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.
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.
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