I

104TH CONGRESS

2D SESSION H. R. 2934

To eliminate certain Federal programs and subsidies.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 1, 1996

Mr. BLUTE introduced the following bill; which was referred to the Committee

on Ways and Means, and in addition to the Committee on Agriculture,

for a period to be subsequently determined by the Speaker, in each case

for consideration of such provisions as fall within the jurisdiction of the

committee concerned

A BILL

To eliminate certain Federal programs and subsidies.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Taxpayer Savings Act of 1996’’.

6 (b) TABLE OF CONTENTS.—The table of contents of

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Market promotion program.

Sec. 3. Export enhancement program.

Sec. 4. Animal damage control.

Sec. 5. Termination of tax subsidies for ethanol.
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Sec. 6. Termination of price support and production adjustment programs for

sugar beets and sugarcane.

Sec. 7. Termination of peanut quota and price support programs.

1 SEC. 2. MARKET PROMOTION PROGRAM.

2 (a) IN GENERAL.—Section 203 of the Agricultural

3 Trade Act of 1978 (7 U.S.C. 5623) is repealed.

4 (b) CONFORMING AMENDMENTS.—

5 (1) Section 211 of the Act (7 U.S.C. 5641) is

6 amended by striking subsection (c) .

7 (2) Section 402(a)(1) of the Act (7 U.S.C.

8 5662(a)(1)) is amended by striking ‘‘203,’’.

9 (3) Section 1302 of the Omnibus Budget Rec10 onciliation Act of 1993 (Public Law 103–66; 7

11 U.S.C. 5623 note) is repealed.

12 SEC. 3. EXPORT ENHANCEMENT PROGRAM.

13 (a) IN GENERAL.—Section 301 of the Agricultural

14 Trade Act of 1978 (7 U.S.C. 5651) is repealed.

15 (b) CONFORMING AMENDMENTS.—

16 (1) Section 103(d)(2) of the Act (7 U.S.C.

17 5603(d)(2)) is amended by striking ‘‘(as amended)

18 and the program under section 301’’.

19 (2) The title heading of title III of the Act (7

20 U.S.C. prec. 5651) is amended to read as follows:
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1 ‘‘TITLE III—RELIEF FROM

2 UNFAIR TRADE PRACTICES’’.

3 (3) Section 303 of the Act (7 U.S.C. 5653) is

4 amended by striking ‘‘, such as that established

5 under section 301,’’.

6 (4) Section 401 of the Act (7 U.S.C. 5661) is

7 amended by striking ‘‘sections 201, 202, and 301’’

8 each place it appears in subsections (a) and (b) and

9 inserting ‘‘sections 201 and 202’’.

10 (5) Section 402(a)(1) of the Act (7 U.S.C.

11 5662(a)(1)) (as amended by section 301(b)(2)) is

12 further amended by striking ‘‘sections 201, 202, and

13 301’’ and inserting ‘‘sections 201 and 202’’.

14 SEC. 4. ANIMAL DAMAGE CONTROL.

15 The last proviso of the matter under the heading

16 ‘‘Animal and Plant Health Inspection Service’’ of title I

17 of the Rural Development, Agriculture, and Related Agen18 cies Appropriations Act, 1986 (Public Law 100–202; 101

19 Stat. 1329–331; 7 U.S.C. 426c) is amended by striking

20 ‘‘: Provided further, That hereafter,’’ and all that follows

21 through ‘‘Animal Damage Control activities’’.

22 SEC. 5. TERMINATION OF TAX SUBSIDIES FOR ETHANOL.

23 (a) REPEAL OF CREDITS—Subpart D of part IV of

24 subchapter A of chapter 1 of the Internal Revenue Code
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1 of 1986 is amended by striking section 40 (relating to al2 cohol used as fuel).

3 (b) CONFORMING TERMINATIONS OF OTHER INCEN4 TIVES FOR ETHANOL FUEL.—

5 (1) REPEAL OF REDUCED RATE ON ETHANOL

6 FUEL PRODUCED OTHER THAN FROM PETROLEUM

7 OR NATURAL GAS.—Subsection (b) of section 4041

8 of such Code is amended to read as follows:

9 ‘‘(b) EXEMPTION FOR OFF-HIGHWAY BUSINESS

10 USE.—

11 ‘‘(1) IN GENERAL.—No tax shall be imposed by

12 subsection (a) or (d)(1) on liquids sold for use or

13 used in an off-highway business use.

14 ‘‘(2) TAX WHERE OTHER USE.—If a liquid on

15 which no tax was imposed by reason of paragraph

16 (1) is used otherwise than in an off-highway busi17 ness use, a tax shall be imposed by paragraph

18 (1)(B), (2)(B), or (3)(A)(ii) of subsection (a)

19 (whichever is appropriate) and by the corresponding

20 provision of subsection (d)(1) (if any).

21 ‘‘(3) OFF-HIGHWAY BUSINESS USE DEFINED.—

22 For purposes of this subsection, the term ‘off-high23 way business use’ has the meaning given to such

24 term by section 6421(e)(2); except that such term
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1 shall not, for purposes of subsection (a)(1), include

2 use in a diesel-powered train.’’

3 (2) REPEAL OF REDUCED RATE ON ETHANOL

4 FUEL PRODUCED FROM NATURAL GAS.—Subsection

5 (m) of section 4041 of such Code is amended—

6 (A) by striking ‘‘or ethanol’’ each place it

7 appears (including the heading of paragraph

8 (2)), and

9 (B) by striking ‘‘, ethanol, or other alco10 hol’’ in paragraph (2) and inserting ‘‘or other

11 alcohol (other than ethanol)’’.

12 (c) CONFORMING AMENDMENTS TO EXCISE TAXES;

13 FUEL ALCOHOL TAXED IN SAME MANNER AS OTHER

14 MOTOR FUELS.—

15 (1) IN GENERAL.—Paragraph (1) of section

16 4083(a) of such Code (defining taxable fuel) is

17 amended by striking ‘‘and’’ at the end of subpara18 graph (A), by striking the period at the end of sub19 paragraph (B) and inserting ‘‘, and’’, and by adding

20 at the end the following:

21 ‘‘(C) fuel alcohol.’’

22 (2) FUEL ALCOHOL.—Subsection (a) of section

23 4083 of such Code is amended by adding at the end

24 the following new paragraph:
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1 ‘‘(4) FUEL ALCOHOL.—The term ‘fuel alcohol’

2 means any alcohol (including ethanol and meth3 anol)—

4 ‘‘(A) which is produced other than from

5 petroleum, natural gas, or coal (including peat),

6 and

7 ‘‘(B) which is withdrawn from the distillery

8 where produced free of tax under chapter 51 by

9 reason of section 5181 or so much of section

10 5214(a)(1) as relates to fuel use.’’

11 (3) RATE OF TAX.—Clause (i) of section

12 4081(a)(2)(A) of such Code is amended by inserting

13 ‘‘or fuel alcohol’’ after ‘‘gasoline’’.

14 (4) SPECIAL RULES FOR IMPOSITION OF TAX.—

15 Paragraph (1) of section 4081(a) of such Code is

16 amended by adding at the end the following new

17 subparagraph:

18 ‘‘(C) SPECIAL RULES FOR FUEL ALCO19 HOL.—In the case of fuel alcohol—

20 ‘‘(i) the distillery where produced shall

21 be treated as a refinery, and

22 ‘‘(ii) subparagraph (B) shall be ap23 plied by including transfers by truck or rail

24 in excess of such minimum quantities as

25 the Secretary shall prescribe.’’
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1 (5) REPEAL OF REDUCED RATES ON ALCOHOL

2 FUELS.—

3 (A) Section 4041 of such Code is amended

4 by striking subsection (k).

5 (B) Section 4081 of such Code is amended

6 by striking subsection (c).

7 (C) Section 4091 of such Code is amended

8 by striking subsection (c).

9 (6) CONFORMING AMENDMENTS.—

10 (A) Paragraph (2) of section 4041(a) of

11 such Code is amended by adding at the end the

12 following: ‘‘No tax shall be imposed by this

13 paragraph on the sale or use of any liquid if tax

14 was imposed on such liquid under section 4081

15 and the tax thereon was not credited or re16 funded.’’

17 (B) Section 6427 of such Code is amended

18 by striking subsection (f).

19 (C) Subsection (i) of section 6427 of such

20 Code is amended by striking paragraph (3).

21 (D) Paragraph (2) of section 6427(k) of

22 such Code is amended by striking ‘‘(3)’’.

23 (E)(i) Paragraph (1) of section 6427(l) of

24 such Code is amended by striking ‘‘or’’ at the

25 end of subparagraph (A), by redesignating sub-
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1 paragraph (B) as subparagraph (C), and by in2 serting after subparagraph (A) the following

3 new subparagraph:

4 ‘‘(B) any fuel alcohol (as defined in section

5 4083) on which tax has been imposed by sec6 tion 4081, or’’.

7 (ii) Paragraph (2) of section 6427(l) of

8 such Code is amended by striking ‘‘and’’ at the

9 end of subparagraph (A), by redesignating sub10 paragraph (B) as subparagraph (C), and by in11 serting after subparagraph (A) the following

12 new subparagraph:

13 ‘‘(B) in the case of fuel alcohol (as so de14 fined), any use which is exempt from the tax

15 imposed by section 4041(a)(2) other than by

16 reason of a prior imposition of tax, and’’.

17 (iii) The heading of subsection (l) of sec18 tion 6427 of such Code is amended by inserting

19 ‘‘, FUEL ALCOHOL,’’ after ‘‘DIESEL FUEL’’.

20 (F) Sections 9503(b)(1)(E) and

21 9508(b)(2) of such Code are each amended by

22 striking ‘‘and diesel fuel’’ and inserting ‘‘diesel

23 fuel, and fuel alcohol’’.
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1 (G) Section 9502 of such Code is amended

2 by striking subsection (e) and by redesignating

3 subsection (f) as subsection (e).

4 (H) Subsection (e) of section 9502 of such

5 Code (as redesignated by subparagraph (I)) is

6 amended by striking paragraph (2) and by re7 designating paragraph (3) as paragraph (2).

8 (I) Subsection (b) of section 9503 of such

9 Code is amended by striking paragraph (5).

10 (J) Paragraph (3) of section 9503(f) of

11 such Code is amended to read as follows:

12 ‘‘(3) PARTIALLY EXEMPT METHANOL OR ETHA13 NOL FUEL.—In the case of a rate of tax determined

14 under section 4041(m), the Highway Trust Fund fi15 nancing rate is the excess (if any) of the rate so de16 termined over—

17 ‘‘(A) 5.55 cents per gallon after September

18 30, 1993, and before October 1, 1995, and

19 ‘‘(B) 4.3 cents per gallon after September

20 30, 1995.’’

21 (d) TECHNICAL AND CLERICAL AMENDMENTS.—

22 (1) AMENDMENT TO GENERAL BUSINESS CRED23 IT.—Subsection (b) of section 38 of such Code is

24 amended by striking paragraph (3) and redesignat-
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1 ing paragraphs (4) through (11) as paragraphs (3)

2 through (10), respectively.

3 (2) CLERICAL AMENDMENT.—The table of sec4 tions for subpart D of part IV of subchapter A of

5 chapter 1 of such Code is amended by striking the

6 item relating to section 40.

7 (e) EFFECTIVE DATE.—The amendments made by

8 this section shall apply to sales and uses after the expira9 tion of the 90-day period beginning on the date of the en10 actment of this Act.

11 (f) FLOOR STOCK TAXES.—

12 (1) IMPOSITION OF TAX.—In the case of fuel al13 cohol which is held on the applicable date by any

14 person, there is hereby imposed a floor stocks tax of

15 18.4 cents per gallon.

16 (2) LIABILITY FOR TAX AND METHOD OF PAY17 MENT.—

18 (A) LIABILITY FOR TAX.—A person hold19 ing, on the applicable date, fuel alcohol to which

20 the tax imposed by paragraph (1) applies shall

21 be liable for such tax.

22 (B) METHOD OF PAYMENT.—The tax im23 posed by paragraph (1) shall be paid in such

24 manner as the Secretary shall prescribe.
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1 (C) TIME FOR PAYMENT.—The tax im2 posed by paragraph (1) shall be paid on or be3 fore the date occurring 6 months after the ap4 plicable date.

5 (3) DEFINITIONS.—For purposes of this sub6 section—

7 (A) APPLICABLE DATE.—The term ‘‘appli8 cable date’’ means the first day occurring after

9 the expiration of the 90-day period beginning

10 on the date of the enactment of this Act.

11 (B) FUEL ALCOHOL.—The term ‘‘fuel alco12 hol’’ has the meaning given such term by sec13 tion 4083 of the Internal Revenue Code of

14 1986, as amended by this section.

15 (C) HELD BY A PERSON.—Fuel alcohol

16 shall be considered as ‘‘held by a person’’ if

17 title thereto has passed to such person (whether

18 or not delivery to the person has been made).

19 (D) SECRETARY.—The term ‘‘Secretary’’

20 means the Secretary of the Treasury or his del21 egate.

22 (4) EXCEPTION FOR EXEMPT USES.—The tax

23 imposed by paragraph (1) shall not apply to fuel al24 cohol held by any person exclusively for any use to

25 the extent a credit or refund of the tax imposed by
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1 section 4081 of the Internal Revenue Code of 1986

2 is allowable for such use.

3 (5) EXCEPTION FOR FUEL HELD IN VEHICLE

4 TANK.—No tax shall be imposed by paragraph (1)

5 on fuel alcohol held in the tank of a motor vehicle

6 or motorboat.

7 (6) EXCEPTION FOR CERTAIN AMOUNTS OF

8 FUEL.—

9 (A) IN GENERAL.—No tax shall be im10 posed by paragraph (1) on fuel alcohol held on

11 the applicable date by any person if the aggre12 gate amount of fuel alcohol held by such person

13 on such date does not exceed 2,000 gallons.

14 The preceding sentence shall apply only if such

15 person submits to the Secretary (at the time

16 and in the manner required by the Secretary)

17 such information as the Secretary shall require

18 for purposes of this paragraph.

19 (B) EXEMPT FUEL.—For purposes of sub20 paragraph (A), there shall not be taken into ac21 count fuel held by any person which is exempt

22 from the tax imposed by paragraph (1) by rea23 son of paragraph (4) or (5).

24 (C) CONTROLLED GROUPS.—For purposes

25 of this paragraph—
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1 (i) CORPORATIONS.—

2 (I) IN GENERAL.—All persons

3 treated as a controlled group shall be

4 treated as 1 person.

5 (II) CONTROLLED GROUP.—The

6 term ‘‘controlled group’’ has the

7 meaning given to such term by sub8 section (a) of section 1563 of such

9 Code; except that for such purposes

10 the phrase ‘‘more than 50 percent’’

11 shall be substituted for the phrase ‘‘at

12 least 80 percent’’ each place it ap13 pears in such subsection.

14 (ii) NONINCORPORATED PERSONS

15 UNDER COMMON CONTROL.—Under regula16 tions prescribed by the Secretary, prin17 ciples similar to the principles of clause (i)

18 shall apply to a group of persons under

19 common control where 1 or more of such

20 persons is not a corporation.

21 (7) OTHER LAWS APPLICABLE.—All provisions

22 of law, including penalties, applicable with respect to

23 the taxes imposed by section 4081 of such Code

24 shall, insofar as applicable and not inconsistent with

25 the provisions of this subsection, apply with respect
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1 to the floor stock taxes imposed by paragraph (1) to

2 the same extent as if such taxes were imposed by

3 such section 4081.

4 SEC. 6. TERMINATION OF PRICE SUPPORT AND PRODUC5 TION ADJUSTMENT PROGRAMS FOR SUGAR

6 BEETS AND SUGARCANE.

7 (a) TERMINATION OF PRICE SUPPORT PROGRAM.—

8 (1) PRICE SUPPORT LEVELS FOR DESIGNATED

9 NONBASIC AGRICULTURAL COMMODITIES.—Section

10 201(a) of the Agricultural Act of 1949 (7 U.S.C.

11 1446(a)) is amended by striking ‘‘milk, sugar beets,

12 and sugarcane’’ and inserting ‘‘and milk’’.

13 (2) SUGAR PRICE SUPPORT.—Section 206 of

14 such Act (7 U.S.C. 1446g) is repealed.

15 (3) BENEFITS.—Section 401(e) of such Act (7

16 U.S.C. 1421(e)) is amended—

17 (A) in paragraph (1), by striking ‘‘(1)’’;

18 and

19 (B) by striking paragraph (2).

20 (4) PERSONAL LIABILITY OF PRODUCERS FOR

21 DEFICIENCIES.—Section 405 of such Act (7 U.S.C.

22 1425) is amended—

23 (A) in subsection (a), by striking ‘‘(a)’’;

24 and

25 (B) by striking subsection (b).
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1 (5) POWERS OF COMMODITY CREDIT CORPORA2 TION.—Section 5(a) of the Commodity Credit Cor3 poration Charter Act (7 U.S.C. 714c(a)) is amended

4 by inserting ‘‘(except for sugar beets and sugar5 cane)’’ after ‘‘agricultural commodities’’.

6 (b) TERMINATION OF ACREAGE ALLOTMENTS AND

7 MARKETING QUOTAS.—

8 (1) TERMINATION.—Part VII of subtitle B of

9 title III of the Agricultural Adjustment Act of 1938

10 (7 U.S.C. 1359aa–1359jj) is repealed.

11 (2) CONFORMING AMENDMENT.—Section

12 344(f)(2) of such Act (7 U.S.C. 1344(f)(2)) is

13 amended by striking ‘‘sugar cane for sugar, sugar

14 beets for sugar,’’.

15 (c) CONFORMING AMENDMENT REGARDING PREVEN16 TION OF GOVERNMENT ACCUMULATION OF SUGAR.—Sec17 tion 902 of the Food Security Act of 1985 (7 U.S.C.

18 1446g note) is amended—

19 (1) by striking subsection (a); and

20 (2) by redesignating subsections (b) and (c) as

21 subsections (a) and (b), respectively.

22 (d) CONFORMING AMENDMENT REGARDING SECTION

23 32 ACTIVITIES.—The second sentence of the first para24 graph of section 32 of the Act of August 24, 1935 (7

25 U.S.C. 612c), is amended by inserting ‘‘(other than sugar
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1 beets and sugarcane)’’ after ‘‘commodity’’ the last place

2 it appears.

3 (e) PROHIBITION ON SUBSEQUENT PROVISION OF

4 PRICE SUPPORT.—

5 (1) PROHIBITION.—After the effective date of

6 this Act, the Secretary of Agriculture may not make

7 price support available, whether in the form of loans,

8 payments, purchases, or other operations, for crops

9 of sugar beets or sugarcane by using the funds of

10 the Commodity Credit Corporation or under the au11 thority of any law.

12 (2) EXCEPTION.—Notwithstanding paragraph

13 (1), the Secretary shall settle any outstanding loans

14 under section 206 of the Agricultural Act of 1949 (7

15 U.S.C. 1446g) made before the effective date of this

16 Act.

17 (f) EFFECT ON EXISTING LIABILITY.—The amend18 ments made by this section shall not affect the liability

19 of any person under any provision of law as in effect be20 fore the effective date of this Act.

21 (g) EFFECTIVE DATE.—This section and the amend22 ments made by this section shall take effect on October

23 1, 1996.
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1 SEC. 7. TERMINATION OF PEANUT QUOTA AND PRICE SUP2 PORT PROGRAMS.

3 (a) MARKETING QUOTAS.—Part VI of subtitle B of

4 title III of the Agricultural Adjustment Act of 1938 (7

5 U.S.C. 1357–1359a), relating to peanuts, is repealed.

6 (b) PRICE SUPPORT LEVELS.—The Agricultural Act

7 of 1949 (7 U.S.C. 1441 et seq.) is amended—

8 (1) in section 101(b) (7 U.S.C. 1441(b)), by

9 striking ‘‘and peanuts’’;

10 (2) in section 408(c) (7 U.S.C. 1428(c)), by

11 striking ‘‘peanuts,’’; and

12 (3) by striking sections 108, 108A, and 108B,

13 relating to peanuts (7 U.S.C. 1445c through 1445c–

14 3).

15 (c) PROHIBITION ON SUBSEQUENT PROVISION OF

16 PRICE SUPPORT.—

17 (1) PROHIBITION.—After the effective date of

18 this Act, the Secretary of Agriculture may not make

19 price support available, whether in the form of loans,

20 purchases, or other operations, to peanut producers

21 by using the funds of the Commodity Credit Cor22 poration or under the authority of any law.

23 (2) EXCEPTION.—Notwithstanding paragraph

24 (1), the Secretary shall settle any outstanding loans

25 under section 108B of the Agricultural Act of 1949
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1 (7 U.S.C. 1445c–3) made before the effective date

2 of this Act.

3 (d) CONTINUED LIABILITY OF PRODUCERS.—An

4 amendment made by this section shall not affect the liabil5 ity of any person under any provision of law as in effect

6 before the effective date of this Act.

7 (e) EFFECT ON EXISTING LIABILITY.—The amend8 ments made by this section shall not affect the liability

9 of any person under any provision of law as in effect be10 fore the effective date of this Act.

11 (g) EFFECTIVE DATE.—This section and the amend12 ments made by this section shall take effect on October

13 1, 1996.

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