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SEC. 2308. AMORTIZATION OF DELAY RENTAL PAYMENTS.
1
(a) I
N
G
ENERAL
.—Part VI of subchapter B of chapter
2
1, as amended by this Act, is amended by adding at the
3
end the following new section:
4
‘‘SEC. 199A. AMORTIZATION OF DELAY RENTAL PAYMENTS
5
FOR DOMESTIC OIL AND GAS WELLS.
6
‘‘(a) I
N
G
ENERAL
.—A taxpayer shall be entitled to an
7
amortization deduction with respect to any delay rental
8
payments incurred in connection with the development of
9
oil or gas within the United States (as defined in section
10
638) based on a period of 24 months beginning with the
11
month in which such payments were incurred.’’.
12
‘‘(b) D
ELAY RENTAL PAYMENTS
.—For purposes of this
13
section, the term ‘delay rental payment’ means an amount
14
paid for the privilege of deferring development of an oil or
15
gas well under an oil or gas lease.’’.
16
(b) C
LERICAL
A
MENDMENT
.—The table of sections for
17
part VI of subchapter B of chapter 1, as amended by this
18
Act, is amended by adding at the end the following new
19
item:
20
‘‘Sec. 199A. Amortization of delay rental payments for domestic oil and gas
wells.’’.
(c) E
FFECTIVE
D
ATE
.—The amendments made by this
21
section shall apply to amounts paid or incurred in taxable
22
years beginning after December 31, 2002.
23
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SEC. 2309. STUDY OF COAL BED METHANE.
1
(a) I
N
G
ENERAL
.—The Secretary of the Treasury shall
2
study the effect of section 29 of the Internal Revenue Code
3
of 1986 on the production of coal bed methane. Such study
4
shall be made in conjunction with the study to be under-
5
taken by the Secretary of the Interior on the effects of coal
6
bed methane production on surface and water resources, as
7
provided in section 607 of the Energy Policy Act of 2003.
8
(b) C
ONTENTS OF
S
TUDY
.—The study under subsection
9
(a) shall estimate the total amount of credits under section
10
29 of the Internal Revenue Code of 1986 claimed annually
11
and in the aggregate which are related to the production
12
of coal bed methane since the date of the enactment of such
13
section 29. Such study shall report the annual value of such
14
credits allowable for coal bed methane compared to the aver-
15
age annual wellhead price of natural gas (per thousand
16
cubic feet of natural gas). Such study shall also estimate
17
the incremental increase in production of coal bed methane
18
that has resulted from the enactment of such section 29, and
19
the cost to the Federal Government, in terms of the net tax
20
benefits claimed, per thousand cubic feet of incremental coal
21
bed methane produced annually and in the aggregate since
22
such enactment.
23
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SEC. 2310. EXTENSION AND MODIFICATION OF CREDIT FOR
1
PRODUCING FUEL FROM A NONCONVEN-
2
TIONAL SOURCE.
3
(a) I
N
G
ENERAL
.—Section 29 is amended by adding
4
at the end the following new subsection:
5
‘‘(h) E
XTENSION FOR
O
THER
F
ACILITIES
.—
6
‘‘(1) O
IL AND GAS
.—In the case of a well or fa-
7
cility for producing qualified fuels described in sub-
8
paragraph (A) or (B) of subsection (c)(1) which was
9
drilled or placed in service after the date of the enact-
10
ment of this subsection and before January 1, 2005,
11
notwithstanding subsection (f), this section shall
12
apply with respect to such fuels produced at such well
13
or facility not later than the close of the 3-year period
14
beginning on the date that such well is drilled or such
15
facility is placed in service.
16
‘‘(2) F
ACILITIES PRODUCING REFINED COAL
.—
17
‘‘(A) I
N GENERAL
.—In the case of a facility
18
described in subparagraph (C) for producing re-
19
fined coal which was placed in service after the
20
date of the enactment of this subsection and be-
21
fore January 1, 2007, this section shall apply
22
with respect to fuel produced at such facility not
23
later than the close of the 5-year period begin-
24
ning on the date such facility is placed in serv-
25
ice.
26
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‘‘(B) R
EFINED COAL
.—For purposes of this
1
paragraph, the term ‘refined coal’ means a fuel
2
which is a liquid, gaseous, or solid synthetic fuel
3
produced from coal (including lignite) or high
4
carbon fly ash, including such fuel used as a
5
feedstock.
6
‘‘(C) C
OVERED FACILITIES
.—
7
‘‘(i) I
N GENERAL
.—A facility is de-
8
scribed in this subparagraph if such facility
9
produces refined coal using a technology
10
that results in—
11
‘‘(I) a qualified emission reduc-
12
tion, and
13
‘‘(II) a qualified enhanced value.
14
‘‘(ii) Q
UALIFIED
EMISSION
REDUC
-
15
TION
.—For purposes of this subparagraph,
16
the term ‘qualified emission reduction’
17
means a reduction of at least 20 percent of
18
the emissions of nitrogen oxide and either
19
sulfur dioxide or mercury released when
20
burning the refined coal (excluding any di-
21
lution caused by materials combined or
22
added during the production process), as
23
compared to the emissions released when
24
burning the feedstock coal or comparable
25
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coal predominantly available in the market-
1
place as of January 1, 2002.
2
‘‘(iii) Q
UALIFIED ENHANCED VALUE
.—
3
For purposes of this subparagraph, the term
4
‘qualified enhanced value’ means an in-
5
crease of at least 50 percent in the market
6
value of the refined coal (excluding any in-
7
crease caused by materials combined or
8
added during the production process), as
9
compared to the value of the feedstock coal.
10
‘‘(iii) Q
UALIFYING
ADVANCED
CLEAN
11
COAL
TECHNOLOGY
FACILITIES
EX
-
12
CLUDED
.—A facility described in this sub-
13
paragraph shall not include a qualifying
14
advanced clean coal technology facility (as
15
defined in section 48A(b)).
16
‘‘(3) W
ELLS PRODUCING VISCOUS OIL
.—
17
‘‘(A) I
N GENERAL
.—In the case of a well for
18
producing viscous oil which was placed in serv-
19
ice after the date of the enactment of this sub-
20
section and before January 1, 2005, this section
21
shall apply with respect to fuel produced at such
22
well not later than the close of the 3-year period
23
beginning on the date such well is placed in serv-
24
ice.
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‘‘(B) V
ISCOUS OIL
.—The term ‘‘viscous oil’
1
means
heavy
oil,
as
defined
in
section
2
613A(c)(6), except that—
3
‘‘(i) ‘22 degrees’ shall be substituted for
4
‘20 degrees’ in applying subparagraph (F)
5
thereof, and
6
‘‘(ii) in all cases, the oil gravity shall
7
be measured from the initial well-head sam-
8
ples, drill cuttings, or down hole samples.
9
‘‘(C) W
AIVER OF UNRELATED PERSON RE
-
10
QUIREMENT
.—In the case of viscous oil, the re-
11
quirement under subsection (a)(1)(B)(i) of a sale
12
to an unrelated person shall not apply to any
13
sale to the extent that the viscous oil is not con-
14
sumed in the immediate vicinity of the wellhead.
15
‘‘(4) C
OALMINE METHANE GAS
.—
16
‘‘(A) I
N GENERAL
.—This section shall apply
17
to coalmine methane gas—
18
‘‘(i) captured or extracted by the tax-
19
payer after the date of the enactment of this
20
subsection and before January 1, 2005, and
21
‘‘(ii) utilized as a fuel source or sold by
22
or on behalf of the taxpayer to an unrelated
23
person after the date of the enactment of
24
this subsection and before January 1, 2005.
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‘‘(B) C
OALMINE METHANE GAS
.—For pur-
1
poses of this paragraph, the term ‘coalmine
2
methane gas’ means any methane gas which is—
3
‘‘(i) liberated during qualified coal
4
mining operations, or
5
‘‘(ii) extracted up to 5 years in ad-
6
vance of qualified coal mining operations as
7
part of a specific plan to mine a coal de-
8
posit.
9
‘‘(C) S
PECIAL
RULE
FOR
ADVANCED
EX
-
10
TRACTION
.—In the case of coalmine methane gas
11
which is captured in advance of qualified coal
12
mining operations, the credit under subsection
13
(a) shall be allowed only after the date the coal
14
extraction occurs in the immediate area where
15
the coalmine methane gas was removed.
16
‘‘(D) N
ONCOMPLIANCE
WITH
POLLUTION
17
LAWS
.—For purposes of subparagraphs (B) and
18
(C), coal mining operations which are not in
19
compliance with the applicable State and Fed-
20
eral pollution prevention, control, and permit re-
21
quirements for any period of time shall not be
22
considered to be qualified coal mining operations
23
during such period.
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‘‘(5) F
ACILITIES PRODUCING FUELS FROM AGRI
-
1
CULTURAL AND ANIMAL WASTE
.—
2
‘‘(A) I
N GENERAL
.—In the case of facility
3
for producing liquid, gaseous, or solid fuels from
4
qualified agricultural and animal wastes, in-
5
cluding such fuels when used as feedstocks, which
6
was placed in service after the date of the enact-
7
ment of this subsection and before January 1,
8
2005, this section shall apply with respect to fuel
9
produced at such facility not later than the close
10
of the 3-year period beginning on the date such
11
facility is placed in service.
12
‘‘(B) Q
UALIFIED AGRICULTURAL AND ANI
-
13
MAL WASTE
.—For purposes of this paragraph,
14
the term ‘qualified agricultural and animal
15
waste’ means agriculture and animal waste, in-
16
cluding by-products, packaging, and any mate-
17
rials associated with the processing, feeding, sell-
18
ing, transporting, or disposal of agricultural or
19
animal products or wastes, including wood
20
shavings, straw, rice hulls, and other bedding for
21
the disposition of manure.
22
‘‘(6) C
REDIT
AMOUNT
.—In determining the
23
amount of credit allowable under this section solely
24
by reason of this subsection, the dollar amount appli-
25
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cable under subsection (a)(1) shall be $3 (without re-
1
gard to subsection (b)(2)).’’.
2
(b) E
XTENSION FOR CERTAIN FUEL PRODUCED
3
AT EXISTING FACILITIES
.—Paragraph (2) of section
4
29(f) (relating to application of section) is amended
5
by inserting ‘‘(January 1, 2005, in the case of any
6
coke, coke gas, or natural gas and byproducts pro-
7
duced by coal gasification from lignite in a facility
8
described in paragraph (1)(B))’’ after ‘‘January 1,
9
2003’’.
10
(c) E
FFECTIVE
D
ATE
.—The amendment made by this
11
section shall apply to fuel sold after the date of the enact-
12
ment of this Act.
13
SEC. 2311. NATURAL GAS DISTRIBUTION LINES TREATED AS
14
15-YEAR PROPERTY.
15
(a) I
N
G
ENERAL
.—Subparagraph (E) of section
16
168(e)(3) (relating to classification of certain property) is
17
amended by striking ‘‘and’’ at the end of clause (ii), by
18
striking the period at the end of clause (iii) and by insert-
19
ing ‘‘, and’’, and by adding at the end the following new
20
clause:
21
‘‘(iv) any natural gas distribution
22
line.’’.
23
(b) A
LTERNATIVE
S
YSTEM
.—The table contained in
24
section 168(g)(3)(B), as amended by this Act, is amended
25
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HR 6 EAS1S/PP
by adding after the item relating to subparagraph (E)(iii)
1
the following new item:
2
‘‘(E)(iv) ..............................................................................................................
20’’.
(c) E
FFECTIVE
D
ATE
.—The amendments made by this
3
section shall apply to property placed in service after the
4
date of the enactment of this Act, in taxable years ending
5
after such date.
6
TITLE XXIV—ELECTRIC UTILITY
7
RESTRUCTURING PROVISIONS
8
SEC. 2401. ONGOING STUDY AND REPORTS REGARDING TAX
9
ISSUES RESULTING FROM FUTURE RESTRUC-
10
TURING DECISIONS.
11
(a) O
NGOING
S
TUDY
.—The Secretary of the Treasury,
12
after consultation with the Federal Energy Regulatory
13
Commission, shall undertake an ongoing study of Federal
14
tax issues resulting from nontax decisions on the restruc-
15
turing of the electric industry. In particular, the study shall
16
focus on the effect on tax-exempt bonding authority of pub-
17
lic power entities and on corporate restructuring which re-
18
sults from the restructuring of the electric industry.
19
(b) R
EGULATORY
R
ELIEF
.—In connection with the
20
study described in subsection (a), the Secretary of the Treas-
21
ury should exercise the Secretary’s authority, as appro-
22
priate, to modify or suspend regulations that may impede
23
an electric utility company’s ability to reorganize its cap-
24
ital stock structure to respond to a competitive marketplace.
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HR 6 EAS1S/PP
(c) R
EPORTS
.—The Secretary of the Treasury shall re-
1
port to the Committee on Finance of the Senate and the
2
Committee on Ways and Means of the House of Representa-
3
tives not later than December 31, 2002, regarding Federal
4
tax issues identified under the study described in subsection
5
(a), and at least annually thereafter, regarding such issues
6
identified since the preceding report. Such reports shall also
7
include such legislative recommendations regarding changes
8
to the private business use rules under subpart A of part
9
IV of subchapter B of chapter 1 of the Internal Revenue
10
Code of 1986 as the Secretary of the Treasury deems nec-
11
essary. The reports shall continue until such time as the
12
Federal Energy Regulatory Commission has completed the
13
restructuring of the electric industry.
14
SEC. 2402. MODIFICATIONS TO SPECIAL RULES FOR NU-
15
CLEAR DECOMMISSIONING COSTS.
16
(a) R
EPEAL OF
L
IMITATION ON
D
EPOSITS
I
NTO
F
UND
17
B
ASED
ON
C
OST
OF
S
ERVICE
; C
ONTRIBUTIONS
A
FTER
18
F
UNDING
P
ERIOD
.—Subsection (b) of section 468A is
19
amended to read as follows:
20
‘‘(b) L
IMITATION ON
A
MOUNTS
P
AID
I
NTO
F
UND
.—The
21
amount which a taxpayer may pay into the Fund for any
22
taxable year shall not exceed the ruling amount applicable
23
to such taxable year.’’.
24
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