[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1041 Introduced in Senate (IS)]
114th CONGRESS
1st Session
S. 1041
To eliminate certain subsidies for fossil-fuel production.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 22, 2015
Mr. Sanders introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To eliminate certain subsidies for fossil-fuel production.
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 ``End Polluter Welfare Act of 2015''.
SEC. 2. FINDINGS.
Congress finds that--
(1) President Obama joined other world leaders from the
Group of Twenty in 2009, and again in 2013, in pledging to
phase out wasteful fossil-fuel subsidies;
(2) the Environmental Law Institute found that from 2002
through 2008, Federal fossil-fuel subsidies in the United
States totaled over $72,000,000,000, while Federal renewable-
energy investments totaled $12,200,000,000;
(3) according to Taxpayers for Common Sense, the 5 largest
oil corporations have made more than $1,000,000,000,000 in
profits during the past decade;
(4) according to the Center for American Progress, the 5
largest oil corporations posted more than $89,700,000,000 in
profits in 2014 alone;
(5) according to the Center for Responsive Politics, the
oil and gas, coal, utility, and other natural resource
extraction industries spent more than $1,800,000,000 on
lobbying during the period of 2010 to 2014, which was an
effective investment in protecting their extraordinary tax
loopholes and subsidies; and
(6) it is not in the national interest for taxpayers in the
United States to subsidize highly profitable, polluting fossil-
fuel companies.
SEC. 3. DEFINITION OF FOSSIL FUEL.
In this Act, the term ``fossil fuel'' means coal, petroleum,
natural gas, or any derivative of coal, petroleum, or natural gas that
is used for fuel.
SEC. 4. ROYALTY RELIEF.
(a) In General.--
(1) Outer continental shelf lands act.--Section 8(a)(3) of
the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)) is
amended--
(A) by striking subparagraph (B); and
(B) by redesignating subparagraph (C) as
subparagraph (B).
(2) Energy policy act of 2005.--
(A) Incentives for natural gas production from deep
wells in the shallow waters of the gulf of mexico.--
Section 344 of the Energy Policy Act of 2005 (42 U.S.C.
15904) is repealed.
(B) Deep water production.--Section 345 of the
Energy Policy Act of 2005 (42 U.S.C. 15905) is
repealed.
(b) Future Provisions.--Notwithstanding any other provision of law
(including regulations), royalty relief shall not be permitted under a
lease issued under section 8 of the Outer Continental Shelf Lands Act
(43 U.S.C. 1337).
SEC. 5. ROYALTIES UNDER MINERAL LEASING ACT.
(a) Coal Leases.--Section 7(a) of the Mineral Leasing Act (30
U.S.C. 207(a)) is amended by striking ``12\1/2\'' and inserting ``18\3/
4\''.
(b) Leases on Land on Which Oil or Natural Gas Is Discovered.--
Section 14 of the Mineral Leasing Act (30 U.S.C. 223) is amended by
striking ``12\1/2\'' and inserting ``18\3/4\''.
(c) Leases on Land Known or Believed To Contain Oil or Natural
Gas.--Section 17 of the Mineral Leasing Act (30 U.S.C. 226) is
amended--
(1) in subsection (b)--
(A) in paragraph (1)(A), by striking ``12.5'' and
inserting ``18\3/4\''; and
(B) in paragraph (2)(A)(ii), by striking ``12\1/
2\'' and inserting ``18\3/4\'';
(2) in subsection (c)(1), by striking ``12.5'' and
inserting ``18\3/4\'';
(3) in subsection (l), by striking ``12\1/2\'' each time it
appears and inserting ``18\3/4\''; and
(4) in subsection (n)(1)(C), by striking ``12\1/2\'' and
inserting ``18\3/4\''.
SEC. 6. ELIMINATION OF INTEREST PAYMENTS FOR ROYALTY OVERPAYMENTS.
Section 111 of the Federal Oil and Gas Royalty Management Act of
1982 (30 U.S.C. 1721) is amended--
(1) by striking subsections (h) and (i) and inserting the
following:
``(h) Payment of Interest.--Interest shall not be paid on any
overpayment.''; and
(2) by redesignating subsections (j), (k), and (l) as
subsections (i), (j), and (k), respectively.
SEC. 7. REMOVAL OF LIMITS ON LIABILITY FOR OFFSHORE FACILITIES AND
PIPELINE OPERATORS.
Section 1004(a) of the Oil Pollution Act of 1990 (33 U.S.C.
2704(a)) is amended--
(1) in paragraph (3), by striking ``plus $75,000,000; and''
and inserting ``and the liability of the responsible party
under section 1002;'';
(2) in paragraph (4)--
(A) by inserting ``(except an onshore pipeline
transporting diluted bitumen, bituminous mixtures, or
any oil manufactured from bitumen)'' after ``for any
onshore facility''; and
(B) by striking the period at the end and inserting
``; and''; and
(3) by adding at the end the following:
``(5) for any onshore facility transporting diluted
bitumen, bituminous mixtures, or any oil manufactured from
bitumen, the liability of the responsible party under section
1002.''.
SEC. 8. FUNDS TO WORLD BANK FOR FINANCING PROJECTS THAT SUPPORT FOSSIL
FUEL.
(a) Rescission of Funds.--Except as provided in subsection (c),
effective on the date of enactment of this Act, there are rescinded all
unobligated balances of the amounts made available to the International
Bank for Reconstruction and Development and the International
Development Association (commonly known as the ``World Bank''), and
each other similar international financing entity that has received
amounts from the United States, as determined by the Secretary of the
Treasury, to carry out any project that supports fossil-fueled power
plants.
(b) Future Funds.--Except as provided in subsection (c),
notwithstanding any other provision of law, any amounts made available
to the World Bank or any other international financing entity shall not
be used to carry out any project that supports fossil fuel.
(c) Exception.--Subsections (a) and (b) shall not apply to a
fossil-fueled power plant project located in a Least Developed Country
(as that term is defined by the United Nations General Assembly), on
the condition that--
(1) no other economically feasible alternative exists; and
(2) the project uses the most efficient technology
available.
SEC. 9. OFFICE OF FOSSIL ENERGY RESEARCH AND DEVELOPMENT.
(a) In General.--Section 203(a)(2) of the Department of Energy
Organization Act (42 U.S.C. 7133(a)(2)) is amended--
(1) in subparagraph (C), by inserting ``and'' after the
semicolon at the end;
(2) by striking subparagraph (D); and
(3) by redesignating subparagraph (E) as subparagraph (D).
(b) Termination.--Notwithstanding any other provision of law, the
Office of Fossil Energy Research and Development and the authority to
carry out any program or activity of the Office (as in existence on the
day before the date of enactment of this Act) is terminated.
SEC. 10. ADVANCED RESEARCH PROJECTS AGENCY--ENERGY.
None of the funds made available to the Advanced Research Projects
Agency--Energy shall be used to carry out any project that supports
fossil fuel.
SEC. 11. INCENTIVES FOR INNOVATIVE TECHNOLOGIES.
(a) In General.--Section 1703 of the Energy Policy Act of 2005 (42
U.S.C. 16513) is amended--
(1) in subsection (b)--
(A) by striking paragraph (2);
(B) by striking paragraph (10); and
(C) by redesignating paragraphs (3) through (9) as
paragraphs (2) through (8) respectively;
(2) by striking subsection (c); and
(3) by redesignating subsections (d) and (e) as paragraphs
(c) and (d) respectively.
(b) Conforming Amendment.--Section 1704 of the Energy Policy Act of
2005 (42 U.S.C. 16514) is amended--
(1) in subsection (a), by striking ``(a) In General.--'';
and
(2) by striking subsection (b).
SEC. 12. RURAL UTILITY SERVICE LOAN GUARANTEES.
The Secretary of Agriculture shall not make a loan under title III
of the Rural Electrification Act of 1936 (7 U.S.C. 931 et seq.) to an
applicant for the purpose of carrying out any project that will use
fossil fuel.
SEC. 13. FUNDS TO THE OVERSEAS PRIVATE INVESTMENT CORPORATION OR THE
EXPORT-IMPORT BANK OF THE UNITED STATES FOR FINANCING
PROJECTS, TRANSACTIONS, OR OTHER ACTIVITIES THAT SUPPORT
FOSSIL FUEL.
(a) Rescission of Funds.--Except as provided in subsection (c),
effective on the date of enactment of this Act, there are rescinded all
unobligated balances of the amounts made available to the Overseas
Private Investment Corporation or the Export-Import Bank of the United
States to carry out any project, transaction, or other activity that
supports fossil-fuel production or use.
(b) Future Funds.--Except as provided in subsection (c),
notwithstanding any other provision of law, any amounts made available
to the Overseas Private Investment Corporation or the Export-Import
Bank of the United States shall not be used to carry out any project,
transaction, or other activity that supports fossil-fuel production or
use.
(c) Exception.--Subsections (a) and (b) shall not apply to a
fossil-fueled power plant project located in a Least Developed Country
(as that term is defined by the United Nations General Assembly), on
the condition that--
(1) no other economically feasible alternative exists; and
(2) the project uses the most efficient technology
available.
SEC. 14. TRANSPORTATION FUNDS FOR GRANTS, LOANS, LOAN GUARANTEES, AND
OTHER DIRECT ASSISTANCE.
Notwithstanding any other provision of law, any amounts made
available to the Department of Transportation (including the Federal
Railroad Administration) shall not be used to award any grant, loan,
loan guarantee, or provide any other direct assistance to any rail or
port project that transports fossil fuel.
SEC. 15. TERMINATION OF VARIOUS TAX EXPENDITURES RELATING TO FOSSIL
FUELS.
(a) In General.--Subchapter C of chapter 80 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new section:
``SEC. 7875. TERMINATION OF CERTAIN PROVISIONS RELATING TO FOSSIL-FUEL
INCENTIVES.
``(a) In General.--The following provisions shall not apply to
taxable years beginning after the date of the enactment of the End
Polluter Welfare Act of 2015:
``(1) Section 43 (relating to enhanced oil recovery
credit).
``(2) Section 45I (relating to credit for producing oil and
natural gas from marginal wells).
``(3) Section 45K (relating to credit for producing fuel
from a nonconventional source).
``(4) Section 193 (relating to tertiary injectants).
``(5) Section 199(d)(9) (relating to special rule for
taxpayers with oil related qualified production activities
income).
``(6) Section 461(i)(2) (relating to special rule for
spudding of oil or natural gas wells).
``(7) Section 469(c)(3) (relating to working interests in
oil and natural gas property).
``(8) Section 613A (relating to limitations on percentage
depletion in case of oil and natural gas wells).
``(9) Section 617 (relating to deduction and recapture of
certain mining exploration expenditures).
``(b) Provisions Relating to Property.--The following provisions
shall not apply to property placed in service after the date of the
enactment of the End Polluter Welfare Act of 2015:
``(1) Subparagraph (C)(iii) of section 168(e)(3) (relating
to classification of certain property).
``(2) Section 169 (relating to amortization of pollution
control facilities) with respect to any atmospheric pollution
control facility.
``(c) Provisions Relating to Costs and Expenses.--The following
provisions shall not apply to costs or expenses paid or incurred after
the date of the enactment of the End Polluter Welfare Act of 2015:
``(1) Section 179B (relating to deduction for capital costs
incurred in complying with Environmental Protection Agency
sulfur regulations).
``(2) Section 263(c) (relating to intangible drilling and
development costs) with respect to costs in the case of oil and
natural gas wells.
``(3) Section 468 (relating to special rules for mining and
solid waste reclamation and closing costs).
``(d) 5-Year Carryback for Marginal Oil and Natural Gas Well
Production Credit.--Section 39(a)(3) (relating to 5-year carryback for
marginal oil and natural gas well production credit) shall not apply to
credits determined in taxable years beginning after the date of the
enactment of the End Polluter Welfare Act of 2015.
``(e) Credit for Carbon Dioxide Sequestration.--Section 45Q
(relating to credit for carbon dioxide sequestration) shall not apply
to carbon dioxide captured after the date of the enactment of the End
Polluter Welfare Act of 2015.
``(f) Allocated Credits.--No new credits shall be certified under
section 48A (relating to qualifying advanced coal project credit) or
section 48B (relating to qualifying gasification project credit) after
the date of the enactment of the End Polluter Welfare Act of 2015.
``(g) Arbitrage Bonds.--Section 148(b)(4) (relating to safe harbor
for prepaid natural gas) shall not apply to obligations issued after
the date of the enactment of the End Polluter Welfare Act of 2015.''.
(b) Conforming Amendment.--The table of sections for subchapter C
of chapter 90 is amended by adding at the end the following new item:
``Sec. 7875. Termination of certain provisions.''.
SEC. 16. UNIFORM SEVEN-YEAR AMORTIZATION FOR GEOLOGICAL AND GEOPHYSICAL
EXPENDITURES.
(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 amounts paid or incurred after the date of the enactment of
this Act.
SEC. 17. NATURAL GAS GATHERING LINES TREATED AS 15-YEAR PROPERTY.
(a) In General.--Subparagraph (E) of section 168(e)(3) of the
Internal Revenue Code of 1986 is amended by striking ``and'' at the end
of clause (viii), by striking the period at the end of clause (ix) and
inserting ``, and'', and by adding at the end the following new clause:
``(x) any natural gas gathering line the
original use of which commences with the
taxpayer after the date of the enactment of
this clause.''.
(b) Alternative System.--The table contained in section
168(g)(3)(B) of the Internal Revenue Code of 1986 is amended by
inserting after the item relating to subparagraph (E)(ix) the following
new item:
``(E)(x) ................................................... 22''.
(c) Conforming Amendment.--Clause (iv) of section 168(e)(3)(C) of
the Internal Revenue Code of 1986 is amended by inserting ``and on or
before the date of the enactment of the End Polluter Welfare Act of
2015'' after ``April 11, 2005''.
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to property placed in service on and after the date of
the enactment of this Act.
(2) Exception.--The amendments made by this section shall
not apply to any property with respect to which the taxpayer or
a related party has entered into a binding contract for the
construction thereof on or before the date of the enactment of
this Act, or, in the case of self-constructed property, has
started construction on or before such date.
SEC. 18. REPEAL OF DOMESTIC MANUFACTURING DEDUCTION FOR HARD MINERAL
MINING.
(a) In General.--Subparagraph (B) of section 199(c)(4) of the
Internal Revenue Code of 1986 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 adding at the end the following new clause:
``(iv) the mining of any hard mineral.''.
(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. 19. LIMITATION ON DEDUCTION FOR INCOME ATTRIBUTABLE TO DOMESTIC
PRODUCTION OF 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 oil, natural gas, and coal
income.--The term `domestic production gross receipts'
shall not include gross receipts from the production,
refining, processing, transportation, or distribution
of oil, natural gas, or coal, 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 the date of the enactment of this Act.
SEC. 20. TERMINATION OF LAST-IN, FIRST-OUT METHOD OF INVENTORY FOR OIL,
NATURAL GAS, AND COAL COMPANIES.
(a) In General.--Section 472 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(h) Termination for Oil, Natural Gas, and Coal Companies.--
Subsection (a) shall not apply to any taxpayer that is in the trade or
business of the production, refining, processing, transportation, or
distribution of oil, natural gas, or coal for any taxable year
beginning after the date of enactment of the End Polluter Welfare Act
of 2015.''.
(b) Additional Termination.--Section 473 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
subsection:
``(h) Termination for Oil, Natural Gas, and Coal Companies.--This
section shall not apply to any taxpayer that is in the trade or
business of the production, refining, processing, transportation, or
distribution of oil, natural gas, or coal for any taxable year
beginning after the date of enactment of the End Polluter Welfare Act
of 2015.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of enactment of this
Act.
SEC. 21. REPEAL OF PERCENTAGE DEPLETION FOR COAL AND HARD MINERAL
FOSSIL FUELS.
(a) In General.--Section 613 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(f) Termination With Respect to Coal and Hard Mineral Fossil
Fuels.--In the case of coal, lignite, and oil shale (other than oil
shale described in subsection (b)(5)), the allowance for depletion
shall be computed without reference to this section for any taxable
year beginning after the date of the enactment of the End Polluter
Welfare Act of 2015.''.
(b) Conforming Amendments.--
(1) Coal and lignite.--Section 613(b)(4) of the Internal
Revenue Code of 1986 is amended by striking ``coal, lignite,''.
(2) Oil shale.--Section 613(b)(2) of such Code is amended
to read as follows:
``(2) 15 percent.--If, from deposits in the United States,
gold, silver, copper, and iron ore.''.
(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. 22. TERMINATION OF CAPITAL GAINS TREATMENT FOR ROYALTIES FROM
COAL.
(a) In General.--Subsection (c) of section 631 of the Internal
Revenue Code of 1986 is amended--
(1) by striking ``coal (including lignite), or iron ore''
and inserting ``iron ore'',
(2) by striking ``coal or iron ore'' each place it appears
and inserting ``iron ore'',
(3) by striking ``iron ore or coal'' each place it appears
and inserting ``iron ore'', and
(4) by striking ``Coal or'' in the heading.
(b) Conforming Amendment.--The heading of section 631 of the
Internal Revenue Code of 1986 is amended by striking ``, coal,''.
(c) Effective Date.--The amendments made by this section shall
apply to dispositions after the date of the enactment of this Act.
SEC. 23. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO OIL,
NATURAL GAS, AND COAL 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 Oil, Natural Gas, and Coal
Companies Which Are Dual Capacity Taxpayers.--
``(1) General rule.--Notwithstanding any other provision of
this chapter, any amount paid or accrued to a foreign country
or possession of the United States for any period by a dual
capacity taxpayer which is in the trade or business of the
production, refining, processing, transportation, or
distribution of oil, natural gas, or coal 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. 24. INCREASE IN OIL SPILL LIABILITY TRUST FUND FINANCING RATE.
(a) In General.--Subparagraph (B) of section 4611(c)(2) of the
Internal Revenue Code of 1986 is amended to read as follows:
``(B) the Oil Spill Liability Trust Fund financing
rate is--
``(i) in the case of crude oil received or
petroleum products entered before January 1,
2016, 8 cents a barrel,
``(ii) in the case of crude oil received or
petroleum products entered after December 31,
2015, and before January 1, 2017, 9 cents a
barrel, and
``(iii) in the case of crude oil received
or petroleum products entered after December
31, 2016, 10 cents a barrel.''.
(b) Effective Date.--The amendment made by this section shall apply
to crude oil received and petroleum products entered after the date of
the enactment of this Act.
SEC. 25. APPLICATION OF CERTAIN ENVIRONMENTAL TAXES TO SYNTHETIC CRUDE
OIL.
(a) In General.--Paragraph (1) of section 4612(a) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(1) Crude oil.--
``(A) In general.--The term `crude oil' includes
crude oil condensates, natural gasoline, and synthetic
crude oil.
``(B) Synthetic crude oil.--For purposes of
subparagraph (A), the term `synthetic crude oil' means
any bitumen and bituminous mixtures, any oil
manufactured from bitumen and bituminous mixtures, and
any liquid fuel manufactured from coal.''.
(b) Effective Date.--The amendment made by this section shall apply
to oil and petroleum products received or entered during calendar
quarters beginning more than 60 days after the date of the enactment of
this Act.
SEC. 26. DENIAL OF DEDUCTION FOR REMOVAL COSTS AND DAMAGES FOR CERTAIN
OIL SPILLS.
(a) In General.--Part IX of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new section:
``SEC. 280I. EXPENSES FOR REMOVAL COSTS AND DAMAGES RELATING TO CERTAIN
OIL SPILL LIABILITY.
``No deduction shall be allowed under this chapter for any amount
paid or incurred with respect to any costs or damages for which the
taxpayer is liable under section 1002 of the Oil Pollution Act of 1990
(33 U.S.C. 2702).''.
(b) Clerical Amendment.--The table of sections for part IX of
subchapter B of chapter 1 of such Code is amended by adding at the end
the following new item:
``Sec. 280I. Expenses for removal costs and damages relating to certain
oil spill liability.''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to any liability arising in taxable years ending
after the date of the enactment of this Act.
SEC. 27. TAX ON CRUDE OIL AND NATURAL GAS PRODUCED FROM THE OUTER
CONTINENTAL SHELF IN THE GULF OF MEXICO.
(a) In General.--Subtitle E of the Internal Revenue Code of 1986 is
amended by adding at the end the following new chapter:
``CHAPTER 56--TAX ON SEVERANCE OF CRUDE OIL AND NATURAL GAS FROM THE
OUTER CONTINENTAL SHELF IN THE GULF OF MEXICO
``Sec. 5901. Imposition of tax.
``Sec. 5902. Taxable crude oil or natural gas and removal price.
``Sec. 5903. Special rules and definitions.
``SEC. 5901. IMPOSITION OF TAX.
``(a) In General.--In addition to any other tax imposed under this
title, there is hereby imposed a tax equal to 13 percent of the removal
price of any taxable crude oil or natural gas removed from the premises
during any taxable period.
``(b) Credit for Federal Royalties Paid.--
``(1) In general.--There shall be allowed as a credit
against the tax imposed by subsection (a) with respect to the
production of any taxable crude oil or natural gas an amount
equal to the aggregate amount of royalties paid under Federal
law with respect to such production.
``(2) Limitation.--The aggregate amount of credits allowed
under paragraph (1) to any taxpayer for any taxable period
shall not exceed the amount of tax imposed by subsection (a)
for such taxable period.
``(c) Tax Paid by Producer.--The tax imposed by this section shall
be paid by the producer of the taxable crude oil or natural gas.
``SEC. 5902. TAXABLE CRUDE OIL OR NATURAL GAS AND REMOVAL PRICE.
``(a) Taxable Crude Oil or Natural Gas.--For purposes of this
chapter, the term `taxable crude oil or natural gas' means crude oil or
natural gas which is produced from Federal submerged lands on the outer
Continental Shelf in the Gulf of Mexico pursuant to a lease entered
into with the United States which authorizes the production.
``(b) Removal Price.--For purposes of this chapter--
``(1) In general.--Except as otherwise provided in this
subsection, the term `removal price' means--
``(A) in the case of taxable crude oil, the amount
for which a barrel of such crude oil is sold, and
``(B) in the case of taxable natural gas, the
amount per 1,000 cubic feet for which such natural gas
is sold.
``(2) Sales between related persons.--In the case of a sale
between related persons, the removal price shall not be less
than the constructive sales price for purposes of determining
gross income from the property under section 613.
``(3) Oil or natural gas removed from property before
sale.--If crude oil or natural gas is removed from the property
before it is sold, the removal price shall be the constructive
sales price for purposes of determining gross income from the
property under section 613.
``(4) Refining begun on property.--If the manufacture or
conversion of crude oil into refined products begins before
such oil is removed from the property--
``(A) such oil shall be treated as removed on the
day such manufacture or conversion begins, and
``(B) the removal price shall be the constructive
sales price for purposes of determining gross income
from the property under section 613.
``(5) Property.--The term `property' has the meaning given
such term by section 614.
``SEC. 5903. SPECIAL RULES AND DEFINITIONS.
``(a) Administrative Requirements.--
``(1) Withholding and deposit of tax.--The Secretary shall
provide for the withholding and deposit of the tax imposed
under section 5901 on a quarterly basis.
``(2) Records and information.--Each taxpayer liable for
tax under section 5901 shall keep such records, make such
returns, and furnish such information (to the Secretary and to
other persons having an interest in the taxable crude oil or
natural gas) with respect to such oil as the Secretary may by
regulations prescribe.
``(3) Taxable periods; return of tax.--
``(A) Taxable period.--Except as provided by the
Secretary, each calendar year shall constitute a
taxable period.
``(B) Returns.--The Secretary shall provide for the
filing, and the time for filing, of the return of the
tax imposed under section 5901.
``(b) Definitions.--For purposes of this chapter--
``(1) Producer.--The term `producer' means the holder of
the economic interest with respect to the crude oil or natural
gas.
``(2) Crude oil.--The term `crude oil' includes crude oil
condensates and natural gasoline.
``(3) Premises and crude oil product.--The terms `premises'
and `crude oil product' have the same meanings as when used for
purposes of determining gross income from the property under
section 613.
``(c) Adjustment of Removal Price.--In determining the removal
price of oil or natural gas from a property in the case of any
transaction, the Secretary may adjust the removal price to reflect
clearly the fair market value of oil or natural gas removed.
``(d) Regulations.--The Secretary shall prescribe such regulations
as may be necessary or appropriate to carry out the purposes of this
chapter.''.
(b) Deductibility of Tax.--The first sentence of section 164(a) of
the Internal Revenue Code of 1986 is amended by inserting after
paragraph (4) the following new paragraph:
``(5) The tax imposed by section 5901(a) (after application
of section 5901(b)) on the severance of crude oil or natural
gas from the outer Continental Shelf in the Gulf of Mexico.''.
(c) Clerical Amendment.--The table of chapters for subtitle E is
amended by adding at the end the following new item:
``Chapter 56. Tax on severance of crude
oil and natural gas from the
outer Continental Shelf in the
Gulf of Mexico.''.
(d) Effective Date.--The amendments made by this section shall
apply to crude oil or natural gas removed after December 31, 2015.
SEC. 28. REPEAL OF CORPORATE INCOME TAX EXEMPTION FOR PUBLICLY TRADED
PARTNERSHIPS WITH QUALIFYING INCOME AND GAINS FROM
ACTIVITIES RELATING TO FOSSIL FUELS.
(a) In General.--Section 7704(d)(1) of the Internal Revenue Code of
1986 is amended--
(1) by striking subparagraph (E),
(2) by redesignating subparagraphs (F) and (G) as
subparagraphs (E) and (F), respectively, and
(3) by striking the flush matter at the end.
(b) Conforming Amendment.--Section 988(c)(1)(E)(iii)(III) of the
Internal Revenue Code of 1986 is amended by striking ``or (G)'' and
inserting ``or (F)''.
(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. 29. POWDER RIVER BASIN.
(a) Designation of the Powder River Basin as a Coal Producing
Region.--The Director of the Bureau of Land Management shall designate
the Powder River Basin as a coal producing region.
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Director of the Bureau of Land Management shall submit to
Congress a report that includes--
(1) a study of the fair market value and the amount of
royalties paid on coal leases in the Powder River Basin
compared to other national and international coal markets; and
(2) any policy recommendations to capture the future market
value of the coal leases in the Powder River Basin.
SEC. 30. REPORTS.
(a) Definition of Fossil-Fuel Production Subsidy.--In this section,
the term ``subsidy for fossil-fuel production'' means any direct
funding, tax treatment or incentive, risk-reduction benefit, financing
assistance or guarantee, royalty relief, or other provision that
provides a financial benefit to a fossil-fuel company for the
production of fossil fuels.
(b) Report to Congress.--Not later than 1 year after the date of
enactment of this Act, the Secretary of the Treasury, in coordination
with the Secretary of Energy, shall submit to Congress a report
detailing each Federal law (including regulations), other than those
amended by this Act, as in effect on the date on which the report is
submitted, that includes a subsidy for fossil-fuel production.
(c) Report on Modified Recovery Period.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary, in coordination with the
Commissioner of Internal Revenue, shall submit to Congress a
report on the applicable recovery period under the accelerated
cost recovery system provided in section 168 of the Internal
Revenue Code of 1986 for each type of property involved in
fossil-fuel production, including pipelines, power generation
property, refineries, and drilling equipment, to determine if
any assets are receiving a subsidy for fossil-fuel production.
(2) Elimination of subsidy.--In the case of any type of
property that the Commissioner of Internal Revenue determines
is receiving a subsidy for fossil-fuel production under such
section 168, for property placed in service in taxable years
beginning after the date of such determination, such section
168 shall not apply. The preceding sentence shall not apply to
any property with respect to a taxable year unless such
determination is published before the first day of such taxable
year.
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