A bill to amend the Powerplant and Industrial Fuel Use Act of 1978 to further the objectives of national energy policy of conserving oil and natural gas through removing excessive burdens on production of coal.

Amends the Powerplant and Industrial Fuel Use Act of 1978 to limit the amount of all State and local severance taxes or fees on coal mined on Indian or Federal lands and shipped in interstate commerce to any powerplant or major fuel-burning installation or on improvements or other rights, property, or assets connected with the production of such coal.

States that such tax shall not exceed a total of 12 1/2 percent of the value of such coal produced during a fiscal year.