S.Amdt. 1436

SA 1436. Mr. MENENDEZ submitted an amendment intended to be proposed
to amendment SA 1407 submitted by Ms. Murkowski and intended to be
proposed to the bill S. 2657, to support innovation in advanced
geothermal research and development, and for other purposes; which was
ordered to lie on the table; as follows:

At the appropriate place, insert the following:

TITLE _--CLOSING BIG OIL TAX LOOPHOLES

SEC. _01. SHORT TITLE.

This title may be cited as the ``Close Big Oil Tax
Loopholes Act''.

Subtitle A--Close Big Oil Tax Loopholes

SEC. _11. 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 (within the
meaning of section 167(h)(5)) 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.''.

[[Page S1416]]

(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. _12. LIMITATION ON DEDUCTION FOR INTANGIBLE DRILLING AND
DEVELOPMENT COSTS; AMORTIZATION OF DISALLOWED
AMOUNTS.

(a) In General.--Section 263(c) of the Internal Revenue
Code of 1986 is amended to read as follows:
``(c) Intangible Drilling and Development Costs in the Case
of Oil and Gas Wells and Geothermal Wells.--
``(1) In general.--Notwithstanding subsection (a), and
except as provided in subsection (i), 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 50,
Seventy-ninth Congress. 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 (as defined in section 613(e)(2)) to the
same extent and in the same manner as such expenses are
deductible in the case of oil and gas wells. This subsection
shall not apply with respect to any costs to which any
deduction is allowed under section 59(e) or 291.
``(2) Exclusion.--
``(A) In general.--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 (within
the meaning of section 167(h)(5)).
``(B) Amortization of amounts not allowable as deductions
under subparagraph (a).--The amount not allowable as a
deduction for any taxable year by reason of subparagraph (A)
shall be allowable as a deduction ratably over the 60-month
period beginning with the month in which the costs are paid
or incurred. For purposes of section 1254, any deduction
under this subparagraph shall be treated as a deduction under
this subsection.''.
(b) Effective Date.--The amendment made by this section
shall apply to amounts paid or incurred in taxable years
beginning after December 31, 2020.

SEC. _13. 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 (within the
meaning of section 167(h)(5)), 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,
2020.

SEC. _15. 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.--
``(1) In general.--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 (within the
meaning of section 167(h)(5)).
``(2) Amortization of amounts not allowable as deductions
under paragraph (1).--The amount not allowable as a deduction
for any taxable year by reason of paragraph (1) shall be
allowable as a deduction ratably over the 60-month period
beginning with the month in which the costs are paid or
incurred.''.
(b) Effective Date.--The amendment made by this section
shall apply to amounts paid or incurred in taxable years
beginning after December 31, 2020.

SEC. _16. MODIFICATION OF DEFINITION OF MAJOR INTEGRATED OIL
COMPANY.

(a) In General.--Paragraph (5) of section 167(h) of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new subparagraph:
``(C) Certain successors in interest.--For purposes of this
paragraph, the term `major integrated oil company' includes
any successor in interest of a company that was described in
subparagraph (B) in any taxable year, if such successor
controls more than 50 percent of the crude oil production or
natural gas production of such company.''.
(b) Conforming Amendments.--
(1) In general.--Subparagraph (B) of section 167(h)(5) of
the Internal Revenue Code of 1986 is amended by inserting
``except as provided in subparagraph (C),'' after ``For
purposes of this paragraph,''.
(2) Taxable years tested.--Clause (iii) of section
167(h)(5)(B) of such Code is amended--
(A) by striking ``does not apply by reason of paragraph (4)
of section 613A(d)'' and inserting ``did not apply by reason
of paragraph (4) of section 613A(d) for any taxable year
after 2004'', and
(B) by striking ``does not apply'' in subclause (II) and
inserting ``did not apply for the taxable year''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2020.

Subtitle B--Outer Continental Shelf Oil and Natural Gas

SEC. _21. 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.

Subtitle C--Miscellaneous

SEC. _31. DEFICIT REDUCTION.

The net amount of any savings realized as a result of the
enactment of this title and the amendments made by this title
(after any expenditures authorized by this title and the
amendments made by this title) 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. _32. BUDGETARY EFFECTS.

The budgetary effects of this title, 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 title,
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.
______