S. 1994 — Introduced in Senate

II 114th CONGRESS 1st Session S. 1994 IN THE SENATE OF THE UNITED STATES August 5, 2015Mr. Carper 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 increase certain fuel taxes and to strengthen the earned income tax credit and make permanent certain tax provisions under the American Recovery and Reinvestment Act of 2009. 1. Short title; table of contents (a) Short title This Act may be cited as the Tax Relief And #FixTheTrustFund For Infrastructure Certainty Act of 2015 or the TRAFFIC Relief Act. (b) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. TITLE I—Fuel Taxes Sec. 101. Increase in tax on gasoline. Sec. 102. Increase in tax on diesel fuel and kerosene. Sec. 103. Allocation in accounts in highway trust fund. Sec. 104. Floor stocks taxes. TITLE II—Tax Relief for Working Families Sec. 201. Permanent extension of and modifications to the child tax credit. Sec. 202. Permanent extension of modifications to earned income tax credit. Sec. 203. Strengthening the earned income tax credit. Sec. 204. Simplifying the earned income tax credit. I Fuel Taxes 101. Increase in tax on gasoline (a) Phased-In Increase (1) In general Clause (i) of section 4081(a)(2)(A) of the Internal Revenue Code of 1986 is amended by striking aviation gasoline, and all that follows and inserting “aviation gasoline— (I) 22.3 cents per gallon in the case of gasoline removed, entered, or sold in calendar year 2016, (II) 26.3 cents per gallon in the case of gasoline removed, entered, or sold in calendar year 2017, (III) 30.3 cents per gallon in the case of gasoline removed, entered, or sold in calendar year 2018, and (IV) 34.3 cents per gallon in the case of gasoline removed, entered, or sold in calendar years beginning after December 31, 2018, . (2) Effective date The amendment made by this subsection shall apply to gasoline removed, entered, or sold on or after the first day of the first calendar quarter beginning not less than 60 days after the date of the enactment of this Act. (b) Adjustment for inflation (1) 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) Adjustment for inflation (i) In general In the case of gasoline removed, entered, or sold in a calendar year after 2019, the 34.3 cents amount in subparagraph (A)(i)(IV) shall be increased by an amount equal to— (I) such cents amount, multiplied by (II) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting calendar year 2018 for calendar year 1992 in subparagraph (B) thereof. (ii) Rounding If the amount as increased under clause (i) is not a multiple of 0.1 cents, such amount shall be rounded to the nearest multiple of 0.1 cents. . (2) Effective date The amendment made by this subsection shall apply to gasoline removed, entered, or sold after December 31, 2018. (c) Conforming amendment relating to tax on compressed natural gas (1) In general The second sentence of subparagraph (A) of section 4041(a)(3) of the Internal Revenue Code of 1986 is amended by striking 18.3 cents and inserting equal to the rate of tax in effect under section 4081(a)(2)(A)(i) for the calendar year in which such gas is sold or used,. (2) Effective date The amendment made by this subsection shall apply to compressed natural gas sold or used on or after the first day of the first calendar quarter beginning not less than 60 days after the date of the enactment of this Act. (d) Conforming amendment relating to tax on methanol and ethanol (1) In general Paragraph (1) of section 4041(m) of the Internal Revenue Code of 1986 is amended by striking shall be— and all that follows and inserting shall be equal to 61.7 percent of the rate of tax in effect under section 4081(a)(2)(A)(i) for the calendar year in which such fuel is sold or used.. (2) Effective date The amendment made by this subsection shall apply to methanol and ethanol fuel sold or used on or after the first day of the first calendar quarter beginning not less than 60 days after the date of the enactment of this Act. 102. Increase in tax on diesel fuel and kerosene (a) In general Clause (iii) of section 4081(a)(2)(A) of the Internal Revenue Code of 1986 is amended by striking kerosene and all that follows and inserting “kerosene— (I) 28.3 cents per gallon in the case of diesel fuel or kerosene removed, entered, or sold in calendar year 2016, (II) 32.3 cents per gallon in the case of diesel fuel or kerosene removed, entered, or sold in calendar year 2017, (III) 36.3 cents per gallon in the case of diesel fuel or kerosene removed, entered, or sold in calendar year 2018, and (IV) 40.3 cents per gallon in the case of diesel fuel or kerosene removed, entered, or sold in calendar years beginning after December 31, 2018, . (b) Adjustment for inflation Subparagraph (E) of section 4081(a)(2) of the Internal Revenue Code of 1986, as added by this title, is amended— (1) by redesignating clause (ii) as clause (iii), (2) by striking If the amount as increased under clause (i) in clause (iii), as so redesignated, and inserting If any amount as increased under clause (i) or (ii), (3) by striking In general in the heading of clause (i) and inserting Tax on gasoline, and (4) by inserting after clause (i) the following new clause: (ii) Tax on diesel fuel or kerosene In the case of diesel fuel or kerosene removed, entered, or sold in a calendar year after 2019, the 40.3 cents amount in subparagraph (A)(iii)(IV) shall be increased by an amount equal to— (I) such cents amount, multiplied by (II) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting calendar year 2018 for calendar year 1992 in subparagraph (B) thereof. . (c) Conforming Amendment Relating to Tax on Diesel-Water Fuel Emulsions Subparagraph (D) of section 4081(a)(2) of the Internal Revenue Code of 1986 is amended by striking subparagraph (A)(iii) shall be applied by substituting 19.7 cents for 24.3 cents and inserting the rate of tax shall be equal to 81 percent of the rate of tax in effect under subparagraph (A)(iii) for the calendar year in which such emulsion is removed, entered, or sold. (d) Conforming amendment relating to tax on certain alternative fuels Clause (ii) of section 4041(a)(2)(B) of the Internal Revenue Code of 1986 is amended by striking 24.3 cents per gallon and inserting the rate of tax specified in section 4081(a)(2)(A)(iii) which is in effect at the time of such sale or use. (e) Conforming amendment relating to rate of tax on buses (1) In general Subparagraph (A) of section 6427(b)(2) of the Internal Revenue Code of 1986 is amended by striking 7.4 cents per gallon less and all that follows and inserting the aggregate rate at which tax was imposed on such fuel by section 4041(a) or 4081, as the case may be, reduced by the amount determined under subparagraph (E).. (2) Amount determined Paragraph (2) of section 6427(b) of such Code is amended by adding at the end the following new subparagraph: (E) Amount determined (i) In general For purposes of subparagraph (A), the amount determined under this paragraph is— (I) 8.62 cents per gallon in the case of fuel used in calendar year 2016, (II) 9.84 cents per gallon in the case of fuel used in calendar year 2017, (III) 11.05 cents per gallon in the case of fuel used in calendar year 2018, and (IV) 12.27 cents per gallon in the case of fuel used in calendar years beginning after December 31, 2018. (ii) Adjustment for inflation In the case of fuel used in a calendar year after 2019, the 12.27 cents amount in clause (i)(IV) shall be increased by an amount equal to— (I) such cents amount, multiplied by (II) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting calendar year 2018 for calendar year 1992 in subparagraph (B) thereof. . (f) Effective date The amendments made by this section shall apply to diesel fuel, kerosene, and diesel-water fuel emulsions removed, entered, or sold on or after the first day of the first calendar quarter beginning not less than 60 days after the date of the enactment of this Act. 103. Allocation in accounts in highway trust fund (a) In general Paragraph (2) of section 9503(e) of the Internal Revenue Code of 1986 is amended by striking subparagraphs (A) through (E) and inserting the following new subparagraphs: (A) except as otherwise provided in this sentence— (i) 2.86 cents per gallon with respect to taxes imposed during calendar year 2015, (ii) 3.66 cents per gallon with respect to taxes imposed during calendar year 2016, (iii) 4.46 cents per gallon with respect to taxes imposed during calendar year 2017, (iv) 5.26 cents per gallon with respect to taxes imposed during calendar year 2018, and (v) 6.06 cents per gallon with respect to taxes imposed during any calendar year after 2018, (B) in the case of any partially exempt methanol or ethanol fuel (as defined in section 4041(m)) none of the alcohol in which consists of ethanol— (i) 1.43 cents per gallon with respect to taxes imposed during calendar year 2015, (ii) 1.92 cents per gallon with respect to taxes imposed during calendar year 2016, (iii) 2.42 cents per gallon with respect to taxes imposed during calendar year 2017, (iv) 2.91 cents per gallon with respect to taxes imposed during calendar year 2018, and (v) 3.40 cents per gallon with respect to taxes imposed during any calendar year after 2018, (C) in the case of liquefied natural gas— (i) 1.86 cents per gallon with respect to taxes imposed during calendar year 2015, (ii) 2.66 cents per gallon with respect to taxes imposed during calendar year 2016, (iii) 3.46 cents per gallon with respect to taxes imposed during calendar year 2017, (iv) 4.26 cents per gallon with respect to taxes imposed during calendar year 2018, and (v) 5.06 cents per gallon with respect to taxes imposed during any calendar year after 2018, (D) in the case of liquefied petroleum gas— (i) 2.13 cents per gallon with respect to taxes imposed during calendar year 2015, (ii) 2.93 cents per gallon with respect to taxes imposed during calendar year 2016, (iii) 3.73 cents per gallon with respect to taxes imposed during calendar year 2017, (iv) 4.53 cents per gallon with respect to taxes imposed during calendar year 2018, and (v) 5.33 cents per gallon with respect to taxes imposed during any calendar year after 2018, and (E) in the case of compressed natural gas— (i) 9.71 cents per MCF (determined at standard temperature and pressure) with respect to taxes imposed during calendar year 2015, (ii) 10.51 cents per MCF (determined at standard temperature and pressure) with respect to taxes imposed during calendar year 2016, (iii) 11.31 cents per MCF (determined at standard temperature and pressure) with respect to taxes imposed during calendar year 2017, (iv) 12.11 cents per MCF (determined at standard temperature and pressure) with respect to taxes imposed during calendar year 2018, and (v) 12.91 cents per MCF (determined at standard temperature and pressure) with respect to taxes imposed during any calendar year after 2018. . (b) Adjustment for inflation Section 9503(e) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (6) Adjustment for inflation (A) In general In the case of any calendar year beginning after 2019, the amounts specified in subparagraphs (A)(v), (B)(v), (C)(v), (D)(v), and (E)(v) of paragraph (2) shall each be increased by an amount equal to— (i) such amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting calendar year 2018 for calendar year 1992 in subparagraph (B) thereof. (B) Rounding Any increase under subparagraph (A) shall be rounded to the nearest 0.1 cents. . 104. Floor stocks taxes (a) Imposition of tax In the case of any taxable fuel which is held on the floor stocks tax date by any person, there is hereby imposed a floor stocks tax equal to the excess of the tax which would be imposed on such fuel under section 4041 or 4081 of the Internal Revenue Code of 1986 had the taxable event occurred on the floor stocks tax date over the tax paid under any such section on such fuel. (b) Liability for tax and method of payment (1) Liability for tax A person holding a fuel on the floor stocks tax date to which the tax imposed by subsection (a) applies shall be liable for such tax. (2) Method of payment The tax imposed by subsection (a) shall be paid in such manner as the Secretary shall prescribe. (3) Time of payment The tax imposed by subsection (a) shall be paid on or before the date which is 6 months after the floor stocks tax date. (c) Definitions For purposes of this section— (1) Held by a person A fuel 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). (2) Taxable fuel The term taxable fuel means— (A) gasoline (other than aviation gasoline), diesel fuel, kerosene (other than aviation-grade kerosene), and diesel-water fuel emulsions; (B) fuel taxed under section 4041(a)(2) of the Internal Revenue Code of 1986 (including methanol and ethanol to which section 4041(m) of such Code applies); and (C) compressed natural gas. (3) Floor stocks date The term floor stocks tax date means January 1 of any calendar year beginning after the date of the enactment of this Act on which a rate of tax under section 4041 or 4081 of such Code increases pursuant to an amendment made by section 101 or 102. (4) Secretary The term Secretary means the Secretary of the Treasury. (d) Exception for exempt uses The tax imposed by subsection (a) shall not apply to taxable fuel held by any person exclusively for any use to the extent a credit or refund of the tax imposed by a section of such Code is allowable for such use. (e) Exception for fuel held in vehicle tank No tax shall be imposed by subsection (a) on taxable fuel held in the tank of a motor vehicle or motorboat. (f) Exception for certain amounts of fuel (1) In general No tax shall be imposed by subsection (a) on any fuel held on the floor stocks tax date by any person if the aggregate amount of fuel 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. (2) Exempt fuel For purposes of paragraph (1), there shall not be taken into account fuel held by any person which is exempt from the tax imposed by subsection (a) by reason of subsection (d) or (e). (3) Controlled groups For purposes of this section— (A) 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. (B) 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 one or more of such persons is not a corporation. (g) Other laws applicable All provisions of law, including penalties, applicable with respect to the taxes imposed by chapter 31 or 32 of such Code shall, insofar as applicable and not inconsistent with the provisions of this section, apply with respect to the floor stock taxes imposed by subsection (a) to the same extent as if such taxes were imposed by such chapter. II Tax Relief for Working Families 201. Permanent extension of and modifications to the child tax credit (a) Permanent extension of increase in refundable portion (1) In general Clause (i) of section 24(d)(1)(B) of the Internal Revenue Code of 1986 is amended by striking $10,000 and inserting $3,000. (2) Conforming amendment Subsection (d) of section 24 of such Code is amended by striking paragraph (4). (3) Elimination of inflation adjustment Subsection (d) of section 24 of such Code is amended by striking paragraph (3). (b) Inflation adjustments Section 24 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (g) Inflation adjustments (1) In general In the case of any taxable year beginning in a calendar year after 2014, the $1,000 amount in subsection (a) and each of the dollar amounts in subsection (b)(2) shall each be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2011 for calendar year 1992 in subparagraph (B) thereof. (2) Rounding Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $50. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 202. Permanent extension of modifications to earned income tax credit (a) Increase in credit percentage for families with 3 or more children Paragraph (1) of section 32(b) of the Internal Revenue Code of 1986 is amended— (1) by striking The credit and inserting the following: (A) In general The credit , and (2) by adding at the end the following new subparagraph: (B) Increased credit percentage for families with 3 or more qualifying children In the case of an eligible individual with 3 or more qualifying children, the table in subparagraph (A) shall be applied by substituting 45 for 40 in the second column thereof. . (b) Joint returns (1) In general Subparagraph (B) of section 32(b)(2) of the Internal Revenue Code of 1986 is amended by striking $3,000 and inserting $5,000.. (2) Inflation adjustments Clause (ii) of section 32(j)(1)(B) of such Code is amended— (A) by striking $3,000 and inserting $5,000, (B) by striking subsection (b)(2)(B)(iii) and inserting subsection (b)(2)(B), and (C) by striking calendar year 2007 and inserting calendar year 2008. (c) Conforming amendment Section 32(b)of such Code is amended by striking paragraph (3). (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 203. Strengthening the earned income tax credit (a) Increased credit for individuals with no qualifying children (1) In general The table in subparagraph (A) of section 32(b)(2) of the Internal Revenue Code of 1986 is amended— (A) by striking $4,220 in the second column and inserting $8,820, and (B) by striking $5,280 in the last column and inserting $10,425. (2) Inflation adjustments Subparagraph (B) of section 32(j)(1) of the Internal Revenue Code of 1986, as amended by this Act, is amended— (A) in clause (i)— (i) by inserting (except as provided in clause (iii)) after (b)(2)(A), and (ii) by striking and at the end, and (B) by adding at the end the following new clause: (iii) in the case of the $8,820 and $10,4250 amount in the table in subsection (b)(2)(A), by substituting calendar year 2011 for calendar year 1992 in subparagraph (B) of such section 1. . (b) Credit increase and reduction in phaseout for individuals with no children The table contained in section 32(b)(1)(A) of the Internal Revenue Code of 1986, as amended by this Act, is amended— (1) by striking 7.65 in the second column of the third row and inserting 15.3, and (2) by striking 7.65 in the third column of the third row and inserting 15.3. (c) Credit allowed for certain childless individuals over age 21 Subclause (II) of section 32(c)(1)(A)(ii) of the Internal Revenue Code of 1986 is amended by striking age 25 and inserting age 21. (d) Effective dates The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 204. Simplifying the earned income tax credit (a) Modification of abandoned spouse rule (1) In general Section 32(c)(1) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (G) Certain married individuals living apart For purposes of this section, an individual who— (i) is married (within the meaning of section 7703(a)) and files a separate return for the taxable year, (ii) lives with a qualifying child of the individual for more than one-half of such taxable year, and (iii) (I) during the last 6 months of such taxable year, does not have the same principal place of abode as the individual's spouse, or (II) has a legally binding separation agreement with the individual’s spouse and is not a member of the same household with the individual’s spouse by the end of the taxable year, shall not be considered as married. . (2) Conforming amendments (A) The last sentence of section 32(c)(1)(A) of the Internal Revenue Code of 1986 is amended by striking section 7703 and inserting section 7703(a). (B) Section 32(d) of such Code is amended by striking In the case of an individual who is married (within the meaning of section 7703) and inserting In the case of an individual who is married (within the meaning of section 7703(a)) and is not described in subsection (c)(1)(G). (b) Elimination of disqualified investment income test (1) In general Section 32 of the Internal Revenue Code of 1986 is amended by striking subsection (i). (2) Conforming amendments (A) Section 32(j)(1)(B)(i) of such Code, as amended by this Act, is amended— (i) by striking subsections and inserting subsection, and (ii) by striking and (i)(1). (B) Section 32(j)(2) of such Code is amended to read as follows: (2) Rounding If any dollar amount in subsection (b)(2)(A) (after being increased under subparagraph (B) thereof), after being increased under paragraph (1), is not a multiple of $10, such amount shall be rounded to the next nearest multiple of $10. . (c) Simplification of rules regarding presence of qualifying child (1) Taxpayer eligible for credit for worker without qualifying child if qualifying child claimed by another member of family Section 32(c)(1) of the Internal Revenue Code of 1986, as amended by this Act, is amended by adding at the end the following new paragraph: (H) Taxpayer eligible for credit for worker without qualifying child if qualifying child claimed by another member of family (i) General rule Except as provided in clause (ii), in the case of 2 or more eligible individuals who may claim for such taxable year the same individual as a qualifying child, if such individual is claimed as a qualifying child by such an eligible individual, then any other such eligible individual who does not make such a claim of such child or of any other qualifying child may be considered an eligible individual without a qualifying child for purposes of the credit allowed under this section for such taxable year. (ii) Exception if qualifying child claimed by parent If an individual is claimed as a qualifying child for any taxable year by an eligible individual who is a parent of such child, then no other custodial parent of such child who does not make such a claim of such child may be considered an eligible individual without a qualifying child for purposes of the credit allowed under this section for such taxable year. . (2) Taxpayer eligible for credit for worker without qualifying child if qualifying children do not have valid social security number Subparagraph (F) of section 32(c)(1) of the Internal Revenue Code of 1986 is amended to read as follows: (F) Individuals who do not include tin, etc., of any qualifying child In the case of any eligible individual who has one or more qualifying children, if no qualifying child of such individual is taken into account under subsection (b) by reason of paragraph (3)(D), for purposes of the credit allowed under this section, such individual may be considered an eligible individual without a qualifying child. . (d) Effective dates The amendments made by this section shall apply to taxable years beginning after December 31, 2014.