[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2103 Introduced in Senate (IS)]








109th CONGRESS
  1st Session
                                S. 2103

 To impose a temporary windfall profits tax on crude oil and provide a 
  rebate to each household from the revenues resulting from such tax.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 14, 2005

 Mr. Reid (for Mr. Lieberman) introduced the following bill; which was 
          read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To impose a temporary windfall profits tax on crude oil and provide a 
  rebate to each household from the revenues resulting from such tax.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. TEMPORARY WINDFALL PROFITS TAX.

    (a) In General.--Subtitle E of the Internal Revenue Code of 1986 
(relating to alcohol, tobacco, and certain other excise taxes) is 
amended by adding at the end thereof the following new chapter:

         ``CHAPTER 56--TEMPORARY WINDFALL PROFITS ON CRUDE OIL

``Sec. 5896. Imposition of tax.
``Sec. 5897. Windfall profit; removal price; adjusted base price; 
                            qualified investment.
``Sec. 5898. Special rules and definitions.

``SEC. 5896. IMPOSITION OF TAX.

    ``(a) In General.--In addition to any other tax imposed under this 
title, there is hereby imposed on any integrated oil company (as 
defined in section 291(b)(4)) an excise tax equal to 50 percent of the 
windfall profit from all barrels of taxable crude oil removed from the 
property during taxable years beginning in 2005.
    ``(b) Fractional Part of Barrel.--In the case of a fraction of a 
barrel, the tax imposed by subsection (a) shall be the same fraction of 
the amount of such tax imposed on the whole barrel.
    ``(c) Tax Paid by Producer.--The tax imposed by this section shall 
be paid by the producer of the taxable crude oil.

``SEC. 5897. WINDFALL PROFIT; REMOVAL PRICE; ADJUSTED BASE PRICE.

    ``(a) General Rule.--For purposes of this chapter, the term 
`windfall profit' means the excess of the removal price of the barrel 
of taxable crude oil over the adjusted base price of such barrel.
    ``(b) Removal Price.--For purposes of this chapter--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `removal price' means the amount for which 
        the barrel of taxable crude oil is sold.
            ``(2) Sales between related persons.--In the case of a sale 
        between related persons, the removal price shall not be less 
        than the constructive sales price for purposes of determining 
        gross income from the property under section 613.
            ``(3) Oil removed from property before sale.--If crude oil 
        is removed from the property before it is sold, the removal 
        price shall be the constructive sales price for purposes of 
        determining gross income from the property under section 613.
            ``(4) Refining begun on property.--If the manufacture or 
        conversion of crude oil into refined products begins before 
        such oil is removed from the property--
                    ``(A) such oil shall be treated as removed on the 
                day such manufacture or conversion begins, and
                    ``(B) the removal price shall be the constructive 
                sales price for purposes of determining gross income 
                from the property under section 613.
            ``(5) Property.--The term `property' has the meaning given 
        such term by section 614.
    ``(c) Adjusted Base Price Defined.--For purposes of this chapter, 
the term `adjusted base price' means $40 for each barrel of taxable 
crude oil.

``SEC. 5898. SPECIAL RULES AND DEFINITIONS .

    ``(a) Withholding and Deposit of Tax.--The Secretary shall provide 
such rules as are necessary for the withholding and deposit of the tax 
imposed under section 5896 on any taxable crude oil.
    ``(b) Records and Information.--Each taxpayer liable for tax under 
section 5896 shall keep such records, make such returns, and furnish 
such information (to the Secretary and to other persons having an 
interest in the taxable crude oil) with respect to such oil as the 
Secretary may by regulations prescribe.
    ``(c) Return of Windfall Profit Tax.--The Secretary shall provide 
for the filing and the time of such filing of the return of the tax 
imposed under section 5896.
    ``(d) Definitions.--For purposes of this chapter--
            ``(1) Producer.--The term `producer' means the holder of 
        the economic interest with respect to the crude oil.
            ``(2) Crude oil.--
                    ``(A) In general.--The term `crude oil' includes 
                crude oil condensates and natural gasoline.
                    ``(B) Exclusion of newly discovered oil.--Such term 
                shall not include any oil produced from a well drilled 
                after the date of the enactment of the chapter, except 
                with respect to any oil produced from a well drilled 
                after such date on any proven oil or gas property 
                (within the meaning of section 613A(c)(9)(A)).
            ``(3) Barrel.--The term `barrel' means 42 United States 
        gallons.
    ``(e) Adjustment of Removal Price.--In determining the removal 
price of oil from a property in the case of any transaction, the 
Secretary may adjust the removal price to reflect clearly the fair 
market value of oil removed.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
chapter.''.
    (b) Clerical Amendment.--The table of chapters for subtitle E of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new item:

        ``Chapter 56. Temporary Windfall Profit on Crude Oil.''.

    (c) Deductibility of Windfall Profit Tax.--The first sentence of 
section 164(a) of the Internal Revenue Code of 1986 (relating to 
deduction for taxes) is amended by inserting after paragraph (5) the 
following new paragraph:
            ``(6) The windfall profit tax imposed by section 5896.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning in 2005.

SEC. 2. HOUSEHOLD REBATE.

    (a) In General.--Subchapter B of chapter 65 of the Internal Revenue 
Code of 1986 (relating to rules of special application in the case of 
abatements, credits, and refunds) is amended by adding at the end the 
following new section:

``SEC. 6430. HOUSEHOLD REBATE.

    ``(a) General Rule.--Except as otherwise provided in this section, 
each individual shall be treated as having made a payment against the 
tax imposed by chapter 1 for the taxable year beginning in 2005 in an 
amount equal to $450.
    ``(b) Remittance of Payment.--The Secretary shall remit to each 
taxpayer the payment described in subsection (a) not later than March 
1, 2006.
    ``(c) Certain Persons Not Eligible.--This section shall not apply 
to--
            ``(1) any taxpayer who did not have any adjusted gross 
        income for the preceding taxable year or whose adjusted gross 
        income for such preceding taxable year exceeded $40,000,
            ``(2) any individual with respect to whom a deduction under 
        section 151 is allowable to another taxpayer for the taxable 
        year beginning in 2005,
            ``(3) any estate or trust, or
            ``(4) any nonresident alien individual.''.
    (b) Conforming Amendment.--Section 1324(b)(2) of title 31, United 
States Code, is amended by inserting before the period ``, or from 
section 6430''.
    (c) Clerical Amendment.--The table of sections for subchapter B of 
chapter 65 of the Internal Revenue Code of 1986 is amended by adding at 
the end the following new item:

``Sec. 6430. Household rebate.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
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