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104TH CONGRESS

1ST SESSION H. R. 1956

To amend the Internal Revenue Code of 1986 to provide a moratorium

for the excise tax on diesel fuel sold for use or used in noncommercial

diesel-powered motorboats and to require the Secretary of the Treasury

to study the effectiveness of procedures to collect excises taxes on sales

of diesel fuel for noncommercial motorboat use.

IN THE HOUSE OF REPRESENTATIVES

JUNE 29, 1995

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

on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide

a moratorium for the excise tax on diesel fuel sold for

use or used in noncommercial diesel-powered motorboats

and to require the Secretary of the Treasury to study

the effectiveness of procedures to collect excises taxes

on sales of diesel fuel for noncommercial motorboat use.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. MORATORIUM FOR EXCISE TAX ON DIESEL

2 FUEL SOLD FOR USE OR USED IN DIESEL3 POWERED MOTORBOATS.

4 (a) Section 4041 of the Internal Revenue Code of

5 1986 (relating to the imposition of tax on diesel fuel and

6 special motor fuels), as amended by section 13163 of the

7 Omnibus Budget Reconciliation Act of 1993, is amended

8 by deleting subparagraph (D) of section 4041(a)(1) and

9 substituting the following new subparagraph (D):

10 ‘‘(D) DIESEL FUEL USED IN MOTOR11 BOATS.—

12 ‘‘(i) MORATORIUM.—No tax shall be

13 imposed by subsection (a) or (d)(1) on die14 sel fuel sold for use or used in a diesel15 powered motorboat during the period after

16 (the day before the date of enactment),

17 and before (the date 2 years after the date

18 of enactment).

19 ‘‘(ii) SPECIAL TERMINATION DATE.—

20 In the case of any sale for use, or use, of

21 fuel in a diesel-powered motorboat—

22 ‘‘(I) effective during the period

23 after September 30, 1999, and before

24 January 1, 2000, the rate of tax im25 posed by this paragraph is 24.3 cents

26 per gallon and
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1 ‘‘(II) the termination of the tax

2 under subsection (d) shall not occur

3 before January 1, 2000.’’

4 (b) TECHNICAL AMENDMENTS.—

5 (1) Part II of subchapter B of chapter 68 of

6 the Internal Revenue Code of 1986 is amended by

7 redesignating section 6714 (relating to dyed fuel

8 sold for use or used in taxable use, et cetera), as

9 added by section 13242 of the Omnibus Budget Rec10 onciliation Act of 1993, as section 6715.

11 (2) The table of sections for such part is

12 amended by redesignating the item relating to sec13 tion 6714 (relating to dyed fuel sold for use or used

14 in taxable use, etc.), as added by section 13242 of

15 such Act, as section 6715.

16 (c) EFFECTIVE DATE.—The amendments made by

17 this section shall take effect on the date of enactment.

18 SEC. 2. TREASURY STUDY OF EFFECTIVE PROCEDURES

19 FOR COLLECTING TAX ON THE SALE OF DIE20 SEL FUEL FOR NONCOMMERCIAL MOTOR21 BOAT USE.

22 (a) GENERAL RULE.—The Secretary of the Treasury

23 (or his delegate) shall study the effectiveness of various

24 procedures for collecting excise taxes imposed on diesel

25 fuel sold for use or used in a noncommercial diesel-pow-
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1 ered motorboat. In studying the effectiveness of possible

2 collection procedures, the Secretary (or his delegate) shall

3 examine the administrative burdens of each procedure on

4 and consult with noncommercial boat users and marine

5 fuel retailers and the effect of each procedure on the avail6 ability of diesel fuel to all boat users as well as any en7 forcement considerations. The following four collection

8 procedures shall specifically be studied, although the Sec9 retary (or his delegate) may study other collection proce10 dures:

11 (1) The collection procedure under current law,

12 which imposed tax upon the removal of diesel fuel

13 from a petroleum terminal and under no cir14 cumstances allows a marine fuel retailer to sell dyed

15 diesel fuel to a noncommercial boat user.

16 (2) A collection procedure which would allow a

17 marine fuel retailer to sell dyed diesel fuel to a non18 commercial boat user provided the retailer collected

19 the tax from the user and remitted the tax to the

20 Internal Revenue Service.

21 (3) A collection procedure which would allow a

22 marine fuel retailer to sell dyed diesel fuel to a non23 commercial boat user but would require the user to

24 remit the taxes due directly to the Internal Revenue

25 Service.
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1 (4) A collection procedure which would allow

2 (but not require) a marine fuel retailer to sell

3 undyed diesel fuel to exempt commercial boat users

4 and then to apply for refunds on those sales from

5 the Internal Revenue Service in a manner similar to

6 the current procedure under section 6427(1)(5) of

7 the Internal Revenue Code of 1986 for sales to

8 farmers and state and local governments.

9 (b) REPORT.—Not later than (the date 18 months

10 after the date of enactment), the Secretary (or his dele11 gate) shall submit to the Committee on Ways and Means

12 of the House of Representatives and the Committee on

13 Finance of the Senate a report on the study conducted

14 under subsection (a), together with such recommendations

15 as he may deem advisable.

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