II 110th CONGRESS 2d Session S. 2782 IN THE SENATE OF THE UNITED STATES March 13, 2008 Mr. Schumer (for himself and Mr. Brown) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to impose a temporary windfall profit tax on crude oil and transfer the proceeds of the tax to the Highway Trust Fund, and for other purposes.

1.

Short title

This Act may be cited as the Recapture Excess Profits and Invest in Roads and Rail (REPAIR) Act of 2008.

2.

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: 56

Temporary windfall profits on crude oil

Sec. 5896. Imposition of tax. Sec. 5897. Windfall profit; etc. Sec. 5898. Special rules and definitions.

5896.

Imposition of tax

(a)

In general

In addition to any other tax imposed under this title, there is hereby imposed on any applicable taxpayer an excise tax in an amount equal to 25 percent of the windfall profit of such taxpayer for any taxable year beginning during 2008 or 2009. (b)

Applicable taxpayer

For purposes of this chapter, the term applicable taxpayer means, with respect to operations in the United States— (1)any integrated oil company (as defined in section 291(b)(4)), and (2)any other producer or refiner of crude oil with gross receipts from the sale of such crude oil or refined oil products for the taxable year exceeding $1,000,000,000.

5897.

Windfall profit; etc

(a)

General rule

For purposes of this chapter, the term windfall profit means the excess of the adjusted taxable income of the applicable taxpayer for the taxable year over the reasonably inflated average profit for such taxable year. (b)

Adjusted taxable income

For purposes of this chapter, with respect to any applicable taxpayer, the adjusted taxable income for any taxable year is equal to the taxable income for such taxable year (within the meaning of section 63 and determined without regard to this subsection)— (1)increased by any interest expense deduction, charitable contribution deduction, and any net operating loss deduction carried forward from any prior taxable year, and (2)reduced by any interest income, dividend income, and net operating losses to the extent such losses exceed taxable income for the taxable year. In the case of any applicable taxpayer which is a foreign corporation, the adjusted taxable income shall be determined with respect to such income which is effectively connected with the conduct of a trade or business in the United States.(c)

Reasonably inflated average profit

For purposes of this chapter, with respect to any applicable taxpayer, the reasonably inflated average profit for any taxable year is an amount equal to the average of the adjusted taxable income of such taxpayer for taxable years beginning during the 2003–2007 taxable year period (determined without regard to the taxable year with the highest adjusted taxable income in such period) plus 10 percent of such average.

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. (b)

Records and information

Each taxpayer liable for tax under section 5896 shall keep such records, make such returns, and furnish such information 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)

Crude oil

The term crude oil includes crude oil condensates and natural gasoline. (e)

Businesses under common control

For purposes of this chapter, all members of the same controlled group of corporations (within the meaning of section 267(f)) and all persons under common control (within the meaning of section 52(b) but determined by treating an interest of more than 50 percent as a controlling interest) shall be treated as 1 person. (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)

Transfer of proceeds to Highway Trust Fund

Section 9503(b)(1) of the Internal Revenue Code of 1986 (relating to certain taxes) is amended by striking and at the end of subparagraph (D), by striking the period at the end of subparagraph (E) and inserting , and , and by adding at the end the following new subparagraph: (F)section 5896 (relating to windfall profit tax on crude oil). . (e)

Effective dates

(1)

In general

Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning in 2008 and 2009. (2)

Subsection (d)

The amendments made by subsection (d) shall take effect on the date of the enactment of this Act.