I 

114TH CONGRESS 

1ST SESSION H. R. 3311 

To amend the Internal Revenue Code of 1986 to repeal fossil fuel subsidies 

for oil companies. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 29, 2015 

Mr. BLUMENAUER (for himself, Mr. CONYERS, Mr. POLIS, Ms. DELAURO, Mr. 

LANGEVIN, Mrs. CAPPS, Mr. RANGEL, Mr. HUFFMAN, Mr. POCAN, Ms. 

NORTON, Mr. WELCH, Ms. TSONGAS, Mr. HONDA, Mr. MCDERMOTT, Ms. 

EDWARDS, Ms. MCCOLLUM, Mr. CICILLINE, Mr. MCGOVERN, Mr. VAN

HOLLEN, Mr. TED LIEU of California, and Mr. PASCRELL) 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 

fossil fuel subsidies for 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. 

4 This Act may be cited as the ‘‘End Oil and Gas Tax 

5 Subsidies Act of 2015’’. 


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1 SEC. 2. AMORTIZATION OF GEOLOGICAL AND GEO2 PHYSICAL 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’’ in paragraph 

6 (1) and inserting ‘‘7-year period’’, and 

7 (2) by striking paragraph (5). 

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

9 this section shall apply to amounts paid or incurred in tax10 able years beginning after December 31, 2015. 

11 SEC. 3. PRODUCING OIL AND GAS FROM MARGINAL WELLS. 

12 (a) IN GENERAL.—Subpart D of part IV of sub13 chapter A of chapter 1 of the Internal Revenue Code of 

14 1986 is amended by striking section 45I (and by striking 

15 the item relating to such section in the table of sections 

16 for such subpart). 

17 (b) CONFORMING AMENDMENT.—Section 38(b) of 

18 such Code is amended by striking paragraph (19). 

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

20 subsection (a) shall apply to credits determined for taxable 

21 years beginning after December 31, 2015. 

22 SEC. 4. ENHANCED OIL RECOVERY CREDIT. 

23 (a) IN GENERAL.—Subpart D of part IV of sub24 chapter A of chapter 1 of the Internal Revenue Code of 

25 1986 is amended by striking section 43 (and by striking 


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1 the item relating to such section in the table of sections 

2 for such subpart). 

3 (b) CONFORMING AMENDMENT.—Section 38(b) of 

4 such Code is amended by striking paragraph (6). 

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

6 this section shall apply to amounts paid or incurred in tax7 able years beginning after December 31, 2015. 

8 SEC. 5. INTANGIBLE DRILLING AND DEVELOPMENT COSTS 

9 IN THE CASE OF OIL AND GAS WELLS. 

10 (a) IN GENERAL.—Subsection (c) of section 263 of 

11 the Internal Revenue Code of 1986 is amended by adding 

12 at the end the following new sentence: ‘‘This subsection 

13 shall not apply to amounts paid or incurred by a taxpayer 

14 with respect to an oil or gas well after December 31, 

15 2015.’’. 

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

17 this section shall apply to amounts paid or incurred in tax18 able years beginning after December 31, 2015. 

19 SEC. 6. REPEAL OF PERCENTAGE DEPLETION FOR OIL AND 

20 GAS WELLS. 

21 (a) IN GENERAL.—Part I of subchapter I of chapter 

22 1 of the Internal Revenue Code of 1986 is amended by 

23 striking section 613A (and the table of sections of such 

24 part is amended by striking the item relating to such sec25 tion). 


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1 (b) CONFORMING AMENDMENTS.— 

2 (1) Subsection (d) of section 45H of such Code 

3 is amended— 

4 (A) by striking ‘‘For purposes this section’’ 

5 and inserting the following: 

6 ‘‘(1) IN GENERAL.—For purposes of this sec7 tion’’, 

8 (B) by striking ‘‘(within the meaning of 

9 section 613A(d)(3))’’, and 

10 (C) by adding at the end the following new 

11 paragraph: 

12 ‘‘(2) RELATED PERSON.—For purposes of this 

13 subsection, a person is a related person with respect 

14 to the taxpayer if a significant ownership interest in 

15 either the taxpayer or such person is held by the 

16 other, or if a third person has a significant owner17 ship interest in both the taxpayer and such person. 

18 For purposes of the preceding sentence, the term 

19 ‘significant ownership interest’ means— 

20 ‘‘(A) with respect to any corporation, 5 

21 percent or more in value of the outstanding 

22 stock of such corporation, 

23 ‘‘(B) with respect to a partnership, 5 per24 cent or more interest in the profits or capital of 

25 such partnership, and 


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1 ‘‘(C) with respect to an estate or trust, 5 

2 percent or more of the beneficial interests in 

3 such estate or trust. 

4 For purposes of determining a significant ownership 

5 interest, an interest owned by or for a corporation, 

6 partnership, trust, or estate shall be considered as 

7 owned directly both by itself and proportionately by 

8 its shareholders, partners, or beneficiaries, as the 

9 case may be.’’. 

10 (2) Section 56(g)(4)(F) of such Code is amend11 ed to read as follows: 

12 ‘‘(F) DEPLETION.—The allowance for de13 pletion with respect to any property placed in 

14 service in a taxable year beginning after De15 cember 31, 1989, shall be cost depletion deter16 mined under section 611.’’. 

17 (3) Section 57(a)(1) of such Code is amended 

18 by striking the last sentence. 

19 (4) Section 291(b)(4) of such Code is amended 

20 by adding at the end the following: ‘‘Any reference 

21 in the preceding sentence to section 613A shall be 

22 treated as a reference to such section as in effect 

23 prior to the date of the enactment of the End Oil 

24 and Gas Tax Subsidies Act of 2015.’’. 


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1 (5) Section 613(d) of such Code is amended by 

2 striking ‘‘Except as provided in section 613A, in the 

3 case of’’ and inserting ‘‘In the case of’’. 

4 (6) Section 613(e) of such Code is amended— 

5 (A) by striking ‘‘or section 613A’’ in para6 graph (2), and 

7 (B) by striking ‘‘any amount described in 

8 section 613A(d)(5)’’ in paragraph (3) and in9 serting ‘‘any lease bonus, advance royalty, or 

10 other amount payable without regard to produc11 tion from property’’. 

12 (7) Section 705(a) of such Code is amended— 

13 (A) by inserting ‘‘and’’ at the end of para14 graph (1)(C), 

15 (B) by striking ‘‘; and’’ at the end of para16 graph (2)(B) and inserting a period, and 

17 (C) by striking paragraph (3). 

18 (8) Section 776 of such Code is amended by 

19 striking subsection (a) and by redesignating sub20 section (b) as subsection (a). 

21 (9) Section 954(g)(2)(D) of such Code is 

22 amended by inserting ‘‘(as in effect before the date 

23 of the enactment of the End Oil and Gas Tax Sub24 sidies Act of 2015)’’ after ‘‘section 613A’’. 


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1 (10) Section 993(c)(2)(C) of such Code is 

2 amended by striking ‘‘section 613 or 613A’’ and in3 serting ‘‘section 613 (determined without regard to 

4 subsection (d) thereof)’’. 

5 (11) Section 1202(e)(3)(D) of such Code is 

6 amended by striking ‘‘section 613 or 613A’’ and in7 serting ‘‘section 613 (determined without regard to 

8 subsection (d) thereof)’’. 

9 (12) Section 1367(a)(2) of such Code is amend10 ed by inserting ‘‘and’’ at the end of subparagraph 

11 (C), by striking ‘‘, and’’ at the end of subparagraph 

12 (D) and inserting a period, and by striking subpara13 graph (E). 

14 (13) Section 1446(c) of such Code is amended 

15 by striking paragraph (2) and by redesignating 

16 paragraph (3) as paragraph (2). 

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

18 this section shall apply to property placed in service after 

19 December 31, 2015. 

20 SEC. 7. REPEAL OF DEDUCTION FOR TERTIARY 

21 INJECTANTS. 

22 (a) IN GENERAL.—Part VI of subchapter B of chap23 ter 1 of the Internal Revenue Code of 1986 is amended 

24 by striking section 193 (and the table of sections of such 


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1 subpart is amended by striking the item relating to such 

2 section). 

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

4 this section shall apply to taxable years beginning after 

5 December 31, 2015. 

6 SEC. 8. REPEAL OF EXCEPTION TO PASSIVE LOSS LIMITA7 TIONS FOR WORKING INTERESTS IN OIL AND 

8 GAS PROPERTIES. 

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

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

11 the following new subparagraph: 

12 ‘‘(C) TERMINATION.—Subparagraph (A) 

13 shall not apply with respect to any taxable year 

14 beginning after the date of the enactment of 

15 this Act.’’. 

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

17 this section shall apply to taxable years beginning after 

18 December 31, 2015. 

19 SEC. 9. DEDUCTION FOR INCOME ATTRIBUTABLE TO DO20 MESTIC PRODUCTION ACTIVITIES NOT AL21 LOWED WITH RESPECT TO OIL AND GAS AC22 TIVITIES. 

23 (a) IN GENERAL.—Section 199(c)(4)(B) of the Inter24 nal Revenue Code of 1986 is amended by striking ‘‘and’’ 

25 at the end of clause (ii), by striking the period at the end 


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1 of clause (iii) and inserting ‘‘, and’’, and by inserting after 

2 clause (iii) the following new clause: 

3 ‘‘(iv) the production, refining, proc4 essing, transportation, or distribution of 

5 oil, gas, or any primary product thereof.’’. 

6 (b) CONFORMING AMENDMENT.—Section 199(d) of 

7 such Code is amended by striking paragraph (9) and by 

8 redesignating paragraph (10) as paragraph (9). 

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

10 this section shall apply to taxable years beginning after 

11 December 31, 2015. 

12 SEC. 10. PROHIBITION ON USING LAST-IN, FIRST-OUT AC13 COUNTING FOR OIL AND GAS COMPANIES. 

14 (a) IN GENERAL.—Section 472 of the Internal Rev15 enue Code of 1986 is amended by adding at the end the 

16 following new subsection: 

17 ‘‘(h) OIL AND GAS COMPANIES.— 

18 ‘‘(1) IN GENERAL.—Notwithstanding any other 

19 provision of this section, a major integrated oil com20 pany may not use the method provided in subsection 

21 (b) in inventorying of any goods. 

22 ‘‘(2) MAJOR INTEGRATED OIL COMPANY.—For 

23 purposes of this subsection, the term ‘major inte24 grated oil company’ means, with respect to any tax25 able year, a producer of crude oil— 


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1 ‘‘(A) which has an average daily worldwide 

2 production of crude oil of at least 500,000 bar3 rels for the taxable year, 

4 ‘‘(B) which has gross receipts in excess of 

5 $1,000,000,000 for the taxable year, and 

6 ‘‘(C) the average daily refinery runs of the 

7 taxpayer and related persons for the taxable 

8 year exceed 75,000 barrels. 

9 ‘‘(3) SPECIAL RULES.— 

10 ‘‘(A) CRUDE PRODUCTION AND GROSS RE11 CEIPTS.—For purposes of subparagraphs (A) 

12 and (B) of paragraph (2)— 

13 ‘‘(i) CONTROLLED GROUPS AND COM14 MON CONTROL.—All persons treated as a 

15 single employer under subsections (a) and 

16 (b) of section 52 shall be treated as 1 per17 son. 

18 ‘‘(ii) SHORT TAXABLE YEARS.—In 

19 case of a short taxable year, the rule under 

20 section 448(c)(3)(B) shall apply. 

21 ‘‘(B) AVERAGE DAILY REFINERY RUNS.— 

22 For purposes of paragraph (2)(C)— 

23 ‘‘(i) IN GENERAL.—The average daily 

24 refinery runs for any taxable year shall be 

25 determined by dividing the aggregate refinVerDate Sep 11 2014 03:22 Aug 04, 2015 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3311.IH H3311

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1 ery runs for the taxable year by the num2 ber of days in the taxable year. 

3 ‘‘(ii) RELATED PERSONS.—A person 

4 is a related person with respect to the tax5 payer if a significant ownership interest in 

6 either the taxpayer or such person is held 

7 by the other, or if a third person has a sig8 nificant ownership interest in both the tax9 payer and such person. 

10 ‘‘(iii) SIGNIFICANT OWNERSHIP IN11 TEREST.—For purposes of clause (ii), the 

12 term ‘significant ownership interest’ 

13 means— 

14 ‘‘(I) with respect to any corpora15 tion, 15 percent or more in value of 

16 the outstanding stock of such corpora17 tion, 

18 ‘‘(II) with respect to a partner19 ship, 15 percent or more interest in 

20 the profits or capital of such partner21 ship, and 

22 ‘‘(III) with respect to an estate 

23 or trust, 15 percent or more of the 

24 beneficial interests in such estate or 

25 trust. 


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1 For purposes of determining a significant 

2 ownership interest, an interest owned by or 

3 for a corporation, partnership, trust, or es4 tate shall be considered as owned directly 

5 both by itself and proportionately by its 

6 shareholders, partners, or beneficiaries, as 

7 the case may be.’’. 

8 (b) EFFECTIVE DATE AND SPECIAL RULE.— 

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

10 subsection (a) shall apply to taxable years beginning 

11 after December 31, 2015. 

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

13 the case of any taxpayer required by the amendment 

14 made by this section to change its method of ac15 counting for its first taxable year beginning after the 

16 date of the enactment of this Act— 

17 (A) such change shall be treated as initi18 ated by the taxpayer, 

19 (B) such change shall be treated as made 

20 with the consent of the Secretary of the Treas21 ury, and 

22 (C) the net amount of the adjustments re23 quired to be taken into account by the taxpayer 

24 under section 481 of the Internal Revenue Code 

25 of 1986 shall be taken into account ratably over 


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1 a period (not greater than 8 taxable years) be2 ginning with such first taxable year. 

3 SEC. 11. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 

4 APPLICABLE TO DUAL CAPACITY TAXPAYERS. 

5 (a) IN GENERAL.—Section 901 of the Internal Rev6 enue Code of 1986 is amended by redesignating subsection 

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

8 the following new subsection: 

9 ‘‘(n) SPECIAL RULES RELATING TO DUAL CAPACITY

10 TAXPAYERS.— 

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

12 other provision of this chapter, any amount paid or 

13 accrued by a dual capacity taxpayer to a foreign 

14 country or possession of the United States for any 

15 period with respect to combined foreign oil and gas 

16 income (as defined in section 907(b)(1)) shall not be 

17 considered a tax to the extent such amount exceeds 

18 the amount (determined in accordance with regula19 tions) which would have been required to be paid if 

20 the taxpayer were not a dual capacity taxpayer. 

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 (b) EFFECTIVE DATE.— 

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

9 this section shall apply to taxes paid or accrued in 

10 taxable years beginning after December 31, 2015. 

11 (2) CONTRARY TREATY OBLIGATIONS

12 UPHELD.—The amendments made by this section 

13 shall not apply to the extent contrary to any treaty 

14 obligation of the United States. 

Æ 


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