[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8034 Introduced in House (IH)]

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119th CONGRESS
  2d Session
                                H. R. 8034

To amend the Internal Revenue Code of 1986 to modify certain percentage 
           depletion rules with respect to oil and gas wells.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 20, 2026

    Mr. Mann (for himself, Mr. Estes, Mr. Schmidt, and Mr. Pfluger) 
 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 modify certain percentage 
           depletion rules with respect to oil and gas wells.

    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 ``Protecting America's Small Oil and 
Gas Producers and Rural Jobs Act''.

SEC. 2. MODIFICATION OF CERTAIN PERCENTAGE DEPLETION RULES WITH RESPECT 
              TO OIL AND GAS WELLS.

    (a) Percentage Depletion Rate Calculation Modified With Respect to 
Marginal Properties.--Section 613A(c)(6)(C) of the Internal Revenue 
Code of 1986 is amended to read as follows:
                    ``(C) Applicable percentage.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), the term `applicable 
                        percentage' means the percentage (not greater 
                        than 25 percent) equal to the sum of--
                                    ``(I) 15 percent, plus
                                    ``(II) 1 percentage point for each 
                                whole dollar by which $70 exceeds the 
                                reference price for crude oil for the 
                                calendar year preceding the calendar 
                                year in which the taxable year begins.
                            ``(ii) PPI adjustment.--
                                    ``(I) In general.--In the case of 
                                any taxable year beginning in a 
                                calendar year after 2027, the $70 
                                amount in clause (i)(II) shall be 
                                increased by an amount equal to--
                                            ``(aa) such dollar amount, 
                                        multiplied by
                                            ``(bb) the PPI adjustment 
                                        factor for such calendar year.
                                    ``(II) PPI adjustment factor.--For 
                                purposes of subclause (I), the PPI 
                                adjustment factor for any calendar year 
                                is the percentage (if any) by which--
                                            ``(aa) the PPI for the 
                                        preceding calendar year, 
                                        exceeds
                                            ``(bb) the PPI for calendar 
                                        year 2026.
                                    ``(III) PPI for any calendar 
                                year.--For purposes of subclause (II), 
                                the PPI for any calendar year is the 
                                average of the Producer Price Index for 
                                Drilling Oil and Gas Wells, as 
                                published by the Bureau of Labor 
                                Statistics of the Department of Labor, 
                                as of the close of the 12-month period 
                                ending on August 31 of such calendar 
                                year.
                        For purposes of this paragraph, the term 
                        `reference price' means, with respect to any 
                        calendar year, the reference price determined 
                        for such calendar year under section 
                        45K(d)(2)(C).''.
    (b) Nonapplication of Taxable Income Limitation With Respect to 
Marginal Properties.--Section 613A(c)(6) of such Code is amended by 
adding at the end the following new subparagraph:
                    ``(H) Nonapplication of taxable income 
                limitation.--With respect to so much of the allowance 
                for depletion as is determined under subparagraph (A)--
                            ``(i) subsection (d)(1) shall not apply, 
                        and
                            ``(ii) the second sentence of subsection 
                        (a) of section 613 shall not apply.''.
    (c) Depletable Oil Quantity Calculation Modified.--Section 
613A(c)(3)(B) of such Code is amended by striking ``1,000 barrels'' and 
inserting ``2,000 barrels''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2026.
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