Refinery Expansion Act of 2005 - Amends the Internal Revenue Code to: (1) revise the tax deduction for certain liquid fuels refinery property to allow expensing of the entire cost of such property if the property allows for a production capacity increase of five percent or more on an average daily basis; (2) allow, in lieu of such expensing deduction, a five-year recovery period for the depreciation of such refinery property; (3) allow a seven-year recovery period for the depreciation of certain oil and gas distribution lines; and (4) allow a five-year recovery period for the depreciation of certain petroleum storage facilities.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3924 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 3924
To amend the Internal Revenue Code of 1986 to provide tax incentives
for oil refineries, oil and gas pipelines, and petroleum storage
facilities.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 27, 2005
Mr. Tiahrt 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 provide tax incentives
for oil refineries, oil and gas pipelines, and petroleum storage
facilities.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Refinery Expansion Act of 2005''.
SEC. 2. 100 PERCENT EXPENSING OR 5-YEAR DEPRECIATION OF COSTS OF
REFINERY PROPERTY WHICH INCREASE REFINERY OUTPUT BY AT
LEAST 5 PERCENT.
(a) Expensing.--Subsection (a) of section 179C of the Internal
Revenue Code of 1986 (relating to election to expense certain
refineries) is amended to read as follows:
``(a) Treatment as Expenses.--
``(1) In general.--Except in the case of refinery property
to which subsection (e) applies, a taxpayer may elect to treat
50 percent of the cost of qualified refinery property as an
expense which is not chargeable to capital account. Any cost so
treated shall be allowed as a deduction for the taxable year in
which the qualified refinery property is placed in service.
``(2) Property to which subsection (e) applies.--In the
case of refinery property to which subsection (e) applies, a
taxpayer may elect to treat 100 percent of the cost of such
property as an expense which is not chargeable to capital
account. Any cost so treated shall be allowed as a deduction
for the taxable year in which such cost is paid or incurred by
the taxpayer.''.
(b) 5-Year Depreciation.--Subparagraph (B) of section 168(e)(3) of
such Code (relating to classification of property) is amended by
striking ``and'' at the end of clause (v), by striking the period at
the end clause (vi) and inserting ``, and'', and by inserting after
clause (vi) the following new clause:
``(vii) refinery property the cost of which
would have been eligible for expensing under
section 179C(a)(2) but for the absence of an
election under section 179C.''.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in the amendments made by section 1323 of the
Energy Policy Act of 2005.
SEC. 3. DEPRECIATION RECOVERY PERIOD FOR OIL AND GAS PIPELINES REDUCED
TO 7 YEARS.
(a) In General.--Subparagraph (C) of section 168(e)(3) of the
Internal Revenue Code of 1986 (relating to classification of property)
is amended by striking ``and'' at the end of clause (iv), by
redesignating clause (v) as clause (vi), and by inserting after clause
(iv) the following new clause:
``(v) any oil or natural gas distribution
line the original use of which commences with
the taxpayer after April 11, 2005, and which is
placed in service before January 1, 2011,
and''.
(b) Conforming Amendments.--
(1) Subparagraph (E) of section 168(e)(3) of such Code is
amended by adding ``and'' at the end of clause (vi), by
striking ``, and'' at the end of clause (vii) and inserting a
period, and by striking clause (viii).
(2) The table contained in section 168(g)(3)(B) of such
Code (relating to special rule for certain property assigned to
classes) is amended--
(A) by striking the item relating to subparagraph
(E)(viii), and
(B) by inserting after the item relating to
subparagraph (C)(vii) the following new item:
``(C)(v).................................................... 35''.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in section 1325 of the Energy Policy Act of 2005.
SEC. 4. 5-YEAR DEPRECIATION RECOVERY PERIOD FOR PETROLEUM STORAGE
FACILITIES.
(a) In General.--Subparagraph (B) of section 168(e)(3) of the
Internal Revenue Code of 1986 (relating to classification of property),
as amended by section 2, is amended by striking ``and'' at the end of
clause (vi), by striking the period at the end clause (vii) and
inserting ``, and'', and by inserting after clause (vii) the following
new clause:
``(viii) a storage facility (not including
a building and its structural components) used
in connection with the distribution of
petroleum or any primary product of petroleum
if--
``(I) the original use of such
facility commences with the taxpayer
after the date of the enactment of this
clause, and
``(II) such facility is placed in
service before January 1, 2011.''.
(b) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to property placed in service after the date of the
enactment of this Act.
(2) Exception.--The amendments made by this section shall
not apply to any property with respect to which the taxpayer or
a related party has entered into a binding contract for the
construction thereof on or before such date, or, in the case of
self-constructed property, has started construction on or
before such date.
SEC. 5. TEMPORARY SUSPENSION OF DEPRECIATION RECAPTURE ON SECTION 1245
REFINERY PROPERTY.
(a) In General.--Subsection (b) of section 1245 of the Internal
Revenue Code of 1986 (relating to exceptions and limitations) is
amended by adding at the end the following new paragraph:
``(9) Refinery property being upgraded.--Subsection (a)
shall not apply to property--
``(A) which, before the date of the enactment of
this paragraph, was used by the taxpayer in the
processing liquid fuel from crude oil or qualified
fuels (as defined in section 45K(c)) at a refinery
located in the United States,
``(B) which is disposed of before January 1, 2012,
and
``(C) which is replaced by the taxpayer with
upgraded equipment which increases the refinery's
overall output, decreases the refinery's pollution
output, or results in cleaner-burning fuel.''.
(b) Effective Date.--The amendment made by this section shall apply
to dispositions after the date of the enactment of this Act in taxable
years ending after such date.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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