H. R. 668

One Hundred Fifth Congress

of the

United States of America

AT THE FIRST SESSION

Begun and held at the City of Washington on Tuesday,

the seventh day of January, one thousand nine hundred and ninety-seven

An Act

To amend the Internal Revenue Code of 1986 to reinstate the Airport and Airway

Trust Fund excise taxes, 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; AMENDMENT OF 1986 CODE.

(a) SHORT TITLE.—This Act may be cited as the ‘‘Airport and

Airway Trust Fund Tax Reinstatement Act of 1997’’.

(b) AMENDMENT OF 1986 CODE.—Except as otherwise expressly

provided, whenever in this Act an amendment or repeal is expressed

in terms of an amendment to, or repeal of, a section or other

provision, the reference shall be considered to be made to a section

or other provision of the Internal Revenue Code of 1986.

SEC. 2. REINSTATEMENT OF AIRPORT AND AIRWAY TRUST FUND

EXCISE TAXES.

(a) FUEL TAXES.—

(1) AVIATION FUEL.—Subparagraph (A) of section 4091(b)(3)

is amended to read as follows:

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

be 4.3 cents per gallon—

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

which is 7 days after the date of the enactment of

the Airport and Airway Trust Fund Tax Reinstatement

Act of 1997, and

‘‘(ii) after September 30, 1997.’’.

(2) AVIATION GASOLINE.—Subsection (d) of section 4081 is

amended by striking the paragraph (3) added by section 1609(a)

of the Small Business Job Protection Act of 1996 and by striking

paragraphs (1) and (2) and inserting the following new paragraphs:

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

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

after September 30, 1999.

‘‘(2) AVIATION GASOLINE.—The rate of tax specified in subsection (a)(2)(A)(ii) shall be 4.3 cents per gallon—

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

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

Airport and Airway Trust Fund Tax Reinstatement Act

of 1997, and

‘‘(B) after September 30, 1997.’’.

(3) NONCOMMERCIAL AVIATION.—Paragraph (3) of section

4041(c) is amended to read as follows:
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‘‘(3) TERMINATION.—The rate of the taxes imposed by paragraph (1) shall be 4.3 cents per gallon—

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

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

Airport and Airway Trust Fund Tax Reinstatement Act

of 1997, and

‘‘(B) after September 30, 1997.’’.

(b) TICKET TAXES.—

(1) PERSONS.—Subsection (g) of section 4261 is amended

to read as follows:

‘‘(g) APPLICATION OF TAXES.—

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

apply to—

‘‘(A) transportation beginning during the period—

‘‘(i) beginning on the 7th day after the date of

the enactment of the Airport and Airway Trust Fund

Tax Reinstatement Act of 1997, and

‘‘(ii) ending on September 30, 1997, and

‘‘(B) amounts paid during such period for transportation beginning after such period.

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

the taxes imposed by this section would not have applied to

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

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

shall be treated as an overpayment.’’.

(2) PROPERTY.—Subsection (d) of section 4271 is amended

to read as follows:

‘‘(d) APPLICATION OF TAX.—

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

apply to—

‘‘(A) transportation beginning during the period—

‘‘(i) beginning on the 7th day after the date of

the enactment of the Airport and Airway Trust Fund

Tax Reinstatement Act of 1997, and

‘‘(ii) ending on September 30, 1997, and

‘‘(B) amounts paid during such period for transportation beginning after such period.

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

the taxes imposed by this section would not have applied to

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

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

shall be treated as an overpayment.’’.

(c) TRANSFERS TO AIRPORT AND AIRWAY TRUST FUND.—

(1) IN GENERAL.—Subsection (b) of section 9502 is amended

to read as follows:

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

are hereby appropriated to the Airport and Airway Trust Fund

amounts equivalent to—

‘‘(1) the taxes received in the Treasury under—

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

to aviation fuels),

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

by air),

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

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

tax on such gasoline exceeds 4.3 cents per gallon), and
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‘‘(D) section 4091 (relating to aviation fuel) to the

extent attributable to the Airport and Airway Trust Fund

financing rate, and

‘‘(2) the amounts determined by the Secretary of the Treasury to be equivalent to the amounts of civil penalties collected

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

(2) TERMINATION OF FINANCING RATE.—Paragraph (3) of

section 9502(f) is amended to read as follows:

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

financing rate shall be zero with respect to taxes imposed

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

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

(d) FLOOR STOCKS TAXES ON AVIATION GASOLINE AND AVIATION

FUEL.—

(1) IMPOSITION OF TAX.—In the case of any aviation liquid

on which tax was imposed under section 4081 or 4091 of the

Internal Revenue Code of 1986 before the tax effective date

and which is held on such date by any person, there is hereby

imposed a floor stocks tax of—

(A) 15 cents per gallon in the case of aviation gasoline,

and

(B) 17.5 cents per gallon in the case of aviation fuel.

(2) LIABILITY FOR TAX AND METHOD OF PAYMENT.—

(A) LIABILITY FOR TAX.—A person holding, on the tax

effective date, any aviation liquid to which the tax imposed

by paragraph (1) applies shall be liable for such tax.

(B) METHOD OF PAYMENT.—The tax imposed by paragraph (1) shall be paid in such manner as the Secretary

shall prescribe.

(C) TIME FOR PAYMENT.—The tax imposed by paragraph (1) shall be paid on or before the first day of the

5th month beginning after the tax effective date.

(3) DEFINITIONS.—For purposes of this subsection—

(A) TAX EFFECTIVE DATE.—The term ‘‘tax effective date’’

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

enactment of this Act.

(B) AVIATION LIQUID.—The term ‘‘aviation liquid’’

means aviation gasoline and aviation fuel.

(C) AVIATION GASOLINE.—The term ‘‘aviation gasoline’’

has the meaning given such term in section 4081 of such

Code.

(D) AVIATION FUEL.—The term ‘‘aviation fuel’’ has the

meaning given such term by section 4093 of such Code.

(E) HELD BY A PERSON.—Aviation liquid shall be considered as ‘‘held by a person’’ if title thereto has passed

to such person (whether or not delivery to the person

has been made).

(F) SECRETARY.—The term ‘‘Secretary’’ means the

Secretary of the Treasury or the Secretary’s delegate.

(4) EXCEPTION FOR EXEMPT USES.—The tax imposed by

paragraph (1) shall not apply to—

(A) aviation liquid held by any person on the tax effective date exclusively for any use for which a credit or

refund of the entire tax imposed by section 4081 or 4091

of such Code (as the case may be) is allowable for such
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liquid purchased on or after such tax effective date for

such use, or

(B) aviation fuel held by any person on the tax effective

date exclusively for any use described in section 4092(b)

of such Code.

(5) EXCEPTION FOR CERTAIN AMOUNTS OF FUEL.—

(A) IN GENERAL.—No tax shall be imposed by paragraph (1) on any aviation liquid held on the tax effective

date by any person if the aggregate amount of such liquid

(determined separately for aviation gasoline and aviation

fuel) held by such person on such date does not exceed

2,000 gallons. The preceding sentence shall apply only if

such person submits to the Secretary (at the time and

in the manner required by the Secretary) such information

as the Secretary shall require for purposes of this paragraph.

(B) EXEMPT FUEL.—Any liquid to which the tax

imposed by paragraph (1) does not apply by reason of

paragraph (4) shall not be taken into account under

subparagraph (A).

(C) CONTROLLED GROUPS.—For purposes of this paragraph—

(i) CORPORATIONS.—

(I) IN GENERAL.—All persons treated as a controlled group shall be treated as 1 person.

(II) CONTROLLED GROUP.—The term ‘‘controlled group’’ has the meaning given such term

by subsection (a) of section 1563 of such Code;

except that for such purposes, the phrase ‘‘more

than 50 percent’’ shall be substituted for the

phrase ‘‘at least 80 percent’’ each place it appears

in such subsection.

(ii) NONINCORPORATED PERSONS UNDER COMMON

CONTROL.—Under regulations prescribed by the

Secretary, principles similar to the principles of clause

(i) shall apply to a group of persons under common

control where 1 or more of such persons is not a

corporation.

(6) OTHER LAWS APPLICABLE.—All provisions of law, including penalties, applicable with respect to the taxes imposed

by section 4081 or 4091 of such Code shall, insofar as applicable

and not inconsistent with the provisions of this subsection,

apply with respect to the floor stocks taxes imposed by paragraph (1) to the same extent as if such taxes were imposed

by such section 4081 or 4091, as the case may be.

(e) EFFECTIVE DATES.—

(1) FUEL TAXES.—The amendments made by subsection

(a) shall apply to periods beginning on or after the 7th day

after the date of the enactment of this Act.

(2) TICKET TAXES.—

(A) IN GENERAL.—The amendments made by subsection

(b) shall apply to transportation beginning on or after

such 7th day.

(B) EXCEPTION FOR CERTAIN PAYMENTS.—Except as

provided in subparagraph (C), the amendments made by

subsection (b) shall not apply to any amount paid before

such 7th day.
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(C) PAYMENTS OF PROPERTY TRANSPORTATION TAX

WITHIN CONTROLLED GROUP.—In the case of the tax imposed

by section 4271 of the Internal Revenue Code of 1986,

subparagraph (B) shall not apply to any amount paid by

1 member of a controlled group for transportation furnished

by another member of such group. For purposes of the

preceding sentence, all persons treated as a single employer

under subsection (a) or (b) of section 52 of the Internal

Revenue Code of 1986 shall be treated as members of

a controlled group.

(f) APPLICATION OF LOOK-BACK SAFE HARBOR FOR DEPOSITS.—

Nothing in the look-back safe harbor prescribed in Treasury Regulation section 40.6302(c)–1(c)(2) shall be construed to permit such

safe harbor to be used with respect to any tax unless such tax

was imposed throughout the look-back period.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.