Title: A bill to reinstate the taxation of foreign oil related income, and for other purposes.
Policy area: Taxation

Summary:
This bill amends the Internal Revenue Code to reinstate provisions that tax certain foreign oil-related income as foreign base company income under Subpart F (i.e., income of a controlled foreign corporation earned outside the United States). The provisions were repealed in P.L. 115-197 (commonly referred to as the Tax Cuts and Jobs Act).

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3804 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 3804

To reinstate the taxation of foreign oil related income, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 21, 2018

 Ms. Duckworth introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To reinstate the taxation of foreign oil related income, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. TREATMENT OF FOREIGN OIL RELATED INCOME AS SUBPART F INCOME.

    (a) In General.--Section 954(a) of the Internal Revenue Code of 
1986 is amended by striking ``and'' at the end of paragraph (2), by 
striking the period at the end of paragraph (3) and inserting ``, 
and'', and by adding at the end the following new paragraph:
            ``(4) the foreign base company oil related income for the 
        taxable year (determined under subsection (g) and reduced as 
        provided in subsection (b)(5)).''.
    (b) Foreign Base Company Oil Related Income.--Section 954 of the 
Internal Revenue Code of 1986 is amended by inserting after subsection 
(e) the following new subsection:
    ``(g) Foreign Base Company Oil Related Income.--For purposes of 
this section--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `foreign base company oil related income' 
        means foreign oil related income (within the meaning of 
        paragraphs (2) and (3) of section 907(c)) other than income 
        derived from a source within a foreign country in connection 
        with--
                    ``(A) oil or gas which was extracted from an oil or 
                gas well located in such foreign country, or
                    ``(B) oil, gas, or a primary product of oil or gas 
                which is sold by the foreign corporation or a related 
                person for use or consumption within such country or is 
                loaded in such country on a vessel or aircraft as fuel 
                for such vessel or aircraft.
        Such term shall not include any foreign personal holding 
        company income (as defined in subsection (c)).
            ``(2) Paragraph (1) applies only where corporation has 
        produced 1,000 barrels per day or more.--
                    ``(A) In general.--The term `foreign base company 
                oil related income' shall not include any income of a 
                foreign corporation if such corporation is not a large 
                oil producer for the taxable year.
                    ``(B) Large oil producer.--For purposes of 
                subparagraph (A), the term `large oil producer' means 
                any corporation if, for the taxable year or for the 
                preceding taxable year, the average daily production of 
                foreign crude oil and natural gas of the related group 
                which includes such corporation equaled or exceeded 
                1,000 barrels.
                    ``(C) Related group.--The term `related group' 
                means a group consisting of the foreign corporation and 
                any other person who is a related person with respect 
                to such corporation.
                    ``(D) Average daily production of foreign crude oil 
                and natural gas.--For purposes of this paragraph, the 
                average daily production of foreign crude oil or 
                natural gas of any related group for any taxable year 
                (and the conversion of cubic feet of natural gas into 
                barrels) shall be determined under rules similar to the 
                rules of section 613A except that only crude oil or 
                natural gas from a well located outside the United 
                States shall be taken into account.''.
    (c) Conforming Amendments.--
            (1) Section 952(c)(1)(B)(iii) of the Internal Revenue Code 
        of 1986 is amended by redesignating subclauses (I) through (IV) 
        as subclause (II) through (V), respectively, and by inserting 
        before subclause (II) (as so redesignated) the following:
                                    ``(I) foreign base company oil 
                                related income,''.
            (2) Section 954(b) of such Code is amended--
                    (A) by inserting at the end of paragraph (4) the 
                following: ``The preceding sentence shall not apply to 
                foreign base company oil-related income described in 
                subsection (a)(4).'',
                    (B) by striking ``and the foreign base company 
                services income'' in paragraph (5) and inserting ``the 
                foreign base company services income, and the foreign 
                base company oil related income'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(6) Foreign base company oil related income not treated 
        as another kind of base company income.--Income of a 
        corporation which is foreign base company oil related income 
        shall not be considered foreign base company income of such 
        corporation under paragraph (2) or (3) of subsection (a).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years of foreign corporations beginning after the date 
of the enactment of this Act and to taxable years of United States 
shareholders ending with or within which such taxable years of foreign 
corporations end.
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