[House Report 105-5]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                      105-5
_______________________________________________________________________


 
      AIRPORT AND AIRWAY TRUST FUND TAX REINSTATEMENT ACT OF 1997

                                _______
                                

 February 13, 1997.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


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

                              R E P O R T

                        [To accompany H.R. 668]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 668) to amend the Internal Revenue Code of 1986 to 
reinstate the Airport and Airway Trust Fund excise taxes, and 
for other purposes, having considered the same, report 
favorably thereon without amendment, and recommend that the 
bill do pass.

                                CONTENTS

                                                                   Page
  I. Summary and Background...........................................2
          A. Summary.............................................     2
          B. Background and Reasons for Legislation..............     2
          C. Legislative History.................................     3
 II. Explanation of the Bill..........................................3
III. Vote of the Committee............................................6
 IV. Budget Effects of the Bill.......................................6
          A. Committee Estimates of Budgetary Effects............     6
          B. Budget Authority and Tax Expenditures...............     8
          C. Cost Estimate Prepared by the Congressional Budget 
              Office.............................................     8
  V. Other Matters To Be Discussed Under the Rules of the House.......9
          A. Committee Oversight Findings and Recommendations....     9
          B. Summary of Findings and Recommendations of the 
              Committee on Government Reform and Oversight.......     9
          C. Constitutional Authority Statement..................    10
          D. Information Relating to Unfunded Mandates...........    10
          E. Applicability of House Rule XXI5(c).................    10
 VI. Changes in Existing Law Made by the Bill, as Reported...........11

                       I. SUMMARY AND BACKGROUND

                               A. Summary

    H.R. 668, as reported by the Committee on Ways and Means, 
provides for reinstatement of the excise taxes which fund the 
Airport and Airway Trust Fund (the ``Airport Trust Fund'') 
during the period beginning seven days after the date of 
enactment and ending after September 30, 1997. The bill further 
provides for transfer of all revenues derived from these taxes 
(including those deposited and currently scheduled to be 
deposited in the Treasury but which cannot be transferred under 
present law) to the Airport Trust Fund, and includes provisions 
to ensure prompt deposit of tax receipts with the Treasury once 
the excise taxes are reinstated.

                 B. Background and Need For Legislation

    The operations and capital programs of the Federal Aviation 
Administration (the ``FAA'') are financed with appropriations 
from both the Airport Trust Fund and the General Fund. In 
general, capital programs are financed from the Airport Trust 
Fund and operational expenses (e.g., air traffic controllers) 
are financed from a mix of General Fund and Airport Trust Fund 
revenues. The Airport Trust Fund taxes were last imposed during 
the period from August 27, 1996, through December 31, 1996. 
Receipts from these taxes that were received in the Treasury 
Department before January 1, 1997, are authorized to be 
deposited in the Airport Trust Fund.
    Recently, it was learned that the Treasury Department, 
which credits revenues to the Airport Trust Fund based on 
estimated receipts, has credited the Airport Trust Fund 
approximately $1.2 billion of tax receipts from transportation 
sold during the months of September, October, and November, 
1996, which has not as yet been received by the Treasury 
Department. The delay in receipts was caused by air carriers 
that (with Internal Revenue Service approval) delayed remitting 
taxes collected from their customers during this period until 
the air carriers file their quarterly excise tax returns for 
the fourth quarter of 1996 on February 28, 1997. The Treasury 
Department now must withdraw these amounts from the Airport 
Trust Fund.
    As a result of this reduction in the Airport Trust Fund's 
balance, the uncommitted monies in the Airport Trust Fund will 
be sufficient only to fund the FAA's operating expenses through 
the end of the 1997 fiscal year, plus capital programs (at 
previously anticipated levels) through March 1997. Further, 
because this information reflects only the best available 
estimates and because of provisions of certain contracts for 
multiple phase projects, the FAA may be required to stop making 
new capital commitments and to begin providing notice that it 
intends to terminate other contracts by March 1, 1997, or 
earlier, absent legislative action.
    By reinstating both the prior-law excise taxes and the 
authority to transfer tax revenues to the Airport Trust Fund, 
the bill will enable the FAA to avoid possible shut-down of its 
capital programs and to finance the agency's activities and 
programs at least through the end of the 1997 fiscal year.

                         C. Legislative History

Committee bill

    H.R. 668 was introduced by Chairman Archer on February 11, 
1997. The bill was considered in a Committee on Ways and Means 
markup on February 12, 1997, and was ordered favorably 
reported, without amendment, by voice vote.

Legislative hearing

    The Committee on Ways and Means held a public hearing on 
February 5, 1997, on the solvency of the Airport Trust Fund and 
the impact of the recently discovered information regarding the 
delay in deposit of air transportation excise taxes on FAA 
operations and capital programs. The Committee received 
testimony from representatives of the Departments of the 
Treasury and Transportation.

                      II. EXPLANATION OF THE BILL

                         Prior and Present Law

Tax rates

    Before January 1, 1997, excise taxes were imposed on 
commercial air passenger and freight transportation and on 
fuels used in general aviation (i.e., transportation on non-
common carrier aircraft which is not for hire) to fund the 
Airport Trust Fund. The Airport Trust Fund was established in 
1970 to finance a major portion of the costs of the Federal 
Aviation Administration (the ``FAA'') services and grant 
programs for State and local government airports. Before 
establishment of the Airport Trust Fund, Federal aviation 
expenditures were financed from general revenues; General Fund 
domestic air passenger and fuels taxes were imposed during this 
period. The structure of the Airport Trust Fund excise taxes 
has remained generally unchanged, except for rates, since 1970.
    Before 1997, the Airport Trust Fund excise taxes included 
three taxes on commercial air transportation:
          (1) A 10-percent excise tax on domestic air passenger 
        transportation;
          (2) A $6 per person international air passenger 
        departure tax; and
          (3) A 6.25-percent domestic air freight excise tax.
    During the same period, general aviation (e.g., corporate 
aircraft) was subject to Airport Trust Fund excise taxes on the 
fuels it used rather than the commercial aviation passenger 
ticket and freight excise taxes. The Airport Trust Fund rates 
for these excise taxes were 17.5 cents per gallon for jet fuel 
and 15 cents per gallon for aviation gasoline.

Collection and deposit of tax

    The air passenger ticket and freight excise taxes are 
collected from passengers and freight shippers by the 
commercial air carriers. The air carriers then remit the funds 
to the Treasury Department; however, the air carriers are not 
required to remit monies immediately. Excise tax returns are 
filed quarterly (similar to annual income tax returns) with 
taxes being deposited on a semi-monthly basis (similar to 
estimated income taxes). For air transportation sold during a 
semi-monthly period, air carriers may elect to treat the taxes 
as collected on the last day of the first week of the second 
following semi-monthly period. 1 Under these ``deemed 
collected'' rules, for example, the taxes on air transportation 
sold between October 1 and October 15, are treated as collected 
by the air carriers on or before November 7. These amounts 
generally must be deposited with the Treasury by November 10. 
Thus, on average, revenues from commercial air passenger 
transportation generally are not received by the Federal 
Government until approximately one month after the air carrier 
actually sells the transportation.
---------------------------------------------------------------------------
    \1\ Air carriers generally make this election because it allows 
them to delay remitting tax beyond the date when remittance otherwise 
would be required.
---------------------------------------------------------------------------
    Like income tax withholding and estimated tax payments, the 
excise taxes contain payment safe harbors for avoiding 
underpayment penalties. In general, Treasury Department 
regulations provide that commercial air carriers are not 
subject to underpayment penalties if their semi-monthly 
deposits of passenger ticket and freight waybill taxes for a 
quarter equal at least the amount of taxes they were required 
to remit during the second preceding calendar quarter (the 
``look back'' rules). For example, air carriers generally would 
not be subject to underpayment penalties if their semi-monthly 
deposits for the fourth quarter (October 1 through December 31) 
equaled at least the amount they were required to remit during 
the second quarter (April 1 through June 30) of the same year.
    In a general information letter to the Air Transport 
Association of America, dated August 30, 1996, the Internal 
Revenue Service advised the air carriers that, notwithstanding 
that no excise taxes were required to be remitted during a look 
back quarter, applicable Treasury Department regulations 
permitted the air carriers to continue to avail themselves of 
the safe harbor and avoid remitting taxes collected from 
consumers during September, October, and November of 1996 until 
the air carriers file their quarterly excise tax returns for 
that period on February 28, 1997. (Similarly, the air carriers 
are expected to retain most taxes collected from consumers 
during December 1996 until their excise tax returns for the 
first quarter of 1997 are due on May 31, 1997.)
    On February 7, 1997, the Treasury Department announced that 
it will modify its regulations, effective for taxes imposed 
after February 10, 1997. (See, Treasury Notice 97-15, February 
7, 1997.) The modified regulations will provide that the look-
back safe harbor is not available for calculating deposits of 
taxes that were not in effect throughout the look-back quarter. 
Thus, a situation similar to that which arose with respect to 
air transportation taxes imposed in 1996 could not occur again 
because those taxes would not have been in effect throughout 
the second preceding calendar quarter. The Treasury Department 
notice does not change the deposit rules applicable to air 
transportation taxes imposed during the fourth quarter of 1996.

Trust Fund deposits

    The Airport Trust Fund receives gross receipts attributable 
to the excise taxes described above. Present law provides that 
taxes received by the Treasury Department through the end of 
the period when the taxes were last imposed (i.e., through 
December 31, 1996) are deposited in the Airport Trust Fund. 
Taxes received after December 31, 1996, may not be transferred 
to the Airport Trust Fund under present law.
    The Treasury Department credited the Airport Trust Fund 
with approximately $1.2 billion based on incorrect estimates of 
excise tax deposits. Subsequently, the Treasury learned that 
the air carriers would not remit taxes imposed in September, 
October, and November of 1996 to the Treasury until February 
28, 1997. The Treasury Department plans to reverse this error. 
As a result, the combination of the remaining uncommitted 
balance in the Airport Trust Fund and General Fund 
appropriations available to the FAA are believed to be 
sufficient only to support the FAA's operational expenses 
through the 1997 fiscal year and to allow new capital 
commitments (assuming previously anticipated commitment levels) 
to be made through March 1997. However, because best available 
estimates of the effect of this error on the FAA budget do not 
include any estimates of the costs of terminating certain 
multiple phase contracts, the FAA may have to stop making new 
commitments and begin notifying contractors of its intent to 
terminate multiple phase contracts on March 1, 1997, or 
earlier, absent legislative action.

                       Explanation of Provisions

Reinstate air transportation excise taxes

    The bill reinstates the air transportation excise taxes 
that expired after December 31, 1996, during the period 
beginning seven days after the date of enactment and ending 
after September 30, 1997.

Transfer revenues to the Airport Trust Fund

    The bill authorizes the Treasury Department to transfer to 
the Airport Trust Fund receipts attributable to excise taxes 
described above that are imposed on commercial and general 
aviation. This will permit transfer of receipts attributable to 
taxes imposed both during the period August 27, 1996, through 
December 31, 1996, and during the period beginning seven days 
after the date of enactment.

Modify Treasury Department tax deposit regulations

    To prevent a delay in depositing tax similar to that which 
occurred with respect to the fourth quarter of 1996, the 
provisions of Treasury Department regulations providing an 
exception to penalties for underpayment of estimated excise 
taxes based on a look-back period will be made inapplicable 
when tax was not imposed throughout the look back period. In 
such a case, taxpayers could continue to use an alternative 
safe harbor that provides that no underpayment penalty is 
imposed as long as the taxpayer has paid at least 95 percent of 
the current quarter's liability. The Treasury Department has 
recently announced that it will modify its regulations in this 
manner for taxes imposed after February 10, 1997.

                             Effective Date

    The provisions reinstating the commercial air 
transportation excise taxes are effective for (1) 
transportation beginning during the period beginning seven days 
after the date of enactment and ending after September 30, 
1997, and (2) amounts paid during such period for 
transportation beginning after September 30, 1997. If the air 
transportation excise taxes are not extended for transportation 
occurring after September 30, 1997, refunds would be provided 
for any taxes paid on passenger and freight transportation 
purchased before October 1, 1997, for transportation that 
occurs at a time when the taxes are not in effect. No tax is 
imposed on any payment made before seven days after the date of 
enactment (other than certain payments for freight 
transportation made between related parties), even if the 
transportation occurs during the period beginning seven days 
after the date of enactment and ending after September 30, 
1997.
    The provisions reinstating the general aviation gasoline 
excise tax are effective for gasoline removed during the period 
beginning seven days after the date of enactment and ending 
after September 30, 1997. The provision reinstating the general 
aviation jet fuel excise tax is effective for fuels sold by 
producers during the same period. Floor stocks taxes are 
imposed on these fuels held beyond the removal or producer 
level on the date which is seven days after the date of 
enactment.
    The provisions relating to transfer of receipts to the 
Airport Trust Fund and the modification of the Treasury 
Department's excise tax deposit regulations are effective on 
the date of enactment. Consistent with Treasury Notice 97-15, 
described above, the modification to the Treasury Department's 
excise tax deposit regulations will not affect deposits of 
taxes imposed during the fourth quarter of 1996; those deposits 
will continue to be made under the Treasury Department 
regulations as in effect when liability for the taxes arose.

                       III. VOTE OF THE COMMITTEE

    In compliance with clause 2(l)(2)(B) of rule XI of the 
Rules of the House of Representatives, the following statement 
is made concerning the vote on the motion to report the bill. 
The bill (H.R. 668) was ordered favorably reported, without 
amendment, by voice vote on February 12, 1997, with a quorum 
present.

                     IV. BUDGET EFFECTS OF THE BILL

                         A. Committee 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 estimated budget effects of the bill as 
reported.
    The bill, as reported, is estimated to increase net budget 
receipts by $2.7 billion for fiscal years 1997 and 1998. (See 
the following revenue table.)

      ESTIMATED BUDGET EFFECTS OF AN EXTENSION OF THE AIRPORT AND AIRWAY TRUST FUND EXCISE TAXES THROUGH SEPTEMBER 30, 1997; FISCAL YEARS 1997-2007     
                                                                [In millions of dollars]                                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------
           Provision              Effective    1997    1998    1999    2000    2001    2002    2003    2004    2005    2006    2007    1997-02   1997-07
--------------------------------------------------------------------------------------------------------------------------------------------------------
Extension of Airport and        tp7data DOE    2,730     -54  ......  ......  ......  ......  ......  ......  ......  ......  ......     2,676    2,676 
 Airway Trust Fund excise                                                                                                                               
 taxes through 9/30/97.                                                                                                                                 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note. Details may not add to totals due to rounding.                                                                                                    
                                                                                                                                                        
Legend for ``Effective'' column: tp7data DOE=tickets purchased 7 days after date of enactment for travel 7 days after date of enactment                 

                B. 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 the bill as reported 
involve no new or increased budget authority.

                            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 the bill as reported 
involve no new or increased tax expenditures.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with subdivision (C) of clause 2(l)(3) of 
rule XI of the Rules of the House of Representatives, requiring 
cost estimate prepared by the Congressional Budget Office, the 
Committee advises that the Congressional Budget Office has 
submitted the following statement on this bill.
                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, February 12, 1997.
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 H.R. 668, the 
``Airport and Airway Trust Fund Tax Reinstatement Act of 
1997,'' as ordered reported by the House Committee on Ways and 
Means on February 12, 1997. H.R. 668 would reinstate the 
Airport and Airway Trust Fund excise taxes through September 
30, 1997. The JCT estimates that this bill would increase 
governmental receipts by $2.730 billion in fiscal year 1997 and 
would decrease revenues by $0.054 billion in fiscal year 1998. 
The revenue effects of the bill are summarized in the table 
below.

                 REVENUE EFFECTS OF THE AIRPORT AND AIRWAY TRUST FUND REINSTATEMENT ACT OF 1997                 
                                    [By fiscal year, in billions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                   1997       1998       1999       2000       2001     2002-07 
----------------------------------------------------------------------------------------------------------------
Proposed changes..............................      2.730     -0.054      0.000      0.000      0.000      0.000
----------------------------------------------------------------------------------------------------------------

    In accordance with the requirements of Public Law 104-4, 
the Unfunded Mandates Reform Act of 1995, JCT has determined 
that the bill contains an intergovernmental mandate. The 
provision to reinstate the Airport and Airway Trust Fund excise 
taxes through September 30, 1997, imposes a federal 
intergovernmental mandate because State, local, and tribal 
governments will be required to pay the requisite taxes for 
commercial air travel by their employees. JCT estimates that 
the direct costs of complying with this federal 
intergovernmental mandate will not exceed $50 million in any of 
the first five fiscal years.
    In addition, JCT has determined that the bill contains a 
federal private sector mandate. The bill would impose direct 
costs on the private sector of more than $100 million in fiscal 
year 1997. The JCT estimates the direct mandate cost of the tax 
increase in the bill would total no more than $2,730 million in 
1997, as shown below:

                                         FEDERAL PRIVATE SECTOR MANDATES                                        
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                     1997         1998         1999         2000         2001   
----------------------------------------------------------------------------------------------------------------
Direct cost of tax increase....................        2,730          -54            0            0            0
----------------------------------------------------------------------------------------------------------------

    Section 252 of the Balanced Budget and Emergency Deficit 
Control Act of 1985 sets up pay-as-you-go procedures for 
legislation affecting receipts or direct spending through 1998. 
Because the bill would affect receipts, pay-as-you-go 
procedures would apply to the bill. These effects are 
summarized in the table below.

                      PAY-AS-YOU-GO CONSIDERATIONS                      
                [By fiscal year, in millions of dollars]                
------------------------------------------------------------------------
                                         1997                1998       
------------------------------------------------------------------------
Changes in receipts.............              2,730                 -54 
Changes in outlays..............              (\1\)      Not applicable 
------------------------------------------------------------------------

    If you wish further details, please feel free to contact me 
or your staff may wish to contact Stephanie Weiner.
            Sincerely,
                                         June E. O'Neill, Director.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

          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 
status of the balance of the Airport Trust Fund and the need 
for expeditious reinstatement of the existing Airport Trust 
Fund excise taxes to provide adequate funding during fiscal 
year 1997 for the operations and capital programs of the FAA 
that the Committee concluded that it is appropriate to enact 
the provisions contained in the bill as reported.
    The Committee on Ways and Means held a public hearing on 
this subject on February 5, 1997.

    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 this Committee by the Committee on Government 
Reform and Oversight with respect to the provisions contained 
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 to extend 
the Airport and Airway Trust Fund excise taxes through 
September 30, 1997, impose a Federal mandate on the private 
sector and a Federal intergovernmental mandate. The costs 
required to comply with the Federal private sector mandate 
generally are no greater than the revenue estimate for the 
provisions. The provisions enable the FAA to avoid possible 
shutdown of its capital programs and to finance the agency's 
activities and programs at least through the end of the 1997 
fiscal year. The Committee believes these benefits of the 
provisions are greater than the costs required to comply with 
the Federal mandates contained in the bill.
    The provisions to reinstate the Airport and Airway Trust 
Fund taxes through September 30, 1997, impose a Federal 
intergovernmental mandate because State, local, and tribal 
governments will be required to pay the requisite excise taxes 
for commercial air travel by State, local, and tribal 
government employees. The staff of the Joint Committee on 
Taxation estimates that the direct costs of complying with this 
Federal intergovernmental mandate will not exceed $50,000,000 
in either the first fiscal year or in any one of the 4 fiscal 
years following the first fiscal year. The Committee intends 
that the Federal intergovernmental mandate be unfunded because 
the Airport and Airway Trust Fund excise taxes are intended to 
fund the maintenance of U.S. airports and airways and the 
Committee believes that it is appropriate for State, local, and 
tribal governments to continue to bear their allocable share of 
the responsibility for such funding.
    The provisions reinstating the Airport and Airway Trust 
Fund excise taxes are imposed both on the private sector and on 
State, local, and tribal governments and, thus, do not affect 
the competitive balance between such governments and the 
private sector.

                 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 the bill do not 
involve any Federal income tax rate increase within the meaning 
of the rule (as the bill only concerns reinstatement of prior-
law Airport Trust Fund excise taxes and transfers of such tax 
revenues to the Airport Trust Fund).

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

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, 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) * * *
          * * * * * * *
  (c) Noncommercial aviation.--
          (1) * * *
          * * * * * * *
          [(3) Termination.--The taxes imposed by paragraph (1) 
        shall apply during the period beginning on September 1, 
        1982, and ending on December 31, 1995, and during the 
        period beginning on the date which is 7 calendar days 
        after the date of the enactment of the Small Business 
        Job Protection Act of 1996 and ending on December 31, 
        1996. The termination under the preceding sentence 
        shall not apply to so much of the tax imposed by 
        paragraph (1) as does not exceed 4.3 cents per gallon.]
          (3) Termination.--The rate of the taxes imposed by 
        paragraph (1) shall be 4.3 cents per gallon--
                  (A) after December 31, 1996, and before the 
                date which is 7 days after the date of the 
                enactment of the Airport and Airway Trust Fund 
                Tax Reinstatement Act of 1997, and
                  (B) after September 30, 1997.
          * * * * * * *

                 CHAPTER 32--MANUFACTURERS EXCISE TAXES

          * * * * * * *

               Subchapter A--Automotive and Related Items

          * * * * * * *

                      PART III--PETROLEUM PRODUCTS

          * * * * * * *

                  Subpart A--Gasoline and Diesel Fuel

          * * * * * * *

SEC. 4081. IMPOSITION OF TAX.

  (a) * * *
          * * * * * * *
  (d) Termination.--
          [(1) In general.--On and after October 1, 1999, the 
        rates of tax specified in clauses (i) and (iii) of 
        subsection (a)(2)(A) (other than the tax on aviation 
        gasoline) shall be 4.3 cents per gallon.
          [(2) Aviation gasoline.--On and after January 1, 
        1997, the rate specified in subsection (a)(2)(A)(ii) 
        shall be 4.3 cents per gallon.]
          (1) In general.--The rates of tax specified in 
        clauses (i) and (iii) of subsection (a)(2)(A) shall be 
        4.3 cents per gallon after September 30, 1999.
          (2) Aviation gasoline.--The rate of tax specified in 
        subsection (a)(2)(A)(ii) shall be 4.3 cents per 
        gallon--
                  (A) after December 31, 1996, and before the 
                date which is 7 days after the date of the 
                enactment of the Airport and Airway Trust Fund 
                Tax Reinstatement Act of 1997, and
                  (B) after September 30, 1997.
          (3) Leaking underground storage tank trust fund 
        financing rate.--The Leaking Underground Storage Tank 
        Trust Fund financing rate under subsection (a)(2) shall 
        not apply after December 31, 1995.
          [(3) Aviation gasoline.--After December 31, 1996, the 
        rate of tax specified in subsection (a)(2)(A)(i) on 
        aviation gasoline shall be 4.3 cents per gallon.]
          * * * * * * *

                        Subpart B--Aviation Fuel

          * * * * * * *

SEC. 4091. IMPOSITION OF TAX.

  (a) * * *
  (b) Rate of tax.--
          (1) * * *
          * * * * * * *
          (3) Termination.--
                  [(A) The rate of tax specified in paragraph 
                (1) shall be 4.3 cents per gallon--
                          [(i) after December 31, 1995, and 
                        before the date which is 7 calendar 
                        days after the date of the enactment of 
                        the Small Business Job Protection Act 
                        of 1996, and
                          [(ii) after December 31, 1996.]
                  (A) The rate of tax specified in paragraph 
                (1) shall be 4.3 cents per gallon--
                          (i) after December 31, 1996, and 
                        before the date which is 7 days after 
                        the date of the enactment of the 
                        Airport and Airway Trust Fund Tax 
                        Reinstatement Act of 1997, and
                          (ii) after September 30, 1997.
          * * * * * * *

                  CHAPTER 33--FACILITIES AND SERVICES

          * * * * * * *

                  Subchapter C--Transportation By Air

          * * * * * * *

                            PART I--PERSONS

          * * * * * * *

SEC. 4261. IMPOSITION OF TAX.

  (a) * * *
          * * * * * * *
  [(g) Termination.--The taxes imposed by this section shall 
apply with respect to transportation beginning after August 31, 
1982, and before January 1, 1996, and to transportation 
beginning on or after the date which is 7 calendar days after 
the date of the enactment of the Small Business Job Protection 
Act of 1996 and before January 1, 1997.]
  (g) Application of Taxes.--
          (1) In general.--The taxes imposed by this section 
        shall apply to--
                  (A) transportation beginning during the 
                period--
                          (i) beginning on the 7th day after 
                        the date of the enactment of the 
                        Airport and Airway Trust Fund Tax 
                        Reinstatement Act of 1997, and
                          (ii) ending on September 30, 1997, 
                        and
                  (B) amounts paid during such period for 
                transportation beginning after such period.
          (2) Refunds.--If, as of the date any transportation 
        begins, the taxes imposed by this section would not 
        have applied to such transportation if paid for on such 
        date, any tax paid under paragraph (1)(B) with respect 
        to such transportation shall be treated as an 
        overpayment.
          * * * * * * *

                           PART II--PROPERTY

          * * * * * * *

SEC. 4271. IMPOSITION OF TAX.

  (a) * * *
          * * * * * * *
  [(d) Termination.--The tax imposed by subsection (a) shall 
apply with respect to transportation beginning after August 31, 
1982, and before January 1, 1996, and to transportation 
beginning on or after the date which is 7 calendar days after 
the date of the enactment of the Small Business Job Protection 
Act of 1996 and before January 1, 1997.]
  (d) Application of Tax.--
          (1) In general.--The tax imposed by subsection (a) 
        shall apply to--
                  (A) transportation beginning during the 
                period--
                          (i) beginning on the 7th day after 
                        the date of the enactment of the 
                        Airport and Airway Trust Fund Tax 
                        Reinstatement Act of 1997, and
                          (ii) ending on September 30, 1997, 
                        and
                  (B) amounts paid during such period for 
                transportation beginning after such period.
          (2) Refunds.--If, as of the date any transportation 
        begins, the taxes imposed by this section would not 
        have applied to such transportation if paid for on such 
        date, any tax paid under paragraph (1)(B) with respect 
        to such transportation shall be treated as an 
        overpayment.
          * * * * * * *

        Subtitle H--Financing of Presidential Election Campaigns

          * * * * * * *

                      CHAPTER 98--TRUST FUND CODE

          * * * * * * *

               Subchapter A--Establishment of Trust Funds

          * * * * * * *

SEC. 9502. AIRPORT AND AIRWAY TRUST FUND.

  (a) * * *
  [(b) Transfer to Airport and Airway Trust Fund of Amounts 
Equivalent to Certain Taxes.--There is hereby appropriated to 
the Airport and Airway Trust Fund--
          [(1) amounts equivalent to the taxes received in the 
        Treasury after August 31, 1982, and before January 1, 
        1997, under subsections (c) and (e) of section 4041 
        (taxes on aviation fuel) and under sections 4261 and 
        4271 (taxes on transportation by air);
          [(2) amounts determined by the Secretary of the 
        Treasury to be equivalent to the taxes received in the 
        Treasury after August 31, 1982, and before January 1, 
        1997, under section 4081 (to the extent of 15 cents per 
        gallon), with respect to gasoline used in aircraft;
          [(3) amounts determined by the Secretary to be 
        equivalent to the taxes received in the Treasury before 
        January 1, 1997, under section 4091 (to the extent 
        attributable to the Airport and Airway Trust Fund 
        financing rate); and
          [(4) amounts determined by the Secretary of the 
        Treasury to be equivalent to the taxes received in the 
        Treasury after August 31, 1982, and before January 1, 
        1997, under section 4071, with respect to tires of the 
        types used on aircraft.]
  (b) Transfers to Airport and Airway Trust Fund.--There are 
hereby appropriated to the Airport and Airway Trust Fund 
amounts equivalent to--
          (1) the taxes received in the Treasury under--
                  (A) subsections (c) and (e) of section 4041 
                (relating to aviation fuels),
                  (B) sections 4261 and 4271 (relating to 
                transportation by air),
                  (C) section 4081 (relating to gasoline) with 
                respect to aviation gasoline (to the extent 
                that the rate of the tax on such gasoline 
                exceeds 4.3 cents per gallon), and
                  (D) section 4091 (relating to aviation fuel) 
                to the extent attributable to the Airport and 
                Airway Trust Fund financing rate, and
          (2) the amounts determined by the Secretary of the 
        Treasury to be equivalent to the amounts of civil 
        penalties collected under section 47107(n) of title 49, 
        United States Code.
          * * * * * * *
  (f) Definition of airport and airway trust fund financing 
rate.--For purposes of this section--
          (1) * * *
          * * * * * * *
          [(3) Termination.--Notwithstanding the preceding 
        provisions of this subsection, the Airport and Airway 
        Trust Fund financing rate shall be zero with respect 
        to--
                  [(A) taxes imposed after December 31, 1995, 
                and before the date which is 7 calendar days 
                after the date of the enactment of the Small 
                Business Job Protection Act of 1996 and
                  [(B) taxes imposed after December 31, 1996.]
          (3) Termination.--Notwithstanding the preceding 
        provisions of this subsection, the Airport and Airway 
        Trust Fund financing rate shall be zero with respect to 
        taxes imposed during any period that the rate of the 
        tax imposed by section 4091(b)(1) is 4.3 cents per 
        gallon.
          * * * * * * *

                                
