HR 1116 IH
106th CONGRESS
1st Session
H. R. 1116
To amend the Internal Revenue Code of 1986 to establish a graduated
response to shrinking domestic oil and gas production and surging foreign oil
imports, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
March 16, 1999
Mr. MORAN of Kansas (for himself, Mr. SESSIONS, Mr. PICKERING, and Mr.
WATKINS) 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 establish a graduated
response to shrinking domestic oil and gas production and surging foreign oil
imports, 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; AMENDMENT OF 1986 CODE.
(a) SHORT TITLE- This Act may be cited as the `Domestic Oil and Gas Crisis
Tax Relief and Foreign Oil Reliance Reversal Act of 1999'.
(b) AMENDMENT OF 1986 CODE- Except as otherwise expressly provided,
whenever in this Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the reference shall
be considered to be made to a section or other provision of the Internal
Revenue Code of 1986.
SEC. 2. PURPOSES.
The purposes of this Act are--
(1) to establish a graduated response to shrinking domestic oil and gas
production and surging foreign oil imports;
(2) to prevent the abandonment of marginal oil and gas wells responsible
for half of the domestic oil and gas production of the United States;
(3) to transform earned tax credits and other tax benefits into working
capital for the cash-strapped domestic oil and gas producers and service
companies;
(4) to reverse the trend of increased dependence on foreign oil and gas
by encouraging exploration and development of oil and gas reserves in the
United States to achieve the goal of doubling current domestic oil and gas
production; and
(5) to provide an emergency procedure for times when foreign imports
exceed 60 percent of the total United States crude and oil product
consumption, thereby recognizing that when imports exceed a statutory level
a national security threat exists that demands Presidential action.
SEC. 3. FINDINGS.
Congress finds the following:
(1) Foreign oil consumption in the United States is estimated to be
equal to 56 percent of total oil consumption and could reach 68 percent by
the year 2010 if current prices prevail.
(2) The number of oil and gas rigs operating in the United States is at
the lowest count since 1944, when records of this number began to be
recorded.
(3) If oil prices do not increase soon, the United States could lose at
least half of its marginal wells which, in the aggregate, produce as much
oil as the amount of oil the United States imports from Saudi Arabia.
(4) Oil and gas prices are unlikely to increase for the next several
years.
(5) Declining production, well abandonment, and the lack of exploration
and development are shrinking the domestic oil and gas industry.
(6) It is essential in order for the United States to have a vibrant
economy to have a healthy domestic oil and gas industry.
(7) The world's richest oil producing regions in the Middle East are
experiencing great political instability.
(8) The policy of the United Nations may make Iraq the swing oil
producing nation, thereby granting an enemy of the United States a
tremendous amount of power.
(9) Reliance on foreign oil for more than 60 percent of the daily oil
and gas consumption in the United States is a national security
threat.
(10) The United States is the leader of the free world and has a
worldwide responsibility to promote economic and political security.
(11) The exercise of traditional responsibilities in the United States
and abroad in foreign policy requires that the United States be free of the
risk of energy blackmail in times of gas and oil shortages.
(12) The level of the United States energy security is directly related
to the level of domestic production of oil, natural gas liquids, and natural
gas.
(13) A national energy policy should be developed which ensures that
adequate supplies of oil are available at all times free of the threat of
embargo or other foreign hostile acts.
SEC. 4. TABLE OF CONTENTS.
The table of contents of this Act is as follows:
Sec. 1. Short title; amendment of 1986 Code.
Sec. 4. Table of contents.
TITLE I--DOMESTIC OIL AND GAS PRODUCTION PRESERVATION PROVISIONS
Sec. 101. Tax credit for marginal domestic oil and natural gas well
production.
Sec. 102. Exclusion of certain amounts received from recovered inactive
wells.
Sec. 103. Enhanced oil recovery credit extended to certain nontertiary
recovery methods.
TITLE II--DOMESTIC OIL AND GAS INDUSTRY CRISIS TAX RELIEF
Subtitle A--Credits to Cash Provisions
Sec. 201. 10-year carryback for unused minimum tax credit.
Sec. 202. 10-year carryback for percentage depletion for oil and gas
property.
Sec. 203. 10-year net operating loss carryback for losses attributable
to oil servicing companies and mineral interests of oil and gas
producers.
Sec. 204. Waiver of limitations.
Subtitle B--Hard Times Tax Relief
Sec. 211. Phase-out of certain minimum tax preferences relating to
energy production.
Sec. 212. Depreciation adjustment not to apply to oil and gas
assets.
Sec. 213. Repeal certain adjustments based on adjusted current earnings
relating to oil and gas assets.
Sec. 214. Enhanced oil recovery credit and credit for producing fuel
from a nonconventional source allowed against minimum tax.
Subtitle C--Oil-for-Food Program Compensating Tax Benefits
Sec. 221. Increase in percentage depletion for stripper wells.
Sec. 222. Net income limitation on percentage depletion repealed for oil
and gas properties.
Sec. 223. Election to expense geological and geophysical expenditures
and delay rental payments.
Sec. 224. Extension of Spudding rule.
TITLE III--FOREIGN OIL RELIANCE REVERSAL PROVISIONS
Sec. 301. Crude oil and natural gas exploration and development
credit.
TITLE IV--NATIONAL SECURITY EMERGENCY PROVISIONS
Sec. 401. Duties of the President.
Sec. 402. Congressional review.
Sec. 403. National security and oil production actions.
TITLE I--DOMESTIC OIL AND GAS PRODUCTION PRESERVATION
PROVISIONS
SEC. 101. TAX CREDIT FOR MARGINAL DOMESTIC OIL AND NATURAL GAS WELL
PRODUCTION.
(a) PURPOSE- The purpose of this section is to prevent the abandonment of
marginal oil and gas wells responsible for half of the domestic production of
oil and gas in the United States.
(b) CREDIT FOR PRODUCING OIL AND GAS FROM MARGINAL WELLS- Subpart D of
part IV of subchapter A of chapter 1 (relating to business credits) is amended
by adding at the end the following new section:
`SEC. 45D. CREDIT FOR PRODUCING OIL AND GAS FROM MARGINAL WELLS.
`(a) GENERAL RULE- For purposes of section 38, the marginal well
production credit for any taxable year is an amount equal to the product
of--
`(1) the credit amount, and
`(2) the qualified crude oil production and the qualified natural gas
production which is attributable to the taxpayer.
`(b) CREDIT AMOUNT- For purposes of this section--
`(1) IN GENERAL- The credit amount is--
`(A) $3 per barrel of qualified crude oil production, and
`(B) 50 cents per 1,000 cubic feet of qualified natural gas
production.
`(2) REDUCTION AS OIL AND GAS PRICES INCREASE-
`(A) IN GENERAL- The $3 and 50 cents amounts under paragraph (1) shall
each be reduced (but not below zero) by an amount which bears the same
ratio to such amount (determined without regard to this paragraph)
as--
`(i) the excess (if any) of the applicable reference price over $14
($1.56 for qualified natural gas production), bears to
`(ii) $3 ($0.33 for qualified natural gas production).
The applicable reference price for a taxable year is the reference
price for the calendar year preceding the calendar year in which the
taxable year begins.
`(B) INFLATION ADJUSTMENT- In the case of any taxable year beginning
in a calendar year after 2000, each of the dollar amounts contained in
subparagraph (A) shall be increased to an amount equal to such dollar
amount multiplied by the inflation adjustment factor for such calendar
year (determined under section 43(b)(3)(B) by substituting `1999' for
`1990').
`(C) REFERENCE PRICE- For purposes of this paragraph, the term
`reference price' means, with respect to any calendar year--
`(i) in the case of qualified crude oil production, the reference
price determined under section 29(d)(2)(C), and
`(ii) in the case of qualified natural gas production, the
Secretary's estimate of the annual average wellhead price per 1,000
cubic feet for all domestic natural gas.
`(c) QUALIFIED CRUDE OIL AND NATURAL GAS PRODUCTION- For purposes of this
section--
`(1) IN GENERAL- The terms `qualified crude oil production' and
`qualified natural gas production' mean domestic crude oil or natural gas
which is produced from a marginal well.
`(2) LIMITATION ON AMOUNT OF PRODUCTION WHICH MAY QUALIFY-
`(A) IN GENERAL- Crude oil or natural gas produced during any taxable
year from any well shall not be treated as qualified crude oil production
or qualified natural gas production
to the extent production from the well during the taxable year exceeds 1,095
barrels or barrel equivalents.
`(B) PROPORTIONATE REDUCTIONS-
`(i) SHORT TAXABLE YEARS- In the case of a short taxable year, the
limitations under this paragraph shall be proportionately reduced to
reflect the ratio which the number of days in such taxable year bears to
365.
`(ii) WELLS NOT IN PRODUCTION ENTIRE YEAR- In the case of a well
which is not capable of production during each day of a taxable year,
the limitations under this paragraph applicable to the well shall be
proportionately reduced to reflect the ratio which the number of days of
production bears to the total number of days in the taxable
year.
`(A) MARGINAL WELL- The term `marginal well' means a domestic
well--
`(i) the production from which during the taxable year is treated as
marginal production under section 613A(c)(6), or
`(ii) which, during the taxable year--
`(I) has average daily production of not more than 25 barrel
equivalents, and
`(II) produces water at a rate not less than 95 percent of total
well effluent.
`(B) CRUDE OIL, ETC- The terms `crude oil', `natural gas', `domestic',
and `barrel' have the meanings given such terms by section
613A(e).
`(C) BARREL EQUIVALENT- The term `barrel equivalent' means, with
respect to natural gas, a conversion ratio of 6,000 cubic feet of natural
gas to 1 barrel of crude oil.
`(1) PRODUCTION ATTRIBUTABLE TO THE TAXPAYER- In the case of a marginal
well in which there is more than one owner of operating interests in the
well and the crude oil or natural gas production exceeds the limitation
under subsection (c)(2), qualifying crude oil production or qualifying
natural gas production attributable to the taxpayer shall be determined on
the basis of the ratio which taxpayer's revenue interest in the production
bears to the aggregate of the revenue interests of all operating interest
owners in the production.
`(2) OPERATING INTEREST REQUIRED- Any credit under this section may be
claimed only on production which is attributable to the holder of an
operating interest.
`(3) PRODUCTION FROM NONCONVENTIONAL SOURCES EXCLUDED- In the case of
production from a marginal well which is eligible for the credit allowed
under section 29 for the taxable year, no credit shall be allowable under
this section unless the taxpayer elects not to claim the credit under
section 29 with respect to the well.'.
(c) CREDIT TREATED AS BUSINESS CREDIT- Section 38(b) is amended by
striking `plus' at the end of paragraph (11), by striking the period at the
end of paragraph (12) and inserting `, plus', and by adding at the end the
following new paragraph:
`(13) the marginal oil and gas well production credit determined under
section 45D(a).'.
(d) CREDIT ALLOWED AGAINST REGULAR AND MINIMUM TAX-
(1) IN GENERAL- Subsection (c) of section 38 (relating to limitation
based on amount of tax) is amended by redesignating paragraph (3) as
paragraph (4) and by inserting after paragraph (2) the following new
paragraph:
`(3) SPECIAL RULES FOR MARGINAL OIL AND GAS WELL PRODUCTION
CREDIT-
`(A) IN GENERAL- In the case of the marginal oil and gas well
production credit--
`(i) this section and section 39 shall be applied separately with
respect to the credit, and
`(ii) in applying paragraph (1) to the credit--
`(I) subparagraphs (A) and (B) thereof shall not apply,
and
`(II) the limitation under paragraph (1) (as modified by subclause
(I)) shall be reduced by the credit allowed under subsection (a) for
the taxable year (other than the marginal oil and gas well production
credit).
`(B) MARGINAL OIL AND GAS WELL PRODUCTION CREDIT- For purposes of this
subsection, the term `marginal oil and gas well production credit' means
the credit allowable under subsection (a) by reason of section
45D(a).'.
(2) CONFORMING AMENDMENT- Subclause (II) of section 38(c)(2)(A)(ii) is
amended by inserting `or the marginal oil and gas well production credit'
after `employment credit'.
(e) CARRYBACK- Subsection (a) of section 39 (relating to carryback and
carryforward of unused
credits generally) is amended by adding at the end the following new
paragraph:
`(3) 10-YEAR CARRYBACK FOR MARGINAL OIL AND GAS WELL PRODUCTION CREDIT-
In the case of the marginal oil and gas well production credit--
`(A) this section shall be applied separately from the business credit
(other than the marginal oil and gas well production credit),
`(B) paragraph (1) shall be applied by substituting `10 taxable years'
for `1 taxable years' in subparagraph (A) thereof, and
`(C) paragraph (2) shall be applied--
`(i) by substituting `31 taxable years' for `21 taxable years' in
subparagraph (A) thereof, and
`(ii) by substituting `30 taxable years' for `20 taxable years' in
subparagraph (B) thereof.'
(f) COORDINATION WITH SECTION 29- Section 29(a) is amended by striking
`There' and inserting `At the election of the taxpayer, there'.
(g) CLERICAL AMENDMENT- The table of sections for subpart D of part IV of
subchapter A of chapter 1 is amended by adding at the end the following
item:
`45D. Credit for producing oil and gas from marginal
wells.'
(h) EFFECTIVE DATE- The amendments made by this section shall apply to
production after the date of the enactment of this Act.
SEC. 102. EXCLUSION OF CERTAIN AMOUNTS RECEIVED FROM RECOVERED INACTIVE
WELLS.
(a) PURPOSE- The purpose of this section is to encourage producers to
reopen wells that have not been producing oil and gas because the wells have
been plugged or abandoned.
(b) IN GENERAL- Part III of subchapter B of chapter 1 (relating to items
specifically excluded from gross income) is amended by redesignating section
139 as section 140 and by inserting after section 138 the following new
section:
`SEC. 139. OIL OR GAS PRODUCED FROM A RECOVERED INACTIVE WELL.
`(a) IN GENERAL- Gross income does not include income attributable to
independent producer oil from a recovered inactive well.
`(b) DEFINITIONS- For purposes of this section--
`(1) INDEPENDENT PRODUCER OIL- The term `independent producer oil' means
crude oil or natural gas in which the economic interest of the independent
producer is attributable to an operating mineral interest (within the
meaning of section 614(d)), overriding royalty interest, production payment,
net profits interest, or similar interest.
`(2) CRUDE OIL AND NATURAL GAS- The terms `crude oil' and `natural gas'
have the meanings given such terms by section 613A(e).
`(3) RECOVERED INACTIVE WELL- The term `recovered inactive well' means a
well if--
`(A) throughout the time period beginning any time prior to January
15, 1999, and ending on such date, such well is inactive or has been
plugged and abandoned, as determined by the agency of the State in which
such well is located that is responsible for regulating such wells,
and
`(B) during the 5-year period beginning on the date of the enactment
of this section, such well resumes producing crude oil or natural
gas.
`(4) INDEPENDENT PRODUCER- The term `independent producer' means a
producer of crude oil or natural gas whose allowance for depletion is
determined under section 613A(c).
`(c) DEDUCTIONS- No deductions directly connected with amounts excluded
from gross income by subsection (a) shall be allowed.
`(1) IN GENERAL- This section shall apply for any taxable year only at
the election of the taxpayer.
`(2) MANNER- Such election shall be made, in accordance with regulations
prescribed by the Secretary, not later than the time prescribed for filing
the return (including extensions thereof) and shall be made annually on a
property-by-property basis.'
(c) MINIMUM TAX- Section 56(g)(4)(B) is amended by adding at the end the
following new clause:
`(iii) INACTIVE WELLS- In the case of income attributable to
independent producers of oil recovered from an inactive well, clause (i)
shall not apply to any amount allowable as an exclusion under section
139.'
(d) CLERICAL AMENDMENT- The table of sections for part III of subchapter B
of chapter 1 is amended by striking the item relating to section 139 and
inserting the following:
`Sec. 139. Oil or gas produced from a recovered inactive well.
`Sec. 140. Cross references to other Acts.'
(e) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years ending after the date of the enactment of this Act.
SEC. 103. ENHANCED OIL RECOVERY CREDIT EXTENDED TO CERTAIN NONTERTIARY
RECOVERY METHODS.
(a) PURPOSE- The purpose of this section is to extend the productive lives
of existing domestic oil and gas wells in order to recover the 75 percent of
the oil and gas that is not recoverable using primary oil and gas recovery
techniques.
(b) IN GENERAL- Clause (i) of section 43(c)(2)(A) (defining qualified
enhanced oil recovery project) is amended to read as follows:
`(i) which involves the application (in accordance with sound
engineering principles) of--
`(I) one or more tertiary recovery methods (as defined in section
193(b)(3)) which can reasonably be expected to result in more than an
insignificant increase in the amount of
crude oil which will ultimately be recovered, or
`(II) one or more qualified nontertiary recovery methods which are
required to recover oil with traditionally immobile characteristics or
from formations which have proven to be uneconomical or noncommercial
under conventional recovery methods,'
(c) QUALIFIED NONTERTIARY RECOVERY METHODS- Section 43(c)(2) is amended by
adding at the end the following new subparagraphs:
`(C) QUALIFIED NONTERTIARY RECOVERY METHOD- For purposes of this
paragraph--
`(i) IN GENERAL- The term `qualified nontertiary recovery method'
means any recovery method described in clause (ii), (iii), or (iv), or
any combination thereof.
`(ii) ENHANCED GRAVITY DRAINAGE (EGD) METHODS- The methods described
in this clause are as follows:
`(I) HORIZONTAL DRILLING- The drilling of horizontal, rather than
vertical, wells to penetrate any hydrocarbon-bearing formation which
has an average in situ calculated permeability to fluid flow of less
than or equal to 12 or less millidarcies and which has been
demonstrated by use of a vertical wellbore to be uneconomical unless
drilled with lateral horizontal lengths in excess of 1,000
feet.
`(II) GRAVITY DRAINAGE- The production of oil by gravity flow from
drainholes that are drilled from a shaft or tunnel dug within or below
the oil-bearing zone.
`(iii) MARGINALLY ECONOMIC RESERVOIR REPRESSURIZATION (MERR)
METHODS- The methods described in this clause are as follows, except
that this clause shall only apply to the first 1,000,000 barrels
produced in any project:
`(I) CYCLIC GAS INJECTION- The increase or maintenance of pressure
by injection of hydrocarbon gas into the reservoir from which it was
originally produced.
`(II) FLOODING- The injection of water into an oil reservoir to
displace oil from the reservoir rock and into the bore of a producing
well.
`(iv) OTHER METHODS- Any method used to recover oil having an
average laboratory measured air permeability less than or equal to 100
millidarcies when averaged over the productive interval being completed,
or an in situ calculated permeability to fluid flow less than or equal
to 12 millidarcies or oil defined by the Department of Energy as being
immobile.
`(D) AUTHORITY TO ADD OTHER NONTERTIARY RECOVERY METHODS- The
Secretary shall provide procedures under which--
`(i) the Secretary may treat methods not described in clause (ii),
(iii), or (iv) of subparagraph (C) as qualified nontertiary recovery
methods, and
`(ii) a taxpayer may request the Secretary to treat any method not
so described as a qualified nontertiary recovery method.
The Secretary may only specify methods as qualified nontertiary
recovery methods under this subparagraph if the Secretary determines that
such specification is consistent with the purposes of subparagraph (C) and
will result in greater production of oil and natural gas.'
(d) CONFORMING AMENDMENT- Clause (iii) of section 43(c)(2)(A) is amended
to read as follows:
`(iii) with respect to which--
`(I) in the case of a tertiary recovery method, the first
injection of liquids, gases, or other matter commences after December
31, 1990, and
`(II) in the case of a qualified nontertiary recovery method, the
implementation of the method begins after December 31,
1998.'
(e) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years ending after December 31, 1998.
TITLE II--DOMESTIC OIL AND GAS INDUSTRY CRISIS TAX RELIEF
SEC. 200. PURPOSE.
The purpose of this title is to transform earned tax credits and other
accumulated tax benefits into working capital for the cash-strapped domestic
oil and gas producers and service companies.
Subtitle A--Credits to Cash Provisions
SEC. 201. 10-YEAR CARRYBACK FOR UNUSED MINIMUM TAX CREDIT.
(a) IN GENERAL- Section 53(c) of the Internal Revenue Code of 1986
(relating to limitation) is amended by adding at the end the following new
paragraph:
`(2) SPECIAL RULE FOR TAXPAYERS WITH UNUSED ENERGY MINIMUM TAX
CREDITS-
`(A) IN GENERAL- If, during the 10-taxable year period ending with the
current taxable year, a taxpayer has an unused energy minimum tax credit
for any taxable year in such period (determined without regard to the
application of this paragraph to the current taxable year)--
`(i) paragraph (1) shall not apply to each of the taxable years in
such period for which the taxpayer has an unused energy minimum tax
credit (as so determined), and
`(ii) the credit allowable under subsection (a) for each of such
taxable years shall be equal to the excess (if any) of--
`(I) the sum of the regular tax liability and the net minimum tax
for such taxable year, over
`(II) the sum of the credits allowable under subparts A, B, D, E,
and F of this part.
`(B) ENERGY MINIMUM TAX CREDIT- For purposes of this paragraph, the
term `energy minimum tax credit' means the minimum tax credit which would
be computed with respect to any taxable year if the adjusted net minimum
tax were computed by only taking into account items attributable
to--
`(i) the taxpayer's mineral interests in oil and gas property,
and
`(ii) the taxpayer's active conduct of a trade or business of
providing tools, products, personnel, and technical solutions on a
contractual basis to persons engaged in oil and gas exploration and
production.'
(b) CONFORMING AMENDMENTS- Section 53(c) of such Code (as in effect before
the amendment made by subsection (a)) is amended--
(1) by striking `The' and inserting:
`(1) IN GENERAL- Except as provided in paragraph (2), the', and
(2) by redesignating paragraphs (1) and (2) as subparagraphs (A) and
(B).
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1998, and to any taxable year
beginning on or before such date to the extent necessary to apply section
53(c)(2) of the Internal Revenue Code of 1986 (as added by subsection (a)).
SEC. 202. 10-YEAR CARRYBACK FOR PERCENTAGE DEPLETION FOR OIL AND GAS
PROPERTY.
(a) IN GENERAL- Subsection (d)(1) of section 613A (relating to limitations
on percentage depletion in case of oil and gas wells) is amended to read as
follows:
`(1) LIMITATION BASED ON TAXABLE INCOME-
`(A) IN GENERAL- The deduction for the taxable year attributable to
the application of subsection (c) shall not exceed the taxpayer's taxable
income for the year computed without regard to--
`(i) any depletion on production from an oil or gas property which
is subject to the provisions of subsection (c),
`(ii) any net operating loss carryback to the taxable year under
section 172,
`(iii) any capital loss carryback to the taxable year under section
1212, and
`(iv) in the case of a trust, any distributions to its beneficiary,
except in the case of any trust where any beneficiary of such trust is a
member of the family (as defined in section 267(c)(4)) of a settlor who
created inter vivos and testamentary trusts for members of the family
and such settlor died within the last six days of the fifth month in
1970, and the law in the jurisdiction in which such trust was created
requires all or a portion of the gross or net proceeds of any royalty or
other interest in oil, gas, or other mineral representing any percentage
depletion allowance to be allocated to the principal of the
trust.
`(B) CARRYBACKS AND CARRYFORWARDS-
`(i) IN GENERAL- If any amount is disallowed as a deduction for the
taxable year (in this subparagraph referred to as the `unused depletion
year') by reason of application of subparagraph (A), the disallowed
amount shall be treated as an amount allowable as a deduction under
subsection (c) for--
`(I) each of the 10 taxable years preceding the unused depletion
year, and
`(II) the taxable year following the unused depletion
year,
subject to the application of subparagraph (A) to such taxable
year.
`(ii) APPLICABLE RULES- Rules similar to the rules of section 39
shall apply for purposes of this subparagraph.
`(C) ALLOCATION OF DISALLOWED AMOUNTS- For purposes of basis
adjustments and determining whether cost depletion exceeds percentage
depletion with respect to the production from a property, any amount
disallowed as a deduction on the application of this paragraph shall be
allocated to the respective properties from which the oil or gas was
produced in proportion to the percentage depletion otherwise allowable to
such properties under subsection (c).'
(b) EFFECTIVE DATE- The amendment made by this section shall apply to
taxable years beginning after December 31, 1998, and to any taxable year
beginning on or before such date to the extent necessary to apply section
613A(d)(1)(B) of the Internal Revenue Code of 1986 (as added by subsection
(a)).
SEC. 203. 10-YEAR NET OPERATING LOSS CARRYBACK FOR LOSSES ATTRIBUTABLE TO
OIL SERVICING COMPANIES AND MINERAL INTERESTS OF OIL AND GAS PRODUCERS.
(a) IN GENERAL- Paragraph (1) of section 172(b) (relating to years to
which loss may be carried) is amended by adding at the end the following new
subparagraph:
`(H) LOSSES ON MINERAL INTERESTS OF OIL AND GAS PRODUCERS AND OILFIELD
SERVICING COMPANIES- In the case of a taxpayer which has an eligible oil
and gas loss (as defined in subsection (j)) for a taxable year, such
eligible oil and gas loss shall be a net operating loss carryback to each
of the 10 taxable years preceding the taxable year of such loss.'
(b) ELIGIBLE OIL AND GAS LOSS- Section 172 is amended by redesignating
subsection (j) as subsection (k) and by inserting after subsection (i) the
following new subsection:
`(j) ELIGIBLE OIL AND GAS LOSS- For purposes of this section--
`(1) IN GENERAL- The term `eligible oil and gas loss' means the lesser
of--
`(A) the amount which would be the net operating loss for the taxable
year if only income and deductions attributable to--
`(i) mineral interests in oil and gas wells, and
`(ii) the active conduct of a trade or business of providing tools,
products, personnel, and technical solutions on a contractual basis to
persons engaged in oil and gas exploration and production,
are taken into account, and
`(B) the amount of the net operating loss for such taxable
year.
`(2) COORDINATION WITH SUBSECTION (b)(2)- For purposes of applying
subsection (b)(2), an eligible oil and gas loss for any taxable year shall
be treated in a manner similar to the manner in which a specified liability
loss is treated.
`(3) ELECTION- Any taxpayer entitled to a 10-year carryback under
subsection (b)(1)(H) from any loss year may elect to have the carryback
period with respect to such loss year determined without regard to
subsection (b)(1)(H). Such election shall be made in such manner as may be
prescribed by the Secretary and shall be made by the due date (including
extensions of time) for filing the taxpayer's return for the taxable year of
the net operating loss. Such election, once made for any taxable year, shall
be irrevocable for such taxable year.'
(c) EFFECTIVE DATE- The amendments made by this section shall apply to net
operating losses for taxable years beginning after December 31, 1998, and to
any taxable year beginning on or before such date to the extent necessary to
apply section 172(b)(1)(H) of the Internal Revenue Code of 1986 (as added by
subsection (a)).
SEC. 204. WAIVER OF LIMITATIONS.
If refund or credit of any overpayment of tax resulting from the
application of the amendments made by this subtitle is prevented at any time
before the close of the 1-year period beginning on the date of the enactment
of this Act by the operation of any law or rule of law (including res
judicata), such refund or credit may nevertheless be made or allowed if claim
therefor is filed before the close of such period.
Subtitle B--Hard Times Tax Relief
SEC. 211. PHASE-OUT OF CERTAIN MINIMUM TAX PREFERENCES RELATING TO ENERGY
PRODUCTION.
(a) ENERGY PREFERENCES FOR INTEGRATED OIL COMPANIES- Section 56 (relating
to alternative minimum taxable income) is amended by adding at the end the
following new subsection:
`(h) ADJUSTMENT BASED ON ENERGY PREFERENCE-
`(1) IN GENERAL- In computing the alternative minimum taxable income of
any taxpayer which is an integrated oil company (as defined in section
291(b)(4)) for any taxable year beginning after 1998, there shall be allowed
as a deduction an amount equal to the alternative tax energy preference
deduction.
`(2) PHASE-OUT OF DEDUCTION AS OIL PRICES INCREASE- The amount of the
deduction under paragraph (1) (determined without regard to this paragraph)
shall be reduced (but not below zero) by the amount which bears the same
ratio to such amount as--
`(A) the amount by which the reference price for the calendar year
preceding the calendar year in which the taxable year begins exceeds $14,
bears to
For purposes of this paragraph, the reference price for any calendar
year shall be determined under section 29(d)(2)(C) and the $14 amount under
subparagraph (A) shall be adjusted at the same time and in the same manner
as under section 43(b)(3).
`(3) ALTERNATIVE TAX ENERGY PREFERENCE DEDUCTION- For purposes of
paragraph (1), the term `alternative tax energy preference deduction' means
an amount equal to the sum of--
`(A) the intangible drilling cost preference, and
`(B) the depletion preference.
`(4) INTANGIBLE DRILLING COST PREFERENCE- For purposes of this
subsection, the term `intangible drilling cost preference' means the amount
by which alternative minimum taxable income would be reduced if it were
computed without regard to section 57(a)(2).
`(5) DEPLETION PREFERENCE- For purposes of this subsection, the term
`depletion preference' means the amount by which alternative minimum taxable
income would be reduced if it were computed without regard to section
57(a)(1).
`(6) ALTERNATIVE MINIMUM TAXABLE INCOME- For purposes of paragraphs (1),
(4), and (5), alternative minimum taxable income shall be determined without
regard to the deduction allowable under this subsection and the alternative
tax net operating loss deduction under subsection (a)(4).
`(7) REGULATIONS- The Secretary may by regulation provide for
appropriate adjustments in computing alternative minimum taxable income or
adjusted current earnings for any taxable year following a taxable year for
which a deduction was allowed under this subsection to ensure that no double
benefit is allowed by reason of such deduction.'
(b) REPEAL OF LIMIT ON REDUCTION FOR INDEPENDENT PRODUCERS- Subparagraph
(E) of section 57(a)(2) (relating to exception for independent producers) is
amended to read as follows:
`(E) EXCEPTION FOR INDEPENDENT PRODUCERS- In the case of any oil or
gas well, this paragraph shall not apply to any taxpayer which is not an
integrated oil company (as defined in section 291(b)(4)).'
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after, and amounts paid or incurred in taxable years
after, December 31, 1998.
SEC. 212. DEPRECIATION ADJUSTMENT NOT TO APPLY TO OIL AND GAS ASSETS.
(a) IN GENERAL- Subparagraph (B) of section 56(a)(1) (relating to
depreciation adjustments) is amended to read as follows:
`(B) EXCEPTIONS- This paragraph shall not apply to--
`(i) property described in paragraph (1), (2), (3), or (4) of
section 168(f), or
`(ii) property used in the active conduct of the trade or business
of exploring for, extracting, developing, or gathering crude oil or
natural gas.'
(b) CONFORMING AMENDMENT- Paragraph (4)(A) of section 56(g) (relating to
adjustments based on adjusted current earnings) is amended by adding at the
end the following new clause:
`(vi) OIL AND GAS PROPERTY- In the case of property used in the
active conduct of the trade or business of exploring for, extracting,
developing, or gathering crude oil or natural gas, the amount allowable
as depreciation or amortization with respect to such property shall be
determined in the same manner as for purposes of computing the regular
tax.'
(c) EFFECTIVE DATE- The amendment made by this section shall apply to
property placed in service in taxable years beginning after December 31,
1998.
SEC. 213. REPEAL CERTAIN ADJUSTMENTS BASED ON ADJUSTED CURRENT EARNINGS
RELATING TO OIL AND GAS ASSETS.
(a) DEPRECIATION- Clause (vi) of section 56(g)(4)(A), as added by section
212(b), is amended to read as follows:
`(vi) OIL AND GAS PROPERTY- This subparagraph shall not apply to
property used in the active conduct of the trade or business of
exploring for, extracting, developing, or gathering crude oil or natural
gas.'
(b) INTANGIBLE DRILLING COSTS- Clause (i) of section 56(g)(4)(D) is
amended by striking the second sentence and inserting `In the case of any oil
or gas well, this clause shall not apply in the case of amounts paid or
incurred in taxable years beginning after December 31, 1998.'.
(c) DEPLETION- Clause (ii) of section 56(g)(4)(F) is amended to read as
follows:
`(ii) EXCEPTION FOR OIL AND GAS WELLS- In the case of any taxable
year beginning after December 31, 1998, clause (i) (and subparagraph
(C)(i)) shall not apply to any deduction for depletion computed in
accordance with section 613A.'
(d) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1998.
SEC. 214. ENHANCED OIL RECOVERY CREDIT AND CREDIT FOR PRODUCING FUEL FROM A
NONCONVENTIONAL SOURCE ALLOWED AGAINST MINIMUM TAX.
(a) ENHANCED OIL RECOVERY CREDIT ALLOWED AGAINST REGULAR AND MINIMUM
TAX-
(1) ALLOWING CREDIT AGAINST MINIMUM TAX- Subsection (c) of section 38
(relating to limitation based on amount of tax), as amended by section
101(d), is amended by redesignating paragraph (4) as paragraph (5) and by
inserting after paragraph (3) the following new paragraph:
`(4) SPECIAL RULES FOR ENHANCED OIL RECOVERY CREDIT-
`(A) IN GENERAL- In the case of the enhanced oil recovery
credit--
`(i) this section and section 39 shall be applied separately with
respect to the credit, and
`(ii) in applying paragraph (1) to the credit--
`(I) subparagraphs (A) and (B) thereof shall not apply,
and
`(II) the limitation under paragraph (1) (as modified by subclause
(I)) shall be reduced by the credit allowed under subsection (a) for
the taxable year (other than the enhanced oil recovery
credit).
`(B) ENHANCED OIL RECOVERY CREDIT- For purposes of this subsection,
the term `enhanced oil recovery credit' means the credit allowable under
subsection (a) by reason of section 43(a).'.
(2) CONFORMING AMENDMENTS-
(A) Subclause (II) of section 38(c)(2)(A)(ii), as amended by section
101(d), is amended by striking `or the marginal oil and gas well
production credit' and inserting `, the marginal oil and gas well
production credit, or the enhanced oil recovery credit'.
(B) Subclause (II) of section 38(c)(3)(A)(ii), as added by section
101(d), is amended by inserting `or the enhanced oil recovery credit'
after `recovery credit'.
(b) CREDIT FOR PRODUCING FUEL FROM A NONCONVENTIONAL SOURCE-
(1) ALLOWING CREDIT AGAINST MINIMUM TAX- Section 29(b)(6) is amended to
read as follows:
`(6) APPLICATION WITH OTHER CREDITS- The credit allowed by subsection
(a) for any taxable year shall not exceed--
`(A) the regular tax for the taxable year and the tax imposed by
section 55, reduced by
`(B) the sum of the credits allowable under subpart A and section
27.'
(2) CONFORMING AMENDMENTS-
(A) Section 53(d)(1)(B)(iii) is amended by inserting `as in effect on
the date of the enactment of the Domestic Oil and Gas Crisis Tax Reliance
Reversal Act of 1999,' after `29(b)(6)(B),'.
(B) Section 55(c)(2) is amended by striking `29(b)(6),'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1998.
Subtitle C--Oil-for-Food Program Compensating Tax Benefits
SEC. 220. PURPOSE.
The purpose of this subtitle is to provide compensation to the domestic
oil and gas industry in the form of tax benefits to offset the depressing
impact that the Oil-for-Food Program is having on the world market.
SEC. 221. INCREASE IN PERCENTAGE DEPLETION FOR STRIPPER WELLS.
(a) IN GENERAL- Subparagraph (C) of section 613A(c)(6) (relating to oil
and natural gas produced from marginal properties) is amended--
(1) by striking `25 percent' and inserting `27.5 percent' in the matter
preceding clause (i); and
(2) by striking `$20' and inserting `$28' in clause (ii).
(b) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1998.
SEC. 222. NET INCOME LIMITATION ON PERCENTAGE DEPLETION REPEALED FOR OIL AND
GAS PROPERTIES.
(a) IN GENERAL- Section 613(a) (relating to percentage depletion) is
amended by striking the second sentence and inserting: `Except in the case of
oil and gas properties, such allowance shall not exceed 50 percent of the
taxpayer's taxable income from the property (computed without allowances for
depletion).'
(b) CONFORMING AMENDMENT- Section 613A(c)(7) (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 December 31, 1998.
SEC. 223. ELECTION TO EXPENSE GEOLOGICAL AND GEOPHYSICAL EXPENDITURES AND
DELAY RENTAL PAYMENTS.
(a) PURPOSE- The purpose of this section is to recognize that geological
and geophysical expenditures and delay rentals are ordinary and necessary
business expenses that should be deducted in the year the expense is
incurred.
(b) ELECTION TO EXPENSE GEOLOGICAL AND GEOPHYSICAL EXPENDITURES-
(1) IN GENERAL- Section 263 (relating to capital expenditures) is
amended by adding at the end the following new subsection:
`(j) GEOLOGICAL AND GEOPHYSICAL EXPENDITURES FOR DOMESTIC OIL AND GAS
WELLS- Notwithstanding subsection (a), a taxpayer may elect to treat
geological and geophysical expenses incurred in connection with the
exploration for, or development of, oil or gas within the United States (as
defined in section 638) as expenses which are not chargeable to capital
account. Any expenses so treated shall be allowed as a deduction in the
taxable year in which paid or incurred.'
(2) CONFORMING AMENDMENT- Section 263A(c)(3) is amended by inserting
`263(j),' after `263(i),'.
(A) IN GENERAL- The amendments made by this subsection shall apply to
expenses paid or incurred after the date of the enactment of this
Act.
(B) TRANSITION RULE- In the case of any expenses described in section
263(j) of the Internal Revenue Code of 1986, as added by this subsection,
which were paid or incurred on or before the date of the enactment of this
Act, the taxpayer may elect, at such time and in such manner as the
Secretary of the Treasury may prescribe, to amortize the unamortized
portion of such expenses over the 36-month period beginning with the month
in which the date of the enactment of this Act occurs. For purposes of
this subparagraph, the unamortized portion of any expense is the amount
remaining unamortized as of the first day of the 36-month period.
(c) ELECTION TO EXPENSE DELAY RENTAL PAYMENTS-
(1) IN GENERAL- Section 263 (relating to capital expenditures), as
amended by subsection (b)(1), is amended by adding at the end the following
new subsection:
`(k) DELAY RENTAL PAYMENTS FOR DOMESTIC OIL AND GAS WELLS-
`(1) IN GENERAL- Notwithstanding subsection (a), a taxpayer may elect to
treat delay rental payments incurred in connection with the development of
oil or gas within the United States (as defined in section 638) as payments
which are not chargeable to capital account. Any payments so treated shall
be allowed as a deduction in the taxable year in which paid or
incurred.
`(2) DELAY RENTAL PAYMENTS- For purposes of paragraph (1), the term
`delay rental payment' means an amount paid for the privilege of deferring
development of an oil or gas well.'
(2) CONFORMING AMENDMENT- Section 263A(c)(3), as amended by subsection
(b)(2), is amended by inserting `263(k),' after `263(j),'.
(A) IN GENERAL- The amendments made by this subsection shall apply to
payments made or incurred after the date of the enactment of this
Act.
(B) TRANSITION RULE- In the case of any payments described in section
263(k) of the Internal Revenue Code of 1986, as added by this subsection,
which were made or incurred on or before the date of the enactment of this
Act, the taxpayer may elect, at such time and in such manner as the
Secretary of the Treasury may prescribe, to amortize the unamortized
portion of such payments over the 36-month period beginning with the month
in which the date of the enactment of this Act occurs. For purposes of
this subparagraph, the unamortized portion of any payment is the amount
remaining unamortized as of the first day of the 36-month period.
SEC. 224. EXTENSION OF SPUDDING RULE.
(a) IN GENERAL- Section 461(i)(2)(A) (relating to special rule for
spudding of oil or gas wells) is amended by striking `90th day' and inserting
`180th day'.
(b) EFFECTIVE DATE- The amendment made by this section shall apply to
taxable years beginning after December 31, 1998.
TITLE III--FOREIGN OIL RELIANCE REVERSAL PROVISIONS
SEC. 300. PURPOSE.
The purpose of this title is to reverse the trend of increased foreign
dependence of oil and gas by encouraging exploration and development of oil
and gas reserves in the United States to achieve the goal of doubling current
domestic oil and gas production.
SEC. 301. CRUDE OIL AND NATURAL GAS EXPLORATION AND DEVELOPMENT CREDIT.
(a) CRUDE OIL AND NATURAL GAS EXPLORATION AND DEVELOPMENT CREDIT- Subpart
B of part IV of subchapter A of chapter 1 is amended by adding at the end the
following new section:
`SEC. 30B. CRUDE OIL AND NATURAL GAS EXPLORATION AND DEVELOPMENT
CREDIT.
`(a) GENERAL RULE- For purposes of section 38, the crude oil and natural
gas exploration and development credit determined under this section for any
applicable taxable year shall be an amount equal to the sum of--
`(1) 20 percent of so much of the taxpayer's qualified investment for
the taxable year as does not exceed $1,000,000, plus
`(2) 10 percent of so much of such qualified investment for the taxable
year as exceeds $1,000,000.
`(b) APPLICABLE TAXABLE YEAR- For purposes of subsection (a)--
`(1) IN GENERAL- The term `applicable taxable year' means any taxable
year during which the imports of foreign crude and oil product are
determined by the Secretary of Energy to exceed 50 percent of the amount of
United States crude and oil product consumption for such year.
`(2) DETERMINATION- A determination under paragraph (1) shall be made
not later than March 1 of each year with respect to the preceding calendar
year.
`(c) QUALIFIED INVESTMENT- For purposes of this section, the term
`qualified investment' means amounts paid or incurred by a taxpayer--
`(1) for the purpose of ascertaining the existence, location, extent, or
quality of any crude oil or natural gas deposit, including core testing and
drilling test wells located in the United States or in a possession of the
United States as defined in section 638, or
`(2) for the purpose of developing a property (located in the United
States or in a possession of the United States as defined in section 638) on
which there is a reservoir capable of commercial production and such amounts
are paid or incurred in connection with activities which are intended to
result in the recovery of crude oil or natural gas on such property.
`(d) LIMITATION BASED ON AMOUNT OF TAX-
`(1) LIABILITY FOR TAX- The credit allowable under subsection (a) for
any taxable year shall not exceed the excess (if any) of--
`(i) the taxpayer's tentative minimum tax liability under section
55(b) for such taxable year determined without regard to this section,
plus
`(ii) the taxpayer's regular tax liability for such taxable year (as
defined in section 26(b)), over
`(B) the sum of the credits allowable against the taxpayer's regular
tax liability under part IV (other than section 43 and this
section).
`(2) APPLICATION OF THE CREDIT- Each of the following amounts shall be
reduced by the full amount of the credit determined under paragraph
(1):
`(A) the taxpayer's tentative minimum tax under section 55(b) for the
taxable year, and
`(B) the taxpayer's regular tax liability (as defined in section
26(b)) reduced by the sum of the credits allowable under part IV (other
than section 43 and this section).
If the amount of the credit determined under paragraph (1) exceeds the
amount described in subparagraph (B) of paragraph (2), then the excess shall
be deemed to be the adjusted net minimum tax for such taxable year for
purposes of section 53.
`(3) Carryback and carryforward of unused credit-
`(A) IN GENERAL- If the amount of the credit allowed under subsection
(a) for any taxable year exceeds the limitation under paragraph (1) for
such taxable year (hereafter in this paragraph referred to as the `unused
credit year'), such excess shall be--
`(i) an oil and gas exploration and development credit carryback to
each of the 3 taxable years preceding the unused credit year,
and
`(ii) an oil and gas exploration and development credit carryforward
to each of the 15 taxable years following the unused credit
year,
and shall be added to the amount allowable as a credit under
subsection (a) for such years, except that no portion of the unused oil
and gas exploration and development credit for any taxable year may be
carried to a taxable year ending before the date of the enactment of this
section.
`(B) LIMITATIONS- The amount of the unused credit which may be taken
into account under subparagraph (A) for any succeeding taxable year shall
not exceed the amount by which the limitation provided by paragraph (1)
for such taxable year exceeds the sum of--
`(i) the credit allowable under subsection (a) for such taxable
year, and
`(ii) the amounts which, by reason of this paragraph, are added to
the amount allowable for such taxable year and which are attributable to
taxable years preceding the unused credit year.
`(e) SPECIAL RULES- For purposes of this section--
`(1) AGGREGATION OF QUALIFIED INVESTMENT EXPENSES-
`(A) CONTROLLED GROUPS; COMMON CONTROL- In determining the amount of
the credit under this section, all members of the same controlled group of
corporations (within the meaning of section 52(a)) and all persons under
common control (within the meaning of section 52(b)) shall be treated as a
single taxpayer for purposes of this section.
`(B) APPORTIONMENT OF CREDIT- The credit (if any) allowable by this
section to members of any group (or to any person) described in
subparagraph (A) shall be such member's or person's proportionate share of
the qualified investment expenses giving rise to the credit determined
under regulations prescribed by the Secretary.
`(2) PARTNERSHIPS, S CORPORATIONS, ESTATES AND TRUSTS-
`(A) PARTNERSHIPS AND S CORPORATIONS- In the case of a partnership,
the credit shall be allocated among partners under regulations prescribed
by the Secretary. A similar rule shall apply in the case of an S
corporation and its shareholders.
`(B) PASS-THRU IN THE CASE OF ESTATES AND TRUSTS- Under regulations
prescribed by the Secretary, rules similar to the rules of subsection (d)
of section 52 shall apply.
`(3) ADJUSTMENTS FOR CERTAIN ACQUISITIONS AND DISPOSITIONS- Under
regulations prescribed by the Secretary, rules similar to the rules
contained in section 41(f)(3) shall apply with respect to the acquisition or
disposition of a taxpayer.
`(4) SHORT TAXABLE YEARS- In the case of any short taxable year,
qualified investment expenses shall be annualized in such circumstances and
under such methods as the Secretary may prescribe by regulation.
`(5) DENIAL OF DOUBLE BENEFIT-
`(A) DISALLOWANCE OF DEDUCTION- Any deduction allowable under this
chapter for any costs taken into account in computing the amount of the
credit determined under subsection (a) shall be reduced by the amount of
such credit attributable to such costs.
`(B) BASIS ADJUSTMENTS- For purposes of this subtitle, if a credit is
determined under this section for any expenditure with respect to any
property, the increase in the basis of such property which would (but for
this subsection) result from such expenditures shall be reduced by the
amount of the credit so allowed.'
(b) CLERICAL AMENDMENT- The table of sections for subpart B of part IV of
subchapter A of chapter 1 is amended by adding at the end thereof the
following new item:
`Sec. 30B. Crude oil and natural gas exploration and development credit.'
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
expenses paid or incurred in taxable years beginning after December 31,
1998.
TITLE IV--NATIONAL SECURITY EMERGENCY PROVISIONS
SEC. 400. PURPOSE.
The purpose of this title is to recognize that a national security threat
exists when foreign crude and oil product imports exceed 60 percent of United
States oil consumption and to create an emergency procedure to address that
threat.
SEC. 401. DUTIES OF THE PRESIDENT.
(a) ESTABLISHMENT OF CEILING- The President shall establish a National
Security Energy Independence Ceiling (referred to in this title as the
`ceiling level') which shall represent a ceiling level beyond which foreign
crude and oil product imports as a share of United States crude and oil
product consumption shall not rise.
(b) LEVEL OF CEILING- The ceiling level established under subsection (a)
shall not exceed 60 percent of United States crude and oil product consumption
for any annual period.
(A) IN GENERAL- The President shall prepare and submit an annual
report to Congress containing a national security projection for energy
independence (in this title referred to as the `projection'), which shall
contain a forecast of domestic oil and NGL demand and production, and
imports of crude and oil product for the subsequent 3 years.
(B) REQUIRED ADJUSTMENTS- The projection shall contain appropriate
adjustments for expected price and production changes.
(2) PRESENTATION- The projection prepared under paragraph (1) shall be
presented to Congress with the Budget.
(3) CERTIFICATION- The President shall certify in the report whether
foreign crude and oil product imports will exceed the ceiling level for any
year during the 3 years succeeding the date of the report.
SEC. 402. CONGRESSIONAL REVIEW.
(a) REVIEW- Congress shall have 10 continuous session days after
submission of each projection under section 401 to review the projection and
make a determination whether the ceiling level will be violated within 3
years.
(b) CERTIFICATION BINDING- Unless disapproved or modified by joint
resolution, the Presidential certification shall be binding 10 session days
after submitted to Congress.
SEC. 403. NATIONAL SECURITY AND OIL PRODUCTION ACTIONS.
(a) NATIONAL SECURITY AND OIL PRODUCTION POLICY-
(1) SUBMISSION- Upon certification under section 401(c)(3) that the
ceiling level will be exceeded, the President is required within 90 days to
submit a National Security and Oil Production Policy (in this section
referred to as the `policy') to Congress. The policy shall prevent crude and
oil product imports from exceeding the National Security Energy Independence
Ceiling.
(2) APPROVAL- Unless disapproved or modified by joint resolution, the
policy shall be effective 90 session days after submitted to Congress.
(b) CONTENTS OF POLICY- The National Security and Oil Production Policy
may include--
(1) energy conservation actions including improved fuel efficiency for
automobiles;
(2) expansion of the Strategic Petroleum Reserves to maintain a larger
cushion against projected oil import blockages;
(3) additional production incentives for domestic oil and gas including
tax and other incentives for stripper well production, offshore, frontier,
and other oil produced with tertiary recovery techniques;
(4) regulatory burden relief; and
(5) other policy initiatives designed to lower foreign import
reliance.
END