II 

113TH CONGRESS 

1ST SESSION S. 1762 

To eliminate certain subsidies for fossil-fuel production. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 21, 2013 

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

to the Committee on Finance 

A BILL 

To eliminate certain subsidies for fossil-fuel production. 

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 ‘‘End Polluter Welfare 

5 Act of 2013’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds that— 

8 (1) President Obama joined other world leaders 

9 from the Group of Twenty in pledging to phase out 

10 wasteful fossil-fuel subsidies; 

11 (2) the Environmental Law Institute found that 

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1 sidies in the United States totaled over 

2 $72,000,000,000, while Federal renewable-energy in3 vestments totaled $12,200,000,000; 

4 (3) according to Taxpayers for Common Sense, 

5 the 5 largest oil corporations have made more than 

6 $1,000,000,000,000 in profits during the past dec7 ade; 

8 (4) according to the Center for American 

9 Progress, the 5 largest oil corporations posted more 

10 than $70,000,000,000 in profits in just the first 3 

11 quarters of 2013; 

12 (5) according to the Center for Responsive Poli13 tics, the entire oil and gas industry spent 

14 $105,000,000 on lobbying in the first 3 quarters of 

15 2013, which was an effective investment in pro16 tecting their extraordinary tax loopholes and sub17 sidies; and 

18 (6) taxpayers in the United States should not 

19 be subsidizing fossil fuel companies in a period of 

20 record debt. 

21 SEC. 3. DEFINITION OF FOSSIL FUEL. 

22 In this Act, the term ‘‘fossil fuel’’ means coal, petro23 leum, natural gas, or any derivative of coal, petroleum, 

24 or natural gas that is used for fuel. 


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1 SEC. 4. ROYALTY RELIEF. 

2 (a) IN GENERAL.— 

3 (1) OUTER CONTINENTAL SHELF LANDS ACT.— 

4 Section 8(a)(3) of the Outer Continental Shelf 

5 Lands Act (43 U.S.C. 1337(a)(3)) is amended— 

6 (A) by striking subparagraph (B); and 

7 (B) by redesignating subparagraph (C) as 

8 subparagraph (B). 

9 (2) ENERGY POLICY ACT OF 2005.— 

10 (A) INCENTIVES FOR NATURAL GAS PRO11 DUCTION FROM DEEP WELLS IN THE SHALLOW

12 WATERS OF THE GULF OF MEXICO.—Section 

13 344 of the Energy Policy Act of 2005 (42 

14 U.S.C. 15904) is repealed. 

15 (B) DEEP WATER PRODUCTION.—Section 

16 345 of the Energy Policy Act of 2005 (42 

17 U.S.C. 15905) is repealed. 

18 (b) FUTURE PROVISIONS.—Notwithstanding any 

19 other provision of law (including regulations), royalty re20 lief shall not be permitted under a lease issued under sec21 tion 8 of the Outer Continental Shelf Lands Act (43 

22 U.S.C. 1337). 

23 SEC. 5. ROYALTIES UNDER MINERAL LEASING ACT. 

24 (a) COAL LEASES.—Section 7(a) of the Mineral 

25 Leasing Act (30 U.S.C. 207(a)) is amended by striking 

‘‘121⁄2’’ and inserting ‘‘183 26 ⁄4’’. 


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1 (b) LEASES ON LAND ON WHICH OIL OR NATURAL

2 GAS IS DISCOVERED.—Section 14 of the Mineral Leasing 

Act (30 U.S.C. 223) is amended by striking ‘‘121 3 ⁄2’’ and 

inserting ‘‘183 4 ⁄4’’. 

5 (c) LEASES ON LAND KNOWN OR BELIEVED TO

6 CONTAIN OIL OR NATURAL GAS.—Section 17 of the Min7 eral Leasing Act (30 U.S.C. 226) is amended— 

8 (1) in subsection (b)— 

9 (A) in paragraph (1)(A), by striking 

‘‘12.5’’ and inserting ‘‘183 10 ⁄4’’; and 

11 (B) in paragraph (2)(A)(ii), by striking 

‘‘121⁄2’’ and inserting ‘‘183 12 ⁄4’’; 

13 (2) in subsection (c)(1), by striking ‘‘12.5’’ and 

inserting ‘‘183 14 ⁄4’’; 

(3) in subsection (l), by striking ‘‘121 15 ⁄2’’ each 

time it appears and inserting ‘‘183 16 ⁄4’’; and 

(4) in subsection (n)(1)(C), by striking ‘‘121 17 ⁄2’’ 

and inserting ‘‘183 18 ⁄4’’. 

19 SEC. 6. ULTRA-DEEPWATER AND UNCONVENTIONAL NAT20 URAL GAS AND OTHER PETROLEUM RE21 SOURCES. 

22 Subtitle J of title IX of the Energy Policy Act of 

23 2005 (42 U.S.C. 16371 et seq.) is repealed. 


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1 SEC. 7. REMOVAL OF LIMITS ON LIABILITY FOR OFFSHORE 

2 FACILITIES AND PIPELINE OPERATORS. 

3 Section 1004(a) of the Oil Pollution Act of 1990 (33 

4 U.S.C. 2704(a)) is amended— 

5 (1) in paragraph (3), by striking ‘‘plus 

6 $75,000,000; and’’ and inserting ‘‘and the liability 

7 of the responsible party under section 1002;’’; 

8 (2) in paragraph (4)— 

9 (A) by inserting ‘‘(except an onshore pipe10 line transporting diluted bitumen, bituminous 

11 mixtures, or any oil manufactured from bitu12 men)’’ after ‘‘for any onshore facility’’; and 

13 (B) by striking the period at the end and 

14 inserting ‘‘; and’’; and 

15 (3) by adding at the end the following: 

16 ‘‘(5) for any onshore facility transporting di17 luted bitumen, bituminous mixtures, or any oil man18 ufactured from bitumen, the liability of the respon19 sible party under section 1002.’’. 

20 SEC. 8. FUNDS TO WORLD BANK FOR FINANCING 

21 PROJECTS THAT SUPPORT FOSSIL FUEL. 

22 (a) RESCISSION OF FUNDS.—Effective on the date 

23 of enactment of this Act, there are rescinded all unobli24 gated balances of the amounts made available to the Inter25 national Bank for Reconstruction and Development and 

26 the International Development Association (commonly 


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1 known as the ‘‘World Bank’’), and each other similar 

2 international financing entity that has received amounts 

3 from the United States, as determined by the Secretary 

4 of the Treasury, to carry out any project that supports 

5 fossil fuel. 

6 (b) FUTURE FUNDS.—Notwithstanding any other 

7 provision of law, any amounts made available to the World 

8 Bank or any other international financing entity shall not 

9 be used to carry out any project that supports fossil fuel. 

10 SEC. 9. OFFICE OF FOSSIL ENERGY RESEARCH AND DEVEL11 OPMENT. 

12 (a) IN GENERAL.—Section 203(a)(2) of the Depart13 ment of Energy Organization Act (42 U.S.C. 7133(a)(2)) 

14 is amended— 

15 (1) in subparagraph (C), by inserting ‘‘and’’ 

16 after the semicolon at the end; 

17 (2) by striking subparagraph (D); and 

18 (3) by redesignating subparagraph (E) as sub19 paragraph (D). 

20 (b) TERMINATION.—Notwithstanding any other pro21 vision of law, the Office of Fossil Energy Research and 

22 Development and the authority to carry out any program 

23 or activity of the Office (as in existence on the day before 

24 the date of enactment of this Act) is terminated. 


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1 SEC. 10. ADVANCED RESEARCH PROJECTS AGENCY—EN2 ERGY. 

3 None of the funds made available to the Advanced 

4 Research Projects Agency—Energy shall be used to carry 

5 out any project that supports fossil fuel. 

6 SEC. 11. INCENTIVES FOR INNOVATIVE TECHNOLOGIES. 

7 (a) IN GENERAL.—Section 1703 of the Energy Policy 

8 Act of 2005 (42 U.S.C. 16513) is amended— 

9 (1) in subsection (b)— 

10 (A) by striking paragraph (2); 

11 (B) by striking paragraph (10); and 

12 (C) by redesignating paragraphs (3) 

13 through (9) as paragraphs (2) through (8) re14 spectively; 

15 (2) by striking subsection (c); and 

16 (3) by redesignating subsections (d) and (e) as 

17 paragraphs (c) and (d) respectively. 

18 (b) CONFORMING AMENDMENT.—Section 1704 of the 

19 Energy Policy Act of 2005 (42 U.S.C. 16514) is amend20 ed— 

21 (1) in subsection (a), by striking ‘‘(a) IN GEN22 ERAL.—’’; and 

23 (2) by striking subsection (b). 

24 SEC. 12. RURAL UTILITY SERVICE LOAN GUARANTEES. 

25 The Secretary of Agriculture shall not make a loan 

26 under title III of the Rural Electrification Act of 1936 


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1 (7 U.S.C. 931 et seq.) to an applicant for the purpose 

2 of carrying out any project that will use fossil fuel. 

3 SEC. 13. FUNDS TO THE OVERSEAS PRIVATE INVESTMENT 

4 CORPORATION OR THE EXPORT-IMPORT 

5 BANK OF THE UNITED STATES FOR FINANC6 ING PROJECTS, TRANSACTIONS, OR OTHER 

7 ACTIVITIES THAT SUPPORT FOSSIL FUEL. 

8 (a) RESCISSION OF FUNDS.—Effective on the date 

9 of enactment of this Act, there are rescinded all unobli10 gated balances of the amounts made available to the Over11 seas Private Investment Corporation or the Export-Import 

12 Bank of the United States to carry out any project, trans13 action, or other activity that supports fossil-fuel produc14 tion. 

15 (b) FUTURE FUNDS.—Notwithstanding any other 

16 provision of law, any amounts made available to the Over17 seas Private Investment Corporation or the Export-Import 

18 Bank of the United States shall not be used to carry out 

19 any project, transaction, or other activity that supports 

20 fossil-fuel production. 

21 SEC. 14. TRANSPORTATION FUNDS FOR GRANTS, LOANS, 

22 LOAN GUARANTEES, AND OTHER DIRECT AS23 SISTANCE. 

24 Notwithstanding any other provision of law, any 

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1 tation (including the Federal Railroad Administration) 

2 shall not be used to award any grant, loan, loan guarantee, 

3 or provide any other direct assistance to any rail or port 

4 project that transports fossil fuel. 

5 SEC. 15. TERMINATION OF VARIOUS TAX EXPENDITURES 

6 RELATING TO FOSSIL FUELS. 

7 (a) IN GENERAL.—Subchapter C of chapter 80 of the 

8 Internal Revenue Code of 1986 is amended by adding at 

9 the end the following new section: 

10 ‘‘SEC. 7875. TERMINATION OF CERTAIN PROVISIONS RELAT11 ING TO FOSSIL FUEL INCENTIVES. 

12 ‘‘(a) IN GENERAL.—The following provisions shall 

13 not apply to taxable years beginning after the date of the 

14 enactment of the End Polluter Welfare Act of 2013: 

15 ‘‘(1) Section 43 (relating to enhanced oil recov16 ery credit). 

17 ‘‘(2) Section 45I (relating to credit for pro18 ducing oil and natural gas from marginal wells). 

19 ‘‘(3) Section 45K (relating to credit for pro20 ducing fuel from a nonconventional source). 

21 ‘‘(4) Section 193 (relating to tertiary 

22 injectants). 

23 ‘‘(5) Section 199(d)(9) (relating to special rule 

24 for taxpayers with oil related qualified production 

25 activities income). 


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1 ‘‘(6) Section 461(i)(2) (relating to special rule 

2 for spudding of oil or natural gas wells). 

3 ‘‘(7) Section 469(c)(3) (relating to working in4 terests in oil and natural gas property). 

5 ‘‘(8) Section 613A (relating to limitations on 

6 percentage depletion in case of oil and natural gas 

7 wells). 

8 ‘‘(9) Section 617 (relating to deduction and re9 capture of certain mining exploration expenditures). 

10 ‘‘(10) Section 7704(d)(1)(E) (relating to quali11 fying income). 

12 ‘‘(b) PROVISIONS RELATING TO PROPERTY.—The 

13 following provisions shall not apply to property placed in 

14 service after the date of the enactment of the End Polluter 

15 Welfare Act of 2013: 

16 ‘‘(1) Subparagraphs (C)(iii) and (E)(viii) of 

17 section 168(e)(3) (relating to classification of certain 

18 property). 

19 ‘‘(2) Section 169 (relating to amortization of 

20 pollution control facilities) with respect to any at21 mospheric pollution control facility. 

22 ‘‘(3) Section 179C (relating to election to ex23 pense certain refineries). 

24 ‘‘(c) PROVISIONS RELATING TO COSTS AND EX25 PENSES.—The following provisions shall not apply to costs 


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1 or expenses paid or incurred after the date of the enact2 ment of the End Polluter Welfare Act of 2013: 

3 ‘‘(1) Section 179B (relating to deduction for 

4 capital costs incurred in complying with Environ5 mental Protection Agency sulfur regulations). 

6 ‘‘(2) Section 263(c) (relating to intangible drill7 ing and development costs) with respect to costs in 

8 the case of oil and natural gas wells. 

9 ‘‘(3) Section 468 (relating to special rules for 

10 mining and solid waste reclamation and closing 

11 costs). 

12 ‘‘(d) 5-YEAR CARRYBACK FOR MARGINAL OIL AND

13 NATURAL GAS WELL PRODUCTION CREDIT.—Section 

14 39(a)(3) (relating to 5-year carryback for marginal oil and 

15 natural gas well production credit) shall not apply to cred16 its determined in taxable years beginning after the date 

17 of the enactment of the End Polluter Welfare Act of 2013. 

18 ‘‘(e) CREDIT FOR CARBON DIOXIDE SEQUESTRA19 TION.—Section 45Q (relating to credit for carbon dioxide 

20 sequestration) shall not apply to carbon dioxide captured 

21 after the date of the enactment of the End Polluter Wel22 fare Act of 2013. 

23 ‘‘(f) ALLOCATED CREDITS.—No new credits shall be 

24 certified under section 48A (relating to qualifying ad25 vanced coal project credit) or section 48B (relating to 


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1 qualifying gasification project credit) after the date of the 

2 enactment of the End Polluter Welfare Act of 2013. 

3 ‘‘(g) ARBITRAGE BONDS.—Section 148(b)(4) (relat4 ing to safe harbor for prepaid natural gas) shall not apply 

5 to obligations issued after the date of the enactment of 

6 the End Polluter Welfare Act of 2013.’’. 

7 (b) CONFORMING AMENDMENT.—The table of sec8 tions for subchapter C of chapter 90 is amended by adding 

9 at the end the following new item: 

‘‘Sec. 7875. Termination of certain provisions.’’. 

10 SEC. 16. TERMINATION OF ALTERNATIVE FUEL VEHICLE 

11 REFUELING PROPERTY CREDIT WITH RE12 SPECT TO FOSSIL FUELS. 

13 (a) IN GENERAL.—Paragraph (2) of section 30C(c) 

14 of the Internal Revenue Code of 1986 is amended— 

15 (1) by striking ‘‘, natural gas, compressed nat16 ural gas, liquefied natural gas, liquefied petroleum 

17 gas,’’ in subparagraph (A), 

18 (2) by striking subparagraph (B), and 

19 (3) by redesignating subparagraph (C) as sub20 paragraph (B). 

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

22 this section shall apply to property placed in service after 

23 the date of enactment of this Act. 


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1 SEC. 17. UNIFORM SEVEN-YEAR AMORTIZATION FOR GEO2 LOGICAL AND GEOPHYSICAL EXPENDITURES. 

3 (a) IN GENERAL.—Section 167(h) of the Internal 

4 Revenue Code of 1986 is amended— 

5 (1) by striking ‘‘24-month period’’ each place it 

6 appears in paragraphs (1) and (4) and inserting ‘‘7- 

7 year period’’, and 

8 (2) by striking paragraph (5). 

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

10 this section shall apply to amounts paid or incurred after 

11 the date of the enactment of this Act. 

12 SEC. 18. NATURAL GAS GATHERING LINES TREATED AS 15- 

13 YEAR PROPERTY. 

14 (a) IN GENERAL.—Subparagraph (E) of section 

15 168(e)(3) of the Internal Revenue Code of 1986 is amend16 ed by striking ‘‘and’’ at the end of clause (viii), by striking 

17 the period at the end of clause (ix) and inserting ‘‘, and’’, 

18 and by adding at the end the following new clause: 

19 ‘‘(x) any natural gas gathering line 

20 the original use of which commences with 

21 the taxpayer after the date of the enact22 ment of this clause.’’. 

23 (b) ALTERNATIVE SYSTEM.—The table contained in 

24 section 168(g)(3)(B) of the Internal Revenue Code of 


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1 1986 is amended by inserting after the item relating to 

2 subparagraph (E)(ix) the following new item: 

‘‘(E)(x) .................................................................................................... 22’’. 

3 (c) CONFORMING AMENDMENT.—Clause (iv) of sec4 tion 168(e)(3)(C) of the Internal Revenue Code of 1986 

5 is amended by inserting ‘‘and on or before the date of the 

6 enactment of the End Polluter Welfare Act of 2013’’ after 

7 ‘‘April 11, 2005’’. 

8 (d) EFFECTIVE DATE.— 

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

10 this section shall apply to property placed in service 

11 on and after the date of the enactment of this Act. 

12 (2) EXCEPTION.—The amendments made by 

13 this section shall not apply to any property with re14 spect to which the taxpayer or a related party has 

15 entered into a binding contract for the construction 

16 thereof on or before the date of the enactment of 

17 this Act, or, in the case of self-constructed property, 

18 has started construction on or before such date. 

19 SEC. 19. REPEAL OF DOMESTIC MANUFACTURING DEDUC20 TION FOR HARD MINERAL MINING. 

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

22 199(c)(4) of the Internal Revenue Code of 1986 is amend23 ed by striking ‘‘or’’ at the end of clause (ii), by striking 

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

25 and by adding at the end the following new clause: 


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1 ‘‘(iv) the mining of any hard min2 eral.’’. 

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

4 this section shall apply to taxable years beginning after 

5 the date of the enactment of this Act. 

6 SEC. 20. LIMITATION ON DEDUCTION FOR INCOME ATTRIB7 UTABLE TO DOMESTIC PRODUCTION OF OIL, 

8 NATURAL GAS, OR PRIMARY PRODUCTS 

9 THEREOF. 

10 (a) DENIAL OF DEDUCTION.—Paragraph (4) of sec11 tion 199(c) of the Internal Revenue Code of 1986 is 

12 amended by adding at the end the following new subpara13 graph: 

14 ‘‘(E) SPECIAL RULE FOR OIL, NATURAL

15 GAS, AND COAL INCOME.—The term ‘domestic 

16 production gross receipts’ shall not include 

17 gross receipts from the production, refining, 

18 processing, transportation, or distribution of oil, 

19 natural gas, or coal, or any primary product 

20 (within the meaning of subsection (d)(9)) there21 of.’’. 

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

23 this section shall apply to taxable years beginning after 

24 the date of the enactment of this Act. 


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1 SEC. 21. TERMINATION OF LAST-IN, FIRST-OUT METHOD OF 

2 INVENTORY FOR OIL, NATURAL GAS, AND 

3 COAL COMPANIES. 

4 (a) IN GENERAL.—Section 472 of the Internal Rev5 enue Code of 1986 is amended by adding at the end the 

6 following new subsection: 

7 ‘‘(h) TERMINATION FOR OIL, NATURAL GAS, AND

8 COAL COMPANIES.—Subsection (a) shall not apply to any 

9 taxpayer that is in the trade or business of the production, 

10 refining, processing, transportation, or distribution of oil, 

11 natural gas, or coal for any taxable year beginning after 

12 the date of enactment of the End Polluter Welfare Act 

13 of 2013.’’. 

14 (b) ADDITIONAL TERMINATION.—Section 473 of the 

15 Internal Revenue Code of 1986 is amended by adding at 

16 the end the following new subsection: 

17 ‘‘(h) TERMINATION FOR OIL, NATURAL GAS, AND

18 COAL COMPANIES.—This section shall not apply to any 

19 taxpayer that is in the trade or business of the production, 

20 refining, processing, transportation, or distribution of oil, 

21 natural gas, or coal for any taxable year beginning after 

22 the date of enactment of the End Polluter Welfare Act 

23 of 2013.’’. 

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

25 this section shall apply to taxable years beginning after 

26 the date of enactment of this Act. 


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1 SEC. 22. REPEAL OF PERCENTAGE DEPLETION FOR COAL 

2 AND HARD MINERAL FOSSIL FUELS. 

3 (a) IN GENERAL.—Section 613 of the Internal Rev4 enue Code of 1986 is amended by adding at the end the 

5 following new subsection: 

6 ‘‘(f) TERMINATION WITH RESPECT TO COAL AND

7 HARD MINERAL FOSSIL FUELS.—In the case of coal, lig8 nite, and oil shale (other than oil shale described in sub9 section (b)(5)), the allowance for depletion shall be com10 puted without reference to this section for any taxable 

11 year beginning after the date of the enactment of the End 

12 Polluter Welfare Act of 2013.’’. 

13 (b) CONFORMING AMENDMENTS.— 

14 (1) COAL AND LIGNITE.—Section 613(b)(4) of 

15 the Internal Revenue Code of 1986 is amended by 

16 striking ‘‘coal, lignite,’’. 

17 (2) OIL SHALE.—Section 613(b)(2) of such 

18 Code is amended to read as follows: 

19 ‘‘(2) 15 PERCENT.—If, from deposits in the 

20 United States, gold, silver, copper, and iron ore.’’. 

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. 23. TERMINATION OF CAPITAL GAINS TREATMENT 

2 FOR ROYALTIES FROM COAL. 

3 (a) IN GENERAL.—Subsection (c) of section 631 of 

4 the Internal Revenue Code of 1986 is amended— 

5 (1) by striking ‘‘coal (including lignite), or iron 

6 ore’’ and inserting ‘‘iron ore’’, 

7 (2) by striking ‘‘coal or iron ore’’ each place it 

8 appears and inserting ‘‘iron ore’’, 

9 (3) by striking ‘‘iron ore or coal’’ each place it 

10 appears and inserting ‘‘iron ore’’, and 

11 (4) by striking ‘‘COAL OR’’ in the heading. 

12 (b) CONFORMING AMENDMENT.—The heading of sec13 tion 631 of the Internal Revenue Code of 1986 is amended 

14 by striking ‘‘, COAL,’’. 

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

16 this section shall apply to dispositions after the date of 

17 the enactment of this Act. 

18 SEC. 24. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 

19 APPLICABLE TO OIL, NATURAL GAS, AND 

20 COAL COMPANIES WHICH ARE DUAL CAPAC21 ITY TAXPAYERS. 

22 (a) IN GENERAL.—Section 901 of the Internal Rev23 enue Code of 1986 is amended by redesignating subsection 

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

25 the following new subsection: 


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1 ‘‘(n) SPECIAL RULES RELATING TO OIL, NATURAL

2 GAS, AND COAL 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 to a foreign country or possession of the 

7 United States for any period by a dual capacity tax8 payer which is in the trade or business of the pro9 duction, refining, processing, transportation, or dis10 tribution of oil, natural gas, or coal shall not be con11 sidered a tax— 

12 ‘‘(A) if, for such period, the foreign coun13 try or possession does not impose a generally 

14 applicable income tax, or 

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

16 the amount (determined in accordance with reg17 ulations) which— 

18 ‘‘(i) is paid by such dual capacity tax19 payer pursuant to the generally applicable 

20 income tax imposed by the country or pos21 session, or 

22 ‘‘(ii) would be paid if the generally ap23 plicable income tax imposed by the country 

24 or possession were applicable to such dual 

25 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. 25. INCREASE IN OIL SPILL LIABILITY TRUST FUND FI19 NANCING RATE. 

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

21 4611(c)(2) of the Internal Revenue Code of 1986 is 

22 amended to read as follows: 

23 ‘‘(B) the Oil Spill Liability Trust Fund fi24 nancing rate is— 


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1 ‘‘(i) in the case of crude oil received 

2 or petroleum products entered before Jan3 uary 1, 2013, 8 cents a barrel, 

4 ‘‘(ii) in the case of crude oil received 

5 or petroleum products entered after De6 cember 31, 2013, and before January 1, 

7 2017, 9 cents a barrel, and 

8 ‘‘(iii) in the case of crude oil received 

9 or petroleum products entered after De10 cember 31, 2016, 10 cents a barrel.’’. 

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

12 this section shall apply to crude oil received and petroleum 

13 products entered after the date of the enactment of this 

14 Act. 

15 SEC. 26. APPLICATION OF CERTAIN ENVIRONMENTAL 

16 TAXES TO SYNTHETIC CRUDE OIL. 

17 (a) IN GENERAL.—Paragraph (1) of section 4612(a) 

18 of the Internal Revenue Code of 1986 is amended to read 

19 as follows: 

20 ‘‘(1) CRUDE OIL.— 

21 ‘‘(A) IN GENERAL.—The term ‘crude oil’ 

22 includes crude oil condensates, natural gasoline, 

23 and synthetic crude oil. 

24 ‘‘(B) SYNTHETIC CRUDE OIL.—For pur25 poses of subparagraph (A), the term ‘synthetic 


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1 crude oil’ means any bitumen and bituminous 

2 mixtures, any oil manufactured from bitumen 

3 and bituminous mixtures, and any liquid fuel 

4 manufactured from coal.’’. 

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

6 this section shall apply to oil and petroleum products re7 ceived or entered during calendar quarters beginning more 

8 than 60 days after the date of the enactment of this Act. 

9 SEC. 27. DENIAL OF DEDUCTION FOR REMOVAL COSTS AND 

10 DAMAGES FOR CERTAIN OIL SPILLS. 

11 (a) IN GENERAL.—Part IX of subchapter B of chap12 ter 1 of the Internal Revenue Code of 1986 is amended 

13 by adding at the end the following new section: 

14 ‘‘SEC. 280I. EXPENSES FOR REMOVAL COSTS AND DAMAGES 

15 RELATING TO CERTAIN OIL SPILL LIABILITY. 

16 ‘‘No deduction shall be allowed under this chapter for 

17 any amount paid or incurred with respect to any costs or 

18 damages for which the taxpayer is liable under section 

19 1002 of the Oil Pollution Act of 1990 (33 U.S.C. 2702).’’. 

20 (b) CLERICAL AMENDMENT.—The table of sections 

21 for part IX of subchapter B of chapter 1 of such Code 

22 is amended by adding at the end the following new item: 

‘‘Sec. 280I. Expenses for removal costs and damages relating to certain oil spill 

liability.’’. 

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

24 this section shall apply with respect to any liability arising 


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1 in taxable years ending after the date of the enactment 

2 of this Act. 

3 SEC. 28. TAX ON CRUDE OIL AND NATURAL GAS PRODUCED 

4 FROM THE OUTER CONTINENTAL SHELF IN 

5 THE GULF OF MEXICO. 

6 (a) IN GENERAL.—Subtitle E of the Internal Rev7 enue Code of 1986 is amended by adding at the end the 

8 following new chapter: 

9 ‘‘CHAPTER 56—TAX ON SEVERANCE OF 

10 CRUDE OIL AND NATURAL GAS FROM 

11 THE OUTER CONTINENTAL SHELF IN 

12 THE GULF OF MEXICO 

‘‘Sec. 5901. Imposition of tax. 

‘‘Sec. 5902. Taxable crude oil or natural gas and removal price. 

‘‘Sec. 5903. Special rules and definitions. 

13 ‘‘SEC. 5901. IMPOSITION OF TAX. 

14 ‘‘(a) IN GENERAL.—In addition to any other tax im15 posed under this title, there is hereby imposed a tax equal 

16 to 13 percent of the removal price of any taxable crude 

17 oil or natural gas removed from the premises during any 

18 taxable period. 

19 ‘‘(b) CREDIT FOR FEDERAL ROYALTIES PAID.— 

20 ‘‘(1) IN GENERAL.—There shall be allowed as a 

21 credit against the tax imposed by subsection (a) with 

22 respect to the production of any taxable crude oil or 

23 natural gas an amount equal to the aggregate 


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1 amount of royalties paid under Federal law with re2 spect to such production. 

3 ‘‘(2) LIMITATION.—The aggregate amount of 

4 credits allowed under paragraph (1) to any taxpayer 

5 for any taxable period shall not exceed the amount 

6 of tax imposed by subsection (a) for such taxable pe7 riod. 

8 ‘‘(c) TAX PAID BY PRODUCER.—The tax imposed by 

9 this section shall be paid by the producer of the taxable 

10 crude oil or natural gas. 

11 ‘‘SEC. 5902. TAXABLE CRUDE OIL OR NATURAL GAS AND RE12 MOVAL PRICE. 

13 ‘‘(a) TAXABLE CRUDE OIL OR NATURAL GAS.—For 

14 purposes of this chapter, the term ‘taxable crude oil or 

15 natural gas’ means crude oil or natural gas which is pro16 duced from Federal submerged lands on the outer Conti17 nental Shelf in the Gulf of Mexico pursuant to a lease 

18 entered into with the United States which authorizes the 

19 production. 

20 ‘‘(b) REMOVAL PRICE.—For purposes of this chap21 ter— 

22 ‘‘(1) IN GENERAL.—Except as otherwise pro23 vided in this subsection, the term ‘removal price’ 

24 means— 


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1 ‘‘(A) in the case of taxable crude oil, the 

2 amount for which a barrel of such crude oil is 

3 sold, and 

4 ‘‘(B) in the case of taxable natural gas, the 

5 amount per 1,000 cubic feet for which such 

6 natural gas is sold. 

7 ‘‘(2) SALES BETWEEN RELATED PERSONS.—In 

8 the case of a sale between related persons, the re9 moval price shall not be less than the constructive 

10 sales price for purposes of determining gross income 

11 from the property under section 613. 

12 ‘‘(3) OIL OR NATURAL GAS REMOVED FROM

13 PROPERTY BEFORE SALE.—If crude oil or natural 

14 gas is removed from the property before it is sold, 

15 the removal price shall be the constructive sales 

16 price for purposes of determining gross income from 

17 the property under section 613. 

18 ‘‘(4) REFINING BEGUN ON PROPERTY.—If the 

19 manufacture or conversion of crude oil into refined 

20 products begins before such oil is removed from the 

21 property— 

22 ‘‘(A) such oil shall be treated as removed 

23 on the day such manufacture or conversion be24 gins, and 


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1 ‘‘(B) the removal price shall be the con2 structive sales price for purposes of determining 

3 gross income from the property under section 

4 613. 

5 ‘‘(5) PROPERTY.—The term ‘property’ has the 

6 meaning given such term by section 614. 

7 ‘‘SEC. 5903. SPECIAL RULES AND DEFINITIONS. 

8 ‘‘(a) ADMINISTRATIVE REQUIREMENTS.— 

9 ‘‘(1) WITHHOLDING AND DEPOSIT OF TAX.— 

10 The Secretary shall provide for the withholding and 

11 deposit of the tax imposed under section 5901 on a 

12 quarterly basis. 

13 ‘‘(2) RECORDS AND INFORMATION.—Each tax14 payer liable for tax under section 5901 shall keep 

15 such records, make such returns, and furnish such 

16 information (to the Secretary and to other persons 

17 having an interest in the taxable crude oil or natural 

18 gas) with respect to such oil as the Secretary may 

19 by regulations prescribe. 

20 ‘‘(3) TAXABLE PERIODS; RETURN OF TAX.— 

21 ‘‘(A) TAXABLE PERIOD.—Except as pro22 vided by the Secretary, each calendar year shall 

23 constitute a taxable period. 


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1 ‘‘(B) RETURNS.—The Secretary shall pro2 vide for the filing, and the time for filing, of the 

3 return of the tax imposed under section 5901. 

4 ‘‘(b) DEFINITIONS.—For purposes of this chapter— 

5 ‘‘(1) PRODUCER.—The term ‘producer’ means 

6 the holder of the economic interest with respect to 

7 the crude oil or natural gas. 

8 ‘‘(2) CRUDE OIL.—The term ‘crude oil’ includes 

9 crude oil condensates and natural gasoline. 

10 ‘‘(3) PREMISES AND CRUDE OIL PRODUCT.— 

11 The terms ‘premises’ and ‘crude oil product’ have 

12 the same meanings as when used for purposes of de13 termining gross income from the property under sec14 tion 613. 

15 ‘‘(c) ADJUSTMENT OF REMOVAL PRICE.—In deter16 mining the removal price of oil or natural gas from a prop17 erty in the case of any transaction, the Secretary may ad18 just the removal price to reflect clearly the fair market 

19 value of oil or natural gas removed. 

20 ‘‘(d) REGULATIONS.—The Secretary shall prescribe 

21 such regulations as may be necessary or appropriate to 

22 carry out the purposes of this chapter.’’. 

23 (b) DEDUCTIBILITY OF TAX.—The first sentence of 

24 section 164(a) is amended by inserting after paragraph 

25 (6) the following new paragraph: 


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1 ‘‘(7) The tax imposed by section 5901(a) (after 

2 application of section 5901(b)) on the severance of 

3 crude oil or natural gas from the outer Continental 

4 Shelf in the Gulf of Mexico.’’. 

5 (c) CLERICAL AMENDMENT.—The table of chapters 

6 for subtitle E is amended by adding at the end the fol7 lowing new item: 

‘‘CHAPTER 56. Tax on severance of crude oil and natural gas 

from the outer Continental Shelf in the Gulf of 

Mexico.’’. 

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

9 this section shall apply to crude oil or natural gas removed 

10 after December 31, 2013. 

11 SEC. 29. POWDER RIVER BASIN. 

12 (a) DESIGNATION OF THE POWDER RIVER BASIN AS

13 A COAL PRODUCING REGION.—The Director of the Bu14 reau of Land Management shall designate the Powder 

15 River Basin as a coal producing region. 

16 (b) REPORT.—Not later than 1 year after the date 

17 of enactment of this Act, the Director of the Bureau of 

18 Land Management shall submit to Congress a report that 

19 includes— 

20 (1) a study of the fair market value and the 

21 amount of royalties paid on coal leases in the Pow22 der River Basin compared to other national and 

23 international coal markets; and 


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1 (2) any policy recommendations to capture the 

2 future market value of the coal leases in the Powder 

3 River Basin. 

4 SEC. 30. REPORTS. 

5 (a) DEFINITION OF FOSSIL-FUEL-PRODUCTION SUB6 SIDY.—In this section, the term ‘‘subsidy for fossil-fuel 

7 production’’ means any direct funding, tax treatment or 

8 incentive, risk-reduction benefit, financing assistance or 

9 guarantee, royalty relief, or other provision that provides 

10 a financial benefit to a fossil fuel company for the produc11 tion of fossil fuels. 

12 (b) REPORT TO CONGRESS.—Not later than 1 year 

13 after the date of enactment of this Act, the Secretary of 

14 the Treasury, in coordination with the Secretary of En15 ergy, shall submit to Congress a report detailing each Fed16 eral law (including regulations), other than those amended 

17 by this Act, as in effect on the date on which the report 

18 is submitted, that includes a subsidy for fossil-fuel produc19 tion. 

20 (c) REPORT ON MODIFIED RECOVERY PERIOD.— 

21 (1) IN GENERAL.—Not later than 1 year after 

22 the date of enactment of this Act, the Secretary, in 

23 coordination with the Commissioner of Internal Rev24 enue, shall submit to Congress a report on the appli25 cable recovery period under the accelerated cost reVerDate Mar 15 2010 02:59 Nov 23, 2013 Jkt 039200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\S1762.IS S1762

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1 covery system provided in section 168 of the Inter2 nal Revenue Code of 1986 for each type of property 

3 involved in fossil-fuel production, including pipelines, 

4 power generation property, refineries, and drilling 

5 equipment, to determine if any assets are receiving 

6 a subsidy for fossil-fuel production. 

7 (2) ELIMINATION OF SUBSIDY.—In the case of 

8 any type of property that the Commissioner of Inter9 nal Revenue determines is receiving a subsidy for 

10 fossil-fuel production under such section 168, for 

11 property placed in service in taxable years beginning 

12 after the date of such determination, such section 

13 168 shall not apply. The preceding sentence shall 

14 not apply to any property with respect to a taxable 

15 year unless such determination is published before 

16 the first day of such taxable year. 

Æ 


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