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                                                       Calendar No. 374
110th Congress                                                   Report
                                 SENATE
 1st Session                                                    110-176

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



 
          UNITED STATES-ISRAEL ENERGY COOPERATION ACT OF 2007

                                _______
                                

               September 17, 2007.--Ordered to be printed

                                _______
                                

   Mr. Bingaman, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 838]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 838) to authorize funding for eligible 
joint ventures between United States and Israeli businesses and 
academic persons, to establish the International Energy 
Advisory Board, and for other purposes, having considered the 
same, reports favorably thereon with an amendment and an 
amendment to the title and recommends that the bill, as 
amended, do pass.
    The amendments are as follows:
    1. Strike out all after the enacting clause and insert in 
lieu thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``United States-Israel Energy 
Cooperation Act''.

SEC. 2. FINDINGS.

  Congress finds that--
          (1) it is in the highest national security interests of the 
        United States to develop renewable energy sources;
          (2) the State of Israel is a steadfast ally of the United 
        States;
          (3) the special relationship between the United States and 
        Israel is manifested in a variety of cooperative scientific 
        research and development programs, such as--
                  (A) the United States-Israel Binational Science 
                Foundation; and
                  (B) the United States-Israel Binational Industrial 
                Research and Development Foundation;
          (4) those programs have made possible many scientific, 
        technological, and commercial breakthroughs in the fields of 
        life sciences, medicine, bioengineering, agriculture, 
        biotechnology, communications, and others;
          (5) on February 1, 1996, the Secretary of Energy and the 
        Israeli Minister of Energy and Infrastructure signed an 
        agreement to establish a framework for collaboration between 
        the United States and Israel in energy research and development 
        activities;
          (6) Israeli scientists and engineers are at the forefront of 
        research and development in the field of renewable energy 
        sources; and
          (7) enhanced cooperation between the United States and Israel 
        for the purpose of research and development of renewable energy 
        sources would be in the national interests of both countries.

SEC. 3. GRANT PROGRAM.

  (a) Establishment.--In implementing the agreement entitled the 
``Agreement between the Department of Energy of the United States of 
America and the Ministry of Energy and Infrastructure of Israel 
Concerning Energy Cooperation'', dated February 1, 1996, the Secretary 
of Energy (referred to in this Act as the ``Secretary'') shall 
establish a grant program in accordance with the requirements of 
sections 988 and 989 of the Energy Policy Act of 2005 (42 U.S.C. 16352, 
16353) to support research, development, and commercialization of 
renewable energy or energy efficiency.
  (b) Types of Energy.--In carrying out subsection (a), the Secretary 
may make grants to promote--
          (1) solar energy;
          (2) biomass energy;
          (3) energy efficiency;
          (4) wind energy;
          (5) geothermal energy;
          (6) wave and tidal energy; and
          (7) advanced battery technology.
  (c) Eligible Applicants.--An applicant shall be eligible to receive a 
grant under this section if the project of the applicant--
          (1) addresses a requirement in the area of improved energy 
        efficiency or renewable energy sources, as determined by the 
        Secretary; or
          (2) is a joint venture between--
                  (A)(i) a for-profit business entity, academic 
                institution, National Laboratory (as defined in section 
                2 of the Energy Policy Act of 2005 (42 U.S.C. 15801)), 
                or nonprofit entity in the United States; and
                  (ii) a for-profit business entity, academic 
                institution, or nonprofit entity in Israel; or
                  (B)(i) the Federal Government; and
                  (ii) the Government of Israel.
  (d) Applications.--To be eligible to receive a grant under this 
section, an applicant shall submit to the Secretary an application for 
the grant in accordance with procedures established by the Secretary, 
in consultation with the advisory board established under subsection 
(e).
  (e) Advisory Board.--
          (1) Establishment.--The Secretary shall establish an advisory 
        board--
                  (A) to monitor the method by which grants are awarded 
                under this section; and
                  (B) to provide to the Secretary periodic performance 
                reviews of actions taken to carry out this section.
          (2) Composition.--The advisory board established under 
        paragraph (1) shall be composed of 3 members, to be appointed 
        by the Secretary, of whom--
                  (A) 1 shall be a representative of the Federal 
                Government;
                  (B) 1 shall be selected from a list of nominees 
                provided by the United States-Israel Binational Science 
                Foundation; and
                  (C) 1 shall be selected from a list of nominees 
                provided by the United States-Israel Binational 
                Industrial Research and Development Foundation.
  (f) Contributed Funds.--Notwithstanding section 3302 of title 31, 
United States Code, the Secretary may accept, retain, and use funds 
contributed by any person, government entity, or organization for 
purposes of carrying out this section--
          (1) without further appropriation; and
          (2) without fiscal year limitation.
  (g) Report.--Not later than 180 days after the date of completion of 
a project for which a grant is provided under this section, the grant 
recipient shall submit to the Secretary a report that contains--
          (1) a description of the method by which the recipient used 
        the grant funds; and
          (2) an evaluation of the level of success of each project 
        funded by the grant.
  (h) Classification.--Grants shall be awarded under this section only 
for projects that are considered to be unclassified by both the United 
States and Israel.

SEC. 4. TERMINATION.

  The grant program and the advisory committee established under this 
Act terminate on the date that is 7 years after the date of enactment 
of this Act.

SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

  The Secretary shall use amounts authorized to be appropriated under 
section 931 of the Energy Policy Act of 2005 (42 U.S.C. 16231) to carry 
out this Act.

    2. Amend the title so as to read: ``To authorize funding 
for eligible joint ventures between United States and Israeli 
businesses and academic persons.''.

                         PURPOSE OF THE MEASURE

    The purpose of the measure is to promote joint ventures 
between United States and Israeli business and academic persons 
in research, development, demonstration and commercialization 
in the areas of renewable energy and energy efficiency.

                          BACKGROUND AND NEED

    The United States and Israel have a long-standing 
relationship in joint energy research and development. The two 
countries entered into an Energy Research and Development 
Agreement in 1984, which expired in 1991, and into a subsequent 
Energy Cooperation Agreement in 1996. The later agreement 
establishes cooperation and exchange of scientific and 
technical information in a wide range of areas including 
renewable energy, fossil energy, and electric transmission. In 
addition, research cooperation entities exist covering a wide 
array of topics, notably through the United States-Israel 
Binational Science Foundation and the United States-Israel 
Binational Industrial Research and Development Foundation. S. 
838 furthers the cooperation of the two countries by focusing 
specific grant programs for joint ventures between United 
States and Israeli business and academic persons in the areas 
of research, development, demonstration, and commercialization 
of renewable energy and energy efficiency, both of which are 
important to the two countries.

                          LEGISLATIVE HISTORY

    S. 838 was introduced by Senator Smith for himself and 
Senators Bingaman and Landrieu on March 12, 2007 and referred 
to the Committee on Energy and Natural Resources. Senators 
Cantwell, Casey, Conrad, Menendez, and Spector were later added 
as cosponsors. The Subcommittee on Energy held a hearing on S. 
838 on May 22, 2007. At a business meeting on July 25, 2007, 
the Committee on Energy and Natural Resources ordered S. 838 
favorably reported with an amendment in the nature of a 
substitute.

                        COMMITTEE RECOMMENDATION

    The Committee on Energy and Natural Resources, in open 
business session on July 25, 2007, by a unanimous voice vote of 
a quorum present, recommended that the Senate pass S. 838, if 
amended as described herein.

                          COMMITTEE AMENDMENT

    During consideration of S. 838, the Committee adopted an 
amendment in the nature of a substitute. The amendment 
simplifies the nature of the grant program by requiring the 
Secretary to fund grants in consultation with the Advisory 
Board without specifying the office responsible within the 
Department; simplifies the nature of the advisory board; and 
eliminates a position nominated by the Israeli government, 
since this program is principally conducted through the United 
States funding. The amendment further eliminates a repayment 
requirement for grant recipients whose research results in 
commercial profits; makes technical corrections to the 
acceptance and use by the Secretary of non-federal funds as 
part of the grant program; and requires that projects carried 
out under the program are considered unclassified by both 
countries to promote the widest possible utility. A technical 
correction was made to the title of S. 838 to better reflect 
the nature of the substitute amendment.

                      SECTION-BY-SECTION ANALYSIS

    Section 1 provides for a short title of the Act.
    Section 2 contains findings.
    Section 3 directs the Secretary of Energy to establish a 
grant program to support joint ventures between the United 
States and Israeli business and academic persons to support 
research, development, and commercialization of renewable 
energy or energy efficiency.
    Subsection (a) directs the Secretary to establish the grant 
program in implementing the agreement between the Department of 
Energy of the United States of America and the Ministry of 
Energy and Infrastructure of Israel concerning Energy 
Cooperation dated February 1, 1996. The subsection specifies 
that research supported under this program shall meet the cost-
sharing and merit-based requirements of sections 988 and 989 of 
the Energy Policy Act of 2005 (42 U.S.C. 16352 and 42 U.S.C. 
16353).
    Subsection (b) specifies that grants under this program 
shall be made to promote solar energy, biomass energy, energy 
efficiency, wind energy, geothermal energy, wave and tidal 
energy, and advanced battery technology.
    Subsection (c) further limits eligibility for grants under 
this program to joint ventures between for-profit business 
entities, academic institutions, or National Laboratories (as 
defined in section 2 of the Energy Policy Act of 2005 (42 
U.S.C. 15801)) in the United States, and for-profit business 
entities, academic institutions, or nonprofit entities in 
Israel; or to joint ventures between the United States 
Government and the Government of Israel.
    Subsection (d) specifies that the grant applicants shall 
submit applications to the Secretary in consultation with the 
Advisory Board.
    Subsection (e) establishes the Advisory Board, which shall 
monitor the process by which grants are awarded and provide 
periodic performance reviews to the Secretary of the program as 
a whole. The Advisory Board shall be composed of three members, 
one from the Federal Government, one from a list of nominees 
provided from the United States-Israel Binational Foundation 
and one from a list of nominees provided by the United States-
Israel Binational Industrial Research and Development 
Foundation.
    Subsection (f) provides that the Secretary may accept non-
federal funds for the purposes of carrying out the program 
without fiscal year limitation and further appropriation.
    Subsection (g) requires that grantees submit a report to 
the Secretary within 180 days after project completion 
describing how the grant funds were used and the level of 
success of the projects funded under the grant.
    Subsection (h) requires that projects shall be considered 
unclassified by both the United States and Israel to be 
eligible for funding under this program.
    Section 4 terminates the program 7 years after the date of 
enactment.
    Section 5 authorizes appropriations under existing funds 
authorized under section 931 of the Energy Policy Act of 2005 
(42 U.S.C. 16231).

                     COST AND BUDGET CONSIDERATIONS

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office.

                                                September 11, 2007.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 838, the United 
States-Israel Energy Cooperation Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Megan 
Carroll.
        Sincerely,
                                                   Peter R. Orszag.
    Enclosure.

S. 838--United States-Israel Energy Cooperation Act

    Summary: S. 838 would direct the Secretary of Energy to 
establish a grant program to support joint ventures between 
U.S. and Israeli entities to promote certain energy-related 
technologies. CBO estimates that implementing the bill would 
cost $4 million in 2008 and $35 million over the 2008-2012 
period, assuming appropriation of the necessary amounts. CBO 
estimates that enacting S. 838 would increase both direct 
spending and revenues by less than $500,000 annually.
    S. 838 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the federal government: The estimated 
budgetary impact of S. 838 is shown in the following table. The 
costs of this legislation fall within budget function 270 
(energy).

------------------------------------------------------------------------
                                      By fiscal year, in millions of
                                                 dollars--
                                 ---------------------------------------
                                   2008    2009    2010    2011    2012
------------------------------------------------------------------------
              CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level...       8       8       8       8       9
Estimated Outlays...............       4       7       8       8       8
------------------------------------------------------------------------

    Basis of estimate: CBO estimates that implementing S. 838 
would cost $4 million in 2008 and $35 million over the 2008-
2012 period. We also estimate that enacting the bill would 
increase both direct spending and revenues, but by less than 
$500,000 a year. For this estimate, CBO assumes that S. 838 
will be enacted near the start of fiscal year 2008.

Spending subject to appropriation

    S. 838 would direct the Secretary of Energy to establish a 
grant program to provide financial assistance for joint 
ventures between U.S. and Israeli government units, businesses, 
academic institutions, or nonprofit entities to promote 
technologies related to energy efficiency or renewable energy. 
The bill would require the Secretary to establish an advisory 
board to monitor the process for awarding those grants.
    Based on information provided by the Department of Energy 
(DOE) about funding levels for similar international programs, 
CBO estimates that fully funding S. 838 would require 
appropriations totaling $8 million in 2008 and $36 million over 
the 2008-2012 period. Assuming appropriation of the necessary 
amounts, we estimate that spending would total $4 million in 
2008 and $35 million over the 2008-2012 period. That estimate 
assumes that DOE would spend $30 million over the next five 
years for grants and about $1 million annually for the proposed 
advisory board.

Direct spending and revenues

    S. 838 would authorize the Secretary of Energy to accept 
donations and spend those amounts, without further 
appropriation, for activities authorized by the bill. Any 
amounts received would be classified as governmental receipts 
(revenues), and subsequent outlays would be recorded as direct 
spending. Based on information provided by DOE, CBO estimates 
that any increases in revenues and direct spending under S. 838 
would not exceed $500,000 in any year.
    Intergovernmental and private-sector impact: S. 838 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The bill would authorize grants for joint 
ventures with Israel to support energy efficiency. This program 
would benefit participating public institutions of higher 
education. Any costs they might incur, including matching 
funds, would be incurred voluntarily.
    Estimate prepared by: Federal Costs: Megan Carroll; Impact 
on State, Local, and Tribal Governments: Neil Hood; Impact on 
the Private Sector: Amy Petz.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                           REGULATORY IMPACT

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 838. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant economic responsibilities on private individuals 
and businesses.
    The Secretary may need to collect some personal information 
from grant applicants. The Committee expects the Secretary to 
limit the collection of personal information to the minimum 
amount needed to adequately administer the programs, and 
therefore anticipates little impact on personal privacy.
    Enactment of S. 838 will result in the production of 
various applications, reports, and performance assessments 
necessary to the administration of the various programs 
authorized by the bill. Again, the Committee expects the 
Secretary to limit paperwork requirements to the minimum amount 
needed to adequately administer the program.

                        EXECUTIVE COMMUNICATION

    At a legislative hearing before the Committee on Energy and 
Natural Resources on May 22, 2007, the Department of Energy 
Provided the following testimony with respect to S. 838.

   Statement of David R. Hill, General Counsel, Department of Energy

    Chairman Dorgan, Senator Murkowski, and members of the 
Committee, my name is David Hill and I am the General Counsel 
of the U.S. Department of Energy. I want to thank-you for the 
opportunity to appear today and offer preliminary comments on 
five energy-related bills that the Congress is considering. The 
bills before the Committee today make each valuable 
contributions to our national discussion on energy security, 
but in some cases could benefit from further review, discussion 
and modification. The Department looks forward to working with 
the Committee to resolve these issues. I would like to discuss 
the elements of each bill, as well as present some of the DOE 
activities that are already underway in areas addressed by the 
bills.


                                 s. 838


    S. 838 addresses U.S.-Israeli cooperation on research, 
development, and commercialization of alternate energy, 
improved energy efficiency and renewable sources. The 
Department has serious concerns with this legislation as 
drafted. While cooperation with Israel to encourage cooperation 
on alternative and renewable energy sources could be 
beneficial, we believe that the bill should stress the need for 
true bilateral cooperation and interactive research, rather 
than research funded solely by the U.S. Government. In that 
regard, the Department already collaborates on a number of 
issues, and DOE has an umbrella agreement with the Israeli 
Ministry of National Infrastructures. We believe that existing 
bilateral arrangements serve both countries well, and we oppose 
the creation of additional burdensome organization 
requirements, such as S. 838 section 4 International Advisory 
Board provisions.
    An Israeli initiative centered on energy security, 
environmental stewardship, and global climate change, similar 
to the President Advanced Energy Initiative, would benefit 
Israel by helping ensure adequate and reliable supplies of 
energy for that country. The Department could assist Israel in 
developing that plan and in fact, DOE Office of Energy 
Efficiency and Renewable Energy (EERE) already has engaged in 
initial discussions with our Israel counterparts on the issue.
    Finally, S. 838 could have a significant financial impact 
on EERE budget. This bill would authorize $20 million annually 
for seven years for the projects authorized by this bill. We do 
not support taking this amount of funding from other important 
EERE programs. In comparison, EERE budget for the Asia Pacific 
Partnership, which encompasses six countries, including India 
and China, the two fastest growing economies and largest 
emitters of carbon, has a total budget of $7.5 million. 
Allocating $20 million out of currently authorized funding for 
a single country would shift scarce resources away from the 
Department efforts to develop and commercialize advanced 
technologies that lesson our dependence on oil and provide for 
energy security. The goals of S. 838, as well as the efforts to 
assist Israel in developing its own national energy action 
plan, can be achieved with substantially less funding.
    I do note that the bill authorizes the DOE to accept 
contributions from private sources to carry out this Act. This 
could mitigate the need for appropriations to carry out this 
Act although some modifications would be necessary to make the 
bill workable.
    Again, I stress the Department values its current 
collaboration with Israel, and seeks to build upon this already 
productive relationship. We believe, however, that the time for 
action is now, for both the United States and Israel. Putting 
action plans into place that are focused on alternative sources 
of energy is a goal that our nations can and must share, and we 
would urge the Congress to adopt legislation that supports that 
goal.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, there are no changes in existing 
law made by the bill S. 838, as ordered reported.