A bill to amend the Internal Revenue Code of 1986 to impose a windfall profits adjustment on the production of domestic electricity and to use the resulting revenues to fund rebates for individual and business electricity consumers.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer Utilities Turnback (CUT) 
Trust Fund Act of 2001''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds the following:
            (1) The overall net income for the production of 
        electricity for California consumers increased 333 percent 
        between the second quarters of 1999 and 2000.
            (2) The California Public Utilities Commission approved a 
        rate hike for individual and business consumers between 7 and 
        15 percent.
            (3) Electricity prices are expected to continue to rise as 
        a result of climbing natural gas prices.
            (4) Consumers are paying higher prices for electricity 
        while profits for producers are reaching record levels.
    (b) Purpose.--The purpose of this Act is to transfer windfall 
profits from the production of domestic electricity to fund assistance, 
in the form of rebates, for individual and business consumers.

SEC. 3. WINDFALL PROFIT ADJUSTMENT ON DOMESTIC ELECTRICITY PRODUCTION.

    (a) In General.--Subtitle D of the Internal Revenue Code of 1986 
(relating to miscellaneous excise taxes) is amended by inserting after 
chapter 44 the following new chapter:

   ``CHAPTER 45--WINDFALL PROFIT ADJUSTMENT ON DOMESTIC ELECTRICITY 
                               PRODUCTION

                              ``Sec. 4986. Imposition of tax.

``SEC. 4986. IMPOSITION OF TAX.

    ``(a) In General.--In addition to any other tax imposed under this 
title, an excise tax is imposed on the windfall profit from the sale of 
electricity produced from a facility located in the United States at a 
rate equal to 100 percent of such windfall profit.
    ``(b) Windfall Profit.--For purposes of this section--
            ``(1) In general.--The term `windfall profit' means, with 
        respect to the sale of electricity, so much of the profit from 
        such sale as exceeds a reasonable profit from such sale 
        determined for the calendar year in which such sale occurs.
            ``(2) Reasonable profit.--The term `reasonable profit' 
        means, with respect to any calendar year, the average of the 
        reasonable profit determinations made by State public utility 
        commissions for such year as calculated by the Federal Energy 
        Regulatory Commission.
    ``(c) Tax Paid by Producer.--The tax imposed by this section shall 
be paid by the producer selling the electricity.
    ``(d) Definitions and Other Rules.--For purposes of this section--
            ``(1) Producer.--The term `producer' means the holder of 
        the economic interest with respect to the electricity.
            ``(2) Other administrative provisions.--For purposes of 
        subtitle F, any tax imposed by this section shall be treated as 
        a tax imposed by subtitle A.
    ``(e) Records and Information.--Each taxpayer liable for tax under 
this section shall keep such records, make such returns, and furnish 
such statements and other information (to the Secretary and to other 
persons having an interest in sale of the production of electricity) 
with respect to such sale as the Secretary may by regulations 
prescribe.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
section.''.
    (b) Conforming Amendments.--
            (1) Section 275(a)(6) of the Internal Revenue Code of 1986 
        is amended by inserting ``45,'' after ``44,''.
            (2) Section 6103(d)(1) of such Code is amended by inserting 
        ``45,'' after ``44,''.
            (3) Section 6302(b) of such Code is amended by striking 
        ``or 33'' and inserting ``33, or 45''.
            (4) Section 6416(a)(1) of such Code is amended by inserting 
        ``, or chapter 45 (relating to windfall profit adjustment on 
        domestic electricity production),''.
            (5) Section 6416(d) of such Code is amended by striking 
        ``or 32'' and inserting ``32, or 45''.
            (6) The table of chapters of subtitle D of such Code is 
        amended by inserting after the item relating to chapter 44 the 
        following:

                              ``Chapter 45. Windfall profit adjustment 
                                        on electricity production.''.

SEC. 4. ALLOCATION OF REVENUES FROM WINDFALL PROFIT ADJUSTMENT ON 
              ELECTRICITY PRODUCTION TO INDIVIDUAL AND BUSINESS 
              CONSUMERS.

    (a) Establishment of Consumer Utilities Turnback Trust Fund.--
Subchapter A of chapter 98 of the Internal Revenue Code of 1986 
(relating to establishment of trust funds) is amended by adding at the 
end the following new section:

``SEC. 9511. CONSUMER UTILITIES TURNBACK TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Consumer 
Utilities Turnback Trust Fund', consisting of such amounts as may be 
appropriated or credited to such Trust Fund as provided in this section 
or section 9602(b).
    ``(b) Transfers to Trust Fund.--
            ``(1) In general.--There are appropriated to the Consumer 
        Utilities Turnback Trust Fund amounts equivalent to the net 
        revenues received in the Treasury from the taxes imposed by 
        section 4986.
            ``(2) Net revenues.--The term `net revenues' means the 
        amount estimated by the Secretary based on the excess of--
                    ``(A) the taxes received in the Treasury as 
                described in paragraph (1), over
                    ``(B) the decrease in the tax imposed by chapter 1 
                resulting from the imposition of the taxes described in 
                paragraph (1).
    ``(c) Expenditures From Consumer Utilities Turnback Trust Fund.--
Amounts in the Consumer Utilities Turnback Trust Fund shall be 
available, without further appropriation, for rebates for individual 
and business electricity consumers as provided by the Federal Energy 
Regulatory Commission, after the Commission has received from the 
Governor of any State a petition to fund such rebates. The funds must 
be spent within the fiscal year in which such funds were made 
available.''.
    (b) Conforming Amendment.--The table of sections for subchapter A 
of chapter 98 of the Internal Revenue Code of 1986 is amended by adding 
at the end the following new item:

        ``Sec. 9511. Consumer Utilities Turnback Trust Fund.''.

SEC. 6. EFFECTIVE DATE.

    The amendments made by this Act shall apply to sales after December 
31, 2000.

Summary: Consumer Utilities Turnback (CUT) Trust Fund Act of 2001 - Amends the Internal Revenue Code to impose an excise tax on the windfall profit from the sale of electricity produced from a facility located in the United States at a rate equal to 100 percent of such windfall profit.Establishes the Consumer Utilities Turnback Trust Fund into which shall be appropriated revenues from such tax. Provides that amounts in the Fund shall be available, without further appropriation, for specified rebates for individual and business electricity consumers.