I 

112TH CONGRESS 

2D SESSION H. R. 5187 

To amend the Internal Revenue Code of 1986 to provide incentives for 

clean energy and to repeal fossil fuel subsidies for big oil companies. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 27, 2012 

Mr. MARKEY (for himself, Mr. WAXMAN, Mr. BLUMENAUER, Mr. LARSON of 

Connecticut, and Mr. PASCRELL) introduced the following bill; which was 

referred to the Committee on Ways and Means, and in addition to the 

Committee on Energy and Commerce, 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 amend the Internal Revenue Code of 1986 to provide 

incentives for clean energy and to repeal fossil fuel subsidies for big oil companies. 

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 

5 ‘‘Investing to Modernize the Production of American 

6 Clean Energy and Technology Act of 2012’’ or as the 

7 ‘‘IMPACT Act of 2012’’. 


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

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—CLEAN ENERGY INCENTIVES 

Subtitle A—Renewable Energy 

Sec. 101. Extension of renewable energy credits. 

Sec. 102. Extension of election of investment tax credit in lieu of production 

credit. 

Sec. 103. Extension of grants for specified energy property in lieu of tax credits. 

Sec. 104. Extension of qualifying advanced energy project credit. 

Sec. 105. Extension of credit for energy-efficient new homes. 

Sec. 106. Extension of credit for energy-efficient appliances. 

Subtitle B—Electric, Natural Gas, and Hydrogen Vehicles 

Sec. 111. Increase and expansion of credit for qualified plug-in electric drive 

motor vehicles. 

Sec. 112. Extension of new qualified alternative fuel motor vehicle credit for 

heavy natural gas vehicles. 

Sec. 113. Modification of credit for alternative fuel vehicle refueling property 

for vehicles powered by electricity, natural gas, or hydrogen. 

Sec. 114. Electric, natural gas, and hydrogen vehicle refueling property tax 

credit bonds. 

TITLE II—REPEAL OF FOSSIL FUEL SUBSIDIES FOR BIG OIL 

COMPANIES 

Sec. 201. Prohibition on using last-in, first-out accounting for major integrated 

oil companies. 

Sec. 202. Modifications of foreign tax credit rules applicable to major integrated oil companies which are dual capacity taxpayers. 

Sec. 203. Limitation on section 199 deduction attributable to oil, natural gas, 

or primary products thereof. 

Sec. 204. Limitation on deduction for intangible drilling and development costs. 

Sec. 205. Limitation on percentage depletion allowance for oil and gas wells. 

Sec. 206. Limitation on deduction for tertiary injectants. 


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1 TITLE I—CLEAN ENERGY 

2 INCENTIVES 

3 Subtitle A—Renewable Energy 

4 SEC. 101. EXTENSION OF RENEWABLE ENERGY CREDITS. 

5 (a) WIND.—Paragraph (1) of section 45(d) of the In6 ternal Revenue Code of 1986 is amended by striking ‘‘Jan7 uary 1, 2013’’ and inserting ‘‘January 1, 2021’’. 

8 (b) BIOMASS, GEOTHERMAL, SMALL IRRIGATION, 

9 LANDFILL GAS, HYDROPOWER, MARINE, AND

10 HYDROKINETIC.—Each of the following provisions of sec11 tion 45(d) of such Code is amended by striking ‘‘January 

12 1, 2014’’ and inserting ‘‘January 1, 2022’’: 

13 (1) Clauses (i) and (ii) of paragraph (2)(A). 

14 (2) Clauses (i)(I) and (ii) of paragraph (3)(A). 

15 (3) Paragraph (4). 

16 (4) Paragraph (6). 

17 (5) Subparagraphs (A) and (B) of paragraph 

18 (9). 

19 (6) Subparagraph (B) of paragraph (11). 

20 (c) EARLY TERMINATION IN EVENT OF FEDERAL

21 RENEWABLE ELECTRICITY REQUIREMENT.—Subsection 

22 (d) of section 45 of the Internal Revenue Code of 1986 

23 is amended by adding at the end the following new para24 graph: 


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1 ‘‘(12) TERMINATION IN EVENT OF FEDERAL

2 RENEWABLE ELECTRICITY REQUIREMENT.—Not3 withstanding any other provision of this section, the 

4 term ‘qualified facility’ shall not include any prop5 erty which is placed in service after the date which 

6 is 1 year after the date on which the Secretary of 

7 Energy makes a public declaration that a Federal 

8 law is in effect which requires retail electric sup9 pliers in the United States to supply minimum and 

10 significant amounts of electric energy which is gen11 erated from renewable sources to customers for pur12 poses other than resale.’’. 

13 SEC. 102. EXTENSION OF ELECTION OF INVESTMENT TAX 

14 CREDIT IN LIEU OF PRODUCTION CREDIT. 

15 (a) IN GENERAL.—Clause (ii) of section 48(a)(5)(C) 

16 of the Internal Revenue Code of 1986 is amended by strik17 ing ‘‘or 2013’’ and inserting ‘‘2013, 2014, 2015, 2016, 

18 2017, 2018, 2019, 2020, or 2021’’. 

19 (b) WIND FACILITIES.—Clause (i) of section 

20 48(a)(5)(C) of the Internal Revenue Code of 1986 is 

21 amended by striking ‘‘Any qualified facility’’ and all that 

22 follows and inserting ‘‘Any facility which is— 

23 ‘‘(I) a qualified facility (within 

24 the meaning of section 45) described 

25 in paragraph (1) of section 45(d) if 


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1 such facility is placed in service in 

2 2009, 2010, 2011, 2012, 2013, 2014, 

3 2015, 2016, 2017, 2018, 2019, or 

4 2020, or 

5 ‘‘(II) a qualifying offshore wind 

6 facility, if such facility is placed in 

7 service in 2009, 2010, 2011, 2012, 

8 2013, 2014, 2015, 2016, 2017, 2018, 

9 2019, 2020, or 2021.’’. 

10 (c) LIMITATION.—Paragraph 5 of section 48(a) of 

11 the Internal Revenue Code of 1986 is amended by adding 

12 at the end the following new subparagraph: 

13 ‘‘(E) LIMITATION.—The total amount of 

14 megawatt capacity for offshore facilities under 

15 clause (II) of subsection (a)(5)(C) with respect 

16 to which credits may be allocated under the 

17 program shall not exceed 3,000 megawatts.’’. 


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1 (d) QUALIFYING OFFSHORE WIND FACILITY.—Para2 graph (5) of section 48(a) of the Internal Revenue Code 

3 of 1986 is further amended by adding at the end the fol4 lowing new subparagraph: 

5 ‘‘(F) QUALIFYING OFFSHORE WIND FACIL6 ITY.—For purposes of this paragraph— 

7 ‘‘(i) IN GENERAL.—The term ‘quali8 fying offshore wind facility’ means an off9 shore facility using wind to produce elec10 tricity. 

11 ‘‘(ii) OFFSHORE FACILITY.—The term 

12 ‘offshore facility’ means any facility located 

13 in the inland navigable waters of the 

14 United States, including the Great Lakes, 

15 or in the coastal waters of the United 

16 States, including the territorial seas of the 

17 United States, the exclusive economic zone 

18 of the United States, and the Outer Conti19 nental Shelf of the United States. For pur20 poses of the preceding sentence, the term 

21 ‘United States’ has the meaning given in 

22 section 638(1).’’. 

23 (e) AVAILABILITY OF GRANTS IN LIEU OF TAX

24 CREDITS.—Subparagraph (A) of section 1603(b)(2) of di25 vision B of the American Recovery and Reinvestment Act 


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1 of 2009 is amended by inserting ‘‘or section 48(a)(5) of 

2 the Internal Revenue Code of 1986’’ after ‘‘subsection 

3 (d)’’. 

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

5 this section shall apply to facilities placed in service after 

6 December 31, 2011. 

7 SEC. 103. EXTENSION OF GRANTS FOR SPECIFIED ENERGY 

8 PROPERTY IN LIEU OF TAX CREDITS. 

9 (a) IN GENERAL.—Subsection (a) of section 1603 of 

10 division B of the American Recovery and Reinvestment 

11 Act of 2009 is amended— 

12 (1) in paragraph (1), by striking ‘‘or 2011’’ and 

13 inserting ‘‘2011, 2012, or 2013’’, and 

14 (2) in paragraph (2)— 

15 (A) by striking ‘‘after 2011’’ and inserting 

16 ‘‘after 2013’’, and 

17 (B) by striking ‘‘or 2011’’ and inserting 

18 ‘‘2011, 2012, or 2013’’. 

19 (b) CONFORMING AMENDMENT.—Subsection (j) of 

20 section 1603 of division B of such Act is amended by strik21 ing ‘‘2012’’ and inserting ‘‘2014’’. 


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1 SEC. 104. EXTENSION OF QUALIFYING ADVANCED ENERGY 

2 PROJECT CREDIT. 

3 Paragraph (1) of section 48C(d) of the Internal Rev4 enue Code of 1986 is amended by adding at the end the 

5 following new subparagraph: 

6 ‘‘(C) ADDITIONAL LIMITATION AMOUNT.— 

7 ‘‘(i) IN GENERAL.—The dollar amount 

8 under subparagraph (B) is hereby in9 creased by $5,000,000,000. 

10 ‘‘(ii) APPLICATIONS.—Notwith11 standing the deadline for submitting appli12 cations specified in paragraph (2)(A), an 

13 applicant for certification with respect to 

14 credits allocated pursuant to clause (i) may 

15 submit an application to the Secretary at 

16 such time and in such manner as the Sec17 retary may provide. 

18 ‘‘(iii) REVIEW, REDISTRIBUTION, AND

19 REALLOCATION.—Notwithstanding the 

20 deadline for review specified in paragraph 

21 (4)(A), the Secretary shall review the cred22 its allocated pursuant to clause (i) at such 

23 time as the Secretary determines appro24 priate.’’. 


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1 SEC. 105. EXTENSION OF CREDIT FOR ENERGY-EFFICIENT 

2 NEW HOMES. 

3 (a) IN GENERAL.—Subsection (g) of section 45L of 

4 the Internal Revenue Code of 1986 is amended by striking 

5 ‘‘December 31, 2011’’ and inserting ‘‘December 31, 

6 2012’’. 

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

8 this section shall apply to homes acquired after December 

9 31, 2011. 

10 SEC. 106. EXTENSION OF CREDIT FOR ENERGY-EFFICIENT 

11 APPLIANCES. 

12 (a) IN GENERAL.—Section 45M(b) of the Internal 

13 Revenue Code of 1986 is amended by striking ‘‘2011’’ 

14 each place it appears other than in the provisions specified 

15 in subsection (b), and inserting ‘‘2011 or 2012’’. 

16 (b) PROVISIONS SPECIFIED.—The provisions of sec17 tion 45M(b) of the Internal Revenue Code of 1986 speci18 fied in this subsection are subparagraph (C) of paragraph 

19 (1) and subparagraph (E) of paragraph (2). 

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

21 this section shall apply to appliances produced after De22 cember 31, 2011. 


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1 Subtitle B—Electric, Natural Gas, 

2 and Hydrogen Vehicles 

3 SEC. 111. INCREASE AND EXPANSION OF CREDIT FOR 

4 QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR 

5 VEHICLES. 

6 (a) INCREASE IN DOLLAR LIMITATION.—Paragraph 

7 (2) of section 30D(b) of the Internal Revenue Code of 

8 1986 is amended by striking ‘‘$2,500’’ and inserting 

9 ‘‘$5,000’’. 

10 (b) INCREASE IN LIMITATION ON NUMBER OF VEHI11 CLES ELIGIBLE FOR CREDIT.—Paragraph (2) of section 

12 30D(e) of such Code is amended by striking ‘‘200,000’’ 

13 and inserting ‘‘400,000’’. 

14 (c) EFFECTIVE DATE.—The amendment made by 

15 this section shall apply to vehicles acquired after the date 

16 of the enactment of this Act. 

17 SEC. 112. EXTENSION OF NEW QUALIFIED ALTERNATIVE 

18 FUEL MOTOR VEHICLE CREDIT FOR HEAVY 

19 NATURAL GAS VEHICLES. 

20 (a) IN GENERAL.—Paragraph (4) of section 30B(k) 

21 of the Internal Revenue Code of 1986 is amended by in22 serting ‘‘(December 31, 2016, in the case of a vehicle pow23 ered by compressed or liquefied natural gas and weighing 

24 more than 8,500 pounds)’’ before the period at the end. 


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

2 this section shall apply to vehicles purchased after the date 

3 of the enactment of this Act. 

4 SEC. 113. MODIFICATION OF CREDIT FOR ALTERNATIVE 

5 FUEL VEHICLE REFUELING PROPERTY FOR 

6 VEHICLES POWERED BY ELECTRICITY, NAT7 URAL GAS, OR HYDROGEN. 

8 (a) SPECIAL RULES FOR PROPERTY PLACED IN

9 SERVICE BEFORE JANUARY 1, 2017.—Subsection (e) of 

10 section 30C of the Internal Revenue Code of 1986 is 

11 amended by adding at the end the following new para12 graph: 

13 ‘‘(7) PROPERTY FOR RECHARGING VEHICLES

14 POWERED BY ELECTRICITY, NATURAL GAS, OR HY15 DROGEN.—In the case of property placed in service 

16 after December 31, 2011, and before January 1, 

17 2017, which relates to electricity, natural gas, or hy18 drogen— 

19 ‘‘(A) subsection (a) shall be applied by 

20 substituting ‘50 percent’ for ‘30 percent’, 

21 ‘‘(B) subsection (b)(1) shall be applied by 

22 substituting ‘$50,000’ for ‘$30,000’, and 

23 ‘‘(C) subsection (b)(2) shall be applied by 

24 substituting ‘$2,000’ for ‘$1,000’.’’. 


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1 (b) INSTALLATION COSTS.—Subsection (e) of section 

2 30C of such Code, as amended by subsection (a), is 

3 amended by adding at the end the following: 

4 ‘‘(8) INSTALLATION COSTS.—The cost of any 

5 qualified alternative fuel vehicle refueling property 

6 which relates to electricity, natural gas, or hydrogen 

7 shall include the cost of the original installation of 

8 such property.’’. 

9 (c) TERMINATION OF CREDIT.—Paragraph (1) of 

10 section 30C(g) of such Code is amended to read as follows: 

11 ‘‘(1) in the case of property relating to elec12 tricity, natural gas, or hydrogen, after December 31, 

13 2017, and’’. 

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

15 this section shall apply to property placed in service after 

16 December 31, 2011. 

17 SEC. 114. ELECTRIC, NATURAL GAS, AND HYDROGEN VEHI18 CLE REFUELING PROPERTY TAX CREDIT 

19 BONDS. 

20 (a) IN GENERAL.—Paragraph (1) of section 54A(d) 

21 of the Internal Revenue Code of 1986 is amended by strik22 ing ‘‘or’’ at the end of subparagraph (D), by inserting 

23 ‘‘or’’ at the end of subparagraph (E), and by inserting 

24 after subparagraph (E) the following new subparagraph: 


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1 ‘‘(F) a qualified electric, natural gas, and 

2 hydrogen vehicle refueling property bond,’’. 

3 (b) QUALIFIED PURPOSE.—Subparagraph (C) of sec4 tion 54A(d)(2) of the Internal Revenue Code of 1986 is 

5 amended— 

6 (1) by striking ‘‘and’’ at the end of clause (iv), 

7 (2) by striking the period at the end of clause 

8 (v) and inserting ‘‘, and’’, and 

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

10 clause: 

11 ‘‘(vi) in the case of a qualified electric, 

12 natural gas, and hydrogen vehicle refueling 

13 property bond, a purpose specified in sec14 tion 54G(a)(1).’’. 

15 (c) BONDS ALLOWED.—Subpart I of part IV of sub16 chapter A of chapter 1 of the Internal Revenue Code of 

17 1986 is amended by adding at the end the following new 

18 section: 

19 ‘‘SEC. 54G. QUALIFIED ELECTRIC, NATURAL GAS, AND HY20 DROGEN VEHICLE REFUELING PROPERTY 

21 BONDS. 

22 ‘‘(a) QUALIFIED ELECTRIC, NATURAL GAS, AND HY23 DROGEN VEHICLE REFUELING PROPERTY BOND.—For 

24 purposes of this subpart, the term ‘qualified electric, natVerDate Mar 15 2010 03:24 May 03, 2012 Jkt 019200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H5187.IH H5187

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1 ural gas, and hydrogen vehicle refueling property bond’ 

2 means any bond issued as part of an issue if— 

3 ‘‘(1) 100 percent of the available project pro4 ceeds of such issue are to be used for capital expend5 itures incurred by a qualified issuer for 1 or more 

6 qualified electric, natural gas, and hydrogen vehicle 

7 refueling properties, 

8 ‘‘(2) the bond is issued by a qualified issuer, 

9 and 

10 ‘‘(3) the issuer designates such bond for pur11 poses of this section. 

12 ‘‘(b) REDUCED CREDIT AMOUNT.—Notwithstanding 

13 paragraph (2) of section 54A(b), the annual credit deter14 mined with respect to any qualified electric, natural gas, 

15 and hydrogen vehicle refueling property bond is 70 percent 

16 of the amount which would (but for this subsection) other17 wise be determined under such paragraph with respect to 

18 such bond. 

19 ‘‘(c) LIMITATION ON AMOUNT OF BONDS DES20 IGNATED.—The maximum aggregate face amount of 

21 bonds which may be designated under subsection (a) by 

22 any issuer shall not exceed the limitation amount allocated 

23 to such issuer under subsection (e). 

24 ‘‘(d) NATIONAL LIMITATION ON AMOUNT OF BONDS

25 DESIGNATED.—There is a national qualified electric, natVerDate Mar 15 2010 03:24 May 03, 2012 Jkt 019200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H5187.IH H5187

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1 ural gas, and hydrogen vehicle refueling property bond 

2 limitation of $750,000,000. 

3 ‘‘(e) ALLOCATIONS.—The Secretary shall make allo4 cations of the amount of the national qualified electric, 

5 natural gas, and hydrogen vehicle refueling property bond 

6 limitation described in subsection (d) among purposes de7 scribed in subsection (a)(1) in such manner as the Sec8 retary determines appropriate. 

9 ‘‘(f) DEFINITIONS.—For purposes of this section— 

10 ‘‘(1) QUALIFIED ELECTRIC, NATURAL GAS, AND

11 HYDROGEN VEHICLE REFUELING PROPERTY.—The 

12 term ‘qualified electric, natural gas, and hydrogen 

13 vehicle refueling property’ means any qualified alter14 native fuel vehicle refueling property (within the 

15 meaning of section 30C) which relates to electricity, 

16 natural gas, or hydrogen. 

17 ‘‘(2) QUALIFIED ISSUER.— 

18 ‘‘(A) IN GENERAL.—The term ‘qualified 

19 issuer’ means a public power provider, a cooper20 ative electric company, or a governmental body. 

21 ‘‘(B) GOVERNMENTAL BODY.—The term 

22 ‘governmental body’ means any State or Indian 

23 tribal government, or any political subdivision 

24 thereof. 


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1 ‘‘(C) PUBLIC POWER PROVIDER.—The 

2 term ‘public power provider’ means a State util3 ity that has a service obligation to end-users or 

4 to a distribution utility (within the meaning of 

5 section 217 of the Federal Power Act, as in ef6 fect on the date of the enactment of this sec7 tion). 

8 ‘‘(D) COOPERATIVE ELECTRIC COMPANY.— 

9 The term ‘cooperative electric company’ means 

10 a mutual or cooperative electric company de11 scribed in section 501(c)(12) or an organization 

12 described in section 1381(a)(2)(C).’’. 

13 (d) CLERICAL AMENDMENT.—The table of sections 

14 for subpart I of part IV of subchapter A of chapter 1 of 

15 the Internal Revenue Code of 1986 is amended by adding 

16 at the end the following new item: 

‘‘Sec. 54G. Qualified electric, natural gas, and hydrogen vehicle refueling property bonds.’’. 

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

18 this section shall apply to obligations issued after the date 

19 of the enactment of this Act. 


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1 TITLE II—REPEAL OF FOSSIL 

2 FUEL SUBSIDIES FOR BIG OIL 

3 COMPANIES 

4 SEC. 201. PROHIBITION ON USING LAST-IN, FIRST-OUT AC5 COUNTING FOR MAJOR INTEGRATED OIL 

6 COMPANIES. 

7 (a) IN GENERAL.—Section 472 of the Internal Rev8 enue Code of 1986 is amended by adding at the end the 

9 following new subsection: 

10 ‘‘(h) MAJOR INTEGRATED OIL COMPANIES.—Not11 withstanding any other provision of this section, a major 

12 integrated oil company (as defined in section 

13 167(h)(5)(B)) may not use the method provided in sub14 section (b) in inventorying of any goods.’’. 

15 (b) EFFECTIVE DATE AND SPECIAL RULE.— 

16 (1) IN GENERAL.—The amendment made by 

17 subsection (a) shall apply to taxable years beginning 

18 after the date of the enactment of this Act. 

19 (2) CHANGE IN METHOD OF ACCOUNTING.—In 

20 the case of any taxpayer required by the amendment 

21 made by this section to change its method of ac22 counting for its first taxable year beginning after the 

23 date of the enactment of this Act— 

24 (A) such change shall be treated as initi25 ated by the taxpayer, 


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1 (B) such change shall be treated as made 

2 with the consent of the Secretary of the Treas3 ury, and 

4 (C) the net amount of the adjustments re5 quired to be taken into account by the taxpayer 

6 under section 481 of the Internal Revenue Code 

7 of 1986 shall be taken into account ratably over 

8 a period (not greater than 8 taxable years) be9 ginning with such first taxable year. 

10 SEC. 202. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 

11 APPLICABLE TO MAJOR INTEGRATED OIL 

12 COMPANIES WHICH ARE DUAL CAPACITY 

13 TAXPAYERS. 

14 (a) IN GENERAL.—Section 901 of the Internal Rev15 enue Code of 1986 is amended by redesignating subsection 

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

17 the following new subsection: 

18 ‘‘(n) SPECIAL RULES RELATING TO MAJOR INTE19 GRATED OIL COMPANIES WHICH ARE DUAL CAPACITY

20 TAXPAYERS.— 

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

22 other provision of this chapter, any amount paid or 

23 accrued by a dual capacity taxpayer which is a 

24 major integrated oil company (as defined in section 

25 167(h)(5)(B)) to a foreign country or possession of 


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1 the United States for any period shall not be consid2 ered a tax— 

3 ‘‘(A) if, for such period, the foreign coun4 try or possession does not impose a generally 

5 applicable income tax, or 

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

7 the amount (determined in accordance with reg8 ulations) which— 

9 ‘‘(i) is paid by such dual capacity tax10 payer pursuant to the generally applicable 

11 income tax imposed by the country or pos12 session, or 

13 ‘‘(ii) would be paid if the generally ap14 plicable income tax imposed by the country 

15 or possession were applicable to such dual 

16 capacity taxpayer. 

17 Nothing in this paragraph shall be construed to 

18 imply the proper treatment of any such amount not 

19 in excess of the amount determined under subpara20 graph (B). 

21 ‘‘(2) DUAL CAPACITY TAXPAYER.—For pur22 poses of this subsection, the term ‘dual capacity tax23 payer’ means, with respect to any foreign country or 

24 possession of the United States, a person who— 


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

2 possession, and 

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

4 indirectly a specific economic benefit (as deter5 mined in accordance with regulations) from 

6 such country or possession. 

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

8 For purposes of this subsection— 

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

10 applicable income tax’ means an income tax (or 

11 a series of income taxes) which is generally im12 posed under the laws of a foreign country or 

13 possession on income derived from the conduct 

14 of a trade or business within such country or 

15 possession. 

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

17 include a tax unless it has substantial applica18 tion, by its terms and in practice, to— 

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

20 taxpayers, and 

21 ‘‘(ii) persons who are citizens or resi22 dents of the foreign country or posses23 sion.’’. 

24 (b) EFFECTIVE DATE.— 


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

2 this section shall apply to taxes paid or accrued in 

3 taxable years beginning after the date of the enact4 ment of this Act. 

5 (2) CONTRARY TREATY OBLIGATIONS

6 UPHELD.—The amendments made by this section 

7 shall not apply to the extent contrary to any treaty 

8 obligation of the United States. 

9 SEC. 203. LIMITATION ON SECTION 199 DEDUCTION ATTRIB10 UTABLE TO OIL, NATURAL GAS, OR PRIMARY 

11 PRODUCTS THEREOF. 

12 (a) DENIAL OF DEDUCTION.—Paragraph (4) of sec13 tion 199(c) of the Internal Revenue Code of 1986 is 

14 amended by adding at the end the following new subpara15 graph: 

16 ‘‘(E) SPECIAL RULE FOR CERTAIN OIL

17 AND GAS INCOME.—In the case of any taxpayer 

18 who is a major integrated oil company (as de19 fined in section 167(h)(5)(B)) for the taxable 

20 year, the term ‘domestic production gross re21 ceipts’ shall not include gross receipts from the 

22 production, transportation, or distribution of 

23 oil, natural gas, or any primary product (within 

24 the meaning of subsection (d)(9)) thereof.’’. 


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

2 this section shall apply to taxable years beginning after 

3 December 31, 2011. 

4 SEC. 204. LIMITATION ON DEDUCTION FOR INTANGIBLE 

5 DRILLING AND DEVELOPMENT COSTS. 

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

7 Revenue Code of 1986 is amended by adding at the end 

8 the following new sentence: ‘‘This subsection shall not 

9 apply to amounts paid or incurred by a taxpayer in any 

10 taxable year in which such taxpayer is a major integrated 

11 oil company (as defined in section 167(h)(5)(B)).’’. 

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

13 this section shall apply to amounts paid or incurred in tax14 able years beginning after December 31, 2011. 

15 SEC. 205. LIMITATION ON PERCENTAGE DEPLETION AL16 LOWANCE FOR OIL AND GAS WELLS. 

17 (a) IN GENERAL.—Section 613A of the Internal Rev18 enue Code of 1986 is amended by adding at the end the 

19 following new subsection: 

20 ‘‘(f) APPLICATION WITH RESPECT TO MAJOR INTE21 GRATED OIL COMPANIES.—In the case of any taxable year 

22 in which the taxpayer is a major integrated oil company 

23 (as defined in section 167(h)(5)(B)), the allowance for 

24 percentage depletion shall be zero.’’. 


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

2 this section shall apply to taxable years beginning after 

3 December 31, 2011. 

4 SEC. 206. LIMITATION ON DEDUCTION FOR TERTIARY 

5 INJECTANTS. 

6 (a) IN GENERAL.—Section 193 of the Internal Rev7 enue Code of 1986 is amended by adding at the end the 

8 following new subsection: 

9 ‘‘(d) APPLICATION WITH RESPECT TO MAJOR INTE10 GRATED OIL COMPANIES.—This section shall not apply to 

11 amounts paid or incurred by a taxpayer in any taxable 

12 year in which such taxpayer is a major integrated oil com13 pany (as defined in section 167(h)(5)(B)).’’. 

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

15 this section shall apply to amounts paid or incurred in tax16 able years beginning after December 31, 2011. 

Æ 


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