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1 717f), is amended by deleting the term "natural gas" 2 wherever the same shall appear and inserting in lieu thereof 3 "natural gas or oil" and by deleting "natural-gas" wherever 4 the same shall appear and inserting in lieu thereof "natural5 gas or oil".

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7

EXEMPTION OF SMALL PRODUCERS

SEC. 102. The Natural Gas Act (15 U.S.C. 717 et seq.)

8 is amended by adding at the end thereof the following new 9 section:

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11

"SMALL PRODUCER EXEMPTION

"SEC. 25. A small producer shall be exempt from the 12 provisions of this Act for an initial period of 5 years from the 13 date of enactment of this section: Provided, That (1) the 14 Commission may by regulation require any such producer to 15 prepare and submit to it such information as the Commission 16 determines to be necessary, including data, documents, mate17 rials, geological and geophysical surveys, records showing 18 current and projected capital expenditures for exploration and 19 development of reserves and resources and projected produc20 tion schedules, and any information which may aid the 21 Commission in establishing, renewing, or evaluating such 22 exemption; and (2) such producer shall submit any informa23 tion required to be furnished and shall cooperate with any 24 examination or inspection of material or property authorized 25 to be conducted under the Consumer Energy Act of 1974. At

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1 intervals of 5 years after the commencement of such exemp2 tion or any renewal thereof, the Commission shall evaluate 3 such exemption, after a hearing pursuant to section 553 of 4 title 5, United States Code, and shall issue an order renewing, 5 modifying, or revoking such exemption, upon such terms 6 and conditions as it deems necessary or appropriate to protect 7 the public interest. The Commission shall cause such order, 8 together with its findings and reasons in support thereof, to 9 be published in the Federal Register.".

10 INTRASTATE REGULATION OF NATURAL GAS AND OIL

11 SEC. 103. (a) Section 1 (a) of the Natural Gas Act 12 (15 U.S.C. 717 (a)) is amended by striking out “of na13 tural gas the sale thereof in" and inserting in lieu thereof "or 14 sale of natural gas or oil which affects".

15 (b) Section 1 (d) of the Natural Gas Act (15 U.S.C. 16 717 (b)), as redesignated by this Act, is amended to read as 17 follows: "(d) Except as provided in subsection (e) of this 18 section, the provisions of this Act shall apply to the trans19 portation and sale of natural gas and oil by any natural-gas 20 or oil company engaged in such transportation and sale.". 21 (c) Section 1 (e) of the Natural Gas Act (15 U.S.C. 22 717 (c)), as redesignated by this Act, is amended to read as 23 follows: "(e) The provisions of this Act shall not apply to 24 (1) production facilities and the construction of such facili25 ties or to the gathering of natural gas or the producing of oil;

1

2

8

and (2) the local distribution and sale at retail of natural gas

or oil or to the facilities used for such distribution and sale 3 at retail.".

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(d) Section 3 of the Natural Gas Act (15 U.S.C. 5 717b) is amended (1) by deleting the title thereof and 6 inserting in lieu thereof "FOREIGN AND INTRASTATE COM7 MERCE IN NATURAL GAS AND OIL"; (2) by inserting 8 "(a)" before the first sentence thereof; and (3) by adding 9 at the end thereof the following new subsection:

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"(b) The Commission is authorized to exempt from 11 the provisions of this Act any transportation or sale of nat12 ural gas or oil in intrastate commerce with respect to any 13 State which establishes and maintains an adequate program 14 of regulation within such State of such transportation and 15 sale in accordance with this Act: Provided, That (1) such 16 State regulation is consonant with the requirements of inter17 state commerce and responsive to the natural gas and 18 oil needs of the Nation as a whole; and (2) such 19 State enters into and abides by a cooperative agreement 20 with the Commission. Within 120 days after the Com21 mission receives a certified copy of such a State pro22 gram, it shall make a determination whether such program 23 is in accordance with this Act. Unless the Commission de24 termines that a State program is not in accordance with 25 this Act, the Commission and such State shall enter into a

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1 cooperative agreement upon such terms and conditions as 2 are necessary or appropriate to protect the public interest. 3 In order for a State program to be deemed an adequate 4 program for regulation of the transportation and sale of 5 natural gas and oil within such State in accordance with 6 this Act, the Commission must find, and not less than 7 once every 3 years thereafter must reconfirm, that under the 8 State program (1) regulatory authority resides in an inde9 pendent State regulatory commission which is responsive to 10 the interests of consumers; (2) such State commission has 11 and exercises adequate regulatory authority over the trans12 portation and sale of natural gas and oil within such State, 13 including authority to regulate prices to reflect the actual 14 costs of exploration, development, operation, or maintenance (including a fair rate of return); (3) such State commis16 sion is authorized and adequately staffed to conduct com

15

17

prehensive and detailed investigations into any aspect of 18 such transportation and sale; (4) such State commis19 sion has established and enforces acceptable regulations, 20 regulatory practices, and provisions which are consistent 21 with the provisions of and the regulations and decisions 22 under this Act; (5) such State commission establishes and 23 maintains programs for the conservation of natural gas and 24 oil consistent with the curtailment schedules of the Com25 mission; and (6) provision is made for public participation 26 in the various stages of regulation.".

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SIMPLIFICATION OF REGULATION

2 SEC. 104. (a) Section 5 of the Natural Gas Act (15

3 U.S.C. 717 (d)) is amended by adding at the end thereof 4 the following four new subsections:

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"(c) The Commission shall, in a rulemaking proceed6 ing in accordance with section 553 of title 5, United States 7 Code, establish on or before February 1, 1976, and annually 8 thereafter shall revise a national area rate for production 9 within the United States of natural gas and of oil except for 10 production described in subsection (e) of this section. The 11 Commission shall establish adjustments to the national area 12 rate for each major producing region to reflect differences in 13 production costs, State taxation, and similar costs. Sixty days 14 before the Commission establishes or grants approval to such 15 national area rate or any revision of such rate, it shall sub16 mit its findings and proposed rate to Congress and shall pub17 lish such findings and proposed rate in the Federal Register. 18 Such a national area rate or revised national area rate shall 19 be implemented by order of the Commission at the conclu20 sion of such 60-day period, unless either House of Congress 21 passes a resolution between the date of transmittal and the 22 end of such period stating in substance that it disapproves 23 the proposed national area rate or unless such rate is reversed 24 pursuant to judicial review by the end of such 60-day period. 25 Judicial review of such proposed national area rate shall be