[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 940 Placed on Calendar Senate (PCS)]
Calendar No. 42
112th CONGRESS
1st Session
S. 940
To reduce the Federal budget deficit by closing big oil tax loopholes,
and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 10, 2011
Mr. Menendez (for himself, Mrs. McCaskill, Mr. Tester, Mr. Brown of
Ohio, Mr. Reid, Mr. Durbin, Mr. Schumer, Mrs. Murray, Mr. Leahy, Mr.
Reed, Mr. Nelson of Florida, Mr. Lautenberg, Mr. Whitehouse, Mrs.
Boxer, Ms. Mikulski, Mrs. Gillibrand, Mr. Coons, Mr. Rockefeller, Mr.
Blumenthal, Mr. Franken, Mr. Cardin, Ms. Stabenow, Mr. Merkley, Mr.
Johnson of South Dakota, Mr. Sanders, Mrs. Shaheen, Mrs. Feinstein, and
Ms. Klobuchar) introduced the following bill; which was read the first
time
May 11, 2011
Read the second time and placed on the calendar
_______________________________________________________________________
A BILL
To reduce the Federal budget deficit by closing big oil tax loopholes,
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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Close Big Oil Tax
Loopholes Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Sense of Senate on high gas prices.
TITLE I--CLOSE BIG OIL TAX LOOPHOLES
Sec. 101. Modifications of foreign tax credit rules applicable to major
integrated oil companies which are dual
capacity taxpayers.
Sec. 102. Limitation on section 199 deduction attributable to oil,
natural gas, or primary products thereof.
Sec. 103. Limitation on deduction for intangible drilling and
development costs.
Sec. 104. Limitation on percentage depletion allowance for oil and gas
wells.
Sec. 105. Limitation on deduction for tertiary injectants.
TITLE II--OUTER CONTINENTAL SHELF OIL AND NATURAL GAS
Sec. 201. Repeal of outer Continental Shelf deep water and deep gas
royalty relief.
TITLE III--MISCELLANEOUS
Sec. 301. Deficit reduction.
Sec. 302. Budgetary effects.
SEC. 2. FINDINGS.
Congress finds that--
(1) gas prices have risen significantly largely in response
to unrest in north Africa and the Middle East, unrest that
speculators are capitalizing on to increase oil futures prices
and make huge profits;
(2) high gas prices are hurting the quality of life of
people of the United States, cutting into savings, and
jeopardizing jobs and the economic recovery of the United
States;
(3) implementation of the regulatory reforms enacted by
Congress in the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Public Law 111-203; 124 Stat. 1376) to prevent
energy market manipulation and control excessive speculation
has been delayed and has been threatened with funding
reductions in the House of Representatives;
(4) the United States is producing more oil than any time
in the last 13 years and companies hold abundant inventories of
oil, but the United States is still importing more than
11,000,000 barrels of oil per day and the Energy Information
Administration projects that full production in all onshore and
offshore areas would reduce gas prices by only 3 cents per
gallon by 2030;
(5) domestic refining capacity now exceeds United States
demand for refined petroleum products, resulting in increased
idle refinery capacity;
(6) oil companies are sitting idly on approximately
60,000,000 acres of leased Federal lands and waters containing
more than 11,000,000,000 barrels of oil and 59,000,000,000,000
cubic feet of natural gas;
(7) the United States possesses less than 2 percent of the
proven oil reserves of the world, yet consumes an unsustainable
25 percent of the oil production of the world;
(8) the economy of the United States suffers huge net
losses in jobs and productivity from the growing annual trade
deficit in energy, due mainly to the outflow of
$250,000,000,000 or more to pay for foreign oil;
(9) world oil prices have risen steadily since the slow
beginning of the global economic recovery and, absent major
efficiency or conservation improvements or deployment of
alternative fuels, those oil prices are projected to remain
well above $100 per barrel or higher as world demand grows as
China, India and other countries industrialize;
(10) the oil production policies of cartel of the
Organization of the Petroleum Exporting Countries (OPEC) are a
large determinant of the world price of oil, so the economy of
the United States will be affected by decisions of OPEC as long
as the United States depends on oil for a significant portion
of the energy consumption of the United States;
(11) the major oil companies have accumulated more than
$1,000,000,000,000 in net profits over the last 10 years and
collected more than $40,000,000,000 in tax breaks during the
same period, but have invested negligible amounts of those
funds into research and development of the production of clean
and renewable fuels made in the United States, leaving
consumers with few if any choices at the pump; and
(12) in the Energy Independence and Security Act of 2007
(42 U.S.C. 17001 et seq.), Congress increased fuel economy
standards for the first time in 30 years and established
ambitious requirements for domestic biofuels, actions that have
reduced oil consumption and reduced upward pressure on gas
prices.
SEC. 3. SENSE OF SENATE ON HIGH GAS PRICES.
It is the sense of the Senate that--
(1) the President and Administration should be commended
for recognizing the severity of high gas prices and for taking
appropriate actions to help reduce gas prices, including
actions--
(A) to move forward with expeditious and
responsible domestic production in the Gulf of Mexico
and elsewhere;
(B) to form a Task Force led by the Department of
Justice to investigate and eliminate oil and gas price
gouging and market manipulation;
(C) to establish a national oil savings goal to cut
imports by 33 percent by 2025;
(D) to call for 1,000,000 electric vehicles to be
on the road by 2015;
(E) to harmonize corporate average fuel standards
under section 32902 of title 49, United States Code,
(CAFE) and carbon pollution standards to achieve
1,800,000,000 barrels in oil savings from new vehicles
built before 2017, and working with stakeholders to
increase those savings from future year vehicles;
(F) to establish the National Clean Fleets
Partnership and Green Fleet Initiative to reduce diesel
and gasoline use in fleets by incorporating electric
vehicles, alternative fuels like natural gas, and
efficiency measures; and
(G) to clarify and expand the use of E-15 fuel for
new motor vehicles;
(2) Congress should take additional actions to complement
the efforts of the President, including enacting provisions--
(A) to encourage diligent and responsible
development of domestic oil and gas resources onshore
and off-shore;
(B) to eliminate subsidies for major oil and gas
companies and use the savings to promote research,
development, and deployment of affordable alternative
fuels and vehicles;
(C) to give consumers more choices at the pump and
incentives for buying vehicles that displace petroleum
consumption; and
(D) to direct and fund the Commodity Futures
Trading Commission and the Federal Trade Commission to
rapidly implement the energy consumer protection
requirements of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (Public Law 111-203; 124 Stat.
1376);
(3) the Organization of the Petroleum Exporting Countries
(OPEC) should contribute to the stabilization of world oil
markets and prices and reduce the burden of high gasoline
prices borne by the consumers in the United States by using
existing idle oil production capacity to compensate for any
supply shortages experienced in member countries; and
(4) the economic, environmental, and national security of
the United States depend on a sustained effort to drastically
reduce and eventually eliminate the dependency of the United
States on oil.
TITLE I--CLOSE BIG OIL TAX LOOPHOLES
SEC. 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.
SEC. 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, 2011.
SEC. 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, 2011.
SEC. 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, 2011.
SEC. 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, 2011.
TITLE II--OUTER CONTINENTAL SHELF OIL AND NATURAL GAS
SEC. 201. 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) Administration.--The Secretary of the Interior shall not be
required to provide for royalty relief in the lease sale terms
beginning with the first lease sale held on or after the date of
enactment of this Act for which a final notice of sale has not been
published.
TITLE III--MISCELLANEOUS
SEC. 301. 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.
SEC. 302. BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of complying
with the Statutory Pay-As-You-Go-Act of 2010, shall be determined by
reference to the latest statement titled ``Budgetary Effects of PAYGO
Legislation'' for this Act, submitted for printing in the Congressional
Record by the Chairman of the Senate Budget Committee, provided that
such statement has been submitted prior to the vote on passage.
Calendar No. 42
112th CONGRESS
1st Session
S. 940
_______________________________________________________________________
A BILL
To reduce the Federal budget deficit by closing big oil tax loopholes,
and for other purposes.
_______________________________________________________________________
May 11, 2011
Read the second time and placed on the calendar