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Full Text of this Amendment
and to amend the Internal Revenue Code of 1986 to provide tax incentives for the production of renewable energy and energy conservation; which was ordered to lie on the table; as follows:
At the end, add the following:
Subtitle C--Revenue Provisions
SEC. 831. LIMITATION OF DEDUCTION FOR INCOME ATTRIBUTABLE TO DOMESTIC PRODUCTION OF OIL, GAS, OR PRIMARY PRODUCTS THEREOF.
(a) Denial of Deduction for Major Integrated Oil Companies for Income Attributable to Domestic Production of Oil, Gas, or Primary Products Thereof.--
(1) IN GENERAL.--Subparagraph (B) of section 199(c)(4) (relating to exceptions) is amended by striking ``or'' at the end of clause (ii), by striking the period at the end of clause (iii) and inserting ``, or'', and by inserting after clause (iii) the following new clause:
``(iv) in the case of any major integrated oil company (as defined in section 167(h)(5)(B)), the production, refining, processing, transportation, or distribution of oil, gas, or any primary product thereof during any taxable year described in section 167(h)(5)(B).''.
(2) PRIMARY PRODUCT.--Section 199(c)(4)(B) is amended by adding at the end the following flush sentence:
``For purposes of clause (iv), the term `primary product' has the same meaning as when used in section 927(a)(2)(C), as in effect before its repeal.''.
(b) Limitation on Oil Related Qualified Production Activities Income for Taxpayers Other Than Major Integrated Oil Companies.--
(1) IN GENERAL.--Section 199(d) is amended by redesignating paragraph (9) as paragraph (10) and by inserting after paragraph (8) the following new paragraph:
``(9) SPECIAL RULE FOR TAXPAYERS WITH OIL RELATED QUALIFIED PRODUCTION ACTIVITIES INCOME.--
``(A) IN GENERAL.--If a taxpayer (other than a major integrated oil company (as defined in section 167(h)(5)(B))) has oil related qualified production activities income for any taxable year beginning after 2009, the amount of the deduction under subsection (a) shall be reduced by 3 percent of the least of--
``(i) the oil related qualified production activities income of the taxpayer for the taxable year,
``(ii) the qualified production activities income of the taxpayer for the taxable year, or
``(iii) taxable income (determined without regard to this section).
``(B) OIL RELATED QUALIFIED PRODUCTION ACTIVITIES INCOME.--The term `oil related qualified production activities income' means for any taxable year the qualified production activities income which is attributable to the production, refining, processing, transportation, or distribution of oil, gas, or any primary product thereof during such taxable year.''.
(2) CONFORMING AMENDMENT.--Section 199(d)(2) (relating to application to individuals) is amended by striking ``subsection (a)(1)(B)'' and inserting ``subsections (a)(1)(B) and (d)(9)(A)(iii)''.
(c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2008.
SEC. 832. CLARIFICATION OF DETERMINATION OF FOREIGN OIL AND GAS EXTRACTION INCOME.
(a) In General.--Paragraph (1) of section 907(c) of this amended by redesignating subparagraph (B) as subparagraph (C), by striking ``or'' at the end of subparagraph (A), and by inserting after subparagraph (A) the following new subparagraph:
``(B) so much of any transportation of such minerals as occurs before the fair market value event, or''.
(b) Fair Market Value Event.--Subsection (c) of section 907 is amended by adding at the end the following new paragraph:
``(6) FAIR MARKET VALUE EVENT.--For purposes of this section, the term `fair market value event' means, with respect to any mineral, the first point in time at which such mineral--
``(A) has a fair market value which can be determined on the basis of a transfer, which is an arm's length transaction, of such mineral from the taxpayer to a person who is not related (within the meaning of section 482) to such taxpayer, or
``(B) is at a location at which the fair market value is readily ascertainable by reason of transactions among unrelated third parties with respect to the same mineral (taking into account source, location, quality, and chemical composition).''.
(c) Special Rule for Certain Petroleum Taxes.--Subsection (c) of section 907, as amended by subsection (b), is amended to by adding at the end the following new paragraph:
``(7) OIL AND GAS TAXES.--In the case of any tax imposed by a foreign country which is limited in its application to taxpayers engaged in oil or gas activities--
``(A) the term `oil and gas extraction taxes' shall include such tax,
``(B) the term `foreign oil and gas extraction income' shall include any taxable income which is taken into account in determining such tax (or is directly attributable to the activity to which such tax relates), and
``(C) the term `foreign oil related income' shall not include any taxable income which is treated as foreign oil and gas extraction income under subparagraph (B).''.
(d) Conforming Amendments.--
(1) Subparagraph (C) of section 907(c)(1), as redesignated by this section, is amended by inserting ``or used by the taxpayer in the activity described in subparagraph (B)'' before the period at the end.
(2) Subparagraph (B) of section 907(c)(2) is amended to read as follows:
``(B) so much of the transportation of such minerals or primary products as is not taken into account under paragraph (1)(B),''.
(e) Effective Date.--The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
(As printed in the Congressional Record for the Senate on Apr 8, 2008.)