I
105TH CONGRESS
1ST SESSION
H. R. 823
To amend the Internal Revenue Code of 1986 to reinstate the Airport and
Airway Trust Fund excise taxes and to suspend the 4.3-cent general
revenue portion of such taxes during the reinstatement period.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 25, 1997
Mr. HILLEARY introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to reinstate
the Airport and Airway Trust Fund excise taxes and
to suspend the 4.3-cent general revenue portion of such
taxes during the reinstatement period.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Airport and Airway Trust Fund Tax Reinstatement Act
of 1997’’.
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986.
SEC. 2. REINSTATEMENT OF AIRPORT AND AIRWAY TRUST
FUND EXCISE TAXES.
(a) FUEL TAXES.—
(1) AVIATION FUEL.—Subparagraph (A) of sec-
tion 4091(b)(3) is amended to read as follows:
‘‘(A) The rate of tax specified in para-
graph (1) shall be 4.3 cents per gallon—
‘‘(i) after December 31, 1996, and be-
fore the date which is 7 days after the date
of the enactment of the Airport and Air-
way Trust Fund Tax Reinstatement Act of
1997, and
‘‘(ii) after September 30, 1997.’’
(2) AVIATION
GASOLINE.—Subsection (d) of
section 4081 is amended by striking the paragraph
(3) added by section 1609(a) of the Small Business
Job Protection Act of 1996 and by striking para-
graphs (1) and (2) and inserting the following new
paragraphs:
‘‘(1) IN GENERAL.—The rates of tax specified
in clauses (i) and (iii) of subsection (a)(2)(A) shall
be 4.3 cents per gallon after September 30, 1999.
‘‘(2) AVIATION
GASOLINE.—The rate of tax
specified in subsection (a)(2)(A)(ii) shall be 4.3
cents per gallon—
‘‘(A) after December 31, 1996, and before
the date which is 7 days after the date of the
enactment of the Airport and Airway Trust
Fund Tax Reinstatement Act of 1997, and
‘‘(B) after September 30, 1997.’’
(3) NONCOMMERCIAL
AVIATION.—Paragraph
(3) of section 4041(c) is amended to read as follows:
‘‘(3) TERMINATION.—The rate of the taxes im-
posed by paragraph (1) shall be 4.3 cents per gal-
lon—
‘‘(A) after December 31, 1996, and before
the date which is 7 days after the date of the
enactment of the Airport and Airway Trust
Fund Tax Reinstatement Act of 1997, and
‘‘(B) after September 30, 1997.’’
(b) TICKET TAXES.—
(1) PERSONS.—Subsection (g) of section 4261
is amended to read as follows:
‘‘(g) APPLICATION OF TAXES.—
‘‘(1) IN GENERAL.—The taxes imposed by this
section shall apply to—
‘‘(A) transportation beginning during the
period—
‘‘(i) beginning on the 7th day after
the date of the enactment of the Airport
and Airway Trust Fund Tax Reinstate-
ment Act of 1997, and
‘‘(ii) ending on September 30, 1997,
and
‘‘(B) amounts paid during such period for
transportation beginning after such period.
‘‘(2) REFUNDS.—If, as of the date any trans-
portation begins, the taxes imposed by this section
would not have applied to such transportation if
paid for on such date, any tax paid under paragraph
(1)(B) with respect to such transportation shall be
treated as an overpayment.’’
(2) PROPERTY.—Subsection (d) of section 4271
is amended to read as follows:
‘‘(d) APPLICATION OF TAX.—
‘‘(1) IN GENERAL.—The tax imposed by sub-
section (a) shall apply to—
‘‘(A) transportation beginning during the
period—
‘‘(i) beginning on the 7th day after
the date of the enactment of the Airport
and Airway Trust Fund Tax Reinstate-
ment Act of 1997, and
‘‘(ii) ending on September 30, 1997,
and
‘‘(B) amounts paid during such period for
transportation beginning after such period.
‘‘(2) REFUNDS.—If, as of the date any trans-
portation begins, the taxes imposed by this section
would not have applied to such transportation if
paid for on such date, any tax paid under paragraph
(1)(B) with respect to such transportation shall be
treated as an overpayment.’’
(c) TRANSFERS TO AIRPORT AND AIRWAY TRUST
FUND.—
(1) IN
GENERAL.—Subsection (b) of section
9502 is amended to read as follows:
‘‘(b) TRANSFERS TO AIRPORT AND AIRWAY TRUST
FUND.—There are hereby appropriated to the Airport and
Airway Trust Fund amounts equivalent to—
‘‘(1) the taxes received in the Treasury under—
‘‘(A) subsections (c) and (e) of section
4041 (relating to aviation fuels),
‘‘(B) sections 4261 and 4271 (relating to
transportation by air),
‘‘(C) section 4081 (relating to gasoline)
with respect to aviation gasoline (to the extent
that the rate of the tax on such gasoline ex-
ceeds 4.3 cents per gallon), and
‘‘(D) section 4091 (relating to aviation
fuel) to the extent attributable to the Airport
and Airway Trust Fund financing rate, and
‘‘(2) the amounts determined by the Secretary
of the Treasury to be equivalent to the amounts of
civil penalties collected under section 47107(n) of
title 49, United States Code.’’
(2) TERMINATION OF FINANCING RATE.—Para-
graph (3) of section 9502(f) is amended to read as
follows:
‘‘(3) TERMINATION.—Notwithstanding the pre-
ceding provisions of this subsection, the Airport and
Airway Trust Fund financing rate shall be zero with
respect to taxes imposed during any period that the
rate of the tax imposed by section 4091(b)(1) is 4.3
cents per gallon.’’
(d) FLOOR STOCKS TAXES ON AVIATION GASOLINE
AND AVIATION FUEL.—
(1) IMPOSITION OF TAX.—In the case of any
aviation liquid on which tax was imposed under sec-
tion 4081 or 4091 of the Internal Revenue Code of
1986 before the tax effective date and which is held
on such date by any person, there is hereby imposed
a floor stocks tax of—
(A) 15 cents per gallon in the case of avia-
tion gasoline, and
(B) 17.5 cents per gallon in the case of
aviation fuel.
(2) LIABILITY FOR TAX AND METHOD OF PAY-
MENT.—
(A) LIABILITY FOR TAX.—A person hold-
ing, on the tax effective date, any aviation liq-
uid to which the tax imposed by paragraph (1)
applies shall be liable for such tax.
(B) METHOD OF PAYMENT.—The tax im-
posed by paragraph (1) shall be paid in such
manner as the Secretary shall prescribe.
(C) TIME
FOR
PAYMENT.—The tax im-
posed by paragraph (1) shall be paid on or be-
fore the first day of the 5th month beginning
after the tax effective date.
(3) DEFINITIONS.—For purposes of this sub-
section—
(A) TAX
EFFECTIVE
DATE.—The term
‘‘tax effective date’’ means the date which is 7
days after the date of the enactment of this
Act.
(B) AVIATION LIQUID.—The term ‘‘avia-
tion liquid’’ means aviation gasoline and avia-
tion fuel.
(C) 
AVIATION
GASOLINE.—The 
term
‘‘aviation gasoline’’ has the meaning given such
term in section 4081 of such Code.
(D) AVIATION FUEL.—The term ‘‘aviation
fuel’’ has the meaning given such term by sec-
tion 4093 of such Code.
(E) HELD BY A PERSON.—Aviation liquid
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).
(F) SECRETARY.—The term ‘‘Secretary’’
means the Secretary of the Treasury or the
Secretary’s delegate.
(4) EXCEPTION FOR EXEMPT USES.—The tax
imposed by paragraph (1) shall not apply to—
(A) aviation liquid held by any person on
the tax effective date exclusively for any use for
which a credit or refund of the entire tax im-
posed by section 4081 or 4091 of such Code (as
the case may be) is allowable for such liquid
purchased on or after such tax effective date for
such use, or
(B) aviation fuel held by any person on the
tax effective date exclusively for any use de-
scribed in section 4092(b) of such Code.
(5) EXCEPTION
FOR
CERTAIN
AMOUNTS
OF
FUEL.—
(A) IN
GENERAL.—No tax shall be im-
posed by paragraph (1) on any aviation liquid
held on the tax effective date by any person if
the aggregate amount of such liquid (deter-
mined separately for aviation gasoline and avia-
tion fuel) held by such person on such date does
not exceed 2,000 gallons. The preceding sen-
tence shall apply only if such person submits to
the Secretary (at the time and in the manner
required by the Secretary) such information as
the Secretary shall require for purposes of this
paragraph.
(B) EXEMPT FUEL.—Any liquid to which
the tax imposed by paragraph (1) does not
apply by reason of paragraph (4) shall not be
taken into account under subparagraph (A).
(C) CONTROLLED GROUPS.—For purposes
of this paragraph—
(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 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 clause (i)
shall apply to a group of persons under
common control where 1 or more of such
persons is not a corporation.
(6) OTHER LAWS APPLICABLE.—All provisions
of law, including penalties, applicable with respect to
the taxes imposed by section 4081 or 4091 of such
Code shall, insofar as applicable and not inconsistent
with the provisions of this subsection, apply with re-
spect to the floor stocks taxes imposed by paragraph
(1) to the same extent as if such taxes were imposed
by such section 4081 or 4091, as the case may be.
(e) EFFECTIVE DATES.—
(1) FUEL TAXES.—The amendments made by
subsection (a) shall apply to periods beginning on or
after the 7th day after the date of the enactment of
this Act.
(2) TICKET TAXES.—
(A) IN GENERAL.—The amendments made
by subsection (b) shall apply to transportation
beginning on or after such 7th day.
(B) 
EXCEPTION
FOR
CERTAIN
PAY-
MENTS.—Except as provided in subparagraph
(C), the amendments made by subsection (b)
shall not apply to any amount paid before such
7th day.
(C) PAYMENTS OF PROPERTY TRANSPOR-
TATION TAX WITHIN CONTROLLED GROUP.—In
the case of the tax imposed by section 4271 of
the Internal Revenue Code of 1986, subpara-
graph (B) shall not apply to any amount paid
by 1 member of a controlled group for transpor-
tation furnished by another member of such
group. For purposes of the preceding sentence,
all persons treated as a single employer under
subsection (a) or (b) of section 52 of the Inter-
nal Revenue Code of 1986 shall be treated as
members of a controlled group.
(f) APPLICATION OF LOOK-BACK SAFE HARBOR FOR
DEPOSITS.—Nothing in the look-back safe harbor pre-
scribed in Treasury Regulation section 40.6302(c)–1(c)(2)
shall be construed to permit such safe harbor to be used
with respect to any tax unless such tax was imposed
throughout the look-back period.
SEC. 3. REPEAL OF 4.3-CENT INCREASE IN FUEL TAX RATES
ENACTED BY THE OMNIBUS BUDGET REC-
ONCILIATION ACT OF 1993 AND DEDICATED
TO GENERAL FUND OF THE TREASURY DUR-
ING PERIOD TICKET TAXES IN EFFECT.
(a) IN GENERAL.—Section 4081 (relating to imposi-
tion of tax on gasoline and diesel fuel) is amended by add-
ing at the end the following new subsection:
‘‘(f) REPEAL OF 4.3-CENT INCREASE IN FUEL TAX
RATES ENACTED BY THE OMNIBUS BUDGET RECONCILI-
ATION ACT OF 1993 AND DEDICATED TO GENERAL FUND
OF THE TREASURY.—
‘‘(1) IN GENERAL.—During the applicable pe-
riod, each rate of tax referred to in paragraph (2)
shall be reduced by 4.3 cents per gallon.
‘‘(2) RATES OF TAX.—The rates of tax referred
to in this paragraph are the rates of tax otherwise
applicable under—
‘‘(A) subsection (a)(2)(A) (relating to gas-
oline and diesel fuel),
‘‘(B) 
sections 
4091(b)(3)(A) 
and
4092(b)(2) (relating to aviation fuel),
‘‘(C) section 4042(b)(2)(C) (relating to
fuel used on inland waterways),
‘‘(D) paragraph (1) or (2) of section
4041(a) (relating to diesel fuel and special
fuels), and
‘‘(E) section 4041(m)(1)(A)(i) (relating to
certain methanol or ethanol fuels).
‘‘(3) COMPARABLE
TREATMENT
FOR
COM-
PRESSED NATURAL GAS.—No tax shall be imposed
by section 4041(a)(3) on any sale or use during the
applicable period.
‘‘(4) COMPARABLE
TREATMENT
UNDER
CER-
TAIN REFUND RULES.—In the case of fuel on which
tax is imposed during the applicable period, each of
the rates specified in sections 6421(f)(2)(B),
6421(f)(3)(B)(ii), 6427(b)(2)(A), 6427(l)(3)(B)(ii),
and 6427(l)(4)(B) shall be reduced by 4.3 cents per
gallon.
‘‘(5) COORDINATION
WITH
HIGHWAY
TRUST
FUND DEPOSITS.—In the case of fuel on which tax
is imposed during the applicable period, each of the
rates specified in subparagraphs (A)(i) and (C)(i) of
section 9503(f)(3) shall be reduced by 4.3 cents per
gallon.
‘‘(6) APPLICABLE
PERIOD.—For purposes of
this subsection, the term ‘applicable period’ means
the period after the 6th day after the date of the en-
actment of this subsection and before October 1,
1997.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 4. FLOOR STOCK REFUNDS.
(a) IN GENERAL.—If—
(1) before the tax repeal date, tax has been im-
posed under section 4081 or 4091 of the Internal
Revenue Code of 1986 on any liquid, and
(2) on such date such liquid is held by a dealer
and has not been used and is intended for sale,
there shall be credited or refunded (without interest) to
the person who paid such tax (hereafter in this section
referred to as the ‘‘taxpayer’’) an amount equal to the ex-
cess of the tax paid by the taxpayer over the amount of
such tax which would be imposed on such liquid had the
taxable event occurred on such date.
(b) TIME FOR FILING CLAIMS.—No credit or refund
shall be allowed or made under this section unless—
(1) claim therefor is filed with the Secretary of
the Treasury before the date which is 6 months
after the tax repeal date, and
(2) in any case where liquid is held by a dealer
(other than the taxpayer) on the tax repeal date—
(A) the dealer submits a request for refund
or credit to the taxpayer before the date which
is 3 months after the tax repeal date, and
(B) the taxpayer has repaid or agreed to
repay the amount so claimed to such dealer or
has obtained the written consent of such dealer
to the allowance of the credit or the making of
the refund.
(c) EXCEPTION
FOR
FUEL
HELD
IN
RETAIL
STOCKS.—No credit or refund shall be allowed under this
section with respect to any liquid in retail stocks held at
the place where intended to be sold at retail.
(d) DEFINITIONS.—For purposes of this section—
(1) the terms ‘‘dealer’’ and ‘‘held by a dealer’’
have the respective meanings given to such terms by
section 6412 of such Code; except that the term
‘‘dealer’’ includes a producer, and
(2) the term ‘‘tax repeal date’’ means the 7th
day after the date of the enactment of this Act.
(e) CERTAIN RULES TO APPLY.—Rules similar to the
rules of subsections (b) and (c) of section 6412 of such
Code shall apply for purposes of this section.
SEC. 5. FLOOR STOCKS TAX.
(a) IMPOSITION OF TAX.—In the case of any liquid
on which tax was imposed under section 4081 or 4091
of the Internal Revenue Code of 1986 before October 1,
1997, and which is held on such date by any person, there
is hereby imposed a floor stocks tax of 4.3 cents per gal-
lon.
(b) LIABILITY
FOR TAX
AND METHOD
OF PAY-
MENT.—
(1) LIABILITY FOR TAX.—A person holding a
liquid on October 1, 1997, to which the tax imposed
by subsection (a) applies shall be liable for such tax.
(2) METHOD OF PAYMENT.—The tax imposed
by subsection (a) shall be paid in such manner as
the Secretary shall prescribe.
(3) TIME FOR PAYMENT.—The tax imposed by
subsection (a) shall be paid on or before March 31,
1998.
(c) DEFINITIONS.—For purposes of this section—
(1) HELD BY A PERSON.—A liquid shall be con-
sidered as ‘‘held by a person’’ if title thereto has
passed to such person (whether or not delivery to
the person has been made).
(2) GASOLINE AND DIESEL FUEL.—The terms
‘‘gasoline’’ and ‘‘diesel fuel’’ have the respective
meanings given such terms by section 4083 of such
Code.
(3) AVIATION FUEL.—The term ‘‘aviation fuel’’
has the meaning given such term by section 4093 of
such Code.
(4) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of the Treasury or his delegate.
(d) EXCEPTION FOR EXEMPT USES.—The tax im-
posed by subsection (a) shall not apply to gasoline, diesel
fuel, or aviation fuel held by any person exclusively for
any use to the extent a credit or refund of the tax imposed
by section 4081 or 4091 of such Code is allowable for such
use.
(e) EXCEPTION
FOR
FUEL
HELD
IN
VEHICLE
TANK.—No tax shall be imposed by subsection (a) on gas-
oline or diesel fuel held in the tank of a motor vehicle or
motorboat.
(f) EXCEPTION FOR CERTAIN AMOUNTS OF FUEL.—
(1) IN GENERAL.—No tax shall be imposed by
subsection (a)—
(A) on gasoline held on October 1, 1997,
by any person if the aggregate amount of gaso-
line held by such person on such date does not
exceed 4,000 gallons, and
(B) on diesel fuel or aviation fuel held on
such date by any person if the aggregate
amount of diesel fuel or 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 information
as the Secretary shall require for purposes of this
paragraph.
(2) EXEMPT
FUEL.—For purposes of para-
graph (1), there shall not be taken into account fuel
held by any person which is exempt from the tax im-
posed by subsection (a) by reason of subsection (d)
or (e).
(3) CONTROLLED
GROUPS.—For purposes of
this subsection—
(A) 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 subsection (a) of section
1563 of such Code; except that for such
purposes the phrase ‘‘more than 50 per-
cent’’ shall be substituted for the phrase
‘‘at least 80 percent’’ each place it appears
in such subsection.
(B) NONINCORPORATED PERSONS UNDER
COMMON
CONTROL.—Under regulations pre-
scribed by the Secretary, principles similar to
the principles of subparagraph (A) shall apply
to a group of persons under common control