[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1087 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1087

   To amend the Internal Revenue Code of 1986 to repeal certain tax 
                   incentives related to oil and gas.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 20, 2009

   Mr. Kerry introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to repeal certain tax 
                   incentives related to oil and gas.

    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 ``Energy Fairness for America Act''.

SEC. 2. DENIAL OF DEDUCTION FOR INCOME ATTRIBUTABLE TO DOMESTIC 
              PRODUCTION OF OIL, NATURAL GAS, OR PRIMARY PRODUCTS 
              THEREOF.

    (a) In General.--Subparagraph (B) of section 199(c)(4) of the 
Internal Revenue Code of 1986 (relating to exceptions) is amended by 
striking ``or'' at the end of clause (ii), by striking the period at 
the end of clause (iii) and inserting ``, or'', and by inserting after 
clause (iii) the following new clause:
                            ``(iv) the production, refining, 
                        processing, transportation, or distribution of 
                        oil, natural gas, or any primary product 
                        thereof.''.
    (b) Primary Product.--Section 199(c)(4)(B) of such Code is amended 
by adding at the end the following flush sentence:
                ``For purposes of clause (iv), the term `primary 
                product' has the same meaning as when used in section 
                927(a)(2)(C), as in effect before its repeal.''.
    (c) Conforming Amendments.--
            (1) Section 199(c)(4) of such Code is amended--
                    (A) in subparagraph (A)(i)(III) by striking 
                ``electricity, natural gas,'' and inserting 
                ``electricity'', and
                    (B) in subparagraph (B)(ii) by striking 
                ``electricity, natural gas,'' and inserting 
                ``electricity''.
            (2) Section 199(d) of such Code is amended by striking 
        paragraph (9) and by redesignating paragraph (10) as paragraph 
        (9).
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 3. TERMINATION OF CREDIT FOR PRODUCING OIL AND GAS FROM MARGINAL 
              WELLS.

    (a) In General.--Section 45I of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(e) Termination.--This section shall not apply to any taxable 
year beginning after the date of the enactment of this subsection.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 4. REPEAL OF EXCEPTION FROM PASSIVE ACTIVITY RULES FOR WORKING 
              INTERESTS IN OIL OR GAS PROPERTY.

    (a) In General.--Section 469(c) of the Internal Revenue Code of 
1986 is amended by striking paragraph (3).
    (b) Conforming Amendment.--Paragraph (4) of section 469(c) of such 
Code is amended--
            (1) by striking ``Paragraphs (2) and (3)'' and inserting 
        ``Paragraph (2)'', and
            (2) by striking ``paragraphs (2) and (3)'' in the heading 
        and inserting ``paragraph (2)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 5. 7-YEAR AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES 
              FOR ALL OIL AND GAS EXPLORATION AND DEVELOPMENT.

    (a) In General.--Section 167(h) of the Internal Revenue Code of 
1986 is amended--
            (1) by striking ``24-month period'' each place it appears 
        in paragraphs (1) and (4) and inserting ``7-year period'', and
            (2) by striking paragraph (5).
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 6. TERMINATION OF 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 any taxable year beginning after the date 
of the enactment of this sentence.''.
    (b) Conforming Amendments.--Paragraphs (2) and (3) of section 
291(b) of such Code are each amended by striking ``section 263(c), 
616(a),'' and inserting ``section 616(a)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 7. TERMINATION OF 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) Termination.--For purposes of any taxable year beginning 
after the date of the enactment of this subsection, the allowance for 
percentage depletion shall be zero.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.
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