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This bill amends the tax code to provide a tax benefit to oil and gas companies engaged in domestic energy production. Specifically, it allows companies to deduct intangible drilling and development costs—expenses incurred in exploring for and preparing oil and gas wells—when calculating their adjusted financial statement income for tax purposes. The change applies to how companies report income to the Internal Revenue Service, potentially allowing them to reduce their taxable income and thereby lower their tax obligations. The bill affects oil and gas producers operating in the United States and became effective for tax years beginning after December 31, 2022. There is no specific federal funding amount mentioned in the legislation, as it functions as a tax provision rather than a spending program.

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