I 
109TH CONGRESS 
2D SESSION 
H. R. 5874 
To direct the Secretary of the Interior to suspend the application of any 
provision of Federal law under which any person is given relief from 
any requirement to pay royalty for production oil or natural gas from 
Federal lands (including submerged lands), for production occurring in 
any period in which the market price of production exceeds certain 
prices, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 25, 2006 
Mr. CARNAHAN introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committees on Re-
sources and Science, 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 direct the Secretary of the Interior to suspend the appli-
cation of any provision of Federal law under which any 
person is given relief from any requirement to pay roy-
alty for production oil or natural gas from Federal lands 
(including submerged lands), for production occurring 
in any period in which the market price of production 
exceeds certain prices, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Consumer Relief and 
Investment in Our Future Act’’. 
SEC. 2. REQUIREMENT TO SUSPEND ROYALTY RELIEF. 
(a) REQUIREMENT TO SUSPEND.—The Secretary of 
the Interior shall suspend the application of any provision 
of Federal law under which any person is given relief from 
any requirement to pay royalty for production oil or nat-
ural gas from Federal lands (including submerged lands), 
for production occurring in any period after the date of 
the enactment of this Act with respect to which— 
(1) in the case of production of oil, the average 
price of crude oil in the United States over the most 
recent 4 consecutive weeks is greater than $34.71 
per barrel; and 
(2) in the case of production of natural gas, the 
average wellhead price of natural gas in the United 
States over the most recent 4 consecutive weeks is 
greater than $4.34 per thousand cubic feet. 
(b) DETERMINATION OF MARKET PRICE.—The Sec-
retary shall determine average prices for purposes of sub-
section (a) based on the most recent data reported by the 
Energy Information Administration of the Department of 
Energy. 
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SEC. 3. RENEGOTIATION OF EXISTING LEASES. 
(a) REQUIREMENT.—The Secretary of the Interior 
shall seek to renegotiate each existing lease authorizing 
production of oil or natural gas on Federal land (including 
submerged land) that was issued by the Department of 
the Interior before the date of the enactment of this Act 
as necessary to modify the terms of such lease to ensure 
that any suspension of a requirement to pay royalties 
under such lease does not apply to production referred to 
in section 2(a). 
(b) FAILURE TO RENEGOTIATE AND MODIFY.—After 
the end of the 1-year period beginning on the date of the 
enactment of this Act, a person who is a lessee under an 
existing lease referred to in subsection (a) shall not be eli-
gible to enter into any new lease that authorizes produc-
tion of oil or natural gas on Federal land (including sub-
merged land), and shall not be eligible to obtain by sale 
or other transfer any lease issued before the end of such 
period, unless such person renegotiates such existing lease 
and enters into an agreement with the Secretary that 
modifies the terms of the existing lease as provided in sub-
section (a). 
SEC. 4. USE OF ROYALTIES RECEIVED AS RESULT OF SUS-
PENSION OF ROYALTY RELIEF. 
(a) DEPOSIT OF ROYALTIES.—Amounts received by 
the United States as royalty for production of oil or nat-
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ural gas from Federal lands (including submerged lands) 
shall be deposited into a separate account in the Treasury. 
(b) AVAILABILITY
OF
DEPOSITED
AMOUNTS.— 
Amounts in the account referred to in subsection (a) shall 
be available to the Secretary of Energy, without further 
appropriation, to be divided equally among the following 
programs: 
(1) The biomass programs administered by the 
Assistant Secretary of Energy for Energy Efficiency 
and Renewable Energy. 
(2) The FreedomCAR and Vehicle Technologies 
Program administered by the Assistant Secretary of 
Energy for Energy Efficiency and Renewable En-
ergy, 25 percent of which shall be for the Clean Cit-
ies Program. 
(3) The Hydrogen, Fuel Cells, and Infrastruc-
ture Program administered by the Assistant Sec-
retary of Energy for Energy Efficiency and Renew-
able Energy. 
SEC. 5. ADVANCED TECHNOLOGY PROGRAM. 
There are authorized to be appropriated to the Sec-
retary of Commerce for the National Institute of Stand-
ards and Technology’s Advanced Technology Program— 
(1) $464,000,000 for fiscal year 2007; 
(2) $823,000,000 for fiscal year 2008; 
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(3) $1,092,000,000 for fiscal year 2009; 
(4) $1,156,000,000 for fiscal year 2010; 
(5) $1,151,000,000 for fiscal year 2011; 
(6) $1,052,000,000 for fiscal year 2012; 
(7) $1,177,000,000 for fiscal year 2013; 
(8) $1,132,000,000 for fiscal year 2014; and 
(9) $1,149,000,000 for fiscal year 2015. 
SEC. 6. 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 
the following new chapter: 
‘‘CHAPTER 56—WINDFALL PROFITS ON 
CRUDE OIL 
‘‘Sec. 5896. Imposition of tax. 
‘‘Sec. 5897. Windfall profit; removal price; base price; qualified investment. 
‘‘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 
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‘‘(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; BASE 
PRICE; QUALIFIED INVESTMENT. 
‘‘(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 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 
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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) BASE PRICE DEFINED.—For purposes of this 
chapter, the term ‘base price’ means $40 for each barrel 
of taxable crude oil. 
‘‘(d) QUALIFIED INVESTMENT.—For purposes of this 
chapter, the term ‘qualified investment’ means any 
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amount paid or incurred with respect to any qualified fa-
cility described in paragraph (1), (2), (3), or (4) of section 
45(d) (determined without regard to any placed in service 
date). 
‘‘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.— 
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‘‘(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 the Consumer Relief and Invest-
ment in Our Future Act, 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 chapter shall not apply to 
taxable crude oil removed after the date which is 1 year 
after the date of the enactment of this section.’’. 
(b) TRANSFER OF WINDFALL PROFIT TAX RECEIPTS 
TO HIGHWAY TRUST FUND.—Paragraph (1) of section 
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9503(b) of the Internal Revenue Code of 1986 is amended 
by striking ‘‘and’’ at the end of subparagraph (D), by 
striking the period at the end of subparagraph (E) and 
inserting ‘‘, and’’, and by inserting after subparagraph (E) 
the following new subparagraph: 
‘‘(F) section 5896 (relating to windfall 
profits tax 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) 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.’’. 
(e) 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 on the date which is one year after the date 
of the enactment of this Act, the Secretary of the 
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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. 7. REDUCTION OF FUEL TAXES ON HIGHWAY MOTOR 
FUELS. 
(a) IN GENERAL.—Section 4081 of the Internal Rev-
enue Code of 1986 (relating to imposition of tax on motor 
and aviation fuels) is amended by adding at the end the 
following new subsection: 
‘‘(f) REDUCTION
OF
HIGHWAY
MOTOR
FUEL 
TAXES.— 
‘‘(1) IN GENERAL.—During the reduction pe-
riod, the rate of tax imposed by section 4041 (other 
than subsection (d) thereof) or 4081(a)(2)(A) on 
highway motor fuel shall be reduced by 10 cents per 
gallon. 
‘‘(2) DEFINITIONS
AND
SPECIAL
RULE.—For 
purposes of this subsection— 
‘‘(A) REDUCTION PERIOD.—The term ‘re-
duction period’ means the 1-year period begin-
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ning on the date of enactment of the Consumer 
Relief and Investment in Our Future Act. 
‘‘(B) HIGHWAY MOTOR FUEL.—The term 
‘highway motor fuel’ means any fuel subject to 
tax under section 4041 or 4081 other than 
aviation gasoline and aviation-grade kerosene.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on the date of the enact-
ment of this Act. 
(c) MAINTENANCE
OF TRUST FUNDS DEPOSITS; 
AMOUNTS APPROPRIATED TO TRUST FUNDS TREATED AS 
TAXES.— 
(1) IN
GENERAL.—There is hereby appro-
priated (out of any money in the Treasury not other-
wise appropriated) to the Highway Trust Fund an 
amount equal to the excess (if any) of— 
(A) the amount (but for this subsection) of 
reduced revenues received in the Highway Trust 
Fund as a result of a reduction in a rate of tax 
by reason of section 4081(f)(1) of the Internal 
Revenue Code of 1986 (as added by subsection 
(a), over 
(B) amounts appropriated to the Highway 
Trust Fund by section 9503(b)(1)(F) of the In-
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ternal Revenue Code of 1986 (relating to wind-
fall profits tax on crude oil). 
(2) SPECIAL RULES.—Amounts appropriated by 
paragraph (1) to the Highway Trust Fund— 
(A) shall be transferred from the general 
fund at such times and in such manner as to 
replicate to the extent possible the transfers 
which would have occurred had subsection (a) 
not been enacted, and 
(B) shall be treated for all purposes of 
Federal law as taxes received under the appro-
priate section referred to in such section 
4081(f)(1). 
(d) FLOOR STOCK REFUNDS.— 
(1) IN GENERAL.—If— 
(A) before the tax rate reduction date, tax 
has been imposed under section 4081 of the In-
ternal Revenue Code of 1986 on any highway 
motor fuel, and 
(B) on such date such fuel is held by a 
dealer and has not been used and is intended 
for sale, 
there shall be credited or refunded (without interest) 
to the person who paid such tax (hereafter in this 
section referred to as the ‘‘taxpayer’’) an amount 
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equal to the excess of the tax paid by the taxpayer 
over the tax which would be imposed on such fuel 
had the taxable event occurred on such date. 
(2) TIME FOR FILING CLAIMS.—No credit or re-
fund shall be allowed or made under this subsection 
unless— 
(A) claim therefor is filed with the Sec-
retary of the Treasury before the date which is 
6 months after the tax rate reduction date 
based on a request submitted to the taxpayer 
before the date which is 3 months after the tax 
rate reduction date by the dealer who held the 
highway motor fuel on such date, and 
(B) the taxpayer has repaid or agreed to 
repay the amount so claimed to such dealer or 
has obtained the written consent of such dealer 
to the allowance of the credit or the making of 
the refund. 
(3) EXCEPTION
FOR
FUEL
HELD
IN
RETAIL 
STOCKS.—No credit or refund shall be allowed under 
this section with respect to any highway motor fuel 
in retail stocks held at the place where intended to 
be sold at retail. 
(4) DEFINITIONS.—For purposes of this sub-
section— 
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(A) TAX
RATE
REDUCTION
DATE.—The 
term ‘‘tax rate reduction date’’ means the first 
day of the reduction period (as defined in sec-
tion 4081(f) of the Internal Revenue Code of 
1986 (as added by subsection (a))). 
(B) OTHER TERMS.—The terms ‘‘dealer’’ 
and ‘‘held by a dealer’’ have the respective 
meanings given to such terms by section 6412 
of such Code. 
(5) CERTAIN RULES TO APPLY.—Rules similar 
to the rules of subsections (b) and (c) of section 
6412 of such Code shall apply for purposes of this 
subsection. 
(e) FLOOR STOCKS TAX.— 
(1) IMPOSITION OF TAX.—In the case of any 
highway motor fuel which is held on the tax restora-
tion date by any person, there is hereby imposed a 
floor stocks tax equal to the excess of the tax which 
would be imposed on such fuel had the taxable event 
occurred on such date over the tax (if any) pre-
viously paid (and not credited or refunded) on such 
fuel. 
(2) LIABILITY FOR TAX AND METHOD OF PAY-
MENT.— 
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(A) LIABILITY
FOR
TAX.—The person 
holding highway motor fuel on the tax restora-
tion date to which the tax imposed by para-
graph (1) applies shall be liable for such tax. 
(B) METHOD OF PAYMENT.—The tax im-
posed by paragraph (1) shall be paid in such 
manner as the Secretary shall prescribe. 
(C) TIME
FOR
PAYMENT.—The tax im-
posed by paragraph (1) shall be paid on or be-
fore the 45th day after the tax restoration date. 
(3) DEFINITIONS.—For purposes of this sub-
section— 
(A) TAX RESTORATION DATE.—The term 
‘‘tax restoration date’’ means the first day after 
the end of the reduction period (as defined in 
section 4081(f) of the Internal Revenue Code of 
1986). 
(B) HIGHWAY
MOTOR
FUEL.—The term 
‘‘highway motor fuel’’ has the meaning given to 
such term by section 4081(f) of such Code. 
(C) HELD
BY
A
PERSON.—A highway 
motor fuel shall be considered as held by a per-
son if title thereto has passed to such person 
(whether or not delivery to the person has been 
made). 
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(D) SECRETARY.—The term ‘‘Secretary’’ 
means the Secretary of the Treasury or the 
Secretary’s delegate. 
(4) EXCEPTION FOR EXEMPT USES.—The tax 
imposed by paragraph (1) shall not apply to any 
highway motor fuel held by any person exclusively 
for any use to the extent a credit or refund of the 
tax is allowable for such use. 
(5) EXCEPTION
FOR
CERTAIN
AMOUNTS
OF 
FUEL.— 
(A) IN
GENERAL.—No tax shall be im-
posed by paragraph (1) on any highway motor 
fuel held on the tax restoration date by any per-
son if the aggregate amount of such highway 
motor fuel held by such person on such date 
does not exceed 2,000 gallons. The preceding 
sentence shall apply only if such person submits 
to the Secretary (at the time and in the manner 
required by the Secretary) such information as 
the Secretary shall require for purposes of this 
paragraph. 
(B) EXEMPT FUEL.—For purposes of sub-
paragraph (A), there shall not be taken into ac-
count any highway motor fuel held by any per-
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son which is exempt from the tax imposed by 
paragraph (1) by reason of paragraph (4). 
(C) CONTROLLED GROUPS.—For purposes 
of this subsection— 
(i) CORPORATIONS.— 
(I) IN
GENERAL.—All persons 
treated as a controlled group shall be 
treated as 1 person. 
(II) CONTROLLED
GROUP.—The 
term ‘‘controlled group’’ has the 
meaning given to such term by sub-
section (a) of section 1563 of such 
Code; except that for such purposes 
the phrase ‘‘more than 50 percent’’ 
shall be substituted for the phrase ‘‘at 
least 80 percent’’ each place it ap-
pears in such subsection. 
(ii) 
NONINCORPORATED
PERSONS 
UNDER COMMON CONTROL.—Under regula-
tions prescribed by the Secretary, prin-
ciples similar to the principles of clause (i) 
shall apply to a group of persons under 
common control if 1 or more of such per-
sons is not a corporation. 
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