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

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

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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 RELATED

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PROVISIONS 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 renewablesource 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

No provision.

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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.

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

Repeals the

4.3-cents/gallon rate,

effective on October 1,

2000.

Repeals the 1.25-cents/gallon rate,

effective on March 1, 1999.

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permanent.

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)

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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.

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