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‘‘(C) section 4081 with respect to aviation 
gasoline and aviation-grade kerosene, and’’. 
(2) TRANSFERS ON ACCOUNT OF CERTAIN RE-
FUNDS.— 
(A) IN GENERAL.—Subsection (d) of section 
9502 is amended— 
(i) in paragraph (2) by striking 
‘‘(other than subsection (l)(4) thereof)’’, and 
(ii) in paragraph (3) by striking 
‘‘(other than payments made by reason of 
paragraph (4) of section 6427(l))’’. 
(B) CONFORMING AMENDMENTS.— 
(i) Section 9503(b)(4) is amended by 
striking ‘‘or’’ at the end of subparagraph 
(C), by striking the period at the end of sub-
paragraph (D) and inserting a comma, and 
by inserting after subparagraph (D) the fol-
lowing: 
‘‘(E) section 4081 to the extent attributable 
to the rate specified in clause (ii) or (iv) of sec-
tion 4081(a)(2)(A), or 
‘‘(F) section 4041(c).’’. 
(ii) Section 9503(c) is amended by 
striking paragraph (6). 
(iii) Section 9502(a) is amended—
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(I) by striking ‘‘appropriated, 
credited, or paid into’’ and inserting 
‘‘appropriated or credited to’’, and 
(II) 
by 
striking 
‘‘, 
section 
9503(c)(7),’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to fuels removed, entered, or sold after 
June 30, 2010. 
(f) FLOOR STOCKS TAX.— 
(1) IMPOSITION OF TAX.—In the case of aviation 
fuel which is held on July 1, 2010, by any person, 
there is hereby imposed a floor stocks tax on aviation 
fuel equal to— 
(A) the tax which would have been imposed 
before such date on such fuel had the amend-
ments made by this section been in effect at all 
times before such date, reduced by 
(B) the sum of— 
(i) the tax imposed before such date on 
such fuel under section 4081 of the Internal 
Revenue Code of 1986, as in effect on such 
date, and 
(ii) in the case of kerosene held exclu-
sively for such person’s own use, the amount 
which such person would (but for this
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clause) reasonably expect (as of such date) 
to be paid as a refund under section 6427(l) 
of such Code with respect to such kerosene. 
(2) LIABILITY FOR TAX AND METHOD OF PAY-
MENT.— 
(A) LIABILITY FOR TAX.—A person holding 
aviation fuel on July 1, 2010, shall be liable for 
such tax. 
(B) TIME AND METHOD OF PAYMENT.—The 
tax imposed by paragraph (1) shall be paid at 
such time and in such manner as the Secretary 
of the Treasury shall prescribe. 
(3) TRANSFER OF FLOOR STOCK TAX REVENUES 
TO TRUST FUNDS.—For purposes of determining the 
amount transferred to the Airport and Airway Trust 
Fund, the tax imposed by this subsection shall be 
treated as imposed by section 4081(a)(2)(A)(iv) of the 
Internal Revenue Code of 1986. 
(4) DEFINITIONS.—For purposes of this sub-
section— 
(A) AVIATION FUEL.—The term ‘‘aviation 
fuel’’ means aviation-grade kerosene and avia-
tion gasoline, as such terms are used within the 
meaning of section 4081 of the Internal Revenue 
Code of 1986.
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(B) HELD
BY
A
PERSON.—Aviation fuel 
shall be considered as held by a person if title 
thereto has passed to such person (whether or not 
delivery to the person has been made). 
(C) SECRETARY.—The term ‘‘Secretary’’ 
means the Secretary of the Treasury or the Sec-
retary’s delegate. 
(5) EXCEPTION
FOR
EXEMPT
USES.—The tax 
imposed by paragraph (1) shall not apply to any 
aviation fuel held by any person exclusively for any 
use to the extent a credit or refund of the tax is allow-
able under the Internal Revenue Code of 1986 for such 
use. 
(6) EXCEPTION
FOR
CERTAIN
AMOUNTS
OF 
FUEL.— 
(A) IN GENERAL.—No tax shall be imposed 
by paragraph (1) on any aviation fuel held on 
July 1, 2010, by any person if the aggregate 
amount of such aviation fuel held by such person 
on such date does not exceed 2,000 gallons. The 
preceding sentence shall apply only if such per-
son submits to the Secretary (at the time and in 
the manner required by the Secretary) such in-
formation as the Secretary shall require for pur-
poses of this subparagraph.
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(B) EXEMPT FUEL.—For purposes of sub-
paragraph (A), there shall not be taken into ac-
count any aviation fuel held by any person 
which is exempt from the tax imposed by para-
graph (1) by reason of paragraph (5). 
(C) CONTROLLED GROUPS.—For purposes of 
this subsection— 
(i) CORPORATIONS.— 
(I) IN
GENERAL.—All persons 
treated as a controlled group shall be 
treated as 1 person. 
(II) CONTROLLED
GROUP.—The 
term ‘‘controlled group’’ has the mean-
ing given to such term by subsection 
(a) of section 1563 of the Internal Rev-
enue Code of 1986; except that for such 
purposes the phrase ‘‘more than 50 
percent’’ shall be substituted for the 
phrase ‘‘at least 80 percent’’ each place 
it appears in such subsection. 
(ii) 
NONINCORPORATED
PERSONS 
UNDER COMMON CONTROL.—Under regula-
tions prescribed by the Secretary, principles 
similar to the principles of subparagraph 
(A) shall apply to a group of persons under
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common control if 1 or more of such persons 
is not a corporation. 
(7) OTHER LAWS APPLICABLE.—All provisions of 
law, including penalties, applicable with respect to 
the taxes imposed by section 4081 of the Internal Rev-
enue Code of 1986 on the aviation fuel involved shall, 
insofar as applicable and not inconsistent with the 
provisions of this subsection, apply with respect to the 
floor stock taxes imposed by paragraph (1) to the 
same extent as if such taxes were imposed by such sec-
tion. 
SEC. 804. AIR TRAFFIC CONTROL SYSTEM MODERNIZATION 
ACCOUNT. 
(a) IN GENERAL.—Section 9502 (relating to the Air-
port and Airway Trust Fund) is amended by adding at 
the end the following new subsection: 
‘‘(f) ESTABLISHMENT OF AIR TRAFFIC CONTROL SYS-
TEM MODERNIZATION ACCOUNT.— 
‘‘(1) CREATION
OF
ACCOUNT.—There is estab-
lished in the Airport and Airway Trust Fund a sepa-
rate account to be known as the ‘Air Traffic Control 
System Modernization Account’ consisting of such 
amounts as may be transferred or credited to the Air 
Traffic Control System Modernization Account as 
provided in this subsection or section 9602(b).
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‘‘(2) TRANSFERS TO AIR TRAFFIC CONTROL SYS-
TEM MODERNIZATION ACCOUNT.—On October 1, 2010, 
and annually thereafter the Secretary shall transfer 
$400,000,000 to the Air Traffic Control System Mod-
ernization Account from amounts appropriated to the 
Airport and Airway Trust Fund under subsection (b) 
which are attributable to taxes on aviation-grade ker-
osene. 
‘‘(3) EXPENDITURES FROM ACCOUNT.—Amounts 
in the Air Traffic Control System Modernization Ac-
count shall be available subject to appropriation for 
expenditures relating to the modernization of the air 
traffic control system (including facility and equip-
ment account expenditures).’’. 
(b) CONFORMING AMENDMENT.—Section 9502(d)(1) is 
amended by striking ‘‘Amounts’’ and inserting ‘‘Except as 
provided in subsection (f), amounts’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on the date of the enactment of this 
Act. 
SEC. 805. TREATMENT OF FRACTIONAL AIRCRAFT OWNER-
SHIP PROGRAMS. 
(a) FUEL SURTAX.—
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(1) IN GENERAL.—Subchapter B of chapter 31 is 
amended by adding at the end the following new sec-
tion: 
‘‘SEC. 4043. SURTAX ON FUEL USED IN AIRCRAFT PART OF 
A FRACTIONAL OWNERSHIP PROGRAM. 
‘‘(a) IN GENERAL.—There is hereby imposed a tax on 
any liquid used during any calendar quarter by any person 
as a fuel in an aircraft which is— 
‘‘(1) registered in the United States, and 
‘‘(2) part of a fractional ownership aircraft pro-
gram. 
‘‘(b) AMOUNT OF TAX.—The rate of tax imposed by 
subsection (a) is 14.1 cents per gallon. 
‘‘(c) FRACTIONAL OWNERSHIP AIRCRAFT PROGRAM.— 
For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘fractional owner-
ship aircraft program’ means a program under 
which— 
‘‘(A) a single fractional ownership program 
manager provides fractional ownership program 
management services on behalf of the fractional 
owners, 
‘‘(B) 2 or more airworthy aircraft are part 
of the program,
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‘‘(C) there are 1 or more fractional owners 
per program aircraft, with at least 1 program 
aircraft having more than 1 owner, 
‘‘(D) each fractional owner possesses at least 
a minimum fractional ownership interest in 1 or 
more program aircraft, 
‘‘(E) there exists a dry-lease exchange ar-
rangement among all of the fractional owners, 
and 
‘‘(F) there are multi-year program agree-
ments covering the fractional ownership, frac-
tional ownership program management services, 
and dry-lease aircraft exchange aspects of the 
program. 
‘‘(2) MINIMUM FRACTIONAL OWNERSHIP INTER-
EST.— 
‘‘(A) IN
GENERAL.—The term ‘minimum 
fractional ownership interest’ means, with re-
spect to each type of aircraft— 
‘‘(i) a fractional ownership interest 
equal to or greater than 1⁄16 of at least 1 
subsonic, fixed wing or powered lift pro-
gram aircraft, or
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‘‘(ii) a fractional ownership interest 
equal to or greater than 1⁄32 of a least 1 
rotorcraft program aircraft. 
‘‘(B) FRACTIONAL OWNERSHIP INTEREST.— 
The term ‘fractional ownership interest’ means— 
‘‘(i) the ownership of an interest in a 
program aircraft, 
‘‘(ii) the holding of a multi-year lease-
hold interest in a program aircraft, or 
‘‘(iii) the holding of a multi-year lease-
hold interest which is convertible into an 
ownership interest in a program aircraft. 
‘‘(3) DRY-LEASE EXCHANGE ARRANGEMENT.—A 
‘dry-lease aircraft exchange’ means an agreement, 
documented by the written program agreements, 
under which the program aircraft are available, on 
an as needed basis without crew, to each fractional 
owner. 
‘‘(d) TERMINATION.—This section shall not apply to 
liquids used as a fuel in an aircraft after September 30, 
2013.’’. 
(2) CONFORMING AMENDMENT.—Section 4082(e) 
is amended by inserting ‘‘(other than an aircraft de-
scribed in section 4043(a))’’ after ‘‘an aircraft’’.
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(3) TRANSFER OF REVENUES TO AIRPORT AND 
AIRWAY TRUST FUND.—Section 9502(b)(1) is amend-
ed by redesignating subparagraphs (B) and (C) as 
subparagraphs (C) and (D), respectively, and by in-
serting after subparagraph (A) the following new sub-
paragraph: 
‘‘(B) section 4043 (relating to surtax on fuel 
used in aircraft part of a fractional ownership 
program),’’. 
(4) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter B of chapter 31 is amended by 
adding at the end the following new item: 
‘‘Sec. 4043. Surtax on fuel used in aircraft part of a fractional ownership pro-
gram.’’. 
(b) FRACTIONAL OWNERSHIP PROGRAMS TREATED AS 
NON-COMMERCIAL AVIATION.—Subsection (b) of section 
4083 is amended by adding at the end the following new 
sentence: ‘‘For uses of aircraft before October 1, 2013, such 
term shall not include the use of any aircraft which is part 
of a fractional ownership aircraft program (as defined by 
section 4043(c)).’’. 
(c) EXEMPTION FROM TAX ON TRANSPORTATION OF 
PERSONS.—Section 4261, as amended by this Act, is 
amended by redesignating subsection (j) as subsection (k) 
and by inserting after subsection (i) the following new sub-
section:
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any time during which such aircraft is being operated on 
a flight the sole purpose of which is sightseeing. For pur-
poses of the preceding sentence, the term ‘maximum certifi-
cated takeoff weight’ means the maximum such weight con-
tained in the type certificate or airworthiness certificate.’’. 
(b) CONFORMING AMENDMENT.—The item relating to 
section 4281 in the table of sections for part III of sub-
chapter C of chapter 33 is amended by striking ‘‘on non-
established lines’’ and inserting ‘‘operated solely for sight-
seeing’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable transportation provided after 
June 30, 2010. 
SEC. 807. TRANSPARENCY IN PASSENGER TAX DISCLO-
SURES. 
(a) IN GENERAL.—Section 7275 (relating to penalty 
for offenses relating to certain airline tickets and adver-
tising) is amended— 
(1) by redesignating subsection (c) as subsection 
(d), 
(2) by striking ‘‘subsection (a) or (b)’’ in sub-
section (d), as so redesignated, and inserting ‘‘sub-
section (a), (b), or (c)’’, and 
(3) by inserting after subsection (b) the following 
new subsection:
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‘‘(c) NON-TAX CHARGES.— 
‘‘(1) IN GENERAL.—In the case of transportation 
by air for which disclosure on the ticket or adver-
tising for such transportation of the amounts paid for 
passenger taxes is required by subsection (a)(2) or 
(b)(1)(B), it shall be unlawful for the disclosure of the 
amount of such taxes on such ticket or advertising to 
include any amounts not attributable to the taxes im-
posed by subsection (a), (b), or (c) of section 4261. 
‘‘(2) INCLUSION
IN
TRANSPORTATION
COST.— 
Nothing in this subsection shall prohibit the inclusion 
of amounts not attributable to the taxes imposed by 
subsection (a), (b), or (c) of section 4261 in the disclo-
sure of the amount paid for transportation as re-
quired by subsection (a)(1) or (b)(1)(A), or in a sepa-
rate disclosure of amounts not attributable to such 
taxes.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable transportation provided after 
June 30, 2010. 
TITLE IX—BUDGETARY EFFECTS 
SEC. 901. BUDGETARY EFFECTS. 
The budgetary effects of this Act, for the purpose of 
complying with the Statutory Pay-As-You-Go-Act of 2010, 
shall be determined by reference to the latest statement titled
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‘‘Budgetary Effects of PAYGO Legislation’’ for this Act, 
submitted for printing in the Congressional Record by the 
Chairman of the Senate Budget Committee, provided that 
such statement has been submitted prior to the vote on pas-
sage. 
TITLE X—RESCISSION OF UN-
USED TRANSPORTATION EAR-
MARKS 
AND 
GENERAL 
RE-
PORTING REQUIREMENT 
SEC. 1001. DEFINITION. 
In this title, the term ‘‘earmark’’ means the following: 
(1) A congressionally directed spending item, as 
defined in Rule XLIV of the Standing Rules of the 
Senate. 
(2) A congressional earmark, as defined for pur-
poses of Rule XXI of the Rules of the House of Rep-
resentatives. 
SEC. 1002. RESCISSION. 
Any earmark of funds provided for the Department of 
Transportation with more than 90 percent of the appro-
priated amount remaining available for obligation at the 
end of the 9th fiscal year following the fiscal year in which 
the earmark was made available is rescinded effective at 
the end of that 9th fiscal year, except that the Secretary 
of Transportation may delay any such rescission if the Sec-
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retary determines that an additional obligation of the ear-
mark is likely to occur during the following 12-month pe-
riod. 
SEC. 1003. AGENCY WIDE IDENTIFICATION AND REPORTS. 
(a) AGENCY IDENTIFICATION.—Each Federal agency 
shall identify and report every project that is an earmark 
with an unobligated balance at the end of each fiscal year 
to the Director of OMB. 
(b) ANNUAL REPORT.—The Director of OMB shall sub-
mit to Congress and publically post on the website of OMB 
an annual report that includes— 
(1) a listing and accounting for earmarks with 
unobligated balances summarized by agency including 
the amount of the original earmark, amount of the 
unobligated balance, and the year when the funding 
expires, if applicable; 
(2) the number of rescissions resulting from this 
title and the annual savings resulting from this title 
for the previous fiscal year; and 
(3) a listing and accounting for earmarks pro-
vided for the Department of Transportation scheduled 
to be rescinded at the end of the current fiscal year. 
Amend the title so as to read: ‘‘An Act to modernize 
the air traffic control system, improve the safety, reli-
ability, and availability of transportation by air in the 
United States, provide for modernization of the air traffic
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control system, reauthorize the Federal Aviation Admin-
istration, and for other purposes.’’. 
Attest: 
Secretary.