[Congressional Record Volume 151, Number 148 (Wednesday, November 9, 2005)]
[Senate]
[Pages S12611-S12613]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN:
  S. 1981. A bill to amend the Internal Revenue Code of 1986 to impose 
a temporary windfall profit tax on crude oil, to rebate a portion of 
the tax collected back to American consumers, to fund programs under 
the Low-Income Home Energy Assistance Act of 1981 and tax incentives 
for the manufacture of energy efficient motor vehicles by using a 
portion of the proceeds of such tax, and to deposit the balance of the 
tax collected into the Highway Trust Fund to support the funding of 
highway projects and to aid highway users, and for other purposes; to 
the Committee on Finance.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1981

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Windfall Profits Tax Act of 
     2005''.

     SEC. 2. 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--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 the amount equal to 50 percent of the windfall 
     profit from all barrels of taxable crude oil removed from the 
     property during each taxable year.
       ``(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.--
       ``(1) In general.--For purposes of this chapter, the term 
     `adjusted base price' means $40 for each barrel of taxable 
     crude oil plus an amount equal to--
       ``(A) such base price, multiplied by
       ``(B) the inflation adjustment for the calendar year in 
     which the taxable crude oil is removed from the property.
     The amount determined under the preceding sentence shall be 
     rounded to the nearest cent.
       ``(2) Inflation adjustment.--
       ``(A) In general.--For purposes of paragraph (1), the 
     inflation adjustment for any calendar year after 2006 is the 
     percentage by which--
       ``(i) the implicit price deflator for the gross national 
     product for the preceding calendar year, exceeds
       ``(ii) such deflator for the calendar year ending December 
     31, 2005.
       ``(B) First revision of price deflator used.--For purposes 
     of subparagraph (A), the first revision of the price deflator 
     shall be used.

     ``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 Windfall Profits Tax Act of 
     2005, 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.
       ``(g) Termination.--This section shall not apply to taxable 
     crude oil removed after the date which is 10 years after the 
     date of the enactment of this section.''.
       (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. 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) American Consumer Rebate.--
       (1) 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. AMERICAN CONSUMER 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 in an amount 
     equal to_
       ``(1) in the case of any taxable year beginning in 2006, 
     $150, and
       ``(2) in the case of any taxable year beginning after 2006, 
     the applicable amount.
       ``(b) Applicable Amount.--For purposes of this section, the 
     applicable amount for any taxpayer for any taxable year shall 
     be determined by the Secretary not later than December 31 
     (beginning in 2007) taking into account the number of such 
     taxpayers and 75 percent of the amount of revenues in the 
     Treasury resulting from the tax imposed by section 5896 for 
     such taxable year.

[[Page S12612]]

       ``(c) Credits and Refunds.--Under regulations prescribed by 
     the Secretary, any amount treated as a payment under 
     subsection (a) for the taxable year shall be credited against 
     the tax liability of the taxpayer under section 1 for such 
     taxable year or, in the absence of such tax liability of the 
     taxpayer for such taxable year, refunded to the taxpayer.
       ``(d) Certain Persons Not Eligible.--This section shall not 
     apply to--
       ``(1) any individual with respect to whom a deduction under 
     section 151 is allowable to another taxpayer for a taxable 
     year beginning in the calendar year in which such 
     individual's taxable year begins,
       ``(2) any estate or trust, or
       ``(3) any nonresident alien individual.''.
       (2) Conforming amendment.--Section 1324(b)(2) of title 31, 
     United States Code, is amended by inserting before the period 
     ``, or enacted by the Windfall Profits Tax Act of 2005''.
       (3) 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. American consumer rebate.''.

       (4) Effective date.--The amendments made by this subsection 
     shall take effect on the date of the enactment of this Act.
       (e) Low Income Home Energy Assistance Trust Fund.--
       (1) In general.--Subchapter A of chapter 98 of the Internal 
     Revenue Code of 1986 (relating to trust fund code) is amended 
     by adding at the end the following new section:

     ``SEC. 9511. LOW-INCOME HOME ENERGY ASSISTANCE TRUST FUND.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Low-Income Home Energy Assistance Trust Fund', consisting of 
     any amount appropriated or credited to the Trust Fund as 
     provided in this section or section 9602(b).
       ``(b) Transfers to Trust Fund.--There are hereby 
     appropriated to the Low-Income Home Energy Assistance Trust 
     Fund for each fiscal year beginning after September 30, 2005, 
     amounts equivalent to 7.5 percent of the taxes received in 
     the Treasury under section 5896 (relating to windfall profit 
     tax on crude oil) for such fiscal year.
       ``(c) Expenditures From Trust Fund.--Amounts in the Low 
     Income Home Energy Assistance Trust Fund shall be available, 
     without further appropriation, for each fiscal year to carry 
     out the program under the Low-Income Home Energy Assistance 
     Act of 1981 for which funds are authorized under section 
     2602(b) of such Act for such fiscal year, but only if not 
     less than $1,800,000,000 has been appropriated for such 
     program for such fiscal year (determined without regard to 
     any amount appropriated to the Low Income Home Energy 
     Assistance Trust Fund).''.
       (2) Clerical amendment.--The table of sections for such 
     subchapter is amended by adding at the end the following new 
     item:

``Sec. 9511. Low-Income Home Energy Assistance Trust Fund.''.

       (f) Energy Efficient Motor Vehicles Manufacturing Credit.--
       (1) In general.--Subpart B of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     foreign tax credit, etc.) is amended by adding at the end the 
     following new section:

     ``SEC. 30D. ENERGY EFFICIENT MOTOR VEHICLES MANUFACTURING 
                   CREDIT.

       ``(a) Credit Allowed.--In the case of an eligible taxpayer, 
     subject to a credit allocation under subsection (e) to such 
     eligible taxpayer, there shall be allowed as a credit against 
     the tax imposed by this chapter for the taxable year to an 
     amount equal to the sum of--
       ``(1) the initial investment credit determined under 
     subsection (b) for the taxable year,
       ``(2) the fuel economy achievement credit determined under 
     subsection (c) for such taxable year, and
       ``(3) the eligible components R&D credit determined under 
     subsection (d) for such taxable year.
       ``(b) Initial Investment Credit.--For purposes of this 
     section, the initial investment credit is equal to 20 percent 
     of the qualified investment of an eligible taxpayer with 
     respect to energy efficient motor vehicles during the taxable 
     year beginning in 2006.
       ``(c) Fuel Economy Achievement Credit.--For purposes of 
     this section--
       ``(1) In general.--In the case of an eligible taxpayer who 
     meets the requirements of paragraph (2) for a model year 
     ending in a taxable year specified in the table contained in 
     paragraph (3), the fuel economy achievement credit for such 
     taxable year is equal to 30 percent of the sum of--
       ``(A) at the election of the eligible taxpayer, such 
     qualified investment for any preceding taxable year beginning 
     after 2005 if such taxable year has not previously been taken 
     into account under this subsection by such taxpayer, plus
       ``(B) at the election of the eligible taxpayer, the 
     qualified investment with respect to energy efficient motor 
     vehicles of the eligible taxpayer for the taxable year 
     beginning in 2015.
       ``(2) Demonstrated combined fleet economy improvements.--
     The requirements of this paragraph are met for any model year 
     ending in a taxable year if the eligible taxpayer can 
     demonstrate to the satisfaction of the Secretary that the 
     percentage by which the taxpayer's overall combined fuel 
     economy standard for the taxpayer's vehicle fleet for such 
     model year exceeds such standard for such taxpayer's 2005 
     model year as reported to the National Highway Traffic Safety 
     Administration under section 32907 of title 49, United States 
     Code, is not less than the percentage determined for such 
     model year under paragraph (3).
       ``(3) Percentage increase.--The percentage determined under 
     this paragraph for any taxable year is equal to--
``Model year ending in taxable year                 Percentage increase
  2008................................................................5
  2009...............................................................10
  2010...............................................................15
  2011...............................................................20
  2012.............................................................27.5
  2013...............................................................35
  2014.............................................................42.5
  2015...............................................................50
       ``(d) Eligible Components R&D Credit.--For purposes of this 
     section, the eligible R&D credit for any taxable year is 
     equal to 30 percent of the research and development costs 
     paid or incurred by an eligible taxpayer for such taxable 
     year with respect to eligible components used or to be used 
     in the manufacture of energy efficient motor vehicles.
       ``(e) Limitation.--
       ``(1) Initial investment credit and fuel economy 
     achievement credit.--Subject to paragraph (2), the aggregate 
     amount of initial investment credits and fuel economy 
     achievement credits allowed under subsection (a) for any 
     taxable year beginning in a calendar year after 2005 shall be 
     allocated by the Secretary among all eligible taxpayers--
       ``(A) based on each eligible taxpayer's percentage of the 
     total qualified investment of all such taxpayers, and
       ``(B) such that such aggregate amount does not exceed--
       ``(i) $1,000,000,000, plus
       ``(ii) any amount of credit unallocated during any 
     preceding calendar year.
       ``(2) Eligible components r&d credit.--Of the dollar amount 
     available for allocation under paragraph (1) for any taxable 
     year, 10 percent of such amount shall be allocated in the 
     same manner by the Secretary among all eligible taxpayers 
     with respect to the eligible components R&D credit.
       ``(f) Qualified Investment.--For purposes of this section--
       ``(1) In general.--The qualified investment for any taxable 
     year is equal to the incremental costs incurred during such 
     taxable year--
       ``(A) to re-equip or expand any manufacturing facility of 
     the eligible taxpayer to produce energy efficient motor 
     vehicles or to produce eligible components, and
       ``(B) for engineering integration of such vehicles and 
     components as described in subsection (h).
       ``(2) Attribution rules.--In the event a facility of the 
     eligible taxpayer produces both energy efficient motor 
     vehicles and conventional motor vehicles, or eligible and 
     non-eligible components, only the qualified investment 
     attributable to production of energy efficient motor vehicles 
     and the research and development costs attributable to 
     eligible components shall be taken into account.
       ``(g) Energy Efficient Motor Vehicles and Eligible 
     Components.--For purposes of this section--
       ``(1) Energy efficient motor vehicle.--The term `energy 
     efficient motor vehicle' means--
       ``(A) any new advanced lean burn technology motor vehicle 
     (as defined in section 30B(c)(3) determined without regard to 
     subparagraph (A)(iv)(II) thereof or the weight limitation 
     under subparagraph (A)(iv)(I) thereof),
       ``(B) any new qualified hybrid motor vehicle (as defined in 
     section 30B(d)(3)(A) determined without regard to 
     subparagraph (A)(ii)(II) thereof, the weight limitation under 
     subparagraph (A)(ii)(I) thereof, and subparagraph (A)(iv) 
     thereof), or
       ``(C) any other new technology motor vehicle identified by 
     the Secretary as offering a substantial increase in fuel 
     economy.
       ``(2) Eligible components.--The term `eligible component' 
     means any component inherent to any energy efficient motor 
     vehicle, including--
       ``(A) with respect to any gasoline-electric new qualified 
     hybrid motor vehicle--
       ``(i) electric motor or generator,
       ``(ii) power split device,
       ``(iii) power control unit,
       ``(iv) power controls,
       ``(v) integrated starter generator, or
       ``(vi) battery,
       ``(B) with respect to any new advanced lean burn technology 
     motor vehicle--
       ``(i) diesel engine,
       ``(ii) turbocharger,
       ``(iii) fuel injection system, or
       ``(iv) after-treatment system, such as a particle filter or 
     NOx absorber, and
       ``(C) with respect to any energy efficient motor vehicle, 
     any other component approved by the Secretary.
       ``(h) Engineering Integration Costs.--For purposes of 
     subsection (f)(1)(B), costs for engineering integration are 
     costs incurred prior to the market introduction of energy 
     efficient vehicles for engineering tasks related to--
       ``(1) incorporating eligible components into the design of 
     energy efficient motor vehicles, and
       ``(2) designing new tooling and equipment for production 
     facilities which produce eligible components or energy 
     efficient motor vehicles.

[[Page S12613]]

       ``(i) Eligible Taxpayer.--For purposes of this section, the 
     term `eligible taxpayer' means, with respect to any taxable 
     year, any taxpayer if more than 25 percent of the taxpayer's 
     gross receipts for the taxable year is derived from the 
     manufacture of motor vehicles or any component parts of such 
     vehicles.
       ``(j) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for the taxable year shall not 
     exceed the excess of--
       ``(1) the sum of--
       ``(A) the regular tax liability (as defined in section 
     26(b)) for such taxable year, plus
       ``(B) the tax imposed by section 55 for such taxable year, 
     over
       ``(2) the sum of the credits allowable under subpart A and 
     sections 27, 30, 30B, and 30C for the taxable year.
       ``(k) Reduction in Basis.--For purposes of this subtitle, 
     if a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this paragraph) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(l) No Double Benefit.--
       ``(1) Coordination with other deductions and credits.--The 
     amount of any deduction or other credit allowable under this 
     chapter for any cost taken into account in determining the 
     amount of the credit under subsection (a) shall be reduced by 
     the amount of such credit attributable to such cost.
       ``(2) Research and development costs.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any amount described in subsection (d) taken into account in 
     determining the amount of the credit under subsection (a) for 
     any taxable year shall not be taken into account for purposes 
     of determining the credit under section 41 for such taxable 
     year.
       ``(B) Costs taken into account in determining base period 
     research expenses.--Any amounts described in subsection (d) 
     taken into account in determining the amount of the credit 
     under subsection (a) for any taxable year which are qualified 
     research expenses (within the meaning of section 41(b)) shall 
     be taken into account in determining base period research 
     expenses for purposes of applying section 41 to subsequent 
     taxable years.
       ``(m) Business Carryovers Allowed.--If the credit allowable 
     under subsection (a) for a taxable year exceeds the 
     limitation under subsection (j) for such taxable year, such 
     excess (to the extent of the credit allowable with respect to 
     property subject to the allowance for depreciation) shall be 
     allowed as a credit carryback and carryforward under rules 
     similar to the rules of section 39.
       ``(n) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Definitions.--Any term which is used in this section 
     and in chapter 329 of title 49, United States Code, shall 
     have the meaning given such term by such chapter.
       ``(2) Special rules.--Rules similar to the rules of 
     paragraphs (4) and (5) of section 179A(e) and paragraphs (1) 
     and (2) of section 41(f) shall apply.
       ``(o) Election Not to Take Credit.--No credit shall be 
     allowed under subsection (a) for any property if the taxpayer 
     elects not to have this section apply to such property.
       ``(p) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(q) Termination.--This section shall not apply to any 
     qualified investment made after December 31, 2015.''.
       (2) Conforming amendments.--
       (A) Section 1016(a) of such Code is amended by striking 
     ``and'' at the end of paragraph (36), by striking the period 
     at the end of paragraph (37) and inserting ``, and'', and by 
     adding at the end the following new paragraph:
       ``(38) to the extent provided in section 30D(k).''.
       (B) Section 6501(m) of such Code is amended by inserting 
     ``30D(o),'' after ``30C(e)(5),''.
       (C) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting after the item relating to section 30C the 
     following new item:

``Sec. 30D. Energy efficient motor vehicles manufacturing credit.''.

       (3) Effective date.--The amendments made by this subsection 
     shall apply to amounts incurred in taxable years beginning 
     after December 31, 2005.
       (g) Transfer to Highway Trust Fund to Fund Highway Projects 
     and Aid Highway Users.--
       (1) In general.--Section 9503(b)(1) of the Internal Revenue 
     Code of 1986 (relating to certain taxes) is amended--
       (A) by inserting ``(before January 1, 2016, in the case of 
     taxes under section 5896)'' after ``2011''
       (B) by striking ``and'' at the end of subparagraph (D),
       (C) by striking the period at the end of subparagraph (E) 
     and inserting ``, and'',
       (D) by inserting after subparagraph (E) the following new 
     subparagraph:
       ``(F) section 5896 (relating to windfall profit tax).'', 
     and
       (E) by adding at the end the following new sentence: ``For 
     purposes of this paragraph, the aggregate amount which is 
     appropriated to the Highway Trust Fund as determined by 
     reference to taxes received under section 5896 shall be 
     reduced by the aggregate amount of the American consumer 
     rebate determined under section 6430, the amount appropriated 
     for each fiscal year to the Low-Income Home Energy Assistance 
     Trust Fund under section 9511(b), and an amount of 
     $1,000,000,000 for each of fiscal years 2006 through 2015.''
       (2) Portion to mass transit account.--Section 9503(e)(2) of 
     such Code (relating to transfers to Mass Transit Account) is 
     amended by inserting ``and 18.5 percent of the amounts 
     appropriated to the Highway Trust Fund under subsection (b) 
     which are attributable to the tax under section 5896'' after 
     ``1983''.
       (3) Special rule regarding highway projects funded by 
     windfall profit tax revenues.--Notwithstanding section 120 of 
     title 23, United States Code, the Federal share of the cost 
     of any project or activity carried out using funds deposited 
     in the Highway Trust Fund under section 9503(b)(1)(F) of the 
     Internal Revenue Code of 1986 shall be 100 percent to the 
     extent such funds are available under such section.
       (h) Effective Date.--Except as otherwise provided, the 
     amendments made by this section shall apply to crude oil 
     removed after the date of the enactment of this Act, in 
     taxable years ending after such date.
                                 ______