Summary: H.R.706 — 102nd Congress (1991-1992)All Information (Except Text)

There is one summary for H.R.706. Bill summaries are authored by CRS.

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Introduced in House (01/29/1991)

National Energy Strategy Act of 1991 - Expresses the sense of the Congress that the President, as an economic and national security imperative, should: (1) formulate and implement a national energy policy based on achieving a domestic core supply of energy; and (2) work with the Congress in implementing such policy.

Amends the Internal Revenue Code to impose an excise tax on the first sale within the United States of imports of: (1) crude oil; (2) refined petroleum products; and (3) petrochemical feedstocks or petrochemical derivatives.

Sets the rate of the tax as the difference between $22 per barrel ($24.50 for petroleum and petrochemical products) and the most recently published average price of a barrel of internationally traded oil, as determined by the Secretary of the Treasury in accordance with a specified formula.

Treats certain geological and geophysical costs and surface casing costs as intangible drilling and development costs that a taxpayer may elect to capitalize or to deduct for income tax purposes.

Exempts oil and gas wells from the application of the net income limitation on percentage depletion.

Revises the percentage depletion allowance applicable to oil and gas wells, retaining a 15 percent minimum, but increasing the percentage incrementally (to a maximum of 30 percent) as the average annual removal price falls below $20.

Repeals provisions that tax as ordinary income any gains from dispositions of oil, gas, or geothermal wells.

Establishes a marginal production income tax credit for producers who maintain economically unproductive oil wells. Applies the credit to domestic crude that is: (1) from stripper well property; (2) heavy oil; or (3) oil recovered through a tertiary recovery method. Fixes the credit at ten percent of the qualified cost (determined in accordance with a formula set forth in this Act) of each barrel produced by the producer during the tax year.

Establishes a crude oil and natural gas exploration and development tax credit. Allows a ten percent credit for qualified investments exceeding $1,000,000, 20 percent for those of $1,000,000 or less. Permits the credit as an offset against both minimum tax liability and regular liability.

Repeals provisions that identify intangible drilling costs as a tax preference item for purposes of determining alternative minimum tax liability and corporate preference reductions.

Allows 50 percent of the marginal production depletion preference (currently the alternative tax energy preference deduction) as a deduction in computing the alternative minimum tax.

Increases from 65 to 100 percent the taxable income limitation on the percentage depletion deduction for oil and gas property.

Permits a taxpayer to elect to carry forward to the next succeeding taxable year any portion of excess depletion allowances.

Permits an income tax credit for investments in qualified clean-burning (natural gas, liquefied petroleum gas, or alcohol) motor vehicle fuel property. Permits a 20 percent credit from 1992 through 2001, phasing out the credit in five percent increments annually thereafter to reach zero percent at the end of 2004. Applies the credit to depreciable property that is: (1) equipment designed either to modify a motor vehicle so that it will be propelled only be a clean-burning fuel or to assist in delivering such fuel into such vehicles; or (2) a motor vehicle propelled by clean-burning fuel.

Authorizes the Secretary of the Treasury to make credit-equivalent payments to States and to local governments in connection with qualified property.