# Surface Transportation Investment Act of 2021

This bill takes money from major oil companies through tax changes and uses that money to fund transportation projects across the country. Here's what it actually does.

The core idea is straightforward: the bill closes several tax breaks that large, integrated oil companies currently use to reduce their tax bills. These companies—the major players like ExxonMobil, Chevron, and similar firms—have long enjoyed special tax deductions that smaller businesses and other industries don't get. The bill eliminates four main tax advantages. First, it restricts how much these companies can deduct for foreign taxes paid to countries where they operate, particularly when those countries don't have standard income taxes but instead charge oil companies special fees. Second, it prevents them from immediately deducting the costs of drilling and developing oil wells; instead, they'd have to spread those deductions over five years. Third, it eliminates the "percentage depletion allowance," which lets oil companies deduct a percentage of their revenue as if the resource is being used up—a benefit most other industries don't receive. Fourth, it removes deductions for "tertiary injectants," which are chemicals used in advanced oil extraction techniques, again spreading any deductions over five years instead.

The bill also tightens the definition of what counts as a "major integrated oil company" to catch companies that might try to avoid these rules through corporate restructuring or mergers. The changes take effect starting in 2022, so they won't affect taxes companies already owe for 2021 and earlier.

All the extra tax revenue generated from these changes gets deposited into a new "Transportation Block Grant Fund" that distributes money to states and local areas for surface transportation projects—things like road repairs, public transit improvements, and other infrastructure. Essentially, the bill redirects money that would have gone to oil company tax breaks and instead uses it to fix roads and improve transportation systems that everyday people depend on.

Surface Transportation Investment Act of 2021

Brownley, Julia

Surface Transportation Investment Act of 2021 This bill limits or repeals certain tax benefits for major integrated oil companies, including (1) the foreign tax credit for companies that are dual capacity taxpayers, (2) the tax deduction for intangible drilling and development costs, (3) the percentage depletion allowance for oil and gas wells, and (4) the tax deduction for qualified tertiary injectant expenses. The bill modifies the definition of major integrated oil company to include certain successors in interest that control more than 50% of the crude oil production or natural gas production of the company. The bill establishes a Transportation Block Grant Fund and appropriates to the fund amounts equal to the increase in revenues as a result of this bill. The funds must be used for making grants under the Surface Transportation Block Grant Program.