HR 3497 IHCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to reduce the Federal tax on fuels by the amount of any increase in the rate of tax on such fuel by the States.CommentsClose CommentsPermalink

September 7, 2007

Mr. GARRETT of New Jersey (for himself, Mr. BARRETT of South Carolina, Mr. MARCHANT, Mr. CARTER, Mr. HENSARLING, Ms. FALLIN, Mr. ISSA, Mr. SHADEGG, Mr. BARTLETT of Maryland, Mrs. MYRICK, Mr. FRANKS of Arizona, Mr. DANIEL E. LUNGREN of California, Mr. PRICE of Georgia, Mr. FEENEY, Mr. HOEKSTRA, Mrs. MUSGRAVE, Mr. PITTS, Mr. LAMBORN, Mr. WALBERG, Mr. GINGREY, Mr. FLAKE, and Mr. CHABOT) introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to reduce the Federal tax on fuels by the amount of any increase in the rate of tax on such fuel by the States.CommentsClose CommentsPermalink

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

SECTION 1. SHORT TITLE; ETC.

(a) Short Title- This Act may be cited as the `Surface Transportation and Taxation Equity Act' or as the `STATE Act'.CommentsClose CommentsPermalink





(b) Findings- The Congress finds the following:CommentsClose CommentsPermalink





(1) Today's surface transportation problems are largely local and regional in nature.CommentsClose CommentsPermalink





(2) The original Federal goal of creating an interstate system was met in the early 1980s.CommentsClose CommentsPermalink





(3) State and local governments are outspending the Federal Government on transportation by a ratio of 2 to 1.CommentsClose CommentsPermalink





(4) The amount of traffic experiencing congested conditions in the peak travel periods has doubled in 20 years from 33 percent in 1982 to 67 percent in 2002.CommentsClose CommentsPermalink





(5) More than $63,000,000,000 is wasted each year due to congestion in the 85 most populated areas in the country.CommentsClose CommentsPermalink





(c) Purposes- The purposes of this Act are to--CommentsClose CommentsPermalink





(1) return primary transportation program responsibility and taxing authority to the States,CommentsClose CommentsPermalink





(2) free States' transportation dollars from Federal micromanagement, earmarking, and budgetary pressures,CommentsClose CommentsPermalink





(3) enable decisions regarding which infrastructure projects will be built, how they will be financed, and how they will be regulated to be made by persons best able to make those decisions,CommentsClose CommentsPermalink





(4) eliminate the current system in which a Federal gasoline tax is sent to Washington and through a cumbersome Department of Transportation bureaucracy,CommentsClose CommentsPermalink





(5) prohibit the Federal Government from forcing unwanted mandates on States by threatening to withhold transportation money, andCommentsClose CommentsPermalink





(6) achieve measurable congestion mitigation and infrastructure preservation and safety in a cost effective way subject to available resources.CommentsClose CommentsPermalink

SEC. 2. FEDERAL TAX ON FUELS DECREASED BY AMOUNT OF INCREASE IN STATE TAX ON FUEL.

(a) In General- Subpart B of part III of subchapter A of chapter 32 of the Internal Revenue Code of 1986 (relating to special provisions applicable to fuels tax) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

`SEC. 4106. REDUCTION IN RATES OF TAX BASED ON INCREASE IN STATE TAX RATE.

`(a) In General- Under regulations prescribed by the Secretary, the rate of tax imposed under section 4081 with respect to any fuel and the rate of tax imposed under section 4041 with respect to any liquid shall be decreased, but not below 2 cents per gallon, by the applicable State tax rate increase with respect to such fuel or liquid.CommentsClose CommentsPermalink





`(b) Applicable State Tax Rate Increase- For purposes of this section, the term `applicable State tax rate increase' means, with respect to any fuel or liquid, the excess, as periodically determined under tables prescribed by the Secretary, of--CommentsClose CommentsPermalink





`(1) the rate of tax imposed by the applicable State on the sale or use of such fuel or liquid, overCommentsClose CommentsPermalink





`(2) the rate of tax imposed by the applicable State on the sale or use of such fuel or liquid as of March 5, 2007.CommentsClose CommentsPermalink





Any increase in the rate of tax imposed by any applicable State on the sale or use of any fuel or liquid shall be taken into account under this subsection only if State law provides that such increase is to be taken into account under this subsection.CommentsClose CommentsPermalink





`(c) Applicable State- For purposes of this section, the term `applicable State' means the State which is determined under regulations prescribed by the Secretary as--CommentsClose CommentsPermalink





`(1) in the case of a liquid to which section 4041 applies, the State in which such liquid is sold or used, orCommentsClose CommentsPermalink





`(2) in the case of a fuel to which section 4081 applies, the State in which such fuel is most likely to be sold or used.CommentsClose CommentsPermalink





`(d) Requirement To Maintain Interstate Highway System- Subsection (a) shall not apply with respect to any fuel or liquid if the applicable State with respect to such fuel or liquid has not entered into an agreement with the Secretary of Transportation under which such State has agreed to provide for the proper maintenance of that portion of the interstate highway system which is within such State.'.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 9503 of such Code is amended by striking subsection (d).CommentsClose CommentsPermalink





(2)(A) Paragraph (4) of section 9503(e) of such Code is amended to read as follows:CommentsClose CommentsPermalink





`(6) REDUCTION IN RATE OF TRANSFER BASED ON REDUCTION IN STATE TAX RATES-CommentsClose CommentsPermalink





`(A) IN GENERAL- There shall be substituted for each amount in paragraph (2) an amount which bears the same ratio to such amount as the aggregate reduced tax rate bears to the aggregate unreduced tax rate.CommentsClose CommentsPermalink





`(B) AGGREGATE REDUCED TAX RATE- For purposes of subparagraph (A), the term `aggregate reduced tax rate' means, with respect to any amount for any calendar year, the amount of tax that the Secretary estimates will be imposed with respect to the liquid or fuel to which such amount relates for such year after application of section 4106.CommentsClose CommentsPermalink





`(C) AGGREGATE UNREDUCED TAX RATE- For purposes of subparagraph (A), the term `aggregate unreduced tax rate' means, with respect to any amount for any calendar year, the amount of tax that the Secretary estimates would have been imposed with respect to the liquid or fuel to which such amount relates for such year if section 4106 did not apply for such year.'.CommentsClose CommentsPermalink





(B) Subparagraph (A) of section 9503(e)(2) of such Code is amended by striking `sentence' and inserting `subsection'.CommentsClose CommentsPermalink





(3) The table for section for subpart B of part III of subchapter A of chapter 32 of such Code is amended by adding at the end the following new item:CommentsClose CommentsPermalink





`Sec. 4106. Reduction in rates of tax based on increase in State tax rate.'.CommentsClose CommentsPermalink





(c) Effective Date- The amendment made by this section shall apply to liquid or fuel removed, entered, sold, or used after the date of the enactment of this Act.CommentsClose CommentsPermalink