II

Calendar No. 552

106TH CONGRESS

2D SESSION S. 2557

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 SENATE OF THE UNITED STATES

MAY 16, 2000

Mr. LOTT (for himself, Mr. MURKOWSKI, and Mr. VOINOVICH) introduced the

following bill; which was read the first time

MAY 17, 2000

Read the second time and placed on the calendar

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.
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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 ‘‘National Energy Secu5 rity Act of 2000’’.

6 SEC. 2. FINDINGS AND PURPOSES.

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

8 (1) increasing dependence on foreign sources of

9 oil causes systemic harm to all sectors of the domes10 tic United States economy, threatens national secu11 rity, undermines the ability of federal, state, and

12 local units of government to provide essential serv13 ices, and jeopardizes the peace, security, and welfare

14 of the American people;

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

16 percent in 1992, but has risen to more than 55 per17 cent by the beginning of 2000, and is estimated by

18 the Department of Energy to rise to 65 percent by

19 2020 unless current policies are altered;

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

21 efficiencies, energy use in the United States is ex22 pected to increase 27 percent by 2020.

23 (4) the United States lacks a comprehensive na24 tional energy policy and has taken actions that limit
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1 the availability and capability of the domestic energy

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

3 (5) a comprehensive energy strategy needs to be

4 developed to combat this trend, decrease the United

5 States dependence on imported oil supplies and

6 strengthen our national energy security;

7 (6) the goal of this comprehensive strategy

8 must be to decrease the United States dependence

9 on foreign oil supplies to not more than 50 percent

10 by the year 2010;

11 (7) in order to meet this goal, this comprehen12 sive energy strategy needs to be multi-faceted and

13 include enhancing the use of renewable energy re14 sources (including hydro, nuclear, solar, wind, and

15 biomass), conserving energy resources (including im16 proving energy efficiencies), and increasing domestic

17 supplies of nonrenewable resources (including oil,

18 natural gas, and coal);

19 (8) however, conservation efforts and alter20 native fuels alone will not enable America to meet

21 this goal as conventional energy sources supply 96

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

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

24 order to mitigate the effect of recent increases in oil
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1 prices on the American consumer, including the poor

2 and the elderly.

3 (b) PURPOSES.—This purposes of this Act are to pro4 tect the energy security of the United States by decreasing

5 America’s dependency of foreign oil sources to not more

6 than 50 percent by the year 2010 by enhancing the use

7 of renewable energy resources, conserving energy re8 sources (including improving energy efficiencies), and in9 creasing domestic energy supplies and to mitigate the im10 mediate effect of increases in energy prices on the Amer11 ican consumer, including the poor and the elderly.

12 TITLE I—ENERGY SECURITY AC13 TIONS REQUIRED OF THE

14 SECRETARY OF ENERGY

15 SEC. 101. ANNUAL REPORT ON UNITED STATES ENERGY

16 INDEPENDENCE.

17 (a) REPORT.—Beginning on October 1, 2000, and

18 annually thereafter, the Secretary of Energy, in consulta19 tion with the Secretary of Defense and the heads of other

20 Federal agencies, shall submit a report to the President

21 and the Congress which evaluates the progress the United

22 States has made toward obtaining the goal of not more

23 than 50 percent dependence on foreign oil sources by

24 2010. The Secretary shall adopt as interim goals, a reduc-
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1 tion in dependence on oil imports to not more than 54

2 percent by 2005 and 52 percent by 2008.

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

4 specific legislation or administrative actions must be im5 plemented to meet this goal and set forth a range of op6 tions and alternatives with a benefit/cost analysis for each

7 option or alternative together with an estimate for the con8 tribution that each option or alternative could make to re9 duce foreign oil imports. The report shall indicate, in de10 tail, options and alternatives (1) to increase the use of re11 newable domestic energy sources, including conventional

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

13 increased hydroelectric generation at existing Federal fa14 cilities, (2) to conserve energy resources, including improv15 ing efficiencies and decreasing consumption, and (3) to in16 crease domestic production and use of oil, natural gas, and

17 coal, including any actions that would need to be imple18 mented to provide access to, and transportation of, these

19 energy resources.

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

21 submitted in 2000, 2005, and 2008, the Secretary shall

22 examine and report on the condition of the domestic refin23 ery industry and the extent of domestic storage capacity

24 for various categories of petroleum products and make

25 such recommendations as he believes will enhance domes-
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1 tic capabilities to respond to short-term shortages of var2 ious fuels due to climate or supply interruptions.

3 SEC. 102. REPORT OF THE NATIONAL PETROLEUM COUN4 CIL.

5 The Secretary of Energy shall immediately review the

6 report of the National Petroleum Council submitted to

7 him on December 15, 1999, and shall submit such report,

8 together with any recommendations for administrative or

9 legislative actions, to the President no later than June 15,

10 2000.

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

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

13 Energy shall establish an Interagency Work Group on

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

15 within the National Economic Council. The Group shall

16 include representatives from each Federal agency that has

17 a significant role in the development and implementation

18 of natural gas policy, resource assessment, or technologies

19 for natural gas exploration, production, transportation,

20 and use.

21 (b) STRATEGY AND COMPREHENSIVE POLICY.—The

22 Group shall develop a strategy and comprehensive policy

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

24 overall national objectives of energy security, economic

25 growth, and environmental protection. In developing the
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1 strategy and policy, the Group shall solicit and consider

2 suggestions from States and local units of government, in3 dustry, and other non-Federal groups, organizations, or

4 individuals possessing information or expertise in one or

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

6 recognize the significant lead times required for the devel7 opment of additional natural gas supplies and the delivery

8 infrastructure required to transport those supplies. The

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

10 to and development of resources, transportation, tech11 nology development, environmental regulation and the as12 sociated economic and environmental costs of alternatives,

13 education of future workforce, financial incentives related

14 to exploration, production, transportation, development,

15 and use of natural gas.

16 (c) REPORT.—The Group shall prepare a report set17 ting forth its recommendations on a comprehensive policy

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

19 national strategy to achieve the objectives of the policy.

20 The report shall be transmitted to the Secretary of Energy

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

22 Act.

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

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

25 report, together with any recommendations for adminis-
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1 trative or legislative actions, to the President and the Con2 gress.

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

4 the assumptions used in developing its report, including

5 the specific elements of a national strategy to achieve the

6 objectives of the comprehensive policy and shall advise the

7 Secretary whenever it anticipates changes that might re8 quire alterations in the strategy.

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

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

11 the President and the Congress evaluating the progress

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

13 the strategy and accomplishing the objectives of the com14 prehensive policy.

15 TITLE II—AMENDMENTS TO EN16 ERGY POLICY AND CON17 SERVATION ACT AND AC18 TIONS AFFECTING THE STRA19 TEGIC PETROLEUM RESERVE

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

21 Title I of the Energy Policy and Conservation Act

22 (42 U.S.C. 6211–6251) is amended—

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

24 (A) striking ‘‘and’’ at the end of (1)(A),
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1 (B) striking ‘‘,’’ and inserting ‘‘; and’’ at

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

3 (C) inserting after paragraph (B) the fol4 lowing new paragraph:

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

6 Secretary of Defense that action taken under

7 this subsection will not impair national secu8 rity.’’, and

9 (D) striking ‘‘Reserve’’ and inserting ‘‘Re10 serve, if the Secretary finds that action taken

11 under this subsection will not have an adverse

12 effect on the domestic petroleum industry.’’ at

13 the end of (1).;

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

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

16 2003’’; and

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

18 ‘‘March 31, 2000’’ each place it appears and insert19 ing ‘‘December 31, 2003’’.

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

21 Title II of the Energy Policy and Conservation Act

22 (42 U.S.C. 6261–6285) is amended—

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

24 inserting ‘‘through 2003’’ after ‘‘1997’’; and
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1 (2) in section 281 (42 U.S.C. 6285), by striking

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

3 ‘‘December 31, 2003’’.

4 SEC. 203. STRATEGIC PETROLEUM RESERVE STUDY AND

5 REPORT.

6 The President shall immediately establish an Inter7 agency Panel on the Strategic Petroleum Study (referred

8 to as the ‘‘Panel’’ in this section) to study oil markets

9 and estimate the extent and frequency of fluctuations in

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

11 future and determine appropriate capacity of and uses for

12 the Strategic Petroleum Reserve. The Panel may rec13 ommend changes in existing authorities to provide addi14 tional flexibility for and strengthen the ability of the Stra15 tegic Petroleum Reserve to respond to energy require16 ments. The Panel shall complete its study and submit a

17 report containing its findings and any recommendations

18 to the President and the Congress within six months from

19 the date of enactment of this Act.
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1 TITLE III—PROVISIONS TO PRO2 TECT CONSUMERS AND LOW

3 INCOME FAMILIES AND EN4 COURAGE ENERGY EFFI5 CIENCIES

6 SEC. 301. CHANGES IN WEATHERIZATION PROGRAM TO

7 PROTECT LOW-INCOME PERSONS.

8 (a) The matter under the heading ‘‘ENERGY CON9 SERVATION (INCLUDING TRANSFER OF FUNDS)’’ in title II

10 of the Department of the Interior and Related Agencies

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

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

13 inserting ‘‘grants.’’.

14 (b) Section 415 of the Energy Conservation and Pro15 duction Act (42 U.S.C. 6865) is amended—

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

17 sentence;

18 (2) in subsection (a)(2) by—

19 (A) striking ‘‘(A)’’,

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

21 to waive the 40 percent requirement established

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

23 plan’’ and inserting ‘‘establish’’, and

24 (C) striking subparagraph (B);

25 (3) in subsection (c)(1) by—
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1 (A) striking ‘‘paragraphs (3) and (4)’’ and

2 inserting ‘‘paragraph (3)’’,

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

4 ‘‘$2500’’,

5 (C) striking ‘‘and’’ at the end of subpara6 graph (C),

7 (D) striking the period and inserting

8 ‘‘, and’’ in subparagraph (D), and

9 (E) inserting after subparagraph (D) the

10 following new subparagraph:

11 ‘‘(E) the cost of making heating and cool12 ing modifications, including replacement’’;

13 (4) in subsection (c)(3) by—

14 (A) striking ‘‘1991, the $1600 per dwelling

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

16 per dwelling unit average’’,

17 (B) striking ‘‘limitation’’ and inserting ‘‘aver18 age’’ each time it appears, and

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

20 subparagraph (B); and

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

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

23 (a) Part C of title II of the Energy Policy and Con24 servation Act (42 U.S.C. 6211 et seq.) is amended by add25 ing at the end the following:
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1 ‘‘SEC. 273. SUMMER FILL AND FUEL BUDGETING PRO2 GRAMS.

3 ‘‘(a) DEFINITIONS.—In this section:

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

5 contract’ means a contract between a retailer and a

6 consumer under which the heating expenses of the

7 consumer are spread evenly over a period of months.

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

9 ‘fixed-price contract’ means a contract between a re10 tailer and a consumer under which the retailer

11 charges the consumer a set price for propane, ker12 osene, or heating oil without regard to market price

13 fluctuations.

14 ‘‘(3) PRICE CAP CONTRACT.—The term ‘price

15 cap contract’ means a contract between a retailer

16 and a consumer under which the retailer charges the

17 consumer the market price for propane, kerosene, or

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

19 heating oil may not exceed a maximum amount stat20 ed in the contract.

21 ‘‘(b) ASSISTANCE.—At the request of the chief execu22 tive officer of a State, the Secretary shall provide informa23 tion, technical assistance, and funding—

24 ‘‘(1) to develop education and outreach pro25 grams to encourage consumers to fill their storage
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1 facilities for propane, kerosene, and heating oil dur2 ing the summer months; and

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

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

5 advantageous financial arrangements;

6 to avoid severe seasonal price increases for and supply

7 shortages of those products.

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

9 the Secretary shall give preference to States that con10 tribute public funds or leverage private funds to develop

11 State summer fill and fuel budgeting programs.

12 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There

13 are authorized to be appropriated to carry out this

14 section—

15 ‘‘(1) $25,000,000 for fiscal year 2001; and

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

17 year thereafter.

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

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

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

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

22 6201) is amended by inserting after the item relating to

23 section 272 the following:

‘‘Sec. 273. Summer fill and fuel budgeting programs.’’.
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1 SEC. 303. ENERGY EFFICIENCY SCIENCE INITIATIVE.

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

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

4 each fiscal year thereafter be for an Energy Efficiency

5 Science Initiative to be managed by the Assistant Sec6 retary for Energy Efficiency and Renewable Energy in

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

8 grants to be competitively awarded and subject to peer re9 view for research relating to energy efficiency. The Sec10 retary of Energy shall submit to the Committee on Science

11 and the Committee on Appropriations of the House of

12 Representatives, and to the Committee on Energy and

13 Natural Resources and the Committee on Appropriations

14 of the Senate, an annual report on the activities of the

15 Energy Efficiency Science Initiative, including a descrip16 tion of the process used to award the funds and an expla17 nation of how the research relates to energy efficiency.

18 SEC. 304. NORTHEAST HOME HEATING OIL RESERVE.

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

20 Conservation Act is amended by—

21 (1) redesignating part D as part E;

22 (2) redesignating section 181 as section 191;

23 and

24 (3) inserting after part C the following new

25 part D—
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1 ‘‘PART D—NORTHEAST HOME HEATING OIL

2 RESERVE

3 ‘‘ESTABLISHMENT

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

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

6 operate in the Northeast, a Northeast Home Heating Oil

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

8 component of the Strategic Petroleum Reserve established

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

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

11 petroleum distillate.

12 ‘‘(b) For the purposes of this part—

13 ‘‘(1) the term ‘Northeast’ means the States of

14 Maine, New Hampshire, Vermont, Massachusetts,

15 Connecticut, Rhode Island, New York, Pennsylvania,

16 and New Jersey; and

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

18 heating oil and diesel fuel.

19 ‘‘AUTHORITY

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

21 to carry out this part, the Secretary may—

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

23 acquire, in whole or in part, storage and related fa24 cilities, and storage services;
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1 ‘‘(2) use, lease, maintain, sell, or otherwise dis2 pose of storage and related facilities acquired under

3 this part;

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

5 exchange of petroleum product from the Strategic

6 Petroleum Reserve or received as royalty from Fed7 eral lands), lease, or otherwise, petroleum distillate

8 for storage in the Northeast Home Heating Oil Re9 serve;

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

11 owned by the United States;

12 ‘‘(5) sell, exchange, or otherwise dispose of pe13 troleum distillate from the Reserve established under

14 this part; and

15 ‘‘(6) notwithstanding paragraph (5), on terms

16 the Secretary considers reasonable, sell, exchange, or

17 otherwise dispose of petroleum distillate from the

18 Reserve established under this part in order to

19 maintain the quality or quantity of the petroleum

20 distillate in the Reserve or to maintain the oper21 ational capability of the Reserve.

22 ‘‘CONDITIONS FOR RELEASE; PLAN

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

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

25 the event of—

26 ‘‘(1) a severe energy supply disruption;
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1 ‘‘(2) a severe price increase; or

2 ‘‘(3) another emergency affecting the North3 east, which the President determines to merit a re4 lease from the Reserve.

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

6 this section, the Secretary shall transmit to the President

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

8 describing—

9 ‘‘(1) the acquisition of storage and related fa10 cilities or storage services for the Reserve;

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

12 storage in the Reserve;

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

14 petroleum distillate from the Reserve; and

15 ‘‘(4) the estimated costs of establishment, main16 tenance, and operation of the Reserve.

17 The storage of petroleum distillate in a storage facility

18 that meets existing environmental requirements is not a

19 ‘major Federal action significantly affecting the quality of

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

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

22 1969.

23 ‘‘NORTHEAST HOME HEATING OIL RESERVE ACCOUNT

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

25 Energy to establish a Reserve under this part, the Sec26 retary of the Treasury shall establish in the Treasury of
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1 the United States an account known as the ‘Northeast

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

3 section as the ‘Account’).

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

5 the Account any amounts appropriated to the Account and

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

7 of petroleum distillate from the Reserve.

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

9 in the Account to carry out activities under this part with10 out the need for further appropriation, and amounts avail11 able to the Secretary of Energy for obligation under this

12 section shall remain available without fiscal year limita13 tion.

14 ‘‘EXEMPTIONS

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

16 ‘‘(1) is not subject to the rulemaking require17 ments of section 523 of this Act, section 501 of the

18 Department of Energy Organization Act, or section

19 553 of title 5, United States Code; and

20 ‘‘(2) is not subject to laws governing the Fed21 eral procurement of goods and services, including

22 the Federal Property and Administrative Services

23 Act of 1949 (including the Competition in Con24 tracting Act) and the Small Business Act.’’.

25 (b) AUTHORIZATION OF APPROPRIATIONS.—There

26 are authorized to be appropriated such sums as may be
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1 necessary to carry out part D of title I of the Energy Pol2 icy and Conservation Act.

3 TITLE IV—PROVISIONS TO EN4 HANCE THE USE OF DOMES5 TIC ENERGY RESOURCES

6 Subtitle A—Hydroelectric

7 Resources

8 SEC. 401. USE OF FEDERAL FACILITIES.

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

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

11 and other facilities under their jurisdiction.

12 (b) Based on this inventory and other information,

13 the Secretary of the Interior and Secretary of the Army

14 shall each submit a report to the Congress within six

15 months from the date of enactment of this Act. Each re16 port shall—

17 (1) Describe, in detail, each facility that is ca18 pable, with or without modification, of producing ad19 ditional hydroelectric power. For each such facility,

20 the report shall state the full potential for the facil21 ity to generate hydroelectric power, whether the fa22 cility is currently generating hydroelectric power,

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

24 other actions to increase the hydroelectric generating

25 capability of the facility. For each facility that cur-
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1 rently has hydroelectric generating equipment, the

2 report shall indicate the condition of such equip3 ment, the maintenance requirements, and the sched4 ule for any improvements as well as the purposes for

5 which power is generated.

6 (2) Describe what actions are planned and un7 derway to increase the hydroelectric production from

8 facilities under his jurisdiction and shall include any

9 recommendations the Secretary deems advisable to

10 increase such production, reduce costs, and improve

11 efficiency at Federal facilities, including, but not

12 limited to, use of lease of power privilege and con13 tracting with non-Federal entities for operation and

14 maintenance.

15 SEC. 402. EXPEDITED FERC HYDROELECTRIC LICENSING

16 PROCEDURES.

17 The Federal Energy Regulatory Commission shall

18 immediately undertake a comprehensive review of policies,

19 procedures and regulations for the licensing of hydro20 electric projects to determine how to reduce the cost and

21 time of obtaining a license. The Commission shall report

22 its findings within six months of the date of enactment

23 to the Congress, including any recommendations for legis24 lative changes.
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1 Subtitle B—Nuclear Resources

2 SEC. 410. NUCLEAR GENERATION.

3 The Chairman of the Nuclear Regulatory Commis4 sion shall submit a report to the Congress within six

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

6 of nuclear power generation and production in the United

7 States and the potential for increasing nuclear generating

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

9 mix. The report shall also review the status of the reli10 censing process for civilian nuclear power plants, including

11 current and anticipated applications, and recommenda12 tions for improvements in the process, including, but not

13 limited to recommendations for expediting the process and

14 ensuring that relicensing is accomplished in a timely man15 ner.

16 SEC. 411. NRC HEARING PROCEDURE.

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

18 (42 U.S.C. 2239(a)(1)) is amended by adding at the end

19 the following—

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

21 section shall be conducted using informal adju22 dicatory procedures established under sections

23 553 and 555 of title 5, United States Code, un24 less the Commission determines that formal ad25 judicatory procedures are necessary—
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1 ‘‘(i) to develop a sufficient record; or

2 ‘‘(ii) to achieve fairness.’’.

3 Subtitle C—Development of a Na4 tional Spent Nuclear Fuel Strat5 egy

6 SEC. 415. FINDINGS.

7 (a) Prior to permanent closure of the geologic reposi8 tory in Yucca Mountain, Congress must determine wheth9 er the spent fuel in the repository should be treated as

10 waste subject to permanent burial or should be considered

11 an energy resource that is needed to meet future energy

12 requirements;

13 (b) Future use of nuclear energy may require con14 struction of a second geologic repository unless Yucca

15 Mountain can safely accommodate additional spent fuel.

16 Improved spent fuel strategies may increase the capacity

17 of Yucca Mountain.

18 (c) Prior to construction of any second permanent

19 geologic repository, the nation’s current plans for perma20 nent burial of spent fuel should be reevaluated.

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

22 (a) ESTABLISHMENT.—There is hereby established

23 an Office of Spent Nuclear Fuel Research (referred to as

24 the ‘‘Office’’ in this section) within the Office of Nuclear

25 Energy Science and Technology of the Department of En-
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1 ergy. The Office shall be headed by the Associate Director,

2 who shall be a member of the Senior Executive Service

3 appointed by the Director of the Office of Nuclear Energy

4 Science and Technology, and compensated at a rate deter5 mined by applicable law.

6 (b) ASSOCIATE DIRECTOR.—The Associate Director

7 of the Office of Spent Nuclear Fuel Research shall be re8 sponsible for carrying out an integrated research, develop9 ment, and demonstration program on technologies for

10 treatment, recycling, and disposal of high-level nuclear ra11 dioactive waste and spent nuclear fuel, subject to the gen12 eral supervision of the Secretary. The Associate Director

13 of the Office shall report to the Director of the Office of

14 Nuclear Energy Science and Technology. The first such

15 Associate Director shall be appointed within 90 days of

16 the enactment of this Act.

17 (c) GRANT AND CONTRACT AUTHORITY.—In car18 rying out his responsibilities under this section, the Sec19 retary may make grants, or enter into contracts, for the

20 purposes of the research projects and activities described

21 in (d)(2).

22 (d)(1) DUTIES.—The Associate Director of the Office

23 shall involve national laboratories, universities, the com24 mercial nuclear industry, and other organizations to inves25 tigate technologies for the treatment, recycling, and dis-
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1 posal of spent nuclear fuel and high-level radioactive

2 waste.

3 (2) The Associate Director of the Office shall:

4 (A) develop a research plan to provide rec5 ommendations by 2015;

6 (B) identify technologies for the treatment, re7 cycling, and disposal of spent nuclear fuel and high8 level radioactive waste;

9 (C) conduct research and development activities

10 on such technologies;

11 (D) ensure that all activities include as key ob12 jectives minimization of proliferation concerns and

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

14 as well as development of cost-effective technologies;

15 (E) require research on both reactor- and accel16 erator-based transmutation systems;

17 (F) require research on advanced processing

18 and separations;

19 (G) encourage that research efforts include par20 ticipation of international collaborators;

21 (H) be authorized to fund international collabo22 rators when they bring unique capabilities not avail23 able in the United States and their host country is

24 unable to provide for their support;
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1 (I) ensure that research efforts with the Office

2 are coordinated with research on advance fuel cycles

3 and reactors conducted within the Office of Nuclear

4 Energy Science and Technology.

5 (e) REPORT.—The Associate Director of the Office

6 of Spent Nuclear Fuel Research shall annually prepare

7 and submit a report to the Congress on the activities and

8 expenditures of the Office, including the process that has

9 been made to achieve the objectives of paragraph (b).

10 Subtitle D—Coal Resources

11 SEC. 420. COAL GENERATING CAPACITY.

12 The Secretary of Energy shall examine existing coal13 fired power plants and submit a report to the Congress

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

15 potential of such plants for increased generation and any

16 impediments to achieving such increase. The report shall

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

18 these plants. The report shall include recommendations for

19 a program of research, development, demonstration, and

20 commercial application to develop economically and envi21 ronmentally acceptable advanced technologies for current

22 electricity generation facilities using coal as the primary

23 feedstock, including commercial-scale applications of ad24 vanced clean coal technologies. The report shall also in25 clude an assessment of the costs to develop and dem-
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1 onstrate such technologies and the time required to under2 take such development and demonstration.

3 SEC. 425. COAL LIQUEFACTION.

4 The Secretary of Energy shall provide grants for the

5 refinement and demonstration of new technologies for the

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

7 design and construction of an indirect liquefaction plant

8 capable of production in commercial quantities. There are

9 authorized to be appropriated for the purpose of this sec10 tion such sums as may be necessary through fiscal year

11 2004.

12 TITLE V—ARCTIC COASTAL

13 PLAIN DOMESTIC ENERGY SE14 CURITY ACT OF 2000

15 SEC. 501. SHORT TITLE

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

17 Domestic Energy Security Act of 2000’’.

18 SEC. 502. DEFINITIONS.

19 When used in this title the term—

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

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

22 Refuge’’, dated August 1980, as referenced in sec23 tion 1002(b) of the Alaska National Interest Lands

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

25 comprising approximately 1,549,000 acres; and
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1 (2) ‘‘Secretary’’, except as otherwise provided,

2 means the Secretary of the Interior or the Sec3 retary’s designee.

4 SEC. 503. LEASING PROGRAM FOR LANDS WITHIN THE

5 COASTAL PLAIN.

6 (a) AUTHORIZATION.—The Congress hereby author7 izes and directs the Secretary, acting through the Bureau

8 of Land Management in consultation with the Fish and

9 Wildlife Service and other appropriate Federal offices and

10 agencies, to take such actions as are necessary to establish

11 and implement a competitive oil and gas leasing program

12 that will result in an environmentally sound program for

13 the exploration, development, and production of the oil

14 and gas resources of the Coastal Plain and to administer

15 the provisions of this title through regulations, lease

16 terms, conditions, restrictions, prohibitions, stipulations,

17 and other provisions that ensure the oil and gas explo18 ration, development, and production activities on the

19 Coastal Plain will result in no significant adverse effect

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

21 and the environment, and shall require the application of

22 the best commercially available technology for oil and gas

23 exploration, development, and production, on all new ex24 ploration, development, and production operations, and

25 whenever practicable, on existing operations, and in a
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1 manner to ensure the receipt of fair market value by the

2 public for the mineral resources to be leased.

3 (b) REPEAL.—The prohibitions and limitations con4 tained in section 1003 of the Alaska National Interest

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

6 hereby repealed.

7 (c) COMPATIBILITY.—Congress hereby determines

8 that the oil and gas leasing program and activities author9 ized by this section in the Coastal Plain are compatible

10 with the purposes for which the Arctic National Wildlife

11 Refuge was established, and that no further findings or

12 decisions are required to implement this determination.

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

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

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

16 State and local regulatory authority.

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

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

19 Oil and Gas Royalty Management Act of 1982.

20 (f) SPECIAL AREAS.—The Secretary, after consulta21 tion with the State of Alaska, City of Kaktovik, and the

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

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

24 and close such areas to leasing if the Secretary determines

25 that these Special Areas are of such unique character and
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1 interest so as to require special management and regu2 latory protection. The Secretary may, however, permit

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

4 Coastal Plain by setting lease terms that limit or condition

5 surface use and occupancy by lessees of such lands but

6 permit the use of horizontal drilling technology from sites

7 on leases located outside the designated Special Areas.

8 (g) LIMITATION ON CLOSED AREAS.—The Sec9 retary’s sole authority to close lands within the Coastal

10 Plain to oil and gas leasing and to exploration, develop11 ment, and production is that set forth in this title.

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

13 revenues by removing clouds on title of lands and clari14 fying land ownership patterns within the Coastal Plain,

15 the Secretary, notwithstanding the provisions of section

16 1302(h)(2) of the Alaska National Interest Lands Con17 servation Act (16 U.S.C. 3192(h)(2)), is authorized and

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

19 the surface estate of the lands described in paragraph 2

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

21 to fulfill the Corporation’s entitlement under section 12

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

23 1611), and (2) to the Arctic Slope Regional Corporation

24 the subsurface estate beneath such surface estate pursu25 ant to the August 9, 1983, agreement between the Arctic
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1 Slope Regional Corporation and the United States of

2 America.

3 SEC. 504. RULES AND REGULATIONS.

4 (a) PROMULGATION.—The Secretary shall prescribe

5 such rules and regulations as may be necessary to carry

6 out the purposes and provisions of this title, including

7 rules and regulations relating to protection of the fish and

8 wildlife, their habitat, subsistence resources, and the envi9 ronment of the Coastal Plain. Such rules and regulations

10 shall be promulgated no later than fourteen months after

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

12 effective date, apply to all operations conducted under a

13 lease issued or maintained under the provisions of this

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

15 leasing, exploration, development, and production of oil

16 and gas.

17 (b) REVISION OF REGULATIONS.—The Secretary

18 shall periodically review and, if appropriate, revise the

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

20 section to reflect any significant biological, environmental,

21 or engineering data which come to the Secretary’s atten22 tion.
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1 SEC. 505. ADEQUACY OF THE DEPARTMENT OF THE INTE2 RIOR’S LEGISLATIVE ENVIRONMENTAL IM3 PACT STATEMENT.

4 The ‘‘Final Legislative Environmental Impact State5 ment’’ (April 1987) on the Coastal Plain prepared pursu6 ant to section 1002 of the Alaska National Interest Lands

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

8 102(2)(C) of the National Environmental Policy Act of

9 1969 (42 U.S.C. 4332(2)(C)) is hereby found by the Con10 gress to be adequate to satisfy the legal and procedural

11 requirements of the National Environmental Policy Act of

12 1969 with respect to actions authorized to be taken by

13 the Secretary to develop and promulgate the regulations

14 for the establishment of the leasing program authorized

15 by this title, to conduct the first lease sale and any subse16 quent lease sale authorized by this title, and to grant

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

18 this title.

19 SEC. 506. LEASE SALES.

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

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

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

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

24 (b) PROCEDURES.—The Secretary shall, by regula25 tion, establish procedures for—
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1 (1) receipt and consideration of sealed nomina2 tions for any area in the Coastal Plain for inclusion

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

4 a lease sale; and

5 (2) public notice of and comment on designa6 tion of areas to be included in, or excluded from, a

7 lease sale.

8 (c) LEASE SALES ON COASTAL PLAIN.—The Sec9 retary shall, by regulation, provide for lease sales of lands

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

11 shall occur after the nomination process provided for in

12 subsection (b) of this section. For the first lease sale, the

13 Secretary shall offer for lease those acres receiving the

14 greatest number of nominations, but no less than two hun15 dred thousand acres and no more than three hundred

16 thousand acres shall be offered. If the total acreage nomi17 nated is less than two hundred thousand acres, the Sec18 retary shall include in such sale any other acreage which

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

20 event shall more than three hundred thousand acres of

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

22 to subsequent lease sales, the Secretary shall offer for

23 lease no less than two hundred thousand acres of the

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

25 twenty months of the date of enactment of this title. The
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1 second lease sale shall be held no later than twenty-four

2 months after the initial sale, with additional sales con3 ducted no later than twelve months thereafter so long as

4 sufficient interest in development exists to warrant, in the

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

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

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

8 grant to the highest responsible qualified bidder by sealed

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

10 Coastal Plain upon payment by the lessee of such bonus

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

12 as may be fixed in the lease, which shall be not less then

121 13 ⁄2 per centum in amount or value of the production

14 removed or sold from the lease.

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

16 a proposed lease sale and before the acceptance of bids

17 and the issuance of leases based on such bids, the Sec18 retary shall allow the Attorney General, in consultation

19 with the Federal Trade Commission, thirty days to per20 form an antitrust review of the results of such lease sale

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

22 on competition and the Attorney General shall advise the

23 Secretary with respect to such review, including any rec24 ommendation for the nonacceptance of any bid or the im25 position of terms or conditions on any lease, as may be
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1 appropriate to prevent any situation inconsistent with the

2 antitrust laws.

3 (c) SUBSEQUENT TRANSFERS.—No lease issued

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

5 or otherwise transferred except with the approval of the

6 Secretary. Prior to any such approval the Secretary shall

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

8 the Attorney General.

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

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

11 business organization immunity from civil or criminal li12 ability, or to create defenses to actions, under any anti13 trust law.

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

15 term—

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

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

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

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

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

21 amended.

22 SEC. 508. LEASE TERMS AND CONDITIONS.

23 An oil or gas lease issued pursuant to this title

24 shall—
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1 (1) be for a tract consisting of a compact area

2 not to exceed five thousand seven hundred sixty

3 acres, or nine surveyed or protracted sections which

4 shall be as compact in form as possible;

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

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

7 is produced in paying quantities from the lease or

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

9 long as drilling or reworking operations, as approved

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

11 area;

12 (3) require the payment of royalty as provided

13 for in section 507 of this title;

14 (4) require that exploration activities pursuant

15 to any lease issued or maintained under this title

16 shall be conducted in accordance with an exploration

17 plan or a revision of such plan approved by the Sec18 retary;

19 (5) require that all development and production

20 pursuant to a lease issued or maintained pursuant

21 to this title shall be conducted in accordance with

22 development and production plans approved by the

23 Secretary;

24 (6) require posting of bond as required by sec25 tion 509 of this title;
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1 (7) provide that the Secretary may close, on a

2 seasonal basis, portions of the Coastal Plain to ex3 ploratory drilling activities as necessary to protect

4 caribou calving areas and other species of fish and

5 wildlife;

6 (8) contain such provisions relating to rental

7 and other fees as the Secretary may prescribe at the

8 time of offering the area for lease;

9 (9) provide that the Secretary may direct or as10 sent to the suspension of operations and production

11 under any lease granted under the terms of this title

12 in the interest of conservation of the resource or

13 where there is no available system to transport the

14 resource. If such a suspension is directed or as15 sented to by the Secretary, any payment of rental

16 prescribed by such lease shall be suspended during

17 such period of suspension of operations and produc18 tion, and the term of the lease shall be extended by

19 adding any such suspension period thereto;

20 (10) provide that whenever the owner of a non21 producing lease fails to comply with any of the pro22 visions of this Act, or of any applicable provision of

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

24 or of any regulation issued under this title, such

25 lease may be canceled by the Secretary if such de-
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1 fault continues for more than thirty days after mail2 ing of notice by registered letter to the lease owner

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

4 (11) provide that whenever the owner of any

5 producing lease fails to comply with any of the pro6 visions of this title, or of any applicable provision of

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

8 or of any regulation issued under this title, such

9 lease may be forfeited and canceled by any appro10 priate proceeding brought by the Secretary in any

11 United States district court having jurisdiction

12 under the provisions of this title;

13 (12) provide that cancellation of a lease under

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

15 lease from the obligation to provide for reclamation

16 of the lease site;

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

18 Secretary, to make written relinquishment of all

19 rights under any lease issued pursuant to this title.

20 The Secretary shall accept such relinquishment by

21 the lessee of any lease issued under this title where

22 there has not been surface disturbance on the lands

23 covered by the lease;

24 (14) provide that for the purpose of conserving

25 the natural resources of any oil or gas pool, field, or
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1 like area, or any part thereof, and in order to avoid

2 the unnecessary duplication of facilities, to protect

3 the environment of the Coastal Plain, and to protect

4 correlative rights, the Secretary shall require that, to

5 the greatest extent practicable, lessees unite with

6 each other in collectively adopting and operating

7 under a cooperative or unit plan of development for

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

9 part thereof, and the Secretary is also authorized

10 and directed to enter into such agreements as are

11 necessary or appropriate for the protection of the

12 United States against drainage;

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

14 on lands within the Coastal Plain shall be fully re15 sponsible and liable for the reclamation of lands

16 within the Coastal Plain and any other Federal

17 lands adversely affected in connection with explo18 ration, development, production or transportation

19 activities on a lease within the Coastal Plain by the

20 holder of a lease or as a result of activities con21 ducted on the lease by any of the leaseholder’s sub22 contractors or agents;

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

24 delegate or convey, by contract of otherwise, the rec25 lamation responsibility and liability to another party
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1 without the express written approval of the Sec2 retary;

3 (17) provide that the standard of reclamation

4 for lands required to be reclaimed under this title

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

6 supporting the uses which the lands were capable of

7 supporting prior to any exploration, development, or

8 production activities, or upon application by the les9 see, to a higher or better use as approved by the

10 Secretary;

11 (18) contain the terms and conditions relating

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

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

14 this title;

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

16 agents, and contractors use best efforts to provide a

17 fair share, as determined by the level of obligation

18 previously agreed to in the 1974 agreement imple19 menting section 29 of the Federal Agreement and

20 Grant of Right of Way for the Operation of the

21 Trans-Alaska Pipeline, of employment and con22 tracting for Alaska Natives and Alaska Native Cor23 porations from throughout the State;

24 (20) require project agreements to the extent

25 feasible that will ensure productivity and consistency
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1 recognizing a national interest in both labor stability

2 and the ability of construction labor and manage3 ment to meet the particular needs and conditions of

4 projects to be developed under leases issued pursu5 ant to this Act; and

6 (21) contain such other provisions as the Sec7 retary determines necessary to ensure compliance

8 with the provisions of this title and the regulations

9 issued under this title.

10 SEC. 509. BONDING REQUIREMENTS TO ENSURE FINANCIAL

11 RESPONSIBILITY OF LESSEE AND AVOID FED12 ERAL LIABILITY.

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

14 regulation, establish such standards as may be necessary

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

16 arrangement will be established prior to the commence17 ment of surface disturbing activities on any lease, to en18 sure the complete and timely reclamation of the lease

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

20 adversely affected by lease operations after the abandon21 ment or cessation of oil and gas operations on the lease.

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

23 to, and not in lieu, of any bond, surety, or financial ar24 rangement required by any other regulatory authority or

25 required by any other provision of law.
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1 (b) AMOUNT.—The bond, surety, or financial ar2 rangement shall be in an amount—

3 (1) to be determined by the Secretary to pro4 vide for reclamation of the lease site in accordance

5 with an approved or revised exploration or develop6 ment and production plan; plus

7 (2) set by the Secretary consistent with the

8 type of operations proposed, to provide the means

9 for rapid and effective cleanup, and to minimize

10 damages resulting from an oil spill, the escape of

11 gas, refuse, domestic wastewater, hazardous or toxic

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

13 (c) ADJUSTMENT.—In the event that an approved ex14 ploration or development and production plan is revised,

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

16 or other financial arrangement to conform to such modi17 fied plan.

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

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

20 financial arrangement shall continue until such time as

21 the Secretary determines that there has been compliance

22 with the terms and conditions of the lease and all applica23 ble law.

24 (e) TERMINATION.—Within sixty days after deter25 mining that there has been compliance with the terms and
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1 conditions of the lease and all applicable laws, the Sec2 retary, after consultation with affected Federal and State

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

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

5 been terminated.

6 SEC. 510. OIL AND GAS INFORMATION.

7 (a) IN GENERAL.—(1) Any lessee or permittee con8 ducting any exploration for, or development or production

9 of, oil or gas pursuant to this title shall provide the Sec10 retary access to all data and information from any lease

11 granted pursuant to this title (including processed and

12 analyzed) obtained from such activity and shall provide

13 copies of such data and information as the Secretary may

14 request. Such data and information shall be provided in

15 accordance with regulations which the Secretary shall pre16 scribe.

17 (2) If processed and analyzed information provided

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

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

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

21 upon such processed and analyzed information.

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

23 the Secretary, pursuant to paragraph (1)—

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

25 manner of processing which is utilized by such lessee
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1 or permittee in the normal conduct of business, the

2 Secretary shall pay the reasonable cost of reproduc3 ing such data and information; or

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

5 and manner of processing as the Secretary may re6 quest, the Secretary shall pay the reasonable cost of

7 processing and reproducing such data and informa8 tion.

9 (b) REGULATIONS.—The Secretary shall prescribe

10 regulations to: (1) assure that the confidentiality of privi11 leged or proprietary information received by the Secretary

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

13 the time periods and conditions which shall be applicable

14 to the release of such information.

15 SEC. 511. EXPEDITED JUDICIAL REVIEW.

16 (a) Any complaint seeking judicial review of any pro17 vision in this title, or any other action of the Secretary

18 under this title may be filed in any appropriate district

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

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

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

22 solely on grounds arising after such ninetieth day, in

23 which case the complaint must be filed within ninety days

24 after the complainant knew or reasonably should have

25 known of the grounds for the complaint: Provided, That
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1 any complaint seeking judicial review of an action of the

2 Secretary in promulgating any regulation under this title

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

4 for the District of Columbia.

5 (b) Actions of the Secretary with respect to which re6 view could have been obtained under this section shall not

7 be subject to judicial review in any civil or criminal pro8 ceeding for enforcement.

9 SEC. 512. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN.

10 Notwithstanding title XI of the Alaska National In11 terest Lands Conservation Act of 1980 (16 U.S.C. 3161

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

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

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

15 (30 U.S.C. 185), rights-of-way and easements across the

16 Coastal Plain for the transportation of oil and gas under

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

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

19 wildlife, subsistence resources, their habitat, and the envi20 ronment of the Coastal Plain. Such terms and conditions

21 shall include requirements that facilities be sited or modi22 fied so as to avoid unnecessary duplication of roads and

23 pipelines. The regulations issued as required by section

24 504 of this title shall include provisions granting rights25 of-way and easements across the Coastal Plain.
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1 SEC. 513. ENFORCEMENT OF SAFETY AND ENVIRON2 MENTAL REGULATIONS TO ENSURE COMPLI3 ANCE WITH TERMS AND CONDITIONS OF

4 LEASE.

5 (a) RESPONSIBILITY OF THE SECRETARY.—The Sec6 retary shall diligently enforce all regulations, lease terms,

7 conditions, restrictions, prohibitions, and stipulations pro8 mulgated pursuant to this title.

9 (b) RESPONSIBILITY OF HOLDERS OF LEASE.—It

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

11 this title to—

12 (1) maintain all operations within such lease

13 area in compliance with regulations intended to pro14 tect persons and property on, and fish and wildlife,

15 their habitat, subsistence resources, and the environ16 ment of, the Coastal Plain; and

17 (2) allow prompt access at the site of any oper18 ations subject to regulation under this title to any

19 appropriate Federal or State inspector, and to pro20 vide such documents and records which are pertinent

21 to occupational or public health, safety, or environ22 mental protection, as may be requested.

23 (c) ON-SITE INSPECTION.—The Secretary shall pro24 mulgate regulations to provide for—

25 (1) scheduled onsite inspection by the Sec26 retary, at least twice a year, of facility on the Coast-
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1 al Plain which is subject to any environmental or

2 safety regulation promulgated pursuant to this title

3 or conditions contained in any lease issue pursuant

4 to this title to assure compliance with such environ5 mental or safety regulations or conditions; and

6 (2) periodic onsite inspection by the Secretary

7 at least once a year without advance notice to the

8 operator of such facility to assure compliance with

9 all environmental or safety regulations.

10 SEC. 514. NEW REVENUES.

11 Notwithstanding any other provision of law, all reve12 nues received by the Federal Government from competitive

13 bids, sales, bonuses, royalties, rents, fees, or interest de14 rived from the leasing of oil and gas within the Coastal

15 Plain shall be deposited into the Treasury of the United

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

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

18 percentage of such revenues as is set forth under the head19 ing ‘‘EXPLORATION OF NATIONAL PETROLEUM

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

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

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

23 deposit the balance of all such revenues as miscellaneous

24 receipts in the Treasury.
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1 TITLE VI—IMPROVEMENTS TO

2 FEDERAL OIL AND GAS LEASE

3 MANAGEMENT

4 SEC. 601. TITLE.

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

6 Lease Management Improvement Act of 2000’’.

7 SEC. 602. DEFINITIONS.

8 In this title—

9 (a) APPLICATION FOR A PERMIT TO DRILL.—The

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

11 plan including design, mechanical, and engineering aspects

12 for drilling a well.

13 (b) FEDERAL LAND.—

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

15 means all land and interests in land owned by the

16 United States that are subject to the mineral leasing

17 laws, including mineral resources or mineral estates

18 reserved to the United States in the conveyance of

19 a surface or nonmineral estate.

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

21 does not include—

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

23 the Federal Oil and Gas Royalty Management

24 Act of 1982 (30 U.S.C. 1702)); or
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1 (ii) submerged land on the Outer Conti2 nental Shelf (as defined in section 2 of the

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

4 1331)).

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

6 term ‘‘oil and gas conservation authority’’ means the agen7 cy or agencies in each State responsible for regulating for

8 conservation purposes operations to explore for and

9 produce oil and natural gas.

10 (d) PROJECT.—The term ‘‘project’’ means an activity

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

12 explore for, develop, produce, or transport oil or gas re13 sources.

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

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

16 to land under the administrative jurisdiction of the

17 Department of the Interior; and

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

19 land under the administrative jurisdiction of the De20 partment of Agriculture.

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

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

23 use, disturbance, and reclamation.
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1 SEC. 603. NO PROPERTY RIGHT.

2 Nothing in this title gives a State a property right

3 or interest in any Federal lease or land.

4 Subtitle A—State Option To Regu5 late Oil and Gas Lease Oper6 ations on Federal Land

7 SEC. 610. TRANSFER OF AUTHORITY.

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

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

10 notify the Secretary of its intent to accept authority for

11 regulation of operations, as described in subparagraphs

12 (A) through (K) of subsection (b)(2), under oil and gas

13 leases on Federal land within the State.

14 (b) TRANSFER OF AUTHORITY.—

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

16 Secretary receives the State’s notice, authority for

17 the regulation of oil and gas leasing operations is

18 transferred from the Secretary to the State.

19 (2) AUTHORITY INCLUDED.—The authority

20 transferred under paragraph (1) includes—

21 (A) processing and approving applications

22 for permits to drill, subject to surface use

23 agreements and other terms and conditions de24 termined by the Secretary;

25 (B) production operations;

26 (C) well testing;
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1 (D) well completion;

2 (E) well spacing;

3 (F) communization;

4 (G) conversion of a producing well to a

5 water well;

6 (H) well abandonment procedures;

7 (I) inspections;

8 (J) enforcement activities; and

9 (K) site security.

10 (c) RETAINED AUTHORITY.—The Secretary shall—

11 (1) retain authority over the issuance of leases

12 and the approval of surface use plans of operations

13 and project-level environmental analyses; and

14 (2) spend appropriated funds to ensure that

15 timely decisions are made respecting oil and gas

16 leasing, taking into consideration multiple uses of

17 Federal land, socioeconomic and environmental im18 pacts, and the results of consultations with State

19 and local government officials.

20 SEC. 611. ACTIVITY FOLLOWING TRANSFER OF AUTHORITY.

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

22 authority, no Federal agency shall exercise the authority

23 formerly held by the Secretary as to oil and gas lease oper24 ations and related operations on Federal land.

25 (b) STATE AUTHORITY.—
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1 (1) IN GENERAL.—Following the transfer of au2 thority, each State shall enforce its own oil and gas

3 conservation laws and requirements pertaining to

4 transferred oil and gas lease operations and related

5 operations with due regard to the national interest

6 in the expedited, environmentally sound development

7 of oil and gas resources in a manner consistent with

8 oil and gas conservation principles.

9 (2) APPEALS.—Following a transfer of author10 ity under section 610, an appeal of any decision

11 made by a State oil and gas conservation authority

12 shall be made in accordance with State administra13 tive procedures.

14 (c) PENDING ENFORCEMENT ACTIONS.—The Sec15 retary may continue to enforce any pending actions re16 specting acts committed before the date on which author17 ity is transferred to a State under section 610 until those

18 proceedings are concluded.

19 (d) PENDING APPLICATIONS.—

20 (1) TRANSFER TO STATE.—All applications re21 specting oil and gas lease operations and related op22 erations on Federal land pending before the Sec23 retary on the date on which authority is transferred

24 under section 610 shall be immediately transferred
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1 to the oil and gas conservation authority of the

2 State in which the lease is located.

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

4 conservation authority shall act on the application in

5 accordance with State laws (including regulations)

6 and requirements.

7 Subtitle B—Use of Cost Savings

8 From State Regulation

9 SEC. 621. COMPENSATION FOR COSTS.

10 (a) IN GENERAL.—Subject to the availability of ap11 propriations, the Secretary shall compensate any State for

12 costs incurred to carry out the authorities transferred

13 under section 610.

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

15 not less frequently than every quarter.

16 (c) COST BREAKDOWN REPORT.—Each State seek17 ing compensation shall report to the Secretary a cost

18 breakdown for the authorities transferred.

19 (d) LIMITATION ON AMOUNT.—

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

21 may not exceed 50 percent of the Secretary’s allo22 cated cost for oil and gas leasing activities under

23 section 35(b) of the Act of February 25, 1920 (com24 monly known as the ‘‘Mineral Leasing Act’’) (30

25 U.S.C. 191(b)) for the State for fiscal year 1997.
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1 (2) ADJUSTMENT.—The Secretary shall adjust

2 the maximum level of cost compensation at least

3 once every 2 years to reflect any increases in the

4 Consumer Price Index (all items, United States city

5 average) as prepared by the Department of Labor,

6 using 1997 as the baseline year.

7 SEC. 622. EXCLUSION OF COSTS OF PREPARING PLANNING

8 DOCUMENTS AND ANALYSES.

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

10 U.S.C. 191(b)) is amended by adding at the end the fol11 lowing:

12 ‘‘(6) The Secretary shall not include, for the

13 purpose of calculating the deduction under para14 graph (1), costs of preparing resource management

15 planning documents and analyses for areas in which

16 mineral leasing is excluded or areas in which the pri17 mary activity under review is not mineral leasing

18 and development.’’.

19 SEC. 623. RECEIPT SHARING.

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

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

22 and inserting ‘‘paid to States (other than States that ac23 cept a transfer of authority under section 610 of the Fed24 eral Oil and Gas Lease Management Act of 2000)’’.
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1 Subtitle C—Streamlining and Cost

2 Reduction

3 SEC. 631. APPLICATIONS.

4 (a) LIMITATION ON COST RECOVERY.—Notwith5 standing sections 304 and 504 of the Federal Land Policy

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

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

8 shall not recover the Secretary’s costs with respect to ap9 plications and other documents relating to oil and gas

10 leases.

11 (b) COMPLETION OF PLANNING DOCUMENTS AND

12 ANALYSES.—

13 (1) IN GENERAL.—The Secretary shall complete

14 any resource management planning documents and

15 analyses not later than 90 days after receiving any

16 offer, application, or request for which a planning

17 document or analysis is required to be prepared.

18 (2) PREPARATION BY APPLICANT OR LESSEE.—

19 If the Secretary is unable to complete the document

20 or analysis within the time prescribed by paragraph

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

22 of the opportunity to prepare the required document

23 or analysis for the agency’s review and use in deci24 sionmaking.
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1 (c) REIMBURSEMENT FOR COSTS OF NEPA OF

2 ANALYSES, DOCUMENTATION, AND STUDIES.—If—

3 (1) adequate funding to enable the Secretary to

4 timely prepare a project-level analysis required

5 under the National Environmental Policy Act of

6 1969 (42 U.S.C. 4321 et seq.) with respect to an oil

7 or gas lease is not appropriated; and

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

9 owner voluntarily pays for the cost of the required

10 analysis, documentation, or related study;

11 the Secretary shall reimburse the lessee, operator, or oper12 ating rights owner for its costs through royalty credits at13 tributable to the lease, unit agreement, or project area.

14 SEC. 632. TIMELY ISSUANCE OF DECISIONS.

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

16 timely issuance of Federal agency decisions respecting oil

17 and gas leasing and operations on Federal land.

18 (b) OFFER TO LEASE.—

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

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

21 the filing of the offer.

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

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

24 deemed to have been accepted.

25 (c) APPLICATION FOR PERMIT TO DRILL.—
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1 (1) DEADLINE.—The Secretary and a State

2 that has accepted a transfer of authority under sec3 tion 610 shall approve or disapprove an application

4 for permit to drill not later than 30 days after re5 ceiving a complete application.

6 (2) FAILURE TO MEET DEADLINE.—If the ap7 plication is not acted on within the time prescribed

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

9 have been approved.

10 (d) SURFACE USE PLAN OF OPERATIONS.—The Sec11 retary shall approve or disapprove a surface use plan of

12 operations not later than 30 days after receipt of a com13 plete plan.

14 (e) ADMINISTRATIVE APPEALS.—

15 (1) DEADLINE.—From the time that a Federal

16 oil and gas lessee or operator files a notice of admin17 istrative appeal of a decision or order of an officer

18 or employee of the Department of the Interior or the

19 Forest Service respecting a Federal oil and gas Fed20 eral lease, the Secretary shall have 2 years in which

21 to issue a final decision in the appeal.

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

23 decision has been issued within the time prescribed

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

25 have been granted.
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1 SEC. 633. ELIMINATION OF UNWARRANTED DENIALS AND

2 STAYS.

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

4 unwarranted denials and stays of lease issuance and un5 warranted restrictions on lease operations are eliminated

6 from the administration of oil and gas leasing on Federal

7 land.

8 (b) LAND DESIGNATED FOR MULTIPLE USE.—

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

10 for multiple use under Bureau of Land Management

11 resource management plans and Forest Service leas12 ing analyses shall be available for oil and gas leasing

13 without lease stipulations more stringent than re14 strictions on surface use and operations imposed

15 under the laws (including regulations) of the State

16 oil and gas conservation authority unless the Sec17 retary includes in the decision approving the man18 agement plan or leasing analysis a written expla19 nation why more stringent stipulations are war20 ranted.

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

22 stringent stipulation shall be administratively ap23 pealable and, following a final agency decision, shall

24 be subject to judicial review.

25 (c) REJECTION OF OFFER TO LEASE.—
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1 (1) IN GENERAL.—If the Secretary rejects an

2 offer to lease on the ground that the land is unavail3 able for leasing, the Secretary shall provide a writ4 ten, detailed explanation of the reasons the land is

5 unavailable for leasing.

6 (2) PREVIOUS RESOURCE MANAGEMENT DECI7 SION.—If the determination of unavailability is

8 based on a previous resource management decision,

9 the explanation shall include a careful assessment of

10 whether the reasons underlying the previous decision

11 are still persuasive.

12 (3) SEGREGATION OF AVAILABLE LAND FROM

13 UNAVAILABLE LAND.—The Secretary may not reject

14 an offer to lease land available for leasing on the

15 ground that the offer includes land unavailable for

16 leasing, and the Secretary shall segregate available

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

18 following notice by the Secretary, before acting on

19 the offer to lease.

20 (d) DISAPPROVAL OR REQUIRED MODIFICATION OF

21 SURFACE USE PLANS OF OPERATIONS AND APPLICATION

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

23 written, detailed explanation of the reasons for dis24 approving or requiring modifications of any surface use

25 plan of operations or application for permit to drill.
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1 (e) EFFECTIVENESS OF DECISION.—A decision of the

2 Secretary respecting an oil and gas lease shall be effective

3 pending administrative appeal to the appropriate office

4 within the Department of the Interior or the Department

5 of Agriculture unless that office grants a stay in response

6 to a petition satisfying the criteria for a stay established

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

8 (or any successor regulation).

9 SEC. 634. REPORTS.

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

11 the Secretaries shall jointly submit to the Congress a re12 port explaining the most efficient means of eliminating

13 overlapping jurisdiction, duplication of effort, and incon14 sistent policymaking and policy implementation as be15 tween the Bureau of Land Management and the Forest

16 Service.

17 (b) RECOMMENDATIONS.—The report shall include

18 recommendations on statutory changes needed to imple19 ment the report’s conclusions.

20 SEC. 635. SCIENTIFIC INVENTORY OF OIL AND GAS RE21 SERVES.

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

23 the Secretary of the Interior, in consultation with the Di24 rector of the United States Geological Survey, shall pub25 lish, through notice in the Federal Register, a science-
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1 based national inventory of the oil and gas reserves and

2 potential resources underlying Federal land and the Outer

3 Continental Shelf.

4 (b) CONTENTS.—The inventory shall—

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

6 reserves and resources is currently available for leas7 ing and development; and

8 (2) specify the percentages of the reserves and

9 resources that are on—

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

11 date of enactment of this Act that has never

12 been leased;

13 (B) land that is open for leasing or devel14 opment subject to no surface occupancy stipula15 tions; and

16 (C) land that is open for leasing or devel17 opment subject to other lease stipulations that

18 have significantly impeded or prevented, or are

19 likely to significantly impede or prevent, devel20 opment; and

21 (3) indicate the percentage of oil and gas re22 sources that are not available for leasing or are

23 withdrawn from leasing.

24 (c) PUBLIC COMMENT.—
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1 (1) IN GENERAL.—The Secretary of the Inte2 rior shall invite public comment on the inventory to

3 be filed not later than September 30, 2001.

4 (2) RESOURCE MANAGEMENT DECISIONS.—Spe5 cifically, the Secretary of the Interior shall invite

6 public comment on the effect of Federal resource

7 management decisions on past and future oil and

8 gas development.

9 (d) REPORT.—

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

11 2002, the Secretary of the Interior shall submit to

12 the President of the Senate and the Speaker of the

13 House of Representatives a report comprised of the

14 revised inventory and responses to the public com15 ments.

16 (2) CONTENTS.—The report shall specifically

17 indicate what steps the Secretaries believe are nec18 essary to increase the percentage of land open for

19 development of oil and gas resources.

20 Subtitle D—Federal Royalty

21 Certainty

22 SEC. 641. DEFINITIONS.

23 In this subtitle.—

24 (a) MARKETABLE CONDITION.—The term ‘‘market25 able condition’’ means lease production that is sufficiently
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1 free from impurities and otherwise in a condition that the

2 production will be accepted by a purchaser under a sales

3 contract typical for the field or area.

4 (b) REASONABLE COMMERCIAL RATE.—

5 (1) IN GENERAL.—The term ‘‘reasonable com6 mercial rate’’ means—

7 (A) in the case of an arm’s-length con8 tract, the actual cost incurred by the lessee; or

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

10 contract—

11 (i) the rate charged in a contract for

12 similar services in the same area between

13 parties with opposing economic interests;

14 or

15 (ii) if there are no arm’s-length con16 tracts for similar services in the same area,

17 the just and reasonable rate for the trans18 portation service rendered by the lessee or

19 lessee’s affiliate.

20 (2) DISPUTES.—Disputes between the Sec21 retary and a lessee over what constitutes a just and

22 reasonable rate for such service shall be resolved by

23 the Federal Energy Regulatory Commission.
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1 SEC. 642. AMENDMENT OF OUTER CONTINENTAL SHELF

2 LANDS ACT.

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

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

5 semicolon at the end and adding the following:

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

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

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

9 marketable condition, and the royalty due in amount

10 shall be based on the royalty share of production at

11 the lease; if the payment in value or amount is cal12 culated from a point away from the lease, the pay13 ment shall be adjusted for quality and location dif14 ferentials, and the lessee shall be allowed reimburse15 ments at a reasonable commercial rate for transpor16 tation (including transportation to the point where

17 the production is put in marketable condition), mar18 keting, processing, and other services beyond the

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

20 delivery;’’.

21 SEC. 643. AMENDMENT OF MINERAL LEASING ACT.

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

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

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

25 ‘‘(3) ROYALTY DUE IN VALUE.—
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1 ‘‘(A) IN GENERAL.—Royalty due in value

2 shall be based on the value of oil or gas produc3 tion at the lease in marketable condition, and

4 the royalty due in amount shall be based on the

5 royalty share of production at the lease.

6 ‘‘(B) CALCULATION OF VALUE OR AMOUNT

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

8 payment in value or amount is calculated from

9 a point away from the lease—

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

11 quality and location differentials; and

12 ‘‘(ii) the lessee shall be allowed reim13 bursements at a reasonable commercial

14 rate for transportation (including transpor15 tation to the point where the production is

16 put in marketable condition), marketing,

17 processing, and other services beyond the

18 lease through the point of sale, other dis19 position, or delivery;’’.

20 SEC. 644. INDIAN LAND.

21 This subtitle shall not apply with respect to Indian

22 land.
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1 Subtitle E—Royalty Reinvestment

2 in America

3 SEC. 651. ROYALTY INCENTIVE PROGRAM.

4 (a) IN GENERAL.—To encourage exploration and de5 velopment expenditures on Federal land and the Outer

6 Continental Shelf for the development of oil and gas re7 sources when the cash price of West Texas Intermediate

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

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

10 days or when natural gas prices as delivered at Henry

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

12 thermal units for 90 consecutive days, the Secretary shall

13 allow a credit against the payment of royalties on Federal

14 oil production and gas production, respectively, in an

15 amount equal to 20 percent of the capital expenditures

16 made on exploration and development activities on Federal

17 oil and gas leases.

18 (b) NO CREDITING AGAINST ONSHORE FEDERAL

19 ROYALTY OBLIGATIONS.—In no case shall such capital ex20 penditures made on Outer Continental Shelf leases be

21 credited against onshore Federal royalty obligations.

22 SEC. 652. MARGINAL WELL PRODUCTION INCENTIVES.

23 To enhance the economics of marginal oil and gas

24 production by increasing the ultimate recovery from mar25 ginal wells when the cash price of West Texas Inter-
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1 mediate crude oil, as posted on the Dow Jones Commod2 ities Index Chart is less than $18 per barrel for 90 con3 secutive pricing days or when natural gas prices are deliv4 ered at Henry Hub, Louisiana, are less than $2.30 per

5 million British thermal units for 90 consecutive days, the

6 Secretary shall reduce the royalty rate as production de7 clines for—

8 (1) onshore oil wells producing less than 30

9 barrels per day;

10 (2) onshore gas wells producing less than 120

11 million British thermal units per day;

12 (3) offshore oil wells producing less than 300

13 barrels of oil per day; and

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

15 million British thermal units per day.

16 SEC. 653. SUSPENSION OF PRODUCTION ON OIL AND GAS

17 OPERATIONS.

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

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

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

21 U.S.C. 181 et seq.) or the Mineral Leasing Act for Ac22 quired Lands (30 U.S.C. 351 et seq.) may submit a notice

23 to the Secretary of the Interior of suspension of operation

24 and production at the well.
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1 (b) PRODUCTION QUANTITIES NOT A FACTOR.—A

2 notice under subsection (a) may be submitted without re3 gard to per day production quantities at the well and with4 out regard to the requirements of subsection (a) of section

5 3103.4–4 of title 43 of the Code of Federal Regulations

6 (or any successor regulation) respecting the granting of

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

8 an office in the Department of the Interior designated by

9 the Secretary of the Interior.

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

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

12 well may suspend operation and production at the well for

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

14 and ending on the later of—

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

16 which the suspension of operation and production

17 commences; or

18 (2) the date on which the cash price of West

19 Texas Intermediate crude oil, as posted on the Dow

20 Jones Commodities Index chart is greater than $15

21 per barrel for 90 consecutive pricing days.
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1 TITLE VII—FRONTIER OIL AND

2 GAS EXPLORATION AND DE3 VELOPMENT INCENTIVES

4 SEC. 701. TITLE.

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

6 and Development Incentives Act of 2000’’.

7 SEC. 702. AMENDMENTS TO THE OUTER CONTINENTAL

8 SHELF LANDS ACT.

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

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

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

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

13 Arctic areas of Alaska, where the Secretary is authorized

to set the net profit share at 162 14 ⁄3 percent. For purposes

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

16 Chukchi Sea Planning Areas of Alaska.’’.

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

18 Act (43 U.S.C. 1337(a)) is amended by adding a new sub19 paragraph (10) at the end thereof:

20 ‘‘(10) After an oil and gas lease is granted pur21 suant to any of the bidding systems of paragraph

22 (1) of this subsection, the Secretary shall reduce any

23 future royalty or rental obligation of the lessee on

24 any lease issued by the Secretary (and proposed by

25 the lessee for such reduction) by an amount equal to
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1 (a) 10 percent of the qualified costs of exploratory

2 wells drilled or geophysical work performed on any

3 lease issued by the Secretary, whichever is greater,

4 pursuant to this Act in Arctic areas and (b) an addi5 tional 10 percent of the qualified costs of any such

6 exploratory wells which are located ten or more miles

7 from another well drilled for oil and gas. For pur8 poses of this Act—‘qualified costs’ shall mean the

9 costs allocated to the exploratory well or geophysical

10 work in support of an exploration program pursuant

11 to 26 U.S.C. as amended; ‘exploratory well’ shall

12 mean either an exploratory well as defined by the

13 United States Securities and Exchange Commission

14 in 17 C.F.R. 210.4–10(a)(10), as amended, or a well

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

16 pipeline which transports oil or gas to a market or

17 terminal; ‘geophysical work’ shall mean all geo18 physical data gathering methods used in hydro19 carbon exploration and includes seismic, gravity,

20 magnetic, and electromagnetic measurements; and,

21 all distances shall be measured in horizontal dis22 tance. When a measurement beginning or ending

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

24 bottom hole location of that well.’’.
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1 TITLE VII—TAX MEASURES TO

2 ENHANCE DOMESTIC OIL AND

3 GAS PRODUCTION

4 Subtitle A—Marginal Well

5 Preservation

6 SEC. 801. SHORT TITLE; PURPOSE; AMENDMENT OF 1986

7 CODE.

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

9 Preservation Act of 2000’’.

10 (b) The purpose of section 802 is to prevent the aban11 donment of marginal oil and gas wells responsible for half

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

13 States and of section 803 is to recognize that geological

14 and geophysical expenditures and delay rentals are ordi15 nary and necessary business expenses that should be de16 ducted in the year the expense is incurred.

17 (c) Except as otherwise expressly provided, whenever

18 in this subtitle an amendment or repeal is expressed in

19 terms of an amendment to, or repeal of, a section or other

20 provision, the reference shall be considered to be made to

21 a section or other provision of the Internal Revenue Code

22 of 1986.
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1 SEC. 802. TAX CREDIT FOR MARGINAL DOMESTIC OIL AND

2 NATURAL GAS WELL PRODUCTION.

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

4 1 (relating to business credits) is amended by adding at

5 the end the following new section:

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

7 MARGINAL WELLS.

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

9 the marginal well production credit for any taxable year

10 is an amount equal to the product of—

11 ‘‘(1) the credit amount, and

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

13 qualified natural gas production which is attrib14 utable to the taxpayer.

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

16 section—

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

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

19 production, and

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

21 qualified natural gas production.

22 ‘‘(2) REDUCTION AS OIL AND GAS PRICES IN23 CREASE.—

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

25 amounts under paragraph (1) shall each be re26 duced (but not below zero) by an amount which
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1 bears the same ratio to such amount (deter2 mined without regard to this paragraph) as—

3 ‘‘(i) the excess (if any) of the applica4 ble reference price over $14 ($1.56 for

5 qualified natural gas production), bears to

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

7 gas production).

8 The applicable reference price for a taxable

9 year is the reference price for the calendar year

10 preceding the calendar year in which the tax11 able year begins.

12 ‘‘(B) INFLATION ADJUSTMENT.—In the

13 case of any taxable year beginning in a calendar

14 year after 2000, each of the dollar amounts

15 contained in subparagraph (A) shall be in16 creased to an amount equal to such dollar

17 amount multiplied by the inflation adjustment

18 factor for such calendar year (determined under

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

20 ‘1990’).

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

22 this paragraph, the term ‘reference price’

23 means, with respect to any calendar year—
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1 ‘‘(i) in the case of qualified crude oil

2 production, the reference price determined

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

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

5 gas production, the Secretary’s estimate of

6 the annual average wellhead price per

7 1,000 cubic feet for all domestic natural

8 gas.

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

10 PRODUCTION.—For purposes of this section—

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

12 oil production’ and ‘qualified natural gas production’

13 mean domestic crude oil or natural gas which is pro14 duced from a marginal well.

15 ‘‘(2) LIMITATION ON AMOUNT OF PRODUCTION

16 WHICH MAY QUALIFY.—

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

18 gas produced during any taxable year from any

19 well shall not be treated as qualified crude oil

20 production or qualified natural gas production

21 to the extent production from the well during

22 the taxable year exceeds 1,095 barrels or barrel

23 equivalents.

24 ‘‘(B) PROPORTIONATE REDUCTIONS.—
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1 ‘‘(i) SHORT TAXABLE YEARS.—In the

2 case of a short taxable year, the limitations

3 under this paragraph shall be proportion4 ately reduced to reflect the ratio which the

5 number of days in such taxable year bears

6 to 365.

7 ‘‘(ii) WELLS NOT IN PRODUCTION EN8 TIRE YEAR.—In the case of a well which is

9 not capable of production during each day

10 of a taxable year, the limitations under

11 this paragraph applicable to the well shall

12 be proportionately reduced to reflect the

13 ratio which the number of days of produc14 tion bears to the total number of days in

15 the taxable year.

16 ‘‘(3) DEFINITIONS.—

17 ‘‘(A) MARGINAL WELL.—The term ‘mar18 ginal well’ means a domestic well—

19 ‘‘(i) the production from which during

20 the taxable year is treated as marginal

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

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

23 ‘‘(I) has average daily production

24 of not more than 25 barrel equiva25 lents, and
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1 ‘‘(II) produces water at a rate

2 not less than 95 percent of total well

3 effluent.

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

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

6 the meanings given such terms by section

7 613A(e).

8 ‘‘(C) BARREL EQUIVALENT.—The term

9 ‘barrel equivalent’ means, with respect to nat10 ural gas, a conversion ratio of 6,000 cubic feet

11 of natural gas to 1 barrel of crude oil.

12 ‘‘(d) OTHER RULES.—

13 ‘‘(1) PRODUCTION ATTRIBUTABLE TO THE TAX14 PAYER.—In the case of a marginal well in which

15 there is more than one owner of operating interests

16 in the well and the crude oil or natural gas produc17 tion exceeds the limitation under subsection (c)(2),

18 qualifying crude oil production or qualifying natural

19 gas production attributable to the taxpayer shall be

20 determined on the basis of the ratio which tax21 payer’s revenue interest in the production bears to

22 the aggregate to the revenue interests of all oper23 ating interest owners in the production.

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

25 credit under this section may be claimed only on
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1 production which is attributable to the holder of an

2 operating interest.

3 ‘‘(3) PRODUCTION FROM NONCONVENTIONAL

4 SOURCES EXCLUDED.—In the case of production

5 from a marginal well which is eligible for the credit

6 allowed under section 29 for the taxable year, no

7 credit shall be allowable under this section unless

8 the taxpayer elects not to claim credit under section

9 29 with respect to the well.’’.

10 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec11 tion 38(b) is amended by striking ‘‘plus’’ at the end of

12 paragraph (11), by striking the period at the end of para13 graph (12) and inserting’’, plus’’, and by adding at the

14 end of the following new paragraph—

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

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

17 (c) CREDIT ALLOWED AGAINST REGULAR AND MIN18 IMUM TAX.—

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

20 (relating to limitation based on amount of tax) is

21 amended by redesignating paragraph (3) as para22 graph (4) and by inserting after paragraph (2) the

23 following new 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) is amended by inserting

23 ‘‘or the marginal oil and gas well production credit’’

24 after ‘‘employment credit’’.
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1 (d) CARRYBACK.—Subsection (a) of section 39 (relat2 ing to carryback and carryforward of unused credits gen3 erally) is amended by adding at the end the following new

4 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 year’ for ‘1 taxable

13 year’ 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 thereo, 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) is amended by striking ‘‘There’’ and inserting ‘‘At

23 the election of the 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 is amended by adding at the end the following item:

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

wells.’’

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

5 this section shall apply to production in taxable years be6 ginning after December 31, 1999.

7 SEC. 803. ELECTION TO EXPENSE GEOLOGICAL AND GEO8 PHYSICAL EXPENDITURES AND DELAY RENT9 AL PAYMENTS.

10 (a) Section 263 (relating to capital expenditures) is

11 amended by adding at the end the following new sub12 section:

13 ‘‘(j) GEOLOGICAL AND GEOPHYSICAL EXPENDI14 TURES FOR OIL AND WELLS.—Notwithstanding sub15 section (a), a taxpayer may elect to treat geological and

16 geophysical expenses incurred in connection with the ex17 ploration for, or development of, oil or gas as expenses

18 which are not chargeable to capital account. Any expenses

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

20 year in which paid or incurred.’’.

21 (b) Section 263A(c)(3) is amended by inserting

22 ‘‘263(j),’’ after ‘‘263(i),’’.
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1 (c)(1) The amendments made by subsections (a) and

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

3 of the enactment of this Act.

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

5 263(j) of the Internal Revenue Code of 1986, as added

6 by subsections (a) and (b), which were paid or incurred

7 on or before the date of the enactment of this Act, the

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

9 the Secretary of the Treasury may prescribe, to amortize

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

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

12 enactment of this Act occurs. For purposes of this para13 graph, the suspended portion of any expense is that por14 tion of such expense which, as of the first day of the 36-

15 month period, has not been included in the cost of a prop16 erty or otherwise deducted.

17 (d) Section 263 (relating to capital expenditures), as

18 amended by subsection (b), is amended by adding at the

19 end the following new subsection—

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

21 AND GAS WELLS.—

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

23 (a), a taxpayer may elect to treat delay rental pay24 ments incurred in connection with the development

25 of oil or gas within the United States (as defined in
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1 section 638) as payments which are not chargeable

2 to capital account. Any payments so treated shall be

3 allowed as a deduction in the taxable year in which

4 paid or incurred.

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

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

7 means an amount paid for the privilege of deferring

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

9 lease.’’.

10 Subtitle B—Independent Oil and

11 Gas Producers

12 SEC. 810. 5-YEAR NET OPERATING LOSS CARRYBACK FOR

13 LOSSES ATTRIBUTABLE TO OPERATING MIN14 ERAL INTERESTS OF INDEPENDENT OIL AND

15 GAS PRODUCERS.

16 (a) Paragraph (1) of section 172(b) (relating to years

17 to which loss may be carried) is amended by adding at

18 the end the following new subparagraph—

19 ‘‘(H) LOSSES ON OPERATING MINERAL IN20 TERESTS OF INDEPENDENT OIL AND GAS PRO21 DUCERS.—In the case of a taxpayer—

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

23 loss (as defined in subsection (j)) for a tax24 able year, and
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1 ‘‘(ii) which is not an integrated oil

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

3 such eligible oil and gas loss shall be a net

4 operating loss carryback to each of the 5

5 taxable years preceding the taxable year of

6 such loss.’’.

7 (b) ELIGIBLE OIL AND GAS LOSS.—Section 172 is

8 amended by redesignating subsection (j) as subsection (k)

9 and by inserting after subsection (i) the following new

10 subsection—

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

12 this section—

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

14 gas loss’ means the lesser of—

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

16 operating loss for the taxable year if only in17 come and deductions attributable to operating

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

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

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

21 for such taxable year.

22 ‘‘(2) COORDINATION WITH SUBSECTION

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

24 an eligible oil and gas loss for any taxable year shall
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1 be treated in a manner similar to the manner in

2 which a specified liability loss is treated.

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

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

5 loss year may elect to have the carryback period

6 with respect to such loss year determined without re7 gard to subsection (b)(1)(H).’’.

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

9 this section shall apply to net operating losses for taxable

10 years beginning after December 31, 1998.

11 SEC. 811. TEMPORARY SUSPENSION OF LIMITATION BASED

12 ON 65 PERCENT OF TAXABLE INCOME.

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

14 (relating to limitation on percentage depletion in case of

15 oil and gas wells) is amended by adding at the end the

16 following new paragraph—

17 ‘‘(6) TEMPORARY SUSPENSION OF TAXABLE IN18 COME LIMIT.—Paragraph (1) shall not apply to tax19 able years beginning after December 31, 1998, and

20 before January 1, 2005, including with respect to

21 amounts carried under the second sentence of para22 graph (1) to such taxable years.’’.

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

24 this section shall apply to taxable years beginning after

25 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 the Internal Revenue Code of 1986 (relating to

14 limitations and adjustments) is amended by adding at the

15 end the following—

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

17 SOLD TO UTILITIES UNDER CERTAIN CONTRACTS.—

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

19 under subsection (a) shall not apply to

20 electricity—

21 ‘‘(i) produced at a qualified facility

22 placed in service by the taxpayer after

23 June 30, 1999, and

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

25 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,

14 avoided cost prices shall be deter15 mined as provided for in 18 CFR

16 292.304(d)(1) or any successor regu17 lation.’’.

18 (c) QUALIFIED FACILITIES INCLUDE ALL BIOMASS

19 FACILITIES.—

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

21 45(c)(1) of the Internal Revenue Code of 1986 (de22 fining qualified energy resources) is amended to read

23 as follows—

24 ‘‘(B) biomass.’’.
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1 (2) BIOMASS DEFINED.—Paragraph (2) of sec2 tion 45(c) of such Code (relating to definitions) is

3 amended to read as follows—

4 ‘‘(2) BIOMASS.—The term ‘biomass’ means—

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

6 which is planted exclusively for purposes of

7 being used at a qualified facility to produce

8 electricity, or

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

10 waste material which is segregated from other

11 waste materials and which is derived from—

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

13 resources: mill residues, precommercial

14 thinnings, slash, and brush, but not includ15 ing old-growth timber,

16 ‘‘(ii) poultry waste,

17 ‘‘(iii) urban sources, including waste

18 pallets, crates, and dunnage, manufac19 turing and construction wood wastes, and

20 landscape or right-of-way trimmings, but

21 not including unsegregated municipal solid

22 waste (garbage) or paper that is commonly

23 recycled, or

24 ‘‘(iv) agriculture sources, including or25 chard tree crops, vineyard, grain, legumes,
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1 sugar, and other crop by-products or resi2 dues.’’.

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

4 this section shall apply to electricity produced after the

5 date of the enactment of this Act.

6 SEC. 902. CERTAIN AMOUNTS RECEIVED BY ELECTRIC EN7 ERGY, GAS, OR STEAM UTILITIES EXCLUDED

8 FROM GROSS INCOME AS CONTRIBUTIONS TO

9 CAPITAL.

10 (a) Subsection (c) of section 118 of the Internal Rev11 enue Code of 1986 (relating to special rules for water and

12 sewerage disposal utilities) is amended—

13 (1) in the heading, by striking, ‘‘WATER AND

14 SEWERAGE DISPOSAL’’ and inserting ‘‘CER15 TAIN’’,

16 (2) in paragraph (1)—

17 (A) in the matter preceding paragraph (1),

18 by striking ‘‘water or’’ and inserting ‘‘electric

19 energy, gas (through a local distribution system

20 or transportation by pipeline), steam, water,

21 or’’ and

22 (B) in subparagraph (B), by striking

23 ‘‘water or’’ and inserting ‘‘electric energy, gas,

24 steam, water, or’’,
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1 (3) in paragraph (2)(A)(ii), by striking ‘‘water

2 or’’ and inserting ‘‘electric energy, gas, steam,

3 water, or’’, and

4 (4) in paragraph (3)—

5 (A) in subparagraph (A), by inserting

6 ‘‘such term shall include amounts paid as cus7 tomer connection fees (including amounts paid

8 to connect the customer’s line to an electric

9 line, a gas main, a steam line, or a main water

10 or sewer line) and’’ after ‘‘except that’’, and

11 (B) in subparagraph (C), by striking

12 ‘‘water or’’ and inserting ‘‘electric energy, gas,

13 steam, water, or’’.

14 (b) The amendments made by subsection (a) shall

15 apply to amounts received after the date of the enactment

16 of this Act.

17 SEC. 903. EXTENSION OF CREDIT FOR ELECTRICITY PRO18 DUCED FROM STEEL COGENERATION.

19 (a) EXTENSION OF CREDIT FOR COKE PRODUCTION

20 AND STEEL MANUFACTURING FACILITIES.—Section

21 45(c)(1) (defining qualified energy resources) is amended

22 by striking ‘‘and’’ at the end of the next to last subpara23 graph, by striking the period at the end of the last sub24 paragraph and inserting ‘‘, and’’, and by adding at the

25 end the following new subparagraph—
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1 ‘‘( ) steel cogeneration.’’

2 (b) STEEL COGENERATION.—Section 45(c) is amend3 ed by adding at the end the following—

4 ‘‘( ) STEEL COGENERATION.—The term ‘steel

5 cogeneration’ means the production of steam or

6 other form of thermal energy of at least 20 percent

7 of total production and the production of electricity

8 or mechanical energy (or both) of at least 20 percent

9 of total production (meaning production from all

10 waste sources in subparagraphs (A), (B), and (C)

11 from the entire facility that produces coke, iron ore,

12 iron, or steel), provided that the cogeneration meets

13 any regulatory energy-efficiency standards estab14 lished by the Secretary, and only to the extent that

15 such energy is produced from—

16 ‘‘(A) gases or heat generated during the

17 production of coke,

18 ‘‘(B) blast furnace gases or heat generated

19 during the production of iron ore or iron, or

20 ‘‘(C) waste gases or heat generated from

21 the manufacture of steel that uses at least 20

22 percent recycled material.’’.

23 (c) MODIFICATION OF PLACED IN SERVICE

24 RULES FOR STEEL COGENERATION FACILITIES.—
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1 Section 45(c)(3) (defining qualified facility) is

2 amended by adding at the end the following—

3 ( ) STEEL COGENERATION FACILITIES.—In the

4 case of a facility using steel cogeneration to produce

5 electricity, the term ‘qualified facility’ means any fa6 cility permitted to operate under the environmental

7 requirements of the Clean Air Act Amendments of

8 1990 which is owned by the taxpayer and originally

9 placed in service after December 31, 1999, and be10 fore January 1, 2005. Such a facility may be treated

11 as originally placed in service when such facility was

12 last upgraded to increase efficiency or generation ca13 pability. However, no facility shall be allowed a cred14 it for more than 10 years of production.’’.

15 (d) CONFORMING AMENDMENTS.—

16 (1) The heading for section 45 is amended by

17 inserting ‘‘and waste energy’’ after ‘‘renewable’’.

18 (2) The item relating to section 45 in the table

19 of sections subpart D of part IV of subchapter A of

20 chapter 1 is amended by inserting ‘‘and waste en21 ergy’’ after ‘‘renewable’’.

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

23 this section shall take effect for taxable years beginning

24 after December 31, 2001, and before January 1, 2005.
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1 SEC. 904. FULL EXPENSING OF HOME HEATING OIL STOR2 AGE FACILITIES.

3 (a) IN GENERAL.—Section 179(b) of the Internal

4 Revenue Code of 1986 (relating to limitations) is amended

5 by adding at the end of the following—

6 ‘‘(5) FULL EXPENSING OF HOME HEATING OIL

7 STORAGE FACILITIES.—Paragraphs (1) and (2) shall

8 not apply to section 179 property which is any stor9 age facility (not including a building or its structural

10 components) used in connection with the distribution

11 of home heating oil.’’.

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

13 this section shall apply to property placed in service in

14 taxable years beginning after the date of the enactment

15 of this Act.’’

16 SEC. 905. RESIDENTIAL SOLAR ENERGY TAX CREDIT.

17 (a) IN GENERAL.—Subpart A of part IV of sub18 chapter A of chapter 1 of the Internal Revenue Code of

19 1986 (relating to nonrefundable personal credits) is

20 amended by inserting after section 25A the following new

21 section—

22 ‘‘SEC. 25B. RESIDENTIAL SOLAR ENERGY PROPERTY.

23 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in24 dividual, there shall be allowed as a credit against the tax

25 imposed by this chapter for the taxable year an amount

26 equal to the sum of—
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1 ‘‘(1) 15 percent of the qualified photovoltaic

2 property expenditures made by the taxpayer during

3 such year, and

4 ‘‘(2) 15 percent of the qualified solar water

5 heating property expenditures made by the taxpayer

6 during the taxable year.

7 ‘‘(b) LIMITATIONS.—

8 ‘‘(1) MAXIMUM CREDIT.—The credit allowed

9 under subsection (a)(2) shall not exceed $2,000 for

10 each system of solar energy property.

11 ‘‘(2) TYPE OF PROPERTY.—No expenditure may

12 be taken into account under this section unless such

13 expenditure is made by the taxpayer for property in14 stalled on or in connection with a dwelling unit

15 which is located in the United States and which is

16 used as a residence.

17 ‘‘(3) SAFETY CERTIFICATIONS.—No credit shall

18 be allowed under this section for an item of property

19 unless—

20 ‘‘(A) in the case of solar water heating

21 equipment, such equipment is certified for per22 formance and safety by the non-profit Solar

23 Rating Certification Corporation or a com24 parable entity endorsed by the government of
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1 the State in which such property is installed,

2 and

3 ‘‘(B) in the case of a photovoltaic system,

4 such system meets appropriate fire and electric

5 code requirements.

6 ‘‘(c) DEFINITIONS.—For purposes of this section—

7 ‘‘(1) QUALIFIED SOLAR WATER HEATING PROP8 ERTY EXPENDITURE.—The term ‘qualified solar

9 water heating property expenditure’ means an ex10 penditure for property that uses solar energy to heat

11 water for use in a dwelling unit with respect to

12 which a majority of the energy is derived from the

13 sun.

14 ‘‘(2) QUALIFIED PHOTOVOLTAIC PROPERTY EX15 PENDITURE.—The term ‘qualified photovoltaic prop16 erty expenditure’ means an expenditure for property

17 that uses solar energy to generate electricity for use

18 in a dwelling unit.

19 ‘‘(3) SOLAR PANELS.—No expenditure relating

20 to a solar panel or other property installed as a roof

21 (or portion thereof) shall fail to be treated as prop22 erty described in paragraph (1) or (2) solely because

23 it constitutes a structural component of the struc24 ture on which it is installed.
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1 ‘‘(4) LABOR COSTS.—Expenditures for labor

2 costs properly allocable to the onsite preparation, as3 sembly, or original installation of the property de4 scribed in paragraph (1) or (2) and for piping or

5 wiring to interconnect such property to the dwelling

6 unit shall be taken into account for purposes of this

7 section.

8 ‘‘(5) SWIMMING POOLS, ETC., USED AS STOR9 AGE MEDIUM.—Expenditures which are properly al10 locable to a swimming pool, hot tub, or any other

11 energy storage medium which has a function other

12 than the function of such storage shall not be taken

13 into account for purposes of this section.

14 ‘‘(d) SPECIAL RULES.—For purposes of this

15 section—

16 ‘‘(1) DOLLAR AMOUNTS IN CASE OF JOINT OC17 CUPANCY.—In the case of any dwelling unit which is

18 jointly occupied and used during any calendar year

19 as a residence by 2 or more individuals the following

20 shall apply—

21 ‘‘(A) The amount of the credit allowable

22 under subsection (a) by reason of expenditures

23 (as the case may be) made during such cal24 endar year by any of such individuals with re25 spect to such dwelling unit shall be determined
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1 by treating all of such individuals as 1 taxpayer

2 whose taxable year is such calendar year.

3 ‘‘(B) There shall be allowable with respect

4 to such expenditures to each of such individ5 uals, a credit under subsection (a) for the tax6 able year in which such calendar year ends in

7 an amount which bears the same ratio to the

8 amount determined under subparagraph (A) as

9 the amount of such expenditures made by such

10 individual during such calendar year bears to

11 the aggregate of such expenditures made by all

12 of such individuals during such calendar year.

13 ‘‘(2) TENANT-STOCKHOLDER IN COOPERATIVE

14 HOUSING CORPORATION.—In the case of an indi15 vidual who is a tenant-stockholder (as defined in sec16 tion 216) in a cooperative housing corporation (as

17 defined in such section), such individual shall be

18 treated as having made his tenant-stockholder’s pro19 portionate share (as defined in section 216(b)(3)) of

20 any expenditures of such corporation.

21 ‘‘(3) CONDOMINIUMS.—

22 ‘‘(A) IN GENERAL.—In the case of an indi23 vidual who is a member of a condominium man24 agement association with respect to a condo25 minium which he owns, such individual shall be
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1 treated as having made his proportionate share

2 of any expenditures of such association.

3 ‘‘(B) CONDOMINIUM MANAGEMENT ASSO4 CIATION.—For purposes of this paragraph, the

5 term ‘condominium management association’

6 means an organization which meets the require7 ments of paragraph (1) of section 528(c) (other

8 than subparagraph (E) thereof) with respect to

9 a condominium project substantially all of the

10 units of which are used as residences.

11 ‘‘(4) JOINT OWNERSHIP OF ITEMS OF SOLAR

12 ENERGY PROPERTY.—

13 ‘‘(A) IN GENERAL.—Any expenditure oth14 erwise qualifying as an expenditure described in

15 paragraph (1) or (2) of subsection (c) shall not

16 be treated as failing to so qualify merely be17 cause such expenditure was made with respect

18 to 2 or more dwelling units.

19 ‘‘(B) LIMITS APPLIED SEPARATELY.—In

20 the case of any expenditure described in sub21 paragraph (A), the amount of the credit allow22 able under subsection (a) shall (subject to para23 graph (1)) be computed separately with respect

24 to the amount of the expenditure made for each

25 dwelling unit.
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1 ‘‘(5) ALLOCATION IN CERTAIN CASES.—If less

2 than 80 percent of the use of an item is for nonbusi3 ness residential purposes, only that portion of the

4 expenditures for such item which is properly allo5 cable to use for nonbusiness residential purposes

6 shall be taken into account. For purposes of this

7 paragraph, use for a swimming pool shall be treated

8 as use which is not for residential purposes.

9 ‘‘(6) WHEN EXPENDITURE MADE; AMOUNT OF

10 EXPENDITURE.—

11 ‘‘(A) IN GENERAL.—Except as provided in

12 subparagraph (B), an expenditure with respect

13 to an item shall be treated as made when the

14 original installation of the item is completed.

15 ‘‘(B) EXPENDITURES PART OF BUILDING

16 CONSTRUCTION.—In the case of an expenditure

17 in connection with the construction or recon18 struction of a structure, such expenditure shall

19 be treated as made when the original use of the

20 constructed or reconstructed structure by the

21 taxpayer begins.

22 ‘‘(C) AMOUNT.—The amount of an ex23 penditure shall be the cost thereof.

24 ‘‘(e) BASIS ADJUSTMENTS.—For purposes of this

25 subtitle, if a credit is allowed under this section for any
102

S 2557 PCS

1 expenditure with respect to any property, the increase in

2 the basis of such property which would (but for this sub3 section) result from such expenditure shall be reduced by

4 the amount of the credit so allowed.’’.

5 (b) CONFORMING AMENDMENTS.—

6 (1) Subsection (a) of section 1016 of such Code

7 is amended by striking ‘and’ at the end of paragraph

8 (26), by striking the period at the end of paragraph

9 (27) and inserting ‘‘; and’’, and by adding at the

10 end the following new paragraph:

11 ‘‘(28) to the extent provided in section 25B(e),

12 in the case of amounts with respect to which a credit

13 has been allowed under section 25B.’’.

14 (2) The table of sections for subpart A of part

15 IV of subchapter A of chapter 1 of such Code is

16 amended by inserting after the item relating to sec17 tion 25A the following new item—

‘‘Sec. 25B. Residential solar energy property.’’

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

19 this section shall apply to taxable years ending after De20 cember 31, 1999 and before December 31, 2004.

Calendar No. 552

106TH CONGRESS

2D SESSION S. 2557

A BILL

To protect the energy security of the United States

and decrease America’s dependency on foreign oilsources 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 energyprices on the American consumer, including thepoor and the elderly, and for other purposes.

MAY 17, 2000

Read the second time and placed on the calendar