[Congressional Record Volume 149, Number 62 (Tuesday, April 29, 2003)]
[Senate]
[Pages S5486-S5487]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BREAUX (for himself, Mr. Ensign, Mr. Crapo, and Mr. 
        Bunning):
  S. 932. A bill to amend the Internal Revenue Code of 1986 to allow a 
credit against income tax for taxpayers owning certain commercial power 
takeoff vehicles; to the Committee on Finance.
  Mr. BREAUX. Mr. President, today I rise to introduce the Fuel Tax 
Equalization Credit for Substantial Power Takeoff Vehicles Act. This 
bill upholds a long-held principle in the application of the Federal 
fuels excise tax, and restores this principle for certain single engine 
``dual-use'' vehicles.
  This long-held principle is simple: fuel consumed for the purpose of 
moving vehicles over the road is taxed, while fuel consumed for ``off-
road'' purposes is not taxed. The tax is designed to compensate for the 
wear and tear impacts on roads. Fuel used for a non-propulsion ``off-
road'' purpose has no impact on the roads. It should not be taxed as if 
it does. This bill is based on this principle, and it remedies a 
problem created by IRS regulations that control the application of the 
federal fuels excise tax to ``dual-use'' vehicles.
  Duel-use vehicles are vehicles that use fuel both to propel the 
vehicle on the road, and also to operate separate, on-board equipment. 
The two prominent examples of duel-use vehicles are concrete mixers, 
which use fuel to rotate the mixing drum, and sanitation trucks, which 
use fuel to operate the compactor. Both of these trucks move over the 
road, but at the same time, a substantial portion of their fuel use is 
attributable to the non-propulsion function.
  The current problem developed because progress in technology has 
outstripped the regulatory process. In the past, duel-use vehicles 
commonly had two engines, IRS regulations, written in the 1950's, 
specifically exempt the portion of fuel used by the separate engine 
that operates special equipment such as a mixing drum or a trash 
compactor. These IRS regulations reflect the principle that fuel 
consumed for non-propulsion purposes is not taxed.
  Today, however, typical duel-use vehicles use only one engine. The 
single engine both propels the vehicle over the road and powers the 
non-propulsion function through ``power takeoff.'' a major reason for 
the growth of these single-engine, power takeoff vehicles is that they 
use less fuel. And a major benefit for everyone is that they are better 
for the environment.
  Power takeoff was not in widespread use when the IRS regulations were 
drafted, and the regulations deny an exemption for fuel used in single-
engine, duel-use vehicles. The IRS defends its distinction between one-
engine and two-engine, vehicles based on possible administrative 
problems if vehicle owners were permitted to allocate fuel between the 
propulsion and non-propulsion functions.
  Our bill is designed to address the administrative concerns expressed 
by the

[[Page S5487]]

IRS, but at the same time, restore tax fairness for fuel-use vehicles 
with one engine. The bill does this by establishing an annual tax 
credit available for taxpayers that own a licensed and insured concrete 
mixer or sanitation truck with a compactor. The amount of the credit is 
$250 and is a conservative estimate of the excise taxes actually paid, 
based on information compiled on typical sanitation trucks and concrete 
mixers.
  In sum, as a fixed income tax credit, no audit or administrative 
issue will arise about the amount of fuel used for the off-road 
purpose. At the same time, the credit provides a rough justice method 
to make sure these taxpayers are not required to pay tax on fuels that 
they shouldn't be paying. Also, as an income tax credit, the proposal 
would have no effect on the highway trust fund.
  I would like to stress that I believe the IRS' interpretation of the 
law is not consistent with long-held principles under the tax law, 
despite their administrative concerns. Quite simply, the law should not 
condone a situation where taxpayers are required to pay the excise tax 
on fuel attributable to non-propulsion functions. This bill corrects an 
unfair tax that should have never been imposed in the first place, I 
urge my colleagues to cosponsor this important piece of legislation.
  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:

       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 ``Fuel Tax Equalization Credit 
     for Substantial Power Takeoff Vehicles Act''.

     SEC. 2. CREDIT FOR TAXPAYERS OWNING COMMERCIAL POWER TAKEOFF 
                   VEHICLES.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business-related credits) is amended by adding at the end the 
     following new section:

     ``SEC. 45G. COMMERCIAL POWER TAKEOFF VEHICLES CREDIT.

       ``(a) General Rule.--For purposes of section 38, the amount 
     of the commercial power takeoff vehicles credit determined 
     under this section for the taxable year is $250 for each 
     qualified commercial power takeoff vehicle owned by the 
     taxpayer as of the close of the calendar year with or within 
     which the taxable year ends.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Qualified commercial power takeoff vehicle.--The term 
     `qualified commercial power takeoff vehicle' means any 
     highway vehicle described in paragraph (2) which--
       ``(A) is propelled by any fuel subject to tax under section 
     4041 or 4081, and
       ``(B) is used in a trade or business or for the production 
     of income (and is licensed and insured for such use).
       ``(2) Highway vehicle described.--A highway vehicle is 
     described in this paragraph if such vehicle is--
       ``(A) designed to engage in the daily collection of refuse 
     or recyclables from homes or businesses and is equipped with 
     a mechanism under which the vehicle's propulsion engine 
     provides the power to operate a load compactor, or
       ``(B) designed to deliver ready mixed concrete on a daily 
     basis and is equipped with a mechanism under which the 
     vehicle's propulsion engine provides the power to operate a 
     mixer drum to agitate and mix the product en route to the 
     delivery site.
       ``(c) Exception for Vehicles Used by Governments, Etc.--No 
     credit shall be allowed under this section for any vehicle 
     owned by any person at the close of a calendar year if such 
     vehicle is used at any time during such year by--
       ``(1) the United States or an agency or instrumentality 
     thereof, a State, a political subdivision of a State, or an 
     agency or instrumentality of one or more States or political 
     subdivisions, or
       ``(2) an organization exempt from tax under section 501(a).
       ``(d) Denial of Double Benefit.--The amount of any 
     deduction under this subtitle for any tax imposed by 
     subchapter B of chapter 31 or part III of subchapter A of 
     chapter 32 for any taxable year shall be reduced (but not 
     below zero) by the amount of the credit determined under this 
     subsection for such taxable year.''.
       (b) Credit Made Part of General Business Credit.--
     Subsection (b) of section 38 of the Internal Revenue Code of 
     1986 (relating to general business credit) is amended by 
     striking ``plus'' at the end of paragraph (14), by striking 
     the period at the end of paragraph (15) and inserting ``, 
     plus'', and by adding at the end the following new paragraph:
       ``(16) the commercial power takeoff vehicles credit under 
     section 45G(a).''.
       (c) No Carryback Before January 1, 2003.--Subsection (d) of 
     section 39 of the Internal Revenue Code of 1986 (relating to 
     carryback and carryforward of unused credits) is amended by 
     adding at the end the following new paragraph:
       ``(11) No carryback of section 45g credit before january 1, 
     2003.--No portion of the unused business credit for any 
     taxable year which is attributable to the credit determined 
     under section 45G may be carried back to a taxable year 
     beginning before January 1, 2003.''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new item:

``Sec. 45G. Commercial power takeoff vehicles credit.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after December 31, 2002.
                                 ______