119-hr383

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 383 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 383

 To amend the Internal Revenue Code of 1986 to repeal fossil fuel 
 subsidies for oil companies, and for other purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 January 14, 2025

 Mr. Casten (for himself, Mr. Beyer, Mr. Levin, Ms. Brownley, Mr. 
 Cleaver, Mr. Cohen, Mr. Huffman, Mr. Khanna, Ms. Pingree, Ms. 
 Schakowsky, Mr. Tonko, and Ms. Moore of Wisconsin) 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, 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. SHORT TITLE.

 This Act may be cited as the ``End Oil and Gas Tax Subsidies Act of 
2025''.

SEC. 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, 2024.

SEC. 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, 2024.

SEC. 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, 2024.

SEC. 5. INTANGIBLE DRILLING AND DEVELOPMENT COSTS IN THE CASE OF OIL 
 AND GAS WELLS.

    (a) In General.--Subsection
            (c) of 

section 263 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, 
2024.''.

    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred in taxable years beginning after December 
31, 2024.

SEC. 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) Subsection
            (d) of 

section 45H 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 End Oil and Gas Tax Subsidies Act of 2025.''.

    (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, 2024.

SEC. 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, 2024.

SEC. 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, 2024.

SEC. 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, 2024.

SEC. 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, 2024.

    (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.

SEC. 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, 2024.

    (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.

SEC. 12. CLARIFICATION OF TAR SANDS AS CRUDE OIL FOR EXCISE TAX 
 PURPOSES.

    (a) In General.--Paragraph

    (1) of 

section 4612

    (a) 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.--Subsection

    (a) of 

section 4612 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.--Paragraph

    (2) of 

section 4612

    (a) 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.
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