II 

110TH CONGRESS 

2D SESSION S. 3561 

To amend the Internal Revenue Code of 1986 to provide a refundable credit 

against income tax to assist individuals with high residential energy 

costs, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 24 (legislative day, SEPTEMBER 17), 2008 

Mrs. CLINTON introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a refundable credit against income tax to assist individuals with high residential energy 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 ‘‘Home Energy Afford5 ability Tax Relief Act of 2008’’ or the ‘‘HEATR Act of 

6 2008’’. 


wwoods2 on PRODPC68 with BILLS
2 

•S 3561 IS

1 SEC. 2. REFUNDABLE CREDIT FOR RESIDENTIAL ENERGY 

2 COSTS. 

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

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

5 application) is amended by adding at the end the following 

6 new section: 

7 ‘‘SEC. 6431. REFUNDABLE CREDIT FOR RESIDENTIAL EN8 ERGY COSTS. 

9 ‘‘(a) GENERAL RULE.—In the case of an individual, 

10 there shall be allowed as a credit against the tax imposed 

11 by this subtitle for the taxable year an amount equal to 

12 the lesser of— 

13 ‘‘(1) 33 percent of the amount of the taxpayer’s 

14 residential energy costs for such taxable year, or 

15 ‘‘(2) $500. 

16 ‘‘(b) INCOME LIMITATION.— 

17 ‘‘(1) IN GENERAL.—The amount allowable as a 

18 credit under subsection (a) for any taxable year shall 

19 be reduced (but not below zero) by an amount which 

20 bears the same ratio to the amount so allowable (de21 termined without regard to this paragraph) as— 

22 ‘‘(A) the amount (if any) by which the tax23 payer’s adjusted gross income exceeds $50,000 

24 (twice such amount in the case of a joint re25 turn), bears to 


wwoods2 on PRODPC68 with BILLS
3 

•S 3561 IS

1 ‘‘(B) $10,000 (twice such amount in the 

2 case of a joint return). 

3 ‘‘(2) DETERMINATION OF ADJUSTED GROSS IN4 COME.—For purposes of paragraph (1), adjusted 

5 gross income shall be determined without regard to 

6 sections 911, 931, and 933. 

7 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur8 poses of this section— 

9 ‘‘(1) RESIDENTIAL ENERGY COSTS.—The term 

10 ‘residential energy costs’ means the amount paid or 

11 incurred by the taxpayer during the taxable year— 

12 ‘‘(A) to any utility for electricity or natural 

13 gas used in the principal residence of the tax14 payer during the heating season, and 

15 ‘‘(B) for any qualified fuel for use in the 

16 principal residence of the taxpayer but only if 

17 such fuel is the primary fuel for heating such 

18 residence. 

19 ‘‘(2) PRINCIPAL RESIDENCE.— 

20 ‘‘(A) IN GENERAL.—The term ‘principal 

21 residence’ has the meaning given to such term 

22 by section 121; except that no ownership re23 quirement shall be imposed. 

24 ‘‘(B) SPECIAL RULES.—Such term shall 

25 not include— 


wwoods2 on PRODPC68 with BILLS
4 

•S 3561 IS

1 ‘‘(i) any residence located outside the 

2 United States, and 

3 ‘‘(ii) any residence not used as the 

4 taxpayer’s principal place of abode 

5 throughout the heating season. 

6 ‘‘(3) HEATING SEASON.—The term ‘heating 

7 season’ means October, November, December, Janu8 ary, February, and March. 

9 ‘‘(4) QUALIFIED FUEL.—The term ‘qualified 

10 fuel’ includes propane, heating oil, kerosene, wood, 

11 and wood pellets. 

12 ‘‘(d) OTHER SPECIAL RULES.— 

13 ‘‘(1) INDIVIDUALS PAYING ON LEVEL PAYMENT

14 BASIS.—Amounts paid for natural gas under a level 

15 payment plan for any period shall be treated as paid 

16 for natural gas used during the portion (if any) of 

17 the heating season during such period to the extent 

18 of the amount charged for natural gas used during 

19 such portion of the heating season. A similar rule 

20 shall apply to electricity and any qualified fuel. 

21 ‘‘(2) HOMEOWNERS ASSOCIATIONS, ETC.—The 

22 application of this section to homeowners associa23 tions (as defined in section 528(c)(1)) or members 

24 of such associations, and tenant-stockholders in co25 operative housing corporations (as defined in section 


wwoods2 on PRODPC68 with BILLS
5 

•S 3561 IS

1 216), shall be allowed by allocation, apportionment, 

2 or otherwise, to the individuals paying, directly or 

3 indirectly, for the residential energy cost so incurred. 

4 ‘‘(3) DOLLAR AMOUNT IN CASE OF JOINT OCCU5 PANCY.—In the case of a dwelling unit which is the 

6 principal residence by 2 or more individuals, the dol7 lar limitation under subsection (a)(2) shall be allo8 cated among such individuals under regulations pre9 scribed by the Secretary. 

10 ‘‘(4) TREATMENT AS REFUNDABLE CREDIT.— 

11 For purposes of this title, the credit allowed by this 

12 section shall be treated as a credit allowed under 

13 subpart C of part IV of subchapter A of chapter 1 

14 (relating to refundable credits). 

15 ‘‘(e) INFLATION ADJUSTMENT.— 

16 ‘‘(1) IN GENERAL.—In the case of any taxable 

17 year beginning in 2009, each of the dollar amounts 

18 contained in subsections (a)(2) and (b)(1)(A) shall 

19 be increased by an amount equal to— 

20 ‘‘(A) such dollar amount, multiplied by 

21 ‘‘(B) in the case of— 

22 ‘‘(i) the dollar amount contained in 

23 subsection (a)(2), the fuel price inflation 

24 adjustment for 2009, and 


wwoods2 on PRODPC68 with BILLS
6 

•S 3561 IS

1 ‘‘(ii) the dollar amount contained in 

2 subsection (b)(1)(A), the cost-of-living ad3 justment determined under section 1(f)(3) 

4 for 2009 by substituting ‘calendar year 

5 2007’ for ‘calendar year 1992’ in subpara6 graph (B) thereof. 

7 ‘‘(2) FUEL PRICE INFLATION ADJUSTMENT.— 

8 For purposes of paragraph (1)(B)(i)— 

9 ‘‘(A) IN GENERAL.—The fuel price infla10 tion adjustment for 2009 is the percentage (if 

11 any) by which— 

12 ‘‘(i) the CPI fuel component for Octo13 ber of 2008, exceeds 

14 ‘‘(ii) the CPI fuel component for Oc15 tober of 2007. 

16 ‘‘(B) CPI FUEL COMPONENT.—The term 

17 ‘CPI fuel component’ means the fuel component 

18 of the Consumer Price Index for All Urban 

19 Consumers published by the Department of 

20 Labor. 

21 ‘‘(3) ROUNDING.— 

22 ‘‘(A) CREDIT AMOUNT.— 

23 ‘‘(i) CREDIT AMOUNT.—If the dollar 

24 amount in subsection (a)(2) (after being 

25 increased under paragraph (1)), is not a 


wwoods2 on PRODPC68 with BILLS
7 

•S 3561 IS

1 multiple of $10, such dollar amount shall 

2 be rounded to the nearest multiple of $10. 

3 ‘‘(ii) INCOME THRESHOLD.—If the 

4 dollar amount in subsection (b)(1)(A) 

5 (after being increased under paragraph 

6 (1)), is not a multiple of $50, such dollar 

7 amount shall be rounded to the next lowest 

8 multiple of $50. 

9 ‘‘(f) APPLICATION OF SECTION.—This section shall 

10 apply to residential energy costs paid or incurred after the 

11 date of the enactment of this section, in taxable years end12 ing after such date, and before January 1, 2010.’’. 

13 (b) CONFORMING AMENDMENTS.— 

14 (1) Paragraph (2) of section 1324(b) of title 

15 31, United States Code, is amended by striking ‘‘or 

16 6428 or’’ and inserting ‘‘, 6428, 6431, or’’. 

17 (2) The table of sections for subchapter B of 

18 chapter 65 of such Code is amended by adding at 

19 the end the following new item: 

‘‘Sec. 6431. Refundable credit for residential energy costs.’’. 

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

21 this section shall apply to taxable years ending after the 

22 date of the enactment of this Act. 


wwoods2 on PRODPC68 with BILLS
8 

•S 3561 IS

1 SEC. 3. ELIMINATION OF DEDUCTION FOR INTANGIBLE 

2 DRILLING AND DEVELOPMENT COSTS FOR 

3 MAJOR OIL COMPANIES. 

4 (a) IN GENERAL.—Section 263(c) of the Internal 

5 Revenue Code of 1986 is amended by adding at the end 

6 the following new sentences: ‘‘This subsection shall not 

7 apply during any taxable year with respect to an applica8 ble taxpayer (as defined in section 901(m)(2)) if during 

9 the preceding taxable year for the production of oil, the 

10 average price of crude oil in the United States is greater 

11 than $34.71 per barrel, and for the production of natural 

12 gas, the average wellhead price of natural gas in the 

13 United States is greater than $4.34 per 1,000 cubic feet. 

14 For purposes of the preceding sentence, the Secretary 

15 shall determine average prices, taking into consideration 

16 the most recent data reported by the Energy Information 

17 Administration. For taxable years beginning after Decem18 ber 31, 2008, each dollar amount specified in this sub19 section shall be adjusted to reflect changes for the 12- 

20 month period ending the preceding September 30 in the 

21 Consumer Price Index for All Urban Consumers published 

22 by the Bureau of Labor Statistics of the Department of 

23 Labor.’’ 

24 (b) EFFECTIVE DATE.—The amendment made by 

25 this section shall apply to taxable years beginning after 

26 the date of the enactment of this Act. 


wwoods2 on PRODPC68 with BILLS
9 

•S 3561 IS

1 SEC. 4. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 

2 APPLICABLE TO MAJOR OIL COMPANIES 

3 WHICH ARE DUAL CAPACITY TAXPAYERS. 

4 (a) IN GENERAL.—Section 901 of the Internal Rev5 enue Code of 1986 (relating to credit for taxes of foreign 

6 countries and of possessions of the United States) is 

7 amended by redesignating subsection (m) as (n) and by 

8 inserting after subsection (l) the following new subsection: 

9 ‘‘(m) SPECIAL RULES RELATING TO MAJOR OIL

10 COMPANIES WHICH ARE DUAL CAPACITY TAXPAYERS.— 

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

12 other provision of this chapter, any amount paid or 

13 accrued by a dual capacity taxpayer which is an ap14 plicable taxpayer (as defined in section 5896(b)) to 

15 a foreign country or possession of the United States 

16 for any period shall not be considered a tax— 

17 ‘‘(A) if, for such period, the foreign coun18 try or possession does not impose a generally 

19 applicable income tax, or 

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

21 the amount (determined in accordance with reg22 ulations) which— 

23 ‘‘(i) is paid by such dual capacity tax24 payer pursuant to the generally applicable 

25 income tax imposed by the country or pos26 session, or 


wwoods2 on PRODPC68 with BILLS
10 

•S 3561 IS

1 ‘‘(ii) would be paid if the generally ap2 plicable income tax imposed by the country 

3 or possession were applicable to such dual 

4 capacity taxpayer. 

5 Nothing in this paragraph shall be construed to 

6 imply the proper treatment of any such amount 

7 not in excess of the amount determined under 

8 subparagraph (B). 

9 ‘‘(2) APPLICABLE TAXPAYER.—For purposes of 

10 this subsection, the term ‘applicable taxpayer’ 

11 means, with respect to operations in the United 

12 States— 

13 ‘‘(A) any integrated oil company (as de14 fined in section 291(b)(4)), and 

15 ‘‘(B) any other producer or refiner of 

16 crude oil with gross receipts from the sale of 

17 such crude oil or refined oil products for the 

18 taxable year exceeding $100,000,000. 

19 ‘‘(3) DUAL CAPACITY TAXPAYER.—For pur20 poses of this subsection, the term ‘dual capacity tax21 payer’ means, with respect to any foreign country or 

22 possession of the United States, a person who— 

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

24 possession, and 


wwoods2 on PRODPC68 with BILLS
11 

•S 3561 IS

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

2 indirectly a specific economic benefit (as deter3 mined in accordance with regulations) from 

4 such country or possession. 

5 ‘‘(4) GENERALLY APPLICABLE INCOME TAX.— 

6 For purposes of this subsection— 

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

8 applicable income tax’ means an income tax (or 

9 a series of income taxes) which is generally im10 posed under the laws of a foreign country or 

11 possession on income derived from the conduct 

12 of a trade or business within such country or 

13 possession. 

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

15 include a tax unless it has substantial applica16 tion, by its terms and in practice, to— 

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

18 taxpayers, and 

19 ‘‘(ii) persons who are citizens or resi20 dents of the foreign country or posses21 sion.’’. 

22 (b) EFFECTIVE DATE.— 

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

24 this section shall apply to taxes paid or accrued in 


wwoods2 on PRODPC68 with BILLS
12 

•S 3561 IS

1 taxable years beginning after the date of the enact2 ment of this Act. 

3 (2) CONTRARY TREATY OBLIGATIONS

4 UPHELD.—The amendments made by this section 

5 shall not apply to the extent contrary to any treaty 

6 obligation of the United States. 

7 SEC. 5. ELIMINATION OF ENHANCED OIL RECOVERY CRED8 IT FOR MAJOR OIL COMPANIES. 

9 (a) IN GENERAL.—Section 43 of the Internal Rev10 enue Code of 1986 is amended by adding at the end the 

11 following new subsection: 

12 ‘‘(f) NONAPPLICATION OF SECTION.—This section 

13 shall not apply during any taxable year with respect to 

14 an applicable taxpayer (as defined in section 901(m)(2)) 

15 if during the preceding taxable year for the production of 

16 oil, the average price of crude oil in the United States is 

17 greater than $34.71 per barrel. For purposes of the pre18 ceding sentence, the Secretary shall determine average 

19 prices, taking into consideration the most recent data re20 ported by the Energy Information Administration. For 

21 taxable years beginning after December 31, 2008, the dol22 lar amount specified in this paragraph shall be adjusted 

23 to reflect changes for the 12-month period ending the pre24 ceding September 30 in the Consumer Price Index for All 


wwoods2 on PRODPC68 with BILLS
13 

•S 3561 IS

1 Urban Consumers published by the Bureau of Labor Sta2 tistics of the Department of Labor.’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 this section shall apply to taxable years beginning after 

5 the date of the enactment of this Act. 

Æ 


wwoods2 on PRODPC68 with BILLS