Text of H.R. 3574 (113th): End Polluter Welfare Act of 2013 (Introduced version)

1.

This Act may be cited as the End Polluter Welfare Act of 2013 .

2.

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)

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 $70,000,000,000 in profits in just the first 3 quarters of 2013;

(5)

according to the Center for Responsive Politics, the entire oil and gas industry spent $105,000,000 on lobbying in the first 3 quarters of 2013, which was an effective investment in protecting their extraordinary tax loopholes and subsidies; and

(6)

taxpayers in the United States should not be subsidizing fossil fuel companies in a period of record debt.

3.

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.

4.

(a)

(1)

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)

(A)

Section 344 of the Energy Policy Act of 2005 ( 42 U.S.C. 15904 ) is repealed.

(B)

Section 345 of the Energy Policy Act of 2005 ( 42 U.S.C. 15905 ) is repealed.

(b)

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 ).

5.

(a)

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)

Section 14 of the Mineral Leasing Act ( 30 U.S.C. 223 ) is amended by striking 121/2 and inserting 183/4 .

(c)

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 183/4 ; and

(B)

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

(2)

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

(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 .

6.

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 is repealed.

7.

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.

.

8.

(a)

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 fuel.

(b)

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.

9.

(a)

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)

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.

10.

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.

11.

(a)

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)

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).

12.

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.

13.

(a)

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.

(b)

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.

14.

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.

15.

(a)

Subchapter C of chapter 80 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

7875.

(a)

The following provisions shall not apply to taxable years beginning after the date of the enactment of the End Polluter Welfare Act of 2013 :

(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)

The following provisions shall not apply to property placed in service after the date of the enactment of the End Polluter Welfare Act of 2013 :

(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)

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 2013 :

(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)

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 2013 .

(e)

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 2013 .

(f)

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 2013 .

(g)

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 2013 .

.

(b)

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.

.

16.

(a)

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)

The amendments made by this section shall apply to property placed in service after the date of enactment of this Act.

17.

(a)

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)

The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.

18.

(a)

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)

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)

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 2013 after April 11, 2005.

(d)

(1)

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)

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.

19.

(a)

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)

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

20.

(a)

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)

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)

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

21.

(a)

Section 472 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(h)

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 2013 .

.

(b)

Section 473 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(h)

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 2013 .

.

(c)

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

22.

(a)

Section 613 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(f)

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 2013.

.

(b)

(1)

Section 613(b)(4) of the Internal Revenue Code of 1986 is amended by striking coal, lignite,.

(2)

Section 613(b)(2) of such Code is amended to read as follows:

(2)

If, from deposits in the United States, gold, silver, copper, and iron ore.

.

(c)

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

23.

(a)

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)

The heading of section 631 of the Internal Revenue Code of 1986 is amended by striking , coal, .

(c)

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

24.

(a)

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)

(1)

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)

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)

For purposes of this subsection—

(A)

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)

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)

(1)

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)

The amendments made by this section shall not apply to the extent contrary to any treaty obligation of the United States.

25.

(a)

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, 2013, 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)

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.

26.

(a)

Paragraph (1) of section 4612(a) of the Internal Revenue Code of 1986 is amended to read as follows:

(1)

(A)

The term crude oil includes crude oil condensates, natural gasoline, and synthetic crude oil.

(B)

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)

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.

27.

(a)

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.

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)

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)

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.

28.

(a)

Subtitle E of the Internal Revenue Code of 1986 is amended by adding at the end the following new chapter:

56

Sec. 5901. Imposition of tax.

Sec. 5902. Taxable crude oil or natural gas and removal price.

Sec. 5903. Special rules and definitions.

5901.

(a)

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)

(1)

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)

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)

The tax imposed by this section shall be paid by the producer of the taxable crude oil or natural gas.

5902.

(a)

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)

For purposes of this chapter—

(1)

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)

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)

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)

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)

The term property has the meaning given such term by section 614.

5903.

(a)

(1)

The Secretary shall provide for the withholding and deposit of the tax imposed under section 5901 on a quarterly basis.

(2)

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)

(A)

Except as provided by the Secretary, each calendar year shall constitute a taxable period.

(B)

The Secretary shall provide for the filing, and the time for filing, of the return of the tax imposed under section 5901.

(b)

For purposes of this chapter—

(1)

The term producer means the holder of the economic interest with respect to the crude oil or natural gas.

(2)

The term crude oil includes crude oil condensates and natural gasoline.

(3)

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)

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)

The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this chapter.

.

(b)

The first sentence of section 164(a) is amended by inserting after paragraph (6) the following new paragraph:

(7)

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)

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)

The amendments made by this section shall apply to crude oil or natural gas removed after December 31, 2013.

29.

(a)

The Director of the Bureau of Land Management shall designate the Powder River Basin as a coal producing region.

(b)

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.

30.

(a)

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)

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)

(1)

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)

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.

H.R. 3574 (113^th): End Polluter Welfare Act of 2013

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