To amend the Internal Revenue Code of 1986 to impose a temporary windfall profit tax on crude oil and to rebate the tax collected back to the American consumer, and for other purposes.

SA 2587. Mr. DORGAN (for himself, Mr. Dodd, Mrs. Boxer, Mr. Reed, Mr.
Lieberman, and Mr. Kohl) proposed an amendment to the bill S. 2020, to
provide for reconciliation pursuant to section 202(b) of the concurrent
resolution on the budget for fiscal year 2006; as follows:

At the end of title IV, add the following:

SEC. __. WINDFALL PROFITS TAX; ENERGY CONSUMER REBATE.

(a) Windfall Profits Tax.--
(1) In general.--Subtitle E (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 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 company
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.
``(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 Rebate 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.''.
(2) Clerical amendment.--The table of chapters for subtitle
E is amended by adding at the end the following new item:

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

(3) Deductibility of windfall profit tax.--The first
sentence of section 164(a) (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.''.
(4) Effective date.--
(A) In general.--The amendments made by this subsection
shall apply to crude oil removed after the date of the
enactment of this Act, in taxable years ending after such
date.
(B) 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).
(b) Energy Consumer Rebate.--
(1) In general.--Subchapter B of chapter 65 (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--
``(1) the sum 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 resulting from the tax
imposed by section 5896 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.

[[Page S13036]]

``(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.''.
(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 Rebate Act of 2005''.
(3) Clerical amendment.--The table of sections for
subchapter B of chapter 65 is amended by adding at the end
the following new item:

``Sec. 6430. Energy consumer rebate.''.

(4) Effective date.--The amendments made by this subsection
shall take effect on the date of the enactment of this Act.
______