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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4805 Introduced in House (IH)]

106th CONGRESS
  2d Session
                                H. R. 4805

   To protect the energy security of the United States and decrease 
 America's dependency on foreign oil sources to 50 percent by the year 
  2010 by enhancing the use of renewable energy resources, conserving 
    energy resources, improving energy efficiencies, and increasing 
domestic energy supplies, mitigating the effect of increases in energy 
 prices on the American consumer, including the poor and elderly, and 
                          for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 29, 2000

Mr. Watkins (for himself, Mr. Thornberry, Mr. Skeen, Mr. Sessions, Mr. 
 Smith of Texas, Mr. Combest, and Mr. Young of Alaska) introduced the 
following bill; which was referred to the Committee on Commerce, and in 
 addition to the Committees on Resources, Ways and Means, and Science, 
for a period to be subsequently determined by the Speaker, in each case 
for consideration of such provisions as fall within the jurisdiction of 
                        the committee concerned

_______________________________________________________________________

                                 A BILL

 
   To protect the energy security of the United States and decrease 
 America's dependency on foreign oil sources to 50 percent by the year 
  2010 by enhancing the use of renewable energy resources, conserving 
    energy resources, improving energy efficiencies, and increasing 
domestic energy supplies, mitigating the effect of increases in energy 
 prices on the American consumer, including the poor and elderly, 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 ``National Energy Security Act of 
2000''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) increasing dependence on foreign sources of oil causes 
        systemic harm to all sectors of the domestic United States 
        economy, threatens National security, undermines the ability of 
        Federal, state, and local units of government to provide 
        essential services, and jeopardizes the peace, security, and 
        welfare of the American people;
            (2) dependence on imports of foreign oil was 46 percent in 
        1992, rose to more than 55 percent by the beginning of 2000, 
        and is estimated by the Department of Energy to rise to 65 
        percent by 2020 unless current policies are altered;
            (3) despite increased energy efficiencies, energy use in 
        the United States is expected to increase 27 percent by 2020.
            (4) the United States lacks a comprehensive national energy 
        policy and has taken actions that limit the availability and 
        capability of the domestic energy sources of oil and gas, coal, 
        nuclear and hydro;
            (5) a comprehensive energy strategy needs to be developed 
        to combat this trend, decrease the United States dependence on 
        imported oil supplies and strengthen our national energy 
        security;
            (6) the goal of this comprehensive strategy must be to 
        decrease the United States dependence on foreign oil supplies 
        to not more than 50 percent by the year 2010;
            (7) in order to meet this goal, this comprehensive energy 
        strategy needs to be multi-faceted and include enhancing the 
        use of renewable energy resources (including hydro, nuclear, 
        solar, wind, and biomass), conserving energy resources 
        (including improving energy efficiencies), and increasing 
        domestic supplies of nonrenewable resources (including oil, 
        natural gas, and coal);
            (8) conservation efforts and alternative fuels alone will 
        not enable America to meet this goal as conventional energy 
        sources supply 96 percent of America's power at this time; and
            (9) immediate actions also need to be taken in order to 
        mitigate the effect of recent increases in oil prices on the 
        American consumer, including the poor and the elderly.
    (b) Purposes.--The purposes of this Act are to protect the energy 
security of the United States by decreasing America's dependency on 
foreign oil sources to not more than 50 percent by the year 2010 by 
enhancing the use of renewable energy resources, conserving energy 
resources (including improving energy efficiencies), and increasing 
domestic energy supplies and to mitigate the immediate effect of 
increases in energy prices on the American consumer, including the poor 
and the elderly.

  TITLE I--ENERGY SECURITY ACTIONS REQUIRED OF THE SECRETARY OF ENERGY

SEC. 101. ANNUAL REPORT ON UNITED STATES ENERGY INDEPENDENCE.

    (a) Report.--Beginning on October 1, 2000, and annually thereafter, 
the Secretary of Energy, in consultation with the Secretary of Defense 
and the heads of other Federal agencies, shall submit a report to the 
President and the Congress which evaluates the progress the United 
States has made toward obtaining the goal of not more than 50 percent 
dependence on foreign oil sources by 2010. The Secretary shall adopt as 
interim goals, a reduction in dependence on oil imports to not more 
than 54 percent by 2005 and 52 percent by 2008.
    (b) Alternatives.--The report submitted under subsection (a) shall 
specify any specific legislation or administrative actions necessary to 
meet the goal established under such subsection, and set forth a range 
of options and alternatives with a benefit/cost analysis for each 
option or alternative together with an estimate for the contribution 
that each option or alternative could make to reduce foreign oil 
imports. The report shall indicate, in detail, options and alternatives 
to--
            (1) increase the use of renewable domestic energy sources, 
        including conventional and non-conventional sources such as, 
        but not limited to, increased hydroelectric generation at 
        existing Federal facilities,
            (2) conserve energy resources, including improving 
        efficiencies and decreasing consumption, and
            (3) increase domestic production and use of oil, natural 
        gas, and coal, including any actions that would need to be 
        implemented to provide access to, and transportation of, such 
        energy resources.
    (c) Refinery Capacity.--As part of the reports submitted in 2000, 
2005, and 2008, the Secretary of Energy shall examine and report on the 
condition of the domestic refinery industry and the extent of domestic 
storage capacity for various categories of petroleum products and make 
such recommendations as such Secretary believes will enhance domestic 
capabilities to respond to short-term shortages of various fuels due to 
climate or supply interruptions.

SEC. 102. REPORT OF THE NATIONAL PETROLEUM COUNCIL.

    The Secretary of Energy shall review the report of the National 
Petroleum Council submitted to him on December 15, 1999, and shall 
submit such report, together with any recommendations for 
administrative or legislative actions, to the President no later than 
September 30, 2000.

SEC. 103. INTERAGENCY WORK GROUP ON NATURAL GAS.

    (a) Interagency Work Group.--The Secretary of Energy shall 
establish an Interagency Work Group on Natural Gas (referred to as 
``Group'' in this subsection) within the National Economic Council. The 
Group shall include representatives from each Federal agency that has a 
significant role in the development and implementation of natural gas 
policy, resource assessment, or technologies for natural gas 
exploration, production, transportation, and use.
    (b) Strategy and Comprehensive Policy.--The Group shall develop a 
strategy and comprehensive policy for the use of natural gas as an 
essential component of overall national objectives of energy security, 
economic growth, and environmental protection. In developing the 
strategy and policy, the Group shall solicit and consider suggestions 
from States and local units of government, industry, and other non-
Federal groups, organizations, or individuals possessing information or 
expertise in one or more areas under review by the Group. The policy 
shall recognize the significant lead times required for the development 
of additional natural gas supplies and the delivery infrastructure 
required to transport those supplies. The Group shall consider, but is 
not limited to, issues of access to and development of resources, 
transportation, technology development, environmental regulation and 
the associated economic and environmental costs of alternatives, 
education of future workforce, financial incentives related to 
exploration, production, transportation, development, and use of 
natural gas.
    (c) Report.--Not later than 6 months after the date of the 
enactment of this Act, the Group shall submit a report to the Secretary 
of Energy setting forth its recommendations on a comprehensive policy 
for the use of natural gas and the specific elements of a national 
strategy to achieve the objectives of the policy.
    (d) Secretary Review.--The Secretary of Energy shall review the 
report and, within 3 months, submit the report, together with any 
recommendations for administrative or legislative actions, to the 
President and the appropriate committees of the Congress.
    (e) Trends.--The Group shall monitor trends for the assumptions 
used in developing its report, including the specific elements of a 
national strategy to achieve the objectives of the comprehensive 
policy, and shall advise the Secretary whenever it anticipates changes 
that might require alterations in the strategy.
    (f) Progress Report.--On June 1, 2002, and every two years 
thereafter, the Group shall submit a report to the President and the 
Congress evaluating the progress that has been made in the prior two 
years in implementing the strategy and accomplishing the objectives of 
the comprehensive policy.

TITLE II--AMENDMENTS TO ENERGY POLICY AND CONSERVATION ACT AND ACTIONS 
               AFFECTING THE STRATEGIC PETROLEUM RESERVE

SEC. 201. AMENDMENTS TO TITLE I OF EPCA.

    Title I of the Energy Policy and Conservation Act (42 U.S.C. 6211-
6251) is amended--
            (1) in section 161(h) (42 U.S.C. 6241), by--
                    (A) striking ``and'' at the end of (1)(A);
                    (B) striking ``,'' and inserting ``; and'' at the 
                end of (1)(B);
                    (C) inserting after paragraph (B) the following new 
                paragraph:
                    ``(C) concurs in the determination of the Secretary 
                of Defense that action taken under this subsection will 
                not impair national security.''; and
                    (D) striking the period after ``Reserve'' at the 
                end of paragraph (2) and inserting ``, if the Secretary 
                finds that action taken under this subsection will not 
                have an adverse effect on the domestic petroleum 
                industry.'';
            (2) in section 166 (42 U.S.C. 6246), by--
                    (A) striking ``for fiscal year 2000'' and inserting 
                ``2003''; and
                    (B) striking ``March 31, 2000'' and inserting 
                ``December 31, 2001''; and
            (3) in section 181 (42 U.S.C. 6251), by striking ``March 
        31, 2000'' each place it appears and inserting ``December 31, 
        2003''.

SEC. 202. AMENDMENTS TO TITLE II OF EPCA.

    Title II of the Energy Policy and Conservation Act (42 U.S.C. 6261-
6285) is amended--
            (1) in section 256(h) (42 U.S.C. 6276(h)), by striking 
        ``year 1997'' and inserting ``years 1997 through 2003''; and
            (2) in section 281 (42 U.S.C. 6285), by striking `March 31, 
        2000' each place it appears and inserting ``December 31, 
        2003''.

SEC. 203. STRATEGIC PETROLEUM RESERVE STUDY AND REPORT.

    The President shall immediately establish an Interagency Panel on 
the Strategic Petroleum Study (referred to as the ``Panel'' in this 
section) to study oil markets and estimate the extent and frequency of 
fluctuations in the supply and price of, and demand for crude oil in 
the future and determine appropriate capacity of and uses for the 
Strategic Petroleum Reserve. The Panel may recommend changes in 
existing authorities to provide additional flexibility for and 
strengthen the ability of the Strategic Petroleum Reserve to respond to 
energy requirements. The Panel shall complete its study and submit a 
report containing its findings and any recommendations to the President 
and the Congress within six months from the date of enactment of this 
Act.

TITLE III--PROVISIONS TO PROTECT CONSUMERS AND LOW INCOME FAMILIES AND 
                     ENCOURAGE ENERGY EFFICIENCIES

SEC. 301. CHANGES IN WEATHERIZATION PROGRAM TO PROTECT LOW-INCOME 
              PERSONS.

    (a) The matter under the heading ``Energy Conservation (including 
transfer of funds)'' in title II of the Department of the Interior and 
Related Agencies Appropriations Act, 2000 (113 Stat. 1535, 1501A-180), 
is amended by striking ``grants:'' and all that follows and inserting 
``grants.''.
    (b) Section 415 of the Energy Conservation and Production Act (42 
U.S.C. 6865) is amended--
            (1) in subsection (a)(1) by striking the first sentence;
            (2) in subsection (a)(2) by--
                    (A) striking ``(A)'',
                    (B) striking ``approve a State's application to 
                waive the 40 percent requirement established in 
                paragraph (1) if the State includes in its plan'' and 
                inserting ``establish'', and
                    (C) striking subparagraph (B);
            (3) in subsection (c)(1) by--
                    (A) striking ``paragraphs (3) and (4)'' and 
                inserting ``paragraph (3)'';
                    (B) striking ``$1,600'' and inserting ``$2,500'';
                    (C) striking ``and'' at the end of subparagraph 
                (C);
                    (D) striking the period and inserting ``, and'' in 
                subparagraph (D); and
                    (E) inserting after subparagraph (D) the following 
                new subparagraph:
                    ``(E) the cost of making heating and cooling 
                modifications, including replacement.'';
            (4) in subsection (c)(3) by--
                    (A) striking ``1991, the $1,600 per dwelling unit 
                limitation'' and inserting ``2000, the $2,500 per 
                dwelling unit average'',
                    (B) striking ``limitation'' and inserting 
                ``average'' each time it appears, and
                    (C) inserting ``the'' after ``begining of'' in 
                subparagraph (B); and
            (5) by striking subsection (c)(4).

SEC. 302. SUMMER FILL AND FUEL BUDGETING PROGRAMS.

    (a) Part C of title II of the Energy Policy and Conservation Act 
(42 U.S.C. 6211 et seq.) is amended by adding at the end the following:

               ``summer fill and fuel budgeting programs

    ``Sec. 273. (a) Definitions.--In this section:
            ``(1) Budget contract.--The term `budget contract' means a 
        contract between a retailer and a consumer under which the 
        heating expenses of the consumer are spread evenly over a 
        period of months.
            ``(2) Fixed-price contract.--The term `fixed-price 
        contract' means a contract between a retailer and a consumer 
        under which the retailer charges the consumer a set price for 
        propane, kerosene, or heating oil without regard to market 
        price fluctuations.
            ``(3) Price cap contract.--The term `price cap contract' 
        means a contract between a retailer and a consumer under which 
        the retailer charges the consumer the market price for propane, 
        kerosene, or heating oil, but the cost of the propane, 
        kerosene, or heating oil may not exceed a maximum amount stated 
        in the contract.
    ``(b) Assistance.--At the request of the chief executive officer of 
a State, the Secretary shall provide information, technical assistance, 
and funding--
            ``(1) to develop education and outreach programs to 
        encourage consumers to fill their storage facilities for 
        propane, kerosene, and heating oil during the summer months; 
        and
            ``(2) to promote the use of budget contracts, price cap 
        contracts, fixed-price contracts, and other advantageous 
        financial arrangements;
to avoid severe seasonal price increases for and supply shortages of 
those products.
    ``(c) Preference.--In implementing this section, the Secretary 
shall give preference to States that contribute public funds or 
leverage private funds to develop State summer fill and fuel budgeting 
programs.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            ``(1) $25,000,000 for fiscal year 2001; and
            ``(2) such sums as are necessary for each fiscal year 
        thereafter.
    ``(e) Inapplicability of Expiration Provision.--Section 281 shall 
not apply to this section.''.
    (b) The table of contents in the first section of the Energy Policy 
and Conservation Act (42 U.S.C. prec. 6201) is amended by inserting 
after the item relating to section 272 the following:

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

SEC. 303. ENERGY EFFICIENCY SCIENCE INITIATIVE.

    There are authorized to be appropriated $25,000,000 for fiscal year 
2001 and such sums as are necessary for each fiscal year thereafter for 
an Energy Efficiency Science Initiative to be managed by the Assistant 
Secretary for Energy Efficiency and Renewable Energy 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. The Secretary of Energy shall submit to the 
Committee on Science and the Committee on Appropriations of the House 
of Representatives, and to the Committee on Energy and Natural 
Resources and the Committee on Appropriations of the Senate, an annual 
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.

  TITLE IV--PROVISIONS TO ENHANCE THE USE OF DOMESTIC ENERGY RESOURCES

                  Subtitle A--Hydroelectric Resources

SEC. 401. USE OF FEDERAL FACILITIES.

    (a) The Secretary of the Interior and the Secretary of the Army 
shall each inventory all dams, impoundments, and other facilities under 
their jurisdiction.
    (b) Based on this inventory and other information, the Secretary of 
the Interior and Secretary of the Army shall each submit a report to 
the Congress within six months from the date of enactment of this Act. 
Each report shall--
            (1) Describe, in detail, each facility that is capable, 
        with or without modification, of producing additional 
        hydroelectric power. For each such facility, the report shall 
        state the full potential for the facility to generate 
        hydroelectric power, whether the facility is currently 
        generating hydroelectric power, and the costs to install, 
        upgrade, modify, or take other actions to increase the 
        hydroelectric generating capability of the facility. For each 
        facility that currently has hydroelectric generating equipment, 
        the report shall indicate the condition of such equipment, the 
        maintenance requirements, and the schedule for any improvements 
        as well as the purposes for which power is generated.
            (2) Describe what actions are planned and underway to 
        increase the hydroelectric production from facilities under his 
        jurisdiction and shall include any recommendations the 
        Secretary deems advisable to increase such production, reduce 
        costs, and improve efficiency at Federal facilities, including, 
        but not limited to, use of lease of power privilege and 
        contracting with non-Federal entities for operation and 
        maintenance.

SEC. 402. EXPEDITED FERC HYDROELECTRIC LICENSING PROCEDURES.

    The Federal Energy Regulatory Commission shall immediately 
undertake a comprehensive review of policies, procedures and 
regulations for the licensing of hydroelectric projects to determine 
how to reduce the cost and time of obtaining a license. The Commission 
shall report its findings within six months of the date of enactment to 
the Congress, including any recommendations for legislative changes.

                     Subtitle B--Nuclear Resources

SEC. 410. NUCLEAR GENERATION.

    The Chairman of the Nuclear Regulatory Commission shall submit a 
report to the Congress within 6 months from the date of enactment of 
this Act on the state of nuclear power generation and production in the 
United States and the potential for increasing nuclear generating 
capacity and production as part of this nation's energy mix. The report 
shall also review the status of the relicensing process for civilian 
nuclear power plants, including current and anticipated applications, 
and recommendations for improvements in the process, including 
recommendations for expediting the process and ensuring that 
relicensing is accomplished in a timely manner.

SEC. 411. NRC HEARING PROCEDURE.

    Section 189(a)(1) of the Atomic Energy Act of 1954 (42 U.S.C. 
2239(a)(1)) is amended by adding at the end the following--
    ``(C) A hearing under this section shall be conducted using 
informal adjudicatory procedures established under sections 553 and 555 
of title 5, United States Code, unless the Commission determines that 
formal adjudicatory procedures are necessary--
            ``(i) to develop a sufficient record; or
            ``(ii) to achieve fairness.''.

   Subtitle C--Development of a National Spent Nuclear Fuel Strategy

SEC. 415. FINDINGS.

    The Congress makes the following findings:
            (1) Prior to permanent closure of the geologic repository 
        in Yucca Mountain, Congress must determine whether the spent 
        fuel in the repository should be treated as waste subject to 
        permanent burial or should be considered an energy resource 
        that is needed to meet future energy requirements.
            (2) Future use of nuclear energy may require construction 
        of a second geologic repository unless Yucca Mountain can 
        safely accommodate additional spent fuel. Improved spent fuel 
        strategies may increase the capacity of Yucca Mountain.
            (3) Prior to construction of any second permanent geologic 
        repository, the nation's current plans for permanent burial of 
        spent fuel should be reevaluated.

SEC. 416. OFFICE OF SPENT NUCLEAR FUEL RESEARCH.

    (a) Establishment.--There is established an Office of Spent Nuclear 
Fuel Research (referred to as the ``Office'' in this section) within 
the Office of Nuclear Energy Science and Technology of the Department 
of Energy. The Office shall be headed by the Associate Director of the 
Office of Nuclear Energy Science and Technology, who shall be a member 
of the Senior Executive Service appointed by the Director of the Office 
of Nuclear Energy Science and Technology and compensated at a rate 
determined by applicable law.
    (b) Associate Director.--The Associate Director of the Office of 
Spent Nuclear Fuel Research shall be responsible for carrying out an 
integrated research, development, and demonstration program on 
technologies for treatment, recycling, and disposal of high-level 
nuclear radioactive waste and spent nuclear fuel, subject to the 
general supervision of the Secretary of Energy. The Associate Director 
of the Office shall report to the Director of the Office of Nuclear 
Energy Science and Technology. The first such Associate Director shall 
be appointed within 90 days of the date of enactment of this Act.
    (c) Grant and Contract Authority.--In carrying out the Secretary's 
responsibilities under this section, the Secretary may make grants or 
enter into contracts for the purposes of the research projects and 
activities described in subsection (d)(2).
    (d)(1) Duties.--The Associate Director of the Office shall involve 
national laboratories, universities, the commercial nuclear industry, 
and other organizations to investigate technologies for the treatment, 
recycling, and disposal of spent nuclear fuel and high-level 
radioactive waste.
    (2) The Associate Director of the Office shall:
            (A) develop a research plan to provide recommendations by 
        2015 for the treatment, recycling, and disposal of spent 
        nuclear fuel and high-level radioactive waste;
            (B) identify technologies for the treatment, recycling, and 
        disposal of spent nuclear fuel and high-level radioactive 
        waste;
            (C) conduct research and development activities on such 
        technologies;
            (D) ensure that all activities include as key objectives 
        minimization of proliferation concerns and risk to health of 
        the general public or site workers, as well as development of 
        cost-effective technologies;
            (E) require research on both reactor- and accelerator-based 
        transmutation systems;
            (F) require research on advanced processing and 
        separations;
            (G) encourage that research efforts include participation 
        of international collaborators;
            (H) be authorized to fund international collaborators when 
        they bring unique capabilities not available in the United 
        States and their host country is unable to provide for their 
        support;
            (I) ensure that research efforts with the Office are 
        coordinated with research on advance fuel cycles and reactors 
        conducted within the Office of Nuclear Energy Science and 
        Technology.
    (e) Report.--The Associate Director of the Office of Spent Nuclear 
Fuel Research shall annually prepare and submit a report to the 
Congress on the activities and expenditures of the Office, including 
the process that has been made to achieve the objectives of subsection 
(d)(2).

                       Subtitle D--Coal Resources

SEC. 420. COAL GENERATING CAPACITY.

    The Secretary of Energy shall examine existing coal-fired power 
plants and submit a report to the Congress within six months from the 
enactment of this Act on the potential of such plants for increased 
generation and any impediments to achieving such increase. The report 
shall describe, in detail, options for improving the efficiency of 
these plants. The report shall include recommendations for a program of 
research, development, demonstration, and commercial application to 
develop economically and environmentally acceptable advanced 
technologies for current electricity generation facilities using coal 
as the primary feedstock, including commercial-scale applications of 
advanced clean coal technologies. The report shall also include an 
assessment of the costs to develop and demonstrate such technologies 
and the time required to undertake such development and demonstration.

SEC. 425. COAL LIQUEFACTION.

    The Secretary of Energy shall provide grants for the refinement and 
demonstration of new technologies for the conversion of coal to 
liquids. Such grants shall be for the design and construction of an 
indirect liquefaction plant capable of production in commercial 
quantities. There are authorized to be appropriated for the purpose of 
this section such sums as may be necessary through fiscal year 2004 
facilities be sited or modified so as to avoid unnecessary duplication 
of roads and pipelines. The regulations issued as required by section 
504 of this title shall include provisions granting rights-of-way and 
easements across the Coastal Plain.

     TITLE V--IMPROVEMENTS TO FEDERAL OIL AND GAS LEASE MANAGEMENT

SEC. 501. TITLE.

    This title may be cited as the ``Federal Oil and Gas Lease 
Management Improvement Act of 2000''.

SEC. 502. DEFINITIONS.

    In this title--
            (1) Application for a permit to drill.--The term 
        ``application for a permit to drill'' means a drilling plan 
        including design, mechanical, and engineering aspects for 
        drilling a well.
            (2) Federal land.--
                    (A) In general.--The term ``Federal land'' means 
                all land and interests in land owned by the United 
                States that are subject to the mineral leasing laws, 
                including mineral resources or mineral estates reserved 
                to the United States in the conveyance of a surface or 
                nonmineral estate.
                    (B) Exclusion.--The term ``Federal land'' does not 
                include--
                            (i) Indian land (as defined in section 3 of 
                        the Federal Oil and Gas Royalty Management Act 
                        of 1982 (30 U.S.C. 1702)); or
                            (ii) submerged land on the outer 
                        Continental Shelf (as defined in section 2 of 
                        the Outer Continental Shelf Lands Act (43 
                        U.S.C. 1331)).
            (3) Oil and gas conservation authority.--The term ``oil and 
        gas conservation authority'' means the agency or agencies in 
        each State responsible for regulating for conservation purposes 
        operations to explore for and produce oil and natural gas.
            (4) Project.--The term ``project'' means an activity by a 
        lessee, an operator, or an operating rights owner to explore 
        for, develop, produce, or transport oil or gas resources.
            (5) Secretary.--The term ``Secretary'' means--
                    (A) the Secretary of the Interior, with respect to 
                land under the administrative jurisdiction of the 
                Department of the Interior; and
                    (B) the Secretary of Agriculture, with respect to 
                land under the administrative jurisdiction of the 
                Department of Agriculture.
            (6) Surface use plan of operations.--The term ``surface use 
        plan of operations'' means a plan for surface use, disturbance, 
        and reclamation.

SEC. 503. NO PROPERTY RIGHT.

    Nothing in this title gives a State a property right or interest in 
any Federal lease or land.

 Subtitle A--State Option To Regulate Oil and Gas Lease Operations on 
                              Federal Land

SEC. 510. TRANSFER OF AUTHORITY.

    (a) Notification.--On or after the date that is 180 days after the 
date of enactment of this Act, a State may notify the Secretary of its 
intent to accept authority for regulation of operations, as described 
in subparagraphs (A) through (K) of subsection (b)(2), under oil and 
gas leases on Federal land within the State.
    (b) Transfer of Authority.--
            (1) In general.--Effective 180 days after the Secretary 
        receives the State's notice, authority for the regulation of 
oil and gas leasing operations is transferred from the Secretary to the 
State.
            (2) Authority included.--The authority transferred under 
        paragraph (1) includes--
                    (A) processing and approving applications for 
                permits to drill, subject to surface use agreements and 
                other terms and conditions determined by the Secretary;
                    (B) production operations;
                    (C) well testing;
                    (D) well completion;
                    (E) well spacing;
                    (F) communization;
                    (G) conversion of a producing well to a water well;
                    (H) well abandonment procedures;
                    (I) inspections;
                    (J) enforcement activities; and
                    (K) site security.
    (c) Retained Authority.--The Secretary shall--
            (1) retain authority over the issuance of leases and the 
        approval of surface use plans of operations and project-level 
        environmental analyses; and
            (2) spend appropriated funds to ensure that timely 
        decisions are made respecting oil and gas leasing, taking into 
        consideration multiple uses of Federal land, socioeconomic and 
        environmental impacts, and the results of consultations with 
        State and local government officials.

SEC. 511. ACTIVITY FOLLOWING TRANSFER OF AUTHORITY.

    (a) Federal Agencies.--Following the transfer of authority, no 
Federal agency shall exercise the authority formerly held by the 
Secretary as to oil and gas lease operations and related operations on 
Federal land.
    (b) State Authority.--
            (1) In general.--Following the transfer of authority, each 
        State shall enforce its own oil and gas conservation laws and 
        requirements pertaining to transferred oil and gas lease 
        operations and related operations with due regard to the 
        national interest in the expedited, environmentally sound 
        development of oil and gas resources in a manner consistent 
        with oil and gas conservation principles.
            (2) Appeals.--Following a transfer of authority under 
        section 510, an appeal of any decision made by a State oil and 
        gas conservation authority shall be made in accordance with 
        State administrative procedures.
    (c) Pending Enforcement Actions.--The Secretary may continue to 
enforce any pending actions respecting acts committed before the date 
on which authority is transferred to a State under section 510 until 
those proceedings are concluded.
    (d) Pending Applications.--
            (1) Transfer to state.--All applications respecting oil and 
        gas lease operations and related operations on Federal land 
        pending before the Secretary on the date on which authority is 
        transferred under section 510 shall be immediately transferred 
        to the oil and gas conservation authority of the State in which 
        the lease is located.
            (2) Action by the state.--The oil and gas conservation 
        authority shall act on the application in accordance with State 
        laws (including regulations) and requirements.

         Subtitle B--Use of Cost Savings From State Regulation

SEC. 521. COMPENSATION FOR COSTS.

    (a) In General.--Subject to the availability of appropriations, the 
Secretary shall compensate any State for costs incurred to carry out 
the authorities transferred under section 510.
    (b) Payment Schedule.--Payments shall be made not less frequently 
than every quarter.
    (c) Cost Breakdown Report.--Each State seeking compensation shall 
report to the Secretary a cost breakdown for the authorities 
transferred.
    (d) Limitation on Amount.--
            (1) In general.--Compensation to a State may not exceed 50 
        percent of the Secretary's allocated cost for oil and gas 
        leasing activities under section 35(b) of the Mineral Leasing 
        Act (30 U.S.C. 191(b)) for the State for fiscal year 1997.
            (2) Adjustment.--The Secretary shall adjust the maximum 
        level of cost compensation at least once every 2 years to 
        reflect any increases in the Consumer Price Index (all items, 
        United States city average) as prepared by the Department of 
        Labor, using 1997 as the baseline year.

SEC. 522. EXCLUSION OF COSTS OF PREPARING PLANNING DOCUMENTS AND 
              ANALYSES.

    Section 35 of the Mineral Leasing Act (30 U.S.C. 191(b)) is amended 
by adding at the end the following:
    ``(6) The Secretary shall not include, for the purpose of 
calculating the deduction under paragraph (1), costs of preparing 
resource management planning documents and analyses for areas in which 
mineral leasing is excluded or areas in which the primary activity 
under review is not mineral leasing and development.''.

SEC. 523. RECEIPT SHARING.

    Section 35(b)(1) of the Mineral Leasing Act (30 U.S.C. 191(b)(1)) 
is amended by striking ``paid to States'' and inserting ``paid to 
States (other than States that accept a transfer of authority under 
section 510 of the Federal Oil and Gas Lease Management Act of 2000)''.

              Subtitle C--Streamlining and Cost Reduction

SEC. 531. APPLICATIONS.

    (a) Limitation on Cost Recovery.--Notwithstanding sections 304 and 
504 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 
1734, 1764) and section 9701 of title 31, United State Code, the 
Secretary shall not recover the Secretary's costs with respect to 
applications and other documents relating to oil and gas leases.
    (b) Completion of Planning Documents and Analyses.--
            (1) In general.--The Secretary shall complete any resource 
        management planning documents and analyses not later than 90 
        days after receiving any offer, application, or request for 
        which a planning document or analysis is required to be 
        prepared.
            (2) Preparation by applicant or lessee.--If the Secretary 
        is unable to complete the document or analysis within the time 
        prescribed by paragraph (1), the Secretary shall notify the 
applicant or lessee of the opportunity to prepare the required document 
or analysis for the agency's review and use in decisionmaking.
    (c) Reimbursement for Costs of NEPA Analyses, Documentation, and 
Studies.--If--
            (1) adequate funding to enable the Secretary to timely 
        prepare a project-level analysis required under the National 
        Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) with 
        respect to an oil or gas lease is not appropriated; and
            (2) the lessee, operator, or operating rights owner 
        voluntarily pays for the cost of the required analysis, 
        documentation, or related study;
the Secretary shall reimburse the lessee, operator, or operating rights 
owner for its costs through royalty credits attributable to the lease, 
unit agreement, or project area.

SEC. 532. TIMELY ISSUANCE OF DECISIONS.

    (a) In General.--The Secretary shall ensure the timely issuance of 
Federal agency decisions respecting oil and gas leasing and operations 
on Federal land.
    (b) Offer To Lease.--
            (1) Deadline.--The Secretary shall accept or reject an 
        offer to lease not later than 90 days after the filing of the 
        offer.
            (2) Failure to meet deadline.--If an offer is not acted 
        upon within that time, the offer is deemed to have been 
        accepted.
    (c) Application for Permit To Drill.--
            (1) Deadline.--The Secretary and a State that has accepted 
        a transfer of authority under section 510 shall approve or 
        disapprove an application for permit to drill not later than 30 
        days after receiving a complete application.
            (2) Failure to meet deadline.--If the application is not 
        acted on within the time prescribed by paragraph (1), the 
        application is deemed to have been approved.
    (d) Surface Use Plan of Operations.--The Secretary shall approve or 
disapprove a surface use plan of operations not later than 30 days 
after receipt of a complete plan.
    (e) Administrative Appeals.--
            (1) Deadline.--From the time that a Federal oil and gas 
        lessee or operator files a notice of administrative appeal of a 
        decision or order of an officer or employee of the Department 
        of the Interior or the Forest Service respecting a Federal oil 
        and gas Federal lease, the Secretary shall have 2 years in 
        which to issue a final decision in the appeal.
            (2) Failure to meet deadline.--If no final decision has 
        been issued within the time prescribed by paragraph (1), the 
        appeal is deemed to have been granted.

SEC. 533. ELIMINATION OF UNWARRANTED DENIALS AND STAYS.

     (a) In General.--The Secretary shall ensure that unwarranted 
denials and stays of lease issuance and unwarranted restrictions on 
lease operations are eliminated from the administration of oil and gas 
leasing on Federal land.
    (b) Land Designated for Multiple Use.--
            (1) In general.--Land designated as available for multiple 
        use under Bureau of Land Management resource management plans 
        and Forest Service leasing analyses shall be available for oil 
        and gas leasing without lease stipulations more stringent than 
        restrictions on surface use and operations imposed under the 
        laws (including regulations) of the State in which the lands 
        are located unless the Secretary includes in the decision 
        approving the management plan or leasing analysis a written 
        explanation why more stringent stipulations are warranted.
            (2) Appeal.--Any decision to require a more stringent 
        stipulation shall be administratively appealable and, following 
        a final agency decision, shall be subject to judicial review.
    (c) Rejection of Offer To Lease.--
            (1) In general.--If the Secretary rejects an offer to lease 
        on the ground that the land is unavailable for leasing, the 
        Secretary shall provide a written, detailed explanation of the 
        reasons the land is unavailable for leasing.
            (2) Previous resource management decision.--If the 
        determination of unavailability is based on a previous resource 
        management decision, the explanation shall include a careful 
        assessment of whether the reasons underlying the previous 
        decision are still persuasive.
            (3) Segregation of available land from unavailable land.--
        The Secretary may not reject an offer to lease land available 
        for leasing on the ground that the offer includes land 
        unavailable for leasing, and the Secretary shall segregate 
available land from unavailable land, on the offeror's request 
following notice by the Secretary, before acting on the offer to lease.
    (d) Disapproval or Required Modification of Surface Use Plans of 
Operations and Application for Permit To Drill.--The Secretary shall 
provide a written, detailed explanation of the reasons for disapproving 
or requiring modifications of any surface use plan of operations or 
application for permit to drill.
    (e) Effectiveness of Decision.--A decision of the Secretary 
respecting an oil and gas lease shall be effective pending 
administrative appeal to the appropriate office within the Department 
of the Interior or the Department of Agriculture unless that office 
grants a stay in response to a petition satisfying the criteria for a 
stay established by section 4.21(b) of title 43, Code of Federal 
Regulations (or any successor regulation).

SEC. 534. REPORTS.

    (a) In General.--Not later than March 31, 2001, the Secretaries 
shall jointly submit to the Congress a report explaining the most 
efficient means of eliminating overlapping jurisdiction, duplication of 
effort, and inconsistent policymaking and policy implementation as 
between the Bureau of Land Management and the Forest Service.
    (b) Recommendations.--The report shall include recommendations on 
statutory changes needed to implement the report's conclusions.

SEC. 535. SCIENTIFIC INVENTORY OF OIL AND GAS RESERVES.

    (a) In General.--Not later than March 31, 2001, the Secretary of 
the Interior, in consultation with the Director of the United States 
Geological Survey, shall publish, through notice in the Federal 
Register, a science-based national inventory of the oil and gas 
reserves and potential resources underlying Federal land and the Outer 
Continental Shelf.
    (b) Contents.--The inventory shall--
            (1) indicate what percentage of the oil and gas reserves 
        and resources is currently available for leasing and 
        development;
            (2) specify the percentages of the reserves and resources 
        that are on--
                    (A) land that is open for leasing as of the date of 
                enactment of this Act that has never been leased;
                    (B) land that is open for leasing or development 
                subject to no surface occupancy stipulations; and
                    (C) land that is open for leasing or development 
                subject to other lease stipulations that have 
                significantly impeded or prevented, or are likely to 
                significantly impede or prevent, development; and
            (3) indicate the percentage of oil and gas resources that 
        are not available for leasing or are withdrawn from leasing.
    (c) Public Comment.--
            (1) In general.--The Secretary of the Interior shall invite 
        public comment on the inventory to be filed not later than 
        September 30, 2001.
            (2) Resource management decisions.--Specifically, the 
        Secretary of the Interior shall invite public comment on the 
        effect of Federal resource management decisions on past and 
        future oil and gas development.
    (d) Report.--
            (1) In general.--Not later than March 31, 2002, the 
        Secretary of the Interior shall submit to the President of the 
        Senate and the Speaker of the House of Representatives a report 
        comprised of the revised inventory and responses to the public 
        comments.
            (2) Contents.--The report shall specifically indicate what 
        steps the Secretaries believe are necessary to increase the 
        percentage of land open for development of oil and gas 
        resources.

                 Subtitle D--Federal Royalty Certainty

SEC. 541. DEFINITIONS.

    In this subtitle:
            (1) Marketable condition.--The term ``marketable 
        condition'' means lease production that is sufficiently free 
        from impurities and otherwise in a condition that the 
        production will be accepted by a purchaser under a sales 
        contract typical for the field or area.
            (2) Reasonable commercial rate.--
                    (A) In general.--The term ``reasonable commercial 
                rate'' means--
                            (i) in the case of an arm's-length 
                        contract, the actual cost incurred by the 
                        lessee; or
                            (ii) in the case of a non-arm's-length 
                        contract--
                                    (I) the rate charged in a contract 
                                for similar services in the same area 
                                between parties with opposing economic 
                                interests; or
                                    (II) if there are no arm's-length 
                                contracts for similar services in the 
                                same area, the just and reasonable rate 
                                for the transportation service rendered 
                                by the lessee or lessee's affiliate.
                    (B) Disputes.--Disputes between the Secretary and a 
                lessee over what constitutes a just and reasonable rate 
                for such service shall be resolved by the Federal 
                Energy Regulatory Commission.

SEC. 542. AMENDMENT OF OUTER CONTINENTAL SHELF LANDS ACT.

    Section 8(b)(3) of the Outer Continental Shelf Lands Act (43 U.S.C. 
1337(b)(3)) is amended by striking the semicolon at the end and 
inserting the following: ``: Provided, That if the payment is in value 
or amount, the royalty due in value shall be based on the value of oil 
or gas production at the lease in marketable condition, and the royalty 
due in amount shall be based on the royalty share of production at the 
lease; and if the payment in value or amount is calculated from a point 
away from the lease, the payment shall be adjusted for quality and 
location differentials, and the lessee shall be allowed reimbursements 
at a reasonable commercial rate for transportation (including 
transportation to the point where the production is put in marketable 
condition), marketing, processing, and other services beyond the lease 
through the point of sale, other disposition, or delivery;''.

SEC. 543. AMENDMENT OF MINERAL LEASING ACT.

    Section 17(c) of the Mineral Leasing Act (30 U.S.C. 226(c)) is 
amended by adding at the end the following:
            ``(3) Royalty due in value.--
                    ``(A) In general.--Royalty due in value shall be 
                based on the value of oil or gas production at the 
                lease in marketable condition, and the royalty due in 
                amount shall be based on the royalty share of 
                production at the lease.
                    ``(B) Calculation of value or amount from a point 
                away from a lease.--If the payment in value or amount 
                is calculated from a point away from the lease--
                            ``(i) the payment shall be adjusted for 
                        quality and location differentials; and
                            ``(ii) the lessee shall be allowed 
                        reimbursements at a reasonable commercial rate 
                        for transportation (including transportation to 
                        the point where the production is put in 
                        marketable condition), marketing, processing, 
                        and other services beyond the lease through the 
                        point of sale, other disposition, or 
                        delivery;''.

SEC. 544. INDIAN LAND.

    This subtitle shall not apply with respect to Indian land.

              Subtitle E--Royalty Reinvestment in America

SEC. 551. ROYALTY INCENTIVE PROGRAM.

    (a) In General.--To encourage exploration and development 
expenditures on Federal land and the Outer Continental Shelf for the 
development of oil and gas resources when the cash price of West Texas 
Intermediate crude oil, as posted on the Dow Jones Commodities Index 
chart, is less than $18 per barrel for 90 consecutive pricing days or 
when natural gas prices as delivered at Henry Hub, Louisiana, are less 
than $2.30 per million British thermal units for 90 consecutive days, 
the Secretary shall allow a credit against the payment of royalties on 
Federal oil production and gas production, respectively, in an amount 
equal to 20 percent of the capital expenditures made on exploration and 
development activities on Federal oil and gas leases.
    (b) No Crediting Against Onshore Federal Royalty Obligations.--In 
no case shall such capital expenditures made on Outer Continental Shelf 
leases be credited against onshore Federal royalty obligations.

SEC. 552. MARGINAL WELL PRODUCTION INCENTIVES.

    To enhance the economics of marginal oil and gas production by 
increasing the ultimate recovery from marginal wells when the cash 
price of West Texas Intermediate crude oil, as posted on the Dow Jones 
Commodities Index chart, is less than $18 per barrel for 90 consecutive 
pricing days or when natural gas prices are delivered at Henry Hub, 
Louisiana, are less than $2.30 per million British thermal units for 90 
consecutive days, the Secretary shall reduce the royalty rate as 
production declines for--
            (1) onshore oil wells producing less than 30 barrels per 
        day;
            (2) onshore gas wells producing less than 120 million 
        British thermal units per day;
            (3) offshore oil wells producing less than 300 barrels of 
        oil per day; and
            (4) offshore gas wells producing less than 1,200 million 
        British thermal units per day.

SEC. 553. SUSPENSION OF PRODUCTION ON OIL AND GAS OPERATIONS.

    (a) In General.--Any person operating an oil well under a lease 
issued under the Mineral Leasing Act (30 U.S.C. 181 et seq.) or the 
Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.) may 
submit a notice to the Secretary of the Interior of suspension of 
operation and production at the well.
    (b) Production Quantities Not a Factor.--A notice under subsection 
(a) may be submitted without regard to per day production quantities at 
the well and without regard to the requirements of subsection (a) of 
section 3103.4-4 of title 43 of the Code of Federal Regulations (or any 
successor regulation), respecting the granting of such relief, 
except that the notice shall be submitted to an office in the 
Department of the Interior designated by the Secretary of the Interior.
    (c) Period of Relief.--On submission of a notice under subsection 
(a) for an oil well, the operator of the well may suspend operation and 
production at the well for a period beginning on the date of submission 
of the notice and ending on the later of--
            (1) the date that is 2 years after the date on which the 
        suspension of operation and production commences; or
            (2) the date on which the cash price of West Texas 
        Intermediate crude oil, as posted on the Dow Jones Commodities 
        Index chart, is greater than $15 per barrel for 90 consecutive 
        pricing days.

 TITLE VI--FRONTIER OIL AND GAS EXPLORATION AND DEVELOPMENT INCENTIVES

SEC. 601. TITLE.

    This title may be cited as the ``Frontier Exploration and 
Development Incentives Act of 2000''.

SEC. 602. AMENDMENTS TO THE OUTER CONTINENTAL SHELF LANDS ACT.

    (a) Cash Bonus Bid Fixed Share of Net Profits.--Section 8(a)(1)(D) 
of the Outer Continental Shelf Lands Act, (43 U.S.C. 1337(a)(1)(D)) is 
amended by striking ``area;'' and inserting ``area, except that for 
production in the Beaufort Sea and Chukchi Sea Planning Areas of Alaska 
the Secretary is authorized to set the net profit share at 16\2/3\ 
percent;''.
    (b) Section 8(a) of the Outer Continental Shelf Lands Act (43 
U.S.C. 1337(a)) is amended by adding at the end the following:
    ``(10)(A) After an oil and gas lease is granted pursuant to any of 
the bidding systems under paragraph (1), the Secretary shall reduce any 
future royalty or rental obligation of the lessee on any lease issued 
by the Secretary (and proposed by the lessee for such reduction) by an 
amount equal to--
            ``(i) 10 percent of the qualified costs of exploratory 
        wells drilled or geophysical work performed on any lease issued 
        by the Secretary, whichever is greater, pursuant to this Act in 
        the Beaufort Sea and Chukci Sea Planning Areas of Alaska; plus
            ``(ii) an additional 10 percent of the qualified costs of 
        any such exploratory wells that are located ten or more miles 
        from another well drilled for oil and gas.
    ``(B) For purposes of this paragraph:
            ``(i) The term `qualified costs' means the costs allocated 
        to the exploratory well or geophysical work in support of an 
        exploration program pursuant to section 263(j) the Internal 
        Revenue Code of 1986.
            ``(ii) The term `exploratory well' means either an 
        exploratory well as defined by the United States Securities and 
        Exchange Commission in section 2100.4-10(a)(10) of title 17, 
        Code of Federal Regulations, or a well three or more miles from 
        any oil or gas well or a pipeline that transports oil or gas to 
        a market or terminal.
            ``(iii) The term `geophysical work' means all geophysical 
        data gathering methods used in hydrocarbon exploration and 
        includes seismic, gravity, magnetic, and electromagnetic 
        measurements.
    ``(C) For purposes of this paragraph, all distances shall be 
measured in horizontal distance. If a measurement beginning or ending 
point is a well, the measurement point shall be the bottom hole 
location of that well.''.

   TITLE VII--TAX MEASURES TO ENHANCE DOMESTIC OIL AND GAS PRODUCTION

                 Subtitle A--Marginal Well Preservation

SEC. 701. SHORT TITLE; PURPOSE.

    (a) Short Title.--This subtitle may be cited as the ``Marginal Well 
Preservation Act of 2000''.
    (b) Purpose.--The purpose of section 702 is to prevent the 
abandonment of marginal oil and gas wells responsible for half of the 
domestic production of oil and gas in the United States and of section 
703 is to recognize that geological and geophysical expenditures and 
delay rentals are ordinary and necessary business expenses that should 
be deducted in the year the expense is incurred.

SEC. 702. TAX CREDIT FOR MARGINAL DOMESTIC OIL AND NATURAL GAS WELL 
              PRODUCTION.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business credits) is 
amended by adding at the end the following new section:

``SEC. 45D. CREDIT FOR PRODUCING OIL AND GAS FROM MARGINAL WELLS.

    ``(a) General Rule.--For purposes of section 38, the marginal well 
production credit for any taxable year is an amount equal to the 
product of--
            ``(1) the credit amount, and
            ``(2) the qualified crude oil production and the qualified 
        natural gas production which is attributable to the taxpayer.
    ``(b) Credit Amount.--For purposes of this section--
            ``(1) In general.--The credit amount is--
                    ``(A) $3 per barrel of qualified crude oil 
                production, and
                    ``(B) 50 cents per 1,000 cubic feet of qualified 
                natural gas production.
            ``(2) Reduction as oil and gas prices increase.--
                    ``(A) In general.--The $3 and 50 cents amounts 
                under paragraph (1) shall each be reduced (but not 
                below zero) by an amount which bears the same ratio to 
                such amount (determined without regard to this 
                paragraph) as--
                            ``(i) the excess (if any) of the applicable 
                        reference price over $14 ($1.56 for qualified 
                        natural gas production), bears to
                            ``(ii) $3 ($0.33 for qualified natural gas 
                        production).
                The applicable reference price for a taxable year is 
                the reference price for the calendar year preceding the 
                calendar year in which the taxable year begins.
                    ``(B) Inflation adjustment.--In the case of any 
                taxable year beginning in a calendar year after 2000, 
                each of the dollar amounts contained in subparagraph 
                (A) shall be increased to an amount equal to such 
                dollar amount multiplied by the inflation adjustment 
                factor for such calendar year (determined under section 
                43(b)(3)(B) by substituting `2000' for `1990').
                    ``(C) Reference price.--For purposes of this 
                paragraph, the term `reference price' means, with 
                respect to any calendar year--
                            ``(i) in the case of qualified crude oil 
                        production, the reference price determined 
                        under section 29(d)(2)(C), and
                            ``(ii) in the case of qualified natural gas 
                        production, the Secretary's estimate of the 
                        annual average wellhead price per 1,000 cubic 
                        feet for all domestic natural gas.
    ``(c) Qualified Crude Oil and Natural Gas Production.--For purposes 
of this section--
            ``(1) In general.--The terms `qualified crude oil 
        production' and `qualified natural gas production' mean 
        domestic crude oil or natural gas which is produced from a 
        marginal well.
            ``(2) Limitation on amount of production which may 
        qualify.--
                    ``(A) In general.--Crude oil or natural gas 
                produced during any taxable year from any well shall 
                not be treated as qualified crude oil production or 
                qualified natural gas production to the extent 
                production from the well during the taxable year 
                exceeds 1,095 barrels or barrel equivalents.
                    ``(B) Proportionate reductions.--
                            ``(i) Short taxable years.--In the case of 
                        a short taxable year, the limitations under 
                        this paragraph shall be proportionately reduced 
                        to reflect the ratio which the number of days 
                        in such taxable year bears to 365.
                            ``(ii) Wells not in production entire 
                        year.--In the case of a well which is not 
                        capable of production during each day of a 
                        taxable year, the limitations under this 
                        paragraph applicable to the well shall be 
                        proportionately reduced to reflect the ratio 
                        which the number of days of production bears to 
                        the total number of days in the taxable year.
            ``(3) Definitions.--
                    ``(A) Marginal well.--The term `marginal well' 
                means a domestic well--
                            ``(i) the production from which during the 
                        taxable year is treated as marginal production 
                        under section 613A(c)(6), or
                            ``(ii) which, during the taxable year--
                                    ``(I) has average daily production 
                                of not more than 25 barrel equivalents, 
                                and
                                    ``(II) produces water at a rate not 
                                less than 95 percent of total well 
                                effluent.
                    ``(B) Crude oil, etc.--The terms `crude oil', 
                `natural gas', `domestic', and `barrel' have the 
meanings given such terms by section 613A(e).
                    ``(C) Barrel equivalent.--The term `barrel 
                equivalent' means, with respect to natural gas, a 
                conversion ratio of 6,000 cubic feet of natural gas to 
                1 barrel of crude oil.
    ``(d) Other Rules.--
            ``(1) Production attributable to the taxpayer.--In the case 
        of a marginal well in which there is more than one owner of 
        operating interests in the well and the crude oil or natural 
        gas production exceeds the limitation under subsection (c)(2), 
        qualifying crude oil production or qualifying natural gas 
        production attributable to the taxpayer shall be determined on 
        the basis of the ratio which taxpayer's revenue interest in the 
        production bears to the aggregate to the revenue interests of 
        all operating interest owners in the production.
            ``(2) Operating interest required.--Any credit under this 
        section may be claimed only on production which is attributable 
        to the holder of an operating interest.
            ``(3) Production from nonconventional sources excluded.--In 
        the case of production from a marginal well which is eligible 
        for the credit allowed under section 29 for the taxable year, 
        no credit shall be allowable under this section unless the 
        taxpayer elects not to claim credit under section 29 with 
        respect to the well.''.
    (b) Credit Treated as Business Credit.--Section 38(b) of such Code 
is amended by striking ``plus'' at the end of paragraph (11), by 
striking the period at the end of paragraph (12) and inserting'', 
plus'', and by adding at the end of the following new paragraph:
            ``(13) the marginal oil and gas well production credit 
        determined under section 45D(a).''.
    (c) Credit Allowed Against Regular and Minimum Tax.--
            (1) In general.--Subsection (c) of section 38 of such Code 
        (relating to limitation based on amount of tax) is amended by 
        redesignating paragraph (3) as paragraph (4) and by inserting 
        after paragraph (2) the following new paragraph:
            ``(3) Special rules for marginal oil and gas well 
        production credit.--
                    ``(A) In general.--In the case of the marginal oil 
                and gas well production credit--
                            ``(i) this section and section 39 shall be 
                        applied separately with respect to the credit, 
                        and
                            ``(ii) in applying paragraph (1) to the 
                        credit--
                                    ``(I) subparagraphs (A) and (B) 
                                thereof shall not apply, and
                                    ``(II) the limitation under 
                                paragraph (1) (as modified by subclause 
                                (I)) shall be reduced by the credit 
                                allowed under subsection (a) for the 
                                taxable year (other than the marginal 
                                oil and gas well production credit).
                    ``(B) Marginal oil and gas well production 
                credit.--For purposes of this subsection, the term 
                `marginal oil and gas well production credit' means the 
                credit allowable under subsection (a) by reason of 
                section 45D(a).''.
            (2) Conforming amendment.--Subclause (II) of section 
        38(c)(2)(A)(ii) of such Code is amended by inserting ``or the 
        marginal oil and gas well production credit'' after 
        ``employment credit''.
    (d) Carryback.--Subsection (a) of section 39 of such Code (relating 
to carryback and carryforward of unused credits generally) is amended 
by adding at the end the following new paragraph:
            ``(3) 10-year carryback for marginal oil and gas well 
        production credit.--In the case of the marginal oil and gas 
        well production credit--
                    ``(A) this section shall be applied separately from 
                the business credit (other than the marginal oil and 
                gas well production credit),
                    ``(B) paragraph (1) shall be applied by 
                substituting `10 taxable year' for `1 taxable year' in 
                subparagraph (A) thereof, and
                    ``(C) paragraph (2) shall be applied--
                            ``(i) by substituting `31 taxable years' 
                        for `21 taxable years' in subparagraph (A) 
                        thereof, and
                            ``(ii) by substituting `30 taxable years' 
                        for `20 taxable years' in subparagraph (B) 
                        thereof.''.
    (e) Coordination With Section 29.--Section 29(a) of such Code is 
amended by striking ``There'' and inserting ``At the election of the 
taxpayer, there.''
    (f) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following item:

                              ``Sec. 45D. Credit for producing oil and 
                                        gas from marginal wells.''
    (g) Effective Date.--The amendments made by this section shall 
apply to production in taxable years beginning after December 31, 2000.

SEC. 703. ELECTION TO EXPENSE GEOLOGICAL AND GEOPHYSICAL EXPENDITURES 
              AND DELAY RENTAL PAYMENTS.

    (a) Geological and Geophysical Expenditures for Oil and Wells.--
            (1) In general.--Section 263 of the Internal Revenue Code 
        of 1986 (relating to capital expenditures) is amended by adding 
        at the end the following new subsection:
    ``(j) Geological and Geophysical Expenditures for Oil and Wells.--
Notwithstanding subsection (a), a taxpayer may elect to treat 
geological and geophysical expenses incurred in connection with the 
exploration for, or development of, oil or gas as expenses which are 
not chargeable to capital account. Any expenses so treated shall be 
allowed as a deduction in the taxable year in which paid or 
incurred.''.
            (2) Conforming amendment.--Section 263A(c)(3) of such Code 
        is amended by inserting ``263(j),'' after ``263(i),''.
            (3) Effective date.--
                    (A) In general.--The amendments made by this 
                subsection shall apply to expenses paid or incurred 
                after the date of the enactment of this Act.
                    (B) Transition rule.--In the case of any expenses 
                described in section 263(j) of the Internal Revenue 
                Code of 1986, as added by this subsection, which were 
                paid or incurred on or before the date of the enactment 
                of this Act, the taxpayer may elect, at such time and 
                in such manner as the Secretary of the Treasury may 
                prescribe, to amortize the suspended portion of such 
                expenses over the 36-month period beginning with the 
                month in which the date of the enactment of this Act 
                occurs. For purposes of this subparagraph, the 
                suspended portion of any expense is that portion of 
                such expense which, as of the first day of the 36-month 
                period, has not been included in the cost of a property 
                or otherwise deducted.
    (b) Delay Rental Payments for Domestic Oil and Gas Wells.--
            (1) In general.--Section 263 of such Code (relating to 
        capital expenditures), as amended by subsection (a)(1), is 
        amended by adding at the end the following new subsection:
    ``(k) Delay Rental Payments for Domestic Oil and Gas Wells.--
            ``(1) In general.--Notwithstanding subsection (a), a 
        taxpayer may elect to treat delay rental payments incurred in 
        connection with the development of oil or gas within the United 
        States (as defined in section 638) as payments which are not 
        chargeable to capital account. Any payments so treated shall be 
        allowed as a deduction in the taxable year in which paid or 
        incurred.
            ``(2) Delay rental payments.--For purposes of paragraph 
        (1), the term `delay rental payment' means an amount paid for 
        the privilege of deferring the drilling of an oil or gas well 
        under an oil or gas lease.''.
            (2) Conforming amendment.--Section 263A(c)(3) of such Code, 
        as amended by subsection (a)(2), is amended by inserting 
        ``263(k),'' after ``263(j),''.
            (3) Effective date.--
                    (A) In general.--The amendments made by this 
                subsection shall apply to payments made or incurred 
                after the date of the enactment of this Act.
                    (B) Transition rule.--In the case of any payments 
                described in section 263(k) of the Internal Revenue 
                Code of 1986, as added by this subsection, which were 
                made or incurred on or before the date of the enactment 
                of this Act, the taxpayer may elect, at such time and 
                in such manner as the Secretary of the Treasury may 
                prescribe, to amortize the suspended portion of such 
                payments over the 36-month period beginning with the 
                month in which the date of the enactment of this Act 
                occurs. For purposes of this subparagraph, the 
                suspended portion of any payment is that portion of 
                such payment which, as of the first day of the 36-month 
                period, has not been included in the cost of a property 
                or otherwise deducted.

             Subtitle B--Independent Oil and Gas Producers

SEC. 711. 5-YEAR NET OPERATING LOSS CARRYBACK FOR LOSSES ATTRIBUTABLE 
              TO OPERATING MINERAL INTERESTS OF INDEPENDENT OIL AND GAS 
              PRODUCERS.

    (a) In General.--Paragraph (1) of section 172(b) of the Internal 
Revenue Code of 1986 (relating to years to which loss may be carried) 
is amended by adding at the end the following new subparagraph:
                    ``(H) Losses on operating mineral interests of 
                independent oil and gas producers.--In the case of a 
                taxpayer--
                            ``(i) which has an eligible oil and gas 
                        loss (as defined in subsection (j)) for a 
                        taxable year, and
                            ``(ii) which is not an integrated oil 
                        company (as defined in section 291(b)(4)), such 
                        eligible oil and gas loss shall be a net 
                        operating loss carryback to each of the 5 
                        taxable years preceding the taxable year of 
                        such loss.''.
    (b) Eligible Oil and Gas Loss.--Section 172 of such Code is amended 
by redesignating subsection (j) as subsection (k) and by inserting 
after subsection (i) the following new subsection--
    ``(j) Eligible Oil and Gas Loss.--For purposes of this section--
            ``(1) In general.--The term `eligible oil and gas loss' 
        means the lesser of--
                    ``(A) the amount which would be the net operating 
                loss for the taxable year if only income and deductions 
                attributable to operating mineral interests (as defined 
                in section 614(d)) in oil and gas wells are taken into 
                account, or
                    ``(B) the amount of the net operating loss for such 
                taxable year.
            ``(2) Coordination with subsection (b)(2).--For purposes of 
        applying subsection (b)(2), an eligible oil and gas loss for 
        any taxable year shall be treated in a manner similar to the 
        manner in which a specified liability loss is treated.
            ``(3) Election.--Any taxpayer entitled to a 5-year 
        carryback under subsection (b)(1)(H) from any loss year may 
        elect to have the carryback period with respect to such loss 
        year determined without regard to subsection (b)(1)(H).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to net operating losses for taxable years beginning after 
December 31, 1999.

SEC. 712. TEMPORARY SUSPENSION OF LIMITATION BASED ON 65 PERCENT OF 
              TAXABLE INCOME AND EXTENSION OF SUSPENSION OF TAXABLE 
              INCOME LIMIT WITH RESPECT TO MARGINAL PRODUCTION.

    (a) Limitation Based on 65 Percent of Taxable Income.--Subsection 
(d) of section 613A of the Internal Revenue Code of 1986 (relating to 
limitation on percentage depletion in case of oil and gas wells) is 
amended by adding at the end the following new paragraph:
            ``(6) Temporary suspension of taxable income limit.--
        Paragraph (1) shall not apply to taxable years beginning after 
        December 31, 1999, and before January 1, 2006, including with 
        respect to amounts carried under the second sentence of 
        paragraph (1) to such taxable years.''.
    (b) Extension of Suspension of Taxable Income Limit With Respect To 
Marginal Production.--Subparagraph (H) of section 613A(c)(6) of such 
Code (relating to temporary suspension of taxable income limit with 
respect to marginal production) is amended by striking ``2002'' and 
inserting ``2006''.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 1999.

                      Subtitle C--Other Provisions

SEC. 721. REPEAL OF REQUIREMENT OF CERTAIN APPROVED TERMINALS TO OFFER 
              DYED DIESEL FUEL AND KEROSENE FOR NONTAXABLE PURPOSES.

    Section 4101 of the Internal Revenue Code of 1986 (relating to 
certain approved terminals of registered persons required to offer dyed 
diesel fuel and kerosene for nontaxable purposes) is amended by 
striking subsection (e).

SEC. 722. CLARIFICATION OF QUALIFIED TERTIARY INJECTANT EXPENSES FOR 
              PURPOSES OF THE ENHANCED OIL RECOVERY CREDIT.

    (a) In General.--Subparagraph (C) of section 43(c)(1) of the 
Internal Revenue Code of 1986 (defining qualified enhanced oil recovery 
costs) is amended to read as follows:
                    ``(C) Any qualified tertiary injectant expenses (as 
                defined in section 193(b)(1)) which are paid or 
                incurred during the taxable year in connection with a 
                qualified enhanced oil recovery project.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred after the date of the enactment of this 
Act.

    TITLE VIII--TAX MEASURES TO ENHANCE THE USE OF RENEWABLE ENERGY 
SOURCES, IMPROVE ENERGY EFFICIENCIES, PROTECT CONSUMERS AND CONVERSION 
                         TO CLEAN BURNING FUELS

SEC. 801. CREDIT FOR ELECTRICITY PRODUCED FROM RENEWABLE RESOURCES.

    (a) Extension and Modification of Placed-In-Service Rules.--
Subparagraph (B) of section 45(c)(3) of the Internal Revenue Code of 
1986 is amended to read as follows:
                    ``(B) Biomass facilities.--In the case of a 
                facility using biomass to produce electricity, the term 
                `qualified facility' means, with respect to any month, 
                any facility owned, leased, or operated by the taxpayer 
                which is originally placed in service before July 1, 
                2005, if, for such month--
                            ``(i) biomass comprises not less than 75 
                        percent (on a Btu basis) of the average monthly 
                        fuel input of the facility for the taxable year 
                        which includes such month, or
                            ``(ii) in the case of a facility 
                        principally using coal to produce electricity, 
                        biomass comprises not more than 25 percent (on 
                        a Btu basis) of the average monthly fuel input 
                        of the facility for the taxable year which 
                        includes such month.''.
    (b) Special Rules.--Subsection (c) of section 45 of such Code is 
amended by adding at the end the following new paragraph:
            ``(5) Special rules.--
                    ``(A) 75 percent biomass input facility.--In the 
                case of a qualified facility described in paragraph 
                (3)(B)(i)--
                            ``(i) the 10-year period referred to in 
                        subsection (a) shall be treated as beginning no 
                        earlier than the date of the enactment of this 
                        paragraph, and
                            ``(ii) subsection (b)(3) shall not apply to 
                        any such facility originally placed in service 
                        before January 1, 1997.
                    ``(B) 25 percent biomass input facility.--In the 
                case of a qualified facility described in paragraph 
                (3)(B)(ii)--
                            ``(i) the 10-year period referred to in 
                        subsection (a) shall be treated as beginning no 
                        earlier than the date of the enactment of this 
                        paragraph, and
                            ``(ii) the amount of the credit determined 
                        under subsection (a) with respect to any 
                        project for any taxable year shall be adjusted 
                        by multiplying such amount (determined without 
                        regard to this clause) by 0.59.''.
    (c) Credit Not To Apply to Electricity Sold to Utilities Under 
Certain Contracts.--Section 45(b) of such Code (relating to limitations 
and adjustments) is amended by adding at the end the following:
            ``(4) Credit not to apply to electricity sold to utilities 
        under certain contracts.--
                    ``(A) In general.--The credit determined under 
                subsection (a) shall not apply to electricity--
                            ``(i) produced at a qualified facility 
                        placed in service by the taxpayer after June 
                        30, 1999, and
                            ``(ii) sold to a utility pursuant to a 
                        contract originally entered into before January 
                        1, 1987 (whether or not amended or restated 
                        after that date).
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                if--
                            ``(i) the prices for energy and capacity 
                        from such facility are established pursuant to 
                        an amendment to the contract referred to in 
                        subparagraph (A)(ii),
                            ``(ii) such amendment provides that the 
                        prices set forth in the contract which exceed 
                        avoided cost prices determined at the time of 
                        delivery shall apply only to annual quantities 
                        of electricity (prorated for partial years) 
                        which do not exceed the greater of--
                                    ``(I) the average annual quantity 
                                of electricity sold to the utility 
                                under the contract during calendar 
                                years 1994, 1995, 1996, 1997, and 1998, 
                                or
                                    ``(II) the estimate of the annual 
                                electricity production set forth in the 
                                contract, or, if there is no such 
                                estimate, the greatest annual quantity 
                                of electricity sold to the utility 
                                under the contract in any of the 
calendar years 1996, 1997, or 1998, and
                            ``(iii) such amendment provides that energy 
                        and capacity in excess of the limitation in 
                        clause (ii) may be--
                                    ``(I) sold to the utility only at 
                                prices that do not exceed avoided cost 
                                prices determined at the time of 
                                delivery, or
                                    ``(II) sold to a third party 
                                subject to a mutually agreed upon 
                                advance notice to the utility.
                For purposes of this subparagraph, avoided cost prices 
                shall be determined as provided for in section 
                292.304(d)(1) of title 18, Code of Federal Regulations, 
                or any successor regulation.''.
    (d) Qualified Facilities Include All Biomass Facilities.--
            (1) In general.--Subparagraph (B) of section 45(c)(1) of 
        such Code (defining qualified energy resources) is amended to 
        read as follows--
                    ``(B) biomass, and''.
            (2) Biomass defined.--Paragraph (2) of section 45(c) of 
        such Code (relating to definitions) is amended to read as 
        follows:
            ``(2) Biomass.--The term `biomass' means--
                    ``(A) any organic material from a plant which is 
                planted exclusively for purposes of being used at a 
                qualified facility to produce electricity, or
                    ``(B) any solid, nonhazardous, cellulosic waste 
                material which is segregated from other waste materials 
                and which is derived from--
                            ``(i) any of the following forest-related 
                        resources: mill residues, precommercial 
                        thinnings, slash, and brush, but not including 
                        old-growth timber or wood waste, or byproducts 
                        therefrom, used to produce electricity for a 
                        pulp and paper production facility,
                            ``(ii) poultry waste,
                            ``(iii) urban sources, including waste 
                        pallets, crates, and dunnage, manufacturing and 
                        construction wood wastes, and landscape or 
                        right-of-way tree trimmings, but not including 
                        unsegregated municipal solid waste (garbage) or 
                        paper that is commonly recycled, or
                            ``(iv) agriculture sources, including 
                        orchard tree crops, vineyard, grain, legumes, 
                        sugar, and other crop by-products or 
                        residues.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to electricity produced after the date of the enactment of this 
Act.

SEC. 802. CERTAIN AMOUNTS RECEIVED BY ELECTRIC ENERGY, GAS, OR STEAM 
              UTILITIES EXCLUDED FROM GROSS INCOME AS CONTRIBUTIONS TO 
              CAPITAL.

    (a) In General.--Subsection (c) of section 118 of the Internal 
Revenue Code of 1986 (relating to special rules for water and sewerage 
disposal utilities) is amended--
            (1) in the heading, by striking, ``WATER AND SEWERAGE 
        DISPOSAL'' and inserting ``CERTAIN'',
            (2) in paragraph (1)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``water or'' and inserting ``electric energy, 
                gas (through a local distribution system or 
                transportation by pipeline), steam, water, or'' and
                    (B) in subparagraph (B), by striking ``water or'' 
                and inserting ``electric energy, gas, steam, water, 
                or'',
            (3) in paragraph (2)(A)(ii), by striking ``water or'' and 
        inserting ``electric energy, gas, steam, water, or'', and
            (4) in paragraph (3)--
                    (A) in subparagraph (A), by inserting ``such term 
                shall include amounts paid as customer connection fees 
                (including amounts paid to connect the customer's line 
                to an electric line, a gas main, a steam line, or a 
                main water or sewer line) and'' after ``except that'', 
                and
                    (B) in subparagraph (C), by striking ``water or'' 
                and inserting ``electric energy, gas, steam, water, 
                or''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to amounts received after the date of the enactment of this Act.

SEC. 803. EXTENSION OF CREDIT FOR ELECTRICITY PRODUCED FROM STEEL 
              COGENERATION.

    (a) Extension of Credit for Coke Production and Steel Manufacturing 
Facilities.--Section 45(c)(1) (defining qualified energy resources) is 
amended by striking ``and'' at the end of subparagraph (B), by striking 
the period at the end of subparagraph (C) and inserting ``, and'', and 
by adding at the end the following new subparagraph:
                    ``(D) steel cogeneration.''
    (b) Steel Cogeneration.--Section 45(c) of such Code is amended by 
adding at the end the following:
            ``(5) Steel cogeneration.--The term `steel cogeneration' 
        means the production of steam or other form of thermal energy 
        of at least 20 percent of total production and the production 
        of electricity or mechanical energy (or both) of at least 20 
        percent of total production (meaning production from all waste 
        sources in subparagraphs (A), (B), and (C) from the entire 
        facility that produces coke, iron ore, iron, or steel), 
        provided that the cogeneration meets any regulatory energy-
        efficiency standards established by the Secretary, and only to 
        the extent that such energy is produced from--
                    ``(A) gases or heat generated during the production 
                of coke,
                    ``(B) blast furnace gases or heat generated during 
                the production of iron ore or iron, or
                    ``(C) waste gases or heat generated from the 
                manufacture of steel that uses at least 20 percent 
                recycled material.''.
            (c) Modification of Placed in Service Rules for Steel 
        Cogeneration Facilities.--Section 45(c)(3) of such Code 
        (defining qualified facility) is amended by adding at the end 
        the following:
                    ``(D) Steel cogeneration facilities.--In the case 
                of a facility using steel cogeneration to produce 
                electricity, the term `qualified facility' means any 
                facility permitted to operate under the environmental 
                requirements of the Clean Air Act Amendments of 1990 
                which is owned by the taxpayer and originally placed in 
                service after December 31, 1999, and before January 1, 
                2005. Such a facility may be treated as originally 
                placed in service when such facility was last upgraded 
                to increase efficiency or generation capability. 
                However, no facility shall be allowed a credit for more 
                than 10 years of production.''.
    (d) Conforming Amendments.--
            (1) The heading for section 45 of such Code is amended by 
        inserting ``and waste energy'' after ``renewable''.
            (2) The item relating to section 45 in the table of 
        sections subpart D of part IV of subchapter A of chapter 1 of 
        such Code is amended by inserting ``and waste energy'' after 
        ``renewable''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001, and before 
January 1, 2005.

SEC. 804. FULL EXPENSING OF HOME HEATING OIL STORAGE FACILITIES.

    (a) In General.--Section 179(b) of the Internal Revenue Code of 
1986 (relating to limitations) is amended by adding at the end of the 
following:
            ``(5) Full expensing of home heating oil storage 
        facilities.--Paragraphs (1) and (2) shall not apply to section 
        179 property which is any storage facility (not including a 
        building or its structural components) used in connection with 
        the distribution of home heating oil.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service in taxable years beginning after the date 
of the enactment of this Act.

SEC. 805. RESIDENTIAL SOLAR ENERGY TAX CREDIT.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to nonrefundable 
personal credits) is amended by inserting after section 25A the 
following new section:

``SEC. 25B. RESIDENTIAL SOLAR 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) 15 percent of the qualified photovoltaic property 
        expenditures made by the taxpayer during such year, and
            ``(2) 15 percent of the qualified solar water heating 
        property expenditures made by the taxpayer during the taxable 
        year.
    ``(b) Limitations.--
            ``(1) Maximum credit.--The credit allowed under subsection 
        (a)(2) shall not exceed $2,000 for each system of solar energy 
        property.
            ``(2) Type of property.--No expenditure may be taken into 
        account under this section unless such expenditure is made by 
        the taxpayer for property installed on or in connection with a 
        dwelling unit which is located in the United States and which 
        is used as a residence.
            ``(3) Safety certifications.--No credit shall be allowed 
        under this section for an item of property unless--
                    ``(A) in the case of solar water heating equipment, 
                such equipment is certified for performance and safety 
                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, and
                    ``(B) in the case of a photovoltaic system, such 
                system meets appropriate fire and electric code 
                requirements.
    ``(c) 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 that uses solar energy to 
        heat water for use in a dwelling unit with respect to which a 
        majority of the energy is derived from the sun.
            ``(2) Qualified photovoltaic property expenditure.--The 
        term `qualified photovoltaic property expenditure' means an 
        expenditure for property that uses solar energy to generate 
        electricity for use in a dwelling unit.
            ``(3) 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) solely because it constitutes a structural 
        component of the structure on which it is installed.
            ``(4) Labor costs.--Expenditures for labor costs properly 
        allocable to the onsite preparation, assembly, or original 
        installation of the property described in paragraph (1) or (2) 
        and for piping or wiring to interconnect such property to the 
        dwelling unit shall be taken into account for purposes of this 
        section.
            ``(5) 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.
    ``(d) Special Rules.--For purposes of this section--
            ``(1) 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 2 or more 
        individuals the following 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 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.
            ``(2) 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.
            ``(3) 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 he owns, such 
                individual shall be treated as having made his 
                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.
            ``(4) Joint ownership of items of solar energy property.--
                    ``(A) In general.--Any expenditure otherwise 
                qualifying as an expenditure described in paragraph (1) 
                or (2) of subsection (c) shall not be treated as 
                failing to so qualify merely because such expenditure 
                was made with respect to 2 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.
            ``(5) Allocation in certain cases.--If less than 80 percent 
        of the use of an item is for nonbusiness residential purposes, 
        only that portion of the expenditures for such item which is 
        properly allocable to use for nonbusiness residential purposes 
        shall be taken into account. For purposes of this paragraph, 
        use for a swimming pool shall be treated as use which is not 
        for residential purposes.
            ``(6) 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.
                    ``(C) Amount.--The amount of an expenditure shall 
                be the cost thereof.
    ``(e) 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.''.
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 1016 of such Code is amended 
        by striking `and' at the end of paragraph (26), by striking the 
        period at the end of paragraph (27) and inserting ``; and'', 
        and by adding at the end the following new paragraph:
            ``(28) to the extent provided in section 25B(e), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25B.''.
            (2) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 25A the following new item:

                              ``Sec. 25B. Residential solar energy 
                                        property.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 1999 and before 
December 31, 2004.

SEC. 806. CREDIT FOR CERTAIN FUEL CELL AND COMBINED HEAT AND POWER 
              SYSTEM PROPERTY USED IN BUSINESS.

    (a) Energy Percentage.--Paragraph (2) of section 48(a) of the 
Internal Revenue Code of 1986 (relating to energy percentage for energy 
credit) is amended by redesignating subparagraph (B) as subparagraph 
(D) and by inserting after subparagraph (A) the following new 
subparagraphs:
                    ``(B) Qualified fuel cell property.--The energy 
                percentage shall be 20 percent in the case of qualified 
                fuel cell property.
                    ``(C) Combined heat and power system property.--The 
                energy percentage shall be 8 percent in the case of 
                combined heat and power system property.''.
    (b) Energy Property Defined.--Subsection (a) of section 48 of such 
Code (relating to the energy credit) is amended by adding at the end 
the following new paragraphs:
            ``(6) Qualified fuel cell property.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `energy property' shall 
                include qualified fuel cell property.
                    ``(B) Qualified fuel cell property.--The term 
                `qualified fuel cell property' means a fuel cell that--
                            ``(i) generates electricity and heat using 
                        an electrochemical process,
                            ``(ii) has an electricity-only generation 
                        efficiency greater than 35 percent, and
                            ``(iii) has a minimum generating capacity 
                        of 1 kilowatts.
            ``(7) Combined heat and power system property.--For 
        purposes of this subsection--
                    ``(A) In general.--The term `energy property' shall 
                include combined heat and power system property.
                    ``(B) Combined heat and power system property.--The 
                term `combined heat and power system property' means 
                property comprising a system--
                            ``(i) which uses the same energy source for 
                        the simultaneous or sequential generation of 
                        electrical power, mechanical shaft power, or 
                        both, in combination with the generation of 
                        steam or other forms of useful thermal energy 
                        (including heating and cooling applications),
                            ``(ii) which has an electrical capacity of 
                        more than 50 kilowatts or a mechanical energy 
                        capacity of more than 67 horsepower or an 
                        equivalent combination of electrical and 
                        mechanical energy capacities,
                            ``(iii) which produces--
                                    ``(I) at least 20 percent of its 
                                total useful energy in the form of 
                                thermal energy, and
                                    ``(II) at least 20 percent of its 
                                total useful energy in the form of 
                                electrical or mechanical power (or a 
                                combination thereof), and
                            ``(iv) the energy efficiency percentage of 
                        which exceeds 60 percent (70 percent in the 
                        case of a system with an electrical capacity in 
                        excess of 50 megawatts or a mechanical energy 
                        capacity in excess of 67,000 horsepower, or an 
                        equivalent combination of electrical and 
                        mechanical energy capacities).
                    ``(C) Special rules.--
                            ``(i) Energy efficiency percentage.--For 
                        purposes of subparagraph (B)(iv), the energy 
efficiency percentage of a system is the fraction--
                                    ``(I) the numerator of which is the 
                                total useful electrical, thermal, and 
                                mechanical power produced by the system 
                                at normal operating rates, and
                                    ``(II) the denominator of which is 
                                the lower heating value of the primary 
                                fuel source for the system.
                            ``(ii) Determinations made on btu basis.--
                        The energy efficiency percentage and the 
                        percentages under subparagraph (B)(iii) shall 
                        be determined on a Btu basis.
                            ``(iii) Input and output property not 
                        included.--The term `combined heat and power 
                        system property' does not include property used 
                        to transport the energy source to the facility 
                        or to distribute energy produced by the 
                        facility.
                            ``(iv) Public utility property.--
                                    ``(I) Accounting rule for public 
                                utility property.--In the case that 
                                combined heat and power system property 
                                is public utility property (as defined 
                                in section 46(f)(5) as in effect on the 
                                day before the date of the enactment of 
                                the Revenue Reconciliation Act of 
                                1990), the taxpayer may only claim the 
                                credit under this subsection if, with 
                                respect to such property, the taxpayer 
                                uses a normalization method of 
                                accounting.
                                    ``(II) Certain exception not to 
                                apply.--The matter in paragraph (3) 
                                which follows subparagraph (D) shall 
                                not apply to combined heat and power 
                                system property.
                            ``(v) Depreciation.--No credit shall be 
                        allowed for any combined heat and power system 
                        property unless the taxpayer elects to treat 
                        such property for purposes of section 168 as 
                        having a class life of not less than 22 
                        years.''.
    (c) No Carryback of Energy Credit Before Effective Date.--
Subsection (d) of section 39 of such Code is amended by adding at the 
end the following new paragraph:
            ``(9) No carryback of energy credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the portion of the energy credit 
        described in section 48(a)(6) or (7) may be carried back to a 
        taxable year ending before the date of the enactment of this 
        paragraph.''.
    (d) Depreciation.--
            (1) Subparagraph (C) of section 168(e)(3) of such Code is 
        amended by striking the period at the end of clause (ii) and 
        inserting ``, and'', and by inserting after clause (ii) the 
        following new clause:
                            ``(iii) any energy property (as defined in 
                        paragraphs (6) or (7) of section 48(a)) for 
                        which a credit is allowed under section 48 and 
                        which, but for this clause, would have a 
                        recovery period of less than 15 years.''.
            (2) The table contained in subparagraph (B) of section 
        168(g)(3) of such Code is amended by inserting after the item 
        relating to subparagraph (C)(i) the following:

                ``(C)(iii).....................................   10''.
    (d) Effective Date.--The amendments made by this section shall 
apply to periods after December 31, 2000, 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).

  TITLE IX--ARCTIC COASTAL PLAIN DOMESTIC ENERGY SECURITY ACT OF 2000

SEC. 901. SHORT TITLE

    This title may be cited as the ``Arctic Coastal Plain Domestic 
Energy Security Act of 2000''.

SEC. 902. DEFINITIONS.

    When used in this title the term--
            (1) ``Coastal Plain'' means that area identified as such in 
        the map entitled ``Arctic National Wildlife Refuge'', dated 
        August 1980, as referenced in section 1002(b) of the Alaska 
        National Interest Lands Conservation Act of 1980 (16 U.S.C. 
        3142(b)(1)) comprising approximately 1,549,000 acres; and
            (2) ``Secretary'', except as otherwise provided, means the 
        Secretary of the Interior or the Secretary's designee.

SEC. 903. LEASING PROGRAM FOR LANDS WITHIN THE COASTAL PLAIN.

    (a) Authorization.--The Congress hereby authorizes and directs the 
Secretary, acting through the Bureau of Land Management in consultation 
with the Fish and Wildlife Service and other appropriate Federal 
offices and agencies, to take such actions as are necessary to 
establish and implement a competitive oil and gas leasing program that 
will result in an environmentally sound program for the exploration, 
development, and production of the oil and gas resources of the Coastal 
Plain and to administer the provisions of this title through 
regulations, lease terms, conditions, restrictions, prohibitions, 
stipulations, and other provisions that ensure the oil and gas 
exploration, development, and production activities on the Coastal 
Plain will result in no significant adverse effect on fish and 
wildlife, their habitat, subsistence resources, and the environment, 
and shall require the application of the best commercially available 
technology for oil and gas exploration, development, and production, on 
all new exploration, development, and production operations, and 
whenever practicable, on existing operations, and in a manner to ensure 
the receipt of fair market value by the public for the mineral 
resources to be leased.
    (b) Repeal.--The prohibitions and limitations contained in section 
1003 of the Alaska National Interest Lands Conservation Act of 1980 (16 
U.S.C. 3143) are hereby repealed.
    (c) Compatibility.--Congress hereby determines that the oil and gas 
leasing program and activities authorized by this section in the 
Coastal Plain are compatible with the purposes for which the Arctic 
National Wildlife Refuge was established, and that no further findings 
or decisions are required to implement this determination.
    (d) Sole Authority.--This title shall be the sole authority for 
leasing on the Coastal Plain: Provided, That nothing in this title 
shall be deemed to expand or limit State and local regulatory 
authority.
    (e) Federal Land.--The Coastal Plain shall be considered ``Federal 
land'' for the purposes of the Federal Oil and Gas Royalty Management 
Act of 1982.
    (f) Special Areas.--The Secretary, after consultation with the 
State of Alaska, City of Kaktovik, and the North Slope Borough, is 
authorized to designate up to a total of 45,000 acres of the Coastal 
Plain as Special Areas and close such areas to leasing if the Secretary 
determines that these Special Areas are of such unique character and 
interest so as to require special management and regulatory protection. 
The Secretary may, however, permit leasing of all or portions of any 
Special Areas within the Coastal Plain by setting lease terms that 
limit or condition surface use and occupancy by lessees of such lands 
but permit the use of horizontal drilling technology from sites on 
leases located outside the designated Special Areas.
    (g) Limitation on Closed Areas.--The Secretary's sole authority to 
close lands within the Coastal Plain to oil and gas leasing and to 
exploration, development, and production is that set forth in this 
title.
    (h) Conveyance.--In order to maximize Federal revenues by removing 
clouds on title of lands and clarifying land ownership patterns within 
the Coastal Plain, the Secretary, notwithstanding the provisions of 
section 1302(h)(2) of the Alaska National Interest Lands Conservation 
Act (16 U.S.C. 3192(h)(2)), is authorized and directed to convey (1) to 
the Kaktovik Inupiat Corporation the surface estate of the lands 
described in paragraph 2 of the Public Land Order 6959, to the extent 
necessary to fulfill the Corporation's entitlement under section 12 of 
the Alaska Native Claims Settlement Act (43 U.S.C. 1611), and (2) to 
the Arctic Slope Regional Corporation the subsurface estate beneath 
such surface estate pursuant to the August 9, 1983, agreement between 
the Arctic Slope Regional Corporation and the United States of America.

SEC. 904. RULES AND REGULATIONS.

    (a) Promulgation.--The Secretary shall prescribe such rules and 
regulations as may be necessary to carry out the purposes and 
provisions of this title, including rules and regulations relating to 
protection of the fish and wildlife, their habitat, subsistence 
resources, and the environment of the Coastal Plain. Such rules and 
regulations shall be promulgated no later than fourteen months after 
the date of enactment of this title and shall, as of their effective 
date, apply to all operations conducted under a lease issued or 
maintained under the provisions of this title and all operations on the 
Coastal Plain related to the leasing, exploration, development, and 
production of oil and gas.
    (b) Revision of Regulations.--The Secretary shall periodically 
review and, if appropriate, revise the rules and regulations issued 
under subsection (a) of this section to reflect any significant 
biological, environmental, or engineering data which come to the 
Secretary's attention.

SEC. 905. ADEQUACY OF THE DEPARTMENT OF THE INTERIOR'S LEGISLATIVE 
              ENVIRONMENTAL IMPACT STATEMENT.

    The ``Final Legislative Environmental Impact Statement'' (April 
1987) on the Coastal Plain prepared pursuant to section 1002 of the 
Alaska National Interest Lands Conservation Act of 1980 (16 U.S.C. 
3142) and section 102(2)(C) of the National Environmental Policy Act of 
1969 (42 U.S.C. 4332(2)(C)) is hereby found by the Congress to be 
adequate to satisfy the legal and procedural requirements of the 
National Environmental Policy Act of 1969 with respect to actions 
authorized to be taken by the Secretary to develop and promulgate the 
regulations for the establishment of the leasing program authorized by 
this title, to conduct the first lease sale and any subsequent lease 
sale authorized by this title, and to grant rights-of-way and easements 
to carry out the purposes of this title.

SEC. 906. LEASE SALES.

    (a) Lease Sales.--Lands may be leased pursuant to the provisions of 
this title to any person qualified to obtain a lease for deposits of 
oil and gas under the Mineral Leasing Act, as amended (30 U.S.C. 181).
    (b) Procedures.--The Secretary shall, by regulation, establish 
procedures for--
            (1) receipt and consideration of sealed nominations for any 
        area in the Coastal Plain for inclusion in, or exclusion (as 
        provided in subsection (c)) from, a lease sale; and
            (2) public notice of and comment on designation of areas to 
        be included in, or excluded from, a lease sale.
    (c) Lease Sales on Coastal Plain.--The Secretary shall, by 
regulation, provide for lease sales of lands on the Coastal Plain. When 
lease sales are to be held, they shall occur after the nomination 
process provided for in subsection (b) of this section. For the first 
lease sale, the Secretary shall offer for lease those acres receiving 
the greatest number of nominations, but no less than two hundred 
thousand acres and no more than three hundred thousand acres shall be 
offered. If the total acreage nominated is less than two hundred 
thousand acres, the Secretary shall include in such sale any other 
acreage which he believes has the highest resource potential, but in no 
event shall more than three hundred thousand acres of the Coastal Plain 
be offered in such sale. With respect to subsequent lease sales, the 
Secretary shall offer for lease no less than two hundred thousand acres 
of the Coastal Plain. The initial lease sale shall be held within 
twenty months of the date of enactment of this title. The second lease 
sale shall be held no later than twenty-four months after the initial 
sale, with additional sales conducted no later than twelve months 
thereafter so long as sufficient interest in development exists to 
warrant, in the Secretary's judgment, the conduct of such sales.

SEC. 907. GRANT OF LEASES BY THE SECRETARY.

    (a) In General.--The Secretary is authorized to grant to the 
highest responsible qualified bidder by sealed competitive cash bonus 
bid any lands to be leased on the Coastal Plain upon payment by the 
lessee of such bonus as may be accepted by the Secretary and of such 
royalty as may be fixed in the lease, which shall be not less 
then 12\1/2\ per centum in amount or value of the production removed or 
sold from the lease.
    (b) Antitrust Review.--Following each notice of a proposed lease 
sale and before the acceptance of bids and the issuance of leases based 
on such bids, the Secretary shall allow the Attorney General, in 
consultation with the Federal Trade Commission, thirty days to perform 
an antitrust review of the results of such lease sale on the likely 
effects the issuance of such leases would have on competition and the 
Attorney General shall advise the Secretary with respect to such 
review, including any recommendation for the nonacceptance of any bid 
or the imposition of terms or conditions on any lease, as may be 
appropriate to prevent any situation inconsistent with the antitrust 
laws.
    (c) Subsequent Transfers.--No lease issued under this title may be 
sold, exchanged, assigned, sublet, or otherwise transferred except with 
the approval of the Secretary. Prior to any such approval the Secretary 
shall consult with, and give due consideration to the views of, the 
Attorney General.
    (d) Immunity.--Nothing in this title shall be deemed to convey to 
any person, association, corporation, or other business organization 
immunity from civil or criminal liability, or to create defenses to 
actions, under any antitrust law.
    (e) Definitions.--As used in this section, the term--
            (1) ``antitrust review'' shall be deemed an ``antitrust 
        investigation'' for the purposes of the Antitrust Civil Process 
        Act (15 U.S.C. 1311); and
            (2) ``antitrust laws'' means those Acts set forth in 
        section 1 of the Clayton Act (15 U.S.C. 12) as amended.

SEC. 908. LEASE TERMS AND CONDITIONS.

    An oil or gas lease issued pursuant to this title shall--
            (1) be for a tract consisting of a compact area not to 
        exceed five thousand seven hundred sixty acres, or nine 
        surveyed or protracted sections which shall be as compact in 
        form as possible;
            (2) be for an initial period of ten years and shall be 
        extended for so long thereafter as oil or gas is produced in 
        paying quantities from the lease or unit area to which the 
        lease is committed or for so long as drilling or reworking 
        operations, as approved by the Secretary, are conducted on the 
        lease or unit area;
            (3) require the payment of royalty as provided for in 
        section 907 of this title;
            (4) require that exploration activities pursuant to any 
        lease issued or maintained under this title shall be conducted 
        in accordance with an exploration plan or a revision of such 
        plan approved by the Secretary;
            (5) require that all development and production pursuant to 
        a lease issued or maintained pursuant to this title shall be 
        conducted in accordance with development and production plans 
        approved by the Secretary;
            (6) require posting of bond as required by section 909 of 
        this title;
            (7) provide that the Secretary may close, on a seasonal 
        basis, portions of the Coastal Plain to exploratory drilling 
        activities as necessary to protect caribou calving areas and 
        other species of fish and wildlife;
            (8) contain such provisions relating to rental and other 
        fees as the Secretary may prescribe at the time of offering the 
        area for lease;
            (9) provide that the Secretary may direct or assent to the 
        suspension of operations and production under any lease granted 
        under the terms of this title in the interest of conservation 
        of the resource or where there is no available system to 
        transport the resource. If such a suspension is directed or 
        assented to by the Secretary, any payment of rental prescribed 
        by such lease shall be suspended during such period of 
        suspension of operations and production, and the term of the 
        lease shall be extended by adding any such suspension period 
        thereto;
            (10) provide that whenever the owner of a nonproducing 
        lease fails to comply with any of the provisions of this Act, 
        or of any applicable provision of Federal or State 
        environmental law, or of the lease, or of any regulation issued 
        under this title, such lease may be canceled by the Secretary 
        if such default continues for more than thirty days after 
        mailing of notice by registered letter to the lease owner at 
        the lease owner's post office address of record;
            (11) provide that whenever the owner of any producing lease 
        fails to comply with any of the provisions of this title, or of 
        any applicable provision of Federal or State environmental law, 
        or of the lease, or of any regulation issued under this title, 
        such lease may be forfeited and canceled by any appropriate 
        proceeding brought by the Secretary in any United States 
        district court having jurisdiction under the provisions of this 
        title;
            (12) provide that cancellation of a lease under this title 
        shall in no way release the owner of the lease from the 
        obligation to provide for reclamation of the lease site;
            (13) allow the lessee, at the discretion of the Secretary, 
        to make written relinquishment of all rights under any lease 
        issued pursuant to this title. The Secretary shall accept such 
        relinquishment by the lessee of any lease issued under this 
        title where there has not been surface disturbance on the lands 
        covered by the lease;
            (14) provide that for the purpose of conserving the natural 
        resources of any oil or gas pool, field, or like area, or any 
        part thereof, and in order to avoid the unnecessary duplication 
        of facilities, to protect the environment of the Coastal Plain, 
        and to protect correlative rights, the Secretary shall require 
        that, to the greatest extent practicable, lessees unite with 
        each other in collectively adopting and operating under a 
        cooperative or unit plan of development for operation of such 
        pool, field, or like area, or any part thereof, and the 
        Secretary is also authorized and directed to enter into such 
        agreements as are necessary or appropriate for the protection 
of the United States against drainage;
            (15) require that the holder of a lease or leases on lands 
        within the Coastal Plain shall be fully responsible and liable 
        for the reclamation of lands within the Coastal Plain and any 
        other Federal lands adversely affected in connection with 
exploration, development, production or transportation activities on a 
lease within the Coastal Plain by the holder of a lease or as a result 
of activities conducted on the lease by any of the leaseholder's 
subcontractors or agents;
            (16) provide that the holder of a lease may not delegate or 
        convey, by contract of otherwise, the reclamation 
        responsibility and liability to another party without the 
        express written approval of the Secretary;
            (17) provide that the standard of reclamation for lands 
        required to be reclaimed under this title be, as nearly as 
        practicable, a condition capable of supporting the uses which 
        the lands were capable of supporting prior to any exploration, 
        development, or production activities, or upon application by 
        the lessee, to a higher or better use as approved by the 
        Secretary;
            (18) contain the terms and conditions relating to 
        protection of fish and wildlife, their habitat, and the 
        environment, as required by section 903(a) of this title;
            (19) provide that the holder of a lease, its agents, and 
        contractors use best efforts to provide a fair share, as 
        determined by the level of obligation previously agreed to in 
        the 1974 agreement implementing section 29 of the Federal 
        Agreement and Grant of Right of Way for the Operation of the 
        Trans-Alaska Pipeline, of employment and contracting for Alaska 
        Natives and Alaska Native Corporations from throughout the 
        State;
            (20) require project agreements to the extent feasible that 
        will ensure productivity and consistency recognizing a national 
        interest in both labor stability and the ability of 
        construction labor and management to meet the particular needs 
        and conditions of projects to be developed under leases issued 
        pursuant to this Act; and
            (21) contain such other provisions as the Secretary 
        determines necessary to ensure compliance with the provisions 
        of this title and the regulations issued under this title.

SEC. 909. BONDING REQUIREMENTS TO ENSURE FINANCIAL RESPONSIBILITY OF 
              LESSEE AND AVOID FEDERAL LIABILITY.

    (a) Requirement.--The Secretary shall, by rule or regulation, 
establish such standards as may be necessary to ensure that an adequate 
bond, surety, or other financial arrangement will be established prior 
to the commencement of surface disturbing activities on any lease, to 
ensure the complete and timely reclamation of the lease tract, and the 
restoration of any lands or surface waters adversely affected by lease 
operations after the abandonment or cessation of oil and gas operations 
on the lease. Such bond, surety, or financial arrangement is in 
addition to, and not in lieu, of any bond, surety, or financial 
arrangement required by any other regulatory authority or required by 
any other provision of law.
    (b) Amount.--The bond, surety, or financial arrangement shall be in 
an amount--
            (1) to be determined by the Secretary to provide for 
        reclamation of the lease site in accordance with an approved or 
        revised exploration or development and production plan; plus
            (2) set by the Secretary consistent with the type of 
        operations proposed, to provide the means for rapid and 
        effective cleanup, and to minimize damages resulting from an 
        oil spill, the escape of gas, refuse, domestic wastewater, 
        hazardous or toxic substances, or fire caused by oil and gas 
        activities.
    (c) Adjustment.--In the event that an approved exploration or 
development and production plan is revised, the Secretary may adjust 
the amount of the bond, surety, or other financial arrangement to 
conform to such modified plan.
    (d) Duration.--The responsibility and liability of the lessee and 
its surety under the bond, surety, or other financial arrangement shall 
continue until such time as the Secretary determines that there has 
been compliance with the terms and conditions of the lease and all 
applicable law.
    (e) Termination.--Within sixty days after determining that there 
has been compliance with the terms and conditions of the lease and all 
applicable laws, the Secretary, after consultation with affected 
Federal and State agencies, shall notify the lessee that the period of 
liability under the bond, surety, or other financial arrangement has 
been terminated.

SEC. 910. OIL AND GAS INFORMATION.

    (a) In General.--(1) Any lessee or permittee conducting any 
exploration for, or development or production of, oil or gas pursuant 
to this title shall provide the Secretary access to all data and 
information from any lease granted pursuant to this title (including 
processed and analyzed) obtained from such activity and shall provide 
copies of such data and information as the Secretary may request. Such 
data and information shall be provided in accordance with regulations 
which the Secretary shall prescribe.
    (2) If processed and analyzed information provided pursuant to 
paragraph (1) is provided in good faith by the lessee or permittee, 
such lessee or permittee shall not be responsible for any consequence 
of the use or of reliance upon such processed and analyzed information.
    (3) Whenever any data or information is provided to the Secretary, 
pursuant to paragraph (1)--
            (A) by a lessee or permittee, in the form and manner of 
        processing which is utilized by such lessee or permittee in the 
        normal conduct of business, the Secretary shall pay the 
        reasonable cost of reproducing such data and information; or
            (B) by a lessee or permittee, in such other form and manner 
        of processing as the Secretary may request, the Secretary shall 
        pay the reasonable cost of processing and reproducing such data 
        and information.
    (b) Regulations.--The Secretary shall prescribe regulations to: (1) 
assure that the confidentiality of privileged or proprietary 
information received by the Secretary under this section will be 
maintained; and (2) set forth the time periods and conditions which 
shall be applicable to the release of such information.

SEC. 911. EXPEDITED JUDICIAL REVIEW.

    (a) Any complaint seeking judicial review of any provision in this 
title, or any other action of the Secretary under this title may be 
filed in any appropriate district court of the United States, and such 
complaint must be filed within ninety days from the date of the action 
being challenged, or after such date if such complaint is based solely 
on grounds arising after such ninetieth day, in which case the 
complaint must be filed within ninety days after the complainant knew 
or reasonably should have known of the grounds for the complaint: 
Provided, That any complaint seeking judicial review of an action of 
the Secretary in promulgating any regulation under this title may be 
filed only in the United States Court of Appeals for the District of 
Columbia.
    (b) Actions of the Secretary with respect to which review could 
have been obtained under this section shall not be subject to judicial 
review in any civil or criminal proceeding for enforcement.

SEC. 912. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN.

    Notwithstanding title XI of the Alaska National Interest Lands 
Conservation Act of 1980 (16 U.S.C. 3161 et seq.), the Secretary is 
authorized and directed to grant, in accordance with the provisions of 
section 28 (c) through (t) and (v) through (y) of the Mineral Leasing 
Act of 1920 (30 U.S.C. 185), rights-of-way and easements across the 
Coastal Plain for the transportation of oil and gas under such terms 
and conditions as may be necessary so as not to result in a significant 
adverse effect on the fish and wildlife, subsistence resources, their 
habitat, and the environment of the Coastal Plain. Such terms and 
conditions shall include requirements that facilities be sited or 
modified so as to avoid unnecessary duplication of roads and pipelines. 
The regulations issued as required by section 904 of this title shall 
include provisions granting rights-of-way and easements across the 
Coastal Plain.

SEC. 913. ENFORCEMENT OF SAFETY AND ENVIRONMENTAL REGULATIONS TO ENSURE 
              COMPLIANCE WITH TERMS AND CONDITIONS OF LEASE.

    (a) Responsibility of the Secretary.--The Secretary shall 
diligently enforce all regulations, lease terms, conditions, 
restrictions, prohibitions, and stipulations promulgated pursuant to 
this title.
    (b) Responsibility of Holders of Lease.--It shall be the 
responsibility of any holder of a lease under this title to--
            (1) maintain all operations within such lease area in 
        compliance with regulations intended to protect persons and 
        property on, and fish and wildlife, their habitat, subsistence 
        resources, and the environment of, the Coastal Plain; and
            (2) allow prompt access at the site of any operations 
        subject to regulation under this title to any appropriate 
        Federal or State inspector, and to provide such documents and 
        records which are pertinent to occupational or public health, 
        safety, or environmental protection, as may be requested.
    (c) On-Site Inspection.--The Secretary shall promulgate regulations 
to provide for--
            (1) scheduled onsite inspection by the Secretary, at least 
        twice a year, of facility on the Coastal Plain which is subject 
        to any environmental or safety regulation promulgated pursuant 
        to this title or conditions contained in any lease issue 
        pursuant to this title to assure compliance with such 
        environmental or safety regulations or conditions; and
            (2) periodic onsite inspection by the Secretary at least 
        once a year without advance notice to the operator of such 
        facility to assure compliance with all environmental or safety 
        regulations.

SEC. 914. NEW REVENUES.

    Notwithstanding any other provision of law, all revenues received 
by the Federal Government from competitive bids, sales, bonuses, 
royalties, rents, fees, or interest derived from the leasing of oil and 
gas within the Coastal Plain shall be deposited into the Treasury of 
the United States, solely as provided in this section. The Secretary of 
the Treasury shall pay to the State of Alaska the same percentage of 
such revenues as is set forth under the heading ``EXPLORATION OF 
NATIONAL PETROLEUM RESERVE IN ALASKA'' in Public Law 96-514 (94 Stat. 
2957, 2964) semiannually to the State of Alaska, on March 30 and 
September 30 of each year and shall deposit the balance of all such 
revenues as miscellaneous receipts in the Treasury.

          TITLE X--CLEAN, RELIABLE, AND AFFORDABLE ELECTRICITY

SEC. 1001. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds that--
            (1) reliable, affordable, increasingly clean electricity 
        will continue to power the growing the United States economy. 
        Increasing use of electrotechnologies, the desire for 
        continuous environmental improvement, a more competitive 
        electricity market, and concerns about rising energy prices add 
        importance to the need for reliable, affordable, increasingly 
        clean electricity,
            (2) coal, which currently accounts for more than \1/2\ of 
        all electricity generated in the United States, is the Nation's 
        most abundant fossil energy resource; it comprises more than 85 
        percent of all fossil resources in the United States, 
        representing a 250-year supply at current usage rates,
            (3) investments in power plant emissions control technology 
        over the past 30 years have reduced health-based pollutants 
        from coal-based generating plants by 32 percent, even as coal 
        used for electricity generation has nearly tripled,
            (4) continuous improvement in efficiency and environmental 
        performance from generating stations will allow continued use 
        for coal, the Nation's most abundant energy resource, and 
        preserve less abundant energy resources for other energy uses,
            (5) new technologies for converting coal into electricity 
        can effectively eliminate health-based emissions and improve 
        efficiency by as much as 50 percent, yet initial commercial 
        deployment of new coal generating technologies entails 
        significant risk that generators may be unable to accept in a 
        newly competitive electricity market, and
            (6) continued environmental improvement in coal-based 
        generation toward an ultimate goal of near-zero emissions is 
        important and desirable.
    (b) Purpose.--The purpose of this title is to amend the Internal 
Revenue Code of 1986 and authorize Department of Energy programs to--
            (1) develop and implement an accelerated research and 
        development program for advanced clean coal technologies for 
        use in existing and new coal-based electricity generating 
        facilities,
            (2) provide financial incentives to encourage the retrofit, 
        repowering, or replacement of existing coal-based electricity 
        generating facilities to protect the environment and improve 
        efficiency,
            (3) encourage the early commercial application of advanced 
        clean coal technologies, and
            (4) allow coal, the most abundant domestic energy resource, 
        to help meet the Nation's growing need for clean, reliable, and 
        affordable electricity.

Subtitle A--Accelerated Technology Research and Development Program for 
Advanced Clean Coal Technology for New and Existing Coal-Based Electric 
                         Generating Facilities

  PART 1--NATIONAL COAL-BASED TECHNOLOGY DEVELOPMENT AND APPLICATIONS 
                                PROGRAM

SEC. 1011. PURPOSES.

    The purposes of this subtitle are to direct the Secretary--
            (1) to establish a coal-based technology development 
        program designed to achieve cost and performance goals;
            (2) to undertake a study to identify technologies that may 
        be capable of achieving the cost and performance goals and for 
        other purposes; and
            (3) to implement a research, development, and demonstration 
        program designed to develop and demonstrate in commercial-scale 
        applications advanced clean coal technologies for existing 
        coal-fired power generation units.

SEC. 1012. COST AND PERFORMANCE GOALS.

    (a) Within 120 days of the date of enactment of this Act, the 
Secretary is directed to issue a set of technology cost and performance 
goals for public comment, and after taking into account the public 
comments, the Secretary shall submit the final technology cost and 
performance goals to the Congress within 180 days of enactment of this 
Act.
    (b) In establishing these technology cost and performance goals, 
the Secretary shall consult with representatives from the United States 
coal industry, electric utility industry, railroads and other 
transportation industries, manufacturers of equipment utilizing 
advanced coal technologies, organizations representing workers, and 
members of organizations formed to further the goals of environmental 
protection or to promote the development and use of advanced coal 
technologies.
    (c) For purposes of this section, the term ``cost and performance 
goals'' means the result of an assessment undertaken by the Secretary, 
in consultation with those entities identified in subsection (b), that 
identifies costs and associated performance of technologies that would 
permit the continued cost-competitive use of coal for electricity 
generation, as chemical feedstocks and as transportation fuel in the 
years 2007, 2015, and beyond 2020.

SEC. 1013. STUDY.

    (a) Not later than 12 months after the date of enactment of this 
Act, the Secretary, in cooperation with the Secretary of the Interior 
and the Administrator of the Environmental Protection Agency, shall 
undertake a cooperative study designed to--
            (1) identify technologies capable of achieving the cost and 
        performance goals established in section 1012;
            (2) assess the costs to develop and demonstrate such 
        technologies and the amount of time required to undertake and 
        accomplish such development and demonstration; and
            (3) set forth a set of recommendations by which the 
        Department of Energy could undertake, in cooperation with 
        industry, technology development programs to develop and 
        demonstrate such technologies.
    (b) In carrying out this section, the Secretary shall incorporate 
the advice of representatives with applicable expertise from the United 
States coal industry, electric utility industry, railroads and other 
coal transportation industries, manufacturers of equipment utilizing 
advanced coal technologies, organizations representing workers, and 
members of organizations formed to further the goals of environmental 
protection or to promote the development and use of advanced coal 
technologies.

SEC. 1014. TECHNOLOGY RESEARCH AND DEVELOPMENT PROGRAM.

    (a) The Secretary shall, pursuant to the authority and directions 
of this title and the Federal Non-Nuclear Energy Research and 
Development Act of 1974 (Public Law 93-577), the Energy Reorganization 
Act of 1974 (Public Law 93-438), and the Energy Policy Act of 1992 
(Public Law 102-486), undertake and conduct programs for research on 
and development, demonstration, and commercial application of coal-
based technologies. Such research, development, demonstration, and 
commercial application programs identified in section 1013 shall be 
designed to achieve the cost and performance goals established in 
sections 1012.
    (b) Not later than 18 months after the date of enactment of this 
Act, the Secretary shall transmit to the President and the Congress a 
report containing--
            (1) a description of the programs in place or to be 
        undertaken within the Department of Energy to support 
        technologies that are designed to achieve the cost and 
        performance goals established in section 1012, and
            (2) recommendations for additional authorities required in 
        order to achieve the cost and performance goals.

SEC. 1015. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary for 
carrying out this subtitle $100,000,000 for each of fiscal years 2002 
through 2012, to remain available until expended. This authorization is 
supplemental to existing authorities and shall not be construed as a 
cap on Department of Energy Fossil Energy Research and Development and 
Clean Coal Technology appropriations.

             PART 2--EXISTING PLANT TECHNOLOGY APPLICATIONS

SEC. 1021. EXISTING PLANT TECHNOLOGY APPLICATIONS.

    (a) The Secretary shall conduct a program of research, development, 
demonstration, and commercial application for the purpose of developing 
economically and environmentally acceptable advanced technologies for 
utilization at or within current electricity generation facilities 
utilizing coal as the primary feedstock.
    (b) Within 120 days after the date of enactment of this Act, the 
Secretary shall transmit to Congress a detailed plan for conducting the 
research, development, demonstration, and commercial application 
programs for the purpose of developing economically and environmentally 
acceptable advanced technologies for utilization at or within existing 
electricity generation facilities utilizing coal as the primary 
feedstock. Such plan shall include a description of--
            (1) the program elements and management structure to be 
        utilized;
            (2) the technical milestones to be achieved with respect to 
        each of the advanced coal-based technologies included in the 
        plan;
            (3) the research, development, and demonstration activities 
        proposed to be conducted at existing coal-based electric 
        generation units of at least 50 megawatts nameplate rating and 
        including design improvements that will allow such units to 
        provide either--
                    (A) an overall design efficiency improvement of not 
                less than 5 percentage points on a unit having design 
                main steam throttle conditions of at least 1,800 psi/
                1,000 F/1,000 F,
                    (B) a design removal for one or more of the 
                following emissions of not less than--
                            (i) 98 percent removal, annual average, of 
                        sulfur dioxide at a capital and operating cost 
                        at least 25 percent below commercially 
                        available technology,
                            (ii) 85 percent removal, annual average, of 
                        nitrogen oxide without the use of ammonia or 
                        urea, or
                            (iii) 75 percent, annual average, emission 
                        reduction of total mercury excluding any 
                        reductions due to use of activated carbon or a 
                        system for selective catalytic reduction; or
                    (C) 100 percent recycle/utilization options of coal 
                combustion wastes excluding gypsum production for 
                wallboard and coal fly ash and bottom ash use in 
                Portland cement and concrete applications.

SEC. 1022. DEMONSTRATION AND COMMERCIAL APPLICATION PROGRAM.

    (a) Not later than 180 days after the date of submittal of the 
program described in section 1021 of this Act, the Secretary shall 
cause to have solicited proposals for demonstrations designed to 
achieve the technical milestones set forth in section 1021(b)(1)(C).
    (b) In selecting a project or projects for financial assistance 
under this subtitle, the Secretary shall utilize the criteria for a 
qualifying project which shall provide a minimum of 50 percent cost 
sharing with the Federal Government for the installation and operation 
of the clean coal technology. In making project selections that meet 
the criteria and purposes of the solicitation, the Department of Energy 
shall select those projects which--
            (1) demonstrates overall cost reductions in the utilization 
        of coal to generate useful forms of energy;
            (2) improves 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
            (3) cost-effectively achieves 1 or more of the criteria set 
        out in the solicitation, including a project that demonstrates 
        the emissions control of 1 or more pollutants or the production 
        of coal combustion by-products that are capable of obtaining 
        values significantly greater than by-products currently 
        produced.
    (c) A qualifying project under this section shall be exempt from 
the new source review provisions of the Clean Air Act (42 U.S.C. 1857 
et seq.).

SEC. 1023. AUTHORIZATION OF APPROPRIATIONS.

    The Secretary, as of the date of enactment of this Act, is 
authorized to utilize any funds appropriated, but not currently 
committed, or that may become uncommitted to any project selected under 
the existing ``Clean Coal Technology'' program to administer and 
conduct this subtitle.

Subtitle B--Credit for Emission Reductions and Efficiency Improvements 
        in Existing Coal-Based Electricity Generation Facilities

SEC. 1031. CREDIT FOR INVESTMENT IN QUALIFYING CLEAN COAL TECHNOLOGY.

    (a) Allowance of Qualifying Clean Coal Technology Unit Credit.--
Section 46 of the Internal Revenue Code of 1986 (relating to amount of 
credit) is amended by striking ``and'' at the end of paragraph (2), by 
striking the period at the end of paragraph (3) and inserting ``, 
and'', and by adding at the end the following:
            ``(4) the qualifying clean coal technology unit credit.''.
    (b) Amount of Qualifying Clean Coal Technology Unit Credit.--
Subpart E of part IV of subchapter A of chapter 1 of the Internal 
Revenue Code of 1986 (relating to rules for computing investment 
credit) is amended by inserting after section 48 the following:

``SEC. 48A. QUALIFYING CLEAN COAL TECHNOLOGY UNIT CREDIT.

    ``(a) In General.--For purposes of section 46, the qualifying clean 
coal technology unit credit for any taxable year is an amount equal to 
20 percent of the qualified investment in a qualifying system of 
continuous emission control for such taxable year.
    ``(b) Qualifying System of Continuous Emission Control.--
            ``(1) In general.--For purposes of subsection (a) the term 
        `qualifying system of continuous emission control' means a 
        system of the taxpayer--
                    ``(A) which is retrofitted to an existing coal-
                based electricity generating unit, the retrofitting of 
                which is completed by the taxpayer (but only with 
                respect to that portion of the basis which is properly 
                attributable to such retrofitting),
                    ``(B) which removes 1 or more of the pollutants 
                regulated under title I of the Clean Air Act (42 U.S.C. 
                1857 et seq.),
                    ``(C) that is depreciable under section 167,
                    ``(D) that has a useful life of not less than 4 
                years, and
                    ``(E) that is located in the United States.
            ``(2) Special rule for sale-leasebacks.--For purposes of 
        subparagraph (A) of paragraph (1), in the case of a unit that--
                    ``(A) is originally placed in service by a person, 
                and
                    ``(B) is sold and leased back by such person, or is 
                leased to such person, within 3 months after the date 
                such unit was originally placed in service, for a 
                period of not less than 12 years,
        such unit shall be treated as originally placed in service not 
        earlier than the date on which such property is used under the 
        leaseback (or lease) referred to in subparagraph (B). The 
        preceding sentence shall not apply to any property if the 
        lessee and lessor of such property makes an election under this 
        sentence. Such an election, once made, may be revoked only with 
        the consent of the Secretary.
    ``(c) Existing Coal-Based Electricity Generating Unit.--For 
purposes of subsection (a), the term `existing coal-based electricity 
generating unit' means, with respect to any taxable year, a steam 
generator-turbine unit that utilizes coal to produce 50 percent or more 
of its output as electricity and was in operation before the effective 
date of this section.
    ``(d) Limit on Qualifying Clean Coal Technology Unit Credit.--For 
purposes of subsection (a), the credit shall be applicable to no more 
than the first $100,000,000 of qualifying investment in a qualifying 
system of continuous emission control at any 1 existing coal-based 
electricity generating unit.
    ``(e) Qualified Investment.--For purposes of subsection (a), the 
term `qualified investment' means, with respect to any taxable year, 
the basis of a qualifying system of continuous emission control placed 
in service by the taxpayer during such taxable year.
    ``(f) Qualified Progress Expenditures.--
            ``(1) Increase in qualified investment.--In the case of a 
        taxpayer who has made an election under paragraph (5), the 
        amount of the qualified investment of such taxpayer for the 
        taxable year (determined under subsection (c) without regard to 
        this section) shall be increased by an amount equal to the 
        aggregate of each qualified progress expenditure for the 
        taxable year with respect to progress expenditure property.
            ``(2) Progress expenditure property defined.--For purposes 
        of this subsection, the term `progress expenditure property' 
        means any property being constructed by or for the taxpayer and 
        which it is reasonable to believe will qualify as a qualifying 
        system of continuous emission control which is being 
        constructed by or for the taxpayer when it is placed in 
        service.
            ``(3) Qualified progress expenditures defined.--For 
        purposes of this subsection--
                    ``(A) Self-constructed property.--In the case of 
                any self-constructed property, the term `qualified 
                progress expenditures' means the amount which, for 
                purposes of this subpart, is properly chargeable 
                (during such taxable year) to capital account with 
                respect to such property.
                    ``(B) Non-self-constructed property.--In the case 
                of non-self-constructed property, the term `qualified 
                progress expenditures' means the amount paid during the 
                taxable year to another person for the construction of 
                such property.
            ``(4) Other definitions.--For purposes of this subsection--
                    ``(A) Self-constructed property.--The term `self-
                constructed property' means property for which it is 
                reasonable to believe that more than half of the 
                construction expenditures will be made directly by the 
                taxpayer.
                    ``(B) Non-self-constructed property.--The term 
                `non-self-constructed property' means property which is 
                not self-constructed property.
                    ``(C) Construction, etc.--The term `construction' 
                includes reconstruction and erection, and the term 
                `constructed' includes reconstructed and erected.
                    ``(D) Only construction of qualifying system of 
                continuous emission control to be taken into account.--
                Construction shall be taken into account only if, for 
                purposes of this subpart, expenditures therefor are 
                properly chargeable to capital account with respect to 
                the property.
            ``(5) Election.--An election under this subsection may be 
        made at such time and in such manner as the Secretary may by 
        regulations prescribe. Such an election shall apply to the 
        taxable year for which made and to all subsequent taxable 
        years. Such an election, once made, may not be revoked except 
        with the consent of the Secretary.
    ``(g) Coordination With Other Credits.--This section shall not 
apply to any property with respect to which the rehabilitation credit 
under section 47 or the energy credit under section 48 is allowed 
unless the taxpayer elects to waive the application of such credit to 
such property.
    ``(h) Termination.--This section shall not apply with respect to 
any qualified investment made more than 10 years after the effective 
date of this section.''
    (c) Recapture.--Section 50(a) of the Internal Revenue Code of 1986 
(relating to other special rules) is amended by adding at the end the 
following:
            ``(6) Special rules relating to qualifying system of 
        continuous emission control.--For purposes of applying this 
        subsection in the case of any credit allowable by reason of 
        section 48A, the following shall apply:
                    ``(A) General rule.--In lieu of the amount of the 
                increase in tax under paragraph (1), the increase in 
                tax shall be an amount equal to the investment tax 
                credit allowed under section 38 for all prior taxable 
                years with respect to a qualifying system of continuous 
                emission control (as defined by section 48A(b)(1)) 
                multiplied by a fraction whose numerator is the number 
                of years remaining to fully depreciate under this title 
                the qualifying system of continuous emission control 
                disposed of, and whose denominator is the total number 
                of years over which such unit would otherwise have been 
subject to depreciation. For purposes of the preceding sentence, the 
year of disposition of the qualifying system of continuous emission 
control property shall be treated as a year of remaining depreciation.
                    ``(B) Property ceases to qualify for progress 
                expenditures.--Rules similar to the rules of paragraph 
                (2) shall apply in the case of qualified progress 
                expenditures for a qualifying system of continuous 
                emission control under section 48A, except that the 
                amount of the increase in tax under subparagraph (A) of 
                this paragraph shall be substituted in lieu of the 
                amount described in such paragraph (2).
                    ``(C) Application of paragraph.--This paragraph 
                shall be applied separately with respect to the credit 
                allowed under section 38 regarding a qualifying system 
                of continuous emission control.''
    (d) Transitional Rule.--Section 39(d) of the Internal Revenue Code 
of 1986 (relating to transitional rules) is amended by adding at the 
end the following:
            ``(10) No carryback of section 48a credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the qualifying clean coal 
        technology unit credit determined under section 48A may be 
        carried back to a taxable year ending before the date of the 
        enactment of section 48A.''
    (e) Technical Amendments.--
            (1) Section 49(a)(1)(C) is amended by striking ``and'' at 
        the end of clause (ii), by striking the period at the end of 
        clause (iii) and inserting ``, and'', and by adding at the end 
        the following:
                            ``(iv) the portion of the basis of any 
                        qualifying system of continuous emission 
                        control attributable to any qualified 
                        investment (as defined by section 48A(c)).''
            (2) Section 50(a)(4) is amended by striking ``and (2)'' and 
        inserting ``, (2), and (6)''.
            (3) Section 50(c)(3) is amended--
                    (A) by inserting ``(A)'' before ``In the case of 
                any energy credit or reforestation credit'' and by 
                striking ``(A)'' and ``(B)'' and inserting ``(i)'' and 
                ``(ii)''; and
                    (B) by inserting after clause (ii) ``(B) Any clean 
                coal technology unit credit shall be exempt from 
                paragraph (1) and paragraph (2) of section 50(c).
            (4) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1, as amended by section 101(d), is 
        amended by inserting after the item relating to section 48 the 
        following:

                              ``Sec. 48A. Qualifying clean coal 
                                        technology unit credit.''
    (f) Installations Not Subject to New Source Review.--
            (1) Installation of a qualifying system of continuous 
        emission control shall be exempt from the new source review 
        provisions of the Clean Air Act (42 U.S.C. 1857 et seq.).
            (2) Installation of a qualifying system of continuous 
        emission control that meets or exceeds, for the applicable 
        source category and pollutant being controlled by the qualified 
        system of continuous emission control, the standard of 
        performance for new stationary sources, on an existing coal-
        based electricity generating unit shall exempt the unit from 
        any new or increased emission control requirements for the 
        pollutant being controlled by the qualified system of 
        continuous emission control under title I of the Clean Air Act 
        (42 U.S.C. 1857 et seq.) for a period of 10 years after the 
        date the system of continuous emission control is placed in 
        service.
    (g) Effective Date.--The amendments made by this section shall 
apply to periods after December 31, 2000, 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. 1032. CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN COAL 
              TECHNOLOGY UNIT.

    (a) Credit for Production From a Qualifying Clean Coal Technology 
Unit.--Subpart D of part IV of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to business related credits) is 
amended by adding at the end the following:

``SEC. 45E. CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN COAL 
              TECHNOLOGY UNIT.

    ``(a) General Rule.--For purposes of section 38, the qualifying 
clean coal technology production credit of any taxpayer for any taxable 
year is equal to the product of--
            ``(1) the applicable clean coal technology production 
        credit, multiplied by
            ``(2) the kilowatt hours of electricity--
                    ``(A) produced by the taxpayer at a qualifying 
                clean coal technology unit during the 10-year period 
                beginning on the date the unit was returned to service 
                after retrofit, repowering, or replacement, and
                    ``(B) sold by the taxpayer to an unrelated person 
                during such taxable year.
    ``(b) Clean Coal Technology Production Credit.--For purposes of 
this section, the clean coal technology production credit is, except as 
otherwise provided for in this subparagraph, six tenths of a cent 
($0.006).
    ``(c) Inflation Adjustment Factor.--The applicable amount of the 
clean coal technology production credit shall each be adjusted by 
multiplying such amount by the inflation adjustment factor for the 
calendar year in which the amount is applied. If any amount as 
increased under the preceding sentence is not a multiple of 0.01 cent, 
such amount shall be rounded to the nearest multiple of 0.01 cent.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) the term `qualifying clean coal technology unit' 
        means a unit of the taxpayer, which (A) is an existing coal-
        based electricity generating steam generator-turbine unit which 
        (B) has a nameplate capacity rating of not more than 300,000 
        kilowatts, and (C) has been retrofitted, repowered, or replaced 
        with a clean coal technology within 10 years of the effective 
        date of this section,
            ``(2) the term `clean coal technology' means technology 
        that--
                    ``(A) utilizes coal to produce 50 percent or more 
                of its thermal output as electricity, including 
                advanced pulverized coal or atmospheric fluidized bed 
                combustion, pressurized fluidized bed combustion, 
                integrated gasification combined cycle, or any other 
                technology for the production of electricity,
                    ``(B) has a design heat rate not less than 500 Btu/
                kWh below that of the existing unit before it is 
                retrofit, repowered, or replaced with the qualifying 
                clean coal technology,
                    ``(C) has a maximum design heat rate of not more 
                than 9,000 Btu/kWh when the design coal has a heat 
                content of more than 8,000 Btu per pound, and
                    ``(D) has a maximum design heat rate of not more 
                than 10,500 Btu/kWh when the design coal has a heat 
                content of 8,000 Btu per pound or less,
            ``(3) the rules of paragraphs (3), (4), and (5) of section 
        45 shall apply,
            ``(4) the term `inflation adjustment factor' means, with 
        respect to a calendar year, a fraction the numerator of which 
        is the GDP implicit price deflator for the preceding calendar 
        year and the denominator of which is the GDP implicit price 
        deflator for the calendar year 1998, and
            ``(5) the term `GDP implicit price deflator' means the most 
        recent revision of the implicit price deflator for the gross 
        domestic product as computed by the Department of Commerce 
        before March 15 of the calendar year.''
    (c) Credit Treated as Business Credit.--Section 38(b) of the 
Internal Revenue Code of 1986 is amended by striking ``plus'' at the 
end of paragraph (11), by striking the period at the end of paragraph 
(12) and inserting ``, plus'', and by adding at the end the following:
            ``(13) the qualifying clean coal technology production 
        credit determined under section 45E(a).''
    (d) Transitional Rule.--Section 39(d) of the Internal Revenue Code 
of 1986 (relating to transitional rules), as amended by section 
1031(d), is amended by adding at the end the following:
            ``(11) No carryback of certain credits before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the credits allowable under any 
        section added to this subpart by the amendments made by the 
        National Energy Security Act of 2000 may be carried back to a 
        taxable year ending before the date of the enactment of such 
        Act.''
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following:

                              ``Sec. 45E. Credit for production from 
                                        qualifying clean coal 
                                        technology unit.''
    (f) Modifications Excluded From New Source Review.--
            (1) Modifications made to an existing coal-based generation 
        unit because of, or as part of a qualifying clean coal 
        technology unit shall be exempt from the new source review 
        provisions of the Clean Air Act (42 U.S.C. 1857 et seq.).
            (2) Installation of a qualifying clean coal technology, 
        that meets or exceeds, for the applicable source category, the 
        standards of performance for new sources under section 111 of 
        the Clean Air Act (42 U.S.C. 1857 et seq.), on an existing 
        coal-based electricity generating unit shall exempt that unit 
        from any new or increased emission control requirements under 
        title I of the Clean Air Act (42 U.S.C. 1857 et seq.) for a 
        period of 10 years after the qualifying clean coal technology 
        is originally placed in service.
    (g) Effective Date.--The amendments made by this section shall 
apply to production after the date of the enactment of this Act.

SEC. 1033. DEBT REPAYMENT FOR THE INVESTMENT IN THE RETROFIT, 
              REPOWERING, OR REPLACEMENT OF EXISTING COAL-BASED 
              GENERATION WITH CERTAIN SYSTEMS OF CONTINUOUS EMISSION 
              CONTROL AND CLEAN COAL TECHNOLOGY.

    (a) Allowance of Debt Repayment in Lieu of Qualifying Clean Coal 
Technology Credits.--The owner of a qualified system of continuous 
emission control under section 1031 or a qualified clean coal 
technology unit under section 1032 may elect to have the amount of the 
credits applied to the prepayment of any debt or obligations the owner 
has incurred under subchapter I, chapter 31, title 7 of the Rural 
Electrification Act of 1936 (7 U.S.C. 901 et seq.) and has been 
selected by the owner for such prepayment in lieu of a credit against 
the owner's tax obligations under the Internal Revenue Code of 1986.
    (b) Owner.--For purposes of this title, the owner of a qualified 
system of continuous emission control under section 1031 or a qualified 
clean coal technology unit under section 1032 shall be deemed to be a 
taxpayer and thereby qualify for the credits for investment in a 
qualified system of continuous emission control or production from a 
qualifying clean coal technology facility as described in section 48A, 
section 45E and allowed by section 38, notwithstanding provisions to 
the contrary, of the Internal Revenue Code of 1986. Furthermore, 
neither the amount of the credit produced nor the use of such credit 
for the prepayment of debt as set forth in subsection (a) shall give 
rise to ``income'' for purposes of section 501(c)(12) of such Code.
    (c) Unrelated Person.--For purposes of this title, the term 
``unrelated person'' shall have the meaning given to such term by 
section 45 of such Code.

 Subtitle C--Incentives for Early Commercial Applications of Advanced 
                        Clean Coal Technologies

SEC. 1041. CREDIT FOR INVESTMENT IN QUALIFYING ADVANCED CLEAN COAL 
              TECHNOLOGY.

    (a) Allowance of Qualifying Advanced Clean Coal Technology Facility 
Credit.--Section 46 of the Internal Revenue Code of 1986 (relating to 
amount of credit) is amended by striking ``and'' at the end of 
paragraph (3), by striking the period at the end of paragraph (4) and 
inserting ``, and'', and by adding at the end the following:
            ``(5) the qualifying advanced clean coal technology 
        facility credit.''
    (b) Amount of Qualifying Advanced Clean Coal Technology Facility 
Credit.--Subpart E of part IV of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to rules for computing 
investment credit) is amended by inserting after section 48A the 
following:

``SEC. 48B. QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY FACILITY CREDIT.

    ``(a) In General.--For purposes of section 46, the qualifying 
advanced clean coal technology facility credit for any taxable year is 
an amount equal to 10 percent of the qualified investment in a 
qualifying advanced clean coal technology facility for such taxable 
year.
    ``(b) Qualifying Advanced Clean Coal Technology Facility.--
            ``(1) In general.--For purposes of subsection (a) the term 
        `qualifying advanced clean coal technology facility' means a 
        facility of the taxpayer--
                    ``(A)(i)(I) which replaces a conventional 
                technology facility of the taxpayer and the original 
                use of which commences with the taxpayer, or
                    ``(II) which is a retrofitted or repowered 
                conventional technology facility, the retrofitting or 
                repowering of which is completed by the taxpayer (but 
                only with respect to that portion of the basis which is 
                properly attributable to such retrofitting or 
                repowering), or
                    ``(ii) which is acquired through purchase (as 
                defined by section 179(d)(2)),
                    ``(B) that is depreciable under section 167,
                    ``(C) that has a useful life of not less than 4 
                years,
                    ``(D) that is located in the United States, and
                    ``(E) that uses qualifying advanced clean coal 
                technology.
            ``(2) Special rule for sale-leasebacks.--For purposes of 
        subparagraph (A) of paragraph (1), in the case of a facility 
        that--
                    ``(A) is originally placed in service by a person, 
                and
                    ``(B) is sold and leased back by such person, or is 
                leased to such person, within 3 months after the date 
                such facility was originally placed in service, for a 
                period of not less than 12 years,
        such facility shall be treated as originally placed in service 
        not earlier than the date on which such property is used under 
        the leaseback (or lease) referred to in subparagraph (B). The 
        preceding sentence shall not apply to any property if the 
        lessee and lessor of such property make an election under this 
        sentence. Such an election, once made, may be revoked only with 
        the consent of the Secretary.
            ``(3) Qualifying advanced clean coal technology.--For 
        purposes of paragraph (1)(A)--
                    ``(A) In general.--The term `qualifying advanced 
                clean coal technology' means, with respect to clean 
                coal technology--
                            ``(i) applications totaling 1,000 megawatts 
                        of advanced pulverized coal or atmospheric 
                        fluidized bed combustion technology (I) 
                        installed as a new, retrofit, or repowering 
                        application, (II) operated between 2000 and 
                        2015, (III) has a design net heat rate of not 
                        more than 8,750 Btu per kilowatt hour when the 
                        design coal has a heat content of more than 
                        8,000 Btu per round, or has a design net heat 
                        rate of not more than 9,500 Btu per kilowatt 
                        hour when the design coal has a heat content of 
                        8,000 Btu per pound or less,
                            ``(ii) applications totaling 1,500 
                        megawatts of pressurized fluidized bed 
                        combustion technology installed as a new, 
                        retrofit, or repowering application and 
                        operated between 2000 and 2015 that has a 
                        design net heat rate of not more than 8,400 Btu 
                        per kilowatt hour when the design coal has a 
                        heat content of more than 8,000 Btu per pound, 
                        and has a design net heat rate of not more than 
                        9,500 Btu's per kilowatt hour when the design 
                        coal has a heat content of 8,000 Btu per pound 
                        or less,
                            ``(iii) applications totaling 1,500 
                        megawatts of integrated gasification combined 
                        cycle technology (I) installed as a new, 
                        retrofit, or repowering application, (II) 
                        operated between 2000 and 2015, (III) has a 
                        design net heat rate of not more than 8,550 Btu 
                        per kilowatt hour when the design coal has a 
                        heat content of more than 8,000 Btu per pound, 
                        or (IV) has a design net heat rate of not more 
                        than 9,500 Btu per kilowatt hour when the 
                        design coal has a heat content of 8,000 Btu per 
                        pound or less, and
                            ``(iv) applications totaling 2,000 
                        megawatts of technology for the production of 
electricity (I) installed as a new, retrofit, or repowering 
application, (II) operated between 2000 and 2015, and (III) has a 
carbon emission rate that is not more than 85 percent of conventional 
technology.
                    ``(B) Exceptions.--Such term shall not include 
                clean coal technology projects receiving or scheduled 
                to receive funding under the Clean Coal Technology 
                Program of the Department of Energy.
                    ``(C) Clean coal technology.--The term `clean coal 
                technology' means advanced technology that utilizes 
                coal to produce 50 percent or more of its thermal 
                output as electricity including advanced pulverized 
                coal or atmospheric fluidized bed combustion, 
                pressurized fluidized bed combustion, integrated 
                gasification combined cycle, and any other technology 
                for the production of electricity that exceeds the 
                performance of conventional technology.
                    ``(D) Conventional technology.--The term 
                `conventional technology' means--
                            ``(i) coal-fired combustion technology with 
                        a design net heat rate of not less than 9,300 
                        Btu's per kilowatt hour (HHV) and a carbon 
                        equivalents omission rate of not more than 0.53 
                        pounds of carbon per kilowatt hour when the 
                        design coal has a heat content of more than 
                        8,000 Btu per pound, or
                            ``(ii) coal-fired combustion technology 
                        with a design net heat rate of not less than 
                        10,500 Btu's per kilowatt hour (HHV) and a 
                        carbon equivalents emission rate of not more 
                        than 0.60 pounds of carbon per kilowatt hour 
                        when the design coal has a heat content of 
                        8,000 Btu per pound or less, or
                            ``(iii) natural gas-fired combustion 
                        technology with a design net heat rate of not 
                        less than 7,500 Btu's per kilowatt hour (HHV) 
                        and a carbon equivalents emission rate of not 
                        more than 0.24 pound of carbon per kilowatt 
                        hour.
                    ``(E) Design net heat rate.--The term `design net 
                heat rate' shall be based on the design annual heat 
                input to and the design annual net electrical output 
                from the qualifying advanced clean coal technology 
                (determined without regard to such technology's 
                cogeneration of steam).
                    ``(F) Selection criteria.--Selection criteria for 
                clean coal technology facilities--
                            ``(i) shall be established by the Secretary 
                        of Energy as part of a competitive 
                        solicitation,
                            ``(ii) shall include primary criteria of 
                        minimum design net heat rate, maximum design 
                        thermal efficiency, and lowest cost to the 
                        Government, and
                            ``(iii) shall include supplemental criteria 
                        as determined appropriate by the Secretary of 
                        Energy.
    ``(c) Qualified Investment.--For purposes of subsection (a), the 
term `qualified investment' means, with respect to any taxable year, 
the basis of a qualifying advanced clean coal technology facility 
placed in service by the taxpayer during such taxable year.
    ``(d) Qualified Progress Expenditures.--
            ``(1) Increase in qualified investment.--In the case of a 
        taxpayer who has made an election under paragraph (5), the 
        amount of the qualified investment of such taxpayer for the 
        taxable year (determined under subsection (c) without regard to 
        this section) shall be increased by an amount equal to the 
        aggregate of each qualified progress expenditure for the 
        taxable year with respect to progress expenditure property.
            ``(2) Progress expenditure property defined.--For purposes 
        of this subsection, the term `progress expenditure property' 
        means any property being constructed by or for the taxpayer and 
        which it is reasonable to believe will qualify as a qualifying 
        advanced clean coal technology facility which is being 
        constructed by or for the taxpayer when it is placed in 
        service.
            ``(3) Qualified progress expenditures defined.--For 
        purposes of this subsection--
                    ``(A) Self-constructed property.--In the case of 
                any self-constructed property, the term `qualified 
                progress expenditures' means the amount which, for 
                purposes of this subpart, is properly chargeable 
                (during such taxable year) to capital account with 
                respect to such property.
                    ``(B) Non-self-constructed property.--In the case 
                of non-self-constructed property, the term `qualified 
                progress expenditures' means the amount paid during the 
                taxable year to another person for the construction of 
                such property.
            ``(4) Other definitions.--For purposes of this subsection--
                    ``(A) Self-constructed property.--The term `self-
                constructed property' means property for which it is 
                reasonable to believe that more than half of the 
                construction expenditures will be made directly by the 
                taxpayer.
                    ``(B) Non-self-constructed property.--The term 
                `non-self-constructed property' means property which is 
                not self-constructed property.
                    ``(C) Construction, etc.--The term `construction' 
                includes reconstruction and erection, and the term 
                `constructed' includes reconstructed and erected.
                    ``(D) Only construction of qualifying advanced 
                clean coal technology facility to be taken into 
                account.--Construction shall be taken into account only 
                if, for purposes of this subpart, expenditures therefor 
                are properly chargeable to capital account with respect 
                to the property.
            ``(5) Election.--An election under this subsection may be 
        made at such time and in such manner as the Secretary may by 
        regulations prescribe. Such an election shall apply to the 
        taxable year for which made and to all subsequent taxable 
        years. Such an election, once made, may not be revoked except 
        with the consent of the Secretary.
    ``(e) Coordination With Other Credits.--This section shall not 
apply to any property with respect to which the rehabilitation credit 
under section 47 or the energy credit under section 48 is allowed 
unless the taxpayer elects to waive the application of such credit to 
such property.
    ``(f) Termination.--This section shall not apply with respect to 
any qualified investment made more than 10 years after the effective 
date of this section.''
    (c) Recapture.--Section 50(a) of the Internal Revenue Code of 1986 
(relating to other special rules) is amended by adding at the end the 
following:
            ``(7) Special rules relating to qualifying advanced clean 
        coal technology facility.--For purposes of applying the 
        subsection in the case of any credit allowable by reason of 
        section 48B, the following shall apply:
                    ``(A) General rule.--In lieu of the amount of the 
                increase in tax under paragraph (1), the increase in 
                tax shall be an amount equal to the investment tax 
                credit allowed under section 38 for all prior taxable 
                years with respect to a qualifying advanced clean coal 
                technology facility (as defined by section 48B(b)(1)) 
                multiplied by a fraction whose numerator is the number 
                of years remaining to fully depreciate under this title 
                the qualifying advanced clean coal technology facility 
                disposed of, and whose denominator is the total number 
                of years over which such facility would otherwise have 
                been subject to depreciation. For purposes of this 
                preceding sentence, the year of disposition of the 
                qualifying advanced clean coal technology facility 
                property shall be treated as a year of remaining 
                depreciation.
                    ``(B) Property ceases to qualify for progress 
                expenditures.--Rules similar to the rules of paragraph 
                (2) shall apply in the case of qualified progress 
                expenditures for a qualifying advanced clean coal 
                technology facility under section 48B, except that the 
                amount of the increase in tax under subparagraph (A) of 
                this paragraph shall be substituted in lieu of the 
                amount described in such paragraph (2).
                    ``(C) Application of paragraph.--This paragraph 
                shall be applied separately with respect to the credit 
                allowed under section 38 regarding a qualifying 
                advanced clean coal technology facility.''
    (d) Transitional Rule.--Section 39(d) of the Internal Revenue Code 
of 1986 (relating to transitional rules) is amended by adding at the 
end the following:
            ``(12) No carryback to section 48b credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the qualifying advanced clean 
        coal technology facility credit determined under section 48B 
        may be carried back to a taxable year ending before the date of 
        the enactment of section 48B.''
    (e) Technical Amendments.--
            (1) Section 49(a)(1)(C) is amended by striking ``and'' at 
        the end of clause (iii), by striking the period at the end of 
        clause (iv) and inserting ``, and'', and by adding at the end 
        the following:
                            ``(v) the portion of the basis of any 
                        qualifying advanced clean coal technology 
                        facility attributable to any qualified 
                        investment (as defined by section 48B(c)).''
            (2) Section 50(a)(4) is amended by striking ``and (6)'' and 
        inserting ``, (6), and (7)''.
            (3) Section 50(c)(3) is amended by inserting after 
        subparagraph (C) the following:
                    ``(D) Any advanced clean coal technology facility 
                credit shall be exempt from paragraph (1) and paragraph 
                (2) of section 50(c).
            (4) 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 48A the following:

                              ``Sec. 48B. Qualifying advanced clean 
                                        coal technology facility 
                                        credit.''
    (f) Installations Not Subject to New Source Review.--
            (1) Installation of a qualifying advanced clean coal 
        technology facility shall be exempt from the new source review 
        provisions of the Clean Air Act (42 U.S.C. 1857 et seq.).
            (2) Installation of a qualifying advanced clean coal 
        technology facility that meets or exceeds, for the applicable 
        source category, the standards of performance for new 
        stationary sources established under section 111 of the Clean 
        Air Act (42 U.S.C. 1857 et seq.), shall exempt that facility 
        from any new or increased emission control requirements under 
        title I of the Clean Air Act (42 U.S.C. 1857 et seq.) for a 
        period of 10 years after the qualifying clean coal technology 
        facility is originally placed in service.
    (g) Effective Date.--The amendments made by this section shall 
apply to periods after December 31, 2000, 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. 302. CREDIT FOR PRODUCTION FROM QUALIFYING ADVANCED CLEAN COAL 
              TECHNOLOGY.

    (a) Credit for Production From Qualifying Advanced Clean Coal 
Technology.--Subpart D of part IV of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to business related credits) is 
amended by adding at the end the following:

``SEC. 45F. CREDIT FOR PRODUCTION FROM QUALIFYING ADVANCED CLEAN COAL 
              TECHNOLOGY.

    ``(a) General Rule.--For purposes of section 38, the qualifying 
advanced clean coal technology production credit of any taxpayer for 
any taxable year is equal to--
            ``(1) the applicable amount of advanced clean coal 
        technology production credit, multiplied by
            ``(2) the kilowatt hours of electricity--
                    ``(A) produced by the taxpayer at a qualifying 
                advanced clean coal technology facility during the 10-
                year period beginning on the date the facility was 
                originally placed in service, and
                    ``(B) sold by the taxpayer to an unrelated person 
                during such taxable year.
    ``(b) Applicable Amount.--For purposes of this section, the 
applicable amount with respect to production from a qualifying advanced 
clean coal technology facility shall be determined as follows:
            ``(1) In the case of a facility originally placed in 
        service before 2008, if
  

------------------------------------------------------------------------
                                                  The applicable amount
                                                           is:
                                               -------------------------
  The facility design net heat rate, Btu/kWh     For 1st 5     For 2d 5
               (HHV) is equal to                  years of     years of
                                                    such         such
                                                  service      service
------------------------------------------------------------------------
Not more than 8,400...........................       $.0130       $.0115
More than 8,400 but not more than 8,550.......        .0100        .0080
More than 8,550 but not more than 8,750.......        .0075        .0060
------------------------------------------------------------------------

            ``(2) In the case of a facility originally placed in 
        service after 2007 and before 2012, if
  

------------------------------------------------------------------------
                                                  The applicable amount
                                                           is:
                                               -------------------------
  The facility design net heat rate, Btu/kWh     For 1st 5     For 2d 5
               (HHV) is equal to                  years of     years of
                                                    such         such
                                                  service      service
------------------------------------------------------------------------
Not more than 7,700...........................       $.0135       $.0110
More than 7,700 but not more than 8,125.......        .0115        .0090
More than 8,125 but not more than 8,350.......        .0090        .0080
------------------------------------------------------------------------

            ``(3) In the case of a facility originally placed in 
        service after 2011 and before 2016, if
  

------------------------------------------------------------------------
                                                  The applicable amount
                                                           is:
                                               -------------------------
  The facility design net heat rate, Btu/kWh     For 1st 5     For 2d 5
               (HHV) is equal to                  years of     years of
                                                    such         such
                                                  service      service
------------------------------------------------------------------------
Not more than 7,380...........................       $.0155       $.0135
More than 7,380 but not more than 7,720.......        .0135        .0115
------------------------------------------------------------------------

    ``(c) Inflation Adjustment Factor.--Each amount in paragraphs (1), 
(2), and (3) shall be adjusted by multiplying such amount by the 
inflation adjustment factor for the calendar year in which the amount 
is applied. If any amount as increased under the preceding sentence is 
not a multiple of 0.01 cent, such amount shall be rounded to the 
nearest multiple of 0.01 cent.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) the rules of paragraphs (3), (4), and (5) of section 
        45 shall apply,
            ``(2) the term `inflation adjustment factor' means, with 
        respect to a calendar year, a fraction the numerator of which 
        is the GDP implicit price deflator for the preceding calendar 
        year and the denominator of which is the GDP implicit price 
        deflator for the calendar year 1998, and
            ``(3) the term `GDP implicit price deflator' means the most 
        recent revision of the implicit price deflator for the gross 
        domestic product as computed by the Department of Commerce 
        before March 15 of the calendar year.''
    (b) Credit Treated as Business Credit.--Section 38(b) of the 
Internal Revenue Code of 1986 is amended by striking ``plus'' at the 
end of paragraph (11), by striking the period at the end of paragraph 
(12) and inserting ``, plus'', and by adding at the end the following:
            ``(13) the qualifying advanced clean coal technology 
        production credit determined under section 45F(a).''
    (c) Transitional Rule.--Section 39(d) of the Internal Revenue Code 
of 1986 (relating to transitional rules), as amended by section 201(d), 
is amended by adding at the end the following:
            ``(13) No carryback of certain credits before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the credits allowable under any 
        section added to this subpart by the amendments made by the 
        National Energy Security Tax Act of 2000 may be carried back to 
        a taxable year ending before the date of the enactment of such 
        Act.''
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following:

                              ``Sec. 45F. Credit for production from 
                                        qualifying advanced clean coal 
                                        technology.''
    (e) Effective Date.--The amendments made by this section shall 
apply to production after the date of the enactment of this Act.

SEC. 1043. DEBT REPAYMENT FOR THE INVESTMENT IN ADVANCED CLEAN COAL 
              TECHNOLOGY.

    (a) Allowance of Debt Repayment in Lieu of Qualifying Advanced 
Clean Coal Technology Credits.--The owner of a qualified advanced clean 
coal technology facility under sections 1041 and 1042 may elect to have 
the amount of the qualifying clean coal technology credits applied to 
the prepayment of any debt or obligations the owner has incurred under 
subchapter I, chapter 31, title 7 of the Rural Electrification Act of 
1936 (7 U.S.C. 901 et seq.) and has been selected by the owner for such 
prepayment in lieu of a credit against the owner's tax obligations 
under the Internal Revenue Code of 1986.
                                 <all>
```