KEROSENE TAXED AS DIESEL FUEL.

SEC. 1032. KEROSENE TAXED AS DIESEL FUEL. (a) In General.—Subsection (a) of section 4083 (defining taxable fuel) 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 adding at the end the following new subparagraph: “(C) kerosene.”. (b) Rate of Tax.—Clause (iii) of section 4081(a)(2)(A) is amended by inserting “or kerosene” after “diesel fuel”. (c) Exemptions From Tax; Refunds to Vendors.— (1) In general.—Section 4082 (relating to exemptions for diesel fuel) is amended by striking “diesel fuel” each place it appears in subsections (a), (c), and (d) and inserting “diesel fuel and kerosene”. (2) Certain kerosene exempt from dyeing requirement.—Section 4082 is amended by redesignating subsections (d) and (e) as subsections (e) and (f), respectively, and by inserting after subsection (c) the following new subsection: “(d) Additional Exceptions to Dyeing Requirements for Kerosene.— “(1) Aviation-grade kerosene.—Subsection (a)(2) shall not apply to a removal, entry, or sale of aviation-grade kerosene (as determined under regulations prescribed by the Secretary) if the person receiving the kerosene is registered under section 4101 with respect to the tax imposed by section 4091. “(2) Use for non-fuel feedstock purposes.—Subsection (a)(2) shall not apply to kerosene— “(A) received by pipeline or vessel for use by the person receiving the kerosene in the manufacture or production 111 STAT. 934f any substance (other than gasoline, diesel fuel, or special fuels referred to in section 4041), or “(B) to the extent provided in regulations, removed or entered— “(i) for such a use by the person removing or entering the kerosene, or “(ii) for resale by such person for such a use by the purchaser, but only if the person receiving, removing, or entering the kerosene and such purchaser (if any) are registered under section 4101 with respect to the tax imposed by section 4081. “(3) Wholesale distributors.—To the extent provided in regulations, subsection (a)(2) shall not apply to a removal, entry, or sale of kerosene to a wholesale distributor of kerosene if such distributor— “(A) is registered under section 4101 with respect to the tax imposed by section 4081 on kerosene, and “(B) sells kerosene exclusively to ultimate vendors described in section 6427(1)(5)(B) with respect to kerosene.”. (3) Refunds.— (A) Subsection (1) of section 6427 is amended by inserting “or kerosene” after “diesel fuel” each place it appears in paragraphs (1), (2), and (5) (including the heading for paragraph (5)). (B) Paragraph (5) of section 6427(1) is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph: “(B) Sales of kerosene not for use in motor fuel.—Paragraph (1)(A) shall not apply to kerosene sold by a vendor— “(i) for any use if such sale is from a pump which (as determined under regulations prescribed by the Secretary) is not suitable for use in fueling any diesel-powered highway vehicle or train, or “(ii) to the extent provided by the Secretary, for blending with heating oil to be used during periods of extreme or unseasonable cold.”. (C) Subparagraph (C) of section 6427(1)(5), as redesignated by subparagraph (B) of this paragraph, is amended by striking “subparagraph (A)” and inserting “subparagraph (A) or (B)”. (D) The heading for subsection (1) of section 6427 is amended by inserting “, Kerosene,” after “Diesel Fuel”. (E) Clause (i) of section 6427(i)(5)(A) is amended by inserting “($100 or more in the case of kerosene)” after “$200 or more”. (d) Certain Approved Terminals of Registered Persons Required To Offer Dyed Diesel Fuel and Kerosene for Non-taxable Purposes.—Section 4101 is amended by adding at the end the following new subsection: “(e) Certain Approved Terminals of Registered Persons Required To Offer Dyed Diesel Fuel and Kerosene for Non-taxable Purposes.— “(1) In general.—A terminal for kerosene or diesel fuel may not be an approved facility for storage of non-tax-paid diesel fuel or kerosene under this section unless the operator 111 STAT. 935of such terminal offers dyed diesel fuel and kerosene for removal for nontaxable use in accordance with section 4082(a). “(2) Exception.—Paragraph (1) shall not apply to any terminal exclusively providing aviation-grade kerosene by pipeline to an airport.”. (e) Conforming Amendments.— (1) Paragraph (2) of section 4041(a), as amended by title IX, is amended by striking “kerosene,”. (2) Paragraph (1) of section 4041(c) is amended by striking “any liquid” and inserting “kerosene and any other liquid”. (3)(A) The heading for section 4082 is amended by inserting “and kerosene” after “diesel fuel”. (B) The table of sections for subpart A of part III of subchapter A of chapter 32 is amended by inserting “and kerosene” after “diesel fuel” in the item relating to section 4082. (4) Subsection (b) of section 4083 is amended by striking “gasoline, diesel fuel,” and inserting “taxable fuels”. (5) Subsection (a) of section 4093 is amended by striking “any liquid” and inserting “kerosene and any other liquid”. (6) The material following subparagraph (F) of section 6416(b)(2) is amended by inserting “or kerosene” after “diesel fuel”. (7) Paragraphs (1) and (3) of section 6427(f), and the heading for section 6427(f), are each amended by inserting “kerosene,” after “diesel fuel,”. (8) Paragraph (2) of section 6427(f) is amended by striking “or diesel fuel” each place it appears and inserting “, diesel fuel, or kerosene”. (9) Subparagraph (A) of section 6427(i)(3) is amended by striking “or diesel fuel” and inserting “, diesel fuel, or kerosene”. (10) The heading for paragraph (4) of section 6427(i) is amended to read as follows: “(4) Special rule for refunds under subsection (1).—”. (11) Paragraph (1) of section 6715(c) is amended by inserting “or kerosene” after “diesel fuel”. (12)(A) The text of section 7232 is amended by striking “gasoline, lubricating oil, diesel fuel” and inserting “any taxable fuel (as defined in section 4083)”. (B) The section heading for section 7232 is amended to read as follows: “SEC. 7232. FAILURE TO REGISTER UNDER SECTION 4101, FALSE REPRESENTATIONS OF REGISTRATION STATUS, ETC”. (C) The table of sections for part II of subchapter A of chapter 75 is amended by striking the item relating to section 7232 and inserting the following: “Sec. 7232. Failure to register under section 4101, false representations of registration status, etc.”. (13) Sections 9503(b)(1)(E) and 9508(b)(2) are each amended by striking “and diesel fuel” and inserting “, diesel fuel, and kerosene”. (14) Subparagraph (B) of section 9503(b)(5) is amended by striking “or diesel fuel” and inserting “, diesel fuel, or kerosene”. (f) Effective Date.—The amendments made by this section shall take effect on July 1, 1998.111 STAT. 936 (g) Floor Stock Taxes.— (1) Imposition of tax.—In the case of kerosene which is held on July 1, 1998, by any person, there is hereby imposed a floor stocks tax of 24.4 cents per gallon. (2) Liability for tax and method of payment.— (A) Liability for tax.—A person holding kerosene on July 1, 1998, to which the tax imposed by paragraph (1) applies shall be liable for such tax. (B) Method of payment.—The tax imposed by paragraph (1) shall be paid in such manner as the Secretary shall prescribe. (C) Time for payment.—The tax imposed by paragraph (1) shall be paid on or before August 31, 1998. (3) Definitions.—For purposes of this subsection— (A) Held by a person.—Kerosene 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). (B) Secretary.—The term “Secretary” means the Secretary of the Treasury or his delegate. (4) Exception for exempt uses.—The tax imposed by paragraph (1) shall not apply to kerosene held by any person exclusively for any use to the extent a credit or refund of the tax imposed by section 4081 of the Internal Revenue Code of 1986 is allowable for such use. (5) Exception for fuel held in vehicle tank.—No tax shall be imposed by paragraph (1) on kerosene held in the tank of a motor vehicle or motorboat. (6) Exception for certain amounts of fuel.— (A) In general.—No tax shall be imposed by paragraph (1) on kerosene held on July 1, 1998, by any person if the aggregate amount of 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. (B) 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). (C) Controlled groups.—For purposes of this paragraph— (i) 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. (ii) 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 111 STAT. 937control where 1 or more of such persons is not a corporation. (7) Coordination with section 4081.—No tax shall be imposed by paragraph (1) on kerosene to the extent that tax has been (or will be) imposed on such kerosene under section 4081 or 4091 of such Code. (8) Other laws 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 paragraph (1) to the same extent as if such taxes were imposed by such section 4081.