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(i) Subsection (b) of section 4082 is
amended by adding at the end the following
new flush sentence: ‘‘The term ‘nontaxable
use’ does not include the use of aviation-
grade kerosene in an aircraft.’’.
(ii) Section 4082(d) is amended by
striking paragraph (1) and by redesig-
nating paragraphs (2) and (3) as para-
graphs (1) and (2), respectively.
(4) NONAIRCRAFT USE OF AVIATION-GRADE KER-
OSENE.—
(A) IN
GENERAL.—Subparagraph (B) of
section 4041(a)(1) is amended by adding at the
end the following new sentence: ‘‘This subpara-
graph shall not apply to aviation-grade ker-
osene.’’.
(B) CONFORMING AMENDMENT.—The head-
ing for paragraph (1) of section 4041(a) is
amended by inserting ‘‘AND
KEROSENE’’ after
‘‘DIESEL FUEL’’.
(b) COMMERCIAL AVIATION.—Section 4083 is amended
redesignating subsections (b) and (c) as subsections (c) and
(d), respectively, and by inserting after subsection (a) the
following new subsection:
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‘‘(b) COMMERCIAL AVIATION.—For purposes of this
subpart, the term ‘commercial aviation’ means any use of
an aircraft in a business of transporting persons or prop-
erty for compensation or hire by air, unless properly allo-
cable to any transportation exempt from the taxes imposed
by section 4261 and 4271 by reason of section 4281 or 4282
or by reason of section 4261(h).’’.
(c) REFUNDS.—
(1) IN
GENERAL.—Paragraph (4) of section
6427(l) is amended to read as follows:
‘‘(4) 
REFUNDS
FOR
AVIATION-GRADE
KER-
OSENE.—
‘‘(A) NO REFUND OF CERTAIN TAXES ON
FUEL USED IN COMMERCIAL AVIATION.—In the
case of aviation-grade kerosene used in commer-
cial aviation (as defined in section 4083(b))
(other than supplies for vessels or aircraft within
the meaning of section 4221(d)(3)), paragraph
(1) shall not apply to so much of the tax imposed
by section 4081 as is attributable to—
‘‘(i) the Leaking Underground Storage
Tank Trust Fund financing rate imposed
by such section, and
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‘‘(ii) so much of the rate of tax speci-
fied in section 4081(a)(2)(A)(iv) as does not
exceed 4.3 cents per gallon.
‘‘(B) PAYMENT TO ULTIMATE, REGISTERED
VENDOR.—With respect to aviation-grade ker-
osene, if the ultimate purchaser of such kerosene
waives (at such time and in such form and man-
ner as the Secretary shall prescribe) the right to
payment under paragraph (1) and assigns such
right to the ultimate vendor, then the Secretary
shall pay the amount which would be paid under
paragraph (1) to such ultimate vendor, but only
if such ultimate vendor—
‘‘(i) is registered under section 4101,
and
‘‘(ii) meets the requirements of sub-
paragraph (A), (B), or (D) of section
6416(a)(1).’’.
(2) TIME FOR FILING CLAIMS.—Subparagraph
(A) of section 6427(i)(4) is amended—
(A) by striking ‘‘subsection (l)(5)’’ both
places it appears and inserting ‘‘paragraph
(4)(B) or (5) of subsection (l)’’, and
(B) by striking ‘‘the preceding sentence’’
and inserting ‘‘subsection (l)(5)’’.
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(3) CONFORMING
AMENDMENT.—Subparagraph
(B) of section 6427(l)(2) is amended to read as fol-
lows:
‘‘(B) 
in 
the 
case 
of 
aviation-grade
kerosene—
‘‘(i) any use which is exempt from the
tax imposed by section 4041(c) other than
by reason of a prior imposition of tax, or
‘‘(ii) any use in commercial aviation
(within the meaning of section 4083(b)).’’.
(d) REPEAL
OF
PRIOR
TAXATION
OF
AVIATION
FUEL.—
(1) IN GENERAL.—Part III of subchapter A of
chapter 32 is amended by striking subpart B and by
redesignating subpart C as subpart B.
(2) CONFORMING AMENDMENTS.—
(A) Section 4041(c) is amended to read as
follows:
‘‘(c) AVIATION-GRADE KEROSENE.—
‘‘(1) IN GENERAL.—There is hereby imposed a
tax upon aviation-grade kerosene—
‘‘(A) sold by any person to an owner, lessee,
or other operator of an aircraft for use in such
aircraft, or
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‘‘(B) used by any person in an aircraft un-
less there was a taxable sale of such fuel under
subparagraph (A).
‘‘(2) 
EXEMPTION
FOR
PREVIOUSLY
TAXED
FUEL.—No tax shall be imposed by this subsection on
the sale or use of any aviation-grade kerosene if tax
was imposed on such liquid under section 4081 and
the tax thereon was not credited or refunded.
‘‘(3) RATE OF TAX.—The rate of tax imposed by
this subsection shall be the rate of tax specified in sec-
tion 4081(a)(2)(A)(iv) which is in effect at the time
of such sale or use.’’.
(B) Section 4041(d)(2) is amended by strik-
ing ‘‘section 4091’’ and inserting ‘‘section 4081’’.
(C) Section 4041 is amended by striking
subsection (e).
(D) Section 4041 is amended by striking
subsection (i).
(E) Section 4041(m)(1) is amended to read
as follows:
‘‘(1) IN GENERAL.—In the case of the sale or use
of any partially exempt methanol or ethanol fuel, the
rate of the tax imposed by subsection (a)(2) shall be—
‘‘(A) after September 30, 1997, and before
September 30, 2009—
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‘‘(i) in the case of fuel none of the alco-
hol in which consists of ethanol, 9.15 cents
per gallon, and
‘‘(ii) in any other case, 11.3 cents per
gallon, and
‘‘(B) after September 30, 2009—
‘‘(i) in the case of fuel none of the alco-
hol in which consists of ethanol, 2.15 cents
per gallon, and
‘‘(ii) in any other case, 4.3 cents per
gallon.’’.
(F) Sections 4101(a), 4103, 4221(a), and
6206 are each amended by striking ‘‘, 4081, or
4091’’ and inserting ‘‘or 4081’’.
(G) Section 6416(b)(2) is amended by strik-
ing ‘‘4091 or’’.
(H) Section 6416(b)(3) is amended by strik-
ing ‘‘or 4091’’ each place it appears.
(I) Section 6416(d) is amended by striking
‘‘or to the tax imposed by section 4091 in the
case of refunds described in section 4091(d)’’.
(J) Section 6427 is amended by striking
subsection (f).
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(K) Section 6427(j)(1) is amended by strik-
ing ‘‘, 4081, and 4091’’ and inserting ‘‘and
4081’’.
(L)(i) Section 6427(l)(1) is amended to
read as follows:
‘‘(1) IN GENERAL.—Except as otherwise provided
in this subsection and in subsection (k), if any diesel
fuel or kerosene on which tax has been imposed by
section 4041 or 4081 is used by any person in a non-
taxable use, the Secretary shall pay (without interest)
to the ultimate purchaser of such fuel an amount
equal to the aggregate amount of tax imposed on such
fuel under section 4041 or 4081, as the case may be,
reduced by any refund paid to the ultimate vendor
under paragraph (4)(B).’’.
(ii) Paragraph (5)(B) of section 6427(l) is
amended by striking ‘‘Paragraph (1)(A) shall
not apply to kerosene’’ and inserting ‘‘Para-
graph (1) shall not apply to kerosene (other than
aviation-grade kerosene)’’.
(M) 
Subparagraph 
(B) 
of 
section
6724(d)(1), as amended by this Act, is amended
by striking clause (xvi) and by redesignating
clauses (xvii), (xviii), and (xix) as clauses (xvi),
(xvii), and (xviii), respectively.
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(N) Paragraph (2) of section 6724(d), as
amended by this Act, is amended by striking
subparagraph (X) and by redesignating subpara-
graphs (Y), (Z), (AA), (BB), and (CC) as sub-
paragraphs (X), (Y), (Z), (AA), and (BB), re-
spectively.
(O) Paragraph (1) of section 9502(b) is
amended by adding ‘‘and’’ at the end of subpara-
graph (B) and by striking subparagraphs (C)
and (D) and inserting the following new sub-
paragraph:
‘‘(C) section 4081 with respect to aviation
gasoline and aviation-grade kerosene, and’’.
(P) The last sentence of section 9502(b) is
amended to read as follows:
‘‘There shall not be taken into account under paragraph
(1) so much of the taxes imposed by section 4081 as are
determined at the rate specified in section 4081(a)(2)(B).’’.
(Q) Subsection (b) of section 9508 is
amended by striking paragraph (3) and by re-
designating paragraphs (4) and (5) as para-
graphs (3) and (4), respectively.
(R) Section 9508(c)(2)(A) is amended by
striking ‘‘sections 4081 and 4091’’ and inserting
‘‘section 4081’’.
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(S) The table of subparts for part III of
subchapter A of chapter 32 is amended to read
as follows:
‘‘Subpart A. Motor and aviation fuels.
‘‘Subpart B. Special provisions applicable to fuels tax.’’.
(T) The heading for subpart A of part III
of subchapter A of chapter 32 is amended to read
as follows:
‘‘Subpart A—Motor and Aviation Fuels’’.
(U) The heading for subpart B of part III
of subchapter A of chapter 32 is amended to read
as follows:
‘‘Subpart B—Special Provisions Applicable to Fuels
Tax’’.
(e) EFFECTIVE DATE.—The amendments made by this
section shall apply to aviation-grade kerosene removed, en-
tered, or sold after September 30, 2004.
(f) FLOOR STOCKS TAX.—
(1) IN GENERAL.—There is hereby imposed on
aviation-grade kerosene held on October 1, 2004, by
any person a tax equal to—
(A) the tax which would have been imposed
before such date on such kerosene had the amend-
ments made by this section been in effect at all
times before such date, reduced by
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(B) the tax imposed before such date under
section 4091 of the Internal Revenue Code of
1986, as in effect on the day before the date of
the enactment of this Act.
(2) LIABILITY FOR TAX AND METHOD OF PAY-
MENT.—
(A) LIABILITY FOR TAX.—The person hold-
ing the kerosene on October 1, 2004, to which the
tax imposed by paragraph (1) applies shall be
liable for such tax.
(B) METHOD AND TIME FOR PAYMENT.—
The tax imposed by paragraph (1) shall be paid
at such time and in such manner as the Sec-
retary of the Treasury shall prescribe, including
the nonapplication of such tax on de minimis
amounts of kerosene.
(3) TRANSFER OF FLOOR STOCK TAX REVENUES
TO TRUST FUNDS.—For purposes of determining the
amount transferred to any trust fund, the tax im-
posed by this subsection shall be treated as imposed
by section 4081 of the Internal Revenue Code of
1986—
(A) at the Leaking Underground Storage
Tank Trust Fund financing rate under such sec-
tion to the extent of 0.1 cents per gallon, and
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(B) 
at 
the 
rate 
under 
section
4081(a)(2)(A)(iv) to the extent of the remainder.
(4) HELD BY A PERSON.—For purposes of this
section, kerosene shall be considered as held by a per-
son if title thereto has passed to such person (whether
or not delivery to the person has been made).
(5) OTHER LAWS APPLICABLE.—All provisions of
law, including penalties, applicable with respect to
the tax imposed by section 4081 of such Code shall,
insofar as applicable and not inconsistent with the
provisions of this subsection, apply with respect to the
floor stock tax imposed by paragraph (1) to the same
extent as if such tax were imposed by such section.
SEC. 872. TRANSFER OF CERTAIN AMOUNTS FROM THE AIR-
PORT AND AIRWAY TRUST FUND TO THE
HIGHWAY TRUST FUND TO REFLECT HIGH-
WAY USE OF JET FUEL.
(a) IN GENERAL.—Section 9502(d) is amended by
adding at the end the following new paragraph:
‘‘(7) TRANSFERS
FROM
THE
TRUST
FUND
TO
THE HIGHWAY TRUST FUND.—
‘‘(A) IN GENERAL.—The Secretary shall pay
annually from the Airport and Airway Trust
Fund into the Highway Trust Fund an amount
(as determined by him) equivalent to amounts
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received in the Airport and Airway Trust Fund
which are attributable to fuel that is used pri-
marily for highway transportation purposes.
‘‘(B) AMOUNTS
TRANSFERRED
TO
MASS
TRANSIT ACCOUNT.—The Secretary shall transfer
11 percent of the amounts paid into the High-
way Trust Fund under subparagraph (A) to the
Mass Transit Account established under section
9503(e).’’.
(b) CONFORMING AMENDMENTS.—
(1) Subsection (a) of section 9503 is amended—
(A) by striking ‘‘appropriated or credited’’
and inserting ‘‘paid, appropriated, or credited’’,
and
(B) by striking ‘‘or section 9602(b)’’ and in-
serting ‘‘, section 9502(d)(7), or section 9602(b)’’.
(2) Subsection (e)(1) of section 9503 is amended
by striking ‘‘or section 9602(b)’’ and inserting ‘‘, sec-
tion 9502(d)(7), or section 9602(b)’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect on October 1, 2004.
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PART II—DYED FUEL
SEC. 873. DYE INJECTION EQUIPMENT.
(a) IN GENERAL.—Section 4082(a)(2) (relating to ex-
emptions for diesel fuel and kerosene) is amended by insert-
ing ‘‘by mechanical injection’’ after ‘‘indelibly dyed’’.
(b) DYE INJECTOR SECURITY.—Not later than June
30, 2004, the Secretary of the Treasury shall issue regula-
tions regarding mechanical dye injection systems described
in the amendment made by subsection (a), and such regula-
tions shall include standards for making such systems tam-
per resistant.
(c) PENALTY FOR TAMPERING WITH OR FAILING TO
MAINTAIN SECURITY REQUIREMENTS
FOR MECHANICAL
DYE INJECTION SYSTEMS.—
(1) IN GENERAL.—Part I of subchapter B of
chapter 68 (relating to assessable penalties) is amend-
ed by adding after section 6715 the following new sec-
tion:
‘‘SEC. 6715A. TAMPERING WITH OR FAILING TO MAINTAIN
SECURITY REQUIREMENTS FOR MECHANICAL
DYE INJECTION SYSTEMS.
‘‘(a) IMPOSITION OF PENALTY.—
‘‘(1) TAMPERING.—If any person tampers with a
mechanical dye injection system used to indelibly dye
fuel for purposes of section 4082, then such person
shall pay a penalty in addition to the tax (if any).
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‘‘(2) FAILURE TO MAINTAIN SECURITY REQUIRE-
MENTS.—If any operator of a mechanical dye injec-
tion system used to indelibly dye fuel for purposes of
section 4082 fails to maintain the security standards
for such system as established by the Secretary, then
such operator shall pay a penalty.
‘‘(b) AMOUNT OF PENALTY.—The amount of the pen-
alty under subsection (a) shall be—
‘‘(1) for each violation described in paragraph
(1), the greater of—
‘‘(A) $25,000, or
‘‘(B) $10 for each gallon of fuel involved,
and
‘‘(2) for each—
‘‘(A) failure to maintain security standards
described in paragraph (2), $1,000, and
‘‘(B) failure to correct a violation described
in paragraph (2), $1,000 per day for each day
after which such violation was discovered or such
person should have reasonably known of such
violation.
‘‘(c) JOINT AND SEVERAL LIABILITY.—
‘‘(1) IN
GENERAL.—If a penalty is imposed
under this section on any business entity, each officer,
employee, or agent of such entity or other contracting
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party who willfully participated in any act giving
rise to such penalty shall be jointly and severally lia-
ble with such entity for such penalty.
‘‘(2) AFFILIATED GROUPS.—If a business entity
described in paragraph (1) is part of an affiliated
group (as defined in section 1504(a)), the parent cor-
poration of such entity shall be jointly and severally
liable with such entity for the penalty imposed under
this section.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for part I of subchapter B of chapter 68 is
amended by adding after the item related to section
6715 the following new item:
‘‘Sec. 6715A. Tampering with or failing to maintain security re-
quirements for mechanical dye injection systems.’’.
(d) EFFECTIVE DATE.—The amendments made by
subsections (a) and (c) shall take effect 180 days after the
date on which the Secretary issues the regulations described
in subsection (b).
SEC. 874. ELIMINATION OF ADMINISTRATIVE REVIEW FOR
TAXABLE USE OF DYED FUEL.
(a) IN GENERAL.—Section 6715 is amended by insert-
ing at the end the following new subsection:
‘‘(e) NO ADMINISTRATIVE APPEAL FOR THIRD AND
SUBSEQUENT VIOLATIONS.—In the case of any person who
is found to be subject to the penalty under this section after
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a chemical analysis of such fuel and who has been penalized
under this section at least twice after the date of the enact-
ment of this subsection, no administrative appeal or review
shall be allowed with respect to such finding except in the
case of a claim regarding—
‘‘(1) fraud or mistake in the chemical analysis,
or
‘‘(2) mathematical calculation of the amount of
the penalty.’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to penalties assessed after the date of
the enactment of this Act.
SEC. 875. PENALTY ON UNTAXED CHEMICALLY ALTERED
DYED FUEL MIXTURES.
(a) IN GENERAL.—Section 6715(a) (relating to dyed
fuel sold for use or used in taxable use, etc.) is amended
by striking ‘‘or’’ in paragraph (2), by inserting ‘‘or’’ at the
end of paragraph (3), and by inserting after paragraph (3)
the following new paragraph:
‘‘(4) any person who has knowledge that a dyed
fuel which has been altered as described in paragraph
(3) sells or holds for sale such fuel for any use which
the person knows or has reason to know is not a non-
taxable use of such fuel,’’.
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(b) CONFORMING AMENDMENT.—Section 6715(a)(3) is
amended by striking ‘‘alters, or attempts to alter,’’ and in-
serting ‘‘alters, chemically or otherwise, or attempts to so
alter,’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect on the date of the enactment of this
Act.
SEC. 876. TERMINATION OF DYED DIESEL USE BY INTER-
CITY BUSES.
(a) IN GENERAL.—Paragraph (3) of section 4082(b)
(relating to nontaxable use) is amended to read as follows:
‘‘(3) 
any 
use 
described 
in 
section
4041(a)(1)(C)(iii)(II).’’.
(b) ULTIMATE VENDOR REFUND.—Subsection (b) of
section 6427 is amended by adding at the end the following
new paragraph:
‘‘(4) REFUNDS FOR USE OF DIESEL FUEL IN
CERTAIN INTERCITY BUSES.—
‘‘(A) IN
GENERAL.—With respect to any
fuel to which paragraph (2)(A) applies, if the ul-
timate purchaser of such fuel waives (at such
time and in such form and manner as the Sec-
retary shall prescribe) the right to payment
under paragraph (1) and assigns such right to
the ultimate vendor, then the Secretary shall pay
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the amount which would be paid under para-
graph (1) to such ultimate vendor, but only if
such ultimate vendor—
‘‘(i) is registered under section 4101,
and
‘‘(ii) meets the requirements of sub-
paragraph (A), (B), or (D) of section
6416(a)(1).
‘‘(B) CREDIT CARDS.—For purposes of this
paragraph, if the sale of such fuel is made by
means of a credit card, the person extending
credit to the ultimate purchaser shall be deemed
to be the ultimate vendor.’’.
(c) PAYMENT OF REFUNDS.—Subparagraph (A) of sec-
tion 6427(i)(4), as amended by this Act, is amended by in-
serting ‘‘subsections (b)(4) and’’ after ‘‘filed under’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to fuel sold after September 30, 2004.
PART III—MODIFICATION OF INSPECTION OF
RECORDS PROVISIONS
SEC. 877. AUTHORITY TO INSPECT ON-SITE RECORDS.
(a) IN GENERAL.—Section 4083(d)(1)(A) (relating to
administrative authority), as amended by this Act, is
amended by striking ‘‘and’’ at the end of clause (i) and
by inserting after clause (ii) the following new clause:
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‘‘(iii) inspecting any books and records
and any shipping papers pertaining to such
fuel, and’’.
(b) EFFECTIVE DATE.—The amendments made by this
section shall take effect on the date of the enactment of this
Act.
SEC. 878. ASSESSABLE PENALTY FOR REFUSAL OF ENTRY.
(a) IN GENERAL.—Part I of subchapter B of chapter
68 (relating to assessable penalties), as amended by this
Act, is amended by adding at the end the following new
section:
‘‘SEC. 6717. REFUSAL OF ENTRY.
‘‘(a) IN GENERAL.—In addition to any other penalty
provided by law, any person who refuses to admit entry
or refuses to permit any other action by the Secretary au-
thorized by section 4083(d)(1) shall pay a penalty of $1,000
for such refusal.
‘‘(b) JOINT AND SEVERAL LIABILITY.—
‘‘(1) IN
GENERAL.—If a penalty is imposed
under this section on any business entity, each officer,
employee, or agent of such entity or other contracting
party who willfully participated in any act giving
rise to such penalty shall be jointly and severally lia-
ble with such entity for such penalty.
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‘‘(2) AFFILIATED GROUPS.—If a business entity
described in paragraph (1) is part of an affiliated
group (as defined in section 1504(a)), the parent cor-
poration of such entity shall be jointly and severally
liable with such entity for the penalty imposed under
this section.
‘‘(c) REASONABLE CAUSE EXCEPTION.—No penalty
shall be imposed under this section with respect to any fail-
ure if it is shown that such failure is due to reasonable
cause.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 4083(d)(3), as amended by this Act,
is amended—
(A) by striking ‘‘ENTRY.—The penalty’’ and
inserting: ‘‘ENTRY.—
‘‘(A) FORFEITURE.—The penalty’’, and
(B) by adding at the end the following new
subparagraph:
‘‘(B) ASSESSABLE
PENALTY.—For addi-
tional assessable penalty for the refusal to admit
entry or other refusal to permit an action by the
Secretary authorized by paragraph (1), see sec-
tion 6717.’’.
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(2) The table of sections for part I of subchapter
B of chapter 68, as amended by this Act, is amended
by adding at the end the following new item:
‘‘Sec. 6717. Refusal of entry.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect on October 1, 2004.
PART IV—REGISTRATION AND REPORTING
REQUIREMENTS
SEC. 879. REGISTRATION OF PIPELINE OR VESSEL OPERA-
TORS REQUIRED FOR EXEMPTION OF BULK
TRANSFERS TO REGISTERED TERMINALS OR
REFINERIES.
(a) IN GENERAL.—Section 4081(a)(1)(B) (relating to
exemption for bulk transfers to registered terminals or refin-
eries) is amended—
(1) by inserting ‘‘by pipeline or vessel’’ after
‘‘transferred in bulk’’, and
(2) by inserting ‘‘, the operator of such pipeline
or vessel,’’ after ‘‘the taxable fuel’’.
(b) CIVIL PENALTY FOR CARRYING TAXABLE FUELS
BY NONREGISTERED PIPELINES OR VESSELS.—
(1) IN GENERAL.—Part I of subchapter B of
chapter 68 (relating to assessable penalties), as
amended by this Act, is amended by adding at the
end the following new section:
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‘‘SEC. 6718. CARRYING TAXABLE FUELS BY NONREGISTERED
PIPELINES OR VESSELS.
‘‘(a) IMPOSITION OF PENALTY.—If any person know-
ingly transfers any taxable fuel (as defined in section
4083(a)(1)) in bulk pursuant to section 4081(a)(1)(B) to
an unregistered, such person shall pay a penalty in addi-
tion to the tax (if any).
‘‘(b) AMOUNT OF PENALTY.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the amount of the penalty under subsection
(a) on each act shall be an amount equal to the great-
er of—
‘‘(A) $10,000, or
‘‘(B) $1 per gallon.
‘‘(2) MULTIPLE
VIOLATIONS.—In determining
the penalty under subsection (a) on any person, para-
graph (1) shall be applied by increasing the amount
in paragraph (1) by the product of such amount and
the number of prior penalties (if any) imposed by this
section on such person (or a related person or any
predecessor of such person or related person).
‘‘(c) JOINT AND SEVERAL LIABILITY.—
‘‘(1) IN
GENERAL.—If a penalty is imposed
under this section on any business entity, each officer,
employee, or agent of such entity or other contracting
party who willfully participated in any act giving
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rise to such penalty shall be jointly and severally lia-
ble with such entity for such penalty.
‘‘(2) AFFILIATED GROUPS.—If a business entity
described in paragraph (1) is part of an affiliated
group (as defined in section 1504(a)), the parent cor-
poration of such entity shall be jointly and severally
liable with such entity for the penalty imposed under
this section.
‘‘(d) REASONABLE CAUSE EXCEPTION.—No penalty
shall be imposed under this section with respect to any fail-
ure if it is shown that such failure is due to reasonable
cause.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for part I of subchapter B of chapter 68, as
amended by this Act, is amended by adding at the
end the following new item:
‘‘Sec. 6718. Carrying taxable fuels by nonregistered pipelines or
vessels.’’.
(c) PUBLICATION
OF REGISTERED PERSONS.—Not
later than June 30, 2004, the Secretary of the Treasury
shall publish a list of persons required to be registered under
section 4101 of the Internal Revenue Code of 1986.
(d) EFFECTIVE DATE.—The amendments made by
subsections (a) and (b) shall take effect on October 1, 2004.
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SEC. 880. DISPLAY OF REGISTRATION.
(a) IN GENERAL.—Subsection (a) of section 4101 (re-
lating to registration) is amended—
(1) by striking ‘‘Every’’ and inserting the fol-
lowing:
‘‘(1) IN GENERAL.—Every’’, and
(2) by adding at the end the following new para-
graph:
‘‘(2) DISPLAY OF REGISTRATION.—Every oper-
ator of a vessel required by the Secretary to register
under this section shall display proof of registration
through an electronic identification device prescribed
by the Secretary on each vessel used by such operator
to transport any taxable fuel.’’.
(b) CIVIL PENALTY FOR FAILURE TO DISPLAY REG-
ISTRATION.—
(1) IN GENERAL.—Part I of subchapter B of
chapter 68 (relating to assessable penalties), as
amended by this Act, is amended by adding at the
end the following new section:
‘‘SEC. 6719. FAILURE TO DISPLAY REGISTRATION OF VES-
SEL.
‘‘(a) FAILURE
TO DISPLAY REGISTRATION.—Every
operator of a vessel who fails to display proof of registration
pursuant to section 4101(a)(2) shall pay a penalty of $500
for each such failure. With respect to any vessel, only one
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penalty shall be imposed by this section during any cal-
endar month.
‘‘(b) MULTIPLE VIOLATIONS.—In determining the pen-
alty under subsection (a) on any person, subsection (a) shall
be applied by increasing the amount in subsection (a) by
the product of such amount and the number of prior pen-
alties (if any) imposed by this section on such person (or
a related person or any predecessor of such person or related
person).
‘‘(c) REASONABLE CAUSE EXCEPTION.—No penalty
shall be imposed under this section with respect to any fail-
ure if it is shown that such failure is due to reasonable
cause.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for part I of subchapter B of chapter 68, as
amended by this Act, is amended by adding at the
end the following new item:
‘‘Sec. 6719. Failure to display registration of vessel.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect on October 1, 2004.
SEC. 881. REGISTRATION OF PERSONS WITHIN FOREIGN
TRADE ZONES, ETC.
(a) IN GENERAL.—Section 4101(a), as amended by
this Act, is amended by redesignating paragraph (2) as
paragraph (3), and by inserting after paragraph (1) the
following new paragraph:
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‘‘(2) REGISTRATION OF PERSONS WITHIN FOR-
EIGN TRADE ZONES, ETC.—The Secretary shall re-
quire registration by any person which—
‘‘(A) operates a terminal or refinery within
a foreign trade zone or within a customs bonded
storage facility, or
‘‘(B) holds an inventory position with re-
spect to a taxable fuel in such a terminal.’’.
(b) EFFECTIVE DATE.—The amendments made by this
section shall take effect on October 1, 2004.
SEC. 882. PENALTIES FOR FAILURE TO REGISTER AND FAIL-
URE TO REPORT.
(a) INCREASED PENALTY.—Subsection (a) of section
7272 (relating to penalty for failure to register) is amended
by inserting ‘‘($10,000 in the case of a failure to register
under section 4101)’’ after ‘‘$50’’.
(b) INCREASED CRIMINAL PENALTY.—Section 7232
(relating to failure to register under section 4101, false rep-
resentations of registration status, etc.) is amended by strik-
ing ‘‘$5,000’’ and inserting ‘‘$10,000’’.
(c) ASSESSABLE PENALTY
FOR FAILURE
TO REG-
ISTER.—
(1) IN GENERAL.—Part I of subchapter B of
chapter 68 (relating to assessable penalties), as
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amended by this Act, is amended by adding at the
end the following new section:
‘‘SEC. 6720. FAILURE TO REGISTER.
‘‘(a) FAILURE TO REGISTER.—Every person who is re-
quired to register under section 4101 and fails to do so shall
pay a penalty in addition to the tax (if any).
‘‘(b) AMOUNT OF PENALTY.—The amount of the pen-
alty under subsection (a) shall be—
‘‘(1) $10,000 for each initial failure to register,
and
‘‘(2) $1,000 for each day thereafter such person
fails to register.
‘‘(c) REASONABLE CAUSE EXCEPTION.—No penalty
shall be imposed under this section with respect to any fail-
ure if it is shown that such failure is due to reasonable
cause.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for part I of subchapter B of chapter 68, as
amended by this Act, is amended by adding at the
end the following new item:
‘‘Sec. 6720. Failure to register.’’.
(d) ASSESSABLE PENALTY
FOR FAILURE
TO RE-
PORT.—
(1) IN GENERAL.—Part II of subchapter B of
chapter 68 (relating to assessable penalties) is amend-
ed by adding at the end the following new section:
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‘‘SEC. 6725. FAILURE TO REPORT INFORMATION UNDER
SECTION 4101.
‘‘(a) IN GENERAL.—In the case of each failure de-
scribed in subsection (b) by any person with respect to a
vessel or facility, such person shall pay a penalty of $10,000
in addition to the tax (if any).
‘‘(b) FAILURES SUBJECT TO PENALTY.—For purposes
of subsection (a), the failures described in this subsection
are—
‘‘(1) any failure to make a report under section
4101(d) on or before the date prescribed therefor, and
‘‘(2) any failure to include all of the information
required to be shown on such report or the inclusion
of incorrect information.
‘‘(c) REASONABLE CAUSE EXCEPTION.—No penalty
shall be imposed under this section with respect to any fail-
ure if it is shown that such failure is due to reasonable
cause.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for part II of subchapter B of chapter 68 is
amended by adding at the end the following new item:
‘‘Sec. 6725. Failure to report information under section 4101.’’.
(e) EFFECTIVE DATE.—The amendments made by this
section shall apply to failures pending or occurring after
September 30, 2004.
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SEC. 883. INFORMATION REPORTING FOR PERSONS CLAIM-
ING CERTAIN TAX BENEFITS.
(a) IN GENERAL.—Subpart C of part III of subchapter
A of chapter 32 is amended by adding at the end the fol-
lowing new section:
‘‘SEC. 
4104. 
INFORMATION 
REPORTING 
FOR 
PERSONS
CLAIMING CERTAIN TAX BENEFITS.
‘‘(a) IN GENERAL.—The Secretary shall require any
person claiming tax benefits—
‘‘(1) under the provisions of section 34, 40, and
40B to file a return at the time such person claims
such benefits (in such manner as the Secretary may
prescribe), and
‘‘(2) under the provisions of section 4041(b)(2),
6426, or 6427(e) to file a monthly return (in such
manner as the Secretary may prescribe).
‘‘(b) CONTENTS OF RETURN.—Any return filed under
this section shall provide such information relating to such
benefits and the coordination of such benefits as the Sec-
retary may require to ensure the proper administration and
use of such benefits.
‘‘(c) ENFORCEMENT.—With respect to any person de-
scribed in subsection (a) and subject to registration require-
ments under this title, rules similar to rules of section
4222(c) shall apply with respect to any requirement under
this section.’’.
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(b) CONFORMING AMENDMENT.—The table of sections
for subpart C of part III of subchapter A of chapter 32
is amended by adding at the end the following new item:
‘‘Sec. 4104. Information reporting for persons claiming certain tax benefits.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect on October 1, 2004.
PART V—IMPORTS
SEC. 884. TAX AT POINT OF ENTRY WHERE IMPORTER NOT
REGISTERED.
(a) TAX AT POINT OF ENTRY WHERE IMPORTER NOT
REGISTERED.—
(1) IN GENERAL.—Subpart C of part III of sub-
chapter A of chapter 31, as amended by this Act, is
amended by adding at the end the following new sec-
tion:
‘‘SEC. 4105. TAX AT ENTRY WHERE IMPORTER NOT REG-
ISTERED.
‘‘(a) IN GENERAL.—Any tax imposed under this part
on any person not registered under section 4101 for the
entry of a fuel into the United States shall be imposed at
the time and point of entry.
‘‘(b) ENFORCEMENT OF ASSESSMENT.—If any person
liable for any tax described under subsection (a) has not
paid the tax or posted a bond, the Secretary may—
‘‘(1) seize the fuel on which the tax is due, or
‘‘(2) detain any vehicle transporting such fuel,
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HR 4520 EAS
until such tax is paid or such bond is filed.
‘‘(c) LEVY OF FUEL.—If no tax has been paid or no
bond has been filed within 5 days from the date the Sec-
retary seized fuel pursuant to subsection (b), the Secretary
may sell such fuel as provided under section 6336.’’.
(2) CONFORMING AMENDMENT.—The table of sec-
tions for subpart C of part III of subchapter A of
chapter 31 of the Internal Revenue Code of 1986, as
amended by section 5245 of this Act, is amended by
adding after the last item the following new item:
‘‘Sec. 4105. Tax at entry where importer not registered.’’.
(b) DENIAL OF ENTRY WHERE TAX NOT PAID.—The
Secretary of Homeland Security is authorized to deny entry
into the United States of any shipment of a fuel which is
taxable under section 4081 of the Internal Revenue Code
of 1986 if the person entering such shipment fails to pay
the tax imposed under such section or post a bond in ac-
cordance with the provisions of section 4105 of such Code.
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect on the date of the enactment of this
Act.
SEC. 885. RECONCILIATION OF ON-LOADED CARGO TO EN-
TERED CARGO.
(a) IN GENERAL.—Subsection (a) of section 343 of the
Trade Act of 2002 is amended by inserting at the end the
following new paragraph:
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‘‘(4) IN GENERAL.—Subject to paragraphs (2)
and (3), not later than 1 year after the enactment of
this paragraph, the Secretary of Homeland Security,
together with the Secretary of the Treasury, shall pro-
mulgate regulations providing for the transmission to
the Internal Revenue Service, through an electronic
data interchange system, of information pertaining to
cargo of taxable fuels (as defined in section 4083 of
the Internal Revenue Code of 1986) destined for im-
portation into the United States prior to such impor-
tation.’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall take effect on the date of the enactment of this
Act.
PART VI—MISCELLANEOUS PROVISIONS
SEC. 886. TAX ON SALE OF DIESEL FUEL WHETHER SUIT-
ABLE FOR USE OR NOT IN A DIESEL-POW-
ERED VEHICLE OR TRAIN.
(a) IN GENERAL.—Section 4083(a)(3) is amended—
(1) by striking ‘‘The term’’ and inserting the fol-
lowing:
‘‘(A) IN GENERAL.—The term’’, and
(2) by inserting at the end the following new
subparagraph:
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HR 4520 EAS
‘‘(B) LIQUID SOLD AS DIESEL FUEL.—The
term ‘diesel fuel’ includes any liquid which is
sold as or offered for sale as a fuel in a diesel-
powered highway vehicle or a diesel-powered
train.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 40B(b)(1)(B), as added by this Act,
is amended by striking ‘‘4083(a)(3)’’ and inserting
‘‘4083(a)(3)(A)’’.
(2) Section 6426(c)(3), as added by this Act, is
amended by striking ‘‘4083(a)(3)’’ and inserting
‘‘4083(a)(3)(A)’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect on the date of the enactment of this
Act.
SEC. 887. MODIFICATION OF ULTIMATE VENDOR REFUND
CLAIMS WITH RESPECT TO FARMING.
(a) IN GENERAL.—
(1) REFUNDS.—Section 6427(l) is amended by
adding at the end the following new paragraph:
‘‘(6) REGISTERED VENDORS PERMITTED TO AD-
MINISTER CERTAIN CLAIMS FOR REFUND OF DIESEL
FUEL AND KEROSENE SOLD TO FARMERS.—
‘‘(A) IN GENERAL.—In the case of diesel fuel
or kerosene used on a farm for farming purposes
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HR 4520 EAS
(within the meaning of section 6420(c)), para-
graph (1) shall not apply to the aggregate
amount of such diesel fuel or kerosene if such
amount does not exceed 500 gallons (as deter-
mined under subsection (i)(5)(A)(iii)).
‘‘(B) PAYMENT TO ULTIMATE VENDOR.—The
amount which would (but for subparagraph (A))
have been paid under paragraph (1) with respect
to any fuel shall be paid to the ultimate vendor
of such fuel, if such vendor—
‘‘(i) is registered under section 4101,
and
‘‘(ii) meets the requirements of sub-
paragraph (A), (B), or (D) of section
6416(a)(1).’’.
(2) FILING
OF
CLAIMS.—Section 6427(i) is
amended by inserting at the end the following new
paragraph:
‘‘(5) SPECIAL RULE FOR VENDOR REFUNDS WITH
RESPECT TO FARMERS.—
‘‘(A) IN GENERAL.—A claim may be filed
under subsection (l)(6) by any person with re-
spect to fuel sold by such person for any
period—
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HR 4520 EAS
‘‘(i) for which $200 or more ($100 or
more in the case of kerosene) is payable
under subsection (l)(6),
‘‘(ii) which is not less than 1 week,
and
‘‘(iii) which is for not more than 500
gallons for each farmer for which there is a
claim.
Notwithstanding subsection (l)(1), paragraph
(3)(B) shall apply to claims filed under the pre-
ceding sentence.
‘‘(B) TIME FOR FILING CLAIM.—No claim
filed under this paragraph shall be allowed un-
less filed on or before the last day of the first
quarter following the earliest quarter included in
the claim.’’.
(3) CONFORMING AMENDMENTS.—
(A) Section 6427(l)(5)(A) is amended to
read as follows:
‘‘(A) IN
GENERAL.—Paragraph (1) shall
not apply to diesel fuel or kerosene used by a
State or local government.’’.
(B) The heading for section 6427(l)(5) is
amended by striking ‘‘FARMERS AND’’.
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(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to fuels sold for nontaxable use after the
date of the enactment of this Act.
SEC. 888. TAXABLE FUEL REFUNDS FOR CERTAIN ULTIMATE
VENDORS.
(a) IN GENERAL.—Paragraph (4) of section 6416(a)
(relating to abatements, credits, and refunds) is amended
to read as follows:
‘‘(4) REGISTERED ULTIMATE VENDOR TO ADMIN-
ISTER CREDITS AND REFUNDS OF GASOLINE TAX.—
‘‘(A) IN
GENERAL.—For purposes of this
subsection, if an ultimate vendor purchases any
gasoline on which tax imposed by section 4081
has been paid and sells such gasoline to an ulti-
mate purchaser described in subparagraph (C)
or (D) of subsection (b)(2) (and such gasoline is
for a use described in such subparagraph), such
ultimate vendor shall be treated as the person
(and the only person) who paid such tax, but
only if such ultimate vendor is registered under
section 4101. For purposes of this subparagraph,
if the sale of gasoline is made by means of a
credit card, the person extending the credit to the
ultimate purchaser shall be deemed to be the ulti-
mate vendor.
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‘‘(B) TIMING
OF
CLAIMS.—The procedure
and timing of any claim under subparagraph
(A) shall be the same as for claims under section
6427(i)(4), except that the rules of section
6427(i)(3)(B) regarding electronic claims shall
not apply unless the ultimate vendor has cer-
tified to the Secretary for the most recent quarter
of the taxable year that all ultimate purchasers
of the vendor are certified and entitled to a re-
fund under subparagraph (C) or (D) of sub-
section (b)(2).’’.
(b) CREDIT CARD PURCHASES OF DIESEL FUEL OR
KEROSENE BY STATE AND LOCAL GOVERNMENTS.—Section
6427(l)(5)(C) (relating to nontaxable uses of diesel fuel, ker-
osene, and aviation fuel), as amended by this Act, is amend-
ed by adding at the end the following new sentence: ‘‘For
purposes of this subparagraph, if the sale of diesel fuel or
kerosene is made by means of a credit card, the person ex-
tending the credit to the ultimate purchaser shall be deemed
to be the ultimate vendor.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect on October 1, 2004.
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SEC. 889. TWO-PARTY EXCHANGES.
(a) IN GENERAL.—Subpart C of part III of subchapter
A of chapter 32, as amended by this Act, is amended by
adding at the end the following new section:
‘‘SEC. 4106. TWO-PARTY EXCHANGES.
‘‘(a) IN GENERAL.—In a two-party exchange, the de-
livering person shall not be liable for the tax imposed under
of section 4081(a)(1)(A)(ii).
‘‘(b) TWO-PARTY EXCHANGE.—The term ‘two-party
exchange’ means a transaction, other than a sale, in which
taxable fuel is transferred from a delivering person reg-
istered under section 4101 as a taxable fuel registrant to
a receiving person who is so registered where all of the fol-
lowing occur:
‘‘(1) The transaction includes a transfer from the
delivering person, who holds the inventory position
for taxable fuel in the terminal as reflected in the
records of the terminal operator.
‘‘(2) The exchange transaction occurs before or
contemporaneous with completion of removal across
the rack from the terminal by the receiving person.
‘‘(3) The terminal operator in its books and
records treats the receiving person as the person that
removes the product across the terminal rack for pur-
poses of reporting the transaction to the Secretary.
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‘‘(4) The transaction is the subject of a written
contract.’’.
(b) CONFORMING AMENDMENT.—The table of sections
for subpart C of part III of subchapter A of chapter 32,
as amended by of this Act, is amended by adding after the
last item the following new item:
‘‘Sec. 4106. Two-party exchanges.’’.
(c) EFFECTIVE DATE.—The amendment made by this
section shall take effect on the date of the enactment of this
Act.
SEC. 890. MODIFICATIONS OF TAX ON USE OF CERTAIN VE-
HICLES.
(a) NO PRORATION OF TAX UNLESS VEHICLE IS DE-
STROYED OR STOLEN.—
(1) IN GENERAL.—Section 4481(c) (relating to
proration of tax) is amended to read as follows:
‘‘(c) PRORATION OF TAX WHERE VEHICLE SOLD, DE-
STROYED, OR STOLEN.—
‘‘(1) IN GENERAL.—If in any taxable period a
highway motor vehicle is sold, destroyed, or stolen be-
fore the first day of the last month in such period and
not subsequently used during such taxable period, the
tax shall be reckoned proportionately from the first
day of the month in such period in which the first use
of such highway motor vehicle occurs to and including
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the last day of the month in which such highway
motor vehicle was sold, destroyed, or stolen.
‘‘(2) DESTROYED.—For purposes of paragraph
(1), a highway motor vehicle is destroyed if such vehi-
cle is damaged by reason of an accident or other cas-
ualty to such an extent that it is not economic to re-
build.’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 6156 (relating to installment
payment of tax on use of highway motor vehi-
cles) is repealed.
(B) The table of sections for subchapter A of
chapter 62 is amended by striking the item relat-
ing to section 6156.
(b) DISPLAY OF TAX CERTIFICATE.—Paragraph (2) of
section 4481(d) (relating to one tax liability for period) is
amended to read as follows:
‘‘(2) DISPLAY OF TAX CERTIFICATE.—Under reg-
ulations by the Secretary, every taxpayer which pays
the tax imposed under this section with respect to a
highway motor vehicle shall, not later than 1 month
after the due date of the return of tax with respect to
each taxable period, receive and display on such vehi-
cle an electronic identification device prescribed by
the Secretary.’’.
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(c) ELECTRONIC FILING.—Section 4481, is amended
by redesignating subsection (e) as subsection (f) and by in-
serting after subsection (d) the following new subsection:
‘‘(e) ELECTRONIC FILING.—Any taxpayer who files a
return under this section with respect to 25 or more vehicles
for any taxable period shall file such return electronically.’’.
(d) REPEAL
OF
REDUCTION
IN
TAX
FOR
CERTAIN
TRUCKS.—Section 4483 of the Internal Revenue Code of
1986 is amended by striking subsection (f).
(e) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall
apply to taxable periods beginning after the date of
the enactment of this Act.
(2) REGULATIONS REGARDING DISPLAY OF TAX
CERTIFICATE.—The Secretary of the Treasury shall
issue regulations required under section 4481(d)(2) of
the Internal Revenue Code of 1986 (as added by sub-
section (b)) not later than October 1, 2005.
SEC. 891. DEDICATION OF REVENUES FROM CERTAIN PEN-
ALTIES TO THE HIGHWAY TRUST FUND.
(a) IN GENERAL.—Subsection (b) of section 9503 (re-
lating to transfer to Highway Trust Fund of amounts
equivalent to certain taxes), is amended by redesignating
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paragraph (5) as paragraph (6) and inserting after para-
graph (4) the following new paragraph:
‘‘(5) CERTAIN PENALTIES.—There are hereby ap-
propriated to the Highway Trust Fund amounts
equivalent to the penalties assessed under sections
6715, 6715A, 6717, 6718, 6719, 6720, 6725, 7232,
and 7272 (but only with regard to penalties under
such section related to failure to register under section
4101).’’.
(b) CONFORMING AMENDMENTS.—
(1) The heading of subsection (b) of section 9503
is amended by inserting ‘‘AND PENALTIES’’ after
‘‘TAXES’’.
(2) The heading of paragraph (1) of section
9503(b) is amended by striking ‘‘IN GENERAL’’ and
inserting ‘‘CERTAIN TAXES’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to penalties assessed after October 1,
2004.
SEC. 892. NONAPPLICATION OF EXPORT EXEMPTION TO DE-
LIVERY OF FUEL TO MOTOR VEHICLES RE-
MOVED FROM UNITED STATES.
(a) IN GENERAL.—Section 4221(d)(2) (defining ex-
port) is amended by adding at the end the following new
sentence: ‘‘Such term does not include the delivery of a tax-
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able fuel (as defined in section 4083(a)(1)) into a fuel tank
of a motor vehicle which is shipped or driven out of the
United States.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 4041(g) (relating to other exemp-
tions) is amended by adding at the end the following
new sentence: ‘‘Paragraph (3) shall not apply to the
sale for delivery of a liquid into a fuel tank of a
motor vehicle which is shipped or driven out of the
United States.’’.
(2) Clause (iv) of section 4081(a)(1)(A) (relating
to tax on removal, entry, or sale) is amended by in-
serting ‘‘or at a duty-free sales enterprise (as defined
in section 555(b)(8) of the Tariff Act of 1930)’’ after
‘‘section 4101’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to sales or deliveries made after the date
of the enactment of this Act.
PART VII—TOTAL ACCOUNTABILITY
SEC. 893. 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
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(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 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
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
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subsections (c) and (d) (as redesignated by this Act)
as subsections (d) and (e), respectively, and by insert-
ing after subsection (b) the following new section:
‘‘(c) REPORTABLE
LIQUID.—For purposes of this
subpart—
‘‘(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-
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-
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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 this
Act, is amended by inserting ‘‘or a reportable
liquid’’ after ‘‘taxable fuel’’.
(E) Section 4101(a)(3), as added and redes-
ignated by 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.
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(G)(i) Section 6718, as added by 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 this Act, is amended by
inserting ‘‘or reportable liquids’’ after ‘‘taxable
fuels’’.
(H) Section 6427(h) is amended to read as
follows:
‘‘(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
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‘‘(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 liquid.’’.
(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 this Act, is amended by inserting
‘‘and reportable liquids (as defined in section
4083(c)(1) of such Code)’’ after ‘‘Internal Rev-
enue 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.’’.
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(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. 894. 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. Not earlier than January 1, 2005, such fil-
ings shall be in electronic form as prescribed by the Sec-
retary.
‘‘(b) INFORMATION INCLUDED WITH RETURN.—The
Secretary shall require any person filing a return under
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’’.
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(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to fuel sold or used after September 30,
2004.
SEC. 895. 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. Any person who is required
to report under this subsection and who has 25 or more
reportable transactions in a month shall file such report
in electronic format.’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply on October 1, 2004.
Subtitle I—Mobile Machinery
SEC. 896. TREATMENT OF MOBILE MACHINERY.
(a) TREATMENT OF MOBILE MACHINERY AS HIGHWAY
VEHICLE.—
(1) IN GENERAL.—Section 7701(a) (relating to
definitions) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(48) TREATMENT
OF
MOBILE
MACHINERY
AS
HIGHWAY VEHICLE.—
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‘‘(A) IN GENERAL.—A vehicle described in
subparagraph (B) shall be treated as a highway
vehicle.
‘‘(B) MOBILE MACHINERY.—A vehicle is de-
scribed in this subparagraph if such vehicle con-
sists of a chassis—
‘‘(i) to which there has been perma-
nently mounted (by welding, bolting, riv-
eting, or other means) machinery or equip-
ment to perform a construction, manufac-
turing, processing, farming, mining, drill-
ing, timbering, or similar operation if the
operation of the machinery or equipment is
unrelated to transportation on or off the
public highways,
‘‘(ii) which has been specially designed
to serve only as a mobile carriage and
mount (and a power source, where applica-
ble) for the particular machinery or equip-
ment involved, whether or not such machin-
ery or equipment is in operation, and
‘‘(iii) which, by reason of such special
design, could not, without substantial struc-
tural modification, be used as a component
of a vehicle designed to perform a function
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of transporting any load other than that
particular machinery or equipment or simi-
lar 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) ELIGIBILITY FOR REFUND IN CASE OF LIMITED
USE OF VEHICLE ON HIGHWAYS.—
(1) RETAIL SALES AND TIRE TAXES.—
(A) IN GENERAL.—Section 6416(b) (relat-
ing to special cases in which tax payments con-
sidered overpayments) is amended by adding at
the end the following new paragraph:
‘‘(7) MOBILE MACHINERY.—
‘‘(A) IN GENERAL.—If the tax imposed by
section 4051 or 4071 has been paid with respect
to 
any 
vehicle 
described 
in 
section
7701(a)(48)(B) which meets the use-based test for
each of the first 2 12-month periods after such
payment, 50 percent of such tax shall be consid-
ered an overpayment for each such period.
‘‘(B) USE-BASED
TEST.—For purposes of
subparagraph (A), the use-based test is met if the
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use of the vehicle on public highways was less
than 5,000 miles during any 12-month period.
‘‘(C) SPECIAL RULE FOR USE BY CERTAIN
TAX-EXEMPT ORGANIZATIONS.—For purposes of
subparagraph (A), the use-based test shall be de-
termined without regard to any use in a vehicle
by an organization which is described in section
501(c) and exempt from tax under section
501(a).’’.
(B) EFFECTIVE
DATE.—The amendment
made by this paragraph shall take effect on the
day after the date of the enactment of this Act.
(2) FUEL TAXES.—
(A) IN GENERAL.—Section 6421(e)(2) (de-
fining off-highway business use) is amended by
adding at the end the following new subpara-
graph:
‘‘(C) USES IN MOBILE MACHINERY.—
‘‘(i) IN GENERAL.—The term ‘off-high-
way business use’ shall include any use in
a 
vehicle 
described 
in 
section
7701(a)(48)(B) which meets the use-based
test.
‘‘(ii) USE-BASED TEST.—For purposes
of clause (i), the use-based test is met if the
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use of the vehicle on public highways was
less than 5,000 miles during the taxpayer’s
taxable year.
‘‘(iii) SPECIAL RULE FOR USE BY CER-
TAIN
TAX-EXEMPT
ORGANIZATIONS.—For
purposes of clause (i), the use-based test
shall be determined without regard to any
use in a vehicle by an organization which
is described in section 501(c) and exempt
from tax under section 501(a).’’.
(B) ANNUAL REFUND OF TAX PAID.—Sec-
tion 6427(i)(2) (relating to exceptions) is amend-
ed by adding at the end the following new sub-
paragraph:
‘‘(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).’’.
(C) EFFECTIVE
DATE.—The amendments
made by this paragraph shall apply to taxable
years beginning after the date of the enactment
of this Act.
(3) CONFORMING AMENDMENT FOR TAX-EXEMPT
USERS WITH RESPECT TO USE TAX.—
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(A) IN GENERAL.—Section 4483(d)(1) (re-
lating to suspension of tax) is amended by add-
ing at the end the following new subparagraph:
‘‘(C) SPECIAL RULE FOR USE BY CERTAIN
TAX-EXEMPT
ORGANIZATIONS.—Subparagraph
(A) shall be determined without regard to any
use in a vehicle by an organization which is de-
scribed in section 501(c) and exempt from tax
under section 501(a).’’.
(B) EFFECTIVE
DATE.—The amendment
made by this paragraph shall take effect on the
day after the date of the enactment of this Act.
Subtitle J—Additional Provisions
SEC. 897. STUDY OF EFFECTIVENESS OF CERTAIN PROVI-
SIONS BY GAO.
(a) STUDY.—The Comptroller General of the United
States shall undertake an ongoing analysis of—
(1) the effectiveness of the alternative motor vehi-
cles and fuel incentives provisions under subtitle B
and the conservation and energy efficiency provisions
under subtitle C, and
(2) the recipients of the tax benefits contained in
such provisions, including an identification of such
recipients by income and other appropriate measure-
ments.
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Such analysis shall quantify the effectiveness of such provi-
sions by examining and comparing the Federal Govern-
ment’s forgone revenue to the aggregate amount of energy
actually conserved and tangible environmental benefits
gained as a result of such provisions.
(b) REPORTS.—The Comptroller General of the United
States shall report the analysis required under subsection
(a) to Congress not later than December 31, 2004, and an-
nually thereafter.
SEC. 898. REPEAL OF 4.3-CENT MOTOR FUEL EXCISE TAXES
ON 
RAILROADS 
AND 
INLAND 
WATERWAY
TRANSPORTATION WHICH REMAIN IN GEN-
ERAL FUND.
(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)
is amended by striking clause (ii) and by redes-
ignating 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.
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(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:
‘‘(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) Paragraph (3) of section 4083(a) is
amended by striking ‘‘or a diesel-powered train’’.
(F) Paragraph (3) of section 6421(f) is
amended to read as follows:
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‘‘(3) GASOLINE USED IN TRAINS.—In the case of
gasoline used as a fuel in a train, this section shall
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).
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(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect on October 1, 2004.
SEC. 899. DISTRIBUTIONS FROM PUBLICLY TRADED PART-
NERSHIPS TREATED AS QUALIFYING INCOME
OF REGULATED INVESTMENT COMPANIES.
(a) IN GENERAL.—Paragraph (2) of section 851(b)
(defining regulated investment company) is amended to
read as follows:
‘‘(2) at least 90 percent of its gross income is de-
rived from—
‘‘(A) dividends, interest, payments with re-
spect to securities loans (as defined in section
512(a)(5)), and gains from the sale or other dis-
position of stock or securities (as defined in sec-
tion 2(a)(36) of the Investment Company Act of
1940, as amended) or foreign currencies, or other
income (including but not limited to gains from
options, futures or forward contracts) derived
with respect to its business of investing in such
stock, securities, or currencies, and
‘‘(B) distributions or other income derived
from an interest in a qualified publicly traded
partnership (as defined in subsection (h)); and’’
(b) SOURCE FLOW-THROUGH RULE NOT TO APPLY.—
The last sentence of section 851(b) is amended by inserting
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‘‘(other than a qualified publicly traded partnership as de-
fined in subsection (h))’’ after ‘‘derived from a partner-
ship’’.
(c) LIMITATION ON OWNERSHIP.—Subsection (c) of
section 851 is amended by redesignating paragraph (5) as
paragraph (6) and inserting after paragraph (4) the fol-
lowing new paragraph:
‘‘(5) The term ‘outstanding voting securities of
such issuer’ shall include the equity securities of a
qualified publicly traded partnership (as defined in
subsection (h)).’’.
(d) DEFINITION
OF QUALIFIED PUBLICLY TRADED
PARTNERSHIP.—Section 851 is amended by adding at the
end the following new subsection:
‘‘(h) QUALIFIED PUBLICLY TRADED PARTNERSHIP.—
For purposes of this section, the term ‘qualified publicly
traded partnership’ means a publicly traded partnership
described in section 7704(b) other than a partnership which
would satisfy the gross income requirements of section
7704(c)(2) if qualifying income included only income de-
scribed in subsection (b)(2)(A).’’.
(e) DEFINITION
OF QUALIFYING INCOME.—Section
7704(d)(4) is amended by striking ‘‘section 851(b)(2)’’ and
inserting ‘‘section 851(b)(2)(A)’’.
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(f) LIMITATION ON COMPOSITION OF ASSETS.—Sub-
paragraph (B) of section 851(b)(3) is amended to read as
follows:
‘‘(B) not more than 25 percent of the value
of its total assets is invested in—
‘‘(i) the securities (other than Govern-
ment securities or the securities of other reg-
ulated investment companies) of any one
issuer,
‘‘(ii) the securities (other than the secu-
rities of other regulated investment compa-
nies) of two or more issuers which the tax-
payer controls and which are determined,
under regulations prescribed by the Sec-
retary, to be engaged in the same or similar
trades or businesses or related trades or
businesses, or
‘‘(iii) the securities of one or more
qualified publicly traded partnerships (as
defined in subsection (h)).’’.
(g) APPLICATION OF SPECIAL PASSIVE ACTIVITY RULE
TO REGULATED INVESTMENT COMPANIES.—Subsection (k)
of section 469 (relating to separate application of section
in case of publicly traded partnerships) is amended by add-
ing at the end the following new paragraph:
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‘‘(4) APPLICATION TO REGULATED INVESTMENT
COMPANIES.—For purposes of this section, a regulated
investment company (as defined in section 851) hold-
ing an interest in a qualified publicly traded partner-
ship (as defined in section 851(h)) shall be treated as
a taxpayer described in subsection (a)(2) with respect
to items attributable to such interest.’’.
(h) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after the date
of the enactment of this Act.
SEC. 899A. CERTAIN BUSINESS RELATED CREDITS AL-
LOWED AGAINST REGULAR AND MINIMUM
TAX.
(a) IN GENERAL.—Subsection (c) of section 38 (relat-
ing to limitation based on amount of tax) is amended by
redesignating paragraph (4) as paragraph (5) and by in-
serting after paragraph (3) the following new paragraph:
‘‘(4) SPECIAL RULES FOR SPECIFIED CREDITS.—
‘‘(A) IN GENERAL.—In the case of specified
credits—
‘‘(i) this section and section 39 shall be
applied separately with respect to such
credits, and
‘‘(ii) in applying paragraph (1) to
such credits—
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‘‘(I) the tentative minimum tax
shall be treated as being zero, and
‘‘(II) the limitation under para-
graph (1) (as modified by subclause
(I)) shall be reduced by the credit al-
lowed under subsection (a) for the tax-
able year (other than the specified
credits).
‘‘(B) SPECIFIED CREDITS.—For purposes of
this subsection, the term ‘specified credits’
includes—
‘‘(i) for taxable years beginning after
December 31, 2004, the credit determined
under section 40, and
‘‘(ii) the credit determined under sec-
tion 45 to the extent that such credit is at-
tributable to electricity produced—
‘‘(I) at a facility which is origi-
nally placed in service after the date of
the enactment of this paragraph, and
‘‘(II) during the 4-year period be-
ginning on the date that such facility
was originally placed in service.’’.
(b) 
CONFORMING
AMENDMENTS.—Paragraph
(2)(A)(ii)(II) and (3)(A)(ii)(II) of section 38(c) are each
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amended by inserting ‘‘or the specified credits’’ after ‘‘em-
ployee credit’’.
(c) EFFECTIVE DATE.—Except as otherwise provided,
the amendments made by this section shall apply to taxable
years ending after the date of the enactment of this Act.
SEC. 899B. CREDIT FOR QUALIFYING POLLUTION CONTROL
EQUIPMENT.
(a) ALLOWANCE OF QUALIFYING POLLUTION CONTROL
EQUIPMENT CREDIT.—Section 46 (relating to amount of
credit), as amended by this Act, 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 adding at the end the following new paragraph:
‘‘(4) the qualifying pollution control equipment
credit.’’.
(b) AMOUNT
OF QUALIFYING POLLUTION CONTROL
EQUIPMENT CREDIT.—Subpart E of part IV of subchapter
A of chapter 1 (relating to rules for computing investment
credit), as amended by this Act, is amended by inserting
after section 48A the following new section:
‘‘SEC. 48B. QUALIFYING POLLUTION CONTROL EQUIPMENT
CREDIT.
‘‘(a) IN GENERAL.—For purposes of section 46, the
qualifying pollution control equipment credit for any tax-
able year is an amount equal to 15 percent of the basis
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of the qualifying pollution control equipment placed in
service at a qualifying facility during such taxable year.
‘‘(b) 
QUALIFYING
POLLUTION
CONTROL
EQUIP-
MENT.—For purposes of this section, the term ‘qualifying
pollution control equipment’ means any technology in-
stalled in or on a qualifying facility to reduce air emissions
of any pollutant regulated by the Environmental Protection
Agency under the Clean Air Act, including thermal
oxidizers, regenerative thermal oxidizers, scrubber systems,
evaporative control systems, vapor recovery systems, flair
systems, bag houses, cyclones, continuous emissions moni-
toring systems, and low nitric oxide burners.
‘‘(c) QUALIFYING FACILITY.—For purposes of this sec-
tion, the term ‘qualifying facility’ means any facility which
produces not less than 1,000,000 gallons of ethanol during
the taxable year.
‘‘(d) SPECIAL RULE FOR CERTAIN SUBSIDIZED PROP-
ERTY.—Rules similar to section 48(a)(4) shall apply for
purposes of this section.
‘‘(e) CERTAIN QUALIFIED PROGRESS EXPENDITURES
RULES MADE APPLICABLE.—Rules similar to the rules of
subsections (c)(4) and (d) of section 46 (as in effect on the
day before the enactment of the Revenue Reconciliation Act
of 1990) shall apply for purposes of this subsection.’’.
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(c) RECAPTURE OF CREDIT WHERE EMISSIONS RE-
DUCTION OFFSET IS SOLD.—Paragraph (1) of section 50(a)
is amended by redesignating subparagraph (B) as subpara-
graph (C) and by inserting after subparagraph (A) the fol-
lowing new subparagraph:
‘‘(B) SPECIAL RULE FOR QUALIFYING POL-
LUTION CONTROL EQUIPMENT.—For purposes of
subparagraph (A), any investment property
which is qualifying pollution control equipment
(as defined in section 48B(b)) shall cease to be
investment credit property with respect to a tax-
payer if such taxpayer receives a payment in ex-
change for a credit for emission reductions at-
tributable to such qualifying pollution control
equipment for purposes of an offset requirement
under part D of title I of the Clean Air Act.’’.
(d) SPECIAL RULE FOR BASIS REDUCTION; RECAP-
TURE OF CREDIT.—Paragraph (3) of section 50(c) (relating
to basis adjustment to investment credit property), as
amended by this Act, is amended by inserting ‘‘or quali-
fying pollution control equipment credit’’ after ‘‘energy
credit’’.
(e) EFFECTIVE DATE.—The amendments made by this
section shall apply to property placed in service after De-
cember 31, 2003, in taxable years ending after such date,
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under rules similar to the rules of section 48(m) of the In-
ternal Revenue Code of 1986 (as in effect on the day before
the date of the enactment of the Revenue Reconciliation Act
of 1990).
SEC. 899C. ELECTRIC TRANSMISSION PROPERTY TREATED
AS 15-YEAR PROPERTY.
(a) IN
GENERAL.—Subparagraph (E) of section
168(e)(3) (relating to classification of certain property), as
amended by this Act, is amended by striking ‘‘and’’ at the
end of clause (iii), by striking the period at the end of clause
(iv) and by inserting ‘‘, and’’, and by adding at the end
the following new clause:
‘‘(v) any section 1245 property (as de-
fined in section 1245(a)(3)) used in the
transmission at 69 or more kilovolts of elec-
tricity for sale the original use of which
commences with the taxpayer after the date
of the enactment of this clause.’’.
(b) ALTERNATIVE SYSTEM.—The table contained in
section 168(g)(3)(B) is amended by inserting after the item
relating to subparagraph (E)(iv) the following:
‘‘(E)(v) ...............................................................................................................
30’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to property placed in service after the
date of the enactment of this Act, and prior to July 1, 2006.
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TITLE IX—HOMESTEAD
PRESERVATION ACT
SEC. 901. SHORT TITLE.
This title may be cited as the ‘‘Homestead Preservation
Act’’.
SEC. 902. MORTGAGE PAYMENT ASSISTANCE.
(a) ESTABLISHMENT OF PROGRAM.—The Secretary of
Housing and Urban Development (referred to in this section
as the ‘‘Secretary’’) shall establish a program under which
the Secretary shall award low-interest loans to eligible indi-
viduals to enable such individuals to continue to make
mortgage payments with respect to the primary residences
of such individuals.
(b) ELIGIBILITY.—To be eligible to receive a loan
under the program established under subsection (a), an in-
dividual shall be—
(1) an individual that is a worker adversely af-
fected by international economic activity, as deter-
mined by the Secretary;
(2) a borrower under a loan which requires the
individual to make monthly mortgage payments with
respect to the primary place of residence of the indi-
vidual; and
(3) enrolled in a training or assistance program.
(c) LOAN REQUIREMENTS.—
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(1) IN GENERAL.—A loan provided to an eligible
individual under this section shall—
(A) be for a period of not to exceed 12
months;
(B) be for an amount that does not exceed
the sum of—
(i) the amount of the monthly mort-
gage payment owed by the individual; and
(ii) the number of months for which
the loan is provided;
(C) have an applicable rate of interest that
equals 4 percent;
(D) require repayment as provided for in
subsection (d); and
(E) be subject to such other terms and con-
ditions as the Secretary determines appropriate.
(2) ACCOUNT.—A loan awarded to an individual
under this section shall be deposited into an account
from which a monthly mortgage payment will be
made in accordance with the terms and conditions of
such loan.
(d) REPAYMENT.—
(1) IN
GENERAL.—An individual to which a
loan has been awarded under this section shall be re-
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quired to begin making repayments on the loan on the
earlier of—
(A) the date on which the individual has
been employed on a full-time basis for 6 consecu-
tive months; or
(B) the date that is 1 year after the date on
which the loan has been approved under this sec-
tion.
(2) REPAYMENT PERIOD AND AMOUNT.—
(A) REPAYMENT PERIOD.—A loan awarded
under this section shall be repaid on a monthly
basis over the 5-year period beginning on the
date determined under paragraph (1).
(B) AMOUNT.—The amount of the monthly
payment described in subparagraph (A) shall be
determined by dividing the total amount pro-
vided under the loan (plus interest) by 60.
(C) RULE OF CONSTRUCTION.—Nothing in
this paragraph shall be construed to prohibit an
individual from—
(i) paying off a loan awarded under
this section in less than 5 years; or
(ii) from paying a monthly amount
under such loan in excess of the monthly
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amount determined under subparagraph
(B) with respect to the loan.
(e) REGULATIONS.—Not later than 6 weeks after the
date of enactment of this section, the Secretary shall pro-
mulgate regulations necessary to carry out this section, in-
cluding regulations that permit an individual to certify
that the individual is an eligible individual under sub-
section (b).
(f) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated to carry out this section,
$10,000,000 for each of fiscal years 2005 through 2009.
TITLE X—OFFICE OF FEDERAL
PROCUREMENT POLICY ACT
IMPROVEMENTS
SEC. 1001. REPORT ON ACQUISITIONS OF GOODS FROM
FOREIGN SOURCES.
(a) REPORT.—The Office of Federal Procurement Pol-
icy Act (41 U.S.C. 403 et seq.), as amended by this Act,
is further amended by adding at the end the following new
section:
‘‘SEC. 43. REPORT ON ACQUISITIONS OF GOODS FROM FOR-
EIGN SOURCES.
‘‘(a) Not later than 60 days after the end of each fiscal
year, the head of each executive agency shall submit to Con-
gress a report on the acquisitions that were made of articles,
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materials, or supplies by such executive agency in that fis-
cal year from entities that manufacture the articles, mate-
rials, or supplies outside the United States.
‘‘(b) The report for a fiscal year under subsection (a)
shall separately indicate the following information:
‘‘(1) The dollar value of any articles, materials,
or supplies that were manufactured outside the
United States.
‘‘(2) An itemized list of all waivers granted with
respect to such articles, materials, or supplies under
the Buy American Act (41 U.S.C. 10a et seq.).
‘‘(3) A summary of—
‘‘(A) the total procurement funds expended
on articles, materials, and supplies manufac-
tured inside the United States; and
‘‘(B) the total procurement funds expended
on articles, materials, and supplies manufac-
tured outside the United States.
‘‘(c) The head of each executive agency submitting a
report under subsection (a) shall make the report publicly
available by posting on an Internet website.
‘‘(d) Subsection (a) shall not apply to any procure-
ment for national security purposes entered into by—
‘‘(1) the Department of Defense or any agency or
entity thereof;
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‘‘(2) the Department of the Army, the Depart-
ment of the Navy, the Department of the Air Force,
or any agency or entity of any of the military depart-
ments;
‘‘(3) the Department of Homeland Security;
‘‘(4) the Department of Energy or any agency or
entity thereof, with respect to the national security
programs of that Department; or
‘‘(5) any element of the intelligence commu-
nity.’’.
(b) CLERICAL AMENDMENT.—The table of contents in
section 1(b) of the Office of Federal Procurement Policy Act
is amended by adding at the end the following new item:
‘‘Sec. 43. Report on acquisitions of goods from foreign sources.’’.
(c) COMMERCE DEPARTMENT REPORT.—Not later
than 60 days after the end of each fiscal year ending after
the date of the enactment of this Act, the Secretary of Com-
merce shall submit to Congress and make publicly available
by posting on an Internet website a report on the acquisi-
tions by foreign governments of articles, materials, or sup-
plies that were manufactured or extracted in the United
States in that fiscal year. Such report shall indicate the
dollar value of such articles, materials, or supplies.
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TITLE XI—PROVISIONS
RELATING TO TOBACCO
Subtitle A—Family Smoking
Prevention and Tobacco Control
SEC. 1101. SHORT TITLE.
This subtitle may be cited as the ‘‘Family Smoking
Prevention and Tobacco Control Act’’.
SEC. 1102. FINDINGS.
The Congress finds the following:
(1) The use of tobacco products by the Nation’s
children is a pediatric disease of considerable propor-
tions that results in new generations of tobacco-de-
pendent children and adults.
(2) A consensus exists within the scientific and
medical communities that tobacco products are inher-
ently dangerous and cause cancer, heart disease, and
other serious adverse health effects.
(3) Nicotine is an addictive drug.
(4) Virtually all new users of tobacco products
are under the minimum legal age to purchase such
products.
(5) Tobacco advertising and marketing con-
tribute significantly to the use of nicotine-containing
tobacco products by adolescents.
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(6) Because past efforts to restrict advertising
and marketing of tobacco products have failed ade-
quately to curb tobacco use by adolescents, comprehen-
sive restrictions on the sale, promotion, and distribu-
tion of such products are needed.
(7) Federal and State governments have lacked
the legal and regulatory authority and resources they
need to address comprehensively the public health and
societal problems caused by the use of tobacco prod-
ucts.
(8) Federal and State public health officials, the
public health community, and the public at large rec-
ognize that the tobacco industry should be subject to
ongoing oversight.
(9) Under article I, section 8 of the Constitution,
the Congress is vested with the responsibility for regu-
lating interstate commerce and commerce with Indian
tribes.
(10) The sale, distribution, marketing, adver-
tising, and use of tobacco products are activities in
and substantially affecting interstate commerce be-
cause they are sold, marketed, advertised, and distrib-
uted in interstate commerce on a nationwide basis,
and have a substantial effect on the Nation’s economy.
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(11) The sale, distribution, marketing, adver-
tising, and use of such products substantially affect
interstate commerce through the health care and other
costs attributable to the use of tobacco products.
(12) It is in the public interest for Congress to
enact legislation that provides the Food and Drug Ad-
ministration with the authority to regulate tobacco
products and the advertising and promotion of such
products. The benefits to the American people from
enacting such legislation would be significant in
human and economic terms.
(13) Tobacco use is the foremost preventable
cause of premature death in America. It causes over
400,000 deaths in the United States each year and
approximately 8,600,000 Americans have chronic ill-
nesses related to smoking.
(14) Reducing the use of tobacco by minors by
50 percent would prevent well over 6,500,000 of to-
day’s children from becoming regular, daily smokers,
saving over 2,000,000 of them from premature death
due to tobacco induced disease. Such a reduction in
youth smoking would also result in approximately
$75,000,000,000 in savings attributable to reduced
health care costs.
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(15) Advertising, marketing, and promotion of
tobacco products have been especially directed to at-
tract young persons to use tobacco products and these
efforts have resulted in increased use of such products
by youth. Past efforts to oversee these activities have
not been successful in adequately preventing such in-
creased use.
(16) In 2001, the tobacco industry spent more
than $11,000,000,000 to attract new users, retain cur-
rent users, increase current consumption, and gen-
erate favorable long-term attitudes toward smoking
and tobacco use.
(17) 
Tobacco 
product 
advertising 
often
misleadingly portrays the use of tobacco as socially
acceptable and healthful to minors.
(18) Tobacco product advertising is regularly
seen by persons under the age of 18, and persons
under the age of 18 are regularly exposed to tobacco
product promotional efforts.
(19) Through advertisements during and spon-
sorship of sporting events, tobacco has become strongly
associated with sports and has become portrayed as
an integral part of sports and the healthy lifestyle as-
sociated with rigorous sporting activity.