I 
109TH CONGRESS 
1ST SESSION H. R. 3924 
To amend the Internal Revenue Code of 1986 to provide tax incentives 
for oil refineries, oil and gas pipelines, and petroleum storage facilities. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 27, 2005 
Mr. TIAHRT 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 provide 
tax incentives for oil refineries, oil and gas pipelines, 
and petroleum storage facilities. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Refinery Expansion 
Act of 2005’’.
SEC. 2. 100 PERCENT EXPENSING OR 5-YEAR DEPRECIA-
TION OF COSTS OF REFINERY PROPERTY 
WHICH INCREASE REFINERY OUTPUT BY AT 
LEAST 5 PERCENT. 
(a) EXPENSING.—Subsection (a) of section 179C of 
the Internal Revenue Code of 1986 (relating to election 
to expense certain refineries) is amended to read as fol-
lows: 
‘‘(a) TREATMENT AS EXPENSES.— 
‘‘(1) IN GENERAL.—Except in the case of refin-
ery property to which subsection (e) applies, a tax-
payer may elect to treat 50 percent of the cost of 
qualified refinery property as an expense which is 
not chargeable to capital account. Any cost so treat-
ed shall be allowed as a deduction for the taxable 
year in which the qualified refinery property is 
placed in service. 
‘‘(2) PROPERTY TO WHICH SUBSECTION (e) AP-
PLIES.—In the case of refinery property to which 
subsection (e) applies, a taxpayer may elect to treat 
100 percent of the cost of such property as an ex-
pense which is not chargeable to capital account. 
Any cost so treated shall be allowed as a deduction 
for the taxable year in which such cost is paid or in-
curred by the taxpayer.’’.
(b) 5-YEAR DEPRECIATION.—Subparagraph (B) of 
section 168(e)(3) of such Code (relating to classification 
of property) is amended by striking ‘‘and’’ at the end of 
clause (v), by striking the period at the end clause (vi) 
and inserting ‘‘, and’’, and by inserting after clause (vi) 
the following new clause: 
‘‘(vii) refinery property the cost of 
which would have been eligible for expens-
ing under section 179C(a)(2) but for the 
absence of an election under section 
179C.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as if included in the amend-
ments made by section 1323 of the Energy Policy Act of 
2005. 
SEC. 3. DEPRECIATION RECOVERY PERIOD FOR OIL AND 
GAS PIPELINES REDUCED TO 7 YEARS. 
(a) IN GENERAL.—Subparagraph (C) of section 
168(e)(3) of the Internal Revenue Code of 1986 (relating 
to classification of property) is amended by striking ‘‘and’’ 
at the end of clause (iv), by redesignating clause (v) as 
clause (vi), and by inserting after clause (iv) the following 
new clause: 
‘‘(v) any oil or natural gas distribu-
tion line the original use of which com-
mences with the taxpayer after April 11, 
2005, and which is placed in service before 
January 1, 2011, and’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Subparagraph (E) of section 168(e)(3) of 
such Code is amended by adding ‘‘and’’ at the end 
of clause (vi), by striking ‘‘, and’’ at the end of 
clause (vii) and inserting a period, and by striking 
clause (viii). 
(2) The table contained in section 168(g)(3)(B) 
of such Code (relating to special rule for certain 
property assigned to classes) is amended— 
(A) by striking the item relating to sub-
paragraph (E)(viii), and 
(B) by inserting after the item relating to 
subparagraph (C)(vii) the following new item: 
‘‘(C)(v) ......................................................................................................
35’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as if included in section 1325 
of the Energy Policy Act of 2005. 
SEC. 4. 5-YEAR DEPRECIATION RECOVERY PERIOD FOR PE-
TROLEUM STORAGE FACILITIES. 
(a) IN GENERAL.—Subparagraph (B) of section 
168(e)(3) of the Internal Revenue Code of 1986 (relating 
to classification of property), as amended by section 2, is 
amended by striking ‘‘and’’ at the end of clause (vi), by
striking the period at the end clause (vii) and inserting 
‘‘, and’’, and by inserting after clause (vii) the following 
new clause: 
‘‘(viii) a storage facility (not including 
a building and its structural components) 
used in connection with the distribution of 
petroleum or any primary product of petro-
leum if— 
‘‘(I) the original use of such fa-
cility commences with the taxpayer 
after the date of the enactment of this 
clause, and 
‘‘(II) such facility is placed in 
service before January 1, 2011.’’. 
(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to property placed in service 
after the date of the enactment of this Act. 
(2) EXCEPTION.—The amendments made by 
this section shall not apply to any property with re-
spect to which the taxpayer or a related party has 
entered into a binding contract for the construction 
thereof on or before such date, or, in the case of 
self-constructed property, has started construction 
on or before such date.
SEC. 5. TEMPORARY SUSPENSION OF DEPRECIATION RE-
CAPTURE ON SECTION 1245 REFINERY PROP-
ERTY. 
(a) IN GENERAL.—Subsection (b) of section 1245 of 
the Internal Revenue Code of 1986 (relating to exceptions 
and limitations) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(9) 
REFINERY
PROPERTY
BEING
UP-
GRADED.—Subsection (a) shall not apply to prop-
erty— 
‘‘(A) which, before the date of the enact-
ment of this paragraph, was used by the tax-
payer in the processing liquid fuel from crude 
oil or qualified fuels (as defined in section 
45K(c)) at a refinery located in the United 
States, 
‘‘(B) which is disposed of before January 
1, 2012, and 
‘‘(C) which is replaced by the taxpayer 
with upgraded equipment which increases the 
refinery’s overall output, decreases the refin-
ery’s pollution output, or results in cleaner- 
burning fuel.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to dispositions after the date of