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.

Summary: Windfall Profits Rebate Act of 2005 - Amends the Internal Revenue Code to: (1) impose an excise tax on oil companies for a percentage of the windfall profit from all barrels of taxable crude oil; (2) allow a tax deduction for the payment of any windfall profit tax; and (3) allow an income tax rebate for all taxpayers based upon windfall tax revenues, as determined by the Secretary of the Treasury. Defines "windfall profit" as the excess of the removal (sales) price of a barrel of taxable crude oil over the adjusted base price ($40 per barrel adjusted for inflation) of such barrel.

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.