,,ii #aagth ,,congress #b;d ,session ,s4 #ebaf ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,december #h1 #bjbb ,mr4 ,menendez 7for himself1 ,mr4 ,padilla1 ,mr4 ,booker1 ,mrs4 ,shaheen1 ,ms4 ,hirono1 ,mr4 ,cardin1 and ,mrs4 ,murray7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to reduce the ,federal budget deficit by closing big oil tax loopholes1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,close ,big ,oil ,tax ,loopholes ,act4 7b7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,,title ,i--,close big oil tax loopholes ,sec4 #aja4 ,modifications of foreign tax credit rules applicable to major integrated oil companies which are dual capacity taxpayers4 ,sec4 #ajb4 ,limitation on deduction for intangible drilling and development costs2 amortization of disallowed amounts4 ,sec4 #ajc4 ,limitation on percentage depletion allowance for oil and gas wells4 ,sec4 #ajd4 ,limitation on deduction for tertiary injectants4 ,sec4 #aje4 ,limitation on enhanced oil recovery credit4 ,sec4 #ajf4 ,limitation on credit for carbon oxide sequestration4 ,,title ,,ii--,outer ,continental ,shelf oil and natural gas ,sec4 #bja4 ,repeal of outer ,continental ,shelf deep water and deep gas royalty relief4 ,,title ,,iii--,miscellaneous ,sec4 #cja4 ,deficit reduction4 ,sec4 #cjb4 ,budgetary effects4 ,i ,close big oil tax loopholes #aja4 ,modifications of foreign tax credit rules applicable to major integrated oil companies which are 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 7within the meaning of section #afg7;h77#e77 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 the date of the enactment of this ,act4 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 #ajb4 ,limitation on deduction for intangible drilling and development costs2 amortization of disallowed amounts 7a7 ,in general ,section #bfc7;c7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7c7 ,intangible drilling and development costs in the case of oil and gas wells and geothermal wells 7#a7 ,in general ,notwithstanding subsection 7a71 and except as provided in subsection 7i71 regulations shall be prescribed by the ,secretary under this subtitle corresponding to the regulations which granted the option to deduct as expenses intangible drilling and development costs in the case of oil and gas wells and which were recognized and approved by the ,congress in ,house ,concurrent ,resolution #ej1 ,seventy-ninth ,congress4 ,such regulations shall also grant the option to deduct as expenses intangible drilling and development costs in the case of wells drilled for any geothermal deposit 7as defined in section #fac7;e77#b77 to the same extent and in the same manner as such expenses are deductible in the case of oil and gas wells4 ,this subsection shall not apply with respect to any costs to which any deduction is allowed under section #ei7;e7 or #bia4 7#b7 ,exclusion 7,a7 ,in general ,this subsection shall not apply to amounts paid or incurred by a taxpayer in any taxable year in which such taxpayer is an applicable large taxpayer4 7,b7 ,applicable large taxpayer ,for purposes of this paragraph-- 7i7 ,in general ,the term applicable large taxpayer means1 with respect to any taxable year1 any taxpayer with gross receipts 7within the meaning of section #ddh7;c77 for such taxable year in excess of #ej1jjj1jjj4 7ii7 ,aggregation rule ,all persons treated as a single employer under subsection 7a7 or 7b7 of section #eb or subsection 7m7 or 7o7 of section #dad shall be treated as one person for purposes of clause 7i74 7,c7 ,amortization of amounts not allowable as deductions under subparagraph 7,a7 ,the amount not allowable as a deduction for any taxable year by reason of subparagraph 7,a7 shall be allowable as a deduction ratably over the #fj-month period beginning with the month in which the costs are paid or incurred4 ,for purposes of section #abed1 any deduction under this subparagraph shall be treated as a deduction under this subsection4 4 7b7 ,effective date ,the amendment made by this section shall apply to amounts paid or incurred in taxable years beginning after ,december #ca1 #bjbb4 #ajc4 ,limitation on percentage depletion allowance for oil and gas wells 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 ,application with respect to certain large taxpayers ,in the case of any taxable year in which the taxpayer is an applicable large taxpayer 7as defined in section #bfc7;c77#b771 the allowance for percentage depletion shall be zero4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjbb4 #ajd4 ,limitation on deduction for 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 ,application with respect to certain large taxpayers 7#a7 ,in general ,this section shall not apply to amounts paid or incurred by a taxpayer in any taxable year in which such taxpayer is an applicable large taxpayer 7as defined in section #bfc7;c77#b774 7#b7 ,amortization of amounts not allowable as deductions under paragraph 7#a7 ,the amount not allowable as a deduction for any taxable year by reason of paragraph 7#a7 shall be allowable as a deduction ratably over the #fj-month period beginning with the month in which the costs are paid or incurred4 4 7b7 ,effective date ,the amendment made by this section shall apply to amounts paid or incurred in taxable years beginning after ,december #ca1 #bjbb4 #aje4 ,limitation on enhanced oil recovery credit 7a7 ,in general ,section #dc of the ,internal ,revenue ,code of #aihf is amended by redesignating subsections 7d7 and 7e7 as subsections 7e7 and 7f71 respectively1 and by inserting after subsection 7c7 the following new subsection3 7d7 ,application with respect to certain large taxpayers ,in the case of any taxable year in which the taxpayer is an applicable large taxpayer 7as defined in section #bfc7;c77#b771 subsection 7a7 shall be applied by substituting #j percent for #ae percent4 4 7b7 ,effective date ,the amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after ,december #ca1 #bjbb4 #ajf4 ,limitation on credit for carbon oxide sequestration 7a7 ,in general ,section #de,q7f7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#aj7 ,elimination of use of carbon oxide as tertiary injectant ,in the case of any qualified facility the construction of which begins after the date of the enactment of the ,close ,big ,oil ,tax ,loopholes ,act1 subsection 7a77#d77;,b77i7 shall not apply4 4 7b7 ,effective date ,the amendment made by this section shall apply to amounts paid or incurred in taxable years beginning after ,december #ca1 #bjbb4 ,,ii ,outer ,continental ,shelf oil and natural gas #bja4 ,repeal of outer ,continental ,shelf deep water and deep gas royalty relief 7a7 ,in general ,sections #cdd and #cde of the ,energy ,policy ,act of #bjje 7#db ,u4,s4,c4 #aeijd1 #aeije7 are repealed4 7b7 ,administration ,with respect to any lease described in section #cdd or #cde of the ,energy ,policy ,act of #bjje 7#db ,u4,s4,c4 #aeijd1 #aeije7 7as in effect on the day before the date of enactment of this ,act71 beginning with the first lease sale held on or after that date of enactment for which a final notice of sale has not been published1 the ,secretary of the ,interior shall not be required to provide for royalty relief in the lease sale terms4 ,,iii ,miscellaneous #cja4 ,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 7after any expenditures authorized by this ,act and the amendments made by this ,act7 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 #cjb4 ,budgetary effects ,the budgetary effects of this ,act1 for the purpose of complying with the ,statutory ,pay-,as-,you-,go ,act of #bjaj1 shall be determined by reference to the latest statement titled ,budgetary ,effects of ,,paygo ,legislation for this ,act1 submitted for printing in the ,congressional ,record by the ,chairman of the ,senate ,budget ,committee1 provided that such statement has been submitted prior to the vote on passage4