Raise And Index to Sustainably and Efficiently Invest in Transportation Act of 2017

Summary: Raise And Index to Sustainably and Efficiently Invest in Transportation Act of 2017 or the RAISE IT Act This bill expresses the sense of Congress that by 2027&nbsp;the gas tax should be repealed and replaced with a more sustainable, stable funding source.  The bill amends the Internal Revenue Code, with respect to the excise tax on motor fuels, to increase the rate of tax on:   gasoline other than aviation gasoline to 26.3 cents per gallon in 2018, 30.3 cents per gallon in 2019, and 33.3 cents per gallon after 2019 and before 2030;   diesel fuel or kerosene to 32.3 cents per gallon in 2018, 36.3 cents per gallon in 2019, and 39.3 cents per gallon after 2019 and before 2029; and   diesel-water fuel emulsion.   The bill delays the termination of such increased rates from the end of FY2022 to December 31, 2028, and requires an adjustment for inflation to such increased rates beginning after 2019. It also: (1) increases allocations in the Mass Transit Account of the Highway Trust Fund in 2018, 2019, and after 2019; and (2) imposes a floor stocks tax on&nbsp;rate increases for gasoline, diesel fuel, and&nbsp; kerosene (other than aviation-grade kerosene), subject to specified exemptions for exempt uses and low-volume producers. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Raise And Index to Sustainably and 
Efficiently Invest in Transportation Act of 2017'' or the ``RAISE IT 
Act''.

SEC. 2. FINDINGS; SENSE OF CONGRESS.

    (a) Findings.--The Congress finds the following:
            (1) Since the passage of SAFETEA-LU, Congress has 
        transferred over $140 billion from the General Fund to the 
        Highway Trust Fund, in order to maintain solvency.
            (2) The Congressional Budget Office estimates after the end 
        of Fiscal year 2021, annual General Fund transfers of over $20 
        billion will be necessary in order to maintain current Highway 
        Trust Fund spending levels.
            (3) The American Society for Civil Engineers estimates that 
        in order to meet our economic and transportation needs, the 
        United States should invest an additional $1.1 trillion in our 
        surface transportation system by 2025.
            (4) The National Commission on Fiscal Reform and 
        Responsibility report, often referred to as the ``Simpson-
        Bowles'' plan, includes a recommendation to raise the gas tax 
        by fifteen cents.
            (5) The National Surface Transportation Infrastructure 
        Financing Commission recommended, in their 2009 report, that 
        Congress take action to prevent the Highway Trust Fund from 
        becoming insolvent, and to avoid any reductions in 
        infrastructure spending. The Commission also noted that a 
        Federal funding system based on a vehicle miles traveled 
        system, is the consensus choice for the future.
            (6) Nine different states raised gas taxes to generate 
        transportation revenue in 2015 and 2016.
    (b) Sense of Congress Regarding Replacement of Gas Tax.--It is the 
sense of Congress that by 2027 the gas tax should be repealed and 
replaced with a more sustainable, stable funding source.

SEC. 3. TAX ON MOTOR FUELS.

    (a) Gasoline Other Than Aviation Gasoline.--Section 
4081(a)(2)(A)(i) of the Internal Revenue Code of 1986 is amended to 
read as follows:
                            ``(i) in the case of gasoline other than 
                        aviation gasoline--
                                    ``(I) for tax imposed before 2018, 
                                18.3 cents per gallon,
                                    ``(II) for tax imposed during 2018, 
                                26.3 cents per gallon,
                                    ``(III) for tax imposed during 
                                2019, 30.3 cents per gallon, and
                                    ``(IV) for tax imposed after 2019 
                                and before 2030, 33.3 cents per 
                                gallon,''.
    (b) Diesel Fuel or Kerosene.--Section 4081(a)(2)(A)(iii) of the 
Internal Revenue Code of 1986 is amended to read as follows:
                            ``(iii) in the case of diesel fuel or 
                        kerosene--
                                    ``(I) for tax imposed before 2018, 
                                24.3 cents per gallon,
                                    ``(II) for tax imposed during 2018, 
                                32.3 cents per gallon,
                                    ``(III) for tax imposed during 
                                2019, 36.3 cents per gallon, and
                                    ``(IV) for tax imposed after 2019 
                                and before 2029, 39.3 cents per 
                                gallon,''.
    (c) Increase for Inflation.--Paragraph (2) of section 4081(a) of 
such Code is amended by adding at the end the following:
                    ``(E) Adjustment for inflation.--In the case of any 
                calendar year beginning after 2019, the rates of tax 
                contained in clauses (i)(IV) and (iii)(IV) of 
                subparagraph (A) shall each be increased by an amount 
                equal to--
                            ``(i) such rate, multiplied by
                            ``(ii) the cost of living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year, determined by substituting 
                        `calendar year 2018' for `calendar year 1992' 
                        in subparagraph (B) thereof.
                Any increase under the preceding sentence shall be 
                rounded to the nearest 0.1 cents.''.
    (d) Diesel-Water Fuel Emulsion.--Section 4081(a)(2)(D) of the 
Internal Revenue Code of 1986 is amended by striking ``19.7 cents'' for 
``24.3 cents'' and inserting ``a rate equal to 71 percent of the rate 
in effect under subparagraph (A) (without regard to this 
subparagraph)''.
    (e) Termination.--Section 4081(d)(1) of the Internal Revenue Code 
of 1986 is amended by striking ``September 30, 2022'' and inserting 
``December 31, 2028''.
    (f) Allocation in Accounts in Highway Trust Fund.--
            (1) In general.--Section 9503(e)(2)(A) of the Internal 
        Revenue Code of 1986 is amended to read as follows:
                    ``(A) except as otherwise provided in this 
                sentence--
                            ``(i) 2.86 cents per gallon with respect to 
                        taxes imposed during calendar year 2017,
                            ``(ii) 3.86 cents per gallon with respect 
                        to taxes imposed during calendar year 2018,
                            ``(iii) 4.86 cents per gallon with respect 
                        to taxes imposed during calendar year 2019, and
                            ``(iv) 5.86 cents per gallon with respect 
                        to taxes imposed after calendar year 2019,''.
            (2) Adjustment for inflation.--Section 9503(e) of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following new paragraph:
            ``(6) Adjustment for inflation.--In the case of any 
        calendar year beginning after 2019, the rate of tax contained 
        in paragraph (2)(A)(iv) shall be increased by an amount equal 
        to--
                    ``(A) such rate, multiplied by
                    ``(B) the cost of living adjustment determined 
                under section 1(f)(3) for the calendar year, determined 
                by substituting `calendar year 2018' for `calendar year 
                1992' in subparagraph (B) thereof.
        Any increase under the preceding sentence shall be rounded to 
        the nearest 0.1 cents.''.
    (g) Effective Date.--The amendments made by this section shall 
apply to fuels or liquids removed, entered, or sold after December 31, 
2017.

SEC. 4. FLOOR STOCKS TAX.

    (a) Imposition of Tax.--In the case of any taxable liquid which is 
held on the floor stocks tax date by any person, there is hereby 
imposed a floor stocks tax equal to the excess of the tax which would 
be imposed on such liquid under section 4041 or 4081 of the Internal 
Revenue Code of 1986 had the taxable event occurred on the floor stocks 
tax date over the tax paid under any such section on such liquid.
    (b) Liability for Tax and Method of Payment.--
            (1) Liability for tax.--A person holding a liquid on the 
        floor stocks tax date to which the tax imposed by subsection 
        (a) applies shall be liable for such tax.
            (2) Method of payment.--The tax imposed by subsection (a) 
        shall be paid in such manner as the Secretary shall prescribe.
            (3) Time of payment.--The tax imposed by subsection (a) 
        shall be paid on or before the date which is 6 months after the 
        floor stocks tax date.
    (c) Definitions.--For purposes of this section--
            (1) Held by a person.--A liquid shall be considered as held 
        by a person if title thereto has passed to such person (whether 
        or not delivery to the person has been made).
            (2) Taxable liquid.--The term ``taxable liquid'' means 
        diesel fuel and kerosene (other than aviation-grade kerosene).
            (3) Floor stocks date.--The term ``floor stocks tax date'' 
        means any January 1 of any calendar year beginning after the 
        date of the enactment of this Act on which a rate of tax under 
        section 4041 or 4081 of such Code increases pursuant to an 
        amendment made by section 2.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
    (d) Exception for Exempt Uses.--The tax imposed by subsection (a) 
shall not apply to taxable liquid held by any person exclusively for 
any use to the extent a credit or refund of the tax imposed by a 
section of such Code is allowable for such use.
    (e) Exception for Fuel Held in Vehicle Tank.--No tax shall be 
imposed by subsection (a) on taxable liquid held in the tank of a motor 
vehicle or motorboat.
    (f) Exception for Certain Amounts of Fuel.--
            (1) In general.--No tax shall be imposed by subsection (A) 
        on any liquid held on the floor stocks tax date by any person 
        if the aggregate amount of liquid held by such person on such 
        date does not exceed 2,000 gallons. The preceding sentence 
        shall apply only if such person submits to the Secretary (at 
        the time and in the manner required by the Secretary) such 
        information as the Secretary shall require for purposes of this 
        paragraph.
            (2) Exempt fuel.--For purposes of paragraph (1), there 
        shall not be taken into account fuel held by any person which 
        is exempt from the tax imposed by subsection (a) by reason of 
        subsection (d) or (e).
            (3) Controlled groups.--For purposes of this section--
                    (A) Corporations.--
                            (i) In general.--All persons treated as a 
                        controlled group shall be treated as 1 person.
                            (ii) Controlled group.--The term 
                        ``controlled group'' has the meaning given to 
                        such term by subsection (a) of section 1563 of 
                        such Code; except that for such purposes the 
                        phrase ``more than 50 percent'' shall be 
                        substituted for the phrase ``at least 80 
                        percent'' each place it appears in such 
                        subsection.
                    (B) Nonincorporated persons under common control.--
                Under regulations prescribed by the Secretary, 
                principles similar to the principles of clause (i) 
                shall apply to a group of persons under common control 
                where one or more of such persons is not a corporation.
    (g) Other Laws Applicable.--All provisions of law, including 
penalties, applicable with respect to the taxes imposed by chapter 31 
or 32 of such Code shall, insofar as applicable and not inconsistent 
with the provisions of this section, apply with respect to the floor 
stock taxes imposed by subsection (a) to the same extent as if such 
taxes were imposed by such chapter.