I 

112TH CONGRESS 

1ST SESSION H. R. 1889 

To amend the Internal Revenue Code of 1986 to suspend the excise tax 

on highway motor fuels, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 12, 2011 

Mr. SHULER 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 suspend 

the excise tax on highway motor fuels, and for other 

purposes. 

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. 

4 This Act may be cited as the ‘‘Gas Tax Holiday Act’’. 

5 SEC. 2. SUSPENSION OF FUEL TAXES ON HIGHWAY MOTOR 

6 FUELS. 

7 (a) IN GENERAL.—Section 4081 of the Internal Rev8 enue Code of 1986 (relating to imposition of tax on motor 

9 and aviation fuels) is amended by adding at the end the 

10 following new subsection: 


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1 ‘‘(f) SUSPENSION OF HIGHWAY MOTOR FUEL

2 TAXES.— 

3 ‘‘(1) IN GENERAL.—During the suspension pe4 riod, the tax imposed by section 4041 or 4081 on 

5 highway motor fuel shall be suspended. 

6 ‘‘(2) DEFINITIONS.—For purposes of this sub7 section— 

8 ‘‘(A) SUSPENSION PERIOD.—The term 

9 ‘suspension period’ means the 45-day period be10 ginning 7 days after the date of enactment of 

11 this subsection. 

12 ‘‘(B) HIGHWAY MOTOR FUEL.—The term 

13 ‘highway motor fuel’ means any fuel subject to 

14 tax under section 4041 or 4081 other than 

15 aviation gasoline and aviation-grade kerosene.’’. 

16 (b) MAINTENANCE OF TRUST FUNDS DEPOSITS; 

17 AMOUNTS APPROPRIATED TO TRUST FUNDS TREATED AS

18 TAXES.— 

19 (1) IN GENERAL.—There is hereby appro20 priated (out of any money in the Treasury not other21 wise appropriated) to each trust fund which would 

22 (but for this subsection) receive reduced revenues as 

23 a result of a suspension in a rate of tax by reason 

24 of section 4081(f)(1) of the Internal Revenue Code 

25 of 1986 (as added by this section) an amount equal 


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1 to such reduction in revenues. Amounts appropriated 

2 by the preceding sentence to any trust fund— 

3 (A) shall be transferred from the general 

4 fund at such times and in such manner as to 

5 replicate to the extent possible the transfers 

6 which would have occurred had subsection (a) 

7 not been enacted, and 

8 (B) shall be treated for all purposes of 

9 Federal law as taxes received under the appro10 priate section referred to in such section 

11 4081(f)(1). 

12 (2) MITIGATION OF POTENTIAL IMPACT ON

13 TRUST FUNDS.—Appropriations by paragraph (1) 

14 shall include such amounts as are necessary to miti15 gate potential impacts on such trust funds due to in16 curring costs associated with such reduction in reve17 nues. 

18 (c) CONSUMERS TO BENEFIT FROM SUSPENSION.— 

19 It is the sense of Congress that consumers should imme20 diately receive the benefit of the 18.4 cents per gallon tax 

21 reduction by reason of the amendment made by section 

22 (a). 

23 (d) EFFECTIVE DATE.—The amendment made by 

24 this section shall take effect on the date of the enactment 

25 of this Act. 


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1 (e) FLOOR STOCK REFUNDS.— 

2 (1) IN GENERAL.—If— 

3 (A) before the tax suspension date, tax has 

4 been imposed under section 4081 of the Inter5 nal Revenue Code of 1986 on any highway 

6 motor fuel, and 

7 (B) on such date such fuel is held by a 

8 dealer and has not been used and is intended 

9 for sale, 

10 there shall be credited or refunded (without interest) 

11 to the person who paid such tax (hereafter in this 

12 subsection referred to as the ‘‘taxpayer’’) an amount 

13 equal to the excess of the tax paid by the taxpayer 

14 over the tax which would be imposed on such fuel 

15 had the taxable event occurred on such date. 

16 (2) TIME FOR FILING CLAIMS.—No credit or re17 fund shall be allowed or made under this subsection 

18 unless— 

19 (A) claim therefor is filed with the Sec20 retary of the Treasury before the date which is 

21 6 months after the tax suspension date based 

22 on a request submitted to the taxpayer before 

23 the date which is 3 months after the tax sus24 pension date by the dealer who held the high25 way motor fuel on such date, and 


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1 (B) the taxpayer has repaid or agreed to 

2 repay the amount so claimed to such dealer or 

3 has obtained the written consent of such dealer 

4 to the allowance of the credit or the making of 

5 the refund. 

6 (3) EXCEPTION FOR FUEL HELD IN RETAIL

7 STOCKS.—No credit or refund shall be allowed under 

8 this subsection with respect to any highway motor 

9 fuel in retail stocks held at the place where intended 

10 to be sold at retail. 

11 (4) DEFINITIONS.—For purposes of this sub12 section— 

13 (A) TAX SUSPENSION DATE.—The term 

14 ‘‘tax suspension date’’ means the first day of 

15 any suspension period in effect under section 

16 4081(f) of the Internal Revenue Code of 1986 

17 (as added by subsection (a) of this section). 

18 (B) OTHER TERMS.—The terms ‘‘dealer’’ 

19 and ‘‘held by a dealer’’ have the respective 

20 meanings given to such terms by section 6412 

21 of such Code. 

22 (5) CERTAIN RULES TO APPLY.—Rules similar 

23 to the rules of subsections (b) and (c) of section 

24 6412 of such Code shall apply for purposes of this 

25 subsection. 


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1 (f) FLOOR STOCKS TAX.— 

2 (1) IMPOSITION OF TAX.—In the case of any 

3 highway motor fuel which is held on the tax restora4 tion date by any person, there is hereby imposed a 

5 floor stocks tax equal to the excess of the tax which 

6 would be imposed on such fuel had the taxable event 

7 occurred on such date over the tax (if any) pre8 viously paid (and not credited or refunded) on such 

9 fuel. 

10 (2) LIABILITY FOR TAX AND METHOD OF PAY11 MENT.— 

12 (A) LIABILITY FOR TAX.—The person 

13 holding highway motor fuel on the tax restora14 tion date to which the tax imposed by para15 graph (1) applies shall be liable for such tax. 

16 (B) METHOD OF PAYMENT.—The tax im17 posed by paragraph (1) shall be paid in such 

18 manner as the Secretary shall prescribe. 

19 (C) TIME FOR PAYMENT.—The tax im20 posed by paragraph (1) shall be paid on or be21 fore the 45th day after the tax restoration date. 

22 (3) DEFINITIONS.—For purposes of this sub23 section— 

24 (A) TAX RESTORATION DATE.—The term 

25 ‘‘tax restoration date’’ means the first day after 


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1 the end of the suspension period (as defined in 

2 section 4081(f) of the Internal Revenue Code of 

3 1986). 

4 (B) HIGHWAY MOTOR FUEL.—The term 

5 ‘‘highway motor fuel’’ has the meaning given to 

6 such term by section 4081(f) of such Code. 

7 (C) HELD BY A PERSON.—A highway 

8 motor fuel shall be considered as held by a per9 son if title thereto has passed to such person 

10 (whether or not delivery to the person has been 

11 made). 

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

13 means the Secretary of the Treasury or the 

14 Secretary’s delegate. 

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

16 imposed by paragraph (1) shall not apply to any 

17 highway motor fuel held by any person exclusively 

18 for any use to the extent a credit or refund of the 

19 tax is allowable for such use. 

20 (5) EXCEPTION FOR CERTAIN AMOUNTS OF

21 FUEL.— 

22 (A) IN GENERAL.—No tax shall be im23 posed by paragraph (1) on any highway motor 

24 fuel held on the tax restoration date by any per25 son if the aggregate amount of such highway 


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1 motor fuel held by such person on such date 

2 does not exceed 2,000 gallons. The preceding 

3 sentence shall apply only if such person submits 

4 to the Secretary (at the time and in the manner 

5 required by the Secretary) such information as 

6 the Secretary shall require for purposes of this 

7 subparagraph. 

8 (B) EXEMPT FUEL.—For purposes of sub9 paragraph (A), there shall not be taken into ac10 count any highway motor fuel held by any per11 son which is exempt from the tax imposed by 

12 paragraph (1) by reason of paragraph (4). 

13 (C) CONTROLLED GROUPS.—For purposes 

14 of this subsection— 

15 (i) CORPORATIONS.— 

16 (I) IN GENERAL.—All persons 

17 treated as a controlled group shall be 

18 treated as 1 person. 

19 (II) CONTROLLED GROUP.—The 

20 term ‘‘controlled group’’ has the 

21 meaning given to such term by sub22 section (a) of section 1563 of such 

23 Code; except that for such purposes 

24 the phrase ‘‘more than 50 percent’’ 

25 shall be substituted for the phrase ‘‘at 


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1 least 80 percent’’ each place it ap2 pears in such subsection. 

3 (ii) NONINCORPORATED PERSONS

4 UNDER COMMON CONTROL.—Under regula5 tions prescribed by the Secretary, prin6 ciples similar to the principles of subpara7 graph (A) shall apply to a group of per8 sons under common control if 1 or more of 

9 such persons is not a corporation. 

10 (6) OTHER LAWS APPLICABLE.—All provisions 

11 of law, including penalties, applicable with respect to 

12 the taxes imposed by section 4081 of such Code 

13 shall, insofar as applicable and not inconsistent with 

14 the provisions of this subsection, apply with respect 

15 to the floor stock taxes imposed by paragraph (1) to 

16 the same extent as if such taxes were imposed by 

17 such section. 

18 SEC. 3. DENIAL OF TAX BENEFITS TO CERTAIN OIL AND 

19 GAS COMPANIES. 

20 (a) AMORTIZATION OF GEOLOGICAL AND GEO21 PHYSICAL EXPENDITURES.— 

22 (1) IN GENERAL.—Subparagraph (A) of section 

23 167(h)(5) of the Internal Revenue Code of 1986 is 

24 amended by inserting ‘‘(and for the 1-year period 

25 beginning on the date of enactment of the Gas Tax 


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1 Holiday Act, any company which is not a small, 

2 independent oil and gas company)’’ after ‘‘major in3 tegrated oil company,’’. 

4 (2) CONFORMING AMENDMENT.—The heading 

5 for paragraph (5) of section 167(h) of such Code is 

6 amended by inserting ‘‘AND OTHER LARGE TAX7 PAYERS’’. 

8 (3) EFFECTIVE DATE.—The amendments made 

9 by this subsection shall apply to amounts paid or in10 curred after the date of the enactment of this Act. 

11 (b) PRODUCING OIL AND GAS FROM MARGINAL

12 WELLS.— 

13 (1) IN GENERAL.—Section 45I of the Internal 

14 Revenue Code of 1986 is amended by adding at the 

15 end the following new subsection: 

16 ‘‘(e) EXCEPTION FOR TAXPAYER WHO IS NOT

17 SMALL, INDEPENDENT OIL AND GAS COMPANY.— 

18 ‘‘(1) IN GENERAL.—In the case of the first tax19 able year beginning after the date of the enactment 

20 of the Gas Tax Holiday Act, subsection (a) shall not 

21 apply to any taxpayer which is not a small, inde22 pendent oil and gas company. 

23 ‘‘(2) AGGREGATION RULE.—For purposes of 

24 paragraph (1), all persons treated as a single emVerDate Mar 15 2010 05:39 May 25, 2011 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1889.IH H1889

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1 ployer under subsections (a) and (b) of section 52 

2 shall be treated as 1 person.’’. 

3 (2) EFFECTIVE DATE.—The amendment made 

4 by paragraph (1) shall apply to credits determined 

5 for taxable years beginning after the date of the en6 actment of this Act. 

7 (c) ENHANCED OIL RECOVERY CREDIT.— 

8 (1) IN GENERAL.—Section 43 of the Internal 

9 Revenue Code of 1986 is amended by adding at the 

10 end the following new subsection: 

11 ‘‘(f) EXCEPTION FOR TAXPAYER WHO IS NOT

12 SMALL, INDEPENDENT OIL AND GAS COMPANY.— 

13 ‘‘(1) IN GENERAL.—In the case of the first tax14 able year beginning after the date of the enactment 

15 of the Gas Tax Holiday Act, subsection (a) shall not 

16 apply to any taxpayer which is not a small, inde17 pendent oil and gas company. 

18 ‘‘(2) AGGREGATION RULE.—For purposes of 

19 paragraph (1), all persons treated as a single em20 ployer under subsections (a) and (b) of section 52 

21 shall be treated as 1 person.’’. 

22 (2) EFFECTIVE DATE.—The amendments made 

23 by this subsection shall apply to amounts paid or in24 curred in taxable years beginning after the date of 

25 the enactment of this Act. 


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1 (d) INTANGIBLE DRILLING AND DEVELOPMENT

2 COSTS IN THE CASE OF OIL AND GAS WELLS.— 

3 (1) IN GENERAL.—Subsection (c) of section 

4 263 of the Internal Revenue Code of 1986 is amend5 ed by adding at the end the following new sentence: 

6 ‘‘This subsection shall not apply to amounts paid or 

7 incurred by a taxpayer for the 1-year period begin8 ning on the date of the enactment of the Gas Tax 

9 Holiday Act which is not a small, independent oil 

10 and gas company, determined by deeming all per11 sons treated as a single employer under subsections 

12 (a) and (b) of section 52 as 1 person.’’. 

13 (2) EFFECTIVE DATE.—The amendment made 

14 by this subsection shall apply to amounts paid or in15 curred in taxable years beginning after the date of 

16 the enactment of this Act. 

17 (e) PERCENTAGE DEPLETION.— 

18 (1) IN GENERAL.—Section 613A of the Internal 

19 Revenue Code of 1986 is amended by adding at the 

20 end the following new subsection: 

21 ‘‘(f) EXCEPTION FOR TAXPAYER WHO IS NOT

22 SMALL, INDEPENDENT OIL AND GAS COMPANY.— 

23 ‘‘(1) IN GENERAL.—In the case of the first tax24 able year beginning after the date of the enactment 

25 of the Gas Tax Holiday Act, this section and section 


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1 611 shall not apply to any taxpayer which is not a 

2 small, independent oil and gas company. 

3 ‘‘(2) AGGREGATION RULE.—For purposes of 

4 paragraph (1), all persons treated as a single em5 ployer under subsections (a) and (b) of section 52 

6 shall be treated as 1 person.’’. 

7 (2) CONFORMING AMENDMENT.—Section 

8 613A(c)(1) of such Code is amended by striking 

9 ‘‘subsection (d)’’ and inserting ‘‘subsections (d) and 

10 (f)’’. 

11 (3) EFFECTIVE DATE.—The amendments made 

12 by this subsection shall apply to taxable years begin13 ning after the date of the enactment of this Act. 

14 (f) TERTIARY INJECTANTS.— 

15 (1) IN GENERAL.—Section 193 of the Internal 

16 Revenue Code of 1986 is amended by adding at the 

17 end the following new subsection: 

18 ‘‘(d) EXCEPTION FOR TAXPAYER WHO IS NOT

19 SMALL, INDEPENDENT OIL AND GAS COMPANY.— 

20 ‘‘(1) IN GENERAL.—In the case of the first tax21 able year beginning after the date of the enactment 

22 of the Gas Tax Holiday Act, subsection (a) shall not 

23 apply to any taxpayer which is not a small, inde24 pendent oil and gas company. 


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1 ‘‘(2) EXCEPTION FOR QUALIFIED CARBON DI2 OXIDE DISPOSED IN SECURE GEOLOGICAL STOR3 AGE.—Paragraph (1) shall not apply in the case of 

4 any qualified tertiary injectant expense paid or in5 curred for any tertiary injectant is qualified carbon 

6 dioxide (as defined in section 45Q(b)) which is dis7 posed of by the taxpayer in secure geological storage 

8 (as defined by section 45Q(d)). 

9 ‘‘(3) AGGREGATION RULE.—For purposes of 

10 paragraph (1), all persons treated as a single em11 ployer under subsections (a) and (b) of section 52 

12 shall be treated as 1 person.’’. 

13 (2) EFFECTIVE DATE.—The amendment made 

14 by this subsection shall apply to expenses incurred 

15 after the date of the enactment of this Act. 

16 (g) PASSIVE ACTIVITY LOSSES AND CREDITS LIM17 ITED.—Paragraph (3) of section 469(c) of the Internal 

18 Revenue Code of 1986 is amended by adding at the end 

19 the following: 

20 ‘‘(C) EXCEPTION FOR TAXPAYER WHO IS

21 NOT SMALL, INDEPENDENT OIL AND GAS COM22 PANY.— 

23 ‘‘(i) IN GENERAL.—In the case of the 

24 first taxable year beginning after the date 

25 of the enactment of the Gas Tax Holiday 


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1 Act, subparagraph (A) shall not apply to 

2 any taxpayer which is not a small, inde3 pendent oil and gas company. 

4 ‘‘(ii) AGGREGATION RULE.—For pur5 poses of clause (i), all persons treated as 

6 a single employer under subsections (a) 

7 and (b) of section 52 shall be treated as 1 

8 person.’’. 

9 (h) INCOME ATTRIBUTABLE TO DOMESTIC PRODUC10 TION ACTIVITIES.— 

11 (1) IN GENERAL.—Section 199 of the Internal 

12 Revenue Code of 1986 is amended by adding at the 

13 end the following new subsection: 

14 ‘‘(e) EXCEPTION FOR TAXPAYER WHO IS NOT

15 SMALL, INDEPENDENT OIL AND GAS COMPANY.—In the 

16 case of the first taxable year beginning after the date of 

17 the enactment of the Gas Tax Holiday Act, subsection (a) 

18 shall not apply to the income derived from the production, 

19 transportation, or distribution of oil, natural gas, or any 

20 primary product (within the meaning of subsection (d)(9)) 

21 thereof by any taxpayer which is an oil and gas company 

22 which is not a small, independent oil and gas company.’’. 

23 (2) EFFECTIVE DATE.—The amendment made 

24 by this subsection shall apply to taxable years begin25 ning after the date of the enactment of this Act. 


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1 (i) PROHIBITION ON USING LAST-IN, FIRST-OUT AC2 COUNTING FOR MAJOR INTEGRATED OIL COMPANIES.— 

3 (1) IN GENERAL.—Section 472 of the Internal 

4 Revenue Code of 1986 is amended by adding at the 

5 end the following new subsection: 

6 ‘‘(h) CERTAIN OIL COMPANIES.—Notwithstanding 

7 any other provision of this section, an oil and gas company 

8 which is not a small, independent oil and gas company 

9 may not use the method provided in subsection (b) in 

10 inventorying of any goods.’’. 

11 (2) EFFECTIVE DATE AND SPECIAL RULE.— 

12 (A) IN GENERAL.—The amendment made 

13 by paragraph (1) shall apply to taxable years 

14 beginning after the date of the enactment of 

15 this Act. 

16 (B) CHANGE IN METHOD OF ACCOUNT17 ING.—In the case of any taxpayer required by 

18 the amendment made by this paragraph to 

19 change its method of accounting for its first 

20 taxable year beginning after the date of the en21 actment of this Act— 

22 (i) such change shall be treated as ini23 tiated by the taxpayer, 


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1 (ii) such change shall be treated as 

2 made with the consent of the Secretary of 

3 the Treasury, and 

4 (iii) the net amount of the adjust5 ments required to be taken into account by 

6 the taxpayer under section 481 of the In7 ternal Revenue Code of 1986 shall be 

8 taken into account ratably over a period 

9 (not greater than 8 taxable years) begin10 ning with such first taxable year. 

11 (j) MODIFICATIONS OF FOREIGN TAX CREDIT RULES

12 APPLICABLE TO DUAL CAPACITY TAXPAYERS.— 

13 (1) IN GENERAL.—Section 901 of the Internal 

14 Revenue Code of 1986 is amended by redesignating 

15 subsection (n) as subsection (o) and by inserting 

16 after subsection (m) the following new subsection: 

17 ‘‘(n) SPECIAL RULES RELATING TO DUAL CAPACITY

18 TAXPAYERS.— 

19 ‘‘(1) GENERAL RULE.—Notwithstanding any 

20 other provision of this chapter, any amount paid or 

21 accrued by a dual capacity taxpayer to a foreign 

22 country or possession of the United States for any 

23 period with respect to combined foreign oil and gas 

24 income (as defined in section 907(b)(1)) shall not be 

25 considered a tax to the extent such amount exceeds 


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1 the amount (determined in accordance with regula2 tions) which would have been required to be paid if 

3 the taxpayer were not a dual capacity taxpayer. 

4 ‘‘(2) DUAL CAPACITY TAXPAYER.—For pur5 poses of this subsection, the term ‘dual capacity tax6 payer’ means, with respect to any foreign country or 

7 possession of the United States, a person who— 

8 ‘‘(A) is subject to a levy of such country or 

9 possession, and 

10 ‘‘(B) receives (or will receive) directly or 

11 indirectly a specific economic benefit (as deter12 mined in accordance with regulations) from 

13 such country or possession.’’. 

14 (2) EFFECTIVE DATE.— 

15 (A) IN GENERAL.—The amendments made 

16 by this subsection shall apply to taxes paid or 

17 accrued in taxable years beginning after the 

18 date of the enactment of this Act. 

19 (B) CONTRARY TREATY OBLIGATIONS

20 UPHELD.—The amendments made by this sub21 section shall not apply to the extent contrary to 

22 any treaty obligation of the United States. 


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1 SEC. 4. RULES RELATING TO RECEIPTS AND EXPENDI2 TURES FROM TREASURY. 

3 (a) EXTENSION OF SECTION 3 PROVISIONS.—If the 

4 Secretary of the Treasury determines that the expendi5 tures from the Federal Treasury required to carry out the 

6 provisions of section 2 of this Act are greater than the 

7 revenues raised by the provisions of section 3 of this Act, 

8 the Secretary shall extend the period for which the provi9 sions of section 3 are effective for such time as the Sec10 retary determines is necessary to raise sufficient revenues 

11 to equal such expenditures. 

12 (b) USE OF EXCESS REVENUES FOR DEBT REDUC13 TION.—The excess revenues from the suspension of tax 

14 subsidies for oil and gas by reason of the amendments 

15 made by section 3 over the expenditures required to carry 

16 out the provisions of section 2 shall remain in the Treas17 ury for purposes of debt reduction. 

Æ 


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