S.Amdt. 2316
What it does: Rewrites title V
Sen. Jon Kyl (R-AZ)What it changes
1 change to S. 1072
Rewrites title V
ReplacesRemoves title V.
Inserted: TITLE V--HIGHWAY REAUTHORIZATION AND EXCISE TAX SIMPLIFICATION
Inserted: SEC. 5000. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.
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: (c) Table of Contents.--The table of contents for this title is as follows:
Inserted: TITLE V--HIGHWAY REAUTHORIZATION AND EXCISE TAX SIMPLIFICATION
Inserted: Sec. 5000. Short title; amendment of 1986 code; table of contents.
Inserted: Subtitle A--Trust Fund Reauthorization
Inserted: Sec. 5001. Extension of Highway Trust Fund and Aquatic Resources Trust Fund expenditure authority and related taxes.
Inserted: Sec. 5002. Full accounting of funds received by the Highway Trust Fund.
Inserted: Sec. 5003. Modification of adjustments of apportionments.
Inserted: Subtitle B--Biodiesel Income Tax Credit
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Inserted: Sec. 5101. Biodiesel income tax credit.
Inserted: Subtitle C--Fuel Fraud Prevention
Inserted: Sec. 5200. Short title.
Inserted: Part I--Aviation Jet Fuel
Inserted: Sec. 5211. Taxation of aviation-grade kerosene.
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: Part II--Dyed Fuel
Inserted: Sec. 5221. Dye injection equipment.
Inserted: Sec. 5222. Elimination of administrative review for taxable use of dyed fuel.
Inserted: Sec. 5223. Penalty on untaxed chemically altered dyed fuel mixtures.
Inserted: Sec. 5224. Termination of dyed diesel use by intercity buses.
Inserted: Part III--Modification of Inspection of Records Provisions
Inserted: Sec. 5231. Authority to inspect on-site records.
Inserted: Sec. 5232. Assessable penalty for refusal of entry.
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: Sec. 5242. Display of registration.
Inserted: Sec. 5243. Registration of persons within foreign trade zones.
Inserted: Sec. 5244. Penalties for failure to register and failure to report.
Inserted: Sec. 5245. Information reporting for persons claiming certain tax benefits.
Inserted: Part V--Imports
Inserted: Sec. 5251. Tax at point of entry where importer not registered.
Inserted: Sec. 5252. Reconciliation of on-loaded cargo to entered cargo.
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: Sec. 5262. Modification of ultimate vendor refund claims with respect to farming.
Inserted: Sec. 5263. Taxable fuel refunds for certain ultimate vendors.
Inserted: Sec. 5264. Two-party exchanges.
Inserted: Sec. 5265. Modifications of tax on use of certain vehicles.
Inserted: Sec. 5266. Dedication of revenues from certain penalties to the Highway Trust Fund.
Inserted: Sec. 5267. Nonapplication of export exemption to delivery of fuel to motor vehicles removed from United States.
Inserted: Part VII--Total Accountability
Inserted: Sec. 5271. Total accountability.
Inserted: Sec. 5272. Excise tax reporting.
Inserted: Sec. 5273. Information reporting.
Inserted: Subtitle D--Definition of Highway Vehicle
Inserted: Sec. 5301. Exemption from certain excise taxes for mobile machinery.
Inserted: Sec. 5302. Modification of definition of off-highway vehicle.
Inserted: Subtitle E--Excise Tax Reform and Simplification Part I--Highway Excise Taxes
Inserted: Sec. 5401. Dedication of gas guzzler tax to Highway Trust Fund.
Inserted: Sec. 5402. Repeal certain excise taxes on rail diesel fuel and inland waterway barge fuels.
Inserted: Part II--Aquatic Excise Taxes
Inserted: Sec. 5411. Elimination of Aquatic Resources Trust Fund and transformation of Sport Fish Restoration Account.
Inserted: Sec. 5412. Exemption of LED devices from sonar devices suitable for finding fish.
Inserted: Sec. 5413. Repeal of harbor maintenance tax on exports.
Inserted: Sec. 5414. Cap on excise tax on certain fishing equipment.
Inserted: Sec. 5415. Reduction in rate of tax on portable aerated bait containers.
Inserted: Part III--Aerial Excise Taxes
Inserted: Sec. 5421. Clarification of excise tax exemptions for agricultural aerial applicators and exemption for fixed-wing aircraft engaged in forestry operations.
Inserted: Sec. 5422. Modification of rural airport definition.
Inserted: Sec. 5423. Exemption from ticket taxes for transportation provided by seaplanes.
Inserted: Sec. 5424. Certain sightseeing flights exempt from taxes on air transportation.
Inserted: Part IV--Alcoholic Beverage Excise Taxes
Inserted: Sec. 5431. Repeal of special occupational taxes on producers and marketers of alcoholic beverages.
Inserted: Sec. 5432. Suspension of limitation on rate of rum excise tax cover over to Puerto Rico and Virgin Islands.
Inserted: Part V--Sport Excise Taxes
Inserted: Sec. 5441. Custom gunsmiths.
Inserted: Sec. 5442. Modified taxation of imported archery products.
Inserted: Sec. 5443. Treatment of tribal governments for purposes of Federal wagering excise and occupational taxes.
Inserted: Part VI--Other Provisions
Inserted: Sec. 5451. Income tax credit for distilled spirits wholesalers and for distilled spirits in control State bailment warehouses for costs of carrying Federal excise taxes on bottled distilled spirits.
Inserted: Sec. 5452. Credit for taxpayers owning commercial power takeoff vehicles.
Inserted: Sec. 5453. Credit for auxiliary power units installed on diesel-powered trucks.
Inserted: Subtitle F--Miscellaneous Provisions
Inserted: Sec. 5501. Motor Fuel Tax Enforcement Advisory Commission.
Inserted: Sec. 5502. National Surface Transportation Infrastructure Financing Commission.
Inserted: Sec. 5503. Treasury study of fuel tax compliance and interagency cooperation.
Inserted: Sec. 5504. Expansion of Highway Trust Fund expenditure purposes to include funding for studies of supplemental or alternative financing for the Highway Trust Fund.
Inserted: Sec. 5505. Treasury study of highway fuels used by trucks for non-transportation purposes.
Inserted: Sec. 5506. Delta regional transportation plan.
Inserted: Sec. 5507. Treatment of employer-provided transit and van pooling benefits.
Inserted: Sec. 5508. Study of incentives for production of biodiesel.
Inserted: Sec. 5509. Reduction of expenditures from the Highway Trust Fund.
Inserted: Subtitle G--Revenue Offsets Part I--Limitation on Expensing Certain Passengers Automobiles
Inserted: Sec. 5601. Expansion of limitation on depreciation of certain passenger automobiles.
Inserted: Part II--Provision To Replenish the General Fund
Inserted: Sec. 5611. Modification to corporate estimated tax requirements.
Inserted: Subtitle A--Trust Fund Reauthorization SEC. 5001. EXTENSION OF HIGHWAY TRUST FUND AND AQUATIC RESOURCES TRUST FUND EXPENDITURE AUTHORITY AND RELATED TAXES.
Inserted: (a) Highway Trust Fund Expenditure Authority.--
Inserted: (1) Highway account.--Paragraph (1) of section 9503(c) (relating to transfers from Highway Trust Fund for certain repayments and credits) is amended--
Inserted: (A) in the matter before subparagraph (A), by striking "March 1, 2004" and inserting "October 1, 2009",
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
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) (relating to establishment of Mass Transit Account) is amended--
Inserted: (A) in the matter before subparagraph (A), by striking "March 1, 2004" and inserting "October 1, 2009",
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) (relating to limitation on transfers to Highway Trust Fund) is amended by striking "March 1, 2004" and inserting "October 1, 2009".
Inserted: (b) Aquatic Resources Trust Fund Expenditure Authority.--
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 "March 1, 2004" and inserting "October 1, 2009", 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 "March 1, 2004" and inserting "October 1, 2009".
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) Extension of Taxes.--
Inserted: (1) In general.--The following provisions are each amended by striking "2005" each place it appears and inserting "2009":
Inserted: (A) Section 4041(a)(1)(C)(iii)(I) (relating to rate of tax on certain buses).
Inserted: (B) Section 4041(a)(2)(B) (relating to rate of tax on special motor fuels).
Inserted: (C) Section 4041(m)(1)(A) (relating to certain alcohol fuels produced from natural gas).
Inserted: (D) Section 4051(c) (relating to termination of tax on heavy trucks and trailers).
Inserted: (E) Section 4071(d) (relating to termination of tax on tires).
Inserted: (F) Section 4081(d)(1) (relating to termination of tax on gasoline, diesel fuel, and kerosene).
Inserted: (G) Section 4481(e) (relating to period tax in effect).
Inserted: (H) Section 4482(c)(4) (relating to taxable period).
Inserted: (I) Section 4482(d) (relating to special rule for taxable period in which termination date occurs).
Inserted: (2) Floor stocks refunds.--Section 6412(a)(1) (relating to floor stocks refunds) is amended--
Inserted: (A) by striking "2005" each place it appears and inserting "2009", and
Inserted: (B) by striking "2006" each place it appears and inserting "2010".
Inserted: (d) Extension of Certain Exemptions.--The following provisions are each amended by striking "2005" and inserting "2009":
Inserted: (1) Section 4221(a) (relating to certain tax-free sales).
Inserted: (2) Section 4483(g) (relating to termination of exemptions for highway use tax).
Inserted: (e) Extension of Deposits Into, and Certain Transfers From, Trust Fund.--
Inserted: (1) In general.--Subsections (b), (c)(2), (c)(3), (c)(4)(A)(i), and (c)(5)(A) of section 9503 (relating to the Highway Trust Fund) are amended--
Inserted: (A) by striking "2005" each place it appears and inserting "2009", and
Inserted: (B) by striking "2006" each place it appears and inserting "2010".
Inserted: (2) 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--
Inserted: (A) by striking "2003" and inserting "2007", and
Inserted: (B) by striking "2004" each place it appears and inserting "2008".
Inserted: (f) Extension of Tax Benefits for Qualified Methanol and Ethanol Fuel Produced From Coal.--Section 4041(b)(2) (relating to qualified methanol and ethanol fuel) is amended--
Inserted: (1) by striking "2007" in subparagraph (C)(ii) and inserting "2010", and
Inserted: (2) by striking "October 1, 2007" in subparagraph (D) and inserting "January 1, 2011".
Inserted: (g) Prohibition on Use of Highway Account for Rail Projects.--Section 9503(c) (relating to transfers from Highway Trust Fund for certain repayments and credits) is amended by adding at the end the following new paragraph:
Inserted: "(6) Prohibition on use of highway account for rail projects.--With respect to projects beginning after the date of the enactment of this paragraph, no amount shall be available from the Highway Account (as defined in subsection (e)(5)(B)) for any rail project.".
Inserted: (h) Highway Trust Fund Expenditures for Highway Use Tax Evasion Projects.--From amounts available in the Highway Trust Fund, there is authorized to be expended such sums as are necessary for highway use tax evasion projects.
Inserted: (i) Effective Date.--The amendments made by and provisions of this section shall take effect on the date of the enactment of this Act.
Inserted: SEC. 5002. FULL ACCOUNTING OF FUNDS RECEIVED BY THE HIGHWAY TRUST FUND.
Inserted: (a) In General.--Section 9503(c) (relating to transfers from Highway Trust Fund for certain repayments and credits), as amended by section 5001 of this Act, is amended by striking paragraph (2) and redesignating paragraphs (3), (4), (5), and (6) as paragraphs (2), (3), (4), and (5), respectively.
Inserted: (b) Interest on Unexpended Balances Credited to Trust Fund.--Section 9503 (relating to the Highway Trust Fund) is amended by striking subsection (f).
Inserted: (c) Conforming Amendments.--
Inserted: (1) Section 9503(b)(4)(D) is amended by striking "paragraph (4)(D) or (5)(B)" and inserting "paragraph (3)(D) or (4)(B)".
Inserted: (2) Paragraph (2) of section 9503(c) (as redesignated by subsection (a)) is amended by adding at the end the following new sentence: "The amounts payable from the Highway Trust Fund under this paragraph shall be determined by taking into account only the portion of the taxes which are deposited into the Highway Trust Fund.".
Inserted: (3) Section 9504(a)(2) is amended by striking "section 9503(c)(4), section 9503(c)(5)" and inserting "section 9503(c)(3), section 9503(c)(4)".
Inserted: (4) Paragraph (2) of section 9504(b), as amended by section 5001 of this Act, is amended by striking "section 9503(c)(5)" and inserting "section 9503(c)(4)".
Inserted: (5) Section 9504(e) is amended by striking "section 9503(c)(4)" and inserting "section 9503(c)(3)".
Inserted: (d) Effective Dates.--
Inserted: (1) In general.--Except as provided in paragraph (2), the amendments made by this section shall apply to amounts paid for which no transfer from the Highway Trust Fund has been made before April 1, 2004.
Inserted: (2) Interest credited.--The amendment made by subsection (b) shall take effect on the date of the enactment of this Act.
Inserted: SEC. 5003. MODIFICATION OF ADJUSTMENTS OF APPORTIONMENTS.
Inserted: (a) In General.--Section 9503(d) (relating to adjustments for apportionments) is amended--
Inserted: (1) by striking "24-month" in paragraph (1)(B) and inserting "48-month", and
Inserted: (2) by striking "2 years"' in the heading for paragraph (3) and inserting "4 years"'.
Inserted: (b) Measurement of Net Highway Receipts.--Section 9503(d) is amended by redesignating paragraph (6) as paragraph (7) and by inserting after paragraph (5) the following new paragraph:
Inserted: "(6) Measurement of net highway receipts.--For purposes of making any estimate under paragraph (1) of net highway receipts for periods ending after the date specified in subsection (b)(1), the Secretary shall treat--
Inserted: "(A) each expiring provision of subsection (b) which is related to appropriations or transfers to the Highway Trust Fund to have been extended through the end of the 48-month period referred to in paragraph (1)(B), and
Inserted: "(B) with respect to each tax imposed under the sections referred to in subsection (b)(1), the rate of such tax during the 48-month period referred to in paragraph (1)(B) to be the same as the rate of such tax as in effect on the date of such estimate.".
Inserted: (c) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.
Inserted: Subtitle B--Biodiesel Income Tax Credit SEC. 5101. BIODIESEL INCOME TAX CREDIT.
Inserted: (a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits) is amended by inserting after section 40 the following new section:
Inserted: "SEC. 40A. BIODIESEL USED AS FUEL.
Inserted: "(a) General Rule.--For purposes of section 38, the biodiesel fuels credit determined under this section for the taxable year is an amount equal to the sum of--
Inserted: "(1) the biodiesel mixture credit, plus
Inserted: "(2) the biodiesel credit.
Inserted: "(b) Definition of Biodiesel Mixture Credit and Biodiesel Credit.--For purposes of this section--
Inserted: "(1) Biodiesel mixture credit.--
Inserted: "(A) In general.--The biodiesel mixture credit of any taxpayer for any taxable year is 50 cents for each gallon of biodiesel used by the taxpayer in the production of a qualified biodiesel mixture.
Inserted: "(B) Qualified biodiesel mixture.--The term 'qualified biodiesel mixture' means a mixture of biodiesel and diesel fuel (as defined in section 4083(a)(3)), determined without regard to any use of kerosene, which--
Inserted: "(i) is sold by the taxpayer producing such mixture to any person for use as a fuel, or
Inserted: "(ii) is used as a fuel by the taxpayer producing such mixture.
Inserted: "(C) Sale or use must be in trade or business, etc.--Biodiesel used in the production of a qualified biodiesel mixture shall be taken into account--
Inserted: "(i) only if the sale or use described in subparagraph (B) is in a trade or business of the taxpayer, and
Inserted: "(ii) for the taxable year in which such sale or use occurs.
Inserted: "(D) Casual off-farm production not eligible.--No credit shall be allowed under this section with respect to any casual off-farm production of a qualified biodiesel mixture.
Inserted: "(2) Biodiesel credit.--
Inserted: "(A) In general.--The biodiesel credit of any taxpayer for any taxable year is 50 cents for each gallon of biodiesel which is not in a mixture with diesel fuel and which during the taxable year--
Inserted: "(i) is used by the taxpayer as a fuel in a trade or business, or
Inserted: "(ii) is sold by the taxpayer at retail to a person and placed in the fuel tank of such person's vehicle.
Inserted: "(B) User credit not to apply to biodiesel sold at retail.--No credit shall be allowed under subparagraph (A)(i) with respect to any biodiesel which was sold in a retail sale described in subparagraph (A)(ii).
Inserted: "(3) Credit for agri-biodiesel.--In the case of any biodiesel which is agri-biodiesel, paragraphs (1)(A) and (2)(A) shall be applied by substituting '$1.00' for '50 cents'.
Inserted: "(4) Certification for biodiesel.--No credit shall be allowed under this section unless the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer or importer of the biodiesel which identifies the product produced and the percentage of biodiesel and agri-biodiesel in the product.
Inserted: "(c) Coordination With Credit Against Excise Tax.--The amount of the credit determined under this section with respect to any biodiesel shall be properly reduced to take into account any benefit provided with respect to such biodiesel solely by reason of the application of section 6426 or 6427(e).
Inserted: "(d) Definitions and Special Rules.--For purposes of this section--
Inserted: "(1) Biodiesel.--The term 'biodiesel' means the monoalkyl esters of long chain fatty acids derived from plant or animal matter which meet--
Inserted: "(A) the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (42 U.S.C. 7545), and
Inserted: "(B) the requirements of the American Society of Testing and Materials D6751.
Inserted: "(2) Agri-biodiesel.--The term 'agri-biodiesel' means biodiesel derived solely from virgin oils, including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, and mustard seeds, and from animal fats.
Inserted: "(3) Mixture or biodiesel not used as a fuel, etc.--
Inserted: "(A) Mixtures.--If--
Inserted: "(i) any credit was determined under this section with respect to biodiesel used in the production of any qualified biodiesel mixture, and
Inserted: "(ii) any person--
Inserted: "(I) separates the biodiesel from the mixture, or
Inserted: "(II) without separation, uses the mixture other than as a fuel, then there is hereby imposed on such person a tax equal to the product of the rate applicable under subsection (b)(1)(A) and the number of gallons of such biodiesel in such mixture.
Inserted: "(B) Biodiesel.--If--
Inserted: "(i) any credit was determined under this section with respect to the retail sale of any biodiesel, and
Inserted: "(ii) any person mixes such biodiesel or uses such biodiesel other than as a fuel, then there is hereby imposed on such person a tax equal to the product of the rate applicable under subsection (b)(2)(A) and the number of gallons of such biodiesel.
Inserted: "(C) Applicable laws.--All provisions of law, including penalties, shall, insofar as applicable and not inconsistent with this section, apply in respect of any tax imposed under subparagraph (A) or (B) as if such tax were imposed by section 4081 and not by this chapter.
Inserted: "(4) Pass-thru in the case of estates and trusts.--Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.
Inserted: "(e) Termination.--This section shall not apply to any sale or use after December 31, 2006.".
Inserted: (b) Credit Treated as Part of General Business Credit.--Section 38(b) (relating to current year business credit) is amended by striking "plus" at the end of paragraph (14), by striking the period at the end of paragraph (15) and inserting ", plus", and by adding at the end the following new paragraph:
Inserted: "(16) the biodiesel fuels credit determined under section 40A(a).".
Inserted: (c) Conforming Amendments.--
Inserted: (1) Section 39(d) is amended by adding at the end the following new paragraph:
Inserted: "(11) No carryback of biodiesel fuels credit before effective date.--No portion of the unused business credit for any taxable year which is attributable to the biodiesel fuels credit determined under section 40A may be carried back to a taxable year ending on or before September 30, 2004.".
Inserted: (2)(A) Section 87 is amended to read as follows:
Inserted: "SEC. 87. ALCOHOL AND BIODIESEL FUELS CREDITS.
Inserted: "Gross income includes--
Inserted: "(1) the amount of the alcohol fuels credit determined with respect to the taxpayer for the taxable year under section 40(a), and
Inserted: "(2) the biodiesel fuels credit determined with respect to the taxpayer for the taxable year under section 40A(a).".
Inserted: (B) The item relating to section 87 in the table of sections for part II of subchapter B of chapter 1 is amended by striking "fuel credit" and inserting "and biodiesel fuels credits".
Inserted: (3) Section 196(c) is amended by striking "and" at the end of paragraph (9), by striking the period at the end of paragraph (10) and inserting ", and", and by adding at the end the following new paragraph:
Inserted: "(11) the biodiesel fuels credit determined under section 40A(a).".
Inserted: (4) The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding after the item relating to section 40 the following new item:
Inserted: "Sec. 40A. Biodiesel used as fuel.".
Inserted: (d) Effective Date.--The amendments made by this section shall apply to fuel produced, and sold or used, after September 30, 2004, in taxable years ending after such date.
Inserted: Subtitle C--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: "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 keorsene, 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: (b) 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, as amended by section 5001 of this Act, 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 5001 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.
Inserted: Subtitle D--Definition of Highway Vehicle SEC. 5301. EXEMPTION FROM CERTAIN EXCISE TAXES FOR MOBILE MACHINERY.
Inserted: (a) Exemption From Tax on Heavy Trucks and Trailers Sold at Retail.--
Inserted: (1) In general.--Section 4053 (relating to exemptions) is amended by adding at the end the following new paragraph:
Inserted: "(8) Mobile machinery.--Any vehicle which consists of a chassis--
Inserted: "(A) to which there has been permanently mounted (by welding, bolting, riveting, or other means) machinery or equipment to perform a construction, manufacturing, processing, farming, mining, drilling, timbering, or similar operation if the operation of the machinery or equipment is unrelated to transportation on or off the public highways,
Inserted: "(B) which has been specially designed to serve only as a mobile carriage and mount (and a power source, where applicable) for the particular machinery or equipment involved, whether or not such machinery or equipment is in operation, and
Inserted: "(C) which, by reason of such special design, could not, without substantial structural modification, be used as a component of a vehicle designed to perform a function of transporting any load other than that particular machinery or equipment or similar machinery or equipment requiring such a specially designed chassis.".
Inserted: (2) Effective date.--The amendment made by this subsection shall take effect on the day after the date of the enactment of this Act.
Inserted: (b) Exemption From Tax on Use of Certain Vehicles.--
Inserted: (1) In general.--Section 4483 (relating to exemptions) is amended by redesignating subsection (g) as subsection (h) and by inserting after subsection (f) the following new subsection:
Inserted: "(g) Exemption for Mobile Machinery.--No tax shall be imposed by section 4481 on the use of any vehicle described in section 4053(8).".
Inserted: (2) Effective date.--The amendments made by this subsection shall take effect on the day after the date of the enactment of this Act.
Inserted: (d) Exemption From Fuel Taxes.--
Inserted: (1) In general.--Section 6421(e)(2) (defining off-highway business use) is amended by adding at the end the following new subparagraph:
Inserted: "(C) Uses in mobile machinery.--
Inserted: "(i) In general.--The term 'off-highway business use' shall include any use in a vehicle which meets the requirements described in clause (ii).
Inserted: "(ii) Requirements for mobile machinery.--The requirements described in this clause are--
Inserted: "(I) the design-based test, and
Inserted: "(II) the use-based test.
Inserted: "(iii) Design-based test.--For purposes of clause (ii)(I), the design-based test is met if the vehicle consists of a chassis--
Inserted: "(I) to which there has been permanently mounted (by welding, bolting, riveting, or other means) machinery or equipment to perform a construction, manufacturing, processing, farming, mining, drilling, timbering, or similar operation if the operation of the machinery or equipment is unrelated to transportation on or off the public highways,
Inserted: "(II) which has been specially designed to serve only as a mobile carriage and mount (and a power source, where applicable) for the particular machinery or equipment involved, whether or not such machinery or equipment is in operation, and
Inserted: "(III) which, by reason of such special design, could not, without substantial structural modification, be used as a component of a vehicle designed to perform a function of transporting any load other than that particular machinery or equipment or similar machinery or equipment requiring such a specially designed chassis.
Inserted: "(iv) Use-based test.--For purposes of clause (ii)(II), the use-based test is met if the use of the vehicle on public highways was less than 5,000 miles during the taxpayer's taxable year.
Inserted: "(v) Special rule for use by certain tax-exempt organizations.--In the case of any use in a vehicle by an organization which is described in section 501(c) and exempt from tax under section 501(a), clause (ii) shall be applied without regard to subclause (II) thereof.".
Inserted: (2) Annual refund of tax paid.--Section 6427(i)(2) (relating to exceptions) is amended by adding at the end the following new subparagraph:
Inserted: "(C) Nonapplication of paragraph.--This paragraph shall not apply to any fuel used in any off-highway business use described in section 6421(e)(2)(C).".
Inserted: (3) Effective date.--The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act.
Inserted: SEC. 5302. MODIFICATION OF DEFINITION OF OFF-HIGHWAY VEHICLE.
Inserted: (a) In General.--Section 7701(a) (relating to definitions) is amended by adding at the end the following new paragraph:
Inserted: "(48) Off-highway vehicles.--
Inserted: "(A) Off-highway transportation vehicles.--
Inserted: "(i) In general.--A vehicle shall not be treated as a highway vehicle if such vehicle is specially designed for the primary function of transporting a particular type of load other than over the public highway and because of this special design such vehicle's capability to transport a load over the public highway is substantially limited or impaired.
Inserted: "(ii) Determination of vehicle's design.--For purposes of clause (i), a vehicle's design is determined solely on the basis of its physical characteristics.
Inserted: "(iii) Determination of substantial limitation or impairment.--For purposes of clause (i), in determining whether substantial limitation or impairment exists, account may be taken of factors such as the size of the vehicle, whether such vehicle is subject to the licensing, safety, and other requirements applicable to highway vehicles, and whether such vehicle can transport a load at a sustained speed of at least 25 miles per hour. It is immaterial that a vehicle can transport a greater load off the public highway than such vehicle is permitted to transport over the public highway.
Inserted: "(B) Nontransportation trailers and semitrailers.--A trailer or semitrailer shall not be treated as a highway vehicle if it is specially designed to function only as an enclosed stationary shelter for the carrying on of an off-highway function at an off-highway site.".
Inserted: (c) Effective Dates.--
Inserted: (1) In general.--Except as provided in paragraph (2), the amendment made by this section shall take effect on the date of the enactment of this Act.
Inserted: (2) Fuel taxes.--With respect to taxes imposed under subchapter B of chapter 31 and part III of subchapter A of chapter 32, the amendment made by this section shall apply to taxable periods beginning after the date of the enactment of this Act.
Inserted: Subtitle E--Excise Tax Reform and Simplification
Inserted: PART I--HIGHWAY EXCISE TAXES
Inserted: SEC. 5401. 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. 5402. REPEAL CERTAIN EXCISE TAXES ON RAIL DIESEL FUEL AND INLAND WATERWAY BARGE FUELS.
Inserted: (a) Taxes on Trains.--
Inserted: (1) In general.--Subparagraph (A) of section 4041(a)(1) is amended by striking "or a diesel-powered train" each place it appears and by striking "or train".
Inserted: (2) Conforming amendments.--
Inserted: (A) Subparagraph (C) of section 4041(a)(1), as amended by section 5001 of this Act, is amended by striking clause (ii) and by redesignating clause (iii) as clause (ii).
Inserted: (B) Subparagraph (C) of section 4041(b)(1) is amended by striking all that follows "section 6421(e)(2)" and inserting a period.
Inserted: (C) Subsection (d) of section 4041 is amended by redesignating paragraph (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph:
Inserted: "(3) Diesel fuel used in trains.--There is hereby imposed a tax of 0.1 cent per gallon on any liquid other than gasoline (as defined in section 4083)--
Inserted: "(A) sold by any person to an owner, lessee, or other operator of a diesel-powered train for use as a fuel in such train, or
Inserted: "(B) used by any person as a fuel in a diesel-powered train unless there was a taxable sale of such fuel under subparagraph (A). No tax shall be imposed by this paragraph on the sale or use of any liquid if tax was imposed on such liquid under section 4081.".
Inserted: (D) Subsection (f) of section 4082 is amended by striking "section 4041(a)(1)" and inserting "subsections (d)(3) and (a)(1) of section 4041, respectively".
Inserted: (E) Subparagraphs (A) and (B) of section 4083(a)(3), as amended by section 5261 of this Act, are amended by striking "or a diesel-powered train".
Inserted: (F) Paragraph (3) of section 6421(f) is amended to read as follows:
Inserted: "(3) Gasoline used in trains.--In the case of gasoline used as a fuel in a train, this section shall not apply with respect to the Leaking Underground Storage Tank Trust Fund financing rate under section 4081.".
Inserted: (G) Paragraph (3) of section 6427(l) is amended to read as follows:
Inserted: "(3) Refund of certain taxes on fuel used in diesel-powered trains.--For purposes of this subsection, the term 'nontaxable use' includes fuel used in a diesel-powered train. The preceding sentence shall not apply to the tax imposed by section 4041(d) and the Leaking Underground Storage Tank Trust Fund financing rate under section 4081 except with respect to fuel sold for exclusive use by a State or any political subdivision thereof.".
Inserted: (b) Fuel Used on Inland Waterways.--
Inserted: (1) In general.--Paragraph (1) of section 4042(b) is amended by adding "and" at the end of subparagraph (A), by striking ", and" at the end of subparagraph (B) and inserting a period, and by striking subparagraph (C).
Inserted: (2) Conforming amendment.--Paragraph (2) of section 4042(b) is amended by striking subparagraph (C).
Inserted: (c) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.
Inserted: PART II--AQUATIC EXCISE TAXES
Inserted: SEC. 5411. ELIMINATION OF AQUATIC RESOURCES TRUST FUND AND TRANSFORMATION OF SPORT FISH RESTORATION ACCOUNT.
Inserted: (a) Simplification of Funding for Boat Safety Account.--
Inserted: (1) In general.--Section 9503(c)(3) (relating to transfers from Trust Fund for motorboat fuel taxes), as redesignated by section 5002 of this Act, is amended--
Inserted: (A) by striking "Fund--" and all that follows through "shall be transferred" in subparagraph (B) and inserting "Fund which is attributable to motorboat fuel taxes shall be transferred", and
Inserted: (B) by striking subparagraph (A), and
Inserted: (C) by redesignating subparagraphs (B) through (E) as subparagraphs (A) through (D), respectively.
Inserted: (2) Conforming amendments.--
Inserted: (A) Section 9503(b)(4) is amended by striking subparagraph (D).
Inserted: (B) Subparagraph (B) of section 9503(c)(3), as redesignated by section 5002 of this Act and subsection (a)(3), is amended--
Inserted: (i) by striking "account" in the heading and inserting "trust fund",
Inserted: (ii) by striking "or (B)" in clause (ii), and
Inserted: (iii) by striking "Account in the Aquatic Resources".
Inserted: (C) Subparagraph (C) of section 9503(c)(3), as redesignated by section 5002 of this Act and subsection (a)(3), is amended by striking ", but only to the extent such taxes are deposited into the Highway Trust Fund".
Inserted: (D) Paragraph (4) of section 9503(c), as redesignated by section 5002 of this Act, is amended--
Inserted: (i) by striking "Account in the Aquatic Resources" in subparagraph (A), and
Inserted: (ii) by striking ", but only to the extent such taxes are deposited into the Highway Trust Fund" in subparagraph (B).
Inserted: (b) Merging of Accounts.--
Inserted: (1) In general.--Subsection (a) of section 9504 is amended to read as follows:
Inserted: "(a) Creation of Trust Fund.--There is hereby established in the Treasury of the United States a trust fund to be known as the 'Sport Fish Restoration Trust Fund'. Such Trust Fund shall consist of such amounts as may be appropriated, credited, or paid to it as provided in this section, section 9503(c)(3), section 9503(c)(4), or section 9602(b).".
Inserted: (2) Conforming amendments.--
Inserted: (A) Subsection (b) of section 9504 is amended--
Inserted: (i) by striking "Account" in the heading and inserting "Trust Fund",
Inserted: (ii) by striking "Account" both places it appears in paragraphs (1) and (2) and inserting "Trust Fund", and
Inserted: (iii) by striking "account" both places it appears in the headings for paragraphs (1) and (2) and inserting "trust fund".
Inserted: (B) Subsection (d) of section 9504, as amended by section 5001 of this Act, is amended--
Inserted: (i) by striking "Aquatic Resources" in the heading,
Inserted: (ii) by striking "any Account in the Aquatic Resources" in paragraph (1) and inserting "the Sports Fish Restoration", and
Inserted: (iii) by striking "any such Account" in paragraph (1) and inserting "such Trust Fund".
Inserted: (C) Subsection (e) of section 9504, as amended by section 5002 of this Act, is amended by striking "Boat Safety Account and Sport Fish Restoration Account" and inserting "Sport Fish Restoration Trust Fund".
Inserted: (D) Section 9504 is amended by striking "AQUATIC RESOURCES" in the heading and inserting "SPORT FISH RESTORATION".
Inserted: (E) The item relating to section 9504 in the table of sections for subchapter A of chapter 98 is amended by striking "aquatic resources" and inserting "sport fish restoration".
Inserted: (c) Phaseout of Boat Safety Account.--Subsection (c) of section 9504 is amended to read as follows:
Inserted: "(c) Expenditures From Boat Safety Account.--Amounts remaining in the Boat Safety Account on October 1, 2004, and amounts thereafter credited to the Account under section 9602(b), shall be available, as provided by appropriation Acts, for making expenditures before 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 Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2004).".
Inserted: (d) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.
Inserted: SEC. 5412. EXEMPTION OF LED DEVICES FROM SONAR DEVICES SUITABLE FOR FINDING FISH.
Inserted: (a) In General.--Section 4162(b) (defining sonar device suitable for finding fish) is amended by striking "or" at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting ", or", and by adding at the end the following new paragraph:
Inserted: "(5) an LED display.".
Inserted: (b) Effective Date.--The amendments made by this section shall apply to articles sold by the manufacturer, producer, or importer after September 30, 2004.
Inserted: SEC. 5413. REPEAL OF HARBOR MAINTENANCE TAX ON EXPORTS.
Inserted: (a) In General.--Subsection (d) of section 4462 (relating to definitions and special rules) is amended to read as follows:
Inserted: "(d) Nonapplicability of Tax to Exports.--The tax imposed by section 4461(a) shall not apply to any port use with respect to any commercial cargo to be exported from the United States.".
Inserted: (b) Conforming Amendments.--
Inserted: (1) Section 4461(c)(1) is amended by adding "or" at the end of subparagraph (A), by striking subparagraph (B), and by redesignating subparagraph (C) as subparagraph (B).
Inserted: (2) Section 4461(c)(2) is amended by striking "imposed--" and all that follows through "in any other case," and inserting "imposed".
Inserted: (c) Effective Date.--The amendments made by this section shall take effect before, on, and after the date of the enactment of this Act.
Inserted: SEC. 5414. CAP ON EXCISE TAX ON CERTAIN FISHING EQUIPMENT.
Inserted: (a) In General.--Paragraph (1) of section 4161(a) (relating to sport fishing equipment) is amended to read as follows:
Inserted: "(1) Imposition of tax.--
Inserted: "(A) In general.--There is hereby imposed on the sale of any article of sport fishing equipment by the manufacturer, producer, or importer a tax equal to 10 percent of the price for which so sold.
Inserted: "(B) Limitation on tax imposed on fishing rods and poles.--The tax imposed by subparagraph (A) on any fishing rod or pole shall not exceed $10.".
Inserted: (b) Conforming Amendments.--Section 4161(a)(2) is amended by striking "paragraph (1)" both places it appears and inserting "paragraph (1)(A)".
Inserted: (c) Effective Date.--The amendments made by this section shall apply to articles sold by the manufacturer, producer, or importer after September 30, 2004.
Inserted: SEC. 5415. REDUCTION IN RATE OF TAX ON PORTABLE AERATED BAIT CONTAINERS.
Inserted: (a) In General.--Section 4161(a)(2)(A) (relating to 3 percent rate of tax for electric outboard motors and sonar devices suitable for finding fish) is amended by inserting "or a portable aerated bait container" after "fish".
Inserted: (b) Conforming Amendment.--The heading of section 4161(a)(2) is amended by striking "electric outboard motors and sonar devices suitable for finding fish" and inserting "certain sport fishing equipment".
Inserted: (c) Effective Date.--The amendments made by this section shall apply to articles sold by the manufacturer, producer, or importer after September 30, 2004.
Inserted: PART III--AERIAL EXCISE TAXES
Inserted: SEC. 5421. CLARIFICATION OF EXCISE TAX EXEMPTIONS FOR AGRICULTURAL AERIAL APPLICATORS AND EXEMPTION FOR FIXED-WING AIRCRAFT ENGAGED IN FORESTRY OPERATIONS.
Inserted: (a) No Waiver by Farm Owner, Tenant, or Operator Necessary.--Subparagraph (B) of section 6420(c)(4) (relating to certain farming use other than by owner, etc.) is amended to read as follows:
Inserted: "(B) if the person so using the gasoline is an aerial or other applicator of fertilizers or other substances and is the ultimate purchaser of the gasoline, then subparagraph (A) of this paragraph shall not apply and the aerial or other applicator shall be treated as having used such gasoline on a farm for farming purposes.".
Inserted: (b) Exemption Includes Fuel Used Between Airfield and Farm.--Section 6420(c)(4), as amended by subsection (a), is amended by adding at the end the following new flush sentence: "For purposes of this paragraph, in the case of an aerial applicator, gasoline shall be treated as used on a farm for farming purposes if the gasoline is used for the direct flight between the airfield and 1 or more farms.".
Inserted: (c) Exemption from Tax on Air Transportation of Persons for Forestry Purposes Extended to Fixed-Wing Aircraft.--Subsection (f) of section 4261 (relating to tax on air transportation of persons) is amended to read as follows:
Inserted: "(f) Exemption for Certain Uses.--No tax shall be imposed under subsection (a) or (b) on air transportation--
Inserted: "(1) by helicopter for the purpose of transporting individuals, equipment, or supplies in the exploration for, or the development or removal of, hard minerals, oil, or gas, or
Inserted: "(2) by helicopter or by fixed-wing aircraft for the purpose of the planting, cultivation, cutting, or transportation of, or caring for, trees (including logging operations), but only if the helicopter or fixed-wing aircraft does not take off from, or land at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise use services provided pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code, during such use. In the case of helicopter transportation described in paragraph (1), this subsection shall be applied by treating each flight segment as a distinct flight.".
Inserted: (d) Effective Date.--The amendments made by this section shall apply to fuel use or air transportation after the date of the enactment of this Act.
Inserted: SEC. 5422. MODIFICATION OF RURAL AIRPORT DEFINITION.
Inserted: (a) In General.--Section 4261(e)(1)(B) (defining rural airport) is amended--
Inserted: (1) by inserting "(in the case of any airport described in clause (ii)(III), on flight segments of at least 100 miles)" after "by air" in clause (i), and
Inserted: (2) by striking the period at the end of subclause (II) of clause (ii) and inserting ", or", and by adding at the end of clause (ii) the following new subclause:
Inserted: "(III) is not connected by paved roads to another airport.".
Inserted: (b) Effective Date.--The amendments made by this section shall take effect on April 1, 2004.
Inserted: SEC. 5423. EXEMPTION FROM TICKET TAXES FOR TRANSPORTATION PROVIDED BY SEAPLANES.
Inserted: (a) In General.--Section 4261 (relating to imposition of tax) is amended by redesignating subsection (i) as subsection (j) and by inserting after subsection (h) the following new subsection:
Inserted: "(i) Exemption for Seaplanes.--No tax shall be imposed by this section or section 4271 on any air transportation by a seaplane with respect to any segment consisting of a takeoff from, and a landing on, water, but only if the places at which such takeoff and landing occur have not received and are not receiving financial assistance from the Airport and Airways Trust Fund.".
Inserted: (b) Effective Date.--The amendments made by this section shall apply to transportation beginning after March 31, 2004.
Inserted: SEC. 5424. CERTAIN SIGHTSEEING FLIGHTS EXEMPT FROM TAXES ON AIR TRANSPORTATION.
Inserted: (a) In General.--Section 4281 (relating to small aircraft on nonestablished lines) is amended by adding at the end the following new sentence: "For purposes of this section, an aircraft shall not be considered as operated on an established line if such aircraft is operated on a flight the sole purpose of which is sightseeing.".
Inserted: (b) Effective Date.--The amendment made by this section shall apply with respect to transportation beginning on or after the date of the enactment of this Act, but shall not apply to any amount paid before such date for such transportation.
Inserted: PART IV--ALCOHOLIC BEVERAGE EXCISE TAXES
Inserted: SEC. 5431. REPEAL OF SPECIAL OCCUPATIONAL TAXES ON PRODUCERS AND MARKETERS OF ALCOHOLIC BEVERAGES.
Inserted: (a) Repeal of Occupational Taxes.--
Inserted: (1) In general.--The following provisions of part II of subchapter A of chapter 51 (relating to occupational taxes) are hereby repealed:
Inserted: (A) Subpart A (relating to proprietors of distilled spirits plants, bonded wine cellars, etc.).
Inserted: (B) Subpart B (relating to brewer).
Inserted: (C) Subpart D (relating to wholesale dealers) (other than sections 5114 and 5116).
Inserted: (D) Subpart E (relating to retail dealers) (other than section 5124).
Inserted: (E) Subpart G (relating to general provisions) (other than sections 5142, 5143, 5145, and 5146).
Inserted: (2) Nonbeverage domestic drawback.--Section 5131 is amended by striking ", on payment of a special tax per annum,".
Inserted: (3) Industrial use of distilled spirits.--Section 5276 is hereby repealed.
Inserted: (b) Conforming Amendments.--
Inserted: (1)(A) The heading for part II of subchapter A of chapter 51 and the table of subparts for such part are amended to read as follows:
Inserted: "PART II--MISCELLANEOUS PROVISIONS
Inserted: "Subpart A. Manufacturers of stills.
Inserted: "Subpart B. Nonbeverage domestic drawback claimants.
Inserted: "Subpart C. Recordkeeping by dealers.
Inserted: "Subpart D. Other provisions.".
Inserted: (B) The table of parts for such subchapter A is amended by striking the item relating to part II and inserting the following new item:
Inserted: "Part II. Miscellaneous provisions.".
Inserted: (2) Subpart C of part II of such subchapter (relating to manufacturers of stills) is redesignated as subpart A.
Inserted: (3)(A) Subpart F of such part II (relating to nonbeverage domestic drawback claimants) is redesignated as subpart B and sections 5131 through 5134 are redesignated as sections 5111 through 5114, respectively.
Inserted: (B) The table of sections for such subpart B, as so redesignated, is amended--
Inserted: (i) by redesignating the items relating to sections 5131 through 5134 as relating to sections 5111 through 5114, respectively, and
Inserted: (ii) by striking "and rate of tax" in the item relating to section 5111, as so redesignated.
Inserted: (C) Section 5111, as redesignated by subparagraph (A), is amended--
Inserted: (i) by striking "and rate of tax" in the section heading,
Inserted: (ii) by striking the subsection heading for subsection (a), and
Inserted: (iii) by striking subsection (b).
Inserted: (4) Part II of subchapter A of chapter 51 is amended by adding after subpart B, as redesignated by paragraph (3), the following new subpart:
Inserted: "Subpart C--Recordkeeping by Dealers
Inserted: "Sec. 5121. Recordkeeping by wholesale dealers.
Inserted: "Sec. 5122. Recordkeeping by retail dealers.
Inserted: "Sec. 5123. Preservation and inspection of records, and entry of premises for inspection.".
Inserted: (5)(A) Section 5114 (relating to records) is moved to subpart C of such part II and inserted after the table of sections for such subpart.
Inserted: (B) Section 5114 is amended--
Inserted: (i) by striking the section heading and inserting the following new heading:
Inserted: "SEC. 5121. RECORDKEEPING BY WHOLESALE DEALERS.",
Inserted: and
Inserted: (ii) by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection:
Inserted: "(c) Wholesale Dealers.--For purposes of this part--
Inserted: "(1) Wholesale dealer in liquors.--The term 'wholesale dealer in liquors' means any dealer (other than a wholesale dealer in beer) who sells, or offers for sale, distilled spirits, wines, or beer, to another dealer.
Inserted: "(2) Wholesale dealer in beer.--The term 'wholesale dealer in beer' means any dealer who sells, or offers for sale, beer, but not distilled spirits or wines, to another dealer.
Inserted: "(3) Dealer.--The term 'dealer' means any person who sells, or offers for sale, any distilled spirits, wines, or beer.
Inserted: "(4) Presumption in case of sale of 20 wine gallons or more.--The sale, or offer for sale, of distilled spirits, wines, or beer, in quantities of 20 wine gallons or more to the same person at the same time, shall be presumptive evidence that the person making such sale, or offer for sale, is engaged in or carrying on the business of a wholesale dealer in liquors or a wholesale dealer in beer, as the case may be. Such presumption may be overcome by evidence satisfactorily showing that such sale, or offer for sale, was made to a person other than a dealer.".
Inserted: (C) Paragraph (3) of section 5121(d), as so redesignated, is amended by striking "section 5146" and inserting "section 5123".
Inserted: (6)(A) Section 5124 (relating to records) is moved to subpart C of part II of subchapter A of chapter 51 and inserted after section 5121.
Inserted: (B) Section 5124 is amended--
Inserted: (i) by striking the section heading and inserting the following new heading:
Inserted: "SEC. 5122. RECORDKEEPING BY RETAIL DEALERS.",
Inserted: (ii) by striking "section 5146" in subsection (c) and inserting "section 5123", and
Inserted: (iii) by redesignating subsection (c) as subsection (d) and inserting after subsection (b) the following new subsection:
Inserted: "(c) Retail Dealers.--For purposes of this section--
Inserted: "(1) Retail dealer in liquors.--The term 'retail dealer in liquors' means any dealer (other than a retail dealer in beer or a limited retail dealer) who sells, or offers for sale, distilled spirits, wines, or beer, to any person other than a dealer.
Inserted: "(2) Retail dealer in beer.--The term 'retail dealer in beer' means any dealer (other than a limited retail dealer) who sells, or offers for sale, beer, but not distilled spirits or wines, to any person other than a dealer.
Inserted: "(3) Limited retail dealer.--The term 'limited retail dealer' means any fraternal, civic, church, labor, charitable, benevolent, or ex-servicemen's organization making sales of distilled spirits, wine or beer on the occasion of any kind of entertainment, dance, picnic, bazaar, or festival held by it, or any person making sales of distilled spirits, wine or beer to the members, guests, or patrons of bona fide fairs, reunions, picnics, carnivals, or other similar outings, if such organization or person is not otherwise engaged in business as a dealer.
Inserted: "(4) Dealer.--The term 'dealer' has the meaning given such term by section 5121(c)(3).".
Inserted: (7) Section 5146 is moved to subpart C of part II of subchapter A of chapter 51, inserted after section 5122, and redesignated as section 5123.
Inserted: (8) Part II of subchapter A of chapter 51 is amended by inserting after subpart C the following new subpart:
Inserted: "Subpart D--Other Provisions
Inserted: "Sec. 5131. Packaging distilled spirits for industrial uses.
Inserted: "Sec. 5132. Prohibited purchases by dealers.".
Inserted: (9) Section 5116 is moved to subpart D of part II of subchapter A of chapter 51, inserted after the table of sections, redesignated as section 5131, and amended by inserting "(as defined in section 5121(c))" after "dealer" in subsection (a).
Inserted: (10) Subpart D of part II of subchapter A of chapter 51 is amended by adding at the end thereof the following new section:
Inserted: "SEC. 5132. PROHIBITED PURCHASES BY DEALERS.
Inserted: "(a) In General.--Except as provided in regulations prescribed by the Secretary, it shall be unlawful for a dealer to purchase distilled spirits for resale from any person other than a wholesale dealer in liquors who is required to keep the records prescribed by section 5121.
Inserted: "(b) Limited Retail Dealers.--A limited retail dealer may lawfully purchase distilled spirits for resale from a retail dealer in liquors.
Inserted: "(c) Penalty and Forfeiture.--
Inserted: "For penalty and forfeiture provisions applicable to violations of subsection (a), see sections 5687 and 7302.".
Inserted: (11) Subsection (b) of section 5002 is amended--
Inserted: (A) by striking "section 5112(a)" and inserting "section 5121(c)(3)",
Inserted: (B) by striking "section 5112" and inserting "section 5121(c)",
Inserted: (C) by striking "section 5122" and inserting "section 5122(c)".
Inserted: (12) Subparagraph (A) of section 5010(c)(2) is amended by striking "section 5134" and inserting "section 5114".
Inserted: (13) Subsection (d) of section 5052 is amended to read as follows:
Inserted: "(d) Brewer.--For purposes of this chapter, the term 'brewer' means any person who brews beer or produces beer for sale. Such term shall not include any person who produces only beer exempt from tax under section 5053(e).".
Inserted: (14) The text of section 5182 is amended to read as follows:
Inserted: "For provisions requiring recordkeeping by wholesale liquor dealers, see section 5121, and by retail liquor dealers, see section 5122.".
Inserted: (15) Subsection (b) of section 5402 is amended by striking "section 5092" and inserting "section 5052(d)".
Inserted: (16) Section 5671 is amended by striking "or 5091".
Inserted: (17)(A) Part V of subchapter J of chapter 51 is hereby repealed.
Inserted: (B) The table of parts for such subchapter J is amended by striking the item relating to part V.
Inserted: (18)(A) Sections 5142, 5143, and 5145 are moved to subchapter D of chapter 52, inserted after section 5731, redesignated as sections 5732, 5733, and 5734, respectively, and amended by striking "this part" each place it appears and inserting "this subchapter".
Inserted: (B) Section 5732, as redesignated by subparagraph (A), is amended by striking "(except the tax imposed by section 5131)" each place it appears.
Inserted: (C) Paragraph (2) of section 5733(c), as redesignated by subparagraph (A), is amended by striking "liquors" both places it appears and inserting "tobacco products and cigarette papers and tubes".
Inserted: (D) The table of sections for subchapter D of chapter 52 is amended by adding at the end thereof the following:
Inserted: "Sec. 5732. Payment of tax.
Inserted: "Sec. 5733. Provisions relating to liability for occupational taxes.
Inserted: "Sec. 5734. Application of State laws.".
Inserted: (E) Section 5731 is amended by striking subsection (c) and by redesignating subsection (d) as subsection (c).
Inserted: (19) Subsection (c) of section 6071 is amended by striking "section 5142" and inserting "section 5732".
Inserted: (20) Paragraph (1) of section 7652(g) is amended--
Inserted: (A) by striking "subpart F" and inserting "subpart B", and
Inserted: (B) by striking "section 5131(a)" and inserting "section 5111".
Inserted: (c) Effective Date.--The amendments made by this section shall take effect on July 1, 2004, but shall not apply to taxes imposed for periods before such date.
Inserted: SEC. 5432. SUSPENSION OF LIMITATION ON RATE OF RUM EXCISE TAX COVER OVER TO PUERTO RICO AND VIRGIN ISLANDS.
Inserted: (a) In General.--Section 7652(f)(1) (relating to limitation on cover over of tax on distilled spirits) is amended by striking "January 1, 2004" and inserting "October 1, 2004, and $13.50 in the case of distilled spirits brought into the United States after September 30, 2004, and before January 1, 2006".
Inserted: (b) Effective Date.--
Inserted: (1) In general.--The amendment made by subsection (a) shall apply to articles containing distilled spirits brought into the United States after December 31, 2003.
Inserted: (2) Special rule.--
Inserted: (A) In general.--After September 30, 2004, the treasury of Puerto Rico shall make a Conservation Trust Fund transfer within 30 days from the date of each cover over payment to such treasury under section 7652(e) of the Internal Revenue Code of 1986.
Inserted: (B) Conservation trust fund transfer.--
Inserted: (i) In general.--For purposes of this paragraph, the term "Conservation Trust Fund transfer" means a transfer to the Puerto Rico Conservation Trust Fund of an amount equal to 50 cents per proof gallon of the taxes imposed under section 5001 or section 7652 of such Code on distilled spirits that are covered over to the treasury of Puerto Rico under section 7652(e) of such Code.
Inserted: (ii) Treatment of transfer.--Each Conservation Trust Fund transfer shall be treated as principal for an endowment, the income from which to be available for use by the Puerto Rico Conservation Trust Fund for the purposes for which the Trust Fund was established.
Inserted: (iii) Result of nontransfer.--
Inserted: (I) In general.--Upon notification by the Secretary of the Interior that a Conservation Trust Fund transfer has not been made by the treasury of Puerto Rico, the Secretary of the Treasury shall, except as provided in subclause (II), deduct and withhold from the next cover over payment to be made to the treasury of Puerto Rico under section 7652(e) of such Code an amount equal to the appropriate Conservation Trust Fund transfer and interest thereon at the underpayment rate established under section 6621 of such Code as of the due date of such transfer. The Secretary of the Treasury shall transfer such amount deducted and withheld, and the interest thereon, directly to the Puerto Rico Conservation Trust Fund.
Inserted: (II) Good cause exception.--If the Secretary of the Interior finds, after consultation with the Governor of Puerto Rico, that the failure by the treasury of Puerto Rico to make a required transfer was for good cause, and notifies the Secretary of the Treasury of the finding of such good cause before the due date of the next cover over payment following the notification of nontransfer, then the Secretary of the Treasury shall not deduct the amount of such nontransfer from any cover over payment.
Inserted: (C) Puerto rico conservation trust fund.--For purposes of this paragraph, the term "Puerto Rico Conservation Trust Fund" means the fund established pursuant to a Memorandum of Understanding between the United States Department of the Interior and the Commonwealth of Puerto Rico, dated December 24, 1968.
Inserted: PART V--SPORT EXCISE TAXES
Inserted: SEC. 5441. CUSTOM GUNSMITHS.
Inserted: (a) Small Manufacturers Exempt From Firearms Excise Tax.--Section 4182 (relating to exemptions) is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection:
Inserted: "(c) Small Manufacturers, Etc.--
Inserted: "(1) In general.--The tax imposed by section 4181 shall not apply to any article described in such section if manufactured, produced, or imported by a person who manufactures, produces, and imports less than 50 of such articles during the calendar year.
Inserted: "(2) Controlled groups.--All persons treated as a single employer for purposes of subsection (a) or (b) of section 52 shall be treated as one person for purposes of paragraph (1).".
Inserted: (b) Effective Date.--
Inserted: (1) In general.--The amendments made by this section shall apply to articles sold by the manufacturer, producer, or importer on or after the date which is the first day of the month beginning at least 2 weeks after the date of the enactment of this Act.
Inserted: (2) No inference.--Nothing in the amendments made by this section shall be construed to create any inference with respect to the proper tax treatment of any sales before the effective date of such amendments.
Inserted: SEC. 5442. MODIFIED TAXATION OF IMPORTED ARCHERY PRODUCTS.
Inserted: (a) Bows.--Paragraph (1) of section 4161(b) (relating to bows) is amended to read as follows:
Inserted: "(1) Bows.--
Inserted: "(A) In general.--There is hereby imposed on the sale by the manufacturer, producer, or importer of any bow which has a peak draw weight of 30 pounds or more, a tax equal to 11 percent of the price for which so sold.
Inserted: "(B) Archery equipment.--There is hereby imposed on the sale by the manufacturer, producer, or importer-- "(i) of any part or accessory suitable for inclusion in or attachment to a bow described in subparagraph (A), and "(ii) of any quiver or broadhead suitable for use with an arrow described in paragraph (2), a tax equal to 11 percent of the price for which so sold.".
Inserted: (b) Arrows.--Subsection (b) of section 4161 (relating to bows and arrows, etc.) is amended by redesignating paragraph (3) as paragraph (4) and inserting after paragraph (2) the following:
Inserted: "(3) Arrows.--
Inserted: "(A) In general.--There is hereby imposed on the sale by the manufacturer, producer, or importer of any arrow, a tax equal to 12 percent of the price for which so sold.
Inserted: "(B) Exception.--In the case of any arrow of which the shaft or any other component has been previously taxed under paragraph (1) or (2)--
Inserted: "(i) section 6416(b)(3) shall not apply, and
Inserted: "(ii) the tax imposed by subparagraph (A) shall be an amount equal to the excess (if any) of--
Inserted: "(I) the amount of tax imposed by this paragraph (determined without regard to this subparagraph), over
Inserted: "(II) the amount of tax paid with respect to the tax imposed under paragraph (1) or (2) on such shaft or component.
Inserted: "(C) Arrow.--For purposes of this paragraph, the term 'arrow' means any shaft described in paragraph (2) to which additional components are attached.".
Inserted: (c) Conforming Amendments.--Section 4161(b)(2) is amended--
Inserted: (1) by inserting "(other than broadheads)" after "point", and
Inserted: (2) by striking "Arrows.--" in the heading and inserting "Arrow components.--".
Inserted: (d) Effective Date.--The amendments made by this section shall apply to articles sold by the manufacturer, producer, or importer after the date of the enactment of this Act.
Inserted: SEC. 5443. TREATMENT OF TRIBAL GOVERNMENTS FOR PURPOSES OF FEDERAL WAGERING EXCISE AND OCCUPATIONAL TAXES.
Inserted: (a) In General.--Subsection (a) of section 7871 (relating to Indian tribal governments treated as States for certain purposes) is amended by striking "and" at the end of paragraph (6), by striking the period at the end of paragraph (7) and inserting "; and", and by adding at the end the following new paragraph:
Inserted: "(8) for purposes of chapter 35 (relating to taxes on wagering).".
Inserted: (b) Effective Date.--The amendments made by this section shall take effect on July 1, 2004, but shall not apply to taxes imposed for periods before such date.
Inserted: PART VI--OTHER PROVISIONS
Inserted: SEC. 5451. INCOME TAX CREDIT FOR DISTILLED SPIRITS WHOLESALERS AND FOR DISTILLED SPIRITS IN CONTROL STATE BAILMENT WAREHOUSES FOR COSTS OF CARRYING FEDERAL EXCISE TAXES ON BOTTLED DISTILLED SPIRITS.
Inserted: (a) In General.--Subpart A of part I of subchapter A of chapter 51 (relating to gallonage and occupational taxes) is amended by adding at the end the following new section:
Inserted: "SEC. 5011. INCOME TAX CREDIT FOR AVERAGE COST OF CARRYING EXCISE TAX.
Inserted: "(a) In General.--For purposes of section 38, the amount of the distilled spirits credit for any taxable year is the amount equal to the product of--
Inserted: "(1) in the case of--
Inserted: "(A) any eligible wholesaler--
Inserted: "(i) the number of cases of bottled distilled spirits--
Inserted: "(I) which were bottled in the United States, and
Inserted: "(II) which are purchased by such wholesaler during the taxable year directly from the bottler of such spirits, or
Inserted: "(B) any person which is subject to section 5005 and which is not an eligible wholesaler, the number of cases of bottled distilled spirits which are stored in a warehouse operated by, or on behalf of, a State, or agency or political subdivision thereof, on which title has not passed on an unconditional sale basis, and
Inserted: "(2) the average tax-financing cost per case for the most recent calendar year ending before the beginning of such taxable year.
Inserted: "(b) Eligible Wholesaler.--For purposes of this section, the term 'eligible wholesaler' means any person which holds a permit under the Federal Alcohol Administration Act as a wholesaler of distilled spirits which is not a State, or agency or political subdivision thereof.
Inserted: "(c) Average Tax-Financing Cost.--
Inserted: "(1) In general.--For purposes of this section, the average tax-financing cost per case for any calendar year is the amount of interest which would accrue at the deemed financing rate during a 60-day period on an amount equal to the deemed Federal excise tax per case.
Inserted: "(2) Deemed financing rate.--For purposes of paragraph (1), the deemed financing rate for any calendar year is the average of the corporate overpayment rates under paragraph (1) of section 6621(a) (determined without regard to the last sentence of such paragraph) for calendar quarters of such year.
Inserted: "(3) Deemed federal excise tax per case.--For purposes of paragraph (1), the deemed Federal excise tax per case is $25.68.
Inserted: "(d) Other Definitions and Special Rules.--For purposes of this section--
Inserted: "(1) Case.--The term 'case' means 12 80-proof 750 milliliter bottles.
Inserted: "(2) Number of cases in lot.--The number of cases in any lot of distilled spirits shall be determined by dividing the number of liters in such lot by 9.".
Inserted: (b) Credit Treated as Part of General Business Credit.--Section 38(b) (relating to current year business credit), as amended by section 5101 of this Act, is amended by striking "plus" at the end of paragraph (15), by striking the period at the end of paragraph (16) and inserting ", plus", and by adding at the end the following new paragraph:
Inserted: "(17) the distilled spirits credit determined under section 5011(a).".
Inserted: (c) Conforming Amendments.--
Inserted: (1) Section 39(d), as amended by section 5101 of this Act, is amended by adding at the end the following new paragraph:
Inserted: "(12) No carryback of section 5011 credit before effective date.--No portion of the unused business credit for any taxable year which is attributable to the credit determined under section 5011(a) may be carried back to a taxable year beginning before the date of the enactment of section 5011.".
Inserted: (2) The table of sections for subpart A of part I of subchapter A of chapter 51 is amended by adding at the end the following new item:
Inserted: "Sec. 5011. Income tax credit for average cost of carrying excise tax.".
Inserted: (d) Effective Date.--The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
Inserted: SEC. 5452. CREDIT FOR TAXPAYERS OWNING COMMERCIAL POWER TAKEOFF VEHICLES.
Inserted: (a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business-related credits) is amended by adding at the end the following new section:
Inserted: "SEC. 45G. COMMERCIAL POWER TAKEOFF VEHICLES CREDIT.
Inserted: "(a) General Rule.--For purposes of section 38, the amount of the commercial power takeoff vehicles credit determined under this section for the taxable year is $250 for each qualified commercial power takeoff vehicle owned by the taxpayer as of the close of the calendar year in which or with which the taxable year of the taxpayer ends.
Inserted: "(b) Definitions.--For purposes of this section--
Inserted: "(1) Qualified commercial power takeoff vehicle.--The term 'qualified commercial power takeoff vehicle' means any highway vehicle described in paragraph (2) which is propelled by any fuel subject to tax under section 4041 or 4081 if such vehicle is used in a trade or business or for the production of income (and is licensed and insured for such use).
Inserted: "(2) Highway vehicle described.--A highway vehicle is described in this paragraph if such vehicle is--
Inserted: "(A) designed to engage in the daily collection of refuse or recyclables from homes or businesses and is equipped with a mechanism under which the vehicle's propulsion engine provides the power to operate a load compactor, or
Inserted: "(B) designed to deliver ready mixed concrete on a daily basis and is equipped with a mechanism under which the vehicle's propulsion engine provides the power to operate a mixer drum to agitate and mix the product en route to the delivery site.
Inserted: "(c) Exception for Vehicles Used by Governments, Etc.--No credit shall be allowed under this section for any vehicle owned by any person at the close of a calendar year if such vehicle is used at any time during such year by--
Inserted: "(1) the United States or an agency or instrumentality thereof, a State, a political subdivision of a State, or an agency or instrumentality of one or more States or political subdivisions, or
Inserted: "(2) an organization exempt from tax under section 501(a).
Inserted: "(d) Termination.--This section shall not apply with respect to any calendar year after 2006.".
Inserted: (b) Credit Treated as Part of General Business Credit.--Section 38(b) (relating to current year business credit), as amended by section 5451 of this Act, is amended by striking "plus" at the end of paragraph (16), by striking the period at the end of paragraph (17) and inserting ", plus", and by adding at the end the following new paragraph:
Inserted: "(18) the commercial power takeoff vehicles credit under section 45G(a).".
Inserted: (c) Conforming Amendments.--
Inserted: (1) Section 39(d), as amended by section 5451 of this Act, is amended by adding at the end the following new paragraph:
Inserted: "(13) No carryback of section 45g credit before effective date.--No portion of the unused business credit for any taxable year which is attributable to the credit determined under section 45G(a) may be carried back to a taxable year beginning on or before the date of the enactment of section 45G.".
Inserted: (2) The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:
Inserted: "Sec. 45G. Commercial power takeoff vehicles credit.".
Inserted: (d) Effective Date.--The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
Inserted: SEC. 5453. CREDIT FOR AUXILIARY POWER UNITS INSTALLED ON DIESEL-POWERED TRUCKS.
Inserted: (a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business-related credits), as amended by section 5452 of this Act, is amended by adding at the end the following new section:
Inserted: "SEC. 45H. AUXILIARY POWER UNIT CREDIT.
Inserted: "(a) General Rule.--For purposes of section 38, the amount of the auxiliary power unit credit determined under this section for the taxable year is $250 for each qualified auxiliary power unit--
Inserted: "(1) purchased by the taxpayer, and
Inserted: "(2) installed or caused to be installed by the taxpayer on a qualified heavy-duty highway vehicle during such taxable year.
Inserted: "(b) Definitions.--For purposes of this section--
Inserted: "(1) Qualified auxiliary power unit.--The term 'qualified auxiliary power unit' means any integrated system which--
Inserted: "(A) provides heat, air conditioning, engine warming, and electricity to the factory installed components on a qualified heavy-duty highway vehicle as if the main drive engine of such vehicle was in operation,
Inserted: "(B) is employed to reduce long-term idling of the diesel engine on such a vehicle, and
Inserted: "(C) is certified by the Environmental Protection Agency as meeting emission standards in regulations in effect on the date of the enactment of this section.
Inserted: "(2) Qualified heavy-duty highway vehicle.--The term 'qualified heavy-duty highway vehicle' means any highway vehicle weighing more than 12,500 pounds and powered by a diesel engine.
Inserted: "(c) Termination.--This section shall not apply with respect to any installation occurring after December 31, 2006.".
Inserted: (b) Credit Treated as Part of General Business Credit.--Section 38(b) (relating to current year business credit), as amended by section 5452 of this Act, is amended by striking "plus" at the end of paragraph (17), by striking the period at the end of paragraph (18) and inserting ", plus", and by adding at the end the following new paragraph:
Inserted: "(19) the auxiliary power unit credit under section 45H(a).".
Inserted: (c) Conforming Amendments.--
Inserted: (1) Section 39(d), as amended by section 5452 of this Act, is amended by adding at the end the following new paragraph:
Inserted: "(14) No carryback of section 45h credit before effective date.--No portion of the unused business credit for any taxable year which is attributable to the credit determined under section 45H(a) may be carried back to a taxable year beginning on or before the date of the enactment of section 45H.".
Inserted: (2) The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by section 5452 of this Act, is amended by adding at the end the following new item:
Inserted: "Sec. 45H. Auxiliary power unit credit.".
Inserted: (d) Effective Date.--The amendments made by this section shall apply to auxiliary power units purchased and installed for taxable years beginning after the date of the enactment of this Act.
Inserted: Subtitle F--Miscellaneous Provisions SEC. 5501. MOTOR FUEL TAX ENFORCEMENT ADVISORY COMMISSION.
Inserted: (a) Establishment.--There is established a Motor Fuel Tax Enforcement Advisory Commission (in this section referred to as the "Commission").
Inserted: (b) Function.--The Commission shall--
Inserted: (1) review motor fuel revenue collections, historical and current;
Inserted: (2) review the progress of investigations;
Inserted: (3) develop and review legislative proposals with respect to motor fuel taxes;
Inserted: (4) monitor the progress of administrative regulation projects relating to motor fuel taxes;
Inserted: (5) review the results of Federal and State agency cooperative efforts regarding motor fuel taxes;
Inserted: (6) review the results of Federal interagency cooperative efforts regarding motor fuel taxes; and
Inserted: (7) evaluate and make recommendations regarding--
Inserted: (A) the effectiveness of existing Federal enforcement programs regarding motor fuel taxes,
Inserted: (B) enforcement personnel allocation, and
Inserted: (C) proposals for regulatory projects, legislation, and funding.
Inserted: (c) Membership.--
Inserted: (1) Appointment.--The Commission shall be composed of the following representatives appointed by the Chairmen and the Ranking Members of the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives:
Inserted: (A) At least 1 representative from each of the following Federal entities: the Department of Homeland Security, the Department of Transportation - Office of Inspector General, the Federal Highway Administration, the Department of Defense, and the Department of Justice.
Inserted: (B) At least 1 representative from the Federation of State Tax Administrators.
Inserted: (C) At least 1 representative from any State department of transportation.
Inserted: (D) 2 representatives from the highway construction industry.
Inserted: (E) 5 representatives from industries relating to fuel distribution -- refiners (2 representatives), distributors (1 representative), pipelines (1 representative), and terminal operators (2 representatives).
Inserted: (F) 1 representative from the retail fuel industry.
Inserted: (G) 2 representatives from the staff of the Committee on Finance of the Senate and 2 representatives from the staff of the Committee on Ways and Means of the House of Representatives.
Inserted: (2) Terms.--Members shall be appointed for the life of the Commission.
Inserted: (3) Vacancies.--A vacancy in the Commission shall be filled in the manner in which the original appointment was made.
Inserted: (4) Travel expenses.--Members shall serve without pay but shall receive travel expenses, including per diem in lieu of subsistence, in accordance with sections 5702 and 5703 of title 5, United States Code.
Inserted: (5) Chairman.--The Chairman of the Commission shall be elected by the members.
Inserted: (d) Funding.--Such sums as are necessary shall be available from the Highway Trust fund for the expenses of the Commission.
Inserted: (e) Consultation.--Upon request of the Commission, representatives of the Department of the Treasury and the Internal Revenue Service shall be available for consultation to assist the Commission in carrying out its duties under this section.
Inserted: (f) Obtaining Data.--The Commission may secure directly from any department or agency of the United States, information (other than information required by any law to be kept confidential by such department or agency) necessary for the Commission to carry out its duties under this section. Upon request of the Commission, the head of that department or agency shall furnish such nonconfidential information to the Commission. The Commission shall also gather evidence through such means as it may deem appropriate, including through holding hearings and soliciting comments by means of Federal Register notices.
Inserted: (g) Termination.--The Commission shall terminate after September 30, 2009.
Inserted: SEC. 5502. NATIONAL SURFACE TRANSPORTATION INFRASTRUCTURE FINANCING COMMISSION.
Inserted: (a) Establishment.--There is established a National Surface Transportation Infrastructure Financing Commission (in this section referred to as the "Commission"). The Commission shall hold its first meeting within 90 days of the appointment of the eighth individual to be named to the Commission.
Inserted: (b) Function.--
Inserted: (1) In general.--The Commission shall--
Inserted: (A) make a thorough investigation and study of revenues flowing into the Highway Trust Fund under current law, including the individual components of the overall flow of such revenues;
Inserted: (B) consider whether the amount of such revenues is likely to increase, decline, or remain unchanged, absent changes in the law, particularly by taking into account the impact of possible changes in public vehicular choice, fuel use, or travel alternatives that could be expected to reduce or increase revenues into the Highway Trust Fund;
Inserted: (C) consider alternative approaches to generating revenues for the Highway Trust Fund, and the level of revenues that such alternatives would yield;
Inserted: (D) consider highway and transit needs and whether additional revenues into the Highway Trust Fund, or other Federal revenues dedicated to highway and transit infrastructure, would be required in order to meet such needs; and
Inserted: (E) study such other matters closely related to the subjects described in the preceding subparagraphs as it may deem appropriate.
Inserted: (2) Time frame of investigation and study.--The time frame to be considered by the Commission shall extend through the year 2015.
Inserted: (3) Preparation of report.--Based on such investigation and study, the Commission shall develop a final report, with recommendations and the bases for those recommendations, indicating policies that should be adopted, or not adopted, to achieve various levels of annual revenue for the Highway Trust Fund and to enable the Highway Trust Fund to receive revenues sufficient to meet highway and transit needs. Such recommendations shall address, among other matters as the Commission may deem appropriate--
Inserted: (A) what levels of revenue are required by the Federal Highway Trust Fund in order for it to meet needs to--
Inserted: (i) maintain, and
Inserted: (ii) improve the condition and performance of the Nation's highway and transit systems;
Inserted: (B) what levels of revenue are required by the Federal Highway Trust Fund in order to ensure that Federal levels of investment in highways and transit do not decline in real terms; and
Inserted: (C) the extent, if any, to which the Highway Trust Fund should be augmented by other mechanisms or funds as a Federal means of financing highway and transit infrastructure investments.
Inserted: (c) Membership.--
Inserted: (1) Appointment.--The Commission shall be composed of 15 members, appointed as follows:
Inserted: (A) 7 members appointed by the Secretary of Transportation, in consultation with the Secretary of the Treasury.
Inserted: (B) 2 members appointed by the Chairman of the Committee on Ways and Means of the House of Representatives.
Inserted: (C) 2 members appointed by the Ranking Minority Member of the Committee on Ways and Means of the House of Representatives.
Inserted: (D) 2 members appointed by the Chairman of the Committee on Finance of the Senate.
Inserted: (E) 2 members appointed by the Ranking Minority Member of the Committee on Finance of the Senate.
Inserted: (2) Qualifications.--Members appointed pursuant to paragraph (1) shall be appointed from among individuals knowledgeable in the fields of public transportation finance or highway and transit programs, policy, and needs, and may include representatives of interested parties, such as State and local governments or other public transportation authorities or agencies, representatives of the transportation construction industry (including suppliers of technology, machinery and materials), transportation labor (including construction and providers), transportation providers, the financial community, and users of highway and transit systems.
Inserted: (3) Terms.--Members shall be appointed for the life of the Commission.
Inserted: (4) Vacancies.--A vacancy in the Commission shall be filled in the manner in which the original appointment was made.
Inserted: (5) Travel expenses.--Members shall serve without pay but shall receive travel expenses, including per diem in lieu of subsistence, in accordance with sections 5702 and 5703 of title 5, United States Code.
Inserted: (6) Chairman.--The Chairman of the Commission shall be elected by the members.
Inserted: (d) Staff.--The Commission may appoint and fix the pay of such personnel as it considers appropriate.
Inserted: (e) Funding.--Funding for the Commission shall be provided by the Secretary of the Treasury and by the Secretary of Transportation, out of funds available to those agencies for administrative and policy functions.
Inserted: (f) Staff of Federal Agencies.--Upon request of the Commission, the head of any department or agency of the United States may detail any of the personnel of that department or agency to the Commission to assist in carrying out its duties under this section.
Inserted: (g) Obtaining Data.--The Commission may secure directly from any department or agency of the United States, information (other than information required by any law to be kept confidential by such department or agency) necessary for the Commission to carry out its duties under this section. Upon request of the Commission, the head of that department or agency shall furnish such nonconfidential information to the Commission. The Commission shall also gather evidence through such means as it may deem appropriate, including through holding hearings and soliciting comments by means of Federal Register notices.
Inserted: (h) Report.--Not later than 2 years after the date of its first meeting, the Commission shall transmit its final report, including recommendations, to the Secretary of Transportation, the Secretary of the Treasury, and the Committee on Ways and Means of the House of Representatives, the Committee on Finance of the Senate, the Committee on Transportation and Infrastructure of the House of Representatives, the Committee on Environment and Public Works of the Senate, and the Committee on Banking, Housing, and Urban Affairs of the Senate.
Inserted: (i) Termination.--The Commission shall terminate on the 180th day following the date of transmittal of the report under subsection (h). All records and papers of the Commission shall thereupon be delivered to the Administrator of General Services for deposit in the National Archives.
Inserted: SEC. 5503. TREASURY STUDY OF FUEL TAX COMPLIANCE AND INTERAGENCY COOPERATION.
Inserted: (a) In General.--Not later than January 31, 2006, the Secretary of the Treasury shall submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a report regarding fuel tax enforcement which shall include the information and analysis specified in subsections (b) and (c) and any other information and recommendations the Secretary of the Treasury may deem appropriate.
Inserted: (b) Audits.--With respect to audits conducted by the Internal Revenue Service, the report required under subsection (a) shall include--
Inserted: (1) the number and geographic distribution of audits conducted annually, by fiscal year, between October 1, 2001, and September 30, 2005;
Inserted: (2) the total volume involved for each of the taxable fuels covered by such audits and a comparison to the annual production of such fuels;
Inserted: (3) the staff hours and number of personnel devoted to the audits per year; and
Inserted: (4) the results of such audits by year, including total tax collected, total penalties collected, and number of referrals for criminal prosecution.
Inserted: (c) Enforcement Activities.--With respect to enforcement activities, the report required under subsection (a) shall include--
Inserted: (1) the number and geographic distribution of criminal investigations and prosecutions annually, by fiscal year, between October 1, 2001, and September 30, 2005, and the results of such investigations and prosecutions;
Inserted: (2) to the extent such investigations and prosecutions involved other agencies, State or Federal, a breakdown by agency of the number of joint investigations involved;
Inserted: (3) an assessment of the effectiveness of joint action and cooperation between the Department of the Treasury and other Federal and State agencies, including a discussion of the ability and need to share information across agencies for both civil and criminal Federal tax enforcement and enforcement of State or Federal laws relating to fuels;
Inserted: (4) the staff hours and number of personnel devoted to criminal investigations and prosecutions per year;
Inserted: (5) the staff hours and number of personnel devoted to administrative collection of fuel taxes; and
Inserted: (6) the results of administrative collection efforts annually, by fiscal year, between October 1, 2001, and September 30, 2005.
Inserted: SEC. 5504. EXPANSION OF HIGHWAY TRUST FUND EXPENDITURE PURPOSES TO INCLUDE FUNDING FOR STUDIES OF SUPPLEMENTAL OR ALTERNATIVE FINANCING FOR THE HIGHWAY TRUST FUND.
Inserted: (a) In General.--From amounts available in the Highway Trust Fund, there is authorized to be expended for 2 comprehensive studies of supplemental or alternative funding sources for the Highway Trust Fund--
Inserted: (1) $1,000,000 to the Western Transportation Institute of the College of Engineering at Montana State University for the study and report described in subsection (b), and
Inserted: (2) $16,500,000 to the Public Policy Center of the University of Iowa for the study and report described in subsection (c).
Inserted: (b) Study of Funding Mechanisms.--Not later than December 31, 2006, the Western Transportation Institute of the College of Engineering at Montana State University shall report to the Secretary of the Treasury and the Secretary of Transportation on a study of highway funding mechanisms of other industrialized nations, an examination of the viability of alternative funding proposals, including congestion pricing, greater reliance on tolls, privatization of facilities, and bonding for construction of added capacity, and an examination of increasing the rates of motor fuels taxes in effect on the date of the enactment of this Act, including the indexation of such rates.
Inserted: (c) Study on Field Test of On-Board Computer Assessment of Highway Use Taxes.--Not later than December 31, 2011, the Public Policy Center of the University of Iowa shall direct, analyze, and report to the Secretary of the Treasury and the Secretary of Transportation on a long-term field test of an approach to assessing highway use taxes based upon actual mileage driven by a specific vehicle on specific types of highways by use of an on-board computer--
Inserted: (1) which is linked to satellites to calculate highway mileage traversed,
Inserted: (2) which computes the appropriate highway use tax for each of the Federal, State, and local governments as the vehicle makes use of the highways, and
Inserted: (3) the data from which is periodically downloaded by the vehicle owner to a collection center for an assessment of highway use taxes due in each jurisdiction traversed.The components of the field test shall include 2 years for preparation, including selection of vendors and test participants, and 3-year testing period.
Inserted: SEC. 5505. TREASURY STUDY OF HIGHWAY FUELS USED BY TRUCKS FOR NON-TRANSPORTATION PURPOSES.
Inserted: (a) Study.--The Secretary of the Treasury shall conduct a study regarding the use of highway motor fuel by trucks that is not used for the propulsion of the vehicle. As part of such study--
Inserted: (1) in the case of vehicles carrying equipment that is unrelated to the transportation function of the vehicle--
Inserted: (A) the Secretary of the Treasury, in consultation with the Secretary of Transportation, and with public notice and comment, shall determine the average annual amount of tax paid fuel consumed per vehicle, by type of vehicle, used by the propulsion engine to provide the power to operate the equipment attached to the highway vehicle, and
Inserted: (B) the Secretary of the Treasury shall review the technical and administrative feasibility of exempting such nonpropulsive use of highway fuels for the highway motor fuels excise taxes,
Inserted: (2) in the case where non-transportation equipment is run by a separate motor--
Inserted: (A) the Secretary of the Treasury shall determine the annual average amount of fuel exempted from tax in the use of such equipment by equipment type, and
Inserted: (B) the Secretary of the Treasury shall review issues of administration and compliance related to the present-law exemption provided for such fuel use, and
Inserted: (3) the Secretary of the Treasury shall--
Inserted: (A) estimate the amount of taxable fuel consumed by trucks and the emissions of various pollutants due to the long-term idling of diesel engines, and
Inserted: (B) determine the cost of reducing such long-term idling through the use of plug-ins at truck stops, auxiliary power units, or other technologies.
Inserted: (b) Report.--Not later than January 1, 2006, the Secretary of the Treasury shall report the findings of the study required under subsection (a) to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives.
Inserted: SEC. 5506. DELTA REGIONAL TRANSPORTATION PLAN.
Inserted: (a) Study.--The Delta Regional Authority shall conduct a study of the transportation assets and needs in the States of Alabama, Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee which comprise the Delta region.
Inserted: (b) Regional Strategic Transportation Plan.--Upon completion of the study required under subsection (a), the Delta Regional Authority shall establish a regional strategic transportation plan to achieve efficient transportation systems in the Delta region. In developing the regional strategic transportation plan, the Delta Regional Authority shall consult with local planning and development districts, local and regional governments, metropolitan planning organizations, State transportation entities, and Federal transportation agencies.
Inserted: (c) Elements of Study and Plan.--The study and plan under this section shall include the following transportation modes and systems: transit, rail, highway, interstate, bridges, air, airports, waterways and ports.
Inserted: (d) Authorization of Appropriations.--There is authorized to be appropriated to the Delta Regional Authority $1,000,000 to carry out the purposes of this section, to remain available until expended.
Inserted: SEC. 5507. TREATMENT OF EMPLOYER-PROVIDED TRANSIT AND VAN POOLING BENEFITS.
Inserted: (a) In General.--Subparagraph (A) of section 132(f)(2) (relating to limitation on exclusion) is amended by striking "$100" and inserting "$120".
Inserted: (b) Inflation Adjustment Conforming Amendments.--The last sentence of section 132(f)(6)(A) (relating to inflation adjustment) is amended--
Inserted: (1) by striking "2002" and inserting "2005", and
Inserted: (2) by striking "2001" and inserting "2004".
Inserted: (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2004.
Inserted: SEC. 5508. STUDY OF INCENTIVES FOR PRODUCTION OF BIODIESEL.
Inserted: (a) Study.--The General Comptroller of the United States shall conduct a study related to biodiesel fuels and the tax credit for biodiesel fuels established under this Act. Such study shall include--
Inserted: (1) an assessment on whether such credit provides sufficient assistance to the producers of biodiesel fuel to establish the fuel as a viable energy alternative in the current market place,
Inserted: (2) an assessment on how long such credit or similar subsidy would have to remain in effect before biodiesel fuel can compete in the market place without such assistance,
Inserted: (3) a cost-benefit analysis of such credit, comparing the cost of the credit in forgone revenue to the benefits of lower fuel costs for consumers, increased profitability for the biodiesel industry, increased farm income, reduced program outlays from the Department of Agriculture, and the improved environmental conditions through the use of biodiesel fuel, and
Inserted: (4) an assessment on whether such credit results in any unintended consequences for unrelated industries, including the impact, if any, on the glycerin market.
Inserted: (b) Report.--Not later than 2 years after the date of the enactment of this Act, the Comptroller General of the United States shall report the findings of the study required under subsection (a) to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives.
Inserted: SEC. 5509. REDUCTION OF EXPENDITURES FROM THE HIGHWAY TRUST FUND.
Inserted: The amount made available under titles I, II, III, and IV of this Act shall be reduced on a pro rata basis, so that the total of such reductions equals $214,000,000,000.
Inserted: Subtitle G--Revenue Offsets PART I--LIMITATION ON EXPENSING CERTAIN PASSENGER AUTOMOBILES SEC. 5601. EXPANSION OF LIMITATION ON DEPRECIATION OF CERTAIN PASSENGER AUTOMOBILES.
Inserted: (a) In General.--Section 179(b) (relating to limitations) is amended by adding at the end the following new paragraph:
Inserted: "(6) Limitation on cost taken into account for certain passenger vehicles.--
Inserted: "(A) In general.--The cost of any sport utility vehicle for any taxable year which may be taken into account under this section shall not exceed $25,000.
Inserted: "(B) Sport utility vehicle.--For purposes of subparagraph (A)--
Inserted: "(i) In general.--The term 'sport utility vehicle' means any 4-wheeled vehicle which--
Inserted: "(I) is manufactured primarily for use on public streets, roads, and highways,
Inserted: "(II) is not subject to section 280F, and
Inserted: "(III) is rated at not more than 14,000 pounds gross vehicle weight.
Inserted: "(ii) Certain vehicles excluded.--Such term does not include any vehicle which--
Inserted: "(I) does not have the primary load carrying device or container attached,
Inserted: "(II) has a seating capacity of more than 12 individuals,
Inserted: "(III) is designed for more than 9 individuals in seating rearward of the driver's seat,
Inserted: "(IV) is equipped with an open cargo area, or a covered box not readily accessible from the passenger compartment, of at least 72.0 inches in interior length, or
Inserted: "(V) has an integral enclosure, fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield.".
Inserted: (c) Effective Date.--The amendments made by this section shall apply to property placed in service after February 2, 2004.
Inserted: PART II--PROVISION TO REPLENISH THE GENERAL FUND
Inserted: SEC. 5611. MODIFICATION TO CORPORATE ESTIMATED TAX REQUIREMENTS.
Inserted: The amount of any required installment of corporate estimated income tax which is otherwise due under section 6655 of the Internal Revenue Code of 1986 after June 30, 2009, and before October 1, 2009, shall be 119 percent of such amount.
Original wording
Strike title V and insert the following:
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As printed
SA 2316. Mr. KYL submitted an amendment intended to be proposed by him to the bill S. 1072, to authorize funds for Federal-aid highways, highway safety programs, and transit programs, and for other purposes; which was ordered to lie on the table; as follows:
Strike title V and insert the following:
TITLE V--HIGHWAY REAUTHORIZATION AND EXCISE TAX SIMPLIFICATION
SEC. 5000. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.
(a) Short Title.--This title may be cited as the “Highway Reauthorization and Excise Tax Simplification Act of 2004”.
(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.
(c) Table of Contents.--The table of contents for this title is as follows:
TITLE V--HIGHWAY REAUTHORIZATION AND EXCISE TAX SIMPLIFICATION
Sec. 5000. Short title; amendment of 1986 code; table of contents.
Subtitle A--Trust Fund Reauthorization
Sec. 5001. Extension of Highway Trust Fund and Aquatic Resources Trust Fund expenditure authority and related taxes.
Sec. 5002. Full accounting of funds received by the Highway Trust Fund.
Sec. 5003. Modification of adjustments of apportionments.
Subtitle B--Biodiesel Income Tax Credit
Sec. 5101. Biodiesel income tax credit.
Subtitle C--Fuel Fraud Prevention
Sec. 5200. Short title.
Part I--Aviation Jet Fuel
Sec. 5211. Taxation of aviation-grade kerosene.
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.
Part II--Dyed Fuel
Sec. 5221. Dye injection equipment.
Sec. 5222. Elimination of administrative review for taxable use of dyed fuel.
Sec. 5223. Penalty on untaxed chemically altered dyed fuel mixtures.
Sec. 5224. Termination of dyed diesel use by intercity buses.
Part III--Modification of Inspection of Records Provisions
Sec. 5231. Authority to inspect on-site records.
Sec. 5232. Assessable penalty for refusal of entry.
Part IV--Registration and Reporting Requirements
Sec. 5241. Registration of pipeline or vessel operators required for exemption of bulk transfers to registered terminals or refineries.
Sec. 5242. Display of registration.
Sec. 5243. Registration of persons within foreign trade zones.
Sec. 5244. Penalties for failure to register and failure to report.
Sec. 5245. Information reporting for persons claiming certain tax benefits.
Part V--Imports
Sec. 5251. Tax at point of entry where importer not registered.
Sec. 5252. Reconciliation of on-loaded cargo to entered cargo.
Part VI--Miscellaneous Provisions
Sec. 5261. Tax on sale of diesel fuel whether suitable for use or not in a diesel-powered vehicle or train.
Sec. 5262. Modification of ultimate vendor refund claims with respect to farming.
Sec. 5263. Taxable fuel refunds for certain ultimate vendors.
Sec. 5264. Two-party exchanges.
Sec. 5265. Modifications of tax on use of certain vehicles.
Sec. 5266. Dedication of revenues from certain penalties to the Highway Trust Fund.
Sec. 5267. Nonapplication of export exemption to delivery of fuel to motor vehicles removed from United States.
Part VII--Total Accountability
Sec. 5271. Total accountability.
Sec. 5272. Excise tax reporting.
Sec. 5273. Information reporting.
Subtitle D--Definition of Highway Vehicle
Sec. 5301. Exemption from certain excise taxes for mobile machinery.
Sec. 5302. Modification of definition of off-highway vehicle.
Subtitle E--Excise Tax Reform and Simplification
Part I--Highway Excise Taxes
Sec. 5401. Dedication of gas guzzler tax to Highway Trust Fund.
Sec. 5402. Repeal certain excise taxes on rail diesel fuel and inland waterway barge fuels.
Part II--Aquatic Excise Taxes
Sec. 5411. Elimination of Aquatic Resources Trust Fund and transformation of Sport Fish Restoration Account.
Sec. 5412. Exemption of LED devices from sonar devices suitable for finding fish.
Sec. 5413. Repeal of harbor maintenance tax on exports.
Sec. 5414. Cap on excise tax on certain fishing equipment.
Sec. 5415. Reduction in rate of tax on portable aerated bait containers.
Part III--Aerial Excise Taxes
Sec. 5421. Clarification of excise tax exemptions for agricultural aerial applicators and exemption for fixed-wing aircraft engaged in forestry operations.
Sec. 5422. Modification of rural airport definition.
Sec. 5423. Exemption from ticket taxes for transportation provided by seaplanes.
Sec. 5424. Certain sightseeing flights exempt from taxes on air transportation.
Part IV--Alcoholic Beverage Excise Taxes
Sec. 5431. Repeal of special occupational taxes on producers and marketers of alcoholic beverages.
Sec. 5432. Suspension of limitation on rate of rum excise tax cover over to Puerto Rico and Virgin Islands.
Part V--Sport Excise Taxes
Sec. 5441. Custom gunsmiths.
Sec. 5442. Modified taxation of imported archery products.
Sec. 5443. Treatment of tribal governments for purposes of Federal wagering excise and occupational taxes.
Part VI--Other Provisions
Sec. 5451. Income tax credit for distilled spirits wholesalers and for distilled spirits in control State bailment warehouses for costs of carrying Federal excise taxes on bottled distilled spirits.
Sec. 5452. Credit for taxpayers owning commercial power takeoff vehicles.
Sec. 5453. Credit for auxiliary power units installed on diesel-powered trucks.
Subtitle F--Miscellaneous Provisions
Sec. 5501. Motor Fuel Tax Enforcement Advisory Commission.
Sec. 5502. National Surface Transportation Infrastructure Financing Commission.
Sec. 5503. Treasury study of fuel tax compliance and interagency cooperation.
Sec. 5504. Expansion of Highway Trust Fund expenditure purposes to include funding for studies of supplemental or alternative financing for the Highway Trust Fund.
Sec. 5505. Treasury study of highway fuels used by trucks for non-transportation purposes.
Sec. 5506. Delta regional transportation plan.
Sec. 5507. Treatment of employer-provided transit and van pooling benefits.
Sec. 5508. Study of incentives for production of biodiesel.
Sec. 5509. Reduction of expenditures from the Highway Trust Fund.
Subtitle G--Revenue Offsets Part I--Limitation on Expensing Certain Passengers Automobiles
Sec. 5601. Expansion of limitation on depreciation of certain passenger automobiles.
Part II--Provision To Replenish the General Fund
Sec. 5611. Modification to corporate estimated tax requirements.
Subtitle A--Trust Fund Reauthorization SEC. 5001. EXTENSION OF HIGHWAY TRUST FUND AND AQUATIC RESOURCES TRUST FUND EXPENDITURE AUTHORITY AND RELATED TAXES.
(a) Highway Trust Fund Expenditure Authority.--
(1) Highway account.--Paragraph (1) of section 9503(c) (relating to transfers from Highway Trust Fund for certain repayments and credits) is amended--
(A) in the matter before subparagraph (A), by striking “March 1, 2004” and inserting “October 1, 2009”,
(B) by striking “or” at the end of subparagraph (E),
(C) by striking the period at the end of subparagraph (F) and inserting “, or”,
(D) by inserting after subparagraph (F), the following new subparagraph:
“(G) authorized to be paid out of the Highway Trust Fund under the Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2004.”, and
(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”.
(2) Mass transit account.--Paragraph (3) of section 9503(e) (relating to establishment of Mass Transit Account) is amended--
(A) in the matter before subparagraph (A), by striking “March 1, 2004” and inserting “October 1, 2009”,
(B) by striking “or” at the end of subparagraph (C),
(C) by striking the period at the end of subparagraph (D) and inserting “, or”,
(D) by inserting after subparagraph (D), the following new subparagraph:
“(E) the Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2004,”, and
(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”.
(3) Exception to limitation on transfers.--Subparagraph (B) of section 9503(b)(5) (relating to limitation on transfers to Highway Trust Fund) is amended by striking “March 1, 2004” and inserting “October 1, 2009”.
(b) Aquatic Resources Trust Fund Expenditure Authority.--
(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”.
(2) Boat safety account.--Section 9504(c) (relating to expenditures from Boat Safety Account) is amended--
(A) by striking “March 1, 2004” and inserting “October 1, 2009”, and
(B) by striking “Surface Transportation Extension Act of 2003” and inserting “Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2004”.
(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 “March 1, 2004” and inserting “October 1, 2009”.
(4) Technical correction.--The last sentence of paragraph (2) of section 9504(b) is amended by striking “subparagraph (B)”, and inserting “subparagraph (C)”.
(c) Extension of Taxes.--
(1) In general.--The following provisions are each amended by striking “2005” each place it appears and inserting “2009”:
(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)(A) (relating to certain alcohol fuels produced from natural gas).
(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(e) (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) (relating to floor stocks refunds) is amended--
(A) by striking “2005” each place it appears and inserting “2009”, and
(B) by striking “2006” each place it appears and inserting “2010”.
(d) Extension of Certain Exemptions.--The following provisions are each amended by striking “2005” and inserting “2009”:
(1) Section 4221(a) (relating to certain tax-free sales).
(2) Section 4483(g) (relating to termination of exemptions for highway use tax).
(e) Extension of Deposits Into, and Certain Transfers From, Trust Fund.--
(1) In general.--Subsections (b), (c)(2), (c)(3), (c)(4)(A)(i), and (c)(5)(A) of section 9503 (relating to the Highway Trust Fund) are amended--
(A) by striking “2005” each place it appears and inserting “2009”, and
(B) by striking “2006” each place it appears and inserting “2010”.
(2) 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--
(A) by striking “2003” and inserting “2007”, and
(B) by striking “2004” each place it appears and inserting “2008”.
(f) Extension of Tax Benefits for Qualified Methanol and Ethanol Fuel Produced From Coal.--Section 4041(b)(2) (relating to qualified methanol and ethanol fuel) is amended--
(1) by striking “2007” in subparagraph (C)(ii) and inserting “2010”, and
(2) by striking “October 1, 2007” in subparagraph (D) and inserting “January 1, 2011”.
(g) Prohibition on Use of Highway Account for Rail Projects.--Section 9503(c) (relating to transfers from Highway Trust Fund for certain repayments and credits) is amended by adding at the end the following new paragraph:
“(6) Prohibition on use of highway account for rail projects.--With respect to projects beginning after the date of the enactment of this paragraph, no amount shall be available from the Highway Account (as defined in subsection (e)(5)(B)) for any rail project.”.
(h) Highway Trust Fund Expenditures for Highway Use Tax Evasion Projects.--From amounts available in the Highway Trust Fund, there is authorized to be expended such sums as are necessary for highway use tax evasion projects.
(i) Effective Date.--The amendments made by and provisions of this section shall take effect on the date of the enactment of this Act.
SEC. 5002. FULL ACCOUNTING OF FUNDS RECEIVED BY THE HIGHWAY TRUST FUND.
(a) In General.--Section 9503(c) (relating to transfers from Highway Trust Fund for certain repayments and credits), as amended by section 5001 of this Act, is amended by striking paragraph (2) and redesignating paragraphs (3), (4), (5), and (6) as paragraphs (2), (3), (4), and (5), respectively.
(b) Interest on Unexpended Balances Credited to Trust Fund.--Section 9503 (relating to the Highway Trust Fund) is amended by striking subsection (f).
(c) Conforming Amendments.--
(1) Section 9503(b)(4)(D) is amended by striking “paragraph (4)(D) or (5)(B)” and inserting “paragraph (3)(D) or (4)(B)”.
(2) Paragraph (2) of section 9503(c) (as redesignated by subsection (a)) is amended by adding at the end the following new sentence: “The amounts payable from the Highway Trust Fund under this paragraph shall be determined by taking into account only the portion of the taxes which are deposited into the Highway Trust Fund.”.
(3) Section 9504(a)(2) is amended by striking “section 9503(c)(4), section 9503(c)(5)” and inserting “section 9503(c)(3), section 9503(c)(4)”.
(4) Paragraph (2) of section 9504(b), as amended by section 5001 of this Act, is amended by striking “section 9503(c)(5)” and inserting “section 9503(c)(4)”.
(5) Section 9504(e) is amended by striking “section 9503(c)(4)” and inserting “section 9503(c)(3)”.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the amendments made by this section shall apply to amounts paid for which no transfer from the Highway Trust Fund has been made before April 1, 2004.
(2) Interest credited.--The amendment made by subsection (b) shall take effect on the date of the enactment of this Act.
SEC. 5003. MODIFICATION OF ADJUSTMENTS OF APPORTIONMENTS.
(a) In General.--Section 9503(d) (relating to adjustments for apportionments) is amended--
(1) by striking “24-month” in paragraph (1)(B) and inserting “48-month”, and
(2) by striking “2 years”' in the heading for paragraph (3) and inserting “4 years”'.
(b) Measurement of Net Highway Receipts.--Section 9503(d) is amended by redesignating paragraph (6) as paragraph (7) and by inserting after paragraph (5) the following new paragraph:
“(6) Measurement of net highway receipts.--For purposes of making any estimate under paragraph (1) of net highway receipts for periods ending after the date specified in subsection (b)(1), the Secretary shall treat--
“(A) each expiring provision of subsection (b) which is related to appropriations or transfers to the Highway Trust Fund to have been extended through the end of the 48-month period referred to in paragraph (1)(B), and
“(B) with respect to each tax imposed under the sections referred to in subsection (b)(1), the rate of such tax during the 48-month period referred to in paragraph (1)(B) to be the same as the rate of such tax as in effect on the date of such estimate.”.
(c) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.
Subtitle B--Biodiesel Income Tax Credit SEC. 5101. BIODIESEL INCOME TAX CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits) is amended by inserting after section 40 the following new section:
“SEC. 40A. BIODIESEL USED AS FUEL.
“(a) General Rule.--For purposes of section 38, the biodiesel fuels credit determined under this section for the taxable year is an amount equal to the sum of--
“(1) the biodiesel mixture credit, plus
“(2) the biodiesel credit.
“(b) Definition of Biodiesel Mixture Credit and Biodiesel Credit.--For purposes of this section--
“(1) Biodiesel mixture credit.--
“(A) In general.--The biodiesel mixture credit of any taxpayer for any taxable year is 50 cents for each gallon of biodiesel used by the taxpayer in the production of a qualified biodiesel mixture.
“(B) Qualified biodiesel mixture.--The term ‘qualified biodiesel mixture' means a mixture of biodiesel and diesel fuel (as defined in section 4083(a)(3)), determined without regard to any use of kerosene, which--
“(i) is sold by the taxpayer producing such mixture to any person for use as a fuel, or
“(ii) is used as a fuel by the taxpayer producing such mixture.
“(C) Sale or use must be in trade or business, etc.--Biodiesel used in the production of a qualified biodiesel mixture shall be taken into account--
“(i) only if the sale or use described in subparagraph (B) is in a trade or business of the taxpayer, and
“(ii) for the taxable year in which such sale or use occurs.
“(D) Casual off-farm production not eligible.--No credit shall be allowed under this section with respect to any casual off-farm production of a qualified biodiesel mixture.
“(2) Biodiesel credit.--
“(A) In general.--The biodiesel credit of any taxpayer for any taxable year is 50 cents for each gallon of biodiesel which is not in a mixture with diesel fuel and which during the taxable year--
“(i) is used by the taxpayer as a fuel in a trade or business, or
“(ii) is sold by the taxpayer at retail to a person and placed in the fuel tank of such person's vehicle.
“(B) User credit not to apply to biodiesel sold at retail.--No credit shall be allowed under subparagraph (A)(i) with respect to any biodiesel which was sold in a retail sale described in subparagraph (A)(ii).
“(3) Credit for agri-biodiesel.--In the case of any biodiesel which is agri-biodiesel, paragraphs (1)(A) and (2)(A) shall be applied by substituting ‘$1.00' for ‘50 cents'.
“(4) Certification for biodiesel.--No credit shall be allowed under this section unless the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer or importer of the biodiesel which identifies the product produced and the percentage of biodiesel and agri-biodiesel in the product.
“(c) Coordination With Credit Against Excise Tax.--The amount of the credit determined under this section with respect to any biodiesel shall be properly reduced to take into account any benefit provided with respect to such biodiesel solely by reason of the application of section 6426 or 6427(e).
“(d) Definitions and Special Rules.--For purposes of this section--
“(1) Biodiesel.--The term ‘biodiesel' means the monoalkyl esters of long chain fatty acids derived from plant or animal matter which meet--
“(A) the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (42 U.S.C. 7545), and
“(B) the requirements of the American Society of Testing and Materials D6751.
“(2) Agri-biodiesel.--The term ‘agri-biodiesel' means biodiesel derived solely from virgin oils, including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, and mustard seeds, and from animal fats.
“(3) Mixture or biodiesel not used as a fuel, etc.--
“(A) Mixtures.--If--
“(i) any credit was determined under this section with respect to biodiesel used in the production of any qualified biodiesel mixture, and
“(ii) any person--
“(I) separates the biodiesel from the mixture, or
“(II) without separation, uses the mixture other than as a fuel, then there is hereby imposed on such person a tax equal to the product of the rate applicable under subsection (b)(1)(A) and the number of gallons of such biodiesel in such mixture.
“(B) Biodiesel.--If--
“(i) any credit was determined under this section with respect to the retail sale of any biodiesel, and
“(ii) any person mixes such biodiesel or uses such biodiesel other than as a fuel, then there is hereby imposed on such person a tax equal to the product of the rate applicable under subsection (b)(2)(A) and the number of gallons of such biodiesel.
“(C) Applicable laws.--All provisions of law, including penalties, shall, insofar as applicable and not inconsistent with this section, apply in respect of any tax imposed under subparagraph (A) or (B) as if such tax were imposed by section 4081 and not by this chapter.
“(4) Pass-thru in the case of estates and trusts.--Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.
“(e) Termination.--This section shall not apply to any sale or use after December 31, 2006.”.
(b) Credit Treated as Part of General Business Credit.--Section 38(b) (relating to current year business credit) is amended by striking “plus” at the end of paragraph (14), by striking the period at the end of paragraph (15) and inserting “, plus”, and by adding at the end the following new paragraph:
“(16) the biodiesel fuels credit determined under section 40A(a).”.
(c) Conforming Amendments.--
(1) Section 39(d) is amended by adding at the end the following new paragraph:
“(11) No carryback of biodiesel fuels credit before effective date.--No portion of the unused business credit for any taxable year which is attributable to the biodiesel fuels credit determined under section 40A may be carried back to a taxable year ending on or before September 30, 2004.”.
(2)(A) Section 87 is amended to read as follows:
“SEC. 87. ALCOHOL AND BIODIESEL FUELS CREDITS.
“Gross income includes--
“(1) the amount of the alcohol fuels credit determined with respect to the taxpayer for the taxable year under section 40(a), and
“(2) the biodiesel fuels credit determined with respect to the taxpayer for the taxable year under section 40A(a).”.
(B) The item relating to section 87 in the table of sections for part II of subchapter B of chapter 1 is amended by striking “fuel credit” and inserting “and biodiesel fuels credits”.
(3) Section 196(c) is amended by striking “and” at the end of paragraph (9), by striking the period at the end of paragraph (10) and inserting “, and”, and by adding at the end the following new paragraph:
“(11) the biodiesel fuels credit determined under section 40A(a).”.
(4) The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding after the item relating to section 40 the following new item:
“Sec. 40A. Biodiesel used as fuel.”.
(d) Effective Date.--The amendments made by this section shall apply to fuel produced, and sold or used, after September 30, 2004, in taxable years ending after such date.
Subtitle C--Fuel Fraud Prevention SEC. 5200. SHORT TITLE.
This subtitle may be cited as the “Fuel Fraud Prevention Act of 2004”.
PART I--AVIATION JET FUEL
SEC. 5211. TAXATION OF AVIATION-GRADE KEROSENE.
(a) Rate of Tax.--
(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:
“(iv) in the case of aviation-grade kerosene, 21.8 cents per gallon.”.
(2) Commercial aviation.--Paragraph (2) of section 4081(a) is amended by adding at the end the following new subparagraph:
“(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.”.
(3) Nontaxable uses.--
(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:
“(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.”.
(B) Conforming amendments.--
(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.”.
(ii) Section 4082(d) is amended by striking paragraph (1) and by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively.
(4) Nonaircraft use of aviation-grade kerosene.--
(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.”.
(B) Conforming amendment.--The heading for paragraph (1) of section 4041(a) is amended by inserting “and kerosene” after “diesel fuel”.
(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:
“(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).”.
(c) Refunds.--
(1) In general.--Paragraph (4) of section 6427(l) is amended to read as follows:
“(4) Refunds for aviation-grade kerosene.--
“(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--
“(i) the Leaking Underground Storage Tank Trust Fund financing rate imposed by such section, and
“(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.
“(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--
“(i) is registered under section 4101, and
“(ii) meets the requirements of subparagraph (A), (B), or (D) of section 6416(a)(1).”.
(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)”.
(3) Conforming amendment.--Subparagraph (B) of section 6427(l)(2) is amended to read as follows:
“(B) in the case of aviation-grade kerosene--
“(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
“(ii) any use in commercial aviation (within the meaning of section 4083(b)).”.
(d) Repeal of Prior Taxation of Aviation Fuel.--
(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.
(2) Conforming amendments.--
(A) Section 4041(c) is amended to read as follows:
“(c) Aviation-Grade Kerosene.--
“(1) In general.--There is hereby imposed a tax upon aviation-grade kerosene--
“(A) sold by any person to an owner, lessee, or other operator of an aircraft for use in such aircraft, or
“(B) used by any person in an aircraft unless there was a taxable sale of such fuel under subparagraph (A).
“(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.
“(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.”.
(B) Section 4041(d)(2) is amended by striking “section 4091” and inserting “section 4081”.
(C) Section 4041 is amended by striking subsection (e).
(D) Section 4041 is amended by striking subsection (i).
(E) Section 4041(m)(1) is amended to read as follows:
“(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 September 30, 2009--
“(i) in the case of fuel none of the alcohol in which consists of ethanol, 9.15 cents per gallon, and
“(ii) in any other case, 11.3 cents per gallon, and
“(B) after September 30, 2009--
“(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.”.
(F) Sections 4101(a), 4103, 4221(a), and 6206 are each amended by striking “, 4081, or 4091” and inserting “or 4081”.
(G) Section 6416(b)(2) is amended by striking “4091 or”.
(H) Section 6416(b)(3) is amended by striking “or 4091” each place it appears.
(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)”.
(J) Section 6427(j)(1) is amended by striking “, 4081, and 4091” and inserting “and 4081”.
(K)(i) Section 6427(l)(1) is amended to read as follows:
“(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).”.
(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)”.
(L) Subparagraph (B) of section 6724(d)(1) is amended by striking clause (xv) and by redesignating the succeeding clauses accordingly.
(M) Paragraph (2) of section 6724(d) is amended by striking subparagraph (W) and by redesignating the succeeding subparagraphs accordingly.
(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:
“(C) section 4081 with respect to aviation gasoline and aviation-grade kerosene, and”.
(O) The last sentence of section 9502(b) is amended to read as follows: “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).”.
(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.
(Q) Section 9508(c)(2)(A) is amended by striking “sections 4081 and 4091” and inserting “section 4081”.
(R) The table of subparts for part III of subchapter A of chapter 32 is amended to read as follows:
“Subpart A. Motor and aviation fuels.
“Subpart B. Special provisions applicable to fuels tax.”.
(S) The heading for subpart A of part III of subchapter A of chapter 32 is amended to read as follows:
“Subpart A--Motor and Aviation Fuels”.
(T) The heading for subpart B of part III of subchapter A of chapter 32 is amended to read as follows:
“Subpart B--Special Provisions Applicable to Fuels Tax”.
(g) Other Amendments.--
(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 keorsene, 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.”.
(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.
(f) Effective Date.--The amendments made by this section shall apply to aviation-grade kerosene removed, entered, or sold after September 30, 2004.
(g) Floor Stocks Tax.--
(1) In general.--There is hereby imposed on aviation-grade kerosene held on October 1, 2004, by any person a tax equal to--
(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
(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.
(2) Liability for tax and method of payment.--
(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.
(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.
(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--
(A) at the Leaking Underground Storage Tank Trust Fund financing rate under such section to the extent of 0.1 cents per gallon, and
(B) at the rate under section 4081(a)(2)(A)(iv) to the extent of the remainder.
(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).
(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.
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.
(a) In General.--Section 9502(d) is amended by adding at the end the following new paragraph:
“(7) Transfers from the trust fund to the highway trust fund to reflect highway use of jet fuel.--
“(A) In general.--The Secretary shall pay from the Airport and Airway Trust Fund into the Highway Trust Fund--
“(i) $395,000,000 in fiscal year 2005,
“(ii) $425,000,000 in fiscal year 2006,
“(iii) $429,000,000 in fiscal year 2007,
“(iv) $432,000,000 in fiscal year 2008, and
“(v) $435,000,000 in fiscal year 2009.
“(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).”.
(b) Conforming Amendments.--
(1) Subsection (a) of section 9503 is amended--
(A) by striking “appropriated or credited” and inserting “paid, appropriated, or credited”, and
(B) by striking “or section 9602(b)” and inserting “, section 9502(d)(7), or section 9602(b)”.
(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)”.
(c) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.
PART II--DYED FUEL
SEC. 5221. DYE INJECTION EQUIPMENT.
(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”.
(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.
(c) Penalty for Tampering With or Failing To Maintain Security Requirements for Mechanical Dye Injection Systems.--
(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:
“SEC. 6715A. TAMPERING WITH OR FAILING TO MAINTAIN SECURITY REQUIREMENTS FOR MECHANICAL DYE INJECTION SYSTEMS.
“(a) Imposition of Penalty--
“(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).
“(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.
“(b) Amount of Penalty.--The amount of the penalty under subsection (a) shall be--
“(1) for each violation described in paragraph (1), the greater of--
“(A) $25,000, or
“(B) $10 for each gallon of fuel involved, and
“(2) for each--
“(A) failure to maintain security standards described in paragraph (2), $1,000, and
“(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.
“(c) Joint and Several Liability.--
“(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.
“(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.”.
(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:
“Sec. 6715A. Tampering with or failing to maintain security requirements for mechanical dye injection systems.”.
(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).
SEC. 5222. ELIMINATION OF ADMINISTRATIVE REVIEW FOR TAXABLE USE OF DYED FUEL.
(a) In General.--Section 6715 is amended by inserting at the end the following new subsection:
“(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--
“(1) fraud or mistake in the chemical analysis, or
“(2) mathematical calculation of the amount of the penalty.”.
(b) Effective Date.--The amendment made by this section shall apply to penalties assessed after the date of the enactment of this Act.
SEC. 5223. PENALTY ON UNTAXED CHEMICALLY ALTERED DYED FUEL MIXTURES.
(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:
“(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,”.
(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,”.
(c) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.
SEC. 5224. TERMINATION OF DYED DIESEL USE BY INTERCITY BUSES.
(a) In General.--Paragraph (3) of section 4082(b) (relating to nontaxable use) is amended to read as follows:
“(3) any use described in section 4041(a)(1)(C)(iii)(II).”.
(b) Ultimate Vendor Refund.--Subsection (b) of section 6427 is amended by adding at the end the following new paragraph:
“(4) Refunds for use of diesel fuel in certain intercity buses.--
“(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--
“(i) is registered under section 4101, and
“(ii) meets the requirements of subparagraph (A), (B), or (D) of section 6416(a)(1).
“(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.”.
(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”.
(b) Effective Date.--The amendments made by this section shall apply to fuel sold after September 30, 2004.
PART III--MODIFICATION OF INSPECTION OF RECORDS PROVISIONS
SEC. 5231. AUTHORITY TO INSPECT ON-SITE RECORDS.
(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:
“(iii) inspecting any books and records and any shipping papers pertaining to such fuel, and”.
(b) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.
SEC. 5232. ASSESSABLE PENALTY FOR REFUSAL OF ENTRY.
(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:
“SEC. 6717. REFUSAL OF ENTRY.
“(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.
“(b) Joint and Several Liability.--
“(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.
“(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.
“(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.”.
(b) Conforming Amendments.--
(1) Section 4083(d)(3), as amended by section 5211 of this Act, is amended--
(A) by striking “entry.--The penalty” and inserting: “entry.--
“(A) Forfeiture.--The penalty”, and
(B) by adding at the end the following new subparagraph:
“(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.”.
(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:
“Sec. 6717. Refusal of entry.”.
(c) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.
PART IV--REGISTRATION AND REPORTING REQUIREMENTS
SEC. 5241. REGISTRATION OF PIPELINE OR VESSEL OPERATORS REQUIRED FOR EXEMPTION OF BULK TRANSFERS TO REGISTERED TERMINALS OR REFINERIES.
(a) In General.--Section 4081(a)(1)(B) (relating to exemption for bulk transfers to registered terminals or refineries) is amended--
(1) by inserting “by pipeline or vessel” after “transferred in bulk”, and
(2) by inserting “, the operator of such pipeline or vessel,” after “the taxable fuel”.
(b) Civil Penalty for Carrying Taxable Fuels by Nonregistered Pipelines or Vessels.--
(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:
“SEC. 6718. CARRYING TAXABLE FUELS BY NONREGISTERED PIPELINES OR VESSELS.
“(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).
“(b) Amount of Penalty.--
“(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--
“(A) $10,000, or
“(B) $1 per gallon.
“(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).
“(c) Joint and Several Liability.--
“(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.
“(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.
“(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.”.
(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:
“Sec. 6718. Carrying taxable fuels by nonregistered pipelines or vessels.”.
(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.
(d) Effective Date.--The amendments made by subsections (a) and (b) shall take effect on October 1, 2004.
SEC. 5242. DISPLAY OF REGISTRATION.
(a) In General.--Subsection (a) of section 4101 (relating to registration) is amended--
(1) by striking “Every” and inserting the following:
“(1) In general.--Every”, and
(2) by adding at the end the following new paragraph:
“(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.”.
(b) Civil Penalty for Failure to Display Registration.--
(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:
“SEC. 6719. FAILURE TO DISPLAY REGISTRATION OF VESSEL.
“(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.
“(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).
“(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.”.
(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:
“Sec. 6719. Failure to display registration of vessel.”.
(c) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.
SEC. 5243. REGISTRATION OF PERSONS WITHIN FOREIGN TRADE ZONES, ETC..
(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:
“(2) Registration of persons within foreign trade zones, etc..--The Secretary shall require registration by any person which--
“(A) operates a terminal or refinery within a foreign trade zone or within a customs bonded storage facility, or
“(B) holds an inventory position with respect to a taxable fuel in such a terminal.”.
(b) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.
SEC. 5244. PENALTIES FOR FAILURE TO REGISTER AND FAILURE TO REPORT.
(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”.
(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”.
(c) Assessable Penalty for Failure to Register.--
(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:
“SEC. 6720. FAILURE TO REGISTER.
“(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).
“(b) Amount of Penalty.--The amount of the penalty under subsection (a) shall be--
“(1) $10,000 for each initial failure to register, and
“(2) $1,000 for each day thereafter such person fails to register.
“(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.”.
(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:
“Sec. 6720. Failure to register.”.
(d) Assessable Penalty for Failure to Report.--
(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:
“SEC. 6725. FAILURE TO REPORT INFORMATION UNDER SECTION 4101.
“(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).
“(b) Failures Subject to Penalty.--For purposes of subsection (a), the failures described in this subsection are--
“(1) any failure to make a report under section 4101(d) on or before the date prescribed therefor, and
“(2) any failure to include all of the information required to be shown on such report or the inclusion of incorrect information.
“(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.”.
(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:
“Sec. 6725. Failure to report information under section 4101.”.
(e) Effective Date.--The amendments made by this section shall apply to failures pending or occurring after September 30, 2004.
SEC. 5245. INFORMATION REPORTING FOR PERSONS CLAIMING CERTAIN TAX BENEFITS.
(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:
“SEC. 4104. INFORMATION REPORTING FOR PERSONS CLAIMING CERTAIN TAX BENEFITS.
“(a) In General.--The Secretary shall require any person claiming tax benefits--
“(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
“(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).
“(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.
“(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.”.
(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:
“Sec. 4104. Information reporting for persons claiming certain tax benefits.”.
(c) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.
PART V--IMPORTS
SEC. 5251. TAX AT POINT OF ENTRY WHERE IMPORTER NOT REGISTERED.
(a) Tax at Point of Entry Where Importer Not Registered.--
(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:
“SEC. 4105. TAX AT ENTRY WHERE IMPORTER NOT REGISTERED.
“(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.
“(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--
“(1) seize the fuel on which the tax is due, or
“(2) detain any vehicle transporting such fuel, until such tax is paid or such bond is filed.
“(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.”.
(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:
“Sec. 4105. Tax at entry where importer not registered.”.
(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.
(c) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.
SEC. 5252. RECONCILIATION OF ON-LOADED CARGO TO ENTERED CARGO.
(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:
“(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.”.
(b) Effective Date.--The amendment made by this section shall take effect on the date of the enactment of this Act.
PART VI--MISCELLANEOUS PROVISIONS
SEC. 5261. TAX ON SALE OF DIESEL FUEL WHETHER SUITABLE FOR USE OR NOT IN A DIESEL-POWERED VEHICLE OR TRAIN.
(a) In General.--Section 4083(a)(3) is amended--
(1) by striking “The term” and inserting the following:
“(A) In general.--The term”, and
(2) by inserting at the end the following new subparagraph:
“(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.”.
(b) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.
SEC. 5262. MODIFICATION OF ULTIMATE VENDOR REFUND CLAIMS WITH RESPECT TO FARMING.
(a) In General.--
(1) Refunds.--Section 6427(l) is amended by adding at the end the following new paragraph:
“(6) Registered vendors permitted to administer certain claims for refund of diesel fuel and kerosene sold to farmers.--
“(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)).
“(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--
“(i) is registered under section 4101, and
“(ii) meets the requirements of subparagraph (A), (B), or (D) of section 6416(a)(1).”.
(2) Filing of claims.--Section 6427(i) is amended by inserting at the end the following new paragraph:
“(5) Special rule for vendor refunds with respect to farmers.--
“(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--
“(i) for which $200 or more ($100 or more in the case of kerosene) is payable under subsection (l)(6),
“(ii) which is not less than 1 week, and
“(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.
“(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.”.
(3) Conforming amendments.--
(A) Section 6427(l)(5)(A) is amended to read as follows:
“(A) In general.--Paragraph (1) shall not apply to diesel fuel or kerosene used by a State or local government.”.
(B) The heading for section 6427(l)(5) is amended by striking “farmers and”.
(b) Section 6427(i)(3) is amended--
(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
(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
(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.
SEC. 5263. TAXABLE FUEL REFUNDS FOR CERTAIN ULTIMATE VENDORS.
(a) In General.--Paragraph (4) of section 6416(a) (relating to abatements, credits, and refunds) is amended to read as follows:
“(4) Registered ultimate vendor to administer credits and refunds of gasoline tax.--
“(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.
“(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).”.
(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.”.
(c) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.
SEC. 5264. TWO-PARTY EXCHANGES.
(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:
“SEC. 4106. TWO-PARTY EXCHANGES.
“(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).
“(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:
“(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.
“(2) The exchange transaction occurs before or contemporaneous with completion of removal across the rack from the terminal by the receiving person.
“(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.
“(4) The transaction is the subject of a written contract.”.
(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:
“Sec. 4106. Two-party exchanges.”.
(c) Effective Date.--The amendment made by this section shall take effect on the date of the enactment of this Act.
SEC. 5265. MODIFICATIONS OF TAX ON USE OF CERTAIN VEHICLES.
(a) No Proration of Tax Unless Vehicle Is Destroyed or Stolen.--
(1) In general.--Section 4481(c) (relating to proration of tax) is amended to read as follows:
“(c) Proration of Tax Where Vehicle Sold, Destroyed, or Stolen.--
“(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.
“(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.”.
(2) Conforming amendments.--
(A) Section 6156 (relating to installment payment of tax on use of highway motor vehicles) is repealed.
(B) The table of sections for subchapter A of chapter 62 is amended by striking the item relating to section 6156.
(b) Display of Tax Certificate.--Paragraph (2) of section 4481(d) (relating to one tax liability for period) is amended to read as follows:
“(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.”.
(c) Electronic filing.--Section 4481, as amended by section 5001 of this Act, is amended by redesignating subsection (e) as subsection (f) and by inserting after subsection (d) the following new subsection:
“(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.”.
(d) Repeal of reduction in tax for certain trucks.--Section 4483 of the Internal Revenue Code of 1986 is amended by striking subsection (f).
(e) Effective Dates.--
(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.
(2) Subsection (b).--The amendment made by subsection (b) shall take effect on October 1, 2005.
SEC. 5266. DEDICATION OF REVENUES FROM CERTAIN PENALTIES TO THE HIGHWAY TRUST FUND.
(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 5001 of this Act, is amended by redesignating paragraph (5) as paragraph (6) and inserting after paragraph (4) the following new paragraph:
“(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).”.
(b) Conforming Amendments.--
(1) The heading of subsection (b) of section 9503 is amended by inserting “and Penalties” after “Taxes”.
(2) The heading of paragraph (1) of section 9503(b) is amended by striking “In general” and inserting “Certain taxes”.
(c) Effective Date.--The amendments made by this section shall apply to penalties assessed after October 1, 2004.
SEC. 5267. NONAPPLICATION OF EXPORT EXEMPTION TO DELIVERY OF FUEL TO MOTOR VEHICLES REMOVED FROM UNITED STATES.
(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.”.
(b) Conforming Amendments.--
(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.”.
(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”.
(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.
PART VII--TOTAL ACCOUNTABILITY
SEC. 5271. TOTAL ACCOUNTABILITY.
(a) Taxation of Reportable Liquids.--
(1) In general.--Section 4081(a), as amended by this Act, is amended--
(A) by inserting “or reportable liquid” after “taxable fuel” each place it appears, and
(B) by inserting “such liquid” after “such fuel” in paragraph (1)(A)(iv).
(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:
“(v) in the case of reportable liquids, the rate determined under section 4083(c)(2).”.
(3) Exemption.--Section 4081(a)(1) is amended by adding at the end the following new subparagraph:
“(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--
“(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
“(ii) the sale is to the ultimate purchaser of such liquid.”.
(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:
“(c) Reportable liquid.--For purposes of this subpart--
“(1) In general.--The term ‘reportable liquid' means any petroleum-based liquid other than a taxable fuel.
“(2) Taxation.--
“(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).
“(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).”.
(5) Conforming amendments.--
(A) Section 4081(e) is amended by inserting “or reportable liquid” after “taxable fuel”.
(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”.
(C) Section 4083(e)(1) (relating to administrative authority), as redesignated by paragraph (4), is amended--
(i) in subparagraph (A)--
(I) by inserting “or reportable liquid” after “taxable fuel”, and
(II) by inserting “or such liquid” after “such fuel” each place it appears, and
(ii) in subparagraph (B), by inserting “or any reportable liquid” after “any taxable fuel”.
(D) Section 4101(a)(2), as added by section 5243 of this Act, is amended by inserting “or a reportable liquid” after “taxable fuel”.
(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.
(F) Section 4102 is amended by inserting “or any reportable liquid” before the period at the end.
(G)(i) Section 6718, as added by section 5241 of this Act, is amended--
(I) in subsection (a), by inserting “or any reportable liquid (as defined in section 4083(c)(1))” after “ section 4083(a)(1))”, and
(II) in the heading, by inserting “or reportable liquids” after “taxable fuel”.
(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”.
(H) Section 6427(h) is amended to read as follows:
“(h) Gasoline Blend Stocks or Additives and Reportable Liquids.--Except as provided in subsection (k)--
“(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
“(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.”.
(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)”.
(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)”.
(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:
“(4) which is removed, entered, or sold by a person registered under section 4101.”.
(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.
SEC. 5272. EXCISE TAX REPORTING.
(a) In General.--Part II of subchapter A of chapter 61 is amended by adding at the end the following new subpart:
“Subpart E--Excise Tax Reporting “SEC. 6025. RETURNS RELATING TO FUEL TAXES.
“(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.
“(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.”.
(b) Conforming Amendment.--The table of parts for subchapter A of chapter 61 is amended by adding at the end the following new item:
“Subpart E--Excise Tax Reporting”.
(c) Effective Date.--The amendments made by this section shall apply to fuel sold or used after September 30, 2004.
SEC. 5273. INFORMATION REPORTING.
(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.”.
(b) Effective Date.--The amendment made by this section shall apply on October 1, 2004.
Subtitle D--Definition of Highway Vehicle SEC. 5301. EXEMPTION FROM CERTAIN EXCISE TAXES FOR MOBILE MACHINERY.
(a) Exemption From Tax on Heavy Trucks and Trailers Sold at Retail.--
(1) In general.--Section 4053 (relating to exemptions) is amended by adding at the end the following new paragraph:
“(8) Mobile machinery.--Any vehicle which consists of a chassis--
“(A) to which there has been permanently mounted (by welding, bolting, riveting, or other means) machinery or equipment to perform a construction, manufacturing, processing, farming, mining, drilling, timbering, or similar operation if the operation of the machinery or equipment is unrelated to transportation on or off the public highways,
“(B) which has been specially designed to serve only as a mobile carriage and mount (and a power source, where applicable) for the particular machinery or equipment involved, whether or not such machinery or equipment is in operation, and
“(C) which, by reason of such special design, could not, without substantial structural modification, be used as a component of a vehicle designed to perform a function of transporting any load other than that particular machinery or equipment or similar machinery or equipment requiring such a specially designed chassis.”.
(2) Effective date.--The amendment made by this subsection shall take effect on the day after the date of the enactment of this Act.
(b) Exemption From Tax on Use of Certain Vehicles.--
(1) In general.--Section 4483 (relating to exemptions) is amended by redesignating subsection (g) as subsection (h) and by inserting after subsection (f) the following new subsection:
“(g) Exemption for Mobile Machinery.--No tax shall be imposed by section 4481 on the use of any vehicle described in section 4053(8).”.
(2) Effective date.--The amendments made by this subsection shall take effect on the day after the date of the enactment of this Act.
(d) Exemption From Fuel Taxes.--
(1) In general.--Section 6421(e)(2) (defining off-highway business use) is amended by adding at the end the following new subparagraph:
“(C) Uses in mobile machinery.--
“(i) In general.--The term ‘off-highway business use' shall include any use in a vehicle which meets the requirements described in clause (ii).
“(ii) Requirements for mobile machinery.--The requirements described in this clause are--
“(I) the design-based test, and
“(II) the use-based test.
“(iii) Design-based test.--For purposes of clause (ii)(I), the design-based test is met if the vehicle consists of a chassis--
“(I) to which there has been permanently mounted (by welding, bolting, riveting, or other means) machinery or equipment to perform a construction, manufacturing, processing, farming, mining, drilling, timbering, or similar operation if the operation of the machinery or equipment is unrelated to transportation on or off the public highways,
“(II) which has been specially designed to serve only as a mobile carriage and mount (and a power source, where applicable) for the particular machinery or equipment involved, whether or not such machinery or equipment is in operation, and
“(III) which, by reason of such special design, could not, without substantial structural modification, be used as a component of a vehicle designed to perform a function of transporting any load other than that particular machinery or equipment or similar machinery or equipment requiring such a specially designed chassis.
“(iv) Use-based test.--For purposes of clause (ii)(II), the use-based test is met if the use of the vehicle on public highways was less than 5,000 miles during the taxpayer's taxable year.
“(v) Special rule for use by certain tax-exempt organizations.--In the case of any use in a vehicle by an organization which is described in section 501(c) and exempt from tax under section 501(a), clause (ii) shall be applied without regard to subclause (II) thereof.”.
(2) Annual refund of tax paid.--Section 6427(i)(2) (relating to exceptions) is amended by adding at the end the following new subparagraph:
“(C) Nonapplication of paragraph.--This paragraph shall not apply to any fuel used in any off-highway business use described in section 6421(e)(2)(C).”.
(3) Effective date.--The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act.
SEC. 5302. MODIFICATION OF DEFINITION OF OFF-HIGHWAY VEHICLE.
(a) In General.--Section 7701(a) (relating to definitions) is amended by adding at the end the following new paragraph:
“(48) Off-highway vehicles.--
“(A) Off-highway transportation vehicles.--
“(i) In general.--A vehicle shall not be treated as a highway vehicle if such vehicle is specially designed for the primary function of transporting a particular type of load other than over the public highway and because of this special design such vehicle's capability to transport a load over the public highway is substantially limited or impaired.
“(ii) Determination of vehicle's design.--For purposes of clause (i), a vehicle's design is determined solely on the basis of its physical characteristics.
“(iii) Determination of substantial limitation or impairment.--For purposes of clause (i), in determining whether substantial limitation or impairment exists, account may be taken of factors such as the size of the vehicle, whether such vehicle is subject to the licensing, safety, and other requirements applicable to highway vehicles, and whether such vehicle can transport a load at a sustained speed of at least 25 miles per hour. It is immaterial that a vehicle can transport a greater load off the public highway than such vehicle is permitted to transport over the public highway.
“(B) Nontransportation trailers and semitrailers.--A trailer or semitrailer shall not be treated as a highway vehicle if it is specially designed to function only as an enclosed stationary shelter for the carrying on of an off-highway function at an off-highway site.”.
(c) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the amendment made by this section shall take effect on the date of the enactment of this Act.
(2) Fuel taxes.--With respect to taxes imposed under subchapter B of chapter 31 and part III of subchapter A of chapter 32, the amendment made by this section shall apply to taxable periods beginning after the date of the enactment of this Act.
Subtitle E--Excise Tax Reform and Simplification
PART I--HIGHWAY EXCISE TAXES
SEC. 5401. DEDICATION OF GAS GUZZLER TAX TO HIGHWAY TRUST FUND.
(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:
“(C) section 4064 (relating to gas guzzler tax),”.
(b) Uniform Application of Tax.--Subparagraph (A) of section 4064(b)(1) (defining automobile) is amended by striking the second sentence.
(c) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.
SEC. 5402. REPEAL CERTAIN EXCISE TAXES ON RAIL DIESEL FUEL AND INLAND WATERWAY BARGE FUELS.
(a) Taxes on Trains.--
(1) In general.--Subparagraph (A) of section 4041(a)(1) is amended by striking “or a diesel-powered train” each place it appears and by striking “or train”.
(2) Conforming amendments.--
(A) Subparagraph (C) of section 4041(a)(1), as amended by section 5001 of this Act, is amended by striking clause (ii) and by redesignating clause (iii) as clause (ii).
(B) Subparagraph (C) of section 4041(b)(1) is amended by striking all that follows “section 6421(e)(2)” and inserting a period.
(C) Subsection (d) of section 4041 is amended by redesignating paragraph (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph:
“(3) Diesel fuel used in trains.--There is hereby imposed a tax of 0.1 cent per gallon on any liquid other than gasoline (as defined in section 4083)--
“(A) sold by any person to an owner, lessee, or other operator of a diesel-powered train for use as a fuel in such train, or
“(B) used by any person as a fuel in a diesel-powered train unless there was a taxable sale of such fuel under subparagraph (A). No tax shall be imposed by this paragraph on the sale or use of any liquid if tax was imposed on such liquid under section 4081.”.
(D) Subsection (f) of section 4082 is amended by striking “section 4041(a)(1)” and inserting “subsections (d)(3) and (a)(1) of section 4041, respectively”.
(E) Subparagraphs (A) and (B) of section 4083(a)(3), as amended by section 5261 of this Act, are amended by striking “or a diesel-powered train”.
(F) Paragraph (3) of section 6421(f) is amended to read as follows:
“(3) Gasoline used in trains.--In the case of gasoline used as a fuel in a train, this section shall not apply with respect to the Leaking Underground Storage Tank Trust Fund financing rate under section 4081.”.
(G) Paragraph (3) of section 6427(l) is amended to read as follows:
“(3) Refund of certain taxes on fuel used in diesel-powered trains.--For purposes of this subsection, the term ‘nontaxable use' includes fuel used in a diesel-powered train. The preceding sentence shall not apply to the tax imposed by section 4041(d) and the Leaking Underground Storage Tank Trust Fund financing rate under section 4081 except with respect to fuel sold for exclusive use by a State or any political subdivision thereof.”.
(b) Fuel Used on Inland Waterways.--
(1) In general.--Paragraph (1) of section 4042(b) is amended by adding “and” at the end of subparagraph (A), by striking “, and” at the end of subparagraph (B) and inserting a period, and by striking subparagraph (C).
(2) Conforming amendment.--Paragraph (2) of section 4042(b) is amended by striking subparagraph (C).
(c) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.
PART II--AQUATIC EXCISE TAXES
SEC. 5411. ELIMINATION OF AQUATIC RESOURCES TRUST FUND AND TRANSFORMATION OF SPORT FISH RESTORATION ACCOUNT.
(a) Simplification of Funding for Boat Safety Account.--
(1) In general.--Section 9503(c)(3) (relating to transfers from Trust Fund for motorboat fuel taxes), as redesignated by section 5002 of this Act, is amended--
(A) by striking “Fund--” and all that follows through “shall be transferred” in subparagraph (B) and inserting “Fund which is attributable to motorboat fuel taxes shall be transferred”, and
(B) by striking subparagraph (A), and
(C) by redesignating subparagraphs (B) through (E) as subparagraphs (A) through (D), respectively.
(2) Conforming amendments.--
(A) Section 9503(b)(4) is amended by striking subparagraph (D).
(B) Subparagraph (B) of section 9503(c)(3), as redesignated by section 5002 of this Act and subsection (a)(3), is amended--
(i) by striking “account” in the heading and inserting “trust fund”,
(ii) by striking “or (B)” in clause (ii), and
(iii) by striking “Account in the Aquatic Resources”.
(C) Subparagraph (C) of section 9503(c)(3), as redesignated by section 5002 of this Act and subsection (a)(3), is amended by striking “, but only to the extent such taxes are deposited into the Highway Trust Fund”.
(D) Paragraph (4) of section 9503(c), as redesignated by section 5002 of this Act, is amended--
(i) by striking “Account in the Aquatic Resources” in subparagraph (A), and
(ii) by striking “, but only to the extent such taxes are deposited into the Highway Trust Fund” in subparagraph (B).
(b) Merging of Accounts.--
(1) In general.--Subsection (a) of section 9504 is amended to read as follows:
“(a) Creation of Trust Fund.--There is hereby established in the Treasury of the United States a trust fund to be known as the ‘Sport Fish Restoration Trust Fund'. Such Trust Fund shall consist of such amounts as may be appropriated, credited, or paid to it as provided in this section, section 9503(c)(3), section 9503(c)(4), or section 9602(b).”.
(2) Conforming amendments.--
(A) Subsection (b) of section 9504 is amended--
(i) by striking “Account” in the heading and inserting “Trust Fund”,
(ii) by striking “Account” both places it appears in paragraphs (1) and (2) and inserting “Trust Fund”, and
(iii) by striking “account” both places it appears in the headings for paragraphs (1) and (2) and inserting “trust fund”.
(B) Subsection (d) of section 9504, as amended by section 5001 of this Act, is amended--
(i) by striking “Aquatic Resources” in the heading,
(ii) by striking “any Account in the Aquatic Resources” in paragraph (1) and inserting “the Sports Fish Restoration”, and
(iii) by striking “any such Account” in paragraph (1) and inserting “such Trust Fund”.
(C) Subsection (e) of section 9504, as amended by section 5002 of this Act, is amended by striking “Boat Safety Account and Sport Fish Restoration Account” and inserting “Sport Fish Restoration Trust Fund”.
(D) Section 9504 is amended by striking “AQUATIC RESOURCES” in the heading and inserting “SPORT FISH RESTORATION”.
(E) The item relating to section 9504 in the table of sections for subchapter A of chapter 98 is amended by striking “aquatic resources” and inserting “sport fish restoration”.
(c) Phaseout of Boat Safety Account.--Subsection (c) of section 9504 is amended to read as follows:
“(c) Expenditures From Boat Safety Account.--Amounts remaining in the Boat Safety Account on October 1, 2004, and amounts thereafter credited to the Account under section 9602(b), shall be available, as provided by appropriation Acts, for making expenditures before 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 Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2004).”.
(d) Effective Date.--The amendments made by this section shall take effect on October 1, 2004.
SEC. 5412. EXEMPTION OF LED DEVICES FROM SONAR DEVICES SUITABLE FOR FINDING FISH.
(a) In General.--Section 4162(b) (defining sonar device suitable for finding fish) is amended by striking “or” at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting “, or”, and by adding at the end the following new paragraph:
“(5) an LED display.”.
(b) Effective Date.--The amendments made by this section shall apply to articles sold by the manufacturer, producer, or importer after September 30, 2004.
SEC. 5413. REPEAL OF HARBOR MAINTENANCE TAX ON EXPORTS.
(a) In General.--Subsection (d) of section 4462 (relating to definitions and special rules) is amended to read as follows:
“(d) Nonapplicability of Tax to Exports.--The tax imposed by section 4461(a) shall not apply to any port use with respect to any commercial cargo to be exported from the United States.”.
(b) Conforming Amendments.--
(1) Section 4461(c)(1) is amended by adding “or” at the end of subparagraph (A), by striking subparagraph (B), and by redesignating subparagraph (C) as subparagraph (B).
(2) Section 4461(c)(2) is amended by striking “imposed--” and all that follows through “in any other case,” and inserting “imposed”.
(c) Effective Date.--The amendments made by this section shall take effect before, on, and after the date of the enactment of this Act.
SEC. 5414. CAP ON EXCISE TAX ON CERTAIN FISHING EQUIPMENT.
(a) In General.--Paragraph (1) of section 4161(a) (relating to sport fishing equipment) is amended to read as follows:
“(1) Imposition of tax.--
“(A) In general.--There is hereby imposed on the sale of any article of sport fishing equipment by the manufacturer, producer, or importer a tax equal to 10 percent of the price for which so sold.
“(B) Limitation on tax imposed on fishing rods and poles.--The tax imposed by subparagraph (A) on any fishing rod or pole shall not exceed $10.”.
(b) Conforming Amendments.--Section 4161(a)(2) is amended by striking “paragraph (1)” both places it appears and inserting “paragraph (1)(A)”.
(c) Effective Date.--The amendments made by this section shall apply to articles sold by the manufacturer, producer, or importer after September 30, 2004.
SEC. 5415. REDUCTION IN RATE OF TAX ON PORTABLE AERATED BAIT CONTAINERS.
(a) In General.--Section 4161(a)(2)(A) (relating to 3 percent rate of tax for electric outboard motors and sonar devices suitable for finding fish) is amended by inserting “or a portable aerated bait container” after “fish”.
(b) Conforming Amendment.--The heading of section 4161(a)(2) is amended by striking “electric outboard motors and sonar devices suitable for finding fish” and inserting “certain sport fishing equipment”.
(c) Effective Date.--The amendments made by this section shall apply to articles sold by the manufacturer, producer, or importer after September 30, 2004.
PART III--AERIAL EXCISE TAXES
SEC. 5421. CLARIFICATION OF EXCISE TAX EXEMPTIONS FOR AGRICULTURAL AERIAL APPLICATORS AND EXEMPTION FOR FIXED-WING AIRCRAFT ENGAGED IN FORESTRY OPERATIONS.
(a) No Waiver by Farm Owner, Tenant, or Operator Necessary.--Subparagraph (B) of section 6420(c)(4) (relating to certain farming use other than by owner, etc.) is amended to read as follows:
“(B) if the person so using the gasoline is an aerial or other applicator of fertilizers or other substances and is the ultimate purchaser of the gasoline, then subparagraph (A) of this paragraph shall not apply and the aerial or other applicator shall be treated as having used such gasoline on a farm for farming purposes.”.
(b) Exemption Includes Fuel Used Between Airfield and Farm.--Section 6420(c)(4), as amended by subsection (a), is amended by adding at the end the following new flush sentence: “For purposes of this paragraph, in the case of an aerial applicator, gasoline shall be treated as used on a farm for farming purposes if the gasoline is used for the direct flight between the airfield and 1 or more farms.”.
(c) Exemption from Tax on Air Transportation of Persons for Forestry Purposes Extended to Fixed-Wing Aircraft.--Subsection (f) of section 4261 (relating to tax on air transportation of persons) is amended to read as follows:
“(f) Exemption for Certain Uses.--No tax shall be imposed under subsection (a) or (b) on air transportation--
“(1) by helicopter for the purpose of transporting individuals, equipment, or supplies in the exploration for, or the development or removal of, hard minerals, oil, or gas, or
“(2) by helicopter or by fixed-wing aircraft for the purpose of the planting, cultivation, cutting, or transportation of, or caring for, trees (including logging operations), but only if the helicopter or fixed-wing aircraft does not take off from, or land at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise use services provided pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code, during such use. In the case of helicopter transportation described in paragraph (1), this subsection shall be applied by treating each flight segment as a distinct flight.”.
(d) Effective Date.--The amendments made by this section shall apply to fuel use or air transportation after the date of the enactment of this Act.
SEC. 5422. MODIFICATION OF RURAL AIRPORT DEFINITION.
(a) In General.--Section 4261(e)(1)(B) (defining rural airport) is amended--
(1) by inserting “(in the case of any airport described in clause (ii)(III), on flight segments of at least 100 miles)” after “by air” in clause (i), and
(2) by striking the period at the end of subclause (II) of clause (ii) and inserting “, or”, and by adding at the end of clause (ii) the following new subclause:
“(III) is not connected by paved roads to another airport.”.
(b) Effective Date.--The amendments made by this section shall take effect on April 1, 2004.
SEC. 5423. EXEMPTION FROM TICKET TAXES FOR TRANSPORTATION PROVIDED BY SEAPLANES.
(a) In General.--Section 4261 (relating to imposition of tax) is amended by redesignating subsection (i) as subsection (j) and by inserting after subsection (h) the following new subsection:
“(i) Exemption for Seaplanes.--No tax shall be imposed by this section or section 4271 on any air transportation by a seaplane with respect to any segment consisting of a takeoff from, and a landing on, water, but only if the places at which such takeoff and landing occur have not received and are not receiving financial assistance from the Airport and Airways Trust Fund.”.
(b) Effective Date.--The amendments made by this section shall apply to transportation beginning after March 31, 2004.
SEC. 5424. CERTAIN SIGHTSEEING FLIGHTS EXEMPT FROM TAXES ON AIR TRANSPORTATION.
(a) In General.--Section 4281 (relating to small aircraft on nonestablished lines) is amended by adding at the end the following new sentence: “For purposes of this section, an aircraft shall not be considered as operated on an established line if such aircraft is operated on a flight the sole purpose of which is sightseeing.”.
(b) Effective Date.--The amendment made by this section shall apply with respect to transportation beginning on or after the date of the enactment of this Act, but shall not apply to any amount paid before such date for such transportation.
PART IV--ALCOHOLIC BEVERAGE EXCISE TAXES
SEC. 5431. REPEAL OF SPECIAL OCCUPATIONAL TAXES ON PRODUCERS AND MARKETERS OF ALCOHOLIC BEVERAGES.
(a) Repeal of Occupational Taxes.--
(1) In general.--The following provisions of part II of subchapter A of chapter 51 (relating to occupational taxes) are hereby repealed:
(A) Subpart A (relating to proprietors of distilled spirits plants, bonded wine cellars, etc.).
(B) Subpart B (relating to brewer).
(C) Subpart D (relating to wholesale dealers) (other than sections 5114 and 5116).
(D) Subpart E (relating to retail dealers) (other than section 5124).
(E) Subpart G (relating to general provisions) (other than sections 5142, 5143, 5145, and 5146).
(2) Nonbeverage domestic drawback.--Section 5131 is amended by striking “, on payment of a special tax per annum,”.
(3) Industrial use of distilled spirits.--Section 5276 is hereby repealed.
(b) Conforming Amendments.--
(1)(A) The heading for part II of subchapter A of chapter 51 and the table of subparts for such part are amended to read as follows:
“PART II--MISCELLANEOUS PROVISIONS
“Subpart A. Manufacturers of stills.
“Subpart B. Nonbeverage domestic drawback claimants.
“Subpart C. Recordkeeping by dealers.
“Subpart D. Other provisions.”.
(B) The table of parts for such subchapter A is amended by striking the item relating to part II and inserting the following new item:
“Part II. Miscellaneous provisions.”.
(2) Subpart C of part II of such subchapter (relating to manufacturers of stills) is redesignated as subpart A.
(3)(A) Subpart F of such part II (relating to nonbeverage domestic drawback claimants) is redesignated as subpart B and sections 5131 through 5134 are redesignated as sections 5111 through 5114, respectively.
(B) The table of sections for such subpart B, as so redesignated, is amended--
(i) by redesignating the items relating to sections 5131 through 5134 as relating to sections 5111 through 5114, respectively, and
(ii) by striking “and rate of tax” in the item relating to section 5111, as so redesignated.
(C) Section 5111, as redesignated by subparagraph (A), is amended--
(i) by striking “and rate of tax” in the section heading,
(ii) by striking the subsection heading for subsection (a), and
(iii) by striking subsection (b).
(4) Part II of subchapter A of chapter 51 is amended by adding after subpart B, as redesignated by paragraph (3), the following new subpart:
“Subpart C--Recordkeeping by Dealers
“Sec. 5121. Recordkeeping by wholesale dealers.
“Sec. 5122. Recordkeeping by retail dealers.
“Sec. 5123. Preservation and inspection of records, and entry of premises for inspection.”.
(5)(A) Section 5114 (relating to records) is moved to subpart C of such part II and inserted after the table of sections for such subpart.
(B) Section 5114 is amended--
(i) by striking the section heading and inserting the following new heading:
“SEC. 5121. RECORDKEEPING BY WHOLESALE DEALERS.”,
and
(ii) by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection:
“(c) Wholesale Dealers.--For purposes of this part--
“(1) Wholesale dealer in liquors.--The term ‘wholesale dealer in liquors' means any dealer (other than a wholesale dealer in beer) who sells, or offers for sale, distilled spirits, wines, or beer, to another dealer.
“(2) Wholesale dealer in beer.--The term ‘wholesale dealer in beer' means any dealer who sells, or offers for sale, beer, but not distilled spirits or wines, to another dealer.
“(3) Dealer.--The term ‘dealer' means any person who sells, or offers for sale, any distilled spirits, wines, or beer.
“(4) Presumption in case of sale of 20 wine gallons or more.--The sale, or offer for sale, of distilled spirits, wines, or beer, in quantities of 20 wine gallons or more to the same person at the same time, shall be presumptive evidence that the person making such sale, or offer for sale, is engaged in or carrying on the business of a wholesale dealer in liquors or a wholesale dealer in beer, as the case may be. Such presumption may be overcome by evidence satisfactorily showing that such sale, or offer for sale, was made to a person other than a dealer.”.
(C) Paragraph (3) of section 5121(d), as so redesignated, is amended by striking “section 5146” and inserting “section 5123”.
(6)(A) Section 5124 (relating to records) is moved to subpart C of part II of subchapter A of chapter 51 and inserted after section 5121.
(B) Section 5124 is amended--
(i) by striking the section heading and inserting the following new heading:
“SEC. 5122. RECORDKEEPING BY RETAIL DEALERS.”,
(ii) by striking “section 5146” in subsection (c) and inserting “section 5123”, and
(iii) by redesignating subsection (c) as subsection (d) and inserting after subsection (b) the following new subsection:
“(c) Retail Dealers.--For purposes of this section--
“(1) Retail dealer in liquors.--The term ‘retail dealer in liquors' means any dealer (other than a retail dealer in beer or a limited retail dealer) who sells, or offers for sale, distilled spirits, wines, or beer, to any person other than a dealer.
“(2) Retail dealer in beer.--The term ‘retail dealer in beer' means any dealer (other than a limited retail dealer) who sells, or offers for sale, beer, but not distilled spirits or wines, to any person other than a dealer.
“(3) Limited retail dealer.--The term ‘limited retail dealer' means any fraternal, civic, church, labor, charitable, benevolent, or ex-servicemen's organization making sales of distilled spirits, wine or beer on the occasion of any kind of entertainment, dance, picnic, bazaar, or festival held by it, or any person making sales of distilled spirits, wine or beer to the members, guests, or patrons of bona fide fairs, reunions, picnics, carnivals, or other similar outings, if such organization or person is not otherwise engaged in business as a dealer.
“(4) Dealer.--The term ‘dealer' has the meaning given such term by section 5121(c)(3).”.
(7) Section 5146 is moved to subpart C of part II of subchapter A of chapter 51, inserted after section 5122, and redesignated as section 5123.
(8) Part II of subchapter A of chapter 51 is amended by inserting after subpart C the following new subpart:
“Subpart D--Other Provisions
“Sec. 5131. Packaging distilled spirits for industrial uses.
“Sec. 5132. Prohibited purchases by dealers.”.
(9) Section 5116 is moved to subpart D of part II of subchapter A of chapter 51, inserted after the table of sections, redesignated as section 5131, and amended by inserting “(as defined in section 5121(c))” after “dealer” in subsection (a).
(10) Subpart D of part II of subchapter A of chapter 51 is amended by adding at the end thereof the following new section:
“SEC. 5132. PROHIBITED PURCHASES BY DEALERS.
“(a) In General.--Except as provided in regulations prescribed by the Secretary, it shall be unlawful for a dealer to purchase distilled spirits for resale from any person other than a wholesale dealer in liquors who is required to keep the records prescribed by section 5121.
“(b) Limited Retail Dealers.--A limited retail dealer may lawfully purchase distilled spirits for resale from a retail dealer in liquors.
“(c) Penalty and Forfeiture.--
“For penalty and forfeiture provisions applicable to violations of
subsection (a), see sections 5687 and 7302.”.
(11) Subsection (b) of section 5002 is amended--
(A) by striking “section 5112(a)” and inserting “section 5121(c)(3)”,
(B) by striking “section 5112” and inserting “section 5121(c)”,
(C) by striking “section 5122” and inserting “section 5122(c)”.
(12) Subparagraph (A) of section 5010(c)(2) is amended by striking “section 5134” and inserting “section 5114”.
(13) Subsection (d) of section 5052 is amended to read as follows:
“(d) Brewer.--For purposes of this chapter, the term ‘brewer' means any person who brews beer or produces beer for sale. Such term shall not include any person who produces only beer exempt from tax under section 5053(e).”.
(14) The text of section 5182 is amended to read as follows:
“For provisions requiring recordkeeping by wholesale liquor dealers, see section 5121, and by retail liquor dealers, see section 5122.”.
(15) Subsection (b) of section 5402 is amended by striking “section 5092” and inserting “section 5052(d)”.
(16) Section 5671 is amended by striking “or 5091”.
(17)(A) Part V of subchapter J of chapter 51 is hereby repealed.
(B) The table of parts for such subchapter J is amended by striking the item relating to part V.
(18)(A) Sections 5142, 5143, and 5145 are moved to subchapter D of chapter 52, inserted after section 5731, redesignated as sections 5732, 5733, and 5734, respectively, and amended by striking “this part” each place it appears and inserting “this subchapter”.
(B) Section 5732, as redesignated by subparagraph (A), is amended by striking “(except the tax imposed by section 5131)” each place it appears.
(C) Paragraph (2) of section 5733(c), as redesignated by subparagraph (A), is amended by striking “liquors” both places it appears and inserting “tobacco products and cigarette papers and tubes”.
(D) The table of sections for subchapter D of chapter 52 is amended by adding at the end thereof the following:
“Sec. 5732. Payment of tax.
“Sec. 5733. Provisions relating to liability for occupational taxes.
“Sec. 5734. Application of State laws.”.
(E) Section 5731 is amended by striking subsection (c) and by redesignating subsection (d) as subsection (c).
(19) Subsection (c) of section 6071 is amended by striking “section 5142” and inserting “section 5732”.
(20) Paragraph (1) of section 7652(g) is amended--
(A) by striking “subpart F” and inserting “subpart B”, and
(B) by striking “section 5131(a)” and inserting “section 5111”.
(c) Effective Date.--The amendments made by this section shall take effect on July 1, 2004, but shall not apply to taxes imposed for periods before such date.
SEC. 5432. SUSPENSION OF LIMITATION ON RATE OF RUM EXCISE TAX COVER OVER TO PUERTO RICO AND VIRGIN ISLANDS.
(a) In General.--Section 7652(f)(1) (relating to limitation on cover over of tax on distilled spirits) is amended by striking “January 1, 2004” and inserting “October 1, 2004, and $13.50 in the case of distilled spirits brought into the United States after September 30, 2004, and before January 1, 2006”.
(b) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall apply to articles containing distilled spirits brought into the United States after December 31, 2003.
(2) Special rule.--
(A) In general.--After September 30, 2004, the treasury of Puerto Rico shall make a Conservation Trust Fund transfer within 30 days from the date of each cover over payment to such treasury under section 7652(e) of the Internal Revenue Code of 1986.
(B) Conservation trust fund transfer.--
(i) In general.--For purposes of this paragraph, the term “Conservation Trust Fund transfer” means a transfer to the Puerto Rico Conservation Trust Fund of an amount equal to 50 cents per proof gallon of the taxes imposed under section 5001 or section 7652 of such Code on distilled spirits that are covered over to the treasury of Puerto Rico under section 7652(e) of such Code.
(ii) Treatment of transfer.--Each Conservation Trust Fund transfer shall be treated as principal for an endowment, the income from which to be available for use by the Puerto Rico Conservation Trust Fund for the purposes for which the Trust Fund was established.
(iii) Result of nontransfer.--
(I) In general.--Upon notification by the Secretary of the Interior that a Conservation Trust Fund transfer has not been made by the treasury of Puerto Rico, the Secretary of the Treasury shall, except as provided in subclause (II), deduct and withhold from the next cover over payment to be made to the treasury of Puerto Rico under section 7652(e) of such Code an amount equal to the appropriate Conservation Trust Fund transfer and interest thereon at the underpayment rate established under section 6621 of such Code as of the due date of such transfer. The Secretary of the Treasury shall transfer such amount deducted and withheld, and the interest thereon, directly to the Puerto Rico Conservation Trust Fund.
(II) Good cause exception.--If the Secretary of the Interior finds, after consultation with the Governor of Puerto Rico, that the failure by the treasury of Puerto Rico to make a required transfer was for good cause, and notifies the Secretary of the Treasury of the finding of such good cause before the due date of the next cover over payment following the notification of nontransfer, then the Secretary of the Treasury shall not deduct the amount of such nontransfer from any cover over payment.
(C) Puerto rico conservation trust fund.--For purposes of this paragraph, the term “Puerto Rico Conservation Trust Fund” means the fund established pursuant to a Memorandum of Understanding between the United States Department of the Interior and the Commonwealth of Puerto Rico, dated December 24, 1968.
PART V--SPORT EXCISE TAXES
SEC. 5441. CUSTOM GUNSMITHS.
(a) Small Manufacturers Exempt From Firearms Excise Tax.--Section 4182 (relating to exemptions) is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection:
“(c) Small Manufacturers, Etc.--
“(1) In general.--The tax imposed by section 4181 shall not apply to any article described in such section if manufactured, produced, or imported by a person who manufactures, produces, and imports less than 50 of such articles during the calendar year.
“(2) Controlled groups.--All persons treated as a single employer for purposes of subsection (a) or (b) of section 52 shall be treated as one person for purposes of paragraph (1).”.
(b) Effective Date.--
(1) In general.--The amendments made by this section shall apply to articles sold by the manufacturer, producer, or importer on or after the date which is the first day of the month beginning at least 2 weeks after the date of the enactment of this Act.
(2) No inference.--Nothing in the amendments made by this section shall be construed to create any inference with respect to the proper tax treatment of any sales before the effective date of such amendments.
SEC. 5442. MODIFIED TAXATION OF IMPORTED ARCHERY PRODUCTS.
(a) Bows.--Paragraph (1) of section 4161(b) (relating to bows) is amended to read as follows:
“(1) Bows.--
“(A) In general.--There is hereby imposed on the sale by the manufacturer, producer, or importer of any bow which has a peak draw weight of 30 pounds or more, a tax equal to 11 percent of the price for which so sold.
“(B) Archery equipment.--There is hereby imposed on the sale by the manufacturer, producer, or importer--
“(i) of any part or accessory suitable for inclusion in or attachment to a bow described in subparagraph (A), and
“(ii) of any quiver or broadhead suitable for use with an arrow described in paragraph (2), a tax equal to 11 percent of the price for which so sold.”.
(b) Arrows.--Subsection (b) of section 4161 (relating to bows and arrows, etc.) is amended by redesignating paragraph (3) as paragraph (4) and inserting after paragraph (2) the following:
“(3) Arrows.--
“(A) In general.--There is hereby imposed on the sale by the manufacturer, producer, or importer of any arrow, a tax equal to 12 percent of the price for which so sold.
“(B) Exception.--In the case of any arrow of which the shaft or any other component has been previously taxed under paragraph (1) or (2)--
“(i) section 6416(b)(3) shall not apply, and
“(ii) the tax imposed by subparagraph (A) shall be an amount equal to the excess (if any) of--
“(I) the amount of tax imposed by this paragraph (determined without regard to this subparagraph), over
“(II) the amount of tax paid with respect to the tax imposed under paragraph (1) or (2) on such shaft or component.
“(C) Arrow.--For purposes of this paragraph, the term ‘arrow' means any shaft described in paragraph (2) to which additional components are attached.”.
(c) Conforming Amendments.--Section 4161(b)(2) is amended--
(1) by inserting “(other than broadheads)” after “point”, and
(2) by striking “Arrows.--” in the heading and inserting “Arrow components.--”.
(d) Effective Date.--The amendments made by this section shall apply to articles sold by the manufacturer, producer, or importer after the date of the enactment of this Act.
SEC. 5443. TREATMENT OF TRIBAL GOVERNMENTS FOR PURPOSES OF FEDERAL WAGERING EXCISE AND OCCUPATIONAL TAXES.
(a) In General.--Subsection (a) of section 7871 (relating to Indian tribal governments treated as States for certain purposes) is amended by striking “and” at the end of paragraph (6), by striking the period at the end of paragraph (7) and inserting “; and”, and by adding at the end the following new paragraph:
“(8) for purposes of chapter 35 (relating to taxes on wagering).”.
(b) Effective Date.--The amendments made by this section shall take effect on July 1, 2004, but shall not apply to taxes imposed for periods before such date.
PART VI--OTHER PROVISIONS
SEC. 5451. INCOME TAX CREDIT FOR DISTILLED SPIRITS WHOLESALERS AND FOR DISTILLED SPIRITS IN CONTROL STATE BAILMENT WAREHOUSES FOR COSTS OF CARRYING FEDERAL EXCISE TAXES ON BOTTLED DISTILLED SPIRITS.
(a) In General.--Subpart A of part I of subchapter A of chapter 51 (relating to gallonage and occupational taxes) is amended by adding at the end the following new section:
“SEC. 5011. INCOME TAX CREDIT FOR AVERAGE COST OF CARRYING EXCISE TAX.
“(a) In General.--For purposes of section 38, the amount of the distilled spirits credit for any taxable year is the amount equal to the product of--
“(1) in the case of--
“(A) any eligible wholesaler--
“(i) the number of cases of bottled distilled spirits--
“(I) which were bottled in the United States, and
“(II) which are purchased by such wholesaler during the taxable year directly from the bottler of such spirits, or
“(B) any person which is subject to section 5005 and which is not an eligible wholesaler, the number of cases of bottled distilled spirits which are stored in a warehouse operated by, or on behalf of, a State, or agency or political subdivision thereof, on which title has not passed on an unconditional sale basis, and
“(2) the average tax-financing cost per case for the most recent calendar year ending before the beginning of such taxable year.
“(b) Eligible Wholesaler.--For purposes of this section, the term ‘eligible wholesaler' means any person which holds a permit under the Federal Alcohol Administration Act as a wholesaler of distilled spirits which is not a State, or agency or political subdivision thereof.
“(c) Average Tax-Financing Cost.--
“(1) In general.--For purposes of this section, the average tax-financing cost per case for any calendar year is the amount of interest which would accrue at the deemed financing rate during a 60-day period on an amount equal to the deemed Federal excise tax per case.
“(2) Deemed financing rate.--For purposes of paragraph (1), the deemed financing rate for any calendar year is the average of the corporate overpayment rates under paragraph (1) of section 6621(a) (determined without regard to the last sentence of such paragraph) for calendar quarters of such year.
“(3) Deemed federal excise tax per case.--For purposes of paragraph (1), the deemed Federal excise tax per case is $25.68.
“(d) Other Definitions and Special Rules.--For purposes of this section--
“(1) Case.--The term ‘case' means 12 80-proof 750 milliliter bottles.
“(2) Number of cases in lot.--The number of cases in any lot of distilled spirits shall be determined by dividing the number of liters in such lot by 9.”.
(b) Credit Treated as Part of General Business Credit.--Section 38(b) (relating to current year business credit), as amended by section 5101 of this Act, is amended by striking “plus” at the end of paragraph (15), by striking the period at the end of paragraph (16) and inserting “, plus”, and by adding at the end the following new paragraph:
“(17) the distilled spirits credit determined under section 5011(a).”.
(c) Conforming Amendments.--
(1) Section 39(d), as amended by section 5101 of this Act, is amended by adding at the end the following new paragraph:
“(12) No carryback of section 5011 credit before effective date.--No portion of the unused business credit for any taxable year which is attributable to the credit determined under section 5011(a) may be carried back to a taxable year beginning before the date of the enactment of section 5011.”.
(2) The table of sections for subpart A of part I of subchapter A of chapter 51 is amended by adding at the end the following new item:
“Sec. 5011. Income tax credit for average cost of carrying excise tax.”.
(d) Effective Date.--The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
SEC. 5452. CREDIT FOR TAXPAYERS OWNING COMMERCIAL POWER TAKEOFF VEHICLES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business-related credits) is amended by adding at the end the following new section:
“SEC. 45G. COMMERCIAL POWER TAKEOFF VEHICLES CREDIT.
“(a) General Rule.--For purposes of section 38, the amount of the commercial power takeoff vehicles credit determined under this section for the taxable year is $250 for each qualified commercial power takeoff vehicle owned by the taxpayer as of the close of the calendar year in which or with which the taxable year of the taxpayer ends.
“(b) Definitions.--For purposes of this section--
“(1) Qualified commercial power takeoff vehicle.--The term ‘qualified commercial power takeoff vehicle' means any highway vehicle described in paragraph (2) which is propelled by any fuel subject to tax under section 4041 or 4081 if such vehicle is used in a trade or business or for the production of income (and is licensed and insured for such use).
“(2) Highway vehicle described.--A highway vehicle is described in this paragraph if such vehicle is--
“(A) designed to engage in the daily collection of refuse or recyclables from homes or businesses and is equipped with a mechanism under which the vehicle's propulsion engine provides the power to operate a load compactor, or
“(B) designed to deliver ready mixed concrete on a daily basis and is equipped with a mechanism under which the vehicle's propulsion engine provides the power to operate a mixer drum to agitate and mix the product en route to the delivery site.
“(c) Exception for Vehicles Used by Governments, Etc.--No credit shall be allowed under this section for any vehicle owned by any person at the close of a calendar year if such vehicle is used at any time during such year by--
“(1) the United States or an agency or instrumentality thereof, a State, a political subdivision of a State, or an agency or instrumentality of one or more States or political subdivisions, or
“(2) an organization exempt from tax under section 501(a).
“(d) Termination.--This section shall not apply with respect to any calendar year after 2006.”.
(b) Credit Treated as Part of General Business Credit.--Section 38(b) (relating to current year business credit), as amended by section 5451 of this Act, is amended by striking “plus” at the end of paragraph (16), by striking the period at the end of paragraph (17) and inserting “, plus”, and by adding at the end the following new paragraph:
“(18) the commercial power takeoff vehicles credit under section 45G(a).”.
(c) Conforming Amendments.--
(1) Section 39(d), as amended by section 5451 of this Act, is amended by adding at the end the following new paragraph:
“(13) No carryback of section 45g credit before effective date.--No portion of the unused business credit for any taxable year which is attributable to the credit determined under section 45G(a) may be carried back to a taxable year beginning on or before the date of the enactment of section 45G.”.
(2) The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:
“Sec. 45G. Commercial power takeoff vehicles credit.”.
(d) Effective Date.--The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
SEC. 5453. CREDIT FOR AUXILIARY POWER UNITS INSTALLED ON DIESEL-POWERED TRUCKS.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business-related credits), as amended by section 5452 of this Act, is amended by adding at the end the following new section:
“SEC. 45H. AUXILIARY POWER UNIT CREDIT.
“(a) General Rule.--For purposes of section 38, the amount of the auxiliary power unit credit determined under this section for the taxable year is $250 for each qualified auxiliary power unit--
“(1) purchased by the taxpayer, and
“(2) installed or caused to be installed by the taxpayer on a qualified heavy-duty highway vehicle during such taxable year.
“(b) Definitions.--For purposes of this section--
“(1) Qualified auxiliary power unit.--The term ‘qualified auxiliary power unit' means any integrated system which--
“(A) provides heat, air conditioning, engine warming, and electricity to the factory installed components on a qualified heavy-duty highway vehicle as if the main drive engine of such vehicle was in operation,
“(B) is employed to reduce long-term idling of the diesel engine on such a vehicle, and
“(C) is certified by the Environmental Protection Agency as meeting emission standards in regulations in effect on the date of the enactment of this section.
“(2) Qualified heavy-duty highway vehicle.--The term ‘qualified heavy-duty highway vehicle' means any highway vehicle weighing more than 12,500 pounds and powered by a diesel engine.
“(c) Termination.--This section shall not apply with respect to any installation occurring after December 31, 2006.”.
(b) Credit Treated as Part of General Business Credit.--Section 38(b) (relating to current year business credit), as amended by section 5452 of this Act, is amended by striking “plus” at the end of paragraph (17), by striking the period at the end of paragraph (18) and inserting “, plus”, and by adding at the end the following new paragraph:
“(19) the auxiliary power unit credit under section 45H(a).”.
(c) Conforming Amendments.--
(1) Section 39(d), as amended by section 5452 of this Act, is amended by adding at the end the following new paragraph:
“(14) No carryback of section 45h credit before effective date.--No portion of the unused business credit for any taxable year which is attributable to the credit determined under section 45H(a) may be carried back to a taxable year beginning on or before the date of the enactment of section 45H.”.
(2) The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by section 5452 of this Act, is amended by adding at the end the following new item:
“Sec. 45H. Auxiliary power unit credit.”.
(d) Effective Date.--The amendments made by this section shall apply to auxiliary power units purchased and installed for taxable years beginning after the date of the enactment of this Act.
Subtitle F--Miscellaneous Provisions SEC. 5501. MOTOR FUEL TAX ENFORCEMENT ADVISORY COMMISSION.
(a) Establishment.--There is established a Motor Fuel Tax Enforcement Advisory Commission (in this section referred to as the “Commission”).
(b) Function.--The Commission shall--
(1) review motor fuel revenue collections, historical and current;
(2) review the progress of investigations;
(3) develop and review legislative proposals with respect to motor fuel taxes;
(4) monitor the progress of administrative regulation projects relating to motor fuel taxes;
(5) review the results of Federal and State agency cooperative efforts regarding motor fuel taxes;
(6) review the results of Federal interagency cooperative efforts regarding motor fuel taxes; and
(7) evaluate and make recommendations regarding--
(A) the effectiveness of existing Federal enforcement programs regarding motor fuel taxes,
(B) enforcement personnel allocation, and
(C) proposals for regulatory projects, legislation, and funding.
(c) Membership.--
(1) Appointment.--The Commission shall be composed of the following representatives appointed by the Chairmen and the Ranking Members of the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives:
(A) At least 1 representative from each of the following Federal entities: the Department of Homeland Security, the Department of Transportation - Office of Inspector General, the Federal Highway Administration, the Department of Defense, and the Department of Justice.
(B) At least 1 representative from the Federation of State Tax Administrators.
(C) At least 1 representative from any State department of transportation.
(D) 2 representatives from the highway construction industry.
(E) 5 representatives from industries relating to fuel distribution -- refiners (2 representatives), distributors (1 representative), pipelines (1 representative), and terminal operators (2 representatives).
(F) 1 representative from the retail fuel industry.
(G) 2 representatives from the staff of the Committee on Finance of the Senate and 2 representatives from the staff of the Committee on Ways and Means of the House of Representatives.
(2) Terms.--Members shall be appointed for the life of the Commission.
(3) Vacancies.--A vacancy in the Commission shall be filled in the manner in which the original appointment was made.
(4) Travel expenses.--Members shall serve without pay but shall receive travel expenses, including per diem in lieu of subsistence, in accordance with sections 5702 and 5703 of title 5, United States Code.
(5) Chairman.--The Chairman of the Commission shall be elected by the members.
(d) Funding.--Such sums as are necessary shall be available from the Highway Trust fund for the expenses of the Commission.
(e) Consultation.--Upon request of the Commission, representatives of the Department of the Treasury and the Internal Revenue Service shall be available for consultation to assist the Commission in carrying out its duties under this section.
(f) Obtaining Data.--The Commission may secure directly from any department or agency of the United States, information (other than information required by any law to be kept confidential by such department or agency) necessary for the Commission to carry out its duties under this section. Upon request of the Commission, the head of that department or agency shall furnish such nonconfidential information to the Commission. The Commission shall also gather evidence through such means as it may deem appropriate, including through holding hearings and soliciting comments by means of Federal Register notices.
(g) Termination.--The Commission shall terminate after September 30, 2009.
SEC. 5502. NATIONAL SURFACE TRANSPORTATION INFRASTRUCTURE FINANCING COMMISSION.
(a) Establishment.--There is established a National Surface Transportation Infrastructure Financing Commission (in this section referred to as the “Commission”). The Commission shall hold its first meeting within 90 days of the appointment of the eighth individual to be named to the Commission.
(b) Function.--
(1) In general.--The Commission shall--
(A) make a thorough investigation and study of revenues flowing into the Highway Trust Fund under current law, including the individual components of the overall flow of such revenues;
(B) consider whether the amount of such revenues is likely to increase, decline, or remain unchanged, absent changes in the law, particularly by taking into account the impact of possible changes in public vehicular choice, fuel use, or travel alternatives that could be expected to reduce or increase revenues into the Highway Trust Fund;
(C) consider alternative approaches to generating revenues for the Highway Trust Fund, and the level of revenues that such alternatives would yield;
(D) consider highway and transit needs and whether additional revenues into the Highway Trust Fund, or other Federal revenues dedicated to highway and transit infrastructure, would be required in order to meet such needs; and
(E) study such other matters closely related to the subjects described in the preceding subparagraphs as it may deem appropriate.
(2) Time frame of investigation and study.--The time frame to be considered by the Commission shall extend through the year 2015.
(3) Preparation of report.--Based on such investigation and study, the Commission shall develop a final report, with recommendations and the bases for those recommendations, indicating policies that should be adopted, or not adopted, to achieve various levels of annual revenue for the Highway Trust Fund and to enable the Highway Trust Fund to receive revenues sufficient to meet highway and transit needs. Such recommendations shall address, among other matters as the Commission may deem appropriate--
(A) what levels of revenue are required by the Federal Highway Trust Fund in order for it to meet needs to--
(i) maintain, and
(ii) improve the condition and performance of the Nation's highway and transit systems;
(B) what levels of revenue are required by the Federal Highway Trust Fund in order to ensure that Federal levels of investment in highways and transit do not decline in real terms; and
(C) the extent, if any, to which the Highway Trust Fund should be augmented by other mechanisms or funds as a Federal means of financing highway and transit infrastructure investments.
(c) Membership.--
(1) Appointment.--The Commission shall be composed of 15 members, appointed as follows:
(A) 7 members appointed by the Secretary of Transportation, in consultation with the Secretary of the Treasury.
(B) 2 members appointed by the Chairman of the Committee on Ways and Means of the House of Representatives.
(C) 2 members appointed by the Ranking Minority Member of the Committee on Ways and Means of the House of Representatives.
(D) 2 members appointed by the Chairman of the Committee on Finance of the Senate.
(E) 2 members appointed by the Ranking Minority Member of the Committee on Finance of the Senate.
(2) Qualifications.--Members appointed pursuant to paragraph (1) shall be appointed from among individuals knowledgeable in the fields of public transportation finance or highway and transit programs, policy, and needs, and may include representatives of interested parties, such as State and local governments or other public transportation authorities or agencies, representatives of the transportation construction industry (including suppliers of technology, machinery and materials), transportation labor (including construction and providers), transportation providers, the financial community, and users of highway and transit systems.
(3) Terms.--Members shall be appointed for the life of the Commission.
(4) Vacancies.--A vacancy in the Commission shall be filled in the manner in which the original appointment was made.
(5) Travel expenses.--Members shall serve without pay but shall receive travel expenses, including per diem in lieu of subsistence, in accordance with sections 5702 and 5703 of title 5, United States Code.
(6) Chairman.--The Chairman of the Commission shall be elected by the members.
(d) Staff.--The Commission may appoint and fix the pay of such personnel as it considers appropriate.
(e) Funding.--Funding for the Commission shall be provided by the Secretary of the Treasury and by the Secretary of Transportation, out of funds available to those agencies for administrative and policy functions.
(f) Staff of Federal Agencies.--Upon request of the Commission, the head of any department or agency of the United States may detail any of the personnel of that department or agency to the Commission to assist in carrying out its duties under this section.
(g) Obtaining Data.--The Commission may secure directly from any department or agency of the United States, information (other than information required by any law to be kept confidential by such department or agency) necessary for the Commission to carry out its duties under this section. Upon request of the Commission, the head of that department or agency shall furnish such nonconfidential information to the Commission. The Commission shall also gather evidence through such means as it may deem appropriate, including through holding hearings and soliciting comments by means of Federal Register notices.
(h) Report.--Not later than 2 years after the date of its first meeting, the Commission shall transmit its final report, including recommendations, to the Secretary of Transportation, the Secretary of the Treasury, and the Committee on Ways and Means of the House of Representatives, the Committee on Finance of the Senate, the Committee on Transportation and Infrastructure of the House of Representatives, the Committee on Environment and Public Works of the Senate, and the Committee on Banking, Housing, and Urban Affairs of the Senate.
(i) Termination.--The Commission shall terminate on the 180th day following the date of transmittal of the report under subsection (h). All records and papers of the Commission shall thereupon be delivered to the Administrator of General Services for deposit in the National Archives.
SEC. 5503. TREASURY STUDY OF FUEL TAX COMPLIANCE AND INTERAGENCY COOPERATION.
(a) In General.--Not later than January 31, 2006, the Secretary of the Treasury shall submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a report regarding fuel tax enforcement which shall include the information and analysis specified in subsections (b) and (c) and any other information and recommendations the Secretary of the Treasury may deem appropriate.
(b) Audits.--With respect to audits conducted by the Internal Revenue Service, the report required under subsection (a) shall include--
(1) the number and geographic distribution of audits conducted annually, by fiscal year, between October 1, 2001, and September 30, 2005;
(2) the total volume involved for each of the taxable fuels covered by such audits and a comparison to the annual production of such fuels;
(3) the staff hours and number of personnel devoted to the audits per year; and
(4) the results of such audits by year, including total tax collected, total penalties collected, and number of referrals for criminal prosecution.
(c) Enforcement Activities.--With respect to enforcement activities, the report required under subsection (a) shall include--
(1) the number and geographic distribution of criminal investigations and prosecutions annually, by fiscal year, between October 1, 2001, and September 30, 2005, and the results of such investigations and prosecutions;
(2) to the extent such investigations and prosecutions involved other agencies, State or Federal, a breakdown by agency of the number of joint investigations involved;
(3) an assessment of the effectiveness of joint action and cooperation between the Department of the Treasury and other Federal and State agencies, including a discussion of the ability and need to share information across agencies for both civil and criminal Federal tax enforcement and enforcement of State or Federal laws relating to fuels;
(4) the staff hours and number of personnel devoted to criminal investigations and prosecutions per year;
(5) the staff hours and number of personnel devoted to administrative collection of fuel taxes; and
(6) the results of administrative collection efforts annually, by fiscal year, between October 1, 2001, and September 30, 2005.
SEC. 5504. EXPANSION OF HIGHWAY TRUST FUND EXPENDITURE PURPOSES TO INCLUDE FUNDING FOR STUDIES OF SUPPLEMENTAL OR ALTERNATIVE FINANCING FOR THE HIGHWAY TRUST FUND.
(a) In General.--From amounts available in the Highway Trust Fund, there is authorized to be expended for 2 comprehensive studies of supplemental or alternative funding sources for the Highway Trust Fund--
(1) $1,000,000 to the Western Transportation Institute of the College of Engineering at Montana State University for the study and report described in subsection (b), and
(2) $16,500,000 to the Public Policy Center of the University of Iowa for the study and report described in subsection (c).
(b) Study of Funding Mechanisms.--Not later than December 31, 2006, the Western Transportation Institute of the College of Engineering at Montana State University shall report to the Secretary of the Treasury and the Secretary of Transportation on a study of highway funding mechanisms of other industrialized nations, an examination of the viability of alternative funding proposals, including congestion pricing, greater reliance on tolls, privatization of facilities, and bonding for construction of added capacity, and an examination of increasing the rates of motor fuels taxes in effect on the date of the enactment of this Act, including the indexation of such rates.
(c) Study on Field Test of On-Board Computer Assessment of Highway Use Taxes.--Not later than December 31, 2011, the Public Policy Center of the University of Iowa shall direct, analyze, and report to the Secretary of the Treasury and the Secretary of Transportation on a long-term field test of an approach to assessing highway use taxes based upon actual mileage driven by a specific vehicle on specific types of highways by use of an on-board computer--
(1) which is linked to satellites to calculate highway mileage traversed,
(2) which computes the appropriate highway use tax for each of the Federal, State, and local governments as the vehicle makes use of the highways, and
(3) the data from which is periodically downloaded by the vehicle owner to a collection center for an assessment of highway use taxes due in each jurisdiction traversed.The components of the field test shall include 2 years for preparation, including selection of vendors and test participants, and 3-year testing period.
SEC. 5505. TREASURY STUDY OF HIGHWAY FUELS USED BY TRUCKS FOR NON-TRANSPORTATION PURPOSES.
(a) Study.--The Secretary of the Treasury shall conduct a study regarding the use of highway motor fuel by trucks that is not used for the propulsion of the vehicle. As part of such study--
(1) in the case of vehicles carrying equipment that is unrelated to the transportation function of the vehicle--
(A) the Secretary of the Treasury, in consultation with the Secretary of Transportation, and with public notice and comment, shall determine the average annual amount of tax paid fuel consumed per vehicle, by type of vehicle, used by the propulsion engine to provide the power to operate the equipment attached to the highway vehicle, and
(B) the Secretary of the Treasury shall review the technical and administrative feasibility of exempting such nonpropulsive use of highway fuels for the highway motor fuels excise taxes,
(2) in the case where non-transportation equipment is run by a separate motor--
(A) the Secretary of the Treasury shall determine the annual average amount of fuel exempted from tax in the use of such equipment by equipment type, and
(B) the Secretary of the Treasury shall review issues of administration and compliance related to the present-law exemption provided for such fuel use, and
(3) the Secretary of the Treasury shall--
(A) estimate the amount of taxable fuel consumed by trucks and the emissions of various pollutants due to the long-term idling of diesel engines, and
(B) determine the cost of reducing such long-term idling through the use of plug-ins at truck stops, auxiliary power units, or other technologies.
(b) Report.--Not later than January 1, 2006, the Secretary of the Treasury shall report the findings of the study required under subsection (a) to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives.
SEC. 5506. DELTA REGIONAL TRANSPORTATION PLAN.
(a) Study.--The Delta Regional Authority shall conduct a study of the transportation assets and needs in the States of Alabama, Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee which comprise the Delta region.
(b) Regional Strategic Transportation Plan.--Upon completion of the study required under subsection (a), the Delta Regional Authority shall establish a regional strategic transportation plan to achieve efficient transportation systems in the Delta region. In developing the regional strategic transportation plan, the Delta Regional Authority shall consult with local planning and development districts, local and regional governments, metropolitan planning organizations, State transportation entities, and Federal transportation agencies.
(c) Elements of Study and Plan.--The study and plan under this section shall include the following transportation modes and systems: transit, rail, highway, interstate, bridges, air, airports, waterways and ports.
(d) Authorization of Appropriations.--There is authorized to be appropriated to the Delta Regional Authority $1,000,000 to carry out the purposes of this section, to remain available until expended.
SEC. 5507. TREATMENT OF EMPLOYER-PROVIDED TRANSIT AND VAN POOLING BENEFITS.
(a) In General.--Subparagraph (A) of section 132(f)(2) (relating to limitation on exclusion) is amended by striking “$100” and inserting “$120”.
(b) Inflation Adjustment Conforming Amendments.--The last sentence of section 132(f)(6)(A) (relating to inflation adjustment) is amended--
(1) by striking “2002” and inserting “2005”, and
(2) by striking “2001” and inserting “2004”.
(c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2004.
SEC. 5508. STUDY OF INCENTIVES FOR PRODUCTION OF BIODIESEL.
(a) Study.--The General Comptroller of the United States shall conduct a study related to biodiesel fuels and the tax credit for biodiesel fuels established under this Act. Such study shall include--
(1) an assessment on whether such credit provides sufficient assistance to the producers of biodiesel fuel to establish the fuel as a viable energy alternative in the current market place,
(2) an assessment on how long such credit or similar subsidy would have to remain in effect before biodiesel fuel can compete in the market place without such assistance,
(3) a cost-benefit analysis of such credit, comparing the cost of the credit in forgone revenue to the benefits of lower fuel costs for consumers, increased profitability for the biodiesel industry, increased farm income, reduced program outlays from the Department of Agriculture, and the improved environmental conditions through the use of biodiesel fuel, and
(4) an assessment on whether such credit results in any unintended consequences for unrelated industries, including the impact, if any, on the glycerin market.
(b) Report.--Not later than 2 years after the date of the enactment of this Act, the Comptroller General of the United States shall report the findings of the study required under subsection (a) to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives.
SEC. 5509. REDUCTION OF EXPENDITURES FROM THE HIGHWAY TRUST FUND.
The amount made available under titles I, II, III, and IV of this Act shall be reduced on a pro rata basis, so that the total of such reductions equals $214,000,000,000.
Subtitle G--Revenue Offsets PART I--LIMITATION ON EXPENSING CERTAIN PASSENGER AUTOMOBILES SEC. 5601. EXPANSION OF LIMITATION ON DEPRECIATION OF CERTAIN PASSENGER AUTOMOBILES.
(a) In General.--Section 179(b) (relating to limitations) is amended by adding at the end the following new paragraph:
“(6) Limitation on cost taken into account for certain passenger vehicles.--
“(A) In general.--The cost of any sport utility vehicle for any taxable year which may be taken into account under this section shall not exceed $25,000.
“(B) Sport utility vehicle.--For purposes of subparagraph (A)--
“(i) In general.--The term ‘sport utility vehicle' means any 4-wheeled vehicle which--
“(I) is manufactured primarily for use on public streets, roads, and highways,
“(II) is not subject to section 280F, and
“(III) is rated at not more than 14,000 pounds gross vehicle weight.
“(ii) Certain vehicles excluded.--Such term does not include any vehicle which--
“(I) does not have the primary load carrying device or container attached,
“(II) has a seating capacity of more than 12 individuals,
“(III) is designed for more than 9 individuals in seating rearward of the driver's seat,
“(IV) is equipped with an open cargo area, or a covered box not readily accessible from the passenger compartment, of at least 72.0 inches in interior length, or
“(V) has an integral enclosure, fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield.”.
(c) Effective Date.--The amendments made by this section shall apply to property placed in service after February 2, 2004.
PART II--PROVISION TO REPLENISH THE GENERAL FUND
SEC. 5611. MODIFICATION TO CORPORATE ESTIMATED TAX REQUIREMENTS.
The amount of any required installment of corporate estimated income tax which is otherwise due under section 6655 of the Internal Revenue Code of 1986 after June 30, 2009, and before October 1, 2009, shall be 119 percent of such amount.
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Senate amendment submitted
February 11, 2004