< Back to H.R. 5745 (112th Congress, 2011–2013)

Text of the End Polluter Welfare Act of 2012

This bill was introduced on May 15, 2012, in a previous session of Congress, but was not enacted. The text of the bill below is as of May 15, 2012 (Introduced).

Source: GPO

I

112th CONGRESS

2d Session

H. R. 5745

IN THE HOUSE OF REPRESENTATIVES

May 15, 2012

introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, Natural Resources, Science, Space, and Technology, Energy and Commerce, Agriculture, Appropriations, Financial Services, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To eliminate certain subsidies for fossil-fuel production.

1.

Short title

This Act may be cited as the End Polluter Welfare Act of 2012.

2.

Findings

Congress finds that—

(1)

President Obama joined other world leaders from the Group of Twenty 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)

the Congressional Research Service estimates that from 1948 to the present, United States investments in fossil-fuel research and development totaled over $48,000,000,000 (in 2011 dollars), while investments in renewable energy totaled over $22,000,000,000;

(4)

the 5 largest oil corporations have made more than $1,000,000,000,000 in profits in the decade prior to the date of enactment of this Act; and

(5)

United States taxpayers should not be subsidizing oil, natural gas, and coal companies in a period of record debt.

3.

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Section 344 of the Energy Policy Act of 2005 (42 U.S.C. 15904) is repealed.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Section 345 of the Energy Policy Act of 2005 (42 U.S.C. 15905) is repealed.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).

4.

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 121/2 and inserting 183/4.

(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 121/2 and inserting 183/4.

(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 percent and inserting 183/4 per centum; and

(B)

in paragraph (2)(A)(ii), by striking 121/2 and inserting 183/4;

(2)

in subsection (c)(1), by striking 12.5 percent and inserting 183/4 per centum;

(3)

in subsection (l), by striking 121/2 each time it appears and inserting 183/4; and

(4)

in subsection (n)(1)(C), by striking 121/2 and inserting 183/4.

5.

Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources

Subtitle J of title IX of the Energy Policy Act of 2005 (42 U.S.C. 16371 et seq.) is repealed.

6.

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.

.

7.

Funds to World Bank for financing projects that support coal, oil, or natural gas

(a)

Rescission of funds

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 coal, oil, or natural gas.

(b)

Future funds

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 coal, oil, or natural gas.

8.

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.

9.

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 coal, oil, or natural gas.

10.

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 is amended—

(1)

in subsection (a), by striking (a) In general.—; and

(2)

by striking subsection (b).

11.

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 coal, oil, or natural gas.

12.

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 coal, oil, or natural gas

(a)

Rescission of funds

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 coal, oil, or natural gas production.

(b)

Future funds

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 coal, oil, or natural gas production.

13.

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 coal, oil, or natural gas.

14.

Termination of various tax expenditures relating to fossil fuels

(a)

In general

Subchapter C of chapter 90 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

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 2012:

(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).

(10)

Section 7704(d)(1)(E) (relating to qualifying income).

(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 2012:

(1)

Subparagraphs (C)(iii) and (E)(viii) 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.

(3)

Section 179C (relating to election to expense certain refineries).

(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 2012:

(1)

Section 179B (relating to deduction for capital costs incurred in complying with Environmental Protection Agency sulfur regulations).

(2)

Section 198 (relating to expensing of environmental remediation costs).

(3)

Section 263(c) (relating to intangible drilling and development costs) with respect to costs in the case of oil and natural gas wells.

(4)

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 2012.

(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 2012.

(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 2012.

(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 2012

.

(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.

.

15.

Termination of alternative fuel vehicle refueling property credit with respect to fossil fuels

(a)

In general

Paragraph (2) of section 30C(c) of the Internal Revenue Code of 1986 is amended—

(1)

by striking , natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, in subparagraph (A),

(2)

by striking subparagraph (B), and

(3)

by redesignating subparagraph (C) as subparagraph (B).

(b)

Technical amendment

Paragraph (2) of section 30C(g) of the Internal Revenue Code of 1986 is amended by striking the second period.

(c)

Effective date

The amendments made by this section shall apply to property placed in service after December 31, 2011.

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.

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 2012 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.

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 and at the end of clause (ii), by striking the period at the end of clause (iii) and inserting , and, 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.

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.

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 December 31, 2012.

.

(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 December 31, 2012.

.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

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 2012.

.

(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.

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.

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.

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, 2013, 8 cents a barrel,

(ii)

in the case of crude oil received or petroleum products entered after December 31, 2012, 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.

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.

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:

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.

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:

56

Tax on severance of crude oil and natural gas from the outer Continental Shelf in the Gulf of Mexico

Sec. 5896. Imposition of tax.

Sec. 5897. Taxable crude oil or natural gas and removal price.

Sec. 5898. Special rules and definitions.

5896.

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.

5897.

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.

5898.

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 5896 on a quarterly basis.

(2)

Records and information

Each taxpayer liable for tax under section 5896 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 5896.

(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) is amended by inserting after paragraph (6) the following new paragraph:

(7)

The tax imposed by section 5896(a) (after application of section 5896(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, 2012.

28.

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.

29.

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 an oil, natural gas, or coal 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.