MODIFICATIONS TO TAX ON DIESEL FUEL.

SEC. 13242. MODIFICATIONS TO TAX ON DIESEL FUEL. (a) In General.— Subparts A and B of part in of subchapter A of chapter 32 (relating to manufacturers excise taxes), as amended by subpart A, are amended to read as follows: “Subpart A— Gasoline and Diesel Fuel “Sec. 4081. Imposition of tax. “Sec. 4082. Exemptions for diesel fuel. “Sec. 4083. Definitions; special rule; administrative authority. “Sec. 4084. Cross references. “SEC. 4081. IMPOSITION OF TAX “(a) Tax Imposed.— “(1) Tax on removal, entry, or sale.— “(A) In general.— There is hereby imposed a tax at the rate specified in paragraph (2) on— “(i) the removal of a taxable fuel from any refinery, “(ii) the removal of a taxable fuel from any terminal, “(iii) the entry into the United States of any taxable fuel for consumption, use, or warehousing, and “(iv) the sale of a taxable fuel to any person who is not registered under section 4101 unless there was a prior taxable removal or entry of such fuel under clause (i), (ii), or (iii). “(B) Exemption for bulk transfers to registered terminals or refineries.— The tax imposed by this paragraph shall not apply to any removal or entry of a taxable met transferred in bulk to a terminal or refinery if the person removing or entering the taxable fuel and the operator of such terminal or refinery are registered under section 4101. “(2) Rates of tax.— “(A) In general.— The rate of the tax imposed by this section is— “(i) in the case of gasoline, 18.3 cents per gallon, and “(ii) in the case of diesel fuel, 24.3 cents per gallon. “(B) Leaking underground storage tank trust fund tax.— The rates of tax specified in subparagraph (A) shall each be increased by 0.1 cent per gallon. The increase in tax under this subparagraph shall in this title be referred to as the Leaking Underground Storage Tank Trust Fund financing rate. “(b) Treatment of Removal or Subsequent Sale by Blender.— 107 STAT. 515 “(1) In general.— There is hereby imposed a tax at the rate determined under subsection (a) on taxable fuel removed or sold by the blender thereof. “(2) Credit for tax previously paid.— If— “(A) tax is imposed on the removal or sale of a taxable fuel by reason of paragraph (1), and “(B) the blender establishes the amount of the tax paid with respect to such fuel by reason of subsection (a), the amount of the tax so paid shall be allowed as a credit against the tax imposed by reason of paragraph (1). “(c) Taxable Fuels Mixed With Alcohol.— Under regulations prescribed by the Secretary— “(1) In general.— The rate of tax under subsection (a) shall be the alcohol mixture rate in the case of the removal or entry of any qualified alcohol mixture. “(2) Tax prior to mixing.— “(A) In general.— In the case of the removal or entry of any taxable fuel for use in producing at the time of such removal or entry a qualified alcohol mixture, the rate of tax under subsection (a) shall be the applicable fraction of the alcohol mixture rate. Subject to such terms and conditions as the Secretary may prescribe (including the application of section 4101), the treatment under the preceding sentence also shall apply to use in producing a qualified alcohol mixture after the time of such removal or entry. “(B) Applicable fraction.— For purposes of subparagraph (A), the applicable fraction is— “(i) in the case of a qualified alcohol mixture which contains gasoline, the fraction the numerator of which is 10 and the denominator of which is— “(I) 9 in the case of 10 percent gasohol, “(II) 9.23 in the case of 7.7 percent gasohol, and “(III) 9.43 in the case of 5.7 percent gasohol, and “(ii) in the case of a qualified alcohol mixture which does not contain gasoline, 10⁄9. “(3) Alcohol; qualified alcohol mixture.— For purposes of this subsection— “(A) Alcohol.— The term ‘alcohol’ includes methanol and ethanol but does not include alcohol produced from petroleum, natural gas, or coal (including peat). Such term does not include alcohol with a proof of less than 190 (determined without regard to any added denaturants). “(B) Qualified alcohol mixture.— The term ‘qualified alcohol mixture’ means— “(i) any mixture of gasoline with alcohol if at least 5.7 percent of such mixture is alcohol, and “(ii) any mixture of diesel fuel with alcohol if at least 10 percent of such mixture is alcohol. “(4) Alcohol mixture rates for gasoline mixtures.— For purposes of this subsection— “(A) In general.— The alcohol mixture rate for a qualified alcohol mixture which contains gasoline is the excess 107 STAT. 516of the rate which would (but for this paragraph) be determined under subsection (a) over— “(i) 5.4 cents per gallon for 10 percent gasohol, “(ii) 4.158 cents per gallon for 7.7 percent gasohol, and “(iii) 3.078 cents per gallon for 5.7 percent gasohol. In the case of a mixture none of the alcohol in which consists of ethanol, clauses (i), (ii), and (iii) shall be applied by substituting ‘6 cents’ for ‘5.4 cents’, ‘4.62 cents’ for ‘4.158 cents’, and ‘3.42 cents’ for ‘3.078 cents’. “(B) 10 percent gasohol.— The term ‘10 percent gasohol’ means any mixture of gasoline with alcohol if at least 10 percent of such mixture is alcohol. “(C) 7.7 percent gasohol.— The term ‘7.7 percent gasohol’ means any mixture of gasoline with alcohol if at least 7.7 percent, but not 10 percent or more, of such mixture is alcohol. “(D) 5.7 percent gasohol.— The term ‘5.7 percent gasohol’ means any mixture of gasoline with alcohol if at least 5.7 percent, but not 7.7 percent or more, of such mixture is alcohol. “(5) Alcohol mixture rate for diesel fuel mixtures.— The alcohol mixture rate for a qualified alcohol mixture which does not contain gasoline is the excess of the rate which would (but for this paragraph) be determined under subsection (a) over 5.4 cents per gallon (6 cents per gallon in the case of a qualified alcohol mixture none of the alcohol in which consists of ethanol). “(6) Limitation.— In no event shall any alcohol mixture rate determined under this subsection be less than 4.3 cents per gallon. “(7) Later separation of fuel from qualified alcohol mixture.— If any person separates the taxable fuel from a qualified alcohol mixture on which tax was imposed under subsection (a) at a rate determined under paragraph (1) or (2) (or with respect to which a credit or payment was allowed or made by reason of section 6427(f)(1)), such person shall be treated as the refiner of such taxable fuel. The amount of tax imposed on any removal of such fuel by such person shall be reduced by the amount of tax imposed (and not credited or refunded) on any prior removal or entry of such fuel. “(8) Termination.— Paragraphs (1) and (2) shall not apply to any removal, entry, or sale after September 30, 2000. “(d) Termination.— “(1) In general.— On and after October 1, 1999, each rate of tax specified in subsection (a)(2)(A) shall be 4.3 cents per gallon. “(2) Leaking underground storage tank trust fund financing rate.— The Leaking Underground Storage Tank Trust Fund financing rate under subsection (a)(2) shall not apply after December 31, 1995. “(e) Refunds in Certain Cases.— Under regulations prescribed by the Secretary, if any person who paid the tax imposed by this section with respect to any taxable fuel establishes to the satisfaction of the Secretary that a prior tax was paid (and not credited or refunded) with respect to such taxable fuel, then an amount equal to the tax paid by such person shall be allowed 107 STAT. 517as a refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by this section. “SEC. 4082. EXEMPTIONS FOR DIESEL FUEL. “(a) In General.— The tax imposed by section 4081 shall not apply to diesel fuel— “(1) which the Secretary determines is destined for a non-taxable use, “(2) which is indelibly dyed in accordance with regulations which the Secretary shall prescribe, and “(3) which meets such marking requirements (if any) as may be prescribed by the Secretary in regulations. Such regulations shall allow an individual choice of dye color approved by the Secretary or chosen from any list of approved dye colors that the Secretary may publish. “(b) Nontaxable Use.— For purposes of this section, the term ‘nontaxable use’ means— “(1) any use which is exempt from the tax imposed by section 4041(a)(1) other than by reason of a prior imposition of tax, “(2) any use in a train, and “(3) any use described in section 6427(b)(1) (after the application of section 6427(b)(3)). “(c) Regulations.— The Secretary shall prescribe such regulations as may be necessary to carry out this section, including regulations requiring the conspicuous labeling of retail diesel fuel pumps and other delivery facilities to assure that persons are aware of which fuel is available only for nontaxable uses. “(d) Cross Reference.— “For tax on train and certain bus uses of fuel purchased tax-free, see section 4041(a)(1). “SEC. 4063. DEFINITIONS; SPECIAL RULE; ADMINISTRATIVE AUTHORITY. “(a) Taxable Fuel.— For purposes of this subpart— “(1) In general.— The term taxable fuel’ means— “(A) gasoline, and “(B) diesel fuel. “(2) Gasoline.— The term ‘gasoline’ includes, to the extent prescribed in regulations— “(A) gasoline blend stocks, and “(B) products commonly used as additives in gasoline. For purposes of subparagraph (A), the term ‘gasoline blend stock’ means any petroleum product component of gasoline. “(3) Diesel fuel.— The term ‘diesel fuel’ means any liquid (other than gasoline) which is suitable for use as a fuel in a diesel-powered highway vehicle, a diesel-powered train, or a diesel-powered boat. “(b) Certain Uses Defined as Removal.— If any person uses taxable fuel (other than in the production of gasoline, diesel fuel, or special fuels referred to in section 4041), such use shall for the purposes of this chapter be considered a removal. “(c) Administrative Authority.— “(1) In general.— In addition to the authority otherwise granted by this title, the Secretary may in administering compliance with this subpart, section 4041, and penalties and other administrative provisions related thereto— 107 STAT. 518 “(A) enter any place at which taxable fuel is produced or is stored (or may be stored) for purposes of— “(i) examining the equipment used to determine the amount or composition of such fuel and the equipment used to store such fuel, and “(ii) taking and removing samples of such fuel, and “(B) detain, for the purposes referred in subparagraph (A), any container which contains or may contain any taxable fuel. “(2) Inspection sites.— The Secretary may establish inspection sites for purposes of carrying out the Secretary’s authority under paragraph (1)(B). “(3) Penalty for refusal of entry.— The penalty provided by section 7342 shall apply to any refusal to admit entry or other refusal to permit an action by the Secretary authorized by paragraph (1), except that section 7342 shall be applied by substituting ‘$1,000’ for ‘$500’ for each such refusal. “SEC. 4064. CROSS REFERENCES. “(1) For provisions to relieve farmers from excise tax in the case of gasoline used on the farm for farming purposes, see section 6420. “(2) For provisions to relieve purchasers of gasoline from excise tax in the case of gasoline used for certain nonhighway purposes, used by local transit systems, or sold for certain exempt purposes, see section 6421. “(3) For provisions to relieve purchasers from excise tax in the case of taxable fuel not used for taxable purposes, see section 6427. “Subpart B— Aviation Fuel “Sec. 4091. Imposition of tax. “Sec. 4092. Exemptions. “Sec. 4093. Definitions. “SEC. 4091. IMPOSITION OF TAX. “(a) Tax on Sale.— “(1) In general.— There is hereby imposed a tax on the sale of aviation fuel by the producer or the importer thereof or by any producer of aviation fuel. “(2) Use treated as sale.— For purposes of paragraph (1), if any producer uses aviation fuel (other than for a non-taxable use as defined in section 6427(1)(2)(B)) on which no tax has been imposed under such paragraph, then such use shall be considered a sale. “(b) Rate of Tax.— “(1) In general.— The rate of the tax imposed by subsection (a) shall be 21.8 cents per gallon. “(2) Leaking underground storage tank trust fund tax.— The rate of tax specified in paragraph (1) shall be increased by 0.1 cent per gallon. The increase in tax under this paragraph shall in this title be referred to as the Leaking Underground Storage Tank Trust Fund financing rate. “(3) Termination.— “(A) On and after January 1, 1996, the rate of tax specified in paragraph (1) shall be 4.3 cents per gallon. “(B) The Leaking Underground Storage Tank Fund financing rate shall not apply during any period during 107 STAT. 519which the Leaking Underground Storage Tank Trust Fund financing rate under section 4081 does not apply. “(c) Reduced Rate of Tax for Aviation Fuel in Alcohol Mixture, Etc.— Under regulations prescribed by the Secretary— “(1) In general.— The rate of tax under subsection (a) shall be reduced by 13.4 cents per gallon in the case of the sale of any mixture of aviation fuel if— “(A) at least 10 percent of such mixture consists of alcohol (as defined in section 4081(c)(3)), and “(B) the aviation fuel in such mixture was not taxed under paragraph (2). In the case of such a mixture none of the alcohol in which is ethanol, the preceding sentence shall be applied by substituting ‘14 cents’ for ‘13.4 cents’. “(2) Tax prior to mixing.— In the case of the sale of aviation fuel for use (at the time of such sale) in producing a mixture described in paragraph (1), the rate of tax under subsection (a) shall be of the rate which would (but for this paragraph) have been applicable to such mixture had such mixture been created prior to such sale. “(3) 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 a rate determined under paragraph (1) or (2) (or with respect to which a credit or payment was allowed or made by reason of section 6427(f)(1)), 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. “(4) Limitation.— In no event shall any rate determined under paragraph (1) be less than 4.3 cents per gallon. “(5) Termination.— Paragraphs (1) and (2) shall not apply to any sale after September 30, 2000. “SEC. 4092. EXEMPTIONS. “(a) Nontaxable Uses.— No tax shall be imposed by section 4091 on aviation fuel sold by a producer or importer for use by the purchaser in a nontaxable use (as defined in section 6427(1)(2)(B)). “(b) No Exemption From Certain Taxes on Fuel Used in Commercial Aviation.— In the case of fuel sold for use in commercial aviation (other than supplies for vessels or aircraft within the meaning of section 4221(a)(3)), subsection (a) shall not apply to so much of the tax imposed by section 4091 as is attributable “(1) the Leaking Underground Storage Tank Trust Fund financing rate imposed by such section, and “(2) in the case of fuel sold after September 30, 1995, 4.3 cents per gallon of the rate specified in section 4091(b)(1). For purposes of the preceding sentence, the term ‘commercial aviation’ means any use of an aircraft other than in noncommercial aviation (as defined in section 4041(c)(4)). “(c) Sales to Producer.— Under regulations prescribed by the Secretary, the tax imposed by section 4091 shall not apply to aviation fuel sold to a producer of such fuel. 107 STAT. 520 “SEC. 4093. DEFINITIONS. “(a) Aviation Fuel.— For purposes of this subpart, the term ‘aviation fuel’ means any liquid (other than any product taxable under section 4081) which is suitable for use as a fuel in an aircraft. “(b) Producer.— For purposes of this subpart— “(1) Certain persons treated as producers.— “(A) In general.— The term ‘producer’ includes any person described in subparagraph (B) and registered under section 4101 with respect to the tax imposed by section 4091. “(B) Persons described.— A person is described in this subparagraph if such person is— “(i) a refiner, blender, or wholesale distributor of aviation fuel, or “(ii) a dealer selling aviation fuel exclusively to producers of aviation fuel. “(C) Reduced rate purchasers treated as producers.— Any person to whom aviation fuel is sold at a reduced rate under this subpart shall be treated as the producer of such fuel. “(2) Wholesale distributor.— For purposes of paragraph (1), the term ‘wholesale distributor’ includes any person who sells aviation fuel to producers, retailers, or to users who purchase in bulk quantities and accept delivery into bulk storage tanks. Such term does not include any person who (excluding the term ‘wholesale distributor’ from paragraph (1)) is a producer or importer.” (b) Civil Penalty for Using Reduced-Rate Fuel for Taxable Use, Etc.— (1) In general.— Part I of subchapter B of chapter 68 (relating to assessable penalties) is amended by adding at the end thereof the following new section: “SEC. 6714. DYED FUEL SOLD FOR USE OR USED IN TAXABLE USE, ETC. “(a) Imposition of Penalty.— If— “(1) any dyed fuel is sold or held for sale by any person for any use which such person knows or has reason to know is not a nontaxable use of such fuel, “(2) any dyed fuel is held for use or used by any person for a use other than a nontaxable use and such person knew, or had reason to know, that such fuel was so dyed, or “(3) any person willfully alters, or attempts to alter, the strength or composition of any dye or marking done pursuant to section 4082 in any dyed fuel, then 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 the greater of— “(A) $1,000, or “(B) $10 for each gallon of the dyed fuel involved. “(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)(A) by the 107 STAT. 521product 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) Definitions.— For purposes of this section— “(1) Dyed fuel.— The term ‘dyed fuel’ means any dyed diesel fuel, whether or not the fuel was dyed pursuant to section 4082. “(2) Nontaxable use.— The term ‘nontaxable use’ has the meaning given such term by section 4082(b). “(d) Joint and Several Liability of Certain Officers and Employees.— If a penalty is imposed under this section on any business entity, each officer, employee, or agent of such entity who willfully participated in any act giving rise to such penalty shall be jointly and severally liable with such entity for such penalty.” (2) Clerical amendment.— The table of sections for such part I is amended by adding at the end thereof the following new item: “Sec. 6714. Dyed fuel sold for use or used in taxable use, etc.” (c) Registered Vendors To Administer Claims for Certain Refunds of Diesel Fuel.— (1) In general.— Section 6427(1) (relating to nontaxable uses of diesel fuel and aviation fuel) is amended by adding at the end the following new paragraph: “(5) Registered vendors to administer claims for refund of diesel fuel sold to farmers and state and local governments.— “(A) In general.— Paragraph (1) shall not apply to diesel fuel used— “(i) on a farm for farming purposes (within the meaning of section 6420(c)), or “(ii) by a State or local government. “(B) Payment to ultimate, registered 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) Special refund rules.— (A) Subsection (i) of section 6427 is amended by adding at the end thereof the following new paragraph: “(5) Special rule for vendor refunds.— “(A) In general.— A claim may be filed under subsection (1)(5) by any person with respect to fuel sold by such person for any period— “(i) for which $200 or more is payable under subsection (1)(5), and “(ii) which is not less than 1 week. 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.” 107 STAT. 522 (B) Paragraph (1) of section 6427(i) is amended by striking “provided in paragraphs (2), (3), and (4)” and inserting “otherwise provided in this subsection”. (C) Paragraph (2) of section 6427(k) is amended by striking “or (4)” and inserting “(4), or (5)”. (D) Paragraph (3) of section 6427(i) is amended by adding at the end thereof the following new subparagraph: “(C) 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. (d) Technical and Conforming Amendments.— (1) Sections 4101(a) and 4103 are each amended by striking “4081” and inserting “4041(a)(1), 4081”. (2) Section 4102 is amended by striking “gasoline” and inserting “any taxable fuel (as defined in section 4083)”. (3) Paragraph (1) of section 4041(a), as amended by subchapter A, is amended to read as follows: “(1) Tax on diesel fuel in certain cases.— “(A) In general.— There is hereby imposed a tax on any liquid other than gasoline (as defined in section 4083)— “(i) sold by any person to an owner, lessee, or other operator of a diesel-powered highway vehicle, a diesel-powered train, or a diesel-powered boat for use as a fuel in such vehicle, train, or boat, or “(ii) used by any person as a fuel in a diesel-powered highway vehicle, a diesel-powered train, or a diesel-powered boat unless there was a taxable sale of such fuel under clause (i). “(B) Exemption for previously taxed fuel.— 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 and the tax thereon was not credited or refunded. “(C) Rate of tax.— “(i) In general.— Except as otherwise provided in this subparagraph, the rate of the tax imposed by this paragraph shall be the rate of tax specified in section 4081(a)(2)(A) on diesel fuel which is in effect at the time of such sale or use. “(ii) Rate of tax on trains.— In the case of any sale for use, or use, of diesel fuel in a train, the rate of tax imposed by this paragraph shall be— “(I) 6.8 cents per gallon after September 30, 1993, and before October 1, 1995, “(II) 5.55 cents per gallon after September 30, 1995, and before October 1, 1999, and “(III) 4.3 cents per gallon after September 30, 1999. “(iii) Rate of tax on certain buses.— “(I) In general.— Except as provided in subclause (II), in the case of fuel sold for use or used in a use described in section 6427(b)(1) (after the application of section 6427(b)(3)), the rate of tax imposed by this paragraph shall be 7.3 cents per gallon (4.3 cents per gallon after September 30, 1999). 107 STAT. 523 “(II) School bus and intracity transportation.— No tax shall be imposed by this paragraph on any sale for use, or use, described in subparagraph (B) or (C) of section 6427(b)(2). “(D) Diesel fuel used in motorboats.— In the case of any sale for use, or use, of fuel in a diesel-powered motorboat— “(i) effective during the period after September 30, 1999, and before January 1, 2000, the rate of tax imposed by this paragraph is 24.3 cents per gallon, and “(ii) the termination of the tax under subsection (d) shall not occur before January 1, 2000.” (4) Paragraph (2) of section 4041(a) is amended— (A) by striking “or paragraph (1) of this subsection”, and (B) by striking the last sentence and inserting the following new flush sentence: “The rate of the tax imposed by this paragraph shall be the rate of tax specified in section 4081(a)(2)(A) on gasoline which is in effect at the time of such sale or use.” (5) (A) Subparagraph (B) of section 4041(b)(1) is amended by striking “paragraph (1)(B) or (2)(B)” and inserting “paragraph (1)(B), (2)(B), or (3)(A)(ii)” and by inserting before the period “(if any)”. (B) Subparagraph (C) of section 4041(b)(1) is amended by inserting before the period “; except that such term shall not, for purposes of subsection (a)(1), include use in a diesel-powered train”. (C) Clause (i) of section 4041(b)(2)(A) is amended by striking “Highway Trust Fund financing”. (6) Paragraph (1) of section 4041(c), as amended by subpart A, is amended by striking the next to the last sentence and inserting the following new flush sentence: “The rate of the tax imposed by this paragraph shall be the rate of tax specified in section 4091(b)(1) which is in effect at the time of such sale or use.” (7) Paragraph (2) of section 4041(c) is amended by striking “any product taxable under section 4081” and inserting “gasoline (as defined in section 4083)”. (8) Paragraph (5) of section 4041(c) is amended by adding at the end thereof the following: “The termination under the preceding sentence shall not apply to so much of the tax imposed by paragraph (1) as does not exceed 4.3 cents per gallon”. (9) Subsection (d) of section 4041 is amended by striking paragraph (2) and by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively. (10) Paragraph (2) of section 4041(d), as redesignated by the preceding paragraph, is amended by striking “(other than any product taxable under section 4081)” and inserting “(other than gasoline (as defined in section 4083))”. (11) Subparagraph (A) of section 4041(k)(1) is amended— (A) by striking “Highway Trust Fund financing”, and (B) by striking “sections 4081(c) and 4091(c), as the case may be” and inserting “section 4081(c)”. 107 STAT. 524 (12) Subparagraph (B) of section 4041(k)(1) is amended by striking “4091(d)” and inserting “4091(c)”. (13) Subparagraphs (A) and (B) of section 4041(m)(1) are amended to read as follows: “(A) the rate of the tax imposed by subsection (a)(2) shall be— “(i) 11.3 cents per gallon after September 30, 1993, and before October 1, 1999, and “(ii) 4.3 cents per gallon after September 30, 1999, and “(B) the rate of the tax imposed by subsection (c)(1) shall be the comparable rate under section 4091(c)(1).” (14) Section 6206 is amended by striking “4041 or 4091” and inserting “4041, 4081, or 4091”. (15) The heading for subsection (f) of section 6302 is amended by inserting “and Diesel Fuel” after “Gasoline”. (16) Paragraph (1) of section 6412(a) is amended by striking “gasoline” each place it appears (including the heading) and inserting “taxable fuel”. (17) (A) Subparagraph (A) of section 6416(a)(4) is amended by striking “product” each place it appears and inserting “gasoline”. (B) Subparagraph (B) of section 6416(a)(4) is amended— (i) by striking “section 4092(b)(2)” and inserting “section 4093(b)(2)”, and (ii) by striking all that follows “substituting” and inserting “‘any gasoline taxable under section 4081’ for ‘aviation fuel’ therein).” (18) The material following the first sentence of section 6416(b)(2) is amended by inserting “any tax imposed under section 4041(a)(1) or 4081 on diesel fuel and” after “This paragraph shall not apply in the case or”. (19) (A) Subparagraph (A) of section 6416(b)(3) is amended by striking “gasoline taxable under section 4081 and other than any fuel taxable under section 4091” and inserting “any fuel taxable under section 4081 or 4091”. (B) Subparagraph (B) of section 6416(b)(3) is amended by striking “gasoline taxable under section 4081 or any fuel taxable under section 4091, such gasoline or fuel” and inserting “any fuel taxable under section 4081 or 4091, such fuel”. (20) Sections 6420(c)(5) and 6421(e)(1) are each amended by striking “section 4082(b)” and inserting “section 4083(a)”. (21) Subsections (a) and (c) of section 6427 are each amended by striking “section 4041(a) or (c)” and inserting “paragraph (2) or (3) of section 4041(a) or section 4041(c)”. (22) Subsection (c) of section 6421 is amended by adding at the end thereof the following: “The preceding sentence shall apply notwithstanding paragraphs (2)(A) and (3) of subsection (f).” (23) Subparagraph (B) of section 6421(f)(2) is amended by inserting before the period “and, in the case of fuel purchased after September 30, 1995, at so much of the rate specified in section 4081(a)(2)(A) as does not exceed 4.3 cents per gallon”. (24) Paragraph (3) of section 6421(f), as amended by subpart A, is amended to read as follows: 107 STAT. 525 “(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— “(A) the Leaking Underground Storage Tank Trust Fund financing rate under section 4081, and “(B) so much of the rate specified in section 4081(a)(2)(A) as does not exceed— “(i) 6.8 cents per gallon after September 30, 1993, and before October 1, 1995, “(ii) 5.55 cents per gallon after September 30, 1995, and before October 1, 1999, and “(iii) 4.3 cents per gallon after September 30, 1999.” (25) Subsection (b) of section 6427 is amended— (A) by striking “if any fuel” in paragraph (1) and inserting “if any fuel other than gasoline (as defined in section 4083(a))”, and (B) by striking “4091” each place it appears and inserting “4081”. (26) (A) Paragraph (1) of section 6427(f) is amended by striking “, 4091(c)(1)(A), or 4091(d)(1)(A)” and inserting “or 4091(c)(1)(A)”. (B) Paragraph (2) of section 6427(f) is amended to read as follows: “(2) Definitions.— For purposes of paragraph (1)— “(A) Regular tax rate.— The term ‘regular tax rate’ means— “(i) in the case of gasoline or diesel fuel, the aggregate rate of tax imposed by section 4081 determined without regard to subsection (c) thereof, and “(ii) in the case of aviation fuel, the aggregate rate of tax imposed by section 4091 determined without regard to subsection (c) thereof. “(B) Incentive tax rate.— The term Incentive tax rate’ means— “(i) in the case of gasoline or diesel fuel, the aggregate rate of tax imposed by section 4081 with respect to fuel described in subsection (c)(2) thereof, and “(ii) in the case of aviation fuel, the aggregate rate of tax imposed by section 4091 with respect to fuel described in subsection (c)(2) thereof.” (27) Subsection (h) of section 6427 is amended by striking “section 4082(b)” and inserting “section 4083(a)(2)”. (28) Paragraph (3) of section 6427(i) is amended— (A) by striking “gasohol” in the heading and inserting “alcohol mixture”, and (B) by striking “gasoline used to produce gasohol (as defined in section 4081(c)(1))” in subparagraph (A) and inserting “gasoline or diesel fuel used to produce a qualified alcohol mixture (as defined in section 4081(c)(3))”. (29) Paragraph (1) of section 6427(j) is amended by striking “section 4041” and inserting “sections 4041, 4081, and 4091”. (30) The heading of paragraph (4) of section 6427(i) is amended by inserting “4081 or”before “4091”. (31) So much of subsection (1) of section 6427, as previously amended by this part, as precedes paragraph (5) is amended to read as follows: 107 STAT. 526 “(l) Nontaxable Uses of Diesel Fuel and Aviation Fuel.— “(1) In general.— Except as otherwise provided in this subsection and in subsection (k), if— “(A) any diesel fuel on which tax has been imposed by section 4041 or 4081, or “(B) any aviation fuel on which tax has been imposed by section 4091, 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, 4081, or 4091, as the case may be. “(2) Nontaxable use.— For purposes of this subsection, the term ‘nontaxable use’ means— “(A) in the case of diesel fuel, any use which is exempt from the tax imposed by section 4041(a)(1) other than by reason of a prior imposition of tax, and “(B) in the case of aviation fuel, any use which is exempt from the tax imposed by section 4041(c)(1) other than by reason of a prior imposition of tax. “(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 with respect to— “(A) the Leaking Underground Storage Tank Trust Fund financing rate under sections 4041 and 4081, and “(B) so much of the rate specified in section 4081(a)(2)(A) as does not exceed— “(i) 6.8 cents per gallon after September 30, 1993, and before October 1, 1995, “(ii) 5.55 cents per gallon after September 30, 1995, and before October 1, 1999, and “(iii) 4.3 cents per gallon after September 30, 1999. The preceding sentence shall not apply in the case of fuel sold for exclusive use by a State or any political subdivision thereof. “(4) No refund of certain taxes on fuel used in commercial aviation.— In the case of fuel used in commercial aviation (as defined in section 4092(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 4091 as is attributable to— “(A) the Leaking Underground Storage Tank Trust Fund financing rate imposed by such section, and “(B) in the case of fuel purchased after September 30, 1995, so much of the rate of tax specified in section 4091(b)(1) as does not exceed 4.3 cents per gallon.” (32) Section 9502 is amended by adding at the end thereof the following new subsection: “(f) Definition of Airport and Airway Trust Fund Financing Rate.— For purposes of this section— “(1) In general.— Except as otherwise provided in this subsection, the Airport and Airway Trust Fund financing rate is— “(A) in the case of fuel used in an aircraft in non-commercial aviation (as defined in section 4041(c)(4)), 17.5 cents per gallon, and 107 STAT. 527 “(B) in the case of fuel used in an aircraft other than in noncommercial aviation (as so defined), zero. “(2) Alcohol fuels.— If the rate of tax on any fuel is determined under section 4091(c), the Airport and Airway Trust Fund financing rate is the excess (if any) of the rate of tax determined under section 4091(c) over 4.4 cents per gallon (10⁄9 of 4.4 cents per gallon in the case of a rate of tax determined under section 4091(c)(2)). “(3) Termination.— Notwithstanding the preceding provisions of this subsection, the Airport and Airway Trust Fund financing rate is zero with respect to tax received after December 31, 1995.” (33) Paragraph (2) of section 9502(b) is amended by striking “(to the extent attributable to the Highway Trust Fund financing rate and the deficit reduction rater and inserting “(to the extent of 14 cents per gallon)”. (34) Paragraph (1) of section 9503(b) is amended— (A) by striking “gasoline),” in subparagraph (E) and inserting “gasoline and diesel fuel), and”, (B) by striking subparagraph (F), and (C) by redesignating subparagraph (G) as subparagraph (F). (35) (A) Subparagraph (B) of section 9503(b)(4) is amended by striking “, 4081, and 4091” and inserting “and 4081” and by striking “rates under such sections” and inserting “rate”. (B) Subparagraph (C) of section 9503(b)(4), as amended by subchapter A, is amended by striking “4091” and inserting “4081”. (36) Paragraph (5) of section 9503(b) is amended by striking “, (E), and (F)” and inserting “and (E)”. (37) Subparagraph (D) of section 9503(c)(6) is amended by striking “, 4081, and 4091” and inserting “and 4081”. (38) Subparagraph (D) of section 9503(c)(4) is amended by striking “rates under such sections” and inserting “rate”. (39) Subparagraph (B) of section 9503(c)(5) is amended by striking “rate under such section” and inserting “rate”. (40) Paragraph (2) of section 9503(e) is amended— (A) by striking “, 4081, and 4091” and inserting “and 4081”, and (B) by striking “, 4081, or 4091” and inserting “or 4081”. (41) Section 9503 is amended by adding at the end thereof the following new subsection: “(f) Definition of Highway Trust Fund Financing Rate.— For purposes of this section— “(1) In general.— Except as otherwise provided in this subsection, the Highway Trust Fund financing rate is— “(A) in the case of gasoline and special motor fuels, 11.5 cents per gallon (14 cents per gallon after September 30, 1995), and “(B) in the case of diesel fuel, 17.5 cents per gallon (20 cents per gallon after September 30, 1995). “(2) Certain uses.— “(A) Trains.— In the case of fuel used in a train, the Highway Trust Fund financing rate is zero. “(B) Certain buses.— In the case of diesel fuel used in a use described in section 6427(b)(1) (after the applica-107 STAT. 528tion of section 6427(b)(3)), the Highway Trust Fund financing rate is 3 cents per gallon. “(C) Certain boats.— In the case of diesel fuel used in a boat described in clause (iv) of section 6421(e)(2)(B), the Highway Trust Fund financing rate is zero. “(D) Compressed natural gas.— In the case of the tax imposed by section 4041(a)(3), the Highway Trust Fund financing rate is zero. “(E) Certain other nonhighway uses.— In the case of gasoline and special motor fuels used as described in paragraph (4)(D), (5)(B), or (6)(D) of subsection (c), the Highway Trust Fund financing rate is 11.5 cents per gallon; and, in the case of diesel fuel used as described in subsection (c)(6)(D), the Highway Trust Fund financing rate is 17.5 cents per gallon. “(3) Alcohol fuels.— “(A) In general.— If the rate of tax on any fuel is determined under section 4041(b)(2)(A), 4041(k), or 4081(c), the Highway Trust Fund financing rate is the excess (if any) of the rate so determined over— “(i) 6.8 cents per gallon after September 30, 1993, and before October 1, 1999, “(ii) 4.3 cents per gallon after September 30, 1999. In the case of a rate of tax determined under section 4081(c), the preceding sentence shall be applied by increasing the rates specified in clauses (i) and (ii) by 0.1 cent. “(B) Fuels used to produce mixtures.— In the case of a rate of tax determined under section 4081(c)(2), subparagraph (A) shall be applied by substituting rates which are ’% of the rates otherwise applicable under clauses (i) and (ii) of subparagraph (A). “(C) Partially exempt methanol or ethanol fuel.— In the case of a rate of tax determined under section 404l(m), the Highway Trust Fund financing rate is the excess (if any) of the rate so determined over— “(i) 5.55 cents per gallon after September 30, 1993, and before October 1, 1995, and “(ii) 4.3 cents per gallon after September 30, 1995. “(4) Termination.— Notwithstanding the preceding provisions of this subsection, the Highway Trust Fund financing rate is zero with respect to taxes received in the Treasury after June 30, 2000.” (42) Subsection (b) of section 9508 is amended— (A) by inserting “and diesel fuel” after “gasoline” in paragraph (2), (B) by striking “diesel fuel and” in paragraph (3), and (C) by striking “4091” in the last sentence, as added by subtitle A and inserting “4081”. (43) The table of subparts for part III of subchapter A of chapter 32 is amended by striking the items relating to subparts A and B and inserting the following new items: “Subpart A. Gasoline and diesel fuel. “Subpart B. Aviation fuel.” (e) Effective Date.— The amendments made by this section shall take effect on January 1, 1994.