S. 1111 — A bill to amend the Internal Revenue Code of 1986 to allow for payments to certain individuals who dye fuel, and for other purposes.

This section establishes a new IRC §6434 authorizing the Secretary of the Treasury to pay persons (without interest) an amount equal to the diesel fuel or kerosene excise tax imposed by IRC §4081 for eligible indelibly dyed diesel fuel or kerosene removed from a terminal. Eligible fuel is that with respect to which the §4081 tax was previously paid (and not credited or refunded) and which is exempt from tax under §4082(a) (i.e., indelibly dyed diesel fuel or kerosene intended for nontaxable uses such as off-highway or heating). (Thus, the provision creates a reimbursement mechanism for the excise tax paid earlier in the supply chain on fuel later determined to qualify for the dyed-fuel exemption.) The section makes conforming amendments to IRC §§6206 (authorizing assessments), 6430 (advance payments), and 6675 (excessive claims penalties) to reference §6434 and applies to fuel removed on or after 180 days after enactment.