109th CONGRESS
1st Session
H. R. 4263
To amend the Internal Revenue Code of 1986 to impose a temporary
windfall profit tax on crude oil, to establish the Consumer Energy Assistance
Trust Fund, and to provide for a rebate to energy consumers.
IN THE HOUSE OF REPRESENTATIVES
November 9, 2005
Mr. MARKEY (for himself, Mr. EMANUEL, Mr. SANDERS, Mr. NADLER, and Mr.
HINCHEY) introduced the following bill; which was referred to the Committee
on Ways and Means, and in addition to the Committees on Energy and Commerce
and Education and the Workforce, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
A BILL
To amend the Internal Revenue Code of 1986 to impose a temporary
windfall profit tax on crude oil, to establish the Consumer Energy Assistance
Trust Fund, and to provide for a rebate to energy consumers.
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 and Consumer Assistance 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 producer of crude oil an excise tax equal
to the excess of--
`(1) 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,
over
`(2) the amount of qualified investment by such producer during such 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; QUALIFIED
INVESTMENT.
`(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.
`(d) Qualified Investment- For purposes of this chapter--
`(1) IN GENERAL- The term `qualified investment' means any amount paid
or incurred with respect to--
`(A) section 263(c) costs,
`(B) qualified refinery property (as defined in section 179C(c) and
determined without regard to any termination date),
`(C) any qualified facility described in paragraph (1), (2), (3), or
(4) of section 45(d) (determined without regard to any placed in service
date),
`(D) any facility for the production of alcohol used as a fuel (within
the meaning of section 40) or biodiesel or agri-biodiesel used as a
fuel (within the meaning of section 40A).
`(2) SECTION 263(c) COSTS- For purposes of this subsection, the term `section
263(c) costs' means intangible drilling and development costs incurred
by the taxpayer which (by reason of an election under section 263(c))
may be deducted as expenses for purposes of this title (other than this
paragraph). Such term shall not include costs incurred in drilling a nonproductive
well.
`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.
`(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 and Consumer Assistance 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 3 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'.
(1) IN GENERAL- 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.
(2) TRANSITIONAL RULES- For the period ending December 31, 2005, the Secretary
of the Treasury or the Secretary's delegate shall prescribe rules relating
to the administration of chapter 56 of the Internal Revenue Code of 1986.
To the extent provided in such rules, such rules shall supplement or supplant
for such period the administrative provisions contained in chapter 56
of such Code (or in so much of subtitle F of such Code as relates to such
chapter 56).
SEC. 3. CONSUMER ENERGY ASSISTANCE TRUST FUND.
(a) In General- Subchapter A of chapter 98 of the Internal Revenue Code
of 1986 (relating to establishment of trust funds) is amended by adding
at the end the following new section:
`SEC. 9511. CONSUMER 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 `Consumer Energy Assistance
Trust Fund', consisting of such amounts as may be appropriated or credited
to such fund as provided in this section or section 9602(b).
`(b) Transfers to Trust Fund- There are hereby appropriated to the Consumer
Energy Assistance Trust Fund amounts equivalent to the taxes received in
the Treasury under chapter 56.
`(c) Expenditures- Amounts in the Consumer Energy Assistance Trust Fund
shall be available for making expenditures to carry out the Low-Income Home
Energy Assistance Act of 1981 (as in effect on the date of the enactment
of this section).'.
(b) Clerical Amendment- The table of sections for subchapter A of chapter
98 of such Code is amended by adding at the end the following new item:
`Sec. 9511. Consumer Energy Assistance Trust Fund.'.
SEC. 4. ENERGY CONSUMER 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. ENERGY 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 for each taxable year beginning after December 31, 2005, in an amount
equal to the lesser of--
`(1) the amount of the taxpayer's liability for tax for such taxpayer's
preceding taxable year, or
`(2) the applicable amount.
`(b) Liability for Tax- For purposes of this section, the liability for
tax for any taxable year shall be the excess (if any) of--
`(A) the taxpayer's regular tax liability (within the meaning of section
26(b)) for the taxable year,
`(B) the tax imposed by section 55(a) with respect to such taxpayer
for the taxable year, and
`(C) the taxpayer's social security taxes (within the meaning of section
24(d)(2)) for the taxable year, over
`(2) the sum of the credits allowable under part IV of subchapter A of
chapter 1 (other than the credits allowable under subpart C thereof, relating
to refundable credits) for the taxable year.
`(c) Applicable Amount- For purposes of this section, the applicable amount
for any taxpayer shall be determined by the Secretary not later than the
date specified in subsection (d)(1) taking into account the number of such
taxpayers and the amount of revenues in the Treasury (reduced by the amount
appropriated to the Consumer Energy Assistance Trust Fund under section
9511) resulting from the tax imposed by chapter 56 for the calendar year
preceding the taxable year.
`(d) Date Payment Deemed Made-
`(1) IN GENERAL- The payment provided by this section shall be deemed
made on February 1 of the calendar year ending with or within the taxable
year.
`(2) REMITTANCE OF PAYMENT- The Secretary shall remit to each taxpayer
the payment described in paragraph (1) not later that the date which is
30 days after the date specified in paragraph (1).
`(e) 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.'.
(b) 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 and Consumer Assistance Act of 2005'.
(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. Energy consumer rebate.'.
(d) Effective Date- The amendments made by this section shall take effect
on the date of the enactment of this Act.
END
