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natural threats to critical energy infrastructure facili-
ties in the OCS Production State and to support any
of the necessary public service or transportation ac-
tivities that are needed to maintain the safety and
operation of critical energy infrastructure facilities.
Such plan shall include—
(A) 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;
(B) a program for the implementation of
the plan which describes how the amounts pro-
vided under this section will be used;
(C) a contact for each OCS political sub-
division and description of how such political
subdivisions will use amounts provided under
this section, including a certification by the Gov-
ernor that such uses are consistent with the re-
quirements of this section; and
(D) measures for taking into account other
relevant Federal resources and programs.
(2) ANNUAL REVIEWS.—Not later than 1 year
after the date of submission of the plan and annually
thereafter, the Governor of an OCS Production State
shall—
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(A) review the approved State plan; and
(B) submit to the Secretary any revised
State plan resulting from the review.
(3) APPROVAL OF PLANS.—
(A) IN GENERAL.—In consultation with ap-
propriate Federal security officials and the Sec-
retaries of Commerce and Energy, the Secretary
shall—
(i) approve each State plan; or
(ii) recommend changes to the State
plan.
(B) RESUBMISSION
OF
STATE
PLANS.—If
the Secretary recommends changes to a State
plan under subparagraph (A)(ii), the Governor
of the OCS Production State may resubmit a re-
vised State plan to the Secretary for approval.
(4) AVAILABILITY
OF
PLANS.—The Secretary
shall provide to Congress a copy of each approved
State plan.
(5) CONSULTATION AND PUBLIC COMMENT.—
(A) CONSULTATION.—The Governor of an
OCS Production State shall develop the State
plan in consultation with Federal, State, and
local law enforcement and public safety officials,
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industry, Indian tribes, the scientific commu-
nity, and other persons as appropriate.
(B) PUBLIC
COMMENT.—The Governor of
an OCS Production State may solicit public
comments on the State plan to the extent that the
Governor determines to be appropriate.
(d) ALLOCATION OF AMOUNTS BY THE SECRETARY.—
The Secretary shall allocate the amounts made available for
the purposes of carrying out the program provided for by
this section among OCS Production States as follows:
(1) twenty-five percent of the amounts shall be
divided equally among OCS Production States.
(2) seventy-five percent of the amounts shall be
divided among OCS Production States on the basis of
the proximity of each OCS Production State to off-
shore locations at which oil and gas are being pro-
duced.
(e) CALCULATION.—The amount for each OCS Produc-
tion State under paragraph (d)(2) shall be calculated based
on the ratio of qualified OCS revenues generated off the
coastline of the OCS Production State to the qualified OCS
revenues generated off the coastlines of all OCS Production
States for the prior 5-year period. Where there is more than
one OCS Production State within 200 miles of a leased
tract, the amount of each OCS Production State’s payment
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under paragraph (d)(2) for such leased tract shall be in-
versely proportional to the distance between the nearest
point on the coastline of such State and the geographic cen-
ter of each leased tract or portion of the leased tract (to
the nearest whole mile) that is within 200 miles of that
coastline, as determined by the Secretary. A leased tract or
portion of a leased tract shall be excluded if the tract or
portion is located in a geographic area where a moratorium
on new leasing was in effect on January 1, 2001, unless
the lease was issued prior to the establishment of the mora-
torium and was in production on January 1, 2001.
(f) PAYMENTS TO OCS POLITICAL SUBDIVISIONS.—
Thirty-five percent of each OCS Production State’s allo-
cable share as determined under subsection (e) shall be paid
directly to the OCS political subdivisions by the Secretary
based on the following formula:
(1) twenty-five percent shall be allocated based
on the ratio of such OCS political subdivision’s popu-
lation to the population of all OCS political subdivi-
sions in the OCS Production State.
(2) twenty-five percent shall be allocated based
on the ratio of such OCS political subdivision’s coast-
line miles to the coastline miles of all OCS political
subdivisions in the OCS Production State. For pur-
poses of this subsection, those OCS political subdivi-
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sions without coastlines shall be considered to have a
coastline that is the average length of the coastlines of
all political subdivisions in the State.
(3) fifty percent shall be allocated based on the
relative distance of such OCS political subdivision
from any leased tract used to calculate that OCS Pro-
duction State’s allocation using ratios that are in-
versely proportional to the distance between the point
in the coastal political subdivision closest to the geo-
graphic center of each leased tract or portion, as de-
termined by the Secretary. For purposes of the cal-
culations under this subparagraph, a leased tract or
portion of a leased tract shall be excluded if the leased
tract or portion is located in a geographic area where
a moratorium on new leasing was in effect on Janu-
ary 1, 2001, unless the lease was issued prior to the
establishment of the moratorium and was in produc-
tion on January 1, 2001.
(g) FAILURE
TO
HAVE
PLAN
APPROVED.—Any
amount allocated to an OCS Production State or OCS po-
litical subdivision but not disbursed because of a failure to
have an approved Plan under this section shall be allocated
equally by the Secretary among all other OCS Production
States in a manner consistent with this subsection except
that the Secretary shall hold in escrow such amount until
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the final resolution of any appeal regarding the disapproval
of a plan submitted under this section. The Secretary may
waive the provisions of this paragraph and hold an OCS
Production State’s allocable share in escrow if the Secretary
determines that such State is making a good faith effort
to develop and submit, or update, a Plan.
(h) USE
OF AMOUNTS ALLOCATED
BY
THE SEC-
RETARY.—
(1) IN GENERAL.—Amounts allocated by the Sec-
retary under subsection (d) may be used only in ac-
cordance with a plan approved pursuant to sub-
section (c) for—
(A) activities to secure critical OCS energy
infrastructure facilities from human or natural
threats; and
(B) support of any necessary public service
or transportation activities that are needed to
maintain the safety and operation of critical
OCS energy infrastructure facilities.
(2) RESTORATION OF COASTAL WETLAND.—For
the purpose of subparagraph (1)(A), restoration of
any coastal wetland shall be considered to be an ac-
tivity that secures critical OCS energy infrastructure
facilities from a natural threat.
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(i) FAILURE TO HAVE USE.—Any amount allocated
to an OCS political subdivision but not disbursed because
of a failure to have a qualifying use as described in sub-
section (h) shall be allocated by the Secretary to the OCS
Production State in which the OCS political subdivision
is located except that the Secretary shall hold in escrow such
amount until the final resolution of any appeal regarding
the use of the funds.
(j) COMPLIANCE WITH AUTHORIZED USES.—If the
Secretary determines that any expenditure made by an
OCS Production State or an OCS political subdivision is
not consistent with the uses authorized in subsection (h),
the Secretary shall not disburse any further amounts under
this section to that OCS Production State or OCS political
subdivision until the amounts used for the inconsistent ex-
penditure have been repaid or obligated for authorized uses.
(k) RULEMAKING.—The Secretary may promulgate
such rules and regulations as may be necessary to carry
out the purposes of this section, including rules and regula-
tions setting forth an appropriate process for appeals.
(l) AUTHORIZATION OF APPROPRIATIONS.—There are
hereby authorized to be appropriated $450,000,000 for each
of the fiscal years 2003 through 2008 to carry out the pur-
poses of this section.
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DIVISION H—ENERGY TAX
INCENTIVES
SEC. 1900. SHORT TITLE; ETC.
(a) SHORT TITLE.—This division may be cited as the
‘‘Energy Tax Incentives Act of 2003’’.
(b) AMENDMENT OF 1986 CODE.—Except as otherwise
expressly provided, whenever in this division an amend-
ment or repeal is expressed in terms of an amendment to,
or repeal of, a section or other provision, the reference shall
be considered to be made to a section or other provision
of the Internal Revenue Code of 1986.
TITLE 
XIX—EXTENSION 
AND
MODIFICATION 
OF 
RENEW-
ABLE ELECTRICITY PRODUC-
TION TAX CREDIT
SEC. 1901. THREE-YEAR EXTENSION OF CREDIT FOR PRO-
DUCING ELECTRICITY FROM WIND AND POUL-
TRY WASTE.
(a) IN GENERAL.—Subparagraphs (A) and (C) of sec-
tion 45(c)(3) (relating to qualified facility), as amended by
section 603(a) of the Job Creation and Worker Assistance
Act of 2002, are each amended by striking ‘‘January 1,
2004’’ and inserting ‘‘January 1, 2007’’.
(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to electricity sold after the date of the
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enactment of this Act, in taxable years ending after such
date.
SEC. 1902. CREDIT FOR ELECTRICITY PRODUCED FROM BIO-
MASS.
(a) EXTENSION AND MODIFICATION OF PLACED-IN-
SERVICE
RULES.—Paragraph (3) of section 45(c) is
amended—
(1) by striking subparagraph (B) and inserting
the following new subparagraph:
‘‘(B) CLOSED-LOOP BIOMASS FACILITY.—
‘‘(i) IN GENERAL.—In the case of a fa-
cility using closed-loop biomass to produce
electricity, the term ‘qualified facility’
means any facility—
‘‘(I) owned by the taxpayer which
is originally placed in service after De-
cember 31, 1992, and before January
1, 2007, or
‘‘(II) owned by the taxpayer
which is originally placed in service
before January 1, 1993, and modified
to use closed-loop biomass to co-fire
with coal before January 1, 2007, as
approved under the Biomass Power for
Rural Development Programs or under
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a pilot project of the Commodity Cred-
it Corporation as described in 65 Fed.
Reg. 63052.
‘‘(ii) SPECIAL RULES.—In the case of a
qualified 
facility 
described 
in 
clause
(i)(II)—
‘‘(I) the 10-year period referred to
in subsection (a) shall be treated as be-
ginning no earlier than the date of the
enactment of this subclause, and
‘‘(II) if the owner of such facility
is not the producer of the electricity,
the person eligible for the credit allow-
able under subsection (a) is the lessee
or the operator of such facility.’’, and
(2) by adding at the end the following new sub-
paragraph:
‘‘(D) BIOMASS FACILITY.—
‘‘(i) IN GENERAL.—In the case of a fa-
cility using biomass (other than closed-loop
biomass) to produce electricity, the term
‘qualified facility’ means any facility owned
by the taxpayer which is originally placed
in service before January 1, 2005.
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‘‘(ii) 
SPECIAL
RULE
FOR
POSTEFFECTIVE DATE FACILITIES.—In the
case of any facility described in clause (i)
which is placed in service after the date of
the enactment of this clause, the 3-year pe-
riod beginning on the date the facility is
originally placed in service shall be sub-
stituted for the 10-year period in subsection
(a)(2)(A)(ii).
‘‘(iii) 
SPECIAL
RULES
FOR
PREEFFECTIVE
DATE
FACILITIES.—In the
case of any facility described in clause (i)
which is placed in service before the date of
the enactment of this clause—
‘‘(I) subsection (a)(1) shall be ap-
plied by substituting ‘1.0 cents’ for ‘1.5
cents’, and
‘‘(II) the 3-year period beginning
after December 31, 2002, shall be sub-
stituted for the 10-year period in sub-
section (a)(2)(A)(ii).
‘‘(iv) CREDIT
ELIGIBILITY.—In the
case of any facility described in clause (i),
if the owner of such facility is not the pro-
ducer of the electricity, the person eligible
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for the credit allowable under subsection (a)
is the lessee or the operator of such facil-
ity.’’.
(b) DEFINITION OF BIOMASS.—
(1) IN
GENERAL.—Section 45(c)(1) (defining
qualified energy resources) is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (B),
(B) by striking the period at the end of sub-
paragraph (C) and inserting ‘‘, and’’, and
(C) by adding at the end the following new
subparagraph:
‘‘(D) biomass (other than closed-loop bio-
mass).’’.
(2) BIOMASS DEFINED.—Section 45(c) (relating
to definitions) is amended by adding at the end the
following new paragraph:
‘‘(5) BIOMASS.—The term ‘biomass’ means any
solid, nonhazardous, cellulosic waste material which
is segregated from other waste materials and which is
derived from—
‘‘(A) any of the following forest-related re-
sources: mill residues, precommercial thinnings,
slash, and brush, but not including old-growth
timber (other than old-growth timber which has
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been permitted or contracted for removal by any
appropriate Federal authority through the Na-
tional Environmental Policy Act or by any ap-
propriate State authority),
‘‘(B) solid wood waste materials, including
waste pallets, crates, dunnage, manufacturing
and construction wood wastes (other than pres-
sure-treated, chemically-treated, or painted wood
wastes), and landscape or right-of-way tree trim-
mings, but not including municipal solid waste
(garbage), gas derived from the biodegradation of
solid waste, or paper that is commonly recycled,
or
‘‘(C) agriculture sources, including orchard
tree crops, vineyard, grain, legumes, sugar, and
other crop by-products or residues.’’.
(c) COORDINATION WITH SECTION 29.—Section 45(c)
(relating to definitions) is amended by adding at the end
the following new paragraph:
‘‘(6) COORDINATION
WITH
SECTION
29.—The
term ‘qualified facility’ shall not include any facility
the production from which is taken into account in
determining any credit under section 29 for the tax-
able year or any prior taxable year.’’.
(d) CLERICAL AMENDMENTS.—
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(1) The heading for subsection (c) of section 45
is amended by inserting ‘‘AND SPECIAL RULES’’ after
‘‘DEFINITIONS’’.
(2) The heading for subsection (d) of section 45
is amended by inserting ‘‘ADDITIONAL’’ before ‘‘DEFI-
NITIONS’’.
(e) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall
apply to electricity sold after the date of the enact-
ment of this Act.
(2) CERTAIN BIOMASS FACILITIES.—With respect
to any facility described in section 45(c)(3)(D)(i) of
the Internal Revenue Code of 1986, as added by this
section, which is placed in service before the date of
the enactment of this Act, the amendments made by
this section shall apply to electricity sold after Decem-
ber 31, 2002.
SEC. 1903. CREDIT FOR ELECTRICITY PRODUCED FROM
SWINE AND BOVINE WASTE NUTRIENTS, GEO-
THERMAL ENERGY, AND SOLAR ENERGY.
(a) 
EXPANSION
OF
QUALIFIED
ENERGY
RE-
SOURCES.—
(1) IN
GENERAL.—Section 45(c)(1) (defining
qualified energy resources), as amended by this Act,
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is amended by striking ‘‘and’’ at the end of subpara-
graph (C), by striking the period at the end of sub-
paragraph (D) and inserting a comma, and by add-
ing at the end the following new subparagraphs:
‘‘(E) swine and bovine waste nutrients,
‘‘(F) geothermal energy, and
‘‘(G) solar energy.’’.
(2) DEFINITIONS.—Section 45(c) (relating to
definitions and special rules), as amended by this
Act, is amended by redesignating paragraph (6) as
paragraph (8) and by inserting after paragraph (5)
the following new paragraphs:
‘‘(6) SWINE AND BOVINE WASTE NUTRIENTS.—
The term ‘swine and bovine waste nutrients’ means
swine and bovine manure and litter, including bed-
ding material for the disposition of manure.
‘‘(7) GEOTHERMAL
ENERGY.—The term ‘geo-
thermal energy’ means energy derived from a geo-
thermal deposit (within the meaning of section
613(e)(2)).’’.
(b) EXTENSION AND MODIFICATION OF PLACED-
IN-SERVICE RULES.—Section 45(c)(3) (relating to
qualified facility), as amended by this Act, is amend-
ed by adding at the end the following new subpara-
graphs:
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‘‘(E) SWINE AND BOVINE WASTE NUTRIENTS
FACILITY.—In the case of a facility using swine
and bovine waste nutrients to produce electricity,
the term ‘qualified facility’ means any facility
owned by the taxpayer which is originally placed
in service after the date of the enactment of this
subparagraph and before January 1, 2007.
‘‘(F) GEOTHERMAL OR SOLAR ENERGY FA-
CILITY.—
‘‘(i) IN GENERAL.—In the case of a fa-
cility using geothermal or solar energy to
produce electricity, the term ‘qualified facil-
ity’ means any facility owned by the tax-
payer which is originally placed in service
after the date of the enactment of this clause
and before January 1, 2007.
‘‘(ii) SPECIAL RULE.—In the case of
any facility described in clause (i), the 5-
year period beginning on the date the facil-
ity was originally placed in service shall be
substituted for the 10-year period in sub-
section (a)(2)(A)(ii).’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to electricity sold after the date of the
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enactment of this Act, in taxable years ending after such
date.
SEC. 1904. TREATMENT OF PERSONS NOT ABLE TO USE EN-
TIRE CREDIT.
(a) IN GENERAL.—Section 45(d) (relating to addi-
tional definitions and special rules), as amended by this
Act, is amended by adding at the end the following new
paragraph:
‘‘(8) TREATMENT OF PERSONS NOT ABLE TO USE
ENTIRE CREDIT.—
‘‘(A) ALLOWANCE OF CREDIT.—
‘‘(i) IN GENERAL.—Except as otherwise
provided in this subsection—
‘‘(I) any credit allowable under
subsection (a) with respect to a quali-
fied facility owned by a person de-
scribed in clause (ii) may be trans-
ferred or used as provided in this
paragraph, and
‘‘(II) the determination as to
whether the credit is allowable shall be
made without regard to the tax-exempt
status of the person.
‘‘(ii) PERSONS DESCRIBED.—A person
is described in this clause if the person is—