text: SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
  
      (a) Short Title.--This Act may be cited as the ``Close Big Oil Tax 
  Loopholes Act''.
      (b) Table of Contents.--The table of contents of this Act is as 
  follows:
  
  Sec. 1. Short title; table of contents.
  Sec. 2. Findings.
  Sec. 3. Sense of Senate on high gas prices.
                    TITLE I--CLOSE BIG OIL TAX LOOPHOLES
  
  Sec. 101. Modifications of foreign tax credit rules applicable to major 
                              integrated oil companies which are dual 
                              capacity taxpayers.
  Sec. 102. Limitation on section 199 deduction attributable to oil, 
                              natural gas, or primary products thereof.
  Sec. 103. Limitation on deduction for intangible drilling and 
                              development costs.
  Sec. 104. Limitation on percentage depletion allowance for oil and gas 
                              wells.
  Sec. 105. Limitation on deduction for tertiary injectants.
           TITLE II--OUTER CONTINENTAL SHELF OIL AND NATURAL GAS
  
  Sec. 201. Repeal of outer Continental Shelf deep water and deep gas 
                              royalty relief.
                          TITLE III--MISCELLANEOUS
  
  Sec. 301. Deficit reduction.
  Sec. 302. Budgetary effects.
  
  SEC. 2. FINDINGS.
  
      Congress finds that--
              (1) gas prices have risen significantly largely in response 
          to unrest in north Africa and the Middle East, unrest that 
          speculators are capitalizing on to increase oil futures prices 
          and make huge profits;
              (2) high gas prices are hurting the quality of life of 
          people of the United States, cutting into savings, and 
          jeopardizing jobs and the economic recovery of the United 
          States;
              (3) implementation of the regulatory reforms enacted by 
          Congress in the Dodd-Frank Wall Street Reform and Consumer 
          Protection Act (Public Law 111-203; 124 Stat. 1376) to prevent 
          energy market manipulation and control excessive speculation 
          has been delayed and has been threatened with funding 
          reductions in the House of Representatives;
              (4) the United States is producing more oil than any time 
          in the last 13 years and companies hold abundant inventories of 
          oil, but the United States is still importing more than 
          11,000,000 barrels of oil per day and the Energy Information 
          Administration projects that full production in all onshore and 
          offshore areas would reduce gas prices by only 3 cents per 
          gallon by 2030;
              (5) domestic refining capacity now exceeds United States 
          demand for refined petroleum products, resulting in increased 
          idle refinery capacity;
              (6) oil companies are sitting idly on approximately 
          60,000,000 acres of leased Federal lands and waters containing 
          more than 11,000,000,000 barrels of oil and 59,000,000,000,000 
          cubic feet of natural gas;
              (7) the United States possesses less than 2 percent of the 
          proven oil reserves of the world, yet consumes an unsustainable 
          25 percent of the oil production of the world;
              (8) the economy of the United States suffers huge net 
          losses in jobs and productivity from the growing annual trade 
          deficit in energy, due mainly to the outflow of 
          $250,000,000,000 or more to pay for foreign oil;
              (9) world oil prices have risen steadily since the slow 
          beginning of the global economic recovery and, absent major 
          efficiency or conservation improvements or deployment of 
          alternative fuels, those oil prices are projected to remain 
          well above $100 per barrel or higher as world demand grows as 
          China, India and other countries industrialize;
              (10) the oil production policies of cartel of the 
          Organization of the Petroleum Exporting Countries (OPEC) are a 
          large determinant of the world price of oil, so the economy of 
          the United States will be affected by decisions of OPEC as long 
          as the United States depends on oil for a significant portion 
          of the energy consumption of the United States;
              (11) the major oil companies have accumulated more than 
          $1,000,000,000,000 in net profits over the last 10 years and 
          collected more than $40,000,000,000 in tax breaks during the 
          same period, but have invested negligible amounts of those 
          funds into research and development of the production of clean 
          and renewable fuels made in the United States, leaving 
          consumers with few if any choices at the pump; and
              (12) in the Energy Independence and Security Act of 2007 
          (42 U.S.C. 17001 et seq.), Congress increased fuel economy 
          standards for the first time in 30 years and established 
          ambitious requirements for domestic biofuels, actions that have 
          reduced oil consumption and reduced upward pressure on gas 
          prices.
  
  SEC. 3. SENSE OF SENATE ON HIGH GAS PRICES.
  
      It is the sense of the Senate that--
              (1) the President and Administration should be commended 
          for recognizing the severity of high gas prices and for taking 
          appropriate actions to help reduce gas prices, including 
          actions--
                      (A) to move forward with expeditious and 
                  responsible domestic production in the Gulf of Mexico 
                  and elsewhere;
                      (B) to form a Task Force led by the Department of 
                  Justice to investigate and eliminate oil and gas price 
                  gouging and market manipulation;
                      (C) to establish a national oil savings goal to cut 
                  imports by 33 percent by 2025;
                      (D) to call for 1,000,000 electric vehicles to be 
                  on the road by 2015;
                      (E) to harmonize corporate average fuel standards 
                  under section 32902 of title 49, United States Code, 
                  (CAFE) and carbon pollution standards to achieve 
                  1,800,000,000 barrels in oil savings from new vehicles 
                  built before 2017, and working with stakeholders to 
                  increase those savings from future year vehicles;
                      (F) to establish the National Clean Fleets 
                  Partnership and Green Fleet Initiative to reduce diesel 
                  and gasoline use in fleets by incorporating electric 
                  vehicles, alternative fuels like natural gas, and 
                  efficiency measures; and
                      (G) to clarify and expand the use of E-15 fuel for 
                  new motor vehicles;
              (2) Congress should take additional actions to complement 
          the efforts of the President, including enacting provisions--
                      (A) to encourage diligent and responsible 
                  development of domestic oil and gas resources onshore 
                  and off-shore;
                      (B) to eliminate subsidies for major oil and gas 
                  companies and use the savings to promote research, 
                  development, and deployment of affordable alternative 
                  fuels and vehicles;
                      (C) to give consumers more choices at the pump and 
                  incentives for buying vehicles that displace petroleum 
                  consumption; and
                      (D) to direct and fund the Commodity Futures 
                  Trading Commission and the Federal Trade Commission to 
                  rapidly implement the energy consumer protection 
                  requirements of the Dodd-Frank Wall Street Reform and 
                  Consumer Protection Act (Public Law 111-203; 124 Stat. 
                  1376);
              (3) the Organization of the Petroleum Exporting Countries 
          (OPEC) should contribute to the stabilization of world oil 
          markets and prices and reduce the burden of high gasoline 
          prices borne by the consumers in the United States by using 
          existing idle oil production capacity to compensate for any 
          supply shortages experienced in member countries; and
              (4) the economic, environmental, and national security of 
          the United States depend on a sustained effort to drastically 
          reduce and eventually eliminate the dependency of the United 
          States on oil.
  
                    TITLE I--CLOSE BIG OIL TAX LOOPHOLES
  
  SEC. 101. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO MAJOR 
                INTEGRATED OIL COMPANIES WHICH ARE DUAL CAPACITY 
                TAXPAYERS.
  
      (a) 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:
      ``(n) Special Rules Relating to Major Integrated Oil Companies 
  Which Are Dual Capacity Taxpayers.--
              ``(1) General rule.--Notwithstanding any other provision of 
          this chapter, any amount paid or accrued by a dual capacity 
          taxpayer which is a major integrated oil company (as defined in 
          section 167(h)(5)(B)) to a foreign country or possession of the 
          United States for any period shall not be considered a tax--
                      ``(A) if, for such period, the foreign country or 
                  possession does not impose a generally applicable 
                  income tax, or
                      ``(B) to the extent such amount exceeds the amount 
                  (determined in accordance with regulations) which--
                              ``(i) is paid by such dual capacity 
                          taxpayer pursuant to the generally applicable 
                          income tax imposed by the country or 
                          possession, or
                              ``(ii) would be paid if the generally 
                          applicable income tax imposed by the country or 
                          possession were applicable to such dual 
                          capacity taxpayer.
          Nothing in this paragraph shall be construed to imply the 
          proper treatment of any such amount not in excess of the amount 
          determined under subparagraph (B).
              ``(2) 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--
                      ``(A) is subject to a levy of such country or 
                  possession, and
                      ``(B) receives (or will receive) directly or 
                  indirectly a specific economic benefit (as determined 
                  in accordance with regulations) from such country or 
                  possession.
              ``(3) Generally applicable income tax.--For purposes of 
          this subsection--
                      ``(A) In general.--The term `generally applicable 
                  income tax' means an income tax (or a series of income 
                  taxes) which is generally imposed under the laws of a 
                  foreign country or possession on income derived from 
                  the conduct of a trade or business within such country 
                  or possession.
                      ``(B) Exceptions.--Such term shall not include a 
                  tax unless it has substantial application, by its terms 
                  and in practice, to--
                              ``(i) persons who are not dual capacity 
                          taxpayers, and
                              ``(ii) persons who are citizens or 
                          residents of the foreign country or 
                          possession.''.
      (b) Effective Date.--
              (1) In general.--The amendments made by this section shall 
          apply to taxes paid or accrued in taxable years beginning after 
          the date of the enactment of this Act.
              (2) 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.
  
  SEC. 102. LIMITATION ON SECTION 199 DEDUCTION ATTRIBUTABLE TO OIL, 
                NATURAL GAS, OR PRIMARY PRODUCTS THEREOF.
  
      (a) Denial of Deduction.--Paragraph (4) of section 199(c) of the 
  Internal Revenue Code of 1986 is amended by adding at the end the 
  following new subparagraph:
                      ``(E) Special rule for certain oil and gas 
                  income.--In the case of any taxpayer who is a major 
                  integrated oil company (as defined in section 
                  167(h)(5)(B)) for the taxable year, the term `domestic 
                  production gross receipts' shall not include gross 
                  receipts from the production, transportation, or 
                  distribution of oil, natural gas, or any primary 
                  product (within the meaning of subsection (d)(9)) 
                  thereof.''.
      (b) Effective Date.--The amendment made by this section shall apply 
  to taxable years beginning after December 31, 2011.
  
  SEC. 103. LIMITATION ON DEDUCTION FOR INTANGIBLE DRILLING AND 
                DEVELOPMENT COSTS.
  
      (a) In General.--Section 263(c) 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 in 
  any taxable year in which such taxpayer is a major integrated oil 
  company (as defined in section 167(h)(5)(B)).''.
      (b) Effective Date.--The amendment made by this section shall apply 
  to amounts paid or incurred in taxable years beginning after December 
  31, 2011.
  
  SEC. 104. LIMITATION ON PERCENTAGE DEPLETION ALLOWANCE FOR OIL AND GAS 
                WELLS.
  
      (a) In General.--Section 613A of the Internal Revenue Code of 1986 
  is amended by adding at the end the following new subsection:
      ``(f) Application With Respect to Major Integrated Oil Companies.--
  In the case of any taxable year in which the taxpayer is a major 
  integrated oil company (as defined in section 167(h)(5)(B)), the 
  allowance for percentage depletion shall be zero.''.
      (b) Effective Date.--The amendment made by this section shall apply 
  to taxable years beginning after December 31, 2011.
  
  SEC. 105. LIMITATION ON DEDUCTION FOR TERTIARY INJECTANTS.
  
      (a) In General.--Section 193 of the Internal Revenue Code of 1986 
  is amended by adding at the end the following new subsection:
      ``(d) Application With Respect to Major Integrated Oil Companies.--
  This section shall not apply to amounts paid or incurred by a taxpayer 
  in any taxable year in which such taxpayer is a major integrated oil 
  company (as defined in section 167(h)(5)(B)).''.
      (b) Effective Date.--The amendment made by this section shall apply 
  to amounts paid or incurred in taxable years beginning after December 
  31, 2011.
  
           TITLE II--OUTER CONTINENTAL SHELF OIL AND NATURAL GAS
  
  SEC. 201. REPEAL OF OUTER CONTINENTAL SHELF DEEP WATER AND DEEP GAS 
                ROYALTY RELIEF.
  
      (a) In General.--Sections 344 and 345 of the Energy Policy Act of 
  2005 (42 U.S.C. 15904, 15905) are repealed.
      (b) Administration.--The Secretary of the Interior shall not be 
  required to provide for royalty relief in the lease sale terms 
  beginning with the first lease sale held on or after the date of 
  enactment of this Act for which a final notice of sale has not been 
  published.
  
                          TITLE III--MISCELLANEOUS
  
  SEC. 301. DEFICIT REDUCTION.
  
      The net amount of any savings realized as a result of the enactment 
  of this Act and the amendments made by this Act (after any expenditures 
  authorized by this Act and the amendments made by this Act) shall be 
  deposited in the Treasury and used for Federal budget deficit reduction 
  or, if there is no Federal budget deficit, for reducing the Federal 
  debt in such manner as the Secretary of the Treasury considers 
  appropriate.
  
  SEC. 302. BUDGETARY EFFECTS.
  
      The budgetary effects of this Act, for the purpose of complying 
  with the Statutory Pay-As-You-Go-Act of 2010, shall be determined by 
  reference to the latest statement titled ``Budgetary Effects of PAYGO 
  Legislation'' for this Act, submitted for printing in the Congressional 
  Record by the Chairman of the Senate Budget Committee, provided that 
  such statement has been submitted prior to the vote on passage.
target: Close Big Oil Tax Loopholes Act - Expresses the sense of the Senate that: (1) the President and Administration should be commended for recognizing the severity of high gas prices and for taking appropriate actions to help reduce gas prices; (2) Congress should take additional actions to complement the efforts of the President; (3) the Organization of Petroleum Exporting Countries (OPEC) should contribute to the stabilization of world oil markets and prices and reduce the burden of high gasoline prices by using existing idle oil production capacity to compensate for any supply shortages; and (4) U.S. economic, environmental, and national security depend on a sustained effort to reduce and eventually eliminate the dependence of the United States on oil.
  
  Amends the Internal Revenue Code to deny to oil companies with gross receipts in excess of $1 billion in a taxable year and an average daily worldwide production of crude oil of at least 500,000 barrels a year: (1) a foreign tax credit if such company is a dual capacity taxpayer, as defined by this Act; (2) the tax deduction for income attributable to domestic production of oil, natural gas, or primary products thereof; (3) the tax deduction for intangible drilling and development costs; (4) the percentage depletion allowance for oil and gas wells; and (5) the tax deduction for qualified tertiary injectant expenses.
  
  Amends the Energy Policy Act of 2005 to repeal the authority of the Secretary of the Interior to grant royalty relief (suspension of royalties) for natural gas production from deep wells and deep water oil and gas production in the Outer Continental Shelf.
  
  Dedicates any increased revenue generated by this Act to the reduction of a federal budget deficit or the public debt.
  
  Provides for compliance of the budgetary effects of this Act with the Statutory Pay-As-You-Go Act of 2010.
feat_title: A bill to reduce the Federal budget deficit by closing big oil tax loopholes, and for other purposes.