II
110th CONGRESS
2d Session
S. 2971
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.
Highway fuel tax suspension
Temporary suspension of highway fuel taxes on gasoline and diesel fuel
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:
Temporary suspension of taxes on gasoline and diesel fuel
In general
During the applicable period, each rate of tax referred to in paragraph (2) shall be reduced to zero cents per gallon.
Rates of tax
The rates of tax referred to in this paragraph are—
the rate of tax otherwise applicable to gasoline under clause (i) of subsection (a)(2)(A), determined with regard to subsection (a)(2)(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
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.
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.
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.
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Effective date
The amendment made by this subsection shall take effect on the date of the enactment of this Act.
Floor stock refunds
In general
If—
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
on such date such liquid is held by a dealer and has not been used and is intended for sale,
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.
Time for filing claims; certifications necessary to file claims
In general
No credit or refund shall be allowed or made under this subsection—
unless claim therefore is filed with the Secretary before the date which is 6 months after the tax suspension date, and
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—
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
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.
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.
Definitions
For purposes of this subsection—
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
the term tax suspension date means May 26, 2008.
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.
Floor stocks tax
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.
Liability for tax and method of payment
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.
Method of payment
The tax imposed by paragraph (1) shall be paid in such manner as the Secretary shall prescribe.
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.
Definitions
For purposes of this subsection—
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).
Gasoline and diesel fuel
The terms gasoline and diesel fuel have the respective meanings given such terms by section 4083 of such Code.
Floor stocks tax date
The term floor stocks tax date means September 2, 2008.
Applicable period
The term applicable period means the period described in section 4081(f)(3) of such Code.
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.
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.
Exception for certain amounts of fuel
In general
No tax shall be imposed by paragraph (1)—
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
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.
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).
Controlled groups
For purposes of this paragraph—
Corporations
In general
All persons treated as a controlled group shall be treated as 1 person.
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.
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.
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.
Secretary
For purposes of this section, the term Secretary means the Secretary of the Treasury or the Secretary’s delegate.
Passthrough to consumers
Sense of congress
It is the senses of Congress that—
consumers immediately receive the benefit of the reduction in taxes resulting from the amendment made by subsection (a), and
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).
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.
Temporary oil profit fee
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:
Temporary fee on excess oil profit
Sec. 5896. Imposition of fee.
Sec. 5897. Excess profit; etc.
Sec. 5898. Special rules and definitions.
Imposition of fee
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.
Applicable taxpayer
For purposes of this chapter, the term applicable taxpayer means, with respect to operations in the United States—
any integrated oil company (as defined in section 291(b)(4)), and
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.
Excess profit; etc
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.
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.
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.
Special rules and definitions
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.
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.
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.
Crude oil
The term crude oil includes crude oil condensates and natural gasoline.
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.
Regulations
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this chapter.
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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
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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:
The fee imposed by section 5896.
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Effective date
The amendments made by this section shall apply to taxable years beginning in 2008.
Suspension of petroleum acquisition for Strategic Petroleum Reserve
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.
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.
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.