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PART VII—TOTAL ACCOUNTABILITY 
SEC. 5271. TOTAL ACCOUNTABILITY. 
(a) TAXATION OF REPORTABLE LIQUIDS.— 
(1) IN GENERAL.—Section 4081(a), as amended 
by this Act, is amended— 
(A) by inserting ‘‘or reportable liquid’’ after 
‘‘taxable fuel’’ each place it appears, and 
(B) by inserting ‘‘such liquid’’ after ‘‘such 
fuel’’ in paragraph (1)(A)(iv). 
(2) RATE OF TAX.—Subparagraph (A) of section 
4081(a)(2), as amended by section 5211 of this Act, 
is amended by striking ‘‘and’’ at the end of clause 
(iii), by striking the period at the end of clause (iv) 
and inserting ‘‘, and’’, and by adding at the end the 
following new clause: 
‘‘(v) in the case of reportable liquids, 
the 
rate 
determined 
under 
section 
4083(c)(2).’’. 
(3) EXEMPTION.—Section 4081(a)(1) is amended 
by adding at the end the following new subparagraph: 
‘‘(C) EXEMPTION FOR REGISTERED TRANS-
FERS OF REPORTABLE LIQUIDS.—The tax im-
posed by this paragraph shall not apply to any 
removal, entry, or sale of a reportable liquid if— 
‘‘(i) such removal, entry, or sale is to 
a registered person who certifies that such
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liquid will not be used as a fuel or in the 
production of a fuel, or 
‘‘(ii) the sale is to the ultimate pur-
chaser of such liquid.’’. 
(4) REPORTABLE
LIQUIDS.—Section 4083, as 
amended by this Act, is amended by redesignating 
subsections (c) and (d) (as redesignated by section 
5211 of this Act) as subsections (d) and (e), respec-
tively, and by inserting after subsection (b) the fol-
lowing new section: 
‘‘(c) REPORTABLE LIQUID.—For purposes of this sub-
part— 
‘‘(1) IN GENERAL.—The term ‘reportable liquid’ 
means any petroleum-based liquid other than a tax-
able fuel. 
‘‘(2) TAXATION.— 
‘‘(A) GASOLINE BLEND STOCKS AND ADDI-
TIVES.—Gasoline blend stocks and additives 
which are reportable liquids (as defined in para-
graph (1)) shall be subject to the rate of tax 
under clause (i) of section 4081(a)(2)(A). 
‘‘(B) OTHER REPORTABLE LIQUIDS.—Any 
reportable liquid (as defined in paragraph (1)) 
not described in subparagraph (A) shall be sub-
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ject to the rate of tax under clause (iii) of section 
4081(a)(2)(A).’’. 
(5) CONFORMING AMENDMENTS.— 
(A) Section 4081(e) is amended by inserting 
‘‘or reportable liquid’’ after ‘‘taxable fuel’’. 
(B) Section 4083(d) (relating to certain use 
defined as removal), as redesignated by para-
graph (4), is amended by inserting ‘‘or report-
able liquid’’ after ‘‘taxable fuel’’. 
(C) Section 4083(e)(1) (relating to adminis-
trative authority), as redesignated by paragraph 
(4), is amended— 
(i) in subparagraph (A)— 
(I) by inserting ‘‘or reportable liq-
uid’’ after ‘‘taxable fuel’’, and 
(II) by inserting ‘‘or such liquid’’ 
after ‘‘such fuel’’ each place it appears, 
and 
(ii) in subparagraph (B), by inserting 
‘‘or any reportable liquid’’ after ‘‘any tax-
able fuel’’. 
(D) Section 4101(a)(2), as added by section 
5243 of this Act, is amended by inserting ‘‘or a 
reportable liquid’’ after ‘‘taxable fuel’’.
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(E) Section 4101(a)(3), as added by section 
5242 of this Act and redesignated by section 
5243 of this Act, is amended by inserting ‘‘or 
any reportable liquid’’ before the period at the 
end. 
(F) Section 4102 is amended by inserting 
‘‘or any reportable liquid’’ before the period at 
the end. 
(G)(i) Section 6718, as added by section 
5241 of this Act, is amended— 
(I) in subsection (a), by inserting ‘‘or 
any reportable liquid (as defined in section 
4083(c)(1))’’ after ‘‘ section 4083(a)(1))’’, 
and 
(II) in the heading, by inserting ‘‘or 
reportable liquids’’ after ‘‘taxable fuel’’. 
(ii) The item relating to section 6718 in 
table of sections for part I of subchapter B of 
chapter 68, as added by section 5241 of this Act, 
is amended by inserting ‘‘or reportable liquids’’ 
after ‘‘taxable fuels’’. 
(H) Section 6427(h) is amended to read as 
follows:
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‘‘(h) GASOLINE BLEND STOCKS OR ADDITIVES AND 
REPORTABLE LIQUIDS.—Except as provided in subsection 
(k)— 
‘‘(1) if any gasoline blend stock or additive 
(within the meaning of section 4083(a)(2)) is not 
used by any person to produce gasoline and such per-
son establishes that the ultimate use of such gasoline 
blend stock or additive is not to produce gasoline, or 
‘‘(2) if any reportable liquid (within the mean-
ing of section 4083(c)(1)) is not used by any person 
to produce a taxable fuel and such person establishes 
that the ultimate use of such reportable liquid is not 
to produce a taxable fuel, 
then the Secretary shall pay (without interest) to such per-
son an amount equal to the aggregate amount of the tax 
imposed on such person with respect to such gasoline blend 
stock or additive or such reportable fuel.’’. 
(I) Section 7232, as amended by this Act, 
is amended by inserting ‘‘or reportable liquid 
(within the meaning of section 4083(c)(1))’’ after 
‘‘section 4083)’’. 
(J) Section 343 of the Trade Act of 2002, as 
amended by section 5252 of this Act, is amended 
by inserting ‘‘and reportable liquids (as defined
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in section 4083(c)(1) of such Code)’’ after ‘‘Inter-
nal Revenue Code of 1986)’’. 
(b) DYED DIESEL.—Section 4082(a) is amended by 
striking ‘‘and’’ at the end of paragraph (2), by striking the 
period at the end of paragraph (3) and inserting ‘‘and’’, 
and by inserting after paragraph (3) the following new 
paragraph: 
‘‘(4) which is removed, entered, or sold by a per-
son registered under section 4101.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to reportable liquids (as defined in sec-
tion 4083(c) of the Internal Revenue Code) and fuel sold 
or used after September 30, 2004. 
SEC. 5272. EXCISE TAX REPORTING. 
(a) IN GENERAL.—Part II of subchapter A of chapter 
61 is amended by adding at the end the following new sub-
part: 
‘‘Subpart E—Excise Tax Reporting 
‘‘SEC. 6025. RETURNS RELATING TO FUEL TAXES. 
‘‘(a) IN GENERAL.—The Secretary shall require any 
person liable for the tax imposed under Part III of sub-
chapter A of chapter 32 to file a return of such tax on a 
monthly basis. 
‘‘(b) INFORMATION INCLUDED WITH RETURN.—The 
Secretary shall require any person filing a return under
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subsection (a) to provide information regarding any refined 
product (whether or not such product is taxable under this 
title) removed from a terminal during the period for which 
such return applies.’’. 
(b) CONFORMING AMENDMENT.—The table of parts for 
subchapter A of chapter 61 is amended by adding at the 
end the following new item: 
‘‘Subpart E—Excise Tax Reporting’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to fuel sold or used after September 30, 
2004. 
SEC. 5273. INFORMATION REPORTING. 
(a) IN GENERAL.—Section 4101(d) is amended by 
adding at the end the following new flush sentence: 
‘‘The Secretary shall require reporting under the previous 
sentence with respect to taxable fuels removed, entered, or 
transferred from any refinery, pipeline, or vessel which is 
registered under this section.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply on October 1, 2004. 
Subtitle D—Definition of Highway 
Vehicle 
SEC. 5301. EXEMPTION FROM CERTAIN EXCISE TAXES FOR 
MOBILE MACHINERY. 
(a) EXEMPTION FROM TAX ON HEAVY TRUCKS AND 
TRAILERS SOLD AT RETAIL.—
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(1) IN GENERAL.—Section 4053 (relating to ex-
emptions) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(8) MOBILE
MACHINERY.—Any vehicle which 
consists of a chassis— 
‘‘(A) to which there has been permanently 
mounted (by welding, bolting, riveting, or other 
means) machinery or equipment to perform a 
construction, manufacturing, processing, farm-
ing, mining, drilling, timbering, or similar oper-
ation if the operation of the machinery or equip-
ment is unrelated to transportation on or off the 
public highways, 
‘‘(B) which has been specially designed to 
serve only as a mobile carriage and mount (and 
a power source, where applicable) for the par-
ticular machinery or equipment involved, wheth-
er or not such machinery or equipment is in op-
eration, and 
‘‘(C) which, by reason of such special de-
sign, could not, without substantial structural 
modification, be used as a component of a vehicle 
designed to perform a function of transporting 
any load other than that particular machinery
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or equipment or similar machinery or equipment 
requiring such a specially designed chassis.’’. 
(2) EFFECTIVE DATE.—The amendment made by 
this subsection shall take effect on the day after the 
date of the enactment of this Act. 
(b) EXEMPTION FROM TAX ON USE OF CERTAIN VEHI-
CLES.— 
(1) IN GENERAL.—Section 4483 (relating to ex-
emptions) is amended by redesignating subsection (g) 
as subsection (h) and by inserting after subsection (f) 
the following new subsection: 
‘‘(g) EXEMPTION FOR MOBILE MACHINERY.—No tax 
shall be imposed by section 4481 on the use of any vehicle 
described in section 4053(8).’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect on the day after the 
date of the enactment of this Act. 
(d) EXEMPTION FROM FUEL TAXES.— 
(1) IN GENERAL.—Section 6421(e)(2) (defining 
off-highway business use) is amended by adding at 
the end the following new subparagraph: 
‘‘(C) USES IN MOBILE MACHINERY.— 
‘‘(i) IN GENERAL.—The term ‘off-high-
way business use’ shall include any use in
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a vehicle which meets the requirements de-
scribed in clause (ii). 
‘‘(ii) REQUIREMENTS FOR MOBILE MA-
CHINERY.—The requirements described in 
this clause are— 
‘‘(I) the design-based test, and 
‘‘(II) the use-based test. 
‘‘(iii) DESIGN-BASED TEST.—For pur-
poses of clause (ii)(I), the design-based test 
is met if the vehicle consists of a chassis— 
‘‘(I) to which there has been per-
manently mounted (by welding, bolt-
ing, riveting, or other means) machin-
ery or equipment to perform a con-
struction, manufacturing, processing, 
farming, mining, drilling, timbering, 
or similar operation if the operation of 
the machinery or equipment is unre-
lated to transportation on or off the 
public highways, 
‘‘(II) which has been specially de-
signed to serve only as a mobile car-
riage and mount (and a power source, 
where applicable) for the particular 
machinery 
or 
equipment 
involved,
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(2) ANNUAL
REFUND
OF
TAX
PAID.—Section 
6427(i)(2) (relating to exceptions) is amended by add-
ing at the end the following new subparagraph: 
‘‘(C) NONAPPLICATION
OF
PARAGRAPH.— 
This paragraph shall not apply to any fuel used 
in any off-highway business use described in sec-
tion 6421(e)(2)(C).’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years begin-
ning after the date of the enactment of this Act. 
SEC. 5302. MODIFICATION OF DEFINITION OF OFF-HIGHWAY 
VEHICLE. 
(a) IN GENERAL.—Section 7701(a) (relating to defini-
tions) is amended by adding at the end the following new 
paragraph: 
‘‘(48) OFF-HIGHWAY VEHICLES.— 
‘‘(A) OFF-HIGHWAY TRANSPORTATION VEHI-
CLES.— 
‘‘(i) IN GENERAL.—A vehicle shall not 
be treated as a highway vehicle if such vehi-
cle is specially designed for the primary 
function of transporting a particular type 
of load other than over the public highway 
and because of this special design such vehi-
cle’s capability to transport a load over the
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public highway is substantially limited or 
impaired. 
‘‘(ii) DETERMINATION
OF
VEHICLE’S 
DESIGN.—For purposes of clause (i), a vehi-
cle’s design is determined solely on the basis 
of its physical characteristics. 
‘‘(iii) DETERMINATION
OF
SUBSTAN-
TIAL
LIMITATION
OR
IMPAIRMENT.—For 
purposes of clause (i), in determining 
whether substantial limitation or impair-
ment exists, account may be taken of factors 
such as the size of the vehicle, whether such 
vehicle is subject to the licensing, safety, 
and other requirements applicable to high-
way vehicles, and whether such vehicle can 
transport a load at a sustained speed of at 
least 25 miles per hour. It is immaterial 
that a vehicle can transport a greater load 
off the public highway than such vehicle is 
permitted to transport over the public high-
way. 
‘‘(B) NONTRANSPORTATION
TRAILERS
AND 
SEMITRAILERS.—A trailer or semitrailer shall 
not be treated as a highway vehicle if it is spe-
cially designed to function only as an enclosed
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stationary shelter for the carrying on of an off- 
highway function at an off-highway site.’’. 
(c) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendment made by this section shall 
take effect on the date of the enactment of this Act. 
(2) FUEL TAXES.—With respect to taxes imposed 
under subchapter B of chapter 31 and part III of sub-
chapter A of chapter 32, the amendment made by this 
section shall apply to taxable periods beginning after 
the date of the enactment of this Act. 
Subtitle E—Excise Tax Reform and 
Simplification 
PART I—HIGHWAY EXCISE TAXES 
SEC. 5401. DEDICATION OF GAS GUZZLER TAX TO HIGHWAY 
TRUST FUND. 
(a) IN GENERAL.—Section 9503(b)(1) (relating to 
transfer to Highway Trust Fund of amounts equivalent to 
certain taxes), as amended by section 5101 of this Act, is 
amended by redesignating subparagraphs (C), (D), and (E) 
as subparagraphs (D), (E), and (F), respectively, and by 
inserting after subparagraph (B) the following new sub-
paragraph: 
‘‘(C) section 4064 (relating to gas guzzler 
tax),’’.
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(b) UNIFORM APPLICATION OF TAX.—Subparagraph 
(A) of section 4064(b)(1) (defining automobile) is amended 
by striking the second sentence. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on the date of the enactment of this 
Act. 
SEC. 5402. REPEAL CERTAIN EXCISE TAXES ON RAIL DIESEL 
FUEL AND INLAND WATERWAY BARGE FUELS. 
(a) TAXES ON TRAINS.— 
(1) IN GENERAL.—Subparagraph (A) of section 
4041(a)(1) is amended by striking ‘‘or a diesel-pow-
ered train’’ each place it appears and by striking ‘‘or 
train’’. 
(2) CONFORMING AMENDMENTS.— 
(A) 
Subparagraph 
(C) 
of 
section 
4041(a)(1), as amended by section 5001 of this 
Act, is amended by striking clause (ii) and by 
redesignating clause (iii) as clause (ii). 
(B) Subparagraph (C) of section 4041(b)(1) 
is amended by striking all that follows ‘‘section 
6421(e)(2)’’ and inserting a period. 
(C) Subsection (d) of section 4041 is 
amended by redesignating paragraph (3) as 
paragraph (4) and by inserting after paragraph 
(2) the following new paragraph:
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‘‘(3) DIESEL FUEL USED IN TRAINS.—There is 
hereby imposed a tax of 0.1 cent per gallon on any 
liquid other than gasoline (as defined in section 
4083)— 
‘‘(A) sold by any person to an owner, lessee, 
or other operator of a diesel-powered train for 
use as a fuel in such train, or 
‘‘(B) used by any person as a fuel in a die-
sel-powered train unless there was a taxable sale 
of such fuel under subparagraph (A). 
No tax shall be imposed by this paragraph on the sale 
or use of any liquid if tax was imposed on such liq-
uid under section 4081.’’. 
(D) Subsection (f) of section 4082 is amend-
ed by striking ‘‘section 4041(a)(1)’’ and inserting 
‘‘subsections (d)(3) and (a)(1) of section 4041, 
respectively’’. 
(E) Subparagraphs (A) and (B) of section 
4083(a)(3), as amended by section 5261 of this 
Act, are amended by striking ‘‘or a diesel-pow-
ered train’’. 
(F) Paragraph (3) of section 6421(f) is 
amended to read as follows: 
‘‘(3) GASOLINE USED IN TRAINS.—In the case of 
gasoline used as a fuel in a train, this section shall
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not apply with respect to the Leaking Underground 
Storage Tank Trust Fund financing rate under sec-
tion 4081.’’. 
(G) Paragraph (3) of section 6427(l) is 
amended to read as follows: 
‘‘(3) REFUND OF CERTAIN TAXES ON FUEL USED 
IN DIESEL-POWERED TRAINS.—For purposes of this 
subsection, the term ‘nontaxable use’ includes fuel 
used in a diesel-powered train. The preceding sentence 
shall not apply to the tax imposed by section 4041(d) 
and the Leaking Underground Storage Tank Trust 
Fund financing rate under section 4081 except with 
respect to fuel sold for exclusive use by a State or any 
political subdivision thereof.’’. 
(b) FUEL USED ON INLAND WATERWAYS.— 
(1) IN
GENERAL.—Paragraph (1) of section 
4042(b) is amended by adding ‘‘and’’ at the end of 
subparagraph (A), by striking ‘‘, and’’ at the end of 
subparagraph (B) and inserting a period, and by 
striking subparagraph (C). 
(2) CONFORMING AMENDMENT.—Paragraph (2) 
of section 4042(b) is amended by striking subpara-
graph (C). 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on October 1, 2004.
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PART II—AQUATIC EXCISE TAXES 
SEC. 5411. ELIMINATION OF AQUATIC RESOURCES TRUST 
FUND AND TRANSFORMATION OF SPORT FISH 
RESTORATION ACCOUNT. 
(a) SIMPLIFICATION OF FUNDING FOR BOAT SAFETY 
ACCOUNT.— 
(1) IN GENERAL.—Section 9503(c)(3) (relating 
to transfers from Trust Fund for motorboat fuel 
taxes), as redesignated by section 5002 of this Act, is 
amended— 
(A) by striking ‘‘Fund—’’ and all that fol-
lows through ‘‘shall be transferred’’ in subpara-
graph (B) and inserting ‘‘Fund which is attrib-
utable to motorboat fuel taxes shall be trans-
ferred’’, and 
(B) by striking subparagraph (A), and 
(C) by redesignating subparagraphs (B) 
through (E) as subparagraphs (A) through (D), 
respectively. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 9503(b)(4), as amended by sec-
tion 5102 of this Act, is amended— 
(i) by adding ‘‘or’’ at the end of sub-
paragraph (B),
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HR 3550 EAS 
(ii) by striking the comma at the end 
of subparagraph (C) and inserting a period, 
and 
(iii) by striking subparagraph (D). 
(B) Subparagraph (B) of section 9503(c)(3), 
as redesignated by section 5002 of this Act and 
subsection (a)(3), is amended— 
(i) by striking ‘‘ACCOUNT’’ in the head-
ing and inserting ‘‘TRUST FUND’’, 
(ii) by striking ‘‘or (B)’’ in clause (ii), 
and 
(iii) by striking ‘‘Account in the 
Aquatic Resources’’. 
(C) Subparagraph (C) of section 9503(c)(3), 
as redesignated by section 5002 of this Act and 
subsection (a)(3), is amended by striking ‘‘, but 
only to the extent such taxes are deposited into 
the Highway Trust Fund’’. 
(D) Paragraph (4) of section 9503(c), as re-
designated by section 5002 of this Act, is amend-
ed— 
(i) by striking ‘‘Account in the Aquatic 
Resources’’ in subparagraph (A), and
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HR 3550 EAS 
(ii) by striking ‘‘, but only to the ex-
tent such taxes are deposited into the High-
way Trust Fund’’ in subparagraph (B). 
(b) MERGING OF ACCOUNTS.— 
(1) IN GENERAL.—Subsection (a) of section 9504 
is amended to read as follows: 
‘‘(a) CREATION OF TRUST FUND.—There is hereby es-
tablished in the Treasury of the United States a trust fund 
to be known as the ‘Sport Fish Restoration Trust Fund’. 
Such Trust Fund shall consist of such amounts as may be 
appropriated, credited, or paid to it as provided in this 
section, section 9503(c)(3), section 9503(c)(4), or section 
9602(b).’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subsection (b) of section 9504 is amend-
ed— 
(i) by striking ‘‘ACCOUNT’’ in the head-
ing and inserting ‘‘TRUST FUND’’, 
(ii) by striking ‘‘Account’’ both places 
it appears in paragraphs (1) and (2) and 
inserting ‘‘Trust Fund’’, and 
(iii) by striking ‘‘ACCOUNT’’ both 
places it appears in the headings for para-
graphs (1) and (2) and inserting ‘‘TRUST 
FUND’’.
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(B) Subsection (d) of section 9504, as 
amended by section 5001 of this Act, is amend-
ed— 
(i) by striking ‘‘AQUATIC RESOURCES’’ 
in the heading, 
(ii) by striking ‘‘any Account in the 
Aquatic Resources’’ in paragraph (1) and 
inserting ‘‘the Sports Fish Restoration’’, 
and 
(iii) by striking ‘‘any such Account’’ 
in paragraph (1) and inserting ‘‘such Trust 
Fund’’. 
(C) Subsection (e) of section 9504, as 
amended by section 5002 of this Act, is amended 
by striking ‘‘Boat Safety Account and Sport 
Fish Restoration Account’’ and inserting ‘‘Sport 
Fish Restoration Trust Fund’’. 
(D) Section 9504 is amended by striking 
‘‘AQUATIC RESOURCES’’ in the heading and 
inserting ‘‘SPORT FISH RESTORATION’’. 
(E) The item relating to section 9504 in the 
table of sections for subchapter A of chapter 98 
is amended by striking ‘‘aquatic resources’’ and 
inserting ‘‘sport fish restoration’’.
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HR 3550 EAS 
(c) PHASEOUT
OF BOAT SAFETY ACCOUNT.—Sub-
section (c) of section 9504 is amended to read as follows: 
‘‘(c) EXPENDITURES FROM BOAT SAFETY ACCOUNT.— 
Amounts remaining in the Boat Safety Account on October 
1, 2004, and amounts thereafter credited to the Account 
under section 9602(b), shall be available, as provided by 
appropriation Acts, for making expenditures before October 
1, 2009, to carry out the purposes of section 13106 of title 
46, United States Code (as in effect on the date of the enact-
ment of the Safe, Accountable, Flexible, and Efficient 
Transportation Equity Act of 2004).’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on October 1, 2004. 
SEC. 5412. EXEMPTION OF LED DEVICES FROM SONAR DE-
VICES SUITABLE FOR FINDING FISH. 
(a) IN GENERAL.—Section 4162(b) (defining sonar de-
vice suitable for finding fish) is amended by striking ‘‘or’’ 
at the end of paragraph (3), by striking the period at the 
end of paragraph (4) and inserting ‘‘, or’’, and by adding 
at the end the following new paragraph: 
‘‘(5) an LED display.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to articles sold by the manufacturer, 
producer, or importer after September 30, 2004.
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HR 3550 EAS 
SEC. 5413. REPEAL OF HARBOR MAINTENANCE TAX ON EX-
PORTS. 
(a) IN GENERAL.—Subsection (d) of section 4462 (re-
lating to definitions and special rules) is amended to read 
as follows: 
‘‘(d) NONAPPLICABILITY OF TAX TO EXPORTS.—The 
tax imposed by section 4461(a) shall not apply to any port 
use with respect to any commercial cargo to be exported 
from the United States.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 4461(c)(1) is amended by adding 
‘‘or’’ at the end of subparagraph (A), by striking sub-
paragraph (B), and by redesignating subparagraph 
(C) as subparagraph (B). 
(2) Section 4461(c)(2) is amended by striking 
‘‘imposed—’’ and all that follows through ‘‘in any 
other case,’’ and inserting ‘‘imposed’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall take effect before, on, and after the date of the 
enactment of this Act. 
SEC. 5414. CAP ON EXCISE TAX ON CERTAIN FISHING 
EQUIPMENT. 
(a) IN GENERAL.—Paragraph (1) of section 4161(a) 
(relating to sport fishing equipment) is amended to read 
as follows: 
‘‘(1) IMPOSITION OF TAX.—
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HR 3550 EAS 
‘‘(A) IN
GENERAL.—There is hereby im-
posed on the sale of any article of sport fishing 
equipment by the manufacturer, producer, or im-
porter a tax equal to 10 percent of the price for 
which so sold. 
‘‘(B) LIMITATION
ON
TAX
IMPOSED
ON 
FISHING RODS AND POLES.—The tax imposed by 
subparagraph (A) on any fishing rod or pole 
shall not exceed $10.’’. 
(b) CONFORMING AMENDMENTS.—Section 4161(a)(2) 
is amended by striking ‘‘paragraph (1)’’ both places it ap-
pears and inserting ‘‘paragraph (1)(A)’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to articles sold by the manufacturer, 
producer, or importer after September 30, 2004. 
SEC. 5415. REDUCTION IN RATE OF TAX ON PORTABLE AER-
ATED BAIT CONTAINERS. 
(a) IN GENERAL.—Section 4161(a)(2)(A) (relating to 
3 percent rate of tax for electric outboard motors and sonar 
devices suitable for finding fish) is amended by inserting 
‘‘or a portable aerated bait container’’ after ‘‘fish’’. 
(b) CONFORMING AMENDMENT.—The heading of sec-
tion 4161(a)(2) is amended by striking ‘‘ELECTRIC OUT-
BOARD MOTORS AND SONAR DEVICES SUITABLE FOR FIND-
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HR 3550 EAS 
ING FISH’’ and inserting ‘‘CERTAIN SPORT FISHING EQUIP-
MENT’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to articles sold by the manufacturer, 
producer, or importer after September 30, 2004. 
PART III—AERIAL EXCISE TAXES 
SEC. 5421. CLARIFICATION OF EXCISE TAX EXEMPTIONS 
FOR AGRICULTURAL AERIAL APPLICATORS 
AND EXEMPTION FOR FIXED-WING AIRCRAFT 
ENGAGED IN FORESTRY OPERATIONS. 
(a) NO WAIVER BY FARM OWNER, TENANT, OR OPER-
ATOR
NECESSARY.—Subparagraph 
(B) 
of 
section 
6420(c)(4) (relating to certain farming use other than by 
owner, etc.) is amended to read as follows: 
‘‘(B) if the person so using the gasoline is 
an aerial or other applicator of fertilizers or 
other substances and is the ultimate purchaser of 
the gasoline, then subparagraph (A) of this para-
graph shall not apply and the aerial or other ap-
plicator shall be treated as having used such gas-
oline on a farm for farming purposes.’’. 
(b) EXEMPTION INCLUDES FUEL USED BETWEEN AIR-
FIELD AND FARM.—Section 6420(c)(4), as amended by sub-
section (a), is amended by adding at the end the following 
new flush sentence:
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‘‘For purposes of this paragraph, in the case of an 
aerial applicator, gasoline shall be treated as used on 
a farm for farming purposes if the gasoline is used 
for the direct flight between the airfield and 1 or more 
farms.’’. 
(c) EXEMPTION FROM TAX ON AIR TRANSPORTATION 
OF PERSONS FOR FORESTRY PURPOSES EXTENDED TO 
FIXED-WING AIRCRAFT.—Subsection (f) of section 4261 (re-
lating to tax on air transportation of persons) is amended 
to read as follows: 
‘‘(f) EXEMPTION FOR CERTAIN USES.—No tax shall be 
imposed under subsection (a) or (b) on air transportation— 
‘‘(1) by helicopter for the purpose of transporting 
individuals, equipment, or supplies in the exploration 
for, or the development or removal of, hard minerals, 
oil, or gas, or 
‘‘(2) by helicopter or by fixed-wing aircraft for 
the purpose of the planting, cultivation, cutting, or 
transportation of, or caring for, trees (including log-
ging operations), 
but only if the helicopter or fixed-wing aircraft does not 
take off from, or land at, a facility eligible for assistance 
under the Airport and Airway Development Act of 1970, 
or otherwise use services provided pursuant to section 44509 
or 44913(b) or subchapter I of chapter 471 of title 49,
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United States Code, during such use. In the case of heli-
copter transportation described in paragraph (1), this sub-
section shall be applied by treating each flight segment as 
a distinct flight.’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to fuel use or air transportation after 
the date of the enactment of this Act. 
SEC. 5422. MODIFICATION OF RURAL AIRPORT DEFINITION. 
(a) IN GENERAL.—Section 4261(e)(1)(B) (defining 
rural airport) is amended— 
(1) by inserting ‘‘(in the case of any airport de-
scribed in clause (ii)(III), on flight segments of at 
least 100 miles)’’ after ‘‘by air’’ in clause (i), and 
(2) by striking the period at the end of subclause 
(II) of clause (ii) and inserting ‘‘, or’’, and by adding 
at the end of clause (ii) the following new subclause: 
‘‘(III) is not connected by paved 
roads to another airport.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on April 1, 2004. 
SEC. 5423. EXEMPTION FROM TICKET TAXES FOR TRANS-
PORTATION PROVIDED BY SEAPLANES. 
(a) IN GENERAL.—Section 4261 (relating to imposi-
tion of tax) is amended by redesignating subsection (i) as
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subsection (j) and by inserting after subsection (h) the fol-
lowing new subsection: 
‘‘(i) EXEMPTION FOR SEAPLANES.—No tax shall be 
imposed by this section or section 4271 on any air trans-
portation by a seaplane with respect to any segment con-
sisting of a takeoff from, and a landing on, water, but only 
if the places at which such takeoff and landing occur have 
not received and are not receiving financial assistance from 
the Airport and Airways Trust Fund.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to transportation beginning after March 
31, 2004. 
SEC. 5424. CERTAIN SIGHTSEEING FLIGHTS EXEMPT FROM 
TAXES ON AIR TRANSPORTATION. 
(a) IN GENERAL.—Section 4281 (relating to small air-
craft on nonestablished lines) is amended by adding at the 
end the following new sentence: ‘‘For purposes of this sec-
tion, an aircraft shall not be considered as operated on an 
established line if such aircraft is operated on a flight the 
sole purpose of which is sightseeing.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply with respect to transportation beginning 
on or after the date of the enactment of this Act, but shall 
not apply to any amount paid before such date for such 
transportation.
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PART IV—ALCOHOLIC BEVERAGE EXCISE TAXES 
SEC. 5431. REPEAL OF SPECIAL OCCUPATIONAL TAXES ON 
PRODUCERS AND MARKETERS OF ALCOHOLIC 
BEVERAGES. 
(a) REPEAL OF OCCUPATIONAL TAXES.— 
(1) IN GENERAL.—The following provisions of 
part II of subchapter A of chapter 51 (relating to oc-
cupational taxes) are hereby repealed: 
(A) Subpart A (relating to proprietors of 
distilled spirits plants, bonded wine cellars, etc.). 
(B) Subpart B (relating to brewer). 
(C) Subpart D (relating to wholesale deal-
ers) (other than sections 5114 and 5116). 
(D) Subpart E (relating to retail dealers) 
(other than section 5124). 
(E) Subpart G (relating to general provi-
sions) (other than sections 5142, 5143, 5145, and 
5146). 
(2) NONBEVERAGE DOMESTIC DRAWBACK.—Sec-
tion 5131 is amended by striking ‘‘, on payment of 
a special tax per annum,’’. 
(3) INDUSTRIAL USE OF DISTILLED SPIRITS.— 
Section 5276 is hereby repealed. 
(b) CONFORMING AMENDMENTS.—
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(1)(A) The heading for part II of subchapter A 
of chapter 51 and the table of subparts for such part 
are amended to read as follows: 
‘‘PART II—MISCELLANEOUS PROVISIONS 
‘‘Subpart A. Manufacturers of stills. 
‘‘Subpart B. Nonbeverage domestic drawback claimants. 
‘‘Subpart C. Recordkeeping by dealers. 
‘‘Subpart D. Other provisions.’’. 
(B) The table of parts for such subchapter A is 
amended by striking the item relating to part II and 
inserting the following new item: 
‘‘Part II. Miscellaneous provisions.’’. 
(2) Subpart C of part II of such subchapter (re-
lating to manufacturers of stills) is redesignated as 
subpart A. 
(3)(A) Subpart F of such part II (relating to 
nonbeverage domestic drawback claimants) is redesig-
nated as subpart B and sections 5131 through 5134 
are redesignated as sections 5111 through 5114, re-
spectively. 
(B) The table of sections for such subpart B, as 
so redesignated, is amended— 
(i) by redesignating the items relating to 
sections 5131 through 5134 as relating to sec-
tions 5111 through 5114, respectively, and 
(ii) by striking ‘‘and rate of tax’’ in the 
item relating to section 5111, as so redesignated.
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(C) Section 5111, as redesignated by subpara-
graph (A), is amended— 
(i) by striking ‘‘AND RATE OF TAX’’ in 
the section heading, 
(ii) by striking the subsection heading for 
subsection (a), and 
(iii) by striking subsection (b). 
(4) Part II of subchapter A of chapter 51 is 
amended by adding after subpart B, as redesignated 
by paragraph (3), the following new subpart: 
‘‘Subpart C—Recordkeeping by Dealers 
‘‘Sec. 5121. Recordkeeping by wholesale dealers. 
‘‘Sec. 5122. Recordkeeping by retail dealers. 
‘‘Sec. 5123. Preservation and inspection of records, and entry of premises for in-
spection.’’. 
(5)(A) Section 5114 (relating to records) is 
moved to subpart C of such part II and inserted after 
the table of sections for such subpart. 
(B) Section 5114 is amended— 
(i) by striking the section heading and in-
serting the following new heading: 
‘‘SEC. 5121. RECORDKEEPING BY WHOLESALE DEALERS.’’, 
and 
(ii) by redesignating subsection (c) as sub-
section (d) and by inserting after subsection (b) 
the following new subsection:
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‘‘(c) WHOLESALE DEALERS.—For purposes of this 
part— 
‘‘(1) WHOLESALE
DEALER
IN
LIQUORS.—The 
term ‘wholesale dealer in liquors’ means any dealer 
(other than a wholesale dealer in beer) who sells, or 
offers for sale, distilled spirits, wines, or beer, to an-
other dealer. 
‘‘(2) WHOLESALE DEALER IN BEER.—The term 
‘wholesale dealer in beer’ means any dealer who sells, 
or offers for sale, beer, but not distilled spirits or 
wines, to another dealer. 
‘‘(3) DEALER.—The term ‘dealer’ means any 
person who sells, or offers for sale, any distilled spir-
its, wines, or beer. 
‘‘(4) PRESUMPTION IN CASE OF SALE OF 20 WINE 
GALLONS OR MORE.—The sale, or offer for sale, of dis-
tilled spirits, wines, or beer, in quantities of 20 wine 
gallons or more to the same person at the same time, 
shall be presumptive evidence that the person making 
such sale, or offer for sale, is engaged in or carrying 
on the business of a wholesale dealer in liquors or a 
wholesale dealer in beer, as the case may be. Such 
presumption may be overcome by evidence satisfac-
torily showing that such sale, or offer for sale, was 
made to a person other than a dealer.’’.
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(C) Paragraph (3) of section 5121(d), as so re-
designated, is amended by striking ‘‘section 5146’’ 
and inserting ‘‘section 5123’’. 
(6)(A) Section 5124 (relating to records) is 
moved to subpart C of part II of subchapter A of 
chapter 51 and inserted after section 5121. 
(B) Section 5124 is amended— 
(i) by striking the section heading and in-
serting the following new heading: 
‘‘SEC. 5122. RECORDKEEPING BY RETAIL DEALERS.’’, 
(ii) by striking ‘‘section 5146’’ in subsection 
(c) and inserting ‘‘section 5123’’, and 
(iii) by redesignating subsection (c) as sub-
section (d) and inserting after subsection (b) the 
following new subsection: 
‘‘(c) RETAIL DEALERS.—For purposes of this sec-
tion— 
‘‘(1) RETAIL
DEALER
IN
LIQUORS.—The term 
‘retail dealer in liquors’ means any dealer (other than 
a retail dealer in beer or a limited retail dealer) who 
sells, or offers for sale, distilled spirits, wines, or beer, 
to any person other than a dealer. 
‘‘(2) RETAIL DEALER IN BEER.—The term ‘retail 
dealer in beer’ means any dealer (other than a lim-
ited retail dealer) who sells, or offers for sale, beer, but
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not distilled spirits or wines, to any person other 
than a dealer. 
‘‘(3) LIMITED RETAIL DEALER.—The term ‘lim-
ited retail dealer’ means any fraternal, civic, church, 
labor, charitable, benevolent, or ex-servicemen’s orga-
nization making sales of distilled spirits, wine or beer 
on the occasion of any kind of entertainment, dance, 
picnic, bazaar, or festival held by it, or any person 
making sales of distilled spirits, wine or beer to the 
members, guests, or patrons of bona fide fairs, re-
unions, picnics, carnivals, or other similar outings, if 
such organization or person is not otherwise engaged 
in business as a dealer. 
‘‘(4) DEALER.—The term ‘dealer’ has the mean-
ing given such term by section 5121(c)(3).’’. 
(7) Section 5146 is moved to subpart C of part 
II of subchapter A of chapter 51, inserted after section 
5122, and redesignated as section 5123. 
(8) Part II of subchapter A of chapter 51 is 
amended by inserting after subpart C the following 
new subpart: 
‘‘Subpart D—Other Provisions 
‘‘Sec. 5131. Packaging distilled spirits for industrial uses. 
‘‘Sec. 5132. Prohibited purchases by dealers.’’. 
(9) Section 5116 is moved to subpart D of part 
II of subchapter A of chapter 51, inserted after the
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table of sections, redesignated as section 5131, and 
amended by inserting ‘‘(as defined in section 
5121(c))’’ after ‘‘dealer’’ in subsection (a). 
(10) Subpart D of part II of subchapter A of 
chapter 51 is amended by adding at the end thereof 
the following new section: 
‘‘SEC. 5132. PROHIBITED PURCHASES BY DEALERS. 
‘‘(a) IN GENERAL.—Except as provided in regulations 
prescribed by the Secretary, it shall be unlawful for a dealer 
to purchase distilled spirits for resale from any person other 
than a wholesale dealer in liquors who is required to keep 
the records prescribed by section 5121. 
‘‘(b) LIMITED RETAIL DEALERS.—A limited retail 
dealer may lawfully purchase distilled spirits for resale 
from a retail dealer in liquors. 
‘‘(c) PENALTY AND FORFEITURE.— 
‘‘For penalty and forfeiture provisions applicable 
to violations of subsection (a), see sections 5687 and 
7302.’’. 
(11) Subsection (b) of section 5002 is amended— 
(A) by striking ‘‘section 5112(a)’’ and in-
serting ‘‘section 5121(c)(3)’’, 
(B) by striking ‘‘section 5112’’ and insert-
ing ‘‘section 5121(c)’’, 
(C) by striking ‘‘section 5122’’ and insert-
ing ‘‘section 5122(c)’’.
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(12) Subparagraph (A) of section 5010(c)(2) is 
amended by striking ‘‘section 5134’’ and inserting 
‘‘section 5114’’. 
(13) Subsection (d) of section 5052 is amended 
to read as follows: 
‘‘(d) BREWER.—For purposes of this chapter, the term 
‘brewer’ means any person who brews beer or produces beer 
for sale. Such term shall not include any person who pro-
duces only beer exempt from tax under section 5053(e).’’. 
(14) The text of section 5182 is amended to read 
as follows: 
‘‘For provisions requiring recordkeeping by 
wholesale liquor dealers, see section 5121, and by re-
tail liquor dealers, see section 5122.’’. 
(15) Subsection (b) of section 5402 is amended 
by striking ‘‘section 5092’’ and inserting ‘‘section 
5052(d)’’. 
(16) Section 5671 is amended by striking ‘‘or 
5091’’. 
(17)(A) Part V of subchapter J of chapter 51 is 
hereby repealed. 
(B) The table of parts for such subchapter J is 
amended by striking the item relating to part V. 
(18)(A) Sections 5142, 5143, and 5145 are 
moved to subchapter D of chapter 52, inserted after
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section 5731, redesignated as sections 5732, 5733, and 
5734, respectively, and amended by striking ‘‘this 
part’’ each place it appears and inserting ‘‘this sub-
chapter’’. 
(B) Section 5732, as redesignated by subpara-
graph (A), is amended by striking ‘‘(except the tax 
imposed by section 5131)’’ each place it appears. 
(C) Paragraph (2) of section 5733(c), as redesig-
nated by subparagraph (A), is amended by striking 
‘‘liquors’’ both places it appears and inserting ‘‘to-
bacco products and cigarette papers and tubes’’. 
(D) The table of sections for subchapter D of 
chapter 52 is amended by adding at the end thereof 
the following: 
‘‘Sec. 5732. Payment of tax. 
‘‘Sec. 5733. Provisions relating to liability for occupational taxes. 
‘‘Sec. 5734. Application of State laws.’’. 
(E) Section 5731 is amended by striking sub-
section (c) and by redesignating subsection (d) as sub-
section (c). 
(19) Subsection (c) of section 6071 is amended 
by striking ‘‘section 5142’’ and inserting ‘‘section 
5732’’. 
(20) Paragraph (1) of section 7652(g) is amend-
ed— 
(A) by striking ‘‘subpart F’’ and inserting 
‘‘subpart B’’, and
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(B) by striking ‘‘section 5131(a)’’ and in-
serting ‘‘section 5111’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on July 1, 2004, but shall not apply 
to taxes imposed for periods before such date. 
SEC. 5432. SUSPENSION OF LIMITATION ON RATE OF RUM 
EXCISE TAX COVER OVER TO PUERTO RICO 
AND VIRGIN ISLANDS. 
(a) IN GENERAL.—Section 7652(f)(1) (relating to lim-
itation on cover over of tax on distilled spirits) is amended 
by striking ‘‘January 1, 2004’’ and inserting ‘‘October 1, 
2004, and $13.50 in the case of distilled spirits brought into 
the United States after September 30, 2004, and before Jan-
uary 1, 2006’’. 
(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendment made by sub-
section (a) shall apply to articles containing distilled 
spirits brought into the United States after December 
31, 2003. 
(2) SPECIAL RULE.— 
(A) IN
GENERAL.—After September 30, 
2004, the treasury of Puerto Rico shall make a 
Conservation Trust Fund transfer within 30 
days from the date of each cover over payment
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to such treasury under section 7652(e) of the In-
ternal Revenue Code of 1986. 
(B) CONSERVATION
TRUST
FUND
TRANS-
FER.— 
(i) IN GENERAL.—For purposes of this 
paragraph, the term ‘‘Conservation Trust 
Fund transfer’’ means a transfer to the 
Puerto Rico Conservation Trust Fund of an 
amount equal to 50 cents per proof gallon 
of the taxes imposed under section 5001 or 
section 7652 of such Code on distilled spir-
its that are covered over to the treasury of 
Puerto Rico under section 7652(e) of such 
Code. 
(ii) TREATMENT OF TRANSFER.—Each 
Conservation Trust Fund transfer shall be 
treated as principal for an endowment, the 
income from which to be available for use 
by the Puerto Rico Conservation Trust 
Fund for the purposes for which the Trust 
Fund was established. 
(iii) RESULT OF NONTRANSFER.— 
(I) IN GENERAL.—Upon notifica-
tion by the Secretary of the Interior 
that a Conservation Trust Fund trans-
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fer has not been made by the treasury 
of Puerto Rico, the Secretary of the 
Treasury shall, except as provided in 
subclause (II), deduct and withhold 
from the next cover over payment to be 
made to the treasury of Puerto Rico 
under section 7652(e) of such Code an 
amount equal to the appropriate Con-
servation Trust Fund transfer and in-
terest thereon at the underpayment 
rate established under section 6621 of 
such Code as of the due date of such 
transfer. The Secretary of the Treasury 
shall transfer such amount deducted 
and withheld, and the interest thereon, 
directly to the Puerto Rico Conserva-
tion Trust Fund. 
(II) GOOD CAUSE EXCEPTION.—If 
the Secretary of the Interior finds, 
after consultation with the Governor of 
Puerto Rico, that the failure by the 
treasury of Puerto Rico to make a re-
quired transfer was for good cause, and 
notifies the Secretary of the Treasury 
of the finding of such good cause before
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HR 3550 EAS 
the due date of the next cover over pay-
ment following the notification of non-
transfer, then the Secretary of the 
Treasury shall not deduct the amount 
of such nontransfer from any cover 
over payment. 
(C) PUERTO
RICO
CONSERVATION
TRUST 
FUND.—For purposes of this paragraph, the term 
‘‘Puerto Rico Conservation Trust Fund’’ means 
the fund established pursuant to a Memorandum 
of Understanding between the United States De-
partment of the Interior and the Commonwealth 
of Puerto Rico, dated December 24, 1968. 
PART V—SPORT EXCISE TAXES 
SEC. 5441. CUSTOM GUNSMITHS. 
(a) SMALL MANUFACTURERS EXEMPT FROM FIRE-
ARMS EXCISE TAX.—Section 4182 (relating to exemptions) 
is amended by redesignating subsection (c) as subsection (d) 
and by inserting after subsection (b) the following new sub-
section: 
‘‘(c) SMALL MANUFACTURERS, ETC.— 
‘‘(1) IN GENERAL.—The tax imposed by section 
4181 shall not apply to any article described in such 
section if manufactured, produced, or imported by a
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HR 3550 EAS 
person who manufactures, produces, and imports less 
than 50 of such articles during the calendar year. 
‘‘(2) CONTROLLED GROUPS.—All persons treated 
as a single employer for purposes of subsection (a) or 
(b) of section 52 shall be treated as one person for 
purposes of paragraph (1).’’. 
(b) EFFECTIVE DATE.— 
(1) IN
GENERAL.—The amendments made by 
this section shall apply to articles sold by the manu-
facturer, producer, or importer on or after the date 
which is the first day of the month beginning at least 
2 weeks after the date of the enactment of this Act. 
(2) NO
INFERENCE.—Nothing in the amend-
ments made by this section shall be construed to cre-
ate any inference with respect to the proper tax treat-
ment of any sales before the effective date of such 
amendments. 
SEC. 5442. MODIFIED TAXATION OF IMPORTED ARCHERY 
PRODUCTS. 
(a) BOWS.—Paragraph (1) of section 4161(b) (relating 
to bows) is amended to read as follows: 
‘‘(1) BOWS.— 
‘‘(A) IN
GENERAL.—There is hereby im-
posed on the sale by the manufacturer, producer, 
or importer of any bow which has a peak draw
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HR 3550 EAS 
weight of 30 pounds or more, a tax equal to 11 
percent of the price for which so sold. 
‘‘(B) ARCHERY EQUIPMENT.—There is here-
by imposed on the sale by the manufacturer, pro-
ducer, or importer— 
‘‘(i) of any part or accessory suitable 
for inclusion in or attachment to a bow de-
scribed in subparagraph (A), and 
‘‘(ii) of any quiver or broadhead suit-
able for use with an arrow described in 
paragraph (2), 
a tax equal to 11 percent of the price for which 
so sold.’’. 
(b) ARROWS.—Subsection (b) of section 4161 (relating 
to bows and arrows, etc.) is amended by redesignating para-
graph (3) as paragraph (4) and inserting after paragraph 
(2) the following: 
‘‘(3) ARROWS.— 
‘‘(A) IN
GENERAL.—There is hereby im-
posed on the sale by the manufacturer, producer, 
or importer of any arrow, a tax equal to 12 per-
cent of the price for which so sold. 
‘‘(B) EXCEPTION.—In the case of any arrow 
of which the shaft or any other component has
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been previously taxed under paragraph (1) or 
(2)— 
‘‘(i) section 6416(b)(3) shall not apply, 
and 
‘‘(ii) the tax imposed by subparagraph 
(A) shall be an amount equal to the excess 
(if any) of— 
‘‘(I) the amount of tax imposed by 
this paragraph (determined without re-
gard to this subparagraph), over 
‘‘(II) the amount of tax paid with 
respect to the tax imposed under para-
graph (1) or (2) on such shaft or com-
ponent. 
‘‘(C) ARROW.—For purposes of this para-
graph, the term ‘arrow’ means any shaft de-
scribed in paragraph (2) to which additional 
components are attached.’’. 
(c) CONFORMING AMENDMENTS.—Section 4161(b)(2) 
is amended— 
(1) by inserting ‘‘(other than broadheads)’’ after 
‘‘point’’, and 
(2) by striking ‘‘ARROWS.—’’ in the heading and 
inserting ‘‘ARROW COMPONENTS.—’’.
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(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to articles sold by the manufacturer, 
producer, or importer after the date of the enactment of this 
Act. 
SEC. 5443. TREATMENT OF TRIBAL GOVERNMENTS FOR 
PURPOSES OF FEDERAL WAGERING EXCISE 
AND OCCUPATIONAL TAXES. 
(a) IN GENERAL.—Subsection (a) of section 7871 (re-
lating to Indian tribal governments treated as States for 
certain purposes) is amended by striking ‘‘and’’ at the end 
of paragraph (6), by striking the period at the end of para-
graph (7) and inserting ‘‘; and’’, and by adding at the end 
the following new paragraph: 
‘‘(8) for purposes of chapter 35 (relating to taxes 
on wagering).’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on July 1, 2004, but shall not apply 
to taxes imposed for periods before such date.
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PART VI—OTHER PROVISIONS 
SEC. 5451. INCOME TAX CREDIT FOR DISTILLED SPIRITS 
WHOLESALERS AND FOR DISTILLED SPIRITS 
IN CONTROL STATE BAILMENT WAREHOUSES 
FOR COSTS OF CARRYING FEDERAL EXCISE 
TAXES ON BOTTLED DISTILLED SPIRITS. 
(a) IN GENERAL.—Subpart A of part I of subchapter 
A of chapter 51 (relating to gallonage and occupational 
taxes) is amended by adding at the end the following new 
section: 
‘‘SEC. 5011. INCOME TAX CREDIT FOR AVERAGE COST OF 
CARRYING EXCISE TAX. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
amount of the distilled spirits credit for any taxable year 
is the amount equal to the product of— 
‘‘(1) in the case of— 
‘‘(A) any eligible wholesaler— 
‘‘(i) the number of cases of bottled dis-
tilled spirits— 
‘‘(I) which were bottled in the 
United States, and 
‘‘(II) which are purchased by such 
wholesaler during the taxable year di-
rectly from the bottler of such spirits, 
or
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HR 3550 EAS 
‘‘(B) any person which is subject to section 
5005 and which is not an eligible wholesaler, the 
number of cases of bottled distilled spirits which 
are stored in a warehouse operated by, or on be-
half of, a State, or agency or political subdivi-
sion thereof, on which title has not passed on an 
unconditional sale basis, and 
‘‘(2) the average tax-financing cost per case for 
the most recent calendar year ending before the begin-
ning of such taxable year. 
‘‘(b) ELIGIBLE WHOLESALER.—For purposes of this 
section, the term ‘eligible wholesaler’ means any person 
which holds a permit under the Federal Alcohol Adminis-
tration Act as a wholesaler of distilled spirits which is not 
a State, or agency or political subdivision thereof. 
‘‘(c) AVERAGE TAX-FINANCING COST.— 
‘‘(1) IN GENERAL.—For purposes of this section, 
the average tax-financing cost per case for any cal-
endar year is the amount of interest which would ac-
crue at the deemed financing rate during a 60-day 
period on an amount equal to the deemed Federal ex-
cise tax per case. 
‘‘(2) DEEMED FINANCING RATE.—For purposes 
of paragraph (1), the deemed financing rate for any 
calendar year is the average of the corporate overpay-
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HR 3550 EAS 
ment rates under paragraph (1) of section 6621(a) 
(determined without regard to the last sentence of 
such paragraph) for calendar quarters of such year. 
‘‘(3) DEEMED
FEDERAL
EXCISE
TAX
PER 
CASE.—For purposes of paragraph (1), the deemed 
Federal excise tax per case is $25.68. 
‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.—For 
purposes of this section— 
‘‘(1) CASE.—The term ‘case’ means 12 80-proof 
750 milliliter bottles. 
‘‘(2) NUMBER OF CASES IN LOT.—The number of 
cases in any lot of distilled spirits shall be determined 
by dividing the number of liters in such lot by 9.’’. 
(b) CREDIT TREATED AS PART OF GENERAL BUSI-
NESS CREDIT.—Section 38(b) (relating to current year 
business credit), as amended by section 5103 of this Act, 
is amended by striking ‘‘plus’’ at the end of paragraph (15), 
by striking the period at the end of paragraph (16) and 
inserting ‘‘, plus’’, and by adding at the end the following 
new paragraph: 
‘‘(17) the distilled spirits credit determined 
under section 5011(a).’’. 
(c) CONFORMING AMENDMENTS.—
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HR 3550 EAS 
(1) Section 39(d), as amended by section 5103 of 
this Act, is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(12) NO CARRYBACK OF SECTION 5011 CREDIT 
BEFORE EFFECTIVE DATE.—No portion of the unused 
business credit for any taxable year which is attrib-
utable to the credit determined under section 5011(a) 
may be carried back to a taxable year beginning be-
fore the date of the enactment of section 5011.’’. 
(2) The table of sections for subpart A of part I 
of subchapter A of chapter 51 is amended by adding 
at the end the following new item: 
‘‘Sec. 5011. Income tax credit for average cost of carrying excise tax.’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after the date 
of the enactment of this Act. 
SEC. 5452. CREDIT FOR TAXPAYERS OWNING COMMERCIAL 
POWER TAKEOFF VEHICLES. 
(a) IN GENERAL.—Subpart D of part IV of subchapter 
A of chapter 1 (relating to business-related credits) is 
amended by adding at the end the following new section: 
‘‘SEC. 45G. COMMERCIAL POWER TAKEOFF VEHICLES CRED-
IT. 
‘‘(a) GENERAL RULE.—For purposes of section 38, the 
amount of the commercial power takeoff vehicles credit de-
termined under this section for the taxable year is $250 for
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each qualified commercial power takeoff vehicle owned by 
the taxpayer as of the close of the calendar year in which 
or with which the taxable year of the taxpayer ends. 
‘‘(b) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED COMMERCIAL POWER TAKEOFF 
VEHICLE.—The term ‘qualified commercial power 
takeoff vehicle’ means any highway vehicle described 
in paragraph (2) which is propelled by any fuel sub-
ject to tax under section 4041 or 4081 if such vehicle 
is used in a trade or business or for the production 
of income (and is licensed and insured for such use). 
‘‘(2) HIGHWAY VEHICLE DESCRIBED.—A high-
way vehicle is described in this paragraph if such ve-
hicle is— 
‘‘(A) designed to engage in the daily collec-
tion of refuse or recyclables from homes or busi-
nesses and is equipped with a mechanism under 
which the vehicle’s propulsion engine provides 
the power to operate a load compactor, or 
‘‘(B) designed to deliver ready mixed con-
crete on a daily basis and is equipped with a 
mechanism under which the vehicle’s propulsion 
engine provides the power to operate a mixer 
drum to agitate and mix the product en route to 
the delivery site.
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‘‘(c) EXCEPTION FOR VEHICLES USED BY GOVERN-
MENTS, ETC.—No credit shall be allowed under this section 
for any vehicle owned by any person at the close of a cal-
endar year if such vehicle is used at any time during such 
year by— 
‘‘(1) the United States or an agency or instru-
mentality thereof, a State, a political subdivision of 
a State, or an agency or instrumentality of one or 
more States or political subdivisions, or 
‘‘(2) an organization exempt from tax under sec-
tion 501(a). 
‘‘(d) TERMINATION.—This section shall not apply with 
respect to any calendar year after 2006.’’. 
(b) CREDIT TREATED AS PART OF GENERAL BUSI-
NESS CREDIT.—Section 38(b) (relating to current year 
business credit), as amended by section 5451 of this Act, 
is amended by striking ‘‘plus’’ at the end of paragraph (16), 
by striking the period at the end of paragraph (17) and 
inserting ‘‘, plus’’, and by adding at the end the following 
new paragraph: 
‘‘(18) the commercial power takeoff vehicles cred-
it under section 45G(a).’’. 
(c) CONFORMING AMENDMENTS.—
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(1) Section 39(d), as amended by section 5451 of 
this Act, is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(13) NO CARRYBACK OF SECTION 45G CREDIT 
BEFORE EFFECTIVE DATE.—No portion of the unused 
business credit for any taxable year which is attrib-
utable to the credit determined under section 45G(a) 
may be carried back to a taxable year beginning on 
or before the date of the enactment of section 45G.’’. 
(2) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 is amended by adding 
at the end the following new item: 
‘‘Sec. 45G. Commercial power takeoff vehicles credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after the date 
of the enactment of this Act. 
SEC. 5453. CREDIT FOR AUXILIARY POWER UNITS IN-
STALLED ON DIESEL-POWERED TRUCKS. 
(a) IN GENERAL.—Subpart D of part IV of subchapter 
A of chapter 1 (relating to business-related credits), as 
amended by section 5452 of this Act, is amended by adding 
at the end the following new section: 
‘‘SEC. 45H. AUXILIARY POWER UNIT CREDIT. 
‘‘(a) GENERAL RULE.—For purposes of section 38, the 
amount of the auxiliary power unit credit determined
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under this section for the taxable year is $250 for each 
qualified auxiliary power unit— 
‘‘(1) purchased by the taxpayer, and 
‘‘(2) installed or caused to be installed by the 
taxpayer on a qualified heavy-duty highway vehicle 
during such taxable year. 
‘‘(b) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED AUXILIARY POWER UNIT.—The 
term ‘qualified auxiliary power unit’ means any inte-
grated system which— 
‘‘(A) provides heat, air conditioning, engine 
warming, and electricity to the factory installed 
components on a qualified heavy-duty highway 
vehicle as if the main drive engine of such vehi-
cle was in operation, 
‘‘(B) is employed to reduce long-term idling 
of the diesel engine on such a vehicle, and 
‘‘(C) is certified by the Environmental Pro-
tection Agency as meeting emission standards in 
regulations in effect on the date of the enactment 
of this section. 
‘‘(2) QUALIFIED
HEAVY-DUTY
HIGHWAY
VEHI-
CLE.—The term ‘qualified heavy-duty highway vehi-
cle’ means any highway vehicle weighing more than 
12,500 pounds and powered by a diesel engine.
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‘‘(c) TERMINATION.—This section shall not apply with 
respect to any installation occurring after December 31, 
2006.’’. 
(b) CREDIT TREATED AS PART OF GENERAL BUSI-
NESS CREDIT.—Section 38(b) (relating to current year 
business credit), as amended by section 5452 of this Act, 
is amended by striking ‘‘plus’’ at the end of paragraph (17), 
by striking the period at the end of paragraph (18) and 
inserting ‘‘, plus’’, and by adding at the end the following 
new paragraph: 
‘‘(19) the auxiliary power unit credit under sec-
tion 45H(a).’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 39(d), as amended by section 5452 of 
this Act, is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(14) NO CARRYBACK OF SECTION 45H CREDIT 
BEFORE EFFECTIVE DATE.—No portion of the unused 
business credit for any taxable year which is attrib-
utable to the credit determined under section 45H(a) 
may be carried back to a taxable year beginning on 
or before the date of the enactment of section 45H.’’. 
(2) The table of sections for subpart D of part 
IV of subchapter A of chapter 1, as amended by sec-
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tion 5452 of this Act, is amended by adding at the 
end the following new item: 
‘‘Sec. 45H. Auxiliary power unit credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to auxiliary power units purchased and 
installed for taxable years beginning after the date of the 
enactment of this Act. 
Subtitle F—Miscellaneous 
Provisions 
SEC. 5501. MOTOR FUEL TAX ENFORCEMENT ADVISORY 
COMMISSION. 
(a) ESTABLISHMENT.—There is established a Motor 
Fuel Tax Enforcement Advisory Commission (in this sec-
tion referred to as the ‘‘Commission’’). 
(b) FUNCTION.—The Commission shall— 
(1) review motor fuel revenue collections, histor-
ical and current; 
(2) review the progress of investigations; 
(3) develop and review legislative proposals with 
respect to motor fuel taxes; 
(4) monitor the progress of administrative regu-
lation projects relating to motor fuel taxes; 
(5) review the results of Federal and State agen-
cy cooperative efforts regarding motor fuel taxes; 
(6) review the results of Federal interagency co-
operative efforts regarding motor fuel taxes; and
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(7) evaluate and make recommendations regard-
ing— 
(A) the effectiveness of existing Federal en-
forcement programs regarding motor fuel taxes, 
(B) enforcement personnel allocation, and 
(C) proposals for regulatory projects, legis-
lation, and funding. 
(c) MEMBERSHIP.— 
(1) APPOINTMENT.—The Commission shall be 
composed of the following representatives appointed 
by the Chairmen and the Ranking Members of the 
Committee on Finance of the Senate and the Com-
mittee on Ways and Means of the House of Represent-
atives: 
(A) At least 1 representative from each of 
the following Federal entities: the Department of 
Homeland Security, the Department of Trans-
portation—Office of Inspector General, the Fed-
eral Highway Administration, the Department 
of Defense, and the Department of Justice. 
(B) At least 1 representative from the Fed-
eration of State Tax Administrators. 
(C) At least 1 representative from any State 
department of transportation.
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(D) 2 representatives from the highway con-
struction industry. 
(E) 5 representatives from industries relat-
ing to fuel distribution — refiners (2 representa-
tives), distributors (1 representative), pipelines 
(1 representative), and terminal operators (2 
representatives). 
(F) 1 representative from the retail fuel in-
dustry. 
(G) 2 representatives from the staff of the 
Committee on Finance of the Senate and 2 rep-
resentatives from the staff of the Committee on 
Ways and Means of the House of Representa-
tives. 
(2) TERMS.—Members shall be appointed for the 
life of the Commission. 
(3) VACANCIES.—A vacancy in the Commission 
shall be filled in the manner in which the original 
appointment was made. 
(4) TRAVEL
EXPENSES.—Members shall serve 
without pay but shall receive travel expenses, includ-
ing per diem in lieu of subsistence, in accordance 
with sections 5702 and 5703 of title 5, United States 
Code.
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(5) CHAIRMAN.—The Chairman of the Commis-
sion shall be elected by the members. 
(d) FUNDING.—Such sums as are necessary shall be 
available from the Highway Trust fund for the expenses of 
the Commission. 
(e) CONSULTATION.—Upon request of the Commission, 
representatives of the Department of the Treasury and the 
Internal Revenue Service shall be available for consultation 
to assist the Commission in carrying out its duties under 
this section. 
(f) OBTAINING DATA.—The Commission may secure 
directly from any department or agency of the United 
States, information (other than information required by 
any law to be kept confidential by such department or agen-
cy) necessary for the Commission to carry out its duties 
under this section. Upon request of the Commission, the 
head of that department or agency shall furnish such non-
confidential information to the Commission. The Commis-
sion shall also gather evidence through such means as it 
may deem appropriate, including through holding hearings 
and soliciting comments by means of Federal Register no-
tices. 
(g) TERMINATION.—The Commission shall terminate 
after September 30, 2009.
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SEC. 5502. NATIONAL SURFACE TRANSPORTATION INFRA-
STRUCTURE FINANCING COMMISSION. 
(a) ESTABLISHMENT.—There is established a National 
Surface Transportation Infrastructure Financing Commis-
sion (in this section referred to as the ‘‘Commission’’). The 
Commission shall hold its first meeting within 90 days of 
the appointment of the eighth individual to be named to 
the Commission. 
(b) FUNCTION.— 
(1) IN GENERAL.—The Commission shall— 
(A) make a thorough investigation and 
study of revenues flowing into the Highway 
Trust Fund under current law, including the in-
dividual components of the overall flow of such 
revenues; 
(B) consider whether the amount of such 
revenues is likely to increase, decline, or remain 
unchanged, absent changes in the law, particu-
larly by taking into account the impact of pos-
sible changes in public vehicular choice, fuel use, 
or travel alternatives that could be expected to 
reduce or increase revenues into the Highway 
Trust Fund; 
(C) consider alternative approaches to gen-
erating revenues for the Highway Trust Fund,
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and the level of revenues that such alternatives 
would yield; 
(D) consider highway and transit needs and 
whether additional revenues into the Highway 
Trust Fund, or other Federal revenues dedicated 
to highway and transit infrastructure, would be 
required in order to meet such needs; and 
(E) study such other matters closely related 
to the subjects described in the preceding sub-
paragraphs as it may deem appropriate. 
(2) 
TIME
FRAME
OF
INVESTIGATION
AND 
STUDY.—The time frame to be considered by the Com-
mission shall extend through the year 2015. 
(3) PREPARATION OF REPORT.—Based on such 
investigation and study, the Commission shall develop 
a final report, with recommendations and the bases 
for those recommendations, indicating policies that 
should be adopted, or not adopted, to achieve various 
levels of annual revenue for the Highway Trust Fund 
and to enable the Highway Trust Fund to receive rev-
enues sufficient to meet highway and transit needs. 
Such recommendations shall address, among other 
matters as the Commission may deem appropriate—
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(A) what levels of revenue are required by 
the Federal Highway Trust Fund in order for it 
to meet needs to— 
(i) maintain, and 
(ii) improve the condition and per-
formance of the Nation’s highway and tran-
sit systems; 
(B) what levels of revenue are required by 
the Federal Highway Trust Fund in order to en-
sure that Federal levels of investment in high-
ways and transit do not decline in real terms; 
and 
(C) the extent, if any, to which the High-
way Trust Fund should be augmented by other 
mechanisms or funds as a Federal means of fi-
nancing highway and transit infrastructure in-
vestments. 
(c) MEMBERSHIP.— 
(1) APPOINTMENT.—The Commission shall be 
composed of 15 members, appointed as follows: 
(A) 7 members appointed by the Secretary 
of Transportation, in consultation with the Sec-
retary of the Treasury.
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(B) 2 members appointed by the Chairman 
of the Committee on Ways and Means of the 
House of Representatives. 
(C) 2 members appointed by the Ranking 
Minority Member of the Committee on Ways and 
Means of the House of Representatives. 
(D) 2 members appointed by the Chairman 
of the Committee on Finance of the Senate. 
(E) 2 members appointed by the Ranking 
Minority Member of the Committee on Finance 
of the Senate. 
(2) QUALIFICATIONS.—Members appointed pur-
suant to paragraph (1) shall be appointed from 
among individuals knowledgeable in the fields of pub-
lic transportation finance or highway and transit 
programs, policy, and needs, and may include rep-
resentatives of interested parties, such as State and 
local governments or other public transportation au-
thorities or agencies, representatives of the transpor-
tation construction industry (including suppliers of 
technology, machinery and materials), transportation 
labor (including construction and providers), trans-
portation providers, the financial community, and 
users of highway and transit systems.
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(3) TERMS.—Members shall be appointed for the 
life of the Commission. 
(4) VACANCIES.—A vacancy in the Commission 
shall be filled in the manner in which the original 
appointment was made. 
(5) TRAVEL
EXPENSES.—Members shall serve 
without pay but shall receive travel expenses, includ-
ing per diem in lieu of subsistence, in accordance 
with sections 5702 and 5703 of title 5, United States 
Code. 
(6) CHAIRMAN.—The Chairman of the Commis-
sion shall be elected by the members. 
(d) STAFF.—The Commission may appoint and fix the 
pay of such personnel as it considers appropriate. 
(e) FUNDING.—Funding for the Commission shall be 
provided by the Secretary of the Treasury and by the Sec-
retary of Transportation, out of funds available to those 
agencies for administrative and policy functions. 
(f) STAFF OF FEDERAL AGENCIES.—Upon request of 
the Commission, the head of any department or agency of 
the United States may detail any of the personnel of that 
department or agency to the Commission to assist in car-
rying out its duties under this section. 
(g) OBTAINING DATA.—The Commission may secure 
directly from any department or agency of the United
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States, information (other than information required by 
any law to be kept confidential by such department or agen-
cy) necessary for the Commission to carry out its duties 
under this section. Upon request of the Commission, the 
head of that department or agency shall furnish such non-
confidential information to the Commission. The Commis-
sion shall also gather evidence through such means as it 
may deem appropriate, including through holding hearings 
and soliciting comments by means of Federal Register no-
tices. 
(h) REPORT.—Not later than 2 years after the date 
of its first meeting, the Commission shall transmit its final 
report, including recommendations, to the Secretary of 
Transportation, the Secretary of the Treasury, and the 
Committee on Ways and Means of the House of Representa-
tives, the Committee on Finance of the Senate, the Com-
mittee on Transportation and Infrastructure of the House 
of Representatives, the Committee on Environment and 
Public Works of the Senate, and the Committee on Banking, 
Housing, and Urban Affairs of the Senate. 
(i) TERMINATION.—The Commission shall terminate 
on the 180th day following the date of transmittal of the 
report under subsection (h). All records and papers of the 
Commission shall thereupon be delivered to the Adminis-
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trator of General Services for deposit in the National Ar-
chives. 
SEC. 5503. TREASURY STUDY OF FUEL TAX COMPLIANCE 
AND INTERAGENCY COOPERATION. 
(a) IN GENERAL.—Not later than January 31, 2006, 
the Secretary of the Treasury shall submit to the Committee 
on Finance of the Senate and the Committee on Ways and 
Means of the House of Representatives a report regarding 
fuel tax enforcement which shall include the information 
and analysis specified in subsections (b) and (c) and any 
other information and recommendations the Secretary of 
the Treasury may deem appropriate. 
(b) AUDITS.—With respect to audits conducted by the 
Internal Revenue Service, the report required under sub-
section (a) shall include— 
(1) the number and geographic distribution of 
audits conducted annually, by fiscal year, between 
October 1, 2001, and September 30, 2005; 
(2) the total volume involved for each of the tax-
able fuels covered by such audits and a comparison 
to the annual production of such fuels; 
(3) the staff hours and number of personnel de-
voted to the audits per year; and
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(4) the results of such audits by year, including 
total tax collected, total penalties collected, and num-
ber of referrals for criminal prosecution. 
(c) ENFORCEMENT ACTIVITIES.—With respect to en-
forcement activities, the report required under subsection 
(a) shall include— 
(1) the number and geographic distribution of 
criminal investigations and prosecutions annually, by 
fiscal year, between October 1, 2001, and September 
30, 2005, and the results of such investigations and 
prosecutions; 
(2) to the extent such investigations and prosecu-
tions involved other agencies, State or Federal, a 
breakdown by agency of the number of joint investiga-
tions involved; 
(3) an assessment of the effectiveness of joint ac-
tion and cooperation between the Department of the 
Treasury and other Federal and State agencies, in-
cluding a discussion of the ability and need to share 
information across agencies for both civil and crimi-
nal Federal tax enforcement and enforcement of State 
or Federal laws relating to fuels; 
(4) the staff hours and number of personnel de-
voted to criminal investigations and prosecutions per 
year;
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(5) the staff hours and number of personnel de-
voted to administrative collection of fuel taxes; and 
(6) the results of administrative collection efforts 
annually, by fiscal year, between October 1, 2001, 
and September 30, 2005. 
SEC. 5504. EXPANSION OF HIGHWAY TRUST FUND EXPENDI-
TURE PURPOSES TO INCLUDE FUNDING FOR 
STUDIES 
OF 
SUPPLEMENTAL 
OR 
ALTER-
NATIVE 
FINANCING 
FOR 
THE 
HIGHWAY 
TRUST FUND. 
(a) IN GENERAL.—From amounts available in the 
Highway Trust Fund, there is authorized to be expended 
for 2 comprehensive studies of supplemental or alternative 
funding sources for the Highway Trust Fund— 
(1) $1,000,000 to the Western Transportation In-
stitute of the College of Engineering at Montana State 
University for the study and report described in sub-
section (b), and 
(2) $16,500,000 to the Public Policy Center of 
the University of Iowa for the study and report de-
scribed in subsection (c). 
(b) STUDY OF FUNDING MECHANISMS.—Not later than 
December 31, 2006, the Western Transportation Institute 
of the College of Engineering at Montana State University 
shall report to the Secretary of the Treasury and the Sec-
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retary of Transportation on a study of highway funding 
mechanisms of other industrialized nations, an examina-
tion of the viability of alternative funding proposals, in-
cluding congestion pricing, greater reliance on tolls, privat-
ization of facilities, and bonding for construction of added 
capacity, and an examination of increasing the rates of 
motor fuels taxes in effect on the date of the enactment of 
this Act, including the indexation of such rates. 
(c) STUDY ON FIELD TEST OF ON-BOARD COMPUTER 
ASSESSMENT OF HIGHWAY USE TAXES.—Not later than 
December 31, 2011, the Public Policy Center of the Univer-
sity of Iowa shall direct, analyze, and report to the Sec-
retary of the Treasury and the Secretary of Transportation 
on a long-term field test of an approach to assessing high-
way use taxes based upon actual mileage driven by a spe-
cific vehicle on specific types of highways by use of an on- 
board computer— 
(1) which is linked to satellites to calculate high-
way mileage traversed, 
(2) which computes the appropriate highway use 
tax for each of the Federal, State, and local govern-
ments as the vehicle makes use of the highways, and 
(3) the data from which is periodically 
downloaded by the vehicle owner to a collection center 
for an assessment of highway use taxes due in each
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jurisdiction traversed.The components of the field test 
shall include 2 years for preparation, including selec-
tion of vendors and test participants, and 3-year test-
ing period. 
SEC. 5505. TREASURY STUDY OF HIGHWAY FUELS USED BY 
TRUCKS FOR NON-TRANSPORTATION PUR-
POSES. 
(a) STUDY.—The Secretary of the Treasury shall con-
duct a study regarding the use of highway motor fuel by 
trucks that is not used for the propulsion of the vehicle. As 
part of such study— 
(1) in the case of vehicles carrying equipment 
that is unrelated to the transportation function of the 
vehicle— 
(A) the Secretary of the Treasury, in con-
sultation with the Secretary of Transportation, 
and with public notice and comment, shall deter-
mine the average annual amount of tax paid fuel 
consumed per vehicle, by type of vehicle, used by 
the propulsion engine to provide the power to op-
erate the equipment attached to the highway ve-
hicle, and 
(B) the Secretary of the Treasury shall re-
view the technical and administrative feasibility