EXCISE TAX ON SALE OF CHEMICALS WHICH DEPLETE THE OZONE LAYER AND OF PRODUCTS CONTAINING SUCH CHEMICALS.

SEC. 7506. EXCISE TAX ON SALE OF CHEMICALS WHICH DEPLETE THE OZONE LAYER AND OF PRODUCTS CONTAINING SUCH CHEMICALS. (a) In General.—Chapter 38 (relating to environmental taxes) is amended by adding at the end thereof the following new subchapter: “Subchapter D—Ozone-Depleting Chemicals, Etc. “Sec. 4681. Imposition of tax. “Sec. 4682. Definitions and special rules. “SEC. 4681. IMPOSITION OF TAX. “(a) General Rule.—There is hereby imposed a tax on— “(1) any ozone-depleting chemical sold or used by the manufacturer, producer, or importer thereof, and “(2) any imported taxable product sold or used by the importer thereof. “(b) Amount of Tax.— “(1) Ozone-depleting chemicals.— “(A) In general.—The amount of the tax imposed by subsection (a) on each pound of ozone-depleting chemical shall be an amount equal to— “(i) the base tax amount, multiplied by “(ii) the ozone-depletion factor for such chemical. “(B) Base tax amount for years before 1995.—The base tax amount for purposes of subparagraph (A) with respect to any sale or use during a calendar year before 1995 is the amount determined under the following table for such calendar year: “Calendar year: Base tax amount 1990 or 1991 $1.37 1992 1.67 1993 or 1994 2.65. “(C) Base tax amount for years after 1994.—The base tax amount for purposes of subparagraph (A) with respect to any sale or use during a calendar year after 1994 shall be the base tax amount for 1994 increased by 45 cents for each year after 1994. “(2) Imported taxable product.— 103 STAT. 2365 “(A) In general.—The amount of the tax imposed by subsection (a) on any imported taxable product shall be the amount of tax which would have been imposed by subsection (a) on the ozone-depleting chemicals used as materials in the manufacture or production of such product if such ozone-depleting chemicals had been sold in the United States on the date of the sale of such imported taxable product. “(B) Certain rules to apply.—Rules similar to the rules of paragraphs (2) and (3) of section 4671(b) shall apply. “SEC. 4682. DEFINITIONS AND SPECIAL RULES. “(a) Ozone-Depleting Chemical.—For purposes of this subchapter— “(1) In general.—The term ‘ozone-depleting chemical’ means any substance— “(A) which, at the time of the sale or use by the manufacturer, producer, or importer, is listed as an ozone-depleting chemical in the table contained in paragraph (2), and “(B) which is manufactured or produced in the United States or entered into the United States for consumption, use, or warehousing. “(2) Ozone-depleting chemicals.— “Common name: Chemical nomenclature: CFC–11 trichlorofluoromethane CFC–12 dichlorodifluoromethane CFC–113 trichlorotrifluoroethane CFC–114 1,2-dichloro-1,1,2,2-tetrafluoroethane CFC–115 chloropentafluoroethane Halon-1211 bromochlorodifluoromethane Halon-1301 bromotrifluoromethane Halon-2402 dibromotetrafluoroethane. “(b) Ozone-Depletion Factor.—For purposes of this subchapter, the term ‘ozone-depletion factor’ means, with respect to an ozone-depleting chemical, the factor assigned to such chemical under the following table: “Ozone-depleting chemical: Ozone-depletion factor: CFC–11 1.0 CFC–12 1.0 CFC–113 0.8 CFC–114 1.0 CFC–115 0.6 Halon-1211 3.0 Halon-1301 10.0 Halon-2402 6.0. “(c) Imported Taxable Product.—For purposes of this subchapter— “(1) In general.—The term ‘imported taxable product’ means any product (other than an ozone-depleting chemical) entered into the United States for consumption, use, or warehousing if any ozone-depleting chemical was used as material in the manufacture or production of such product. “(2) De minimis exception.—The term ‘imported taxable product’ shall not include any product specified in regulations prescribed by the Secretary as using a de minimis amount of ozone-depleting chemicals as materials in the manufacture or production thereof. The preceding sentence shall not apply to any product in which any ozone-depleting chemical is used for purposes of refrigeration or air conditioning, creating an aerosol or foam, or manufacturing electronic components. 103 STAT. 2366 “(d) Exceptions.— “(1) Recycling.—No tax shall be imposed by section 4681 on any ozone-depleting chemical which is diverted or recovered in the United States as part of a recycling process (and not as part of the original manufacturing or production process). “(2) Use in further manufacture.— “(A) In general.—No tax shall be imposed by section 4681— “(i) on the use of any ozone-depleting chemical in the manufacture or production of any other chemical if the ozone-depleting chemical is entirely consumed in such use, “(ii) on the sale by the manufacturer, producer, or importer of any ozone-depleting chemical— “(I) for a use by the purchaser which meets the requirements of clause (i), or “(II) for resale by the purchaser to a second purchaser for a use by the second purchaser which meets the requirements of clause (i). Clause (ii) shall apply only if the manufacturer, producer, and importer, and the 1st and 2d purchasers (if any), meet such registration requirements as may be prescribed by the Secretary. “(B) Credit or refund.—Under regulations prescribed by the Secretary, if— “(i) a tax under this subchapter was paid with respect to any ozone-depleting chemical, and “(ii) such chemical was used (and entirely consumed) by any person in the manufacture or production of any other chemical, then an amount equal to the tax so paid shall be allowed as a credit or refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by section 4681. “(3) Exports.— “(A) In general.—Except as provided in subparagraph (B), rules similar to the rules of section 4662(e) (other than section 4662(e)(2)(A)(ii)(II) shall apply for purposes of this subchapter. “(B) Limit on benefit.— “(i) In general.—The aggregate tax benefit allowable under subparagraph (A) with respect to ozone-depleting chemicals manufactured or produced by any person during a calendar year shall not exceed the sum of— “(I) the amount equal to the 1986 export percentage of the aggregate tax imposed by this subchapter with respect to ozone-depleting chemicals manufactured or produced by such person during such calendar year (other than chemicals with respect to which subclause (II) applies), and “(II) the aggregate tax imposed by this subchapter with respect to any additional production allowance granted to such person with respect to ozone-depleting chemicals manufactured or produced by such person during such calendar year by 103 STAT. 2367the Environmental Protection Agency under 40 CFR Part 82 (as in effect on September 14, 1989). “(ii) 1986 export percentage.—A person’s 1986 export percentage is the percentage equal to the ozone-depletion factor adjusted pounds of ozone-depleting chemicals manufactured or produced by such person during 1986 which were exported during 1986, divided by the ozone-depletion factor adjusted pounds of all ozone-depleting chemicals manufactured or produced by such person during 1986. The percentage determined under the preceding sentence shall be based on data published by the Environmental Protection Agency. “(e) Other Definitions.—For purposes of this subchapter— “(1) Importer.—The term ‘importer’ means the person entering the article for consumption, use, or warehousing. “(2) United states.—The term ‘United States’ has the meaning given such term by section 4612(a)(4). “(f) Special Rules.— “(1) Fractional parts of a pound.—In the case of a fraction of a pound, the tax imposed by this subchapter shall be the same fraction of the amount of such tax imposed on a whole pound. “(2) Disposition of revenues from Puerto rico and the virgin islands.—The provisions of subsections (a)(3) and (b)(3) of section 7652 shall not apply to any tax imposed by this subchapter. “(g) Phase-In of Tax on Certain Substances.— “(1) Treatment for 1990.— “(A) Halons.—The term ‘ozone-depleting chemical’ shall not include halon-1211, halon-1301, or halon-2402 with respect to any sale or use during 1990. “(B) Chemicals used in rigid foam insulation.—No tax shall be imposed by section 4681— “(i) on the use during 1990 of any substance in the manufacture of rigid foam insulation, “(ii) on the sale during 1990 by the manufacturer, producer, or importer of any substance— “(I) for use by the purchaser in the manufacture of rigid foam insulation, or “(II) for resale by the purchaser to a second purchaser for such use by the second purchaser, or ” “(iii) on the sale or use during 1990 by the importer of any rigid foam insulation. Clause (ii) shall apply only if the manufacturer, producer, and importer, and the 1st and 2d purchasers (if any) meet such registration requirements as may be prescribed by the Secretary. “(2) Treatment for 1991, 1992, and 1993.— “(A) Halons.—The tax imposed by section 4681 during 1991, 1992, or 1993 by reason of the treatment of halon-1211, halon-1301, and halon-2402 as ozone-depleting chemicals shall be the applicable percentage (determined under the following table) of the amount of such tax which would (but for this subparagraph) be imposed. 103 STAT. 2368 The applicable percentage is: For sales or use during 1991 For sales or use during 1992 For sales or use during 1993 “In the case of: Halon-1211 6.0 5.0 3.3 Halon-1301 1.8 1.5 1.0 Halon-2402 3.0 2.5 1.6. “(B) Chemicals used in rigid foam insulation.—In the case of a sale or use during 1991, 1992, or 1993 on which no tax would have been imposed by reason of paragraph (1)(B) had such sale or use occurred during 1990, the tax imposed by section 4681 shall be the applicable percentage (determined in accordance with the following table) of the amount of such tax which would (but for this subparagraph) be imposed. “In the case of sales or The applicable percentage is: use during: 1991 18 1992 15 1993 10. “(3) Overpayments with respect to chemicals used in rigid foam insulation.—If any substance on which tax was paid under this subchapter is used during 1990, 1991, 1992, or 1993 by any person in the manufacture of rigid foam insulation, credit or refund (without interest) shall be allowed to such person an amount equal to the excess of— “(A) the tax paid under this subchapter on such substance, over “(B) the tax (if any) which would be imposed by section 4681 if such substance were used for such use by the manufacturer, producer, or importer thereof on the date of its use by such person. “Amounts payable under the preceding sentence with respect to uses during the taxable year shall be treated as described in section 34(a) for such year unless claim therefor has been timely filed under this paragraph. ‘(h) Imposition of Floor Stocks Taxes.— “(1) January 1, 1990, tax.—On any ozone-depleting chemical which on January 1, 1990, is held by any person (other than the manufacturer, producer, or importer thereof) for sale or for use in further manufacture, there is hereby imposed a floor stocks tax in an amount equal to the tax which would be imposed by section 4681 on such chemical if the sale of such chemical by the manufacturer, producer, or importer thereof had occurred during 1990. “(2) Other tax-increase dates.— “(A) In general.—If, on any tax-increase date, any ozone-depleting chemical is held by any person (other than the manufacturer, producer, or importer thereof) for sale or for use in further manufacture, there is hereby imposed a floor stocks tax. “(B) Amount of tax.—The amount of the tax imposed by subparagraph (A) shall be the excess (if any) of— “(i) the tax which would be imposed under section 4681 on such substance if the sale of such chemical by 103 STAT. 2369the manufacturer, producer, or importer thereof had occurred on the tax-increase date, over “(ii) the prior tax (if any) imposed by this subchapter on such substance. “(C) Tax-increase date.—For purposes of this paragraph, the term ‘tax-increase date’ means January 1 of 1991, 1992, 1993, and 1994. (3) Due date.—The taxes imposed by this subsection on January 1 of any calendar year shall be paid on or before April 1 of such year. (4) Application of other laws.—All other provisions of law, including penalties, applicable with respect to the taxes imposed by section 4681 shall apply to the floor stocks taxes imposed by this subsection.” (b) Clerical Amendment.—The table of subchapters for chapter 38 is amended by adding at the end thereof the following new item: “Subchapter D. Ozone-depleting chemicals, etc.” (c) Effective Date.— (1) In general.—The amendments made by this section shall take effect on January 1, 1990. (2) No deposits required before april 1, 1990.—No deposit of any tax imposed by subchapter D of chapter 38 of the Internal Revenue Code of 1986, as added by this section, shall be required to be made before April 1, 1990. (3) Notification of changes in international agreements.—The Secretary of the Treasury or his delegate shall notify the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate of changes in the Montreal Protocol and of other international agreements to which the United States is a signatory relating to ozone-depleting chemicals.