[House Report 109-13]
[From the U.S. Government Publishing Office]
109th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 109-13
======================================================================
HIGHWAY REAUTHORIZATION TAX ACT OF 2005
_______
March 8, 2005.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Thomas, from the Committee on Ways and Means, submitted the
following
R E P O R T
[To accompany H.R. 996]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 996) to amend the Internal Revenue Code of 1986 to
provide for the extension of highway-related taxes and trust
funds, 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............................................3
II. Explanation of the Bill...........................................4
A. Extension of Highway Trust Fund and Aquatic Resources
Trust Fund Expenditure Authority and Related Taxes
(sec. 2 of the bill and secs. 4041, 4051, 4071, 4081,
4221, 4481, 4482, 4483, 6412, 9503, and 9504 of the
Code)................................................ 4
B. Fuels-Related Technical Corrections to American Jobs
Creation Act of 2004 (``AJCA'') (sec. 3 of the bill
and secs. 4081 and 6427 of the Code)................. 7
1. Volumetric ethanol excise tax credit (sec. 301 of
AJCA)............................................ 7
2. Aviation-grade kerosene (sec. 853 of AJCA)........ 7
III.Votes of the Committee............................................8
IV. Budget Effects of the Bill........................................8
V. Other Matters To Be Discussed Under the Rules of the House.......13
VI. Changes in Existing Law Made by the Bill, as Reported............14
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Highway Reauthorization Tax Act of
2005''.
SEC. 2. EXTENSION OF HIGHWAY-RELATED TAXES AND TRUST FUNDS.
(a) Extension of Taxes.--
(1) In general.--The following provisions of the Internal
Revenue Code of 1986 are each amended by striking ``2005'' each
place it appears and inserting ``2011'':
(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).
(C) Section 4041(m)(1) (relating to certain alcohol
fuels).
(D) Section 4051(c) (relating to termination of tax
on heavy trucks and trailers).
(E) Section 4071(d) (relating to termination of tax
on tires).
(F) Section 4081(d)(1) (relating to termination of
tax on gasoline, diesel fuel, and kerosene).
(G) Section 4481(f) (relating to period tax in
effect).
(H) Section 4482(c)(4) (relating to taxable period).
(I) Section 4482(d) (relating to special rule for
taxable period in which termination date occurs).
(2) Floor stocks refunds.--Section 6412(a)(1) of such Code
(relating to floor stocks refunds) is amended--
(A) by striking ``2005'' each place it appears and
inserting ``2011'', and
(B) by striking ``2006'' each place it appears and
inserting ``2012''.
(b) Extension of Certain Exemptions.--The following provisions of
such Code are each amended by striking ``2005'' and inserting ``2011'':
(1) Section 4221(a) (relating to certain tax-free sales).
(2) Section 4483(h) (relating to termination of exemptions
for highway use tax).
(c) Extension of Deposits Into Trust Funds.--
(1) In general.--Paragraphs (1) and (2) of subsection (b),
and paragraphs (2) and (3) of subsection (c), of section 9503
of such Code (relating to the Highway Trust Fund) are each
amended--
(A) by striking ``2005'' each place it appears and
inserting ``2011'', and
(B) by striking ``2006'' each place it appears and
inserting ``2012''.
(2) Motorboat and small-engine fuel tax transfers.--
(A) In general.--Paragraphs (4)(A)(i) and (5)(A) of
section 9503(c) of such Code are each amended by
striking ``2005'' and inserting ``2011''.
(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 ``2003'' and inserting
``2009'', and
(ii) by striking ``2004'' each place it
appears and inserting ``2010''.
(d) Extension and Expansion of Expenditures From Trust Funds.--
(1) Highway trust fund.--
(A) Highway account.--Paragraph (1) of section
9503(c) of such Code is amended--
(i) in the matter before subparagraph (A), by
striking ``June 1, 2005'' and inserting
``October 1, 2009'',
(ii) by striking ``or'' at the end of
subparagraph (J),
(iii) by striking the period at the end of
subparagraph (K) and inserting ``, or'',
(iv) by inserting after subparagraph (K) the
following new subparagraph:
``(L) authorized to be paid out of the Highway Trust
Fund under the Transportation Equity Act: A Legacy for
Users.'', and
(v) in the matter after subparagraph (L), as
added by clause (iv), by striking ``Surface
Transportation Extension Act of 2004, Part V''
and inserting ``Transportation Equity Act: A
Legacy for Users''.
(B) Mass transit account.--Paragraph (3) of section
9503(e) of such Code is amended--
(i) in the matter before subparagraph (A), by
striking ``June 1, 2005'' and inserting
``October 1, 2009'',
(ii) by striking ``or'' at the end of
subparagraph (H),
(iii) by inserting ``or'' at the end of
subparagraph (I),
(iv) by inserting after subparagraph (I) the
following new subparagraph:
``(J) Transportation Equity Act: A Legacy for
Users,'', and
(v) in the matter after subparagraph (J), as
added by clause (iv), by striking ``Surface
Transportation Extension Act of 2004, Part V''
and inserting ``Transportation Equity Act: A
Legacy for Users''.
(C) Exception to limitation on transfers.--
Subparagraph (B) of section 9503(b)(6) of such Code is
amended by striking ``June 1, 2005'' and inserting
``October 1, 2009''.
(2) Aquatic resources trust fund.--
(A) Sport fish restoration account.--Paragraph (2) of
section 9504(b) of such Code is amended by striking
``Surface Transportation Extension Act of 2004, Part
V'' each place it appears and inserting
``Transportation Equity Act: A Legacy for Users'' .
(B) Boat safety account.--Subsection (c) of section
9504 of such Code is amended--
(i) by striking ``June 1, 2005'' and
inserting ``October 1, 2009'', and
(ii) by striking ``Surface Transportation
Extension Act of 2004, Part V'' and inserting
``Transportation Equity Act: A Legacy for
Users'' .
(C) Exception to limitation on transfers.--Paragraph
(2) of section 9504(d) of such Code is amended by
striking ``June 1, 2005'' and inserting ``October 1,
2009''.
(e) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 3. TECHNICAL CORRECTIONS REGARDING HIGHWAY-RELATED TAXES.
(a) Amendments Related to Section 301 of the American Jobs Creation
Act of 2004.--Section 6427 of such Code is amended--
(1) by striking subsection (f), and
(2) by striking subsection (o) and redesignating subsection
(p) as subsection (o).
(b) Amendments Related to Section 853 of the American Jobs Creation
Act of 2004.--
(1) Subparagraph (C) of section 4081(a)(2) of the Internal
Revenue Code of 1986 is amended by striking ``for use in
commercial aviation'' and inserting ``for use in commercial
aviation by a person registered for such use under section
4101''.
(2) So much of paragraph (2) of section 4081(d) of such Code
as precedes subparagraph (A) is amended to read as follows:
``(2) Aviation fuels.--The rates of tax specified in clauses
(ii) and (iv) of subsection (a)(2)(A) shall be 4.3 cents per
gallon--''.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the American Jobs Creation
Act of 2004 to which they relate.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 996, as amended, contains provisions that
extend the expenditure authority for the Highway Trust Fund and
the Aquatic Resources Trust Fund and extend motor fuel excise
taxes, and makes other technical changes related to highway
excise taxes.
B. Background and Need for Legislation
The provisions approved by the Committee reflect the need
to maintain Highway Trust Fund resources for the purposes of
funding a highway reauthorization bill.
The Committee also believes that the full amount of excise
taxes imposed on fuel used in motorboats and small engines
should not be retained in the General Fund and should instead
be credited to the trust fund primarily dedicated to the users
who bear such taxes.
C. Legislative History
The House Committee on Ways and Means marked up the Highway
Reauthorization Tax Act of 2005 on March 3, 2005, and ordered
the bill, as amended, favorably reported by voice vote.
II. EXPLANATION OF THE BILL
A. Extension of Highway Trust Fund and Aquatic Resources Trust Fund
Expenditure Authority and Related Taxes
(Sec. 2 of the bill and secs. 4041, 4051, 4071, 4081, 4221, 4481, 4482,
4483, 6412, 9503, and 9504 of the Code)
PRESENT-LAW HIGHWAY TRUST FUND EXCISE TAXES
In general
Six separate excise taxes are imposed to finance the
Federal Highway Trust Fund program. Three of these taxes are
imposed on highway motor fuels. The remaining three are a
retail sales tax on heavy highway vehicles, a manufacturers'
excise tax on heavy vehicle tires, and an annual use tax on
heavy vehicles. A substantial majority of the revenues produced
by the Highway Trust Fund excise taxes are derived from the
taxes on motor fuels. Except for 4.3 cents per gallon of the
Highway Trust Fund fuels tax rates, and a portion of the tax on
certain special motor fuels, all of these taxes are scheduled
to expire after September 30, 2005. The 4.3-cents-per-gallon
portion of the fuels tax rates is permanent.\1\ The six taxes
are summarized below.
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\1\ This portion of the tax rates was enacted as a deficit
reduction measure in 1993. Receipts from it were retained in the
General Fund until 1997 legislation provided for their transfer to the
Highway Trust Fund.
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Highway motor fuels taxes
The Highway Trust Fund motor fuels tax rates are as
follows:\2\
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\2\ Secs. 4081(a)(2)(A)(i), 4081(a)(2)(A)(iii), 4041(a)(2),
4041(a)(3), and 4041(m). Some of these fuels also are subject to an
additional 0.1-cent-per-gallon excise tax to fund the Leaking
Underground Storage Tank (``LUST'') Trust Fund (secs. 4041(d) and
4081(a)(2)(B)).
Gasoline.................................. 18.3 cents per gallon
Diesel fuel and kerosene.................. 24.3 cents per gallon
Special motor fuels....................... 18.3 cents per gallon
generally \3\
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\3\ The statutory rate for certain special motor fuels is
determined on an energy equivalent basis, as follows:
Liquefied petroleum gas (propane): 13.6 cents per gallon (3.2 cents
after September 30, 2005).
Liquefied natural gas: 11.9 cents per gallon (2.8 cents after
September 30, 2005).
Methanol derived from natural gas: 9.15 cents per gallon (2.15
cents after September 30, 2005).
Compressed natural gas: 48.54 cents per MCF.
See secs. 4041(a)(2), 4041(a)(3) and 4041(m).
The compressed natural gas tax rate is equivalent only to 4.3 cents
per gallon of the rate imposed on gasoline and other special motor
fuels rather than the full 18.3-cents-per-gallon rate. The tax rate for
the other special motor fuels is equivalent to the full 18.3-cents-per-
gallon gasoline and special motor fuels tax rate.
Non-fuel Highway Trust Fund excise taxes
In addition to the highway motor fuels excise tax revenues,
the Highway Trust 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 heavy 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)
(sec. 4051);
2. An excise tax imposed on highway tires with a rated load
capacity exceeding 3,500 pounds, generally at a rate of 9.45
cents per 10 pounds of excess (sec. 4071(a)); and
3. An annual use tax imposed on highway vehicles having a
taxable gross weight of 55,000 pounds or more (sec. 4481). (The
maximum rate for this tax is $550 per year, imposed on vehicles
having a taxable gross weight over 75,000 pounds.)
PRESENT-LAW HIGHWAY TRUST FUND EXPENDITURE PROVISIONS
In general
Dedication of excise tax revenues to the Highway Trust Fund
and expenditures from the Highway Trust Fund are governed by
the Code (sec. 9503).\4\ The Code authorizes expenditures
(subject to appropriations) from the Fund through May 31, 2005,
for the purposes provided in authorizing legislation, as in
effect on the date of enactment of the Surface Transportation
Extension Act of 2004, Part V.
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\4\ The Highway Trust Fund statutory provisions were placed in the
Internal Revenue Code in 1982.
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Under present law, revenues from the highway excise taxes,
as imposed through September 30, 2005, generally are dedicated
to the Highway Trust Fund. Under section 9503(c)(2), the
Highway Trust Fund reimburses the General Fund for amounts paid
in respect of gasoline used on farms, gasoline used for certain
nonhighway purposes or by local transit systems, amounts
relating to fuels not used for taxable purposes, and income tax
credits for certain exempt uses of fuels.
Highway Trust Fund expenditure purposes
The Highway Trust Fund has a separate account for mass
transit, the Mass Transit Account.\5\ The Highway Trust Fund
and the Mass Transit Account are funding sources for specific
programs. Neither the Highway Trust Fund nor the Mass Transit
Account receives interest on its unexpended balances.\6\
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\5\ Sec. 9503(e)(1).
\6\ Sec. 9503(f)(2).
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Highway Trust Fund expenditure purposes have been revised
with each authorization Act enacted since establishment of the
Highway Trust 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
specified by the Code as Highway Trust Fund expenditure
purposes.\7\ The Code provides that authority to make
expenditures from the Highway Trust Fund expires after May 31,
2005. Thus, no Highway Trust Fund expenditures may occur after
May 31, 2005, without an amendment to the Code.
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\7\ The authorizing Acts that currently are referenced in the
Highway Trust Fund provisions of the Code are: the Highway Revenue Act
of 1956, Title 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 the
Transportation Equity Act for the 21st Century, the Surface
Transportation Extension Act of 2003, the Surface Transporation
Extension Act of 2004; the Surface Transportation Extension Act of
2004, Part II; the Surface Transportation Extension Act of 2004 Part
III; the Surface Transportation Extension Act of 2004, Part IV; and the
Surface Transportation Extension Act of 2004, Part V.
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Interrelationship of the Highway Trust Fund and the Aquatic Resources
Trust Fund
The Aquatic Resources Trust Fund is funded by a portion of
the receipts from the excise taxes imposed on motorboat
gasoline and special motor fuels and on gasoline used as a fuel
in the nonbusiness use of small-engine outdoor power equipment.
A portion of these taxes are transferred into the Highway Trust
Fund and then retransferred into the Aquatic Resources Trust
Fund. As a result, transfers to the Aquatic Resources Trust
Fund are governed in part by Highway Trust Fund provisions
(secs. 9503(c)(4) and 9503(c)(5)).
A total tax rate of 18.4 cents per gallon is imposed on
gasoline and special motor fuels used in motorboats and on
gasoline used as a fuel in the nonbusiness use of small-engine
outdoor power equipment. Of this rate, 0.1 cent per gallon is
dedicated to the Leaking Underground Storage Tank Trust Fund.
Of the remaining 18.3 cents per gallon, 4.8 cents per gallon
are retained in the General Fund. The balance of 13.5 cents per
gallon is transferred to the Highway Trust Fund and then
retransferred to the Aquatic Resources Trust Fund and the Land
and Water Conservation Fund, as follows.
The Aquatic Resources Trust Fund is comprised of two
accounts, the Boat Safety Account and the Sport Fish
Restoration Account. Motorboat fuel taxes, not exceeding $70
million per year, are transferred to the Boat Safety Account.
In addition, these transfers are subject to an overall annual
limit equal to an amount that will not cause the Boat Safety
Account to have an unobligated balance in excess of $70
million. To the extent there are excess motorboat fuel taxes,
the next $1 million per year of motorboat fuel taxes is
transferred from the Highway Trust Fund to the Land and Water
Conservation Fund provided for in Title I of the Land and Water
Conservation Fund Act of 1965. The balance of the motorboat
fuel taxes in the Highway Trust Fund is transferred to the
Sport Fish Restoration Account.
The Sport Fish Restoration Account also receives 13.5 cents
per gallon of the small-engine fuel taxes from the Highway
Trust Fund. This Account is also funded with receipts from an
ad valorem manufacturers' excise tax on sport fishing
equipment.
The retention in the General Fund of 4.8 cents per gallon
of taxes on fuel used in motorboats and in the nonbusiness use
of small-engine outdoor power equipment expires with respect to
taxes imposed after September 30, 2005.
The expenditure authority for the Aquatic Resources Trust
Fund expires after May 31, 2005.
H.R. 3: Transportation Equity Act: A Legacy for Users
On February 9, 2005, Representative Don Young introduced
H.R. 3, the Transportation Equity Act: A Legacy for Users.
Among other purposes, the bill reauthorizes the Federal
highway, public transportation, highway safety and motor
carrier safety programs for fiscal year 2004 through fiscal
year 2009.
REASONS FOR CHANGE
The Committee believes that highway and transit spending
sustains and creates jobs, providing valuable new opportunities
in communities where the availability of jobs is declining. In
addition, a long-term reauthorization provides stability for
State transportation programs dependent on Federal funds. Thus,
the Committee believes it is appropriate to reauthorize Highway
Trust Fund expenditures through September 30, 2009 in
coordination with new transportation legislation and to extend
current Federal taxes payable to the Highway Trust Fund through
September 30, 2011.
The Committee also believes that the full amount of excise
taxes imposed on fuel used in motorboats and in the nonbusiness
use of small-engine outdoor power equipment should not be
retained in the General Fund and should instead be credited to
the trust fund dedicated to the users who primarily bear such
taxes. Fuel taxes imposed with respect to other uses are
currently either dedicated to an appropriate fund or are being
phased out. Therefore, the Committee believes that allowing the
present-law General Fund retention of such taxes to expire as
scheduled is consistent with the treatment of other fuel taxes.
EXPLANATION OF PROVISION
The expenditure authority for the Highway Trust Fund and
Aquatic Resources Trust Fund is extended through September 30,
2009. The Code provisions governing the purposes for which
monies in the Highway Trust Fund may be spent are modified to
include the reauthorization bill, H.R. 3, Transportation Equity
Act: A Legacy for Users.
The provision also extends the motor fuel taxes and all
three non-fuel excise taxes at their current rates through
September 30, 2011.
The provision does not extend the retention in the General
Fund of 4.8 cents per gallon of taxes on fuel used in
motorboats and in the nonbusiness use of small-engine outdoor
power equipment.
EFFECTIVE DATE
The provision is effective on the date of enactment.
B. Fuels-Related Technical Corrections to American Jobs Creation Act of
2004
(Sec. 3 of the bill and secs. 4081 and 6427 of the Code)
The bill includes technical corrections to the American
Jobs Creation Act of 2004 (``AJCA''). The amendments made by
the technical corrections take effect as if included in the
section of AJCA to which each amendment relates.
1. Volumetric ethanol excise tax credit (sec. 301 of AJCA)
AJCA repealed the reduced tax rates for alcohol fuels and
taxable fuels to be blended with alcohol. The technical
correction makes a conforming amendment to eliminate the refund
provision based on those reduced rates (secs. 6427(f) and
6427(o)).
2. Aviation-grade kerosene (sec. 853 of AJCA)
Section 853 of AJCA moved the taxation of jet fuel
(aviation-grade kerosene) from section 4091 to section 4081 and
repealed section 4091. The termination date for the 21.8 cent
per gallon rate for noncommercial aviation jet fuel was
inadvertently omitted from the Act. The technical correction
clarifies that after September 30, 2007, the rate for jet fuel
used in noncommercial aviation will be 4.3 cents per gallon.
An additional technical correction clarifies that users of
aviation-grade kerosene in commercial aviation are required to
be registered with the IRS in order for the 4.3-cents-per-
gallon rate to apply (including for purposes of the self-
assessment of tax by commercial aircraft operators).
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII 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. 996.
MOTION TO REPORT THE BILL
The bill, H.R. 996, as amended was ordered favorably
reported by voice vote (with a quorum being present).
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d)(2) of rule XIII of the Rules
of the House of Representatives, the following statement is
made concerning the effects on the budget of the revenue
provisions of the bill, H.R. 996 as reported.
The bill is estimated to have the following effects on
budget receipts for fiscal years 2005-2010:
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 7, 2005.
Hon. William ``Bill'' M. Thomas,
Chairman, Committee on Ways and Means,
U.S. House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 996, the Highway
Reauthorization Tax Act of 2005.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Laura
Hanlon (for revenues), and Deborah Reis (for direct spending).
Sincerely,
Douglas Holtz-Eakin,
Director.
Enclosure.
H.R. 996--Highway Reauthorization Tax Act of 2005
Summary: H.R. 996 would amend the Internal Revenue Code to
extend certain expiring highway taxes through September 30,
2011. Under current law, excise taxes are imposed on motor
fuels, certain vehicles, and tires. Most of those taxes are set
to expire on September 30, 2005. Among these levies is a tax of
18.3 cents per gallon that is imposed on gasoline and special
motor fuels used in motorboats and certain small engines. H.R.
996 would distribute all revenues collected from the tax on
those fuels to the Aquatic Resources Trust Fund (ARTF). ARTF
deposits may be spent without further appropriation for state
grants and conservation activities. Under current law, only
13.5 cents per gallon is deposited in the ARTF; the balance of
4.8 cents per gallon remains in the general fund.
H.R. 996 also would extend expenditure authority for the
Highway Trust Fund and the ARTF through September 30, 2009.
CBO and the Joint Committee on Taxation (JCT) estimate that
the bill would not affect revenues, relative to the current
baseline, because CBO's baseline already assumes extension of
the taxes under laws governing the baseline construction. CBO
estimates that, by increasing the amount of revenue allocated
to the ARTF, the bill would result in additional direct
spending of $29 million in 2007 and about $1.1 billion over the
2007-2015 period.
CBO and JCT have determined that H.R. 996 contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA) and would impose no costs
on state, local, or tribal governments.
Estimated Cost to the Federal Government: The budgetary
impact of H.R. 996 over the 2005-2015 period is shown in the
following table. The costs of this legislation fall within
budget function 300 (natural resources and environment).
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By fiscal year, in millions of dollars--
--------------------------------------------------------------------------------------------------
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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CHANGES IN REVENUES
Estimated Revenues................................... 0 0 0 0 0 0 0 0 0 0 0
CHANGES IN DIRECT SPENDING
Estimated Budget Authority........................... 0 0 123 131 138 144 149 152 156 161 163
Estimated Outlays.................................... 0 0 29 69 104 125 137 143 147 151 156
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Sources: Joint Committee on Taxation and CBO.
Basis of estimate
Revenues
JCT estimates that extending the expiring tax provisions
would have no effect on federal revenues because the baseline
already includes those revenues. Under section 257 of the
Balanced Budget and Emergency Deficit Control Act of 1985, as
amended, excise taxes dedicated to trust funds, if set to
expire, are assumed to be extended in CBO's baseline at the
current rates in place just before scheduled expiration.
Direct Spending
Enacting H.R. 996 would increase direct spending beginning
in 2007 because the bill would allocate the 18.3 cents per
gallon collected from taxes on fuels used in motorboats and
certain small engines to the ARTF, rather than the 13.5 cents
per gallon currently deposited in that fund. All amounts
deposited into the ARTF are available in the following year
without further appropriation. CBO estimates that this change
would increase direct spending by $29 million in 2007 and by
about $1.1 billion over the 2007-2015 period.
Intergovernmental and private-sector impact: CBO and JCT
have determined that H.R. 996 contains no intergovernmental or
private-sector mandates and would impose no costs on state,
local, or tribal governments.
Estimate prepared by: Federal Revenues; Laura Hanlon; and
Federal Costs: Deborah Reis.
Estimate approved by: G. Thomas Woodward, Assistant
Director for Tax Analysis; and Peter H. Fontaine, Deputy
Assistant Director for Budget Analysis.
D. Macroeconomic Impact Analysis
In compliance with clause 3(h)(2) of rule XIII of the Rules
of the House of Representatives, the following statement is
made by the Joint Committee on Taxation with respect to the
provisions of the bill amending the Internal Revenue Code of
1986: the effects of the bill on economic activity are so small
as to be incalculable within the context of a model of the
aggregate economy.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee advises that it is appropriate and timely to
enact the revenue provision included in the bill as reported.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Constitutional Authority Statement
With respect to clause 3(d)(1) of the rule XIII 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 8 (``The Congress shall
have Power To lay and collect Taxes, Duties, Imposts and
Excises . . . '').
D. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Act of 1995 (Pub. L. No. 104-4).
The Committee has determined that the revenue provisions of
the bill do not contain Federal mandates on the private sector.
The Committee has determined that the revenue provisions of the
bill do not impose a Federal intergovernmental mandate on
State, local, or tribal governments.
E. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' 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 increases within the meaning of the rule.
F. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service
Restructuring and Reform Act of 1998 (the ``IRS Reform Act'')
requires the Joint Committee on Taxation (in consultation with
the Internal Revenue Service and the Department of the
Treasury) to provide a tax complexity analysis. The complexity
analysis is required for all legislation reported by the Senate
Committee on Finance, the House Committee on Ways and Means, or
any committee of conference if the legislation includes a
provision that directly or indirectly amends the Internal
Revenue Code and has widespread applicability to individuals or
small businesses.
The staff of the Joint Committee on Taxation has determined
that a complexity analysis is not required under section
4022(b) of the IRS Reform Act because the bill contains no
provisions that have ``widespread applicability'' to
individuals or small businesses.
IV. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) 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) Diesel fuel and special motor fuels
(1) Tax on diesel fuel and kerosene in certain cases
(A) * * *
* * * * * * *
(C) Rate of tax.--
(i) * * *
* * * * * * *
(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, [2005] 2011).
(2) Special motor fuels.--
(A) * * *
(B) Rate of tax.--The rate of the tax imposed
by this paragraph shall be--
(i) * * *
* * * * * * *
In the case of any sale or use after September 30,
[2005] 2011, 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 the rate
of the tax imposed by subsection (a)(2) shall be--
(A) after September 30, 1997, and before
October 1, [2005] 2011--
(i) * * *
* * * * * * *
(B) after September 30, [2005] 2011--
(i) in the case of fuel none of the
alcohol in which consists of ethanol,
2.15 cents per gallon, and
(ii) in any other case, 4.3 cents per
gallon.
* * * * * * *
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, [2005] 2011, the
taxes imposed by this section shall not apply.
* * * * * * *
CHAPTER 32--MANUFACTURERS EXCISE TAXES
* * * * * * *
Subchapter A--Automotive and Related Items
* * * * * * *
PART II--TIRES
* * * * * * *
SEC. 4071. IMPOSITION OF TAX.
(a) * * *
* * * * * * *
(d) Termination.--On and after October 1, [2005] 2011, the
taxes imposed by subsection (a) shall not apply.
* * * * * * *
PART III--PETROLEUM PRODUCTS
* * * * * * *
Subpart A--Motor and Aviation Fuels
* * * * * * *
SEC. 4081. IMPOSITION OF TAX.
(a) Tax Imposed.--
(1) * * *
(2) Rates of tax.--
(A) * * *
* * * * * * *
(C) Taxes imposed on fuel used in commercial
aviation.--In the case of aviation-grade
kerosene which is removed from any refinery or
terminal directly into the fuel tank of an
aircraft [for use in commercial aviation] for
use in commercial aviation by a person
registered for such use under section 4101, the
rate of tax under subparagraph (A)(iv) shall be
4.3 cents per gallon.
* * * * * * *
(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, [2005] 2011.
[(2) Aviation gasoline.--The rate of tax specified in
subsection (a)(2)(A)(ii) shall be 4.3 cents per
gallon--]
(2) Aviation fuels.--The rates of tax specified in
clauses (ii) and (iv) of subsection (a)(2)(A) shall be
4.3 cents per gallon--
(A) * * *
* * * * * * *
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 or 4081) on the sale by the
manufacturer (or under subchapter A or C of chapter 31 on the
first retail sale) of an article--
(1) * * *
* * * * * * *
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, [2005] 2011. 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.
* * * * * * *
CHAPTER 36--CERTAIN OTHER EXCISE TAXES
* * * * * * *
Subchapter D--Tax on Use of Certain Vehicles
* * * * * * *
SEC. 4481. IMPOSITION OF TAX.
(a) * * *
* * * * * * *
(f) Period Tax in Effect.--The tax imposed by this section
shall apply only to use before October 1, [2005] 2011.
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, [2005] 2011,
and the period which begins on July 1, [2005] 2011, and
ends at the close of September 30, [2005] 2011.
* * * * * * *
(d) Special Rule for Taxable Period in Which Termination Date
Occurs.--In the case of the taxable period which ends on
September 30, [2005] 2011, 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) * * *
* * * * * * *
(h) Termination of Exemptions.--Subsections (a) and (c) shall
not apply on and after October 1, [2005] 2011.
* * * * * * *
Subtitle E--Alcohol, Tobacco, and Certain Other Excise Taxes
* * * * * * *
CHAPTER 65--ABATEMENTS, CREDITS, AND REFUNDS
* * * * * * *
Subchapter B--Rules of Special Application
* * * * * * *
SEC. 6412. FLOOR STOCKS REFUNDS.
(a) In General.--
(1) Tires and taxable fuel.--Where before October 1,
[2005] 2011, 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, [2005] 2011, if claim
for such credit or refund is filed with the Secretary
on or before March 31, [2006] 2012, based upon a
request submitted to the manufacturer, producer, or
importer before January 1, [2006] 2012 by the dealer
who held the article in respect of which the credit or
refund is claimed, and, on or before March 31, [2006]
2012, 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.
* * * * * * *
SEC. 6427. FUELS NOT USED FOR TAXABLE PURPOSES.
(a) * * *
* * * * * * *
[(f) Gasoline, Diesel Fuel, Kerosene, and Aviation Fuel Used
to Produce Certain Alcohol Fuels.--
[(1) In general.--Except as provided in subsection
(k), if any gasoline, diesel fuel, kerosene, or
aviation fuel on which tax was imposed by section 4081
or 4091 at the regular tax rate is used by any person
in producing a mixture described in section 4081(c) or
4091(c)(1)(A) (as the case may be) which is sold or
used in such person's trade or business, the Secretary
shall pay (without interest) to such person an amount
equal to the excess of the regular tax rate over the
incentive tax rate with respect to such fuel.
[(2) Definitions.--For purposes of paragraph (1)--
[(A) Regular tax rate.--The term ``regular
tax rate'' means--
[(i) in the case of gasoline, diesel
fuel, or kerosene, the aggregate rate
of tax imposed by section 4081
determined without regard to subsection
(c) thereof, and
[(ii) in the case of aviation fuel,
the aggregate rate of tax imposed by
section 4091 determined without regard
to subsection (c) thereof.
[(B) Incentive tax rate.-- The term
``incentive tax rate'' means--
[(i) in the case of gasoline, diesel
fuel, or kerosene, the aggregate rate
of tax imposed by section 4081 with
respect to fuel described in subsection
(c)(2) thereof, and
[(ii) in the case of aviation fuel,
the aggregate rate of tax imposed by
section 4091 with respect to fuel
described in subsection (c)(2) thereof.
[(3) Coordination with other repayment provisions.--
No amount shall be payable under paragraph (1) with
respect to any gasoline, diesel fuel, kerosene, or
aviation fuel with respect to which an amount is
payable under subsection (d), or (l) of this section or
under section 6420 or 6421.
[(4) Termination.--This subsection shall not apply
with respect to any mixture sold or used after
September 30, 2007.]
* * * * * * *
[(o) Gasohol Used in Noncommercial Aviation.--Except as
provided in subsection (k), if--
[(1) any tax is imposed by section 4081 at a rate
determined under subsection (c) thereof on gasohol (as
defined in such subsection), and
[(2) such gasohol is used as a fuel in any aircraft
in noncommercial aviation (as defined in section
4041(c)(2)),the Secretary shall pay (without interest)
to the ultimate purchaser of such gasohol an amount
equal to 1.4 cents (2 cents in the case of a mixture
none of the alcohol in which consists of ethanol)
multiplied by the number of gallons of gasohol so
used.]
[(p)] (o) Cross References.--
(1) * * *
* * * * * * *
Subtitle I--Trust Fund Code
* * * * * * *
CHAPTER 98--TRUST FUND CODE
* * * * * * *
Subchapter A--Establishment of Trust Funds
* * * * * * *
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, [2005] 2011,
under the following provisions--
(A) * * *
* * * * * * *
(2) Liabilities incurred before October 1, [2005]
2011.--There are hereby appropriated to the Highway
Trust Fund amounts equivalent to the taxes which are
received in the Treasury after September 30, [2005]
2011, and before July 1, [2006] 2012, and which are
attributable to liability for tax incurred before
October 1, [2005] 2011, under the provisions described
in paragraph (1).
* * * * * * *
(6) Limitation on transfers to highway trust fund.--
(A) * * *
(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 [June 1, 2005] October 1, 2009, 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 [June 1, 2005] October
1, 2009, to meet those obligations of the United States
heretofore or hereafter incurred which are--
(A) * * *
* * * * * * *
(J) authorized to be paid out of the Highway
Trust Fund under the Surface Transportation
Extension Act of 2004, Part IV, [or]
(K) authorized to be paid out of the Highway
Trust Fund under the Surface Transportation
Extension Act of 2004, Part V[.], or
(L) authorized to be paid out of the Highway
Trust Fund under the Transportation Equity Act:
A Legacy for Users.
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 [Surface Transportation Extension Act
of 2004, Part V] Transportation Equity Act: A Legacy
for Users.
(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,
[2006] 2012, under--
(I) * * *
* * * * * * *
(III) section 6427 (relating
to fuels not used for taxable
purposes),on the basis of
claims filed for periods ending
before October 1, [2005] 2011,
and
(ii) the credits allowed under
section 34 (relating to credit for
certain uses of fuel) with respect to
fuel used before October 1, [2005]
2011.
* * * * * * *
(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, [2006] 2012,
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, [2005] 2011.
* * * * * * *
(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, [2005] 2011.
* * * * * * *
(e) Establishment of Mass Transit Account.--
(1) * * *
* * * * * * *
(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 [June 1, 2005] October 1,
2009 (including capital expenditures for new projects)
in accordance with--
(A) * * *
* * * * * * *
(H) the Surface Transportation Extension Act
of 2004, Part IV, [or]
(I) the Surface Transportation Extension Act
of 2004, Part V, or
(J) Transportation Equity Act: A Legacy for
Users,
as such section and Acts are in effect on the date of
the enactment of the [Surface Transportation Extension
Act of 2004, Part V] Transportation Equity Act: A
Legacy for Users.
* * * * * * *
SEC. 9504. AQUATIC RESOURCES TRUST FUND.
(a) * * *
(b) Sport Fish Restoration Account.--
(1) * * *
(2) Expenditures from account.--Amounts in the Sport
Fish Restoration Account shall be available, as
provided by appropriation Acts, for making
expenditures--
(A) to carry out the purposes of the Act
entitled ``An Act to provide that the United
States shall aid the States in fish restoration
and management projects, and for other
purposes'', approved August 9, 1950 (as in
effect on the date of the enactment of the
[Surface Transportation Extension Act of 2004,
Part V] Transportation Equity Act: A Legacy for
Users),
(B) to carry out the purposes of section
7404(d) of the Transportation Equity Act for
the 21st Century (as in effect on the date of
the enactment of the [Surface Transportation
Extension Act of 2004, Part V] Transportation
Equity Act: A Legacy for Users), and
(C) to carry out the purposes of the Coastal
Wetlands Planning, Protection and Restoration
Act (as in effect on the date of the enactment
of the [Surface Transportation Extension Act of
2004, Part V] Transportation Equity Act: A
Legacy for Users).
Amounts transferred to such account under section
9503(c)(5) may be used only for making expenditures
described in subparagraph (B) of this paragraph.
(c) Expenditures from Boat Safety Account.--Amounts in the
Boat Safety Account shall be available, as provided by
appropriation Acts, for making expenditures before [June 1,
2005] October 1, 2009, to carry out the purposes of section
13106 of title 46, United States Code (as in effect on the date
of the enactment of the [Surface Transportation Extension Act
of 2004, Part V] Transportation Equity Act: A Legacy for
Users).
(d) Limitation on transfers to Aquatic Resources Trust
Fund.--
(1) * * *
(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 [June 1, 2005] October 1, 2009, in
accordance with the provisions of this section.
* * * * * * *
----------
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, [2004] 2010,
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, [2003] 2009; and
(2) 80 percent of the floor stocks refunds made
before October 1, [2004] 2010, under section 6412(a)(2)
of such Code with respect to gasoline to be used in
motorboats.