I 

111TH CONGRESS 

2D SESSION H. R. 5644 

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

for large oil companies. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 30, 2010 

Mr. BLUMENAUER (for himself, Mr. HOLT, Mr. QUIGLEY, Ms. LEE of California, Mr. HINCHEY, Mr. WELCH, Ms. SCHAKOWSKY, Mr. MORAN of 

Virginia, Ms. GIFFORDS, Ms. PINGREE of Maine, Mr. CARNAHAN, Mr. 

COHEN, Mr. TONKO, Mr. POLIS of Colorado, and Mr. MCDERMOTT) 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 large 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 Big Oil Tax Sub5 sidies Act of 2010’’. 


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1 SEC. 2. AMORTIZATION OF GEOLOGICAL AND GEO2 PHYSICAL EXPENDITURES. 

3 (a) IN GENERAL.—Subparagraph (A) of section 

4 167(h)(5) of the Internal Revenue Code of 1986 is amend5 ed by striking ‘‘major integrated oil company’’ and insert6 ing ‘‘covered large oil company’’. 

7 (b) COVERED LARGE OIL COMPANY.—Paragraph (5) 

8 of section 167(h) of such Act is amended by redesignating 

9 subparagraph (B) as subparagraph (C) and by inserting 

10 after subparagraph (A) the following new subparagraph: 

11 ‘‘(B) COVERED LARGE OIL COMPANY.— 

12 For purposes of this paragraph, the term ‘cov13 ered large oil company’ means a taxpayer 

14 which— 

15 ‘‘(i) is a major integrated oil com16 pany, or 

17 ‘‘(ii) has gross receipts in excess of 

18 $50,000,000 for the taxable year. 

19 For purposes of clause (ii), all persons treated 

20 as a single employer under subsections (a) and 

21 (b) of section 52 shall be treated as 1 person.’’. 

22 (c) CONFORMING AMENDMENT.—The heading for 

23 paragraph (5) of section 167(h) of such Code is amended 

24 by inserting ‘‘AND OTHER LARGE TAXPAYERS’’. 


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

2 this section shall apply to amounts paid or incurred in tax3 able years beginning after December 31, 2010. 

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

5 (a) IN GENERAL.—Section 45I of the Internal Rev6 enue Code of 1986 is amended by adding at the end the 

7 following new subsection: 

8 ‘‘(e) EXCEPTION FOR TAXPAYER WHO IS NOT

9 SMALL, INDEPENDENT OIL AND GAS COMPANY.— 

10 ‘‘(1) IN GENERAL.—Subsection (a) shall not 

11 apply to any taxpayer which is not a small, inde12 pendent oil and gas company for the taxable year. 

13 ‘‘(2) AGGREGATION RULE.—For purposes of 

14 paragraph (1), all persons treated as a single em15 ployer under subsections (a) and (b) of section 52 

16 shall be treated as 1 person.’’. 

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

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

19 years beginning after December 31, 2010. 

20 SEC. 4. ENHANCED OIL RECOVERY CREDIT. 

21 (a) IN GENERAL.—Section 43 of the Internal Rev22 enue Code of 1986 is amended by adding at the end the 

23 following new subsection: 

24 ‘‘(f) EXCEPTION FOR TAXPAYER WHO IS NOT

25 SMALL, INDEPENDENT OIL AND GAS COMPANY.— 


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1 ‘‘(1) IN GENERAL.—Subsection (a) shall not 

2 apply to any taxpayer which is not a small, inde3 pendent oil and gas company for the taxable year. 

4 ‘‘(2) AGGREGATION RULE.—For purposes of 

5 paragraph (1), all persons treated as a single em6 ployer under subsections (a) and (b) of section 52 

7 shall be treated as 1 person.’’. 

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

9 this section shall apply to amounts paid or incurred in tax10 able years beginning after December 31, 2010. 

11 SEC. 5. INTANGIBLE DRILLING AND DEVELOPMENT COSTS 

12 IN THE CASE OF OIL AND GAS WELLS. 

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

14 the Internal Revenue Code of 1986 is amended by adding 

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

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

17 in any taxable year in which such taxpayer is not a small, 

18 independent oil and gas company, determined by deeming 

19 all persons treated as a single employer under subsections 

20 (a) and (b) of section 52 as 1 person.’’. 

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

22 this section shall apply to amounts paid or incurred in tax23 able years beginning after December 31, 2010. 


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1 SEC. 6. PERCENTAGE DEPLETION. 

2 (a) IN GENERAL.—Section 613A of the Internal Rev3 enue Code of 1986 is amended by adding at the end the 

4 following new subsection: 

5 ‘‘(f) EXCEPTION FOR TAXPAYER WHO IS NOT

6 SMALL, INDEPENDENT OIL AND GAS COMPANY.— 

7 ‘‘(1) IN GENERAL.—This section and section 

8 611 shall not apply to any taxpayer which is not a 

9 small, independent oil and gas company for the tax10 able year. 

11 ‘‘(2) AGGREGATION RULE.—For purposes of 

12 paragraph (1), all persons treated as a single em13 ployer under subsections (a) and (b) of section 52 

14 shall be treated as 1 person.’’. 

15 (b) CONFORMING AMENDMENT.—Section 613A(c)(1) 

16 of such Code is amended by striking ‘‘subsection (d)’’ and 

17 inserting ‘‘subsections (d) and (f)’’. 

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

19 this section shall apply to taxable years beginning after 

20 December 31, 2010. 

21 SEC. 7. TERTIARY INJECTANTS. 

22 (a) IN GENERAL.—Section 193 of the Internal Rev23 enue Code of 1986 is amended by adding at the end the 

24 following new subsection: 

25 ‘‘(d) EXCEPTION FOR TAXPAYER WHO IS NOT

26 SMALL, INDEPENDENT OIL AND GAS COMPANY.— 


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1 ‘‘(1) IN GENERAL.—Subsection (a) shall not 

2 apply to any taxpayer which is not a small, inde3 pendent oil and gas company for the taxable year. 

4 ‘‘(2) EXCEPTION FOR QUALIFIED CARBON DI5 OXIDE DISPOSED IN SECURE GEOLOGICAL STOR6 AGE.—Paragraph (1) shall not apply in the case of 

7 any qualified tertiary injectant expense paid or in8 curred for any tertiary injectant is qualified carbon 

9 dioxide (as defined in section 45Q(b)) which is dis10 posed of by the taxpayer in secure geological storage 

11 (as defined by section 45Q(d)). 

12 ‘‘(3) AGGREGATION RULE.—For purposes of 

13 paragraph (1), all persons treated as a single em14 ployer under subsections (a) and (b) of section 52 

15 shall be treated as 1 person.’’. 

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

17 this section shall apply to expenses incurred after Decem18 ber 31, 2010. 

19 SEC. 8. PASSIVE ACTIVITY LOSSES AND CREDITS LIMITED. 

20 (a) IN GENERAL.—Paragraph (3) of section 469(c) 

21 of the Internal Revenue Code of 1986 is amended by add22 ing at the end the following: 

23 ‘‘(C) EXCEPTION FOR TAXPAYER WHO IS

24 NOT SMALL, INDEPENDENT OIL AND GAS COM25 PANY.— 


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1 ‘‘(i) IN GENERAL.—Subparagraph (A) 

2 shall not apply to any taxpayer which is 

3 not a small, independent oil and gas com4 pany for the taxable year. 

5 ‘‘(ii) AGGREGATION RULE.—For pur6 poses of clause (i), all persons treated as 

7 a single employer under subsections (a) 

8 and (b) of section 52 shall be treated as 1 

9 person.’’. 

10 SEC. 9. INCOME ATTRIBUTABLE TO DOMESTIC PRODUC11 TION ACTIVITIES. 

12 (a) IN GENERAL.—Section 199 of the Internal Rev13 enue Code of 1986 is amended by adding at the end the 

14 following new subsection: 

15 ‘‘(e) EXCEPTION FOR TAXPAYER WHO IS NOT

16 SMALL, INDEPENDENT OIL AND GAS COMPANY.—Sub17 section (a) shall not apply to the income derived from the 

18 production, transportation, or distribution of oil, natural 

19 gas, or any primary product (within the meaning of sub20 section (d)(9)) thereof by any taxpayer which for the tax21 able year is an oil and gas company which is not a small, 

22 independent oil and gas company.’’. 

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

24 this section shall apply to taxable years beginning after 

25 December 31, 2010. 


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1 SEC. 10. PROHIBITION ON USING LAST IN, FIRST-OUT AC2 COUNTING FOR MAJOR INTEGRATED OIL 

3 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) MAJOR INTEGRATED OIL COMPANIES.—Not8 withstanding any other provision of this section, a major 

9 integrated oil company (as defined in section 167(h)) may 

10 not use the method provided in subsection (b) in 

11 inventorying of any goods.’’. 

12 (b) EFFECTIVE DATE AND SPECIAL RULE.— 

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

14 subsection (a) shall apply to taxable years beginning 

15 after December 31, 2010. 

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

17 the case of any taxpayer required by the amendment 

18 made by this section to change its method of ac19 counting for its first taxable year beginning after the 

20 date of the enactment of this Act— 

21 (A) such change shall be treated as initi22 ated by the taxpayer, 

23 (B) such change shall be treated as made 

24 with the consent of the Secretary of the Treas25 ury, and 


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1 (C) the net amount of the adjustments re2 quired to be taken into account by the taxpayer 

3 under section 481 of the Internal Revenue Code 

4 of 1986 shall be taken into account ratably over 

5 a period (not greater than 8 taxable years) be6 ginning with such first taxable year. 

7 SEC. 11. NO EXPENSING FOR REFINERIES PROCESSING LIQ8 UID FUEL FROM TAR SANDS, SHALE, OR 

9 COAL. 

10 (a) IN GENERAL.—Subsection (f) of section 179C of 

11 the Internal Revenue Code of 1986 is amended by striking 

12 ‘‘or’’ at the end of paragraph (1), by striking the period 

13 at the end of paragraph (2) and inserting ‘‘, or’’, and by 

14 inserting after paragraph (2) the following new paragraph: 

15 ‘‘(3) which is used to process liquid fuel from 

16 tar sands, shale, or coal (including lignite).’’. 

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

18 subsection (a) shall apply to taxable years beginning after 

19 December 31, 2010. 

Æ 


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