II

Calendar No. 653

106TH CONGRESS

2D SESSION S. 2808

To amend the Internal Revenue Code of 1986 to temporarily suspend the

Federal fuels tax.

IN THE SENATE OF THE UNITED STATES

JUNE 28, 2000

Mr. ABRAHAM (for himself, Mr. FITZGERALD, Mrs. HUTCHISON, and Mr.

GRAMS) introduced the following bill; which was read the first time

JUNE 29, 2000

Read the second time and placed on the calendar

A BILL

To amend the Internal Revenue Code of 1986 to temporarily

suspend the Federal fuels tax.

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

3 SECTION 1. TEMPORARY REDUCTION IN HIGHWAY FUEL

4 TAXES ON GASOLINE, DIESEL FUEL, KER5 OSENE, AND SPECIAL FUELS TO ZERO.

6 (a) IN GENERAL.—Section 4081 of the Internal Rev7 enue Code of 1986 (relating to imposition of tax on gaso-
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1 line, diesel fuel, and kerosene) is amended by adding at

2 the end the following new subsection:

3 ‘‘(f) TEMPORARY REDUCTION IN TAXES ON GASO4 LINE, DIESEL FUEL, KEROSENE, AND SPECIAL FUELS.—

5 ‘‘(1) HOLDING HARMLESS THE HIGHWAY

6 TRUST FUND AND STATES’ HIGHWAY APPORTION7 MENTS.—In determining the amounts to be appro8 priated to the Highway Trust Fund under section

9 9503 an amount equal to the reduction in revenues

10 to the Treasury by reason of this subsection shall be

11 treated as taxes received in the Treasury under this

12 section. Nothing in this subsection may be construed

13 as authorizing a reduction in the apportionments of

14 such Trust Fund to the States as a result of the

15 temporary reduction in rates of tax under paragraph

16 (3).

17 ‘‘(2) PROTECTING SOCIAL SECURITY TRUST

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

19 Director of the Office of Management and Budget,

20 determines that such reduction would result in an

21 aggregate reduction in revenues to the Treasury ex22 ceeding the Federal on-budget surplus during the re23 mainder of the applicable period, the Secretary shall

24 modify such reduction such that each rate of tax re25 ferred to in paragraph (4) is reduced in a pro rata
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1 manner and such aggregate reduction does not ex2 ceed such surplus.

3 ‘‘(3) TEMPORARY REDUCTION IN RATES OF

4 CERTAIN TAXES.—During the applicable period,

5 each rate of tax referred to in paragraph (4) shall

6 be reduced to zero.

7 ‘‘(4) RATES OF TAX.—The rates of tax referred

8 to in this paragraph are the rates of tax otherwise

9 applicable under—

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

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

12 kerosene), and

13 ‘‘(B) paragraphs (1), (2), and (3) of sec14 tion 4041(a) (relating to diesel fuel and special

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

16 alcohol fuels) with respect to fuel sold for use

17 or used in a highway vehicle.

18 ‘‘(5) SPECIAL REDUCTION RULES.—In the case

19 of a reduction under paragraph (3)—

20 ‘‘(A) subsection (c) shall be applied with21 out regard to paragraph (6) thereof,

22 ‘‘(B) section 40(e)(1) shall be applied with23 out regard to subparagraph (B) thereof,
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1 ‘‘(C) section 4041(d)(1) shall be applied by

2 disregarding ‘if tax is imposed by subsection

3 (a)(1) or (2) on such sale or use’, and

4 ‘‘(D) section 6427(b) shall be applied with5 out regard to paragraph (2) thereof.

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

7 this subsection, the term ‘applicable period’ means

8 the 150-day period beginning after the date of the

9 enactment of this Act.’’

10 (b) EFFECTIVE DATE.—The amendments made by

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

12 of this Act.

13 SEC. 2. FLOOR STOCK REFUNDS.

14 (a) IN GENERAL.—If—

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

16 imposed under section 4041 or 4081 of the Internal

17 Revenue Code of 1986 on any liquid, and

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

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

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

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

22 referred to as the ‘‘taxpayer’’) an amount equal to the ex23 cess of the tax paid by the taxpayer over the amount of

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

25 taxable event occurred on the tax reduction date.
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1 (b) TIME FOR FILING CLAIMS.—No credit or refund

2 shall be allowed or made under this section unless—

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

4 the Treasury before the date which is 6 months

5 after the tax reduction date, and

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

7 (other than the taxpayer) on the tax reduction

8 date—

9 (A) the dealer submits a request for refund

10 or credit to the taxpayer before the date which

11 is 3 months after the tax reduction date, and

12 (B) the taxpayer has repaid or agreed to

13 repay the amount so claimed to such dealer or

14 has obtained the written consent of such dealer

15 to the allowance of the credit or the making of

16 the refund.

17 (c) EXCEPTION FOR FUEL HELD IN RETAIL

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

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

20 the place where intended to be sold at retail.

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

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

23 have the respective meanings given to such terms by

24 section 6412 of such Code; except that the term

25 ‘‘dealer’’ includes a producer, and
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1 (2) the term ‘‘tax reduction date’’ means the

2 day after the date of the enactment of this Act.

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

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

5 Code shall apply for purposes of this section.

6 SEC. 3. FLOOR STOCKS TAX.

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

8 on which tax would have been imposed under section 4041

9 or 4081 of the Internal Revenue Code of 1986 during the

10 applicable period but for the amendments made by this

11 Act, and which is held on the floor stocks tax date by any

12 person, there is hereby imposed a floor stocks tax in an

13 amount equal to the tax which would be imposed on such

14 liquid had the taxable event occurred on the floor stocks

15 tax date.

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

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

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

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

21 such tax.

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

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

24 the Secretary of the Treasury shall prescribe.
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1 (3) TIME FOR PAYMENT.—The tax imposed by

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

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

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

5 (1) HELD BY A PERSON.—A liquid shall be con6 sidered as ‘‘held by a person’’ if title thereto has

7 passed to such person (whether or not delivery to

8 the person has been made).

9 (2) FLOOR STOCKS TAX DATE.—The term

10 ‘‘floor stocks tax date’’ means the day after the date

11 which is 150 days after the date of the enactment

12 of this Act.

13 (3) APPLICABLE PERIOD.—The term ‘‘applica14 ble period’’ means the 150-day period beginning

15 after the date of the enactment of the Motorists Re16 lief Act of 2000.

17 (d) EXCEPTION FOR EXEMPT USES.—The tax im18 posed by subsection (a) shall not apply to any liquid held

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

20 or refund of the tax imposed by section 4041 or 4081 of

21 such Code is allowable for such use.

22 (e) EXCEPTION FOR FUEL HELD IN VEHICLE

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

24 liquid held in the tank of a motor vehicle.

25 (f) EXCEPTION FOR CERTAIN AMOUNTS OF FUEL.—
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1 (1) IN GENERAL.—No tax shall be imposed by

2 subsection (a)—

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

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

5 by any person if the aggregate amount of gaso6 line held by such person on such date does not

7 exceed 4,000 gallons, and

8 (B) on diesel fuel or kerosene (as so de9 fined) held on such date by any person if the

10 aggregate amount of diesel fuel or kerosene

11 held by such person on such date does not ex12 ceed 2,000 gallons.

13 The preceding sentence shall apply only if such per14 son submits to the Secretary (at the time and in the

15 manner required by the Secretary) such information

16 as the Secretary shall require for purposes of this

17 paragraph.

18 (2) EXEMPT FUEL.—For purposes of para19 graph (1), there shall not be taken into account fuel

20 held by any person which is exempt from the tax im21 posed by subsection (a) by reason of subsection (d)

22 or (e).

23 (3) CONTROLLED GROUPS.—For purposes of

24 this subsection—

25 (A) CORPORATIONS.—
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1 (i) IN GENERAL.—All persons treated

2 as a controlled group shall be treated as 1

3 person.

4 (ii) CONTROLLED GROUP.—The term

5 ‘‘controlled group’’ has the meaning given

6 to such term by subsection (a) of section

7 1563 of such Code; except that for such

8 purposes the phrase ‘‘more than 50 per9 cent’’ shall be substituted for the phrase

10 ‘‘at least 80 percent’’ each place it appears

11 in such subsection.

12 (B) NONINCORPORATED PERSONS UNDER

13 COMMON CONTROL.—Under regulations pre14 scribed by the Secretary, principles similar to

15 the principles of subparagraph (A) shall apply

16 to a group of persons under common control

17 where 1 or more of such persons is not a cor18 poration.

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

20 including penalties, applicable with respect to the taxes

21 imposed by section 4041 or 4081 of such Code shall, inso22 far as applicable and not inconsistent with the provisions

23 of this subsection, apply with respect to the floor stock

24 taxes imposed by subsection (a) to the same extent as if

25 such taxes were imposed by such section 4041 or 4081.
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1 SEC. 4. BENEFITS OF TAX REDUCTION SHOULD BE PASSED

2 ON TO CONSUMERS.

3 (a) PASSTHROUGH TO CONSUMERS.—

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

5 Congress that—

6 (A) consumers immediately receive the

7 benefit of the reduction in taxes under this Act,

8 and

9 (B) transportation motor fuels producers

10 and other dealers take such actions as nec11 essary to reduce transportation motor fuels

12 prices to reflect such reduction, including imme13 diate credits to customer accounts representing

14 tax refunds allowed as credits against excise tax

15 deposit payments under the floor stocks refund

16 provisions of this Act.

17 (2) STUDY.—

18 (A) IN GENERAL.—The Comptroller Gen19 eral of the United States shall conduct a study

20 of the reduction of taxes under this Act to de21 termine whether there has been a passthrough

22 of such reduction.

23 (B) REPORT.—Not later than September

24 30, 2000, the Comptroller General of the

25 United States shall report to the Committee on

26 Finance of the Senate and the Committee on
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1 Ways and Means of the House of Representa2 tives the results of the study conducted under

3 subparagraph (A).
Calendar No. 653

106TH CONGRESS

2D SESSION S. 2808

A BILL

To amend the Internal Revenue Code of 1986 to

temporarily suspend the Federal fuels tax.

JUNE 29, 2000

Read the second time and placed on the calendar