II

Calendar No. 466

106TH CONGRESS

2D SESSION S. 2263

To amend the Internal Revenue Code of 1986 to institute a Federal fuels

tax holiday.

IN THE SENATE OF THE UNITED STATES

MARCH 21, 2000

Mr. LOTT introduced the following bill; which was read the first time

MARCH 22, 2000

Read the second time and placed on the calendar

A BILL

To amend the Internal Revenue Code of 1986 to institute

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.

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, AND KEROSENE.—

5 ‘‘(1) IN GENERAL.—During the applicable pe6 riod, each rate of tax referred to in paragraph (2)

7 shall be reduced by the applicable cents per gallon.

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

9 to in this paragraph are the rates of tax otherwise

10 applicable under—

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

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

13 kerosene), and

14 ‘‘(B) paragraph (1) of section 4041(a) (re15 lating to diesel fuel) with respect to fuel sold

16 for use or used in a diesel-powered highway ve17 hicle.

18 ‘‘(3) APPLICABLE CENTS PER GALLON.—For

19 purposes of this subsection and section 4091(e)(1),

20 the applicable cents per gallon for each rate of tax

21 referred to in paragraph (2) and section 4091(b)(1)

22 shall be an amount determined by the Secretary,

23 after consultation with the Director of the Office of

24 Management and Budget, such that each such rate

25 of tax is reduced in a pro rata manner and that the
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1 resulting aggregate reduction in revenues to the

2 Treasury shall not exceed the Federal on-line budget

3 surplus during the applicable period.

4 ‘‘(4) MAINTENANCE OF TRUST FUND DEPOS5 ITS.—In determining the amounts to be appro6 priated to the Highway Trust Fund under section

7 9503 and the Airport and Airway Trust Fund under

8 section 9502, an amount equal to the reduction in

9 revenues to the Treasury by reason of this sub10 section shall be treated as taxes received in the

11 Treasury under this section.

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

13 this subsection, the term ‘applicable period’ means

14 the period beginning after April 15, 2000, and end15 ing before January 1, 2001.’’

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

17 Revenue Code of 1986 (relating to imposition of tax on

18 aviation fuel) is amended by adding at the end the fol19 lowing new subsection:

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

21 FUEL.—

22 ‘‘(1) IN GENERAL.—During the applicable pe23 riod, the rate of tax otherwise applicable under sub24 section (b)(1) shall be reduced by the applicable
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1 cents per gallon determined under section

2 4081(f)(3).

3 ‘‘(2) MAINTENANCE OF TRUST FUND DEPOS4 ITS.—In determining the amounts to be appro5 priated to the Airport and Airway Trust Fund under

6 section 9502, an amount equal to the reduction in

7 revenues to the Treasury by reason of this sub8 section shall be treated as taxes received in the

9 Treasury under this section.

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

11 this subsection, the term ‘applicable period’ means

12 the period beginning after April 15, 2000, and end13 ing before January 1, 2001.’’

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

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

16 of this Act.

17 SEC. 2. FLOOR STOCK REFUNDS.

18 (a) IN GENERAL.—If—

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

20 imposed under section 4081 or 4091 of the Internal

21 Revenue Code of 1986 on any liquid, and

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

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

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

25 the person who paid such tax (hereafter in this section
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1 referred to as the ‘‘taxpayer’’) an amount equal to the ex2 cess of the tax paid by the taxpayer over the amount of

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

4 taxable event occurred on the tax reduction date.

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

6 shall be allowed or made under this section unless—

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

8 the Treasury before the date which is 6 months

9 after the tax reduction date, and

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

11 (other than the taxpayer) on the tax reduction

12 date—

13 (A) the dealer submits a request for refund

14 or credit to the taxpayer before the date which

15 is 3 months after the tax reduction date, and

16 (B) the taxpayer has repaid or agreed to

17 repay the amount so claimed to such dealer or

18 has obtained the written consent of such dealer

19 to the allowance of the credit or the making of

20 the refund.

21 (c) EXCEPTION FOR FUEL HELD IN RETAIL

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

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

24 the place where intended to be sold at retail.

25 (d) DEFINITIONS.—For purposes of this section—
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1 (1) the terms ‘‘dealer’’ and ‘‘held by a dealer’’

2 have the respective meanings given to such terms by

3 section 6412 of such Code; except that the term

4 ‘‘dealer’’ includes a producer, and

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

6 16, 2000.

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

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

9 Code shall apply for purposes of this section.

10 SEC. 3. FLOOR STOCKS TAX.

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

12 on which tax would have been imposed under section 4081

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

14 applicable period but for the amendments made by this

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

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

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

18 liquid had the taxable event occurred on the floor stocks

19 tax date.

20 (b) LIABILITY FOR TAX AND METHOD OF PAY21 MENT.—

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

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

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

25 such tax.
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1 (2) METHOD OF PAYMENT.—The tax imposed

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

3 the Secretary shall prescribe.

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

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

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

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

8 (1) HELD BY A PERSON.—A liquid shall be con9 sidered as ‘‘held by a person’’ if title thereto has

10 passed to such person (whether or not delivery to

11 the person has been made).

12 (2) GASOLINE, DIESEL FUEL, AND AVIATION

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

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

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

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

17 ‘‘floor stocks tax date’’ means January 1, 2001.

18 (4) APPLICABLE PERIOD.—The term ‘‘applica19 ble period’’ means the period beginning after April

20 15, 2000, and ending before January 1, 2001.

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

22 the Secretary of the Treasury or the Secretary’s del23 egate.

24 (d) EXCEPTION FOR EXEMPT USES.—The tax im25 posed by subsection (a) shall not apply to gasoline, diesel
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1 fuel, kerosene, or aviation fuel held by any person exclu2 sively for any use to the extent a credit or refund of the

3 tax imposed by section 4081 or 4091 of such Code is al4 lowable for such use.

5 (e) EXCEPTION FOR FUEL HELD IN VEHICLE

6 TANK.—No tax shall be imposed by subsection (a) on gas7 oline, diesel fuel, kerosene, or aviation fuel held in the tank

8 of a motor vehicle, motorboat, or aircraft.

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

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

11 subsection (a)—

12 (A) on gasoline (other than aviation gaso13 line) held on the floor stocks tax date by any

14 person if the aggregate amount of gasoline held

15 by such person on such date does not exceed

16 4,000 gallons, and

17 (B) on aviation gasoline, diesel fuel, ker18 osene, or aviation fuel held on such date by any

19 person if the aggregate amount of aviation gas20 oline, diesel fuel, kerosene, or aviation fuel held

21 by such person on such date does not exceed

22 2,000 gallons.

23 The preceding sentence shall apply only if such per24 son submits to the Secretary (at the time and in the

25 manner required by the Secretary) such information
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1 as the Secretary shall require for purposes of this

2 paragraph.

3 (2) EXEMPT FUEL.—For purposes of para4 graph (1), there shall not be taken into account fuel

5 held by any person which is exempt from the tax im6 posed by subsection (a) by reason of subsection (d)

7 or (e).

8 (3) CONTROLLED GROUPS.—For purposes of

9 this subsection—

10 (A) CORPORATIONS.—

11 (i) IN GENERAL.—All persons treated

12 as a controlled group shall be treated as 1

13 person.

14 (ii) CONTROLLED GROUP.—The term

15 ‘‘controlled group’’ has the meaning given

16 to such term by subsection (a) of section

17 1563 of such Code; except that for such

18 purposes the phrase ‘‘more than 50 per19 cent’’ shall be substituted for the phrase

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

21 in such subsection.

22 (B) NONINCORPORATED PERSONS UNDER

23 COMMON CONTROL.—Under regulations pre24 scribed by the Secretary, principles similar to

25 the principles of subparagraph (A) shall apply
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1 to a group of persons under common control

2 where 1 or more of such persons is not a cor3 poration.

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

5 including penalties, applicable with respect to the taxes

6 imposed by section 4081 or 4091 of such Code shall, inso7 far as applicable and not inconsistent with the provisions

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

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

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

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

12 ON TO CONSUMERS.

13 (a) PASSTHROUGH TO CONSUMERS.—

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

15 Congress that—

16 (A) consumers immediately receive the

17 benefit of the reduction in taxes under this Act,

18 and

19 (B) transportation motor fuels producers

20 and other dealers take such actions as nec21 essary to reduce transportation motor fuels

22 prices to reflect such reduction, including imme23 diate credits to customer accounts representing

24 tax refunds allowed as credits against excise tax
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1 deposit payments under the floor stocks refund

2 provisions of this Act.

3 (2) STUDY.—

4 (A) IN GENERAL.—The Comptroller Gen5 eral of the United States shall conduct a study

6 of the reduction of taxes under this Act to de7 termine whether there has been a passthrough

8 of such reduction.

9 (B) REPORT.—Not later than September

10 30, 2000, the Comptroller General of the

11 United States shall report to the Committee on

12 Finance of the Senate and the Committee on

13 Ways and Means of the House of Representa14 tives the results of the study conducted under

15 subparagraph (A).
Calendar No. 466

106TH CONGRESS

2D SESSION S. 2263

A BILL

To amend the Internal Revenue Code of 1986 to

institute a Federal fuels tax holiday.

MARCH 22, 2000

Read the second time and placed on the calendar