I 

109TH CONGRESS 

1ST SESSION H. R. 2284 

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

programs and mass transit programs, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 11, 2005 

Mr. FLAKE introduced the following bill; which was referred to the Committee 

on Transportation and Infrastructure, and in addition to the Committee 

on Ways and Means, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

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 Em5 powerment Act’’. 

6 SEC. 2. FINDINGS AND PURPOSES. 

7 (a) FINDINGS.—Congress finds that— 
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1 (1) the objective of the Federal highway pro2 gram has been to facilitate the construction of a 

3 modern freeway system that promotes efficient inter4 state commerce by connecting all States; 

5 (2) that objective has been attained, and the 

6 Interstate System connecting all States is near com7 pletion; 

8 (3) today, surface transportation problems are 

9 increasingly local and regional; 

10 (4) each State, not a central bureaucracy, can 

11 better fulfill the responsibility of providing an effi12 cient transportation network for the residents of the 

13 State; 

14 (5) each State has the means to build and oper15 ate a network of transportation systems, including 

16 highways, that best serves the needs of the State; 

17 (6) each State is best capable of determining 

18 the needs of the State and acting on those needs; 

19 (7) the Federal role in highway transportation 

20 has, over time, usurped the role of the States by tax21 ing fuels used in the States and then distributing 

22 the proceeds to the States based on the Federal 

23 Government’s perceptions of what is best for the 

24 States; 
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1 (8) the Federal Government has used the Fed2 eral gasoline tax revenues to force all States to take 

3 actions that are not necessarily appropriate for indi4 vidual States; 

5 (9) the Federal distribution, review, and en6 forcement process wastes billions of dollars on un7 productive activities; 

8 (10) the Federal distribution is inequitable and 

9 biased against certain regions; 

10 (11) Federal mandates that apply uniformly to 

11 all 50 States, regardless of the different cir12 cumstances of the States, cause the States to waste 

13 billions of hard-earned tax dollars on projects, pro14 grams, and activities that the States would not oth15 erwise undertake; and 

16 (12) Congress has expressed a strong interest 

17 in reducing the role of the Federal Government by 

18 allowing each State to manage its own affairs. 

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

20 (1) to return to the individual States maximum 

21 discretionary authority and fiscal responsibility for 

22 all elements of the national surface transportation 

23 systems that are not within the direct purview of the 

24 Federal Government; 
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1 (2) to preserve Federal responsibility for the 

2 Dwight D. Eisenhower National System of Inter3 state and Defense Highways; 

4 (3) to preserve the responsibility of the Depart5 ment of Transportation for— 

6 (A) design, construction, and preservation 

7 of transportation facilities on Federal public 

8 land; 

9 (B) national programs of transportation 

10 safety research and development; and 

11 (C) emergency assistance to the States in 

12 response to natural disasters; 

13 (4) to eliminate to the maximum extent prac14 ticable Federal obstacles to the ability of each State 

15 to apply innovative solutions to the financing, de16 sign, construction, operation, and preservation of 

17 Federal and State transportation facilities; and 

18 (5) with respect to transportation activities car19 ried out by States, local governments, and the pri20 vate sector, to encourage— 

21 (A) competition among States, local gov22 ernments, and the private sector; and 

23 (B) innovation, energy efficiency, private 

24 sector participation, and productivity. 
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1 SEC. 3. CONTINUATION OF FUNDING FOR ESSENTIAL HIGH2 WAY PROGRAMS. 

3 (a) IN GENERAL.— 

4 (1) FUNDING.—For the purpose of carrying out 

5 title 23, United States Code, the following sums are 

6 authorized to be appropriated out of the Highway 

7 Trust Fund: 

8 (A) INTERSTATE MAINTENANCE PRO9 GRAM.—For the Interstate maintenance pro10 gram under section 119 of title 23, United 

11 States Code, $5,600,000,000 for fiscal year 

12 2006, $5,700,000,000 for fiscal year 2007, 

13 $5,800,000,000 for fiscal year 2008, 

14 $5,900,000,000 for fiscal year 2009, 

15 $6,000,000,000 for fiscal year 2010, and 

16 $6,100,000,000 for fiscal year 2011. 

17 (B) INTERSTATE AND INDIAN RESERVA18 TION BRIDGE PROGRAM.—For the Interstate 

19 and Indian reservation bridge program under 

20 section 144 of that title $1,500,000,000 for fis21 cal year 2006, $1,600,000,000 for fiscal year 

22 2007, $1,700,000,000 for fiscal year 2008, 

23 $1,800,000,000 for fiscal year 2009, 

24 $1,900,000,000 for fiscal year 2010, and 

25 $2,000,000,000 for fiscal year 2011. 
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1 (C) FEDERAL LANDS HIGHWAYS PRO2 GRAM.— 

3 (i) INDIAN RESERVATION ROADS.— 

4 For Indian reservation roads under section 

5 204 of that title $300,000,000 for each of 

6 fiscal years 2006 through 2011. 

7 (ii) PUBLIC LANDS HIGHWAYS.—For 

8 public lands highways under section 204 of 

9 that title $275,000,000 for each of fiscal 

10 years 2006 through 2011. 

11 (iii) PARKWAYS AND PARK ROADS.— 

12 For parkways and park roads under sec13 tion 204 of that title $200,000,000 for 

14 each of fiscal years 2006 through 2011. 

15 (D) HIGHWAY SAFETY PROGRAMS.— 

16 (i) IN GENERAL.—For highway safety 

17 programs under section 402 of that title 

18 $170,000,000 for each of fiscal years 2006 

19 through 2011. 

20 (ii) HIGHWAY SAFETY RESEARCH AND

21 DEVELOPMENT.—For highway safety re22 search and development under section 403 

23 of that title $30,000,000 for each of fiscal 

24 years 2006 through 2011. 
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1 (E) TRANSPORTATION RESEARCH PRO2 GRAMS.— 

3 (i) SURFACE TRANSPORTATION RE4 SEARCH.—For cooperative agreements 

5 with nonprofit research organizations to 

6 carry out research under section 502 of 

7 that title $150,000,000 for each of fiscal 

8 years 2006 through 2011. 

9 (ii) ITS RESEARCH AND DEVELOP10 MENT.—For carrying out section 5207 of 

11 the Transportation Equity Act for the 21st 

12 Century (23 U.S.C. 502 note; 112 Stat. 

13 457) $220,000,000 for each of fiscal years 

14 2006 through 2011, of which— 

15 (I) $110,000,000 for each fiscal 

16 year shall be made available for re17 search; and 

18 (II) $110,000,000 for each fiscal 

19 year shall be made available for devel20 opment and operational tests. 

21 (iii) UNIVERSITY TRANSPORTATION

22 RESEARCH.—For carrying out section 

23 5505 of title 49, United States Code, 

24 $20,000,000 for each of fiscal years 2006 

25 through 2011. 
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1 (2) TRANSFERABILITY OF FUNDS.—Section 104 

2 of title 23, United States Code, is amended by strik3 ing subsection (g) and inserting the following: 

4 ‘‘(g) TRANSFERABILITY OF FUNDS.— 

5 ‘‘(1) IN GENERAL.—To the extent that a State 

6 determines that funds made available under this title 

7 to the State for a purpose are in excess of the needs 

8 of the State for that purpose, the State may transfer 

9 the excess funds to, and use the excess funds for, 

10 any surface transportation (including mass transit 

11 and rail) purpose in the State. 

12 ‘‘(2) ENFORCEMENT.—If the Secretary deter13 mines that a State has transferred funds under 

14 paragraph (1) to a purpose that is not a surface 

15 transportation purpose as described in paragraph 

16 (1), the amount of the improperly transferred funds 

17 shall be deducted from any amount the State would 

18 otherwise receive from the Highway Trust Fund for 

19 the fiscal year that begins after the date of the de20 termination.’’. 

21 (3) 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 (4) INTERSTATE MAINTENANCE PROGRAM.— 

2 Section 104(b) of title 23, United States Code, is 

3 amended by striking paragraph (4) and inserting the 

4 following: 

5 ‘‘(4) INTERSTATE MAINTENANCE COMPO6 NENT.—For each of fiscal years 2005 through 2010, 

7 for the Interstate maintenance program under sec8 tion 119, 1 percent to the Virgin Islands, Guam, 

9 American Samoa, and the Commonwealth of the 

10 Northern Mariana Islands and the remaining 99 

11 percent apportioned as follows: 

12 ‘‘(A)(i) For each State with an average 

13 population density of 20 persons or fewer per 

14 square mile, and each State with a population 

15 of 1,500,000 persons or fewer and with a land 

16 area of 10,000 square miles or less, the greater 

17 of— 

18 ‘‘(I) a percentage share of apportion19 ments equal to the percentage listed for 

20 the State in clause (ii); or 

21 ‘‘(II) a share determined under sub22 paragraph (B). 

23 ‘‘(ii) The percentage referred to in clause 

24 (i)(I) is as follows: 

‘‘States: Percentage: 

Alabama ....................................................................................... 2.0269

Alaska .......................................................................................... 1.1915
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Arizona ......................................................................................... 1.5581

Arkansas ...................................................................................... 1.3214

California ..................................................................................... 9.1962

Colorado ....................................................................................... 1.1673

Connecticut .................................................................................. 1.5186

Delaware ...................................................................................... 0.4424

District of Columbia .................................................................... 0.3956

Florida ......................................................................................... 4.6176

Georgia ......................................................................................... 3.5104

Hawaii .......................................................................................... 0.5177

Idaho ............................................................................................ 0.7718

Illinois .......................................................................................... 3.3819

Indiana ......................................................................................... 2.3588

Iowa ............................................................................................. 1.2020

Kansas ......................................................................................... 1.1717

Kentucky ...................................................................................... 1.7365

Louisiana ..................................................................................... 1.5900

Maine ........................................................................................... 0.5263

Maryland ...................................................................................... 1.5087

Massachusetts .............................................................................. 1.8638

Michigan ...................................................................................... 3.1535

Minnesota ..................................................................................... 1.4993

Mississippi .................................................................................... 1.2186

Missouri ....................................................................................... 2.3615

Montana ....................................................................................... 0.9929

Nebraska ...................................................................................... 0.7768

Nevada ......................................................................................... 0.7248

New Hampshire ........................................................................... 0.5163

New Jersey .................................................................................. 2.5816

New Mexico .................................................................................. 0.9884

New York ..................................................................................... 5.1628

North Carolina ............................................................................. 2.8298

North Dakota ............................................................................... 0.6553

Ohio ............................................................................................. 3.4257

Oklahoma ..................................................................................... 1.5419

Oregon ......................................................................................... 1.2183

Pennsylvania ................................................................................ 4.9887

Puerto Rico .................................................................................. 0.5000

Rhode Island ................................................................................ 0.5958

South Carolina ............................................................................. 1.5910

South Dakota ............................................................................... 0.7149

Tennessee ..................................................................................... 2.2646

Texas ............................................................................................ 7.2131

Utah ............................................................................................. 0.7831

Vermont ....................................................................................... 0.4573

Virginia ........................................................................................ 2.5627

Washington .................................................................................. 1.7875

West Virginia ............................................................................... 1.1319

Wisconsin ..................................................................................... 1.9916

Wyoming...................................................................................... 0.6951. 

1 ‘‘(B) For each State not described in sub2 paragraph (A), a share of the apportionments 
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1 remaining determined in accordance with the 

2 following formula: 

‘‘(i) 1 3 ⁄9 in the ratio that the total rural 

4 lane miles in each State bears to the total 

5 rural lane miles in all States with an aver6 age population density greater than 20 

7 persons per square mile and all States with 

8 a population of more than 1,500,000 per9 sons and with a land area of more than 

10 10,000 square miles. 

‘‘(ii) 1 11 ⁄9 in the ratio that the total 

12 rural vehicle miles traveled in each State 

13 bears to the total rural vehicle miles trav14 eled in all States described in clause (i). 

‘‘(iii) 2 15 ⁄9 in the ratio that the total 

16 urban lane miles in each State bears to the 

17 total urban lane miles in all States de18 scribed in clause (i). 

‘‘(iv) 2 19 ⁄9 in the ratio that the total 

20 urban vehicle miles traveled in each State 

21 bears to the total urban vehicle miles trav22 eled in all States described in clause (i). 

‘‘(v) 3 23 ⁄9 in the ratio that the total die24 sel fuel used in each State bears to the 
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1 total diesel fuel used in all States described 

2 in clause (i).’’. 

3 (5) INTERSTATE BRIDGE PROGRAM.—Section 

4 144 of title 23, United States Code, is amended— 

5 (A) in subsection (d)— 

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

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

8 after ‘‘highway bridge’’ each place it ap9 pears; and 

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

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

12 after ‘‘highway bridges’’ each place it ap13 pears; 

14 (B) in the second sentence of subsection 

15 (e)— 

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

17 at the end; 

18 (ii) in paragraph (2), by striking the 

19 comma at the end and inserting a period; 

20 and 

21 (iii) by striking paragraphs (3) and 

22 (4); 

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

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

2 bridge’’; 

3 (D) in subsection (m)(1), by inserting ‘‘on 

4 the Federal-aid system or described in sub5 section (c)(3)’’ after ‘‘construct any bridge’’; 

6 and 

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

8 by inserting ‘‘for each of fiscal years 2006 

9 through 2011,’’ after ‘‘of law,’’. 

10 (6) NATIONAL DEFENSE HIGHWAYS.—Section 

11 311 of title 23, United States Code, is amended— 

12 (A) in the first sentence, by striking 

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

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

15 and 

16 (B) by striking the second sentence. 

17 (7) MOTOR CARRIER SAFETY GRANTS.—Section 

18 31104(a) of title 49, United States Code, is amend19 ed by adding at the end the following: 

20 ‘‘(6) Not more than $110,000,000 for each of 

21 fiscal years 2005 through 2010.’’. 

22 (b) EXPENDITURES FROM HIGHWAY TRUST

23 FUND.— 

24 (1) EXPENDITURES FOR ESSENTIAL PRO25 GRAMS.—Section 9503(c) of the Internal Revenue 
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1 Code of 1986 (relating to expenditures from High2 way Trust Fund) is amended— 

3 (A) in paragraph (1), by striking ‘‘June 1, 

4 2005’’ and inserting ‘‘October 1, 2011’’; 

5 (B) in paragraphs (2)(A)(i)(III), (2)(A)(ii), 

6 (4)(A)(i), and (5)(A), by striking ‘‘October 1, 

7 2005’’ and inserting ‘‘October 1, 2011’’; 

8 (C) in paragraph (1)— 

9 (i) in subparagraph (J), by striking 

10 ‘‘or’’ at the end; 

11 (ii) in subparagraph (K), by striking 

12 the period and inserting ‘‘, or’’; 

13 (iii) by inserting after subparagraph 

14 (K) the following: 

15 ‘‘(L) authorized to be paid out of the 

16 Highway Trust Fund under the Transportation 

17 Empowerment Act.’’; and 

18 (iv) by striking the last sentence and 

19 inserting the following new flush sentence: 

20 ‘‘In determining the authorizations under the Acts 

21 referred to in the preceding subparagraphs, such 

22 Acts shall be applied as in effect on the date of en23 actment of the Transportation Empowerment Act.’’; 

24 and 
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1 (D) in paragraphs (2)(A)(i) and (3), by 

2 striking ‘‘July 1, 2006’’ each place it appears 

3 and inserting ‘‘July 1, 2011’’. 

4 (2) AMOUNTS AVAILABLE FOR ESSENTIAL PRO5 GRAM EXPENDITURES.—Section 9503 of such Code 

6 (relating to the Highway Trust Fund) is amended 

7 by adding at the end the following: 

8 ‘‘(g) ESSENTIAL PROGRAMS FINANCING RATE.—For 

9 purposes of this section— 

10 ‘‘(1) IN GENERAL.—Except as provided in para11 graph (2), in the case of gasoline, special motor 

12 fuels, kerosene, and diesel fuel, the essential pro13 grams financing rate is— 

14 ‘‘(A) after September 30, 2005, and before 

15 October 1, 2006, so much of the rate of the 

16 taxes described in subparagraphs (A) and (D) 

17 of subsection (b)(1) transferred to the Highway 

18 Trust Fund as does not exceed 16.3 cents per 

19 gallon, 

20 ‘‘(B) after September 30, 2006, and before 

21 October 1, 2007, so much of the rate of such 

22 taxes as does not exceed 11.3 cents per gallon, 

23 ‘‘(C) after September 30, 2007, and before 

24 October 1, 2008, so much of the rate of such 

25 taxes as does not exceed 8.3 cents per gallon, 
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1 ‘‘(D) after September 30, 2008, and before 

2 October 1, 2009, so much of the rate of such 

3 taxes as does not exceed 7.3 cents per gallon, 

4 and 

5 ‘‘(E) after September 30, 2009, the rate of 

6 such taxes. 

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

8 fuels used as described in paragraph (4)(D) and 

9 (5)(B) of subsection (c), the essential programs fi10 nancing rate is zero.’’. 

11 (c) TERMINATION OF TRANSFERS TO MASS TRANSIT

12 ACCOUNT.— 

13 (1) IN GENERAL.—Section 9503(e)(2) of the 

14 Internal Revenue Code of 1986 (relating to Mass 

15 Transit Account) is amended by adding at the end 

16 the following new flush sentence: 

17 No transfers shall be made under this paragraph 

18 after September 30, 2005. 

19 (2) AUTHORIZATION TO EXPEND REMAINING

20 BALANCES IN ACCOUNT.—Section 9503(e)(3) of such 

21 Code is amended by striking ‘‘before June 1, 2005’’. 

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

23 this section take effect on October 1, 2005. 
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1 SEC. 4. INFRASTRUCTURE SPECIAL ASSISTANCE FUND. 

2 (a) BALANCE OF ESSENTIAL PROGRAMS FINANCING

3 RATE DEPOSITED IN FUND.—Section 9503 of the Inter4 nal Revenue Code of 1986 (as amended by section 3(b)(2)) 

5 is amended by adding at the end the following: 

6 ‘‘(h) ESTABLISHMENT OF INFRASTRUCTURE SPE7 CIAL ASSISTANCE FUND.— 

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

9 in the Highway Trust Fund a separate fund to be 

10 known as the ‘Infrastructure Special Assistance 

11 Fund’ consisting of such amounts as may be trans12 ferred or credited to the Infrastructure Special As13 sistance Fund as provided in this subsection or sec14 tion 9602(b). 

15 ‘‘(2) TRANSFERS TO INFRASTRUCTURE SPECIAL

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

17 year, the Secretary, in consultation with the Sec18 retary of Transportation, shall determine the excess 

19 (if any) of— 

20 ‘‘(A) the sum of— 

21 ‘‘(i) the amounts appropriated in such 

22 fiscal year to the Highway Trust Fund 

23 under subsection (b) which are attributable 

24 to the essential programs financing rate 

25 for such year, plus 
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1 ‘‘(ii) the amounts appropriated in 

2 such fiscal year to the Highway Trust 

3 Fund under subsection (b) which are at4 tributable to taxes under sections 4051, 

5 4061, 4071, and 4481 for such year, over 

6 ‘‘(B) the amount appropriated under sub7 section (c) for such fiscal year, 

8 and shall transfer such excess to the Infrastructure 

9 Special Assistance Fund. 

10 ‘‘(3) EXPENDITURES FROM INFRASTRUCTURE

11 SPECIAL ASSISTANCE FUND.— 

12 ‘‘(A) TRANSITIONAL ASSISTANCE.— 

13 ‘‘(i) IN GENERAL.—Except as pro14 vided in clause (iv), during fiscal years 

15 2006 through 2009, $1,000,000,000 in the 

16 Infrastructure Special Assistance Fund 

17 shall be available to States for transpor18 tation-related program expenditures. 

19 ‘‘(ii) STATE SHARE.— 

20 ‘‘(I) IN GENERAL.—Except as 

21 provided in clause (v), each State is 

22 entitled to a share of the amount 

23 specified in clause (i) upon enactment 

24 of legislation providing 1 of the 2 
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1 funding mechanisms described in 

2 clause (iii). 

3 ‘‘(II) DETERMINATION OF STATE

4 SHARE.—For purposes of subclause 

5 (I), each State’s share shall be deter6 mined in the following manner: 

7 ‘‘(aa) Multiply the percent8 age of the amounts appropriated 

9 in the latest fiscal year for which 

10 such data are available to the 

11 Highway Trust Fund under sub12 section (b) which is attributable 

13 to taxes paid by highway users in 

14 the State, by the amount speci15 fied in clause (i). If the result 

16 does not exceed $15,000,000, the 

17 State’s share equals 

18 $15,000,000. If the result ex19 ceeds $15,000,000, the State’s 

20 share is determined under item 

21 (bb). 

22 ‘‘(bb) Multiply the percent23 age determined under item (aa), 

24 by the amount specified in clause 

25 (i) reduced by an amount equal 
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1 to $15,000,000 times the number 

2 of States the share of which is 

3 determined under item (aa). 

4 ‘‘(iii) LEGISLATIVE FUNDING MECHA5 NISMS.—A funding mechanism is described 

6 in this clause as follows: 

7 ‘‘(I) A funding mechanism which 

8 results in revenues for transportation9 related projects in the State for fiscal 

10 year 2010 and each succeeding fiscal 

11 year which are equal to the excess 

12 of— 

13 ‘‘(aa) the mean annual aver14 age of distributions from the 

15 Highway Trust Fund to the 

16 State for fiscal years 2000 

17 through 2005; over 

18 ‘‘(bb) the distributions from 

19 the Highway Trust Fund to the 

20 State for such fiscal year attrib21 utable to the essential programs 

22 financing rate for such year. 

23 ‘‘(II) A funding mechanism 

24 which results in an increase in the 

25 State rate of tax on motor fuels equal 
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1 to the decrease in the rate of tax on 

2 such fuels under section 4081 for fis3 cal year 2010 and any succeeding fis4 cal year. 

5 ‘‘(iv) DISTRIBUTION OF REMAINING

6 AMOUNT.—If after September 30, 2009, a 

7 portion of the amount specified in clause 

8 (i) remains, the Secretary, in consultation 

9 with the Secretary of Transportation, 

10 shall, on October 1, 2009, apportion the 

11 portion among the States which received a 

12 share of such amount under clause (ii) and 

13 which are not described in clause (v) using 

14 the percentages determined under clause 

15 (ii)(II)(aa) for such States. 

16 ‘‘(v) ENFORCEMENT OF FUNDING

17 MECHANISM REQUIREMENT.—If a State, 

18 which enacted legislation providing for a 

19 funding mechanism described in clause 

20 (iii), terminates such mechanism before fis21 cal year 2009, the State’s share deter22 mined under clauses (ii) and (iv) shall be 

23 deducted from any amount the State would 

24 otherwise receive from the Highway Trust 

25 Fund for fiscal year 2009. 
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1 ‘‘(B) ADDITIONAL EXPENDITURES FROM

2 FUND.— 

3 ‘‘(i) IN GENERAL.—Amounts in the 

4 Infrastructure Special Assistance Fund, in 

5 excess of the amount specified in subpara6 graph (A)(i), shall be available, as provided 

7 by appropriation Acts, to the States for 

8 any surface transportation (including mass 

9 transit and rail) purpose in such States, 

10 and the Secretary shall apportion such ex11 cess amounts among all States using the 

12 percentages determined under clause 

13 (ii)(II)(aa) for such States. 

14 ‘‘(ii) ENFORCEMENT.—If the Sec15 retary determines that a State has used 

16 amounts under clause (i) for a purpose 

17 which is not a surface transportation pur18 pose as described in clause (i), the improp19 erly used amounts shall be deducted from 

20 any amount the State would otherwise re21 ceive from the Highway Trust Fund for 

22 the fiscal year which begins after the date 

23 of the determination.’’. 

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

25 this section takes effect on October 1, 2005. 
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1 SEC. 5. RETURN OF EXCESS TAX RECEIPTS TO STATES. 

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

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

4 the following: 

5 ‘‘(6) RETURN OF EXCESS TAX RECEIPTS TO

6 STATES FOR SURFACE TRANSPORTATION PUR7 POSES.— 

8 ‘‘(A) IN GENERAL.—On the first day of 

9 each of fiscal years 2006, 2007, 2008, and 

10 2009, the Secretary, in consultation with the 

11 Secretary of Transportation, shall— 

12 ‘‘(i) determine the excess (if any) of— 

13 ‘‘(I) the amounts appropriated in 

14 such fiscal year to the Highway Trust 

15 Fund under subsection (b) which are 

16 equivalent to the taxes attributable to 

17 the excess of— 

18 ‘‘(aa) the Highway Trust 

19 Fund financing rate for such 

20 year, over 

21 ‘‘(bb) the essential programs 

22 financing rate for such year, over 

23 ‘‘(II) the amounts so appro24 priated which are equivalent to the 

25 taxes described in paragraphs (4)(D) 

26 and (5)(B), and 
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1 ‘‘(ii) allocate the amount determined 

2 under clause (i) among the States (as de3 fined in section 101(a) of title 23, United 

4 States Code) for surface transportation 

5 (including mass transit and rail) purposes 

6 so that— 

7 ‘‘(I) the percentage of that 

8 amount allocated to each State, is 

9 equal to 

10 ‘‘(II) the percentage of the 

11 amount determined under clause (i)(I) 

12 paid into the Highway Trust Fund in 

13 the latest fiscal year for which such 

14 data are available which is attrib15 utable to highway users in the State. 

16 ‘‘(B) ENFORCEMENT.—If the Secretary 

17 determines that a State has used amounts 

18 under subparagraph (A) for a purpose which is 

19 not a surface transportation purpose as de20 scribed in subparagraph (A), the improperly 

21 used amounts shall be deducted from any 

22 amount the State would otherwise receive from 

23 the Highway Trust Fund for the fiscal year 

24 which begins after the date of the determina25 tion.’’. 
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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section takes effect on October 1, 2005. 

3 SEC. 6. FEDERAL-AID FACILITY PRIVATIZATION. 

4 (a) DEFINITIONS.—In this section— 

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

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

7 title 5, United States Code. 

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

9 means the disposition or transfer of a transportation 

10 infrastructure asset, whether by sale, lease, or simi11 lar arrangement, from a Federal, State, or local gov12 ernment to a private party. 

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

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

15 of— 

16 (A) any State; 

17 (B) the District of Columbia; 

18 (C) any commonwealth, territory, or pos19 session of the United States; 

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

21 township, local public authority, school district, 

22 special district, intrastate district, regional or 

23 interstate government entity, council of govern24 ments, or agency or instrumentality of a local 

25 government; or 
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1 (E) any federally recognized Indian tribe. 

2 (4) TRANSPORTATION INFRASTRUCTURE

3 ASSET.— 

4 (A) IN GENERAL.—The term ‘‘transpor5 tation infrastructure asset’’ means any surface6 transportation-related asset financed in whole 

7 or in part by the Federal Government, includ8 ing a road, tunnel, bridge, or mass-transit-re9 lated or rail-related asset. 

10 (B) EXCLUSION.—The term does not in11 clude any transportation-related asset on the 

12 Interstate System (as defined in section 101 of 

13 title 23, United States Code). 

14 (b) PRIVATIZATION INITIATIVES BY STATE AND

15 LOCAL GOVERNMENTS.—The head of each Executive 

16 agency shall— 

17 (1) assist State and local governments in efforts 

18 to privatize the transportation infrastructure assets 

19 of the State and local governments; and 

20 (2) subject to subsection (a), approve requests 

21 from State and local governments to privatize trans22 portation infrastructure assets and waive or modify 

23 any condition relating to the original Federal pro24 gram that funded the asset. 
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1 (c) CRITERIA.—The head of an Executive agency 

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

3 (1) the State or local government demonstrates 

4 that a market mechanism, legally enforceable agree5 ment, or regulatory mechanism will ensure that the 

6 transportation infrastructure asset will continue to 

7 be used for the general objectives of the original 

8 Federal program that funded the asset (which shall 

9 not be considered to include every condition required 

10 for the recipient of Federal funds to have obtained 

11 the original Federal funds), so long as needed for 

12 those objectives; and 

13 (2) the private party purchasing or leasing the 

14 transportation infrastructure asset agrees to comply 

15 with all applicable conditions of the original Federal 

16 program. 

17 (d) LACK OF OBLIGATION TO REPAY FEDERAL

18 FUNDS.—A State or local government shall have no obli19 gation to repay to any agency of the Federal Government 

20 any Federal funds received by the State or local govern21 ment in connection with a transportation infrastructure 

22 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 condi3 tions of the original Federal program. 

4 (2) RECOVER 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. 7. REDUCTION IN TAXES ON GASOLINE, DIESEL FUEL, 

20 KEROSENE, AND SPECIAL FUELS FUNDING 

21 HIGHWAY TRUST FUND. 

22 (a) REDUCTION IN TAX RATE.— 

23 (1) IN GENERAL.—Section 4081(a)(2)(A) of the 

24 Internal Revenue Code of 1986 (relating to rates of 

25 tax) is amended— 
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1 (A) in clause (i), by striking ‘‘18.3 cents’’ 

2 and inserting ‘‘3 cents’’; and 

3 (B) in clause (iii), by striking ‘‘24.3 cents’’ 

4 and inserting ‘‘3 cents’’. 

5 (2) CONFORMING AMENDMENT.—Section 

6 6427(b)(2)(A) of such Code is amended by striking 

7 ‘‘7.4 cents’’ and inserting ‘‘2.9 cents’’. 

8 (b) ADDITIONAL CONFORMING AMENDMENTS.— 

9 (1) Section 4041(a)(1)(C)(iii)(I) of the Internal 

10 Revenue Code of 1986 is amended by striking ‘‘(4.3 

11 cents per gallon after September 30, 2005)’’ and in12 serting ‘‘(zero after September 30, 2009)’’. 

13 (2) Section 4041(m)(1) of such Code is amend14 ed— 

15 (A) in subparagraph (A), by striking 

16 ‘‘2005’’ and inserting ‘‘2009’’; and 

17 (B) by striking subparagraph (B) and in18 serting the following: 

19 ‘‘(B) zero after September 30, 2009.’’. 

20 (3) Section 4081(d)(1) of such Code is amend21 ed by striking ‘‘4.3 cents per gallon after September 

22 30, 2005’’ and inserting ‘‘zero after September 30, 

23 2011’’. 

24 (4) Section 9503(b) of such Code is amended— 
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1 (A) in paragraphs (1) and (2), by striking 

2 ‘‘October 1, 2005’’ each place it appears and 

3 inserting ‘‘October 1, 2011’’; 

4 (B) in the heading of paragraph (2), by 

5 striking ‘‘OCTOBER 1, 2005’’ and inserting ‘‘OC6 TOBER 1, 2011’’; 

7 (C) in paragraph (2), by striking ‘‘after 

8 September 30, 2005, and before July 1, 2006’’ 

9 and inserting ‘‘after September 30, 2011, and 

10 before July 1, 2012’’; and 

11 (D) in paragraph (4), by striking ‘‘2005’’ 

12 each place it appears and inserting ‘‘2009’’. 

13 (c) FLOOR STOCK REFUNDS.— 

14 (1) IN GENERAL.—If— 

15 (A) before October 1, 2009, tax has been 

16 imposed under section 4081 of the Internal 

17 Revenue Code of 1986 on any liquid; and 

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

19 dealer and has not been used and is intended 

20 for sale; 

21 there shall be credited or refunded (without interest) 

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

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

24 the excess of the tax paid by the taxpayer over the 
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1 amount of such tax which would be imposed on such 

2 liquid had the taxable event occurred on such date. 

3 (2) TIME FOR FILING CLAIMS.—No credit or re4 fund shall be allowed or made under this subsection 

5 unless— 

6 (A) claim therefor is filed with the Sec7 retary of the Treasury before April 1, 2010; 

8 and 

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

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

11 2009— 

12 (i) the dealer submits a request for re13 fund or credit to the taxpayer before Janu14 ary 1, 2010; and 

15 (ii) the taxpayer has repaid or agreed 

16 to repay the amount so claimed to such 

17 dealer or has obtained the written consent 

18 of such dealer to the allowance of the cred19 it or the making of the refund. 

20 (3) EXCEPTION FOR FUEL HELD IN RETAIL

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

22 this subsection with respect to any liquid in retail 

23 stocks held at the place where intended to be sold 

24 at retail. 
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1 (4) DEFINITIONS.—For purposes of this sub2 section, the terms ‘‘dealer’’ and ‘‘held by a dealer’’ 

3 have the respective meanings given to such terms by 

4 section 6412 of such Code; except that the term 

5 ‘‘dealer’’ includes a producer. 

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

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

8 6412 and sections 6206 and 6675 of such Code shall 

9 apply for purposes of this subsection. 

10 (d) EFFECTIVE DATE.— 

11 (1) IN GENERAL.—Except as provided in para12 graph (2), the amendments made by this section 

13 shall apply to fuel removed after September 30, 

14 2009. 

15 (2) ADDITIONAL CONFORMING AMENDMENTS.— 

16 The amendments made by subsection (b) take effect 

17 on October 1, 2005. 

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