451
Congress a report explaining how such amounts will be
distributed among the authorizations contained in this
title.
(b) PROHIBITION.—(1) No amount identified under
subsection (a) shall be reprogrammed if such reprogram-
ming would result in an obligation which changes an indi-
vidual distribution required to be reported under sub-
section (a) by more than 5 percent unless the Secretary
has transmitted to the appropriate authorizing committees
of the Congress a report described in subsection (c) and
a period of 30 days has elapsed after such committees re-
ceive the report.
(2) In the computation of the 30-day period described
in paragraph (1), there shall be excluded any day on which
either House of Congress is not in session because of an
adjournment of more than 3 days to a day certain.
(c) REPROGRAMMING REPORT.—A report referred to
in subsection (b)(1) shall contain a full and complete
statement of the action proposed to be taken and the facts
and circumstances relied on in support of the proposed
action.
SEC. 21812. CONSTRUCTION WITH OTHER LAWS.
Except as otherwise provided in this title, the Sec-
retary shall carry out the research, development, dem-
onstration, 
and 
commercial 
application 
programs,
452
projects, and activities authorized by this title in accord-
ance with the applicable provisions of the Atomic Energy
Act of 1954 (42 U.S.C. et seq.), the Federal Nonnuclear
Research and Development Act of 1974 (42 U.S.C. 5901
et seq.), the Energy Policy Act of 1992 (42 U.S.C. 13201
et seq.), the Stevenson-Wydler Technology Innovation Act
of 1980 (15 U.S.C. 3701 et seq.), chapter 18 of title 35,
United States Code (commonly referred to as the Bayh-
Dole Act), and any other Act under which the Secretary
is authorized to carry out such activities.
SEC. 21813. UNIVERSITY COLLABORATION.
Not later than 2 years after the date of enactment
of this Act, the Secretary shall transmit to the Congress
a report that examines the feasibility of promoting collabo-
rations between large institutions of higher education and
small institutions of higher education through grants, con-
tracts, and cooperative agreements made by the Secretary
for energy projects. The Secretary shall also consider pro-
viding incentives for the inclusion of small institutions of
higher education, including minority-serving institutions,
in energy research grants, contracts, and cooperative
agreements.
453
SEC. 21814. FEDERAL LABORATORY EDUCATIONAL PART-
NERS.
(a) DISTRIBUTION
OF ROYALTIES RECEIVED
BY
FEDERAL AGENCIES.—Section 14(a)(1)(B)(v) of the Ste-
venson-Wydler Technology Innovation Act of 1980 (15
U.S.C. 3710c(a)(1)(B)(v)), is amended to read as follows:
‘‘(v) for scientific research and develop-
ment and for educational assistance and other
purposes consistent with the missions and ob-
jectives of the Department of Energy and the
laboratory.’’.
(b) COOPERATIVE RESEARCH AND DEVELOPMENT
AGREEMENTS.—Section 12(b)(5)(C) of the Stevenson-
Wydler Technology Innovation Act of 1980 (15 U.S.C.
3710a(b)(5)(C)) is amended to read as follows:
‘‘(C) for scientific research and development
and for educational assistance consistent with the
missions and objectives of the Department of Energy
and the laboratory.’’.
SEC. 21815. INTERAGENCY COOPERATION.
The Secretary shall enter into discussions with the
Administrator of the National Aeronautics and Space Ad-
ministration with the goal of reaching an interagency
working agreement between the 2 agencies that would
make the National Aeronautics and Space Administra-
tion’s expertise in energy, gained from its existing and
454
planned programs, more readily available to the relevant
research, development, demonstration, and commercial ap-
plications programs of the Department. Technologies to
be discussed should include the National Aeronautics and
Space Administration’s modeling, research, development,
testing, and evaluation of new energy technologies, includ-
ing solar, wind, fuel cells, and hydrogen storage and dis-
tribution.
TITLE II—DEPARTMENT OF
ENERGY MANAGEMENT
SEC. 22001. EXTERNAL REGULATION OF DEPARTMENT OF
ENERGY.
(a) DEPARTMENT OF ENERGY REPORT.—Not later
than 18 months after the date of enactment of this Act,
the Secretary shall transmit to the Congress a report on
the assumption by the Nuclear Regulatory Commission of
the Department’s regulatory and enforcement responsibil-
ities with respect to nuclear safety, and the assumption
by the Occupational Safety and Health Administration of
the Department’s regulatory and enforcement responsibil-
ities with respect to occupational safety and health, at any
nonmilitary energy laboratory owned or operated by the
Department. The report shall include—
(1) a detailed transition plan, drafted in coordi-
nation with the Nuclear Regulatory Commission and
455
the Occupational Safety and Health Administration,
for termination of self-regulation authority, includ-
ing the activities to be coordinated with the Nuclear
Regulatory Commission and the Occupational Safety
and Health Administration;
(2) a description of any issues that would re-
quire resolution with the Nuclear Regulatory Com-
mission, the Occupational Safety and Health Admin-
istration, or other external regulators; and
(3) an estimate of—
(A) the annual cost of administering and
implementing external regulation of the nuclear
safety and occupational safety and health re-
sponsibilities at nonmilitary energy laboratories
owned or operated by the Department;
(B) the number of Federal and contractor
employees required to administer and imple-
ment such external regulation; and
(C) the extent and schedule by which the
Department and the staffs at its nonmilitary
energy laboratories would be reduced, and the
anticipated cost savings from that reduction.
(b) GENERAL ACCOUNTING OFFICE REPORTING RE-
QUIREMENT.—The Comptroller General shall provide a re-
port not later than 20 months after the date of enactment
456
of this Act that compares the Department’s transition
plan with the Department’s implementation of nuclear
safety and occupational safety and health responsibilities
under sections 234A and 234C of the Atomic Energy Act
of 1954.
SEC. 22002. IMPROVED COORDINATION AND MANAGEMENT
OF CIVILIAN SCIENCE AND TECHNOLOGY
PROGRAMS.
(a) RECONFIGURATION OF POSITION OF DIRECTOR
OF THE OFFICE OF SCIENCE.—Section 209 of the Depart-
ment of Energy Organization Act (42 U.S.C. 7139) is
amended by—
(1) striking ‘‘a Director’’ and inserting ‘‘an As-
sistant Secretary, in addition to those appointed
under section 203(a),’’; and
(2) striking ‘‘Director’’ and inserting ‘‘Assistant
Secretary’’.
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 5315 of title 5, United States Code, is amend-
ed by—
(A) striking ‘‘Director, Office of Science, De-
partment of Energy.’’; and
(B) striking ‘‘Assistant Secretaries of Energy
(6)’’ and inserting ‘‘Assistant Secretaries of Energy
(7)’’.
457
(2) The table of contents for the Department of En-
ergy Organization Act (42 U.S.C. 7101 note) is
amended—
(A) by striking ‘‘Section 209’’ and inserting
‘‘Sec. 209’’;
(B) by striking ‘‘213.’’ and inserting ‘‘Sec.
213.’’;
(C) by striking ‘‘214.’’ and inserting ‘‘Sec.
214.’’;
(D) by striking ‘‘215.’’ and inserting ‘‘Sec.
215.’’; and
(E) by striking ‘‘216.’’ and inserting ‘‘Sec.
216.’’.
SEC. 22003. REPORT ON EQUAL EMPLOYMENT OPPOR-
TUNITY PRACTICES.
Not later than twelve months after the date of enact-
ment of this Act, and biennially thereafter, the Secretary
shall transmit to Congress a report on the equal employ-
ment opportunity practices at Department of Energy Na-
tional laboratories. Such report shall include—
(1) a thorough review of each laboratory con-
tractor’s equal employment opportunity policies, in-
cluding promotion to management and professional
positions and pay raises;
458
(2) a statistical report on complaints and their
disposition in the laboratories;
(3) a description of how equal employment op-
portunity practices at the laboratories are treated in
the contract and in calculating award fees for each
contractor;
(4) a summary of disciplinary actions and their
disposition by either the Department or the relevant
contractors for each laboratory;
(5) a summary of outreach efforts to attract
women and minorities to the laboratories;
(6) a summary of efforts to retain women and
minorities in the laboratories; and
(7) a summary of collaboration efforts with the
Office of Federal Contract Compliance Programs to
improve equal employment opportunity practices at
the laboratories.
SEC. 22004. SENSE OF CONGRESS.
It is the sense of the Congress that—
(1) the Secretary of Energy should develop and
implement more stringent procurement and inven-
tory controls, including controls on the purchase
card program, to prevent waste, fraud, and abuse of
taxpayer funds by employees and contractors of the
Department of Energy; and
459
(2) the Department’s Inspector General should
continue to closely review purchase card purchases
and other procurement and inventory practices at
the Department.
TITLE III—CLEAN SCHOOL
BUSES
SEC. 23001. ESTABLISHMENT OF PILOT PROGRAM.
(a) ESTABLISHMENT.—The Secretary of Energy, in
consultation with the Administrator of the Environmental
Protection Agency, shall establish a pilot program for
awarding grants on a competitive basis to eligible entities
for the demonstration and commercial application of alter-
native fuel school buses and ultra-low sulfur diesel school
buses.
(b) REQUIREMENTS.—Not later than 3 months after
the date of the enactment of this Act, the Secretary shall
establish and publish in the Federal register grant require-
ments on eligibility for assistance, and on implementation
of the program established under subsection (a), including
certification requirements to ensure compliance with this
title.
(c) SOLICITATION.—Not later than 6 months after
the date of the enactment of this Act, the Secretary shall
solicit proposals for grants under this section.
460
(d) ELIGIBLE RECIPIENTS.—A grant shall be award-
ed under this section only—
(1) to a local or State governmental entity re-
sponsible for providing school bus service to one or
more public school systems or responsible for the
purchase of school buses; or
(2) to a contracting entity that provides school
bus service to one or more public school systems, if
the grant application is submitted jointly with the
school system or systems which the buses will serve.
(e) TYPES OF GRANTS.—
(1) IN
GENERAL.—Grants under this section
shall be for the demonstration and commercial appli-
cation of technologies to facilitate the use of alter-
native fuel school buses and ultra-low sulfur diesel
school buses in lieu of buses manufactured before
model year 1977 and diesel-powered buses manufac-
tured before model year 1991.
(2) NO ECONOMIC BENEFIT.—Other than the
receipt of the grant, a recipient of a grant under this
section may not receive any economic benefit in con-
nection with the receipt of the grant.
(3) PRIORITY OF GRANT APPLICATIONS.—The
Secretary shall give priority to awarding grants to
applicants who can demonstrate the use of alter-
461
native fuel buses and ultra-low sulfur diesel school
buses in lieu of buses manufactured before model
year 1977.
(f) CONDITIONS OF GRANT.—A grant provided under
this section shall include the following conditions:
(1) All buses acquired with funds provided
under the grant shall be operated as part of the
school bus fleet for which the grant was made for a
minimum of 5 years.
(2) Funds provided under the grant may only
be used—
(A) to pay the cost, except as provided in
paragraph (3), of new alternative fuel school
buses or ultra-low sulfur diesel school buses, in-
cluding State taxes and contract fees; and
(B) to provide—
(i) up to 10 percent of the price of the
alternative fuel buses acquired, for nec-
essary alternative fuel infrastructure if the
infrastructure will only be available to the
grant recipient; and
(ii) up to 15 percent of the price of
the alternative fuel buses acquired, for nec-
essary alternative fuel infrastructure if the
462
infrastructure will be available to the grant
recipient and to other bus fleets.
(3) The grant recipient shall be required to pro-
vide at least the lesser of 15 percent of the total cost
of each bus received or $15,000 per bus.
(4) In the case of a grant recipient receiving a
grant to demonstrate ultra-low sulfur diesel school
buses, the grant recipient shall be required to pro-
vide documentation to the satisfaction of the Sec-
retary that diesel fuel containing sulfur at not more
than 15 parts per million is available for carrying
out the purposes of the grant, and a commitment by
the applicant to use such fuel in carrying out the
purposes of the grant.
(g) BUSES.—Funding under a grant made under this
section may be used to demonstrate the use only of new
alternative fuel school buses or ultra-low sulfur diesel
school buses—
(1) with a gross vehicle weight of greater than
14,000 pounds;
(2) that are powered by a heavy duty engine;
(3) that, in the case of alternative fuel school
buses manufactured in model years 2003 through
2006, emit not more than 1.8 grams per brake
horsepower-hour of nonmethane hydrocarbons and
463
oxides of nitrogen and .01 grams per brake horse-
power-hour of particulate matter; and
(4) that, in the case of ultra-low sulfur diesel
school buses, emit not more than—
(A) for buses manufactured in model year
2003, 3.0 grams per brake horsepower-hour of
oxides of nitrogen and .01 grams per brake
horsepower-hour of particulate matter; and
(B) for buses manufactured in model years
2004 through 2006, 2.5 grams per brake horse-
power-hour of nonmethane hydrocarbons and
oxides of nitrogen and .01 grams per brake
horsepower-hour of particulate matter,
except that under no circumstances shall buses be
acquired under this section that emit nonmethane
hydrocarbons, oxides of nitrogen, or particulate mat-
ter at a rate greater than the best performing tech-
nology of the same class of ultra-low sulfur diesel
school buses commercially available at the time the
grant is made.
(h) DEPLOYMENT
AND DISTRIBUTION.—The Sec-
retary shall seek to the maximum extent practicable to
achieve nationwide deployment of alternative fuel school
buses and ultra-low sulfur diesel school buses through the
program under this section, and shall ensure a broad geo-
464
graphic distribution of grant awards, with a goal of no
State receiving more than 10 percent of the grant funding
made available under this section for a fiscal year.
(i) LIMIT ON FUNDING.—The Secretary shall provide
not less than 20 percent and not more than 25 percent
of the grant funding made available under this section for
any fiscal year for the acquisition of ultra-low sulfur diesel
school buses.
(j) REDUCTION
OF SCHOOL BUS IDLING.—Each
local educational agency (as defined in section 9101 of the
Elementary and Secondary Education Act of 1965 (20
U.S.C. 7801)) that receives Federal funds under the Ele-
mentary and Secondary Education Act of 1965 (20 U.S.C.
6301 et seq.) is encouraged to develop a policy, consistent
with the health, safety, and welfare of students and the
proper operation and maintenance of school buses, to re-
duce the incidence of unnecessary school bus idling at
schools when picking up and unloading students.
(k) ANNUAL REPORT.—Not later than January 31
of each year, the Secretary of Energy shall provide a re-
port evaluating implementation of the program under this
title to the Congress. Such report shall include the total
number of grant applications received, the number and
types of alternative fuel buses and ultra-low sulfur diesel
school buses requested in grant applications, a list of
465
grants awarded and the criteria used to select the grant
recipients, certified engine emission levels of all buses pur-
chased under the program, and any other information the
Secretary considers appropriate.
(l) DEFINITIONS.—For purposes of this section—
(1) the term ‘‘alternative fuel school bus’’
means a bus powered substantially by electricity (in-
cluding electricity supplied by a fuel cell), or by liq-
uefied natural gas, compressed natural gas, liquefied
petroleum gas, hydrogen, propane, or methanol or
ethanol at no less than 85 percent by volume;
(2) the term ‘‘idling’’ means operating an en-
gine while remaining stationary for more than ap-
proximately 15 minutes, except that such term does
not apply to routine stoppages associated with traf-
fic movement or congestion; and
(3) the term ‘‘ultra-low sulfur diesel school
bus’’ means a school bus powered by diesel fuel
which contains sulfur at not more than 15 parts per
million.
SEC. 23002. FUEL CELL BUS DEVELOPMENT AND DEM-
ONSTRATION PROGRAM.
(a) ESTABLISHMENT OF PROGRAM.—The Secretary
shall establish a program for entering into cooperative
agreements with private sector fuel cell bus developers for
466
the development of fuel cell-powered school buses, and
subsequently with not less than 2 units of local govern-
ment using natural gas-powered school buses and such
private sector fuel cell bus developers to demonstrate the
use of fuel cell-powered school buses.
(b) COST SHARING.—The non-Federal contribution
for activities funded under this section shall be not less
than—
(1) 20 percent for fuel infrastructure develop-
ment activities; and
(2) 50 percent for demonstration activities and
for development activities not described in paragraph
(1).
(c) FUNDING.—No more than $25,000,000 of the
amounts authorized under section 23004(a) may be used
for carrying out this section for the period encompassing
fiscal years 2004 through 2006.
(d) REPORTS TO CONGRESS.—Not later than 3 years
after the date of the enactment of this Act, and not later
than October 1, 2006, the Secretary shall transmit to the
Congress a report that—
(1) evaluates the process of converting natural
gas infrastructure to accommodate fuel cell-powered
school buses; and
467
(2) assesses the results of the development and
demonstration program under this section.
SEC. 23003. DIESEL RETROFIT PROGRAM.
(a) ESTABLISHMENT.—The Administrator of the En-
vironmental Protection Agency and the Secretary shall es-
tablish a pilot program for awarding grants on a competi-
tive basis to eligible recipients for the demonstration and
commercial application of retrofit technologies for diesel
school buses.
(b) ELIGIBLE RECIPIENTS.—A grant shall be award-
ed under this section only—
(1) to a local or State governmental entity re-
sponsible for providing school bus service to one or
more public school systems; or
(2) to a contracting entity that provides school
bus service to one or more public school systems, if
the grant application is submitted jointly with the
school system or systems which the buses will serve.
(c) CONDITIONS OF GRANT.—A grant provided under
this section may be used only to demonstrate the use of
retrofit emissions-control technology on diesel buses
that—
(1) operate on ultra-low sulfur diesel fuel; and
(2) were manufactured in model year 1991 or
later.
468
(d) VERIFICATION.—Not later than 3 months after
the date of enactment of this Act, the Administrator shall
publish in the Federal Register procedures to verify—
(1) the retrofit emissions-control technology to
be demonstrated; and
(2) that buses on which retrofit emissions-con-
trol technology are to be demonstrated will operate
on diesel fuel containing not more than 15 parts per
million of sulfur.
SEC. 23004. AUTHORIZATION OF APPROPRIATIONS.
(a) SCHOOL BUS GRANTS.—There are authorized to
be appropriated to the Secretary for carrying out this title,
to remain available until expended—
(1) $90,000,000 for fiscal year 2004;
(2) $100,000,000 for fiscal year 2005; and
(3) $110,000,000 for fiscal year 2006.
(b) RETROFIT GRANTS.—There are authorized to be
appropriated to the Administrator of the Environmental
Protection Agency and the Secretary such sums as may
be necessary for carrying out section 23003.
DIVISION C—RESOURCES
TITLE I—INDIAN ENERGY
SEC. 30101. INDIAN ENERGY.
Title XXVI of the Energy Policy Act of 1992 (25
U.S.C. 3501 et seq.) is amended to read as follows:
469
‘‘TITLE XXVI—INDIAN ENERGY
‘‘SEC. 2601. DEFINITIONS.
‘‘In this title:
‘‘(1) INDIAN.—The term ‘Indian’ means an in-
dividual member of an Indian tribe who owns land
or an interest in land, the title to which land—
‘‘(A) is held in trust by the United States;
or
‘‘(B) is subject to a restriction against
alienation imposed by the United States.
‘‘(2) INDIAN
LAND.—The term ‘Indian land’
means—
‘‘(A) any land located within the bound-
aries of an Indian reservation, pueblo, or
rancheria; or
‘‘(B) any land not located within the
boundaries of an Indian reservation, pueblo, or
rancheria, the title to which is held—
‘‘(i) in trust by the United States for
the benefit of an Indian tribe;
‘‘(ii) by an Indian tribe, subject to re-
striction by the United States against
alienation; or
‘‘(iii) by a dependent Indian commu-
nity.
470
‘‘(3) INDIAN RESERVATION.—The term ‘Indian
reservation’ includes—
‘‘(A) an Indian reservation in existence as
of the date of the enactment of this paragraph;
‘‘(B) a public domain Indian allotment;
‘‘(C) a former reservation in the State of
Oklahoma; and
‘‘(D) a dependent Indian community lo-
cated within the borders of the United States,
regardless 
of 
whether 
the 
community 
is
located—
‘‘(i) on original or acquired territory
of the community; or
‘‘(ii) within or outside the boundaries
of any particular State.
‘‘(4) INDIAN TRIBE.—The term ‘Indian tribe’
has the meaning given that term in section 4 of the
Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450b), except the term, for the pur-
poses of this title, shall not include any Native Cor-
poration.
‘‘(5) NATIVE CORPORATION.—The term ‘Native
Corporation’ has the meaning given the term in sec-
tion 3 of the Alaska Native Claims Settlement Act
(43 U.S.C. 1602).
471
‘‘(6) SECRETARY.—The term ‘Secretary’ means
the Secretary of the Interior.
‘‘(7) TRIBAL
CONSORTIUM.—The term ‘tribal
consortium’ means an organization that consists of
at least 3 entities, at least 1 of which is an Indian
tribe.
‘‘SEC. 2602. INDIAN TRIBAL RESOURCE REGULATION.
‘‘To the maximum extent practicable, the Secretary
and the Secretary of Energy shall make available to In-
dian tribes, tribal consortia, and Native Corporations sci-
entific and technical data for use in the development and
management of energy resources on Indian land and on
land conveyed to a Native Corporation.
‘‘SEC. 2603. LEASES, BUSINESS AGREEMENTS, AND RIGHTS-
OF-WAY INVOLVING ENERGY DEVELOPMENT
OR TRANSMISSION.
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law—
‘‘(1) an Indian or Indian tribe may enter into
a lease or business agreement for the purpose of en-
ergy development, including a lease or business
agreement for—
‘‘(A) exploration for, extraction of, proc-
essing of, or other development of energy re-
sources; and
472
‘‘(B) construction or operation of—
‘‘(i) an electric generation, trans-
mission, or distribution facility located on
Indian land; or
‘‘(ii) a facility to process or refine en-
ergy resources developed on Indian land;
and
‘‘(2) a lease or business agreement described in
paragraph (1) shall not require the approval of the
Secretary if—
‘‘(A) the lease or business agreement is ex-
ecuted under tribal regulations approved by the
Secretary under subsection (e); and
‘‘(B) the term of the lease or business
agreement does not exceed 30 years.
‘‘(b) RIGHTS-OF-WAY FOR PIPELINES OR ELECTRIC
TRANSMISSION
OR DISTRIBUTION LINES.—An Indian
tribe may grant a right-of-way over the Indian land of the
Indian tribe for a pipeline or an electric transmission or
distribution line without specific approval by the Secretary
if—
‘‘(1) the right-of-way is executed under and
complies with tribal regulations approved by the Sec-
retary under subsection (e);
473
‘‘(2) the term of the right-of-way does not ex-
ceed 30 years; and
‘‘(3) the pipeline or electric transmission or dis-
tribution line serves—
‘‘(A) an electric generation, transmission,
or distribution facility located on Indian land;
or
‘‘(B) a facility located on Indian land that
processes or refines renewable or nonrenewable
energy resources developed on Indian land.
‘‘(c) RENEWALS.—A lease or business agreement en-
tered into or a right-of-way granted by an Indian tribe
under this section may be renewed at the discretion of the
Indian tribe, in accordance with this section.
‘‘(d) VALIDITY.—No lease, business agreement, or
right-of-way under this section shall be valid unless the
lease, business agreement, or right-of-way is authorized in
accordance with tribal regulations approved by the Sec-
retary under subsection (e).
‘‘(e) TRIBAL REGULATORY REQUIREMENTS.—
‘‘(1) IN GENERAL.—An Indian tribe may sub-
mit to the Secretary for approval tribal regulations
governing leases, business agreements, and rights-of-
way under this section.
‘‘(2) APPROVAL OR DISAPPROVAL.—
474
‘‘(A) IN
GENERAL.—Not later than 120
days after the date on which the Secretary re-
ceives tribal regulations submitted by an Indian
tribe under paragraph (1) (or such later date as
may be agreed to by the Secretary and the In-
dian tribe), the Secretary shall approve or dis-
approve the regulations.
‘‘(B) CONDITIONS
FOR
APPROVAL.—The
Secretary shall approve tribal regulations sub-
mitted under paragraph (1) only if the regula-
tions include provisions that, with respect to a
lease, business agreement, or right-of-way
under this section—
‘‘(i) ensure the acquisition of nec-
essary information from the applicant for
the lease, business agreement, or right-of-
way;
‘‘(ii) address the term of the lease or
business agreement or the term of convey-
ance of the right-of-way;
‘‘(iii) address amendments and renew-
als;
‘‘(iv) address consideration for the
lease, business agreement, or right-of-way;
475
‘‘(v) address technical or other rel-
evant requirements;
‘‘(vi) establish requirements for envi-
ronmental review in accordance with sub-
paragraph (C);
‘‘(vii) ensure compliance with all ap-
plicable environmental laws;
‘‘(viii) identify final approval author-
ity;
‘‘(ix) provide for public notification of
final approvals; and
‘‘(x) establish a process for consulta-
tion with any affected States concerning
potential off-reservation impacts associated
with the lease, business agreement, or
right-of-way.
‘‘(C) 
ENVIRONMENTAL
REVIEW
PROC-
ESS.—Tribal regulations submitted under para-
graph (1) shall establish, and include provisions
to ensure compliance with, an environmental re-
view process that, with respect to a lease, busi-
ness agreement, or right-of-way under this sec-
tion, provides for—
476
‘‘(i) the identification and evaluation
of all significant environmental impacts (as
compared with a no-action alternative);
‘‘(ii) the identification of proposed
mitigation;
‘‘(iii) a process for ensuring that the
public is informed of and has an oppor-
tunity to comment on any proposed lease,
business agreement, or right-of-way before
tribal approval of the lease, business agree-
ment, or right-of-way (or any amendment
to or renewal of a lease, business agree-
ment, or right-of-way); and
‘‘(iv) sufficient administrative support
and technical capability to carry out the
environmental review process.
‘‘(3) PUBLIC
PARTICIPATION.—The Secretary
may provide notice and opportunity for public com-
ment on tribal regulations submitted under para-
graph (1).
‘‘(4) DISAPPROVAL.—If the Secretary dis-
approves tribal regulations submitted by an Indian
tribe under paragraph (1), the Secretary shall—
‘‘(A) notify the Indian tribe in writing of
the basis for the disapproval;
477
‘‘(B) identify what changes or other ac-
tions are required to address the concerns of
the Secretary; and
‘‘(C) provide the Indian tribe with an op-
portunity to revise and resubmit the regula-
tions.
‘‘(5) EXECUTION
OF
LEASE
OR
BUSINESS
AGREEMENT OR GRANTING OF RIGHT-OF-WAY.—If
an Indian tribe executes a lease or business agree-
ment or grants a right-of-way in accordance with
tribal regulations approved under this subsection,
the Indian tribe shall provide to the Secretary—
‘‘(A) a copy of the lease, business agree-
ment, or right-of-way document (including all
amendments to and renewals of the document);
and
‘‘(B) in the case of tribal regulations or a
lease, business agreement, or right-of-way that
permits payment to be made directly to the In-
dian tribe, documentation of those payments
sufficient to enable the Secretary to discharge
the trust responsibility of the United States as
appropriate under applicable law.
‘‘(6) LIABILITY.—The United States shall not
be liable for any loss or injury sustained by any
478
party (including an Indian tribe or any member of
an Indian tribe) to a lease, business agreement, or
right-of-way executed in accordance with tribal regu-
lations approved under this subsection.
‘‘(7) COMPLIANCE REVIEW.—
‘‘(A) IN
GENERAL.—After exhaustion of
tribal remedies, any person may submit to the
Secretary, in a timely manner, a petition to re-
view compliance of an Indian tribe with tribal
regulations of the Indian tribe approved under
this subsection.
‘‘(B) ACTION BY SECRETARY.—The Sec-
retary shall—
‘‘(i) not later than 60 days after the
date on which the Secretary receives a pe-
tition under subparagraph (A), review
compliance of an Indian tribe described in
subparagraph (A); and
‘‘(ii) on completion of the review, if
the Secretary determines that an Indian
tribe is not in compliance with tribal regu-
lations approved under this subsection,
take such action as is necessary to compel
compliance, including—
479
‘‘(I)(aa) rescinding a lease, busi-
ness agreement, or right-of-way under
this section; or
‘‘(bb) suspending a lease, busi-
ness agreement, or right-of-way under
this section until an Indian tribe is in
compliance with tribal regulations;
and
‘‘(II) rescinding approval of the
tribal regulations and reassuming the
responsibility for approval of leases,
business agreements, or rights-of-way
associated with an energy pipeline or
distribution line described in sub-
section (b).
‘‘(C) COMPLIANCE.—If the Secretary seeks
to compel compliance of an Indian tribe with
tribal regulations under subparagraph (B)(ii),
the Secretary shall—
‘‘(i) make a written determination
that describes the manner in which the
tribal regulations have been violated;
‘‘(ii) provide the Indian tribe with a
written notice of the violation together
with the written determination; and
480
‘‘(iii) before taking any action de-
scribed in subparagraph (B)(ii) or seeking
any other remedy, provide the Indian tribe
with a hearing and a reasonable oppor-
tunity to attain compliance with the tribal
regulations.
‘‘(D) APPEAL.—An Indian tribe described
in subparagraph (C) shall retain all rights to
appeal as provided in regulations promulgated
by the Secretary.
‘‘(f) AGREEMENTS.—
‘‘(1) IN GENERAL.—Any agreement by an In-
dian tribe that relates to the development of an elec-
tric generation, transmission, or distribution facility,
or a facility to process or refine renewable or non-
renewable energy resources developed on Indian
land, shall not require the specific approval of the
Secretary under section 2103 of the Revised Stat-
utes (25 U.S.C. 81) if the activity that is the subject
of the agreement is carried out in accordance with
this section.
‘‘(2) LIABILITY.—The United States shall not
be liable for any loss or injury sustained by any per-
son (including an Indian tribe or any member of an
Indian tribe) resulting from an action taken in per-
481
formance of an agreement entered into under this
subsection.
‘‘(g) NO EFFECT ON OTHER LAW.—Nothing in this
section affects the application of any provision of—
‘‘(1) the Act of May 11, 1938 (commonly
known as the Indian Mineral Leasing Act of 1938;
25 U.S.C. 396a et seq.);
‘‘(2) the Indian Mineral Development Act of
1982 (25 U.S.C. 2101 et seq.);
‘‘(3) the Surface Mining Control and Reclama-
tion Act of 1977 (30 U.S.C. 1201 et seq.); or
‘‘(4) any Federal environmental law.
‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated such sums as are nec-
essary to carry out this section, to remain available until
expended.’’.
TITLE II—OIL AND GAS
SEC. 30201. PROGRAM ON OIL AND GAS ROYALTIES IN-
KIND.
(a) APPLICABILITY OF SECTION.—Notwithstanding
any other provision of law, the provisions of this section
shall apply to all royalty in-kind accepted by the Secretary
of the Interior on or after the date of the enactment of
this Act under any Federal oil or gas lease or permit under
section 36 of the Mineral Leasing Act (30 U.S.C. 192),
482
section 27 of the Outer Continental Shelf Lands Act (43
U.S.C. 1353), or any other Federal law governing leasing
of Federal lands for oil and gas development.
(b) TERMS AND CONDITIONS.—All royalty accruing
to the United States shall, on the demand of the Secretary
of the Interior, be paid in oil or gas. If the Secretary of
the Interior makes such a demand, the following provi-
sions apply to such payment:
(1) Delivery by, or on behalf of, the lessee of
the royalty amount and quality due under the lease
satisfies the lessee’s royalty obligation for the
amount delivered, except that transportation and
processing reimbursements paid to, or deductions
claimed by, the lessee shall be subject to review and
audit.
(2)(A) Royalty production shall be placed in
marketable condition by the lessee at no cost to the
United States.
(B) In this paragraph, the term ‘‘in marketable
condition’’ means sufficiently free from impurities
and otherwise in a condition that it will be accepted
by a purchaser under a sales contract typical of the
field or area in which the royalty production was
produced.
(3) The Secretary of the Interior may—
483
(A) sell or otherwise dispose of any royalty
production taken in-kind (other than oil or gas
transferred under section 27(a)(3) of the Outer
Continental Shelf Lands Act (43 U.S.C.
1353(a)(3)) for not less than the market price;
and
(B) transport or process (or both) any roy-
alty production taken in-kind.
(4) The Secretary of the Interior may, notwith-
standing section 3302 of title 31, United States
Code, retain and use a portion of the revenues from
the sale of oil and gas royalties taken in-kind that
otherwise would be deposited to miscellaneous re-
ceipts, without regard to fiscal year limitation, or
may use royalty production, to pay the cost of—
(A) transporting the royalty production;
(B) processing the royalty production;
(C) disposing of the royalty production; or
(D) any combination of transporting, proc-
essing, and disposing of the royalty production.
(5) The Secretary of the Interior may use a
portion of the revenues from the sale of oil royalties
taken in-kind, without fiscal year limitation, to pay
transportation costs, salaries, and other administra-
484
tive costs directly related to filling the Strategic Pe-
troleum Reserve.
(c) REIMBURSEMENT OF COST.—If the lessee, pursu-
ant to an agreement with the United States or as provided
in the lease, processes the royalty gas or delivers the roy-
alty oil or gas at a point not on or adjacent to the lease
area, the Secretary of the Interior shall—
(1) reimburse the lessee for the reasonable costs
of transportation (not including gathering) from the
lease to the point of delivery or for processing costs;
or
(2) at the discretion of the Secretary of the In-
terior, allow the lessee to deduct such transportation
or processing costs in reporting and paying royalties
in value for other Federal oil and gas leases.
(d) BENEFIT TO THE UNITED STATES REQUIRED.—
The Secretary of the Interior may receive oil or gas royal-
ties in-kind only if the Secretary determines that receiving
such royalties provides benefits to the United States great-
er than or equal to those likely to have been received had
royalties been taken in value.
(e) REPORT TO CONGRESS.—By June 30, 2004, the
Secretary of the Interior shall provide a report to the Con-
gress that describes actions taken to develop an organiza-
tion, business processes, and automated systems to sup-
485
port a full royalty in-kind capability to be used in tandem
with the royalty in value approach to managing Federal
oil and gas revenues.
(f) DEDUCTION OF EXPENSES.—
(1) IN
GENERAL.—Before making payments
under section 35 of the Mineral Leasing Act (30
U.S.C. 191) or section 8(g) of the Outer Continental
Shelf Lands Act (43 U.S.C. 1337(g)) of revenues
derived from the sale of royalty production taken in-
kind from a lease, the Secretary of the Interior shall
deduct amounts paid or deducted under subsections
(b)(4) and (c), and shall deposit such amounts to
miscellaneous receipts.
(2) ACCOUNTING
FOR
DEDUCTIONS.—If the
Secretary of the Interior allows the lessee to deduct
transportation or processing costs under subsection
(c), the Secretary may not reduce any payments to
recipients of revenues derived from any other Fed-
eral oil and gas lease as a consequence of that de-
duction.
(g) CONSULTATION WITH STATES.—The Secretary
of the Interior—
(1) shall consult with a State before conducting
a royalty in-kind program under this title within the
State, and may delegate management of any portion
486
of the Federal royalty in-kind program to such State
except as otherwise prohibited by Federal law; and
(2) shall consult annually with any State from
which Federal oil or gas royalty is being taken in-
kind to ensure to the maximum extent practicable
that the royalty in-kind program provides revenues
to the State greater than or equal to those likely to
have been received had royalties been taken in-value.
(h) PROVISIONS FOR SMALL REFINERIES.—
(1) PREFERENCE.—If the Secretary of the In-
terior determines that sufficient supplies of crude oil
are not available in the open market to refineries not
having their own source of supply for crude oil, the
Secretary may grant preference to such refineries in
the sale of any royalty oil accruing or reserved to the
United States under Federal oil and gas leases
issued under any mineral leasing law, for processing
or use in such refineries at private sale at not less
than the market price.
(2) PRORATION
AMONG
REFINERIES
IN
PRO-
DUCTION AREA.—In disposing of oil under this sub-
section, the Secretary of the Interior may, at the
discretion of the Secretary, prorate such oil among
such refineries in the area in which the oil is pro-
duced.
487
(i) DISPOSITION TO FEDERAL AGENCIES.—
(1) ONSHORE ROYALTY.—Any royalty oil or gas
taken by the Secretary of the Interior in-kind from
onshore oil and gas leases may be sold at not less
than the market price to any department or agency
of the United States.
(2) OFFSHORE ROYALTY.—Any royalty oil or
gas taken in-kind from Federal oil and gas leases on
the outer Continental Shelf may be disposed of only
under section 27 of the Outer Continental Shelf
Lands Act (43 U.S.C. 1353).
(j) PREFERENCE FOR FEDERAL LOW-INCOME EN-
ERGY ASSISTANCE PROGRAMS.—In disposing of royalty oil
or gas taken in-kind under this section, the Secretary may
grant a preference to any person, including any State or
Federal agency, for the purpose of providing additional re-
sources to any Federal low-income energy assistance pro-
gram.
SEC. 30202. CLARIFICATION OF FAIR MARKET RENTAL
VALUE 
DETERMINATIONS 
FOR 
PUBLIC
LANDS AND FOREST SERVICE RIGHTS-OF-
WAY.
(a) LINEAR
RIGHTS-OF-WAY
UNDER
FEDERAL
LAND POLICY AND MANAGEMENT ACT.—Section 504 of
the Federal Land Policy and Management Act of 1976
488
(43 U.S.C. 1764) is amended by adding at the end the
following:
‘‘(k) DETERMINATION OF FAIR MARKET VALUE OF
LINEAR
RIGHTS-OF-WAY.—(1) 
Effective 
upon 
the
issuance of the rules required by paragraph (2), for pur-
poses of subsection (g), the Secretary concerned shall de-
termine the fair market rental for the use of land encum-
bered by a linear right-of-way granted, issued, or renewed
under this title using the valuation method described in
paragraphs (2), (3), and (4).
‘‘(2) Not later than 1 year after the date of enact-
ment of this subsection, and in accordance with subsection
(k), the Secretary of the Interior shall amend section
2803.1–2 of title 43, Code of Federal Regulations, as in
effect on the date of enactment of this subsection, to revise
the per acre rental fee zone value schedule by State, coun-
ty, and type of linear right-of-way use to reflect current
values of land in each zone. The Secretary of Agriculture
shall make the same revisions for linear rights-of-way
granted, issued, or renewed under this title on National
Forest System lands.
‘‘(3) The Secretary concerned shall update annually
the schedule revised under paragraph (2) by multiplying
the current year’s rental per acre by the annual change,
second quarter to the second quarter (June 30 to June
489
30) in the Gross National Product Implicit Price Deflator
Index published in the Survey of Current Business of the
Department of Commerce, Bureau of Economic Analysis.
‘‘(4) Whenever the cumulative change in the index
referred to in paragraph (3) exceeds 30 percent, or the
change in the 3-year average of the 1-year Treasury inter-
est rate used to determine per acre rental fee zone values
exceeds plus or minus 50 percent, the Secretary concerned
shall conduct a review of the zones and rental per acre
figures to determine whether the value of Federal land has
differed sufficiently from the index referred to in para-
graph (3) to warrant a revision in the base zones and rent-
al per acre figures. If, as a result of the review, the Sec-
retary concerned determines that such a revision is war-
ranted, the Secretary concerned shall revise the base zones
and rental per acre figures accordingly.’’.
(b) RIGHTS-OF-WAY
UNDER
MINERAL
LEASING
ACT.—Section 28(l) of the Mineral Leasing Act (30
U.S.C. 185(l)) is amended by inserting before the period
at the end the following: ‘‘using the valuation method de-
scribed in section 2803.1–2 of title 43, Code of Federal
Regulations, as revised pursuant to section 504(k) of the
Federal Land Policy and Management Act of 1976 (43
U.S.C. 1764(k))’’.
490
SEC. 30203. USGS ESTIMATES OF OIL AND GAS RESOURCES
UNDERLYING ONSHORE FEDERAL LANDS.
Section 604(a) of the Energy Act of 2000 (42 U.S.C.
6217) is amended—
(1) in subsection (a)(1)—
(A) by striking ‘‘reserve’’; and
(B) by striking ‘‘and’’ after the semicolon;
(2) by striking subsection (a)(2) and inserting
the following:
‘‘(2) the extent and nature of any restrictions
or impediments to the development of such re-
sources, including—
‘‘(A) impediments to the timely granting of
leases; and
‘‘(B) post-lease restrictions, impediments,
or delays on development, involving conditions
of approval, applications for permits to drill, or
processing of environmental permits; and
‘‘(C) permits or restrictions associated with
transporting the resources for entry into com-
merce; and
‘‘(3) the amount of resources not produced or
introduced into commerce because of those restric-
tions.’’; and
(3) in subsection (b)—
491
(A) by striking ‘‘reserve’’ and inserting
‘‘resource’’; and
(B) by striking ‘‘publically’’ and inserting
‘‘publicly’’.
SEC. 30204. ROYALTY INCENTIVES FOR CERTAIN OFF-
SHORE AREAS.
(a) OUTER CONTINENTAL SHELF SHALLOW WATER
DEEP GAS ROYALTY RELIEF.—
(1) SHORT
TITLE.—This subsection may be
cited as the ‘‘Outer Continental Shelf Shallow Water
Deep Gas Royalty Relief Act’’.
(2) PURPOSES.—The purposes of this sub-
section are the following:
(A) To accelerate natural gas exploration,
development, and production from wells drilled
to deep depths on existing shallow water lease
tracts on the Outer Continental Shelf.
(B) To provide royalty incentives for the
production of natural gas from such tracts.
(C) To provide royalty incentives for devel-
opment of new technologies and the exploration
and development of the new frontier of deep
drilling on the Outer Continental Shelf.
492
(3) ROYALTY
INCENTIVES
UNDER
EXISTING
LEASES FOR PRODUCTION OF DEEP GAS IN SHAL-
LOW WATER IN THE GULF OF MEXICO.—
(A) SUSPENSION OF ROYALTIES.—
(i) IN
GENERAL.—The Secretary of
the Interior shall grant royalty relief for
natural gas produced under leases issued
under the Outer Continental Shelf Lands
Act (43 U.S.C. 1301 et seq.) prior to Jan-
uary 1, 2001, from deep wells on oil and
gas lease tracts in shallow waters of the
Gulf of Mexico located wholly west of 87
degrees, 30 minutes west longitude.
(ii) AMOUNT OF RELIEF.—The Sec-
retary shall grant royalty relief to eligible
leases in the following amounts:
(I) A suspension volume of at
least 15 billion cubic feet of natural
gas produced from a successful deep
well with a total vertical depth of
15,000 feet to 17,999 feet.
(II) A suspension volume of at
least 25 billion cubic feet of natural
gas produced from a successful deep
493
well with a total vertical depth of
18,000 feet to 19,999 feet.
(III) A suspension volume of at
least 35 billion cubic feet of natural
gas produced from any ultra deep
well.
(IV) A suspension volume of at
least 5 billion cubic feet of natural gas
per well for up to 2 unsuccessful wells
drilled to a depth of at least 18,000
feet on a lease tract that subsequently
produces natural gas from a success-
ful deep well.
(iii) 
LIMITATION.—The 
Secretary
shall not grant the royalty incentives out-
lined in this subparagraph if the average
annual NYMEX natural gas price exceeds
for one full calendar year the threshold
price of $5 per million Btu, adjusted from
the year 2000 for inflation.
(B) DEFINITIONS.—For purposes of this
paragraph:
(i) The term ‘‘deep well’’ means a well
drilled with a perforated interval, the top
of which is at least 15,000 feet true
494
vertical depth below the datum at mean
sea level.
(ii) The term ‘‘eligible lease’’ means a
lease that—
(I) was issued in a lease sale held
before January 1, 2001;
(II) is for a tract located in the
Gulf of Mexico entirely in water
depths less than 200 meters on a
block wholly west of 87 degrees, 30
minutes west longitude; and
(III) is for a tract that has not
produced gas or oil from a well that
commenced drilling before March 26,
2003, with a completion 15,000 feet
true vertical depth below the datum at
mean sea level or deeper.
(iii) The term ‘‘shallow water’’ means
water less than 200 meters deep.
(iv) The term ‘‘ultra deep well’’ means
a well drilled with a perforated interval,
the top of which is at least 20,000 feet
true vertical depth below the datum at
mean sea level.
495
(4) SUNSET.—This subsection shall have no
force or effect after the end of the 5-year period be-
ginning on the date of the enactment of this Act.
(b) DEEP WATER AREAS.—Section 8(a) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1337(a)) is
amended by adding at the end the following:
‘‘(9)(A) For all tracts located in water depths of
greater than 400 meters in the Western and Central Plan-
ning Area of the Gulf of Mexico, including that portion
of the Eastern Planning Area of the Gulf of Mexico en-
compassing whole lease blocks lying west of 87 degrees,
30 minutes West longitude, and for all tracts in a frontier
area offshore Alaska, any oil or gas lease sale under this
Act occurring after the date of the enactment of this para-
graph and before July 1, 2007, shall use the bidding sys-
tem authorized in paragraph (1)(H), except that the sus-
pension of royalties shall be set at a volume of not less
than the following:
‘‘(i) 5 million barrels of oil equivalent for each
lease in water depths of 400 to 800 meters.
‘‘(ii) 9 million barrels of oil equivalent for each
lease in water depths of 800 to 1,600 meters.
‘‘(iii) 12 million barrels of oil equivalent for
each lease in water depths greater than 1,600 me-
ters.
496
‘‘(B) For purposes of this paragraph, the term ‘fron-
tier area offshore Alaska’ includes, at a minimum, those
areas offshore Alaska with seasonal ice, long distances to
existing pipelines and ports, or a lack of production infra-
structure.’’.
(c) APPLICATION OF OTHER EXISTING AUTHORITY
TO OFFSHORE ALASKA.—Section 8(a)(3)(B) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)(B))
is amended—
(1) by striking ‘‘and the portion’’ and inserting
‘‘, the portion’’; and
(2) by inserting after ‘‘longitude,’’ the fol-
lowing: ‘‘and in the planning areas offshore Alas-
ka,’’.
(d) RELATIONSHIP TO EXISTING AUTHORITY.—Ex-
cept as expressly provided in this section, nothing in this
section is intended to limit the authority of the Secretary
of the Interior under the Outer Continental Shelf Lands
Act (43 U.S.C. 1331 et seq.) to provide royalty suspen-
sion.
(e) SAVINGS CLAUSE.—Nothing in this section shall
be construed to affect any offshore preleasing, leasing, or
development moratorium, including any moratorium appli-
cable to the Eastern Planning Area of the Gulf of Mexico
located off the Gulf Coast of Florida.
497
SEC. 30205. MARGINAL PROPERTY PRODUCTION INCEN-
TIVES.
(a) PURPOSE.—The purpose of this section is to pro-
vide to independent producers incentives for extended pro-
duction from Federal oil and gas leases that are still pro-
ducible but approaching abandonment due to economic
factors.
(b) MARGINAL PROPERTY DEFINED.—
(1) IN GENERAL.—Until such time as the Sec-
retary of the Interior promulgates rules under sub-
section (f) that prescribe a different definition, for
purposes of the royalty relief granted under this sec-
tion the term ‘‘marginal property’’ means an on-
shore unit, communitization agreement, or lease not
within a unit or communitization agreement, that
produces on average the combined equivalent of less
than 15 barrels of oil per well per day or 90 million
British thermal units of gas per well per day.
(2) CALCULATION OF AVERAGE PER WELL PRO-
DUCTION.—In calculating the average per well pro-
duction under paragraph (1), the lessee and the Sec-
retary shall—
(A) include those wells that produce more
than half the days in the three most recent pro-
duction months; and
498
(B) calculate the average over the three
most recent production months.
(c) CONDITIONS
FOR
REDUCTION
OF
ROYALTY
RATE.—Until such time as the Secretary of the Interior
promulgates rules under subsection (f) that prescribe dif-
ferent thresholds or standards—
(1) the Secretary shall, upon request by the op-
erator of a marginal property who is an independent
producer, reduce the royalty rate on oil production
from the marginal property as prescribed in sub-
section (d) when the spot price of West Texas Inter-
mediate crude oil at Cushing, Oklahoma, is, on aver-
age, less than $15 per barrel for 90 consecutive
trading days; and
(2) the Secretary shall, upon request by the op-
erator of a marginal property who is an independent
producer, reduce the royalty rate on gas production
from the marginal property to the rate prescribed in
subsection (d) when the spot price of natural gas de-
livered at Henry Hub, Louisiana, is, on average, less
than $2 per million British thermal units for 90 con-
secutive trading days.
(d) REDUCED ROYALTY RATE.—
(1) IN
GENERAL.—The reduced royalty rate
under this subsection shall be the lesser of—
499
(A) 5 percent; or
(B) the applicable rate under any other
statutory or regulatory royalty relief provision
that applies to the affected production.
(2) EFFECTIVE
DATE.—The reduced royalty
rate under this subsection shall be effective on the
first day of the production month following the date
on which the applicable price standard prescribed in
subsection (c) is met.
(e) TERMINATION OF REDUCED ROYALTY RATE.—
A royalty rate prescribed in subsection (d)(1) shall
terminate—
(1) for oil production from a marginal property,
on the first day of the production month following
the date on which—
(A) the spot price of West Texas Inter-
mediate crude oil at Cushing, Oklahoma, on av-
erage, exceeds $15 per barrel for 90 consecutive
trading days, or
(B) the property no longer qualifies as a
marginal property under subsection (b); and
(2) for gas production from a marginal prop-
erty, on the first day of the production month fol-
lowing the date on which—
500
(A) the spot price of natural gas delivered
at Henry Hub, Louisiana, on average, exceeds
$2 per million British thermal units for 90 con-
secutive trading days, or
(B) the property no longer qualifies as a
marginal property under subsection (b).
(f) RULES PRESCRIBING DIFFERENT RELIEF.—
(1) IN GENERAL.—The Secretary of the Inte-
rior, after consultation with the Secretary of Energy,
may by rule prescribe different parameters, stand-
ards, and requirements for, and a different degree or
extent of, royalty relief for marginal properties in
lieu of those prescribed in subsections (b) through
(d).
(2) MARGINAL PROPERTIES.—The Secretary of
the Interior, after consultation with the Secretary of
Energy, and within 1 year after the date of enact-
ment of this Act, shall—
(A) by rule prescribe standards and re-
quirements for, and the extent of royalty relief
for, marginal properties for oil and gas leases
on the outer Continental Shelf; and
(B) by rule define what constitutes a mar-
ginal property on the outer Continental Shelf
for purposes of this section.
501
(3) CONSIDERATIONS.—In promulgating rules
under this subsection, the Secretary of the Interior
may consider—
(A) oil and gas prices and market trends;
(B) production costs;
(C) abandonment costs;
(D) Federal and State tax provisions and
their effects on production economics;
(E) other royalty relief programs;
(F) regional differences in average well-
head prices;
(G) national energy security issues; and
(H) other relevant matters.
(g) SAVINGS PROVISION.—Nothing in this section
shall prevent a lessee from receiving royalty relief or a roy-
alty reduction pursuant to any other law or regulation that
provides more relief than the amounts provided by this
section.
(h) INDEPENDENT PRODUCER DEFINED.—In this
section the term ‘‘independent producer’’ means a person
who is not an integrated oil company, as that term is de-
fined in section 219(b)(4) of the Internal Revenue Code
of 1986 (26 U.S.C. 291(b)(4)).
502
SEC. 30206. FEDERAL ONSHORE OIL AND GAS LEASING AND
PERMITTING PRACTICES.
(a) REVIEW OF ONSHORE OIL AND GAS LEASING
PRACTICES.—The Secretary of the Interior, in cooperation
with the Secretary of Agriculture with respect to National
Forest System lands under the jurisdiction of the Depart-
ment of Agriculture, shall perform an internal review of
Federal onshore oil and gas leasing and permitting prac-
tices. The review shall include the following:
(1) The process by which Federal land man-
agers accept or reject an offer to lease, including the
timeframes in which such offers are acted upon, and
any recommendations for improving and expediting
the process.
(2) The process for considering applications for
permits to drill, including the timeframes in which
such applications are considered, and any rec-
ommendations for improving and expediting the
process.
(3) The process for considering surface use
plans of operation, including the timeframes in
which such plans are considered, and any rec-
ommendations for improving and expediting the
process.
(4) The process for administrative appeal of de-
cisions or orders of officers or employees of the Bu-
503
reau of Land Management with respect to a Federal
oil or gas lease, including the timeframes in which
such appeals are heard and decided, and any rec-
ommendations for improving and expediting the
process.
(5) The process by which Federal land man-
agers identify stipulations to address site-specific
concerns and conditions, including those relating to
the environment and resource use conflicts, whether
stipulations are effective in addressing resource val-
ues, and any recommendations for expediting and
improving the identification and effectiveness of stip-
ulations.
(6) The process by which the Federal land
management agencies coordinate planning and anal-
ysis with planning of Federal, State, and local agen-
cies having jurisdiction over adjacent areas and
other land uses, and any recommendations for im-
proving and expediting the process.
(7) The documentation provided to lease appli-
cants and lessees with respect to determinations to
reject lease applications or to require modification of
proposed surface use plans of operation and rec-
ommendations regarding improvement of such docu-
504
mentation to more clearly set forth the basis for the
decision.
(b) REPORT.—The Secretaries shall report to the
Committee on Resources of the House of Representatives
and to the Committee on Energy and Natural Resources
of the Senate no later than 1 year after the date of the
enactment of this Act, summarizing the findings of their
respective reviews undertaken pursuant to this section and
the actions they have taken or plan to take to improve
the Federal onshore oil and gas leasing program.
SEC. 30207. MANAGEMENT OF FEDERAL OIL AND GAS LEAS-
ING PROGRAMS.
(a) TIMELY ACTION ON LEASES AND PERMITS.—To
ensure timely action on oil and gas leases and applications
for permits to drill on lands otherwise available for leasing,
the Secretary of the Interior shall—
(1) ensure expeditious compliance with the re-
quirements of section 102(2)(C) of the National En-
vironmental Policy Act of 1969 (42 U.S.C.
4332(2)(C));
(2) improve consultation and coordination with
the States and the public; and
(3) improve the collection, storage, and retrieval
of information related to such leasing activities.
(b) BEST MANAGEMENT PRACTICES.—
505
(1) IN GENERAL.—Within 18 months after the
date of enactment of this Act, the Secretary of the
Interior shall develop and implement best manage-
ment practices to improve the administration of the
onshore oil and gas leasing program pursuant to the
Mineral Leasing Act (30 U.S.C. 181, et seq.) and
ensure timely action on oil and gas leases and appli-
cations for permits to drill on lands otherwise avail-
able for leasing.
(2) CONSIDERATION AND CONSULTATION.—In
developing such best management practices the Sec-
retary shall consider the recommendations resulting
from the review under section 30206.
(3) REGULATIONS.—Within 180 days after the
development of best management practices under
paragraph (1), the Secretary shall publish for public
comment proposed regulations that set forth specific
timeframes for processing leases and applications in
accordance with those practices, including deadlines
for—
(A) approving or disapproving—
(i) resource management plans and
related documents;
(ii) lease applications;
506
(iii) applications for permits to drill;
and
(iv) surface use plans; and
(B) related administrative appeals.
SEC. 30208. CONSULTATION REGARDING OIL AND GAS
LEASING ON PUBLIC LANDS.
(a) IN GENERAL.—Not later than six months after
the date of 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 oil and
gas leasing on public lands within the jurisdiction of the
Secretary of the Interior and National Forest System
lands within the jurisdiction of the Secretary of Agri-
culture.
(b) CONTENTS.—The memorandum of understanding
shall include provisions that—
(1) establish an administrative procedure for
timely processing of oil and gas lease applications,
including lines of authority, steps in application
processing, and timeframes for application proc-
essing;
(2) establish an administrative procedure for
timely processing of surface use plans of operation
and applications for permits to drill, including lines
507
of authority and steps for processing such plans and
applications within 30 days after receipt by the Sec-
retary concerned;
(3) provide for coordination of planning relating
to oil and gas development;
(4) provide for coordination of environmental
compliance efforts to avoid duplication of effort;
(5) provide for coordination of use of lease stip-
ulations to achieve consistency;
(6) ensure that lease stipulations are only as re-
strictive as is necessary to protect the resource for
which the stipulations are applied; and
(7) establish reasonable timeframes to process
applications for permits to drill.
(c) DATA RETRIEVAL SYSTEM.—
(1) IN GENERAL.—The Secretary of the Inte-
rior and the Secretary of Agriculture shall establish
a joint data retrieval system that is capable of track-
ing applications and formal requests made pursuant
to procedures of the Federal onshore oil and gas
leasing program and providing information as to the
status of such applications and requests within the
Department of the Interior and the Department of
Agriculture.
508
(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
509
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
Secretary—
(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
510
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,
511
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-
512
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.
513
(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-
514
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.—
515
(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
516
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.
517
(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.
518
(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.
519
(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
520
‘‘(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.
521
(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
522
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.
523
‘‘(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
524
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.’’.
525
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-
526
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
527
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—
528
(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-
529
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:
530
‘‘(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.
531
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
532
(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
533
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
534
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—
535
(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;
536
(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
537
(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.
538
(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
539
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.
540
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-
541
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.—
542
(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
543
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.
544
(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
545
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.
546
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—
547
(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-
548
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
549
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
550
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-
551
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
552
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-
553
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
554
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-
555
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,
556
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:
557
(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
558
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-
559
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-
560
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-
561
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-
562
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
563
(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
564
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.
565
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).
566
(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.
567
(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.
568
(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
569
(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.—
570
‘‘(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.
571
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.’’.
572
(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—
573
(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-
574
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;’’.
575
(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.
576
(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.)—
577
(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
578
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
579
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-
580
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
581
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-
582
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.
583
‘‘(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-
584
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
585
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-
586
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)’’.
587
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);
588
(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.
589
‘‘(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;
590
‘‘(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—
591
‘‘(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
592
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)’’.
593
(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
594
‘‘$1 per acre or fraction thereof for each year of the lease’’
and all that follows through the end of the paragraph and
inserting ‘‘$1 per acre or fraction thereof for each year
of the lease in the case of a lease awarded in a noncompeti-
tive lease sale; or $2 per acre or fraction thereof for the
first year, $3 per acre or fraction thereof for each of the
second through tenth years, and $5 per acre or fraction
thereof for each year after the 10th year thereof, in the
case of a lease awarded in a competitive lease sale; and’’.
(b) TERMINATION OF LEASE FOR FAILURE TO PAY
RENTAL.—Section 5 of the Geothermal Steam Act of
1970 (30 U.S.C. 1004) is further amended by adding at
the end the following:
‘‘(e) TERMINATION OF LEASE FOR FAILURE TO PAY
RENTAL.—
‘‘(1) IN GENERAL.—The Secretary shall termi-
nate any lease with respect to which rental is not
paid in accordance with this Act and the terms of
the lease under which the rental is required, upon
the expiration of the 45-day period beginning on the
date of the failure to pay such rental.
‘‘(2) 
NOTIFICATION.—The 
Secretary 
shall
promptly notify a lessee that has not paid rental re-
quired under the lease that the lease will be termi-
595
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:
596
‘‘(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
597
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.
598
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
599
‘‘(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
identify—
(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.
600
(2) 
DEFINITIONS.—For 
purposes 
of 
this
subsection—
(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.
601
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
602
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
603
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.
604
‘‘(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.
605
‘‘(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-
606
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
report—
(A) addressing—
607
(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;
608
(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
609
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
610
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
611
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-
612
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
613
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
614
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;
615
(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
616
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—
617
(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.
618
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;
619
(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,
620
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—
621
(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.
622
(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.
623
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).
624
‘‘(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
625
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
626
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-
627
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
628
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)).
629
‘‘(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.’’.
630
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years ending after De-
cember 31, 2003.
SEC. 41002. EXTENSION AND EXPANSION OF CREDIT FOR
ELECTRICITY PRODUCED FROM RENEWABLE
RESOURCES.
(a) EXTENSION OF CREDIT FOR WIND AND CLOSED-
LOOP BIOMASS FACILITIES.—Subparagraphs (A) and (B)
of section 45(c)(3) are each amended by striking ‘‘2004’’
and inserting ‘‘2007’’.
(b) EXPANSION OF CREDIT FOR OPEN-LOOP BIO-
MASS, LANDFILL GAS FACILITIES, AND TRASH COMBUS-
TION FACILITIES.—Paragraph (3) of section 45(c) is
amended by adding at the end the following new subpara-
graphs:
‘‘(D) OPEN-LOOP BIOMASS FACILITIES.—
In the case of a facility using open-loop biomass
to produce electricity, the term ‘qualified facil-
ity’ means any facility owned by the taxpayer
which is originally placed in service before Jan-
uary 1, 2007.
‘‘(E) LANDFILL GAS FACILITIES.—In the
case of a facility producing electricity from gas
derived from the biodegradation of municipal
solid waste, the term ‘qualified facility’ means
631
any facility owned by the taxpayer which is
originally placed in service before January 1,
2007.
‘‘(F) TRASH COMBUSTION FACILITIES.—In
the case of a facility which burns municipal
solid waste to produce electricity, the term
‘qualified facility’ means any facility owned by
the taxpayer which is originally placed in serv-
ice after the date of the enactment of this sub-
paragraph and before January 1, 2007.’’.
(c) DEFINITION AND SPECIAL RULES.—Subsection
(c) of section 45 is amended by adding at the end the
following new paragraphs:
‘‘(5) OPEN-LOOP
BIOMASS.—The term ‘open-
loop biomass’ means any solid, nonhazardous, cel-
lulosic waste material which is segregated from other
waste materials and which is derived from—
‘‘(A) any of the following forest-related re-
sources: mill residues, precommercial thinnings,
slash, and brush,
‘‘(B) solid wood waste materials, including
waste pallets, crates, dunnage, manufacturing
and construction wood wastes (other than pres-
sure-treated, 
chemically-treated, 
or 
painted
wood wastes), and landscape or right-of-way
632
tree trimmings, but not including municipal
solid waste (garbage), gas derived from the bio-
degradation of solid waste, or paper that is
commonly recycled, or
‘‘(C) agriculture sources, including orchard
tree crops, vineyard, grain, legumes, sugar, and
other crop by-products or residues.
Such term shall not include closed-loop biomass.
‘‘(6) 
REDUCED
CREDIT
FOR
CERTAIN
PREEFFECTIVE DATE FACILITIES.—In the case of
any facility described in subparagraph (D) or (E) of
paragraph (3) which is placed in service before the
date of the enactment of this paragraph—
‘‘(A) subsection (a)(1) shall be applied by
substituting ‘1.0 cents’ for ‘1.5 cents’, and
‘‘(B) the 5-year period beginning on the
date of the enactment of this paragraph shall
be substituted in lieu of the 10-year period in
subsection (a)(2)(A)(ii).
‘‘(7) CREDIT ELIGIBILITY FOR OPEN-LOOP BIO-
MASS FACILITIES.—In the case of any facility de-
scribed in paragraph (3)(D) which is placed in serv-
ice before the date of enactment of this paragraph,
if the owner of such facility is not the producer of
the electricity, the person eligible for the credit al-