or incurred after the date of the enactment of
this Act.
(B) TRANSITION
RULE.—In the case of
any payments described in section 263(k) of the
Internal Revenue Code of 1986, as added by
this subsection, which were made or incurred on
or before the date of the enactment of this Act,
the taxpayer may elect, at such time and in
such manner as the Secretary of the Treasury
may prescribe, to amortize the suspended por-
tion of such payments over the 36-month period
beginning with the month in which the date of
the enactment of this Act occurs. For purposes
of this subparagraph, the suspended portion of
any payment is that portion of such payment
which, as of the first day of the 36-month pe-
riod, has not been included in the cost of a
property or otherwise deducted.
TITLE II—INDEPENDENT OIL
AND GAS PRODUCERS
SEC. 201. 5-YEAR NET OPERATING LOSS CARRYBACK FOR
LOSSES ATTRIBUTABLE TO OPERATING MIN-
ERAL INTERESTS OF INDEPENDENT OIL AND
GAS PRODUCERS.
(a) IN GENERAL.—Paragraph (1) of section 172(b)
of the Internal Revenue Code of 1986 (relating to years
to which loss may be carried) is amended by adding at
the end the following new subparagraph:
‘‘(H) LOSSES ON OPERATING MINERAL IN-
TERESTS OF INDEPENDENT OIL AND GAS PRO-
DUCERS.—In the case of a taxpayer—
‘‘(i) which has an eligible oil and gas
loss (as defined in subsection (j)) for a tax-
able year, and
‘‘(ii) which is not an integrated oil
company (as defined in section 291(b)(4)),
such eligible oil and gas loss shall be a net
operating loss carryback to each of the 5
taxable years preceding the taxable year of
such loss.’’.
(b) ELIGIBLE OIL AND GAS LOSS.—Section 172 of
such Code is amended by redesignating subsection (j) as
subsection (k) and by inserting after subsection (i) the fol-
lowing new subsection:
‘‘(j) ELIGIBLE OIL AND GAS LOSS.—For purposes of
this section—
‘‘(1) IN GENERAL.—The term ‘eligible oil and
gas loss’ means the lesser of—
‘‘(A) the amount which would be the net
operating loss for the taxable year if only in-
come and deductions attributable to operating
mineral interests (as defined in section 614(d))
in oil and gas wells are taken into account, or
‘‘(B) the amount of the net operating loss
for such taxable year.
‘‘(2) 
COORDINATION
WITH
SUBSECTION
(b)(2).—For purposes of applying subsection (b)(2),
an eligible oil and gas loss for any taxable year shall
be treated in a manner similar to the manner in
which a specified liability loss is treated.
‘‘(3) ELECTION.—Any taxpayer entitled to a 5-
year carryback under subsection (b)(1)(H) from any
loss year may elect to have the carryback period
with respect to such loss year determined without re-
gard to subsection (b)(1)(H).’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to net operating losses for taxable
years beginning after December 31, 2000.
SEC. 202. TEMPORARY SUSPENSION OF LIMITATION BASED
ON 65 PERCENT OF TAXABLE INCOME AND
EXTENSION OF SUSPENSION OF TAXABLE IN-
COME LIMIT WITH RESPECT TO MARGINAL
PRODUCTION.
(a) LIMITATION BASED ON 65 PERCENT OF TAX-
ABLE INCOME.—Subsection (d) of section 613A of the In-
ternal Revenue Code of 1986 (relating to limitation on
percentage depletion in case of oil and gas wells) is amend-
ed by adding at the end the following new paragraph:
‘‘(6) TEMPORARY SUSPENSION OF TAXABLE IN-
COME LIMIT.—Paragraph (1) shall not apply to tax-
able years beginning after December 31, 2000, and
before January 1, 2007, including with respect to
amounts carried under the second sentence of para-
graph (1) to such taxable years.’’.
(b) EXTENSION OF SUSPENSION OF TAXABLE IN-
COME LIMIT WITH RESPECT
TO MARGINAL PRODUC-
TION.—Subparagraph (H) of section 613A(c)(6) of such
Code (relating to temporary suspension of taxable income
limit with respect to marginal production) is amended by
striking ‘‘2002’’ and inserting ‘‘2007’’.
(c) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 2000.
SEC. 203. DETERMINATION OF SMALL REFINER EXCEPTION
TO OIL DEPLETION DEDUCTION.
(a) IN GENERAL.—Paragraph (4) of section 613A(d)
of the Internal Revenue Code (relating to certain refiners
excluded) is amended to read as follows:
‘‘(4) CERTAIN
REFINERS
EXCLUDED.—If the
taxpayer or a related person engages in the refining
of crude oil, subsection (c) shall not apply to the
taxpayer for a taxable year if the average daily refin-
ery runs of the taxpayer and the related person for
the taxable year exceed 50,000 barrels. For purposes
of this paragraph, 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.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
December 31, 2000.