I
104TH CONGRESS
2D SESSION
H. R. 3395
To amend the Internal Revenue Code of 1986 to provide a temporary suspen-
sion of 4.3 cents per gallon in the rates of tax on gasoline and diesel
fuel.
IN THE HOUSE OF REPRESENTATIVES
MAY 7, 1996
Mr. BENTSEN introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
a temporary suspension of 4.3 cents per gallon in the
rates of tax on gasoline and diesel fuel.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. TEMPORARY 4.3-CENT REDUCTION IN CERTAIN
FUEL TAX RATES.
(a) IN GENERAL.—Section 4081 of the Internal Rev-
enue Code of 1986 (relating to imposition of tax on gaso-
line and diesel fuel) is amended by adding at the end the
following new subsection:
‘‘(f) TEMPORARY 4.3-CENT REDUCTION IN CERTAIN
FUEL TAX RATES.—
‘‘(1) IN GENERAL.—During the temporary rate
reduction period, each rate of tax referred to in
paragraph (2) shall be reduced by 4.3 cents per gal-
lon.
‘‘(2) RATE OF TAX.—The rates of tax referred
to in this paragraph are—
‘‘(A) each rate of tax under subsection
(a)(2)(A) (relating to gasoline and diesel fuel),
‘‘(B) each rate of tax under paragraph (1)
or (2) of section 4041(a) (relating to diesel fuel
and special fuels), and
‘‘(C) the rate of tax under section
4041(m)(1)(A)(i) (relating to certain methanol
or ethanol fuels).
‘‘(3) COMPARABLE
TREATMENT
FOR
COM-
PRESSED NATURAL GAS.—No tax shall be imposed
by section 4041(a)(3) on any sale or use during the
temporary rate reduction period.
‘‘(4) COMPARABLE
TREATMENT
UNDER
CER-
TAIN REFUND RULES.—In the case of fuel on which
tax is imposed during the temporary rate reduction
period, each of the rates specified in sections
6421(f)(3)(B)(ii), 
6427(b)(2)(A), 
and
6427(l)(3)(B)(ii) shall be reduced by 4.3 cents per
gallon.
‘‘(5) COORDINATION
WITH
HIGHWAY
TRUST
FUND DEPOSITS.—In the case of fuel on which tax
is imposed during the temporary rate reduction pe-
riod, each of the rates specified in subparagraphs
(A)(i) and (C)(i) of section 9503(f)(3) shall be re-
duced by 4.3 cents per gallon.
‘‘(6) TEMPORARY RATE REDUCTION PERIOD.—
For purposes of this subsection, the term ‘temporary
rate reduction period’ means the period after the
date of the enactment of this subsection and before
January 1, 1997.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 2. FLOOR STOCK REFUNDS.
(a) IN GENERAL.—If—
(1) before the date of the enactment of this
Act, tax has been imposed under section 4081 of the
Internal Revenue Code of 1986 on any liquid, and
(2) on such date such liquid is held by a dealer
and has not been used and is intended for sale,
there shall be credited or refunded (without interest) to
the person who paid such tax (hereafter in this section
referred to as the ‘‘taxpayer’’) an amount equal to the ex-
cess of the tax paid by the taxpayer over the amount of
such tax which would be imposed on such liquid had the
taxable event occurred on such date.
(b) TIME FOR FILING CLAIMS.—No credit or refund
shall be allowed or made under this section unless—
(1) claim therefor is filed with the Secretary of
the Treasury before the date which is 6 months
after the date of the enactment of this Act, based
on a request submitted to the taxpayer before the
date which is 3 months after such date of enact-
ment, by the dealer who held the liquid on such date
of enactment, and
(2) the taxpayer has repaid or agreed to repay
the amount so claimed to such dealer or has ob-
tained the written consent of such dealer to the al-
lowance of the credit or the making of the refund.
(c) EXCEPTION
FOR
FUEL
HELD
IN
RETAIL
STOCKS.—No credit or refund shall be allowed under this
section with respect to any liquid in retail stocks held at
the place where intended to be sold at retail.
(d) DEFINITIONS.—For purposes of this section, the
terms ‘‘dealer’’ and ‘‘held by a dealer’’ have the respective
meanings given to such terms by section 6412 of such
Code.
(e) CERTAIN RULES TO APPLY.—Rules similar to the
rules of subsections (b) and (c) of section 6412 of such
Code shall apply for purposes of this section.
SEC. 3. FLOOR STOCKS TAX.
(a) IMPOSITION OF TAX.—In the case of gasoline or
diesel fuel on which tax was imposed under section 4081
of the Internal Revenue Code of 1986 before January 1,
1997, and which is held on such date by any person, there
is hereby imposed a floor stocks tax of 4.3 cents per gal-
lon.
(b) LIABILITY
FOR TAX
AND METHOD
OF PAY-
MENT.—
(1) LIABILITY
FOR
TAX.—A person holding
gasoline or diesel fuel on January 1, 1997, to which
the tax imposed by subsection (a) applies shall be
liable for such tax.
(2) METHOD OF PAYMENT.—The tax imposed
by subsection (a) shall be paid in such manner as
the Secretary shall prescribe.
(3) TIME FOR PAYMENT.—The tax imposed by
subsection (a) shall be paid on or before June 30,
1997.
(c) DEFINITIONS.—For purposes of this section—
(1) HELD BY A PERSON.—Gasoline and diesel
fuel shall be considered as ‘‘held by a person’’ if title
thereto has passed to such person (whether or not
delivery to the person has been made).
(2) GASOLINE AND DIESEL FUEL.—The terms
‘‘gasoline’’ and diesel fuel have the respective mean-
ings given such terms by section 4082 of such Code.
(3) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of the Treasury or his delegate.
(d) EXCEPTION FOR EXEMPT USES.—The tax im-
posed by subsection (a) shall not apply to gasoline or die-
sel fuel held by any person exclusively for any use to the
extent a credit or refund of the tax imposed by section
4081 of such Code is allowable for such use.
(e) EXCEPTION
FOR
FUEL
HELD
IN
VEHICLE
TANK.—No tax shall be imposed by subsection (a) on gas-
oline or diesel fuel held in the tank of a motor vehicle or
motorboat.
(f) EXCEPTION FOR CERTAIN AMOUNTS OF FUEL.—
(1) IN GENERAL.—No tax shall be imposed by
subsection (a)—
(A) on gasoline held on January 1, 1997,
by any person if the aggregate amount of gaso-
line held by such person on such date does not
exceed 4,000 gallons, and
(B) on diesel fuel held on such date by any
person if the aggregate amount of diesel fuel
held by such person on such date does not ex-
ceed 2,000 gallons.
The preceding sentence shall apply only if such per-
son submits to the Secretary (at the time and in the
manner required by the Secretary) such information
as the Secretary shall require for purposes of this
paragraph.
(2) EXEMPT
FUEL.—For purposes of para-
graph (1), there shall not be taken into account fuel
held by any person which is exempt from the tax im-
posed by subsection (a) by reason of subsection (d)
or (e).
(3) CONTROLLED
GROUPS.—For purposes of
this subsection—
(A) CORPORATIONS.—
(i) IN GENERAL.—All persons treated
as a controlled group shall be treated as 1
person.
(ii) CONTROLLED GROUP.—The term
‘‘controlled group’’ has the meaning given
to such term by subsection (a) of section
1563 of such Code; except that for such
purposes the phrase ‘‘more than 50 per-
cent’’ shall be substituted for the phrase
‘‘at least 80 percent’’ each place it appears
in such subsection.
(B) NONINCORPORATED PERSONS UNDER
COMMON
CONTROL.—Under regulations pre-
scribed by the Secretary, principles similar to
the principles of subparagraph (A) shall apply
to a group of persons under common control
where 1 or more of such persons is not a cor-
poration.
(g) OTHER LAW APPLICABLE.—All provisions of law,
including penalties, applicable with respect to the taxes
imposed by section 4081 of such Code shall, insofar as
applicable and not inconsistent with the provisions of this
subsection, apply with respect to the floor stock taxes im-
posed by subsection (a) to the same extent as if such taxes
were imposed by such section 4081.
SEC. 4. REPEAL OF BENEFITS FOR ALCOHOL FUELS.
(a) REPEAL OF ALCOHOL FUELS CREDIT.—
(1) IN GENERAL.—Section 40 of the Internal
Revenue Code of 1986 (relating to alcohol used as
fuel) is hereby repealed.
(2) CONFORMING AMENDMENTS.—
(A) Subsection (b) of section 38 of such
Code is amended by striking paragraph (3) and
by redesignating paragraphs (4) through (8) as
paragraphs (3) through (7), respectively.
(B) Section 87 of such Code is hereby re-
pealed.
(C) Subsection (c) of section 196 of such
Code is amended by striking paragraph (3) and
by redesignating paragraphs (4) and (5) as
paragraphs (3) and (4), respectively.
(D) Subsection (n) of section 6501 of such
Code is amended by striking ‘‘40(f)’’.
(E) The table of sections for subpart D of
part IV of subchapter A of chapter 1 of such
Code is amended by striking the item relating
to section 40.
(F) The table of sections for part II of
subchapter B of chapter 1 of such Code is
amended by striking the item relating to section
87.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to taxable years begin-
ning after the date of the enactment of this Act
(b) REPEAL OF REDUCED FUEL TAX RATES.—
(1) GASOLINE
AND
DIESEL
FUEL.—Section
4081 of such Code is amended by striking sub-