Energy Independence Act of 1996

TABLE OF CONTENTS:

Title I: Tax Incentives for Oil and Gas Production

Subtitle A: Production Credit

Subtitle B: Modifications to Percentage Depletion

Title II: Percentage Depletion Rate for Marginal Production

Title III: Other Provisions

Title IV: 6-Year Period of Limitation for Collection of Oil

and Gas Royalties

Energy Independence Act of 1996 - Title I: Tax Incentives for Oil and Gas Production - Subtitle A: Production Credit - Amends the Internal Revenue Code to allow a business tax credit for producing crude oil and natural gas from new wells and marginal wells.

Provides: (1) a formula for reducing such credit in years in which oil and gas prices increase; and (2) an inflation adjustment for such formula. Allows such credit against the regular and minimum tax.

Subtitle B: Modifications to Percentage Depletion - Repeals the net income limitation on percentage depletion for oil and gas properties.

(Sec. 112) Makes all marginal production of domestic crude oil or domestic natural gas eligible for percentage depletion.

Title II: Percentage Depletion Rate for Marginal Production - Revises the percentage depletion rate for such marginal production.

Title III: Other Provisions - Allows the election to treat geological and geophysical expenses incurred in connection with the exploration for, or development of, domestic oil or gas as expenses which are not chargeable to capital account.

(Sec. 302) Makes the enhanced oil recovery credit applicable to secondary recovery methods. Allows such credit against the minimum tax.

Title IV: 6-Year Period of Limitation for Collection of Oil and Gas Royalties - Establishes a six-year statute of limitations on actions commenced by the United States for recovery of royalties due under an oil and gas lease on Federal lands unless a lessee has made a false or fraudulent statement with the intent to evade the royalties due.