REDUCTION IN AVIATION-RELATED TAXES WHERE APPROPRIATIONS ARE SIGNIFICANTLY BELOW AUTHORIZATIONS.

SEC. 405. REDUCTION IN AVIATION-RELATED TAXES WHERE APPROPRIATIONS ARE SIGNIFICANTLY BELOW AUTHORIZATIONS. (a) In General.— Part III of subchapter C of chapter 33 of the Internal Revenue Code of 1986 (relating to facilities and services) is amended by adding at the end the following new section: “SEC. 4283. REDUCTION IN AVIATION-RELATED TAXES IN CERTAIN CASES. “(a) Reduction in Rates.— If the funding percentage is less than 85 percent, with respect to any taxable event occurring during 1990— “(1) subsections (a) and (b) of section 4261 (relating to tax on transportation of persons by air) shall each be applied by substituting ‘4 percent’ for ‘8 percent’, “(2) subsection (a) of section 4271 (relating to tax on transportation of property by air) shall be applied by substituting ‘2.5 percent’ for ‘5 percent’, “(3) paragraph (1) of section 4041(c) (relating to tax on certain fuels used in noncommercial aviation) shall be applied by substituting ‘7 cents’ for ‘14 cents’, and “(4) paragraph (2) of section 4041(c) (relating to tax on gasoline used in noncommercial aviation) shall not apply. “(b) Funding Percentage.— 101 STAT. 1534 “(1) In general.— For purposes of this section, the funding percentage is the percentage (determined by the Secretary) which— “(A) the sum of— “(i) the aggregate amounts obligated under section 505 of the Airport and Airway Improvement Act of 1982 for fiscal years 1988 and 1989, and “(ii) the aggregate amounts appropriated under subsections (a) and (b) of section 506 of such Act for such fiscal years, is of “(B) the sum of— “(i) the aggregate amounts authorized to be obligated under such section 505 for such fiscal years, and “(ii) the aggregate amounts authorized to be appropriated under subsections (a) and (b) of such section 506 for such fiscal years. “(2) Rules for applying paragraph (1).— “(A) Treatment of prior year amounts.— For purposes of paragraph (1), an amount shall be treated as authorized, obligated, or appropriated only for the 1st fiscal year for which it is authorized, obligated, or appropriated, as the case may be. “(B) Treatment of sequestered amounts.— The determination under paragraph (1)(A) shall be made without regard to the sequestration of any amount described therein pursuant to an order under part C of title II of the Balanced Budget and Emergency Deficit Control Act of 1985 (or any successor law). “(3) Determination of funding percentage.— “(A) In general.— Not later than December 1, 1989, the Secretary shall determine— “(i) the funding percentage, and “(ii) whether the rate reductions under this section shall apply to taxable events occurring during 1990. “(B) Determinations to be published in federal register.— As soon as practicable after making the determinations under subparagraph (A), the Secretary shall publish such determinations in the Federal Register. “(c) Taxable Event.— For purposes of this section— “(1) Taxable transportation by air.— In the case of the taxes imposed by sections 4261 and 4271, the taxable event shall be treated as occurring when the payment for the taxable transportation is made. “(2) Sale or use of fuel.— In the case of the taxes imposed by section 4041(c), the taxable event shall be the sale or use on which tax is imposed.” (b) Refund of Fuel Taxes on Noncommercial Aviation Where Rate Reduction in Effect.— (1) In general.— Section 6427 of such Code (relating to fuels not used for taxable purposes) is amended by redesignating subsection (p) as subsection (q) and by inserting after subsection (o) the following new subsection: “(p) Gasoline Used in Noncommercial Aviation During Period Rate Reduction in Effect.— Except as provided in subsection (k), if— “(1) any tax is imposed by section 4081 on any gasoline, 101 STAT. 1535 “(2) such gasoline is used during 1990 as a fuel in any aircraft in noncommercial aviation (as defined in section 4041(c)(4)), and “(3) no tax is imposed by section 4041(c)(2) on taxable events occurring during 1990 by reason of section 4283, the Secretary shall pay (without interest) to the ultimate purchaser of such gasoline an amount equal to the excess of the aggregate amount of tax paid under section 4081 on the gasoline so used over an amount equal to 6 cents multiplied by the number of gallons of gasoline so used.” (2) Technical amendments.— (A) Paragraph (1) of section 6427(i) of such Code is amended by striking out “or (h)” and inserting in lieu thereof “(h), or (p)”. (B) Clause (i) of section 6427(i)(2)(A) of such Code is amended by striking out “and (h)” and inserting in lieu thereof “(h), and (p)”. (3) Cross reference.— Subsection (c) of section 4041 of such Code is amended by adding at the end thereof the following new paragraph: “(6) Reduction in rates of tax in certain circumstances.— For reduction of rates of taxes imposed by paragraphs (1) and (2) in certain circumstances, see section 4283.” (c) Clerical Amendment.— The table of sections for part III of subchapter C of chapter 33 of such Code is amended by adding at the end the following new item: “Sec. 4283. Reduction in aviation-related taxes in certain cases.”