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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 329 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                 S. 329

 To eliminate certain fuel subsidies and to amend the Internal Revenue 
         Code of 1986 to extend certain energy tax incentives.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           February 14, 2013

  Mr. Sanders introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
 To eliminate certain fuel subsidies and to amend the Internal Revenue 
         Code of 1986 to extend certain energy tax incentives.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Sustainable Energy Act''.

                 TITLE I--ELIMINATION OF FUEL SUBSIDIES

SEC. 101. FINDINGS.

    Congress finds that--
            (1) President Obama joined other world leaders from the 
        Group of Twenty in pledging to phase out wasteful fossil-fuel 
        subsidies;
            (2) the Environmental Law Institute found that from 2002 
        through 2008, Federal fossil-fuel subsidies in the United 
        States totaled over $72,000,000,000, while Federal renewable-
        energy investments totaled $12,200,000,000;
            (3) the Congressional Research Service estimates that from 
        1948 to the present, United States investments in fossil-fuel 
        research and development totaled over $48,000,000,000 (in 2011 
        dollars), while investments in renewable energy totaled over 
        $22,000,000,000;
            (4) the 5 largest oil corporations have made more than 
        $1,000,000,000 in profits in the decade prior to the date of 
        enactment of this Act; and
            (5) United States taxpayers should not be subsidizing oil, 
        natural gas, and coal companies in a period of record debt.

SEC. 102. ROYALTY RELIEF.

    (a) In General.--
            (1) Outer continental shelf lands act.--Section 8(a)(3) of 
        the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)) is 
        amended--
                    (A) by striking subparagraph (B); and
                    (B) by redesignating subparagraph (C) as 
                subparagraph (B).
            (2) Energy policy act of 2005.--
                    (A) Incentives for natural gas production from deep 
                wells in the shallow waters of the gulf of mexico.--
                Section 344 of the Energy Policy Act of 2005 (42 U.S.C. 
                15904) is repealed.
                    (B) Deep water production.--Section 345 of the 
                Energy Policy Act of 2005 (42 U.S.C. 15905) is 
                repealed.
    (b) Future Provisions.--Notwithstanding any other provision of law 
(including regulations), royalty relief shall not be permitted under a 
lease issued under section 8 of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1337).

SEC. 103. ROYALTIES UNDER MINERAL LEASING ACT.

    (a) Coal Leases.--Section 7(a) of the Mineral Leasing Act (30 
U.S.C. 207(a)) is amended by striking ``12\1/2\'' and inserting ``18\3/
4\''.
    (b) Leases on Land on Which Oil or Natural Gas Is Discovered.--
Section 14 of the Mineral Leasing Act (30 U.S.C. 223) is amended by 
striking ``12\1/2\'' and inserting ``18\3/4\''.
    (c) Leases on Land Known or Believed To Contain Oil or Natural 
Gas.--Section 17 of the Mineral Leasing Act (30 U.S.C. 226) is 
amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)(A), by striking ``12.5'' and 
                inserting ``18\3/4\''; and
                    (B) in paragraph (2)(A)(ii), by striking ``12\1/
                2\'' and inserting ``18\3/4\'';
            (2) in subsection (c)(1), by striking ``12.5'' and 
        inserting ``18\3/4\'';
            (3) in subsection (l), by striking ``12\1/2\'' each time it 
        appears and inserting ``18\3/4\''; and
            (4) in subsection (n)(1)(C), by striking ``12\1/2\'' and 
        inserting ``18\3/4\''.

SEC. 104. ULTRA-DEEPWATER AND UNCONVENTIONAL NATURAL GAS AND OTHER 
              PETROLEUM RESOURCES.

    Subtitle J of title IX of the Energy Policy Act of 2005 (42 U.S.C. 
16371 et seq.) is repealed.

SEC. 105. REMOVAL OF LIMITS ON LIABILITY FOR OFFSHORE FACILITIES AND 
              PIPELINE OPERATORS.

    Section 1004(a) of the Oil Pollution Act of 1990 (33 U.S.C. 
2704(a)) is amended--
            (1) in paragraph (3), by striking ``plus $75,000,000; and'' 
        and inserting ``and the liability of the responsible party 
        under section 1002;'';
            (2) in paragraph (4)--
                    (A) by inserting ``(except an onshore pipeline 
                transporting diluted bitumen, bituminous mixtures, or 
                any oil manufactured from bitumen)'' after ``for any 
                onshore facility''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following:
            ``(5) for any onshore facility transporting diluted 
        bitumen, bituminous mixtures, or any oil manufactured from 
        bitumen, the liability of the responsible party under section 
        1002.''.

SEC. 106. FUNDS TO WORLD BANK FOR FINANCING PROJECTS THAT SUPPORT COAL, 
              OIL, OR NATURAL GAS.

    (a) Rescission of Funds.--Effective on the date of enactment of 
this Act, there are rescinded all unobligated balances of the amounts 
made available to the International Bank for Reconstruction and 
Development and the International Development Association (commonly 
known as the ``World Bank''), and each other similar international 
financing entity that has received amounts from the United States, as 
determined by the Secretary of the Treasury, to carry out any project 
that supports coal, oil, or natural gas.
    (b) Future Funds.--Notwithstanding any other provision of law, any 
amounts made available to the World Bank or any other international 
financing entity shall not be used to carry out any project that 
supports coal, oil, or natural gas.

SEC. 107. OFFICE OF FOSSIL ENERGY RESEARCH AND DEVELOPMENT.

    (a) In General.--Section 203(a)(2) of the Department of Energy 
Organization Act (42 U.S.C. 7133(a)(2)) is amended--
            (1) in subparagraph (C), by inserting ``and'' after the 
        semicolon at the end;
            (2) by striking subparagraph (D); and
            (3) by redesignating subparagraph (E) as subparagraph (D).
    (b) Termination.--Notwithstanding any other provision of law, the 
Office of Fossil Energy Research and Development and the authority to 
carry out any program or activity of the Office (as in existence on the 
day before the date of enactment of this Act) is terminated.

SEC. 108. ADVANCED RESEARCH PROJECTS AGENCY--ENERGY.

    None of the funds made available to the Advanced Research Projects 
Agency--Energy shall be used to carry out any project that supports 
coal, oil, or natural gas.

SEC. 109. INCENTIVES FOR INNOVATIVE TECHNOLOGIES.

    (a) In General.--Section 1703 of the Energy Policy Act of 2005 (42 
U.S.C. 16513) is amended--
            (1) in subsection (b)--
                    (A) by striking paragraph (2);
                    (B) by striking paragraph (10); and
                    (C) by redesignating paragraphs (3) through (9) as 
                paragraphs (2) through (8) respectively;
            (2) by striking subsection (c); and
            (3) by redesignating subsections (d) and (e) as paragraphs 
        (c) and (d) respectively.
    (b) Conforming Amendment.--Section 1704 of the Energy Policy Act of 
2005 (42 U.S.C. 16514) is amended--
            (1) in subsection (a), by striking ``(a) In General.--''; 
        and
            (2) by striking subsection (b).

SEC. 110. RURAL UTILITY SERVICE LOAN GUARANTEES.

    The Secretary of Agriculture shall not make a loan under title III 
of the Rural Electrification Act of 1936 (7 U.S.C. 931 et seq.) to an 
applicant for the purpose of carrying out any project that will use 
coal, oil, or natural gas. Nothing in this section shall be construed 
to affect the eligibility for landfill gas and agricultural methane 
digesters for loans under such Act.

SEC. 111. FUNDS TO THE OVERSEAS PRIVATE INVESTMENT CORPORATION OR THE 
              EXPORT-IMPORT BANK OF THE UNITED STATES FOR FINANCING 
              PROJECTS, TRANSACTIONS, OR OTHER ACTIVITIES THAT SUPPORT 
              COAL, OIL, OR NATURAL GAS.

    (a) Rescission of Funds.--Effective on the date of enactment of 
this Act, there are rescinded all unobligated balances of the amounts 
made available to the Overseas Private Investment Corporation or the 
Export-Import Bank of the United States to carry out any project, 
transaction, or other activity that supports coal, oil, or natural gas 
production.
    (b) Future Funds.--Notwithstanding any other provision of law, any 
amounts made available to the Overseas Private Investment Corporation 
or the Export-Import Bank of the United States shall not be used to 
carry out any project, transaction, or other activity that supports 
coal, oil, or natural gas production.

SEC. 112. TRANSPORTATION FUNDS FOR GRANTS, LOANS, LOAN GUARANTEES, AND 
              OTHER DIRECT ASSISTANCE.

    Notwithstanding any other provision of law, any amounts made 
available to the Department of Transportation (including the Federal 
Railroad Administration) shall not be used to award any grant, loan, 
loan guarantee, or provide any other direct assistance to any rail or 
port project that transports coal, oil, or natural gas.

SEC. 113. TERMINATION OF VARIOUS TAX EXPENDITURES RELATING TO FOSSIL 
              FUELS.

    (a) In General.--Subchapter C of chapter 90 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new section:

``SEC. 7875. TERMINATION OF CERTAIN PROVISIONS RELATING TO FOSSIL FUEL 
              INCENTIVES.

    ``(a) In General.--The following provisions shall not apply to 
taxable years beginning after the date of the enactment of the 
Sustainable Energy Act:
            ``(1) Section 43 (relating to enhanced oil recovery 
        credit).
            ``(2) Section 45I (relating to credit for producing oil and 
        natural gas from marginal wells).
            ``(3) Section 45K (relating to credit for producing fuel 
        from a nonconventional source).
            ``(4) Section 193 (relating to tertiary injectants).
            ``(5) Section 199(d)(9) (relating to special rule for 
        taxpayers with oil related qualified production activities 
        income).
            ``(6) Section 461(i)(2) (relating to special rule for 
        spudding of oil or natural gas wells).
            ``(7) Section 469(c)(3) (relating to working interests in 
        oil and natural gas property).
            ``(8) Section 613A (relating to limitations on percentage 
        depletion in case of oil and natural gas wells).
            ``(9) Section 617 (relating to deduction and recapture of 
        certain mining exploration expenditures).
            ``(10) Section 7704(d)(1)(E) (relating to qualifying 
        income).
    ``(b) Provisions Relating to Property.--The following provisions 
shall not apply to property placed in service after the date of the 
enactment of the Sustainable Energy Act:
            ``(1) Subparagraphs (C)(iii) and (E)(viii) of section 
        168(e)(3) (relating to classification of certain property).
            ``(2) Section 169 (relating to amortization of pollution 
        control facilities) with respect to any atmospheric pollution 
        control facility.
            ``(3) Section 179C (relating to election to expense certain 
        refineries).
    ``(c) Provisions Relating to Costs and Expenses.--The following 
provisions shall not apply to costs or expenses paid or incurred after 
the date of the enactment of the Sustainable Energy Act:
            ``(1) Section 179B (relating to deduction for capital costs 
        incurred in complying with Environmental Protection Agency 
        sulfur regulations).
            ``(2) Section 198 (relating to expensing of environmental 
        remediation costs).
            ``(3) Section 263(c) (relating to intangible drilling and 
        development costs) with respect to costs in the case of oil and 
        natural gas wells.
            ``(4) Section 468 (relating to special rules for mining and 
        solid waste reclamation and closing costs).
    ``(d) 5-Year Carryback for Marginal Oil and Natural Gas Well 
Production Credit.--Section 39(a)(3) (relating to 5-year carryback for 
marginal oil and natural gas well production credit) shall not apply to 
credits determined in taxable years beginning after the date of the 
enactment of the Sustainable Energy Act.
    ``(e) Credit for Carbon Dioxide Sequestration.--Section 45Q 
(relating to credit for carbon dioxide sequestration) shall not apply 
to carbon dioxide captured after the date of the enactment of the 
Sustainable Energy Act.
    ``(f) Allocated Credits.--No new credits shall be certified under 
section 48A (relating to qualifying advanced coal project credit) or 
section 48B (relating to qualifying gasification project credit) after 
the date of the enactment of the Sustainable Energy Act.
    ``(g) Arbitrage Bonds.--Section 148(b)(4) (relating to safe harbor 
for prepaid natural gas) shall not apply to obligations issued after 
the date of the enactment of the Sustainable Energy Act.''.
    (b) Conforming Amendment.--The table of sections for subchapter C 
of chapter 90 is amended by adding at the end the following new item:

``Sec. 7875. Termination of certain provisions.''.

SEC. 114. TERMINATION OF ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY 
              CREDIT WITH RESPECT TO FOSSIL FUELS.

    (a) In General.--Paragraph (2) of section 30C(c) of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking ``, natural gas, compressed natural gas, 
        liquefied natural gas, liquefied petroleum gas,'' in 
        subparagraph (A),
            (2) by striking subparagraph (B), and
            (3) by redesignating subparagraph (C) as subparagraph (B).
    (b) Technical Amendment.--Paragraph (2) of section 30C(g) of the 
Internal Revenue Code of 1986 is amended by striking the second period.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

SEC. 115. UNIFORM SEVEN-YEAR AMORTIZATION FOR GEOLOGICAL AND 
              GEOPHYSICAL EXPENDITURES.

    (a) In General.--Section 167(h) of the Internal Revenue Code of 
1986 is amended--
            (1) by striking ``24-month period'' each place it appears 
        in paragraphs (1) and (4) and inserting ``7-year period'', and
            (2) by striking paragraph (5).
    (b) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act.

SEC. 116. NATURAL GAS GATHERING LINES TREATED AS 15-YEAR PROPERTY.

    (a) In General.--Subparagraph (E) of section 168(e)(3) of the 
Internal Revenue Code of 1986 is amended by striking ``and'' at the end 
of clause (viii), by striking the period at the end of clause (ix) and 
inserting ``, and'', and by adding at the end the following new clause:
                            ``(x) any natural gas gathering line the 
                        original use of which commences with the 
                        taxpayer after the date of the enactment of 
                        this clause.''.
    (b) Alternative System.--The table contained in section 
168(g)(3)(B) of the Internal Revenue Code of 1986 is amended by 
inserting after the item relating to subparagraph (E)(ix) the following 
new item:

``(E)(x)....................................................      22''.
    (c) Conforming Amendment.--Clause (iv) of section 168(e)(3)(C) of 
the Internal Revenue Code of 1986 is amended by inserting after ``April 
11, 2005''.
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to property placed in service on and after the date of 
        the enactment of this Act.
            (2) Exception.--The amendments made by this section shall 
        not apply to any property with respect to which the taxpayer or 
        a related party has entered into a binding contract for the 
        construction thereof on or before the date of the enactment of 
        this Act, or, in the case of self-constructed property, has 
        started construction on or before such date.

SEC. 117. REPEAL OF DOMESTIC MANUFACTURING DEDUCTION FOR HARD MINERAL 
              MINING.

    (a) In General.--Subparagraph (B) of section 199(c)(4) of the 
Internal Revenue Code of 1986 is amended by striking ``and'' at the end 
of clause (ii), by striking the period at the end of clause (iii) and 
inserting ``, and'', and by adding at the end the following new clause:
                            ``(iv) the mining of any hard mineral.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 118. LIMITATION ON DEDUCTION FOR INCOME ATTRIBUTABLE TO DOMESTIC 
              PRODUCTION OF OIL, NATURAL GAS, OR PRIMARY PRODUCTS 
              THEREOF.

    (a) Denial of Deduction.--Paragraph (4) of section 199(c) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new subparagraph:
                    ``(E) Special rule for oil, natural gas, and coal 
                income.--The term `domestic production gross receipts' 
                shall not include gross receipts from the production, 
                refining, processing, transportation, or distribution 
                of oil, natural gas, or coal, or any primary product 
                (within the meaning of subsection (d)(9)) thereof.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 119. TERMINATION OF LAST-IN, FIRST-OUT METHOD OF INVENTORY FOR 
              OIL, NATURAL GAS, AND COAL COMPANIES.

    (a) In General.--Section 472 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(h) Termination for Oil, Natural Gas, and Coal Companies.--
Subsection (a) shall not apply to any taxpayer that is in the trade or 
business of the production, refining, processing, transportation, or 
distribution of oil, natural gas, or coal for any taxable year 
beginning after the date of the enactment of this subsection.''.
    (b) Additional Termination.--Section 473 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
subsection:
    ``(h) Termination for Oil, Natural Gas, and Coal Companies.--This 
section shall not apply to any taxpayer that is in the trade or 
business of the production, refining, processing, transportation, or 
distribution of oil, natural gas, or coal for any taxable year 
beginning after the date of the enactment of this subsection.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 120. REPEAL OF PERCENTAGE DEPLETION FOR COAL AND HARD MINERAL 
              FOSSIL FUELS.

    (a) In General.--Section 613 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(f) Termination With Respect to Coal and Hard Mineral Fossil 
Fuels.--In the case of coal, lignite, and oil shale (other than oil 
shale described in subsection (b)(5)), the allowance for depletion 
shall be computed without reference to this section, for any taxable 
year beginning after the date of the enactment of the Sustainable 
Energy Act.''.
    (b) Conforming Amendments.--
            (1) Coal and lignite.--Section 613(b)(4) of the Internal 
        Revenue Code of 1986 is amended by striking ``coal, lignite,''.
            (2) Oil shale.--Section 613(b)(2) of such Code is amended 
        to read as follows:
            ``(2) 15 percent.--If, from deposits in the United States, 
        gold, silver, copper, and iron ore.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 121. TERMINATION OF CAPITAL GAINS TREATMENT FOR ROYALTIES FROM 
              COAL.

    (a) In General.--Subsection (c) of section 631 of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking ``coal (including lignite), or iron ore'' 
        and inserting ``iron ore'',
            (2) by striking ``coal or iron ore'' each place it appears 
        and inserting ``iron ore'',
            (3) by striking ``iron ore or coal'' each place it appears 
        and inserting ``iron ore'', and
            (4) by striking ``Coal or'' in the heading.
    (b) Conforming Amendment.--The heading of section 631 of the 
Internal Revenue Code of 1986 is amended by striking ``, coal,''.
    (c) Effective Date.--The amendments made by this section shall 
apply to dispositions after the date of the enactment of this Act.

SEC. 122. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO OIL, 
              NATURAL GAS, AND COAL COMPANIES WHICH ARE DUAL CAPACITY 
              TAXPAYERS.

    (a) In General.--Section 901 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (n) as subsection (o) and by 
inserting after subsection (m) the following new subsection:
    ``(n) Special Rules Relating to Oil, Natural Gas, and Coal 
Companies Which Are Dual Capacity Taxpayers.--
            ``(1) General rule.--Notwithstanding any other provision of 
        this chapter, any amount paid or accrued to a foreign country 
        or possession of the United States for any period by a dual 
        capacity taxpayer which is in the trade or business of the 
        production, refining, processing, transportation, or 
        distribution of oil, natural gas, or coal shall not be 
        considered a tax--
                    ``(A) if, for such period, the foreign country or 
                possession does not impose a generally applicable 
                income tax, or
                    ``(B) to the extent such amount exceeds the amount 
                (determined in accordance with regulations) which--
                            ``(i) is paid by such dual capacity 
                        taxpayer pursuant to the generally applicable 
                        income tax imposed by the country or 
                        possession, or
                            ``(ii) would be paid if the generally 
                        applicable income tax imposed by the country or 
                        possession were applicable to such dual 
                        capacity taxpayer.
        Nothing in this paragraph shall be construed to imply the 
        proper treatment of any such amount not in excess of the amount 
        determined under subparagraph (B).
            ``(2) Dual capacity taxpayer.--For purposes of this 
        subsection, the term `dual capacity taxpayer' means, with 
        respect to any foreign country or possession of the United 
        States, a person who--
                    ``(A) is subject to a levy of such country or 
                possession, and
                    ``(B) receives (or will receive) directly or 
                indirectly a specific economic benefit (as determined 
                in accordance with regulations) from such country or 
                possession.
            ``(3) Generally applicable income tax.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `generally applicable 
                income tax' means an income tax (or a series of income 
                taxes) which is generally imposed under the laws of a 
                foreign country or possession on income derived from 
                the conduct of a trade or business within such country 
                or possession.
                    ``(B) Exceptions.--Such term shall not include a 
                tax unless it has substantial application, by its terms 
                and in practice, to--
                            ``(i) persons who are not dual capacity 
                        taxpayers, and
                            ``(ii) persons who are citizens or 
                        residents of the foreign country or 
                        possession.''.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxes paid or accrued in taxable years beginning after 
        the date of the enactment of this Act.
            (2) Contrary treaty obligations upheld.--The amendments 
        made by this section shall not apply to the extent contrary to 
        any treaty obligation of the United States.

SEC. 123. INCREASE IN OIL SPILL LIABILITY TRUST FUND FINANCING RATE.

    (a) In General.--Subparagraph (B) of section 4611(c)(2) of the 
Internal Revenue Code of 1986 is amended to read as follows:
                    ``(B) the Oil Spill Liability Trust Fund financing 
                rate is--
                            ``(i) in the case of crude oil received or 
                        petroleum products entered before January 1, 
                        2014, 8 cents a barrel,
                            ``(ii) in the case of crude oil received or 
                        petroleum products entered after December 31, 
                        2013, and before January 1, 2018, 9 cents a 
                        barrel, and
                            ``(iii) in the case of crude oil received 
                        or petroleum products entered after December 
                        31, 2017, 10 cents a barrel.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to crude oil received and petroleum products entered after the date of 
the enactment of this Act.

SEC. 124. APPLICATION OF CERTAIN ENVIRONMENTAL TAXES TO SYNTHETIC CRUDE 
              OIL.

    (a) In General.--Paragraph (1) of section 4612(a) of the Internal 
Revenue Code of 1986 is amended to read as follows:
            ``(1) Crude oil.--
                    ``(A) In general.--The term `crude oil' includes 
                crude oil condensates, natural gasoline, and synthetic 
                crude oil.
                    ``(B) Synthetic crude oil.--For purposes of 
                subparagraph (A), the term `synthetic crude oil' means 
                any bitumen and bituminous mixtures, any oil 
                manufactured from bitumen and bituminous mixtures, and 
                any liquid fuel manufactured from coal.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to oil and petroleum products received or entered during calendar 
quarters beginning more than 60 days after the date of the enactment of 
this Act.

SEC. 125. DENIAL OF DEDUCTION FOR REMOVAL COSTS AND DAMAGES FOR CERTAIN 
              OIL SPILLS.

    (a) In General.--Part IX of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``SEC. 280I. EXPENSES FOR REMOVAL COSTS AND DAMAGES RELATING TO CERTAIN 
              OIL SPILL LIABILITY.

    ``No deduction shall be allowed under this chapter for any amount 
paid or incurred with respect to any costs or damages for which the 
taxpayer is liable under section 1002 of the Oil Pollution Act of 1990 
(33 U.S.C. 2702).''.
    (b) Clerical Amendment.--The table of sections for part IX of 
subchapter B of chapter 1 of such Code 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.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to any liability arising in taxable years ending 
after the date of the enactment of this Act.

SEC. 126. TAX ON CRUDE OIL AND NATURAL GAS PRODUCED FROM THE OUTER 
              CONTINENTAL SHELF IN THE GULF OF MEXICO.

    (a) In General.--Subtitle E of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new chapter:

 ``CHAPTER 56--TAX ON SEVERANCE OF CRUDE OIL AND NATURAL GAS FROM THE 
             OUTER CONTINENTAL SHELF IN THE GULF OF MEXICO

``Sec. 5896. Imposition of tax.
``Sec. 5897. Taxable crude oil or natural gas and removal price.
``Sec. 5898. Special rules and definitions.

``SEC. 5896. IMPOSITION OF TAX.

    ``(a) In General.--In addition to any other tax imposed under this 
title, there is hereby imposed a tax equal to 13 percent of the removal 
price of any taxable crude oil or natural gas removed from the premises 
during any taxable period.
    ``(b) Credit for Federal Royalties Paid.--
            ``(1) In general.--There shall be allowed as a credit 
        against the tax imposed by subsection (a) with respect to the 
        production of any taxable crude oil or natural gas an amount 
        equal to the aggregate amount of royalties paid under Federal 
        law with respect to such production.
            ``(2) Limitation.--The aggregate amount of credits allowed 
        under paragraph (1) to any taxpayer for any taxable period 
        shall not exceed the amount of tax imposed by subsection (a) 
        for such taxable period.
    ``(c) Tax Paid by Producer.--The tax imposed by this section shall 
be paid by the producer of the taxable crude oil or natural gas.

``SEC. 5897. TAXABLE CRUDE OIL OR NATURAL GAS AND REMOVAL PRICE.

    ``(a) Taxable Crude Oil or Natural Gas.--For purposes of this 
chapter, the term `taxable crude oil or natural gas' means crude oil or 
natural gas which is produced from Federal submerged lands on the outer 
Continental Shelf in the Gulf of Mexico pursuant to a lease entered 
into with the United States which authorizes the production.
    ``(b) Removal Price.--For purposes of this chapter--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `removal price' means--
                    ``(A) in the case of taxable crude oil, the amount 
                for which a barrel of such crude oil is sold, and
                    ``(B) in the case of taxable natural gas, the 
                amount per 1,000 cubic feet for which such natural gas 
                is sold.
            ``(2) Sales between related persons.--In the case of a sale 
        between related persons, the removal price shall not be less 
        than the constructive sales price for purposes of determining 
        gross income from the property under section 613.
            ``(3) Oil or natural gas removed from property before 
        sale.--If crude oil or natural gas is removed from the property 
        before it is sold, the removal price shall be the constructive 
        sales price for purposes of determining gross income from the 
        property under section 613.
            ``(4) Refining begun on property.--If the manufacture or 
        conversion of crude oil into refined products begins before 
        such oil is removed from the property--
                    ``(A) such oil shall be treated as removed on the 
                day such manufacture or conversion begins, and
                    ``(B) the removal price shall be the constructive 
                sales price for purposes of determining gross income 
                from the property under section 613.
            ``(5) Property.--The term `property' has the meaning given 
        such term by section 614.

``SEC. 5898. SPECIAL RULES AND DEFINITIONS.

    ``(a) Administrative Requirements.--
            ``(1) Withholding and deposit of tax.--The Secretary shall 
        provide for the withholding and deposit of the tax imposed 
        under section 5896 on a quarterly basis.
            ``(2) Records and information.--Each taxpayer liable for 
        tax under section 5896 shall keep such records, make such 
        returns, and furnish such information (to the Secretary and to 
        other persons having an interest in the taxable crude oil or 
        natural gas) with respect to such oil as the Secretary may by 
        regulations prescribe.
            ``(3) Taxable periods; return of tax.--
                    ``(A) Taxable period.--Except as provided by the 
                Secretary, each calendar year shall constitute a 
                taxable period.
                    ``(B) Returns.--The Secretary shall provide for the 
                filing, and the time for filing, of the return of the 
                tax imposed under section 5896.
    ``(b) Definitions.--For purposes of this chapter--
            ``(1) Producer.--The term `producer' means the holder of 
        the economic interest with respect to the crude oil or natural 
        gas.
            ``(2) Crude oil.--The term `crude oil' includes crude oil 
        condensates and natural gasoline.
            ``(3) Premises and crude oil product.--The terms `premises' 
        and `crude oil product' have the same meanings as when used for 
        purposes of determining gross income from the property under 
        section 613.
    ``(c) Adjustment of Removal Price.--In determining the removal 
price of oil or natural gas from a property in the case of any 
transaction, the Secretary may adjust the removal price to reflect 
clearly the fair market value of oil or natural gas removed.
    ``(d) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
chapter.''.
    (b) Deductibility of Tax.--The first sentence of section 164(a) is 
amended by inserting after paragraph (6) the following new paragraph:
            ``(7) The tax imposed by section 5896(a) (after application 
        of section 5896(b)) on the severance of crude oil or natural 
        gas from the outer Continental Shelf in the Gulf of Mexico.''.
    (c) Clerical Amendment.--The table of chapters for subtitle E is 
amended by adding at the end the following new item:

                              ``Chapter 56. Tax on severance of crude 
                                        oil and natural gas from the 
                                        outer Continental Shelf in the 
                                        Gulf of Mexico.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to crude oil or natural gas removed after December 31, 2013.

SEC. 127. POWDER RIVER BASIN.

    (a) Designation of the Powder River Basin as a Coal Producing 
Region.--The Director of the Bureau of Land Management shall designate 
the Powder River Basin as a coal producing region.
    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Director of the Bureau of Land Management shall submit to 
Congress a report that includes--
            (1) a study of the fair market value and the amount of 
        royalties paid on coal leases in the Powder River Basin 
        compared to other national and international coal markets; and
            (2) any policy recommendations to capture the future market 
        value of the coal leases in the Powder River Basin.

SEC. 128. REPORTS.

    (a) Definition of Fossil-Fuel Production Subsidy.--In this section, 
the term ``subsidy for fossil-fuel production'' means any direct 
funding, tax treatment or incentive, risk-reduction benefit, financing 
assistance or guarantee, royalty relief, or other provision that 
provides a financial benefit to an oil, natural gas, or coal company 
for the production of fossil fuels.
    (b) Report to Congress.--Not later than 1 year after the date of 
enactment of this Act, the Secretary of the Treasury, in coordination 
with the Secretary of Energy, shall submit to Congress a report 
detailing each Federal law (including regulations), other than those 
amended by this Act, as in effect on the date on which the report is 
submitted, that includes a subsidy for fossil-fuel production.
    (c) Report on Modified Recovery Period.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary, in coordination with the 
        Commissioner of Internal Revenue, shall submit to Congress a 
        report on the applicable recovery period under the accelerated 
        cost recovery system provided in section 168 of the Internal 
        Revenue Code of 1986 for each type of property involved in 
        fossil-fuel production, including pipelines, power generation 
        property, refineries, and drilling equipment, to determine if 
        any assets are receiving a subsidy for fossil-fuel production.
            (2) Elimination of subsidy.--In the case of any type of 
        property that the Commissioner of Internal Revenue determines 
        is receiving a subsidy for fossil-fuel production under such 
        section 168, for property placed in service in taxable years 
        beginning after the date of such determination, such section 
        168 shall not apply. The preceding sentence shall not apply to 
        any property with respect to a taxable year unless such 
        determination is published before the first day of such taxable 
        year.

          TITLE II--EXTENSION OF CERTAIN ENERGY TAX INCENTIVES

SEC. 201. EXTENSION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN 
              RENEWABLE RESOURCES.

    (a) In General.--Subsection (d) of section 45 of the Internal 
Revenue Code of 1986 is amended by striking ``2014'' each place it 
appears in paragraphs (1), (2), (3), (4), (6), (7), (9), and (11) and 
inserting ``2021''.
    (b) Election of Investment Credit in Lieu of Production Credit.--
Clause (ii) of section 48(a)(5)(C) of such Code, as amended by the 
American Taxpayer Relief Act of 2012, is amended by striking ``2014'' 
and inserting ``2021''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 202. EXTENSION OF ENERGY CREDIT.

    (a) Extension.--
            (1) Solar energy property.--
                    (A) Generation of electricity.--Subclause (II) of 
                section 48(a)(2)(A)(i) of the Internal Revenue Code of 
                1986 is amended by striking ``January 1, 2017'' and 
                inserting ``January 1, 2021''.
                    (B) Illumination.--Clause (ii) of section 
                48(a)(3)(A) of such Code is amended by striking 
                ``January 1, 2017'' and inserting ``January 1, 2021''.
            (2) Geothermal heat pump systems.--Clause (vii) of section 
        48(a)(3)(A) of such Code is amended by striking ``January 1, 
        2017'' and inserting ``January 1, 2021''.
            (3) Fuel cell property.--Subparagraph (D) of section 
        48(c)(1) of such Code is amended by striking ``December 31, 
        2016'' and inserting ``December 31, 2020''.
            (4) Qualified microturbine property.--Subparagraph (D) of 
        section 48(c)(2) of such Code is amended by striking ``December 
        31, 2016'' and inserting ``December 31, 2020''.
            (5) Combined heat and power systems.--Clause (iv) of 
        section 48(c)(3)(A) of such Code is amended by striking 
        ``January 1, 2017'' and inserting ``January 1, 2021''.
            (6) Qualified small wind energy property.--Subparagraph (C) 
        of section 48(c)(4) of such Code is amended by striking 
        ``December 31, 2016'' and inserting ``December 31, 2020''.
    (b) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

SEC. 203. EXTENSION AND MODIFICATION OF THE ADVANCED ENERGY PROJECT 
              CREDIT.

    (a) In General.--Subsection (d) of section 48C of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(6) Additional allocations.--
                    ``(A) In general.--Not later than 180 days after 
                the date of the enactment of this paragraph, the 
                Secretary, in consultation with the Secretary of 
                Energy, shall establish a program to consider and award 
                certifications for qualified investments eligible for 
                credits under this section to qualifying advanced 
                energy project sponsors with respect to applications 
                received in calendar years during the 5-year period 
                beginning with the calendar year which includes the 
                date of the enactment of this paragraph.
                    ``(B) Limitation.--The total amount of credits that 
                may be allocated under the program described in 
                subparagraph (A) for any calendar year shall not exceed 
                $2,300,000,000.
                    ``(C) Application of certain rules.--Rules similar 
                to the rules of paragraphs (2), (3), (4), and (5) shall 
                apply for purposes of the program described in 
                subparagraph (A).''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
                                 <all>
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