To amend the Internal Revenue Code of 1986 to repeal certain tax breaks for gas and oil companies and to refund the revenue savings to registered vehicle owners.

Summary: Gas Rebate Act of 2012 - Amends the Internal Revenue Code to repeal certain tax incentives for oil and gas companies, including: (1) the tax credit for enhanced oil recovery, (2) the tax credit for producing oil and gas from marginal wells, (3) the expensing allowance for intangible drilling and development costs, (4) the tax deduction for tertiary injectant expenses, (5) the exception to passive loss limitations for working interests in oil and gas properties, and (6) percentage depletion for oil and gas wells.

Denies a tax deduction for income attributable to the domestic production, refining, processing, transportation, or distribution of oil, gas, or any primary product thereof. Extends to seven years the required amortization period for geological and geophysical expenditures.

Allows registered motor vehicle owners a rebate against income tax based on their share of revenues saved from the repeal of the tax incentives for oil and gas companies by this Act.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Gas Rebate Act of 2012''.

    TITLE I--DENIAL OF CERTAIN TAX BENEFITS TO OIL AND GAS COMPANIES

SEC. 101. REPEAL OF 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 the table of sections of such subpart is amended by striking the 
item relating to such section).
    (b) Conforming Amendments.--
            (1) Subsection (b) of section 38 of such Code is amended by 
        striking paragraph (6) and redesignating paragraphs (7) through 
        (36) as paragraphs (6) through (35), respectively.
            (2) Paragraph (7) of section 45Q(d) of such Code is amended 
        to read as follows:
            ``(7) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning in a calendar year after 2009, there shall be 
                substituted for each dollar amount contained in 
                subsection (a) an amount equal to the product of--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the inflation adjustment factor for 
                        such calendar year.
                    ``(B) Inflation adjustment factor.--The term 
                `inflation adjustment factor' means, with respect to 
                any calendar year, a fraction the numerator of which is 
                the GNP implicit price deflator for the preceding 
                calendar year and the denominator of which is the GNP 
                implicit price deflator for 2008. For purposes of the 
                preceding sentence, the term `GNP implicit price 
                deflator' means the first revision of the implicit 
                price deflator for the gross national product as 
                computed and published by the Secretary of Commerce. 
                Not later than April 1 of any calendar year, the 
                Secretary shall publish the inflation adjustment factor 
                for the preceding calendar year.''.
            (3) Subsection (c) of section 196 of such Code is amended 
        by striking paragraph (5) and redesignating paragraphs (6) 
        through (14) as paragraphs (5) through (13), respectively.
    (c) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        taxable years beginning after December 31, 2012.
            (2) Continuation of basis reductions.--Paragraph (2) of 
        section 43(d) of the Internal Revenue Code of 1986 (as in 
        effect before its repeal by this section) shall continue to 
        apply with respect to credits determined for taxable years 
        beginning on or before December 31, 2012.

SEC. 102. REPEAL OF CREDIT FOR 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 the table of sections of such subpart is amended by striking the 
item relating to such section).
    (b) Conforming Amendment.--Subsection (b) of section 38 of such 
Code, as amended by section 101, is amended by striking paragraph (18) 
and redesignating paragraphs (19) through (35) as paragraphs (18) 
through (34), respectively.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

SEC. 103. REPEAL OF EXPENSING OF INTANGIBLE DRILLING AND DEVELOPMENT 
              COSTS.

    (a) In General.--Section 263 of the Internal Revenue Code of 1986 
is amended by striking subsection (c).
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2012.

SEC. 104. 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, 2012.

SEC. 105. REPEAL OF EXCEPTION TO PASSIVE LOSS LIMITATIONS FOR WORKING 
              INTERESTS IN OIL AND GAS PROPERTIES.

    (a) In General.--Paragraph (3) of section 469(c) 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, 2012.

SEC. 106. 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) Subparagraph (F) of section 56(g)(4) 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) Paragraph (1) of section 57(a) of such Code is amended 
        by striking the last sentence.
            (4) Paragraph (4) of section 291(b) 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 Gas Rebate Act of 2012.''.
            (5) Subsection (d) of section 613 of such Code is amended 
        by striking ``Except as provided in section 613A, in the case 
        of'' and inserting ``In the case of''.
            (6) Subsection (e) of section 613 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) Subsection (a) of section 705 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) Subparagraph (D) of section 954(g)(2) of such Code is 
        amended by inserting ``(as in effect before the date of the 
        enactment of the Gas Rebate Act of 2012)'' after ``section 
        613A''.
            (10) Subparagraph (C) of section 993(c)(2) of such Code is 
        amended by striking ``section 613 or 613A'' and inserting 
        ``section 613 (determined without regard to subsection (d) 
        thereof)''.
            (11) Subparagraph (D) of section 1202(e)(3) of such Code is 
        amended by striking ``section 613 or 613A'' and inserting 
        ``section 613 (determined without regard to subsection (d) 
        thereof)''.
            (12) Paragraph (2) of section 1367(a) 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) Subsection (c) of section 1446 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, 2012.

SEC. 107. DEDUCTION FOR INCOME ATTRIBUTABLE TO DOMESTIC PRODUCTION 
              ACTIVITIES NOT ALLOWED WITH RESPECT TO OIL AND GAS 
              ACTIVITIES.

    (a) In General.--Subparagraph (B) of section 199(c)(4) 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.--Subsection (d) of section 199 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, 2012.

SEC. 108. 7-YEAR AMORTIZATION FOR GEOLOGICAL AND GEOPHYSICAL 
              EXPENDITURES.

    (a) In General.--Subsection (h) of section 167 of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking ``24-month'' in paragraphs (1) and (4) and 
        inserting ``7-year'', and
            (2) by striking paragraph (5).
    (b) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred after December 31, 2012.

               TITLE II--REGISTERED VEHICLE OWNER REBATE

SEC. 201. REGISTERED VEHICLE OWNER REBATE.

    (a) In General.--Each person who is a registered motor vehicle 
owner as of the date of the enactment of this Act, shall be treated as 
having made a payment against the tax imposed by chapter 1 of the 
Internal Revenue Code of 1986 for the taxable year during which such 
date occurs in an amount equal to the motor vehicle owner rebate amount 
with respect to such person.
    (b) Motor Vehicle Owner Rebate Amount.--For purposes of this 
section, the motor vehicle owner rebate amount with respect to any 
person is an amount equal to--
            (1) the number of motor vehicles registered by such person 
        in the United States, multiplied by
            (2) an amount equal to--
                    (A) the amount of revenue that the Secretary of the 
                Treasury estimates will be received in the Treasury 
                after December 31, 2012, and before December 31, 2022, 
                which is attributable to title I of the Gas Rebate Act 
                of 2012 and the amendments made thereby, divided by
                    (B) the number of motor vehicles registered by all 
                persons in the United States.
    (c) Advance Payment.--
            (1) In general.--The Secretary of the Treasury shall, 
        subject to provisions of the Internal Revenue Code of 1986, 
        refund or credit any overpayment attributable to this section 
        as rapidly as possible.
            (2) No interest.--No interest shall be allowed on any 
        overpayment attributable to this section.
    (d) Definition and Special Rules.--For purposes of this section--
            (1) Motor vehicle.--The term ``motor vehicle'' means any 
        vehicle which is manufactured primarily for use on public 
        streets, roads, and highways (not including a vehicle operated 
        exclusively on rail or rails) and which has at least 4 wheels.
            (2) Registration.--A motor vehicle shall not be treated as 
        registered in the United States unless such vehicle is situated 
        within the United States and registered under the laws of one 
        of the several States.
            (3) Long-term lease agreements.--In the case of a person 
        who leases a vehicle under a lease agreement with an 
        uninterrupted lease term of 1 year or more, such person (and 
        not the lessor of the vehicle) shall be treated as the 
        registered vehicle owner.
            (4) No payments to government entities.--Motor vehicles 
        owned by any Federal, State, local, or foreign government (or 
        any political subdivision, agency, or instrumentality thereof) 
        shall not be taken into account.
    (e) Coordination With State Authorities.--For purposes of this 
section, the Secretary of the Treasury shall prescribe such rules, and 
consult with such State authorities, as may be necessary or appropriate 
to determine the registered motor vehicle owners to whom this section 
applies and to prevent erroneous rebates and double-counting of motor 
vehicles.