[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2285 Placed on Calendar Senate (PCS)]






                                                       Calendar No. 473
106th CONGRESS
  2d Session
                                S. 2285

                Instituting a Federal fuels tax holiday.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 23, 2000

   Mr. Lott (for himself, Mr. Murkowski, Mr. Craig, Ms. Snowe, Mrs. 
 Hutchison, Mr. Abraham, and Mr. Grams) introduced the following bill; 
                     which was read the first time

                             March 27, 2000

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
                Instituting a Federal fuels tax holiday.

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

SECTION 1. TEMPORARY REDUCTION IN FUEL TAXES ON GASOLINE, DIESEL FUEL, 
              KEROSENE, AND AVIATION FUEL, BY 4.3 CENTS, OR TO ZERO.

    (a) In General.--Section 4081 of the Internal Revenue Code of 1986 
(relating to imposition of tax on gasoline, diesel fuel, and kerosene) 
is amended by adding at the end the following new subsection:
    ``(f) Temporary Reduction in Taxes on Gasoline, Diesel Fuel, and 
Kerosene.--
            ``(1) In general.--During the applicable period, each rate 
        of tax referred to in paragraph (2)--
                    ``(A) shall be reduced by 4.3 cents per gallon, and
                    ``(B) if at any time during the applicable period 
                the national average price of unleaded regular gasoline 
                is at least $2.00 per gallon (as determined by the 
                Secretary of Energy), shall be reduced to zero 
                beginning on the date which is 7 days after such 
                determination and for the remainder of the applicable 
                period, subject to paragraph (3).
            ``(2) Rates of tax.--The rates of tax referred to in this 
        paragraph are the rates of tax otherwise applicable under--
                    ``(A) clause (i), (ii), (iii) of subsection 
                (a)(2)(A) (relating to gasoline, diesel fuel, and 
                kerosene), and
                    ``(B) paragraph (1) of section 4041(a) (relating to 
                diesel fuel).
            ``(3) Protecting social security trust funds.--If upon the 
        determination described in paragraph (1)(B), the Secretary, 
        after consultation with the Director of the Office of 
        Management and Budget, determines that such reduction would 
        result in an aggregate reduction in revenues to the Treasury 
        exceeding the Federal on-budget surplus during the remainder of 
        the applicable period, the Secretary shall modify such 
        reduction such that each rate of tax referred to in paragraph 
        (2), subparagraphs (A) and (C) of section 4042(b)(1), and 
        section 4091(e)(1) is reduced in a pro rata manner and such 
        aggregate reduction does not exceed such surplus.
            ``(4) Maintenance of trust fund deposits.--In determining 
        the amounts to be appropriated to the Highway Trust Fund under 
        section 9503 and the Airport and Airway Trust Fund under 
        section 9502, an amount equal to the reduction in revenues to 
        the Treasury by reason of this subsection shall be treated as 
        taxes received in the Treasury under this section.
            ``(5) Applicable period.--For purposes of this subsection, 
        the term `applicable period' means the period beginning after 
        April 15, 2000, and ending before January 1, 2001.''
    (b) Fuel Used in Commercial Transportation on Inland Waterways.--
Section 4042 of the Internal Revenue Code of 1986 (relating to 
imposition of tax on fuel used in commercial transportation on inland 
waterways) is amended by adding at the end the following new 
subsection:
    ``(f) Temporary Reduction in Tax.--
            ``(1) In general.--During the applicable period, the rate 
        of tax otherwise applicable under subparagraphs (A) and (C) of 
        subsection (b)(1) shall be reduced as provided in section 
        4081(f)(1).
            ``(2) Maintenance of trust fund deposits.--In determining 
        the amounts to be appropriated to the Inland Waterways Trust 
        Fund under section 9506, an amount equal to the reduction in 
        revenues to the Treasury by reason of this subsection shall be 
        treated as taxes received in the Treasury under this section.
            ``(3) Applicable period.--For purposes of this subsection, 
        the term `applicable period' means the period beginning after 
        April 15, 2000, and ending before January 1, 2001.''
    (c) Aviation Fuel.--Section 4091 of the Internal Revenue Code of 
1986 (relating to imposition of tax on aviation fuel) is amended by 
adding at the end the following new subsection:
    ``(e) Temporary Reduction in Tax on Aviation Fuel.--
            ``(1) In general.--During the applicable period, the rate 
        of tax otherwise applicable under subsection (b)(1) shall be 
        reduced as provided in section 4081(f)(1).
            ``(2) Maintenance of trust fund deposits.--In determining 
        the amounts to be appropriated to the Airport and Airway Trust 
        Fund under section 9502, an amount equal to the reduction in 
        revenues to the Treasury by reason of this subsection shall be 
        treated as taxes received in the Treasury under this section.
            ``(3) Applicable period.--For purposes of this subsection, 
        the term `applicable period' means the period beginning after 
        April 15, 2000, and ending before January 1, 2001.''
    (d) Effective Date.--The amendments 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 tax reduction date, tax has been imposed 
        under section 4042, 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 excess 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 the tax reduction 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 tax 
        reduction date, and
            (2) in any case where liquid is held by a dealer (other 
        than the taxpayer) on the tax reduction date--
                    (A) the dealer submits a request for refund or 
                credit to the taxpayer before the date which is 3 
                months after the tax reduction date, and
                    (B) the taxpayer has repaid or agreed to repay the 
                amount so claimed to such dealer or has obtained the 
                written consent of such dealer to the allowance 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--
            (1) the terms ``dealer'' and ``held by a dealer'' have the 
        respective meanings given to such terms by section 6412 of such 
        Code; except that the term ``dealer'' includes a producer, and
            (2) the term ``tax reduction date'' means April 16, 2000.
    (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 
would have been imposed under section 4042, 4081, or 4091 of the 
Internal Revenue Code of 1986 during the applicable period but for the 
amendments made by this Act, and which is held on the floor stocks tax 
date by any person, there is hereby imposed a floor stocks tax in an 
amount equal to the tax which would be imposed on such liquid had the 
taxable event occurred on the floor stocks tax date.
    (b) Liability for Tax and Method of Payment.--
            (1) Liability for tax.--A person holding a liquid on the 
        floor stocks tax date 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 the date which is 6 months after the 
        floor stocks tax date.
    (c) Definitions.--For purposes of this section--
            (1) Held by a person.--A liquid 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, diesel fuel, and aviation fuel.--The terms 
        ``gasoline'', ``diesel fuel'', and ``aviation fuel'' have the 
        respective meanings given such terms by sections 4083 and 4093 
        of such Code.
            (3) Floor stocks tax date.--The term ``floor stocks tax 
        date'' means January 1, 2001.
            (4) Applicable period.--The term ``applicable period'' 
        means the period beginning after April 15, 2000, and ending 
        before January 1, 2001.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or the Secretary's delegate.
    (d) Exception for Exempt Uses.--The tax imposed by subsection (a) 
shall not apply to gasoline, diesel fuel, kerosene, or aviation fuel 
held by any person exclusively for any use to the extent a credit or 
refund of the tax imposed by section 4042, 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 gasoline, diesel fuel, kerosene, or 
aviation fuel held in the tank of a motor vehicle, motorboat, vessel, 
or aircraft.
    (f) Exception for Certain Amounts of Fuel.--
            (1) In general.--No tax shall be imposed by subsection 
        (a)--
                    (A) on gasoline (other than aviation gasoline) held 
                on the floor stocks tax date by any person if the 
                aggregate amount of gasoline held by such person on 
                such date does not exceed 4,000 gallons, and
                    (B) on aviation gasoline, diesel fuel, kerosene, or 
                aviation fuel held on such date by any person if the 
                aggregate amount of aviation gasoline, diesel fuel, 
                kerosene, or aviation fuel held by such person on such 
                date does not exceed 2,000 gallons.
        The preceding sentence shall apply only if such person 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 paragraph (1), there 
        shall not be taken into account fuel held by any person which 
        is exempt from the tax imposed 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 percent'' 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 prescribed 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 
                corporation.
    (g) Other Law Applicable.--All provisions of law, including 
penalties, applicable with respect to the taxes imposed by section 
4042, 4081, or 4091 of such Code 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 4042, 4081, or 4091.

SEC. 4. BENEFITS OF TAX REDUCTION SHOULD BE PASSED ON TO CONSUMERS.

    (a) Passthrough to Consumers.--
            (1) Sense of congress.--It is the sense of Congress that--
                    (A) consumers immediately receive the benefit of 
                the reduction in taxes under this Act, and
                    (B) transportation motor fuels producers and other 
                dealers take such actions as necessary to reduce 
                transportation motor fuels prices to reflect such 
                reduction, including immediate credits to customer 
                accounts representing tax refunds allowed as credits 
                against excise tax deposit payments under the floor 
                stocks refund provisions of this Act.
            (2) Study.--
                    (A) In general.--The Comptroller General of the 
                United States shall conduct a study of the reduction of 
                taxes under this Act to determine whether there has 
                been a passthrough of such reduction.
                    (B) Report.--Not later than September 30, 2000, the 
                Comptroller General of the United States shall report 
                to the Committee on Finance of the Senate and the 
                Committee on Ways and Means of the House of 
                Representatives the results of the study conducted 
                under subparagraph (A).
                                     

                                                       Calendar No. 473

106th CONGRESS

  2d Session

                                S. 2285

_______________________________________________________________________

                                 A BILL

                Instituting a Federal fuels tax holiday.

_______________________________________________________________________

                             March 27, 2000

            Read the second time and placed on the calendar