I
106TH CONGRESS
1ST SESSION
H. R. 1204
To amend the Internal Revenue Code of 1986 to impose a tax on the
importation of crude oil and petroleum products.
IN THE HOUSE OF REPRESENTATIVES
MARCH 18, 1999
Mr. STENHOLM (for himself and Mr. WATKINS) introduced the following bill;
which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to impose
a tax on the importation of crude oil and petroleum products.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Environmental Equali-
zation and Energy Security Act of 1999’’.
SEC. 2. EXCISE TAX ON IMPORTED CRUDE OIL AND PETRO-
LEUM PRODUCTS.
(a) IN GENERAL.—Subtitle E of the Internal Rev-
enue Code of 1986 (relating to alcohol, tobacco, and cer-
‘‘(2) PETROLEUM PRODUCTS.—The taxes im-
posed by paragraph (1)(B) and (2)(B) of subsection
(a) shall be imposed at the rate equal to the applica-
ble environmental equalization fee per barrel of pe-
troleum products.
‘‘(3) FRACTIONAL PARTS OF BARRELS.—In the
case of a fraction of a barrel, the taxes imposed by
subsection (a) shall be the same fraction of the
amount of such tax imposed on the whole barrel.
‘‘(c) LIABILITY FOR PAYMENT OF TAX.—
‘‘(1) SALES.—The taxes imposed by subsection
(a)(1) shall be paid by the first person who sells the
crude oil or petroleum product within the United
States.
‘‘(2) USE.—The taxes imposed by subsection
(a)(2) shall be paid by the person who uses the
crude oil or petroleum product.
‘‘(d) EXEMPTIONS.—
‘‘(1) EXPORTS.—
‘‘(A) IN
GENERAL.—Under regulations
prescribed by the Secretary, no tax shall be im-
posed under this chapter on the sale of crude
oil or petroleum products for export or for re-
sale by the purchaser to a second purchaser for
export.
‘‘(B) PROOF
OF
EXPORT.—Where any
crude oil or petroleum product has been sold
free of tax under subparagraph (A), such sub-
paragraph shall cease to apply with respect to
the sale of such crude oil or petroleum product
unless, within the 6-month period which begins
on the date of the sale, the seller receives proof
that the crude oil or petroleum product has
been exported.
‘‘(2) PRODUCTS
IN
THE
NATIONAL
INTER-
EST.—No tax shall be imposed under this chapter on
the sale or use of any petroleum product during any
period if the President determines that it is in the
national interest not to impose the tax under this
chapter on such product during such period.
‘‘(3) PRODUCTS FROM CANADA.—No tax shall
be imposed by this chapter on the sale or use of—
‘‘(A) any crude oil produced from a well lo-
cated in Canada, or
‘‘(B) any petroleum product produced from
crude oil described in subparagraph (A).
‘‘SEC. 5892. DETERMINATION OF ENVIRONMENTAL EQUALI-
ZATION FEE.
‘‘(a) ENVIRONMENTAL EQUALIZATION FEE.—For
purposes of this chapter, the environmental equalization
fee is the amount determined by the Secretary of Energy
under subsection (b).
‘‘(b) DETERMINATION BY SECRETARY OF ENERGY.—
The Secretary of Energy, after conducting a study and
in consultation with the Administrator of the Environ-
mental Protection Agency and representatives from the
domestic petroleum industry, shall from time to time de-
termine the amount of the environmental equalization fee.
The amount shall be the Secretary’s estimate—
‘‘(1) in the case of crude oil, of the average
amount per barrel of the price of domestic crude oil
which is attributable to costs of complying with envi-
ronmental laws and regulations of the United States;
and
‘‘(2) in the case of petroleum products, of the
average amount per barrel of the price of domestic
petroleum products which is attributable to such
costs.
‘‘SEC. 5893. DEFINITIONS.
‘‘For purposes of this chapter—
‘‘(1) CRUDE OIL.—The term ‘crude oil’ means
crude oil (as defined in section 4612(a)(1)) other
than crude oil produced from a well located in the
United States (as defined in section 4612(a)(4)).
‘‘(2) DOMESTIC CRUDE OIL.—The term ‘domes-
tic crude oil’ means crude oil produced from a well
located in the United States.
‘‘(3) BARREL.—The term ‘barrel’ means 42
United States gallons.
‘‘(4) PETROLEUM PRODUCT.—The term ‘petro-
leum product’ has the meaning given such term
under section 4612(a)(3).
‘‘(5) EXPORT.—The term ‘export’ includes ship-
ment to a possession of the United States, and the
term ‘exported’ includes shipment to a possession of
the United States.
‘‘SEC. 5894. REGISTRATION.
‘‘Every person subject to tax under section 5891
shall, before incurring any liability for tax under such sec-
tion, register with the Secretary.’’.
(b) CONFORMING AMENDMENT.—The table of chap-
ters for subtitle E of such Code is amended by adding
at the end thereof the following new item:
‘‘Chapter 55. Imported crude oil and petroleum products.’’
(c) DEDUCTIBILITY
OF
IMPORTED
CRUDE
OIL
TAX.—The first sentence of section 164(a) of such Code
(relating to deduction for taxes) is amended by inserting
after paragraph (5) the following new paragraph:
‘‘(6) The taxes imposed by section 5891 (relat-
ing to imported crude oil and petroleum products).’’
(c) EFFECTIVE DATE.—The amendments made by
this Act shall take effect on the 30th day after the date
of the enactment of this Act.
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