[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 2204 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 337
112th CONGRESS
  2d Session
                                S. 2204

To eliminate unnecessary tax subsidies and promote renewable energy and 
                          energy conservation.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 19, 2012

Mr. Menendez (for himself and Mr. Reid) introduced the following bill; 
                     which was read the first time

                             March 20, 2012

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
To eliminate unnecessary tax subsidies and promote renewable energy and 
                          energy conservation.

    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 ``Repeal Big Oil Tax Subsidies Act''.

               TITLE I--TAX EXTENSIONS RELATING TO ENERGY

SEC. 101. EXTENSION OF CREDIT FOR ENERGY-EFFICIENT EXISTING HOMES.

    (a) In General.--Paragraph (2) of section 25C(g) of the Internal 
Revenue Code of 1986 is amended by striking ``December 31, 2011'' and 
inserting ``December 31, 2012''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2011.

SEC. 102. EXTENSION OF CREDIT FOR CERTAIN PLUG-IN ELECTRIC VEHICLES.

    (a) In General.--Subsection (f) of section 30 of the Internal 
Revenue Code of 1986 is amended by striking ``December 31, 2011'' and 
inserting ``December 31, 2012''.
    (b) Effective Date.--The amendment made by this section shall apply 
to vehicles acquired after December 31, 2011.

SEC. 103. EXTENSION OF CREDIT FOR ALTERNATIVE FUEL VEHICLE REFUELING 
              PROPERTY.

    (a) Extension.--Paragraph (2) of section 30C(g) of the Internal 
Revenue Code of 1986 is amended by striking ``December 31, 2011.'' and 
inserting ``December 31, 2012''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2011.

SEC. 104. EXTENSION OF CELLULOSIC BIOFUEL PRODUCER CREDIT.

    (a) In General.--Subparagraph (H) of section 40(b)(6) of the 
Internal Revenue Code of 1986 is amended to read as follows:
                    ``(H) Application of paragraph.--
                            ``(i) In general.--This paragraph shall 
                        apply with respect to qualified cellulosic 
                        biofuel production after December 31, 2008, and 
                        before January 1, 2014.
                            ``(ii) No carryover to certain years after 
                        expiration.--If this paragraph ceases to apply 
                        for any period by reason of clause (i), rules 
                        similar to the rules of subsection (e)(2) shall 
                        apply.''.
    (b) Conforming Amendment.--
            (1) In general.--Paragraph (2) of section 40(e) of the 
        Internal Revenue Code of 1986 is amended by striking ``or 
        subsection (b)(6)(H)''.
            (2) Effective date.--The amendment made by this subsection 
        shall take effect as if included in section 15321(b) of the 
        Heartland, Habitat, and Horticulture Act of 2008.

SEC. 105. ALGAE TREATED AS A QUALIFIED FEEDSTOCK FOR PURPOSES OF THE 
              CELLULOSIC BIOFUEL PRODUCER CREDIT, ETC.

    (a) In General.--Subclause (I) of section 40(b)(6)(E)(i) of the 
Internal Revenue Code of 1986 is amended to read as follows:
                                    ``(I) is derived by, or from, 
                                qualified feedstocks, and''.
    (b) Qualified Feedstock; Special Rules for Algae.--Paragraph (6) of 
section 40(b) of the Internal Revenue Code of 1986 is amended by 
redesignating subparagraphs (F), (G), and (H), as amended by this Act, 
as subparagraphs (H), (I), and (J), respectively, and by inserting 
after subparagraph (E) the following new subparagraphs:
                    ``(F) Qualified feedstock.--For purposes of this 
                paragraph, the term `qualified feedstock' means--
                            ``(i) any lignocellulosic or hemicellulosic 
                        matter that is available on a renewable or 
                        recurring basis, and
                            ``(ii) any cultivated algae, cyanobacteria, 
                        or lemna.
                    ``(G) Special rules for algae.--In the case of fuel 
                which is derived by, or from, feedstock described in 
                subparagraph (F)(ii) and which is sold by the taxpayer 
                to another person for refining by such other person 
                into a fuel which meets the requirements of 
                subparagraph (E)(i)(II) and the refined fuel is not 
                excluded under subparagraph (E)(iii)--
                            ``(i) such sale shall be treated as 
                        described in subparagraph (C)(i),
                            ``(ii) such fuel shall be treated as 
                        meeting the requirements of subparagraph 
                        (E)(i)(II) and as not being excluded under 
                        subparagraph (E)(iii) in the hands of such 
                        taxpayer, and
                            ``(iii) except as provided in this 
                        subparagraph, such fuel (and any fuel derived 
                        from such fuel) shall not be taken into account 
                        under subparagraph (C) with respect to the 
                        taxpayer or any other person.''.
    (c) Algae Treated as a Qualified Feedstock for Purposes of Bonus 
Depreciation for Biofuel Plant Property.--
            (1) In general.--Subparagraph (A) of section 168(l)(2) of 
        the Internal Revenue Code of 1986 is amended by striking 
        ``solely to produce cellulosic biofuel'' and inserting ``solely 
        to produce second generation biofuel (as defined in section 
        40(b)(6)(E))''.
            (2) Conforming amendments.--Subsection (l) of section 168 
        of such Code is amended--
                    (A) by striking ``cellulosic biofuel'' each place 
                it appears in the text thereof and inserting ``second 
                generation biofuel'',
                    (B) by striking paragraph (3) and redesignating 
                paragraphs (4) through (8) as paragraphs (3) through 
                (7), respectively,
                    (C) by striking ``Cellulosic'' in the heading of 
                such subsection and inserting ``Second Generation'', 
                and
                    (D) by striking ``cellulosic'' in the heading of 
                paragraph (2) and inserting ``second generation''.
    (d) Conforming Amendments.--
            (1) Section 40 of the Internal Revenue Code of 1986, as 
        amended by subsection (b), is amended--
                    (A) by striking ``cellulosic biofuel'' each place 
                it appears in the text thereof and inserting ``second 
                generation biofuel'',
                    (B) by striking ``Cellulosic'' in the headings of 
                subsections (b)(6), (b)(6)(E), and (d)(3)(D) and 
                inserting ``Second generation'', and
                    (C) by striking ``cellulosic'' in the headings of 
                subsections (b)(6)(C), (b)(6)(D), (b)(6)(H), (d)(6), 
                and (e)(3) and inserting ``second generation''.
            (2) Clause (ii) of section 40(b)(6)(E) of such Code is 
        amended by striking ``Such term shall not'' and inserting ``The 
        term `second generation biofuel' shall not''.
            (3) Paragraph (1) of section 4101(a) of such Code is 
        amended by striking ``cellulosic biofuel'' and inserting 
        ``second generation biofuel''.
    (e) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to fuels sold or 
        used after the date of the enactment of this Act.
            (2) Application to bonus depreciation.--The amendments made 
        by subsection (c) shall apply to property placed in service 
        after the date of the enactment of this Act.

SEC. 106. EXTENSION OF INCENTIVES FOR BIODIESEL AND RENEWABLE DIESEL.

    (a) Credits for Biodiesel and Renewable Diesel Used as Fuel.--
Subsection (g) of section 40A of the Internal Revenue Code of 1986 is 
amended by striking ``December 31, 2011'' and inserting ``December 31, 
2012''.
    (b) Excise Tax Credits and Outlay Payments for Biodiesel and 
Renewable Diesel Fuel Mixtures.--
            (1) Paragraph (6) of section 6426(c) of the Internal 
        Revenue Code of 1986 is amended by striking ``December 31, 
        2011'' and inserting ``December 31, 2012''.
            (2) Subparagraph (B) of section 6427(e)(6) of such Code is 
        amended by striking ``December 31, 2011'' and inserting 
        ``December 31, 2012''.
    (c) Effective Date.--The amendments made by this section shall 
apply to fuel sold or used after December 31, 2011.

SEC. 107. EXTENSION OF PRODUCTION CREDIT FOR REFINED COAL.

    (a) In General.--Subparagraph (B) of section 45(d)(8) of the 
Internal Revenue Code of 1986 is amended by striking ``January 1, 
2012'' and inserting ``January 1, 2013''.
    (b) Effective Date.--The amendment made by this section shall apply 
to facilities placed in service after December 31, 2011.

SEC. 108. EXTENSION OF PRODUCTION CREDIT.

    (a) In General.--Section 45(d) of the Internal Revenue Code of 1986 
is amended by striking ``January 1, 2014'' each place it appears in 
paragraphs (2), (3), (4), (6), (7), (9), and (11) and inserting 
``January 1, 2015''.
    (b) Wind Facilities.--Paragraph (1) of section 45(d) of the 
Internal Revenue Code of 1986 is amended by striking ``January 1, 
2013'' and inserting ``January 1, 2014''.
    (c) Increased Credit Amount for Indian Coal Facilities Placed in 
Service Before 2009.--Subparagraph (A) of section 45(e)(10) of the 
Internal Revenue Code of 1986 is amended by striking ``7-year period'' 
each place it appears and inserting ``8-year period''.
    (d) Conforming Amendments.--Subsection (e) of section 1603 of 
division B of the American Recovery and Reinvestment Act of 2009 is 
amended--
            (1) by striking ``January 1, 2013'' in paragraph (1) and 
        inserting ``January 1, 2014'', and
            (2) by striking ``January 1, 2014'' in paragraph (2) and 
        inserting ``January 1, 2015''.
    (e) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to facilities 
        placed in service after December 31, 2012.
            (2) Indian coal.--The amendment made by subsection (c) 
        shall take effect on the date of the enactment of this Act.

SEC. 109. EXTENSION OF CREDIT FOR ENERGY-EFFICIENT NEW HOMES.

    (a) In General.--Subsection (g) of section 45L of the Internal 
Revenue Code of 1986 is amended by striking ``December 31, 2011'' and 
inserting ``December 31, 2012''.
    (b) Effective Date.--The amendment made by this section shall apply 
to homes acquired after December 31, 2011.

SEC. 110. EXTENSION OF CREDIT FOR ENERGY-EFFICIENT APPLIANCES.

    (a) In General.--Section 45M(b) of the Internal Revenue Code of 
1986 is amended by striking ``2011'' each place it appears other than 
in the provisions specified in subsection (b), and inserting ``2011 or 
2012''.
    (b) Provisions Specified.--The provisions of section 45M(b) of the 
Internal Revenue Code of 1986 specified in this subsection are 
subparagraph (C) of paragraph (1) and subparagraph (E) of paragraph 
(2).
    (c) Effective Date.--The amendments made by this section shall 
apply to appliances produced after December 31, 2011.

SEC. 111. EXTENSION OF ELECTION OF INVESTMENT TAX CREDIT IN LIEU OF 
              PRODUCTION CREDIT.

    (a) In General.--Clause (ii) of section 48(a)(5)(C) of the Internal 
Revenue Code of 1986 is amended by striking ``or 2013'' and inserting 
``2013, or 2014''.
    (b) Wind Facilities.--Clause (i) of section 48(a)(5)(C) of the 
Internal Revenue Code of 1986 is amended by striking ``Any qualified 
facility'' and all that follows and inserting ``Any facility which is--
                                    ``(I) a qualified facility (within 
                                the meaning of section 45) described in 
                                paragraph (1) of section 45(d) if such 
                                facility is placed in service in 2009, 
                                2010, 2011, 2012, or 2013, or
                                    ``(II) a qualifying offshore wind 
                                facility, if such facility is placed in 
                                service in 2012, 2013, or 2014.''.
    (c) Qualifying Offshore Wind Facility.--Paragraph (5) of section 
48(a) of the Internal Revenue Code of 1986 is amended by adding at the 
end the following new subparagraph:
                    ``(E) Qualifying offshore wind facility.--For 
                purposes of this paragraph--
                            ``(i) In general.--The term `qualifying 
                        offshore wind facility' means an offshore 
                        facility using wind to produce electricity.
                            ``(ii) Offshore facility.--The term 
                        `offshore facility' means any facility located 
                        in the inland navigable waters of the United 
                        States, including the Great Lakes, or in the 
                        coastal waters of the United States, including 
                        the territorial seas of the United States, the 
                        exclusive economic zone of the United States, 
                        and the Outer Continental Shelf of the United 
                        States. For purposes of the preceding sentence, 
                        the term `United States' has the meaning given 
                        in section 638(1).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to facilities placed in service after December 31, 2011.

SEC. 112. EXPANSION OF QUALIFYING ADVANCED ENERGY PROJECT CREDIT.

    (a) In General.--Subparagraph (B) of section 48C(d)(1) of the 
Internal Revenue Code of 1986 is amended by striking ``$2,300,000,000'' 
and inserting ``$4,600,000,000''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 113. EXTENSION OF SPECIAL ALLOWANCE FOR CELLULOSIC BIOFUEL PLANT 
              PROPERTY.

    (a) In General.--Subparagraph (D) of section 168(l)(2) of the 
Internal Revenue Code of 1986 is amended by striking ``January 1, 
2013'' and inserting ``January 1, 2014''.
    (b) Conforming Amendment.--Paragraph (4) of section 168(l) of the 
Internal Revenue Code of 1986, as redesignated by this Act, is 
amended--
            (1) by striking ``and'' at the end of subparagraph (A),
            (2) by redesignating subparagraph (B) as subparagraph (C), 
        and
            (3) by inserting after subparagraph (A) the following new 
        subparagraph:
                    ``(B) by substituting `January 1, 2014' for 
                `January 1, 2013' in clause (i) thereof, and''.

SEC. 114. EXTENSION OF SUSPENSION OF LIMITATION ON PERCENTAGE DEPLETION 
              FOR OIL AND GAS FROM MARGINAL WELLS.

    (a) In General.--Clause (ii) of section 613A(c)(6)(H) of the 
Internal Revenue Code of 1986 is amended by striking ``January 1, 
2012'' and inserting ``January 1, 2013''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2011.

SEC. 115. EXTENSION OF ALTERNATIVE FUELS EXCISE TAX CREDITS.

    (a) In General.--Sections 6426(d)(5), 6426(e)(3), and 6427(e)(6)(C) 
of the Internal Revenue Code of 1986 are each amended by striking 
``December 31, 2011'' and inserting ``December 31, 2012''.
    (b) Effective Date.--The amendments made by this section shall 
apply to fuel sold or used after December 31, 2011.

SEC. 116. EXTENSION OF GRANTS FOR SPECIFIED ENERGY PROPERTY IN LIEU OF 
              TAX CREDITS.

    (a) In General.--Subsection (a) of section 1603 of division B of 
the American Recovery and Reinvestment Act of 2009, as amended by 
section 707 of the Tax Relief, Unemployment Insurance Reauthorization, 
and Job Creation Act of 2010, is amended--
            (1) by striking ``or 2011'' in paragraph (1) and inserting 
        ``2011, or 2012'', and
            (2) in paragraph (2)--
                    (A) by striking ``after 2011'' and inserting 
                ``after 2012'', and
                    (B) by striking ``or 2011'' and inserting ``2011, 
                or 2012''.
    (b) Conforming Amendment.--Subsection (j) of section 1603 of 
division B of such Act, as so amended, is amended by striking ``2012'' 
and inserting ``2013''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2011.

SEC. 117. EXTENSION OF MINE RESCUE TEAM TRAINING CREDIT.

    (a) In General.--Subsection (e) of section 45N of the Internal 
Revenue Code of 1986 is amended by striking ``December 31, 2011'' and 
inserting ``December 31, 2012''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2011.

SEC. 118. EXTENSION OF ELECTION TO EXPENSE MINE SAFETY EQUIPMENT.

    (a) In General.--Subsection (g) of section 179E of the Internal 
Revenue Code of 1986 is amended by striking ``December 31, 2011'' and 
inserting ``December 31, 2012''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2011.

               TITLE II--REPEAL OF OIL AND GAS SUBSIDIES

                Subtitle A--Close Big Oil Tax Loopholes

SEC. 201. 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 (as defined in 
        section 167(h)(5)(B)) 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.''.
    (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. 202. LIMITATION ON SECTION 199 DEDUCTION ATTRIBUTABLE TO OIL, 
              NATURAL GAS, OR PRIMARY PRODUCTS THEREOF.

    (a) Denial of Deduction.--Paragraph (4) of section 199(c) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new subparagraph:
                    ``(E) Special rule for certain oil and gas 
                income.--In the case of any taxpayer who is a major 
                integrated oil company (as defined in section 
                167(h)(5)(B)) for the taxable year, the term `domestic 
                production gross receipts' shall not include gross 
                receipts from the production, transportation, or 
                distribution of oil, natural gas, or any primary 
                product (within the meaning of subsection (d)(9)) 
                thereof.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2011.

SEC. 203. LIMITATION ON 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 amounts paid or incurred by a taxpayer in 
any taxable year in which such taxpayer is a major integrated oil 
company (as defined in section 167(h)(5)(B)).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred in taxable years beginning after December 
31, 2011.

SEC. 204. 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 (as defined in section 167(h)(5)(B)), 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, 2011.

SEC. 205. 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.--
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 (as defined in section 167(h)(5)(B)).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred in taxable years beginning after December 
31, 2011.

        Subtitle B--Outer Continental Shelf Oil and Natural Gas

SEC. 211. 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.

                      TITLE III--BUDGETARY EFFECTS

SEC. 301. DEFICIT REDUCTION.

    The net amount of any savings realized as a result of the enactment 
of this Act and the amendments made by this Act (after any expenditures 
authorized by this Act and the amendments made by this Act) 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. 302. BUDGETARY EFFECTS.

    The budgetary effects of this Act, 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 Act, 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.
                                                       Calendar No. 337

112th CONGRESS

  2d Session

                                S. 2204

_______________________________________________________________________

                                 A BILL

To eliminate unnecessary tax subsidies and promote renewable energy and 
                          energy conservation.

_______________________________________________________________________

                             March 20, 2012

            Read the second time and placed on the calendar