I 

109TH CONGRESS 

2D SESSION H. R. 5302 

To amend the Internal Revenue Code of 1986 to suspend the highway fuels 

taxes, to provide for suspension of royalty relief, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 4, 2006 

Mr. KENNEDY of Minnesota (for himself, Mr. MILLER of Florida, Mr. GERLACH, Mr. RAMSTAD, Mr. DOOLITTLE, and Mr. ENGLISH of Pennsylvania) introduced the following bill; which was referred to the Committee 

on Ways and Means, and in addition to the Committee on Resources, for 

a period to be subsequently determined by the Speaker, in each case for 

consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to suspend 

the highway fuels taxes, to provide for suspension of 

royalty relief, 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 ‘‘Summer Relief for Mo5 torists Act of 2006’’. 


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1 SEC. 2. SENSE OF CONGRESS. 

2 It is the sense of Congress that the States, with an 

3 average gas tax of 20.8 cents per gallon, also possess the 

4 ability to provide significant immediate relief to motorists 

5 by temporarily suspending their own motor fuel excise 

6 taxes. While Congress believes such action is appropriate, 

7 Congress also believes that the States should find offsets 

8 for such temporary motor fuel excise tax suspensions in 

9 order to maintain their commitment to transportation in10 frastructure investment. 

11 SEC. 3. SUSPENSION OF HIGHWAY FUEL TAXES. 

12 (a) SUSPENSION OF HIGHWAY FUEL TAXES ON GAS13 OLINE, DIESEL FUEL, AND KEROSENE.— 

14 (1) IN GENERAL.—Section 4081 of the Internal 

15 Revenue Code of 1986 (relating to imposition of tax 

16 on gasoline, diesel fuel, and kerosene) is amended by 

17 adding at the end the following new subsection: 

18 ‘‘(f) SUSPENSION OF TAXES ON GASOLINE, DIESEL

19 FUEL, AND KEROSENE.— 

20 ‘‘(1) IN GENERAL.—During the suspension pe21 riod, each rate of tax referred to in paragraph (2) 

22 shall be reduced to zero cents per gallon. 

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

24 to in this paragraph are the rates of tax otherwise 

25 applicable under— 


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

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

3 kerosene), determined after application of sub4 section (a)(2)(B) and without regard to sub5 section (a)(2)(C), and 

6 ‘‘(B) paragraph (1) of section 4041(a) (re7 lating to diesel fuel and kerosene) with respect 

8 to fuel sold for use or used in a diesel-powered 

9 highway vehicle. 

10 ‘‘(3) SUSPENSION PERIOD.—For purposes of 

11 this subsection, the term ‘suspension period’ means 

12 the period beginning on May 29, 2006 (or, if later, 

13 the date of the enactment of this subsection) and 

14 ending on September 4, 2006. 

15 ‘‘(4) MAINTENANCE OF TRUST FUND DEPOS16 ITS.—In determining the amounts to be appro17 priated to the Highway Trust Fund under section 

18 9503 and to the Leaking Underground Storage 

19 Tank Trust Fund under section 9508, an amount 

20 equal to the reduction in revenues to the Treasury 

21 by reason of this subsection shall be treated as taxes 

22 received in the Treasury under this section or sec23 tion 4041.’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by this subsection shall take effect on the date of the 

3 enactment of this Act. 

4 (b) FLOOR STOCK REFUNDS.— 

5 (1) IN GENERAL.—If— 

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

7 been imposed under section 4081 of the Inter8 nal Revenue Code of 1986 on any highway 

9 motor fuel, and 

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

11 dealer and has not been used and is intended 

12 for sale, 

13 there shall be credited or refunded (without interest) 

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

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

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

17 over the tax which would be imposed on such fuel 

18 had the taxable event occurred on such date. 

19 (2) TIME FOR FILING CLAIMS.—No credit or re20 fund shall be allowed or made under this subsection 

21 unless— 

22 (A) claim therefor is filed with the Sec23 retary of the Treasury before the date which is 

24 6 months after the tax suspension date based 

25 on a request submitted to the taxpayer before 


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1 the date which is 3 months after the tax sus2 pension date by the dealer who held the high3 way motor fuel on such 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 (3) EXCEPTION FOR FUEL HELD IN RETAIL

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

11 this subsection with respect to any highway motor 

12 fuel in retail stocks held at the place where intended 

13 to be sold at retail. 

14 (4) DEFINITIONS.—For purposes of this sub15 section— 

16 (A) TAX SUSPENSION DATE.—The term 

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

18 the suspension period in effect under section 

19 4081(f) of the Internal Revenue Code of 1986 

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

21 (B) HIGHWAY MOTOR FUEL.—The term 

22 ‘‘highway motor fuel’’ has the meaning given 

23 such term for purposes of subsection (c). 

24 (C) OTHER TERMS.—The terms ‘‘dealer’’ 

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


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1 meanings given to such terms by section 6412 

2 of such Code. 

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

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

5 6412 of such Code shall apply for purposes of this 

6 subsection. 

7 (c) FLOOR STOCKS TAX.— 

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

9 highway motor fuel which is held on the tax restora10 tion date by any person, there is hereby imposed a 

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

12 would be imposed on such fuel had the taxable event 

13 occurred on such date over the tax (if any) pre14 viously paid (and not credited or refunded) on such 

15 fuel. 

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

18 (A) LIABILITY FOR TAX.—The person 

19 holding highway motor fuel on the tax restora20 tion date to which the tax imposed by para21 graph (1) applies shall be liable for such tax. 

22 (B) METHOD OF PAYMENT.—The tax im23 posed by paragraph (1) shall be paid in such 

24 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 the 45th day after the tax restoration date. 

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

6 (A) TAX RESTORATION DATE.—The term 

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

8 the suspension period (as defined in section 

9 4081(f) of the Internal Revenue Code of 1986). 

10 (B) HIGHWAY MOTOR FUEL.—The term 

11 ‘‘highway motor fuel’’ means any liquid on 

12 which tax would have been imposed under sec13 tion 4081 of the Internal Revenue Code of 1986 

14 during the suspension period in effect under 

15 section 4081(f) of such Code but for the 

16 amendments made by subsection (a). 

17 (C) HELD BY A PERSON.—A highway 

18 motor fuel shall be considered as held by a per19 son if title thereto has passed to such person 

20 (whether or not delivery to the person has been 

21 made). 

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

23 means the Secretary of the Treasury or the 

24 Secretary’s delegate. 


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

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

3 highway motor fuel held by any person exclusively 

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

5 tax is allowable for such use. 

6 (5) EXCEPTION FOR CERTAIN AMOUNTS OF

7 FUEL.— 

8 (A) IN GENERAL.—No tax shall be im9 posed by paragraph (1) on any highway motor 

10 fuel held on the tax restoration date by any per11 son if the aggregate amount of such highway 

12 motor fuel held by such person on such date 

13 does not exceed 2,000 gallons. The preceding 

14 sentence shall apply only if such person submits 

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

16 required by the Secretary) such information as 

17 the Secretary shall require for purposes of this 

18 subparagraph. 

19 (B) EXEMPT FUEL.—For purposes of sub20 paragraph (A), there shall not be taken into ac21 count any highway motor fuel held by any per22 son which is exempt from the tax imposed by 

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

24 (C) CONTROLLED GROUPS.—For purposes 

25 of this subsection— 


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1 (i) CORPORATIONS.— 

2 (I) IN GENERAL.—All persons 

3 treated as a controlled group shall be 

4 treated as 1 person. 

5 (II) CONTROLLED GROUP.—The 

6 term ‘‘controlled group’’ has the 

7 meaning given to such term by sub8 section (a) of section 1563 of such 

9 Code; except that for such purposes 

10 the phrase ‘‘more than 50 percent’’ 

11 shall be substituted for the phrase ‘‘at 

12 least 80 percent’’ each place it ap13 pears in such subsection. 

14 (ii) NONINCORPORATED PERSONS

15 UNDER COMMON CONTROL.—Under regula16 tions prescribed by the Secretary, prin17 ciples similar to the principles of subpara18 graph (A) shall apply to a group of per19 sons under common control if 1 or more of 

20 such persons is not a corporation. 

21 (6) OTHER LAWS APPLICABLE.—All provisions 

22 of law, including penalties, applicable with respect to 

23 the taxes imposed by section 4081 of such Code 

24 shall, insofar as applicable and not inconsistent with 

25 the provisions of this subsection, apply with respect 


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

2 the same extent as if such taxes were imposed by 

3 such section. 

4 SEC. 4. SUSPENSION OF ROYALTY RELIEF. 

5 (a) NEW LEASES.— 

6 (1) REQUIREMENT.—The Secretary of the Inte7 rior (referred to in this title as the ‘‘Secretary’’) 

8 shall suspend the application of any provision of 

9 Federal law under which a person would otherwise 

10 be provided relief from a requirement to pay a roy11 alty for the production of oil or natural gas from 

12 Federal land (including submerged land) occurring 

13 on or after the date of enactment of this Act during 

14 a period in which— 

15 (A) for the production of oil, the average 

16 price of crude oil in the United States during 

17 the 4-week period immediately preceding the 

18 suspension is greater than $35.86 per barrel; 

19 and 

20 (B) for the production of natural gas, the 

21 average wellhead price of natural gas in the 

22 United States during the 4-week period imme23 diately preceding the suspension is greater than 

24 $4.48 per 1,000 cubic feet. 


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1 (2) DETERMINATION OF AVERAGE PRICES.— 

2 For purposes of paragraph (1), the Secretary shall 

3 determine average prices, taking into consideration 

4 the most recent data reported by the Energy Infor5 mation Administration. 

6 (b) RENEGOTIATION OF EXISTING LEASES.— 

7 (1) REQUIREMENT.—The Secretary shall, to 

8 the maximum extent practicable, renegotiate each 

9 lease authorizing production of oil or natural gas on 

10 Federal land (including submerged land) issued by 

11 the Secretary before the date of the enactment of 

12 this Act as the Secretary determines to be necessary 

13 to modify the terms of the lease to ensure that a 

14 suspension of a requirement to pay royalties under 

15 the lease does not apply to production described in 

16 subsection (a)(1). 

17 (2) FAILURE TO RENEGOTIATE AND MODIFY.— 

18 (A) IN GENERAL.—Beginning on the date 

19 that is 1 year after the date of enactment of 

20 this Act, a lessee that does not renegotiate a 

21 lease described in paragraph (1) in accordance 

22 with that paragraph shall not be eligible to 

23 enter into a new lease authorizing production of 

24 oil or natural gas on Federal land (including 

25 submerged land). 


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1 (B) TRANSFERS.—A lessee shall not be eli2 gible to obtain by sale or other transfer any 

3 lease described in paragraph (1) issued before 

4 the date of enactment of this Act, unless the 

5 lessee— 

6 (i) renegotiates the lease; and 

7 (ii) enters into an agreement with the 

8 Secretary to modify the terms of the lease 

9 in accordance with paragraph (1). 

Æ 


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