A bill to amend the Internal Revenue Code of 1954 to provide a credit against income tax for producing oil from certain marginal wells, to repeal the net income limitation on percentage depletion on oil and gas wells, to provide relief from the minimum tax for insolvent oil producers, and to provide that certain tax benefits will not be lost where an oil or gas property is transferred.

Amends the Internal Revenue Code to allow an income tax credit for crude oil producers for maintaining economically unproductive oil wells. Sets the amount of such credit as the amount equal to the excess of an oil well's operating costs allocable to a barrel of oil over the sales price of the barrel (but in no event more than $3.50 per barrel). Provides for a ten-year carryback and a five-year carryover of such credit.

Repeals the rule that limits the percentage depletion allowance for oil and gas properties to 50 percent of a taxpayer's net income from the property.

Revises the minimum tax treatment rules for insolvent oil producers to provide that an insolvent taxpayer who transfers property used in the active conduct of a trade or business of exploring for or producing crude oil is not required to treat the net capital gain on a transfer as a tax preference if the transfer was made to a creditor in cancellation of indebtedness or to a third party under a threat of foreclosure. Limits such treatment revision to persons who have derived at least 50 percent of the gross income from an oil exploration or production business.

Repeals specified rules which currently disqualify certain properties from: (1) the percentage depletion allowance deduction; and (2) the stripper well oil exemption from the windfall profit tax.