II

104TH CONGRESS

2D SESSION S. 1971

To empower States with authority for most taxing and spending for highway

programs and mass transit programs, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 18, 1996

Mr. MACK (for himself, Mr. DEWINE, Mr. NICKLES, Mr. THURMOND, Mr.

GRAHAM, Mr. INHOFF, Mr. COATS, Mr. FAIRCLOTH, and Mr. ABRAHAM)

introduced the following bill; which was read twice and referred to the

Committee on Finance

A BILL

To empower States with authority for most taxing and

spending for highway programs and mass transit programs, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Transportation

5 Empowerment Act’’.

6 SEC. 2. FINDINGS AND PURPOSES.

7 (a) FINDINGS.—Congress finds that—

8 (1) it is the policy of the United States to pro9 mote a modern, efficient, safe, and environmentally
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1 sound transportation network, in order to maintain

2 and improve the quality of life in the United States,

3 and to enable the domestic industries of the United

4 States to be competitive in the world marketplace;

5 (2)(A) Federal transportation policies no longer

6 adequately serve the transportation needs of the

7 United States;

8 (B) Federal regulations, micromanagement, and

9 earmarks cost States billions of dollars annually and

10 hinder the ability of States to maintain, modernize,

11 and expand their transportation systems; and

12 (C) the legacy of our federally run transpor13 tation system will be an infrastructure that many

14 acknowledge our present system cannot support and

15 will not meet the needs of growing populations;

16 (3)(A) maintaining a modern and efficient

17 transportation system does not require Federal

18 micromanagement of States’ transportation dollars;

19 (B) States have the financial and technical

20 abilities necessary to maintain and improve their

21 transportation without paternalistic Federal over22 sight; and

23 (C) States have the incentives and ability to

24 maintain the quality, safety, and continuity of all
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1 roads, including routes on the Interstate System;

2 and

3 (4)(A) with the completion of the Interstate

4 System, the transportation infrastructure needs of

5 the United States have shifted to maintaining, mod6 ernizing, and expanding the Interstate System; and

7 (B) States are faced with billions of dollars in

8 unmet maintenance and modernization needs and a

9 highly restrictive and costly Federal program.

10 (b) PURPOSES.—The purposes of this Act are—

11 (1) to return primary transportation program

12 responsibility and taxing authority to the States so

13 as to—

14 (A) free States’ transportation dollars from

15 Federal micromanagement, earmarking, and

16 budgetary pressures; and

17 (B) enable decisions regarding which infra18 structure projects will be built, how they will be

19 financed, and how they will be regulated to be

20 made by persons best able to make the deci21 sions: people who drive on the highways;

22 (2) through interstate compacts and in conjunc23 tion with metropolitan planning organizations estab24 lished under section 134 of title 23, United States

25 Code, to permit States to jointly plan and finance
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1 infrastructure improvements and ensure quality and

2 continuity for infrastructure improvements without

3 mandates from the Federal Government; and

4 (3) in carrying out paragraphs (1) and (2), to

5 reduce Federal spending and receipts by a commen6 surate amount in order to ensure deficit neutrality.

7 SEC. 3. CONTINUATION OF FUNDING FOR CORE HIGHWAY

8 PROGRAMS.

9 (a) IN GENERAL.—

10 (1) FUNDING.—Section 1003 of the Intermodal

11 Surface Transportation Efficiency Act of 1991

12 (Public Law 102–240; 105 Stat. 1918) is amended

13 by striking subsection (a) and inserting the following

14 new subsection:

15 ‘‘(a) HIGHWAY TRUST FUND.—For the purpose of

16 carrying out title 23, United States Code, the following

17 sums are authorized to be appropriated out of the High18 way Trust Fund:

19 ‘‘(1) INTERSTATE MAINTENANCE PROGRAM.—

20 For the Interstate maintenance program under sec21 tion 119 of the title, $2,431,000,000 for fiscal year

22 1992, $2,913,000,000 for fiscal year 1993,

23 $2,914,000,000 for each of fiscal years 1994

24 through 1997, $2,989,000,000 for fiscal year 1998,

25 $3,083,000,000 for fiscal year 1999,
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1 $3,170,000,000 for fiscal year 2000, and

2 $3,259,000,000 for fiscal year 2001.

3 ‘‘(2) BRIDGE PROGRAM.—

4 ‘‘(A) FULL BRIDGE PROGRAM.—For the

5 bridge program under section 144 of the title

6 (as in effect on the day before the date of en7 actment of the Transportation Empowerment

8 Act), $2,288,000,000 for fiscal year 1992,

9 $2,762,000,000 for each of fiscal years 1993

10 through 1995, and $2,763,000,000 for each of

11 fiscal years 1996 and 1997.

12 ‘‘(B) INTERSTATE AND INDIAN RESERVA13 TION BRIDGE PROGRAM.—For the Interstate

14 and Indian reservation bridge program under

15 section 144 of the title, $1,183,000,000 for fis16 cal year 1998, $1,217,000,000 for fiscal year

17 1999, $1,251,000,000 for fiscal year 2000, and

18 $1,286,000,000 for fiscal year 2001.

19 ‘‘(3) FEDERAL LANDS HIGHWAYS PROGRAM.—

20 ‘‘(A) INDIAN RESERVATION ROADS.—For

21 Indian reservation roads under section 204 of

22 the title, $159,000,000 for fiscal year 1992,

23 $191,000,000 for each of fiscal years 1993

24 through 1997, $197,000,000 for fiscal year

25 1998, $202,000,000 for fiscal year 1999,
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1 $208,000,000 for fiscal year 2000, and

2 $214,000,000 for fiscal year 2001.

3 ‘‘(B) PUBLIC LANDS HIGHWAYS.—For

4 public lands highways under section 204 of the

5 title, $143,000,000 for fiscal year 1992,

6 $171,000,000 for each of fiscal years 1993

7 through 1995, $172,000,000 for each of fiscal

8 years 1996 and 1997, $177,000,000 for fiscal

9 year 1998, $182,000,000 for fiscal year 1999,

10 $187,000,000 for fiscal year 2000, and

11 $192,000,000 for fiscal year 2001.

12 ‘‘(C) PARKWAYS AND PARK ROADS.—For

13 parkways and park roads under section 204 of

14 the title, $69,000,000 for fiscal year 1992,

15 $83,000,000 for each of fiscal years 1993

16 through 1995, $84,000,000 for each of fiscal

17 years 1996 and 1997, $86,000,000 for fiscal

18 year 1998, $89,000,000 for fiscal year 1999,

19 $91,000,000 for fiscal year 2000, and

20 $94,000,000 for fiscal year 2001.’’.

21 (2) FEDERAL-AID SYSTEM.—Section 103(a) of

22 title 23, United States Code, is amended by striking

23 ‘‘systems are the Interstate System and the National

24 Highway System’’ and inserting ‘‘system is the

25 Interstate System’’.
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1 (3) INTERSTATE MAINTENANCE PROGRAM.—

2 Section 119(f) of title 23, United States Code, is

3 amended—

4 (A) in paragraph (1), by striking ‘‘If’’ and

5 inserting ‘‘For each of fiscal years 1991

6 through 1997, if’’; and

7 (B) in paragraph (2)(B), by inserting

8 ‘‘through fiscal year 1997’’ after ‘‘thereafter’’.

9 (4) INTERSTATE BRIDGE PROGRAM.—Section

10 144 of title 23, United States Code, is amended—

11 (A) in subsection (d)—

12 (i) by inserting ‘‘on the Federal-aid

13 system or described in subsection (c)(3)’’

14 after ‘‘highway bridge’’ each place it ap15 pears; and

16 (ii) by inserting ‘‘on the Federal-aid

17 system or described in subsection (c)(3)’’

18 after ‘‘highway bridges’’ each place it ap19 pears;

20 (B) in the second sentence of subsection

21 (e)—

22 (i) in paragraph (1), by adding ‘‘and’’

23 at the end;
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1 (ii) in paragraph (2), by striking the

2 comma at the end and inserting a period;

3 and

4 (iii) by striking paragraphs (3) and

5 (4);

6 (C) in the first sentence of subsection (l),

7 by inserting ‘‘on the Federal-aid system or de8 scribed in subsection (c)(3)’’ after ‘‘any

9 bridge’’;

10 (D) in subsection (m), by inserting ‘‘on the

11 Federal-aid system or described in subsection

12 (c)(3)’’ after ‘‘any bridge’’; and

13 (E) in the first sentence of subsection (n),

14 by inserting ‘‘for each of fiscal years 1991

15 through 1997,’’ after ‘‘of law,’’.

16 (5) NATIONAL DEFENSE HIGHWAYS.—Section

17 311 of title 23, United States Code, is amended—

18 (A) in the first sentence, by striking

19 ‘‘under subsection (a) of section 104 of this

20 title’’ and inserting ‘‘to carry out this section’’;

21 and

22 (B) by striking the second sentence.

23 (6) TERMINATION OF MINIMUM ALLOCATION.—

24 Section 157 of title 23, United States Code, is

25 amended—
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1 (A) in subsection (a)(4), by striking ‘‘fiscal

2 year 1992 and each fiscal year thereafter’’ and

3 inserting ‘‘each of fiscal years 1992 through

4 1997’’; and

5 (B) in subsection (e), by striking ‘‘the fis6 cal years ending on or after September 30,

7 1983’’ and inserting ‘‘fiscal years 1983 through

8 1997’’.

9 (b) EXPENDITURES FROM HIGHWAY TRUST

10 FUND.—

11 (1) EXPENDITURES FOR CORE PROGRAMS.—

12 Subsection (c) of section 9503 of the Internal Reve13 nue Code of 1986 (relating to expenditures from

14 Highway Trust Fund) is amended—

15 (A) by striking ‘‘October 1, 1997’’ each

16 place it appears in paragraphs (1), (4)(A)(i),

17 and (5)(A) and inserting ‘‘October 1, 2001’’;

18 (B) by striking ‘‘as in effect on the date of

19 the enactment of the Intermodal Surface Trans20 portation Efficiency Act of 1991’’ in paragraph

21 (1) and inserting ‘‘as in effect on the date of

22 the enactment of the Transportation

23 Empowerment Act’’;
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1 (C) by striking ‘‘July 1, 2000’’ each place

2 it appears in paragraphs (2)(A)(i) and (3) and

3 inserting ‘‘July 1, 2002’’;

4 (D) by striking ‘‘October 1, 1999’’ in para5 graph (2)(A)(ii) and inserting ‘‘October 1,

6 2001’’;

7 (E) by striking ‘‘January 1, 1999’’ in

8 paragraph (2)(A)(ii) and inserting ‘‘January 1,

9 2001’’; and

10 (F) by striking ‘‘September 30, 1997’’ in

11 paragraph (6)(E) and inserting ‘‘September 30,

12 2001’’.

13 (2) AMOUNTS AVAILABLE FOR CORE PROGRAM

14 EXPENDITURES.—Section 9503 of such Code (relat15 ing to the Highway Trust Fund) is amended by add16 ing at the end the following new subsection:

17 ‘‘(g) CORE PROGRAMS FINANCING RATE.—For pur18 poses of this section—

19 ‘‘(1) IN GENERAL.—Except as provided in para20 graph (2), in the case of gasoline, special motor

21 fuels, and diesel fuel, the core programs financing

22 rate is—

23 ‘‘(A) after September 30, 1997, and before

24 October 1, 1998, so much of the Highway
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1 Trust Fund financing rate as does not exceed

2 7 cents per gallon,

3 ‘‘(B) after September 30, 1998, and before

4 October 1, 1999, so much of the Highway

5 Trust Fund financing rate as does not exceed

6 2 cents per gallon, and

7 ‘‘(C) after September 30, 1999, the High8 way Trust Fund financing rate.

9 ‘‘(2) APPLICATION OF RATE.—In the case of

10 fuels used as described in paragraph (4)(D), (5)(B),

11 or (6)(D) of subsection (c), the core programs fi12 nancing rate is zero.’’.

13 (c) TERMINATION OF TRANSFERS TO MASS TRANSIT

14 ACCOUNT.—

15 (1) IN GENERAL.—Paragraph (2) of section

16 9503(e) of such Code (relating to Mass Transit Ac17 count) is amended by striking ‘‘2 cents’’ and insert18 ing ‘‘2 cents (zero, on and after October 1, 1997)’’.

19 (2) AUTHORIZATION TO EXPEND REMAINING

20 BALANCES IN ACCOUNT.—Paragraph (3) of section

21 9503(e) of such Code is amended by striking ‘‘before

22 October 1, 1997’’.

23 (d) EFFECTIVE DATE.—The amendments made by

24 this section shall take effect on October 1, 1997.
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1 SEC. 4. INFRASTRUCTURE SPECIAL ASSISTANCE FUND.

2 (a) BALANCE OF CORE PROGRAMS FINANCING RATE

3 DEPOSITED IN FUND.—

4 (1) IN GENERAL.—Section 9503 of the Internal

5 Revenue Code of 1986, as amended by section

6 3(b)(2), is amended by adding at the end the follow7 ing new subsection:

8 ‘‘(h) ESTABLISHMENT OF INFRASTRUCTURE SPE9 CIAL ASSISTANCE FUND.—

10 ‘‘(1) CREATION OF FUND.—There is established

11 in the Highway Trust Fund a separate fund to be

12 known as the ‘Infrastructure Special Assistance

13 Fund’ consisting of such amounts as may be trans14 ferred or credited to the Infrastructure Special As15 sistance Fund as provided in this subsection or sec16 tion 9602(b).

17 ‘‘(2) TRANSFERS TO INFRASTRUCTURE SPECIAL

18 ASSISTANCE FUND.—On the first day of each fiscal

19 year, the Secretary, in consultation with the Sec20 retary of Transportation, shall determine the excess

21 (if any) of—

22 ‘‘(A) the sum of—

23 ‘‘(i) the amounts appropriated in such

24 fiscal year to the Highway Trust Fund

25 under subsection (b) which are attributable
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1 to the core programs financing rate for

2 such year, plus

3 ‘‘(ii) the amounts appropriated in

4 such fiscal year to the Highway Trust

5 Fund under subsection (b) which are at6 tributable to taxes under sections 4051,

7 4061, 4071, and 4481 for such year, plus

8 ‘‘(iii) the amount of the total unobli9 gated balance in the Highway Trust Fund

10 for such fiscal year, over

11 ‘‘(B) the amount appropriated under sub12 section (c)(1) for such fiscal year,

13 and shall transfer such excess to the Infrastructure

14 Special Assistance Fund.

15 ‘‘(3) EXPENDITURES FROM FUND.—Amounts in

16 the Infrastructure Special Assistance Fund shall be

17 available, as provided by appropriation Acts, for

18 making expenditures under transportation-related

19 programs as authorized by law.’’.

20 (2) EFFECTIVE DATE.—The amendment made

21 by this subsection shall take effect on October 1,

22 1997.

23 (b) FUNDING OF OTHER PROGRAMS.—

24 (1) IN GENERAL.—Not later than 90 days after

25 the date of enactment of this Act, the Secretary of
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1 Transportation shall submit a report to Congress

2 proposing which programs established under titles

3 23 and 49, United States Code, and the Intermodal

4 Surface Transportation Efficiency Act of 1991

5 (Public Law 102–240) that are not funded under

6 the amendments made by this Act should be funded

7 for fiscal year 1998 and later fiscal years using

8 amounts in the Infrastructure Special Assistance

9 Fund established by section 9503(h) of the Internal

10 Revenue Code of 1986 (as added by subsection (a)).

11 (2) TYPES OF PROGRAMS.—Programs for which

12 funding may be proposed under paragraph (1) in13 clude—

14 (A) safety programs;

15 (B) research and development programs;

16 and

17 (C) projects for highway improvements

18 strategically important to the national defense

19 under section 311 of title 23, United States

20 Code.

21 SEC. 5. RETURN OF EXCESS TAX RECEIPTS TO STATES.

22 (a) IN GENERAL.—Section 9503(c) of the Internal

23 Revenue Code of 1986 is amended by adding at the end

24 the following new paragraph:
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1 ‘‘(7) RETURN OF EXCESS TAX RECEIPTS TO

2 STATES FOR TRANSPORTATION PURPOSES.—On the

3 first day of each of fiscal years 1998 and 1999, the

4 Secretary, in consultation with the Secretary of the

5 Transportation, shall—

6 ‘‘(A) determine the excess (if any) of—

7 ‘‘(i) the amounts appropriated in such

8 fiscal year to the Highway Trust Fund

9 under subsection (b) which are equivalent

10 to the taxes attributable to the excess of—

11 ‘‘(I) the Highway Trust Fund fi12 nancing rate for such year, over

13 ‘‘(II) the core programs financing

14 rate for such year, over

15 ‘‘(ii) the amounts so appropriated

16 which are equivalent to the taxes described

17 in paragraphs (4)(D), (5)(B), and (6)(D),

18 and

19 ‘‘(B) allocate the amount determined under

20 subparagraph (A) among the States (as defined

21 in section 101 of title 23, United States Code)

22 so that—

23 ‘‘(i) the percentage of that amount al24 located to each State, is equal to
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1 ‘‘(ii) the percentage of the amount de2 termined under subparagraph (A)(i) paid

3 into the Highway Trust Fund in the latest

4 fiscal year for which such data are avail5 able that is attributable to highway users

6 in the State.’’.

7 (b) EFFECTIVE DATE.—The amendment made by

8 this section shall take effect on October 1, 1997.

9 SEC. 6. INTERSTATE TRANSPORTATION COMPACTS.

10 (a) CONSENT OF CONGRESS.—In order to increase

11 public investment, attract needed private investment, and

12 promote an intermodal transportation network, Congress

13 grants consent to States to enter into interstate compacts

14 to—

15 (1) promote the continuity, quality, and safety

16 of the Interstate System;

17 (2) develop programs to promote and fund safe18 ty initiatives and establish safety standards for the

19 States that are parties to the compact (referred to

20 in this section as ‘‘participating States’’);

21 (3) conduct long-term planning for transpor22 tation infrastructure in the participating States;

23 (4) develop transportation infrastructure design

24 and construction standards to be used by the partici25 pating States; and
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1 (5) establish transportation infrastructure

2 banks to promote regional or other multistate invest3 ment in transportation infrastructure.

4 (b) FINANCING.—An interstate compact established

5 by States under subsection (a) to carry out a transpor6 tation project, program, or activity may provide that, in

7 order to carry out the compact, the States may—

8 (1) accept contributions from a unit of State or

9 local government or a person;

10 (2) use any Federal or State funds made avail11 able for that type of transportation project, pro12 gram, or activity;

13 (3) on such terms and conditions as the States

14 consider advisable—

15 (A) borrow money on a short-term basis

16 and issue notes for the borrowing; and

17 (B) issue bonds; and

18 (4) obtain financing by other means permitted

19 under Federal or State law, including transportation

20 infrastructure banks under subsection (c).

21 (c) INFRASTRUCTURE BANKS.—

22 (1) IN GENERAL.—A transportation infrastruc23 ture bank established under an interstate compact

24 under subsection (a)(5) (referred to in this sub25 section as an ‘‘infrastructure bank’’) may—
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1 (A) make loans;

2 (B) under the joint or separate authority

3 of the participating States with respect to the

4 infrastructure bank, issue such debt as the in5 frastructure bank and the States determine ap6 propriate; and

7 (C) provide other assistance to public or

8 private entities constructing, or proposing to

9 construct or initiate, transportation projects,

10 programs, or activities.

11 (2) FORMS OF ASSISTANCE.—

12 (A) IN GENERAL.—An infrastructure bank

13 may make a loan or provide other assistance

14 described in subparagraph (C) to a public or

15 private entity in an amount equal to all or part

16 of the construction cost, capital cost, or initi17 ation cost of a transportation project, program,

18 or activity.

19 (B) SUBORDINATION OF ASSISTANCE.—

20 The amount of any loan or other assistance de21 scribed in subparagraph (C) that is received for

22 a transportation project, program, or activity

23 under this section may be subordinated to any

24 other debt financing for the project, program,

25 or activity.
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1 (C) OTHER ASSISTANCE.—Other assist2 ance referred to in subparagraphs (A) and (B)

3 includes any use of funds for the purpose of—

4 (i) credit enhancement;

5 (ii) a capital reserve for bond or debt

6 instrument financing;

7 (iii) bond or debt instrument financ8 ing issuance costs;

9 (iv) bond or debt issuance financing

10 insurance;

11 (v) subsidization of interest rates;

12 (vi) letters of credit;

13 (vii) any credit instrument;

14 (viii) bond or debt financing instru15 ment security; and

16 (ix) any other form of debt financing

17 that relates to the qualifying project, pro18 gram, or activity.

19 (3) NO OBLIGATION OF UNITED STATES.—

20 (A) IN GENERAL.—The approval under

21 this section of an infrastructure bank does not

22 constitute a commitment, guarantee, or obliga23 tion on the part of the United States to any

24 third party with respect to any security or debt

25 financing instrument issued by the bank. No
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1 third party shall have any right against the

2 United States for payment solely by reason of

3 the approval.

4 (B) STATEMENT ON INSTRUMENT.—Any

5 security or debt financing instrument issued by

6 an infrastructure bank shall expressly state that

7 the security or instrument does not constitute a

8 commitment, guarantee, or obligation of the

9 United States.

10 (d) EFFECTIVE DATE.—This section shall take effect

11 on October 1, 1997.

12 SEC. 7. FEDERAL-AID FACILITY PRIVATIZATION.

13 (a) DEFINITIONS.—In this section:

14 (1) EXECUTIVE AGENCY.—The term ‘‘Executive

15 agency’’ has the meaning provided in section 105 of

16 title 5, United States Code.

17 (2) PRIVATIZATION.—The term ‘‘privatization’’

18 means the disposition or transfer of a transportation

19 infrastructure asset, whether by sale, lease, or simi20 lar arrangement, from a State or local government

21 to a private party.

22 (3) STATE OR LOCAL GOVERNMENT.—The term

23 ‘‘State or local government’’ means the government

24 of—

25 (A) any State;
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1 (B) the District of Columbia;

2 (C) any commonwealth, territory, or pos3 session of the United States;

4 (D) any county, municipality, city, town,

5 township, local public authority, school district,

6 special district, intrastate district, regional or

7 interstate government entity, council of govern8 ments, or agency or instrumentality of a local

9 government; or

10 (E) any federally recognized Indian tribe.

11 (4) TRANSPORTATION INFRASTRUCTURE

12 ASSET.—The term ‘‘transportation infrastructure

13 asset’’ means any transportation-related asset fi14 nanced in whole or in part by the Federal Govern15 ment, including a road, tunnel, or bridge, or mass

16 transit.

17 (b) PRIVATIZATION INITIATIVES BY STATE AND

18 LOCAL GOVERNMENTS.—The head of each Executive

19 agency shall—

20 (1) assist State and local governments in efforts

21 to privatize the transportation infrastructure assets

22 of the State and local governments; and

23 (2) subject to subsection (c), approve requests

24 from State and local governments to privatize trans-
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1 portation infrastructure assets and waive or modify

2 any grant condition.

3 (c) CRITERIA.—The head of an Executive agency

4 shall approve a request described in subsection (b)(2) if—

5 (1) the State or local government demonstrates

6 that a market mechanism, legally enforceable agree7 ment, or regulatory mechanism will ensure that the

8 transportation infrastructure asset will continue to

9 be used for the general objectives of the original

10 grant program (which shall not be considered to in11 clude every condition required for the grantee to

12 have obtained the original grant) that funded the

13 asset, so long as needed for those objectives; and

14 (2) the private party purchasing or leasing the

15 transportation infrastructure asset agrees to comply

16 with all applicable grant conditions.

17 (d) LACK OF OBLIGATION TO REPAY FEDERAL

18 GRANT FUNDS.—A State or local government shall have

19 no obligation to repay to any agency of the Federal Gov20 ernment any Federal grant funds received by the State

21 or local government in connection with a transportation

22 infrastructure asset that is privatized under this section.

23 (e) USE OF PROCEEDS.—

24 (1) IN GENERAL.—Subject to paragraph (2), a

25 State or local government may use proceeds from
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1 the privatization of a transportation infrastructure

2 asset to the extent permitted under applicable grant

3 conditions.

4 (2) RECOVERY OF CERTAIN COSTS.—Notwith5 standing any other provision of law, the State or

6 local government shall be permitted to recover from

7 the privatization of a transportation infrastructure

8 asset—

9 (A) the capital investment in the transpor10 tation infrastructure asset made by the State or

11 local government;

12 (B) an amount equal to the unreimbursed

13 operating expenses in the transportation infra14 structure asset paid by the State or local gov15 ernment; and

16 (C) a reasonable rate of return on the in17 vestment made under subparagraph (A) and ex18 penses paid under subparagraph (B).

19 SEC. 8. REDUCTION IN TAXES ON GASOLINE, DIESEL FUEL,

20 AND SPECIAL FUELS FUNDING HIGHWAY

21 TRUST FUND.

22 (a) IN GENERAL.—Section 4081(a)(2)(A) of the In23 ternal Revenue Code of 1986 (relating to rates of tax) is

24 amended—
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1 (1) by striking ‘‘18.3 cents’’ in clause (i) and

2 inserting ‘‘6.3 cents’’; and

3 (2) by striking ‘‘24.3 cents’’ in clause (ii) and

4 inserting ‘‘6.3 cents’’.

5 (b) SAME RATE FOR ALCOHOL FUELS.—

6 (1) IN GENERAL.—Paragraph (8) of section

7 4081(c) of the Internal Revenue Code of 1986 (re8 lating to taxable fuels mixed with alcohol) is amend9 ed by striking ‘‘September 30, 2000’’ and inserting

10 ‘‘September 30, 1999’’.

11 (2) CONFORMING AMENDMENTS.—

12 (A) Section 4041(b)(2)(C) of such Code is

13 amended to read as follows:

14 ‘‘(C) TERMINATION.—

15 ‘‘(i) IN GENERAL.—On and after Oc16 tober 1, 1999, subparagraph (A)(i) shall

17 not apply.

18 ‘‘(ii) LUST.—On and after October 1,

19 2000, subparagraph (A)(ii) shall not

20 apply.’’.

21 (B) Section 4041(k)(3) of such Code is

22 amended to read as follows:

23 ‘‘(3) TERMINATION.—
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1 ‘‘(A) IN GENERAL.—Paragraph (1)(A)

2 shall not apply to any sale or use after Septem3 ber 30, 1999.

4 ‘‘(B) AVIATION.—Subparagraphs (B) and

5 (C) of paragraph (1) shall not apply to any sale

6 or use after September 30, 2000.’’.

7 (C) Section 4041(m)(1)(A) of such Code is

8 amended by striking clauses (i) and (ii) and in9 serting the following new clauses:

10 ‘‘(i) 6.3 cents per gallon for the period

11 beginning after September 30, 1999, and

12 ending before October 1, 2001, and

13 ‘‘(ii) 4.3 cents per gallon after Sep14 tember 30, 2001, and’’.

15 (D) Section 9503(f) of such Code is

16 amended by striking paragraph (3) and redesig17 nating paragraph (4) as paragraph (3).

18 (c) REDUCTION IN HIGHWAY TRUST FUND FINANC19 ING RATE.—

20 (1) IN GENERAL.—Section 9503(f) of the Inter21 nal Revenue Code of 1986 (defining Highway Trust

22 Fund financing rate) is amended—

23 (A) by striking ‘‘11.5 cents per gallon (14

24 cents per gallon after September 30, 1995)’’ in
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1 paragraph (1)(A) and inserting ‘‘2 cents per

2 gallon’’; and

3 (B) by striking ‘‘17.5 cents per gallon (20

4 cents per gallon after September 30, 1995)’’ in

5 paragraph (1)(B) and inserting ‘‘2 cents per

6 gallon’’.

7 (2) CONFORMING AMENDMENTS.—

8 (A) Section 9503(f)(2)(B) of such Code is

9 amended by striking ‘‘3 cents’’ and inserting ‘‘2

10 cents’’.

11 (B) Section 9503(f)(2)(E) of such Code is

12 amended—

13 (i) by striking ‘‘11.5 cents’’ and in14 serting ‘‘2 cents’’; and

15 (ii) by striking ‘‘17.5 cents’’ and in16 serting ‘‘2 cents’’.

17 (C) Section 9503(f)(4) of such Code is

18 amended by striking ‘‘June 30, 2000’’ and in19 serting ‘‘September 30, 2001’’.

20 (d) ADDITIONAL CONFORMING AMENDMENTS.—

21 (1) Section 4041(a)(1)(C) of the Internal Reve22 nue Code of 1986 is amended—

23 (A) by striking ‘‘October 1, 1999’’ in

24 clause (ii)(II) and inserting October 1, 2001’’;
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1 (B) by striking ‘‘September 30, 1999’’ in

2 clause (ii)(III) and inserting September 30,

3 2001’’; and

4 (C) by striking ‘‘7.3 cents per gallon (4.3

5 cents per gallon after September 30, 1999)’’ in

6 clause (iii)(I) and inserting ‘‘6.3 cents per gal7 lon (4.3 cents per gallon after September 30,

8 2001)’’.

9 (2) Section 4081(d)(1) of such Code is amend10 ed by striking ‘‘October 1, 1999’’ and inserting ‘‘Oc11 tober 1, 2001’’.

12 (3) Section 6421(e)(2)(B)(iv) of such Code is

13 amended—

14 (A) by striking ‘‘January 1, 2000’’ in sub15 clause (I) and inserting ‘‘October 1, 2001’’; and

16 (B) by striking ‘‘December 31, 1999’’ in

17 subclause (II) and inserting ‘‘September 30,

18 2001’’.

19 (4) Section 6421(f)(3)(B) of such Code is

20 amended—

21 (A) by striking ‘‘October 1, 1999’’ in

22 clause (ii) and inserting October 1, 2001’’; and

23 (B) by striking ‘‘September 30, 1999’’ in

24 clause (iii) and inserting September 30, 2001’’.
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1 (5) Section 6427(b)(2)(A) of such Code is

2 amended by striking ‘‘7.4 cents’’ and inserting ‘‘1.9

3 cents’’.

4 (6) Section 6427(l)(3)(B) of such Code is

5 amended—

6 (A) by striking ‘‘October 1, 1999’’ in

7 clause (ii) and inserting October 1, 2001’’; and

8 (B) by striking ‘‘September 30, 1999’’ in

9 clause (iii) and inserting September 30, 2001’’.

10 (7) Subsection (b) of section 9503 of such Code

11 is amended—

12 (A) by striking ‘‘October 1, 1999’’ both

13 places it appears in paragraphs (1) and (2) and

14 inserting ‘‘October 1, 2001’’;

15 (B) by striking ‘‘OCTOBER 1, 1999’’ in the

16 heading of paragraph (2) and inserting ‘‘OCTO17 BER 1, 2001’’;

18 (C) by striking ‘‘after September 30, 1999,

19 and before July 1, 2000’’ in paragraph (2) and

20 inserting ‘‘after September 30, 2001, and be21 fore July 1, 2002’’; and

22 (D) by inserting ‘‘before October 1, 1999,’’

23 after ‘‘paragraph (1)’’ in paragraph (5).

24 (e) FLOOR STOCK REFUNDS.—

25 (1) IN GENERAL.—If—
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1 (A) before October 1, 1999, tax has been

2 imposed under section 4081 of the Internal

3 Revenue Code of 1986 on any liquid; and

4 (B) on such date such liquid is held by a

5 dealer and has not been used and is intended

6 for sale;

7 there shall be credited or refunded (without interest)

8 to the person who paid such tax (in this subsection

9 referred to as the ‘‘taxpayer’’) an amount equal to

10 the excess of the tax paid by the taxpayer over the

11 amount of such tax which would be imposed on such

12 liquid had the taxable event occurred on such date.

13 (2) TIME FOR FILING CLAIMS.—No credit or re14 fund shall be allowed or made under this subsection

15 unless—

16 (A) claim therefor is filed with the Sec17 retary of the Treasury before April 1, 2000;

18 and

19 (B) in any case where liquid is held by a

20 dealer (other than the taxpayer) on October 1,

21 1999—

22 (i) the dealer submits a request for re23 fund or credit to the taxpayer before Janu24 ary 1, 2000; and
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1 (ii) the taxpayer has repaid or agreed

2 to repay the amount so claimed to such

3 dealer or has obtained the written consent

4 of such dealer to the allowance of the cred5 it or the making of the refund.

6 (3) EXCEPTION FOR FUEL HELD IN RETAIL

7 STOCKS.—No credit or refund shall be allowed under

8 this subsection with respect to any liquid in retail

9 stocks held at the place where intended to be sold

10 at retail.

11 (4) DEFINITIONS.—For purposes of this sub12 section, the terms ‘‘dealer’’ and ‘‘held by a dealer’’

13 have the respective meanings given to such terms by

14 section 6412 of such Code; except that the term

15 ‘‘dealer’’ includes a producer.

16 (5) CERTAIN RULES TO APPLY.—Rules similar

17 to the rules of subsections (b) and (c) of section

18 6412 and sections 6206 and 6675 of such Code shall

19 apply for purposes of this subsection.

20 (f) EFFECTIVE DATE.—The amendments made by

21 this section shall apply to fuel removed after September

22 30, 1999.

23 SEC. 9. REPORT TO CONGRESS.

24 Not later than 180 days after the date of enactment

25 of this Act, after consultation with the appropriate com-
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1 mittees of Congress, the Secretary of Transportation shall

2 submit a report to Congress describing technical and con3 forming amendments to titles 23 and 49, United States

4 Code, and other laws that are appropriate in light of the

5 amendments made by this Act.

Æ