II 110th CONGRESS 1st Session S. 1504 IN THE SENATE OF THE UNITED STATES May 24, 2007 Ms. Snowe introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To revalue the LIFO inventories of major integrated oil companies.

1.

Revaluation of LIFO inventories of major integrated oil companies

(a)

General rule

Notwithstanding any other provision of law, if a taxpayer is a major integrated oil company for its last taxable year ending in calendar year 2007, the taxpayer shall— (1)increase, effective as of the close of such taxable year, the value of each historic LIFO layer of inventories of crude oil, natural gas, or any other petroleum product (within the meaning of section 4611) by the layer adjustment amount, and (2)decrease its cost of goods sold for such taxable year by the aggregate amount of the increases under paragraph (1). If the aggregate amount of the increases under paragraph (1) exceeds the taxpayer’s cost of goods sold for such taxable year, the taxpayer’s gross income for such taxable year shall be increased by the amount of such excess.(b)

Layer adjustment amount

For purposes of this section— (1)

In General

The term layer adjustment amount means, with respect to any historic LIFO layer, the product of— (A)$18.75, and (B)the number of barrels of crude oil (or in the case of natural gas or other petroleum products, the number of barrel-of-oil equivalents) represented by the layer. (2)

Barrel-of-oil equivalent

The term barrel-of-oil equivalent has the meaning given such term by section 45K(d)(5) of the Internal Revenue Code of 1986. (c)

Application of requirement

(1)

No change in method of accounting

Any adjustment required by this section shall not be treated as a change in method of accounting. (2)

Underpayments of estimated tax

No addition to the tax shall be made under section 6655 of the Internal Revenue Code of 1986 (relating to failure by corporation to pay estimated tax) with respect to any underpayment of an installment required to be paid with respect to the taxable year described in subsection (a) to the extent such underpayment was created or increased by this section. (d)

Major integrated oil company

For purposes of this section, the term major integrated oil company has the meaning given such term by section 167(h)(5)(B) of the Internal Revenue Code of 1986.