To direct the Secretary of Energy to make incentive payments to the owners or operators of qualified desalination facilities to partially offset the cost of electrical energy required to operate such facilities, and for other purposes.

February 25, 2004

Mr. DAVIS of Florida (for himself, Mrs. WILSON of New Mexico, Mr. HASTINGS of Florida, Mr. SHAW, Mr. CASE, Ms. GINNY BROWN-WAITE of Florida, Ms. ROYBAL-ALLARD, Mr. CUNNINGHAM, Mr. HINOJOSA, Mr. ISSA, Mr. GREEN of Texas, Mr. FOLEY, Mr. FILNER, Ms. ROS-LEHTINEN, Ms. CORRINE BROWN of Florida, Mr. MICA, Mrs. DAVIS of California, Mr. LINCOLN DIAZ-BALART of Florida, Mr. CRENSHAW, Mr. HUNTER, Mr. DOOLITTLE, and Mr. POMBO) introduced the following bill; which was referred to the Committee on Resources

To direct the Secretary of Energy to make incentive payments to the owners or operators of qualified desalination facilities to partially offset the cost of electrical energy required to operate such facilities, and for other purposes.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the `Desalination Energy Assistance Act of 2004'.

SEC. 2. DESALINATED WATER PRODUCTION INCENTIVE PAYMENTS.

(a) Incentive Payments- The Secretary of Energy (in this section referred to as the `Secretary') shall make incentive payments in an amount determined under subsection (e) to the owners or operators of qualified desalination facilities to partially offset the cost of electrical energy required to operate such facilities.

(b) Qualified Desalination Facility- For purposes of this section, the term `qualified desalination facility' means a facility that--

(1) produces for sale to domestic customers desalinated seawater, brackish groundwater, or surface water whose source water is greater than 1,000 parts per million total dissolved solids;

(2) is owned or operated by--

(A) a State or any political subdivision, agency, authority, or instrumentality of a State; or

(B) a corporation responsible for providing municipal water service pursuant to State law; and

(3) is first used to produce desalinated water during the 10-year period beginning on October 1 of the first full fiscal year occurring after the date of the enactment of this section.

(c) Agreement; Deadline- The Secretary may not make any payment to the owner or operator of a qualified desalination facility under this section, unless not later than the end of fiscal year 2015 the Secretary enters into a written agreement with the owner or operator to make such payment.

(d) Payment Period- The Secretary may make payments to the owner or operator of a qualified desalination facility under this section for a period not to exceed 10 years--

(1) beginning on the date on which the facility is first used to produce desalinated water; and

(2) ending not later than September 30, 2015.

(e) Amount of Payment-

(1) In general- Payments made by the Secretary under this section to the owner or operator of any qualified desalination facility shall be based on the amount of desalinated water produced by the facility during the payment period described in subsection (d). For any facility, the amount of such payment shall be 62 cents for every thousand gallons of desalinated water produced and sold, adjusted as provided in paragraph (2).

(2) Adjustments- The amount of the payment made to any person under this subsection 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 (26 U.S.C. 29(d)(2)(B)), except that in applying such provisions the calendar year 2005 shall be substituted for calendar year 1979.

(f) Application- The Secretary may not make a grant to the owner or operator of a qualified desalination facility under this section unless the facility submits an application to the Secretary in such form, at such time, and containing such information and assurances as the Secretary may require.

(g) Limitation- In any fiscal year not more than 60 percent of the funds made available by the Secretary under this section shall be made available to the owners or operators of qualified desalination facilities that obtain source water directly from the sea, an estuary, or from in-bank extraction wells that are of seawater origin.

(h) Budget Act Compliance- The authority provided by this section may be exercised only in such amounts or to such extent as provided in advance in appropriations Acts.

(i) Authorization of Appropriations- There is authorized to be appropriated to the Secretary $200,000,000 to carry out this section for the period of fiscal years 2005 through 2015.

END