REPEAL OF MINIMUM TAX PREFERENCES FOR DEPLETION AND INTANGIBLE DRILLING COSTS OF INDEPENDENT OIL AND GAS PRODUCERS AND ROYALTY OWNERS.

SEC. 1915. REPEAL OF MINIMUM TAX PREFERENCES FOR DEPLETION AND INTANGIBLE DRILLING COSTS OF INDEPENDENT OIL AND GAS PRODUCERS AND ROYALTY OWNERS. (a) Depletion.— (1) Paragraph (1) of section 57(a) (relating to depletion) is amended by adding at the end thereof the following new sentence: “Effective with respect to taxable years beginning after December 31, 1992, this paragraph shall not apply to any deduction for depletion computed in accordance with section 613A(c).”. (2) Subparagraph (F) of section 56(g)(4) is amended to read as follows: “(F) Depletion.— “(i) In general.— The allowance for depletion with respect to any property placed in service m a taxable year beginning after December 31, 1989, shall be cost depletion determined under section 611. 106 STAT. 3024 “(ii) Exception for independent oil and gas producers and royalty owners.— In the case of any taxable year beginning after December 31, 1992, clause (i) (and subparagraph (C)(i)) shall not apply to any deduction for depletion computed in accordance with section 613A(c).” (b) Intangible Drilling Costs.— (1) Section 57(a)(2) is amended by adding at the end the following new subparagraph: “(E) Exception for independent producers.— In the case of any oil or gas well— “(i) In general.— In the case of any taxable year beginning after December 31, 1992, this paragraph shall not apply to any taxpayer which is not an integrated oil company (as defined in section 291(b)(4)). “(ii) Limitation on benefit.— The reduction in alternative minimum taxable income by reason of clause (i) for any taxable year shall not exceed 40 percent (30 percent in case of taxable years beginning m 1993) of the alternative minimum taxable income for such year determined without regard to clause (i) and the alternative tax net operating loss deduction under section 56(a)(4).” (2) Clause (i) of section 56(g)(4)(D) is amended by adding at the end thereof the following new sentence: “In the case of a taxpayer other than an integrated oil company (as defined in section 291(b)(4)), in the case of any oil or gas well, this clause shall not apply in the case of amounts paid or incurred in taxable years beginning after December 31, 1992.”. (c) Conforming Amendments.— (1) Section 56 is amended by striking subsection (h). (2) Section 56(d)(1)(A) is amended to read as follows: “(A) the amount of such deduction shall not exceed 90 percent of alternate minimum taxable income determined without regard to such deduction, and”. (3) Section 59(a)(2)(A)(ii) is amended by striking “and the alternative tax energy preference deduction under section 56(h)” and inserting “and section 57(a)(2)(E)”. (4) Section 59A(b)(1) is amended by striking “or the alternative tax energy preference deduction under section 56(h)”. (d) Effective Date.— The amendments made by this section shall apply to taxable years beginning after December 31, 1992.