I 
108TH CONGRESS 
1ST SESSION 
H. R. 585
To amend the Internal Revenue Code of 1986 to impose a windfall profit 
tax on crude oil and products thereof. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 5, 2003
Mr. KUCINICH 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 windfall profit tax on crude oil and products thereof.
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 ‘‘National Defense Oil 
Equity Act of 2003’’. 
SEC. 2. FINDINGS. 
The Congress finds as follows: 
(1) Iraq has 112 billion barrels of proven oil re-
serves along with roughly 220 billion barrels of prob-
able resources. Only Saudi Arabia’s oil reserves are
larger. By far, the majority of petroleum reserves 
(67%) are found in the Middle East. 
(2) The United States has 21 billion barrels of 
proven oil reserves, twelfth highest in the world. 
United States proven oil reserves have declined by 
almost 20% since 1990. 
(3) The United States consumes 25% of the 
world’s oil supply, the largest share; yet it holds only 
2.2 percent of the world’s proven oil reserves. 
(4) Numerous foreign oil companies have pre-
liminary contracts to spend billions of dollars devel-
oping Iraqi oil fields. These companies originate 
from Algeria, Australia, Britain, Canada, China, 
France, India, Indonesia, Italy, Japan, Malaysia, 
Netherlands, Russia, Spain, Turkey, and Vietnam. 
(5) According to several news accounts, the Ad-
ministration is conferring with energy experts, in-
dustry executives, and Iraqi opposition leaders on 
how to revive and expand Iraq’s oil fields after an 
invasion. 
(6) United States Special Forces have been on 
the ground inside Iraq since September of 2002 to 
monitor the oil fields and rigs.
(7) During the first war in Iraq, oil prices rose 
to $41 per barrel, gasoline prices hit record levels, 
and oil companies made record profits. 
(8) According to Goldman Sachs, crude oil 
prices could reach $45 per barrel as a result of a 
war in Iraq. The price of oil has already increased 
$12 per barrel in the last year to $33 per barrel. 
SEC. 3. 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 55—WINDFALL PROFIT ON 
CRUDE OIL AND PRODUCTS THEREOF
‘‘Sec. 5886. Imposition of tax.
‘‘SEC. 5886. IMPOSITION OF TAX. 
‘‘(a) IN GENERAL.—In addition to any other tax im-
posed under this title, there is hereby imposed an excise 
tax on the sale in the United States of any crude oil or 
other taxable product a tax equal to the applicable per-
centage of the windfall profit on such sale. 
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) TAXABLE
PRODUCT.—The term ‘taxable 
product’ means any fuel which is a product of crude 
oil.
‘‘(2) WINDFALL PROFIT.—The term ‘windfall 
profit’ means, with respect to any sale, so much of 
the profit on such sale as exceeds a reasonable prof-
it. 
‘‘(3) APPLICABLE
PERCENTAGE.—The term 
‘applicable percentage’ means—
‘‘(A) 50 percent to the extent that the 
profit on the sale exceeds 100 percent of the 
reasonable profit on the sale but does not ex-
ceed 102 percent of the reasonable profit on the 
sale, 
‘‘(B) 75 percent to the extent that the 
profit on the sale exceeds 102 percent of the 
reasonable profit on the sale but does not ex-
ceed 105 percent of the reasonable profit on the 
sale, and 
‘‘(C) 100 percent to the extent that the 
profit on the sale exceeds 105 percent of the 
reasonable profit on the sale. 
‘‘(4) REASONABLE PROFIT.—The term ‘reason-
able profit’ means the amount determined by the 
Reasonable Profits Board to be a reasonable profit 
on the sale. 
‘‘(c) LIABILITY FOR PAYMENT OF TAX.—The taxes 
imposed by subsection (a) shall be paid by the seller.
‘‘(d) APPLICATION OF SECTION.—This section shall 
apply during the period beginning on the date of the en-
actment of this section and ending on the date that the 
President certifies to the Congress than no members of 
the Armed Forces of the United States are in Iraq.’’
(b) REASONABLE PROFITS BOARD.—
(1) ESTABLISHMENT.—There is established an 
independent board to be known as the ‘‘Reasonable 
Profits Board’’ (hereafter in this subsection referred 
to as the ‘‘Board’’). 
(2) DUTIES.—The Board shall make reasonable 
profit determinations for purposes of applying sec-
tion 5886 of the Internal Revenue Code of 1986 (re-
lating to windfall profit on crude oil, natural gas, 
and products thereof). 
(3) ADVISORY COMMITTEE.—The Board shall 
be considered an advisory committee within the 
meaning of the Federal Advisory Committee Act (5 
U.S.C. App.). 
(4) APPOINTMENT.—
(A) MEMBERS.—The Board shall be com-
posed of 3 members appointed by the President 
of the United States. 
(B) TERM.—Members of the Board shall 
be appointed for a term of 3 years.
(C) BACKGROUND.—The members shall 
have no financial interests in any of the busi-
nesses for which reasonable profits are deter-
mined by the Board. 
(5) PAY AND TRAVEL EXPENSES.—
(A) PAY.—Notwithstanding section 7 of 
the Federal Advisory Committee Act (5 U.S.C. 
App.), members of the Board shall be paid at 
a rate equal to the daily equivalent of the min-
imum annual rate of basic pay for level IV of 
the Executive Schedule under section 5315 of 
title 5, United States Code, for each day (in-
cluding travel time) during which the member is 
engaged in the actual performance of duties 
vested in the Board. 
(B) TRAVEL
EXPENSES.—Members shall 
receive travel expenses, including per diem in 
lieu of subsistence, in accordance with section 
5702 and 5703 of title 5, United States Code. 
(6) DIRECTOR OF STAFF.—
(A) QUALIFICATIONS.—The Board shall 
appoint a Director who has no financial inter-
ests in any of the businesses for which reason-
able profits are determined by the Board.
(B) PAY.—Notwithstanding section 7 of 
the Federal Advisory Committee Act (5 U.S.C. 
App.), the Director shall be paid at the rate of 
basic pay payable for level IV of the Executive 
Schedule under section 5315 of title 5, United 
States Code. 
(7) STAFF.—
(A) ADDITIONAL PERSONNEL.—The Direc-
tor, with the approval of the Board, may ap-
point and fix the pay of additional personnel. 
(B) APPOINTMENTS.—The Director may 
make such appointments without regard to the 
provisions of title 5, United States Code, gov-
erning appointments in the competitive service, 
and any personnel so appointed may be paid 
without regard to the provisions of chapter 51 
and subchapter III of chapter 53 of that title 
relating to classification and General Schedule 
pay rates. 
(C) DETAILEES.—Upon the request of the 
Director, the head of any Federal department 
or agency may detail any of the personnel of 
that department or agency to the Board to as-
sist the Board in accordance with an agreement 
entered into with the Board.
(D) ASSISTANCE.—The Comptroller Gen-
eral of the United States may provide assist-
ance, including the detailing of employees, to 
the Board in accordance with an agreement en-
tered into with the Board. 
(8) OTHER AUTHORITY.—
(A) EXPERTS
AND
CONSULTANTS.—The 
Board may procure by contract, to the extent 
funds are available, the temporary or intermit-
tent services of experts or consultants pursuant 
to section 3109 of title 5, United States Code. 
(B) LEASING.—The Board may lease 
space and acquire personal property to the ex-
tent that funds are available. 
(9) FUNDING.—There are authorized to be ap-
propriated such funds as are necessary to carry out 
this subsection. 
(c) CLERICAL AMENDMENT.—The table of chapters 
for subtitle E of such Code is amended by adding at the 
end the following new item:
‘‘Chapter 55. Windfall profit on crude oil and refined petroleum 
products.’’
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act.
Æ