H.R. 2956 — Introduced in House

I 113th CONGRESS 1st Session H. R. 2956 IN THE HOUSE OF REPRESENTATIVES August 1, 2013 Mr. Murphy of Florida (for himself, Mr. Blumenauer, Ms. Esty, and Mr. Barber) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To eliminate unnecessary oil tax credits and subsidies for major oil companies to reduce the national debt. 1. Short title This Act may be cited as the End Welfare for Big Oil Act of 2013. I Repeal of oil and gas subsidies A Close big oil tax loopholes 101. 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 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 major integrated 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 the United States for any period shall not be considered a tax— (A) if, for such period, the foreign country or possession does not impose a generally applicable income tax, or (B) to the extent such amount exceeds the amount (determined in accordance with regulations) which— (i) is paid by such dual capacity taxpayer pursuant to the generally applicable income tax imposed by the country or possession, or (ii) would be paid if the generally applicable 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 subparagraph (B). (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. (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 imposed 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 application, by its terms and in practice, to— (i) persons who are not dual capacity taxpayers, and (ii) persons who are citizens or residents of the foreign 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 the date of the enactment 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. 102. Limitation on section 199 deduction attributable to oil, natural gas, or primary products thereof (a) Denial of deduction Paragraph (4) of section 199(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (E) Special rule for certain oil and gas income In the case of any taxpayer who is a major integrated oil company (as defined in section 167(h)(5)(B)) for the taxable year, the term domestic production gross receipts 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. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2013. 103. 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 taxable years beginning after December 31, 2013. 104. Limitation on percentage depletion allowance for oil and gas wells (a) In general Section 613A of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (f) Application with respect to major integrated 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. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2013. 105. Limitation on deduction for 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) Application with respect to major integrated 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 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 taxable years beginning after December 31, 2013. B Outer Continental Shelf oil and natural gas 111. Repeal of outer Continental Shelf deep water and deep gas royalty relief (a) In general Sections 344 and 345 of the Energy Policy Act of 2005 (42 U.S.C. 15904, 15905) are repealed. (b) Limitation on application The repeal under subsection (a) shall not affect the application of the repealed sections with respect to any lease sale for which a notice of sale is published before the date of enactment of this Act. II Budgetary effects 201. Deficit reduction The net amount of any savings realized as a result of the enactment of this Act and the amendments made by this Act (after any expenditures authorized by this Act and the amendments made by this Act) shall be deposited in the Treasury and used for Federal budget deficit reduction or, if there is no Federal budget deficit, for reducing the Federal debt in such manner as the Secretary of the Treasury considers appropriate.