Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Airport and Airway 
Trust Fund Financing Act of 2007’’. 
SEC. 2. EXTENSION AND MODIFICATION OF TAXES FUND-
ING AIRPORT AND AIRWAY TRUST FUND. 
(a) RATE OF TAX ON AVIATION-GRADE KEROSENE 
AND AVIATION GASOLINE.— 
(1) AVIATION-GRADE KEROSENE.—Subparagraph 
(A) of section 4081(a)(2) of the Internal Revenue 
Code of 1986 (relating to rates of tax) is amended by 
striking ‘‘and’’ at the end of clause (ii), by striking 
the period at the end of clause (iii) and inserting ‘‘, 
and’’, and by adding at the end the following new 
clause: 
‘‘(iv) in the case of aviation-grade ker-
osene, 35.9 cents per gallon.’’. 
(2) AVIATION GASOLINE.—Clause (ii) of section 
4081(a)(2)(A) of such Code is amended by striking 
‘‘19.3 cents’’ and inserting ‘‘24.1 cents’’. 
(3) FUEL REMOVED DIRECTLY INTO FUEL TANK 
OF AIRPLANE USED IN NONCOMMERCIAL AVIATION.— 
Subparagraph (C) of section 4081(a)(2) of such Code 
is amended to read as follows: 
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‘‘(C) TAXES
IMPOSED
ON
FUEL
USED
IN 
COMMERCIAL AVIATION.—In the case of aviation- 
grade kerosene which is removed from any refin-
ery or terminal directly into the fuel tank of an 
aircraft for use in commercial aviation by a per-
son registered for such use under section 4101, 
the rate of tax under subparagraph (A)(iv) shall 
be 4.3 cents per gallon.’’. 
(4) CONFORMING AMENDMENTS.— 
(A) Clause (iii) of section 4081(a)(2)(A) of 
such Code is amended by inserting ‘‘other than 
aviation-grade kerosene’’ after ‘‘kerosene’’. 
(B) The following provisions of such Code 
are each amended by striking ‘‘kerosene’’ and in-
serting ‘‘aviation-grade kerosene’’: 
(i) Section 4081(a)(3)(A)(ii). 
(ii) Section 4081(a)(3)(A)(iv). 
(iii) Section 4081(a)(3)(D). 
(C) Section 4081(a)(3)(D) of such Code is 
amended— 
(i) by striking ‘‘paragraph (2)(C)(i)’’ 
in clause (i) and inserting ‘‘paragraph 
(2)(C)’’, and 
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(ii) by striking ‘‘paragraph (2)(C)(ii)’’ 
in clause (ii) and inserting ‘‘paragraph 
(2)(A)(iv)’’. 
(D) Section 4081(a)(4) of such Code is 
amended in the heading by striking ‘‘KEROSENE’’ 
and inserting ‘‘AVIATION-GRADE KEROSENE’’. 
(E) Section 4081(d)(2) of such Code is 
amended by inserting ‘‘, (a)(2)(A)(iv),’’ after 
‘‘subsections (a)(2)(A)(ii)’’. 
(b) EXTENSION.— 
(1) FUELS
TAXES.—Paragraph (2) of section 
4081(d) of such Code is amended by striking ‘‘gal-
lon—’’ and all that follows and inserting ‘‘gallon 
after September 30, 2011’’. 
(2) TAXES
ON
TRANSPORTATION
OF
PERSONS 
AND PROPERTY.— 
(A) 
PERSONS.—Clause 
(ii) 
of 
section 
4261(j)(1)(A) of such Code is amended by strik-
ing ‘‘September 30, 2007’’ and inserting ‘‘Sep-
tember 30, 2011’’. 
(B) PROPERTY.—Clause (ii) of section 
4271(d)(1)(A) of such Code is amended by strik-
ing ‘‘September 30, 2007’’ and inserting ‘‘Sep-
tember 30, 2011’’. 
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(c) EXEMPTION FOR AVIATION-GRADE KEROSENE RE-
MOVED INTO AN AIRCRAFT.—Subsection (e) of section 4082 
of such Code is amended— 
(1) by striking ‘‘kerosene’’ and inserting ‘‘avia-
tion-grade kerosene’’, 
(2) by striking ‘‘section 4081(a)(2)(A)(iii)’’ and 
inserting ‘‘section 4081(a)(2)(A)(iv)’’, and 
(3) by striking ‘‘KEROSENE’’ in the heading and 
inserting ‘‘AVIATION-GRADE KEROSENE’’. 
(d) RETAIL TAX ON AVIATION FUEL.— 
(1) 
EXEMPTION
FOR
PREVIOUSLY
TAXED 
FUEL.—Paragraph (2) of section 4041(c) of such Code 
is amended by inserting ‘‘at the rate specified in sub-
section (a)(2)(A)(iv) thereof’’ after ‘‘section 4081’’. 
(2) RATE
OF
TAX.—Paragraph (3) of section 
4041(c) of such Code is amended to read as follows: 
‘‘(3) RATE OF TAX.—The rate of tax imposed by 
this subsection shall be the rate of tax in effect under 
section 4081(a)(2)(A)(iv) (4.3 cents per gallon with 
respect to any sale or use for commercial aviation).’’. 
(e) REFUNDS RELATING TO AVIATION-GRADE KER-
OSENE.— 
(1) KEROSENE
USED
IN
COMMERCIAL
AVIA-
TION.—Clause (ii) of section 6427(l)(4)(A) of such 
Code is amended by striking ‘‘specified in section 
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4041(c) or 4081(a)(2)(A)(iii), as the case may be,’’ 
and inserting ‘‘so imposed’’. 
(2) KEROSENE USED IN AVIATION.—Paragraph 
(4) of section 6427(l) of such Code is amended— 
(A) by striking subparagraph (B) and re-
designating subparagraph (C) as subparagraph 
(B), and 
(B) by amending subparagraph (B), as re-
designated by subparagraph (A), to read as fol-
lows: 
‘‘(B) PAYMENTS TO ULTIMATE, REGISTERED 
VENDOR.—With respect to any kerosene used in 
aviation (other than kerosene to which para-
graph (6) applies), if the ultimate purchaser of 
such kerosene waives (at such time and in such 
form and manner as the Secretary shall pre-
scribe) the right to payment under paragraph 
(1) and assigns such right to the ultimate ven-
dor, then the Secretary shall pay (without inter-
est) 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 
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‘‘(ii) meets the requirements of sub-
paragraph (A), (B), or (D) of section 
6416(a)(1).’’. 
(3) AVIATION-GRADE
KEROSENE
NOT
USED
IN 
AVIATION.—Subsection (l) of section 6427 of such 
Code is amended by redesignating paragraph (5) as 
paragraph (6) and by inserting after paragraph (4) 
the following new paragraph: 
‘‘(5) REFUNDS FOR AVIATION-GRADE KEROSENE 
NOT USED IN AVIATION.—If tax has been imposed 
under section 4081 at the rate specified in section 
4081(a)(2)(A)(iv) and the fuel is used other than in 
an aircraft, the Secretary shall pay (without interest) 
to the ultimate purchaser of such fuel an amount 
equal to the amount of tax imposed on such fuel re-
duced by the amount of tax that would be imposed 
under section 4041 if no tax under section 4081 had 
been imposed.’’. 
(4) CONFORMING AMENDMENTS.— 
(A) Section 6427(i)(4) of such Code is 
amended— 
(i) by striking ‘‘(4)(C)’’ the first two 
places it occurs and inserting ‘‘(4)(B)’’, and 
(ii) by striking ‘‘, (l)(4)(C)(ii), and’’ 
and inserting ‘‘and’’. 
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(B) Section 4082(d)(2)(B) of such Code is 
amended by striking ‘‘6427(l)(5)(B)’’ and insert-
ing ‘‘6427(l)(6)(B)’’. 
(f) AIRPORT AND AIRWAY TRUST FUND.— 
(1) EXTENSION OF TRUST FUND AUTHORITIES.— 
(A) EXPENDITURES FROM TRUST FUND.— 
Paragraph (1) of section 9502(d) of such Code is 
amended— 
(i) in the matter preceding subpara-
graph (A) by striking ‘‘October 1, 2007’’ 
and inserting ‘‘October 1, 2011’’, and 
(ii) in subparagraph (A) by inserting 
‘‘or the FAA Reauthorization Act of 2007’’ 
before the semicolon at the end. 
(B) LIMITATION ON TRANSFERS TO TRUST 
FUND.—Paragraph (2) of section 9502(f) of such 
Code is amended by striking ‘‘October 1, 2007’’ 
and inserting ‘‘October 1, 2011’’. 
(2) TRANSFERS
TO
TRUST
FUND.—Subpara-
graph (C) of section 9502(b)(1) of such Code is 
amended to read as follows: 
‘‘(C) section 4081 with respect to aviation 
gasoline and aviation-grade kerosene, and’’. 
(3) TRANSFERS ON ACCOUNT OF CERTAIN RE-
FUNDS.— 
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(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 fol-
lowing new paragraph: 
‘‘(7) TRANSFERS
FROM
AIRPORT
AND
AIRWAY 
TRUST FUND ON ACCOUNT OF AVIATION-GRADE KER-
OSENE NOT USED IN AVIATION.—The Secretary of the 
Treasury shall pay from time to time from the Air-
port 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 avia-
tion-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 CONTROL 
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 esti-
mates 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 im-
posed 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 De-
cember 31, 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 aviation 
fuel which is held on January 1, 2008, 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 
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 January 1, 2008, 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 
April 30, 2008, and in such manner as the Sec-
retary 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 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 Revenue 
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). 
(C) SECRETARY.—The term ‘‘Secretary’’ 
means the Secretary of the Treasury or the Sec-
retary’s delegate. 
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(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 
January 1, 2008, 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. 
(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 (6). 
(C) CONTROLLED GROUPS.—For purposes of 
this subsection— 
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(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 such Code; except 
that for such purposes the phrase 
‘‘more than 50 percent’’ shall be sub-
stituted for the phrase ‘‘at least 80 per-
cent’’ 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 
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 such Code on the 
aviation fuel involved shall, insofar as applicable and 
not inconsistent with the provisions of this subsection, 
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Union Calendar No. 207 
110TH CONGRESS 
1ST SESSION 
H. R. 3539 
[Report No. 110–334, Part I] 
A BILL 
To amend the Internal Revenue Code of 1986 to 
extend financing for the Airport and Airway 
Trust Fund, and for other purposes. 
SEPTEMBER 19, 2007 
Reported from the Committee on Ways and Means with 
an amendment 
SEPTEMBER 19, 2007 
Committee on Transportation and Infrastructure dis-
charged; committed to the Committee of the Whole 
House on the State of the Union and ordered to be 
printed 
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