,i #aacth ,,congress #ast ,session ,h4 ,r4 #fja ,,in ,,the ,,house ,,of ,,representatives ,february #h1 #bjac ,mr4 ,markey 7for himself and ,mr4 ,blumenauer7 introduced the following bill2 which was referred to the ,committee on ,natural ,resources1 and in addition to the ,committee on ,ways and ,means1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to direct the ,secretary of the ,interior to establish an annual production incentive fee with respect to ,federal onshore and offshore lands that are subject to a lease for production of oil or natural gas under which production is not occurring1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,permanent ,repeal of ,oil ,subsidies ,act4 #b4 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title4 ,sec4 #b4 ,table of contents4 ,title ,i--,,use ,,it ,act ,sec4 #aja4 ,short title4 ,sec4 #ajb4 ,production incentive fee4 ,title ,,ii--,deficit ,reduction ,through ,fair ,oil ,royalties ,sec4 #bja4 ,short title4 ,sec4 #bjb4 ,eligibility for new leases and the transfer of leases4 ,sec4 #bjc4 ,price thresholds for royalty suspension provisions4 ,sec4 #bjd4 ,repeal of royalty relief provisions4 ,title ,,iii--,,ocs ,facility ,inspections ,sec4 #cja4 ,short title4 ,sec4 #cjb4 ,,ocs facility inspection fees4 ,title ,,iv--,repeal of ,fossil ,fuel ,subsidies ,for ,large ,oil ,companies ,sec4 #dja4 ,short title4 ,sec4 #djb4 ,amortization of geological and geophysical expenditures4 ,sec4 #djc4 ,producing oil and gas from marginal wells4 ,sec4 #djd4 ,enhanced oil recovery credit4 ,sec4 #dje4 ,intangible drilling and development costs in the case of oil and gas wells4 ,sec4 #djf4 ,percentage depletion4 ,sec4 #djg4 ,tertiary injectants4 ,sec4 #djh4 ,passive activity losses and credits limited4 ,sec4 #dji4 ,income attributable to domestic production activities4 ,sec4 #daj4 ,prohibition on using last-in1 first-out accounting for major integrated oil companies4 ,sec4 #daa4 ,modifications of foreign tax credit rules applicable to dual capacity taxpayers4 ,i ,,use ,,it ,act #aja4 ,short title ,this title may be cited as the ,united ,states ,exploration on ,idle ,tracts ,act or the ,,use ,,it ,act4 #ajb4 ,production incentive fee 7a7 ,establishment ,the ,secretary of the ,interior shall1 within #ahj days after the date of enactment of this ,act1 issue regulations to establish an annual production incentive fee with respect to ,federal onshore and offshore lands that are subject to a lease for production of oil or natural gas under which production is not occurring4 ,such fee shall apply with respect to lands that are subject to such a lease that is in effect on the date final regulations are promulgated under this subsection or that is issued thereafter4 7b7 ,amount ,the amount of the fee shall be1 for each acre of land from which oil or natural gas is produced for less than #ij days in a calendar year-- 7#a7 in the case of onshore land-- 7,a7 for each of the first #c years of the lease1 #d per acre in #bjaa dollars2 7,b7 for the fourth year of the lease1 #f per acre in #bjaa dollars2 and 7,c7 for the fifth year of the lease and each year thereafter for which the lease is otherwise in effect1 #h per acre in #bjaa dollars2 and 7#b7 in the case of offshore land-- 7,a7 for each of the third1 fourth1 and fifth years of the lease1 #d per acre in #bjaa dollars2 7,b7 for the sixth year of the lease1 #f per acre in #bjaa dollars2 and 7,c7 for the seventh year of the lease and each year thereafter for which the lease is otherwise in effect1 #h per acre in #bjaa dollars4 7c7 ,assessment and collection ,the ,secretary shall assess and collect the fee established under this section4 7d7 ,deposit ,amounts received by the ,united ,states as the fee under this section shall be deposited in the general fund of the ,treasury4 7e7 ,regulations ,the ,secretary of the ,interior may issue regulations to prevent evasion of the fee under this section4 ,,ii ,deficit ,reduction ,through ,fair ,oil ,royalties #bja4 ,short title ,this title may be cited as the ,deficit ,reduction ,through ,fair ,oil ,royalties ,act4 #bjb4 ,eligibility for new leases and the transfer of leases 7a7 ,issuance of ,new ,leases 7#a7 ,in general ,the ,secretary shall not issue any new lease that authorizes the production of oil or natural gas under the ,outer ,continental ,shelf ,lands ,act 7#dc ,u4,s4,c4 #acca et seq47 to a person described in paragraph 7#b7 unless the person has renegotiated each covered lease with respect to which the person is a lessee1 to modify the payment responsibilities of the person to require the payment of royalties if the price of oil and natural gas is greater than or equal to the price thresholds described in clauses 7v7 through 7vii7 of section #h7;a77#c77;,c7 of the ,outer ,continental ,shelf ,lands ,act 7#dc ,u4,s4,c4 #accg7;a77#c77;,c774 7#b7 ,persons described ,a person referred to in paragraph 7#a7 is a person that-- 7,a7 is a lessee that-- 7i7 holds a covered lease on the date on which the ,secretary considers the issuance of the new lease2 or 7ii7 was issued a covered lease before the date of enactment of this ,act1 but transferred the covered lease to another person or entity 7including a subsidiary or affiliate of the lessee7 after the date of enactment of this ,act2 or 7,b7 any other person that has any direct or indirect interest in1 or that derives any benefit from1 a covered lease4 7#c7 ,multiple lessees 7,a7 ,in general ,for purposes of paragraph 7#a71 if there are multiple lessees that own a share of a covered lease1 the ,secretary may implement separate agreements with any lessee with a share of the covered lease that modifies the payment responsibilities with respect to the share of the lessee to include price thresholds that are equal to or less than the price thresholds described in clauses 7v7 through 7vii7 of section #h7;a77#c77;,c7 of the ,outer ,continental ,shelf ,lands ,act 7#dc ,u4,s4,c4 #accg7;a77#c77;,c774 7,b7 ,treatment of share as covered lease ,beginning on the effective date of an agreement under subparagraph 7,a71 any share subject to the agreement shall not constitute a covered lease with respect to any lessees that entered into the agreement4 7b7 ,transfers ,a lessee or any other person who has any direct or indirect interest in1 or who derives a benefit from1 a lease shall not be eligible to obtain by sale or other transfer 7including through a swap1 spinoff1 servicing1 or other agreement7 any covered lease1 the economic benefit of any covered lease1 or any other lease for the production of oil or natural gas in the ,gulf of ,mexico under the ,outer ,continental ,shelf ,lands ,act 7#dc ,u4,s4,c4 #acca et seq471 unless the lessee or other person has-- 7#a7 renegotiated each covered lease with respect to which the lessee or person is a lessee1 to modify the payment responsibilities of the lessee or person to include price thresholds that are equal to or less than the price thresholds described in clauses 7v7 through 7vii7 of section #h7;a77#c77;,c7 of the ,outer ,continental ,shelf ,lands ,act 7#dc ,u4,s4,c4 #accg7;a77#c77;,c772 or 7#b7 entered into an agreement with the ,secretary to modify the terms of all covered leases of the lessee or other person to include limitations on royalty relief based on market prices that are equal to or less than the price thresholds described in clauses 7v7 through 7vii7 of section #h7;a77#c77;,c7 of the ,outer ,continental ,shelf ,lands ,act 7#dc ,u4,s4,c4 #accg7;a77#c77;,c774 7c7 ,use of amounts for deficit reduction ,notwithstanding any other provision of law1 any amounts received by the ,united ,states as rentals or royalties under covered leases shall be deposited in the ,treasury and used for ,federal budget deficit reduction or1 if there is no ,federal budget deficit1 for reducing the ,federal debt in such manner as the ,secretary of the ,treasury considers appropriate4 7d7 ,definitions ,in this section-- 7#a7 ,covered lease ,the term covered lease means a lease for oil or gas production in the ,gulf of ,mexico that is-- 7,a7 in existence on the date of enactment of this ,act2 7,b7 issued by the ,department of the ,interior under section #cjd of the ,outer ,continental ,shelf ,deep ,water ,royalty ,relief ,act 7#dc ,u4,s4,c4 #accg note2 ,public ,law #ajd-eh72 and 7,c7 not subject to limitations on royalty relief based on market price that are equal to or less than the price thresholds described in clauses 7v7 through 7vii7 of section #h7;a77#c77;,c7 of the ,outer ,continental ,shelf ,lands ,act 7#dc ,u4,s4,c4 #accg7;a77#c77;,c774 7#b7 ,lessee ,the term lessee includes any person or other entity that controls1 is controlled by1 or is in or under common control with1 a lessee4 7#c7 ,secretary ,the term ,secretary means the ,secretary of the ,interior4 #bjc4 ,price thresholds for royalty suspension provisions ,the ,secretary of the ,interior shall agree to a request by any lessee to amend any lease issued for any ,central and ,western ,gulf of ,mexico tract in the period of ,january #a1 #aiif1 through ,november #bh1 #bjjj1 to incorporate price thresholds applicable to royalty suspension provisions1 that are equal to or less than the price thresholds described in clauses 7v7 through 7vii7 of section #h7;a77#c77;,c7 of the ,outer ,continental ,shelf ,lands ,act 7#dc ,u4,s4,c4 #accg7;a77#c77;,c774 ,any amended lease shall impose the new or revised price thresholds effective ,october #a1 #bjac4 ,existing lease provisions shall prevail through ,september #cj1 #bjac4 #bjd4 ,repeal of royalty relief provisions 7a7 ,repeal of provisions of ,energy ,policy ,act of #bjje ,the following provisions of the ,energy ,policy ,act of #bjje 7,public ,law #aji-eh7 are repealed3 7#a7 ,section #cdd 7#db ,u4,s4,c4 #aeijd2 relating to incentives for natural gas production from deep wells in shallow waters of the ,gulf of ,mexico74 7#b7 ,section #cde 7#db ,u4,s4,c4 #aeije2 relating to royalty relief for deep water production in the ,gulf of ,mexico74 7b7 ,repeal of provisions relating to ,planning ,areas offshore ,alaska ,section #h7;a77#c77;,b7 of the ,outer ,continental ,shelf ,lands ,act 7#dc ,u4,s4,c4 #accg7;a77#c77;,b77 is amended by striking and in the ,planning ,areas offshore ,alaska4 ,,iii ,,ocs ,facility ,inspections #cja4 ,short title ,this title may be cited as the ,no ,free ,inspections for ,oil ,companies ,act4 #cjb4 ,,ocs facility inspection fees ,section #bb of the ,outer ,continental ,shelf ,lands ,act 7#dc ,u4,s4,c4 #acdh7 is amended by adding at the end of the section the following3 7g7 ,inspection ,fees 7#a7 ,establishment ,the ,secretary of the ,interior shall establish1 by rule1 and collect from the operators of facilities subject to inspection under subsection 7c7 nonrefundable fees for such inspections-- 7,a7 at an aggregate level equal to the amount necessary to offset the annual expenses of inspections of outer ,continental ,shelf facilities 7including mobile offshore drilling units7 by the ,department of the ,interior2 and 7,b7 using a schedule that reflects the differences in complexity among the classes of facilities to be inspected4 7#b7 ,ocean energy enforcement fund ,there is established in the ,treasury a fund1 to be known as the ,ocean ,energy ,enforcement ,fund 7referred to in this subsection as the ,fund71 into which shall be deposited amounts collected as fees under paragraph 7#a7 and which shall be available as provided under paragraph 7#c74 7#c7 ,availability of fees ,notwithstanding section #ccjb of title #ca1 ,united ,states ,code1 all amounts collected by the ,secretary under this section-- 7,a7 shall be credited as offsetting collections2 7,b7 shall be available for expenditure only for purposes of carrying out inspections of outer ,continental ,shelf facilities 7including mobile offshore drilling units7 and the administration of the inspection program under this section2 7,c7 shall be available only to the extent provided for in advance in an appropriations ,act2 and 7,d7 shall remain available until expended4 7#d7 ,annual reports 7,a7 ,in general ,not later than #fj days after the end of each fiscal year beginning with fiscal year #bjac1 the ,secretary shall submit to the ,committee on ,energy and ,natural ,resources of the ,senate and the ,committee on ,natural ,resources of the ,house of ,representatives a report on the operation of the ,fund during the fiscal year4 7,b7 ,contents ,each report shall include1 for the fiscal year covered by the report1 the following3 7i7 ,a statement of the amounts deposited into the ,fund4 7ii7 ,a description of the expenditures made from the ,fund for the fiscal year1 including the purpose of the expenditures4 7iii7 ,recommendations for additional authorities to fulfill the purpose of the ,fund4 7iv7 ,a statement of the balance remaining in the ,fund at the end of the fiscal year4 4 ,,iv ,repeal of ,fossil ,fuel ,subsidies ,for ,large ,oil ,companies #dja4 ,short title ,this ,act may be cited as the ,end ,big ,oil ,tax ,subsidies ,act of #bjac4 #djb4 ,amortization of geological and geophysical expenditures 7a7 ,in general ,subparagraph 7,a7 of section #afg7;h77#e7 of the ,internal ,revenue ,code of #aihf is amended by striking major integrated oil company and inserting covered large oil company4 7b7 ,covered large oil company ,paragraph 7#e7 of section #afg7;h7 of such ,act is amended by redesignating subparagraph 7,b7 as subparagraph 7,c7 and by inserting after subparagraph 7,a7 the following new subparagraph3 7,b7 ,covered large oil company ,for purposes of this paragraph1 the term covered large oil company means a taxpayer which-- 7i7 is a major integrated oil company1 or 7ii7 has gross receipts in excess of #ej1jjj1jjj for the taxable year4 ,for purposes of clause 7ii71 all persons treated as a single employer under subsections 7a7 and 7b7 of section #eb shall be treated as #a person4 4 7c7 ,conforming amendment ,the heading for paragraph 7#e7 of section #afg7;h7 of such ,code is amended by inserting and other large taxpayers4 7d7 ,effective date ,the amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after ,december #ca1 #bjab4 #djc4 ,producing oil and gas from marginal wells 7a7 ,in general ,section #de;,i of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7e7 ,exception for taxpayer with gross receipts in excess of #ej1jjj1jjj 7#a7 ,in general ,subsection 7a7 shall not apply to any taxpayer whose aggregate gross receipts for the taxable year are in excess of #ej1jjj1jjj4 7#b7 ,aggregation rule ,for purposes of paragraph 7#a71 all persons treated as a single employer under subsections 7a7 and 7b7 of section #eb shall be treated as #a person4 4 7b7 ,effective date ,the amendment made by subsection 7a7 shall apply to credits determined for taxable years beginning after ,december #ca1 #bjab4 #djd4 ,enhanced oil recovery credit 7a7 ,in general ,section #dc of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7f7 ,exception for taxpayer with gross receipts in excess of #ej1jjj1jjj 7#a7 ,in general ,subsection 7a7 shall not apply to any taxpayer whose aggregate gross receipts for the taxable year are in excess of #ej1jjj1jjj4 7#b7 ,aggregation rule ,for purposes of paragraph 7#a71 all persons treated as a single employer under subsections 7a7 and 7b7 of section #eb shall be treated as #a person4 4 7b7 ,effective date ,the amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after ,december #ca1 #bjab4 #dje4 ,intangible drilling and development costs in the case of oil and gas wells 7a7 ,in general ,subsection 7c7 of section #bfc of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new sentence3 ,this subsection shall not apply to amounts paid or incurred by a taxpayer in any taxable year in which such taxpayer has aggregate gross receipts for the taxable year in excess of #ej1jjj1jjj1 determined by deeming all persons treated as a single employer under subsections 7a7 and 7b7 of section #eb as #a person44 7b7 ,effective date ,the amendment made by this section shall apply to amounts paid or incurred in taxable years beginning after ,december #ca1 #bjab4 #djf4 ,percentage depletion 7a7 ,in general ,section #fac;,a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7f7 ,exception for taxpayer with gross receipts in excess of #ej1jjj1jjj 7#a7 ,in general ,this section and section #faa shall not apply to any taxpayer which has aggregate gross receipts for the taxable year in excess of #ej1jjj1jjj4 7#b7 ,aggregation rule ,for purposes of paragraph 7#a71 all persons treated as a single employer under subsections 7a7 and 7b7 of section #eb shall be treated as #a person4 4 7b7 ,conforming amendment ,section #fac;,a7c77#a7 of such ,code is amended by striking subsection 7d7 and inserting subsections 7d7 and 7f74 7c7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjab4 #djg4 ,tertiary injectants 7a7 ,in general ,section #aic of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7d7 ,exception for taxpayer with gross receipts in excess of #ej1jjj1jjj 7#a7 ,in general ,subsection 7a7 shall not apply to any taxpayer which has aggregate gross receipts for the taxable year in excess of #ej1jjj1jjj4 7#b7 ,aggregation rule ,for purposes of paragraph 7#a71 all persons treated as a single employer under subsections 7a7 and 7b7 of section #eb shall be treated as #a person4 4 7b7 ,effective date ,the amendment made by this section shall apply to expenses incurred after ,december #ca1 #bjab4 #djh4 ,passive activity losses and credits limited 7a7 ,rules relating to working interests in oil and gas property ,paragraph 7#c7 of section #dfi7;c7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 7,c7 ,exception for taxpayer with gross receipts in excess of #ej1jjj1jjj 7i7 ,in general ,subparagraph 7,a7 shall not apply to any taxpayer which has aggregate gross receipts for the taxable year in excess of #ej1jjj1jjj4 7ii7 ,aggregation rule ,for purposes of clause 7i71 all persons treated as a single employer under subsections 7a7 and 7b7 of section #eb shall be treated as #a person4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjab4 #dji4 ,income attributable to domestic production activities 7a7 ,denial of deduction ,paragraph 7#d7 of section #aii7;c7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subparagraph3 7,e7 ,special rule for certain oil and gas income ,in the case of any taxpayer who is a major integrated oil company 7as defined in section #afg7;h77 for the taxable year1 the term domestic production gross receipts shall not include gross receipts from the production1 transportation1 or distribution of oil1 natural gas1 or any primary product 7within the meaning of subsection 7d77#i77 thereof4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjab4 #daj4 ,prohibition on using last-in1 first-out accounting for major integrated oil companies 7a7 ,in general ,section #dgb of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7h7 ,major integrated oil companies ,notwithstanding any other provision of this section1 a major integrated oil company 7as defined in section #afg7;h77 may not use the method provided in subsection 7b7 in inventorying of any goods4 4 7b7 ,effective date and special rule 7#a7 ,in general ,the amendment made by subsection 7a7 shall apply to taxable years beginning after ,december #ca1 #bjab4 7#b7 ,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-- 7,a7 such change shall be treated as initiated by the taxpayer1 7,b7 such change shall be treated as made with the consent of the ,secretary of the ,treasury1 and 7,c7 the net amount of the adjustments required to be taken into account by the taxpayer under section #dha of the ,internal ,revenue ,code of #aihf shall be taken into account ratably over a period 7not greater than #h taxable years7 beginning with such first taxable year4 #daa4 ,modifications of foreign tax credit rules applicable to dual capacity taxpayers 7a7 ,in general ,section #ija of the ,internal ,revenue ,code of #aihf is amended by redesignating subsection 7n7 as subsection 7o7 and by inserting after subsection 7m7 the following new subsection3 7n7 ,special rules relating to major integrated oil companies which are dual capacity taxpayers 7#a7 ,general rule ,notwithstanding any other provision of this chapter1 any amount paid or accrued by a dual capacity taxpayer which is a major integrated oil company 7as defined in section #afg7;h77 to a foreign country or possession of the ,united ,states for any period shall not be considered a tax-- 7,a7 if1 for such period1 the foreign country or possession does not impose a generally applicable income tax1 or 7,b7 to the extent such amount exceeds the amount 7determined in accordance with regulations7 which-- 7i7 is paid by such dual capacity taxpayer pursuant to the generally applicable income tax imposed by the country or possession1 or 7ii7 would be paid if the generally applicable income tax imposed by the country or possession were applicable to such dual capacity taxpayer4 ,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 7,b74 7#b7 ,dual capacity taxpayer ,for purposes of this subsection1 the term dual capacity taxpayer means1 with respect to any foreign country or possession of the ,united ,states1 a person who-- 7,a7 is subject to a levy of such country or possession1 and 7,b7 receives 7or will receive7 directly or indirectly a specific economic benefit 7as determined in accordance with regulations7 from such country or possession4 7#c7 ,generally applicable income tax ,for purposes of this subsection-- 7,a7 ,in general ,the term generally applicable income tax means an income tax 7or a series of income taxes7 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 possession4 7,b7 ,exceptions ,such term shall not include a tax unless it has substantial application1 by its terms and in practice1 to-- 7i7 persons who are not dual capacity taxpayers1 and 7ii7 persons who are citizens or residents of the foreign country or possession4 4 7b7 ,effective date 7#a7 ,in general ,the amendments made by this section shall apply to taxes paid or accrued in taxable years beginning after ,december #ca1 #bjab4 7#b7 ,contrary treaty obligations upheld ,the amendments made by this section shall not apply to the extent contrary to any treaty obligation of the ,united ,states4