I
117th CONGRESS
2d Session
H. R. 7871
IN THE HOUSE OF REPRESENTATIVES
May 24, 2022
Mr. McEachin (for himself, Mr. Casten, and Mr. Blumenauer) introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to repeal fossil fuel subsidies for oil companies, to establish gas price rebates to individuals for 2022, and for other purposes.
Short title
This Act may be cited as the People Over Petroleum Act
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Amortization of geological and geophysical expenditures
In general
Section 167(h) of the Internal Revenue Code of 1986 is amended—
by striking 24-month period
in paragraph (1) and inserting 7-year period
, and
by striking paragraph (5).
Effective date
The amendment made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2020.
Producing oil and gas from marginal wells
In general
Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by striking section 45I (and by striking the item relating to such section in the table of sections for such subpart).
Conforming amendment
Section 38(b) of such Code is amended by striking paragraph (19).
Effective date
The amendment made by subsection (a) shall apply to credits determined for taxable years beginning after December 31, 2020.
Enhanced oil recovery credit
In general
Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by striking section 43 (and by striking the item relating to such section in the table of sections for such subpart).
Conforming amendment
Section 38(b) of such Code is amended by striking paragraph (6).
Effective date
The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2020.
Intangible drilling and development costs in the case of oil and gas wells
In general
Subsection (c) of section 263 of the Internal Revenue Code of 1986 is amended by adding at the end the following new sentence: This subsection shall not apply to amounts paid or incurred by a taxpayer with respect to an oil or gas well after December 31, 2020.
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Effective date
The amendment made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2020.
Repeal of percentage depletion for oil and gas wells
In general
Part I of subchapter I of chapter 1 of the Internal Revenue Code of 1986 is amended by striking section 613A (and the table of sections of such part is amended by striking the item relating to such section).
Conforming amendments
Subsection (d) of section 45H of such Code is amended—
by striking For purposes of this section
and inserting the following:
In general
For purposes of this section
,
by striking (within the meaning of section 613A(d)(3))
, and
by adding at the end the following new paragraph:
Related person
For purposes of this subsection, a person is a related person with respect to the taxpayer if a significant ownership interest in either the taxpayer or such person is held by the other, or if a third person has a significant ownership interest in both the taxpayer and such person. For purposes of the preceding sentence, the term significant ownership interest means—
with respect to any corporation, 5 percent or more in value of the outstanding stock of such corporation,
with respect to a partnership, 5 percent or more interest in the profits or capital of such partnership, and
with respect to an estate or trust, 5 percent or more of the beneficial interests in such estate or trust.
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Section 57(a)(1) of such Code is amended by striking the last sentence.
Section 291(b)(4) of such Code is amended by adding at the end the following: Any reference in the preceding sentence to section 613A shall be treated as a reference to such section as in effect prior to the date of the enactment of the End Oil and Gas Tax Subsidies Act of 2021.
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Section 613(d) of such Code is amended by striking Except as provided in section 613A, in the case of
and inserting In the case of
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Section 613(e) of such Code is amended—
by striking or section 613A
in paragraph (2), and
by striking any amount described in section 613A(d)(5)
in paragraph (3) and inserting any lease bonus, advance royalty, or other amount payable without regard to production from property
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Section 705(a) of such Code is amended—
by inserting and
at the end of paragraph (1)(C),
by striking ; and
at the end of paragraph (2)(B) and inserting a period, and
by striking paragraph (3).
Section 993(c)(2)(C) of such Code is amended by striking section 613 or 613A
and inserting section 613 (determined without regard to subsection (d) thereof)
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Section 1202(e)(3)(D) of such Code is amended by striking section 613 or 613A
and inserting section 613 (determined without regard to subsection (d) thereof)
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Section 1367(a)(2) of such Code is amended by inserting and
at the end of subparagraph (C), by striking , and
at the end of subparagraph (D) and inserting a period, and by striking subparagraph (E).
Section 1446(c) of such Code is amended by striking paragraph (2) and by redesignating paragraph (3) as paragraph (2).
Effective date
The amendments made by this section shall apply to property placed in service after December 31, 2020.
Repeal of deduction for tertiary injectants
In general
Part VI of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by striking section 193 (and the table of sections of such subpart is amended by striking the item relating to such section).
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2020.
Repeal of exception to passive loss limitations for working interests in oil and gas properties
In general
Section 469(c)(3) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
Termination
Subparagraph (A) shall not apply with respect to any taxable year beginning after the date of the enactment of this Act.
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Effective date
The amendment made by this section shall apply to taxable years beginning after December 31, 2020.
Deduction for qualified business income not allowed with respect to oil and gas activities
In general
Section 199A(c)(3)(B) of the Internal Revenue Code of 1986 is amended by redesignating clause (vii) as clause (viii), and by inserting after clause (vi) the following new clause:
The production, refining, processing, transportation, or distribution of oil, gas, or any primary product thereof.
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Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2020.
Prohibition on using last-in, first-out accounting for oil and gas companies
In general
Section 472 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
Oil and gas companies
In general
Notwithstanding any other provision of this section, a major integrated oil company may not use the method provided in subsection (b) in inventorying of any goods.
Major integrated oil company
For purposes of this subsection, the term major integrated oil company means, with respect to any taxable year, a producer of crude oil—
which has an average daily worldwide production of crude oil of at least 500,000 barrels for the taxable year,
which has gross receipts in excess of $1,000,000,000 for the taxable year, and
the average daily refinery runs of the taxpayer and related persons for the taxable year exceed 75,000 barrels.
Special rules
Crude production and gross receipts
For purposes of subparagraphs (A) and (B) of paragraph (2)—
Controlled groups and common control
All persons treated as a single employer under subsections (a) and (b) of section 52 shall be treated as 1 person.
Short taxable years
In case of a short taxable year, the rule under section 448(c)(3)(B) shall apply.
Average daily refinery runs
For purposes of paragraph (2)(C)—
In general
The average daily refinery runs for any taxable year shall be determined by dividing the aggregate refinery runs for the taxable year by the number of days in the taxable year.
Related persons
A person is a related person with respect to the taxpayer if a significant ownership interest in either the taxpayer or such person is held by the other, or if a third person has a significant ownership interest in both the taxpayer and such person.
Significant ownership interest
For purposes of clause (ii), the term significant ownership interest means—
with respect to any corporation, 15 percent or more in value of the outstanding stock of such corporation,
with respect to a partnership, 15 percent or more interest in the profits or capital of such partnership, and
with respect to an estate or trust, 15 percent or more of the beneficial interests in such estate or trust.
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Effective date and special rule
In general
The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2020.
Change in method of accounting
In the case of any taxpayer required by the amendment made by this section to change its method of accounting for its first taxable year beginning after the date of the enactment of this Act—
such change shall be treated as initiated by the taxpayer,
such change shall be treated as made with the consent of the Secretary of the Treasury, and
the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account ratably over a period (not greater than 8 taxable years) beginning with such first taxable year.
Modifications of foreign tax credit rules applicable to dual capacity taxpayers
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:
Special rules relating to dual capacity taxpayers
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 to the extent such amount exceeds the amount (determined in accordance with regulations) which would have been required to be paid if the taxpayer were not a dual capacity taxpayer.
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—
is subject to a levy of such country or possession, and
receives (or will receive) directly or indirectly a specific economic benefit (as determined in accordance with regulations) from such country or possession.
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Effective date
In general
The amendments made by this section shall apply to taxes paid or accrued in taxable years beginning after December 31, 2020.
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.
Clarification of tar sands as crude oil for excise tax purposes
In general
Paragraph (1) of section 4612(a) of the Internal Revenue Code of 1986 is amended to read as follows:
Crude oil
The term crude oil
includes crude oil condensates, natural gasoline, any bitumen or bituminous mixture, any oil derived from a bitumen or bituminous mixture (including oil derived from tar sands), and any oil derived from kerogen-bearing sources (including oil derived from oil shale).
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Regulatory authority To address other types of crude oil and petroleum products
Subsection (a) of section 4612 of such Code is amended by adding at the end the following new paragraph:
Regulatory authority to address other types of crude oil and petroleum products
Under such regulations as the Secretary may prescribe, the Secretary may include as crude oil or as a petroleum product subject to tax under section 4611, any fuel feedstock or finished fuel product customarily transported by pipeline, vessel, railcar, or tanker truck if the Secretary determines that—
the classification of such fuel feedstock or finished fuel product is consistent with the definition of oil under the Oil Pollution Act of 1990, and
such fuel feedstock or finished fuel product is produced in sufficient commercial quantities as to pose a significant risk of hazard in the event of a discharge.
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Technical amendment
Paragraph (2) of section 4612(a) of such Code is amended by striking from a well located
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Effective date
The amendments made by this section shall take effect on the date of the enactment of this Act.
2022 gas prices rebate
In general
Subchapter B of chapter 65 of the Internal Revenue Code of 1986 is amended by inserting after section 6428B the following new section:
2022 gas prices rebate
In general
In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2022 an amount equal to the 2022 gas prices rebate amount determined for such taxable year.
2022 gas prices rebate amount
For purposes of this section, the term 2022 gas prices rebate amount
means, with respect to any taxpayer for any taxable year, the sum of—
$500 ($1,000 in the case of a joint return), plus
$500 multiplied by the number of dependents of the taxpayer for such taxable year who had attained the age of 16 as of the close of such taxable year.
Eligible individual
For purposes of this section, the term eligible individual
means any individual other than—
any nonresident alien individual,
any individual who is a dependent of another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins, and
an estate or trust.
Definitions and special rules
Dependent defined
For purposes of this section, the term dependent
has the meaning given such term by section 152.
Identification number requirement
In general
In the case of a return other than a joint return, the $500 amount in subsection (b)(1) shall be treated as being zero unless the taxpayer includes the valid identification number of the taxpayer on the return of tax for the taxable year.
Joint returns
In the case of a joint return, the $1,000 amount in subsection (b)(1) shall be treated as being—
$500 if the valid identification number of only 1 spouse is included on the return of tax for the taxable year, and
zero if the valid identification number of neither spouse is so included.
Dependents
A dependent shall not be taken into account under subsection (b)(2) unless the valid identification number of such dependent is included on the return of tax for the taxable year.
Valid identification number
In general
For purposes of this paragraph, the term valid identification number
means a social security number issued to an individual by the Social Security Administration on or before the due date for filing the return for the taxable year.
Adoption taxpayer identification number
For purposes of subparagraph (C), in the case of a dependent who is adopted or placed for adoption, the term valid identification number
shall include the adoption taxpayer identification number of such dependent.
Special rule for members of the armed forces
Subparagraph (B) shall not apply in the case where at least 1 spouse was a member of the Armed Forces of the United States at any time during the taxable year and the valid identification number of at least 1 spouse is included on the return of tax for the taxable year.
Coordination with certain advance payments
In the case of any payment determined pursuant to subsection (f)(6), a valid identification number shall be treated for purposes of this paragraph as included on the taxpayer’s return of tax if such valid identification number is available to the Secretary as described in such subsection.
Mathematical or clerical error authority
Any omission of a correct valid identification number required under this paragraph shall be treated as a mathematical or clerical error for purposes of applying section 6213(g)(2) to such omission.
Credit treated as refundable
The credit allowed by subsection (a) shall be treated as allowed by subpart C of part IV of subchapter A of chapter 1.
Coordination with advance refunds of credit
Reduction of refundable credit
The amount of the credit which would (but for this paragraph) be allowable under subsection (a) shall be reduced (but not below zero) by the aggregate refunds and credits made or allowed to the taxpayer (or, except as otherwise provided by the Secretary, any dependent of the taxpayer) under subsection (f). Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1).
Joint returns
Except as otherwise provided by the Secretary, in the case of a refund or credit made or allowed under subsection (f) with respect to a joint return, half of such refund or credit shall be treated as having been made or allowed to each individual filing such return.
Advance refunds and credits
In general
Subject to paragraphs (5) and (6), each individual who was an eligible individual for such individual’s first taxable year beginning in 2020 shall be treated as having made a payment against the tax imposed by chapter 1 for such taxable year in an amount equal to the advance refund amount for such taxable year.
Advance refund amount
In general
For purposes of paragraph (1), the advance refund amount is the amount that would have been allowed as a credit under this section for such taxable year if this section (other than subsection (e) and this subsection) had applied to such taxable year.
Treatment of deceased individuals
For purposes of determining the advance refund amount with respect to such taxable year—
any individual who was deceased before January 1, 2022, shall be treated for purposes of applying subsection (e)(2) in the same manner as if the valid identification number of such person was not included on the return of tax for such taxable year (except that subparagraph (E) thereof shall not apply),
notwithstanding clause (i), in the case of a joint return with respect to which only spouse is deceased before January 1, 2022, such deceased spouse was a member of the Armed Forces of the United States at any time during the taxable year, and the valid identification number of such deceased spouse is included on the return of tax for the taxable year, the valid identification number of 1 (and only 1) spouse shall be treated as included on the return of tax for the taxable year for purposes of applying subsection (e)(2)(B) with respect to such joint return, and
no amount shall be determined under subsection (d)(2) with respect to any dependent of the taxpayer if the taxpayer (both spouses in the case of a joint return) was deceased before January 1, 2022.
Timing and manner of payments
The Secretary shall, subject to the provisions of this title and consistent with rules similar to the rules of subparagraphs (B) and (C) of section 6428A(f)(3), refund or credit any overpayment attributable to this subsection as rapidly as possible, consistent with a rapid effort to make payments attributable to such overpayments electronically if appropriate. No refund or credit shall be made or allowed under this subsection after December 31, 2022.
No interest
No interest shall be allowed on any overpayment attributable to this subsection.
Application to individuals who have filed a return of tax for 2021
Application to 2021 returns filed at time of initial determination
If, at the time of any determination made pursuant to paragraph (3), the individual referred to in paragraph (1) has filed a return of tax for the individual’s first taxable year beginning in 2021, paragraph (1) shall be applied with respect to such individual by substituting 2021
for 2020
.
Additional payment
In general
In the case of any individual who files, before the additional payment determination date, a return of tax for such individual’s first taxable year beginning in 2021, the Secretary shall make a payment (in addition to any payment made under paragraph (1)) to such individual equal to the excess (if any) of—
the amount which would be determined under paragraph (1) (after the application of subparagraph (A)) by applying paragraph (1) as of the additional payment determination date, over
the amount of any payment made with respect to such individual under paragraph (1).
Additional payment determination date
The term additional payment determination date
means the earlier of—
the date which is 90 days after the 2021 calendar year filing deadline, or
September 1, 2022.
2021 calendar year filing deadline
The term 2021 calendar year filing deadline
means the date specified in section 6072(a) with respect to returns for calendar year 2021. Such date shall be determined after taking into account any period disregarded under section 7508A if such disregard applies to substantially all returns for calendar year 2021 to which section 6072(a) applies.
Application to certain individuals who have not filed a return of tax for 2020 or 2021 at time of determination
In the case of any individual who, at the time of any determination made pursuant to paragraph (3), has filed a tax return for neither the year described in paragraph (1) nor for the year described in paragraph (5)(A), the Secretary shall, consistent with rules similar to the rules of section 6428A(f)(5)(H)(i), apply paragraph (1) on the basis of information available to the Secretary and shall, on the basis of such information, determine the advance refund amount with respect to such individual.
Special rule related to time of filing return
Solely for purposes of this subsection, a return of tax shall not be treated as filed until such return has been processed by the Internal Revenue Service.
Restriction on use of certain previously issued prepaid debit cards
Payments made by the Secretary to individuals under this section shall not be in the form of an increase in the balance of any previously issued prepaid debit card if, as of the time of the issuance of such card, such card was issued solely for purposes of making payments under section 6428, 6428A, or 6428B.
Regulations
The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including—
regulations or other guidance providing taxpayers the opportunity to provide the Secretary information sufficient to allow the Secretary to make payments to such taxpayers under subsection (f) (including the determination of the amount of such payment) if such information is not otherwise available to the Secretary, and
regulations or other guidance to ensure to the maximum extent administratively practicable that, in determining the amount of any credit under subsection (a) and any credit or refund under subsection (f), an individual is not taken into account more than once, including by different taxpayers and including by reason of a change in joint return status or dependent status between the taxable year for which an advance refund amount is determined and the taxable year for which a credit under subsection (a) is determined.
Outreach
The Secretary shall carry out a robust and comprehensive outreach program to ensure that all taxpayers described in subsection (g)(1) learn of their eligibility for the advance refunds and credits under subsection (f); are advised of the opportunity to receive such advance refunds and credits as provided under subsection (g)(1); and are provided assistance in applying for such advance refunds and credits.
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Treatment of certain possessions
Payments to possessions with mirror code tax systems
The Secretary of the Treasury shall pay to each possession of the United States which has a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the amendments made by this section. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession.
Payments to other possessions
The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits (if any) that would have been provided to residents of such possession by reason of the amendments made by this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to its residents.
Inclusion of administrative expenses
The Secretary of the Treasury shall pay to each possession of the United States to which the Secretary makes a payment under paragraph (1) or (2) an amount equal to the lesser of—
the increase (if any) of the administrative expenses of such possession—
in the case of a possession described in paragraph (1), by reason of the amendments made by this section, and
in the case of a possession described in paragraph (2), by reason of carrying out the plan described in such paragraph, or
$500,000 ($10,000,000 in the case of Puerto Rico).
Coordination with credit allowed against united states income taxes
No credit shall be allowed against United States income taxes under section 6428C of the Internal Revenue Code of 1986 (as added by this section), nor shall any credit or refund be made or allowed under subsection (f) of such section, to any person—
to whom a credit is allowed against taxes imposed by the possession by reason of the amendments made by this section, or
who is eligible for a payment under a plan described in paragraph (2).
Mirror code tax system
For purposes of this subsection, the term mirror code tax system
means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.
Treatment of payments
For purposes of section 1324 of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.
Administrative provisions
Definition of deficiency
Section 6211(b)(4)(A) of the Internal Revenue Code of 1986 is amended by striking and 6428B
and inserting 6428B, and 6428C
.
Exception from reduction or offset
Any refund payable by reason of section 6428C(f) of the Internal Revenue Code of 1986 (as added by this section), or any such refund payable by reason of subsection (b) of this section, shall not be—
subject to reduction or offset pursuant to subsection (c), (d), (e), or (f) of section 6402 of the Internal Revenue Code of 1986 or any similar authority permitting offset, or
reduced or offset by other assessed Federal taxes that would otherwise be subject to levy or collection.
Conforming amendments
Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting 6428C,
after 6428B,
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The table of sections for subchapter B of chapter 65 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 6428A the following new item:
Sec. 6428C. 2022 gas prices rebate.
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