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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2284 Introduced in House (IH)]

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Transportation Empowerment Act''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds that--
            (1) the objective of the Federal highway program has been 
        to facilitate the construction of a modern freeway system that 
        promotes efficient interstate commerce by connecting all 
        States;
            (2) that objective has been attained, and the Interstate 
        System connecting all States is near completion;
            (3) today, surface transportation problems are increasingly 
        local and regional;
            (4) each State, not a central bureaucracy, can better 
        fulfill the responsibility of providing an efficient 
        transportation network for the residents of the State;
            (5) each State has the means to build and operate a network 
        of transportation systems, including highways, that best serves 
        the needs of the State;
            (6) each State is best capable of determining the needs of 
        the State and acting on those needs;
            (7) the Federal role in highway transportation has, over 
        time, usurped the role of the States by taxing fuels used in 
        the States and then distributing the proceeds to the States 
        based on the Federal Government's perceptions of what is best 
        for the States;
            (8) the Federal Government has used the Federal gasoline 
        tax revenues to force all States to take actions that are not 
        necessarily appropriate for individual States;
            (9) the Federal distribution, review, and enforcement 
        process wastes billions of dollars on unproductive activities;
            (10) the Federal distribution is inequitable and biased 
        against certain regions;
            (11) Federal mandates that apply uniformly to all 50 
        States, regardless of the different circumstances of the 
        States, cause the States to waste billions of hard-earned tax 
        dollars on projects, programs, and activities that the States 
        would not otherwise undertake; and
            (12) Congress has expressed a strong interest in reducing 
        the role of the Federal Government by allowing each State to 
        manage its own affairs.
    (b) Purposes.--The purposes of this Act are--
            (1) to return to the individual States maximum 
        discretionary authority and fiscal responsibility for all 
        elements of the national surface transportation systems that 
        are not within the direct purview of the Federal Government;
            (2) to preserve Federal responsibility for the Dwight D. 
        Eisenhower National System of Interstate and Defense Highways;
            (3) to preserve the responsibility of the Department of 
        Transportation for--
                    (A) design, construction, and preservation of 
                transportation facilities on Federal public land;
                    (B) national programs of transportation safety 
                research and development; and
                    (C) emergency assistance to the States in response 
                to natural disasters;
            (4) to eliminate to the maximum extent practicable Federal 
        obstacles to the ability of each State to apply innovative 
        solutions to the financing, design, construction, operation, 
        and preservation of Federal and State transportation 
        facilities; and
            (5) with respect to transportation activities carried out 
        by States, local governments, and the private sector, to 
        encourage--
                    (A) competition among States, local governments, 
                and the private sector; and
                    (B) innovation, energy efficiency, private sector 
                participation, and productivity.

SEC. 3. CONTINUATION OF FUNDING FOR ESSENTIAL HIGHWAY PROGRAMS.

    (a) In General.--
            (1) Funding.--For the purpose of carrying out title 23, 
        United States Code, the following sums are authorized to be 
        appropriated out of the Highway Trust Fund:
                    (A) Interstate maintenance program.--For the 
                Interstate maintenance program under section 119 of 
                title 23, United States Code, $5,600,000,000 for fiscal 
                year 2006, $5,700,000,000 for fiscal year 2007, 
                $5,800,000,000 for fiscal year 2008, $5,900,000,000 for 
                fiscal year 2009, $6,000,000,000 for fiscal year 2010, 
                and $6,100,000,000 for fiscal year 2011.
                    (B) Interstate and indian reservation bridge 
                program.--For the Interstate and Indian reservation 
                bridge program under section 144 of that title 
                $1,500,000,000 for fiscal year 2006, $1,600,000,000 for 
                fiscal year 2007, $1,700,000,000 for fiscal year 2008, 
                $1,800,000,000 for fiscal year 2009, $1,900,000,000 for 
                fiscal year 2010, and $2,000,000,000 for fiscal year 
                2011.
                    (C) Federal lands highways program.--
                            (i) Indian reservation roads.--For Indian 
                        reservation roads under section 204 of that 
                        title $300,000,000 for each of fiscal years 
                        2006 through 2011.
                            (ii) Public lands highways.--For public 
                        lands highways under section 204 of that title 
                        $275,000,000 for each of fiscal years 2006 
                        through 2011.
                            (iii) Parkways and park roads.--For 
                        parkways and park roads under section 204 of 
                        that title $200,000,000 for each of fiscal 
                        years 2006 through 2011.
                    (D) Highway safety programs.--
                            (i) In general.--For highway safety 
                        programs under section 402 of that title 
                        $170,000,000 for each of fiscal years 2006 
                        through 2011.
                            (ii) Highway safety research and 
                        development.--For highway safety research and 
                        development under section 403 of that title 
                        $30,000,000 for each of fiscal years 2006 
                        through 2011.
                    (E) Transportation research programs.--
                            (i) Surface transportation research.--For 
                        cooperative agreements with nonprofit research 
                        organizations to carry out research under 
                        section 502 of that title $150,000,000 for each 
                        of fiscal years 2006 through 2011.
                            (ii) ITS research and development.--For 
                        carrying out section 5207 of the Transportation 
                        Equity Act for the 21st Century (23 U.S.C. 502 
                        note; 112 Stat. 457) $220,000,000 for each of 
                        fiscal years 2006 through 2011, of which--
                                    (I) $110,000,000 for each fiscal 
                                year shall be made available for 
                                research; and
                                    (II) $110,000,000 for each fiscal 
                                year shall be made available for 
                                development and operational tests.
                            (iii) University transportation research.--
                        For carrying out section 5505 of title 49, 
                        United States Code, $20,000,000 for each of 
                        fiscal years 2006 through 2011.
            (2) Transferability of funds.--Section 104 of title 23, 
        United States Code, is amended by striking subsection (g) and 
        inserting the following:
    ``(g) Transferability of Funds.--
            ``(1) In general.--To the extent that a State determines 
        that funds made available under this title to the State for a 
        purpose are in excess of the needs of the State for that 
        purpose, the State may transfer the excess funds to, and use 
        the excess funds for, any surface transportation (including 
        mass transit and rail) purpose in the State.
            ``(2) Enforcement.--If the Secretary determines that a 
        State has transferred funds under paragraph (1) to a purpose 
        that is not a surface transportation purpose as described in 
        paragraph (1), the amount of the improperly transferred funds 
        shall be deducted from any amount the State would otherwise 
        receive from the Highway Trust Fund for the fiscal year that 
        begins after the date of the determination.''.
            (3) Federal-aid system.--Section 103(a) of title 23, United 
        States Code, is amended by striking ``systems are the 
        Interstate System and the National Highway System'' and 
        inserting ``system is the Interstate System''.
            (4) Interstate maintenance program.--Section 104(b) of 
        title 23, United States Code, is amended by striking paragraph 
        (4) and inserting the following:
            ``(4) Interstate maintenance component.--For each of fiscal 
        years 2005 through 2010, for the Interstate maintenance program 
        under section 119, 1 percent to the Virgin Islands, Guam, 
        American Samoa, and the Commonwealth of the Northern Mariana 
        Islands and the remaining 99 percent apportioned as follows:
                    ``(A)(i) For each State with an average population 
                density of 20 persons or fewer per square mile, and 
                each State with a population of 1,500,000 persons or 
                fewer and with a land area of 10,000 square miles or 
                less, the greater of--
                            ``(I) a percentage share of apportionments 
                        equal to the percentage listed for the State in 
                        clause (ii); or
                            ``(II) a share determined under 
                        subparagraph (B).
                    ``(ii) The percentage referred to in clause (i)(I) 
                is as follows:

``States:
                                                            Percentage:
        Alabama............................................     2.0269 
        Alaska.............................................     1.1915 
        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.
                    ``(B) For each State not described in subparagraph 
                (A), a share of the apportionments remaining determined 
                in accordance with the following formula:
                            ``(i) \1/9\ in the ratio that the total 
                        rural lane miles in each State bears to the 
                        total rural lane miles in all States with an 
                        average population density greater than 20 
                        persons per square mile and all States with a 
                        population of more than 1,500,000 persons and 
                        with a land area of more than 10,000 square 
                        miles.
                            ``(ii) \1/9\ in the ratio that the total 
                        rural vehicle miles traveled in each State 
                        bears to the total rural vehicle miles traveled 
                        in all States described in clause (i).
                            ``(iii) \2/9\ in the ratio that the total 
                        urban lane miles in each State bears to the 
                        total urban lane miles in all States described 
                        in clause (i).
                            ``(iv) \2/9\ in the ratio that the total 
                        urban vehicle miles traveled in each State 
                        bears to the total urban vehicle miles traveled 
                        in all States described in clause (i).
                            ``(v) \3/9\ in the ratio that the total 
                        diesel fuel used in each State bears to the 
                        total diesel fuel used in all States described 
                        in clause (i).''.
            (5) Interstate bridge program.--Section 144 of title 23, 
        United States Code, is amended--
                    (A) in subsection (d)--
                            (i) by inserting ``on the Federal-aid 
                        system or described in subsection (c)(3)'' 
                        after ``highway bridge'' each place it appears; 
                        and
                            (ii) by inserting ``on the Federal-aid 
                        system or described in subsection (c)(3)'' 
                        after ``highway bridges'' each place it 
                        appears;
                    (B) in the second sentence of subsection (e)--
                            (i) in paragraph (1), by adding ``and'' at 
                        the end;
                            (ii) in paragraph (2), by striking the 
                        comma at the end and inserting a period; and
                            (iii) by striking paragraphs (3) and (4);
                    (C) in the first sentence of subsection (l), by 
                inserting ``on the Federal-aid system or described in 
                subsection (c)(3)'' after ``any bridge'';
                    (D) in subsection (m)(1), by inserting ``on the 
                Federal-aid system or described in subsection (c)(3)'' 
                after ``construct any bridge''; and
                    (E) in the first sentence of subsection (n), by 
                inserting ``for each of fiscal years 2006 through 
                2011,'' after ``of law,''.
            (6) National defense highways.--Section 311 of title 23, 
        United States Code, is amended--
                    (A) in the first sentence, by striking ``under 
                subsection (a) of section 104 of this title'' and 
                inserting ``to carry out this section''; and
                    (B) by striking the second sentence.
            (7) Motor carrier safety grants.--Section 31104(a) of title 
        49, United States Code, is amended by adding at the end the 
        following:
            ``(6) Not more than $110,000,000 for each of fiscal years 
        2005 through 2010.''.
    (b) Expenditures From Highway Trust Fund.--
            (1) Expenditures for essential programs.--Section 9503(c) 
        of the Internal Revenue Code of 1986 (relating to expenditures 
        from Highway Trust Fund) is amended--
                    (A) in paragraph (1), by striking ``June 1, 2005'' 
                and inserting ``October 1, 2011'';
                    (B) in paragraphs (2)(A)(i)(III), (2)(A)(ii), 
                (4)(A)(i), and (5)(A), by striking ``October 1, 2005'' 
                and inserting ``October 1, 2011'';
                    (C) in paragraph (1)--
                            (i) in subparagraph (J), by striking ``or'' 
                        at the end;
                            (ii) in subparagraph (K), by striking the 
                        period and inserting ``, or'';
                            (iii) by inserting after subparagraph (K) 
                        the following:
                    ``(L) authorized to be paid out of the Highway 
                Trust Fund under the Transportation Empowerment Act.''; 
                and
                            (iv) by striking the last sentence and 
                        inserting the following new flush sentence:
        ``In determining the authorizations under the Acts referred to 
        in the preceding subparagraphs, such Acts shall be applied as 
        in effect on the date of enactment of the Transportation 
        Empowerment Act.''; and
                    (D) in paragraphs (2)(A)(i) and (3), by striking 
                ``July 1, 2006'' each place it appears and inserting 
                ``July 1, 2011''.
            (2) Amounts available for essential program expenditures.--
        Section 9503 of such Code (relating to the Highway Trust Fund) 
        is amended by adding at the end the following:
    ``(g) Essential Programs Financing Rate.--For purposes of this 
section--
            ``(1) In general.--Except as provided in paragraph (2), in 
        the case of gasoline, special motor fuels, kerosene, and diesel 
        fuel, the essential programs financing rate is--
                    ``(A) after September 30, 2005, and before October 
                1, 2006, so much of the rate of the taxes described in 
                subparagraphs (A) and (D) of subsection (b)(1) 
                transferred to the Highway Trust Fund as does not 
                exceed 16.3 cents per gallon,
                    ``(B) after September 30, 2006, and before October 
                1, 2007, so much of the rate of such taxes as does not 
                exceed 11.3 cents per gallon,
                    ``(C) after September 30, 2007, and before October 
                1, 2008, so much of the rate of such taxes as does not 
                exceed 8.3 cents per gallon,
                    ``(D) after September 30, 2008, and before October 
                1, 2009, so much of the rate of such taxes as does not 
                exceed 7.3 cents per gallon, and
                    ``(E) after September 30, 2009, the rate of such 
                taxes.
            ``(2) Application of rate.--In the case of fuels used as 
        described in paragraph (4)(D) and (5)(B) of subsection (c), the 
        essential programs financing rate is zero.''.
    (c) Termination of Transfers to Mass Transit Account.--
            (1) In general.--Section 9503(e)(2) of the Internal Revenue 
        Code of 1986 (relating to Mass Transit Account) is amended by 
        adding at the end the following new flush sentence:
        No transfers shall be made under this paragraph after September 
        30, 2005.
            (2) Authorization to expend remaining balances in 
        account.--Section 9503(e)(3) of such Code is amended by 
        striking ``before June 1, 2005''.
    (d) Effective Date.--The amendments made by this section take 
effect on October 1, 2005.

SEC. 4. INFRASTRUCTURE SPECIAL ASSISTANCE FUND.

    (a) Balance of Essential Programs Financing Rate Deposited in 
Fund.--Section 9503 of the Internal Revenue Code of 1986 (as amended by 
section 3(b)(2)) is amended by adding at the end the following:
    ``(h) Establishment of Infrastructure Special Assistance Fund.--
            ``(1) Creation of fund.--There is established in the 
        Highway Trust Fund a separate fund to be known as the 
        `Infrastructure Special Assistance Fund' consisting of such 
        amounts as may be transferred or credited to the Infrastructure 
        Special Assistance Fund as provided in this subsection or 
        section 9602(b).
            ``(2) Transfers to infrastructure special assistance 
        fund.--On the first day of each fiscal year, the Secretary, in 
        consultation with the Secretary of Transportation, shall 
        determine the excess (if any) of--
                    ``(A) the sum of--
                            ``(i) the amounts appropriated in such 
                        fiscal year to the Highway Trust Fund under 
                        subsection (b) which are attributable to the 
                        essential programs financing rate for such 
                        year, plus
                            ``(ii) the amounts appropriated in such 
                        fiscal year to the Highway Trust Fund under 
                        subsection (b) which are attributable to taxes 
                        under sections 4051, 4061, 4071, and 4481 for 
                        such year, over
                    ``(B) the amount appropriated under subsection (c) 
                for such fiscal year,
        and shall transfer such excess to the Infrastructure Special 
        Assistance Fund.
            ``(3) Expenditures from infrastructure special assistance 
        fund.--
                    ``(A) Transitional assistance.--
                            ``(i) In general.--Except as provided in 
                        clause (iv), during fiscal years 2006 through 
                        2009, $1,000,000,000 in the Infrastructure 
                        Special Assistance Fund shall be available to 
                        States for transportation-related program 
                        expenditures.
                            ``(ii) State share.--
                                    ``(I) In general.--Except as 
                                provided in clause (v), each State is 
                                entitled to a share of the amount 
                                specified in clause (i) upon enactment 
                                of legislation providing 1 of the 2 
                                funding mechanisms described in clause 
                                (iii).
                                    ``(II) Determination of state 
                                share.--For purposes of subclause (I), 
                                each State's share shall be determined 
                                in the following manner:
                                            ``(aa) Multiply the 
                                        percentage of the amounts 
                                        appropriated in the latest 
                                        fiscal year for which such data 
                                        are available to the Highway 
                                        Trust Fund under subsection (b) 
                                        which is attributable to taxes 
                                        paid by highway users in the 
                                        State, by the amount specified 
                                        in clause (i). If the result 
                                        does not exceed $15,000,000, 
                                        the State's share equals 
                                        $15,000,000. If the result 
                                        exceeds $15,000,000, the 
                                        State's share is determined 
                                        under item (bb).
                                            ``(bb) Multiply the 
                                        percentage determined under 
                                        item (aa), by the amount 
                                        specified in clause (i) reduced 
                                        by an amount equal to 
                                        $15,000,000 times the number of 
                                        States the share of which is 
                                        determined under item (aa).
                            ``(iii) Legislative funding mechanisms.--A 
                        funding mechanism is described in this clause 
                        as follows:
                                    ``(I) A funding mechanism which 
                                results in revenues for transportation-
                                related projects in the State for 
                                fiscal year 2010 and each succeeding 
                                fiscal year which are equal to the 
                                excess of--
                                            ``(aa) the mean annual 
                                        average of distributions from 
                                        the Highway Trust Fund to the 
                                        State for fiscal years 2000 
                                        through 2005; over
                                            ``(bb) the distributions 
                                        from the Highway Trust Fund to 
                                        the State for such fiscal year 
                                        attributable to the essential 
                                        programs financing rate for 
                                        such year.
                                    ``(II) A funding mechanism which 
                                results in an increase in the State 
                                rate of tax on motor fuels equal to the 
                                decrease in the rate of tax on such 
                                fuels under section 4081 for fiscal 
                                year 2010 and any succeeding fiscal 
                                year.
                            ``(iv) Distribution of remaining amount.--
                        If after September 30, 2009, a portion of the 
                        amount specified in clause (i) remains, the 
                        Secretary, in consultation with the Secretary 
                        of Transportation, shall, on October 1, 2009, 
                        apportion the portion among the States which 
                        received a share of such amount under clause 
                        (ii) and which are not described in clause (v) 
                        using the percentages determined under clause 
                        (ii)(II)(aa) for such States.
                            ``(v) Enforcement of funding mechanism 
                        requirement.--If a State, which enacted 
                        legislation providing for a funding mechanism 
                        described in clause (iii), terminates such 
                        mechanism before fiscal year 2009, the State's 
                        share determined under clauses (ii) and (iv) 
                        shall be deducted from any amount the State 
                        would otherwise receive from the Highway Trust 
                        Fund for fiscal year 2009.
                    ``(B) Additional expenditures from fund.--
                            ``(i) In general.--Amounts in the 
                        Infrastructure Special Assistance Fund, in 
                        excess of the amount specified in subparagraph 
                        (A)(i), shall be available, as provided by 
                        appropriation Acts, to the States for any 
                        surface transportation (including mass transit 
                        and rail) purpose in such States, and the 
                        Secretary shall apportion such excess amounts 
                        among all States using the percentages 
                        determined under clause (ii)(II)(aa) for such 
                        States.
                            ``(ii) Enforcement.--If the Secretary 
                        determines that a State has used amounts under 
                        clause (i) for a purpose which is not a surface 
                        transportation purpose as described in clause 
                        (i), the improperly used amounts shall be 
                        deducted from any amount the State would 
                        otherwise receive from the Highway Trust Fund 
                        for the fiscal year which begins after the date 
                        of the determination.''.
    (b) Effective Date.--The amendment made by this section takes 
effect on October 1, 2005.

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

    (a) In General.--Section 9503(c) of the Internal Revenue Code of 
1986 is amended by adding at the end the following:
            ``(6) Return of excess tax receipts to states for surface 
        transportation purposes.--
                    ``(A) In general.--On the first day of each of 
                fiscal years 2006, 2007, 2008, and 2009, the Secretary, 
                in consultation with the Secretary of Transportation, 
                shall--
                            ``(i) determine the excess (if any) of--
                                    ``(I) the amounts appropriated in 
                                such fiscal year to the Highway Trust 
                                Fund under subsection (b) which are 
                                equivalent to the taxes attributable to 
                                the excess of--
                                            ``(aa) the Highway Trust 
                                        Fund financing rate for such 
                                        year, over
                                            ``(bb) the essential 
                                        programs financing rate for 
                                        such year, over
                                    ``(II) the amounts so appropriated 
                                which are equivalent to the taxes 
                                described in paragraphs (4)(D) and 
                                (5)(B), and
                            ``(ii) allocate the amount determined under 
                        clause (i) among the States (as defined in 
                        section 101(a) of title 23, United States Code) 
                        for surface transportation (including mass 
                        transit and rail) purposes so that--
                                    ``(I) the percentage of that amount 
                                allocated to each State, is equal to
                                    ``(II) the percentage of the amount 
                                determined under clause (i)(I) paid 
                                into the Highway Trust Fund in the 
                                latest fiscal year for which such data 
                                are available which is attributable to 
                                highway users in the State.
                    ``(B) Enforcement.--If the Secretary determines 
                that a State has used amounts under subparagraph (A) 
                for a purpose which is not a surface transportation 
                purpose as described in subparagraph (A), the 
                improperly used amounts shall be deducted from any 
                amount the State would otherwise receive from the 
                Highway Trust Fund for the fiscal year which begins 
                after the date of the determination.''.
    (b) Effective Date.--The amendment made by this section takes 
effect on October 1, 2005.

SEC. 6. FEDERAL-AID FACILITY PRIVATIZATION.

    (a) Definitions.--In this section--
            (1) Executive agency.--The term ``Executive agency'' has 
        the meaning provided in section 105 of title 5, United States 
        Code.
            (2) Privatization.--The term ``privatization'' means the 
        disposition or transfer of a transportation infrastructure 
        asset, whether by sale, lease, or similar arrangement, from a 
        Federal, State, or local government to a private party.
            (3) State or local government.--The term ``State or local 
        government'' means the government of--
                    (A) any State;
                    (B) the District of Columbia;
                    (C) any commonwealth, territory, or possession of 
                the United States;
                    (D) any county, municipality, city, town, township, 
                local public authority, school district, special 
                district, intrastate district, regional or interstate 
                government entity, council of governments, or agency or 
                instrumentality of a local government; or
                    (E) any federally recognized Indian tribe.
            (4) Transportation infrastructure asset.--
                    (A) In general.--The term ``transportation 
                infrastructure asset'' means any surface-
                transportation-related asset financed in whole or in 
                part by the Federal Government, including a road, 
                tunnel, bridge, or mass-transit-related or rail-related 
                asset.
                    (B) Exclusion.--The term does not include any 
                transportation-related asset on the Interstate System 
                (as defined in section 101 of title 23, United States 
                Code).
    (b) Privatization Initiatives by State and Local Governments.--The 
head of each Executive agency shall--
            (1) assist State and local governments in efforts to 
        privatize the transportation infrastructure assets of the State 
        and local governments; and
            (2) subject to subsection (a), approve requests from State 
        and local governments to privatize transportation 
        infrastructure assets and waive or modify any condition 
        relating to the original Federal program that funded the asset.
    (c) Criteria.--The head of an Executive agency shall approve a 
request described in subsection (b)(2) if--
            (1) the State or local government demonstrates that a 
        market mechanism, legally enforceable agreement, or regulatory 
        mechanism will ensure that the transportation infrastructure 
        asset will continue to be used for the general objectives of 
        the original Federal program that funded the asset (which shall 
        not be considered to include every condition required for the 
        recipient of Federal funds to have obtained the original 
        Federal funds), so long as needed for those objectives; and
            (2) the private party purchasing or leasing the 
        transportation infrastructure asset agrees to comply with all 
        applicable conditions of the original Federal program.
    (d) Lack of Obligation to Repay Federal Funds.--A State or local 
government shall have no obligation to repay to any agency of the 
Federal Government any Federal funds received by the State or local 
government in connection with a transportation infrastructure asset 
that is privatized under this section.
    (e) Use of Proceeds.--
            (1) In general.--Subject to paragraph (2), a State or local 
        government may use proceeds from the privatization of a 
        transportation infrastructure asset to the extent permitted 
        under applicable conditions of the original Federal program.
            (2) Recover of certain costs.--Notwithstanding any other 
        provision of law, the State or local government shall be 
        permitted to recover from the privatization of a transportation 
        infrastructure asset--
                    (A) the capital investment in the transportation 
                infrastructure asset made by the State or local 
                government;
                    (B) an amount equal to the unreimbursed operating 
                expenses in the transportation infrastructure asset 
                paid by the State or local government; and
                    (C) a reasonable rate of return on the investment 
                made under subparagraph (A) and expenses paid under 
                subparagraph (B).

SEC. 7. REDUCTION IN TAXES ON GASOLINE, DIESEL FUEL, KEROSENE, AND 
              SPECIAL FUELS FUNDING HIGHWAY TRUST FUND.

    (a) Reduction in Tax Rate.--
            (1) In general.--Section 4081(a)(2)(A) of the Internal 
        Revenue Code of 1986 (relating to rates of tax) is amended--
                    (A) in clause (i), by striking ``18.3 cents'' and 
                inserting ``3 cents''; and
                    (B) in clause (iii), by striking ``24.3 cents'' and 
                inserting ``3 cents''.
            (2) Conforming amendment.--Section 6427(b)(2)(A) of such 
        Code is amended by striking ``7.4 cents'' and inserting ``2.9 
        cents''.
    (b) Additional Conforming Amendments.--
            (1) Section 4041(a)(1)(C)(iii)(I) of the Internal Revenue 
        Code of 1986 is amended by striking ``(4.3 cents per gallon 
        after September 30, 2005)'' and inserting ``(zero after 
        September 30, 2009)''.
            (2) Section 4041(m)(1) of such Code is amended--
                    (A) in subparagraph (A), by striking ``2005'' and 
                inserting ``2009''; and
                    (B) by striking subparagraph (B) and inserting the 
                following:
                    ``(B) zero after September 30, 2009.''.
            (3) Section 4081(d)(1) of such Code is amended by striking 
        ``4.3 cents per gallon after September 30, 2005'' and inserting 
        ``zero after September 30, 2011''.
            (4) Section 9503(b) of such Code is amended--
                    (A) in paragraphs (1) and (2), by striking 
                ``October 1, 2005'' each place it appears and inserting 
                ``October 1, 2011'';
                    (B) in the heading of paragraph (2), by striking 
                ``october 1, 2005'' and inserting ``october 1, 2011'';
                    (C) in paragraph (2), by striking ``after September 
                30, 2005, and before July 1, 2006'' and inserting 
                ``after September 30, 2011, and before July 1, 2012''; 
                and
                    (D) in paragraph (4), by striking ``2005'' each 
                place it appears and inserting ``2009''.
    (c) Floor Stock Refunds.--
            (1) In general.--If--
                    (A) before October 1, 2009, tax has been imposed 
                under section 4081 of the Internal Revenue Code of 1986 
                on any liquid; and
                    (B) on such date such liquid is held by a dealer 
                and has not been used and is intended for sale;
        there shall be credited or refunded (without interest) to the 
        person who paid such tax (in this subsection referred to as the 
        ``taxpayer'') an amount equal to the excess of the tax paid by 
        the taxpayer over the amount of such tax which would be imposed 
        on such liquid had the taxable event occurred on such date.
            (2) Time for filing claims.--No credit or refund shall be 
        allowed or made under this subsection unless--
                    (A) claim therefor is filed with the Secretary of 
                the Treasury before April 1, 2010; and
                    (B) in any case where liquid is held by a dealer 
                (other than the taxpayer) on October 1, 2009--
                            (i) the dealer submits a request for refund 
                        or credit to the taxpayer before January 1, 
                        2010; and
                            (ii) the taxpayer has repaid or agreed to 
                        repay the amount so claimed to such dealer or 
                        has obtained the written consent of such dealer 
                        to the allowance of the credit or the making of 
                        the refund.
            (3) Exception for fuel held in retail stocks.--No credit or 
        refund shall be allowed under this subsection with respect to 
        any liquid in retail stocks held at the place where intended to 
        be sold at retail.
            (4) Definitions.--For purposes of this subsection, the 
        terms ``dealer'' and ``held by a dealer'' have the respective 
        meanings given to such terms by section 6412 of such Code; 
        except that the term ``dealer'' includes a producer.
            (5) Certain rules to apply.--Rules similar to the rules of 
        subsections (b) and (c) of section 6412 and sections 6206 and 
        6675 of such Code shall apply for purposes of this subsection.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to fuel removed 
        after September 30, 2009.
            (2) Additional conforming amendments.--The amendments made 
        by subsection (b) take effect on October 1, 2005.
                                 <all>
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