End Oil and Gas Tax Subsidies Act of 2023

Subjects: Taxation

Summary:  <p><strong>End Oil and Gas Tax Subsidies Act of 2023</strong></p> <p>This bill limits or repeals certain fossil fuel oil and gas subsidies for oil companies. Specifically, it</p> <ul> <li>increases to seven years the amortization period for geological and geophysical expenditures; </li> <li>repeals the tax credits for producing oil and gas from marginal wells and for enhanced oil recovery;</li> <li>repeals the tax deduction for the intangible drilling and development costs of oil and gas wells; </li> <li>repeals percentage depletion;</li> <li>repeals the tax deduction for tertiary injectant expenses; </li> <li>repeals the passive loss exception for working interests in oil and gas property; </li> <li>denies the tax deduction for income attributable to domestic production activities for oil and gas activities; </li> <li>prohibits the use of the last-in, first-out (LIFO) accounting method by major integrated oil companies;</li> <li>limits the foreign tax credit for dual capacity taxpayers (i.e., taxpayers who are subject to a levy of a foreign country or U.S. possession and receive specific economic benefits from such country or possession); and </li> <li>expands the definition of <i>crude oil</i> for purposes of the excise tax on petroleum and petroleum products to include any oil derived from a bitumen or bituminous mixture (tar sands), and any oil derived from kerogen-bearing sources (oil shale).</li> </ul>

<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1483 Introduced in House (IH)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                H. R. 1483

   To amend the Internal Revenue Code of 1986 to repeal fossil fuel 
          subsidies for oil companies, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 9, 2023

Mr. Blumenauer (for himself, Mr. Casten, and Ms. Porter) 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, and for other purposes.

    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 ``End Oil and Gas Tax Subsidies Act of 
2023''.

SEC. 2. AMORTIZATION OF 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'' in paragraph (1) and 
        inserting ``7-year period'', and
            (2) by striking paragraph (5).
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred in taxable years beginning after December 
31, 2022.

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

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by striking section 45I 
(and by striking the item relating to such section in the table of 
sections for such subpart).
    (b) Conforming Amendment.--Section 38(b) of such Code is amended by 
striking paragraph (19).
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to credits determined for taxable years beginning after December 
31, 2022.

SEC. 4. ENHANCED OIL RECOVERY CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by striking section 43 
(and by striking the item relating to such section in the table of 
sections for such subpart).
    (b) Conforming Amendment.--Section 38(b) of such Code is amended by 
striking paragraph (6).
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after 
December 31, 2022.

SEC. 5. INTANGIBLE DRILLING AND DEVELOPMENT COSTS IN THE CASE OF OIL 
              AND GAS WELLS.

    (a) In General.--Subsection (c) of section 263 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
sentence: ``This subsection shall not apply to amounts paid or incurred 
by a taxpayer with respect to an oil or gas well after December 31, 
2022.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred in taxable years beginning after December 
31, 2022.

SEC. 6. REPEAL OF PERCENTAGE DEPLETION FOR OIL AND GAS WELLS.

    (a) In General.--Part I of subchapter I of chapter 1 of the 
Internal Revenue Code of 1986 is amended by striking section 613A (and 
the table of sections of such part is amended by striking the item 
relating to such section).
    (b) Conforming Amendments.--
            (1) Subsection (d) of section 45H of such Code is amended--
                    (A) by striking ``For purposes of this section'' 
                and inserting the following:
            ``(1) In general.--For purposes of this section'',
                    (B) by striking ``(within the meaning of section 
                613A(d)(3))'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(2) Related person.--For purposes of this subsection, a 
        person is a related person with respect to the taxpayer if a 
        significant ownership interest in either the taxpayer or such 
        person is held by the other, or if a third person has a 
        significant ownership interest in both the taxpayer and such 
        person. For purposes of the preceding sentence, the term 
        `significant ownership interest' means--
                    ``(A) with respect to any corporation, 5 percent or 
                more in value of the outstanding stock of such 
                corporation,
                    ``(B) with respect to a partnership, 5 percent or 
                more interest in the profits or capital of such 
                partnership, and
                    ``(C) with respect to an estate or trust, 5 percent 
                or more of the beneficial interests in such estate or 
                trust.
        For purposes of determining a significant ownership interest, 
        an interest owned by or for a corporation, partnership, trust, 
        or estate shall be considered as owned directly both by itself 
        and proportionately by its shareholders, partners, or 
        beneficiaries, as the case may be.''.
            (2) Section 57(a)(1) of such Code is amended by striking 
        the last sentence.
            (3) Section 291(b)(4) of such Code is amended by adding at 
        the end the following: ``Any reference in the preceding 
        sentence to section 613A shall be treated as a reference to 
        such section as in effect prior to the date of the enactment of 
        the End Oil and Gas Tax Subsidies Act of 2023.''.
            (4) Section 613(d) of such Code is amended by striking 
        ``Except as provided in section 613A, in the case of'' and 
        inserting ``In the case of''.
            (5) Section 613(e) of such Code is amended--
                    (A) by striking ``or section 613A'' in paragraph 
                (2), and
                    (B) by striking ``any amount described in section 
                613A(d)(5)'' in paragraph (3) and inserting ``any lease 
                bonus, advance royalty, or other amount payable without 
                regard to production from property''.
            (6) Section 705(a) of such Code is amended--
                    (A) by inserting ``and'' at the end of paragraph 
                (1)(C),
                    (B) by striking ``; and'' at the end of paragraph 
                (2)(B) and inserting a period, and
                    (C) by striking paragraph (3).
            (7) Section 993(c)(2)(C) of such Code is amended by 
        striking ``section 613 or 613A'' and inserting ``section 613 
        (determined without regard to subsection (d) thereof)''.
            (8) Section 1202(e)(3)(D) of such Code is amended by 
        striking ``section 613 or 613A'' and inserting ``section 613 
        (determined without regard to subsection (d) thereof)''.
            (9) Section 1367(a)(2) of such Code is amended by inserting 
        ``and'' at the end of subparagraph (C), by striking ``, and'' 
        at the end of subparagraph (D) and inserting a period, and by 
        striking subparagraph (E).
            (10) Section 1446(c) of such Code is amended by striking 
        paragraph (2) and by redesignating paragraph (3) as paragraph 
        (2).
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2022.

SEC. 7. REPEAL OF DEDUCTION FOR TERTIARY INJECTANTS.

    (a) In General.--Part VI of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by striking section 193 (and 
the table of sections of such subpart is amended by striking the item 
relating to such section).
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2022.

SEC. 8. REPEAL OF EXCEPTION TO PASSIVE LOSS LIMITATIONS FOR WORKING 
              INTERESTS IN OIL AND GAS PROPERTIES.

    (a) In General.--Section 469(c)(3) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
                    ``(C) Termination.--Subparagraph (A) shall not 
                apply with respect to any taxable year beginning after 
                the date of the enactment of this Act.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2022.

SEC. 9. DEDUCTION FOR QUALIFIED BUSINESS INCOME NOT ALLOWED WITH 
              RESPECT TO OIL AND GAS ACTIVITIES.

    (a) In General.--Section 199A(c)(3)(B) of the Internal Revenue Code 
of 1986 is amended by redesignating clause (vii) as clause (viii), and 
by inserting after clause (vi) the following new clause:
                            ``(vii) The production, refining, 
                        processing, transportation, or distribution of 
                        oil, gas, or any primary product thereof.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2022.

SEC. 10. PROHIBITION ON USING LAST-IN, FIRST-OUT ACCOUNTING FOR OIL AND 
              GAS 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) Oil and Gas Companies.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section, a major integrated oil company may not use the 
        method provided in subsection (b) in inventorying of any goods.
            ``(2) Major integrated oil company.--For purposes of this 
        subsection, the term `major integrated oil company' means, with 
        respect to any taxable year, a producer of crude oil--
                    ``(A) which has an average daily worldwide 
                production of crude oil of at least 500,000 barrels for 
                the taxable year,
                    ``(B) which has gross receipts in excess of 
                $1,000,000,000 for the taxable year, and
                    ``(C) the average daily refinery runs of the 
                taxpayer and related persons for the taxable year 
                exceed 75,000 barrels.
            ``(3) Special rules.--
                    ``(A) Crude production and gross receipts.--For 
                purposes of subparagraphs (A) and (B) of paragraph 
                (2)--
                            ``(i) Controlled groups and common 
                        control.--All persons treated as a single 
                        employer under subsections (a) and (b) of 
                        section 52 shall be treated as 1 person.
                            ``(ii) Short taxable years.--In case of a 
                        short taxable year, the rule under section 
                        448(c)(3)(B) shall apply.
                    ``(B) Average daily refinery runs.--For purposes of 
                paragraph (2)(C)--
                            ``(i) In general.--The average daily 
                        refinery runs for any taxable year shall be 
                        determined by dividing the aggregate refinery 
                        runs for the taxable year by the number of days 
                        in the taxable year.
                            ``(ii) Related persons.--A person is a 
                        related person with respect to the taxpayer if 
                        a significant ownership interest in either the 
                        taxpayer or such person is held by the other, 
                        or if a third person has a significant 
                        ownership interest in both the taxpayer and 
                        such person.
                            ``(iii) Significant ownership interest.--
                        For purposes of clause (ii), the term 
                        `significant ownership interest' means--
                                    ``(I) with respect to any 
                                corporation, 15 percent or more in 
                                value of the outstanding stock of such 
                                corporation,
                                    ``(II) with respect to a 
                                partnership, 15 percent or more 
                                interest in the profits or capital of 
                                such partnership, and
                                    ``(III) with respect to an estate 
                                or trust, 15 percent or more of the 
                                beneficial interests in such estate or 
                                trust.
                        For purposes of determining a significant 
                        ownership interest, an interest owned by or for 
                        a corporation, partnership, trust, or estate 
                        shall be considered as owned directly both by 
                        itself and proportionately by its shareholders, 
                        partners, or beneficiaries, as the case may 
                        be.''.
    (b) Effective Date and Special Rule.--
            (1) In general.--The amendment made by subsection (a) shall 
        apply to taxable years beginning after December 31, 2022.
            (2) Change in method of accounting.--In the case of any 
        taxpayer required by the amendment made by this section to 
        change its method of accounting for its first taxable year 
        beginning after the date of the enactment of this Act--
                    (A) such change shall be treated as initiated by 
                the taxpayer,
                    (B) such change shall be treated as made with the 
                consent of the Secretary of the Treasury, and
                    (C) the net amount of the adjustments required to 
                be taken into account by the taxpayer under section 481 
                of the Internal Revenue Code of 1986 shall be taken 
                into account ratably over a period (not greater than 8 
                taxable years) beginning with such first taxable year.

SEC. 11. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO 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 Dual Capacity Taxpayers.--
            ``(1) General rule.--Notwithstanding any other provision of 
        this chapter, any amount paid or accrued by a dual capacity 
        taxpayer to a foreign country or possession of the United 
        States for any period with respect to combined foreign oil and 
        gas income (as defined in section 907(b)(1)) shall not be 
        considered a tax to the extent such amount exceeds the amount 
        (determined in accordance with regulations) which would have 
        been required to be paid if the taxpayer were not a dual 
        capacity taxpayer.
            ``(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.''.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxes paid or accrued in taxable years beginning after 
        December 31, 2022.
            (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. 12. CLARIFICATION OF TAR SANDS AS CRUDE OIL FOR EXCISE TAX 
              PURPOSES.

    (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.--The term `crude oil' includes crude oil 
        condensates, natural gasoline, any bitumen or bituminous 
        mixture, any oil derived from a bitumen or bituminous mixture 
        (including oil derived from tar sands), and any oil derived 
        from kerogen-bearing sources (including oil derived from oil 
        shale).''.
    (b) Regulatory Authority To Address Other Types of Crude Oil and 
Petroleum Products.--Subsection (a) of section 4612 of such Code is 
amended by adding at the end the following new paragraph:
            ``(10) Regulatory authority to address other types of crude 
        oil and petroleum products.--Under such regulations as the 
        Secretary may prescribe, the Secretary may include as crude oil 
        or as a petroleum product subject to tax under section 4611, 
        any fuel feedstock or finished fuel product customarily 
        transported by pipeline, vessel, railcar, or tanker truck if 
        the Secretary determines that--
                    ``(A) the classification of such fuel feedstock or 
                finished fuel product is consistent with the definition 
                of oil under the Oil Pollution Act of 1990, and
                    ``(B) such fuel feedstock or finished fuel product 
                is produced in sufficient commercial quantities as to 
                pose a significant risk of hazard in the event of a 
                discharge.''.
    (c) Technical Amendment.--Paragraph (2) of section 4612(a) of such 
Code is amended by striking ``from a well located''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
                                 &lt;all&gt;
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