I
119THCONGRESS
1
STSESSION H. R. 383
To amend the Internal Revenue Code of 1986 to repeal fossil fuel subsidies
for oil companies, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY14, 2025
Mr. C
ASTEN(for himself, Mr. BEYER, Mr. LEVIN, Ms. BROWNLEY, Mr.
C
LEAVER, Mr. COHEN, Mr. HUFFMAN, Mr. KHANNA, Ms. PINGREE, Ms.
S
CHAKOWSKY, Mr. TONKO, and Ms. MOOREof Wisconsin) 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, and for other purposes.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘End Oil and Gas Tax 4
Subsidies Act of 2025’’. 5
SEC. 2. AMORTIZATION OF GEOLOGICAL AND GEO-6
PHYSICAL EXPENDITURES. 7
(a) I
NGENERAL.—Section 167(h) of the Internal 8
Revenue Code of 1986 is amended— 9
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(1) by striking ‘‘24-month period’’ in paragraph 1
(1) and inserting ‘‘7-year period’’, and 2
(2) by striking paragraph (5). 3
(b) E
FFECTIVEDATE.—The amendment made by 4
this section shall apply to amounts paid or incurred in tax-5
able years beginning after December 31, 2024. 6
SEC. 3. PRODUCING OIL AND GAS FROM MARGINAL WELLS. 7
(a) I
NGENERAL.—Subpart D of part IV of sub-8
chapter A of chapter 1 of the Internal Revenue Code of 9
1986 is amended by striking section 45I (and by striking 10
the item relating to such section in the table of sections 11
for such subpart). 12
(b) C
ONFORMINGAMENDMENT.—Section 38(b) of 13
such Code is amended by striking paragraph (19). 14
(c) E
FFECTIVEDATE.—The amendment made by 15
subsection (a) shall apply to credits determined for taxable 16
years beginning after December 31, 2024. 17
SEC. 4. ENHANCED OIL RECOVERY CREDIT. 18
(a) I
NGENERAL.—Subpart D of part IV of sub-19
chapter A of chapter 1 of the Internal Revenue Code of 20
1986 is amended by striking section 43 (and by striking 21
the item relating to such section in the table of sections 22
for such subpart). 23
(b) C
ONFORMINGAMENDMENT.—Section 38(b) of 24
such Code is amended by striking paragraph (6). 25
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(c) EFFECTIVEDATE.—The amendments made by 1
this section shall apply to amounts paid or incurred in tax-2
able years beginning after December 31, 2024. 3
SEC. 5. INTANGIBLE DRILLING AND DEVELOPMENT COSTS 4
IN THE CASE OF OIL AND GAS WELLS. 5
(a) I
NGENERAL.—Subsection (c) of section 263 of 6
the Internal Revenue Code of 1986 is amended by adding 7
at the end the following new sentence: ‘‘This subsection 8
shall not apply to amounts paid or incurred by a taxpayer 9
with respect to an oil or gas well after December 31, 10
2024.’’. 11
(b) E
FFECTIVEDATE.—The amendment made by 12
this section shall apply to amounts paid or incurred in tax-13
able years beginning after December 31, 2024. 14
SEC. 6. REPEAL OF PERCENTAGE DEPLETION FOR OIL AND 15
GAS WELLS. 16
(a) I
NGENERAL.—Part I of subchapter I of chapter 17
1 of the Internal Revenue Code of 1986 is amended by 18
striking section 613A (and the table of sections of such 19
part is amended by striking the item relating to such sec-20
tion). 21
(b) C
ONFORMINGAMENDMENTS.— 22
(1) Subsection (d) of section 45H of such Code 23
is amended— 24
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(A) by striking ‘‘For purposes of this sec-1
tion’’ and inserting the following: 2
‘‘(1) I
N GENERAL.—For purposes of this sec-3
tion’’, 4
(B) by striking ‘‘(within the meaning of 5
section 613A(d)(3))’’, and 6
(C) by adding at the end the following new 7
paragraph: 8
‘‘(2) R
ELATED PERSON.—For purposes of this 9
subsection, a person is a related person with respect 10
to the taxpayer if a significant ownership interest in 11
either the taxpayer or such person is held by the 12
other, or if a third person has a significant owner-13
ship interest in both the taxpayer and such person. 14
For purposes of the preceding sentence, the term 15
‘significant ownership interest’ means— 16
‘‘(A) with respect to any corporation, 5 17
percent or more in value of the outstanding 18
stock of such corporation, 19
‘‘(B) with respect to a partnership, 5 per-20
cent or more interest in the profits or capital of 21
such partnership, and 22
‘‘(C) with respect to an estate or trust, 5 23
percent or more of the beneficial interests in 24
such estate or trust. 25
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For purposes of determining a significant ownership 1
interest, an interest owned by or for a corporation, 2
partnership, trust, or estate shall be considered as 3
owned directly both by itself and proportionately by 4
its shareholders, partners, or beneficiaries, as the 5
case may be.’’. 6
(2) Section 57(a)(1) of such Code is amended 7
by striking the last sentence. 8
(3) Section 291(b)(4) of such Code is amended 9
by adding at the end the following: ‘‘Any reference 10
in the preceding sentence to section 613A shall be 11
treated as a reference to such section as in effect 12
prior to the date of the enactment of the End Oil 13
and Gas Tax Subsidies Act of 2025.’’. 14
(4) Section 613(d) of such Code is amended by 15
striking ‘‘Except as provided in section 613A, in the 16
case of’’ and inserting ‘‘In the case of’’. 17
(5) Section 613(e) of such Code is amended— 18
(A) by striking ‘‘or section 613A’’ in para-19
graph (2), and 20
(B) by striking ‘‘any amount described in 21
section 613A(d)(5)’’ in paragraph (3) and in-22
serting ‘‘any lease bonus, advance royalty, or 23
other amount payable without regard to produc-24
tion from property’’. 25
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(6) Section 705(a) of such Code is amended— 1
(A) by inserting ‘‘and’’ at the end of para-2
graph (1)(C), 3
(B) by striking ‘‘; and’’ at the end of para-4
graph (2)(B) and inserting a period, and 5
(C) by striking paragraph (3). 6
(7) Section 993(c)(2)(C) of such Code is 7
amended by striking ‘‘section 613 or 613A’’ and in-8
serting ‘‘section 613 (determined without regard to 9
subsection (d) thereof)’’. 10
(8) Section 1202(e)(3)(D) of such Code is 11
amended by striking ‘‘section 613 or 613A’’ and in-12
serting ‘‘section 613 (determined without regard to 13
subsection (d) thereof)’’. 14
(9) Section 1367(a)(2) of such Code is amended 15
by inserting ‘‘and’’ at the end of subparagraph (C), 16
by striking ‘‘, and’’ at the end of subparagraph (D) 17
and inserting a period, and by striking subparagraph 18
(E). 19
(10) Section 1446(c) of such Code is amended 20
by striking paragraph (2) and by redesignating 21
paragraph (3) as paragraph (2). 22
(c) E
FFECTIVEDATE.—The amendments made by 23
this section shall apply to property placed in service after 24
December 31, 2024. 25
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SEC. 7. REPEAL OF DEDUCTION FOR TERTIARY 1
INJECTANTS. 2
(a) I
NGENERAL.—Part VI of subchapter B of chap-3
ter 1 of the Internal Revenue Code of 1986 is amended 4
by striking section 193 (and the table of sections of such 5
subpart is amended by striking the item relating to such 6
section). 7
(b) E
FFECTIVEDATE.—The amendments made by 8
this section shall apply to taxable years beginning after 9
December 31, 2024. 10
SEC. 8. REPEAL OF EXCEPTION TO PASSIVE LOSS LIMITA-11
TIONS FOR WORKING INTERESTS IN OIL AND 12
GAS PROPERTIES. 13
(a) I
NGENERAL.—Section 469(c)(3) of the Internal 14
Revenue Code of 1986 is amended by adding at the end 15
the following new subparagraph: 16
‘‘(C) T
ERMINATION.—Subparagraph (A) 17
shall not apply with respect to any taxable year 18
beginning after the date of the enactment of 19
this Act.’’. 20
(b) E
FFECTIVEDATE.—The amendment made by 21
this section shall apply to taxable years beginning after 22
December 31, 2024. 23
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SEC. 9. DEDUCTION FOR QUALIFIED BUSINESS INCOME 1
NOT ALLOWED WITH RESPECT TO OIL AND 2
GAS ACTIVITIES. 3
(a) I
NGENERAL.—Section 199A(c)(3)(B) of the In-4
ternal Revenue Code of 1986 is amended by redesignating 5
clause (vii) as clause (viii), and by inserting after clause 6
(vi) the following new clause: 7
‘‘(vii) The production, refining, proc-8
essing, transportation, or distribution of 9
oil, gas, or any primary product thereof.’’. 10
(b) E
FFECTIVEDATE.—The amendments made by 11
this section shall apply to taxable years beginning after 12
December 31, 2024. 13
SEC. 10. PROHIBITION ON USING LAST-IN, FIRST-OUT AC-14
COUNTING FOR OIL AND GAS COMPANIES. 15
(a) I
NGENERAL.—Section 472 of the Internal Rev-16
enue Code of 1986 is amended by adding at the end the 17
following new subsection: 18
‘‘(h) O
IL ANDGASCOMPANIES.— 19
‘‘(1) I
N GENERAL.—Notwithstanding any other 20
provision of this section, a major integrated oil com-21
pany may not use the method provided in subsection 22
(b) in inventorying of any goods. 23
‘‘(2) M
AJOR INTEGRATED OIL COMPANY .—For 24
purposes of this subsection, the term ‘major inte-25
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grated oil company’ means, with respect to any tax-1
able year, a producer of crude oil— 2
‘‘(A) which has an average daily worldwide 3
production of crude oil of at least 500,000 bar-4
rels for the taxable year, 5
‘‘(B) which has gross receipts in excess of 6
$1,000,000,000 for the taxable year, and 7
‘‘(C) the average daily refinery runs of the 8
taxpayer and related persons for the taxable 9
year exceed 75,000 barrels. 10
‘‘(3) S
PECIAL RULES.— 11
‘‘(A) C
RUDE PRODUCTION AND GROSS RE -12
CEIPTS.—For purposes of subparagraphs (A) 13
and (B) of paragraph (2)— 14
‘‘(i) C
ONTROLLED GROUPS AND COM -15
MON CONTROL.—All persons treated as a 16
single employer under subsections (a) and 17
(b) of section 52 shall be treated as 1 per-18
son. 19
‘‘(ii) S
HORT TAXABLE YEARS .—In 20
case of a short taxable year, the rule under 21
section 448(c)(3)(B) shall apply. 22
‘‘(B) A
VERAGE DAILY REFINERY RUNS .— 23
For purposes of paragraph (2)(C)— 24
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‘‘(i) IN GENERAL.—The average daily 1
refinery runs for any taxable year shall be 2
determined by dividing the aggregate refin-3
ery runs for the taxable year by the num-4
ber of days in the taxable year. 5
‘‘(ii) R
ELATED PERSONS .—A person 6
is a related person with respect to the tax-7
payer if a significant ownership interest in 8
either the taxpayer or such person is held 9
by the other, or if a third person has a sig-10
nificant ownership interest in both the tax-11
payer and such person. 12
‘‘(iii) S
IGNIFICANT OWNERSHIP IN -13
TEREST.—For purposes of clause (ii), the 14
term ‘significant ownership interest’ 15
means— 16
‘‘(I) with respect to any corpora-17
tion, 15 percent or more in value of 18
the outstanding stock of such corpora-19
tion, 20
‘‘(II) with respect to a partner-21
ship, 15 percent or more interest in 22
the profits or capital of such partner-23
ship, and 24
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‘‘(III) with respect to an estate 1
or trust, 15 percent or more of the 2
beneficial interests in such estate or 3
trust. 4
For purposes of determining a significant 5
ownership interest, an interest owned by or 6
for a corporation, partnership, trust, or es-7
tate shall be considered as owned directly 8
both by itself and proportionately by its 9
shareholders, partners, or beneficiaries, as 10
the case may be.’’. 11
(b) E
FFECTIVEDATE ANDSPECIALRULE.— 12
(1) I
N GENERAL.—The amendment made by 13
subsection (a) shall apply to taxable years beginning 14
after December 31, 2024. 15
(2) C
HANGE IN METHOD OF ACCOUNTING .—In 16
the case of any taxpayer required by the amendment 17
made by this section to change its method of ac-18
counting for its first taxable year beginning after the 19
date of the enactment of this Act— 20
(A) such change shall be treated as initi-21
ated by the taxpayer, 22
(B) such change shall be treated as made 23
with the consent of the Secretary of the Treas-24
ury, and 25
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(C) the net amount of the adjustments re-1
quired to be taken into account by the taxpayer 2
under section 481 of the Internal Revenue Code 3
of 1986 shall be taken into account ratably over 4
a period (not greater than 8 taxable years) be-5
ginning with such first taxable year. 6
SEC. 11. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 7
APPLICABLE TO DUAL CAPACITY TAXPAYERS. 8
(a) I
NGENERAL.—Section 901 of the Internal Rev-9
enue Code of 1986 is amended by redesignating subsection 10
(n) as subsection (o) and by inserting after subsection (m) 11
the following new subsection: 12
‘‘(n) S
PECIALRULESRELATING TODUALCAPACITY 13
T
AXPAYERS.— 14
‘‘(1) G
ENERAL RULE.—Notwithstanding any 15
other provision of this chapter, any amount paid or 16
accrued by a dual capacity taxpayer to a foreign 17
country or possession of the United States for any 18
period with respect to combined foreign oil and gas 19
income (as defined in section 907(b)(1)) shall not be 20
considered a tax to the extent such amount exceeds 21
the amount (determined in accordance with regula-22
tions) which would have been required to be paid if 23
the taxpayer were not a dual capacity taxpayer. 24
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‘‘(2) DUAL CAPACITY TAXPAYER .—For pur-1
poses of this subsection, the term ‘dual capacity tax-2
payer’ means, with respect to any foreign country or 3
possession of the United States, a person who— 4
‘‘(A) is subject to a levy of such country or 5
possession, and 6
‘‘(B) receives (or will receive) directly or 7
indirectly a specific economic benefit (as deter-8
mined in accordance with regulations) from 9
such country or possession.’’. 10
(b) E
FFECTIVEDATE.— 11
(1) I
N GENERAL.—The amendments made by 12
this section shall apply to taxes paid or accrued in 13
taxable years beginning after December 31, 2024. 14
(2) C
ONTRARY TREATY OBLIGATIONS 15
UPHELD.—The amendments made by this section 16
shall not apply to the extent contrary to any treaty 17
obligation of the United States. 18
SEC. 12. CLARIFICATION OF TAR SANDS AS CRUDE OIL FOR 19
EXCISE TAX PURPOSES. 20
(a) I
NGENERAL.—Paragraph (1) of section 4612(a) 21
of the Internal Revenue Code of 1986 is amended to read 22
as follows: 23
‘‘(1) C
RUDE OIL.—The term ‘crude oil’ includes 24
crude oil condensates, natural gasoline, any bitumen 25
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or bituminous mixture, any oil derived from a bitu-1
men or bituminous mixture (including oil derived 2
from tar sands), and any oil derived from kerogen- 3
bearing sources (including oil derived from oil 4
shale).’’. 5
(b) R
EGULATORYAUTHORITYTOADDRESSOTHER 6
T
YPES OFCRUDEOIL ANDPETROLEUMPRODUCTS.— 7
Subsection (a) of section 4612 of such Code is amended 8
by adding at the end the following new paragraph: 9
‘‘(10) R
EGULATORY AUTHORITY TO ADDRESS 10
OTHER TYPES OF CRUDE OIL AND PETROLEUM 11
PRODUCTS.—Under such regulations as the Sec-12
retary may prescribe, the Secretary may include as 13
crude oil or as a petroleum product subject to tax 14
under section 4611, any fuel feedstock or finished 15
fuel product customarily transported by pipeline, 16
vessel, railcar, or tanker truck if the Secretary deter-17
mines that— 18
‘‘(A) the classification of such fuel feed-19
stock or finished fuel product is consistent with 20
the definition of oil under the Oil Pollution Act 21
of 1990, and 22
‘‘(B) such fuel feedstock or finished fuel 23
product is produced in sufficient commercial 24
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quantities as to pose a significant risk of haz-1
ard in the event of a discharge.’’. 2
(c) T
ECHNICALAMENDMENT.—Paragraph (2) of sec-3
tion 4612(a) of such Code is amended by striking ‘‘from 4
a well located’’. 5
(d) E
FFECTIVEDATE.—The amendments made by 6
this section shall take effect on the date of the enactment 7
of this Act. 8
Æ
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