I
104TH CONGRESS
2D SESSION
H. R. 3457
To amend the Internal Revenue Code of 1986 to suspend the 4.3-cent general
revenue portion of the fuel excise taxes.
IN THE HOUSE OF REPRESENTATIVES
MAY 15, 1996
Ms. JACKSON-LEE of Texas (for herself, Mr. RANGEL, MR. PAYNE of New
Jersey, Ms. WATERS, Ms. EDDIE BERNICE JOHNSON of Texas, Mr.
BISHOP, Mr. ACKERMAN, Ms. BROWN of Florida, Ms. NORTON, Mr. JEF-
FERSON, Mr. STOKES, Mr. WATT of North Carolina, Mr. CLYBURN, Mr.
LEWIS of Georgia, Mr. CONYERS, Mr. OWENS, Mr. FATTAH, Mr.
HILLIARD, Mr. RICHARDSON, Mr. COLLINS of Georgia, Mr. JACKSON of
Illinois, Mr. DELLUMS, Mr. ANDREWS, Mr. ORTIZ, Mr. RUSH, Ms.
SLAUGHTER, Mr. GIBBONS, Mr. CLAY, Ms. VELA´ZQUEZ, Mr. GUTIERREZ,
Mrs. MINK of Hawaii, Mr. BROWN of California, and Mr. LEVIN) intro-
duced the following bill; which was referred to the Committee on Ways
and Means, and in addition to the Committee on National Security, 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 com-
mittee concerned
A BILL
To amend the Internal Revenue Code of 1986 to suspend
the 4.3-cent general revenue portion of the fuel excise taxes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. TEMPORARY SUSPENSION OF 4.3 CENTS OF
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 SUSPENSION
OF 4.3 CENTS
OF
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) RATES OF TAX.—The rates of tax referred
to in this paragraph are the rates of tax otherwise
applicable under—
‘‘(A) subsection (a)(2)(A) (relating to gas-
oline and diesel fuel),
‘‘(B) 
sections 
4091(b)(3)(A) 
and
4092(b)(2) (relating to aviation fuel),
‘‘(C) section 4042(b)(2)(C) (relating to
fuel used on inland waterways),
‘‘(D) paragraph (1) or (2) of section
4041(a) (relating to diesel fuel and special
fuels),
‘‘(E) section 4041(c)(2) (relating to gaso-
line used in noncommercial aviation), and
‘‘(F) 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)(2)(B), 
6421(f)(3)(B)(ii), 
6427(b)(2)(A),
6427(l)(3)(B)(ii), and 6427(l)(4)(B) shall be re-
duced 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 or
4091 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 any liquid
on which tax was imposed under section 4081 or 4091
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 a
liquid 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.—A liquid shall be con-
sidered 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
meanings given such terms by section 4083 of such
Code.
(3) AVIATION FUEL.—The term ‘‘aviation fuel’’
has the meaning given such term by section 4093 of
such Code.
(4) 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, diesel
fuel, or aviation fuel held by any person exclusively for
any use to the extent a credit or refund of the tax imposed
by section 4081 or 4091 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 or aviation fuel held on
such date by any person if the aggregate
amount of diesel fuel or aviation fuel held by
such person on such date does not exceed 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 in the case of gaso-
line and diesel fuel and section 4091 of such Code in the
case of aviation fuel shall, insofar as applicable and not
inconsistent with the provisions of this subsection, apply
with respect to the floor stock taxes imposed by subsection
(a) to the same extent as if such taxes were imposed by
such section 4081 or 4091.
SEC. 4. REIMPOSITION OF TAX IF NOT PASSED THROUGH
TO CONSUMERS.
(a) GAS TAX REDUCTION ONLY TO BENEFIT CON-
SUMERS.—It shall be unlawful for any person selling or
importing any taxable fuel to fail to fully pass on (through
a price reduction) the reduction in tax on such fuel under
this Act.
(b) ENFORCEMENT PROVISIONS APPLICABLE
TO
LARGE REFINERS.—
(1) CERTIFICATION AND PRODUCTION OF EVI-
DENCE.—Each large refiner shall provide to the Sec-
retary of the Treasury or his delegate (hereinafter
referred to as the ‘‘Secretary’’) each calendar year—
(A) a certification, under penalty of per-
jury, as to whether the refiner met the require-
ments of subsection (a), and
(B) such evidence as the Secretary deter-
mines necessary under the regulations under
subsection (c).
(2) REIMPOSITION OF TAXES.—
(A) IN GENERAL.—If the requirement of
subsection (a) that the tax reduction be fully
passed on to the consumer is not met with re-
spect to any taxable fuel, the person otherwise
liable for payment of taxes imposed on such
fuel shall be liable for such taxes as if this Act
had not been enacted.
(B) WAIVER.—In the case of a failure
which is due to reasonable cause and not to
willful neglect, the Secretary may waive part or
all of the taxes imposed by subparagraph (A) to
the extent that payment of the taxes would be
excessive relative to the failure involved.
(c) REGULATIONS.—The Secretary, after consulta-
tion with the Secretary of Energy and the Attorney Gen-
eral of the United States, shall prescribe regulations which
set forth the evidence required to be submitted under sub-
section (b)(1). Such evidence shall be the evidence the Sec-
retary deems necessary to determine whether the require-
ments of subsection (a) are met, including evidence of in-
creases or decreases in profit margins, changes in costs
or revenues, and increases in earnings.
(d) DEFINITIONS.—For purposes of this section—
(1) LARGE REFINER.—
(A) IN
GENERAL.—The term ‘‘large re-
finer’’ means, with respect to a calendar year,
any 
person 
which 
refined 
or 
imported
800,000,000 gallons or more of taxable fuel
during the preceding calendar year.
(B) 
RELATED
PERSONS.—All 
persons
treated as a single employer under section 52 of
the Internal Revenue Code of 1986 shall be
treated as 1 person for purposes of this section.
(2) TAXABLE FUEL.—The term ‘‘taxable fuel’’
has the meaning given such term by section 4083(a)
of such Code.
SEC. 5. OFFSETTING REDUCTIONS IN DEFENSE BUDGET
AUTHORITY.
(a) REQUIRED REDUCTION.—Not later than 20 days
after the date of the enactment of this Act, the Secretary
of Defense shall cancel available budget authority in cur-
rent defense procurement accounts in such amounts as
may be necessary to achieve a reduction in the amount
of $2,900,000,000 in outlays by the Department of De-
fense from such accounts during the period beginning on
the date of the enactment of this Act and ending at the
close of December 31, 1996.
(b) IDENTIFICATION OF PROGRAMS TO BE CUT.—
The Secretary of Defense shall submit to Congress a re-
port specifying the programs, projects, and activities of
the Department of Defense from which cancellations of
budget authority are made for the purposes of subsection
(a). Such report shall show the specific dollar amount of
budget authority cancelled from each such program,
project, or activity.
(c) EFFECT
OF CANCELLATIONS.—Amounts can-
celled under this section shall not be available for obliga-
tion for any purpose.
(d) DEFINITIONS.—For purposes of this section:
(1) AVAILABLE
BUDGET
AUTHORITY.—The
term ‘‘available budget authority’’ means amounts
appropriated before the date of the enactment of
this Act for the Department of Defense that remain
available for obligation as of such date.
(2) CURRENT PROCUREMENT ACCOUNTS.—The
term ‘‘current defense procurement accounts’’ means
appropriation accounts provided under the major
heading ‘‘PROCUREMENT’’ in any Act making ap-
propriations for the Department of Defense that was
enacted before the date of the enactment of this Act
and for which, with respect to any such account, the
period of availability for obligation has not expired
as of such date.
Æ