39–006

105TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 105–5

AIRPORT AND AIRWAY TRUST FUND TAX REINSTATEMENT

ACT OF 1997

FEBRUARY 13, 1997.—Committed to the Committee of the Whole House on the State

of the Union and ordered to be printed

Mr. ARCHER, from the Committee on Ways and Means,

submitted the following

REPORT

[To accompany H.R. 668]

[Including cost estimate of the Congressional Budget Office]

The Committee on Ways and Means, to whom was referred the

bill (H.R. 668) to amend the Internal Revenue Code of 1986 to reinstate the Airport and Airway Trust Fund excise taxes, and for

other purposes, having considered the same, report favorably thereon without amendment, and recommend that the bill do pass.

CONTENTS

Page

I. SUMMARY AND BACKGROUND ......................................................................... 2

A. Summary ........................................................................................... 2

B. Background and Reasons for Legislation ........................................ 2

C. Legislative History ............................................................................ 3

II. EXPLANATION OF THE BILL ............................................................................ 3

III. VOTE OF THE COMMITTEE .............................................................................. 6

IV. BUDGET EFFECTS OF THE BILL ...................................................................... 6

A. Committee Estimates of Budgetary Effects .................................... 6

B. Budget Authority and Tax Expenditures ........................................ 8

C. Cost Estimate Prepared by the Congressional Budget Office ....... 8

V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE 9

A. Committee Oversight Findings and Recommendations ................. 9

B. Summary of Findings and Recommendations of the Committee

on Government Reform and Oversight ......................................... 9

C. Constitutional Authority Statement ................................................ 10

D. Information Relating to Unfunded Mandates ................................ 10

E. Applicability of House Rule XXI5(c) ................................................ 10

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED .................. 11
2

I. SUMMARY AND BACKGROUND

A. Summary

H.R. 668, as reported by the Committee on Ways and Means,

provides for reinstatement of the excise taxes which fund the Airport and Airway Trust Fund (the ‘‘Airport Trust Fund’’) during the

period beginning seven days after the date of enactment and ending after September 30, 1997. The bill further provides for transfer

of all revenues derived from these taxes (including those deposited

and currently scheduled to be deposited in the Treasury but which

cannot be transferred under present law) to the Airport Trust

Fund, and includes provisions to ensure prompt deposit of tax receipts with the Treasury once the excise taxes are reinstated.

B. Background and Need For Legislation

The operations and capital programs of the Federal Aviation Administration (the ‘‘FAA’’) are financed with appropriations from

both the Airport Trust Fund and the General Fund. In general,

capital programs are financed from the Airport Trust Fund and

operational expenses (e.g., air traffic controllers) are financed from

a mix of General Fund and Airport Trust Fund revenues. The Airport Trust Fund taxes were last imposed during the period from

August 27, 1996, through December 31, 1996. Receipts from these

taxes that were received in the Treasury Department before January 1, 1997, are authorized to be deposited in the Airport Trust

Fund.

Recently, it was learned that the Treasury Department, which

credits revenues to the Airport Trust Fund based on estimated receipts, has credited the Airport Trust Fund approximately $1.2 billion of tax receipts from transportation sold during the months of

September, October, and November, 1996, which has not as yet

been received by the Treasury Department. The delay in receipts

was caused by air carriers that (with Internal Revenue Service approval) delayed remitting taxes collected from their customers during this period until the air carriers file their quarterly excise tax

returns for the fourth quarter of 1996 on February 28, 1997. The

Treasury Department now must withdraw these amounts from the

Airport Trust Fund.

As a result of this reduction in the Airport Trust Fund’s balance,

the uncommitted monies in the Airport Trust Fund will be sufficient only to fund the FAA’s operating expenses through the end

of the 1997 fiscal year, plus capital programs (at previously anticipated levels) through March 1997. Further, because this information reflects only the best available estimates and because of provisions of certain contracts for multiple phase projects, the FAA may

be required to stop making new capital commitments and to begin

providing notice that it intends to terminate other contracts by

March 1, 1997, or earlier, absent legislative action.

By reinstating both the prior-law excise taxes and the authority

to transfer tax revenues to the Airport Trust Fund, the bill will enable the FAA to avoid possible shut-down of its capital programs

and to finance the agency’s activities and programs at least

through the end of the 1997 fiscal year.
3

C. Legislative History

Committee bill

H.R. 668 was introduced by Chairman Archer on February 11,

1997. The bill was considered in a Committee on Ways and Means

markup on February 12, 1997, and was ordered favorably reported,

without amendment, by voice vote.

Legislative hearing

The Committee on Ways and Means held a public hearing on

February 5, 1997, on the solvency of the Airport Trust Fund and

the impact of the recently discovered information regarding the

delay in deposit of air transportation excise taxes on FAA operations and capital programs. The Committee received testimony

from representatives of the Departments of the Treasury and

Transportation.

II. EXPLANATION OF THE BILL

Prior and Present Law

Tax rates

Before January 1, 1997, excise taxes were imposed on commercial air passenger and freight transportation and on fuels used in

general aviation (i.e., transportation on non-common carrier aircraft which is not for hire) to fund the Airport Trust Fund. The Airport Trust Fund was established in 1970 to finance a major portion

of the costs of the Federal Aviation Administration (the ‘‘FAA’’)

services and grant programs for State and local government airports. Before establishment of the Airport Trust Fund, Federal

aviation expenditures were financed from general revenues; General Fund domestic air passenger and fuels taxes were imposed

during this period. The structure of the Airport Trust Fund excise

taxes has remained generally unchanged, except for rates, since

1970.

Before 1997, the Airport Trust Fund excise taxes included three

taxes on commercial air transportation:

(1) A 10-percent excise tax on domestic air passenger transportation;

(2) A $6 per person international air passenger departure

tax; and

(3) A 6.25-percent domestic air freight excise tax.

During the same period, general aviation (e.g., corporate aircraft)

was subject to Airport Trust Fund excise taxes on the fuels it used

rather than the commercial aviation passenger ticket and freight

excise taxes. The Airport Trust Fund rates for these excise taxes

were 17.5 cents per gallon for jet fuel and 15 cents per gallon for

aviation gasoline.

Collection and deposit of tax

The air passenger ticket and freight excise taxes are collected

from passengers and freight shippers by the commercial air carriers. The air carriers then remit the funds to the Treasury Department; however, the air carriers are not required to remit monies
4

1 Air carriers generally make this election because it allows them to delay remitting tax beyond the date when remittance otherwise would be required.

immediately. Excise tax returns are filed quarterly (similar to annual income tax returns) with taxes being deposited on a semimonthly basis (similar to estimated income taxes). For air transportation sold during a semi-monthly period, air carriers may elect

to treat the taxes as collected on the last day of the first week of

the second following semi-monthly period. 1 Under these ‘‘deemed

collected’’ rules, for example, the taxes on air transportation sold

between October 1 and October 15, are treated as collected by the

air carriers on or before November 7. These amounts generally

must be deposited with the Treasury by November 10. Thus, on average, revenues from commercial air passenger transportation generally are not received by the Federal Government until approximately one month after the air carrier actually sells the transportation.

Like income tax withholding and estimated tax payments, the excise taxes contain payment safe harbors for avoiding underpayment

penalties. In general, Treasury Department regulations provide

that commercial air carriers are not subject to underpayment penalties if their semi-monthly deposits of passenger ticket and freight

waybill taxes for a quarter equal at least the amount of taxes they

were required to remit during the second preceding calendar quarter (the ‘‘look back’’ rules). For example, air carriers generally

would not be subject to underpayment penalties if their semimonthly deposits for the fourth quarter (October 1 through December 31) equaled at least the amount they were required to remit

during the second quarter (April 1 through June 30) of the same

year.

In a general information letter to the Air Transport Association

of America, dated August 30, 1996, the Internal Revenue Service

advised the air carriers that, notwithstanding that no excise taxes

were required to be remitted during a look back quarter, applicable

Treasury Department regulations permitted the air carriers to continue to avail themselves of the safe harbor and avoid remitting

taxes collected from consumers during September, October, and November of 1996 until the air carriers file their quarterly excise tax

returns for that period on February 28, 1997. (Similarly, the air

carriers are expected to retain most taxes collected from consumers

during December 1996 until their excise tax returns for the first

quarter of 1997 are due on May 31, 1997.)

On February 7, 1997, the Treasury Department announced that

it will modify its regulations, effective for taxes imposed after February 10, 1997. (See, Treasury Notice 97–15, February 7, 1997.)

The modified regulations will provide that the look-back safe harbor is not available for calculating deposits of taxes that were not

in effect throughout the look-back quarter. Thus, a situation similar to that which arose with respect to air transportation taxes imposed in 1996 could not occur again because those taxes would not

have been in effect throughout the second preceding calendar quarter. The Treasury Department notice does not change the deposit

rules applicable to air transportation taxes imposed during the

fourth quarter of 1996.
5

Trust Fund deposits

The Airport Trust Fund receives gross receipts attributable to

the excise taxes described above. Present law provides that taxes

received by the Treasury Department through the end of the period

when the taxes were last imposed (i.e., through December 31, 1996)

are deposited in the Airport Trust Fund. Taxes received after December 31, 1996, may not be transferred to the Airport Trust Fund

under present law.

The Treasury Department credited the Airport Trust Fund with approximately $1.2 billion based on incorrect estimates of excise

tax deposits. Subsequently, the Treasury learned that the air carriers would not remit taxes imposed in September, October, and

November of 1996 to the Treasury until February 28, 1997. The

Treasury Department plans to reverse this error. As a result, the

combination of the remaining uncommitted balance in the Airport

Trust Fund and General Fund appropriations available to the FAA

are believed to be sufficient only to support the FAA’s operational

expenses through the 1997 fiscal year and to allow new capital

commitments (assuming previously anticipated commitment levels)

to be made through March 1997. However, because best available

estimates of the effect of this error on the FAA budget do not include any estimates of the costs of terminating certain multiple

phase contracts, the FAA may have to stop making new commitments and begin notifying contractors of its intent to terminate

multiple phase contracts on March 1, 1997, or earlier, absent legislative action.

Explanation of Provisions

Reinstate air transportation excise taxes

The bill reinstates the air transportation excise taxes that expired after December 31, 1996, during the period beginning seven

days after the date of enactment and ending after September 30,

1997.

Transfer revenues to the Airport Trust Fund

The bill authorizes the Treasury Department to transfer to the

Airport Trust Fund receipts attributable to excise taxes described

above that are imposed on commercial and general aviation. This

will permit transfer of receipts attributable to taxes imposed both

during the period August 27, 1996, through December 31, 1996,

and during the period beginning seven days after the date of enactment.

Modify Treasury Department tax deposit regulations

To prevent a delay in depositing tax similar to that which occurred with respect to the fourth quarter of 1996, the provisions of

Treasury Department regulations providing an exception to penalties for underpayment of estimated excise taxes based on a lookback period will be made inapplicable when tax was not imposed

throughout the look back period. In such a case, taxpayers could

continue to use an alternative safe harbor that provides that no

underpayment penalty is imposed as long as the taxpayer has paid

at least 95 percent of the current quarter’s liability. The Treasury
6

Department has recently announced that it will modify its regulations in this manner for taxes imposed after February 10, 1997.

Effective Date

The provisions reinstating the commercial air transportation excise taxes are effective for (1) transportation beginning during the

period beginning seven days after the date of enactment and ending after September 30, 1997, and (2) amounts paid during such

period for transportation beginning after September 30, 1997. If

the air transportation excise taxes are not extended for transportation occurring after September 30, 1997, refunds would be provided for any taxes paid on passenger and freight transportation

purchased before October 1, 1997, for transportation that occurs at

a time when the taxes are not in effect. No tax is imposed on any

payment made before seven days after the date of enactment (other

than certain payments for freight transportation made between related parties), even if the transportation occurs during the period

beginning seven days after the date of enactment and ending after

September 30, 1997.

The provisions reinstating the general aviation gasoline excise

tax are effective for gasoline removed during the period beginning

seven days after the date of enactment and ending after September

30, 1997. The provision reinstating the general aviation jet fuel excise tax is effective for fuels sold by producers during the same period. Floor stocks taxes are imposed on these fuels held beyond the

removal or producer level on the date which is seven days after the

date of enactment.

The provisions relating to transfer of receipts to the Airport

Trust Fund and the modification of the Treasury Department’s excise tax deposit regulations are effective on the date of enactment.

Consistent with Treasury Notice 97-15, described above, the modification to the Treasury Department’s excise tax deposit regulations will not affect deposits of taxes imposed during the fourth

quarter of 1996; those deposits will continue to be made under the

Treasury Department regulations as in effect when liability for the

taxes arose.

III. VOTE OF THE COMMITTEE

In compliance with clause 2(l)(2)(B) of rule XI of the Rules of the

House of Representatives, the following statement is made concerning the vote on the motion to report the bill. The bill (H.R. 668)

was ordered favorably reported, without amendment, by voice vote

on February 12, 1997, with a quorum present.

IV. BUDGET EFFECTS OF THE BILL

A. Committee Estimates

In compliance with clause 7(a) of Rule XIII of the rules of the

House of Representatives, the following statement is made concerning the estimated budget effects of the bill as reported.

The bill, as reported, is estimated to increase net budget receipts

by $2.7 billion for fiscal years 1997 and 1998. (See the following

revenue table.)
7

ESTIMATED BUDGET EFFECTS OF AN EXTENSION OF THE AIRPORT AND AIRWAY TRUST FUND EXCISE TAXES THROUGH SEPTEMBER 30, 1997; FISCAL YEARS 1997–2007

[In millions of dollars]

Provision Effective 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1997–02 1997–07

Extension of Airport and Airway Trust Fund excise taxes through 9/30/97 ... tp7data DOE 2,730 ¥54 .......... .......... .......... .......... .......... .......... .......... .......... .......... 2,676 2,676

Note. Details may not add to totals due to rounding.Legend for ‘‘Effective’’ column: tp7data DOE=tickets purchased 7 days after date of enactment for travel 7 days after date of enactment
8

B. Budget Authority and Tax Expenditures

Budget authority

In compliance with subdivision (B) of clause 2(l)(3) of rule XI of

the Rules of the House of Representatives, the Committee states

that the provisions of the bill as reported involve no new or increased budget authority.

Tax expenditures

In compliance with subdivision (B) of clause 2(l)(3) of rule XI of

the Rules of the House of Representatives, the Committee states

that the provisions of the bill as reported involve no new or increased tax expenditures.

C. Cost Estimate Prepared by the Congressional Budget

Office

In compliance with subdivision (C) of clause 2(l)(3) of rule XI of

the Rules of the House of Representatives, requiring cost estimate

prepared by the Congressional Budget Office, the Committee advises that the Congressional Budget Office has submitted the following statement on this bill.

U.S. CONGRESS,

CONGRESSIONAL BUDGET OFFICE,

Washington, DC, February 12, 1997.

Hon. BILL ARCHER,

Chairman, Committee on Ways and Means,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office and the

Joint Committee on Taxation (JCT) have reviewed H.R. 668, the

‘‘Airport and Airway Trust Fund Tax Reinstatement Act of 1997,’’

as ordered reported by the House Committee on Ways and Means

on February 12, 1997. H.R. 668 would reinstate the Airport and

Airway Trust Fund excise taxes through September 30, 1997. The

JCT estimates that this bill would increase governmental receipts

by $2.730 billion in fiscal year 1997 and would decrease revenues

by $0.054 billion in fiscal year 1998. The revenue effects of the bill

are summarized in the table below.

REVENUE EFFECTS OF THE AIRPORT AND AIRWAY TRUST FUND REINSTATEMENT ACT OF 1997

[By fiscal year, in billions of dollars]

1997 1998 1999 2000 2001 2002–07

Proposed changes .................................................. 2.730 ¥0.054 0.000 0.000 0.000 0.000

In accordance with the requirements of Public Law 104–4, the

Unfunded Mandates Reform Act of 1995, JCT has determined that

the bill contains an intergovernmental mandate. The provision to

reinstate the Airport and Airway Trust Fund excise taxes through

September 30, 1997, imposes a federal intergovernmental mandate

because State, local, and tribal governments will be required to pay

the requisite taxes for commercial air travel by their employees.

JCT estimates that the direct costs of complying with this federal
9

intergovernmental mandate will not exceed $50 million in any of

the first five fiscal years.

In addition, JCT has determined that the bill contains a federal

private sector mandate. The bill would impose direct costs on the

private sector of more than $100 million in fiscal year 1997. The

JCT estimates the direct mandate cost of the tax increase in the

bill would total no more than $2,730 million in 1997, as shown

below:

FEDERAL PRIVATE SECTOR MANDATES

[By fiscal year, in millions of dollars]

1997 1998 1999 2000 2001

Direct cost of tax increase ..................................... 2,730 ¥54 0 0 0

Section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985 sets up pay-as-you-go procedures for legislation affecting receipts or direct spending through 1998. Because the bill

would affect receipts, pay-as-you-go procedures would apply to the

bill. These effects are summarized in the table below.

PAY-AS-YOU-GO CONSIDERATIONS

[By fiscal year, in millions of dollars]

1997 1998

Changes in receipts ..................................................................................................... 2,730 ¥54

Changes in outlays ...................................................................................................... (1) Not applicable

If you wish further details, please feel free to contact me or your

staff may wish to contact Stephanie Weiner.

Sincerely,

JUNE E. O’NEILL, Director.

V. OTHER MATTERS TO BE DISCUSSED UNDER THE

RULES OF THE HOUSE

A. Committee Oversight Findings and Recommendations

With respect to subdivision (A) of clause 2(l)(3) of rule XI of the

Rules of the House of Representatives (relating to oversight findings), the Committee advises that it was the result of the Committee’s oversight activities concerning the status of the balance of the

Airport Trust Fund and the need for expeditious reinstatement of

the existing Airport Trust Fund excise taxes to provide adequate

funding during fiscal year 1997 for the operations and capital programs of the FAA that the Committee concluded that it is appropriate to enact the provisions contained in the bill as reported.

The Committee on Ways and Means held a public hearing on this

subject on February 5, 1997.

B. Summary of Findings and Recommendations of the

Committee on Government Reform and Oversight

With respect to subdivision (D) of clause 2(l)(3) of rule XI of the

Rules of the House of Representatives, the Committee advises that

no oversight findings or recommendations have been submitted to
10

this Committee by the Committee on Government Reform and

Oversight with respect to the provisions contained in the bill.

C. Constitutional Authority Statement

With respect to clause 2(l)(4) of rule XI of the Rules of the House

of Representatives (relating to Constitutional Authority), the Committee states that the Committee’s action in reporting this bill is

derived from Article I of the Constitution, Section 7 (‘‘All bills for

raising revenue shall originate in the House of Representatives’’)

and Section 8 (‘‘The Congress shall have power to lay and collect

taxes, duties, imposts and excises, to pay the debts * * * of the

United States’’).

D. Information Relating to Unfunded Mandates

This information is provided in accordance with section 423 of

the Unfunded Mandates Act of 1995 (P.L. 104–4).

The Committee has determined that the provisions to extend the

Airport and Airway Trust Fund excise taxes through September 30,

1997, impose a Federal mandate on the private sector and a Federal intergovernmental mandate. The costs required to comply with

the Federal private sector mandate generally are no greater than

the revenue estimate for the provisions. The provisions enable the

FAA to avoid possible shutdown of its capital programs and to finance the agency’s activities and programs at least through the end

of the 1997 fiscal year. The Committee believes these benefits of

the provisions are greater than the costs required to comply with

the Federal mandates contained in the bill.

The provisions to reinstate the Airport and Airway Trust Fund

taxes through September 30, 1997, impose a Federal intergovernmental mandate because State, local, and tribal governments will

be required to pay the requisite excise taxes for commercial air

travel by State, local, and tribal government employees. The staff

of the Joint Committee on Taxation estimates that the direct costs

of complying with this Federal intergovernmental mandate will not

exceed $50,000,000 in either the first fiscal year or in any one of

the 4 fiscal years following the first fiscal year. The Committee intends that the Federal intergovernmental mandate be unfunded because the Airport and Airway Trust Fund excise taxes are intended

to fund the maintenance of U.S. airports and airways and the Committee believes that it is appropriate for State, local, and tribal governments to continue to bear their allocable share of the responsibility for such funding.

The provisions reinstating the Airport and Airway Trust Fund

excise taxes are imposed both on the private sector and on State,

local, and tribal governments and, thus, do not affect the competitive balance between such governments and the private sector.

E. Applicability of House rule XXI5(c)

Rule XXI5(c) of the Rules of the House of Representatives provides, in part, that ‘‘No bill or joint resolution, amendment, or conference report carrying a Federal income tax rate increase shall be

considered as passed or agreed to unless so determined by a vote

of not less than three-fifths of the Members.’’ The Committee has
11

carefully reviewed the provisions of the bill, and states that the

provisions of the bill do not involve any Federal income tax rate increase within the meaning of the rule (as the bill only concerns reinstatement of prior-law Airport Trust Fund excise taxes and

transfers of such tax revenues to the Airport Trust Fund).

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS

REPORTED

In compliance with clause 3 of rule XIII of the Rules of the House

of Representatives, changes in existing law made by the bill, as reported, are shown as follows (existing law proposed to be omitted

is enclosed in black brackets, new matter is printed in italic, existing law in which no change is proposed is shown in roman):

INTERNAL REVENUE CODE OF 1986

* * * * * * *

Subtitle D—Miscellaneous Excise Taxes

* * * * * * *

CHAPTER 31—RETAIL EXCISE TAXES

* * * * * * *

Subchapter B—Special Fuels

* * * * * * *

SEC. 4041. IMPOSITION OF TAX.

(a) * * *

* * * * * * *

(c) NONCOMMERCIAL AVIATION.— (1) * * *

* * * * * * *

ø(3) TERMINATION.—The taxes imposed by paragraph (1)

shall apply during the period beginning on September 1, 1982,

and ending on December 31, 1995, and during the period beginning on the date which is 7 calendar days after the date of

the enactment of the Small Business Job Protection Act of

1996 and ending on December 31, 1996. The termination under

the preceding sentence shall not apply to so much of the tax

imposed by paragraph (1) as does not exceed 4.3 cents per

gallon.¿

(3) TERMINATION.—The rate of the taxes imposed by

paragraph (1) shall be 4.3 cents per gallon—

(A) after December 31, 1996, and before the date which

is 7 days after the date of the enactment of the Airport and

Airway Trust Fund Tax Reinstatement Act of 1997, and

(B) after September 30, 1997.

* * * * * * *
12

CHAPTER 32—MANUFACTURERS EXCISE

TAXES

* * * * * * *

Subchapter A—Automotive and Related Items

* * * * * * *

PART III—PETROLEUM PRODUCTS

* * * * * * *

Subpart A—Gasoline and Diesel Fuel

* * * * * * *

SEC. 4081. IMPOSITION OF TAX.

(a) * * *

* * * * * * *

(d) TERMINATION.—

ø(1) IN GENERAL.—On and after October 1, 1999, the rates

of tax specified in clauses (i) and (iii) of subsection (a)(2)(A)

(other than the tax on aviation gasoline) shall be 4.3 cents per

gallon.

ø(2) AVIATION GASOLINE.—On and after January 1, 1997, the

rate specified in subsection (a)(2)(A)(ii) shall be 4.3 cents per

gallon.¿

(1) IN GENERAL.—The rates of tax specified in clauses (i) and

(iii) of subsection (a)(2)(A) shall be 4.3 cents per gallon after

September 30, 1999.

(2) AVIATION GASOLINE.—The rate of tax specified in

subsection (a)(2)(A)(ii) shall be 4.3 cents per gallon—

(A) after December 31, 1996, and before the date which

is 7 days after the date of the enactment of the Airport and

Airway Trust Fund Tax Reinstatement Act of 1997, and

(B) after September 30, 1997.

(3) LEAKING UNDERGROUND STORAGE TANK TRUST FUND

FINANCING RATE.—The Leaking Underground Storage Tank

Trust Fund financing rate under subsection (a)(2) shall not

apply after December 31, 1995.

ø(3) AVIATION GASOLINE.—After December 31, 1996, the rate

of tax specified in subsection (a)(2)(A)(i) on aviation gasoline

shall be 4.3 cents per gallon.¿

* * * * * * *

Subpart B—Aviation Fuel

* * * * * * *

SEC. 4091. IMPOSITION OF TAX.

(a) * * *

(b) RATE OF TAX.— (1) * * *

* * * * * * *
13

(3) TERMINATION.—

ø(A) The rate of tax specified in paragraph (1) shall be

4.3 cents per gallon—

ø(i) after December 31, 1995, and before the date

which is 7 calendar days after the date of the

enactment of the Small Business Job Protection Act of

1996, and

ø(ii) after December 31, 1996.¿

(A) The rate of tax specified in paragraph (1) shall be 4.3

cents per gallon—

(i) after December 31, 1996, and before the date

which is 7 days after the date of the enactment of the

Airport and Airway Trust Fund Tax Reinstatement Act

of 1997, and

(ii) after September 30, 1997.

* * * * * * *

CHAPTER 33—FACILITIES AND SERVICES

* * * * * * *

Subchapter C—Transportation By Air

* * * * * * *

PART I—PERSONS

* * * * * * *

SEC. 4261. IMPOSITION OF TAX.

(a) * * *

* * * * * * *

ø(g) TERMINATION.—The taxes imposed by this section shall

apply with respect to transportation beginning after August 31,

1982, and before January 1, 1996, and to transportation beginning

on or after the date which is 7 calendar days after the date of the

enactment of the Small Business Job Protection Act of 1996 and

before January 1, 1997.¿

(g) APPLICATION OF TAXES.—

(1) IN GENERAL.—The taxes imposed by this section shall

apply to—

(A) transportation beginning during the period—

(i) beginning on the 7th day after the date of the enactment of the Airport and Airway Trust Fund Tax Reinstatement Act of 1997, and

(ii) ending on September 30, 1997, and

(B) amounts paid during such period for transportation

beginning after such period.

(2) REFUNDS.—If, as of the date any transportation begins,

the taxes imposed by this section would not have applied to

such transportation if paid for on such date, any tax paid
14

under paragraph (1)(B) with respect to such transportation

shall be treated as an overpayment.

* * * * * * *

PART II—PROPERTY

* * * * * * *

SEC. 4271. IMPOSITION OF TAX.

(a) * * *

* * * * * * *

ø(d) TERMINATION.—The tax imposed by subsection (a) shall

apply with respect to transportation beginning after August 31,

1982, and before January 1, 1996, and to transportation beginning

on or after the date which is 7 calendar days after the date of the

enactment of the Small Business Job Protection Act of 1996 and

before January 1, 1997.¿

(d) APPLICATION OF TAX.—

(1) IN GENERAL.—The tax imposed by subsection (a) shall

apply to—

(A) transportation beginning during the period—

(i) beginning on the 7th day after the date of the enactment of the Airport and Airway Trust Fund Tax Reinstatement Act of 1997, and

(ii) ending on September 30, 1997, and

(B) amounts paid during such period for transportation

beginning after such period.

(2) REFUNDS.—If, as of the date any transportation begins,

the taxes imposed by this section would not have applied to

such transportation if paid for on such date, any tax paid

under paragraph (1)(B) with respect to such transportation

shall be treated as an overpayment.

* * * * * * *

Subtitle H—Financing of Presidential

Election Campaigns

* * * * * * *

CHAPTER 98—TRUST FUND CODE

* * * * * * *

Subchapter A—Establishment of Trust Funds

* * * * * * *

SEC. 9502. AIRPORT AND AIRWAY TRUST FUND.

(a) * * *

ø(b) TRANSFER TO AIRPORT AND AIRWAY TRUST FUND OF

AMOUNTS EQUIVALENT TO CERTAIN TAXES.—There is hereby appropriated to the Airport and Airway Trust Fund—
15

ø(1) amounts equivalent to the taxes received in the Treasury after August 31, 1982, and before January 1, 1997, under

subsections (c) and (e) of section 4041 (taxes on aviation fuel)

and under sections 4261 and 4271 (taxes on transportation by

air);

ø(2) amounts determined by the Secretary of the Treasury to

be equivalent to the taxes received in the Treasury after

August 31, 1982, and before January 1, 1997, under section

4081 (to the extent of 15 cents per gallon), with respect to gasoline used in aircraft;

ø(3) amounts determined by the Secretary to be equivalent

to the taxes received in the Treasury before January 1, 1997,

under section 4091 (to the extent attributable to the Airport

and Airway Trust Fund financing rate); and

ø(4) amounts determined by the Secretary of the Treasury to

be equivalent to the taxes received in the Treasury after

August 31, 1982, and before January 1, 1997, under section

4071, with respect to tires of the types used on aircraft.¿

(b) TRANSFERS TO AIRPORT AND AIRWAY TRUST FUND.—There are

hereby appropriated to the Airport and Airway Trust Fund amounts

equivalent to—

(1) the taxes received in the Treasury under—

(A) subsections (c) and (e) of section 4041 (relating to

aviation fuels),

(B) sections 4261 and 4271 (relating to transportation by

air),

(C) section 4081 (relating to gasoline) with respect to

aviation gasoline (to the extent that the rate of the tax on

such gasoline exceeds 4.3 cents per gallon), and

(D) section 4091 (relating to aviation fuel) to the extent

attributable to the Airport and Airway Trust Fund

financing rate, and

(2) the amounts determined by the Secretary of the Treasury

to be equivalent to the amounts of civil penalties collected under

section 47107(n) of title 49, United States Code.

* * * * * * *

(f) DEFINITION OF AIRPORT AND AIRWAY TRUST FUND FINANCING

RATE.—For purposes of this section—

(1) * * *

* * * * * * *

ø(3) TERMINATION.—Notwithstanding the preceding provisions of this subsection, the Airport and Airway Trust Fund

financing rate shall be zero with respect to—

ø(A) taxes imposed after December 31, 1995, and before

the date which is 7 calendar days after the date of the enactment of the Small Business Job Protection Act of 1996

and

ø(B) taxes imposed after December 31, 1996.¿

(3) TERMINATION.—Notwithstanding the preceding provisions

of this subsection, the Airport and Airway Trust Fund

financing rate shall be zero with respect to taxes imposed
16

during any period that the rate of the tax imposed by section

4091(b)(1) is 4.3 cents per gallon.

* * * * * * *

Æ