[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5316 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 5316

   To protect the energy security of the United States and decrease 
 America's dependency on foreign oil sources to 50 percent by the year 
  2010 by enhancing the use of renewable energy resources, conserving 
    energy resources, improving energy efficiencies, and increasing 
domestic energy supplies, mitigating the effect of increases in energy 
 prices on the American consumer, including the poor and elderly, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 27, 2000

Mr. Brady of Texas introduced the following bill; which was referred to 
    the Committee on Commerce, and in addition to the Committees on 
    Resources, and Ways and Means, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
   To protect the energy security of the United States and decrease 
 America's dependency on foreign oil sources to 50 percent by the year 
  2010 by enhancing the use of renewable energy resources, conserving 
    energy resources, improving energy efficiencies, and increasing 
domestic energy supplies, mitigating the effect of increases in energy 
 prices on the American consumer, including the poor and elderly, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Energy Independence for America Act 
of 2000''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) increasing dependence on foreign sources of oil causes 
        systemic harm to all sectors of the domestic United States 
        economy, threatens national security, undermines the ability of 
        federal, state, and local units of government to provide 
        essential services, and jeopardizes the peace, security, and 
        welfare of the American people;
            (2) dependence on imports of foreign oil was 46 percent in 
        1992, but has risen to more than 55 percent by the beginning of 
        2000, and is estimated by the Department of Energy to rise to 
        65 percent by 2020 unless current policies are altered;
            (3) at the same time, despite increased energy 
        efficiencies, energy use in the United States is expected to 
        increase 27 percent by 2020.
            (4) the United States lacks a comprehensive national energy 
        policy and has taken actions that limit the availability and 
        capability of the domestic energy sources of oil and gas, coal, 
        nuclear and hydro;
            (5) a comprehensive energy strategy needs to be developed 
        to combat this trend, decrease the United States dependence on 
        imported oil supplies and strengthen our national energy 
        security;
            (6) the goal of this comprehensive strategy must be to 
        decrease the United States dependence on foreign oil supplies 
        to not more than 50 percent by the year 2010;
            (7) in order to meet this goal, this comprehensive energy 
        strategy needs to be multi-faceted and include enhancing the 
        use of renewable energy resources (including hydro, nuclear, 
        solar, wind, and biomass), conserving energy resources 
        (including improving energy efficiencies), and increasing 
        domestic supplies of nonrenewable resources (including oil, 
        natural gas, and coal);
            (8) however, conservation efforts and alternative fuels 
        alone will not enable America to meet this goal as conventional 
        energy sources supply 96 percent of America's power at this 
        time; and
            (9) immediate actions also need to be taken in order to 
        mitigate the effect of recent increases in oil prices on the 
        American consumer, including the poor and the elderly.
    (b) Purposes.--This purposes of this Act are to protect the energy 
security of the United States by decreasing America's dependency of 
foreign oil sources to not more than 50 percent by the year 2010 by 
enhancing the use of renewable energy resources, conserving energy 
resources (including improving energy efficiencies), and increasing 
domestic energy supplies and to mitigate the immediate effect of 
increases in energy prices on the American consumer, including the poor 
and the elderly.

  TITLE I--ENERGY SECURITY ACTIONS REQUIRED OF THE SECRETARY OF ENERGY

SEC. 101. ANNUAL REPORT ON UNITED STATES ENERGY INDEPENDENCE.

    (a) Report.--Beginning on June 15, 2001, and annually thereafter, 
the Secretary of Energy, in consultation with the Secretary of Defense 
and the heads of other Federal agencies, shall submit a report to the 
President and the Congress which evaluates the progress the United 
States has made toward obtaining the goal of not more than 50 percent 
dependence on foreign oil sources by 2010. The Secretary shall adopt as 
interim goals, a reduction in dependence on oil imports to not more 
than 54 percent by 2005 and 52 percent by 2008.
    (b) Alternatives.--The report shall specify what specific 
legislation or administrative actions must be implemented to meet this 
goal and set forth a range of options and alternatives with a benefit/
cost analysis for each option or alternative together with an estimate 
for the contribution that each option or alternative could make to 
reduce foreign oil imports. The report shall indicate, in detail, 
options and alternatives (1) to increase the use of renewable domestic 
energy sources, including conventional and non-conventional sources 
such as, but not limited to, increased hydroelectric generation at 
existing Federal facilities, (2) to conserve energy resources, 
including improving efficiencies and decreasing consumption, and (3) to 
increase domestic production and use of oil, natural gas, and coal, 
including any actions that would need to be implemented to provide 
access to, and transportation of, these energy resources.
    (c) Refinery Capacity.--As part of the reports submitted in 2001, 
2005, and 2008, the Secretary shall examine and report on the condition 
of the domestic refinery industry and the extent of domestic storage 
capacity for various categories of petroleum products and make such 
recommendations as he believes will enhance domestic capabilities to 
respond to short-term shortages of various fuels due to climate or 
supply interruptions.

SEC. 102. REPORT OF THE NATIONAL PETROLEUM COUNCIL.

    The Secretary of Energy shall immediately review the report of the 
National Petroleum Council submitted to him on December 15, 1999, and 
shall submit such report, together with any recommendations for 
administrative or legislative actions, to the President no later than 
October 1, 2000.

SEC. 103. INTERAGENCY WORK GROUP ON NATURAL GAS.

    (a) Interagency Work Group.--The Secretary of Energy shall 
establish an Interagency Work Group on Natural Gas (referred to as 
``Group'' in this subsection) within the National Economic Council. The 
Group shall include representatives from each Federal agency that has a 
significant role in the development and implementation of natural gas 
policy, resource assessment, or technologies for natural gas 
exploration, production, transportation, and use.
    (b) Strategy and Comprehensive Policy.--The Group shall develop a 
strategy and comprehensive policy for the use of natural gas as an 
essential component of overall national objectives of energy security, 
economic growth, and environmental protection. In developing the 
strategy and policy, the Group shall solicit and consider suggestions 
from States and local units of government, industry, and other non-
Federal groups, organizations, or individuals possessing information or 
expertise in one or more areas under review by the Group. The policy 
shall recognize the significant lead times required for the development 
of additional natural gas supplies and the delivery infrastructure 
required to transport those supplies. The Group shall consider, but is 
not limited to, issues of access to and development of resources, 
transportation, technology development, environmental regulation and 
the associated economic and environmental costs of alternatives, 
education of future workforce, financial incentives related to 
exploration, production, transportation, development, and use of 
natural gas.
    (c) Report.--The Group shall prepare a report setting forth its 
recommendations on a comprehensive policy for the use of natural gas 
and the specific elements of a national strategy to achieve the 
objectives of the policy. The report shall be transmitted to the 
Secretary of Energy within six months from the date of the enactment of 
this Act.
    (d) Secretary Review.--The Secretary of Energy shall review the 
report and, within 3 months, submit the report, together with any 
recommendations for administrative or legislative actions, to the 
President and the Congress.
    (e) Trends.--The Group shall monitor trends for the assumptions 
used in developing its report, including the specific elements of a 
national strategy to achieve the objectives of the comprehensive policy 
and shall advise the Secretary whenever it anticipates changes that 
might require alterations in the strategy.
    (f) Progress Report.--On June 1, 2002, and every two years 
thereafter, the Group shall submit a report to the President and the 
Congress evaluating the progress that has been made in the prior two 
years in implementing the strategy and accomplishing the objectives of 
the comprehensive policy.

TITLE II--AMENDMENTS TO ENERGY POLICY AND CONSERVATION ACT AND ACTIONS 
               AFFECTING THE STRATEGIC PETROLEUM RESERVE

SEC. 201. AMENDMENTS TO TITLE I OF EPCA.

    Title I of the Energy Policy and Conservation Act (42 U.S.C. 6211-
6251) is amended--
            (1) in section 161(h) (42 U.S.C. 6241), by--
                    (A) striking ``and'' at the end of (1)(A),
                    (B) striking ``,'' and inserting ``; and'' at the 
                end of (1)(B), and
                    (C) inserting after subparagraph (B) the following 
                new subparagraph:
                    ``(C) concurs in the determination of the Secretary 
                of Defense that action taken under this subsection will 
not impair national security.'', and
                    (D) striking ``Reserve'' and inserting ``Reserve, 
                if the Secretary finds that action taken under this 
                subsection will not have an adverse effect on the 
                domestic petroleum industry,'' at the end of (1);
            (2) in section 166 (42 U.S.C. 6246), by striking ``March 
        31, 2000'' and inserting ``December 31, 2003''; and
            (3) in section 181 (42 U.S.C. 6251), by striking ``March 
        31, 2000'' each place it appears and inserting ``December 31, 
        2003''.

SEC. 202. AMENDMENTS TO TITLE II OF EPCA.

    Title II of the Energy Policy and Conservation Act (42 U.S.C. 6261-
6285) is amended--
            (1) in section 256(h) (42 U.S.C. 6276(h)), by inserting 
        ``through 2003'' after ``1997''; and
            (2) in section 281 (42 U.S.C. 6285), by striking `March 31, 
        2000' each place it appears and inserting ``December 31, 
        2003''.

SEC. 203. STRATEGIC PETROLEUM RESERVE STUDY AND REPORT.

    The President shall immediately establish an Interagency Panel on 
the Strategic Petroleum Study (referred to as the ``Panel'' in this 
section) to study oil markets and estimate the extent and frequency of 
fluctuations in the supply and price of, and demand for crude oil in 
the future and determine appropriate capacity of and uses for the 
Strategic Petroleum Reserve. The Panel may recommend changes in 
existing authorities to provide additional flexibility for and 
strengthen the ability of the Strategic Petroleum Reserve to respond to 
energy requirements. The Panel shall complete its study and submit a 
report containing its findings and any recommendations to the President 
and the Congress within six months from the date of enactment of this 
Act.

TITLE III--PROVISIONS TO PROTECT CONSUMERS AND LOW INCOME FAMILIES AND 
                     ENCOURAGE ENERGY EFFICIENCIES

SEC. 301. CHANGES IN WEATHERIZATION PROGRAM TO PROTECT LOW-INCOME 
              PERSONS.

    (a) The matter under the heading ``Energy Conservation (including 
transfer of funds)'' in title II of the Department of the Interior and 
Related Agencies Appropriations Act, 2000 (113 Stat. 1535, 1501A-180), 
is amended by striking ``grants:'' and all that follows and inserting 
``grants.''.
    (b) Section 415 of the Energy Conservation and Production Act (42 
U.S.C. 6865) is amended--
            (1) in subsection (a)(1) by striking the first sentence;
            (2) in subsection (a)(2) by--
                    (A) striking ``(A)'',
                    (B) striking ``approve a State's application to 
                waive the 40 percent requirement established in 
                paragraph (1) if the State includes in its plan'' and 
                inserting ``establish'', and
                    (C) striking subparagraph (B);
            (3) in subsection (c)(1) by--
                    (A) striking ``paragraphs (3) and (4)'' and 
                inserting ``paragraph (3)'',
                    (B) striking ``$1600'' and inserting ``$2500'',
                    (C) striking ``and'' at the end of subparagraph 
                (C),
                    (D) striking the period and inserting
                ``, and'' in subparagraph (D), and
                    (E) inserting after subparagraph (D) the following 
                new subparagraph:
                    ``(E) the cost of making heating and cooling 
                modifications, including replacement'';
            (4) in subsection (c)(3) by--
                    (A) striking ``1991, the $1600 per dwelling unit 
                limitation'' and inserting ``2000, the $2500 per 
                dwelling unit average'',
                    (B) striking ``limitation'' and inserting 
                ``average'' each time it appears, and
                    (C) inserting ``the'' after ``beginning of'' in 
                subparagraph (B); and
            (5) by striking subsection (c)(4).

SEC. 302. SUMMER FILL AND FUEL BUDGETING PROGRAMS.

    (a) Part C of title II of the Energy Policy and Conservation Act 
(42 U.S.C. 6211 et seq.) is amended by adding at the end the following:

``SEC. 273. SUMMER FILL AND FUEL BUDGETING PROGRAMS.

    ``(a) Definitions.--In this section:
            ``(1) Budget contract.--The term `budget contract' means a 
        contract between a retailer and a consumer under which the 
        heating expenses of the consumer are spread evenly over a 
        period of months.
            ``(2) Fixed-price contract.--The term `fixed-price 
        contract' means a contract between a retailer and a consumer 
        under which the retailer charges the consumer a set price for 
        propane, kerosene, or heating oil without regard to market 
        price fluctuations.
            ``(3) Price cap contract.--The term `price cap contract' 
        means a contract between a retailer and a consumer under which 
        the retailer charges the consumer the market price for propane, 
        kerosene, or heating oil, but the cost of the propane, 
        kerosene, or heating oil may not exceed a maximum amount stated 
        in the contract.
    ``(b) Assistance.--At the request of the chief executive officer of 
a State, the Secretary shall provide information, technical assistance, 
and funding--
            ``(1) to develop education and outreach programs to 
        encourage consumers to fill their storage facilities for 
        propane, kerosene, and heating oil during the summer months; 
        and
            ``(2) to promote the use of budget contracts, price cap 
        contracts, fixed-price contracts, and other advantageous 
        financial arrangements;
to avoid severe seasonal price increases for and supply shortages of 
those products.
    ``(c) Preference.--In implementing this section, the Secretary 
shall give preference to States that contribute public funds or 
leverage private funds to develop State summer fill and fuel budgeting 
programs.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            ``(1) $25,000,000 for fiscal year 2001; and
            ``(2) such sums as are necessary for each fiscal year 
        thereafter.
    ``(e) Inapplicability of Expiration Provision.--Section 281 does 
not apply to this section.''.
    (b) The table of contents in the first section of the Energy Policy 
and Conservation Act (42 U.S.C. prec. 6201) is amended by inserting 
after the item relating to section 272 the following:

``Sec. 273. Summer fill and fuel budgeting programs.''.

SEC. 303. ENERGY EFFICIENCY SCIENCE INITIATIVE.

    There are authorized to be appropriated $25,000,000 for fiscal year 
2001 and such sums as are necessary for each fiscal year thereafter be 
for an Energy Efficiency Science Initiative to be managed by the 
Assistant Secretary for Energy Efficiency and Renewable Energy in 
consultation with the Director of the Office of Science, for grants to 
be competitively awarded and subject to peer review for research 
relating to energy efficiency. The Secretary of Energy shall submit to 
the Committee on Science and the Committee on Appropriations of the 
House of Representatives, and to the Committee on Energy and Natural 
Resources and the Committee on Appropriations of the Senate, an annual 
report on the activities of the Energy Efficiency Science Initiative, 
including a description of the process used to award the funds and an 
explanation of how the research relates to energy efficiency.

SEC. 304. NORTHEAST HOME HEATING OIL RESERVE.

    (a) Amendment.--Title I of the Energy Policy and Conservation Act 
is amended by--
            (1) redesignating part D as part E;
            (2) redesignating section 181 as section 191; and
            (3) inserting after part C the following new part D--

              ``PART D--NORTHEAST HOME HEATING OIL RESERVE

                            ``establishment

    ``Sec. 181. (a) Notwithstanding any other provision of this Act, 
the Secretary may establish, maintain, and operate in the Northeast, a 
Northeast Home Heating Oil Reserve. A Reserve established under this 
part is not a component of the Strategic Petroleum Reserve established 
under part B of this title. A Reserve established under this part shall 
contain no more than 2 million barrels of petroleum distillate.
    ``(b) For the purposes of this part--
            ``(1) the term `Northeast' means the States of Maine, New 
        Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, 
        New York, Pennsylvania, and New Jersey; and
            ``(2) the term `petroleum distillate' includes heating oil 
        and diesel fuel.

                              ``authority

    ``Sec. 182. To the extent necessary or appropriate to carry out 
this part, the Secretary may--
            ``(1) purchase, contract for, lease, or otherwise acquire, 
        in whole or in part, storage and related facilities, and 
        storage services;
            ``(2) use, lease, maintain, sell, or otherwise dispose of 
        storage and related facilities acquired under this part;
            ``(3) acquire by purchase, exchange (including exchange of 
        petroleum product from the Strategic Petroleum Reserve or 
        received as royalty from Federal lands), lease, or otherwise, 
        petroleum distillate for storage in the Northeast Home Heating 
        Oil Reserve;
            ``(4) store petroleum distillate in facilities not owned by 
        the United States;
            ``(5) sell, exchange, or otherwise dispose of petroleum 
        distillate from the Reserve established under this part; and
            ``(6) notwithstanding paragraph (5), on terms the Secretary 
        considers reasonable, sell, exchange, or otherwise dispose of 
        petroleum distillate from the Reserve established under this 
        part in order to maintain the quality or quantity of the 
        petroleum distillate in the Reserve or to maintain the 
        operational capability of the Reserve.

                     ``conditions for release; plan

    ``Sec. 183. (a) The Secretary may release petroleum distillate from 
the Reserve under section 182(5) only in the event of--
            ``(1) a severe energy supply disruption;
            ``(2) a severe price increase; or
            ``(3) another emergency affecting the Northeast, which the 
        President determines to merit a release from the Reserve.
    ``(b) Within 45 days of the date of the enactment of this section, 
the Secretary shall transmit to the President and, if the President 
approves, to the Congress a plan describing--
            ``(1) the acquisition of storage and related facilities or 
        storage services for the Reserve;
            ``(2) the acquisition of petroleum distillate for storage 
        in the Reserve;
            ``(3) the anticipated methods of disposition of petroleum 
        distillate from the Reserve; and
            ``(4) the estimated costs of establishment, maintenance, 
        and operation of the Reserve.
The storage of petroleum distillate in a storage facility that meets 
existing environmental requirements is not a `major Federal action 
significantly affecting the quality of the human environment' as that 
term is used in section 102(2)(C) of the National Environmental Policy 
Act of 1969.

              ``northeast home heating oil reserve account

    ``Sec. 184. (a) Upon a decision of the Secretary of Energy to 
establish a Reserve under this part, the Secretary of the Treasury 
shall establish in the Treasury of the United States an account known 
as the `Northeast Home Heating Oil Reserve Account' (referred to in 
this section as the `Account').
    ``(b) The Secretary of the Treasury shall deposit in the Account 
any amounts appropriated to the Account and any receipts from the sale, 
exchange, or other disposition of petroleum distillate from the 
Reserve.
    ``(c) The Secretary of Energy may obligate amounts in the Account 
to carry out activities under this part without the need for further 
appropriation, and amounts available to the Secretary of Energy for 
obligation under this section shall remain available without fiscal 
year limitation.

                              ``exemptions

    ``Sec. 185. An action taken under this part--
            ``(1) is not subject to the rulemaking requirements of 
        section 523 of this Act, section 501 of the Department of 
        Energy Organization Act, or section 553 of title 5, United 
        States Code; and
            ``(2) is not subject to laws governing the Federal 
        procurement of goods and services, including the Federal 
        Property and Administrative Services Act of 1949 (including the 
        Competition in Contracting Act) and the Small Business Act.''.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out part D of title 
I of the Energy Policy and Conservation Act.

  TITLE IV--PROVISIONS TO ENHANCE THE USE OF DOMESTIC ENERGY RESOURCES

                  Subtitle A--Hydroelectric Resources

SEC. 401. USE OF FEDERAL FACILITIES.

    (a) The Secretary of the Interior and the Secretary of the Army 
shall each inventory all dams, impoundments, and other facilities under 
their jurisdiction.
    (b) Based on this inventory and other information, the Secretary of 
the Interior and Secretary of the Army shall each submit a report to 
the Congress within six months from the date of enactment of this Act. 
Each report shall--
            (1) Describe, in detail, each facility that is capable, 
        with or without modification, of producing additional 
        hydroelectric power. For each such facility, the report shall 
        state the full potential for the facility to generate 
        hydroelectric power, whether the facility is currently 
        generating hydroelectric power, and the costs to install, 
        upgrade, modify, or take other actions to increase the 
        hydroelectric generating capability of the facility. For each 
        facility that currently has hydroelectric generating equipment, 
        the report shall indicate the condition of such equipment, the 
        maintenance requirements, and the schedule for any improvements 
        as well as the purposes for which power is generated.
            (2) Describe what actions are planned and underway to 
        increase the hydroelectric production from facilities under his 
        jurisdiction and shall include any recommendations the 
        Secretary deems advisable to increase such production, reduce 
        costs, and improve efficiency at Federal facilities, including, 
        but not limited to, use of lease of power privilege and 
contracting with non-Federal entities for operation and maintenance.

SEC. 402. EXPEDITED FERC HYDROELECTRIC LICENSING PROCEDURES.

    The Federal Energy Regulatory Commission shall immediately 
undertake a comprehensive review of policies, procedures and 
regulations for the licensing of hydroelectric projects to determine 
how to reduce the cost and time of obtaining a license. The Commission 
shall report its findings within six months of the date of enactment to 
the Congress, including any recommendations for legislative changes.

                     Subtitle B--Nuclear Resources

SEC. 410. NUCLEAR GENERATION.

    The Chairman of the Nuclear Regulatory Commission shall submit a 
report to the Congress within six months from the date of enactment of 
this Act on the state of nuclear power generation and production in the 
United States and the potential for increasing nuclear generating 
capacity and production as part of this nation's energy mix. The report 
shall also review the status of the relicensing process for civilian 
nuclear power plants, including current and anticipated applications, 
and recommendations for improvements in the process, including 
recommendations for expediting the process and ensuring that 
relicensing is accomplished in a timely manner.

SEC. 411. NRC HEARING PROCEDURE.

    Section 189(a)(1) of the Atomic Energy Act of 1954 (42 U.S.C. 
2239(a)(1)) is amended by adding at the end the following--
                    ``(C) Hearings.--A hearing under this section shall 
                be conducted using informal adjudicatory procedures 
                established under sections 553 and 555 of title 5, 
                United States Code, unless the Commission determines 
                that formal adjudicatory procedures are necessary--
                            ``(i) to develop a sufficient record; or
                            ``(ii) to achieve fairness.''.

   Subtitle C--Development of a National Spent Nuclear Fuel Strategy

SEC. 415. FINDINGS.

    The Congress finds the following:
            (1) Prior to permanent closure of the geologic repository 
        in Yucca Mountain, Congress must determine whether the spent 
        fuel in the repository should be treated as waste subject to 
        permanent burial or should be considered an energy resource 
        that is needed to meet future energy requirements.
            (2) Future use of nuclear energy may require construction 
        of a second geologic repository unless Yucca Mountain can 
        safely accommodate additional spent fuel. Improved spent fuel 
        strategies may increase the capacity of Yucca Mountain.
            (3) Prior to construction of any second permanent geologic 
        repository, the nation's current plans for permanent burial of 
        spent fuel should be reevaluated.

SEC. 416. OFFICE OF SPENT NUCLEAR FUEL RESEARCH.

    (a) Establishment.--There is established an Office of Spent Nuclear 
Fuel Research (referred to as the ``Office'' in this section) within 
the Office of Nuclear Energy Science and Technology of the Department 
of Energy. The Office shall be headed by the Associate Director of the 
Office of Nuclear Energy Science and Technology (referred to in this 
section as the ``head''), who shall be a member of the Senior Executive 
Service appointed by the Director of the Office of Nuclear Energy 
Science and Technology, and compensated at a rate determined by 
applicable law.
    (b) Office Head.--The head of the Office shall be responsible for 
carrying out an integrated research, development, and demonstration 
program on technologies for treatment, recycling, and disposal of high-
level nuclear radioactive waste and spent nuclear fuel, subject to the 
general supervision of the Secretary. The head of the Office shall 
report to the Director of the Office of Nuclear Energy Science and 
Technology. The first head of the Office shall be appointed within 90 
days of the date of enactment of this Act.
    (c) Grant and Contract Authority.--In carrying out the Secretary's 
responsibilities under this section, the Secretary may make grants, or 
enter into contracts, for the purposes of the research projects and 
activities described in subsection (d)(2).
    (d)(1) Duties.--The head of the Office shall involve national 
laboratories, universities, the commercial nuclear industry, and other 
organizations to investigate technologies for the treatment, recycling, 
and disposal of spent nuclear fuel and high-level radioactive waste.
    (2) The head of the Office shall:
            (A) develop a research plan to provide recommendations by 
        2015;
            (B) identify technologies for the treatment, recycling, and 
        disposal of spent nuclear fuel and high-level radioactive 
        waste;
            (C) conduct research and development activities on such 
        technologies;
            (D) ensure that all activities include as key objectives 
        minimization of proliferation concerns and risk to health of 
        the general public or site workers, as well as development of 
        cost-effective technologies;
            (E) require research on both reactor- and accelerator-based 
        transmutation systems;
            (F) require research on advanced processing and 
        separations;
            (G) encourage that research efforts include participation 
        of international collaborators;
            (H) be authorized to fund international collaborators when 
        they bring unique capabilities not available in the United 
        States and their host country is unable to provide for their 
        support;
            (I) ensure that research efforts with the Office are 
        coordinated with research on advance fuel cycles and reactors 
        conducted within the Office of Nuclear Energy Science and 
        Technology.
    (e) Report.--The head of the Office shall annually prepare and 
submit a report to the Congress on the activities and expenditures of 
the Office, including the process that has been made to achieve the 
objectives of subsection (b).

                       Subtitle D--Coal Resources

SEC. 420. COAL GENERATING CAPACITY.

    The Secretary of Energy shall examine existing coal-fired power 
plants and submit a report to the Congress within six months from the 
enactment of this Act on the potential of such plants for increased 
generation and any impediments to achieving such increase. The report 
shall describe, in detail, options for improving the efficiency of 
these plants. The report shall include recommendations for a program of 
research, development, demonstration, and commercial application to 
develop economically and environmentally acceptable advanced 
technologies for current electricity generation facilities using coal 
as the primary feedstock, including commercial-scale applications of 
advanced clean coal technologies. The report shall also include an 
assessment of the costs to develop and demonstrate such technologies 
and the time required to undertake such development and demonstration.

SEC. 425. COAL LIQUEFACTION.

    The Secretary of Energy shall provide grants for the refinement and 
demonstration of new technologies for the conversion of coal to 
liquids. Such grants shall be for the design and construction of an 
indirect liquefaction plant capable of production in commercial 
quantities. There are authorized to be appropriated for the purpose of 
this section such sums as may be necessary through fiscal year 2004.

   TITLE V--ARCTIC COASTAL PLAIN DOMESTIC ENERGY SECURITY ACT OF 2000

SEC. 501. SHORT TITLE.

    This title may be cited as the ``Arctic Coastal Plain Domestic 
Energy Security Act of 2000''.

SEC. 502. DEFINITIONS.

    When used in this title the term--
            (1) ``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 approximately 1,549,000 acres; and
            (2) ``Secretary'', except as otherwise provided, means the 
        Secretary of the Interior or the Secretary's designee.

SEC. 503. LEASING PROGRAM FOR LANDS WITHIN THE COASTAL PLAIN.

    (a) Authorization.--The Congress hereby authorizes and directs the 
Secretary, acting through the Bureau of Land Management in consultation 
with the Fish and Wildlife Service and other appropriate Federal 
offices and agencies, to take such actions as are necessary to 
establish and implement a competitive oil and gas leasing program that 
will result in an environmentally sound program for the exploration, 
development, and production of the oil and gas resources of the Coastal 
Plain and to administer the provisions of this title through 
regulations, lease terms, conditions, restrictions, 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 shall require the application of the best commercially available 
technology for oil and gas exploration, development, and production, on 
all new exploration, development, and production operations, and 
whenever practicable, on existing operations, and in a manner to ensure 
the receipt of fair market value by the public for the mineral 
resources to be leased.
    (b) Repeal.--The prohibitions and limitations contained in section 
1003 of the Alaska National Interest Lands Conservation Act of 1980 (16 
U.S.C. 3143) are hereby repealed.
    (c) Compatibility.--Congress hereby determines that the oil and gas 
leasing program and activities authorized by this section in the 
Coastal Plain are compatible with the purposes for which the Arctic 
National Wildlife Refuge was established, and that no further findings 
or decisions are required to implement this determination.
    (d) Sole Authority.--This title shall be the sole authority for 
leasing on the Coastal Plain: Provided, That nothing in this title 
shall be deemed to expand or limit State and local regulatory 
authority.
    (e) Federal Land.--The Coastal Plain shall be considered ``Federal 
land'' for the purposes of the Federal Oil and Gas Royalty Management 
Act of 1982.
    (f) Special Areas.--The Secretary, after consultation with the 
State of Alaska, City of Kaktovik, and the North Slope Borough, is 
authorized to designate up to a total of 45,000 acres of the Coastal 
Plain as Special Areas and close such areas to leasing if the Secretary 
determines that these Special Areas are of such unique character and 
interest so as to require special management and regulatory protection. 
The Secretary may, however, permit leasing of all or portions of any 
Special Areas within the Coastal Plain by setting lease terms that 
limit or condition surface use and occupancy by lessees of such lands 
but permit the use of horizontal drilling technology from sites on 
leases located outside the designated Special Areas.
    (g) Limitation on Closed Areas.--The Secretary's sole authority to 
close lands within the Coastal Plain to oil and gas leasing and to 
exploration, development, and production is that set forth in this 
title.
    (h) Conveyance.--In order to maximize Federal revenues by removing 
clouds on title of lands and clarifying land ownership patterns within 
the Coastal Plain, the Secretary, notwithstanding the provisions of 
section 1302(h)(2) of the Alaska National Interest Lands Conservation 
Act (16 U.S.C. 3192(h)(2)), is authorized and directed to convey (1) to 
the Kaktovik Inupiat Corporation the surface estate of the lands 
described in paragraph 2 of the 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), and (2) to 
the Arctic Slope Regional Corporation the subsurface estate beneath 
such surface estate pursuant to the August 9, 1983, agreement between 
the Arctic Slope Regional Corporation and the United States of America.

SEC. 504. RULES AND REGULATIONS.

    (a) Promulgation.--The Secretary shall prescribe such rules and 
regulations as may be necessary to carry out the purposes and 
provisions of this title, including rules and regulations relating to 
protection of the fish and wildlife, their habitat, subsistence 
resources, and the environment of the Coastal Plain. Such rules and 
regulations shall be promulgated no later than fourteen months after 
the date of enactment of this title and shall, as of their effective 
date, apply to all operations conducted under a lease issued or 
maintained under the provisions of this title and all operations on the 
Coastal Plain related to the leasing, exploration, development, and 
production of oil and gas.
    (b) Revision of Regulations.--The Secretary shall periodically 
review and, if appropriate, revise the rules and regulations issued 
under subsection (a) of this section to reflect any significant 
biological, environmental, or engineering data which come to the 
Secretary's attention.

SEC. 505. ADEQUACY OF THE DEPARTMENT OF THE INTERIOR'S LEGISLATIVE 
              ENVIRONMENTAL IMPACT STATEMENT.

    The ``Final Legislative Environmental 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 hereby found by the Congress to be 
adequate to satisfy the legal and procedural requirements of the 
National Environmental Policy Act of 1969 with respect to actions 
authorized to be taken by the Secretary to develop and promulgate the 
regulations for the establishment of the leasing program authorized by 
this title, to conduct the first lease sale and any subsequent lease 
sale authorized by this title, and to grant rights-of-way and easements 
to carry out the purposes of this title.

SEC. 506. LEASE SALES.

    (a) Lease Sales.--Lands may be leased pursuant to the provisions of 
this title to any person qualified to obtain a lease for deposits of 
oil and gas under the Mineral Leasing Act, as amended (30 U.S.C. 181).
    (b) Procedures.--The Secretary shall, by regulation, establish 
procedures for--
            (1) receipt and consideration of sealed nominations for any 
        area in the Coastal Plain for inclusion in, or exclusion (as 
        provided in subsection (c)) from, a lease sale; and
            (2) public notice of and comment on designation of areas to 
        be included in, or excluded from, a lease sale.
    (c) Lease Sales on Coastal Plain.--The Secretary shall, by 
regulation, provide for lease sales of lands on the Coastal Plain. When 
lease sales are to be held, they shall occur after the nomination 
process provided for in subsection (b) of this section. For the first 
lease sale, the Secretary shall offer for lease those acres receiving 
the greatest number of nominations, but no less than two hundred 
thousand acres and no more than three hundred thousand acres shall be 
offered. If the total acreage nominated is less than two hundred 
thousand acres, the Secretary shall include in such sale any other 
acreage which he believes has the highest resource potential, but in no 
event shall more than three hundred thousand acres of the Coastal Plain 
be offered in such sale. With respect to subsequent lease sales, the 
Secretary shall offer for lease no less than two hundred thousand acres 
of the Coastal Plain. The initial lease sale shall be held within 
twenty months of the date of enactment of this title. The second lease 
sale shall be held no later than twenty-four months after the initial 
sale, with additional sales conducted no later than twelve months 
thereafter so long as sufficient interest in development exists to 
warrant, in the Secretary's judgment, the conduct of such sales.

SEC. 507. GRANT OF LEASES BY THE SECRETARY.

    (a) In General.--The Secretary is authorized to grant to the 
highest responsible qualified bidder by sealed competitive cash bonus 
bid any lands to be leased on the Coastal Plain upon payment by the 
lessee of such bonus as may be accepted by the Secretary and of such 
royalty as may be fixed in the lease, which shall be not less than 
12\1/2\ per centum in amount or value of the production removed or sold 
from the lease.
    (b) Antitrust Review.--Following each notice of a proposed lease 
sale and before the acceptance of bids and the issuance of leases based 
on such bids, the Secretary shall allow the Attorney General, in 
consultation with the Federal Trade Commission, thirty days to perform 
an antitrust review of the results of such lease sale on the likely 
effects the issuance of such leases would have on competition and the 
Attorney General shall advise the Secretary with respect to such 
review, including any recommendation for the nonacceptance of any bid 
or the imposition of terms or conditions on any lease, as may be 
appropriate to prevent any situation inconsistent with the antitrust 
laws.
    (c) 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.
    (d) Immunity.--Nothing in this title shall be deemed to convey to 
any person, association, corporation, or other business organization 
immunity from civil or criminal liability, or to create defenses to 
actions, under any antitrust law.
    (e) Definitions.--As used in this section, the term--
            (1) ``antitrust review'' shall be deemed an ``antitrust 
        investigation'' for the purposes of the Antitrust Civil Process 
        Act (15 U.S.C. 1311); and
            (2) ``antitrust laws'' means those Acts set forth in 
        section 1 of the Clayton Act (15 U.S.C. 12) as amended.

SEC. 508. LEASE TERMS AND CONDITIONS.

    An oil or gas lease issued pursuant to this title shall--
            (1) be for a tract consisting of a compact area not to 
        exceed five thousand seven hundred sixty acres, or nine 
        surveyed or protracted sections which shall be as compact in 
        form as possible;
            (2) be for an initial period of ten years and shall be 
        extended for so long thereafter as oil or gas is produced in 
        paying quantities from the lease or unit area to which the 
        lease is committed or for so long as drilling or reworking 
        operations, as approved by the Secretary, are conducted on the 
        lease or unit area;
            (3) require the payment of royalty as provided for in 
        section 507 of this title;
            (4) require that exploration activities pursuant to any 
        lease issued or maintained under this title shall be conducted 
        in accordance with an exploration plan or a revision of such 
        plan approved by the Secretary;
            (5) require that all development and production pursuant to 
        a lease issued or maintained pursuant to this title shall be 
        conducted in accordance with development and production plans 
        approved by the Secretary;
            (6) require posting of bond as required by section 509 of 
        this title;
            (7) provide that the Secretary may close, on a seasonal 
        basis, portions of the Coastal Plain to exploratory drilling 
        activities as necessary to protect caribou calving areas and 
        other species of fish and wildlife;
            (8) contain such provisions relating to rental and other 
        fees as the Secretary may prescribe at the time of offering the 
        area for lease;
            (9) provide that the Secretary may direct or assent to the 
        suspension of operations and production under any lease granted 
        under the terms of this title in the interest of conservation 
of the resource or where there is no available system to transport the 
resource. If such a suspension is directed or assented to by the 
Secretary, any payment of rental prescribed by such lease shall be 
suspended during such period of suspension of operations and 
production, and the term of the lease shall be extended by adding any 
such suspension period thereto;
            (10) provide that whenever the owner of a nonproducing 
        lease fails to comply with any of the provisions of this Act, 
        or of any applicable provision of Federal or State 
        environmental law, or of the lease, or of any regulation issued 
        under this title, such lease may be canceled by the Secretary 
        if such default continues for more than thirty days after 
        mailing of notice by registered letter to the lease owner at 
        the lease owner's post office address of record;
            (11) provide that whenever the owner of any producing lease 
        fails to comply with any of the provisions of this title, or of 
        any applicable provision of Federal or State environmental law, 
        or of the lease, or of any regulation issued under this title, 
        such lease may be forfeited and canceled by any appropriate 
        proceeding brought by the Secretary in any United States 
        district court having jurisdiction under the provisions of this 
        title;
            (12) provide that cancellation of a lease under this title 
        shall in no way release the owner of the lease from the 
        obligation to provide for reclamation of the lease site;
            (13) allow the lessee, at the discretion of the Secretary, 
        to make written relinquishment of all rights under any lease 
        issued pursuant to this title. The Secretary shall accept such 
        relinquishment by the lessee of any lease issued under this 
        title where there has not been surface disturbance on the lands 
        covered by the lease;
            (14) provide that for the purpose of conserving the natural 
        resources of any oil or gas pool, field, or like area, or any 
        part thereof, and in order to avoid the unnecessary duplication 
        of facilities, to protect the environment of the Coastal Plain, 
        and to protect correlative rights, the Secretary shall require 
        that, to the greatest extent practicable, lessees unite with 
        each other in collectively adopting and operating under a 
        cooperative or unit plan of development for operation of such 
        pool, field, or like area, or any part thereof, and the 
        Secretary is also authorized and directed to enter into such 
        agreements as are necessary or appropriate for the protection 
        of the United States against drainage;
            (15) require that the holder of a lease or leases on 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 adversely affected in connection with 
exploration, development, production or transportation activities on a 
lease within the Coastal Plain by the holder of a lease or as a result 
of activities conducted on the lease by any of the leaseholder's 
subcontractors or agents;
            (16) provide that the holder of a lease may not delegate or 
        convey, by contract of otherwise, the reclamation 
        responsibility and liability to another party without the 
        express written approval of the Secretary;
            (17) provide that the standard of reclamation for lands 
        required to be reclaimed under this title 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 production activities, or upon application by 
        the lessee, to a higher or better use as approved by the 
        Secretary;
            (18) contain the terms and conditions relating to 
        protection of fish and wildlife, their habitat, and the 
        environment, as required by section 503(a) of this title;
            (19) provide that the holder of a lease, its agents, and 
        contractors use best efforts to provide a fair share, as 
        determined by the level of obligation previously agreed to in 
        the 1974 agreement implementing section 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;
            (20) require project agreements to the extent feasible that 
        will ensure productivity and consistency recognizing a national 
        interest in both labor stability and the ability of 
        construction labor and management to meet the particular needs 
        and conditions of projects to be developed under leases issued 
        pursuant to this Act; and
            (21) contain such other provisions as the Secretary 
        determines necessary to ensure compliance with the provisions 
        of this title and the regulations issued under this title.

SEC. 509. BONDING REQUIREMENTS TO ENSURE FINANCIAL RESPONSIBILITY OF 
              LESSEE AND AVOID FEDERAL LIABILITY.

    (a) Requirement.--The Secretary shall, by rule or regulation, 
establish such standards as may be necessary to ensure that an adequate 
bond, surety, or other financial arrangement will be established prior 
to the commencement of surface disturbing activities on any lease, to 
ensure the complete and timely reclamation of the lease tract, and the 
restoration of any lands or surface waters adversely affected by lease 
operations after the abandonment or cessation of oil and gas operations 
on the lease. Such bond, surety, or financial arrangement is in 
addition to, and not in lieu, of any bond, surety, or financial 
arrangement required by any other regulatory authority or required by 
any other provision of law.
    (b) Amount.--The bond, surety, or financial arrangement shall be in 
an amount--
            (1) to be determined by the Secretary to provide for 
        reclamation of the lease site in accordance with an approved or 
        revised exploration or development and production plan; plus
            (2) set by the Secretary consistent with the type of 
        operations proposed, to provide the means for rapid and 
        effective cleanup, and to minimize damages resulting from an 
        oil spill, the escape of gas, refuse, domestic wastewater, 
        hazardous or toxic substances, or fire caused by oil and gas 
        activities.
    (c) Adjustment.--In the event that an approved exploration or 
development and production plan is revised, the Secretary may adjust 
the amount of the bond, surety, or other financial arrangement to 
conform to such modified plan.
    (d) Duration.--The responsibility and liability of the lessee and 
its surety under the bond, surety, or other financial arrangement shall 
continue until such time as the Secretary determines that there has 
been compliance with the terms and conditions of the lease and all 
applicable law.
    (e) Termination.--Within sixty days after determining that there 
has been compliance with the terms and conditions of the lease and all 
applicable laws, the Secretary, after consultation with affected 
Federal and State agencies, shall notify the lessee that the period of 
liability under the bond, surety, or other financial arrangement has 
been terminated.

SEC. 510. OIL AND GAS INFORMATION.

    (a) In General.--(1) Any lessee or permittee conducting any 
exploration for, or development or production of, oil or gas pursuant 
to this title shall provide the Secretary access to all data and 
information from any lease granted pursuant to this title (including 
processed and analyzed) obtained from such activity and shall provide 
copies of such data and information as the Secretary may request. Such 
data and information shall be provided in accordance with regulations 
which the Secretary shall prescribe.
    (2) If processed and analyzed information provided pursuant to 
paragraph (1) is provided in good faith by the lessee or permittee, 
such lessee or permittee shall not be responsible for any consequence 
of the use or of reliance upon such processed and analyzed information.
    (3) Whenever any data or information is provided to the Secretary, 
pursuant to paragraph (1)--
            (A) by a lessee or permittee, in the form and manner of 
        processing which is utilized by such lessee or permittee in the 
        normal conduct of business, the Secretary shall pay the 
        reasonable cost of reproducing such data and information; or
            (B) by a lessee or permittee, in such other form and manner 
        of processing as the Secretary may request, the Secretary shall 
        pay the reasonable cost of processing and reproducing such data 
        and information.
    (b) Regulations.--The Secretary shall prescribe regulations to: (1) 
assure that the confidentiality of privileged or proprietary 
information received by the Secretary under this section will be 
maintained; and (2) set forth the time periods and conditions which 
shall be applicable to the release of such information.

SEC. 511. EXPEDITED JUDICIAL REVIEW.

    (a) Any complaint seeking judicial review of any provision in this 
title, or any other action of the Secretary under this title may be 
filed in any appropriate district court of the United States, and such 
complaint must be filed within ninety days from the date of the action 
being challenged, or after such date if such complaint is based solely 
on grounds arising after such ninetieth day, in which case the 
complaint must be filed within ninety days after the complainant knew 
or reasonably should have known of the grounds for the complaint: 
Provided, That any complaint seeking judicial review of an action of 
the Secretary in promulgating any regulation under this title may be 
filed only in the United States Court of Appeals for the District of 
Columbia.
    (b) 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. 512. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN.

    Notwithstanding title XI of the Alaska National Interest Lands 
Conservation Act of 1980 (16 U.S.C. 3161 et seq.), the Secretary is 
authorized and directed to grant, in accordance with the provisions of 
section 28 (c) through (t) and (v) through (y) of the Mineral Leasing 
Act of 1920 (30 U.S.C. 185), rights-of-way and easements across the 
Coastal Plain for the transportation of oil and gas under such terms 
and conditions as may be necessary so as not to result in a significant 
adverse effect on the fish and wildlife, subsistence resources, their 
habitat, and the environment of the Coastal Plain. Such terms and 
conditions shall include requirements that facilities be sited or 
modified so as to avoid unnecessary duplication of roads and pipelines. 
The regulations issued as required by section 504 of this title shall 
include provisions granting rights-of-way and easements across the 
Coastal Plain.

SEC. 513. ENFORCEMENT OF SAFETY AND ENVIRONMENTAL REGULATIONS TO ENSURE 
              COMPLIANCE WITH TERMS AND CONDITIONS OF LEASE.

    (a) Responsibility of the Secretary.--The Secretary shall 
diligently enforce all regulations, lease terms, conditions, 
restrictions, prohibitions, and stipulations promulgated pursuant to 
this title.
    (b) Responsibility of Holders of Lease.--It shall be the 
responsibility of any holder of a lease under this title to--
            (1) maintain all operations within such lease area in 
        compliance with regulations intended to protect persons and 
        property on, and fish and wildlife, their habitat, subsistence 
        resources, and the environment of, the Coastal Plain; and
            (2) allow prompt access at the site of any operations 
        subject to regulation under this title to any appropriate 
        Federal or State inspector, and to provide such documents and 
        records which are pertinent to occupational or public health, 
        safety, or environmental protection, as may be requested.
    (c) On-Site Inspection.--The Secretary shall promulgate regulations 
to provide for--
            (1) scheduled onsite inspection by the Secretary, at least 
        twice a year, of facility on the Coastal Plain which is subject 
        to any environmental or safety regulation promulgated pursuant 
        to this title or conditions contained in any lease issue 
        pursuant to this title to assure compliance with such 
        environmental or safety regulations or conditions; and
            (2) periodic onsite inspection by the Secretary at least 
        once a year without advance notice to the operator of such 
        facility to assure compliance with all environmental or safety 
        regulations.

SEC. 514. NEW REVENUES.

    Notwithstanding any other provision of law, all revenues received 
by the Federal Government from competitive bids, sales, bonuses, 
royalties, rents, fees, or interest derived from the leasing of oil and 
gas within the Coastal Plain shall be deposited into the Treasury of 
the United States, solely as provided in this section. The Secretary of 
the Treasury shall pay to the State of Alaska the same percentage of 
such revenues as is set forth under the heading ``EXPLORATION OF 
NATIONAL PETROLEUM RESERVE IN ALASKA'' in Public Law 96-514 (94 Stat. 
2957, 2964) semiannually to the State of Alaska, on March 30 and 
September 30 of each year and shall deposit the balance of all such 
revenues as miscellaneous receipts in the Treasury.

     TITLE VI--IMPROVEMENTS TO FEDERAL OIL AND GAS LEASE MANAGEMENT

SEC. 601. TITLE.

    This title may be cited as the ``Federal Oil and Gas Lease 
Management Improvement Act of 2000''.

SEC. 602. DEFINITIONS.

    In this title--
    (a) Application for a Permit To Drill.--The term ``application for 
a permit to drill'' means a drilling plan including design, mechanical, 
and engineering aspects for drilling a well.
    (b) Federal Land.--
            (1) In general.--The term ``Federal land'' means all land 
        and interests in land owned by the United States that are 
        subject to the mineral leasing laws, including mineral 
        resources or mineral estates reserved to the United States in 
        the conveyance of a surface or nonmineral estate.
            (2) Exclusion.--The term ``Federal land'' does not 
        include--
                    (i) Indian land (as defined in section 3 of the 
                Federal Oil and Gas Royalty Management Act of 1982 (30 
                U.S.C. 1702)); or
                    (ii) submerged land on the Outer Continental Shelf 
                (as defined in section 2 of the Outer Continental Shelf 
                Lands Act (43 U.S.C. 1331)).
    (c) Oil and Gas Conservation Authority.--The term ``oil and gas 
conservation authority'' means the agency or agencies in each State 
responsible for regulating for conservation purposes operations to 
explore for and produce oil and natural gas.
    (d) Project.--The term ``project'' means an activity by a lessee, 
an operator, or an operating rights owner to explore for, develop, 
produce, or transport oil or gas resources.
    (e) Secretary.--The term ``Secretary'' means--
            (1) the Secretary of the Interior, with respect to land 
        under the administrative jurisdiction of the Department of the 
        Interior; and
            (2) the Secretary of Agriculture, with respect to land 
        under the administrative jurisdiction of the Department of 
        Agriculture.
    (f) Surface Use Plan of Operations.--The term ``surface use plan of 
operations'' means a plan for surface use, disturbance, and 
reclamation.

SEC. 603. NO PROPERTY RIGHT.

    Nothing in this title gives a State a property right or interest in 
any Federal lease or land.

 Subtitle A--State Option To Regulate Oil and Gas Lease Operations on 
                              Federal Land

SEC. 610. TRANSFER OF AUTHORITY.

    (a) Notification.--Not before the date that is 180 days after the 
date of enactment of this Act, a State may notify the Secretary of its 
intent to accept authority for regulation of operations, as described 
in subparagraphs (A) through (K) of subsection (b)(2), under oil and 
gas leases on Federal land within the State.
    (b) Transfer of Authority.--
            (1) In general.--Effective 180 days after the Secretary 
        receives the State's notice, authority for the regulation of 
        oil and gas leasing operations is transferred from the 
        Secretary to the State.
            (2) Authority included.--The authority transferred under 
        paragraph (1) includes--
                    (A) processing and approving applications for 
                permits to drill, subject to surface use agreements and 
                other terms and conditions determined by the Secretary;
                    (B) production operations;
                    (C) well testing;
                    (D) well completion;
                    (E) well spacing;
                    (F) communization;
                    (G) conversion of a producing well to a water well;
                    (H) well abandonment procedures;
                    (I) inspections;
                    (J) enforcement activities; and
                    (K) site security.
    (c) Retained Authority.--The Secretary shall--
            (1) retain authority over the issuance of leases and the 
        approval of surface use plans of operations and project-level 
        environmental analyses; and
            (2) spend appropriated funds to ensure that timely 
        decisions are made respecting oil and gas leasing, taking into 
        consideration multiple uses of Federal land, socioeconomic and 
        environmental impacts, and the results of consultations with 
        State and local government officials.

SEC. 611. ACTIVITY FOLLOWING TRANSFER OF AUTHORITY.

    (a) Federal Agencies.--Following the transfer of authority, no 
Federal agency shall exercise the authority formerly held by the 
Secretary as to oil and gas lease operations and related operations on 
Federal land.
    (b) State Authority.--
            (1) In general.--Following the transfer of authority, each 
        State shall enforce its own oil and gas conservation laws and 
        requirements pertaining to transferred oil and gas lease 
        operations and related operations with due regard to the 
        national interest in the expedited, environmentally sound 
        development of oil and gas resources in a manner consistent 
        with oil and gas conservation principles.
            (2) Appeals.--Following a transfer of authority under 
        section 610, an appeal of any decision made by a State oil and 
        gas conservation authority shall be made in accordance with 
        State administrative procedures.
    (c) Pending Enforcement Actions.--The Secretary may continue to 
enforce any pending actions respecting acts committed before the date 
on which authority is transferred to a State under section 610 until 
those proceedings are concluded.
    (d) Pending Applications.--
            (1) Transfer to state.--All applications respecting oil and 
        gas lease operations and related operations on Federal land 
        pending before the Secretary on the date on which authority is 
        transferred under section 610 shall be immediately transferred 
        to the oil and gas conservation authority of the State in which 
        the lease is located.
            (2) Action by the state.--The oil and gas conservation 
        authority shall act on the application in accordance with State 
        laws (including regulations) and requirements.

         Subtitle B--Use of Cost Savings From State Regulation

SEC. 621. COMPENSATION FOR COSTS.

    (a) In General.--Subject to the availability of appropriations, the 
Secretary shall compensate any State for costs incurred to carry out 
the authorities transferred under section 610.
    (b) Payment Schedule.--Payments shall be made not less frequently 
than every quarter.
    (c) Cost Breakdown Report.--Each State seeking compensation shall 
report to the Secretary a cost breakdown for the authorities 
transferred.
    (d) Limitation on Amount.--
            (1) In general.--Compensation to a State may not exceed 50 
        percent of the Secretary's allocated cost for oil and gas 
        leasing activities under section 35(b) of the Act of February 
        25, 1920 (commonly known as the ``Mineral Leasing Act'') (30 
        U.S.C. 191(b)) for the State for fiscal year 1997.
            (2) Adjustment.--The Secretary shall adjust the maximum 
        level of cost compensation at least once every 2 years to 
        reflect any increases in the Consumer Price Index (all items, 
        United States city average) as prepared by the Department of 
        Labor, using 1997 as the baseline year.

SEC. 622. EXCLUSION OF COSTS OF PREPARING PLANNING DOCUMENTS AND 
              ANALYSES.

    Section 35 of the Act of February 25, 1920 (30 U.S.C. 191(b)) is 
amended by adding at the end the following:
            ``(6) The Secretary shall not include, for the purpose of 
        calculating the deduction under paragraph (1), costs of 
        preparing resource management planning documents and analyses 
        for areas in which mineral leasing is excluded or areas in 
        which the primary activity under review is not mineral leasing 
        and development.''.

SEC. 623. RECEIPT SHARING.

    Section 35(b) of the Act of February 25, 1920 (30 U.S.C. 191(b)) is 
amended by striking ``paid to States'' and inserting ``paid to States 
(other than States that accept a transfer of authority under section 
610 of the Federal Oil and Gas Lease Management Act of 2000)''.

              Subtitle C--Streamlining and Cost Reduction

SEC. 631. APPLICATIONS.

    (a) Limitation on Cost Recovery.--Notwithstanding sections 304 and 
504 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 
1734, 1764) and section 9701 of title 31, United State Code, the 
Secretary shall not recover the Secretary's costs with respect to 
applications and other documents relating to oil and gas leases.
    (b) Completion of Planning Documents and Analyses.--
            (1) In general.--The Secretary shall complete any resource 
        management planning documents and analyses not later than 90 
        days after receiving any offer, application, or request for 
        which a planning document or analysis is required to be 
        prepared.
            (2) Preparation by applicant or lessee.--If the Secretary 
        is unable to complete the document or analysis within the time 
        prescribed by paragraph (1), the Secretary shall notify the 
        applicant or lessee of the opportunity to prepare the required 
        document or analysis for the agency's review and use in 
        decisionmaking.
    (c) Reimbursement for Costs of NEPA of Analyses, Documentation, and 
Studies.--If--
            (1) adequate funding to enable the Secretary to timely 
        prepare a project-level analysis required under the National 
        Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) with 
        respect to an oil or gas lease is not appropriated; and
            (2) the lessee, operator, or operating rights owner 
        voluntarily pays for the cost of the required analysis, 
        documentation, or related study;
the Secretary shall reimburse the lessee, operator, or operating rights 
owner for its costs through royalty credits attributable to the lease, 
unit agreement, or project area.

SEC. 632. TIMELY ISSUANCE OF DECISIONS.

    (a) In General.--The Secretary shall ensure the timely issuance of 
Federal agency decisions respecting oil and gas leasing and operations 
on Federal land.
    (b) Offer To Lease.--
            (1) Deadline.--The Secretary shall accept or reject an 
        offer to lease not later than 90 days after the filing of the 
        offer.
            (2) Failure to meet deadline.--If an offer is not acted 
        upon within that time, the offer shall be deemed to have been 
        accepted.
    (c) Application for Permit To Drill.--
            (1) Deadline.--The Secretary and a State that has accepted 
        a transfer of authority under section 610 shall approve or 
        disapprove an application for permit to drill not later than 30 
        days after receiving a complete application.
            (2) Failure to meet deadline.--If the application is not 
        acted on within the time prescribed by paragraph (1), the 
        application shall be deemed to have been approved.
    (d) Surface Use Plan of Operations.--The Secretary shall approve or 
disapprove a surface use plan of operations not later than 30 days 
after receipt of a complete plan.
    (e) Administrative Appeals.--
            (1) Deadline.--From the time that a Federal oil and gas 
        lessee or operator files a notice of administrative appeal of a 
        decision or order of an officer or employee of the Department 
        of the Interior or the Forest Service respecting a Federal oil 
        and gas Federal lease, the Secretary shall have 2 years in 
        which to issue a final decision in the appeal.
            (2) Failure to meet deadline.--If no final decision has 
        been issued within the time prescribed by paragraph (1), the 
        appeal shall be deemed to have been granted.

SEC. 633. ELIMINATION OF UNWARRANTED DENIALS AND STAYS.

     (a) In General.--The Secretary shall ensure that unwarranted 
denials and stays of lease issuance and unwarranted restrictions on 
lease operations are eliminated from the administration of oil and gas 
leasing on Federal land.
    (b) Land Designated for Multiple Use.--
            (1) In general.--Land designated as available for multiple 
        use under Bureau of Land Management resource management plans 
        and Forest Service leasing analyses shall be available for oil 
        and gas leasing without lease stipulations more stringent than 
        restrictions on surface use and operations imposed under the 
        laws (including regulations) of the State oil and gas 
        conservation authority unless the Secretary includes in the 
        decision approving the management plan or leasing analysis a 
        written explanation why more stringent stipulations are 
        warranted.
            (2) Appeal.--Any decision to require a more stringent 
        stipulation shall be administratively appealable and, following 
        a final agency decision, shall be subject to judicial review.
    (c) Rejection of Offer To Lease.--
            (1) In general.--If the Secretary rejects an offer to lease 
        on the ground that the land is unavailable for leasing, the 
        Secretary shall provide a written, detailed explanation of the 
        reasons the land is unavailable for leasing.
            (2) Previous resource management decision.--If the 
        determination of unavailability is based on a previous resource 
        management decision, the explanation shall include a careful 
        assessment of whether the reasons underlying the previous 
        decision are still persuasive.
            (3) Segregation of available land from unavailable land.--
        The Secretary may not reject an offer to lease land available 
        for leasing on the ground that the offer includes land 
        unavailable for leasing, and the Secretary shall segregate 
available land from unavailable land, on the offeror's request 
following notice by the Secretary, before acting on the offer to lease.
    (d) Disapproval or Required Modification of Surface Use Plans of 
Operations and Application for Permit To Drill.--The Secretary shall 
provide a written, detailed explanation of the reasons for disapproving 
or requiring modifications of any surface use plan of operations or 
application for permit to drill.
    (e) Effectiveness of Decision.--A decision of the Secretary 
respecting an oil and gas lease shall be effective pending 
administrative appeal to the appropriate office within the Department 
of the Interior or the Department of Agriculture unless that office 
grants a stay in response to a petition satisfying the criteria for a 
stay established by section 4.21(b) of title 43, Code of Federal 
Regulations (or any successor regulation).

SEC. 634. REPORTS.

    (a) In General.--Not later than March 31, 2001, the Secretaries 
shall jointly submit to the Congress a report explaining the most 
efficient means of eliminating overlapping jurisdiction, duplication of 
effort, and inconsistent policymaking and policy implementation as 
between the Bureau of Land Management and the Forest Service.
    (b) Recommendations.--The report shall include recommendations on 
statutory changes needed to implement the report's conclusions.

SEC. 635. SCIENTIFIC INVENTORY OF OIL AND GAS RESERVES.

    (a) In General.--Not later than March 31, 2001, the Secretary of 
the Interior, in consultation with the Director of the United States 
Geological Survey, shall publish, through notice in the Federal 
Register, a science-based national inventory of the oil and gas 
reserves and potential resources underlying Federal land and the Outer 
Continental Shelf.
    (b) Contents.--The inventory shall--
            (1) indicate what percentage of the oil and gas reserves 
        and resources is currently available for leasing and 
        development; and
            (2) specify the percentages of the reserves and resources 
        that are on--
                    (A) land that is open for leasing as of the date of 
                enactment of this Act that has never been leased;
                    (B) land that is open for leasing or development 
                subject to no surface occupancy stipulations; and
                    (C) land that is open for leasing or development 
                subject to other lease stipulations that have 
                significantly impeded or prevented, or are likely to 
                significantly impede or prevent, development; and
            (3) indicate the percentage of oil and gas resources that 
        are not available for leasing or are withdrawn from leasing.
    (c) Public Comment.--
            (1) In general.--The Secretary of the Interior shall invite 
        public comment on the inventory to be filed not later than 
        September 30, 2001.
            (2) Resource management decisions.--Specifically, the 
        Secretary of the Interior shall invite public comment on the 
        effect of Federal resource management decisions on past and 
        future oil and gas development.
    (d) Report.--
            (1) In general.--Not later than March 31, 2002, the 
        Secretary of the Interior shall submit to the President of the 
        Senate and the Speaker of the House of Representatives a report 
        comprised of the revised inventory and responses to the public 
        comments.
            (2) Contents.--The report shall specifically indicate what 
        steps the Secretaries believe are necessary to increase the 
        percentage of land open for development of oil and gas 
        resources.

                 Subtitle D--Federal Royalty Certainty

SEC. 641. DEFINITIONS.

    In this subtitle.--
    (a) Marketable Condition.--The term ``marketable condition'' means 
lease production that is sufficiently free from impurities and 
otherwise in a condition that the production will be accepted by a 
purchaser under a sales contract typical for the field or area.
    (b) Reasonable Commercial Rate.--
            (1) In general.--The term ``reasonable commercial rate'' 
        means--
                    (A) in the case of an arm's-length contract, the 
                actual cost incurred by the lessee; or
                    (B) in the case of a non-arm's-length contract--
                            (i) the rate charged in a contract for 
                        similar services in the same area between 
                        parties with opposing economic interests; or
                            (ii) if there are no arm's-length contracts 
                        for similar services in the same area, the just 
                        and reasonable rate for the transportation 
                        service rendered by the lessee or lessee's 
                        affiliate.
            (2) Disputes.--Disputes between the Secretary and a lessee 
        over what constitutes a just and reasonable rate for such 
        service shall be resolved by the Federal Energy Regulatory 
        Commission.

SEC. 642. AMENDMENT OF OUTER CONTINENTAL SHELF LANDS ACT.

    Section 8(b)(3) of the Outer Continental Shelf Lands Act (43 U.S.C. 
1337(b)(3)) is amended by striking the semicolon at the end and adding 
the following:
        ``: Provided, That if the payment is in value or amount, the 
        royalty due in value shall be based on the value of oil or gas 
        production at the lease in marketable condition, and the 
        royalty due in amount shall be based on the royalty share of 
        production at the lease; if the payment in value or amount is 
        calculated from a point away from the lease, the payment shall 
        be adjusted for quality and location differentials, and the 
        lessee shall be allowed reimbursements at a reasonable 
        commercial rate for transportation (including transportation to 
        the point where the production is put in marketable condition), 
        marketing, processing, and other services beyond the lease 
        through the point of sale, other disposition, or delivery;''.

SEC. 643. AMENDMENT OF MINERAL LEASING ACT.

    Section 17(c) of the Act of February 25, 1920 (30 U.S.C. 226(c)) 
(commonly known as the ``Mineral Leasing Act''), is amended by adding 
at the end the following:
            ``(3) Royalty due in value.--
                    ``(A) In general.--Royalty due in value shall be 
                based on the value of oil or gas production at the 
                lease in marketable condition, and the royalty due in 
                amount shall be based on the royalty share of 
                production at the lease.
                    ``(B) Calculation of value or amount from a point 
                away from a lease.--If the payment in value or amount 
                is calculated from a point away from the lease--
                            ``(i) the payment shall be adjusted for 
                        quality and location differentials; and
                            ``(ii) the lessee shall be allowed 
                        reimbursements at a reasonable commercial rate 
                        for transportation (including transportation to 
the point where the production is put in marketable condition), 
marketing, processing, and other services beyond the lease through the 
point of sale, other disposition, or delivery;''.

SEC. 644. INDIAN LAND.

    This subtitle shall not apply with respect to Indian land.

              Subtitle E--Royalty Reinvestment in America

SEC. 651. ROYALTY INCENTIVE PROGRAM.

    (a) In General.--To encourage exploration and development 
expenditures on Federal land and the Outer Continental Shelf for the 
development of oil and gas resources when the cash price of West Texas 
Intermediate crude oil, as posted on the Dow Jones Commodities Index 
chart is less than $18 per barrel for 90 consecutive pricing days or 
when natural gas prices as delivered at Henry Hub, Louisiana, are less 
than $2.30 per million British thermal units for 90 consecutive days, 
the Secretary shall allow a credit against the payment of royalties on 
Federal oil production and gas production, respectively, in an amount 
equal to 20 percent of the capital expenditures made on exploration and 
development activities on Federal oil and gas leases.
    (b) No Crediting Against Onshore Federal Royalty Obligations.--In 
no case shall such capital expenditures made on Outer Continental Shelf 
leases be credited against onshore Federal royalty obligations.

SEC. 652. MARGINAL WELL PRODUCTION INCENTIVES.

    To enhance the economics of marginal oil and gas production by 
increasing the ultimate recovery from marginal wells when the cash 
price of West Texas Intermediate crude oil, as posted on the Dow Jones 
Commodities Index Chart is less than $18 per barrel for 90 consecutive 
pricing days or when natural gas prices are delivered at Henry Hub, 
Louisiana, are less than $2.30 per million British thermal units for 90 
consecutive days, the Secretary shall reduce the royalty rate as 
production declines for--
            (1) onshore oil wells producing less than 30 barrels per 
        day;
            (2) onshore gas wells producing less than 120 million 
        British thermal units per day;
            (3) offshore oil wells producing less than 300 barrels of 
        oil per day; and
            (4) offshore gas wells producing less than 1,200 million 
        British thermal units per day.

SEC. 653. SUSPENSION OF PRODUCTION ON OIL AND GAS OPERATIONS.

    (a) In General.--Any person operating an oil well under a lease 
issued under the Act of February 25, 1920 (commonly known as the 
``Mineral Leasing Act'') (30 U.S.C. 181 et seq.) or the Mineral Leasing 
Act for Acquired Lands (30 U.S.C. 351 et seq.) may submit a notice to 
the Secretary of the Interior of suspension of operation and production 
at the well.
    (b) Production Quantities Not a Factor.--A notice under subsection 
(a) may be submitted without regard to per day production quantities at 
the well and without regard to the requirements of subsection (a) of 
section 3103.4-4 of title 43 of the Code of Federal Regulations (or any 
successor regulation) respecting the granting of such relief, 
except that the notice shall be submitted to an office in the 
Department of the Interior designated by the Secretary of the Interior.
    (c) Period of Relief.--On submission of a notice under subsection 
(a) for an oil well, the operator of the well may suspend operation and 
production at the well for a period beginning on the date of submission 
of the notice and ending on the later of--
            (1) the date that is 2 years after the date on which the 
        suspension of operation and production commences; or
            (2) the date on which the cash price of West Texas 
        Intermediate crude oil, as posted on the Dow Jones Commodities 
        Index chart is greater than $15 per barrel for 90 consecutive 
        pricing days.

 TITLE VII--FRONTIER OIL AND GAS EXPLORATION AND DEVELOPMENT INCENTIVES

SEC. 701. TITLE.

    This title may be cited as the ``Frontier Exploration and 
Development Incentives Act of 2000''.

SEC. 702. AMENDMENTS TO THE OUTER CONTINENTAL SHELF LANDS ACT.

    (a) Section 8(a)(1)(D) of the Outer Continental Shelf Lands Act (43 
U.S.C. 1337(a)(1)(D)) is amended by striking the word ``area;'' and 
inserting in lieu thereof the word ``area,'' and the following new 
text: ``except in the Arctic areas of Alaska, where the Secretary is 
authorized to set the net profit share at 16\2/3\ percent. For purposes 
of this section, `Arctic areas' means the Beaufort Sea and Chukchi Sea 
Planning Areas of Alaska.''.
    (b) Section 8(a) of the Outer Continental Shelf Lands Act (43 
U.S.C. 1337(a)) is amended by adding a new subparagraph (10) at the end 
thereof:
            ``(10) After an oil and gas lease is granted pursuant to 
        any of the bidding systems of paragraph (1) of this subsection, 
the Secretary shall reduce any future royalty or rental obligation of 
the lessee on any lease issued by the Secretary (and proposed by the 
lessee for such reduction) by an amount equal to (a) 10 percent of the 
qualified costs of exploratory wells drilled or geophysical work 
performed on any lease issued by the Secretary, whichever is greater, 
pursuant to this Act in Arctic areas and (b) an additional 10 percent 
of the qualified costs of any such exploratory wells which are located 
ten or more miles from another well drilled for oil and gas. For 
purposes of this Act--`qualified costs' shall mean the costs allocated 
to the exploratory well or geophysical work in support of an 
exploration program pursuant to 26 U.S.C. as amended; `exploratory 
well' shall mean either an exploratory well as defined by the United 
States Securities and Exchange Commission in 17 CFR 210.4-10(a)(10), as 
amended, or a well three or more miles from any oil or gas well or a 
pipeline which transports oil or gas to a market or terminal; 
`geophysical work' shall mean all geophysical data gathering methods 
used in hydrocarbon exploration and includes seismic, gravity, 
magnetic, and electromagnetic measurements; and, all distances shall be 
measured in horizontal distance. When a measurement beginning or ending 
point is a well, the measurement point shall be the bottom hole 
location of that well.''.

  TITLE VIII--TAX MEASURES TO ENHANCE DOMESTIC OIL AND GAS PRODUCTION

                 Subtitle A--Marginal Well Preservation

SEC. 801. SHORT TITLE; PURPOSE.

    (a) This subtitle may be cited as the ``Marginal Well Preservation 
Act of 2000''.
    (b) The purpose of section 802 is to prevent the abandonment of 
marginal oil and gas wells responsible for half of the domestic 
production of oil and gas in the United States and of section 803 is to 
recognize that geological and geophysical expenditures and delay 
rentals are ordinary and necessary business expenses that should be 
deducted in the year the expense is incurred.

SEC. 802. TAX CREDIT FOR MARGINAL DOMESTIC OIL AND NATURAL GAS WELL 
              PRODUCTION.

    (a) Subpart D of part IV of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to business credits) is amended 
by adding at the end the following new section:

``SEC. 45D. CREDIT FOR PRODUCING OIL AND GAS FROM MARGINAL WELLS.

    ``(a) General Rule.--For purposes of section 38, the marginal well 
production credit for any taxable year is an amount equal to the 
product of--
            ``(1) the credit amount, and
            ``(2) the qualified crude oil production and the qualified 
        natural gas production which is attributable to the taxpayer.
    ``(b) Credit Amount.--For purposes of this section--
            ``(1) In general.--The credit amount is--
                    ``(A) $3 per barrel of qualified crude oil 
                production, and
                    ``(B) 50 cents per 1,000 cubic feet of qualified 
                natural gas production.
            ``(2) Reduction as oil and gas prices increase.--
                    ``(A) In general.--The $3 and 50 cents amounts 
                under paragraph (1) shall each be reduced (but not 
                below zero) by an amount which bears the same ratio to 
                such amount (determined without regard to this 
                paragraph) as--
                            ``(i) the excess (if any) of the applicable 
                        reference price over $14 ($1.56 for qualified 
                        natural gas production), bears to
                            ``(ii) $3 ($0.33 for qualified natural gas 
                        production).
                The applicable reference price for a taxable year is 
                the reference price for the calendar year preceding the 
                calendar year in which the taxable year begins.
                    ``(B) Inflation adjustment.--In the case of any 
                taxable year beginning in a calendar year after 2000, 
                each of the dollar amounts contained in subparagraph 
                (A) shall be increased to an amount equal to such 
                dollar amount multiplied by the inflation adjustment 
                factor for such calendar year (determined under section 
                43(b)(3)(B) by substituting `1999' for `1990').
                    ``(C) Reference price.--For purposes of this 
                paragraph, the term `reference price' means, with 
                respect to any calendar year--
                            ``(i) in the case of qualified crude oil 
                        production, the reference price determined 
                        under section 29(d)(2)(C), and
                            ``(ii) in the case of qualified natural gas 
                        production, the Secretary's estimate of the 
                        annual average wellhead price per 1,000 cubic 
feet for all domestic natural gas.
    ``(c) Qualified Crude Oil and Natural Gas Production.--For purposes 
of this section--
            ``(1) In general.--The terms `qualified crude oil 
        production' and `qualified natural gas production' mean 
        domestic crude oil or natural gas which is produced from a 
        marginal well.
            ``(2) Limitation on amount of production which may 
        qualify.--
                    ``(A) In general.--Crude oil or natural gas 
                produced during any taxable year from any well shall 
                not be treated as qualified crude oil production or 
                qualified natural gas production to the extent 
                production from the well during the taxable year 
                exceeds 1,095 barrels or barrel equivalents.
                    ``(B) Proportionate reductions.--
                            ``(i) Short taxable years.--In the case of 
                        a short taxable year, the limitations under 
                        this paragraph shall be proportionately reduced 
                        to reflect the ratio which the number of days 
                        in such taxable year bears to 365.
                            ``(ii) Wells not in production entire 
                        year.--In the case of a well which is not 
                        capable of production during each day of a 
                        taxable year, the limitations under this 
                        paragraph applicable to the well shall be 
                        proportionately reduced to reflect the ratio 
                        which the number of days of production bears to 
                        the total number of days in the taxable year.
            ``(3) Definitions.--
                    ``(A) Marginal well.--The term `marginal well' 
                means a domestic well--
                            ``(i) the production from which during the 
                        taxable year is treated as marginal production 
                        under section 613A(c)(6), or
                            ``(ii) which, during the taxable year--
                                    ``(I) has average daily production 
                                of not more than 25 barrel equivalents, 
                                and
                                    ``(II) produces water at a rate not 
                                less than 95 percent of total well 
                                effluent.
                    ``(B) Crude oil, etc.--The terms `crude oil', 
                `natural gas', `domestic', and `barrel' have the 
                meanings given such terms by section 613A(e).
                    ``(C) Barrel equivalent.--The term `barrel 
                equivalent' means, with respect to natural gas, a 
                conversion ratio of 6,000 cubic feet of natural gas to 
                1 barrel of crude oil.
    ``(d) Other Rules.--
            ``(1) Production attributable to the taxpayer.--In the case 
        of a marginal well in which there is more than one owner of 
        operating interests in the well and the crude oil or natural 
        gas production exceeds the limitation under subsection (c)(2), 
        qualifying crude oil production or qualifying natural gas 
        production attributable to the taxpayer shall be determined on 
        the basis of the ratio which taxpayer's revenue interest in the 
        production bears to the aggregate to the revenue interests of 
all operating interest owners in the production.
            ``(2) Operating interest required.--Any credit under this 
        section may be claimed only on production which is attributable 
        to the holder of an operating interest.
            ``(3) Production from nonconventional sources excluded.--In 
        the case of production from a marginal well which is eligible 
        for the credit allowed under section 29 for the taxable year, 
        no credit shall be allowable under this section unless the 
        taxpayer elects not to claim credit under section 29 with 
        respect to the well.''.
    (b) Credit Treated as Business Credit.--Section 38(b) of such Code 
is amended by striking ``plus'' at the end of paragraph (11), by 
striking the period at the end of paragraph (12) and inserting ``, 
plus'', and by adding at the end of the following new paragraph:
            ``(13) the marginal oil and gas well production credit 
        determined under section 45D(a).''.
    (c) Credit Allowed Against Regular and Minimum Tax.--
            (1) In general.--Subsection (c) of section 38 of such Code 
        (relating to limitation based on amount of tax) is amended by 
        redesignating paragraph (3) as paragraph (4) and by inserting 
        after paragraph (2) the following new paragraph:
            ``(3) Special rules for marginal oil and gas well 
        production credit.--
                    ``(A) In general.--In the case of the marginal oil 
                and gas well production credit--
                            ``(i) this section and section 39 shall be 
                        applied separately with respect to the credit, 
                        and
                            ``(ii) in applying paragraph (1) to the 
                        credit--
                                    ``(I) subparagraphs (A) and (B) 
                                thereof shall not apply, and
                                    ``(II) the limitation under 
                                paragraph (1) (as modified by subclause 
                                (I)) shall be reduced by the credit 
                                allowed under subsection (a) for the 
                                taxable year (other than the marginal 
                                oil and gas well production credit).
                    ``(B) Marginal oil and gas well production 
                credit.--For purposes of this subsection, the term 
                `marginal oil and gas well production credit' means the 
                credit allowable under subsection (a) by reason of 
                section 45D(a).''.
            (2) Conforming amendment.--Subclause (II) of section 
        38(c)(2)(A)(ii) of such Code is amended by inserting ``or the 
        marginal oil and gas well production credit'' after 
        ``employment credit''.
    (d) Carryback.--Subsection (a) of section 39 of such Code (relating 
to carryback and carryforward of unused credits generally) is amended 
by adding at the end the following new paragraph:
            ``(3) 10-year carryback for marginal oil and gas well 
        production credit.--In the case of the marginal oil and gas 
        well production credit--
                    ``(A) this section shall be applied separately from 
                the business credit (other than the marginal oil and 
                gas well production credit),
                    ``(B) paragraph (1) shall be applied by 
                substituting `10 taxable year' for `1 taxable year' in 
                subparagraph (A) thereof, and
                    ``(C) paragraph (2) shall be applied--
                            ``(i) by substituting `31 taxable years' 
                        for `21 taxable years' in subparagraph (A) 
                        thereof, and
                            ``(ii) by substituting `30 taxable years' 
                        for `20 taxable years' in subparagraph (B) 
                        thereof.''.
    (e) Coordination With Section 29.--Section 29(a) of such Code is 
amended by striking ``There'' and inserting ``At the election of the 
taxpayer, there.''
    (f) Clerical Amendment--The table of sections for subpart D of part 
IV of subchapter A of chapter 1 of such Code is amended by adding at 
the end the following item:

                              ``Sec. 45D. Credit for producting oil and 
                                        gas from marginal wells.''
    (g) Effective Date.--The amendments made by this section shall 
apply to production in taxable years beginning after December 31, 1999.

SEC. 803. ELECTION TO EXPENSE GEOLOGICAL AND GEOPHYSICAL EXPENDITURES 
              AND DELAY RENTAL PAYMENTS.

    (a) Section 263 of the Internal Revenue Code of 1986 (relating to 
capital expenditures) is amended by adding at the end the following new 
subsection:
    ``(j) Geological and Geophysical Expenditures for Oil and Wells.--
Notwithstanding subsection (a), a taxpayer may elect to treat 
geological and geophysical expenses incurred in connection with the 
exploration for, or development of, oil or gas as expenses which are 
not chargeable to capital account. Any expenses so treated shall be 
allowed as a deduction in the taxable year in which paid or 
incurred.''.
    (b) Section 263A(c)(3) of such Code is amended by inserting 
``263(j),'' after ``263(i),''.
    (c)(1) The amendments made by subsections (a) and (b) shall apply 
to expenses paid or incurred after the date of the enactment of this 
Act.
    (2) In the case of any expenses described in section 263(j) of the 
Internal Revenue Code of 1986, as added by subsections (a) and (b), 
which were paid or incurred on or before the date of the enactment of 
this Act, the taxpayer may elect, at such time and in such manner as 
the Secretary of the Treasury may prescribe, to amortize the suspended 
portion of such expenses over the 36-month period beginning with the 
month in which the date of the enactment of this Act occurs. For 
purposes of this paragraph, the suspended portion of any expense is 
that portion of such expense which, as of the first day of the 36-month 
period, has not been included in the cost of a property or otherwise 
deducted.
    (d) Section 263 of such Code (relating to capital expenditures), as 
amended by subsection (b), is amended by adding at the end the 
following new subsection:
    ``(k) Delay Rental Payments for Domestic Oil and Gas Wells.--
            ``(1) In general.--Notwithstanding subsection (a), a 
        taxpayer may elect to treat delay rental payments incurred in 
        connection with the development of oil or gas within the United 
        States (as defined in section 638) as payments which are not 
        chargeable to capital account. Any payments so treated shall be 
        allowed as a deduction in the taxable year in which paid or 
        incurred.
            ``(2) Delay rental payments.--For purposes of paragraph 
        (1), the term `delay rental payment' means an amount paid for 
the privilege of deferring the drilling of an oil or gas well under an 
oil or gas lease.''.

             Subtitle B--Independent Oil and Gas Producers

SEC. 811. 5-YEAR NET OPERATING LOSS CARRYBACK FOR LOSSES ATTRIBUTABLE 
              TO OPERATING MINERAL INTERESTS OF INDEPENDENT OIL AND GAS 
              PRODUCERS.

    (a) Paragraph (1) of section 172(b) of the Internal Revenue Code of 
1986 (relating to years to which loss may be carried) is amended by 
adding at the end the following new subparagraph:
                    ``(H) Losses on operating mineral interests of 
                independent oil and gas producers.--In the case of a 
                taxpayer--
                            ``(i) which has an eligible oil and gas 
                        loss (as defined in subsection (j)) for a 
                        taxable year, and
                            ``(ii) which is not an integrated oil 
                        company (as defined in section 291(b)(4)), such 
                        eligible oil and gas loss shall be a net 
                        operating loss carryback to each of the 5 
                        taxable years preceding the taxable year of 
                        such loss.''.
    (b) Eligible Oil and Gas Loss.--Section 172 of such Code is amended 
by redesignating subsection (j) as subsection (k) and by inserting 
after subsection (i) the following new subsection:
    ``(j) Eligible Oil and Gas Loss.--For purposes of this section--
            ``(1) In general.--The term `eligible oil and gas loss' 
        means the lesser of--
                    ``(A) the amount which would be the net operating 
                loss for the taxable year if only income and deductions 
                attributable to operating mineral interests (as defined 
                in section 614(d)) in oil and gas wells are taken into 
                account, or
                    ``(B) the amount of the net operating loss for such 
                taxable year.
            ``(2) Coordination with subsection (b)(2).--For purposes of 
        applying subsection (b)(2), an eligible oil and gas loss for 
        any taxable year shall be treated in a manner similar to the 
        manner in which a specified liability loss is treated.
            ``(3) Election.--Any taxpayer entitled to a 5-year 
        carryback under subsection (b)(1)(H) from any loss year may 
        elect to have the carryback period with respect to such loss 
        year determined without regard to subsection (b)(1)(H).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to net operating losses for taxable years beginning after 
December 31, 1998.

SEC. 812. TEMPORARY SUSPENSION OF LIMITATION BASED ON 65 PERCENT OF 
              TAXABLE INCOME.

    (a) In General.--Subsection (d) of section 613A of the Internal 
Revenue Code of 1986 (relating to limitation on percentage depletion in 
case of oil and gas wells) is amended by adding at the end the 
following new paragraph:
            ``(6) Temporary suspension of taxable income limit.--
        Paragraph (1) shall not apply to taxable years beginning after 
        December 31, 1998, and before January 1, 2005, including with 
        respect to amounts carried under the second sentence of 
        paragraph (1) to such taxable years.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1998.

TITLE IX--TAX MEASURES TO ENHANCE THE USE OF RENEWABLE ENERGY SOURCES, 
IMPROVE ENERGY EFFICIENCIES, PROTECT CONSUMERS AND CONVERSION TO CLEAN 
                             BURNING FUELS

SEC. 901. CREDIT FOR ELECTRICITY PRODUCED FROM RENEWABLE RESOURCES.

    (a) Extension and Modification of Placed-In-Service Rules.--
Paragraph (3) of section 45(c) of the Internal Revenue Code of 1986 is 
amended to read as follows:
            ``(3) Qualified facility.--
                    ``(A) Wind facilities.--In the case of a facility 
                using wind to produce electricity, the term `qualified 
                facility' means any facility owned by the taxpayer 
                which is originally placed in service after December 
                31, 1993, and before July 1, 2004.
                    ``(B) Biomass facilities.--In the case of a 
                facility using biomass to produce electricity, the term 
                `qualified facility' means, with respect to any month, 
                any facility owned, leased, or operated by the taxpayer 
                which is originally placed in service before July 1, 
2004, if, for such month--
                            ``(i) biomass comprises not less than 75 
                        percent (on a Btu basis) of the average monthly 
                        fuel input of the facility for the taxable year 
                        which includes such month, or
                            ``(ii) in the case of a facility 
                        principally using coal to produce electricity, 
                        biomass comprises not more than 25 percent (on 
                        a Btu basis) of the average monthly fuel input 
                        of the facility for the taxable year which 
                        includes such month.
                    ``(C) Special rules.--
                            ``(i) in the case of a qualified facility 
                        described in paragraph (B)(i)--
                                    ``(I) the 10-year period referred 
                                to in subsection (a) shall be treated 
                                as beginning no earlier than the date 
                                of the enactment of this paragraph, and
                                    ``(II) subsection (b)(3) shall not 
                                apply to any such facility originally 
                                placed in service before January 1, 
                                1997.
                            ``(ii) in the case of a qualified facility 
                        described in subparagraph (B)(ii)--
                                    ``(I) the 10-year period referred 
                                to in subsection (a) shall be treated 
                                as beginning no earlier than the date 
                                of the enactment of this paragraph, and
                                    ``(II) the amount of the credit 
                                determined under subsection (a) with 
                                respect to any project for any taxable 
                                year shall be adjusted by multiplying 
                                such amount (determined without regard 
                                to this clause) by 0.59.''.
    (b) Credit Not To Apply to Electricity Sold to Utilities Under 
Certain Contracts.--Section 45(b) of such Code (relating to limitations 
and adjustments) is amended by adding at the end the following:
            ``(4) Credit not to apply to electricity sold to utilities 
        under certain contracts.--
                    ``(A) In general.--The credit determined under 
                subsection (a) shall not apply to electricity--
                            ``(i) produced at a qualified facility 
                        placed in service by the taxpayer after June 
                        30, 1999, and
                            ``(ii) sold to a utility pursuant to a 
                        contract originally entered into before January 
                        1, 1987 (whether or not amended or restated 
                        after that date).
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                if--
                            ``(i) the prices for energy and capacity 
                        from such facility are established pursuant to 
                        an amendment to the contract referred to in 
                        subparagraph (A)(ii);
                            ``(ii) such amendment provides that the 
                        prices set forth in the contract which exceed 
                        avoided cost prices determined at the time of 
                        delivery shall apply only to annual quantities 
                        of electricity (prorated for partial years) 
                        which do not exceed the greater of--
                                    ``(I) the average annual quantity 
                                of electricity sold to the utility 
                                under the contract during calendar 
                                years 1994, 1995, 1996, 1997, and 1998, 
                                or
                                    ``(II) the estimate of the annual 
                                electricity production set forth in the 
                                contract, or, if there is no such 
                                estimate, the greatest annual quantity 
                                of electricity sold to the utility 
                                under the contract in any of the 
                                calendar years 1996, 1997, or 1998; and
                            ``(iii) such amendment provides that energy 
                        and capacity in excess of the limitation in 
                        clause (ii) may be--
                                    ``(I) sold to the utility only at 
                                prices that do not exceed avoided cost 
                                prices determined at the time of 
                                delivery, or
                                    ``(II) sold to a third party 
                                subject to a mutually agreed upon 
                                advance notice to the utility.
                        For purposes of this subparagraph, avoided cost 
                        prices shall be determined as provided for in 
                        18 CFR 292.304(d)(1) or any successor 
                        regulation.''.
    (c) Qualified Facilities Include All Biomass Facilities.--
            (1) In general.--Subparagraph (B) of section 45(c)(1) of 
        such Code (defining qualified energy resources) is amended to 
        read as follows:
                    ``(B) biomass.''.
            (2) Biomass defined.--Paragraph (2) of section 45(c) of 
        such Code (relating to definitions) is amended to read as 
        follows:
            ``(2) biomass.--The term `biomass' means--
                    ``(A) any organic material from a plant which is 
                planted exclusively for purposes of being used at a 
                qualified facility to produce electricity, or
                    ``(B) any solid, nonhazardous, cellulosic waste 
                material which is segregated from other waste materials 
                and which is derived from--
                            ``(i) any of the following forest-related 
                        resources: mill residues, precommercial 
                        thinnings, slash, and brush, but not including 
                        old-growth timber,
                            ``(ii) poultry waste,
                            ``(iii) urban sources, including waste 
                        pallets, crates, and dunnage, manufacturing and 
                        construction wood wastes, and landscape or 
                        right-of-way trimmings, but not including 
                        unsegregated municipal solid waste (garbage) or 
                        paper that is commonly recycled, or
                            ``(iv) agriculture sources, including 
                        orchard tree crops, vineyard, grain, legumes, 
                        sugar, and other crop by-products or 
                        residues.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to electricity produced after the date of the enactment of this 
Act.

SEC. 902. CERTAIN AMOUNTS RECEIVED BY ELECTRIC ENERGY, GAS, OR STEAM 
              UTILITIES EXCLUDED FROM GROSS INCOME AS CONTRIBUTIONS TO 
              CAPITAL.

    (a) Subsection (c) of section 118 of the Internal Revenue Code of 
1986 (relating to special rules for water and sewerage disposal 
utilities) is amended--
            (1) in the heading, by striking, ``WATER AND SEWERAGE 
        DISPOSAL'' and inserting ``CERTAIN'',
            (2) in paragraph (1)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``water or'' and inserting ``electric energy, 
                gas (through a local distribution system or 
                transportation by pipeline), steam, water, or'' and
                    (B) in subparagraph (B), by striking ``water or'' 
                and inserting ``electric energy, gas, steam, water, 
                or'',
            (3) in paragraph (2)(A)(ii), by striking ``water or'' and 
        inserting ``electric energy, gas, steam, water, or'', and
            (4) in paragraph (3)--
                    (A) in subparagraph (A), by inserting ``such term 
                shall include amounts paid as customer connection fees 
                (including amounts paid to connect the customer's line 
                to an electric line, a gas main, a steam line, or a 
                main water or sewer line) and'' after ``except that'', 
                and
                    (B) in subparagraph (C), by striking ``water or'' 
                and inserting ``electric energy, gas, steam, water, 
                or''.
    (b) The amendments made by subsection (a) shall apply to amounts 
received after the date of the enactment of this Act.

SEC. 903. EXTENSION OF CREDIT FOR ELECTRICITY PRODUCED FROM STEEL 
              COGENERATION.

    (a) Extension of Credit for Coke Production and Steel Manufacturing 
Facilities.--Section 45(c)(1) of the Internal Revenue Code of 1986 
(defining qualified energy resources) is amended by striking ``and'' at 
the end of the next to last subparagraph, by striking the period at the 
end of the last subparagraph and inserting ``, and'', and by adding at 
the end the following new subparagraph:
                    ``(D) steel cogeneration.''
    (b) Steel Cogeneration.--Section 45(c) of such Code is amended by 
adding at the end the following:
            ``(5) Steel cogeneration.--The term `steel cogeneration' 
        means the production of steam or other form of thermal energy 
        of at least 20 percent of total production and the production 
        of electricity or mechanical energy (or both) of at least 20 
        percent of total production (meaning production from all waste 
        sources in subparagraphs (A), (B), and (C) from the entire 
        facility that produces coke, iron ore, iron, or steel), 
        provided that the cogeneration meets any regulatory energy-
        efficiency standards established by the Secretary, and only to 
        the extent that such energy is produced from--
                    ``(A) gases or heat generated during the production 
                of coke,
                    ``(B) blast furnace gases or heat generated during 
                the production of iron ore or iron, or
                    ``(C) waste gases or heat generated from the 
                manufacture of steel that uses at least 20 percent 
                recycled material.''.
            (c) Modification of Placed in Service Rules for Steel 
        Cogeneration Facilities.--Section 45(c)(3) of such Code 
        (defining qualified facility) is amended by adding at the end 
        the following:
                    (D) Steel cogeneration facilities.--In the case of 
                a facility using steel cogeneration to produce 
                electricity, the term `qualified facility' means any 
                facility permitted to operate under the environmental 
                requirements of the Clean Air Act Amendments of 1990 
                which is owned by the taxpayer and originally placed in 
                service after December 31, 1999, and before January 1, 
                2005. Such a facility may be treated as originally 
                placed in service when such facility was last upgraded 
                to increase efficiency or generation capability. 
                However, no facility shall be allowed a credit for more 
                than 10 years of production.''.
    (d) Conforming Amendments.--
            (1) The heading for section 45 of such Code is amended by 
        inserting ``and waste energy'' after ``renewable''.
            (2) The item relating to section 45 in the table of 
        sections subpart D of part IV of subchapter A of chapter 1 of 
        such Code is amended by inserting ``and waste energy'' after 
        ``renewable''.
    (e) Effective Date.--The amendments made by this section shall take 
effect for taxable years beginning after December 31, 2001, and before 
January 1, 2005.

SEC. 904. FULL EXPENSING OF HOME HEATING OIL STORAGE FACILITIES.

    (a) In General.--Section 179(b) of the Internal Revenue Code of 
1986 (relating to limitations) is amended by adding at the end of the 
following:
            ``(5) Full expensing of home heating oil storage 
        facilities.--Paragraphs (1) and (2) shall not apply to section 
        179 property which is any storage facility (not including a 
        building or its structural components) used in connection with 
        the distribution of home heating oil.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service in taxable years beginning after the date 
of the enactment of this Act.''

SEC. 905. RESIDENTIAL SOLAR ENERGY TAX CREDIT.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to nonrefundable 
personal credits) is amended by inserting after section 25A the 
following new section:

``SEC. 25B. RESIDENTIAL SOLAR ENERGY PROPERTY.

    ``(a) Allowance of Credit.--In the case of an individual, 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)(2) shall not exceed $2,000 for each system of solar energy 
        property.
            ``(2) Type of property.--No expenditure may be taken into 
        account under this section unless such expenditure is made by 
        the taxpayer for property installed on or in connection with a 
        dwelling unit which is located in the United States and which 
        is used as a residence.
            ``(3) 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 performance and safety 
                by the non-profit Solar Rating Certification 
                Corporation or a comparable 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 property expenditure.--
        The term `qualified solar water heating property expenditure' 
        means an expenditure for property that uses solar energy to 
        heat water for use in a dwelling unit with respect to which a 
        majority of the energy is derived from the sun.
            ``(2) Qualified photovoltaic property expenditure.--The 
        term `qualified photovoltaic property expenditure' means an 
        expenditure for property that 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 property described in 
        paragraph (1) or (2) solely because it constitutes a structural 
        component of the structure on which it is installed.
            ``(4) Labor costs.--Expenditures for labor costs properly 
        allocable to the onsite preparation, assembly, or original 
        installation of the property described 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 storage medium.--
        Expenditures which are properly allocable 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.--For purposes of this section--
            ``(1) Dollar amounts in case of joint occupancy.--In the 
        case of any dwelling unit which is jointly occupied and used 
        during any calendar year 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 (as the case 
                may be) made during such calendar year by any of such 
                individuals with respect to such dwelling unit shall be 
                determined by treating all of such individuals as 1 
                taxpayer whose taxable year is such calendar year.
                    ``(B) There shall be allowable with respect to such 
                expenditures to each of such individuals, a credit 
                under subsection (a) for the taxable 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.
            ``(2) Tenant-stockholder in cooperative housing 
        corporation.--In the case of an individual who is a tenant-
        stockholder (as defined in section 216) in a cooperative 
        housing corporation (as defined in such section), such 
        individual shall be treated as having made his tenant-
        stockholder's proportionate share (as defined in section 
        216(b)(3)) of any expenditures of such corporation.
            ``(3) Condominiums.--
                    ``(A) In general.--In the case of an individual who 
                is a member of a condominium management association 
                with respect to a condominium which he owns, such 
                individual shall be treated as having made his 
                proportionate share of any expenditures of such 
                association.
                    ``(B) Condominium management association.--For 
                purposes of this paragraph, the term `condominium 
                management association' means an organization which 
                meets the requirements 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) Joint ownership of items of solar energy property.--
                    ``(A) In general.--Any expenditure otherwise 
                qualifying as an expenditure described in paragraph (1) 
                or (2) of subsection (c) shall not be treated as 
                failing to so qualify merely because such expenditure 
                was made with respect to 2 or more dwelling units.
                    ``(B) Limits applied separately.--In the case of 
                any expenditure described in subparagraph (A), the 
                amount of the credit allowable under subsection (a) 
                shall (subject to paragraph (1)) be computed separately 
                with respect to the amount of the expenditure made for 
                each dwelling unit.
            ``(5) Allocation in certain cases.--If less than 80 percent 
        of the use of an item is for nonbusiness residential purposes, 
        only that portion of the expenditures for such item which is 
        properly allocable to use for nonbusiness residential purposes 
        shall be taken into account. For purposes of this paragraph, 
        use for a swimming pool shall be treated as use which is not 
        for residential purposes.
            ``(6) 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 reconstruction 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 an expenditure shall 
                be the cost thereof.
    ``(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 subsection) result from such expenditure shall be reduced 
by the amount of the credit so allowed.''.
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 1016 of such Code is amended 
        by striking `and' at the end of paragraph (26), by striking the 
        period at the end of paragraph (27) and inserting ``; and'', 
        and by adding at the end the following new paragraph:
            ``(28) to the extent provided in section 25B(e), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25B.''.
            (2) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 25A the following new item:

                              ``Sec. 25B. Residential solar energy 
                                        property.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 1999 and before 
December 31, 2004.

                                 <all>