I
109th CONGRESS
1st Session
H. R. 4449
IN THE HOUSE OF REPRESENTATIVES
December 6, 2005
Mr. Pallone 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 allow a credit against tax for qualified fuel-efficient vehicles placed in service during the taxable year, to establish the Energy Assistance Trust Fund, and for other purposes.
Short title
This Act may be cited as the Consumer Energy Assistance and Fairness Act of 2005.
Windfall profits tax
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 the following new chapter:
Windfall profit 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
Imposition of tax
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—
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
the amount of qualified investment by such company during such taxable year.
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.
Tax paid by producer
The tax imposed by this section shall be paid by the producer of the taxable crude oil.
Windfall profit; removal price; adjusted base price; qualified investment
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.
Removal price
For purposes of this chapter—
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.
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.
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.
Refining begun on property
If the manufacture or conversion of crude oil into refined products begins before such oil is removed from the property—
such oil shall be treated as removed on the day such manufacture or conversion begins, and
the removal price shall be the constructive sales price for purposes of determining gross income from the property under section 613.
Property
The term property has the meaning given such term by section 614.
Adjusted base price defined
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—
such base price, multiplied by
the inflation adjustment for the calendar year in which the taxable crude oil is removed from the property.
Inflation adjustment
In general
For purposes of paragraph (1), the inflation adjustment for any calendar year after 2006 is the percentage by which—
the implicit price deflator for the gross national product for the preceding calendar year, exceeds
such deflator for the calendar year ending December 31, 2005.
First revision of price deflator used
For purposes of subparagraph (A), the first revision of the price deflator shall be used.
Qualified investment
For purposes of this chapter—
In general
The term qualified investment means any amount paid or incurred with respect to—
section 263(c) costs,
qualified refinery property (as defined in section 179C(c) and determined without regard to any termination date),
any qualified facility described in paragraph (1), (2), (3), or (4) of section 45(d) (determined without regard to any placed in service date), or
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).
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.
Special rules and definitions
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.
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.
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.
Definitions
For purposes of this chapter—
Producer
The term producer means the holder of the economic interest with respect to the crude oil.
Crude oil
In general
The term crude oil includes crude oil condensates and natural gasoline.
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)).
Barrel
The term barrel means 42 United States gallons.
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.
Regulations
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this chapter.
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.
.
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.
.
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:
The windfall profit tax imposed by section 5896.
.
Effective date
The amendments made by this section shall apply to crude oil removed after December 31, 2005, in taxable years beginning after such date.
Fuel-efficient vehicle credit
In general
Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to other credits) is amended by inserting after section 30C the following new section:
Fuel-efficient vehicle credit
Allowance of credit
At the election of the taxpayer, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to $1,000 for any qualified fuel-efficient vehicle placed in service by the taxpayer during the taxable year.
Qualified fuel-efficient vehicle
For purposes of this section, the term qualified fuel-efficient vehicle means a motor vehicle (as defined in section 30(c)(2))—
in which the fuel economy (determined in accordance with section 4064) of such vehicle is rated at not less than 30 miles per gallon, and
which is—
an automobile (as defined in section 4064(b)), or
a truck or van with an unloaded gross vehicle weight rating not greater than 7,500 pounds.
Special rules
Basis reduction
The basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit.
Recapture
The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit.
Property used outside United States, etc. not qualified
No credit shall be allowed under subsection (a) with respect to any property referred to in section 50(b) or with respect to the portion of the cost of any property taken into account under section 30, 179, or 179A.
Carryforward of unused credits
If the credit allowable under subsection (a) for any taxable year exceeds—
the regular tax for the taxable year reduced by the sum of the credits allowable under subpart A and this part (other than this section), over
the tentative minimum tax for the taxable year,
Termination
This section shall not apply to taxable years beginning after December 31, 2008.
.
Clerical amendment
The table of sections for such subpart B is amended by inserting after the item relating to section 30C the following new item:
Sec. 30D. Fuel-efficient vehicle credit
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2005.
Energy assistance trust fund
Creation of trust fund
Subchapter A of chapter 98 of such Code is amended by inserting at the end the following new section:
Energy assistance trust fund
Creation of trust fund
There is established in the Treasury of the United States a trust fund to be known as the Energy Assistance Trust Fund
, consisting of such amounts as may be appropriated or credited to the Energy Assistance Trust Fund.
Transfer of certain taxes
There are hereby appropriated to the Energy Assistance Trust Fund amounts equivalent to the taxes received in the Treasury under chapter 56.
Expenditures from Energy Assistance Trust Fund
As provided by appropriation Acts, amounts in the Energy Assistance Trust Fund shall be available—
to make grants under the Low-Income Gasoline Assistance Program Act, and
to carry out the Low-Income Home Energy Assistance Act of 1981.
.
Clerical amendment
The table of sections for subchapter A of chapter 98 of such Code is amended by inserting at the end the following new item:
Sec. 9511. Energy assistance trust fund
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2005.
Low-income gasoline assistance program
Short title
This section may be cited as the Low-Income Gasoline Assistance Program Act
.
Definitions
For purposes of this section—
Covered activities
The term covered activities means—
work activities;
education directly related to employment; or
activities related to necessary scheduled medical treatment.
Gasoline
The term gasoline has the meaning given the term in section 4082 of the Internal Revenue Code of 1986.
Household
The term household has the meaning given the term in section 2603 of the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8622).
Poverty level; State median income
The terms poverty level and State median income have the meanings given the terms in section 2603 of the Low-Income Home Energy Assistance Act of 1981.
Secretary
The term Secretary means the Secretary of Health and Human Services.
State
The term State means each of the several States, the District of Columbia, and the Commonwealth of Puerto Rico.
Work activities
The term work activities has the meaning given the term in section 407(d) of the Social Security Act (42 U.S.C. 607(d)).
Emergency assistance programs
The Secretary shall make grants to States, from allotments made under subsection (d), to enable the States to establish emergency assistance programs and to provide, through the programs, payments to eligible households to enable the households to purchase gasoline.
State allotments
From the funds appropriated under subsection (l) for a fiscal year and remaining after the reservation made in subsection (k), the Secretary shall allot to each State an amount that bears the same relation to such remainder as the amount the State receives under section 675B of the Community Services Block Grant Act (42 U.S.C. 9906) for that year bears to the amount all States receive under that section for that year.
State applications
In general
To be eligible to receive a grant under this section, a State shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require.
Contents
At a minimum, the application shall contain—
information designating a State agency to carry out the emergency assistance program in the State, which shall be—
the State agency specified in the State plan submitted under section 402 of the Social Security Act (42 U.S.C. 602); or
the State agency designated under section 676(a) of the Community Services Block Grant Act (42 U.S.C. 9908(a)); and
information describing the emergency assistance program to be carried out in the State.
Participation of Indian tribes
Reservation
If, with respect to a State, the Secretary—
receives a request from the governing body of an Indian tribe or tribal organization in the State that assistance under this section be made directly to the tribe or organization; and
determines that the members of the tribe or organization would be better served by means of grants made directly to provide benefits under this section,
Determination of reserved amount
The Secretary shall reserve from amounts that would otherwise be allotted to the State not less than 100 percent of an amount that bears the same ratio to the State allotment for the fiscal year involved as the population of all eligible Indians for whom a determination has been made under paragraph (1) bears to the population of all individuals in the State who are eligible for assistance through a grant made under this section.
Awards
The sums reserved by the Secretary on the basis of a determination made under paragraph (1) shall be made available by grant to the Indian tribe or tribal organization serving the individuals for whom such a determination has been made.
Plan
In order for an Indian tribe or tribal organization to be eligible for a grant award for a fiscal year under this section, the tribe or organization shall submit to the Secretary a plan for the fiscal year that meets such criteria as the Secretary may prescribe by regulation.
Definitions
For purposes of this subsection—
Indian tribe; tribal organization
The terms Indian tribe and tribal organization mean a tribe, band, or other organized group recognized in the State in which the tribe, band, or group resides, or considered by the Secretary of the Interior, to be an Indian tribe or an Indian organization for any purpose.
Indian
The term Indian means a member of an Indian tribe or of a tribal organization.
Eligible households
In general
To be eligible to receive a payment from a State under this section, a household shall submit an application to the State at such time, in such manner, and containing such information as the State may require.
Contents
The applicant shall include in the application information demonstrating that—
in the case of a household that is not located in Hawaii, 1 or more individuals in the applicant’s household individually drive not less than 30 miles per day, or not less than 150 miles per week, to or from covered activities; and
the household meets the eligibility requirements of section 2605(b)(2)(A) of the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8624(b)(2)(A)), other than clause (i) of that section; or
the household income for the household does not exceed the greater of—
an amount equal to 150 percent of the poverty level for the State involved; or
an amount equal to 60 percent of the State median income.
Rule
For purposes of paragraph (2)(B)(ii), a State—
may not exclude a household from eligibility for a fiscal year solely on the basis of household income if such income is less than 110 percent of the poverty level for such State; but
may give priority to those households with the highest gasoline costs or needs in relation to household income.
Program requirements
Determination of trigger amount
Determination of gasoline
The Secretary of Health and Human Services, in consultation with the Secretary of Energy, shall determine a grade of gasoline for which price determinations will be made under this subsection, which shall be a type of gasoline that has a specified octane rating or other specified characteristic.
Determination of calculation
The Secretary of Health and Human Services, in consultation with the Secretary of Energy, shall determine a method for calculating the average per gallon price of the covered grade of gasoline in each State.
Baseline
The Secretary of Health and Human Services, in consultation with the Secretary of Energy, shall calculate, in accordance with subparagraph (B), the average per gallon price of the covered grade of gasoline in each State for January 2005.
Trigger and release prices
The Secretary of Health and Human Services, in consultation with the Secretary of Energy, shall calculate—
the trigger price for each State by multiplying the price calculated under subparagraph (C) by 115 percent; and
the release price for each State by multiplying the price calculated under subparagraph (C) by 110 percent.
Payments
Availability
Monthly price calculation
The Secretary of Health and Human Services, in consultation with the Secretary of Energy, shall calculate, in accordance with paragraph (1)(B), the average per gallon price of the covered grade of gasoline in each State for each month.
Determination
If the Secretary of Health and Human Services, in consultation with the Secretary of Energy, determines that the price in a State calculated under paragraph (1)(B) for a month—
is more than the trigger price for the State, the State shall provide payments in accordance with this subsection for the following month; and
is less than the release price for the State, the State shall suspend provision of the payments, not earlier than 30 days after the date of the determination, for the following month.
General authority
Except as provided in paragraph (3), the State shall use funds received through a grant made under subsection (c)(including a grant increased pursuant to subsection (j)) and any funds made available to the State under section 404(d)(4) of the Social Security Act (42 U.S.C. 604(d)(4)) to make payments under this Act to eligible households.
Period
An eligible household with an application approved under subsection (e) may receive payments under this Act for not more than 3 months. The household may submit additional applications under subsection (e), and may receive payments under this Act for not more than 3 months for each such application approved by the State.
Amount
The State shall make the payments in amounts of not less than $25, and not more than $75, per month. The State may determine the amount of the payments on a sliding scale, taking into consideration the household income of the eligible households.
State administration
The State may use not more than 10 percent of the funds described in paragraph (2)(B) to pay for the cost of administering this Act.
Definitions
For purposes of this subsection:
Covered grade
The term covered grade means the grade of gasoline determined under paragraph (1)(A).
Release price
The term release price means the release price calculated under paragraph (1)(D)(ii).
Trigger price
The term trigger price means the trigger price calculated under paragraph (1)(D)(i).
Treatment of benefits
Income or resources
Notwithstanding any other law, the value of any payment provided under this section shall not be treated as income or resources for purposes of—
any other Federal or federally assisted program that bases eligibility, or the amount of benefits, on need; or
the Internal Revenue Code of 1986.
TANF assistance
For purposes of part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), a payment provided under this section shall not be considered to be assistance provided by a State under that part, regardless of whether the State uses funds made available under section 404(d)(4) of the Social Security Act (42 U.S.C. 604(d)(4)) to make payments under this Act. The period for which such payments are provided under this section shall not be considered to be part of the 60-month period described in section 408(a)(7) of the Social Security Act (42 U.S.C. 608(a)(7)).
Authority to use funds for temporary assistance for needy families
Section 404(d) of the Social Security Act (42 U.S.C. 604(d)) is amended—
in paragraph (3)(A), by striking paragraph (1)
and inserting paragraph (1) or (4)
; and
by adding at the end the following:
Other State programs
A State may use funds from any grant made to the State under section 403(a) for a fiscal year to carry out a State program pursuant to the Low-Income Gasoline Assistance Program Act.
.
Discretionary activities by the Secretary
The Secretary of Health and Human Services may reserve not more than 5 percent of the funds appropriated under subsection (l) for a fiscal year—
to pay for the cost of administering this section; and
to increase the cost of a grant made to a State under subsection (c), in any case in which the Secretary determines that emergency conditions relating to gasoline prices exist in that State.
Authorization of appropriations
In general
There is authorized to be appropriated to carry out this section $500,000,000 for fiscal year 2006 and each subsequent fiscal year.
Availability
Any sums appropriated under paragraph (1) for a fiscal year shall remain available until the end of the succeeding fiscal year.