[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2971 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 2971

To amend the Internal Revenue Code of 1986 to provide for a suspension 
            of the highway fuel tax, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 2, 2008

 Mr. Reid (for Mrs. Clinton (for herself and Mr. Menendez)) 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 suspension 
            of the highway fuel tax, 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. HIGHWAY FUEL TAX SUSPENSION.

    (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),
                    ``(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
                    ``(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) Passthrough to Consumers.--
            (1) Sense of congress.--It is the senses of Congress that--
                    (A) consumers immediately receive the benefit of 
                the reduction in taxes resulting from the amendment 
                made by subsection (a), 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 subsection (b).
            (2) Study and enforcement.--The Federal Trade Commission 
        and the Commodities Futures Trading Commission shall use all 
        applicable authorities to monitor oil, diesel, and gasoline 
        markets to ensure that the benefit of the reduction in taxes 
        resulting from the amendment made by subsection (a) is received 
        by consumers.

SEC. 2. TEMPORARY OIL PROFIT FEE.

    (a) In General.--Subtitle E of the Internal Revenue Code of 1986 
(relating to alcohol, tobacco, and certain other excise taxes) is 
amended by adding at the end thereof the following new chapter:

            ``CHAPTER 56--TEMPORARY FEE ON EXCESS OIL PROFIT

``Sec. 5896. Imposition of fee.
``Sec. 5897. Excess profit; etc.
``Sec. 5898. Special rules and definitions.

``SEC. 5896. IMPOSITION OF FEE.

    ``(a) In General.--In addition to any other tax imposed under this 
title, there is hereby imposed on any applicable taxpayer an excise fee 
in an amount equal to 50 percent of the excess profit of such taxpayer 
for any taxable year beginning during 2008.
    ``(b) Applicable Taxpayer.--For purposes of this chapter, the term 
`applicable taxpayer' means, with respect to operations in the United 
States--
            ``(1) any integrated oil company (as defined in section 
        291(b)(4)), and
            ``(2) any other producer or refiner of crude oil with gross 
        receipts from the sale of such crude oil or refined oil 
        products for the taxable year exceeding $1,000,000,000.

``SEC. 5897. EXCESS PROFIT; ETC.

    ``(a) General Rule.--For purposes of this chapter, the term `excess 
profit' means the excess of the adjusted taxable income of the 
applicable taxpayer for the taxable year over the reasonably inflated 
average profit for such taxable year.
    ``(b) Adjusted Taxable Income.--For purposes of this chapter, with 
respect to any applicable taxpayer, the adjusted taxable income for any 
taxable year is equal to the taxable income for such taxable year 
(within the meaning of section 63 and determined without regard to this 
subsection) increased by any interest expense deduction, charitable 
contribution deduction, and any net operating loss deduction carried 
forward from any prior taxable year. In the case of any applicable 
taxpayer which is a foreign corporation, the adjusted taxable income 
shall be determined with respect to such income which is effectively 
connected with the conduct of a trade or business in the United States.
    ``(c) Reasonably Inflated Average Profit.--For purposes of this 
chapter, with respect to any applicable taxpayer, the reasonably 
inflated average profit for any taxable year is an amount equal to the 
average of the adjusted taxable income of such taxpayer for taxable 
years beginning during the 2000-2004 taxable year period (determined 
without regard to the taxable year with the highest adjusted taxable 
income in such period) plus 10 percent of such average.

``SEC. 5898. SPECIAL RULES AND DEFINITIONS.

    ``(a) Withholding and Deposit of Fee.--The Secretary shall provide 
such rules as are necessary for the withholding and deposit of the fee 
imposed under section 5896.
    ``(b) Records and Information.--Each taxpayer liable for tax under 
section 5896 shall keep such records, make such returns, and furnish 
such information as the Secretary may by regulations prescribe.
    ``(c) Return of Fee.--The Secretary shall provide for the filing 
and the time of such filing of the return of the fee imposed under 
section 5896.
    ``(d) Crude Oil.--The term `crude oil' includes crude oil 
condensates and natural gasoline.
    ``(e) Businesses Under Common Control.--For purposes of this 
chapter, all members of the same controlled group of corporations 
(within the meaning of section 267(f)) and all persons under common 
control (within the meaning of section 52(b) but determined by treating 
an interest of more than 50 percent as a controlling interest) shall be 
treated as 1 person.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
chapter.''.
    (b) Clerical Amendment.--The table of chapters for subtitle E of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new item:

          ``Chapter 56--Temporary Fee on Excess Oil Profit''.

    (c) Deductibility of Fee.--The first sentence of section 164(a) of 
the Internal Revenue Code of 1986 (relating to deduction for taxes) is 
amended by inserting after paragraph (5) the following new paragraph:
            ``(6) The fee imposed by section 5896.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning in 2008.

SEC. 3. SUSPENSION OF PETROLEUM ACQUISITION FOR STRATEGIC PETROLEUM 
              RESERVE.

    (a) In General.--Except as provided in subsection (b) and 
notwithstanding any other provision of law, during the period beginning 
on the date of enactment of this Act and ending on December 31, 2008, 
the Secretary of Energy shall suspend acquisition of petroleum for the 
Strategic Petroleum Reserve through the royalty-in-kind program or any 
other acquisition method.
    (b) Resumption.--The Secretary of Energy may resume acquisition of 
petroleum for the Strategic Petroleum Reserve through the royalty-in-
kind program or any other acquisition method under subsection (a) not 
earlier than 30 days after the date on which the Secretary notifies 
Congress that the Secretary has determined that the weighted average 
price of petroleum in the United States for the most recent 90-day 
period is $75 or less per barrel.

SEC. 4. PRICE GOUGING AND MARKET MANIPULATION.

    The Federal Trade Commission and the Commodities Futures Trading 
Commission shall use all applicable authorities to monitor oil, diesel, 
and gasoline markets to prevent price gouging and market manipulation 
in such markets.
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