II

107TH CONGRESS

1ST SESSION S. 1106

To provide a tax credit for the production of oil or gas from deposits

held in trust for, or held with restrictions against alienation by, Indian

tribes and Indian individuals.

IN THE SENATE OF THE UNITED STATES

JUNE 26, 2001

Mr. DOMENICI introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

To provide a tax credit for the production of oil or gas

from deposits held in trust for, or held with restrictions

against alienation by, Indian tribes and Indian individuals.

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

3 SECTION 1. CREDIT FOR PRODUCING INDIAN OIL OR GAS.

4 (a) IN GENERAL.—Subpart B of part IV of sub5 chapter A of chapter 1 of the Internal Revenue Code of

6 1986 is amended by inserting after section 29 the fol7 lowing new section:
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1 ‘‘SEC. 29A. CREDIT FOR PRODUCING INDIAN OIL OR GAS.

2 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al3 lowed as a credit against the tax imposed by this chapter

4 for the taxable year an amount equal to—

5 ‘‘(1) $6.12, multiplied by

6 ‘‘(2) the barrel-of-oil equivalent of Indian oil or

7 gas—

8 ‘‘(A) sold by the taxpayer to an unrelated

9 person during the taxable year, and

10 ‘‘(B) the production of which is attrib11 utable to the taxpayer.

12 ‘‘(b) LIMITATIONS AND ADJUSTMENTS.—

13 ‘‘(1) PHASEOUT OF CREDIT.—The amount of

14 the credit allowable under subsection (a) shall be re15 duced by an amount which bears the same ratio to

16 the amount of the credit (determined without regard

17 to this paragraph) as—

18 ‘‘(A) the amount by which the reference

19 price for the calendar year in which the sale oc20 curs exceeds $47.90, bears to

21 ‘‘(B) $12.23.

22 ‘‘(2) CREDIT AND PHASEOUT ADJUSTMENT

23 BASED ON INFLATION.—The $6.12 amount in sub24 section (a) and the $47.90 and $12.23 amounts in

25 paragraph (1) shall each be adjusted by multiplying
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1 such amount by the inflation adjustment factor for

2 the calendar year in which the sale occurs.

3 ‘‘(3) LIMITATION BASED ON AMOUNT OF

4 TAX.—The credit allowed by subsection (a) for any

5 taxable year shall not exceed the sum of the regular

6 tax and the tax imposed by section 55 for such tax7 able year, reduced by the sum of the credits allow8 able under subpart A and sections 27 and 29.

9 ‘‘(4) CARRYBACK AND CARRYOVER OF EXCESS

10 CREDITS.—

11 ‘‘(A) IN GENERAL.—If the sum of the

12 credit allowed by this section for a taxable year

13 plus the amount of the carryforwards to the

14 taxable year under this paragraph exceeds the

15 limitation imposed by paragraph (3) for such

16 taxable year (in this paragraph referred to as

17 the ‘excess credit year’), such excess shall be—

18 ‘‘(i) a carryback to each of the 3 tax19 able years preceding the excess credit year,

20 and

21 ‘‘(ii) a carryforward to each of the 20

22 taxable years following the excess credit

23 year,
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1 and, subject to the limitation imposed by para2 graph (3), shall be taken into account under

3 subsection (a).

4 ‘‘(B) AMOUNT CARRIED TO EACH YEAR.—

5 ‘‘(i) ENTIRE AMOUNT CARRIED TO

6 FIRST YEAR.—The entire amount of the

7 excess credit for an excess credit year shall

8 be carried first to the earliest of the 23

9 taxable years to which (by reason of this

10 paragraph) such credit may be carried.

11 ‘‘(ii) AMOUNT CARRIED TO OTHER 22

12 YEARS.—The amount of the excess credit

13 for the excess credit year shall be carried

14 to each of the other 22 years to the extent

15 that such excess credit may not be taken

16 into account under subsection (a) for a

17 prior taxable year because of the limitation

18 imposed by paragraph (3) of this sub19 section.

20 ‘‘(c) DEFINITION OF INDIAN OIL OR GAS.—For pur21 poses of this section, the term ‘Indian oil or gas’ means

22 oil or gas that is produced—

23 ‘‘(1) from oil or gas deposits that are either

24 held by the United States in trust for the benefit of

25 any Indian tribe or individual Indian or held by any
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1 Indian tribe or individual Indian subject to a restric2 tion imposed by the United States against alien3 ation, and

4 ‘‘(2) pursuant to a lease or other agreement

5 issued or approved by the United States.

6 ‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.—

7 For purposes of this section—

8 ‘‘(1) INDIAN TRIBE.—The term ‘Indian tribe’

9 means any Indian tribe, band, nation, pueblo, com10 munity, rancheria, colony, or other group that owns

11 land or interests in land the title to which is held

12 in trust by the United States or is subject to a re13 striction against alienation imposed by the United

14 States, including—

15 ‘‘(A) any Native village (as defined in sec16 tion 3(c) of the Alaska Native Claims Settle17 ment Act (43 U.S.C. 1602(c), whether orga18 nized traditionally or pursuant to the Act of

19 June 18, 1934 (commonly known as the Indian

20 Reorganization Act (25 U.S.C. 461 et seq.)),

21 and

22 ‘‘(B) any Regional Corporation or Village

23 Corporation (as defined in sections 3(g) and

24 3(j) of the Alaska Native Claims Settlement Act

25 (43 U.S.C. 1602(g) and 1602(j)), respectively),
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1 that is recognized as eligible for the special pro2 grams and services provided by the United States

3 under Federal law to Indians because of their status

4 as Indians.

5 ‘‘(2) INDIVIDUAL INDIAN.—The term ‘indi6 vidual Indian’ means any individual member of an

7 Indian tribe or Alaska Native who owns land or in8 terests in land the title to which is held in trust by

9 the United States or is subject to a restriction

10 against alienation imposed by the United States.

11 ‘‘(3) COMPUTATION OF INFLATION ADJUST12 MENT FACTOR AND REFERENCE PRICE.—The infla13 tion adjustment factor and the reference price for

14 any calendar year shall be determined as provided in

15 section 29(d)(2), except such section shall be applied

16 by substituting ‘calendar year 2001’ for ‘calendar

17 year 1979’ in subparagraph (B) thereof.

18 ‘‘(4) OTHER DEFINITIONS.—The terms ‘barrel19 of-oil equivalent’ and ‘barrel’ have the meanings

20 given such terms by paragraphs (5) and (6) of sec21 tion 29(d), respectively.

22 ‘‘(5) CERTAIN RULES MADE APPLICABLE.—For

23 purposes of this section, paragraphs (3), (7), and (8)

24 of section 29(d) shall apply.
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1 ‘‘(e) APPLICATION OF SECTION.—This section shall

2 apply with respect to Indian oil or gas which is produced

3 after December 31, 2001, except that this section shall

4 not apply with respect to any Indian oil or gas for which

5 a credit is allowed under section 29 for the taxable year.’’.

6 (b) ALTERNATIVE MINIMUM TAX CONFORMING

7 AMENDMENTS.—

8 (1) ALTERNATIVE MINIMUM TAX.—Section

9 59(b) of the Internal Revenue Code of 1986 is

10 amended—

11 (A) by adding at the end the following new

12 sentence: ‘‘In the case of any taxpayer for

13 whom the Indian oil or gas credit is allowable

14 under section 29A for the taxable year, alter15 native minimum taxable income shall not in16 clude any income derived from production for

17 which a credit is allowed under section 29A.’’,

18 and

19 (B) by inserting ‘‘29A,’’ before ‘‘30A’’ in

20 the heading thereof.

21 (2) REGULAR TAX.—Section 55(c)(1) of such

22 Code is amended by inserting ‘‘the Indian oil or gas

23 credit allowable under section 29A,’’ after ‘‘under

24 section 27(b),’’.
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1 (c) CLERICAL AMENDMENT.—The table of sections

2 for subpart B of part IV of subchapter A of chapter 1

3 of the Internal Revenue Code of 1986 is amended by in4 serting after the item relating to section 29 the following

5 new item:

‘‘Sec. 29A. Credit for producing Indian oil or gas.’’.

6 (d) EFFECTIVE DATE.—The amendments made by

7 this section shall apply to taxable years ending after De8 cember 31, 2001, and to carrybacks from such years.

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