[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2890 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 2890

  To amend the Internal Revenue Code of 1986 to provide for a highway 
                           fuel tax holiday.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 17, 2008

 Mr. McCain (for himself, Mr. Kyl, Mr. Burr, Mr. Graham, Mr. Martinez, 
 Mr. Warner, Mr. Chambliss, Mr. Lieberman, and Mr. Sununu) introduced 
the following bill; which was read twice and referred to the Committee 
                               on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to provide for a highway 
                           fuel tax holiday.

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

SECTION 1. HIGHWAY FUEL TAX HOLIDAY.

    (a) Temporary Suspension of Highway Fuel Taxes on Gasoline and 
Diesel Fuel.--
            (1) 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 Suspension of Taxes on Gasoline and Diesel Fuel.--
            ``(1) In general.--During the applicable period, each rate 
        of tax referred to in paragraph (2) shall be reduced to zero 
        cents per gallon.
            ``(2) Rates of tax.--The rates of tax referred to in this 
        paragraph are--
                    ``(A) the rate of tax otherwise applicable to 
                gasoline under clause (i) of subsection (a)(2)(A), 
                determined with regard to subsection (a)(2)(B) and 
                without regard to subsection (a)(2)(C),
                    ``(B) the rate of tax otherwise applicable to 
                diesel fuel under clause (iii) of subsection (a)(2)(A), 
                determined with regard to subsection (a)(2)(B) and 
                without regard to subsection (a)(2)(C), and
                    ``(C) the rate of tax otherwise applicable to 
                diesel fuel under paragraph (1) of section 4041(a) with 
                respect to fuel sold for use or used in a diesel-
                powered highway vehicle.
            ``(3) Applicable period.--For purposes of this subsection, 
        the term `applicable period' means the period beginning on May 
        26, 2008, and ending on September 1, 2008.
            ``(4) Maintenance of trust fund deposits.--In determining 
        the amounts to be appropriated to the Highway Trust Fund under 
        section 9503 and to the Leaking Underground Storage Tank Trust 
        Fund under 9508, 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 or section 
        4041.''.
            (2) Effective date.--The amendment made by this subsection 
        shall take effect on the date of the enactment of this Act.
    (b) Floor Stock Refunds.--
            (1) In general.--If--
                    (A) before the tax suspension date, a tax referred 
                to in section 4081(f)(2) of the Internal Revenue Code 
                of 1986 has been imposed under such Code on any liquid, 
                and
                    (B) 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 subsection referred 
        to as the ``taxpayer''), against the taxpayer's subsequent 
        semi-monthly deposit of such tax, 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 suspension date.
            (2) Time for filing claims; certifications necessary to 
        file claims.--
                    (A) In general.--No credit or refund shall be 
                allowed or made under this subsection--
                            (i) unless claim therefore is filed with 
                        the Secretary before the date which is 6 months 
                        after the tax suspension date, and
                            (ii) in any case where liquid is held by a 
                        dealer (other than the taxpayer) on the tax 
                        suspension date, unless the taxpayer files with 
                        the Secretary--
                                    (I) a certification that the 
                                taxpayer has given a credit to such 
                                dealer with respect to such liquid 
                                against the dealer's first purchase of 
                                liquid from the taxpayer subsequent to 
                                the tax suspension date, and
                                    (II) a certification by such dealer 
                                that such dealer has given a credit to 
                                a succeeding dealer (if any) with 
                                respect to such liquid against the 
                                succeeding dealer's first purchase of 
                                liquid from such dealer subsequent to 
                                the tax suspension date.
                    (B) Reasonableness of claims certified.--Any 
                certification made under subparagraph (A) shall include 
                an additional certification that the claim for credit 
                was reasonably based on the taxpayer's or dealer's past 
                business relationship with the succeeding dealer.
            (3) Definitions.--For purposes of this subsection--
                    (A) 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
                    (B) the term ``tax suspension date'' means May 26, 
                2008.
            (4) 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 subsection.
    (c) Floor Stocks Tax.--
            (1) Imposition of tax.--In the case of any liquid on which 
        tax would have been imposed under section 4081 of the Internal 
        Revenue Code of 1986 during the applicable period but for the 
        amendment made by subsection (a), 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.
            (2) Liability for tax and method of payment.--
                    (A) Liability for tax.--A person holding a liquid 
                on the floor stocks tax date to which the tax imposed 
                by paragraph (1) applies shall be liable for such tax.
                    (B) Method of payment.--The tax imposed by 
                paragraph (1) shall be paid in such manner as the 
                Secretary shall prescribe.
                    (C) Time for payment.--The tax imposed by paragraph 
                (1) shall be paid on or before the date which is 6 
                months after the floor stocks tax date.
            (3) Definitions.--For purposes of this subsection--
                    (A) 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).
                    (B) Gasoline and diesel fuel.--The terms 
                ``gasoline'' and ``diesel fuel'' have the respective 
                meanings given such terms by section 4083 of such Code.
                    (C) Floor stocks tax date.--The term ``floor stocks 
                tax date'' means September 2, 2008.
                    (D) Applicable period.--The term ``applicable 
                period'' means the period described in section 
                4081(f)(3) of such Code.
            (4) Exception for exempt uses.--The tax imposed by 
        paragraph (1) shall not apply to gasoline or diesel 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.
            (5) Exception for fuel held in vehicle tank.--No tax shall 
        be imposed by paragraph (1) on gasoline or diesel fuel held in 
        the tank of a motor vehicle.
            (6) Exception for certain amounts of fuel.--
                    (A) In general.--No tax shall be imposed by 
                paragraph (1)--
                            (i) 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
                            (ii) 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 
                        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 
                subparagraph.
                    (B) Exempt fuel.--For purposes of subparagraph (A), 
                there shall not be taken into account fuel held by any 
                person which is exempt from the tax imposed by 
                paragraph (1) by reason of paragraph (4) or (5).
                    (C) Controlled groups.--For purposes of this 
                paragraph--
                            (i) 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.
                            (ii) Nonincorporated persons under common 
                        control.--Under regulations prescribed by the 
                        Secretary, principles similar to the principles 
                        of clause (i) shall apply to a group of persons 
                        under common control where 1 or more of such 
                        persons is not a corporation.
            (7) 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 paragraph, apply with 
        respect to the floor stock taxes imposed by paragraph (1) to 
        the same extent as if such taxes were imposed by such section 
        4081.
    (d) Secretary.--For purposes of this section, the term 
``Secretary'' means the Secretary of the Treasury or the Secretary's 
delegate.
    (e) Benefits of Tax Reduction Should Be Passed on to Consumers.--It 
is the policy of Congress that--
            (1) consumers immediately receive the benefit of the 
        reduction in taxes resulting from the amendment made by 
        subsection (a), and
            (2) 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 subsection (b).
                                 <all>