[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 423 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 423

   To amend the Internal Revenue Code of 1986 to allow a 5-year net 
 operating loss carryback for losses attributable to operating mineral 
                  interests of oil and gas producers.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 19, 1999

  Mr. Thomas (for himself, Mr. Watkins, Mr. Cooksey, Mr. Bonilla, Mr. 
 McInnis, and Mr. Smith of Texas) 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 allow a 5-year net 
 operating loss carryback for losses attributable to operating mineral 
                  interests of oil and gas producers.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. 5-YEAR NET OPERATING LOSS CARRYBACK FOR LOSSES ATTRIBUTABLE 
              TO OPERATING MINERAL INTERESTS OF OIL AND GAS PRODUCERS.

    (a) In General.--Paragraph (1) of section 172(b) of the Internal 
Revenue Code of 1986 (relating to years to which loss may be carried) 
is amended by adding at the end the following new subparagraph:
                    ``(H) Losses on operating mineral interests of oil 
                and gas producers.--In the case of a taxpayer which has 
                an eligible oil and gas loss (as defined in subsection 
                (j)) for a taxable year, such eligible oil and gas loss 
                shall be a net operating loss carryback to each of the 
                5 taxable years preceding the taxable year of such 
                loss.''
    (b) Eligible Oil and Gas Loss.--Section 172 of such Code is amended 
by redesignating subsection (j) as subsection (k) and by inserting 
after subsection (i) the following new subsection:
    ``(j) Eligible Oil and Gas Loss.--For purposes of this section--
            ``(1) In general.--The term `eligible oil and gas loss' 
        means the lesser of--
                    ``(A) the amount which would be the net operating 
                loss for the taxable year if only income and deductions 
                attributable to operating mineral interests (as defined 
                in section 614(d)) in oil and gas wells are taken into 
                account, or
                    ``(B) the amount of the net operating loss for such 
                taxable year.
            ``(2) Coordination with subsection (b)(2).--For purposes of 
        applying subsection (b)(2), an eligible oil and gas loss for 
        any taxable year shall be treated in a manner similar to the 
        manner in which a specified liability loss is treated.
            ``(3) Election.--Any taxpayer entitled to a 5-year 
        carryback under subsection (b)(1)(H) from any loss year may 
        elect to have the carryback period with respect to such loss 
        year determined without regard to subsection (b)(1)(H). Such 
        election shall be made in such manner as may be prescribed by 
        the Secretary and shall be made by the due date (including 
        extensions of time) for filing the taxpayer's return for the 
        taxable year of the net operating loss. Such election, once 
        made for any taxable year, shall be irrevocable for such 
        taxable year.''
    (c) Effective Date.--The amendments made by this section shall 
apply to net operating losses for taxable years beginning after 
December 31, 1997.
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