119th Congress (2025-2026)

S 224

Promoting Domestic Energy Production Act

Introduced

Jurisdiction

US Congress

Session

119th Congress (2025-2026)

Official source

Chamber

Senate

Session

119th Congress (2025-2026)

Jurisdiction

US Congress

Bill overview

This bill modifies the Internal Revenue Code to allow certain intangible costs associated with drilling and developing energy resources to be considered when calculating a company’s adjusted financial statement income. Specifically, it adjusts depreciation and depletion deductions taken on financial statements to reflect the costs of intangible drilling and development. The changes will take effect starting in 2026.

Key provisions

Allows intangible drilling and development costs to be deducted.
Adjusts depreciation deductions under section 167.
Adjusts depletion expense deductions under section 263(c).
Modifies the calculation of adjusted financial statement income.
The changes apply to taxable years beginning after December 31, 2025.

Who is affected

Energy companies
Taxpayers
The Internal Revenue Service

Notable changes

Changes the calculation of adjusted financial statement income.
Specifically addresses intangible drilling and development costs.

Positions across the country

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Arguments opposed

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Legislative history

2025-01-23Senate

Read twice and referred to the Committee on Finance.

2025-01-23

Introduced in Senate

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Jan 23, 2025XMLView source

119th CONGRESS — 1st Session

S. 224

IN THE SENATE OF THE UNITED STATES

A BILL

To amend the Internal Revenue Code of 1986 to allow intangible drilling and development costs to be taken into account when computing adjusted financial statement income.

1.Short title

This Act may be cited as the

Promoting Domestic Energy Production Act

2.Intangible drilling and development costs taken into account for purposes of computing adjusted financial statement income

(a)In generalSection 56A(c)(13) of the Internal Revenue Code of 1986 is amended—

(1)

by striking subparagraph (A) and inserting the following:

(A)reduced by—

(i)depreciation deductions allowed under section 167 with respect to property to which section 168 applies to the extent of the amount allowed as deductions in computing taxable income for the year, and

(ii)any deduction allowed for expenses under section 263(c) with respect to property described therein to the extent of the amount allowed as deductions in computing taxable income for the year, and

, and

(2)

by striking subparagraph (B)(i) and inserting the following:

(i)to disregard any amount of—

(I)depreciation expense that is taken into account on the taxpayer's applicable financial statement with respect to such property, and

(II)

depletion expense that is taken into account on the taxpayer’s applicable financial statement with respect to the intangible drilling and development costs of such property, and

(b)Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2025.

S 224

Bill overview

Key provisions

Who is affected

Notable changes

Sponsors

Primary sponsor

Cosponsors

Positions across the country

Arguments in favor

Arguments opposed

Bill text

Positions across the country