,,ii #aagth ,,congress #b;d ,session ,s4 #dgfh ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,august #d1 #bjbb,mr4 ,wyden 7for himself1 ,mr4 ,schumer1 ,mrs4 ,murray1 ,ms4 ,stabenow1 ,mr4 ,casey1 ,mr4 ,padilla1 ,ms4 ,hirono1 ,mr4 ,booker1 ,ms4 ,klobuchar1 ,mr4 ,reed1 ,mr4 ,warnock1 ,mrs4 ,feinstein1 ,mr4 ,blumenthal1 and ,mr4 ,van ,hollen7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to tax excess profits of large oil and gas companies1 to impose a tax on the repurchase of stock by large oil and gas companies1 to end the use of the ,,lifo method of accounting by large oil and gas trades or businesses1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,taxing ,big ,oil ,profiteers ,act4 #b4 ,tax on excess profits of certain taxpayers from oil and gas 7a7 ,in general ,subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new part3 ,,viii ,windfall profits from oil and gas ,sec4 #ei;,b4 ,tax on oil and gas excess profits4 #ei;,b4 ,tax on oil and gas excess profits 7a7 ,imposition of tax 7#a7 ,in general ,in addition to any other tax imposed under this chapter1 there is hereby imposed on each applicable taxpayer for any taxable year a tax equal to #ba percent of the excess profits of such taxpayer for such taxable year4 7#b7 ,excess profits ,for purposes of this subsection1 the term excess profits means1 with respect to any taxable year1 the excess of-- 7,a7 the current profits of the taxpayer for the taxable year1 over 7,b7 the normal return of the taxpayer for the taxable year4 7b7 ,applicable taxpayer ,for purposes of this section-- 7#a7 ,in general ,the term applicable taxpayer means1 with respect to any taxable year1 any person if-- 7,a7 the average annual gross receipts of such person for the #c-taxable-year period ending with the taxable year which precedes such taxable year equals or exceeds #a1jjj1jjj1jjj1 and 7,b7 such person is primarily engaged in #a or more oil or natural gas trades or businesses during the taxable year4 7#b7 ,special rules for applicable entities 7,a7 ,in general ,if an entity is an applicable entity 7as defined in subsection 7e77 for any taxable year-- 7i7 except as provided in paragraphs 7#a77;,a7 and 7#b77;,b7 of subsection 7e71 such entity shall not be treated as an applicable taxpayer for purposes of this section1 but 7ii7 any allocable share of a covered taxpayer of any excess profits of such entity for such taxable year 7as determined under subsection 7e77 shall be taken into account by such taxpayer under subsection 7a77#a7-- 7,i7 as excess profits of such taxpayer for the taxable year of such taxpayer with or within which such taxable year of such entity ends1 and 7,,ii7 in the same manner as if such taxpayer were an applicable taxpayer4 7,b7 ,covered taxpayer ,for purposes of this section1 the term covered taxpayer means1 with respect to any taxable year-- 7i7 a taxpayer who is an individual 7other than an estate or trust7 and whose adjusted gross income for such taxable year exceeds #djj1jjj 7#bjj1jjj in the case of a married individual filing separately71 7ii7 an estate or trust1 or 7iii7 a ,c corporation which is not an applicable taxpayer4 7#c7 ,oil or natural gas trade or business ,the term oil or natural gas trade or business means any trade or business that consists of one or more of the following3 7,a7 ,the production of oil or natural gas4 7,b7 ,the refining of oil or natural gas4 7,c7 ,the processing of oil or natural gas4 7,d7 ,the transportation of oil or natural gas4 7,e7 ,the distribution of oil or natural gas4 7#d7 ,applicable rules relating to gross receipts ,for purposes of paragraph 7#a77;,a7-- 7,a7 except as provided in subsection 7f71 there shall be taken into account only gross receipts which are effectively connected with the conduct of a trade or business within the ,united ,states1 the ,commonwealth of ,puerto ,rico1 or any possession of the ,united ,states1 and 7,b7 rules similar to the rules of paragraphs 7#b7 and 7#c7 of section #ddh7;c7 shall apply4 7c7 ,current profits ,for purposes of this section1 the term current profits means1 with respect to any applicable taxpayer for any taxable year1 the taxable income of the taxpayer computed under this chapter for such taxable year1 determined with the following modifications3 7#a7 ,no net operating loss deduction ,no net operating loss deduction shall be allowed4 7#b7 ,deduction for employee remuneration 7,a7 ,in general ,section #afb7m7 shall be applied-- 7i7 by substituting ,in the case of any applicable taxpayer 7as defined in section #ei;,b7 for ,in the case of any publicly held corporation in paragraph 7#a7 thereof1 7ii7 by substituting covered individual 7as defined in section #ei;,b7c77#b77;,b77 for covered employee each place it appears in paragraphs 7#a7 and 7#d7 thereof1 and 7iii7 by treating any reference to an employee in paragraphs 7#a7 and 7#d7 thereof as a reference to an individual4 7,b7 ,covered individual ,for purposes of applying this paragraph to section #afb7m71 the term covered individual means any individual who-- 7i7 is an officer1 director1 or employee of the applicable taxpayer for the taxable year1 or 7ii7 performed services for the applicable taxpayer during the taxable year4 ,for purposes of clause 7i71 any employee who is treated as an employee of the applicable taxpayer under subsection 7b7 or 7c7 of section #dad shall be treated as an employee for purposes of this subparagraph4 7#c7 ,certain foreign income ,except as provided in subsection 7f7-- 7,a7 ,certain income excluded ,in determining gross income-- 7i7 subpart ,f income and global intangible low-taxed income included in gross income under sections #iea and #iea;,a shall not be taken into account1 and 7ii7 foreign-derived intangible income 7as defined in section #bej7 shall not be taken into account unless such income is domestic oil-related income which is derived from oil or gas which is exported from the ,united ,states4 ,for purposes of clause 7ii71 the term domestic oil-related income means income 7other than dividend or interest income which is passive income 7as defined in section #ijd7;d77#b77;,a77 derived from sources within the ,united ,states or its possessions from activities described in subparagraphs 7,a7 through 7,e7 of section #ijg7;c77#b74 7,b7 ,denial of section #bej deduction ,no deduction shall be allowed under section #bej4 7d7 ,normal return ,for purposes of this section1 the term normal return means1 with respect to any applicable taxpayer for any taxable year1 an amount equal to #aj percent of the excess of-- 7#a7 the gross receipts of the taxpayer taken into account in computing the taxpayer's current profits for the taxable year1 including the taxpayer's allocable share of any gross receipts of a partnership1 ,s corporation1 or other pass-thru entity specified by the ,secretary under subsection 7e77#b77;,a71 over 7#b7 the current profits of the taxpayer for the taxable year4 7e7 ,definitions and rules relating to applicable entities ,for purposes of this section-- 7#a7 ,in general ,an applicable entity for any taxable year shall-- 7,a7 compute the current profits1 normal return1 and excess profits of such entity for such taxable year in the same manner as if such entity were an applicable taxpayer1 except that subsection 7c7 shall be applied by substituting the entity's non-separately stated taxable income for the entity's taxable income1 and 7,b7 report to each partner1 shareholder1 or other holder of an ownership interest in such entity its allocable share of the entity's excess profits4 7#b7 ,applicable entity ,the term applicable entity means1 with respect to any taxable year1 an entity-- 7,a7 which is a partnership1 ,s corporation1 or other pass-thru entity specified by the ,secretary1 and 7,b7 with respect to which the requirements of subparagraphs 7,a7 and 7,b7 of subsection 7b77#a7 are met for such taxable year1 determined in the same manner as if such entity were an applicable taxpayer4 7#c7 ,allocable share ,a person's allocable share of the excess profits shall be determined in the same manner as-- 7,a7 in the case of a partnership1 such person's distributive share of the non-separately stated taxable income of the partnership1 7,b7 in the case of an ,s corporation1 such person's pro rata share of the non-separately stated taxable income of the ,s corporation1 and 7,c7 in the case of any other pass-thru entity1 such person's share 7as determined under rules prescribed by the ,secretary7 of the non-separately stated taxable income of the entity4 7#d7 ,non-separately stated taxable income ,the term non-separately stated taxable income means taxable income computed under-- 7,a7 section #gjc7;a7 in the case of a partnership1 7,b7 section #acff7;a77#a77;,b7 in the case of an ,s corporation1 and 7,c7 rules prescribed by the ,secretary in the case of any other pass-thru entity4 7f7 ,rules for certain foreign income attributable to imports into the ,united ,states ,for purposes of this section-- 7#a7 ,in general ,in the case of any oil and gas import income of an applicable taxpayer for any taxable year-- 7,a7 in computing such taxpayer's current profits for such taxable year-- 7i7 such oil and gas import income 7and any deductions allocable to such income7 shall be taken into account1 and 7ii7 subsection 7c77#c7 shall not apply to any subpart ,f income1 global intangible low-taxed income1 or foreign-derived intangible income of such taxpayer to the extent such income is attributable to such oil and gas import income1 and 7,b7 gross receipts taken into account in computing such oil and gas import income shall be taken into account in computing the gross receipts of such taxpayer for purposes of subsection 7b77#a77;,a7 4 7#b7 ,oil and gas import income 7,a7 ,controlled foreign corporations ,in the case of a ,united ,states shareholder of a controlled foreign corporation1 the term oil and gas import income means1 with respect to such shareholder for such taxable year1 such shareholder's pro rata share of combined foreign oil and gas income of the controlled foreign corporation which is derived from oil and gas imported into the ,united ,states4 7,b7 ,authority to include other income ,the ,secretary may prescribe such regulations or other guidance to include in oil and gas import income of an applicable taxpayer its pro rata share of any combined foreign oil and gas income of any person related to the taxpayer 7other than a controlled foreign corporation7 which is derived from oil and gas imported into the ,united ,states if the ,secretary determines such inclusion is necessary to prevent the avoidance of the tax imposed by this section4 7#c7 ,definitions and special rules 7,a7 ,in general ,the term combined foreign oil and gas income has the meaning given such term by section #ijg7;b77#a71 except that in applying paragraphs 7#a7 and 7#b7 of section #ijg7;c7 for purposes of section #ijg7;b77#a71 the term income shall be substituted for taxable income each place it appears4 7,b7 ,pro rata share ,an applicable taxpayer's pro rata share of any oil and gas import income shall be determined under rules similar to the rules under section #iea7;a77#b74 7,c7 ,prevention of double counting ,oil and gas import income 7and any deductions allocable to such income7 shall not be taken into account under paragraph 7#a7 to the extent already taken into account4 7g7 ,regulations or other guidance ,the ,secretary shall prescribe such regulations or other guidance as is necessary to carry out this section1 including regulations or other guidance for the application of subsections 7b77#b7 and 7e71 including regulations or other guidance-- 7#a7 for the application of such subsections in the case of tiered entities1 7#b7 for determining a person's allocable share where the non-separately stated taxable income of an entity is a loss1 and 7#c7 providing rules for the reporting1 including through tiered entities1 of excess profits4 7h7 ,termination ,this section shall not apply to any taxable year beginning after ,december #ca1 #bjbe4 4 7b7 ,tax not taken into account in computing estimated tax ,paragraph 7#a7 of section #ffed7;f7 of the ,internal ,revenue ,code of #aihf is amended by inserting #ei;,b or before #adc7m74 7c7 ,conforming amendment ,the table of subchapters for subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new item3 ,,part ,,viii--,windfall profits from oil and gas 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years ending after the date of the enactment of this ,act4 7e7 ,tax treated as rate change ,for purposes of section #ae7;a7 of the ,internal ,revenue ,code of #aihf1 the tax imposed by the amendments made by this section shall be treated in the same manner as a change in the rate of tax under chapter #a of such ,code4 #c4 ,excise tax on repurchase of corporate stock 7a7 ,in general ,subtitle ,d of the ,internal ,revenue ,code of #aihf is amended by inserting after chapter #cf the following new chapter3 #cg ,repurchase of corporate stock ,sec4 #dejb4 ,repurchase of corporate stock by oil and gas companies4 #dejb4 ,repurchase of corporate stock by oil and gas companies 7a7 ,general rule ,there is hereby imposed on each covered corporation a tax equal to #be percent of the fair market value of any stock of the corporation which is repurchased by such corporation during the taxable year4 7b7 ,covered corporation ,for purposes of this section1 the term covered corporation means1 with respect to any repurchase1 any domestic corporation-- 7#a7 the stock of which is traded on an established securities market 7within the meaning of section #ggjd7;b77#a771 and 7#b7 which is an applicable taxpayer 7as defined in section #ei;,b7 for the taxable year in which such repurchase occurs4 7c7 ,repurchase ,for purposes of this section-- 7#a7 ,in general ,the term repurchase means-- 7,a7 a redemption within the meaning of section #cag7;b7 with regard to the stock of a covered corporation1 and 7,b7 any transaction determined by the ,secretary to be economically similar to a transaction described in subparagraph 7,a74 7#b7 ,treatment of purchases by specified affiliates 7,a7 ,in general ,the acquisition of stock of a covered corporation by a specified affiliate of such covered corporation1 from a person who is not the covered corporation or a specified affiliate of such covered corporation1 shall be treated as a repurchase of the stock of the covered corporation by such covered corporation4 7,b7 ,specified affiliate ,for purposes of this section1 the term specified affiliate means1 with respect to any corporation-- 7i7 any corporation more than #ej percent of the stock of which is owned 7by vote or by value71 directly or indirectly1 by such corporation1 and 7ii7 any partnership more than #ej percent of the capital interests or profits interests of which is held1 directly or indirectly1 by such corporation4 7#c7 ,adjustment ,the amount taken into account under subsection 7a7 with respect to any stock repurchased by a covered corporation shall be reduced by the fair market value of any stock issued by the covered corporation during the taxable year1 including the fair market value of any stock issued or provided to employees of such covered corporation or a specified affiliate of such covered corporation during the taxable year1 whether or not such stock is issued or provided in response to the exercise of an option to purchase such stock4 7d7 ,special rules for acquisition of stock of certain foreign corporations 7#a7 ,in general ,in the case of an acquisition of stock of an applicable foreign corporation by a specified affiliate of such corporation 7other than a foreign corporation or a foreign partnership 7unless such partnership has a domestic entity as a direct or indirect partner77 from a person who is not the applicable foreign corporation or a specified affiliate of such applicable foreign corporation1 for purposes of this section-- 7,a7 such specified affiliate shall be treated as a covered corporation with respect to such acquisition1 7,b7 such acquisition shall be treated as a repurchase of stock of a covered corporation by such covered corporation1 and 7,c7 the adjustment under subsection 7c77#c7 shall be determined only with respect to stock issued or provided by such specified affiliate to employees of the specified affiliate4 7#b7 ,surrogate foreign corporations ,in the case of a repurchase of stock of a covered surrogate foreign corporation by such covered surrogate foreign corporation1 or an acquisition of stock of a covered surrogate foreign corporation by a specified affiliate of such corporation1 for purposes of this section-- 7,a7 the expatriated entity with respect to such covered surrogate foreign corporation shall be treated as a covered corporation with respect to such repurchase or acquisition1 7,b7 such repurchase or acquisition shall be treated as a repurchase of stock of a covered corporation by such covered corporation1 and 7,c7 the adjustment under subsection 7c77#c7 shall be determined only with respect to stock issued or provided by such expatriated entity to employees of the expatriated entity4 7#c7 ,definitions ,for purposes of this subsection-- 7,a7 ,applicable foreign corporation ,the term applicable foreign corporation means any foreign corporation-- 7i7 the stock of which is traded on an established securities market 7within the meaning of section #ggjd7;b77#a771 and 7ii7 with respect to which requirements of subparagraphs 7,b7 and 7,c7 of subsection 7b77#a7 are met with respect such corporation1 except that in applying such subparagraphs1 the taxable year of the acquisition of stock shall be substituted for the taxable year of purchase of stock4 7,b7 ,covered surrogate foreign corporation ,the term covered surrogate foreign corporation means any foreign corporation-- 7i7 which is a surrogate foreign corporation 7as determined under section #ghgd7;a77#b77;,b7 by substituting ,september #bj1 #bjba for ,march #d1 #bjjc each place it appears7 the stock of which is traded on an established securities market 7within the meaning of section #ggjd7;b77#a771 but only with respect to taxable years which include any portion of the applicable period with respect to such corporation under section #ghgd7;d77#a71 and 7ii7 with respect to which requirements of subparagraphs 7,b7 and 7,c7 of subsection 7b77#a7 are met with respect to the taxable year of the repurchase of stock of such corporation4 7,c7 ,expatriated entity ,the term expatriated entity has the meaning given such term by section #ghgd7;a77#b77;,a74 7e7 ,exceptions ,subsection 7a7 shall not apply-- 7#a7 to the extent that the repurchase is part of a reorganization 7within the meaning of section #cfh7;a77 and no gain or loss is recognized on such repurchase by the shareholder under chapter #a by reason of such reorganization1 7#b7 in any case in which the stock repurchased is1 or an amount of stock equal to the value of the stock repurchased is1 contributed to an employer-sponsored retirement plan1 employee stock ownership plan1 or similar plan1 7#c7 in any case in which the total value of the stock repurchased during the taxable year does not exceed #a1jjj1jjj1 7#d7 to repurchases by a regulated investment company 7as defined in section #hea7 or a real estate investment trust1 or 7#e7 to the extent that the repurchase is treated as a dividend for purposes of this title4 7f7 ,regulations and guidance ,the ,secretary shall prescribe such regulations and other guidance as are necessary or appropriate to administer and to prevent the avoidance of the purposes of this section1 including regulations and other guidance-- 7#a7 to prevent the abuse of the exceptions provided by subsection 7e71 7#b7 to address special classes of stock and preferred stock1 and 7#c7 for the application of the rules under subsection 7d74 7g7 ,termination ,this section shall not apply to repurchases after ,december #ca1 #bjbe4 4 7b7 ,tax not deductible ,paragraph 7#f7 of section #bge7;a7 of the ,internal ,revenue ,code of #aihf is amended by inserting #cg1 before #da4 7c7 ,clerical amendment ,the table of chapters for subtitle ,d of the ,internal ,revenue ,code of #aihf is amended by inserting after the item relating to chapter #cf the following new item3 ,chapter #cg--,repurchase of corporate stock 4 7d7 ,effective date ,the amendments made by this section shall apply to repurchases 7within the meaning of section #dejb7;c7 of the ,internal ,revenue ,code of #aihf1 as added by this section7 of stock after the date of the enactment of this ,act4 #d4 ,termination of ,,lifo inventories for certain oil and gas companies 7a7 ,in general ,section #dgb of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7h7 ,termination for oil and natural gas companies 7#a7 ,termination ,except as provided in paragraph 7#b71 subsection 7a7 shall not apply to any trade or business primarily consisting of one or more of the following3 7,a7 ,the production of oil or natural gas4 7,b7 ,the refining of oil or natural gas4 7,c7 ,the processing of oil or natural gas4 7,d7 ,the transportation of oil or natural gas4 7,e7 ,the distribution of oil or natural gas4 7#b7 ,exception 7,a7 ,in general ,paragraph 7#a7 shall not apply to any trade or business of a person for any taxable year if the average annual gross receipts of all trades or businesses of such person for the #c-taxable-year period ending with the taxable year which precedes such taxable year does not exceed #a1jjj1jjj1jjj4 7,b7 ,applicable rules ,for purposes of subparagraph 7,a7 rules similar to the rules of paragraphs 7#b7 and 7#c7 of section #ddh7;c7 shall apply4 4 7b7 ,change in method of accounting ,if any taxpayer is required by the amendments made by this section to change its method of accounting in taxable years beginning after ,december #ca1 #bjbb1 then1 for purposes of section #dha of the ,internal ,revenue ,code of #aihf-- 7#a7 such change shall be treated as initiated by the taxpayer2 and 7#b7 such change shall be treated as made with the consent of the ,secretary of the ,treasury4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbb4