To amend the Internal Revenue Code of 1986 to provide that the credit for producing fuel from a nonconventional source shall apply to gas produced onshore from a formation more than 15,000 feet deep.

September 15, 2004

Mr. COLE (for himself, Mr. LUCAS of Oklahoma, Mr. SULLIVAN, Mr. ISTOOK, and Mr. PETERSON of Pennsylvania) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to provide that the credit for producing fuel from a nonconventional source shall apply to gas produced onshore from a formation more than 15,000 feet deep.

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 `Natural Gas Production Act of 2004'.

SEC. 2. CREDIT FOR PRODUCING FUEL FROM NONCONVENTIONAL SOURCE TO APPLY TO GAS PRODUCED ONSHORE FROM FORMATIONS MORE THAN 15,000 FEET DEEP.

(a) IN GENERAL- Subparagraph (B) of section 29(c)(1) of the Internal Revenue Code of 1986 (defining qualified fuels) is amended by striking `or' at the end of clause (i), by striking `and' at the end of clause (ii) and inserting `or', and by inserting after clause (ii) the following new clause:

`(iii) an onshore well from a formation more than 15,000 feet deep, and'.

(b) ELIGIBLE WELLS- Section 29 of such Code is amended by adding at the end the following new subsection:

`(h) ELIGIBLE DEEP GAS WELL WELLS- In the case of a well producing qualified fuel described in subparagraph (B)(iii)--

`(1) for purposes of subsection (f)(1)(A), such well shall be treated as drilled before January 1, 1993, if such well is drilled after the date of the enactment of this subsection, and

`(2) subsection (f)(2) shall not apply.'

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.

END