[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 5350 Introduced in Senate (IS)]

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119th CONGRESS
  2d Session
                                S. 5350

 To amend the Internal Revenue Code of 1986 to include foreign oil and 
gas extraction income in net CFC tested income, to include income from 
    the extraction of minerals from oil shale and tar sands in the 
 definitions of foreign oil and gas extraction income and foreign oil 
                related income, and for other purposes.


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                   IN THE SENATE OF THE UNITED STATES

                             August 6, 2026

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

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                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to include foreign oil and 
gas extraction income in net CFC tested income, to include income from 
    the extraction of minerals from oil shale and tar sands in the 
 definitions of foreign oil and gas extraction income and foreign oil 
                related income, and for other purposes.

    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 ``American Energy Independence and Tax 
Fairness Act''.

SEC. 2. FOREIGN OIL AND GAS EXTRACTION INCOME INCLUDED IN NET CFC 
              TESTED INCOME.

    (a) In General.--Section 951A(b)(2)(A)(i) of the Internal Revenue 
Code of 1986 is amended by inserting ``and'' at the end of subclause 
(III), by striking ``and'' at the end of subclause (IV) and inserting 
``over'', and by striking subclause (V).
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years of foreign corporations beginning after the date 
of the enactment of this Act, and to taxable years of United States 
shareholders in which or with which such tax years of foreign 
corporations end.

SEC. 3. FOREIGN OIL AND GAS EXTRACTION INCOME AND FOREIGN OIL RELATED 
              INCOME TO INCLUDE OIL SHALE AND TAR SANDS.

    (a) In General.--Paragraphs (1)(A) and (2)(A) of section 907(c) of 
the Internal Revenue Code of 1986 are each amended by inserting ``(or 
oil shale or tar sands)'' after ``oil or gas wells''.
    (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. 4. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO CERTAIN 
              TAXPAYERS RECEIVING SPECIFIC ECONOMIC BENEFITS.

    (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 Dual Capacity Taxpayers.--
            ``(1) General rule.--Notwithstanding any other provision of 
        this chapter, any amount paid or accrued by a dual capacity 
        taxpayer to a foreign country or possession of the United 
        States for any period with respect to combined foreign oil and 
        gas income (as defined in section 907(b)(1)) 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 
                which would be paid or accrued by such dual capacity 
                taxpayer under the generally applicable income tax 
                imposed by such country or possession if such taxpayer 
                were not a 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 from such 
                country or possession (or any political subdivision, 
                agency, or instrumentality thereof).
            ``(3) Generally applicable income tax.--For purposes of 
        this subsection, 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 of the United States on residents of such foreign 
        country or possession that are not dual capacity taxpayers.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years of foreign corporations beginning after December 
31, 2026, and to taxable years of United States shareholders in which 
or with which such taxable years of foreign corporations end.
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