A bill to amend the Internal Revenue Code of 1954 with respect to the taxation of income from the production and sale of geothermal steam and associated resources.

Directs the Secretary of the Treasury under the Internal Revenue Code to promulgate regulations to allow an option to deduct as expenses the intangible drilling and development costs of wells drilled for geothermal steam and associated resources.

Provides for a 22 percent depletion rate for specified geothermal disposits.

Allows a tax deduction in computing taxable income for the expenditures paid or incurred for the purpose of ascertaining the existence, location, extent, or quality of any deposit of geothermal steam.