I

106TH CONGRESS

2D SESSION H. R. 5531

To amend the Internal Revenue Code of 1986 to impose a windfall profit

tax on electricity, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 24, 2000

Mr. KUCINICH (for himself and Mr. FILNER) introduced the following bill;

which was referred to the Committee on Ways and Means, and in addition to the Committee on Commerce, 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 windfall profit tax on electricity, 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 ‘‘Electricity Price Spike

5 Act of 2000’’.

6 SEC. 2. WINDFALL PROFITS TAX.

7 (a) IN GENERAL.—Subtitle E of the Internal Rev8 enue Code of 1986 (relating to alcohol, tobacco, and cer-
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1 tain other excise taxes) is amended by adding at the end

2 thereof the following new chapter:

3 ‘‘CHAPTER 55—WINDFALL PROFIT ON

4 ELECTRICITY

‘‘Sec. 5886. Imposition of tax.

5 ‘‘SEC. 5886. IMPOSITION OF TAX.

6 ‘‘(a) IN GENERAL.—In addition to any other tax im7 posed under this title, there is hereby imposed an excise

8 tax on the sale in the United States of any electricity equal

9 to the applicable percentage of the windfall profit on such

10 sale.

11 ‘‘(b) DEFINITIONS.—For purposes of this section—

12 ‘‘(1) WINDFALL PROFIT.—The term ‘windfall

13 profit’ means, with respect to any sale, so much of

14 the profit on such sale as exceeds a reasonable prof15 it.

16 ‘‘(2) APPLICABLE PERCENTAGE.—The term

17 ‘applicable percentage’ means—

18 ‘‘(A) 50 percent to the extent that the

19 profit on the sale exceeds 100 percent of the

20 reasonable profit on the sale but does not ex21 ceed 102 percent of the reasonable profit on the

22 sale,

23 ‘‘(B) 75 percent to the extent that the

24 profit on the sale exceeds 102 percent of the
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1 reasonable profit on the sale but does not ex2 ceed 105 percent of the reasonable profit on the

3 sale, and

4 ‘‘(C) 100 percent to the extent that the

5 profit on the sale exceeds 105 percent of the

6 reasonable profit on the sale.

7 ‘‘(4) REASONABLE PROFIT.—The term ‘reason8 able profit’ means the amount determined by the

9 Reasonable Profits Board to be a reasonable profit

10 on the sale.

11 ‘‘(c) LIABILITY FOR PAYMENT OF TAX.—The taxes

12 imposed by subsection (a) shall be paid by the seller.’’

13 (b) CLERICAL AMENDMENT.—The table of chapters

14 for subtitle E of such Code is amended by adding at the

15 end the following new item:

‘‘Chapter 55. Windfall profit on electricity.’’

16 (c) EFFECTIVE DATE.—The amendments made by

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

18 of this Act.

19 SEC. 3. CREDIT FOR ENERGY EFFICIENCY IMPROVEMENTS

20 TO EXISTING HOMES.

21 (a) IN GENERAL.—Subpart A of part IV of sub22 chapter A of chapter 1 of the Internal Revenue Code of

23 1986 (relating to nonrefundable personal credits) is

24 amended by inserting after section 25A the following new

25 section:
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1 ‘‘SEC. 25B. ENERGY EFFICIENCY IMPROVEMENTS TO EXIST2 ING HOMES.

3 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in4 dividual, there shall be allowed as a credit against the tax

5 imposed by this chapter for the taxable year an amount

6 equal to 20 percent of the amount paid or incurred by

7 the taxpayer for qualified energy efficiency improvements

8 installed during such taxable year.

9 ‘‘(b) LIMITATIONS.—

10 ‘‘(1) MAXIMUM CREDIT.—The credit allowed by

11 this section with respect to a dwelling shall not ex12 ceed $2,000.

13 ‘‘(2) PRIOR CREDIT AMOUNTS FOR TAXPAYER

14 ON SAME DWELLING TAKEN INTO ACCOUNT.—If a

15 credit was allowed to the taxpayer under subsection

16 (a) with respect to a dwelling in 1 or more prior tax17 able years, the amount of the credit otherwise allow18 able for the taxable year with respect to that dwell19 ing shall not exceed the amount of $2,000 reduced

20 by the sum of the credits allowed under subsection

21 (a) to the taxpayer with respect to the dwelling for

22 all prior taxable years.

23 ‘‘(c) CARRYFORWARD OF UNUSED CREDIT.—If the

24 credit allowable under subsection (a) exceeds the limita25 tion imposed by section 26(a) for such taxable year re26 duced by the sum of the credits allowable under subpart
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1 A of part IV of subchapter A (other than this section),

2 such excess shall be carried to the succeeding taxable year

3 and added to the credit allowable under subsection (a) for

4 such taxable year.

5 ‘‘(d) QUALIFIED ENERGY EFFICIENCY IMPROVE6 MENTS.—For purposes of this section, the term ‘qualified

7 energy efficiency improvements’ means any energy effi8 cient building envelope component, and any energy effi9 cient heating, cooling, or water heating appliance, the in10 stallation of which, by itself or in combination with other

11 such components or appliances, is certified to improve the

12 annual energy performance of the existing home by at

13 least 30 percent, if—

14 ‘‘(1) such component or appliance is installed in

15 or on a dwelling—

16 ‘‘(A) located in the United States, and

17 ‘‘(B) owned and used by the taxpayer as

18 the taxpayer’s principal residence (within the

19 meaning of section 121),

20 ‘‘(2) the original use of such component or ap21 pliance commences with the taxpayer, and

22 ‘‘(3) such component or appliance reasonably

23 can be expected to remain in use for at least 5

24 years.
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1 Such certification shall be made by the contractor who in2 stalled such improvements, a local building regulatory au3 thority, or a qualified energy consultant (such as a utility

4 or an accredited home energy rating system provider).

5 ‘‘(e) SPECIAL RULES.—

6 ‘‘(1) TENANT-STOCKHOLDER IN COOPERATIVE

7 HOUSING CORPORATION.—In the case of an indi8 vidual who is a tenant-stockholder (as defined in sec9 tion 216) in a cooperative housing corporation (as

10 defined in such section), such individual shall be

11 treated as having paid his tenant-stockholder’s pro12 portionate share (as defined in section 216(b)(3)) of

13 the cost of qualified energy efficiency improvements

14 made by such corporation.

15 ‘‘(2) CONDOMINIUMS.—

16 ‘‘(A) IN GENERAL.—In the case of an indi17 vidual who is a member of a condominium man18 agement association with respect to a condo19 minium which he owns, such individual shall be

20 treated as having paid his proportionate share

21 of the cost of qualified energy efficiency im22 provements made by such association.

23 ‘‘(B) CONDOMINIUM MANAGEMENT ASSO24 CIATION.—For purposes of this paragraph, the

25 term ‘condominium management association’
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1 means an organization which meets the require2 ments of paragraph (1) of section 528(c) (other

3 than subparagraph (E) thereof) with respect to

4 a condominium project substantially all of the

5 units of which are used as residences.

6 ‘‘(f) BASIS ADJUSTMENT.—For purposes of this sub7 title, if a credit is allowed under this section for any ex8 penditure with respect to any property, the increase in the

9 basis of such property which would (but for this sub10 section) result from such expenditure shall be reduced by

11 the amount of the credit so allowed.

12 ‘‘(g) TERMINATION.—Subsection (a) shall apply to

13 qualified energy efficiency improvements installed during

14 the period beginning on January 1, 1999, and ending on

15 December 31, 2003.’’.

16 (b) CONFORMING AMENDMENTS.—

17 (1) Subsection (c) of section 23 of such Code

18 is amended by inserting ‘‘, section 25B, and section

19 1400C’’ after ‘‘other than this section’’.

20 (2) Subparagraph (C) of section 25(e)(1) of

21 such Code is amended by striking ‘‘section 23’’ and

22 inserting ‘‘sections 23, 25B, and 1400C’’.

23 (3) Subsection (d) of section 1400C of such

24 Code is amended by inserting ‘‘and section 25B’’

25 after ‘‘other than this section’’.
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1 (4) Subsection (a) of section 1016 of such Code

2 is amended by striking ‘‘and’’ at the end of para3 graph (26), by striking the period at the end of

4 paragraph (27) and inserting ‘‘; and’’, and by add5 ing at the end the following new paragraph:

6 ‘‘(28) to the extent provided in section 25B(f),

7 in the case of amounts with respect to which a credit

8 has been allowed under section 25B.’’.

9 (5) The table of sections for subpart A of part

10 IV of subchapter A of chapter 1 of such Code is

11 amended by inserting after the item relating to sec12 tion 25A the following new item:

‘‘Sec. 25B. Energy efficiency improvements to existing homes.’’.

13 (c) EFFECTIVE DATE.—The amendments made by

14 this section shall apply to taxable years ending after De15 cember 31, 1998.

16 SEC. 4. CITIZENS’ UTILITY BOARDS.

17 (a) ESTABLISHMENT.—Unless already in existence,

18 each State shall create a not-for-profit membership cor19 poration to be known as the ‘‘Citizens’ Utility Board,

20 Inc.’’ herein referred to as the State CUB. An existing

21 not-for-profit membership corporation located in a State

22 may become the State CUB provided it meets all the re23 quirements of this section.

24 (b) MEMBERSHIP.—The membership of the State

25 CUB shall consist of all residential consumers of elec-
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1 tricity 16 years of age or older who have contributed to

2 the State CUB an annual membership fee, provided, that

3 any person may resign from membership.

4 (c) DUTIES, RIGHTS, AND POWERS OF THE STATE

5 CUB.—

6 (1) DUTIES.—The State CUB shall—

7 (A) represent and promote the interests of

8 a State’s residential consumers of electricity,

9 and all actions by the State CUB under this

10 section shall be directed toward such duty;

11 (B) inform, insofar as possible, all residen12 tial consumers of electricity about the State

13 CUB, including the procedure for obtaining

14 membership in the State CUB;

15 (C) establish an annual membership fee

16 which shall be set at a level that provides suffi17 cient funding for the State CUB to effectively

18 perform its powers and duties, and is affordable

19 for as many electricity consumers as is possible,

20 but nevertheless is not less than $5; and

21 (D) have all rights and powers accorded

22 generally to, and be subject to all duties im23 posed generally upon, not-for-profit membership

24 corporations under the laws of a State.
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1 (2) RIGHTS AND POWERS.—In addition, the

2 State CUB shall have the following rights and pow3 ers:

4 (A) To solicit and accept gifts, loans,

5 grants or other aid in order to support activities

6 concerning the interests of residential con7 sumers of electricity, except that the State

8 CUB may not accept gifts, loans or other aid

9 from any person or company that generates,

10 transmits, distributes, or supplies electricity, or

11 from any director, employee or agent or mem12 ber of the immediate family of a director, em13 ployee or agent of any company that generates,

14 transmits, distributes, or supplies electricity.

15 (B) To seek tax-exempt status under State

16 and Federal law.

17 (C) To conduct, support, and assist re18 search, surveys, investigations, planning activi19 ties, conferences, demonstration projects, and

20 public information activities concerning the in21 terests of residential consumers of electricity.

22 The State CUB may accept grants, contribu23 tions, and legislative appropriations for such ac24 tivities.
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1 (D) To contract for services which cannot

2 reasonably be performed by its employees.

3 (E) To represent the interests of residen4 tial consumers of electricity before regulatory

5 agencies, legislative bodies and other public

6 bodies.

7 (F) To initiate, to intervene as a party, to

8 maintain, or to otherwise participate on behalf

9 of residential consumers of electricity in any

10 proceeding that affects the interests of residen11 tial consumers of electricity.

12 (G) To support or oppose ballot propo13 sitions concerning matters that it determines

14 may affect the interests of residential con15 sumers of electricity.

16 (3) The State CUB shall have, in addition to

17 the rights and powers enumerated in this section,

18 such other incidental rights and powers as are rea19 sonably necessary for the effective representation

20 and protection of the interests of residential con21 sumers of electricity.

22 (4) NONPOLITICAL.—The State CUB shall not

23 sponsor, endorse, or otherwise support, nor shall it

24 oppose, any political party or the candidacy of any

25 person for public office.
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1 (d) STATE-ASSISTED FUNDRAISING BY THE STATE

2 CUB.—

3 (1) IN GENERAL.—(1) The State CUB shall

4 have the authority to prepare and furnish to any

5 State agency an enclosure that the State agency

6 shall include within any mailing designated by the

7 State CUB. The State CUB shall provide the agency

8 with any such enclosure at a time reasonably in ad9 vance of the mailing. The State CUB may not re10 quire any State agency to mail an enclosure more

11 than four times in any calendar year.

12 (2) LIMITATION.—Enclosures furnished by the

13 State CUB under this section shall be limited to so14 liciting information and money from consumers and

15 explaining—

16 (A) the purpose, history, nature, activities,

17 and achievements of the State CUB;

18 (B) that the State CUB is open to mem19 bership by residential consumers;

20 (C) that the State CUB is not connected

21 to any utility company or governmental agency;

22 (D) that the State CUB is a not-for-profit

23 corporation directed by its consumer members;

24 (E) the procedure for contributing to or

25 becoming a member of the State CUB; and
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1 (F) the yearly membership fee.

2 (3) APPROVAL OF CONTENT OF ENCLOSURE.—

3 Prior to furnishing an enclosure to a State agency

4 for mailing, the State CUB shall seek and obtain the

5 approval of the appropriate State authority of the

6 content of the enclosure. The State authority shall

7 approve the enclosure if it determines that the

8 enclosure—

9 (A) is not false or misleading, and

10 (B) contains and is limited to the informa11 tion permitted by this section.

12 The State authority shall be deemed to have ap13 proved the enclosure unless it disapproves the enclo14 sure within 14 days of receipt.

15 (4) REIMBURSEMENT OF COSTS INCURRED.—

16 The State CUB shall reimburse each State agency

17 for all reasonable incremental costs incurred by the

18 State agency in complying with this section above

19 the agency’s normal mailing and handling costs, pro20 vided that—

21 (A) the State agency shall first furnish the

22 State CUB with an itemized accounting of such

23 additional costs; and

24 (B) the State CUB shall not be required to

25 reimburse the State agency for postage costs if
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1 the weight of the State CUB’s enclosure does

2 not increase the cost of the State agency mail3 ing.

4 If the State CUB’s enclosure increases the cost of

5 the State agency mailing, then it will be required to

6 reimburse the State agency for postage cost over

7 and above what the agency’s postage cost would

8 have been without the State CUB’s enclosure.

9 SEC. 5. REASONABLE PROFITS BOARD.

10 (a) ESTABLISHMENT.—There is established an inde11 pendent board to be known as the ‘‘Reasonable Profits

12 Board’’ (hereafter in this section referred to as the

13 ‘‘Board’’).

14 (b) DUTIES.—The Board shall make reasonable prof15 it determinations for purposes of applying section 5886

16 of the Internal Revenue Code of 1986 (relating to windfall

17 profit on electricity).

18 (c) ADVISORY COMMITTEE.—The Board shall be con19 sidered an advisory committee within the meaning of the

20 Federal Advisory Committee Act (5 U.S.C. App.).

21 (d) APPOINTMENT.—

22 (1) MEMBERS.—The Board shall be composed

23 of 3 members appointed by the President of the

24 United States.
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1 (2) TERM.—Members of the Board shall be ap2 pointed for a term of 3 years.

3 (3) BACKGROUND.—The members shall have no

4 financial interests in any of the businesses for which

5 reasonable profits are determined by the Board.

6 (e) PAY AND TRAVEL EXPENSES.—

7 (1) PAY.—Notwithstanding section 7 of the

8 Federal Advisory Committee Act (5 U.S.C. App.),

9 members of the Board shall be paid at a rate equal

10 to the daily equivalent of the minimum annual rate

11 of basic pay for level IV of the Executive Schedule

12 under section 5315 of title 5, United States Code,

13 for each day (including travel time) during which the

14 member is engaged in the actual performance of du15 ties vested in the Board.

16 (2) TRAVEL EXPENSES.—Members shall receive

17 travel expenses, including per diem in lieu of subsist18 ence, in accordance with section 5702 and 5703 of

19 title 5, United States Code.

20 (f) DIRECTOR OF STAFF.—

21 (1) QUALIFICATIONS.—The Board shall appoint

22 a Director who has no financial interests in any of

23 the businesses for which reasonable profits are de24 termined by the Board.
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1 (2) PAY.—Notwithstanding section 7 of the

2 Federal Advisory Committee Act (5 U.S.C. App.),

3 the Director shall be paid at the rate of basic pay

4 payable for level IV of the Executive Schedule under

5 section 5315 of title 5, United States Code.

6 (g) STAFF.—

7 (1) ADDITIONAL PERSONNEL.—The Director,

8 with the approval of the Board, may appoint and fix

9 the pay of additional personnel.

10 (2) APPOINTMENTS.—The Director may make

11 such appointments without regard to the provisions

12 of title 5, United States Code, governing appoint13 ments in the competitive service, and any personnel

14 so appointed may be paid without regard to the pro15 visions of chapter 51 and subchapter III of chapter

16 53 of that title relating to classification and General

17 Schedule pay rates.

18 (3) DETAILEES.—Upon the request of the Di19 rector, the head of any Federal department or agen20 cy may detail any of the personnel of that depart21 ment or agency to the Board to assist the Board in

22 accordance with an agreement entered into with the

23 Board.

24 (4) ASSISTANCE.—The Comptroller General of

25 the United States may provide assistance, including
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1 the detailing of employees, to the Board in accord2 ance with an agreement entered into with the Board.

3 (h) OTHER AUTHORITY.—

4 (1) EXPERTS AND CONSULTANTS.—The Board

5 may procure by contract, to the extent funds are

6 available, the temporary or intermittent services of

7 experts or consultants pursuant to section 3109 of

8 title 5, United States Code.

9 (2) LEASING.—The Board may lease space and

10 acquire personal property to the extent that funds

11 are available.

12 (i) FUNDING.—There are authorized to be appro13 priated such funds as are necessary to carry out this sec14 tion.

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