I 

111TH CONGRESS 

1ST SESSION H. R. 611 

To provide for marginal well production preservation and enhancement. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 21, 2009 

Mr. BOREN introduced the following bill; which was referred to the Committee 

on Ways and Means, and in addition to the Committees on Energy and 

Commerce and Transportation and Infrastructure, 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 provide for marginal well production preservation and 

enhancement. 

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 ‘‘Marginal Well Produc5 tion Preservation and Enhancement Act’’. 


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1 SEC. 2. TAX TREATMENT FOR PROLONGED MARGINAL PRO2 DUCTION. 

3 (a) INCREASE IN PERCENTAGE DEPLETION FOR OIL

4 AND NATURAL GAS PRODUCED FROM MARGINAL PROP5 ERTIES.— 

6 (1) IN GENERAL.—Paragraph (6) of section 

7 613A(c) of the Internal Revenue Code of 1986 (re8 lating to oil and natural gas produced from marginal 

9 properties) is amended to read as follows: 

10 ‘‘(6) OIL AND NATURAL GAS PRODUCED FROM

11 MARGINAL PROPERTIES.— 

12 ‘‘(A) IN GENERAL.—Except as provided in 

13 subsection (d)— 

14 ‘‘(i) the allowance for depletion under 

15 section 611 shall be computed in accord16 ance with section 613 with respect to the 

17 taxpayer’s marginal production of domestic 

18 crude oil and domestic natural gas, and 

19 ‘‘(ii) 27.5 percent shall be deemed to 

20 be specified in subsection (b) of section 

21 613 for purposes of subsection (a) of that 

22 section. 

23 ‘‘(B) COORDINATION WITH OTHER PRO24 DUCTION OF DOMESTIC OIL AND NATURAL

25 GAS.—For purposes of this subsection— 


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1 ‘‘(i) no allowance for depletion shall 

2 be allowed by reason of paragraph (1) with 

3 respect to the taxpayer’s marginal produc4 tion of domestic crude oil and domestic 

5 natural gas, and 

6 ‘‘(ii) such production shall not be 

7 taken into account— 

8 ‘‘(I) in determining under para9 graph (1) how much of the taxpayer’s 

10 depletable oil quantity or depletable 

11 natural gas quantity has been used, or 

12 ‘‘(II) for purposes of applying 

13 subparagraph (A), (B), or (C) of 

14 paragraph (7). 

15 ‘‘(C) MARGINAL PRODUCTION.—The term 

16 ‘marginal production’ means domestic crude oil 

17 or domestic natural gas which is produced dur18 ing any taxable year from a property which— 

19 ‘‘(i) is a stripper well property for the 

20 calendar year in which the taxable year be21 gins, or 

22 ‘‘(ii) is a property substantially all of 

23 the production of which during such cal24 endar year is heavy oil. 


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1 ‘‘(D) STRIPPER WELL PROPERTY.—For 

2 purposes of this paragraph, the term ‘stripper 

3 well property’ means, with respect to any cal4 endar year, any property with respect to which 

5 the amount determined by dividing— 

6 ‘‘(i) the average daily production of 

7 domestic crude oil and domestic natural 

8 gas from producing wells on such property 

9 for such calendar year, by 

10 ‘‘(ii) the number of such wells, 

11 is 15 barrel equivalents or less. 

12 ‘‘(E) HEAVY OIL.—For purposes of this 

13 paragraph, the term ‘heavy oil’ means domestic 

14 crude oil produced from any property if such 

15 crude oil had a weighted average gravity of 20 

16 degrees API or less (corrected to 60 degrees 

17 Fahrenheit). 

18 ‘‘(F) NONAPPLICATION OF TAXABLE IN19 COME LIMIT WITH RESPECT TO MARGINAL PRO20 DUCTION.—The second sentence of subsection 

21 (a) of section 613 shall not apply to so much 

22 of the allowance for depletion as is determined 

23 under subparagraph (A).’’. 

24 (2) CONFORMING AMENDMENTS.— 


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1 (A) Section 613A(c)(3) of the Internal 

2 Revenue Code of 1986 (defining depletable oil 

3 quantity) is amended to read as follows: 

4 ‘‘(3) DEPLETABLE OIL QUANTITY.—For pur5 poses of paragraph (1), the taxpayer’s depletable oil 

6 quantity shall be 1,000 barrels.’’. 

7 (B) Subparagraphs (A) and (B) of section 

8 613A(c)(7) of such Code are each amended by 

9 striking ‘‘or (6), as the case may be’’. 

10 (3) EFFECTIVE DATE.—The amendments made 

11 by this subsection shall apply to taxable years begin12 ning after December 31, 2008. 

13 (b) 1-YEAR EXTENSION OF SUSPENSION OF TAX14 ABLE INCOME LIMIT.—Section 613A(c)(6)(H)(ii) of the 

15 Internal Revenue Code of 1986 (relating to temporary sus16 pension of taxable income limit with respect to marginal 

17 production) is amended by striking ‘‘2010’’ and inserting 

18 ‘‘2011’’. 

19 SEC. 3. OIL AND GAS WELLS AND PIPELINE FACILITIES 

20 TECHNICAL AMENDMENT. 

21 Section 112(n)(4)(A) of the Clean Air Act (42 U.S.C. 

22 7412(n)(4)(A)) is amended by striking ‘‘this section’’ and 

23 inserting ‘‘this Act’’. 


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1 SEC. 4. NATIONAL RESPONSE SYSTEM. 

2 Section 311(j) of the Federal Water Pollution Control 

3 Act (33 U.S.C. 1321(j)) is amended by striking paragraph 

4 (1) and inserting the following: 

5 ‘‘(1) SYSTEM.— 

6 ‘‘(A) DEFINITION OF WASTEWATER

7 TREATMENT FACILITY.—In this paragraph, the 

8 term ‘wastewater treatment facility’ includes 

9 produced water from an oil production facility. 

10 ‘‘(B) REGULATIONS.—Consistent with the 

11 National Contingency Plan required under sub12 section (d), as soon as practicable after the ef13 fective date of this section, and from time to 

14 time thereafter, the President shall promulgate 

15 regulations consistent with maritime safety and 

16 marine and navigation laws— 

17 ‘‘(i) establishing methods and proce18 dures for removal of discharged oil and 

19 hazardous substances; 

20 ‘‘(ii) establishing criteria for the de21 velopment and implementation of local and 

22 regional oil and hazardous substance re23 moval contingency plans; 

24 ‘‘(iii) establishing procedures, meth25 ods, and requirements and other require26 ments for equipment to prevent discharges 


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1 of oil and hazardous substances from ves2 sels and from onshore facilities and off3 shore facilities (other than wastewater 

4 treatment facilities), and to contain those 

5 discharges; and 

6 ‘‘(iv) governing the inspection of ves7 sels carrying cargoes of oil and hazardous 

8 substances and the inspection of those car9 goes in order to reduce the likelihood of 

10 discharges of oil from vessels in violation 

11 of this section. 

12 ‘‘(C) SMALL FACILITIES.—In carrying out 

13 clause (iii) of subparagraph (B), not later than 

14 1 year after the date of enactment of that 

15 clause, the Administrator shall establish proce16 dures, methods, and equipment requirements 

17 and other requirements for, and consider the 

18 cost-effectiveness of those requirements on, 

19 small facilities (including agricultural and oil 

20 production facilities) to prevent discharges from 

21 facilities and offshore facilities, and to contain 

22 those discharges, by developing regulations 

23 based on storage volume and capacity that, with 

24 respect to those small facilities— 


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1 ‘‘(i) apply to any facility the total oil 

2 storage capacity of which is at least 1,320 

3 gallons but less than 50,000 gallons, and 

4 at which no single tank exceeds a nominal 

5 capacity of 21,000 gallons; and 

6 ‘‘(ii) establish minimal requirements 

7 and plans by eliminating engineer certifi8 cation, flow lines, loading and unloading 

9 areas, integrity testing, and other require10 ments, as determined by the Adminis11 trator, that do not take into consideration 

12 and meet cost-effectiveness standards.’’. 

13 SEC. 5. RECOVERY PERIOD FOR DEPRECIATION OF PROP14 ERTY USED TO INJECT QUALIFIED TERTIARY 

15 INJECTANTS. 

16 (a) IN GENERAL.—Section 168(e)(3)(A) of the Inter17 nal Revenue Code of 1986 (defining 3-year property) is 

18 amended by striking ‘‘and’’ at the end of clause (ii), by 

19 striking the period at the end of clause (iii) and inserting 

20 ‘‘, and’’, and by adding at the end the following new 

21 clause: 

22 ‘‘(iv) any qualified tertiary injectant 

23 property.’’. 

24 (b) QUALIFIED TERTIARY INJECTANT PROPERTY.— 

25 Section 168(e) of the Internal Revenue Code of 1986 (reVerDate Nov 24 2008 02:47 Jan 23, 2009 Jkt 079200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H611.IH H611

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1 lating to classification of property) is amended by adding 

2 at the end the following new paragraph: 

3 ‘‘(9) QUALIFIED TERTIARY INJECTANT PROP4 ERTY.—The term ‘qualified tertiary injectant prop5 erty’ means— 

6 ‘‘(A) any property— 

7 ‘‘(i) the principal use of which is to 

8 inject any tertiary injectant as a part of a 

9 tertiary recovery method (as defined in sec10 tion 193(b)(3)), or 

11 ‘‘(ii) which is a pipeline used to carry 

12 any tertiary injectant in connection with 

13 such tertiary recovery method, and 

14 ‘‘(B) which has a class life of more than 4 

15 years.’’. 

16 (c) ALTERNATIVE SYSTEM.—The table contained in 

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

18 1986 is amended by inserting after the item relating to 

19 subparagraph (A)(iii) the following new item: 

‘‘(A)(iv) .............................................................................................. 7’’. 

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

21 this section shall apply to property placed in service after 

22 the date of the enactment of this Act, in taxable years 

23 ending after such date. 

Æ 


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