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‘‘(6) PROHIBITION
ON
USE
OF
HIGHWAY
AC-
COUNT FOR CERTAIN RAIL PROJECTS.—With respect 
to rail projects beginning after the date of the enact-
ment of this paragraph, no amount shall be available 
from the Highway Account (as defined in subsection 
(e)(5)(B)) for any rail project, except for any rail 
project involving publicly owned rail facilities or any 
rail project yielding a public benefit.’’. 
(h) HIGHWAY
TRUST
FUND
EXPENDITURES
FOR 
HIGHWAY USE TAX EVASION PROJECTS.—Section 9503(c), 
as amended by subsection (g), is amended to add at the 
end the following new paragraph: 
‘‘(7) HIGHWAY USE TAX EVASION PROJECTS.— 
From amounts available in the Highway Trust Fund, 
there is authorized to be expended— 
‘‘(A) for each fiscal year after 2003 to the 
Internal Revenue Service— 
‘‘(i) $30,000,000 for enforcement of fuel 
tax compliance, including the per-certifi-
cation of tax-exempt users, 
‘‘(ii) $10,000,000 for Xstars, and 
‘‘(iii) $10,000,000 for xfirs, and 
‘‘(B) for each fiscal year after 2003 to the 
Federal Highway Administration, $50,000,000
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to be allocated $1,000,000 to each State to com-
bat fuel tax evasion on the State level.’’. 
(i) EFFECTIVE DATE.—The amendments made by and 
provisions of this section shall take effect on the date of the 
enactment of this Act. 
SEC. 5002. FULL ACCOUNTING OF FUNDS RECEIVED BY THE 
HIGHWAY TRUST FUND. 
(a) IN GENERAL.—Section 9503(c) (relating to trans-
fers from Highway Trust Fund for certain repayments and 
credits), as amended by section 5001 of this Act, is amended 
by striking paragraph (2) and redesignating paragraphs 
(3), (4), (5), (6), and (7) as paragraphs (2), (3), (4), (5), 
and (6), respectively. 
(b) INTEREST ON UNEXPENDED BALANCES CREDITED 
TO TRUST FUND.—Section 9503 (relating to the Highway 
Trust Fund) is amended by striking subsection (f). 
(c) CONFORMING AMENDMENTS.— 
(1) Section 9503(b)(4)(D) is amended by strik-
ing ‘‘paragraph (4)(D) or (5)(B)’’ and inserting 
‘‘paragraph (3)(D) or (4)(B)’’. 
(2) Paragraph (2) of section 9503(c) (as redesig-
nated by subsection (a)) is amended by adding at the 
end the following new sentence: ‘‘The amounts pay-
able from the Highway Trust Fund under this para-
graph shall be determined by taking into account only
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the portion of the taxes which are deposited into the 
Highway Trust Fund.’’. 
(3) Section 9504(a)(2) is amended by striking 
‘‘section 9503(c)(4), section 9503(c)(5)’’ and inserting 
‘‘section 9503(c)(3), section 9503(c)(4)’’. 
(4) Paragraph (2) of section 9504(b), as amend-
ed by section 5001 of this Act, is amended by striking 
‘‘section 
9503(c)(5)’’ 
and 
inserting 
‘‘section 
9503(c)(4)’’. 
(5) Section 9504(e) is amended by striking ‘‘sec-
tion 9503(c)(4)’’ and inserting ‘‘section 9503(c)(3)’’. 
(d) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall 
apply to amounts paid for which no transfer from the 
Highway Trust Fund has been made before April 1, 
2004. 
(2) 
INTEREST
CREDITED.—The 
amendment 
made by subsection (b) shall take effect on the date of 
the enactment of this Act. 
SEC. 5003. MODIFICATION OF ADJUSTMENTS OF APPOR-
TIONMENTS. 
(a) IN GENERAL.—Section 9503(d) (relating to adjust-
ments for apportionments) is amended—
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(1) by striking ‘‘24-month’’ in paragraph (1)(B) 
and inserting ‘‘48-month’’, and 
(2) by striking ‘‘2 YEARS’’’ in the heading for 
paragraph (3) and inserting ‘‘4 YEARS’’’. 
(b) MEASUREMENT OF NET HIGHWAY RECEIPTS.— 
Section 9503(d) is amended by redesignating paragraph (6) 
as paragraph (7) and by inserting after paragraph (5) the 
following new paragraph: 
‘‘(6) MEASUREMENT
OF
NET
HIGHWAY
RE-
CEIPTS.—For purposes of making any estimate under 
paragraph (1) of net highway receipts for periods 
ending after the date specified in subsection (b)(1), 
the Secretary shall treat— 
‘‘(A) each expiring provision of subsection 
(b) which is related to appropriations or trans-
fers to the Highway Trust Fund to have been ex-
tended through the end of the 48-month period 
referred to in paragraph (1)(B), and 
‘‘(B) with respect to each tax imposed under 
the sections referred to in subsection (b)(1), the 
rate of such tax during the 48-month period re-
ferred to in paragraph (1)(B) to be the same as 
the rate of such tax as in effect on the date of 
such estimate.’’.
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(c) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on the date of the enactment of this 
Act. 
Subtitle B—Volumetric Ethanol 
Excise Tax Credit 
SEC. 5101. SHORT TITLE. 
This subtitle may be cited as the ‘‘Volumetric Ethanol 
Excise Tax Credit (VEETC) Act of 2004’’. 
SEC. 5102. ALCOHOL AND BIODIESEL EXCISE TAX CREDIT 
AND EXTENSION OF ALCOHOL FUELS INCOME 
TAX CREDIT. 
(a) IN GENERAL.—Subchapter B of chapter 65 (relat-
ing to rules of special application) is amended by inserting 
after section 6425 the following new section: 
‘‘SEC. 6426. CREDIT FOR ALCOHOL FUEL AND BIODIESEL 
MIXTURES. 
‘‘(a) ALLOWANCE OF CREDITS.—There shall be allowed 
as a credit against the tax imposed by section 4081 an 
amount equal to the sum of— 
‘‘(1) the alcohol fuel mixture credit, plus 
‘‘(2) the biodiesel mixture credit. 
‘‘(b) ALCOHOL FUEL MIXTURE CREDIT.— 
‘‘(1) IN GENERAL.—For purposes of this section, 
the alcohol fuel mixture credit is the product of the 
applicable amount and the number of gallons of alco-