I

103D CONGRESS

2D SESSION H. R. 4532

To amend the Internal Revenue Code of 1986 to define tar sands for purposes

of the credit for producing fuels from nonconventional sources and to

repeal the minimum tax preference for intangible drilling costs.

IN THE HOUSE OF REPRESENTATIVES

MAY 26, 1994

Mr. THOMAS of California 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 define

tar sands for purposes of the credit for producing fuels

from nonconventional sources and to repeal the minimum

tax preference for intangible drilling costs.

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

3 SECTION 1. TAR SANDS DEFINED FOR PURPOSES OF CRED4 IT FOR PRODUCING FUELS FROM

5 NONCONVENTIONAL SOURCES.

6 (a) IN GENERAL.—Subsection (c) of section 29 of the

7 Internal Revenue Code of 1986 is amended by adding at

8 the end thereof the following new paragraph:
2

•HR 4532 IH

1 ‘‘(4) TAR SANDS.—The term ‘tar sands’ means

2 any consolidated or unconsolidated rock (other than

3 coal, oil shale, or gilsonite) that—

4 ‘‘(A) contains a hydrocarbonaceous mate5 rial with gas free viscosity, at original reservoir

6 temperature, greater than 10,000 centipoise, or

7 ‘‘(B) contains a hydrocarbonaceous mate8 rial and is produced by mining or quarrying.’’

9 (b) EFFECTIVE DATE.—Subsection (f) of section 29

10 of such Code is amended by adding at the end thereof

11 the following new flush sentence:

12 ‘‘Notwithstanding the preceding sentence, this section

13 shall apply to qualified fuels which are produced from tar

14 sands from wells drilled, and mines and quarries first

15 opened, after May 26, 1994, and before January 1, 1997,

16 and which are sold before January 1, 2006.’’

17 SEC. 2. REPEAL OF INTANGIBLE DRILLING COST PREF18 ERENCE.

19 (a) ALTERNATIVE MINIMUM TAX.—Sections

20 56(g)(4)(D)(i), 57(a)(2), and 57(b) of the Internal Reve21 nue Code of 1986 are hereby repealed.

22 (b) CORPORATE PREFERENCE ITEMS.—

23 (1) IN GENERAL.—Paragraph (1) of section

24 291(b) of such Code is amended to read as follows:
3

•HR 4532 IH

1 ‘‘(1) IN GENERAL.—The amount allowable as a

2 deduction for any taxable year under section 616(a)

3 or 617(a) (determined without regard to this sec4 tion) shall be reduced by 30 percent.’’

5 (2) CONFORMING AMENDMENTS.—

6 (A) Paragraphs (2) and (3) of section

7 291(b) of such Code are each amended by strik8 ing ‘‘263(c), 616(a),’’ and inserting ‘‘616(a)’’.

9 (B) Section 291(b) of such Code is amend10 ed by striking paragraph (4) and by redesignat11 ing paragraph (5) as paragraph (4).

12 (C) Section 59(e)(2) of such Code is

13 amended by striking subparagraph (C) and by

14 redesignating subparagraphs (D) and (E) as

15 subparagraphs (C) and (D).

16 (D) Section 263(c) of such Code is amend17 ed by striking the last sentence.

18 (E) The subsection heading for section

19 291(b) of such Code is amended by striking

20 ‘‘INTANGIBLE DRILLING COSTS AND’’.

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

22 this section shall apply to costs paid or incurred after De23 cember 31, 1993, in taxable years ending after such date.

Æ