I 

115TH CONGRESS 

2D SESSION H. R. 7375 

To eliminate certain tax breaks and benefits and use the savings for investment in affordable housing for extremely low- and very low-income families, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 20, 2018 

Ms. JONES of Michigan (for herself and Mrs. LAWRENCE) introduced the following bill; which was referred to the Committee on Ways and Means, 

and in addition to the Committees on Natural Resources, Financial Services, and the Budget, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

A BILL 

To eliminate certain tax breaks and benefits and use the 

savings for investment in affordable housing for extremely low- and very low-income families, and for other 

purposes. 

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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

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1 ants and Economic Renewal Act of 2018’’ or the ‘‘SHEL2 TER Act of 2018’’. 

3 (b) TABLE OF CONTENTS.—The table of contents for 

4 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—ELIMINATING FOSSIL FUEL TAX BREAKS 

Sec. 101. Modifications of foreign tax credit rules applicable to major integrated oil companies which are dual capacity taxpayers. 

Sec. 102. Limitation on deduction for intangible drilling and development costs; 

amortization of disallowed amounts. 

Sec. 103. Limitation on percentage depletion allowance for oil and gas wells. 

Sec. 104. Limitation on deduction for tertiary injectants. 

Sec. 105. Modification of definition of major integrated oil company. 

TITLE II—OUTER CONTINENTAL SHELF OIL AND NATURAL GAS 

Sec. 201. Repeal of outer Continental Shelf deep water and deep gas royalty 

relief. 

TITLE III—INVESTMENT IN AFFORDABLE HOUSING 

Sec. 301. Use of savings for Housing Trust Fund investment. 

Sec. 302. Treatment of area median incomes and income ceilings. 

TITLE IV—BUDGETARY EFFECTS 

Sec. 401. Compliance with Pay-Go. 

5 TITLE I—ELIMINATING FOSSIL 

6 FUEL TAX BREAKS 

7 SEC. 101. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 

8 APPLICABLE TO MAJOR INTEGRATED OIL 

9 COMPANIES WHICH ARE DUAL CAPACITY 

10 TAXPAYERS. 

11 (a) IN GENERAL.—Section 901 of the Internal Rev12 enue Code of 1986 is amended by redesignating subsection 

13 (n) as subsection (o) and by inserting after subsection (m) 

14 the following new subsection: 


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1 ‘‘(n) SPECIAL RULES RELATING TO MAJOR INTE2 GRATED OIL COMPANIES WHICH ARE DUAL CAPACITY

3 TAXPAYERS.— 

4 ‘‘(1) GENERAL RULE.—Notwithstanding any 

5 other provision of this chapter, any amount paid or 

6 accrued by a dual capacity taxpayer which is a 

7 major integrated oil company (within the meaning of 

8 section 167(h)(5)) to a foreign country or possession 

9 of the United States for any period shall not be con10 sidered a tax— 

11 ‘‘(A) if, for such period, the foreign coun12 try or possession does not impose a generally 

13 applicable income tax, or 

14 ‘‘(B) to the extent such amount exceeds 

15 the amount (determined in accordance with reg16 ulations) which— 

17 ‘‘(i) is paid by such dual capacity tax18 payer pursuant to the generally applicable 

19 income tax imposed by the country or pos20 session, or 

21 ‘‘(ii) would be paid if the generally ap22 plicable income tax imposed by the country 

23 or possession were applicable to such dual 

24 capacity taxpayer. 


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1 Nothing in this paragraph shall be construed to 

2 imply the proper treatment of any such amount not 

3 in excess of the amount determined under subpara4 graph (B). 

5 ‘‘(2) DUAL CAPACITY TAXPAYER.—For pur6 poses of this subsection, the term ‘dual capacity tax7 payer’ means, with respect to any foreign country or 

8 possession of the United States, a person who— 

9 ‘‘(A) is subject to a levy of such country or 

10 possession, and 

11 ‘‘(B) receives (or will receive) directly or 

12 indirectly a specific economic benefit (as deter13 mined in accordance with regulations) from 

14 such country or possession. 

15 ‘‘(3) GENERALLY APPLICABLE INCOME TAX.— 

16 For purposes of this subsection— 

17 ‘‘(A) IN GENERAL.—The term ‘generally 

18 applicable income tax’ means an income tax (or 

19 a series of income taxes) which is generally im20 posed under the laws of a foreign country or 

21 possession on income derived from the conduct 

22 of a trade or business within such country or 

23 possession. 


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1 ‘‘(B) EXCEPTIONS.—Such term shall not 

2 include a tax unless it has substantial applica3 tion, by its terms and in practice, to— 

4 ‘‘(i) persons who are not dual capacity 

5 taxpayers, and 

6 ‘‘(ii) persons who are citizens or resi7 dents of the foreign country or posses8 sion.’’. 

9 (b) EFFECTIVE DATE.— 

10 (1) IN GENERAL.—The amendments made by 

11 this section shall apply to taxes paid or accrued in 

12 taxable years beginning after the date of the enact13 ment of this Act. 

14 (2) CONTRARY TREATY OBLIGATIONS

15 UPHELD.—The amendments made by this section 

16 shall not apply to the extent contrary to any treaty 

17 obligation of the United States. 

18 SEC. 102. LIMITATION ON DEDUCTION FOR INTANGIBLE 

19 DRILLING AND DEVELOPMENT COSTS; AMOR20 TIZATION OF DISALLOWED AMOUNTS. 

21 (a) IN GENERAL.—Section 263(c) of the Internal 

22 Revenue Code of 1986 is amended to read as follows: 

23 ‘‘(c) INTANGIBLE DRILLING AND DEVELOPMENT

24 COSTS IN THE CASE OF OIL AND GAS WELLS AND GEO25 THERMAL WELLS.— 


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1 ‘‘(1) IN GENERAL.—Notwithstanding subsection 

2 (a), and except as provided in subsection (i), regula3 tions shall be prescribed by the Secretary under this 

4 subtitle corresponding to the regulations which 

5 granted the option to deduct as expenses intangible 

6 drilling and development costs in the case of oil and 

7 gas wells and which were recognized and approved 

8 by the Congress in House Concurrent Resolution 50, 

9 Seventy-ninth Congress. Such regulations shall also 

10 grant the option to deduct as expenses intangible 

11 drilling and development costs in the case of wells 

12 drilled for any geothermal deposit (as defined in sec13 tion 613(e)(2)) to the same extent and in the same 

14 manner as such expenses are deductible in the case 

15 of oil and gas wells. This subsection shall not apply 

16 with respect to any costs to which any deduction is 

17 allowed under section 59(e) or 291. 

18 ‘‘(2) EXCLUSION.— 

19 ‘‘(A) IN GENERAL.—This subsection shall 

20 not apply to amounts paid or incurred by a tax21 payer in any taxable year in which such tax22 payer is a major integrated oil company (within 

23 the meaning of section 167(h)(5)). 

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1 GRAPH (A).—The amount not allowable as a de2 duction for any taxable year by reason of sub3 paragraph (A) shall be allowable as a deduction 

4 ratably over the 60-month period beginning 

5 with the month in which the costs are paid or 

6 incurred. For purposes of section 1254, any de7 duction under this subparagraph shall be treat8 ed as a deduction under this subsection.’’. 

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

10 this section shall apply to amounts paid or incurred in tax11 able years beginning after December 31, 2018. 

12 SEC. 103. LIMITATION ON PERCENTAGE DEPLETION AL13 LOWANCE FOR OIL AND GAS WELLS. 

14 (a) IN GENERAL.—Section 613A of the Internal Rev15 enue Code of 1986 is amended by adding at the end the 

16 following new subsection: 

17 ‘‘(f) APPLICATION WITH RESPECT TO MAJOR INTE18 GRATED OIL COMPANIES.—In the case of any taxable year 

19 in which the taxpayer is a major integrated oil company 

20 (within the meaning of section 167(h)(5)), the allowance 

21 for percentage depletion shall be zero.’’. 

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

23 this section shall apply to taxable years beginning after 

24 December 31, 2018. 


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1 SEC. 104. LIMITATION ON DEDUCTION FOR TERTIARY 

2 INJECTANTS. 

3 (a) IN GENERAL.—Section 193 of the Internal Rev4 enue Code of 1986 is amended by adding at the end the 

5 following new subsection: 

6 ‘‘(d) APPLICATION WITH RESPECT TO MAJOR INTE7 GRATED OIL COMPANIES.— 

8 ‘‘(1) IN GENERAL.—This section shall not apply 

9 to amounts paid or incurred by a taxpayer in any 

10 taxable year in which such taxpayer is a major inte11 grated oil company (within the meaning of section 

12 167(h)(5)). 

13 ‘‘(2) AMORTIZATION OF AMOUNTS NOT ALLOW14 ABLE AS DEDUCTIONS UNDER PARAGRAPH (1).—The 

15 amount not allowable as a deduction for any taxable 

16 year by reason of paragraph (1) shall be allowable 

17 as a deduction ratably over the 60-month period be18 ginning with the month in which the costs are paid 

19 or incurred.’’. 

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

21 this section shall apply to amounts paid or incurred in tax22 able years beginning after December 31, 2018. 


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1 SEC. 105. MODIFICATION OF DEFINITION OF MAJOR INTE2 GRATED OIL COMPANY. 

3 (a) IN GENERAL.—Paragraph (5) of section 167(h) 

4 of the Internal Revenue Code of 1986 is amended by add5 ing at the end the following new subparagraph: 

6 ‘‘(C) CERTAIN SUCCESSORS IN INTER7 EST.—For purposes of this paragraph, the term 

8 ‘major integrated oil company’ includes any 

9 successor in interest of a company that was de10 scribed in subparagraph (B) in any taxable 

11 year, if such successor controls more than 50 

12 percent of the crude oil production or natural 

13 gas production of such company.’’. 

14 (b) CONFORMING AMENDMENTS.— 

15 (1) IN GENERAL.—Subparagraph (B) of section 

16 167(h)(5) of the Internal Revenue Code of 1986 is 

17 amended by inserting ‘‘except as provided in sub18 paragraph (C),’’ after ‘‘For purposes of this para19 graph,’’. 

20 (2) TAXABLE YEARS TESTED.—Clause (iii) of 

21 section 167(h)(5)(B) of such Code is amended— 

22 (A) by striking ‘‘does not apply by reason 

23 of paragraph (4) of section 613A(d)’’ and in24 serting ‘‘did not apply by reason of paragraph 

25 (4) of section 613A(d) for any taxable year 

26 after 2004’’; and 


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1 (B) by striking ‘‘does not apply’’ in sub2 clause (II) and inserting ‘‘did not apply for the 

3 taxable year’’. 

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

5 this section shall apply to taxable years beginning after 

6 December 31, 2018. 

7 TITLE II—OUTER CONTINENTAL 

8 SHELF OIL AND NATURAL GAS 

9 SEC. 201. REPEAL OF OUTER CONTINENTAL SHELF DEEP 

10 WATER AND DEEP GAS ROYALTY RELIEF. 

11 (a) IN GENERAL.—Sections 344 and 345 of the En12 ergy Policy Act of 2005 (42 U.S.C. 15904, 15905) are 

13 repealed. 

14 (b) ADMINISTRATION.—The Secretary of the Interior 

15 shall not be required to provide for royalty relief in the 

16 lease sale terms beginning with the first lease sale held 

17 on or after the date of enactment of this Act for which 

18 a final notice of sale has not been published. 

19 TITLE III—INVESTMENT IN 

20 AFFORDABLE HOUSING 

21 SEC. 301. USE OF SAVINGS FOR HOUSING TRUST FUND IN22 VESTMENT. 

23 (a) USE OF SAVINGS.—For each of the years 2019 

24 through 2028, the Secretary of the Treasury shall deter25 mine the amount of revenues accruing to the general fund 


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1 of the Treasury by reason of the enactment of titles I and 

2 II of this Act and shall credit an amount equal to such 

3 revenues to the Housing Trust Fund established under 

4 section 1338 of the Federal Housing Enterprises Finan5 cial Safety and Soundness Act of 1992 (12 U.S.C. 4568). 

6 (b) ENVIRONMENTAL REHABILITATION ACTIVI7 TIES.—Of any amount credited to the Housing Trust 

8 Fund for a year pursuant to subsection (a), 10 percent 

9 shall be allocated for and distributed to States, in accord10 ance with the formula established pursuant to subsection 

11 (c)(3) of such section 1338, for use only to conduct activi12 ties to remediate environmental hazards, including activi13 ties for reduction, elimination, and abatement of lead14 based paint hazards, in housing for extremely low- and 

15 very low-income households. 

16 (c) CHILDHOOD LEAD PREVENTION.—Section 1338 

17 (g)(2)(D) of the Federal Housing Enterprises Financial 

18 Safety and Soundness Act of 1992 (12 U.S.C. 

19 4568(g)(2)(D)) is amended— 

20 (1) in clause (v), by striking ‘‘and’’ at the end; 

21 (2) in clause (vi), by striking the period at the 

22 end and inserting ‘‘; and’’; and 

23 (3) by adding at the end the following new 

24 clause: 


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1 ‘‘(vii) the ratio of children living in an 

2 applicant’s jurisdiction that suffer from 

3 blood lead levels higher than 5 micrograms 

4 per deciliter.’’. 

5 SEC. 302. TREATMENT OF AREA MEDIAN INCOMES AND IN6 COME CEILINGS. 

7 Subparagraph (D) of section 3(b)(2) of the United 

8 States Housing Act of 1937 (42 U.S.C. 1437a(b)(2)(D)) 

9 is amended— 

10 (1) in the second sentence, by inserting ‘‘and 

11 Wayne County in the State of Michigan,’’ after 

12 ‘‘State of New York,’’; 

13 (2) in the third sentence, by striking ‘‘such 

14 metropolitan statistical area’’ and inserting ‘‘the 

15 metropolitan statistical area in which Westchester 

16 and Rockland Counties are located but’’; and 

17 (3) by inserting after the period at the end of 

18 the third sentence the following: ‘‘In determining 

19 such area median incomes or establishing such in20 come ceilings or limits for the portion of the metro21 politan statistical area in which Wayne County is lo22 cated but that does not include Wayne County, the 

23 Secretary shall determine or establish area median 

24 incomes and income ceilings and limits as if such 

25 portion included Wayne County. In determining such 


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1 income ceilings or limits for the portion of such met2 ropolitan statistical areas that include Detroit, 

3 Michigan, the Secretary shall determine for units in 

4 Detroit such income ceilings or limits exclusive of 

5 Livonia, Michigan.’’. 

6 TITLE IV—BUDGETARY EFFECTS 

7 SEC. 401. COMPLIANCE WITH PAY-GO. 

8 The budgetary effects of this Act, for the purpose of 

9 complying with the Statutory Pay-As-You-Go Act of 2010, 

10 shall be determined by reference to the latest statement 

11 titled ‘‘Budgetary Effects of PAYGO Legislation’’ for this 

12 Act, submitted for printing in the Congressional Record 

13 by the Chairman of the Senate Budget Committee, pro14 vided that such statement has been submitted prior to the 

15 vote on passage. 

Æ 


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