939
24-month period beginning on the date that such ex-
pense was paid or incurred.
‘‘(2) SPECIAL
RULES.—For purposes of this
subsection, rules similar to the rules of paragraphs
(2), (3), and (4) of subsection (h) shall apply.’’.
(b) CONFORMING AMENDMENT.—Section 263A(c)(3)
is amended by inserting ‘‘167(h), 167(i),’’ after ‘‘under
section’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to amounts paid or incurred in tax-
able years beginning after the date of the enactment of
this Act.
SEC. 1345. EXTENSION AND MODIFICATION OF CREDIT FOR
PRODUCING FUEL FROM A NONCONVEN-
TIONAL SOURCE.
(a) IN GENERAL.—Section 29 (relating to credit for
producing fuel from a nonconventional source) is amended
by adding at the end the following new subsection:
‘‘(h) EXTENSION FOR OTHER FACILITIES.—Notwith-
standing subsection (f)—
‘‘(1) NEW OIL AND GAS WELLS AND FACILI-
TIES.—In the case of a well or facility for producing
qualified fuels described in subparagraph (A) or (B)
of subsection (c)(1) which was drilled or placed in
service after the date of the enactment of this sub-
940
section and before January 1, 2007, this section
shall apply with respect to such fuels produced at
such well or facility and sold during the period—
‘‘(A) beginning on the later of January 1,
2004, or the date that such well is drilled or
such facility is placed in service, and
‘‘(B) ending on the earlier of the date
which is 4 years after the date such period
began or December 31, 2009.
‘‘(2) OLD OIL AND GAS WELLS AND FACILI-
TIES.—In the case of a well or facility producing
qualified fuels described in subparagraph (A) or
(B)(i) of subsection (c)(1) or a facility producing
natural gas and byproducts by coal gasification from
lignite, subsection (f)(2) shall be applied by sub-
stituting ‘2008’ for ‘2003’ with respect to wells and
facilities described in subsection (f)(1) with respect
to such fuels.
‘‘(3) EXTENSION FOR FACILITIES PRODUCING
QUALIFIED FUEL FROM LANDFILL GAS.—
‘‘(A) IN GENERAL.—In the case of a facil-
ity for producing qualified fuel from landfill gas
which was placed in service after June 30,
1998, and before January 1, 2007, this section
941
shall apply to fuel produced at such facility and
sold during the period—
‘‘(i) beginning on the later of January
1, 2004, or the date that such facility is
placed in service, and
‘‘(ii) ending on the earlier of the date
which is 4 years after the date such period
began or December 31, 2009.
‘‘(B) REDUCTION OF CREDIT FOR CERTAIN
LANDFILL FACILITIES.—In the case of a facility
to which subparagraph (A) applies and which is
located at a landfill which is required pursuant
to section 60.751(b)(2) or section 60.33c of
title 40, Code of Federal Regulations (as in ef-
fect on April 3, 2003) to install and operate a
collection and control system which captures
gas generated within the landfill, subsection
(a)(1) shall be applied to gas so captured by
substituting ‘$2’ for ‘$3’ for the taxable year
during which such system is required to be in-
stalled and operated.
‘‘(4) FACILITIES PRODUCING FUELS FROM AG-
RICULTURAL AND ANIMAL WASTE.—
‘‘(A) IN GENERAL.—In the case of any fa-
cility for producing liquid, gaseous, or solid
942
fuels from qualified agricultural and animal
wastes, including such fuels when used as feed-
stocks, which is placed in service after the date
of the enactment of this subsection and before
January 1, 2007, this section shall apply with
respect to fuel produced at such facility and
sold during the period—
‘‘(i) beginning on the later of January
1, 2004, or the date that such facility is
placed in service, and
‘‘(ii) ending on the earlier of the date
which is 4 years after the date such period
began or December 31, 2009.
‘‘(B) QUALIFIED AGRICULTURAL AND ANI-
MAL WASTE.—For purposes of this paragraph,
the term ‘qualified agricultural and animal
waste’ means agriculture and animal waste, in-
cluding by-products, packaging, and any mate-
rials associated with the processing, feeding,
selling, transporting, or disposal of agricultural
or animal products or wastes.
‘‘(5) FACILITIES PRODUCING REFINED COAL.—
‘‘(A) IN GENERAL.—In the case of a facil-
ity described in subparagraph (C) for producing
refined coal which is placed in service after the
943
date of the enactment of this subsection and be-
fore January 1, 2008, this section shall apply
with respect to fuel produced at such facility
and sold before the close of the 5-year period
beginning on the date such facility is placed in
service.
‘‘(B) REFINED
COAL.—For purposes of
this paragraph, the term ‘refined coal’ means a
fuel which is a liquid, gaseous, or solid syn-
thetic fuel produced from coal (including lig-
nite) or high carbon fly ash, including such fuel
used as a feedstock.
‘‘(C) COVERED FACILITIES.—
‘‘(i) IN GENERAL.—A facility is de-
scribed in this subparagraph if such facil-
ity produces refined coal using a tech-
nology which the taxpayer certifies (in
such manner as the Secretary may pre-
scribe) results in—
‘‘(I) a qualified emission reduc-
tion, and
‘‘(II) a qualified enhanced value.
‘‘(ii) QUALIFIED
EMISSION
REDUC-
TION.—For purposes of this subparagraph,
the term ‘qualified emission reduction’
944
means a reduction of at least 20 percent of
the emissions of nitrogen oxide and either
sulfur dioxide or mercury released when
burning the refined coal (excluding any di-
lution caused by materials combined or
added during the production process), as
compared to the emissions released when
burning the feedstock coal or comparable
coal predominantly available in the market-
place as of January 1, 2003.
‘‘(iii) 
QUALIFIED
ENHANCED
VALUE.—For purposes of this subpara-
graph, the term ‘qualified enhanced value’
means an increase of at least 50 percent in
the market value of the refined coal (ex-
cluding any increase caused by materials
combined or added during the production
process), as compared to the value of the
feedstock coal.
‘‘(iv) ADVANCED CLEAN COAL TECH-
NOLOGY UNITS EXCLUDED.—A facility de-
scribed in this subparagraph shall not in-
clude any advanced clean coal technology
unit (as defined in section 48A(e)).
‘‘(6) COALMINE GAS.—
945
‘‘(A) IN
GENERAL.—This section shall
apply to coalmine gas—
‘‘(i) captured or extracted by the tax-
payer during the period beginning on the
day after the date of the enactment of this
subsection and ending on December 31,
2006, and
‘‘(ii) utilized as a fuel source or sold
by or on behalf of the taxpayer to an unre-
lated person during such period.
‘‘(B) COALMINE
GAS.—For purposes of
this paragraph, the term ‘coalmine gas’ means
any methane gas which is—
‘‘(i) liberated during or as a result of
coal mining operations, or
‘‘(ii) extracted up to 10 years in ad-
vance of coal mining operations as part of
a specific plan to mine a coal deposit.
‘‘(C) SPECIAL RULE FOR ADVANCED EX-
TRACTION.—In the case of coalmine gas which
is captured in advance of coal mining oper-
ations, the credit under subsection (a) shall be
allowed only after the date the coal extraction
occurs in the immediate area where the
coalmine gas was removed.
946
‘‘(D) NONCOMPLIANCE
WITH
POLLUTION
LAWS.—This paragraph shall not apply to the
capture or extraction of coalmine gas from coal
mining operations with respect to any period in
which such coal mining operations are not in
compliance with applicable Federal pollution
prevention, control, and permit requirements.
‘‘(7) COKE AND COKE GAS.—In the case of a
facility for producing coke or coke gas which was
placed in service before January 1, 1993, or after
June 30, 1998, and before January 1, 2007, this
section shall apply with respect to coke and coke gas
produced in such facility and sold during the during
the period—
‘‘(A) beginning on the later of January 1,
2004, or the date that such facility is placed in
service, and
‘‘(B) ending on the earlier of the date
which is 4 years after the date such period
began or December 31, 2009.
‘‘(8) SPECIAL
RULES.—In determining the
amount of credit allowable under this section solely
by reason of this subsection—
‘‘(A) FUELS
TREATED
AS
QUALIFIED
FUELS.—Any fuel described in paragraph (3),
947
(4), (5), or (6) shall be treated as a qualified
fuel for purposes of this section.
‘‘(B) DAILY LIMIT.—The amount of quali-
fied fuels sold during any taxable year which
may be taken into account by reason of this
subsection with respect to any property or facil-
ity shall not exceed an average barrel-of-oil
equivalent of 200,000 cubic feet of natural gas
per day. Days before the date the property or
facility is placed in service shall not be taken
into account in determining such average.
‘‘(C) EXTENSION PERIOD TO COMMENCE
WITH UNADJUSTED CREDIT AMOUNT AND NEW
PHASEOUT ADJUSTMENT.—For purposes of ap-
plying subsection (b)(2), in the case of fuels
sold after 2003—
‘‘(i) paragraphs (1)(A) and (2) of sub-
section (b) shall be applied by substituting
‘$35.00’ for ‘$23.50’, and
‘‘(ii) subparagraph (B) of subsection
(d)(2) shall be applied by substituting
‘2002’ for ‘1979’.
‘‘(D) DENIAL OF DOUBLE BENEFIT.—This
subsection shall not apply to any facility pro-
ducing qualified fuels for which a credit was al-
948
lowed under this section for the taxable year or
any preceding taxable year by reason of sub-
section (g).’’.
(b) TREATMENT AS BUSINESS CREDIT.—
(1) CREDIT MOVED TO SUBPART RELATING TO
BUSINESS
RELATED
CREDITS.—The Internal Rev-
enue Code of 1986 is amended by redesignating sec-
tion 29, as amended by this Act, as section 45K and
by moving section 45K (as so redesignated) from
subpart B of part IV of subchapter A of chapter 1
to the end of subpart D of part IV of subchapter A
of chapter 1.
(2) CREDIT TREATED AS BUSINESS CREDIT.—
Section 38(b) is amended by striking ‘‘plus’’ at the
end of paragraph (19), by striking the period at the
end of paragraph (20) and inserting ‘‘, plus’’, and
by adding at the end the following:
‘‘(21) the nonconventional source production
credit determined under section 45K(a).’’.
(3) CONFORMING AMENDMENTS.—
(A) Section 30(b)(2)(A), as redesignated
by section 1317(a), is amended by striking
‘‘sections 27 and 29’’ and inserting ‘‘section
27’’.
949
(B) Sections 43(b)(2) and 613A(c)(6)(C)
are 
each 
amended 
by 
striking 
‘‘section
29(d)(2)(C)’’ 
and 
inserting 
‘‘section
45K(d)(2)(C)’’.
(C) Section 45K(a), as redesignated by
paragraph (1), is amended by striking ‘‘At the
election of the taxpayer, there shall be allowed
as a credit against the tax imposed by this
chapter for the taxable year’’ and inserting
‘‘For purposes of section 38, if the taxpayer
elects to have this section apply, the nonconven-
tional source production credit determined
under this section for the taxable year is’’.
(D) Section 45K(b), as so redesignated, is
amended by striking paragraph (6).
(E) Section 53(d)(1)(B)(iii) is amended by
striking ‘‘under section 29’’ and all that follows
through ‘‘or not allowed’’.
(F) Section 55(c)(2) is amended by strik-
ing ‘‘29(b)(6),’’.
(G) Subsection (a) of section 772 is
amended by inserting ‘‘and’’ at the end of para-
graph (9), by striking paragraph (10), and by
redesignating paragraph (11) as paragraph
(10).
950
(H) Paragraph (5) of section 772(d) is
amended by striking ‘‘the foreign tax credit,
and the credit allowable under section 29’’ and
inserting ‘‘and the foreign tax credit’’.
(I) The table of sections for subpart B of
part IV of subchapter A of chapter 1 is amend-
ed by striking the item relating to section 29.
(J) The table of sections for subpart D of
part IV of subchapter A of chapter 1, as
amended by this Act, is amended by inserting
after the item relating to section 45J the fol-
lowing new item:
‘‘Sec. 45K. Credit for producing fuel from a nonconventional source.’’.
(c) DETERMINATIONS UNDER NATURAL GAS POLICY
ACT OF 1978.—Subparagraph (A) of section 45K(c)(2),
as redesignated by subsection (b)(1), is amended—
(1) by inserting ‘‘by the Secretary, after con-
sultation with the Federal Energy Regulatory Com-
mission,’’ after ‘‘shall be made’’, and
(2) by inserting ‘‘(as in effect before the repeal
of such section)’’ after ‘‘1978’’.
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to fuel produced and sold after December
31, 2003, in taxable years ending after such date.
951
(2) DETERMINATIONS
UNDER
NATURAL
GAS
POLICY ACT OF 1978.—The amendments made by
subsection (c) shall apply as if included in the provi-
sions repealing section 503 of the Natural Gas Pol-
icy Act of 1978.
PART II—ALTERNATIVE MINIMUM TAX
PROVISIONS
SEC. 1346. NEW NONREFUNDABLE PERSONAL CREDITS AL-
LOWED AGAINST REGULAR AND MINIMUM
TAXES.
(a) IN GENERAL.—
(1) SECTION 25C.—Section 25C(b), as added by
section 1301 of this Act, is amended by adding at
the end the following new paragraph:
‘‘(3) LIMITATION
BASED
ON
AMOUNT
OF
TAX.—The credit allowed under subsection (a) for
the taxable year shall not exceed the excess of—
‘‘(A) the sum of the regular tax liability
(as defined in section 26(b)) plus the tax im-
posed by section 55, over
‘‘(B) the sum of the credits allowable
under this subpart (other than this section and
section 25D) and section 27 for the taxable
year.’’.
952
(2) SECTION 25D.—Section 25D(b), as added
by section 1304 of this Act, is amended by adding
at the end the following new paragraph:
‘‘(3) LIMITATION
BASED
ON
AMOUNT
OF
TAX.—The credit allowed under subsection (a) for
the taxable year shall not exceed the excess of—
‘‘(A) the sum of the regular tax liability
(as defined in section 26(b)) plus the tax im-
posed by section 55, over
‘‘(B) the sum of the credits allowable
under this subpart (other than this section) and
section 27 for the taxable year.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 23(b)(4)(B) is amended by inserting
‘‘and sections 25C and 25D’’ after ‘‘this section’’.
(2) Section 24(b)(3)(B) is amended by striking
‘‘and 25B’’ and inserting ‘‘, 25B, 25C, and 25D’’.
(3) Section 25(e)(1)(C) is amended by inserting
‘‘25C, and 25D’’ after ‘‘25B,’’.
(4) Section 25B(g)(2) is amended by striking
‘‘section 23’’ and inserting ‘‘sections 23, 25C, and
25D’’.
(5) Section 26(a)(1) is amended by striking
‘‘and 25B’’ and inserting ‘‘25B, 25C, and 25D’’.
953
(6) Section 904(h) is amended by striking ‘‘and
25B’’ and inserting ‘‘25B, 25C, and 25D’’.
(7) Section 1400C(d) is amended by striking
‘‘and 25B’’ and inserting ‘‘25B, 25C, and 25D’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2003.
SEC. 1347. BUSINESS RELATED ENERGY CREDITS ALLOWED
AGAINST REGULAR AND MINIMUM TAX.
(a) IN GENERAL.—Subsection (c) of section 38 (re-
lating to limitation based on amount of tax) is amended
by redesignating paragraph (4) as paragraph (5) and by
inserting after paragraph (3) the following new paragraph:
‘‘(4) SPECIAL RULES FOR SPECIFIED ENERGY
CREDITS.—
‘‘(A) IN GENERAL.—In the case of speci-
fied energy credits—
‘‘(i) this section and section 39 shall
be applied separately with respect to such
credits, and
‘‘(ii) in applying paragraph (1) to
such credits—
‘‘(I) the tentative minimum tax
shall be treated as being zero, and
954
‘‘(II) the limitation under para-
graph (1) (as modified by subclause
(I)) shall be reduced by the credit al-
lowed under subsection (a) for the
taxable year (other than the specified
energy credits).
‘‘(B) SPECIFIED
ENERGY
CREDITS.—For
purposes of this subsection, the term ‘specified
energy credits’ means the credits determined
under sections 45G, 45H, 45I, and 45J. For
taxable years beginning after December 31,
2003, such term includes the credit determined
under section 40. For taxable years beginning
after December 31, 2003, and before January
1, 2006, such term includes the credit deter-
mined under section 43.
‘‘(C) SPECIAL
RULE
FOR
ELECTRICITY
PRODUCED FROM QUALIFIED FACILITIES.—For
purposes of this subsection, the term ‘specified
energy credits’ shall include the credit deter-
mined under section 45 to the extent that such
credit is attributable to electricity produced—
‘‘(i) at a facility which is originally
placed in service after the date of the en-
actment of this paragraph, and
955
‘‘(ii) during the 4-year period begin-
ning on the date that such facility was
originally placed in service.’’.
(b) CONFORMING AMENDMENTS.—
(1) Paragraph (2)(A)(ii)(II) of section 38(c) is
amended by striking ‘‘or’’ and inserting a comma
and by inserting ‘‘, and the specified energy credits’’
after ‘‘employee credit’’.
(2) Paragraph (3)(A)(ii)(II) of section 38(c) is
amended by inserting ‘‘and the specified energy
credits’’ after ‘‘employee credit’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years ending after the
date of the enactment of this Act.
SEC. 1348. TEMPORARY REPEAL OF ALTERNATIVE MIN-
IMUM TAX PREFERENCE FOR INTANGIBLE
DRILLING COSTS.
(a) IN GENERAL.—Clause (ii) of section 57(a)(2)(E)
is amended by adding at the end the following new sen-
tence: ‘‘The preceding sentence shall not apply to taxable
years beginning after December 31, 2003, and before Jan-
uary 1, 2006.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
December 31, 2003.
956
PART III—CLEAN COAL INCENTIVES
SEC. 1351. CREDIT FOR CLEAN COAL TECHNOLOGY UNITS.
(a) IN GENERAL.—Subpart E of part IV of sub-
chapter A of chapter 1 (relating to rules for computing
investment credit) is amended by inserting after section
48 the following new section:
‘‘SEC. 48A. CLEAN COAL TECHNOLOGY CREDIT.
‘‘(a) IN GENERAL.—For purposes of section 46, the
clean coal technology credit for any taxable year is an
amount equal to the applicable percentage of the basis of
qualified clean coal property placed in service during such
year.
‘‘(b) APPLICABLE PERCENTAGE.—For purposes of
this section, the applicable percentage is—
‘‘(1) 15 percent in the case of property placed
in service in connection with any basic clean coal
technology unit, and
‘‘(2) 17.5 percent in the case of property placed
in service in connection with any advanced clean coal
technology unit.
‘‘(c) QUALIFIED CLEAN COAL PROPERTY.—For pur-
poses of this section—
‘‘(1) IN GENERAL.—The term ‘qualified clean
coal property’ means section 1245 property—
‘‘(A) which is installed in connection
with—
957
‘‘(i) an existing coal-based unit as
part of the conversion of such unit to any
basic or advanced clean coal technology
unit, or
‘‘(ii) any new advanced clean coal
technology unit,
‘‘(B) which is placed in service after De-
cember 31, 2003, and before—
‘‘(i) in the case of property to which
subsection (b)(1) applies, January 1, 2014,
and
‘‘(ii) in the case of property to which
subsection (b)(2) applies, January 1, 2017
(January 1, 2013, in the case of property
installed in connection with an eligible ad-
vanced pulverized coal or atmospheric flu-
idized bed combustion technology unit),
‘‘(C) the original use of which commences
with the taxpayer, and
‘‘(D) which has a useful life of not less
than 4 years.
‘‘(2) EXISTING COAL-BASED UNIT.—The term
‘existing coal-based unit’ means a coal-based elec-
tricity generating steam generator-turbine unit—
958
‘‘(A) which is not a basic or advanced
clean coal technology unit, and
‘‘(B) which is in operation on or before
January 1, 2004.
In the case of a unit being converted to a basic clean
coal technology unit, such term shall not include a
unit having a nameplate capacity rating of more
than 300 megawatts.
‘‘(3) NEW
ADVANCED
CLEAN
COAL
TECH-
NOLOGY UNIT.—The term ‘new advanced clean coal
technology unit’ means any advanced clean coal
technology unit which is placed in service after De-
cember 31, 2003, and the original use of which com-
mences with the taxpayer.
‘‘(d) BASIC CLEAN COAL TECHNOLOGY UNIT.—For
purposes of this section—
‘‘(1) IN GENERAL.—The term ‘basic clean coal
technology unit’ means a unit which—
‘‘(A) uses clean coal technology (including
advanced pulverized coal or atmospheric fluid-
ized bed combustion, pressurized fluidized bed
combustion, and integrated gasification com-
bined cycle) for the production of electricity,
959
‘‘(B) uses an input of at least 75 percent
coal to produce at least 50 percent of its ther-
mal output as electricity,
‘‘(C) has a design net heat rate of at least
500 less than that of the existing coal-based
unit prior to its conversion,
‘‘(D) has a maximum design net heat rate
of not more than 9,500, and
‘‘(E) meets the pollution control require-
ments of paragraph (2).
Such term shall not include an advanced clean coal
technology unit.
‘‘(2) POLLUTION CONTROL REQUIREMENTS.—
‘‘(A) IN GENERAL.—A unit meets the re-
quirements of this paragraph if—
‘‘(i) its emissions of sulfur dioxide, ni-
trogen oxide, or particulates meet the
lower of the emission levels for each such
emission specified in—
‘‘(I) subparagraph (B), or
‘‘(II) the new source performance
standards of the Clean Air Act (42
U.S.C. 7411) which are in effect for
the category of source at the time of
the conversion of the unit, and
960
‘‘(ii) its emissions do not exceed any
relevant emission level specified by regula-
tion pursuant to the hazardous air pollut-
ant requirements of the Clean Air Act (42
U.S.C. 7412) in effect at the time of the
conversion of the unit.
‘‘(B) SPECIFIC LEVELS.—The levels speci-
fied in this subparagraph are—
‘‘(i) in the case of sulfur dioxide emis-
sions, 50 percent of the sulfur dioxide
emission levels specified in the new source
performance standards of the Clean Air
Act (42 U.S.C. 7411) in effect on the date
of the enactment of this section for the
category of source,
‘‘(ii) in the case of nitrogen oxide
emissions—
‘‘(I) 0.1 pound per million Btu of
heat input if the unit is not a cyclone-
fired boiler, and
‘‘(II) if the unit is a cyclone-fired
boiler, 15 percent of the uncontrolled
nitrogen oxide emissions from such
boilers, and
961
‘‘(iii) in the case of particulate emis-
sions, 0.02 pound per million Btu of heat
input.
‘‘(3) DESIGN NET HEAT RATE.—The design net
heat rate with respect to any unit, measured in Btu
per kilowatt hour (HHV)—
‘‘(A) shall be based on the design annual
heat input to and the design annual net elec-
trical power, fuels, and chemicals output from
such unit (determined without regard to such
unit’s co-generation of steam),
‘‘(B) shall be adjusted for the heat content
of the design coal to be used by the unit if it
is less than 12,000 Btu per pound according to
the following formula:
‘‘(C) shall be corrected for the site ref-
erence conditions of—
‘‘(i) elevation above sea level of 500
feet,
‘‘(ii) air pressure of 14.4 pounds per
square inch absolute (psia),
‘‘(iii) temperature, dry bulb of 63°F,
‘‘(iv) temperature, wet bulb of 54°F,
and
962
‘‘(v) relative humidity of 55 percent,
and
‘‘(D) if carbon capture controls have been
installed with respect to any existing coal-based
unit and such controls remove at least 50 per-
cent of the unit’s carbon dioxide emissions,
shall be adjusted up to the design heat rate
level which would have resulted without the in-
stallation of such controls.
‘‘(4) HHV.—The term ‘HHV’ means higher
heating value.
‘‘(e) ADVANCED CLEAN COAL TECHNOLOGY UNIT.—
For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘advanced clean
coal technology unit’ means any electricity gener-
ating unit of the taxpayer—
‘‘(A) which is—
‘‘(i) an eligible advanced pulverized
coal or atmospheric fluidized bed combus-
tion technology unit,
‘‘(ii) an eligible pressurized fluidized
bed combustion technology unit,
‘‘(iii) an eligible integrated gasifi-
cation combined cycle technology unit, or
‘‘(iv) an eligible other technology unit,
963
‘‘(B) which uses an input of at least 75
percent coal to produce at least 50 percent of
its thermal output as electricity, and
‘‘(C) which meets the carbon emission rate
requirements of paragraph (6).
‘‘(2) ELIGIBLE ADVANCED PULVERIZED COAL
OR
ATMOSPHERIC
FLUIDIZED
BED
COMBUSTION
TECHNOLOGY
UNIT.—The term ‘eligible advanced
pulverized coal or atmospheric fluidized bed combus-
tion technology unit’ means a clean coal technology
unit using advanced pulverized coal or atmospheric
fluidized bed combustion technology which has a de-
sign net heat rate of not more than 8,500 (8,900 in
the case of units placed in service before 2009).
‘‘(3) ELIGIBLE PRESSURIZED FLUIDIZED BED
COMBUSTION TECHNOLOGY UNIT.—The term ‘eligi-
ble pressurized fluidized bed combustion technology
unit’ means a clean coal technology unit using pres-
surized fluidized bed combustion technology which
has a design net heat rate of not more than 7,720
(8,900 in the case of units placed in service before
2009, and 8,500 in the case of units placed in serv-
ice after 2008 and before 2013).
‘‘(4) ELIGIBLE
INTEGRATED
GASIFICATION
COMBINED
CYCLE
TECHNOLOGY
UNIT.—The term
964
‘eligible integrated gasification combined cycle tech-
nology unit’ means a clean coal technology unit
using integrated gasification combined cycle tech-
nology, with or without fuel or chemical co-
production—
‘‘(A) which has a design net heat rate of
not more than 7,720 (8,900 in the case of units
placed in service before 2009, and 8,500 in the
case of units placed in service after 2008 and
before 2013), and
‘‘(B) has a net thermal efficiency (HHV)
using coal with fuel or chemical co-production
of not less than 44.2 percent (38.4 percent in
the case of units placed in service before 2009,
and 40.2 percent in the case of units placed in
service after 2008 and before 2013).
‘‘(5) ELIGIBLE
OTHER
TECHNOLOGY
UNIT.—
The term ‘eligible other technology unit’ means a
clean coal technology unit—
‘‘(A) which uses any other technology for
the production of electricity, and
‘‘(B) which has a design net heat rate
which meets the requirement of paragraph (2).
‘‘(6) 
CARBON
EMISSION
RATE
REQUIRE-
MENTS.—
965
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), a unit meets the require-
ments of this paragraph if—
‘‘(i) in the case of a unit using design
coal with a heat content of not more than
9,000 Btu per pound, the carbon emission
rate is less than 0.60 pound of carbon per
kilowatt hour, and
‘‘(ii) in the case of a unit using design
coal with a heat content of more than
9,000 Btu per pound, the carbon emission
rate is less than 0.54 pound of carbon per
kilowatt hour.
‘‘(B) 
ELIGIBLE
OTHER
TECHNOLOGY
UNIT.—In the case of an eligible other tech-
nology unit, subparagraph (A) shall be applied
by substituting ‘0.51’ and ‘0.459’ for ‘0.60’ and
‘0.54’, respectively.
‘‘(f) NATIONAL LIMITATIONS ON CREDIT.—For pur-
poses of this section—
‘‘(1) IN
GENERAL.—The amount of credit
which would (but for this subsection) be allowed
with respect to any property shall not exceed the
amount which bears the same ratio to such amount
of credit as—
966
‘‘(A) the national megawatt capacity limi-
tation allocated to the taxpayer with respect to
the basic or advanced clean coal technology unit
to which such property relates, bears to
‘‘(B) the total megawatt capacity of such
unit.
The capacity described in subparagraph (B) shall be
the reasonably expected capacity after the installa-
tion of the property.
‘‘(2) AMOUNT OF NATIONAL LIMITATION.—
‘‘(A) ADVANCED
UNITS.—The national
megawatt capacity limitation for advanced clean
coal technology units shall be 6,000 megawatts.
Of such amount, the national megawatt capac-
ity limitation is—
‘‘(i) for advanced clean coal tech-
nology units using advanced pulverized
coal or atmospheric fluidized bed combus-
tion technology, not more than 1,500
megawatts (not more than 750 megawatts
in the case of units placed in service before
2009),
‘‘(ii) for such units using pressurized
fluidized bed combustion technology, not
more than 750 megawatts (not more than
967
375 megawatts in the case of units placed
in service before 2009),
‘‘(iii) for such units using integrated
gasification combined cycle technology,
with or without fuel or chemical co-produc-
tion, not more than 3,000 megawatts (not
more than 1,250 megawatts in the case of
units placed in service before 2009), and
‘‘(iv) for such units using other tech-
nology for the production of electricity, not
more than 750 megawatts (not more than
375 megawatts in the case of units placed
in service before 2009).
‘‘(B) BASIC UNITS.—The national mega-
watt capacity limitation for basic clean coal
technology units shall be 4,000 megawatts.
‘‘(3) ALLOCATION OF LIMITATION.—The Sec-
retary shall allocate the national megawatt capacity
limitations in such manner as the Secretary may
prescribe, except that the Secretary may not allocate
more than 300 megawatts to any basic clean coal
technology unit.
‘‘(4) REGULATIONS.—Not later than 6 months
after the date of the enactment of this section, the
Secretary shall prescribe such regulations as may be
968
necessary or appropriate to carry out the purposes
of this subsection. Such regulations shall provide a
certification process under which the Secretary, after
consultation with the Secretary of Energy, shall ap-
prove and allocate the national megawatt capacity
limitations—
‘‘(A) to encourage that units with the high-
est thermal efficiencies, when adjusted for the
heat content of the design coal and site ref-
erence conditions, and environmental perform-
ance, be placed in service as soon as possible,
and
‘‘(B) to allocate capacity to taxpayers
which have a definite and credible plan for plac-
ing into commercial operation a basic or ad-
vanced clean coal technology unit, including—
‘‘(i) a site,
‘‘(ii) contractual commitments for
procurement and construction or, in the
case of regulated utilities, the agreement of
the State utility commission,
‘‘(iii) 
filings 
for 
all 
necessary
preconstruction approvals,
969
‘‘(iv) a demonstrated record of having
successfully completed comparable projects
on a timely basis, and
‘‘(v) such other factors which the Sec-
retary determines are appropriate.
‘‘(g) SPECIAL
RULES.—For purposes of this
section—
‘‘(1) CERTAIN PROGRESS EXPENDITURE RULES
MADE APPLICABLE.—Rules similar to the rules of
subsections (c)(4) and (d) of section 46 (as in effect
on the day before the date of the enactment of the
Revenue Reconciliation Act of 1990) shall apply for
purposes of this section.
‘‘(2) PROPERTY FINANCED BY SUBSIDIZED FI-
NANCING OR INDUSTRIAL DEVELOPMENT BONDS.—
Rules similar to the rules of section 45(b)(3) shall
apply for purposes of this section.
‘‘(3) 
NONCOMPLIANCE
WITH
POLLUTION
LAWS.—The terms ‘basic clean coal technology unit’
and ‘advanced clean coal technology unit’ shall not
include any unit which is not in compliance with the
applicable Federal pollution prevention, control, and
permit requirements at any time during the period
applicable under subsection (c)(1)(B).
970
‘‘(4) DENIAL OF CREDIT FOR UNITS RECEIVING
CERTAIN OTHER FEDERAL ASSISTANCE.—The terms
‘basic clean coal technology unit’ and ‘advanced
clean coal technology unit’ shall not include any unit
if, at any time during the period applicable under
subsection (c)(1)(B), any funding is provided to such
unit under the Clean Coal Technology Program, the
Power Plant Improvement Initiative, or the Clean
Coal Power Initiative administered by the Secretary
of Energy.
‘‘(5) COORDINATION WITH OTHER CREDITS.—
This section shall not apply to any property with re-
spect to which the rehabilitation credit under section
47, the energy credit under section 48, or any credit
under section 45 or 45K is allowable unless the tax-
payer elects to waive the application of such credit
to such property.’’.
(b) SPECIAL RECAPTURE RULES.—
(1) Subsection (a) of section 50 is amended by
redesignating paragraph (3), (4), and (5) as para-
graphs (4), (5), and (6), respectively, and by insert-
ing after paragraph (2) the following new para-
graph:
‘‘(3) SPECIAL RULES FOR CLEAN COAL TECH-
NOLOGY CREDITS.—
971
‘‘(A) EARLY DISPOSITION, ETC.—If, dur-
ing any taxable year, qualified clean coal prop-
erty is disposed of, or otherwise ceases to be
part of a basic or advanced clean coal tech-
nology unit with respect to the taxpayer, before
the close of the recovery period under section
168 for such unit, then the tax under this chap-
ter for such taxable year shall be increased
by—
‘‘(i) the aggregate decrease in the
credits allowed under section 38 for all
prior taxable years which would have re-
sulted solely from reducing to zero any
credit determined under section 48A with
respect to such property, multiplied by
‘‘(ii) a fraction—
‘‘(I) the numerator of which is
the number of years in the period be-
ginning with the year of such disposi-
tion or cessation and ending with the
last year of such recovery period, and
‘‘(II) the denominator of which is
the total number of years in such re-
covery period.
972
‘‘(B) PROPERTY CEASES TO QUALIFY FOR
PROGRESS
EXPENDITURES.—Rules similar to
the rules of this paragraph shall apply in cases
where qualified progress expenditures were
taken into account under the rules referred to
in section 48A(g)(1).
‘‘(C) INCREASED RECAPTURE IN CERTAIN
CASES.—The fraction in subparagraph (A)(ii)
shall be 1 in any case in which the property
ceases to be a basic or advanced clean coal
technology unit by reason of paragraph (3), (4),
or (5) of section 48A(g).
‘‘(D) COORDINATION WITH OTHER RECAP-
TURE
RULES.—Paragraphs (1) and (2) shall
not apply to qualified clean coal property.
‘‘(E) DEFINITIONS.—Terms used in this
section which are also used in section 48A shall
have the meanings given to such terms in sec-
tion 48A.’’.
(2) Paragraph (4) of section 50(a), as redesig-
nated by paragraph (1), is amended by striking ‘‘or
(2)’’ and inserting ‘‘, (2), or (3)’’.
(3) Paragraph (5) of section 50(a), as so redes-
ignated, is amended by striking ‘‘and (2)’’ and in-
serting ‘‘, (2), and (3)’’.
973
(4) Section 1371(d)(1) is amended by striking
‘‘section 50(a)(4)’’ and inserting ‘‘section 50(a)(5)’’.
(c) TECHNICAL AMENDMENTS.—
(1) Section 46 (relating to amount of credit) is
amended by striking ‘‘and’’ at the end of paragraph
(2), by striking the period at the end of paragraph
(3) and inserting ‘‘, and’’, and by adding at the end
the following new paragraph:
‘‘(4) the clean coal technology credit.’’.
(2) Section 49(a)(1)(C) is amended by striking
‘‘and’’ at the end of clause (ii), by striking the pe-
riod at the end of clause (iii) and inserting ‘‘, and’’,
and by adding at the end the following new clause:
‘‘(iv) the portion of the basis of any
qualified clean coal property (as defined by
section 48A(c)).’’.
(3) The table of sections for subpart E of part
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 48 the fol-
lowing new item:
‘‘Sec. 48A. Clean coal technology credit.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to periods after December 31,
2003, under rules similar to the rules of section 48(m)
of the Internal Revenue Code of 1986 (as in effect on the
974
day before the date of the enactment of the Revenue Rec-
onciliation Act of 1990).
SEC. 1352. EXPANSION OF AMORTIZATION FOR CERTAIN
POLLUTION CONTROL FACILITIES.
(a) ELIGIBILITY OF POST-1975 POLLUTION CON-
TROL FACILITIES.—
(1) IN
GENERAL.—Paragraph (1) of section
169(d) is amended by striking ‘‘before January 1,
1976,’’ and by striking ‘‘a new identifiable’’ and in-
serting ‘‘an identifiable’’.
(2) IDENTIFIABLE
TREATMENT
FACILITY.—
Paragraph (4) of section 169(d) is amended to read
as follows:
‘‘(4) IDENTIFIABLE
TREATMENT
FACILITY.—
For purposes of paragraph (1), the term ‘identifiable
treatment facility’ includes only tangible property
(not including a building and its structural compo-
nents, other than a building which is exclusively a
treatment facility) which is of a character subject to
the allowance for depreciation provided in section
167, which is identifiable as a treatment facility, and
which is property—
‘‘(A) the construction, reconstruction, or
erection of which is completed by the taxpayer,
or
975
‘‘(B) the original use of the property com-
mences with the taxpayer.’’.
(3) 
TECHNICAL
AMENDMENT.—Section
169(d)(3) is amended by striking ‘‘Health, Edu-
cation, and Welfare’’ and inserting ‘‘Health and
Human Services’’.
(b) COORDINATION WITH SECTION 48A INVEST-
MENT CREDIT.—Section 169 is amended by redesignating
subsections (e) though (j) as subsection (f) through (k),
respectively, and by inserting after subsection (d) the fol-
lowing new subsection:
‘‘(e) COORDINATION WITH SECTION 48A INVEST-
MENT CREDIT.—
‘‘(1) IN GENERAL.—In the case of any treat-
ment facility used in connection with a plant or
other property to which an amount is allocated
under section 48A(f), this section shall apply only if
such plant or other property was in operation before
January 1, 1976.
‘‘(2) 36-MONTH AMORTIZATION WITH RESPECT
TO
PRE-1976
PLANTS
NOT
ALLOCATED
CREDIT.—
References in this section to 60 months shall be
treated as references to 36 months in the case of
treatment facilities used in connection with a plant
or other property in operation before January 1,
976
1976, if no allocation is made under section 48A(f)
with respect to such plant or property.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to facilities placed in service after
the date of the enactment of this Act.
SEC. 1353. 5-YEAR RECOVERY PERIOD FOR ELIGIBLE INTE-
GRATED GASIFICATION COMBINED CYCLE
TECHNOLOGY UNIT ELIGIBLE FOR CREDIT.
(a) IN GENERAL.—Subparagraph (B) of section
168(e)(3) (defining 5-year property) is amended by strik-
ing ‘‘and’’ at the end of clause (v), by striking the period
at the end of clause (vi) and inserting ‘‘, and’’, and by
inserting after clause (vi) the following new clause:
‘‘(vii) any section 1245 property
which is part of an eligible integrated gas-
ification combined cycle technology unit (as
defined in section 48A(e)(4)) for which an
allocation is made under section 48A(f).’’.
(b) ALTERNATIVE SYSTEM.—The table contained in
section 168(g)(3)(B) (relating to special rule for certain
property assigned to classes) is amended by inserting after
the item relating to subparagraph (B)(iii) the following
new item:
‘‘(B) (vii) ...................................................................................................
20’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service after
977
the date of the enactment of this Act in taxable years end-
ing after such date.
PART IV—HIGH VOLUME NATURAL GAS
PROVISIONS
SEC. 1355. HIGH VOLUME NATURAL GAS PIPE TREATED AS
7-YEAR PROPERTY.
(a) IN GENERAL.—Section 168(e)(3)(C) (defining 7-
year property), as amended by this Act, is amended by
striking ‘‘and’’ at the end of clause (ii), by redesignating
clause (iii) as clause (iv), and by inserting after clause (ii)
the following new clause:
‘‘(iii) any high volume natural gas
pipe the original use of which commences
with the taxpayer after the date of the en-
actment of this clause, and’’.
(b) HIGH VOLUME NATURAL GAS PIPE.—Section
168(i) (relating to definitions and special rules), as
amended by this Act, is amended by adding at the end
the following new paragraph:
‘‘(17) HIGH VOLUME NATURAL GAS PIPE.—The
term ‘high volume natural gas pipe’ means—
‘‘(A) pipe which has an interior diameter
of at least 42 inches and which is part of a nat-
ural gas pipeline system, and
978
‘‘(B) any related equipment and appur-
tenances used in connection with such pipe.’’.
(c) ALTERNATIVE SYSTEM.—The table contained in
section 168(g)(3)(B) (relating to special rule for certain
property assigned to classes), as amended by this Act, is
amended by inserting after the item relating to subpara-
graph (C)(ii) the following new item:
‘‘(C) (iii) ....................................................................................................
22’’.
(d) ALTERNATIVE MINIMUM TAX EXCEPTION.—Sub-
paragraph (B) of section 56(a)(1), as amended by this
Act, is amended by inserting before the period the fol-
lowing: ‘‘, or in section 168(e)(3)(C)(iii)’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service on
or after the date of the enactment of this Act.
SEC. 1356. EXTENSION OF ENHANCED OIL RECOVERY
CREDIT TO HIGH VOLUME NATURAL GAS FA-
CILITIES.
(a) IN GENERAL.—Section 43(c)(1) (defining quali-
fied enhanced oil recovery costs) is amended by adding at
the end the following new subparagraph:
‘‘(D) Any amount which is paid or in-
curred during the taxable year in connection
with the construction of a gas treatment plant
which—
979
‘‘(i) prepares natural gas for transpor-
tation through a pipeline with a capacity of
at least 1,000,000,000,000 Btu of natural
gas per day, and
‘‘(ii) produces carbon dioxide which is
injected into hydrocarbon-bearing geologi-
cal formations.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to costs paid or incurred in taxable
years beginning after December 31, 2003.
Subtitle D—Additional Provisions
SEC. 1361. EXTENSION OF ACCELERATED DEPRECIATION
BENEFIT FOR ENERGY-RELATED BUSINESSES
ON INDIAN RESERVATIONS.
Paragraph (8) of section 168(j) (relating to termi-
nation) is amended by adding at the end the following new
sentence: ‘‘The preceding sentence shall be applied by sub-
stituting ‘‘December 31, 2005’’ for ‘‘December 31, 2004’’
in the case of property placed in service as part of a facil-
ity for—
‘‘(A) the generation or transmission of
electricity (including from any qualified energy
resource, as defined in section 45(c)),
‘‘(B) an oil or gas well,
980
‘‘(C) the transmission or refining of oil or
gas, or
‘‘(D) the production of any qualified fuel
(as defined in section 45K(c)).’’.
SEC. 1362. PAYMENT OF DIVIDENDS ON STOCK OF CO-
OPERATIVES WITHOUT REDUCING PATRON-
AGE DIVIDENDS.
(a) IN GENERAL.—Subsection (a) of section 1388
(relating to patronage dividend defined) is amended by
adding at the end the following: ‘‘For purposes of para-
graph (3), net earnings shall not be reduced by amounts
paid during the year as dividends on capital stock or other
proprietary capital interests of the organization to the ex-
tent that the articles of incorporation or bylaws of such
organization or other contract with patrons provide that
such dividends are in addition to amounts otherwise pay-
able to patrons which are derived from business done with
or for patrons during the taxable year.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to distributions in taxable years
ending after the date of the enactment of this Act.
981
SEC. 1363. DISTRIBUTIONS FROM PUBLICLY TRADED PART-
NERSHIPS TREATED AS QUALIFYING INCOME
OF REGULATED INVESTMENT COMPANIES.
(a) IN GENERAL.—Paragraph (2) of section 851(b)
(defining regulated investment company) is amended to
read as follows:
‘‘(2) at least 90 percent of its gross income is
derived from—
‘‘(A) dividends, interest, payments with re-
spect to securities loans (as defined in section
512(a)(5)), and gains from the sale or other
disposition of stock or securities (as defined in
section 2(a)(36) of the Investment Company
Act of 1940, as amended) or foreign currencies,
or other income (including but not limited to
gains from options, futures or forward con-
tracts) derived with respect to its business of
investing in such stock, securities, or currencies,
and
‘‘(B) distributions or other income derived
from an interest in a qualified publicly traded
partnership (as defined in subsection (h));
and’’.
(b) 
SOURCE
FLOW-THROUGH
RULE
NOT
TO
APPLY.—The last sentence of section 851(b) is amended
by inserting ‘‘(other than a qualified publicly traded part-
982
nership as defined in subsection (h))’’ after ‘‘derived from
a partnership’’.
(c) LIMITATION ON OWNERSHIP.—Subsection (c) of
section 851 is amended by redesignating paragraph (5)
as paragraph (6) and inserting after paragraph (4) the
following new paragraph:
‘‘(5) The term ‘outstanding voting securities of
such issuer’ shall include the equity securities of a
qualified publicly traded partnership (as defined in
subsection (h)).’’.
(d) DEFINITION OF QUALIFIED PUBLICLY TRADED
PARTNERSHIP.—Section 851 is amended by adding at the
end the following new subsection:
‘‘(h) QUALIFIED
PUBLICLY
TRADED
PARTNER-
SHIP.—For purposes of this section, the term ‘qualified
publicly traded partnership’ means a publicly traded part-
nership described in section 7704(b) other than a partner-
ship which would satisfy the gross income requirements
of section 7704(c)(2) if qualifying income included only
income described in subsection (b)(2)(A).’’.
(e) DEFINITION OF QUALIFYING INCOME.—Section
7704(d)(4) is amended by striking ‘‘section 851(b)(2)’’
and inserting ‘‘section 851(b)(2)(A)’’.
983
(f) LIMITATION ON COMPOSITION OF ASSETS.—Sub-
paragraph (B) of section 851(b)(3) is amended to read
as follows:
‘‘(B) not more than 25 percent of the
value of its total assets is invested in—
‘‘(i) the securities (other than Govern-
ment securities or the securities of other
regulated investment companies) of any
one issuer,
‘‘(ii) the securities (other than the se-
curities of other regulated investment com-
panies) of two or more issuers which the
taxpayer controls and which are deter-
mined, under regulations prescribed by the
Secretary, to be engaged in the same or
similar trades or businesses or related
trades or businesses, or
‘‘(iii) the securities of one or more
qualified publicly traded partnerships (as
defined in subsection (h)).’’.
(g) APPLICATION
OF SPECIAL PASSIVE ACTIVITY
RULE TO REGULATED INVESTMENT COMPANIES.—Sub-
section (k) of section 469 (relating to separate application
of section in case of publicly traded partnerships) is
984
amended by adding at the end the following new para-
graph:
‘‘(4) APPLICATION
TO
REGULATED
INVEST-
MENT COMPANIES.—For purposes of this section, a
regulated investment company (as defined in section
851) holding an interest in a qualified publicly trad-
ed partnership (as defined in section 851(h)) shall
be treated as a taxpayer described in subsection
(a)(2) with respect to items attributable to such in-
terest.’’.
(h) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
SEC. 1364. CEILING FANS.
(a) IN GENERAL.—Subchapter II of chapter 99 of
the Harmonized Tariff Schedule of the United States is
amended by inserting in numerical sequence the following
new heading:
‘‘
9902.84.14
Ceiling fans for permanent
installation (provided for in
subheading 8414.51.00) ......
Free
No change
No change
On or before
12/31/2005
’’.
(b) EFFECTIVE DATE.—The amendment made by
this section applies to goods entered, or withdrawn from
warehouse, for consumption on or after the 15th day after
the date of enactment of this Act.
985
SEC. 1365. CERTAIN STEAM GENERATORS, AND CERTAIN
REACTOR VESSEL HEADS, USED IN NUCLEAR
FACILITIES.
(a) 
CERTAIN
STEAM
GENERATORS.—Heading
9902.84.02 of the Harmonized Tariff Schedule of the
United States is amended by striking ‘‘12/31/2006’’ and
inserting ‘‘12/31/2008’’.
(b) CERTAIN
REACTOR
VESSEL
HEADS.—Sub-
chapter II of chapter 99 of the Harmonized Tariff Sched-
ule of the United States is amended by inserting in numer-
ical sequence the following new heading:
‘‘
9902.84.03
Reactor vessel heads for nu-
clear reactors (provided for
in subheading 8401.40.00) ..
Free
No change
No change
On or before
12/31/2007
’’.
(c) EFFECTIVE DATE.—
(1) SUBSECTION (a).—The amendment made
by subsection (a) shall take effect on the date of the
enactment of this Act.
(2) SUBSECTION (b).—The amendment made
by subsection (b) shall apply to goods entered, or
withdrawn from warehouse, for consumption on or
after the 15th day after the date of the enactment
of this Act.
986
SEC. 1366. BROWNFIELDS DEMONSTRATION PROGRAM FOR
QUALIFIED GREEN BUILDING AND SUSTAIN-
ABLE DESIGN PROJECTS.
(a) TREATMENT AS EXEMPT FACILITY BOND.—Sub-
section (a) of section 142 (relating to the definition of ex-
empt facility bond) is amended by striking ‘‘or’’ at the
end of paragraph (12), by striking the period at the end
of paragraph (13) and inserting ‘‘, or’’, and by inserting
at the end the following new paragraph:
‘‘(14) qualified green building and sustainable
design projects.’’.
(b) QUALIFIED GREEN BUILDING AND SUSTAINABLE
DESIGN PROJECTS.—Section 142 (relating to exempt fa-
cility bonds) is amended by adding at the end thereof the
following new subsection:
‘‘(l) QUALIFIED GREEN BUILDING AND SUSTAIN-
ABLE DESIGN PROJECTS.—
‘‘(1) IN GENERAL.—For purposes of subsection
(a)(14), the term ‘qualified green building and sus-
tainable design project’ means any project which is
designated by the Secretary, after consultation with
the Administrator of the Environmental Protection
Agency, as a qualified green building and sustain-
able design project and which meets the require-
ments of clauses (i), (ii), (iii), and (iv) of paragraph
(4)(A).
987
‘‘(2) DESIGNATIONS.—
‘‘(A) IN GENERAL.—Within 60 days after
the end of the application period described in
paragraph (3)(A), the Secretary, after consulta-
tion with the Administrator of the Environ-
mental Protection Agency, shall designate quali-
fied green building and sustainable design
projects. At least one of the projects designated
shall be located in, or within a 10-mile radius
of, an empowerment zone as designated pursu-
ant to section 1391, and at least one of the
projects designated shall be located in a rural
State. No more than one project shall be des-
ignated in a State. A project shall not be des-
ignated if such project includes a stadium or
arena for professional sports exhibitions or
games.
‘‘(B) MINIMUM CONSERVATION AND TECH-
NOLOGY
INNOVATION
OBJECTIVES.—The Sec-
retary, after consultation with the Adminis-
trator of the Environmental Protection Agency,
shall ensure that, in the aggregate, the projects
designated shall—
988
‘‘(i) reduce electric consumption by
more than 150 megawatts annually as
compared to conventional construction,
‘‘(ii) reduce daily sulfur dioxide emis-
sions by at least 10 tons compared to coal
generation power,
‘‘(iii) expand by 75 percent the do-
mestic solar photovoltaic market in the
United States (measured in megawatts) as
compared to the expansion of that market
from 2001 to 2002, and
‘‘(iv) use at least 25 megawatts of
fuel cell energy generation.
‘‘(3) LIMITED DESIGNATIONS.—A project may
not be designated under this subsection unless—
‘‘(A) the project is nominated by a State
or local government within 180 days of the en-
actment of this subsection, and
‘‘(B) such State or local government pro-
vides written assurances that the project will
satisfy the eligibility criteria described in para-
graph (4).
‘‘(4) APPLICATION.—
‘‘(A) IN GENERAL.—A project may not be
designated under this subsection unless the ap-
989
plication for such designation includes a project
proposal which describes the energy efficiency,
renewable energy, and sustainable design fea-
tures of the project and demonstrates that the
project satisfies the following eligibility criteria:
‘‘(i) GREEN BUILDING AND SUSTAIN-
ABLE DESIGN.—At least 75 percent of the
square footage of commercial buildings
which are part of the project is registered
for United States Green Building Council’s
LEED certification and is reasonably ex-
pected (at the time of the designation) to
receive such certification.
‘‘(ii) 
BROWNFIELD
REDEVELOP-
MENT.—The project includes a brownfield
site as defined by section 101(39) of the
Comprehensive Environmental Response,
Compensation, and Liability Act of 1980
(42 U.S.C. 9601), including a site de-
scribed in subparagraph (D)(ii)(II)(aa)
thereof.
‘‘(iii) STATE AND LOCAL SUPPORT.—
The project receives specific State or local
government resources which will support
the project in an amount equal to at least
990
$5,000,000. For purposes of the preceding
sentence, the term ‘resources’ includes tax
abatement benefits and contributions in
kind.
‘‘(iv) SIZE.—The project includes at
least one of the following:
‘‘(I) At least 1,000,000 square
feet of building.
‘‘(II) At least 20 acres.
‘‘(v) USE
OF
TAX
BENEFIT.—The
project proposal includes a description of
the net benefit of the tax-exempt financing
provided under this subsection which will
be allocated for financing of one or more
of the following:
‘‘(I) The purchase, construction,
integration, or other use of energy ef-
ficiency, renewable energy, and sus-
tainable design features of the project.
‘‘(II) Compliance with LEED
certification standards.
‘‘(III) The purchase, remediation,
and foundation construction and prep-
aration of the brownfields site.
991
‘‘(vi) EMPLOYMENT.—The project is
projected to provide permanent employ-
ment of at least 1,500 full time equivalents
(150 full time equivalents in rural States)
when completed and construction employ-
ment of at least 1,000 full time equivalents
(100 full time equivalents in rural States).
The application shall include an independent
analysis which describes the project’s economic
impact, including the amount of projected em-
ployment.
‘‘(B) PROJECT DESCRIPTION.—Each appli-
cation described in subparagraph (A) shall con-
tain for each project a description of—
‘‘(i) the amount of electric consump-
tion reduced as compared to conventional
construction,
‘‘(ii) the amount of sulfur dioxide
daily emissions reduced compared to coal
generation,
‘‘(iii) the amount of the gross in-
stalled capacity of the project’s solar pho-
tovoltaic capacity measured in megawatts,
and
992
‘‘(iv) the amount, in megawatts, of
the project’s fuel cell energy generation.
‘‘(5) CERTIFICATION
OF
USE
OF
TAX
BEN-
EFIT.—No later than 30 days after the completion
of the project, each project must certify to the Sec-
retary that the net benefit of the tax-exempt financ-
ing was used for the purposes described in para-
graph (4).
‘‘(6) DEFINITIONS.—For purposes of this
subsection—
‘‘(A) RURAL
STATE.—The term ‘rural
State’ means any State which has—
‘‘(i) 
a 
population 
of 
less 
than
4,500,000 according to the 2000 census,
‘‘(ii) a population density of less than
150 people per square mile according to
the 2000 census, and
‘‘(iii) increased in population by less
than half the rate of the national increase
between the 1990 and 2000 censuses.
‘‘(B) LOCAL
GOVERNMENT.—The term
‘local government’ has the meaning given such
term by section 1393(a)(5).
‘‘(C) NET BENEFIT OF TAX-EXEMPT FI-
NANCING.—The term ‘net benefit of tax-exempt
993
financing’ means the present value of the inter-
est savings (determined by a calculation estab-
lished by the Secretary) which result from the
tax-exempt status of the bonds.
‘‘(7) AGGREGATE
FACE
AMOUNT
OF
TAX-EX-
EMPT FINANCING.—
‘‘(A) IN GENERAL.—An issue shall not be
treated as an issue described in subsection
(a)(14) if the aggregate face amount of bonds
issued by the State or local government pursu-
ant thereto for a project (when added to the ag-
gregate face amount of bonds previously so
issued for such project) exceeds an amount des-
ignated by the Secretary as part of the designa-
tion.
‘‘(B) 
LIMITATION
ON
AMOUNT
OF
BONDS.—The Secretary may not allocate au-
thority to issue qualified green building and
sustainable design project bonds in an aggre-
gate face amount exceeding $2,000,000,000.
‘‘(8) TERMINATION.—Subsection (a)(14) shall
not apply with respect to any bond issued after Sep-
tember 30, 2009.
‘‘(9) TREATMENT
OF
CURRENT
REFUNDING
BONDS.—Paragraphs (7)(B) and (8) shall not apply
994
to any bond (or series of bonds) issued to refund a
bond issued under subsection (a)(14) before October
1, 2009, if—
‘‘(A) the average maturity date of the issue
of which the refunding bond is a part is not
later than the average maturity date of the
bonds to be refunded by such issue,
‘‘(B) the amount of the refunding bond
does not exceed the outstanding amount of the
refunded bond, and
‘‘(C) the net proceeds of the refunding
bond are used to redeem the refunded bond not
later than 90 days after the date of the
issuance of the refunding bond.
For purposes of subparagraph (A), average maturity shall
be determined in accordance with section 147(b)(2)(A).’’.
(c) EXEMPTION FROM GENERAL STATE VOLUME
CAPS.—Paragraph (3) of section 146(g) (relating to ex-
ception for certain bonds) is amended—
(1) by striking ‘‘or (13)’’ and inserting ‘‘(13),
or (14)’’, and
(2) by striking ‘‘and qualified public educational
facilities’’ and inserting ‘‘qualified public educational
facilities, and qualified green building and sustain-
able design projects’’.
995
(d) SPECIAL RULE FOR ASSETS FINANCED UNDER
THIS SECTION AND ACCOUNTABILITY.—
(1) DENIAL OF DOUBLE BENEFIT.—Any asset
financed with bonds issued pursuant to this section
shall be ineligible for any credit or deduction estab-
lished under the Energy Tax Policy Act of 2004.
(2) ACCOUNTABILITY.—Each issuer shall main-
tain, on behalf of each project, an interest bearing
reserve account equal to 1 percent of the net pro-
ceeds of any bond issued under this section for such
project. Not later than 5 years after the date of
issuance, the Secretary of the Treasury, after con-
sultation with the Administrator of the Environ-
mental Protection Agency, shall determine whether
the project financed with such bonds has substan-
tially complied with the terms and conditions de-
scribed in section 142(l)(4) of the Internal Revenue
Code of 1986 (as added by this section). If the Sec-
retary, after such consultation, certifies that the
project has substantially complied with such terms
and conditions and meets the commitments set forth
in the application for such project described in sec-
tion 142(l)(4) of such Code, amounts in the reserve
account, including all interest, shall be released to
the project. If the Secretary determines that the
996
project has not substantially complied with such
terms and conditions, amounts in the reserve ac-
count, including all interest, shall be paid to the
United States Treasury.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to bonds issues after the date of
the enactment of this Act.
TITLE XIV—MISCELLANEOUS
Subtitle A—Rural and Remote
Electricity Construction
SEC. 1401. DENALI COMMISSION PROGRAMS.
(a) POWER COST EQUALIZATION PROGRAM.—There
are authorized to be appropriated to the Denali Commis-
sion established by the Denali Commission Act of 1998
(42 U.S.C. 3121 note) not more than $5,000,000 for each
of fiscal years 2005 through 2011 for the purposes of
funding the power cost equalization program established
under section 42.45.100 of the Alaska Statutes.
(b) AVAILABILITY OF FUNDS.—
(1) PURPOSE.—Amounts described in para-
graph (2) shall be available to the Denali Commis-
sion to permit energy generation and development
(including fuel cells, hydroelectric, solar, wind, wave,
and tidal energy, and alternative energy sources),
energy transmission (including interties), fuel tank
997
replacement and clean-up, fuel transportation net-
works and related facilities, power cost equalization
programs, and other energy programs, notwith-
standing any other provision of law.
(2) AMOUNTS.—(A) Except as provided in sub-
paragraph (B), the amounts referred to in para-
graph (1) shall be any Federal royalties, rents, and
bonuses derived from the Federal share of Federal
oil and gas leases in the National Petroleum Reserve
in Alaska, up to a maximum of $50,000,000, for
each of the fiscal years 2004 through 2013.
(B) If amounts available under subparagraph
(A) for one of the fiscal years 2004 through 2013
are less than $50,000,000, the Secretary of Energy
shall make available an amount sufficient to ensure
that the amount available under this subsection for
that fiscal year equals $50,000,000, from amounts
remaining after deposits are made under section
949(a)(1), from the same source from which those
deposits are made.
SEC. 1402. RURAL AND REMOTE COMMUNITY ASSISTANCE.
(a) PROGRAM.—Section 19 of the Rural Electrifica-
tion Act of 1936 (7 U.S.C 918a) is amended by striking
all that precedes subsection (b) and inserting the fol-
lowing:
998
‘‘SEC. 19. ELECTRIC GENERATION, TRANSMISSION, AND
DISTRIBUTION 
FACILITIES 
EFFICIENCY
GRANTS AND LOANS TO RURAL AND REMOTE
COMMUNITIES WITH EXTREMELY HIGH ELEC-
TRICITY COSTS.
‘‘(a) IN GENERAL.—The Secretary, acting through
the Rural Utilities Service, may—
‘‘(1) in coordination with State rural develop-
ment initiatives, make grants and loans to persons,
States, political subdivisions of States, and other en-
tities organized under the laws of States, to acquire,
construct, extend, upgrade, and otherwise improve
electric generation, transmission, and distribution fa-
cilities serving communities in which the average
revenue per kilowatt hour of electricity for all con-
sumers is greater than 150 percent of the average
revenue per kilowatt hour of electricity for all con-
sumers in the United States (as determined by the
Energy Information Administration using the most
recent data available);
‘‘(2) make grants and loans to the Denali Com-
mission established by the Denali Commission Act of
1998 (42 U.S.C. 3121 note; Public 105–277) to be
used for the purpose of providing funds to acquire,
construct, extend, upgrade, finance, and otherwise
improve electric generation, transmission, and dis-
999
tribution facilities serving communities described in
paragraph (1); and
‘‘(3) make grants to State entities to establish
and support a revolving fund to provide a more cost-
effective means of purchasing fuel in areas where
the fuel cannot be shipped by means of surface
transportation.’’.
(b) DEFINITION
OF PERSON.—Section 13 of the
Rural Electrification Act of 1936 (7 U.S.C. 913) is
amended by striking ‘‘or association’’ and inserting ‘‘asso-
ciation, or Indian tribe (as defined in section 4 of the In-
dian Self-Determination and Education Assistance Act)’’.
Subtitle B—Coastal Programs
SEC. 1411. ROYALTY PAYMENTS UNDER LEASES UNDER
THE OUTER CONTINENTAL SHELF LANDS
ACT.
(a) ROYALTY RELIEF.—
(1) IN GENERAL.—For purposes of providing
compensation for lessees and a State for which
amounts are authorized by section 6004(c) of the Oil
Pollution Act of 1990 (Public Law 101–380), a les-
see may withhold from payment any royalty due and
owing to the United States under any leases under
the Outer Continental Shelf Lands Act (43 U.S.C.
1301 et seq.) for offshore oil or gas production from
1000
a covered lease tract if, on or before the date that
the payment is due and payable to the United
States, the lessee makes a payment to the Secretary
of the Interior of 44 cents for every $1 of royalty
withheld.
(2) USE OF AMOUNTS PAID TO SECRETARY.—
Within 30 days after the Secretary of the Interior
receives payments under paragraph (1), the Sec-
retary of the Interior shall—
(A) make 47.5 percent of such payments
available to the State referred to in section
6004(c) of the Oil Pollution Act of 1990; and
(B) make 52.5 percent of such payments
available equally, only for the programs and
purposes identified as number 282 at page
1389 of House Report number 108–10 and for
a program described at page 1159 of that Re-
port in the State referred to in such section
6004(c).
(3) TREATMENT
OF
AMOUNTS.—Any royalty
withheld by a lessee in accordance with this section
(including any portion thereof that is paid to the
Secretary of the Interior under paragraph (1)) shall
be treated as paid for purposes of satisfaction of the
royalty obligations of the lessee to the United States.
1001
(4) CERTIFICATION OF WITHHELD AMOUNTS.—
The Secretary of the Treasury shall—
(A) determine the amount of royalty with-
held by a lessee under this section; and
(B) promptly publish a certification when
the total amount of royalty withheld by the les-
see under this section is equal to—
(i) the dollar amount stated at page
47 of Senate Report number 101–534,
which is designated therein as the total
drainage claim for the West Delta field;
plus
(ii) interest as described at page 47 of
that Report.
(b) PERIOD OF ROYALTY RELIEF.—Subsection (a)
shall apply to royalty amounts that are due and payable
in the period beginning on January 1, 2004, and ending
on the date on which the Secretary of the Treasury pub-
lishes a certification under subsection (a)(4)(B).
(c) DEFINITIONS.—As used in this section:
(1) COVERED LEASE TRACT.—The term ‘‘cov-
ered lease tract’’ means a leased tract (or portion of
a leased tract)—
1002
(A) lying seaward of the zone defined and
governed by section 8(g) of the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 1337(g)); or
(B) lying within such zone but to which
such section does not apply.
(2) LESSEE.—The term ‘‘lessee’’—
(A) means a person or entity that, on the
date of the enactment of the Oil Pollution Act
of 1990, was a lessee referred to in section
6004(c) of that Act (as in effect on that date
of the enactment), but did not hold lease rights
in Federal offshore lease OCS–G–5669; and
(B) includes successors and affiliates of a
person or entity described in subparagraph (A).
SEC. 1412. DOMESTIC OFFSHORE ENERGY REINVESTMENT.
(a) DOMESTIC OFFSHORE ENERGY REINVESTMENT
PROGRAM.—The Outer Continental Shelf Lands Act (43
U.S.C. 1331 et seq.) is amended by adding at the end
the following:
‘‘SEC. 32. DOMESTIC OFFSHORE ENERGY REINVESTMENT
PROGRAM.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) APPROVED
PLAN.—The term ‘approved
plan’ means a Secure Energy Reinvestment Plan ap-
proved by the Secretary under this section.
1003
‘‘(2) COASTAL
ENERGY
STATE.—The term
‘Coastal Energy State’ means a Coastal State off
the coastline of which, within the seaward lateral
boundary as determined by the map referenced in
subsection (c)(2)(A), outer Continental Shelf bonus
bids or royalties are generated, other than bonus
bids or royalties from a leased tract within any area
of the outer Continental Shelf for which a morato-
rium on new leasing was in effect as of January 1,
2002, unless the lease was issued before the estab-
lishment of the moratorium and was in production
on such date.
‘‘(3) COASTAL
POLITICAL
SUBDIVISION.—The
term ‘coastal political subdivision’ means a county,
parish, or other equivalent subdivision of a Coastal
Energy State, all or part of which lies within the
boundaries of the coastal zone of the State, as iden-
tified in the State’s approved coastal zone manage-
ment program under the Coastal Zone Management
Act of 1972 (16 U.S.C. 1451 et seq.) on the date
of the enactment of this section.
‘‘(4) COASTAL POPULATION.—The term ‘coastal
population’ means the population of a coastal polit-
ical subdivision, as determined by the most recent
official data of the Census Bureau.
1004
‘‘(5) COASTLINE.—The term ‘coastline’ has the
same meaning as the term ‘coast line’ in subsection
2(c) of the Submerged Lands Act (43 U.S.C.
1301(c)).
‘‘(6) FUND.—The term ‘Fund’ means the Se-
cure Energy Reinvestment Fund established by this
section.
‘‘(7) LEASED TRACT.—The term ‘leased tract’
means a tract maintained under section 6 or leased
under section 8 for the purpose of drilling for, devel-
oping, and producing oil and natural gas resources.
‘‘(8) QUALIFIED OUTER CONTINENTAL SHELF
REVENUES.—(A) Except as provided in subpara-
graph (B), the term ‘qualified outer Continental
Shelf revenues’ means all amounts received by the
United States on or after October 1, 2003, from
each leased tract or portion of a leased tract lying
seaward of the zone defined and governed by section
8(g), or lying within such zone but to which section
8(g) does not apply, including bonus bids, rents, roy-
alties (including payments for royalties taken in kind
and sold), net profit share payments, and related in-
terest.
‘‘(B) Such term does not include any revenues
from a leased tract or portion of a leased tract that
1005
is included within any area of the outer Continental
Shelf for which a moratorium on new leasing was in
effect as of January 1, 2002, unless the lease was
issued before the establishment of the moratorium
and was in production on such date.
‘‘(9) SECRETARY.—The term ‘Secretary’ means
the Secretary of the Interior.
‘‘(b) SECURE ENERGY REINVESTMENT FUND.—
‘‘(1) ESTABLISHMENT.—There is established in
the Treasury of the United States a separate ac-
count which shall be known as the ‘Secure Energy
Reinvestment Fund’. The Fund shall consist of
amounts deposited under paragraph (2), and such
other amounts as may be appropriated to the Fund.
‘‘(2) DEPOSITS.—For each fiscal year after fis-
cal year 2003, the Secretary of the Treasury shall
deposit into the Fund the following:
‘‘(A) Notwithstanding section 9, all quali-
fied outer Continental Shelf revenues attrib-
utable to royalties received by the United States
in the fiscal year that are in excess of the fol-
lowing amount:
‘‘(i) $3,455,000,000 in the case of
royalties received in fiscal year 2004.
1006
‘‘(ii) $3,726,000,000 in the case of
royalties received in fiscal year 2005.
‘‘(iii) $4,613,000,000 in the case of
royalties received in fiscal year 2006.
‘‘(iv) $5,226,000,000 in the case of
royalties received in fiscal year 2007.
‘‘(v) $5,841,000,000 in the case of
royalties received in fiscal year 2008.
‘‘(vi) $5,763,000,000 in the case of
royalties received in fiscal year 2009.
‘‘(vii) $6,276,000,000 in the case of
royalties received in fiscal year 2010.
‘‘(viii) $6,351,000,000 in the case of
royalties received in fiscal year 2011.
‘‘(ix) $6,551,000,000 in the case of
royalties received in fiscal year 2012.
‘‘(x) $5,120,000,000 in the case of
royalties received in fiscal year 2013.
‘‘(B) Notwithstanding section 9, all quali-
fied outer Continental shelf revenues attrib-
utable to bonus bids received by the United
States in each of the fiscal years 2004 through
2013 that are in excess of $1,000,000,000.
‘‘(C) Notwithstanding section 9, in addi-
tion to amounts deposited under subparagraphs
1007
(A) and (B), $35,000,000 of amounts received
by the United States each fiscal year as royal-
ties for oil or gas production on the outer Con-
tinental Shelf, except that no amounts shall be
deposited under this subparagraph before fiscal
year 2004 or after fiscal year 2013.
‘‘(D) All interest earned under paragraph
(4).
‘‘(E) All repayments under subsection (f).
‘‘(3) REDUCTION IN DEPOSIT.—(A) For each
fiscal year after fiscal year 2013 in which amounts
received by the United States as royalties for oil or
gas production on the outer Continental Shelf are
less than the sum of the amounts described in sub-
paragraph (B) (before the application of this sub-
paragraph), the Secretary of the Treasury shall re-
duce each of the amounts described in subparagraph
(B) proportionately.
‘‘(B) The amounts referred to in subparagraph
(A) are the following:
‘‘(i) The amount required to be covered
into the Historic Preservation Fund under sec-
tion 108 of the National Historic Preservation
Act (16 U.S.C. 470h) on the date of the enact-
ment of this paragraph.
1008
‘‘(ii) The amount required to be credited to
the Land and Water Conservation Fund under
section 2(c)(2) of the Land and Water Con-
servation Fund Act of 1965 (16 U.S.C. 4601–
5(c)(2)) on the date of the enactment of this
paragraph.
‘‘(iii) The amount required to be deposited
under subparagraph (C) of paragraph (2) of
this subsection.
‘‘(4) INVESTMENT.—The Secretary of the
Treasury shall invest moneys in the Fund (including
interest) in public debt securities with maturities
suitable to the needs of the Fund, as determined by
the Secretary of the Treasury, and bearing interest
at rates determined by the Secretary of the Treas-
ury, taking into consideration current market yields
on outstanding marketable obligations of the United
States of comparable maturity. Such invested mon-
eys shall remain invested until needed to meet re-
quirements for disbursement under this section.
‘‘(5) REVIEW
AND
REVISION
OF
BASELINE
AMOUNTS.—Not later than December 31, 2008, the
Secretary of the Interior, in consultation with the
Secretary of the Treasury, shall—
1009
‘‘(A) determine the amount and composi-
tion of outer Continental Shelf revenues that
were received by the United States in each of
the fiscal years 2004 through 2008;
‘‘(B) project the amount and composition
of outer Continental Shelf revenues that will be
received in the United States in each of the fis-
cal years 2009 through 2013; and
‘‘(C) submit to the Congress a report re-
garding whether any of the dollar amounts set
forth in clauses (v) though (x) of paragraph
(2)(A) or paragraph (2)(B) should be modified
to reflect those projections.
‘‘(6) AUTHORIZATION
OF
APPROPRIATION
OF
ADDITIONAL AMOUNTS.—In addition to the amounts
deposited into the Fund under paragraph (2) there
are authorized to be appropriated to the Fund—
‘‘(A) for each of fiscal years 2004 through
2013 up to $500,000,000; and
‘‘(B) for each fiscal year after fiscal year
2013 up to 25 percent of qualified outer Conti-
nental Shelf revenues received by the United
States in the preceding fiscal year.
‘‘(c) USE
OF
SECURE
ENERGY
REINVESTMENT
FUND.—
1010
‘‘(1) IN GENERAL.—(A) The Secretary shall use
amounts in the Fund remaining after the application
of subsections (h) and (i) to pay to each Coastal En-
ergy State that has a Secure Energy Reinvestment
Plan approved by the Secretary under this section,
and to coastal political subdivisions of such State,
the amount allocated to the State or coastal political
subdivision, respectively, under this subsection.
‘‘(B) The Secretary shall make payments under
this paragraph in December of 2004, and of each
year thereafter, from revenues received by the
United States in the immediately preceding fiscal
year.
‘‘(2) ALLOCATION.—The Secretary shall allo-
cate amounts deposited into the Fund in a fiscal
year, and other amounts determined by the Sec-
retary to be available, among Coastal Energy States
that have an approved plan, and to coastal political
subdivisions of such States, as follows:
‘‘(A)(i) Of the amounts made available for
each of the first 10 fiscal years for which
amounts are available for allocation under this
paragraph, the allocation for each Coastal En-
ergy State shall be calculated based on the ratio
of qualified outer Continental Shelf revenues
1011
generated off the coastline of the Coastal En-
ergy State to the qualified outer Continental
Shelf revenues generated off the coastlines of
all Coastal Energy States for the period begin-
ning January 1, 1992, and ending December
31, 2001.
‘‘(ii) Of the amounts available for a fiscal
year in a subsequent 10-fiscal-year period, the
allocation for each Coastal Energy State shall
be calculated based on such ratio determined by
the Secretary with respect to qualified outer
Continental Shelf revenues generated in each
subsequent corresponding 10-year period.
‘‘(iii) For purposes of this subparagraph,
qualified outer Continental Shelf revenues shall
be considered to be generated off the coastline
of a Coastal Energy State if the geographic
center of the lease tract from which the reve-
nues are generated is located within the area
formed by the extension of the State’s seaward
lateral boundaries, calculated using the strict
and scientifically derived conventions estab-
lished to delimit international lateral boundaries
under the Law of the Sea, as indicated on the
map entitled ‘Calculated Seaward Lateral
1012
Boundaries’ and dated October 2003, on file in
the Office of the Director, Minerals Manage-
ment Service.
‘‘(B) 35 percent of each Coastal Energy
State’s allocable share as determined under
subparagraph (A) shall be allocated among and
paid directly to the coastal political subdivisions
of the State by the Secretary based on the fol-
lowing formula:
‘‘(i) 25 percent shall be allocated
based on the ratio of each coastal political
subdivision’s coastal population to the
coastal population of all coastal political
subdivisions of the Coastal Energy State.
‘‘(ii) 25 percent shall be allocated
based on the ratio of each coastal political
subdivision’s coastline miles to the coast-
line miles of all coastal political subdivi-
sions of the State. In the case of a coastal
political subdivision without a coastline,
the coastline of the political subdivision for
purposes of this clause shall be one-third
the average length of the coastline of the
other coastal political subdivisions of the
State.
1013
‘‘(iii) 50 percent shall be allocated
based on a formula that allocates 75 per-
cent of the funds based on such coastal po-
litical subdivision’s relative distance from
any leased tract used to calculate that
State’s allocation and 25 percent of the
funds based on the relative level of outer
Continental Shelf oil and gas activities in
a coastal political subdivision to the level of
outer Continental Shelf oil and gas activi-
ties in all coastal political subdivisions in
such State, as determined by the Sec-
retary, except that in the case of a coastal
political subdivision in the State of Cali-
fornia that has a coastal shoreline, that is
not within 200 miles of the geographic cen-
ter of a leased tract or portion of a leased
tract, and in which there is located one or
more oil refineries the allocation under this
clause shall be determined as if that coast-
al political subdivision were located within
a distance of 50 miles from the geographic
center of the closest leased tract with
qualified outer Continental Shelf revenues.
1014
‘‘(3) REALLOCATION.—Any amount allocated to
a Coastal Energy State or coastal political subdivi-
sion of such a State but not disbursed because of a
failure of a Coastal Energy State to have an ap-
proved plan shall be reallocated by the Secretary
among all other Coastal Energy States in a manner
consistent with this subsection, except that the
Secretary—
‘‘(A) shall hold the amount in escrow with-
in the Fund until the earlier of the end of the
next fiscal year in which the allocation is made
or the final resolution of any appeal regarding
the disapproval of a plan submitted by the
State under this section; and
‘‘(B) shall continue to hold such amount in
escrow until the end of the subsequent fiscal
year thereafter, if the Secretary determines that
such State is making a good faith effort to de-
velop and submit, or update, a Secure Energy
Reinvestment Plan under subsection (d).
‘‘(4) MINIMUM
SHARE.—Notwithstanding any
other provision of this subsection, the amount allo-
cated under this subsection to each Coastal Energy
State each fiscal year shall be not less than 5 per-
cent of the total amount available for that fiscal year
1015
for allocation under this subsection to Coastal En-
ergy States, except that for any Coastal Energy
State determined by the Secretary to have an area
formed by the extension of the State’s seaward lat-
eral boundary, as designated by the map referenced
in paragraph (2)(A)(iii), of less than 490 square
statute miles, the amount allocated to such State
shall not be less than 10 percent of the total amount
available for that fiscal year for allocation under this
subsection.
‘‘(5) RECOMPUTATION.—If the allocation to one
or more Coastal Energy States under paragraph (4)
with respect to a fiscal year is greater than the
amount that would be allocated to such States under
this subsection if paragraph (4) did not apply, then
the allocations under this subsection to all other
Coastal Energy States shall be paid from the
amount remaining after deduction of the amounts
allocated under paragraph (4), but shall be reduced
on a pro rata basis by the sum of the allocations
under paragraph (4) so that not more than 100 per-
cent of the funds available in the Fund for allocation
with respect to that fiscal year is allocated.
‘‘(d) SECURE ENERGY REINVESTMENT PLAN.—
1016
‘‘(1) DEVELOPMENT
AND
SUBMISSION
OF
STATE PLANS.—The Governor of each State seeking
to receive funds under this section shall prepare, and
submit to the Secretary, a Secure Energy Reinvest-
ment Plan describing planned expenditures of funds
received under this section. The Governor shall in-
clude in the State plan submitted to the Secretary
plans prepared by the coastal political subdivisions
of the State. The Governor and the coastal political
subdivision shall solicit local input and provide for
public participation in the development of the State
plan. In describing the planned expenditures, the
State and coastal political subdivisions shall include
only items that are uses authorized under subsection
(e).
‘‘(2) APPROVAL OR DISAPPROVAL.—
‘‘(A) IN
GENERAL.—The Secretary may
not disburse funds to a State or coastal political
subdivision of a State under this section before
the date the State has an approved plan. The
Secretary shall approve a Secure Energy Rein-
vestment Plan submitted by a State under
paragraph (1) if the Secretary determines that
the expenditures provided for in the plan are
1017
uses authorized under subsection (e), and that
the plan contains each of the following:
‘‘(i) The name of the State agency
that will have the authority to represent
and act for the State in dealing with the
Secretary for purposes of this section.
‘‘(ii) A program for the implementa-
tion of the plan, that (I) has as a goal im-
proving the environment, (II) has as a goal
addressing the impacts of oil and gas pro-
duction from the outer Continental Shelf,
and (III) includes a description of how the
State and coastal political subdivisions of
the State will evaluate the effectiveness of
the plan.
‘‘(iii) Certification by the Governor
that ample opportunity has been accorded
for public participation in the development
and revision of the plan.
‘‘(iv) Measures for taking into account
other relevant Federal resources and pro-
grams. The plan shall be correlated so far
as practicable with other State, regional,
and local plans.
1018
‘‘(v) For any State for which the ratio
determined under subsection (c)(2)(A)(i)
or (c)(2)(A)(ii), as appropriate, expressed
as a percentage, exceeds 25 percent, a plan
to spend not less than 30 percent of the
total funds provided under this section
each fiscal year to that State and appro-
priate coastal political subdivisions, to ad-
dress the socioeconomic or environmental
impacts identified in the plan that remain
significant or progressive after implemen-
tation of mitigation measures identified in
the most current environmental impact
statement (as of the date of the enactment
of this clause) required under the National
Environmental Protection Act of 1969 for
lease sales under this Act.
‘‘(vi) A plan to utilize at least one-half
of the funds provided pursuant to sub-
section (c)(2)(B), and a portion of other
funds provided to such State under this
section, on programs or projects that are
coordinated and conducted in partnership
between the State and coastal political sub-
division.
1019
‘‘(B) PROCEDURE AND TIMING.—The Sec-
retary shall approve or disapprove each plan
submitted in accordance with this subsection
within 90 days after its submission.
‘‘(3) AMENDMENT OR REVISION.—Any amend-
ment to or revision of an approved plan shall be pre-
pared and submitted in accordance with the require-
ments under this paragraph for the submittal of
plans, and shall be approved or disapproved by the
Secretary in accordance with paragraph (2)(B).
‘‘(e) AUTHORIZED USES.—A Coastal Energy State,
and a coastal political subdivision of such a State, shall
use amounts paid under this section (including any such
amounts deposited into a trust fund administered by the
State or coastal political subdivision dedicated to uses con-
sistent with this subsection), in compliance with Federal
and State law and the approved plan of the State, only
for one or more of the following purposes:
‘‘(1) Projects and activities, including edu-
cational activities, for the conservation, protection,
or restoration of coastal areas including wetlands.
‘‘(2) Mitigating damage to, or the protection of,
fish, wildlife, or natural resources.
‘‘(3) To the extent of such sums as are consid-
ered reasonable by the Secretary, planning assist-
1055
the calendar year following the year in which
the renewable fuel deficit is created, such per-
son shall achieve compliance with the renewable
fuel requirement under paragraph (2), and shall
generate or purchase additional renewable fuel
credits to offset the renewable fuel deficit of the
previous year.
‘‘(7) SEASONAL
VARIATIONS
IN
RENEWABLE
FUEL USE.—
‘‘(A) STUDY.—For each of the calendar
years 2005 through 2012, the Administrator of
the Energy Information Administration shall
conduct a study of renewable fuels blending to
determine whether there are excessive seasonal
variations in the use of renewable fuels.
‘‘(B) REGULATION
OF
EXCESSIVE
SEA-
SONAL VARIATIONS.—If, for any calendar year,
the Administrator of the Energy Information
Administration, based on the study under sub-
paragraph (A), makes the determinations speci-
fied in subparagraph (C), the Administrator
shall promulgate regulations to ensure that 35
percent or more of the quantity of renewable
fuels necessary to meet the requirement of
paragraph (2) is used during each of the peri-