Section 1 Short title
This Act may be cited as the “Repeal and Rebuild Act of 2014”.
Repeal and Rebuild Act of 2014
A BILL
To amend the Internal Revenue Code of 1986 to repeal the gas tax and rebuild our roads and bridges.
Sec. 2 Repeal of excise tax on gasoline
In general— Section 4081(a)(2)(A)(i) of the Internal Revenue Code of 1986 is amended by striking “18.3 cents per gallon” and inserting “0 cents per gallon”.
Conforming amendments—
Section 4081(d)(1) of the Internal Revenue Code of 1986 is amended by striking “clauses (i) and” and inserting “clause”.
Section 4041(a)(2)(B)(i) of the Internal Revenue Code of 1986 is amended by striking “the rate of tax specified in section 4081(a)(2)(A)(i) which is in effect at the time of such sale or use,” and inserting “18.3 cents per gallon”.
Effective date— The amendments made by this section shall apply to fuel sold or used after December 31, 2014.
Sec. 3 Repeal of excise tax on tires
In general— Subchapter A of chapter 32 of subtitle D of the Internal Revenue Code of 1986 is amended by striking part II (relating to tires).
Conforming amendments—
The table of parts for subchapter A of chapter 32 of subtitle D of the Internal Revenue Code of 1986 is amended by striking the item relating to part II.
Section 9503(b)(1) of the Internal Revenue Code of 1986 is amended by striking subparagraph (C) and redesignating subparagraphs (D) and (E) as subparagraphs (C) and (D), respectively.
Section 6412(a)(1) of the Internal Revenue Code of 1986 is amended—
in the text by striking “4071 or”, and
in the heading by striking “Tires and taxable” and inserting “Taxable”.
Section 6416 of the Internal Revenue Code of 1986 is amended by striking subparagraph (C) of subsection (b)(1).
Section 4218 of the Internal Revenue Code of 1986 is amended—
in subsection (a) by striking “(other than a tire taxable under section 4071)”, and
by striking subsection (b) and redesignating subsection (c) as subsection (b).
Section 4221 of the Internal Revenue Code of 1986 is amended—
in subsection (a) by striking “or 4071,”, and
in subsection (e) by striking paragraph (2).
Section 4051 of the Internal Revenue Code of 1986 is amended by striking subsection (e).
Effective date—
Except as provided by paragraph (2), the amendments made by this section shall apply to sales after December 31, 2014.
The amendments made by paragraphs (3), (4), (5), and (6) of subsection (b) shall apply to taxes imposed after December 31, 2014.
Special rule for floor stocks refunds relating to tires and taxable fuels— In the case of an article subject to the tax imposed by section 4071 or 4081 before January 1, 2015, which has been sold, held, and not used and is intended for sale in the manner specified by section 6412(a)(1) of the Internal Revenue Code of 1986, such section shall be applied by substituting—
“January 1, 2015” for “October 1, 2016”,
“July 1, 2015” for “January 1, 2017”, and
“October 1, 2015” for “March 31, 2017”.
Sec. 4 Double indexation of diesel fuels tax
In general— Paragraph (2) of section 4081(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
“(E) Index for highway construction cost inflation and fuel efficiency
“(i) In general—In the case of any calendar year after 2014, the 24.3 cents rate in subparagraph (A)(iii) and the 19.7 cents rate in subparagraph (D), shall each be increased by an amount equal to—
“(I) such dollar amount, multiplied by
“(II) the double indexation for the calendar year.
“(ii) Exception for fuel used in aviation—The adjustment under clause (i) shall not apply with respect to the rate of tax under subparagraph (A)(iii) by reason of subparagraph (C).
“(iii) Double indexation—For purposes of clause (i), the double indexation for any calendar year is the sum of—
“(I) the highway construction cost adjustment, and
“(II) the CAFE fuel saved adjustment.
“(iv) Highway construction cost adjustment—For purposes of clause (iii), the highway construction cost adjustment for any calendar year is the percentage (if any) by which—
“(I) the National Highway Construction Cost Index for the preceding calendar year, exceeds
“(II) the National Highway Construction Cost Index for calendar year 2013.
“(v) National Highway Construction Cost Index for any calendar year—For purposes of clause (iv), the National Highway Construction Cost Index for any calendar year is the average of the National Highway Construction Cost Index as of the close of the 12-month period ending on August 31 of such calendar year.
“(vi) National Highway Construction Cost Index—For purposes of clause (iv), the term National Highway Construction Cost Index means the last National Highway Construction Cost Index published by the Department of Transportation.
“(vii) CAFE fuel saved adjustment—For purposes of clause (iii), the CAFE fuel saved adjustment for a calendar year is the percentage (if any) by which annual motor fuel use is reduced by the estimated CAFE fuel saved for that calendar year from the annual motor fuel use for the prior calendar year.
“(viii) Estimated CAFE fuel saved—The term estimated CAFE fuel saved for a calendar year means the combined fuel saved estimates issued by the National Highway Traffic Safety Administration and the Environmental Protection Agency for passenger automobiles and light trucks and published in the Federal Register on May 7, 2010, and October 15, 2012, as part of final rules to implement corporate average fuel economy standards, and such successor estimates included in successor rules.
“(ix) Annual motor fuel use—The term annual motor fuel use means the total number of gallons of gasoline used in a calendar year in highway use, as published by the Federal Highway Administration as part of its annual motor fuel use survey.
“(x) Notice—Not later than December 15, 2014, and annually thereafter, the Secretary shall publish the rates of tax as adjusted under this subparagraph for the succeeding calendar year.”
Retail fuel excise tax— Subsection (a) of section 4041 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(4) Highway inflation adjustment
“(A) In general—In the case of any calendar year after 2014, each dollar amount in paragraphs (1)(C)(iii)(I), (2)(B)(ii), and (3)(A) of this subsection and in subsections (b)(2)(A)(i), (b)(2)(C)(i), and (m)(1) shall be increased by an amount equal to—
“(i) such dollar amount, multiplied by
“(ii) the double indexation determined under section 4081(a)(2)(E) for the calendar year.
“(B) Rounding—Any increase determined under subparagraph (A) shall be rounded to the nearest tenth of a cent.”
Conforming amendment— Subparagraph (A) of section 4081(a)(2) of the Internal Revenue Code of 1986 is amended by striking “The rate” and inserting “Except as provided in subparagraph (C), the rate”.
Effective date— The amendments made by this section shall apply to periods beginning after December 31, 2014.
Sec. 5 Increase in tax on petroleum; transfer to Highway Trust Fund
In general— Paragraph (1) of section 4611(c) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting “, and”, and by inserting after subparagraph (B) the following new subparagraph:
“(C) the Highway Trust Fund financing rate.”
Rates—
In general— Paragraph (2) of section 4611(c) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting “, and”, and by inserting after subparagraph (B) the following new subparagraph:
“(C) the Highway Trust Fund financing rate is $6.75 a barrel.”
Adjustment for inflation— Section 4611(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(3) Highway Trust Fund financing rate inflation adjustment
“(A) In general—In the case of any calendar year after 2014, the dollar amount in paragraph (2)(C) shall be increased by an amount equal to—
“(i) such dollar amount, multiplied by
“(ii) the double indexation determined under section 4081(a)(2)(E) for the calendar year.
“(B) Rounding—Any increase determined under subparagraph (A) shall be rounded to the nearest tenth of a cent.”
Credit for manufacturers tax— Section 4611 of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(g) Credit for manufacturers tax
“(1) In general—Under regulations prescribed by the Secretary, there shall be allowed to the person liable for the tax under subsection (d) a credit against so much of the tax imposed by subsection (a) as relates to the Highway Trust Fund financing rate for each gallon of fuel—
“(A) produced, removed (within the meaning of section 4083(c)), or sold (as the case may be) with respect to the barrel of crude oil or petroleum on which tax is imposed under subsection (a), and
“(B) on which tax is imposed under section 4081(a).
“(2) Not applicable to gasoline—Paragraph (1) shall not apply to gasoline (as defined in section 4083(a)(2)).
“(3) Amount of credit—The amount of the credit allowable under paragraph (1) with respect to a gallon of a type of fuel produced from a barrel shall be the product of—
“(A) the Highway Trust Fund financing rate (as defined in section 4611(c)(2)) multiplied by 1/42,
“(B) the sum of—
“(i) 1, plus
“(ii) the absolute value of the processing gain from the refinery yield (expressed as a decimal number) for the second calendar year preceding the year in which payment under paragraph (1) is made, as determined by the Energy Information Administration of the Department of Energy, and
“(C) the refinery yield for a product (expressed as a decimal number) for the second calendar year preceding the year in which payment under paragraph (1) is made, as determined by the Energy Information Administration of the Department of Energy.”
Leaking underground storage tank trust fund tax— Section 4611 of the Internal Revenue Code of 1986, as amended by paragraph (3), is amended by adding at the end the following:
“(h) Leaking underground storage tank trust fund tax—The rate of tax specified in subsection (c)(1)(C) shall be increased by 0.1 cent per gallon equivalent. For purposes of the preceding sentence, the per gallon equivalent shall be determined in accordance with section 4611(g)(3) by inserting 0.1 cent per gallon for the Highway Trust Fund financing rate in subparagraph (A) thereof. The increase in tax under this subsection shall in this title be added to and treated as part of the Leaking Underground Storage Tank Trust Fund financing rate under section 4081(a)(2)(B).”
Credit for alcohol fuel, biodiesel, and alternative fuel mixtures— Section 6426(a) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting “, and”, and by inserting after paragraph (2) the following:
“(3) against so much of the tax imposed by section 4611 as is attributable to subsection (c)(1)(C) an amount equal to the sum of the credits described in subsections (b), (c), and (e), determined on the same fraction of the amount of such tax as the gallon of taxable fuel is of the whole barrel.”
Conforming amendment— Section 34(a) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of paragraph (2), by striking the period at the end of paragraph (3), and by inserting after paragraph (3) the following new paragraph:
“(4) under section 4611(g)(3).”
Effective date— The amendments made by this section shall take effect on January 1, 2015.
Sec. 6 Transportation bonds
Issuance— The Secretary of the Treasury shall, pursuant to subchapter I of chapter 31 of title 31, United States Code, issue bonds which meet the terms and conditions of subsection (b), and the bond revenue (other than capitalized interest described in subsection (b)(2)) shall be transferred to the Highway Trust Fund and allocated between the Highway Account and the Mass Transit Account using the same ratio as provided under section 9503(e)(2) of the Internal Revenue Code of 1986.
Terms and conditions— The terms and conditions of bonds referred to in this subsection are the following:
Term— Bonds issued under subsection (a) shall have a term of 10 years.
Interest— Interest shall be paid from the Temporary Transportation Bond Repayment Account.
Capitalized interest— The Secretary of the Treasury may include capitalized interest in the principal amount of bonds issued under subsection (a) to pay the interest that the issuer estimates will become due and payable on the bonds prior to the receipt of sufficient transfers under section 9503(g)(2) of the Internal Revenue Code of 1986 to the Temporary Transportation Bond Repayment Account. Capitalized interest shall be deposited into the Transportation Bond Repayment Account and applied to interest on such bonds.
Amount outstanding— The total face amount of bonds issued under this section may not exceed the amount the Secretary of the Treasury determines can be redeemed, taking into account this section and section 9503(g) of the Internal Revenue Code of 1986.
Transfers of transportation bond proceeds— Section 9503(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(7) Transfers of transportation bond proceeds—There are hereby appropriated to the Highway Trust Fund amounts equivalent to the proceeds received in the Treasury before October 1, 2016, under section 6(a) of the Repeal and Rebuild Act of 2014.”
Temporary Transportation Bond Repayment account— Section 9503 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(g) Establishment of Temporary Transportation Bond Repayment account
“(1) Creation of account—There is established in the Highway Trust Fund a separate account to be known as the “Temporary Transportation Bond Repayment Account” consisting of such amounts as may be transferred or credited to the Temporary Transportation Bond Repayment Account as provided in this section.
“(2) Transfers to Temporary Transportation Bond Repayment Account—The Secretary of the Treasury shall transfer to the Temporary Transportation Bond Repayment Account the excess of—
“(A) the portion of the amounts appropriated to the Highway Trust Fund under subsection (b) which are attributable to the increase in taxes under—
“(i) section 4041 by reason of section 4041(a)(4),
“(ii) section 4081 by reason of section 4081(a)(2)(E), and
“(iii) section 4461 by reason of section 4611(c)(2)(C) and after the application of section 4461(g), over
“(B) the amount estimated by the Secretary which would have been collected under section 4081(a)(2)(A)(i) and part II of subchapter A of chapter 32 if such provisions had not been repealed.
“(3) Expenditures from Account—Amounts in the Temporary Transportation Bond Repayment Account shall be available for redeeming bonds issued under section 6 of the Repeal and Rebuild Act of 2014.
“(4) Termination—The Temporary Transportation Bond Repayment Account shall close after all bonds issued under section 6 of the Repeal and Rebuild Act of 2014 have been redeemed and all amounts in the account and all future revenue that would have transferred to the account shall be transferred to the Highway Trust Fund and allocated between the Highway Account and the Mass Transit Account in the same ratio as provided under subsection (e)(2).”
Conforming amendment— Section 9503(e)(5)(B) of the Internal Revenue Code of 1986 is amended by inserting “or the Temporary Transportation Bond Repayment Account” before the period at the end.
Effective date— The amendments made by this section shall apply to periods after December 31, 2014.