A bill to amend the Internal Revenue Code of 1954 to revise certain inequitable provisions relating to the limitations on percentage depletion in the case of oil and gas wells.

Authorizes a taxpayer who receives an interest in any proven oil or gas property to utilize the percentage depletion allowance with respect to the production of crude oil or natural gas attributable to such interest where the interest is transferred for other than a tax avoidance purpose, under the Internal Revenue Code.

Stipulates that taxable income for the purpose of computing the limitation on percentage depletion allowances shall be computed without regard to the deduction for expenses incurred in connection with exploration for non-producing wells and expenses relating to intangible drilling and development costs.