Windfall Profit Tax and Deficit Reduction Act of 1990

Windfall Profit Tax and Deficit Reduction Act of 1990 - Amends the Internal Revenue Code to reinstate the windfall profit tax on domestic crude oil. Revises the inflation adjustment and declares the base price to be the average price per barrel of taxable crude oil during the four-month period ending on July 31, 1990, as determined by the Secretary of the Treasury. Repeals the phaseout of the tax, thus making the tax permanent law. Limits the category of newly discovered oil to oil from newly drilled wells.

Declares the term taxable crude oil to include any futures contract on taxable crude oil and provides for its tax treatment.

Establishes the Low Income Energy Support Trust Fund to fund the grant program under the Low-Income Home Energy Assistance Act of 1981 and the weatherization program under the Energy Conservation in Existing Buildings Act of 1976. Transfers to such Fund 50 percent of the taxes received from the windfall profit tax on domestic crude oil.

Requires the use of the first-in, first-out method of accounting for crude oil inventorying.

 
HR 5758 IH
101st CONGRESS
2d Session
 H. R. 5758
To amend the Internal Revenue Code of 1986 to reinstate the windfall profit
tax on domestic crude oil, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
September 30, 1990
Mr. DONNELLY (for himself, Mr. BRENNAN, Mr. MCCLOSKEY, and Mr. HERTEL)
introduced the following bill; which was referred jointly to the Committees
on Ways and Means, Energy and Commerce, and Education and Labor
A BILL
To amend the Internal Revenue Code of 1986 to reinstate the windfall profit
tax on domestic crude oil, and for other purposes.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
SECTION 1. SHORT TITLE.
  This Act may be cited as the `Windfall Profit Tax and Deficit Reduction
  Act of 1990'.
SEC. 2. REINSTATEMENT OF WINDFALL PROFIT TAX ON DOMESTIC CRUDE OIL.
  (a) IN GENERAL- Subtitle D of the Internal Revenue Code of 1986 (relating
  to excise taxes) is amended by inserting after chapter 44 the chapter
  45 of such Code (relating to windfall profit tax on domestic crude oil)
  as in effect on the day before the date of the enactment of the Omnibus
  Trade and Competitiveness Act of 1988 (Public Law 100-418).
  (b) BASE PRICE-
  (1) IN GENERAL- Section 4989 of such Code (as added by subsection (a) of
  this section) is amended by striking subsections (c) and (d) and inserting
  the following new subsection:
  `(c) BASE PRICE- For purposes of this chapter, the base price shall be the
  average price per barrel of taxable crude oil during the 4-month period
  ending on July 31, 1990, as determined by the Secretary.'
  (2) INFLATION ADJUSTMENT- Subsection (b) of such section 4989 is amended--
  (A) in paragraph (1)(B) by striking `June 30, 1979' and inserting `June 30,
  1990', and
  (B) in paragraph (2), by striking `September 1979' and inserting `September
  1990'.
  (c) DURATION OF TAX-
  (1) IN GENERAL- Subchapter A of chapter 45 of such Code (as added by
  subsection (a) of this section) is amended by striking section 4990
  (relating to phaseout of tax).
  (2) CLERICAL AMENDMENT- The table of sections for such subchapter A is
  amended by striking the item relating to section 4990.
  (d) CATEGORY OF NEWLY DISCOVERED OIL LIMITED TO OIL FROM NEWLY DRILLED WELLS-
  Paragraph (2) of section 4991(e) of such Code (as added by subsection (a)
  of this section) is amended by adding at the end the following new sentence:
  `Such term shall not include any oil produced from a well drilled before
  the date of the enactment of the Windfall Profit Tax and Deficit Reduction
  Act of 1990 and shall not include any oil produced from a well drilled on
  or after such date on any proven oil or gas property (within the meaning
  of section 613A(c)(9)(A)).'
  (e) APPLICABILITY TO FUTURES CONTRACTS ON CRUDE OIL- Section 4991 of such
  Code (as added by subsection (a) of this section) is amended by adding at
  the end the following new subsection:
  `(f) APPLICABILITY TO FUTURES CONTRACTS ON TAXABLE CRUDE OIL-
  `(1) IN GENERAL- For purposes of this chapter, the term `taxable crude oil'
  includes any futures contract on taxable crude oil.
  `(2) TREATMENT- For purposes of applying this chapter to any futures
  contract on taxable crude oil--
  `(A) the per barrel sale price of the contract shall be treated as the
  removal price of each barrel of crude oil covered by the contract,
  `(B) the seller of the contract shall be treated as the producer of the
  crude oil covered by the contract, and
  `(C) the applicable percentage with respect to the crude oil covered
  by the contract shall be the applicable percentage for tier 1 oil under
  section 4987(b)(2).
  `(3) DEFINITION- For purposes of this subsection, the term `futures contract
  on taxable crude oil' means any contract which requires the delivery of,
  or the settlement of which depends on the value of, taxable crude oil.'
  (f) CONFORMING AMENDMENTS- Each provision of law amended by section 1941(b)
  of the Omnibus Trade and Competitiveness Act of 1988 (Public Law 100-418)
  is amended to read as if the amendments made by such section had not
  been enacted.
  (g) EFFECTIVE DATE- The amendments made by this section shall apply to oil
  removed from the premises in calendar months beginning after the date of
  the enactment of this Act.
SEC. 3. LOW INCOME ENERGY SUPPORT TRUST FUND.
  (a) IN GENERAL- Subchapter A of chapter 98 of the Internal Revenue Code
  of 1986 (relating to trust fund code) is amended by adding at the end the
  following new section:
`SEC. 9511. LOW INCOME ENERGY SUPPORT 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 `Low Income Energy Support
  Trust Fund', consisting of any amount appropriated or credited to the
  Trust Fund as provided in this section or section 9602(b).
  `(b) TRANSFERS TO TRUST FUND- There are hereby appropriated to the Low
  Income Energy Support Trust Fund amounts equivalent to 50 percent of the
  taxes received in the Treasury under chapter 45 (relating to windfall
  profit tax on domestic crude oil). Amounts shall be made available and
  apportioned to the Trust Fund on a quarterly basis.
  `(c) EXPENDITURES FROM TRUST FUND-
  `(1) IN GENERAL- Amounts in the Low Income Energy Support Trust Fund shall
  be available for--
  `(A) the grant program under the Low-Income Home Energy Assistance Act
  of 1981 (42 U.S.C. 8621 et seq.), to be distributed on the same basis as
  directly appropriated funds, and
  `(B) the weatherization program under part A of the Energy Conservation
  in Existing Buildings Act of 1976 (42 U.S.C. 6861 et seq.).
  `(2) ALLOCATION- Of the amount appropriated or credited to the Low Income
  Energy Support Trust Fund for each quarter--
  `(A)  7/8  shall be made available, without further appropriation, to
  the Secretary of Health and Human Services for the program described in
  paragraph (1)(A), and
  `(B)  1/8  shall be made available, without further appropriation, to the
  Secretary of Energy for the program described in paragraph (1)(B).
  `(d) LIMITATIONS-
  `(1) TREATMENT OF FUNDS AS SUPPLEMENTAL- Any amount made available under
  subsection (c) shall be be used to supplement, and not supplant, funds
  otherwise available for the programs described in paragraph (1) of such
  subsection.
  `(2) MINIMUM DIRECT APPROPRIATIONS-
  `(A) IN GENERAL- No amount may be made available from the Low Income Energy
  Support Trust Fund in any fiscal year unless--
  `(i) $1,500,000,000 is directly appropriated for such fiscal year for the
  program described in subsection (c)(1)(A), and
  `(ii) $200,000,000 is directly appropriated for such fiscal year for the
  program described in subsection (c)(1)(B).
  `(B) INFLATION ADJUSTMENT-
  `(i) IN GENERAL- In the case of fiscal year 1992 and each succeeding fiscal
  year, each dollar amount contained in subparagraph (A) shall be increased
  by an amount equal to--
  `(I) such dollar amount, multiplied by
  `(II) the inflation adjustment determined under clause (ii).
  `(ii) INFLATION ADJUSTMENT- For purposes of clause (i), the inflation
  adjustment of any fiscal year is the percentage by which--
  `(I) the implicit price deflator for the gross national product for the
  preceding fiscal year, exceeds
  `(II) such deflator for fiscal year 1990.'
  (b) CLERICAL AMENDMENT- The table of sections for such subchapter is
  amended by adding at the end the following new item:
`Sec. 9511. Low Income Energy Support Trust Fund'.
SEC. 4. FIRST-IN, FIRST-OUT ACCOUNTING FOR CRUDE OIL.
  (a) IN GENERAL- Section 471 of the Internal Revenue Code of 1986 (relating
  to general rule for inventories) is amended by redesignating subsection
  (b) as subsection (c) and by inserting after subsection (a) the following
  new subsection:
  `(b) SPECIAL RULE FOR CRUDE OIL- For purposes of inventorying crude oil
  (within the meaning of section 4996(b)), only the first-in, first-out
  method may be prescribed under subsection (a).'
  (b) CONFORMING AMENDMENT- Section 472 of such Code (relating to LIFO
  inventories) is amended by adding at the end the following new subsection:
  `(h) INAPPLICABILITY TO CRUDE OIL- Subsection (a) shall not apply in
  inventorying crude oil (within the meaning of section 4996(b)).'
  (c) EFFECTIVE DATE- The amendments made by this section shall apply to
  taxable years beginning after August 1, 1990.