To amend the Internal Revenue Code of 1986 to extend the section 29 credit for producing fuel from a nonconventional source.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Energy Security for American 
Consumers Act of 2001''.

SEC. 2. EXTENSION OF CREDIT FOR PRODUCING FUEL FROM A NONCONVENTIONAL 
              SOURCE.

    (a) Extension of Credit.--Subsection (f) of section 29 of the 
Internal Revenue Code of 1986 (relating to credit for producing fuel 
from a nonconventional source) is amended--
            (1) in paragraph (1)(A), by inserting before ``or'' the 
        following: ``or from a well drilled after December 30, 2000, 
        and before January 1, 2012,'',
            (2) in paragraph (1)(B), by inserting before ``and'' at the 
        end the following: ``or placed in service after December 30, 
        2000, and before January 1, 2012,'', and
            (3) by striking paragraph (2) and inserting the following:
            ``(2) which are--
                    ``(A) sold before January 1, 2003, in the case of 
                wells drilled or facilities placed in service before 
                January 1, 1993, and
                    ``(B) sold before January 1, 2014, in the case of 
                wells drilled or facilities placed in service before 
                January 1, 2012.''.
    (b) Reduction in Amount of Credit by 20 Percent Per Year Starting 
in 2010.--Subsection (a) of section 29 of such Code is amended to read 
as follows:
    ``(a) Allowance of Credit.--
            ``(1) In general.--There shall be allowed as a credit 
        against the tax imposed by this chapter for the taxable year an 
        amount equal to--
                    ``(A) the applicable amount, multiplied by
                    ``(B) the barrel-of-oil equivalent of qualified 
                fuels--
                            ``(i) sold by the taxpayer to an unrelated 
                        person during the taxable year, and
                            ``(ii) the production of which is 
                        attributable to the taxpayer.
            ``(2) Applicable amount.--For purposes of paragraph (1), 
        the applicable amount is the amount determined in accordance 
        with the following table:

        ``In the case of taxable
                                                  The applicable amount
        years beginning in calendar year:
                                                              is:      
                2002 to 2011.........................            $3.00 
                2012.................................            $2.60 
                2013.................................            $2.00 
                2014.................................            $1.40 
                2015.................................            $0.80 
                2016 and thereafter..................          $0.00.''
    (c) Credit Allowed Against Both Regular Tax and Alternative Minimum 
Tax.--Paragraph (6) of section 29(b) of such Code is amended to read as 
follows:
            ``(6) Application with other credits.--The credit allowed 
        by subsection (a) for any taxable year shall not exceed the 
        excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under this 
                part (other than subpart C and this section) and under 
                section 1397E.''
    (d) Qualified Fuels To Include Heavy Oil.--Subsection (c) of 
section 29 of such Code (defining qualified fuels) is amended--
            (1) in paragraph (1), by striking ``and'' at the end of 
        subparagraph (B), by striking the period at the end of 
        subparagraph (C) and inserting ``, and'', and by adding at the 
        end the following new subparagraph:
                    ``(D) heavy oil, as defined in section 
                613A(c)(6)(7).'', and
            (2) by adding at the end the following new paragraph:
            ``(4) Special rule for heavy oil.--Heavy oil shall be 
        considered to be a qualified fuel only if it is produced from a 
        well drilled, or in a facility placed in service, after the 
        date of the enactment of the Energy Security for American 
        Consumers Act of 2001, and before January 1, 2012.''
    (e) Barrel-of-Oil Equivalent in the Case of Natural Gas.--Paragraph 
(5) of section 29(d) of such Code is amended by adding at the end the 
following: ``In the case of natural gas, the term means MCF (determined 
at standard temperature and pressure).''
    (f) Applicability to Certain Facilities.--Paragraph (1) of section 
29(g) of such Code is amended to read as follows:
            ``(1) In general.--In the case of a facility for producing 
        qualified fuels described in subparagraph (B)(ii) or (C) of 
        subsection (c)(1), for purposes of subsection (f)(1)(B), such 
        facility shall be treated as being placed in service before 
        January 1, 1993, if such facility is placed in service before 
        July 1, 1998, pursuant to a binding written contract in effect 
        before January 1, 1997.''.
    (g) Effective Date.--The amendments made by this Act shall apply to 
taxable years beginning after December 31, 2001.

Summary: Energy Security for American Consumers Act of 2001 - Amends the Internal Revenue Code to extend the production and sales eligibility dates respecting the credit for production of fuel from a nonconventional source.Sets forth a credit phaseout and disallows it as of tax year 2016.Includes certain heavy oil as a qualified fuel.