I
104TH CONGRESS
2D SESSION
H. R. 3446
To amend the Clean Air Act and certain other environmental laws to provide
regulatory relief and preserve jobs, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 10, 1996
Mr. STOCKMAN introduced the following bill; which was referred to the Com-
mittee on Commerce, and in addition to the Committee on Ways and
Means, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned
A BILL
To amend the Clean Air Act and certain other environmental
laws to provide regulatory relief and preserve jobs, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Regulatory Relief and Job Preservation Act of 1996’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—AMENDMENTS OF THE CLEAN AIR ACT
Sec. 101. Enhanced monitoring repeal.
Sec. 102. Reformulated gasoline flexibility.
Sec. 103. Reform of State operating permit procedures.
Sec. 104. Ozone-depleting compounds production and use amendments.
Sec. 105. Mact standards.
Sec. 106. Motor vehicle inspection and maintenance.
Sec. 107. Attainment date for moderate ozone nonattainment areas.
Sec. 108. Ozone exceedences in nonattainment areas.
Sec. 109. Redesignation of attainment areas.
TITLE II—ENVIRONMENTAL SELF-AUDITS
Sec. 201. Voluntary environmental self-audits.
TITLE III—REGULATION OF CHLORINE COMPOUND PRODUCTION
Sec. 301. Broad banning of chlorine compounds prohibited.
TITLE IV—AMENDMENT OF THE SOLID WASTE DISPOSAL ACT
Sec.
401. Recycling of certain materials as manufacturing feedstocks.
TITLE V—AMENDMENT OF THE INTERNAL REVENUE CODE OF
1986
Sec. 501. Intangible drilling costs include geological and geophysical costs.
Sec. 502. Expanded definition of marginal production.
Sec. 503. Tax relief for marginal domestic oil and gas production.
Sec. 504. Repeal of annual increase in tax on ozone-depleting chemicals.
Sec. 505. Reduction in rate of tax on certain reformulated gasoline.
TITLE I—AMENDMENTS OF THE
CLEAN AIR ACT
SEC. 101. ENHANCED MONITORING REPEAL.
Section 114(a)(3) of the Clean Air Act (relating to
enhanced monitoring) is repealed.
SEC. 102. REFORMULATED GASOLINE FLEXIBILITY.
Section 211(k)(3)(A)(v) of the Clean Air Act is
amended to read as follows:
‘‘(v) The Administrator may not specify a minimum
level or percentage by weight of oxygen content for refor-
mulated gasoline, and any such minimum percentage con-
tained in any regulation promulgated before the enact-
ment of the Regulatory Relief and Job Preservation Act
of 1996 shall cease to have any force and effect upon the
enactment of this Act.’’.
SEC. 103. REFORM OF STATE OPERATING PERMIT PROCE-
DURES.
States with an interim Operating Permits Program
under the Clean Air Act which has been submitted to the
Environmental Protection Agency shall not be required to
implement an Environmental Protection Agency-run per-
mit program under regulations of the Administrator solely
because the States have not yet received approval of their
own program. Until final Environmental Protection Agen-
cy approval or disapproval is received, the interim State
program shall prevail.
SEC. 104. OZONE-DEPLETING COMPOUNDS PRODUCTION
AND USE AMENDMENTS.
(a) 
FIRE
SUPPRESSION
EQUIPMENT.—Section
610(d)(1)(A) of the Clean Air Act is amended by inserting
after class II substance the following: ‘‘(other than com-
mercial fire suppression equipment containing class II
substances).’’.
(b) LABELING.—Subsections (c), (d), and (e) of sec-
tion 611 of the Clean Air Act are repealed.
SEC. 105. MACT STANDARDS.
(a) BASIC STANDARD.—Section 112(d)(2) of the
Clean Air Act is amended by adding the following at the
end thereof: ‘‘For each emissions standard promulgated
or revised under this subsection after the date of the en-
actment of the Energy and Petrochemical Relief and Job
Preservation Act of 1996, the Administrator shall provide
a benefit-cost analysis. No emissions standard promul-
gated or revised under this subsection after such date shall
be established at a level of at which the incremental costs
of compliance with the standard exceeds the incremental
benefits of such compliance. For all hazardous air pollut-
ants for which standards were promulgated after the en-
actment of the Clean Air Act Amendments of 1990, the
Administrator shall revise such standards as promptly as
practicable after the date of enactment of the Energy and
Petrochemical Relief and Job Preservation Act of 1996
to conform to the amendments made to this subsection
by the Energy and Petrochemical Relief and Job Preserva-
tion Act of 1996, the Administrator shall provide a bene-
fit-cost analysis.’’.
(b) RESIDUAL RISK.—Section 112(f)(2) of the Clean
Air Act is amended by adding the following at the end
thereof:
‘‘(D) For each emissions standard promulgated
or revised under this subsection after the date of the
enactment of the Energy and Petrochemical Relief
and Job Preservation Act of 1996, the Adminis-
trator shall provide a benefit-cost analysis. No emis-
sions standard promulgated or revised under this
subsection after such date shall be established at a
level of at which the incremental costs of compliance
with the standard exceeds the incremental benefits
of such compliance.’’. For all hazardous air pollut-
ants for which standards were promulgated after the
enactment of the Clean Air Act Amendments of
1990, the Administrator shall revise such standards
as promptly as practicable after the date of enact-
ment of the Energy and Petrochemical Relief and
Job Preservation Act of 1996 to conform to the pro-
visions of this section in effect immediately prior to
the enactment of the Clean Air Act Amendments of
1990.’’.
SEC. 106. MOTOR VEHICLE INSPECTION AND MAINTE-
NANCE.
(a) FINDINGS AND PURPOSE.—
(1) FINDINGS.—Congress finds that, in carry-
ing out title I of the Clean Air Act (42 U.S.C. 7401
et seq.), the Administrator of Environmental Protec-
tion Agency has failed to—
(A) recognize the intent of Congress to
allow States to design and implement vehicle in-
spection and maintenance programs that fit
their specific needs; and
(B) allow States the opportunity to up-
grade existing programs and prove the effective-
ness of such programs.
(2) PURPOSE.—The purpose of this section is
to require the Administrator to—
(A) follow new guidelines clearly stated by
Congress; and
(B) issue new regulations governing in-
spection and maintenance programs that—
(i) allow States to operate decentral-
ized test and repair programs; and
(ii) allow States to fairly prove pro-
gram effectiveness based on performance.
(b) IMPLEMENTATION OF ENHANCED VEHICLE IN-
SPECTION PROGRAMS.—
(1) MINIMUM
STANDARDS
REDEFINED.—Sec-
tion 182(c)(3)(C) of the Clean Air Act (42 U.S.C.
7511a(c)(3)(C)) is amended by striking subpara-
graph (C) and inserting in lieu thereof the following:
‘‘(C) STATE
PROGRAM.—The State pro-
gram required under subparagraph (A) shall in-
clude, at a minimum, each of the following ele-
ments:
‘‘(i) Computerized emission analyzers,
including on-road testing devices.
‘‘(ii) No waivers for vehicles and parts
covered by the emission control perform-
ance warranty as provided for in section
207(b) (42 U.S.C. 7541(b)) unless a war-
ranty remedy has been denied in writing,
or for tampering-related repairs.
‘‘(iii) In view of the air quality pur-
pose of the program, if, for any vehicle,
waivers are permitted for emissions-related
repairs not covered by warranty, the mini-
mum expenditure shall be: at least $300
and beginning January 1, 1998 a mini-
mum of $450, and at least $75 for pre-
1981 model year vehicles (adjusted annu-
ally as determined by the Administrator on
the basis of the Consumer Price Index in
the same manner as provided in title V. A
State may elect to implement a waiver or
assisted repair program for the elderly,
handicapped, and low income individuals.
‘‘(iv) Enforcement through denial of
vehicle registration or safety inspection
sticker.
‘‘(v) Annual emission testing and nec-
essary adjustment, repair, and mainte-
nance.
‘‘(vi) Operation of the program on a
centralized basis. However, an electroni-
cally connected testing system, a licensing
system, or other measures (or any com-
bination thereof) may be considered as
centralized.
‘‘(vii) Inspection of emission control
diagnostic systems and the maintenance or
repair of malfunctions or system deteriora-
tion 
identified 
by 
or 
affecting 
such
diagnostics systems. The vehicle manufac-
turer shall make available relevant data
and repair procedures to certified emission
testing and certified emission repair facili-
ties via electronic data transfer or other
means.
‘‘(viii) Each State shall biannually
prepare a report to the Administrator
which assesses the emission reductions
achieved by the program required under
this paragraph based on data collected
during inspection and repair of vehicles.
The methods used to assess the emission
reductions shall be those established by the
State and may include data collected
through remote sensing, out-of-cycle test-
ing and pilot programs (as described in
clause (xi) of this section).
‘‘(ix) The Administrator shall not re-
quire any area or county in attainment to
implement enhanced testing. However, the
State may require emission testing, remote
sensing testing, or pilot programs for a
county or that portion of a county or re-
gion if a significant number of vehicles
registered in that county or region or por-
tion thereof are operated daily in a non-
attainment county or region of a State.
‘‘(x) 
The 
State 
shall 
implement
through and in cooperation with private in-
dustry, foundations, educational institu-
tions and citizens, the following: I/M re-
view committees, public education pro-
grams concerning vehicle maintenance, re-
pair and proper disposal of associated
motor vehicle wastes, emission inspector
certification training programs with writ-
ten and hands-on testing, and certified
technician training. Congress shall appro-
priate through the Environmental Protec-
tion Agency, funding to the States to offset
implementation costs of such programs.
‘‘(xi) Additional credits may be grant-
ed to States which implement pilot pro-
grams. Pilot programs may include:
‘‘(I) Methods used to help a
State assess emission reductions, in-
cluding but not limited to out-of-cycle
testing, remote sensing, idle, transient
testing, or the equivalent.
‘‘(II) New and existing partner-
ships between point sources and mo-
bile sources to promote public edu-
cation, assisted repair to offset waiv-
ers, voluntary out-of-cycle testing,
Mobile Emission Reduction Credit
creation and trading, and alternatives
to vehicle scrappage.
‘‘(III) Testing of various fuel for-
mulations and fuel additives to deter-
mine emission reduction effectiveness
in specific areas.
‘‘(xii) Emission testing fees shall be
market driven, except for testing centers
owned by the State.’’.
(2) REASSESSMENT
OF
REGULATIONS.—The
Administrator shall immediately rescind the regula-
tions of the Administrator set forth in 40 CFR ch.
1 subpart s-51.350-end and shall issue new regula-
tions in accordance with section 182(c)(3)(C) of the
Clean Air Act (42 U.S.C. 7511a(c)(3)(C)) as
amended by this Act.
SEC. 107. ATTAINMENT DATE FOR MODERATE OZONE NON-
ATTAINMENT AREAS.
(a) FINDINGS.—Congress finds that the Environ-
mental Protection Agency failed to follow the congres-
sional intent by forcing centralized I/M 240 vehicle emis-
sions testing in nonattainment areas. States which fol-
lowed Environmental Protection Agency guidelines by im-
plementing such programs have suffered from public back-
lash and have found the programs unworkable in many
cases. Legislation recently signed has addressed this prob-
lem. However, some areas are now facing ozone attain-
ment deadlines that cannot now be met, possibly due to
the delay caused by the failure of centralized programs.
Therefore, Congress finds it necessary to extend the dead-
line for ozone attainment in moderate nonattainment
areas.
(b) EXTENSION
OF PRIMARY STANDARD ATTAIN-
MENT DATE FOR MODERATE OZONE NONATTAINMENT
AREAS.—Section 181(a) of the Clean Air Act (42 U.S.C.
7511(a)(1)) is amended in table I by striking ‘‘6 years
after enactment’’ and inserting ‘‘8 years after enactment’’.
SEC. 
108. 
OZONE 
EXCEEDENCES 
IN 
NONATTAINMENT
AREAS.
For purposes of the nonattainment provisions of title
I of the Clean Air Act, ozone monitor readings shall be
averaged over an 8-hour period. An exceedence shall occur
if the reading over such a period averages above 0.10ppm
at 2 or more monitors in a nonattainment region. A non-
attainment region shall be allowed 4 such exceedences over
a one-year period.
SEC. 109. REDESIGNATION OF ATTAINMENT AREAS.
(a) FINDINGS.—Congress finds that:
(1) The year 1995 was a climatological anom-
aly, with data collection revealing unparalleled, fre-
quent high temperatures.
(2) The frequency and persistence of high tem-
perature days are the most significant factors in
causing ambient ozone air pollution episodes.
(b) DISCOUNTING OF ANOMALOUS YEARS HIGH AND
LOW.—For the purpose of redesignation of areas as at-
tainment or nonattainment under the Clean Air Act, a
span of 5 years will be used to establish a baseline trend.
The year with the highest number of exceedences shall be
dropped, as well as the year with the lowest number of
exceedences. The baseline shall be established by the 3 re-
maining years.
TITLE II—ENVIRONMENTAL
SELF-AUDITS
SEC. 201. VOLUNTARY ENVIRONMENTAL SELF-AUDITS.
(a) DEFINITIONS.—As used in this section:
(1) 
VOLUNTARY
ENVIRONMENTAL
SELF-
AUDIT.—The term ‘‘voluntary environmental self-
audit’’ means an assessment, audit, investigation, or
review that is performed by or for a person or entity
to determine whether the person or entity is in com-
pliance with environmental laws, improve such per-
son or entity’s compliance with environmental laws,
or assess the effectiveness of any environmental
management compliance system (or any part there-
of).
(2) VOLUNTARY ENVIRONMENTAL SELF-AUDIT
REPORT.—The term ‘‘voluntary environmental self-
audit report’’ means any report, finding, opinion, or
other document or communication relating to a vol-
untary environmental self-audit.
(b) NONDISCLOSURE PRIVILEGE.—No information
contained in any voluntary environmental self-audit re-
port, and no testimony relating to a voluntary environ-
mental self-audit performed by or on behalf of any entity
shall be admissible evidence in any Federal or State ad-
ministrative or judicial proceeding under any environ-
mental law or environmentally related litigation, or subject
to discovery in any such proceeding.
(c) IN GENERAL.—No information relating to the
violation by any entity of any environmental law that is
disclosed by such entity to the Federal or State agency
administering such law as a result of a voluntary environ-
mental self-audit performed by such entity may be used
against such entity or against an officer, employee, or
agent of such entity in any Federal or State administra-
tive, civil, or criminal negligence proceeding regarding
such violation if—
(1) such entity (or officer, employee, or agent)
ensures that the disclosure is made promptly after
receiving knowledge of the information;
(2) such entity (or officer, employee, or agent)
initiates efforts to achieve compliance with the law
within a reasonable period of time in a manner con-
sistent with applicable provisions of law;
(3) such entity (or officer, employee, or agent)
is not asserting the applicability of the immunity
under this subsection for a fraudulent purpose;
(4) such information is not disclosed for the
purpose of avoiding penalties in an investigative, ad-
ministrative, or judicial proceeding that, at the time
of disclosure, was in progress; or
(5) such entity (or officer, employee, or agent)
discloses such other information relating to the vio-
lation as the agency concerned requests, other than
information subject to a nondisclosure privilege
under any authority of law.
(d) EXCLUSIONS.—The immunity under subsection
(b) shall not apply to information with respect to an inten-
tional or willful violation of an environmental law or any
violation of any such law which knowingly endangers the
health or safety of any individual.
TITLE 
III—REGULATION 
OF
CHLORINE COMPOUND PRO-
DUCTION
SEC. 301. BROAD BANNING OF CHLORINE COMPOUNDS
PROHIBITED.
Notwithstanding any provision of title VI of the Clean
Air Act or any other authority of law, the Administrator
of the Environmental Protection Agency shall not take any
action or prohibit the manufacture, use, or distribution in
commerce of chlorine compounds in the absence of a spe-
cific authorization by Congress, enacted into law after the
submission to Congress of the proposed regulation.
TITLE IV—AMENDMENT OF THE
SOLID WASTE DISPOSAL ACT
SEC. 401. RECYCLING OF CERTAIN MATERIALS AS MANU-
FACTURING FEEDSTOCKS.
Section 1004(5) of the Solid Waste Disposal Act is
amended by adding the following at the end thereof: ‘‘The
term ‘hazardous waste’ shall not include any solid waste
that is used as a feedstock in any manufacturing process
unless such waste is stored after generation and prior to
such use for a period in excess of 90 days, or is trans-
ported for a distance of more than 25 miles.’’.
TITLE V—AMENDMENT OF THE
INTERNAL 
REVENUE 
CODE
OF 1986
SEC. 501. INTANGIBLE DRILLING COSTS INCLUDE GEO-
LOGICAL AND GEOPHYSICAL COSTS.
(a) IN GENERAL.—Subsection (c) of section 263 of
the Internal Revenue Code of 1986 (relating to intangible
drilling and development costs in the case of oil and gas
wells and geothermal wells) is amended by inserting before
the last sentence the following new sentence: ‘‘In the case
of oil and gas wells, the tax treatment under this sub-
section which applies to the taxpayers intangible drilling
and development costs shall also apply to geological and
geophysical costs for the purposes of ascertaining the ex-
istence, location, extent or quality of any deposit of oil or
gas within the United States (within the meaning of sec-
tion 638).’’.
SEC. 502. EXPANDED DEFINITION OF MARGINAL PRODUC-
TION.
(a) IN GENERAL.—Subparagraph (E) of section
613A(c)(6) of the Internal Revenue Code of 1986 (defin-
ing stripper well property) is amended by adding at the
end the following new sentence: ‘‘The preceding sentence
shall be applied by substituting ‘25’ for ‘15’ with respect
to any well which produces water at a rate not less than
95 percent of total well effluent.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to production in calendar years
beginning after the date of the enactment of this Act.
SEC. 503. TAX RELIEF FOR MARGINAL DOMESTIC OIL AND
GAS PRODUCTION.
(a) CREDIT FOR PRODUCING OIL AND GAS FROM
MARGINAL WELLS.—Subpart D of part IV of subchapter
A of chapter I of the Internal Revenue Code of 1986 (re-
lating to business credits) is amended by adding at the
end the following new section:
‘‘SEC. 45C. CREDIT FOR PRODUCING OIL AND GAS FROM
MARGINAL WELLS.
‘‘(a) GENERAL RULE.—For purposes of section 38,
the marginal well production credit for any taxable year
in an amount equal to the product of—
‘‘(1) the credit amount, and
‘‘(2) the qualified crude oil production and the
qualified natural gas production which is attrib-
utable to the taxpayer.
‘‘(b) CREDIT AMOUNT.—For purposes of this sec-
tion—
‘‘(1) IN GENERAL.—The credit amount is—
‘‘(A) $3 per barrel of qualified crude oil
production, and
‘‘(B) 50 cents per 1,000 cubic feet of
qualified natural gas production.
‘‘(2) REDUCTION AS OIL AND GAS PRICES IN-
CREASE.—
‘‘(A) IN GENERAL.—The $3 and 50 cents
amounts under paragraph (1) shall each be re-
duced (but not below zero) by an amount which
bears the same ratio to such amount (deter-
mined without regard to this paragraph) as—
‘‘(i) the amount by which the ref-
erence price for the calendar year preced-
ing the calendar year in which the taxable
year begins exceeds $17 ($2.50 for quali-
fied natural gas production), bears to
‘‘(ii) $8 ($1 for qualified natural gas
production).
‘‘(B) INFLATION
ADJUSTMENT.—In the
case of any taxable year beginning in a calendar
year after 1995, each of the dollar amounts
contained in subparagraph (A) shall be in-
creased to an amount equal to such dollar
amount multiplied by the inflation adjustment
factor for such calendar year (determined under
section 43(c)(3)(B) by substituting ‘1994’ for
‘1990’).
‘‘(C) REFERENCE PRICE.—For purposes of
this paragraph, the term reference price means
with respect to any calendar year—
‘‘(i) in the case of qualified crude oil
production, the reference price determined
under section 29(d)(2)(C), and
‘‘(ii) in the case of qualified natural
gas production, the Secretary’s estimate of
the annual average wellhead price per
1,000 cubic feet for all domestic natural
gas.
‘‘(c) QUALIFIED CRUDE OIL
AND NATURAL GAS
PRODUCTION.—For purposes of this section—
‘‘(1) IN GENERAL.—The terms ‘qualified crude
oil production’ and ‘qualified natural gas production’
mean domestic crude oil or natural gas which is pro-
duced from a marginal well.
‘‘(2) LIMITATION ON AMOUNT OF PRODUCTION
WHICH MAY QUALIFY.—
‘‘(A) IN GENERAL.—Crude oil or natural
gas produced during any taxable year from any
well shall not be treated as qualified crude oil
production or qualified natural gas production
to the extent production from the well during
the taxable year exceeds—
‘‘(i) 1,095 barrels in the case of crude
oil, and
‘‘(ii) 25,000 cubic feet in the case of
natural gas.
‘‘(B) PROPORTIONATE REDUCTIONS.—
‘‘(i) SHORT TAXABLE YEARS.—In the
case of a short taxable year, the limitations
under this paragraph shall be proportion-
ately reduced to reflect the ratio which the
number of days in the year bears to 365.
‘‘(ii) WELLS NOT IN PRODUCTION EN-
TIRE YEAR.—In the case of a well which is
not capable of production during each day
of a taxable year, the limitations under
this paragraph applicable to the well shall
be proportionately reduced to reflect the
ratio which the number of days of produc-
tion bears to the total number of days in
the taxable year.
‘‘(3) DEFINITIONS.—
‘‘(A) MARGINAL WELL.—The term ‘mar-
ginal well’ means a domestic well—
‘‘(i) the production from which during
the taxable year is treated as marginal
production under section 613A(c)(6), or
‘‘(ii) which, during the taxable year—
‘‘(I) has average daily production
of not more than 25 barrel equiva-
lents, and
‘‘(II) produces water at a rate
not less than 95 percent of total well
effluent.
‘‘(B) CRUDE OIL, ETC.—The terms ‘crude
oil’, ‘natural gas’, ‘domestic’, and ‘barrel’ have
the meanings given such terms by section
613A(e).
‘‘(C) BARREL
EQUIVALENT.—The term
‘barrel equivalent’ means with respect to natu-
ral gas, a conversion ratio of 6,000 cubic feet
of natural gas to 1 barrel of crude oil.
‘‘(d) OTHER RULES.—
‘‘(1) PRODUCTION ATTRIBUTABLE TO THE TAX-
PAYER.—In the case of a marginal well in which
there is more than one owner of operating interests
in the well and the crude oil or natural gas produc-
tion exceeds the limitation under subsection (c)(2),
qualifying crude oil production or qualifying natural
gas production attributable to the taxpayer shall be
determined on the basis of the ratio which taxpayers
revenue interest in the production bears to the ag-
gregate of the revenue interests of all operating in-
terest owners in the production.
‘‘(2) OPERATING
INTEREST
REQUIRED.—Any
credit under this section may be claimed only on
production which is attributable to the holder of an
operating interest as defined in section 614(d).
‘‘(3) PRODUCTION
FROM
NONCONVENTIONAL
SOURCES
EXCLUDED.—In the case of production
from a marginal well which is eligible for the credit
allowed under section 29 for the taxable year, no
credit shall be allowable under this section unless
the taxpayer elects not to claim the credit under sec-
tion 29 with respect to the well.’’
(b) CREDIT TREATED AS BUSINESS CREDIT.—Sec-
tion 38(b) of such Code is amended by striking ‘‘plus’’
at the end of paragraph (10), by striking the period at
the end of paragraph (11) and inserting ‘‘, plus’’, and by
adding at the end the following new paragraph:
‘‘(12) the marginal oil and gas well production
credit determined under section 45C(a).’’
(c) CREDIT ALLOWED AGAINST REGULAR AND MINI-
MUM TAX.—
(1) IN GENERAL.—Subsection (c) of section 38
of such Code (relating to limitation based on amount
of tax) is amended by redesignating paragraph (3)
as paragraph (4) and by inserting after paragraph
(2) the following new paragraph:
‘‘(3) SPECIAL RULES FOR OIL AND GAS PRO-
DUCTION CREDIT.—
‘‘(A) IN GENERAL.—In the case of the oil
and gas production credit—
‘‘(i) this section and section 39 shall
be applied separately with respect to the
credit, and
‘‘(ii) in applying paragraph (1) to the
credit—
‘‘(I) subparagraph (A) shall not
apply, and
‘‘(II) the limitation under para-
graph (1) (as modified by subclause
(I)) shall be reduced by the credit al-
lowed under subsection (a) for the
taxable year (other than the oil and
gas production credit).
‘‘(B) OIL
AND
GAS
PRODUCTION
CRED-
IT.—For purposes of this subsection, the term
‘oil and gas production credit’ means the credit
allowable under subsection (a) by reason of sec-
tion 45C(a).’’
(2) CONFORMING AMENDMENT.—Subclause (II)
of section 38(c)(2)(A)(ii) of such Code is amended
by inserting ‘‘or the oil and gas production credit’’
after ‘‘employment credit’’.
(d) COORDINATION WITH SECTION 29.—Section
29(a) of such Code is amended by striking ‘‘There’’ and
inserting ‘‘At the election of the taxpayer, there’’.
(e) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter I
of such Code is amended by adding at the end the follow-
ing item:
‘‘SEC. 45C. Credit for producing oil and gas from marginal
wells.’’
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to production after the date of the
enactment of this Act.
SEC. 504. REPEAL OF ANNUAL INCREASE IN TAX ON OZONE-
DEPLETING CHEMICALS.
(a) IN GENERAL.—Paragraph (1) of section 4681(b)
of the Internal Revenue Code of 1986 (relating to amount
of tax) is amended by striking subparagraphs (B) and (C)
and by inserting after subparagraph (A) the following new
subparagraph:
‘‘(B) BASE AMOUNT.—The base amount is
$5.80.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on January 1, 1997.
SEC. 505. REDUCTION IN RATE OF TAX ON CERTAIN REFOR-
MULATED GASOLINE.
(a) IN GENERAL.—Subparagraph (A) of section
4081(a)(2) of the Internal Revenue Code of 1986 (relating
to rate of tax on gasoline) is amended by—
(1) by inserting ‘‘(15.3 cents per gallon in the
case of qualified reformulated gasoline)’’ before the
comma at the end of clause (i), and
(2) by adding at the end the following flush
sentence:
‘‘For purposes of clause (i), the term ‘qualified
reformulated gasoline’ means reformulated gas-
oline that meets the requirements of section
211(k) of the Clean Air Act and has at least a
2 percent oxygen content (by weight).’’
(b) CREDIT OR REFUND FOR GASOLINE USED TO
MAKE REFORMULATED GASOLINE.—
(1) Section 6427 of such Code is amended by
inserting after subsection (l) the following new sub-
section:
‘‘(m) GASOLINE USED TO PRODUCE QUALIFIED RE-
FORMULATED GASOLINE.—
‘‘(1) IN GENERAL.—Except as provided in sub-
section (k), if any gasoline on which tax was im-
posed by section 4081 at the rate of tax specified in
section 4081(a)(2)(A)(i) (other than as qualified re-
formulated gasoline) is used by any person in pro-
ducing qualified reformulated gasoline which is sold
or used in such person’s trade or business, the Sec-
retary shall pay (without interest) to such person an
amount equal to 3 cents per gallon of the gasoline
so used.
‘‘(2) QUALIFIED REFORMULATED GASOLINE.—
For purposes of paragraph (1), the term ‘qualified
reformulated gasoline’ means reformulated gasoline
that meets the requirements of section 211(k) of the
Clean Air Act and has at least a 2 percent oxygen
content (by weight).’’.
‘‘(3) COORDINATION WITH OTHER REPAYMENT
PROVISIONS.—No amount shall be payable under
paragraph (1) with respect to gasoline with respect
to which an amount is payable under subsection (d),
(e), or (l) of this section or under section 6420 or
6421.’’
(2) Paragraph (1) of section 6427(i) of such
Code is amended by striking ‘‘(l), or (q)’’ and insert-
ing ‘‘(q), (l), or (m)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on January 1, 1997.
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