II

106TH CONGRESS

2D SESSION S. 3092

To provide incentives for improved and efficient use of energy sources, and

for other purposes.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 21, 2000

Mr. CONRAD introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

To provide incentives for improved and efficient use of energy

sources, 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,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Domestic Energy Secu5 rity Improvement Act of 2000’’.
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1 TITLE I—OIL AND GAS

2 INCENTIVES

3 Subtitle A—Production From

4 Marginal and Inactive Wells

5 SEC. 101. TAX CREDIT FOR MARGINAL DOMESTIC OIL AND

6 NATURAL GAS WELL PRODUCTION.

7 (a) CREDIT FOR PRODUCING OIL AND GAS FROM

8 MARGINAL WELLS.—Subpart D of part IV of subchapter

9 A of chapter 1 of the Internal Revenue Code of 1986 (re10 lating to business credits) is amended by adding at the

11 end the following new section:

12 ‘‘SEC. 45D. CREDIT FOR PRODUCING OIL AND GAS FROM

13 MARGINAL WELLS.

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

15 the marginal well production credit for any taxable year

16 is an amount equal to the product of—

17 ‘‘(1) the credit amount, and

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

19 qualified natural gas production which is attrib20 utable to the taxpayer.

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

22 section—

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

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

25 production, and
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1 ‘‘(B) 50 cents per 1,000 cubic feet of

2 qualified natural gas production.

3 ‘‘(2) REDUCTION AS OIL AND GAS PRICES IN4 CREASE.—

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

6 amounts under paragraph (1) shall each be re7 duced (but not below zero) by an amount which

8 bears the same ratio to such amount (deter9 mined without regard to this paragraph) as—

10 ‘‘(i) the excess (if any) of the applica11 ble reference price over $14 ($1.56 for

12 qualified natural gas production), bears to

13 ‘‘(ii) $3 ($0.33 for qualified natural

14 gas production).

15 The applicable reference price for a taxable

16 year is the reference price for the calendar year

17 preceding the calendar year in which the tax18 able year begins.

19 ‘‘(B) INFLATION ADJUSTMENT.—In the

20 case of any taxable year beginning in a calendar

21 year after 2000, each of the dollar amounts

22 contained in subparagraph (A) shall be in23 creased to an amount equal to such dollar

24 amount multiplied by the inflation adjustment

25 factor for such calendar year (determined under
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1 section 43(b)(3)(B) by substituting ‘1999’ for

2 ‘1990’).

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

4 this paragraph, the term ‘reference price’

5 means, with respect to any calendar year—

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

7 production, the reference price determined

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

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

10 gas production, the Secretary’s estimate of

11 the annual average wellhead price per

12 1,000 cubic feet for all domestic natural

13 gas.

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

15 PRODUCTION.—For purposes of this section—

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

17 oil production’ and ‘qualified natural gas production’

18 mean domestic crude oil or natural gas which is pro19 duced from a marginal well.

20 ‘‘(2) LIMITATION ON AMOUNT OF PRODUCTION

21 WHICH MAY QUALIFY.—

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

23 gas produced during any taxable year from any

24 well shall not be treated as qualified crude oil

25 production or qualified natural gas production
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1 to the extent production from the well during

2 the taxable year exceeds 1,095 barrels or barrel

3 equivalents.

4 ‘‘(B) PROPORTIONATE REDUCTIONS.—

5 ‘‘(i) SHORT TAXABLE YEARS.—In the

6 case of a short taxable year, the limitations

7 under this paragraph shall be proportion8 ately reduced to reflect the ratio which the

9 number of days in such taxable year bears

10 to 365.

11 ‘‘(ii) WELLS NOT IN PRODUCTION EN12 TIRE YEAR.—In the case of a well which is

13 not capable of production during each day

14 of a taxable year, the limitations under

15 this paragraph applicable to the well shall

16 be proportionately reduced to reflect the

17 ratio which the number of days of produc18 tion bears to the total number of days in

19 the taxable year.

20 ‘‘(3) DEFINITIONS.—

21 ‘‘(A) MARGINAL WELL.—The term ‘mar22 ginal well’ means a domestic well which during

23 the taxable year has marginal production (as

24 defined in section 613A(c)(6)).
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1 ‘‘(B) CRUDE OIL, ETC.—The terms ‘crude

2 oil’, ‘natural gas’, ‘domestic’, and ‘barrel’ have

3 the meanings given such terms by section

4 613A(e).

5 ‘‘(C) BARREL EQUIVALENT.—The term

6 ‘barrel equivalent’ means, with respect to nat7 ural gas, a conversion ratio of 6,000 cubic feet

8 of natural gas to 1 barrel of crude oil.

9 ‘‘(d) OTHER RULES.—

10 ‘‘(1) PRODUCTION ATTRIBUTABLE TO THE TAX11 PAYER.—In the case of a marginal well in which

12 there is more than one owner of operating interests

13 in the well and the crude oil or natural gas produc14 tion exceeds the limitation under subsection (c)(2),

15 qualifying crude oil production or qualifying natural

16 gas production attributable to the taxpayer shall be

17 determined on the basis of the ratio which tax18 payer’s revenue interest in the production bears to

19 the aggregate of the revenue interests of all oper20 ating interest owners in the production.

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

22 credit under this section may be claimed only on

23 production which is attributable to the holder of an

24 operating interest.
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1 ‘‘(3) PRODUCTION FROM NONCONVENTIONAL

2 SOURCES EXCLUDED.—In the case of production

3 from a marginal well which is eligible for the credit

4 allowed under section 29 for the taxable year, no

5 credit shall be allowable under this section unless

6 the taxpayer elects not to claim the credit under sec7 tion 29 with respect to the well.’’.

8 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec9 tion 38(b) of the Internal Revenue Code of 1986 is amend10 ed by striking ‘‘plus’’ at the end of paragraph (11), by

11 striking the period at the end of paragraph (12) and in12 serting ‘‘, plus’’, and by adding at the end the following

13 new paragraph:

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

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

16 (c) CREDIT ALLOWED AGAINST REGULAR AND MIN17 IMUM TAX.—

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

19 of the Internal Revenue Code of 1986 (relating to

20 limitation based on amount of tax) is amended by

21 redesignating paragraph (3) as paragraph (4) and

22 by inserting after paragraph (2) the following new

23 paragraph:

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

25 GAS WELL PRODUCTION CREDIT.—
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1 ‘‘(A) IN GENERAL.—In the case of the

2 marginal oil and gas well production credit—

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

4 be applied separately with respect to the

5 credit, and

6 ‘‘(ii) in applying paragraph (1) to the

7 credit—

8 ‘‘(I) subparagraphs (A) and (B)

9 thereof shall not apply, and

10 ‘‘(II) the limitation under para11 graph (1) (as modified by subclause

12 (I)) shall be reduced by the credit al13 lowed under subsection (a) for the

14 taxable year (other than the marginal

15 oil and gas well production credit).

16 ‘‘(B) MARGINAL OIL AND GAS WELL PRO17 DUCTION CREDIT.—For purposes of this sub18 section, the term ‘marginal oil and gas well pro19 duction credit’ means the credit allowable under

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

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

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

23 by inserting ‘‘or the marginal oil and gas well pro24 duction credit’’ after ‘‘employment credit’’.
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1 (d) CARRYBACK.—Subsection (a) of section 39 of the

2 Internal Revenue Code of 1986 (relating to carryback and

3 carryforward of unused credits generally) is amended by

4 adding at the end the following new paragraph:

5 ‘‘(3) 10-YEAR CARRYBACK FOR MARGINAL OIL

6 AND GAS WELL PRODUCTION CREDIT.—In the case

7 of the marginal oil and gas well production credit—

8 ‘‘(A) this section shall be applied sepa9 rately from the business credit (other than the

10 marginal oil and gas well production credit),

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

12 substituting ‘10 taxable years’ for ‘1 taxable

13 years’ in subparagraph (A) thereof, and

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

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

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

17 thereof, and

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

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

20 thereof.’’.

21 (e) COORDINATION WITH SECTION 29.—Section

22 29(a) of the Internal Revenue Code of 1986 is amended

23 by striking ‘‘There’’ and inserting ‘‘At the election of the

24 taxpayer, there’’.
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1 (f) CLERICAL AMENDMENT.—The table of sections

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

3 of the Internal Revenue Code of 1986 is amended by add4 ing at the end the following item:

‘‘45D. Credit for producing oil and gas from marginal wells.’’.

5 (g) EFFECTIVE DATE.—The amendments made by

6 this section shall apply to production after the date of the

7 enactment of this Act.

8 SEC. 102. EXCLUSION OF CERTAIN AMOUNTS RECEIVED

9 FROM RECOVERED INACTIVE WELLS.

10 (a) IN GENERAL.—Part III of subchapter B of chap11 ter 1 of the Internal Revenue Code of 1986 (relating to

12 items specifically excluded from gross income) is amended

13 by redesignating section 139 as section 140 and by insert14 ing after section 138 the following new section:

15 ‘‘SEC. 139. OIL OR GAS PRODUCED FROM A RECOVERED IN16 ACTIVE WELL.

17 ‘‘(a) IN GENERAL.—Gross income does not include

18 income attributable to independent producer oil from a re19 covered inactive well.

20 ‘‘(b) DEFINITIONS.—For purposes of this section—

21 ‘‘(1) INDEPENDENT PRODUCER OIL.—The term

22 ‘independent producer oil’ means crude oil or nat23 ural gas in which the economic interest of the inde24 pendent producer is attributable to an operating

25 mineral interest (within the meaning of section
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1 614(d)), overriding royalty interest, production pay2 ment, net profits interest, or similar interest.

3 ‘‘(2) CRUDE OIL AND NATURAL GAS.—The

4 terms ‘crude oil’ and ‘natural gas’ have the mean5 ings given such terms by section 613A(e).

6 ‘‘(3) RECOVERED INACTIVE WELL.—The term

7 ‘recovered inactive well’ means a well if—

8 ‘‘(A) throughout the time period beginning

9 any time prior to January 15, 1999, and ending

10 on such date, such well is inactive or has been

11 plugged and abandoned, as determined by the

12 agency of the State in which such well is lo13 cated that is responsible for regulating such

14 wells, and

15 ‘‘(B) during the 5-year period beginning on

16 the date of the enactment of this section, such

17 well resumes producing crude oil or natural gas.

18 ‘‘(4) INDEPENDENT PRODUCER.—The term

19 ‘independent producer’ means a producer of crude

20 oil or natural gas whose allowance for depletion is

21 determined under section 613A(c).

22 ‘‘(c) DEDUCTIONS.—No deductions directly con23 nected with amounts excluded from gross income by sub24 section (a) shall be allowed.

25 ‘‘(d) ELECTION.—
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1 ‘‘(1) IN GENERAL.—This section shall apply for

2 any taxable year only at the election of the taxpayer.

3 ‘‘(2) MANNER.—Such election shall be made, in

4 accordance with regulations prescribed by the Sec5 retary, not later than the time prescribed for filing

6 the return (including extensions thereof) and shall

7 be made annually on a property-by-property basis.’’.

8 (b) MINIMUM TAX.—Section 56(g)(4)(B) of the In9 ternal Revenue Code of 1986 is amended by adding at the

10 end the following new clause:

11 ‘‘(iii) INACTIVE WELLS.—In the case

12 of income attributable to independent pro13 ducers of oil recovered from an inactive

14 well, clause (i) shall not apply to any

15 amount allowable as an exclusion under

16 section 139.’’.

17 (c) CLERICAL AMENDMENT.—The table of sections

18 for part III of subchapter B of chapter 1 of the Internal

19 Revenue Code of 1986 is amended by striking the item

20 relating to section 139 and inserting the following:

‘‘Sec. 139. Oil or gas produced from a recovered inactive well.

‘‘Sec. 140. Cross references to other Acts.’’.

21 (d) EFFECTIVE DATE.—The amendments made by

22 this section shall apply to taxable years ending after the

23 date of the enactment of this Act.
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1 Subtitle B—Other Incentives

2 SEC. 111. ELECTION TO EXPENSE GEOLOGICAL AND GEO3 PHYSICAL EXPENDITURES.

4 (a) IN GENERAL.—Section 263 of the Internal Rev5 enue Code of 1986 (relating to capital expenditures) is

6 amended by adding at the end the following new sub7 section:

8 ‘‘(j) GEOLOGICAL AND GEOPHYSICAL EXPENDI9 TURES FOR DOMESTIC OIL AND GAS WELLS.—Notwith10 standing subsection (a), a taxpayer may elect to treat geo11 logical and geophysical expenses incurred in connection

12 with the exploration for, or development of, oil or gas with13 in the United States (as defined in section 638) as ex14 penses which are not chargeable to capital account. Any

15 expenses so treated shall be allowed as a deduction in the

16 taxable year in which paid or incurred.’’.

17 (b) CONFORMING AMENDMENT.—Section 263A(c)(3)

18 of the Internal Revenue Code of 1986 is amended by in19 serting ‘‘263(j),’’ after ‘‘263(i),’’.

20 (c) EFFECTIVE DATE.—

21 (1) IN GENERAL.—The amendments made by

22 this section shall apply to expenses paid or incurred

23 after the date of the enactment of this Act.

24 (2) TRANSITION RULE.—In the case of any ex25 penses described in section 263(j) of the Internal
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1 Revenue Code of 1986, as added by this section,

2 which were paid or incurred on or before the date

3 of the enactment of this Act, the taxpayer may elect,

4 at such time and in such manner as the Secretary

5 of the Treasury may prescribe, to amortize the

6 unamortized portion of such expenses over the 36-

7 month period beginning with the month in which the

8 date of the enactment of this Act occurs. For pur9 poses of this paragraph, the unamortized portion of

10 any expense is the amount remaining unamortized

11 as of the first day of the 36-month period.

12 SEC. 112. ELECTION TO EXPENSE DELAY RENTAL PAY13 MENTS.

14 (a) IN GENERAL.—Section 263 of the Internal Rev15 enue Code of 1986 (relating to capital expenditures), as

16 amended by section 111(a), is amended by adding at the

17 end the following new subsection:

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

19 AND GAS WELLS.—

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

21 (a), a taxpayer may elect to treat delay rental pay22 ments incurred in connection with the development

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

24 section 638) as payments which are not chargeable

25 to capital account. Any payments so treated shall be
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1 allowed as a deduction in the taxable year in which

2 paid or incurred.

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

4 of paragraph (1), the term ‘delay rental payment’

5 means an amount paid for the privilege of deferring

6 development of an oil or gas well.’’.

7 (b) CONFORMING AMENDMENT.—Section 263A(c)(3)

8 of the Internal Revenue Code of 1986, as amended by sec9 tion 112(b), is amended by inserting ‘‘263(k),’’ after

10 ‘‘263(j),’’.

11 (c) EFFECTIVE DATE.—

12 (1) IN GENERAL.—The amendments made by

13 this section shall apply to payments made or in14 curred after the date of the enactment of this Act.

15 (2) TRANSITION RULE.—In the case of any

16 payments described in section 263(k) of the Internal

17 Revenue Code of 1986, as added by this section,

18 which were made or incurred on or before the date

19 of the enactment of this Act, the taxpayer may elect,

20 at such time and in such manner as the Secretary

21 of the Treasury may prescribe, to amortize the

22 unamortized portion of such payments over the 36-

23 month period beginning with the month in which the

24 date of the enactment of this Act occurs. For pur25 poses of this paragraph, the unamortized portion of
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1 any payment is the amount remaining unamortized

2 as of the first day of the 36-month period.

3 SEC. 113. EXTENSION OF SPUDDING RULE.

4 (a) IN GENERAL.—Section 461(i)(2)(A) of the Inter5 nal Revenue Code of 1986 (relating to special rule for

6 spudding of oil or gas wells) is amended by striking ‘‘90th

7 day’’ and inserting ‘‘180th day’’.

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

9 this section shall apply to taxable years beginning after

10 December 31, 2000.

11 SEC. 114. ENHANCED OIL RECOVERY CREDIT EXTENDED TO

12 CERTAIN NONTERTIARY RECOVERY METH13 ODS.

14 (a) IN GENERAL.—Clause (i) of section 43(c)(2)(A)

15 of the Internal Revenue Code of 1986 (defining qualified

16 enhanced oil recovery project) is amended to read as fol17 lows:

18 ‘‘(i) which involves the application (in

19 accordance with sound engineering prin20 ciples) of—

21 ‘‘(I) one or more tertiary recov22 ery methods (as defined in section

23 193(b)(3)) which can reasonably be

24 expected to result in more than an in25 significant increase in the amount of
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1 crude oil which will ultimately be re2 covered, or

3 ‘‘(II) one or more nontertiary re4 covery methods which are required to

5 recover oil with traditionally immobile

6 characteristics or from formations

7 which have proven to be uneconomical

8 or noncommercial under conventional

9 recovery methods.’’.

10 (b) QUALIFIED NONTERTIARY RECOVERY METH11 ODS.—Section 43(c)(2) of the Internal Revenue Code of

12 1986 is amended by adding at the end the following new

13 subparagraphs:

14 ‘‘(C) QUALIFIED NONTERTIARY RECOVERY

15 METHOD.—For purposes of this paragraph—

16 ‘‘(i) IN GENERAL.—The term ‘quali17 fied nontertiary recovery method’ means

18 any recovery method described in clause

19 (ii), (iii), or (iv), or any combination there20 of.

21 ‘‘(ii) ENHANCED GRAVITY DRAINAGE

22 (EGD) METHODS.—The methods described

23 in this clause are as follows:

24 ‘‘(I) HORIZONTAL DRILLING.—

25 The drilling of horizontal, rather than
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1 vertical, wells to penetrate any hydro2 carbon-bearing formation which has

3 an average in situ calculated perme4 ability to fluid flow of less than or

5 equal to 12 or less millidarcies and

6 which has been demonstrated by use

7 of a vertical wellbore to be uneco8 nomical unless drilled with lateral hor9 izontal lengths in excess of 1,000 feet.

10 ‘‘(II) GRAVITY DRAINAGE.—The

11 production of oil by gravity flow from

12 drainholes that are drilled from a

13 shaft or tunnel dug within or below

14 the oil-bearing zone.

15 ‘‘(iii) MARGINALLY ECONOMIC RES16 ERVOIR REPRESSURIZATION (MERR) METH17 ODS.—The methods described in this

18 clause are as follows, except that this

19 clause shall only apply to the first

20 1,000,000 barrels produced in any project:

21 ‘‘(I) CYCLIC GAS INJECTION.—

22 The increase or maintenance of pres23 sure by injection of hydrocarbon gas

24 into the reservoir from which it was

25 originally produced.
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1 ‘‘(II) FLOODING.—The injection

2 of water into an oil reservoir to dis3 place oil from the reservoir rock and

4 into the bore of a producing well.

5 ‘‘(iv) OTHER METHODS.—Any method

6 used to recover oil having an average lab7 oratory measured air permeability less

8 than or equal to 100 millidarcies when

9 averaged over the productive interval being

10 completed, or an in situ calculated perme11 ability to fluid flow less than or equal to

12 12 millidarcies or oil defined by the De13 partment of Energy as being immobile.

14 ‘‘(D) AUTHORITY TO ADD OTHER NONTER15 TIARY RECOVERY METHODS.—The Secretary

16 shall provide procedures under which—

17 ‘‘(i) the Secretary may treat methods

18 not described in clause (ii), (iii), or (iv) of

19 subparagraph (C) as qualified nontertiary

20 recovery methods, and

21 ‘‘(ii) a taxpayer may request the Sec22 retary to treat any method not so de23 scribed as a qualified nontertiary recovery

24 method.
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1 The Secretary may only specify methods as

2 qualified nontertiary recovery methods under

3 this subparagraph if the Secretary determines

4 that such specification is consistent with the

5 purposes of subparagraph (C) and will result in

6 greater production of oil and natural gas.’’.

7 (c) CONFORMING AMENDMENT.—Clause (iii) of sec8 tion 43(c)(2)(A) of the Internal Revenue Code of 1986

9 is amended to read as follows:

10 ‘‘(iii) with respect to which—

11 ‘‘(I) in the case of a tertiary re12 covery method, the first injection of

13 liquids, gases, or other matter com14 mences after December 31, 1990, and

15 ‘‘(II) in the case of a qualified

16 nontertiary recovery method, the im17 plementation of the method begins

18 after December 31, 2000.’’.

19 (d) EFFECTIVE DATE.—The amendments made by

20 this section shall apply to taxable years ending after De21 cember 31, 2000.
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1 TITLE II—STRATEGIC

2 PETROLEUM RESERVE

3 SEC. 201. SALES AND PURCHASES.

4 Section 161 of the Energy Policy and Conservation

5 Act (42 U.S.C. 6241) is amended—

6 (1) in subsection (b), by striking ‘‘(f), and (g),’’

7 and inserting ‘‘(f), (g), and (k),’’; and

8 (2) by adding at the end the following:

9 ‘‘(k) DRAWDOWN WHEN THE PRICE OF CRUDE OIL

10 EXCEEDS A CERTAIN LEVEL.—

11 ‘‘(1) DEFINITIONS.—In this subsection:

12 ‘‘(A) DRAWDOWN TRIGGER PRICE.—The

13 term ‘drawdown trigger price’ means a market

14 price of $27.00 per barrel of crude oil, adjusted

15 annually in accordance with an appropriate

16 index of inflation, as determined by the Sec17 retary.

18 ‘‘(B) PURCHASE TRIGGER PRICE.—The

19 term ‘purchase trigger price’ means a market

20 price of $20.00 per barrel of crude oil, adjusted

21 annually in accordance with an appropriate

22 index of inflation, as determined by the Sec23 retary.

24 ‘‘(2) DRAWDOWN.—At any time at which the

25 President determines that the market price of crude
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1 oil exceeds the drawdown trigger price and that a

2 drawdown of the Strategic Petroleum Reserve would

3 be in the best interest of the United States, the Sec4 retary may draw down and distribute the Strategic

5 Petroleum Reserve at the market price.

6 ‘‘(3) PURCHASE.—Proceeds of drawdowns

7 under paragraph (2)—

8 ‘‘(A) shall be deposited in a special account

9 in the Treasury of the United States; and

10 ‘‘(B) may be used, without further Act of

11 appropriation, to purchase crude oil for storage

12 in the Strategic Petroleum Reserve when the

13 market price of crude oil is less than the pur14 chase trigger price.’’.

15 SEC. 202. AUTHORIZATION OF APPROPRIATIONS.

16 Section 166 of the Energy Policy and Conservation

17 Act (42 U.S.C. 6246) is amended—

18 (1) by striking ‘‘fiscal year 2000’’ and inserting

19 ‘‘fiscal years 2001 through 2003’’; and

20 (2) by striking ‘‘, to remain available only

21 through March 31, 2000’’.
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1 TITLE III—WEATHERIZATION

2 PROGRAM

3 SEC. 301. REPEAL OF COST-SHARING REQUIREMENT

4 The matter under the heading ‘‘ENERGY CONSERVA5 TION (INCLUDING TRANSFER OF FUNDS)’’ under the head6 ing ‘‘DEPARTMENT OF ENERGY’’ in title II of the

7 Department of the Interior and Related Agencies Appro8 priations Act, 2000 (113 Stat. 1501A–180), is amended

9 by striking the second proviso.

10 TITLE IV—ALTERNATIVE FUELS

11 SEC. 401. ALLOCATION OF ALCOHOL FUELS CREDIT TO PA12 TRONS OF A COOPERATIVE.

13 (a) IN GENERAL.—Section 40(d) of the Internal Rev14 enue Code of 1986 (relating to alcohol used as fuel) is

15 amended by adding at the end the following:

16 ‘‘(6) ALLOCATION OF SMALL ETHANOL PRO17 DUCER CREDIT TO PATRONS OF COOPERATIVE.—

18 ‘‘(A) IN GENERAL.—In the case of a coop19 erative organization described in section

20 1381(a), any portion of the credit determined

21 under subsection (a)(3) for the taxable year

22 may, at the election of the organization made

23 on a timely filed return (including extensions)

24 for such year, be apportioned pro rata among

25 patrons of the organization on the basis of the
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1 quantity or value of business done with or for

2 such patrons for the taxable year. Such an elec3 tion, once made, shall be irrevocable for such

4 taxable year.

5 ‘‘(B) TREATMENT OF ORGANIZATIONS AND

6 PATRONS.—The amount of the credit appor7 tioned to patrons pursuant to subparagraph

8 (A)—

9 ‘‘(i) shall not be included in the

10 amount determined under subsection (a)

11 for the taxable year of the organization,

12 and

13 ‘‘(ii) shall be included in the amount

14 determined under subsection (a) for the

15 taxable year of each patron in which the

16 patronage dividend for the taxable year re17 ferred to in subparagraph (A) is includible

18 in gross income.

19 ‘‘(C) SPECIAL RULE FOR DECREASING

20 CREDIT FOR TAXABLE YEAR.—If the amount of

21 the credit of a cooperative organization deter22 mined under subsection (a)(3) for a taxable

23 year is less than the amount of such credit

24 shown on the cooperative organization’s return

25 for such year, an amount equal to the excess of
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1 such reduction over the amount not apportioned

2 to the patrons under subparagraph (a) for the

3 taxable year shall be treated as an increase in

4 tax imposed by this chapter on the organiza5 tion. Any such increase shall not be treated as

6 tax imposed by this chapter for purposes of de7 termining the amount of any credit under this

8 subpart or subpart A, B, E, or G of this part.’’.

9 (b) TECHNICAL AMENDMENT.—Section 1388 of the

10 Internal Revenue Code of 1986 (relating to definitions and

11 special rules for cooperative organizations) is amended by

12 adding at the end the following:

13 ‘‘(k) CROSS REFERENCE.—For provisions relating to

14 the apportionment of the alcohol fuels credit between coop15 erative organizations and their patrons, see section

16 40(d)(6).’’.

17 (c) EFFECTIVE DATE.—The amendments made by

18 this section shall apply to taxable years beginning after

19 December 31, 2000.

20 TITLE V—QUALIFIED ELECTRIC

21 VEHICLES

22 SEC. 501. MODIFICATION OF CREDIT FOR QUALIFIED ELEC23 TRIC VEHICLES.

24 (a) AMOUNT OF CREDIT.—
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1 (1) IN GENERAL.—Section 30(a) of the Internal

2 Revenue Code of 1986 (relating to allowance of

3 credit) is amended by striking ‘‘10 percent of’’.

4 (2) LIMITATION OF CREDIT ACCORDING TO

5 TYPE OF VEHICLE.—Section 30(b) of such Code (re6 lating to limitations) is amended—

7 (A) by striking paragraphs (1) and (2) and

8 inserting the following new paragraph:

9 ‘‘(1) LIMITATION ACCORDING TO TYPE OF VE10 HICLE.—The amount of the credit allowed under

11 subsection (a) for any vehicle shall not exceed the

12 greatest of the following amounts applicable to such

13 vehicle:

14 ‘‘(A) In the case of a vehicle with a rated

15 top speed not exceeding 50 miles per hour, the

16 lesser of—

17 ‘‘(i) 10 percent of the cost of the vehi18 cle, or

19 ‘‘(ii) $4,250.

20 ‘‘(B) In the case of a vehicle with a gross

21 vehicle weight rating not exceeding 8,500

22 pounds and a rated top speed exceeding 50

23 miles per hour, $4,250.

24 ‘‘(C) In the case of a vehicle capable of a

25 driving range of at least 100 miles on a single
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1 charge of the vehicle’s rechargeable batteries

2 and measured pursuant to the urban dynamom3 eter schedules under appendix I to part 86 of

4 title 40, Code of Federal Regulations, $6,375.

5 ‘‘(D) In the case of a vehicle capable of a

6 payload capacity of at least 1000 pounds,

7 $6,375.

8 ‘‘(E) In the case of a vehicle with a gross

9 vehicle weight rating exceeding 8,500 but not

10 exceeding 14,000 pounds, $8,500.

11 ‘‘(F) In the case of a vehicle with a gross

12 vehicle weight rating exceeding 14,000 but not

13 exceeding 26,000 pounds, $21,250.

14 ‘‘(G) In the case of a vehicle with a gross

15 vehicle weight rating exceeding 26,000 pounds,

16 $42,500.’’, and

17 (B) by redesignating paragraph (3) as

18 paragraph (2).

19 (3) CONFORMING AMENDMENTS.—

20 (A) Section 53(d)(1)(B)(iii) of such Code

21 is amended by striking ‘‘section 30(b)(3)(B)’’

22 and inserting ‘‘section 30(b)(2)(B)’’.

23 (3) Section 55(c)(2) of such Code is amended

24 by striking ‘‘30(b)(3)’’ and inserting ‘‘30(b)(2)’’.
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1 (b) QUALIFIED ELECTRIC VEHICLE.—Section

2 30(c)(1)(A) of the Internal Revenue Code of 1986 (defin3 ing qualified electric vehicle) is amended to read as fol4 lows:

5 ‘‘(A) which is powered primarily by an

6 electric motor drawing current from recharge7 able batteries, fuel cells which generate elec8 trical current from an alternative fuel (as de9 fined in section 30B(f)(1)), or other portable

10 sources of electrical current generated on board

11 the vehicle from an alternative fuel (as so de12 fined),’’.

13 (c) ADDITIONAL SPECIAL RULES.—Section 30(d) of

14 the Internal Revenue Code of 1986 (relating to special

15 rules) is amended by adding at the end the following new

16 paragraphs:

17 ‘‘(5) NO DOUBLE BENEFIT.—The amount of

18 any deduction or credit allowable under this chapter

19 for any cost taken into account in computing the

20 amount of the credit determined under subsection

21 (a) shall be reduced by the amount of such credit at22 tributable to such cost.

23 ‘‘(6) LEASED VEHICLES.—No credit shall be al24 lowed under subsection (a) with respect to a leased

25 motor vehicle unless the lease documents clearly dis-
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1 close to the lessee the specific amount of any credit

2 otherwise allowable to the lessor under subsection

3 (a).’’.

4 (d) EXTENSION.—Section 30(e) of the Internal Rev5 enue Code of 1986 (relating to termination) is amended

6 by striking ‘‘2004’’ and inserting ‘‘2007’’.

7 (e) EFFECTIVE DATE.—The amendments made by

8 this section shall apply to property placed in service after

9 December 31, 2000, in taxable years ending after such

10 date.

11 TITLE VI—WIND PRODUCTION

12 TAX CREDIT

13 SEC. 601. EXTENSION OF PLACED IN SERVICE DATE.

14 Section 45(c)(3)(A) of the Internal Revenue Code of

15 1986 (relating to qualified facility) is amended by striking

16 ‘‘January 1, 2002’’ and inserting ‘‘July 1, 2004’’.

Æ