I

104TH CONGRESS

1ST SESSION H. R. 2315

To amend the Internal Revenue Code of 1986 to repeal certain tax subsidies

related to energy and natural resources.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 12, 1995

Mr. STARK 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 subsidies related to energy and natural resources.

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 ‘‘Termination of Energy

5 and Natural Resource Tax Subsidies Act of 1995’’.
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1 SEC. 2. REPEAL OF EXPENSING OF INTANGIBLE DRILLING

2 AND DEVELOPMENT COSTS AND OF MINING

3 EXPLORATION AND DEVELOPMENT COSTS.

4 (a) INTANGIBLE DRILLING AND DEVELOPMENT

5 COSTS.—Section 263(c) of the Internal Revenue Code of

6 1986 is hereby repealed.

7 (b) DEVELOPMENT EXPENDITURES.—Section 616 of

8 the Internal Revenue Code of 1986 (relating to develop9 ment expenditures) is hereby repealed.

10 (c) EXPLORATION EXPENDITURES.—Subsection (i)

11 of section 617 of such Code is amended to read as follows:

12 ‘‘(i) TERMINATION.—No deduction shall be allowed

13 under this section for any expenditure paid or incurred

14 in a taxable year beginning after the date of the enactment

15 of this subsection.’’

16 (d) CONFORMING AMENDMENTS.—

17 (1) Paragraph (2) of section 56(a) of such Code

18 is hereby repealed.

19 (2) Subsection (a) of section 57 of such Code

20 is amended by striking paragraph (2).

21 (3) Paragraph (2) of section 59(e) of such Code

22 is amended by adding ‘‘and’’ at the end of subpara23 graph (A), by striking the period at the end of sub24 paragraph (B) and inserting a period, and by strik25 ing subparagraphs (C), (D), and (E).
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1 (4) Subparagraph (A) of section 59(e)(5) of

2 such Code is amended by inserting before the period

3 ‘‘, as in effect before the Termination of Energy and

4 Natural Resource Tax Subsidies Act of 1995’’.

5 (5) Subsection (c) of section 193 of such Code

6 is amended to read as follows:

7 ‘‘(c) APPLICATION WITH OTHER DEDUCTIONS.—No

8 deduction shall be allowed under subsection (a) with re9 spect to any expenditure with respect to which a deduction

10 is allowed or allowable to the taxpayer under any other

11 provision of this chapter.’’

12 (6) Paragraph (1) of section 263(a) of such

13 Code is amended by striking subparagraph (A) and

14 by redesignating the succeeding subparagraphs ac15 cordingly.

16 (7) Section 263 of such Code is amended by

17 striking subsection (i).

18 (8) Subsection (c) of section 263A of such Code

19 is amended by striking paragraph (3) and by redes20 ignating the succeeding paragraphs accordingly.

21 (9) Paragraph (5) of section 263A(c) of such

22 Code, as redesignated by paragraph (8), is amended

23 by striking ‘‘subparagraphs (B), (C), (D), and (E)’’

24 and inserting ‘‘subparagraph (B)’’.
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1 (10) Section 291 of such Code is amended by

2 striking subsection (b).

3 (11) Subsection (n) of section 312 of such Code

4 is amended by striking paragraph (2).

5 (12) Clause (i) of section 1254(a)(1)(A) of such

6 Code is amended—

7 (A) by inserting ‘‘(as in effect before the

8 Termination of Energy and Natural Resource

9 Tax Subsidies Act of 1995)’’ after ‘‘617’’, and

10 (B) by adding at the end the following:

11 ‘‘For purposes of clause (i), any deduction

12 under section 291(b)(2) (as in effect before the

13 Termination of Energy and Natural Resource

14 Tax Subsidies Act of 1995) shall be treated as

15 a deduction allowable under section 263, 616,

16 or 617 (whichever is appropriate).’’

17 (e) EFFECTIVE DATE.—The amendments made by

18 this section shall apply to amounts paid or incurred in tax19 able years beginning after the date of the enactment of

20 this Act.

21 SEC. 3. REPEAL OF PERCENTAGE DEPLETION.

22 (a) IN GENERAL.—Section 613 of the Internal Reve23 nue Code of 1986 (relating to limitations on percentage

24 depletion in case of oil and gas wells) is amended by add25 ing at the end the following new subsection:
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1 ‘‘(f) TERMINATION.—The allowance under section

2 611 shall be determined without regard to this section for

3 taxable years beginning after the date of the enactment

4 of this subsection.’’

5 (b) TERMINATION OF SECTION 613A.—Section 613A

6 of such Code is amended by adding at the end the follow7 ing new subsection:

8 ‘‘(f) TERMINATION.—The allowance under section

9 611 shall be determined without regard to this section for

10 taxable years beginning after the date of the enactment

11 of this subsection.’’

12 SEC. 4. REPEAL OF EXCEPTION FROM PASSIVE LOSS RULES

13 FOR WORKING INTERESTS IN OIL AND GAS

14 PROPERTY.

15 (a) IN GENERAL.—Section 469(c)(3) of the Internal

16 Revenue Code of 1986 is hereby repealed.

17 (b) CONFORMING AMENDMENT.—Paragraph (4) of

18 section 469(c) of such Code is amended by striking ‘‘para19 graphs (2) and (3)’’ each place it appears and inserting

20 ‘‘paragraph (2)’’.

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

22 this section shall apply to taxable years beginning after

23 the date of the enactment of this Act.
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1 SEC. 5. TERMINATION OF CREDIT FOR PRODUCING FUEL

2 FROM NONCONVENTIONAL SOURCE.

3 Section 29 of the Internal Revenue Code of 1986 is

4 amended by adding at the end the following new sub5 section:

6 ‘‘(h) TERMINATION.—Notwithstanding any other

7 provision of this section, no credit shall be allowed under

8 this section with respect to any qualified fuels produced

9 by a facility placed in service after the date of the enact10 ment of this subsection.’’

11 SEC. 6. REPEAL OF TAX BENEFITS FOR ALCOHOL FUELS.

12 (a) REPEAL OF ALCOHOL FUELS CREDIT.—

13 (1) IN GENERAL.—Section 40 of the Internal

14 Revenue Code of 1986 (relating to alcohol used as

15 fuel) is hereby repealed.

16 (2) CONFORMING AMENDMENTS.—

17 (A) Subsection (b) of section 38 of such

18 Code is amended by striking paragraph (3) and

19 by redesignating the following paragraphs ac20 cordingly.

21 (B) Section 87 of such Code is hereby re22 pealed.

23 (C) Subsection (c) of section 196 of such

24 Code is amended by striking paragraph (3) and

25 by redesignating the following paragraphs ac26 cordingly.
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1 (D) Subsection (n) of section 6501 of such

2 Code is amended by striking ‘‘40(f)’’.

3 (E) The table of sections for subpart D of

4 part IV of subchapter A of chapter 1 of such

5 Code is amended by striking the item relating

6 to section 40.

7 (F) The table of sections for part II of

8 subchapter B of chapter 1 of such Code is

9 amended by striking the item relating to section

10 87.

11 (3) EFFECTIVE DATE.—The amendments made

12 by this subsection shall apply to taxable years begin13 ning after the date of the enactment of this Act.

14 (b) REPEAL OF REDUCED FUEL TAX RATES.—

15 (1) GASOLINE AND DIESEL FUEL.—Section

16 4081 of such Code is amended by striking sub17 section (c) and by redesignating subsections (d) and

18 (e) as subsections (c) and (d), respectively.

19 (2) AVIATION FUEL.—Section 4091 of such

20 Code is amended by striking subsection (c).

21 (3) SPECIAL MOTOR FUELS.—

22 (A) Section 4041 of such Code is amended

23 by striking subsections (k) and (m).

24 (B) Subsection (b) of section 4041 of such

25 Code is amended by striking paragraph (2).
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1 (4) CONFORMING AMENDMENTS.—

2 (A) Section 6427 of such Code is amended

3 by striking subsection (f).

4 (B) Subsection (i) of section 6427 of such

5 Code is amended by striking paragraph (3) and

6 by redesignating paragraphs (4) and (5) as

7 paragraphs (3) and (4), respectively.

8 (C) Paragraph (4) of section 6427(i) of

9 such Code, as redesignated by subparagraph

10 (B), is amended by striking the last sentence of

11 subparagraph (A) and inserting the following

12 new flush sentence:

13 ‘‘Notwithstanding subsection (l)(1), if the Sec14 retary has not paid pursuant to a claim filed

15 under the preceding sentence within 20 days of

16 the date of the filing of such claim, the claim

17 shall be paid with interest from such date de18 termined by using the overpayment rate and

19 method under section 6621.’’

20 (D) Section 9502 of such Code is amended

21 by striking subsection (e).

22 (E) Subsection (f) of section 9502 of such

23 Code is amended by striking paragraph (2) and

24 by redesignating paragraph (3) as paragraph

25 (2).
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1 (F) Subsection (b) of section 9503 of such

2 Code is amended by striking paragraph (5).

3 (G) Subsection (f) of section 9503 of such

4 Code is amended by striking paragraph (3) and

5 by redesignating paragraph (4) as paragraph

6 (3).

7 (5) EFFECTIVE DATE.—The amendments made

8 by this subsection shall take effect on the date of the

9 enactment of this Act.

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