[House Report 105-467]
[From the U.S. Government Publishing Office]



105th Congress                                            Rept. 105-467
                        HOUSE OF REPRESENTATIVES

 2d Session                                                      Part 3
_______________________________________________________________________


 
               SURFACE TRANSPORTATION REVENUE ACT OF 1998

                                _______
                                

 March 27, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


 Mr. Archer from, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2400]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Ways and Means, to whom was referred the 
bill (H.R. 2400) to authorize funds for Federal-aid highways, 
highway safety programs, and transit programs, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
 I. Summary and Background............................................7
        A. Purpose and Summary...................................     7
        B. Background and Need for Legislation...................     7
        C. Legislative History...................................     7
II. Explanation of the Bill...........................................8
        A. Present-Law Highway Trust Fund, Aquatic Resources 
            Trust Fund, and National Recreational Trails Trust 
            Fund Excise Taxes....................................     8
        B. Highway Trust Fund, Aquatic Resources Trust Fund, and 
            National Recreational Trails Trust Fund Expenditure 
            Provisions...........................................    11
            1. Present-law provisions............................    11
            2. Summary of H.R. 2400 trust fund expenditure 
                authorizations...................................    14
        C. Reasons for Change....................................    15
        D. Explanation of Provisions.............................    16
            1. Extension of existing Highway Fund excise taxes 
                and certain exemptions...........................    16
            2. Extension and modification of Highway Fund 
                expenditure authority............................    16
            3. Provisions affecting the Aquatic Fund.............    18
            4. Repeal of excise tax on heavy tires...............    18
            5. Repeal of 4.3 cents-per-gallon excise tax on rail 
                fuel.............................................    19
            6. Delay in effective date of new requirement for 
                approved diesel fuel or kerosene terminals.......    19
            7. Simplify fuels tax refund procedures..............    19
            8. Repeal of Trails Fund.............................    19
III.Votes of the Committee...........................................20

IV. Budget Effects of the Bill.......................................20
        A. Committee Estimates of Budgetary Effects..............    20
        B. Budget Authority and Tax Expenditures.................    21
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................    22
 V. Other Matters To Be Discussed Under the Rules of the House.......25
        A. Committee Oversight Findings and Recommendations......    25
        B. Summary of Findings and Recommendations of the 
            Committee on Government Reform and Oversight.........    25
        C. Constitutional Authority Statement....................    26
        D. Information Relating to Unfunded Mandates.............    26
        E. Applicability of House Rule XXI5(c)...................    26
VI. Changes in Existing Law Made by the Bill, as Reported............26

  The amendment is as follows:
  Insert after title X the following new title:

TITLE XI--EXTENSION AND MODIFICATION OF HIGHWAY-RELATED TAXES AND TRUST 
                                  FUND

Sec. 1101. Short title; amendment of 1986 Code.
Sec. 1102. Extension of highway-related taxes and trust fund.
Sec. 1103. Modifications to Highway Trust Fund.
Sec. 1104. Provisions relating to Aquatic Resources Trust Fund.
Sec. 1105. Repeal of excise tax on tires.
Sec. 1106. Repeal of 4.3 cent excise tax on diesel fuel and gasoline 
used in trains.
Sec. 1107. Delay in effective date of new requirement for approved 
diesel or kerosene terminals.
Sec. 1108. Simplified fuel tax refund procedures.
Sec. 1109. Repeal of National Recreational Trails Trust Fund.

SEC. 1101. SHORT TITLE; AMENDMENT OF 1986 CODE.

  (a) Short Title.--This title may be cited as the ``Surface 
Transportation Revenue Act of 1998''.
  (b) Amendment of 1986 Code.--Except as otherwise expressly provided, 
whenever in this title an amendment 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 
provision of the Internal Revenue Code of 1986.

SEC. 1102. EXTENSION OF HIGHWAY-RELATED TAXES AND TRUST FUND.

  (a) Extension of Taxes.--
          (1) In general.--The following provisions are each amended by 
        striking ``1999'' each place it appears and inserting ``2005'':
                  (A) Section 4041(a)(1)(C)(iii)(I) (relating to rate 
                of tax on certain buses).
                  (B) Section 4041(a)(2)(B) (relating to rate of tax on 
                special motor fuels), as amended by section 907(a)(1) 
                of the Taxpayer Relief Act of 1997.
                  (C) Section 4041(m)(1)(A) (relating to certain 
                alcohol fuels), as amended by section 907(b) of the 
                Taxpayer Relief Act of 1997.
                  (D) Section 4051(c) (relating to termination).
                  (E) Section 4081(d)(1) (relating to termination).
                  (F) Section 4481(e) (relating to period tax in 
                effect).
                  (G) Section 4482(c)(4) (relating to taxable period).
                  (H) Section 4482(d) (relating to special rule for 
                taxable period in which termination date occurs).
          (2) Tax on tires extended only through September 30, 2000.--
        Section 4071(d) (relating to termination) is amended by 
        striking ``1999'' and inserting ``2000''.
          (3) Other provisions.--
                  (A) Floor stocks refunds.--Section 6412(a)(1) 
                (relating to floor stocks refunds) is amended--
                          (i) by striking ``1999'' each place it 
                        appears and inserting ``2005'', and
                          (ii) by striking ``2000'' each place it 
                        appears and inserting ``2006''.
                  (B) Installment payments of highway use tax.--Section 
                6156(e)(2) (relating to installment payments of highway 
                use tax on use of highway motor vehicles) is amended by 
                striking ``1999'' and inserting ``2005''.
  (b) Extension of Certain Exemptions.--The following provisions are 
each amended by striking ``1999'' and inserting ``2005'':
          (1) Section 4221(a) (relating to certain tax-free sales).
          (2) Section 4483(g) (relating to termination of exemptions 
        for highway use tax).
  (c) Extension of Deposits Into, and Certain Transfers From, Trust 
Fund.--
          (1) In general.--Subsection (b), and paragraphs (2) and (3) 
        of subsection (c), of section 9503 (relating to the Highway 
        Trust Fund) are each amended--
                  (A) by striking ``1999'' each place it appears (other 
                than in subsection (b)(4)) and inserting ``2005'', and
                  (B) by striking ``2000'' each place it appears and 
                inserting ``2006''.
          (2) Motorboat and small-engine fuel tax transfers.--
                  (A) In general.--Paragraphs (4)(A)(i) and (5)(A) of 
                section 9503(c) are each amended by striking ``1998'' 
                and inserting ``2003''.
                  (B) Conforming amendments to land and water 
                conservation fund.--Section 201(b) of the Land and 
                Water Conservation Fund Act of 1965 (16 U.S.C. 460l-
                11(b)) is amended--
                          (i) by striking ``1997'' and inserting 
                        ``2003'', and
                          (ii) by striking ``1998'' each place it 
                        appears and inserting ``2004''.
          (3) Conforming amendment.--The heading for paragraph (3) of 
        section 9503(c) is amended to read as follows:
          ``(3) Floor stocks refunds.--''.
  (d) Extension and Expansion of Expenditures From Trust Fund.--
          (1) Highway account.--
                  (A) Extension of expenditure authority.--Paragraph 
                (1) of section 9503(c) is amended by striking ``1998'' 
                and inserting ``2003''.
                  (B) Expansion of purposes.--Paragraph (1) of section 
                9503(c) is amended--
                          (i) by striking ``or'' at the end of 
                        subparagraph (C), and
                          (ii) by striking ``1991.'' in subparagraph 
                        (D) and all that follows through the end of 
                        paragraph (1) and inserting ``1991, or
                  ``(E) authorized to be paid out of the Highway Trust 
                Fund under the Building Efficient Surface 
                Transportation and Equity Act of 1998.
        In determining the authorizations under the Acts referred to in 
        the preceding subparagraphs, such Acts shall be applied as in 
        effect on the date of the enactment of the Building Efficient 
        Surface Transportation and Equity Act of 1998.''.
          (2) Mass transit account.--
                  (A) Extension of expenditure authority.--Paragraph 
                (3) of section 9503(e) is amended by striking ``1998'' 
                and inserting ``2003''.
                  (B) Expansion of purposes.--Paragraph (3) of section 
                9503(e) is amended--
                          (i) by striking ``or'' at the end of 
                        subparagraph (A),
                          (ii) by adding ``or'' at the end of 
                        subparagraph (B), and
                          (iii) by striking all that follows 
                        subparagraph (B) and inserting:
                  ``(C) the Building Efficient Surface Transportation 
                and Equity Act of 1998,
        as such sections and Acts are in effect on the date of the 
        enactment of the Building Efficient Surface Transportation and 
        Equity Act of 1998.''.
  (e) Technical Correction Relating to Transfers to Mass Transit 
Account.--
          (1) In general.--Section 9503(e)(2) is amended by striking 
        the last sentence and inserting the following: ``For purposes 
        of the preceding sentence, the term `mass transit portion' 
        means, for any fuel with respect to which tax was imposed under 
        section 4041 or 4081 and otherwise deposited into the Highway 
        Trust Fund, the amount determined at the rate of--
                  ``(A) except as otherwise provided in this sentence, 
                2.86 cents per gallon,
                  ``(B) 1.43 cents per gallon in the case of any 
                partially exempt methanol or ethanol fuel (as defined 
                in section 4041(m)) none of the alcohol in which 
                consists of ethanol,
                  ``(C) 1.86 cents per gallon in the case of liquefied 
                natural gas,
                  ``(D) 2.13 cents per gallon in the case of liquefied 
                petroleum gas, and
                  ``(E) 9.71 cents per MCF (determined at standard 
                temperature and pressure) in the case of compressed 
                natural gas.''.
          (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect as if included in the amendment made by 
        section 901(b) of the Taxpayer Relief Act of 1997.

SEC. 1103. MODIFICATIONS TO HIGHWAY TRUST FUND.

  (a) Determination of Trust Fund Balances After September 30, 1998.--
          (1) In general.--Section 9503 (relating to Highway Trust 
        Fund) is amended by adding at the end the following new 
        subsection:
  ``(f) Determination of Trust Fund Balances After September 30, 
1998.--For purposes of determining the balances of the Highway Trust 
Fund and the Mass Transit Account after September 30, 1998--
          ``(1) the opening balance of the Highway Trust Fund (other 
        than the Mass Transit Account) on October 1, 1998, shall be 
        $8,000,000,000,
          ``(2) the opening balance of the Mass Transit Account on such 
        date shall be $5,500,000,000, and
          ``(3) no interest on any obligation held by such Fund shall 
        be credited to such Fund if such interest accrues after 
        September 30, 1998.
The Secretary shall cancel obligations held by the Highway Trust Fund 
to reflect the reduction in the balances under this subsection.''.
          (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on October 1, 1998.
  (b) Repeal of Limitation on Expenditures Added by Taxpayer Relief Act 
of 1997.--
          (1) In general.--Subsection (c) of section 9503 (relating to 
        expenditures from Highway Trust Fund) is amended by striking 
        paragraph (7).
          (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect as if included in the amendments made by 
        section 901 of the Taxpayer Relief Act of 1997.
  (c) Limitation on Expenditure Authority.--Subsection (b) of section 
9503 (relating to transfers to Highway Trust Fund) is amended by adding 
at the end the following new paragraph:
          ``(6) Limitation on transfers to highway trust fund.--
                  ``(A) In general.--Except as provided in subparagraph 
                (B), no amount may be appropriated to the Highway Trust 
                Fund on and after the date of any expenditure from the 
                Highway Trust Fund which is not permitted by this 
                section. The determination of whether an expenditure is 
                so permitted shall be made without regard to--
                          ``(i) any provision of law which is not 
                        contained or referenced in this title or in a 
                        revenue Act, and
                          ``(ii) whether such provision of law is a 
                        subsequently enacted provision or directly or 
                        indirectly seeks to waive the application of 
                        this paragraph.
                  ``(B) Exception for prior obligations.--Subparagraph 
                (A) shall not apply to any expenditure to liquidate any 
                contract entered into (or for any amount otherwise 
                obligated) before October 1, 2003, in accordance with 
                the provisions of this section.''.
  (d) Modification of Mass Transit Account Rules on Adjustments of 
Apportionments.--Paragraph (4) of section 9503(e) is amended to read as 
follows:
          ``(4) Limitation.--Rules similar to the rules of subsection 
        (d) shall apply to the Mass Transit Account.''.

SEC. 1104. PROVISIONS RELATING TO AQUATIC RESOURCES TRUST FUND.

  (a) Increased Transfers.--
          (1)(A) Effective with respect to taxes imposed after 
        September 30, 1999, and before October 1, 2000, subparagraph 
        (D) of section 9503(b)(4) is amended by striking ``11.5 cents'' 
        and inserting ``14.9 cents''.
          (B) Effective with respect to taxes imposed after September 
        30, 2000, paragraph (4) of section 9503(b) is amended by 
        striking subparagraph (D) and by redesignating subparagraphs 
        (E), (F), and (G) as subparagraphs (D), (E), and (F), 
        respectively.
          (2) Subparagraph (A) of section 9503(c)(4), as amended by 
        section 1102(c)(2)(A), is amended to read as follows:
                  ``(A) Transfers to boat safety account.--
                          ``(i) In general.--The Secretary shall pay 
                        from time to time from the Highway Trust Fund 
                        into the Boat Safety Account in the Aquatic 
                        Resources Trust Fund amounts (as determined by 
                        the Secretary) equivalent to one-half of the 
                        motorboat fuel taxes received after September 
                        30, 1998, and before October 1, 2003.
                          ``(ii) Limit on amount in fund.--No amount 
                        shall be transferred under this subparagraph 
                        during any fiscal year if the Secretary 
                        determines that such transfer would result in 
                        increasing the unobligated balance in the Boat 
                        Safety Account to a sum in excess of one-half 
                        of the total amount received as motorboat fuel 
                        taxes during the preceding fiscal year.''.
  (b) Extension and Expansion of Expenditure Authority From Boat Safety 
Account.--Section 9504(c) (relating to expenditures from Boat Safety 
Account) is amended--
          (1) by striking ``1998'' and inserting ``2003'', and
          (2) by striking ``October 1, 1988'' and inserting ``the date 
        of the enactment of the Building Efficient Surface 
        Transportation and Equity Act of 1998''.
  (c) Limitation on Expenditure Authority.--Section 9504 (relating to 
Aquatic Resources Trust Fund) is amended by redesignating subsection 
(d) as subsection (e) and by inserting after subsection (c) the 
following:
  ``(d) Limitation on Transfers to Aquatic Resources Trust Fund.--
          ``(1) In general.--Except as provided in paragraph (2), no 
        amount may be appropriated or paid to any Account in the 
        Aquatic Resources Trust Fund on and after the date of any 
        expenditure from any such Account which is not permitted by 
        this section. The determination of whether an expenditure is so 
        permitted shall be made without regard to--
                  ``(A) any provision of law which is not contained or 
                referenced in this title or in a revenue Act, and
                  ``(B) whether such provision of law is a subsequently 
                enacted provision or directly or indirectly seeks to 
                waive the application of this subsection.
          ``(2) Exception for prior obligations.--Paragraph (1) shall 
        not apply to any expenditure to liquidate any contract entered 
        into (or for any amount otherwise obligated) before October 1, 
        2003, in accordance with the provisions of this section.''.
  (d) Effective Dates.--
          (1) In general.--Except as otherwise provided in this 
        section, the amendments made by this section shall take effect 
        on the date of the enactment of this Act.
          (2) Increased transfers.--The amendment made by subsection 
        (a)(2) shall take effect on October 1, 1998.

SEC. 1105. REPEAL OF EXCISE TAX ON TIRES.

  (a) In General.--Subchapter A of chapter 32 (relating to automotive 
and related items) is amended by striking part II.
  (b) Conforming Amendments.--
          (1) Section 4051 is amended by striking subsection (d).
          (2) Section 4218 is amended--
                  (A) by striking ``(other than a tire taxable under 
                section 4071)'' in subsection (a),
                  (B) by striking subsection (b), and
                  (C) by redesignating subsection (c) as subsection 
                (b).
          (3)(A) The third sentence of section 4221(a) is amended to 
        read as follows: ``Paragraphs (4) and (5) shall not apply to 
        the tax imposed by section 4051 on and after October 1, 2005.''
          (B) Subsection (e) of section 4221 is amended--
                  (i) by striking paragraphs (2) and (3),
                  (ii) by striking so much of such subsection as 
                precedes the text of paragraph (1) and inserting:
  ``(e) Reciprocity Required in Case of Civil Aircraft.--'', and
                  (iii) by moving such text 2 ems to the left.
          (4) Paragraph (1) of section 4223(b) is amended by striking 
        ``section 4218(c)'' and inserting ``section 4218(b)''.
          (5)(A) Paragraph (1) of section 6412(a) is amended--
                  (i) by striking ``Tires and taxable'' in the heading 
                and inserting ``Taxable'', and
                  (ii) by striking ``4071 or''.
          (B) Subsection (c) of section 6412 is amended by striking 
        ``sections 4071 and'' and inserting ``section''.
          (6)(A) Paragraph (1) of section 6416(b) is amended--
                  (i) by striking ``or (C)'' in subparagraph (A), and
                  (ii) by striking subparagraph (C).
          (B) Paragraph (2) of section 6416(b) is amended by adding 
        ``or'' at the end of subparagraph (D), by striking subparagraph 
        (E), and by redesignating subparagraph (F) as subparagraph (E).
          (C) Subsection (b) of section 6416 is amended by striking 
        paragraph (4) and redesignating paragraphs (5) and (6) as 
        paragraphs (4) and (5), respectively.
          (D) Subsection (d) of section 4216 is amended by striking 
        ``section 6416(b)(5)'' and inserting ``section 6416(b)(4)''.
          (7) Paragraph (1) of section 9503(b) is amended by striking 
        subparagraphs (C) and (D) and by redesignating subparagraphs 
        (E) and (F) as subparagraphs (C) and (D), respectively.
          (8) Paragraph (5) of section 9503(b) is amended by striking 
        ``and (E)'' and inserting ``and (C)''.
          (9) The table of parts for subchapter A of chapter 32 is 
        amended by striking the item relating to part II.
  (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2000; except that the amendment made by subsection 
(b)(6) shall not apply to amounts received in the Treasury with respect 
to taxes imposed before such date.

SEC. 1106. REPEAL OF 4.3 CENT EXCISE TAX ON DIESEL FUEL AND GASOLINE 
                    USED IN TRAINS.

  (a) Diesel Fuel.--
          (1) In general.--Clause (ii) of section 4041(a)(1)(C) 
        (relating to rate of tax) is amended to read as follows:
                          ``(ii) Rate of tax on trains.--In the case of 
                        any sale for use, or use, of diesel fuel in a 
                        train, the rate of tax imposed by this 
                        paragraph shall be--
                                  ``(I) 5.55 cents per gallon after 
                                September 30, 1995, and before October 
                                1, 1999,
                                  ``(II) 4.3 cents per gallon after 
                                September 30, 1999, and before October 
                                1, 2000, and
                                  ``(III) zero after September 30, 
                                2000.''.
          (2) Conforming amendment.--Subparagraph (B) of section 
        6427(l)(3) is amended to read as follows:
                  ``(B) so much of the rate specified in section 
                4081(a)(2)(A) as does not exceed--
                          ``(i) 5.55 cents per gallon after September 
                        30, 1995, and before October 1, 1999,
                          ``(ii) 4.3 cents per gallon after September 
                        30, 1999, and before October 1, 2000, and
                          ``(iii) zero after September 30, 2000.''.
  (b) Gasoline.--Subparagraph (B) of section 6421(f)(3) is amended to 
read as follows:
                  ``(B) so much of the rate specified in section 
                4081(a)(2)(A) as does not exceed--
                          ``(i) 5.55 cents per gallon after September 
                        30, 1995, and before October 1, 1999,
                          ``(ii) 4.3 cents per gallon after September 
                        30, 1999, and before October 1, 2000, and
                          ``(iii) zero after September 30, 2000.''.
  (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 1107. DELAY IN EFFECTIVE DATE OF NEW REQUIREMENT FOR APPROVED 
                    DIESEL OR KEROSENE TERMINALS.

  Subsection (f) of section 1032 of the Taxpayer Relief Act of 1997 is 
amended to read as follows:
  ``(f) Effective Dates.--
          ``(1) Except as provided in paragraph (2), the amendments 
        made by this section shall take effect on July 1, 1998.
          ``(2) The amendment made by subsection (d) shall take effect 
        on July 1, 2000.''.

SEC. 1108. SIMPLIFIED FUEL TAX REFUND PROCEDURES.

  (a) In General.--Subparagraph (A) of section 6427(i)(2) is amended to 
read as follows:
                  ``(A) In general.--If, at the close of any quarter of 
                the taxable year of any person, at least $750 is 
                payable in the aggregate under subsections (a), (b), 
                (d), (h), (l), and (q) of this section and section 6421 
                to such person with respect to fuel used--
                          ``(i) during such quarter, or
                          ``(ii) any prior quarter during such taxable 
                        year for which no other claim has been filed,
                a claim may be filed under this section with respect to 
                such fuel.''.
  (b) Conforming Amendments.--
          (1) Subsection (i) of section 6427 is amended by striking 
        paragraph (4) and by redesignating paragraph (5) as paragraph 
        (4).
          (2) Paragraph (2) of section 6427(k) is amended to read as 
        follows:
          ``(2) Exception.--Paragraph (1) shall not apply to a payment 
        of a claim filed under paragraph (2), (3), or (4) of subsection 
        (i).''.
          (3) Paragraph (2) of section 6421(d) is amended to read as 
        follows:
          ``(2) Exception.--

                  ``For payments per quarter based on aggregate amounts 
payable under this section and section 6427, see section 6427(i)(2).''.

  (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 1998.

SEC. 1109. REPEAL OF NATIONAL RECREATIONAL TRAILS TRUST FUND.

  (a) In General.--Section 9511 (relating to National Recreational 
Trails Trust Fund) is repealed.
  (b) Conforming Amendments.--
          (1) Section 9503(c) is amended by striking paragraph (6).
          (2) The table of sections for subchapter A of chapter 98 is 
        amended by striking the item relating to section 9511.

                       I. SUMMARY AND BACKGROUND

                         A. Purpose and Summary

    The revenue title to H.R. 2400 (Title XI), as approved by 
the Committee on Ways and Means, extends the Highway Trust Fund 
excise taxes and certain exemptions, extends and modifies 
Highway Trust Fund and Aquatic Resources Trust Fund expenditure 
provisions, provides that no interest will be earned on Highway 
Trust Fund balances, transfers the General Fund portion of 
taxes on motorboat gasoline and special motor fuels and small-
engine gasoline to the Aquatic Resources Trust Fund, repeals 
the tire excise tax and the tax on railroad diesel fuel, delays 
for two years the requirement that terminals offer dyed diesel 
fuel and kerosene, simplifies fuels tax refund procedures, and 
repeals the National Recreational Trails Trust Fund.

                 B. Background and Need for Legislation

    The revenue title to H.R. 2400 provides revenues to finance 
the various highway, mass transit, and other programs financed 
through the Highway Trust Fund and the Aquatic Resources Trust 
Fund, as extended and modified in the authorizing provisions of 
the bill (Titles I-X).

                         C. Legislative History

    H.R. 2400, as amended (the ``Building Efficient Surface 
Transportation and Equity Act of 1998''), was reported by the 
House Committee on Transportation and Infrastructure on March 
25, 1998 (H. Rept. 105-467, Part 1), and was sequentially 
referred to the Committee on Ways and Means for a period ending 
not later than March 27, 1998. The revenue title to H.R. 2400 
(Title XI) was considered by the Committee on Ways and Means in 
a markup on March 26, 1998, and was ordered favorably reported 
by voice vote on March 26, 1998, with a quorum present.

                      II. EXPLANATION OF THE BILL

 A. Present-Law Highway Trust Fund, Aquatic Resources Trust Fund, and 
          National Recreational Trails Trust Fund Excise Taxes

Overview of highway excise taxes

    The current Highway Trust Fund (``Highway Fund'') excise 
taxes consist of:
          (1) taxes on gasoline, diesel fuel, kerosene, and 
        special motor fuels;
          (2) a retail sales tax imposed on trucks and trailers 
        having gross vehicle weights in excess of prescribed 
        thresholds;
          (3) a tax on manufacturers of tires designed for use 
        on heavy highway vehicles; and
          (4) an annual use tax imposed on trucks and tractors 
        having taxable gross weights in excess of prescribed 
        thresholds.
    Special motor fuels include liquefied natural gas 
(``LNG''), benzol, naphtha, liquefied petroleum gas (e.g., 
propane), natural gasoline, and any other liquid (e.g., ethanol 
and methanol) other than gasoline or diesel fuel. Compressed 
natural gas (``CNG'') also is subject to tax as a special motor 
fuel, but at a lower rate than other special motor fuels.
    With the exception of 4.3 cents per gallon of the motor 
fuels excise tax rates, these highway taxes are scheduled to 
expire after September 30, 1999.

Highway motor fuels taxes

            Highway motor fuels tax rates
    The current highway motor fuels excise tax rates are shown 
in Table 1.

  TABLE 1.--FEDERAL HIGHWAY TRUST FUND MOTOR FUELS EXCISE TAX RATES \1\ 
                    [Rates shown in cents per gallon]                   
------------------------------------------------------------------------
                                                           Highway trust
                      Highway fuel                         fund tax rate
                                                                \2\     
------------------------------------------------------------------------
Gasoline................................................            18.3
Diesel Fuel \3\.........................................            24.3
Special Motor Fuels Generally...........................        \4\ 18.3
CNG.....................................................         \5\ 4.3
------------------------------------------------------------------------
\1\ The rates shown include the 4.3-cents-per-gallon tax rate as        
  transferred to the Highway Fund beginning on October 1, 1997, pursuant
  to the Taxpayer Relief Act of 1997.                                   
\2\ Effective on October 1, 1997, an additional 0.1-cent-per-gallon rate
  applies on these motor fuels to finance the Leaking Underground       
  Storage Tank Trust Fund.                                              
\3\ Kerosene is taxed under the same rules as diesel fuel (as of July 1,
  1998).                                                                
\4\ The rate is 13.6 cents per gallon for propane, 11.9 cents per gallon
  for liquefied natural gas, and 9.15 cents per gallon for methanol fuel
  from natural gas, in each case based on the relative energy           
  equivalence of the fuel to gasoline.                                  
\5\ The statutory rate is 48.54 cents per thousand cubic feet (``MCF'').

            Administration of highway motor fuels excise taxes
    The gasoline, diesel fuel, and kerosene excise taxes are 
imposed on removal of the fuel from a refinery or on 
importation, unless the fuel is transferred by pipeline or 
barge to a registered terminal facility. In such a case, tax is 
imposed on removal of the fuel from the terminal facility 
(i.e., at the ``terminal rack'').1 A large majority 
of these taxes are imposed at the terminal rack. The special 
motor fuels tax, which accounts for a relatively small portion 
of motor fuels tax revenues, is imposed at the retail level. 
Present law imposes tax on all gasoline, diesel fuel, and 
kerosene that is removed from a terminal facility, except 
diesel fuel that is destined for nontaxable use (including a 
partially taxable use in an intercity bus or a train) and that 
is indelibly dyed in accordance with Treasury Department 
regulations. Effective July 1, 1998, as a condition of holding 
untaxed fuel, terminals that sell diesel fuels must offer both 
dyed and undyed fuel to their customers and terminals that sell 
kerosene must offer both dyed and undyed kerosene. The person 
holding an inventory position in the terminal at the time the 
fuel is removed from that facility (the ``position holder'') is 
liable for payment of the tax.
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    \1\ Gasoline and diesel motor fuel may be removed from a refinery 
without payment of tax only if the party removing the fuel and all 
subsequent parties before its removal from a terminal facility are 
registered with the Internal Revenue Service. If fuel is sold to an 
unregistered party before leaving the terminal facility, tax 
immediately is imposed. This tax does not preclude imposition of a 
second tax at the terminal rack; however, the second tax may be 
refunded upon request. This dual tax regime was enacted in 1990 in 
response to reports that fuel was being removed tax-free from terminals 
upon a claim that tax had already been paid, when in fact it had not 
been paid.
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            Highway fuels tax exemptions
    Present law includes numerous exemptions (including partial 
exemptions for specified uses of taxable fuels or for specified 
fuels) typically for governments or for uses not involving use 
of the highway system. Because the gasoline and diesel fuel 
taxes generally are imposed before the end use of the fuel is 
known, many of these exemptions are realized through refunds to 
end users of tax paid by a party that processed the fuel 
earlier in the distribution chain. These exempt uses and fuels 
include:
          (1) use in State and local government and nonprofit 
        educational organization vehicles;
          (2) use in buses engaged in transporting students and 
        employees of schools;
          (3) use in private local mass transit buses having a 
        seating capacity of at least 20 adults (not including 
        the driver) when the buses operate under contract with 
        (or are subsidized by) a State or local governmental 
        unit;
          (4) use in private intercity buses serving the 
        general public along scheduled routes (totally exempt 
        from the gasoline tax and exempt from 17 cents per 
        gallon of the diesel tax); and
          (5) use in off-highway uses such as farming.
    LNG, propane, and methanol derived from natural gas are 
subject to reduced tax rates based on the energy equivalence of 
these fuels to gasoline.
    Ethanol and methanol derived from renewable sources (e.g., 
biomass) are eligible for income tax benefits (the ``alcohol 
fuels credit'') equal to 54 cents per gallon (ethanol) and 60 
cents per gallon (methanol).2 In addition, small 
ethanol producers are eligible for a separate
---------------------------------------------------------------------------
    \2\ The alcohol fuels credit is scheduled to expire after December 
31, 2000, or earlier, if the Highway Fund excise taxes actually expire 
before that date.
---------------------------------------------------------------------------
10-cents-per-gallon credit.3 The 54-cents-per-gallon 
ethanol and 60-cents-per-gallon renewable source methanol tax 
credits may be claimed through reduced excise taxes paid on 
gasoline and special motor fuels as well as through credits 
against income tax.4
---------------------------------------------------------------------------
    \3\ The small ethanol producer credit is available on up to 15 
million gallons of ethanol produced by persons whose annual production 
capacity does not exceed 30 million gallons.
    \4\ Authority to claim the ethanol and renewable source methanol 
tax benefits through excise tax reductions are scheduled to expire 
after September 30, 2000 (or earlier, if the underlying excise taxes 
actually expire before September 30, 2000).
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                   Non-fuel Highway Fund excise taxes

    In addition to the highway motor fuels excise tax revenues, 
the Highway Fund receives revenues produced by three excise 
taxes imposed exclusively on heavy highway vehicles or tires. 
These taxes are:
    (1) A 12-percent excise tax imposed on the first retail 
sale of highway vehicles, tractors, and trailers (generally, 
trucks having a gross vehicle weight in excess of 33,000 pounds 
and trailers having such a weight in excess of 26,000 pounds);
    (2) An excise tax imposed at graduated rates on highway 
tires weighing more than 40 pounds; and
    (3) An annual use tax imposed on highway vehicles having a 
taxable gross weight of 55,000 pounds or more. (The maximum 
rate for this tax is $550 per year, imposed on vehicles having 
a taxable gross weight over 75,000 pounds.)

  Aquatic Resources Trust Fund and National Recreational Trails Trust 
                               Fund taxes

    Gasoline and special motor fuels used in motorboats and in 
certain off-highway recreational vehicles and in small engines 
are subject to tax in the same manner and at the same rates as 
gasoline and special motor fuels used in highway vehicles. Of 
the tax revenues from these uses, 6.8 cents per gallon is 
retained in the General Fund; the remaining 11.5 cents per 
gallon is deposited in the Aquatic Resources Trust Fund 
(``Aquatic Fund'') (motorboat gasoline and special motor fuels 
and small-engine gasoline), the Land and Water Conservation 
Fund (``Land and Water Fund'') ($1 million of motorboat fuels 
tax revenues), and the National Recreational Trails Trust Fund 
(the ``Trails Fund'') (fuels used in off-highway recreational 
vehicles).5 Transfers to these Funds are scheduled 
to terminate after September 30, 1998. Transfers to the Trails 
Fund are contingent on appropriations occurring from that Trust 
Fund; to date, no appropriations have been enacted.
---------------------------------------------------------------------------
    \5\ Nonhighway recreational fuels taxes are the taxes imposed on 
(1) fuel used in vehicles and equipment on recreational trails or back 
country terrain or (2) fuel used in camp stores and other outdoor 
recreational equipment. Such revenues do not include small-engine 
gasoline tax revenues, which are transferred to the Aquatic Fund. 
``Small-engine'' fuel means gasoline used as a fuel in the nonbusiness 
use of small-engine outdoor power equipment (to the extent of the 
Highway Fund tax rate).
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   B. Highway Trust Fund, Aquatic Resources Trust Fund, and National 
         Recreational Trails Trust Fund Expenditure Provisions

                       1. Present-law provisions

In general

    Dedication of excise tax revenues to the Highway Fund and 
expenditures from the Highway Fund are governed by provisions 
of the Code (sec. 9503).6 Under present law, 
revenues from the highway excise taxes, as imposed through 
September 30, 1999, are dedicated to the Highway Fund. Also, 
the Highway Fund earns interest on its cash balances each year 
from investments in Treasury securities (sec. 9602). Further, 
the Code authorizes expenditures (subject to appropriations) 
from the Highway Fund through September 30, 1998, for the 
purposes provided in authorizing legislation, as in effect on 
the date of enactment of Public Law 105-130.
---------------------------------------------------------------------------
    \6\ The Highway Fund statutory provisions were placed in the 
Internal Revenue Code in 1982.
---------------------------------------------------------------------------
    Highway Fund provisions also govern transfer of 11.5 cents 
per gallon of the revenues from the tax imposed on gasoline 
used in motorboats, small engines, and off-highway recreational 
vehicles. Those revenues are transferred from the Highway Fund 
(after being received from the General Fund) to the Aquatic 
Fund, the Land and Water Fund, and the Trails Fund, 
respectively, through September 30, 1998.

Present-law Highway Fund expenditure purposes

            Overview
    The Highway Fund is divided into two accounts: a Highway 
Account and a Mass Transit Account, each of which is the 
funding source for specific programs.
    Highway and Mass Transit Account expenditure purposes have 
been revised with passage of each authorization Act enacted 
since establishment of the Highway Fund in 1956. In general, 
expenditures authorized under those Acts (as the Acts were in 
effect on the date of enactment of the most recent such 
authorizing Act) are approved Highway Fund 
expenditurepurposes.7 Authority to make expenditures from 
the Highway Fund is currently scheduled to expire after September 30, 
1998. Thus, no Highway Fund monies may be spent for a purpose not 
approved by the tax-writing committees of Congress. Further, no Highway 
Fund expenditures may occur after September 30, 1998, without such 
approval.
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    \7\ The authorizing Acts which currently are referenced in the 
Highway Fund (for the Highway Account) are the Highway Revenue Act of 
1956, Titles I and II of the Surface Transportation Assistance Act of 
1982, the Surface Transportation and Uniform Relocation Act of 1987, 
the Intermodal Surface Transportation Efficiency Act of 1991, and 
Public Law 105-130.
---------------------------------------------------------------------------
    Highway Fund spending further is limited by two anti-
deficit provisions, which are internal to the Highway Fund. The 
first of these provisions limits the unfunded Highway Account 
authorizations at the end of any fiscal year to amounts not 
exceeding the unobligated balance plus revenues projected to be 
collected for that Account by the dedicated excise taxes during 
the two following fiscal years. The second anti-deficit 
provision similarly limits unfunded Mass Transit Account 
authorizations to the dedicated excise taxes expected to be 
collected during the next fiscal year. Because of these two 
provisions, the highway transportation excise taxes typically 
are scheduled to expire at least two years after current 
authorizing Acts. If either of these provisions is violated, 
spending for specified programs funded by the relevant Trust 
Fund Account is reduced proportionately, in much the same 
manner as would occur under a general Budget Act sequester.
            Highway Account
    The Highway Fund's Highway Account receives revenues from 
all non-fuel highway transportation excise taxes and revenues 
from all but 2.85 cents per gallon 8 (2.0 cents 
prior to October 1, 1997) of the highway motor fuels excise 
taxes. Programs financed from the Highway Account include 
expenditures for the following general purposes:
---------------------------------------------------------------------------
    \8\ A technical correction (to 2.86 cents per gallon) is included 
in Title VI (``Tax Technical Corrections Act of 1997'') of H.R. 2676 as 
passed by the House on November 5, 1997.
---------------------------------------------------------------------------
          (1) Federal-aid highways, including the Interstate 
        System, National Highway System, forest and public 
        lands highways, scenic highways, and certain overseas 
        highways (includes construction and planning and 
        traffic control projects);
          (2) Interstate highway resurfacing and repair;
          (3) Bridge replacement and repair;
          (4) Surface transportation programs;
          (5) Congestion mitigation and air quality 
        improvement;
          (6) Highway safety programs and research and 
        development, including a share of the cost of National 
        Highway Traffic Safety Administration (``NHTSA'') 
        programs and university research centers;
          (7) Transportation research, technology, and 
        training;
          (8) Intermodal urban projects and mass transit 
        (including carpool and vanpool) grants;
          (9) Intelligent transportation systems;
          (10) Transportation enhancements (including 
        transportation-related historic restoration, scenic 
        beautification, removal of billboards);
          (11) Construction of ferry boats and ferry terminal 
        facilities;
          (12) Certain administrative costs of the Federal 
        Highway Administration and NHTSA;
          (13) Grants to the Internal Revenue Service for motor 
        fuels tax and highway use tax enforcement activities; 
        and
          (14) Certain other highway and transit-related 
        programs (including bicycle pathways and pedestrian 
        walkways).
            Mass transit account
    The Highway Fund's Mass Transit Account receives revenues 
equivalent to 2.85 cents per gallon 9 (2.0 cents 
prior to October 1, 1997) of the highway motor fuels excise 
taxes. Mass Transit Account monies are available through 
September 30, 1998, for capital and capital-related 
expenditures under sections 5338(a)(1) and (b)(1) of Title 49, 
United States Code, or the Intermodal Surface Transportation 
Efficiency Act of 1991.
---------------------------------------------------------------------------
    \9\ See footnote 8, supra.
---------------------------------------------------------------------------
    The capital and capital-related mass transit programs 
include new rail or busway facilities, rail rolling stock, 
buses, improvement and maintenance of existing rail and other 
fixed guideway systems, and upgrading of bus systems.

Transfers from Highway Fund to Aquatic Fund and to Land and Water Fund

    Transfers of recreational motorboat gasoline and special 
fuels tax revenues from the Highway Fund to the Boat Safety 
Account of the Aquatic Fund currently are limited to a maximum 
of $70 million per fiscal year. Any excess motorboat fuels tax 
revenues are transferred to the Land and Water Fund ($1 million 
per year) and to the Sport Fish Restoration Account of the 
Aquatic Fund.10 The authority to transfer revenues 
to the Aquatic Fund is scheduled to expire after September 30, 
1998.
---------------------------------------------------------------------------
    \10\ The maximum balance that may accumulate in the Boat Safety 
Account is $70 million.
---------------------------------------------------------------------------
    Expenditures from the Boat Safety Account and Land and 
Water Fund are subject to appropriation Acts. The Sport Fish 
Restoration Account has a permanent appropriation, and all 
moneys transferred to that Account are automatically 
appropriated in the fiscal year following the fiscal year of 
receipt.
    Expenditures are authorized from the Boat Safety Account, 
as follows:
          (1) One-half of the amount allocated to the Account 
        are for State boating safety programs; and
          (2) One-half of the amount allocated to the Account 
        are for operating expenses of the Coast Guard to defray 
        the cost of services provided for recreational boating 
        safety.

Transfers from Highway Fund to the Trails Fund

    The Trails Fund was established in the Intermodal Surface 
Transportation Act of 1991 (``1991 Act''). Amounts are 
authorized to be transferred from the Highway Fund into the 
Trails Fund equivalent to revenues received from ``nonhighway 
recreational fuel taxes'' (not to exceed $30 million per year 
under an obligational ceiling set in the 1991 Act), subject to 
amounts actually being appropriated to the Trails Fund. No 
monies have been transferred to date, since no amounts have 
been appropriated to the Trails Fund. The authority to transfer 
revenues to the Trails Fund is scheduled to expire after 
September 30, 1998.
    Nonhighway recreational fuels taxes are the taxes imposed 
(to the extent attributable to the 11.5 cents per gallon rate) 
on (1) fuel used in vehicles and equipment on recreational 
trails or back country terrain, or (2) fuel used in camp stoves 
and other outdoor recreational equipment. Such revenues do not 
include small-engine gasoline tax revenues which are 
transferred to the Aquatic Fund.
    Expenditures are authorized from the Trails Fund, subject 
to appropriations, for allocations to States for use on trails 
and trail-related projects as set forth in the 1991 Act. 
Authorized uses include (1) acquisition of new trails and 
access areas, (2) maintenance and restoration of existing 
trails, (3) State environmental protection education programs, 
and (4) program administrative costs.

     2. summary of h.r. 2400 trust fund expenditure authorizations

    H.R. 2400, as reported by the Committee on Transportation 
and Infrastructure (``Transportation and Infrastructure'') 
extends authorizations for Highway Fund expenditures for fiscal 
years 1998-2003. H.R. 2400 also modifies the expenditure 
purposes of the Highway Fund and the Boat Safety Account as 
described below. As reported by Transportation and 
Infrastructure, H.R. 2400 contains no revenue provisions or 
other Code amendments.11
---------------------------------------------------------------------------
    \11\ See below for mention of the bill's authorization of amounts 
from the Highway Account for grants to the Internal Revenue Service for 
motor fuel tax evasion projects and an automated motor fuel reporting 
system.
---------------------------------------------------------------------------

Highway account authorizations under H.R. 2400

    H.R. 2400, as reported by Transportation and 
Infrastructure, provides authorizations totaling $181 billion 
for the fiscal year period 1998-2003 from the Highway Account 
of the Highway Fund.
    New Highway Account expenditure programs in the bill 
include the following:

------------------------------------------------------------------------
                                                             1998-2003  
                         Program                             total  ($  
                                                             millions)  
------------------------------------------------------------------------
Recreational trails program 12..........................             270
Automated motor fuel reporting system...................          (\13\)
Highway safety data incentive grants....................              76
------------------------------------------------------------------------

    The bill extends for fiscal years 1998-2003 the current 
authorization from the Highway Account for funds to the 
Internal Revenue Service and the States for highway use tax 
evasion projects. In addition, the bill authorizes funding an 
automated motor fuels reporting system from the Highway 
Account.
---------------------------------------------------------------------------
    \12\ A ``recreational trail'' is a thoroughfare or track across 
land or snow used for recreational purposes, such as pedestrian 
activities (jogging, hiking, backpacking), skating or skateboarding, 
equestrian activities, cross-country skiing, bicycling, trail biking, 
snowmobiling, aquatic activities, and motorized vehicular activities 
(including all-terrain vehicles, motorcycles, snowmobiles, off-road 
vehicles). Eligible expenses include costs of State administration of 
the program and educational programs to promote trail safety and 
environmental protection. Some amounts were authorized for recreational 
trails under the National Highway Systems Designation Act of 1995, 
which was subsequent to the 1991 Act authorizations.
    \13\ Such amounts as may be determined, which are included in the 
total of $55 million for this program and the existing motor fuels tax 
enforcement program.
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Mass transit account authorizations under H.R. 2400

    H.R. 2400, as reported by Transportation and 
Infrastructure, provides a total of $35.8 billion for fiscal 
years 1998-2003 in authorizations from the Mass Transit Account 
of the Highway Fund for mass transit-related programs.
    New purposes authorized from the Mass Transit Account under 
the bill include: (1) operating expenses for rural and small 
urban mass transit systems and (2) modification of the 
definition of capital-related expenses to include preventive 
maintenance.14 There is a limit of $400 million 
authorized per year for these new expenditure purposes.
---------------------------------------------------------------------------
    \14\ ``Preventive maintenance'' is currently eligible under the 
Highway Account for highways and bridges.
---------------------------------------------------------------------------

Boat safety account provisions under H.R. 2400

    H.R. 2400, as reported by Transportation and 
Infrastructure, amends the authorizing statute for the Boat 
Safety Account expenditure purposes to provide that: (1) up to 
2 percent of the amount is available to pay the Department of 
Transportation costs of administering the State boating safety 
programs; (2) up to 2 percent is available to ensure compliance 
with chapter 43, U.S.C. 46 (Coast Guard inspection and 
regulation of recreational vessels); and (3) up to 3 percent is 
available to establish, operate, and maintain aids to 
navigation that promote primarily recreational boating safety. 
The Secretary of Transportation is to conduct and report to the 
Congress the findings of a comprehensive survey of recreational 
boating in the United States, reporting by December 1, 1999 and 
every fifth year thereafter. In addition, the bill provides 
that of the amount allocated for State recreational boating 
safety programs, 5 percent of any amount over $35 million per 
year is to be used only for public access facilities for 
transient nontrailerable recreational vessels. In effect, the 
bill provides that the balance of any amounts transferred to 
the Boat Safety Account is to go for State boating safety 
programs rather than to the Coast Guard. Further, the bill 
anticipates modification of the existing caps on transfers of 
motorboat fuels tax revenues to the Boat Safety 
Account.15
---------------------------------------------------------------------------
    \15\ See the changes in the revenue title amendment (sec. 1104 of 
the bill) to the Boat Safety Account transfers and balance limit.
---------------------------------------------------------------------------

Change in Trust Fund budget treatment

    H.R. 2400, as reported by Transportation and 
Infrastructure, includes language to treat expenditures from 
and receipts to the Highway Fund as ``off-budget.'' The 
language is essentially the same as the legislation to take the 
Social Security Trust Fund off-budget in 1990.

                         C. Reasons for Change

    H.R. 2400, as reported by Transportation and 
Infrastructure, authorizes expenditures (through contract 
authority and discretionary spending subject to appropriations) 
for Highway Fund and Aquatic Fund programs during fiscal years 
1998 through 2003. H.R. 2400 further provides that Highway Fund 
spending and revenues are not considered for certain budget 
calculations. The excise taxes which constitute a dedicated 
revenue source for these programs currently are scheduled to 
expire after September 30, 1999. Thus, absent an extension of 
these taxes, contemplated highway, mass transit, and boat 
safety programs will not be funded. The Committee revenue title 
does not extend the present-law scheduled expiration date of 
the tax subsidies for ethanol and renewable-source methanol 
(i.e., present law is retained without change).
    Because excise taxes dedicated to trust funds (and 
exemptions therefrom) are assumed to be permanent under 
Congressional budget scorekeeping rules, the extension of the 
highway excise taxes without affirmative extension of the 
alcohol fuels tax subsidies results in increased revenues 
relative to the budget baseline. Accordingly, the bill includes 
appropriate tax relief provisions. The Committee believes that 
repeal of the current excise tax on heavy tires is appropriate 
tax policy because the burdens associated with complying with 
and enforcing this tax are large compared to the relatively 
small revenues it produces for the Federal Government. The rail 
fuel tax is repealed because the Committee believes it is 
inappropriate for railroads to pay a fuel tax for deficit 
reduction when most other transportation modes pay taxes only 
to support trust fund programs that benefit those industries. 
Further, the Committee believes that it is appropriate to 
transfer the full amount of fuels taxes imposed on motorboats 
and small engines to the relevant Trust Fund accounts; 
therefore, the Committee determined that the 6.8-cents-per-
gallon general fund portion of fuels taxes imposed on 
motorboats and small engines should be deposited in the Aquatic 
Fund for boating safety and environmental programs. Finally, 
the Committee concluded that a separate Trails Fund is not 
necessary, because no revenues have been deposited in the 
present Trust Fund since its inception and because similar 
expenditure programs are financed from the Highway Fund under 
the bill.

                      D. Explanation of Provisions

    1. Extension of existing Highway Fund excise taxes and certain 
                   exemptions (sec. 1102 of the bill)

    The scheduled expiration date of the current Highway Fund 
motor fuels taxes and the retail sale and annual use taxes on 
heavy highway vehicles, and most exemptions from those taxes, 
is extended for six years, October 1, 1999 through September 
30, 2005. The excise tax on tires is extended through September 
30, 2000, after which date the tax is repealed. (See below.) 
The present-law tax benefits for ethanol and renewable-source 
methanol are not extended. Thus, those benefits will expire as 
currently scheduled, after September 30, 2000, and December 31, 
2000. Revenues from the excise taxes and exemptions extended 
under the bill will continue to be transferred to the Highway 
Fund.

  2. Extension and modification of Highway Fund expenditure authority 
                        (sec. 1103 of the bill)

    The current September 30, 1998, expiration date of 
authority to spend monies from the Highway Fund is extended 
through September 30, 2003, and the Code provisions governing 
purposes for which monies in the Highway Fund may be spent are 
updated to include the purposes provided in H.R. 2400, as 
enacted.
    Provisions are incorporated into the Highway Fund 
clarifying that expenditures from the Highway Fund may occur 
only as provided in the Code. Clarification further is provided 
that the expiration date for expenditures allowed from the 
Highway Fund does not preclude disbursements to liquidate 
contracts which are validly entered into before that date. 
Expenditures for contracts entered into or for amounts 
otherwise obligated after that date (or for other non-contract 
authority purposes permitted by non-Code provisions) are not 
permitted, notwithstanding the provisions of any subsequently 
enacted authorization or appropriations legislation. If any 
such subsequent non-tax legislation provides for expenditures 
not provided for in the Code, or if any executive agency 
authorizes such expenditures in contravention of the Code 
restrictions, excise tax revenues otherwise to be deposited in 
the Highway Fund will be retained in the General Fund beginning 
on the date of enactment of such legislation or the date of 
such executive agency action.
    The Committee is aware that one of the Highway Fund 
expenditure purposes which it approves in the bill is a 
provision of contract authority for monies to be transferred to 
the Internal Revenue Service (the ``IRS'') for acquisition and 
operation of a computerized motor fuels tracking system. This 
system (commonly referred to as the Excise Fuel Information 
Reporting System, or ``ExFIRS'') would track all deliveries of 
motor fuel into, and all removals of such fuel from, every 
registered fuels terminal facility in the United States using 
information reported electronically by the terminals. The 
Senate highway bill provides for similar expenditures, except 
the funds would not be provided pursuant to contract authority. 
The Highway Fund has authorized tax compliance expenditures for 
several years; however, those authorizations alsowere not 
contract authority. As a result of overall discretionary spending 
limits, the Department of Transportation (``DOT'') either has not 
requested appropriations of revenues that would go the IRS or has 
sought to impose restrictions on the transfer that in substance would 
give DOT control over the excise tax collection system. The 
Transportation and Infrastructure provisions of H.R. 2400 provide for 
transfer of these monies without DOT restrictions on IRS tax compliance 
efforts. The Committee expresses its strong intent that the conference 
agreement on H.R. 2400 include contract authority for the financing of 
the ExFIRS system without DOT restrictions on IRS compliance efforts.
    The Federal highway motor fuels excise tax system has been 
plagued by evasion throughout the past decade. The Committee 
has approved provisions restructuring the motor fuels taxes on 
numerous occasions to limit evasion opportunities. These 
efforts have been successful as evidenced by the approximately 
$1 billion in increased diesel fuel tax revenues from improved 
compliance in the first year after changes made in 1993. The 
computerized tracking system provided for under the 
Transportation and Infrastructure provisions of H.R. 2400 
provides needed funds to expand efforts to eliminate motor 
fuels tax evasion. These efforts are supported both by 
taxpayers and tax collectors. The Committee believes that a 
system supported by all parties which will increase tax 
collections through improved compliance should be funded in the 
bill.
    Provisions governing administration of the Highway Fund.--
The Code rules providing for investment of Highway Fund 
balances in interest-bearing Treasury securities are modified 
to provide that no interest will be credited to the Highway 
Fund after September 30, 1998. Further, on October 1, 1998, the 
cash balance of the Highway Account in excess of $8 billion and 
the cash balance of the Mass Transit Account in excess of $5.5 
billion will be transferred from the Highway Fund to the 
General Fund.
    The anti-deficit provisions of the Mass Transit Account are 
conformed to those of the Highway Account so that permitted 
obligations will be determined by reference to two years of 
projected revenues.
    Highway Fund technical corrections and ``deadwood'' 
repeal.--Two technical corrections to the Taxpayer Relief Act 
of 1997 (the ``1997 Act'') are included:
    (1) Clarification is provided that excise tax revenues 
attributable to LNG, CNG, propane, and methanol from natural 
gas (all of which are subject to reduced energy equivalent 
rates, as indicated in Table 1 are divided between the Highway 
and Mass Transit Accounts of the Highway Fund in the same 
proportions as gasoline tax revenues are divided between those 
two accounts.
    (2) Clarification is provided that the amount of gasoline 
and diesel fuel tax revenues deposited into the Mass Transit 
Account is 2.86 cents per gallon (rather than 2.85 cents per 
gallon as erroneously provided in the 1997 Act).
    A provision of the 1997 Act providing that (1) the transfer 
of additional motor fuels tax revenues to the Highway Fund and 
(2) a one-time adjustment to fuels tax deposit requirements do 
not affect the operation of certain provisions of the 1991 
highway legislation is repealed as deadwood.

    3. Provisions affecting the Aquatic Fund (sec. 1104 of the bill)

    Extension of revenue transfers; increase in tax rate 
transferred.--Transfer of motorboat gasoline and special motor 
fuels taxes to the Boat Safety Account of the Aquatic Fund and 
of small-engine gasoline taxes to the Wetlands sub-account of 
the Aquatic Fund is extended through September 30, 2003. In 
addition, the 6.8-cents-per-gallon portion of the tax on 
gasoline and special motor fuels used in motorboats and on 
small-engine gasoline that currently is retained in the General 
Fund is transferred to the Aquatic Fund, effective generally 
for revenues from taxes imposed after September 30, 2000. This 
provision is phased-in, with the transfer to the Aquatic Fund 
of 3.4 cents per gallon of the revenues from taxes imposed 
during the period October 1, 1999 through September 30, 2000.
    Extension and modification of expenditure authority.--
Expenditure authority for the Boat Safety Account of the 
Aquatic Fund is extended through September 30, 2003. The 
expenditure purposes of the Aquatic Fund are conformed to those 
in effect as of the date of enactment of H.R. 2400. Also, the 
provisions governing amounts transferred to the Boat Safety 
Account are modified to conform to expenditure levels 
anticipated in H.R. 2400. Transfers of motorboat fuels tax 
revenues to the Boat Safety Account are changed to equal one-
half of such revenues each fiscal year, with a limit on the 
balance in that Account equal to no more than one-half of the 
prior fiscal year's motorboat fuels tax revenues.
    Provisions identical to those described above for the 
Highway Fund are incorporated into the Aquatic Fund clarifying 
that expenditures from the Aquatic Fund may occur only as 
provided in the Code.

 4. Repeal of excise tax on heavy vehicle tires (sec. 1105 of the bill)

    The excise tax on tires that exceed prescribed weight 
thresholds is repealed, effective on October 1, 2000.

5. Repeal of 4.3-cents-per-gallon excise tax on rail fuel (sec. 1106 of 
                               the bill)

    The 4.3-cents-per-gallon General Fund excise tax imposed on 
fuel used in trains is repealed, effective on October 1, 2000.

6. Delay in effective date of new requirement for approved diesel fuel 
             or kerosene terminals (sec. 1107 of the bill)

    A present-law provision requiring motor fuels terminal 
facilities, as a condition of storingnon-tax-paid fuel, to 
offer to their customers both undyed and dyed fuel if they distribute 
diesel fuel or kerosene is delayed for two years, to July 1, 2000. This 
provision does not affect the general rules relating to imposition of 
tax on diesel fuel and kerosene.
    The Committee continues to support the diesel fuel and 
kerosene tax compliance provisions, as enacted in 1993 and 1997 
respectively. Notwithstanding this general support, the 
Committee believes that the delay in the terminal registration 
requirement described above is appropriate to allow it to 
evaluate market responses to these tax compliance measures. 
Industry representatives have assured the Committee that, where 
demand for untaxed, dyed diesel fuel or kerosene exists, fuel 
will be made available without a Federal requirement. The 
Committee intends to monitor market responses in this area to 
ensure that untaxed, dyed fuel is made available (either by 
manual dyeing or through computerized dye injection processes) 
where consumers require the fuel.

    7. Simplify fuels tax refund procedures (sec. 1108 of the bill)

    Consumers that use previously taxed highway motor fuels in 
a nontaxable use may file claims for refunds with the Internal 
Revenue Service. In general, claims for the first three 
calendar quarters may be filed quarterly if the tax to be 
refunded exceeds prescribed thresholds.16 Consumers 
not satisfying the prescribed dollar thresholds, and all fourth 
quarter refunds, are claimed through income tax credits.
---------------------------------------------------------------------------
    \16\ Under present law, gasoline tax refund claims may be filed 
quarterly for any of the first three calendar quarters if the quarterly 
refund claim equals or exceeds $1,000. Diesel fuel tax refund claims 
for the first three calendar quarters may be filed in any quarter in 
which the aggregate diesel fuel tax refund for the year equals $750 or 
more.
---------------------------------------------------------------------------
    The amendment consolidates the fuels tax refund thresholds 
to allow quarterly claims to be filed once an aggregate year-
to-date refund of $750 or more for all motor fuels is due. 
Additionally, fourth quarter refund claims are allowed under 
the same rules as those applicable to the first three calendar 
quarters. The provision is effective for claims filed after 
September 30, 1998.

            8. Repeal of Trails Fund (sec. 1109 of the bill)

    The Code provisions establishing the National Recreational 
Trails Trust Fund (the ``Trails Fund'') and providing for 
transfer of revenues to the Trails Fund is repealed, effective 
on the date of the bill's enactment. (As described above, no 
transfers have occurred to date because transfers are 
contingent on appropriations being enacted, and no funds have 
been appropriated from the Trails Fund.) Under H.R. 2400, 
Highway Fund expenditures are authorized for similar purposes 
to those of the Trails Fund.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 2(l)(2)(B) of rule XI of the 
Rules of the House of Representatives, the following statements 
are made concerning the votes of the Committee on Ways and 
Means in its consideration of the bill H.R. 2400.

Vote on motion to report

    The Committee amendment to H.R. 2400 (Title XI) was 
approved by voice vote, with a quorum present.

Vote on amendments

    An amendment by Mr. Levin to add at the end of Title XI a 
new section 1110, to extend benefits for alcohol blended fuels, 
was defeated by a roll call vote of 11 yeas to 22 nays. The 
vote was as follows:

----------------------------------------------------------------------------------------------------------------
            Representatives                 Yea       Nay            Representatives             Yea       Nay  
----------------------------------------------------------------------------------------------------------------
Mr. Archer.............................  ........        X   Mr. Rangel.....................  ........  ........
Mr. Crane..............................  ........        X   Mr. Stark......................  ........        X 
Mr. Thomas.............................  ........        X   Mr. Matsui.....................        X   ........
Mr. Shaw...............................  ........        X   Mrs. Kennelly..................  ........        X 
Mrs. Johnson...........................  ........        X   Mr. Coyne......................  ........        X 
Mr. Bunning............................        X   ........  Mr. Levin......................        X   ........
Mr. Houghton...........................  ........  ........  Mr. Cardin.....................  ........  ........
Mr. Herger.............................  ........        X   Mr. McDermott..................  ........  ........
Mr. McCrery............................  ........        X   Mr. Kleczka....................  ........        X 
Mr. Camp...............................        X   ........  Mr. Lewis......................  ........        X 
Mr. Ramstad............................  ........        X   Mr. Neal.......................  ........        X 
Mr. Nussle.............................        X   ........  Mr. McNulty....................        X   ........
Mr. Johnson............................  ........        X   Mr. Jefferson..................  ........  ........
Ms. Dunn...............................  ........        X   Mr. Tanner.....................        X   ........
Mr. Collins............................  ........        X   Mr. Becerra....................  ........  ........
Mr. Portman............................  ........        X   Mrs. Thurman...................        X   ........
Mr. English............................  ........        X                                                      
Mr. Ensign.............................  ........        X                                                      
Mr. Christensen........................        X   ........                                                     
Mr. Watkins............................  ........        X                                                      
Mr. Hayworth...........................  ........        X                                                      
Mr. Weller.............................        X   ........                                                     
Mr. Hulshof............................        X   ........                                                     
----------------------------------------------------------------------------------------------------------------

                     IV. BUDGET EFFECTS OF THE BILL

             A. Committee Estimates of Budgetary Estimates

    In compliance with clause 7(a) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the budget effects of Title XI of H.R. 2400, as 
reported.
    Title XI of the bill is estimated to have the following 
effects on the budget for fiscal years 1998-2003:

  ESTIMATED BUDGET EFFECTS OF A COMMITTEE AMENDMENT RELATING TO AN EXTENSION OF HIGHWAY TRUST FUND EXCISE TAXES 
                         AND RELATED TRUST FUND PROVISIONS (REVENUE TITLE TO H.R. 2400)                         
                                 [Fiscal years 1998-2003, in million of dollars]                                
----------------------------------------------------------------------------------------------------------------
                                                                                                          1998- 
           Provision                Effective        1998     1999     2000     2001     2002     2003     2003 
----------------------------------------------------------------------------------------------------------------
1. Extend Highway Trust Fund    10/1/99..........  .......  .......  .......      385      515      526    1,426
 excise taxes and certain                                                                                       
 exemptions through 9/30/05                                                                                     
 \1\.                                                                                                           
2. Extend and modify Highway    10/1/98..........  .......  .......                                             
 Trust Fund expenditure                                                                                         
 authority through 9/30/03.                                                                                     
(2) No Revenue Effect           .................  .......                                                      
3. Provide that no interest     10/1/98..........  .......                                                      
 will be earned on Highway                                                                                      
 Trust Fund balances \2\.                                                                                       
(4) No Revenue or Outlay        .................                                                               
 Effect                                                                                                         
4. Extend and modify Aquatic    10/1/98..........  .......        2  .......       -2      -12      -20      -32
 Resources Trust Fund                                                                                           
 expenditure authority through                                                                                  
 9/30/03.\3\                                                                                                    
5. Transfer 3.4 cents/gallon    tia 9/30/99......  .......  .......  .......      -18      -56      -87     -161
 of the General Fund portion                                                                                    
 of the tax on motorboat and                                                                                    
 small-engine gasoline to the                                                                                   
 Aquatic Resources Trust Fund                                                                                   
 (6.8 cents/gallon after 9/30/                                                                                  
 00).\3\                                                                                                        
6. Repeal excise tax on heavy   10/1/00..........  .......  .......  .......     -291     -299     -303     -893
 truck tires.                                                                                                   
7. Repeal 4.3 cents/gallon tax  10/1/00..........  .......  .......  .......      -96     -100     -102     -298
 on railroad diesel fuel.                                                                                       
8. Delay for 2 years the        DOE..............  .......                                                      
 requirement that terminals                                                                                     
 offer dyed diesel fuel and                                                                                     
 kerosene.                                                                                                      
(4) Negligible Revenue Effect   .................                                                               
9. Simplify fuels tax refund    10/1/98..........  .......       -5    (\4\)    (\4\)    (\4\)    (\4\)       -5
 procedures.                                                                                                    
10. Repeal National             DOE..............  .......                                                      
 Recreational Trails Trust                                                                                      
 Fund.                                                                                                          
(4) No Revenue or Outlay        .................                                                               
 Effect                                                                                                         
                                                  --------------------------------------------------------------
      Net Total...............  .................  .......       -3    (\4\)      -22       48       14       37
----------------------------------------------------------------------------------------------------------------
\1\ The Congressional Budget Office revenue baseline assumes that the Highway Trust Fund excise taxes and       
  exemptions to the taxes will remain in effect throughout the budget window. Thus, the extension of the excise 
  taxes and certain exemptions is scored as having no revenue effect. The table shows the net budget effect of  
  retaining the present-law expiration dates for the alcohol fuels tax subsidies. For fiscal years 2001 through 
  2003, Federal revenues increased by a total of $1,537 million, and Federal outlays increase by a total of $111
  million, for a net gain of $1,426 million. (Outlay estimate provided by the Congressional Budget Office.)     
\2\ The Congressional Budget Office has determined that this provision will have no effect on Federal outlays.  
\3\ Positive numbers indicate that Federal outlays will decline, and negative numbers indicate that Federal     
  outlays will increase. Estimate provided by the Congressional Budget Office.                                  
\4\ Loss of less than $500,000.                                                                                 
                                                                                                                
 Legend for ``Effective'' column: DOE=date of enactment; tia=taxes imposed after.                               
                                                                                                                
 Note.--Details may not add to totals due to rounding.                                                          
                                                                                                                
 Source: Joint Committee on Taxation.                                                                           

    B. Statement Regarding New Budget Authority and Tax Expenditures

                            Budget authority

    In compliance with subdivision (B) of clause 2(l)(3) of 
Rule XI of the Rules of the House of Representatives, the 
Committee states that the provisions of Title XI relating to 
transfer of General Fund fuels tax revenues to the Aquatic Fund 
will involve increased budget authority amounting to $20 
million in fiscal year 2001, $68 million in fiscal year 2002, 
and $107 million in fiscal year 2003. Title XI also involves 
reduced budget authority of $2 million in fiscal year 1999.

                            Tax expenditures

    In compliance with subdivision (B) of clause 2(l)(3) of 
Rule XI of the Rules of the House of Representatives, the 
Committee states that the provisions of Title XI do not involve 
new or increased tax expenditures.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with subdivisions (c) of clause 2(l)(3) of 
Rule XI of the Rules of the House of Representatives, requiring 
a cost estimate prepared by the Congressional Budget Office 
(CBO), the following statement by CBO is provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 27, 1998.
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office and the 
Joint Committee on Taxation (JCT) have reviewed the Committee 
on Ways and Means' amendment to H.R. 2400, the Building 
Efficient Surface Transportation and Equity Act of 1998. The 
JCT estimates that this amendment would decrease governmental 
receipts by $5 million in fiscal year 1999 and increase 
receipts by a total of $341 million over fiscal years 1998 
through 2003. CBO concurs with this estimate. In addition, CBO 
estimates that the amendment would increase outlays by $247 
million over fiscal years 1998 through 2003.
    The revenue and outlay effects of the committee's amendment 
to H.R. 2400 are summarized in the table below. Please refer to 
the enclosed table for a more detailed estimate of the 
budgetary impact of the amendment.

               ESTIMATED BUDGET EFFECTS OF THE COMMITTEE ON WAYS AND MEANS' AMENDMENT TO H.R. 2400              
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                                                                         Total  
                                             1998      1999      2000      2001      2002      2003    1998-2003
----------------------------------------------------------------------------------------------------------------
Revenues.................................         0        -5       (1)        20       162       164        341
Outlays:                                                                                                        
    Non-extension of ethanol tax benefits         0         0         0        22        46        43        111
    Increase in deposits to boat safety                                                                         
     account.............................         0         0         0        -8        -9        -8        -25
    Transfer of more fuel taxes to ARTF..         0         0         0        18        56        87        161
                                          ----------------------------------------------------------------------
      Total outlays......................         0         0         0        32        93       122        247
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.                                                                                         
                                                                                                                
Note: ARTF=Aquatic Resources Trust Fund; positive revenue changes refer to an increase in revenues; estimates   
  are net of reduced income and payroll taxes; positive outlay changes refer to an increase in outlays.         

                           basis of estimate

Revenues

    The committee's amendment to H.R. 2400 would extend federal 
highway taxes, but not extend the partial excise tax exemption 
for gasoline-ethanol blends or the income tax credit for 
alcohol fuels after the calendar year 2000. By law, the 
baseline assumes extension of these taxes and exemptions, so 
that the net budgetary impact of the amendment would be the 
result of changes in the tax structure. These changes would 
increase revenues by more than $1.5 billion over fiscal years 
1998 through 2003. Other major provisions in the amendment 
would repeal the tax on heavy truck tires and the 4.3 cent per 
gallon tax on railroad diesel fuel. In total, the amendment is 
estimated to raise $341 million in revenues over five years.

Outlays

    Without any tax benefits for ethanol production after 2000, 
CBO expects that demand for, and production of, ethanol would 
decline. As a direct result, corn demand and price would fall, 
starting in fiscal year 2001. The decline in corn price would 
increase likely costs of the Commodity Credit Corporation under 
its marketing assistance loan operations for feed grain. CBO 
estimates an increase in direct spending for agricultural price 
supports of $22 million in fiscal year 2001 and $111 million 
over fiscal years 2001 through 2003. These outlay effects would 
occur in function 350.
    Section 1102 of the amendment would extend through 2003 
transfers of excise taxes on motorboat and small engine fuels 
from the Highway Trust Fund into the Aquatic Resources Trust 
Fund (ARTF). This section also would increase transfers to the 
ARTF to the full amounts earned from excise taxes on these two 
products. Under current law, 6.8 cents of the 18.3 cents per 
gallon earned is deposited into the general fund. Transfers to 
the ARTF would rise to 14.9 cents for fiscal year 2000 and to 
18.3 cents for each year thereafter. Finally, section 1102 
would direct the Secretary of the Treasury to deposit to the 
fund's boat safety account up to one-half of the motorboat 
fuels taxes transferred each year (unless such deposits would 
result in an account balance greater than one-half of the 
previous year's transfers), rather than the current maximum of 
$70 million.
    CBO estimates that the phased-in increase in the portion of 
motorboat and small engines fuels taxes transferred to the ARTF 
would increase mandatory spending from the fund's sport fish 
restoration account by $18 million in 2001 and by a total of 
$161 million through 2003. We estimate that the change in the 
amounts allocated to the boat safety account would reduce 
spending for the sport fish account by $8 million to $9 million 
annually over this same period. We estimate that net additional 
spending would be $10 million in 2001 and a total of $136 
million through 2003.
    The change in deposits of excise taxes to the Highway and 
Transit Accounts of the Highway Trust Fund could affect the 
minimum allocation program. Spending for the minimum allocation 
program is direct spending. At this time, we cannot determine 
whether this change would have an effect on funding for minimum 
allocation, or the extent of any such effect.
    Mandates: In accordance with the requirements of Public Law 
104-4, the Unfunded Mandates Reform Act of 1995, JCT has 
determined that the committee amendment contains no federal 
intergovernmental mandates.
    In addition, JCT has determined that the amendment contains 
two federal private-sector mandates. The provision to extend 
the Highway Trust Fund and Aquatic Resources Fund excise taxes 
beyond the current September 30, 1999, expiration date would 
impose direct costs on the private sector of $126.5 billion 
over fiscal years 2000 through 2004. Please refer to the 
enclosed letter for a more detailed account of the mandates in 
the amendment.
    Pay-as-you-go considerations: Section 252 of the Balanced 
Budget and Emergency Deficit Control Act of 1985 establishes 
pay-as-you-go procedures for legislation affecting receipts or 
direct spending. Because the committee amendment would affect 
receipts and direct spending, pay-as-you-go procedures would 
apply. The estimated pay-as-you-go effects of the committee 
amendment are shown below.

                                          PAY-AS-YOU-GO CONSIDERATIONS                                          
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                             1998      1999      2000      2001      2002      2003    1998-2003
----------------------------------------------------------------------------------------------------------------
Change in receipts.......................         0        -5     (\1\)        20       162       164        341
Change in outlays........................         0         0         0        32        93       122        247
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.                                                                                         

    If you wish further details, please feel free to contact me 
or your staff may wish to contact Alyssa Trzcszkowski.
            Sincerely,
                                           June E. O'Neill,
                                                          Director.
    Enclosure.
                               Joint Committee on Taxation,
                                    Washington, DC, March 27, 1998.
Mrs. June E. O'Neill,
Director, Congressional Budget Office, Washington, DC.
    Dear Mrs. O'Neill: The staff of the Joint Committee on 
Taxation has reviewed the revenue title of H.R. 2400 
(``Building Efficient Surface Transportation and Equity Act of 
1998'') as ordered reported by the House Committee on Ways and 
Means on March 26, 1998. In accordance with the requirements of 
Public Law 104-4, the Unfunded Mandates Reform Act of 1995, we 
have determined that the extension of the Highway Trust Fund 
(``Highway Fund'') and Aquatic Resources Trust Fund (``Aquatic 
Fund'') excise taxes beyond the current September 30, 1999 
expiration will involve a net Federal private sector mandate 
totaling $126.5 billion in fiscal year years 2000-2004. This is 
the net amount from the extension of the Highway and Aquatic 
Fund excise taxes after the income tax offset, which is no 
greater than the estimated amount that the private sector will 
be required to pay in order to comply with this Federal private 
sector mandate during this period.
    The revenue provisions will not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments, as they are not subject to the Highway or Aquatic 
Fund excise taxes.
    If you would like to discuss this information further, you 
may call me.
            Sincerely,
                                            Lindy L. Paull,
                                                    Chief of Staff.
    Enclosure: Revenue table.

  ESTIMATED BUDGET EFFECTS OF A COMMITTEE AMENDMENT RELATING TO AN EXTENSION OF HIGHWAY TRUST FUND EXCISE TAXES 
                         AND RELATED TRUST FUND PROVISIONS (REVENUE TITLE TO H.R. 2400)                         
                                 [Fiscal years 1998-2003 in millions of dollars]                                
----------------------------------------------------------------------------------------------------------------
                                                                                                          1998- 
           Provision                Effective        1998     1999     2000     2001     2002     2003     2003 
----------------------------------------------------------------------------------------------------------------
1. Extend Highway Trust Fund    10/1/99..........  .......  .......  .......      385      515      526    1,426
 excise taxes and certain                                                                                       
 exemptions through 9/30/05                                                                                     
 \1\.                                                                                                           
2. Extend and modify Highway    10/1/98..........  .......  .......                                             
 Trust Fund expenditure                                                                                         
 authority through 9/30/03.                                                                                     
(2)No Revenue Effect            .................  .......                                                      
3. Provide that no interest     10/1/98..........  .......                                                      
 will be earned on Highway                                                                                      
 Trust Fund balances.\2\                                                                                        
(4)No Revenue or Outlay Effect  .................                                                               
4. Extend and modify Aquatic    10/1/98..........  .......        2  .......       -2      -12      -20      -32
 Resources Trust Fund                                                                                           
 expenditure authority through                                                                                  
 9/30/03.\3\                                                                                                    
5. Transfer 3.4 cents/gallon    tia 9/30/99......  .......  .......  .......      -18      -56      -87     -161
 of the General Fund portion                                                                                    
 of the tax on motorboat and                                                                                    
 small-engine gasoline to the                                                                                   
 Aquatic Resources Trust Fund                                                                                   
 (6.8 cents/gallon after 9/30/                                                                                  
 00).\3\                                                                                                        
6. Repeal excise tax on heavy   10/1/00..........  .......  .......  .......     -291     -299     -303     -893
 truck tires.                                                                                                   
7. Repeal 4.3 cents/gallon tax  10/1/00..........  .......  .......  .......      -96     -100     -102     -298
 on railroad diesel fuel.                                                                                       
8. Delay for 2 years the        DOE..............  .......                                                      
 requirement that terminals                                                                                     
 offer dyed diesel fuel and                                                                                     
 kerosene.                                                                                                      
(4)Negligible Revenue Effect    .................                                                               
9. Simplify fuels tax refund    10/1/98..........  .......       -5    (\4\)    (\4\)    (\4\)    (\4\)       -5
 procedures.                                                                                                    
10. Repeal National             DOE..............  .......                                                      
 Recreational Trails Trust                                                                                      
 Fund.                                                                                                          
(4)No Revenue or Outlay Effect  .................                                                               
                                                  --------------------------------------------------------------
      Net Total...............  .................  .......       -3    (\4\)      -22       48       14       37
----------------------------------------------------------------------------------------------------------------
\1\ The Congressional Budget Office revenue baseline assumes that the Highway Trust Fund excise taxes and       
  exemptions to the taxes will remain in effect throughout the budget window. Thus, the extension of the excise 
  taxes and certain exemptions is scored as having no revenue effect. The table shows the net budget effect of  
  retaining the present-law expiration dates for the alcohol fuels tax subsidies. For fiscal years 2001 through 
  2003, Federal revenues increase by a total of $1,537 million, and Federal outlays increase by a total of $111 
  million, for a net gain of $1,426 million. (Outlay estimate provided by the Congressional Budget Office.)     
\2\ The Congressional Budge Office has determined that this provision will have no effect on Federal outlays.   
\3\ Positive numbers indicate that Federal outlays will decline, and negative numbers indicate that Federal     
  outlays will increase. Estimate provided by the Congressional Budget Office.                                  
\4\ Loss of less than $500,000.                                                                                 
                                                                                                                
Legend for ``Effective'' column: DOE=date of enactment; tia=taxes imposed after.                                
                                                                                                                
Note.--Details may not add to total due to rounding.                                                            
                                                                                                                
Source: Joint Committee on Taxation.                                                                            

         V. OTHER MATTERS TO BE DISCUSSED UNDER THE HOUSE RULES

          A. Committee Oversight Findings and Recommendations

    With respect to subdivision (A) of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives (relating to 
oversight findings), the Committee advises that it was the 
result of the Committee's oversight activities concerning the 
need to extend the Highway Fund excise taxes to finance the 
authorization levels and purposes contained in Titles I-X of 
H.R. 2400, and to modify certain of the highway excise taxes, 
that the Committee concluded that it is appropriate and timely 
to enact the provisions contained in Title XI of the bill as 
reported.

    B. Summary of Findings and Recommendations of the Committee on 
                    Government Reform and Oversight

    With respect to subdivision (D) of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives, the Committee 
advises that no oversight findings or recommendations have been 
submitted to the Committee by the Committee on Government 
Reform and Oversight with respect to the provisions contained 
Title XI of in the bill.

                 C. Constitutional Authority Statement

    With respect to clause 2(l)(4) of rule XI of the Rules of 
the House of Representatives (relating to Constitutional 
Authority), the Committee states that the Committee's action in 
reporting this bill is derived from Article I of the 
Constitution, Section 7 (``All bills for raising revenue shall 
originate in the House of Representatives'') and Section 8 
(``The Congress shall have power to lay and collect taxes, 
duties, imposts and excises, to pay the debts * * * of the 
United States'').

              D. Information Relating to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Act of 1995 (P.L. 104-4).
    The Committee has determined that the provisions of Title 
XI of the bill relating to the extension and modification of 
Highway and Aquatic Fund excise taxes will involve a Federal 
mandate on the private sector totaling $126.5 billion in fiscal 
years 2000-2004. This is no greater than the net amounts that 
the private sector will be required to pay, after income tax 
offsets for the excise taxes extended under the bill, in order 
to comply with this Federal private sector mandate. Title XI of 
the bill will not impose a Federal intergovernmental mandate on 
State, local, or tribal governments, as they are not subject to 
these excise taxes.

                 E. Applicability of House Rule XXI5(c)

    Rule XXI5(c) of the Rules of the House of Representatives 
provides, in part, that ``No bill or joint resolution, 
amendment, or conference report carrying a Federal income tax 
rate increase shall be considered as passed or agreed to unless 
so determined by a vote of not less than three-fifths of the 
Members.'' The Committee has carefully reviewed the provisions 
of the bill, and states that the provisions of Title XI of the 
bill do not involve any Federal income tax rate increase within 
the meaning of the rule.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

  The bill was referred to this committee for consideration of 
such provisions of the bill and amendment as fall within the 
jurisdiction of this committee pursuant to clause 1(s) of Rule 
X of the Rules of the House of Representatives. The changes 
made to existing law by the amendment reported by the Committee 
on Transportation and Infrastructure are shown in the report 
filed by that committee (Rept. 105-467, Part 1).
  For the information of the Members of the House of 
Representatives, changes made by this committee to existing law 
are shown as follows (existing law proposed to be omitted is 
enclosed in black brackets, new matter is printed in italic, 
existing law in which no change is proposed is shown in roman):

INTERNAL REVENUE CODE OF 1986

           *       *       *       *       *       *       *


Subtitle D--Miscellaneous Excise Taxes

           *       *       *       *       *       *       *


CHAPTER 31--RETAIL EXCISE TAXES

           *       *       *       *       *       *       *


Subchapter B--Special Fuels

           *       *       *       *       *       *       *


SEC. 4041. IMPOSITION OF TAX.

  (a) Diesel Fuel and Special Motor Fuels.--
          (1) Tax on diesel fuel in certain cases.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) Rate of tax.--
                          (i) * * *
                          [(ii) Rate of tax on trains.--In the 
                        case of any sale for use, or use, of 
                        diesel fuel in a train, the rate of tax 
                        imposed by this paragraph shall be--
                                  [(I) 6.8 cents per gallon 
                                after September 30, 1993, and 
                                before October 1, 1995,
                                  [(II) 5.55 cents per gallon 
                                after September 30, 1995, and 
                                before October 1, 1999, and
                                  [(III) 4.3 cents per gallon 
                                after September 30, 1999.]
                          (ii) Rate of tax on trains.--In the 
                        case of any sale for use, or use, of 
                        diesel fuel in a train, the rate of tax 
                        imposed by this paragraph shall be--
                                  (I) 5.55 cents per gallon 
                                after September 30, 1995, and 
                                before October 1, 1999,
                                  (II) 4.3 cents per gallon 
                                after September 30, 1999, and 
                                before October 1, 2000, and
                                  (III) zero after September 
                                30, 2000.
                          (iii) Rate of tax on certain buses.--
                                  (I) In general.--Except as 
                                provided in subclause (II), in 
                                the case of fuel sold for use 
                                or used in a use described in 
                                section 6427(b)(1) (after the 
                                application of section 
                                6427(b)(3)), the rate of tax 
                                imposed by this paragraph shall 
                                be 7.3 cents per gallon (4.3 
                                cents per gallon after 
                                September 30, [1999] 2005).
                                  (II) School bus and intracity 
                                transportation.--No tax shall 
                                be imposed by this paragraph on 
                                any sale for use, or use, 
                                described in subparagraph (B) 
                                or (C) of section 6427(b)(2).
          (2) Special motor fuels.--
                  (A) * * *
                  (B) Rate of tax.--The rate of the tax imposed 
                by this paragraph shall be--
                          (i) except as otherwise provided in 
                        this subparagraph, the rate of tax 
                        specified in section 4081(a)(2)(A)(i) 
                        which is in effect at the time of such 
                        sale or use,
                          (ii) 13.6 cents per gallon in the 
                        case of liquefied petroleum gas, and
                          (iii) 11.9 cents per gallon in the 
                        case of liquefied natural gas.
                In the case of any sale or use after September 
                30, [1999] 2005, clause (ii) shall be applied 
                by substituting ``3.2 cents'' for ``13.6 
                cents'', and clause (iii) shall be applied by 
                substituting ``2.8 cents'' for ``11.9 cents''.

           *       *       *       *       *       *       *

  (m) Certain Alcohol Fuels.--
          (1) In general.--In the case of the sale or use of 
        any partially exempt methanol or ethanol fuel--
                  (A) the rate of the tax imposed by subsection 
                (a)(2) shall be--
                          (i) after September 30, 1997, and 
                        before October 1, [1999] 2005--
                                  (I) in the case of fuel none 
                                of the alcohol in which 
                                consists of ethanol, 9.15 cents 
                                per gallon, and
                                  (II) in any other case, 11.3 
                                cents per gallon, and
                          (ii) after September 30, [1999] 
                        2005--
                                  (I) * * *

           *       *       *       *       *       *       *


Subchapter C--Heavy Trucks and Trailers

           *       *       *       *       *       *       *


SEC. 4051. IMPOSITION OF TAX ON HEAVY TRUCKS AND TRAILERS SOLD AT 
                    RETAIL.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Termination.--On and after October 1, [1999] 2005, the 
taxes imposed by this section shall not apply.
  [(d) Transitional Rule.--In the case of any article taxable 
under subsection (a) on which tax was imposed under section 
4061(a), subsection (a) shall be applied by substituting ``2 
percent'' for ``12 percent''.]

           *       *       *       *       *       *       *


CHAPTER 32--MANUFACTURERS EXCISE TAXES

           *       *       *       *       *       *       *


               Subchapter A--Automotive and Related Items

     * * * * * * *
        [Part II. Tires]
     * * * * * * *

                             [PART II--TIRES

        [Sec.
        [4071.  Imposition of tax.
        [4072.  Definitions.
        [4073.  Exemption for tires with internal wire fastening.

[SEC. 4071. IMPOSITION OF TAX.

  [(a) Imposition and Rate of Tax.--There is hereby imposed on 
tires of the type used on highway vehicles, if wholly or in 
part made of rubber, sold by the manufacturer, producer, or 
importer a tax at the following rates:

[If the tire weighs:The rate of tax is:

  [Not more than 40 No tax..............................................
  [More than 40 lbs.15 cents per lb. in excess of 40 lbs................
  [More than 70 lbs.$4.50 plus 30 cents per lb. in excess of 70 lbs.....
  [More than 90 lbs.$10.50 plus 50 cents per lb. in excess of 90 lbs....
  [(b) Special Rule for Manufacturers Who Sell at Retail.--
Under regulations prescribed by the Secretary, if the 
manufacturer, producer, or importer of any tire delivers such 
tire to a retail store or retail outlet of such manufacturer, 
producer, or importer, he shall be liable for tax under 
subsection (a) in respect of such tire in the same manner as if 
it had been sold at the time it was delivered to such retail 
store or outlet. This subsection shall not apply to an article 
in respect to which tax has been imposed by subsection (a). 
Subsection (a) shall not apply to an article in respect of 
which tax has been imposed by this subsection.
  [(c) Determination of Weight.--For purposes of this section, 
weight shall be based on total weight exclusive of metal rims 
or rim bases. Total weight of the articles shall be determined 
under regulations prescribed by the Secretary.
  [(d) Termination.--On and after October 1, 1999, the taxes 
imposed by subsection (a) shall not apply.
  [(e) Tires on Imported Articles.--For the purposes of 
subsection (a), if an article imported into the United States 
is equipped with tires--
          [(1) the importer of the article shall be treated as 
        the importer of the tires with which such article is 
        equipped, and
          [(2) the sale of the article by the importer thereof 
        shall be treated as the sale of the tires with which 
        such article is equipped.
This subsection shall not apply with respect to the sale of an 
automobile bus chassis or an automobile bus body.

[SEC. 4072. DEFINITIONS.

  [(a) Rubber.--For purposes of this chapter, the term 
``rubber'' includes synthetic and substitute rubber.
  [(b) Tires of the Type Used on Highway Vehicles.--For 
purposes of this part, the term ``tires of the type used on 
highway vehicles'' means tires of the type used on--
          [(1) motor vehicles which are highway vehicles, or
          [(2) vehicles of the type used in connection with 
        motor vehicles which are highway vehicles.

[SEC. 4073. EXEMPTION FOR TIRES WITH INTERNAL WIRE FASTENING.

  The tax imposed by section 4071 shall not apply to tires of 
extruded tiring with an internal wire fastening agent.]

           *       *       *       *       *       *       *


                      PART III--PETROLEUM PRODUCTS

Subpart A--Gasoline and diesel fuel

           *       *       *       *       *       *       *


 SEC. 4081. IMPOSITION OF TAX.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Termination.--
          (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] 2005.

           *       *       *       *       *       *       *


Subchapter F--Special Provisions Applicable to Manufacturers Tax

           *       *       *       *       *       *       *


SEC. 4216. DEFINITION OF PRICE.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Sales of installment accounts.--If installment accounts, 
with respect to payments on which tax is being computed as 
provided in subsection (c), are sold or otherwise disposed of, 
then subsection (c) shall not apply with respect to any 
subsequent paymentson such accounts (other than subsequent 
payments on returned accounts with respect to which credit or refund is 
allowable by reason of section [6416(b)(5)] 6416(b)(4)), but instead--
          (1) * * *

           *       *       *       *       *       *       *


SEC. 4218. USE BY MANUFACTURER OR IMPORTER CONSIDERED SALE.

  (a) General Rule.--If any person manufactures, produces, or 
imports an article [(other than a tire taxable under section 
4071)] and uses it (otherwise than as material in the 
manufacture or production of, or as a component part of, 
another article taxable under this chapter to be manufactured 
or produced by him), then he shall be liable for tax under this 
chapter in the same manner as if such article were sold by him. 
This subsection shall not apply in the case of gasoline used by 
any person, for nonfuel purposes, as a material in the 
manufacture or production of another article to be manufactured 
or produced by him. For the purpose of applying the first 
sentence of this subsection to coal taxable under section 4121, 
the words ``(otherwise than as material in the manufacture or 
production of, or as a component part of, another article 
taxable under this chapter to be manufactured or produced by 
him)'' shall be disregarded.
  [(b) Tires.--If any person manufactures, produces, or imports 
a tire taxable under section 4071, and sells it on or in 
connection with the sale of any article, or uses it, then he 
shall be liable for tax under this chapter in the same manner 
as if such article were sold by him.]
  [(c)] (b) Computation of Tax.--Except as provided in section 
4223(b), in any case in which a person is made liable for tax 
by the preceding provisions of this section, the tax (if based 
on the price for which the article is sold) shall be computed 
on the price at which such or similar articles are sold, in the 
ordinary course of trade, by manufacturers, producers, or 
importers, thereof, as determined by the Secretary.

           *       *       *       *       *       *       *


Subchapter G--Exemptions, Registration, Etc.

           *       *       *       *       *       *       *


SEC. 4221. CERTAIN TAX-FREE SALES.

  (a) General Rule.--Under regulations prescribed by the 
Secretary, no tax shall be imposed under this chapter (other 
than under section 4121, 4081, or 4091) on the sale by the 
manufacturer (or under subchapter A or C of chapter 31 on the 
first retail sale) of an article--
          (1) * * *

           *       *       *       *       *       *       *

          (5) to a nonprofit educational organization for its 
        exclusive use, but only if such exportation or use is 
        to occur before any other use. Paragraphs (4) and (5) 
        shall not apply to the tax imposed by section 4064. [In 
        the case of taxes imposed by section 4051, or 4071, 
        paragraphs (4) and (5) shall not apply on and after 
        October 1, 1999.] Paragraphs (4) and (5) shall not 
        apply to the tax imposed by section 4051 on and after 
        October 1, 2005. In the case of the tax imposed by 
        section 4131, paragraphs (3), (4), and (5) shall not 
        apply and paragraph (2) shall apply only if the use of 
        the exported vaccine meets such requirements as the 
        Secretary may by regulations prescribe. In the case of 
        taxes imposed by subchapter A of chapter 31, paragraphs 
        (1), (3), (4), and (5) shall not apply.

           *       *       *       *       *       *       *

  [(e) Special Rules.--
          [(1) Reciprocity required in case of civil air- 
        craft.--]
  (e) Reciprocity Required in Case of Civil Aircraft.--In the 
case of articles sold for use as supplies for aircraft, the 
privileges granted under subsection (a)(3) in respect of civil 
aircraft employed in foreign trade or trade between the United 
States and any of its possessions, in respect of aircraft 
registered in a foreign country, shall be allowed only if the 
Secretary of the Treasury has been advised by the Secretary of 
Commerce that he has found that such foreign country allows, or 
will allow, substantially reciprocal privileges in respect of 
aircraft registered in the United States. If the Secretary of 
the Treasury is advised by the Secretary of Commerce that he 
has found that a foreign country has discontinued or will 
discontinue the allowance of such privileges, the privileges 
granted under subsection (a)(3) shall not apply thereafter in 
respect of civil aircraft registered in that foreign country 
and employed in foreign trade or trade between the United 
States and any of its possessions.
          [(2) Tires.--
                  [(A) Tax-free sales.--Under regulations 
                prescribed by the Secretary, no tax shall be 
                imposed under section 4071 on the sale by the 
                manufacturer of a tire if--
                          [(i) such tire is sold for use by the 
                        purchaser for sale on or in connection 
                        with the sale of another article 
                        manufactured or produced by such 
                        purchaser; and
                          [(ii) such other article is to be 
                        sold by such purchaser in a sale which 
                        either will satisfy the requirements of 
                        paragraph (2), (3), (4), or (5) of 
                        subsection (a) for a tax-free sale, or 
                        would satisfy such requirements but for 
                        the fact that such other article is not 
                        subject to tax under this chapter.
                  [(B) Proof.--Where a tire has been sold free 
                of tax under this paragraph, this paragraph 
                shall cease to apply unless, within the 6-month 
                period which begins on the date of the sale by 
                him (or, if earlier on the date of the shipment 
                by him), the manufacturer of such tire receives 
                proof that the other article referred to in 
                clause (ii) of subparagraph (A) has been sold 
                in a manner which satisfies the requirements of 
                such clause (ii) (including in the case of a 
                sale for export, proof of export of such other 
                article).
                  [(C) Subsection (a)(1) does not apply.--
                Paragraph (1) of subsection (a) shall not apply 
                with respect to the tax imposed under section 
                4071 on the sale of a tire.
          [(3) Tires used on intercity, local, and school 
        buses.--Under regulations prescribed by the Secretary, 
        the tax imposed by section 4071 shall not apply in the 
        case of tires sold for use by the purchaser on or in 
        connection with a qualified bus.]

           *       *       *       *       *       *       *


SEC. 4223. SPECIAL RULES RELATING TO FURTHER MANUFACTURE.

  (a) * * *
  (b) Computation of Tax.--If the manufacturer or producer 
referred to in subsection (a) incurs liability for tax under 
this chapter on his sale or use of an article referred to in 
subsection (a) and the tax is based on the price for which the 
article is sold, the article shall be treated as having been 
sold by him--
          (1) at the price for which the article was sold by 
        him (or, where the tax is on his use of the article, at 
        the price referred to in section [4218(c)] 4218(b)); or

           *       *       *       *       *       *       *


CHAPTER 36--CERTAIN OTHER EXCISE TAXES

           *       *       *       *       *       *       *


Subchapter D--Tax on Use of Certain Vehicles

           *       *       *       *       *       *       *


SEC. 4481. IMPOSITION OF TAX.

  (a) * * *

           *       *       *       *       *       *       *

  (e) Period Tax in Effect.--The tax imposed by this section 
shall apply only to use before October 1, [1999] 2005.

SEC. 4482. DEFINITIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Other Definitions and Special Rule.--For purposes of this 
subchapter--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Taxable period.--The term ``taxable period'' 
        means any year beginning before July 1, [1999] 2005, 
        and the period which begins on July 1, [1999] 2005, and 
        ends at the close of September 30, [1999] 2005.

           *       *       *       *       *       *       *

  (d) Special Rule for Taxable Period in Which Termination Date 
Occurs.--In the case of the taxable period which ends on 
September 30, [1999] 2005, the amount of the tax imposed by 
section 4481 with respect to any highway motor vehicle shall be 
determined by reducing each dollar amount in the table 
contained in section 4481(a) by 75 percent.

SEC. 4483. EXEMPTIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (g) Termination of Exemptions.--Subsections (a) and (c) shall 
not apply on and after October 1, [1999] 2005.

           *       *       *       *       *       *       *


Subtitle F--Procedure and Administration

           *       *       *       *       *       *       *


CHAPTER 62--TIME AND PLACE FOR PAYING TAX

           *       *       *       *       *       *       *


Subchapter A--Place and Due Date for Paying Tax

           *       *       *       *       *       *       *


SEC. 6156. INSTALLMENT PAYMENTS OF TAX ON USE OF HIGHWAY MOTOR 
                    VEHICLES.

  (a) * * *

           *       *       *       *       *       *       *

  (e) Section Inapplicable to Certain Liabilities.--This 
section shall not apply to any liability for tax incurred in--
          (1) April, May, or June of any year, or
          (2) July, August, or September of [1999] 2005.

           *       *       *       *       *       *       *


CHAPTER 65--ABATEMENTS, CREDITS, AND REFUNDS

           *       *       *       *       *       *       *


Subchapter B--Rules of Special Application

           *       *       *       *       *       *       *


SEC. 6412. FLOOR STOCKS REFUNDS.

  (a) In General.--
          (1) [Tires and taxable] Taxable fuel.--Where before 
        October 1, [1999] 2005, any article subject to the tax 
        imposed by section [4071 or] 4081 has been sold by the 
        manufacturer, producer, or importer and on such date 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 manufacturer, producer, or importer an 
        amount equal to the difference between the tax paid by 
        such manufacturer, producer, or importer on his sale of 
        the article and the amount of tax made applicable to 
        such article on and after October 1, [1999] 2005, if 
        claim for such credit or refund is filed with the 
        Secretary on or before March 31, [2000] 2006, based 
        upon a request submitted to the manufacturer, producer, 
        or importer before January 1, [2000] 2006 by the dealer 
        who held the article in respect of which the credit or 
        refund is claimed, and, on or before March 31, [2000] 
        2006, reimbursement has been made to such dealer by 
        such manufacturer, producer, or importer for the tax 
        reduction on such article or written consent has been 
        obtained from such dealer to allowance of such credit 
        or refund. No credit or refund shall be allowable under 
        this paragraph with respect to taxable fuel in retail 
        stocks held at the place where intended to be sold at 
        retail, nor with respect to taxable fuel held for sale 
        by a producer or importer of taxable fuel.

           *       *       *       *       *       *       *

  (c) Other Laws Applicable.--All provisions of law, including 
penalties, applicable in respect of the taxes imposed by 
[sections 4071 and] section 4081 shall, insofar as applicable 
and not inconsistent with subsections (a) and (b) of this 
section, apply in respect of the credits and refunds provided 
for in subsection (a) to the same extent as if such credits or 
refunds constituted overpayments of such taxes.

           *       *       *       *       *       *       *


SEC. 6416. CERTAIN TAXES ON SALES AND SERVICES.

  (a) * * *
  (b) Special Cases in Which tax Payments Considered 
Overpayments.--Under regulations prescribed by the Secretary, 
credit or refund (without interest) shall be allowed or made in 
respect of the overpayments determined under the following 
paragraphs:
          (1) Price readjustments.--
                  (A) In general.--Except as provided in 
                subparagraph (B) [or (C)], if the price of any 
                article in respect of which a tax, based on 
                such price, is imposed by chapter 31 or 32, is 
                readjusted by reason of the return or 
                repossession of the article or a covering or 
                container, or by a bona fide discount, rebate, 
                or allowance, including a readjustment for 
                local advertising (but only to the extent 
                provided in section 4216(e)(2) and (3)), the 
                part of the tax proportionate to the part of 
                the price repaid or credited to the purchaser 
                shall be deemed to be an overpayment.

           *       *       *       *       *       *       *

                  [(C) Adjustment of tire price.--No credit or 
                refund of any tax imposed by subsection (a) or 
                (b) of section 4071 shall be allowed or made by 
                reason of an adjustment of a tire pursuant to a 
                warranty or guarantee.]
          (2) Specified uses and resales.--The tax paid under 
        chapter 32 (or under subsection (a) or (d) of section 
        4041 in respect of sales or under section 4051) in 
        respect of any article shall be deemed to be an 
        overpayment if such article was, by any person--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) sold to a nonprofit educational 
                organization for its exclusive use; or
                  [(E) in the case of any tire taxable under 
                section 4071(a), sold to any person for use as 
                described in section 4221(e)(3); or]
                  [(F)] (E) in the case of gasoline, used or 
                sold for use in the production of special fuels 
                referred to in section 4041.
        Subparagraphs (C) and (D) shall not apply in the case 
        of any tax paid under section 4064. In the case of the 
        tax imposed by section 4131, subparagraphs (B), (C), 
        and (D) shall not apply and subparagraph (A) shall 
        apply only if the use of the exported vaccine meets 
        such requirements as the Secretary may by regulations 
        prescribe. This paragraph shall not apply in the case 
        of any tax imposed under section 4041(a)(1) or 4081 on 
        diesel fuel and any tax paid under section 4091 or 
        4121.

           *       *       *       *       *       *       *

          [(4) Tires.--
                  [(A) the tax imposed by section 4071 has been 
                paid with respect to the sale of any tire by 
                the manufacturer, producer, or importer 
                thereof, and
                  [(B) such tire is sold by any person on or in 
                connection with, or with the sale of, any other 
                article, such tax shall be deemed to be an 
                overpayment by such person if such other 
                article is--
                          [(i) an automobile bus chassis or an 
                        automobile bus body, or
                          [(ii) by such person exported, sold 
                        to a State or local government for the 
                        exclusive use of a State or local 
                        government, sold to a nonprofit 
                        educational organization for its 
                        exclusive use, or used or sold for use 
                        as supplies for vessels or aircraft.]
          [(5)] (4) Return of certain installment accounts.--
                  (A) tax was paid under section 4216(e)(1) in 
                respect of any installment account,
                  (B) such account is, under the agreement 
                under which the account was sold, returned to 
                the person who sold such account, and
                  (C) the consideration is readjusted as 
                provided in such agreement,
        the part of the tax paid under section 4216(e)(1) 
        allocable to the part of the consideration repaid or 
        credited to the purchaser of such account shall be 
        deemed to be an overpayment.
          [(6)] (5) Truck chassis, bodies, and semitrailers 
        used for further manufacture.--If--
                  (A) the tax imposed by section 4051 has been 
                paid with respect to the sale of any article, 
                and
                  (B) before any other use, such article is by 
                any person used as a component part of another 
                article taxable under section 4051 manufactured 
                or produced by him,
        such tax shall be deemed to be an overpayment by such 
        person. For purposes of the preceding sentence, an 
        article shall be treated as having been used as a 
        component part of another article if, had it not been 
        broken or rendered useless in the manufacture or 
        production of such other article, it would have been so 
        used.
This subsection shall apply in respect of an article only if 
the exportation or use referred to in the applicable provision 
of this subsection occurs before any other use, or, in the case 
of a sale or resale, the use referred to in the applicable 
provision of this subsection is to occur before any other use.

           *       *       *       *       *       *       *


SEC. 6421. GASOLINE USED FOR CERTAIN NONHIGHWAY PURPOSES, USED BY LOCAL 
                    TRANSIT SYSTEMS, OR SOLD FOR CERTAIN EXEMPT 
                    PURPOSES.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Time for Filing Claims; Period Covered.--
          (1) * * *
          [(2) Exception.--If $1,000 or more is payable under 
        this section to any person with respect to gasoline 
        used during any of the first three quarters of his 
        taxable year, a claim may be filed under this section 
        by such person with respect to gasoline used during 
        such quarter. No claim filed under this paragraph shall 
        be allowed unless filed on or before the last day of 
        the first quarter following the quarter for which the 
        claim is filed.]
          (2) Exception.--

          For payments per quarter based on aggregate amounts payable 
        under this section and section 6427, see section 6427(i)(2).

           *       *       *       *       *       *       *

  (f) Exempt Sales; Other Payments or Refunds Available.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Gasoline used in trains.--In the case of gasoline 
        used as a fuel in a train, this section shall not apply 
        with respect to--
                  (A) the Leaking Underground Storage Tank 
                Trust Fund financing rate under section 4081, 
                and
                  [(B) so much of the rate specified in section 
                4081(a)(2)(A) as does not exceed--
                          [(i) 6.8 cents per gallon after 
                        September 30, 1993, and before October 
                        1, 1995,
                          [(ii) 5.55 cents per gallon after 
                        September 30, 1995, and before October 
                        1, 1999, and
                          [(iii) 4.3 cents per gallon after 
                        September 30, 1999.]
                  (B) so much of the rate specified in section 
                4081(a)(2)(A) as does not exceed--
                          (i) 5.55 cents per gallon after 
                        September 30, 1995, and before October 
                        1, 1999,
                          (ii) 4.3 cents per gallon after 
                        September 30, 1999, and before October 
                        1, 2000, and
                          (iii) zero after September 30, 2000.

           *       *       *       *       *       *       *


SEC. 6427. FUELS NOT USED FOR TAXABLE PURPOSES.

  (a) * * *

           *       *       *       *       *       *       *

  (i) Time for Filing Claims; Period Covered.--
          (1) * * *
          (2) Exceptions
                  [(A) In general.--If $1,000 or more is 
                payable under subsections (a), (b), (d), (h), 
                and (q) to any person with respect to fuel used 
                during any of the first 3 quarters of his 
                taxable year, a claim may be filed under this 
                section with respect to fuel used, during such 
                quarter.]
                  (A) In general.--If, at the close of any 
                quarter of the taxable year of any person, at 
                least $750 is payable in the aggregate under 
                subsections (a), (b), (d), (h), (l), and (q) of 
                this section and section 6421 to such person 
                with respect to fuel used--
                          (i) during such quarter, or
                          (ii) any prior quarter during such 
                        taxable year for which no other claim 
                        has been filed,
                a claim may be filed under this section with 
                respect to such fuel.

           *       *       *       *       *       *       *

          [(4) Special rule for nontaxable uses of diesel fuel 
        and aviation fuel taxed under section 4081 or 4091.--
                  [(A) In general.--If at the close of any of 
                the 1st 3 quarters of the taxable year of any 
                person, at least $750 is payable under 
                subsection (l) to such person with respect to 
                fuel used during such quarter or any prior 
                quarter during the taxable year (and for which 
                no other claim has been filed), a claim may be 
                filed under subsection (l) with respect to such 
                fuel.
                  [(B) Time for filing claim.--No claim filed 
                under this paragraph shall be allowed unless 
                filed during the 1st quarter following the last 
                quarter included in the claim.]
          [(5)] (4) Special rule for vendor refunds.--
                  (A) * * *

           *       *       *       *       *       *       *

  (k) Income Tax Credit in Lieu of Payment.--
          (1) * * *
          [(2) Exception.--Paragraph (1) shall not apply to a 
        payment of a claim filed under paragraph (2), (3), (4), 
        or (5) of subsection (i).]
          (2) Exception.--Paragraph (1) shall not apply to a 
        payment of a claim filed under paragraph (2), (3), or 
        (4) of subsection (i).

           *       *       *       *       *       *       *

  (l) Nontaxable Uses of Diesel Fuel and Aviation Fuel.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Refund of certain taxes on fuel used in diesel-
        powered trains.--For purposes of this subsection, the 
        term ``nontaxable use'' includes fuel used in a diesel-
        powered train. The preceding sentence shall not apply 
        with respect to--
                  (A) the Leaking Underground Storage Tank 
                Trust Fund financing rate under sections 4041 
                and 4081, and
                  [(B) so much of the rate specified in section 
                4081(a)(2)(A) as does not exceed--
                          [(i) 6.8 cents per gallon after 
                        September 30, 1993, and before October 
                        1, 1995,
                          [(ii) 5.55 cents per gallon after 
                        September 30, 1995, and before October 
                        1, 1999, and
                          [(iii) 4.3 cents per gallon after 
                        September 30, 1999.]
                  (B) so much of the rate specified in section 
                4081(a)(2)(A) as does not exceed--
                          (i) 5.55 cents per gallon after 
                        September 30, 1995, and before October 
                        1, 1999,
                          (ii) 4.3 cents per gallon after 
                        September 30, 1999, and before October 
                        1, 2000, and
                          (iii) zero after September 30, 2000.
        The preceding sentence shall not apply in the case of 
        fuel sold for exclusive use by a State or any political 
        subdivision thereof.

           *       *       *       *       *       *       *


Subtitle I--Trust Fund Code

           *       *       *       *       *       *       *


CHAPTER 98--TRUST FUND CODE

           *       *       *       *       *       *       *


Subchapter A--Establishment of Trust Funds

           *       *       *       *       *       *       *


        Sec. 9501. Black lung disability fund.
     * * * * * * *
        [Sec. 9511. National recreational trails trust fund.]

           *       *       *       *       *       *       *


SEC. 9503. HIGHWAY TRUST FUND.

  (a) * * *
  (b) Transfer to Highway Trust Fund of Amounts Equivalent to 
Certain Taxes.--
          (1) In general.--There are hereby appropriated to the 
        Highway Trust Fund amounts equivalent to the taxes 
        received in the Treasury before October 1, [1999] 2005, 
        under the following provisions--
                  (A) section 4041 (relating to taxes on diesel 
                fuels and special motor fuels),
                  (B) section 4051 (relating to retail tax on 
                heavy trucks and trailers),
                  [(C) section 4061 (relating to tax on trucks 
                and truck parts),
                  [(D) section 4071 (relating to tax on tires 
                and tread rubber),]
                  [(E)] (C) section 4081 (relating to tax on 
                gasoline and diesel fuel), and,
                  [(F)] (D) section 4481 (relating to tax on 
                use of certain vehicles).
          (2) Liabilities incurred before october 1, [1999] 
        2005.--There are hereby appropriated to the Highway 
        Trust Fund amounts equivalent to the taxes which are 
        received in the Treasury after September 30, [1999] 
        2005, and before July 1, [2000] 2006, and which are 
        attributable to liability for tax incurred before 
        October 1, [1999] 2005, under the provisions described 
        in paragraph (1).

           *       *       *       *       *       *       *

          (4) Certain taxes not transferred to highway trust 
        fund.--For purposes of paragraphs (1) and (2), there 
        shall not be taken into account the taxes imposed by--
                  (A) section 4041(d),
                  (B) section 4081 to the extent attributable 
                to the rate specified in section 4081(a)(2)(B),
                  (C) section 4041 or 4081 to the extent 
                attributable to fuel used in a train,
                  (D) in the case of fuels used as described in 
                paragraph (4)(D), (5)(B), or (6)(D) of 
                subsection (c), section 4041 or 4081--
                          (i) with respect to so much of the 
                        rate of tax on gasoline or special 
                        motor fuels as exceeds [11.5] 14.9 
                        cents cents per gallon, and
                          (ii) with respect to so much of the 
                        rate of tax on diesel fuel or kerosene 
                        as exceeds 17.5 cents per gallon,
                  (E) in the case of fuels described in section 
                4041(b)(2)(A), 4041(k), or 4081(c), section 
                4041 or 4081 before October 1, 1999, with 
                respect to a rate equal to 2.5 cents per 
                gallon, or
                  (F) in the case of fuels described in section 
                4081(c)(2), such section before October 1, 
                1999, with respect to a rate equal to 2.8 cents 
                per gallon.
          (5) General revenue deposits of certain taxes on 
        alcohol mixtures.--For purposes of this section, the 
        amounts which would (but for this paragraph) be 
        required to be appropriated under subparagraphs (A), 
        and [(E)] (C) of paragraph (1) shall be reduced by--
                  (A) 0.6 cent per gallon in the case of taxes 
                imposed on any mixture at least 10 percent of 
                which is alcohol (as defined in section 
                4081(c)(3)) if any portion of such alcohol is 
                ethanol, and
                  (B) 0.67 cent per gallon in the case of 
                gasoline or diesel fuel used in producing a 
                mixture described in subparagraph (A).
          (6) Limitation on transfers to highway trust fund.--
                  (A) In general.--Except as provided in 
                subparagraph (B), no amount may be appropriated 
                to the Highway Trust Fund on and after the date 
                of any expenditure from the Highway Trust Fund 
                which is not permitted by this section. The 
                determination of whether an expenditure is so 
                permitted shall be made without regard to--
                          (i) any provision of law which is not 
                        contained or referenced in this title 
                        or in a revenue Act, and
                          (ii) whether such provision of law is 
                        a subsequently enacted provision or 
                        directly or indirectly seeks to waive 
                        the application of this paragraph.
                  (B) Exception for prior obligations.--
                Subparagraph (A) shall not apply to any 
                expenditure to liquidate any contract entered 
                into (or for any amount otherwise obligated) 
                before October 1, 2003, in accordance with the 
                provisions of this section.
  (c) Expenditures From Highway Trust Fund.--
          (1) Federal-aid highway program.--Except as provided 
        in subsection (e), amounts in the Highway Trust Fund 
        shall be available, as provided by appropriation Acts, 
        for making expenditures before October 1, [1998] 2003, 
        to meet those obligations of the United States 
        heretofore or hereafter incurred which are--
                  (A) authorized by law to be paid out of the 
                Highway Trust Fund established by section 209 
                of the Highway Revenue Act of 1956,
                  (B) authorized to be paid out of the Highway 
                Trust Fund under title I or II of the Surface 
                Transportation Assistance Act of 1982,
                  (C) authorized to be paid out of the Highway 
                Trust Fund under the Surface Transportation and 
                Uniform Relocation Assistance Act of 1987, [or]
                  (D) authorized to be paid out of the Highway 
                Trust Fund under the Intermodal Surface 
                Transportation Efficiency Act of [1991.
        [In determining the authorizations under the Acts 
        referred to in the preceding subparagraphs, such Acts 
        shall be applied as in effect on the date of the 
        enactment of the Intermodal Surface Transportation 
        Efficiency Act of 1991.] 1991, or
                  (E) authorized to be paid out of the Highway 
                Trust Fund under the Building Efficient Surface 
                Transportation and Equity Act of 1998.
        In determining the authorizations under the Acts 
        referred to in the preceding subparagraphs, such Acts 
        shall be applied as in effect on the date of the 
        enactment of the Building Efficient Surface 
        Transportation and Equity Act of 1998.
          (2) Transfers from highway trust fund for certain 
        repayments and credits.--
                  (A) In general.--The Secretary shall pay from 
                time to time from the Highway Trust Fund into 
                the general fund of the Treasury amounts 
                equivalent to--
                          (i) the amounts paid before July 1, 
                        [2000] 2006, under--
                                  (I) section 6420 (relating to 
                                amounts paid in respect of 
                                gasoline used on farms),
                                  (II) section 6421 (relating 
                                to amounts paid in respect of 
                                gasoline used for certain 
                                nonhighway purposes or by local 
                                transit systems),
                                  (III) section 6424 (relating 
                                to amounts paid in respect of 
                                lubricating oil used for 
                                certain nontaxable purposes), 
                                and
                                  (IV) section 6427 (relating 
                                to fuels not used for taxable 
                                purposes),
                        on the basis of claims filed for 
                        periods ending before October 1, [1999] 
                        2005, and
                          (ii) the credits allowed under 
                        section 34 (relating to credit for 
                        certain uses of gasoline, special 
                        fuels, and lubricating oil) with 
                        respect to gasoline, special fuels, and 
                        lubricating oil used before October 1, 
                        [1999] 2005.
                The amounts payable from the Highway Trust Fund 
                under this subparagraph or paragraph (3) shall 
                be determined by taking into account only the 
                portion of the taxes which are deposited into 
                the Highway Trust Fund.

           *       *       *       *       *       *       *

          [(3) 1999 floor stocks refunds.--]
          (3) Floor stocks refunds.--The Secretary shall pay 
        from time to time from the Highway Trust Fund into the 
        general fund of the Treasury amounts equivalent to the 
        floor stocks refunds made before July 1, [2000] 2006, 
        under section 6412(a).
          (4) Transfers from the trust fund for motorboat fuel 
        taxes.--
                  [(A) Transfer to boat safety account.--
                          [(i) In general.--The Secretary shall 
                        pay from time to time from the Highway 
                        Trust Fund into the Boat Safety Account 
                        in the Aquatic Resources Trust Fund 
                        amounts (as determined by him) 
                        equivalent to the motorboat fuel taxes 
                        received on or after October 1, 1980, 
                        and before October 1, 1997.
                          [(ii) Limitations.--
                                  [(I) Limit on transfers 
                                during any fiscal year.--The 
                                aggregate amount transferred 
                                under this subparagraph during 
                                any fiscal year shall not 
                                exceed $60,000,000 for each of 
                                fiscal years 1989 and 1990 and 
                                $70,000,000 for each fiscal 
                                year thereafter.
                                  [(II) Limit on amount in 
                                fund.--No amount shall be 
                                transferred under this 
                                subparagraph if the Secretary 
                                determines that such transfer 
                                would result in increasing the 
                                amount in the Boat Safety 
                                Account to a sum in excess of 
                                $60,000,000 for each of fiscal 
                                years 1989 and 1990 and 
                                $70,000,000 for each fiscal 
                                year thereafter.]
                  (A) Transfers to boat safety account.--
                          (i) In general.--The Secretary shall 
                        pay from time to time from the Highway 
                        Trust Fund into the Boat Safety Account 
                        in the Aquatic Resources Trust Fund 
                        amounts (as determined by the 
                        Secretary) equivalent to one-half of 
                        the motorboat fuel taxes received after 
                        September 30, 1998, and before October 
                        1, 2003.
                          (ii) Limit on amount in fund.--No 
                        amount shall be transferred under this 
                        subparagraph during any fiscal year if 
                        the Secretary determines that such 
                        transfer would result in increasing the 
                        unobligated balance in the Boat Safety 
                        Account to a sum in excess of one-half 
                        of the total amount received as 
                        motorboat fuel taxes during the 
                        preceding fiscal year.

           *       *       *       *       *       *       *

          (5) Transfers from the trust fund for small-engine 
        fuel taxes.--
                  (A) In general.--The Secretary shall pay from 
                time to time from the Highway Trust Fund into 
                the Sport Fish Restoration Account in the 
                Aquatic Resources Trust Fund amounts (as 
                determined by him) equivalent to the small-
                engine fuel taxes received on or after December 
                1, 1990 and before October 1, [1998] 2003.

           *       *       *       *       *       *       *

          [(6) Transfers from trust fund of certain 
        recreational fuel taxes, etc.--
                  [(A) In general.--The Secretary shall pay 
                from time to time from the Highway Trust Fund 
                into the National Recreational Trails Trust 
                Fund amounts (as determined by him) equivalent 
                to 0.3 percent (as adjusted under subparagraph 
                (C)) of the total Highway Trust Fund receipts 
                for the period for which the payment is made.
                  [(B) Limitation.--The amount paid into the 
                National Recreational Trails Trust Fund under 
                this paragraph during any fiscal year shall not 
                exceed the amount obligated under section 1302 
                of the Intermodal Surface Transportation 
                Efficiency Act of 1991 (as in effect on the 
                date of the enactment of this paragraph) for 
                such fiscal year to be expended from such Trust 
                Fund.
                  [(C) Adjustment of percentage.--
                          [(i) First year.--Within 1 year after 
                        the date of the enactment of this 
                        paragraph, the Secretary shall adjust 
                        the percentage contained in 
                        subparagraph (A) so that it corresponds 
                        to the revenues received by the Highway 
                        Trust Fund from nonhighway recreational 
                        fuel taxes.
                          [(ii) Subsequent years.--Not more 
                        frequently than once every 3 years, the 
                        Secretary may increase or decrease the 
                        percentage established under clause (i) 
                        to reflect, in the Secretary's 
                        estimation, changes in the amount of 
                        revenues received in the Highway Trust 
                        Fund from nonhighway recreational fuel 
                        taxes.
                          [(iii) Amount of adjustment.--Any 
                        adjustment under clause (ii) shall be 
                        not more than 10 percent of the 
                        percentage in effect at the time the 
                        adjustment is made.
                          [(iv) Use of data.--In making the 
                        adjustments under clauses (i) and (ii), 
                        the Secretary shall take intoaccount 
data on off-highway recreational vehicle registrations and use.
                  [(D) Nonhighway recreational fuel taxes.--For 
                purposes of this paragraph, the term 
                ``nonhighway recreational fuel taxes'' means 
                taxes under section 4041 and 4081 (to the 
                extent deposited into the Highway Trust Fund) 
                with respect to--
                          [(i) fuel used in vehicles on 
                        recreational trails or back country 
                        terrain (including vehicles registered 
                        for highway use when used on 
                        recreational trails, trail access roads 
                        not eligible for funding under title 
                        23, United States Code, or back country 
                        terrain), and
                          [(ii) fuel used in campstoves and 
                        other nonengine uses in outdoor 
                        recreational equipment.
                Such term shall not include small-engine fuel 
                taxes (as defined by paragraph (5)) and taxes 
                which are credited or refunded.
                  [(E) Termination.--No amount shall be paid 
                under this paragraph after September 30, 1997.
          [(7) Limitation on expenditures.--Notwithstanding any 
        other provision of law, in calculating amounts under 
        section 157(a) of title 23, United States Code, and 
        sections 1013(c), 1015(a), and 1015(b) of the 
        Intermodal Surface Transportation Efficiency Act of 
        1991 (Public Law 102-240; 105 Stat. 1914), deposits in 
        the Highway Trust Fund resulting from the amendments 
        made by the Taxpayer Relief Act of 1997 shall not be 
        taken into account.]

           *       *       *       *       *       *       *

  (e) Establishment of Mass Transit Account.--
          (1) * * *
          (2) Transfers to mass transit account.--The Secretary 
        of the Treasury shall transfer to the Mass Transit 
        Account the mass transit portion of the amounts 
        appropriated to the Highway Trust Fund under subsection 
        (b) which are attributable to taxes under sections 4041 
        and 4081 imposed after March 31, 1983. [For purposes of 
        the preceding sentence, the term ``mass transit 
        portion'' means an amount determined at the rate of 
        2.85 cents for each gallon with respect to which tax 
        was imposed under section 4041 or 4081.] For purposes 
        of the preceding sentence, the term ``mass transit 
        portion'' means, for any fuel with respect to which tax 
        was imposed under section 4041 or 4081 and otherwise 
        deposited into the Highway Trust Fund, the amount 
        determined at the rate of--
                  (A) except as otherwise provided in this 
                sentence, 2.86 cents per gallon,
                  (B) 1.43 cents per gallon in the case of any 
                partially exempt methanol or ethanol fuel (as 
                defined in section 4041(m)) none of the alcohol 
                in which consists of ethanol,
                  (C) 1.86 cents per gallon in the case of 
                liquefied natural gas,
                  (D) 2.13 cents per gallon in the case of 
                liquefied petroleum gas, and
                  (E) 9.71 cents per MCF (determined at 
                standard temperature and pressure) in the case 
                of compressed natural gas.
          (3) Expenditures from account.--Amounts in the Mass 
        Transit Account shall be available, as provided by 
        appropriation Acts, for making capital or capital 
        related expenditures before October 1, [1998] 2003 
        (including capital expenditures for new projects) in 
        accordance with--
                  (A) section 5338(a)(1) or (b)(1) of title 49, 
                [or]
                  (B) the Intermodal Surface Transportation 
                Efficiency Act of 1991, or
        [as such Acts are in effect on the date of the 
        enactment of the Intermodal Surface Transportation 
        Efficiency Act of 1991.]
                  (C) the Building Efficient Surface 
                Transportation and Equity Act of 1998,
        as such sections and Acts are in effect on the date of 
        the enactment of the Building Efficient Surface 
        Transportation and Equity Act of 1998.
          [(4) Limitation.--Rules similar to the rules of 
        subsection (d) shall apply to the Mass Transit Account 
        except that subsection (d)(1) shall be applied by 
        substituting ``12-month'' for ``24-month''.]
          (4) Limitation.--Rules similar to the rules of 
        subsection (d) shall apply to the Mass Transit Account.

           *       *       *       *       *       *       *

  (f) Determination of Trust Fund Balances After September 30, 
1998.--For purposes of determining the balances of the Highway 
Trust Fund and the Mass Transit Account after September 30, 
1998--
          (1) the opening balance of the Highway Trust Fund 
        (other than the Mass Transit Account) on October 1, 
        1998, shall be $8,000,000,000,
          (2) the opening balance of the Mass Transit Account 
        on such date shall be $5,500,000,000, and
          (3) no interest on any obligation held by such Fund 
        shall be credited to such Fund if such interest accrues 
        after September 30, 1998.
The Secretary shall cancel obligations held by the Highway 
Trust Fund to reflect the reduction in the balances under this 
subsection.

SEC. 9504. AQUATIC RESOURCES TRUST FUND.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Expenditures from Boat Safety Account.--Amounts in the 
Boat Safety Account shall be available, as provided by 
appropriation Acts, for making expenditures before April 1, 
[1998] 2003, to carry out the purposes of section 13106 of 
title 46, United States Code (as in effect on [October 1, 1988] 
the date of the enactment of the Building Efficient Surface 
Transportation and Equity Act of 1998).
  (d) Limitation on Transfers to Aquatic Resources Trust 
Fund.--
          (1) In general.--Except as provided in paragraph (2), 
        no amount may be appropriated or paid to any Account in 
        theAquatic Resources Trust Fund on and after the date 
of any expenditure from any such Account which is not permitted by this 
section. The determination of whether an expenditure is so permitted 
shall be made without regard to--
                  (A) any provision of law which is not 
                contained or referenced in this title or in a 
                revenue Act, and
                  (B) whether such provision of law is a 
                subsequently enacted provision or directly or 
                indirectly seeks to waive the application of 
                this subsection.
          (2) Exception for prior obligations.--Paragraph (1) 
        shall not apply to any expenditure to liquidate any 
        contract entered into (or for any amount otherwise 
        obligated) before October 1, 2003, in accordance with 
        the provisions of this section.
  [(d)] (e) Cross Reference.--

          For provision transferring motorboat fuels taxes to Boat 
        Safety Account and Sport Fish Restoration Account, see section 
        9503(c)(4).

           *       *       *       *       *       *       *


[SEC. 9511. NATIONAL RECREATIONAL TRAILS TRUST FUND.

  [(a) Creation of Trust Fund..--There is established in the 
Treasury of the United States a trust fund to be known as the 
``National Recreational Trails Trust Fund'', consisting of such 
amounts as may be credited or paid to such Trust Fund as 
provided in this section, section 9503(c)(6), or section 
9602(b).
  [(b) Crediting of Certain Unexpended Funds..--There shall be 
credited to the National recreational trails Trust Fund amounts 
returned to such Trust Fund under section 1302(e)(8) of the 
Intermodal Surface Transportation Efficiency Act of 1991.
  [(c) Expenditures from Trust Fund..--Amounts in the National 
Recreational Trails Trust Fund shall be available, as provided 
in appropriation Acts, for making expenditures before October 
1, 1997, to carry out the purposes of sections 1302 and 1303 of 
the Intermodal Surface Transportation Efficiency Act of 1991, 
as in effect on the date of the enactment of such Act.]

           *       *       *       *       *       *       *

                              ----------                              


    SECTION 201 OF THE LAND AND WATER CONSERVATION FUND ACT OF 1965

         transfers to and from land and water conservation fund

  Sec. 201. (a) * * *
  (b) There shall be paid from time to time from the land and 
water conservation fund into the general fund of the Treasury 
amounts estimated by the Secretary of the Treasury as 
equivalent to--
          (1) the amounts paid before October 1, [1998] 2004, 
        under section 6421 of the Internal Revenue Code of 1954 
        (relating to amounts paid in respect of gasoline used 
        for certain nonhighway purposes or by local transit 
        systems) with respect to gasoline used after December 
        31, 1964, in motorboats, on the basis of claims filed 
        for periods ending before October 1, [1997] 2003; and
          (2) 80 percent of the floor stocks refunds made 
        before October 1, [1998] 2004, under section 6412(a)(2) 
        of such Code with respect to gasoline to be used in 
        motorboats.
                              ----------                              


            SECTION 1032 OF THE TAXPAYER RELIEF ACT OF 1997

SEC. 1032. KEROSENE TAXED AS DIESEL FUEL.

  (a) * * *

           *       *       *       *       *       *       *

  [(f) Effective Date.--The amendments made by this section 
shall take effect on July 1, 1998.]
  (f) Effective Dates.--
          (1) Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on 
        July 1, 1998.
          (2) The amendment made by subsection (d) shall take 
        effect on July 1, 2000.

                                
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