Union Calendar No. 4

105TH CONGRESS

1ST SESSION H. R. 668

[Report No. 105–5]

A BILL

To amend the Internal Revenue Code of 1986 to

cise taxes, and for other purposes.reinstate the Airport and Airway Trust Fund exFEBRUARY 13, 1997

Committed to the Committee of the Whole House on the

State of the Union and ordered to be printed
IB

Union Calendar No. 4

105TH CONGRESS

1ST SESSION H. R. 668

[Report No. 105–5]

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

FEBRUARY 13, 1997

Committed to the Committee of the Whole House on the State of the Union

and ordered to be printed

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,
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1 SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

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

3 ‘‘Airport and Airway Trust Fund Tax Reinstatement Act

4 of 1997’’.

5 (b) AMENDMENT OF 1986 CODE.—Except as other6 wise expressly provided, whenever in this Act an amend7 ment or repeal is expressed in terms of an amendment

8 to, or repeal of, a section or other provision, the reference

9 shall be considered to be made to a section or other provi10 sion of the Internal Revenue Code of 1986.

11 SEC. 2. REINSTATEMENT OF AIRPORT AND AIRWAY TRUST

12 FUND EXCISE TAXES.

13 (a) FUEL TAXES.—

14 (1) AVIATION FUEL.—Subparagraph (A) of sec15 tion 4091(b)(3) is amended to read as follows:

16 ‘‘(A) The rate of tax specified in para17 graph (1) shall be 4.3 cents per gallon—

18 ‘‘(i) after December 31, 1996, and be19 fore the date which is 7 days after the date

20 of the enactment of the Airport and Air21 way Trust Fund Tax Reinstatement Act of

22 1997, and

23 ‘‘(ii) after September 30, 1997.’’

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

25 section 4081 is amended by striking the paragraph

26 (3) added by section 1609(a) of the Small Business
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1 Job Protection Act of 1996 and by striking para2 graphs (1) and (2) and inserting the following new

3 paragraphs:

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

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

6 be 4.3 cents per gallon after September 30, 1999.

7 ‘‘(2) AVIATION GASOLINE.—The rate of tax

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

9 cents per gallon—

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

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

12 enactment of the Airport and Airway Trust

13 Fund Tax Reinstatement Act of 1997, and

14 ‘‘(B) after September 30, 1997.’’

15 (3) NONCOMMERCIAL AVIATION.—Paragraph

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

17 ‘‘(3) TERMINATION.—The rate of the taxes im18 posed by paragraph (1) shall be 4.3 cents per gal19 lon—

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

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

22 enactment of the Airport and Airway Trust

23 Fund Tax Reinstatement Act of 1997, and

24 ‘‘(B) after September 30, 1997.’’

25 (b) TICKET TAXES.—
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1 (1) PERSONS.—Subsection (g) of section 4261

2 is amended to read as follows:

3 ‘‘(g) APPLICATION OF TAXES.—

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

5 section shall apply to—

6 ‘‘(A) transportation beginning during the

7 period—

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

9 the date of the enactment of the Airport

10 and Airway Trust Fund Tax Reinstate11 ment Act of 1997, and

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

13 and

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

15 transportation beginning after such period.

16 ‘‘(2) REFUNDS.—If, as of the date any trans17 portation begins, the taxes imposed by this section

18 would not have applied to such transportation if

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

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

21 treated as an overpayment.’’

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

23 is amended to read as follows:

24 ‘‘(d) APPLICATION OF TAX.—
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1 ‘‘(1) IN GENERAL.—The tax imposed by sub2 section (a) shall apply to—

3 ‘‘(A) transportation beginning during the

4 period—

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

6 the date of the enactment of the Airport

7 and Airway Trust Fund Tax Reinstate8 ment Act of 1997, and

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

10 and

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

12 transportation beginning after such period.

13 ‘‘(2) REFUNDS.—If, as of the date any trans14 portation begins, the taxes imposed by this section

15 would not have applied to such transportation if

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

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

18 treated as an overpayment.’’

19 (c) TRANSFERS TO AIRPORT AND AIRWAY TRUST

20 FUND.—

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

22 9502 is amended to read as follows:

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

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

25 Airway Trust Fund amounts equivalent to—
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1 ‘‘(1) the taxes received in the Treasury under—

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

3 4041 (relating to aviation fuels),

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

5 transportation by air),

6 ‘‘(C) section 4081 (relating to gasoline)

7 with respect to aviation gasoline (to the extent

8 that the rate of the tax on such gasoline ex9 ceeds 4.3 cents per gallon), and

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

11 fuel) to the extent attributable to the Airport

12 and Airway Trust Fund financing rate, and

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

14 of the Treasury to be equivalent to the amounts of

15 civil penalties collected under section 47107(n) of

16 title 49, United States Code.’’

17 (2) TERMINATION OF FINANCING RATE.—Para18 graph (3) of section 9502(f) is amended to read as

19 follows:

20 ‘‘(3) TERMINATION.—Notwithstanding the pre21 ceding provisions of this subsection, the Airport and

22 Airway Trust Fund financing rate shall be zero with

23 respect to taxes imposed during any period that the

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

25 cents per gallon.’’
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1 (d) FLOOR STOCKS TAXES ON AVIATION GASOLINE

2 AND AVIATION FUEL.—

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

4 aviation liquid on which tax was imposed under sec5 tion 4081 or 4091 of the Internal Revenue Code of

6 1986 before the tax effective date and which is held

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

8 a floor stocks tax of—

9 (A) 15 cents per gallon in the case of avia10 tion gasoline, and

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

12 aviation fuel.

13 (2) LIABILITY FOR TAX AND METHOD OF PAY14 MENT.—

15 (A) LIABILITY FOR TAX.—A person hold16 ing, on the tax effective date, any aviation liq17 uid to which the tax imposed by paragraph (1)

18 applies shall be liable for such tax.

19 (B) METHOD OF PAYMENT.—The tax im20 posed by paragraph (1) shall be paid in such

21 manner as the Secretary shall prescribe.

22 (C) TIME FOR PAYMENT.—The tax im23 posed by paragraph (1) shall be paid on or be24 fore the first day of the 5th month beginning

25 after the tax effective date.
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1 (3) DEFINITIONS.—For purposes of this sub2 section—

3 (A) TAX EFFECTIVE DATE.—The term

4 ‘‘tax effective date’’ means the date which is 7

5 days after the date of the enactment of this

6 Act.

7 (B) AVIATION LIQUID.—The term ‘‘avia8 tion liquid’’ means aviation gasoline and avia9 tion fuel.

10 (C) AVIATION GASOLINE.—The term

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

12 term in section 4081 of such Code.

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

14 fuel’’ has the meaning given such term by sec15 tion 4093 of such Code.

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

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

18 title thereto has passed to such person (whether

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

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

21 means the Secretary of the Treasury or the

22 Secretary’s delegate.

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

24 imposed by paragraph (1) shall not apply to—
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1 (A) aviation liquid held by any person on

2 the tax effective date exclusively for any use for

3 which a credit or refund of the entire tax im4 posed by section 4081 or 4091 of such Code (as

5 the case may be) is allowable for such liquid

6 purchased on or after such tax effective date for

7 such use, or

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

9 tax effective date exclusively for any use de10 scribed in section 4092(b) of such Code.

11 (5) EXCEPTION FOR CERTAIN AMOUNTS OF

12 FUEL.—

13 (A) IN GENERAL.—No tax shall be im14 posed by paragraph (1) on any aviation liquid

15 held on the tax effective date by any person if

16 the aggregate amount of such liquid (deter17 mined separately for aviation gasoline and avia18 tion fuel) held by such person on such date does

19 not exceed 2,000 gallons. The preceding sen20 tence shall apply only if such person submits to

21 the Secretary (at the time and in the manner

22 required by the Secretary) such information as

23 the Secretary shall require for purposes of this

24 paragraph.
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1 (B) EXEMPT FUEL.—Any liquid to which

2 the tax imposed by paragraph (1) does not

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

4 taken into account under subparagraph (A).

5 (C) CONTROLLED GROUPS.—For purposes

6 of this paragraph—

7 (i) CORPORATIONS.—

8 (I) IN GENERAL.—All persons

9 treated as a controlled group shall be

10 treated as 1 person.

11 (II) CONTROLLED GROUP.—The

12 term ‘‘controlled group’’ has the

13 meaning given such term by sub14 section (a) of section 1563 of such

15 Code; except that for such purposes,

16 the phrase ‘‘more than 50 percent’’

17 shall be substituted for the phrase ‘‘at

18 least 80 percent’’ each place it ap19 pears in such subsection.

20 (ii) NONINCORPORATED PERSONS

21 UNDER COMMON CONTROL.—Under regula22 tions prescribed by the Secretary, prin23 ciples similar to the principles of clause (i)

24 shall apply to a group of persons under
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1 common control where 1 or more of such

2 persons is not a corporation.

3 (6) OTHER LAWS APPLICABLE.—All provisions

4 of law, including penalties, applicable with respect to

5 the taxes imposed by section 4081 or 4091 of such

6 Code shall, insofar as applicable and not inconsistent

7 with the provisions of this subsection, apply with re8 spect to the floor stocks taxes imposed by paragraph

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

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

11 (e) EFFECTIVE DATES.—

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

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

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

15 this Act.

16 (2) TICKET TAXES.—

17 (A) IN GENERAL.—The amendments made

18 by subsection (b) shall apply to transportation

19 beginning on or after such 7th day.

20 (B) EXCEPTION FOR CERTAIN PAY21 MENTS.—Except as provided in subparagraph

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

23 shall not apply to any amount paid before such

24 7th day.
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1 (C) PAYMENTS OF PROPERTY TRANSPOR2 TATION TAX WITHIN CONTROLLED GROUP.—In

3 the case of the tax imposed by section 4271 of

4 the Internal Revenue Code of 1986, subpara5 graph (B) shall not apply to any amount paid

6 by 1 member of a controlled group for transpor7 tation furnished by another member of such

8 group. For purposes of the preceding sentence,

9 all persons treated as a single employer under

10 subsection (a) or (b) of section 52 of the Inter11 nal Revenue Code of 1986 shall be treated as

12 members of a controlled group.

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

14 DEPOSITS.—Nothing in the look-back safe harbor pre15 scribed in Treasury Regulation section 40.6302(c)–1(c)(2)

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

17 with respect to any tax unless such tax was imposed

18 throughout the look-back period.