To amend the Internal Revenue Code of 1986 to impose a temporary windfall profit tax on crude oil and to use the proceeds of the tax collected to provide a nonrefundable tax credit of $100 for every personal exemption claimed for taxable years beginning in 2005.

SA 2635. Mr. SCHUMER (for himself and Mrs. Feinstein) 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. 410. TEMPORARY WINDFALL PROFITS TAX.

(a) 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--TEMPORARY WINDFALL PROFITS ON CRUDE OIL

``Sec. 5896. Imposition of tax.
``Sec. 5897. Windfall profit; etc.
``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

[[Page S13226]]

imposed on any applicable taxpayer an excise tax in an amount
equal to 50 percent of the windfall profit of such taxpayer
for any taxable year beginning in 2005.
``(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 $100,000,000.

``SEC. 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 2002-
2004 taxable year period plus 10 percent of such average.

``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.
``(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) Nonrefundable Credit.--In the case of taxable years
beginning in 2005, for purposes of the Internal Revenue Code
of 1986, the tax liability of each taxpayer otherwise
determined under the Internal Revenue Code of 1986 shall be
reduced by $100 for each personal exemption (within the
meaning of section 151 of such Code) claimed by such taxpayer
for such taxable year.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning in 2005.
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