(4) TRANSFERS
ON
ACCOUNT
OF
AVIATION- 
GRADE KEROSENE NOT USED IN AVIATION.—Section 
9502(d) of such Code is amended by adding at the 
end the following new paragraph: 
‘‘(7) TRANSFERS FROM AIRPORT AND AIRWAY 
TRUST
FUND
ON
ACCOUNT
OF
AVIATION-GRADE 
KEROSENE NOT USED IN AVIATION.—The Secretary 
of the Treasury shall pay from time to time from the 
Airport and Airway Trust Fund into the Highway 
Trust Fund amounts as determined by the Secretary 
of the Treasury equivalent to amounts transferred to 
the Airport and Airway Trust Fund with respect to 
aviation-grade kerosene not used in aviation.’’. 
(5) EXPENDITURES FOR AIR TRAFFIC CONTROL 
MODERNIZATION.—Section 9502(d) of such Code, as 
amended by this Act, is amended by adding at the 
end the following new paragraph: 
‘‘(8) EXPENDITURES
FOR
AIR
TRAFFIC
CON-
TROL
MODERNIZATION.—The following amounts 
may be used only for making expenditures to carry 
out air traffic control modernization: 
‘‘(A) So much of the amounts appropriated 
under subsection (b)(1)(C) as the Secretary es-
timates are attributable to— 
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‘‘(i) 14.1 cents per gallon of the tax 
imposed at the rate specified in section 
4081(a)(2)(A)(iv) in the case of aviation- 
grade kerosene used other than in commer-
cial 
aviation 
(as 
defined 
in 
section 
4083(b)), and 
‘‘(ii) 4.8 cents per gallon of the tax 
imposed at the rate specified in section 
4081(a)(2)(A)(ii) in the case of aviation 
gasoline used other than in commercial 
aviation (as so defined). 
‘‘(B) Any amounts credited to the Airport 
and Airway Trust Fund under section 9602(b) 
with respect to amounts described in this para-
graph.’’. 
(g) EFFECTIVE DATE.— 
(1) MODIFICATIONS.—Except as provided in 
paragraph (2), the amendments made by this section 
shall apply to fuels removed, entered, or sold after 
September 30, 2007. 
(2) EXTENSIONS.—The amendments made by 
subsections (b) and (f)(1) shall take effect on the 
date of the enactment of this Act. 
(h) FLOOR STOCKS TAX.— 
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(1) IMPOSITION OF TAX.—In the case of avia-
tion fuel which is held on October 1, 2007, 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 In-
ternal 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 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 hold-
ing aviation fuel on October 1, 2007, shall be 
liable for such tax. 
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(B) TIME AND METHOD OF PAYMENT.— 
The tax imposed by paragraph (1) shall be paid 
on January 31, 2008, and in such manner as 
the Secretary of the Treasury shall prescribe. 
(3) TRANSFER
OF
FLOOR
STOCK
TAX
REVE-
NUES TO TRUST FUNDS.—For purposes of deter-
mining the amount transferred to the Airport and 
Airway Trust Fund, the tax imposed by this sub-
section shall be treated as imposed by the provision 
of section 4081 of the Internal Revenue Code of 
1986 which applies with respect to the aviation fuel 
involved. 
(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 Rev-
enue Code of 1986. 
(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). 
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(C) SECRETARY.—The term ‘‘Secretary’’ 
means the Secretary of the Treasury or the 
Secretary’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 al-
lowable under the Internal Revenue Code of 1986 
for such use. 
(6) EXCEPTION
FOR
CERTAIN
AMOUNTS
OF 
FUEL.— 
(A) IN
GENERAL.—No tax shall be im-
posed by paragraph (1) on any aviation fuel 
held on October 1, 2007, 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 person submits to the Secretary (at the 
time and in the manner required by the Sec-
retary) such information as the Secretary shall 
require for purposes of this subparagraph. 
(B) EXEMPT FUEL.—For purposes of sub-
paragraph (A), there shall not be taken into ac-
count any aviation fuel held by any person 
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which is exempt from the tax imposed by para-
graph (1) by reason of paragraph (6). 
(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 
meaning given to such term by sub-
section (a) of section 1563 of such 
Code; except that for such purposes 
the phrase ‘‘more than 50 percent’’ 
shall be substituted for the phrase ‘‘at 
least 80 percent’’ each place it ap-
pears in such subsection. 
(ii) 
NONINCORPORATED
PERSONS 
UNDER COMMON CONTROL.—Under regula-
tions prescribed by the Secretary, prin-
ciples similar to the principles of subpara-
graph (A) shall apply to a group of per-
sons under common control if 1 or more of 
such persons is not a corporation. 
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(7) OTHER LAWS APPLICABLE.—All provisions 
of law, including penalties, applicable with respect to 
the taxes imposed by section 4081 of such Code on 
the aviation fuel involved shall, insofar as applicable 
and not inconsistent with the provisions of this sub-
section, apply with respect to the floor stock taxes 
imposed by paragraph (1) to the same extent as if 
such taxes were imposed by such section. 
Æ 
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