[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3446 Introduced in House (IH)]







104th CONGRESS
  2d Session
                                H. R. 3446

  To amend the Clean Air Act and certain other environmental laws to 
  provide regulatory relief and preserve jobs, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 10, 1996

 Mr. Stockman introduced the following bill; which was referred to the 
  Committee on Commerce, and in addition to the Committee on Ways and 
 Means, for a period to be subsequently determined by the Speaker, in 
   each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
  To amend the Clean Air Act and certain other environmental laws to 
  provide regulatory relief and preserve jobs, 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 ``Regulatory Relief 
and Job Preservation Act of 1996''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                TITLE I--AMENDMENTS OF THE CLEAN AIR ACT

Sec. 101. Enhanced monitoring repeal.
Sec. 102. Reformulated gasoline flexibility.
Sec. 103. Reform of State operating permit procedures.
Sec. 104. Ozone-depleting compounds production and use amendments.
Sec. 105. Mact standards.
Sec. 106. Motor vehicle inspection and maintenance.
Sec. 107. Attainment date for moderate ozone nonattainment areas.
Sec. 108. Ozone exceedences in nonattainment areas.
Sec. 109. Redesignation of attainment areas.
                  TITLE II--ENVIRONMENTAL SELF-AUDITS

Sec. 201. Voluntary environmental self-audits.
         TITLE III--REGULATION OF CHLORINE COMPOUND PRODUCTION

Sec. 301. Broad banning of chlorine compounds prohibited.
          TITLE IV--AMENDMENT OF THE SOLID WASTE DISPOSAL ACT

Sec.  401. Recycling of certain materials as manufacturing feedstocks.
        TITLE V--AMENDMENT OF THE INTERNAL REVENUE CODE OF 1986

Sec. 501. Intangible drilling costs include geological and geophysical 
                            costs.
Sec. 502. Expanded definition of marginal production.
Sec. 503. Tax relief for marginal domestic oil and gas production.
Sec. 504. Repeal of annual increase in tax on ozone-depleting 
                            chemicals.
Sec. 505. Reduction in rate of tax on certain reformulated gasoline.

                TITLE I--AMENDMENTS OF THE CLEAN AIR ACT

SEC. 101. ENHANCED MONITORING REPEAL.

    Section 114(a)(3) of the Clean Air Act (relating to enhanced 
monitoring) is repealed.

SEC. 102. REFORMULATED GASOLINE FLEXIBILITY.

    Section 211(k)(3)(A)(v) of the Clean Air Act is amended to read as 
follows:
    ``(v) The Administrator may not specify a minimum level or 
percentage by weight of oxygen content for reformulated gasoline, and 
any such minimum percentage contained in any regulation promulgated 
before the enactment of the Regulatory Relief and Job Preservation Act 
of 1996 shall cease to have any force and effect upon the enactment of 
this Act.''.

SEC. 103. REFORM OF STATE OPERATING PERMIT PROCEDURES.

    States with an interim Operating Permits Program under the Clean 
Air Act which has been submitted to the Environmental Protection Agency 
shall not be required to implement an Environmental Protection Agency-
run permit program under regulations of the Administrator solely 
because the States have not yet received approval of their own program. 
Until final Environmental Protection Agency approval or disapproval is 
received, the interim State program shall prevail.

SEC. 104. OZONE-DEPLETING COMPOUNDS PRODUCTION AND USE AMENDMENTS.

    (a) Fire Suppression Equipment.--Section 610(d)(1)(A) of the Clean 
Air Act is amended by inserting after class II substance the following: 
``(other than commercial fire suppression equipment containing class II 
substances).''.
    (b) Labeling.--Subsections (c), (d), and (e) of section 611 of the 
Clean Air Act are repealed.

SEC. 105. MACT STANDARDS.

    (a) Basic Standard.--Section 112(d)(2) of the Clean Air Act is 
amended by adding the following at the end thereof: ``For each 
emissions standard promulgated or revised under this subsection after 
the date of the enactment of the Energy and Petrochemical Relief and 
Job Preservation Act of 1996, the Administrator shall provide a 
benefit-cost analysis. No emissions standard promulgated or revised 
under this subsection after such date shall be established at a level 
of at which the incremental costs of compliance with the standard 
exceeds the incremental benefits of such compliance. For all hazardous 
air pollutants for which standards were promulgated after the enactment 
of the Clean Air Act Amendments of 1990, the Administrator shall revise 
such standards as promptly as practicable after the date of enactment 
of the Energy and Petrochemical Relief and Job Preservation Act of 1996 
to conform to the amendments made to this subsection by the Energy and 
Petrochemical Relief and Job Preservation Act of 1996, the 
Administrator shall provide a benefit-cost analysis.''.
    (b) Residual Risk.--Section 112(f)(2) of the Clean Air Act is 
amended by adding the following at the end thereof:
            ``(D) For each emissions standard promulgated or revised 
        under this subsection after the date of the enactment of the 
        Energy and Petrochemical Relief and Job Preservation Act of 
        1996, the Administrator shall provide a benefit-cost analysis. 
        No emissions standard promulgated or revised under this 
        subsection after such date shall be established at a level of 
        at which the incremental costs of compliance with the standard 
        exceeds the incremental benefits of such compliance.''. For all 
        hazardous air pollutants for which standards were promulgated 
        after the enactment of the Clean Air Act Amendments of 1990, 
        the Administrator shall revise such standards as promptly as 
        practicable after the date of enactment of the Energy and 
        Petrochemical Relief and Job Preservation Act of 1996 to 
        conform to the provisions of this section in effect immediately 
        prior to the enactment of the Clean Air Act Amendments of 
        1990.''.

SEC. 106. MOTOR VEHICLE INSPECTION AND MAINTENANCE.

    (a) Findings and Purpose.--
            (1) Findings.--Congress finds that, in carrying out title I 
        of the Clean Air Act (42 U.S.C. 7401 et seq.), the 
        Administrator of Environmental Protection Agency has failed 
        to--
                    (A) recognize the intent of Congress to allow 
                States to design and implement vehicle inspection and 
                maintenance programs that fit their specific needs; and
                    (B) allow States the opportunity to upgrade 
                existing programs and prove the effectiveness of such 
                programs.
            (2) Purpose.--The purpose of this section is to require the 
        Administrator to--
                    (A) follow new guidelines clearly stated by 
                Congress; and
                    (B) issue new regulations governing inspection and 
                maintenance programs that--
                            (i) allow States to operate decentralized 
                        test and repair programs; and
                            (ii) allow States to fairly prove program 
                        effectiveness based on performance.
    (b) Implementation of Enhanced Vehicle Inspection Programs.--
            (1) Minimum standards redefined.--Section 182(c)(3)(C) of 
        the Clean Air Act (42 U.S.C. 7511a(c)(3)(C)) is amended by 
        striking subparagraph (C) and inserting in lieu thereof the 
        following:
                    ``(C) State program.--The State program required 
                under subparagraph (A) shall include, at a minimum, 
                each of the following elements:
                            ``(i) Computerized emission analyzers, 
                        including on-road testing devices.
                            ``(ii) No waivers for vehicles and parts 
                        covered by the emission control performance 
                        warranty as provided for in section 207(b) (42 
                        U.S.C. 7541(b)) unless a warranty remedy has 
                        been denied in writing, or for tampering-
                        related repairs.
                            ``(iii) In view of the air quality purpose 
                        of the program, if, for any vehicle, waivers 
                        are permitted for emissions-related repairs not 
                        covered by warranty, the minimum expenditure 
                        shall be: at least $300 and beginning January 
                        1, 1998 a minimum of $450, and at least $75 for 
                        pre-1981 model year vehicles (adjusted annually 
                        as determined by the Administrator on the basis 
                        of the Consumer Price Index in the same manner 
                        as provided in title V. A State may elect to 
                        implement a waiver or assisted repair program 
                        for the elderly, handicapped, and low income 
                        individuals.
                            ``(iv) Enforcement through denial of 
                        vehicle registration or safety inspection 
                        sticker.
                            ``(v) Annual emission testing and necessary 
                        adjustment, repair, and maintenance.
                            ``(vi) Operation of the program on a 
                        centralized basis. However, an electronically 
                        connected testing system, a licensing system, 
                        or other measures (or any combination thereof) 
                        may be considered as centralized.
                            ``(vii) Inspection of emission control 
                        diagnostic systems and the maintenance or 
                        repair of malfunctions or system deterioration 
                        identified by or affecting such diagnostics 
                        systems. The vehicle manufacturer shall make 
                        available relevant data and repair procedures 
                        to certified emission testing and certified 
                        emission repair facilities via electronic data 
                        transfer or other means.
                            ``(viii) Each State shall biannually 
                        prepare a report to the Administrator which 
                        assesses the emission reductions achieved by 
                        the program required under this paragraph based 
                        on data collected during inspection and repair 
                        of vehicles. The methods used to assess the 
                        emission reductions shall be those established 
                        by the State and may include data collected 
                        through remote sensing, out-of-cycle testing 
                        and pilot programs (as described in clause (xi) 
                        of this section).
                            ``(ix) The Administrator shall not require 
                        any area or county in attainment to implement 
                        enhanced testing. However, the State may 
                        require emission testing, remote sensing 
                        testing, or pilot programs for a county or that 
                        portion of a county or region if a significant 
                        number of vehicles registered in that county or 
                        region or portion thereof are operated daily in 
                        a nonattainment county or region of a State.
                            ``(x) The State shall implement through and 
                        in cooperation with private industry, 
                        foundations, educational institutions and 
                        citizens, the following: I/M review committees, 
                        public education programs concerning vehicle 
                        maintenance, repair and proper disposal of 
                        associated motor vehicle wastes, emission 
                        inspector certification training programs with 
                        written and hands-on testing, and certified 
                        technician training. Congress shall appropriate 
                        through the Environmental Protection Agency, 
                        funding to the States to offset implementation 
                        costs of such programs.
                            ``(xi) Additional credits may be granted to 
                        States which implement pilot programs. Pilot 
                        programs may include:
                                    ``(I) Methods used to help a State 
                                assess emission reductions, including 
                                but not limited to out-of-cycle 
                                testing, remote sensing, idle, 
                                transient testing, or the equivalent.
                                    ``(II) New and existing 
                                partnerships between point sources and 
                                mobile sources to promote public 
                                education, assisted repair to offset 
                                waivers, voluntary out-of-cycle 
                                testing, Mobile Emission Reduction 
                                Credit creation and trading, and 
                                alternatives to vehicle scrappage.
                                    ``(III) Testing of various fuel 
                                formulations and fuel additives to 
                                determine emission reduction 
                                effectiveness in specific areas.
                            ``(xii) Emission testing fees shall be 
                        market driven, except for testing centers owned 
                        by the State.''.
            (2) Reassessment of regulations.--The Administrator shall 
        immediately rescind the regulations of the Administrator set 
        forth in 40 CFR ch. 1 subpart s-51.350-end and shall issue new 
        regulations in accordance with section 182(c)(3)(C) of the 
        Clean Air Act (42 U.S.C. 7511a(c)(3)(C)) as amended by this 
        Act.

SEC. 107. ATTAINMENT DATE FOR MODERATE OZONE NONATTAINMENT AREAS.

    (a) Findings.--Congress finds that the Environmental Protection 
Agency failed to follow the congressional intent by forcing centralized 
I/M 240 vehicle emissions testing in nonattainment areas. States which 
followed Environmental Protection Agency guidelines by implementing 
such programs have suffered from public backlash and have found the 
programs unworkable in many cases. Legislation recently signed has 
addressed this problem. However, some areas are now facing ozone 
attainment deadlines that cannot now be met, possibly due to the delay 
caused by the failure of centralized programs. Therefore, Congress 
finds it necessary to extend the deadline for ozone attainment in 
moderate nonattainment areas.
    (b) Extension of Primary Standard Attainment Date for Moderate 
Ozone Nonattainment Areas.--Section 181(a) of the Clean Air Act (42 
U.S.C. 7511(a)(1)) is amended in table I by striking ``6 years after 
enactment'' and inserting ``8 years after enactment''.

SEC. 108. OZONE EXCEEDENCES IN NONATTAINMENT AREAS.

    For purposes of the nonattainment provisions of title I of the 
Clean Air Act, ozone monitor readings shall be averaged over an 8-hour 
period. An exceedence shall occur if the reading over such a period 
averages above 0.10ppm at 2 or more monitors in a nonattainment region. 
A nonattainment region shall be allowed 4 such exceedences over a one-
year period.

SEC. 109. REDESIGNATION OF ATTAINMENT AREAS.

    (a) Findings.--Congress finds that:
            (1) The year 1995 was a climatological anomaly, with data 
        collection revealing unparalleled, frequent high temperatures.
            (2) The frequency and persistence of high temperature days 
        are the most significant factors in causing ambient ozone air 
        pollution episodes.
    (b) Discounting of Anomalous Years High and Low.--For the purpose 
of redesignation of areas as attainment or nonattainment under the 
Clean Air Act, a span of 5 years will be used to establish a baseline 
trend. The year with the highest number of exceedences shall be 
dropped, as well as the year with the lowest number of exceedences. The 
baseline shall be established by the 3 remaining years.

                  TITLE II--ENVIRONMENTAL SELF-AUDITS

SEC. 201. VOLUNTARY ENVIRONMENTAL SELF-AUDITS.

    (a) Definitions.--As used in this section:
            (1) Voluntary environmental self-audit.--The term 
        ``voluntary environmental self-audit'' means an assessment, 
        audit, investigation, or review that is performed by or for a 
        person or entity to determine whether the person or entity is 
        in compliance with environmental laws, improve such person or 
        entity's compliance with environmental laws, or assess the 
        effectiveness of any environmental management compliance system 
        (or any part thereof).
            (2) Voluntary environmental self-audit report.--The term 
        ``voluntary environmental self-audit report'' means any report, 
        finding, opinion, or other document or communication relating 
        to a voluntary environmental self-audit.
    (b) Nondisclosure Privilege.--No information contained in any 
voluntary environmental self-audit report, and no testimony relating to 
a voluntary environmental self-audit performed by or on behalf of any 
entity shall be admissible evidence in any Federal or State 
administrative or judicial proceeding under any environmental law or 
environmentally related litigation, or subject to discovery in any such 
proceeding.
    (c) In General.--No information relating to the violation by any 
entity of any environmental law that is disclosed by such entity to the 
Federal or State agency administering such law as a result of a 
voluntary environmental self-audit performed by such entity may be used 
against such entity or against an officer, employee, or agent of such 
entity in any Federal or State administrative, civil, or criminal 
negligence proceeding regarding such violation if--
            (1) such entity (or officer, employee, or agent) ensures 
        that the disclosure is made promptly after receiving knowledge 
        of the information;
            (2) such entity (or officer, employee, or agent) initiates 
        efforts to achieve compliance with the law within a reasonable 
        period of time in a manner consistent with applicable 
        provisions of law;
            (3) such entity (or officer, employee, or agent) is not 
        asserting the applicability of the immunity under this 
        subsection for a fraudulent purpose;
            (4) such information is not disclosed for the purpose of 
        avoiding penalties in an investigative, administrative, or 
        judicial proceeding that, at the time of disclosure, was in 
        progress; or
            (5) such entity (or officer, employee, or agent) discloses 
        such other information relating to the violation as the agency 
        concerned requests, other than information subject to a 
        nondisclosure privilege under any authority of law.
    (d) Exclusions.--The immunity under subsection (b) shall not apply 
to information with respect to an intentional or willful violation of 
an environmental law or any violation of any such law which knowingly 
endangers the health or safety of any individual.

         TITLE III--REGULATION OF CHLORINE COMPOUND PRODUCTION

SEC. 301. BROAD BANNING OF CHLORINE COMPOUNDS PROHIBITED.

    Notwithstanding any provision of title VI of the Clean Air Act or 
any other authority of law, the Administrator of the Environmental 
Protection Agency shall not take any action or prohibit the 
manufacture, use, or distribution in commerce of chlorine compounds in 
the absence of a specific authorization by Congress, enacted into law 
after the submission to Congress of the proposed regulation.

          TITLE IV--AMENDMENT OF THE SOLID WASTE DISPOSAL ACT

SEC. 401. RECYCLING OF CERTAIN MATERIALS AS MANUFACTURING FEEDSTOCKS.

    Section 1004(5) of the Solid Waste Disposal Act is amended by 
adding the following at the end thereof: ``The term `hazardous waste' 
shall not include any solid waste that is used as a feedstock in any 
manufacturing process unless such waste is stored after generation and 
prior to such use for a period in excess of 90 days, or is transported 
for a distance of more than 25 miles.''.

        TITLE V--AMENDMENT OF THE INTERNAL REVENUE CODE OF 1986

SEC. 501. INTANGIBLE DRILLING COSTS INCLUDE GEOLOGICAL AND GEOPHYSICAL 
              COSTS.

    (a) In General.--Subsection (c) of section 263 of the Internal 
Revenue Code of 1986 (relating to intangible drilling and development 
costs in the case of oil and gas wells and geothermal wells) is amended 
by inserting before the last sentence the following new sentence: ``In 
the case of oil and gas wells, the tax treatment under this subsection 
which applies to the taxpayers intangible drilling and development 
costs shall also apply to geological and geophysical costs for the 
purposes of ascertaining the existence, location, extent or quality of 
any deposit of oil or gas within the United States (within the meaning 
of section 638).''.

SEC. 502. EXPANDED DEFINITION OF MARGINAL PRODUCTION.

    (a) In General.--Subparagraph (E) of section 613A(c)(6) of the 
Internal Revenue Code of 1986 (defining stripper well property) is 
amended by adding at the end the following new sentence: ``The 
preceding sentence shall be applied by substituting `25' for `15' with 
respect to any well which produces water at a rate not less than 95 
percent of total well effluent.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to production in calendar years beginning after the date of the 
enactment of this Act.

SEC. 503. TAX RELIEF FOR MARGINAL DOMESTIC OIL AND GAS PRODUCTION.

    (a) Credit for Producing Oil and Gas From Marginal Wells.--Subpart 
D of part IV of subchapter A of chapter I of the Internal Revenue Code 
of 1986 (relating to business credits) is amended by adding at the end 
the following new section:

``SEC. 45C. CREDIT FOR PRODUCING OIL AND GAS FROM MARGINAL WELLS.

    ``(a) General Rule.--For purposes of section 38, the marginal well 
production credit for any taxable year in an amount equal to the 
product of--
            ``(1) the credit amount, and
            ``(2) the qualified crude oil production and the qualified 
        natural gas production which is attributable to the taxpayer.
    ``(b) Credit Amount.--For purposes of this section--
            ``(1) In general.--The credit amount is--
                    ``(A) $3 per barrel of qualified crude oil 
                production, and
                    ``(B) 50 cents per 1,000 cubic feet of qualified 
                natural gas production.
            ``(2) Reduction as oil and gas prices increase.--
                    ``(A) In general.--The $3 and 50 cents amounts 
                under paragraph (1) shall each be reduced (but not 
                below zero) by an amount which bears the same ratio to 
                such amount (determined without regard to this 
                paragraph) as--
                            ``(i) the amount by which the reference 
                        price for the calendar year preceding the 
                        calendar year in which the taxable year begins 
                        exceeds $17 ($2.50 for qualified natural gas 
                        production), bears to
                            ``(ii) $8 ($1 for qualified natural gas 
                        production).
                    ``(B) Inflation adjustment.--In the case of any 
                taxable year beginning in a calendar year after 1995, 
                each of the dollar amounts contained in subparagraph 
                (A) shall be increased to an amount equal to such 
                dollar amount multiplied by the inflation adjustment 
                factor for such calendar year (determined under section 
                43(c)(3)(B) by substituting `1994' for `1990').
                    ``(C) Reference price.--For purposes of this 
                paragraph, the term reference price means with respect 
                to any calendar year--
                            ``(i) in the case of qualified crude oil 
                        production, the reference price determined 
                        under section 29(d)(2)(C), and
                            ``(ii) in the case of qualified natural gas 
                        production, the Secretary's estimate of the 
                        annual average wellhead price per 1,000 cubic 
                        feet for all domestic natural gas.
    ``(c) Qualified Crude Oil and Natural Gas Production.--For purposes 
of this section--
            ``(1) In general.--The terms `qualified crude oil 
        production' and `qualified natural gas production' mean 
        domestic crude oil or natural gas which is produced from a 
        marginal well.
            ``(2) Limitation on amount of production which may 
        qualify.--
                    ``(A) In general.--Crude oil or natural gas 
                produced during any taxable year from any well shall 
                not be treated as qualified crude oil production or 
                qualified natural gas production to the extent 
                production from the well during the taxable year 
                exceeds--
                            ``(i) 1,095 barrels in the case of crude 
                        oil, and
                            ``(ii) 25,000 cubic feet in the case of 
                        natural gas.
                    ``(B) Proportionate reductions.--
                            ``(i) Short taxable years.--In the case of 
                        a short taxable year, the limitations under 
                        this paragraph shall be proportionately reduced 
                        to reflect the ratio which the number of days 
                        in the year bears to 365.
                            ``(ii) Wells not in production entire 
                        year.--In the case of a well which is not 
                        capable of production during each day of a 
                        taxable year, the limitations under this 
                        paragraph applicable to the well shall be 
                        proportionately reduced to reflect the ratio 
                        which the number of days of production bears to 
                        the total number of days in the taxable year.
            ``(3) Definitions.--
                    ``(A) Marginal well.--The term `marginal well' 
                means a domestic well--
                            ``(i) the production from which during the 
                        taxable year is treated as marginal production 
                        under section 613A(c)(6), or
                            ``(ii) which, during the taxable year--
                                    ``(I) has average daily production 
                                of not more than 25 barrel equivalents, 
                                and
                                    ``(II) produces water at a rate not 
                                less than 95 percent of total well 
                                effluent.
                    ``(B) Crude oil, etc.--The terms `crude oil', 
                `natural gas', `domestic', and `barrel' have the 
                meanings given such terms by section 613A(e).
                    ``(C) Barrel equivalent.--The term `barrel 
                equivalent' means with respect to natural gas, a 
                conversion ratio of 6,000 cubic feet of natural gas to 
                1 barrel of crude oil.
    ``(d) Other Rules.--
            ``(1) Production attributable to the taxpayer.--In the case 
        of a marginal well in which there is more than one owner of 
        operating interests in the well and the crude oil or natural 
        gas production exceeds the limitation under subsection (c)(2), 
        qualifying crude oil production or qualifying natural gas 
        production attributable to the taxpayer shall be determined on 
        the basis of the ratio which taxpayers revenue interest in the 
        production bears to the aggregate of the revenue interests of 
        all operating interest owners in the production.
            ``(2) Operating interest required.--Any credit under this 
        section may be claimed only on production which is attributable 
        to the holder of an operating interest as defined in section 
        614(d).
            ``(3) Production from nonconventional sources excluded.--In 
        the case of production from a marginal well which is eligible 
        for the credit allowed under section 29 for the taxable year, 
        no credit shall be allowable under this section unless the 
        taxpayer elects not to claim the credit under section 29 with 
        respect to the well.''
    (b) Credit Treated as Business Credit.--Section 38(b) of such Code 
is amended by striking ``plus'' at the end of paragraph (10), by 
striking the period at the end of paragraph (11) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(12) the marginal oil and gas well production credit 
        determined under section 45C(a).''
    (c) Credit Allowed Against Regular and Minimum Tax.--
            (1) In general.--Subsection (c) of section 38 of such Code 
        (relating to limitation based on amount of tax) is amended by 
        redesignating paragraph (3) as paragraph (4) and by inserting 
        after paragraph (2) the following new paragraph:
            ``(3) Special rules for oil and gas production credit.--
                    ``(A) In general.--In the case of the oil and gas 
                production credit--
                            ``(i) this section and section 39 shall be 
                        applied separately with respect to the credit, 
                        and
                            ``(ii) in applying paragraph (1) to the 
                        credit--
                                    ``(I) subparagraph (A) shall not 
                                apply, and
                                    ``(II) the limitation under 
                                paragraph (1) (as modified by subclause 
                                (I)) shall be reduced by the credit 
                                allowed under subsection (a) for the 
                                taxable year (other than the oil and 
                                gas production credit).
                    ``(B) Oil and gas production credit.--For purposes 
                of this subsection, the term `oil and gas production 
                credit' means the credit allowable under subsection (a) 
                by reason of section 45C(a).''
            (2) Conforming amendment.--Subclause (II) of section 
        38(c)(2)(A)(ii) of such Code is amended by inserting ``or the 
        oil and gas production credit'' after ``employment credit''.
    (d) Coordination With Section 29.--Section 29(a) of such Code is 
amended by striking ``There'' and inserting ``At the election of the 
taxpayer, there''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter I of such Code is amended by adding 
at the end the following item:

                              ``Sec. 45C. Credit for producing oil and 
                                        gas from marginal wells.''
    (f) Effective Date.--The amendments made by this section shall 
apply to production after the date of the enactment of this Act.

SEC. 504. REPEAL OF ANNUAL INCREASE IN TAX ON OZONE-DEPLETING 
              CHEMICALS.

    (a) In General.--Paragraph (1) of section 4681(b) of the Internal 
Revenue Code of 1986 (relating to amount of tax) is amended by striking 
subparagraphs (B) and (C) and by inserting after subparagraph (A) the 
following new subparagraph:
                    ``(B) Base amount.--The base amount is $5.80.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 1997.

SEC. 505. REDUCTION IN RATE OF TAX ON CERTAIN REFORMULATED GASOLINE.

    (a) In General.--Subparagraph (A) of section 4081(a)(2) of the 
Internal Revenue Code of 1986 (relating to rate of tax on gasoline) is 
amended by--
            (1) by inserting ``(15.3 cents per gallon in the case of 
        qualified reformulated gasoline)'' before the comma at the end 
        of clause (i), and
            (2) by adding at the end the following flush sentence:
                ``For purposes of clause (i), the term `qualified 
                reformulated gasoline' means reformulated gasoline that 
                meets the requirements of section 211(k) of the Clean 
                Air Act and has at least a 2 percent oxygen content (by 
                weight).''
    (b) Credit or Refund for Gasoline Used To Make Reformulated 
Gasoline.--
            (1) Section 6427 of such Code is amended by inserting after 
        subsection (l) the following new subsection:
    ``(m) Gasoline Used To Produce Qualified Reformulated Gasoline.--
            ``(1) In general.--Except as provided in subsection (k), if 
        any gasoline on which tax was imposed by section 4081 at the 
        rate of tax specified in section 4081(a)(2)(A)(i) (other than 
        as qualified reformulated gasoline) is used by any person in 
        producing qualified reformulated gasoline which is sold or used 
        in such person's trade or business, the Secretary shall pay 
        (without interest) to such person an amount equal to 3 cents 
        per gallon of the gasoline so used.
            ``(2) Qualified reformulated gasoline.--For purposes of 
        paragraph (1), the term `qualified reformulated gasoline' means 
        reformulated gasoline that meets the requirements of section 
        211(k) of the Clean Air Act and has at least a 2 percent oxygen 
        content (by weight).''.
            ``(3) Coordination with other repayment provisions.--No 
        amount shall be payable under paragraph (1) with respect to 
        gasoline with respect to which an amount is payable under 
        subsection (d), (e), or (l) of this section or under section 
        6420 or 6421.''
            (2) Paragraph (1) of section 6427(i) of such Code is 
        amended by striking ``(l), or (q)'' and inserting ``(q), (l), 
        or (m)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1997.
                                 <all>