(B) such change shall be treated as made 
with the consent of the Secretary of the Treas-
ury, and 
(C) the net amount of the adjustments re-
quired 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) be-
ginning with such first taxable year. 
SEC. 202. 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 (as defined in section 
167(h)(5)(B)) to a foreign country or possession of 
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the United States for any period shall not be consid-
ered 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. 203. LIMITATION ON SECTION 199 DEDUCTION ATTRIB-
UTABLE TO OIL, NATURAL GAS, OR PRIMARY 
PRODUCTS THEREOF. 
(a) DENIAL OF DEDUCTION.—Paragraph (4) of sec-
tion 199(c) of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subpara-
graph: 
‘‘(E) SPECIAL
RULE
FOR
CERTAIN
OIL 
AND GAS INCOME.—In the case of any taxpayer 
who is a major integrated oil company (as de-
fined in section 167(h)(5)(B)) for the taxable 
year, the term ‘domestic production gross re-
ceipts’ shall not include gross receipts from the 
production, transportation, or distribution of 
oil, natural gas, or any primary product (within 
the meaning of subsection (d)(9)) thereof.’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2011. 
SEC. 204. LIMITATION ON DEDUCTION FOR INTANGIBLE 
DRILLING AND DEVELOPMENT COSTS. 
(a) IN GENERAL.—Section 263(c) 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 in any 
taxable year in which such taxpayer is a major integrated 
oil company (as defined in section 167(h)(5)(B)).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts paid or incurred in tax-
able years beginning after December 31, 2011. 
SEC. 205. LIMITATION ON PERCENTAGE DEPLETION AL-
LOWANCE 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 
(as defined in section 167(h)(5)(B)), the allowance for 
percentage depletion shall be zero.’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2011. 
SEC. 206. 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.—This section shall not apply to 
amounts paid or incurred by a taxpayer in any taxable 
year in which such taxpayer is a major integrated oil com-
pany (as defined in section 167(h)(5)(B)).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts paid or incurred in tax-
able years beginning after December 31, 2011. 
Æ 
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