Stripper Well Operators Preservation Act of 1993

Summary: Stripper Well Operators Preservation Act of 1993 - Amends the Internal Revenue Code to increase the percentage depletion for stripper wells. 
Repeals the net income limitation on percentage depletion for oil and gas properties. 
Expands the enhanced oil recovery tax credit to apply to stripper well production costs.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Stripper Well Operators Preservation 
Act of 1993''.

SEC. 2. INCREASED PERCENTAGE DEPLETION FOR OIL AND NATURAL GAS PRODUCED 
              FROM STRIPPER WELL PROPERTIES.

    (a) In General.--Subparagraph (C) of section 613A(c)(6) of the 
Internal Revenue Code of 1986 (relating to oil and natural gas from 
marginal properties) is amended--
            (1) by striking ``25 percent'' and inserting ``28.5 
        percent'',
            (2) by striking ``15 percent'' and inserting ``20 
        percent'', and
            (3) by striking ``$20'' and inserting ``$28''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 3. NET INCOME LIMITATION ON PERCENTAGE DEPLETION REPEALED FOR 
              STRIPPER WELL PROPERTIES.

    (a) In General.--Section 613(a) of the Internal Revenue Code of 
1986 (relating to percentage depletion) is amended by striking the 
second sentence and inserting: ``Except in the case of stripper well 
properties as defined in section 613A(c)(6)(E) for which depletion is 
computed in accordance with section 613A(c)(6), such allowance shall 
not exceed 50 percent (100 percent in the case of oil and gas 
properties other than stripper well properties as defined in section 
613a(c)(6)(E) for which depletion is computed in accordance with 
section 613A(c)(6)) of the taxpayer's taxable income from the property 
(computed without allowance for depletion).''
    (b) Conforming Amendment.--Section 613A(c)(7) of such Code 
(relating to special rules) is amended by striking subparagraph (C) and 
redesignating subparagraph (D) as subparagraph (C).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of enactment of this 
Act.

SEC. 4. EXPANSION OF ENHANCED OIL RECOVERY CREDIT.

    (a) In General.--Section 43(a) of the Internal Revenue Code of 1986 
(relating to enhanced oil recovery credit) is amended to read as 
follows:
    ``(a) General Rule.--For purposes of section 38, the enhanced oil 
recovery credit for any taxable year is an amount equal to--
            ``(1) 15 percent of the taxpayer's qualified enhanced oil 
        recovery costs for such taxable year, plus
            ``(2) in the case of a taxpayer (other than an integrated 
        oil company as defined in section 291(b)(4)), 15 percent of the 
        taxpayer's stripper well production costs for such taxable 
        year.''.
    (b) Stripper Well Production Costs, Etc.--Section 43(c) of such 
Code (defining qualified enhanced oil recovery costs) is amended by 
redesignating paragraphs (3) and (4) as paragraphs (4) and (5), 
respectively, and by inserting after paragraph (2) the following new 
paragraph:
            ``(3) Stripper well production costs.--
                    ``(A) In general.--The term `Stripper Well 
                Production costs' means any of the following:
                            ``(i) Any amount paid or incurred during 
                        the taxable year for tangible property--
                                    ``(I) which is an integral part of 
                                a qualified stripper well recovery 
                                project, and
                                    ``(II) with respect to which 
                                depreciation (or amortization in lieu 
                                of depreciation) is allowable under 
                                this chapter.
                            ``(ii) Any intangible drilling and 
                        development costs--
                                    ``(I) which are paid or incurred in 
                                connection with a qualified stripper 
                                well recovery project, and
                                    ``(II) with respect to which the 
                                taxpayer may make an election under 
                                section 263(c) of the taxable year.
                    ``(B) Qualified stripper well recovery project.--
                The term `qualified stripper well recovery project' 
                means any project which--
                            ``(i) involves a stripper well property as 
                        defined in section 613A(c)(6)(E),
                            ``(ii) involves the application (in 
                        accordance with sound engineering principles) 
                        of recovery methods approved by the Secretary 
                        for purposes of this section which can 
                        reasonably be expected to result in 
                        prolongation of the productive life of such 
                        stripper well property and in more than an 
                        insignificant increase in the amount of crude 
                        oil which will ultimately be recovered, and
                            ``(iii) is located within the United States 
                        (within the meaning of section 638(1)).
                    ``(C) Certification.--A project shall not be 
                treated as a qualified stripper well recovery project 
                unless the operator submits to the Secretary (at such 
                times and in such manner as the Secretary provides) a 
                certification that the project meets (and continues to 
                meet) the requirement of subparagraph (B).''.
    (c) No Double Certification.--Section 43(c) of such Code, as 
amended by subsection (b), is amended by adding at the end thereof the 
following new paragraph:
            ``(6) Only 1 certification allowed.--For purposes of this 
        section, the term `qualified enhanced oil recovery project' 
        shall not include any project which is certified as a qualified 
        advanced secondary recovery project under paragraph (3) and the 
        term `qualified stripper well recovery project' shall not 
        include any project which is certified as an enhanced oil 
        recovery project under paragraph (2).''.
    (d) Conforming Amendments.--
            (1) Paragraph (4) of section 43(c) of such Code, as 
        redesignated, is amended by inserting ``and qualified stripper 
        well recovery costs'' after ``qualified enhanced oil recovery 
        costs''.
            (2) The heading for subsection (c) of section 43 of such 
        Code is amended by inserting ``and Qualified Stripper Well 
        Recovery Costs'' after ``Costs''.
    (e) Effective Date.--The amendments made by this section shall 
apply in the case of amounts paid or incurred in taxable years 
beginning after the date of enactment of this Act.