I

105TH CONGRESS

1ST SESSION H. R. 668

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

Airway Trust Fund excise taxes, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 11, 1997

Mr. ARCHER introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to reinstate

the Airport and Airway Trust Fund excise taxes, 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; AMENDMENT OF 1986 CODE.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Airport and Airway Trust Fund Tax Reinstatement Act

6 of 1997’’.

7 (b) AMENDMENT OF 1986 CODE.—Except as other8 wise expressly provided, whenever in this Act an amend9 ment or repeal is expressed in terms of an amendment

10 to, or repeal of, a section or other provision, the reference
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1 shall be considered to be made to a section or other provi2 sion of the Internal Revenue Code of 1986.

3 SEC. 2. REINSTATEMENT OF AIRPORT AND AIRWAY TRUST

4 FUND EXCISE TAXES.

5 (a) FUEL TAXES.—

6 (1) AVIATION FUEL.—Subparagraph (A) of sec7 tion 4091(b)(3) is amended to read as follows:

8 ‘‘(A) The rate of tax specified in para9 graph (1) shall be 4.3 cents per gallon—

10 ‘‘(i) after December 31, 1996, and be11 fore the date which is 7 days after the date

12 of the enactment of the Airport and Air13 way Trust Fund Tax Reinstatement Act of

14 1997, and

15 ‘‘(ii) after September 30, 1997.’’

16 (2) AVIATION GASOLINE.—Subsection (d) of

17 section 4081 is amended by striking the paragraph

18 (3) added by section 1609(a) of the Small Business

19 Job Protection Act of 1996 and by striking para20 graphs (1) and (2) and inserting the following new

21 paragraphs:

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

23 in clauses (i) and (iii) of subsection (a)(2)(A) shall

24 be 4.3 cents per gallon after September 30, 1999.
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1 ‘‘(2) AVIATION GASOLINE.—The rate of tax

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

3 cents per gallon—

4 ‘‘(A) after December 31, 1996, and before

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

6 enactment of the Airport and Airway Trust

7 Fund Tax Reinstatement Act of 1997, and

8 ‘‘(B) after September 30, 1997.’’

9 (3) NONCOMMERCIAL AVIATION.—Paragraph

10 (3) of section 4041(c) is amended to read as follows:

11 ‘‘(3) TERMINATION.—The rate of the taxes im12 posed by paragraph (1) shall be 4.3 cents per gal13 lon—

14 ‘‘(A) after December 31, 1996, and before

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

16 enactment of the Airport and Airway Trust

17 Fund Tax Reinstatement Act of 1997, and

18 ‘‘(B) after September 30, 1997.’’

19 (b) TICKET TAXES.—

20 (1) PERSONS.—Subsection (g) of section 4261

21 is amended to read as follows:

22 ‘‘(g) APPLICATION OF TAXES.—

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

24 section shall apply to—
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1 ‘‘(A) transportation beginning during the

2 period—

3 ‘‘(i) beginning on the 7th day after

4 the date of the enactment of the Airport

5 and Airway Trust Fund Tax Reinstate6 ment Act of 1997, and

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

8 and

9 ‘‘(B) amounts paid during such period for

10 transportation beginning after such period.

11 ‘‘(2) REFUNDS.—If, as of the date any trans12 portation begins, the taxes imposed by this section

13 would not have applied to such transportation if

14 paid for on such date, any tax paid under paragraph

15 (1)(B) with respect to such transportation shall be

16 treated as an overpayment.’’

17 (2) PROPERTY.—Subsection (d) of section 4271

18 is amended to read as follows:

19 ‘‘(d) APPLICATION OF TAX.—

20 ‘‘(1) IN GENERAL.—The tax imposed by sub21 section (a) shall apply to—

22 ‘‘(A) transportation beginning during the

23 period—

24 ‘‘(i) beginning on the 7th day after

25 the date of the enactment of the Airport
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1 and Airway Trust Fund Tax Reinstate2 ment Act of 1997, and

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

4 and

5 ‘‘(B) amounts paid during such period for

6 transportation beginning after such period.

7 ‘‘(2) REFUNDS.—If, as of the date any trans8 portation begins, the taxes imposed by this section

9 would not have applied to such transportation if

10 paid for on such date, any tax paid under paragraph

11 (1)(B) with respect to such transportation shall be

12 treated as an overpayment.’’

13 (c) TRANSFERS TO AIRPORT AND AIRWAY TRUST

14 FUND.—

15 (1) IN GENERAL.—Subsection (b) of section

16 9502 is amended to read as follows:

17 ‘‘(b) TRANSFERS TO AIRPORT AND AIRWAY TRUST

18 FUND.—There are hereby appropriated to the Airport and

19 Airway Trust Fund amounts equivalent to—

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

21 ‘‘(A) subsections (c) and (e) of section

22 4041 (relating to aviation fuels),

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

24 transportation by air),
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1 ‘‘(C) section 4081 (relating to gasoline)

2 with respect to aviation gasoline (to the extent

3 that the rate of the tax on such gasoline ex4 ceeds 4.3 cents per gallon), and

5 ‘‘(D) section 4091 (relating to aviation

6 fuel) to the extent attributable to the Airport

7 and Airway Trust Fund financing rate, and

8 ‘‘(2) the amounts determined by the Secretary

9 of the Treasury to be equivalent to the amounts of

10 civil penalties collected under section 47107(n) of

11 title 49, United States Code.’’

12 (2) TERMINATION OF FINANCING RATE.—Para13 graph (3) of section 9502(f) is amended to read as

14 follows:

15 ‘‘(3) TERMINATION.—Notwithstanding the pre16 ceding provisions of this subsection, the Airport and

17 Airway Trust Fund financing rate shall be zero with

18 respect to taxes imposed during any period that the

19 rate of the tax imposed by section 4091(b)(1) is 4.3

20 cents per gallon.’’

21 (d) FLOOR STOCKS TAXES ON AVIATION GASOLINE

22 AND AVIATION FUEL.—

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

24 aviation liquid on which tax was imposed under sec25 tion 4081 or 4091 of the Internal Revenue Code of
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1 1986 before the tax effective date and which is held

2 on such date by any person, there is hereby imposed

3 a floor stocks tax of—

4 (A) 15 cents per gallon in the case of avia5 tion gasoline, and

6 (B) 17.5 cents per gallon in the case of

7 aviation fuel.

8 (2) LIABILITY FOR TAX AND METHOD OF PAY9 MENT.—

10 (A) LIABILITY FOR TAX.—A person hold11 ing, on the tax effective date, any aviation liq12 uid to which the tax imposed by paragraph (1)

13 applies shall be liable for such tax.

14 (B) METHOD OF PAYMENT.—The tax im15 posed by paragraph (1) shall be paid in such

16 manner as the Secretary shall prescribe.

17 (C) TIME FOR PAYMENT.—The tax im18 posed by paragraph (1) shall be paid on or be19 fore the first day of the 5th month beginning

20 after the tax effective date.

21 (3) DEFINITIONS.—For purposes of this sub22 section—

23 (A) TAX EFFECTIVE DATE.—The term

24 ‘‘tax effective date’’ means the date which is 7
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1 days after the date of the enactment of this

2 Act.

3 (B) AVIATION LIQUID.—The term ‘‘avia4 tion liquid’’ means aviation gasoline and avia5 tion fuel.

6 (C) AVIATION GASOLINE.—The term

7 ‘‘aviation gasoline’’ has the meaning given such

8 term in section 4081 of such Code.

9 (D) AVIATION FUEL.—The term ‘‘aviation

10 fuel’’ has the meaning given such term by sec11 tion 4093 of such Code.

12 (E) HELD BY A PERSON.—Aviation liquid

13 shall be considered as ‘‘held by a person’’ if

14 title thereto has passed to such person (whether

15 or not delivery to the person has been made).

16 (F) SECRETARY.—The term ‘‘Secretary’’

17 means the Secretary of the Treasury or the

18 Secretary’s delegate.

19 (4) EXCEPTION FOR EXEMPT USES.—The tax

20 imposed by paragraph (1) shall not apply to—

21 (A) aviation liquid held by any person on

22 the tax effective date exclusively for any use for

23 which a credit or refund of the entire tax im24 posed by section 4081 or 4091 of such Code (as

25 the case may be) is allowable for such liquid
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1 purchased on or after such tax effective date for

2 such use, or

3 (B) aviation fuel held by any person on the

4 tax effective date exclusively for any use de5 scribed in section 4092(b) of such Code.

6 (5) EXCEPTION FOR CERTAIN AMOUNTS OF

7 FUEL.—

8 (A) IN GENERAL.—No tax shall be im9 posed by paragraph (1) on any aviation liquid

10 held on the tax effective date by any person if

11 the aggregate amount of such liquid (deter12 mined separately for aviation gasoline and avia13 tion fuel) held by such person on such date does

14 not exceed 2,000 gallons. The preceding sen15 tence shall apply only if such person submits to

16 the Secretary (at the time and in the manner

17 required by the Secretary) such information as

18 the Secretary shall require for purposes of this

19 paragraph.

20 (B) EXEMPT FUEL.—Any liquid to which

21 the tax imposed by paragraph (1) does not

22 apply by reason of paragraph (4) shall not be

23 taken into account under subparagraph (A).

24 (C) CONTROLLED GROUPS.—For purposes

25 of this paragraph—
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1 (i) CORPORATIONS.—

2 (I) IN GENERAL.—All persons

3 treated as a controlled group shall be

4 treated as 1 person.

5 (II) CONTROLLED GROUP.—The

6 term ‘‘controlled group’’ has the

7 meaning given such term by sub8 section (a) of section 1563 of such

9 Code; except that for such purposes,

10 the phrase ‘‘more than 50 percent’’

11 shall be substituted for the phrase ‘‘at

12 least 80 percent’’ each place it ap13 pears in such subsection.

14 (ii) NONINCORPORATED PERSONS

15 UNDER COMMON CONTROL.—Under regula16 tions prescribed by the Secretary, prin17 ciples similar to the principles of clause (i)

18 shall apply to a group of persons under

19 common control where 1 or more of such

20 persons is not a corporation.

21 (6) OTHER LAWS APPLICABLE.—All provisions

22 of law, including penalties, applicable with respect to

23 the taxes imposed by section 4081 or 4091 of such

24 Code shall, insofar as applicable and not inconsistent
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1 with the provisions of this subsection, apply with re2 spect to the floor stocks taxes imposed by paragraph

3 (1) to the same extent as if such taxes were imposed

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

5 (e) EFFECTIVE DATES.—

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

7 subsection (a) shall apply to periods beginning on or

8 after the 7th day after the date of the enactment of

9 this Act.

10 (2) TICKET TAXES.—

11 (A) IN GENERAL.—The amendments made

12 by subsection (b) shall apply to transportation

13 beginning on or after such 7th day.

14 (B) EXCEPTION FOR CERTAIN PAY15 MENTS.—Except as provided in subparagraph

16 (C), the amendments made by subsection (b)

17 shall not apply to any amount paid before such

18 7th day.

19 (C) PAYMENTS OF PROPERTY TRANSPOR20 TATION TAX WITHIN CONTROLLED GROUP.—In

21 the case of the tax imposed by section 4271 of

22 the Internal Revenue Code of 1986, subpara23 graph (B) shall not apply to any amount paid

24 by 1 member of a controlled group for transpor25 tation furnished by another member of such
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1 group. For purposes of the preceding sentence,

2 all persons treated as a single employer under

3 subsection (a) or (b) of section 52 of the Inter4 nal Revenue Code of 1986 shall be treated as

5 members of a controlled group.

6 (f) APPLICATION OF LOOK-BACK SAFE HARBOR FOR

7 DEPOSITS.—Nothing in the look-back safe harbor pre8 scribed in Treasury Regulation section 40.6302(c)–1(c)(2)

9 shall be construed to permit such safe harbor to be used

10 with respect to any tax unless such tax was imposed

11 throughout the look-back period.

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