II

Calendar No. 465

106TH CONGRESS

2D SESSION S. 2262

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 (for himself, Mr. MURKOWSKI, Mr. CRAIG, Mr. COVERDELL, Mrs.

HUTCHISON, Ms. COLLINS, and Ms. SNOWE) 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 OF 4.3 CENTS PER

4 GALLON IN FUEL TAXES ON GASOLINE, DIE5 SEL FUEL, KEROSENE, AND 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 4.3-CENT REDUCTION IN TAXES

4 ON GASOLINE, 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 4.3 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) MAINTENANCE OF TRUST FUND DEPOS19 ITS.—In determining the amounts to be appro20 priated to the Highway Trust Fund under section

21 9503 and the Airport and Airway Trust Fund under

22 section 9502, an amount equal to the reduction in

23 revenues to the Treasury by reason of this sub24 section shall be treated as taxes received in the

25 Treasury under this section.
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1 ‘‘(4) APPLICABLE PERIOD.—For purposes of

2 this subsection, the term ‘applicable period’ means

3 the period beginning after April 15, 2000, and end4 ing before January 1, 2001.’’

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

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

7 aviation fuel) is amended by adding at the end the fol8 lowing new subsection:

9 ‘‘(e) TEMPORARY 4.3-CENT REDUCTION IN TAX ON

10 AVIATION FUEL.—

11 ‘‘(1) IN GENERAL.—During the applicable pe12 riod, the rate of tax otherwise applicable under sub13 section (b)(1) shall be reduced by 4.3 cents per gal14 lon.

15 ‘‘(2) MAINTENANCE OF TRUST FUND DEPOS16 ITS.—In determining the amounts to be appro17 priated to the Airport and Airway Trust Fund under

18 section 9502, an amount equal to the reduction in

19 revenues to the Treasury by reason of this sub20 section shall be treated as taxes received in the

21 Treasury under this section.

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

23 this subsection, the term ‘applicable period’ means

24 the period beginning after April 15, 2000, and end25 ing before January 1, 2001.’’
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1 (c) EFFECTIVE DATE.—The amendments made by

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

3 of this Act.

4 SEC. 2. FLOOR STOCK REFUNDS.

5 (a) IN GENERAL.—If—

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

7 imposed under section 4081 or 4091 of the Internal

8 Revenue Code of 1986 on any liquid, and

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

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

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

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

13 referred to as the ‘‘taxpayer’’) an amount equal to the ex14 cess of the tax paid by the taxpayer over the amount of

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

16 taxable event occurred on the tax reduction date.

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

18 shall be allowed or made under this section unless—

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

20 the Treasury before the date which is 6 months

21 after the tax reduction date, and

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

23 (other than the taxpayer) on the tax reduction

24 date—
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1 (A) the dealer submits a request for refund

2 or credit to the taxpayer before the date which

3 is 3 months after the tax reduction 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 (c) EXCEPTION FOR FUEL HELD IN RETAIL

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

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

12 the place where intended to be sold at retail.

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

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

15 have the respective meanings given to such terms by

16 section 6412 of such Code; except that the term

17 ‘‘dealer’’ includes a producer, and

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

19 16, 2000.

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

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

22 Code shall apply for purposes of this section.

23 SEC. 3. FLOOR STOCKS TAX.

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

25 on which tax was imposed under section 4081 or 4091
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1 of the Internal Revenue Code of 1986 during the applica2 ble period, and which is held on the floor stocks tax date

3 by any person, there is hereby imposed a floor stocks tax

4 of 4.3 cents per gallon.

5 (b) LIABILITY FOR TAX AND METHOD OF PAY6 MENT.—

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

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

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

10 such tax.

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

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

13 the Secretary shall prescribe.

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

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

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

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

18 (1) HELD BY A PERSON.—A liquid shall be con19 sidered as ‘‘held by a person’’ if title thereto has

20 passed to such person (whether or not delivery to

21 the person has been made).

22 (2) GASOLINE, DIESEL FUEL, AND AVIATION

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

24 aviation fuel have the respective meanings given

25 such terms by sections 4083 and 4093 of such Code.
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1 (3) FLOOR STOCKS TAX DATE.—The term

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

3 (4) APPLICABLE PERIOD.—The term ‘‘applica4 ble period’’ means the period beginning after April

5 15, 2000, and ending before January 1, 2001.

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

7 the Secretary of the Treasury or the Secretary’s del8 egate.

9 (d) EXCEPTION FOR EXEMPT USES.—The tax im10 posed by subsection (a) shall not apply to gasoline, diesel

11 fuel, kerosene, or aviation fuel held by any person exclu12 sively for any use to the extent a credit or refund of the

13 tax imposed by section 4081 of such Code is allowable for

14 such use.

15 (e) EXCEPTION FOR FUEL HELD IN VEHICLE

16 TANK.—No tax shall be imposed by subsection (a) on gas17 oline, diesel fuel, kerosene, or aviation fuel held in the tank

18 of a motor vehicle, motorboat, or aircraft.

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

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

21 subsection (a)—

22 (A) on gasoline (other than aviation gaso23 line) held on the floor stocks tax date by any

24 person if the aggregate amount of gasoline held
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1 by such person on such date does not exceed

2 4,000 gallons, and

3 (B) on aviation gasoline, diesel fuel, ker4 osene, or aviation fuel held on such date by any

5 person if the aggregate amount of aviation gas6 oline, diesel fuel, kerosene, or aviation fuel held

7 by such person on such date does not exceed

8 2,000 gallons.

9 The preceding sentence shall apply only if such per10 son submits to the Secretary (at the time and in the

11 manner required by the Secretary) such information

12 as the Secretary shall require for purposes of this

13 paragraph.

14 (2) EXEMPT FUEL.—For purposes of para15 graph (1), there shall not be taken into account fuel

16 held by any person which is exempt from the tax im17 posed by subsection (a) by reason of subsection (d)

18 or (e).

19 (3) CONTROLLED GROUPS.—For purposes of

20 this subsection—

21 (A) CORPORATIONS.—

22 (i) IN GENERAL.—All persons treated

23 as a controlled group shall be treated as 1

24 person.
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1 (ii) CONTROLLED GROUP.—The term

2 ‘‘controlled group’’ has the meaning given

3 to such term by subsection (a) of section

4 1563 of such Code; except that for such

5 purposes the phrase ‘‘more than 50 per6 cent’’ shall be substituted for the phrase

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

8 in such subsection.

9 (B) NONINCORPORATED PERSONS UNDER

10 COMMON CONTROL.—Under regulations pre11 scribed by the Secretary, principles similar to

12 the principles of subparagraph (A) shall apply

13 to a group of persons under common control

14 where 1 or more of such persons is not a cor15 poration.

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

17 including penalties, applicable with respect to the taxes

18 imposed by section 4081 of such Code shall, insofar as

19 applicable and not inconsistent with the provisions of this

20 subsection, apply with respect to the floor stock taxes im21 posed by subsection (a) to the same extent as if such taxes

22 were imposed by such section 4081.

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

24 ON TO CONSUMERS.

25 (a) PASSTHROUGH TO CONSUMERS.—
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1 (1) SENSE OF CONGRESS.—It is the sense of

2 Congress that—

3 (A) consumers immediately receive the

4 benefit of the 4.3-cent reduction in taxes under

5 this Act, and

6 (B) transportation motor fuels producers

7 and other dealers take such actions as nec8 essary to reduce transportation motor fuels

9 prices to reflect such reduction, including imme10 diate credits to customer accounts representing

11 tax refunds allowed as credits against excise tax

12 deposit payments under the floor stocks refund

13 provisions of this Act.

14 (2) STUDY.—

15 (A) IN GENERAL.—The Comptroller Gen16 eral of the United States shall conduct a study

17 of the 4.3-cent reduction of taxes under this

18 Act to determine whether there has been a

19 passthrough of such reduction.

20 (B) REPORT.—Not later than September

21 30, 2000, the Comptroller General of the

22 United States shall report to the Committee on

23 Finance of the Senate and the Committee on

24 Ways and Means of the House of Representa-
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1 tives the results of the study conducted under

2 subparagraph (A).

Calendar No. 465

106TH CONGRESS

2D SESSION S. 2262

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