II

104TH CONGRESS

1ST SESSION S. 665

To amend the Internal Revenue Code of 1986 to increase motor fuel taxes

by 8 cents a gallon, the resulting revenues to be used for mass transit,

AMTRAK, and interstate, State, and local roads and bridges, and for

other purposes.

IN THE SENATE OF THE UNITED STATES

APRIL 4 (legislative day, MARCH 27), 1995

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

to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to increase

motor fuel taxes by 8 cents a gallon, the resulting revenues to be used for mass transit, AMTRAK, and interstate, State, and local roads and bridges, 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. INCREASE IN MOTOR FUEL TAXES.

4 (a) IN GENERAL.—Subparagraph (A) of section

5 4081(a)(2) of the Internal Revenue Code of 1986 (relating

6 to imposition of tax on gasoline and diesel fuel) is

7 amended—
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1 (1) by striking ‘‘18.3 cents’’ and inserting

2 ‘‘26.3 cents’’, and

3 (2) by striking ‘‘24.3 cents’’ and inserting

4 ‘‘32.3 cents’’.

5 (b) TECHNICAL AMENDMENTS.—

6 (1) Subsection (c)(4)(A) of section 4081 of the

7 Internal Revenue Code of 1986 is amended—

8 (A) by striking ‘‘5.4 cents’’ both places it

9 appears and inserting ‘‘13.4 cents’’,

10 (B) by striking ‘‘4.158 cents’’ both places

11 it appears and inserting ‘‘12.158 cents’’,

12 (C) by striking ‘‘3.078 cents’’ both places

13 it appears and inserting ‘‘11.078 cents’’,

14 (D) by striking ‘‘6 cents’’ and inserting

15 ‘‘14 cents’’,

16 (E) by striking ‘‘4.62 cents’’ and inserting

17 ‘‘12.62 cents’’, and

18 (F) by striking ‘‘3.42 cents’’ and inserting

19 ‘‘11.42 cents’’.

20 (2) Subsection (c)(5) of section 4081 of such

21 Code is amended—

22 (A) by striking ‘‘5.4 cents’’ and inserting

23 ‘‘13.4 cents’’, and

24 (B) by striking ‘‘6 cents’’ and inserting

25 ‘‘14 cents’’.
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1 (3) Clause (i) of section 4041(a)(1)(D) of such

2 Code is amended by striking ‘‘24.3 cents’’ and in3 serting ‘‘32.3 cents’’.

4 (4) Clause (i) of section 4041(b)(2)(A) of such

5 Code is amended—

6 (A) by striking ‘‘5.4 cents’’ and inserting

7 ‘‘13.4 cents’’, and

8 (B) by striking ‘‘6 cents’’ and inserting

9 ‘‘14 cents’’.

10 (5) Clauses (i) and (ii) of section

11 4041(m)(1)(A) of such Code are amended to read as

12 follows:

13 ‘‘(i) 11.3 cents per gallon after Sep14 tember 30, 1993, and before October 1,

15 1995,

16 ‘‘(ii) 19.3 cents per gallon after Sep17 tember 30, 1995, and before October 1,

18 1999, and

19 ‘‘(iii) 4.3 cents per gallon after Sep20 tember 30, 1999, and’’.

21 (6) Paragraph (1) of section 9503(f) of such

22 Code is amended—

23 (A) by striking ‘‘14 cents’’ in subpara24 graph (A) and inserting ‘‘22 cents’’, and
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1 (B) by striking ‘‘20 cents’’ in subpara2 graph (B) and inserting ‘‘28 cents’’.

3 (7) Subparagraph (E) of section 9503(f)(2) of

4 such Code is amended by striking ‘‘11.5 cents’’ and

5 inserting ‘‘19.5 cents’’ and by striking ‘‘17.5 cents’’

6 and inserting ‘‘25.5 cents’’.

7 (c) FLOOR STOCKS TAX.—

8 (1) IMPOSITION OF TAX.—In the case of gaso9 line and diesel fuel on which tax was imposed under

10 section 4081 or 4091 of the Internal Revenue Code

11 of 1986 before October 1, 1995, and which is held

12 on such date by any person, there is hereby imposed

13 a floor stocks tax of 8 cents per gallon on such gaso14 line and diesel fuel.

15 (2) LIABILITY FOR TAX AND METHOD OF PAY16 MENT.—

17 (A) LIABILITY FOR TAX.—A person hold18 ing gasoline or diesel fuel on October 1, 1995,

19 to which the tax imposed by paragraph (1) ap20 plies shall be liable for such tax.

21 (B) METHOD OF PAYMENT.—The tax im22 posed by paragraph (1) shall be paid in such

23 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 December 31, 1995.

4 (3) DEFINITIONS.—For purposes of this sub5 section—

6 (A) HELD BY A PERSON.—Gasoline or die7 sel fuel shall be considered as ‘‘held by a per8 son’’ if title thereto has passed to such person

9 (whether or not delivery to the person has been

10 made).

11 (B) GASOLINE.—The term ‘‘gasoline’’ has

12 the meaning given such term by section 4082 of

13 such Code.

14 (C) DIESEL FUEL.—The term ‘‘diesel fuel’’

15 has the meaning given such term by section

16 4092 of such Code.

17 (E) SECRETARY.—The term ‘‘Secretary’’

18 means the Secretary of the Treasury or the

19 Secretary’s delegate.

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

21 imposed by paragraph (1) shall not apply to gasoline

22 or diesel fuel held by any person exclusively for any

23 use to the extent a credit or refund of the tax im24 posed by section 4081 or 4091 of such Code, as the

25 case may be, is allowable for such use.
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1 (5) EXCEPTION FOR FUEL HELD IN VEHICLE

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

3 on gasoline or diesel fuel held in the tank of a motor

4 vehicle or motorboat.

5 (6) EXCEPTION FOR CERTAIN AMOUNTS OF

6 FUEL.—

7 (A) IN GENERAL.—No tax shall be im8 posed by paragraph (1)—

9 (i) on gasoline held on October 1,

10 1995, by any person if the aggregate

11 amount of gasoline held by such person on

12 such date does not exceed 4,000 gallons,

13 and

14 (ii) on diesel fuel held on October 1,

15 1995, by any person if the aggregate

16 amount of diesel fuel held by such person

17 on such date does not exceed 2,000 gal18 lons.

19 The preceding sentence shall apply only if such

20 person submits to the Secretary (at the time

21 and in the manner required by the Secretary)

22 such information as the Secretary shall require

23 for purposes of this paragraph.

24 (B) EXEMPT FUEL.—For purposes of sub25 paragraph (A), there shall not be taken into ac-
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1 count fuel held by any person which is exempt

2 from the tax imposed by paragraph (1) by rea3 son of paragraph (4) or (5).

4 (C) CONTROLLED GROUPS.—For purposes

5 of this paragraph—

6 (i) CORPORATIONS.—

7 (I) IN GENERAL.—All persons

8 treated as a controlled group shall be

9 treated as 1 person.

10 (II) CONTROLLED GROUP.—The

11 term ‘‘controlled group’’ has the

12 meaning given to such term by sub13 section (a) of section 1563 of such

14 Code; except that for such purposes

15 the phrase ‘‘more than 50 percent’’

16 shall be substituted for the phrase ‘‘at

17 least 80 percent’’ each place it ap18 pears in such subsection.

19 (ii) NONINCORPORATED PERSONS

20 UNDER COMMON CONTROL.—Under regula21 tions prescribed by the Secretary, prin22 ciples similar to the principles of clause (i)

23 shall apply to a group of persons under

24 common control where 1 or more of such

25 persons is not a corporation.
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1 (7) ARTICLES IN FOREIGN TRADE ZONES.—

2 Notwithstanding the Act of June 18, 1934 (48 Stat.

3 998, 19 U.S.C. 81a) and any other provision of law,

4 any article which is located in a foreign trade zone

5 on any tax-increase date shall be subject to the taxes

6 imposed by paragraph (1) if—

7 (A) internal revenue taxes have been deter8 mined, or customs duties liquidated, with re9 spect to such article before such date pursuant

10 to a request made under the 1st proviso of sec11 tion 3(a) of such Act, or

12 (B) such article is held on such date under

13 the supervision of a customs officer pursuant to

14 the 2d proviso of such section 3(a).

15 (8) OTHER LAW APPLICABLE.—All provisions of

16 law, including penalties, applicable with respect to

17 the taxes imposed by section 4081 of such Code

18 shall, insofar as applicable and not inconsistent with

19 the provisions of this subsection, apply with respect

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

21 the same extent as if such taxes were imposed by

22 such section 4081.

23 (d) USE OF RESULTING REVENUES.—

24 (1) MASS TRANSIT.—Paragraph (2) of section

25 9503(e) of the Internal Revenue Code of 1986 (re-
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1 lating to establishment of mass transit account) is

2 amended by striking ‘‘2 cents’’ and inserting ‘‘4

3 cents’’.

4 (2) AMTRAK AND INTERSTATE, STATE, AND LOCAL

5 ROADS AND BRIDGES.—Section 9503 of such Code (relat6 ing to highway trust fund) is amended by redesignating

7 subsection (f) as subsection (i) and by inserting after sub8 section (e) the following new subsections:

9 ‘‘(f) ESTABLISHMENT OF AMTRAK ACCOUNT.—

10 ‘‘(1) CREATION OF ACCOUNT.—There is estab11 lished in the Highway Trust Fund a separate ac12 count to be known as the ‘AMTRAK Account’ con13 sisting of such amounts as may be transferred or

14 credited to the AMTRAK Account as provided in

15 this subsection or section 9602(b).

16 ‘‘(2) TRANSFERS TO AMTRAK ACCOUNT.—The

17 Secretary of the Treasury shall transfer to the AM18 TRAK Account the AMTRAK portion of the

19 amounts appropriated to the Highway Trust Fund

20 under subsection (b) which are attributable to taxes

21 under sections 4041 and 4081 imposed after Sep22 tember 30, 1995. For purposes of the preceding sen23 tence, the term ‘AMTRAK portion’ means an

24 amount determined at the rate of 2 cents for each
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1 gallon with respect to which tax was imposed under

2 section 4041 or 4081.

3 ‘‘(3) EXPENDITURES FROM ACCOUNT.—

4 Amounts in the AMTRAK Account shall be avail5 able, as provided by appropriation Acts, for making

6 capital or capital-related expenditures before October

7 1, 1997 (including capital expenditures for new

8 projects) for AMTRAK in accordance with section

9 24104 of title 49, United States Code, as in effect

10 on the date of the enactment of this subsection.

11 ‘‘(4) APPLICABLE RULES.—Rules similar to the

12 rules of paragraphs (4) and (5) shall be applied.

13 ‘‘(g) ESTABLISHMENT OF INTERSTATE AND FED14 ERAL-AID HIGHWAY ACCOUNT.—

15 ‘‘(1) CREATION OF ACCOUNT.—There is estab16 lished in the Highway Trust Fund a separate ac17 count to be known as the ‘Interstate and Federal18 Aid Highway Account’ consisting of such amounts

19 as may be transferred or credited to the Interstate

20 and Federal-Aid Highway Account as provided in

21 this subsection or section 9602(b).

22 ‘‘(2) TRANSFERS TO INTERSTATE AND FED23 ERAL-AID HIGHWAY ACCOUNT.—The Secretary of

24 the Treasury shall transfer to the Interstate and

25 Federal-Aid Highway Account the interstate and
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1 Federal-aid highway portion of the amounts appro2 priated to the Highway Trust Fund under sub3 section (b) which are attributable to taxes under sec4 tions 4041 and 4081 imposed after September 30,

5 1995. For purposes of the preceding sentence, the

6 term ‘interstate and Federal-aid highway portion’

7 means an amount determined at the rate of 2 cents

8 for each gallon with respect to which tax was im9 posed under section 4041 or 4081.

10 ‘‘(3) EXPENDITURES FROM ACCOUNT.—

11 Amounts in the Interstate and Federal-Aid Highway

12 Account shall be available, as provided by appropria13 tion Acts, for making capital or capital-related ex14 penditures before October 1, 1997 (including capital

15 expenditures for new projects) for the Dwight D. Ei16 senhower National System of Interstate and Defense

17 Highways and the Federal-Aid Highway System in

18 accordance with the Intermodal Surface Transpor19 tation Efficiency Act of 1991, as in effect on the

20 date of the enactment of this subsection.

21 ‘‘(4) APPLICABLE RULES.—Rules similar to the

22 rules of paragraphs (4) and (5) shall be applied.

23 ‘‘(h) ESTABLISHMENT OF STATE AND LOCAL ROADS

24 AND BRIDGES ACCOUNT.—
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1 ‘‘(1) CREATION OF ACCOUNT.—There is estab2 lished in the Highway Trust Fund a separate ac3 count to be known as the ‘State and Local Roads

4 and Bridges Account’ consisting of such amounts as

5 may be transferred or credited to the State and

6 Local Roads and Bridges Account as provided in

7 this subsection or section 9602(b).

8 ‘‘(2) TRANSFERS TO STATE AND LOCAL ROADS

9 AND BRIDGES ACCOUNT.—The Secretary of the

10 Treasury shall transfer to the State and Local

11 Roads and Bridges Account the State and local

12 roads and bridges portion of the amounts appro13 priated to the Highway Trust Fund under sub14 section (b) which are attributable to taxes under sec15 tions 4041 and 4081 imposed after September 30,

16 1995. For purposes of the preceding sentence, the

17 term ‘State and local roads and bridges portion’

18 means an amount determined at the rate of 2 cents

19 for each gallon with respect to which tax was im20 posed under section 4041 or 4081.

21 ‘‘(3) EXPENDITURES FROM ACCOUNT.—

22 Amounts in the State and Local Roads and Bridges

23 Account shall be available, as provided by appropria24 tion Acts, for making capital or capital-related ex25 penditures before October 1, 1997 (including capital
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1 expenditures for new projects) for any State or local

2 road or bridge project in accordance with the Inter3 modal Surface Transportation Efficiency Act of

4 1991, as in effect on the date of the enactment of

5 this subsection.

6 ‘‘(4) APPLICABLE RULES.—Rules similar to the

7 rules of paragraphs (4) and (5) shall be applied.’’

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

9 this section shall take effect on October 1, 1995.

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