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(2) AVAILABILITY OF DATA.—Data in the joint 
data retrieval system shall be made available to the 
public, consistent with applicable laws and regula-
tions regarding confidentiality and proprietary data. 
(3) RESOURCE MAPPING.—The Secretary of the 
Interior and the Secretary of Agriculture shall estab-
lish a joint GIS mapping system for use in tracking 
surface resource values to aid in resource manage-
ment and processing of surface use plans of oper-
ation and applications for permits to drill.
SEC. 30209. OIL AND GAS LEASE ACREAGE LIMITATIONS. 
Section 27(d)(1) of the Mineral Leasing Act (30 
U.S.C. 184(d)(1)) is amended by inserting after ‘‘acreage 
held in special tar sand areas’’ the following: ‘‘as well as 
acreage under any lease any portion of which has been 
committed to a federally approved unit or cooperative plan 
or communitization agreement, or for which royalty, in-
cluding compensatory royalty or royalty in kind, was paid 
in the preceding calendar year,’’.
SEC. 30210. FEDERAL REIMBURSEMENT FOR ORPHAN WELL 
RECLAMATION. 
(a) DEFINITIONS.—In this section: 
(1) LESSEE.—The term ‘‘lessee’’ means a per-
son who owns a lease, working interest, or operating
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rights in an oil and gas lease on lands owned by the 
United States. 
(2) ORPHAN WELL.—The term ‘‘orphan well’’ 
means any oil or gas well—
(A) that is located on lands owned by the 
United States; 
(B) that requires plugging and abandon-
ment under the regulations of the Department 
of the Interior; and 
(C) for which the Secretary is unable to 
find any person who is legally responsible and 
has the financial resources to reclaim the well. 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Interior or the Secretary’s des-
ignee. 
(b) REIMBURSEMENT FOR RECLAIMING WELLS ON 
LANDS SUBJECT
TO NEW LEASES.—If the Secretary 
issues a new oil and gas lease on federally owned lands 
on which 1 or more orphaned wells are located, the Sec-
retary—
(1) may require, as a condition of the lease, 
that the lessee reclaim pursuant to the Secretary’s 
standards all orphaned wells on the land leased; and 
(2) shall provide to the lessee a credit against 
royalties due under the lease for 100 percent of the
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reasonable actual costs of reclaiming the orphaned 
well pursuant to such requirement. 
(c) ROYALTY CREDITS FOR RECLAIMING ORPHAN 
WELLS ON OTHER LANDS.—The Secretary—
(1) may authorize any lessee under an oil and 
gas lease on federally owned lands to reclaim pursu-
ant to the Secretary’s standards—
(A) an orphan well on unleased federally 
owned lands or unleased lands on the outer 
Continental Shelf; or 
(B) an orphan well located on an existing 
lease on federally owned lands or the outer Con-
tinental Shelf for the reclamation of which the 
lessee is not legally responsible; and 
(2) shall provide to the lessee a credit against 
royalties under the lessee’s lease of 115 percent of 
the reasonable actual costs of reclaiming the orphan 
well. 
(d) REPORTING
AND APPLICATION
OF ROYALTY 
CREDITS.—
(1) IN GENERAL.—Any credit against royalties 
required to be provided to a lessee under this section 
may be reported against royalties on production 
from any oil and gas lease on federally owned lands,
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or on the outer Continental Shelf, administered by 
the Secretary, that are owed by—
(A) a lessee; 
(B) any wholly owned affiliate or wholly 
commonly owned affiliate of a lessee; or 
(C) any wholly owned affiliate or wholly 
commonly owned affiliate of the person con-
ducting the reclamation work on an orphan 
well. 
(2) 
REPORTING
BY
DESIGNEES.—Credits 
against royalties required to be provided to a lessee 
under this section may be reported by a designee (as 
defined in section 3 of the Federal Oil and Gas Roy-
alty Simplification and Fairness Act of 1982 (30 
U.S.C. 1702)), when the designee reports and pays 
royalty on behalf of the lessee. 
(e) IMPLEMENTING REGULATIONS.—The Secretary 
may promulgate such regulations as may be necessary and 
appropriate to implement this section. 
(f) PROTECTION AGAINST LIABILITY.—No person 
who reclaims an orphan well under this section shall be 
liable under any provision of Federal law for any costs 
or damages as a result of action taken or omitted in the 
course of carrying out a reclamation plan approved by the 
Secretary under this section. This section shall not pre-
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clude liability for costs or damages as a result of a gross 
negligence or intentional misconduct by the person car-
rying out an approved reclamation plan. For purposes of 
the preceding sentence, reckless, willful, or wanton mis-
conduct shall constitute gross negligence. 
SEC. 30211. PRESERVATION OF GEOLOGICAL AND GEO-
PHYSICAL DATA. 
(a) SHORT TITLE.—This section may be cited as the 
‘‘National Geological and Geophysical Data Preservation 
Program Act of 2003’’. 
(b) PROGRAM.—The Secretary of the Interior shall 
carry out a National Geological and Geophysical Data 
Preservation Program in accordance with this section—
(1) to archive geologic, geophysical, and engi-
neering data, maps, well logs, and samples; 
(2) to provide a national catalog of such archi-
val material; and 
(3) to provide technical and financial assistance 
related to the archival material. 
(c) PLAN.—Within 1 year after the date of the enact-
ment of this Act, the Secretary shall develop and submit 
to the Committee on Resources of the House of Represent-
atives and the Committee on Energy and Natural Re-
sources of the Senate a plan for the implementation of 
the Program.
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(d) DATA ARCHIVE SYSTEM.— 
(1) ESTABLISHMENT.—The Secretary shall es-
tablish, as a component of the Program, a data ar-
chive system, which shall provide for the storage, 
preservation, and archiving of subsurface, surface, 
geological, geophysical and engineering data and 
samples. The Secretary, in consultation with the Ad-
visory Committee, shall develop guidelines relating to 
the data archive system, including the types of data 
and samples to be preserved. 
(2) SYSTEM COMPONENTS.—The system shall 
be comprised of State agencies and agencies within 
the Department of the Interior that maintain geo-
logical and geophysical data and samples that are 
designated by the Secretary in accordance with this 
subsection. The Program shall provide for the stor-
age of data and samples through data repositories 
operated by such agencies. 
(3) LIMITATION
OF
DESIGNATION.—The Sec-
retary may not designate a State agency as a com-
ponent of the data archive system unless it is the 
agency that acts as the geological survey in the 
State. 
(4) DATA FROM FEDERAL LANDS.—The data 
archive system shall provide for the archiving of rel-
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evant subsurface data and samples obtained from 
Federal lands—
(A) in the most appropriate repository des-
ignated under paragraph (2), with preference 
being given to archiving data in the State in 
which the data was collected; and 
(B) consistent with all applicable law and 
requirements relating to confidentiality and pro-
prietary data. 
(e) NATIONAL CATALOG.—
(1) IN GENERAL.—As soon as practicable after 
the date of the enactment of this section, the Sec-
retary shall develop and maintain, as a component 
of the Program, a national catalog that identifies—
(A) data and samples available in the data 
archive system established under subsection (d); 
(B) the repository for particular material 
in such system; and 
(C) the means of accessing the material. 
(2) AVAILABILITY.—The Secretary shall make 
the national catalog accessible to the public on the 
site of the Survey on the World Wide Web, con-
sistent with all applicable requirements related to 
confidentiality and proprietary data.
(f) ADVISORY COMMITTEE.—
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(1) IN
GENERAL.—The Advisory Committee 
shall advise the Secretary on planning and imple-
mentation of the Program. 
(2) NEW
DUTIES.—In addition to its duties 
under the National Geologic Mapping Act of 1992 
(43 U.S.C. 31b et seq.), the Advisory Committee 
shall perform the following duties: 
(A) Advise the Secretary on developing 
guidelines and procedures for providing assist-
ance for facilities in subsection (g)(1). 
(B) Review and critique the draft imple-
mentation plan prepared by the Secretary pur-
suant to subsection (c). 
(C) Identify useful studies of data archived 
under the Program that will advance under-
standing of the Nation’s energy and mineral re-
sources, geologic hazards, and engineering geol-
ogy. 
(D) Review the progress of the Program in 
archiving significant data and preventing the 
loss of such data, and the scientific progress of 
the studies funded under the Program. 
(E) Include in the annual report to the 
Secretary required under section 5(b)(3) of the 
National Geologic Mapping Act of 1992 (43
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U.S.C. 31d(b)(3)) an evaluation of the progress 
of the Program toward fulfilling the purposes of 
the Program under subsection (b). 
(g) FINANCIAL ASSISTANCE.—
(1) ARCHIVE FACILITIES.—Subject to the avail-
ability of appropriations, the Secretary shall provide 
financial assistance to a State agency that is des-
ignated under subsection (d)(2), for providing facili-
ties to archive energy material. 
(2) STUDIES.—Subject to the availability of ap-
propriations, the Secretary shall provide financial as-
sistance to any State agency designated under sub-
section (d)(2) for studies that enhance under-
standing, interpretation, and use of materials 
archived in the data archive system established 
under subsection (d).
(3) FEDERAL SHARE.—The Federal share of 
the cost of an activity carried out with assistance 
under this subsection shall be no more than 50 per-
cent of the total cost of that activity. 
(4) PRIVATE CONTRIBUTIONS.—The Secretary 
shall apply to the non-Federal share of the cost of 
an activity carried out with assistance under this 
subsection the value of private contributions of prop-
erty and services used for that activity.
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(h) REPORT.—The Secretary shall include in each re-
port under section 8 of the National Geologic Mapping Act 
of 1992 (43 U.S.C. 31g)—
(1) a description of the status of the Program; 
(2) an evaluation of the progress achieved in 
developing the Program during the period covered by 
the report; and 
(3) any recommendations for legislative or other 
action the Secretary considers necessary and appro-
priate to fulfill the purposes of the Program under 
subsection (b). 
(i) DEFINITIONS.—As used in this section: 
(1) ADVISORY COMMITTEE.—The term ‘‘Advi-
sory Committee’’ means the advisory committee es-
tablished under section 5 of the National Geologic 
Mapping Act of 1992 (43 U.S.C. 31d). 
(2) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Interior acting through the Di-
rector of the United States Geological Survey. 
(3) PROGRAM.—The term ‘‘Program’’ means 
the National Energy Data Preservation Program 
carried out under this section. 
(4) SURVEY.—The term ‘‘Survey’’ means the 
United States Geological Survey.
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(j) MAINTENANCE OF STATE EFFORT.—It is the in-
tent of the Congress that the States not use this section 
as an opportunity to reduce State resources applied to the 
activities that are the subject of the Program. 
(k) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized 
to 
be 
appropriated 
to 
the 
Secretary 
$30,000,000 for each of fiscal years 2004 through 2008 
for carrying out this section. 
SEC. 30212. COMPLIANCE WITH EXECUTIVE ORDER 13211; 
ACTIONS CONCERNING REGULATIONS THAT 
SIGNIFICANTLY AFFECT ENERGY SUPPLY, 
DISTRIBUTION, OR USE. 
(a) REQUIREMENT.—The Secretary of the Interior 
shall—
(1) require that before any person takes any ac-
tion that could have a significant adverse effect on 
the supply of domestic energy resources from Fed-
eral public lands, the person shall comply with Exec-
utive Order No. 13211; and 
(2) within 180 days after the date of the enact-
ment of this Act, publish guidance for purposes of 
this section describing what constitutes a significant 
adverse effect on the supply of domestic energy re-
sources under Executive Order No. 13211.
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(b) MOU.—The Secretary of the Interior and the 
Secretary of Agriculture shall include in the memorandum 
of understanding under section 30208 provisions regard-
ing implementation of subsection (a)(1) of this section. 
SEC. 30213. REIMBURSEMENT FOR COSTS OF NEPA ANAL-
YSES, DOCUMENTATION, AND STUDIES. 
(a) IN GENERAL.—The Mineral Leasing Act (30 
U.S.C. 181 et seq.) is amended by inserting after section 
37 the following: 
‘‘REIMBURSEMENT FOR COSTS OF CERTAIN ANALYSES, 
DOCUMENTATION, AND STUDIES 
‘‘SEC. 38. (a) IN GENERAL.—The Secretary of the 
Interior may, through royalty credits, reimburse a person 
who is a lessee, operator, operating rights owner, or appli-
cant for any lease under this Act for reasonable amounts 
paid by the person for preparation by the Secretary (or 
a contractor or other person selected by the Secretary) of 
any project-level analysis, documentation, or related study 
required under the National Environmental Policy Act of 
1969 (42 U.S.C. 4321 et seq.) with respect to the lease. 
‘‘(b) CONDITIONS.—The Secretary may provide reim-
bursement under subsection (b) only if—
‘‘(1) adequate funding to enable the Secretary 
to timely prepare the analysis, documentation, or re-
lated study is not appropriated; 
‘‘(2) the person paid the costs voluntarily; and
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‘‘(3) the person maintains records of its costs 
in accordance with regulations prescribed by the 
Secretary.’’. 
(b) APPLICATION.—The amendment made by this 
section shall apply with respect to any lease entered into 
before, on, or after the date of the enactment of this Act. 
(c) DEADLINE FOR REGULATIONS.—The Secretary of 
the Interior shall issue regulations implementing the 
amendment made by this section by not later than 90 days 
after the date of the enactment of this Act.
SEC. 30214. ALTERNATE ENERGY-RELATED USES ON THE 
OUTER CONTINENTAL SHELF. 
(a) PURPOSES.—The purposes of this section are as 
follows: 
(1) To protect the economic and land use inter-
ests of the Federal Government in the management 
of the Outer Continental Shelf for energy-related 
and certain other purposes. 
(2) To provide an administrative framework for 
the oversight and management of energy-related ac-
tivities on the Outer Continental Shelf, consistent 
with other applicable laws. 
(3) To expedite projects to increase the produc-
tion, transmission, or conservation of energy on the 
Outer Continental Shelf.
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(4) To provide for interagency coordination in 
the siting and permitting of energy-related activities 
on the Outer Continental Shelf. 
(5) To ensure that energy-related activities on 
the Outer Continental Shelf are conducted in a man-
ner that provides for safety, protection of the envi-
ronment, prevention of waste, conservation of nat-
ural resources, protection of correlative rights, and 
protection of national security interests. 
(6) To authorize alternate uses of existing 
structures and facilities previously permitted under 
the Outer Continental Shelf Lands Act (43 U.S.C. 
1331 note). 
(7) To ensure that the Federal Government re-
ceives a fair return for any easement or right-of-way 
granted under section 8(p) of the Outer Continental 
Shelf Lands Act. 
(b) AMENDMENT TO OUTER CONTINENTAL SHELF 
LANDS ACT.—Section 8 of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1337) is amended by adding at the 
end the following new subsection: 
‘‘(p) EASEMENTS OR RIGHTS-OF-WAY FOR ENERGY 
AND RELATED PURPOSES.—
‘‘(1) The Secretary, in consultation with the 
Secretary of the Department in which the Coast
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Guard is operating and other relevant departments 
and agencies of the Federal Government, may grant 
an easement or right-of-way on the Outer Conti-
nental Shelf for activities not otherwise authorized 
in this Act, the Deepwater Port Act of 1974 (33 
U.S.C. 1501 et seq.), or the Ocean Thermal Energy 
Conversion Act of 1980 (42 U.S.C. 9101 et seq.), or 
other applicable law when such activities—
‘‘(A) support exploration, development, 
production, transportation, or storage of oil, 
natural gas, or other minerals; 
‘‘(B) produce or support production, trans-
portation, or transmission of energy from 
sources other than oil and gas; or 
‘‘(C) use facilities currently or previously 
used for activities authorized under this Act. 
‘‘(2)(A) The Secretary shall establish reason-
able forms of annual or one-time payments for any 
easement or right-of-way granted under this sub-
section. Such payments shall not be assessed on the 
basis of throughput or production. The Secretary 
may establish fees, rentals, bonus, or other payments 
by rule or by agreement with the party to whom the 
easement or right-of-way is granted.
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‘‘(B) Before exercising the authority granted 
under this subsection, the Secretary shall consult 
with the Secretary of Defense and other appropriate 
agencies concerning issues related to national secu-
rity and navigational obstruction. 
‘‘(C) The Secretary is authorized to issue an 
easement or right-of-way for energy and related pur-
poses as described in paragraph (1) on a competitive 
or noncompetitive basis. In determining whether 
such easement or right-of-way shall be granted com-
petitively or noncompetitively, the Secretary shall 
consider such factors as prevention of waste and 
conservation of natural resources, economic viability 
of an energy project, protection of the environment, 
national interest, national security, human safety, 
protection of correlative rights, and potential return 
for the easement or right-of-way. 
‘‘(3) The Secretary, in consultation with the 
Secretary of the Department in which the Coast 
Guard is operating and other relevant departments 
and agencies of the Federal Government and af-
fected States, shall prescribe any necessary regula-
tions to assure safety, protection of the environment, 
prevention of waste, and conservation of the natural 
resources of the Outer Continental Shelf, protection
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of national security interests, and protection of cor-
relative rights therein. 
‘‘(4) The Secretary shall require the holder of 
an easement or right-of-way granted under this sub-
section to furnish a surety bond or other form of se-
curity, as prescribed by the Secretary, and to comply 
with such other requirements as the Secretary may 
deem necessary to protect the interests of the United 
States. 
‘‘(5) Nothing in this subsection shall be con-
strued to displace, supersede, limit, or modify the ju-
risdiction, responsibility, or authority of any Federal 
or State agency under any other Federal law. 
‘‘(6) This subsection shall not apply to any area 
on the Outer Continental Shelf designated as a Na-
tional Marine Sanctuary.’’. 
(c) CONFORMING AMENDMENT.—The text of the 
heading for section 8 of the Outer Continental Shelf 
Lands Act is amended to read as follows: ‘‘LEASES, EASE-
MENTS, AND RIGHTS-OF-WAY ON THE OUTER CONTI-
NENTAL SHELF.’’.
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SEC. 30215. DEADLINE FOR DECISION ON APPEALS OF CON-
SISTENCY 
DETERMINATIONS 
UNDER 
THE 
COASTAL ZONE MANAGEMENT ACT OF 1972. 
(a) IN GENERAL.—Section 319 of the Coastal Zone 
Management Act of 1972 (16 U.S.C. 1465) is amended 
to read as follows: 
‘‘APPEALS TO THE SECRETARY 
‘‘SEC. 319. (a) NOTICE.—The Secretary shall publish 
an initial notice in the Federal Register within 30 days 
after the date of the filing of any appeal to the Secretary 
of a consistency determination under section 307. 
‘‘(b) CLOSURE OF RECORD.—(1) No later than the 
end of 360-day period beginning on the date of publication 
of an initial notice under subsection (a), the Secretary 
shall receive no more filings on the appeal and the record 
of decision regarding the appeal shall be closed. 
‘‘(2) Upon the closure of the record of decision, the 
Secretary shall immediately publish a notice that the 
record of decision has been closed. 
‘‘(3) The Secretary may extend the period specified 
in paragraph (1) with respect to an appeal—
‘‘(A) in accordance with the mutual agreement 
of the parties to the appeal; or 
‘‘(B) as needed to complete the development of 
any environmental analyses required under the Na-
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tional Environmental Policy Act of 1969 (42 U.S.C. 
4331 et seq.). 
‘‘(c) DEADLINE FOR DECISION.—The Secretary shall 
issue a decision in any appeal filed under section 307 no 
later than 90 days after the publication of a notice under 
subsection (b)(2). 
‘‘(d) APPLICATION.— This section applies to appeals 
initiated by the Secretary and appeals filed by an appli-
cant.’’. 
(b) APPLICATION.—The amendment made by sub-
section (a)—
(1) shall apply with respect to any appeal initi-
ated or filed on or after the date of the enactment 
of this Act; and 
(2) shall not affect any appeal initiated or filed 
before the date of the enactment of this Act.
SEC. 30216. TASK FORCE ON ENERGY PROJECT STREAM-
LINING. 
(a) FINDINGS.—The Congress finds that—
(1) increased production and transmission of 
energy in a safe and environmentally sound manner 
is essential to the well-being of the American people; 
(2) on May 18, 2001, President George W. 
Bush signed Executive Order No. 13212 requiring 
agencies to expedite their review of permits of other
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actions as necessary to accelerate the completion of 
energy-related projects, while maintaining safety, 
public health, and environmental protections; and 
(3) Executive Order No. 13212 established an 
interagency task force chaired by the Chairman of 
the Council on Environmental Quality to monitor 
and assist agencies in their efforts to expedite review 
of actions consistent with the Executive order, and 
to monitor and assist agencies in setting up appro-
priate mechanisms to coordinate Federal, State, 
tribal, and local permitting in geographic areas 
where increased permitting activity is expected. 
(b) SENSE OF CONGRESS.—It is the sense of the 
Congress that the Task Force established pursuant to Ex-
ecutive Order No. 13212 should remain in existence until 
such time as the President finds that the needs for which 
it was established have been met. 
SEC. 30217. PILOT PROGRAM ON NORTHERN ROCKY MOUN-
TAINS ENERGY RESOURCE MANAGEMENT. 
(a) FINDINGS.—The Congress finds that the task 
force established by President George W. Bush by the 
issuance of Executive Order No. 13212, and headed by 
the Chairman of the Council on Environmental Quality, 
has developed a pilot project the goals of which are—
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(1) to reduce conflict, uncertainty, and the time 
involved in making decisions on energy resource 
management in the Northern Rocky Mountains; 
(2) to establish a mechanism to provide for the 
coordination of Federal and State policy guidance 
regarding the development of regional energy re-
sources and their transmission to markets; 
(3) to institutionalize early collaboration and 
participation of all parties involved in regional deci-
sions on environmental, economic and energy issues 
related to the exploration, development, and produc-
tion of energy resources; and 
(4) to take a long-term and regional view on 
how best to manage the energy resources in the 
Northern Rocky Mountains. 
(b) SENSE OF THE CONGRESS.—It is the sense of 
the Congress that the task force should carry out this pilot 
project and report to the Congress no later than 36 
months after the date of enactment of this Act on the 
progress it has made in accomplishing the goals set forth 
in subsection (a) of this section. 
SEC. 30218. ENERGY DEVELOPMENT FACILITATOR STUDY. 
(a) IN GENERAL.—The Chairman of the Council on 
Environmental Quality shall conduct a study to determine 
the feasibility of establishing under the Council the posi-
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tion of Facilitator for Energy Development, to coordinate 
Federal agency actions relating to energy project permit-
ting. The study shall consider, among other matters—
(1) the ways in which a facilitator can facilitate 
the long-term coordination of energy projects on 
Federal lands; and 
(2) the role of a facilitator in ensuring that the 
questions or concerns of permit applicants and other 
persons involved in energy projects are addressed in 
the agency. 
(b) REPORT.—Not later than 12 months after the 
date of enactment of this section, the Chairman shall sub-
mit a report to the Committee on Resources of the House 
of Representatives and the Committee on Energy and 
Natural Resources of the Senate detailing the findings of 
the study required by subsection (a), and including any 
legislative recommendations of the Chairman with respect 
to the establishment of the position studied.
SEC. 30219. COMBINED HYDROCARBON LEASING. 
(a) SPECIAL PROVISIONS REGARDING LEASING.—
Section 17(b)(2) of the Mineral Leasing Act (30 U.S.C. 
226(b)(2)) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(2)’’; and 
(2) by adding at the end the following:
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‘‘(B) For any area that contains any combination of 
tar sand and oil or gas (or both), the Secretary may issue 
under this Act, separately—
‘‘(i) a lease for exploration for and extraction of 
tar sand; and 
‘‘(ii) a lease for exploration for and development 
of oil and gas. 
‘‘(C) A lease issued for tar sand shall be issued using 
the same bidding process, annual rental, and posting pe-
riod as a lease issued for oil and gas, except that the min-
imum acceptable bid required for a lease issued for tar 
sand shall be $2 per acre. 
‘‘(D) The Secretary may waive, suspend, or alter any 
requirement under section 26 that a permittee under a 
permit authorizing prospecting for tar sand must exercise 
due diligence, to promote any resource covered by a com-
bined hydrocarbon lease.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
17(b)(1)(B) of the Mineral Leasing Act (30 U.S.C. 
226(b)(1)(B)) is amended in the second sentence by in-
serting ‘‘, subject to paragraph (2)(B),’’ after ‘‘The Sec-
retary’’.
(c) REGULATIONS.—Within 45 days after the date of 
the enactment of this Act, the Secretary of the Interior 
shall issue final regulations to implement this section.
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SEC. 30220. 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 1980 (Public Law 101–380), a les-
see may withhold from payment any royalty due and 
owing to the United States under any lease under 
the Outer Continental Shelf Lands Act (43 U.S.C. 
1301 et seq.) for offshore oil or gas production from 
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 State of 
44 cents for every $1 of royalty withheld. 
(2) TREATMENT
OF
WITHHELD
AMOUNTS.—
Any royalty withheld by a lessee in accordance with 
this section shall be treated as paid for purposes of 
satisfaction of the royalty obligations of the lessee to 
the United States. 
(3) 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
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(B) promptly publish a certification when 
the total amount of royalty withheld by the les-
see under this section is equal to the lessee’s 
share of the total drainage claim for the West 
Delta field (with interest) as described at page 
47 of Senate Report number 101–534. 
(b) PERIOD OF ROYALTY RELIEF.—Subsection (a) 
shall apply to royalty amounts that are due and payable 
in the period beginning on January 1, 2003, and ending 
on the date on which the Secretary publishes a certifi-
cation under subsection (a)(3)(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)—
(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’’ means a per-
son (including a successor or assign of a person) 
that, on the date of the enactment of the Oil Pollu-
tion Act of 1980, was a lessee referred to in section 
6004(c) of that Act (as in effect on that date of the
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enactment), but did not hold lease rights in Federal 
offshore lease OCS–G–5669.
TITLE III—BIOMASS ENERGY 
SEC. 30301. GRANTS TO IMPROVE THE COMMERCIAL VALUE 
OF FOREST BIOMASS FOR ELECTRIC ENERGY, 
USEFUL HEAT, TRANSPORTATION FUELS, PE-
TROLEUM-BASED 
PRODUCT 
SUBSTITUTES, 
AND OTHER COMMERCIAL PURPOSES. 
(a) FINDINGS.—Congress finds the following: 
(1) Thousands of communities in the United 
States, many located near Federal lands, are at risk 
to wildfire. Approximately 190,000,000 acres of land 
managed by the Secretary of Agriculture and the 
Secretary of the Interior are at risk of catastrophic 
fire in the near future. The accumulation of heavy 
forest fuel loads continues to increase as a result of 
disease, insect infestations, and drought, further 
raising the risk of fire each year. 
(2) In addition, more than 70,000,000 acres 
across all land ownerships are at risk to higher than 
normal mortality over the next 15 years from insect 
infestation and disease. High levels of tree mortality 
from insects and disease result in increased fire risk, 
loss of old growth, degraded watershed conditions, 
and changes in species diversity and productivity, as
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well as diminished fish and wildlife habitat and de-
creased timber values. 
(3) Preventive treatments such as removing fuel 
loading, ladder fuels, and hazard trees, planting 
proper species mix and restoring and protecting 
early successional habitat, and other specific restora-
tion treatments designed to reduce the susceptibility 
of forest land, woodland, and rangeland to insect 
outbreaks, disease, and catastrophic fire present the 
greatest opportunity for long-term forest health by 
creating a mosaic of species-mix and age distribu-
tion. Such prevention treatments are widely acknowl-
edged to be more successful and cost effective than 
suppression treatments in the case of insects, dis-
ease, and fire. 
(4) The by-products of preventive treatment 
(wood, brush, thinnings, chips, slash, and other haz-
ardous fuels) removed from forest lands, woodlands 
and rangelands represent an abundant supply of bio-
mass for biomass-to-energy facilities and raw mate-
rial for business. There are currently few markets 
for the extraordinary volumes of by-products being 
generated as a result of the necessary large-scale 
preventive treatment activities. 
(5) The United States should—
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(A) promote economic and entrepreneurial 
opportunities in using by-products removed 
through preventive treatment activities related 
to hazardous fuels reduction, disease, and insect 
infestation; and 
(B) develop and expand markets for tradi-
tionally underused wood and biomass as an out-
let for by-products of preventive treatment ac-
tivities. 
(b) DEFINITIONS.—In this section: 
(1) BIOMASS.—The term ‘‘biomass’’ means 
trees and woody plants, including limbs, tops, nee-
dles, and other woody parts, and by-products of pre-
ventive treatment, such as wood, brush, thinnings, 
chips, and slash, that are removed—
(A) to reduce hazardous fuels; or 
(B) to reduce the risk of or to contain dis-
ease or insect infestation. 
(2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 
has the meaning given the term in section 4(e) of 
the Indian Self-Determination and Education Assist-
ance Act (25 U.S.C. 450b(e)). 
(3) PERSON.—The term ‘‘person’’ includes—
(A) an individual;
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(B) a community (as determined by the 
Secretary concerned); 
(C) an Indian tribe; 
(D) a small business, micro-business, or a 
corporation that is incorporated in the United 
States; and 
(E) a nonprofit organization. 
(4) PREFERRED COMMUNITY.—The term ‘‘pre-
ferred community’’ means—
(A) any town, township, municipality, or 
other similar unit of local government (as deter-
mined by the Secretary concerned) that—
(i) has a population of not more than 
50,000 individuals; and 
(ii) the Secretary concerned, in the 
sole discretion of the Secretary concerned, 
determines contains or is located near 
land, the condition of which is at signifi-
cant risk of catastrophic wildfire, disease, 
or insect infestation or which suffers from 
disease or insect infestation; or 
(B) any county that—
(i) is not contained within a metro-
politan statistical area; and
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(ii) the Secretary concerned, in the 
sole discretion of the Secretary concerned, 
determines contains or is located near 
land, the condition of which is at signifi-
cant risk of catastrophic wildfire, disease, 
or insect infestation or which suffers from 
disease or insect infestation. 
(5) SECRETARY CONCERNED.—The term ‘‘Sec-
retary concerned’’ means—
(A) the Secretary of Agriculture with re-
spect to National Forest System lands; and 
(B) the Secretary of the Interior with re-
spect to Federal lands under the jurisdiction of 
the Secretary of the Interior and Indian lands. 
(c) BIOMASS COMMERCIAL USE GRANT PROGRAM.—
(1) IN
GENERAL.—The Secretary concerned 
may make grants to any person that owns or oper-
ates a facility that uses biomass as a raw material 
to produce electric energy, sensible heat, transpor-
tation fuels, or substitutes for petroleum-based prod-
ucts to offset the costs incurred to purchase biomass 
for use by such facility. 
(2) GRANT AMOUNTS.—A grant under this sub-
section may not exceed $20 per green ton of biomass 
delivered.
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(3) MONITORING OF GRANT RECIPIENT ACTIVI-
TIES.—As a condition of a grant under this sub-
section, the grant recipient shall keep such records 
as the Secretary concerned may require to fully and 
correctly disclose the use of the grant funds and all 
transactions involved in the purchase of biomass. 
Upon notice by a representative of the Secretary 
concerned, the grant recipient shall afford the rep-
resentative reasonable access to the facility that pur-
chases or uses biomass and an opportunity to exam-
ine the inventory and records of the facility. 
(d) IMPROVED BIOMASS USE GRANT PROGRAM.—
(1) IN
GENERAL.—The Secretary concerned 
may make grants to persons to offset the cost of 
projects to develop or research opportunities to im-
prove the use of, or add value to, biomass. In mak-
ing such grants, the Secretary concerned shall give 
preference to persons in preferred communities. 
(2) SELECTION.—The Secretary concerned shall 
select a grant recipient under paragraph (1) after 
giving consideration to the anticipated public bene-
fits of the project, including the potential to develop 
thermal or electric energy resources or affordable en-
ergy, opportunities for the creation or expansion of
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small businesses and micro-businesses, and the po-
tential for new job creation. 
(3) GRANT AMOUNT.—A grant under this sub-
section may not exceed $100,000. 
(e) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated $50,000,000 for each of the 
fiscal years 2004 through 2014 to carry out this section. 
(f) REPORT.—Not later than October 1, 2010, the 
Secretary of Agriculture, in consultation with the Sec-
retary of the Interior, shall submit to the Committee on 
Energy and Natural Resources and the Committee on Ag-
riculture, Nutrition, and Forestry of the Senate and the 
Committee on Resources and the Committee on Agri-
culture of the House of Representatives a report describ-
ing the results of the grant programs authorized by this 
section. The report shall include the following: 
(1) An identification of the size, type, and the 
use of biomass by persons that receive grants under 
this section. 
(2) The distance between the land from which 
the biomass was removed and the facility that used 
the biomass. 
(3) The economic impacts, particularly new job 
creation, resulting from the grants to and operation 
of the eligible operations.
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TITLE IV—ARCTIC COASTAL 
PLAIN DOMESTIC ENERGY 
SEC. 30401. SHORT TITLE. 
This title may be cited as the ‘‘Arctic Coastal Plain 
Domestic Energy Security Act of 2003’’. 
SEC. 30402. DEFINITIONS. 
In this title: 
(1) COASTAL
PLAIN.—The term ‘‘Coastal 
Plain’’ means that area identified as such in the 
map entitled ‘‘Arctic National Wildlife Refuge’’, 
dated August 1980, as referenced in section 1002(b) 
of the Alaska National Interest Lands Conservation 
Act of 1980 (16 U.S.C. 3142(b)(1)), comprising ap-
proximately 1,549,000 acres, and as described in ap-
pendix I to part 37 of title 50, Code of Federal Reg-
ulations. 
(2) SECRETARY.—The term ‘‘Secretary’’, except 
as otherwise provided, means the Secretary of the 
Interior or the Secretary’s designee. 
SEC. 30403. LEASING PROGRAM FOR LANDS WITHIN THE 
COASTAL PLAIN. 
(a) IN GENERAL.—The Secretary shall take such ac-
tions as are necessary—
(1) to establish and implement in accordance 
with this Act a competitive oil and gas leasing pro-
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gram under the Mineral Leasing Act (30 U.S.C. 181 
et seq.) that will result in an environmentally sound 
program for the exploration, development, and pro-
duction of the oil and gas resources of the Coastal 
Plain; and 
(2) to administer the provisions of this title 
through regulations, lease terms, conditions, restric-
tions, prohibitions, stipulations, and other provisions 
that ensure the oil and gas exploration, development, 
and production activities on the Coastal Plain will 
result in no significant adverse effect on fish and 
wildlife, their habitat, subsistence resources, and the 
environment, and including, in furtherance of this 
goal, by requiring the application of the best com-
mercially available technology for oil and gas explo-
ration, development, and production to all explo-
ration, development, and production operations 
under this title in a manner that ensures the receipt 
of fair market value by the public for the mineral re-
sources to be leased. 
(b) REPEAL.—Section 1003 of the Alaska National 
Interest Lands Conservation Act of 1980 (16 U.S.C. 
3143) is repealed. 
(c) COMPLIANCE WITH REQUIREMENTS UNDER CER-
TAIN OTHER LAWS.—
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(1) COMPATIBILITY.—For purposes of the Na-
tional Wildlife Refuge System Administration Act of 
1966, the oil and gas leasing program and activities 
authorized by this section in the Coastal Plain are 
deemed to be compatible with the purposes for which 
the Arctic National Wildlife Refuge was established, 
and that no further findings or decisions are re-
quired to implement this determination. 
(2) ADEQUACY OF THE DEPARTMENT OF THE 
INTERIOR’S LEGISLATIVE ENVIRONMENTAL IMPACT 
STATEMENT.—The 
‘‘Final 
Legislative 
Environ-
mental Impact Statement’’ (April 1987) on the 
Coastal Plain prepared pursuant to section 1002 of 
the Alaska National Interest Lands Conservation 
Act of 1980 (16 U.S.C. 3142) and section 102(2)(C) 
of the National Environmental Policy Act of 1969 
(42 U.S.C. 4332(2)(C)) is deemed to satisfy the re-
quirements under the National Environmental Policy 
Act of 1969 that apply with respect to actions au-
thorized to be taken by the Secretary to develop and 
promulgate the regulations for the establishment of 
a leasing program authorized by this title before the 
conduct of the first lease sale. 
(3) COMPLIANCE WITH NEPA FOR OTHER AC-
TIONS.—Before conducting the first lease sale under
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this title, the Secretary shall prepare an environ-
mental impact statement under the National Envi-
ronmental Policy Act of 1969 with respect to the ac-
tions authorized by this title that are not referred to 
in paragraph (2). Notwithstanding any other law, 
the Secretary is not required to identify nonleasing 
alternative courses of action or to analyze the envi-
ronmental effects of such courses of action. The Sec-
retary shall only identify a preferred action for such 
leasing and a single leasing alternative, and analyze 
the environmental effects and potential mitigation 
measures for those two alternatives. The identifica-
tion of the preferred action and related analysis for 
the first lease sale under this title shall be completed 
within 18 months after the date of the enactment of 
this Act. The Secretary shall only consider public 
comments that specifically address the Secretary’s 
preferred action and that are filed within 20 days 
after publication of an environmental analysis. Not-
withstanding any other law, compliance with this 
paragraph is deemed to satisfy all requirements for 
the analysis and consideration of the environmental 
effects of proposed leasing under this title.
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(d) RELATIONSHIP TO STATE AND LOCAL AUTHOR-
ITY.—Nothing in this title shall be considered to expand 
or limit State and local regulatory authority. 
(e) SPECIAL AREAS.—
(1) IN
GENERAL.—The Secretary, after con-
sultation with the State of Alaska, the city of 
Kaktovik, and the North Slope Borough, may des-
ignate up to a total of 45,000 acres of the Coastal 
Plain as a Special Area if the Secretary determines 
that the Special Area is of such unique character 
and interest so as to require special management 
and regulatory protection. The Secretary shall des-
ignate as such a Special Area the Sadlerochit Spring 
area, comprising approximately 4,000 acres as de-
picted on the map referred to in section 402(1). 
(2) MANAGEMENT.—Each such Special Area 
shall be managed so as to protect and preserve the 
area’s unique and diverse character including its 
fish, wildlife, and subsistence resource values. 
(3) EXCLUSION
FROM
LEASING
OR
SURFACE 
OCCUPANCY.—The Secretary may exclude any Spe-
cial Area from leasing. If the Secretary leases a Spe-
cial Area, or any part thereof, for purposes of oil 
and gas exploration, development, production, and
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related activities, there shall be no surface occu-
pancy of the lands comprising the Special Area. 
(4) DIRECTIONAL DRILLING.—Notwithstanding 
the other provisions of this subsection, the Secretary 
may lease all or a portion of a Special Area under 
terms that permit the use of horizontal drilling tech-
nology from sites on leases located outside the area. 
(f) LIMITATION
ON
CLOSED
AREAS.—The Sec-
retary’s sole authority to close lands within the Coastal 
Plain to oil and gas leasing and to exploration, develop-
ment, and production is that set forth in this title. 
(g) REGULATIONS.—
(1) IN
GENERAL.—The Secretary shall pre-
scribe such regulations as may be necessary to carry 
out this title, including rules and regulations relating 
to protection of the fish and wildlife, their habitat, 
subsistence resources, and environment of the Coast-
al Plain, by no later than 15 months after the date 
of the enactment of this Act. 
(2) REVISION
OF
REGULATIONS.—The Sec-
retary shall periodically review and, if appropriate, 
revise the rules and regulations issued under sub-
section (a) to reflect any significant biological, envi-
ronmental, or engineering data that come to the Sec-
retary’s attention.
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SEC. 30404. LEASE SALES. 
(a) IN GENERAL.—Lands may be leased pursuant to 
this title to any person qualified to obtain a lease for de-
posits of oil and gas under the Mineral Leasing Act (30 
U.S.C. 181 et seq.). 
(b) PROCEDURES.—The Secretary shall, by regula-
tion, establish procedures for—
(1) receipt and consideration of sealed nomina-
tions for any area in the Coastal Plain for inclusion 
in, or exclusion (as provided in subsection (c)) from, 
a lease sale; 
(2) the holding of lease sales after such nomina-
tion process; and 
(3) public notice of and comment on designa-
tion of areas to be included in, or excluded from, a 
lease sale. 
(c) LEASE SALE BIDS.—Bidding for leases under 
this title shall be by sealed competitive cash bonus bids. 
(d) ACREAGE MINIMUM IN FIRST SALE.—In the first 
lease sale under this title, the Secretary shall offer for 
lease those tracts the Secretary considers to have the 
greatest potential for the discovery of hydrocarbons, tak-
ing into consideration nominations received pursuant to 
subsection (b)(1), but in no case less than 200,000 acres. 
(e) TIMING
OF
LEASE
SALES.—The Secretary 
shall—
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(1) conduct the first lease sale under this title 
within 22 months after the date of the enactment of 
this Act; and 
(2) conduct additional sales so long as sufficient 
interest in development exists to warrant, in the Sec-
retary’s judgment, the conduct of such sales. 
SEC. 30405. GRANT OF LEASES BY THE SECRETARY. 
(a) IN GENERAL.—The Secretary may grant to the 
highest responsible qualified bidder in a lease sale con-
ducted pursuant to section 30404 any lands to be leased 
on the Coastal Plain upon payment by the lessee of such 
bonus as may be accepted by the Secretary. 
(b) SUBSEQUENT
TRANSFERS.—No lease issued 
under this title may be sold, exchanged, assigned, sublet, 
or otherwise transferred except with the approval of the 
Secretary. Prior to any such approval the Secretary shall 
consult with, and give due consideration to the views of, 
the Attorney General. 
SEC. 30406. LEASE TERMS AND CONDITIONS. 
(a) IN GENERAL.—An oil or gas lease issued pursu-
ant to this title shall—
(1) provide for the payment of a royalty of not 
less than 121⁄2 percent in amount or value of the 
production removed or sold from the lease, as deter-
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mined by the Secretary under the regulations appli-
cable to other Federal oil and gas leases; 
(2) provide that the Secretary may close, on a 
seasonal basis, portions of the Coastal Plain to ex-
ploratory drilling activities as necessary to protect 
caribou calving areas and other species of fish and 
wildlife;
(3) require that the lessee of lands within the 
Coastal Plain shall be fully responsible and liable for 
the reclamation of lands within the Coastal Plain 
and any other Federal lands that are adversely af-
fected in connection with exploration, development, 
production, or transportation activities conducted 
under the lease and within the Coastal Plain by the 
lessee or by any of the subcontractors or agents of 
the lessee; 
(4) provide that the lessee may not delegate or 
convey, by contract or otherwise, the reclamation re-
sponsibility and liability to another person without 
the express written approval of the Secretary; 
(5) provide that the standard of reclamation for 
lands required to be reclaimed under this title shall 
be, as nearly as practicable, a condition capable of 
supporting the uses which the lands were capable of 
supporting prior to any exploration, development, or
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production activities, or upon application by the les-
see, to a higher or better use as approved by the 
Secretary; 
(6) contain terms and conditions relating to 
protection of fish and wildlife, their habitat, and the 
environment 
as 
required 
pursuant 
to 
section 
30403(a)(2); 
(7) provide that the lessee, its agents, and its 
contractors use best efforts to provide a fair share, 
as determined by the level of obligation previously 
agreed to in the 1974 agreement implementing sec-
tion 29 of the Federal Agreement and Grant of 
Right of Way for the Operation of the Trans-Alaska 
Pipeline, of employment and contracting for Alaska 
Natives and Alaska Native Corporations from 
throughout the State; 
(8) prohibit the export of oil produced under 
the lease; and 
(9) contain such other provisions as the Sec-
retary determines necessary to ensure compliance 
with the provisions of this title and the regulations 
issued under this title. 
(b) PROJECT LABOR AGREEMENTS.—The Secretary, 
as a term and condition of each lease under this title and 
in recognizing the Government’s proprietary interest in
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labor stability and in the ability of construction labor and 
management to meet the particular needs and conditions 
of projects to be developed under the leases issued pursu-
ant to this title and the special concerns of the parties 
to such leases, shall require that the lessee and its agents 
and contractors negotiate to obtain a project labor agree-
ment for the employment of laborers and mechanics on 
production, maintenance, and construction under the 
lease. 
SEC. 30407. COASTAL PLAIN ENVIRONMENTAL PROTEC-
TION. 
(a) NO SIGNIFICANT ADVERSE EFFECT STANDARD 
TO GOVERN AUTHORIZED COASTAL PLAIN ACTIVITIES.—
The Secretary shall, consistent with the requirements of 
section 30403, administer the provisions of this title 
through regulations, lease terms, conditions, restrictions, 
prohibitions, stipulations, and other provisions that—
(1) ensure the oil and gas exploration, develop-
ment, and production activities on the Coastal Plain 
will result in no significant adverse effect on fish 
and wildlife, their habitat, and the environment; 
(2) require the application of the best commer-
cially available technology for oil and gas explo-
ration, development, and production on all new ex-
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ploration, development, and production operations; 
and 
(3) ensure that the maximum amount of sur-
face acreage covered by production and support fa-
cilities, including airstrips and any areas covered by 
gravel berms or piers for support of pipelines, does 
not exceed 2,000 acres on the Coastal Plain. 
(b) SITE-SPECIFIC ASSESSMENT AND MITIGATION.—
The Secretary shall also require, with respect to any pro-
posed drilling and related activities, that—
(1) a site-specific analysis be made of the prob-
able effects, if any, that the drilling or related activi-
ties will have on fish and wildlife, their habitat, and 
the environment; 
(2) a plan be implemented to avoid, minimize, 
and mitigate (in that order and to the extent prac-
ticable) any significant adverse effect identified 
under paragraph (1); and 
(3) the development of the plan shall occur 
after consultation with the agency or agencies hav-
ing jurisdiction over matters mitigated by the plan. 
(c) REGULATIONS TO PROTECT COASTAL PLAIN 
FISH AND WILDLIFE RESOURCES, SUBSISTENCE USERS, 
AND THE ENVIRONMENT.—Before implementing the leas-
ing program authorized by this title, the Secretary shall
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prepare and promulgate regulations, lease terms, condi-
tions, restrictions, prohibitions, stipulations, and other 
measures designed to ensure that the activities undertaken 
on the Coastal Plain under this title are conducted in a 
manner consistent with the purposes and environmental 
requirements of this title. 
(d) COMPLIANCE WITH FEDERAL AND STATE ENVI-
RONMENTAL LAWS AND OTHER REQUIREMENTS.—The 
proposed regulations, lease terms, conditions, restrictions, 
prohibitions, and stipulations for the leasing program 
under this title shall require compliance with all applicable 
provisions of Federal and State environmental law and 
shall also require the following: 
(1) Standards at least as effective as the safety 
and environmental mitigation measures set forth in 
items 1 through 29 at pages 167 through 169 of the 
‘‘Final Legislative Environmental Impact State-
ment’’ (April 1987) on the Coastal Plain. 
(2) Seasonal limitations on exploration, develop-
ment, and related activities, where necessary, to 
avoid significant adverse effects during periods of 
concentrated fish and wildlife breeding, denning, 
nesting, spawning, and migration. 
(3) That exploration activities, except for sur-
face geological studies, be limited to the period be-
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tween approximately November 1 and May 1 each 
year and that exploration activities shall be sup-
ported by ice roads, winter trails with adequate snow 
cover, ice pads, ice airstrips, and air transport meth-
ods, except that such exploration activities may 
occur at other times, if the Secretary finds that such 
exploration will have no significant adverse effect on 
the fish and wildlife, their habitat, and the environ-
ment of the Coastal Plain. 
(4) Design safety and construction standards 
for all pipelines and any access and service roads, 
that—
(A) minimize, to the maximum extent pos-
sible, adverse effects upon the passage of mi-
gratory species such as caribou; and 
(B) minimize adverse effects upon the flow 
of surface water by requiring the use of cul-
verts, bridges, and other structural devices. 
(5) Prohibitions on public access and use on all 
pipeline access and service roads. 
(6) Stringent reclamation and rehabilitation re-
quirements, consistent with the standards set forth 
in this title, requiring the removal from the Coastal 
Plain of all oil and gas development and production 
facilities, structures, and equipment upon completion
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of oil and gas production operations, except that the 
Secretary may exempt from the requirements of this 
paragraph those facilities, structures, or equipment 
that the Secretary determines would assist in the 
management of the Arctic National Wildlife Refuge 
and that are donated to the United States for that 
purpose. 
(7) Appropriate prohibitions or restrictions on 
access by all modes of transportation. 
(8) Appropriate prohibitions or restrictions on 
sand and gravel extraction. 
(9) Consolidation of facility siting. 
(10) Appropriate prohibitions or restrictions on 
use of explosives. 
(11) Avoidance, to the extent practicable, of 
springs, streams, and river system; the protection of 
natural surface drainage patterns, wetlands, and ri-
parian habitats; and the regulation of methods or 
techniques for developing or transporting adequate 
supplies of water for exploratory drilling. 
(12) Avoidance or reduction of air traffic-re-
lated disturbance to fish and wildlife. 
(13) Treatment and disposal of hazardous and 
toxic wastes, solid wastes, reserve pit fluids, drilling 
muds and cuttings, and domestic wastewater, includ-
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ing an annual waste management report, a haz-
ardous materials tracking system, and a prohibition 
on chlorinated solvents, in accordance with applica-
ble Federal and State environmental law. 
(14) Fuel storage and oil spill contingency plan-
ning. 
(15) Research, monitoring, and reporting re-
quirements. 
(16) Field crew environmental briefings. 
(17) Avoidance of significant adverse effects 
upon subsistence hunting, fishing, and trapping by 
subsistence users. 
(18) Compliance with applicable air and water 
quality standards. 
(19) Appropriate seasonal and safety zone des-
ignations around well sites, within which subsistence 
hunting and trapping shall be limited. 
(20) Reasonable stipulations for protection of 
cultural and archeological resources. 
(21) All other protective environmental stipula-
tions, restrictions, terms, and conditions deemed 
necessary by the Secretary. 
(e) CONSIDERATIONS.—In preparing and promul-
gating regulations, lease terms, conditions, restrictions,
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prohibitions, and stipulations under this section, the Sec-
retary shall consider the following: 
(1) The stipulations and conditions that govern 
the National Petroleum Reserve-Alaska leasing pro-
gram, as set forth in the 1999 Northeast National 
Petroleum Reserve-Alaska Final Integrated Activity 
Plan/Environmental Impact Statement. 
(2) The environmental protection standards 
that governed the initial Coastal Plain seismic explo-
ration program under parts 37.31 to 37.33 of title 
50, Code of Federal Regulations. 
(3) The land use stipulations for exploratory 
drilling on the KIC–ASRC private lands that are set 
forth in Appendix 2 of the August 9, 1983, agree-
ment between Arctic Slope Regional Corporation and 
the United States. 
(f) FACILITY CONSOLIDATION PLANNING.—
(1) IN GENERAL.—The Secretary shall, after 
providing for public notice and comment, prepare 
and update periodically a plan to govern, guide, and 
direct the siting and construction of facilities for the 
exploration, development, production, and transpor-
tation of Coastal Plain oil and gas resources. 
(2) OBJECTIVES.—The plan shall have the fol-
lowing objectives:
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(A) Avoiding unnecessary duplication of fa-
cilities and activities. 
(B) Encouraging consolidation of common 
facilities and activities. 
(C) Locating or confining facilities and ac-
tivities to areas that will minimize impact on 
fish and wildlife, their habitat, and the environ-
ment. 
(D) Utilizing existing facilities wherever 
practicable. 
(E) Enhancing compatibility between wild-
life values and development activities. 
(g) ACCESS
TO PUBLIC LANDS.—The Secretary 
shall—
(1) manage public lands in the Coastal Plain 
subject to section subsections (a) and (b) of section 
811 of the Alaska National Interest Lands Con-
servation Act (16 U.S.C. 3121); and 
(2) ensure that local residents shall have rea-
sonable access to public lands in the Coastal Plain 
for traditional uses. 
SEC. 30408. EXPEDITED JUDICIAL REVIEW. 
(a) FILING OF COMPLAINT.—
(1) DEADLINE.—Subject to paragraph (2), any 
complaint seeking judicial review of any provision of
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this title or any action of the Secretary under this 
title shall be filed in any appropriate district court 
of the United States—
(A) except as provided in subparagraph 
(B), within the 90-day period beginning on the 
date of the action being challenged; or 
(B) in the case of a complaint based solely 
on grounds arising after such period, within 90 
days after the complainant knew or reasonably 
should have known of the grounds for the com-
plaint. 
(2) VENUE.—Any complaint seeking judicial re-
view of an action of the Secretary under this title 
may be filed only in the United States Court of Ap-
peals for the District of Columbia.
(3) LIMITATION
ON
SCOPE
OF
CERTAIN
RE-
VIEW.—Judicial review of a Secretarial decision to 
conduct a lease sale under this title, including the 
environmental analysis thereof, shall be limited to 
whether the Secretary has complied with the terms 
of this title and shall be based upon the administra-
tive record of that decision. The Secretary’s identi-
fication of a preferred course of action to enable 
leasing to proceed and the Secretary’s analysis of 
environmental effects under this title shall be pre-
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sumed to be correct unless shown otherwise by clear 
and convincing evidence to the contrary. 
(b) LIMITATION ON OTHER REVIEW.—Actions of the 
Secretary with respect to which review could have been 
obtained under this section shall not be subject to judicial 
review in any civil or criminal proceeding for enforcement. 
SEC. 30409. FEDERAL AND STATE DISTRIBUTION OF REVE-
NUES. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, of the amount of adjusted bonus, rental, and 
royalty revenues from oil and gas leasing and operations 
authorized under this title—
(1) 50 percent shall be paid to the State of 
Alaska; and 
(2) except as provided in section 30412(d) the 
balance shall be deposited into the Treasury as mis-
cellaneous receipts. 
(b) PAYMENTS TO ALASKA.—Payments to the State 
of Alaska under this section shall be made semiannually. 
(c) USE OF BONUS PAYMENTS FOR LOW-INCOME 
HOME ENERGY ASSISTANCE.—Amounts that are received 
by the United States as bonuses for leases under this title 
and deposited into the Treasury under subsection (a)(2) 
may be appropriated to the Secretary of the Health and 
Human Services, in addition to amounts otherwise avail-
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able, to provide assistance under the Low-Income Home 
Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.). 
SEC. 30410. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN. 
(a) EXEMPTION.—Title XI of the Alaska National In-
terest Lands Conservation Act of 1980 (16 U.S.C. 3161 
et seq.) shall not apply to the issuance by the Secretary 
under section 28 of the Mineral Leasing Act (30 U.S.C. 
185) of rights-of-way and easements across the Coastal 
Plain for the transportation of oil and gas. 
(b) TERMS AND CONDITIONS.—The Secretary shall 
include in any right-of-way or easement referred to in sub-
section (a) such terms and conditions as may be necessary 
to ensure that transportation of oil and gas does not result 
in a significant adverse effect on the fish and wildlife, sub-
sistence resources, their habitat, and the environment of 
the Coastal Plain, including requirements that facilities be 
sited or designed so as to avoid unnecessary duplication 
of roads and pipelines. 
(c) REGULATIONS.—The Secretary shall include in 
regulations under section 30403(g) provisions granting 
rights-of-way and easements described in subsection (a) 
of this section. 
SEC. 30411. CONVEYANCE. 
In order to maximize Federal revenues by removing 
clouds on title to lands and clarifying land ownership pat-
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terns within the Coastal Plain, the Secretary, notwith-
standing the provisions of section 1302(h)(2) of the Alas-
ka National Interest Lands Conservation Act (16 U.S.C. 
3192(h)(2)), shall convey—
(1) to the Kaktovik Inupiat Corporation the 
surface estate of the lands described in paragraph 1 
of Public Land Order 6959, to the extent necessary 
to fulfill the Corporation’s entitlement under section 
12 of the Alaska Native Claims Settlement Act (43 
U.S.C. 1611) in accordance with the terms and con-
ditions of the Agreement between the Department of 
the Interior, the United States Fish and Wildlife 
Service, the Bureau of Land Management, and the 
Kaktovik Inupiat Corporation effective January 22, 
1993; and 
(2) to the Arctic Slope Regional Corporation 
the remaining subsurface estate to which it is enti-
tled pursuant to the August 9, 1983, agreement be-
tween the Arctic Slope Regional Corporation and the 
United States of America. 
SEC. 30412. LOCAL GOVERNMENT IMPACT AID AND COMMU-
NITY SERVICE ASSISTANCE. 
(a) FINANCIAL ASSISTANCE AUTHORIZED.—
(1) IN
GENERAL.—The Secretary may use 
amounts available from the Coastal Plain Local Gov-
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ernment Impact Aid Assistance Fund established by 
subsection (d) to provide timely financial assistance 
to entities that are eligible under paragraph (2) and 
that are directly impacted by the exploration for or 
production of oil and gas on the Coastal Plain under 
this title. 
(2) ELIGIBLE
ENTITIES.—The North Slope 
Borough, Kaktovik, and other boroughs, municipal 
subdivisions, villages, and any other community or-
ganized under Alaska State law shall be eligible for 
financial assistance under this section. 
(b) USE
OF
ASSISTANCE.—Financial assistance 
under this section may be used only for—
(1) planning for mitigation of the potential ef-
fects of oil and gas exploration and development on 
environmental, social, cultural, recreational and sub-
sistence values; 
(2) implementing mitigation plans and main-
taining mitigation projects; 
(3) developing, carrying out, and maintaining 
projects and programs that provide new or expanded 
public facilities and services to address needs and 
problems associated with such effects, including fire-
fighting, police, water, waste treatment, medivac, 
and medical services; and
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(4) establishment of a coordination office, by 
the North Slope Borough, in the City of Kaktovik, 
which shall—
(A) coordinate with and advise developers 
on local conditions, impact, and history of the 
areas utilized for development; and 
(B) provide to the Committee on Resources 
of the Senate and the Committee on Energy 
and Resources of the Senate an annual report 
on the status of coordination between devel-
opers and the communities affected by develop-
ment. 
(c) APPLICATION.—
(1) IN GENERAL.—Any community that is eligi-
ble for assistance under this section may submit an 
application for such assistance to the Secretary, in 
such form and under such procedures as the Sec-
retary may prescribe by regulation. 
(2) NORTH SLOPE BOROUGH COMMUNITIES.—A 
community located in the North Slope Borough may 
apply for assistance under this section either directly 
to the Secretary or through the North Slope Bor-
ough. 
(3) APPLICATION ASSISTANCE.—The Secretary 
shall work closely with and assist the North Slope
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Borough and other communities eligible for assist-
ance under this section in developing and submitting 
applications for assistance under this section. 
(d) ESTABLISHMENT OF FUND.—
(1) IN GENERAL.—There is established in the 
Treasury the Coastal Plain Local Government Im-
pact Aid Assistance Fund. 
(2) USE.—Amounts in the fund may be used 
only for providing financial assistance under this 
section. 
(3) DEPOSITS.—Subject to paragraph (4), there 
shall be deposited into the fund amounts received by 
the United States as revenues derived from rents, 
bonuses, and royalties under on leases and lease 
sales authorized under this title. 
(4) LIMITATION
ON
DEPOSITS.—The total 
amount in the fund may not exceed $11,000,000. 
(5) INVESTMENT
OF
BALANCES.—The Sec-
retary of the Treasury shall invest amounts in the 
fund in interest bearing government securities. 
(e) AUTHORIZATION OF APPROPRIATIONS.—To pro-
vide financial assistance under this section there is author-
ized to be appropriated to the Secretary from the Coastal 
Plain Local Government Impact Aid Assistance Fund 
$5,000,000 for each fiscal year.
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TITLE V—HYDROPOWER 
SEC. 30501. STUDY AND REPORT ON INCREASING ELECTRIC 
POWER PRODUCTION CAPABILITY OF EXIST-
ING FACILITIES. 
(a) IN GENERAL.—The Secretary of the Interior, in 
consultation with the Administrator of each Federal power 
marketing administration, shall conduct a study of the po-
tential for increasing electric power production capability 
at existing facilities under the administrative jurisdiction 
of the Secretary. 
(b) CONTENT.—The study under this section shall in-
clude identification and description in detail of each facil-
ity that is capable, with or without modification, of pro-
ducing additional hydroelectric power, including esti-
mation of the existing potential for the facility to generate 
hydroelectric power. 
(c) REPORT.—The Secretary shall submit to the Con-
gress a report on the findings, conclusions, and rec-
ommendations of the study under this section by not later 
than 12 months after the date of the enactment of this 
Act. The Secretary shall include in the report the fol-
lowing: 
(1) The identifications, descriptions, and esti-
mations referred to in subsection (b).
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(2) A description of activities the Secretary is 
currently conducting or considering, or that could be 
considered, to produce additional hydroelectric power 
from each identified facility. 
(3) A summary of action that has already been 
taken by the Secretary to produce additional hydro-
electric power from each identified facility. 
(4) The costs to install, upgrade, or modify 
equipment or take other actions to produce addi-
tional hydroelectric power from each identified facil-
ity and the level of Federal power customer involve-
ment in the Secretary’s determination of such costs. 
(5) The benefits that would be achieved by such 
installation, upgrade, modification, or other action, 
including quantified estimates of any additional en-
ergy or capacity from each facility identified under 
subsection (b). 
(6) A description of actions that are planned, 
underway, or might reasonably be considered to in-
crease hydroelectric power production by replacing 
turbine runners. 
(7) A description of actions that are planned, 
underway, or might reasonably be considered to in-
crease hydroelectric power production by performing 
generator uprates and rewinds.
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(8) The impact of increased hydroelectric power 
production on irrigation, fish, wildlife, Indian tribes, 
river health, water quality, navigation, recreation, 
fishing, and flood control. 
(9) Any additional recommendations the Sec-
retary considers advisable to increase hydroelectric 
power production from, and reduce costs and im-
prove efficiency at, facilities under the jurisdiction of 
the Secretary. 
SEC. 30502. STUDY AND IMPLEMENTATION OF INCREASED 
OPERATIONAL 
EFFICIENCIES 
IN 
HYDRO-
ELECTRIC POWER PROJECTS. 
(a) IN GENERAL.—The Secretary of Interior shall 
conduct a study of operational methods and water sched-
uling techniques at all hydroelectric power plants under 
the administrative jurisdiction of the Secretary that have 
an electric power production capacity greater than 50 
megawatts, to—
(1) determine whether such power plants and 
associated river systems are operated so as to opti-
mize energy and capacity capabilities; and 
(2) identify measures that can be taken to im-
prove operational flexibility at such plants to achieve 
such optimization.
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(b) REPORT.—The Secretary shall submit a report on 
the findings, conclusions, and recommendations of the 
study under this section by not later than 18 months after 
the date of the enactment of this Act, including a sum-
mary of the determinations and identifications under 
paragraphs (1) and (2) of subsection (a). The Secretary 
shall include in the report the impact of optimized hydro-
electric power production on irrigation, fish, wildlife, In-
dian tribes, river health, water quality, navigation, recre-
ation, fishing, and flood control. 
(c) COOPERATION
WITH FEDERAL POWER MAR-
KETING ADMINISTRATIONS.—The Secretary shall coordi-
nate with the Administrator of each Federal power mar-
keting administration in determining how the value of 
electric power produced by each hydroelectric power facil-
ity that produces power marketed by the administration 
can be optimized. 
SEC. 30503. SHIFT OF PROJECT LOADS TO OFF-PEAK PERI-
ODS. 
(a) IN GENERAL.—The Secretary of the Interior 
shall—
(1) review electric power consumption by Bu-
reau of Reclamation facilities for water pumping 
purposes; and
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(2) make such adjustments in such pumping as 
possible to minimize the amount of electric power 
consumed for such pumping during periods of peak 
electric power consumption, including by performing 
as much of such pumping as possible during off-
peak hours at night. 
(b) CONSENT OF AFFECTED IRRIGATION CUSTOMERS 
REQUIRED.—The Secretary may not under this section 
make any adjustment in pumping at a facility without the 
consent of each person that has contracted with the 
United States for delivery of water from the facility for 
use for irrigation and that would be affected by such ad-
justment. 
(c) EXISTING OBLIGATIONS NOT AFFECTED.—This 
section shall not be construed to affect any existing obliga-
tion of the Secretary to provide electric power, water, or 
other benefits from Bureau of Reclamation facilities.
TITLE VI—GEOTHERMAL 
ENERGY 
SEC. 30601. COMPETITIVE LEASE SALE REQUIREMENTS. 
(a) IN GENERAL.—Section 4 of the Geothermal 
Steam Act of 1970 (30 U.S.C. 1003) is amended to read 
as follows: 
‘‘LEASING PROCEDURES 
‘‘SEC. 4. (a) IN GENERAL.—
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‘‘(1) NOMINATIONS.—The Secretary shall ac-
cept nominations at any time from qualified compa-
nies and individuals of areas to be leased under this 
Act. 
‘‘(2) COMPETITIVE LEASE SALE REQUIRED.—
The Secretary shall hold a competitive lease sale at 
least once every 2 years for lands in a State in that 
are located areas with respect to which there are 
nominations pending under paragraph (1). 
‘‘(3) NONCOMPETITIVE
LEASING.—The Sec-
retary shall make available for a period of 2 years 
for noncompetitive leasing any lands for which a 
competitive lease sale is held, but for which the Sec-
retary does not receive any bids in a competitive 
lease sale.’’. 
(b) PENDING LEASE APPLICATIONS.—Not later than 
6 months after the date of the enactment of this Act, the 
Secretary of the Interior shall initiate competitive lease 
sales under the Geothermal Steam Act of 1970 (30 U.S.C. 
1001 et seq.), as amended by this Act, for areas with re-
spect to which applications for leasing are pending on the 
date of the enactment of this Act.
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SEC. 30602. SPECIAL PROVISIONS REGARDING DIRECT USE 
OF LOW TEMPERATURE GEOTHERMAL EN-
ERGY RESOURCES. 
(a) LEASING PROCEDURE.—Section 4 of the Geo-
thermal Steam Act of 1970 (30 U.S.C. 1003) is further 
amended by adding at the end the following: 
‘‘(b) LEASING OF LOW TEMPERATURE GEOTHERMAL 
RESOURCES.—Lands leased under this Act exclusively for 
qualified development and direct utilization of low tem-
perature geothermal resources shall be leased to any quali-
fied applicant who first applies for such lease under regu-
lations formulated by the Secretary.’’. 
(b) LIMITATION ON LEASE AREA.—Section 7 of the 
Geothermal Steam Act of 1970 (30 U.S.C. 1006) is 
amended—
(1) in the first sentence by striking ‘‘A geo-
thermal lease’’ and inserting ‘‘(a) IN GENERAL.—
Except as provided in subsection (b), a geothermal 
lease’’; and 
(2) by adding at the end the following: 
‘‘(b) LEASING OF LOW TEMPERATURE GEOTHERMAL 
RESOURCES.—A geothermal lease for qualified develop-
ment and direct utilization of low temperature geothermal 
resources shall embrace not more than the minimum 
amount of acreage determined by the Secretary to be rea-
sonably necessary for such utilization.’’.
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(c) ANNUAL PAYMENT.—Section 5 of the Geothermal 
Steam Act of 1970 (30 U.S.C. 1004) is amended—
(1) in paragraph (c) by redesignating subpara-
graphs (1) and (2) as subparagraphs (A) and (B); 
(2) by redesignating paragraphs (a) through (d) 
in order as paragraphs (1) through (4); 
(3) by inserting ‘‘(a) IN GENERAL.—’’ after 
‘‘SEC. 5.’’; and 
(4) by adding at the end the following: 
‘‘(b) EXEMPTION FOR USE OF LOW TEMPERATURE 
RESOURCES.—
‘‘(1) IN GENERAL.—In lieu of any royalty or 
rental under subsection (a), a lease for qualified de-
velopment and direct utilization of low temperature 
geothermal resources shall provide for payment by 
the lessee of an annual fee per well of not less than 
$100, and not more than $1,000, in accordance with 
the schedule issued under paragraph (2). 
‘‘(2) SCHEDULE.—The Secretary shall issue a 
schedule of fees under this section under which a fee 
is based on the scale of development and utilization 
to which the fee applies.’’. 
(d) DEFINITIONS.—Section 2 of the Geothermal 
Steam Act of 1970 (30 U.S.C. 1001) is amended—
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(1) in paragraph (f) by redesignating subpara-
graphs (1) through (4) in order as subparagraphs 
(A) through (D); 
(2) by redesignating paragraphs (a) through (f) 
in order as paragraphs (1) through (6); and 
(3) by adding at the end the following: 
‘‘(7) LOW
TEMPERATURE
GEOTHERMAL
RE-
SOURCES.—The term ‘low temperature geothermal 
resources’ means geothermal steam and associated 
geothermal resources having a wellhead temperature 
of less than 195 degrees Fahrenheit. 
‘‘(8) QUALIFIED
DEVELOPMENT
AND
DIRECT 
UTILIZATION.—The term ‘qualified development and 
direct utilization’ means development and utilization 
in which all products of geothermal resources, other 
than any heat utilized, are returned to the geo-
thermal formation from which they are produced.’’. 
(e) EXISTING LEASES.—
(1) APPLICATION
TO
CONVERT.—Any lessee 
under a lease under the Geothermal Steam Act of 
1970 that was issued before the date of the enact-
ment of this Act may apply to the Secretary of the 
Interior, by not later than 18 months after the date 
of the enactment of this Act, to convert such lease 
to a lease for qualified development and direct utili-
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zation of low temperature geothermal resources in 
accordance with the amendments made by this sec-
tion. 
(2) CONVERSION.—The Secretary shall approve 
such an application and convert such a lease to a 
lease in accordance with the amendments by not 
later than 180 days after receipt of such application, 
unless the Secretary determines that the applicant is 
not a qualified applicant with respect to the lease. 
SEC. 30603. ROYALTIES AND NEAR-TERM PRODUCTION IN-
CENTIVES. 
(a) ROYALTY.—Section 5 of the Geothermal Steam 
Act of 1970 (30 U.S.C. 1004) is further amended in sub-
section (a) by striking paragraph (1) and inserting the fol-
lowing: 
‘‘(1) a royalty on direct use of geothermal 
steam and associated geothermal resources, other 
than low temperature geothermal resources, which 
shall be—
‘‘(A) 3.5 percent of the gross proceeds 
from the sale of electricity produced by such re-
sources; and 
‘‘(B) 0.75 percent of the gross proceeds 
from the sale of items produced by the direct 
use of such resources;’’.
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(b) NEAR-TERM PRODUCTION INCENTIVE.—
(1) IN
GENERAL.—Notwithstanding section 
5(a) of the Geothermal Steam Act of 1970, as 
amended by subsection (a), or any provision of any 
lease under that Act, the royalty required to be 
paid—
(A) under any qualified geothermal energy 
lease with respect to commercial production of 
heat or energy from a facility that begins such 
production in the 6-year period beginning on 
the date of the enactment of this Act; or 
(B) on qualified expansion geothermal en-
ergy; 
shall be 50 percent of the amount of royalty other-
wise required to be paid under those provisions. 
(2) STATE SHARE.—Notwithstanding section 20 
of the Geothermal Steam Act of 1970 (30 U.S.C. 
1019), section 35 of the Mineral Leasing Act (30 
U.S.C.191), or section 6 of the Mineral Leasing Act 
for Acquired Lands (30 U.S.C. 355), in the case of 
monies received by the United States from royalty 
described in subparagraph (A) or (B) of paragraph 
(1), the percentage required to be paid by the Sec-
retary of the Treasury to a State under those sec-
tions shall be 100 percent.
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HR 6 PCS 
(3) 4-YEAR APPLICATION.—Paragraphs (1) and 
(2) apply only to commercial production of heat or 
energy from a facility in the first 4 years of such 
production. 
(4) NO EFFECT ON STATE PORTION.—This sub-
section shall not be construed to reduce the amount 
of royalty required to be paid to a State. 
(c) DEFINITIONS.—In this section: 
(1) QUALIFIED EXPANSION GEOTHERMAL EN-
ERGY.—The term ‘‘qualified expansion geothermal 
energy’’ means geothermal energy produced from a 
generation facility for which—
(A) the production is increased by more 
than 10 percent as a result of expansion of the 
facility carried out in the 6-year period begin-
ning on the date of the enactment of this Act; 
and 
(B) such production increase is greater 
than 10 percent of the average production by 
the facility during the 5-year period preceding 
the expansion of the facility. 
(2) 
QUALIFIED
GEOTHERMAL
ENERGY 
LEASE.—The term ‘‘qualified geothermal energy 
lease’’ means a lease under the Geothermal Steam 
Act of 1970 (30 U.S.C. 1001 et seq.)—
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(A) that was executed before the end of 
the 6-year period beginning on the date of the 
enactment of this Act; and 
(B) under which no commercial production 
of any form of heat or energy occurred before 
the date of the enactment of this Act. 
(d) ROYALTY EXISTING LEASES.—
(1) IN
GENERAL.—Any lessee under a lease 
issued under the Geothermal Steam Act of 1970 be-
fore the date of the enactment of this Act may mod-
ify the terms of the lease relating to payment of roy-
alties to comply with the amendment made by sub-
section (a), by applying to the Secretary of the Inte-
rior by not later than 18 months after the date of 
the enactment of this Act. 
(2) APPLICATION
OF
MODIFICATION.—Such 
modification shall apply to any use of geothermal 
steam and associated geothermal resources to which 
the amendment applies that occurs after the date of 
that application. 
SEC. 30604. CONSULTATION REGARDING GEOTHERMAL 
LEASING 
AND 
PERMITTING 
ON 
PUBLIC 
LANDS. 
(a) IN GENERAL.—Not later than 6 months after the 
date of the enactment of this Act, the Secretary of the
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Interior and the Secretary of Agriculture shall enter into 
and submit to the Congress a memorandum of under-
standing in accordance with this section regarding leasing 
and permitting, for geothermal development, of public 
lands under their respective administrative jurisdictions. 
(b) LEASE AND PERMIT APPLICATIONS.—The memo-
randum of understanding shall include provisions that—
(1) identify known geothermal areas on public 
lands within the National Forest System and when 
necessary review management plans to consider leas-
ing under the Geothermal Steam Act of 1970 (30 
U.S.C. 1001 et seq.) as a land use; 
(2) establish an administrative procedure for 
processing geothermal lease applications, including 
lines of authority, steps in application processing, 
and timeframes for application processing; 
(3) provide that the Secretary concerned 
shall—
(A) within 14 days after receiving an ap-
plication for a lease, determine whether the ap-
plication contains sufficient information to 
allow processing of the application; and 
(B) if the application is found not to con-
tain sufficient information to allow processing 
the application the Secretary shall, before the
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end of such 14-day period, provide written noti-
fication to the lease applicant that the applica-
tion is being returned to the applicant without 
processing and itemizing the deficiencies in the 
application that prevent processing; 
(4) provide that the Secretary concerned shall 
within 30 days after receiving a lease application, 
provide written notice to the lease applicant regard-
ing the status of the application, including an esti-
mation of the time that will be required to complete 
action on the application; and 
(5) establish an administrative procedure for 
processing geothermal development permits, includ-
ing lines of authority, steps in permit processing, 
and timeframes for permit processing. 
(c) FIVE-YEAR LEASING PLAN.—The memorandum 
of understanding shall develop a 5-year plan for leasing 
under the Geothermal Steam Act of 1970 (30 U.S.C. 1001 
et seq.) of public land in the National Forest System. The 
plan for geothermal leasing shall be updated every 5 years. 
(d) DATA RETRIEVAL SYSTEM.—The memorandum 
of understanding shall establish a joint data retrieval sys-
tem that is capable of tracking lease and permit applica-
tions and requests and providing to the applicant or re-
quester information as to their status within the Depart-
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HR 6 PCS 
ments of the Interior and Agriculture, including an esti-
mate of the time required for administrative action. 
SEC. 30605. REVIEW AND REPORT TO CONGRESS. 
The Secretary of the Interior shall promptly review 
and report to the Congress within 3 years after the date 
of the enactment of this Act regarding the status of all 
moratoria on and withdrawals from leasing under the Geo-
thermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) of 
known geothermal resources areas (as that term is defined 
in section 2 of that Act (30 U.S.C. 1001), specifying for 
each such area whether the basis for such moratoria or 
withdrawal still applies. 
SEC. 30606. REIMBURSEMENT FOR COSTS OF NEPA ANAL-
YSES, DOCUMENTATION, AND STUDIES. 
(a) IN GENERAL.—The Geothermal Steam Act of 
1970 (30 U.S.C. 1001 et seq.) is amended by adding at 
the end the following: 
‘‘REIMBURSEMENT FOR COSTS OF CERTAIN ANALYSES, 
DOCUMENTATION, AND STUDIES 
‘‘SEC. 30. (a) IN GENERAL.—The Secretary of the 
Interior may, through royalty credits, reimburse a person 
who is a lessee, operator, operating rights owner, or appli-
cant for a lease under this Act for reasonable amounts 
paid by the person for preparation by the Secretary (or 
a contractor or other person selected by the Secretary) of 
any project-level analysis, documentation, or related study
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required under the National Environmental Policy Act of 
1969 (42 U.S.C. 4321 et seq.) with respect to the lease. 
‘‘(b) CONDITIONS.—The Secretary may provide reim-
bursement under subsection (a) only if—
‘‘(1) adequate funding to enable the Secretary 
to timely prepare the analysis, documentation, or re-
lated study is not appropriated; 
‘‘(2) the person paid the amounts voluntarily; 
and 
‘‘(3) the person maintains records of its costs 
in accordance with regulations prescribed by the 
Secretary.’’. 
(b) APPLICATION.—The amendments made by this 
section shall apply with respect to any lease entered into 
before, on, or after the date of the enactment of this Act. 
(c) DEADLINE FOR REGULATIONS.—The Secretary 
shall issue regulations implementing the amendments 
made by this section by not later than 90 days after the 
date of the enactment of this Act. 
SEC. 30607. ASSESSMENT OF GEOTHERMAL ENERGY PO-
TENTIAL. 
The Secretary of Interior, acting through the Direc-
tor of the United States Geological Survey, shall update 
the 1978 Assessment of Geothermal Resources, and sub-
mit that updated assessment to the Committee on Re-
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sources of the House of Representatives and the Com-
mittee on Energy and Natural Resources of the Senate—
(1) within 3 years after the date of enactment 
of this Act; and 
(2) thereafter as the availability of data and de-
velopments in technology warrant. 
SEC. 30608. COOPERATIVE OR UNIT PLANS. 
(a) IN GENERAL.—Section 18 of the Geothermal 
Steam Act of 1970 (30 U.S.C. 1017) is amended to read 
as follows: 
‘‘COOPERATIVE OR UNIT PLANS 
‘‘SEC. 18. (a) ADOPTION OF PLAN BY LESSEES.—
‘‘(1) IN GENERAL.—For the purpose of more 
properly conserving the natural resources of any 
geothermal field, or like area, or any part thereof 
(whether or not any part of the geothermal field, or 
like area, is then subject to any cooperative or unit 
plan of development or operation), lessees thereof 
and their representatives may unite with each other, 
or jointly or separately with others, in collectively 
adopting and operating under a cooperative or unit 
plan of development or operation of such field, or 
like area, or any part thereof, if determined and cer-
tified by the Secretary to be necessary or advisable 
in the public interest.
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‘‘(2) MODIFICATION OF LEASE REQUIREMENTS 
BY SECRETARY.—The Secretary may, in the discre-
tion of the Secretary, and with the consent of the 
holders of leases involved, establish, alter, change, or 
revoke drilling, producing, rental, minimum royalty, 
and royalty requirements of such leases and to make 
such regulations with reference to such leases, with 
the consent of the lessees, in connection with the in-
stitution and operation of any such cooperative or 
unit plan as the Secretary may deem necessary or 
proper to secure the proper protection of the public 
interest. 
‘‘(b) REQUIREMENT
OF
PLANS
UNDER
NEW 
LEASES.—The Secretary—
‘‘(1) may provide that geothermal leases issued 
under this Act after the date of the enactment of 
this section shall contain a provision requiring the 
lessee to operate under such a reasonable coopera-
tive or unit plan; and 
‘‘(2) may prescribe such a plan under which 
such lessee shall operate, which shall adequately pro-
tect the rights of all parties in interest, including the 
United States. 
‘‘(c) MODIFICATION OF RATE OF PROSPECTING, DE-
VELOPMENT, AND PRODUCTION.—The Secretary may re-
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quire that any plan authorized by the this section that 
applies to lands owned by the United States contain a pro-
vision under which authority is vested in the Secretary, 
or any person, committee, or State or Federal officer or 
agency as may be designated in the plan, to alter or mod-
ify from time to time the rate of prospecting and develop-
ment and the quantity and rate of production under such 
plan. 
‘‘(d) EXCLUSION FROM DETERMINATION OF HOLD-
ING OR CONTROL.—Any lands that are subject to any plan 
approved or prescribed by the Secretary under this section 
shall not be considered in determining holdings or control 
under any provision of this Act. 
‘‘(e) POOLING
OF CERTAIN LANDS.—If separate 
tracts of lands cannot be independently developed and op-
erated to use geothermal steam and associated geothermal 
resources pursuant to this Act in conformity with an es-
tablished development program—
‘‘(1) any such lands, or a portion thereof, may 
be pooled with other lands, whether or not owned by 
the United States, for purposes of such development 
and operation under a communitization agreement 
providing for an apportionment of production or roy-
alties among the separate tracts of land comprising
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the production unit, if such pooling is determined by 
the Secretary to be in the public interest; and 
‘‘(2) operation or production pursuant to such 
an agreement shall be treated as operation or pro-
duction with respect to each tract of land that is 
subject to the agreement. 
‘‘(f) PLAN REVIEW.—No more than 5 years after ap-
proval of any cooperative or unit plan of development or 
operation, and at least every 5 years thereafter, the Sec-
retary shall review each such plan and, after notice and 
opportunity for comment, eliminate from inclusion in such 
plan any lands that the Secretary determines are not rea-
sonably necessary for cooperative or unit operations under 
the plan. Such elimination shall be based on scientific evi-
dence, and shall occur only if it is determined by the Sec-
retary to be for the purpose of conserving and properly 
managing the geothermal resource. Any land so eliminated 
shall be eligible for an extension under subsection (c) or 
(g) of section 6 if it meets the requirements for such an 
extension. 
‘‘(g) APPROVAL
BY
SECRETARY.—The Secretary 
may, on such conditions as the Secretary may prescribe, 
approve operating, drilling, or development contracts made 
by one or more lessees of geothermal leases, with one or 
more persons, associations, or corporations if, in the dis-
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cretion of the Secretary, the conservation of natural re-
sources or the public convenience or necessity may require 
or the interests of the United States may be best served 
thereby. All leases operated under such approved oper-
ating, drilling, or development contracts, and interests 
thereunder, shall be excepted in determining holdings or 
control under section 7 of this Act.’’.
SEC. 30609. ROYALTY ON BYPRODUCTS. 
Section 5 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1004) is further amended in subsection (a) by 
striking paragraph (2) and inserting the following: 
‘‘(2) a royalty on any byproduct that is a min-
eral named in the first section of the Mineral Leas-
ing Act (30 U.S.C. 181), and that is derived from 
production under the lease, at the rate of the royalty 
that applies under that Act to production of such 
mineral under a lease under that Act;’’. 
SEC. 30610. REPEAL OF AUTHORITIES OF SECRETARY TO 
READJUST TERMS, CONDITIONS, RENTALS, 
AND ROYALTIES. 
Section 8 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1007) is amended by repealing subsections (a) and 
(b), and by striking ‘‘(c)’’.
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SEC. 30611. CREDITING OF RENTAL TOWARD ROYALTY. 
Section 5 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1004) is further amended—
(1) in subsection (a)(2) by inserting ‘‘and’’ 
after the semicolon at the end; 
(2) in subsection (a)(3) by striking ‘‘; and’’ and 
inserting a period; 
(3) by striking paragraph (4) of subsection (a); 
and 
(4) by adding at the end the following: 
‘‘(c) CREDITING OF RENTAL TOWARD ROYALTY.—
Any annual rental under this section that is paid with re-
spect to a lease before the first day of the year for which 
the annual rental is owed shall be credited to the amount 
of royalty that is required to be paid under the lease for 
that year.’’. 
SEC. 30612. LEASE DURATION AND WORK COMMITMENT RE-
QUIREMENTS. 
(a) IN GENERAL.—Section 6 of the Geothermal 
Steam Act of 1970 (30 U.S.C. 1005) is amended—
(1) by striking so much as precedes subsection 
(c), and striking subsections (e), (g), (h), (i), and 
(j); 
(2) by redesignating subsections (c), (d), and 
(f) in order as subsections (g), (h), and (i);
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(3) by inserting before subsection (g), as so re-
designated, the following: 
‘‘LEASE TERM AND WORK COMMITMENT REQUIREMENTS 
‘‘SEC. 6. (a) PRIMARY TERM.—
‘‘(1) IN GENERAL.—A geothermal lease shall be 
for a primary term of ten years. 
‘‘(2) INITIAL EXTENSION.—The Secretary shall 
extend the primary term of a geothermal lease for 
5 years if, for each year after the fifth year of the 
lease—
‘‘(A) the Secretary determined under sub-
section (c) that the lessee satisfied the work 
commitment requirements that applied to the 
lease for that year; or 
‘‘(B) the lessee paid in accordance with 
subsection (d) the value of any work that was 
not completed in accordance with those require-
ments. 
‘‘(3) ADDITIONAL EXTENSION.—The Secretary 
shall extend the primary term of a geothermal lease 
(after an extension under paragraph (2)) for an ad-
ditional 5 years if, for each year after the fifteenth 
year of the lease, the Secretary determined under 
subsection (c) that the lessee satisfied the work com-
mitment requirements that applied to the lease for 
that year.
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‘‘(b) REQUIREMENT
TO SATISFY ANNUAL WORK 
COMMITMENT REQUIREMENT.—
‘‘(1) IN GENERAL.—The lessee for a geothermal 
lease shall, for each year after the fifth year of the 
lease, satisfy work commitment requirements pre-
scribed by the Secretary that apply to the lease for 
that year. 
‘‘(2) PRESCRIPTION OF WORK COMMITMENT RE-
QUIREMENTS.—The Secretary shall issue regulations 
prescribing minimum work commitment require-
ments for geothermal leases, that—
‘‘(A) require that a lessee, in each year 
after the fifth year of the primary term of a 
geothermal lease, diligently work to achieve 
commercial production or utilization of steam 
under the lease; 
‘‘(B) require that in each year to which 
work commitment requirements under the regu-
lations apply, the lessee shall significantly re-
duce the amount of work that remains to be 
done to achieve such production or utilization; 
‘‘(C) describe specific work that must be 
completed by a lessee by the end of each year 
to which the work commitment requirements 
apply;
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‘‘(D) carry forward and apply to work 
commitment requirements for a year, work 
completed in any year in the preceding 3-year 
period that was in excess of the work required 
to be performed in that preceding year; and 
‘‘(E) establish transition rules for leases 
issued before the date of the enactment of this 
subsection. 
‘‘(3) TERMINATION
OF
APPLICATION
OF
RE-
QUIREMENTS.—Work commitment requirements pre-
scribed under this subsection shall not apply to a 
geothermal lease after the date on which geothermal 
steam is produced or utilized under the lease in com-
mercial quantities. 
‘‘(c) DETERMINATION OF WHETHER REQUIREMENTS 
SATISFIED.—The Secretary shall, by not later than 21 
days after the end of each year for which work commit-
ment requirements under subsection (b) apply to a geo-
thermal lease—
‘‘(1) determine whether the lessee has satisfied 
the requirements that apply for that year; 
‘‘(2) notify the lessee of that determination; and 
‘‘(3) in the case of a notification that the lessee 
did not satisfy work commitment requirements for 
the year, include in the notification—
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‘‘(A) a description of the specific work that 
was not completed by the lessee in accordance 
with the requirements; and 
‘‘(B) the amount of the dollar value of 
such work that was not completed, reduced by 
the amount of expenditures made for work com-
pleted in a prior year that is carried forward 
pursuant to subsection (b)(2)(D). 
‘‘(d) PAYMENT
OF
VALUE
OF
UNCOMPLETED 
WORK.—
‘‘(1) IN GENERAL.—If the Secretary notifies a 
lessee that the lessee failed to satisfy work commit-
ment requirements under subsection (b), the lessee 
shall pay to the Secretary, by not later than the end 
of the 60-day period beginning on the date of the 
notification, the dollar value of work that was not 
completed by the lessee, in the amount stated in the 
notification (as reduced under subsection (c)(3)(B)). 
‘‘(2) 
FAILURE
TO
PAY
VALUE
OF 
UNCOMPLETED WORK.—If a lessee fails to pay such 
amount to the Secretary before the end of that pe-
riod, the lease shall terminate upon the expiration of 
the period. 
‘‘(e) CONTINUATION AFTER COMMERCIAL PRODUC-
TION OR UTILIZATION.—If geothermal steam is produced
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or utilized in commercial quantities within the primary 
term of the lease under subsection (a) (including any ex-
tension of the lease under subsection (a)), such lease shall 
continue until the date on which geothermal steam is no 
longer produced or utilized in commercial quantities. 
‘‘(f) CONVERSION OF GEOTHERMAL LEASE TO MIN-
ERAL LEASE.—The lessee under a lease that has produced 
geothermal steam for electrical generation, has been deter-
mined by the Secretary to be incapable of any further com-
mercial production or utilization of geothermal steam, and 
that is producing any valuable byproduct in payable quan-
tities may, within 6 months after such determination—
‘‘(1) convert the lease to a mineral lease under 
the Mineral Leasing Act (30 U.S.C. 181 et seq.) or 
under the Mineral Leasing Act for Acquired Lands 
(30 U.S.C. 351 et seq.), if the lands that are subject 
to the lease can be leased under that Act for the 
production of such byproduct; or 
‘‘(2) convert the lease to a mining claim under 
the general mining laws, if the byproduct is a 
locatable mineral.’’. 
(b) CONFORMING AMENDMENT.—
(1) Section 18 of the Geothermal Steam Act of 
1970 (30 U.S.C. 1017) is amended by striking ‘‘sub-
section (c) or (g)’’ and inserting ‘‘subsection (g)’’.
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(2) Section 20 of the Geothermal Steam Act of 
1970 (30 U.S.C. 1019) is amended by striking ‘‘, in-
cluding the payments referred to in section 6(i),’’. 
SEC. 30613. ADVANCED ROYALTIES REQUIRED FOR SUS-
PENSION OF PRODUCTION. 
Section 5 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1004) is further amended by adding at the end 
the following: 
‘‘(d) ADVANCED ROYALTIES REQUIRED FOR SUS-
PENSION OF PRODUCTION.—(1) If production of heat or 
energy under a geothermal lease is suspended after the 
date of any such production for which royalty is required 
under section 5(a), the Secretary shall require the lessee, 
until the end of such suspension, to pay royalty in advance 
at the monthly pro-rata rate of the average annual rate 
at which such royalty was paid each year in the 5-year-
period preceding the date of suspension. 
‘‘(2) Paragraph (1) shall not apply if the suspension 
is required or otherwise caused by the Secretary, the Sec-
retary of a military department, or a State or local govern-
ment.’’.
SEC. 30614. ANNUAL RENTAL. 
(a) ANNUAL RENTAL RATE.—Section 5 of the Geo-
thermal Steam Act of 1970 (30 U.S.C. 1004) is further 
amended in subsection (a) in paragraph (3) by striking
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nated at the end of the period referred to in para-
graph (1). 
‘‘(3) REINSTATEMENT.—A lease that would 
otherwise terminate under paragraph (1) shall not 
terminate under that paragraph if the lessee pays to 
the Secretary, before the end of the period referred 
to in paragraph (1), the amount of rental due plus 
a late fee equal to 10 percent of such amount.’’.
TITLE VII—COAL 
SEC. 30701. SHORT TITLE. 
This title may be cited as the ‘‘Coal Leasing Amend-
ments Act of 2003’’. 
SEC. 30702. REPEAL OF THE 160-ACRE LIMITATION FOR 
COAL LEASES. 
Section 3 of the Mineral Leasing Act (30 U.S.C. 203) 
is amended in the first sentence by striking ‘‘such lease,’’ 
and all that follows through the end of the sentence and 
inserting ‘‘such lease.’’. 
SEC. 30703. MINING PLANS. 
Section 2(d)(2) of the Mineral Leasing Act (30 
U.S.C. 202a(2)) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(2)’’; and 
(2) by adding at the end the following:
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‘‘(B) The Secretary may establish a period of more 
than 40 years if the Secretary determines that the longer 
period—
‘‘(i) will ensure the maximum economic recovery 
of a coal deposit; or 
‘‘(ii) the longer period is in the interest of the 
orderly, efficient, or economic development of a coal 
resource.’’. 
SEC. 30704. PAYMENT OF ADVANCE ROYALTIES UNDER 
COAL LEASES. 
(a) IN GENERAL.—Section 7(b) of the Mineral Leas-
ing Act of 1920 (30 U.S.C. 207(b)) is amended to read 
as follows: 
‘‘(b)(1) Each lease shall be subjected to the condition 
of diligent development and continued operation of the 
mine or mines, except where operations under the lease 
are interrupted by strikes, the elements, or casualties not 
attributable to the lessee. 
‘‘(2)(A) The Secretary of the Interior, upon deter-
mining that the public interest will be served thereby, may 
suspend the condition of continued operation upon the 
payment of advance royalties. 
‘‘(B) Such advance royalties shall be computed based 
on the average price for coal sold in the spot market from
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the same region during the last month of each applicable 
continued operation year. 
‘‘(C) The aggregate number of years during the ini-
tial and any extended term of any lease for which advance 
royalties may be accepted in lieu of the condition of contin-
ued operation shall not exceed 20. 
‘‘(3) The amount of any production royalty paid for 
any year shall be reduced (but not below zero) by the 
amount of any advance royalties paid under such lease to 
the extent that such advance royalties have not been used 
to reduce production royalties for a prior year. 
‘‘(4) This subsection shall be applicable to any lease 
or logical mining unit in existence on the date of the enact-
ment of this paragraph or issued or approved after such 
date. 
‘‘(5) Nothing in this subsection shall be construed to 
affect the requirement contained in the second sentence 
of subsection (a) relating to commencement of production 
at the end of 10 years.’’. 
(b) AUTHORITY TO WAIVE, SUSPEND, OR REDUCE 
ADVANCE ROYALTIES.—Section 39 of the Mineral Leas-
ing Act (30 U.S.C. 209) is amended by striking the last 
sentence.
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SEC. 30705. ELIMINATION OF DEADLINE FOR SUBMISSION 
OF COAL LEASE OPERATION AND RECLAMA-
TION PLAN. 
Section 7(c) of the Mineral Leasing Act (30 U.S.C. 
207(c)) is amended by striking ‘‘and not later than three 
years after a lease is issued,’’. 
SEC. 30706. AMENDMENTS RELATING TO FINANCIAL ASSUR-
ANCES WITH RESPECT TO BONUS BIDS. 
(a) PROHIBITION ON REQUIRING SURETY BONDS.—
Section 2(a) of the Mineral Leasing Act (30 U.S.C. 
201(a)) is amended by adding at the end the following: 
‘‘(4) The Secretary shall not require a surety bond 
or any other financial assurance to guarantee payment of 
deferred bonus bid installments with respect to any coal 
lease issued based upon a cash bonus bid. 
‘‘(5) Notwithstanding any other provision of law, if 
the lessee under a coal lease fails to pay any installment 
of a deferred cash bonus bid within 10 days after the Sec-
retary provides written notice that payment of such in-
stallment is past due—
‘‘(A) such lease shall automatically terminate; 
‘‘(B) any deferred bonus payments that have 
not been paid to the United States with respect to 
such lease shall no longer be owed to the United 
States; and
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‘‘(C) any bonus payments already made to the 
United States with respect to such lease shall not be 
returned to the lessee or credited in any future lease 
sale.’’. 
(b) CONFORMING AMENDMENT.—Section 2(a)(1) of 
the Mineral Leasing Act (30 U.S.C. 201(a)(1)) is amend-
ed by striking ‘‘Upon default or cancellation of any coal 
lease for which bonus payments are due, any unpaid re-
mainder of the bid shall be immediately payable to the 
United States.’’. 
SEC. 30707. INVENTORY REQUIREMENT. 
(a) REVIEW OF ASSESSMENTS.—
(1) IN GENERAL.—The Secretary of the Inte-
rior, in consultation with the Secretary of Agri-
culture and the Secretary of Energy, shall review 
coal assessments and other available data to iden-
tify—
(A) public lands with coal resources; 
(B) the extent and nature of any restric-
tions or impediments to the development of coal 
resources on public lands identified under para-
graph (1); and 
(C) with respect to areas of such lands for 
which sufficient data exists, resources of com-
pliant coal and supercompliant coal.
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(2) DEFINITIONS.—For purposes of this sub-
section—
(A) the term ‘‘compliant coal’’ means coal 
that contains not less than 1.0 and not more 
than 1.2 pounds of sulfur dioxide per million 
Btu; and 
(B) the term ‘‘supercompliant coal’’ means 
coal that contains less than 1.0 pounds of sul-
fur dioxide per million Btu. 
(b) COMPLETION AND UPDATING OF THE INVEN-
TORY.—The Secretary—
(1) shall complete the inventory under sub-
section (a) by not later than 2 years after the date 
of the enactment of this Act; and 
(2) shall update the inventory as the availability 
of data and developments in technology warrant. 
(c) REPORT.—The Secretary shall submit to the 
Committee on Resources of the House of Representatives 
and to the Committee on Energy and Natural Resources 
of the Senate and make publicly available—
(1) a report containing the inventory under this 
section, by not later than 2 years after the effective 
date of this section; and 
(2) each update of such inventory.
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SEC. 30708. APPLICATION OF AMENDMENTS. 
The amendments made by this title apply with re-
spect to any coal lease issued before, on, or after the date 
of the enactment of this Act.
TITLE VIII—INSULAR AREAS 
ENERGY SECURITY 
SEC. 30801. INSULAR AREAS ENERGY SECURITY. 
Section 604 of the Act entitled ‘‘An Act to authorize 
appropriations for certain insular areas of the United 
States, and for other purposes’’, approved December 24, 
1980 (Public Law 96–597; 94 Stat. 3480–3481), is 
amended—
(1) in subsection (a)(4) by striking the period 
and inserting a semicolon; 
(2) by adding at the end of subsection (a) the 
following new paragraphs: 
‘‘(5) electric power transmission and distribu-
tion lines in insular areas are inadequate to with-
stand damage caused by the hurricanes and ty-
phoons which frequently occur in insular areas and 
such damage often costs millions of dollars to repair; 
and 
‘‘(6) the refinement of renewable energy tech-
nologies since the publication of the 1982 Territorial 
Energy Assessment prepared pursuant to subsection 
(c) reveals the need to reassess the state of energy
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production, consumption, infrastructure, reliance on 
imported energy, and indigenous sources in regard 
to the insular areas.’’; 
(3) by amending subsection (e) to read as fol-
lows: 
‘‘(e)(1) The Secretary of the Interior, in consultation 
with the Secretary of Energy and the chief executive offi-
cer of each insular area, shall update the plans required 
under subsection (c) by—
‘‘(A) updating the contents required by sub-
section (c); 
‘‘(B) drafting long-term energy plans for such 
insular areas with the objective of reducing, to the 
extent feasible, their reliance on energy imports by 
the year 2010 and maximizing, to the extent fea-
sible, use of indigenous energy sources; and 
‘‘(C) drafting long-term energy transmission 
line plans for such insular areas with the objective 
that the maximum percentage feasible of electric 
power transmission and distribution lines in each in-
sular area be protected from damage caused by hur-
ricanes and typhoons. 
‘‘(2) Not later than May 31, 2004, the Secretary of 
the Interior shall submit to the Congress the updated
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plans for each insular area required by this subsection.’’; 
and 
(4) by amending subsection (g)(4) to read as 
follows: 
‘‘(4) 
POWER
LINE
GRANTS
FOR
TERRI-
TORIES.—
‘‘(A) IN GENERAL.—The Secretary of the 
Interior is authorized to make grants to govern-
ments of territories of the United States to 
carry out eligible projects to protect electric 
power transmission and distribution lines in 
such territories from damage caused by hurri-
canes and typhoons. 
‘‘(B) ELIGIBLE PROJECTS.—The Secretary 
may award grants under subparagraph (A) only 
to governments of territories of the United 
States that submit written project plans to the 
Secretary for projects that meet the following 
criteria: 
‘‘(i) The project is designed to protect 
electric power transmission and distribu-
tion lines located in one or more of the ter-
ritories of the United States from damage 
caused by hurricanes and typhoons.
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‘‘(ii) The project is likely to substan-
tially reduce the risk of future damage, 
hardship, loss, or suffering. 
‘‘(iii) The project addresses one or 
more problems that have been repetitive or 
that pose a significant risk to public health 
and safety. 
‘‘(iv) The project is not likely to cost 
more than the value of the reduction in di-
rect damage and other negative impacts 
that the project is designed to prevent or 
mitigate. The cost benefit analysis required 
by this criterion shall be computed on a 
net present value basis. 
‘‘(v) The project design has taken into 
consideration long-term changes to the 
areas and persons it is designed to protect 
and has manageable future maintenance 
and modification requirements. 
‘‘(vi) The project plan includes an 
analysis of a range of options to address 
the problem it is designed to prevent or 
mitigate and a justification for the selec-
tion of the project in light of that analysis.
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‘‘(vii) The applicant has demonstrated 
to the Secretary that the matching funds 
required by subparagraph (D) are avail-
able. 
‘‘(C) PRIORITY.—When making grants 
under this paragraph, the Secretary shall give 
priority to grants for projects which are likely 
to—
‘‘(i) have the greatest impact on re-
ducing future disaster losses; and 
‘‘(ii) best conform with plans that 
have been approved by the Federal Govern-
ment or the government of the territory 
where the project is to be carried out for 
development or hazard mitigation for that 
territory. 
‘‘(D) 
MATCHING
REQUIREMENT.—The 
Federal share of the cost for a project for which 
a grant is provided under this paragraph shall 
not exceed 75 percent of the total cost of that 
project. The non-Federal share of the cost may 
be provided in the form of cash or services. 
‘‘(E) TREATMENT OF FUNDS FOR CERTAIN 
PURPOSES.—Grants provided under this para-
graph shall not be considered as income, a re-
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source, or a duplicative program when deter-
mining eligibility or benefit levels for Federal 
major disaster and emergency assistance. 
‘‘(F) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There is authorized to be appropriated 
to carry out this paragraph $5,000,000 for each 
fiscal year beginning after the date of the en-
actment of this paragraph.’’.
TITLE IX—MISCELLANEOUS 
PROVISIONS 
SEC. 30901. REPORT ON ENERGY FACILITY RIGHTS-OF-WAY 
AND CORRIDORS ON FEDERAL LANDS. 
(a) REPORT TO CONGRESS.—
(1) IN GENERAL.—Not later than 1 year after 
the date of the enactment of this section, the Sec-
retary of Agriculture and the Secretary of the Inte-
rior, in consultation with the Secretaries of Com-
merce, Defense, and Energy and the Federal Energy 
Regulatory Commission, shall submit to the Commit-
tees on Energy and Commerce and Resources of the 
House of Representatives and the Committee on En-
ergy and Natural Resources of the Senate a joint re-
port—
(A) addressing—
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(i) the location of existing rights-of-
way and designated and de facto corridors 
for oil and gas pipelines and electric trans-
mission and distribution facilities on Fed-
eral lands; and 
(ii) opportunities for additional oil 
and gas pipeline and electric transmission 
capacity within such rights-of-way and cor-
ridors; and 
(B) containing a plan for making available, 
upon request, to the appropriate Federal, State, 
and local agencies, tribal governments, and 
other persons involved in the siting of oil and 
gas pipelines and electricity transmission facili-
ties Geographic Information System-based in-
formation regarding the location of such exist-
ing rights-of-way and corridors and any planned 
rights-of-way and corridors. 
(2) CONSULTATIONS AND CONSIDERATIONS.—
In undertaking the report, the Secretary of the Inte-
rior and the Secretary of Agriculture shall consult 
with—
(A) other agencies of Federal, State, tribal, 
or local units of government as appropriate;
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(B) persons involved in the siting of oil 
and gas pipelines and electric transmission fa-
cilities; and 
(C) other interested members of the public. 
(3) LIMITATION.—The Secretary of the Interior 
and the Secretary of Agriculture shall limit the dis-
tribution of the report and Geographic Information 
System-based information referred to in paragraph 
(1) as necessary for national and infrastructure se-
curity reasons, if either Secretary determines that 
such information is authorized to be withheld from 
public disclosure pursuant to a national security or 
other exception under section 552(b) of title 5, 
United States Code (popularly known as the ‘‘Free-
dom of Information Act’’). 
(b) CORRIDOR DESIGNATIONS.—
(1) WITHIN
THE
CONTIGUOUS
WESTERN 
STATES.—Not later than 24 months after the date 
of the enactment of this section, the Secretaries of 
Agriculture, Commerce, Defense, Energy, and the 
Interior, in consultation with the Federal Energy 
Regulatory Commission and the affected utility in-
dustries, jointly shall—
(A) designate, pursuant to title 5 of the 
Federal Land Policy and Management Act of
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1976 (43 U.S.C. 1761 et seq.), and other appli-
cable Federal laws, corridors needed or useful 
for oil and gas pipelines and electricity trans-
mission and facilities on Federal lands in the 
eleven contiguous Western States as that term 
is defined in section 103(o) of the Federal Land 
Policy and Management Act of 1976 (43 U.S.C. 
1702(o)); 
(B) perform any environmental reviews 
that may be required to complete the designa-
tions of corridors for such facilities on Federal 
lands in those States; and 
(C) incorporate the designated corridors 
into the relevant departmental and agency land 
use and resource management plans or the 
equivalent. 
(2) WITHIN
THE
REMAINING
STATES.—Not 
later than 4 years after the date of the enactment 
of this section, the Secretaries of Agriculture, Com-
merce, Defense, Energy, and the Interior, in con-
sultation with the Federal Energy Regulatory Com-
mission and the affected utility industries, jointly 
shall identify corridors needed or useful for oil and 
gas pipelines and electricity transmission and dis-
tribution facilities on Federal lands in the States
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other than those described in paragraph (1), and 
shall schedule prompt action to identify, designate, 
and incorporate these corridors into the land use 
plan. 
(3) ONGOING
RESPONSIBILITIES.—The Secre-
taries of Agriculture, Commerce, Defense, Energy, 
and the Interior, in consultation with the Federal 
Energy Regulatory Commission and the affected 
utility industries, shall ensure that additional cor-
ridors as may be needed or useful for oil and gas 
pipelines and electricity transmission and distribu-
tion facilities on Federal lands are promptly des-
ignated. The Secretaries shall provide a process for 
the prompt review of applications for such corridors. 
(c) FACTORS TO CONSIDER.—When carrying out this 
section, the Secretaries shall take into account the need 
for upgraded and new electricity transmission and dis-
tribution facilities to improve reliability, relieve congestion, 
and enhance the capability of the national grid to deliver 
electricity. 
(d) DEFINITION OF CORRIDOR.—As used in this sec-
tion and for purposes of title V of the Federal Land Policy 
and Management Act of 1976, the term ‘corridor’ shall 
mean a linear strip of land without definite width, but lim-
ited by technological, environmental, and topographical
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factors, and that contains or may in the future contain 
one or more utility, communication, or transportation fa-
cilities. A corridor is a land use designation identified for 
the purpose of establishing policy direction as to the pre-
ferred location of compatible linear facilities and compat-
ible and conflicting land uses. It does not imply entitle-
ment of use or limits as to siting facilities in additional 
locations. Appropriate environmental review and regu-
latory permitting reflecting work already undertaken in 
the designation of a corridor shall precede occupancy on 
a project-specific basis. 
SEC. 30902. ELECTRICITY TRANSMISSION LINE RIGHT-OF-
WAY, CLEVELAND NATIONAL FOREST AND 
ADJACENT PUBLIC LANDS, CALIFORNIA. 
(a) ISSUANCE.—Subject to subsection (c), the Sec-
retary of the Interior and the Secretary of Agriculture 
shall issue all necessary grants, easements, permits, plan 
amendments, and other approvals to allow for the siting 
and construction of a high-voltage electricity transmission 
line right-of-way running approximately north to south 
through the Trabuco Ranger District of the Cleveland Na-
tional Forest in the State of California and adjacent lands 
under the jurisdiction of the Bureau of Land Management 
and the Forest Service. The right-of-way approvals shall 
provide all necessary Federal authorization from the Sec-
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retary of the Interior and the Secretary of Agriculture for 
the routing, construction, operation, and maintenance of 
a 500 KV transmission line capable of meeting the long-
term electricity transmission needs of the region between 
the existing Valley-Serrano transmission line to the north 
and the Telega–Escondido transmission line to the south, 
and for connecting to future generating capacity that may 
be developed in the region. 
(b) PROTECTION OF WILDERNESS AREAS.—The Sec-
retary of the Interior and the Secretary of Agriculture 
shall not allow any portion of a transmission line right-
of-way corridor identified in subsection (a) to enter any 
identified wilderness area in existence as of the date of 
the enactment of this section. 
(c) ENVIRONMENTAL
AND
ADMINISTRATIVE
RE-
VIEWS.—
(1) DEPARTMENT
OF
INTERIOR
OR
LOCAL 
AGENCY.—The Secretary of the Interior, acting 
through the Bureau of Land Management, shall be 
the lead Federal agency with overall responsibility to 
ensure completion of required environmental and 
other reviews of the approvals to be issued under 
subsection (a). 
(2) NATIONAL FOREST SYSTEM LAND.—For the 
portions of the corridor on National Forest System
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lands, the Secretary of Agriculture shall complete all 
required environmental reviews and administrative 
actions in coordination with the Secretary of the In-
terior. 
(3) EXPEDITIOUS
COMPLETION.—The reviews 
required for issuance of the approvals under sub-
section (a) shall be completed not later than 1 year 
after the date of the enactment of this Act. 
(d) TIME
FOR ISSUANCE.—The necessary grants, 
easements, permits, plan amendments, and other approv-
als for the transmission line right-of-way shall be issued 
not later than 60 days after the completion of the environ-
mental reviews under subsection (c). 
(e) OTHER TERMS AND CONDITIONS.—The trans-
mission line right-of-way shall be subject to such terms 
and conditions as the Secretary of the Interior and the 
Secretary of Agriculture consider necessary, as a result 
of the environmental reviews under subsection (c), to pro-
tect the value of historic, cultural, and natural resources 
under the jurisdiction of the Department of the Interior 
or the Department of Agriculture. 
(f) PREFERENCE AMONG PROPOSALS.—The Sec-
retary of the Interior and the Secretary of Agriculture 
shall give a preference to any application or preapplication 
proposal for a transmission line right-of-way, as described
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in subsection (a), that was submitted before December 31, 
2002, over all other applications and proposals for the 
same or similar right-of-way submitted on or after that 
date. 
SEC. 30903. CONSULTATION REGARDING ENERGY RIGHTS-
OF-WAY ON PUBLIC LANDS. 
(a) IN GENERAL.—Not later than 6 months after the 
date of the enactment of this Act, the Secretary of the 
Interior and the Secretary of Agriculture shall enter into, 
and submit to the Congress, a memorandum of under-
standing in accordance with this section regarding the 
processing of new applications for linear rights of way for 
electrical transmission lines and oil or gas pipelines on 
public lands within the jurisdiction of the Secretary of the 
Interior and National Forest System lands within the ju-
risdiction of the Secretary of Agriculture. 
(b) CONTENTS.—The memorandum of understanding 
shall include provisions that—
(1) establish an administrative procedure for 
processing right-of-way applications, including lines 
of authority, steps in application processing, and 
timeframes for application processing; 
(2) provide for coordination of planning relating 
to the granting of these rights-of-way;
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(3) provide for coordination of environmental 
compliance efforts to avoid duplication of effort; and 
(4) provide for coordination of use of right-of-
way stipulations to achieve consistency.
SEC. 30904. ENHANCING ENERGY EFFICIENCY IN MANAGE-
MENT OF FEDERAL LANDS. 
(a) SENSE OF THE CONGRESS.—It is the sense of the 
Congress that Federal agencies should enhance the use of 
energy efficient technologies in the management of natural 
resources. 
(b) ENERGY EFFICIENT BUILDINGS.—To the extent 
practicable, the Secretary of the Interior, the Secretary 
of Commerce, and the Secretary of Agriculture shall seek 
to incorporate energy efficient technologies in public and 
administrative buildings associated with management of 
the National Park System, National Wildlife Refuge Sys-
tem, National Forest System, National Marine Sanc-
tuaries System, and other public lands and resources man-
aged by the Secretaries. 
(c) ENERGY EFFICIENT VEHICLES.—To the extent 
practicable, the Secretary of the Interior, the Secretary 
of Commerce, and the Secretary of Agriculture shall seek 
to use energy efficient motor vehicles, including vehicles 
equipped with biodiesel or hybrid engine technologies, in 
the management of the National Park System, National
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Wildlife Refuge System, National Forest System, National 
Marine Sanctuaries System, and other public lands and 
resources managed by the Secretaries.
SEC. 30905. PERMITTING OF WIND ENERGY DEVELOPMENT 
PROJECTS ON PUBLIC LANDS. 
(a) REQUIRED POLICIES AND PROCEDURES.—The 
Secretary of the Interior shall process right-of-way appli-
cations for wind energy site testing and monitoring facili-
ties on public lands administered by the Bureau of Land 
Management in accordance with policies and procedures 
that are substantially the same as those set forth in Bu-
reau of Land Management Instruction Memorandum No. 
2003-020, dated October 16, 2002. 
(b) LIMITATION ON RENT AND OTHER CHARGES.—
(1) IN GENERAL.—The Secretary of the Inte-
rior may not impose rent and other charges with re-
spect to any wind energy development project on 
public lands that, in the aggregate, exceed 50 per-
cent of the maximum amount of rent that could be 
charged with respect to that project under the terms 
of the Bureau of Land Management Instruction 
Memorandum referred to in subsection (a). 
(2) TERMINATION.—Paragraph (1) shall not 
apply after the earlier of—
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(A) the date on which the Secretary of the 
Interior determines there exists at least 10,000 
megawatts of electricity generating capacity 
from non-hydropower renewable energy re-
sources on public lands; or 
(B) the end of the 10-year period begin-
ning on the date of the enactment of this Act. 
(3) STATE SHARE NOT AFFECTED.—This sub-
section shall not affect any State share of rent and 
other charges with respect to any wind energy devel-
opment project on public lands. 
SEC. 30906. SENSE OF THE CONGRESS REGARDING GEN-
ERATION CAPACITY OF ELECTRICITY FROM 
RENEWABLE ENERGY RESOURCES ON PUB-
LIC LANDS. 
It is the sense of the Congress that the Secretary of 
the Interior shall, within the next 10 years after the date 
of the enactment of this Act, seek to have approved non-
hydropower renewable energy projects located on the pub-
lic lands with a generation capacity of at least 10,000 
megawatts of electricity.
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SEC. 30907. ASSESSMENT OF OCEAN THERMAL ENERGY RE-
SOURCES. 
(a) RESOURCE ASSESSMENT.—Not later than 3 
months after the date of the enactment of this Act, and 
each year thereafter, the Secretary of the Interior shall—
(1) review assessments of ocean thermal energy 
resources, other than resources of any area of the 
Outer Continental Shelf that is subject to a morato-
rium on leasing for energy exploration or develop-
ment, that are available in the United States and its 
territories and possessions; and 
(2) undertake new assessments of such re-
sources as necessary. 
(b) CONSIDERATIONS.—In reviewing and under-
taking assessments under subsection (a), the Secretary 
shall take into account changes in market conditions, 
available technologies, and other relevant factors. 
(c) REPORTS.—Not later than 1 year after the date 
of the enactment of this Act, and each year thereafter, 
the Secretary shall publish a report on reviews and assess-
ments under subsection (a). Each report shall contain—
(1) a detailed inventory of the available amount 
and characteristics of ocean thermal energy re-
sources;
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(2) estimates of the costs of actions needed to 
develop and accelerate efforts to commercialize ocean 
thermal energy conversion; and 
(3) such other information as the Secretary 
considers would be useful in developing ocean ther-
mal energy resources. 
SEC. 30908. SENSE OF THE CONGRESS REGARDING DEVEL-
OPMENT OF MINERALS UNDER PADRE IS-
LAND NATIONAL SEASHORE. 
(a) FINDINGS.—The Congress finds the following: 
(1) Pursuant to Public Law 87–712 (16 U.S.C. 
459d et seq.; popularly known as the ‘‘Federal Ena-
bling Act’’) and various deeds and actions there-
under, the United States is the owner of the surface 
estate only of certain lands constituting the Padre 
Island National Seashore. 
(2) Ownership of the oil, gas, and other min-
erals in the subsurface estate of the lands consti-
tuting the Padre Island National Seashore was never 
acquired by the United States and ownership of 
those interests are held by the State of Texas and 
private parties. 
(3) The Federal Enabling Act expressly con-
templated that the United States would recognize 
the ownership and future development of the oil,
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gas, and other minerals in the subsurface estate of 
the lands constituting the Padre Island National 
Seashore by the owners and their mineral lessees 
and recognized that approval of the State of Texas 
was required to create Padre Island National Sea-
shore. 
(4) Approval was given for the creation of 
Padre Island National Seashore by the State of 
Texas through TEX. REV. CIV. STAT. ANN. Art. 
6077(t) (Vernon 1970), which expressly recognized 
that development of the oil, gas, and other minerals 
in the subsurface of the lands constituting Padre Is-
land National Seashore would be conducted with full 
rights of ingress and egress under the laws of the 
State of Texas. 
(b) SENSE OF THE CONGRESS.—With regard to Fed-
eral law, any regulation of the development of oil, gas, or 
other minerals in the subsurface of the lands constituting 
Padre Island National Seashore should be made as if those 
lands retained the status that they had on September 27, 
1962. 
SEC. 30909. ENCOURAGING PROHIBITION OF OFF-SHORE 
DRILLING IN THE GREAT LAKES. 
(a) FINDINGS.—The Congress finds that—
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(1) the water resources of the Great Lakes 
Basin are precious public natural resources, shared 
and held in trust by the States of Illinois, Indiana, 
Michigan, Minnesota, New York, Ohio, Pennsyl-
vania, and Wisconsin, and the Canadian Province of 
Ontario; 
(2) the environmental dangers associated with 
off-shore drilling in the Great Lakes for oil and gas 
outweigh the potential benefits of such drilling; 
(3) in accordance with the Submerged Lands 
Act (43 U.S.C. 1301 et seq.), each State that bor-
ders any of the Great Lakes has authority over the 
area between that State’s coastline and the bound-
ary of Canada or another State; 
(4) the States of Illinois, Michigan, New York, 
Pennsylvania, and Wisconsin each have a statutory 
prohibition of off-shore drilling in the Great Lakes 
for oil and gas; 
(5) the States of Indiana, Minnesota, and Ohio 
do not have such a prohibition; and 
(6) the Canadian Province of Ontario does not 
have such a prohibition, and drilling for and produc-
tion of gas occurs in the Canadian portion of Lake 
Erie.
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(b) ENCOURAGEMENT OF PROHIBITIONS ON OFF-
SHORE DRILLING.—The Congress encourages—
(1) the States of Illinois, Michigan, New York, 
Pennsylvania, and Wisconsin to continue to prohibit 
off-shore drilling in the Great Lakes for oil and gas; 
(2) the States of Indiana, Minnesota, and Ohio 
and the Canadian Province of Ontario to enact a 
prohibition of such drilling; and 
(3) the Canadian Province of Ontario to require 
the cessation of any such drilling and any production 
resulting from such drilling.
DIVISION D—TAX
SEC. 40001. SHORT TITLE; ETC. 
(a) SHORT TITLE.—This division may be cited as the 
‘‘Energy Tax Policy Act of 2003’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this division an 
amendment or repeal is expressed in terms of an amend-
ment to, or repeal of, a section or other provision, the ref-
erence shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
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TITLE I—CONSERVATION 
SEC. 41001. CREDIT FOR RESIDENTIAL SOLAR ENERGY 
PROPERTY. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 (relating to nonrefundable personal 
credits) is amended by inserting after section 25B the fol-
lowing new section: 
‘‘SEC. 25C. RESIDENTIAL SOLAR ENERGY PROPERTY. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to the sum of—
‘‘(1) 15 percent of the qualified photovoltaic 
property expenditures made by the taxpayer during 
such year, and 
‘‘(2) 15 percent of the qualified solar water 
heating property expenditures made by the taxpayer 
during the taxable year. 
‘‘(b) LIMITATIONS.—
‘‘(1) MAXIMUM
CREDIT.—The credit allowed 
under subsection (a) shall not exceed—
‘‘(A) $2,000 for each system of property 
described in subsection (c)(1), and 
‘‘(B) $2,000 for each system of property 
described in subsection (c)(2).
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‘‘(2) SAFETY CERTIFICATIONS.—No credit shall 
be allowed under this section for an item of property 
unless—
‘‘(A) in the case of solar water heating 
equipment, such equipment is certified for per-
formance and safety by the non-profit Solar 
Rating Certification Corporation or a com-
parable entity endorsed by the government of 
the State in which such property is installed, 
and 
‘‘(B) in the case of a photovoltaic system, 
such system meets appropriate fire and electric 
code requirements. 
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED SOLAR WATER HEATING PROP-
ERTY
EXPENDITURE.—The term ‘qualified solar 
water heating property expenditure’ means an ex-
penditure for property to heat water for use in a 
dwelling unit located in the United States and used 
as a residence if at least half of the energy used by 
such property for such purpose is derived from the 
sun. 
‘‘(2) QUALIFIED PHOTOVOLTAIC PROPERTY EX-
PENDITURE.—The term ‘qualified photovoltaic prop-
erty expenditure’ means an expenditure for property
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which uses solar energy to generate electricity for 
use in a dwelling unit. 
‘‘(3) SOLAR PANELS.—No expenditure relating 
to a solar panel or other property installed as a roof 
(or portion thereof) shall fail to be treated as prop-
erty described in paragraph (1) or (2) solely because 
it constitutes a structural component of the struc-
ture on which it is installed. 
‘‘(4) LABOR
COSTS.—Expenditures for labor 
costs properly allocable to the onsite preparation, as-
sembly, or original installation of the property de-
scribed in paragraph (1) or (2) and for piping or 
wiring to interconnect such property to the dwelling 
unit shall be taken into account for purposes of this 
section. 
‘‘(5) SWIMMING POOLS, ETC., USED AS STOR-
AGE MEDIUM.—Expenditures which are properly al-
locable to a swimming pool, hot tub, or any other 
energy storage medium which has a function other 
than the function of such storage shall not be taken 
into account for purposes of this section. 
‘‘(d) SPECIAL RULES.—
‘‘(1) DOLLAR AMOUNTS IN CASE OF JOINT OC-
CUPANCY.—In the case of any dwelling unit which is 
jointly occupied and used during any calendar year
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as a residence by 2 or more individuals the following 
shall apply: 
‘‘(A) The amount of the credit allowable 
under subsection (a) by reason of expenditures 
made during such calendar year by any of such 
individuals with respect to such dwelling unit 
shall be determined by treating all of such indi-
viduals as 1 taxpayer whose taxable year is 
such calendar year. 
‘‘(B) There shall be allowable with respect 
to such expenditures to each of such individ-
uals, a credit under subsection (a) for the tax-
able year in which such calendar year ends in 
an amount which bears the same ratio to the 
amount determined under subparagraph (A) as 
the amount of such expenditures made by such 
individual during such calendar year bears to 
the aggregate of such expenditures made by all 
of such individuals during such calendar year. 
‘‘(C) Subparagraphs (A) and (B) shall be 
applied separately with respect to qualified 
solar water heating property expenditures and 
qualified photovoltaic property expenditures. 
‘‘(2) TENANT-STOCKHOLDER IN COOPERATIVE 
HOUSING CORPORATION.—In the case of an indi-
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vidual who is a tenant-stockholder (as defined in sec-
tion 216) in a cooperative housing corporation (as 
defined in such section), such individual shall be 
treated as having made his tenant-stockholder’s pro-
portionate share (as defined in section 216(b)(3)) of 
any expenditures of such corporation. 
‘‘(3) CONDOMINIUMS.—
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who is a member of a condominium man-
agement association with respect to a condo-
minium which he owns, such individual shall be 
treated as having made his proportionate share 
of any expenditures of such association. 
‘‘(B) CONDOMINIUM
MANAGEMENT
ASSO-
CIATION.—For purposes of this paragraph, the 
term ‘condominium management association’ 
means an organization which meets the require-
ments of paragraph (1) of section 528(c) (other 
than subparagraph (E) thereof) with respect to 
a condominium project substantially all of the 
units of which are used as residences. 
‘‘(4) ALLOCATION IN CERTAIN CASES.—If less 
than 80 percent of the use of an item is for nonbusi-
ness purposes, only that portion of the expenditures
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for such item which is properly allocable to use for 
nonbusiness purposes shall be taken into account. 
‘‘(5) WHEN EXPENDITURE MADE; AMOUNT OF 
EXPENDITURE.—
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), an expenditure with respect 
to an item shall be treated as made when the 
original installation of the item is completed. 
‘‘(B) EXPENDITURES PART OF BUILDING 
CONSTRUCTION.—In the case of an expenditure 
in connection with the construction or recon-
struction of a structure, such expenditure shall 
be treated as made when the original use of the 
constructed or reconstructed structure by the 
taxpayer begins. 
‘‘(C) AMOUNT.—The amount of any ex-
penditure shall be the cost thereof. 
‘‘(6) PROPERTY FINANCED BY SUBSIDIZED EN-
ERGY FINANCING.—For purposes of determining the 
amount of expenditures made by any individual with 
respect to any dwelling unit, there shall not be taken 
into account expenditures which are made from sub-
sidized energy financing (as defined in section 
48(a)(4)(A)).
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‘‘(e) BASIS ADJUSTMENTS.—For purposes of this 
subtitle, if a credit is allowed under this section for any 
expenditure with respect to any property, the increase in 
the basis of such property which would (but for this sub-
section) result from such expenditure shall be reduced by 
the amount of the credit so allowed. 
‘‘(f) TERMINATION.—The credit allowed under this 
section shall not apply to taxable years beginning after 
December 31, 2006 (December 31, 2008, with respect to 
qualified photovoltaic property expenditures).’’. 
(b) CONFORMING AMENDMENTS.—
(1) Subsection (a) of section 1016 is amended 
by striking ‘‘and’’ at the end of paragraph (27), by 
striking the period at the end of paragraph (28) and 
inserting ‘‘, and’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(29) to the extent provided in section 25C(e), 
in the case of amounts with respect to which a credit 
has been allowed under section 25C.’’. 
(2) The table of sections for subpart A of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 25B the fol-
lowing new item:
‘‘Sec. 25C. Residential solar energy property.’’.
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by any person in producing an emulsion described in 
section 4081(a)(2)(C) which is sold or used in such 
person’s trade or business, the Secretary shall pay 
(without interest) to such person an amount equal to 
the excess of the regular tax rate over the incentive 
tax rate with respect to such fuel. 
‘‘(2) DEFINITIONS.—For purposes of paragraph 
(1)—
‘‘(A) REGULAR TAX RATE.—The term ‘reg-
ular tax rate’ means the aggregate rate of tax 
imposed by section 4081 determined without re-
gard to section 4081(a)(2)(C). 
‘‘(B) INCENTIVE
TAX
RATE.—The term 
‘incentive tax rate’ means the aggregate rate of 
tax imposed by section 4081 determined with 
regard to section 4081(a)(2)(C).’’. 
(2) LATER SEPARATION OF FUEL.—
(A) IN GENERAL.—Section 4081 (relating 
to imposition of tax) is amended by redesig-
nating subsections (d) and (e) as subsections 
(e) and (f), respectively, and by inserting after 
subsection (c) the following new subsection: 
‘‘(d) LATER SEPARATION OF FUEL FROM DIESEL-
WATER FUEL EMULSION.—If any person separates the 
taxable fuel from a diesel-water fuel emulsion on which