American Oil and Gas Reporter - September 2022 - 39

many energy tax incentives, it also fundamentally
revises the tax code to create
a technology-neutral approach to incentivize
the deployment of low carbon technologies, "
it states.
According to the firm, HR 5376's
major changes to the tax code include:
· An alternative minimum tax on
corporations;
· An excise tax on stock buy-backs;
· Reinstating the Superfund tax on
petroleum and oil; and
· Increasing funding to the Internal
Revenue Service.
The first provision imposes a 15%
AMT on book income on applicable companies,
which include U.S.-headquartered
corporations with global financial statement
revenue that averages more than $1 billion
over a three-year period, Holland & Knight
details. " To be subject to the tax, foreignheadquartered
groups must also have domestic
financial statement revenue in
excess of $100 million over a three-year
average, " it says. " An applicable corporation
makes a series of adjustments to its
applicable financial statement to arrive at
the income subject to the minimum tax. "
The excise tax on stock buy-backs
imposes a 1% excise tax on the fair
market value of stock repurchased by a
publicly traded corporation after Dec.
31, the law firm says. Exemptions for the
tax include instances in which:
· Repurchased stock is acquired pursuant
to a tax-free reorganization where
the shareholder does not recognize gain
or loss;
· Repurchased stock is contributed
to an employer-sponsored retirement plan;
· The stock is repurchased by a regulated
investment company or real estate
investment trust; or
· The stock is repurchased by a dealer
in securities.
According to Holland & Knight, the
reinstated Superfund tax applies to crude
oil received at a U.S. refinery and petroleum
products that enter the U.S. for
consumption, use or warehousing. The
tax, which will take effect in 2023 and
will not sunset, will increase from historic
levels of 9.7 cents to 16.4 cents a barrel.
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Kansas Representatives Criticize Bill
WICHITA, KS.-Long before Senator
Joe Manchin, D-W.V., announced the
deal with Senate Majority Leader
Charles Schumer, D-N.Y., that led to
the passage of the reconciliation bill,
Manchin was scheduled to offer a video
address to the Kansas Independent Oil
& Gas Association at the group's 2022
annual convention.
The Senate Energy and Natural Resources
Committee Chairman addressed
KIOGA in a recorded presentation less
than 48 hours after Congress passed HR
5376, the Inflation Reduction Act of
2022. Although Manchin told KIOGA
the package constituted an " all-of-theabove "
approach to federal energy policy,
a subsequent video presentation by Senator
Roger Marshall, R-Ks., and the
congressional panel that followed questioned
that characterization.
From a flood of federal dollars for
alternative energy programs, to a tax on
oil and gas wells' methane emissions,
as well as a green light for the Internal
Revenue Service to add more than 80,000
new enforcement agents, members of
the Sunflower State's congressional delegation
who spoke at the event expressed
skepticism about HR 5376.
" The administration and Democrats
seem to be in an 'everything-but' effort
toward oil and gas production, " described
Representative Tracey Mann, R-Ks.
In his comments, Manchin praised
the bill. " As long as we stick to a pathway
that involves innovation, rather than
elimination, oil and natural gas will continue
to be a big part of future energy
solutions, " he assured. " That is what
the Inflation Reduction Act of 2022
does. It will strengthen our energy
Participating in a congressional panel discussion of new federal energy legislation are,
from left, KIOGA President Edward Cross, Representative Ron Estes, R-Ks., Representative
Tracey Mann, R-Ks., and Representative Jake LaTurner, R-Ks. During his remarks, LaTurner
faulted HR 5376, the Inflation Reduction Act of 2022, for pouring taxpayer dollars into
questionable alternative energy initiatives.
SEPTEMBER 2022 39
security and combat rising prices without
walking away from the dependable
energy resources we rely on every day. "
However, Representative Ron Estes,
R-Ks., raised issue not only with the
bill's substance, but even its name. " It
is called the Inflation Reduction Act,
but I don't know of any economics textbook
that says you can increase government
spending and reduce inflation, " he
mused. " Unfortunately, that is the case
with a lot of bills that come out of Washington;
the name attached to it is not
necessarily what really happens. "
Mann argued that a genuine all-ofthe-above
approach would avoid undermining
the economics of U.S. oil and
gas production through tax hikes, regulatory
overkill and provisions that increase
the cost of mineral leases on federal
lands and waters. He warned KIOGA
that Biden had ample time left in his
term to introduce other misguided policies.
" We are only 19 months into the Biden
administration, " he observed. " If it is a
baseball game, we are in the top of the
fourth inning, so we have a way to go. "
Ultimately, assessed Representative
Jake LaTurner, R-Ks., HR 5376 contained
a lot of material to cheer oil and gas opponents.
" What passed is a really bad
bill, " he said. " It is more than $700
billion, with $270 billion or so going
into a slush fund for 'Green New Deal'
projects around the country. Bureaucrats
in Washington will choose winners and
losers and pick companies that will perpetuate
their radical policies. "
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American Oil and Gas Reporter - September 2022

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