26 USC 6096. 26 USC 44C note. 26 USC 4064. (4) Subsection (b) of section 6096 (relating to designation of income tax payments to Presidential Election Campaign Fund) is amended by striking out "and 44B" and inserting in lieu thereof "44B, and 44C". (c) EFFECTIVE DATE.- The amendments made by this section shall apply to taxable years ending on or after April 20, 1977. TITLE II-TRANSPORTATION PART I-GAS GUZZLER TAX SEC. 201. GAS GUZZLER TAX. (a) GENERAL RULE.-Part I of subchapter A of chapter 32 (relating to motor vehicle excise taxes) is amended by adding at the end thereof the following new section: "SEC. 4064. GAS GUZZLER TAX. "(a) IMPOSITION OF TAX.-There is hereby imposed on the sale by the manufacturer of each automobile a tax determined in accordance with the following tables: "(1) In the case of a 1980 model year automobile: "If the fuel economy of the model type in which the automobile falls is: At least 15-- At least 14 but less than 15. At least 13 but less than 14. Less than 13---- “(2) In the case of a 1981 model year automobile: "If the fuel economy of the model type in which the automobile falls is: At least 17.-.. At least 16 but less than 17. At least 14 but less than 15.. At least 13 but less than 14. The tax is: 0 $200 300 550 The tax is: $200 350 450 550 650 "(7) In the case of a 1986 or later model year automobile: "If the fuel economy of the model type in which the automobile falls is: At least 22.5....... At least 21.5 but less than 22.5.... "(b) DEFINITIONS.-For purposes of this section "(1) AUTOMOBILE.— The tax is: "(A) IN GENERAL.-The term 'automobile' means any 4-wheeled vehicle propelled by fuel "(i) which is manufactured primarily for use on public streets, roads, and highways (except any vehicle operated exclusively on a rail or rails), and "(ii) which is rated at 6,000 pounds gross vehicle weight or less. "(B) EXCEPTION FOR CERTAIN VEHICLES.-The term 'automobile' does not include any vehicle which is treated as a nonpassenger automobile under the rules which were prescribed by the Secretary of Transportation for purposes of section 501 of the Motor Vehicle Information and Cost Savings Act (15 U.S.C. 2001) and which were in effect on the date of the enactment of this section. "(C) EXCEPTION FOR EMERGENCY VEHICLES.-The term 'automobile' does not include any vehicle sold for use and used "(i) as an ambulance or combination ambulancehearse, "(ii) by the United States or by a State or local government for police or other law enforcement purposes, or 42 USC 7540. "(iii) for other emergency uses prescribed by the Secretary by regulations. "(2) FUEL ECONOMY.-The term 'fuel economy' means the average number of miles traveled by an automobile per gallon of gasoline (or equivalent amount of other fuel) consumed, as determined by the EPA Administrator in accordance with procedures established under subsection (c). "(3) MODEL TYPE.-The term 'model type' means a particular class of automobile as determined by regulation by the EPA Administrator. "(4) MODEL YEAR.-The term 'model year', with reference to any specific calendar year, means a manufacturer's annual production period (as determined by the EPA Administrator) which includes January 1 of such calendar year. If a manufacturer has no annual production period, the term 'model year' means the calendar year. "(5) MANUFACTURER.-The term 'manufacturer' includes a producer or importer. "(6) EPA ADMINISTRATOR.-The term 'EPA Administrator' means the Administrator of the Environmental Protection Agency. (7) FUEL.-The term 'fuel' means gasoline and diesel fuel. The Secretary (after consultation with the Secretary of Transportation) may, by regulation, include any product of petroleum or natural gas within the meaning of such term if he determines that such inclusion is consistent with the need of the Nation to conserve energy. "(c) DETERMINATION OF FUEL ECONOMY.-For purposes of this section "(1) IN GENERAL.-Fuel economy for any model type shall be measured in accordance with testing and calculation procedures established by the EPA Administrator by regulation. Procedures so established shall be the procedures utilized by the EPA Administrator for model year 1975 (weighted 55 percent urban cycle, and 45 percent highway cycle), or procedures which yield comparable results. Procedures under this subsection, to the extent practicable, shall require that fuel economy tests be conducted in conjunction with emissions tests conducted under section 206 of the Clean Air Act. The EPA Administrator shall report any measurements of fuel economy to the Secretary. "(2) SPECIAL RULE FOR FUELS OTHER THAN GASOLINE.-The EPA Administrator shall by regulation determine that quantity of any other fuel which is the equivalent of one gallon of gasoline. "(3) TIME BY WHICH REGULATIONS MUST BE ISSUED.-Testing and calculation procedures applicable to a model year, and any amendment to such procedures (other than a technical or clerical amendment), shall be promulgated not less than 12 months before the model year to which such procedures apply. "(d) SPECIAL RULES FOR SMALL MANUFACTURERS. “(1) IN GENERAL.-If, on the application of a small manufacturer, the Secretary determines that it is not feasible for such manufacturer to meet the tax-free fuel economy level for the model year with respect to all automobiles produced by such manufacturer or with respect to a model type produced by such manufacturer, the Secretary may by regulation prescribe an alternate rate schedule for such model year for all automobiles produced by such manufacturer or for such model type, as the case may be. The alternate rate schedule shall be based on the maximum feasible fuel economy level which such manufacturer can meet for such model year with respect to all automobiles or with respect to such model type, as the case may be. "(2) APPLICATION TO INCLUDE NECESSARY INFORMATION.-An application under this subsection for any model year shall contain such information as the Secretary may by regulations prescribe. "(3) DETERMINATIONS TO BE MADE ONLY AFTER CONSULTATION.Determinations under paragraph (1) shall be made by the Secretary only after consultation with the Secretary of Energy, the Secretary of Transportation, and other appropriate Federal officers. "(4) SMALL MANUFACTURER DEFINED.— "(A) IN GENERAL-For purposes of this subsection, the term 'small manufacturer' means any manufacturer "(i) who manufactured (whether or not in the United States) fewer than 10,000 automobiles in the second model year preceding the model year for which the determination under paragraph (1) is being made, and "(ii) who can reasonably be expected to manufacture (whether or not in the United States) fewer than 10,000 automobiles in the model year for which the determination under paragraph (1) is being made. "(B) SPECIAL RULES.-For purposes of subparagraph (A)— “(i) ManUFACTURER OF AUTOMOBILES PRODUCED ABROAD DETERMINED WITHOUT REGARD то IMPORTATION.-The meaning of the term 'manufacturer' shall be determined without regard to subsection (b) (5). "(ii) CONTROLLED GROUPS.-Persons who are members of the same controlled group of corporations shall be treated as one manufacturer. For purposes of the preceding sentence, the term 'controlled group of corporations' has the meaning given to such term by section 1563 (a); except that 'more than 50 percent' shall be sub- 26 USC 1563. stituted for 'at least 80 percent' each place it appears in section 1563 (a)." (b) REDUCTION IN BASIS OF AUTOMOBILE ON WHICH GAS Guzzler TAX WAS IMPOSED.-Section 1016 (relating to adjustments to basis) is 26 USC 1016. amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection: "(d) REDUCTION IN BASIS OF AUTOMOBILE ON WHICH GAS Guzzler TAX WAS IMPOSED.-If "(1) the taxpayer acquires any automobile with respect to which a tax was imposed by section 4064, and "(2) the use of such automobile by the taxpayer begins not more than 1 year after the date of the first sale for ultimate use of such automobile, the basis of such automobile shall be reduced by the amount of the tax imposed by section 4064 with respect to such automobile. In the case of importation, if the date of entry or withdrawal from warehouse for consumption is later than the date of the first sale for ultimate use, such later date shall be substituted for the date of such first sale in the preceding sentence." (c) DENIAL OF CERTAIN EXEMPTIONS AND REFUNDS.— (1) TAX-FREE SALES. Subsection (a) of section 4221 (relating 26 USC 4221. to certain tax-free sales) is amended by adding at the end thereof the following new sentence: 26 USC 4293. 26 USC 6416. 26 USC 4217. 26 USC 4222. 26 USC 4064 note. 26 USC 4064. "Paragraphs (4) and (5) shall not apply to the tax imposed by section 4064." (2) UNITED STATES AND POSSESSIONS.-Section 4293 (relating to exemption for United States and possessions) is amended by striking out "tax imposed by section 4121" and inserting in lieu thereof "taxes imposed by sections 4064 and 4121". (3) DENIAL OF REFUNDS FOR CERTAIN USES.-Paragraph (2) of section 6416(b) (relating to tax payments considered overpayments in the case of specified uses and resales) is amended by adding at the end thereof the following new sentence: "Subparagraphs (C) and (D) shall not apply in the case of any tax paid under section 4064". (d) PAYMENT OF TAX IN CASE OF LEASED AUTOMOBILES.-Section 4217 (relating to leases) is amended by adding at the end thereof the following new subsection: "(e) LEASES OF AUTOMOBILES Subject to Gas Guzzler Tax.— (1) IN GENERAL.-In the case of the lease of an automobile the sale of which by the manufacturer would be taxable under section 4064, the foregoing provisions of this section shall not apply, but, for purposes of this chapter (A) the first lease of such automobile by the manufacturer shall be considered to be a sale, and "(B) any lease of such automobile by the manufacturer after the first lease of such automobile shall not be considered to be a sale. "(2) PAYMENT OF TAX.-In the case of a lease described in paragraph (1)(A)— "(A) there shall be paid by the manufacturer on each lease payment that portion of the total gas guzzler tax which bears the same ratio to such total gas guzzler tax as such payment bears to the total amount to be paid under such lease, "(B) if such lease is canceled, or the automobile is sold or otherwise disposed of, before the total gas guzzler tax is payable, there shall be paid by the manufacturer on such cancellation, sale, or disposition the difference between the tax imposed under subparagraph (A) on the lease payments and the total gas guzzler tax, and "(C) if the automobile is sold or otherwise disposed of after the total gas guzzler tax is payable, no tax shall be imposed under section 4064 on such sale or disposition. "(3) DEFINITIONS.-For purposes of this subsection "(A) MANUFACTURER.-The term 'manufacturer' includes a producer or importer. -The term 'total gas guzzler "(B) TOTAL GAS GUZZLER TAX.tax' means the tax imposed by section 4064, computed at the rate in effect on the date of the first lease." (e) AUTHORITY TO EXTEND REGISTRATION SYSTEM TO EXEMPTION OF EMERGENCY VEHICLES.-Subsection (d) of section 4222 (relating to registration in the case of certain other exemptions) is amended by inserting "4064 (b) (1) (C)," after "4063 (b).". (f) CLERICAL AMENDMENT.-The table of sections for part I of subchapter A of chapter 32 is amended by adding at the end thereof the following new item: "Sec. 4064. Gas guzzler tax." (g) EFFECTIVE DATE.-The amendments made by this section shall apply with respect to 1980 and later model year automobiles (as defined in section 4064 (b) of the Internal Revenue Code of 1954). |