End Oil and Gas Tax Subsidies Act of 2015

Summary: End Oil and Gas Tax Subsidies Act of 2015 This bill amends the Internal Revenue Code to:   increase to seven years the amortization period for geological and geophysical expenditures;  repeal the tax credits for producing oil and gas from marginal wells and for enhanced oil recovery; repeal the tax deduction for the intangible drilling and development costs of oil and gas wells;  repeal percentage depletion for oil and gas wells; repeal the tax deduction for tertiary injectant expenses;  repeal the passive loss exception for working interests in oil and gas property;  deny the tax deduction for income attributable to domestic production activities for oil and gas activities;  prohibit the use of the last-in, first-out (LIFO) accounting method by major integrated oil companies; and  limit the foreign tax credit for dual capacity taxpayers (i.e., taxpayers who are subject to a levy of a foreign country or U.S. possession and receive specific economic benefits from such country or possession).  

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``End Oil and Gas Tax Subsidies Act of 
2015''.

SEC. 2. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES.

    (a) In General.--Section 167(h) of the Internal Revenue Code of 
1986 is amended--
            (1) by striking ``24-month period'' in paragraph (1) and 
        inserting ``7-year period'', and
            (2) by striking paragraph (5).
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred in taxable years beginning after December 
31, 2015.

SEC. 3. PRODUCING OIL AND GAS FROM MARGINAL WELLS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by striking section 45I 
(and by striking the item relating to such section in the table of 
sections for such subpart).
    (b) Conforming Amendment.--Section 38(b) of such Code is amended by 
striking paragraph (19).
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to credits determined for taxable years beginning after December 
31, 2015.

SEC. 4. ENHANCED OIL RECOVERY CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by striking section 43 
(and by striking the item relating to such section in the table of 
sections for such subpart).
    (b) Conforming Amendment.--Section 38(b) of such Code is amended by 
striking paragraph (6).
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after 
December 31, 2015.

SEC. 5. INTANGIBLE DRILLING AND DEVELOPMENT COSTS IN THE CASE OF OIL 
              AND GAS WELLS.

    (a) In General.--Subsection (c) of section 263 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
sentence: ``This subsection shall not apply to amounts paid or incurred 
by a taxpayer with respect to an oil or gas well after December 31, 
2015.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred in taxable years beginning after December 
31, 2015.

SEC. 6. REPEAL OF PERCENTAGE DEPLETION FOR OIL AND GAS WELLS.

    (a) In General.--Part I of subchapter I of chapter 1 of the 
Internal Revenue Code of 1986 is amended by striking section 613A (and 
the table of sections of such part is amended by striking the item 
relating to such section).
    (b) Conforming Amendments.--
            (1) Subsection (d) of section 45H of such Code is amended--
                    (A) by striking ``For purposes this section'' and 
                inserting the following:
            ``(1) In general.--For purposes of this section'',
                    (B) by striking ``(within the meaning of section 
                613A(d)(3))'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(2) Related person.--For purposes of this subsection, a 
        person is a related person with respect to the taxpayer if a 
        significant ownership interest in either the taxpayer or such 
        person is held by the other, or if a third person has a 
        significant ownership interest in both the taxpayer and such 
        person. For purposes of the preceding sentence, the term 
        `significant ownership interest' means--
                    ``(A) with respect to any corporation, 5 percent or 
                more in value of the outstanding stock of such 
                corporation,
                    ``(B) with respect to a partnership, 5 percent or 
                more interest in the profits or capital of such 
                partnership, and
                    ``(C) with respect to an estate or trust, 5 percent 
                or more of the beneficial interests in such estate or 
                trust.
        For purposes of determining a significant ownership interest, 
        an interest owned by or for a corporation, partnership, trust, 
        or estate shall be considered as owned directly both by itself 
        and proportionately by its shareholders, partners, or 
        beneficiaries, as the case may be.''.
            (2) Section 56(g)(4)(F) of such Code is amended to read as 
        follows:
                    ``(F) Depletion.--The allowance for depletion with 
                respect to any property placed in service in a taxable 
                year beginning after December 31, 1989, shall be cost 
                depletion determined under section 611.''.
            (3) Section 57(a)(1) of such Code is amended by striking 
        the last sentence.
            (4) Section 291(b)(4) of such Code is amended by adding at 
        the end the following: ``Any reference in the preceding 
        sentence to section 613A shall be treated as a reference to 
        such section as in effect prior to the date of the enactment of 
        the End Oil and Gas Tax Subsidies Act of 2015.''.
            (5) Section 613(d) of such Code is amended by striking 
        ``Except as provided in section 613A, in the case of'' and 
        inserting ``In the case of''.
            (6) Section 613(e) of such Code is amended--
                    (A) by striking ``or section 613A'' in paragraph 
                (2), and
                    (B) by striking ``any amount described in section 
                613A(d)(5)'' in paragraph (3) and inserting ``any lease 
                bonus, advance royalty, or other amount payable without 
                regard to production from property''.
            (7) Section 705(a) of such Code is amended--
                    (A) by inserting ``and'' at the end of paragraph 
                (1)(C),
                    (B) by striking ``; and'' at the end of paragraph 
                (2)(B) and inserting a period, and
                    (C) by striking paragraph (3).
            (8) Section 776 of such Code is amended by striking 
        subsection (a) and by redesignating subsection (b) as 
        subsection (a).
            (9) Section 954(g)(2)(D) of such Code is amended by 
        inserting ``(as in effect before the date of the enactment of 
        the End Oil and Gas Tax Subsidies Act of 2015)'' after 
        ``section 613A''.
            (10) Section 993(c)(2)(C) of such Code is amended by 
        striking ``section 613 or 613A'' and inserting ``section 613 
        (determined without regard to subsection (d) thereof)''.
            (11) Section 1202(e)(3)(D) of such Code is amended by 
        striking ``section 613 or 613A'' and inserting ``section 613 
        (determined without regard to subsection (d) thereof)''.
            (12) Section 1367(a)(2) of such Code is amended by 
        inserting ``and'' at the end of subparagraph (C), by striking 
        ``, and'' at the end of subparagraph (D) and inserting a 
        period, and by striking subparagraph (E).
            (13) Section 1446(c) of such Code is amended by striking 
        paragraph (2) and by redesignating paragraph (3) as paragraph 
        (2).
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2015.

SEC. 7. REPEAL OF DEDUCTION FOR TERTIARY INJECTANTS.

    (a) In General.--Part VI of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by striking section 193 (and 
the table of sections of such subpart is amended by striking the item 
relating to such section).
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.

SEC. 8. REPEAL OF EXCEPTION TO PASSIVE LOSS LIMITATIONS FOR WORKING 
              INTERESTS IN OIL AND GAS PROPERTIES.

    (a) In General.--Section 469(c)(3) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
                    ``(C) Termination.--Subparagraph (A) shall not 
                apply with respect to any taxable year beginning after 
                the date of the enactment of this Act.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2015.

SEC. 9. DEDUCTION FOR INCOME ATTRIBUTABLE TO DOMESTIC PRODUCTION 
              ACTIVITIES NOT ALLOWED WITH RESPECT TO OIL AND GAS 
              ACTIVITIES.

    (a) In General.--Section 199(c)(4)(B) of the Internal Revenue Code 
of 1986 is amended by striking ``and'' at the end of clause (ii), by 
striking the period at the end of clause (iii) and inserting ``, and'', 
and by inserting after clause (iii) the following new clause:
                            ``(iv) the production, refining, 
                        processing, transportation, or distribution of 
                        oil, gas, or any primary product thereof.''.
    (b) Conforming Amendment.--Section 199(d) of such Code is amended 
by striking paragraph (9) and by redesignating paragraph (10) as 
paragraph (9).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.

SEC. 10. PROHIBITION ON USING LAST-IN, FIRST-OUT ACCOUNTING FOR OIL AND 
              GAS COMPANIES.

    (a) In General.--Section 472 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(h) Oil and Gas Companies.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section, a major integrated oil company may not use the 
        method provided in subsection (b) in inventorying of any goods.
            ``(2) Major integrated oil company.--For purposes of this 
        subsection, the term `major integrated oil company' means, with 
        respect to any taxable year, a producer of crude oil--
                    ``(A) which has an average daily worldwide 
                production of crude oil of at least 500,000 barrels for 
                the taxable year,
                    ``(B) which has gross receipts in excess of 
                $1,000,000,000 for the taxable year, and
                    ``(C) the average daily refinery runs of the 
                taxpayer and related persons for the taxable year 
                exceed 75,000 barrels.
            ``(3) Special rules.--
                    ``(A) Crude production and gross receipts.--For 
                purposes of subparagraphs (A) and (B) of paragraph 
                (2)--
                            ``(i) Controlled groups and common 
                        control.--All persons treated as a single 
                        employer under subsections (a) and (b) of 
                        section 52 shall be treated as 1 person.
                            ``(ii) Short taxable years.--In case of a 
                        short taxable year, the rule under section 
                        448(c)(3)(B) shall apply.
                    ``(B) Average daily refinery runs.--For purposes of 
                paragraph (2)(C)--
                            ``(i) In general.--The average daily 
                        refinery runs for any taxable year shall be 
                        determined by dividing the aggregate refinery 
                        runs for the taxable year by the number of days 
                        in the taxable year.
                            ``(ii) Related persons.--A person is a 
                        related person with respect to the taxpayer if 
                        a significant ownership interest in either the 
                        taxpayer or such person is held by the other, 
                        or if a third person has a significant 
                        ownership interest in both the taxpayer and 
                        such person.
                            ``(iii) Significant ownership interest.--
                        For purposes of clause (ii), the term 
                        `significant ownership interest' means--
                                    ``(I) with respect to any 
                                corporation, 15 percent or more in 
                                value of the outstanding stock of such 
                                corporation,
                                    ``(II) with respect to a 
                                partnership, 15 percent or more 
                                interest in the profits or capital of 
                                such partnership, and
                                    ``(III) with respect to an estate 
                                or trust, 15 percent or more of the 
                                beneficial interests in such estate or 
                                trust.
                        For purposes of determining a significant 
                        ownership interest, an interest owned by or for 
                        a corporation, partnership, trust, or estate 
                        shall be considered as owned directly both by 
                        itself and proportionately by its shareholders, 
                        partners, or beneficiaries, as the case may 
                        be.''.
    (b) Effective Date and Special Rule.--
            (1) In general.--The amendment made by subsection (a) shall 
        apply to taxable years beginning after December 31, 2015.
            (2) Change in method of accounting.--In the case of any 
        taxpayer required by the amendment made by this section to 
        change its method of accounting for its first taxable year 
        beginning after the date of the enactment of this Act--
                    (A) such change shall be treated as initiated by 
                the taxpayer,
                    (B) such change shall be treated as made with the 
                consent of the Secretary of the Treasury, and
                    (C) the net amount of the adjustments required to 
                be taken into account by the taxpayer under section 481 
                of the Internal Revenue Code of 1986 shall be taken 
                into account ratably over a period (not greater than 8 
                taxable years) beginning with such first taxable year.

SEC. 11. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO DUAL 
              CAPACITY TAXPAYERS.

    (a) In General.--Section 901 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (n) as subsection (o) and by 
inserting after subsection (m) the following new subsection:
    ``(n) Special Rules Relating to Dual Capacity Taxpayers.--
            ``(1) General rule.--Notwithstanding any other provision of 
        this chapter, any amount paid or accrued by a dual capacity 
        taxpayer to a foreign country or possession of the United 
        States for any period with respect to combined foreign oil and 
        gas income (as defined in section 907(b)(1)) shall not be 
        considered a tax to the extent such amount exceeds the amount 
        (determined in accordance with regulations) which would have 
        been required to be paid if the taxpayer were not a dual 
        capacity taxpayer.
            ``(2) Dual capacity taxpayer.--For purposes of this 
        subsection, the term `dual capacity taxpayer' means, with 
        respect to any foreign country or possession of the United 
        States, a person who--
                    ``(A) is subject to a levy of such country or 
                possession, and
                    ``(B) receives (or will receive) directly or 
                indirectly a specific economic benefit (as determined 
                in accordance with regulations) from such country or 
                possession.''.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxes paid or accrued in taxable years beginning after 
        December 31, 2015.
            (2) Contrary treaty obligations upheld.--The amendments 
        made by this section shall not apply to the extent contrary to 
        any treaty obligation of the United States.