Senate Democrats have proposed legislation that would roll back $17 billion in tax breaks for oil and gas companies and impose a 25 percent windfall profits tax on the companies.

The Consumer-First Energy Act of 2008 invests the money in improving consumer price protection, renewable energy development and energy efficiency technology through a designated Energy Independence and Security Trust Fund.

The windfall profits tax would apply to companies that fail to invest in increased capacity and renewable energy sources. The provision would not apply to the profits that companies reinvested in clean, affordable, domestically produced renewable fuels, expanding refinery capacity and utilization, or renewable electricity production.

"Instead of helping Big Oil make more money at the expense of average Americans, we are forcing oil companies to change their ways," said Senate Majority Leader Harry Reid (pictured), D-Nev.

The bill would also halt government purchases of oil for the strategic petroleum reserve until the 90-day average price of crude oil retreats to $75 a barrel or less. The proposed legislation aims to protect consumers from price gouging by giving the president the authority to declare an energy emergency should there be a shortage, disruption or significant pricing anomalies in the oil market. The bill also contains provisions to discourage market price speculation by preventing traders of U.S. crude oil from routing transactions through off-shore markets to evade speculative limits.

The bill mandates that the Commodities Futures Trading Commission set a substantial increase in the margin requirement for all oil futures trades, contracts or transactions. The bill also takes aim at OPEC by allowing the U.S. Attorney General to bring an enforcement action against any country or company that is colluding to set the price of oil, natural gas or any other petroleum product.

However, Republican leaders have signaled their opposition to many provisions of the bill. "Their proposal will do nothing to lower the price of gas," said Senate Minority Leader Mitch McConnell, R-Ken.

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