People Over Petroleum Act

Bill: 118-hr-1743
Sponsor: full_name: Rep. Casten, Sean [D-IL-6]
Introduced: 2023-03-23
Policy area: Taxation
Latest action: action_date: 2023-03-23
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2023-03-23
action_desc: Introduced in House
text: <p><strong>People Over Petroleum Act</strong></p> <p>This bill limits or repeals certain fossil fuel oil and gas subsidies for oil companies and establishes a gas prices rebate for individual taxpayers. </p> <p>Among other elements, the bill </p> <ul> <li>repeals the tax credits for producing oil and gas from marginal wells and for enhanced oil recovery;</li> <li>repeals various tax deductions, including the deduction for the intangible drilling and development costs of oil and gas wells;</li> <li>repeals the passive loss exception for working interests in oil and gas property; </li> <li>denies the tax deduction for income attributable to domestic production activities for oil and gas activities; </li> <li>prohibits the use of the last-in, first-out (LIFO) accounting method by major integrated oil companies;</li> <li>limits the foreign tax credit for dual capacity taxpayers (i.e., taxpayers who are subject to a levy of a foreign country or U.S. possession and receive specific economic benefits from such country or possession); and </li> <li>expands the definition of <i>crude oil</i> for purposes of the excise tax on petroleum and petroleum products to include any oil derived from a bitumen or bituminous mixture (tar sands), and any oil derived from kerogen-bearing sources (oil shale).</li> </ul> <p>The bill also allows individual taxpayers a 2022 gas prices rebate for the first taxable year beginning in 2022. The bill defines 2022 gas prices rebate amount as the sum of $500 ($1,000 for joint returns), plus $500 times the number of taxpayer dependents who had attained the age of 16 as of the end of the taxable year.</p>

tv_txt: I 118th CONGRESS 1st Session H. R. 1743 IN THE HOUSE OF REPRESENTATIVES March 23, 2023 Mr. Casten (for himself, Mr. Blumenauer , Mr. Levin , and Mrs. McClellan ) 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 repeal fossil fuel subsidies for oil companies, to establish gas price rebates to individuals for 2022, and for other purposes.

1. Short title This Act may be cited as the People Over Petroleum Act . 2. Amortization of geological and geophysical expenditures (a) In general Section 167(h) of the Internal Revenue Code of 1986 is amended— (1) by striking 24-month period in paragraph (1) and inserting 7-year period , and (2) by striking paragraph (5). (b) Effective date The amendment made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2022. 3. Producing oil and gas from marginal wells (a) In general Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by striking section 45I (and by striking the item relating to such section in the table of sections for such subpart). (b) Conforming amendment Section 38(b) of such Code is amended by striking paragraph (19). (c) Effective date The amendment made by subsection (a) shall apply to credits determined for taxable years beginning after December 31, 2022. 4. Enhanced oil recovery credit (a) In general Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by striking section 43 (and by striking the item relating to such section in the table of sections for such subpart). (b) Conforming amendment Section 38(b) of such Code is amended by striking paragraph (6). (c) Effective date The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2022. 5. Intangible drilling and development costs in the case of oil and gas wells (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 with respect to an oil or gas well after December 31, 2022. . (b) Effective date The amendment made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2022. 6. Repeal of percentage depletion for oil and gas wells (a) In general Part I of subchapter I of chapter 1 of the Internal Revenue Code of 1986 is amended by striking section 613A (and the table of sections of such part is amended by striking the item relating to such section). (b) Conforming amendments (1) Section 45H(d) of such Code is amended— (A) by striking For purposes of this section and inserting the following: (1) In general For purposes of this section , (B) by striking (within the meaning of section 613A(d)(3)) , and (C) by adding at the end the following new paragraph: (2) Related person For purposes of this subsection, a person is a related person with respect to the taxpayer if a significant ownership interest in either the taxpayer or such person is held by the other, or if a third person has a significant ownership interest in both the taxpayer and such person. For purposes of the preceding sentence, the term significant ownership interest means— (A) with respect to any corporation, 5 percent or more in value of the outstanding stock of such corporation, (B) with respect to a partnership, 5 percent or more interest in the profits or capital of such partnership, and (C) with respect to an estate or trust, 5 percent or more of the beneficial interests in such estate or trust. For purposes of determining a significant ownership interest, an interest owned by or for a corporation, partnership, trust, or estate shall be considered as owned directly both by itself and proportionately by its shareholders, partners, or beneficiaries, as the case may be. . (2) Section 57(a)(1) of such Code is amended by striking the last sentence. (3) Section 291(b)(4) of such Code is amended by adding at the end the following: Any reference in the preceding sentence to section 613A shall be treated as a reference to such section as in effect prior to the date of the enactment of the People Over Petroleum Act . . (4) Section 613(d) of such Code is amended by striking Except as provided in section 613A, in the case of and inserting In the case of . (5) Section 613(e) of such Code is amended— (A) by striking or section 613A in paragraph (2), and (B) by striking any amount described in section 613A(d)(5) in paragraph (3) and inserting any lease bonus, advance royalty, or other amount payable without regard to production from property . (6) Section 705(a) of such Code is amended— (A) by inserting and at the end of paragraph (1)(C), (B) by striking ; and at the end of paragraph (2)(B) and inserting a period, and (C) by striking paragraph (3). (7) Section 993(c)(2)(C) of such Code is amended by striking section 613 or 613A and inserting section 613 (determined without regard to subsection (d) thereof) . (8) Section 1202(e)(3)(D) of such Code is amended by striking section 613 or 613A and inserting section 613 (determined without regard to subsection (d) thereof) . (9) Section 1367(a)(2) of such Code is amended by inserting and at the end of subparagraph (C), by striking , and at the end of subparagraph (D) and inserting a period, and by striking subparagraph (E). (10) Section 1446(c) of such Code is amended by striking paragraph (2) and by redesignating paragraph (3) as paragraph (2). (c) Effective date The amendments made by this section shall apply to property placed in service after December 31, 2022. 7. Repeal of deduction for tertiary injectants (a) In general Part VI of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by striking section 193 (and the table of sections of such subpart is amended by striking the item relating to such section). (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2022. 8. Repeal of exception to passive loss limitations for working interests in oil and gas properties (a) In general Section 469(c)(3) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (C) Termination Subparagraph (A) shall not apply with respect to any taxable year beginning after the date of the enactment of this Act. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2022. 9. Deduction for qualified business income not allowed with respect to oil and gas activities (a) In general Section 199A(c)(3)(B) of the Internal Revenue Code of 1986 is amended by redesignating clause (vii) as clause (viii), and by inserting after clause (vi) the following new clause: (vii) The production, refining, processing, transportation, or distribution of oil, gas, or any primary product thereof. . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2022. 10. Prohibition on using last-in, first-out accounting for oil and gas 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) Oil and gas companies (1) In general Notwithstanding any other provision of this section, a major integrated oil company may not use the method provided in subsection (b) in inventorying of any goods. (2) Major integrated oil company For purposes of this subsection, the term major integrated oil company means, with respect to any taxable year, a producer of crude oil— (A) which has an average daily worldwide production of crude oil of at least 500,000 barrels for the taxable year, (B) which has gross receipts in excess of $1,000,000,000 for the taxable year, and (C) the average daily refinery runs of the taxpayer and related persons for the taxable year exceed 75,000 barrels. (3) Special rules (A) Crude production and gross receipts For purposes of subparagraphs (A) and (B) of paragraph (2)— (i) Controlled groups and common control All persons treated as a single employer under subsections (a) and (b) of section 52 shall be treated as 1 person. (ii) Short taxable years In case of a short taxable year, the rule under section 448(c)(3)(B) shall apply. (B) Average daily refinery runs For purposes of paragraph (2)(C)— (i) In general The average daily refinery runs for any taxable year shall be determined by dividing the aggregate refinery runs for the taxable year by the number of days in the taxable year. (ii) Related persons A person is a related person with respect to the taxpayer if a significant ownership interest in either the taxpayer or such person is held by the other, or if a third person has a significant ownership interest in both the taxpayer and such person. (iii) Significant ownership interest For purposes of clause (ii), the term significant ownership interest means— (I) with respect to any corporation, 15 percent or more in value of the outstanding stock of such corporation, (II) with respect to a partnership, 15 percent or more interest in the profits or capital of such partnership, and (III) with respect to an estate or trust, 15 percent or more of the beneficial interests in such estate or trust. For purposes of determining a significant ownership interest, an interest owned by or for a corporation, partnership, trust, or estate shall be considered as owned directly both by itself and proportionately by its shareholders, partners, or beneficiaries, as the case may be. . (b) Effective date and special rule (1) In general The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2022. (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. 11. Modifications of foreign tax credit rules applicable to dual capacity taxpayers (a) In general Section 901 of the Internal Revenue 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 dual capacity taxpayers (1) General rule Notwithstanding any other provision of this chapter, any amount paid or accrued by a dual capacity taxpayer to a foreign country or possession of the United States for any period with respect to combined foreign oil and gas income (as defined in section 907(b)(1)) shall not be considered a tax to the extent such amount exceeds the amount (determined in accordance with regulations) which would have been required to be paid if the taxpayer were not a dual capacity taxpayer. (2) Dual capacity taxpayer For purposes of this subsection, the term dual capacity taxpayer means, with respect to any foreign country or possession of the United States, a person who— (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 determined in accordance with regulations) from such country or possession. . (b) Effective date (1) In general The amendments made by this section shall apply to taxes paid or accrued in taxable years beginning after December 31, 2022. (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. 12. Clarification of tar sands as crude oil for excise tax purposes (a) In general Section 4612(a)(1) of the Internal Revenue Code of 1986 is amended to read as follows: (1) Crude oil The term crude oil includes crude oil condensates, natural gasoline, any bitumen or bituminous mixture, any oil derived from a bitumen or bituminous mixture (including oil derived from tar sands), and any oil derived from kerogen-bearing sources (including oil derived from oil shale). . (b) Regulatory authority To address other types of crude oil and petroleum products Section 4612(a) of such Code is amended by adding at the end the following new paragraph: (10) Regulatory authority to address other types of crude oil and petroleum products Under such regulations as the Secretary may prescribe, the Secretary may include as crude oil or as a petroleum product subject to tax under section 4611, any fuel feedstock or finished fuel product customarily transported by pipeline, vessel, railcar, or tanker truck if the Secretary determines that— (A) the classification of such fuel feedstock or finished fuel product is consistent with the definition of oil under the Oil Pollution Act of 1990, and (B) such fuel feedstock or finished fuel product is produced in sufficient commercial quantities as to pose a significant risk of hazard in the event of a discharge. . (c) Technical amendment Section 4612(a)(2) of such Code is amended by striking from a well located . (d) Effective date The amendments made by this section shall take effect on the date of the enactment of this Act. 13. 2022 gas prices rebate (a) In general Subchapter B of chapter 65 of the Internal Revenue Code of 1986 is amended by inserting after section 6428B the following new section: 6428C. 2022 gas prices rebate (a) In general In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2022 an amount equal to the 2022 gas prices rebate amount determined for such taxable year. (b) 2022 gas prices rebate amount For purposes of this section, the term 2022 gas prices rebate amount means, with respect to any taxpayer for any taxable year, the sum of— (1) $500 ($1,000 in the case of a joint return), plus (2) $500 multiplied by the number of dependents of the taxpayer for such taxable year who had attained the age of 16 as of the close of such taxable year. (c) Eligible individual For purposes of this section, the term eligible individual means any individual other than— (1) any nonresident alien individual, (2) any individual who is a dependent of another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins, and (3) an estate or trust. (d) Definitions and special rules (1) Dependent defined For purposes of this section, the term dependent has the meaning given such term by section 152. (2) Identification number requirement (A) In general In the case of a return other than a joint return, the $500 amount in subsection (b)(1) shall be treated as being zero unless the taxpayer includes the valid identification number of the taxpayer on the return of tax for the taxable year. (B) Joint returns In the case of a joint return, the $1,000 amount in subsection (b)(1) shall be treated as being— (i) $500 if the valid identification number of only 1 spouse is included on the return of tax for the taxable year, and (ii) zero if the valid identification number of neither spouse is so included. (C) Dependents A dependent shall not be taken into account under subsection (b)(2) unless the valid identification number of such dependent is included on the return of tax for the taxable year. (D) Valid identification number (i) In general For purposes of this paragraph, the term valid identification number means a social security number issued to an individual by the Social Security Administration on or before the due date for filing the return for the taxable year. (ii) Adoption taxpayer identification number For purposes of subparagraph (C), in the case of a dependent who is adopted or placed for adoption, the term valid identification number shall include the adoption taxpayer identification number of such dependent. (E) Special rule for members of the armed forces Subparagraph (B) shall not apply in the case where at least 1 spouse was a member of the Armed Forces of the United States at any time during the taxable year and the valid identification number of at least 1 spouse is included on the return of tax for the taxable year. (F) Coordination with certain advance payments In the case of any payment determined pursuant to subsection (f)(6), a valid identification number shall be treated for purposes of this paragraph as included on the taxpayer’s return of tax if such valid identification number is available to the Secretary as described in such subsection. (G) Mathematical or clerical error authority Any omission of a correct valid identification number required under this paragraph shall be treated as a mathematical or clerical error for purposes of applying section 6213(g)(2) to such omission. (3) Credit treated as refundable The credit allowed by subsection (a) shall be treated as allowed by subpart C of part IV of subchapter A of chapter 1. (e) Coordination with advance refunds of credit (1) Reduction of refundable credit The amount of the credit which would (but for this paragraph) be allowable under subsection (a) shall be reduced (but not below zero) by the aggregate refunds and credits made or allowed to the taxpayer (or, except as otherwise provided by the Secretary, any dependent of the taxpayer) under subsection (f). Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1). (2) Joint returns Except as otherwise provided by the Secretary, in the case of a refund or credit made or allowed under subsection (f) with respect to a joint return, half of such refund or credit shall be treated as having been made or allowed to each individual filing such return. (f) Advance refunds and credits (1) In general Subject to paragraphs (5) and (6), each individual who was an eligible individual for such individual’s first taxable year beginning in 2020 shall be treated as having made a payment against the tax imposed by chapter 1 for such taxable year in an amount equal to the advance refund amount for such taxable year. (2) Advance refund amount (A) In general For purposes of paragraph (1), the advance refund amount is the amount that would have been allowed as a credit under this section for such taxable year if this section (other than subsection (e) and this subsection) had applied to such taxable year. (B) Treatment of deceased individuals For purposes of determining the advance refund amount with respect to such taxable year— (i) any individual who was deceased before January 1, 2022, shall be treated for purposes of applying subsection (e)(2) in the same manner as if the valid identification number of such person was not included on the return of tax for such taxable year (except that subparagraph (E) thereof shall not apply), (ii) notwithstanding clause (i), in the case of a joint return with respect to which only spouse is deceased before January 1, 2022, such deceased spouse was a member of the Armed Forces of the United States at any time during the taxable year, and the valid identification number of such deceased spouse is included on the return of tax for the taxable year, the valid identification number of 1 (and only 1) spouse shall be treated as included on the return of tax for the taxable year for purposes of applying subsection (e)(2)(B) with respect to such joint return, and (iii) no amount shall be determined under subsection (d)(2) with respect to any dependent of the taxpayer if the taxpayer (both spouses in the case of a joint return) was deceased before January 1, 2022. (3) Timing and manner of payments The Secretary shall, subject to the provisions of this title and consistent with rules similar to the rules of subparagraphs (B) and (C) of section 6428A(f)(3), refund or credit any overpayment attributable to this subsection as rapidly as possible, consistent with a rapid effort to make payments attributable to such overpayments electronically if appropriate. No refund or credit shall be made or allowed under this subsection after December 31, 2022. (4) No interest No interest shall be allowed on any overpayment attributable to this subsection. (5) Application to individuals who have filed a return of tax for 2021 (A) Application to 2021 returns filed at time of initial determination If, at the time of any determination made pursuant to paragraph (3), the individual referred to in paragraph (1) has filed a return of tax for the individual’s first taxable year beginning in 2021, paragraph (1) shall be applied with respect to such individual by substituting 2021 for 2020 . (B) Additional payment (i) In general In the case of any individual who files, before the additional payment determination date, a return of tax for such individual’s first taxable year beginning in 2021, the Secretary shall make a payment (in addition to any payment made under paragraph (1)) to such individual equal to the excess (if any) of— (I) the amount which would be determined under paragraph (1) (after the application of subparagraph (A)) by applying paragraph (1) as of the additional payment determination date, over (II) the amount of any payment made with respect to such individual under paragraph (1). (ii) Additional payment determination date The term additional payment determination date means the earlier of— (I) the date which is 90 days after the 2021 calendar year filing deadline, or (II) September 1, 2022. (iii) 2021 calendar year filing deadline The term 2021 calendar year filing deadline means the date specified in section 6072(a) with respect to returns for calendar year 2021. Such date shall be determined after taking into account any period disregarded under section 7508A if such disregard applies to substantially all returns for calendar year 2021 to which section 6072(a) applies. (6) Application to certain individuals who have not filed a return of tax for 2020 or 2021 at time of determination In the case of any individual who, at the time of any determination made pursuant to paragraph (3), has filed a tax return for neither the year described in paragraph (1) nor for the year described in paragraph (5)(A), the Secretary shall, consistent with rules similar to the rules of section 6428A(f)(5)(H)(i), apply paragraph (1) on the basis of information available to the Secretary and shall, on the basis of such information, determine the advance refund amount with respect to such individual. (7) Special rule related to time of filing return Solely for purposes of this subsection, a return of tax shall not be treated as filed until such return has been processed by the Internal Revenue Service. (8) Restriction on use of certain previously issued prepaid debit cards Payments made by the Secretary to individuals under this section shall not be in the form of an increase in the balance of any previously issued prepaid debit card if, as of the time of the issuance of such card, such card was issued solely for purposes of making payments under section 6428, 6428A, or 6428B. (g) Regulations The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including— (1) regulations or other guidance providing taxpayers the opportunity to provide the Secretary information sufficient to allow the Secretary to make payments to such taxpayers under subsection (f) (including the determination of the amount of such payment) if such information is not otherwise available to the Secretary, and (2) regulations or other guidance to ensure to the maximum extent administratively practicable that, in determining the amount of any credit under subsection (a) and any credit or refund under subsection (f), an individual is not taken into account more than once, including by different taxpayers and including by reason of a change in joint return status or dependent status between the taxable year for which an advance refund amount is determined and the taxable year for which a credit under subsection (a) is determined. (h) Outreach The Secretary shall carry out a robust and comprehensive outreach program to ensure that all taxpayers described in subsection (g)(1) learn of their eligibility for the advance refunds and credits under subsection (f); are advised of the opportunity to receive such advance refunds and credits as provided under subsection (g)(1); and are provided assistance in applying for such advance refunds and credits. . (b) Treatment of certain possessions (1) Payments to possessions with mirror code tax systems The Secretary of the Treasury shall pay to each possession of the United States which has a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the amendments made by this section. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession. (2) Payments to other possessions The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits (if any) that would have been provided to residents of such possession by reason of the amendments made by this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to its residents. (3) Inclusion of administrative expenses The Secretary of the Treasury shall pay to each possession of the United States to which the Secretary makes a payment under paragraph (1) or (2) an amount equal to the lesser of— (A) the increase (if any) of the administrative expenses of such possession— (i) in the case of a possession described in paragraph (1), by reason of the amendments made by this section, and (ii) in the case of a possession described in paragraph (2), by reason of carrying out the plan described in such paragraph, or (B) $500,000 ($10,000,000 in the case of Puerto Rico). The amount described in subparagraph (A) shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession. (4) Coordination with credit allowed against United States income taxes No credit shall be allowed against United States income taxes under section 6428C of the Internal Revenue Code of 1986 (as added by this section), nor shall any credit or refund be made or allowed under subsection (f) of such section, to any person— (A) to whom a credit is allowed against taxes imposed by the possession by reason of the amendments made by this section, or (B) who is eligible for a payment under a plan described in paragraph (2). (5) Mirror code tax system For purposes of this subsection, the term mirror code tax system means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. (6) Treatment of payments For purposes of section 1324 of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. (c) Administrative provisions (1) Definition of deficiency Section 6211(b)(4)(A) of the Internal Revenue Code of 1986 is amended by inserting 6428C, after 6428B, . (2) Exception from reduction or offset Any refund payable by reason of section 6428C(f) of the Internal Revenue Code of 1986 (as added by this section), or any such refund payable by reason of subsection (b) of this section, shall not be— (A) subject to reduction or offset pursuant to subsection (c), (d), (e), or (f) of section 6402 of the Internal Revenue Code of 1986 or any similar authority permitting offset, or (B) reduced or offset by other assessed Federal taxes that would otherwise be subject to levy or collection. (3) Conforming amendments (A) Section 1324(b)(2) of title 31, United States Code, is amended by inserting 6428C, after 6428B, . (B) The table of sections for subchapter B of chapter 65 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 6428A the following new item: Sec. 6428C. 2022 gas prices rebate. .