1.This Act may be cited as the
Gas Rebate Act of
2012
.
<enum>I</enum><header>Denial of certain
tax benefits to oil and gas companies</header>
<section id="HE863B8554171429A8F88755242727E6A"><enum>101.</enum><header>Repeal of
enhanced oil recovery credit</header>
<subsection id="H3E63D4E36B3944D69897CA0066E68656"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subpart D of part IV
of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by
striking section 43 (and the table of sections of such subpart is amended by
striking the item relating to such section).</text>
</subsection><subsection id="HDA761AA7117F44A6BA6597F635C6089E"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph id="H9A80A0AFE4FF41D2B46213BDCC4AB967"><enum>(1)</enum><text>Subsection (b) of
section 38 of such Code is amended by striking paragraph (6) and redesignating
paragraphs (7) through (36) as paragraphs (6) through (35),
respectively.</text>
</paragraph><paragraph id="H15CD4BA8C98B42C283A0286629BF2458"><enum>(2)</enum><text>Paragraph (7) of
section 45Q(d) of such Code is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HFEC24847B33242549A5DCEA53E52F76A" style="OLC">
<paragraph id="H60EE544111964906A7DC4D33808BA664"><enum>(7)</enum><header>Inflation
adjustment</header>
<subparagraph id="HBB7F5406989B4153AD0CE077E15BCCFD"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">In the case of any
taxable year beginning in a calendar year after 2009, there shall be
substituted for each dollar amount contained in subsection (a) an amount equal
to the product of—</text>
<clause id="HD1BED559EB5D4A159A9813EDE80F2BB5"><enum>(i)</enum><text display-inline="yes-display-inline">such dollar amount, multiplied by</text>
</clause><clause id="HAF16130E01354CBF9EFE7245CA3CBF37"><enum>(ii)</enum><text>the inflation
adjustment factor for such calendar year.</text>
</clause></subparagraph><subparagraph id="H59AC4ACAF5034E21BDF31CA28A90DCF6"><enum>(B)</enum><header>Inflation
adjustment factor</header><text display-inline="yes-display-inline">The term
<term>inflation adjustment factor</term> means, with respect to any calendar
year, a fraction the numerator of which is the GNP implicit price deflator for
the preceding calendar year and the denominator of which is the GNP implicit
price deflator for 2008. For purposes of the preceding sentence, the term
<term>GNP implicit price deflator</term> means the first revision of the
implicit price deflator for the gross national product as computed and
published by the Secretary of Commerce. Not later than April 1 of any calendar
year, the Secretary shall publish the inflation adjustment factor for the
preceding calendar year.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H3711C03B43F14AA5A5BF0FCDD418932E"><enum>(3)</enum><text>Subsection (c) of
section 196 of such Code is amended by striking paragraph (5) and redesignating
paragraphs (6) through (14) as paragraphs (5) through (13),
respectively.</text>
</paragraph></subsection><subsection id="HA1977E901C294F85844A6867CE8AD3C9"><enum>(c)</enum><header>Effective
date</header>
<paragraph id="HB097A77A6C5240A8BB4BB3E9D412E60E"><enum>(1)</enum><header>In
general</header><text>Except as otherwise provided in this subsection, the
amendments made by this section shall apply to taxable years beginning after
December 31, 2012.</text>
</paragraph><paragraph id="H211A0738E1A84B72A8E55B6E4991CE63"><enum>(2)</enum><header>Continuation of
basis reductions</header><text>Paragraph (2) of section 43(d) of the Internal
Revenue Code of 1986 (as in effect before its repeal by this section) shall
continue to apply with respect to credits determined for taxable years
beginning on or before December 31, 2012.</text>
</paragraph></subsection></section><section id="HCF1B92FDDD804550B41604E59F7B9823"><enum>102.</enum><header>Repeal of
credit for producing oil and gas from marginal wells</header>
<subsection id="H8185E89C887046FE82D7957740245E2B"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subpart D of part IV
of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by
striking section 45I (and the table of sections of such subpart is amended by
striking the item relating to such section).</text>
</subsection><subsection id="H27AE6E32881A40BE83FC2499A1DFDB73"><enum>(b)</enum><header>Conforming
amendment</header><text>Subsection (b) of section 38 of such Code, as amended
by section 101, is amended by striking paragraph (18) and redesignating
paragraphs (19) through (35) as paragraphs (18) through (34),
respectively.</text>
</subsection><subsection id="H17A576FE156C4C28875E4F70B6D5001E"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2012.</text>
</subsection></section><section id="H629081BB509D46C6B55D524B3D9154B1"><enum>103.</enum><header>Repeal of
expensing of intangible drilling and development costs</header>
<subsection id="H21A4932ED0214B598A4FC904F091EF92"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 263 of the
Internal Revenue Code of 1986 is amended by striking subsection (c).</text>
</subsection><subsection id="HD88144025FEB45549E74CF338658DBD3"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after December 31, 2012.</text>
</subsection></section><section id="H587E0E2CD97149A4863C264F25C8E360"><enum>104.</enum><header>Repeal of
deduction for tertiary injectants</header>
<subsection id="HFD3946E68773405DB6931E9AA563DDD7"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Part VI of subchapter
B of chapter 1 of the Internal Revenue Code of 1986 is amended by striking
section 193 (and the table of sections of such subpart is amended by striking
the item relating to such section).</text>
</subsection><subsection id="H47B9C489050E40358DA505B2CA0B756E"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2012.</text>
</subsection></section><section id="HEC86186CDD4A40DE88FC96F1A4D189C3"><enum>105.</enum><header>Repeal of
exception to passive loss limitations for working interests in oil and gas
properties</header>
<subsection id="H04E6F42340A344C8921653F4D971313B"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Paragraph (3) of
section 469(c) of the Internal Revenue Code of 1986 is amended by adding at the
end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HEF45098565E84CAFAEDBF2A2D6A35024" style="OLC">
<subparagraph id="H8FBDAE03E3C348D5B4B7E500FCA401D9"><enum>(C)</enum><header>Termination</header><text display-inline="yes-display-inline">Subparagraph (A) shall not apply with
respect to any taxable year beginning after the date of the enactment of this
Act.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HEFB06950FFD04DAB972737B47AE7547D"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after December 31, 2012.</text>
</subsection></section><section id="H941F4B8E5A3443BC92928C78DE5A5065"><enum>106.</enum><header>Repeal of
percentage depletion for oil and gas wells</header>
<subsection id="H46F68664D21D48C085A100A7B0E2F47A"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Part I of subchapter
I of chapter 1 of the Internal Revenue Code of 1986 is amended by striking
section 613A (and the table of sections of such part is amended by striking the
item relating to such section).</text>
</subsection><subsection id="H5F03AFD0560A4074902F50932C55736F"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph id="HC502B0D741AA488587FBA9C3D9C1B3C9"><enum>(1)</enum><text>Subsection (d) of
section 45H of such Code is amended—</text>
<subparagraph id="HEDFD674EBC4948188CF53902023B14A9"><enum>(A)</enum><text>by striking
<quote>For purposes this section</quote> and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="H796282901F7443B7A3A46292619B85CB" style="OLC">
<paragraph id="H2EF493BA5F7844FABFA62FA220FA400A"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">For purposes of this
section</text>
</paragraph><after-quoted-block>,</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="H896D456B274C41DB99BFB58589FDF03F"><enum>(B)</enum><text>by striking
<quote>(within the meaning of section 613A(d)(3))</quote>, and</text>
</subparagraph><subparagraph id="H0523F243538341B9AF07C9821945BAB1"><enum>(C)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H9A4D3E7698854E848806C1DC72E43740" style="OLC">
<paragraph id="HE83377FD3F0F4B858C8CDDEDBA9FF8A2"><enum>(2)</enum><header>Related
person</header><text display-inline="yes-display-inline">For purposes of this
subsection, a person is a related person with respect to the taxpayer if a
significant ownership interest in either the taxpayer or such person is held by
the other, or if a third person has a significant ownership interest in both
the taxpayer and such person. For purposes of the preceding sentence, the term
<term>significant ownership interest</term> means—</text>
<subparagraph id="H1B1D8C7667244D9082C35C37B5F9259D"><enum>(A)</enum><text>with respect to
any corporation, 5 percent or more in value of the outstanding stock of such
corporation,</text>
</subparagraph><subparagraph id="HDE2C9F12507247598CC832E79E43F85E"><enum>(B)</enum><text>with respect to a
partnership, 5 percent or more interest in the profits or capital of such
partnership, and</text>
</subparagraph><subparagraph id="H9C36E80AD24F4E71948DAE3DC13C41F6"><enum>(C)</enum><text>with respect to an
estate or trust, 5 percent or more of the beneficial interests in such estate
or trust.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">For
purposes of determining a significant ownership interest, an interest owned by
or for a corporation, partnership, trust, or estate shall be considered as
owned directly both by itself and proportionately by its shareholders,
partners, or beneficiaries, as the case may
be.</continuation-text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="HDB5A5E4D6D6243859A96859F6D3255F5"><enum>(2)</enum><text>Subparagraph (F)
of section 56(g)(4) of such Code is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HF1FA8F2F71A24DB1964DBA0DD7F41726" style="OLC">
<subparagraph id="H10C10C75AB19470CBDE938E9992F509D"><enum>(F)</enum><header>Depletion</header><text display-inline="yes-display-inline">The allowance for depletion with respect to
any property placed in service in a taxable year beginning after December 31,
1989, shall be cost depletion determined under section
611.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HD94FAE9C2B6E47E89ACED9B849517E3E"><enum>(3)</enum><text>Paragraph (1) of
section 57(a) of such Code is amended by striking the last sentence.</text>
</paragraph><paragraph id="HF6D789E2F5DA491D87274D6984FD2CA8"><enum>(4)</enum><text>Paragraph (4) of
section 291(b) of such Code is amended by adding at the end the following:
<quote>Any reference in the preceding sentence to section 613A shall be treated
as a reference to such section as in effect prior to the date of the enactment
of the <short-title>Gas Rebate Act of
2012</short-title>.</quote>.</text>
</paragraph><paragraph id="H4240FC1492CE4661A4B7FCA9D8DD1238"><enum>(5)</enum><text>Subsection (d) of
section 613 of such Code is amended by striking <quote>Except as provided in
section 613A, in the case of</quote> and inserting <quote>In the case
of</quote>.</text>
</paragraph><paragraph id="HE63F87E2F335441C94165F3876C1641C"><enum>(6)</enum><text>Subsection (e) of
section 613 of such Code is amended—</text>
<subparagraph id="HDE745B5DDF2F4EFD87ADFBB323565653"><enum>(A)</enum><text>by striking
<quote>or section 613A</quote> in paragraph (2), and</text>
</subparagraph><subparagraph id="HAD5CC035EFFE45F59D7F9A546E90DC43"><enum>(B)</enum><text>by striking
<quote>any amount described in section 613A(d)(5)</quote> in paragraph (3) and
inserting <quote>any lease bonus, advance royalty, or other amount payable
without regard to production from property</quote>.</text>
</subparagraph></paragraph><paragraph id="H57121BFD58624ABF9456F8443EAB26E1"><enum>(7)</enum><text>Subsection (a) of
section 705 of such Code is amended—</text>
<subparagraph id="HAAF98536235A421CA89E026666854CDC"><enum>(A)</enum><text>by inserting
<quote>and</quote> at the end of paragraph (1)(C),</text>
</subparagraph><subparagraph id="HE42093FC5CF74168BCA2DAC3566A8A1F"><enum>(B)</enum><text>by striking
<quote>; and</quote> at the end of paragraph (2)(B) and inserting a period,
and</text>
</subparagraph><subparagraph id="HF5F6E35E6C224B49A0468B0969FDE924"><enum>(C)</enum><text>by striking
paragraph (3).</text>
</subparagraph></paragraph><paragraph id="H21C737FACCE94DF6B7AD2C5A34CD9CFE"><enum>(8)</enum><text>Section 776 of
such Code is amended by striking subsection (a) and by redesignating subsection
(b) as subsection (a).</text>
</paragraph><paragraph id="H2ACE5A65A3624165939CBBA9A9638889"><enum>(9)</enum><text>Subparagraph (D)
of section 954(g)(2) of such Code is amended by inserting <quote>(as in effect
before the date of the enactment of the <short-title>Gas
Rebate Act of 2012</short-title>)</quote> after <quote>section
613A</quote>.</text>
</paragraph><paragraph id="H0A4A47B270DF4F7DB4781E07DE637014"><enum>(10)</enum><text display-inline="yes-display-inline">Subparagraph (C) of section 993(c)(2) of
such Code is amended by striking <quote>section 613 or 613A</quote> and
inserting <quote>section 613 (determined without regard to subsection (d)
thereof)</quote>.</text>
</paragraph><paragraph id="HBB13DA0148DD4A22B66B34680210AB97"><enum>(11)</enum><text display-inline="yes-display-inline">Subparagraph (D) of section 1202(e)(3) of
such Code is amended by striking <quote>section 613 or 613A</quote> and
inserting <quote>section 613 (determined without regard to subsection (d)
thereof)</quote>.</text>
</paragraph><paragraph id="HB38C8EDC638C422882DFB35EA7E1C821"><enum>(12)</enum><text>Paragraph (2) of
section 1367(a) of such Code is amended by inserting <quote>and</quote> at the
end of subparagraph (C), by striking <quote>, and</quote> at the end of
subparagraph (D) and inserting a period, and by striking subparagraph
(E).</text>
</paragraph><paragraph id="HABB0DD2FA1AB4867B7D9F2F4FB210F2D"><enum>(13)</enum><text>Subsection (c) of
section 1446 of such Code is amended by striking paragraph (2) and by
redesignating paragraph (3) as paragraph (2).</text>
</paragraph></subsection><subsection id="HEEF7E0E6C8C74E6A95EA71163E63FE11"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to property
placed in service after December 31, 2012.</text>
</subsection></section><section id="H1E6E77339E1342FA9AFF8790DD7E72F8"><enum>107.</enum><header>Deduction for
income attributable to domestic production activities not allowed with respect
to oil and gas activities</header>
<subsection id="HBE643D18C1F540CAADC7D7A2E86EEE3E"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subparagraph (B) of
section 199(c)(4) of the Internal Revenue Code of 1986 is amended by striking
<quote>and</quote> at the end of clause (ii), by striking the period at the end
of clause (iii) and inserting <quote>, and</quote>, and by inserting after
clause (iii) the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="H46419AF920D54838B0DE421C723FAD5A" style="OLC">
<clause id="H118CAEEBD09846479796CBB9DA680C49"><enum>(iv)</enum><text display-inline="yes-display-inline">the production, refining, processing,
transportation, or distribution of oil, gas, or any primary product
thereof.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HF641610C9FF24C4C9CC7B4B3D33AADCD"><enum>(b)</enum><header>Conforming
amendment</header><text>Subsection (d) of section 199 of such Code is amended
by striking paragraph (9) and by redesignating paragraph (10) as paragraph
(9).</text>
</subsection><subsection id="H618F683B46DB4A2188AAE8BB64B1FDEC"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2012.</text>
</subsection></section><section id="H88A7F99F5A5544B394D1A1DDCD481787"><enum>108.</enum><header>7-year
amortization for geological and geophysical expenditures</header>
<subsection id="HB34FF98D4CF14329826A91BDD5C02665"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subsection (h) of
section 167 of the Internal Revenue Code of 1986 is amended—</text>
<paragraph id="HA16941A4B7F842EEB379738448B3924E"><enum>(1)</enum><text>by striking
<quote>24-month</quote> in paragraphs (1) and (4) and inserting
<quote>7-year</quote>, and</text>
</paragraph><paragraph id="H68E39B6FF18C4F1484CFE436BB1CEB5F"><enum>(2)</enum><text>by striking
paragraph (5).</text>
</paragraph></subsection><subsection id="H19BA0EEC80854360924240F0C8AF4EBA"><enum>(b)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall apply to expenses paid or incurred after December 31,
2012.</text>
</subsection></section><enum>II</enum><header>Registered
Vehicle Owner Rebate</header>
<section id="H2AA69FE3780749DD834E09BCECB2B9A4"><enum>201.</enum><header>Registered
vehicle owner rebate</header>
<subsection id="H6F33BF75B7444353BD34AC27C1CCDF5F"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Each person who is a
registered motor vehicle owner as of the date of the enactment of this Act,
shall be treated as having made a payment against the tax imposed by chapter 1
of the Internal Revenue Code of 1986 for the taxable year during which such
date occurs in an amount equal to the motor vehicle owner rebate amount with
respect to such person.</text>
</subsection><subsection id="HF7179192AE32447CA5A58E7A65DA405E"><enum>(b)</enum><header>Motor vehicle
owner rebate amount</header><text>For purposes of this section, the motor
vehicle owner rebate amount with respect to any person is an amount equal
to—</text>
<paragraph id="H09422342AD6E4126BECCEB86215DD2BE"><enum>(1)</enum><text>the number of
motor vehicles registered by such person in the United States, multiplied
by</text>
</paragraph><paragraph id="H2BB4EEAB6CEE4793937E1DB5FE7B6207"><enum>(2)</enum><text display-inline="yes-display-inline">an amount equal to—</text>
<subparagraph display-inline="no-display-inline" id="HE73499AEB539403284FBF44A1901F99C"><enum>(A)</enum><text>the amount of
revenue that the Secretary of the Treasury estimates will be received in the
Treasury after December 31, 2012, and before December 31, 2022, which is
attributable to title I of the <short-title>Gas Rebate Act
of 2012</short-title> and the amendments made thereby, divided by</text>
</subparagraph><subparagraph display-inline="no-display-inline" id="HD11D8708DFA4471E95CA3A550A1D7D41"><enum>(B)</enum><text>the number of
motor vehicles registered by all persons in the United States.</text>
</subparagraph></paragraph></subsection><subsection id="HCC333B2DD5E04883B9F19931AED49486"><enum>(c)</enum><header>Advance
payment</header>
<paragraph id="HBE545AAE9B35435B82DC61660A36A570"><enum>(1)</enum><header>In
general</header><text>The Secretary of the Treasury shall, subject to
provisions of the Internal Revenue Code of 1986, refund or credit any
overpayment attributable to this section as rapidly as possible.</text>
</paragraph><paragraph id="HFED4BA095BD24724A914ED96699725B8"><enum>(2)</enum><header>No
interest</header><text>No interest shall be allowed on any overpayment
attributable to this section.</text>
</paragraph></subsection><subsection id="H5252AF8ACE7141648B3F5786EDB32BF8"><enum>(d)</enum><header>Definition and
special rules</header><text>For purposes of this section—</text>
<paragraph id="HD659E40ED2E4488388F8A0516E472EB9"><enum>(1)</enum><header>Motor
vehicle</header><text>The term <term>motor vehicle</term> means any vehicle
which is manufactured primarily for use on public streets, roads, and highways
(not including a vehicle operated exclusively on rail or rails) and which has
at least 4 wheels.</text>
</paragraph><paragraph id="H10692DE8A35D41F4B9DDA46C4D19A30F"><enum>(2)</enum><header>Registration</header><text>A
motor vehicle shall not be treated as registered in the United States unless
such vehicle is situated within the United States and registered under the laws
of one of the several States.</text>
</paragraph><paragraph id="H563AA9131E594432BF2D5CC5AEB9C247"><enum>(3)</enum><header>Long-term lease
agreements</header><text>In the case of a person who leases a vehicle under a
lease agreement with an uninterrupted lease term of 1 year or more, such person
(and not the lessor of the vehicle) shall be treated as the registered vehicle
owner.</text>
</paragraph><paragraph commented="no" id="HB6B19384E478476A89A2C84EA5595814"><enum>(4)</enum><header>No payments to
government entities</header><text display-inline="yes-display-inline">Motor
vehicles owned by any Federal, State, local, or foreign government (or any
political subdivision, agency, or instrumentality thereof) shall not be taken
into account.</text>
</paragraph></subsection><subsection id="H4239F24E4DB141478680CCAA7CE6BF67"><enum>(e)</enum><header>Coordination
with State authorities</header><text>For purposes of this section, the
Secretary of the Treasury shall prescribe such rules, and consult with such
State authorities, as may be necessary or appropriate to determine the
registered motor vehicle owners to whom this section applies and to prevent
erroneous rebates and double-counting of motor vehicles.</text>
</subsection></section>