I 

112TH CONGRESS 

2D SESSION H. R. 4231 

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. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 21, 2012 

Mr. YARMUTH (for himself, Mr. CONNOLLY of Virginia, Mr. CONYERS, Mr. 

STARK, Mr. JACKSON of Illinois, Mr. RANGEL, Ms. HAHN, Mr. RYAN of 

Ohio, Mr. SCHIFF, Mr. FILNER, Mr. VAN HOLLEN, Mr. CARSON of Indiana, Mr. MCNERNEY, and Ms. CHU) introduced the following bill; which 

was referred to the Committee on Ways and Means 

A BILL 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Gas Rebate Act of 

5 2012’’. 


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1 TITLE I—DENIAL OF CERTAIN 

2 TAX BENEFITS TO OIL AND 

3 GAS COMPANIES 

4 SEC. 101. REPEAL OF ENHANCED OIL RECOVERY CREDIT. 

5 (a) IN GENERAL.—Subpart D of part IV of sub6 chapter A of chapter 1 of the Internal Revenue Code of 

7 1986 is amended by striking section 43 (and the table of 

8 sections of such subpart is amended by striking the item 

9 relating to such section). 

10 (b) CONFORMING AMENDMENTS.— 

11 (1) Subsection (b) of section 38 of such Code 

12 is amended by striking paragraph (6) and redesig13 nating paragraphs (7) through (36) as paragraphs 

14 (6) through (35), respectively. 

15 (2) Paragraph (7) of section 45Q(d) of such 

16 Code is amended to read as follows: 

17 ‘‘(7) INFLATION ADJUSTMENT.— 

18 ‘‘(A) IN GENERAL.—In the case of any 

19 taxable year beginning in a calendar year after 

20 2009, there shall be substituted for each dollar 

21 amount contained in subsection (a) an amount 

22 equal to the product of— 

23 ‘‘(i) such dollar amount, multiplied by 

24 ‘‘(ii) the inflation adjustment factor 

25 for such calendar year. 


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1 ‘‘(B) INFLATION ADJUSTMENT FACTOR.— 

2 The term ‘inflation adjustment factor’ means, 

3 with respect to any calendar year, a fraction the 

4 numerator of which is the GNP implicit price 

5 deflator for the preceding calendar year and the 

6 denominator of which is the GNP implicit price 

7 deflator for 2008. For purposes of the pre8 ceding sentence, the term ‘GNP implicit price 

9 deflator’ means the first revision of the implicit 

10 price deflator for the gross national product as 

11 computed and published by the Secretary of 

12 Commerce. Not later than April 1 of any cal13 endar year, the Secretary shall publish the in14 flation adjustment factor for the preceding cal15 endar year.’’. 

16 (3) Subsection (c) of section 196 of such Code 

17 is amended by striking paragraph (5) and redesig18 nating paragraphs (6) through (14) as paragraphs 

19 (5) through (13), respectively. 

20 (c) EFFECTIVE DATE.— 

21 (1) IN GENERAL.—Except as otherwise pro22 vided in this subsection, the amendments made by 

23 this section shall apply to taxable years beginning 

24 after December 31, 2012. 


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1 (2) CONTINUATION OF BASIS REDUCTIONS.— 

2 Paragraph (2) of section 43(d) of the Internal Rev3 enue Code of 1986 (as in effect before its repeal by 

4 this section) shall continue to apply with respect to 

5 credits determined for taxable years beginning on or 

6 before December 31, 2012. 

7 SEC. 102. REPEAL OF CREDIT FOR PRODUCING OIL AND 

8 GAS FROM MARGINAL WELLS. 

9 (a) IN GENERAL.—Subpart D of part IV of sub10 chapter A of chapter 1 of the Internal Revenue Code of 

11 1986 is amended by striking section 45I (and the table 

12 of sections of such subpart is amended by striking the item 

13 relating to such section). 

14 (b) CONFORMING AMENDMENT.—Subsection (b) of 

15 section 38 of such Code, as amended by section 101, is 

16 amended by striking paragraph (18) and redesignating 

17 paragraphs (19) through (35) as paragraphs (18) through 

18 (34), respectively. 

19 (c) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to taxable years beginning after 

21 December 31, 2012. 

22 SEC. 103. REPEAL OF EXPENSING OF INTANGIBLE DRILL23 ING AND DEVELOPMENT COSTS. 

24 (a) IN GENERAL.—Section 263 of the Internal Rev25 enue Code of 1986 is amended by striking subsection (c). 


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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2012. 

4 SEC. 104. REPEAL OF DEDUCTION FOR TERTIARY 

5 INJECTANTS. 

6 (a) IN GENERAL.—Part VI of subchapter B of chap7 ter 1 of the Internal Revenue Code of 1986 is amended 

8 by striking section 193 (and the table of sections of such 

9 subpart is amended by striking the item relating to such 

10 section). 

11 (b) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to taxable years beginning after 

13 December 31, 2012. 

14 SEC. 105. REPEAL OF EXCEPTION TO PASSIVE LOSS LIMITA15 TIONS FOR WORKING INTERESTS IN OIL AND 

16 GAS PROPERTIES. 

17 (a) IN GENERAL.—Paragraph (3) of section 469(c) 

18 of the Internal Revenue Code of 1986 is amended by add19 ing at the end the following new subparagraph: 

20 ‘‘(C) TERMINATION.—Subparagraph (A) 

21 shall not apply with respect to any taxable year 

22 beginning after the date of the enactment of 

23 this Act.’’. 


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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2012. 

4 SEC. 106. REPEAL OF PERCENTAGE DEPLETION FOR OIL 

5 AND GAS WELLS. 

6 (a) IN GENERAL.—Part I of subchapter I of chapter 

7 1 of the Internal Revenue Code of 1986 is amended by 

8 striking section 613A (and the table of sections of such 

9 part is amended by striking the item relating to such sec10 tion). 

11 (b) CONFORMING AMENDMENTS.— 

12 (1) Subsection (d) of section 45H of such Code 

13 is amended— 

14 (A) by striking ‘‘For purposes this section’’ 

15 and inserting the following: 

16 ‘‘(1) IN GENERAL.—For purposes of this sec17 tion’’, 

18 (B) by striking ‘‘(within the meaning of 

19 section 613A(d)(3))’’, and 

20 (C) by adding at the end the following new 

21 paragraph: 

22 ‘‘(2) RELATED PERSON.—For purposes of this 

23 subsection, a person is a related person with respect 

24 to the taxpayer if a significant ownership interest in 

25 either the taxpayer or such person is held by the 


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1 other, or if a third person has a significant owner2 ship interest in both the taxpayer and such person. 

3 For purposes of the preceding sentence, the term 

4 ‘significant ownership interest’ means— 

5 ‘‘(A) with respect to any corporation, 5 

6 percent or more in value of the outstanding 

7 stock of such corporation, 

8 ‘‘(B) with respect to a partnership, 5 per9 cent or more interest in the profits or capital of 

10 such partnership, and 

11 ‘‘(C) with respect to an estate or trust, 5 

12 percent or more of the beneficial interests in 

13 such estate or trust. 

14 For purposes of determining a significant ownership 

15 interest, an interest owned by or for a corporation, 

16 partnership, trust, or estate shall be considered as 

17 owned directly both by itself and proportionately by 

18 its shareholders, partners, or beneficiaries, as the 

19 case may be.’’. 

20 (2) Subparagraph (F) of section 56(g)(4) of 

21 such Code is amended to read as follows: 

22 ‘‘(F) DEPLETION.—The allowance for de23 pletion with respect to any property placed in 

24 service in a taxable year beginning after DeVerDate Mar 15 2010 00:53 Mar 22, 2012 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4231.IH H4231

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1 cember 31, 1989, shall be cost depletion deter2 mined under section 611.’’. 

3 (3) Paragraph (1) of section 57(a) of such Code 

4 is amended by striking the last sentence. 

5 (4) Paragraph (4) of section 291(b) of such 

6 Code is amended by adding at the end the following: 

7 ‘‘Any reference in the preceding sentence to section 

8 613A shall be treated as a reference to such section 

9 as in effect prior to the date of the enactment of the 

10 Gas Rebate Act of 2012.’’. 

11 (5) Subsection (d) of section 613 of such Code 

12 is amended by striking ‘‘Except as provided in sec13 tion 613A, in the case of’’ and inserting ‘‘In the case 

14 of’’. 

15 (6) Subsection (e) of section 613 of such Code 

16 is amended— 

17 (A) by striking ‘‘or section 613A’’ in para18 graph (2), and 

19 (B) by striking ‘‘any amount described in 

20 section 613A(d)(5)’’ in paragraph (3) and in21 serting ‘‘any lease bonus, advance royalty, or 

22 other amount payable without regard to produc23 tion from property’’. 

24 (7) Subsection (a) of section 705 of such Code 

25 is amended— 


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1 (A) by inserting ‘‘and’’ at the end of para2 graph (1)(C), 

3 (B) by striking ‘‘; and’’ at the end of para4 graph (2)(B) and inserting a period, and 

5 (C) by striking paragraph (3). 

6 (8) Section 776 of such Code is amended by 

7 striking subsection (a) and by redesignating sub8 section (b) as subsection (a). 

9 (9) Subparagraph (D) of section 954(g)(2) of 

10 such Code is amended by inserting ‘‘(as in effect be11 fore the date of the enactment of the Gas Rebate 

12 Act of 2012)’’ after ‘‘section 613A’’. 

13 (10) Subparagraph (C) of section 993(c)(2) of 

14 such Code is amended by striking ‘‘section 613 or 

15 613A’’ and inserting ‘‘section 613 (determined with16 out regard to subsection (d) thereof)’’. 

17 (11) Subparagraph (D) of section 1202(e)(3) of 

18 such Code is amended by striking ‘‘section 613 or 

19 613A’’ and inserting ‘‘section 613 (determined with20 out regard to subsection (d) thereof)’’. 

21 (12) Paragraph (2) of section 1367(a) of such 

22 Code is amended by inserting ‘‘and’’ at the end of 

23 subparagraph (C), by striking ‘‘, and’’ at the end of 

24 subparagraph (D) and inserting a period, and by 

25 striking subparagraph (E). 


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1 (13) Subsection (c) of section 1446 of such 

2 Code is amended by striking paragraph (2) and by 

3 redesignating paragraph (3) as paragraph (2). 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to property placed in service after 

6 December 31, 2012. 

7 SEC. 107. DEDUCTION FOR INCOME ATTRIBUTABLE TO DO8 MESTIC PRODUCTION ACTIVITIES NOT AL9 LOWED WITH RESPECT TO OIL AND GAS AC10 TIVITIES. 

11 (a) IN GENERAL.—Subparagraph (B) of section 

12 199(c)(4) of the Internal Revenue Code of 1986 is amend13 ed by striking ‘‘and’’ at the end of clause (ii), by striking 

14 the period at the end of clause (iii) and inserting ‘‘, and’’, 

15 and by inserting after clause (iii) the following new clause: 

16 ‘‘(iv) the production, refining, proc17 essing, transportation, or distribution of 

18 oil, gas, or any primary product thereof.’’. 

19 (b) CONFORMING AMENDMENT.—Subsection (d) of 

20 section 199 of such Code is amended by striking para21 graph (9) and by redesignating paragraph (10) as para22 graph (9). 

23 (c) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to taxable years beginning after 

25 December 31, 2012. 


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1 SEC. 108. 7-YEAR AMORTIZATION FOR GEOLOGICAL AND 

2 GEOPHYSICAL EXPENDITURES. 

3 (a) IN GENERAL.—Subsection (h) of section 167 of 

4 the Internal Revenue Code of 1986 is amended— 

5 (1) by striking ‘‘24-month’’ in paragraphs (1) 

6 and (4) and inserting ‘‘7-year’’, and 

7 (2) by striking paragraph (5). 

8 (b) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to expenses paid or incurred after 

10 December 31, 2012. 

11 TITLE II—REGISTERED VEHICLE 

12 OWNER REBATE 

13 SEC. 201. REGISTERED VEHICLE OWNER REBATE. 

14 (a) IN GENERAL.—Each person who is a registered 

15 motor vehicle owner as of the date of the enactment of 

16 this Act, shall be treated as having made a payment 

17 against the tax imposed by chapter 1 of the Internal Rev18 enue Code of 1986 for the taxable year during which such 

19 date occurs in an amount equal to the motor vehicle owner 

20 rebate amount with respect to such person. 

21 (b) MOTOR VEHICLE OWNER REBATE AMOUNT.— 

22 For purposes of this section, the motor vehicle owner re23 bate amount with respect to any person is an amount 

24 equal to— 

25 (1) the number of motor vehicles registered by 

26 such person in the United States, multiplied by 


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1 (2) an amount equal to— 

2 (A) the amount of revenue that the Sec3 retary of the Treasury estimates will be received 

4 in the Treasury after December 31, 2012, and 

5 before December 31, 2022, which is attrib6 utable to title I of the Gas Rebate Act of 2012 

7 and the amendments made thereby, divided by 

8 (B) the number of motor vehicles reg9 istered by all persons in the United States. 

10 (c) ADVANCE PAYMENT.— 

11 (1) IN GENERAL.—The Secretary of the Treas12 ury shall, subject to provisions of the Internal Rev13 enue Code of 1986, refund or credit any overpay14 ment attributable to this section as rapidly as pos15 sible. 

16 (2) NO INTEREST.—No interest shall be allowed 

17 on any overpayment attributable to this section. 

18 (d) DEFINITION AND SPECIAL RULES.—For pur19 poses of this section— 

20 (1) MOTOR VEHICLE.—The term ‘‘motor vehi21 cle’’ means any vehicle which is manufactured pri22 marily for use on public streets, roads, and highways 

23 (not including a vehicle operated exclusively on rail 

24 or rails) and which has at least 4 wheels. 


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1 (2) REGISTRATION.—A motor vehicle shall not 

2 be treated as registered in the United States unless 

3 such vehicle is situated within the United States and 

4 registered under the laws of one of the several 

5 States. 

6 (3) LONG-TERM LEASE AGREEMENTS.—In the 

7 case of a person who leases a vehicle under a lease 

8 agreement with an uninterrupted lease term of 1 

9 year or more, such person (and not the lessor of the 

10 vehicle) shall be treated as the registered vehicle 

11 owner. 

12 (4) NO PAYMENTS TO GOVERNMENT ENTI13 TIES.—Motor vehicles owned by any Federal, State, 

14 local, or foreign government (or any political subdivi15 sion, agency, or instrumentality thereof) shall not be 

16 taken into account. 

17 (e) COORDINATION WITH STATE AUTHORITIES.— 

18 For purposes of this section, the Secretary of the Treasury 

19 shall prescribe such rules, and consult with such State au20 thorities, as may be necessary or appropriate to determine 

21 the registered motor vehicle owners to whom this section 

22 applies and to prevent erroneous rebates and double23 counting of motor vehicles. 

Æ 


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