[105th Congress Public Law 2]
[From the U.S. Government Printing Office]


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[DOCID: f:publ2.105]


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       AIRPORT AND AIRWAY TRUST FUND TAX REINSTATEMENT ACT OF 1997

[[Page 111 STAT. 4]]

Public Law 105-2
105th Congress

                                 An Act


 
To amend the Internal Revenue Code of 1986 to reinstate the Airport and 
Airway Trust Fund excise taxes, and for other purposes. <<NOTE: Feb. 28, 
                          1997 -  [H.R. 668]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Airport and 
Airway Trust Fund Tax Reinstatement Act of 1997.>> 

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short <<NOTE: 26 USC 1 note.>> Title.--This Act may be cited as 
the ``Airport and Airway Trust Fund Tax Reinstatement Act of 1997''.

    (b) Amendment <<NOTE: 26 USC 1 et seq.>> of 1986 Code.--Except as 
otherwise expressly provided, whenever in this Act 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. 2. REINSTATEMENT OF AIRPORT AND AIRWAY TRUST FUND EXCISE TAXES.

    (a) Fuel Taxes.--
            (1) Aviation fuel.--Subparagraph (A) of section 4091(b)(3) 
        is amended to read as follows:
                    ``(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.''.
            (2) Aviation gasoline.--Subsection (d) of section 4081 is 
        amended by striking the paragraph (3) added by section 1609(a) 
        of the Small Business Job Protection Act of 1996 and by striking 
        paragraphs (1) and (2) and inserting the following new 
        paragraphs:
            ``(1) In general.--The rates of tax specified in clauses (i) 
        and (iii) of subsection (a)(2)(A) shall be 4.3 cents per gallon 
        after September 30, 1999.
            ``(2) Aviation gasoline.--The rate of tax specified in 
        subsection (a)(2)(A)(ii) shall be 4.3 cents per gallon--
                    ``(A) after December 31, 1996, and before the date 
                which is 7 days after the date of the enactment of the 
                Airport and Airway Trust Fund Tax Reinstatement Act of 
                1997, and
                    ``(B) after September 30, 1997.''.
            (3) Noncommercial aviation.--Paragraph (3) of section 
        4041(c) is amended to read as follows:

[[Page 111 STAT. 5]]

            ``(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.''.

    (b) Ticket Taxes.--
            (1) Persons.--Subsection (g) of section 4261 is amended to 
        read as follows:

    ``(g) Application of Taxes.--
            ``(1) In general.--The taxes imposed by this section shall 
        apply to--
                    ``(A) transportation beginning during the period--
                          ``(i) beginning on the 7th day after the date 
                      of the enactment of the Airport and Airway Trust 
                      Fund Tax 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.''.
            (2) Property.--Subsection (d) of section 4271 is amended to 
        read as follows:

    ``(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.''.

    (c) Transfers to Airport and Airway Trust Fund.--
            (1) In general.--Subsection (b) of section 9502 is amended 
        to read as follows:

    ``(b) Transfers <<NOTE: Appropriation authorization.>> 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

[[Page 111 STAT. 6]]

                    ``(D) section 4091 (relating to aviation fuel) to 
                the extent attributable to the Airport and Airway Trust 
                Fund financing rate, and
            ``(2) the amounts determined by the Secretary of the 
        Treasury to be equivalent to the amounts of civil penalties 
        collected under section 47107(n) of title 49, United States 
        Code.''.
            (2) Termination of financing rate.--Paragraph (3) of section 
        9502(f) is amended to read as follows:
            ``(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.''.

    (d) Floor <<NOTE: 26 USC 4081 note.>> Stocks Taxes on Aviation 
Gasoline and Aviation Fuel.--
            (1) Imposition of tax.--In the case of any aviation liquid 
        on which tax was imposed under section 4081 or 4091 of the 
        Internal Revenue Code of
1986 before the tax effective date and which is held on such date by any 
person, there is hereby imposed a floor stocks tax of--
                    (A) 15 cents per gallon in the case of aviation 
                gasoline, and
                    (B) 17.5 cents per gallon in the case of aviation 
                fuel.
            (2) Liability for tax and method of payment.--
                    (A) Liability for tax.--A person holding, on the tax 
                effective date, any aviation liquid to which the tax 
                imposed by paragraph (1) applies shall be liable for 
                such tax.
                    (B) Method of payment.--The tax imposed by paragraph 
                (1) shall be paid in such manner as the Secretary shall 
                prescribe.
                    (C) Time for payment.--The tax imposed by paragraph 
                (1) shall be paid on or before the first day of the 5th 
                month beginning after the tax effective date.
            (3) Definitions.--For purposes of this subsection--
                    (A) Tax effective date.--The term ``tax effective 
                date'' means the date which is 7 days after the date of 
                the enactment of this Act.
                    (B) Aviation liquid.--The term ``aviation liquid'' 
                means aviation gasoline and aviation fuel.
                    (C) Aviation gasoline.--The term ``aviation 
                gasoline'' has the meaning given such term in section 
                4081 of such Code.
                    (D) Aviation fuel.--The term ``aviation fuel'' has 
                the meaning given such term by section 4093 of such 
                Code.
                    (E) Held by a person.--Aviation liquid shall be 
                considered as ``held by a person'' if title thereto has 
                passed to such person (whether or not delivery to the 
                person has been made).
                    (F) Secretary.--The term ``Secretary'' means the 
                Secretary of the Treasury or the Secretary's delegate.
            (4) Exception for exempt uses.--The tax imposed by paragraph 
        (1) shall not apply to--
                    (A) aviation liquid held by any person on the tax 
                effective date exclusively for any use for which a 
                credit or refund of the entire tax imposed by section 
                4081 or 4091 of such Code (as the case may be) is 
                allowable for such

[[Page 111 STAT. 7]]

                liquid purchased on or after such tax effective date for 
                such use, or
                    (B) aviation fuel held by any person on the tax 
                effective date exclusively for any use described in 
                section 4092(b) of such Code.
            (5) Exception for certain amounts of fuel.--
                    (A) In general.--No tax shall be imposed by 
                paragraph (1) on any aviation liquid held on the tax 
                effective date by any person if the aggregate amount of 
                such liquid (determined separately for aviation gasoline 
                and aviation fuel) held by such person on such date does 
                not exceed 2,000 <<NOTE: Applicability.>> gallons. The 
                preceding sentence shall apply only if such person 
                submits to the Secretary (at the time and in the manner 
                required by the Secretary) such information as the 
                Secretary shall require for purposes of this paragraph.
                    (B) Exempt fuel.--Any liquid to which the tax 
                imposed by paragraph (1) does not apply by reason of 
                paragraph (4) shall not be taken into account under 
                subparagraph (A).
                    (C) Controlled groups.--For purposes of this 
                paragraph--
                          (i) Corporations.--
                                    (I) In general.--All persons treated 
                                as a controlled group shall be treated 
                                as 1 person.
                                    (II) Controlled group.--The term 
                                ``controlled group'' has the meaning 
                                given such term by subsection (a) of 
                                section 1563 of such Code; except that 
                                for such purposes, the phrase ``more 
                                than 50 percent'' shall be substituted 
                                for the phrase ``at least 80 percent'' 
                                each place it appears in such 
                                subsection.
                          (ii) 
                      Nonincorporated <<NOTE: Regulations. Applicability.
                      >> persons under common control.--Under 
                      regulations prescribed by the 
                      Secretary, principles similar to the principles of 
                      clause (i) shall apply to a group of persons under 
                      common control where 1 or more of such persons is 
                      not a corporation.
            (6) Other laws applicable.--All provisions of law, including 
        penalties, applicable with respect to the taxes imposed by 
        section 4081 or 4091 of such Code shall, insofar as applicable 
        and not inconsistent with the provisions of this subsection, 
        apply with respect to the floor stocks taxes imposed by 
        paragraph (1) to the same extent as if such taxes were imposed 
        by such section 4081 or 4091, as the case may be.

    (e) Effective Dates.--
            (1) Fuel <<NOTE: 26 USC 4041 note.>> taxes.--The amendments 
        made by subsection (a) shall apply to periods beginning on or 
        after the 7th day after the date of the enactment of this Act.
            (2) Ticket <<NOTE: 26 USC 4261 note.>> taxes.--
                    (A) In general.--The amendments made by subsection 
                (b) shall apply to transportation beginning on or after 
                such 7th day.
                    (B) Exception for certain payments.--Except as 
                provided in subparagraph (C), the amendments made by 
                subsection (b) shall not apply to any amount paid before 
                such 7th day.

[[Page 111 STAT. 8]]

                    (C) Payments of property transportation tax within 
                controlled group.--In the case of the tax imposed by 
                section 4271 of the Internal Revenue Code of 1986, 
                subparagraph (B) shall not apply to any amount paid by 1 
                member of a controlled group for transportation 
                furnished by another member of such group. For purposes 
                of the preceding sentence, all persons treated as a 
                single employer under subsection (a) or (b) of section 
                52 of the Internal Revenue Code of 1986 shall be treated 
                as members of a controlled group.

    (f) Application of Look-Back Safe Harbor for Deposits.--Nothing in 
the look-back safe harbor prescribed in Treasury Regulation section 
40.6302(c)-1(c)(2) shall be construed to permit such safe harbor to be 
used with respect to any tax unless such tax was imposed throughout the 
look-back period.

    Approved February 28, 1997.

LEGISLATIVE HISTORY--H.R. 668 (S. 279):
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HOUSE REPORTS: No. 105-5 (Comm. on Ways and Means).
SENATE REPORTS: No. 105-4 accompanying S. 279 (Comm. on Finance).
CONGRESSIONAL RECORD, Vol. 143 (1997):
            Feb. 25, 26, considered and passed House.
            Feb. 27, considered and passed Senate.

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