TITLE I—CLOSE BIG OIL TAX LOOPHOLES 
Sec. 2. Modifications of foreign tax credit rules applicable to major integrated 
oil companies which are dual capacity taxpayers. 
Sec. 3. Limitation on deduction for intangible drilling and development costs; 
amortization of disallowed amounts. 
Sec. 4. Limitation on percentage depletion allowance for oil and gas wells. 
Sec. 5. Limitation on deduction for tertiary injectants. 
Sec. 6. Modification of definition of major integrated oil company. 
TITLE II—TRANSPORTATION BLOCK GRANTS 
Sec. 201. Use of revenue for transportation block grants. 
TITLE I—CLOSE BIG OIL TAX 
LOOPHOLES 
SEC. 2. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 
APPLICABLE TO MAJOR INTEGRATED OIL 
COMPANIES WHICH ARE DUAL CAPACITY 
TAXPAYERS. 
(a) IN GENERAL.—Section 901 of the Internal Rev-
enue 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 MAJOR INTE-
GRATED OIL COMPANIES WHICH ARE DUAL CAPACITY 
TAXPAYERS.— 
‘‘(1) GENERAL
RULE.—Notwithstanding any 
other provision of this chapter, any amount paid or 
accrued by a dual capacity taxpayer which is a 
major integrated oil company (within the meaning of 
section 167(h)(5)) to a foreign country or possession 
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of the United States for any period shall not be con-
sidered a tax— 
‘‘(A) if, for such period, the foreign coun-
try or possession does not impose a generally 
applicable income tax, or 
‘‘(B) to the extent such amount exceeds 
the amount (determined in accordance with reg-
ulations) which— 
‘‘(i) is paid by such dual capacity tax-
payer pursuant to the generally applicable 
income tax imposed by the country or pos-
session, or 
‘‘(ii) would be paid if the generally ap-
plicable 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 subpara-
graph (B). 
‘‘(2) DUAL
CAPACITY
TAXPAYER.—For pur-
poses of this subsection, the term ‘dual capacity tax-
payer’ means, with respect to any foreign country or 
possession of the United States, a person who— 
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‘‘(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 deter-
mined 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 im-
posed 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 applica-
tion, by its terms and in practice, to— 
‘‘(i) persons who are not dual capacity 
taxpayers, and 
‘‘(ii) persons who are citizens or resi-
dents of the foreign country or posses-
sion.’’. 
(b) EFFECTIVE DATE.— 
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(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 enact-
ment 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. 3. LIMITATION ON DEDUCTION FOR INTANGIBLE 
DRILLING AND DEVELOPMENT COSTS; AMOR-
TIZATION OF DISALLOWED AMOUNTS. 
(a) IN GENERAL.—Section 263(c) of the Internal 
Revenue Code of 1986 is amended to read as follows: 
‘‘(c) INTANGIBLE DRILLING
AND DEVELOPMENT 
COSTS IN THE CASE OF OIL AND GAS WELLS AND GEO-
THERMAL WELLS.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(a), and except as provided in subsection (i), regula-
tions shall be prescribed by the Secretary under this 
subtitle corresponding to the regulations which 
granted the option to deduct as expenses intangible 
drilling and development costs in the case of oil and 
gas wells and which were recognized and approved 
by the Congress in House Concurrent Resolution 50, 
Seventy-ninth Congress. Such regulations shall also 
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grant the option to deduct as expenses intangible 
drilling and development costs in the case of wells 
drilled for any geothermal deposit (as defined in sec-
tion 613(e)(2)) to the same extent and in the same 
manner as such expenses are deductible in the case 
of oil and gas wells. This subsection shall not apply 
with respect to any costs to which any deduction is 
allowed under section 59(e) or 291. 
‘‘(2) EXCLUSION.— 
‘‘(A) IN GENERAL.—This subsection shall 
not apply to amounts paid or incurred by a tax-
payer in any taxable year in which such tax-
payer is a major integrated oil company (within 
the meaning of section 167(h)(5)). 
‘‘(B) AMORTIZATION OF AMOUNTS NOT AL-
LOWABLE
AS
DEDUCTIONS
UNDER
SUBPARA-
GRAPH (A).—The amount not allowable as a 
deduction for any taxable year by reason of 
subparagraph (A) shall be allowable as a deduc-
tion ratably over the 60-month period beginning 
with the month in which the costs are paid or 
incurred. For purposes of section 1254, any de-
duction under this subparagraph shall be treat-
ed as a deduction under this subsection.’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts paid or incurred in tax-
able years beginning after December 31, 2021. 
SEC. 4. LIMITATION ON PERCENTAGE DEPLETION ALLOW-
ANCE FOR OIL AND GAS WELLS. 
(a) IN GENERAL.—Section 613A of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(f) APPLICATION WITH RESPECT TO MAJOR INTE-
GRATED OIL COMPANIES.—In the case of any taxable year 
in which the taxpayer is a major integrated oil company 
(within the meaning of section 167(h)(5)), the allowance 
for percentage depletion shall be zero.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
SEC. 
5. 
LIMITATION 
ON 
DEDUCTION 
FOR 
TERTIARY 
INJECTANTS. 
(a) IN GENERAL.—Section 193 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(d) APPLICATION WITH RESPECT TO MAJOR INTE-
GRATED OIL COMPANIES.— 
‘‘(1) IN GENERAL.—This section shall not apply 
to amounts paid or incurred by a taxpayer in any 
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taxable year in which such taxpayer is a major inte-
grated oil company (within the meaning of section 
167(h)(5)). 
‘‘(2) AMORTIZATION OF AMOUNTS NOT ALLOW-
ABLE
AS
DEDUCTIONS
UNDER
PARAGRAPH (1).— 
The amount not allowable as a deduction for any 
taxable year by reason of paragraph (1) shall be al-
lowable as a deduction ratably over the 60-month 
period beginning with the month in which the costs 
are paid or incurred.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts paid or incurred in tax-
able years beginning after December 31, 2021. 
SEC. 6. MODIFICATION OF DEFINITION OF MAJOR INTE-
GRATED OIL COMPANY. 
(a) IN GENERAL.—Section 167(h)(5) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
‘‘(C) CERTAIN
SUCCESSORS
IN
INTER-
EST.—For purposes of this paragraph, the term 
‘major integrated oil company’ includes any 
successor in interest of a company that was de-
scribed in subparagraph (B) in any taxable 
year, if such successor controls more than 50 
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percent of the crude oil production or natural 
gas production of such company.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) IN GENERAL.—Section 167(h)(5)(B) of the 
Internal Revenue Code of 1986 is amended by in-
serting ‘‘except as provided in subparagraph (C),’’ 
after ‘‘For purposes of this paragraph,’’. 
(2) 
TAXABLE
YEARS
TESTED.—Section 
167(h)(5)(B)(iii) of such Code is amended— 
(A) by striking ‘‘does not apply by reason 
of paragraph (4) of section 613A(d)’’ and in-
serting ‘‘did not apply by reason of paragraph 
(4) of section 613A(d) for any taxable year 
after 2004’’, and 
(B) by striking ‘‘does not apply’’ in sub-
clause (II) and inserting ‘‘did not apply for the 
taxable year’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
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TITLE II—TRANSPORTATION 
BLOCK GRANTS 
SEC. 201. USE OF REVENUE FOR TRANSPORTATION BLOCK 
GRANTS. 
(a) IN GENERAL.—Subchapter A of chapter 98 of the 
Internal Revenue Code of 1986 is amended by adding at 
the end the following new section: 
‘‘SEC. 9512. TRANSPORTATION BLOCK GRANT FUND. 
‘‘(a) ESTABLISHMENT.—There is established in the 
Treasury a fund to be known as the ‘Transportation Block 
Grant Fund’ consisting of such amounts as may be appro-
priated or credited to the fund as provided in this section 
or section 9602(b). 
‘‘(b) TRANSFER TO FUND.—There is hereby appro-
priated to the fund such amounts as the Secretary esti-
mates are equivalent to the increase in revenue received 
in the Treasury by reason of the enactment of title I of 
the Surface Transportation Investment Act of 2021, and 
the amendments made thereby. 
‘‘(c) EXPENDITURES FROM THE FUND.—Amounts in 
the fund shall be available for making grants under the 
surface transportation block grant program established 
under section 133 of title 23, United States Code.’’. 
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(b) CLERICAL AMENDMENT.—The table of sections 
for subchapter A of chapter 98 of such Code is amended 
by adding at the end the following new item: 
‘‘Sec. 9512. Transportation Block Grant Fund.’’. 
Æ 
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