[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1816 Introduced in House (IH)]
103d CONGRESS
1st Session
H. R. 1816
To amend the Internal Revenue Code of 1986 to increase the percentage
depletion deduction for oil and natural gas produced from stripper well
properties, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 22, 1993
Mr. Brewster (for himself and Mr. McCrery) 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 increase the percentage
depletion deduction for oil and natural gas produced from stripper well
properties, 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 ``Stripper Well Operators Preservation
Act of 1993''.
SEC. 2. INCREASED PERCENTAGE DEPLETION FOR OIL AND NATURAL GAS PRODUCED
FROM STRIPPER WELL PROPERTIES.
(a) In General.--Subparagraph (C) of section 613A(c)(6) of the
Internal Revenue Code of 1986 (relating to oil and natural gas from
marginal properties) is amended--
(1) by striking ``25 percent'' and inserting ``28.5
percent'',
(2) by striking ``15 percent'' and inserting ``20
percent'', and
(3) by striking ``$20'' and inserting ``$28''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 3. NET INCOME LIMITATION ON PERCENTAGE DEPLETION REPEALED FOR
STRIPPER WELL PROPERTIES.
(a) In General.--Section 613(a) of the Internal Revenue Code of
1986 (relating to percentage depletion) is amended by striking the
second sentence and inserting: ``Except in the case of stripper well
properties as defined in section 613A(c)(6)(E) for which depletion is
computed in accordance with section 613A(c)(6), such allowance shall
not exceed 50 percent (100 percent in the case of oil and gas
properties other than stripper well properties as defined in section
613a(c)(6)(E) for which depletion is computed in accordance with
section 613A(c)(6)) of the taxpayer's taxable income from the property
(computed without allowance for depletion).''
(b) Conforming Amendment.--Section 613A(c)(7) of such Code
(relating to special rules) is amended by striking subparagraph (C) and
redesignating subparagraph (D) as subparagraph (C).
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of enactment of this
Act.
SEC. 4. EXPANSION OF ENHANCED OIL RECOVERY CREDIT.
(a) In General.--Section 43(a) of the Internal Revenue Code of 1986
(relating to enhanced oil recovery credit) is amended to read as
follows:
``(a) General Rule.--For purposes of section 38, the enhanced oil
recovery credit for any taxable year is an amount equal to--
``(1) 15 percent of the taxpayer's qualified enhanced oil
recovery costs for such taxable year, plus
``(2) in the case of a taxpayer (other than an integrated
oil company as defined in section 291(b)(4)), 15 percent of the
taxpayer's stripper well production costs for such taxable
year.''.
(b) Stripper Well Production Costs, Etc.--Section 43(c) of such
Code (defining qualified enhanced oil recovery costs) is amended by
redesignating paragraphs (3) and (4) as paragraphs (4) and (5),
respectively, and by inserting after paragraph (2) the following new
paragraph:
``(3) Stripper well production costs.--
``(A) In general.--The term `Stripper Well
Production costs' means any of the following:
``(i) Any amount paid or incurred during
the taxable year for tangible property--
``(I) which is an integral part of
a qualified stripper well recovery
project, and
``(II) with respect to which
depreciation (or amortization in lieu
of depreciation) is allowable under
this chapter.
``(ii) Any intangible drilling and
development costs--
``(I) which are paid or incurred in
connection with a qualified stripper
well recovery project, and
``(II) with respect to which the
taxpayer may make an election under
section 263(c) of the taxable year.
``(B) Qualified stripper well recovery project.--
The term `qualified stripper well recovery project'
means any project which--
``(i) involves a stripper well property as
defined in section 613A(c)(6)(E),
``(ii) involves the application (in
accordance with sound engineering principles)
of recovery methods approved by the Secretary
for purposes of this section which can
reasonably be expected to result in
prolongation of the productive life of such
stripper well property and in more than an
insignificant increase in the amount of crude
oil which will ultimately be recovered, and
``(iii) is located within the United States
(within the meaning of section 638(1)).
``(C) Certification.--A project shall not be
treated as a qualified stripper well recovery project
unless the operator submits to the Secretary (at such
times and in such manner as the Secretary provides) a
certification that the project meets (and continues to
meet) the requirement of subparagraph (B).''.
(c) No Double Certification.--Section 43(c) of such Code, as
amended by subsection (b), is amended by adding at the end thereof the
following new paragraph:
``(6) Only 1 certification allowed.--For purposes of this
section, the term `qualified enhanced oil recovery project'
shall not include any project which is certified as a qualified
advanced secondary recovery project under paragraph (3) and the
term `qualified stripper well recovery project' shall not
include any project which is certified as an enhanced oil
recovery project under paragraph (2).''.
(d) Conforming Amendments.--
(1) Paragraph (4) of section 43(c) of such Code, as
redesignated, is amended by inserting ``and qualified stripper
well recovery costs'' after ``qualified enhanced oil recovery
costs''.
(2) The heading for subsection (c) of section 43 of such
Code is amended by inserting ``and Qualified Stripper Well
Recovery Costs'' after ``Costs''.
(e) Effective Date.--The amendments made by this section shall
apply in the case of amounts paid or incurred in taxable years
beginning after the date of enactment of this Act.
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