To amend the Internal Revenue Code of 1986 to impose a tax on transactions in oil futures, options, and swaps, and for other purposes.

SECTION 1. SHORT TITLE; FINDINGS.

    (a) Short Title.--This Act may be cited as the ``Taxing Speculators 
out of the Oil Market Act''.
    (b) Findings.--Congress finds the following:
            (1) The price of oil has risen and fallen dramatically over 
        the last decade without a clear connection to the laws of 
        supply and demand.
            (2) The price of a barrel of oil predictably stayed beneath 
        $20 a barrel of oil for decades. In the beginning of 1999, the 
        price was under $10 a barrel of oil, but since then the oil 
        market has been plagued by speculation and fluctuated wildly.
            (3) In late 2004, the price of oil exceeded $40 a barrel of 
        oil, up 400 percent in 5 years.
            (4) In late 2007, the price exceeded $80 a barrel of oil, 
        up 800 percent in 8 years.
            (5) In mid 2008, the price of oil peaked at $145 a barrel, 
        up 1,450 percent in under ten years.
            (6) The price of oil collapsed in 2008 to just over $30 a 
        barrel of oil.
            (7) By early 2011, the price of oil rebounded to almost 
        $115 per barrel of oil.
            (8) These large price swings coincide with drop in demand 
        since 2005. In 2010, the United States consumed 2.1 million 
        barrels of oil per day less than it did 6 years ago.
            (9) Many economists have attributed this irrational 
        behavior of the oil market to the large increase in speculative 
        trading in oil derivatives.
            (10) A transaction tax on speculative trading can deter 
        short-term speculation which will reduce the volatility and 
        price of oil.

SEC. 2. TAX ON TRANSACTIONS IN OIL FUTURES, OPTIONS, AND SWAPS.

    (a) In General.--Chapter 36 of the Internal Revenue Code of 1986 is 
amended by inserting after subchapter B the following new subchapter:

 ``Subchapter C--Tax on Transactions in Oil Futures, Options, and Swaps

``Sec. 4475. Tax on transactions in oil futures, options, and swaps.

``SEC. 4475. TAX ON TRANSACTIONS IN OIL FUTURES, OPTIONS, AND SWAPS.

    ``(a) Imposition of Tax.--
            ``(1) Futures.--There is hereby imposed a tax on each 
        covered transaction in an oil futures contract of 0.01 percent 
        of the value of the futures instruments involved in such 
        transaction.
            ``(2) Options.--There is hereby imposed a tax on each 
        covered transaction in an oil option of 0.01 percent of the 
        premium paid on the option for a futures instruments involved 
        in such transaction.
            ``(3) Swaps.--There is hereby imposed a tax on each covered 
        transaction in an oil swap of 0.01 percent of the value of the 
        underlying assets involved in such transaction for each year 
        until the swap contact maturity.
    ``(b) By Whom Paid.--
            ``(1) In general.--The tax imposed by this section shall be 
        paid by--
                    ``(A) the trading facility on which the transaction 
                occurs, or
                    ``(B) if such transaction does not occur on a 
                trading facility, by the buyer of the transaction.
            ``(2) Withholding if buyer not united states person.--See 
        section 1447 for withholding by seller if buyer is a foreign 
        person.
    ``(c) Exception for Commercial Traders.--The tax imposed by this 
section shall not apply to any transaction if--
            ``(1) either party to the transaction is--
                    ``(A) classified by the Commodity Futures Trading 
                Commission as a commercial trader with respect to oil, 
                or
                    ``(B) a financial institution acting on behalf of 
                such a party (but only if the financial institution 
                does not at any time acquire ownership of the 
                security), and
            ``(2) the transaction is a bona fide hedging transaction 
        (within the meaning of section 4a(c) of the Commodity Exchange 
        Act).
    ``(d) Definitions.--For purposes of this section--
            ``(1) Covered transaction.--The term `covered transaction' 
        means any purchase or sale of an oil futures contract, an oil 
        option or oil swap contract if--
                    ``(A) such purchase or sale on a trading facility 
                is located in the United States, or
                    ``(B) the purchaser or seller is a United States 
                person.
            ``(2) Oil futures contract.--The term `oil futures 
        contract' means any contract of sale of oil for future delivery 
        (within the meaning of the Commodity Exchange Act).
            ``(3) Oil option.--The term `oil option' means any option 
        on an oil futures transaction.
            ``(4) Oil swap contract.--The term `oil swap contract' 
        means any contract of sale of oil involving a swap.
            ``(5) Trading facility.--The term `trading facility' has 
        the meaning given to such term by the Commodity Exchange Act.
    ``(e) Administration.--The Secretary shall carry out this section 
in consultation with the Commodity Futures Trading Commission.''.
    (b) Withholding.--Subchapter A of chapter 3 of such Code is amended 
by adding at the end the following new section:

``SEC. 1447. WITHHOLDING OF TAX ON TRANSACTIONS IN OIL FUTURES, 
              OPTIONS, AND SWAPS.

    ``In the case of any acquisition of an oil futures contract, an oil 
option, or an oil swap contract (as such terms are defined in section 
4475) by a foreign person, the transferor shall be required to deduct 
and withhold a tax equal to the tax which would be imposed on such 
acquisition under section 4475 if the transferee were a United States 
person.''.
    (c) Clerical Amendments.--
            (1) The table of subchapters for chapter 36 of such Code is 
        amended by inserting after the item relating to subchapter B 
        the following new item:

   ``subchapter c. tax on transactions in oil futures, options, and 
                               swaps.''.

            (2) The table of sections for subchapter A of chapter 3 of 
        such Code is amended by adding at the end the following new 
        section:

``Sec. 1447. Withholding of tax on transactions in oil futures, 
                            options, and swaps.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to transactions occurring on or after 90 days after the date of 
the enactment of this Act.

SEC. 3. AVAILABILITY TO THE COMMODITY FUTURES TRADING COMMISSION OF 
              REVENUE FROM TAXES ON TRANSACTIONS IN OIL FUTURES, 
              OPTIONS, AND SWAPS.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
inserting after section 10 the following:

``SEC. 11. AVAILABILITY TO THE COMMISSION OF REVENUE FROM TAXES ON 
              TRANSACTIONS IN OIL FUTURES, OPTIONS, AND SWAPS.

    ``(a) Tax Revenue Deposited as Offsetting Collections to CFTC 
Appropriations Account.--All taxes collected pursuant to sections 4475 
and 1447 of the Internal Revenue Code of 1986 for any fiscal year shall 
be deposited and credited as offsetting collections to the account 
providing appropriations to the Commission.
    ``(b) Use of Unexpended Funds for Public Debt Reduction.--Any 
amount credited under paragraph (1) that remains unexpended as of the 
end of any fiscal year shall be transferred to the Treasury and used to 
reduce the public debt of the United States.''.

SEC. 4. DUTIES OF COMMODITY FUTURES TRADING COMMISSION.

    The Commodity Futures Trading Commission (referred to in this 
section as the ``Commission'') shall use the authority of the 
Commission, including the emergency authority of the Commission--
            (1) to subject each bank holding company (as defined in 
        section 2(a) of the Bank Holding Company Act of 1956) that 
        engages in trading subject to section 4475 of the Internal 
        Revenue Code of 1986, and each hedge fund (as defined in 
        section 13(h)(2) of the Bank Holding Company Act of 1956) that 
        buys or sells a contract of sale of oil for future delivery 
        (within the meaning of the Commodity Exchange Act) for its own 
        account or on behalf of a third party, to the rules applicable 
        to noncommercial participants in the markets for the contracts; 
        and
            (2) to revoke immediately each staff no-action letter that 
        covers a foreign board of trade that--
                    (A) has established a trading terminal in the 
                United States for the purpose of selling the contracts 
                to, or buying the contracts from, United States 
                investors; and
                    (B) engages in trading subject to such section 
                4475.

Summary: Taxing Speculators out of the Oil Market Act - Amends the Internal Revenue Code to: (1) impose an 0.01% excise tax on transactions in oil futures, options, and swaps, to be paid by the trading facility on which the transactions occur or by the buyer of the transaction; and (2) require withholding of such tax if the buyer is a foreign person. Exempts from such tax certain commercial oil traders and bona fide hedging transactions.

Amends the Commodity Exchange Act to credit tax revenues from this Act as offsetting collections to appropriations to the Commodity Futures Trading Commission (CFTC). Requires any unexpended amounts to be used to reduce the public debt.

Requires the CFTC to: (1) subject each bank holding company that engages in trading in oil futures, options, and swaps, and each hedge fund that buys or sells a contract of sale of oil for future delivery, to the rules applicable to noncommercial participants in the markets for the contracts; and (2) revoke immediately each staff no-action letter that covers a foreign board of trade that has established a trading terminal in the United States for selling contracts to or from U.S. investors and engages in trading in oil futures, options, and swaps.