109th CONGRESS
2d Session
S. 3917
To establish the American-Made Energy Trust Fund, to increase the
tax credits for cellulosic biomass ethanol, to extend tax incentives for
solar and fuel cell property, to promote coal-to-liquid fuel activities,
to direct the Secretary of the Interior to establish and implement a competitive
oil and gas leasing program for the Coastal Plain of Alaska, and for other
purposes.
IN THE SENATE OF THE UNITED STATES
September 21, 2006
Mr. BURR introduced the following bill; which was read twice and referred
to the Committee on Finance
A BILL
To establish the American-Made Energy Trust Fund, to increase the
tax credits for cellulosic biomass ethanol, to extend tax incentives for
solar and fuel cell property, to promote coal-to-liquid fuel activities,
to direct the Secretary of the Interior to establish and implement a competitive
oil and gas leasing program for the Coastal Plain of Alaska, 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; TABLE OF CONTENTS.
(a) Short Title- This Act may be cited as the `American-Made Energy Freedom
Act of 2006'.
(b) Table of Contents- The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--TAX INCENTIVES FOR CELLULOSIC BIOMASS ETHANOL, SOLAR AND FUEL
CELL PROPERTY, AND CERTAIN LIQUID FUEL DERIVED FROM COAL
Sec. 101. Increased tax credits for cellulosic biomass ethanol.
Sec. 102. Extension of energy credit for solar and fuel cell property.
Sec. 103. Extension and modification of credit for residential energy
efficient property.
Sec. 104. Extension and modification of excise tax credits for certain
liquid fuel derived from coal.
TITLE II--AMERICAN-MADE ENERGY TRUST FUND
Sec. 201. Establishment of American-Made Energy Trust Fund.
TITLE III--DEVELOPMENT OF OIL AND GAS RESOURCES OF THE COASTAL PLAIN OF
ALASKA
Sec. 302. Leasing program for lands within the Coastal Plain.
Sec. 304. Grant of leases by the Secretary.
Sec. 305. Lease terms and conditions.
Sec. 306. Coastal plain environmental protection.
Sec. 307. Expedited judicial review.
Sec. 308. Federal and State distribution of revenues.
Sec. 309. Rights-of-way across the Coastal Plain.
Sec. 311. Local government impact aid and community service assistance.
TITLE I--TAX INCENTIVES FOR CELLULOSIC BIOMASS ETHANOL, SOLAR AND FUEL
CELL PROPERTY, AND CERTAIN LIQUID FUEL DERIVED FROM COAL
SEC. 101. INCREASED TAX CREDITS FOR CELLULOSIC BIOMASS ETHANOL.
(1) IN GENERAL- Section 40 of the Internal Revenue Code of 1986 (relating
to alcohol used as fuel) is amended by adding at the end the following
new subsection:
`(i) Increased Credit for Cellulosic Biomass Ethanol-
`(1) IN GENERAL- In the case of cellulosic biomass ethanol--
`(A) subsection (h) shall not apply,
`(B) if such ethanol has a proof of at least 150 but less than 190--
`(i) subsection (b)(3) shall not apply, and
`(ii) subsections (b)(1)(A), (b)(2)(A), (d)(3)(A), and (d)(3)(B) shall
each be applied by substituting `the low-proof cellulosic ethanol
amount' for `60 cents', and
`(C) if such alcohol has a proof of at least 190, subsections (b)(1)(A),
(b)(2)(A), (d)(3)(A), and (d)(3)(B) shall each be applied by substituting
`the cellulosic ethanol amount' for `60 cents'.
`(A) OVERALL DOLLAR LIMITATION- Paragraph (1) shall not apply to any
cellulosic biomass ethanol which is sold or used after the date on which
the Secretary certifies that, in the estimation of the Secretary, more
than $1,250,000,000 has been allowed, in the aggregate, as a credit
under this section with respect to cellulosic biomass ethanol taken
into account under this subsection and subsection (c).
`(B) PER TAXPAYER MAXIMUM-
`(i) IN GENERAL- With respect to any taxpayer, paragraph (1) shall
only apply to the first 25,000,000 gallons of cellulosic biomass ethanol
sold or used by the taxpayer during any calendar year.
`(ii) TERMINATION OF TAXPAYER MAXIMUM- Clause (i) shall not apply
with respect to any calendar year after the first calendar year with
respect to which the Secretary certifies that, in the estimation of
the Secretary, at least 10 taxpayers sell or use cellulosic biomass
ethanol to which paragraph (1) applies.
`(C) PER TAXPAYER MINIMUM- With respect to any taxpayer, paragraph (1)
shall not apply to any cellulosic biomass ethanol sold or used by the
taxpayer during any calendar year unless the aggregate amount of cellulosic
biomass ethanol sold or used by such taxpayer during such calendar year
exceeds 5,000,000 gallons.
`(3) CELLULOSIC ETHANOL AMOUNT; LOW-PROOF CELLULOSIC ETHANOL AMOUNT-
`(A) IN GENERAL- The terms `cellulosic ethanol amount' and `low-proof
cellulosic ethanol amount' mean $1.25 and $1.10, respectively.
`(B) PHASE-OUT BASED ON PRICE OF OIL-
`(i) IN GENERAL- The $1.25 and $1.10 amounts contained in subparagraph
(A) shall each be reduced (but not below $0.51 and $0.3778, respectively)
by an amount which bears the same ratio to the amount so contained
in subparagraph (A) (as so increased) as--
`(I) the amount (if any) by which the price of a barrel of crude
oil exceeds $40, bears to
`(ii) DETERMINATION BY SECRETARY- The price of a barrel of crude oil
shall be determined periodically by the Secretary under such methodology
as the Secretary determines appropriate. The price determined under
this clause and the reduction required by clause (i) shall apply with
respect to cellulosic biomass ethanol sold or used during the period
with respect to which such determination relates.
`(C) INFLATION ADJUSTMENT OF PHASE-OUT BASED ON PRICE OF OIL- In the
case of any period beginning in a calendar year after 2007, the dollar
amounts contained in subclauses (I) and (II) of subparagraph (B)(i)
shall be increased by an amount equal to--
`(i) such dollar amount, multiplied by
`(ii) the cost-of-living adjustment determined under section 1(f)(3)
for the calendar year in which the taxable year begins, determined
by substituting `calendar year 2006' for `calendar year 1992' in subparagraph
(B) thereof.
Any increase determined under the preceding sentence shall be rounded
to the nearest multiple of $1.
`(4) CELLULOSIC BIOMASS ETHANOL- The term `cellulosic biomass ethanol'
means ethanol produced by enzymatic hydrolysis of any lignocellulosic
or hemicellulosic feedstock that is available on a renewable or recurring
basis, including agricultural residues, agricultural fibers, dedicated
energy crops, grasses, plants, and wood and wood residues.
`(5) APPLICATION OF AGGREGATION, ETC., RULES- Rules similar to the rules
of paragraphs (2), (3), and (4) of subsection (g) shall apply for purposes
of the limitations under subparagraphs (B) and (C) of paragraph (2).'.
(2) TERMINATION- Subsection (e) of section 40 of such Code (relating to
termination) is amended--
(A) by redesignating paragraph (2) as paragraph (3),
(B) by inserting after paragraph (1) the following new paragraph:
`(2) CELLULOSIC BIOMASS ETHANOL- In the case of cellulosic biomass ethanol
with respect to which subsection (i)(1) applies--
`(A) paragraph (1) shall not apply, and
`(B) this section shall not apply to any sale or use of such ethanol
for any period after the earlier of the date on which the Secretary
makes the certification described in subsection (i)(2)(A) or December
31, 2023.', and
(C) by inserting `or (2)' after `paragraph (1)' in paragraph (3) (as
redesignated by this paragraph).
(1) IN GENERAL- Paragraph (2) of section 6426(b) of the Internal Revenue
Code of 1986 (relating to applicable amount) is amended--
(A) by adding at the end the following new subparagraph:
`(C) CELLULOSIC BIOMASS ETHANOL- In the case of cellulosic biomass ethanol
to which section 40(i)(1) applies or to which such section would apply
but for subsections (c) and (e) of section 40, the applicable amount
is the cellulosic ethanol amount (as defined in section 40(i)(3)).',
and
(B) by striking `subparagraph (B)' in subparagraph (A) and inserting
`subparagraphs (B) or (C)'.
(2) TERMINATION- Paragraph (5) of section 6426(b) of such Code (relating
to termination) is amended to read as follows:
`(A) IN GENERAL- Except as provided in subparagraph (B), this subsection
shall not apply to any sale, use, or removal for any period after December
31, 2010.
`(B) CELLULOSIC BIOMASS ETHANOL- In the case of any cellulosic biomass
ethanol with respect to which paragraph (2)(C) applies--
`(i) subparagraph (A) shall not apply, and
`(ii) this subsection shall not apply to any sale or use of such ethanol
for any period after the earlier of the date on which the Secretary
makes the certification described in section 40(i)(2)(A) or December
31, 2023.'.
(c) Effective Date- The amendments made by this section shall apply to fuel
sold or used after the date of the enactment of this Act.
SEC. 102. EXTENSION OF ENERGY CREDIT FOR SOLAR AND FUEL CELL PROPERTY.
(a) 30 Percent Credit for Solar- Subclause (II) of section 48(a)(2)(A)(i)
of the Internal Revenue Code of 1986 is amended by striking `2008' and inserting
`2013'.
(b) Qualified Fuel Cell Property-
(1) IN GENERAL- Subparagraph (E) of section 48(c)(1) of such Code is amended
by striking `2007' and inserting `2012'.
(2) TERMINATION OF SPECIAL RULE- Subparagraph (D) of section 48(c)(1)
of such Code is amended by inserting `placed in service before January
1, 2008, and' after `qualified fuel cell property which is'.
(c) Fiber-Optic Distributed Sunlight- Clause (ii) of section 48(a)(3)(A)
of such Code is amended by striking `2008' and inserting `2013'.
(d) Effective Date- The amendments made by this section shall take effect
on the date of the enactment of this Act.
SEC. 103. EXTENSION AND MODIFICATION OF CREDIT FOR RESIDENTIAL ENERGY
EFFICIENT PROPERTY.
(a) In General- Subsection (g) of section 25D of the Internal Revenue Code
of 1986 is amended by striking `2007' and inserting `2012'.
(b) Modification of Maximum Credit for Qualified Solar Electricity Property-
Subparagraph (A) of section 25D(b)(1) of such Code is amended to read as
follows:
`(A) $2,000 with respect to each half kilowatt of capacity of property
for which qualified solar electricity property expenditures are made,'.
(c) Conforming Amendments-
(1) Paragraph (1) of section 25D(a) of such Code is amended by striking
`photovoltaic' and inserting `solar electricity'.
(2) Paragraph (2) of section 25D(d) of such Code is amended in the text
and in the heading by striking `photovoltaic' and inserting `solar electricity'.
(3) Paragraph (4)(A)(i) of section 25D(e) of such Code is amended by striking
`photovoltaic' and inserting `solar electricity'.
(1) IN GENERAL- The amendment made by subsection (a) shall take effect
on the date of the enactment of this Act.
(2) INCREASE IN CREDIT FOR SOLAR ELECTRICITY PROPERTY- The amendments
made by subsections (b) and (c) shall apply to taxable years beginning
after December 31, 2005.
(3) HOLD HARMLESS TRANSITION RULE- In the case of any taxable year beginning
after December 31, 2005, and before the date of the enactment of this
Act, the taxpayer may elect (at such time and in such form and manner
as the Secretary of the Treasury may determine) to apply the limitation
under section 25D(b)(1)(A) of the Internal Revenue Code of 1986 which
was in effect immediately before the date of the enactment of this Act
for purposes of determining the credit under section 25D of such Code
for such taxable year in lieu of such limitation as otherwise in effect
for such year.
SEC. 104. EXTENSION AND MODIFICATION OF EXCISE TAX CREDITS FOR CERTAIN
LIQUID FUEL DERIVED FROM COAL.
(a) Modification of Excise Tax Credits- Section 6426 of the Internal Revenue
Code of 1986 is amended by redesignating subsection (g) as subsection (h)
and by inserting after subsection (f) the following new subsection:
`(g) Special Rules for Liquid Fuel Derived From Coal-
`(A) OVERALL DOLLAR LIMITATION- No liquid coal fuel shall be taken into
account in determining the alternative fuel credit under subsection
(d) or the alternative fuel mixture credit under subsection (e) if such
fuel is sold or used after the date on which the Secretary certifies
that, in the estimation of the Secretary, more than $1,500,000,000 has
been allowed, in the aggregate, as a credit under this section with
respect to liquid coal fuel taken into account under subsections (d)
and (e).
`(B) PER TAXPAYER MAXIMUM-
`(i) IN GENERAL- With respect to any taxpayer, only the first 150,000,000
gallons of liquid coal fuel which is sold or used by the taxpayer
during any calendar year may be taken into account under subsection
(d) or (e).
`(ii) TERMINATION OF TAXPAYER MAXIMUM- Clause (i) shall not apply
with respect to any calendar year after the first calendar year with
respect to which the Secretary certifies that, in the estimation of
the Secretary, at least 5 taxpayers sell or use liquid coal fuel which
is taken into account under subsection (d) or (e).
`(C) PER TAXPAYER MINIMUM- With respect to any taxpayer, liquid coal
fuel sold or used by the taxpayer during any calendar year shall not
be taken into account in determining the alternative fuel credit under
subsection (d) or the alternative fuel mixture credit under subsection
(e) unless the aggregate amount of liquid coal fuel sold or used by
such taxpayer during such calendar year exceeds 15,000,000 gallons.
`(2) ADJUSTMENT OF CREDIT AMOUNT- Solely for purposes of determining that
portion of the alternative fuel credit under subsection (d) and the alternative
fuel mixture credit under subsection (e) which is allowed with respect
to liquid coal fuel--
`(A) PHASE-OUT BASED ON PRICE OF OIL-
`(i) IN GENERAL- The 50 cent amounts contained in subsections (d)(1)
and (e)(1) shall each be reduced (but not below zero) by an amount
which bears the same ratio to the amount so contained in subsection
(d)(1) or (e)(1) (as so increased) as--
`(I) the amount (if any) by which the price of a barrel of crude
oil exceeds $45, bears to
`(ii) DETERMINATION BY SECRETARY- The price of a barrel of crude oil
shall be determined periodically by the Secretary under such methodology
as the Secretary determines appropriate. The price determined under
this clause and the reduction required by clause (i) shall apply with
respect to liquid coal fuel sold or used during the period to which
such determination relates.
`(B) INFLATION ADJUSTMENT OF PHASE-OUT BASED ON PRICE OF OIL- In the
case of any period beginning in a calendar year after 2007, the dollar
amounts contained in subclauses (I) and (II) of subparagraph (A)(i)
shall be increased by an amount equal to--
`(i) such dollar amount, multiplied by
`(ii) the cost-of-living adjustment determined under section 1(f)(3)
for the calendar year in which the taxable year begins, determined
by substituting `calendar year 2006' for `calendar year 1992' in subparagraph
(B) thereof.
Any increase determined under the preceding sentence shall be rounded
to the nearest multiple of $1.
`(3) LIQUID COAL FUEL- For purposes of this section and section 6427,
the term `liquid coal fuel' means liquid fuel derived from coal which
is described in subsection (d)(2)(E).
`(4) APPLICATION OF AGGREGATION, ETC., RULES- Rules similar to the rules
of paragraphs (2), (3), and (4) of section 40(g) shall apply for purposes
of the limitations under paragraph (2).
`(5) CREDIT MAY BE TRANSFERRED- Nothing in any law or rule of law shall
be construed to limit the transferability of the alternative fuel credit
under subsection (e) or the alternative fuel mixture credit under subsection
(e) if--
`(A) liquid coal fuel is taken into account in determining such credit,
and
`(B) such fuel or an alternative fuel mixture produced with such coal
is purchased from the transferor of such credit by the transferee of
such credit.'.
(1) ALTERNATIVE FUEL CREDIT- Paragraph (4) of section 6426(d) of such
Code (relating to termination) is amended by inserting `(the earlier of
December 31, 2023, or the date of the certification under subsection (g)(1)(A),
in the case of any sale or use involving liquid coal fuel)' before the
period at the end.
(2) ALTERNATIVE FUEL MIXTURE CREDIT- Paragraph (3) of section 6426(e)
of such Code (relating to termination) is amended by inserting `(the earlier
of December 31, 2023, or the date of the certification under subsection
(g)(1)(A), in the case of any sale or use involving liquid coal fuel)'
before the period at the end.
(3) REFUNDABILITY OF CREDIT- Paragraph (5) of section 6427(e) of such
Code (relating to termination) is amended--
(A) by striking `and' at the end of subparagraph (C), by striking the
period at the end of subparagraph (D) and inserting `, and', and by
adding at the end the following new subparagraph:
`(E) any alternative fuel or alternative fuel mixture (as so defined)
involving liquid coal fuel sold or used after the earlier of December
31, 2023, or the date of the certification under section 6426(g)(1)(A).',
and
(B) by inserting `or (E)' after `subparagraph (D)' in subparagraph (C).
(c) Effective Date- The amendments made by this section shall apply to any
sale or use for any period after September 30, 2006.
TITLE II--AMERICAN-MADE ENERGY TRUST FUND
SEC. 201. ESTABLISHMENT OF AMERICAN-MADE ENERGY TRUST FUND.
(a) Creation of Trust Fund- Subchapter A of chapter 98 of the Internal Revenue
Code of 1986 is amended by inserting at the end the following new section:
`SEC. 9511. AMERICAN-MADE ENERGY TRUST FUND.
`(a) Establishment of Trust Fund- There is established in the Treasury of
the United States a trust fund to be known as the `American-Made Energy
Trust Fund', consisting of such amounts as may be appropriated or credited
to the American-Made Energy Trust Fund as provided in this section or section
9602(b).
`(b) Transfers to Trust Fund- There are hereby appropriated to the American-Made
Energy Trust Fund amounts required to be transferred under section 308(a)(2)
of the American-Made Energy Freedom Act of 2006.
`(c) Expenditures From American-Made Energy Trust Fund-
`(1) IN GENERAL- As provided by appropriation Acts, amounts in the American-Made
Energy Trust Fund shall be available--
`(A) for transfer to the general fund of the Treasury to offset any
reduction in revenue to the United States that the Secretary estimates
results from the amendments made by title I of the American-Made Energy
Freedom Act of 2006, and
`(B) to carry out sections 210, 932, 1510, 1511, 1512, 1514, and title
XVII of the Energy Policy Act of 2005.
`(2) LIMITATION ON AVAILABILITY TO CARRY OUT THE ENERGY POLICY ACT OF
2005-
`(A) IN GENERAL- Notwithstanding paragraph (1), amounts in the American-Made
Energy Trust Fund shall be available to carry out the provisions referred
to in paragraph (1)(B) only with respect to so much of such amount as
the Secretary certifies, in the estimation of the Secretary, is in excess
(taking into account the Secretary's estimate of future appropriations
and credits to the American-Made Energy Trust Fund) of the amounts necessary
to make all future transfers described in subparagraph (A) of paragraph
(1).
`(B) APPORTIONMENT OF EXCESS AMOUNT- Notwithstanding paragraph (1),
the excess amount certified by the Secretary under subparagraph (A)
shall be apportioned to the provisions referred to in paragraph (1)(B)
in accordance with the following table:
`To carry out the following provision of the Energy Policy Act of 2005:
The following percentage of the excess amount shall be available:
Section 210
--15 percent
Section 932
--5 percent
Section 1510
--2 percent
Section 1511
--24 percent
Section 1512
--24 percent
Section 1514
--10 percent
Title XVII
--20 percent.
`(C) MAXIMUM DOLLAR LIMITATION- Notwithstanding paragraph (1), the maximum
aggregate amount which may be paid from the American-Made Energy Trust
Fund to carry out the provisions referred to in paragraph (1)(B) shall
not exceed $3,000,000,000.
`(D) REPORT TO CONGRESS- Any certification made under subparagraph (A)
shall be made in a written report to the Congress and shall include
the relevant estimates of the Secretary of future transfers, appropriations,
and credits.'.
(b) Clerical Amendment- The table of sections for subchapter A of chapter
98 of such Code is amended by inserting at the end the following new item:
`Sec. 9511. American-Made Energy Trust Fund.'.
(c) Effective Date- The amendments made by this section shall apply after
the date of the enactment of this Act.
TITLE III--DEVELOPMENT OF OIL AND GAS RESOURCES OF THE COASTAL PLAIN OF
ALASKA
SEC. 301. DEFINITIONS.
(1) COASTAL PLAIN- The term `Coastal Plain' means that area described
in appendix I to part 37 of title 50, Code of Federal Regulations.
(2) SECRETARY- The term `Secretary', except as otherwise provided, means
the Secretary of the Interior or the Secretary's designee.
SEC. 302. LEASING PROGRAM FOR LANDS WITHIN THE COASTAL PLAIN.
(a) In General- The Secretary shall take such actions as are necessary--
(1) to establish and implement, in accordance with this title and acting
through the Director of the Bureau of Land Management in consultation
with the Director of the United States Fish and Wildlife Service, 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
(2) 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, including, in furtherance of this goal, by requiring
the application of the best commercially available technology for oil
and gas exploration, development, and production to all exploration, development,
and production operations under this title in a manner that ensures the
receipt of fair market value by the public for the mineral resources to
be leased.
(1) REPEAL- Section 1003 of the Alaska National Interest Lands Conservation
Act of 1980 (16 23U.S.C. 3143) is repealed.
(2) CONFORMING AMENDMENT- The table of contents in section 1 of such Act
is amended by striking the item relating to section 1003.
(c) Compliance With Requirements Under Certain Other Laws-
(1) COMPATIBILITY- For purposes of the National Wildlife Refuge System
Administration Act of 1966 (16 U.S.C. 668dd et seq.), the oil and gas
leasing program and activities authorized by this section in the Coastal
Plain are deemed to be compatible with the purposes for which the Arctic
National Wildlife Refuge was established, and no further findings or decisions
are required to implement this determination.
(2) 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 deemed to satisfy the requirements under
the National Environmental Policy Act of 1969 that apply with respect
to prelease activities, including actions authorized to be taken by the
Secretary to develop and promulgate the regulations for the establishment
of a leasing program authorized by this title before the conduct of the
first lease sale.
(3) COMPLIANCE WITH NEPA FOR OTHER ACTIONS- Before conducting the first
lease sale under this title, the Secretary shall prepare an environmental
impact statement under the National Environmental Policy Act of 1969 with
respect to the actions authorized by this title that are not referred
to in paragraph (2). Notwithstanding any other law, the Secretary is not
required to identify nonleasing alternative courses of action or to analyze
the environmental effects of such courses of action. The Secretary shall
only identify a preferred action for such leasing and a single leasing
alternative, and analyze the environmental effects and potential mitigation
measures for those two alternatives. The identification of the preferred
action and related analysis for the first lease sale under this title
shall be completed within 18 months after the date of enactment of this
title. The Secretary shall only consider public comments that specifically
address the Secretary's preferred action and that are filed within 20
days after publication of an environmental analysis. Notwithstanding any
other law, compliance with this paragraph is deemed to satisfy all requirements
for the analysis and consideration of the environmental effects of proposed
leasing under this title.
(d) Relationship to State and Local Authority- Nothing in this title shall
be considered to expand or limit State and local regulatory authority.
(1) IN GENERAL- The Secretary, after consultation with the State of Alaska,
the city of Kaktovik, and the North Slope Borough, may designate up to
a total of 45,000 acres of the Coastal Plain as a Special Area if the
Secretary determines that the Special Area is of such unique character
and interest so as to require special management and regulatory protection.
The Secretary shall designate as such a Special Area the Sadlerochit Spring
area, comprising approximately 4,000 acres.
(2) MANAGEMENT- Each such Special Area shall be managed so as to protect
and preserve the area's unique and diverse character including its fish,
wildlife, and subsistence resource values.
(3) EXCLUSION FROM LEASING OR SURFACE OCCUPANCY- The Secretary may exclude
any Special Area from leasing. If the Secretary leases a Special Area,
or any part thereof, for purposes of oil and gas exploration, development,
production, and related activities, there shall be no surface occupancy
of the lands comprising the Special Area.
(4) DIRECTIONAL DRILLING- Notwithstanding the other provisions of this
subsection, the Secretary may lease all or a portion of a Special Area
under terms that permit the use of horizontal drilling technology from
sites on leases located outside the Special Area.
(f) 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.
(1) IN GENERAL- The Secretary shall prescribe such regulations as may
be necessary to carry out this title, including rules and regulations
relating to protection of the fish and wildlife, their habitat, subsistence
resources, and environment of the Coastal Plain, by no later than 15 months
after the date of enactment of this title.
(2) REVISION OF REGULATIONS- The Secretary shall periodically review and,
if appropriate, revise the rules and regulations issued under subsection
(a) to reflect any significant biological, environmental, or engineering
data that come to the Secretary's attention.
SEC. 303. LEASE SALES.
(a) In General- Lands may be leased pursuant to this title to any person
qualified to obtain a lease for deposits of oil and gas under the Mineral
Leasing Act (30 U.S.C. 181 et seq.).
(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;
(2) the holding of lease sales after such nomination process; and
(3) public notice of and comment on designation of areas to be included
in, or excluded from, a lease sale.
(c) Lease Sale Bids- Bidding for leases under this title shall be by sealed
competitive cash bonus bids.
(d) Acreage Minimum in First Sale- In the first lease sale under this title,
the Secretary shall offer for lease those tracts the Secretary considers
to have the greatest potential for the discovery of hydrocarbons, taking
into consideration nominations received pursuant to subsection (b)(1), but
in no case less than 200,000 acres.
(e) Timing of Lease Sales- The Secretary shall--
(1) conduct the first lease sale under this title within 22 months after
the date of the enactment of this title; and
(2) conduct additional sales so long as sufficient interest in development
exists to warrant, in the Secretary's judgment, the conduct of such sales.
SEC. 304. GRANT OF LEASES BY THE SECRETARY.
(a) In General- The Secretary may grant to the highest responsible qualified
bidder in a lease sale conducted pursuant to section 303 any lands to be
leased on the Coastal Plain upon payment by the lessee of such bonus as
may be accepted by the Secretary.
(b) Subsequent Transfers- No lease issued under this title may be sold,
exchanged, assigned, sublet, or otherwise transferred except with the approval
of the Secretary. Prior to any such approval the Secretary shall consult
with, and give due consideration to the views of, the Attorney General.
SEC. 305. LEASE TERMS AND CONDITIONS.
(a) In General- An oil or gas lease issued pursuant to this title shall--
(1) provide for the payment of a royalty of not less than 12 1/2 percent
in amount or value of the production removed or sold from the lease, as
determined by the Secretary under the regulations applicable to other
Federal oil and gas leases;
(2) 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;
(3) require that the lessee of lands within the Coastal Plain shall be
fully responsible and liable for the reclamation of lands within the Coastal
Plain and any other Federal lands that are adversely affected in connection
with exploration, development, production, or transportation activities
conducted under the lease and within the Coastal Plain by the lessee or
by any of the subcontractors or agents of the lessee;
(4) provide that the lessee may not delegate or convey, by contract or
otherwise, the reclamation responsibility and liability to another person
without the express written approval of the Secretary;
(5) provide that the standard of reclamation for lands required to be
reclaimed under this title shall be, as nearly as practicable, a condition
capable of supporting the uses which the lands were capable of supporting
prior to any exploration, development, or production activities, or upon
application by the lessee, to a higher or better use as approved by the
Secretary;
(6) contain terms and conditions relating to protection of fish and wildlife,
their habitat, subsistence resources, and the environment as required
pursuant to section 302(a)(2);
(7) provide that the lessee, its agents, and its contractors use best
efforts to provide a fair share, as determined by the level of obligation
previously agreed to in the 1974 agreement implementing 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;
(8) prohibit the export of oil produced under the lease; and
(9) 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.
(b) Project Labor Agreements- The Secretary, as a term and condition of
each lease under this title and in recognizing the Government's proprietary
interest in labor stability and in the ability of construction labor and
management to meet the particular needs and conditions of projects to be
developed under the leases issued pursuant to this title and the special
concerns of the parties to such leases, shall require that the lessee and
its agents and contractors negotiate to obtain a project labor agreement
for the employment of laborers and mechanics on production, maintenance,
and construction under the lease.
SEC. 306. COASTAL PLAIN ENVIRONMENTAL PROTECTION.
(a) No Significant Adverse Effect Standard to Govern Authorized Coastal
Plain Activities- The Secretary shall, consistent with the requirements
of section 302, administer the provisions of this title through regulations,
lease terms, conditions, restrictions, prohibitions, stipulations, and other
provisions that--
(1) ensure the oil and gas exploration, development, and production activities
on the Coastal Plain will result in no significant adverse effect on fish
and wildlife, their habitat, and the environment;
(2) require the application of the best commercially available technology
for oil and gas exploration, development, and production on all new exploration,
development, and production operations; and
(3) ensure that the maximum amount of surface acreage covered by production
and support facilities, including airstrips and any areas covered by gravel
berms or piers for support of pipelines, does not exceed 2,000 acres on
the Coastal Plain.
(b) Site-Specific Assessment and Mitigation- The Secretary shall also require,
with respect to any proposed drilling and related activities, that--
(1) a site-specific analysis be made of the probable effects, if any,
that the drilling or related activities will have on fish and wildlife,
their habitat, subsistence resources, and the environment;
(2) a plan be implemented to avoid, minimize, and mitigate (in that order
and to the extent practicable) any significant adverse effect identified
under paragraph (1); and
(3) the development of the plan shall occur after consultation with the
agency or agencies having jurisdiction over matters mitigated by the plan.
(c) Regulations to Protect Coastal Plain Fish and Wildlife Resources, Subsistence
Users, and the Environment- Before implementing the leasing program authorized
by this title, the Secretary shall prepare and promulgate regulations, lease
terms, conditions, restrictions, prohibitions, stipulations, and other measures
designed to ensure that the activities undertaken on the Coastal Plain under
this title are conducted in a manner consistent with the purposes and environmental
requirements of this title.
(d) Compliance With Federal and State Environmental Laws and Other Requirements-
The proposed regulations, lease terms, conditions, restrictions, prohibitions,
and stipulations for the leasing program under this title shall require
compliance with all applicable provisions of Federal and State environmental
law, and shall also require the following:
(1) Standards at least as effective as the safety and environmental mitigation
measures set forth in items 1 through 29 at pages 167 through 169 of the
`Final Legislative Environmental Impact Statement' (April 1987) on the
Coastal Plain.
(2) Seasonal limitations on exploration, development, and related activities,
where necessary, to avoid significant adverse effects during periods of
concentrated fish and wildlife breeding, denning, nesting, spawning, and
migration.
(3) That exploration activities, except for surface geological studies,
be limited to the period between approximately November 1 and May 1 each
year and that exploration activities shall be supported, if necessary,
by ice roads, winter trails with adequate snow cover, ice pads, ice airstrips,
and air transport methods, except that such exploration activities may
occur at other times if the Secretary finds that such exploration will
have no significant adverse effect on the fish and wildlife, their habitat,
and the environment of the Coastal Plain.
(4) Design safety and construction standards for all pipelines and any
access and service roads, that--
(A) minimize, to the maximum extent possible, adverse effects upon the
passage of migratory species such as caribou; and
(B) minimize adverse effects upon the flow of surface water by requiring
the use of culverts, bridges, and other structural devices.
(5) Prohibitions on general public access and use on all pipeline access
and service roads.
(6) Stringent reclamation and rehabilitation requirements, consistent
with the standards set forth in this title, requiring the removal from
the Coastal Plain of all oil and gas development and production facilities,
structures, and equipment upon completion of oil and gas production operations,
except that the Secretary may exempt from the requirements of this paragraph
those facilities, structures, or equipment that the Secretary determines
would assist in the management of the Arctic National Wildlife Refuge
and that are donated to the United States for that purpose.
(7) Appropriate prohibitions or restrictions on access by all modes of
transportation.
(8) Appropriate prohibitions or restrictions on sand and gravel extraction.
(9) Consolidation of facility siting.
(10) Appropriate prohibitions or restrictions on use of explosives.
(11) Avoidance, to the extent practicable, of springs, streams, and river
system; the protection of natural surface drainage patterns, wetlands,
and riparian habitats; and the regulation of methods or techniques for
developing or transporting adequate supplies of water for exploratory
drilling.
(12) Avoidance or minimization of air traffic-related disturbance to fish
and wildlife.
(13) Treatment and disposal of hazardous and toxic wastes, solid wastes,
reserve pit fluids, drilling muds and cuttings, and domestic wastewater,
including an annual waste management report, a hazardous materials tracking
system, and a prohibition on chlorinated solvents, in accordance with
applicable Federal and State environmental law.
(14) Fuel storage and oil spill contingency planning.
(15) Research, monitoring, and reporting requirements.
(16) Field crew environmental briefings.
(17) Avoidance of significant adverse effects upon subsistence hunting,
fishing, and trapping by subsistence users.
(18) Compliance with applicable air and water quality standards.
(19) Appropriate seasonal and safety zone designations around well sites,
within which subsistence hunting and trapping shall be limited.
(20) Reasonable stipulations for protection of cultural and archeological
resources.
(21) All other protective environmental stipulations, restrictions, terms,
and conditions deemed necessary by the Secretary.
(e) Considerations- In preparing and promulgating regulations, lease terms,
conditions, restrictions, prohibitions, and stipulations under this section,
the Secretary shall consider the following:
(1) The stipulations and conditions that govern the National Petroleum
Reserve-Alaska leasing program, as set forth in the 1999 Northeast National
Petroleum Reserve-Alaska Final Integrated Activity Plan/Environmental
Impact Statement.
(2) The environmental protection standards that governed the initial Coastal
Plain seismic exploration program under parts 37.31 to 37.33 of title
50, Code of Federal Regulations.
(3) The land use stipulations for exploratory drilling on the KIC-ASRC
private lands that are set forth in Appendix 2 of the August 9, 1983,
agreement between Arctic Slope Regional Corporation and the United States.
(f) Facility Consolidation Planning-
(1) IN GENERAL- The Secretary shall, after providing for public notice
and comment, prepare and update periodically a plan to govern, guide,
and direct the siting and construction of facilities for the exploration,
development, production, and transportation of Coastal Plain oil and gas
resources.
(2) OBJECTIVES- The plan shall have the following objectives:
(A) Avoiding unnecessary duplication of facilities and activities.
(B) Encouraging consolidation of common facilities and activities.
(C) Locating or confining facilities and activities to areas that will
minimize impact on fish and wildlife, their habitat, and the environment.
(D) Utilizing existing facilities wherever practicable.
(E) Enhancing compatibility between wildlife values and development
activities.
(g) Access to Public Lands- The Secretary shall--
(1) manage public lands in the Coastal Plain subject to subsections (a)
and (b) of section 811 of the Alaska National Interest Lands Conservation
Act (16 U.S.C. 3121); and
(2) ensure that local residents shall have reasonable access to public
lands in the Coastal Plain for traditional uses.
SEC. 307. EXPEDITED JUDICIAL REVIEW.
(1) DEADLINE- Subject to paragraph (2), any complaint seeking judicial
review of any provision of this title or any action of the Secretary under
this title shall be filed--
(A) except as provided in subparagraph (B), within the 90-day period
beginning on the date of the action being challenged; or
(B) in the case of a complaint based solely on grounds arising after
such period, within 90 days after the complainant knew or reasonably
should have known of the grounds for the complaint.
(2) VENUE- Any complaint seeking judicial review of any provision of this
title or any action of the Secretary under this title may be filed only
in the United States Court of Appeals for the District of Columbia.
(3) LIMITATION ON SCOPE OF CERTAIN REVIEW- Judicial review of a Secretarial
decision to conduct a lease sale under this title, including the environmental
analysis thereof, shall be limited to whether the Secretary has complied
with the terms of this title and shall be based upon the administrative
record of that decision. The Secretary's identification of a preferred
course of action to enable leasing to proceed and the Secretary's analysis
of environmental effects under this title shall be presumed to be correct
unless shown otherwise by clear and convincing evidence to the contrary.
(b) Limitation on Other Review- Actions of the Secretary with respect to
which review could have been obtained under this section shall not be subject
to judicial review in any civil or criminal proceeding for enforcement.
SEC. 308. FEDERAL AND STATE DISTRIBUTION OF REVENUES.
(a) In General- Notwithstanding any other provision of law, of the amount
of adjusted bonus, rental, and royalty revenues from Federal oil and gas
leasing and operations authorized under this title--
(1) 50 percent shall be paid to the State of Alaska;
(2) except as provided in section 311(d), the balance shall be transferred
to the American-Made Energy Trust Fund.
(b) Payments to Alaska- Payments to the State of Alaska under this section
shall be made semiannually.
SEC. 309. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN.
(a) In General- The Secretary shall issue rights-of-way and easements across
the Coastal Plain for the transportation of oil and gas--
(1) except as provided in paragraph (2), under section 28 of the Mineral
Leasing Act (30 U.S.C. 185), without regard to title XI of the Alaska
National Interest Lands Conservation Act (30 U.S.C. 3161 et seq.); and
(2) under title XI of the Alaska National Interest Lands Conservation
Act (30 U.S.C. 3161 et seq.), for access authorized by sections 1110 and
1111 of that Act (16 U.S.C. 3170 and 3171).
(b) Terms and Conditions- The Secretary shall include in any right-of-way
or easement issued under subsection (a) such terms and conditions as may
be necessary to ensure that transportation of oil and gas does not result
in a significant adverse effect on the fish and wildlife, subsistence resources,
their habitat, and the environment of the Coastal Plain, including requirements
that facilities be sited or designed so as to avoid unnecessary duplication
of roads and pipelines.
(c) Regulations- The Secretary shall include in regulations under section
302(g) provisions granting rights-of-way and easements described in subsection
(a) of this section.
SEC. 310. CONVEYANCE.
In order to maximize Federal revenues by removing clouds on title to 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)), shall convey--
(1) to the Kaktovik Inupiat Corporation the surface estate of the lands
described in paragraph 1 of Public Land Order 6959, to the extent necessary
to fulfill the Corporation's entitlement under sections 12 and 14 of the
Alaska Native Claims Settlement Act (43 U.S.C. 1611 and 1613) in accordance
with the terms and conditions of the Agreement between the Department
of the Interior, the United States Fish and Wildlife Service, the Bureau
of Land Management, and the Kaktovik Inupiat Corporation effective January
22, 1993; and
(2) to the Arctic Slope Regional Corporation the remaining subsurface
estate to which it is entitled pursuant to the August 9, 1983, agreement
between the Arctic Slope Regional Corporation and the United States of
America.
SEC. 311. LOCAL GOVERNMENT IMPACT AID AND COMMUNITY SERVICE ASSISTANCE.
(a) Financial Assistance Authorized-
(1) IN GENERAL- The Secretary may use amounts available from the Coastal
Plain Local Government Impact Aid Assistance Fund established by subsection
(d) to provide timely financial assistance to entities that are eligible
under paragraph (2) and that are directly impacted by the exploration
for or production of oil and gas on the Coastal Plain under this title.
(2) ELIGIBLE ENTITIES- The North Slope Borough, the City of Kaktovik,
and any other borough, municipal subdivision, village, or other community
in the State of Alaska that is directly impacted by exploration for, or
the production of, oil or gas on the Coastal Plain under this title, as
determined by the Secretary, shall be eligible for financial assistance
under this section.
(b) Use of Assistance- Financial assistance under this section may be used
only for--
(1) planning for mitigation of the potential effects of oil and gas exploration
and development on environmental, social, cultural, recreational, and
subsistence values;
(2) implementing mitigation plans and maintaining mitigation projects;
(3) developing, carrying out, and maintaining projects and programs that
provide new or expanded public facilities and services to address needs
and problems associated with such effects, including fire-fighting, police,
water, waste treatment, medivac, and medical services; and
(4) establishment of a coordination office, by the north slope borough,
in the city of kaktovik, which shall--
(A) coordinate with and advise developers on local conditions, impact,
and history of the areas utilized for development; and
(B) provide to the Committee on Resources of the House of Representatives
and the Committee on Energy and Natural Resources of the Senate an annual
report on the status of coordination between developers and the communities
affected by development.
(1) IN GENERAL- Any community that is eligible for assistance under this
section may submit an application for such assistance to the Secretary,
in such form and under such procedures as the Secretary may prescribe
by regulation.
(2) NORTH SLOPE BOROUGH COMMUNITIES- A community located in the North
Slope Borough may apply for assistance under this section either directly
to the Secretary or through the North Slope Borough
(3) APPLICATION ASSISTANCE- The Secretary shall work closely with and
assist the North Slope Borough and other communities eligible for assistance
under this section in developing and submitting applications for assistance
under this section.
(d) Establishment of Fund-
(1) IN GENERAL- There is established in the Treasury the Coastal Plain
Local Government Impact Aid Assistance Fund.
(2) USE- Amounts in the fund may be used only for providing financial
assistance under this section.
(3) DEPOSITS- Subject to paragraph (4), there shall be deposited into
the fund amounts received by the United States as revenues derived from
rents, bonuses, and royalties from Federal leases and lease sales authorized
under this title.
(4) LIMITATION ON DEPOSITS- The total amount in the fund may not exceed
$11,000,000.
(5) INVESTMENT OF BALANCES- The Secretary of the Treasury shall invest
amounts in the fund in interest bearing government securities.
(e) Authorization of Appropriations- To provide financial assistance under
this section there is authorized to be appropriated to the Secretary from
the Coastal Plain Local Government Impact Aid Assistance Fund $5,000,000
for each fiscal year.
END
