.''.
                    (B) Cross reference.--Section 124 of such Act (16 
                U.S.C. 2634) is amended by adding the following at the 
                end thereof: ``In the case of each standard established 
                by paragraphs (11) through (13) of section 111(d), the 
                reference contained in this subsection to the date of 
                enactment of this Act shall be deemed to be a reference 
                to the date of enactment of such paragraphs (11) through 
                (13).''.

SEC. 1252. SMART METERING.

    (a) In General.--Section 111(d) of the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding at the end 
the following:
            ``(14) <<NOTE: Deadline.>> Time-based metering and 
        communications.--(A) Not later than 18 months after the date of 
        enactment of this paragraph, each electric utility shall offer 
        each of its customer

[[Page 119 STAT. 964]]

        classes, and provide individual customers upon customer request, 
        a time-based rate schedule under which the rate charged by the 
        electric utility varies during different time periods and 
        reflects the variance, if any, in the utility's costs of 
        generating and purchasing electricity at the wholesale level. 
        The time-based rate schedule shall enable the electric consumer 
        to manage energy use and cost through advanced metering and 
        communications technology.
            ``(B) The types of time-based rate schedules that may be 
        offered under the schedule referred to in subparagraph (A) 
        include, among others--
                    ``(i) time-of-use pricing whereby electricity prices 
                are set for a specific time period on an advance or 
                forward basis, typically not changing more often than 
                twice a year, based on the utility's cost of generating 
                and/or purchasing such electricity at the wholesale 
                level for the benefit of the consumer. Prices paid for 
                energy consumed during these periods shall be pre-
                established and known to consumers in advance of such 
                consumption, allowing them to vary their demand and 
                usage in response to such prices and manage their energy 
                costs by shifting usage to a lower cost period or 
                reducing their consumption overall;
                    ``(ii) critical peak pricing whereby time-of-use 
                prices are in effect except for certain peak days, when 
                prices may reflect the costs of generating and/or 
                purchasing electricity at the wholesale level and when 
                consumers may receive additional discounts for reducing 
                peak period energy consumption;
                    ``(iii) real-time pricing whereby electricity prices 
                are set for a specific time period on an advanced or 
                forward basis, reflecting the utility's cost of 
                generating and/or purchasing electricity at the 
                wholesale level, and may change as often as hourly; and
                    ``(iv) credits for consumers with large loads who 
                enter into pre-established peak load reduction 
                agreements that reduce a utility's planned capacity 
                obligations.
            ``(C) Each electric utility subject to subparagraph (A) 
        shall provide each customer requesting a time-based rate with a 
        time-based meter capable of enabling the utility and customer to 
        offer and receive such rate, respectively.
            ``(D) For purposes of implementing this paragraph, any 
        reference contained in this section to the date of enactment of 
        the Public Utility Regulatory Policies Act of 1978 shall be 
        deemed to be a reference to the date of enactment of this 
        paragraph.
            ``(E) In a State that permits third-party marketers to sell 
        electric energy to retail electric consumers, such consumers 
        shall be entitled to receive the same time-based metering and 
        communications device and service as a retail electric consumer 
        of the electric utility.
            ``(F) <<NOTE: Deadline.>> Notwithstanding subsections (b) 
        and (c) of section 112, each State regulatory authority shall, 
        not later than 18 months after the date of enactment of this 
        paragraph conduct an investigation in accordance with section 
        115(i) and issue a decision whether it is appropriate to 
        implement the standards set out in subparagraphs (A) and (C).''.

[[Page 119 STAT. 965]]

    (b) State Investigation of Demand Response and Time-Based 
Metering.--Section 115 of the Public Utility Regulatory Policies Act of 
1978 (16 U.S.C. 2625) is amended as follows:
            (1) By inserting in subsection (b) after the phrase ``the 
        standard for time-of-day rates established by section 
        111(d)(3)'' the following: ``and the standard for time-based 
        metering and communications established by section 111(d)(14)''.
            (2) By inserting in subsection (b) after the phrase ``are 
        likely to exceed the metering'' the following: ``and 
        communications''.
            (3) By adding at the end the following:

    ``(i) Time-Based Metering and Communications.--In making a 
determination with respect to the standard established by section 
111(d)(14), the investigation requirement of section 111(d)(14)(F) shall 
be as follows: Each State regulatory authority shall conduct an 
investigation and issue a decision whether or not it is appropriate for 
electric utilities to provide and install time-based meters and 
communications devices for each of their customers which enable such 
customers to participate in time-based pricing rate schedules and other 
demand response programs.''.
    (c) Federal Assistance on Demand Response.--Section 132(a) of the 
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2642(a)) is 
amended by striking ``and'' at the end of paragraph (3), striking the 
period at the end of paragraph (4) and inserting ``; and'', and by 
adding the following at the end thereof:
            ``(5) technologies, techniques, and rate-making methods 
        related to advanced metering and communications and the use of 
        these technologies, techniques and methods in demand response 
        programs.''.

    (d) Federal Guidance.--Section 132 of the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2642) is amended by adding the following 
at the end thereof:
    ``(d) Demand Response.--The Secretary shall be responsible for--
            ``(1) educating consumers on the availability, advantages, 
        and benefits of advanced metering and communications 
        technologies, including the funding of demonstration or pilot 
        projects;
            ``(2) working with States, utilities, other energy providers 
        and advanced metering and communications experts to identify and 
        address barriers to the adoption of demand response programs; 
        and
            ``(3) <<NOTE: Deadline. Reports.>> not later than 180 days 
        after the date of enactment of the Energy Policy Act of 2005, 
        providing Congress with a report that identifies and quantifies 
        the national benefits of demand response and makes a 
        recommendation on achieving specific levels of such benefits by 
        January 1, 2007.''.

    (e) <<NOTE: 16 USC 2642 note.>> Demand Response and Regional 
Coordination.--
            (1) In general.--It is the policy of the United States to 
        encourage States to coordinate, on a regional basis, State 
        energy policies to provide reliable and affordable demand 
        response services to the public.
            (2) Technical assistance.--The Secretary shall provide 
        technical assistance to States and regional organizations formed 
        by two or more States to assist them in--
                    (A) identifying the areas with the greatest demand 
                response potential;

[[Page 119 STAT. 966]]

                    (B) identifying and resolving problems in 
                transmission and distribution networks, including 
                through the use of demand response;
                    (C) developing plans and programs to use demand 
                response to respond to peak demand or emergency needs; 
                and
                    (D) identifying specific measures consumers can take 
                to participate in these demand response programs.
            (3) Report.--Not later than 1 year after the date of 
        enactment of the Energy Policy Act of 2005, the Commission shall 
        prepare and publish an annual report, by appropriate region, 
        that assesses demand response resources, including those 
        available from all consumer classes, and which identifies and 
        reviews--
                    (A) saturation and penetration rate of advanced 
                meters and communications technologies, devices and 
                systems;
                    (B) existing demand response programs and time-based 
                rate programs;
                    (C) the annual resource contribution of demand 
                resources;
                    (D) the potential for demand response as a 
                quantifiable, reliable resource for regional planning 
                purposes;
                    (E) steps taken to ensure that, in regional 
                transmission planning and operations, demand resources 
                are provided equitable treatment as a quantifiable, 
                reliable resource relative to the resource obligations 
                of any load-serving entity, transmission provider, or 
                transmitting party; and
                    (F) regulatory barriers to improve customer 
                participation in demand response, peak reduction and 
                critical period pricing programs.

    (f) Federal Encouragement of Demand Response Devices.--It is the 
policy of the United States that time-based pricing and other forms of 
demand response, whereby electricity customers are provided with 
electricity price signals and the ability to benefit by responding to 
them, shall be encouraged, the deployment of such technology and devices 
that enable electricity customers to participate in such pricing and 
demand response systems shall be facilitated, and unnecessary barriers 
to demand response participation in energy, capacity and ancillary 
service markets shall be eliminated. It is further the policy of the 
United States that the benefits of such demand response that accrue to 
those not deploying such technology and devices, but who are part of the 
same regional electricity entity, shall be recognized.
    (g) <<NOTE: Deadlines.>> Time Limitations.--Section 112(b) of the 
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is 
amended by adding at the end the following:
            ``(4)(A) Not later than 1 year after the enactment of this 
        paragraph, each State regulatory authority (with respect to each 
        electric utility for which it has ratemaking authority) and each 
        nonregulated electric utility shall commence the consideration 
        referred to in section 111, or set a hearing date for such 
        consideration, with respect to the standard established by 
        paragraph (14) of section 111(d).
            ``(B) Not later than 2 years after the date of the enactment 
        of this paragraph, each State regulatory authority (with respect 
        to each electric utility for which it has ratemaking authority),

[[Page 119 STAT. 967]]

        and each nonregulated electric utility, shall complete the 
        consideration, and shall make the determination, referred to in 
        section 111 with respect to the standard established by 
        paragraph (14) of section 111(d).''.

    (h) Failure to Comply.--Section 112(c) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended by adding 
at the end the following:
    ``In the case of the standard established by paragraph (14) of 
section 111(d), the reference contained in this subsection to the date 
of enactment of this Act shall be deemed to be a reference to the date 
of enactment of such paragraph (14).''.
    (i) Prior State Actions Regarding Smart Metering Standards.--
            (1) In general.--Section 112 of the Public Utility 
        Regulatory Policies Act of 1978 (16 U.S.C. 2622) is amended by 
        adding at the end the following:

    ``(e) Prior State Actions.--Subsections (b) and (c) of this section 
shall not apply to the standard established by paragraph (14) of section 
111(d) in the case of any electric utility in a State if, before the 
enactment of this subsection--
            ``(1) the State has implemented for such utility the 
        standard concerned (or a comparable standard);
            ``(2) the State regulatory authority for such State or 
        relevant nonregulated electric utility has conducted a 
        proceeding to consider implementation of the standard concerned 
        (or a comparable standard) for such utility within the previous 
        3 years; or
            ``(3) the State legislature has voted on the implementation 
        of such standard (or a comparable standard) for such utility 
        within the previous 3 years.''.
            (2) Cross reference.--Section 124 of such Act (16 U.S.C. 
        2634) is amended by adding the following at the end thereof: 
        ``In the case of the standard established by paragraph (14) of 
        section 111(d), the reference contained in this subsection to 
        the date of enactment of this Act shall be deemed to be a 
        reference to the date of enactment of such paragraph (14).''.

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

    (a) Termination of Mandatory Purchase and Sale Requirements.--
Section 210 of the Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 824a-3) is amended by adding at the end the following:
    ``(m) Termination of Mandatory Purchase and Sale Requirements.--
            ``(1) Obligation to purchase.--After the date of enactment 
        of this subsection, no electric utility shall be required to 
        enter into a new contract or obligation to purchase electric 
        energy from a qualifying cogeneration facility or a qualifying 
        small power production facility under this section if the 
        Commission finds that the qualifying cogeneration facility or 
        qualifying small power production facility has nondiscriminatory 
        access to--
                    ``(A)(i) independently administered, auction-based 
                day ahead and real time wholesale markets for the sale 
                of electric energy; and (ii) wholesale markets for long-
                term sales of capacity and electric energy; or

[[Page 119 STAT. 968]]

                    ``(B)(i) transmission and interconnection services 
                that are provided by a Commission-approved regional 
                transmission entity and administered pursuant to an open 
                access transmission tariff that affords 
                nondiscriminatory treatment to all customers; and (ii) 
                competitive wholesale markets that provide a meaningful 
                opportunity to sell capacity, including long-term and 
                short-term sales, and electric energy, including long-
                term, short-term and real-time sales, to buyers other 
                than the utility to which the qualifying facility is 
                interconnected. In determining whether a meaningful 
                opportunity to sell exists, the Commission shall 
                consider, among other factors, evidence of transactions 
                within the relevant market; or
                    ``(C) wholesale markets for the sale of capacity and 
                electric energy that are, at a minimum, of comparable 
                competitive quality as markets described in 
                subparagraphs (A) and (B).
            ``(2) Revised purchase and sale obligation for new 
        facilities.--(A) After the date of enactment of this subsection, 
        no electric utility shall be required pursuant to this section 
        to enter into a new contract or obligation to purchase from or 
        sell electric energy to a facility that is not an existing 
        qualifying cogeneration facility unless the facility meets the 
        criteria for qualifying cogeneration facilities established by 
        the Commission pursuant to the rulemaking required by subsection 
        (n).
            ``(B) For the purposes of this paragraph, the term `existing 
        qualifying cogeneration facility' means a facility that--
                    ``(i) was a qualifying cogeneration facility on the 
                date of enactment of subsection (m); or
                    ``(ii) had filed with the Commission a notice of 
                self-certification, self recertification or an 
                application for Commission certification under 18 CFR 
                292.207 prior to the date on which the Commission issues 
                the final rule required by subsection (n).
            ``(3) Commission review.--Any electric utility may file an 
        application with the Commission for relief from the mandatory 
        purchase obligation pursuant to this subsection on a service 
        territory-wide basis. Such application shall set forth the 
        factual basis upon which relief is requested and describe why 
        the conditions set forth in subparagraph (A), (B), or (C) of 
        paragraph (1) of this subsection have been 
        met. <<NOTE: Notice. Deadline.>> After notice, including 
        sufficient notice to potentially affected qualifying 
        cogeneration facilities and qualifying small power production 
        facilities, and an opportunity for comment, the Commission shall 
        make a final determination within 90 days of such application 
        regarding whether the conditions set forth in subparagraph (A), 
        (B), or (C) of paragraph (1) have been met.
            ``(4) Reinstatement of obligation to purchase.--At any time 
        after the Commission makes a finding under paragraph (3) 
        relieving an electric utility of its obligation to purchase 
        electric energy, a qualifying cogeneration facility, a 
        qualifying small power production facility, a State agency, or 
        any other affected person may apply to the Commission for an 
        order reinstating the electric utility's obligation to purchase 
        electric energy under this section. Such application shall set 
        forth the factual basis upon which the application is based and 
        describe

[[Page 119 STAT. 969]]

        why the conditions set forth in subparagraph (A), (B), or (C) of 
        paragraph (1) of this subsection are no longer 
        met. <<NOTE: Notice. Deadline.>> After notice, including 
        sufficient notice to potentially affected utilities, and 
        opportunity for comment, the Commission shall issue an order 
        within 90 days of such application reinstating the electric 
        utility's obligation to purchase electric energy under this 
        section if the Commission finds that the conditions set forth in 
        subparagraphs (A), (B) or (C) of paragraph (1) which relieved 
        the obligation to purchase, are no longer met.
            ``(5) Obligation to sell.--After the date of enactment of 
        this subsection, no electric utility shall be required to enter 
        into a new contract or obligation to sell electric energy to a 
        qualifying cogeneration facility or a qualifying small power 
        production facility under this section if the Commission finds 
        that--
                    ``(A) competing retail electric suppliers are 
                willing and able to sell and deliver electric energy to 
                the qualifying cogeneration facility or qualifying small 
                power production facility; and
                    ``(B) the electric utility is not required by State 
                law to sell electric energy in its service territory.
            ``(6) No effect on existing rights and remedies.--Nothing in 
        this subsection affects the rights or remedies of any party 
        under any contract or obligation, in effect or pending approval 
        before the appropriate State regulatory authority or non-
        regulated electric utility on the date of enactment of this 
        subsection, to purchase electric energy or capacity from or to 
        sell electric energy or capacity to a qualifying cogeneration 
        facility or qualifying small power production facility under 
        this Act (including the right to recover costs of purchasing 
        electric energy or capacity).
            ``(7) Recovery of costs.--(A) The Commission shall issue and 
        enforce such regulations as are necessary to ensure that an 
        electric utility that purchases electric energy or capacity from 
        a qualifying cogeneration facility or qualifying small power 
        production facility in accordance with any legally enforceable 
        obligation entered into or imposed under this section recovers 
        all prudently incurred costs associated with the purchase.
            ``(B) A regulation under subparagraph (A) shall be 
        enforceable in accordance with the provisions of law applicable 
        to enforcement of regulations under the Federal Power Act (16 
        U.S.C. 791a et seq.).

    ``(n) <<NOTE: Deadline.>> Rulemaking for New Qualifying 
Facilities.--(1)(A) Not later than 180 days after the date of enactment 
of this section, the Commission shall issue a rule revising the criteria 
in 18 CFR 292.205 for new qualifying cogeneration facilities seeking to 
sell electric energy pursuant to section 210 of this Act to ensure--
            ``(i) that the thermal energy output of a new qualifying 
        cogeneration facility is used in a productive and beneficial 
        manner;
            ``(ii) the electrical, thermal, and chemical output of the 
        cogeneration facility is used fundamentally for industrial, 
        commercial, or institutional purposes and is not intended 
        fundamentally for sale to an electric utility, taking into 
        account technological, efficiency, economic, and variable 
        thermal energy requirements, as well as State laws applicable to 
        sales of electric energy from a qualifying facility to its host 
        facility; and

[[Page 119 STAT. 970]]

            ``(iii) continuing progress in the development of efficient 
        electric energy generating technology.

    ``(B) <<NOTE: Applicability.>> The rule issued pursuant to paragraph 
(1)(A) of this subsection shall be applicable only to facilities that 
seek to sell electric energy pursuant to section 210 of this Act. For 
all other purposes, except as specifically provided in subsection 
(m)(2)(A), qualifying facility status shall be determined in accordance 
with the rules and regulations of this Act.

    ``(2) <<NOTE: Applicability.>> Notwithstanding rule revisions under 
paragraph (1), the Commission's criteria for qualifying cogeneration 
facilities in effect prior to the date on which the Commission issues 
the final rule required by paragraph (1) shall continue to apply to any 
cogeneration facility that--
            ``(A) was a qualifying cogeneration facility on the date of 
        enactment of subsection (m), or
            ``(B) had filed with the Commission a notice of self-
        certification, self-recertification or an application for 
        Commission certification under 18 CFR 292.207 prior to the date 
        on which the Commission issues the final rule required by 
        paragraph (1).''.

    (b) Elimination of Ownership Limitations.--
            (1) Qualifying small power production facility.--Section 
        3(17)(C) of the Federal Power Act (16 U.S.C. 796(17)(C)) is 
        amended to read as follows:
                    ``(C) `qualifying small power production facility' 
                means a small power production facility that the 
                Commission determines, by rule, meets such requirements 
                (including requirements respecting fuel use, fuel 
                efficiency, and reliability) as the Commission may, by 
                rule, prescribe;''.
            (2) Qualifying cogeneration facility.--Section 3(18)(B) of 
        the Federal Power Act (16 U.S.C. 796(18)(B)) is amended to read 
        as follows:
                    ``(B) `qualifying cogeneration facility' means a 
                cogeneration facility that the Commission determines, by 
                rule, meets such requirements (including requirements 
                respecting minimum size, fuel use, and fuel efficiency) 
                as the Commission may, by rule, prescribe;''.

SEC. 1254. INTERCONNECTION.

    (a) Adoption of Standards.--Section 111(d) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding 
at the end the following:
            ``(15) Interconnection.--Each electric utility shall make 
        available, upon request, interconnection service to any electric 
        consumer that the electric utility serves. For purposes of this 
        paragraph, the term `interconnection service' means service to 
        an electric consumer under which an on-site generating facility 
        on the consumer's premises shall be connected to the local 
        distribution facilities. Interconnection services shall be 
        offered based upon the standards developed by the Institute of 
        Electrical and Electronics Engineers: IEEE Standard 1547 for 
        Interconnecting Distributed Resources with Electric Power 
        Systems, as they may be amended from time to time. In addition, 
        agreements and procedures shall be established whereby the 
        services are offered shall promote current best practices of 
        interconnection for distributed generation, including but not 
        limited to practices stipulated in model codes adopted by

[[Page 119 STAT. 971]]

        associations of state regulatory agencies. All such agreements 
        and procedures shall be just and reasonable, and not unduly 
        discriminatory or preferential.''.

    (b) Compliance.--
            (1) <<NOTE: Deadlines.>> Time limitations.--Section 112(b) 
        of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
        2622(b)) is amended by adding at the end the following:
            ``(5)(A) Not later than 1 year after the enactment of this 
        paragraph, each State regulatory authority (with respect to each 
        electric utility for which it has ratemaking authority) and each 
        nonregulated utility shall commence the consideration referred 
        to in section 111, or set a hearing date for consideration, with 
        respect to the standard established by paragraph (15) of section 
        111(d).
            ``(B) Not later than two years after the date of the 
        enactment of the this paragraph, each State regulatory authority 
        (with respect to each electric utility for which it has 
        ratemaking authority), and each nonregulated electric utility, 
        shall complete the consideration, and shall make the 
        determination, referred to in section 111 with respect to each 
        standard established by paragraph (15) of section 111(d).''.
            (2) Failure to comply.--Section 112(d) of the Public Utility 
        Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended 
        by adding at the end the following: ``In the case of the 
        standard established by paragraph (15), the reference contained 
        in this subsection to the date of enactment of this Act shall be 
        deemed to be a reference to the date of enactment of paragraph 
        (15).''.
            (3) Prior state actions.--
                    (A) In general.--Section 112 of the Public Utility 
                Regulatory Policies Act of 1978 (16 U.S.C. 2622) is 
                amended by adding at the end the following:

    ``(f) Prior State Actions.--Subsections (b) and (c) of this section 
shall not apply to the standard established by paragraph (15) of section 
111(d) in the case of any electric utility in a State if, before the 
enactment of this subsection--
            ``(1) the State has implemented for such utility the 
        standard concerned (or a comparable standard);
            ``(2) the State regulatory authority for such State or 
        relevant nonregulated electric utility has conducted a 
        proceeding to consider implementation of the standard concerned 
        (or a comparable standard) for such utility; or
            ``(3) the State legislature has voted on the implementation 
        of such standard (or a comparable standard) for such utility.''.
                    (B) Cross reference.--Section 124 of such Act (16 
                U.S.C. 2634) is amended by adding the following at the 
                end thereof: ``In the case of each standard established 
                by paragraph (15) of section 111(d), the reference 
                contained in this subsection to the date of enactment of 
                the Act shall be deemed to be a reference to the date of 
                enactment of paragraph (15).''.

[[Page 119 STAT. 972]]

Subtitle <<NOTE: Public Utility Holding Company Act of 2005.>> F--Repeal 
of PUHCA

SEC. 1261. <<NOTE: 42 USC 15801 note.>> SHORT TITLE.

    This subtitle may be cited as the ``Public Utility Holding Company 
Act of 2005''.

SEC. 1262. <<NOTE: 42 USC 16451.>> DEFINITIONS.

    For purposes of this subtitle:
            (1) Affiliate.--The term ``affiliate'' of a company means 
        any company, 5 percent or more of the outstanding voting 
        securities of which are owned, controlled, or held with power to 
        vote, directly or indirectly, by such company.
            (2) Associate company.--The term ``associate company'' of a 
        company means any company in the same holding company system 
        with such company.
            (3) Commission.--The term ``Commission'' means the Federal 
        Energy Regulatory Commission.
            (4) Company.--The term ``company'' means a corporation, 
        partnership, association, joint stock company, business trust, 
        or any organized group of persons, whether incorporated or not, 
        or a receiver, trustee, or other liquidating agent of any of the 
        foregoing.
            (5) Electric utility company.--The term ``electric utility 
        company'' means any company that owns or operates facilities 
        used for the generation, transmission, or distribution of 
        electric energy for sale.
            (6) Exempt wholesale generator and foreign utility 
        company.--The terms ``exempt wholesale generator'' and ``foreign 
        utility company'' have the same meanings as in sections 32 and 
        33, respectively, of the Public Utility Holding Company Act of 
        1935 (15 U.S.C. 79z-5a, 79z-5b), as those sections existed on 
        the day before the effective date of this subtitle.
            (7) Gas utility company.--The term ``gas utility company'' 
        means any company that owns or operates facilities used for 
        distribution at retail (other than the distribution only in 
        enclosed portable containers or distribution to tenants or 
        employees of the company operating such facilities for their own 
        use and not for resale) of natural or manufactured gas for heat, 
        light, or power.
            (8) Holding company.--
                    (A) In general.--The term ``holding company'' 
                means--
                          (i) any company that directly or indirectly 
                      owns, controls, or holds, with power to vote, 10 
                      percent or more of the outstanding voting 
                      securities of a public-utility company or of a 
                      holding company of any public-utility company; and
                          (ii) any person, determined by the Commission, 
                      after notice and opportunity for hearing, to 
                      exercise directly or indirectly (either alone or 
                      pursuant to an arrangement or understanding with 
                      one or more persons) such a controlling influence 
                      over the management or policies of any public-
                      utility company or holding company as to make it 
                      necessary or appropriate for the rate protection 
                      of utility customers with respect to rates that 
                      such person be subject to the obligations,

[[Page 119 STAT. 973]]

                      duties, and liabilities imposed by this subtitle 
                      upon holding companies.
                    (B) Exclusions.--The term ``holding company'' shall 
                not include--
                          (i) a bank, savings association, or trust 
                      company, or their operating subsidiaries that own, 
                      control, or hold, with the power to vote, public 
                      utility or public utility holding company 
                      securities so long as the securities are--
                                    (I) held as collateral for a loan;
                                    (II) held in the ordinary course of 
                                business as a fiduciary; or
                                    (III) acquired solely for purposes 
                                of liquidation and in connection with a 
                                loan previously contracted for and owned 
                                beneficially for a period of not more 
                                than two years; or
                          (ii) a broker or dealer that owns, controls, 
                      or holds with the power to vote public utility or 
                      public utility holding company securities so long 
                      as the securities are--
                                    (I) not beneficially owned by the 
                                broker or dealer and are subject to any 
                                voting instructions which may be given 
                                by customers or their assigns; or
                                    (II) acquired within 12 months in 
                                the ordinary course of business as a 
                                broker, dealer, or underwriter with the 
                                bona fide intention of effecting 
                                distribution of the specific securities 
                                so acquired.
            (9) Holding company system.--The term ``holding company 
        system'' means a holding company, together with its subsidiary 
        companies.
            (10) Jurisdictional rates.--The term ``jurisdictional 
        rates'' means rates accepted or established by the Commission 
        for the transmission of electric energy in interstate commerce, 
        the sale of electric energy at wholesale in interstate commerce, 
        the transportation of natural gas in interstate commerce, and 
        the sale in interstate commerce of natural gas for resale for 
        ultimate public consumption for domestic, commercial, 
        industrial, or any other use.
            (11) Natural gas company.--The term ``natural gas company'' 
        means a person engaged in the transportation of natural gas in 
        interstate commerce or the sale of such gas in interstate 
        commerce for resale.
            (12) Person.--The term ``person'' means an individual or 
        company.
            (13) Public utility.--The term ``public utility'' means any 
        person who owns or operates facilities used for transmission of 
        electric energy in interstate commerce or sales of electric 
        energy at wholesale in interstate commerce.
            (14) Public-utility company.--The term ``public-utility 
        company'' means an electric utility company or a gas utility 
        company.
            (15) State commission.--The term ``State commission'' means 
        any commission, board, agency, or officer, by whatever name 
        designated, of a State, municipality, or other political 
        subdivision of a State that, under the laws of such State, has 
        jurisdiction to regulate public utility companies.

[[Page 119 STAT. 974]]

            (16) Subsidiary company.--The term ``subsidiary company'' of 
        a holding company means--
                    (A) any company, 10 percent or more of the 
                outstanding voting securities of which are directly or 
                indirectly owned, controlled, or held with power to 
                vote, by such holding company; and
                    (B) any person, the management or policies of which 
                the Commission, after notice and opportunity for 
                hearing, determines to be subject to a controlling 
                influence, directly or indirectly, by such holding 
                company (either alone or pursuant to an arrangement or 
                understanding with one or more other persons) so as to 
                make it necessary for the rate protection of utility 
                customers with respect to rates that such person be 
                subject to the obligations, duties, and liabilities 
                imposed by this subtitle upon subsidiary companies of 
                holding companies.
            (17) Voting security.--The term ``voting security'' means 
        any security presently entitling the owner or holder thereof to 
        vote in the direction or management of the affairs of a company.

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

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

SEC. 1264. <<NOTE: 42 USC 16452.>> FEDERAL ACCESS TO BOOKS AND RECORDS.

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

[[Page 119 STAT. 975]]

SEC. 1265. <<NOTE: 42 USC 16453.>> STATE ACCESS TO BOOKS AND RECORDS.

    (a) In General.--Upon the written request of a State commission 
having jurisdiction to regulate a public-utility company in a holding 
company system, the holding company or any associate company or 
affiliate thereof, other than such public-utility company, wherever 
located, shall produce for inspection books, accounts, memoranda, and 
other records that--
            (1) have been identified in reasonable detail in a 
        proceeding before the State commission;
            (2) the State commission determines are relevant to costs 
        incurred by such public-utility company; and
            (3) are necessary for the effective discharge of the 
        responsibilities of the State commission with respect to such 
        proceeding.

    (b) Limitation.--Subsection (a) does not apply to any person that is 
a holding company solely by reason of ownership of one or more 
qualifying facilities under the Public Utility Regulatory Policies Act 
of 1978 (16 U.S.C. 2601 et seq.).
    (c) Confidentiality of Information.--The production of books, 
accounts, memoranda, and other records under subsection (a) shall be 
subject to such terms and conditions as may be necessary and appropriate 
to safeguard against unwarranted disclosure to the public of any trade 
secrets or sensitive commercial information.
    (d) Effect on State Law.--Nothing in this section shall preempt 
applicable State law concerning the provision of books, accounts, 
memoranda, and other records, or in any way limit the rights of any 
State to obtain books, accounts, memoranda, and other records under any 
other Federal law, contract, or otherwise.
    (e) Court Jurisdiction.--Any United States district court located in 
the State in which the State commission referred to in subsection (a) is 
located shall have jurisdiction to enforce compliance with this section.

SEC. 1266. <<NOTE: 42 USC 16454.>> EXEMPTION AUTHORITY.

    (a) <<NOTE: Deadline.>> Rulemaking.--Not later than 90 days after 
the effective date of this subtitle, the Commission shall issue a final 
rule to exempt from the requirements of section 1264 (relating to 
Federal access to books and records) any person that is a holding 
company, solely with respect to one or more--
            (1) qualifying facilities under the Public Utility 
        Regulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.);
            (2) exempt wholesale generators; or
            (3) foreign utility companies.

    (b) Other Authority.--The Commission shall exempt a person or 
transaction from the requirements of section 1264 (relating to Federal 
access to books and records) if, upon application or upon the motion of 
the Commission--
            (1) the Commission finds that the books, accounts, 
        memoranda, and other records of any person are not relevant to 
        the jurisdictional rates of a public utility or natural gas 
        company; or
            (2) the Commission finds that any class of transactions is 
        not relevant to the jurisdictional rates of a public utility or 
        natural gas company.

[[Page 119 STAT. 976]]

SEC. 1267. <<NOTE: 42 USC 16455.>> AFFILIATE TRANSACTIONS.

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

SEC. 1268. <<NOTE: 42 USC 16456.>> APPLICABILITY.

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

SEC. 1269. <<NOTE: 42 USC 16457.>> EFFECT ON OTHER REGULATIONS.

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

SEC. 1270. <<NOTE: 42 USC 16458.>> ENFORCEMENT.

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

SEC. 1271. <<NOTE: 42 USC 16459.>> SAVINGS PROVISIONS.

    (a) In General.--Nothing in this subtitle, or otherwise in the 
Public Utility Holding Company Act of 1935, or rules, regulations, or 
orders thereunder, prohibits a person from engaging in or continuing to 
engage in activities or transactions in which it is legally engaged or 
authorized to engage on the date of enactment of this Act, if that 
person continues to comply with the terms (other than an expiration date 
or termination date) of any such authorization, whether by rule or by 
order.
    (b) Effect on Other Commission Authority.--Nothing in this subtitle 
limits the authority of the Commission under the Federal Power Act (16 
U.S.C. 791a et seq.) or the Natural Gas Act (15 U.S.C. 717 et seq.).
    (c) Tax Treatment.--Tax treatment under section 1081 of the Internal 
Revenue Code of 1986 as a result of transactions ordered in compliance 
with the Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et 
seq.) shall not be affected in any manner due to the repeal of that Act 
and the enactment of the Public Utility Holding Company Act of 2005.

[[Page 119 STAT. 977]]

SEC. 1272. <<NOTE: Deadline. 42 USC 16460.>> IMPLEMENTATION.

    Not later than 4 months after the date of enactment of this 
subtitle, the Commission shall--
            (1) <<NOTE: Regulations.>> issue such regulations as may be 
        necessary or appropriate to implement this subtitle (other than 
        section 1265, relating to State access to books and records); 
        and
            (2) submit to Congress detailed recommendations on technical 
        and conforming amendments to Federal law necessary to carry out 
        this subtitle and the amendments made by this subtitle.

SEC. 1273. TRANSFER <<NOTE: Records. 42 USC 16461.>> OF RESOURCES.

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

SEC. 1274. <<NOTE: 42 USC 16451 note.>> EFFECTIVE DATE.

    (a) In General.--Except for section 1272 (relating to 
implementation), this subtitle shall take effect 6 months after the date 
of enactment of this subtitle.
    (b) Compliance With Certain Rules.--If the Commission approves and 
makes effective any final rulemaking modifying the standards of conduct 
governing entities that own, operate, or control facilities for 
transmission of electricity in interstate commerce or transportation of 
natural gas in interstate commerce prior to the effective date of this 
subtitle, any action taken by a public-utility company or utility 
holding company to comply with the requirements of such rulemaking shall 
not subject such public-utility company or utility holding company to 
any regulatory requirement applicable to a holding company under the 
Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et seq.).

SEC. 1275. <<NOTE: 42 USC 16462.>> SERVICE ALLOCATION.

    (a) Definition of Public Utility.--In this section, the term 
``public utility'' has the meaning given the term in section 201(e) of 
the Federal Power Act (16 U.S.C. 824(e)).
    (b) FERC Review.--In the case of non-power goods or administrative 
or management services provided by an associate company organized 
specifically for the purpose of providing such goods or services to any 
public utility in the same holding company system, at the election of 
the system or a State commission having jurisdiction over the public 
utility, the Commission, after the effective date of this subtitle, 
shall review and authorize the allocation of the costs for such goods or 
services to the extent relevant to that associate company.
    (c) Effect on Federal and State Law.--Nothing in this section shall 
affect the authority of the Commission or a State commission under other 
applicable law.
    (d) <<NOTE: Deadline.>> Rules.--Not later than 4 months after the 
date of enactment of this Act, the Commission shall issue rules (which 
rules shall be effective no earlier than the effective date of this 
subtitle) to exempt from the requirements of this section any company in 
a holding company system whose public utility operations are confined 
substantially to a single State and any other class of transactions that 
the Commission finds is not relevant to the jurisdictional rates of a 
public utility.

[[Page 119 STAT. 978]]

SEC. 1276. <<NOTE: 42 USC 16463.>> AUTHORIZATION OF APPROPRIATIONS.

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

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

    (a) Conflict of Jurisdiction.--Section 318 of the Federal Power Act 
(16 U.S.C. 825q) is repealed.
    (b) Definitions.--(1) Section 201(g)(5) of the Federal Power Act (16 
U.S.C. 824(g)(5)) is amended by striking ``1935'' and inserting 
``2005''.
    (2) Section 214 of the Federal Power Act (16 U.S.C. 824m) is amended 
by striking ``1935'' and inserting ``2005''.

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

SEC. 1281. ELECTRICITY MARKET TRANSPARENCY.

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

``SEC. 220. <<NOTE: 16 USC 824t.>> ELECTRICITY MARKET TRANSPARENCY 
            RULES.

    ``(a)(1) The Commission is directed to facilitate price transparency 
in markets for the sale and transmission of electric energy in 
interstate commerce, having due regard for the public interest, the 
integrity of those markets, fair competition, and the protection of 
consumers.
    ``(2) The Commission may prescribe such rules as the Commission 
determines necessary and appropriate to carry out the purposes of this 
section. The rules shall provide for the dissemination, on a timely 
basis, of information about the availability and prices of wholesale 
electric energy and transmission service to the Commission, State 
commissions, buyers and sellers of wholesale electric energy, users of 
transmission services, and the public.
    ``(3) The Commission may--
            ``(A) obtain the information described in paragraph (2) from 
        any market participant; and
            ``(B) rely on entities other than the Commission to receive 
        and make public the information, subject to the disclosure rules 
        in subsection (b).

    ``(4) In carrying out this section, the Commission shall consider 
the degree of price transparency provided by existing price publishers 
and providers of trade processing services, and shall rely on such 
publishers and services to the maximum extent possible. The Commission 
may establish an electronic information system if it determines that 
existing price publications are not adequately providing price discovery 
or market transparency. Nothing in this section, however, shall affect 
any electronic information filing requirements in effect under this Act 
as of the date of enactment of this section.
    ``(b)(1) Rules described in subsection (a)(2), if adopted, shall 
exempt from disclosure information the Commission determines would, if 
disclosed, be detrimental to the operation of an effective market or 
jeopardize system security.
    ``(2) In determining the information to be made available under this 
section and time to make the information available, the Commission shall 
seek to ensure that consumers and competitive

[[Page 119 STAT. 979]]

markets are protected from the adverse effects of potential collusion or 
other anticompetitive behaviors that can be facilitated by untimely 
public disclosure of transaction-specific information.
    ``(c)(1) <<NOTE: Deadline.>> Within 180 days of enactment of this 
section, the Commission shall conclude a memorandum of understanding 
with the Commodity Futures Trading Commission relating to information 
sharing, which shall include, among other things, provisions ensuring 
that information requests to markets within the respective jurisdiction 
of each agency are properly coordinated to minimize duplicative 
information requests, and provisions regarding the treatment of 
proprietary trading information.

    ``(2) Nothing in this section may be construed to limit or affect 
the exclusive jurisdiction of the Commodity Futures Trading Commission 
under the Commodity Exchange Act (7 U.S.C. 1 et seq.).
    ``(d) The Commission shall not require entities who have a de 
minimis market presence to comply with the reporting requirements of 
this section.
    ``(e)(1) Except as provided in paragraph (2), no person shall be 
subject to any civil penalty under this section with respect to any 
violation occurring more than 3 years before the date on which the 
person is provided notice of the proposed penalty under section 316A.
    ``(2) Paragraph (1) shall not apply in any case in which the 
Commission finds that a seller that has entered into a contract for the 
sale of electric energy at wholesale or transmission service subject to 
the jurisdiction of the Commission has engaged in fraudulent market 
manipulation activities materially affecting the contract in violation 
of section 222.
    ``(f) This section shall not apply to a transaction for the purchase 
or sale of wholesale electric energy or transmission services within the 
area described in section 212(k)(2)(A).''.

SEC. 1282. FALSE STATEMENTS.

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

``SEC. 221. <<NOTE: 16 USC 824u.>> PROHIBITION ON FILING FALSE 
            INFORMATION.

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

SEC. 1283. MARKET MANIPULATION.

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

``SEC. 222. <<NOTE: 16 USC 824v.>> PROHIBITION OF ENERGY MARKET 
            MANIPULATION.

    ``(a) In General.--It shall be unlawful for any entity (including an 
entity described in section 201(f)), directly or indirectly, to use or 
employ, in connection with the purchase or sale of electric energy or 
the purchase or sale of transmission services subject to the 
jurisdiction of the Commission, any manipulative or deceptive device or 
contrivance (as those terms are used in section 10(b) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78j(b))), in contravention

[[Page 119 STAT. 980]]

of such rules and regulations as the Commission may prescribe as 
necessary or appropriate in the public interest or for the protection of 
electric ratepayers.
    ``(b) No Private Right of Action.--Nothing in this section shall be 
construed to create a private right of action.''.

SEC. 1284. ENFORCEMENT.

    (a) Complaints.--Section 306 of the Federal Power Act (16 U.S.C. 
825e) is amended--
            (1) by inserting ``electric utility,'' after ``Any 
        person,''; and
            (2) by inserting ``, transmitting utility,'' after 
        ``licensee'' each place it appears.

    (b) Investigations.--Section 307(a) of the Federal Power Act (16 
U.S.C. 825f(a)) is amended--
            (1) by inserting ``, electric utility, transmitting utility, 
        or other entity'' after ``person'' each place it appears; and
            (2) in the first sentence, by inserting before the period at 
        the end the following: ``, or in obtaining information about the 
        sale of electric energy at wholesale in interstate commerce and 
        the transmission of electric energy in interstate commerce''.

    (c) Review of Commission Orders.--Section 313(a) of the Federal 
Power Act (16 U.S.C. 825l) is amended by inserting ``electric utility,'' 
after ``person,'' in the first 2 places it appears and by striking ``any 
person unless such person'' and inserting ``any entity unless such 
entity''.
    (d) Criminal Penalties.--Section 316 of the Federal Power Act (16 
U.S.C. 825o) is amended--
            (1) in subsection (a)--
                    (A) by striking ``$5,000'' and inserting 
                ``$1,000,000''; and
                    (B) by striking ``two years'' and inserting ``5 
                years'';
            (2) in subsection (b), by striking ``$500'' and inserting 
        ``$25,000''; and
            (3) by striking subsection (c).

    (e) Civil Penalties.--Section 316A of the Federal Power Act (16 
U.S.C. 825o-1) is amended--
            (1) by striking ``section 211, 212, 213, or 214'' each place 
        it appears and inserting ``part II''; and
            (2) in subsection (b), by striking ``$10,000'' and inserting 
        ``$1,000,000''.

SEC. 1285. REFUND EFFECTIVE DATE.

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

[[Page 119 STAT. 981]]

        why it has failed to do so and shall state its best estimate as 
        to when it reasonably expects to make such decision.''.

SEC. 1286. REFUND AUTHORITY.

    Section 206 of the Federal Power Act (16 U.S.C. 824e) is amended by 
adding at the end the following:
    ``(e)(1) In this subsection:
            ``(A) The term `short-term sale' means an agreement for the 
        sale of electric energy at wholesale in interstate commerce that 
        is for a period of 31 days or less (excluding monthly contracts 
        subject to automatic renewal).
            ``(B) The term `applicable Commission rule' means a 
        Commission rule applicable to sales at wholesale by public 
        utilities that the Commission determines after notice and 
        comment should also be applicable to entities subject to this 
        subsection.

    ``(2) If an entity described in section 201(f) voluntarily makes a 
short-term sale of electric energy through an organized market in which 
the rates for the sale are established by Commission-approved tariff 
(rather than by contract) and the sale violates the terms of the tariff 
or applicable Commission rules in effect at the time of the sale, the 
entity shall be subject to the refund authority of the Commission under 
this section with respect to the violation.
    ``(3) This section shall not apply to--
            ``(A) any entity that sells in total (including affiliates 
        of the entity) less than 8,000,000 megawatt hours of electricity 
        per year; or
            ``(B) an electric cooperative.

    ``(4)(A) The Commission shall have refund authority under paragraph 
(2) with respect to a voluntary short term sale of electric energy by 
the Bonneville Power Administration only if the sale is at an unjust and 
unreasonable rate.
    ``(B) The Commission may order a refund under subparagraph (A) only 
for short-term sales made by the Bonneville Power Administration at 
rates that are higher than the highest just and reasonable rate charged 
by any other entity for a short-term sale of electric energy in the same 
geographic market for the same, or most nearly comparable, period as the 
sale by the Bonneville Power Administration.
    ``(C) In the case of any Federal power marketing agency or the 
Tennessee Valley Authority, the Commission shall not assert or exercise 
any regulatory authority or power under paragraph (2) other than the 
ordering of refunds to achieve a just and reasonable rate.''.

SEC. 1287. <<NOTE: 42 USC 16471.>> CONSUMER PRIVACY AND UNFAIR TRADE 
            PRACTICES.

    (a) Privacy.--The Federal Trade Commission may issue rules 
protecting the privacy of electric consumers from the disclosure of 
consumer information obtained in connection with the sale or delivery of 
electric energy to electric consumers.
    (b) Slamming.--The Federal Trade Commission may issue rules 
prohibiting the change of selection of an electric utility except with 
the informed consent of the electric consumer or if approved by the 
appropriate State regulatory authority.
    (c) Cramming.--The Federal Trade Commission may issue rules 
prohibiting the sale of goods and services to an electric consumer 
unless expressly authorized by law or the electric consumer.

[[Page 119 STAT. 982]]

    (d) Rulemaking.--The Federal Trade Commission shall proceed in 
accordance with section 553 of title 5, United States Code, when 
prescribing a rule under this section.
    (e) State Authority.--If the Federal Trade Commission determines 
that a State's regulations provide equivalent or greater protection than 
the provisions of this section, such State regulations shall apply in 
that State in lieu of the regulations issued by the Commission under 
this section.
    (f) Definitions.--For purposes of this section:
            (1) State regulatory authority.--The term ``State regulatory 
        authority'' has the meaning given that term in section 3(21) of 
        the Federal Power Act (16 U.S.C. 796(21)).
            (2) Electric consumer and electric utility.--The terms 
        ``electric consumer'' and ``electric utility'' have the meanings 
        given those terms in section 3 of the Public Utility Regulatory 
        Policies Act of 1978 (16 U.S.C. 2602).

SEC. 1288. AUTHORITY OF COURT TO PROHIBIT INDIVIDUALS FROM SERVING AS 
            OFFICERS, DIRECTORS, AND ENERGY TRADERS.

    Section 314 of the Federal Power Act (16 U.S.C. 825m) is amended by 
adding at the end the following:
    ``(d) In any proceedings under subsection (a), the court may 
prohibit, conditionally or unconditionally, and permanently or for such 
period of time as the court determines, any individual who is engaged or 
has engaged in practices constituting a violation of section 221 (and 
related rules and regulations) from--
            ``(1) acting as an officer or director of an electric 
        utility; or
            ``(2) engaging in the business of purchasing or selling--
                    ``(A) electric energy; or
                    ``(B) transmission services subject to the 
                jurisdiction of the Commission.''.

SEC. 1289. MERGER REVIEW REFORM.

    (a) In General.--Section 203(a) of the Federal Power Act (16 U.S.C. 
824b(a)) is amended to read as follows:
    ``(a)(1) No public utility shall, without first having secured an 
order of the Commission authorizing it to do so--
                    ``(A) sell, lease, or otherwise dispose of the whole 
                of its facilities subject to the jurisdiction of the 
                Commission, or any part thereof of a value in excess of 
                $10,000,000;
                    ``(B) merge or consolidate, directly or indirectly, 
                such facilities or any part thereof with those of any 
                other person, by any means whatsoever;
                    ``(C) purchase, acquire, or take any security with a 
                value in excess of $10,000,000 of any other public 
                utility; or
                    ``(D) purchase, lease, or otherwise acquire an 
                existing generation facility--
                          ``(i) that has a value in excess of 
                      $10,000,000; and
                          ``(ii) that is used for interstate wholesale 
                      sales and over which the Commission has 
                      jurisdiction for ratemaking purposes.
            ``(2) No holding company in a holding company system that 
        includes a transmitting utility or an electric utility shall 
        purchase, acquire, or take any security with a value in excess

[[Page 119 STAT. 983]]

        of $10,000,000 of, or, by any means whatsoever, directly or 
        indirectly, merge or consolidate with, a transmitting utility, 
        an electric utility company, or a holding company in a holding 
        company system that includes a transmitting utility, or an 
        electric utility company, with a value in excess of $10,000,000 
        without first having secured an order of the Commission 
        authorizing it to do so.
            ``(3) <<NOTE: Notice.>> Upon receipt of an application for 
        such approval the Commission shall give reasonable notice in 
        writing to the Governor and State commission of each of the 
        States in which the physical property affected, or any part 
        thereof, is situated, and to such other persons as it may deem 
        advisable.
            ``(4) After notice and opportunity for hearing, the 
        Commission shall approve the proposed disposition, 
        consolidation, acquisition, or change in control, if it finds 
        that the proposed transaction will be consistent with the public 
        interest, and will not result in cross-subsidization of a non-
        utility associate company or the pledge or encumbrance of 
        utility assets for the benefit of an associate company, unless 
        the Commission determines that the cross-subsidization, pledge, 
        or encumbrance will be consistent with the public interest.
            ``(5) <<NOTE: Regulations. Procedures.>> The Commission 
        shall, by rule, adopt procedures for the expeditious 
        consideration of applications for the approval of dispositions, 
        consolidations, or acquisitions, under this section. Such rules 
        shall identify classes of transactions, or specify criteria for 
        transactions, that normally meet the standards established in 
        paragraph (4). The Commission shall provide expedited review for 
        such transactions. <<NOTE: Deadlines.>> The Commission shall 
        grant or deny any other application for approval of a 
        transaction not later than 180 days after the application is 
        filed. If the Commission does not act within 180 days, such 
        application shall be deemed granted unless the Commission finds, 
        based on good cause, that further consideration is required to 
        determine whether the proposed transaction meets the standards 
        of paragraph (4) and issues an order tolling the time for acting 
        on the application for not more than 180 days, at the end of 
        which additional period the Commission shall grant or deny the 
        application.
            ``(6) For purposes of this subsection, the terms `associate 
        company', `holding company', and `holding company system' have 
        the meaning given those terms in the Public Utility Holding 
        Company Act of 2005.''.

    (b) <<NOTE: 16 USC 824b note.>> Effective Date.--The amendments made 
by this section shall take effect 6 months after the date of enactment 
of this Act.

    (c) Transition Provision.--The amendments made by subsection (a) 
shall not apply to any application under section 203 of the Federal 
Power Act (16 U.S.C. 824b) that was filed on or before the date of 
enactment of this Act.

SEC. 1290. RELIEF FOR EXTRAORDINARY VIOLATIONS.

    (a) Application.--This section applies to any contract entered into 
the Western Interconnection prior to June 20, 2001, with a seller of 
wholesale electricity that the Commission has--
            (1) found to have manipulated the electricity market 
        resulting in unjust and unreasonable rates; and

[[Page 119 STAT. 984]]

            (2) revoked the seller's authority to sell any electricity 
        at market-based rates.

    (b) Relief.--Notwithstanding section 222 of the Federal Power Act 
(as added by section 1262), any provision of title 11, United States 
Code, or any other provision of law, in the case of a contract described 
in subsection (a), the Commission shall have exclusive jurisdiction 
under the Federal Power Act (16 U.S.C. 791a et seq.) to determine 
whether a requirement to make termination payments for power not 
delivered by the seller, or any successor in interest of the seller, is 
not permitted under a rate schedule (or contract under such a schedule) 
or is otherwise unlawful on the grounds that the contract is unjust and 
unreasonable or contrary to the public interest.
    (c) Applicability.--This section applies to any proceeding pending 
on the date of enactment of this section involving a seller described in 
subsection (a) in which there is not a final, nonappealable order by the 
Commission or any other jurisdiction determining the respective rights 
of the seller.

                         Subtitle H--Definitions

SEC. 1291. DEFINITIONS.

    (a) <<NOTE: 42 USC 16481.>> Commission.--In this title, the term 
``Commission'' means the Federal Energy Regulatory Commission.

    (b) Amendment.--Section 3 of the Federal Power Act (16 U.S.C. 796) 
is amended--
            (1) by striking paragraphs (22) and (23) and inserting the 
        following:
            ``(22) Electric utility.--(A) The term `electric utility' 
        means a person or Federal or State agency (including an entity 
        described in section 201(f)) that sells electric energy.
            ``(B) The term `electric utility' includes the Tennessee 
        Valley Authority and each Federal power marketing 
        administration.
            ``(23) Transmitting utility.--The term `transmitting 
        utility' means an entity (including an entity described in 
        section 201(f)) that owns, operates, or controls facilities used 
        for the transmission of electric energy--
                    ``(A) in interstate commerce;
                    ``(B) for the sale of electric energy at 
                wholesale.''; and
            (2) by adding at the end the following:
            ``(26) Electric cooperative.--The term `electric 
        cooperative' means a cooperatively owned electric utility.
            ``(27) RTO.--The term `Regional Transmission Organization' 
        or `RTO' means an entity of sufficient regional scope approved 
        by the Commission--
                    ``(A) to exercise operational or functional control 
                of facilities used for the transmission of electric 
                energy in interstate commerce; and
                    ``(B) to ensure nondiscriminatory access to the 
                facilities.
            ``(28) ISO.--The term `Independent System Operator' or `ISO' 
        means an entity approved by the Commission--
                    ``(A) to exercise operational or functional control 
                of facilities used for the transmission of electric 
                energy in interstate commerce; and
                    ``(B) to ensure nondiscriminatory access to the 
                facilities.

[[Page 119 STAT. 985]]

            ``(29) Transmission organization.--The term `Transmission 
        Organization' means a Regional Transmission Organization, 
        Independent System Operator, independent transmission provider, 
        or other transmission organization finally approved by the 
        Commission for the operation of transmission facilities.''.

    (c) Applicability.--Section 201(f) of the Federal Power Act (16 
U.S.C. 824(f)) is amended by striking ``political subdivision of a 
state,'' and inserting ``political subdivision of a State, an electric 
cooperative that receives financing under the Rural Electrification Act 
of 1936 (7 U.S.C. 901 et seq.) or that sells less than 4,000,000 
megawatt hours of electricity per year,''.

             Subtitle I--Technical and Conforming Amendments

SEC. 1295. CONFORMING AMENDMENTS.

    (a) Section 201 of the Federal Power Act (16 U.S.C. 824) is 
amended--
            (1) in subsection (b)(2)--
                    (A) in the first sentence--
                          (i) by striking ``The'' and inserting 
                      ``Notwithstanding section 201(f), the''; and
                          (ii) by striking ``210, 211, and 212'' and 
                      inserting ``203(a)(2), 206(e), 210, 211, 211A, 
                      212, 215, 216, 217, 218, 219, 220, 221, and 222''; 
                      and
                    (B) in the second sentence--
                          (i) by inserting ``or rule'' after ``any 
                      order''; and
                          (ii) by striking ``210 or 211'' and inserting 
                      ``203(a)(2), 206(e), 210, 211, 211A, 212, 215, 
                      216, 217, 218, 219, 220, 221, or 222''; and
            (2) in subsection (e), by striking ``210, 211, or 212'' and 
        inserting ``206(e), 206(f), 210, 211, 211A, 212, 215, 216, 217, 
        218, 219, 220, 221, or 222''.

    (b) Section 206 of the Federal Power Act (16 U.S.C. 824e) is 
amended--
            (1) in the first sentence of subsection (a), by striking 
        ``hearing had'' and inserting ``hearing held''; and
            (2) in the seventh sentence of subsection (b), by striking 
        ``the public utility to make''.

    (c) Section 211 of the Federal Power Act (16 U.S.C. 824j) is 
amended--
            (1) in subsection (c)--
                    (A) by striking ``(2)'';
                    (B) by striking ``(A)'' and inserting ``(1)''
                    (C) by striking ``(B)'' and inserting ``(2)''; and
                    (D) by striking ``termination of modification'' and 
                inserting ``termination or modification''; and
            (2) in the second sentence of subsection (d)(1), by striking 
        ``electric utility'' the second place it appears and inserting 
        ``transmitting utility''.

    (d) Section 315(c) of the Federal Power Act (16 U.S.C. 825n(c)) is 
amended by striking ``subsection'' and inserting ``section''.

[[Page 119 STAT. 986]]

                      Subtitle J--Economic Dispatch

SEC. 1298. ECONOMIC DISPATCH.

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

``SEC. 223. <<NOTE: 16 USC 824w.>> JOINT BOARDS ON ECONOMIC DISPATCH.

    ``(a) <<NOTE: Establishment.>> In General.--The Commission shall 
convene joint boards on a regional basis pursuant to section 209 of this 
Act to study the issue of security constrained economic dispatch for the 
various market regions. The Commission shall designate the appropriate 
regions to be covered by each such joint board for purposes of this 
section.

    ``(b) Membership.--The Commission shall request each State to 
nominate a representative for the appropriate regional joint board, and 
shall designate a member of the Commission to chair and participate as a 
member of each such board.
    ``(c) Powers.--The sole authority of each joint board convened under 
this section shall be to consider issues relevant to what constitutes 
`security constrained economic dispatch' and how such a mode of 
operating an electric energy system affects or enhances the reliability 
and affordability of service to customers in the region concerned and to 
make recommendations to the Commission regarding such issues.
    ``(d) Report to the Congress.--Within 1 year after enactment of this 
section, the Commission shall issue a report and submit such report to 
the Congress regarding the recommendations of the joint boards under 
this section and the Commission may consolidate the recommendations of 
more than one such regional joint board, including any consensus 
recommendations for statutory or regulatory reform.''.

 TITLE <<NOTE: Energy Tax Incentives Act of 2005.>> XIII--ENERGY POLICY 
TAX INCENTIVES

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

    (a) <<NOTE: 26 USC 1 note.>> Short Title.--This title may be cited 
as the ``Energy Tax Incentives Act of 2005''.

    (b) <<NOTE: 26 USC 1 et seq.>> Amendment of 1986 Code.--Except as 
otherwise expressly provided, whenever in this title an amendment or 
repeal is expressed in terms of an amendment to, or repeal of, a section 
or other provision, the reference shall be considered to be made to a 
section or other provision of the Internal Revenue Code of 1986.

                 Subtitle A--Electricity Infrastructure

SEC. 1301. EXTENSION AND MODIFICATION OF RENEWABLE ELECTRICITY 
            PRODUCTION CREDIT.

    (a) <<NOTE: 26 USC 45.>> 2-Year Extension for Certain Facilities.--
Section 45(d) (relating to qualified facilities) is amended--
            (1) by striking ``January 1, 2006'' each place it appears in 
        paragraphs (1), (2), (3), (5), (6), and (7) and inserting 
        ``January 1, 2008'', and

[[Page 119 STAT. 987]]

            (2) by striking ``January 1, 2006'' in paragraph (4) and 
        inserting ``January 1, 2008 (January 1, 2006, in the case of a 
        facility using solar energy)''.

    (b) <<NOTE: 26 USC 45.>> Increase in Credit Period.--Section 
45(b)(4)(B) (relating to credit period) is amended--
            (1) by inserting ``or clause (iii)'' after ``clause (ii)'' 
        in clause (i), and
            (2) by adding at the end the following:
                          ``(iii) Termination.--Clause (i) shall not 
                      apply to any facility placed in service after the 
                      date of the enactment of this clause.''.

    (c) Expansion of Qualified Resources to Certain Hydropower.--
            (1) In general.--Section 45(c)(1) (defining qualified energy 
        resources) is amended by striking ``and'' at the end of 
        subparagraph (F), by striking the period at the end of 
        subparagraph (G) and inserting ``, and'', and by adding at the 
        end the following new subparagraph:
                    ``(H) qualified hydropower production.''.
            (2) Credit rate.--Section 45(b)(4)(A) (relating to credit 
        rate) is amended by striking ``or (7)'' and inserting ``(7), or 
        (9)''.
            (3) Definition of resources.--Section 45(c) (relating to 
        qualified energy resources and refined coal) is amended by 
        adding at the end the following new paragraph:
            ``(8) Qualified hydropower production.--
                    ``(A) In general.--The term `qualified hydropower 
                production' means--
                          ``(i) in the case of any hydroelectric dam 
                      which was placed in service on or before the date 
                      of the enactment of this paragraph, the 
                      incremental hydropower production for the taxable 
                      year, and
                          ``(ii) in the case of any nonhydroelectric dam 
                      described in subparagraph (C), the hydropower 
                      production from the facility for the taxable year.
                    ``(B) Determination of incremental hydropower 
                production.--
                          ``(i) In general.--For purposes of 
                      subparagraph (A), incremental hydropower 
                      production for any taxable year shall be equal to 
                      the percentage of average annual hydropower 
                      production at the facility attributable to the 
                      efficiency improvements or additions of capacity 
                      placed in service after the date of the enactment 
                      of this paragraph, determined by using the same 
                      water flow information used to determine an 
                      historic average annual hydropower production 
                      baseline for such facility. Such percentage and 
                      baseline shall be certified by the Federal Energy 
                      Regulatory Commission.
                          ``(ii) Operational changes disregarded.--For 
                      purposes of clause (i), the determination of 
                      incremental hydropower production shall not be 
                      based on any operational changes at such facility 
                      not directly associated with the efficiency 
                      improvements or additions of capacity.
                    ``(C) Nonhydroelectric dam.--For purposes of 
                subparagraph (A), a facility is described in this 
                subparagraph if--

[[Page 119 STAT. 988]]

                          ``(i) the facility is licensed by the Federal 
                      Energy Regulatory Commission and meets all other 
                      applicable environmental, licensing, and 
                      regulatory requirements,
                          ``(ii) the facility was placed in service 
                      before the date of the enactment of this paragraph 
                      and did not produce hydroelectric power on the 
                      date of the enactment of this paragraph, and
                          ``(iii) turbines or other generating devices 
                      are to be added to the facility after such date to 
                      produce hydroelectric power, but only if there is 
                      not any enlargement of the diversion structure, or 
                      construction or enlargement of a bypass channel, 
                      or the impoundment or any withholding of any 
                      additional water from the natural stream 
                      channel.''.
            (4) Facilities.--Section 45(d) <<NOTE: 26 USC 
        45.>> (relating to qualified facilities) is amended by adding at 
        the end the following new paragraph:
            ``(9) Qualified hydropower facility.--In the case of a 
        facility producing qualified hydroelectric production described 
        in subsection (c)(8), the term `qualified facility' means--
                    ``(A) in the case of any facility producing 
                incremental hydropower production, such facility but 
                only to the extent of its incremental hydropower 
                production attributable to efficiency improvements or 
                additions to capacity described in subsection (c)(8)(B) 
                placed in service after the date of the enactment of 
                this paragraph and before January 1, 2008, and
                    ``(B) any other facility placed in service after the 
                date of the enactment of this paragraph and before 
                January 1, 2008.
                    ``(C) Credit period.--In the case of a qualified 
                facility described in subparagraph (A), the 10-year 
                period referred to in subsection (a) shall be treated as 
                beginning on the date the efficiency improvements or 
                additions to capacity are placed in service.''.

    (d) Indian Coal.--
            (1) Production facilities.--Subsection (e) of section 45 
        (relating to definitions and special rules) is amended by adding 
        at the end the following new paragraph:
            ``(10) Indian coal production facilities.--
                    ``(A) Determination of credit amount.--In the case 
                of a producer of Indian coal, the credit determined 
                under this section (without regard to this paragraph) 
                for any taxable year shall be increased by an amount 
                equal to the applicable dollar amount per ton of Indian 
                coal--
                          ``(i) produced by the taxpayer at an Indian 
                      coal production facility during the 7-year period 
                      beginning on January 1, 2006, and
                          ``(ii) sold by the taxpayer--
                                    ``(I) to an unrelated person, and
                                    ``(II) during such 7-year period and 
                                such taxable year.
                    ``(B) Applicable dollar amount.--
                          ``(i) In general.--The term `applicable dollar 
                      amount' for any taxable year beginning in a 
                      calendar year means--

[[Page 119 STAT. 989]]

                                    ``(I) $1.50 in the case of calendar 
                                years 2006 through 2009, and
                                    ``(II) $2.00 in the case of calendar 
                                years beginning after 2009.
                          ``(ii) Inflation adjustment.--In the case of 
                      any calendar year after 2006, each of the dollar 
                      amounts under clause (i) shall be equal to the 
                      product of such dollar amount and the inflation 
                      adjustment factor determined under paragraph 
                      (2)(B) for the calendar year, except that such 
                      paragraph shall be applied by substituting `2005' 
                      for `1992'.
                    ``(C) Application of rules.--Rules similar to the 
                rules of the subsection (b)(3) and paragraphs (1), (3), 
                (4), and (5) of this subsection shall apply for purposes 
                of determining the amount of any increase under this 
                paragraph.
                    ``(D) <<NOTE: Effective date.>> Treatment as 
                specified credit.--The increase in the credit determined 
                under subsection (a) by reason of this paragraph with 
                respect to any facility shall be treated as a specified 
                credit for purposes of section 38(c)(4)(A) during the 4-
                year period beginning on the later of January 1, 2006, 
                or the date on which such facility is placed in service 
                by the taxpayer.''.
            (2) <<NOTE: 26 USC 45.>> Resource.--Subsection (c) of 
        section 45 (relating to qualified energy resources and refined 
        coal), as amended by this Act, is amended by adding at the end 
        the following new paragraph:
            ``(9) Indian coal.--
                    ``(A) In general.--The term `Indian coal' means coal 
                which is produced from coal reserves which, on June 14, 
                2005--
                          ``(i) were owned by an Indian tribe, or
                          ``(ii) were held in trust by the United States 
                      for the benefit of an Indian tribe or its members.
                    ``(B) Indian tribe.--For purposes of this paragraph, 
                the term `Indian tribe' has the meaning given such term 
                by section 7871(c)(3)(E)(ii).''.
            (3) Indian coal production facility.--Subsection (d) of 
        section 45, as amended by this Act, is amended by adding at the 
        end the following new paragraph:
            ``(10) Indian coal production facility.--The term `Indian 
        coal production facility' means a facility which is placed in 
        service before January 1, 2009.''.
            (4) Conforming amendment.--The heading for section 45(c) is 
        amended by striking ``Qualified Energy Resources and Refined 
        Coal'' and inserting ``Resources''.

    (e) Technical Amendment Related to Trash Combustion Facilities.--
Section 45(d)(7) (relating to trash combustion facilities) is amended by 
adding at the end the following: ``Such term shall include a new unit 
placed in service in connection with a facility placed in service on or 
before the date of the enactment of this paragraph, but only to the 
extent of the increased amount of electricity produced at the facility 
by reason of such new unit.''.
    (f) Additional Technical Amendments Related to Section 710 of the 
American Jobs Creation Act of 2004.--
            (1) Clause (ii) of section 45(b)(4)(B) is amended by 
        striking ``the date of the enactment of this Act'' and inserting 
        ``January 1, 2005,''.

[[Page 119 STAT. 990]]

            (2) <<NOTE: 26 USC 45.>> Clause (ii) of section 45(c)(3)(A) 
        is amended by inserting ``or any nonhazardous lignin waste 
        material'' after ``cellulosic waste material''.
            (3) Subsection (e) of section 45 is amended by striking 
        paragraph (6).
            (4)(A) Paragraph (9) of section 45(e) is amended to read as 
        follows:
            ``(9) Coordination with credit for producing fuel from a 
        nonconventional source.--
                    ``(A) In general.--The term `qualified facility' 
                shall not include any facility which produces 
                electricity from gas derived from the biodegradation of 
                municipal solid waste if such biodegradation occurred in 
                a facility (within the meaning of section 29) the 
                production from which is allowed as a credit under 
                section 29 for the taxable year or any prior taxable 
                year.
                    ``(B) Refined coal facilities.--The term `refined 
                coal production facility' shall not include any facility 
                the production from which is allowed as a credit under 
                section 29 for the taxable year or any prior taxable 
                year.''.
            (B) Subparagraph (C) of section 45(e)(8) is amended by 
        striking ``and (9)''.
            (5) <<NOTE: 26 USC 168.>> Subclause (I) of section 
        168(e)(3)(B)(vi) is amended to read as follows:
                                    ``(I) is described in subparagraph 
                                (A) of section 48(a)(3) (or would be so 
                                described if `solar and wind' were 
                                substituted for `solar' in clause (i) 
                                thereof and the last sentence of such 
                                section did not apply to such 
                                subparagraph),''.
            (6) Paragraph (4) of section 710(g) of the American Jobs 
        Creation Act of 2004 <<NOTE: 26 USC 45 note.>>  is amended by 
        striking ``January 1, 2004'' and inserting ``January 1, 2005''.

    (g) <<NOTE: 26 USC 45 note.>> Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect of the date of 
        the enactment of this Act.
            (2) Technical amendments.--The amendments made by 
        subsections (e) and (f) shall take effect as if included in the 
        amendments made by section 710 of the American Jobs Creation Act 
        of 2004.

SEC. 1302. APPLICATION OF SECTION 45 CREDIT TO AGRICULTURAL 
            COOPERATIVES.

    (a) In General.--Section 45(e) (relating to definitions and special 
rules), as amended by this Act, is amended by adding at the end the 
following:
            ``(11) Allocation of credit to patrons of agricultural 
        cooperative.--
                    ``(A) Election to allocate.--
                          ``(i) In general.--In the case of an eligible 
                      cooperative organization, any portion of the 
                      credit determined under subsection (a) for the 
                      taxable year may, at the election of the 
                      organization, be apportioned among patrons of the 
                      organization on the basis of the amount of 
                      business done by the patrons during the taxable 
                      year.

[[Page 119 STAT. 991]]

                          ``(ii) Form and effect of election.--An 
                      election under clause (i) for any taxable year 
                      shall be made on a timely filed return for such 
                      year. Such election, once made, shall be 
                      irrevocable for such taxable year. Such election 
                      shall not take effect unless the organization 
                      designates the apportionment as such in a written 
                      notice mailed to its patrons during the payment 
                      period described in section 1382(d).
                    ``(B) Treatment of organizations and patrons.--The 
                amount of the credit apportioned to any patrons under 
                subparagraph (A)--
                          ``(i) shall not be included in the amount 
                      determined under subsection (a) with respect to 
                      the organization for the taxable year, and
                          ``(ii) shall be included in the amount 
                      determined under subsection (a) for the first 
                      taxable year of each patron ending on or after the 
                      last day of the payment period (as defined in 
                      section 1382(d)) for the taxable year of the 
                      organization or, if earlier, for the taxable year 
                      of each patron ending on or after the date on 
                      which the patron receives notice from the 
                      cooperative of the apportionment.
                    ``(C) Special rules for decrease in credits for 
                taxable year.--If the amount of the credit of a 
                cooperative organization determined under subsection (a) 
                for a taxable year is less than the amount of such 
                credit shown on the return of the cooperative 
                organization for such year, an amount equal to the 
                excess of--
                          ``(i) such reduction, over
                          ``(ii) the amount not apportioned to such 
                      patrons under subparagraph (A) for the taxable 
                      year,
                shall be treated as an increase in tax imposed by this 
                chapter on the organization. Such increase shall not be 
                treated as tax imposed by this chapter for purposes of 
                determining the amount of any credit under this chapter.
                    ``(D) Eligible cooperative defined.--For purposes of 
                this section the term `eligible cooperative' means a 
                cooperative organization described in section 1381(a) 
                which is owned more than 50 percent by agricultural 
                producers or by entities owned by agricultural 
                producers. For this purpose an entity owned by an 
                agricultural producer is one that is more than 50 
                percent owned by agricultural producers.''.

    (b) Conforming Amendment.--The last sentence of section 55(c)(1) 
is <<NOTE: 26 USC 55.>> amended by inserting ``45(e)(11)(C),'' after 
``section''.

    (c) <<NOTE: 26 USC 45 note.>> Effective Date.--The amendments made 
by this section shall apply to taxable years of cooperative 
organizations ending after the date of the enactment of this Act.

SEC. 1303. CLEAN RENEWABLE ENERGY BONDS.

    (a) In General.--Part IV of subchapter A of chapter 1 (relating to 
credits against tax) is amended by adding at the end the following new 
subpart:

[[Page 119 STAT. 992]]

      ``Subpart H--Nonrefundable Credit to Holders of Certain Bonds

``Sec. 54. Credit to holders of clean renewable energy bonds.

``SEC. 54. CREDIT TO HOLDERS OF CLEAN RENEWABLE ENERGY BONDS.

    ``(a) Allowance of Credit.--If a taxpayer holds a clean renewable 
energy bond on one or more credit allowance dates of the bond occurring 
during any taxable year, there shall be allowed as a credit against the 
tax imposed by this chapter for the taxable year an amount equal to the 
sum of the credits determined under subsection (b) with respect to such 
dates.
    ``(b) Amount of Credit.--
            ``(1) In general.--The amount of the credit determined under 
        this subsection with respect to any credit allowance date for a 
        clean renewable energy bond is 25 percent of the annual credit 
        determined with respect to such bond.
            ``(2) Annual credit.--The annual credit determined with 
        respect to any clean renewable energy bond is the product of--
                    ``(A) the credit rate determined by the Secretary 
                under paragraph (3) for the day on which such bond was 
                sold, multiplied by
                    ``(B) the outstanding face amount of the bond.
            ``(3) Determination.--For purposes of paragraph (2), with 
        respect to any clean renewable energy bond, the Secretary shall 
        determine daily or cause to be determined daily a credit rate 
        which shall apply to the first day on which there is a binding, 
        written contract for the sale or exchange of the bond. The 
        credit rate for any day is the credit rate which the Secretary 
        or the Secretary's designee estimates will permit the issuance 
        of clean renewable energy bonds with a specified maturity or 
        redemption date without discount and without interest cost to 
        the qualified issuer.
            ``(4) Credit allowance date.--For purposes of this section, 
        the term `credit allowance date' means--
                    ``(A) March 15,
                    ``(B) June 15,
                    ``(C) September 15, and
                    ``(D) December 15.
        Such term also includes the last day on which the bond is 
        outstanding.
            ``(5) Special rule for issuance and redemption.--In the case 
        of a bond which is issued during the 3-month period ending on a 
        credit allowance date, the amount of the credit determined under 
        this subsection with respect to such credit allowance date shall 
        be a ratable portion of the credit otherwise determined based on 
        the portion of the 3-month period during which the bond is 
        outstanding. A similar rule shall apply when the bond is 
        redeemed or matures.

    ``(c) Limitation Based on Amount of Tax.--The credit allowed under 
subsection (a) for any taxable year shall not exceed the excess of--
            ``(1) the sum of the regular tax liability (as defined in 
        section 26(b)) plus the tax imposed by section 55, over

[[Page 119 STAT. 993]]

            ``(2) the sum of the credits allowable under this part 
        (other than subpart C and this section).

    ``(d) Clean Renewable Energy Bond.--For purposes of this section--
            ``(1) In general.--The term `clean renewable energy bond' 
        means any bond issued as part of an issue if--
                    ``(A) the bond is issued by a qualified issuer 
                pursuant to an allocation by the Secretary to such 
                issuer of a portion of the national clean renewable 
                energy bond limitation under subsection (f)(2),
                    ``(B) 95 percent or more of the proceeds of such 
                issue are to be used for capital expenditures incurred 
                by qualified borrowers for one or more qualified 
                projects,
                    ``(C) the qualified issuer designates such bond for 
                purposes of this section and the bond is in registered 
                form, and
                    ``(D) the issue meets the requirements of subsection 
                (h).
            ``(2) Qualified project; special use rules.--
                    ``(A) In general.--The term `qualified project' 
                means any qualified facility (as determined under 
                section 45(d) without regard to paragraph (10) and to 
                any placed in service date) owned by a qualified 
                borrower.
                    ``(B) Refinancing rules.--For purposes of paragraph 
                (1)(B), a qualified project may be refinanced with 
                proceeds of a clean renewable energy bond only if the 
                indebtedness being refinanced (including any obligation 
                directly or indirectly refinanced by such indebtedness) 
                was originally incurred by a qualified borrower after 
                the date of the enactment of this section.
                    ``(C) <<NOTE: Deadlines.>> Reimbursement.--For 
                purposes of paragraph (1)(B), a clean renewable energy 
                bond may be issued to reimburse a qualified borrower for 
                amounts paid after the date of the enactment of this 
                section with respect to a qualified project, but only 
                if--
                          ``(i) prior to the payment of the original 
                      expenditure, the qualified borrower declared its 
                      intent to reimburse such expenditure with the 
                      proceeds of a clean renewable energy bond,
                          ``(ii) not later than 60 days after payment of 
                      the original expenditure, the qualified issuer 
                      adopts an official intent to reimburse the 
                      original expenditure with such proceeds, and
                          ``(iii) the reimbursement is made not later 
                      than 18 months after the date the original 
                      expenditure is paid.
                    ``(D) Treatment of changes in use.--For purposes of 
                paragraph (1)(B), the proceeds of an issue shall not be 
                treated as used for a qualified project to the extent 
                that a qualified borrower or qualified issuer takes any 
                action within its control which causes such proceeds not 
                to be used for a qualified project. The Secretary shall 
                prescribe regulations specifying remedial actions that 
                may be taken (including conditions to taking such 
                remedial actions) to prevent an action described in the 
                preceding sentence from causing a bond to fail to be a 
                clean renewable energy bond.

[[Page 119 STAT. 994]]

    ``(e) Maturity Limitations.--
            ``(1) Duration of term.--A bond shall not be treated as a 
        clean renewable energy bond if the maturity of such bond exceeds 
        the maximum term determined by the Secretary under paragraph (2) 
        with respect to such bond.
            ``(2) Maximum term.--During each calendar month, the 
        Secretary shall determine the maximum term permitted under this 
        paragraph for bonds issued during the following calendar month. 
        Such maximum term shall be the term which the Secretary 
        estimates will result in the present value of the obligation to 
        repay the principal on the bond being equal to 50 percent of the 
        face amount of such bond. Such present value shall be determined 
        without regard to the requirements of subsection (l)(6) and 
        using as a discount rate the average annual interest rate of 
        tax-exempt obligations having a term of 10 years or more which 
        are issued during the month. If the term as so determined is not 
        a multiple of a whole year, such term shall be rounded to the 
        next highest whole year.

    ``(f) Limitation on Amount of Bonds Designated.--
            ``(1) National limitation.--There is a national clean 
        renewable energy bond limitation of $800,000,000.
            ``(2) Allocation by secretary.--The Secretary shall allocate 
        the amount described in paragraph (1) among qualified projects 
        in such manner as the Secretary determines appropriate, except 
        that the Secretary may not allocate more than $500,000,000 of 
        the national clean renewable energy bond limitation to finance 
        qualified projects of qualified borrowers which are governmental 
        bodies.

    ``(g) Credit Included in Gross Income.--Gross income includes the 
amount of the credit allowed to the taxpayer under this section 
(determined without regard to subsection (c)) and the amount so included 
shall be treated as interest income.
    ``(h) Special Rules Relating to Expenditures.--
            ``(1) In general.--An issue shall be treated as meeting the 
        requirements of this subsection if, as of the date of issuance, 
        the qualified issuer reasonably expects--
                    ``(A) at least 95 percent of the proceeds of such 
                issue are to be spent for one or more qualified projects 
                within the 5-year period beginning on the date of 
                issuance of the clean energy bond,
                    ``(B) a binding commitment with a third party to 
                spend at least 10 percent of the proceeds of such issue 
                will be incurred within the 6-month period beginning on 
                the date of issuance of the clean energy bond or, in the 
                case of a clean energy bond the proceeds of which are to 
                be loaned to two or more qualified borrowers, such 
                binding commitment will be incurred within the 6-month 
                period beginning on the date of the loan of such 
                proceeds to a qualified borrower, and
                    ``(C) such projects will be completed with due 
                diligence and the proceeds of such issue will be spent 
                with due diligence.
            ``(2) Extension of period.--Upon submission of a request 
        prior to the expiration of the period described in paragraph 
        (1)(A), the Secretary may extend such period if the qualified

[[Page 119 STAT. 995]]

        issuer establishes that the failure to satisfy the 5-year 
        requirement is due to reasonable cause and the related projects 
        will continue to proceed with due diligence.
            ``(3) Failure to spend required amount of bond proceeds 
        within 5 years.--To the extent that less than 95 percent of the 
        proceeds of such issue are expended by the close of the 5-year 
        period beginning on the date of issuance (or if an extension has 
        been obtained under paragraph (2), by the close of the extended 
        period), the qualified issuer shall redeem all of the 
        nonqualified bonds within 90 days after the end of such period. 
        For purposes of this paragraph, the amount of the nonqualified 
        bonds required to be redeemed shall be determined in the same 
        manner as under section 142.

    ``(i) Special Rules Relating to Arbitrage.--A bond which is part of 
an issue shall not be treated as a clean renewable energy bond unless, 
with respect to the issue of which the bond is a part, the qualified 
issuer satisfies the arbitrage requirements of section 148 with respect 
to proceeds of the issue.
    ``(j) Cooperative Electric Company; Qualified Energy Tax Credit Bond 
Lender; Governmental Body; Qualified Borrower.--For purposes of this 
section--
            ``(1) Cooperative electric company.--The term `cooperative 
        electric company' means a mutual or cooperative electric company 
        described in section 501(c)(12) or section 1381(a)(2)(C), or a 
        not-for-profit electric utility which has received a loan or 
        loan guarantee under the Rural Electrification Act.
            ``(2) Clean renewable energy bond lender.--The term `clean 
        renewable energy bond lender' means a lender which is a 
        cooperative which is owned by, or has outstanding loans to, 100 
        or more cooperative electric companies and is in existence on 
        February 1, 2002, and shall include any affiliated entity which 
        is controlled by such lender.
            ``(3) Governmental body.--The term `governmental body' means 
        any State, territory, possession of the United States, the 
        District of Columbia, Indian tribal government, and any 
        political subdivision thereof.
            ``(4) Qualified issuer.--The term `qualified issuer' means--
                    ``(A) a clean renewable energy bond lender,
                    ``(B) a cooperative electric company, or
                    ``(C) a governmental body.
            ``(5) Qualified borrower.--The term `qualified borrower' 
        means--
                    ``(A) a mutual or cooperative electric company 
                described in section 501(c)(12) or 1381(a)(2)(C), or
                    ``(B) a governmental body.

    ``(k) Special Rules Relating to Pool Bonds.--No portion of a pooled 
financing bond may be allocable to any loan unless the borrower has 
entered into a written loan commitment for such portion prior to the 
issue date of such issue.
    ``(l) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Bond.--The term `bond' includes any obligation.
            ``(2) Pooled financing bond.--The term `pooled financing 
        bond' shall have the meaning given such term by section 
        149(f)(4)(A).

[[Page 119 STAT. 996]]

            ``(3) Partnership; s <<NOTE: Applicability.>>  corporation; 
        and other pass-thru entities.--
                    ``(A) In general.--
                Under <<NOTE: Regulations.>> regulations prescribed by 
                the Secretary, in the case of a partnership, trust, S 
                corporation, or other pass-thru entity, rules similar to 
                the rules of section 41(g) shall apply with respect to 
                the credit allowable under subsection (a).
                    ``(B) No basis adjustment.--In the case of a bond 
                held by a partnership or an S corporation, rules similar 
                to the rules under section 1397E(i) shall apply.
            ``(4) Bonds <<NOTE: Procedures.>> held by regulated 
        investment companies.--If any clean renewable energy bond is 
        held by a regulated investment company, the credit determined 
        under subsection (a) shall be allowed to shareholders of such 
        company under procedures prescribed by the Secretary.
            ``(5) Treatment for estimated tax purposes.--Solely for 
        purposes of sections 6654 and 6655, the credit allowed by this 
        section (determined without regard to subsection (c)) to a 
        taxpayer by reason of holding a clean renewable energy bond on a 
        credit allowance date shall be treated as if it were a payment 
        of estimated tax made by the taxpayer on such date.
            ``(6) Ratable principal amortization required.--A bond shall 
        not be treated as a clean renewable energy bond unless it is 
        part of an issue which provides for an equal amount of principal 
        to be paid by the qualified issuer during each calendar year 
        that the issue is outstanding.
            ``(7) Reporting.--Issuers of clean renewable energy bonds 
        shall submit reports similar to the reports required under 
        section 149(e).

    ``(m) Termination.--This section shall not apply with respect to any 
bond issued after December 31, 2007.''.
    (b) Reporting.--Subsection (d) of section 6049 (relating to returns 
regarding payments of interest) is amended by adding at the end the 
following new paragraph:
            ``(8) Reporting of credit on clean renewable energy bonds.--
                    ``(A) In general.--For purposes of subsection (a), 
                the term `interest' includes amounts includible in gross 
                income under section 54(g) and such amounts shall be 
                treated as paid on the credit allowance date (as defined 
                in section 54(b)(4)).
                    ``(B) Reporting to corporations, etc.--Except as 
                otherwise provided in regulations, in the case of any 
                interest described in subparagraph (A), subsection 
                (b)(4) shall be applied without regard to subparagraphs 
                (A), (H), (I), (J), (K), and (L)(i) of such subsection.
                    ``(C) Regulatory authority.--The Secretary may 
                prescribe such regulations as are necessary or 
                appropriate to carry out the purposes of this paragraph, 
                including regulations which require more frequent or 
                more detailed reporting.''.

    (c) Conforming Amendments.--
            (1) The table of subparts for part IV of subchapter A of 
        chapter 1 is amended by adding at the end the following new 
        item:

[[Page 119 STAT. 997]]

    ``subpart h. nonrefundable credit to holders of certain bonds.''.


            (2) Section 1397E(c)(2) is amended by inserting ``, and 
        subpart H thereof'' after ``refundable credits''.
            (3) Subsection (h) of section 1397E is amended to read as 
        follows:

    ``(h) Credit Treated as Nonrefundable Bondholder Credit.--For 
purposes of this title, the credit allowed by this section shall be 
treated as a credit allowable under subpart H of part IV of subchapter A 
of this chapter.''.
            (4) Section 6401(b)(1) is amended by striking ``and G'' and 
        inserting ``G, and H''.

    (d) Issuance of Regulations.--The <<NOTE: Deadline. 26 USC 54 
note.>> Secretary of the Treasury shall issue regulations required under 
section 54 of the Internal Revenue Code of 1986 (as added by this 
section) not later than 120 days after the date of the enactment of this 
Act.

    (e) Effective Date.--The <<NOTE: 26 USC 54 note.>> amendments made 
by this section shall apply to bonds issued after December 31, 2005.

SEC. 1304. TREATMENT OF INCOME OF CERTAIN ELECTRIC COOPERATIVES.

    (a) Elimination of Sunset on Treatment of Income From Open Access 
and Nuclear Decommissioning Transactions.--Section 501(c)(12)(C) is 
amended by striking the last sentence.
    (b) Elimination of Sunset on Treatment of Income From Load Loss 
Transactions.--Section 501(c)(12)(H) is amended by striking clause (x).
    (c) Effective Date.--The <<NOTE: 26 USC 501 note.>> amendments made 
by this section shall take effect on the date of the enactment of this 
Act.

SEC. 1305. DISPOSITIONS OF TRANSMISSION PROPERTY TO IMPLEMENT FERC 
            RESTRUCTURING POLICY.

    (a) In General.--Section 451(i)(3) (defining qualifying electric 
transmission transaction) is amended by striking ``2007'' and inserting 
``2008''.
    (b) Technical Amendment Related to Section 909 of the American Jobs 
Creation Act of 2004.--Clause (ii) of section 451(i)(4)(B) is amended by 
striking ``the close of the period applicable under subsection (a)(2)(B) 
as extended under paragraph (2)'' and inserting ``December 31, 2007''.
    (c) Effective <<NOTE: 26 USC 451 note.>> Dates.--
            (1) In general.--The amendment made by subsection (a) shall 
        apply to transactions occurring after the date of the enactment 
        of this Act.
            (2) Technical amendment.--The amendment made by subsection 
        (b) shall take effect as if included in the amendments made by 
        section 909 of the American Jobs Creation Act of 2004.

SEC. 1306. CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR POWER FACILITIES.

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

[[Page 119 STAT. 998]]

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

    ``(a) General Rule.--For purposes of section 38, the advanced 
nuclear power facility production credit of any taxpayer for any taxable 
year is equal to the product of--
            ``(1) 1.8 cents, multiplied by
            ``(2) the kilowatt hours of electricity--
                    ``(A) produced by the taxpayer at an advanced 
                nuclear power facility during the 8-year period 
                beginning on the date the facility was originally placed 
                in service, and
                    ``(B) sold by the taxpayer to an unrelated person 
                during the taxable year.

    ``(b) National Limitation.--
            ``(1) In general.--The amount of credit which would (but for 
        this subsection and subsection (c)) be allowed with respect to 
        any facility for any taxable year shall not exceed the amount 
        which bears the same ratio to such amount of credit as--
                    ``(A) the national megawatt capacity limitation 
                allocated to the facility, bears to
                    ``(B) the total megawatt nameplate capacity of such 
                facility.
            ``(2) Amount of national limitation.--The national megawatt 
        capacity limitation shall be 6,000 megawatts.
            ``(3) Allocation of limitation.--The Secretary shall 
        allocate the national megawatt capacity limitation in such 
        manner as the Secretary may prescribe.
            ``(4) Regulations.--Not <<NOTE: Deadline.>> later than 6 
        months after the date of the enactment of this section, the 
        Secretary shall prescribe such regulations as may be necessary 
        or appropriate to carry out the purposes of this subsection. 
        Such regulations shall provide a certification process under 
        which the Secretary, after consultation with the Secretary of 
        Energy, shall approve and allocate the national megawatt 
        capacity limitation.

    ``(c) Other Limitations.--
            ``(1) Annual limitation.--The amount of the credit allowable 
        under subsection (a) (after the application of subsection (b)) 
        for any taxable year with respect to any facility shall not 
        exceed an amount which bears the same ratio to $125,000,000 as--
                    ``(A) the national megawatt capacity limitation 
                allocated under subsection (b) to the facility, bears to
                    ``(B) 1,000.
            ``(2) Other limitations.--Rules similar to the rules of 
        section 45(b)(1) shall apply for purposes of this section.

    ``(d) Advanced Nuclear Power Facility.--For purposes of this 
section--
            ``(1) In general.--The term `advanced nuclear power 
        facility' means any advanced nuclear facility--
                    ``(A) which is owned by the taxpayer and which uses 
                nuclear energy to produce electricity, and
                    ``(B) which is placed in service after the date of 
                the enactment of this paragraph and before January 1, 
                2021.
            ``(2) Advanced nuclear facility.--For purposes of paragraph 
        (1), the term `advanced nuclear facility' means any nuclear 
        facility the reactor design for which is approved after December 
        31, 1993, by the Nuclear Regulatory Commission

[[Page 119 STAT. 999]]

        (and such design or a substantially similar design of comparable 
        capacity was not approved on or before such date).

    ``(e) Other Rules To Apply.--Rules similar to the rules of 
paragraphs (1), (2), (3), (4), and (5) of section 45(e) shall apply for 
purposes of this section.''.
    (b) Credit Treated as Business Credit.--Section 38(b), as amended by 
the Transportation Equity Act: A Legacy for Users, is amended by 
striking ``plus'' at the end of paragraph (19), by striking the period 
at the end of paragraph (20) and inserting ``, plus'', and by adding at 
the end the following:
            ``(21) the advanced nuclear power facility production credit 
        determined under section 45J(a).''.

    (c) Clerical Amendment.--The table of sections for subpart D of part 
IV of subchapter A of chapter 1 is amended by adding at the end the 
following:

``Sec. 45J. Credit for production from advanced nuclear power 
           facilities.''.

    (d) Effective Date.--The <<NOTE: 26 USC 38 note.>> amendments made 
by this section shall apply to production in taxable years beginning 
after the date of the enactment of this Act.

SEC. 1307. CREDIT FOR INVESTMENT IN CLEAN COAL FACILITIES.

    (a) In General.--Section 46 (relating to amount of credit) is 
amended by striking ``and'' at the end of paragraph (1), by striking the 
period at the end of paragraph (2), and by adding at the end the 
following new paragraphs:
            ``(3) the qualifying advanced coal project credit, and
            ``(4) the qualifying gasification project credit.''.

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

``SEC. 48A. QUALIFYING ADVANCED COAL PROJECT CREDIT.

    ``(a) In General.--For purposes of section 46, the qualifying 
advanced coal project credit for any taxable year is an amount equal 
to--
            ``(1) 20 percent of the qualified investment for such 
        taxable year in the case of projects described in subsection 
        (d)(3)(B)(i), and
            ``(2) 15 percent of the qualified investment for such 
        taxable year in the case of projects described in subsection 
        (d)(3)(B)(ii).

    ``(b) Qualified Investment.--
            ``(1) In general.--For purposes of subsection (a), the 
        qualified investment for any taxable year is the basis of 
        eligible property placed in service by the taxpayer during such 
        taxable year which is part of a qualifying advanced coal 
        project--
                    ``(A)(i) the construction, reconstruction, or 
                erection of which is completed by the taxpayer, or
                    ``(ii) which is acquired by the taxpayer if the 
                original use of such property commences with the 
                taxpayer, and
                    ``(B) with respect to which depreciation (or 
                amortization in lieu of depreciation) is allowable.
            ``(2) Special rule for certain subsidized property.--Rules 
        similar to section 48(a)(4) shall apply for purposes of this 
        section.
            ``(3) Certain qualified progress expenditures rules made 
        applicable.--Rules similar to the rules of subsections (c)(4) 
        and (d) of section 46 (as in effect on the day before

[[Page 119 STAT. 1000]]

        the enactment of the Revenue Reconciliation Act of 1990) shall 
        apply for purposes of this section.

    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualifying advanced coal project.--The term 
        `qualifying advanced coal project' means a project which meets 
        the requirements of subsection (e).
            ``(2) Advanced coal-based generation technology.--The term 
        `advanced coal-based generation technology' means a technology 
        which meets the requirements of subsection (f).
            ``(3) Eligible property.--The term `eligible property' 
        means--
                    ``(A) in the case of any qualifying advanced coal 
                project using an integrated gasification combined cycle, 
                any property which is a part of such project and is 
                necessary for the gasification of coal, including any 
                coal handling and gas separation equipment, and
                    ``(B) in the case of any other qualifying advanced 
                coal project, any property which is a part of such 
                project.
            ``(4) Coal.--The term `coal' means anthracite, bituminous 
        coal, subbituminous coal, lignite, and peat.
            ``(5) Greenhouse gas capture capability.--The term 
        `greenhouse gas capture capability' means an integrated 
        gasification combined cycle technology facility capable of 
        adding components which can capture, separate on a long-term 
        basis, isolate, remove, and sequester greenhouse gases which 
        result from the generation of electricity.
            ``(6) Electric generation unit.--The term `electric 
        generation unit' means any facility at least 50 percent of the 
        total annual net output of which is electrical power, including 
        an otherwise eligible facility which is used in an industrial 
        application.
            ``(7) Integrated gasification combined cycle.--The term 
        `integrated gasification combined cycle' means an electric 
        generation unit which produces electricity by converting coal to 
        synthesis gas which is used to fuel a combined-cycle plant which 
        produces electricity from both a combustion turbine (including a 
        combustion turbine/fuel cell hybrid) and a steam turbine.

    ``(d) Qualifying <<NOTE: Deadlines.>> Advanced Coal Project 
Program.--
            ``(1) Establishment.--Not later than 180 days after the date 
        of enactment of this section, the Secretary, in consultation 
        with the Secretary of Energy, shall establish a qualifying 
        advanced coal project program for the deployment of advanced 
        coal-based generation technologies.
            ``(2) Certification.--
                    ``(A) Application period.--Each applicant for 
                certification under this paragraph shall submit an 
                application meeting the requirements of subparagraph 
                (B). An applicant may only submit an application during 
                the 3-year period beginning on the date the Secretary 
                establishes the program under paragraph (1).
                    ``(B) Requirements for applications for 
                certification.--An application under subparagraph (A) 
                shall contain such information as the Secretary may 
                require in order to make a determination to accept or 
                reject an application for certification as meeting the 
                requirements under subsection (e)(1). <<NOTE: Trade 
                secrets. Confidential information.>> Any information 
                contained in the

[[Page 119 STAT. 1001]]

                application shall be protected as provided in section 
                552(b)(4) of title 5, United States Code.
                    ``(C) Time to act upon applications for 
                certification.--The Secretary shall issue a 
                determination as to whether an applicant has met the 
                requirements under subsection (e)(1) within 60 days 
                following the date of submittal of the application for 
                certification.
                    ``(D) Time to meet criteria for certification.--Each 
                applicant for certification shall have 2 years from the 
                date of acceptance by the Secretary of the application 
                during which to provide to the Secretary evidence that 
                the criteria set forth in subsection (e)(2) have been 
                met.
                    ``(E) Period of issuance.--An applicant which 
                receives a certification shall have 5 years from the 
                date of issuance of the certification in order to place 
                the project in service and if such project is not placed 
                in service by that time period then the certification 
                shall no longer be valid.
            ``(3) Aggregate credits.--
                    ``(A) In general.--The aggregate credits allowed 
                under subsection (a) for projects certified by the 
                Secretary under paragraph (2) may not exceed 
                $1,300,000,000.
                    ``(B) Particular projects.--Of the dollar amount in 
                subparagraph (A), the Secretary is authorized to 
                certify--
                          ``(i) $800,000,000 for integrated gasification 
                      combined cycle projects, and
                          ``(ii) $500,000,000 for projects which use 
                      other advanced coal-based generation technologies.
            ``(4) Review and redistribution.--
                    ``(A) Review.--Not later than 6 years after the date 
                of enactment of this section, the Secretary shall review 
                the credits allocated under this section as of the date 
                which is 6 years after the date of enactment of this 
                section.
                    ``(B) Redistribution.--The Secretary may reallocate 
                credits available under clauses (i) and (ii) of 
                paragraph (3)(B) if the Secretary determines that--
                          ``(i) there is an insufficient quantity of 
                      qualifying applications for certification pending 
                      at the time of the review, or
                          ``(ii) any certification made pursuant to 
                      subsection paragraph (2) has been revoked pursuant 
                      to subsection paragraph (2)(D) because the project 
                      subject to the certification has been delayed as a 
                      result of third party opposition or litigation to 
                      the proposed project.
                    ``(C) Reallocation.--If the Secretary determines 
                that credits under clause (i) or (ii) of paragraph 
                (3)(B) are available for reallocation pursuant to the 
                requirements set forth in paragraph (2), the Secretary 
                is authorized to conduct an additional program for 
                applications for certification.

    ``(e) Qualifying Advanced Coal Projects.--
            ``(1) Requirements.--For purposes of subsection (c)(1), a 
        project shall be considered a qualifying advanced coal project 
        that the Secretary may certify under subsection (d)(2) if the 
        Secretary determines that, at a minimum--
                    ``(A) the project uses an advanced coal-based 
                generation technology--
                          ``(i) to power a new electric generation unit; 
                      or

[[Page 119 STAT. 1002]]

                          ``(ii) to retrofit or repower an existing 
                      electric generation unit (including an existing 
                      natural gas-fired combined cycle unit);
                    ``(B) the fuel input for the project, when 
                completed, is at least 75 percent coal;
                    ``(C) the project, consisting of one or more 
                electric generation units at one site, will have a total 
                nameplate generating capacity of at least 400 megawatts;
                    ``(D) the applicant provides evidence that a 
                majority of the output of the project is reasonably 
                expected to be acquired or utilized;
                    ``(E) the applicant provides evidence of ownership 
                or control of a site of sufficient size to allow the 
                proposed project to be constructed and to operate on a 
                long-term basis; and
                    ``(F) the project will be located in the United 
                States.
            ``(2) Requirements for certification.--For the purpose of 
        subsection (d)(2)(D), a project shall be eligible for 
        certification only if the Secretary determines that--
                    ``(A) the applicant for certification has received 
                all Federal and State environmental authorizations or 
                reviews necessary to commence construction of the 
                project; and
                    ``(B) the applicant for certification, except in the 
                case of a retrofit or repower of an existing electric 
                generation unit, has purchased or entered into a binding 
                contract for the purchase of the main steam turbine or 
                turbines for the project, except that such contract may 
                be contingent upon receipt of a certification under 
                subsection (d)(2).
            ``(3) Priority for integrated gasification combined cycle 
        projects.--In determining which qualifying advanced coal 
        projects to certify under subsection (d)(2), the Secretary 
        shall--
                    ``(A) certify capacity, in accordance with the 
                procedures set forth in subsection (d), in relatively 
                equal amounts to--
                          ``(i) projects using bituminous coal as a 
                      primary feedstock,
                          ``(ii) projects using subbituminous coal as a 
                      primary feedstock, and
                          ``(iii) projects using lignite as a primary 
                      feedstock, and
                    ``(B) give high priority to projects which include, 
                as determined by the Secretary--
                          ``(i) greenhouse gas capture capability,
                          ``(ii) increased by-product utilization, and
                          ``(iii) other benefits.

    ``(f) Advanced Coal-Based Generation Technology.--
            ``(1) In general.--For the purpose of this section, an 
        electric generation unit uses advanced coal-based generation 
        technology if--
                    ``(A) the unit--
                          ``(i) uses integrated gasification combined 
                      cycle technology, or
                          ``(ii) except as provided in paragraph (3), 
                      has a design net heat rate of 8530 Btu/kWh (40 
                      percent efficiency), and

[[Page 119 STAT. 1003]]

                    ``(B) the unit is designed to meet the performance 
                requirements in the following table:

 
 
 
Performance characteristic:         Design level for project:
  SO2 (percent removal)...........  99 percent
  NOx (emissions).................  0.07 lbs/MMBTU
  PM* (emissions).................  0.015 lbs/MMBTU
  Hg (percent removal)............  90 percent


            ``(2) Design net heat rate.--For purposes of this 
        subsection, design net heat rate with respect to an electric 
        generation unit shall--
                    ``(A) be measured in Btu per kilowatt hour (higher 
                heating value),
                    ``(B) be based on the design annual heat input to 
                the unit and the rated net electrical power, fuels, and 
                chemicals output of the unit (determined without regard 
                to the cogeneration of steam by the unit),
                    ``(C) be adjusted for the heat content of the design 
                coal to be used by the unit--
                          ``(i) if the heat content is less than 13,500 
                      Btu per pound, but greater than 7,000 Btu per 
                      pound, according to the following formula: design 
                      net heat rate = unit net heat rate x [1-[((13,500-
                      design coal heat content, Btu per pound)/1,000)* 
                      0.013]], and
                          ``(ii) if the heat content is less than or 
                      equal to 7,000 Btu per pound, according to the 
                      following formula: design net heat rate = unit net 
                      heat rate x [1-[((13,500-design coal heat content, 
                      Btu per pound)/1,000)* 0.018]], and
                    ``(D) be corrected for the site reference conditions 
                of--
                          ``(i) elevation above sea level of 500 feet,
                          ``(ii) air pressure of 14.4 pounds per square 
                      inch absolute,
                          ``(iii) temperature, dry bulb of 63F,
                          ``(iv) temperature, wet bulb of 54F, and
                          ``(v) relative humidity of 55 percent.
            ``(3) Existing units.--In the case of any electric 
        generation unit in existence on the date of the enactment of 
        this section, such unit uses advanced coal-based generation 
        technology if, in lieu of the requirements under paragraph 
        (1)(A)(ii), such unit achieves a minimum efficiency of 35 
        percent and an overall thermal design efficiency improvement, 
        compared to the efficiency of the unit as operated, of not less 
        than--
                    ``(A) 7 percentage points for coal of more than 
                9,000 Btu,
                    ``(B) 6 percentage points for coal of 7,000 to 9,000 
                Btu, or
                    ``(C) 4 percentage points for coal of less than 
                7,000 Btu.

    ``(g) Applicability.--No use of technology (or level of emission 
reduction solely by reason of the use of the technology), and no 
achievement of any emission reduction by the demonstration of any 
technology or performance level, by or at one or more facilities with 
respect to which a credit is allowed under this section, shall

[[Page 119 STAT. 1004]]

be considered to indicate that the technology or performance level is--
            ``(1) adequately demonstrated for purposes of section 111 of 
        the Clean Air Act (42 U.S.C. 7411);
            ``(2) achievable for purposes of section 169 of that Act (42 
        U.S.C. 7479); or
            ``(3) achievable in practice for purposes of section 171 of 
        such Act (42 U.S.C. 7501).

``SEC. 48B. QUALIFYING GASIFICATION PROJECT CREDIT.

    ``(a) In General.--For purposes of section 46, the qualifying 
gasification project credit for any taxable year is an amount equal to 
20 percent of the qualified investment for such taxable year.
    ``(b) Qualified Investment.--
            ``(1) In general.--For purposes of subsection (a), the 
        qualified investment for any taxable year is the basis of 
        eligible property placed in service by the taxpayer during such 
        taxable year which is part of a qualifying gasification 
        project--
                    ``(A)(i) the construction, reconstruction, or 
                erection of which is completed by the taxpayer, or
                    ``(ii) which is acquired by the taxpayer if the 
                original use of such property commences with the 
                taxpayer, and
                    ``(B) with respect to which depreciation (or 
                amortization in lieu of depreciation) is allowable.
            ``(2) Special rule for certain subsidized property.--Rules 
        similar to section 48(a)(4) shall apply for purposes of this 
        section.
            ``(3) Certain qualified progress expenditures rules made 
        applicable.--Rules similar to the rules of subsections (c)(4) 
        and (d) of section 46 (as in effect on the day before the 
        enactment of the Revenue Reconciliation Act of 1990) shall apply 
        for purposes of this section.

    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualifying gasification project.--The term `qualifying 
        gasification project' means any project which--
                    ``(A) employs gasification technology,
                    ``(B) will be carried out by an eligible entity, and
                    ``(C) any portion of the qualified investment of 
                which is certified under the qualifying gasification 
                program as eligible for credit under this section in an 
                amount (not to exceed $650,000,000) determined by the 
                Secretary.
            ``(2) Gasification technology.--The term `gasification 
        technology' means any process which converts a solid or liquid 
        product from coal, petroleum residue, biomass, or other 
        materials which are recovered for their energy or feedstock 
        value into a synthesis gas composed primarily of carbon monoxide 
        and hydrogen for direct use or subsequent chemical or physical 
        conversion.
            ``(3) Eligible property.--The term `eligible property' means 
        any property which is a part of a qualifying gasification 
        project and is necessary for the gasification technology of such 
        project.
            ``(4) Biomass.--
                    ``(A) In general.--The term `biomass' means any--
                          ``(i) agricultural or plant waste,
                          ``(ii) byproduct of wood or paper mill 
                      operations, including lignin in spent pulping 
                      liquors, and

[[Page 119 STAT. 1005]]

                          ``(iii) other products of forestry 
                      maintenance.
                    ``(B) Exclusion.--The term `biomass' does not 
                include paper which is commonly recycled.
            ``(5) Carbon capture capability.--The term `carbon capture 
        capability' means a gasification plant design which is 
        determined by the Secretary to reflect reasonable consideration 
        for, and be capable of, accommodating the equipment likely to be 
        necessary to capture carbon dioxide from the gaseous stream, for 
        later use or sequestration, which would otherwise be emitted in 
        the flue gas from a project which uses a nonrenewable fuel.
            ``(6) Coal.--The term `coal' means anthracite, bituminous 
        coal, subbituminous coal, lignite, and peat.
            ``(7) Eligible entity.--The term `eligible entity' means any 
        person whose application for certification is principally 
        intended for use in a domestic project which employs domestic 
        gasification applications related to--
                    ``(A) chemicals,
                    ``(B) fertilizers,
                    ``(C) glass,
                    ``(D) steel,
                    ``(E) petroleum residues,
                    ``(F) forest products, and
                    ``(G) agriculture, including feedlots and dairy 
                operations.
            ``(8) Petroleum residue.--The term `petroleum residue' means 
        the carbonized product of high-boiling hydrocarbon fractions 
        obtained in petroleum processing.

    ``(d) Qualifying Gasification Project Program.--
            ``(1) In general.--Not <<NOTE: Deadline.>> later than 180 
        days after the date of the enactment of this section, the 
        Secretary, in consultation with the Secretary of Energy, shall 
        establish a qualifying gasification project program to consider 
        and award certifications for qualified investment eligible for 
        credits under this section to qualifying gasification project 
        sponsors under this section. The total amounts of credit that 
        may be allocated under the program shall not exceed $350,000,000 
        under rules similar to the rules of section 48A(d)(4).
            ``(2) Period of issuance.--A <<NOTE: Deadline.>> certificate 
        of eligibility under paragraph (1) may be issued only during the 
        10-fiscal year period beginning on October 1, 2005.
            ``(3) Selection criteria.--The Secretary shall not make a 
        competitive certification award for qualified investment for 
        credit eligibility under this section unless the recipient has 
        documented to the satisfaction of the Secretary that--
                    ``(A) the award recipient is financially viable 
                without the receipt of additional Federal funding 
                associated with the proposed project,
                    ``(B) the recipient will provide sufficient 
                information to the Secretary for the Secretary to ensure 
                that the qualified investment is spent efficiently and 
                effectively,
                    ``(C) a market exists for the products of the 
                proposed project as evidenced by contracts or written 
                statements of intent from potential customers,
                    ``(D) the fuels identified with respect to the 
                gasification technology for such project will comprise 
                at least 90 percent of the fuels required by the project 
                for the production

[[Page 119 STAT. 1006]]

                of chemical feedstocks, liquid transportation fuels, or 
                coproduction of electricity,
                    ``(E) the award recipient's project team is 
                competent in the construction and operation of the 
                gasification technology proposed, with preference given 
                to those recipients with experience which demonstrates 
                successful and reliable operations of the technology on 
                domestic fuels so identified, and
                    ``(F) the award recipient has met other criteria 
                established and published by the Secretary.

    ``(e) Denial of Double Benefit.--A credit shall not be allowed under 
this section for any qualified investment for which a credit is allowed 
under section 48A.''.
    (c) Conforming Amendments.--
            (1) Section 49(a)(1)(C) is amended by striking ``and'' at 
        the end of clause (ii), by striking clause (iii), and by adding 
        after clause (ii) the following new clauses:
                          ``(iii) the basis of any property which is 
                      part of a qualifying advanced coal project under 
                      section 48A, and
                          ``(iv) the basis of any property which is part 
                      of a qualifying gasification project under section 
                      48B.''.
            (2) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 is amended by inserting after the item 
        relating to section 48 the following new items:

``Sec. 48A. Qualifying advanced coal project credit.
``Sec. 48B. Qualifying gasification project credit.''.

    (d) Effective Date.--The <<NOTE: 26 USC 46 note.>> amendments made 
by this section shall apply to periods after the date of the enactment 
of this Act, under rules similar to the rules of section 48(m) of the 
Internal Revenue Code of 1986 (as in effect on the day before the date 
of the enactment of the Revenue Reconciliation Act of 1990).

SEC. 1308. ELECTRIC TRANSMISSION PROPERTY TREATED AS 15-YEAR PROPERTY.

    (a) In General.--Subparagraph (E) of section 168(e)(3) (relating to 
classification of certain property) is amended by striking ``and'' at 
the end of clause (v), by striking the period at the end of clause (vi) 
and inserting ``, and'', and by adding at the end the following new 
clause:
                          ``(vii) any section 1245 property (as defined 
                      in section 1245(a)(3)) used in the transmission at 
                      69 or more kilovolts of electricity for sale and 
                      the original use of which commences with the 
                      taxpayer after April 11, 2005.''.

    (b) Alternative System.--The table contained in section 168(g)(3)(B) 
(relating to special rule for certain property assigned to classes) is 
amended by inserting after the item relating to subparagraph (E)(vi) the 
following new item:

 
 
 
``(E)(vii).................................................        30''.
 


    (c) Effective <<NOTE: 26 USC 168 note.>> Date.--
            (1) In general.--The amendments made by this section shall 
        apply to property placed in service after April 11, 2005.

[[Page 119 STAT. 1007]]

            (2) Exception.--The amendments made by this section shall 
        not apply to any property with respect to which the taxpayer or 
        a related party has entered into a binding contract for the 
        construction thereof on or before April 11, 2005, or, in the 
        case of self-constructed property, has started construction on 
        or before such date.

SEC. 1309. EXPANSION OF AMORTIZATION FOR CERTAIN ATMOSPHERIC POLLUTION 
            CONTROL FACILITIES IN CONNECTION WITH PLANTS FIRST PLACED IN 
            SERVICE AFTER 1975.

    (a) Eligibility of Post-1975 Pollution Control Facilities.--
Subsection (d) of section 169 (relating to definitions) is amended by 
adding at the end the following:
            ``(5) Special rule relating to certain atmospheric pollution 
        control facilities.--In the case of any atmospheric pollution 
        control facility which is placed in service after April 11, 
        2005, and used in connection with an electric generation plant 
        or other property which is primarily coal fired--
                    ``(A) paragraph (1) shall be applied without regard 
                to the phrase `in operation before January 1, 1976', and
                    ``(B) this section shall be applied by substituting 
                `84' for `60' each place it appears in subsections (a) 
                and (b).''.

    (b) Treatment as New Identifiable Treatment Facility.--Subparagraph 
(B) of section 169(d)(4) is amended to read as follows:
                    ``(B) Certain facilities placed in operation after 
                april 11, 2005.--In the case of any facility described 
                in paragraph (1) solely by reason of paragraph (5), 
                subparagraph (A) shall be applied by substituting `April 
                11, 2005' for `December 31, 1968' each place it appears 
                therein.''.

    (c) Conforming Amendment.--The heading for section 169(d) is amended 
by inserting ``and Special Rules'' after ``Definitions''.
    (d) Technical Amendment.--Section 169(d)(3) is amended by striking 
``Health, Education, and Welfare'' and inserting ``Health and Human 
Services''.
    (e) Effective Date.--The <<NOTE: 26 USC 169 note.>> amendments made 
by this section shall apply to facilities placed in service after April 
11, 2005.

SEC. 1310. MODIFICATIONS TO SPECIAL RULES FOR NUCLEAR DECOMMISSIONING 
            COSTS.

    (a) Repeal of Limitation on Deposits Into Fund Based on Cost of 
Service; Contributions After Funding Period.--Subsection (b) of section 
468A (relating to special rules for nuclear decommissioning costs) is 
amended to read as follows:
    ``(b) Limitation on Amounts Paid Into Fund.--The amount which a 
taxpayer may pay into the Fund for any taxable year shall not exceed the 
ruling amount applicable to such taxable year.''.
    (b) Treatment of Certain Decommissioning Costs.--
            (1) In general.--Section 468A is amended by redesignating 
        subsections (f) and (g) as subsections (g) and (h), 
        respectively, and by inserting after subsection (e) the 
        following new subsection:

    ``(f) Transfers Into Qualified Funds.--
            ``(1) In general.--Notwithstanding subsection (b), any 
        taxpayer maintaining a Fund to which this section applies with 
        respect to a nuclear power plant may transfer into such Fund not 
        more than an amount equal to the present value of the

[[Page 119 STAT. 1008]]

        portion of the total nuclear decommissioning costs with respect 
        to such nuclear power plant previously excluded for such nuclear 
        power plant under subsection (d)(2)(A) as in effect immediately 
        before the date of the enactment of this subsection.
            ``(2) Deduction for amounts transferred.--
                    ``(A) In general.--Except as provided in 
                subparagraph (C), the deduction allowed by subsection 
                (a) for any transfer permitted by this subsection shall 
                be allowed ratably over the remaining estimated useful 
                life (within the meaning of subsection (d)(2)(A)) of the 
                nuclear power plant beginning with the taxable year 
                during which the transfer is made.
                    ``(B) Denial of deduction for previously deducted 
                amounts.--No deduction shall be allowed for any transfer 
                under this subsection of an amount for which a deduction 
                was previously allowed to the taxpayer (or a 
                predecessor) or a corresponding amount was not included 
                in gross income of the taxpayer (or a predecessor). For 
                purposes of the preceding sentence, a ratable portion of 
                each transfer shall be treated as being from previously 
                deducted or excluded amounts to the extent thereof.
                    ``(C) Transfers of qualified funds.--If--
                          ``(i) any transfer permitted by this 
                      subsection is made to any Fund to which this 
                      section applies, and
                          ``(ii) such Fund is transferred thereafter,
                any deduction under this subsection for taxable years 
                ending after the date that such Fund is transferred 
                shall be allowed to the transferor for the taxable year 
                which includes such date.
                    ``(D) Special rules.--
                          ``(i) Gain or loss not recognized on transfers 
                      to fund.--No gain or loss shall be recognized on 
                      any transfer described in paragraph (1).
                          ``(ii) Transfers of appreciated property to 
                      fund.--If appreciated property is transferred in a 
                      transfer described in paragraph (1), the amount of 
                      the deduction shall not exceed the adjusted basis 
                      of such property.
            ``(3) New ruling amount required.--Paragraph (1) shall not 
        apply to any transfer unless the taxpayer requests from the 
        Secretary a new schedule of ruling amounts in connection with 
        such transfer.
            ``(4) No basis in qualified funds.--Notwithstanding any 
        other provision of law, the taxpayer's basis in any Fund to 
        which this section applies shall not be increased by reason of 
        any transfer permitted by this subsection.''.
            (2) New ruling amount to take into account total costs.--
        Subparagraph (A) of section 468A(d)(2) (defining ruling amount) 
        is amended to read as follows:
                    ``(A) fund the total nuclear decommissioning costs 
                with respect to such power plant over the estimated 
                useful life of such power plant, and''.

    (c) New Ruling Amount Required Upon License Renewal.--Paragraph (1) 
of section 468A(d) (relating to request required) is amended by adding 
at the end the following new sentence: ``For purposes of the preceding 
sentence, the taxpayer shall request a schedule of ruling amounts upon 
each renewal of the operating license of the nuclear powerplant.''.

[[Page 119 STAT. 1009]]

    (d) Conforming Amendment.--Section 468A(e)(3) (relating to review of 
amount) is amended by striking ``The Fund'' and inserting ``Except as 
provided in subsection (f), the Fund''.
    (e) Technical Amendments.--Section 468A(e)(2) (relating to taxation 
of Fund) is amended--
            (1) by striking ``rate set forth in subparagraph (B)'' in 
        subparagraph (A) and inserting ``rate of 20 percent'',
            (2) by striking subparagraph (B), and
            (3) by redesignating subparagraphs (C) and (D) as 
        subparagraphs (B) and (C), respectively.

    (f) Effective Date.--The <<NOTE: 26 USC 468A note.>> amendments made 
by this section shall apply to taxable years beginning after December 
31, 2005.

SEC. 1311. FIVE-YEAR NET OPERATING LOSS CARRYOVER FOR CERTAIN LOSSES.

    Paragraph (1) of section 172(b) (relating to net operating loss 
carrybacks and carryovers) is amended by adding at the end the following 
new subparagraph:
                    ``(I) Transmission property and pollution control 
                investment.--
                          ``(i) In general.--At the election of the 
                      taxpayer in any taxable year ending after December 
                      31, 2005, and before January 1, 2009, in the case 
                      of a net operating loss in a taxable year ending 
                      after December 31, 2002, and before January 1, 
                      2006, there shall be a net operating loss 
                      carryback to each of the 5 years preceding the 
                      taxable year of such loss to the extent that such 
                      loss does not exceed 20 percent of the sum of 
                      electric transmission property capital 
                      expenditures and pollution control facility 
                      capital expenditures of the taxpayer for the 
                      taxable year preceding the taxable year in which 
                      such election is made.
                          ``(ii) Limitations.--For purposes of this 
                      subsection--
                                    ``(I) not more than one election may 
                                be made under clause (i) with respect to 
                                any net operating loss in a taxable 
                                year, and
                                    ``(II) an election may not be made 
                                under clause (i) for more than 1 taxable 
                                year beginning in any calendar year.
                          ``(iii) Coordination with ordering rule.--For 
                      purposes of applying subsection (b)(2), the 
                      portion of any loss which is carried back 5 years 
                      by reason of clause (i) shall be treated in a 
                      manner similar to the manner in which a specified 
                      liability loss is treated.
                          ``(iv) Application <<NOTE: Deadline.>> for 
                      adjustment.--In the case of any portion of a net 
                      operating loss to which an election under clause 
                      (i) applies, an application under section 6411(a) 
                      with respect to such loss shall not fail to be 
                      treated as timely filed if filed within 24 months 
                      after the due date specified under such section.
                          ``(v) Special rules relating to refund.--For 
                      purposes of a net operating loss to which an 
                      election under clause (i) applies, references in 
                      sections 6501(h), 6511(d)(2)(A), and 6611(f)(1) to 
                      the taxable year in which such net operating loss 
                      arises or result in a

[[Page 119 STAT. 1010]]

                      net loss carryback shall be treated as references 
                      to the taxable year in which such election occurs.
                          ``(vi) Definitions.--For purposes of this 
                      subparagraph--
                                    ``(I) Electric transmission property 
                                capital expenditures.--The term 
                                `electric transmission property capital 
                                expenditures' means any expenditure, 
                                chargeable to capital account, made by 
                                the taxpayer which is attributable to 
                                electric transmission property used by 
                                the taxpayer in the transmission at 69 
                                or more kilovolts of electricity for 
                                sale. Such term shall not include any 
                                expenditure which may be refunded or the 
                                purpose of which may be modified at the 
                                option of the taxpayer so as to cease to 
                                be treated as an expenditure within the 
                                meaning of such term.
                                    ``(II) Pollution control facility 
                                capital expenditures.--The term 
                                `pollution control facility capital 
                                expenditures' means any expenditure, 
                                chargeable to capital account, made by 
                                an electric utility company (as defined 
                                in section 2(3) of the Public Utility 
                                Holding Company Act (15 U.S.C. 79b(3)), 
                                as in effect on the day before the date 
                                of the enactment of the Energy Tax 
                                Incentives Act of 2005) which is 
                                attributable to a facility which will 
                                qualify as a certified pollution control 
                                facility as determined under section 
                                169(d)(1) by striking `before January 1, 
                                1976,' and by substituting `an 
                                identifiable' for `a new identifiable'. 
                                Such term shall not include any 
                                expenditure which may be refunded or the 
                                purpose of which may be modified at the 
                                option of the taxpayer so as to cease to 
                                be treated as an expenditure within the 
                                meaning of such term.''.

                Subtitle B--Domestic Fossil Fuel Security

SEC. 1321. EXTENSION OF CREDIT FOR PRODUCING FUEL FROM A NONCONVENTIONAL 
            SOURCE FOR FACILITIES PRODUCING COKE OR COKE GAS.

    (a) In General.--Section 29 (relating to credit for producing fuel 
from a nonconventional source) is amended by adding at the end the 
following new subsection:
    ``(h) Extension for Facilities Producing Coke or Coke Gas.--
Notwithstanding subsection (f)--
            ``(1) In general.--In the case of a facility for producing 
        coke or coke gas which was placed in service before January 1, 
        1993, or after June 30, 1998, and before January 1, 2010, this 
        section shall apply with respect to coke and coke gas produced 
        in such facility and sold during the period--
                    ``(A) beginning on the later of January 1, 2006, or 
                the date that such facility is placed in service, and
                    ``(B) ending on the date which is 4 years after the 
                date such period began.

[[Page 119 STAT. 1011]]

            ``(2) Special rules.--In determining the amount of credit 
        allowable under this section solely by reason of this 
        subsection--
                    ``(A) Daily limit.--The amount of qualified fuels 
                sold during any taxable year which may be taken into 
                account by reason of this subsection with respect to any 
                facility shall not exceed an average barrel-of-oil 
                equivalent of 4,000 barrels per day. Days before the 
                date the facility is placed in service shall not be 
                taken into account in determining such average.
                    ``(B) Extension period to commence with unadjusted 
                credit amount.--For purposes of applying subsection 
                (b)(2) to the $3 amount in subsection (a), in the case 
                of fuels sold after 2005, subsection (d)(2)(B) shall be 
                applied by substituting `2004' for `1979'.
                    ``(C) Denial of double benefit.--This subsection 
                shall not apply to any facility producing qualified 
                fuels for which a credit was allowed under this section 
                for the taxable year or any preceding taxable year by 
                reason of subsection (g).''.

    (b) Effective Date.--The <<NOTE: 26 USC 29 note.>> amendment made by 
this section shall apply to fuel produced and sold after December 31, 
2005, in taxable years ending after such date.

SEC. 1322. MODIFICATION OF CREDIT FOR PRODUCING FUEL FROM A 
            NONCONVENTIONAL SOURCE.

    (a) Treatment as Business Credit.--
            (1) Credit moved to subpart relating to business related 
        credits.--The Internal Revenue Code of 1986 is amended by 
        redesignating section 29 as section 45K and by moving section 
        45K (as so redesignated) from subpart B of part IV of subchapter 
        A of chapter 1 to the end of subpart D of part IV of subchapter 
        A of chapter 1.
            (2) Credit treated as business credit.--Section 38(b), as 
        amended by this Act, is amended by striking ``plus'' at the end 
        of paragraph (20), by striking the period at the end of 
        paragraph (21) and inserting ``, plus'', and by adding at the 
        end the following:
            ``(22) the nonconventional source production credit 
        determined under section 45K(a).''.
            (3) Conforming amendments.--
                    (A) Section 30(b)(3)(A) is amended by striking 
                ``sections 27 and 29'' and inserting ``section 27''.
                    (B) Sections 43(b)(2), 45I(b)(2)(C)(i), and 
                613A(c)(6)(C) are each amended by striking ``section 
                29(d)(2)(C)'' and inserting ``section 45K(d)(2)(C)''.
                    (C) Section 45(e)(9), as added by this Act, is 
                amended--
                          (i) by striking ``section 29'' each place it 
                      appears and inserting ``section 45K'', and
                          (ii) by inserting ``(or under section 29, as 
                      in effect on the day before the date of enactment 
                      of the Energy Tax Incentives Act of 2005, for any 
                      prior taxable year)'' before the period at the end 
                      thereof.
                    (D) Section 45I is amended--
                          (i) in subsection (c)(2)(A) by striking 
                      ``section 29(d)(5))'' and inserting ``section 
                      45K(d)(5))'', and

[[Page 119 STAT. 1012]]

                          (ii) in subsection (d)(3) by striking 
                      ``section 29'' both places it appears and 
                      inserting ``section 45K''.
                    (E) Section 45K(a), as redesignated by paragraph 
                (1), is amended by striking ``There shall be allowed as 
                a credit against the tax imposed by this chapter for the 
                taxable year'' and inserting ``For purposes of section 
                38, if the taxpayer elects to have this section apply, 
                the nonconventional source production credit determined 
                under this section for the taxable year is''.
                    (F) Section 45K(b), as so redesignated, is amended 
                by striking paragraph (6).
                    (G) Section 53(d)(1)(B)(iii) is amended by striking 
                ``under section 29'' and all that follows through ``or 
                not allowed''.
                    (H) Section 55(c)(3) is amended by striking 
                ``29(b)(6),''.
                    (I) Subsection (a) of section 772 is amended by 
                inserting ``and'' at the end of paragraph (9), by 
                striking paragraph (10), and by redesignating paragraph 
                (11) as paragraph (10).
                    (J) Paragraph (5) of section 772(d) is amended by 
                striking ``the foreign tax credit, and the credit 
                allowable under section 29'' and inserting ``and the 
                foreign tax credit''.
                    (K) The table of sections for subpart B of part IV 
                of subchapter A of chapter 1 is amended by striking the 
                item relating to section 29.
                    (L) The table of sections for subpart D of part IV 
                of subchapter A of chapter 1 is amended by inserting 
                after the item relating to section 45I the following new 
                item:

``Sec. 45K. Credit for producing fuel from a nonconventional source.''.

    (b) Amendments Conforming to the Repeal of the Natural Gas Policy 
Act of 1978.--
            (1) In general.--Section 29(c)(2)(A) (before redesignation 
        under subsection (a) and as amended by section 1321) is 
        amended--
                    (A) by inserting ``(as in effect before the repeal 
                of such section)'' after ``1978'', and
                    (B) by striking subsection (e) and redesignating 
                subsections (f), (g), and (h) as subsections (e), (f), 
                and (g), respectively.
            (2) Conforming amendments.--Section 29(g)(1) (before 
        redesignation under subsection (a) and paragraph (1) of this 
        subsection) is amended--
                    (A) in subparagraph (A) by striking ``subsection 
                (f)(1)(B)'' and inserting ``subsection (e)(1)(B)'', and
                    (B) in subparagraph (B) by striking ``subsection 
                (f)'' and inserting ``subsection (e)''.

    (c) Effective <<NOTE: 26 USC 29 note.>> Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to credits 
        determined under the Internal Revenue Code of 1986 for taxable 
        years ending after December 31, 2005.
            (2) Subsection (b).--The amendments made by subsection (b) 
        shall take effect on the date of the enactment of this Act.

[[Page 119 STAT. 1013]]

SEC. 1323. TEMPORARY EXPENSING FOR EQUIPMENT USED IN REFINING OF LIQUID 
            FUELS.

    (a) In General.--Part VI of subchapter B of chapter 1 is amended by 
inserting after section 179B the following new section:

``SEC. 179C. ELECTION TO EXPENSE CERTAIN REFINERIES.

    ``(a) Treatment as Expenses.--A taxpayer may elect to treat 50 
percent of the cost of any qualified refinery property as an expense 
which is not chargeable to capital account. Any cost so treated shall be 
allowed as a deduction for the taxable year in which the qualified 
refinery property is placed in service.
    ``(b) Election.--
            ``(1) In general.--An election under this section for any 
        taxable year shall be made on the taxpayer's return of the tax 
        imposed by this chapter for the taxable year. Such election 
        shall be made in such manner as the Secretary may by regulations 
        prescribe.
            ``(2) Election irrevocable.--Any election made under this 
        section may not be revoked except with the consent of the 
        Secretary.

    ``(c) Qualified Refinery Property.--
            ``(1) In general.--The term `qualified refinery property' 
        means any portion of a qualified refinery--
                    ``(A) the original use of which commences with the 
                taxpayer,
                    ``(B) which is placed in service by the taxpayer 
                after the date of the enactment of this section and 
                before January 1, 2012,
                    ``(C) in the case any portion of a qualified 
                refinery (other than a qualified refinery which is 
                separate from any existing refinery), which meets the 
                requirements of subsection (e),
                    ``(D) which meets all applicable environmental laws 
                in effect on the date such portion was placed in 
                service,
                    ``(E) no written binding contract for the 
                construction of which was in effect on or before June 
                14, 2005, and
                    ``(F)(i) the construction of which is subject to a 
                written binding construction contract entered into 
                before January 1, 2008,
                    ``(ii) which is placed in service before January 1, 
                2008, or
                    ``(iii) in the case of self-constructed property, 
                the construction of which began after June 14, 2005, and 
                before January 1, 2008.
            ``(2) Special rule for sale-leasebacks.--For purposes of 
        paragraph (1)(A), if property is--
                    ``(A) originally placed in service after the date of 
                the enactment of this section by a person, and
                    ``(B) sold and leased back by such person within 3 
                months after the date such property was originally 
                placed in service,
        such property shall be treated as originally placed in service 
        not earlier than the date on which such property is used under 
        the leaseback referred to in subparagraph (B).
            ``(3) Effect of waiver under clean air act.--A waiver under 
        the Clean Air Act shall not be taken into account in

[[Page 119 STAT. 1014]]

        determining whether the requirements of paragraph (1)(D) are 
        met.

    ``(d) Qualified Refinery.--For purposes of this section, the term 
`qualified refinery' means any refinery located in the United States 
which is designed to serve the primary purpose of processing liquid fuel 
from crude oil or qualified fuels (as defined in section 45K(c)).
    ``(e) Production Capacity.--The requirements of this subsection are 
met if the portion of the qualified refinery--
            ``(1) enables the existing qualified refinery to increase 
        total volume output (determined without regard to asphalt or 
        lube oil) by 5 percent or more on an average daily basis, or
            ``(2) enables the existing qualified refinery to process 
        qualified fuels (as defined in section 45K(c)) at a rate which 
        is equal to or greater than 25 percent of the total throughput 
        of such qualified refinery on an average daily basis.

    ``(f) Ineligible Refinery Property.--No deduction shall be allowed 
under subsection (a) for any qualified refinery property--
            ``(1) the primary purpose of which is for use as a topping 
        plant, asphalt plant, lube oil facility, crude or product 
        terminal, or blending facility, or
            ``(2) which is built solely to comply with consent decrees 
        or projects mandated by Federal, State, or local governments.

    ``(g) Election to Allocate Deduction to Cooperative Owner.--
            ``(1) In general.--If--
                    ``(A) a taxpayer to which subsection (a) applies is 
                an organization to which part I of subchapter T applies, 
                and
                    ``(B) one or more persons directly holding an 
                ownership interest in the taxpayer are organizations to 
                which part I of subchapter T apply,
        the taxpayer may elect to allocate all or a portion of the 
        deduction allowable under subsection (a) to such persons. Such 
        allocation shall be equal to the person's ratable share of the 
        total amount allocated, determined on the basis of the person's 
        ownership interest in the taxpayer. The taxable income of the 
        taxpayer shall not be reduced under section 1382 by reason of 
        any amount to which the preceding sentence applies.
            ``(2) Form and effect of election.--An election under 
        paragraph (1) for any taxable year shall be made on a timely 
        filed return for such year. Such election, once made, shall be 
        irrevocable for such taxable year.
            ``(3) Written notice to owners.--If any portion of the 
        deduction available under subsection (a) is allocated to owners 
        under paragraph (1), the cooperative shall provide any owner 
        receiving an allocation written notice of the amount of the 
        allocation. <<NOTE: Deadline.>> Such notice shall be provided 
        before the date on which the return described in paragraph (2) 
        is due.

    ``(h) Reporting.--No deduction shall be allowed under subsection (a) 
to any taxpayer for any taxable year unless such taxpayer files with the 
Secretary a report containing such information with respect to the 
operation of the refineries of the taxpayer as the Secretary shall 
require.''.
    (b) Conforming Amendments.--
            (1) Section 1245(a) is amended by inserting ``179C,'' after 
        ``179B,'' both places it appears in paragraphs (2)(C) and 
        (3)(C).

[[Page 119 STAT. 1015]]

            (2) Section 263(a)(1) is amended by striking ``or'' at the 
        end of subparagraph (H), by striking the period at the end of 
        subparagraph (I) and inserting ``, or'', and by inserting after 
        subparagraph (I) the following new subparagraph:
                    ``(J) expenditures for which a deduction is allowed 
                under section 179C.''.
            (3) Section 312(k)(3)(B) is amended by striking ``179 179A, 
        or 179B'' each place it appears in the heading and text and 
        inserting ``179, 179A, 179B, or 179C''.
            (4) The table of sections for part VI of subchapter B of 
        chapter 1 is amended by inserting after the item relating to 
        section 179B the following new item:

``Sec. 179C. Election to expense certain refineries.''.

    (c) Effective Date.--The <<NOTE: 26 USC 179C note.>> amendments made 
by this section shall apply to properties placed in service after the 
date of the enactment of this Act.

SEC. 1324. PASS THROUGH TO OWNERS OF DEDUCTION FOR CAPITAL COSTS 
            INCURRED BY SMALL REFINER COOPERATIVES IN COMPLYING WITH 
            ENVIRONMENTAL PROTECTION AGENCY SULFUR REGULATIONS.

    (a) In General.--Section 179B (relating to deduction for capital 
costs incurred in complying with Environmental Protection Agency sulfur 
regulations) is amended by adding at the end the following new 
subsection:
    ``(e) Election to Allocate Deduction to Cooperative Owner.--
            ``(1) In general.--If--
                    ``(A) a small business refiner to which subsection 
                (a) applies is an organization to which part I of 
                subchapter T applies, and
                    ``(B) one or more persons directly holding an 
                ownership interest in the refiner are organizations to 
                which part I of subchapter T apply,
        the refiner may elect to allocate all or a portion of the 
        deduction allowable under subsection (a) to such persons. Such 
        allocation shall be equal to the person's ratable share of the 
        total amount allocated, determined on the basis of the person's 
        ownership interest in the taxpayer. The taxable income of the 
        refiner shall not be reduced under section 1382 by reason of any 
        amount to which the preceding sentence applies.
            ``(2) Form and effect of election.--An election under 
        paragraph (1) for any taxable year shall be made on a timely 
        filed return for such year. Such election, once made, shall be 
        irrevocable for such taxable year.
            ``(3) Written notice to owners.--If any portion of the 
        deduction available under subsection (a) is allocated to owners 
        under paragraph (1), the cooperative shall provide any owner 
        receiving an allocation written notice of the amount of the 
        allocation. <<NOTE: Deadline.>> Such notice shall be provided 
        before the date on which the return described in paragraph (2) 
        is due.''.

    (b) Effective Date.--The <<NOTE: 26 USC 179B note.>> amendment made 
by this section shall take effect as if included in the amendment made 
by section 338(a) of the American Jobs Creation Act of 2004.

[[Page 119 STAT. 1016]]

SEC. 1325. NATURAL GAS DISTRIBUTION LINES TREATED AS 15-YEAR PROPERTY.

    (a) In General.--Section 168(e)(3)(E) (defining 15-year property), 
as amended by this Act, is amended by striking ``and'' at the end of 
clause (vi), by striking the period at the end of clause (vii) and by 
inserting ``, and'', and by adding at the end the following new clause:
                          ``(viii) any natural gas distribution line the 
                      original use of which commences with the taxpayer 
                      after April 11, 2005, and which is placed in 
                      service before January 1, 2011.''.

    (b) Alternative System.--The table contained in section 168(g)(3)(B) 
(relating to special rule for certain property assigned to classes), as 
amended by this Act, is amended by inserting after the item relating to 
subparagraph (E)(vii) the following new item:

 
 
 
``(E)(viii)................................................        35''.
 


    (c) Effective <<NOTE: 26 USC 168 note.>> Date.--
            (1) In general.--The amendments made by this section shall 
        apply to property placed in service after April 11, 2005.
            (2) Exception.--The amendments made by this section shall 
        not apply to any property with respect to which the taxpayer or 
        a related party has entered into a binding contract for the 
        construction thereof on or before April 11, 2005, or, in the 
        case of self-constructed property, has started construction on 
        or before such date.

SEC. 1326. NATURAL GAS GATHERING LINES TREATED AS 7-YEAR PROPERTY.

    (a) In General.--Subparagraph (C) of section 168(e)(3) (relating to 
classification of certain property) is amended by striking ``and'' at 
the end of clause (iii), by redesignating clause (iv) as clause (v), and 
by inserting after clause (iii) the following new clause:
                          ``(iv) any natural gas gathering line the 
                      original use of which commences with the taxpayer 
                      after April 11, 2005, and''.

    (b) Natural Gas Gathering Line.--Subsection (i) of section 168 is 
amended by inserting after paragraph (16) the following new paragraph:
            ``(17) Natural gas gathering line.--The term `natural gas 
        gathering line' means--
                    ``(A) the pipe, equipment, and appurtenances 
                determined to be a gathering line by the Federal Energy 
                Regulatory Commission, and
                    ``(B) the pipe, equipment, and appurtenances used to 
                deliver natural gas from the wellhead or a commonpoint 
                to the point at which such gas first reaches--
                          ``(i) a gas processing plant,
                          ``(ii) an interconnection with a transmission 
                      pipeline for which a certificate as an interstate 
                      transmission pipeline has been issued by the 
                      Federal Energy Regulatory Commission,

[[Page 119 STAT. 1017]]

                          ``(iii) an interconnection with an intrastate 
                      transmission pipeline, or
                          ``(iv) a direct interconnection with a local 
                      distribution company, a gas storage facility, or 
                      an industrial consumer.''.

    (c) Alternative System.--The table contained in section 168(g)(3)(B) 
(relating to special rule for certain property assigned to classes), as 
amended by this Act, is amended by inserting after the item relating to 
subparagraph (C)(iii) the following new item:

 
 
 
``(C)(iv)..................................................        14''.
 


    (d) Alternative Minimum Tax Exception.--Subparagraph (B) of section 
56(a)(1) is amended by inserting before the period the following: ``, or 
in section 168(e)(3)(C)(iv)''.
    (e) Effective <<NOTE: 26 USC 56 note.>> Date.--
            (1) In general.--The amendments made by this section shall 
        apply to property placed in service after April 11, 2005.
            (2) Exception.--The amendments made by this section shall 
        not apply to any property with respect to which the taxpayer or 
        a related party has entered into a binding contract for the 
        construction thereof on or before April 11, 2005, or, in the 
        case of self-constructed property, has started construction on 
        or before such date.

SEC. 1327. ARBITRAGE RULES NOT TO APPLY TO PREPAYMENTS FOR NATURAL GAS.

    (a) In General.--Subsection (b) of section 148 (relating to higher 
yielding investments) is amended by adding at the end the following new 
paragraph:
            ``(4) Safe harbor for prepaid natural gas.--
                    ``(A) In general.--The term `investment-type 
                property' does not include a prepayment under a 
                qualified natural gas supply contract.
                    ``(B) Qualified natural gas supply contract.--For 
                purposes of this paragraph, the term `qualified natural 
                gas supply contract' means any contract to acquire 
                natural gas for resale by a utility owned by a 
                governmental unit if the amount of gas permitted to be 
                acquired under the contract by the utility during any 
                year does not exceed the sum of--
                          ``(i) the annual average amount during the 
                      testing period of natural gas purchased (other 
                      than for resale) by customers of such utility who 
                      are located within the service area of such 
                      utility, and
                          ``(ii) the amount of natural gas to be used to 
                      transport the prepaid natural gas to the utility 
                      during such year.
                    ``(C) Natural gas used to generate electricity.--
                Natural gas used to generate electricity shall be taken 
                into account in determining the average under 
                subparagraph (B)(i)--
                          ``(i) only if the electricity is generated by 
                      a utility owned by a governmental unit, and

[[Page 119 STAT. 1018]]

                          ``(ii) only to the extent that the electricity 
                      is sold (other than for resale) to customers of 
                      such utility who are located within the service 
                      area of such utility.
                    ``(D) Adjustments <<NOTE: Contracts.>> for changes 
                in customer base.--
                          ``(i) New business customers.--If--
                                    ``(I) after the close of the testing 
                                period and before the date of issuance 
                                of the issue, the utility owned by a 
                                governmental unit enters into a contract 
                                to supply natural gas (other than for 
                                resale) for a business use at a property 
                                within the service area of such utility, 
                                and
                                    ``(II) the utility did not supply 
                                natural gas to such property during the 
                                testing period or the ratable amount of 
                                natural gas to be supplied under the 
                                contract is significantly greater than 
                                the ratable amount of gas supplied to 
                                such property during the testing period,
                      then a contract shall not fail to be treated as a 
                      qualified natural gas supply contract by reason of 
                      supplying the additional natural gas under the 
                      contract referred to in subclause (I).
                          ``(ii) Lost customers.--The average under 
                      subparagraph (B)(i) shall not exceed the annual 
                      amount of natural gas reasonably expected to be 
                      purchased (other than for resale) by persons who 
                      are located within the service area of such 
                      utility and who, as of the date of issuance of the 
                      issue, are customers of such utility.
                    ``(E) Ruling requests.--The Secretary may increase 
                the average under subparagraph (B)(i) for any period if 
                the utility owned by the governmental unit establishes 
                to the satisfaction of the Secretary that, based on 
                objective evidence of growth in natural gas consumption 
                or population, such average would otherwise be 
                insufficient for such period.
                    ``(F) Adjustment for natural gas otherwise on 
                hand.--
                          ``(i) In general.--The amount otherwise 
                      permitted to be acquired under the contract for 
                      any period shall be reduced by--
                                    ``(I) the applicable share of 
                                natural gas held by the utility on the 
                                date of issuance of the issue, and
                                    ``(II) the natural gas (not taken 
                                into account under subclause (I)) which 
                                the utility has a right to acquire 
                                during such period (determined as of the 
                                date of issuance of the issue).
                          ``(ii) Applicable share.--For purposes of the 
                      clause (i), the term `applicable share' means, 
                      with respect to any period, the natural gas 
                      allocable to such period if the gas were allocated 
                      ratably over the period to which the prepayment 
                      relates.
                    ``(G) Intentional acts.--Subparagraph (A) shall 
                cease to apply to any issue if the utility owned by the 
                governmental unit engages in any intentional act to 
                render the volume of natural gas acquired by such 
                prepayment to be in excess of the sum of--

[[Page 119 STAT. 1019]]

                          ``(i) the amount of natural gas needed (other 
                      than for resale) by customers of such utility who 
                      are located within the service area of such 
                      utility, and
                          ``(ii) the amount of natural gas used to 
                      transport such natural gas to the utility.
                    ``(H) Testing period.--For purposes of this 
                paragraph, the term `testing period' means, with respect 
                to an issue, the most recent 5 calendar years ending 
                before the date of issuance of the issue.
                    ``(I) Service area.--For purposes of this paragraph, 
                the service area of a utility owned by a governmental 
                unit shall be comprised of--
                          ``(i) any area throughout which such utility 
                      provided at all times during the testing period--
                                    ``(I) in the case of a natural gas 
                                utility, natural gas transmission or 
                                distribution services, and
                                    ``(II) in the case of an electric 
                                utility, electricity distribution 
                                services,
                          ``(ii) any area within a county contiguous to 
                      the area described in clause (i) in which retail 
                      customers of such utility are located if such area 
                      is not also served by another utility providing 
                      natural gas or electricity services, as the case 
                      may be, and
                          ``(iii) any area recognized as the service 
                      area of such utility under State or Federal 
                      law.''.

    (b) Private Loan Financing Test Not to Apply to Prepayments for 
Natural Gas.--Paragraph (2) of section 141(c) (providing exceptions to 
the private loan financing test) is amended by striking ``or'' at the 
end of subparagraph (A), by striking the period at the end of 
subparagraph (B) and inserting ``, or'', and by adding at the end the 
following new subparagraph:
                    ``(C) is a qualified natural gas supply contract (as 
                defined in section 148(b)(4)).''.

    (c) Exception for Qualified Electric and Natural Gas Supply 
Contracts.--Section 141(d) is amended by adding at the end the following 
new paragraph:
            ``(7) Exception for qualified electric and natural gas 
        supply contracts.--The term `nongovernmental output property' 
        shall not include any contract for the prepayment of electricity 
        or natural gas which is not investment property under section 
        148(b)(2).''.

    (d) Effective Date.--The <<NOTE: 26 USC 141 note.>> amendments made 
by this section shall apply to obligations issued after the date of the 
enactment of this Act.

SEC. 1328. DETERMINATION OF SMALL REFINER EXCEPTION TO OIL DEPLETION 
            DEDUCTION.

    (a) In General.--Paragraph (4) of section 613A(d) (relating to 
limitations on application of subsection (c)) is amended to read as 
follows:
            ``(4) Certain refiners excluded.--If the taxpayer or one or 
        more related persons engages in the refining of crude oil, 
        subsection (c) shall not apply to the taxpayer for a taxable 
        year if the average daily refinery runs of the taxpayer and such 
        persons for the taxable year exceed 75,000 barrels. For purposes 
        of this paragraph, the average daily refinery runs

[[Page 119 STAT. 1020]]

        for any taxable year shall be determined by dividing the 
        aggregate refinery runs for the taxable year by the number of 
        days in the taxable year.''.

    (b) Effective Date.--The <<NOTE: 26 USC 613A note.>> amendment made 
by this section shall apply to taxable years ending after the date of 
the enactment of this Act.

SEC. 1329. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES.

    (a) In General.--Section 167 (relating to depreciation) is amended 
by redesignating subsection (h) as subsection (i) and by inserting after 
subsection (g) the following new subsection:
    ``(h) Amortization of Geological and Geophysical Expenditures.--
            ``(1) In general.--Any geological and geophysical expenses 
        paid or incurred in connection with the exploration for, or 
        development of, oil or gas within the United States (as defined 
        in section 638) shall be allowed as a deduction ratably over the 
        24-month period beginning on the date that such expense was paid 
        or incurred.
            ``(2) Half-year convention.--For purposes of paragraph (1), 
        any payment paid or incurred during the taxable year shall be 
        treated as paid or incurred on the mid-point of such taxable 
        year.
            ``(3) Exclusive method.--Except as provided in this 
        subsection, no depreciation or amortization deduction shall be 
        allowed with respect to such payments.
            ``(4) Treatment upon abandonment.--If any property with 
        respect to which geological and geophysical expenses are paid or 
        incurred is retired or abandoned during the 24-month period 
        described in paragraph (1), no deduction shall be allowed on 
        account of such retirement or abandonment and the amortization 
        deduction under this subsection shall continue with respect to 
        such payment.''.

    (b) Conforming Amendment.--Section 263A(c)(3) is amended by 
inserting ``167(h),'' after ``under section''.
    (c) Effective Date.--The <<NOTE: 26 USC 167 note.>> amendments made 
by this section shall apply to amounts paid or incurred in taxable years 
beginning after the date of the enactment of this Act.

        Subtitle C--Conservation and Energy Efficiency Provisions

SEC. 1331. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

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

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

    ``(a) In General.--There shall be allowed as a deduction an amount 
equal to the cost of energy efficient commercial building property 
placed in service during the taxable year.
    ``(b) Maximum Amount of Deduction.--The deduction under subsection 
(a) with respect to any building for any taxable year shall not exceed 
the excess (if any) of--

[[Page 119 STAT. 1021]]

            ``(1) the product of--
                    ``(A) $1.80, and
                    ``(B) the square footage of the building, over
            ``(2) the aggregate amount of the deductions under 
        subsection (a) with respect to the building for all prior 
        taxable years.

    ``(c) Definitions.--For purposes of this section--
            ``(1) Energy efficient commercial building property.--The 
        term `energy efficient commercial building property' means 
        property--
                    ``(A) with respect to which depreciation (or 
                amortization in lieu of depreciation) is allowable,
                    ``(B) which is installed on or in any building which 
                is--
                          ``(i) located in the United States, and
                          ``(ii) within the scope of Standard 90.1-2001,
                    ``(C) which is installed as part of--
                          ``(i) the interior lighting systems,
                          ``(ii) the heating, cooling, ventilation, and 
                      hot water systems, or
                          ``(iii) the building envelope, and
                    ``(D) which is certified in accordance with 
                subsection (d)(6) as being installed as part of a plan 
                designed to reduce the total annual energy and power 
                costs with respect to the interior lighting systems, 
                heating, cooling, ventilation, and hot water systems of 
                the building by 50 percent or more in comparison to a 
                reference building which meets the minimum requirements 
                of Standard 90.1-2001 using methods of calculation under 
                subsection (d)(2).
            ``(2) Standard 90.1-2001.--The term `Standard 90.1-2001' 
        means Standard 90.1-2001 of the American Society of Heating, 
        Refrigerating, and Air Conditioning Engineers and the 
        Illuminating Engineering Society of North America (as in effect 
        on April 2, 2003).

    ``(d) Special Rules.--
            ``(1) Partial allowance.--
                    ``(A) In general.--Except as provided in subsection 
                (f), if--
                          ``(i) the requirement of subsection (c)(1)(D) 
                      is not met, but
                          ``(ii) there is a certification in accordance 
                      with paragraph (6) that any system referred to in 
                      subsection (c)(1)(C) satisfies the energy-savings 
                      targets established by the Secretary under 
                      subparagraph (B) with respect to such system,
                then the requirement of subsection (c)(1)(D) shall be 
                treated as met with respect to such system, and the 
                deduction under subsection (a) shall be allowed with 
                respect to energy efficient commercial building property 
                installed as part of such system and as part of a plan 
                to meet such targets, except that subsection (b) shall 
                be applied to such property by substituting `$.60' for 
                `$1.80'.
                    ``(B) Regulations.--The Secretary, after 
                consultation with the Secretary of Energy, shall 
                establish a target for each system described in 
                subsection (c)(1)(C) which, if such targets were met for 
                all such systems, the building would meet the 
                requirements of subsection (c)(1)(D).

[[Page 119 STAT. 1022]]

            ``(2) Methods of calculation.--
        The <<NOTE: Regulations.>> Secretary, after consultation with 
        the Secretary of Energy, shall promulgate regulations which 
        describe in detail methods for calculating and verifying energy 
        and power consumption and cost, based on the provisions of the 
        2005 California Nonresidential Alternative Calculation Method 
        Approval Manual.
            ``(3) Computer software.--
                    ``(A) In general.--Any calculation under paragraph 
                (2) shall be prepared by qualified computer software.
                    ``(B) Qualified computer software.--For purposes of 
                this paragraph, the term `qualified computer software' 
                means software--
                          ``(i) for which the software designer has 
                      certified that the software meets all procedures 
                      and detailed methods for calculating energy and 
                      power consumption and costs as required by the 
                      Secretary,
                          ``(ii) which provides such forms as required 
                      to be filed by the Secretary in connection with 
                      energy efficiency of property and the deduction 
                      allowed under this section, and
                          ``(iii) which provides a notice form which 
                      documents the energy efficiency features of the 
                      building and its projected annual energy costs.
            ``(4) Allocation of deduction for public property.--In the 
        case of energy efficient commercial building property installed 
        on or in property owned by a Federal, State, or local government 
        or a political subdivision thereof, the Secretary shall 
        promulgate a regulation to allow the allocation of the deduction 
        to the person primarily responsible for designing the property 
        in lieu of the owner of such property. Such person shall be 
        treated as the taxpayer for purposes of this section.
            ``(5) Notice to owner.--Each certification required under 
        this section shall include an explanation to the building owner 
        regarding the energy efficiency features of the building and its 
        projected annual energy costs as provided in the notice under 
        paragraph (3)(B)(iii).
            ``(6) Certification.--
                    ``(A) In general.--The Secretary shall prescribe the 
                manner and method for the making of certifications under 
                this section.
                    ``(B) Procedures.--The Secretary shall include as 
                part of the certification process procedures for 
                inspection and testing by qualified individuals 
                described in subparagraph (C) to ensure compliance of 
                buildings with energy-savings plans and targets. Such 
                procedures shall be comparable, given the difference 
                between commercial and residential buildings, to the 
                requirements in the Mortgage Industry National 
                Accreditation Procedures for Home Energy Rating Systems.
                    ``(C) Qualified individuals.--Individuals qualified 
                to determine compliance shall be only those individuals 
                who are recognized by an organization certified by the 
                Secretary for such purposes.

    ``(e) Basis Reduction.--For purposes of this subtitle, if a 
deduction is allowed under this section with respect to any energy 
efficient commercial building property, the basis of such property shall 
be reduced by the amount of the deduction so allowed.

[[Page 119 STAT. 1023]]

    ``(f) Interim Rules for Lighting Systems.--Until such time as the 
Secretary issues final regulations under subsection (d)(1)(B) with 
respect to property which is part of a lighting system--
            ``(1) In general.--The lighting system target under 
        subsection (d)(1)(A)(ii) shall be a reduction in lighting power 
        density of 25 percent (50 percent in the case of a warehouse) of 
        the minimum requirements in Table 9.3.1.1 or Table 9.3.1.2 (not 
        including additional interior lighting power allowances) of 
        Standard 90.1-2001.
            ``(2) Reduction in deduction if reduction less than 40 
        percent.--
                    ``(A) In general.--If, with respect to the lighting 
                system of any building other than a warehouse, the 
                reduction in lighting power density of the lighting 
                system is not at least 40 percent, only the applicable 
                percentage of the amount of deduction otherwise 
                allowable under this section with respect to such 
                property shall be allowed.
                    ``(B) Applicable percentage.--For purposes of 
                subparagraph (A), the applicable percentage is the 
                number of percentage points (not greater than 100) equal 
                to the sum of--
                          ``(i) 50, and
                          ``(ii) the amount which bears the same ratio 
                      to 50 as the excess of the reduction of lighting 
                      power density of the lighting system over 25 
                      percentage points bears to 15.
                    ``(C) Exceptions.--This subsection shall not apply 
                to any system--
                          ``(i) the controls and circuiting of which do 
                      not comply fully with the mandatory and 
                      prescriptive requirements of Standard 90.1-2001 
                      and which do not include provision for bilevel 
                      switching in all occupancies except hotel and 
                      motel guest rooms, store rooms, restrooms, and 
                      public lobbies, or
                          ``(ii) which does not meet the minimum 
                      requirements for calculated lighting levels as set 
                      forth in the Illuminating Engineering Society of 
                      North America Lighting Handbook, Performance and 
                      Application, Ninth Edition, 2000.

    ``(g) Regulations.--The Secretary shall promulgate such regulations 
as necessary--
            ``(1) to take into account new technologies regarding energy 
        efficiency and renewable energy for purposes of determining 
        energy efficiency and savings under this section, and
            ``(2) to provide for a recapture of the deduction allowed 
        under this section if the plan described in subsection (c)(1)(D) 
        or (d)(1)(A) is not fully implemented.

    ``(h) Termination.--This section shall not apply with respect to 
property placed in service after December 31, 2007.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) is amended by striking ``and'' at the 
        end of paragraph (30), by striking the period at the end of 
        paragraph (31) and inserting ``, and'', and by adding at the end 
        the following new paragraph:
            ``(32) to the extent provided in section 179D(e).''.

[[Page 119 STAT. 1024]]

            (2) Section 1245(a), as amended by this Act, is amended by 
        inserting ``179D,'' after ``179C,'' both places it appears in 
        paragraphs (2)(C) and (3)(C).
            (3) Section 1250(b)(3) is amended by inserting before the 
        period at the end of the first sentence ``or by section 179D''.
            (4) Section 263(a)(1), as amended by this Act, is amended by 
        striking ``or'' at the end of subparagraph (I), by striking the 
        period at the end of subparagraph (J) and inserting ``, or'', 
        and by inserting after subparagraph (J) the following new 
        subparagraph:
                    ``(K) expenditures for which a deduction is allowed 
                under section 179D.''.
            (5) Section 312(k)(3)(B), as amended by this Act, is amended 
        by striking ``179, 179A, 179B, or 179C'' each place it appears 
        in the heading and text and inserting ``179, 179A, 179B, 179C, 
        or 179D''.

    (c) Clerical Amendment.--The table of sections for part VI of 
subchapter B of chapter 1, as amended by this Act, is amended by 
inserting after section 179C the following new item:

        ``Sec. 179D. Energy efficient commercial buildings deduction.''.

    (d) Effective Date.--The <<NOTE: 26 USC 179D note.>> amendments made 
by this section shall apply to property placed in service after December 
31, 2005.

SEC. 1332. CREDIT FOR CONSTRUCTION OF NEW ENERGY EFFICIENT HOMES.

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

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

    ``(a) Allowance of Credit.--
            ``(1) In general.--For purposes of section 38, in the case 
        of an eligible contractor, the new energy efficient home credit 
        for the taxable year is the applicable amount for each qualified 
        new energy efficient home which is--
                    ``(A) constructed by the eligible contractor, and
                    ``(B) acquired by a person from such eligible 
                contractor for use as a residence during the taxable 
                year.
            ``(2) Applicable amount.--For purposes of paragraph (1), the 
        applicable amount is an amount equal to--
                    ``(A) in the case of a dwelling unit described in 
                paragraph (1) or (2) of subsection (c), $2,000, and
                    ``(B) in the case of a dwelling unit described in 
                paragraph (3) of subsection (c), $1,000.

    ``(b) Definitions.--For purposes of this section--
            ``(1) Eligible contractor.--The term `eligible contractor' 
        means--
                    ``(A) the person who constructed the qualified new 
                energy efficient home, or
                    ``(B) in the case of a qualified new energy 
                efficient home which is a manufactured home, the 
                manufactured home producer of such home.
            ``(2) Qualified new energy efficient home.--The term 
        `qualified new energy efficient home' means a dwelling unit--
                    ``(A) located in the United States,

[[Page 119 STAT. 1025]]

                    ``(B) the construction of which is substantially 
                completed after the date of the enactment of this 
                section, and
                    ``(C) which meets the energy saving requirements of 
                subsection (c).
            ``(3) Construction.--The term `construction' includes 
        substantial reconstruction and rehabilitation.
            ``(4) Acquire.--The term `acquire' includes purchase.

    ``(c) Energy Saving Requirements.--A dwelling unit meets the energy 
saving requirements of this subsection if such unit is--
            ``(1) certified--
                    ``(A) to have a level of annual heating and cooling 
                energy consumption which is at least 50 percent below 
                the annual level of heating and cooling energy 
                consumption of a comparable dwelling unit--
                          ``(i) which is constructed in accordance with 
                      the standards of chapter 4 of the 2003 
                      International Energy Conservation Code, as such 
                      Code (including supplements) is in effect on the 
                      date of the enactment of this section, and
                          ``(ii) for which the heating and cooling 
                      equipment efficiencies correspond to the minimum 
                      allowed under the regulations established by the 
                      Department of Energy pursuant to the National 
                      Appliance Energy Conservation Act of 1987 and in 
                      effect at the time of completion of construction, 
                      and
                    ``(B) to have building envelope component 
                improvements account for at least \1/5\ of such 50 
                percent,
            ``(2) a manufactured home which conforms to Federal 
        Manufactured Home Construction and Safety Standards (section 
        3280 of title 24, Code of Federal Regulations) and which meets 
        the requirements of paragraph (1), or
            ``(3) a manufactured home which conforms to Federal 
        Manufactured Home Construction and Safety Standards (section 
        3280 of title 24, Code of Federal Regulations) and which--
                    ``(A) meets the requirements of paragraph (1) 
                applied by substituting `30 percent' for `50 percent' 
                both places it appears therein and by substituting `\1/
                3\' for `\1/5\' in subparagraph (B) thereof, or
                    ``(B) meets the requirements established by the 
                Administrator of the Environmental Protection Agency 
                under the Energy Star Labeled Homes program.

    ``(d) Certification.--
            ``(1) Method of certification.--A certification described in 
        subsection (c) shall be made in accordance with guidance 
        prescribed by the Secretary, after consultation with the 
        Secretary of Energy. Such guidance shall specify procedures and 
        methods for calculating energy and cost savings.
            ``(2) Form.--Any certification described in subsection (c) 
        shall be made in writing in a manner which specifies in readily 
        verifiable fashion the energy efficient building envelope 
        components and energy efficient heating or cooling equipment 
        installed and their respective rated energy efficiency 
        performance.

[[Page 119 STAT. 1026]]

    ``(e) Basis Adjustment.--For purposes of this subtitle, if a credit 
is allowed under this section in connection with any expenditure for any 
property, the increase in the basis of such property which would (but 
for this subsection) result from such expenditure shall be reduced by 
the amount of the credit so determined.
    ``(f) Coordination With Investment Credit.--For purposes of this 
section, expenditures taken into account under section 47 or 48(a) shall 
not be taken into account under this section.
    ``(g) Termination.--This section shall not apply to any qualified 
new energy efficient home acquired after December 31, 2007.''.
    (b) Credit Made Part of General Business Credit.--Section 38(b) 
(relating to current year business credit), as amended by this Act, is 
amended by striking ``plus'' at the end of paragraph (21), by striking 
the period at the end of paragraph (22) and inserting ``, plus'', and by 
adding at the end the following new paragraph:
            ``(23) the new energy efficient home credit determined under 
        section 45L(a).''.

    (c) Basis Adjustment.--Subsection (a) of section 1016, as amended by 
this Act, is amended by striking ``and'' at the end of paragraph (31), 
by striking the period at the end of paragraph (32) and inserting ``, 
and'', and by adding at the end the following new paragraph:
            ``(33) to the extent provided in section 45L(e), in the case 
        of amounts with respect to which a credit has been allowed under 
        section 45L.''.

    (d) Deduction for Certain Unused Business Credits.--Section 196(c) 
(defining qualified business credits) is amended by striking ``and'' at 
the end of paragraph (11), by striking the period at the end of 
paragraph (12) and inserting ``, and'', and by adding after paragraph 
(12) the following new paragraph:
            ``(13) the new energy efficient home credit determined under 
        section 45L(a).''.

    (e) Clerical Amendment.--The table of sections for subpart D of part 
IV of subchapter A of chapter 1, as amended by this Act, is amended by 
adding at the end the following new item:

        ``Sec. 45L. New energy efficient home credit.''.

    (f) Effective Date.--The <<NOTE: 26 USC 38 note.>> amendments made 
by this section shall apply to qualified new energy efficient homes 
acquired after December 31, 2005, in taxable years ending after such 
date.

SEC. 1333. CREDIT FOR CERTAIN NONBUSINESS ENERGY PROPERTY.

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

``SEC. 25C. NONBUSINESS ENERGY PROPERTY.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter for 
the taxable year an amount equal to the sum of--
            ``(1) 10 percent of the amount paid or incurred by the 
        taxpayer for qualified energy efficiency improvements installed 
        during such taxable year, and
            ``(2) the amount of the residential energy property 
        expenditures paid or incurred by the taxpayer during such 
        taxable year.

    ``(b) Limitations.--

[[Page 119 STAT. 1027]]

            ``(1) Lifetime limitation.--The credit allowed under this 
        section with respect to any taxpayer for any taxable year shall 
        not exceed the excess (if any) of $500 over the aggregate 
        credits allowed under this section with respect to such taxpayer 
        for all prior taxable years.
            ``(2) Windows.--In the case of amounts paid or incurred for 
        components described in subsection (c)(3)(B) by any taxpayer for 
        any taxable year, the credit allowed under this section with 
        respect to such amounts for such year shall not exceed the 
        excess (if any) of $200 over the aggregate credits allowed under 
        this section with respect to such amounts for all prior taxable 
        years.
            ``(3) Limitation on residential energy property 
        expenditures.--The amount of the credit allowed under this 
        section by reason of subsection (a)(2) shall not exceed--
                    ``(A) $50 for any advanced main air circulating fan,
                    ``(B) $150 for any qualified natural gas, propane, 
                or oil furnace or hot water boiler, and
                    ``(C) $300 for any item of energy-efficient building 
                property.

    ``(c) Qualified Energy Efficiency Improvements.--For purposes of 
this section--
            ``(1) In general.--The term `qualified energy efficiency 
        improvements' means any energy efficient building envelope 
        component which meets the prescriptive criteria for such 
        component established by the 2000 International Energy 
        Conservation Code, as such Code (including supplements) is in 
        effect on the date of the enactment of this section (or, in the 
        case of a metal roof with appropriate pigmented coatings which 
        meet the Energy Star program requirements), if--
                    ``(A) such component is installed in or on a 
                dwelling unit located in the United States and owned and 
                used by the taxpayer as the taxpayer's principal 
                residence (within the meaning of section 121),
                    ``(B) the original use of such component commences 
                with the taxpayer, and
                    ``(C) such component reasonably can be expected to 
                remain in use for at least 5 years.
            ``(2) Building envelope component.--The term `building 
        envelope component' means--
                    ``(A) any insulation material or system which is 
                specifically and primarily designed to reduce the heat 
                loss or gain of a dwelling unit when installed in or on 
                such dwelling unit,
                    ``(B) exterior windows (including skylights),
                    ``(C) exterior doors, and
                    ``(D) any metal roof installed on a dwelling unit, 
                but only if such roof has appropriate pigmented coatings 
                which are specifically and primarily designed to reduce 
                the heat gain of such dwelling unit.
            ``(3) Manufactured homes included.--The term `dwelling unit' 
        includes a manufactured home which conforms to Federal 
        Manufactured Home Construction and Safety Standards (section 
        3280 of title 24, Code of Federal Regulations).

    ``(d) Residential Energy Property Expenditures.--For purposes of 
this section--

[[Page 119 STAT. 1028]]

            ``(1) In general.--The term `residential energy property 
        expenditures' means expenditures made by the taxpayer for 
        qualified energy property which is--
                    ``(A) installed on or in connection with a dwelling 
                unit located in the United States and owned and used by 
                the taxpayer as the taxpayer's principal residence 
                (within the meaning of section 121), and
                    ``(B) originally placed in service by the taxpayer.
        Such term includes expenditures for labor costs properly 
        allocable to the onsite preparation, assembly, or original 
        installation of the property.
            ``(2) Qualified energy property.--
                    ``(A) In general.--The term `qualified energy 
                property' means--
                          ``(i) energy-efficient building property,
                          ``(ii) a qualified natural gas, propane, or 
                      oil furnace or hot water boiler, or
                          ``(iii) an advanced main air circulating fan.
                    ``(B) Performance and quality standards.--Property 
                described under subparagraph (A) shall meet the 
                performance and quality standards, and the certification 
                requirements (if any), which--
                          ``(i) have been prescribed by the Secretary by 
                      regulations (after consultation with the Secretary 
                      of Energy or the Administrator of the 
                      Environmental Protection Agency, as appropriate), 
                      and
                          ``(ii) are in effect at the time of the 
                      acquisition of the property, or at the time of the 
                      completion of the construction, reconstruction, or 
                      erection of the property, as the case may be.
                    ``(C) Requirements for standards.--The standards and 
                requirements prescribed by the Secretary under 
                subparagraph (B)--
                          ``(i) in the case of the energy efficiency 
                      ratio (EER) for central air conditioners and 
                      electric heat pumps--
                                    ``(I) shall require measurements to 
                                be based on published data which is 
                                tested by manufacturers at 95 degrees 
                                Fahrenheit, and
                                    ``(II) may be based on the certified 
                                data of the Air Conditioning and 
                                Refrigeration Institute that are 
                                prepared in partnership with the 
                                Consortium for Energy Efficiency, and
                          ``(ii) in the case of geothermal heat pumps--
                                    ``(I) shall be based on testing 
                                under the conditions of ARI/ISO Standard 
                                13256-1 for Water Source Heat Pumps or 
                                ARI 870 for Direct Expansion GeoExchange 
                                Heat Pumps (DX), as appropriate, and
                                    ``(II) shall include evidence that 
                                water heating services have been 
                                provided through a desuperheater or 
                                integrated water heating system 
                                connected to the storage water heater 
                                tank.
            ``(3) Energy-efficient building property.--The term `energy-
        efficient building property' means--
                    ``(A) an electric heat pump water heater which 
                yields an energy factor of at least 2.0 in the standard 
                Department of Energy test procedure,

[[Page 119 STAT. 1029]]

                    ``(B) an electric heat pump which has a heating 
                seasonal performance factor (HSPF) of at least 9, a 
                seasonal energy efficiency ratio (SEER) of at least 15, 
                and an energy efficiency ratio (EER) of at least 13,
                    ``(C) a geothermal heat pump which--
                          ``(i) in the case of a closed loop product, 
                      has an energy efficiency ratio (EER) of at least 
                      14.1 and a heating coefficient of performance 
                      (COP) of at least 3.3,
                          ``(ii) in the case of an open loop product, 
                      has an energy efficiency ratio (EER) of at least 
                      16.2 and a heating coefficient of performance 
                      (COP) of at least 3.6, and
                          ``(iii) in the case of a direct expansion (DX) 
                      product, has an energy efficiency ratio (EER) of 
                      at least 15 and a heating coefficient of 
                      performance (COP) of at least 3.5,
                    ``(D) a central air conditioner which achieves the 
                highest efficiency tier established by the Consortium 
                for Energy Efficiency, as in effect on January 1, 2006, 
                and
                    ``(E) a natural gas, propane, or oil water heater 
                which has an energy factor of at least 0.80.
            ``(4) Qualified natural gas, propane, or oil furnace or hot 
        water boiler.--The term `qualified natural gas, propane, or oil 
        furnace or hot water boiler' means a natural gas, propane, or 
        oil furnace or hot water boiler which achieves an annual fuel 
        utilization efficiency rate of not less than 95.
            ``(5) Advanced main air circulating fan.--The term `advanced 
        main air circulating fan' means a fan used in a natural gas, 
        propane, or oil furnace and which has an annual electricity use 
        of no more than 2 percent of the total annual energy use of the 
        furnace (as determined in the standard Department of Energy test 
        procedures).

    ``(e) Special Rules.--For purposes of this section--
            ``(1) Application of rules.--Rules similar to the rules 
        under paragraphs (4), (5), (6), (7), (8), and (9) of section 
        25D(e) shall apply.
            ``(2) Joint ownership of energy items.--
                    ``(A) In general.--Any expenditure otherwise 
                qualifying as an expenditure under this section shall 
                not be treated as failing to so qualify merely because 
                such expenditure was made with respect to two or more 
                dwelling units.
                    ``(B) Limits applied separately.--In the case of any 
                expenditure described in subparagraph (A), the amount of 
                the credit allowable under subsection (a) shall (subject 
                to paragraph (1)) be computed separately with respect to 
                the amount of the expenditure made for each dwelling 
                unit.

    ``(f) Basis Adjustments.--For purposes of this subtitle, if a credit 
is allowed under this section for any expenditure with respect to any 
property, the increase in the basis of such property which would (but 
for this subsection) result from such expenditure shall be reduced by 
the amount of the credit so allowed.
    ``(g) Termination.--This section shall not apply with respect to any 
property placed in service after December 31, 2007.''.
    (b) Conforming Amendments.--

[[Page 119 STAT. 1030]]

            (1) Subsection (a) of section 1016, as amended by this Act, 
        is amended by striking ``and'' at the end of paragraph (32), by 
        striking the period at the end of paragraph (33) and inserting 
        ``, and'', and by adding at the end the following new paragraph:
            ``(34) to the extent provided in section 25C(e), in the case 
        of amounts with respect to which a credit has been allowed under 
        section 25C.''.
            (2) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 is amended by inserting after the item 
        relating to section 25B the following new item:

        ``Sec. 25C. Nonbusiness energy property.''.

    (c) Effective Dates.--The <<NOTE: 26 USC 25C note.>> amendments made 
by this section shall apply to property placed in service after December 
31, 2005.

SEC. 1334. CREDIT FOR ENERGY EFFICIENT APPLIANCES.

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

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

    ``(a) General Rule.--
            ``(1) In general.--For purposes of section 38, the energy 
        efficient appliance credit determined under this section for any 
        taxable year is an amount equal to the sum of the credit amounts 
        determined under paragraph (2) for each type of qualified energy 
        efficient appliance produced by the taxpayer during the calendar 
        year ending with or within the taxable year.
            ``(2) Credit amounts.--The credit amount determined for any 
        type of qualified energy efficient appliance is--
                    ``(A) the applicable amount determined under 
                subsection (b) with respect to such type, multiplied by
                    ``(B) the eligible production for such type.

    ``(b) Applicable Amount.--
            ``(1) In general.--For purposes of subsection (a)--
                    ``(A) Dishwashers.--The applicable amount is the 
                energy savings amount in the case of a dishwasher 
                which--
                          ``(i) is manufactured in calendar year 2006 or 
                      2007, and
                          ``(ii) meets the requirements of the Energy 
                      Star program which are in effect for dishwashers 
                      in 2007.
                    ``(B) Clothes washers.--The applicable amount is 
                $100 in the case of a clothes washer which--
                          ``(i) is manufactured in calendar year 2006 or 
                      2007, and
                          ``(ii) meets the requirements of the Energy 
                      Star program which are in effect for clothes 
                      washers in 2007.
                    ``(C) Refrigerators.--
                          ``(i) 15 percent savings.--The applicable 
                      amount is $75 in the case of a refrigerator 
                      which--
                                    ``(I) is manufactured in calendar 
                                year 2006, and
                                    ``(II) consumes at least 15 percent 
                                but not more than 20 percent less 
                                kilowatt hours per year than the 2001 
                                energy conservation standards.

[[Page 119 STAT. 1031]]

                          ``(ii) 20 percent savings.--The applicable 
                      amount is $125 in the case of a refrigerator 
                      which--
                                    ``(I) is manufactured in calendar 
                                year 2006 or 2007, and
                                    ``(II) consumes at least 20 percent 
                                but not more than 25 percent less 
                                kilowatt hours per year than the 2001 
                                energy conservation standards.
                          ``(iii) 25 percent savings.--The applicable 
                      amount is $175 in the case of a refrigerator 
                      which--
                                    ``(I) is manufactured in calendar 
                                year 2006 or 2007, and
                                    ``(II) consumes at least 25 percent 
                                less kilowatt hours per year than the 
                                2001 energy conservation standards.
            ``(2) Energy savings amount.--For purposes of paragraph 
        (1)(A)--
                    ``(A) In general.--The energy savings amount is the 
                lesser of--
                          ``(i) the product of--
                                    ``(I) $3, and
                                    ``(II) 100 multiplied by the energy 
                                savings percentage, or
                          ``(ii) $100.
                    ``(B) Energy savings percentage.--For purposes of 
                subparagraph (A), the energy savings percentage is the 
                ratio of--
                          ``(i) the EF required by the Energy Star 
                      program for dishwashers in 2007 minus the EF 
                      required by the Energy Star program for 
                      dishwashers in 2005, to
                          ``(ii) the EF required by the Energy Star 
                      program for dishwashers in 2007.

    ``(c) Eligible Production.--
            ``(1) In general.--Except as provided in paragraphs (2), the 
        eligible production in a calendar year with respect to each type 
        of energy efficient appliance is the excess of--
                    ``(A) the number of appliances of such type which 
                are produced by the taxpayer in the United States during 
                such calendar year, over
                    ``(B) the average number of appliances of such type 
                which were produced by the taxpayer (or any predecessor) 
                in the United States during the preceding 3-calendar 
                year period.
            ``(2) Special rule for refrigerators.--The eligible 
        production in a calendar year with respect to each type of 
        refrigerator described in subsection (b)(1)(C) is the excess 
        of--
                    ``(A) the number of appliances of such type which 
                are produced by the taxpayer in the United States during 
                such calendar year, over
                    ``(B) 110 percent of the average number of 
                appliances of such type which were produced by the 
                taxpayer (or any predecessor) in the United States 
                during the preceding 3-calendar year period.

    ``(d) Types of Energy Efficient Appliance.--For purposes of this 
section, the types of energy efficient appliances are--
            ``(1) dishwashers described in subsection (b)(1)(A),
            ``(2) clothes washers described in subsection (b)(1)(B),

[[Page 119 STAT. 1032]]

            ``(3) refrigerators described in subsection (b)(1)(C)(i),
            ``(4) refrigerators described in subsection (b)(1)(C)(ii), 
        and
            ``(5) refrigerators described in subsection (b)(1)(C)(iii).

    ``(e) Limitations.--
            ``(1) Aggregate credit amount allowed.--The aggregate amount 
        of credit allowed under subsection (a) with respect to a 
        taxpayer for any taxable year shall not exceed $75,000,000 
        reduced by the amount of the credit allowed under subsection (a) 
        to the taxpayer (or any predecessor) for all prior taxable 
        years.
            ``(2) Amount allowed for 15 percent savings refrigerators.--
        In the case of refrigerators described in subsection 
        (b)(1)(C)(i), the aggregate amount of the credit allowed under 
        subsection (a) with respect to a taxpayer for any taxable year 
        shall not exceed $20,000,000.
            ``(3) Limitation based on gross receipts.--The credit 
        allowed under subsection (a) with respect to a taxpayer for the 
        taxable year shall not exceed an amount equal to 2 percent of 
        the average annual gross receipts of the taxpayer for the 3 
        taxable years preceding the taxable year in which the credit is 
        determined.
            ``(4) Gross receipts.--For <<NOTE: Applicability.>> purposes 
        of this subsection, the rules of paragraphs (2) and (3) of 
        section 448(c) shall apply.

    ``(f) Definitions.--For purposes of this section--
            ``(1) Qualified energy efficient appliance.--The term 
        `qualified energy efficient appliance' means--
                    ``(A) any dishwasher described in subsection 
                (b)(1)(A),
                    ``(B) any clothes washer described in subsection 
                (b)(1)(B), and
                    ``(C) any refrigerator described in subsection 
                (b)(1)(C).
            ``(2) Dishwasher.--The term `dishwasher' means a residential 
        dishwasher subject to the energy conservation standards 
        established by the Department of Energy.
            ``(3) Clothes washer.--The term `clothes washer' means a 
        residential model clothes washer, including a residential style 
        coin operated washer.
            ``(4) Refrigerator.--The term `refrigerator' means a 
        residential model automatic defrost refrigerator-freezer which 
        has an internal volume of at least 16.5 cubic feet.
            ``(5) EF.--The term `EF' means the energy factor established 
        by the Department of Energy for compliance with the Federal 
        energy conservation standards.
            ``(6) Produced.--The term `produced' includes manufactured.
            ``(7) 2001 energy conservation standard.--The term `2001 
        energy conservation standard' means the energy conservation 
        standards promulgated by the Department of Energy and effective 
        July 1, 2001.

    ``(g) Special Rules.--For purposes of this section--
            ``(1) In general.--Rules <<NOTE: Applicability.>> similar to 
        the rules of subsections (c), (d), and (e) of section 52 shall 
        apply.
            ``(2) Controlled group.--
                    ``(A) In general.--All persons treated as a single 
                employer under subsection (a) or (b) of section 52 or 
                subsection (m) or (o) of section 414 shall be treated as 
                a single producer.

[[Page 119 STAT. 1033]]

                    ``(B) Inclusion of <<NOTE: Applicability.>> foreign 
                corporations.--For purposes of subparagraph (A), in 
                applying subsections (a) and (b) of section 52 to this 
                section, section 1563 shall be applied without regard to 
                subsection (b)(2)(C) thereof.
            ``(3) Verification.--No amount shall be allowed as a credit 
        under subsection (a) with respect to which the taxpayer has not 
        submitted such information or certification as the Secretary, in 
        consultation with the Secretary of Energy, determines 
        necessary.''.

    (b) Conforming Amendment.--Section 38(b) (relating to general 
business credit), as amended by this Act, is amended by striking 
``plus'' at the end of paragraph (22), by striking the period at the end 
of paragraph (23) and inserting ``, plus'', and by adding at the end the 
following new paragraph:
            ``(24) the energy efficient appliance credit determined 
        under section 45M(a).''.

    (c) Clerical Amendment.--The table of sections for subpart D of part 
IV of subchapter A of chapter 1, as amended by this Act, is amended by 
adding at the end the following new item:

        ``Sec. 45M. Energy efficient appliance credit.''.

    (d) Effective Date.--The <<NOTE: 26 USC 38 note.>> amendments made 
by this section shall apply to appliances produced after December 31, 
2005.

SEC. 1335. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

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

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

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter for 
the taxable year an amount equal to the sum of--
            ``(1) 30 percent of the qualified photovoltaic property 
        expenditures made by the taxpayer during such year,
            ``(2) 30 percent of the qualified solar water heating 
        property expenditures made by the taxpayer during such year, and
            ``(3) 30 percent of the qualified fuel cell property 
        expenditures made by the taxpayer during such year.

    ``(b) Limitations.--
            ``(1) Maximum credit.--The credit allowed under subsection 
        (a) for any taxable year shall not exceed--
                    ``(A) $2,000 with respect to any qualified 
                photovoltaic property expenditures,
                    ``(B) $2,000 with respect to any qualified solar 
                water heating property expenditures, and
                    ``(C) $500 with respect to each half kilowatt of 
                capacity of qualified fuel cell property (as defined in 
                section 48(c)(1)) for which qualified fuel cell property 
                expenditures are made.
            ``(2) Certification of solar water heating property.--No 
        credit shall be allowed under this section for an item of 
        property described in subsection (d)(1) unless such property is 
        certified for performance by the non-profit Solar Rating 
        Certification Corporation or a comparable entity endorsed by the 
        government of the State in which such property is installed.

[[Page 119 STAT. 1034]]

    ``(c) Carryforward of Unused Credit.--If the credit allowable under 
subsection (a) exceeds the limitation imposed by section 26(a) for such 
taxable year reduced by the sum of the credits allowable under this 
subpart (other than this section), such excess shall be carried to the 
succeeding taxable year and added to the credit allowable under 
subsection (a) for such succeeding taxable year.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Qualified solar water heating property expenditure.--
        The term `qualified solar water heating property expenditure' 
        means an expenditure for property to heat water for use in a 
        dwelling unit located in the United States and used as a 
        residence by the taxpayer if at least half of the energy used by 
        such property for such purpose is derived from the sun.
            ``(2) Qualified photovoltaic property expenditure.--The term 
        `qualified photovoltaic property expenditure' means an 
        expenditure for property which uses solar energy to generate 
        electricity for use in a dwelling unit located in the United 
        States and used as a residence by the taxpayer.
            ``(3) Qualified fuel cell property expenditure.--The term 
        `qualified fuel cell property expenditure' means an expenditure 
        for qualified fuel cell property (as defined in section 
        48(c)(1)) installed on or in connection with a dwelling unit 
        located in the United States and used as a principal residence 
        (within the meaning of section 121) by the taxpayer.

    ``(e) Special Rules.--For purposes of this section--
            ``(1) Labor costs.--Expenditures for labor costs properly 
        allocable to the onsite preparation, assembly, or original 
        installation of the property described in subsection (d) and for 
        piping or wiring to interconnect such property to the dwelling 
        unit shall be taken into account for purposes of this section.
            ``(2) Solar panels.--No expenditure relating to a solar 
        panel or other property installed as a roof (or portion thereof) 
        shall fail to be treated as property described in paragraph (1) 
        or (2) of subsection (d) solely because it constitutes a 
        structural component of the structure on which it is installed.
            ``(3) Swimming pools, etc., used as storage medium.--
        Expenditures which are properly allocable to a swimming pool, 
        hot tub, or any other energy storage medium which has a function 
        other than the function of such storage shall not be taken into 
        account for purposes of this section.
            ``(4) Dollar amounts in case of joint occupancy.--In the 
        case of any dwelling unit which is jointly occupied and used 
        during any calendar year as a residence by two or more 
        individuals the following rules shall apply:
                    ``(A) The amount of the credit allowable, under 
                subsection (a) by reason of expenditures (as the case 
                may be) made during such calendar year by any of such 
                individuals with respect to such dwelling unit shall be 
                determined by treating all of such individuals as 1 
                taxpayer whose taxable year is such calendar year.
                    ``(B) There shall be allowable, with respect to such 
                expenditures to each of such individuals, a credit under 
                subsection (a) for the taxable year in which such 
                calendar year ends in an amount which bears the same 
                ratio to

[[Page 119 STAT. 1035]]

                the amount determined under subparagraph (A) as the 
                amount of such expenditures made by such individual 
                during such calendar year bears to the aggregate of such 
                expenditures made by all of such individuals during such 
                calendar year.
                    ``(C) Subparagraphs (A) and 
                (B) <<NOTE: Applicability.>> shall be applied separately 
                with respect to expenditures described in paragraphs 
                (1), (2), and (3) of subsection (d).
            ``(5) Tenant-stockholder in cooperative housing 
        corporation.--In the case of an individual who is a tenant-
        stockholder (as defined in section 216) in a cooperative housing 
        corporation (as defined in such section), such individual shall 
        be treated as having made his tenant-stockholder's proportionate 
        share (as defined in section 216(b)(3)) of any expenditures of 
        such corporation.
            ``(6) Condominiums.--
                    ``(A) In general.--In the case of an individual who 
                is a member of a condominium management association with 
                respect to a condominium which the individual owns, such 
                individual shall be treated as having made the 
                individual's proportionate share of any expenditures of 
                such association.
                    ``(B) Condominium management association.--For 
                purposes of this paragraph, the term `condominium 
                management association' means an organization which 
                meets the requirements of paragraph (1) of section 
                528(c) (other than subparagraph (E) thereof) with 
                respect to a condominium project substantially all of 
                the units of which are used as residences.
            ``(7) Allocation in certain cases.--If less than 80 percent 
        of the use of an item is for nonbusiness purposes, only that 
        portion of the expenditures for such item which is properly 
        allocable to use for nonbusiness purposes shall be taken into 
        account.
            ``(8) When expenditure made; amount of expenditure.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an expenditure with respect to an item 
                shall be treated as made when the original installation 
                of the item is completed.
                    ``(B) Expenditures part of building construction.--
                In the case of an expenditure in connection with the 
                construction or reconstruction of a structure, such 
                expenditure shall be treated as made when the original 
                use of the constructed or reconstructed structure by the 
                taxpayer begins.
            ``(9) Property financed by subsidized energy financing.--For 
        purposes of determining the amount of expenditures made by any 
        individual with respect to any dwelling unit, there shall not be 
        taken into account expenditures which are made from subsidized 
        energy financing (as defined in section 48(a)(4)(C)).

    ``(f) Basis Adjustments.--For purposes of this subtitle, if a credit 
is allowed under this section for any expenditure with respect to any 
property, the increase in the basis of such property which would (but 
for this subsection) result from such expenditure shall be reduced by 
the amount of the credit so allowed.

[[Page 119 STAT. 1036]]

    ``(g) Termination.--The credit allowed under this section shall not 
apply to property placed in service after December 31, 2007.''.
    (b) Conforming Amendments.--
            (1) Section 23(c) is amended by striking ``this section and 
        section 1400C'' and inserting ``this section, section 25D, and 
        section 1400C''.
            (2) Section 25(e)(1)(C) is amended by striking ``this 
        section and sections 23 and 1400C'' and inserting ``other than 
        this section, section 23, section 25D, and section 1400C''.
            (3) Section 1400C(d) is amended by striking ``this section'' 
        and inserting ``this section and section 25D''.
            (4) Section 1016(a), as amended by this Act, is amended by 
        striking ``and'' at the end of paragraph (33), by striking the 
        period at the end of paragraph (34) and inserting ``, and'', and 
        by adding at the end the following new paragraph:
            ``(35) to the extent provided in section 25D(f), in the case 
        of amounts with respect to which a credit has been allowed under 
        section 25D.''.
            (5) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1, as amended by this Act, is amended by 
        inserting after the item relating to section 25C the following 
        new item:

        ``Sec. 25D. Residential energy efficient property.''.

    (c) Effective Dates.--The <<NOTE: 26 USC 23 note.>> amendments made 
by this section shall apply to property placed in service after December 
31, 2005, in taxable years ending after such date.

SEC. 1336. CREDIT FOR BUSINESS INSTALLATION OF QUALIFIED FUEL CELLS AND 
            STATIONARY MICROTURBINE POWER PLANTS.

    (a) In General.--Section 48(a)(3)(A) (defining energy property) is 
amended by striking ``or'' at the end of clause (i), by adding ``or'' at 
the end of clause (ii), and by inserting after clause (ii) the following 
new clause:
                          ``(iii) qualified fuel cell property or 
                      qualified microturbine property,''.

    (b) Qualified Fuel Cell Property; Qualified Microturbine Property.--
Section 48 (relating to energy credit) is amended by adding at the end 
the following new subsection:
    ``(c) Qualified Fuel Cell Property; Qualified Microturbine 
Property.--For purposes of this subsection--
            ``(1) Qualified fuel cell property.--
                    ``(A) In general.--The term `qualified fuel cell 
                property' means a fuel cell power plant which--
                          ``(i) has a nameplate capacity of at least 0.5 
                      kilowatt of electricity using an electrochemical 
                      process, and
                          ``(ii) has an electricity-only generation 
                      efficiency greater than 30 percent.
                    ``(B) Limitation.--In the case of qualified fuel 
                cell property placed in service during the taxable year, 
                the credit otherwise determined under paragraph (1) for 
                such year with respect to such property shall not exceed 
                an amount equal to $500 for each 0.5 kilowatt of 
                capacity of such property.
                    ``(C) Fuel cell power plant.--The term `fuel cell 
                power plant' means an integrated system comprised of

[[Page 119 STAT. 1037]]

                a fuel cell stack assembly and associated balance of 
                plant components which converts a fuel into electricity 
                using electrochemical means.
                    ``(D) Special rule.--The first sentence of the 
                matter in subsection (a)(3) which follows subparagraph 
                (D) thereof shall not apply to qualified fuel cell 
                property which is used predominantly in the trade or 
                business of the furnishing or sale of telephone service, 
                telegraph service by means of domestic telegraph 
                operations, or other telegraph services (other than 
                international telegraph services).
                    ``(E) Termination.--The term `qualified fuel cell 
                property' shall not include any property for any period 
                after December 31, 2007.
            ``(2) Qualified microturbine property.--
                    ``(A) In general.--The term `qualified microturbine 
                property' means a stationary microturbine power plant 
                which--
                          ``(i) has a nameplate capacity of less than 
                      2,000 kilowatts, and
                          ``(ii) has an electricity-only generation 
                      efficiency of not less than 26 percent at 
                      International Standard Organization conditions.
                    ``(B) Limitation.--In the case of qualified 
                microturbine property placed in service during the 
                taxable year, the credit otherwise determined under 
                paragraph (1) for such year with respect to such 
                property shall not exceed an amount equal $200 for each 
                kilowatt of capacity of such property.
                    ``(C) Stationary microturbine power plant.--The term 
                `stationary microturbine power plant' means an 
                integrated system comprised of a gas turbine engine, a 
                combustor, a recuperator or regenerator, a generator or 
                alternator, and associated balance of plant components 
                which converts a fuel into electricity and thermal 
                energy. Such term also includes all secondary components 
                located between the existing infrastructure for fuel 
                delivery and the existing infrastructure for power 
                distribution, including equipment and controls for 
                meeting relevant power standards, such as voltage, 
                frequency, and power factors.
                    ``(D) Special rule.--The first sentence of the 
                matter in subsection (a)(3) which follows subparagraph 
                (D) thereof shall not apply to qualified microturbine 
                property which is used predominantly in the trade or 
                business of the furnishing or sale of telephone service, 
                telegraph service by means of domestic telegraph 
                operations, or other telegraph services (other than 
                international telegraph services).
                    ``(E) Termination.--The term `qualified microturbine 
                property' shall not include any property for any period 
                after December 31, 2007.''.

    (c) Energy Percentage.--Section 48(a)(2)(A) (relating to energy 
percentage) is amended to read as follows:
                    ``(A) In general.--The energy percentage is--
                          ``(i) in the case of qualified fuel cell 
                      property, 30 percent, and
                          ``(ii) in the case of any other energy 
                      property, 10 percent.''.

[[Page 119 STAT. 1038]]

    (d) Conforming Amendment.--Section 48(a)(1) is amended by inserting 
``except as provided in paragraph (1)(B) or (2)(B) of subsection (d),'' 
before ``the energy''.
    (e) Effective Date.--The <<NOTE: 26 USC 48 note.>> amendments made 
by this section shall apply to periods after December 31, 2005, in 
taxable years ending after such date, under rules similar to the rules 
of section 48(m) of the Internal Revenue Code of 1986 (as in effect on 
the day before the date of the enactment of the Revenue Reconciliation 
Act of 1990).

SEC. 1337. BUSINESS SOLAR INVESTMENT TAX CREDIT.

    (a) Increase in Energy Percentage.--Section 48(a)(2)(A) (relating to 
energy percentage), as amended by this Act, is amended to read as 
follows:
                    ``(A) In general.--The energy percentage is--
                          ``(i) 30 percent in the case of--
                                    ``(I) qualified fuel cell property,
                                    ``(II) energy property described in 
                                paragraph (3)(A)(i) but only with 
                                respect to periods ending before January 
                                1, 2008, and
                                    ``(III) energy property described in 
                                paragraph (3)(A)(ii), and
                          ``(ii) in the case of any energy property to 
                      which clause (i) does not apply, 10 percent.''.

    (b) Hybrid Solar Lighting Systems.--Subparagraph (A) of section 
48(a)(3) is amended by striking ``or'' at the end of clause (i), by 
redesignating clause (ii) as clause (iii), and by inserting after clause 
(i) the following new clause:
                          ``(ii) equipment which uses solar energy to 
                      illuminate the inside of a structure using fiber-
                      optic distributed sunlight but only with respect 
                      to periods ending before January 1, 2008, or''.

    (c) Limitation on Use of Solar Energy to Heat Swimming Pools.--
Clause (i) of section 48(a)(3)(A) is amended by inserting ``excepting 
property used to generate energy for the purposes of heating a swimming 
pool,'' after ``solar process heat,''.
    (d) Effective Date.--The <<NOTE: 26 USC 48 note.>> amendments made 
by this section shall apply to periods after December 31, 2005, in 
taxable years ending after such date, under rules similar to the rules 
of section 48(m) of the Internal Revenue Code of 1986 (as in effect on 
the day before the date of the enactment of the Revenue Reconciliation 
Act of 1990).

       Subtitle D--Alternative Motor Vehicles and Fuels Incentives

SEC. 1341. ALTERNATIVE MOTOR VEHICLE CREDIT.

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

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

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to the sum of--

[[Page 119 STAT. 1039]]

            ``(1) the new qualified fuel cell motor vehicle credit 
        determined under subsection (b),
            ``(2) the new advanced lean burn technology motor vehicle 
        credit determined under subsection (c),
            ``(3) the new qualified hybrid motor vehicle credit 
        determined under subsection (d), and
            ``(4) the new qualified alternative fuel motor vehicle 
        credit determined under subsection (e).

    ``(b) New Qualified Fuel Cell Motor Vehicle Credit.--
            ``(1) In general.--For purposes of subsection (a), the new 
        qualified fuel cell motor vehicle credit determined under this 
        subsection with respect to a new qualified fuel cell motor 
        vehicle placed in service by the taxpayer during the taxable 
        year is--
                    ``(A) $8,000 ($4,000 in the case of a vehicle placed 
                in service after December 31, 2009), if such vehicle has 
                a gross vehicle weight rating of not more than 8,500 
                pounds,
                    ``(B) $10,000, if such vehicle has a gross vehicle 
                weight rating of more than 8,500 pounds but not more 
                than 14,000 pounds,
                    ``(C) $20,000, if such vehicle has a gross vehicle 
                weight rating of more than 14,000 pounds but not more 
                than 26,000 pounds, and
                    ``(D) $40,000, if such vehicle has a gross vehicle 
                weight rating of more than 26,000 pounds.
            ``(2) Increase for fuel efficiency.--
                    ``(A) In general.--The amount determined under 
                paragraph (1)(A) with respect to a new qualified fuel 
                cell motor vehicle which is a passenger automobile or 
                light truck shall be increased by--
                          ``(i) $1,000, if such vehicle achieves at 
                      least 150 percent but less than 175 percent of the 
                      2002 model year city fuel economy,
                          ``(ii) $1,500, if such vehicle achieves at 
                      least 175 percent but less than 200 percent of the 
                      2002 model year city fuel economy,
                          ``(iii) $2,000, if such vehicle achieves at 
                      least 200 percent but less than 225 percent of the 
                      2002 model year city fuel economy,
                          ``(iv) $2,500, if such vehicle achieves at 
                      least 225 percent but less than 250 percent of the 
                      2002 model year city fuel economy,
                          ``(v) $3,000, if such vehicle achieves at 
                      least 250 percent but less than 275 percent of the 
                      2002 model year city fuel economy,
                          ``(vi) $3,500, if such vehicle achieves at 
                      least 275 percent but less than 300 percent of the 
                      2002 model year city fuel economy, and
                          ``(vii) $4,000, if such vehicle achieves at 
                      least 300 percent of the 2002 model year city fuel 
                      economy.
                    ``(B) 2002 model year city fuel economy.--For 
                purposes of subparagraph (A), the 2002 model year city 
                fuel economy with respect to a vehicle shall be 
                determined in accordance with the following tables:
                          ``(i) In the case of a passenger automobile:


[[Page 119 STAT. 1040]]


                              The 2002 model year city..................
          ``If vehicle inertiafuel economy is:..........................
    class is:
              1,500 or 1,750 lbs                              45.2 mpg  
              2,000 lbs                                       39.6 mpg  
              2,250 lbs                                       35.2 mpg  
              2,500 lbs                                       31.7 mpg  
              2,750 lbs                                       28.8 mpg  
              3,000 lbs                                       26.4 mpg  
              3,500 lbs                                       22.6 mpg  
              4,000 lbs                                       19.8 mpg  
              4,500 lbs                                       17.6 mpg  
              5,000 lbs                                       15.9 mpg  
              5,500 lbs                                       14.4 mpg  
              6,000 lbs                                       13.2 mpg  
              6,500 lbs                                       12.2 mpg  
              7,000 to 8,500 lbs                             11.3 mpg.  

                          ``(ii) In the case of a light truck:

                              The 2002 model year city..................
          ``If vehicle inertiafuel economy is:..........................
    class is:
              1,500 or 1,750 lbs                              39.4 mpg  
              2,000 lbs                                       35.2 mpg  
              2,250 lbs                                       31.8 mpg  
              2,500 lbs                                       29.0 mpg  
              2,750 lbs                                       26.8 mpg  
              3,000 lbs                                       24.9 mpg  
              3,500 lbs                                       21.8 mpg  
              4,000 lbs                                       19.4 mpg  
              4,500 lbs                                       17.6 mpg  
              5,000 lbs                                       16.1 mpg  
              5,500 lbs                                       14.8 mpg  
              6,000 lbs                                       13.7 mpg  
              6,500 lbs                                       12.8 mpg  
              7,000 to 8,500 lbs                             12.1 mpg.  

                    ``(C) Vehicle inertia weight class.--For purposes of 
                subparagraph (B), the term `vehicle inertia weight 
                class' has the same meaning as when defined in 
                regulations prescribed by the Administrator of the 
                Environmental Protection Agency for purposes of the 
                administration of title II of the Clean Air Act (42 
                U.S.C. 7521 et seq.).
            ``(3) New qualified fuel cell motor vehicle.--For purposes 
        of this subsection, the term `new qualified fuel cell motor 
        vehicle' means a motor vehicle--
                    ``(A) which is propelled by power derived from 1 or 
                more cells which convert chemical energy directly into 
                electricity by combining oxygen with hydrogen fuel which 
                is stored on board the vehicle in any form and may or 
                may not require reformation prior to use,
                    ``(B) which, in the case of a passenger automobile 
                or light truck, has received on or after the date of the 
                enactment of this section a certificate that such 
                vehicle meets or exceeds the Bin 5 Tier II emission 
                level established in regulations prescribed by the 
                Administrator of the Environmental Protection Agency 
                under section 202(i) of the Clean Air Act for that make 
                and model year vehicle,
                    ``(C) the original use of which commences with the 
                taxpayer,

[[Page 119 STAT. 1041]]

                    ``(D) which is acquired for use or lease by the 
                taxpayer and not for resale, and
                    ``(E) which is made by a manufacturer.

    ``(c) New Advanced Lean Burn Technology Motor Vehicle Credit.--
            ``(1) In general.--For purposes of subsection (a), the new 
        advanced lean burn technology motor vehicle credit determined 
        under this subsection for the taxable year is the credit amount 
        determined under paragraph (2) with respect to a new advanced 
        lean burn technology motor vehicle placed in service by the 
        taxpayer during the taxable year.
            ``(2) Credit amount.--
                    ``(A) Fuel economy.--
                          ``(i) In general.--The credit amount 
                      determined under this paragraph shall be 
                      determined in accordance with the following table:

``In the case of a vehicle whiThe credit amount is--....................
    achieves a fuel economy (expressed 
    as a percentage of the 2002 model 
    year city fuel economy) of--
At least 125 percent but less than 150                              $400
    percent
At least 150 percent but less than 175                              $800
    percent
At least 175 percent but less than 200                            $1,200
    percent
At least 200 percent but less than 225                            $1,600
    percent
At least 225 percent but less than 250                            $2,000
    percent
At least 250 percent                                             $2,400.

                          ``(ii) 2002 model year city fuel economy.--For 
                      purposes of clause (i), the 2002 model year city 
                      fuel economy with respect to a vehicle shall be 
                      determined on a gasoline gallon equivalent basis 
                      as determined by the Administrator of the 
                      Environmental Protection Agency using the tables 
                      provided in subsection (b)(2)(B) with respect to 
                      such vehicle.
                    ``(B) Conservation credit.--The amount determined 
                under subparagraph (A) with respect to a new advanced 
                lean burn technology motor vehicle shall be increased by 
                the conservation credit amount determined in accordance 
                with the following table:

``In the case of a vehicle whiThe conservation credit amount is--.......
    achieves a lifetime fuel savings 
    (expressed in gallons of gasoline) 
    of--
At least 1,200 but less than 1,800                                  $250
At least 1,800 but less than 2,400                                  $500
At least 2,400 but less than 3,000                                  $750
At least 3,000                                                   $1,000.

            ``(3) New advanced lean burn technology motor vehicle.--For 
        purposes of this subsection, the term `new advanced lean burn 
        technology motor vehicle' means a passenger automobile or a 
        light truck--
                    ``(A) with an internal combustion engine which--
                          ``(i) is designed to operate primarily using 
                      more air than is necessary for complete combustion 
                      of the fuel,
                          ``(ii) incorporates direct injection,
                          ``(iii) achieves at least 125 percent of the 
                      2002 model year city fuel economy,

[[Page 119 STAT. 1042]]

                          ``(iv) for 2004 and later model vehicles, has 
                      received a certificate that such vehicle meets or 
                      exceeds--
                                    ``(I) in the case of a vehicle 
                                having a gross vehicle weight rating of 
                                6,000 pounds or less, the Bin 5 Tier II 
                                emission standard established in 
                                regulations prescribed by the 
                                Administrator of the Environmental 
                                Protection Agency under section 202(i) 
                                of the Clean Air Act for that make and 
                                model year vehicle, and
                                    ``(II) in the case of a vehicle 
                                having a gross vehicle weight rating of 
                                more than 6,000 pounds but not more than 
                                8,500 pounds, the Bin 8 Tier II emission 
                                standard which is so established,
                    ``(B) the original use of which commences with the 
                taxpayer,
                    ``(C) which is acquired for use or lease by the 
                taxpayer and not for resale, and
                    ``(D) which is made by a manufacturer.
            ``(4) Lifetime fuel savings.--For purposes of this 
        subsection, the term `lifetime fuel savings' means, in the case 
        of any new advanced lean burn technology motor vehicle, an 
        amount equal to the excess (if any) of--
                    ``(A) 120,000 divided by the 2002 model year city 
                fuel economy for the vehicle inertia weight class, over
                    ``(B) 120,000 divided by the city fuel economy for 
                such vehicle.

    ``(d) New Qualified Hybrid Motor Vehicle Credit.--
            ``(1) In general.--For purposes of subsection (a), the new 
        qualified hybrid motor vehicle credit determined under this 
        subsection for the taxable year is the credit amount determined 
        under paragraph (2) with respect to a new qualified hybrid motor 
        vehicle placed in service by the taxpayer during the taxable 
        year.
            ``(2) Credit amount.--
                    ``(A) Credit amount for passenger automobiles and 
                light trucks.--In the case of a new qualified hybrid 
                motor vehicle which is a passenger automobile or light 
                truck and which has a gross vehicle weight rating of not 
                more than 8,500 pounds, the amount determined under this 
                paragraph is the sum of the amounts determined under 
                clauses (i) and (ii).
                          ``(i) Fuel economy.--The amount determined 
                      under this clause is the amount which would be 
                      determined under subsection (c)(2)(A) if such 
                      vehicle were a vehicle referred to in such 
                      subsection.
                          ``(ii) Conservation credit.--The amount 
                      determined under this clause is the amount which 
                      would be determined under subsection (c)(2)(B) if 
                      such vehicle were a vehicle referred to in such 
                      subsection.
                    ``(B) Credit amount for other motor vehicles.--
                          ``(i) In general.--In the case of any new 
                      qualified hybrid motor vehicle to which 
                      subparagraph (A) does not apply, the amount 
                      determined under this paragraph is the amount 
                      equal to the applicable percentage of the 
                      qualified incremental hybrid cost of the vehicle 
                      as certified under clause (v).

[[Page 119 STAT. 1043]]

                          ``(ii) Applicable percentage.--For purposes of 
                      clause (i), the applicable percentage is--
                                    ``(I) 20 percent if the vehicle 
                                achieves an increase in city fuel 
                                economy relative to a comparable vehicle 
                                of at least 30 percent but less than 40 
                                percent,
                                    ``(II) 30 percent if the vehicle 
                                achieves such an increase of at least 40 
                                percent but less than 50 percent, and
                                    ``(III) 40 percent if the vehicle 
                                achieves such an increase of at least 50 
                                percent.
                          ``(iii) Qualified incremental hybrid cost.--
                      For purposes of this subparagraph, the qualified 
                      incremental hybrid cost of any vehicle is equal to 
                      the amount of the excess of the manufacturer's 
                      suggested retail price for such vehicle over such 
                      price for a comparable vehicle, to the extent such 
                      amount does not exceed--
                                    ``(I) $7,500, if such vehicle has a 
                                gross vehicle weight rating of not more 
                                than 14,000 pounds,
                                    ``(II) $15,000, if such vehicle has 
                                a gross vehicle weight rating of more 
                                than 14,000 pounds but not more than 
                                26,000 pounds, and
                                    ``(III) $30,000, if such vehicle has 
                                a gross vehicle weight rating of more 
                                than 26,000 pounds.
                          ``(iv) Comparable vehicle.--For purposes of 
                      this subparagraph, the term `comparable vehicle' 
                      means, with respect to any new qualified hybrid 
                      motor vehicle, any vehicle which is powered solely 
                      by a gasoline or diesel internal combustion engine 
                      and which is comparable in weight, size, and use 
                      to such vehicle.
                          ``(v) Certification.--A certification 
                      described in clause (i) shall be made by the 
                      manufacturer and shall be determined in accordance 
                      with guidance prescribed by the Secretary. Such 
                      guidance shall specify procedures and methods for 
                      calculating fuel economy savings and incremental 
                      hybrid costs.
            ``(3) New qualified hybrid motor vehicle.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `new qualified hybrid 
                motor vehicle' means a motor vehicle--
                          ``(i) which draws propulsion energy from 
                      onboard sources of stored energy which are both--
                                    ``(I) an internal combustion or heat 
                                engine using consumable fuel, and
                                    ``(II) a rechargeable energy storage 
                                system,
                          ``(ii) which, in the case of a vehicle to 
                      which paragraph (2)(A) applies, has received a 
                      certificate of conformity under the Clean Air Act 
                      and meets or exceeds the equivalent qualifying 
                      California low emission vehicle standard under 
                      section 243(e)(2) of the Clean Air Act for that 
                      make and model year, and
                                    ``(I) in the case of a vehicle 
                                having a gross vehicle weight rating of 
                                6,000 pounds or less, the Bin 5 Tier II 
                                emission standard established in 
                                regulations prescribed by the 
                                Administrator of the Environmental 
                                Protection Agency under section

[[Page 119 STAT. 1044]]

                                202(i) of the Clean Air Act for that 
                                make and model year vehicle, and
                                    ``(II) in the case of a vehicle 
                                having a gross vehicle weight rating of 
                                more than 6,000 pounds but not more than 
                                8,500 pounds, the Bin 8 Tier II emission 
                                standard which is so established,
                          ``(iii) which has a maximum available power of 
                      at least--
                                    ``(I) 
                                4 <<NOTE: Applicability.>> percent in 
                                the case of a vehicle to which paragraph 
                                (2)(A) applies,
                                    ``(II) 10 percent in the case of a 
                                vehicle which has a gross vehicle weight 
                                rating of more than 8,500 pounds and not 
                                more than 14,000 pounds, and
                                    ``(III) 15 percent in the case of a 
                                vehicle in excess of 14,000 pounds,
                          ``(iv) <<NOTE: Applicability.>> which, in the 
                      case of a vehicle to which paragraph (2)(B) 
                      applies, has an internal combustion or heat engine 
                      which has received a certificate of conformity 
                      under the Clean Air Act as meeting the emission 
                      standards set in the regulations prescribed by the 
                      Administrator of the Environmental Protection 
                      Agency for 2004 through 2007 model year diesel 
                      heavy duty engines or ottocycle heavy duty 
                      engines, as applicable,
                          ``(v) the original use of which commences with 
                      the taxpayer,
                          ``(vi) which is acquired for use or lease by 
                      the taxpayer and not for resale, and
                          ``(vii) which is made by a manufacturer.
                Such term shall not include any vehicle which is not a 
                passenger automobile or light truck if such vehicle has 
                a gross vehicle weight rating of less than 8,500 pounds.
                    ``(B) Consumable fuel.--For purposes of subparagraph 
                (A)(i)(I), the term `consumable fuel' means any solid, 
                liquid, or gaseous matter which releases energy when 
                consumed by an auxiliary power unit.
                    ``(C) Maximum <<NOTE: Applicability.>> available 
                power.--
                          ``(i) Certain passenger automobiles and light 
                      trucks.--In the case of a vehicle to which 
                      paragraph (2)(A) applies, the term `maximum 
                      available power' means the maximum power available 
                      from the rechargeable energy storage system, 
                      during a standard 10 second pulse power or 
                      equivalent test, divided by such maximum power and 
                      the SAE net power of the heat engine.
                          ``(ii) Other motor vehicles.--In the case of a 
                      vehicle to which paragraph (2)(B) applies, the 
                      term `maximum available power' means the maximum 
                      power available from the rechargeable energy 
                      storage system, during a standard 10 second pulse 
                      power or equivalent test, divided by the vehicle's 
                      total traction power. For purposes of the 
                      preceding sentence, the term `total traction 
                      power' means the sum of the peak power from the 
                      rechargeable energy storage system and the heat 
                      engine peak power of the vehicle, except that if 
                      such storage system is the sole means by which the 
                      vehicle

[[Page 119 STAT. 1045]]

                      can be driven, the total traction power is the 
                      peak power of such storage system.

    ``(e) New Qualified Alternative Fuel Motor Vehicle Credit.--
            ``(1) Allowance of credit.--Except as provided in paragraph 
        (5), the new qualified alternative fuel motor vehicle credit 
        determined under this subsection is an amount equal to the 
        applicable percentage of the incremental cost of any new 
        qualified alternative fuel motor vehicle placed in service by 
        the taxpayer during the taxable year.
            ``(2) Applicable percentage.--For purposes of paragraph (1), 
        the applicable percentage with respect to any new qualified 
        alternative fuel motor vehicle is--
                    ``(A) 50 percent, plus
                    ``(B) 30 percent, if such vehicle--
                          ``(i) has received a certificate of conformity 
                      under the Clean Air Act and meets or exceeds the 
                      most stringent standard available for 
                      certification under the Clean Air Act for that 
                      make and model year vehicle (other than a zero 
                      emission standard), or
                          ``(ii) has received an order certifying the 
                      vehicle as meeting the same requirements as 
                      vehicles which may be sold or leased in California 
                      and meets or exceeds the most stringent standard 
                      available for certification under the State laws 
                      of California (enacted in accordance with a waiver 
                      granted under section 209(b) of the Clean Air Act) 
                      for that make and model year vehicle (other than a 
                      zero emission standard).
        For purposes of the preceding sentence, in the case of any new 
        qualified alternative fuel motor vehicle which weighs more than 
        14,000 pounds gross vehicle weight rating, the most stringent 
        standard available shall be such standard available for 
        certification on the date of the enactment of the Energy Tax 
        Incentives Act of 2005.
            ``(3) Incremental cost.--For purposes of this subsection, 
        the incremental cost of any new qualified alternative fuel motor 
        vehicle is equal to the amount of the excess of the 
        manufacturer's suggested retail price for such vehicle over such 
        price for a gasoline or diesel fuel motor vehicle of the same 
        model, to the extent such amount does not exceed--
                    ``(A) $5,000, if such vehicle has a gross vehicle 
                weight rating of not more than 8,500 pounds,
                    ``(B) $10,000, if such vehicle has a gross vehicle 
                weight rating of more than 8,500 pounds but not more 
                than 14,000 pounds,
                    ``(C) $25,000, if such vehicle has a gross vehicle 
                weight rating of more than 14,000 pounds but not more 
                than 26,000 pounds, and
                    ``(D) $40,000, if such vehicle has a gross vehicle 
                weight rating of more than 26,000 pounds.
            ``(4) New qualified alternative fuel motor vehicle.--For 
        purposes of this subsection--
                    ``(A) In general.--The term `new qualified 
                alternative fuel motor vehicle' means any motor 
                vehicle--
                          ``(i) which is only capable of operating on an 
                      alternative fuel,

[[Page 119 STAT. 1046]]

                          ``(ii) the original use of which commences 
                      with the taxpayer,
                          ``(iii) which is acquired by the taxpayer for 
                      use or lease, but not for resale, and
                          ``(iv) which is made by a manufacturer.
                    ``(B) Alternative fuel.--The term `alternative fuel' 
                means compressed natural gas, liquefied natural gas, 
                liquefied petroleum gas, hydrogen, and any liquid at 
                least 85 percent of the volume of which consists of 
                methanol.
            ``(5) Credit for mixed-fuel vehicles.--
                    ``(A) In general.--In the case of a mixed-fuel 
                vehicle placed in service by the taxpayer during the 
                taxable year, the credit determined under this 
                subsection is an amount equal to--
                          ``(i) in the case of a 75/25 mixed-fuel 
                      vehicle, 70 percent of the credit which would have 
                      been allowed under this subsection if such vehicle 
                      was a qualified alternative fuel motor vehicle, 
                      and
                          ``(ii) in the case of a 90/10 mixed-fuel 
                      vehicle, 90 percent of the credit which would have 
                      been allowed under this subsection if such vehicle 
                      was a qualified alternative fuel motor vehicle.
                    ``(B) Mixed-fuel vehicle.--For purposes of this 
                subsection, the term `mixed-fuel vehicle' means any 
                motor vehicle described in subparagraph (C) or (D) of 
                paragraph (3), which--
                          ``(i) is certified by the manufacturer as 
                      being able to perform efficiently in normal 
                      operation on a combination of an alternative fuel 
                      and a petroleum-based fuel,
                          ``(ii) either--
                                    ``(I) has received a certificate of 
                                conformity under the Clean Air Act, or
                                    ``(II) has received an order 
                                certifying the vehicle as meeting the 
                                same requirements as vehicles which may 
                                be sold or leased in California and 
                                meets or exceeds the low emission 
                                vehicle standard under section 88.105-94 
                                of title 40, Code of Federal 
                                Regulations, for that make and model 
                                year vehicle,
                          ``(iii) the original use of which commences 
                      with the taxpayer,
                          ``(iv) which is acquired by the taxpayer for 
                      use or lease, but not for resale, and
                          ``(v) which is made by a manufacturer.
                    ``(C) 75/25 mixed-fuel vehicle.--For purposes of 
                this subsection, the term `75/25 mixed-fuel vehicle' 
                means a mixed-fuel vehicle which operates using at least 
                75 percent alternative fuel and not more than 25 percent 
                petroleum-based fuel.
                    ``(D) 90/10 mixed-fuel vehicle.--For purposes of 
                this subsection, the term `90/10 mixed-fuel vehicle' 
                means a mixed-fuel vehicle which operates using at least 
                90 percent alternative fuel and not more than 10 percent 
                petroleum-based fuel.

[[Page 119 STAT. 1047]]

    ``(f) Limitation on Number of New Qualified Hybrid and Advanced 
Lean-Burn Technology Vehicles Eligible for Credit.--
            ``(1) In general.--In the case of a qualified vehicle sold 
        during the phaseout period, only the applicable percentage of 
        the credit otherwise allowable under subsection (c) or (d) shall 
        be allowed.
            ``(2) Phaseout period.--For purposes of this subsection, the 
        phaseout period is the period beginning with the second calendar 
        quarter following the calendar quarter which includes the first 
        date on which the number of qualified vehicles manufactured by 
        the manufacturer of the vehicle referred to in paragraph (1) 
        sold for use in the United States after December 31, 2005, is at 
        least 60,000.
            ``(3) Applicable percentage.--For purposes of paragraph (1), 
        the applicable percentage is--
                    ``(A) 50 percent for the first 2 calendar quarters 
                of the phaseout period,
                    ``(B) 25 percent for the 3d and 4th calendar 
                quarters of the phaseout period, and
                    ``(C) 0 percent for each calendar quarter 
                thereafter.
            ``(4) Controlled groups.--
                    ``(A) In general.--For purposes of this subsection, 
                all persons treated as a single employer under 
                subsection (a) or (b) of section 52 or subsection (m) or 
                (o) of section 414 shall be treated as a single 
                manufacturer.
                    ``(B) Inclusion of <<NOTE: Applicability.>> foreign 
                corporations.--For purposes of subparagraph (A), in 
                applying subsections (a) and (b) of section 52 to this 
                section, section 1563 shall be applied without regard to 
                subsection (b)(2)(C) thereof.
            ``(5) Qualified vehicle.--For purposes of this subsection, 
        the term `qualified vehicle' means any new qualified hybrid 
        motor vehicle (described in subsection (d)(2)(A)) and any new 
        advanced lean burn technology motor vehicle.

    ``(g) Application With Other Credits.--
            ``(1) Business credit treated as part of general business 
        credit.--So much of the credit which would be allowed under 
        subsection (a) for any taxable year (determined without regard 
        to this subsection) that is attributable to property of a 
        character subject to an allowance for depreciation shall be 
        treated as a credit listed in section 38(b) for such taxable 
        year (and not allowed under subsection (a)).
            ``(2) Personal credit.--The credit allowed under subsection 
        (a) (after the application of paragraph (1)) for any taxable 
        year shall not exceed the excess (if any) of--
                    ``(A) the regular tax reduced by the sum of the 
                credits allowable under subpart A and sections 27 and 
                30, over
                    ``(B) the tentative minimum tax for the taxable 
                year.

    ``(h) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Motor vehicle.--The term `motor vehicle' has the 
        meaning given such term by section 30(c)(2).
            ``(2) City fuel economy.--The city fuel economy with respect 
        to any vehicle shall be measured in a manner which is 
        substantially similar to the manner city fuel economy is 
        measured in accordance with procedures under part 600 of

[[Page 119 STAT. 1048]]

        subchapter Q of chapter I of title 40, Code of Federal 
        Regulations, as in effect on the date of the enactment of this 
        section.
            ``(3) Other terms.--The terms `automobile', `passenger 
        automobile', `medium duty passenger vehicle', `light truck', and 
        `manufacturer' have the meanings given such terms in regulations 
        prescribed by the Administrator of the Environmental Protection 
        Agency for purposes of the administration of title II of the 
        Clean Air Act (42 U.S.C. 7521 et seq.).
            ``(4) Reduction in basis.--For purposes of this subtitle, 
        the basis of any property for which a credit is allowable under 
        subsection (a) shall be reduced by the amount of such credit so 
        allowed (determined without regard to subsection (g)).
            ``(5) No double benefit.--The amount of any deduction or 
        other credit allowable under this chapter--
                    ``(A) for any incremental cost taken into account in 
                computing the amount of the credit determined under 
                subsection (e) shall be reduced by the amount of such 
                credit attributable to such cost, and
                    ``(B) with respect to a vehicle described under 
                subsection (b) or (c), shall be reduced by the amount of 
                credit allowed under subsection (a) for such vehicle for 
                the taxable year.
            ``(6) Property used by tax-exempt entity.--In the case of a 
        vehicle whose use is described in paragraph (3) or (4) of 
        section 50(b) and which is not subject to a lease, the person 
        who sold such vehicle to the person or entity using such vehicle 
        shall be treated as the taxpayer that placed such vehicle in 
        service, but only if such person clearly discloses to such 
        person or entity in a document the amount of any credit 
        allowable under subsection (a) with respect to such vehicle 
        (determined without regard to subsection (g)).
            ``(7) Property used outside united states, etc., not 
        qualified.--No credit shall be allowable under subsection (a) 
        with respect to any property referred to in section 50(b)(1) or 
        with respect to the portion of the cost of any property taken 
        into account under section 179.
            ``(8) Recapture.--The <<NOTE: Regulations.>> Secretary 
        shall, by regulations, provide for recapturing the benefit of 
        any credit allowable under subsection (a) with respect to any 
        property which ceases to be property eligible for such credit 
        (including recapture in the case of a lease period of less than 
        the economic life of a vehicle).
            ``(9) Election to not take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects to not have this section apply to such vehicle.
            ``(10) Interaction with air quality and motor vehicle safety 
        standards.--Unless otherwise provided in this section, a motor 
        vehicle shall not be considered eligible for a credit under this 
        section unless such vehicle is in compliance with--
                    ``(A) the applicable provisions of the Clean Air Act 
                for the applicable make and model year of the vehicle 
                (or applicable air quality provisions of State law in 
                the case of a State which has adopted such provision 
                under a waiver under section 209(b) of the Clean Air 
                Act), and
                    ``(B) the motor vehicle safety provisions of 
                sections 30101 through 30169 of title 49, United States 
                Code.

    ``(i) Regulations.--

[[Page 119 STAT. 1049]]

            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary shall promulgate such regulations as necessary to 
        carry out the provisions of this section.
            ``(2) Coordination in prescription of certain regulations.--
        The Secretary of the Treasury, in coordination with the 
        Secretary of Transportation and the Administrator of the 
        Environmental Protection Agency, shall prescribe such 
        regulations as necessary to determine whether a motor vehicle 
        meets the requirements to be eligible for a credit under this 
        section.

    ``(j) Termination.--This section shall not apply to any property 
purchased after--
            ``(1) in the case of a new qualified fuel cell motor vehicle 
        (as described in subsection (b)), December 31, 2014,
            ``(2) in the case of a new advanced lean burn technology 
        motor vehicle (as described in subsection (c)) or a new 
        qualified hybrid motor vehicle (as described in subsection 
        (d)(2)(A)), December 31, 2010,
            ``(3) in the case of a new qualified hybrid motor vehicle 
        (as described in subsection (d)(2)(B)), December 31, 2009, and
            ``(4) in the case of a new qualified alternative fuel 
        vehicle (as described in subsection (e)), December 31, 2010.''.

    (b) Conforming Amendments.--
            (1) Section 38(b), as amended by this Act, is amended by 
        striking ``plus'' at the end of paragraph (23), by striking the 
        period at the end of paragraph (24) and inserting ``, and'', and 
        by adding at the end the following new paragraph:
            ``(25) the portion of the alternative motor vehicle credit 
        to which section 30B(g)(1) applies.''.
            (2) Section 1016(a), as amended by this Act, is amended by 
        striking ``and'' at the end of paragraph (34), by striking the 
        period at the end of paragraph (35) and inserting ``, and'', and 
        by adding at the end the following new paragraph:
            ``(36) to the extent provided in section 30B(h)(4).''.
            (3) Section 55(c)(2), as amended by this Act, is amended by 
        inserting ``30B(g)(2),'' after ``30(b)(2),''.
            (4) Section 6501(m) is amended by inserting ``30B(h)(9),'' 
        after ``30(d)(4),''.
            (5) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 is amended by inserting after the item 
        relating to section 30A the following new item:

``Sec. 30B. Alternative motor vehicle credit.''.

    (c) Effective Date.--The <<NOTE: 26 USC 30B note.>> amendments made 
by this section shall apply to property placed in service after December 
31, 2005, in taxable years ending after such date.

SEC. 1342. CREDIT FOR INSTALLATION OF ALTERNATIVE FUELING STATIONS.

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

``SEC. 30C. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

    ``(a) Credit Allowed.--There shall be allowed as a credit against 
the tax imposed by this chapter for the taxable year an amount equal to 
30 percent of the cost of any qualified alternative

[[Page 119 STAT. 1050]]

fuel vehicle refueling property placed in service by the taxpayer during 
the taxable year.
    ``(b) Limitation.--The credit allowed under subsection (a) with 
respect to any alternative fuel vehicle refueling property shall not 
exceed--
            ``(1) $30,000 in the case of a property of a character 
        subject to an allowance for depreciation, and
            ``(2) $1,000 in any other case.

    ``(c) Qualified Alternative Fuel Vehicle Refueling Property.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        term `qualified alternative fuel vehicle refueling property' has 
        the meaning given to such term by section 179A(d), but only with 
        respect to any fuel--
                    ``(A) at least 85 percent of the volume of which 
                consists of one or more of the following: ethanol, 
                natural gas, compressed natural gas, liquefied natural 
                gas, liquefied petroleum gas, or hydrogen, or
                    ``(B) any mixture of biodiesel (as defined in 
                section 40A(d)(1)) and diesel fuel (as defined in 
                section 4083(a)(3)), determined without regard to any 
                use of kerosene and containing at least 20 percent 
                biodiesel.
            ``(2) Residential property.--In the case of any property 
        installed on property which is used as the principal residence 
        (within the meaning of section 121) of the taxpayer, paragraph 
        (1) of section 179A(d) shall not apply.

    ``(d) Application With Other Credits.--
            ``(1) Business credit treated as part of general business 
        credit.--So much of the credit which would be allowed under 
        subsection (a) for any taxable year (determined without regard 
        to this subsection) that is attributable to property of a 
        character subject to an allowance for depreciation shall be 
        treated as a credit listed in section 38(b) for such taxable 
        year (and not allowed under subsection (a)).
            ``(2) Personal credit.--The credit allowed under subsection 
        (a) (after the application of paragraph (1)) for any taxable 
        year shall not exceed the excess (if any) of--
                    ``(A) the regular tax reduced by the sum of the 
                credits allowable under subpart A and sections 27, 30, 
                and 30B, over
                    ``(B) the tentative minimum tax for the taxable 
                year.

    ``(e) Special Rules.--For purposes of this section--
            ``(1) Basis reduction.--The basis of any property shall be 
        reduced by the portion of the cost of such property taken into 
        account under subsection (a).
            ``(2) Property used by tax-exempt entity.--In the case of 
        any qualified alternative fuel vehicle refueling property the 
        use of which is described in paragraph (3) or (4) of section 
        50(b) and which is not subject to a lease, the person who sold 
        such property to the person or entity using such property shall 
        be treated as the taxpayer that placed such property in service, 
        but only if such person clearly discloses to such person or 
        entity in a document the amount of any credit allowable under 
        subsection (a) with respect to such property (determined without 
        regard to subsection (d)).
            ``(3) Property used outside united states not qualified.--No 
        credit shall be allowable under subsection (a) with

[[Page 119 STAT. 1051]]

        respect to any property referred to in section 50(b)(1) or with 
        respect to the portion of the cost of any property taken into 
        account under section 179.
            ``(4) Election not to take credit.--No credit shall be 
        allowed under subsection (a) for any property if the taxpayer 
        elects not to have this section apply to such property.
            ``(5) Recapture rules.--
        Rules <<NOTE: Applicability.>> similar to the rules of section 
        179A(e)(4) shall apply.

    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as necessary to carry out the provisions of this section.
    ``(g) Termination.--This section shall not apply to any property 
placed in service--
            ``(1) in the case of property relating to hydrogen, after 
        December 31, 2014, and
            ``(2) in the case of any other property, after December 31, 
        2009.''.

    (b) Conforming Amendments.--
            (1) Section 38(b), as amended by this Act, is amended by 
        striking ``plus'' at the end of paragraph (24), by striking the 
        period at the end of paragraph (25) and inserting ``, and'', and 
        by adding at the end the following new paragraph:
            ``(26) the portion of the alternative fuel vehicle refueling 
        property credit to which section 30C(d)(1) applies.''.
            (2) Section 1016(a), as amended by this Act, is amended by 
        striking ``and'' at the end of paragraph (35), by striking the 
        period at the end of paragraph (36) and inserting ``, and'', and 
        by adding at the end the following new paragraph:
            ``(37) to the extent provided in section 30C(f).''.
            (3) Section 55(c)(2), as amended by this Act, is amended by 
        inserting ``30C(d)(2),'' after ``30B(g)(2),''.
            (4) Section 6501(m) is amended by inserting ``30C(e)(5),'' 
        after ``30B(h)(9),''.
            (5) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1, as amended by this Act, is amended by 
        inserting after the item relating to section 30B the following 
        new item:

``Sec. 30C. Clean-fuel vehicle refueling property credit.''.

    (c) Effective Date.--The <<NOTE: 26 USC 30C note.>> amendments made 
by this section shall apply to property placed in service after December 
31, 2005, in taxable years ending after such date.

SEC. 1343. REDUCED MOTOR FUEL EXCISE TAX ON CERTAIN MIXTURES OF DIESEL 
            FUEL.

    (a) In General.--Paragraph (2) of section 4081(a) is amended by 
adding at the end the following:
                    ``(D) Diesel-water fuel emulsion.--
                In <<NOTE: Applicability.>> the case of diesel-water 
                fuel emulsion at least 14 percent of which is water and 
                with respect to which the emulsion additive is 
                registered by a United States manufacturer with the 
                Environmental Protection Agency pursuant to section 211 
                of the Clean Air Act (as in effect on March 31, 2003), 
                subparagraph (A)(iii) shall be applied by substituting 
                `19.7 cents' for `24.3 cents'. The preceding sentence 
                shall not apply to the removal, sale, or use of diesel-
                water fuel emulsion unless the person so removing, 
                selling, or using such fuel is registered under section 
                4101.''.

    (b) Special Rules for Diesel-Water Fuel Emulsions.--

[[Page 119 STAT. 1052]]

            (1) Refunds for tax-paid purchases.--Section <<NOTE: 26 USC 
        6427.>> 6427 is amended by redesignating subsections (m) through 
        (p) as subsections (n) through (q), respectively, and by 
        inserting after subsection (l) the following new subsection:

    ``(m) Diesel Fuel Used to Produce Emulsion.--
            ``(1) In general.--Except as provided in subsection (k), if 
        any diesel fuel on which tax was imposed by section 4081 at the 
        regular tax rate is used by any person in producing an emulsion 
        described in section 4081(a)(2)(D) which is sold or used in such 
        person's trade or business, the Secretary shall pay (without 
        interest) to such person an amount equal to the excess of the 
        regular tax rate over the incentive tax rate with respect to 
        such fuel.
            ``(2) Definitions.--For purposes of paragraph (1)--
                    ``(A) Regular tax rate.--The term `regular tax rate' 
                means the aggregate rate of tax imposed by section 4081 
                determined without regard to section 4081(a)(2)(D).
                    ``(B) Incentive tax rate.--The term `incentive tax 
                rate' means the aggregate rate of tax imposed by section 
                4081 determined with regard to section 4081(a)(2)(D).''.
            (2) Later separation of fuel.--Section 4081 (relating to 
        imposition of tax) is amended by inserting after subsection (b) 
        the following new subsection:

    ``(c) Later Separation of Fuel From Diesel-Water Fuel Emulsion.--If 
any person separates the taxable fuel from a diesel-water fuel emulsion 
on which tax was imposed under subsection (a) at a rate determined under 
subsection (a)(2)(D) (or with respect to which a credit or payment was 
allowed or made by reason of section 6427), such person shall be treated 
as the refiner of such taxable fuel. The amount of tax imposed on any 
removal of such fuel by such person shall be reduced by the amount of 
tax imposed (and not credited or refunded) on any prior removal or entry 
of such fuel.''.
            (3) Credit claims.--Paragraphs (1) and (2) of section 
        6427(i) are both amended by inserting ``(m),'' after ``(l),''.

    (c) Effective Date.--The <<NOTE: 26 USC 4081 note.>> amendments made 
by this section shall take effect on January 1, 2006.

SEC. 1344. EXTENSION OF EXCISE TAX PROVISIONS AND INCOME TAX CREDIT FOR 
            BIODIESEL.

    (a) In General.--Sections 40A(e), 6426(c)(6), and 6427(e)(4)(B) are 
each amended by striking ``2006'' and inserting ``2008''.
    (b) Effective Date.--The <<NOTE: 26 USC 40A note.>> amendments made 
by this section shall take effect on the date of the enactment of this 
Act.

SEC. 1345. SMALL AGRI-BIODIESEL PRODUCER CREDIT.

    (a) In General.--Subsection (a) of section 40A (relating to 
biodiesel used as a fuel) is amended to read as follows:
    ``(a) General Rule.--For purposes of section 38, the biodiesel fuels 
credit determined under this section for the taxable year is an amount 
equal to the sum of--
            ``(1) the biodiesel mixture credit, plus
            ``(2) the biodiesel credit, plus
            ``(3) in the case of an eligible small agri-biodiesel 
        producer, the small agri-biodiesel producer credit.''.

    (b) Small Agri-Biodiesel Producer Credit Defined.--Section 40A(b) 
(relating to definition of biodiesel mixture credit and

[[Page 119 STAT. 1053]]

biodiesel credit) is amended by adding at the end the following new 
paragraph:
            ``(5) Small agri-biodiesel producer credit.--
                    ``(A) In general.--The small agri-biodiesel producer 
                credit of any eligible small agri-biodiesel producer for 
                any taxable year is 10 cents for each gallon of 
                qualified agri-biodiesel production of such producer.
                    ``(B) Qualified agri-biodiesel production.--For 
                purposes of this paragraph, the term `qualified agri-
                biodiesel production' means any agri-biodiesel 
                (determined without regard to the last sentence of 
                subsection (d)(2)) which is produced by an eligible 
                small agri-biodiesel producer, and which during the 
                taxable year--
                          ``(i) is sold by such producer to another 
                      person--
                                    ``(I) for use by such other person 
                                in the production of a qualified 
                                biodiesel mixture in such other person's 
                                trade or business (other than casual 
                                off-farm production),
                                    ``(II) for use by such other person 
                                as a fuel in a trade or business, or
                                    ``(III) who sells such agri-
                                biodiesel at retail to another person 
                                and places such agri-biodiesel in the 
                                fuel tank of such other person, or
                          ``(ii) is used or sold by such producer for 
                      any purpose described in clause (i).
                    ``(C) Limitation.--The qualified agri-biodiesel 
                production of any producer for any taxable year shall 
                not exceed 15,000,000 gallons.''.

    (c) Definitions and Special Rules.--Section 40A is amended by 
redesignating subsection (e) as subsection (f) and by inserting after 
subsection (d) the following new subsection:
    ``(e) Definitions and Special Rules for Small Agri-Biodiesel 
Producer Credit.--For purposes of this section--
            ``(1) Eligible small agri-biodiesel producer.--The term 
        `eligible small agri-biodiesel producer' means a person who, at 
        all times during the taxable year, has a productive capacity for 
        agri-biodiesel not in excess of 60,000,000 gallons.
            ``(2) Aggregation rule.--For purposes of the 15,000,000 
        gallon limitation under subsection (b)(5)(C) and the 60,000,000 
        gallon limitation under paragraph (1), all members of the same 
        controlled group of corporations (within the meaning of section 
        267(f)) and all persons under common control (within the meaning 
        of section 52(b) but determined by treating an interest of more 
        than 50 percent as a controlling interest) shall be treated as 1 
        person.
            ``(3) Partnership, s <<NOTE: Applicability.>> corporation, 
        and other pass-thru entities.--In the case of a partnership, 
        trust, S corporation, or other pass-thru entity, the limitations 
        contained in subsection (b)(5)(C) and paragraph (1) shall be 
        applied at the entity level and at the partner or similar level.
            ``(4) Allocation.--For purposes of this subsection, in the 
        case of a facility in which more than 1 person has an interest, 
        productive capacity shall be allocated among such persons in 
        such manner as the Secretary may prescribe.
            ``(5) Regulations.--The Secretary may prescribe such 
        regulations as may be necessary--

[[Page 119 STAT. 1054]]

                    ``(A) to prevent the credit provided for in 
                subsection (a)(3) from directly or indirectly benefiting 
                any person with a direct or indirect productive capacity 
                of more than 60,000,000 gallons of agri-biodiesel during 
                the taxable year, or
                    ``(B) to prevent any person from directly or 
                indirectly benefiting with respect to more than 
                15,000,000 gallons during the taxable year.
            ``(6) Allocation of small agri-biodiesel credit to patrons 
        of cooperative.--
                    ``(A) Election to allocate.--
                          ``(i) In general.--In the case of a 
                      cooperative organization described in section 
                      1381(a), any portion of the credit determined 
                      under subsection (a)(3) for the taxable year may, 
                      at the election of the organization, be 
                      apportioned pro rata among patrons of the 
                      organization on the basis of the quantity or value 
                      of business done with or for such patrons for the 
                      taxable year.
                          ``(ii) Form and effect of election.--An 
                      election under clause (i) for any taxable year 
                      shall be made on a timely filed return for such 
                      year. Such election, once made, shall be 
                      irrevocable for such taxable year. Such election 
                      shall not take effect unless the organization 
                      designates the apportionment as such in a written 
                      notice mailed to its patrons during the payment 
                      period described in section 1382(d).
                    ``(B) Treatment of organizations and patrons.--
                          ``(i) Organizations.--The amount of the credit 
                      not apportioned to patrons pursuant to 
                      subparagraph (A) shall be included in the amount 
                      determined under subsection (a)(3) for the taxable 
                      year of the organization.
                          ``(ii) Patrons.--The amount of the credit 
                      apportioned to patrons pursuant to subparagraph 
                      (A) shall be included in the amount determined 
                      under such subsection for the first taxable year 
                      of each patron ending on or after the last day of 
                      the payment period (as defined in section 1382(d)) 
                      for the taxable year of the organization or, if 
                      earlier, for the taxable year of each patron 
                      ending on or after the date on which the patron 
                      receives notice from the cooperative of the 
                      apportionment.
                          ``(iii) Special rules for decrease in credits 
                      for taxable year.--If the amount of the credit of 
                      the organization determined under such subsection 
                      for a taxable year is less than the amount of such 
                      credit shown on the return of the organization for 
                      such year, an amount equal to the excess of--
                                    ``(I) such reduction, over
                                    ``(II) the amount not apportioned to 
                                such patrons under subparagraph (A) for 
                                the taxable year, shall be treated as an 
                                increase in tax imposed by this chapter 
                                on the organization. Such increase shall 
                                not be treated as tax imposed by this 
                                chapter for purposes of determining the 
                                amount of any

[[Page 119 STAT. 1055]]

                                credit under this chapter or for 
                                purposes of section 55.''.

    (d) Conforming Amendments.--
            (1) Paragraph (4) of section 40A(b) is amended by striking 
        ``this section'' and inserting ``paragraph (1) or (2) of 
        subsection (a)''.
            (2) The heading of subsection (b) of section 40A is amended 
        by striking ``and Biodiesel Credit'' and inserting ``, Biodiesel 
        Credit, and Small Agri-biodiesel Producer Credit''.
            (3) Paragraph (3) of section 40A(d) is amended by 
        redesignating subparagraph (C) as subparagraph (D) and by 
        inserting after subparagraph (B) the following new subparagraph:
                    ``(C) Producer credit.--If--
                          ``(i) any credit was determined under 
                      subsection (a)(3), and
                          ``(ii) any person does not use such fuel for a 
                      purpose described in subsection (b)(5)(B), then 
                      there is hereby imposed on such person a tax equal 
                      to 10 cents a gallon for each gallon of such agri-
                      biodiesel.''.

    (e) Effective Date.--The <<NOTE: 26 USC 40A note.>> amendments made 
by this section shall apply to taxable years ending after the date of 
the enactment of this Act.

SEC. 1346. RENEWABLE DIESEL.

    (a) In General.--Section 40A (relating to biodiesel used as fuel), 
as amended by this Act, is amended by redesignating subsection (f) as 
subsection (g) and by inserting after subsection (e) the following new 
subsection:
    ``(f) Renewable Diesel.--For purposes of this title--
            ``(1) Treatment in the same manner as biodiesel.--Except as 
        provided in paragraph (2), renewable diesel shall be treated in 
        the same manner as biodiesel.
            ``(2) Exceptions.--
                    ``(A) Rate of <<NOTE: Applicability.>> credit.--
                Subsections (b)(1)(A) and (b)(2)(A) shall be applied 
                with respect to renewable diesel by substituting `$1.00' 
                for `50 cents'.
                    ``(B) Nonapplication of certain credits.--
                Subsections (b)(3) and (b)(5) shall not apply with 
                respect to renewable diesel.
            ``(3) Renewable diesel defined.--The term `renewable diesel' 
        means diesel fuel derived from biomass (as defined in section 
        45K(c)(3)) using a thermal depolymerization process which 
        meets--
                    ``(A) the registration requirements for fuels and 
                fuel additives established by the Environmental 
                Protection Agency under section 211 of the Clean Air Act 
                (42 U.S.C. 7545), and
                    ``(B) the requirements of the American Society of 
                Testing and Materials D975 or D396.''.

    (b) Clerical Amendments.--
            (1) The heading for section 40A is amended by inserting 
        ``and renewable diesel'' after ``biodiesel''.
            (2) The item in the table of contents for subpart D of part 
        IV of subchapter A of chapter 1 relating to section 40A is 
        amended to read as follows:

``Sec. 40A. Biodiesel and renewable diesel used as fuel.''.


[[Page 119 STAT. 1056]]



    (c) Effective Date.--The <<NOTE: 26 USC 40A note.>> amendment made 
by subsection (a) shall apply with respect to fuel sold or used after 
December 31, 2005.

SEC. 1347. MODIFICATION OF SMALL ETHANOL PRODUCER CREDIT.

    (a) Definition of Small Ethanol Producer.--Section 40(g) (relating 
to definitions and special rules for eligible small ethanol producer 
credit) is amended by striking ``30,000,000'' each place it appears and 
inserting ``60,000,000''.
    (b) Written Notice of Election to Allocate Credit to Patrons.--
Section 40(g)(6)(A)(ii) (relating to form and effect of election) is 
amended by adding at the end the following new sentence: ``Such election 
shall not take effect unless the organization designates the 
apportionment as such in a written notice mailed to its patrons during 
the payment period described in section 1382(d).''.
    (c) Effective Date.--The <<NOTE: 26 USC 40 note.>> amendments made 
by this section shall apply to taxable years ending after the date of 
the enactment of this Act.

SEC. 1348. SUNSET OF DEDUCTION FOR CLEAN-FUEL VEHICLES AND CERTAIN 
            REFUELING PROPERTY.

    Subsection (f) of section 179A (relating to termination) is amended 
by striking ``December 31, 2006'' and inserting ``December 31, 2005''.

              Subtitle E--Additional Energy Tax Incentives

SEC. 1351. EXPANSION OF RESEARCH CREDIT.

    (a) Credit for Expenses Attributable to Certain Collaborative Energy 
Research Consortia.--
            (1) In general.--Section 41(a) (relating to credit for 
        increasing research activities) is amended by striking ``and'' 
        at the end of paragraph (1), by striking the period at the end 
        of paragraph (2) and inserting ``, and'', and by adding at the 
        end the following new paragraph:
            ``(3) 20 percent of the amounts paid or incurred by the 
        taxpayer in carrying on any trade or business of the taxpayer 
        during the taxable year (including as contributions) to an 
        energy research consortium.''.
            (2) Energy research consortium defined.--Section 41(f) 
        (relating to special rules) is amended by adding at the end the 
        following new paragraph:
            ``(6) Energy research consortium.--
                    ``(A) In general.--The term `energy research 
                consortium' means any organization--
                          ``(i) which is--
                                    ``(I) described in section 501(c)(3) 
                                and is exempt from tax under section 
                                501(a) and is organized and operated 
                                primarily to conduct energy research, or
                                    ``(II) organized and operated 
                                primarily to conduct energy research in 
                                the public interest (within the meaning 
                                of section 501(c)(3)),
                          ``(ii) which is not a private foundation,

[[Page 119 STAT. 1057]]

                          ``(iii) to which at least 5 unrelated persons 
                      paid or incurred during the calendar year in which 
                      the taxable year of the organization begins 
                      amounts (including as contributions) to such 
                      organization for energy research, and
                          ``(iv) to which no single person paid or 
                      incurred (including as contributions) during such 
                      calendar year an amount equal to more than 50 
                      percent of the total amounts received by such 
                      organization during such calendar year for energy 
                      research.
                    ``(B) Treatment of persons.--All persons treated as 
                a single employer under subsection (a) or (b) of section 
                52 shall be treated as related persons for purposes of 
                subparagraph (A)(iii) and as a single person for 
                purposes of subparagraph (A)(iv).''.
            (3) Conforming amendment.--Section 41(b)(3)(C) is amended by 
        inserting ``(other than an energy research consortium)'' after 
        ``organization''.

    (b) Repeal of Limitation on Contract Research Expenses Paid to Small 
Businesses, Universities, and Federal Laboratories.--Section 41(b)(3) 
(relating to contract research expenses) is amended by adding at the end 
the following new subparagraph:
                    ``(D) Amounts paid to eligible small businesses, 
                universities, and federal laboratories.--
                          ``(i) In general.--In the case of amounts paid 
                      by the taxpayer to--
                                    ``(I) an eligible small business,
                                    ``(II) an institution of higher 
                                education (as defined in section 
                                3304(f)), or
                                    ``(III) 
                                an <<NOTE: Applicability.>> organization 
                                which is a Federal laboratory,
                      for qualified research which is energy research, 
                      subparagraph (A) shall be applied by substituting 
                      `100 percent' for `65 percent'.
                          ``(ii) Eligible small business.--For purposes 
                      of this subparagraph, the term `eligible small 
                      business' means a small business with respect to 
                      which the taxpayer does not own (within the 
                      meaning of section 318) 50 percent or more of--
                                    ``(I) in the case of a corporation, 
                                the outstanding stock of the corporation 
                                (either by vote or value), and
                                    ``(II) in the case of a small 
                                business which is not a corporation, the 
                                capital and profits interests of the 
                                small business.
                          ``(iii) Small business.--For purposes of this 
                      subparagraph--
                                    ``(I) In general.--The term `small 
                                business' means, with respect to any 
                                calendar year, any person if the annual 
                                average number of employees employed by 
                                such person during either of the 2 
                                preceding calendar years was 500 or 
                                fewer. For purposes of the preceding 
                                sentence, a preceding calendar year may 
                                be taken into account only if the person 
                                was in existence throughout the year.

[[Page 119 STAT. 1058]]

                                    ``(II) Startups, controlled groups, 
                                and predecessors.--Rules similar to the 
                                rules of subparagraphs (B) and (D) of 
                                section 220(c)(4) shall apply for 
                                purposes of this clause.
                          ``(iv) Federal laboratory.--For purposes of 
                      this subparagraph, the term `Federal laboratory' 
                      has the meaning given such term by section 4(6) of 
                      the Stevenson-Wydler Technology Innovation Act of 
                      1980 (15 U.S.C. 3703(6)), as in effect on the date 
                      of the enactment of the Energy Tax Incentives Act 
                      of 2005.''.

    (c) Effective Date.--The amendments made by this section shall apply 
to amounts paid or incurred after the date of the enactment of this Act, 
in taxable years ending after such date.

SEC. 1352. <<NOTE: 26 USC 41 note.>> NATIONAL ACADEMY OF SCIENCES STUDY 
            AND REPORT.

    (a) Study.--Not <<NOTE: Contracts.>> later than 60 days after the 
date of the enactment of this Act, the Secretary of the Treasury shall 
enter into an agreement with the National Academy of Sciences under 
which the National Academy of Sciences shall conduct a study to define 
and evaluate the health, environmental, security, and infrastructure 
external costs and benefits associated with the production and 
consumption of energy that are not or may not be fully incorporated into 
the market price of such energy, or into the Federal tax or fee or other 
applicable revenue measure related to such production or consumption.

    (b) Report.--Not later than 2 years after the date on which the 
agreement under subsection (a) is entered into, the National Academy of 
Sciences shall submit to Congress a report on the study conducted under 
subsection (a).

SEC. 1353. RECYCLING STUDY.

    (a) Study.--The Secretary of the Treasury, in consultation with the 
Secretary of Energy, shall conduct a study--
            (1) to determine and quantify the energy savings achieved 
        through the recycling of glass, paper, plastic, steel, aluminum, 
        and electronic devices, and
            (2) to identify tax incentives which would encourage 
        recycling of such material.

    (b) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Secretary of the Treasury shall submit to Congress a 
report on the study conducted under subsection (a).

                 Subtitle F--Revenue Raising Provisions

SEC. 1361. OIL SPILL LIABILITY TRUST FUND FINANCING RATE.

    Section 4611(f) (relating to application of oil spill liability 
trust fund financing rate) is amended to read as follows:
    ``(f) Application of Oil Spill Liability Trust Fund Financing 
Rate.--
            ``(1) In general.--Except <<NOTE: Effective date.>> as 
        provided in paragraphs (2) and (3), the Oil Spill Liability 
        Trust Fund financing rate under subsection (c) shall apply on 
        and after April 1, 2006, or if later, the date which is 30 days 
        after the last day of any calendar quarter for which the 
        Secretary estimates that, as of the close of that quarter, the 
        unobligated balance in the Oil Spill Liability Trust Fund is 
        less than $2,000,000,000.

[[Page 119 STAT. 1059]]

            ``(2) Fund balance.--The Oil Spill Liability Trust Fund 
        financing rate shall not apply during a calendar quarter if the 
        Secretary estimates that, as of the close of the preceding 
        calendar quarter, the unobligated balance in the Oil Spill 
        Liability Trust Fund exceeds $2,700,000,000.
            ``(3) Termination.--The Oil Spill Liability Trust Fund 
        financing rate shall not apply after December 31, 2014.''.

SEC. 1362. EXTENSION OF LEAKING UNDERGROUND STORAGE TANK TRUST FUND 
            FINANCING RATE.

    (a) In General.--Paragraph (3) of section 4081(d) (relating to 
Leaking Underground Storage Tank Trust Fund financing rate) is amended 
by striking ``2005'' and inserting ``2011''.
    (b) No Exemptions From Tax Except for Exports.--
            (1) In general.--Section 4082(a) (relating to exemptions for 
        diesel fuel and kerosene) is amended by inserting ``(other than 
        such tax at the Leaking Underground Storage Tank Trust Fund 
        financing rate imposed in all cases other than for export)'' 
        after ``section 4081''.
            (2) Amendments relating to section 4041.--
                    (A) Subsections (a)(1)(B), (a)(2)(A), and (c)(2) of 
                section 4041 are each amended by inserting ``(other than 
                such tax at the Leaking Underground Storage Tank Trust 
                Fund financing rate)'' after ``section 4081''.
                    (B) Section 4041(b)(1)(A) is amended by striking 
                ``or (d)(1))''.
                    (C) Section 4041(d) is amended by adding at the end 
                the following new paragraph:
            ``(5) Nonapplication of exemptions other than for exports.--
        For purposes of this section, the tax imposed under this 
        subsection shall be determined without regard to subsections 
        (f), (g) (other than with respect to any sale for export under 
        paragraph (3) thereof), (h), and (l).''.
            (3) No refund.--
                    (A) In general.--Subchapter B of chapter 65 is 
                amended by adding at the end the following new section:

``SEC. 6430. TREATMENT OF TAX IMPOSED AT LEAKING UNDERGROUND STORAGE 
            TANK TRUST FUND FINANCING RATE.

    ``No refunds, credits, or payments shall be made under this 
subchapter for any tax imposed at the Leaking Underground Storage Tank 
Trust Fund financing rate, except in the case of fuels destined for 
export.''.
                    (B) Clerical amendment.--The table of sections for 
                subchapter B of chapter 65 is amended by adding at the 
                end the following new item:

``Sec. 6430. Treatment of tax imposed at Leaking Underground Storage 
           Tank Trust Fund financing rate.''.

    (c) Certain Refunds and Credits Not Charged to LUST Trust Fund.--
Subsection (c) of section 9508 (relating to Leaking Underground Storage 
Tank Trust Fund) is amended to read as follows:
    ``(c) Expenditures.--Amounts in the Leaking Underground Storage Tank 
Trust Fund shall be available, as provided in appropriation Acts, only 
for purposes of making expenditures to carry out section 9003(h) of the 
Solid Waste Disposal Act as in effect

[[Page 119 STAT. 1060]]

on the date of the enactment of the Superfund Amendments and 
Reauthorization Act of 1986.''.
    (d) Effective <<NOTE: 26 USC 4041 note.>> Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on October 1, 
        2005.
            (2) No exemption.--The amendments made by subsection (b) 
        shall apply to fuel entered, removed, or sold after September 
        30, 2005.

SEC. 1363. MODIFICATION OF RECAPTURE RULES FOR AMORTIZABLE SECTION 197 
            INTANGIBLES.

    (a) In General.--Subsection (b) of section 1245 (relating to gain 
from dispositions of certain depreciable property) is amended by adding 
at the end the following new paragraph:
            ``(9) Disposition of amortizable section 197 intangibles.--
                    ``(A) In general.--If a taxpayer disposes of more 
                than 1 amortizable section 197 intangible (as defined in 
                section 197(c)) in a transaction or a series of related 
                transactions, all such amortizable 197 intangibles shall 
                be treated as 1 section 1245 property for purposes of 
                this section.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                to any amortizable section 197 intangible (as so 
                defined) with respect to which the adjusted basis 
                exceeds the fair market value.''.

    (b) Effective Date.--The <<NOTE: 26 USC 1245 note.>> amendment made 
by this section shall apply to dispositions of property after the date 
of the enactment of this Act.

SEC. 1364. CLARIFICATION OF TIRE EXCISE TAX.

    (a) In General.--Section 4072(e) (defining super single tire) is 
amended by adding at the end the following: ``Such term shall not 
include any tire designed for steering.''
    (b) Effective Date.--The <<NOTE: 26 USC 4072 note.>> amendment made 
by this section shall take effect as if included in section 869 of the 
American Jobs Creation Act of 2004.

    (c) Study.--
            (1) In general.--With <<NOTE: Effective date.>> respect to 
        the 1-year period beginning on January 1, 2006, the Secretary of 
        the Treasury shall conduct a study to determine--
                    (A) the amount of tax collected during such period 
                under section 4071 of the Internal Revenue Code of 1986 
                with respect to each class of tire, and
                    (B) the number of tires in each such class on which 
                tax is imposed under such section during such period.
            (2) Report.--Not later than July 1, 2007, the Secretary of 
        the Treasury shall submit to Congress a report on the study 
        conducted under paragraph (1).

[[Page 119 STAT. 1061]]

                        TITLE XIV--MISCELLANEOUS

                         Subtitle A--In General

SEC. 1401. SENSE OF CONGRESS ON RISK ASSESSMENTS.

    Subtitle B of title XXX of the Energy Policy Act of 1992 is amended 
by adding at the end the following new section:

``SEC. 3022. <<NOTE: 42 USC 13557.>> SENSE OF CONGRESS ON RISK 
            ASSESSMENTS.

    ``It is the sense of Congress that Federal agencies conducting 
assessments of risks to human health and the environment from energy 
technology, production, transport, transmission, distribution, storage, 
use, or conservation activities shall use sound and objective scientific 
practices in assessing such risks, shall consider the best available 
science (including peer reviewed studies), and shall include a 
description of the weight of the scientific evidence concerning such 
risks.''.

SEC. 1402. <<NOTE: 42 USC 16491.>> ENERGY PRODUCTION INCENTIVES.

    (a) In General.--A State may provide to any entity--
            (1) a credit against any tax or fee owed to the State under 
        a State law, or
            (2) any other tax incentive,

determined by the State to be appropriate, in the amount calculated 
under and in accordance with a formula determined by the State, for 
production described in subsection (b) in the State by the entity that 
receives such credit or such incentive.
    (b) Eligible Entities.--Subsection 
(a) <<NOTE: Applicability.>> shall apply with respect to the production 
in the State of electricity from coal mined in the State and used in a 
facility, if such production meets all applicable Federal and State laws 
and if such facility uses scrubbers or other forms of clean coal 
technology.

    (c) Effect on Interstate Commerce.--Any action taken by a State in 
accordance with this section with respect to a tax or fee payable, or 
incentive applicable, for any period beginning after the date of the 
enactment of this Act shall--
            (1) be considered to be a reasonable regulation of commerce; 
        and
            (2) not be considered to impose an undue burden on 
        interstate commerce or to otherwise impair, restrain, or 
        discriminate, against interstate commerce.

SEC. 1403. <<NOTE: 42 USC 16492.>> REGULATION OF CERTAIN OIL USED IN 
            TRANSFORMERS.

    Notwithstanding any other provision of law, or rule promulgated by 
the Environmental Protection Agency, vegetable oil made from soybeans 
and used in electric transformers as thermal insulation shall not be 
regulated as an oil identified under section 2(a)(1)(B) of the Edible 
Oil Regulatory Reform Act (33 U.S.C. 2720(a)(1)(B)).

SEC. 1404. PETROCHEMICAL AND OIL REFINERY FACILITY HEALTH ASSESSMENT.

    (a) Establishment.--The Secretary shall conduct a study of direct 
and significant health impacts to persons resulting from living in 
proximity to petrochemical and oil refinery facilities. The Secretary 
shall consult with the Director of the National Cancer Institute and 
other Federal Government bodies with expertise in

[[Page 119 STAT. 1062]]

the field it deems appropriate in the design of such study. The study 
shall be conducted according to sound and objective scientific practices 
and present the weight of the scientific evidence. The Secretary shall 
obtain scientific peer review of the draft study.
    (b) Report to Congress.--The Secretary shall transmit the results of 
the study to Congress within 6 months of the enactment of this section.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for activities under this section such 
sums as are necessary for the completion of the study.

SEC. 1405. <<NOTE: 42 USC 16493.>> NATIONAL PRIORITY PROJECT 
            DESIGNATION.

    (a) Designation of National Priority Projects.--
            (1) In general.--There is established the National Priority 
        Project Designation (referred to in this section as the 
        ``Designation''), which shall be evidenced by a medal bearing 
        the inscription ``National Priority Project''.
            (2) Design and materials.--The medal shall be of such design 
        and materials and bear such additional inscriptions as the 
        President may prescribe.

    (b) Making <<NOTE: President.>> and Presentation of Designation.--
            (1) In general.--The President, on the basis of 
        recommendations made by the Secretary, shall annually designate 
        organizations that have--
                    (A) advanced the field of renewable energy 
                technology and contributed to North American energy 
                independence; and
                    (B) <<NOTE: Certification.>> been certified by the 
                Secretary under subsection (e).
            (2) Presentation.--The President shall designate projects 
        with such ceremonies as the President may prescribe.
            (3) Use of designation.--An organization that receives a 
        Designation under this section may publicize the Designation of 
        the organization as a National Priority Project in advertising.
            (4) Categories in which the designation may be given.--
        Separate Designations shall be made to qualifying projects in 
        each of the following categories:
                    (A) Wind and biomass energy generation projects.
                    (B) Photovoltaic and fuel cell energy generation 
                projects.
                    (C) Energy efficient building and renewable energy 
                projects.
                    (D) First-in-Class projects.

    (c) Selection Criteria.--
            (1) In general.--Certification and selection of the projects 
        to receive the Designation shall be based on criteria 
        established under this subsection.
            (2) Wind, biomass, and building projects.--In the case of a 
        wind, biomass, or building project, the project shall 
        demonstrate that the project will install not less than 30 
        megawatts of renewable energy generation capacity.
            (3) Solar photovoltaic and fuel cell projects.--In the case 
        of a solar photovoltaic or fuel cell project, the project shall 
        demonstrate that the project will install not less than 3 
        megawatts of renewable energy generation capacity.

[[Page 119 STAT. 1063]]

            (4) Energy efficient building and renewable energy 
        projects.--In the case of an energy efficient building or 
        renewable energy project, in addition to meeting the criteria 
        established under paragraph (2), each building project shall 
        demonstrate that the project will--
                    (A) comply with third-party certification standards 
                for high-performance, sustainable buildings;
                    (B) use whole-building integration of energy 
                efficiency and environmental performance design and 
                technology, including advanced building controls;
                    (C) use renewable energy for at least 50 percent of 
                the energy consumption of the project;
                    (D) comply with applicable Energy Star standards; 
                and
                    (E) include at least 5,000,000 square feet of 
                enclosed space.
            (5) First-in-class use.--Notwithstanding paragraphs (2) 
        through (4), a new building project may qualify under this 
        section if the Secretary determines that the project--
                    (A) represents a First-In-Class use of renewable 
                energy; or
                    (B) otherwise establishes a new paradigm of building 
                integrated renewable energy use or energy efficiency.

    (d) Application.--
            (1) Initial applications.--No <<NOTE: Deadline. Federal 
        Register, publication. Guidelines.>> later than 120 days after 
        the date of enactment of this Act, and annually thereafter, the 
        Secretary shall publish in the Federal Register an invitation 
        and guidelines for submitting applications, consistent with this 
        section.
            (2) Contents.--The application shall describe the project, 
        or planned project, and the plans to meet the criteria 
        established under subsection (c).

    (e) Certification.--
            (1) In general.--Not <<NOTE: Deadline.>> later than 60 days 
        after the application period described in subsection (d), and 
        annually thereafter, the Secretary shall certify projects that 
        are reasonably expected to meet the criteria established under 
        subsection (c).
            (2) Certified projects.--The Secretary shall designate 
        personnel of the Department to work with persons carrying out 
        each certified project and ensure that the personnel--
                    (A) provide each certified project with guidance in 
                meeting the criteria established under subsection (c);
                    (B) identify programs of the Department, including 
                National Laboratories and Technology Centers, that will 
                assist each project in meeting the criteria established 
                under subsection (c); and
                    (C) ensure that knowledge and transfer of the most 
                current technology between the applicable resources of 
                the Federal Government (including the National 
                Laboratories and Technology Centers, the Department, and 
                the Environmental Protection Agency) and the certified 
                projects is being facilitated to accelerate 
                commercialization of work developed through those 
                resources.

    (f) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section for 
each of fiscal years 2006 through 2010.

[[Page 119 STAT. 1064]]

SEC. 1406. COLD CRACKING.

    (a) Study.--The Secretary shall conduct a study of the application 
of radiation to petroleum at standard temperature and pressure to refine 
petroleum products, whose objective shall be to increase the economic 
yield from each barrel of oil.
    (b) Goals.--The goals of the study shall include--
            (1) increasing the value of our current oil supply;
            (2) reducing the capital investment cost for cracking oil;
            (3) reducing the operating energy cost for cracking oil; and
            (4) reducing sulfur content using an environmentally 
        responsible method.

    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $250,000 for fiscal year 2006.

SEC. 1407. <<NOTE: 42 USC 16494.>> OXYGEN-FUEL.

    (a) Program.--The Secretary shall establish a program on oxygen-fuel 
systems. If feasible, the program shall include renovation of at least 
one existing large unit and one existing small unit, and construction of 
one new large unit and one new small unit.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for carrying out this section--
            (1) $100,000,000 for fiscal year 2006;
            (2) $100,000,000 for fiscal year 2007; and
            (3) $100,000,000 for fiscal year 2008.

    (c) Definitions.--For purposes of this section--
            (1) the term ``large unit'' means a unit with a generating 
        capacity of 100 megawatts or more;
            (2) the term ``oxygen-fuel systems'' means systems that 
        utilize fuel efficiency benefits of oil, gas, coal, and biomass 
        combustion using substantially pure oxygen, with high flame 
        temperatures and the exclusion of air from the boiler, in 
        industrial or electric utility steam generating units; and
            (3) the term ``small unit'' means a unit with a generating 
        capacity in the 10-50 megawatt range.

            Subtitle B--Set <<NOTE: Set America Free Act of 
2005. Canada. Mexico.>> America Free

SEC. 1421. SHORT TITLE.

    This subtitle may be cited as the ``Set America Free Act of 2005'' 
or the ``SAFE Act''.

SEC. 1422. PURPOSE.

    The purpose of this subtitle is to establish a United States 
commission to make recommendations for a coordinated and comprehensive 
North American energy policy that will achieve energy self-sufficiency 
by 2025 within the three contiguous North American nation area of 
Canada, Mexico, and the United States.

SEC. 1423. UNITED STATES COMMISSION ON NORTH AMERICAN ENERGY FREEDOM.

    (a) Establishment.--There is hereby established the United States 
Commission on North American Energy Freedom (in this subtitle referred 
to as the ``Commission''). The Federal Advisory

[[Page 119 STAT. 1065]]

Committee Act (5 U.S.C. App.), except sections 3, 7, and 12, does not 
apply to the Commission.
    (b) <<NOTE: President.>> Membership.--
            (1) Appointment.--The Commission shall be composed of 16 
        members appointed by the President from among individuals 
        described in paragraph (2) who are knowledgeable on energy 
        issues, including oil and gas exploration and production, crude 
        oil refining, oil and gas pipelines, electricity production and 
        transmission, coal, unconventional hydrocarbon resources, fuel 
        cells, motor vehicle power systems, nuclear energy, renewable 
        energy, biofuels, energy efficiency, and energy conservation. 
        The membership of the Commission shall be balanced by area of 
        expertise to the extent consistent with maintaining the highest 
        level of expertise on the Commission. Members of the Commission 
        may be citizens of Canada, Mexico, or the United States, and the 
        President shall ensure that citizens of all three nations are 
        appointed to the Commission.
            (2) Nominations.--The <<NOTE: Deadline.>> President shall 
        appoint the members of the Commission within 60 days after the 
        effective date of this Act, including individuals nominated as 
        follows:
                    (A) Four members shall be appointed from amongst 
                individuals independently determined by the President to 
                be qualified for appointment.
                    (B) Four members shall be appointed from a list of 
                eight individuals who shall be nominated by the majority 
                leader of the Senate in consultation with the chairman 
                of the Committee on Energy and Natural Resources of the 
                Senate.
                    (C) Four members shall be appointed from a list of 
                eight individuals who shall be nominated by the Speaker 
                of the House of Representatives in consultation with the 
                chairmen of the Committees on Energy and Commerce and 
                Resources of the House of Representatives.
                    (D) Two members shall be appointed from a list of 
                four individuals who shall be nominated by the minority 
                leader of the Senate in consultation with the ranking 
                Member of the Committee on Energy and Natural Resources 
                of the Senate.
                    (E) Two members shall be appointed from a list of 
                four individuals who shall be nominated by the minority 
                leader of the House in consultation with the ranking 
                Members of the Committees on Energy and Commerce and 
                Resources of the House of Representatives.
            (3) Chairman.--The chairman of the Commission shall be 
        selected by the President. The chairman of the Commission shall 
        be responsible for--
                    (A) the assignment of duties and responsibilities 
                among staff personnel and their continuing supervision; 
                and
                    (B) the use and expenditure of funds available to 
                the Commission.
            (4) Vacancies.--Any vacancy on the Commission shall be 
        filled in the same manner as the original incumbent was 
        appointed.

    (c) Resources.--In carrying out its functions under this section, 
the Commission--
            (1) is authorized to secure directly from any Federal agency 
        or department any information it deems necessary to carry

[[Page 119 STAT. 1066]]

        out its functions under this Act, and each such agency or 
        department is authorized to cooperate with the Commission and, 
        to the extent permitted by law, to furnish such information 
        (other than information described in section 552(b)(1)(A) of 
        title 5, United States Code) to the Commission, upon the request 
        of the Commission;
            (2) may enter into contracts, subject to the availability of 
        appropriations for contracting, and employ such staff experts 
        and consultants as may be necessary to carry out the duties of 
        the Commission, as provided by section 3109 of title 5, United 
        States Code; and
            (3) <<NOTE: Establishment.>> shall establish a 
        multidisciplinary science and technical advisory panel of 
        experts in the field of energy to assist the Commission in 
        preparing its report, including ensuring that the scientific and 
        technical information considered by the Commission is based on 
        the best scientific and technical information available.

    (d) Staffing.--The chairman of the Commission may, without regard to 
the civil service laws and regulations, appoint and terminate an 
executive director and such other additional personnel as may be 
necessary for the Commission to perform its duties. The executive 
director shall be compensated at a rate not to exceed the rate payable 
for Level IV of the Executive Schedule under chapter 5136 of title 5, 
United States Code. The chairman shall select staff from among qualified 
citizens of Canada, Mexico, and the United States of America.
    (e) Meetings.--
            (1) Administration.--All meetings of the Commission shall be 
        open to the public, except that a meeting or any portion of it 
        may be closed to the public if it concerns matters or 
        information described in section 552b(c) of title 5, United 
        States Code. Interested persons shall be permitted to appear at 
        open meetings and present oral or written statements on the 
        subject matter of the meeting. The Commission may administer 
        oaths or affirmations to any person appearing before it.
            (2) Notice; minutes; public availability of documents.--
                    (A) Notice.--All open meetings of the Commission 
                shall be preceded by timely public notice in the Federal 
                Register of the time, place, and subject of the meeting.
                    (B) Minutes.--Minutes of each meeting shall be kept 
                and shall contain a record of the people present, a 
                description of the discussion that occurred, and copies 
                of all statements filed. Subject to section 552 of title 
                5, United States Code, the minutes and records of all 
                meetings and other documents that were made available to 
                or prepared for the Commission shall be available for 
                public inspection and copying at a single location in 
                the offices of the Commission.
            (3) Initial meeting.--The <<NOTE: Deadline.>> Commission 
        shall hold its first meeting within 30 days after all 16 members 
        have been appointed.

    (f) Report.--Within 12 months after the effective date of this Act, 
the Commission shall submit to Congress and the President a final report 
of its findings and recommendations regarding North American energy 
freedom.

[[Page 119 STAT. 1067]]

    (g) Administrative Procedure for Report and Review.--Chapter 5 and 
chapter 7 of title 5, United States Code, do not apply to the 
preparation, review, or submission of the report required by subsection 
(f).
    (h) Termination.--The Commission shall cease to exist 90 days after 
the date on which it submits its final report.
    (i) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this chapter a total of $10,000,000 for the 2 
fiscal-year period beginning with fiscal year 2005, such sums to remain 
available until expended.

SEC. 1424. <<NOTE: Deadline. President.>> NORTH AMERICAN ENERGY FREEDOM 
            POLICY.

    Within 90 days after receiving and considering the report and 
recommendations of the Commission under section 1423, the President 
shall submit to Congress a statement of proposals to implement or 
respond to the Commission's recommendations for a coordinated, 
comprehensive, and long-range national policy to achieve North American 
energy freedom by 2025.

                    TITLE XV--ETHANOL AND MOTOR FUELS

                     Subtitle A--General Provisions

SEC. 1501. RENEWABLE CONTENT OF GASOLINE.

    (a) In General.--Section 211 of the Clean Air Act (42 U.S.C. 7545) 
is amended--
            (1) by redesignating subsection (o) as subsection (r); and
            (2) by inserting after subsection (n) the following:

    ``(o) Renewable Fuel Program.--
            ``(1) Definitions.--In this section:
                    ``(A) Cellulosic biomass ethanol.--The term 
                `cellulosic biomass ethanol' means ethanol derived from 
                any lignocellulosic or hemicellulosic matter that is 
                available on a renewable or recurring basis, including--
                          ``(i) dedicated energy crops and trees;
                          ``(ii) wood and wood residues;
                          ``(iii) plants;
                          ``(iv) grasses;
                          ``(v) agricultural residues;
                          ``(vi) fibers;
                          ``(vii) animal wastes and other waste 
                      materials; and
                          ``(viii) municipal solid waste.
                The term also includes any ethanol produced in 
                facilities where animal wastes or other waste materials 
                are digested or otherwise used to displace 90 percent or 
                more of the fossil fuel normally used in the production 
                of ethanol.
                    ``(B) Waste derived ethanol.--The term `waste 
                derived ethanol' means ethanol derived from--
                          ``(i) animal wastes, including poultry fats 
                      and poultry wastes, and other waste materials; or
                          ``(ii) municipal solid waste.
                    ``(C) Renewable fuel.--

[[Page 119 STAT. 1068]]

                          ``(i) In general.--The term `renewable fuel' 
                      means motor vehicle fuel that--
                                    ``(I)(aa) is produced from grain, 
                                starch, oilseeds, vegetable, animal, or 
                                fish materials including fats, greases, 
                                and oils, sugarcane, sugar beets, sugar 
                                components, tobacco, potatoes, or other 
                                biomass; or
                                    ``(bb) is natural gas produced from 
                                a biogas source, including a landfill, 
                                sewage waste treatment plant, feedlot, 
                                or other place where decaying organic 
                                material is found; and
                                    ``(II) is used to replace or reduce 
                                the quantity of fossil fuel present in a 
                                fuel mixture used to operate a motor 
                                vehicle.
                          ``(ii) Inclusion.--The term `renewable fuel' 
                      includes--
                                    ``(I) cellulosic biomass ethanol and 
                                `waste derived ethanol'; and
                                    ``(II) biodiesel (as defined in 
                                section 312(f) of the Energy Policy Act 
                                of 1992 (42 U.S.C. 13220(f))) and any 
                                blending components derived from 
                                renewable fuel (provided that only the 
                                renewable fuel portion of any such 
                                blending component shall be considered 
                                part of the applicable volume under the 
                                renewable fuel program established by 
                                this subsection).
                    ``(D) Small refinery.--The term `small refinery' 
                means a refinery for which the average aggregate daily 
                crude oil throughput for a calendar year (as determined 
                by dividing the aggregate throughput for the calendar 
                year by the number of days in the calendar year) does 
                not exceed 75,000 barrels.
            ``(2) Renewable fuel program.--
                    ``(A) Regulations.--
                          ``(i) In general.--
                      Not <<NOTE: Deadline.>> later than 1 year after 
                      the date of enactment of this paragraph, the 
                      Administrator shall promulgate regulations to 
                      ensure that gasoline sold or introduced into 
                      commerce in the United States (except in 
                      noncontiguous States or territories), on an annual 
                      average basis, contains the applicable volume of 
                      renewable fuel determined in accordance with 
                      subparagraph (B).
                          ``(ii) Noncontiguous state opt-in.--
                                    ``(I) In general.--On the petition 
                                of a noncontiguous State or territory, 
                                the Administrator may allow the 
                                renewable fuel program established under 
                                this subsection to apply in the 
                                noncontiguous State or territory at the 
                                same time or any time after the 
                                Administrator promulgates regulations 
                                under this subparagraph.
                                    ``(II) Other actions.--In carrying 
                                out this clause, the Administrator may--
                                            ``(aa) issue or revise 
                                        regulations under this 
                                        paragraph;
                                            ``(bb) establish applicable 
                                        percentages under paragraph (3);

[[Page 119 STAT. 1069]]

                                            ``(cc) provide for the 
                                        generation of credits under 
                                        paragraph (5); and
                                            ``(dd) take such other 
                                        actions as are necessary to 
                                        allow for the application of the 
                                        renewable fuels program in a 
                                        noncontiguous State or 
                                        territory.
                          ``(iii) Provisions of regulations.--Regardless 
                      of the date of promulgation, the regulations 
                      promulgated under clause (i)--
                                    ``(I) shall contain compliance 
                                provisions applicable to refineries, 
                                blenders, distributors, and importers, 
                                as appropriate, to ensure that the 
                                requirements of this paragraph are met; 
                                but
                                    ``(II) shall not--
                                            ``(aa) restrict geographic 
                                        areas in which renewable fuel 
                                        may be used; or
                                            ``(bb) impose any per-gallon 
                                        obligation for the use of 
                                        renewable fuel.
                          ``(iv) Requirement in case of failure to 
                      promulgate regulations.--If the Administrator does 
                      not promulgate regulations under clause (i), the 
                      percentage of renewable fuel in gasoline sold or 
                      dispensed to consumers in the United States, on a 
                      volume basis, shall be 2.78 percent for calendar 
                      year 2006.
                    ``(B) Applicable volume.--
                          ``(i) Calendar years 2006 through 2012.--For 
                      the purpose of subparagraph (A), the applicable 
                      volume for any of calendar years 2006 through 2012 
                      shall be determined in accordance with the 
                      following table:

                              Applicable volume of renewable fuel.......
                ``Calendar yea(in billions of gallons):.................
                2006                                                 4.0
                2007                                                 4.7
                2008                                                 5.4
                2009                                                 6.1
                2010                                                 6.8
                2011                                                 7.4
                2012                                                7.5.

                          ``(ii) Calendar year 2013 and thereafter.--
                      Subject to clauses (iii) and (iv), for the 
                      purposes of subparagraph (A), the applicable 
                      volume for calendar year 2013 and each calendar 
                      year thereafter shall be determined by the 
                      Administrator, in coordination with the Secretary 
                      of Agriculture and the Secretary of Energy, based 
                      on a review of the implementation of the program 
                      during calendar years 2006 through 2012, including 
                      a review of--
                                    ``(I) the impact of the use of 
                                renewable fuels on the environment, air 
                                quality, energy security, job creation, 
                                and rural economic development; and
                                    ``(II) the expected annual rate of 
                                future production of renewable fuels, 
                                including cellulosic ethanol.

[[Page 119 STAT. 1070]]

                          ``(iii) Minimum quantity derived from 
                      cellulosic biomass.--For calendar year 2013 and 
                      each calendar year thereafter--
                                    ``(I) the applicable volume referred 
                                to in clause (ii) shall contain a 
                                minimum of 250,000,000 gallons that are 
                                derived from cellulosic biomass; and
                                    ``(II) the 2.5-to-1 ratio referred 
                                to in paragraph (4) shall not apply.
                          ``(iv) Minimum applicable volume.--For the 
                      purpose of subparagraph (A), the applicable volume 
                      for calendar year 2013 and each calendar year 
                      thereafter shall be equal to the product obtained 
                      by multiplying--
                                    ``(I) the number of gallons of 
                                gasoline that the Administrator 
                                estimates will be sold or introduced 
                                into commerce in the calendar year; and
                                    ``(II) the ratio that--
                                            ``(aa) 7,500,000,000 gallons 
                                        of renewable fuel; bears to
                                            ``(bb) the number of gallons 
                                        of gasoline sold or introduced 
                                        into commerce in calendar year 
                                        2012.
            ``(3) Applicable <<NOTE: Deadlines.>> percentages.--
                    ``(A) Provision of estimate of volumes of gasoline 
                sales.--Not later than October 31 of each of calendar 
                years 2005 through 2011, the Administrator of the Energy 
                Information Administration shall provide to the 
                Administrator of the Environmental Protection Agency an 
                estimate, with respect to the following calendar year, 
                of the volumes of gasoline projected to be sold or 
                introduced into commerce in the United States.
                    ``(B) Determination of applicable percentages.--
                          ``(i) In general.--Not later than November 30 
                      of each of calendar years 2005 through 2012, based 
                      on the estimate provided under subparagraph (A), 
                      the Administrator of the Environmental Protection 
                      Agency shall determine and publish in the Federal 
                      Register, with respect to the following calendar 
                      year, the renewable fuel obligation that ensures 
                      that the requirements of paragraph (2) are met.
                          ``(ii) Required elements.--The renewable fuel 
                      obligation determined for a calendar year under 
                      clause (i) shall--
                                    ``(I) be applicable to refineries, 
                                blenders, and importers, as appropriate;
                                    ``(II) be expressed in terms of a 
                                volume percentage of gasoline sold or 
                                introduced into commerce in the United 
                                States; and
                                    ``(III) subject to subparagraph 
                                (C)(i), consist of a single applicable 
                                percentage that applies to all 
                                categories of persons specified in 
                                subclause (I).
                    ``(C) Adjustments.--In determining the applicable 
                percentage for a calendar year, the Administrator shall 
                make adjustments--
                          ``(i) to prevent the imposition of redundant 
                      obligations on any person specified in 
                      subparagraph (B)(ii)(I); and

[[Page 119 STAT. 1071]]

                          ``(ii) to account for the use of renewable 
                      fuel during the previous calendar year by small 
                      refineries that are exempt under paragraph (9).
            ``(4) Cellulosic biomass ethanol or waste derived ethanol.--
        For the purpose of paragraph (2), 1 gallon of cellulosic biomass 
        ethanol or waste derived ethanol shall be considered to be the 
        equivalent of 2.5 gallons of renewable fuel.
            ``(5) Credit program.--
                    ``(A) In general.--The regulations promulgated under 
                paragraph (2)(A) shall provide--
                          ``(i) for the generation of an appropriate 
                      amount of credits by any person that refines, 
                      blends, or imports gasoline that contains a 
                      quantity of renewable fuel that is greater than 
                      the quantity required under paragraph (2);
                          ``(ii) for the generation of an appropriate 
                      amount of credits for biodiesel; and
                          ``(iii) for the generation of credits by small 
                      refineries in accordance with paragraph (9)(C).
                    ``(B) Use of credits.--A person that generates 
                credits under subparagraph (A) may use the credits, or 
                transfer all or a portion of the credits to another 
                person, for the purpose of complying with paragraph (2).
                    ``(C) Duration of credits.--A credit generated under 
                this paragraph shall be valid to show compliance for the 
                12 months as of the date of generation.
                    ``(D) Inability to generate or purchase sufficient 
                credits.--The regulations promulgated under paragraph 
                (2)(A) shall include provisions allowing any person that 
                is unable to generate or purchase sufficient credits to 
                meet the requirements of paragraph (2) to carry forward 
                a renewable fuel deficit on condition that the person, 
                in the calendar year following the year in which the 
                renewable fuel deficit is created--
                          ``(i) achieves compliance with the renewable 
                      fuel requirement under paragraph (2); and
                          ``(ii) generates or purchases additional 
                      renewable fuel credits to offset the renewable 
                      fuel deficit of the previous year.
            ``(6) Seasonal variations in renewable fuel use.--
                    ``(A) Study.--For each of calendar years 2006 
                through 2012, the Administrator of the Energy 
                Information Administration shall conduct a study of 
                renewable fuel blending to determine whether there are 
                excessive seasonal variations in the use of renewable 
                fuel.
                    ``(B) Regulation of excessive seasonal variations.--
                If, for any calendar year, the Administrator of the 
                Energy Information Administration, based on the study 
                under subparagraph (A), makes the determinations 
                specified in subparagraph (C), the Administrator of the 
                Environmental Protection Agency shall promulgate 
                regulations to ensure that 25 percent or more of the 
                quantity of renewable fuel necessary to meet the 
                requirements of paragraph (2) is used during each of the 
                2 periods specified in subparagraph (D) of each 
                subsequent calendar year.
                    ``(C) Determinations.--The determinations referred 
                to in subparagraph (B) are that--

[[Page 119 STAT. 1072]]

                          ``(i) less than 25 percent of the quantity of 
                      renewable fuel necessary to meet the requirements 
                      of paragraph (2) has been used during 1 of the 2 
                      periods specified in subparagraph (D) of the 
                      calendar year;
                          ``(ii) a pattern of excessive seasonal 
                      variation described in clause (i) will continue in 
                      subsequent calendar years; and
                          ``(iii) promulgating regulations or other 
                      requirements to impose a 25 percent or more 
                      seasonal use of renewable fuels will not prevent 
                      or interfere with the attainment of national 
                      ambient air quality standards or significantly 
                      increase the price of motor fuels to the consumer.
                    ``(D) Periods.--The 2 periods referred to in this 
                paragraph are--
                          ``(i) April through September; and
                          ``(ii) January through March and October 
                      through December.
                    ``(E) Exclusion.--Renewable fuel blended or consumed 
                in calendar year 2006 in a State that has received a 
                waiver under section 209(b) shall not be included in the 
                study under subparagraph (A).
                    ``(F) State exemption from seasonality 
                requirements.--Notwithstanding any other provision of 
                law, the seasonality requirement relating to renewable 
                fuel use established by this paragraph shall not apply 
                to any State that has received a waiver under section 
                209(b) or any State dependent on refineries in such 
                State for gasoline supplies.
            ``(7) Waivers.--
                    ``(A) In general.--The Administrator, in 
                consultation with the Secretary of Agriculture and the 
                Secretary of Energy, may waive the requirements of 
                paragraph (2) in whole or in part on petition by one or 
                more States by reducing the national quantity of 
                renewable fuel required under paragraph (2)--
                          ``(i) based on a determination by the 
                      Administrator, after public notice and opportunity 
                      for comment, that implementation of the 
                      requirement would severely harm the economy or 
                      environment of a State, a region, or the United 
                      States; or
                          ``(ii) based on a determination by the 
                      Administrator, after public notice and opportunity 
                      for comment, that there is an inadequate domestic 
                      supply.
                    ``(B) Petitions for waivers.--
                The <<NOTE: Deadline.>> Administrator, in consultation 
                with the Secretary of Agriculture and the Secretary of 
                Energy, shall approve or disapprove a State petition for 
                a waiver of the requirements of paragraph (2) within 90 
                days after the date on which the petition is received by 
                the Administrator.
                    ``(C) Termination of waivers.--A waiver granted 
                under subparagraph (A) shall terminate after 1 year, but 
                may be renewed by the Administrator after consultation 
                with the Secretary of Agriculture and the Secretary of 
                Energy.
            ``(8) Study and waiver for initial year of program.--

[[Page 119 STAT. 1073]]

                    ``(A) In general.--Not <<NOTE: Deadline.>> later 
                than 180 days after the date of enactment of this 
                paragraph, the Secretary of Energy shall conduct for the 
                Administrator a study assessing whether the renewable 
                fuel requirement under paragraph (2) will likely result 
                in significant adverse impacts on consumers in 2006, on 
                a national, regional, or State basis.
                    ``(B) Required evaluations.--The study shall 
                evaluate renewable fuel--
                          ``(i) supplies and prices;
                          ``(ii) blendstock supplies; and
                          ``(iii) supply and distribution system 
                      capabilities.
                    ``(C) Recommendations by the secretary.--Based on 
                the results of the study, the Secretary of Energy shall 
                make specific recommendations to the Administrator 
                concerning waiver of the requirements of paragraph (2), 
                in whole or in part, to prevent any adverse impacts 
                described in subparagraph (A).
                    ``(D) Waiver.--
                          ``(i) In general.--
                      Not <<NOTE: Deadline.>> later than 270 days after 
                      the date of enactment of this paragraph, the 
                      Administrator shall, if and to the extent 
                      recommended by the Secretary of Energy under 
                      subparagraph (C), waive, in whole or in part, the 
                      renewable fuel requirement under paragraph (2) by 
                      reducing the national quantity of renewable fuel 
                      required under paragraph (2) in calendar year 
                      2006.
                          ``(ii) No effect on waiver authority.--Clause 
                      (i) does not limit the authority of the 
                      Administrator to waive the requirements of 
                      paragraph (2) in whole, or in part, under 
                      paragraph (7).
            ``(9) Small refineries.--
                    ``(A) Temporary exemption.--
                          ``(i) In general.--The requirements of 
                      paragraph (2) shall not apply to small refineries 
                      until calendar year 2011.
                          ``(ii) Extension of exemption.--
                                    ``(I) <<NOTE: Deadline.>> Study by 
                                secretary of energy.--Not later than 
                                December 31, 2008, the Secretary of 
                                Energy shall conduct for the 
                                Administrator a study to determine 
                                whether compliance with the requirements 
                                of paragraph (2) would impose a 
                                disproportionate economic hardship on 
                                small refineries.
                                    ``(II) Extension of exemption.--In 
                                the case of a small refinery that the 
                                Secretary of Energy determines under 
                                subclause (I) would be subject to a 
                                disproportionate economic hardship if 
                                required to comply with paragraph (2), 
                                the Administrator shall extend the 
                                exemption under clause (i) for the small 
                                refinery for a period of not less than 2 
                                additional years.
                    ``(B) Petitions based on disproportionate economic 
                hardship.--
                          ``(i) Extension of exemption.--A small 
                      refinery may at any time petition the 
                      Administrator for an extension of the exemption 
                      under subparagraph (A) for the reason of 
                      disproportionate economic hardship.

[[Page 119 STAT. 1074]]

                          ``(ii) Evaluation of petitions.--In evaluating 
                      a petition under clause (i), the Administrator, in 
                      consultation with the Secretary of Energy, shall 
                      consider the findings of the study under 
                      subparagraph (A)(ii) and other economic factors.
                          ``(iii) Deadline for action on petitions.--The 
                      Administrator shall act on any petition submitted 
                      by a small refinery for a hardship exemption not 
                      later than 90 days after the date of receipt of 
                      the petition.
                    ``(C) Credit program.--If a small refinery notifies 
                the Administrator that the small refinery waives the 
                exemption under subparagraph (A), the regulations 
                promulgated under paragraph (2)(A) shall provide for the 
                generation of credits by the small refinery under 
                paragraph (5) beginning in the calendar year following 
                the date of notification.
                    ``(D) Opt-in for small refineries.--A small refinery 
                shall be subject to the requirements of paragraph (2) if 
                the small refinery notifies the Administrator that the 
                small refinery waives the exemption under subparagraph 
                (A).
            ``(10) Ethanol market concentration analysis.--
                    ``(A) Analysis.--
                          ``(i) In general.--
                      Not <<NOTE: Deadline.>> later than 180 days after 
                      the date of enactment of this paragraph, and 
                      annually thereafter, the Federal Trade Commission 
                      shall perform a market concentration analysis of 
                      the ethanol production industry using the 
                      Herfindahl-Hirschman Index to determine whether 
                      there is sufficient competition among industry 
                      participants to avoid price-setting and other 
                      anticompetitive behavior.
                          ``(ii) Scoring.--For the purpose of scoring 
                      under clause (i) using the Herfindahl-Hirschman 
                      Index, all marketing arrangements among industry 
                      participants shall be considered.
                    ``(B) Report.--Not later than December 1, 2005, and 
                annually thereafter, the Federal Trade Commission shall 
                submit to Congress and the Administrator a report on the 
                results of the market concentration analysis performed 
                under subparagraph (A)(i).''.

    (b) Penalties and Enforcement.--Section 211(d) of the Clean Air Act 
(42 U.S.C. 7545(d)) is amended--
            (1) in paragraph (1)--
                    (A) in the first sentence, by striking ``or (n)'' 
                each place it appears and inserting ``(n), or (o)''; and
                    (B) in the second sentence, by striking ``or (m)'' 
                and inserting ``(m), or (o)''; and
            (2) in the first sentence of paragraph (2), by striking 
        ``and (n)'' each place it appears and inserting ``(n), and 
        (o)''.

    (c) Exclusion From Ethanol Waiver.--Section 211(h) of the Clean Air 
Act (42 U.S.C. 7545(h)) is amended--
            (1) by redesignating paragraph (5) as paragraph (6); and
            (2) by inserting after paragraph (4) the following:
            ``(5) Exclusion from ethanol waiver.--
                    ``(A) Promulgation 
                of <<NOTE: Notification.>> regulations.--Upon 
                notification, accompanied by supporting documentation, 
                from the Governor of a State that the Reid vapor 
                pressure limitation established by paragraph (4) will 
                increase emissions that contribute to air pollution in 
                any area in the State, the

[[Page 119 STAT. 1075]]

                Administrator shall, by regulation, apply, in lieu of 
                the Reid vapor pressure limitation established by 
                paragraph (4), the Reid vapor pressure limitation 
                established by paragraph (1) to all fuel blends 
                containing gasoline and 10 percent denatured anhydrous 
                ethanol that are sold, offered for sale, dispensed, 
                supplied, offered for supply, transported, or introduced 
                into commerce in the area during the high ozone season.
                    ``(B) Deadline for promulgation.--The Administrator 
                shall promulgate regulations under subparagraph (A) not 
                later than 90 days after the date of receipt of a 
                notification from a Governor under that subparagraph.
                    ``(C) Effective date.--
                          ``(i) In general.--With respect to an area in 
                      a State for which the Governor submits a 
                      notification under subparagraph (A), the 
                      regulations under that subparagraph shall take 
                      effect on the later of--
                                    ``(I) the first day of the first 
                                high ozone season for the area that 
                                begins after the date of receipt of the 
                                notification; or
                                    ``(II) 1 year after the date of 
                                receipt of the notification.
                          ``(ii) Extension of effective date based on 
                      determination of insufficient supply.--
                                    ``(I) In general.--
                                If, <<NOTE: Regulations.>> after receipt 
                                of a notification with respect to an 
                                area from a Governor of a State under 
                                subparagraph (A), the Administrator 
                                determines, on the Administrator's own 
                                motion or on petition of any person and 
                                after consultation with the Secretary of 
                                Energy, that the promulgation of 
                                regulations described in subparagraph 
                                (A) would result in an insufficient 
                                supply of gasoline in the State, the 
                                Administrator, by regulation--
                                            ``(aa) shall extend the 
                                        effective date of the 
                                        regulations under clause (i) 
                                        with respect to the area for not 
                                        more than 1 year; and
                                            ``(bb) may renew the 
                                        extension under item (aa) for 
                                        two additional periods, each of 
                                        which shall not exceed 1 year.
                                    ``(II) Deadline for action on 
                                petitions.--The Administrator shall act 
                                on any petition submitted under 
                                subclause (I) not later than 180 days 
                                after the date of receipt of the 
                                petition.''.

    (d) Survey <<NOTE: 47 USC 7545 note.>> of Renewable Fuel Market.--
            (1) Survey and report.--Not later than December 1, 2006, and 
        annually thereafter, the Administrator of the Environmental 
        Protection Agency (in consultation with the Secretary acting 
        through the Administrator of the Energy Information 
        Administration) shall--
                    (A) conduct, with respect to each conventional 
                gasoline use area and each reformulated gasoline use 
                area in each State, a survey to determine the market 
                shares of--
                          (i) conventional gasoline containing ethanol;
                          (ii) reformulated gasoline containing ethanol;
                          (iii) conventional gasoline containing 
                      renewable fuel; and

[[Page 119 STAT. 1076]]

                          (iv) reformulated gasoline containing 
                      renewable fuel; and
                    (B) submit to Congress, and make publicly available, 
                a report on the results of the survey under subparagraph 
                (A).
            (2) Recordkeeping and reporting requirements.--The 
        Administrator of the Environmental Protection Agency 
        (hereinafter in this subsection referred to as the 
        ``Administrator'') may require any refiner, blender, or importer 
        to keep such records and make such reports as are necessary to 
        ensure that the survey conducted under paragraph (1) is 
        accurate. The Administrator, to avoid duplicative requirements, 
        shall rely, to the extent practicable, on existing reporting and 
        recordkeeping requirements and other information available to 
        the Administrator including gasoline distribution patterns that 
        include multistate use areas.
            (3) Applicable law.--Activities carried out under this 
        subsection shall be conducted in a manner designed to protect 
        confidentiality of individual responses.

SEC. 1502. <<NOTE: 42 USC 7545 note.>> FINDINGS.

    Congress finds that--
            (1) since 1979, methyl tertiary butyl ether (hereinafter in 
        this section referred to as ``MTBE'') has been used nationwide 
        at low levels in gasoline to replace lead as an octane booster 
        or anti-knocking agent;
            (2) Public Law 101-549 (commonly known as the ``Clean Air 
        Act Amendments of 1990'') (42 U.S.C. 7401 et seq.) established a 
        fuel oxygenate standard under which reformulated gasoline must 
        contain at least 2 percent oxygen by weight; and
            (3) the fuel industry responded to the fuel oxygenate 
        standard established by Public Law 101-549 by making substantial 
        investments in--
                    (A) MTBE production capacity; and
                    (B) systems to deliver MTBE-containing gasoline to 
                the marketplace.

SEC. 1503. <<NOTE: 42 USC 7545 note.>> CLAIMS FILED AFTER ENACTMENT.

    Claims and legal actions filed after the date of enactment of this 
Act related to allegations involving actual or threatened contamination 
of methyl tertiary butyl ether (MTBE) may be removed to the appropriate 
United States district court.

SEC. 1504. ELIMINATION OF OXYGEN CONTENT REQUIREMENT FOR REFORMULATED 
            GASOLINE.

    (a) Elimination.--
            (1) In general.--Section 211(k) of the Clean Air Act (42 
        U.S.C. 7545(k)) is amended--
                    (A) in paragraph (2)--
                          (i) in the second sentence of subparagraph 
                      (A), by striking ``(including the oxygen content 
                      requirement contained in subparagraph (B))'';
                          (ii) by striking subparagraph (B); and
                          (iii) by redesignating subparagraphs (C) and 
                      (D) as subparagraphs (B) and (C), respectively;
                    (B) in paragraph (3)(A), by striking clause (v); and
                    (C) in paragraph (7)--

[[Page 119 STAT. 1077]]

                          (i) in subparagraph (A)--
                                    (I) by striking clause (i); and
                                    (II) by redesignating clauses (ii) 
                                and (iii) as clauses (i) and (ii), 
                                respectively; and
                          (ii) in subparagraph (C)--
                                    (I) by striking clause (ii); and
                                    (II) by redesignating clause (iii) 
                                as clause (ii).
            (2) Applicability.--The <<NOTE: Effective dates. 42 USC 7545 
        note.>> amendments made by paragraph (1) apply--
                    (A) in the case of a State that has received a 
                waiver under section 209(b) of the Clean Air Act (42 
                U.S.C. 7543(b)), beginning on the date of enactment of 
                this Act; and
                    (B) in the case of any other State, beginning 270 
                days after the date of enactment of this Act.

    (b) Maintenance of Toxic Air Pollutant Emission Reductions.--Section 
211(k)(1) of the Clean Air Act (42 U.S.C. 7545(k)(1)) is amended--
            (1) by striking ``Within 1 year after the enactment of the 
        Clean Air Act Amendments of 1990,'' and inserting the following:
                    ``(A) In general.--Not <<NOTE: Deadline.>> later 
                than November 15, 1991,''; and
            (2) by adding at the end the following:
                    ``(B) Maintenance of toxic air pollutant emissions 
                reductions from reformulated gasoline.--
                          ``(i) Definition of padd.--In this 
                      subparagraph the term `PADD' means a Petroleum 
                      Administration for Defense District.
                          ``(ii) 
                      Regulations <<NOTE: Deadline.>> concerning 
                      emissions of toxic air pollutants.--Not later than 
                      270 days after the date of enactment of this 
                      subparagraph, the Administrator shall establish by 
                      regulation, for each refinery or importer (other 
                      than a refiner or importer in a State that has 
                      received a waiver under section 209(b) with 
                      respect to gasoline produced for use in that 
                      State), standards for toxic air pollutants from 
                      use of the reformulated gasoline produced or 
                      distributed by the refiner or importer that 
                      maintain the reduction of the average annual 
                      aggregate emissions of toxic air pollutants for 
                      reformulated gasoline produced or distributed by 
                      the refiner or importer during calendar years 2001 
                      and 2002 (as determined on the basis of data 
                      collected by the Administrator with respect to the 
                      refiner or importer).
                          ``(iii) Standards applicable to specific 
                      refineries or importers.--
                                    ``(I) Applicability of standards.--
                                For any calendar year, the standards 
                                applicable to a refiner or importer 
                                under clause (ii) shall apply to the 
                                quantity of gasoline produced or 
                                distributed by the refiner or importer 
                                in the calendar year only to the extent 
                                that the quantity is less than or equal 
                                to the average annual quantity of 
                                reformulated gasoline produced or 
                                distributed by the refiner or importer 
                                during calendar years 2001 and 2002.

[[Page 119 STAT. 1078]]

                                    ``(II) Applicability of other 
                                standards.--For any calendar year, the 
                                quantity of gasoline produced or 
                                distributed by a refiner or importer 
                                that is in excess of the quantity 
                                subject to subclause (I) shall be 
                                subject to standards for emissions of 
                                toxic air pollutants promulgated under 
                                subparagraph (A) and paragraph (3)(B).
                          ``(iv) Credit program.--The Administrator 
                      shall provide for the granting and use of credits 
                      for emissions of toxic air pollutants in the same 
                      manner as provided in paragraph (7).
                          ``(v) Regional protection of toxics reduction 
                      baselines.--
                                    ``(I) In general.--
                                Not <<NOTE: Deadlines. Federal 
                                Register, publication. Reports.>> later 
                                than 60 days after the date of enactment 
                                of this subparagraph, and not later than 
                                April 1 of each calendar year that 
                                begins after that date of enactment, the 
                                Administrator shall publish in the 
                                Federal Register a report that 
                                specifies, with respect to the previous 
                                calendar year--
                                            ``(aa) the quantity of 
                                        reformulated gasoline produced 
                                        that is in excess of the average 
                                        annual quantity of reformulated 
                                        gasoline produced in 2001 and 
                                        2002; and
                                            ``(bb) the reduction of the 
                                        average annual aggregate 
                                        emissions of toxic air 
                                        pollutants in each PADD, based 
                                        on retail survey data or data 
                                        from other appropriate sources.
                                    ``(II) Effect of failure to maintain 
                                aggregate toxics reductions.--If, in any 
                                calendar year, the reduction of the 
                                average annual aggregate emissions of 
                                toxic air pollutants in a PADD fails to 
                                meet or exceed the reduction of the 
                                average annual aggregate emissions of 
                                toxic air pollutants in the PADD in 
                                calendar years 2001 and 2002, the 
                                Administrator, not later than 90 days 
                                after the date of publication of the 
                                report for the calendar year under 
                                subclause (I), shall--
                                            ``(aa) identify, to the 
                                        maximum extent practicable, the 
                                        reasons for the failure, 
                                        including the sources, volumes, 
                                        and characteristics of 
                                        reformulated gasoline that 
                                        contributed to the failure; and
                                            ``(bb) <<NOTE: Effective 
                                        dates. Regulations.>> promulgate 
                                        revisions to the regulations 
                                        promulgated under clause (ii), 
                                        to take effect not earlier than 
                                        180 days but not later than 270 
                                        days after the date of 
                                        promulgation, to provide that, 
                                        notwithstanding clause 
                                        (iii)(II), all reformulated 
                                        gasoline produced or distributed 
                                        at each refiner or importer 
                                        shall meet the standards 
                                        applicable under clause (iii)(I) 
                                        beginning not later than April 1 
                                        of the calendar year following 
                                        publication of the report under 
                                        subclause (I) and in each 
                                        calendar year thereafter.
                          ``(vi) <<NOTE: Deadline. Regulations.>> Not 
                      later than July 1, 2007, the Administrator shall 
                      promulgate final regulations to control hazardous

[[Page 119 STAT. 1079]]

                      air pollutants from motor vehicles and motor 
                      vehicle fuels, as provided for in section 80.1045 
                      of title 40, Code of Federal Regulations (as in 
                      effect on the date of enactment of this 
                      subparagraph), and as authorized under section 
                      202(1) of the Clean Air Act. If the Administrator 
                      promulgates by such date, final regulations to 
                      control hazardous air pollutants from motor 
                      vehicles and motor vehicle fuels that achieve and 
                      maintain greater overall reductions in emissions 
                      of air toxics from reformulated gasoline than the 
                      reductions that would be achieved under section 
                      211(k)(1)(B) of the Clean Air Act as amended by 
                      this clause, then sections 211(k)(1)(B)(i) through 
                      211(k)(1)(B)(v) shall be null and void and 
                      regulations promulgated thereunder shall be 
                      rescinded and have no further effect.''.

    (c) Consolidation in <<NOTE: Deadline.>> Reformulated Gasoline 
Regulations.--Not later than 180 days after the date of enactment of 
this Act, the Administrator of the Environmental Protection Agency shall 
revise the reformulated gasoline regulations under subpart D of part 80 
of title 40, Code of Federal Regulations, to consolidate the regulations 
applicable to VOC-Control Regions 1 and 2 under section 80.41 of that 
title by eliminating the less stringent requirements applicable to 
gasoline designated for VOC-Control Region 2 and instead applying the 
more stringent requirements applicable to gasoline designated for VOC-
Control Region 1.

    (d) Savings <<NOTE: 42 USC 7545 note.>> Clause.--
            (1) In general.--Nothing in this section or any amendment 
        made by this section affects or prejudices any legal claim or 
        action with respect to regulations promulgated by the 
        Administrator before the date of enactment of this Act 
        regarding--
                    (A) emissions of toxic air pollutants from motor 
                vehicles; or
                    (B) the adjustment of standards applicable to a 
                specific refinery or importer made under those 
                regulations.
            (2) Adjustment of standards.--
                    (A) Applicability.--The Administrator may apply any 
                adjustments to the standards applicable to a refinery or 
                importer under subparagraph (B)(iii)(I) of section 
                211(k)(1) of the Clean Air Act (as added by subsection 
                (b)(2)), except that--
                          (i) the Administrator shall revise the 
                      adjustments to be based only on calendar years 
                      1999 and 2000;
                          (ii) any such adjustment shall not be made at 
                      a level below the average percentage of reductions 
                      of emissions of toxic air pollutants for 
                      reformulated gasoline supplied to PADD I during 
                      calendar years 1999 and 2000; and
                          (iii) in the case of an adjustment based on 
                      toxic air pollutant emissions from reformulated 
                      gasoline significantly below the national annual 
                      average emissions of toxic air pollutants from all 
                      reformulated gasoline--
                                    (I) the Administrator may revise the 
                                adjustment to take account of the scope 
                                of the prohibition on methyl tertiary 
                                butyl ether imposed by a State; and

[[Page 119 STAT. 1080]]

                                    (II) any such adjustment shall 
                                require the refiner or importer, to the 
                                maximum extent practicable, to maintain 
                                the reduction achieved during calendar 
                                years 1999 and 2000 in the average 
                                annual aggregate emissions of toxic air 
                                pollutants from reformulated gasoline 
                                produced or distributed by the refiner 
                                or importer.

SEC. 1505. PUBLIC HEALTH AND ENVIRONMENTAL IMPACTS OF FUELS AND FUEL 
            ADDITIVES.

    Section 211(b) of the Clean Air Act (42 U.S.C. 7545(b)) is amended--
            (1) in paragraph (2)--
                    (A) by striking ``may also'' and inserting ``shall, 
                on a regular basis,''; and
                    (B) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) to conduct tests to determine potential public 
                health and environmental effects of the fuel or additive 
                (including carcinogenic, teratogenic, or mutagenic 
                effects); and''; and
            (2) by adding at the end the following:
            ``(4) Study on certain fuel additives and blendstocks.--
                    ``(A) In general.--Not <<NOTE: Deadline.>> later 
                than 2 years after the date of enactment of this 
                paragraph, the Administrator shall--
                          ``(i) conduct a study on the effects on public 
                      health (including the effects on children, 
                      pregnant women, minority or low-income 
                      communities, and other sensitive populations), air 
                      quality, and water resources of increased use of, 
                      and the feasibility of using as substitutes for 
                      methyl tertiary butyl ether in gasoline--
                                    ``(I) ethyl tertiary butyl ether;
                                    ``(II) tertiary amyl methyl ether;
                                    ``(III) di-isopropyl ether;
                                    ``(IV) tertiary butyl alcohol;
                                    ``(V) other ethers and heavy 
                                alcohols, as determined by then 
                                Administrator;
                                    ``(VI) ethanol;
                                    ``(VII) iso-octane; and
                                    ``(VIII) alkylates; and
                          ``(ii) conduct a study on the effects on 
                      public health (including the effects on children, 
                      pregnant women, minority or low-income 
                      communities, and other sensitive populations), air 
                      quality, and water resources of the adjustment for 
                      ethanol-blended reformulated gasoline to the 
                      volatile organic compounds performance 
                      requirements that are applicable under paragraphs 
                      (1) and (3) of section 211(k); and
                          ``(iii) <<NOTE: Reports.>> submit to the 
                      Committee on Environment and Public Works of the 
                      Senate and the Committee on Energy and Commerce of 
                      the House of Representatives a report describing 
                      the results of the studies under clauses (i) and 
                      (ii).

[[Page 119 STAT. 1081]]

                    ``(B) Contracts for study.--In carrying out this 
                paragraph, the Administrator may enter into one or more 
                contracts with nongovernmental entities such as--
                          ``(i) the national energy laboratories; and
                          ``(ii) institutions of higher education (as 
                      defined in section 101 of the Higher Education Act 
                      of 1965 (20 U.S.C. 1001)).''.

SEC. 1506. <<NOTE: Deadlines.>> ANALYSES OF MOTOR VEHICLE FUEL CHANGES.

    Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by 
inserting after subsection (p) the following:
    ``(q) Analyses of <<NOTE: Publication.>> Motor Vehicle Fuel Changes 
and Emissions Model.--
            ``(1) Anti-backsliding analysis.--
                    ``(A) Draft analysis.--Not <<NOTE: Public 
                information.>> later than 4 years after the date of 
                enactment of this paragraph, the Administrator shall 
                publish for public comment a draft analysis of the 
                changes in emissions of air pollutants and air quality 
                due to the use of motor vehicle fuel and fuel additives 
                resulting from implementation of the amendments made by 
                the Energy Policy Act of 2005.
                    ``(B) Final analysis.--After providing a reasonable 
                opportunity for comment but not later than 5 years after 
                the date of enactment of this paragraph, the 
                Administrator shall publish the analysis in final form.
            ``(2) Emissions model.--For the purposes of this section, 
        not later than 4 years after the date of enactment of this 
        paragraph, the Administrator shall develop and finalize an 
        emissions model that reflects, to the maximum extent 
        practicable, the effects of gasoline characteristics or 
        components on emissions from vehicles in the motor vehicle fleet 
        during calendar year 2007.
            ``(3) Permeation effects study.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this paragraph, the Administrator 
                shall conduct a study, and report to Congress the 
                results of the study, on the effects of ethanol content 
                in gasoline on permeation, the process by which fuel 
                molecules migrate through the elastomeric materials 
                (rubber and plastic parts) that make up the fuel and 
                fuel vapor systems of a motor vehicle.
                    ``(B) Evaporative emissions.--The study shall 
                include estimates of the increase in total evaporative 
                emissions likely to result from the use of gasoline with 
                ethanol content in a motor vehicle, and the fleet of 
                motor vehicles, due to permeation.''.

SEC. 1507. ADDITIONAL OPT-IN AREAS UNDER REFORMULATED GASOLINE PROGRAM.

    Section 211(k)(6) of the Clean Air Act (42 U.S.C. 7545(k)(6)) is 
amended--
            (1) by striking ``(6) Opt-in areas.--(A) Upon'' and 
        inserting the following:
            ``(6) Opt-in areas.--
                    ``(A) Classified areas.--
                          ``(i) In general.--Upon'';
            (2) in subparagraph (B), by striking ``(B) If'' and 
        inserting the following:

[[Page 119 STAT. 1082]]

                          ``(ii) Effect of insufficient domestic 
                      capacity to produce reformulated gasoline.--If'';
            (3) in subparagraph (A)(ii) (as redesignated by paragraph 
        (2))--
                    (A) in the first sentence, by striking 
                ``subparagraph (A)'' and inserting ``clause (i)''; and
                    (B) in the second sentence, by striking ``this 
                paragraph'' and inserting ``this subparagraph''; and
            (4) by adding at the end the following:
                    ``(B) Ozone <<NOTE: Deadlines.>> transport region.--
                          ``(i) Application of prohibition.--
                                    ``(I) In general.--On application of 
                                the Governor of a State in the ozone 
                                transport region established by section 
                                184(a), the Administrator, not later 
                                than 180 days after the date of receipt 
                                of the application, shall apply the 
                                prohibition specified in paragraph (5) 
                                to any area in the State (other than an 
                                area classified as a marginal, moderate, 
                                serious, or severe ozone nonattainment 
                                area under subpart 2 of part D of title 
                                I) unless the Administrator determines 
                                under clause (iii) that there is 
                                insufficient capacity to supply 
                                reformulated gasoline.
                                    ``(II) Publication 
                                of <<NOTE: Federal 
                                Register, publication.>> application.--
                                As soon as practicable after the date of 
                                receipt of an application under 
                                subclause (I), the Administrator shall 
                                publish the application in the Federal 
                                Register.
                          ``(ii) Period of applicability.--Under clause 
                      (i), the prohibition specified in paragraph (5) 
                      shall apply in a State--
                                    ``(I) commencing as soon as 
                                practicable but not later than 2 years 
                                after the date of approval by the 
                                Administrator of the application of the 
                                Governor of the State; and
                                    ``(II) ending not earlier than 4 
                                years after the commencement date 
                                determined under subclause (I).
                          ``(iii) Extension of commencement date based 
                      on insufficient capacity.--
                                    ``(I) In general.--If, after receipt 
                                of an application from a Governor of a 
                                State under clause (i), the 
                                Administrator determines, on the 
                                Administrator's own motion or on 
                                petition of any person, after 
                                consultation with the Secretary of 
                                Energy, that there is insufficient 
                                capacity to supply reformulated 
                                gasoline, the Administrator, by 
                                regulation--
                                            ``(aa) shall extend the 
                                        commencement date with respect 
                                        to the State under clause 
                                        (ii)(I) for not more than 1 
                                        year; and
                                            ``(bb) may renew the 
                                        extension under item (aa) for 2 
                                        additional periods, each of 
                                        which shall not exceed 1 year.

[[Page 119 STAT. 1083]]

                                    ``(II) Deadline for action on 
                                petitions.--The Administrator shall act 
                                on any petition submitted under 
                                subclause (I) not later than 180 days 
                                after the date of receipt of the 
                                petition.''.

SEC. 1508. DATA COLLECTION.

    Section 205 of the Department of Energy Organization Act (42 U.S.C. 
7135) is amended by adding at the end the following:
    ``(m) Renewable Fuels Survey.--(1) <<NOTE: Publication.>> In order 
to improve the ability to evaluate the effectiveness of the Nation's 
renewable fuels mandate, the Administrator shall conduct and publish the 
results of a survey of renewable fuels demand in the motor vehicle fuels 
market in the United States monthly, and in a manner designed to protect 
the confidentiality of individual responses. In conducting the survey, 
the Administrator shall collect information both on a national and 
regional basis, including each of the following:
            ``(A) The quantity of renewable fuels produced.
            ``(B) The quantity of renewable fuels blended.
            ``(C) The quantity of renewable fuels imported.
            ``(D) The quantity of renewable fuels demanded.
            ``(E) Market price data.
            ``(F) Such other analyses or evaluations as the 
        Administrator finds are necessary to achieve the purposes of 
        this section.

    ``(2) The Administrator shall also collect or estimate information 
both on a national and regional basis, pursuant to subparagraphs (A) 
through (F) of paragraph (1), for the 5 years prior to implementation of 
this subsection.
    ``(3) This subsection does not affect the authority of the 
Administrator to collect data under section 52 of the Federal Energy 
Administration Act of 1974 (15 U.S.C. 790a).''.

SEC. 1509. FUEL SYSTEM REQUIREMENTS HARMONIZATION STUDY.

    (a) Study.--
            (1) In general.--The Administrator of the Environmental 
        Protection Agency and the Secretary shall jointly conduct a 
        study of Federal, State, and local requirements concerning motor 
        vehicle fuels, including--
                    (A) requirements relating to reformulated gasoline, 
                volatility (measured in Reid vapor pressure), oxygenated 
                fuel, and diesel fuel; and
                    (B) other requirements that vary from State to 
                State, region to region, or locality to locality.
            (2) Required elements.--The study shall assess--
                    (A) the effect of the variety of requirements 
                described in paragraph (1) on the supply, quality, and 
                price of motor vehicle fuels available to the consumer;
                    (B) the effect of the requirements described in 
                paragraph (1) on achievement of--
                          (i) national, regional, and local air quality 
                      standards and goals; and
                          (ii) related environmental and public health 
                      protection standards and goals (including the 
                      protection of children, pregnant women, minority 
                      or low-income communities, and other sensitive 
                      populations);
                    (C) the effect of Federal, State, and local motor 
                vehicle fuel regulations, including multiple motor 
                vehicle fuel requirements, on--

[[Page 119 STAT. 1084]]

                          (i) domestic refiners;
                          (ii) the fuel distribution system; and
                          (iii) industry investment in new capacity;
                    (D) the effect of the requirements described in 
                paragraph (1) on emissions from vehicles, refiners, and 
                fuel handling facilities;
                    (E) the feasibility of developing national or 
                regional motor vehicle fuel slates for the 48 contiguous 
                States that, while protecting and improving air quality 
                at the national, regional, and local levels, could--
                          (i) enhance flexibility in the fuel 
                      distribution infrastructure and improve fuel 
                      fungibility;
                          (ii) reduce price volatility and costs to 
                      consumers and producers;
                          (iii) provide increased liquidity to the 
                      gasoline market; and
                          (iv) enhance fuel quality, consistency, and 
                      supply;
                    (F) the feasibility of providing incentives, and the 
                need for the development of national standards 
                necessary, to promote cleaner burning motor vehicle 
                fuel; and
                    (G) the extent to which improvements in air quality 
                and any increases or decreases in the price of motor 
                fuel can be projected to result from the Environmental 
                Protection Agency's Tier II requirements for 
                conventional gasoline and vehicle emission systems, on-
                road and off-road diesel rules, the reformulated 
                gasoline program, the renewable content requirements 
                established by this subtitle, State programs regarding 
                gasoline volatility, and any other requirements imposed 
                by the Federal Government, States or localities 
                affecting the composition of motor fuel.

    (b) Report.--
            (1) In general.--Not later than June 1, 2008, the 
        Administrator of the Environmental Protection Agency and the 
        Secretary shall submit to Congress a report on the results of 
        the study conducted under subsection (a).
            (2) Recommendations.--
                    (A) In general.--The report shall contain 
                recommendations for legislative and administrative 
                actions that may be taken--
                          (i) to improve air quality;
                          (ii) to reduce costs to consumers and 
                      producers; and
                          (iii) to increase supply liquidity.
                    (B) Required considerations.--The recommendations 
                under subparagraph (A) shall take into account the need 
                to provide advance notice of required modifications to 
                refinery and fuel distribution systems in order to 
                ensure an adequate supply of motor vehicle fuel in all 
                States.
            (3) Consultation.--In developing the report, the 
        Administrator of the Environmental Protection Agency and the 
        Secretary shall consult with--
                    (A) the Governors of the States;
                    (B) automobile manufacturers;
                    (C) State and local air pollution control 
                regulators;
                    (D) public health experts;
                    (E) motor vehicle fuel producers and distributors; 
                and
                    (F) the public.

[[Page 119 STAT. 1085]]

SEC. 1510. <<NOTE: 42 USC 16501.>> COMMERCIAL BYPRODUCTS FROM MUNICIPAL 
            SOLID WASTE AND CELLULOSIC BIOMASS LOAN GUARANTEE PROGRAM.

    (a) Definition of Municipal Solid Waste.--In this section, the term 
``municipal solid waste'' has the meaning given the term ``solid waste'' 
in section 1004 of the Solid Waste Disposal Act (42 U.S.C. 6903).
    (b) Establishment of Program.--The Secretary shall establish a 
program to provide guarantees of loans by private institutions for the 
construction of facilities for the processing and conversion of 
municipal solid waste and cellulosic biomass into fuel ethanol and other 
commercial byproducts.
    (c) Requirements.--The Secretary may provide a loan guarantee under 
subsection (b) to an applicant if--
            (1) without a loan guarantee, credit is not available to the 
        applicant under reasonable terms or conditions sufficient to 
        finance the construction of a facility described in subsection 
        (b);
            (2) the prospective earning power of the applicant and the 
        character and value of the security pledged provide a reasonable 
        assurance of repayment of the loan to be guaranteed in 
        accordance with the terms of the loan; and
            (3) the loan bears interest at a rate determined by the 
        Secretary to be reasonable, taking into account the current 
        average yield on outstanding obligations of the United States 
        with remaining periods of maturity comparable to the maturity of 
        the loan.

    (d) Criteria.--In selecting recipients of loan guarantees from among 
applicants, the Secretary shall give preference to proposals that--
            (1) meet all applicable Federal and State permitting 
        requirements;
            (2) are most likely to be successful; and
            (3) are located in local markets that have the greatest need 
        for the facility because of--
                    (A) the limited availability of land for waste 
                disposal;
                    (B) the availability of sufficient quantities of 
                cellulosic biomass; or
                    (C) a high level of demand for fuel ethanol or other 
                commercial byproducts of the facility.

    (e) Maturity.--A loan guaranteed under subsection (b) shall have a 
maturity of not more than 20 years.
    (f) Terms and Conditions.--The loan agreement for a loan guaranteed 
under subsection (b) shall provide that no provision of the loan 
agreement may be amended or waived without the consent of the Secretary.
    (g) Assurance of Repayment.--The Secretary shall require that an 
applicant for a loan guarantee under subsection (b) provide an assurance 
of repayment in the form of a performance bond, insurance, collateral, 
or other means acceptable to the Secretary in an amount equal to not 
less than 20 percent of the amount of the loan.
    (h) Guarantee Fee.--The recipient of a loan guarantee under 
subsection (b) shall pay the Secretary an amount determined by the 
Secretary to be sufficient to cover the administrative costs of the 
Secretary relating to the loan guarantee.

[[Page 119 STAT. 1086]]

    (i) Full Faith and Credit.--The full faith and credit of the United 
States is pledged to the payment of all guarantees made under this 
section. Any such guarantee made by the Secretary shall be conclusive 
evidence of the eligibility of the loan for the guarantee with respect 
to principal and interest. The validity of the guarantee shall be 
incontestable in the hands of a holder of the guaranteed loan.
    (j) Reports.--Until each guaranteed loan under this section has been 
repaid in full, the Secretary shall annually submit to Congress a report 
on the activities of the Secretary under this section.
    (k) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.
    (l) Termination of Authority.--The authority of the Secretary to 
issue a loan guarantee under subsection (b) terminates on the date that 
is 10 years after the date of enactment of this Act.

SEC. 1511. RENEWABLE FUEL.

    The Clean Air Act is amended by inserting after section 211 (42 
U.S.C. 7411) the following:

``SEC. 212. <<NOTE: 42 USC 7546.>> RENEWABLE FUEL.

    ``(a) Definitions.--In this section:
            ``(1) Municipal solid waste.--The term `municipal solid 
        waste' has the meaning given the term `solid waste' in section 
        1004 of the Solid Waste Disposal Act (42 U.S.C. 6903).
            ``(2) RFG state.--The term `RFG State' means a State in 
        which is located one or more covered areas (as defined in 
        section 211(k)(10)(D)).
            ``(3) Secretary.--The term `Secretary' means the Secretary 
        of Energy.

    ``(b) Cellulosic Biomass Ethanol and Municipal Solid Waste Loan 
Guarantee Program.--
            ``(1) In general.--Funds may be provided for the cost (as 
        defined in the Federal Credit Reform Act of 1990 (2 U.S.C. 661 
        et seq.)) of loan guarantees issued under title XIV of the 
        Energy Policy Act to carry out commercial demonstration projects 
        for celluosic biomass and sucrose-derived ethanol.
            ``(2) Demonstration projects.--
                    ``(A) In general.--The Secretary shall issue loan 
                guarantees under this section to carry out not more than 
                4 projects to commercially demonstrate the feasibility 
                and viability of producing cellulosic biomass ethanol or 
                sucrose-derived ethanol, including at least 1 project 
                that uses cereal straw as a feedstock and 1 project that 
                uses municipal solid waste as a feedstock.
                    ``(B) Design capacity.--Each project shall have a 
                design capacity to produce at least 30,000,000 gallons 
                of cellulosic biomass ethanol each year.
            ``(3) Applicant assurances.--An applicant for a loan 
        guarantee under this section shall provide assurances, 
        satisfactory to the Secretary, that--
                    ``(A) the project design has been validated through 
                the operation of a continuous process facility with a 
                cumulative output of at least 50,000 gallons of ethanol;
                    ``(B) the project has been subject to a full 
                technical review;

[[Page 119 STAT. 1087]]

                    ``(C) the project is covered by adequate project 
                performance guarantees;
                    ``(D) the project, with the loan guarantee, is 
                economically viable; and
                    ``(E) there is a reasonable assurance of repayment 
                of the guaranteed loan.
            ``(4) Limitations.--
                    ``(A) Maximum guarantee.--Except as provided in 
                subparagraph (B), a loan guarantee under this section 
                may be issued for up to 80 percent of the estimated cost 
                of a project, but may not exceed $250,000,000 for a 
                project.
                    ``(B) Additional guarantees.--
                          ``(i) In general.--The Secretary may issue 
                      additional loan guarantees for a project to cover 
                      up to 80 percent of the excess of actual project 
                      cost over estimated project cost but not to exceed 
                      15 percent of the amount of the original 
                      guarantee.
                          ``(ii) Principal and interest.--Subject to 
                      subparagraph (A), the Secretary shall guarantee 
                      100 percent of the principal and interest of a 
                      loan made under subparagraph (A).
            ``(5) Equity contributions.--To be eligible for a loan 
        guarantee under this section, an applicant for the loan 
        guarantee shall have binding commitments from equity investors 
        to provide an initial equity contribution of at least 20 percent 
        of the total project cost.
            ``(6) Insufficient amounts.--If the amount made available to 
        carry out this section is insufficient to allow the Secretary to 
        make loan guarantees for 3 projects described in subsection (b), 
        the Secretary shall issue loan guarantees for one or more 
        qualifying projects under this section in the order in which the 
        applications for the projects are received by the Secretary.
            ``(7) Approval.--An <<NOTE: Deadline.>> application for a 
        loan guarantee under this section shall be approved or 
        disapproved by the Secretary not later than 90 days after the 
        application is received by the Secretary.

    ``(c) Authorization 
of <<NOTE: Mississippi. Oklahoma.>> Appropriations for Resource 
Center.--There is authorized to be appropriated, for a resource center 
to further develop bioconversion technology using low-cost biomass for 
the production of ethanol at the Center for Biomass-Based Energy at the 
Mississippi State University and the Oklahoma State University, 
$4,000,000 for each of fiscal years 2005 through 2007.

    ``(d) Renewable Fuel Production Research and Development Grants.--
            ``(1) In general.--The Administrator shall provide grants 
        for the research into, and development and implementation of, 
        renewable fuel production technologies in RFG States with low 
        rates of ethanol production, including low rates of production 
        of cellulosic biomass ethanol.
            ``(2) Eligibility.--
                    ``(A) In general.--The entities eligible to receive 
                a grant under this subsection are academic institutions 
                in RFG States, and consortia made up of combinations of 
                academic institutions, industry, State government 
                agencies, or local government agencies in RFG States, 
                that have

[[Page 119 STAT. 1088]]

                proven experience and capabilities with relevant 
                technologies.
                    ``(B) Application.--To be eligible to receive a 
                grant under this subsection, an eligible entity shall 
                submit to the Administrator an application in such 
                manner and form, and accompanied by such information, as 
                the Administrator may specify.
            ``(3) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $25,000,000 for 
        each of fiscal years 2006 through 2010.

    ``(e) Cellulosic Biomass Ethanol Conversion Assistance.--
            ``(1) In general.--The Secretary may provide grants to 
        merchant producers of cellulosic biomass ethanol in the United 
        States to assist the producers in building eligible production 
        facilities described in paragraph (2) for the production of 
        cellulosic biomass ethanol.
            ``(2) Eligible production facilities.--A production facility 
        shall be eligible to receive a grant under this subsection if 
        the production facility--
                    ``(A) is located in the United States; and
                    ``(B) uses cellulosic biomass feedstocks derived 
                from agricultural residues or municipal solid waste.
            ``(3) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection--
                    ``(A) $250,000,000 for fiscal year 2006; and
                    ``(B) $400,000,000 for fiscal year 2007.''.

SEC. 1512. CONVERSION ASSISTANCE FOR CELLULOSIC BIOMASS, WASTE-DERIVED 
            ETHANOL, APPROVED RENEWABLE FUELS.

    Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by 
adding at the end the following:
    ``(r) Conversion Assistance for Cellulosic Biomass, Waste-Derived 
Ethanol, Approved Renewable Fuels.--
            ``(1) In general.--The Secretary of Energy may provide 
        grants to merchant producers of cellulosic biomass ethanol, 
        waste-derived ethanol, and approved renewable fuels in the 
        United States to assist the producers in building eligible 
        production facilities described in paragraph (2) for the 
        production of ethanol or approved renewable fuels.
            ``(2) Eligible production facilities.--A production facility 
        shall be eligible to receive a grant under this subsection if 
        the production facility--
                    ``(A) is located in the United States; and
                    ``(B) uses cellulosic or renewable biomass or waste-
                derived feedstocks derived from agricultural residues, 
                wood residues, municipal solid waste, or agricultural 
                byproducts.
            ``(3) Authorization of appropriations.--There are authorized 
        to be appropriated the following amounts to carry out this 
        subsection:
                    ``(A) $100,000,000 for fiscal year 2006.
                    ``(B) $250,000,000 for fiscal year 2007.
                    ``(C) $400,000,000 for fiscal year 2008.
            ``(4) Definitions.--For the purposes of this subsection:
                    ``(A) The term `approved renewable fuels' are fuels 
                and components of fuels that have been approved by the 
                Department of Energy, as defined in section 301 of the 
                Energy

[[Page 119 STAT. 1089]]

                Policy Act of 1992 (42 U.S.C. 13211), which have been 
                made from renewable biomass.
                    ``(B) The term `renewable biomass' is, as defined in 
                Presidential Executive Order 13134, published in the 
                Federal Register on August 16, 1999, any organic matter 
                that is available on a renewable or recurring basis 
                (excluding old-growth timber), including dedicated 
                energy crops and trees, agricultural food and feed crop 
                residues, aquatic plants, animal wastes, wood and wood 
                residues, paper and paper residues, and other vegetative 
                waste materials. Old-growth timber means timber of a 
                forest from the late successional stage of forest 
                development.''.

SEC. 1513. BLENDING OF COMPLIANT REFORMULATED GASOLINES.

    Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by 
adding at the end the following:
    ``(s) Blending of Compliant Reformulated Gasolines.--
            ``(1) In general.--Notwithstanding subsections (h) and (k) 
        and subject to the limitations in paragraph (2) of this 
        subsection, it shall not be a violation of this subtitle for a 
        gasoline retailer, during any month of the year, to blend at a 
        retail location batches of ethanol-blended and non-ethanol-
        blended reformulated gasoline, provided that--
                    ``(A) each batch of gasoline to be blended has been 
                individually certified as in compliance with subsections 
                (h) and (k) prior to being blended;
                    ``(B) the retailer notifies the Administrator prior 
                to such blending, and identifies the exact location of 
                the retail station and the specific tank in which such 
                blending will take place;
                    ``(C) the retailer retains and, as requested by the 
                Administrator or the Administrator's designee, makes 
                available for inspection such certifications accounting 
                for all gasoline at the retail outlet; and
                    ``(D) the retailer does not, between June 1 and 
                September 15 of each year, blend a batch of VOC-
                controlled, or `summer', gasoline with a batch of non-
                VOC-controlled, or `winter', gasoline (as these terms 
                are defined under subsections (h) and (k)).
            ``(2) Limitations.--
                    ``(A) Frequency limitation.--A retailer shall only 
                be permitted to blend batches of compliant reformulated 
                gasoline under this subsection a maximum of two blending 
                periods between May 1 and September 15 of each calendar 
                year.
                    ``(B) Duration of blending period.--Each blending 
                period authorized under subparagraph (A) shall extend 
                for a period of no more than 10 consecutive calendar 
                days.
            ``(3) Surveys.--A sample of gasoline taken from a retail 
        location that has blended gasoline within the past 30 days and 
        is in compliance with subparagraphs (A), (B), (C), and (D) of 
        paragraph (1) shall not be used in a VOC survey mandated by 40 
        CFR Part 80.
            ``(4) State implementation plans.--A State shall be held 
        harmless and shall not be required to revise its State 
        implementation plan under section 110 to account for the 
        emissions from blended gasoline authorized under paragraph (1).

[[Page 119 STAT. 1090]]

            ``(5) Preservation of state law.--Nothing in this subsection 
        shall--
                    ``(A) preempt existing State laws or regulations 
                regulating the blending of compliant gasolines; or
                    ``(B) prohibit a State from adopting such 
                restrictions in the future.
            ``(6) Regulations.--
        The <<NOTE: Notice. Deadline.>> Administrator shall promulgate, 
        after notice and comment, regulations implementing this 
        subsection within 1 year after the date of enactment of this 
        subsection.
            ``(7) Effective date.--This subsection shall become 
        effective 15 months after the date of its enactment and shall 
        apply to blended batches of reformulated gasoline on or after 
        that date, regardless of whether the implementing regulations 
        required by paragraph (6) have been promulgated by the 
        Administrator by that date.
            ``(8) Liability.--No person other than the person 
        responsible for blending under this subsection shall be subject 
        to an enforcement action or penalties under subsection (d) 
        solely arising from the blending of compliant reformulated 
        gasolines by the retailers.
            ``(9) Formulation of gasoline.--This subsection does not 
        grant authority to the Administrator or any State (or any 
        subdivision thereof) to require reformulation of gasoline at the 
        refinery to adjust for potential or actual emissions increases 
        due to the blending authorized by this subsection.''.

SEC. 1514. <<NOTE: 42 USC 16502.>> ADVANCED BIOFUEL TECHNOLOGIES 
            PROGRAM.

    (a) In General.--Subject to the availability of appropriations under 
subsection (d), the Administrator of the Environmental Protection Agency 
shall, in consultation with the Secretary of Agriculture and the Biomass 
Research and Development Technical Advisory Committee established under 
section 306 of the Biomass Research and Development Act of 2000 (Public 
Law 106-224; 7 U.S.C. 8101 note), establish a program, to be known as 
the ``Advanced Biofuel Technologies Program'', to demonstrate advanced 
technologies for the production of alternative transportation fuels.
    (b) Priority.--In carrying out the program under subsection (a), the 
Administrator shall give priority to projects that enhance the 
geographical diversity of alternative fuels production and utilize 
feedstocks that represent 10 percent or less of ethanol or biodiesel 
fuel production in the United States during the previous fiscal year.
    (c) Demonstration Projects.--
            (1) In general.--As part of the program under subsection 
        (a), the Administrator shall fund demonstration projects--
                    (A) to develop not less than 4 different conversion 
                technologies for producing cellulosic biomass ethanol; 
                and
                    (B) to develop not less than 5 technologies for 
                coproducing value-added bioproducts (such as 
                fertilizers, herbicides, and pesticides) resulting from 
                the production of biodiesel fuel.
            (2) Administration.--Demonstration projects under this 
        subsection shall be--
                    (A) conducted based on a merit-reviewed, competitive 
                process; and

[[Page 119 STAT. 1091]]

                    (B) subject to the cost-sharing requirements of 
                section 988.

    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $110,000,000 for each of fiscal 
years 2005 through 2009.

SEC. 1515. WASTE-DERIVED ETHANOL AND BIODIESEL.

    Section 312(f)(1) of the Energy Policy Act of 1992 (42 U.S.C. 
13220(f)(1)) is amended--
            (1) by striking `` `biodiesel' means'' and inserting the 
        following: `` `biodiesel'--
                    ``(A) means''; and
            (2) in subparagraph (A) (as designated by paragraph (1)) by 
        striking ``and'' at the end and inserting the following:
                    ``(B) includes biodiesel derived from--
                          ``(i) animal wastes, including poultry fats 
                      and poultry wastes, and other waste materials; or
                          ``(ii) municipal solid waste and sludges and 
                      oils derived from wastewater and the treatment of 
                      wastewater; and''.

SEC. 1516. <<NOTE: 42 USC 16503.>> SUGAR ETHANOL LOAN GUARANTEE PROGRAM.

    (a) In General.--Funds may be provided for the cost (as defined in 
section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of 
loan guarantees issued under title XIV to carry out commercial 
demonstration projects for ethanol derived from sugarcane, bagasse, and 
other sugarcane byproducts.
    (b) Demonstration Projects.--The Secretary may issue loan guarantees 
under this section to projects to demonstrate commercially the 
feasibility and viability of producing ethanol using sugarcane, 
sugarcane bagasse, and other sugarcane byproducts as a feedstock.
    (c) Requirements.--An applicant for a loan guarantee under this 
section may provide assurances, satisfactory to the Secretary, that--
            (1) the project design has been validated through the 
        operation of a continuous process facility;
            (2) the project has been subject to a full technical review;
            (3) the project, with the loan guarantee, is economically 
        viable; and
            (4) there is a reasonable assurance of repayment of the 
        guaranteed loan.

    (d) Limitations.--
            (1) Maximum guarantee.--Except as provided in paragraph (2), 
        a loan guarantee under this section--
                    (A) may be issued for up to 80 percent of the 
                estimated cost of a project; but
                    (B) shall not exceed $50,000,000 for any 1 project.
            (2) Additional guarantees.--
                    (A) In general.--The Secretary may issue additional 
                loan guarantees for a project to cover--
                          (i) up to 80 percent of the excess of actual 
                      project costs; but
                          (ii) not to exceed 15 percent of the amount of 
                      the original loan guarantee.

[[Page 119 STAT. 1092]]

                    (B) Principal and interest.--Subject to subparagraph 
                (A), the Secretary shall guarantee 100 percent of the 
                principal and interest of a loan guarantee made under 
                subparagraph (A).

  Subtitle B--Underground <<NOTE: Underground Storage Tank Compliance 
Act.>> Storage Tank Compliance

SEC. 1521. <<NOTE: 42 USC 6901 note.>> SHORT TITLE.

    This subtitle may be cited as the ``Underground Storage Tank 
Compliance Act''.

SEC. 1522. LEAKING UNDERGROUND STORAGE TANKS.

    (a) In General.--Section 9004 of the Solid Waste Disposal Act (42 
U.S.C. 6991c) is amended by adding at the end the following:
    ``(f) Trust Fund Distribution.--
            ``(1) In general.--
                    ``(A) Amount and permitted uses of distribution.--
                The Administrator shall distribute to States not less 
                than 80 percent of the funds from the Trust Fund that 
                are made available to the Administrator under section 
                9014(2)(A) for each fiscal year for use in paying the 
                reasonable costs, incurred under a cooperative agreement 
                with any State for--
                          ``(i) corrective actions taken by the State 
                      under section 9003(h)(7)(A);
                          ``(ii) necessary administrative expenses, as 
                      determined by the Administrator, that are directly 
                      related to State fund or State assurance programs 
                      under subsection (c)(1); or
                          ``(iii) enforcement, by a State or a local 
                      government, of State or local regulations 
                      pertaining to underground storage tanks regulated 
                      under this subtitle.
                    ``(B) Use of funds for enforcement.--In addition to 
                the uses of funds authorized under subparagraph (A), the 
                Administrator may use funds from the Trust Fund that are 
                not distributed to States under subparagraph (A) for 
                enforcement of any regulation promulgated by the 
                Administrator under this subtitle.
                    ``(C) Prohibited uses.--Funds provided to a State by 
                the Administrator under subparagraph (A) shall not be 
                used by the State to provide financial assistance to an 
                owner or operator to meet any requirement relating to 
                underground storage tanks under subparts B, C, D, H, and 
                G of part 280 of title 40, Code of Federal Regulations 
                (as in effect on the date of enactment of this 
                subsection).
            ``(2) Allocation.--
                    ``(A) Process.--Subject to subparagraphs (B) and 
                (C), in the case of a State with which the Administrator 
                has entered into a cooperative agreement under section 
                9003(h)(7)(A), the Administrator shall distribute funds 
                from the Trust Fund to the State using an allocation 
                process developed by the Administrator.
                    ``(B) Diversion of state funds.--The Administrator 
                shall not distribute funds under subparagraph (A)(iii) 
                of subsection (f)(1) to any State that has diverted 
                funds from

[[Page 119 STAT. 1093]]

                a State fund or State assurance program for purposes 
                other than those related to the regulation of 
                underground storage tanks covered by this subtitle, with 
                the exception of those transfers that had been completed 
                earlier than the date of enactment of this subsection.
                    ``(C) Revisions to process.--The Administrator may 
                revise the allocation process referred to in 
                subparagraph (A) after--
                          ``(i) consulting with State agencies 
                      responsible for overseeing corrective action for 
                      releases from underground storage tanks; and
                          ``(ii) taking into consideration, at a 
                      minimum, each of the following:
                                    ``(I) The number of confirmed 
                                releases from federally regulated 
                                leaking underground storage tanks in the 
                                States.
                                    ``(II) The number of federally 
                                regulated underground storage tanks in 
                                the States.
                                    ``(III) The performance of the 
                                States in implementing and enforcing the 
                                program.
                                    ``(IV) The financial needs of the 
                                States.
                                    ``(V) The ability of the States to 
                                use the funds referred to in 
                                subparagraph (A) in any year.
            ``(3) Distributions to state agencies.--Distributions from 
        the Trust Fund under this subsection shall be made directly to a 
        State agency that--
                    ``(A) enters into a cooperative agreement referred 
                to in paragraph (2)(A); or
                    ``(B) is enforcing a State program approved under 
                this section.''.

    (b) Withdrawal of Approval of State Funds.--Section 9004(c) of the 
Solid Waste Disposal Act (42 U.S.C. 6991c(c)) is amended by inserting 
the following new paragraph at the end thereof:
            ``(6) Withdrawal of approval.--After an opportunity for good 
        faith, collaborative efforts to correct financial deficiencies 
        with a State fund, the Administrator may withdraw approval of 
        any State fund or State assurance program to be used as a 
        financial responsibility mechanism without withdrawing approval 
        of a State underground storage tank program under section 
        9004(a).''.

    (c) Ability to Pay.--Section 9003(h)(6) of the Solid Waste Disposal 
Act (42 U.S.C. 6591a(h)(6)) is <<NOTE: 42 USC 6991b.>> amended by adding 
the following new subparagraph at the end thereof:
                    ``(E) Inability or limited ability to pay.--
                          ``(i) In general.--In determining the level of 
                      recovery effort, or amount that should be 
                      recovered, the Administrator (or the State 
                      pursuant to paragraph (7)) shall consider the 
                      owner or operator's ability to pay. An inability 
                      or limited ability to pay corrective action costs 
                      must be demonstrated to the Administrator (or the 
                      State pursuant to paragraph (7)) by the owner or 
                      operator.
                          ``(ii) Considerations.--In determining whether 
                      or not a demonstration is made under clause (i), 
                      the Administrator (or the State pursuant to 
                      paragraph (7)) shall take into consideration the 
                      ability of the

[[Page 119 STAT. 1094]]

                      owner or operator to pay corrective action costs 
                      and still maintain its basic business operations, 
                      including consideration of the overall financial 
                      condition of the owner or operator and 
                      demonstrable constraints on the ability of the 
                      owner or operator to raise revenues.
                          ``(iii) Information.--An owner or operator 
                      requesting consideration under this subparagraph 
                      shall promptly provide the Administrator (or the 
                      State pursuant to paragraph (7)) with all relevant 
                      information needed to determine the ability of the 
                      owner or operator to pay corrective action costs.
                          ``(iv) Alternative payment methods.--The 
                      Administrator (or the State pursuant to paragraph 
                      (7)) shall consider alternative payment methods as 
                      may be necessary or appropriate if the 
                      Administrator (or the State pursuant to paragraph 
                      (7)) determines that an owner or operator cannot 
                      pay all or a portion of the costs in a lump sum 
                      payment.
                          ``(v) Misrepresentation.--If an owner or 
                      operator provides false information or otherwise 
                      misrepresents their financial situation under 
                      clause (ii), the Administrator (or the State 
                      pursuant to paragraph (7)) shall seek full 
                      recovery of the costs of all such actions pursuant 
                      to the provisions of subparagraph (A) without 
                      consideration of the factors in subparagraph 
                      (B).''.

SEC. 1523. INSPECTION OF UNDERGROUND STORAGE TANKS.

    (a) Inspection Requirements.--Section 9005 of the Solid Waste 
Disposal Act (42 U.S.C. 6991d) is amended by inserting the following new 
subsection at the end thereof:
    ``(c) Inspection Requirements.--
            ``(1) Uninspected tanks.--In <<NOTE: Deadline.>> the case of 
        underground storage tanks regulated under this subtitle that 
        have not undergone an inspection since December 22, 1998, not 
        later than 2 years after the date of enactment of this 
        subsection, the Administrator or a State that receives funding 
        under this subtitle, as appropriate, shall conduct on-site 
        inspections of all such tanks to determine compliance with this 
        subtitle and the regulations under this subtitle (40 CFR 280) or 
        a requirement or standard of a State program developed under 
        section 9004.
            ``(2) Periodic inspections.--After completion of all 
        inspections required under paragraph (1), the Administrator or a 
        State that receives funding under this subtitle, as appropriate, 
        shall conduct on-site inspections of each underground storage 
        tank regulated under this subtitle at least once every 3 years 
        to determine compliance with this subtitle and the regulations 
        under this subtitle (40 CFR 280) or a requirement or standard of 
        a State program developed under section 9004. The Administrator 
        may extend for up to one additional year the first 3-year 
        inspection interval under this paragraph if the State 
        demonstrates that it has insufficient resources to complete all 
        such inspections within the first 3-year period.
            ``(3) Inspection authority.--Nothing in this section shall 
        be construed to diminish the Administrator's or a State's 
        authorities under section 9005(a).''.

[[Page 119 STAT. 1095]]

    (b) Study of <<NOTE: Reports. Deadline.>> Alternative Inspection 
Programs.--The Administrator of the Environmental Protection Agency, in 
coordination with a State, shall gather information on compliance 
assurance programs that could serve as an alternative to the inspection 
programs under section 9005(c) of the Solid Waste Disposal Act (42 
U.S.C. 6991d(c)) and shall, within 4 years after the date of enactment 
of this Act, submit a report to the Congress containing the results of 
such study.

SEC. 1524. OPERATOR TRAINING.

    (a) In General.--Section 9010 of the Solid Waste Disposal Act (42 
U.S.C. 6991i) is amended to read as follows:

``SEC. 9010. OPERATOR TRAINING.

    ``(a) <<NOTE: Deadline. Notification. Public 
information. Publication.>> Guidelines.--
            ``(1) In general.--Not later than 2 years after the date of 
        enactment of the Underground Storage Tank Compliance Act, in 
        consultation and cooperation with States and after public notice 
        and opportunity for comment, the Administrator shall publish 
        guidelines that specify training requirements for--
                    ``(A) persons having primary responsibility for on-
                site operation and maintenance of underground storage 
                tank systems;
                    ``(B) persons having daily on-site responsibility 
                for the operation and maintenance of underground storage 
                tanks systems; and
                    ``(C) daily, on-site employees having primary 
                responsibility for addressing emergencies presented by a 
                spill or release from an underground storage tank 
                system.
            ``(2) Considerations.--The guidelines described in paragraph 
        (1) shall take into account--
                    ``(A) State training programs in existence as of the 
                date of publication of the guidelines;
                    ``(B) training programs that are being employed by 
                tank owners and tank operators as of the date of 
                enactment of the Underground Storage Tank Compliance 
                Act;
                    ``(C) the high turnover rate of tank operators and 
                other personnel;
                    ``(D) the frequency of improvement in underground 
                storage tank equipment technology;
                    ``(E) the nature of the businesses in which the tank 
                operators are engaged;
                    ``(F) the substantial differences in the scope and 
                length of training needed for the different classes of 
                persons described in subparagraphs (A), (B), and (C) of 
                paragraph (1); and
                    ``(G) such other factors as the Administrator 
                determines to be necessary to carry out this section.

    ``(b) State <<NOTE: Deadline.>> Programs.--
            ``(1) In general.--Not later than 2 years after the date on 
        which the Administrator publishes the guidelines under 
        subsection (a)(1), each State that receives funding under this 
        subtitle shall develop State-specific training requirements that 
        are consistent with the guidelines developed under subsection 
        (a)(1).
            ``(2) Requirements.--State requirements described in 
        paragraph (1) shall--
                    ``(A) be consistent with subsection (a);

[[Page 119 STAT. 1096]]

                    ``(B) be developed in cooperation with tank owners 
                and tank operators;
                    ``(C) take into consideration training programs 
                implemented by tank owners and tank operators as of the 
                date of enactment of this section; and
                    ``(D) be appropriately communicated to tank owners 
                and operators.
            ``(3) Financial incentive.--The Administrator may award to a 
        State that develops and implements requirements described in 
        paragraph (1), in addition to any funds that the State is 
        entitled to receive under this subtitle, not more than $200,000, 
        to be used to carry out the requirements.

    ``(c) Training.--All persons that are subject to the operator 
training requirements of subsection (a) shall--
            ``(1) meet the training requirements developed under 
        subsection (b); and
            ``(2) repeat the applicable requirements developed under 
        subsection (b), if the tank for which they have primary daily 
        on-site management responsibilities is determined to be out of 
        compliance with--
                    ``(A) a requirement or standard promulgated by the 
                Administrator under section 9003; or
                    ``(B) a requirement or standard of a State program 
                approved under section 9004.''.

    (b) State Program Requirement.--Section 9004(a) of the Solid Waste 
Disposal Act (42 U.S.C. 6991c(a)) is amended by striking ``and'' at the 
end of paragraph (7), by striking the period at the end of paragraph (8) 
and inserting ``; and'', and by adding the following new paragraph at 
the end thereof:
            ``(9) State-specific training requirements as required by 
        section 9010.''.

    (c) Enforcement.--Section 9006(d)(2) of such Act (42 U.S.C. 6991e) 
is amended as follows:
            (1) By striking ``or'' at the end of subparagraph (B).
            (2) By adding the following new subparagraph after 
        subparagraph (C):
            ``(D) the training requirements established by States 
        pursuant to section 9010 (relating to operator training); or''.

    (d) Table of Contents.--The item relating to section 9010 in the 
table of contents for the Solid Waste Disposal Act is amended to read as 
follows:

``Sec. 9010. Operator training.''.

SEC. 1525. REMEDIATION FROM OXYGENATED FUEL ADDITIVES.

    Section 9003(h) of the Solid Waste Disposal Act (42 U.S.C. 6991b(h)) 
is amended as follows:
            (1) In paragraph (7)(A)--
                    (A) by striking ``paragraphs (1) and (2) of this 
                subsection'' and inserting ``paragraphs (1), (2), and 
                (12)''; and
                    (B) by striking ``and including the authorities of 
                paragraphs (4), (6), and (8) of this subsection'' and 
                inserting ``and the authority under sections 9011 and 
                9012 and paragraphs (4), (6), and (8),''.
            (2) By adding at the end the following:
            ``(12) Remediation of oxygenated fuel contamination.--

[[Page 119 STAT. 1097]]

                    ``(A) In general.--The Administrator and the States 
                may use funds made available under section 9014(2)(B) to 
                carry out corrective actions with respect to a release 
                of a fuel containing an oxygenated fuel additive that 
                presents a threat to human health or welfare or the 
                environment.
                    ``(B) Applicable authority.--
                The <<NOTE: Contracts.>> Administrator or a State shall 
                carry out subparagraph (A) in accordance with paragraph 
                (2), and in the case of a State, in accordance with a 
                cooperative agreement entered into by the Administrator 
                and the State under paragraph (7).''.

SEC. 1526. RELEASE PREVENTION, COMPLIANCE, AND ENFORCEMENT.

    (a) Release Prevention and Compliance.--Subtitle I of the Solid 
Waste Disposal Act (42 U.S.C. 6991 et seq.) is amended by adding at the 
end the following:

``SEC. 9011. <<NOTE: 42 USC 6991j.>> USE OF FUNDS FOR RELEASE PREVENTION 
            AND COMPLIANCE.

    ``Funds made available under section 9014(2)(D) from the Trust Fund 
may be used to conduct inspections, issue orders, or bring actions under 
this subtitle--
            ``(1) by a State, in accordance with a grant or cooperative 
        agreement with the Administrator, of State regulations 
        pertaining to underground storage tanks regulated under this 
        subtitle; and
            ``(2) by the Administrator, for tanks regulated under this 
        subtitle (including under a State program approved under section 
        9004).''.

    (b) Government-Owned Tanks.--Section 9003 of the Solid Waste 
Disposal Act (42 U.S.C. 6991b) is amended by adding at the end the 
following:
    ``(i) Government-Owned Tanks.--
            ``(1) State compliance report.--(A) <<NOTE: Deadline.>> Not 
        later than 2 years after the date of enactment of this 
        subsection, each State that receives funding under this subtitle 
        shall submit to the Administrator a State compliance report 
        that--
                    ``(i) lists the location and owner of each 
                underground storage tank described in subparagraph (B) 
                in the State that, as of the date of submission of the 
                report, is not in compliance with section 9003; and
                    ``(ii) specifies the date of the last inspection and 
                describes the actions that have been and will be taken 
                to ensure compliance of the underground storage tank 
                listed under clause (i) with this subtitle.
            ``(B) An underground storage tank described in this 
        subparagraph is an underground storage tank that is--
                    ``(i) regulated under this subtitle; and
                    ``(ii) owned or operated by the Federal, State, or 
                local government.
            ``(C) The Administrator shall make each report, received 
        under subparagraph (A), available to the public through an 
        appropriate media.
            ``(2) Financial incentive.--The Administrator may award to a 
        State that develops a report described in paragraph (1), in 
        addition to any other funds that the State is entitled to 
        receive under this subtitle, not more than $50,000, to be used 
        to carry out the report.

[[Page 119 STAT. 1098]]

            ``(3) Not a safe harbor.--This subsection does not relieve 
        any person from any obligation or requirement under this 
        subtitle.''.

    (c) Public Record.--Section 9002 of the Solid Waste Disposal Act (42 
U.S.C. 6991a) is amended by adding at the end the following:
    ``(d) Public Record.--
            ``(1) In general.--The Administrator shall require each 
        State that receives Federal funds to carry out this subtitle to 
        maintain, update at least annually, and make available to the 
        public, in such manner and form as the Administrator shall 
        prescribe (after consultation with States), a record of 
        underground storage tanks regulated under this subtitle.
            ``(2) Considerations.--To the maximum extent practicable, 
        the public record of a State, respectively, shall include, for 
        each year--
                    ``(A) the number, sources, and causes of underground 
                storage tank releases in the State;
                    ``(B) the record of compliance by underground 
                storage tanks in the State with--
                          ``(i) this subtitle; or
                          ``(ii) an applicable State program approved 
                      under section 9004; and
                    ``(C) data on the number of underground storage tank 
                equipment failures in the State.''.

    (d) Incentive for Performance.--Section 9006 of the Solid Waste 
Disposal Act (42 U.S.C. 6991e) is amended by adding at the end the 
following:
    ``(e) Incentive for Performance.--Both of the following may be taken 
into account in determining the terms of a civil penalty under 
subsection (d):
            ``(1) The compliance history of an owner or operator in 
        accordance with this subtitle or a program approved under 
        section 9004.
            ``(2) Any other factor the Administrator considers 
        appropriate.''.

    (e) Table of Contents.--The table of contents for such subtitle I is 
amended by adding the following new item at the end thereof:

``Sec. 9011. Use of funds for release prevention and compliance.''.

SEC. 1527. DELIVERY PROHIBITION.

    (a) In General.--Subtitle I of the Solid Waste Disposal Act (42 
U.S.C. 6991 et seq.) is amended by adding at the end the following:

``SEC. 9012. <<NOTE: 42 USC 6991k.>> DELIVERY PROHIBITION.

    ``(a) Requirements.--
            ``(1) Prohibition <<NOTE: Effective date.>> of delivery or 
        deposit.--Beginning 2 years after the date of enactment of this 
        section, it shall be unlawful to deliver to, deposit into, or 
        accept a regulated substance into an underground storage tank at 
        a facility which has been identified by the Administrator or a 
        State implementing agency to be ineligible for such delivery, 
        deposit, or acceptance.
            ``(2) Guidance.--Within 1 <<NOTE: Deadline.>> year after the 
        date of enactment of this section, the Administrator shall, in 
        consultation with the States, underground storage tank owners, 
        and product delivery industries, publish guidelines detailing 
        the specific

[[Page 119 STAT. 1099]]

        processes and procedures they will use to implement the 
        provisions of this section. The processes and procedures 
        include, at a minimum--
                    ``(A) the criteria for determining which underground 
                storage tank facilities are ineligible for delivery, 
                deposit, or acceptance of a regulated substance;
                    ``(B) the mechanisms for identifying which 
                facilities are ineligible for delivery, deposit, or 
                acceptance of a regulated substance to the underground 
                storage tank owning and fuel delivery industries;
                    ``(C) the process for reclassifying ineligible 
                facilities as eligible for delivery, deposit, or 
                acceptance of a regulated substance;
                    ``(D) one or more processes for providing adequate 
                notice to underground storage tank owners and operators 
                and supplier industries that an underground storage tank 
                has been determined to be ineligible for delivery, 
                deposit, or acceptance or a regulated substance; and
                    ``(E) a delineation of, or a process for 
                determining, the specified geographic areas subject to 
                paragraph (4).
            ``(3) Compliance.--States that receive funding under this 
        subtitle shall, at a minimum, comply with the processes and 
        procedures published under paragraph (2).
            ``(4) Consideration.--
                    ``(A) Rural and remote areas.--Subject to 
                subparagraph (B), the Administrator or a State may 
                consider not treating an underground storage tank as 
                ineligible for delivery, deposit, or acceptance of a 
                regulated substance if such treatment would jeopardize 
                the availability of, or access to, fuel in any rural and 
                remote areas unless an urgent threat to public health, 
                as determined by the Administrator, exists.
                    ``(B) Applicability.--Subparagraph (A) shall apply 
                only during the 180-day period following the date of a 
                determination by the Administrator or the appropriate 
                State under subparagraph (A).

    ``(b) Effect on State Authority.--Nothing in this section shall 
affect or preempt the authority of a State to prohibit the delivery, 
deposit, or acceptance of a regulated substance to an underground 
storage tank.
    ``(c) Defense to Violation.--A person shall not be in violation of 
subsection (a)(1) if the person has not been provided with notice 
pursuant to subsection (a)(2)(D) of the ineligibility of a facility for 
delivery, deposit, or acceptance of a regulated substance as determined 
by the Administrator or a State, as appropriate, under this section.''.
    (b) Enforcement.--Section 9006(d)(2) of such Act (42 U.S.C. 
6991e(d)(2)) is amended as follows:
            (1) By adding the following new subparagraph after 
        subparagraph (D):
            ``(E) the delivery prohibition requirement established by 
        section 9012,''.
            (2) By adding the following new sentence at the end thereof: 
        ``Any person making or accepting a delivery or deposit of a 
        regulated substance to an underground storage tank at an 
        ineligible facility in violation of section 9012 shall also be 
        subject to the same civil penalty for each day of such 
        violation.''.

[[Page 119 STAT. 1100]]

    (c) Table of Contents.--The table of contents for such subtitle I is 
amended by adding the following new item at the end thereof:

``Sec. 9012. Delivery prohibition.''.

SEC. 1528. FEDERAL FACILITIES.

    Section 9007 of the Solid Waste Disposal Act (42 U.S.C. 6991f) is 
amended to read as follows:

``SEC. 9007. <<NOTE: Penalties. Exemptions.>> FEDERAL FACILITIES.

    ``(a) In General.--Each department, agency, and instrumentality of 
the executive, legislative, and judicial branches of the Federal 
Government (1) having jurisdiction over any underground storage tank or 
underground storage tank system, or (2) engaged in any activity 
resulting, or which may result, in the installation, operation, 
management, or closure of any underground storage tank, release response 
activities related thereto, or in the delivery, acceptance, or deposit 
of any regulated substance to an underground storage tank or underground 
storage tank system shall be subject to, and comply with, all Federal, 
State, interstate, and local requirements, both substantive and 
procedural (including any requirement for permits or reporting or any 
provisions for injunctive relief and such sanctions as may be imposed by 
a court to enforce such relief), respecting underground storage tanks in 
the same manner, and to the same extent, as any person is subject to 
such requirements, including the payment of reasonable service charges. 
The Federal, State, interstate, and local substantive and procedural 
requirements referred to in this subsection include, but are not limited 
to, all administrative orders and all civil and administrative penalties 
and fines, regardless of whether such penalties or fines are punitive or 
coercive in nature or are imposed for isolated, intermittent, or 
continuing violations. The United States hereby expressly waives any 
immunity otherwise applicable to the United States with respect to any 
such substantive or procedural requirement (including, but not limited 
to, any injunctive relief, administrative order or civil or 
administrative penalty or fine referred to in the preceding sentence, or 
reasonable service charge). The reasonable service charges referred to 
in this subsection include, but are not limited to, fees or charges 
assessed in connection with the processing and issuance of permits, 
renewal of permits, amendments to permits, review of plans, studies, and 
other documents, and inspection and monitoring of facilities, as well as 
any other nondiscriminatory charges that are assessed in connection with 
a Federal, State, interstate, or local underground storage tank 
regulatory program. Neither the United States, nor any agent, employee, 
or officer thereof, shall be immune or exempt from any process or 
sanction of any State or Federal Court with respect to the enforcement 
of any such injunctive relief. No agent, employee, or officer of the 
United States shall be personally liable for any civil penalty under any 
Federal, State, interstate, or local law concerning underground storage 
tanks with respect to any act or omission within the scope of the 
official duties of the agent, employee, or officer. An agent, employee, 
or officer of the United States shall be subject to any criminal 
sanction (including, but not limited to, any fine or imprisonment) under 
any Federal or State law concerning underground storage tanks, but no 
department, agency, or instrumentality of the executive, legislative, or 
judicial branch of the Federal Government shall be subject to any

[[Page 119 STAT. 1101]]

such sanction. The President may exempt any underground storage tank of 
any department, agency, or instrumentality in the executive branch from 
compliance with such a requirement if he determines it to be in the 
paramount interest of the United States to do so. No such exemption 
shall be granted due to lack of appropriation unless the President shall 
have specifically requested such appropriation as a part of the 
budgetary process and the Congress shall have failed to make available 
such requested appropriation. Any exemption shall be for a period not in 
excess of 1 year, but additional exemptions may be granted for periods 
not to exceed 1 year upon the President's making a new 
determination. <<NOTE: President. Reports.>> The President shall report 
each January to the Congress all exemptions from the requirements of 
this section granted during the preceding calendar year, together with 
his reason for granting each such exemption.

    ``(b) Review of and Report on Federal Underground Storage Tanks.--
            ``(1) <<NOTE: Deadline.>> Review.--Not later than 12 months 
        after the date of enactment of the Underground Storage Tank 
        Compliance Act, each Federal agency that owns or operates one or 
        more underground storage tanks, or that manages land on which 
        one or more underground storage tanks are located, shall submit 
        to the Administrator, the Committee on Energy and Commerce of 
        the United States House of Representatives, and the Committee on 
        the Environment and Public Works of the Senate a compliance 
        strategy report that--
                    ``(A) lists the location and owner of each 
                underground storage tank described in this paragraph;
                    ``(B) lists all tanks that are not in compliance 
                with this subtitle that are owned or operated by the 
                Federal agency;
                    ``(C) specifies the date of the last inspection by a 
                State or Federal inspector of each underground storage 
                tank owned or operated by the agency;
                    ``(D) lists each violation of this subtitle 
                respecting any underground storage tank owned or 
                operated by the agency;
                    ``(E) describes the operator training that has been 
                provided to the operator and other persons having 
                primary daily on-site management responsibility for the 
                operation and maintenance of underground storage tanks 
                owned or operated by the agency; and
                    ``(F) describes the actions that have been and will 
                be taken to ensure compliance for each underground 
                storage tank identified under subparagraph (B).
            ``(2) Not a safe harbor.--This subsection does not relieve 
        any person from any obligation or requirement under this 
        subtitle.''.

SEC. 1529. TANKS ON TRIBAL LANDS.

    (a) In General.--Subtitle I of the Solid Waste Disposal Act (42 
U.S.C. 6991 et seq.) is amended by adding the following at the end 
thereof:

``SEC. 9013. <<NOTE: 42 USC 6991l.>> TANKS ON TRIBAL LANDS.

    ``(a) Strategy.--The <<NOTE: Deadline.>> Administrator, in 
coordination with Indian tribes, shall, not later than 1 year after the 
date of enactment of this section, develop and implement a strategy--
            ``(1) giving priority to releases that present the greatest 
        threat to human health or the environment, to take necessary

[[Page 119 STAT. 1102]]

        corrective action in response to releases from leaking 
        underground storage tanks located wholly within the boundaries 
        of--
                    ``(A) an Indian reservation; or
                    ``(B) any other area under the jurisdiction of an 
                Indian tribe; and
            ``(2) to implement and enforce requirements concerning 
        underground storage tanks located wholly within the boundaries 
        of--
                    ``(A) an Indian reservation; or
                    ``(B) any other area under the jurisdiction of an 
                Indian tribe.

    ``(b) Report.--Not later than 2 years after the date of enactment of 
this section, the Administrator shall submit to Congress a report that 
summarizes the status of implementation and enforcement of this subtitle 
in areas located wholly within--
            ``(1) the boundaries of Indian reservations; and
            ``(2) any other areas under the jurisdiction of an Indian 
        tribe.

The Administrator <<NOTE: Public information.>> shall make the report 
under this subsection available to the public.

    ``(c) Not a Safe Harbor.--This section does not relieve any person 
from any obligation or requirement under this subtitle.
    ``(d) State Authority.--Nothing in this section applies to any 
underground storage tank that is located in an area under the 
jurisdiction of a State, or that is subject to regulation by a State, as 
of the date of enactment of this section.''.
    (b) Table of Contents.--The table of contents for such subtitle I is 
amended by adding the following new item at the end thereof:

``Sec. 9013. Tanks on Tribal lands.''.

SEC. 1530. ADDITIONAL MEASURES TO PROTECT GROUNDWATER.

    (a) In General.--Section 9003 of the Solid Waste Disposal Act (42 
U.S.C. 6991b) is amended by adding the following new subsection at the 
end:
    ``(i) Additional Measures to Protect Groundwater From 
Contamination.--The Administrator shall require each State that receives 
funding under this subtitle to require one of the following:
            ``(1) Tank and piping secondary containment.--(A) Each new 
        underground storage tank, or piping connected to any such new 
        tank, installed after the effective date of this subsection, or 
        any existing underground storage tank, or existing piping 
        connected to such existing tank, that is replaced after the 
        effective date of this subsection, shall be secondarily 
        contained and monitored for leaks if the new or replaced 
        underground storage tank or piping is within 1,000 feet of any 
        existing community water system or any existing potable drinking 
        water well.
            ``(B) In the case of a new underground storage tank system 
        consisting of one or more underground storage tanks and 
        connected by piping, subparagraph (A) shall apply to all 
        underground storage tanks and connected pipes comprising such 
        system.
            ``(C) In the case of a replacement of an existing 
        underground storage tank or existing piping connected to the 
        underground storage tank, subparagraph (A) shall apply only to 
        the specific underground storage tank or piping being replaced,

[[Page 119 STAT. 1103]]

        not to other underground storage tanks and connected pipes 
        comprising such system.
            ``(D) Each installation of a new motor fuel dispenser 
        system, after the effective date of this subsection, shall 
        include under-dispenser spill containment if the new dispenser 
        is within 1,000 feet of any existing community water system or 
        any existing potable drinking water well.
            ``(E) This paragraph shall not apply to repairs to an 
        underground storage tank, piping, or dispenser that are meant to 
        restore a tank, pipe, or dispenser to operating condition.
            ``(F) As used in this subsection:
                    ``(i) The term `secondarily contained' means a 
                release detection and prevention system that meets the 
                requirements of 40 CFR 280.43(g), but shall not include 
                under-dispenser spill containment or control systems.
                    ``(ii) The term `underground storage tank' has the 
                meaning given to it in section 9001, except that such 
                term does not include tank combinations or more than a 
                single underground pipe connected to a tank.
                    ``(iii) The term `installation of a new motor fuel 
                dispenser system' means the installation of a new motor 
                fuel dispenser and the equipment necessary to connect 
                the dispenser to the underground storage tank system, 
                but does not mean the installation of a motor fuel 
                dispenser installed separately from the equipment need 
                to connect the dispenser to the underground storage tank 
                system.
            ``(2) Evidence of financial responsibility and 
        certification.--
                    ``(A) Manufacturer and installer financial 
                responsibility.--A person that manufactures an 
                underground storage tank or piping for an underground 
                storage tank system or that installs an underground 
                storage tank system is required to maintain evidence of 
                financial responsibility under section 9003(d) in order 
                to provide for the costs of corrective actions directly 
                related to releases caused by improper manufacture or 
                installation unless the person can demonstrate 
                themselves to be already covered as an owner or operator 
                of an underground storage tank under section 9003.
                    ``(B) Installer certification.--The Administrator 
                and each State that receives funding under this 
                subtitle, as appropriate, shall require that a person 
                that installs an underground storage tank system is--
                          ``(i) certified or licensed by the tank and 
                      piping manufacturer;
                          ``(ii) certified or licensed by the 
                      Administrator or a State, as appropriate;
                          ``(iii) has their underground storage tank 
                      system installation certified by a registered 
                      professional engineer with education and 
                      experience in underground storage tank system 
                      installation;
                          ``(iv) has had their installation of the 
                      underground storage tank inspected and approved by 
                      the Administrator or the State, as appropriate;
                          ``(v) compliant with a code of practice 
                      developed by a nationally recognized association 
                      or independent

[[Page 119 STAT. 1104]]

                      testing laboratory and in accordance with the 
                      manufacturer's instructions; or
                          ``(vi) compliant with another method that is 
                      determined by the Administrator or a State, as 
                      appropriate, to be no less protective of human 
                      health and the environment.
                    ``(C) Savings clause.--Nothing in subparagraph (A) 
                alters or affects the liability of any owner or operator 
                of an underground storage tank.''.

    (b) Effective Date.--This <<NOTE: 42 USC 6991b note.>> subsection 
shall take effect 18 months after the date of enactment of this 
subsection.

    (c) Promulgation of <<NOTE: 42 USC 6991b note.>> Regulations or 
Guidelines.--The Administrator shall issue regulations or guidelines 
implementing the requirements of this subsection, including guidance to 
differentiate between the terms ``repair'' and ``replace'' for the 
purposes of section 9003(i)(1) of the Solid Waste Disposal Act.

    (d) Penalties.--Section 9006(d)(2) of such Act (42 U.S.C. 
6991e(d)(2)) is amended as follows:
            (1) By striking ``or'' at the end of subparagraph (B).
            (2) By inserting ``; or'' at the end of subparagraph (C).
            (3) By adding the following new subparagraph after 
        subparagraph (C):
                    ``(D) the requirements established in section 
                9003(i),''.

SEC. 1531. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--Subtitle I of the Solid Waste Disposal Act (42 
U.S.C. 6991 et seq.) is amended by adding at the end the following:

``SEC. 9014. <<NOTE: 42 USC 6991m.>> AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to the Administrator the 
following amounts:
            ``(1) To carry out subtitle I (except sections 9003(h), 
        9005(c), 9011, and 9012) $50,000,000 for each of fiscal years 
        2005 through 2009.
            ``(2) From the Trust Fund, notwithstanding section 
        9508(c)(1) of the Internal Revenue Code of 1986--
                    ``(A) to carry out section 9003(h) (except section 
                9003(h)(12)) $200,000,000 for each of fiscal years 2005 
                through 2009;
                    ``(B) to carry out section 9003(h)(12), $200,000,000 
                for each of fiscal years 2005 through 2009;
                    ``(C) to carry out sections 9003(i), 9004(f), and 
                9005(c) $100,000,000 for each of fiscal years 2005 
                through 2009; and
                    ``(D) to carry out sections 9010, 9011, 9012, and 
                9013 $55,000,000 for each of fiscal years 2005 through 
                2009.''.

    (b) Table of Contents.--The table of contents for such subtitle I is 
amended by adding the following new item at the end thereof:

``Sec. 9014. Authorization of appropriations.''.

SEC. 1532. CONFORMING AMENDMENTS.

    (a) In General.--Section 9001 of the Solid Waste Disposal Act (42 
U.S.C. 6991) is amended as follows:
            (1) By striking ``For the purposes of this subtitle--'' and 
        inserting ``In this subtitle:''.

[[Page 119 STAT. 1105]]

            (2) By redesignating paragraphs (1), (2), (3), (4), (5), 
        (6), (7), and (8) as paragraphs (10), (7), (4), (3), (8), (5), 
        (2), and (6), respectively.
            (3) By inserting before paragraph (2) (as redesignated by 
        paragraph (2) of this subsection) the following:
            ``(1) Indian tribe.--
                    ``(A) In general.--The term `Indian tribe' means any 
                Indian tribe, band, nation, or other organized group or 
                community that is recognized as being eligible for 
                special programs and services provided by the United 
                States to Indians because of their status as Indians.
                    ``(B) Inclusions.--The term `Indian tribe' includes 
                an Alaska Native village, as defined in or established 
                under the Alaska Native Claims Settlement Act (43 U.S.C. 
                1601 et seq.); and''.
            (4) By inserting after paragraph (8) (as redesignated by 
        paragraph (2) of this subsection) the following:
            ``(9) Trust fund.--The term `Trust Fund' means the Leaking 
        Underground Storage Tank Trust Fund established by section 9508 
        of the Internal Revenue Code of 1986.''.

    (b) Conforming Amendments.--The Solid Waste Disposal Act (42 U.S.C. 
6901 and following) is amended as follows:
            (1) Section 9003(f) (42 U.S.C. 6991b(f)) is amended--
                    (A) in paragraph (1), by striking ``9001(2)(B)'' and 
                inserting ``9001(7)(B)''; and
                    (B) in paragraphs (2) and (3), by striking 
                ``9001(2)(A)'' each place it appears and inserting 
                ``9001(7)(A)''.
            (2) Section 9003(h) (42 U.S.C. 6991b(h)) is amended in 
        paragraphs (1), (2)(C), (7)(A), and (11) by striking ``Leaking 
        Underground Storage Tank Trust Fund'' each place it appears and 
        inserting ``Trust Fund''.
            (3) Section 9009 (42 U.S.C. 6991h) is amended--
                    (A) in subsection (a), by striking ``9001(2)(B)'' 
                and inserting ``9001(7)(B)''; and
                    (B) in subsection (d), by striking ``section 9001(1) 
                (A) and (B)'' and inserting ``subparagraphs (A) and (B) 
                of section 9001(10)''.

SEC. 1533. TECHNICAL AMENDMENTS.

    The Solid Waste Disposal Act is amended as follows:
            (1) Section 9001(4)(A) (42 U.S.C. 6991(4)(A)) is amended by 
        striking ``sustances'' and inserting ``substances''.
            (2) Section 9003(f)(1) (42 U.S.C. 6991b(f)(1)) is amended by 
        striking ``subsection (c) and (d) of this section'' and 
        inserting ``subsections (c) and (d)''.
            (3) Section 9004(a) (42 U.S.C. 6991c(a)) is amended by 
        striking ``in 9001(2) (A) or (B) or both'' and inserting ``in 
        subparagraph (A) or (B) of section 9001(7)''.
            (4) Section 9005 (42 U.S.C. 6991d) is amended--
                    (A) in subsection (a), by striking ``study taking'' 
                and inserting ``study, taking'';
                    (B) in subsection (b)(1), by striking ``relevent'' 
                and inserting ``relevant''; and
                    (C) in subsection (b)(4), by striking 
                ``Evironmental'' and inserting ``Environmental''.

[[Page 119 STAT. 1106]]

                       Subtitle C--Boutique Fuels

SEC. 1541. REDUCING THE PROLIFERATION OF BOUTIQUE FUELS.

    (a) Temporary Waivers During Supply Emergencies.--Section 
211(c)(4)(C) of the Clean Air Act (42 U.S.C. 7545(c)(4)(C)) is amended 
by inserting ``(i)'' after ``(C)'' and by adding the following new 
clauses at the end thereof:
    ``(ii) The Administrator may temporarily waive a control or 
prohibition respecting the use of a fuel or fuel additive required or 
regulated by the Administrator pursuant to subsection (c), (h), (i), 
(k), or (m) of this section or prescribed in an applicable 
implementation plan under section 110 approved by the Administrator 
under clause (i) of this subparagraph if, after consultation with, and 
concurrence by, the Secretary of Energy, the Administrator determines 
that--
            ``(I) extreme and unusual fuel or fuel additive supply 
        circumstances exist in a State or region of the Nation which 
        prevent the distribution of an adequate supply of the fuel or 
        fuel additive to consumers;
            ``(II) such extreme and unusual fuel and fuel additive 
        supply circumstances are the result of a natural disaster, an 
        Act of God, a pipeline or refinery equipment failure, or another 
        event that could not reasonably have been foreseen or prevented 
        and not the lack of prudent planning on the part of the 
        suppliers of the fuel or fuel additive to such State or region; 
        and
            ``(III) it is in the public interest to grant the waiver 
        (for example, when a waiver is necessary to meet projected 
        temporary shortfalls in the supply of the fuel or fuel additive 
        in a State or region of the Nation which cannot otherwise be 
        compensated for).

    ``(iii) If the Administrator makes the determinations required under 
clause (ii), such a temporary extreme and unusual fuel and fuel additive 
supply circumstances waiver shall be permitted only if--
            ``(I) the waiver applies to the smallest geographic area 
        necessary to address the extreme and unusual fuel and fuel 
        additive supply circumstances;
            ``(II) the waiver is effective for a period of 20 calendar 
        days or, if the Administrator determines that a shorter waiver 
        period is adequate, for the shortest practicable time period 
        necessary to permit the correction of the extreme and unusual 
        fuel and fuel additive supply circumstances and to mitigate 
        impact on air quality;
            ``(III) the waiver permits a transitional period, the exact 
        duration of which shall be determined by the Administrator (but 
        which shall be for the shortest practicable period), after the 
        termination of the temporary waiver to permit wholesalers and 
        retailers to blend down their wholesale and retail inventory;
            ``(IV) the waiver applies to all persons in the motor fuel 
        distribution system; and
            ``(V) the Administrator has given public notice to all 
        parties in the motor fuel distribution system, and local and 
        State regulators, in the State or region to be covered by the 
        waiver.

The term `motor fuel distribution system' as used in this clause shall 
be defined by the Administrator through rulemaking.

[[Page 119 STAT. 1107]]

    ``(iv) <<NOTE: Regulations. Deadline.>> Within 180 days of the date 
of enactment of this clause, the Administrator shall promulgate 
regulations to implement clauses (ii) and (iii).

    ``(v) Nothing in this subparagraph shall--
            ``(I) limit or otherwise affect the application of any other 
        waiver authority of the Administrator pursuant to this section 
        or pursuant to a regulation promulgated pursuant to this 
        section; and
            ``(II) subject any State or person to an enforcement action, 
        penalties, or liability solely arising from actions taken 
        pursuant to the issuance of a waiver under this subparagraph.''.

    (b) Limit on Number of Boutique Fuels.--Section 211(c)(4)(C) of the 
Clean Air Act (42 U.S.C. 7545(c)(4)(C)), as amended by subsection (a), 
is further amended by adding at the end the following:
    ``(v)(I) The Administrator shall have no authority, when considering 
a State implementation plan or a State implementation plan revision, to 
approve under this paragraph any fuel included in such plan or revision 
if the effect of such approval increases the total number of fuels 
approved under this paragraph as of September 1, 2004, in all State 
implementation plans.
    ``(II) <<NOTE: Deadline. Federal Register, publication. Public 
information.>> The Administrator, in consultation with the Secretary of 
Energy, shall determine the total number of fuels approved under this 
paragraph as of September 1, 2004, in all State implementation plans and 
shall publish a list of such fuels, including the States and Petroleum 
Administration for Defense District in which they are used, in the 
Federal Register for public review and comment no later than 90 days 
after enactment.

    ``(III) The Administrator shall remove a fuel from the list 
published under subclause (II) if a fuel ceases to be included in a 
State implementation plan or if a fuel in a State implementation plan is 
identical to a Federal fuel formulation implemented by the 
Administrator, but the Administrator shall not reduce the total number 
of fuels authorized under the list published under subclause (II).
    ``(IV) Subclause (I) shall not limit the Administrator's authority 
to approve a control or prohibition respecting any new fuel under this 
paragraph in a State implementation plan or revision to a State 
implementation plan if such new fuel--
            ``(aa) completely replaces a fuel on the list published 
        under subclause (II); or
            ``(bb) does not increase the total number of fuels on the 
        list published under subclause (II) as of September 1, 2004.

In the <<NOTE: Supply. Federal Register, publication.>> event that the 
total number of fuels on the list published under subclause (II) at the 
time of the Administrator's consideration of a control or prohibition 
respecting a new fuel is lower than the total number of fuels on such 
list as of September 1, 2004, the Administrator may approve a control or 
prohibition respecting a new fuel under this subclause if the 
Administrator, after consultation with the Secretary of Energy, 
publishes in the Federal Register after notice and comment a finding 
that, in the Administrator's judgment, such control or prohibition 
respecting a new fuel will not cause fuel supply or distribution 
interruptions or have a significant adverse impact on fuel producibility 
in the affected area or contiguous areas.

    ``(V) The Administrator shall have no authority under this 
paragraph, when considering any particular State's implementation

[[Page 119 STAT. 1108]]

plan or a revision to that State's implementation plan, to approve any 
fuel unless that fuel was, as of the date of such consideration, 
approved in at least one State implementation plan in the applicable 
Petroleum Administration for Defense District. However, the 
Administrator may approve as part of a State implementation plan or 
State implementation plan revision a fuel with a summertime Reid Vapor 
Pressure of 7.0 psi. In no event shall such approval by the 
Administrator cause an increase in the total number of fuels on the list 
published under subclause (II).
    ``(VI) Nothing in this clause shall be construed to have any effect 
regarding any available authority of States to require the use of any 
fuel additive registered in accordance with subsection (b), including 
any fuel additive registered in accordance with subsection (b) after the 
enactment of this subclause.''.
    (c) Study and Report to Congress on Boutique Fuels.--
            (1) Joint study.--The Administrator of the Environmental 
        Protection Agency and the Secretary shall undertake a study of 
        the effects on air quality, on the number of fuel blends, on 
        fuel availability, on fuel fungibility, and on fuel costs of the 
        State plan provisions adopted pursuant to section 211(c)(4)(C) 
        of the Clean Air Act (42 U.S.C. 7545(c)(4)(C)).
            (2) Focus of study.--The primary focus of the study required 
        under paragraph (1) shall be to determine how to develop a 
        Federal fuels system that maximizes motor fuel fungibility and 
        supply, addresses air quality requirements, and reduces motor 
        fuel price volatility including that which has resulted from the 
        proliferation of boutique fuels, and to recommend to Congress 
        such legislative changes as are necessary to implement such a 
        system. The study should include the impacts on overall energy 
        supply, distribution, and use as a result of the legislative 
        changes recommended.
            (3) Conduct of study.--In <<NOTE: Science and 
        technology.>> carrying out their joint duties under this 
        section, the Administrator and the Secretary shall use sound 
        science and objective science practices, shall consider the best 
        available science, shall use data collected by accepted means 
        and shall consider and include a description of the weight of 
        the scientific evidence. The Administrator and the Secretary 
        shall coordinate the study required by this section with other 
        studies required by the Act.
            (4) Responsibility of administrator.--In carrying out the 
        study required by this section, the Administrator shall 
        coordinate obtaining comments from affected parties interested 
        in the air quality impact assessment portion of the study.
            (5) Responsibility of secretary.--In carrying out the study 
        required by this section, the Secretary shall coordinate 
        obtaining comments from affected parties interested in the fuel 
        availability, number of fuel blends, fuel fungibility, and fuel 
        costs portion of the study.
            (6) Report to congress.--
        The <<NOTE: Deadline.>> Administrator and the Secretary jointly 
        shall submit the results of the study required by this section 
        in a report to the Congress not later than 12 months after the 
        date of the enactment of this Act, together with any recommended 
        regulatory and legislative changes. Such report shall be 
        submitted to the Committee on Energy and Commerce of the United 
        States House of Representatives and the Committees on Energy and 
        Natural Resources and on Environment and Public Works of the 
        Senate.

[[Page 119 STAT. 1109]]

            (7) Authorization of appropriations.--There is authorized to 
        be appropriated jointly to the Administrator and the Secretary 
        $500,000 for the completion of the study required under this 
        subsection.

    (d) Definitions.--In this section:
            (1) The term ``Administrator'' means the Administrator of 
        the Environmental Protection Agency.
            (2) The term ``fuel'' means gasoline, diesel fuel, and any 
        other liquid petroleum product commercially known as gasoline 
        and diesel fuel for use in highway and nonroad motor vehicles.
            (3) The term ``a control or prohibition respecting a new 
        fuel'' means a control or prohibition on the formulation, 
        composition, or emissions characteristics of a fuel that would 
        require the increase or decrease of a constituent in gasoline or 
        diesel fuel.

                        TITLE XVI--CLIMATE CHANGE

        Subtitle A--National Climate Change Technology Deployment

SEC. 1601. GREENHOUSE GAS INTENSITY REDUCING TECHNOLOGY STRATEGIES.

    Title XVI of the Energy Policy Act of 1992 (42 U.S.C. 13381 et seq.) 
is amended by adding at the end the following:

``SEC. 1610. <<NOTE: 42 USC 13389.>> GREENHOUSE GAS INTENSITY REDUCING 
            STRATEGIES.

    ``(a) Definitions.--In this section:
            ``(1) Advisory committee.--The term `Advisory Committee' 
        means the Climate Change Technology Advisory Committee 
        established under subsection (f)(1).
            ``(2) Carbon sequestration.--The term `carbon sequestration' 
        means the capture of carbon dioxide through terrestrial, 
        geological, biological, or other means, which prevents the 
        release of carbon dioxide into the atmosphere.
            ``(3) Committee.--The term `Committee' means the Committee 
        on Climate Change Technology established under subsection 
        (b)(1).
            ``(4) Developing country.--The term `developing country' has 
        the meaning given the term in section 1608(m).
            ``(5) Greenhouse gas.--The term `greenhouse gas' means--
                    ``(A) carbon dioxide;
                    ``(B) methane;
                    ``(C) nitrous oxide;
                    ``(D) hydrofluorocarbons;
                    ``(E) perfluorocarbons; and
                    ``(F) sulfur hexafluoride.
            ``(6) Greenhouse gas intensity.--The term `greenhouse gas 
        intensity' means the ratio of greenhouse gas emissions to 
        economic output.
            ``(7) National laboratory.--The term `National Laboratory' 
        has the meaning given the term in section 3(3) of the Energy 
        Policy Act of 2005.

    ``(b) Committee on <<NOTE: Establishment. Deadline.>> Climate Change 
Technology.--

[[Page 119 STAT. 1110]]

            ``(1) In general.--Not later than 180 days after the date of 
        enactment of this section, the President shall establish a 
        Committee on Climate Change Technology to--
                    ``(A) integrate current Federal climate reports; and
                    ``(B) coordinate Federal climate change technology 
                activities and programs carried out in furtherance of 
                the strategy developed under subsection (c)(1).
            ``(2) Membership.--The Committee shall be composed of at 
        least 7 members, including--
                    ``(A) the Secretary, who shall chair the Committee;
                    ``(B) the Secretary of Commerce;
                    ``(C) the Chairman of the Council on Environmental 
                Quality;
                    ``(D) the Secretary of Agriculture;
                    ``(E) the Administrator of the Environmental 
                Protection Agency;
                    ``(F) the Secretary of Transportation;
                    ``(G) the Director of the Office of Science and 
                Technology Policy; and
                    ``(H) other representatives as may be determined by 
                the President.
            ``(3) Staff.--The members of the Committee shall provide 
        such personnel as are necessary to enable the Committee to 
        perform its duties.

    ``(c) National <<NOTE: Research and development. Deadline.>> Climate 
Change Technology Policy.--
            ``(1) In general.--Not later than 18 months after the date 
        of enactment of this section, the Committee shall, based on 
        applicable Federal climate reports, submit to the Secretary and 
        the President a national strategy to promote the deployment and 
        commercialization of greenhouse gas intensity reducing 
        technologies and practices developed through research and 
        development programs conducted by the National Laboratories, 
        other Federal research facilities, institutions of higher 
        education, and the private sector.
            ``(2) Updates.--The Committee shall--
                    ``(A) <<NOTE: Public information.>> at the time of 
                submission of the strategy to the President under 
                paragraph (1), also make the strategy available to the 
                public; and
                    ``(B) update the strategy every 5 years, or more 
                frequently as the Committee determines to be necessary.

    ``(d) Climate <<NOTE: Establishment. Deadline.>> Change Technology 
Program.--Not later than 180 days after the date on which the Committee 
is established under subsection (b)(1), the Secretary, in consultation 
with the Committee, shall establish within the Department of Energy the 
Climate Change Technology Program to--
            ``(1) assist the Committee in the interagency coordination 
        of climate change technology research, development, 
        demonstration, and deployment to reduce greenhouse gas 
        intensity; and
            ``(2) carry out the programs authorized under this section.

    ``(e) Technology Inventory.--
            ``(1) In general.--The <<NOTE: Public 
        information.>> Secretary shall conduct and make public an 
        inventory and evaluation of greenhouse gas intensity reducing 
        technologies that have been developed, or are under development, 
        by the National Laboratories, other Federal research facilities, 
        institutions of higher education, and the private sector to 
        determine which technologies are suitable for commercialization 
        and deployment.

[[Page 119 STAT. 1111]]

            ``(2) Report.--Not later than 180 days after the completion 
        of the inventory under paragraph (1), the Secretary shall submit 
        to Congress a report that includes the results of the completed 
        inventory and any recommendations of the Secretary.
            ``(3) Use.--The Secretary shall use the results of the 
        inventory as guidance in the commercialization and deployment of 
        greenhouse gas intensity reducing technologies.
            ``(4) Updated inventory.--The Secretary shall--
                    ``(A) periodically update the inventory under 
                paragraph (1), including when determined necessary by 
                the Committee; and
                    ``(B) make the updated inventory available to the 
                public.

    ``(f) Climate Change Technology Advisory Committee.--
            ``(1) In general.--The Secretary, in consultation with the 
        Committee, may establish under section 624 of the Department of 
        Energy Organization Act (42 U.S.C. 7234) a Climate Change 
        Technology Advisory Committee to identify statutory, regulatory, 
        economic, and other barriers to the commercialization and 
        deployment of greenhouse gas intensity reducing technologies and 
        practices in the United States.
            ``(2) Composition.--The Advisory Committee shall be composed 
        of the following members, to be appointed by the Secretary, in 
        consultation with the Committee:
                    ``(A) 1 representative shall be appointed from each 
                National Laboratory.
                    ``(B) 3 members shall be representatives of energy-
                producing trade organizations.
                    ``(C) 3 members shall represent energy-intensive 
                trade organizations.
                    ``(D) 3 members shall represent groups that 
                represent end-use energy and other consumers.
                    ``(E) 3 members shall be employees of the Federal 
                Government who are experts in energy technology, 
                intellectual property, and tax.
                    ``(F) 3 members shall be representatives of 
                institutions of higher education with expertise in 
                energy technology development that are recommended by 
                the National Academy of Engineering.
            ``(3) Report.--Not later than 1 year after the date of 
        enactment of this section and annually thereafter, the Advisory 
        Committee shall submit to the Committee a report that 
        describes--
                    ``(A) the findings of the Advisory Committee; and
                    ``(B) any recommendations of the Advisory Committee 
                for the removal or reduction of barriers to 
                commercialization, deployment, and increasing the use of 
                greenhouse gas intensity reducing technologies and 
                practices.

    ``(g) Greenhouse Gas Intensity Reducing Technology Deployment.--
            ``(1) In general.--Based on the strategy developed under 
        subsection (c)(1), the technology inventory conducted under 
        subsection (e)(1), the greenhouse gas intensity reducing 
        technology study report submitted under subsection (e)(2), and 
        reports under subsection (f)(3), if any, the Committee shall 
        develop recommendations that would provide for the removal of

[[Page 119 STAT. 1112]]

        domestic barriers to the commercialization and deployment of 
        greenhouse gas intensity reducing technologies and practices.
            ``(2) Requirements.--In developing the recommendations under 
        paragraph (1), the Committee shall consider in the aggregate--
                    ``(A) the cost-effectiveness of the technology;
                    ``(B) fiscal and regulatory barriers;
                    ``(C) statutory and other barriers; and
                    ``(D) intellectual property issues.
            ``(3) Demonstration projects.--In developing recommendations 
        under paragraph (1), the Committee may identify the need for 
        climate change technology demonstration projects.
            ``(4) Report.--Not later than 18 months after the date of 
        enactment of this section, the Committee shall submit to the 
        President and Congress a report that--
                    ``(A) identifies, based on the report submitted 
                under subsection (f)(3), any barriers to, and commercial 
                risks associated with, the deployment of greenhouse gas 
                intensity reducing technologies; and
                    ``(B) includes a plan for carrying out demonstration 
                projects.
            ``(5) Updates.--The Committee shall--
                    ``(A) <<NOTE: Public information.>> at the time of 
                submission of the report to Congress under paragraph 
                (4), also make the report available to the public; and
                    ``(B) update the report every 5 years, or more 
                frequently as the Committee determines to be necessary.

    ``(h) Procedures for <<NOTE: Notification. Public 
information.>> Calculating, Monitoring, and Analyzing Greenhouse Gas 
Intensity.--The Secretary, in collaboration with the Committee and the 
National Institute of Standards and Technology, and after public notice 
and opportunity for comment, shall develop standards and best practices 
for calculating, monitoring, and analyzing greenhouse gas intensity.

    ``(i) Demonstration Projects.--
            ``(1) In general.--The Secretary shall, subject to the 
        availability of appropriations, support demonstration projects 
        that--
                    ``(A) increase the reduction of the greenhouse gas 
                intensity to levels below that which would be achieved 
                by technologies being used in the United States as of 
                the date of enactment of this section;
                    ``(B) maximize the potential return on Federal 
                investment;
                    ``(C) demonstrate distinct roles in public-private 
                partnerships;
                    ``(D) produce a large-scale reduction of greenhouse 
                gas intensity if commercialization occurred; and
                    ``(E) support a diversified portfolio to mitigate 
                the uncertainty associated with a single technology.
            ``(2) Cost sharing.--In supporting a demonstration project 
        under this subsection, the Secretary shall require cost-sharing 
        in accordance with section 988 of the Energy Policy Act of 2005.
            ``(3) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as are necessary to carry out this 
        subsection.

[[Page 119 STAT. 1113]]

    ``(j) Cooperative Research and Development Agreements.--In carrying 
out greenhouse gas intensity reduction research and technology 
deployment activities under this subtitle, the Secretary may enter into 
cooperative research and development agreements under section 12 of the 
Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a).''.

Subtitle B--Climate Change Technology Deployment in Developing Countries

SEC. 1611. CLIMATE CHANGE TECHNOLOGY DEPLOYMENT IN DEVELOPING COUNTRIES.

    The Global Environmental Protection Assistance Act of 1989 (Public 
Law 101-240; 103 Stat. 2521) is amending by adding at the end the 
following:

         ``PART C--TECHNOLOGY DEPLOYMENT IN DEVELOPING COUNTRIES

``SEC. 731. <<NOTE: 22 USC 7901.>> DEFINITIONS.

    ``In this part:
            ``(1) Carbon sequestration.--The term `carbon sequestration' 
        means the capture of carbon dioxide through terrestrial, 
        geological, biological, or other means, which prevents the 
        release of carbon dioxide into the atmosphere.
            ``(2) Greenhouse gas.--The term `greenhouse gas' means 
        carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, 
        perfluorocarbons, and sulfur hexafluoride.
            ``(3) Greenhouse gas intensity.--The term `greenhouse gas 
        intensity' means the ratio of greenhouse gas emissions to 
        economic output.

``SEC. 732. <<NOTE: 22 USC 7902.>> REDUCTION OF GREENHOUSE GAS 
            INTENSITY.

    ``(a) Lead Agency.--
            ``(1) In general.--The Department of State shall act as the 
        lead agency for integrating into United States foreign policy 
        the goal of reducing greenhouse gas intensity in developing 
        countries.
            ``(2) Reports.--
                    ``(A) Initial report.--Not later than 180 days after 
                the date of enactment of this part, the Secretary of 
                State shall submit to the appropriate authorizing and 
                appropriating committees of Congress an initial report, 
                based on the most recent information available to the 
                Secretary from reliable public sources, that identifies 
                the 25 developing countries that are the largest 
                greenhouse gas emitters, including for each country--
                          ``(i) an estimate of the quantity and types of 
                      energy used;
                          ``(ii) an estimate of the greenhouse gas 
                      intensity of the energy, manufacturing, 
                      agricultural, and transportation sectors;
                          ``(iii) a description the progress of any 
                      significant projects undertaken to reduce 
                      greenhouse gas intensity;

[[Page 119 STAT. 1114]]

                          ``(iv) a description of the potential for 
                      undertaking projects to reduce greenhouse gas 
                      intensity;
                          ``(v) a description of any obstacles to the 
                      reduction of greenhouse gas intensity; and
                          ``(vi) a description of the best practices 
                      learned by the Agency for International 
                      Development from conducting previous pilot and 
                      demonstration projects to reduce greenhouse gas 
                      intensity.
                    ``(B) Update.--Not later than 18 months after the 
                date on which the initial report is submitted under 
                subparagraph (A), the Secretary shall submit to the 
                appropriate authorizing and appropriating committees of 
                Congress, based on the best information available to the 
                Secretary, an update of the information provided in the 
                initial report.
                    ``(C) Use.--
                          ``(i) Initial report.--The Secretary of State 
                      shall use the initial report submitted under 
                      subparagraph (A) to establish baselines for the 
                      developing countries identified in the report with 
                      respect to the information provided under clauses 
                      (i) and (ii) of that subparagraph.
                          ``(ii) Annual reports.--The Secretary of State 
                      shall use the annual reports prepared under 
                      subparagraph (B) and any other information 
                      available to the Secretary to track the progress 
                      of the developing countries with respect to 
                      reducing greenhouse gas intensity.

    ``(b) Projects.--The Secretary of State, in coordination with 
Administrator of the United States Agency for International Development, 
shall (directly or through agreements with the World Bank, the 
International Monetary Fund, the Overseas Private Investment 
Corporation, and other development institutions) provide assistance to 
developing countries specifically for projects to reduce greenhouse gas 
intensity, including projects to--
            ``(1) leverage, through bilateral agreements, funds for 
        reduction of greenhouse gas intensity;
            ``(2) increase private investment in projects and activities 
        to reduce greenhouse gas intensity; and
            ``(3) expedite the deployment of technology to reduce 
        greenhouse gas intensity.

    ``(c) Focus.--In providing assistance under subsection (b), the 
Secretary of State shall focus on--
            ``(1) promoting the rule of law, property rights, contract 
        protection, and economic freedom; and
            ``(2) increasing capacity, infrastructure, and training.

    ``(d) Priority.--In providing assistance under subsection (b), the 
Secretary of State shall give priority to projects in the 25 developing 
countries identified in the report submitted under subsection (a)(2)(A).

``SEC. 733. <<NOTE: 22 USC 7903.>> TECHNOLOGY INVENTORY FOR DEVELOPING 
            COUNTRIES.

    ``(a) In General.--The Secretary of Energy, in coordination with the 
Secretary of State and the Secretary of Commerce, shall conduct an 
inventory of greenhouse gas intensity reducing technologies that are 
developed, or under development in the United States, to identify 
technologies that are suitable for transfer to, deployment in, and 
commercialization in the developing countries identified in the report 
submitted under section 732(a)(2)(A).

[[Page 119 STAT. 1115]]

    ``(b) Report.--Not later than 180 days after the completion of the 
inventory under subsection (a), the Secretary of State and the Secretary 
of Energy shall jointly submit to Congress a report that--
            ``(1) includes the results of the completed inventory;
            ``(2) identifies obstacles to the transfer, deployment, and 
        commercialization of the inventoried technologies;
            ``(3) includes results from previous Federal reports related 
        to the inventoried technologies; and
            ``(4) includes an analysis of market forces related to the 
        inventoried technologies.

``SEC. 734. <<NOTE: 22 USC 7904.>> TRADE-RELATED BARRIERS TO EXPORT OF 
            GREENHOUSE GAS INTENSITY REDUCING TECHNOLOGIES.

    ``(a) In General.--Not <<NOTE: Deadline.>> later than 1 year after 
the date of enactment of this part, the United States Trade 
Representative shall (as appropriate and consistent with applicable 
bilateral, regional, and mutual trade agreements)--
            ``(1) identify trade-relations barriers maintained by 
        foreign countries to the export of greenhouse gas intensity 
        reducing technologies and practices from the United States to 
        the developing countries identified in the report submitted 
        under section 732(a)(2)(A); and
            ``(2) negotiate with foreign countries for the removal of 
        those barriers.

    ``(b) Annual Report.--Not later than 1 year after the date on which 
a report is submitted under subsection (a)(1) and annually thereafter, 
the United States Trade Representative shall submit to Congress a report 
that describes any progress made with respect to removing the barriers 
identified by the United States Trade Representative under subsection 
(a)(1).

``SEC. 735. <<NOTE: 22 USC 7905.>> GREENHOUSE GAS INTENSITY REDUCING 
            TECHNOLOGY EXPORT INITIATIVE.

    ``(a) In General.--There is <<NOTE: Establishment.>> established an 
interagency working group to carry out a Greenhouse Gas Intensity 
Reducing Technology Export Initiative to--
            ``(1) promote the export of greenhouse gas intensity 
        reducing technologies and practices from the United States;
            ``(2) identify developing countries that should be 
        designated as priority countries for the purpose of exporting 
        greenhouse gas intensity reducing technologies and practices, 
        based on the report submitted under section 732(a)(2)(A);
            ``(3) identify potential barriers to adoption of exported 
        greenhouse gas intensity reducing technologies and practices 
        based on the reports submitted under section 734; and
            ``(4) identify previous efforts to export energy 
        technologies to learn best practices.

    ``(b) Composition.--The working group shall be composed of--
            ``(1) the Secretary of State, who shall act as the head of 
        the working group;
            ``(2) the Administrator of the United States Agency for 
        International Development;
            ``(3) the United States Trade Representative;
            ``(4) a designee of the Secretary of Energy;
            ``(5) a designee of the Secretary of Commerce; and
            ``(6) a designee of the Administrator of the Environmental 
        Protection Agency.

[[Page 119 STAT. 1116]]

    ``(c) Performance Reviews and Reports.--Not later than 180 days 
after the date of enactment of this part and each year thereafter, the 
interagency working group shall--
            ``(1) conduct a performance review of actions taken and 
        results achieved by the Federal Government (including each of 
        the agencies represented on the interagency working group) to 
        promote the export of greenhouse gas intensity reducing 
        technologies and practices from the United States; and
            ``(2) submit to the appropriate authorizing and 
        appropriating committees of Congress a report that describes the 
        results of the performance reviews and evaluates progress in 
        promoting the export of greenhouse gas intensity reducing 
        technologies and practices from the United States, including any 
        recommendations for increasing the export of the technologies 
        and practices.

``SEC. 736. <<NOTE: 22 USC 7906.>> TECHNOLOGY DEMONSTRATION PROJECTS.

    ``(a) In General.--The Secretary of State, in coordination with the 
Secretary of Energy and the Administrator of the United States Agency 
for International Development, shall promote the adoption of 
technologies and practices that reduce greenhouse gas intensity in 
developing countries in accordance with this section.
    ``(b) Demonstration Projects.--
            ``(1) In general.--The Secretaries and the Administrator 
        shall plan, coordinate, and carry out, or provide assistance for 
        the planning, coordination, or carrying out of, demonstration 
        projects under this section in at least 10 eligible countries, 
        as determined by the Secretaries and the Administrator.
            ``(2) Eligibility.--A country shall be eligible for 
        assistance under this subsection if the Secretaries and the 
        Administrator determine that the country has demonstrated a 
        commitment to--
                    ``(A) just governance, including--
                          ``(i) promoting the rule of law;
                          ``(ii) respecting human and civil rights;
                          ``(iii) protecting private property rights; 
                      and
                          ``(iv) combating corruption; and
                    ``(B) economic freedom, including economic policies 
                that--
                          ``(i) encourage citizens and firms to 
                      participate in global trade and international 
                      capital markets;
                          ``(ii) promote private sector growth and the 
                      sustainable management of natural resources; and
                          ``(iii) strengthen market forces in the 
                      economy.
            ``(3) Selection.--In determining which eligible countries to 
        provide assistance to under paragraph (1), the Secretaries and 
        the Administrator shall consider--
                    ``(A) the opportunity to reduce greenhouse gas 
                intensity in the eligible country; and
                    ``(B) the opportunity to generate economic growth in 
                the eligible country.
            ``(4) Types of projects.--Demonstration projects under this 
        section may include--
                    ``(A) coal gasification, coal liquefaction, and 
                clean coal projects;
                    ``(B) carbon sequestration projects;
                    ``(C) cogeneration technology initiatives;

[[Page 119 STAT. 1117]]

                    ``(D) renewable projects; and
                    ``(E) lower emission transportation.

``SEC. 737. <<NOTE: 22 USC 7907.>> FELLOWSHIP AND EXCHANGE PROGRAMS.

    ``The Secretary of State, in coordination with the Secretary of 
Energy, the Secretary of Commerce, and the Administrator of the 
Environmental Protection Agency, shall carry out fellowship and exchange 
programs under which officials from developing countries visit the 
United States to acquire expertise and knowledge of best practices to 
reduce greenhouse gas intensity in their countries.

``SEC. 738. <<NOTE: 22 USC 7908.>> AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated such sums as are necessary 
to carry out this part.

``SEC. 739. <<NOTE: 22 USC 7901 note.>> EFFECTIVE DATE.

    ``Except as otherwise provided in this part, this part takes effect 
on October 1, 2005.''.

           TITLE XVII--INCENTIVES FOR INNOVATIVE TECHNOLOGIES

SEC. 1701. <<NOTE: 22 USC 16511.>> DEFINITIONS.

    In this title:
            (1) Commercial technology.--
                    (A) In general.--The term ``commercial technology'' 
                means a technology in general use in the commercial 
                marketplace.
                    (B) Inclusions.--The term ``commercial technology'' 
                does not include a technology solely by use of the 
                technology in a demonstration project funded by the 
                Department.
            (2) Cost.--The term ``cost'' has the meaning given the term 
        ``cost of a loan guarantee'' within the meaning of section 
        502(5)(C) of the Federal Credit Reform Act of 1990 (2 U.S.C. 
        661a(5)(C)).
            (3) Eligible project.--The term ``eligible project'' means a 
        project described in section 1703.
            (4) Guarantee.--
                    (A) In general.--The term ``guarantee'' has the 
                meaning given the term ``loan guarantee'' in section 502 
                of the Federal Credit Reform Act of 1990 (2 U.S.C. 
                661a).
                    (B) Inclusion.--The term ``guarantee'' includes a 
                loan guarantee commitment (as defined in section 502 of 
                the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)).
            (5) Obligation.--The term ``obligation'' means the loan or 
        other debt obligation that is guaranteed under this section.

SEC. 1702. <<NOTE: 22 USC 16512.>> TERMS AND CONDITIONS.

    (a) In General.--Except for division C of Public Law 108-324, the 
Secretary shall make guarantees under this or any other Act for projects 
on such terms and conditions as the Secretary determines, after 
consultation with the Secretary of the Treasury, only in accordance with 
this section.
    (b) Specific Appropriation or Contribution.--No guarantee shall be 
made unless--
            (1) an appropriation for the cost has been made; or

[[Page 119 STAT. 1118]]

            (2) the Secretary has received from the borrower a payment 
        in full for the cost of the obligation and deposited the payment 
        into the Treasury.

    (c) Amount.--Unless otherwise provided by law, a guarantee by the 
Secretary shall not exceed an amount equal to 80 percent of the project 
cost of the facility that is the subject of the guarantee, as estimated 
at the time at which the guarantee is issued.
    (d) Repayment.--
            (1) In general.--No guarantee shall be made unless the 
        Secretary determines that there is reasonable prospect of 
        repayment of the principal and interest on the obligation by the 
        borrower.
            (2) Amount.--No guarantee shall be made unless the Secretary 
        determines that the amount of the obligation (when combined with 
        amounts available to the borrower from other sources) will be 
        sufficient to carry out the project.
            (3) Subordination.--The obligation shall be subject to the 
        condition that the obligation is not subordinate to other 
        financing.

    (e) Interest Rate.--An obligation shall bear interest at a rate that 
does not exceed a level that the Secretary determines appropriate, 
taking into account the prevailing rate of interest in the private 
sector for similar loans and risks.
    (f) Term.--The term of an obligation shall require full repayment 
over a period not to exceed the lesser of--
            (1) 30 years; or
            (2) 90 percent of the projected useful life of the physical 
        asset to be financed by the obligation (as determined by the 
        Secretary).

    (g) Defaults.--
            (1) Payment by secretary.--
                    (A) In general.--If a borrower defaults on the 
                obligation (as defined in regulations promulgated by the 
                Secretary and specified in the guarantee contract), the 
                holder of the guarantee shall have the right to demand 
                payment of the unpaid amount from the Secretary.
                    (B) Payment required.--Within such period as may be 
                specified in the guarantee or related agreements, the 
                Secretary shall pay to the holder of the guarantee the 
                unpaid interest on, and unpaid principal of the 
                obligation as to which the borrower has defaulted, 
                unless the Secretary finds that there was no default by 
                the borrower in the payment of interest or principal or 
                that the default has been remedied.
                    (C) Forbearance.--Nothing in this subsection 
                precludes any forbearance by the holder of the 
                obligation for the benefit of the borrower which may be 
                agreed upon by the parties to the obligation and 
                approved by the Secretary.
            (2) Subrogation.--
                    (A) In general.--If the Secretary makes a payment 
                under paragraph (1), the Secretary shall be subrogated 
                to the rights of the recipient of the payment as 
                specified in the guarantee or related agreements 
                including, where appropriate, the authority 
                (notwithstanding any other provision of law) to--

[[Page 119 STAT. 1119]]

                          (i) complete, maintain, operate, lease, or 
                      otherwise dispose of any property acquired 
                      pursuant to such guarantee or related agreements; 
                      or
                          (ii) permit the borrower, pursuant to an 
                      agreement with the Secretary, to continue to 
                      pursue the purposes of the project if the 
                      Secretary determines this to be in the public 
                      interest.
                    (B) Superiority of rights.--The rights of the 
                Secretary, with respect to any property acquired 
                pursuant to a guarantee or related agreements, shall be 
                superior to the rights of any other person with respect 
                to the property.
                    (C) Terms and conditions.--A guarantee agreement 
                shall include such detailed terms and conditions as the 
                Secretary determines appropriate to--
                          (i) protect the interests of the United States 
                      in the case of default; and
                          (ii) have available all the patents and 
                      technology necessary for any person selected, 
                      including the Secretary, to complete and operate 
                      the project.
            (3) Payment of principal and interest by secretary.--With 
        respect to any obligation guaranteed under this section, the 
        Secretary may enter into a contract to pay, and pay, holders of 
        the obligation, for and on behalf of the borrower, from funds 
        appropriated for that purpose, the principal and interest 
        payments which become due and payable on the unpaid balance of 
        the obligation if the Secretary finds that--
                    (A)(i) the borrower is unable to meet the payments 
                and is not in default;
                    (ii) it is in the public interest to permit the 
                borrower to continue to pursue the purposes of the 
                project; and
                    (iii) the probable net benefit to the Federal 
                Government in paying the principal and interest will be 
                greater than that which would result in the event of a 
                default;
                    (B) the amount of the payment that the Secretary is 
                authorized to pay shall be no greater than the amount of 
                principal and interest that the borrower is obligated to 
                pay under the agreement being guaranteed; and
                    (C) the borrower agrees to reimburse the Secretary 
                for the payment (including interest) on terms and 
                conditions that are satisfactory to the Secretary.
            (4) Action by attorney general.--
                    (A) Notification.--If the borrower defaults on an 
                obligation, the Secretary shall notify the Attorney 
                General of the default.
                    (B) Recovery.--On notification, the Attorney General 
                shall take such action as is appropriate to recover the 
                unpaid principal and interest due from--
                          (i) such assets of the defaulting borrower as 
                      are associated with the obligation; or
                          (ii) any other security pledged to secure the 
                      obligation.

    (h) Fees.--
            (1) In general.--The Secretary shall charge and collect fees 
        for guarantees in amounts the Secretary determines are 
        sufficient to cover applicable administrative expenses.

[[Page 119 STAT. 1120]]

            (2) Availability.--Fees collected under this subsection 
        shall--
                    (A) be deposited by the Secretary into the Treasury; 
                and
                    (B) remain available until expended, subject to such 
                other conditions as are contained in annual 
                appropriations Acts.

    (i) Records; Audits.--
            (1) In general.--A recipient of a guarantee shall keep such 
        records and other pertinent documents as the Secretary shall 
        prescribe by regulation, including such records as the Secretary 
        may require to facilitate an effective audit.
            (2) Access.--The Secretary and the Comptroller General of 
        the United States, or their duly authorized representatives, 
        shall have access, for the purpose of audit, to the records and 
        other pertinent documents.

    (j) Full Faith and Credit.--The full faith and credit of the United 
States is pledged to the payment of all guarantees issued under this 
section with respect to principal and interest.

SEC. 1703. <<NOTE: 42 USC 16513.>> ELIGIBLE PROJECTS.

    (a) In General.--The Secretary may make guarantees under this 
section only for projects that--
            (1) avoid, reduce, or sequester air pollutants or 
        anthropogenic emissions of greenhouse gases; and
            (2) employ new or significantly improved technologies as 
        compared to commercial technologies in service in the United 
        States at the time the guarantee is issued.

    (b) Categories.--Projects from the following categories shall be 
eligible for a guarantee under this section:
            (1) Renewable energy systems.
            (2) Advanced fossil energy technology (including coal 
        gasification meeting the criteria in subsection (d)).
            (3) Hydrogen fuel cell technology for residential, 
        industrial, or transportation applications.
            (4) Advanced nuclear energy facilities.
            (5) Carbon capture and sequestration practices and 
        technologies, including agricultural and forestry practices that 
        store and sequester carbon.
            (6) Efficient electrical generation, transmission, and 
        distribution technologies.
            (7) Efficient end-use energy technologies.
            (8) Production facilities for fuel efficient vehicles, 
        including hybrid and advanced diesel vehicles.
            (9) Pollution control equipment.
            (10) Refineries, meaning facilities at which crude oil is 
        refined into gasoline.

    (c) Gasification Projects.--The Secretary may make guarantees for 
the following gasification projects:
            (1) Integrated gasification combined cycle projects.--
        Integrated gasification combined cycle plants meeting the 
        emission levels under subsection (d), including--
                    (A) projects for the generation of electricity--
                          (i) for which, during the term of the 
                      guarantee--
                                    (I) coal, biomass, petroleum coke, 
                                or a combination of coal, biomass, and 
                                petroleum coke will

[[Page 119 STAT. 1121]]

                                account for at least 65 percent of 
                                annual heat input; and
                                    (II) electricity will account for at 
                                least 65 percent of net useful annual 
                                energy output;
                          (ii) that have a design that is determined by 
                      the Secretary to be capable of accommodating the 
                      equipment likely to be necessary to capture the 
                      carbon dioxide that would otherwise be emitted in 
                      flue gas from the plant;
                          (iii) that have an assured revenue stream that 
                      covers project capital and operating costs 
                      (including servicing all debt obligations covered 
                      by the guarantee) that is approved by the 
                      Secretary and the relevant State public utility 
                      commission; and
                          (iv) on which construction commences not later 
                      than the date that is 3 years after the date of 
                      the issuance of the guarantee;
                    (B) a project to produce energy from coal (of not 
                more than 13,000 Btu/lb and mined in the western United 
                States) using appropriate advanced integrated 
                gasification combined cycle technology that minimizes 
                and offers the potential to sequester carbon dioxide 
                emissions and that--
                          (i) may include repowering of existing 
                      facilities;
                          (ii) may be built in stages;
                          (iii) shall have a combined output of at least 
                      100 megawatts;
                          (iv) shall be located in a western State at an 
                      altitude greater than 4,000 feet; and
                          (v) shall demonstrate the ability to use coal 
                      with an energy content of not more than 9,000 Btu/
                      lb;
                    (C) a project located in a taconite-producing region 
                of the United States that is entitled under the law of 
                the State in which the plant is located to enter into a 
                long-term contract approved by a State public utility 
                commission to sell at least 450 megawatts of output to a 
                utility;
                    (D) facilities that--
                          (i) generate one or more hydrogen-rich and 
                      carbon monoxide-rich product streams from the 
                      gasification of coal or coal waste; and
                          (ii) use those streams to facilitate the 
                      production of ultra clean premium fuels through 
                      the Fischer-Tropsch process; and
                    (E) a project to produce energy and clean fuels, 
                using appropriate coal liquefaction technology, from 
                Western bituminous or subbituminous coal, that--
                          (i) is owned by a State government; and
                          (ii) may include tribal and private coal 
                      resources.
            (2) Industrial gasification projects.--Facilities that 
        gasify coal, biomass, or petroleum coke in any combination to 
        produce synthesis gas for use as a fuel or feedstock and for 
        which electricity accounts for less than 65 percent of the 
        useful energy output of the facility.
            (3) Petroleum coke <<NOTE: Loans.>> gasification projects.--
        The Secretary is encouraged to make loan guarantees under this 
        title available for petroleum coke gasification projects.

[[Page 119 STAT. 1122]]

            (4) Liquefaction project.--Notwithstanding any other 
        provision of law, funds awarded under the clean coal power 
        initiative under subtitle A of title IV for coal-to-oil 
        liquefaction projects may be used to finance the cost of loan 
        guarantees for projects awarded such funds.

    (d) Emission Levels.--In addition to any other applicable Federal or 
State emission limitation requirements, a project shall attain at 
least--
            (1) total sulfur dioxide emissions in flue gas from the 
        project that do not exceed 0.05 lb/MMBtu;
            (2) a 90-percent removal rate (including any fuel 
        pretreatment) of mercury from the coal-derived gas, and any 
        other fuel, combusted by the project;
            (3) total nitrogen oxide emissions in the flue gas from the 
        project that do not exceed 0.08 lb/MMBtu; and
            (4) total particulate emissions in the flue gas from the 
        project that do not exceed 0.01 lb/MMBtu.

    (e) Qualification of Facilities Receiving Tax Credits.--A project 
that receives tax credits for clean coal technology shall not be 
disqualified from receiving a guarantee under this title.

SEC. 1704. <<NOTE: 42 USC 16514.>> AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated such sums 
as are necessary to provide the cost of guarantees under this title.
    (b) Use of Other Appropriated Funds.--The Department may use amounts 
awarded under the clean coal power initiative under subtitle A of title 
IV to carry out the project described in section 1703(c)(1)(C), on the 
request of the recipient of such award, for a loan guarantee, to the 
extent that the amounts have not yet been disbursed to, or have been 
repaid by, the recipient.

                          TITLE XVIII--STUDIES

SEC. 1801. STUDY ON INVENTORY OF PETROLEUM AND NATURAL GAS STORAGE.

    (a) Definition.--For purposes of this section ``petroleum'' means 
crude oil, motor gasoline, jet fuel, distillates, and propane.
    (b) Study.--The Secretary shall conduct a study on petroleum and 
natural gas storage capacity and operational inventory levels, 
nationwide and by major geographical regions.
    (c) Contents.--The study shall address--
            (1) historical normal ranges for petroleum and natural gas 
        inventory levels;
            (2) historical and projected storage capacity trends;
            (3) estimated operation inventory levels below which 
        outages, delivery slowdown, rationing, interruptions in service, 
        or other indicators of shortage begin to appear;
            (4) explanations for inventory levels dropping below normal 
        ranges; and
            (5) the ability of industry to meet United States demand for 
        petroleum and natural gas without shortages or price spikes, 
        when inventory levels are below normal ranges.

    (d) Report to Congress.--Not later than 1 year after the date of 
enactment of this Act, the Secretary shall submit a report

[[Page 119 STAT. 1123]]

to Congress on the results of the study, including findings and any 
recommendations for preventing future supply shortages.

SEC. 1802. <<NOTE: Deadline.>> STUDY OF ENERGY EFFICIENCY STANDARDS.

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

SEC. 1803. TELECOMMUTING STUDY.

    (a) Study Required.--The Secretary, in consultation with the 
Commission, the Director of the Office of Personnel Management, the 
Administrator of General Services, and the Administrator of NTIA, shall 
conduct a study of the energy conservation implications of the 
widespread adoption of telecommuting by Federal employees in the United 
States.
    (b) Required Subjects of Study.--The study required by subsection 
(a) shall analyze the following subjects in relation to the energy 
saving potential of telecommuting by Federal employees:
            (1) Reductions of energy use and energy costs in commuting 
        and regular office heating, cooling, and other operations.
            (2) Other energy reductions accomplished by telecommuting.
            (3) Existing regulatory barriers that hamper telecommuting, 
        including barriers to broadband telecommunications services 
        deployment.
            (4) Collateral benefits to the environment, family life, and 
        other values.

    (c) Report Required.--The Secretary shall submit to the President 
and Congress a report on the study required by this section not later 
than 6 months after the date of enactment of this Act. Such report shall 
include a description of the results of the analysis of each of the 
subjects described in subsection (b).
    (d) Definitions.--As used in this section:
            (1) Commission.--The term ``Commission'' means the Federal 
        Communications Commission.
            (2) NTIA.--The term ``NTIA'' means the National 
        Telecommunications and Information Administration of the 
        Department of Commerce.
            (3) Telecommuting.--The term ``telecommuting'' means the 
        performance of work functions using communications technologies, 
        thereby eliminating or substantially reducing the need to 
        commute to and from traditional worksites.
            (4) Federal employee.--The term ``Federal employee'' has the 
        meaning provided the term ``employee'' by section 2105 of title 
        5, United States Code.

SEC. 1804. LIHEAP REPORT.

    Not later than 1 year after the date of enactment of this Act, the 
Secretary of Health and Human Services shall transmit to Congress a 
report on how the Low-Income Home Energy Assistance Program could be 
used more effectively to prevent loss of

[[Page 119 STAT. 1124]]

life from extreme temperatures. In preparing such report, the Secretary 
shall consult with appropriate officials in all 50 States and the 
District of Columbia.

SEC. 1805. OIL BYPASS FILTRATION TECHNOLOGY.

    The Secretary and the Administrator of the Environmental Protection 
Agency shall--
            (1) conduct a joint study of the benefits of oil bypass 
        filtration technology in reducing demand for oil and protecting 
        the environment;
            (2) examine the feasibility of using oil bypass filtration 
        technology in Federal motor vehicle fleets; and
            (3) include in such study, prior to any determination of the 
        feasibility of using oil bypass filtration technology, the 
        evaluation of products and various manufacturers.

SEC. 1806. TOTAL INTEGRATED THERMAL SYSTEMS.

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

SEC. 1807. <<NOTE: 42 USC 16521.>> REPORT ON ENERGY INTEGRATION WITH 
            LATIN AMERICA.

    The Secretary shall submit an annual report to the Committee on 
Energy and Commerce of the United States House of Representatives and to 
the Committee on Energy and Natural Resources of the Senate concerning 
the status of energy export development in Latin America and efforts by 
the Secretary and other departments and agencies of the United States to 
promote energy integration with Latin America. <<NOTE: Mexico.>> The 
report shall contain a detailed analysis of the status of energy export 
development in Mexico and a description of all significant efforts by 
the Secretary and other departments and agencies to promote a 
constructive relationship with Mexico regarding the development of that 
nation's energy capacity. In particular this report shall outline 
efforts the Secretary and other departments and agencies have made to 
ensure that regulatory approval and oversight of United States/Mexico 
border projects that result in the expansion of Mexican energy capacity 
are effectively coordinated across departments and with the Mexican 
government.

SEC. 1808. <<NOTE: 42 USC 16522.>> LOW-VOLUME GAS RESERVOIR STUDY.

    (a) Study.--The <<NOTE: Grants.>> Secretary shall make a grant to an 
organization of oil and gas producing States, specifically those 
containing significant numbers of marginal oil and natural gas wells, 
for conducting an annual study of low-volume natural gas reservoirs. 
Such organization shall work with the State geologist of each State 
being studied.

    (b) Contents.--The studies under this section shall--
            (1) determine the status and location of marginal wells and 
        gas reservoirs;
            (2) gather the production information of these marginal 
        wells and reservoirs;
            (3) estimate the remaining producible reserves based on 
        variable pipeline pressures;

[[Page 119 STAT. 1125]]

            (4) locate low-pressure gathering facilities and pipelines;
            (5) recommend incentives which will enable the continued 
        production of these resources;
            (6) produce maps and literature to disseminate to States to 
        promote conservation of natural gas reserves; and
            (7) evaluate the amount of natural gas that is being wasted 
        through the practice of venting or flaring of natural gas 
        produced in association with crude oil well production.

    (c) Data Analysis.--Data development and analysis under this section 
shall be performed by an institution of higher education with GIS 
capabilities. If the organization receiving the grant under subsection 
(a) does not have GIS capabilities, such organization shall contract 
with one or more entities with--
            (1) technological capabilities and resources to perform 
        advanced image processing, GIS programming, and data analysis; 
        and
            (2) the ability to--
                    (A) process remotely sensed imagery with high 
                spatial resolution;
                    (B) deploy global positioning systems;
                    (C) process and synthesize existing, variable-format 
                gas well, pipeline, gathering facility, and reservoir 
                data;
                    (D) create and query GIS databases with 
                infrastructure location and attribute information;
                    (E) write computer programs to customize relevant 
                GIS software;
                    (F) generate maps, charts, and graphs which 
                summarize findings from data research for presentation 
                to different audiences; and
                    (G) deliver data in a variety of formats, including 
                Internet Map Server for query and display, desktop 
                computer display, and access through handheld personal 
                digital assistants.

    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for carrying out this section--
            (1) $1,500,000 for fiscal year 2006; and
            (2) $450,000 for each of the fiscal years 2007 through 2010.

    (e) Definitions.--For purposes of this section, the term ``GIS'' 
means geographic information systems technology that facilitates the 
organization and management of data with a geographic component.

SEC. 1809. INVESTIGATION OF GASOLINE PRICES.

    (a) Investigation.--Not <<NOTE: Deadline.>> later than 90 days after 
the date of enactment of this Act, the Federal Trade Commission shall 
conduct an investigation to determine if the price of gasoline is being 
artificially manipulated by reducing refinery capacity or by any other 
form of market manipulation or price gouging practices.

    (b) Evaluation and Analysis.--The Secretary shall direct the 
National Petroleum Council to conduct an evaluation and analysis to 
determine whether, and to what extent, environmental and other 
regulations affect new domestic refinery construction and significant 
expansion of existing refinery capacity.
    (c) Reports to Congress.--

[[Page 119 STAT. 1126]]

            (1) Investigation.--On completion of the investigation under 
        subsection (a), the Federal Trade Commission shall submit to 
        Congress a report that describes--
                    (A) the results of the investigation; and
                    (B) any recommendations of the Federal Trade 
                Commission.
            (2) Evaluation and analysis.--On completion of the 
        evaluation and analysis under subsection (b), the Secretary 
        shall submit to Congress a report that describes--
                    (A) the results of the evaluation and analysis; and
                    (B) any recommendations of the National Petroleum 
                Council.

SEC. 1810. <<NOTE: Reports. Deadlines. 42 USC 16523.>> ALASKA NATURAL 
            GAS PIPELINE.

    Not later than 180 days after the date of enactment of this Act, and 
every 180 days thereafter until the Alaska natural gas pipeline 
commences operation, the Federal Energy Regulatory Commission shall 
submit to Congress a report describing--
            (1) the progress made in licensing and constructing the 
        pipeline; and
            (2) any issue impeding that progress.

SEC. 1811. <<NOTE: State listing.>> COAL BED METHANE STUDY.

    (a) Study.--
            (1) In general.--The <<NOTE: Contracts.>> Secretary of the 
        Interior, in consultation with the Administrator of the 
        Environmental Protection Agency, shall enter into an arrangement 
        under which the National Academy of Sciences shall conduct a 
        study on the effect of coal bed natural gas production on 
        surface and ground water resources, including ground water 
        aquifiers, in the States of Montana, Wyoming, Colorado, New 
        Mexico, North Dakota, and Utah.
            (2) Matters to be addressed.--The study shall address the 
        effectiveness of--
                    (A) the management of coal bed methane produced 
                water;
                    (B) the use of best management practices; and
                    (C) various production techniques for coal bed 
                methane natural gas in minimizing impacts on water 
                resources.

    (b) Data Analysis.--The study shall analyze available hydrologic, 
geologic and water quality data, along with--
            (1) production techniques, produced water management 
        techniques, best management practices, and other factors that 
        can mitigate effects of coal bed methane development;
            (2) the costs associated with mitigation techniques;
            (3) effects on surface or ground water resources, including 
        drinking water, associated with surface or subsurface disposal 
        of waters produced during extraction of coal bed methane; and
            (4) any other significant effects on surface or ground water 
        resources associated with production of coal bed methane.

    (c) Recommendations.--The study shall analyze the effectiveness of 
current mitigation practices of coal bed methane produced water handling 
in relation to existing Federal and State laws and regulations, and make 
recommendations as to changes, if any, to Federal law necessary to 
address adverse impacts to surface or ground water resources associated 
with coal bed methane development.

[[Page 119 STAT. 1127]]

    (d) Completion of Study.--The <<NOTE: Public information.>> National 
Academy of Sciences shall submit the findings and recommendations of the 
study to the Secretary of the Interior and the Administrator of the 
Environmental Protection Agency within 12 months after the date of 
enactment of this Act, and shall upon completion make the results of the 
study available to the public.

    (e) Report to Congress.--The Secretary of the Interior and the 
Administrator of the Environmental Protection Agency, after consulting 
with States, shall report to the Congress within 6 months after 
receiving the results of the study on--
            (1) the findings and recommendations of the study;
            (2) the agreement or disagreement of the Secretary of the 
        Interior and the Administrator of the Environmental Protection 
        Agency with each of its findings and recommendations; and
            (3) any recommended changes in funding to address the 
        effects of coal bed methane production on surface and ground 
        water resources.

SEC. 1812. BACKUP FUEL CAPABILITY STUDY.

    (a) Study.--
            (1) In general.--The Secretary shall conduct a study of the 
        effect of obtaining and maintaining liquid and other fuel backup 
        capability at--
                    (A) gas-fired power generation facilities; and
                    (B) other gas-fired industrial facilities.
            (2) Contents.--The study under paragraph (1) shall address--
                    (A) the costs and benefits of adding a different 
                fuel capability to a power gas-fired power generating or 
                industrial facility, taking into consideration regional 
                differences;
                    (B) methods of the Federal Government and State 
                governments to encourage gas-fired power generators and 
                industries to develop the capability to power the 
                facilities using a backup fuel;
                    (C) the effect on the supply and cost of natural gas 
                of--
                          (i) a balanced portfolio of fuel choices in 
                      power generation and industrial applications; and
                          (ii) State regulations that permit agencies in 
                      the State to carry out policies that encourage the 
                      use of other backup fuels in gas-fired power 
                      generation; and
                    (D) changes required in the Clean Air Act (42 U.S.C. 
                7401 et seq.) to allow natural gas generators to add 
                clean backup fuel capabilities.

    (b) Report to Congress.--Not later than 1 year after the date of 
enactment of this Act, the Secretary shall submit to Congress a report 
on the results of the study under subsection (a), including 
recommendations regarding future activity of the Federal Government 
relating to backup fuel capability.

SEC. 1813. INDIAN LAND RIGHTS-OF-WAY.

    (a) Study.--
            (1) In general.--The Secretary and the Secretary of the 
        Interior (referred to in this section as the ``Secretaries'') 
        shall jointly conduct a study of issues regarding energy rights-
        of-way on tribal land (as defined in section 2601 of the Energy 
        Policy Act of 1992 (as amended by section 503)) (referred to in 
        this section as ``tribal land'').

[[Page 119 STAT. 1128]]

            (2) Consultation.--In conducting the study under paragraph 
        (1), the Secretaries shall consult with Indian tribes, the 
        energy industry, appropriate governmental entities, and affected 
        businesses and consumers.

    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretaries shall submit to Congress a report on the 
findings of the study, including--
            (1) an analysis of historic rates of compensation paid for 
        energy rights-of-way on tribal land;
            (2) recommendations for appropriate standards and procedures 
        for determining fair and appropriate compensation to Indian 
        tribes for grants, expansions, and renewals of energy rights-of-
        way on tribal land;
            (3) an assessment of the tribal self-determination and 
        sovereignty interests implicated by applications for the grant, 
        expansion, or renewal of energy rights-of-way on tribal land; 
        and
            (4) an analysis of relevant national energy transportation 
        policies relating to grants, expansions, and renewals of energy 
        rights-of-way on tribal land.

SEC. 1814. <<NOTE: Reports. Deadline.>> MOBILITY OF SCIENTIFIC AND 
            TECHNICAL PERSONNEL.

    Not later than 2 years after the date of enactment of this section, 
the Secretary shall transmit to Congress a report that--
            (1) identifies any policies or procedures of a contractor 
        operating a National Laboratory or single-purpose research 
        facility that create disincentives to the temporary or permanent 
        transfer of scientific and technical personnel among the 
        contractor-operated National Laboratories or contractor-operated 
        single-purpose research facilities; and
            (2) provides recommendations for improving interlaboratory 
        exchange of scientific and technical personnel.

SEC. 1815. INTERAGENCY REVIEW OF COMPETITION IN THE WHOLESALE AND RETAIL 
            MARKETS FOR ELECTRIC ENERGY.

    (a) Task Force.--There is <<NOTE: Establishment.>> established an 
inter-agency task force, to be known as the ``Electric Energy Market 
Competition Task Force'' (referred to in this section as the ``task 
force''), consisting of five members--
            (1) one of whom shall be an employee of the Department of 
        Justice, to be appointed by the Attorney General of the United 
        States;
            (2) one of whom shall be an employee of the Federal Energy 
        Regulatory Commission, to be appointed by the Chairperson of 
        that Commission;
            (3) one of whom shall be an employee of the Federal Trade 
        Commission, to be appointed by the Chairperson of that 
        Commission;
            (4) one of whom shall be an employee of the Department, to 
        be appointed by the Secretary; and
            (5) one of whom shall be an employee of the Rural Utilities 
        Service, to be appointed by the Secretary of Agriculture.

    (b) Study and Report.--
            (1) Study.--The task force shall conduct a study and 
        analysis of competition within the wholesale and retail market 
        for electric energy in the United States.
            (2) Report.--

[[Page 119 STAT. 1129]]

                    (A) Final report.--Not later than 1 year after the 
                date of enactment of this Act, the task force shall 
                submit to Congress a final report on the findings of the 
                task force under paragraph (1).
                    (B) Public comment.--Not later than the date that is 
                60 days before a final report is submitted to Congress 
                under subparagraph (A), the task force shall--
                          (i) <<NOTE: Federal 
                      Register, publication.>> publish in the Federal 
                      Register a draft of the report; and
                          (ii) provide an opportunity for public comment 
                      on the report.

    (c) Consultation.--In conducting the study under subsection (b), the 
task force shall consult with and solicit comments from any advisory 
entity of the task force, the States, representatives of the electric 
power industry, and the public.

SEC. 1816. STUDY OF RAPID ELECTRICAL GRID RESTORATION.

    (a) Study.--
            (1) In general.--The Secretary shall conduct a study of the 
        benefits of using mobile transformers and mobile substations to 
        rapidly restore electrical service to areas subjected to 
        blackouts as a result of--
                    (A) equipment failure;
                    (B) natural disasters;
                    (C) acts of terrorism; or
                    (D) war.
            (2) Contents.--The study under paragraph (1) shall contain 
        an analysis of--
                    (A) the feasibility of using mobile transformers and 
                mobile substations to reduce dependence on foreign 
                entities for key elements of the electrical grid system 
                of the United States;
                    (B) the feasibility of using mobile transformers and 
                mobile substations to rapidly restore electrical power 
                to--
                          (i) military bases;
                          (ii) the Federal Government;
                          (iii) communications industries;
                          (iv) first responders; and
                          (v) other critical infrastructures, as 
                      determined by the Secretary;
                    (C) the quantity of mobile transformers and mobile 
                substations necessary--
                          (i) to eliminate dependence on foreign sources 
                      for key electrical grid components in the United 
                      States;
                          (ii) to rapidly deploy technology to fully 
                      restore full electrical service to prioritized 
                      Governmental functions; and
                          (iii) to identify manufacturing sources in 
                      existence on the date of enactment of this Act 
                      that have previously manufactured specialized 
                      mobile transformer or mobile substation products 
                      for Federal agencies.

    (b) Report.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary shall submit to the 
        President and Congress a report on the study under subsection 
        (a).

[[Page 119 STAT. 1130]]

            (2) Inclusion.--The report shall include a description of 
        the results of the analysis under subsection (a)(2).

SEC. 1817. STUDY OF DISTRIBUTED GENERATION.

    (a) Study.--
            (1) In general.--
                    (A) Potential benefits.--The Secretary, in 
                consultation with the Federal Energy Regulatory 
                Commission, shall conduct a study of the potential 
                benefits of cogeneration and small power production.
                    (B) Recipients.--The benefits described in 
                subparagraph (A) include benefits that are received 
                directly or indirectly by--
                          (i) an electricity distribution or 
                      transmission service provider;
                          (ii) other customers served by an electricity 
                      distribution or transmission service provider; and
                          (iii) the general public in the area served by 
                      the public utility in which the cogenerator or 
                      small power producer is located.
            (2) Inclusions.--The study shall include an analysis of--
                    (A) the potential benefits of--
                          (i) increased system reliability;
                          (ii) improved power quality;
                          (iii) the provision of ancillary services;
                          (iv) reduction of peak power requirements 
                      through onsite generation;
                          (v) the provision of reactive power or volt-
                      ampere reactives;
                          (vi) an emergency supply of power;
                          (vii) offsets to investments in generation, 
                      transmission, or distribution facilities that 
                      would otherwise be recovered through rates;
                          (viii) diminished land use effects and right-
                      of-way acquisition costs; and
                          (ix) reducing the vulnerability of a system to 
                      terrorism; and
                    (B) any rate-related issue that may impede or 
                otherwise discourage the expansion of cogeneration and 
                small power production facilities, including a review of 
                whether rates, rules, or other requirements imposed on 
                the facilities are comparable to rates imposed on 
                customers of the same class that do not have 
                cogeneration or small power production.
            (3) Valuation of benefits.--In carrying out the study, the 
        Secretary shall determine an appropriate method of valuing 
        potential benefits under varying circumstances for individual 
        cogeneration or small power production units.

    (b) Report.--Not later than 18 months after the date of enactment of 
this Act, the Secretary shall--
            (1) complete the study;
            (2) <<NOTE: Public information.>> provide an opportunity for 
        public comment on the results of the study; and
            (3) submit to the President and Congress a report 
        describing--
                    (A) the results of the study; and

[[Page 119 STAT. 1131]]

                    (B) information relating to the public comments 
                received under paragraph (2).

    (c) Publication.--After submission of the report under subsection 
(b) to the President and Congress, the Secretary shall publish the 
report.

SEC. 1818. NATURAL GAS SUPPLY SHORTAGE REPORT.

    (a) In General.--Not later than 180 days after the date of enactment 
of this Act, the Secretary shall submit to Congress a report on natural 
gas supplies and demand.
    (b) Purpose.--The purpose of the report under subsection (a) is to 
develop recommendations for achieving a balance between natural gas 
supply and demand in order to--
            (1) provide residential consumers with natural gas at 
        reasonable and stable prices;
            (2) accommodate long-term maintenance and growth of domestic 
        natural gas-dependent industrial, manufacturing, and commercial 
        enterprises;
            (3) facilitate the attainment of national ambient air 
        quality standards under the Clean Air Act (43 U.S.C. 7401 et 
        seq.);
            (4) achieve continued progress in reducing the emissions 
        associated with electric power generation; and
            (5) support the development of the preliminary phases of 
        hydrogen-based energy technologies.

    (c) Comprehensive Analysis.--The report shall include a 
comprehensive analysis of, for the period beginning on January 1, 2004, 
and ending on December 31, 2015, natural gas supply and demand in the 
United States, including--
            (1) estimates of annual domestic demand for natural gas, 
        taking into consideration the effect of Federal policies and 
        actions that are likely to increase or decrease the demand for 
        natural gas;
            (2) projections of annual natural gas supplies, from 
        domestic and foreign sources, under Federal policies in 
        existence on the date of enactment of this Act;
            (3) an identification of estimated natural gas supplies that 
        are not available under those Federal policies;
            (4) scenarios for decreasing natural gas demand and 
        increasing natural gas supplies that compare the relative 
        economic and environmental impacts of Federal policies that--
                    (A) encourage or require the use of natural gas to 
                meet air quality, carbon dioxide emission reduction, or 
                energy security goals;
                    (B) encourage or require the use of energy sources 
                other than natural gas, including coal, nuclear, and 
                renewable sources;
                    (C) support technologies to develop alternative 
                sources of natural gas and synthetic gas, including coal 
                gasification technologies;
                    (D) encourage or require the use of energy 
                conservation and demand side management practices; and
                    (E) affect access to domestic natural gas supplies; 
                and
            (5) recommendations for Federal actions to achieve the 
        purposes described in subsection (b), including recommendations 
        that--

[[Page 119 STAT. 1132]]

                    (A) encourage or require the use of energy sources 
                other than natural gas, including coal, nuclear, and 
                renewable sources;
                    (B) encourage or require the use of energy 
                conservation or demand side management practices;
                    (C) support technologies for the development of 
                alternative sources of natural gas and synthetic gas, 
                including coal gasification technologies; and
                    (D) would improve access to domestic natural gas 
                supplies.

    (d) Consultation.--In preparing the report under subsection (a), the 
Secretary shall consult with--
            (1) experts in natural gas supply and demand; and
            (2) representatives of--
                    (A) State and local governments;
                    (B) tribal organizations; and
                    (C) consumer and other organizations.

    (e) Hearings.--In preparing the report under subsection (a), the 
Secretary may hold public hearings and provide other opportunities for 
public comment, as the Secretary considers appropriate.

SEC. 1819. <<NOTE: Reports. Deadline.>> HYDROGEN PARTICIPATION STUDY.

    Not later than 1 year after the date of enactment of this Act, the 
Secretary shall submit to Congress a report evaluating methodologies to 
ensure the widest participation practicable in setting goals and 
milestones under the hydrogen program of the Department, including 
international participants.

SEC. 1820. OVERALL EMPLOYMENT IN A HYDROGEN ECONOMY.

    (a) Study.--
            (1) In general.--The Secretary shall carry out a study of 
        the likely effects of a transition to a hydrogen economy on 
        overall employment in the United States.
            (2) Contents.--In completing the study, the Secretary shall 
        take into consideration--
                    (A) the replacement effects of new goods and 
                services;
                    (B) international competition;
                    (C) workforce training requirements;
                    (D) multiple possible fuel cycles, including usage 
                of raw materials;
                    (E) rates of market penetration of technologies; and
                    (F) regional variations based on geography.

    (b) Report.--Not later than 18 months after the date of enactment of 
this Act, the Secretary shall submit to Congress a report describing the 
findings, conclusions, and recommendations of the study under subsection 
(a).

SEC. 1821. STUDY OF BEST MANAGEMENT PRACTICES FOR ENERGY RESEARCH AND 
            DEVELOPMENT PROGRAMS.

    (a) In General.--The Secretary shall enter into an arrangement with 
the National Academy of Public Administration under which the Academy 
shall conduct a study to assess management practices for research, 
development, and demonstration programs at the Department.
    (b) Scope of the Study.--The study shall consider--
            (1) management practices that act as barriers between the 
        Office of Science and offices conducting mission-oriented 
        research;

[[Page 119 STAT. 1133]]

            (2) recommendations for management practices that would 
        improve coordination and bridge the innovation gap between the 
        Office of Science and offices conducting mission-oriented 
        research;
            (3) the applicability of the management practices used by 
        the Department of Defense Advanced Research Projects Agency to 
        research programs at the Department;
            (4) the advisability of creating an agency within the 
        Department modeled after the Department of Defense Advanced 
        Research Projects Agency;
            (5) recommendations for management practices that could best 
        encourage innovative research and efficiency at the Department; 
        and
            (6) any other relevant considerations.

    (c) Report.--Not later than 18 months after the date of enactment of 
this Act, the Secretary shall submit to Congress a report on the study 
conducted under this section.

SEC. 1822. <<NOTE: Contracts. Deadline.>> EFFECT OF ELECTRICAL 
            CONTAMINANTS ON RELIABILITY OF ENERGY PRODUCTION SYSTEMS.

    Not later than 180 days after the date of enactment of this Act, the 
Secretary shall enter into a contract with the National Academy of 
Sciences under which the National Academy of Sciences shall determine 
the effect that electrical contaminants (such as tin whiskers) may have 
on the reliability of energy production systems, including nuclear 
energy.

SEC. 1823. ALTERNATIVE FUELS REPORTS.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary shall submit to Congress reports on the 
potential for each of biodiesel and hythane to become major, 
sustainable, alternative fuels.
    (b) Biodiesel Report.--The report relating to biodiesel submitted 
under subsection (a) shall--
            (1) provide a detailed assessment of--
                    (A) potential biodiesel markets and manufacturing 
                capacity; and
                    (B) environmental and energy security benefits with 
                respect to the use of biodiesel;
            (2) identify any impediments, especially in infrastructure 
        needed for production, distribution, and storage, to biodiesel 
        becoming a substantial source of fuel for conventional diesel 
        and heating oil applications;
            (3) identify strategies to enhance the commercial deployment 
        of biodiesel; and
            (4) include an examination and recommendations, as 
        appropriate, of the ways in which biodiesel may be modified to 
        be a cleaner-burning fuel.

    (c) Hythane Report.--The report relating to hythane submitted under 
subsection (a) shall--
            (1) provide a detailed assessment of potential hythane 
        markets and the research and development activities that are 
        necessary to facilitate the commercialization of hythane as a 
        competitive, environmentally friendly transportation fuel;
            (2) address--
                    (A) the infrastructure necessary to produce, blend, 
                distribute, and store hythane for widespread commercial 
                purposes; and

[[Page 119 STAT. 1134]]

                    (B) other potential market barriers to the 
                commercialization of hythane;
            (3) examine the viability of producing hydrogen using 
        energy-efficient, environmentally friendly methods so that the 
        hydrogen can be blended with natural gas to produce hythane; and
            (4) include an assessment of the modifications that would be 
        required to convert compressed natural gas vehicle engines to 
        engines that use hythane as fuel.

    (d) Grants for Report Completion.--The Secretary may use such sums 
as are available to the Secretary to provide, to one or more colleges or 
universities selected by the Secretary, grants for use in carrying out 
research to assist the Secretary in preparing the reports required to be 
submitted under subsection (a).

SEC. 1824. FINAL ACTION ON REFUNDS FOR EXCESSIVE CHARGES.

    The Federal Energy Regulatory Commission (FERC) shall--
            (1) seek to conclude its investigation into the unjust or 
        unreasonable charges incurred by California during the 2000-2001 
        electricity crisis as soon as possible;
            (2) <<NOTE: California.>> seek to ensure that refunds the 
        Commission determines are owed to the State of California are 
        paid to the State of California; and
            (3) <<NOTE: Reports. Deadline.>> submit to Congress a report 
        by December 31, 2005, describing the actions taken by the 
        Commission to date under this section and timetables for further 
        actions.

SEC. 1825. FUEL CELL AND HYDROGEN TECHNOLOGY STUDY.

    (a) In General.--As <<NOTE: Contracts.>> soon as practicable after 
the date of enactment of this Act, the Secretary shall enter into a 
contract with the National Academy of Sciences and the National Research 
Council to carry out a study of fuel cell technologies that provides a 
budget roadmap for the development of fuel cell technologies and the 
transition from petroleum to hydrogen in a significant percentage of the 
vehicles sold by 2020.

    (b) Requirements.--In carrying out the study, the National Academy 
of Sciences and the National Research Council shall--
            (1) establish as a goal the maximum percentage practicable 
        of vehicles that the National Academy of Sciences and the 
        National Research Council determines can be fueled by hydrogen 
        by 2020;
            (2) determine the amount of Federal and private funding 
        required to meet the goal established under paragraph (1);
            (3) determine what actions are required to meet the goal 
        established under paragraph (1);
            (4) examine the need for expanded and enhanced Federal 
        research and development programs, changes in regulations, grant 
        programs, partnerships between the Federal Government and 
        industry, private sector investments, infrastructure investments 
        by the Federal Government and industry, educational and public 
        information initiatives, and Federal and State tax incentives to 
        meet the goal established under paragraph (1);
            (5) consider whether other technologies would be less 
        expensive or could be more quickly implemented than fuel cell 
        technologies to achieve significant reductions in carbon dioxide 
        emissions;
            (6) take into account any reports relating to fuel cell 
        technologies and hydrogen-fueled vehicles, including--

[[Page 119 STAT. 1135]]

                    (A) the report prepared by the National Academy of 
                Engineering and the National Research Council in 2004 
                entitled ``Hydrogen Economy: Opportunities, Costs, 
                Barriers, and R&D Needs''; and
                    (B) the report prepared by the U.S. Fuel Cell 
                Council in 2003 entitled ``Fuel Cells and Hydrogen: The 
                Path Forward'';
            (7) consider the challenges, difficulties, and potential 
        barriers to meeting the goal established under paragraph (1); 
        and
            (8) with respect to the budget roadmap--
                    (A) specify the amount of funding required on an 
                annual basis from the Federal Government and industry to 
                carry out the budget roadmap; and
                    (B) specify the advantages and disadvantages to 
                moving toward the transition to hydrogen in vehicles in 
                accordance with the timeline established by the budget 
                roadmap.

SEC. 1826. PASSIVE SOLAR TECHNOLOGIES.

    (a) Definition of Passive Solar Technology.--In this section, the 
term ``passive solar technology'' means a passive solar technology, 
including daylighting, that--
            (1) is used exclusively to avoid electricity use; and
            (2) can be metered to determine energy savings.

    (b) Study.--The Secretary shall conduct a study to determine--
            (1) the range of levelized costs of avoided electricity for 
        passive solar technologies;
            (2) the quantity of electricity displaced using passive 
        solar technologies in the United States as of the date of 
        enactment of this Act; and
            (3) the projected energy savings from passive solar 
        technologies in 5, 10, 15, 20, and 25 years after the date of 
        enactment of this Act if--
                    (A) incentives comparable to the incentives provided 
                for electricity generation technologies were provided 
                for passive solar technologies; and
                    (B) no new incentives for passive solar technologies 
                were provided.

    (c) Report.--Not later than 120 days after the date of enactment of 
this Act, the Secretary shall submit to Congress a report that describes 
the results of the study under subsection (b).

SEC. 1827. STUDY OF LINK BETWEEN ENERGY SECURITY AND INCREASES IN 
            VEHICLE MILES TRAVELED.

    (a) In General.--The Secretary shall enter into an arrangement with 
the National Academy of Sciences under which the Academy shall conduct a 
study to assess the implications on energy use and efficiency of land 
development patterns in the United States.
    (b) Scope.--The study shall consider--
            (1) the correlation, if any, between land development 
        patterns and increases in vehicle miles traveled;
            (2) whether petroleum use in the transportation sector can 
        be reduced through changes in the design of development 
        patterns;
            (3) the potential benefits of--

[[Page 119 STAT. 1136]]

                    (A) information and education programs for State and 
                local officials (including planning officials) on the 
                potential for energy savings through planning, design, 
                development, and infrastructure decisions;
                    (B) incorporation of location efficiency models in 
                transportation infrastructure planning and investments; 
                and
                    (C) transportation policies and strategies to help 
                transportation planners manage the demand for the number 
                and length of vehicle trips, including trips that 
                increase the viability of other means of travel; and
            (4) such other considerations relating to the study topic as 
        the National Academy of Sciences finds appropriate.

    (c) Report.--Not later than 2 years after the date of enactment of 
this Act, the National Academy of Sciences shall submit to the Secretary 
and Congress a report on the study conducted under this section.

SEC. 1828. SCIENCE STUDY ON CUMULATIVE IMPACTS OF MULTIPLE OFFSHORE 
            LIQUEFIED NATURAL GAS FACILITIES.

    (a) In General.--The Secretary (in consultation with the National 
Oceanic Atmospheric Administration, the Commandant of the Coast Guard, 
affected recreational and commercial fishing industries, and affected 
energy and transportation stakeholders) shall carry out a study and 
compile existing science (including studies and data) to determine the 
risks or benefits presented by cumulative impacts of multiple offshore 
liquefied natural gas facilities reasonably assumed to be constructed in 
an area of the Gulf of Mexico using the open-rack vaporization system.
    (b) Accuracy.--In carrying out subsection (a), the Secretary shall 
verify the accuracy of available science and develop a science-based 
evaluation of significant short-term and long-term cumulative impacts, 
both adverse and beneficial, of multiple offshore liquefied natural gas 
facilities reasonably assumed to be constructed in an area of the Gulf 
of Mexico using or proposing the open-rack vaporization system on the 
fisheries and marine populations in the vicinity of the facility.

SEC. 1829. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL BUILDINGS.

    (a) In General.--The Architect of the Capitol, as part of the 
process of updating the Master Plan Study for the Capitol complex, 
shall--
            (1) carry out a study to evaluate the energy infrastructure 
        of the Capitol complex to determine how to augment the 
        infrastructure to become more energy efficient--
                    (A) by using unconventional and renewable energy 
                resources;
                    (B) by--
                          (i) incorporating new technologies to 
                      implement effective green building solutions;
                          (ii) adopting computer-based building 
                      management systems; and
                          (iii) recommending strategies based on end-
                      user behavioral changes to implement low-cost 
                      environmental gains; and

[[Page 119 STAT. 1137]]

                    (C) in a manner that would enable the Capitol 
                complex to have reliable utility service in the event of 
                power fluctuations, shortages, or outages;
            (2) carry out a study to explore the feasibility of 
        installing energy and water conservation measures on the rooftop 
        of the Dirksen Senate Office Building, including the area 
        directly above the food service facilities in the center of the 
        building, including the installation of--
                    (A) a vegetative covering area, using native species 
                to the maximum extent practicable, to--
                          (i) insulate and increase the energy 
                      efficiency of the building;
                          (ii) reduce precipitation runoff and conserve 
                      water for landscaping or other uses;
                          (iii) increase, and provide more efficient use 
                      of, available outdoor space through management of 
                      the rooftop of the center of the building as a 
                      park or garden area for occupants of the building; 
                      and
                          (iv) improve the aesthetics of the building; 
                      and
                    (B) onsite renewable energy and other state-of-the-
                art technologies to--
                          (i) improve the energy efficiency and energy 
                      security of the building or the Capitol complex by 
                      providing additional or backup sources of power in 
                      the event of a power shortage or other emergency;
                          (ii) reduce the use of resources by the 
                      building; or
                          (iii) enhance worker productivity; and
                    (C) <<NOTE: Reports. Deadline.>> not later than 180 
                days after the date of enactment of this Act, submit to 
                Congress a report describing the findings and 
                recommendations of the study under subparagraph (B).

    (b) Authorization of Appropriations.--There is authorized to be 
appropriated to the Architect of the Capitol to carry out this section 
$2,000,000 for each of fiscal years 2006 through 2010.

SEC. 1830. STUDY OF AVAILABILITY OF SKILLED WORKERS.

    (a) In General.--The Secretary shall enter into an arrangement with 
the National Academy of Sciences under which the National Academy of 
Sciences shall conduct a study of the short-term and long-term 
availability of skilled workers to meet the energy and mineral security 
requirements of the United States.
    (b) Inclusions.--The study shall include an analysis of--
            (1) the need for and availability of workers for the oil, 
        gas, and mineral industries;
            (2) the availability of skilled labor at both entry level 
        and more senior levels; and
            (3) recommendations for future actions needed to meet future 
        labor requirements.

    (c) Report.--Not later than 2 years after the date of enactment of 
this Act, the Secretary shall submit to Congress a report that describes 
the results of the study.

SEC. 1831. REVIEW OF ENERGY POLICY ACT OF 1992 PROGRAMS.

    (a) In General.--Not <<NOTE: Deadline.>> later than 180 days after 
the date of enactment of this section, the Secretary shall complete a 
study to determine the effect that titles III, IV, and V of the Energy 
Policy Act of 1992 (42 U.S.C. 13211 et seq.) have had on--

[[Page 119 STAT. 1138]]

            (1) the development of alternative fueled vehicle 
        technology;
            (2) the availability of that technology in the market; and
            (3) the cost of alternative fueled vehicles.

    (b) Topics.--As part of the study under subsection (a), the 
Secretary shall specifically identify--
            (1) the number of alternative fueled vehicles acquired by 
        fleets or covered persons required to acquire alternative fueled 
        vehicles;
            (2) the quantity, by type, of alternative fuel actually used 
        in alternative fueled vehicles acquired by fleets or covered 
        persons;
            (3) the quantity of petroleum displaced by the use of 
        alternative fuels in alternative fueled vehicles acquired by 
        fleets or covered persons;
            (4) the direct and indirect costs of compliance with 
        requirements under titles III, IV, and V of the Energy Policy 
        Act of 1992 (42 U.S.C. 13211 et seq.), including--
                    (A) vehicle acquisition requirements imposed on 
                fleets or covered persons;
                    (B) administrative and recordkeeping expenses;
                    (C) fuel and fuel infrastructure costs;
                    (D) associated training and employee expenses; and
                    (E) any other factors or expenses the Secretary 
                determines to be necessary to compile reliable estimates 
                of the overall costs and benefits of complying with 
                programs under those titles for fleets, covered persons, 
                and the national economy;
            (5) the existence of obstacles preventing compliance with 
        vehicle acquisition requirements and increased use of 
        alternative fuel in alternative fueled vehicles acquired by 
        fleets or covered persons; and
            (6) the projected impact of amendments to the Energy Policy 
        Act of 1992 made by this title.

    (c) Report.--Upon completion of the study under this section, the 
Secretary shall submit to Congress a report that describes the results 
of the study and includes any recommendations of the Secretary for 
legislative or administrative changes concerning the alternative fueled 
vehicle requirements under titles III, IV and V of the Energy Policy Act 
of 1992 (42 U.S.C. 13211 et seq.).

SEC. 1832. <<NOTE: 42 USC 16524.>> STUDY ON THE BENEFITS OF ECONOMIC 
            DISPATCH.

    (a) Study.--The Secretary, in coordination and consultation with the 
States, shall conduct a study on--
            (1) the procedures currently used by electric utilities to 
        perform economic dispatch;
            (2) identifying possible revisions to those procedures to 
        improve the ability of nonutility generation resources to offer 
        their output for sale for the purpose of inclusion in economic 
        dispatch; and
            (3) the potential benefits to residential, commercial, and 
        industrial electricity consumers nationally and in each state if 
        economic dispatch procedures were revised to improve the ability 
        of nonutility generation resources to offer their output for 
        inclusion in economic dispatch.

    (b) Definition.--The term ``economic dispatch'' when used in this 
section means the operation of generation facilities to produce

[[Page 119 STAT. 1139]]

energy at the lowest cost to reliably serve consumers, recognizing any 
operational limits of generation and transmission facilities.
    (c) Report to Congress and the States.--Not later than 90 days after 
the date of enactment of this Act, and on a yearly basis following, the 
Secretary shall submit a report to Congress and the States on the 
results of the study conducted under subsection (a), including 
recommendations to Congress and the States for any suggested legislative 
or regulatory changes.

SEC. 1833. RENEWABLE ENERGY ON FEDERAL LAND.

    (a) National <<NOTE: Contracts. Deadline.>> Academy of Sciences 
Study.--Not later than 90 days after the date of enactment of this Act, 
the Secretary of the Interior shall enter into a contract with the 
National Academy of Sciences under which the National Academy of 
Sciences shall--
            (1) study the potential of developing wind, solar, and ocean 
        energy resources (including tidal, wave, and thermal energy) on 
        Federal land available for those uses under current law and the 
        outer Continental Shelf;
            (2) assess any Federal law (including regulations) relating 
        to the development of those resources that is in existence on 
        the date of enactment of this Act; and
            (3) recommend statutory and regulatory mechanisms for 
        developing those resources.

    (b) Submission to Congress.--Not later than 2 years after the date 
of enactment of this Act, the Secretary of the Interior shall submit to 
Congress the results of the study under subsection (a).

SEC. 1834. INCREASED HYDROELECTRIC GENERATION AT EXISTING FEDERAL 
            FACILITIES.

    (a) In General.--The Secretary of the Interior, the Secretary, and 
the Secretary of the Army shall jointly conduct a study of the potential 
for increasing electric power production capability at federally owned 
or operated water regulation, storage, and conveyance facilities.
    (b) Content.--The study under this section shall include 
identification and description in detail of each facility that is 
capable, with or without modification, of producing additional 
hydroelectric power, including estimation of the existing potential for 
the facility to generate hydroelectric power.
    (c) Report.--The Secretaries shall submit to the Committees on 
Energy and Commerce, Resources, and Transportation and Infrastructure of 
the House of Representatives and the Committee on Energy and Natural 
Resources of the Senate a report on the findings, conclusions, and 
recommendations of the study under this section by not later than 18 
months after the date of the enactment of this Act. The report shall 
include each of the following:
            (1) The identifications, descriptions, and estimations 
        referred to in subsection (b).
            (2) A description of activities currently conducted or 
        considered, or that could be considered, to produce additional 
        hydroelectric power from each identified facility.
            (3) A summary of prior actions taken by the Secretaries to 
        produce additional hydroelectric power from each identified 
        facility.
            (4) The costs to install, upgrade, or modify equipment or 
        take other actions to produce additional hydroelectric power

[[Page 119 STAT. 1140]]

        from each identified facility and the level of Federal power 
        customer involvement in the determination of such costs.
            (5) The benefits that would be achieved by such 
        installation, upgrade, modification, or other action, including 
        quantified estimates of any additional energy or capacity from 
        each facility identified under subsection (b).
            (6) A description of actions that are planned, underway, or 
        might reasonably be considered to increase hydroelectric power 
        production by replacing turbine runners, by performing generator 
        upgrades or rewinds, or construction of pumped storage 
        facilities.
            (7) The impact of increased hydroelectric power production 
        on irrigation, water supply, fish, wildlife, Indian tribes, 
        river health, water quality, navigation, recreation, fishing, 
        and flood control.
            (8) Any additional recommendations to increase hydroelectric 
        power production from, and reduce costs and improve efficiency 
        at, federally owned or operated water regulation, storage, and 
        conveyance facilities.

SEC. 1835. SPLIT-ESTATE FEDERAL OIL AND GAS LEASING AND DEVELOPMENT 
            PRACTICES.

    (a) Review.--In consultation with affected private surface owners, 
oil and gas industry, and other interested parties, the Secretary of the 
Interior shall undertake a review of the current policies and practices 
with respect to management of Federal subsurface oil and gas development 
activities and their effects on the privately owned surface. This review 
shall include--
            (1) a comparison of the rights and responsibilities under 
        existing mineral and land law for the owner of a Federal mineral 
        lease, the private surface owners and the Department;
            (2) a comparison of the surface owner consent provisions in 
        section 714 of the Surface Mining Control and Reclamation Act of 
        1977 (30 U.S.C. 1304) concerning surface mining of Federal coal 
        deposits and the surface owner consent provisions for oil and 
        gas development, including coalbed methane production; and
            (3) recommendations for administrative or legislative action 
        necessary to facilitate reasonable access for Federal oil and 
        gas activities while addressing surface owner concerns and 
        minimizing impacts to private surface.

    (b) Report.--The Secretary of the Interior shall report the results 
of such review to Congress not later than 180 days after the date of 
enactment of this Act.

SEC. 1836. RESOLUTION OF FEDERAL RESOURCE DEVELOPMENT CONFLICTS IN THE 
            POWDER RIVER BASIN.

    (a) Review.--The <<NOTE: Wyoming. Montana.>> Secretary of the 
Interior shall review Federal and State laws in existence on the date of 
enactment of this Act in order to resolve any conflict relating to the 
Powder River Basin in Wyoming and Montana between--
            (1) the development of Federal coal; and
            (2) the development of Federal and non-Federal coalbed 
        methane.

    (b) Report.--Not later than 180 days after the date of enactment of 
this Act, the Secretary of the Interior shall submit to Congress a 
report that--

[[Page 119 STAT. 1141]]

            (1) describes methods of resolving a conflict described in 
        subsection (a); and
            (2) identifies a method preferred by the Secretary of the 
        Interior, including proposed legislative language, if any, 
        required to implement the method.

SEC. 1837. <<NOTE: China.>> NATIONAL SECURITY REVIEW OF INTERNATIONAL 
            ENERGY REQUIREMENTS.

    (a) Study.--The Secretary, in consultation with the Secretary of 
Defense and Secretary of Homeland Security, shall conduct a study of the 
growing energy requirements of the People's Republic of China and the 
implications of such growth on the political, strategic, economic, or 
national security interests of the United States, including--
            (1) an assessment of the type, nationality, and location of 
        energy assets that have been sought for investment by entities 
        located in the People's Republic of China;
            (2) an assessment of the extent to which investment in 
        energy assets by entities located in the People's Republic of 
        China has been on market-based terms and free from subsidies 
        from the People's Republic of China;
            (3) an assessment of the effect of investment in energy 
        assets by entities located in the People's Republic of China on 
        the control by the United States of dual-use and export-
        controlled technologies, including the effect on current and 
        future access to foreign and domestic sources of rare earth 
        elements used to produce such technologies;
            (4) an assessment of the relationship between the Government 
        of the People's Republic of China and energy-related businesses 
        located in the People's Republic of China;
            (5) an assessment of the impact on the world energy market 
        of the common practice of entities located in the People's 
        Republic of China of removing the energy assets owned or 
        controlled by such entities from the competitive market, with 
        emphasis on the effect if such practice expands along with the 
        growth in energy consumption of the People's Republic of China;
            (6) an examination of the United States energy policy and 
        foreign policy as it relates to ensuring a competitive global 
        energy market;
            (7) an examination of the relationship between the United 
        States and the People's Republic of China as it relates to 
        pursuing energy interests in a manner that avoids conflicts; and
            (8) a comparison of the appropriate laws and regulations of 
        other nations to determine whether a United States company would 
        be permitted to purchase, acquire, merge, or otherwise establish 
        a joint relationship with an entity whose primary place of 
        business is in that other nation, including the laws and 
        regulations of the People's Republic of China.

    (b) Report and Recommendations.--Not later than 120 days after the 
date of the enactment of this Act, the Secretary, in consultation with 
the Secretary of Defense, shall report to the President and the Congress 
on the findings of the study described in subsection (a) and any 
recommendations the Secretaries consider appropriate.

[[Page 119 STAT. 1142]]

    (c) Regulatory Effect.--Notwithstanding <<NOTE: President. Effective 
date.>> any other provision of law, any instrumentality of the United 
States vested with authority to review a transaction that includes an 
investment in a United States domestic corporation may not conclude a 
national security review related to an investment in the energy assets 
of a United States domestic corporation by an entity owned or controlled 
by the government of the People's Republic of China for 21 days after 
the report to the President and the Congress, and until the President 
certifies that he has received the report described in subsection (b).

SEC. 1838. USED OIL RE-REFINING STUDY.

    The Secretary, in consultation with the Administrator of the 
Environmental Protection Agency, shall undertake a study of the energy 
and environmental benefits of the re-refining of used lubricating oil 
and report to Congress within 90 days after enactment of this Act 
including recommendations of specific steps that can be taken to improve 
collections of used lubricating oil and increase re-refining and other 
beneficial re-use of such oil.

SEC. 1839. <<NOTE: Deadline. Reports.>> TRANSMISSION SYSTEM MONITORING.

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

SEC. 1840. REPORT IDENTIFYING AND DESCRIBING THE STATUS OF POTENTIAL 
            HYDROPOWER FACILITIES.

    (a) Report Requirement.--Not later than 90 days after the date of 
enactment of this Act, the Secretary of the Interior, acting through the 
Bureau of Reclamation, shall submit to the Committee on Resources of the 
House of Representatives and the Committee on Energy and Natural 
Resources of the Senate a report identifying and describing the status 
of potential hydropower facilities included in water surface storage 
studies undertaken by the Secretary for projects that have not been 
completed or authorized for construction.
    (b) Report Contents.--The report shall include the following:
            (1) Identification of all surface storage studies authorized 
        by Congress since the enactment of the Reclamation Project Act 
        of 1939 (43 U.S.C. 485 et seq.).
            (2) The purposes of each project included within each study 
        identified under paragraph (1).
            (3) The status of each study identified under paragraph (1), 
        including for each study--
                    (A) whether the study is completed or, if not 
                completed, still authorized;
                    (B) the level of analyses conducted at the 
                feasibility and reconnaissance levels of review;

[[Page 119 STAT. 1143]]

                    (C) identifiable environmental impacts of each 
                project included in the study, including to fish and 
                wildlife, water quality, and recreation;
                    (D) projected water yield from each such project;
                    (E) beneficiaries of each such project;
                    (F) the amount authorized and expended;
                    (G) projected funding needs and timelines for 
                completing the study (if applicable);
                    (H) anticipated costs of each such project; and
                    (I) other factors that might interfere with 
                construction of any such project.
            (4) An identification of potential hydroelectric facilities 
        that might be developed pursuant to each study identified under 
        paragraph (1).
            (5) Applicable costs and benefits associated with potential 
        hydroelectric production pursuant to each study.

    Approved August 8, 2005.

LEGISLATIVE HISTORY--H.R. 6:
---------------------------------------------------------------------------

HOUSE REPORTS: No. 109-190 (Comm. of Conference).
CONGRESSIONAL RECORD, Vol. 151 (2005):
            Apr. 20, 21, considered and passed House.
            June 14-16, 20-23, 28, considered and passed Senate, 
                amended.
            July 28, House agreed to conference report.
            July 29, Senate agreed to conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 41 (2005):
            Aug. 8, Presidential remarks and statement.

                                  <all>
