II 

109TH CONGRESS 

2D SESSION S. 2636 

To provide an immediate Federal income tax rebate to help taxpayers with 

higher fuel costs, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 25, 2006 

Ms. STABENOW introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To provide an immediate Federal income tax rebate to help 

taxpayers with higher fuel costs, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Oil Company 

5 Acountability Act’’. 

6 SEC. 2. ENERGY TAX REBATE. 

7 (a) IN GENERAL.—Subchapter B of chapter 65 of the 

8 Internal Revenue Code of 1986 (relating to rules of special 

9 application in the case of abatements, credits, and reVerDate Aug 31 2005 21:41 Apr 26, 2006 Jkt 049200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2636.IS S2636

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1 funds) is amended by adding at the end the following new 

2 section: 

3 ‘‘SEC. 6430. ENERGY TAX REBATE. 

4 ‘‘(a) GENERAL RULE.—Except as otherwise provided 

5 in this section, each individual shall be treated as having 

6 made a payment against the tax imposed by chapter 1 for 

7 the taxable year beginning in 2006 in an amount equal 

8 to $500. 

9 ‘‘(b) REMITTANCE OF PAYMENT.—The Secretary 

10 shall remit to each taxpayer the payment described in sub11 section (a) not later than 30 days after the date of the 

12 enactment of this section. 

13 ‘‘(c) CERTAIN PERSONS NOT ELIGIBLE.—This sec14 tion shall not apply to— 

15 ‘‘(1) any individual who did not have any ad16 justed gross income for the preceding taxable year or 

17 whose adjusted gross income for such preceding tax18 able year exceeded $120,000, 

19 ‘‘(2) any individual with respect to whom a de20 duction under section 151 is allowable to another 

21 taxpayer for the taxable year beginning in 2006, 

22 ‘‘(3) any estate or trust, or 

23 ‘‘(4) any nonresident alien individual.’’. 

24 (b) CONFORMING AMENDMENT.—Section 1324(b)(2) 

25 of title 31, United States Code, is amended by inserting 


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1 before the period ‘‘, or enacted by the Oil Company 

2 Acountability Act’’. 

3 (c) CLERICAL AMENDMENT.—The table of sections 

4 for subchapter B of chapter 65 of the Internal Revenue 

5 Code of 1986 is amended by adding at the end the fol6 lowing new item: 

‘‘Sec. 6430. Energy tax rebate.’’. 

7 (d) EFFECTIVE DATE.—The amendments made by 

8 this section shall take effect on the date of the enactment 

9 of this Act. 

10 SEC. 3. REVALUATION OF LIFO INVENTORIES OF LARGE IN11 TEGRATED OIL COMPANIES. 

12 (a) GENERAL RULE.—Notwithstanding any other 

13 provision of law, if a taxpayer is an applicable integrated 

14 oil company for its last taxable year ending in calendar 

15 year 2005, the taxpayer shall— 

16 (1) increase, effective as of the close of such 

17 taxable year, the value of each historic LIFO layer 

18 of inventories of crude oil, natural gas, or any other 

19 petroleum product (within the meaning of section 

20 4611) by the layer adjustment amount, and 

21 (2) decrease its cost of goods sold for such tax22 able year by the aggregate amount of the increases 

23 under paragraph (1). 

24 If the aggregate amount of the increases under paragraph 

25 (1) exceed the taxpayer’s cost of goods sold for such taxVerDate Aug 31 2005 21:41 Apr 26, 2006 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2636.IS S2636

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1 able year, the taxpayer’s gross income for such taxable 

2 year shall be increased by the amount of such excess. 

3 (b) LAYER ADJUSTMENT AMOUNT.—For purposes of 

4 this section— 

5 (1) IN GENERAL.—The term ‘‘layer adjustment 

6 amount’’ means, with respect to any historic LIFO 

7 layer, the product of— 

8 (A) $18.75, and 

9 (B) the number of barrels of crude oil (or 

10 in the case of natural gas or other petroleum 

11 products, the number of barrel-of-oil equiva12 lents) represented by the layer. 

13 (2) BARREL-OF-OIL EQUIVALENT.—The term 

14 ‘‘barrel-of-oil equivalent’’ has the meaning given 

15 such term by section 29(d)(5) (as in effect before its 

16 redesignation by the Energy Tax Incentives Act of 

17 2005). 

18 (c) APPLICATION OF REQUIREMENT.— 

19 (1) NO CHANGE IN METHOD OF ACCOUNTING.— 

20 Any adjustment required by this section shall not be 

21 treated as a change in method of accounting. 

22 (2) UNDERPAYMENTS OF ESTIMATED TAX.—No 

23 addition to the tax shall be made under section 6655 

24 of the Internal Revenue Code of 1986 (relating to 

25 failure by corporation to pay estimated tax) with reVerDate Aug 31 2005 21:41 Apr 26, 2006 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2636.IS S2636

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1 spect to any underpayment of an installment re2 quired to be paid with respect to the taxable year 

3 described in subsection (a) to the extent such under4 payment was created or increased by this section. 

5 (d) APPLICABLE INTEGRATED OIL COMPANY.—For 

6 purposes of this section, the term ‘‘applicable integrated 

7 oil company’’ means an integrated oil company (as defined 

8 in section 291(b)(4) of the Internal Revenue Code of 

9 1986) which has an average daily worldwide production 

10 of crude oil of at least 500,000 barrels for the taxable 

11 year and which had gross receipts in excess of 

12 $1,000,000,000 for its last taxable year ending during cal13 endar year 2005. For purposes of this subsection all per14 sons treated as a single employer under subsections (a) 

15 and (b) of section 52 of the Internal Revenue Code of 

16 1986 shall be treated as 1 person and, in the case of a 

17 short taxable year, the rule under section 448(c)(3)(B) 

18 shall apply. 

19 SEC. 4. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 

20 APPLICABLE TO LARGE INTEGRATED OIL 

21 COMPANIES WHICH ARE DUAL CAPACITY 

22 TAXPAYERS. 

23 (a) IN GENERAL.—Section 901 of the Internal Rev24 enue Code of 1986 (relating to credit for taxes of foreign 

25 countries and of possessions of the United States) is 


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1 amended by redesignating subsection (m) as subsection 

2 (n) and by inserting after subsection (l) the following new 

3 subsection: 

4 ‘‘(m) SPECIAL RULES RELATING TO LARGE INTE5 GRATED OIL COMPANIES WHICH ARE DUAL CAPACITY

6 TAXPAYERS.— 

7 ‘‘(1) GENERAL RULE.—Notwithstanding any 

8 other provision of this chapter, any amount paid or 

9 accrued by a dual capacity taxpayer which is a large 

10 integrated oil company to a foreign country or pos11 session of the United States for any period shall not 

12 be considered a tax— 

13 ‘‘(A) if, for such period, the foreign coun14 try or possession does not impose a generally 

15 applicable income tax, or 

16 ‘‘(B) to the extent such amount exceeds 

17 the amount (determined in accordance with reg18 ulations) which— 

19 ‘‘(i) is paid by such dual capacity tax20 payer pursuant to the generally applicable 

21 income tax imposed by the country or pos22 session, or 

23 ‘‘(ii) would be paid if the generally ap24 plicable income tax imposed by the country 


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1 or possession were applicable to such dual 

2 capacity taxpayer. 

3 Nothing in this paragraph shall be construed to 

4 imply the proper treatment of any such amount 

5 not in excess of the amount determined under 

6 subparagraph (B). 

7 ‘‘(2) DUAL CAPACITY TAXPAYER.—For pur8 poses of this subsection, the term ‘dual capacity tax9 payer’ means, with respect to any foreign country or 

10 possession of the United States, a person who— 

11 ‘‘(A) is subject to a levy of such country or 

12 possession, and 

13 ‘‘(B) receives (or will receive) directly or 

14 indirectly a specific economic benefit (as deter15 mined in accordance with regulations) from 

16 such country or possession. 

17 ‘‘(3) GENERALLY APPLICABLE INCOME TAX.— 

18 For purposes of this subsection— 

19 ‘‘(A) IN GENERAL.—The term ‘generally 

20 applicable income tax’ means an income tax (or 

21 a series of income taxes) which is generally im22 posed under the laws of a foreign country or 

23 possession on income derived from the conduct 

24 of a trade or business within such country or 

25 possession. 


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1 ‘‘(B) EXCEPTIONS.—Such term shall not 

2 include a tax unless it has substantial applica3 tion, by its terms and in practice, to— 

4 ‘‘(i) persons who are not dual capacity 

5 taxpayers, and 

6 ‘‘(ii) persons who are citizens or resi7 dents of the foreign country or possession. 

8 ‘‘(4) LARGE INTEGRATED OIL COMPANY.—For 

9 purposes of this subsection, the term ‘large inte10 grated oil company’ means, with respect to any tax11 able year, an integrated oil company (as defined in 

12 section 291(b)(4)) which— 

13 ‘‘(A) had gross receipts in excess of 

14 $1,000,000,000 for such taxable year, and 

15 ‘‘(B) has an average daily worldwide pro16 duction of crude oil of at least 500,000 barrels 

17 for such taxable year.’’ 

18 (b) EFFECTIVE DATE.— 

19 (1) IN GENERAL.—The amendments made by 

20 this section shall apply to taxes paid or accrued in 

21 taxable years beginning after the date of the enact22 ment of this Act. 

23 (2) CONTRARY TREATY OBLIGATIONS

24 UPHELD.—The amendments made by this section 


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1 shall not apply to the extent contrary to any treaty 

2 obligation of the United States. 

Æ 


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