[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1623 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 1623

To amend the Internal Revenue Code of 1986 to provide that the rate of 
tax on certain fuels derived from natural gas shall be based on the Btu 
     equivalence with a gallon of gasoline, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 15, 1997

Mr. Ensign (for himself, Mr. Matsui, Mr. Sam Johnson of Texas, and Mr. 
   Watkins) 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 that the rate of 
tax on certain fuels derived from natural gas shall be based on the Btu 
     equivalence with a gallon of gasoline, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Clean Fuels Tax Equity Act of 
1997''.

SEC. 2. RATE OF TAX ON CERTAIN FUELS DERIVED FROM NATURAL GAS 
              DETERMINED ON BASIS OF BTU EQUIVALENCE WITH GASOLINE.

    (a) Liquefied Natural Gas and Liquefied Petroleum Gas.--Paragraph 
(2) of section 4041(a) of the Internal Revenue Code of 1986 (relating 
to special motor fuels) is amended by inserting before the period at 
the end of the last sentence ``; except that the rate shall be 12 cents 
per gallon on liquefied natural gas and 13.6 cents per gallon on 
liquefied petroleum gas''.
    (b) Methanol Fuel Produced From Natural Gas.--
            (1) In general.--Paragraph (1) of section 4041(m) of such 
        Code is amended--
                    (A) by redesignating subparagraph (B) as 
                subparagraph (C),
                    (B) in subparagraph (A) by inserting ``except as 
                provided in subparagraph (B),'' after ``(A)'' and by 
                striking ``and'' at the end, and
                    (C) by inserting after subparagraph (A) the 
                following new subparagraph:
                    ``(B) in the case of fuel none of the alcohol in 
                which consists of ethanol, the rate of the tax imposed 
                by subsection (a)(2) shall be--
                            ``(i) the basic Btu equivalency rate after 
                        the date of the enactment of this clause and 
                        before October 1, 1999, and
                            ``(ii) the deficit reduction Btu 
                        equivalency rate after September 30, 1999, 
                        and''.
            (2) Btu equivalency rates.--Subsection (m) of section 4041 
        of such Code is amended by adding at the end the following new 
        paragraph:
            ``(3) Btu equivalency rates.--For purposes of paragraph 
        (1)--
                    ``(A) Basic btu equivalency rate.--The term `basic 
                Btu equivalency rate' means, with respect to any fuel, 
                the number of cents per gallon which bears the same 
                ratio to the number of cents specified in section 
                4081(a)(2)(A)(i) (at the time of the sale or use) as 
                the number of Btu's in a gallon of such fuel bears to 
                the number of Btu's in a gallon of gasoline.
                    ``(B) Deficit reduction btu equivalency rate.--The 
                term `deficit reduction Btu equivalency rate' means the 
                rate which would be determined under subparagraph (A) 
                if `4.3 cents' were substituted for the number of cents 
                specified in section 4081(a)(2)(A)(i).''
    (c) Reduction in Rates Not Borne by Highway Trust Fund.--
            (1) Subparagraph (A) of section 9503(f)(1) of such Code is 
        amended by striking all that follows ``fuels,'' and inserting 
        ``14 cents per gallon (12 cents per gallon in the case of 
        liquefied natural gas and 13.6 cents per gallon in the case of 
        liquefied petroleum gas), and''.
            (2) Subparagraph (C) of section 9503(f)(3) of such Code is 
        amended by adding at the end the following new sentence: ``For 
        periods after the date of the enactment of this sentence, in 
        the case of fuel none of the alcohol in which consists of 
        ethanol, clause (ii) shall be applied by substituting `deficit 
        reduction Btu equivalency rate (as defined in section 
        4041(m)(3))' for `4.3 cents per gallon'.''
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
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