II

106TH CONGRESS

2D SESSION S. 2790

Instituting a Federal fuels tax holiday.

IN THE SENATE OF THE UNITED STATES

JUNE 26, 2000

Mr. FITZGERALD introduced the following bill; which was read twice and

referred to the Committee on Finance

A BILL

Instituting a Federal fuels tax holiday.

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 ‘‘Federal Fuel Tax Re5 lief Act of 2000’’.

6 SEC. 2. TEMPORARY REDUCTION IN FUEL TAXES ON GASO7 LINE, DIESEL FUEL, KEROSENE, AND SPE8 CIAL FUELS TO ZERO.

9 (a) IN GENERAL.—Section 4081 of the Internal Rev10 enue Code of 1986 (relating to imposition of tax on gaso11 line, diesel fuel, and kerosene) is amended by adding at

12 the end the following new subsection:
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1 ‘‘(f) TEMPORARY REDUCTION IN TAXES ON GASO2 LINE, DIESEL FUEL, KEROSENE, AND SPECIAL FUELS.—

3 ‘‘(1) IN GENERAL.—During the applicable pe4 riod, each rate of tax referred to in paragraph (2)

5 shall be reduced to zero.

6 ‘‘(2) RATES OF TAX.—The rates of tax referred

7 to in this paragraph are the rates of tax otherwise

8 applicable under—

9 ‘‘(A) clauses (i) and (iii) of subsection

10 (a)(2)(A) (relating to gasoline, diesel fuel, and

11 kerosene), and

12 ‘‘(B) paragraphs (1), (2), and (3) of sec13 tion 4041(a) (relating to diesel fuel and special

14 fuels) and section 4041(m) (relating to certain

15 alcohol fuels) with respect to fuel sold for use

16 or used in a highway vehicle.

17 ‘‘(3) SPECIAL REDUCTION RULES.—In the case

18 of a reduction under paragraph (1)—

19 ‘‘(A) subsection (c) shall be applied with20 out regard to paragraph (6) thereof,

21 ‘‘(B) section 40(e)(1) shall be applied with22 out regard to subparagraph (B) thereof,

23 ‘‘(C) section 4041(d)(1) shall be applied by

24 disregarding ‘if tax is imposed by subsection

25 (a)(1) or (2) on such sale or use’, and
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1 ‘‘(D) section 6427(b) shall be applied with2 out regard to paragraph (2) thereof.

3 ‘‘(4) PROTECTING SOCIAL SECURITY TRUST

4 FUND.—If the Secretary, after consultation with the

5 Director of the Office of Management and Budget,

6 determines that such reduction would result in an

7 aggregate reduction in revenues to the Treasury ex8 ceeding the Federal on-budget surplus during the re9 mainder of the applicable period, the Secretary shall

10 modify such reduction such that each rate of tax re11 ferred to in paragraph (2) is reduced in a pro rata

12 manner and such aggregate reduction does not ex13 ceed such surplus.

14 ‘‘(5) MAINTENANCE OF TRUST FUND DEPOS15 ITS.—In determining the amounts to be appro16 priated to the Highway Trust Fund under section

17 9503 an amount equal to the reduction in revenues

18 to the Treasury by reason of this subsection shall be

19 treated as taxes received in the Treasury under this

20 section.

21 ‘‘(6) APPLICABLE PERIOD.—For purposes of

22 this subsection, the term ‘applicable period’ means a

23 90-day period beginning on the date of the enact24 ment of the Federal Fuel Tax Relief Act of 2000.’’
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1 (b) EFFECTIVE DATE.—The amendments made by

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

3 of this Act.

4 SEC. 3. FLOOR STOCK REFUNDS.

5 (a) IN GENERAL.—If—

6 (1) before the tax reduction date, tax has been

7 imposed under section 4081 of the Internal Revenue

8 Code of 1986 on any liquid, and

9 (2) on such date such liquid is held by a dealer

10 and has not been used and is intended for sale,

11 there shall be credited or refunded (without interest) to

12 the person who paid such tax (hereafter in this section

13 referred to as the ‘‘taxpayer’’) an amount equal to the ex14 cess of the tax paid by the taxpayer over the amount of

15 such tax which would be imposed on such liquid had the

16 taxable event occurred on the tax reduction date.

17 (b) TIME FOR FILING CLAIMS.—No credit or refund

18 shall be allowed or made under this section unless—

19 (1) claim therefor is filed with the Secretary of

20 the Treasury before the date which is 6 months

21 after the tax reduction date, and

22 (2) in any case where liquid is held by a dealer

23 (other than the taxpayer) on the tax reduction

24 date—
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1 (A) the dealer submits a request for refund

2 or credit to the taxpayer before the date which

3 is 3 months after the tax reduction date, and

4 (B) the taxpayer has repaid or agreed to

5 repay the amount so claimed to such dealer or

6 has obtained the written consent of such dealer

7 to the allowance of the credit or the making of

8 the refund.

9 (c) EXCEPTION FOR FUEL HELD IN RETAIL

10 STOCKS.—No credit or refund shall be allowed under this

11 section with respect to any liquid in retail stocks held at

12 the place where intended to be sold at retail.

13 (d) DEFINITIONS.—For purposes of this section—

14 (1) the terms ‘‘dealer’’ and ‘‘held by a dealer’’

15 have the respective meanings given to such terms by

16 section 6412 of such Code; except that the term

17 ‘‘dealer’’ includes a producer, and

18 (2) the term ‘‘tax reduction date’’ means the

19 date of the enactment of this Act.

20 (e) CERTAIN RULES TO APPLY.—Rules similar to the

21 rules of subsections (b) and (c) of section 6412 of such

22 Code shall apply for purposes of this section.

23 SEC. 4. FLOOR STOCKS TAX.

24 (a) IMPOSITION OF TAX.—In the case of any liquid

25 on which tax would have been imposed under section 4081
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1 of the Internal Revenue Code of 1986 during the applica2 ble period but for the amendments made by this Act, and

3 which is held on the floor stocks tax date by any person,

4 there is hereby imposed a floor stocks tax in an amount

5 equal to the tax which would be imposed on such liquid

6 had the taxable event occurred on the floor stocks tax

7 date.

8 (b) LIABILITY FOR TAX AND METHOD OF PAY9 MENT.—

10 (1) LIABILITY FOR TAX.—A person holding a

11 liquid on the floor stocks tax date to which the tax

12 imposed by subsection (a) applies shall be liable for

13 such tax.

14 (2) METHOD OF PAYMENT.—The tax imposed

15 by subsection (a) shall be paid in such manner as

16 the Secretary of the Treasury shall prescribe.

17 (3) TIME FOR PAYMENT.—The tax imposed by

18 subsection (a) shall be paid on or before the date

19 which is 6 months after the floor stocks tax date.

20 (c) DEFINITIONS.—For purposes of this section—

21 (1) HELD BY A PERSON.—A liquid shall be con22 sidered as ‘‘held by a person’’ if title thereto has

23 passed to such person (whether or not delivery to

24 the person has been made).
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1 (2) FLOOR STOCKS TAX DATE.—The term

2 ‘‘floor stocks tax date’’ means the date which is 90

3 days after the date of the enactment of this Act.

4 (3) APPLICABLE PERIOD.—The term ‘‘applica5 ble period’’ means a 90-day period beginning on the

6 date of the enactment of this Act.

7 (d) EXCEPTION FOR EXEMPT USES.—The tax im8 posed by subsection (a) shall not apply to any liquid held

9 by any person exclusively for any use to the extent a credit

10 or refund of the tax imposed by section 4081 of such Code

11 is allowable for such use.

12 (e) EXCEPTION FOR FUEL HELD IN VEHICLE

13 TANK.—No tax shall be imposed by subsection (a) on any

14 liquid held in the tank of a motor vehicle.

15 (f) EXCEPTION FOR CERTAIN AMOUNTS OF FUEL.—

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

17 subsection (a)—

18 (A) on gasoline (as defined in section 4083

19 of such Code) held on the floor stocks tax date

20 by any person if the aggregate amount of gaso21 line held by such person on such date does not

22 exceed 4,000 gallons, and

23 (B) on diesel fuel or kerosene (as so de24 fined) held on such date by any person if the

25 aggregate amount of diesel fuel or kerosene
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1 held by such person on such date does not ex2 ceed 2,000 gallons.

3 The preceding sentence shall apply only if such per4 son submits to the Secretary (at the time and in the

5 manner required by the Secretary) such information

6 as the Secretary shall require for purposes of this

7 paragraph.

8 (2) EXEMPT FUEL.—For purposes of para9 graph (1), there shall not be taken into account fuel

10 held by any person which is exempt from the tax im11 posed by subsection (a) by reason of subsection (d)

12 or (e).

13 (3) CONTROLLED GROUPS.—For purposes of

14 this subsection—

15 (A) CORPORATIONS.—

16 (i) IN GENERAL.—All persons treated

17 as a controlled group shall be treated as 1

18 person.

19 (ii) CONTROLLED GROUP.—The term

20 ‘‘controlled group’’ has the meaning given

21 to such term by subsection (a) of section

22 1563 of such Code; except that for such

23 purposes the phrase ‘‘more than 50 per24 cent’’ shall be substituted for the phrase
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1 ‘‘at least 80 percent’’ each place it appears

2 in such subsection.

3 (B) NONINCORPORATED PERSONS UNDER

4 COMMON CONTROL.—Under regulations pre5 scribed by the Secretary, principles similar to

6 the principles of subparagraph (A) shall apply

7 to a group of persons under common control

8 where 1 or more of such persons is not a cor9 poration.

10 (g) OTHER LAW APPLICABLE.—All provisions of law,

11 including penalties, applicable with respect to the taxes

12 imposed by section 4081 of such Code shall, insofar as

13 applicable and not inconsistent with the provisions of this

14 subsection, apply with respect to the floor stock taxes im15 posed by subsection (a) to the same extent as if such taxes

16 were imposed by such section 4081.

17 SEC. 5. BENEFITS OF TAX REDUCTION SHOULD BE PASSED

18 ON TO CONSUMERS.

19 (a) PASSTHROUGH TO CONSUMERS.—

20 (1) SENSE OF CONGRESS.—It is the sense of

21 Congress that—

22 (A) consumers immediately receive the

23 benefit of the reduction in taxes under this Act,

24 and
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1 (B) transportation motor fuels producers

2 and other dealers take such actions as nec3 essary to reduce transportation motor fuels

4 prices to reflect such reduction, including imme5 diate credits to customer accounts representing

6 tax refunds allowed as credits against excise tax

7 deposit payments under the floor stocks refund

8 provisions of this Act.

9 (2) STUDY.—

10 (A) IN GENERAL.—The Comptroller Gen11 eral of the United States shall conduct a study

12 of the reduction of taxes under this Act to de13 termine whether there has been a passthrough

14 of such reduction.

15 (B) REPORT.—Not later than 180 days

16 after the date of the enactment of this Act, the

17 Comptroller General of the United States shall

18 report to the Committee on Finance of the Sen19 ate and the Committee on Ways and Means of

20 the House of Representatives the results of the

21 study conducted under subparagraph (A).

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