1.This Act may be cited as the Geothermal Energy Initiative Act of 2004
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2.The Congress finds the following:
(1)Federal income tax credits have been established for production of energy from renewable energy resources, other than geothermal energy resources, including with respect to wind energy and closed-loop biomass energy.
(2)The last national resource assessment of geothermal energy resource sites in the United States was completed in 1978. There have been substantial changes in technology and advances in geological science in the intervening 26 years.
(3)Many Federal land management agencies, including the Bureau of Land Management and the Forest Service, are not aware of geothermal energy resources and fail to recognize geothermal energy resources in their land use planning process. Failure to recognize geothermal energy resources during the land use planning process poses significant delays in geothermal resource development.
(4)The Bureau of Land Management has a backlog of 230 lease applications for prospecting for geothermal energy. The average age of these lease applications is 9 years. The oldest non-competitive application was received in 1974.
(5) There appears to be a lack of focus and priority in the Bureau of Land Management concerning geothermal energy efforts.
(6) Development of geothermal energy resources is environmentally safe and clean.
3.Credit for electricity produced from geothermal energy
(a)Section 45(c)(1) of the Internal Revenue Code of 1986 (relating to qualified energy resources) is amended by striking and
at the end of subparagraph (B), by striking the period at the end of the subparagraph (C) and inserting , and
, and by adding at the end the following new subparagraph:
(D)geothermal energy..
(b)Section 45(c)(3) of such Code (defining qualified facility) is amended by inserting after subparagraph (E) the following new subparagraph:
(D)Geothermal energy facilityIn the case of a facility using geothermal energy to produce electricity, the term qualified facility
means—
(i)any facility owned by the taxpayer which is originally placed in service after December 31, 2004, and
(ii)any facility owned by the taxpayer which is originally placed in service before January 1, 2005, but only to the extent of its incremental production.If such a facility is leased and the operator thereof is the lessee, such lessee (and not the owner) shall be treated for purposes of this section as owning such facility..
(c)Section 45(d) of such Code (relating to definitions and special rules) is amended by adding at the end the following new paragraph:
(9)Definition and special rule with respect to incremental geothermal productionFor purposes of subparagraph (D) of paragraph (3)—
(A)The term incremental production means, with respect to a facility described in subsection (c)(3)(D)(ii) for any taxable year, the excess of—
(i)the total kilowatt hours of electricity produced from such facility, over
(ii)the average annual kilowatt hours produced at such facility for five of the previous seven calendar years prior to the date of the enactment of this paragraph after eliminating the highest and lowest kilowatt hour production years in such seven-year period.
(B)A facility which was placed in service seven years or longer prior to the date of the enactment of this paragraph shall, commencing with the year of such enactment, reduce the amount calculated under subparagraph (A)(ii) each year, on a cumulative basis, by the average decrease in annual kilowatt hour production for the seven-year period described in subparagraph (A)(ii) with such cumulative sum not to exceed 30 percent..
(d)The amendments made by this section shall apply to electricity sold after December 31, 2004.
4.Assessment of geothermal energy resources
(a)Not later than 3 months after the date of the enactment of this Act, and each year thereafter, the Secretary of Energy shall review the available assessments of geothermal energy resources available within the United States and undertake new assessments as necessary, taking into account changes in market conditions, available technologies, and other relevant factors.
(b)Not later than 1 year after the date of the enactment of this Act, and each year thereafter, the Secretary shall publish a report based on the assessment under subsection (a). The report shall contain a detailed inventory describing the available amount and characteristics of the geothermal energy resources, including—
(1)descriptions of surrounding terrain, population and load centers, nearby energy infrastructure, location of energy and water resources, and available estimates of the costs needed to develop each resource;
(2)an identification of any barriers to providing adequate transmission for remote sources of geothermal energy resources to current and emerging markets;
(3)recommendations for removing or addressing such barriers; and
(4)ways to provide access to the grid that do not unfairly disadvantage renewable or other energy producers.
(c)Authorization of appropriationsTo carry out this section there is authorized to be appropriated to the Secretary of the Interior $5,000,000 for fiscal years 2005, 2006, and 2007.
5.Enhanced access to Federal lands for geothermal resource development
(a)Revision of land use plans
(1)The Secretary of the Interior shall expedite development of geothermal energy in making revisions to land use plans under section 202 of the Federal Land Policy and Management Act of 1976 (42 U.S.C. 1712) while protecting other resources.
(2)National Forest System landsThe Secretary of Agriculture shall expedite development of geothermal energy in making revisions of land and resource management plans under section 6 of the Forest and Rangeland Renewable Resources Planning Act of 1974 (16 U.S.C. 1604) while protecting other resources.
(3)Issuance of rights-of-way not affectedNothing in this subsection shall preclude the issuance of a right-of-way for the development of a geothermal energy project prior to the revision of a land use plan by the appropriate land management agency.
(b)Within 24 months after the date of the enactment of this section, the Secretary of the Interior shall develop and report to the Congress recommendations on any statutory or regulatory changes the Secretary believes would assist in the development of geothermal energy on Federal land. The report shall include—
(1)a 5-year plan developed by the Secretary of the Interior, in cooperation with the Secretary of Agriculture, for encouraging the development of geothermal energy on Federal land in an environmentally sound manner;
(2)an analysis of—
(A)whether the use of rights-of-ways is the best means of authorizing use of Federal land for the development of geothermal energy, or whether such resources could be better developed through a leasing system or other method;
(B)the desirability of grants, loans, tax credits, or other provisions to promote geothermal energy development on Federal land; and
(C)any problems, including environmental concerns, that the Secretary of the Interior or the Secretary of Agriculture has encountered in managing geothermal energy projects on Federal land, or believe are likely to arise in relation to the development of geothermal energy on Federal land; and
(3)a list, developed in consultation with the Secretaries of Energy and Defense, of lands under the jurisdiction of the Departments of Energy and Defense, respectively, that would be suitable for development for geothermal energy, and recommended statutory and regulatory mechanisms for such development.
6.Consultation regarding geothermal leasing and permitting on public lands
(a)Not later than 6 months after the date of the enactment of this Act, the Secretary of the Interior and the Secretary of Agriculture shall enter into and submit to the Congress a memorandum of understanding in accordance with this section regarding leasing and permitting, for geothermal development, of public lands under their respective administrative jurisdictions.
(b)Lease and permit applicationsThe memorandum of understanding shall include provisions that—
(1)identify known geothermal areas on public lands within the National Forest System and to the extent necessary review management plans to consider leasing of such lands under the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) as a land use;
(2)establish an administrative procedure for processing geothermal lease applications, including lines of authority, steps in application processing, and timeframes for application processing;
(3)provide that the Secretary concerned shall—
(A)within 14 days after receiving an application for a lease, determine whether the application contains sufficient information to allow processing of the application; and
(B)if the application is found not to contain sufficient information to allow processing the application, before the end of such 14-day period, provide written notification to the lease applicant that the application is being returned to the applicant without processing and an itemization of the deficiencies in the application that prevent processing;
(4)provide that the Secretary concerned shall within 30 days after receiving a lease application, provide written notice to the lease applicant regarding the status of the application, including an estimate of the time that will be required to complete action on the application; and
(5)establish an administrative procedure for processing geothermal development permits, including lines of authority, steps in permit processing, and timeframes for permit processing.
(c)The memorandum of understanding shall develop a 5-year plan for leasing under the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) of public land in the National Forest System. The plan for geothermal leasing shall be updated every 5 years.
(d)The memorandum of understanding shall establish a joint data retrieval system that is capable of—
(1)tracking lease and permit applications and requests; and
(2)providing to the applicant or requester information as to their status within the Departments of the Interior and Agriculture, including an estimate of the time required for administrative action.
7.Reimbursement for costs of nepa analyses, documentation, and studies
(a)The Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) is amended by adding at the end the following:
30.Reimbursement for costs of nepa analyses, documentation, and studies
(a)The Secretary of the Interior may, through royalty credits, reimburse a person who is a lessee, operator, operating rights owner, or applicant for a lease under this Act for reasonable amounts paid by the person for preparation by the Secretary (or a contractor or other person selected by the Secretary) of any project-level analysis, documentation, or related study required under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) with respect to the lease.
(b)The Secretary may provide reimbursement under subsection (a) only if—
(1)adequate funding to enable the Secretary to timely prepare the analysis, documentation, or related study is not appropriated;
(2)the person paid the amounts voluntarily; and
(3)the person maintains records of its costs in accordance with regulations prescribed by the Secretary..
(b)The amendment made by this section shall apply with respect to any lease entered into before, on, or after the date of the enactment of this Act.
(c)The Secretary shall issue regulations implementing the amendment made by this section by not later than 90 days after the date of the enactment of this Act.
8.Authorization of appropriationsTo carry out section 5 through 7 there are authorized to be appropriated to the Secretary of the Interior such sums as may be necessary.