I

106TH CONGRESS

2D SESSION H. R. 5316

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

SEPTEMBER 27, 2000

Mr. BRADY of Texas introduced the following bill; which was referred to the

Committee on Commerce, and in addition to the Committees on Resources, and Ways and Means, 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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Energy Independence

3 for America Act of 2000’’.

4 SEC. 2. FINDINGS AND PURPOSES.

5 (a) FINDINGS.—The Congress finds that—

6 (1) increasing dependence on foreign sources of

7 oil causes systemic harm to all sectors of the domes8 tic United States economy, threatens national secu9 rity, undermines the ability of federal, state, and

10 local units of government to provide essential serv11 ices, and jeopardizes the peace, security, and welfare

12 of the American people;

13 (2) dependence on imports of foreign oil was 46

14 percent in 1992, but has risen to more than 55 per15 cent by the beginning of 2000, and is estimated by

16 the Department of Energy to rise to 65 percent by

17 2020 unless current policies are altered;

18 (3) at the same time, despite increased energy

19 efficiencies, energy use in the United States is ex20 pected to increase 27 percent by 2020.

21 (4) the United States lacks a comprehensive na22 tional energy policy and has taken actions that limit

23 the availability and capability of the domestic energy

24 sources of oil and gas, coal, nuclear and hydro;

25 (5) a comprehensive energy strategy needs to be

26 developed to combat this trend, decrease the United
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1 States dependence on imported oil supplies and

2 strengthen our national energy security;

3 (6) the goal of this comprehensive strategy

4 must be to decrease the United States dependence

5 on foreign oil supplies to not more than 50 percent

6 by the year 2010;

7 (7) in order to meet this goal, this comprehen8 sive energy strategy needs to be multi-faceted and

9 include enhancing the use of renewable energy re10 sources (including hydro, nuclear, solar, wind, and

11 biomass), conserving energy resources (including im12 proving energy efficiencies), and increasing domestic

13 supplies of nonrenewable resources (including oil,

14 natural gas, and coal);

15 (8) however, conservation efforts and alter16 native fuels alone will not enable America to meet

17 this goal as conventional energy sources supply 96

18 percent of America’s power at this time; and

19 (9) immediate actions also need to be taken in

20 order to mitigate the effect of recent increases in oil

21 prices on the American consumer, including the poor

22 and the elderly.

23 (b) PURPOSES.—This purposes of this Act are to pro24 tect the energy security of the United States by decreasing

25 America’s dependency of foreign oil sources to not more
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1 than 50 percent by the year 2010 by enhancing the use

2 of renewable energy resources, conserving energy re3 sources (including improving energy efficiencies), and in4 creasing domestic energy supplies and to mitigate the im5 mediate effect of increases in energy prices on the Amer6 ican consumer, including the poor and the elderly.

7 TITLE I—ENERGY SECURITY AC8 TIONS REQUIRED OF THE

9 SECRETARY OF ENERGY

10 SEC. 101. ANNUAL REPORT ON UNITED STATES ENERGY

11 INDEPENDENCE.

12 (a) REPORT.—Beginning on June 15, 2001, and an13 nually thereafter, the Secretary of Energy, in consultation

14 with the Secretary of Defense and the heads of other Fed15 eral agencies, shall submit a report to the President and

16 the Congress which evaluates the progress the United

17 States has made toward obtaining the goal of not more

18 than 50 percent dependence on foreign oil sources by

19 2010. The Secretary shall adopt as interim goals, a reduc20 tion in dependence on oil imports to not more than 54

21 percent by 2005 and 52 percent by 2008.

22 (b) ALTERNATIVES.—The report shall specify what

23 specific legislation or administrative actions must be im24 plemented to meet this goal and set forth a range of op25 tions and alternatives with a benefit/cost analysis for each
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1 option or alternative together with an estimate for the con2 tribution that each option or alternative could make to re3 duce foreign oil imports. The report shall indicate, in de4 tail, options and alternatives (1) to increase the use of re5 newable domestic energy sources, including conventional

6 and non-conventional sources such as, but not limited to,

7 increased hydroelectric generation at existing Federal fa8 cilities, (2) to conserve energy resources, including improv9 ing efficiencies and decreasing consumption, and (3) to in10 crease domestic production and use of oil, natural gas, and

11 coal, including any actions that would need to be imple12 mented to provide access to, and transportation of, these

13 energy resources.

14 (c) REFINERY CAPACITY.—As part of the reports

15 submitted in 2001, 2005, and 2008, the Secretary shall

16 examine and report on the condition of the domestic refin17 ery industry and the extent of domestic storage capacity

18 for various categories of petroleum products and make

19 such recommendations as he believes will enhance domes20 tic capabilities to respond to short-term shortages of var21 ious fuels due to climate or supply interruptions.

22 SEC. 102. REPORT OF THE NATIONAL PETROLEUM COUN23 CIL.

24 The Secretary of Energy shall immediately review the

25 report of the National Petroleum Council submitted to
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1 him on December 15, 1999, and shall submit such report,

2 together with any recommendations for administrative or

3 legislative actions, to the President no later than October

4 1, 2000.

5 SEC. 103. INTERAGENCY WORK GROUP ON NATURAL GAS.

6 (a) INTERAGENCY WORK GROUP.—The Secretary of

7 Energy shall establish an Interagency Work Group on

8 Natural Gas (referred to as ‘‘Group’’ in this subsection)

9 within the National Economic Council. The Group shall

10 include representatives from each Federal agency that has

11 a significant role in the development and implementation

12 of natural gas policy, resource assessment, or technologies

13 for natural gas exploration, production, transportation,

14 and use.

15 (b) STRATEGY AND COMPREHENSIVE POLICY.—The

16 Group shall develop a strategy and comprehensive policy

17 for the use of natural gas as an essential component of

18 overall national objectives of energy security, economic

19 growth, and environmental protection. In developing the

20 strategy and policy, the Group shall solicit and consider

21 suggestions from States and local units of government, in22 dustry, and other non-Federal groups, organizations, or

23 individuals possessing information or expertise in one or

24 more areas under review by the Group. The policy shall

25 recognize the significant lead times required for the devel-
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1 opment of additional natural gas supplies and the delivery

2 infrastructure required to transport those supplies. The

3 Group shall consider, but is not limited to, issues of access

4 to and development of resources, transportation, tech5 nology development, environmental regulation and the as6 sociated economic and environmental costs of alternatives,

7 education of future workforce, financial incentives related

8 to exploration, production, transportation, development,

9 and use of natural gas.

10 (c) REPORT.—The Group shall prepare a report set11 ting forth its recommendations on a comprehensive policy

12 for the use of natural gas and the specific elements of a

13 national strategy to achieve the objectives of the policy.

14 The report shall be transmitted to the Secretary of Energy

15 within six months from the date of the enactment of this

16 Act.

17 (d) SECRETARY REVIEW.—The Secretary of Energy

18 shall review the report and, within 3 months, submit the

19 report, together with any recommendations for adminis20 trative or legislative actions, to the President and the Con21 gress.

22 (e) TRENDS.—The Group shall monitor trends for

23 the assumptions used in developing its report, including

24 the specific elements of a national strategy to achieve the

25 objectives of the comprehensive policy and shall advise the
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1 Secretary whenever it anticipates changes that might re2 quire alterations in the strategy.

3 (f) PROGRESS REPORT.—On June 1, 2002, and every

4 two years thereafter, the Group shall submit a report to

5 the President and the Congress evaluating the progress

6 that has been made in the prior two years in implementing

7 the strategy and accomplishing the objectives of the com8 prehensive policy.

9 TITLE II—AMENDMENTS TO EN10 ERGY POLICY AND CON11 SERVATION ACT AND AC12 TIONS AFFECTING THE STRA13 TEGIC PETROLEUM RESERVE

14 SEC. 201. AMENDMENTS TO TITLE I OF EPCA.

15 Title I of the Energy Policy and Conservation Act

16 (42 U.S.C. 6211–6251) is amended—

17 (1) in section 161(h) (42 U.S.C. 6241), by—

18 (A) striking ‘‘and’’ at the end of (1)(A),

19 (B) striking ‘‘,’’ and inserting ‘‘; and’’ at

20 the end of (1)(B), and

21 (C) inserting after subparagraph (B) the

22 following new subparagraph:

23 ‘‘(C) concurs in the determination of the

24 Secretary of Defense that action taken under
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1 this subsection will not impair national secu2 rity.’’, and

3 (D) striking ‘‘Reserve’’ and inserting ‘‘Re4 serve, if the Secretary finds that action taken

5 under this subsection will not have an adverse

6 effect on the domestic petroleum industry,’’ at

7 the end of (1);

8 (2) in section 166 (42 U.S.C. 6246), by striking

9 ‘‘March 31, 2000’’ and inserting ‘‘December 31,

10 2003’’; and

11 (3) in section 181 (42 U.S.C. 6251), by striking

12 ‘‘March 31, 2000’’ each place it appears and insert13 ing ‘‘December 31, 2003’’.

14 SEC. 202. AMENDMENTS TO TITLE II OF EPCA.

15 Title II of the Energy Policy and Conservation Act

16 (42 U.S.C. 6261–6285) is amended—

17 (1) in section 256(h) (42 U.S.C. 6276(h)), by

18 inserting ‘‘through 2003’’ after ‘‘1997’’; and

19 (2) in section 281 (42 U.S.C. 6285), by striking

20 ‘March 31, 2000’ each place it appears and inserting

21 ‘‘December 31, 2003’’.

22 SEC. 203. STRATEGIC PETROLEUM RESERVE STUDY AND

23 REPORT.

24 The President shall immediately establish an Inter25 agency Panel on the Strategic Petroleum Study (referred
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1 to as the ‘‘Panel’’ in this section) to study oil markets

2 and estimate the extent and frequency of fluctuations in

3 the supply and price of, and demand for crude oil in the

4 future and determine appropriate capacity of and uses for

5 the Strategic Petroleum Reserve. The Panel may rec6 ommend changes in existing authorities to provide addi7 tional flexibility for and strengthen the ability of the Stra8 tegic Petroleum Reserve to respond to energy require9 ments. The Panel shall complete its study and submit a

10 report containing its findings and any recommendations

11 to the President and the Congress within six months from

12 the date of enactment of this Act.

13 TITLE III—PROVISIONS TO PRO14 TECT CONSUMERS AND LOW

15 INCOME FAMILIES AND EN16 COURAGE ENERGY EFFI17 CIENCIES

18 SEC. 301. CHANGES IN WEATHERIZATION PROGRAM TO

19 PROTECT LOW-INCOME PERSONS.

20 (a) The matter under the heading ‘‘ENERGY CON21 SERVATION (INCLUDING TRANSFER OF FUNDS)’’ in title II

22 of the Department of the Interior and Related Agencies

23 Appropriations Act, 2000 (113 Stat. 1535, 1501A–180),

24 is amended by striking ‘‘grants:’’ and all that follows and

25 inserting ‘‘grants.’’.
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1 (b) Section 415 of the Energy Conservation and Pro2 duction Act (42 U.S.C. 6865) is amended—

3 (1) in subsection (a)(1) by striking the first

4 sentence;

5 (2) in subsection (a)(2) by—

6 (A) striking ‘‘(A)’’,

7 (B) striking ‘‘approve a State’s application

8 to waive the 40 percent requirement established

9 in paragraph (1) if the State includes in its

10 plan’’ and inserting ‘‘establish’’, and

11 (C) striking subparagraph (B);

12 (3) in subsection (c)(1) by—

13 (A) striking ‘‘paragraphs (3) and (4)’’ and

14 inserting ‘‘paragraph (3)’’,

15 (B) striking ‘‘$1600’’ and inserting

16 ‘‘$2500’’,

17 (C) striking ‘‘and’’ at the end of subpara18 graph (C),

19 (D) striking the period and inserting

20 ‘‘, and’’ in subparagraph (D), and

21 (E) inserting after subparagraph (D) the

22 following new subparagraph:

23 ‘‘(E) the cost of making heating and cool24 ing modifications, including replacement’’;

25 (4) in subsection (c)(3) by—
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1 (A) striking ‘‘1991, the $1600 per dwelling

2 unit limitation’’ and inserting ‘‘2000, the $2500

3 per dwelling unit average’’,

4 (B) striking ‘‘limitation’’ and inserting

5 ‘‘average’’ each time it appears, and

6 (C) inserting ‘‘the’’ after ‘‘beginning of’’ in

7 subparagraph (B); and

8 (5) by striking subsection (c)(4).

9 SEC. 302. SUMMER FILL AND FUEL BUDGETING PROGRAMS.

10 (a) Part C of title II of the Energy Policy and Con11 servation Act (42 U.S.C. 6211 et seq.) is amended by add12 ing at the end the following:

13 ‘‘SEC. 273. SUMMER FILL AND FUEL BUDGETING PRO14 GRAMS.

15 ‘‘(a) DEFINITIONS.—In this section:

16 ‘‘(1) BUDGET CONTRACT.—The term ‘budget

17 contract’ means a contract between a retailer and a

18 consumer under which the heating expenses of the

19 consumer are spread evenly over a period of months.

20 ‘‘(2) FIXED-PRICE CONTRACT.—The term

21 ‘fixed-price contract’ means a contract between a re22 tailer and a consumer under which the retailer

23 charges the consumer a set price for propane, ker24 osene, or heating oil without regard to market price

25 fluctuations.
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1 ‘‘(3) PRICE CAP CONTRACT.—The term ‘price

2 cap contract’ means a contract between a retailer

3 and a consumer under which the retailer charges the

4 consumer the market price for propane, kerosene, or

5 heating oil, but the cost of the propane, kerosene, or

6 heating oil may not exceed a maximum amount stat7 ed in the contract.

8 ‘‘(b) ASSISTANCE.—At the request of the chief execu9 tive officer of a State, the Secretary shall provide informa10 tion, technical assistance, and funding—

11 ‘‘(1) to develop education and outreach pro12 grams to encourage consumers to fill their storage

13 facilities for propane, kerosene, and heating oil dur14 ing the summer months; and

15 ‘‘(2) to promote the use of budget contracts,

16 price cap contracts, fixed-price contracts, and other

17 advantageous financial arrangements;

18 to avoid severe seasonal price increases for and supply

19 shortages of those products.

20 ‘‘(c) PREFERENCE.—In implementing this section,

21 the Secretary shall give preference to States that con22 tribute public funds or leverage private funds to develop

23 State summer fill and fuel budgeting programs.
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1 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There

2 are authorized to be appropriated to carry out this

3 section—

4 ‘‘(1) $25,000,000 for fiscal year 2001; and

5 ‘‘(2) such sums as are necessary for each fiscal

6 year thereafter.

7 ‘‘(e) INAPPLICABILITY OF EXPIRATION PROVISION.—

8 Section 281 does not apply to this section.’’.

9 (b) The table of contents in the first section of the

10 Energy Policy and Conservation Act (42 U.S.C. prec.

11 6201) is amended by inserting after the item relating to

12 section 272 the following:

‘‘Sec. 273. Summer fill and fuel budgeting programs.’’.

13 SEC. 303. ENERGY EFFICIENCY SCIENCE INITIATIVE.

14 There are authorized to be appropriated $25,000,000

15 for fiscal year 2001 and such sums as are necessary for

16 each fiscal year thereafter be for an Energy Efficiency

17 Science Initiative to be managed by the Assistant Sec18 retary for Energy Efficiency and Renewable Energy in

19 consultation with the Director of the Office of Science, for

20 grants to be competitively awarded and subject to peer re21 view for research relating to energy efficiency. The Sec22 retary of Energy shall submit to the Committee on Science

23 and the Committee on Appropriations of the House of

24 Representatives, and to the Committee on Energy and

25 Natural Resources and the Committee on Appropriations
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1 of the Senate, an annual report on the activities of the

2 Energy Efficiency Science Initiative, including a descrip3 tion of the process used to award the funds and an expla4 nation of how the research relates to energy efficiency.

5 SEC. 304. NORTHEAST HOME HEATING OIL RESERVE.

6 (a) AMENDMENT.—Title I of the Energy Policy and

7 Conservation Act is amended by—

8 (1) redesignating part D as part E;

9 (2) redesignating section 181 as section 191;

10 and

11 (3) inserting after part C the following new

12 part D—

13 ‘‘PART D—NORTHEAST HOME HEATING OIL

14 RESERVE

15 ‘‘ESTABLISHMENT

16 ‘‘SEC. 181. (a) Notwithstanding any other provision

17 of this Act, the Secretary may establish, maintain, and

18 operate in the Northeast, a Northeast Home Heating Oil

19 Reserve. A Reserve established under this part is not a

20 component of the Strategic Petroleum Reserve established

21 under part B of this title. A Reserve established under

22 this part shall contain no more than 2 million barrels of

23 petroleum distillate.

24 ‘‘(b) For the purposes of this part—
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1 ‘‘(1) the term ‘Northeast’ means the States of

2 Maine, New Hampshire, Vermont, Massachusetts,

3 Connecticut, Rhode Island, New York, Pennsylvania,

4 and New Jersey; and

5 ‘‘(2) the term ‘petroleum distillate’ includes

6 heating oil and diesel fuel.

7 ‘‘AUTHORITY

8 ‘‘SEC. 182. To the extent necessary or appropriate

9 to carry out this part, the Secretary may—

10 ‘‘(1) purchase, contract for, lease, or otherwise

11 acquire, in whole or in part, storage and related fa12 cilities, and storage services;

13 ‘‘(2) use, lease, maintain, sell, or otherwise dis14 pose of storage and related facilities acquired under

15 this part;

16 ‘‘(3) acquire by purchase, exchange (including

17 exchange of petroleum product from the Strategic

18 Petroleum Reserve or received as royalty from Fed19 eral lands), lease, or otherwise, petroleum distillate

20 for storage in the Northeast Home Heating Oil Re21 serve;

22 ‘‘(4) store petroleum distillate in facilities not

23 owned by the United States;

24 ‘‘(5) sell, exchange, or otherwise dispose of pe25 troleum distillate from the Reserve established under

26 this part; and
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1 ‘‘(6) notwithstanding paragraph (5), on terms

2 the Secretary considers reasonable, sell, exchange, or

3 otherwise dispose of petroleum distillate from the

4 Reserve established under this part in order to

5 maintain the quality or quantity of the petroleum

6 distillate in the Reserve or to maintain the oper7 ational capability of the Reserve.

8 ‘‘CONDITIONS FOR RELEASE; PLAN

9 ‘‘SEC. 183. (a) The Secretary may release petroleum

10 distillate from the Reserve under section 182(5) only in

11 the event of—

12 ‘‘(1) a severe energy supply disruption;

13 ‘‘(2) a severe price increase; or

14 ‘‘(3) another emergency affecting the North15 east, which the President determines to merit a re16 lease from the Reserve.

17 ‘‘(b) Within 45 days of the date of the enactment of

18 this section, the Secretary shall transmit to the President

19 and, if the President approves, to the Congress a plan

20 describing—

21 ‘‘(1) the acquisition of storage and related fa22 cilities or storage services for the Reserve;

23 ‘‘(2) the acquisition of petroleum distillate for

24 storage in the Reserve;

25 ‘‘(3) the anticipated methods of disposition of

26 petroleum distillate from the Reserve; and
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1 ‘‘(4) the estimated costs of establishment, main2 tenance, and operation of the Reserve.

3 The storage of petroleum distillate in a storage facility

4 that meets existing environmental requirements is not a

5 ‘major Federal action significantly affecting the quality of

6 the human environment’ as that term is used in section

7 102(2)(C) of the National Environmental Policy Act of

8 1969.

9 ‘‘NORTHEAST HOME HEATING OIL RESERVE ACCOUNT

10 ‘‘SEC. 184. (a) Upon a decision of the Secretary of

11 Energy to establish a Reserve under this part, the Sec12 retary of the Treasury shall establish in the Treasury of

13 the United States an account known as the ‘Northeast

14 Home Heating Oil Reserve Account’ (referred to in this

15 section as the ‘Account’).

16 ‘‘(b) The Secretary of the Treasury shall deposit in

17 the Account any amounts appropriated to the Account and

18 any receipts from the sale, exchange, or other disposition

19 of petroleum distillate from the Reserve.

20 ‘‘(c) The Secretary of Energy may obligate amounts

21 in the Account to carry out activities under this part with22 out the need for further appropriation, and amounts avail23 able to the Secretary of Energy for obligation under this

24 section shall remain available without fiscal year limita25 tion.
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1 ‘‘EXEMPTIONS

2 ‘‘SEC. 185. An action taken under this part—

3 ‘‘(1) is not subject to the rulemaking require4 ments of section 523 of this Act, section 501 of the

5 Department of Energy Organization Act, or section

6 553 of title 5, United States Code; and

7 ‘‘(2) is not subject to laws governing the Fed8 eral procurement of goods and services, including

9 the Federal Property and Administrative Services

10 Act of 1949 (including the Competition in Con11 tracting Act) and the Small Business Act.’’.

12 (b) AUTHORIZATION OF APPROPRIATIONS.—There

13 are authorized to be appropriated such sums as may be

14 necessary to carry out part D of title I of the Energy Pol15 icy and Conservation Act.

16 TITLE IV—PROVISIONS TO EN17 HANCE THE USE OF DOMES18 TIC ENERGY RESOURCES

19 Subtitle A—Hydroelectric

20 Resources

21 SEC. 401. USE OF FEDERAL FACILITIES.

22 (a) The Secretary of the Interior and the Secretary

23 of the Army shall each inventory all dams, impoundments,

24 and other facilities under their jurisdiction.
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1 (b) Based on this inventory and other information,

2 the Secretary of the Interior and Secretary of the Army

3 shall each submit a report to the Congress within six

4 months from the date of enactment of this Act. Each re5 port shall—

6 (1) Describe, in detail, each facility that is ca7 pable, with or without modification, of producing ad8 ditional hydroelectric power. For each such facility,

9 the report shall state the full potential for the facil10 ity to generate hydroelectric power, whether the fa11 cility is currently generating hydroelectric power,

12 and the costs to install, upgrade, modify, or take

13 other actions to increase the hydroelectric generating

14 capability of the facility. For each facility that cur15 rently has hydroelectric generating equipment, the

16 report shall indicate the condition of such equip17 ment, the maintenance requirements, and the sched18 ule for any improvements as well as the purposes for

19 which power is generated.

20 (2) Describe what actions are planned and un21 derway to increase the hydroelectric production from

22 facilities under his jurisdiction and shall include any

23 recommendations the Secretary deems advisable to

24 increase such production, reduce costs, and improve

25 efficiency at Federal facilities, including, but not
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1 limited to, use of lease of power privilege and con2 tracting with non-Federal entities for operation and

3 maintenance.

4 SEC. 402. EXPEDITED FERC HYDROELECTRIC LICENSING

5 PROCEDURES.

6 The Federal Energy Regulatory Commission shall

7 immediately undertake a comprehensive review of policies,

8 procedures and regulations for the licensing of hydro9 electric projects to determine how to reduce the cost and

10 time of obtaining a license. The Commission shall report

11 its findings within six months of the date of enactment

12 to the Congress, including any recommendations for legis13 lative changes.

14 Subtitle B—Nuclear Resources

15 SEC. 410. NUCLEAR GENERATION.

16 The Chairman of the Nuclear Regulatory Commis17 sion shall submit a report to the Congress within six

18 months from the date of enactment of this Act on the state

19 of nuclear power generation and production in the United

20 States and the potential for increasing nuclear generating

21 capacity and production as part of this nation’s energy

22 mix. The report shall also review the status of the reli23 censing process for civilian nuclear power plants, including

24 current and anticipated applications, and recommenda25 tions for improvements in the process, including rec-
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1 ommendations for expediting the process and ensuring

2 that relicensing is accomplished in a timely manner.

3 SEC. 411. NRC HEARING PROCEDURE.

4 Section 189(a)(1) of the Atomic Energy Act of 1954

5 (42 U.S.C. 2239(a)(1)) is amended by adding at the end

6 the following—

7 ‘‘(C) HEARINGS.—A hearing under this

8 section shall be conducted using informal adju9 dicatory procedures established under sections

10 553 and 555 of title 5, United States Code, un11 less the Commission determines that formal ad12 judicatory procedures are necessary—

13 ‘‘(i) to develop a sufficient record; or

14 ‘‘(ii) to achieve fairness.’’.

15 Subtitle C—Development of a Na16 tional Spent Nuclear Fuel Strat17 egy

18 SEC. 415. FINDINGS.

19 The Congress finds the following:

20 (1) Prior to permanent closure of the geologic

21 repository in Yucca Mountain, Congress must deter22 mine whether the spent fuel in the repository should

23 be treated as waste subject to permanent burial or

24 should be considered an energy resource that is

25 needed to meet future energy requirements.
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1 (2) Future use of nuclear energy may require

2 construction of a second geologic repository unless

3 Yucca Mountain can safely accommodate additional

4 spent fuel. Improved spent fuel strategies may in5 crease the capacity of Yucca Mountain.

6 (3) Prior to construction of any second perma7 nent geologic repository, the nation’s current plans

8 for permanent burial of spent fuel should be reevalu9 ated.

10 SEC. 416. OFFICE OF SPENT NUCLEAR FUEL RESEARCH.

11 (a) ESTABLISHMENT.—There is established an Office

12 of Spent Nuclear Fuel Research (referred to as the ‘‘Of13 fice’’ in this section) within the Office of Nuclear Energy

14 Science and Technology of the Department of Energy.

15 The Office shall be headed by the Associate Director of

16 the Office of Nuclear Energy Science and Technology (re17 ferred to in this section as the ‘‘head’’), who shall be a

18 member of the Senior Executive Service appointed by the

19 Director of the Office of Nuclear Energy Science and

20 Technology, and compensated at a rate determined by ap21 plicable law.

22 (b) OFFICE HEAD.—The head of the Office shall be

23 responsible for carrying out an integrated research, devel24 opment, and demonstration program on technologies for

25 treatment, recycling, and disposal of high-level nuclear ra-
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1 dioactive waste and spent nuclear fuel, subject to the gen2 eral supervision of the Secretary. The head of the Office

3 shall report to the Director of the Office of Nuclear En4 ergy Science and Technology. The first head of the Office

5 shall be appointed within 90 days of the date of enactment

6 of this Act.

7 (c) GRANT AND CONTRACT AUTHORITY.—In car8 rying out the Secretary’s responsibilities under this sec9 tion, the Secretary may make grants, or enter into con10 tracts, for the purposes of the research projects and activi11 ties described in subsection (d)(2).

12 (d)(1) DUTIES.—The head of the Office shall involve

13 national laboratories, universities, the commercial nuclear

14 industry, and other organizations to investigate tech15 nologies for the treatment, recycling, and disposal of spent

16 nuclear fuel and high-level radioactive waste.

17 (2) The head of the Office shall:

18 (A) develop a research plan to provide rec19 ommendations by 2015;

20 (B) identify technologies for the treatment, re21 cycling, and disposal of spent nuclear fuel and high22 level radioactive waste;

23 (C) conduct research and development activities

24 on such technologies;
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1 (D) ensure that all activities include as key ob2 jectives minimization of proliferation concerns and

3 risk to health of the general public or site workers,

4 as well as development of cost-effective technologies;

5 (E) require research on both reactor- and accel6 erator-based transmutation systems;

7 (F) require research on advanced processing

8 and separations;

9 (G) encourage that research efforts include par10 ticipation of international collaborators;

11 (H) be authorized to fund international collabo12 rators when they bring unique capabilities not avail13 able in the United States and their host country is

14 unable to provide for their support;

15 (I) ensure that research efforts with the Office

16 are coordinated with research on advance fuel cycles

17 and reactors conducted within the Office of Nuclear

18 Energy Science and Technology.

19 (e) REPORT.—The head of the Office shall annually

20 prepare and submit a report to the Congress on the activi21 ties and expenditures of the Office, including the process

22 that has been made to achieve the objectives of subsection

23 (b).
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1 Subtitle D—Coal Resources

2 SEC. 420. COAL GENERATING CAPACITY.

3 The Secretary of Energy shall examine existing coal4 fired power plants and submit a report to the Congress

5 within six months from the enactment of this Act on the

6 potential of such plants for increased generation and any

7 impediments to achieving such increase. The report shall

8 describe, in detail, options for improving the efficiency of

9 these plants. The report shall include recommendations for

10 a program of research, development, demonstration, and

11 commercial application to develop economically and envi12 ronmentally acceptable advanced technologies for current

13 electricity generation facilities using coal as the primary

14 feedstock, including commercial-scale applications of ad15 vanced clean coal technologies. The report shall also in16 clude an assessment of the costs to develop and dem17 onstrate such technologies and the time required to under18 take such development and demonstration.

19 SEC. 425. COAL LIQUEFACTION.

20 The Secretary of Energy shall provide grants for the

21 refinement and demonstration of new technologies for the

22 conversion of coal to liquids. Such grants shall be for the

23 design and construction of an indirect liquefaction plant

24 capable of production in commercial quantities. There are

25 authorized to be appropriated for the purpose of this sec-
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1 tion such sums as may be necessary through fiscal year

2 2004.

3 TITLE V—ARCTIC COASTAL

4 PLAIN DOMESTIC ENERGY SE5 CURITY ACT OF 2000

6 SEC. 501. SHORT TITLE.

7 This title may be cited as the ‘‘Arctic Coastal Plain

8 Domestic Energy Security Act of 2000’’.

9 SEC. 502. DEFINITIONS.

10 When used in this title the term—

11 (1) ‘‘Coastal Plain’’ means that area identified

12 as such in the map entitled ‘‘Arctic National Wildlife

13 Refuge’’, dated August 1980, as referenced in sec14 tion 1002(b) of the Alaska National Interest Lands

15 Conservation Act of 1980 (16 U.S.C. 3142(b)(1))

16 comprising approximately 1,549,000 acres; and

17 (2) ‘‘Secretary’’, except as otherwise provided,

18 means the Secretary of the Interior or the Sec19 retary’s designee.

20 SEC. 503. LEASING PROGRAM FOR LANDS WITHIN THE

21 COASTAL PLAIN.

22 (a) AUTHORIZATION.—The Congress hereby author23 izes and directs the Secretary, acting through the Bureau

24 of Land Management in consultation with the Fish and

25 Wildlife Service and other appropriate Federal offices and
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1 agencies, to take such actions as are necessary to establish

2 and implement a competitive oil and gas leasing program

3 that will result in an environmentally sound program for

4 the exploration, development, and production of the oil

5 and gas resources of the Coastal Plain and to administer

6 the provisions of this title through regulations, lease

7 terms, conditions, restrictions, prohibitions, stipulations,

8 and other provisions that ensure the oil and gas explo9 ration, development, and production activities on the

10 Coastal Plain will result in no significant adverse effect

11 on fish and wildlife, their habitat, subsistence resources,

12 and the environment, and shall require the application of

13 the best commercially available technology for oil and gas

14 exploration, development, and production, on all new ex15 ploration, development, and production operations, and

16 whenever practicable, on existing operations, and in a

17 manner to ensure the receipt of fair market value by the

18 public for the mineral resources to be leased.

19 (b) REPEAL.—The prohibitions and limitations con20 tained in section 1003 of the Alaska National Interest

21 Lands Conservation Act of 1980 (16 U.S.C. 3143) are

22 hereby repealed.

23 (c) COMPATIBILITY.—Congress hereby determines

24 that the oil and gas leasing program and activities author25 ized by this section in the Coastal Plain are compatible
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1 with the purposes for which the Arctic National Wildlife

2 Refuge was established, and that no further findings or

3 decisions are required to implement this determination.

4 (d) SOLE AUTHORITY.—This title shall be the sole

5 authority for leasing on the Coastal Plain: Provided, That

6 nothing in this title shall be deemed to expand or limit

7 State and local regulatory authority.

8 (e) FEDERAL LAND.—The Coastal Plain shall be

9 considered ‘‘Federal land’’ for the purposes of the Federal

10 Oil and Gas Royalty Management Act of 1982.

11 (f) SPECIAL AREAS.—The Secretary, after consulta12 tion with the State of Alaska, City of Kaktovik, and the

13 North Slope Borough, is authorized to designate up to a

14 total of 45,000 acres of the Coastal Plain as Special Areas

15 and close such areas to leasing if the Secretary determines

16 that these Special Areas are of such unique character and

17 interest so as to require special management and regu18 latory protection. The Secretary may, however, permit

19 leasing of all or portions of any Special Areas within the

20 Coastal Plain by setting lease terms that limit or condition

21 surface use and occupancy by lessees of such lands but

22 permit the use of horizontal drilling technology from sites

23 on leases located outside the designated Special Areas.

24 (g) LIMITATION ON CLOSED AREAS.—The Sec25 retary’s sole authority to close lands within the Coastal
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1 Plain to oil and gas leasing and to exploration, develop2 ment, and production is that set forth in this title.

3 (h) CONVEYANCE.—In order to maximize Federal

4 revenues by removing clouds on title of lands and clari5 fying land ownership patterns within the Coastal Plain,

6 the Secretary, notwithstanding the provisions of section

7 1302(h)(2) of the Alaska National Interest Lands Con8 servation Act (16 U.S.C. 3192(h)(2)), is authorized and

9 directed to convey (1) to the Kaktovik Inupiat Corporation

10 the surface estate of the lands described in paragraph 2

11 of the Public Land Order 6959, to the extent necessary

12 to fulfill the Corporation’s entitlement under section 12

13 of the Alaska Native Claims Settlement Act (43 U.S.C.

14 1611), and (2) to the Arctic Slope Regional Corporation

15 the subsurface estate beneath such surface estate pursu16 ant to the August 9, 1983, agreement between the Arctic

17 Slope Regional Corporation and the United States of

18 America.

19 SEC. 504. RULES AND REGULATIONS.

20 (a) PROMULGATION.—The Secretary shall prescribe

21 such rules and regulations as may be necessary to carry

22 out the purposes and provisions of this title, including

23 rules and regulations relating to protection of the fish and

24 wildlife, their habitat, subsistence resources, and the envi25 ronment of the Coastal Plain. Such rules and regulations
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1 shall be promulgated no later than fourteen months after

2 the date of enactment of this title and shall, as of their

3 effective date, apply to all operations conducted under a

4 lease issued or maintained under the provisions of this

5 title and all operations on the Coastal Plain related to the

6 leasing, exploration, development, and production of oil

7 and gas.

8 (b) REVISION OF REGULATIONS.—The Secretary

9 shall periodically review and, if appropriate, revise the

10 rules and regulations issued under subsection (a) of this

11 section to reflect any significant biological, environmental,

12 or engineering data which come to the Secretary’s atten13 tion.

14 SEC. 505. ADEQUACY OF THE DEPARTMENT OF THE INTE15 RIOR’S LEGISLATIVE ENVIRONMENTAL IM16 PACT STATEMENT.

17 The ‘‘Final Legislative Environmental Impact State18 ment’’ (April 1987) on the Coastal Plain prepared pursu19 ant to section 1002 of the Alaska National Interest Lands

20 Conservation Act of 1980 (16 U.S.C. 3142) and section

21 102(2)(C) of the National Environmental Policy Act of

22 1969 (42 U.S.C. 4332(2)(C)) is hereby found by the Con23 gress to be adequate to satisfy the legal and procedural

24 requirements of the National Environmental Policy Act of

25 1969 with respect to actions authorized to be taken by
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1 the Secretary to develop and promulgate the regulations

2 for the establishment of the leasing program authorized

3 by this title, to conduct the first lease sale and any subse4 quent lease sale authorized by this title, and to grant

5 rights-of-way and easements to carry out the purposes of

6 this title.

7 SEC. 506. LEASE SALES.

8 (a) LEASE SALES.—Lands may be leased pursuant

9 to the provisions of this title to any person qualified to

10 obtain a lease for deposits of oil and gas under the Mineral

11 Leasing Act, as amended (30 U.S.C. 181).

12 (b) PROCEDURES.—The Secretary shall, by regula13 tion, establish procedures for—

14 (1) receipt and consideration of sealed nomina15 tions for any area in the Coastal Plain for inclusion

16 in, or exclusion (as provided in subsection (c)) from,

17 a lease sale; and

18 (2) public notice of and comment on designa19 tion of areas to be included in, or excluded from, a

20 lease sale.

21 (c) LEASE SALES ON COASTAL PLAIN.—The Sec22 retary shall, by regulation, provide for lease sales of lands

23 on the Coastal Plain. When lease sales are to be held, they

24 shall occur after the nomination process provided for in

25 subsection (b) of this section. For the first lease sale, the
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1 Secretary shall offer for lease those acres receiving the

2 greatest number of nominations, but no less than two hun3 dred thousand acres and no more than three hundred

4 thousand acres shall be offered. If the total acreage nomi5 nated is less than two hundred thousand acres, the Sec6 retary shall include in such sale any other acreage which

7 he believes has the highest resource potential, but in no

8 event shall more than three hundred thousand acres of

9 the Coastal Plain be offered in such sale. With respect

10 to subsequent lease sales, the Secretary shall offer for

11 lease no less than two hundred thousand acres of the

12 Coastal Plain. The initial lease sale shall be held within

13 twenty months of the date of enactment of this title. The

14 second lease sale shall be held no later than twenty-four

15 months after the initial sale, with additional sales con16 ducted no later than twelve months thereafter so long as

17 sufficient interest in development exists to warrant, in the

18 Secretary’s judgment, the conduct of such sales.

19 SEC. 507. GRANT OF LEASES BY THE SECRETARY.

20 (a) IN GENERAL.—The Secretary is authorized to

21 grant to the highest responsible qualified bidder by sealed

22 competitive cash bonus bid any lands to be leased on the

23 Coastal Plain upon payment by the lessee of such bonus

24 as may be accepted by the Secretary and of such royalty

25 as may be fixed in the lease, which shall be not less than
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121 1 ⁄2 per centum in amount or value of the production

2 removed or sold from the lease.

3 (b) ANTITRUST REVIEW.—Following each notice of

4 a proposed lease sale and before the acceptance of bids

5 and the issuance of leases based on such bids, the Sec6 retary shall allow the Attorney General, in consultation

7 with the Federal Trade Commission, thirty days to per8 form an antitrust review of the results of such lease sale

9 on the likely effects the issuance of such leases would have

10 on competition and the Attorney General shall advise the

11 Secretary with respect to such review, including any rec12 ommendation for the nonacceptance of any bid or the im13 position of terms or conditions on any lease, as may be

14 appropriate to prevent any situation inconsistent with the

15 antitrust laws.

16 (c) SUBSEQUENT TRANSFERS.—No lease issued

17 under this title may be sold, exchanged, assigned, sublet,

18 or otherwise transferred except with the approval of the

19 Secretary. Prior to any such approval the Secretary shall

20 consult with, and give due consideration to the views of,

21 the Attorney General.

22 (d) IMMUNITY.—Nothing in this title shall be deemed

23 to convey to any person, association, corporation, or other

24 business organization immunity from civil or criminal li-
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1 ability, or to create defenses to actions, under any anti2 trust law.

3 (e) DEFINITIONS.—As used in this section, the

4 term—

5 (1) ‘‘antitrust review’’ shall be deemed an

6 ‘‘antitrust investigation’’ for the purposes of the

7 Antitrust Civil Process Act (15 U.S.C. 1311); and

8 (2) ‘‘antitrust laws’’ means those Acts set forth

9 in section 1 of the Clayton Act (15 U.S.C. 12) as

10 amended.

11 SEC. 508. LEASE TERMS AND CONDITIONS.

12 An oil or gas lease issued pursuant to this title

13 shall—

14 (1) be for a tract consisting of a compact area

15 not to exceed five thousand seven hundred sixty

16 acres, or nine surveyed or protracted sections which

17 shall be as compact in form as possible;

18 (2) be for an initial period of ten years and

19 shall be extended for so long thereafter as oil or gas

20 is produced in paying quantities from the lease or

21 unit area to which the lease is committed or for so

22 long as drilling or reworking operations, as approved

23 by the Secretary, are conducted on the lease or unit

24 area;
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1 (3) require the payment of royalty as provided

2 for in section 507 of this title;

3 (4) require that exploration activities pursuant

4 to any lease issued or maintained under this title

5 shall be conducted in accordance with an exploration

6 plan or a revision of such plan approved by the Sec7 retary;

8 (5) require that all development and production

9 pursuant to a lease issued or maintained pursuant

10 to this title shall be conducted in accordance with

11 development and production plans approved by the

12 Secretary;

13 (6) require posting of bond as required by sec14 tion 509 of this title;

15 (7) provide that the Secretary may close, on a

16 seasonal basis, portions of the Coastal Plain to ex17 ploratory drilling activities as necessary to protect

18 caribou calving areas and other species of fish and

19 wildlife;

20 (8) contain such provisions relating to rental

21 and other fees as the Secretary may prescribe at the

22 time of offering the area for lease;

23 (9) provide that the Secretary may direct or as24 sent to the suspension of operations and production

25 under any lease granted under the terms of this title
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1 in the interest of conservation of the resource or

2 where there is no available system to transport the

3 resource. If such a suspension is directed or as4 sented to by the Secretary, any payment of rental

5 prescribed by such lease shall be suspended during

6 such period of suspension of operations and produc7 tion, and the term of the lease shall be extended by

8 adding any such suspension period thereto;

9 (10) provide that whenever the owner of a non10 producing lease fails to comply with any of the pro11 visions of this Act, or of any applicable provision of

12 Federal or State environmental law, or of the lease,

13 or of any regulation issued under this title, such

14 lease may be canceled by the Secretary if such de15 fault continues for more than thirty days after mail16 ing of notice by registered letter to the lease owner

17 at the lease owner’s post office address of record;

18 (11) provide that whenever the owner of any

19 producing lease fails to comply with any of the pro20 visions of this title, or of any applicable provision of

21 Federal or State environmental law, or of the lease,

22 or of any regulation issued under this title, such

23 lease may be forfeited and canceled by any appro24 priate proceeding brought by the Secretary in any
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1 United States district court having jurisdiction

2 under the provisions of this title;

3 (12) provide that cancellation of a lease under

4 this title shall in no way release the owner of the

5 lease from the obligation to provide for reclamation

6 of the lease site;

7 (13) allow the lessee, at the discretion of the

8 Secretary, to make written relinquishment of all

9 rights under any lease issued pursuant to this title.

10 The Secretary shall accept such relinquishment by

11 the lessee of any lease issued under this title where

12 there has not been surface disturbance on the lands

13 covered by the lease;

14 (14) provide that for the purpose of conserving

15 the natural resources of any oil or gas pool, field, or

16 like area, or any part thereof, and in order to avoid

17 the unnecessary duplication of facilities, to protect

18 the environment of the Coastal Plain, and to protect

19 correlative rights, the Secretary shall require that, to

20 the greatest extent practicable, lessees unite with

21 each other in collectively adopting and operating

22 under a cooperative or unit plan of development for

23 operation of such pool, field, or like area, or any

24 part thereof, and the Secretary is also authorized

25 and directed to enter into such agreements as are
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1 necessary or appropriate for the protection of the

2 United States against drainage;

3 (15) require that the holder of a lease or leases

4 on lands within the Coastal Plain shall be fully re5 sponsible and liable for the reclamation of lands

6 within the Coastal Plain and any other Federal

7 lands adversely affected in connection with explo8 ration, development, production or transportation

9 activities on a lease within the Coastal Plain by the

10 holder of a lease or as a result of activities con11 ducted on the lease by any of the leaseholder’s sub12 contractors or agents;

13 (16) provide that the holder of a lease may not

14 delegate or convey, by contract of otherwise, the rec15 lamation responsibility and liability to another party

16 without the express written approval of the Sec17 retary;

18 (17) provide that the standard of reclamation

19 for lands required to be reclaimed under this title

20 be, as nearly as practicable, a condition capable of

21 supporting the uses which the lands were capable of

22 supporting prior to any exploration, development, or

23 production activities, or upon application by the les24 see, to a higher or better use as approved by the

25 Secretary;
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1 (18) contain the terms and conditions relating

2 to protection of fish and wildlife, their habitat, and

3 the environment, as required by section 503(a) of

4 this title;

5 (19) provide that the holder of a lease, its

6 agents, and contractors use best efforts to provide a

7 fair share, as determined by the level of obligation

8 previously agreed to in the 1974 agreement imple9 menting section 29 of the Federal Agreement and

10 Grant of Right of Way for the Operation of the

11 Trans-Alaska Pipeline, of employment and con12 tracting for Alaska Natives and Alaska Native Cor13 porations from throughout the State;

14 (20) require project agreements to the extent

15 feasible that will ensure productivity and consistency

16 recognizing a national interest in both labor stability

17 and the ability of construction labor and manage18 ment to meet the particular needs and conditions of

19 projects to be developed under leases issued pursu20 ant to this Act; and

21 (21) contain such other provisions as the Sec22 retary determines necessary to ensure compliance

23 with the provisions of this title and the regulations

24 issued under this title.
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1 SEC. 509. BONDING REQUIREMENTS TO ENSURE FINANCIAL

2 RESPONSIBILITY OF LESSEE AND AVOID FED3 ERAL LIABILITY.

4 (a) REQUIREMENT.—The Secretary shall, by rule or

5 regulation, establish such standards as may be necessary

6 to ensure that an adequate bond, surety, or other financial

7 arrangement will be established prior to the commence8 ment of surface disturbing activities on any lease, to en9 sure the complete and timely reclamation of the lease

10 tract, and the restoration of any lands or surface waters

11 adversely affected by lease operations after the abandon12 ment or cessation of oil and gas operations on the lease.

13 Such bond, surety, or financial arrangement is in addition

14 to, and not in lieu, of any bond, surety, or financial ar15 rangement required by any other regulatory authority or

16 required by any other provision of law.

17 (b) AMOUNT.—The bond, surety, or financial ar18 rangement shall be in an amount—

19 (1) to be determined by the Secretary to pro20 vide for reclamation of the lease site in accordance

21 with an approved or revised exploration or develop22 ment and production plan; plus

23 (2) set by the Secretary consistent with the

24 type of operations proposed, to provide the means

25 for rapid and effective cleanup, and to minimize

26 damages resulting from an oil spill, the escape of
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1 gas, refuse, domestic wastewater, hazardous or toxic

2 substances, or fire caused by oil and gas activities.

3 (c) ADJUSTMENT.—In the event that an approved ex4 ploration or development and production plan is revised,

5 the Secretary may adjust the amount of the bond, surety,

6 or other financial arrangement to conform to such modi7 fied plan.

8 (d) DURATION.—The responsibility and liability of

9 the lessee and its surety under the bond, surety, or other

10 financial arrangement shall continue until such time as

11 the Secretary determines that there has been compliance

12 with the terms and conditions of the lease and all applica13 ble law.

14 (e) TERMINATION.—Within sixty days after deter15 mining that there has been compliance with the terms and

16 conditions of the lease and all applicable laws, the Sec17 retary, after consultation with affected Federal and State

18 agencies, shall notify the lessee that the period of liability

19 under the bond, surety, or other financial arrangement has

20 been terminated.

21 SEC. 510. OIL AND GAS INFORMATION.

22 (a) IN GENERAL.—(1) Any lessee or permittee con23 ducting any exploration for, or development or production

24 of, oil or gas pursuant to this title shall provide the Sec25 retary access to all data and information from any lease
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1 granted pursuant to this title (including processed and

2 analyzed) obtained from such activity and shall provide

3 copies of such data and information as the Secretary may

4 request. Such data and information shall be provided in

5 accordance with regulations which the Secretary shall pre6 scribe.

7 (2) If processed and analyzed information provided

8 pursuant to paragraph (1) is provided in good faith by

9 the lessee or permittee, such lessee or permittee shall not

10 be responsible for any consequence of the use or of reliance

11 upon such processed and analyzed information.

12 (3) Whenever any data or information is provided to

13 the Secretary, pursuant to paragraph (1)—

14 (A) by a lessee or permittee, in the form and

15 manner of processing which is utilized by such lessee

16 or permittee in the normal conduct of business, the

17 Secretary shall pay the reasonable cost of reproduc18 ing such data and information; or

19 (B) by a lessee or permittee, in such other form

20 and manner of processing as the Secretary may re21 quest, the Secretary shall pay the reasonable cost of

22 processing and reproducing such data and informa23 tion.

24 (b) REGULATIONS.—The Secretary shall prescribe

25 regulations to: (1) assure that the confidentiality of privi-
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1 leged or proprietary information received by the Secretary

2 under this section will be maintained; and (2) set forth

3 the time periods and conditions which shall be applicable

4 to the release of such information.

5 SEC. 511. EXPEDITED JUDICIAL REVIEW.

6 (a) Any complaint seeking judicial review of any pro7 vision in this title, or any other action of the Secretary

8 under this title may be filed in any appropriate district

9 court of the United States, and such complaint must be

10 filed within ninety days from the date of the action being

11 challenged, or after such date if such complaint is based

12 solely on grounds arising after such ninetieth day, in

13 which case the complaint must be filed within ninety days

14 after the complainant knew or reasonably should have

15 known of the grounds for the complaint: Provided, That

16 any complaint seeking judicial review of an action of the

17 Secretary in promulgating any regulation under this title

18 may be filed only in the United States Court of Appeals

19 for the District of Columbia.

20 (b) Actions of the Secretary with respect to which re21 view could have been obtained under this section shall not

22 be subject to judicial review in any civil or criminal pro23 ceeding for enforcement.
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1 SEC. 512. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN.

2 Notwithstanding title XI of the Alaska National In3 terest Lands Conservation Act of 1980 (16 U.S.C. 3161

4 et seq.), the Secretary is authorized and directed to grant,

5 in accordance with the provisions of section 28 (c) through

6 (t) and (v) through (y) of the Mineral Leasing Act of 1920

7 (30 U.S.C. 185), rights-of-way and easements across the

8 Coastal Plain for the transportation of oil and gas under

9 such terms and conditions as may be necessary so as not

10 to result in a significant adverse effect on the fish and

11 wildlife, subsistence resources, their habitat, and the envi12 ronment of the Coastal Plain. Such terms and conditions

13 shall include requirements that facilities be sited or modi14 fied so as to avoid unnecessary duplication of roads and

15 pipelines. The regulations issued as required by section

16 504 of this title shall include provisions granting rights17 of-way and easements across the Coastal Plain.

18 SEC. 513. ENFORCEMENT OF SAFETY AND ENVIRON19 MENTAL REGULATIONS TO ENSURE COMPLI20 ANCE WITH TERMS AND CONDITIONS OF

21 LEASE.

22 (a) RESPONSIBILITY OF THE SECRETARY.—The Sec23 retary shall diligently enforce all regulations, lease terms,

24 conditions, restrictions, prohibitions, and stipulations pro25 mulgated pursuant to this title.
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1 (b) RESPONSIBILITY OF HOLDERS OF LEASE.—It

2 shall be the responsibility of any holder of a lease under

3 this title to—

4 (1) maintain all operations within such lease

5 area in compliance with regulations intended to pro6 tect persons and property on, and fish and wildlife,

7 their habitat, subsistence resources, and the environ8 ment of, the Coastal Plain; and

9 (2) allow prompt access at the site of any oper10 ations subject to regulation under this title to any

11 appropriate Federal or State inspector, and to pro12 vide such documents and records which are pertinent

13 to occupational or public health, safety, or environ14 mental protection, as may be requested.

15 (c) ON-SITE INSPECTION.—The Secretary shall pro16 mulgate regulations to provide for—

17 (1) scheduled onsite inspection by the Sec18 retary, at least twice a year, of facility on the Coast19 al Plain which is subject to any environmental or

20 safety regulation promulgated pursuant to this title

21 or conditions contained in any lease issue pursuant

22 to this title to assure compliance with such environ23 mental or safety regulations or conditions; and

24 (2) periodic onsite inspection by the Secretary

25 at least once a year without advance notice to the
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1 operator of such facility to assure compliance with

2 all environmental or safety regulations.

3 SEC. 514. NEW REVENUES.

4 Notwithstanding any other provision of law, all reve5 nues received by the Federal Government from competitive

6 bids, sales, bonuses, royalties, rents, fees, or interest de7 rived from the leasing of oil and gas within the Coastal

8 Plain shall be deposited into the Treasury of the United

9 States, solely as provided in this section. The Secretary

10 of the Treasury shall pay to the State of Alaska the same

11 percentage of such revenues as is set forth under the head12 ing ‘‘EXPLORATION OF NATIONAL PETROLEUM

13 RESERVE IN ALASKA’’ in Public Law 96–514 (94

14 Stat. 2957, 2964) semiannually to the State of Alaska,

15 on March 30 and September 30 of each year and shall

16 deposit the balance of all such revenues as miscellaneous

17 receipts in the Treasury.

18 TITLE VI—IMPROVEMENTS TO

19 FEDERAL OIL AND GAS LEASE

20 MANAGEMENT

21 SEC. 601. TITLE.

22 This title may be cited as the ‘‘Federal Oil and Gas

23 Lease Management Improvement Act of 2000’’.

24 SEC. 602. DEFINITIONS.

25 In this title—
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1 (a) APPLICATION FOR A PERMIT TO DRILL.—The

2 term ‘‘application for a permit to drill’’ means a drilling

3 plan including design, mechanical, and engineering aspects

4 for drilling a well.

5 (b) FEDERAL LAND.—

6 (1) IN GENERAL.—The term ‘‘Federal land’’

7 means all land and interests in land owned by the

8 United States that are subject to the mineral leasing

9 laws, including mineral resources or mineral estates

10 reserved to the United States in the conveyance of

11 a surface or nonmineral estate.

12 (2) EXCLUSION.—The term ‘‘Federal land’’

13 does not include—

14 (i) Indian land (as defined in section 3 of

15 the Federal Oil and Gas Royalty Management

16 Act of 1982 (30 U.S.C. 1702)); or

17 (ii) submerged land on the Outer Conti18 nental Shelf (as defined in section 2 of the

19 Outer Continental Shelf Lands Act (43 U.S.C.

20 1331)).

21 (c) OIL AND GAS CONSERVATION AUTHORITY.—The

22 term ‘‘oil and gas conservation authority’’ means the agen23 cy or agencies in each State responsible for regulating for

24 conservation purposes operations to explore for and

25 produce oil and natural gas.
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1 (d) PROJECT.—The term ‘‘project’’ means an activity

2 by a lessee, an operator, or an operating rights owner to

3 explore for, develop, produce, or transport oil or gas re4 sources.

5 (e) SECRETARY.—The term ‘‘Secretary’’ means—

6 (1) the Secretary of the Interior, with respect

7 to land under the administrative jurisdiction of the

8 Department of the Interior; and

9 (2) the Secretary of Agriculture, with respect to

10 land under the administrative jurisdiction of the De11 partment of Agriculture.

12 (f) SURFACE USE PLAN OF OPERATIONS.—The term

13 ‘‘surface use plan of operations’’ means a plan for surface

14 use, disturbance, and reclamation.

15 SEC. 603. NO PROPERTY RIGHT.

16 Nothing in this title gives a State a property right

17 or interest in any Federal lease or land.

18 Subtitle A—State Option To Regu19 late Oil and Gas Lease Oper20 ations on Federal Land

21 SEC. 610. TRANSFER OF AUTHORITY.

22 (a) NOTIFICATION.—Not before the date that is 180

23 days after the date of enactment of this Act, a State may

24 notify the Secretary of its intent to accept authority for

25 regulation of operations, as described in subparagraphs
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1 (A) through (K) of subsection (b)(2), under oil and gas

2 leases on Federal land within the State.

3 (b) TRANSFER OF AUTHORITY.—

4 (1) IN GENERAL.—Effective 180 days after the

5 Secretary receives the State’s notice, authority for

6 the regulation of oil and gas leasing operations is

7 transferred from the Secretary to the State.

8 (2) AUTHORITY INCLUDED.—The authority

9 transferred under paragraph (1) includes—

10 (A) processing and approving applications

11 for permits to drill, subject to surface use

12 agreements and other terms and conditions de13 termined by the Secretary;

14 (B) production operations;

15 (C) well testing;

16 (D) well completion;

17 (E) well spacing;

18 (F) communization;

19 (G) conversion of a producing well to a

20 water well;

21 (H) well abandonment procedures;

22 (I) inspections;

23 (J) enforcement activities; and

24 (K) site security.

25 (c) RETAINED AUTHORITY.—The Secretary shall—
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1 (1) retain authority over the issuance of leases

2 and the approval of surface use plans of operations

3 and project-level environmental analyses; and

4 (2) spend appropriated funds to ensure that

5 timely decisions are made respecting oil and gas

6 leasing, taking into consideration multiple uses of

7 Federal land, socioeconomic and environmental im8 pacts, and the results of consultations with State

9 and local government officials.

10 SEC. 611. ACTIVITY FOLLOWING TRANSFER OF AUTHORITY.

11 (a) FEDERAL AGENCIES.—Following the transfer of

12 authority, no Federal agency shall exercise the authority

13 formerly held by the Secretary as to oil and gas lease oper14 ations and related operations on Federal land.

15 (b) STATE AUTHORITY.—

16 (1) IN GENERAL.—Following the transfer of au17 thority, each State shall enforce its own oil and gas

18 conservation laws and requirements pertaining to

19 transferred oil and gas lease operations and related

20 operations with due regard to the national interest

21 in the expedited, environmentally sound development

22 of oil and gas resources in a manner consistent with

23 oil and gas conservation principles.

24 (2) APPEALS.—Following a transfer of author25 ity under section 610, an appeal of any decision
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1 made by a State oil and gas conservation authority

2 shall be made in accordance with State administra3 tive procedures.

4 (c) PENDING ENFORCEMENT ACTIONS.—The Sec5 retary may continue to enforce any pending actions re6 specting acts committed before the date on which author7 ity is transferred to a State under section 610 until those

8 proceedings are concluded.

9 (d) PENDING APPLICATIONS.—

10 (1) TRANSFER TO STATE.—All applications re11 specting oil and gas lease operations and related op12 erations on Federal land pending before the Sec13 retary on the date on which authority is transferred

14 under section 610 shall be immediately transferred

15 to the oil and gas conservation authority of the

16 State in which the lease is located.

17 (2) ACTION BY THE STATE.—The oil and gas

18 conservation authority shall act on the application in

19 accordance with State laws (including regulations)

20 and requirements.

21 Subtitle B—Use of Cost Savings

22 From State Regulation

23 SEC. 621. COMPENSATION FOR COSTS.

24 (a) IN GENERAL.—Subject to the availability of ap25 propriations, the Secretary shall compensate any State for
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1 costs incurred to carry out the authorities transferred

2 under section 610.

3 (b) PAYMENT SCHEDULE.—Payments shall be made

4 not less frequently than every quarter.

5 (c) COST BREAKDOWN REPORT.—Each State seek6 ing compensation shall report to the Secretary a cost

7 breakdown for the authorities transferred.

8 (d) LIMITATION ON AMOUNT.—

9 (1) IN GENERAL.—Compensation to a State

10 may not exceed 50 percent of the Secretary’s allo11 cated cost for oil and gas leasing activities under

12 section 35(b) of the Act of February 25, 1920 (com13 monly known as the ‘‘Mineral Leasing Act’’) (30

14 U.S.C. 191(b)) for the State for fiscal year 1997.

15 (2) ADJUSTMENT.—The Secretary shall adjust

16 the maximum level of cost compensation at least

17 once every 2 years to reflect any increases in the

18 Consumer Price Index (all items, United States city

19 average) as prepared by the Department of Labor,

20 using 1997 as the baseline year.

21 SEC. 622. EXCLUSION OF COSTS OF PREPARING PLANNING

22 DOCUMENTS AND ANALYSES.

23 Section 35 of the Act of February 25, 1920 (30

24 U.S.C. 191(b)) is amended by adding at the end the fol25 lowing:
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1 ‘‘(6) The Secretary shall not include, for the

2 purpose of calculating the deduction under para3 graph (1), costs of preparing resource management

4 planning documents and analyses for areas in which

5 mineral leasing is excluded or areas in which the pri6 mary activity under review is not mineral leasing

7 and development.’’.

8 SEC. 623. RECEIPT SHARING.

9 Section 35(b) of the Act of February 25, 1920 (30

10 U.S.C. 191(b)) is amended by striking ‘‘paid to States’’

11 and inserting ‘‘paid to States (other than States that ac12 cept a transfer of authority under section 610 of the Fed13 eral Oil and Gas Lease Management Act of 2000)’’.

14 Subtitle C—Streamlining and Cost

15 Reduction

16 SEC. 631. APPLICATIONS.

17 (a) LIMITATION ON COST RECOVERY.—Notwith18 standing sections 304 and 504 of the Federal Land Policy

19 and Management Act of 1976 (43 U.S.C. 1734, 1764) and

20 section 9701 of title 31, United State Code, the Secretary

21 shall not recover the Secretary’s costs with respect to ap22 plications and other documents relating to oil and gas

23 leases.

24 (b) COMPLETION OF PLANNING DOCUMENTS AND

25 ANALYSES.—
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1 (1) IN GENERAL.—The Secretary shall complete

2 any resource management planning documents and

3 analyses not later than 90 days after receiving any

4 offer, application, or request for which a planning

5 document or analysis is required to be prepared.

6 (2) PREPARATION BY APPLICANT OR LESSEE.—

7 If the Secretary is unable to complete the document

8 or analysis within the time prescribed by paragraph

9 (1), the Secretary shall notify the applicant or lessee

10 of the opportunity to prepare the required document

11 or analysis for the agency’s review and use in deci12 sionmaking.

13 (c) REIMBURSEMENT FOR COSTS OF NEPA OF

14 ANALYSES, DOCUMENTATION, AND STUDIES.—If—

15 (1) adequate funding to enable the Secretary to

16 timely prepare a project-level analysis required

17 under the National Environmental Policy Act of

18 1969 (42 U.S.C. 4321 et seq.) with respect to an oil

19 or gas lease is not appropriated; and

20 (2) the lessee, operator, or operating rights

21 owner voluntarily pays for the cost of the required

22 analysis, documentation, or related study;

23 the Secretary shall reimburse the lessee, operator, or oper24 ating rights owner for its costs through royalty credits at25 tributable to the lease, unit agreement, or project area.
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1 SEC. 632. TIMELY ISSUANCE OF DECISIONS.

2 (a) IN GENERAL.—The Secretary shall ensure the

3 timely issuance of Federal agency decisions respecting oil

4 and gas leasing and operations on Federal land.

5 (b) OFFER TO LEASE.—

6 (1) DEADLINE.—The Secretary shall accept or

7 reject an offer to lease not later than 90 days after

8 the filing of the offer.

9 (2) FAILURE TO MEET DEADLINE.—If an offer

10 is not acted upon within that time, the offer shall be

11 deemed to have been accepted.

12 (c) APPLICATION FOR PERMIT TO DRILL.—

13 (1) DEADLINE.—The Secretary and a State

14 that has accepted a transfer of authority under sec15 tion 610 shall approve or disapprove an application

16 for permit to drill not later than 30 days after re17 ceiving a complete application.

18 (2) FAILURE TO MEET DEADLINE.—If the ap19 plication is not acted on within the time prescribed

20 by paragraph (1), the application shall be deemed to

21 have been approved.

22 (d) SURFACE USE PLAN OF OPERATIONS.—The Sec23 retary shall approve or disapprove a surface use plan of

24 operations not later than 30 days after receipt of a com25 plete plan.

26 (e) ADMINISTRATIVE APPEALS.—
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1 (1) DEADLINE.—From the time that a Federal

2 oil and gas lessee or operator files a notice of admin3 istrative appeal of a decision or order of an officer

4 or employee of the Department of the Interior or the

5 Forest Service respecting a Federal oil and gas Fed6 eral lease, the Secretary shall have 2 years in which

7 to issue a final decision in the appeal.

8 (2) FAILURE TO MEET DEADLINE.—If no final

9 decision has been issued within the time prescribed

10 by paragraph (1), the appeal shall be deemed to

11 have been granted.

12 SEC. 633. ELIMINATION OF UNWARRANTED DENIALS AND

13 STAYS.

14 (a) IN GENERAL.—The Secretary shall ensure that

15 unwarranted denials and stays of lease issuance and un16 warranted restrictions on lease operations are eliminated

17 from the administration of oil and gas leasing on Federal

18 land.

19 (b) LAND DESIGNATED FOR MULTIPLE USE.—

20 (1) IN GENERAL.—Land designated as available

21 for multiple use under Bureau of Land Management

22 resource management plans and Forest Service leas23 ing analyses shall be available for oil and gas leasing

24 without lease stipulations more stringent than re25 strictions on surface use and operations imposed
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1 under the laws (including regulations) of the State

2 oil and gas conservation authority unless the Sec3 retary includes in the decision approving the man4 agement plan or leasing analysis a written expla5 nation why more stringent stipulations are war6 ranted.

7 (2) APPEAL.—Any decision to require a more

8 stringent stipulation shall be administratively ap9 pealable and, following a final agency decision, shall

10 be subject to judicial review.

11 (c) REJECTION OF OFFER TO LEASE.—

12 (1) IN GENERAL.—If the Secretary rejects an

13 offer to lease on the ground that the land is unavail14 able for leasing, the Secretary shall provide a writ15 ten, detailed explanation of the reasons the land is

16 unavailable for leasing.

17 (2) PREVIOUS RESOURCE MANAGEMENT DECI18 SION.—If the determination of unavailability is

19 based on a previous resource management decision,

20 the explanation shall include a careful assessment of

21 whether the reasons underlying the previous decision

22 are still persuasive.

23 (3) SEGREGATION OF AVAILABLE LAND FROM

24 UNAVAILABLE LAND.—The Secretary may not reject

25 an offer to lease land available for leasing on the
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1 ground that the offer includes land unavailable for

2 leasing, and the Secretary shall segregate available

3 land from unavailable land, on the offeror’s request

4 following notice by the Secretary, before acting on

5 the offer to lease.

6 (d) DISAPPROVAL OR REQUIRED MODIFICATION OF

7 SURFACE USE PLANS OF OPERATIONS AND APPLICATION

8 FOR PERMIT TO DRILL.—The Secretary shall provide a

9 written, detailed explanation of the reasons for dis10 approving or requiring modifications of any surface use

11 plan of operations or application for permit to drill.

12 (e) EFFECTIVENESS OF DECISION.—A decision of the

13 Secretary respecting an oil and gas lease shall be effective

14 pending administrative appeal to the appropriate office

15 within the Department of the Interior or the Department

16 of Agriculture unless that office grants a stay in response

17 to a petition satisfying the criteria for a stay established

18 by section 4.21(b) of title 43, Code of Federal Regulations

19 (or any successor regulation).

20 SEC. 634. REPORTS.

21 (a) IN GENERAL.—Not later than March 31, 2001,

22 the Secretaries shall jointly submit to the Congress a re23 port explaining the most efficient means of eliminating

24 overlapping jurisdiction, duplication of effort, and incon25 sistent policymaking and policy implementation as be-
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1 tween the Bureau of Land Management and the Forest

2 Service.

3 (b) RECOMMENDATIONS.—The report shall include

4 recommendations on statutory changes needed to imple5 ment the report’s conclusions.

6 SEC. 635. SCIENTIFIC INVENTORY OF OIL AND GAS RE7 SERVES.

8 (a) IN GENERAL.—Not later than March 31, 2001,

9 the Secretary of the Interior, in consultation with the Di10 rector of the United States Geological Survey, shall pub11 lish, through notice in the Federal Register, a science12 based national inventory of the oil and gas reserves and

13 potential resources underlying Federal land and the Outer

14 Continental Shelf.

15 (b) CONTENTS.—The inventory shall—

16 (1) indicate what percentage of the oil and gas

17 reserves and resources is currently available for leas18 ing and development; and

19 (2) specify the percentages of the reserves and

20 resources that are on—

21 (A) land that is open for leasing as of the

22 date of enactment of this Act that has never

23 been leased;
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1 (B) land that is open for leasing or devel2 opment subject to no surface occupancy stipula3 tions; and

4 (C) land that is open for leasing or devel5 opment subject to other lease stipulations that

6 have significantly impeded or prevented, or are

7 likely to significantly impede or prevent, devel8 opment; and

9 (3) indicate the percentage of oil and gas re10 sources that are not available for leasing or are

11 withdrawn from leasing.

12 (c) PUBLIC COMMENT.—

13 (1) IN GENERAL.—The Secretary of the Inte14 rior shall invite public comment on the inventory to

15 be filed not later than September 30, 2001.

16 (2) RESOURCE MANAGEMENT DECISIONS.—Spe17 cifically, the Secretary of the Interior shall invite

18 public comment on the effect of Federal resource

19 management decisions on past and future oil and

20 gas development.

21 (d) REPORT.—

22 (1) IN GENERAL.—Not later than March 31,

23 2002, the Secretary of the Interior shall submit to

24 the President of the Senate and the Speaker of the

25 House of Representatives a report comprised of the
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1 revised inventory and responses to the public com2 ments.

3 (2) CONTENTS.—The report shall specifically

4 indicate what steps the Secretaries believe are nec5 essary to increase the percentage of land open for

6 development of oil and gas resources.

7 Subtitle D—Federal Royalty

8 Certainty

9 SEC. 641. DEFINITIONS.

10 In this subtitle.—

11 (a) MARKETABLE CONDITION.—The term ‘‘market12 able condition’’ means lease production that is sufficiently

13 free from impurities and otherwise in a condition that the

14 production will be accepted by a purchaser under a sales

15 contract typical for the field or area.

16 (b) REASONABLE COMMERCIAL RATE.—

17 (1) IN GENERAL.—The term ‘‘reasonable com18 mercial rate’’ means—

19 (A) in the case of an arm’s-length con20 tract, the actual cost incurred by the lessee; or

21 (B) in the case of a non-arm’s-length

22 contract—

23 (i) the rate charged in a contract for

24 similar services in the same area between
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1 parties with opposing economic interests;

2 or

3 (ii) if there are no arm’s-length con4 tracts for similar services in the same area,

5 the just and reasonable rate for the trans6 portation service rendered by the lessee or

7 lessee’s affiliate.

8 (2) DISPUTES.—Disputes between the Sec9 retary and a lessee over what constitutes a just and

10 reasonable rate for such service shall be resolved by

11 the Federal Energy Regulatory Commission.

12 SEC. 642. AMENDMENT OF OUTER CONTINENTAL SHELF

13 LANDS ACT.

14 Section 8(b)(3) of the Outer Continental Shelf Lands

15 Act (43 U.S.C. 1337(b)(3)) is amended by striking the

16 semicolon at the end and adding the following:

17 ‘‘: Provided, That if the payment is in value or

18 amount, the royalty due in value shall be based on

19 the value of oil or gas production at the lease in

20 marketable condition, and the royalty due in amount

21 shall be based on the royalty share of production at

22 the lease; if the payment in value or amount is cal23 culated from a point away from the lease, the pay24 ment shall be adjusted for quality and location dif25 ferentials, and the lessee shall be allowed reimburse-
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1 ments at a reasonable commercial rate for transpor2 tation (including transportation to the point where

3 the production is put in marketable condition), mar4 keting, processing, and other services beyond the

5 lease through the point of sale, other disposition, or

6 delivery;’’.

7 SEC. 643. AMENDMENT OF MINERAL LEASING ACT.

8 Section 17(c) of the Act of February 25, 1920 (30

9 U.S.C. 226(c)) (commonly known as the ‘‘Mineral Leasing

10 Act’’), is amended by adding at the end the following:

11 ‘‘(3) ROYALTY DUE IN VALUE.—

12 ‘‘(A) IN GENERAL.—Royalty due in value

13 shall be based on the value of oil or gas produc14 tion at the lease in marketable condition, and

15 the royalty due in amount shall be based on the

16 royalty share of production at the lease.

17 ‘‘(B) CALCULATION OF VALUE OR AMOUNT

18 FROM A POINT AWAY FROM A LEASE.—If the

19 payment in value or amount is calculated from

20 a point away from the lease—

21 ‘‘(i) the payment shall be adjusted for

22 quality and location differentials; and

23 ‘‘(ii) the lessee shall be allowed reim24 bursements at a reasonable commercial

25 rate for transportation (including transpor-
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1 tation to the point where the production is

2 put in marketable condition), marketing,

3 processing, and other services beyond the

4 lease through the point of sale, other dis5 position, or delivery;’’.

6 SEC. 644. INDIAN LAND.

7 This subtitle shall not apply with respect to Indian

8 land.

9 Subtitle E—Royalty Reinvestment

10 in America

11 SEC. 651. ROYALTY INCENTIVE PROGRAM.

12 (a) IN GENERAL.—To encourage exploration and de13 velopment expenditures on Federal land and the Outer

14 Continental Shelf for the development of oil and gas re15 sources when the cash price of West Texas Intermediate

16 crude oil, as posted on the Dow Jones Commodities Index

17 chart is less than $18 per barrel for 90 consecutive pricing

18 days or when natural gas prices as delivered at Henry

19 Hub, Louisiana, are less than $2.30 per million British

20 thermal units for 90 consecutive days, the Secretary shall

21 allow a credit against the payment of royalties on Federal

22 oil production and gas production, respectively, in an

23 amount equal to 20 percent of the capital expenditures

24 made on exploration and development activities on Federal

25 oil and gas leases.
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1 (b) NO CREDITING AGAINST ONSHORE FEDERAL

2 ROYALTY OBLIGATIONS.—In no case shall such capital ex3 penditures made on Outer Continental Shelf leases be

4 credited against onshore Federal royalty obligations.

5 SEC. 652. MARGINAL WELL PRODUCTION INCENTIVES.

6 To enhance the economics of marginal oil and gas

7 production by increasing the ultimate recovery from mar8 ginal wells when the cash price of West Texas Inter9 mediate crude oil, as posted on the Dow Jones Commod10 ities Index Chart is less than $18 per barrel for 90 con11 secutive pricing days or when natural gas prices are deliv12 ered at Henry Hub, Louisiana, are less than $2.30 per

13 million British thermal units for 90 consecutive days, the

14 Secretary shall reduce the royalty rate as production de15 clines for—

16 (1) onshore oil wells producing less than 30

17 barrels per day;

18 (2) onshore gas wells producing less than 120

19 million British thermal units per day;

20 (3) offshore oil wells producing less than 300

21 barrels of oil per day; and

22 (4) offshore gas wells producing less than 1,200

23 million British thermal units per day.
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1 SEC. 653. SUSPENSION OF PRODUCTION ON OIL AND GAS

2 OPERATIONS.

3 (a) IN GENERAL.—Any person operating an oil well

4 under a lease issued under the Act of February 25, 1920

5 (commonly known as the ‘‘Mineral Leasing Act’’) (30

6 U.S.C. 181 et seq.) or the Mineral Leasing Act for Ac7 quired Lands (30 U.S.C. 351 et seq.) may submit a notice

8 to the Secretary of the Interior of suspension of operation

9 and production at the well.

10 (b) PRODUCTION QUANTITIES NOT A FACTOR.—A

11 notice under subsection (a) may be submitted without re12 gard to per day production quantities at the well and with13 out regard to the requirements of subsection (a) of section

14 3103.4–4 of title 43 of the Code of Federal Regulations

15 (or any successor regulation) respecting the granting of

16 such relief, except that the notice shall be submitted to

17 an office in the Department of the Interior designated by

18 the Secretary of the Interior.

19 (c) PERIOD OF RELIEF.—On submission of a notice

20 under subsection (a) for an oil well, the operator of the

21 well may suspend operation and production at the well for

22 a period beginning on the date of submission of the notice

23 and ending on the later of—

24 (1) the date that is 2 years after the date on

25 which the suspension of operation and production

26 commences; or
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1 (2) the date on which the cash price of West

2 Texas Intermediate crude oil, as posted on the Dow

3 Jones Commodities Index chart is greater than $15

4 per barrel for 90 consecutive pricing days.

5 TITLE VII—FRONTIER OIL AND

6 GAS EXPLORATION AND DE7 VELOPMENT INCENTIVES

8 SEC. 701. TITLE.

9 This title may be cited as the ‘‘Frontier Exploration

10 and Development Incentives Act of 2000’’.

11 SEC. 702. AMENDMENTS TO THE OUTER CONTINENTAL

12 SHELF LANDS ACT.

13 (a) Section 8(a)(1)(D) of the Outer Continental Shelf

14 Lands Act (43 U.S.C. 1337(a)(1)(D)) is amended by

15 striking the word ‘‘area;’’ and inserting in lieu thereof the

16 word ‘‘area,’’ and the following new text: ‘‘except in the

17 Arctic areas of Alaska, where the Secretary is authorized

to set the net profit share at 162 18 ⁄3 percent. For purposes

19 of this section, ‘Arctic areas’ means the Beaufort Sea and

20 Chukchi Sea Planning Areas of Alaska.’’.

21 (b) Section 8(a) of the Outer Continental Shelf Lands

22 Act (43 U.S.C. 1337(a)) is amended by adding a new sub23 paragraph (10) at the end thereof:

24 ‘‘(10) After an oil and gas lease is granted pur25 suant to any of the bidding systems of paragraph
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1 (1) of this subsection, the Secretary shall reduce any

2 future royalty or rental obligation of the lessee on

3 any lease issued by the Secretary (and proposed by

4 the lessee for such reduction) by an amount equal

5 to (a) 10 percent of the qualified costs of explor6 atory wells drilled or geophysical work performed on

7 any lease issued by the Secretary, whichever is

8 greater, pursuant to this Act in Arctic areas and (b)

9 an additional 10 percent of the qualified costs of any

10 such exploratory wells which are located ten or more

11 miles from another well drilled for oil and gas. For

12 purposes of this Act—‘qualified costs’ shall mean

13 the costs allocated to the exploratory well or geo14 physical work in support of an exploration program

15 pursuant to 26 U.S.C. as amended; ‘exploratory

16 well’ shall mean either an exploratory well as defined

17 by the United States Securities and Exchange Com18 mission in 17 CFR 210.4–10(a)(10), as amended,

19 or a well three or more miles from any oil or gas

20 well or a pipeline which transports oil or gas to a

21 market or terminal; ‘geophysical work’ shall mean

22 all geophysical data gathering methods used in hy23 drocarbon exploration and includes seismic, gravity,

24 magnetic, and electromagnetic measurements; and,

25 all distances shall be measured in horizontal dis-
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1 tance. When a measurement beginning or ending

2 point is a well, the measurement point shall be the

3 bottom hole location of that well.’’.

4 TITLE VIII—TAX MEASURES TO

5 ENHANCE DOMESTIC OIL AND

6 GAS PRODUCTION

7 Subtitle A—Marginal Well

8 Preservation

9 SEC. 801. SHORT TITLE; PURPOSE.

10 (a) This subtitle may be cited as the ‘‘Marginal Well

11 Preservation Act of 2000’’.

12 (b) The purpose of section 802 is to prevent the aban13 donment of marginal oil and gas wells responsible for half

14 of the domestic production of oil and gas in the United

15 States and of section 803 is to recognize that geological

16 and geophysical expenditures and delay rentals are ordi17 nary and necessary business expenses that should be de18 ducted in the year the expense is incurred.

19 SEC. 802. TAX CREDIT FOR MARGINAL DOMESTIC OIL AND

20 NATURAL GAS WELL PRODUCTION.

21 (a) Subpart D of part IV of subchapter A of chapter

22 1 of the Internal Revenue Code of 1986 (relating to busi23 ness credits) is amended by adding at the end the fol24 lowing new section:
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1 ‘‘SEC. 45D. CREDIT FOR PRODUCING OIL AND GAS FROM

2 MARGINAL WELLS.

3 ‘‘(a) GENERAL RULE.—For purposes of section 38,

4 the marginal well production credit for any taxable year

5 is an amount equal to the product of—

6 ‘‘(1) the credit amount, and

7 ‘‘(2) the qualified crude oil production and the

8 qualified natural gas production which is attrib9 utable to the taxpayer.

10 ‘‘(b) CREDIT AMOUNT.—For purposes of this

11 section—

12 ‘‘(1) IN GENERAL.—The credit amount is—

13 ‘‘(A) $3 per barrel of qualified crude oil

14 production, and

15 ‘‘(B) 50 cents per 1,000 cubic feet of

16 qualified natural gas production.

17 ‘‘(2) REDUCTION AS OIL AND GAS PRICES IN18 CREASE.—

19 ‘‘(A) IN GENERAL.—The $3 and 50 cents

20 amounts under paragraph (1) shall each be re21 duced (but not below zero) by an amount which

22 bears the same ratio to such amount (deter23 mined without regard to this paragraph) as—

24 ‘‘(i) the excess (if any) of the applica25 ble reference price over $14 ($1.56 for

26 qualified natural gas production), bears to
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1 ‘‘(ii) $3 ($0.33 for qualified natural

2 gas production).

3 The applicable reference price for a taxable

4 year is the reference price for the calendar year

5 preceding the calendar year in which the tax6 able year begins.

7 ‘‘(B) INFLATION ADJUSTMENT.—In the

8 case of any taxable year beginning in a calendar

9 year after 2000, each of the dollar amounts

10 contained in subparagraph (A) shall be in11 creased to an amount equal to such dollar

12 amount multiplied by the inflation adjustment

13 factor for such calendar year (determined under

14 section 43(b)(3)(B) by substituting ‘1999’ for

15 ‘1990’).

16 ‘‘(C) REFERENCE PRICE.—For purposes of

17 this paragraph, the term ‘reference price’

18 means, with respect to any calendar year—

19 ‘‘(i) in the case of qualified crude oil

20 production, the reference price determined

21 under section 29(d)(2)(C), and

22 ‘‘(ii) in the case of qualified natural

23 gas production, the Secretary’s estimate of

24 the annual average wellhead price per
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1 1,000 cubic feet for all domestic natural

2 gas.

3 ‘‘(c) QUALIFIED CRUDE OIL AND NATURAL GAS

4 PRODUCTION.—For purposes of this section—

5 ‘‘(1) IN GENERAL.—The terms ‘qualified crude

6 oil production’ and ‘qualified natural gas production’

7 mean domestic crude oil or natural gas which is pro8 duced from a marginal well.

9 ‘‘(2) LIMITATION ON AMOUNT OF PRODUCTION

10 WHICH MAY QUALIFY.—

11 ‘‘(A) IN GENERAL.—Crude oil or natural

12 gas produced during any taxable year from any

13 well shall not be treated as qualified crude oil

14 production or qualified natural gas production

15 to the extent production from the well during

16 the taxable year exceeds 1,095 barrels or barrel

17 equivalents.

18 ‘‘(B) PROPORTIONATE REDUCTIONS.—

19 ‘‘(i) SHORT TAXABLE YEARS.—In the

20 case of a short taxable year, the limitations

21 under this paragraph shall be proportion22 ately reduced to reflect the ratio which the

23 number of days in such taxable year bears

24 to 365.
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1 ‘‘(ii) WELLS NOT IN PRODUCTION EN2 TIRE YEAR.—In the case of a well which is

3 not capable of production during each day

4 of a taxable year, the limitations under

5 this paragraph applicable to the well shall

6 be proportionately reduced to reflect the

7 ratio which the number of days of produc8 tion bears to the total number of days in

9 the taxable year.

10 ‘‘(3) DEFINITIONS.—

11 ‘‘(A) MARGINAL WELL.—The term ‘mar12 ginal well’ means a domestic well—

13 ‘‘(i) the production from which during

14 the taxable year is treated as marginal

15 production under section 613A(c)(6), or

16 ‘‘(ii) which, during the taxable year—

17 ‘‘(I) has average daily production

18 of not more than 25 barrel equiva19 lents, and

20 ‘‘(II) produces water at a rate

21 not less than 95 percent of total well

22 effluent.

23 ‘‘(B) CRUDE OIL, ETC.—The terms ‘crude

24 oil’, ‘natural gas’, ‘domestic’, and ‘barrel’ have
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1 the meanings given such terms by section

2 613A(e).

3 ‘‘(C) BARREL EQUIVALENT.—The term

4 ‘barrel equivalent’ means, with respect to nat5 ural gas, a conversion ratio of 6,000 cubic feet

6 of natural gas to 1 barrel of crude oil.

7 ‘‘(d) OTHER RULES.—

8 ‘‘(1) PRODUCTION ATTRIBUTABLE TO THE TAX9 PAYER.—In the case of a marginal well in which

10 there is more than one owner of operating interests

11 in the well and the crude oil or natural gas produc12 tion exceeds the limitation under subsection (c)(2),

13 qualifying crude oil production or qualifying natural

14 gas production attributable to the taxpayer shall be

15 determined on the basis of the ratio which tax16 payer’s revenue interest in the production bears to

17 the aggregate to the revenue interests of all oper18 ating interest owners in the production.

19 ‘‘(2) OPERATING INTEREST REQUIRED.—Any

20 credit under this section may be claimed only on

21 production which is attributable to the holder of an

22 operating interest.

23 ‘‘(3) PRODUCTION FROM NONCONVENTIONAL

24 SOURCES EXCLUDED.—In the case of production

25 from a marginal well which is eligible for the credit
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1 allowed under section 29 for the taxable year, no

2 credit shall be allowable under this section unless

3 the taxpayer elects not to claim credit under section

4 29 with respect to the well.’’.

5 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec6 tion 38(b) of such Code is amended by striking ‘‘plus’’

7 at the end of paragraph (11), by striking the period at

8 the end of paragraph (12) and inserting ‘‘, plus’’, and by

9 adding at the end of the following new paragraph:

10 ‘‘(13) the marginal oil and gas well production

11 credit determined under section 45D(a).’’.

12 (c) CREDIT ALLOWED AGAINST REGULAR AND MIN13 IMUM TAX.—

14 (1) IN GENERAL.—Subsection (c) of section 38

15 of such Code (relating to limitation based on amount

16 of tax) is amended by redesignating paragraph (3)

17 as paragraph (4) and by inserting after paragraph

18 (2) the following new paragraph:

19 ‘‘(3) SPECIAL RULES FOR MARGINAL OIL AND

20 GAS WELL PRODUCTION CREDIT.—

21 ‘‘(A) IN GENERAL.—In the case of the

22 marginal oil and gas well production credit—

23 ‘‘(i) this section and section 39 shall

24 be applied separately with respect to the

25 credit, and
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1 ‘‘(ii) in applying paragraph (1) to the

2 credit—

3 ‘‘(I) subparagraphs (A) and (B)

4 thereof shall not apply, and

5 ‘‘(II) the limitation under para6 graph (1) (as modified by subclause

7 (I)) shall be reduced by the credit al8 lowed under subsection (a) for the

9 taxable year (other than the marginal

10 oil and gas well production credit).

11 ‘‘(B) MARGINAL OIL AND GAS WELL PRO12 DUCTION CREDIT.—For purposes of this sub13 section, the term ‘marginal oil and gas well pro14 duction credit’ means the credit allowable under

15 subsection (a) by reason of section 45D(a).’’.

16 (2) CONFORMING AMENDMENT.—Subclause (II)

17 of section 38(c)(2)(A)(ii) of such Code is amended

18 by inserting ‘‘or the marginal oil and gas well pro19 duction credit’’ after ‘‘employment credit’’.

20 (d) CARRYBACK.—Subsection (a) of section 39 of

21 such Code (relating to carryback and carryforward of un22 used credits generally) is amended by adding at the end

23 the following new paragraph:
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1 ‘‘(3) 10-YEAR CARRYBACK FOR MARGINAL OIL

2 AND GAS WELL PRODUCTION CREDIT.—In the case

3 of the marginal oil and gas well production credit—

4 ‘‘(A) this section shall be applied sepa5 rately from the business credit (other than the

6 marginal oil and gas well production credit),

7 ‘‘(B) paragraph (1) shall be applied by

8 substituting ‘10 taxable year’ for ‘1 taxable

9 year’ in subparagraph (A) thereof, and

10 ‘‘(C) paragraph (2) shall be applied—

11 ‘‘(i) by substituting ‘31 taxable years’

12 for ‘21 taxable years’ in subparagraph (A)

13 thereof, and

14 ‘‘(ii) by substituting ‘30 taxable years’

15 for ‘20 taxable years’ in subparagraph (B)

16 thereof.’’.

17 (e) COORDINATION WITH SECTION 29.—Section

18 29(a) of such Code is amended by striking ‘‘There’’ and

19 inserting ‘‘At the election of the taxpayer, there.’’

20 (f) CLERICAL AMENDMENT—The table of sections

21 for subpart D of part IV of subchapter A of chapter 1

22 of such Code is amended by adding at the end the fol23 lowing item:

‘‘Sec. 45D. Credit for producting oil and gas from marginal

wells.’’
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1 (g) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to production in taxable years be3 ginning after December 31, 1999.

4 SEC. 803. ELECTION TO EXPENSE GEOLOGICAL AND GEO5 PHYSICAL EXPENDITURES AND DELAY RENT6 AL PAYMENTS.

7 (a) Section 263 of the Internal Revenue Code of 1986

8 (relating to capital expenditures) is amended by adding

9 at the end the following new subsection:

10 ‘‘(j) GEOLOGICAL AND GEOPHYSICAL EXPENDI11 TURES FOR OIL AND WELLS.—Notwithstanding sub12 section (a), a taxpayer may elect to treat geological and

13 geophysical expenses incurred in connection with the ex14 ploration for, or development of, oil or gas as expenses

15 which are not chargeable to capital account. Any expenses

16 so treated shall be allowed as a deduction in the taxable

17 year in which paid or incurred.’’.

18 (b) Section 263A(c)(3) of such Code is amended by

19 inserting ‘‘263(j),’’ after ‘‘263(i),’’.

20 (c)(1) The amendments made by subsections (a) and

21 (b) shall apply to expenses paid or incurred after the date

22 of the enactment of this Act.

23 (2) In the case of any expenses described in section

24 263(j) of the Internal Revenue Code of 1986, as added

25 by subsections (a) and (b), which were paid or incurred
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1 on or before the date of the enactment of this Act, the

2 taxpayer may elect, at such time and in such manner as

3 the Secretary of the Treasury may prescribe, to amortize

4 the suspended portion of such expenses over the 36-month

5 period beginning with the month in which the date of the

6 enactment of this Act occurs. For purposes of this para7 graph, the suspended portion of any expense is that por8 tion of such expense which, as of the first day of the 36-

9 month period, has not been included in the cost of a prop10 erty or otherwise deducted.

11 (d) Section 263 of such Code (relating to capital ex12 penditures), as amended by subsection (b), is amended by

13 adding at the end the following new subsection:

14 ‘‘(k) DELAY RENTAL PAYMENTS FOR DOMESTIC OIL

15 AND GAS WELLS.—

16 ‘‘(1) IN GENERAL.—Notwithstanding subsection

17 (a), a taxpayer may elect to treat delay rental pay18 ments incurred in connection with the development

19 of oil or gas within the United States (as defined in

20 section 638) as payments which are not chargeable

21 to capital account. Any payments so treated shall be

22 allowed as a deduction in the taxable year in which

23 paid or incurred.

24 ‘‘(2) DELAY RENTAL PAYMENTS.—For purposes

25 of paragraph (1), the term ‘delay rental payment’
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1 means an amount paid for the privilege of deferring

2 the drilling of an oil or gas well under an oil or gas

3 lease.’’.

4 Subtitle B—Independent Oil and

5 Gas Producers

6 SEC. 811. 5-YEAR NET OPERATING LOSS CARRYBACK FOR

7 LOSSES ATTRIBUTABLE TO OPERATING MIN8 ERAL INTERESTS OF INDEPENDENT OIL AND

9 GAS PRODUCERS.

10 (a) Paragraph (1) of section 172(b) of the Internal

11 Revenue Code of 1986 (relating to years to which loss may

12 be carried) is amended by adding at the end the following

13 new subparagraph:

14 ‘‘(H) LOSSES ON OPERATING MINERAL IN15 TERESTS OF INDEPENDENT OIL AND GAS PRO16 DUCERS.—In the case of a taxpayer—

17 ‘‘(i) which has an eligible oil and gas

18 loss (as defined in subsection (j)) for a tax19 able year, and

20 ‘‘(ii) which is not an integrated oil

21 company (as defined in section 291(b)(4)),

22 such eligible oil and gas loss shall be a net

23 operating loss carryback to each of the 5

24 taxable years preceding the taxable year of

25 such loss.’’.
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1 (b) ELIGIBLE OIL AND GAS LOSS.—Section 172 of

2 such Code is amended by redesignating subsection (j) as

3 subsection (k) and by inserting after subsection (i) the fol4 lowing new subsection:

5 ‘‘(j) ELIGIBLE OIL AND GAS LOSS.—For purposes of

6 this section—

7 ‘‘(1) IN GENERAL.—The term ‘eligible oil and

8 gas loss’ means the lesser of—

9 ‘‘(A) the amount which would be the net

10 operating loss for the taxable year if only in11 come and deductions attributable to operating

12 mineral interests (as defined in section 614(d))

13 in oil and gas wells are taken into account, or

14 ‘‘(B) the amount of the net operating loss

15 for such taxable year.

16 ‘‘(2) COORDINATION WITH SUBSECTION

17 (b)(2).—For purposes of applying subsection (b)(2),

18 an eligible oil and gas loss for any taxable year shall

19 be treated in a manner similar to the manner in

20 which a specified liability loss is treated.

21 ‘‘(3) ELECTION.—Any taxpayer entitled to a 5-

22 year carryback under subsection (b)(1)(H) from any

23 loss year may elect to have the carryback period

24 with respect to such loss year determined without re25 gard to subsection (b)(1)(H).’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to net operating losses for taxable

3 years beginning after December 31, 1998.

4 SEC. 812. TEMPORARY SUSPENSION OF LIMITATION BASED

5 ON 65 PERCENT OF TAXABLE INCOME.

6 (a) IN GENERAL.—Subsection (d) of section 613A of

7 the Internal Revenue Code of 1986 (relating to limitation

8 on percentage depletion in case of oil and gas wells) is

9 amended by adding at the end the following new para10 graph:

11 ‘‘(6) TEMPORARY SUSPENSION OF TAXABLE IN12 COME LIMIT.—Paragraph (1) shall not apply to tax13 able years beginning after December 31, 1998, and

14 before January 1, 2005, including with respect to

15 amounts carried under the second sentence of para16 graph (1) to such taxable years.’’.

17 (b) EFFECTIVE DATE.—The amendment made by

18 this section shall apply to taxable years beginning after

19 December 31, 1998.
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1 TITLE IX—TAX MEASURES TO

2 ENHANCE THE USE OF RE3 NEWABLE ENERGY SOURCES,

4 IMPROVE ENERGY EFFI5 CIENCIES, PROTECT CON6 SUMERS AND CONVERSION

7 TO CLEAN BURNING FUELS

8 SEC. 901. CREDIT FOR ELECTRICITY PRODUCED FROM RE9 NEWABLE RESOURCES.

10 (a) EXTENSION AND MODIFICATION OF PLACED-IN11 SERVICE RULES.—Paragraph (3) of section 45(c) of the

12 Internal Revenue Code of 1986 is amended to read as fol13 lows:

14 ‘‘(3) QUALIFIED FACILITY.—

15 ‘‘(A) WIND FACILITIES.—In the case of a

16 facility using wind to produce electricity, the

17 term ‘qualified facility’ means any facility

18 owned by the taxpayer which is originally

19 placed in service after December 31, 1993, and

20 before July 1, 2004.

21 ‘‘(B) BIOMASS FACILITIES.—In the case of

22 a facility using biomass to produce electricity,

23 the term ‘qualified facility’ means, with respect

24 to any month, any facility owned, leased, or op25 erated by the taxpayer which is originally
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1 placed in service before July 1, 2004, if, for

2 such month—

3 ‘‘(i) biomass comprises not less than

4 75 percent (on a Btu basis) of the average

5 monthly fuel input of the facility for the

6 taxable year which includes such month, or

7 ‘‘(ii) in the case of a facility prin8 cipally using coal to produce electricity,

9 biomass comprises not more than 25 per10 cent (on a Btu basis) of the average

11 monthly fuel input of the facility for the

12 taxable year which includes such month.

13 ‘‘(C) SPECIAL RULES.—

14 ‘‘(i) in the case of a qualified facility

15 described in paragraph (B)(i)—

16 ‘‘(I) the 10-year period referred

17 to in subsection (a) shall be treated as

18 beginning no earlier than the date of

19 the enactment of this paragraph, and

20 ‘‘(II) subsection (b)(3) shall not

21 apply to any such facility originally

22 placed in service before January 1,

23 1997.

24 ‘‘(ii) in the case of a qualified facility

25 described in subparagraph (B)(ii)—
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1 ‘‘(I) the 10-year period referred

2 to in subsection (a) shall be treated as

3 beginning no earlier than the date of

4 the enactment of this paragraph, and

5 ‘‘(II) the amount of the credit

6 determined under subsection (a) with

7 respect to any project for any taxable

8 year shall be adjusted by multiplying

9 such amount (determined without re10 gard to this clause) by 0.59.’’.

11 (b) CREDIT NOT TO APPLY TO ELECTRICITY SOLD

12 TO UTILITIES UNDER CERTAIN CONTRACTS.—Section

13 45(b) of such Code (relating to limitations and adjust14 ments) is amended by adding at the end the following:

15 ‘‘(4) CREDIT NOT TO APPLY TO ELECTRICITY

16 SOLD TO UTILITIES UNDER CERTAIN CONTRACTS.—

17 ‘‘(A) IN GENERAL.—The credit determined

18 under subsection (a) shall not apply to

19 electricity—

20 ‘‘(i) produced at a qualified facility

21 placed in service by the taxpayer after

22 June 30, 1999, and

23 ‘‘(ii) sold to a utility pursuant to a

24 contract originally entered into before Jan-
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1 uary 1, 1987 (whether or not amended or

2 restated after that date).

3 ‘‘(B) EXCEPTION.—Subparagraph (A)

4 shall not apply if—

5 ‘‘(i) the prices for energy and capacity

6 from such facility are established pursuant

7 to an amendment to the contract referred

8 to in subparagraph (A)(ii);

9 ‘‘(ii) such amendment provides that

10 the prices set forth in the contract which

11 exceed avoided cost prices determined at

12 the time of delivery shall apply only to an13 nual quantities of electricity (prorated for

14 partial years) which do not exceed the

15 greater of—

16 ‘‘(I) the average annual quantity

17 of electricity sold to the utility under

18 the contract during calendar years

19 1994, 1995, 1996, 1997, and 1998,

20 or

21 ‘‘(II) the estimate of the annual

22 electricity production set forth in the

23 contract, or, if there is no such esti24 mate, the greatest annual quantity of

25 electricity sold to the utility under the
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1 contract in any of the calendar years

2 1996, 1997, or 1998; and

3 ‘‘(iii) such amendment provides that

4 energy and capacity in excess of the limita5 tion in clause (ii) may be—

6 ‘‘(I) sold to the utility only at

7 prices that do not exceed avoided cost

8 prices determined at the time of deliv9 ery, or

10 ‘‘(II) sold to a third party subject

11 to a mutually agreed upon advance

12 notice to the utility.

13 For purposes of this subparagraph, avoid14 ed cost prices shall be determined as pro15 vided for in 18 CFR 292.304(d)(1) or any

16 successor regulation.’’.

17 (c) QUALIFIED FACILITIES INCLUDE ALL BIOMASS

18 FACILITIES.—

19 (1) IN GENERAL.—Subparagraph (B) of section

20 45(c)(1) of such Code (defining qualified energy re21 sources) is amended to read as follows:

22 ‘‘(B) biomass.’’.

23 (2) BIOMASS DEFINED.—Paragraph (2) of sec24 tion 45(c) of such Code (relating to definitions) is

25 amended to read as follows:
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1 ‘‘(2) BIOMASS.—The term ‘biomass’ means—

2 ‘‘(A) any organic material from a plant

3 which is planted exclusively for purposes of

4 being used at a qualified facility to produce

5 electricity, or

6 ‘‘(B) any solid, nonhazardous, cellulosic

7 waste material which is segregated from other

8 waste materials and which is derived from—

9 ‘‘(i) any of the following forest-related

10 resources: mill residues, precommercial

11 thinnings, slash, and brush, but not includ12 ing old-growth timber,

13 ‘‘(ii) poultry waste,

14 ‘‘(iii) urban sources, including waste

15 pallets, crates, and dunnage, manufac16 turing and construction wood wastes, and

17 landscape or right-of-way trimmings, but

18 not including unsegregated municipal solid

19 waste (garbage) or paper that is commonly

20 recycled, or

21 ‘‘(iv) agriculture sources, including or22 chard tree crops, vineyard, grain, legumes,

23 sugar, and other crop by-products or resi24 dues.’’.
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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to electricity produced after the

3 date of the enactment of this Act.

4 SEC. 902. CERTAIN AMOUNTS RECEIVED BY ELECTRIC EN5 ERGY, GAS, OR STEAM UTILITIES EXCLUDED

6 FROM GROSS INCOME AS CONTRIBUTIONS TO

7 CAPITAL.

8 (a) Subsection (c) of section 118 of the Internal Rev9 enue Code of 1986 (relating to special rules for water and

10 sewerage disposal utilities) is amended—

11 (1) in the heading, by striking, ‘‘WATER AND

12 SEWERAGE DISPOSAL’’ and inserting ‘‘CER13 TAIN’’,

14 (2) in paragraph (1)—

15 (A) in the matter preceding paragraph (1),

16 by striking ‘‘water or’’ and inserting ‘‘electric

17 energy, gas (through a local distribution system

18 or transportation by pipeline), steam, water,

19 or’’ and

20 (B) in subparagraph (B), by striking

21 ‘‘water or’’ and inserting ‘‘electric energy, gas,

22 steam, water, or’’,

23 (3) in paragraph (2)(A)(ii), by striking ‘‘water

24 or’’ and inserting ‘‘electric energy, gas, steam,

25 water, or’’, and
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1 (4) in paragraph (3)—

2 (A) in subparagraph (A), by inserting

3 ‘‘such term shall include amounts paid as cus4 tomer connection fees (including amounts paid

5 to connect the customer’s line to an electric

6 line, a gas main, a steam line, or a main water

7 or sewer line) and’’ after ‘‘except that’’, and

8 (B) in subparagraph (C), by striking

9 ‘‘water or’’ and inserting ‘‘electric energy, gas,

10 steam, water, or’’.

11 (b) The amendments made by subsection (a) shall

12 apply to amounts received after the date of the enactment

13 of this Act.

14 SEC. 903. EXTENSION OF CREDIT FOR ELECTRICITY PRO15 DUCED FROM STEEL COGENERATION.

16 (a) EXTENSION OF CREDIT FOR COKE PRODUCTION

17 AND STEEL MANUFACTURING FACILITIES.—Section

18 45(c)(1) of the Internal Revenue Code of 1986 (defining

19 qualified energy resources) is amended by striking ‘‘and’’

20 at the end of the next to last subparagraph, by striking

21 the period at the end of the last subparagraph and insert22 ing ‘‘, and’’, and by adding at the end the following new

23 subparagraph:

24 ‘‘(D) steel cogeneration.’’
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1 (b) STEEL COGENERATION.—Section 45(c) of such

2 Code is amended by adding at the end the following:

3 ‘‘(5) STEEL COGENERATION.—The term ‘steel

4 cogeneration’ means the production of steam or

5 other form of thermal energy of at least 20 percent

6 of total production and the production of electricity

7 or mechanical energy (or both) of at least 20 percent

8 of total production (meaning production from all

9 waste sources in subparagraphs (A), (B), and (C)

10 from the entire facility that produces coke, iron ore,

11 iron, or steel), provided that the cogeneration meets

12 any regulatory energy-efficiency standards estab13 lished by the Secretary, and only to the extent that

14 such energy is produced from—

15 ‘‘(A) gases or heat generated during the

16 production of coke,

17 ‘‘(B) blast furnace gases or heat generated

18 during the production of iron ore or iron, or

19 ‘‘(C) waste gases or heat generated from

20 the manufacture of steel that uses at least 20

21 percent recycled material.’’.

22 (c) MODIFICATION OF PLACED IN SERVICE

23 RULES FOR STEEL COGENERATION FACILITIES.—

24 Section 45(c)(3) of such Code (defining qualified fa-
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1 cility) is amended by adding at the end the fol2 lowing:

3 (D) STEEL COGENERATION FACILITIES.—

4 In the case of a facility using steel cogeneration

5 to produce electricity, the term ‘qualified facil6 ity’ means any facility permitted to operate

7 under the environmental requirements of the

8 Clean Air Act Amendments of 1990 which is

9 owned by the taxpayer and originally placed in

10 service after December 31, 1999, and before

11 January 1, 2005. Such a facility may be treated

12 as originally placed in service when such facility

13 was last upgraded to increase efficiency or gen14 eration capability. However, no facility shall be

15 allowed a credit for more than 10 years of pro16 duction.’’.

17 (d) CONFORMING AMENDMENTS.—

18 (1) The heading for section 45 of such Code is

19 amended by inserting ‘‘and waste energy’’ after ‘‘re20 newable’’.

21 (2) The item relating to section 45 in the table

22 of sections subpart D of part IV of subchapter A of

23 chapter 1 of such Code is amended by inserting

24 ‘‘and waste energy’’ after ‘‘renewable’’.
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1 (e) EFFECTIVE DATE.—The amendments made by

2 this section shall take effect for taxable years beginning

3 after December 31, 2001, and before January 1, 2005.

4 SEC. 904. FULL EXPENSING OF HOME HEATING OIL STOR5 AGE FACILITIES.

6 (a) IN GENERAL.—Section 179(b) of the Internal

7 Revenue Code of 1986 (relating to limitations) is amended

8 by adding at the end of the following:

9 ‘‘(5) FULL EXPENSING OF HOME HEATING OIL

10 STORAGE FACILITIES.—Paragraphs (1) and (2) shall

11 not apply to section 179 property which is any stor12 age facility (not including a building or its structural

13 components) used in connection with the distribution

14 of home heating oil.’’.

15 (b) EFFECTIVE DATE.—The amendment made by

16 this section shall apply to property placed in service in

17 taxable years beginning after the date of the enactment

18 of this Act.’’

19 SEC. 905. RESIDENTIAL SOLAR ENERGY TAX CREDIT.

20 (a) IN GENERAL.—Subpart A of part IV of sub21 chapter A of chapter 1 of the Internal Revenue Code of

22 1986 (relating to nonrefundable personal credits) is

23 amended by inserting after section 25A the following new

24 section:
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1 ‘‘SEC. 25B. RESIDENTIAL SOLAR ENERGY PROPERTY.

2 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in3 dividual, there shall be allowed as a credit against the tax

4 imposed by this chapter for the taxable year an amount

5 equal to the sum of—

6 ‘‘(1) 15 percent of the qualified photovoltaic

7 property expenditures made by the taxpayer during

8 such year, and

9 ‘‘(2) 15 percent of the qualified solar water

10 heating property expenditures made by the taxpayer

11 during the taxable year.

12 ‘‘(b) LIMITATIONS.—

13 ‘‘(1) MAXIMUM CREDIT.—The credit allowed

14 under subsection (a)(2) shall not exceed $2,000 for

15 each system of solar energy property.

16 ‘‘(2) TYPE OF PROPERTY.—No expenditure may

17 be taken into account under this section unless such

18 expenditure is made by the taxpayer for property in19 stalled on or in connection with a dwelling unit

20 which is located in the United States and which is

21 used as a residence.

22 ‘‘(3) SAFETY CERTIFICATIONS.—No credit shall

23 be allowed under this section for an item of property

24 unless—

25 ‘‘(A) in the case of solar water heating

26 equipment, such equipment is certified for per-
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1 formance and safety by the non-profit Solar

2 Rating Certification Corporation or a com3 parable entity endorsed by the government of

4 the State in which such property is installed,

5 and

6 ‘‘(B) in the case of a photovoltaic system,

7 such system meets appropriate fire and electric

8 code requirements.

9 ‘‘(c) DEFINITIONS.—For purposes of this section—

10 ‘‘(1) QUALIFIED SOLAR WATER HEATING PROP11 ERTY EXPENDITURE.—The term ‘qualified solar

12 water heating property expenditure’ means an ex13 penditure for property that uses solar energy to heat

14 water for use in a dwelling unit with respect to

15 which a majority of the energy is derived from the

16 sun.

17 ‘‘(2) QUALIFIED PHOTOVOLTAIC PROPERTY EX18 PENDITURE.—The term ‘qualified photovoltaic prop19 erty expenditure’ means an expenditure for property

20 that uses solar energy to generate electricity for use

21 in a dwelling unit.

22 ‘‘(3) SOLAR PANELS.—No expenditure relating

23 to a solar panel or other property installed as a roof

24 (or portion thereof) shall fail to be treated as prop25 erty described in paragraph (1) or (2) solely because
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1 it constitutes a structural component of the struc2 ture on which it is installed.

3 ‘‘(4) LABOR COSTS.—Expenditures for labor

4 costs properly allocable to the onsite preparation, as5 sembly, or original installation of the property de6 scribed in paragraph (1) or (2) and for piping or

7 wiring to interconnect such property to the dwelling

8 unit shall be taken into account for purposes of this

9 section.

10 ‘‘(5) SWIMMING POOLS, ETC., USED AS STOR11 AGE MEDIUM.—Expenditures which are properly al12 locable to a swimming pool, hot tub, or any other

13 energy storage medium which has a function other

14 than the function of such storage shall not be taken

15 into account for purposes of this section.

16 ‘‘(d) SPECIAL RULES.—For purposes of this

17 section—

18 ‘‘(1) DOLLAR AMOUNTS IN CASE OF JOINT OC19 CUPANCY.—In the case of any dwelling unit which is

20 jointly occupied and used during any calendar year

21 as a residence by 2 or more individuals the following

22 shall apply—

23 ‘‘(A) The amount of the credit allowable

24 under subsection (a) by reason of expenditures

25 (as the case may be) made during such cal-
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1 endar year by any of such individuals with re2 spect to such dwelling unit shall be determined

3 by treating all of such individuals as 1 taxpayer

4 whose taxable year is such calendar year.

5 ‘‘(B) There shall be allowable with respect

6 to such expenditures to each of such individ7 uals, a credit under subsection (a) for the tax8 able year in which such calendar year ends in

9 an amount which bears the same ratio to the

10 amount determined under subparagraph (A) as

11 the amount of such expenditures made by such

12 individual during such calendar year bears to

13 the aggregate of such expenditures made by all

14 of such individuals during such calendar year.

15 ‘‘(2) TENANT-STOCKHOLDER IN COOPERATIVE

16 HOUSING CORPORATION.—In the case of an indi17 vidual who is a tenant-stockholder (as defined in sec18 tion 216) in a cooperative housing corporation (as

19 defined in such section), such individual shall be

20 treated as having made his tenant-stockholder’s pro21 portionate share (as defined in section 216(b)(3)) of

22 any expenditures of such corporation.

23 ‘‘(3) CONDOMINIUMS.—

24 ‘‘(A) IN GENERAL.—In the case of an indi25 vidual who is a member of a condominium man-
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1 agement association with respect to a condo2 minium which he owns, such individual shall be

3 treated as having made his proportionate share

4 of any expenditures of such association.

5 ‘‘(B) CONDOMINIUM MANAGEMENT ASSO6 CIATION.—For purposes of this paragraph, the

7 term ‘condominium management association’

8 means an organization which meets the require9 ments of paragraph (1) of section 528(c) (other

10 than subparagraph (E) thereof) with respect to

11 a condominium project substantially all of the

12 units of which are used as residences.

13 ‘‘(4) JOINT OWNERSHIP OF ITEMS OF SOLAR

14 ENERGY PROPERTY.—

15 ‘‘(A) IN GENERAL.—Any expenditure oth16 erwise qualifying as an expenditure described in

17 paragraph (1) or (2) of subsection (c) shall not

18 be treated as failing to so qualify merely be19 cause such expenditure was made with respect

20 to 2 or more dwelling units.

21 ‘‘(B) LIMITS APPLIED SEPARATELY.—In

22 the case of any expenditure described in sub23 paragraph (A), the amount of the credit allow24 able under subsection (a) shall (subject to para25 graph (1)) be computed separately with respect
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1 to the amount of the expenditure made for each

2 dwelling unit.

3 ‘‘(5) ALLOCATION IN CERTAIN CASES.—If less

4 than 80 percent of the use of an item is for nonbusi5 ness residential purposes, only that portion of the

6 expenditures for such item which is properly allo7 cable to use for nonbusiness residential purposes

8 shall be taken into account. For purposes of this

9 paragraph, use for a swimming pool shall be treated

10 as use which is not for residential purposes.

11 ‘‘(6) WHEN EXPENDITURE MADE; AMOUNT OF

12 EXPENDITURE.—

13 ‘‘(A) IN GENERAL.—Except as provided in

14 subparagraph (B), an expenditure with respect

15 to an item shall be treated as made when the

16 original installation of the item is completed.

17 ‘‘(B) EXPENDITURES PART OF BUILDING

18 CONSTRUCTION.—In the case of an expenditure

19 in connection with the construction or recon20 struction of a structure, such expenditure shall

21 be treated as made when the original use of the

22 constructed or reconstructed structure by the

23 taxpayer begins.

24 ‘‘(C) AMOUNT.—The amount of an ex25 penditure shall be the cost thereof.
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1 ‘‘(e) BASIS ADJUSTMENTS.—For purposes of this

2 subtitle, if a credit is allowed under this section for any

3 expenditure with respect to any property, the increase in

4 the basis of such property which would (but for this sub5 section) result from such expenditure shall be reduced by

6 the amount of the credit so allowed.’’.

7 (b) CONFORMING AMENDMENTS.—

8 (1) Subsection (a) of section 1016 of such Code

9 is amended by striking ‘and’ at the end of paragraph

10 (26), by striking the period at the end of paragraph

11 (27) and inserting ‘‘; and’’, and by adding at the

12 end the following new paragraph:

13 ‘‘(28) to the extent provided in section 25B(e),

14 in the case of amounts with respect to which a credit

15 has been allowed under section 25B.’’.

16 (2) The table of sections for subpart A of part

17 IV of subchapter A of chapter 1 of such Code is

18 amended by inserting after the item relating to sec19 tion 25A the following new item:

‘‘Sec. 25B. Residential solar energy property.’’

20 (c) EFFECTIVE DATE.—The amendments made by

21 this section shall apply to taxable years ending after De22 cember 31, 1999 and before December 31, 2004.

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