Windfall Profits Rebate Act of 2005

        [Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4203 Introduced in House (IH)]

109th CONGRESS
1st Session
H. R. 4203

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.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

November 2, 2005

Ms. DeLauro introduced the following bill; which was referred to the
Committee on Ways and Means

_______________________________________________________________________

A BILL

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.

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 Rebate 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 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), and
``(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.''.
(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) Effective Date.--
(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. 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--
``(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.
``(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 Rebate 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.
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