H.R. 8034

[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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