I 
109TH CONGRESS 
1ST SESSION H. R. 4248 
To amend the Internal Revenue Code of 1986 to impose a temporary windfall 
profit tax on crude oil and to use the proceeds to carry out the Low- 
Income Home Energy Assistance Act of 1981. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 8, 2005 
Mr. RUSH introduced the following bill; which was referred to the Committee 
on Ways and Means, and in addition to the Committees on Energy and 
Commerce and Education and the Workforce, for a period to be subse-
quently 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 temporary windfall profit tax on crude oil and to 
use the proceeds to carry out the Low-Income Home 
Energy Assistance Act of 1981. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. WINDFALL PROFITS TAX. 
(a) IN GENERAL.—Subtitle E of the Internal Rev-
enue Code of 1986 (relating to alcohol, tobacco, and cer-
tain 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 invest-
ment. 
‘‘Sec. 5898. Special rules and definitions. 
‘‘SEC. 5896. IMPOSITION OF TAX. 
‘‘(a) IN GENERAL.—In addition to any other tax im-
posed under this title, there is hereby imposed on any inte-
grated 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 im-
posed 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; AD-
JUSTED BASE PRICE; QUALIFIED INVEST-
MENT. 
‘‘(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 chap-
ter— 
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided 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 re-
moval 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 be-
fore it is sold, the removal price shall be the con-
structive 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 be-
gins, and 
‘‘(B) the removal price shall be the con-
structive 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 chap-
ter, 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 cal-
endar year in which the taxable crude oil is re-
moved from the property. 
The amount determined under the preceding sen-
tence shall be rounded to the nearest cent. 
‘‘(2) INFLATION ADJUSTMENT.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the inflation adjustment for any cal-
endar 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 invest-
ment’ means any amount paid or incurred with re-
spect to— 
‘‘(A) section 263(c) costs, 
‘‘(B) qualified refinery property (as defined 
in section 179C(c) and determined without re-
gard 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 al-
cohol used as a fuel (within the meaning of sec-
tion 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 in-
curred by the taxpayer which (by reason of an elec-
tion under section 263(c)) may be deducted as ex-
penses for purposes of this title (other than this 
paragraph). Such term shall not include costs in-
curred 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 Sec-
retary 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 gas-
oline. 
‘‘(B) EXCLUSION OF NEWLY DISCOVERED 
OIL.—Such term shall not include any oil pro-
duced from a well drilled after the date of the 
enactment of this chapter, 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 deter-
mining 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 Rev-
enue 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 provi-
sions contained in chapter 56 of such Code (or in so 
much of subtitle F of such Code as relates to such 
chapter 56). 
SEC. 2. USE OF PROCEEDS FROM WINDFALL PROFITS ON 
CRUDE OIL FOR LIHEAP. 
There are hereby appropriated amounts equivalent to 
the taxes received in the Treasury under chapter 56 of 
the Internal Revenue Code of 1986, which amounts shall 
be available only to carry out the Low-Income Home En-
ergy Assistance Act of 1981. 
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