II

106TH CONGRESS

2D SESSION S. 2285

Instituting a Federal fuels tax holiday.

IN THE SENATE OF THE UNITED STATES

MARCH 23, 2000

Mr. LOTT (for himself, Mr. MURKOWSKI, Mr. CRAIG, Ms. SNOWE, Mrs.

HUTCHISON, Mr. ABRAHAM, and Mr. GRAMS) introduced the following

bill; which was read the first time

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. TEMPORARY REDUCTION IN FUEL TAXES ON

4 GASOLINE, DIESEL FUEL, KEROSENE, AND

5 AVIATION FUEL, BY 4.3 CENTS, OR TO ZERO.

6 (a) IN GENERAL.—Section 4081 of the Internal Rev7 enue Code of 1986 (relating to imposition of tax on gaso8 line, diesel fuel, and kerosene) is amended by adding at

9 the end the following new subsection:

10 ‘‘(f) TEMPORARY REDUCTION IN TAXES ON GASO11 LINE, DIESEL FUEL, AND KEROSENE.—
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1 ‘‘(1) IN GENERAL.—During the applicable pe2 riod, each rate of tax referred to in paragraph (2)—

3 ‘‘(A) shall be reduced by 4.3 cents per gal4 lon, and

5 ‘‘(B) if at any time during the applicable

6 period the national average price of unleaded

7 regular gasoline is at least $2.00 per gallon (as

8 determined by the Secretary of Energy), shall

9 be reduced to zero beginning on the date which

10 is 7 days after such determination and for the

11 remainder of the applicable period, subject to

12 paragraph (3).

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

14 to in this paragraph are the rates of tax otherwise

15 applicable under—

16 ‘‘(A) clause (i), (ii), (iii) of subsection

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

18 kerosene), and

19 ‘‘(B) paragraph (1) of section 4041(a) (re20 lating to diesel fuel) with respect to fuel sold

21 for use or used in a diesel-powered highway ve22 hicle.

23 ‘‘(3) PROTECTING SOCIAL SECURITY TRUST

24 FUND.—If upon the determination described in

25 paragraph (1)(B), the Secretary, after consultation
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1 with the Director of the Office of Management and

2 Budget, determines that such reduction would result

3 in an aggregate reduction in revenues to the Treas4 ury exceeding the Federal on-budget surplus during

5 the remainder of the applicable period, the Secretary

6 shall modify such reduction such that each rate of

7 tax referred to in paragraph (2) and section

8 4091(e)(1) is reduced in a pro rata manner and

9 such aggregate reduction does not exceed such sur10 plus.

11 ‘‘(4) MAINTENANCE OF TRUST FUND DEPOS12 ITS.—In determining the amounts to be appro13 priated to the Highway Trust Fund under section

14 9503 and the Airport and Airway Trust Fund under

15 section 9502, an amount equal to the reduction in

16 revenues to the Treasury by reason of this sub17 section shall be treated as taxes received in the

18 Treasury under this section.

19 ‘‘(5) APPLICABLE PERIOD.—For purposes of

20 this subsection, the term ‘applicable period’ means

21 the period beginning after April 15, 2000, and end22 ing before January 1, 2001.’’

23 (b) AVIATION FUEL.—Section 4091 of the Internal

24 Revenue Code of 1986 (relating to imposition of tax on
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1 aviation fuel) is amended by adding at the end the fol2 lowing new subsection:

3 ‘‘(e) TEMPORARY REDUCTION IN TAX ON AVIATION

4 FUEL.—

5 ‘‘(1) IN GENERAL.—During the applicable pe6 riod, the rate of tax otherwise applicable under sub7 section (b)(1) shall be reduced as provided in section

8 4081(f)(1).

9 ‘‘(2) MAINTENANCE OF TRUST FUND DEPOS10 ITS.—In determining the amounts to be appro11 priated to the Airport and Airway Trust Fund under

12 section 9502, an amount equal to the reduction in

13 revenues to the Treasury by reason of this sub14 section shall be treated as taxes received in the

15 Treasury under this section.

16 ‘‘(3) APPLICABLE PERIOD.—For purposes of

17 this subsection, the term ‘applicable period’ means

18 the period beginning after April 15, 2000, and end19 ing before January 1, 2001.’’

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

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

22 of this Act.

23 SEC. 2. FLOOR STOCK REFUNDS.

24 (a) IN GENERAL.—If—
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1 (1) before the tax reduction date, tax has been

2 imposed under section 4081 or 4091 of the Internal

3 Revenue Code of 1986 on any liquid, and

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

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

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

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

8 referred to as the ‘‘taxpayer’’) an amount equal to the ex9 cess of the tax paid by the taxpayer over the amount of

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

11 taxable event occurred on the tax reduction date.

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

13 shall be allowed or made under this section unless—

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

15 the Treasury before the date which is 6 months

16 after the tax reduction date, and

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

18 (other than the taxpayer) on the tax reduction

19 date—

20 (A) the dealer submits a request for refund

21 or credit to the taxpayer before the date which

22 is 3 months after the tax reduction date, and

23 (B) the taxpayer has repaid or agreed to

24 repay the amount so claimed to such dealer or

25 has obtained the written consent of such dealer
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1 to the allowance of the credit or the making of

2 the refund.

3 (c) EXCEPTION FOR FUEL HELD IN RETAIL

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

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

6 the place where intended to be sold at retail.

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

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

9 have the respective meanings given to such terms by

10 section 6412 of such Code; except that the term

11 ‘‘dealer’’ includes a producer, and

12 (2) the term ‘‘tax reduction date’’ means April

13 16, 2000.

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

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

16 Code shall apply for purposes of this section.

17 SEC. 3. FLOOR STOCKS TAX.

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

19 on which tax would have been imposed under section 4081

20 or 4091 of the Internal Revenue Code of 1986 during the

21 applicable period but for the amendments made by this

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

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

24 amount equal to the tax which would be imposed on such
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1 liquid had the taxable event occurred on the floor stocks

2 tax date.

3 (b) LIABILITY FOR TAX AND METHOD OF PAY4 MENT.—

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

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

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

8 such tax.

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

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

11 the Secretary shall prescribe.

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

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

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

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

16 (1) HELD BY A PERSON.—A liquid shall be con17 sidered as ‘‘held by a person’’ if title thereto has

18 passed to such person (whether or not delivery to

19 the person has been made).

20 (2) GASOLINE, DIESEL FUEL, AND AVIATION

21 FUEL.—The terms ‘‘gasoline’’, ‘‘diesel fuel’’, and

22 ‘‘aviation fuel’’ have the respective meanings given

23 such terms by sections 4083 and 4093 of such Code.

24 (3) FLOOR STOCKS TAX DATE.—The term

25 ‘‘floor stocks tax date’’ means January 1, 2001.
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1 (4) APPLICABLE PERIOD.—The term ‘‘applica2 ble period’’ means the period beginning after April

3 15, 2000, and ending before January 1, 2001.

4 (5) SECRETARY.—The term ‘‘Secretary’’ means

5 the Secretary of the Treasury or the Secretary’s del6 egate.

7 (d) EXCEPTION FOR EXEMPT USES.—The tax im8 posed by subsection (a) shall not apply to gasoline, diesel

9 fuel, kerosene, or aviation fuel held by any person exclu10 sively for any use to the extent a credit or refund of the

11 tax imposed by section 4081 or 4091 of such Code is al12 lowable for such use.

13 (e) EXCEPTION FOR FUEL HELD IN VEHICLE

14 TANK.—No tax shall be imposed by subsection (a) on gas15 oline, diesel fuel, kerosene, or aviation fuel held in the tank

16 of a motor vehicle, motorboat, or aircraft.

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

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

19 subsection (a)—

20 (A) on gasoline (other than aviation gaso21 line) held on the floor stocks tax date by any

22 person if the aggregate amount of gasoline held

23 by such person on such date does not exceed

24 4,000 gallons, and
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1 (B) on aviation gasoline, diesel fuel, ker2 osene, or aviation fuel held on such date by any

3 person if the aggregate amount of aviation gas4 oline, diesel fuel, kerosene, or aviation fuel held

5 by such person on such date does not exceed

6 2,000 gallons.

7 The preceding sentence shall apply only if such per8 son submits to the Secretary (at the time and in the

9 manner required by the Secretary) such information

10 as the Secretary shall require for purposes of this

11 paragraph.

12 (2) EXEMPT FUEL.—For purposes of para13 graph (1), there shall not be taken into account fuel

14 held by any person which is exempt from the tax im15 posed by subsection (a) by reason of subsection (d)

16 or (e).

17 (3) CONTROLLED GROUPS.—For purposes of

18 this subsection—

19 (A) CORPORATIONS.—

20 (i) IN GENERAL.—All persons treated

21 as a controlled group shall be treated as 1

22 person.

23 (ii) CONTROLLED GROUP.—The term

24 ‘‘controlled group’’ has the meaning given

25 to such term by subsection (a) of section
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1 1563 of such Code; except that for such

2 purposes the phrase ‘‘more than 50 per3 cent’’ shall be substituted for the phrase

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

5 in such subsection.

6 (B) NONINCORPORATED PERSONS UNDER

7 COMMON CONTROL.—Under regulations pre8 scribed by the Secretary, principles similar to

9 the principles of subparagraph (A) shall apply

10 to a group of persons under common control

11 where 1 or more of such persons is not a cor12 poration.

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

14 including penalties, applicable with respect to the taxes

15 imposed by section 4081 or 4091 of such Code shall, inso16 far as applicable and not inconsistent with the provisions

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

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

19 such taxes were imposed by such section 4081 or 4091.

20 SEC. 4. BENEFITS OF TAX REDUCTION SHOULD BE PASSED

21 ON TO CONSUMERS.

22 (a) PASSTHROUGH TO CONSUMERS.—

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

24 Congress that—
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1 (A) consumers immediately receive the

2 benefit of the reduction in taxes under this Act,

3 and

4 (B) transportation motor fuels producers

5 and other dealers take such actions as nec6 essary to reduce transportation motor fuels

7 prices to reflect such reduction, including imme8 diate credits to customer accounts representing

9 tax refunds allowed as credits against excise tax

10 deposit payments under the floor stocks refund

11 provisions of this Act.

12 (2) STUDY.—

13 (A) IN GENERAL.—The Comptroller Gen14 eral of the United States shall conduct a study

15 of the reduction of taxes under this Act to de16 termine whether there has been a passthrough

17 of such reduction.

18 (B) REPORT.—Not later than September

19 30, 2000, the Comptroller General of the

20 United States shall report to the Committee on

21 Finance of the Senate and the Committee on

22 Ways and Means of the House of Representa23 tives the results of the study conducted under

24 subparagraph (A).

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