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‘‘(i) EXCEPTION
FOR
FACILITIES
USED
TO
COOL 
STRUCTURES WITH OCEAN WATER, ETC..— 
‘‘(1) IN GENERAL.—Only for purposes of this sec-
tion, the term ‘private activity bond’ shall not include 
any exempt facility bond described in section 
142(a)(9) which is issued as part of an issue to fi-
nance any project which is designed to access deep 
water renewable thermal energy for district cooling to 
provide building air conditioning (including any dis-
tribution piping, pumping, and chiller facilities). 
‘‘(2) LIMITATION.—Paragraph (1) shall apply 
only to bonds issued as part of an issue the aggregate 
authorized face amount of which is not more than 
$75,000,000 with respect to any project described in 
such paragraph.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to projects placed in service after the 
date of enactment of this Act and before July 1, 2008. 
Subtitle F—Revenue Raising 
Provisions 
SEC. 1561. TREATMENT OF KEROSENE FOR USE IN AVIA-
TION. 
(a) ALL KEROSENE TAXED AT HIGHEST RATE.— 
(1) IN GENERAL.—Section 4081(a)(2)(A) (relat-
ing to rates of tax) is amended by adding ‘‘and’’ at
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the end of clause (ii), by striking ‘‘, and’’ at the end 
of clause (iii) and inserting a period, and by striking 
clause (iv). 
(2) EXCEPTION
FOR
USE
IN
AVIATION.—Sub-
paragraph (C) of section 4081(a)(2) is amended to 
read as follows: 
‘‘(C) TAXES
IMPOSED
ON
FUEL
USED
IN 
AVIATION.—In the case of kerosene which is re-
moved from any refinery or terminal directly 
into the fuel tank of an aircraft for use in avia-
tion, the rate of tax under subparagraph (A)(iii) 
shall be— 
‘‘(i) in the case of use for commercial 
aviation by a person registered for such use 
under section 4101, 4.3 cents per gallon, 
and 
‘‘(ii) in the case of use for aviation not 
described in clause (i), 21.8 cents per gal-
lon.’’. 
(3) APPLICABLE RATE IN CASE OF CERTAIN RE-
FUELER TRUCKS, TANKERS, AND TANK WAGONS.—Sec-
tion 4081(a)(3) (relating to certain refueler trucks, 
tankers, and tank wagons treated as terminals) is 
amended—
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(A) by striking ‘‘a secured area of’’ in sub-
paragraph (A)(i), and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(D) APPLICABLE RATE.—For purposes of 
paragraph (2)(C), in the case of any kerosene 
treated as removed from a terminal by reason of 
this paragraph— 
‘‘(i) the rate of tax specified in para-
graph (2)(C)(i) in the case of use described 
in such paragraph shall apply if such ter-
minal is located within a secured area of an 
airport, and 
‘‘(ii) the rate of tax specified in para-
graph (2)(C)(ii) shall apply in all other 
cases.’’. 
(4) CONFORMING AMENDMENTS.— 
(A) Sections 4081(a)(3)(A) and 4082(b) are 
amended by striking ‘‘aviation-grade’’ each place 
it appears. 
(B) Section 4081(a)(4) is amended by strik-
ing ‘‘paragraph (2)(C)’’ and inserting ‘‘para-
graph (2)(C)(i)’’.
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(C) The heading for paragraph (4) of sec-
tion 4081(a) is amended by striking ‘‘AVIATION- 
GRADE’’. 
(D) Section 4081(d)(2) is amended by strik-
ing so much as precedes subparagraph (A) and 
inserting the following: 
‘‘(2) AVIATION FUELS.—The rates of tax speci-
fied in subsections (a)(2)(A)(ii) and (a)(2)(C)(ii) 
shall be 4.3 cents per gallon—’’. 
(E) Subsection (e) of section 4082 is amend-
ed— 
(i) by striking ‘‘aviation-grade’’, 
(ii) 
by 
striking 
‘‘section 
4081(a)(2)(A)(iv)’’ and inserting ‘‘section 
4081(a)(2)(A)(iii)’’, 
(iii) by adding at the end the following 
new sentence: ‘‘For purposes of this sub-
section, any removal described in section 
4081(a)(3)(A) shall be treated as a removal 
from a terminal but only if such terminal 
is located within a secured area of an air-
port.’’, and 
(iv) by striking ‘‘Aviation-Grade Ker-
osene’’ in the heading thereof and inserting 
‘‘Kerosene Removed Into an Aircraft’’.
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(b) REDUCED RATE FOR USE OF CERTAIN LIQUIDS 
IN AVIATION.— 
(1) IN GENERAL.—Subsection (c) of section 4041 
(relating to imposition of tax) is amended— 
(A) by striking ‘‘aviation-grade kerosene’’ in 
paragraph (1) and inserting ‘‘any liquid for use 
as a fuel other than aviation gasoline’’, 
(B) by striking ‘‘aviation-grade kerosene’’ 
in paragraph (2) and inserting ‘‘liquid for use 
as a fuel other than aviation gasoline’’, 
(C) by striking paragraph (3) and inserting 
the following new paragraph: 
‘‘(3) RATE OF TAX.—The rate of tax imposed by 
this subsection shall be 21.8 cents per gallon (4.3 
cents per gallon with respect to any sale or use for 
commercial aviation).’’, and 
(D) by striking ‘‘Aviation-Grade Kerosene’’ 
in the heading thereof and inserting ‘‘Certain 
Liquids Used as a Fuel in Aviation’’. 
(2) PARTIAL REFUND OF FULL RATE.— 
(A) IN GENERAL.—Paragraph (2) of section 
6427(l) (relating to nontaxable uses of diesel fuel, 
kerosene and aviation fuel) is amended to read 
as follows: