To amend the Internal Revenue Code of 1986 to impose a windfall profit tax on crude oil and products thereof.

Summary: National Defense Oil Equity Act of 2003 - Amends the Internal Revenue Code to impose an excise tax on the sale of any crude oil or product of crude oil a tax equal to the applicable percentage of the windfall profit on such sale. Defines windfall profit to mean so much of the profit on such sale as exceeds a reasonable profit. Establishes the Reasonable Profits Board to make reasonable profit determinations.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Defense Oil Equity Act of 
2003''.

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (1) Iraq has 112 billion barrels of proven oil reserves 
        along with roughly 220 billion barrels of probable resources. 
        Only Saudi Arabia's oil reserves are larger. By far, the 
        majority of petroleum reserves (67%) are found in the Middle 
        East.
            (2) The United States has 21 billion barrels of proven oil 
        reserves, twelfth highest in the world. United States proven 
        oil reserves have declined by almost 20% since 1990.
            (3) The United States consumes 25% of the world's oil 
        supply, the largest share; yet it holds only 2.2 percent of the 
        world's proven oil reserves.
            (4) Numerous foreign oil companies have preliminary 
        contracts to spend billions of dollars developing Iraqi oil 
        fields. These companies originate from Algeria, Australia, 
        Britain, Canada, China, France, India, Indonesia, Italy, Japan, 
        Malaysia, Netherlands, Russia, Spain, Turkey, and Vietnam.
            (5) According to several news accounts, the Administration 
        is conferring with energy experts, industry executives, and 
        Iraqi opposition leaders on how to revive and expand Iraq's oil 
        fields after an invasion.
            (6) United States Special Forces have been on the ground 
        inside Iraq since September of 2002 to monitor the oil fields 
        and rigs.
            (7) During the first war in Iraq, oil prices rose to $41 
        per barrel, gasoline prices hit record levels, and oil 
        companies made record profits.
            (8) According to Goldman Sachs, crude oil prices could 
        reach $45 per barrel as a result of a war in Iraq. The price of 
        oil has already increased $12 per barrel in the last year to 
        $33 per barrel.

SEC. 3. 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 55--WINDFALL PROFIT ON CRUDE OIL AND PRODUCTS THEREOF

                              ``Sec. 5886. Imposition of tax.

``SEC. 5886. IMPOSITION OF TAX.

    ``(a) In General.--In addition to any other tax imposed under this 
title, there is hereby imposed an excise tax on the sale in the United 
States of any crude oil or other taxable product a tax equal to the 
applicable percentage of the windfall profit on such sale.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Taxable product.--The term `taxable product' means 
        any fuel which is a product of crude oil.
            ``(2) Windfall profit.--The term `windfall profit' means, 
        with respect to any sale, so much of the profit on such sale as 
        exceeds a reasonable profit.
            ``(3) Applicable percentage.--The term `applicable 
        percentage' means--
                    ``(A) 50 percent to the extent that the profit on 
                the sale exceeds 100 percent of the reasonable profit 
                on the sale but does not exceed 102 percent of the 
                reasonable profit on the sale,
                    ``(B) 75 percent to the extent that the profit on 
                the sale exceeds 102 percent of the reasonable profit 
                on the sale but does not exceed 105 percent of the 
                reasonable profit on the sale, and
                    ``(C) 100 percent to the extent that the profit on 
                the sale exceeds 105 percent of the reasonable profit 
                on the sale.
            ``(4) Reasonable profit.--The term `reasonable profit' 
        means the amount determined by the Reasonable Profits Board to 
        be a reasonable profit on the sale.
    ``(c) Liability for Payment of Tax.--The taxes imposed by 
subsection (a) shall be paid by the seller.
    ``(d) Application of Section.--This section shall apply during the 
period beginning on the date of the enactment of this section and 
ending on the date that the President certifies to the Congress than no 
members of the Armed Forces of the United States are in Iraq.''
    (b) Reasonable Profits Board.--
            (1) Establishment.--There is established an independent 
        board to be known as the ``Reasonable Profits Board'' 
        (hereafter in this subsection referred to as the ``Board'').
            (2) Duties.--The Board shall make reasonable profit 
        determinations for purposes of applying section 5886 of the 
        Internal Revenue Code of 1986 (relating to windfall profit on 
        crude oil, natural gas, and products thereof).
            (3) Advisory committee.--The Board shall be considered an 
        advisory committee within the meaning of the Federal Advisory 
        Committee Act (5 U.S.C. App.).
            (4) Appointment.--
                    (A) Members.--The Board shall be composed of 3 
                members appointed by the President of the United 
                States.
                    (B) Term.--Members of the Board shall be appointed 
                for a term of 3 years.
                    (C) Background.--The members shall have no 
                financial interests in any of the businesses for which 
                reasonable profits are determined by the Board.
            (5) Pay and travel expenses.--
                    (A) Pay.--Notwithstanding section 7 of the Federal 
                Advisory Committee Act (5 U.S.C. App.), members of the 
                Board shall be paid at a rate equal to the daily 
                equivalent of the minimum annual rate of basic pay for 
                level IV of the Executive Schedule under section 5315 
                of title 5, United States Code, for each day (including 
                travel time) during which the member is engaged in the 
                actual performance of duties vested in the Board.
                    (B) Travel expenses.--Members shall receive travel 
                expenses, including per diem in lieu of subsistence, in 
                accordance with section 5702 and 5703 of title 5, 
                United States Code.
            (6) Director of staff.--
                    (A) Qualifications.--The Board shall appoint a 
                Director who has no financial interests in any of the 
                businesses for which reasonable profits are determined 
                by the Board.
                    (B) Pay.--Notwithstanding section 7 of the Federal 
                Advisory Committee Act (5 U.S.C. App.), the Director 
                shall be paid at the rate of basic pay payable for 
                level IV of the Executive Schedule under section 5315 
                of title 5, United States Code.
            (7) Staff.--
                    (A) Additional personnel.--The Director, with the 
                approval of the Board, may appoint and fix the pay of 
                additional personnel.
                    (B) Appointments.--The Director may make such 
                appointments without regard to the provisions of title 
                5, United States Code, governing appointments in the 
                competitive service, and any personnel so appointed may 
                be paid without regard to the provisions of chapter 51 
                and subchapter III of chapter 53 of that title relating 
                to classification and General Schedule pay rates.
                    (C) Detailees.--Upon the request of the Director, 
                the head of any Federal department or agency may detail 
                any of the personnel of that department or agency to 
                the Board to assist the Board in accordance with an 
                agreement entered into with the Board.
                    (D) Assistance.--The Comptroller General of the 
                United States may provide assistance, including the 
                detailing of employees, to the Board in accordance with 
                an agreement entered into with the Board.
            (8) Other authority.--
                    (A) Experts and consultants.--The Board may procure 
                by contract, to the extent funds are available, the 
                temporary or intermittent services of experts or 
                consultants pursuant to section 3109 of title 5, United 
                States Code.
                    (B) Leasing.--The Board may lease space and acquire 
                personal property to the extent that funds are 
                available.
            (9) Funding.--There are authorized to be appropriated such 
        funds as are necessary to carry out this subsection.
    (c) Clerical Amendment.--The table of chapters for subtitle E of 
such Code is amended by adding at the end the following new item:

                              ``Chapter 55. Windfall profit on crude 
                                        oil and refined petroleum 
                                        products.''
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.