INCREASE AND EXTENSION OF AVIATION-RELATED TAXES AND TRUST FUND; REPEAL OF REDUCTION IN RATES.

SEC. 11213. INCREASE AND EXTENSION OF AVIATION-RELATED TAXES AND TRUST FUND; REPEAL OF REDUCTION IN RATES. (a) Increase in Rates on Transportation.— (1) Transportation of persons.— Subsections (a) and (b) of section 4261 are each amended by striking “8 percent” and inserting “10 percent”. (2) Transportation of property.— Subsection (a) of section 4271 is amended by striking “5 percent” and inserting “6.25 percent”. (3) Effective date.— The amendments made by this subsection shall apply to transportation beginning after November 30, 1990, but shall not apply to amounts paid on or before such date. (b) Increase in Rates on Fuel.— (1) In general.— Paragraph (3) of section 4091(b) is amended— 104 STAT. 1388–433 (A) by striking “14 cents” and inserting “17.5 cents”, and (B) by inserting “except as provided in subsection (d),” after “paragraph (1),”. (2) Conforming amendments.— (A) Paragraph (1) of section 4041(c) is amended by striking “14 cents” and inserting “17.5 cents”. (B) (i) Subparagraph (B) of section 4041(k)(D, as amended by section 11211, is amended to read as follows: “(B) the rate of the tax imposed by subsection (c)(1) shall be the comparable rate under section 4091(d), and”. (ii) Subparagraph (B) of section 4041(m)(1) is amended to read as follows: “(B) the rate of the tax imposed by subsection (c)(1) shall be the comparable rate under section 4091(d)(D.” (C) (i) Paragraphs (1) and (2) of section 4091(d) are amended to read as follows: “(1) In general.— The Airport and Airway Trust Fund financing rate shall be— “(A) 4.1 cents per gallon in the case of the sale of any mixture of aviation fuel if— “(i) at least 10 percent of such mixture consists of alcohol (as defined in section 4081(c)(3)), and “(ii) the aviation fuel in such mixture was not taxed under subparagraph (B), and “(B) 4.56 cents per gallon in the case of the sale of aviation fuel for use (at the time of such sale) in producing a mixture described in subparagraph (A). In the case of a sale described in subparagraph (B), the Leaking Underground Storage Tank Trust Fund financing rate shall be % cent per gallon. “(2) Later separation.— If any person separates the aviation fuel from a mixture of the aviation fuel and alcohol on which tax was imposed under subsection (a) at the Airport and Airway Trust Fund financing rate equivalent to 4.1 cents per gallon by reason of this subsection (or with respect to which a credit or payment was allowed or made by reason of section 6427(f)(D), such person shall be treated as the producer of such aviation fuel. The amount of tax imposed on any sale of such aviation fuel by such person shall be reduced by the amount of tax imposed (and not credited or refunded) on any prior sale of such fuel.” (ii) The heading for subsection (d) of section 4091 is amended by striking “Exemption from” and inserting “Reduced Rate of”. (D) Section 4091 is amended by adding at the end thereof the following new subsection: “(e) Lower Rates of Tax on Alcohol Mixtures Not Made From Ethanol.— In the case of a mixture described in subsection (c)(I)(A)(i) or (d)(1)(A)(i) none of the alcohol in which is ethanol— “(1) subsections (c)(I)(A) and (c)(2), and subsections (d)(I)(A) and (d)(2), shall each be applied by substituting rates which are 0.6 cents less than the rates contained therein, and “(2) subsections (c)(I)(B) and (d)(1)(B) shall be applied by substituting rates which are 10/9 of the rates determined under paragraph (1).” (3) Subsection (f) of section 6427 is amended to read as follows: 104 STAT. 1388–434 “(f) Gasoline, Diesel Fuel, and Aviation Fuel Used to Produce Certain Alcohol Fuels.— “(1) In general.— Except as provided in subsection (k), if any gasoline, diesel fuel, or aviation fuel on which tax was imposed by section 4081 or 4091 at the regular tax rate is used by any person in producing a mixture described in section 4081(c), 4091(c)(l)(A), or 4091(d)(1)(A) (as the case may be) which is sold or used in such person’s trade or business the Secretary shall pay (without interest) to such person an amount equal to the excess of the regular tax rate over the incentive tax rate with respect to such fuel. “(2) Definitions.— For purposes of paragraph (1)— “(A) Regular tax rate.— The term ‘regular tax rate’ means— “(i) in the case of gasoline, the aggregate rate of tax imposed by section 4081 determined without regard to subsection (c) thereof, “(ii) in the case of diesel fuel, the aggregate rate of tax imposed by section 4091 on such fuel determined without regard to subsection (c) thereof, and “(iii) in the case of aviation fuel, the aggregate rate of tax imposed by section 4091 on such fuel determined without regard to subsection (d) thereof. “(B) Incentive tax rate.— The term ‘incentive tax rate’ means— “(i) in the case of gasoline, the aggregate rate of tax imposed by section 4081 with respect to fuel described in subsection (c)(1) thereof, “(ii) in the case of diesel fuel, the aggregate rate of tax imposed by section 4091 with respect to fuel described in subsection (c)(D(B) thereof, and “(iii) in the case of aviation fuel, the aggregate rate of tax imposed by section 4091 with respect to fuel described in subsection id)(l)(B) thereof. “(3) Coordination with other repayment provisions.— No amount shall be payable under paragraph (1) with respect to any gasoline, diesel fuel, or aviation fuel with respect to which an amount is payable under subsection (d), (e), or (1) of this section or under section 6420 or 6421. “(4) Termination.— This subsection shall not apply with respect to any mixture sold or used after September 30, 1995.” (4) Effective date.— The amendments made by this subsection shall take effect on December 1, 1990. (5) Floor stocks taxes.— (A) Imposition of tax.— In the case of aviation fuel on which tax was imposed under section 4041(c)(1) or 4091 of the Internal Revenue Code of 1986 before December 1, 1990, and which is held on such date by any person, there is hereby imposed a floor stocks tax on such fuel. (B) Rate of tax.— The rate of the tax imposed by subparagraph (A) shall be 3.5 cents per gallon. (C) Liability for tax and method of payment.— (i) Liability for tax.— A person holding fuel on December 1, 1990, to which the tax imposed by this paragraph applies shall be liable for such tax. 104 STAT. 1388–435 (ii) Method op payment.— The tax imposed by this paragraph shall be paid in such manner as the Secretary shall prescribe. (iii) Time for payment.— The tax imposed by this paragraph shall be paid on or before May 31, 1991. (D) Definitions.— For purposes of this paragraph— (i) Held by a person.— Fuel 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). (ii) Aviation fuel.— The term “aviation fuel” has the meaning given such term by section 4092(a) of such Code. (iii) Secretary.— The term “Secretary” means the Secretary of the Treasury or his delegate. (E) Exception for exempt uses.— The tax imposed by this paragraph shall not apply to fuel held by any person exclusively for any use which is a nontaxable use (as defined in section 6427(1) of such Code). (F) Other laws applicable.— All provisions of law, including penalties, applicable with respect to the taxes imposed by section 4091 of such Code shall, insofar as applicable and not inconsistent with the provisions of this paragraph, apply with respect to the floor stock taxes imposed by this paragraph to the same extent as if such taxes were imposed by such section 4091. (c) Special Rules for Deposits of Tax Revenues.— (1) Section 9502 is amended by adding at the end thereof the following new subsection: “(e) Special Rules for Transfers Into Trust Fund.— “(1) Increases in tax revenues before 1993 to remain in general fund.— In the case of taxes imposed before January 1, 1993, the amounts which would (but for this paragraph) be required to be appropriated under paragraphs (1), (2), and (3) of subsection (b) shall be 3 cents per gallon less (3.5 cents per gallon less in the case of taxes imposed by section 4041(c)(l) and 4091) than the amounts which would (but for this sentence) be appropriated under such paragraphs. “(2) Certain taxes on alcohol mixtures to remain in general fund.— For purposes of this section, the amounts which would (but for this paragraph) be required to be appropriated under paragraphs (1), (2), and (3) of subsection (b) shall be reduced by— “(A) 0.6 cent per gallon in the case of taxes imposed on any mixture at least 10 percent of which is alcohol (as defined in section 4081(c)(3)) if any portion of each alcohol is ethanol, and “(B) 0.67 cent per gallon in the case of fuel used in producing a mixture described in subparagraph (A).” (2) Paragraph (2) of section 9502(b) is amended by inserting “and the deficit reduction rate” after “financing rate”. (d) Extension of Taxes and Trust Fund.— (1) Transportation taxes.— Sections 4261(g) and 4271(d) are each amended by striking “January 1, 1991” and inserting “January 1, 1996”. (2) Fuel taxes.— 104 STAT. 1388–436 (A) Subparagraph (B) of section 4091(b)(6), as redesignated by section 11211, is amended by striking “January 1, 1991” and inserting “January 1, 1996”. (B) Paragraph (5) of section 4041(c) is amended by striking “December 31, 1990” and inserting “December 31, 1995”. (3) Deposits into trust fund.— Subsection (b) of section 9502 (relating to transfer to Airport and Airway Trust Fund of amounts equivalent to certain taxes) is amended by striking “January 1, 1991” each place it appears and inserting “January 1, 1996”. (4) Expenditure purposes to include the federal aviation administration research, engineering, and development authorization act of 1990 and the aviation safety and capacity expansion act of 1990.— Subparagraph (A) of section 9502(d)(1) is amended by striking “(as such Acts were in effect on the date of the enactment of the Airport and Airway Safety and Capacity Expansion Act of 1987)” and inserting “or the Federal Aviation Administration Research, Engineering, and Development Authorization Act of 1990 or the Aviation Safety and Capacity Expansion Act of 1990 (as such Acts were in effect on the date of the enactment of the Aviation Safety and Capacity Expansion Act of 1990)”. (e) Repeal of Reduction in Rates.— (1) Section 4283 (relating to reduction in aviation related taxes in certain cases) is hereby repealed. (2) The table of sections for part HI of subchapter C of chapter 33 is amended by striking the item relating to section 4283. (3) Subsection (c) of section 4041 is amended by striking paragraph (6). (f) Coordination With Other Provisions.— No amendment or any other provision of this section shall take effect unless the Airport Noise and Capacity Act of 1990, the Aviation Safety and Capacity Expansion Act of 1990, and the Federal Aviation Administration Research, Engineering, and Development Authorization Act of 1990 are enacted as part of this Act and are identical to the provisions of such Acts as included in the conference report on H.R. 5835 of the 101st Congress.