To amend the Internal Revenue Code of 1986 to repeal fossil fuel subsidies for large oil companies.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``End Big Oil Tax Subsidies Act of 
2010''.

SEC. 2. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES.

    (a) In General.--Subparagraph (A) of section 167(h)(5) of the 
Internal Revenue Code of 1986 is amended by striking ``major integrated 
oil company'' and inserting ``covered large oil company''.
    (b) Covered Large Oil Company.--Paragraph (5) of section 167(h) of 
such Act is amended by redesignating subparagraph (B) as subparagraph 
(C) and by inserting after subparagraph (A) the following new 
subparagraph:
                    ``(B) Covered large oil company.--For purposes of 
                this paragraph, the term `covered large oil company' 
                means a taxpayer which--
                            ``(i) is a major integrated oil company, or
                            ``(ii) has gross receipts in excess of 
                        $50,000,000 for the taxable year.
                For purposes of clause (ii), all persons treated as a 
                single employer under subsections (a) and (b) of 
                section 52 shall be treated as 1 person.''.
    (c) Conforming Amendment.--The heading for paragraph (5) of section 
167(h) of such Code is amended by inserting ``and other large 
taxpayers''.
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after 
December 31, 2010.

SEC. 3. PRODUCING OIL AND GAS FROM MARGINAL WELLS.

    (a) In General.--Section 45I of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(e) Exception for Taxpayer Who Is Not Small, Independent Oil and 
Gas Company.--
            ``(1) In general.--Subsection (a) shall not apply to any 
        taxpayer which is not a small, independent oil and gas company 
        for the taxable year.
            ``(2) Aggregation rule.--For purposes of paragraph (1), all 
        persons treated as a single employer under subsections (a) and 
        (b) of section 52 shall be treated as 1 person.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to credits determined for taxable years beginning after December 
31, 2010.

SEC. 4. ENHANCED OIL RECOVERY CREDIT.

    (a) In General.--Section 43 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subsection:
    ``(f) Exception for Taxpayer Who Is Not Small, Independent Oil and 
Gas Company.--
            ``(1) In general.--Subsection (a) shall not apply to any 
        taxpayer which is not a small, independent oil and gas company 
        for the taxable year.
            ``(2) Aggregation rule.--For purposes of paragraph (1), all 
        persons treated as a single employer under subsections (a) and 
        (b) of section 52 shall be treated as 1 person.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after 
December 31, 2010.

SEC. 5. INTANGIBLE DRILLING AND DEVELOPMENT COSTS IN THE CASE OF OIL 
              AND GAS WELLS.

    (a) In General.--Subsection (c) of section 263 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 not a 
small, independent oil and gas company, determined by deeming all 
persons treated as a single employer under subsections (a) and (b) of 
section 52 as 1 person.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred in taxable years beginning after December 
31, 2010.

SEC. 6. PERCENTAGE DEPLETION.

    (a) In General.--Section 613A of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(f) Exception for Taxpayer Who Is Not Small, Independent Oil and 
Gas Company.--
            ``(1) In general.--This section and section 611 shall not 
        apply to any taxpayer which is not a small, independent oil and 
        gas company for the taxable year.
            ``(2) Aggregation rule.--For purposes of paragraph (1), all 
        persons treated as a single employer under subsections (a) and 
        (b) of section 52 shall be treated as 1 person.''.
    (b) Conforming Amendment.--Section 613A(c)(1) of such Code is 
amended by striking ``subsection (d)'' and inserting ``subsections (d) 
and (f)''.
    (c) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2010.

SEC. 7. TERTIARY INJECTANTS.

    (a) In General.--Section 193 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(d) Exception for Taxpayer Who Is Not Small, Independent Oil and 
Gas Company.--
            ``(1) In general.--Subsection (a) shall not apply to any 
        taxpayer which is not a small, independent oil and gas company 
        for the taxable year.
            ``(2) Exception for qualified carbon dioxide disposed in 
        secure geological storage.--Paragraph (1) shall not apply in 
        the case of any qualified tertiary injectant expense paid or 
        incurred for any tertiary injectant is qualified carbon dioxide 
        (as defined in section 45Q(b)) which is disposed of by the 
        taxpayer in secure geological storage (as defined by section 
        45Q(d)).
            ``(3) Aggregation rule.--For purposes of paragraph (1), all 
        persons treated as a single employer under subsections (a) and 
        (b) of section 52 shall be treated as 1 person.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to expenses incurred after December 31, 2010.

SEC. 8. PASSIVE ACTIVITY LOSSES AND CREDITS LIMITED.

    (a) In General.--Paragraph (3) of section 469(c) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following:
                    ``(C) Exception for taxpayer who is not small, 
                independent oil and gas company.--
                            ``(i) In general.--Subparagraph (A) shall 
                        not apply to any taxpayer which is not a small, 
                        independent oil and gas company for the taxable 
                        year.
                            ``(ii) Aggregation rule.--For purposes of 
                        clause (i), all persons treated as a single 
                        employer under subsections (a) and (b) of 
                        section 52 shall be treated as 1 person.''.

SEC. 9. INCOME ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES.

    (a) In General.--Section 199 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(e) Exception for Taxpayer Who Is Not Small, Independent Oil and 
Gas Company.--Subsection (a) shall not apply to the income derived from 
the production, transportation, or distribution of oil, natural gas, or 
any primary product (within the meaning of subsection (d)(9)) thereof 
by any taxpayer which for the taxable year is an oil and gas company 
which is not a small, independent oil and gas company.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2010.

SEC. 10. PROHIBITION ON USING LAST IN, FIRST-OUT ACCOUNTING FOR MAJOR 
              INTEGRATED OIL COMPANIES.

    (a) In General.--Section 472 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(h) Major Integrated Oil Companies.--Notwithstanding any other 
provision of this section, a major integrated oil company (as defined 
in section 167(h)) may not use the method provided in subsection (b) in 
inventorying of any goods.''.
    (b) Effective Date and Special Rule.--
            (1) In general.--The amendment made by subsection (a) shall 
        apply to taxable years beginning after December 31, 2010.
            (2) Change in method of accounting.--In the case of any 
        taxpayer required by the amendment made by this section to 
        change its method of accounting for its first taxable year 
        beginning after the date of the enactment of this Act--
                    (A) such change shall be treated as initiated by 
                the taxpayer,
                    (B) such change shall be treated as made with the 
                consent of the Secretary of the Treasury, and
                    (C) the net amount of the adjustments required 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) beginning with such first taxable year.

SEC. 11. NO EXPENSING FOR REFINERIES PROCESSING LIQUID FUEL FROM TAR 
              SANDS, SHALE, OR COAL.

    (a) In General.--Subsection (f) of section 179C of the Internal 
Revenue Code of 1986 is amended by striking ``or'' at the end of 
paragraph (1), by striking the period at the end of paragraph (2) and 
inserting ``, or'', and by inserting after paragraph (2) the following 
new paragraph:
            ``(3) which is used to process liquid fuel from tar sands, 
        shale, or coal (including lignite).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2010.

Summary: End Big Oil Tax Subsidies Act of 2010 - Amends the Internal Revenue Code to require seven-year amortization of the geological and geophysical expenditures of covered large oil companies. Defines "covered large oil company" as a taxpayer which is a major integrated oil company or which has gross receipts in excess of $50 million in a taxable year.

Denies certain tax benefits to any taxpayer that is not a small, independent oil and gas company, including: (1) the tax credits for producing oil and gas from marginal wells and for enhanced oil recovery; (2) expensing of intangible drilling and development costs in the case of gas wells and geothermal wells; (3) percentage depletion; (4) the tax deduction for qualified tertiary injectant expenses; (5) the exemption from limitations on passive activity losses; and (6) the tax deduction for income attributable to domestic production activities.

Prohibits the use of the last-in, first-out (LIFO) accounting method by major integrated oil companies.

Denies the election to expense the cost of refinery property which is used to process liquid fuel from tar sands, shale, or coal (including lignite).