Highway Trust Fund and Taxes

Highway Trust Fund and Taxes
Current Law	Administration Proposal H.R. 2088 & S. 1072 as Modified SAFETEA of 2003	House H.R. 3 as Passed House TEA-LU	Senate H.R. 3 as Passed Senate SAFETEA of 2005
Extension of Highway Trust Fund and Taxes
Except for 4.3 cents per gallon of the fuel taxes, imposition of highway user taxes ends 9/30/2005. [26 USC 4041, 4081, et. al]	Extends imposition of highway user taxes, generally at current law rates, through 9/30/2011. [9002]	Same as Administration bill [10002]	Same as Administration bill. (See discussion of alternative fuels below) [5101]
Excise tax rates for "alternative fuels" are as follows: Liquefied petroleum gas, 13.6 cents per gallon; liquefied natural gas, 11.9 cents per gallon; compressed natural gas, 4.3 cents per thousand cubic feet; other fuels, 18.4 cents per gallon.	Same as current law	Same as current law	Effective 10/1/2005, excise tax rates for "alternative fuels" are as follows: Liquefied petroleum gas, 13.6 cents per gallon; liquefied natural gas, 24.4 cents per gallon; compressed natural gas or hydrogen, 24.4 cents per gasoline-equivalent gallon; P-Series fuels, 18.4 cents per gallon. Adds new excise tax credits, paid from the General Fund, for alternative fuels. [5204]
The deposit of amounts equivalent to the proceeds of highway user taxes into the Highway Trust Fund expires after 9/30/2005. [26 USC 9503]. Proceeds of the gas guzzler tax are deposited in the General Fund.	The deposit of amounts equivalent to the proceeds of highway user taxes into the Highway Trust Fund is extended through 9/30/2011. Proceeds of gas guzzler tax are deposited in the General Fund.	Same as Administration bill [10002(c)]	Same as Administration bill, except that proceeds of gas guzzler tax imposed for the period July 1, 2005 through September 30, 2009 are to be deposited in the Highway Account of the Highway Trust Fund. [5101, 5602]
Generally, the Mass Transit Account of the HTF receives 2.86 cents per gallon of the Federal motor fuel excise taxes and the Leaking Underground Storage Tank Trust Fund receives 0.1 cent. The Highway Account generally receives the remainder of the fuel tax and all of the truck tax proceeds. [26 USC 9503(b) & (e)]	Same as current law	Same as current law	Same as current law
Authority to expend HTF monies for authorized purposes expires after 6/30/2004. Transfers of tax receipts to the HTF cease if expenditures continue after that date. [26 USC 9503(c)]	Authority to expend HTF monies for authorized purposes is extended through 9/30/2011. Transfers of tax receipts to the HTF cease if expenditures continue after that date. [9002(d)]	Authority to expend HTF monies for authorized purposes is extended through 9/30/2009. Transfers of tax receipts to the HTF cease if expenditures continue after that date.[10002(d)]	Same as House bill. [5101]
Authority for HTF to reimburse the General Fund for refunds and credits for nontaxable fuel expires after 6/30/2006. [26 USC 9503(c)(2)]	No change to current law [As included in FY 2006 President's Budget]	Extends authority to reimburse the General Fund through 6/30/2012. [10002(c)]	Authority for HTF to reimburse the General Fund for refunds and credits for nontaxable fuel expires for claims related to taxable periods beginning April 1, 2005 and resumes October 1, 2009.
The transfer of motorboat and other small engine gasoline taxes from the HTF to the Aquatic Resources Trust Fund expires after 9/30/2005. [26 USC 9503(b)(4)]	The transfer of motorboat and other small engine gasoline taxes from the HTF to the Aquatic Resources Trust Fund is extended through 9/30/2011.	Same as Administration bill [10002(c)(2)]	Extends the transfers through September 30, 2011. Renames the Aquatic Resources Trust Fund to Sport Fish Restoration and Boating Trust Fund and modifies operation of the Fund. [5211]
Tax Administration Provisions
	No change to current law.	No change to current law.	Kerosene taxation-Unless placed directly into the fuel tank of an aircraft, kerosene removed from a terminal is taxed at the full highway diesel rate of 24.4 cents per gallon. If fuel is later shown to have been used for aviation purposes, refunds of the excess tax will paid (aviation uses are taxed at lower rates) and the unrefunded portion of the tax on such gallons will be transferred to the Airport and Airway Trust Fund. [5611]
Generally, gasoline blendstocks and kerosene are taxable when removed from bulk storage, but IRS regulations have exempted some kerosene 26 USC 4083	Same as current law	Same as current law	Same as current law except that IRS is directed in its application of 26 USC 4083 to prohibit the removal of gasoline blendstocks from bulk storage without payment of tax and to include mineral spirits in the definition of kerosene. [5618]
Clear (undyed) diesel fuel may be purchased on a tax excluded basis for farm use and the ultimate vendor may collect the tax refund.	Same as current law	Same as current law	Only dyed diesel may be purchased on a tax excluded basis for farm use. [5612]
Generally, State and local governments, non-profit educational organizations, certain transit uses, off-highway business use of gasoline and off-highway use of diesel are exempt from the highway-user taxes.	Same as current law	Same as current law	Tax exempt status-Same as current law except that, to qualify for an exemption from highway excise taxes, State and local government entities must be certified by the State. Also, clarifies that only schools, not all non-profit educational organizations, are eligible for exemption and such organizations must be certified to be in good standing by the State in which they provide educational services. [5614] Creates exemptions from the truck and trailer retail tax for tractors weighing 19,500 pounds or less and equipment for transporting bulk beds of farm crops. [5202-5203]
No comparable provision	No comparable provision	No comparable provision	The Department of Homeland Security is to work with the Treasury Department to develop ability for DHS to electronically share information it receives on cargoes of taxable fuel. [5616]
Vessels (ships and barges) must be registered with the IRS if they carry tax exempt bulk transfers of fuel. By IRS regulation, deep draft vessels are exempt from the registration requirement.	Same as current law	Same as current law	Same as current law, except directs IRS to revise its regulations to require registration of deep draft vessels that carry bulk tax exempt fuel. [5617]
Other Highway Trust Fund Provisions
Effective 10/1/1998, HTF cash balances are invested in non-interest bearing securities of the U.S. Government. [26 USC 9503(f)]	Same as current law	Same as current law	Same as current law
Under a calculation known as the Byrd Test, highway apportionments must be reduced if unfunded highway authorization exceed projected receipts to the Highway Account of the Highway Trust Fund for the next 2 years. [26 USC 9503(d)]	Same as current law	Same as current law	Same as current law except that 4 years of future receipts (rather than 2 years) are counted in the calculation. For purposes of the 4-year outlook, taxes are assumed to be extended beyond their scheduled expiration date. [5102]
Studies and Reports
No comparable provision	No comparable provision	National Commission on Future Revenue Sources to Support the Highway Trust Fund - Establishes Commission funded at $1.5M for each of FYs 2005 and 2006. Commission to make two studies to evaluate short term and long term sources of revenue to support the HTF, including recommendations and transition strategies. [1123(a)]	National Surface Transportation Infrastructure Financing Commission - Establishes Commission to investigate flow of HTF revenues and the ability of such revenues to meet future needs through 2015 and to make recommendations as to policies that could be adopted by Congress to achieve various levels of revenue. [5302]
No comparable provision	No comparable provision	No comparable provision	Review of Funding Mechanisms - Study by the Western Transportation Institute of the College of Engineering at Montana State University, funded at $1 M, of funding mechanisms of other industrialized nations and examination of the viability of proposals such as congestion pricing, greater reliance on tolls, privatization of facilities, and other funding proposals. [5303]
No comparable provision	No comparable provision	No comparable provision	Test of Mileage Based Highway Use Tax - Study by Public Policy Center at the University of Iowa, funded at $16.5 M, of use of on-board computers linked to satellites to measure mileage traveled and compute the appropriate highway use tax for each of Federal, State and local government entities. [5303]
No comparable provision	No comparable provision	No comparable provision	Highway Fuels Used by Trucks for Non-Transportation Purposes- Treasury Secretary to study, in consultation with Transportation Secretary to determine the amount of tax paid fuel consumed per vehicle used by the propulsion engine to power and operate equipment attached to trucks. Treasury Secretary to evaluate the feasibility of exempting such fuel for classes where non-propulsive fuel use exceeds 50 percent. [5307]

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