[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 497 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 497

 To amend the Internal Revenue Code of 1986 to suspend all motor fuel 
taxes for six months, and to permanently repeal the 4.3-cent per gallon 
             increases in motor fuel taxes enacted in 1993.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 29, 2003

 Mr. Sensenbrenner (for himself and Mr. Smith of Michigan) 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 suspend all motor fuel 
taxes for six months, and to permanently repeal the 4.3-cent per gallon 
             increases in motor fuel taxes enacted in 1993.

    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 ``Freedom from Unfair Energy Levy 
Act''.

SEC. 2. SIX-MONTH SUSPENSION OF FUEL TAXES.

    (a) Six-Month Suspension of Fuel Taxes.--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 Suspension of Fuel Taxes.--
            ``(1) In general.--During the suspension period, each rate 
        of tax referred to in paragraph (2) shall be reduced to zero.
            ``(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 gasoline, 
                diesel fuel, and kerosene),
                    ``(B) sections 4091(b)(3)(A) (relating to aviation 
                fuel),
                    ``(C) section 4042(b)(2)(C) (relating to fuel used 
                on inland waterways),
                    ``(D) paragraph (1), (2), or (3) of section 4041(a) 
                (relating to diesel fuel, special fuels, and compressed 
                natural gas), and
                    ``(E) section 4041(m)(1)(A)(i) (relating to certain 
                methanol or ethanol fuels).
            ``(3) Suspension period.--For purposes of this subsection, 
        the term `suspension period' means the 180-day period beginning 
        on the 30th day after the date of the enactment of this 
        subsection.''
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 3. REPEAL OF 1993 INCREASES IN MOTOR FUEL TAXES.

    (a) Highway Gasoline.--Clause (i) of section 4081(a)(2)(A) of the 
Internal Revenue Code of 1986 is amended by striking ``18.3 cents'' and 
inserting ``14 cents''.
    (b) Aviation Gasoline.--Clause (ii) of section 4081(a)(2)(A) of 
such Code is amended by striking ``19.3 cents'' and inserting ``15 
cents''.
    (c) Diesel Fuel and Kerosene.--Clause (iii) of section 
4081(a)(2)(A) of such Code is amended by striking ``24.3 cents'' and 
inserting ``20 cents''.
    (d) Aviation Fuel.--Paragraph (1) of section 4091(b) of such Code 
is amended by striking ``21.8 cents'' and inserting ``17.5 cents''.
    (e) Fuel Used on Inland Waterways.--
            (1) Paragraph (1) of section 4042(b) of such Code is 
        amended by adding ``and'' at the end of subparagraph (A), by 
        striking ``, and'' at the end of subparagraph (B) and inserting 
        a period, and by striking subparagraph (C).
            (2) Paragraph (2) of section 4042(b) of such Code is 
        amended by striking subparagraph (C).
    (f) Technical Amendments.--
            (1) Subparagraph (B) of section 40(e)(1) of such Code is 
        amended by striking ``during which the rates of tax under 
        section 4081(a)(2)(A) are 4.3 cents per gallon'' and inserting 
        ``during which the rate of tax under section 4081(a)(2)(A)(i) 
        does not apply''.
            (2) Subparagraph (A) of section 4041(a)(1) of such Code is 
        amended by striking ``or a diesel-powered train'' each place it 
        appears and by striking ``or train''.
            (3) Subparagraph (C) of section 4041(a)(1) of such Code is 
        amended by striking clause (ii) and by redesignating clause 
        (iii) as clause (ii).
            (4) Subclause (I) of section 4041(a)(1)(C)(ii) of such 
        Code, as redesignated by paragraph (3), is amended by striking 
        ``7.3 cents'' and inserting ``3 cents'' and by striking ``4.3 
        cents per gallon'' and inserting ``zero''.
            (5) Subsection (a) of section 4041 of such Code is amended 
        by striking paragraph (3).
            (6) Subparagraph (C) of section 4041(b)(1) of such Code is 
        amended by striking all that follows ``section 6421(e)(2)'' and 
        inserting a period.
            (7) Subparagraph (B) of section 4041(a)(2) of such Code is 
        amended by striking all that follows clause (i) and inserting 
        the following new clauses:
                            ``(ii) 10.4 cents per gallon in the case of 
                        liquefied petroleum gas, and
                            ``(iii) 9.1 cents per gallon in the case of 
                        liquefied natural gas.''
            (8) Paragraph (3) of section 4041(c) of such Code is 
        amended to read as follows:
            ``(3) Termination.--The rate of the taxes imposed by 
        paragraph (1) shall be zero after September 30, 2007.''
            (9) Subsection (d) of section 4041 of such Code is amended 
        by redesignating paragraph (3) as paragraph (4) and by 
        inserting after paragraph (2) the following new paragraph:
            ``(3) Diesel fuel used in trains.--There is hereby imposed 
        a tax of 0.1 cent per gallon on any liquid other than gasoline 
        (as defined in section 4083)--
                    ``(A) sold by any person to an owner, lessee, or 
                other operator of a diesel-powered train for use as a 
                fuel in such train, or
                    ``(B) used by any person as a fuel in a diesel-
                powered train unless there was a taxable sale of such 
                fuel under subparagraph (A).
        No tax shall be imposed by this paragraph on the sale or use of 
        any liquid if tax was imposed on such liquid under section 
        4081.''
            (10) Clauses (i) and (ii) of section 4041(m)(1)(A) of such 
        Code are amended to read as follows:
                            ``(i) 7 cents per gallon on and after the 
                        date of the enactment of this clause and before 
                        October 1, 2005, and
                            ``(ii) zero after September 30, 2005, 
                        and''.
            (11) Subsection (c) of section 4081 of such Code is amended 
        by striking paragraph (6) and by redesignating paragraphs (7) 
        and (8) as paragraphs (6) and (7), respectively.
            (12) Paragraphs (1) and (2) of section 4081(d) of such Code 
        are amended to read as follows:
            ``(1) In general.--The rates of tax specified in clauses 
        (i) and (iii) of subsection (a)(2)(A) shall be zero after 
        September 30, 2005.
            ``(2) Aviation gasoline.--The rate of tax specified in 
        subsection (a)(2)(A)(ii) shall be zero after September 30, 
        2007.''
            (13) Subsection (f) of section 4082 of such Code is amended 
        by striking ``section 4041(a)(1)'' and inserting ``subsections 
        (d)(3) and (a)(1) of section 4041, respectively''.
            (14) Paragraph (3) of section 4083(a) of such Code is 
        amended by striking ``or a diesel-powered train''.
            (15) Subparagraph (A) of section 4091(b)(3) of such Code is 
        amended to read as follows:
                    ``(A) The rate of tax specified in paragraph (1) 
                shall be zero after September 30, 2007.''
            (16) Paragraph (1) of section 4091(c) of such Code is 
        amended--
                    (A) by striking ``14 cents'' and inserting ``9.7 
                cents'',
                    (B) by striking ``13.3 cents'' and inserting ``9 
                cents'',
                    (C) by striking ``13.2 cents'' and inserting ``8.9 
                cents'',
                    (D) by striking ``13.1 cents'' and inserting ``8.8 
                cents'', and
                    (E) by striking ``13.4 cents'' and inserting ``9.1 
                cents''.
            (17) Subsection (c) of section 4091 of such Code is amended 
        by striking paragraph (4), and by redesignating paragraph (5) 
        as paragraph (4).
            (18) Subsection (b) of section 4092 of such Code is amended 
        by striking ``attributable to'' and all that follows and 
        inserting ``attributable to the Leaking Underground Storage 
        Tank Trust Fund financing rate imposed by such section. For 
        purposes of the preceding sentence, the term `commercial 
        aviation' means any use of an aircraft other than in 
        noncommercial aviation (as defined in section 4041(c)(2)).''
            (19) Subparagraph (B) of section 6421(f)(2) of such Code is 
        amended by striking ``and,'' and all that follows and inserting 
        a period.
            (20) Paragraph (3) of section 6421(f) of such Code is 
        amended to read as follows:
            ``(3) Gasoline used in trains.--In the case of gasoline 
        used as a fuel in a train, this section shall not apply with 
        respect to the Leaking Underground Storage Tank Trust Fund 
        financing rate under section 4081.''
            (21) Subparagraph (A) of section 6427(b)(2) of such Code is 
        amended by striking ``7.4 cents'' and inserting ``3.1 cents''.
            (22) Paragraph (3) of section 6427(l) of such Code is 
        amended to read as follows:
            ``(3) Refund of certain taxes on fuel used in diesel-
        powered trains.--For purposes of this subsection, the term 
        `nontaxable use' includes fuel used in a diesel-powered train. 
        The preceding sentence shall not apply to the tax imposed by 
        section 4041(d) and the Leaking Underground Storage Tank Trust 
        Fund financing rate under section 4081 except with respect to 
        fuel sold for exclusive use by a State or any political 
        subdivision thereof.''
            (23) Paragraph (4) of section 6427(l) of such Code is 
        amended by striking ``attributable to'' and all that follows 
        through the period and inserting ``attributable to the Leaking 
        Underground Storage Tank Trust Fund financing rate imposed by 
        such section.''
    (g) Effective Date.--The amendments made by this section shall take 
effect on the day after the suspension period ends under section 
4081(f) of the Internal Revenue Code of 1986 (as added by section 2).

SEC. 4. FLOOR STOCK REFUNDS.

    (a) In General.--If--
            (1) before the tax suspension date, 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 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 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 tax 
        suspension date, and
            (2) in any case where liquid is held by a dealer (other 
        than the taxpayer) on the tax suspension date--
                    (A) the dealer submits a request for refund or 
                credit to the taxpayer before the date which is 3 
                months after the tax suspension 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 suspension date'' means the date on 
        which the suspension period begins under section 4081(f) of the 
        Internal Revenue Code of 1986 (as added by section 2).
    (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. 5. FLOOR STOCKS TAX.

    (a) Imposition of Tax.--In the case of any taxable liquid which is 
held on the floor stocks tax date by any person, there is hereby 
imposed a floor stocks tax equal to the excess of the tax which would 
be imposed under section 4041, 4081, or 4091 of the Internal Revenue 
Code of 1986 on such liquid had the taxable event occurred on the floor 
stocks tax date over the tax paid under such sections on such liquid.
    (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) Taxable liquid.--The term ``taxable liquid'' means any 
        liquid on which tax is imposed under section 4041, 4081, or 
        4091 of the Internal Revenue Code of 1986 on the floor stocks 
        tax date.
            (3) Gasoline and diesel fuel.--The terms ``gasoline'' and 
        ``diesel fuel'' have the respective meanings given such terms 
        by section 4083 of such Code.
            (4) Aviation fuel.--The term ``aviation fuel'' has the 
        meaning given such term by section 4093 of such Code.
            (5) Floor stocks tax date.--The term ``floor stocks tax 
        date'' means the day after the end of the suspension period 
        under section 4081(f) of such Code (as added by section 2).
            (6) 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 taxable liquid held by any person exclusively for 
any use to the extent a credit or refund of the tax imposed by section 
4041, 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 taxable liquid 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 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 diesel fuel, kerosene, or aviation fuel held 
                on such date by any person if the aggregate amount of 
                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 
4041(a)(2) of such Code in the case of special fuels; by section 4081 
of such Code in the case of gasoline, diesel fuel, and kerosene; and by 
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 4041, 4081, or 4091.
                                 <all>