S.Amdt. 2315

1. Rewrites title V

   Replaces

   Removes title V.

   Inserted: TITLE V--HIGHWAY REAUTHORIZATION AND EXCISE TAX SIMPLIFICATION

   Inserted: SEC. 5000. SHORT TITLE; AMENDMENT OF 1986 CODE.

   Inserted: (a) Short Title.--This title may be cited as the "Highway Reauthorization and Excise Tax Simplification Act of 2004".

   Inserted: (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

   Inserted: Subtitle A--Trust Fund Reauthorization SEC. 5101. EXTENSION OF AUTHORIZATION FOR USE OF TRUST FUNDS FOR OBLIGATIONS UNDER TEA-21.

   Inserted: (a) Highway Trust Fund.--

   Inserted: (1) In general.--Paragraph (1) of section 9503(c) is amended--

   Inserted: (A) in the matter before subparagraph (A), by striking "2004" and inserting "2005",

   Inserted: (B) by striking "or" at the end of subparagraph (E),

   Inserted: (C) by striking the period at the end of subparagraph (F) and inserting ", or",

   Inserted: (D) by inserting after subparagraph (F), the following new subparagraph:

   Inserted: "(G) authorized to be paid out of the Highway Trust Fund under the Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2004.", and

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   Inserted: (E) in the matter after subparagraph (G), as added by subparagraph (D), by striking "Surface Transportation Extension Act of 2003" and inserting "Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2004".

   Inserted: (2) Mass transit account.--Paragraph (3) of section 9503(e) is amended--

   Inserted: (A) in the matter before subparagraph (A), by striking "2004" and inserting "2005",

   Inserted: (B) by striking "or" at the end of subparagraph (C),

   Inserted: (C) by striking the period at the end of subparagraph (D) and inserting ", or",

   Inserted: (D) by inserting after subparagraph (D), the following new subparagraph:

   Inserted: "(E) the Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2004,", and

   Inserted: (E) in the matter after subparagraph (E), as added by subparagraph (D), by striking "Surface Transportation Extension Act of 2003" and inserting "Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2004".

   Inserted: (3) Exception to limitation on transfers.--Subparagraph (B) of section 9503(b)(5) is amended by striking "2004" and inserting "2005".

   Inserted: (b) Aquatic Resources Trust Fund.--

   Inserted: (1) Sport fish restoration account.--Paragraph (2) of section 9504(b) (relating to Sport Fish Restoration Account) is amended by striking "Surface Transportation Extension Act of 2003" each place it appears and inserting "Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2004".

   Inserted: (2) Boat safety account.--Section 9504(c) (relating to expenditures from Boat Safety Account) is amended--

   Inserted: (A) by striking "2004" and inserting "2005", and

   Inserted: (B) by striking "Surface Transportation Extension Act of 2003" and inserting "Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2004".

   Inserted: (3) Exception to limitation on transfers.--Paragraph (2) of section 9504(d) (relating to limitation on transfers to Aquatic Resources Trust Fund) is amended by striking "2004" and inserting "2005".

   Inserted: (4) Technical correction.--The last sentence of paragraph (2) of section 9504(b) is amended by striking "subparagraph (B)", and inserting "subparagraph (C)".

   Inserted: (c) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.

   Inserted: (d) Temporary Rule Regarding Adjustments.--During the period beginning on the date of the enactment of this Act and ending on February 28, 2005, for purposes of making any estimate under section 9503(d) of the Internal Revenue Code of 1986 of receipts of the Highway Trust Fund, the Secretary of the Treasury shall treat--

   Inserted: (1) each expiring provision of paragraphs (1) through (4) of section 9503(b) of such Code which is related to appropriations or transfers to such Fund to have been extended through the end of the 24-month period referred to in section 9503(d)(1)(B) of such Code, and

   Inserted: (2) with respect to each tax imposed under the sections referred to in section 9503(b)(1) of such Code, the rate of such tax during the 24-month period referred to in section 9503(d)(1)(B) of such Code to be the same as the rate of such tax as in effect on the date of the enactment of this Act.

   Inserted: SEC. 5102. TRANSFER OF CERTAIN ETHANOL TAXES INTO THE HIGHWAY TRUST FUND.

   Inserted: (a) In General.--Section 9503(b)(4) is amended--

   Inserted: (1) by adding "or" at the end of subparagraph (C),

   Inserted: (2) by striking the comma at the end of subparagraph (D)(iii) and inserting a period, and

   Inserted: (3) by striking subparagraphs (E) and (F).

   Inserted: (b) Effective Date.--The amendments made by this section shall apply to fuel sold or used after September 30, 2003.

   Inserted: SEC. 5103. DEDICATION OF GAS GUZZLER TAX TO HIGHWAY TRUST FUND.

   Inserted: (a) In General.--Section 9503(b)(1) (relating to transfer to Highway Trust Fund of amounts equivalent to certain taxes) is amended by redesignating subparagraphs (C), (D), and (E) as subparagraphs (D), (E), and (F), respectively, and by inserting after subparagraph (B) the following new subparagraph:

   Inserted: "(C) section 4064 (relating to gas guzzler tax),".

   Inserted: (b) Uniform Application of Tax.--Subparagraph (A) of section 4064(b)(1) (defining automobile) is amended by striking the second sentence.

   Inserted: (c) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.

   Inserted: SEC. 5104. INTEREST ON UNEXPENDED BALANCES CREDITED TO TRUST FUND.

   Inserted: (a) In General.--Section 9503 (relating to the Highway Trust Fund) is amended by striking subsection (f).

   Inserted: (b) Effective Date.--The amendment made by this section shall take effect on the date of the enactment of this Act.

   Inserted: Subtitle B--Fuel Fraud Prevention SEC. 5200. SHORT TITLE.

   Inserted: This subtitle may be cited as the "Fuel Fraud Prevention Act of 2004".

   Inserted: PART I--AVIATION JET FUEL

   Inserted: SEC. 5211. TAXATION OF AVIATION-GRADE KEROSENE.

   Inserted: (a) Rate of Tax.--

   Inserted: (1) In general.--Subparagraph (A) of section 4081(a)(2) is amended by striking "and" at the end of clause (ii), by striking the period at the end of clause (iii) and inserting ", and", and by adding at the end the following new clause:

   Inserted: "(iv) in the case of aviation-grade kerosene, 21.8 cents per gallon.".

   Inserted: (2) Commercial aviation.--Paragraph (2) of section 4081(a) is amended by adding at the end the following new subparagraph:

   Inserted: "(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, the rate of tax under subparagraph (A)(iv) shall be 4.3 cents per gallon.".

   Inserted: (3) Nontaxable uses.--

   Inserted: (A) In general.--Section 4082 is amended by redesignating subsections (e) and (f) as subsections (f) and (g), respectively, and by inserting after subsection (d) the following new subsection:

   Inserted: "(e) Aviation-Grade Kerosene.--In the case of aviation-grade kerosene which is exempt from the tax imposed by section 4041(c) (other than by reason of a prior imposition of tax) and which is removed from any refinery or terminal directly into the fuel tank of an aircraft, the rate of tax under section 4081(a)(2)(A)(iv) shall be zero.".

   Inserted: (B) Conforming amendments.--

   Inserted: (i) Subsection (b) of section 4082 is amended by adding at the end the following new flush sentence: "The term 'nontaxable use' does not include the use of aviation-grade kerosene in an aircraft.".

   Inserted: (ii) Section 4082(d) is amended by striking paragraph (1) and by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively.

   Inserted: (4) Nonaircraft use of aviation-grade kerosene.--

   Inserted: (A) In general.--Subparagraph (B) of section 4041(a)(1) is amended by adding at the end the following new sentence: "This subparagraph shall not apply to aviation-grade kerosene.".

   Inserted: (B) Conforming amendment.--The heading for paragraph (1) of section 4041(a) is amended by inserting "and kerosene" after "diesel fuel".

   Inserted: (b) Commercial Aviation.--Section 4083 is amended redesignating subsections (b) and (c) as subsections (c) and (d), respectively, and by inserting after subsection (a) the following new subsection:

   Inserted: "(b) Commercial Aviation.--For purposes of this subpart, the term 'commercial aviation' means any use of an aircraft in a business of transporting persons or property for compensation or hire by air, unless properly allocable to any transportation exempt from the taxes imposed by section 4261 and 4271 by reason of section 4281 or 4282 or by reason of section 4261(h).".

   Inserted: (c) Refunds.--

   Inserted: (1) In general.--Paragraph (4) of section 6427(l) is amended to read as follows:

   Inserted: "(4) Refunds for aviation-grade kerosene.--

   Inserted: "(A) No refund of certain taxes on fuel used in commercial aviation.--In the case of aviation-grade kerosene used in commercial aviation (as defined in section 4083(b)) (other than supplies for vessels or aircraft within the meaning of section 4221(d)(3)), paragraph (1) shall not apply to so much of the tax imposed by section 4081 as is attributable to--

   Inserted: "(i) the Leaking Underground Storage Tank Trust Fund financing rate imposed by such section, and

   Inserted: "(ii) so much of the rate of tax specified in section 4081(a)(2)(A)(iv) as does not exceed 4.3 cents per gallon.

   Inserted: "(B) Payment to ultimate, registered vendor.--With respect to aviation-grade kerosene, if the ultimate purchaser of such kerosene waives (at such time and in such form and manner as the Secretary shall prescribe) the right to payment under paragraph (1) and assigns such right to the ultimate vendor, then the Secretary shall pay the amount which would be paid under paragraph (1) to such ultimate vendor, but only if such ultimate vendor--

   Inserted: "(i) is registered under section 4101, and

   Inserted: "(ii) meets the requirements of subparagraph (A), (B), or (D) of section 6416(a)(1).".

   Inserted: (2) Time for filing claims.--Paragraph (4) of section 6427(i) is amended by striking "subsection (l)(5)" and inserting "paragraph (4)(B) or (5) of subsection (l)".

   Inserted: (3) Conforming amendment.--Subparagraph (B) of section 6427(l)(2) is amended to read as follows:

   Inserted: "(B) in the case of aviation-grade kerosene--

   Inserted: "(i) any use which is exempt from the tax imposed by section 4041(c) other than by reason of a prior imposition of tax, or

   Inserted: "(ii) any use in commercial aviation (within the meaning of section 4083(b)).".

   Inserted: (d) Repeal of Prior Taxation of Aviation Fuel.--

   Inserted: (1) In general.--Part III of subchapter A of chapter 32 is amended by striking subpart B and by redesignating subpart C as subpart B.

   Inserted: (2) Conforming amendments.--

   Inserted: (A) Section 4041(c) is amended to read as follows:

   Inserted: "(c) Aviation-Grade Kerosene.--

   Inserted: "(1) In general.--There is hereby imposed a tax upon aviation-grade kerosene--

   Inserted: "(A) sold by any person to an owner, lessee, or other operator of an aircraft for use in such aircraft, or

   Inserted: "(B) used by any person in an aircraft unless there was a taxable sale of such fuel under subparagraph (A).

   Inserted: "(2) Exemption for previously taxed fuel.--No tax shall be imposed by this subsection on the sale or use of any aviation-grade kerosene if tax was imposed on such liquid under section 4081 and the tax thereon was not credited or refunded.

   Inserted: "(3) Rate of tax.--The rate of tax imposed by this subsection shall be the rate of tax specified in section 4081(a)(2)(A)(iv) which is in effect at the time of such sale or use.".

   Inserted: (B) Section 4041(d)(2) is amended by striking "section 4091" and inserting "section 4081".

   Inserted: (C) Section 4041 is amended by striking subsection (e).

   Inserted: (D) Section 4041 is amended by striking subsection (i).

   Inserted: (E) Section 4041(m)(1) is amended to read as follows:

   Inserted: "(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--

   Inserted: "(A) after September 30, 1997, and before September 30, 2009--

   Inserted: "(i) in the case of fuel none of the alcohol in which consists of ethanol, 9.15 cents per gallon, and

   Inserted: "(ii) in any other case, 11.3 cents per gallon, and

   Inserted: "(B) after September 30, 2009--

   Inserted: "(i) in the case of fuel none of the alcohol in which consists of ethanol, 2.15 cents per gallon, and

   Inserted: "(ii) in any other case, 4.3 cents per gallon.".

   Inserted: (F) Sections 4101(a), 4103, 4221(a), and 6206 are each amended by striking ", 4081, or 4091" and inserting "or 4081".

   Inserted: (G) Section 6416(b)(2) is amended by striking "4091 or".

   Inserted: (H) Section 6416(b)(3) is amended by striking "or 4091" each place it appears.

   Inserted: (I) Section 6416(d) is amended by striking "or to the tax imposed by section 4091 in the case of refunds described in section 4091(d)".

   Inserted: (J) Section 6427(j)(1) is amended by striking ", 4081, and 4091" and inserting "and 4081".

   Inserted: (K)(i) Section 6427(l)(1) is amended to read as follows:

   Inserted: "(1) In general.--Except as otherwise provided in this subsection and in subsection (k), if any diesel fuel or kerosene on which tax has been imposed by section 4041 or 4081 is used by any person in a nontaxable use, the Secretary shall pay (without interest) to the ultimate purchaser of such fuel an amount equal to the aggregate amount of tax imposed on such fuel under section 4041 or 4081, as the case may be, reduced by any refund paid to the ultimate vendor under paragraph (4)(B).".

   Inserted: (ii) Paragraph (5)(B) of section 6427(l) is amended by striking "Paragraph (1)(A) shall not apply to kerosene" and inserting "Paragraph (1) shall not apply to kerosene (other than aviation-grade kerosene)".

   Inserted: (L) Subparagraph (B) of section 6724(d)(1) is amended by striking clause (xv) and by redesignating the succeeding clauses accordingly.

   Inserted: (M) Paragraph (2) of section 6724(d) is amended by striking subparagraph (W) and by redesignating the succeeding subparagraphs accordingly.

   Inserted: (N) Paragraph (1) of section 9502(b) is amended by adding "and" at the end of subparagraph (B) and by striking subparagraphs (C) and (D) and inserting the following new subparagraph:

   Inserted: "(C) section 4081 with respect to aviation gasoline and aviation-grade kerosene, and".

   Inserted: (O) The last sentence of section 9502(b) is amended to read as follows:

   Inserted: "There shall not be taken into account under paragraph (1) so much of the taxes imposed by section 4081 as are determined at the rate specified in section 4081(a)(2)(B).".

   Inserted: (P) Subsection (b) of section 9508 is amended by striking paragraph (3) and by redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively.

   Inserted: (Q) Section 9508(c)(2)(A) is amended by striking "sections 4081 and 4091" and inserting "section 4081".

   Inserted: (R) The table of subparts for part III of subchapter A of chapter 32 is amended to read as follows:

   Inserted: "Subpart A. Motor and aviation fuels.

   Inserted: "Subpart B. Special provisions applicable to fuels tax."

   Inserted: . (S) The heading for subpart A of part III of subchapter A of chapter 32 is amended to read as follows:

   Inserted: "Subpart A--Motor and Aviation Fuels".

   Inserted: (T) The heading for subpart B of part III of subchapter A of chapter 32 is amended to read as follows:

   Inserted: "Subpart B--Special Provisions Applicable to Fuels Tax".

   Inserted: (g) Other Amendments.--

   Inserted: (1) Section 4081(c) is amended by adding at the end the following new flush sentence: "In the case of any taxable fuel which is aviation-grade kerosene, this subsection shall not apply and the rules of section 4091(c) (as in effect on the day before the date of the enactment of the Fuel Fraud Prevention Act of 2004) shall apply.".

   Inserted: (2) For purposes of the Internal Revenue Code of 1986, any reference to section 4091(c) shall be treated as a reference to the rules of such section as in effect on the date before the date of the enactment of this Act.

   Inserted: (f) Effective Date.--The amendments made by this section shall apply to aviation-grade kerosene removed, entered, or sold after September 30, 2004.

   Inserted: (g) Floor Stocks Tax.--

   Inserted: (1) In general.--There is hereby imposed on aviation-grade kerosene held on October 1, 2004, by any person a tax equal to--

   Inserted: (A) the tax which would have been imposed before such date on such kerosene had the amendments made by this section been in effect at all times before such date, reduced by

   Inserted: (B) the tax imposed before such date under section 4091 of the Internal Revenue Code of 1986, as in effect on the day before the date of the enactment of this Act.

   Inserted: (2) Liability for tax and method of payment.--

   Inserted: (A) Liability for tax.--The person holding the kerosene on October 1, 2004, to which the tax imposed by paragraph (1) applies shall be liable for such tax.

   Inserted: (B) Method and time for payment.--The tax imposed by paragraph (1) shall be paid at such time and in such manner as the Secretary of the Treasury shall prescribe, including the nonapplication of such tax on de minimis amounts of kerosene.

   Inserted: (3) Transfer of floor stock tax revenues to trust funds.--For purposes of determining the amount transferred to any trust fund, the tax imposed by this subsection shall be treated as imposed by section 4081 of the Internal Revenue Code of 1986--

   Inserted: (A) at the Leaking Underground Storage Tank Trust Fund financing rate under such section to the extent of 0.1 cents per gallon, and

   Inserted: (B) at the rate under section 4081(a)(2)(A)(iv) to the extent of the remainder.

   Inserted: (4) Held by a person.--For purposes of this section, kerosene 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).

   Inserted: (5) Other laws applicable.--All provisions of law, including penalties, applicable with respect to the tax imposed by section 4081 of such Code shall, insofar as applicable and not inconsistent with the provisions of this subsection, apply with respect to the floor stock tax imposed by paragraph (1) to the same extent as if such tax were imposed by such section.

   Inserted: SEC. 5212. TRANSFER OF CERTAIN AMOUNTS FROM THE AIRPORT AND AIRWAY TRUST FUND TO THE HIGHWAY TRUST FUND TO REFLECT HIGHWAY USE OF JET FUEL.

   Inserted: (a) In General.--Section 9502(d) is amended by adding at the end the following new paragraph:

   Inserted: "(7) Transfers from the trust fund to the highway trust fund to reflect highway use of jet fuel.--

   Inserted: "(A) In general.--The Secretary shall pay from the Airport and Airway Trust Fund into the Highway Trust Fund--

   Inserted: "(i) $395,000,000 in fiscal year 2005,

   Inserted: "(ii) $425,000,000 in fiscal year 2006,

   Inserted: "(iii) $429,000,000 in fiscal year 2007,

   Inserted: "(iv) $432,000,000 in fiscal year 2008, and

   Inserted: "(v) $435,000,000 in fiscal year 2009.

   Inserted: "(B) Amounts transferred to mass transit account.--The Secretary shall transfer 11 percent of the amounts paid into the Highway Trust Fund under subparagraph (A) to the Mass Transit Account established under section 9503(e).".

   Inserted: (b) Conforming Amendments.--

   Inserted: (1) Subsection (a) of section 9503 is amended--

   Inserted: (A) by striking "appropriated or credited" and inserting "paid, appropriated, or credited", and

   Inserted: (B) by striking "or section 9602(b)" and inserting ", section 9502(d)(7), or section 9602(b)".

   Inserted: (2) Subsection (e)(1) of section 9503 is amended by striking "or section 9602(b)" and inserting ", section 9502(d)(7), or section 9602(b)".

   Inserted: (c) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.

   Inserted: PART II--DYED FUEL

   Inserted: SEC. 5221. DYE INJECTION EQUIPMENT.

   Inserted: (a) In General.--Section 4082(a)(2) (relating to exemptions for diesel fuel and kerosene) is amended by inserting "by mechanical injection" after "indelibly dyed".

   Inserted: (b) Dye Injector Security.--Not later than June 30, 2004, the Secretary of the Treasury shall issue regulations regarding mechanical dye injection systems described in the amendment made by subsection (a), and such regulations shall include standards for making such systems tamper resistant.

   Inserted: (c) Penalty for Tampering With or Failing To Maintain Security Requirements for Mechanical Dye Injection Systems.--

   Inserted: (1) In general.--Part I of subchapter B of chapter 68 (relating to assessable penalties) is amended by adding after section 6715 the following new section:

   Inserted: "SEC. 6715A. TAMPERING WITH OR FAILING TO MAINTAIN SECURITY REQUIREMENTS FOR MECHANICAL DYE INJECTION SYSTEMS.

   Inserted: "(a) Imposition of Penalty--

   Inserted: "(1) Tampering.--If any person tampers with a mechanical dye injection system used to indelibly dye fuel for purposes of section 4082, then such person shall pay a penalty in addition to the tax (if any).

   Inserted: "(2) Failure to maintain security requirements.--If any operator of a mechanical dye injection system used to indelibly dye fuel for purposes of section 4082 fails to maintain the security standards for such system as established by the Secretary, then such operator shall pay a penalty.

   Inserted: "(b) Amount of Penalty.--The amount of the penalty under subsection (a) shall be--

   Inserted: "(1) for each violation described in paragraph (1), the greater of--

   Inserted: "(A) $25,000, or

   Inserted: "(B) $10 for each gallon of fuel involved, and

   Inserted: "(2) for each--

   Inserted: "(A) failure to maintain security standards described in paragraph (2), $1,000, and

   Inserted: "(B) failure to correct a violation described in paragraph (2), $1,000 per day for each day after which such violation was discovered or such person should have reasonably known of such violation.

   Inserted: "(c) Joint and Several Liability.--

   Inserted: "(1) In general.--If a penalty is imposed under this section on any business entity, each officer, employee, or agent of such entity or other contracting party who willfully participated in any act giving rise to such penalty shall be jointly and severally liable with such entity for such penalty.

   Inserted: "(2) Affiliated groups.--If a business entity described in paragraph (1) is part of an affiliated group (as defined in section 1504(a)), the parent corporation of such entity shall be jointly and severally liable with such entity for the penalty imposed under this section.".

   Inserted: (2) Clerical amendment.--The table of sections for part I of subchapter B of chapter 68 is amended by adding after the item related to section 6715 the following new item:

   Inserted: "Sec. 6715A. Tampering with or failing to maintain security requirements for mechanical dye injection systems.".

   Inserted: (d) Effective Date.--The amendments made by subsections (a) and (c) shall take effect 180 days after the date on which the Secretary issues the regulations described in subsection (b).

   Inserted: SEC. 5222. ELIMINATION OF ADMINISTRATIVE REVIEW FOR TAXABLE USE OF DYED FUEL.

   Inserted: (a) In General.--Section 6715 is amended by inserting at the end the following new subsection:

   Inserted: "(e) No Administrative Appeal for Third and Subsequent Violations.--In the case of any person who is found to be subject to the penalty under this section after a chemical analysis of such fuel and who has been penalized under this section at least twice after the date of the enactment of this subsection, no administrative appeal or review shall be allowed with respect to such finding except in the case of a claim regarding--

   Inserted: "(1) fraud or mistake in the chemical analysis, or

   Inserted: "(2) mathematical calculation of the amount of the penalty.".

   Inserted: (b) Effective Date.--The amendment made by this section shall apply to penalties assessed after the date of the enactment of this Act.

   Inserted: SEC. 5223. PENALTY ON UNTAXED CHEMICALLY ALTERED DYED FUEL MIXTURES.

   Inserted: (a) In General.--Section 6715(a) (relating to dyed fuel sold for use or used in taxable use, etc.) is amended by striking "or" in paragraph (2), by inserting "or" at the end of paragraph (3), and by inserting after paragraph (3) the following new paragraph:

   Inserted: "(4) any person who has knowledge that a dyed fuel which has been altered as described in paragraph (3) sells or holds for sale such fuel for any use which the person knows or has reason to know is not a nontaxable use of such fuel,".

   Inserted: (b) Conforming Amendment.--Section 6715(a)(3) is amended by striking "alters, or attempts to alter," and inserting "alters, chemically or otherwise, or attempts to so alter,".

   Inserted: (c) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.

   Inserted: SEC. 5224. TERMINATION OF DYED DIESEL USE BY INTERCITY BUSES.

   Inserted: (a) In General.--Paragraph (3) of section 4082(b) (relating to nontaxable use) is amended to read as follows:

   Inserted: "(3) any use described in section 4041(a)(1)(C)(iii)(II).".

   Inserted: (b) Ultimate Vendor Refund.--Subsection (b) of section 6427 is amended by adding at the end the following new paragraph:

   Inserted: "(4) Refunds for use of diesel fuel in certain intercity buses.--

   Inserted: "(A) In general.--With respect to any fuel to which paragraph (2)(A) applies, if the ultimate purchaser of such fuel waives (at such time and in such form and manner as the Secretary shall prescribe) the right to payment under paragraph (1) and assigns such right to the ultimate vendor, then the Secretary shall pay the amount which would be paid under paragraph (1) to such ultimate vendor, but only if such ultimate vendor--

   Inserted: "(i) is registered under section 4101, and

   Inserted: "(ii) meets the requirements of subparagraph (A), (B), or (D) of section 6416(a)(1).

   Inserted: "(B) Credit cards.--For purposes of this paragraph, if the sale of such fuel is made by means of a credit card, the person extending credit to the ultimate purchaser shall be deemed to be the ultimate vendor.".

   Inserted: (c) Payment of Refunds.--Subparagraph (A) of section 6427(i)(4), as amended by section 5211 of this Act, is amended by inserting "subsections (b)(4) and" after "filed under".

   Inserted: (d) Effective Date.--The amendments made by this section shall apply to fuel sold after September 30, 2004.

   Inserted: PART III--MODIFICATION OF INSPECTION OF RECORDS PROVISIONS

   Inserted: SEC. 5231. AUTHORITY TO INSPECT ON-SITE RECORDS.

   Inserted: (a) In General.--Section 4083(d)(1)(A) (relating to administrative authority), as amended by section 5211 of this Act, is amended by striking "and" at the end of clause (i) and by inserting after clause (ii) the following new clause:

   Inserted: "(iii) inspecting any books and records and any shipping papers pertaining to such fuel, and".

   Inserted: (b) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.

   Inserted: SEC. 5232. ASSESSABLE PENALTY FOR REFUSAL OF ENTRY.

   Inserted: (a) In General.--Part I of subchapter B of chapter 68 (relating to assessable penalties), as amended by section 5221 of this Act, is amended by adding at the end the following new section:

   Inserted: "SEC. 6717. REFUSAL OF ENTRY.

   Inserted: "(a) In General.--In addition to any other penalty provided by law, any person who refuses to admit entry or refuses to permit any other action by the Secretary authorized by section 4083(d)(1) shall pay a penalty of $1,000 for such refusal.

   Inserted: "(b) Joint and Several Liability.--

   Inserted: "(1) In general.--If a penalty is imposed under this section on any business entity, each officer, employee, or agent of such entity or other contracting party who willfully participated in any act giving rise to such penalty shall be jointly and severally liable with such entity for such penalty.

   Inserted: "(2) Affiliated groups.--If a business entity described in paragraph (1) is part of an affiliated group (as defined in section 1504(a)), the parent corporation of such entity shall be jointly and severally liable with such entity for the penalty imposed under this section.

   Inserted: "(c) Reasonable Cause Exception.--No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause.".

   Inserted: (b) Conforming Amendments.--

   Inserted: (1) Section 4083(d)(3), as amended by section 5211 of this Act, is amended--

   Inserted: (A) by striking "entry.--The penalty" and inserting: "entry.--

   Inserted: "(A) Forfeiture.--The penalty", and

   Inserted: (B) by adding at the end the following new subparagraph:

   Inserted: "(B) Assessable penalty.--For additional assessable penalty for the refusal to admit entry or other refusal to permit an action by the Secretary authorized by paragraph (1), see section 6717.".

   Inserted: (2) The table of sections for part I of subchapter B of chapter 68, as amended by section 5221 of this Act, is amended by adding at the end the following new item:

   Inserted: "Sec. 6717. Refusal of entry.".

   Inserted: (c) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.

   Inserted: PART IV--REGISTRATION AND REPORTING REQUIREMENTS

   Inserted: SEC. 5241. REGISTRATION OF PIPELINE OR VESSEL OPERATORS REQUIRED FOR EXEMPTION OF BULK TRANSFERS TO REGISTERED TERMINALS OR REFINERIES.

   Inserted: (a) In General.--Section 4081(a)(1)(B) (relating to exemption for bulk transfers to registered terminals or refineries) is amended--

   Inserted: (1) by inserting "by pipeline or vessel" after "transferred in bulk", and

   Inserted: (2) by inserting ", the operator of such pipeline or vessel," after "the taxable fuel".

   Inserted: (b) Civil Penalty for Carrying Taxable Fuels by Nonregistered Pipelines or Vessels.--

   Inserted: (1) In general.--Part I of subchapter B of chapter 68 (relating to assessable penalties), as amended by section 5232 of this Act, is amended by adding at the end the following new section:

   Inserted: "SEC. 6718. CARRYING TAXABLE FUELS BY NONREGISTERED PIPELINES OR VESSELS.

   Inserted: "(a) Imposition of Penalty.--If any person knowingly transfers any taxable fuel (as defined in section 4083(a)(1)) in bulk pursuant to section 4081(a)(1)(B) to an unregistered, such person shall pay a penalty in addition to the tax (if any).

   Inserted: "(b) Amount of Penalty.--

   Inserted: "(1) In general.--Except as provided in paragraph (2), the amount of the penalty under subsection (a) on each act shall be an amount equal to the greater of--

   Inserted: "(A) $10,000, or

   Inserted: "(B) $1 per gallon.

   Inserted: "(2) Multiple violations.--In determining the penalty under subsection (a) on any person, paragraph (1) shall be applied by increasing the amount in paragraph (1) by the product of such amount and the number of prior penalties (if any) imposed by this section on such person (or a related person or any predecessor of such person or related person).

   Inserted: "(c) Joint and Several Liability.--

   Inserted: "(1) In general.--If a penalty is imposed under this section on any business entity, each officer, employee, or agent of such entity or other contracting party who willfully participated in any act giving rise to such penalty shall be jointly and severally liable with such entity for such penalty.

   Inserted: "(2) Affiliated groups.--If a business entity described in paragraph (1) is part of an affiliated group (as defined in section 1504(a)), the parent corporation of such entity shall be jointly and severally liable with such entity for the penalty imposed under this section.

   Inserted: "(d) Reasonable Cause Exception.--No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause.".

   Inserted: (2) Clerical amendment.--The table of sections for part I of subchapter B of chapter 68, as amended by section 5232 of this Act, is amended by adding at the end the following new item:

   Inserted: "Sec. 6718. Carrying taxable fuels by nonregistered pipelines or vessels.".

   Inserted: (c) Publication of Registered Persons.--Not later than June 30, 2004, the Secretary of the Treasury shall publish a list of persons required to be registered under section 4101 of the Internal Revenue Code of 1986.

   Inserted: (d) Effective Date.--The amendments made by subsections (a) and (b) shall take effect on October 1, 2004.

   Inserted: SEC. 5242. DISPLAY OF REGISTRATION.

   Inserted: (a) In General.--Subsection (a) of section 4101 (relating to registration) is amended--

   Inserted: (1) by striking "Every" and inserting the following:

   Inserted: "(1) In general.--Every", and

   Inserted: (2) by adding at the end the following new paragraph:

   Inserted: "(2) Display of registration.--Every operator of a vessel required by the Secretary to register under this section shall display proof of registration through an electronic identification device prescribed by the Secretary on each vessel used by such operator to transport any taxable fuel.".

   Inserted: (b) Civil Penalty for Failure to Display Registration.--

   Inserted: (1) In general.--Part I of subchapter B of chapter 68 (relating to assessable penalties), as amended by section 5241 of this Act, is amended by adding at the end the following new section:

   Inserted: "SEC. 6719. FAILURE TO DISPLAY REGISTRATION OF VESSEL.

   Inserted: "(a) Failure to Display Registration.--Every operator of a vessel who fails to display proof of registration pursuant to section 4101(a)(2) shall pay a penalty of $500 for each such failure. With respect to any vessel, only one penalty shall be imposed by this section during any calendar month.

   Inserted: "(b) Multiple Violations.--In determining the penalty under subsection (a) on any person, subsection (a) shall be applied by increasing the amount in subsection (a) by the product of such amount and the number of prior penalties (if any) imposed by this section on such person (or a related person or any predecessor of such person or related person).

   Inserted: "(c) Reasonable Cause Exception.--No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause.".

   Inserted: (2) Clerical amendment.--The table of sections for part I of subchapter B of chapter 68, as amended by section 5241 of this Act, is amended by adding at the end the following new item:

   Inserted: "Sec. 6719. Failure to display registration of vessel.".

   Inserted: (c) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.

   Inserted: SEC. 5243. REGISTRATION OF PERSONS WITHIN FOREIGN TRADE ZONES, ETC..

   Inserted: (a) In General.--Section 4101(a), as amended by section 5242 of this Act, is amended by redesignating paragraph (2) as paragraph (3), and by inserting after paragraph (1) the following new paragraph:

   Inserted: "(2) Registration of persons within foreign trade zones, etc..--The Secretary shall require registration by any person which--

   Inserted: "(A) operates a terminal or refinery within a foreign trade zone or within a customs bonded storage facility, or

   Inserted: "(B) holds an inventory position with respect to a taxable fuel in such a terminal.".

   Inserted: (b) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.

   Inserted: SEC. 5244. PENALTIES FOR FAILURE TO REGISTER AND FAILURE TO REPORT.

   Inserted: (a) Increased Penalty.--Subsection (a) of section 7272 (relating to penalty for failure to register) is amended by inserting "($10,000 in the case of a failure to register under section 4101)" after "$50".

   Inserted: (b) Increased Criminal Penalty.--Section 7232 (relating to failure to register under section 4101, false representations of registration status, etc.) is amended by striking "$5,000" and inserting "$10,000".

   Inserted: (c) Assessable Penalty for Failure to Register.--

   Inserted: (1) In general.--Part I of subchapter B of chapter 68 (relating to assessable penalties), as amended by section 5242 of this Act, is amended by adding at the end the following new section:

   Inserted: "SEC. 6720. FAILURE TO REGISTER.

   Inserted: "(a) Failure to Register.--Every person who is required to register under section 4101 and fails to do so shall pay a penalty in addition to the tax (if any).

   Inserted: "(b) Amount of Penalty.--The amount of the penalty under subsection (a) shall be--

   Inserted: "(1) $10,000 for each initial failure to register, and

   Inserted: "(2) $1,000 for each day thereafter such person fails to register.

   Inserted: "(c) Reasonable Cause Exception.--No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause.".

   Inserted: (2) Clerical amendment.--The table of sections for part I of subchapter B of chapter 68, as amended by section 5242 of this Act, is amended by adding at the end the following new item:

   Inserted: "Sec. 6720. Failure to register.".

   Inserted: (d) Assessable Penalty for Failure to Report.--

   Inserted: (1) In general.--Part II of subchapter B of chapter 68 (relating to assessable penalties) is amended by adding at the end the following new section:

   Inserted: "SEC. 6725. FAILURE TO REPORT INFORMATION UNDER SECTION 4101.

   Inserted: "(a) In General.--In the case of each failure described in subsection (b) by any person with respect to a vessel or facility, such person shall pay a penalty of $10,000 in addition to the tax (if any).

   Inserted: "(b) Failures Subject to Penalty.--For purposes of subsection (a), the failures described in this subsection are--

   Inserted: "(1) any failure to make a report under section 4101(d) on or before the date prescribed therefor, and

   Inserted: "(2) any failure to include all of the information required to be shown on such report or the inclusion of incorrect information.

   Inserted: "(c) Reasonable Cause Exception.--No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause.".

   Inserted: (2) Clerical amendment.--The table of sections for part II of subchapter B of chapter 68 is amended by adding at the end the following new item:

   Inserted: "Sec. 6725. Failure to report information under section 4101.".

   Inserted: (e) Effective Date.--The amendments made by this section shall apply to failures pending or occurring after September 30, 2004.

   Inserted: SEC. 5245. INFORMATION REPORTING FOR PERSONS CLAIMING CERTAIN TAX BENEFITS.

   Inserted: (a) In General.--Subpart C of part III of subchapter A of chapter 32 is amended by adding at the end the following new section:

   Inserted: "SEC. 4104. INFORMATION REPORTING FOR PERSONS CLAIMING CERTAIN TAX BENEFITS.

   Inserted: "(a) In General.--The Secretary shall require any person claiming tax benefits--

   Inserted: "(1) under the provisions of section 34, 40, and 40A to file a return at the time such person claims such benefits (in such manner as the Secretary may prescribe), and

   Inserted: "(2) under the provisions of section 4041(b)(2), 6426, or 6427(e) to file a monthly return (in such manner as the Secretary may prescribe).

   Inserted: "(b) Contents of Return.--Any return filed under this section shall provide such information relating to such benefits and the coordination of such benefits as the Secretary may require to ensure the proper administration and use of such benefits.

   Inserted: "(c) Enforcement.--With respect to any person described in subsection (a) and subject to registration requirements under this title, rules similar to rules of section 4222(c) shall apply with respect to any requirement under this section.".

   Inserted: (b) Conforming Amendment.--The table of sections for subpart C of part III of subchapter A of chapter 32 is amended by adding at the end the following new item:

   Inserted: "Sec. 4104. Information reporting for persons claiming certain tax benefits.".

   Inserted: (c) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.

   Inserted: PART V--IMPORTS

   Inserted: SEC. 5251. TAX AT POINT OF ENTRY WHERE IMPORTER NOT REGISTERED.

   Inserted: (a) Tax at Point of Entry Where Importer Not Registered.--

   Inserted: (1) In general.--Subpart C of part III of subchapter A of chapter 31, as amended by section 5245 of this Act, is amended by adding at the end the following new section:

   Inserted: "SEC. 4105. TAX AT ENTRY WHERE IMPORTER NOT REGISTERED.

   Inserted: "(a) In General.--Any tax imposed under this part on any person not registered under section 4101 for the entry of a fuel into the United States shall be imposed at the time and point of entry.

   Inserted: "(b) Enforcement of Assessment.--If any person liable for any tax described under subsection (a) has not paid the tax or posted a bond, the Secretary may--

   Inserted: "(1) seize the fuel on which the tax is due, or

   Inserted: "(2) detain any vehicle transporting such fuel, until such tax is paid or such bond is filed.

   Inserted: "(c) Levy of Fuel.--If no tax has been paid or no bond has been filed within 5 days from the date the Secretary seized fuel pursuant to subsection (b), the Secretary may sell such fuel as provided under section 6336.".

   Inserted: (2) Conforming amendment.--The table of sections for subpart C of part III of subchapter A of chapter 31 of the Internal Revenue Code of 1986, as amended by section 5245 of this Act, is amended by adding after the last item the following new item:

   Inserted: "Sec. 4105. Tax at entry where importer not registered.".

   Inserted: (b) Denial of Entry Where Tax Not Paid.--The Secretary of Homeland Security is authorized to deny entry into the United States of any shipment of a fuel which is taxable under section 4081 of the Internal Revenue Code of 1986 if the person entering such shipment fails to pay the tax imposed under such section or post a bond in accordance with the provisions of section 4105 of such Code.

   Inserted: (c) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.

   Inserted: SEC. 5252. RECONCILIATION OF ON-LOADED CARGO TO ENTERED CARGO.

   Inserted: (a) In General.--Subsection (a) of section 343 of the Trade Act of 2002 is amended by inserting at the end the following new paragraph:

   Inserted: "(4) In General.--Subject to paragraphs (2) and (3), not later than 1 year after the enactment of this paragraph, the Secretary of Homeland Security, together with the Secretary of the Treasury, shall promulgate regulations providing for the transmission to the Internal Revenue Service, through an electronic data interchange system, of information pertaining to cargo of taxable fuels (as defined in section 4083 of the Internal Revenue Code of 1986) destined for importation into the United States prior to such importation.".

   Inserted: (b) Effective Date.--The amendment made by this section shall take effect on the date of the enactment of this Act.

   Inserted: PART VI--MISCELLANEOUS PROVISIONS

   Inserted: SEC. 5261. TAX ON SALE OF DIESEL FUEL WHETHER SUITABLE FOR USE OR NOT IN A DIESEL-POWERED VEHICLE OR TRAIN.

   Inserted: (a) In General.--Section 4083(a)(3) is amended--

   Inserted: (1) by striking "The term" and inserting the following:

   Inserted: "(A) In general.--The term", and

   Inserted: (2) by inserting at the end the following new subparagraph:

   Inserted: "(B) Liquid sold as diesel fuel.--The term 'diesel fuel' includes any liquid which is sold as or offered for sale as a fuel in a diesel-powered highway vehicle or a diesel-powered train.".

   Inserted: (b) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.

   Inserted: SEC. 5262. MODIFICATION OF ULTIMATE VENDOR REFUND CLAIMS WITH RESPECT TO FARMING.

   Inserted: (a) In General.--

   Inserted: (1) Refunds.--Section 6427(l) is amended by adding at the end the following new paragraph:

   Inserted: "(6) Registered vendors permitted to administer certain claims for refund of diesel fuel and kerosene sold to farmers.--

   Inserted: "(A) In general.--In the case of diesel fuel or kerosene used on a farm for farming purposes (within the meaning of section 6420(c)), paragraph (1) shall not apply to the aggregate amount of such diesel fuel or kerosene if such amount does not exceed 500 gallons (as determined under subsection (i)(5)(A)(iii)).

   Inserted: "(B) Payment to ultimate vendor.--The amount which would (but for subparagraph (A)) have been paid under paragraph (1) with respect to any fuel shall be paid to the ultimate vendor of such fuel, if such vendor--

   Inserted: "(i) is registered under section 4101, and

   Inserted: "(ii) meets the requirements of subparagraph (A), (B), or (D) of section 6416(a)(1).".

   Inserted: (2) Filing of claims.--Section 6427(i) is amended by inserting at the end the following new paragraph:

   Inserted: "(5) Special rule for vendor refunds with respect to farmers.--

   Inserted: "(A) In general.--A claim may be filed under subsection (l)(6) by any person with respect to fuel sold by such person for any period--

   Inserted: "(i) for which $200 or more ($100 or more in the case of kerosene) is payable under subsection (l)(6),

   Inserted: "(ii) which is not less than 1 week, and

   Inserted: "(iii) which is for not more than 500 gallons for each farmer for which there is a claim. Notwithstanding subsection (l)(1), paragraph (3)(B) shall apply to claims filed under the preceding sentence.

   Inserted: "(B) Time for filing claim.--No claim filed under this paragraph shall be allowed unless filed on or before the last day of the first quarter following the earliest quarter included in the claim.".

   Inserted: (3) Conforming amendments.--

   Inserted: (A) Section 6427(l)(5)(A) is amended to read as follows:

   Inserted: "(A) In general.--Paragraph (1) shall not apply to diesel fuel or kerosene used by a State or local government.".

   Inserted: (B) The heading for section 6427(l)(5) is amended by striking "farmers and".

   Inserted: (b) Section 6427(i)(3) is amended--

   Inserted: (1) by adding at the end of subparagraph (A) the following new flush sentence: "In the case of an electronic claim, this subparagraph shall be applied without regard to clause (i).", and

   Inserted: (2) by striking "20 days of the date of the filing of such claim" in subparagraph (B) and inserting "45 days of the date of the filing of such claim (20 days in the case of an electronic claim)", and

   Inserted: (c) Effective Date.--The amendment made by this section shall apply to fuels sold for nontaxable use after the date of the enactment of this Act.

   Inserted: SEC. 5263. TAXABLE FUEL REFUNDS FOR CERTAIN ULTIMATE VENDORS.

   Inserted: (a) In General.--Paragraph (4) of section 6416(a) (relating to abatements, credits, and refunds) is amended to read as follows:

   Inserted: "(4) Registered ultimate vendor to administer credits and refunds of gasoline tax.--

   Inserted: "(A) In general.--For purposes of this subsection, if an ultimate vendor purchases any gasoline on which tax imposed by section 4081 has been paid and sells such gasoline to an ultimate purchaser described in subparagraph (C) or (D) of subsection (b)(2) (and such gasoline is for a use described in such subparagraph), such ultimate vendor shall be treated as the person (and the only person) who paid such tax, but only if such ultimate vendor is registered under section 4101. For purposes of this subparagraph, if the sale of gasoline is made by means of a credit card, the person extending the credit to the ultimate purchaser shall be deemed to be the ultimate vendor.

   Inserted: "(B) Timing of claims.--The procedure and timing of any claim under subparagraph (A) shall be the same as for claims under section 6427(i)(4), except that the rules of section 6427(i)(3)(B) regarding electronic claims shall not apply unless the ultimate vendor has certified to the Secretary for the most recent quarter of the taxable year that all ultimate purchasers of the vendor are certified and entitled to a refund under subparagraph (C) or (D) of subsection (b)(2).".

   Inserted: (b) Credit Card Purchases of Diesel Fuel or Kerosene by State and Local Governments.--Section 6427(l)(5)(C) (relating to nontaxable uses of diesel fuel, kerosene, and aviation fuel), as amended by section 5252 of this Act, is amended by adding at the end the following new sentence: "For purposes of this subparagraph, if the sale of diesel fuel or kerosene is made by means of a credit card, the person extending the credit to the ultimate purchaser shall be deemed to be the ultimate vendor.".

   Inserted: (c) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.

   Inserted: SEC. 5264. TWO-PARTY EXCHANGES.

   Inserted: (a) In General.--Subpart C of part III of subchapter A of chapter 32, as amended by section 5251 of this Act, is amended by adding at the end the following new section:

   Inserted: "SEC. 4106. TWO-PARTY EXCHANGES.

   Inserted: "(a) In General.--In a two-party exchange, the delivering person shall not be liable for the tax imposed under of section 4081(a)(1)(A)(ii).

   Inserted: "(b) Two-Party Exchange.--The term 'two-party exchange' means a transaction, other than a sale, in which taxable fuel is transferred from a delivering person registered under section 4101 as a taxable fuel registrant to a receiving person who is so registered where all of the following occur:

   Inserted: "(1) The transaction includes a transfer from the delivering person, who holds the inventory position for taxable fuel in the terminal as reflected in the records of the terminal operator.

   Inserted: "(2) The exchange transaction occurs before or contemporaneous with completion of removal across the rack from the terminal by the receiving person.

   Inserted: "(3) The terminal operator in its books and records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction to the Secretary.

   Inserted: "(4) The transaction is the subject of a written contract.".

   Inserted: (b) Conforming Amendment.--The table of sections for subpart C of part III of subchapter A of chapter 32, as amended by section 5251 of this Act, is amended by adding after the last item the following new item:

   Inserted: "Sec. 4106. Two-party exchanges.".

   Inserted: (c) Effective Date.--The amendment made by this section shall take effect on the date of the enactment of this Act.

   Inserted: SEC. 5265. MODIFICATIONS OF TAX ON USE OF CERTAIN VEHICLES.

   Inserted: (a) No Proration of Tax Unless Vehicle Is Destroyed or Stolen.--

   Inserted: (1) In general.--Section 4481(c) (relating to proration of tax) is amended to read as follows:

   Inserted: "(c) Proration of Tax Where Vehicle Sold, Destroyed, or Stolen.--

   Inserted: "(1) In general.--If in any taxable period a highway motor vehicle is sold, destroyed, or stolen before the first day of the last month in such period and not subsequently used during such taxable period, the tax shall be reckoned proportionately from the first day of the month in such period in which the first use of such highway motor vehicle occurs to and including the last day of the month in which such highway motor vehicle was sold, destroyed, or stolen.

   Inserted: "(2) Destroyed.--For purposes of paragraph (1), a highway motor vehicle is destroyed if such vehicle is damaged by reason of an accident or other casualty to such an extent that it is not economic to rebuild.".

   Inserted: (2) Conforming amendments.--

   Inserted: (A) Section 6156 (relating to installment payment of tax on use of highway motor vehicles) is repealed.

   Inserted: (B) The table of sections for subchapter A of chapter 62 is amended by striking the item relating to section 6156.

   Inserted: (b) Display of Tax Certificate.--Paragraph (2) of section 4481(d) (relating to one tax liability for period) is amended to read as follows:

   Inserted: "(2) Display of tax certificate.--Every taxpayer which pays the tax imposed under this section with respect to a highway motor vehicle shall, not later than 1 month after the due date of the return of tax with respect to each taxable period, receive and display on such vehicle an electronic identification device prescribed by the Secretary.".

   Inserted: (c) Electronic filing.--Section 4481 is amended by redesignating subsection (e) as subsection (f) and by inserting after subsection (d) the following new subsection:

   Inserted: "(e) Electronic filing.--Any taxpayer who files a return under this section with respect to 25 or more vehicles for any taxable period shall file such return electronically.".

   Inserted: (d) Repeal of reduction in tax for certain trucks.--Section 4483 of the Internal Revenue Code of 1986 is amended by striking subsection (f).

   Inserted: (e) Effective Dates.--

   Inserted: (1) In general.--Except as provided in paragraph (2), the amendments made by this section shall apply to taxable periods beginning after the date of the enactment of this Act.

   Inserted: (2) Subsection (b).--The amendment made by subsection (b) shall take effect on October 1, 2005.

   Inserted: SEC. 5266. DEDICATION OF REVENUES FROM CERTAIN PENALTIES TO THE HIGHWAY TRUST FUND.

   Inserted: (a) In General.--Subsection (b) of section 9503 (relating to transfer to Highway Trust Fund of amounts equivalent to certain taxes), as amended by section 5101 of this Act, is amended by redesignating paragraph (5) as paragraph (6) and inserting after paragraph (4) the following new paragraph:

   Inserted: "(5) Certain penalties.--There are hereby appropriated to the Highway Trust Fund amounts equivalent to the penalties assessed under sections 6715, 6715A, 6717, 6718, 6719, 6720, 6725, 7232, and 7272 (but only with regard to penalties under such section related to failure to register under section 4101).".

   Inserted: (b) Conforming Amendments.--

   Inserted: (1) The heading of subsection (b) of section 9503 is amended by inserting "and Penalties" after "Taxes".

   Inserted: (2) The heading of paragraph (1) of section 9503(b) is amended by striking "In general" and inserting "Certain taxes".

   Inserted: (c) Effective Date.--The amendments made by this section shall apply to penalties assessed after October 1, 2004.

   Inserted: SEC. 5267. NONAPPLICATION OF EXPORT EXEMPTION TO DELIVERY OF FUEL TO MOTOR VEHICLES REMOVED FROM UNITED STATES.

   Inserted: (a) In General.--Section 4221(d)(2) (defining export) is amended by adding at the end the following new sentence: "Such term does not include the delivery of a taxable fuel (as defined in section 4083(a)(1)) into a fuel tank of a motor vehicle which is shipped or driven out of the United States.".

   Inserted: (b) Conforming Amendments.--

   Inserted: (1) Section 4041(g) (relating to other exemptions) is amended by adding at the end the following new sentence: "Paragraph (3) shall not apply to the sale for delivery of a liquid into a fuel tank of a motor vehicle which is shipped or driven out of the United States.".

   Inserted: (2) Clause (iv) of section 4081(a)(1)(A) (relating to tax on removal, entry, or sale) is amended by inserting "or at a duty-free sales enterprise (as defined in section 555(b)(8) of the Tariff Act of 1930)" after "section 4101".

   Inserted: (c) Effective Date.--The amendments made by this section shall apply to sales or deliveries made after the date of the enactment of this Act.

   Inserted: PART VII--TOTAL ACCOUNTABILITY

   Inserted: SEC. 5271. TOTAL ACCOUNTABILITY.

   Inserted: (a) Taxation of Reportable Liquids.--

   Inserted: (1) In general.--Section 4081(a), as amended by this Act, is amended--

   Inserted: (A) by inserting "or reportable liquid" after "taxable fuel" each place it appears, and

   Inserted: (B) by inserting "such liquid" after "such fuel" in paragraph (1)(A)(iv).

   Inserted: (2) Rate of tax.--Subparagraph (A) of section 4081(a)(2), as amended by section 5211 of this Act, is amended by striking "and" at the end of clause (iii), by striking the period at the end of clause (iv) and inserting ", and", and by adding at the end the following new clause:

   Inserted: "(v) in the case of reportable liquids, the rate determined under section 4083(c)(2).".

   Inserted: (3) Exemption.--Section 4081(a)(1) is amended by adding at the end the following new subparagraph:

   Inserted: "(C) Exemption for registered transfers of reportable liquids.--The tax imposed by this paragraph shall not apply to any removal, entry, or sale of a reportable liquid if--

   Inserted: "(i) such removal, entry, or sale is to a registered person who certifies that such liquid will not be used as a fuel or in the production of a fuel, or

   Inserted: "(ii) the sale is to the ultimate purchaser of such liquid.".

   Inserted: (4) Reportable liquids.--Section 4083, as amended by this Act, is amended by redesignating subsections (c) and (d) (as redesignated by section 5211 of this Act) as subsections (d) and (e), respectively, and by inserting after subsection (b) the following new section:

   Inserted: "(c) Reportable liquid.--For purposes of this subpart--

   Inserted: "(1) In general.--The term 'reportable liquid' means any petroleum-based liquid other than a taxable fuel.

   Inserted: "(2) Taxation.--

   Inserted: "(A) Gasoline blend stocks and additives.--Gasoline blend stocks and additives which are reportable liquids (as defined in paragraph (1)) shall be subject to the rate of tax under clause (i) of section 4081(a)(2)(A).

   Inserted: "(B) Other reportable liquids.--Any reportable liquid (as defined in paragraph (1)) not described in subparagraph (A) shall be subject to the rate of tax under clause (iii) of section 4081(a)(2)(A).".

   Inserted: (5) Conforming amendments.--

   Inserted: (A) Section 4081(e) is amended by inserting "or reportable liquid" after "taxable fuel".

   Inserted: (B) Section 4083(d) (relating to certain use defined as removal), as redesignated by paragraph (4), is amended by inserting "or reportable liquid" after "taxable fuel".

   Inserted: (C) Section 4083(e)(1) (relating to administrative authority), as redesignated by paragraph (4), is amended--

   Inserted: (i) in subparagraph (A)--

   Inserted: (I) by inserting "or reportable liquid" after "taxable fuel", and

   Inserted: (II) by inserting "or such liquid" after "such fuel" each place it appears, and

   Inserted: (ii) in subparagraph (B), by inserting "or any reportable liquid" after "any taxable fuel".

   Inserted: (D) Section 4101(a)(2), as added by section 5243 of this Act, is amended by inserting "or a reportable liquid" after "taxable fuel".

   Inserted: (E) Section 4101(a)(3), as added by section 5242 of this Act and redesignated by section 5243 of this Act, is amended by inserting "or any reportable liquid" before the period at the end.

   Inserted: (F) Section 4102 is amended by inserting "or any reportable liquid" before the period at the end.

   Inserted: (G)(i) Section 6718, as added by section 5241 of this Act, is amended--

   Inserted: (I) in subsection (a), by inserting "or any reportable liquid (as defined in section 4083(c)(1))" after " section 4083(a)(1))", and

   Inserted: (II) in the heading, by inserting "or reportable liquids" after "taxable fuel".

   Inserted: (ii) The item relating to section 6718 in table of sections for part I of subchapter B of chapter 68, as added by section 5241 of this Act, is amended by inserting "or reportable liquids" after "taxable fuels".

   Inserted: (H) Section 6427(h) is amended to read as follows:

   Inserted: "(h) Gasoline Blend Stocks or Additives and Reportable Liquids.--Except as provided in subsection (k)--

   Inserted: "(1) if any gasoline blend stock or additive (within the meaning of section 4083(a)(2)) is not used by any person to produce gasoline and such person establishes that the ultimate use of such gasoline blend stock or additive is not to produce gasoline, or

   Inserted: "(2) if any reportable liquid (within the meaning of section 4083(c)(1)) is not used by any person to produce a taxable fuel and such person establishes that the ultimate use of such reportable liquid is not to produce a taxable fuel, then the Secretary shall pay (without interest) to such person an amount equal to the aggregate amount of the tax imposed on such person with respect to such gasoline blend stock or additive or such reportable fuel.".

   Inserted: (I) Section 7232, as amended by this Act, is amended by inserting "or reportable liquid (within the meaning of section 4083(c)(1))" after "section 4083)".

   Inserted: (J) Section 343 of the Trade Act of 2002, as amended by section 5252 of this Act, is amended by inserting "and reportable liquids (as defined in section 4083(c)(1) of such Code)" after "Internal Revenue Code of 1986)".

   Inserted: (b) Dyed Diesel.--Section 4082(a) is amended by striking "and" at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting "and", and by inserting after paragraph (3) the following new paragraph:

   Inserted: "(4) which is removed, entered, or sold by a person registered under section 4101.".

   Inserted: (c) Effective Date.--The amendments made by this section shall apply to reportable liquids (as defined in section 4083(c) of the Internal Revenue Code) and fuel sold or used after September 30, 2004.

   Inserted: SEC. 5272. EXCISE TAX REPORTING.

   Inserted: (a) In General.--Part II of subchapter A of chapter 61 is amended by adding at the end the following new subpart:

   Inserted: "Subpart E--Excise Tax Reporting "SEC. 6025. RETURNS RELATING TO FUEL TAXES.

   Inserted: "(a) In General.--The Secretary shall require any person liable for the tax imposed under Part III of subchapter A of chapter 32 to file a return of such tax on a monthly basis.

   Inserted: "(b) Information Included with Return.--The Secretary shall require any person filing a return under subsection (a) to provide information regarding any refined product (whether or not such product is taxable under this title) removed from a terminal during the period for which such return applies.".

   Inserted: (b) Conforming Amendment.--The table of parts for subchapter A of chapter 61 is amended by adding at the end the following new item:

   Inserted: "Subpart E--Excise Tax Reporting".

   Inserted: (c) Effective Date.--The amendments made by this section shall apply to fuel sold or used after September 30, 2004.

   Inserted: SEC. 5273. INFORMATION REPORTING.

   Inserted: (a) In General.--Section 4101(d) is amended by adding at the end the following new flush sentence: "The Secretary shall require reporting under the previous sentence with respect to taxable fuels removed, entered, or transferred from any refinery, pipeline, or vessel which is registered under this section.".

   Inserted: (b) Effective Date.--The amendment made by this section shall apply on October 1, 2004.

   Original wording

   Strike title V and insert the following:

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As printed