II

103D CONGRESS

1ST SESSION S. 1693

To amend the Internal Revenue Code of 1986 to delay the effective date

for the change in the point of imposition of the tax on diesel fuel,

to provide that vendors of diesel fuel used for any nontaxable use may

claim refunds on behalf of the ultimate users, and to provide a similar

rule for vendors of gasoline used by State and local governments.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 19 (legislative day, NOVEMBER 2), 1993

Mr. REID 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 delay the

effective date for the change in the point of imposition

of the tax on diesel fuel, to provide that vendors of

diesel fuel used for any nontaxable use may claim refunds on behalf of the ultimate users, and to provide

a similar rule for vendors of gasoline used by State

and local governments.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
2

•S 1693 IS

1 SECTION 1. DELAY IN EFFECTIVE DATE FOR CHANGE IN

2 POINT OF IMPOSITION OF TAX ON DIESEL

3 FUEL.

4 (a) IN GENERAL.—Subsection (e) of section 13242

5 of the Revenue Reconciliation Act of 1993 is amended to

6 read as follows:

7 ‘‘(e) EFFECTIVE DATE.—The amendments made by

8 this section shall take effect on the earlier of—

9 ‘‘(1) July 1, 1994, or

10 ‘‘(2) the 60th day after the date that final reg11 ulations are prescribed to carry out such amend12 ments.

13 In no event shall such amendments take effect before Jan14 uary 1, 1994.’’

15 (b) CONFORMING AMENDMENTS TO FLOOR STOCKS

16 TAX.—

17 (1) Section 13243 of such Act is amended by

18 striking ‘‘January 1, 1994’’ each place it appears

19 and inserting ‘‘the effective date’’.

20 (2) Paragraph (1) of section 13243(a) of such

21 Act is amended by striking ‘‘December 31, 1993’’

22 and inserting ‘‘the day before the effective date’’.

23 (3) Paragraph (3) of section 13243(c) of such

24 Act is amended by striking ‘‘July 31, 1994’’ and in25 serting ‘‘the last day of the 6th month beginning

26 after the effective date’’.
3

•S 1693 IS

1 (4) Subsection (d) of section 13243 of such Act

2 is amended by adding at the end thereof the follow3 ing new paragraph:

4 ‘‘(3) EFFECTIVE DATE.—The term ‘effective

5 date’ means the date on which the amendments

6 made by section 13242 of this Act take effect.’’

7 SEC. 2. EXPANSION OF VENDOR REFUND PROCEDURES

8 WITH RESPECT TO DIESEL FUEL.

9 (a) IN GENERAL.—Subsection (l) of section 6427 of

10 the Internal Revenue Code of 1986 (relating to nontaxable

11 uses of diesel fuel and aviation fuel) is amended by strik12 ing paragraph (5), by redesignating paragraphs (2), (3),

13 and (4) as paragraphs (3), (4), and (5), respectively, and

14 by striking paragraph (1) and inserting the following new

15 paragraphs:

16 ‘‘(1) DIESEL FUEL.—Except as otherwise pro17 vided in this subsection and in subsection (k), if—

18 ‘‘(A) any diesel fuel on which tax has been

19 imposed by section 4041 or 4081 is sold for use

20 by any person in a nontaxable use, and

21 ‘‘(B) the ultimate vendor of such fuel—

22 ‘‘(i) is registered under section 4101,

23 and
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•S 1693 IS

1 ‘‘(ii) meets the requirements of sub2 paragraph (A), (B), or (D) of section

3 6416(a)(1),

4 the Secretary shall pay (without interest) to such ul5 timate vendor an amount equal to the aggregate

6 amount of tax imposed on such fuel under section

7 4041 or 4081, as the case may be.

8 ‘‘(2) AVIATION FUEL.—Except as otherwise

9 provided in this subsection and in subsection (k), if

10 any aviation fuel on which tax has been imposed by

11 section 4091 is used by any person in a nontaxable

12 use, the Secretary shall pay (without interest) to the

13 ultimate purchaser of such fuel an amount equal to

14 the aggregate amount of tax imposed on such fuel

15 under section 4091.’’

16 (b) CONFORMING AMENDMENTS.—

17 (1) Subparagraph (A) of section 6427(i)(5) of

18 such Code (relating to special rule for vendor re19 funds) is amended by striking ‘‘subsection (l)(5)’’

20 each place it appears and inserting ‘‘subsection

21 (l)(1)’’.

22 (2) Paragraph (5) of section 6427(l) of such

23 Code, as redesignated by subsection (a), is amended

24 by striking ‘‘paragraph (1)’’ and inserting ‘‘para25 graph (2)’’.
5

•S 1693 IS

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

2 this section shall take effect as if included in the amend3 ments made by section 13242 of the Revenue Reconcili4 ation Act of 1993.

5 SEC. 3. VENDOR REFUNDS ON GASOLINE SOLD TO STATE

6 AND LOCAL GOVERNMENTS.

7 (a) IN GENERAL.—Subsection (c) of section 6421 of

8 the Internal Revenue Code of 1986 (relating to gasoline

9 used for certain exempt purposes) is amended to read as

10 follows:

11 ‘‘(c) EXEMPT PURPOSES.—

12 ‘‘(1) IN GENERAL.—If gasoline is sold to any

13 person for any purpose described in paragraph (2),

14 (3), or (5) of section 4221(a), the Secretary shall

15 pay (without interest) to such person an amount

16 equal to the product of the number of gallons of gas17 oline so sold multiplied by the rate at which tax was

18 imposed on such gasoline by section 4081.

19 ‘‘(2) SALES TO STATE AND LOCAL GOVERN20 MENTS.—

21 ‘‘(A) IN GENERAL.—If—

22 ‘‘(i) gasoline on which tax has been

23 imposed by section 4081 is sold to a State

24 or local government for the exclusive use of

25 a State or local government, and
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•S 1693 IS

1 ‘‘(ii) the ultimate vendor of such

2 fuel—

3 ‘‘(I) is registered under section

4 4101, and

5 ‘‘(II) meets the requirements of

6 subparagraph (A), (B), or (D) of sec7 tion 6416(a)(1),

8 the Secretary shall pay (without interest) to

9 such ultimate vendor an amount equal to the

10 product of the number of gallons of gasoline so

11 sold multiplied by the rate at which tax was im12 posed on such gasoline by section 4081.

13 ‘‘(B) PAYMENT OF CLAIM.—Notwithstand14 ing subparagraph (A), if the Secretary has not

15 paid a claim payable under this paragraph with16 in 20 days after the date such claim is filed,

17 such claim shall be paid with interest from such

18 date, determined by using the overpayment rate

19 and method under section 6621.’’

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

21 this section shall take effect as if included in the amend22 ments made by section 13242 of the Revenue Reconcili23 ation Act of 1993.

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