(a) In general
Not later than 9 months after August 3, 2007, consistent with the Annex to the Memorandum of Understanding executed on August 9, 2006, between the Department of Transportation and the Department, the Secretary, in consultation with the Secretary of Transportation, shall establish a program for reviewing pipeline operator adoption of recommendations of the September 5, 2002, Department of Transportation Research and Special Programs Administration's Pipeline Security Information Circular, including the review of pipeline security plans and critical facility inspections.

(b) Review and inspection
Not later than 12 months after August 3, 2007, the Secretary and the Secretary of Transportation shall develop and implement a plan for reviewing the pipeline security plans and an inspection of the critical facilities of the 100 most critical pipeline operators covered by the September 5, 2002, circular, where such facilities have not been inspected for security purposes since September 5, 2002, by either the Department or the Department of Transportation.

(c) Compliance review methodology
In reviewing pipeline operator compliance under subsections (a) and (b), risk assessment methodologies shall be used to prioritize risks and to target inspection and enforcement actions to the highest risk pipeline assets.

(d) Regulations
Not later than 18 months after August 3, 2007, the Secretary and the Secretary of Transportation shall develop and transmit to pipeline operators security recommendations for natural gas and hazardous liquid pipelines and pipeline facilities. If the Secretary determines that regulations are appropriate, the Secretary shall consult with the Secretary of Transportation on the extent of risk and appropriate mitigation measures, and the Secretary or the Secretary of Transportation, consistent with the Annex to the Memorandum of Understanding executed on August 9, 2006, shall promulgate such regulations and carry out necessary inspection and enforcement actions. Any regulations shall incorporate the guidance provided to pipeline operators by the September 5, 2002, Department of Transportation Research and Special Programs Administration's Pipeline Security Information Circular and contain additional requirements as necessary based upon the results of the inspections performed under subsection (b). The regulations shall include the imposition of civil penalties for noncompliance.

(e) Funding
From the amounts appropriated pursuant to section 114(w) ¹ of title 49, there shall be made available to the Secretary to carry out this section—

(1) $2,000,000 for fiscal year 2008;

(2) $2,000,000 for fiscal year 2009; and

(3) $2,000,000 for fiscal year 2010.