**COMPARISON OF TRANSPORTATION REVENUE**

**AND RELATED PROVISIONS OF H.R. 2400,**

**AS PASSED BY THE HOUSE AND THE SENATE**

Prepared by the Staff

of the

JOINT COMMITTEE ON TAXATION

April 27, 1998

JCX-27-98

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**CONTENTS**
**INTRODUCTION**

**IDENTICAL REVENUE-RELATED PROVISIONS**

**COMPARISON OF TRANSPORTATION REVENUE AND RELATED PROVISIONS OF H.R. 2400**

	I.	HIGHWAY TRUST FUND EXCISE TAX AND EXPENDITURE PROVISIONS		

		A.	Highway Taxes and Exemptions		

		B.	Highway Trust Fund Provisions		

		C.	Other Trust Funds Receiving Monies from Highway Trust Fund		

	II.	ADDITIONAL REVENUE PROVISIONS		

		A.	Rail Fuel Excise Tax		

		B.	Income Tax Provisions		

**INTRODUCTION**

	This document,(1) prepared by the staff of the Joint Committee on Taxation (the "Joint Committeestaff"), provides a comparison of the transportation revenue and related provisions of H.R. 2400, aspassed by the House and the Senate.(2)

	This document provides a list of identical revenue-related provisions and a comparison of thediffering transportation revenue-related provisions.  A separate Joint Committee staff revenue table(JCX-28-98), also being issued today, compares the budgetary effects of these provisions and of twoadditional provisions included in the authorizing titles of the Senate amendment.  These additionalprovisions, the Transportation Infrastructure Finance and Innovation Act and reauthorization andexpansion of the State Infrastructure Bank program, are not discussed in this document because they donot involve amendments to the Internal Revenue Code.  Both provisions are, however, estimated toresult in Federal revenue losses because the programs are designed to increase highway and othertransportation spending by leveraging the issuance of tax-exempt debt.  The Joint Committee staff alsohas supplied estimates of these provisions to the Congressional Budget Office which will include theseeffects in estimates prepared for use by conferees considering the authorizing titles of the bill.

**IDENTICAL REVENUE-RELATED PROVISIONS**

1.	Delay effective date of a requirement that registered motor fuels terminals offer dyed diesel fuel ifthey sell diesel fuel and dyed kerosene if they sell kerosene for two years, to July 1, 2000.

2.	Extend transfer of gross receipts from highway excise taxes to the Highway Trust Fund for theperiod October 1, 1999 through September 30, 2005.

3.	Extend authority to spend money from the Highway Trust Fund from October 1, 1998 through 	September 30, 2003.

4.	Update Highway Trust Fund expenditure purposes to include expenditures provided for under theauthorization provisions of the bill and incorporate provisions ensuring that tax revenues are notdeposited in the Trust Fund if unauthorized expenditures occur.

5.	Conform the anti-deficit provisions of the Highway Account and Mass Transit Account of theHighway Trust Fund (i.e., two years for both Accounts).

6.	Include technical corrections to 1997 legislation allocating fuels tax revenues between highway andmass transit programs.

7.	Repeal "deadwood" provision limiting effect of 1997 legislation on direct spending under 1991ISTEA provisions.

8.	Extend revenue transfers to Aquatic Resources Trust Fund; update expenditure purposes of the BoatSafety Account of that Trust Fund; and incorporate provisions ensuring that tax revenues are notdeposited in the Trust Fund if unauthorized expenditures occur.

9.	Repeal National Recreational Trails Trust Fund.
**COMPARISON OF TRANSPORTATION REVENUE AND RELATEDPROVISIONS OF H.R. 2400, AS PASSED BY THE HOUSE AND THE SENATE*****Present Law******House Bill******Senate Amendment*****************I.	HIGHWAY TRUST FUNDEXCISE TAX ANDEXPENDITURE  PROVISIONS****A.	Highway Taxes and Exemptions**		1.	Highway Trust Fund excisetaxes on gasoline, diesel fuel,kerosene, special motor fuels,and heavy truck and tire sales,and an annual use tax on heavytrucks are scheduled to expireafter September 30, 1999.	1.	Extends Highway Trust Fundexcise taxes other than heavy trucktire tax through September 30,2005.  Tire tax is extendedthrough September 30, 2000, andthen is repealed.	1.	Extends all Highway Trust Fundexcise taxes currently scheduled toexpire after September 30, 1999,through September 30, 2005.		2.	Most exemptions from theHighway Trust Fund taxes alsoexpire after September 30,1999.  Tax provisions forethanol and renewable-sourcemethanol expire afterSeptember 30, 2000 (excisetax) and December 31, 2000(income tax).	2.	Extends all expiring exemptionswithout change for a periodconcurrent with extension periodof the taxes, except provisions forethanol and renewable-sourcemethanol for which present-lawexpiration dates are retained.	2.	Same as House bill, except (a)ethanol and renewable-sourcemethanol provisions are extendedthrough September 30, 2007(excise tax) and December 31,2007 (income tax), and (b) ethanolbenefit is reduced from 54cents/gallon of ethanol to 53 cents(2001-2002), 52 cents (2003-2004) and 51 cents thereafter.		3.	Gasoline and diesel fuel taxrefunds are administeredseparately, subject to separatequarterly minimum filingthresholds.  Fourth quarterrefunds must be claimed asincome tax credits regardlessof amount.	3.	Combines refund procedures forall taxable fuels allowingaggregation of quarterly amountsfor all fuels and filing of claimsonce a single $750 minimumamount is reached (determined ona year-to-date rather than anindividual quarter basis).  Fourthquarter claims may be filed onsame basis as claims for first threequarters.	3.	No provision.**B.	Highway Trust Fund Provisions**		Revenues remain in the HighwayTrust Fund until spent; unspentbalances earn interest.  	Removes "excess" Highway TrustFund balances (amount over $8 billionfor highways and amount over $5.5billion for mass transit) on October 1,1998, by cancelling Treasuryobligations held by the Trust Fund;and provides that the Highway TrustFund earns no further interest afterSeptember 30, 1998.   	No provision.**C.	Other Trust Funds ReceivingMonies from Highway TrustFund**	  	Aquatic Resources Trust Fundreceives 11.5 cents/gallon of themotorboat fuels tax revenues (upto $70 million per year for BoatSafety Account programs; balanceto Sport Fish Restoration Accountprograms) and small-enginegasoline tax revenues (WetlandsSub-Account program).  Theremaining 6.8 cents/gallon isretained in the General Fund.	1.	Modifies division of motorboatfuels tax revenues between BoatSafety and Sport Fish RestorationAccounts of Aquatic ResourcesTrust Fund to conform toauthorization provisions of the billwhich anticipate up to 50 percentof revenues for Boat SafetyAccount programs (rather than upto $70 million).	1.	No provision.	2.	Transfers portion of motorboatfuels and small-engine gasolinetax revenues currently retained inthe General Fund to the AquaticResources Trust Fund (3.4cents/gallon in FY 1999; full 6.8cents/gallon in FY 2000-2003).	2.	No provision.**II.	ADDITIONAL REVENUEPROVISIONS****A.	Rail Fuel Excise Tax**		Railroad fuel is subject to a 5.55cents/gallon General Fund tax. 1.25 cents/gallon of the tax isscheduled to expire afterSeptember 30, 1999; theremaining 4.3 cents/gallon ispermanent.	Repeals the 4.3-cents/gallon rate,effective on October 1, 2000.	Repeals the 1.25-cents/gallon rate,effective on March 1, 1999.**B.	Income Tax Provisions**		1.	Tax treatment of certainFederal environmental grants.--Certain Federal grants areexcluded from income withtaxpayers receiving no basis inassets financed with grantmonies.  Other Federal grantprograms result in incomeinclusion when the grant isreceived, but taxpayers receivebasis in grant-financedproperty.	1.	No provision.		1.	Provides that grants underauthorization committeecongestion mitigation ("CMAQ")provisions are tax free "to theextent" the grants would be underpresent law.		2.	Tax-exempt bonds for privatehighway projects.--Interest onbonds that finance propertyused and paid for by States andlocal governments is tax-exempt.  Interest on mostbonds issued by thesegovernments acting asconduits for private businesses(including private toll roads) istaxable.	2.	No provision.	2.	Expands availability of tax-exempt bonds to include projectsprovided for under a pilot programin the authorization provisions ofthe Senate amendment.		3.	Qualified transportation fringebenefits.--Qualifiedtransportation fringe benefitsprovided by an employer areexcluded from an employee'sgross income. Qualifiedtransportation fringe benefitsinclude parking, transit passes,and vanpool benefits. Inaddition, in the case ofemployer-provided parking, noamount is includible in incomeof an employee merelybecause the employer offersthe employee a choice betweencash and employer-providedparking. Transit passes andvanpool benefits are onlyexcludable if provided inaddition to, and not in lieu of,any compensation otherwisepayable to an employee. Underpresent law, up to $175 permonth (for 1998) of employer-provided parking and up to$65 per month (for 1998) ofemployer-provided transit andvanpool benefits areexcludable from gross income.These dollar amounts areindexed for inflation.	3.	No provision.		3.	(a) Permits employers to offeremployees the option of electingcash compensation in lieu of anyqualified transportation benefit, ora combination of any of thesebenefits, effective for taxableyears beginning after December31, 1997;  (b) provides that thereis no indexing in 1999 for anyqualified transportation benefit;and (c) increases the exclusion fortransit passes and vanpoolingbenefits to $100 per montheffective for taxable yearsbeginning after December 31,2001 (with indexing of suchamount beginning after 2002).		4.	Purposes for which AmtrakNOL monies may be used innon-Amtrak States.--1997legislation provided expandedNOL refunds to Amtrak. Amtrak is required to transferportions of this money toStates not receiving Amtrakservice.  These Statesgenerally must use thetransferred monies for masstransit purposes.	4.	No provision.	4.	Expands the list of purposes forwhich Amtrak NOL monies maybe 	used in non-Amtrak States toinclude:  (a) capital expendituresrelated to State-owned railoperations; (b) projects eligible toreceive funding under sections5309, 5310 or 5311 of Title 49; (c)projects that are eligible to receivefunding under sections 130 or 152of Title 23; (d) upgrading andmaintenance of intercity primaryand rural air service facilities,including the purchase of airservice between primary and ruralairports and regional hubs; and (e)provision of passenger ferryboatservice. 
		Effective as if included in theTaxpayer Relief Act of 1997.

 (Floor amendment by Sen. Chafee onbehalf of Sens. Daschle, Thomas, andEnzi, adopted by voice vote)

1.   This document may be cited as follows:  Joint Committee on Taxation, *Comparison of Transportation Revenue and RelatedProvisions of H.R. 2400, as Passed by the House and the Senate*  (JCX-27-98), April 27, 1998.
2.   H.R. 2400 was passed by the House on April 1, 1998, and was passed by the Senate, as amended, on April 2, 1998.  TheSenate amendment incorporated the provisions of S. 1173, as amended by the Senate.