To amend the Internal Revenue Code of 1986 to repeal the 4.3-cent motor fuel excise taxes on railroads and inland waterway transportation which remain in the general fund of the Treasury.

February 5, 2003

Mr. HULSHOF (for himself, Mr. JEFFERSON, Mr. MCCRERY, and Mr. COLLINS) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to repeal the 4.3-cent motor fuel excise taxes on railroads and inland waterway transportation which remain in the general fund of the Treasury.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Transportation Tax Equity and Fairness Act'.

SEC. 2. REPEAL OF 4.3-CENT MOTOR FUEL EXCISE TAXES ON RAILROADS AND INLAND WATERWAY TRANSPORTATION WHICH REMAIN IN GENERAL FUND.

(a) TAXES ON TRAINS-

(1) IN GENERAL- Subparagraph (A) of section 4041(a)(1) of the Internal Revenue Code of 1986 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) of such Code is amended by striking clause (ii) and by redesignating clause (iii) as clause (ii).

(B) Subparagraph (C) of section 4041(b)(1) of such Code is amended by striking all that follows `section 6421(e)(2)' and inserting a period.

(C) Subsection (d) of section 4041 of such Code 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 (e) of section 4082 of such Code is amended by striking `section 4041(a)(1)' and inserting `subsections (d)(3) and (a)(1) of section 4041, respectively'.

(E) Paragraph (3) of section 4083(a) of such Code is amended by striking `or a diesel-powered train'.

(F) Paragraph (3) of section 6421(f) of such Code 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) of such Code 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) of such Code 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) of such Code is amended by striking subparagraph (C).

(c) EFFECTIVE DATE- The amendments made by this section shall take effect on the date of the enactment of this Act.

END