[Congressional Record Volume 146, Number 82 (Monday, June 26, 2000)]
[Senate]
[Pages S5809-S5812]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FITZGERALD:
  S. 2790. A bill instituting a Federal fuels tax holiday; to the 
Committee on Finance.


                the federal fuel tax relief act of 2000

  Mr. FITZGERALD. Mr. President, I was in the city of Chicago to 
announce the introduction of a bill today called the Federal Fuel Tax 
Relief Act of 2000. I was standing in Chicago on La Salle Street, in 
what is known as the Loop, the premier business district in downtown 
Chicago. I was at a gas station there. Behind me you could see the 
prices at the pump that that particular gas station in Chicago was 
advertising. Those gas prices were well over $2 a gallon. In fact, I 
think the price for the

[[Page S5810]]

premium blend of fuel was up over $2.30 a gallon.
  Right now, we are in the midst of a very serious crisis in my part of 
the country with respect to gas prices. Prices throughout Illinois are 
at record highs. They are at record highs in Michigan, in Ohio, in 
other parts of the Midwest.
  I am afraid if we do not bring down the cost of gas at the pumps, we 
are going to be seeing shock waves throughout our entire Nation's 
economy. The bill I am introducing today is S. 2790. What it would do 
is bring immediate relief by lowering the cost of gas nationwide for 90 
days by temporarily rolling back the 18.3-cent-per-gallon Federal gas 
tax.
  In the last couple of weeks, anybody who has been following the news 
anywhere in this country has seen nothing but nonstop coverage about 
the escalating price, the rising price of gasoline. The response at the 
State level and at the Federal level, amongst public officials, has 
been to find somebody to blame. Is it the OPEC nations? Is it the oil 
industry? Is it the administration? But no one is taking any action to 
actually bring down prices. We can argue about culpability later. What 
we need to do now is to lower prices at the pump or we are going to see 
losses of jobs and losses of economic productivity.
  We will see senior citizens who cannot even afford to drive to the 
pharmacy to buy the pharmaceuticals, for which they already are having 
a hard time paying. We are going to see college students who cannot 
afford to make the commute to their community colleges. We need to have 
a long-term plan to increase productivity of oil in this country to 
lessen our dependence on foreign sources of oil. There are a number of 
measures that have been introduced in recent weeks in the Congress. The 
administration last week sent over recommendations on what our long-
term solution should be for this energy crunch.
  But in the meantime, there are countless families all across the 
country that may have to cancel summer vacations, families that have 
worked hard all year, but now all of a sudden, when it comes time for 
them to have a couple of weeks off to take their families on a 
vacation, they can't afford the cost of the vacation because the price 
of gasoline has gone up so much.
  There will be many who will criticize my proposal. There will be many 
who come up with arguments against it. Certainly many will bring up the 
point that the proceeds from the motor fuels tax goes into our Federal 
highway trust fund. This legislation would hold harmless the highway 
trust fund. It would require the Federal Government to make up any loss 
to the highway trust fund by taking money from the on-budget or non-
Social Security surplus and indemnify that road fund. We all want to 
make sure we continue to improve and repair our roads in this country.
  But the fact remains, the only instrument that the Federal and State 
governments have to directly affect the price of gasoline at the pump 
is to lower the motor fuels tax. My State, I hope, is going to do its 
part. A couple of weeks back, I pointed out that Illinois has amongst 
the highest gas taxes in the country. In fact, in addition to a motor 
fuel tax that is 19 cents a gallon, the State of Illinois has a sales 
tax on motor fuel that is assessed on top of the Federal motor fuels 
tax. In other words, Illinois has what we would call a tax on a tax. 
That sales tax on gasoline in Illinois is a percentage tax, so, as the 
selling price of gasoline has gone from $1 to over $2 in Illinois, the 
State's take on its sales tax has been increasing dramatically. It has 
doubled its take under that sales tax.

  The Governor of Illinois and legislative leaders recently called a 
special session of our Illinois General Assembly, which will be 
convening in 2 days, to temporarily roll back or repeal that Illinois 
sales tax on gasoline. If they enact that legislation, that should take 
10 cents off the price of every gallon of gas sold in Illinois. But the 
prices will still be too high. We need further relief. My State is not 
the only State that is suffering. States across the country, and 
particularly in the hard-hit Midwest, need relief.
  Like you, Mr. President, and my other colleagues in the Senate, all 
of us are in virtually constant contact with our constituents. We have 
an endless stream of letters, of faxes, of e-mails, of calls to our 
offices on a daily basis. We travel up and down our States. We march in 
parades. We are constantly talking to the constituents, whether it is 
in the grocery store, as I was doing over the weekend, or in parades 
that I was in recently. The No. 1 single issue that I have been hearing 
about is we have to do something to bring down prices at the pump.
  Let me share a few of the letters my office has received on this 
issue. I am going to try to just go through a few of them because we 
have gotten literally thousands. I think, to some of the people in 
Washington, the pain people are feeling out in the Midwest and around 
the country about the rising cost of gas sounds like some kind of 
theoretical abstraction. But I have to tell you, for real people who 
are trying to drive to work, who may have a long way to drive to work 
or get to school, or senior citizens on fixed incomes, or folks in 
lower income brackets--they are having a very tough time. I have had 
many people tell me they have canceled weekend vacations and they are 
planning to cancel summer vacations.
  Let me read parts of a few of these letters. This one is from a 
resident of Springfield, IL, who is a part-time driver for a senior 
services van service that runs vans for senior citizens to and from a 
senior citizens center. He says that the escalating gas prices are 
really hurting the transportation budget at the center. If we have to 
shut down the van service, it would be a tremendous loss for the 
seniors.
  This one from a senior citizen in southern Illinois says that now we 
cannot afford to drive to the pharmacy to purchase the drugs that we 
already cannot afford.
  A person from Rantoul, IL, says that gas prices in Illinois are too 
high. It costs me more than $87 a week to drive to and from work now 
that the prices have skyrocketed. I cannot afford this for much longer.
  A small business owner in the Chicago suburbs--small businesses are 
suffering. He says: I have had small business men and women in my 
office saying they have lost money for several months in a row and 
could have to shut down if this keeps up. The current fuel prices are 
killing my small business.
  I am a small business owner who employs 20 people from McHenry County 
and 10 people from Lake County. This increase in fuel is killing my 
profit line. If this does not stop, I do not know how much longer we 
can survive.

  This is an interesting letter from a community college administrator 
in central Illinois. This person pointed out that, unlike many 
colleges, his school is a commuter college and students drive anywhere 
from 20 to 60 miles. That is 40 to 120 miles round trip to attend 
college. Most of the students are trying to better themselves by 
working part time and going to school. Now with gasoline prices 
soaring, they are being forced to drop out.
  This individual from Danville, IL, after a lengthy letter explaining 
how, for his job, he had to drive, at the end he said if the prices 
raise much higher, he will have to dip into his son's and daughter's 
education fund just so he can keep driving back and forth to work.
  I have another letter from a community college student. He is from 
Sherman, IL. He describes in his letter how he turned down State full-
time universities because of the cost and because he wanted to attend 
his community college. It would be more affordable.
  Now that he has started at his community college and is having to dig 
deep into his pocket just to pay for the price of gas to get to and 
from college, he is getting squeezed. He has a 30-mile distance to go 
just to get to his school. He said: Just to let you know, I am not a 
freeloader. I am currently holding down three jobs and working through 
the summer. I do not expect you to work a miracle, but maybe submit 
some form of legislation that would reduce the price or give a break to 
students furthering their education.
  A husband from western Illinois has to commute 100 miles a day to 
work. That is how it is in rural parts of the country, as the Presiding 
Officer knows in his largely rural State. The wife has to drive 55 
miles to work, and then the kids have to go 15 miles for their various 
athletic events and the like.
  He says: We are probably more fortunate than most people, but if this

[[Page S5811]]

keeps up, it will be hard to commute into work every day, and there is 
no public transportation or opportunity to car pool in our downstate 
Illinois region. We barely have highways.
  Finally, another letter from a retired senior citizen on fixed income 
said: It is extremely hard to get along with gasoline prices so high. I 
have curtailed driving to a bare minimum, only to the doctor, shopping, 
church, and as a volunteer to a community radio station where I 
broadcast a show every Saturday.
  I think we need to take action. It is time for Washington and 
Congress to stop playing the blame game. We can argue about who is 
culpable later. I support the Federal Trade Commission investigation. 
We need to find out if anybody has been colluding in the oil industry 
or anywhere else to fix prices, and if they have been, they ought to go 
to jail for a very long time.
  That investigation is going to take a while. It is going to take a 
while to put pressure on OPEC nations to loosen the taps and to 
increase production. It is going to take a while until we get 
incentives in the system for the small oil well drillers in the United 
States to boost their production.
  Once that is boosted, we could be getting as many as 500,000 more 
barrels of oil a day. We probably have to take a look at what kind of 
tax laws we have to give people incentives to keep drilling even when 
the price of oil is low, but we need to give people relief now.
  It is a compassionate move. It makes sense. Our country, the most 
prosperous country in the world, can afford to give some relief to 
taxpayers and consumers, and if we do not give that relief, we will 
probably pay for it later because there is going to be a slowdown in 
economic activity. It may start in the Midwest, but it is eventually 
going to send shock waves all across the country, and this country 
could go into a long slump because of it.
  I hope to get many Senators and Members of this body as cosponsors of 
this legislation. We had a test vote earlier in the year, in April, on 
temporarily lowering the Federal gas tax. At that time, the measure 
received only 43 votes. It needed over 50 to pass. That was 2 months 
ago, and in the intervening time, oil prices have continued to 
skyrocket. The price which was only theoretical 2 months ago is now 
real. It is upon us. We need to take action.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2790

       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 ``Federal Fuel Tax Relief Act 
     of 2000''.

     SEC. 2. TEMPORARY REDUCTION IN FUEL TAXES ON GASOLINE, DIESEL 
                   FUEL, KEROSENE, AND SPECIAL FUELS 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, Kerosene, and Special Fuels.--
       ``(1) In general.--During the applicable 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) clauses (i) and (iii) of subsection (a)(2)(A) 
     (relating to gasoline, diesel fuel, and kerosene), and
       ``(B) paragraphs (1), (2), and (3) of section 4041(a) 
     (relating to diesel fuel and special fuels) and section 
     4041(m) (relating to certain alcohol fuels) with respect to 
     fuel sold for use or used in a highway vehicle.
       ``(3) Special Reduction Rules.--In the case of a reduction 
     under paragraph (1)--
       ``(A) subsection (c) shall be applied without regard to 
     paragraph (6) thereof,
       ``(B) section 40(e)(1) shall be applied without regard to 
     subparagraph (B) thereof,
       ``(C) section 4041(d)(1) shall be applied by disregarding 
     `if tax is imposed by subsection (a)(1) or (2) on such sale 
     or use', and
       ``(D) section 6427(b) shall be applied without regard to 
     paragraph (2) thereof.
       ``(4) Protecting Social Security Trust Fund.--If 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) is reduced in a pro rata manner and such 
     aggregate reduction does not exceed such surplus.
       ``(5) Maintenance of trust fund deposits.--In determining 
     the amounts to be appropriated to the Highway Trust Fund 
     under section 9503 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.
       ``(6) Applicable period.--For purposes of this subsection, 
     the term `applicable period' means a 90-day period beginning 
     on the date of the enactment of the Federal Fuel Tax Relief 
     Act of 2000.''
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 3. FLOOR STOCK REFUNDS.

       (a) In General.--If--
       (1) before the tax reduction date, tax has been imposed 
     under section 4081 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 the date of the 
     enactment of this Act.
       (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. 4. FLOOR STOCKS TAX.

       (a) 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 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 of the Treasury 
     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) Floor stocks tax date.--The term ``floor stocks tax 
     date'' means the date which is 90 days after the date of the 
     enactment of this Act.
       (3) Applicable period.--The term ``applicable period'' 
     means a 90-day period beginning on the date of the enactment 
     of this Act.
       (d) Exception for Exempt Uses.--The tax imposed by 
     subsection (a) shall not apply to any liquid 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.
       (e) Exception for Fuel Held in Vehicle Tank.--No tax shall 
     be imposed by subsection (a) on any liquid held in the tank 
     of a motor vehicle.
       (f) Exception for Certain Amounts of Fuel.--
       (1) In general.--No tax shall be imposed by subsection 
     (a)--
       (A) on gasoline (as defined in section 4083 of such Code) 
     held on the floor stocks tax date by any person if the 
     aggregate amount

[[Page S5812]]

     of gasoline held by such person on such date does not exceed 
     4,000 gallons, and
       (B) on diesel fuel or kerosene (as so defined) held on such 
     date by any person if the aggregate amount of diesel fuel or 
     kerosene 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 4081 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 4081.

     SEC. 5. 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 180 days after the date of the 
     enactment of this Act, 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).
                                 ______