I 

108TH CONGRESS 

1ST SESSION H. R. 497

To amend the Internal Revenue Code of 1986 to suspend all motor fuel 

taxes for six months, and to permanently repeal the 4.3-cent per gallon 

increases in motor fuel taxes enacted in 1993. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 29, 2003

Mr. SENSENBRENNER (for himself and Mr. SMITH of Michigan) introduced 

the following bill; which was referred to the Committee on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 to suspend 

all motor fuel taxes for six months, and to permanently 

repeal the 4.3-cent per gallon increases in motor fuel 

taxes enacted in 1993.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Freedom from Unfair 

5 Energy Levy Act’’. 

6 SEC. 2. SIX-MONTH SUSPENSION OF FUEL TAXES. 

7 (a) SIX-MONTH SUSPENSION OF FUEL TAXES.—Sec8 tion 4081 of the Internal Revenue Code of 1986 (relating 
2

•HR 497 IH 

1 to imposition of tax on gasoline, diesel fuel, and kerosene) 

2 is amended by adding at the end the following new sub3 section: 

4 ‘‘(f) TEMPORARY SUSPENSION OF FUEL TAXES.—

5 ‘‘(1) IN GENERAL.—During the suspension pe6 riod, each rate of tax referred to in paragraph (2) 

7 shall be reduced to zero. 

8 ‘‘(2) RATES OF TAX.—The rates of tax referred 

9 to in this paragraph are the rates of tax otherwise 

10 applicable under—

11 ‘‘(A) subsection (a)(2)(A) (relating to gas12 oline, diesel fuel, and kerosene), 

13 ‘‘(B) sections 4091(b)(3)(A) (relating to 

14 aviation fuel), 

15 ‘‘(C) section 4042(b)(2)(C) (relating to 

16 fuel used on inland waterways), 

17 ‘‘(D) paragraph (1), (2), or (3) of section 

18 4041(a) (relating to diesel fuel, special fuels, 

19 and compressed natural gas), and 

20 ‘‘(E) section 4041(m)(1)(A)(i) (relating to 

21 certain methanol or ethanol fuels). 

22 ‘‘(3) SUSPENSION PERIOD.—For purposes of 

23 this subsection, the term ‘suspension period’ means 

24 the 180-day period beginning on the 30th day after 

25 the date of the enactment of this subsection.’’
3

•HR 497 IH 

1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall take effect on the date of the enactment 

3 of this Act. 

4 SEC. 3. REPEAL OF 1993 INCREASES IN MOTOR FUEL 

5 TAXES. 

6 (a) HIGHWAY GASOLINE.—Clause (i) of section 

7 4081(a)(2)(A) of the Internal Revenue Code of 1986 is 

8 amended by striking ‘‘18.3 cents’’ and inserting ‘‘14 

9 cents’’. 

10 (b) AVIATION GASOLINE.—Clause (ii) of section 

11 4081(a)(2)(A) of such Code is amended by striking ‘‘19.3 

12 cents’’ and inserting ‘‘15 cents’’. 

13 (c) DIESEL FUEL AND KEROSENE.—Clause (iii) of 

14 section 4081(a)(2)(A) of such Code is amended by striking 

15 ‘‘24.3 cents’’ and inserting ‘‘20 cents’’. 

16 (d) AVIATION FUEL.—Paragraph (1) of section 

17 4091(b) of such Code is amended by striking ‘‘21.8 cents’’ 

18 and inserting ‘‘17.5 cents’’. 

19 (e) FUEL USED ON INLAND WATERWAYS.—

20 (1) Paragraph (1) of section 4042(b) of such 

21 Code is amended by adding ‘‘and’’ at the end of sub22 paragraph (A), by striking ‘‘, and’’ at the end of 

23 subparagraph (B) and inserting a period, and by 

24 striking subparagraph (C). 
4

•HR 497 IH 

1 (2) Paragraph (2) of section 4042(b) of such 

2 Code is amended by striking subparagraph (C). 

3 (f) TECHNICAL AMENDMENTS.—

4 (1) Subparagraph (B) of section 40(e)(1) of 

5 such Code is amended by striking ‘‘during which the 

6 rates of tax under section 4081(a)(2)(A) are 4.3 

7 cents per gallon’’ and inserting ‘‘during which the 

8 rate of tax under section 4081(a)(2)(A)(i) does not 

9 apply’’. 

10 (2) Subparagraph (A) of section 4041(a)(1) of 

11 such Code is amended by striking ‘‘or a diesel-pow12 ered train’’ each place it appears and by striking ‘‘or 

13 train’’. 

14 (3) Subparagraph (C) of section 4041(a)(1) of 

15 such Code is amended by striking clause (ii) and by 

16 redesignating clause (iii) as clause (ii). 

17 (4) Subclause (I) of section 4041(a)(1)(C)(ii) of 

18 such Code, as redesignated by paragraph (3), is 

19 amended by striking ‘‘7.3 cents’’ and inserting ‘‘3 

20 cents’’ and by striking ‘‘4.3 cents per gallon’’ and 

21 inserting ‘‘zero’’. 

22 (5) Subsection (a) of section 4041 of such Code 

23 is amended by striking paragraph (3). 
5

•HR 497 IH 

1 (6) Subparagraph (C) of section 4041(b)(1) of 

2 such Code is amended by striking all that follows 

3 ‘‘section 6421(e)(2)’’ and inserting a period. 

4 (7) Subparagraph (B) of section 4041(a)(2) of 

5 such Code is amended by striking all that follows 

6 clause (i) and inserting the following new clauses: 

7 ‘‘(ii) 10.4 cents per gallon in the case 

8 of liquefied petroleum gas, and 

9 ‘‘(iii) 9.1 cents per gallon in the case 

10 of liquefied natural gas.’’

11 (8) Paragraph (3) of section 4041(c) of such 

12 Code is amended to read as follows: 

13 ‘‘(3) TERMINATION.—The rate of the taxes im14 posed by paragraph (1) shall be zero after Sep15 tember 30, 2007.’’

16 (9) Subsection (d) of section 4041 of such Code 

17 is amended by redesignating paragraph (3) as para18 graph (4) and by inserting after paragraph (2) the 

19 following new paragraph: 

20 ‘‘(3) DIESEL FUEL USED IN TRAINS.—There is 

21 hereby imposed a tax of 0.1 cent per gallon on any 

22 liquid other than gasoline (as defined in section 

23 4083)—
6

•HR 497 IH 

1 ‘‘(A) sold by any person to an owner, les2 see, or other operator of a diesel-powered train 

3 for use as a fuel in such train, or 

4 ‘‘(B) used by any person as a fuel in a die5 sel-powered train unless there was a taxable 

6 sale of such fuel under subparagraph (A). 

7 No tax shall be imposed by this paragraph on the 

8 sale or use of any liquid if tax was imposed on such 

9 liquid under section 4081.’’

10 (10) Clauses (i) and (ii) of section 

11 4041(m)(1)(A) of such Code are amended to read as 

12 follows: 

13 ‘‘(i) 7 cents per gallon on and after 

14 the date of the enactment of this clause 

15 and before October 1, 2005, and 

16 ‘‘(ii) zero after September 30, 2005, 

17 and’’. 

18 (11) Subsection (c) of section 4081 of such 

19 Code is amended by striking paragraph (6) and by 

20 redesignating paragraphs (7) and (8) as paragraphs 

21 (6) and (7), respectively. 

22 (12) Paragraphs (1) and (2) of section 4081(d) 

23 of such Code are amended to read as follows: 
7

•HR 497 IH 

1 ‘‘(1) IN GENERAL.—The rates of tax specified 

2 in clauses (i) and (iii) of subsection (a)(2)(A) shall 

3 be zero after September 30, 2005. 

4 ‘‘(2) AVIATION GASOLINE.—The rate of tax 

5 specified in subsection (a)(2)(A)(ii) shall be zero 

6 after September 30, 2007.’’

7 (13) Subsection (f) of section 4082 of such 

8 Code is amended by striking ‘‘section 4041(a)(1)’’ 

9 and inserting ‘‘subsections (d)(3) and (a)(1) of sec10 tion 4041, respectively’’. 

11 (14) Paragraph (3) of section 4083(a) of such 

12 Code is amended by striking ‘‘or a diesel-powered 

13 train’’. 

14 (15) Subparagraph (A) of section 4091(b)(3) of 

15 such Code is amended to read as follows: 

16 ‘‘(A) The rate of tax specified in para17 graph (1) shall be zero after September 30, 

18 2007.’’

19 (16) Paragraph (1) of section 4091(c) of such 

20 Code is amended—

21 (A) by striking ‘‘14 cents’’ and inserting 

22 ‘‘9.7 cents’’, 

23 (B) by striking ‘‘13.3 cents’’ and inserting 

24 ‘‘9 cents’’, 
8

•HR 497 IH 

1 (C) by striking ‘‘13.2 cents’’ and inserting 

2 ‘‘8.9 cents’’, 

3 (D) by striking ‘‘13.1 cents’’ and inserting 

4 ‘‘8.8 cents’’, and 

5 (E) by striking ‘‘13.4 cents’’ and inserting 

6 ‘‘9.1 cents’’. 

7 (17) Subsection (c) of section 4091 of such 

8 Code is amended by striking paragraph (4), and by 

9 redesignating paragraph (5) as paragraph (4). 

10 (18) Subsection (b) of section 4092 of such 

11 Code is amended by striking ‘‘attributable to’’ and 

12 all that follows and inserting ‘‘attributable to the 

13 Leaking Underground Storage Tank Trust Fund fi14 nancing rate imposed by such section. For purposes 

15 of the preceding sentence, the term ‘commercial 

16 aviation’ means any use of an aircraft other than in 

17 noncommercial aviation (as defined in section 

18 4041(c)(2)).’’

19 (19) Subparagraph (B) of section 6421(f)(2) of 

20 such Code is amended by striking ‘‘and,’’ and all 

21 that follows and inserting a period. 

22 (20) Paragraph (3) of section 6421(f) of such 

23 Code is amended to read as follows: 

24 ‘‘(3) GASOLINE USED IN TRAINS.—In the case 

25 of gasoline used as a fuel in a train, this section 
9

•HR 497 IH 

1 shall not apply with respect to the Leaking Under2 ground Storage Tank Trust Fund financing rate 

3 under section 4081.’’

4 (21) Subparagraph (A) of section 6427(b)(2) of 

5 such Code is amended by striking ‘‘7.4 cents’’ and 

6 inserting ‘‘3.1 cents’’. 

7 (22) Paragraph (3) of section 6427(l) of such 

8 Code is amended to read as follows: 

9 ‘‘(3) REFUND OF CERTAIN TAXES ON FUEL

10 USED IN DIESEL-POWERED TRAINS.—For purposes 

11 of this subsection, the term ‘nontaxable use’ includes 

12 fuel used in a diesel-powered train. The preceding 

13 sentence shall not apply to the tax imposed by sec14 tion 4041(d) and the Leaking Underground Storage 

15 Tank Trust Fund financing rate under section 4081 

16 except with respect to fuel sold for exclusive use by 

17 a State or any political subdivision thereof.’’

18 (23) Paragraph (4) of section 6427(l) of such 

19 Code is amended by striking ‘‘attributable to’’ and 

20 all that follows through the period and inserting ‘‘at21 tributable to the Leaking Underground Storage 

22 Tank Trust Fund financing rate imposed by such 

23 section.’’

24 (g) EFFECTIVE DATE.—The amendments made by 

25 this section shall take effect on the day after the suspen-
10

•HR 497 IH 

1 sion period ends under section 4081(f) of the Internal 

2 Revenue Code of 1986 (as added by section 2). 

3 SEC. 4. FLOOR STOCK REFUNDS. 

4 (a) IN GENERAL.—If—

5 (1) before the tax suspension date, tax has been 

6 imposed under section 4081 or 4091 of the Internal 

7 Revenue Code of 1986 on any liquid, and 

8 (2) on such date such liquid is held by a dealer 

9 and has not been used and is intended for sale, 

10 there shall be credited or refunded (without interest) to 

11 the person who paid such tax (hereafter in this section 

12 referred to as the ‘‘taxpayer’’) an amount equal to the ex13 cess of the tax paid by the taxpayer over the amount of 

14 such tax which would be imposed on such liquid had the 

15 taxable event occurred on such date. 

16 (b) TIME FOR FILING CLAIMS.—No credit or refund 

17 shall be allowed or made under this section unless—

18 (1) claim therefor is filed with the Secretary of 

19 the Treasury before the date which is 6 months 

20 after the tax suspension date, and 

21 (2) in any case where liquid is held by a dealer 

22 (other than the taxpayer) on the tax suspension 

23 date—
11

•HR 497 IH 

1 (A) the dealer submits a request for refund 

2 or credit to the taxpayer before the date which 

3 is 3 months after the tax suspension date, and 

4 (B) the taxpayer has repaid or agreed to 

5 repay the amount so claimed to such dealer or 

6 has obtained the written consent of such dealer 

7 to the allowance of the credit or the making of 

8 the refund. 

9 (c) EXCEPTION FOR FUEL HELD IN RETAIL

10 STOCKS.—No credit or refund shall be allowed under this 

11 section with respect to any liquid in retail stocks held at 

12 the place where intended to be sold at retail. 

13 (d) DEFINITIONS.—For purposes of this section—

14 (1) the terms ‘‘dealer’’ and ‘‘held by a dealer’’ 

15 have the respective meanings given to such terms by 

16 section 6412 of such Code; except that the term 

17 ‘‘dealer’’ includes a producer, and 

18 (2) the term ‘‘tax suspension date’’ means the 

19 date on which the suspension period begins under 

20 section 4081(f) of the Internal Revenue Code of 

21 1986 (as added by section 2). 

22 (e) CERTAIN RULES TO APPLY.—Rules similar to the 

23 rules of subsections (b) and (c) of section 6412 of such 

24 Code shall apply for purposes of this section. 
12

•HR 497 IH 

1 SEC. 5. FLOOR STOCKS TAX. 

2 (a) IMPOSITION OF TAX.—In the case of any taxable 

3 liquid which is held on the floor stocks tax date by any 

4 person, there is hereby imposed a floor stocks tax equal 

5 to the excess of the tax which would be imposed under 

6 section 4041, 4081, or 4091 of the Internal Revenue Code 

7 of 1986 on such liquid had the taxable event occurred on 

8 the floor stocks tax date over the tax paid under such sec9 tions on such liquid. 

10 (b) LIABILITY FOR TAX AND METHOD OF PAY11 MENT.—

12 (1) LIABILITY FOR TAX.—A person holding a 

13 liquid on the floor stocks tax date to which the tax 

14 imposed by subsection (a) applies shall be liable for 

15 such tax. 

16 (2) METHOD OF PAYMENT.—The tax imposed 

17 by subsection (a) shall be paid in such manner as 

18 the Secretary shall prescribe. 

19 (3) TIME FOR PAYMENT.—The tax imposed by 

20 subsection (a) shall be paid on or before the date 

21 which is 6 months after the floor stocks tax date. 

22 (c) DEFINITIONS.—For purposes of this section—

23 (1) HELD BY A PERSON.—A liquid shall be con24 sidered as ‘‘held by a person’’ if title thereto has 

25 passed to such person (whether or not delivery to 

26 the person has been made). 
13

•HR 497 IH 

1 (2) TAXABLE LIQUID.—The term ‘‘taxable liq2 uid’’ means any liquid on which tax is imposed 

3 under section 4041, 4081, or 4091 of the Internal 

4 Revenue Code of 1986 on the floor stocks tax date. 

5 (3) GASOLINE AND DIESEL FUEL.—The terms 

6 ‘‘gasoline’’ and ‘‘diesel fuel’’ have the respective 

7 meanings given such terms by section 4083 of such 

8 Code. 

9 (4) AVIATION FUEL.—The term ‘‘aviation fuel’’ 

10 has the meaning given such term by section 4093 of 

11 such Code. 

12 (5) FLOOR STOCKS TAX DATE.—The term 

13 ‘‘floor stocks tax date’’ means the day after the end 

14 of the suspension period under section 4081(f) of 

15 such Code (as added by section 2). 

16 (6) SECRETARY.—The term ‘‘Secretary’’ means 

17 the Secretary of the Treasury or the Secretary’s del18 egate. 

19 (d) EXCEPTION FOR EXEMPT USES.—The tax im20 posed by subsection (a) shall not apply to taxable liquid 

21 held by any person exclusively for any use to the extent 

22 a credit or refund of the tax imposed by section 4041, 

23 4081, or 4091 of such Code is allowable for such use. 

24 (e) EXCEPTION FOR FUEL HELD IN VEHICLE

25 TANK.—No tax shall be imposed by subsection (a) on tax-
14

•HR 497 IH 

1 able liquid held in the tank of a motor vehicle or motor2 boat. 

3 (f) EXCEPTION FOR CERTAIN AMOUNTS OF FUEL.—

4 (1) IN GENERAL.—No tax shall be imposed by 

5 subsection (a)—

6 (A) on gasoline held on the floor stocks tax 

7 date by any person if the aggregate amount of 

8 gasoline held by such person on such date does 

9 not exceed 4,000 gallons, and 

10 (B) on diesel fuel, kerosene, or aviation 

11 fuel held on such date by any person if the ag12 gregate amount of diesel fuel, kerosene, or avia13 tion fuel held by such person on such date does 

14 not exceed 2,000 gallons. 

15 The preceding sentence shall apply only if such per16 son submits to the Secretary (at the time and in the 

17 manner required by the Secretary) such information 

18 as the Secretary shall require for purposes of this 

19 paragraph. 

20 (2) EXEMPT FUEL.—For purposes of para21 graph (1), there shall not be taken into account fuel 

22 held by any person which is exempt from the tax im23 posed by subsection (a) by reason of subsection (d) 

24 or (e). 
15

•HR 497 IH 

1 (3) CONTROLLED GROUPS.—For purposes of 

2 this subsection—

3 (A) CORPORATIONS.—

4 (i) IN GENERAL.—All persons treated 

5 as a controlled group shall be treated as 1 

6 person. 

7 (ii) CONTROLLED GROUP.—The term 

8 ‘‘controlled group’’ has the meaning given 

9 to such term by subsection (a) of section 

10 1563 of such Code; except that for such 

11 purposes the phrase ‘‘more than 50 per12 cent’’ shall be substituted for the phrase 

13 ‘‘at least 80 percent’’ each place it appears 

14 in such subsection. 

15 (B) NONINCORPORATED PERSONS UNDER

16 COMMON CONTROL.—Under regulations pre17 scribed by the Secretary, principles similar to 

18 the principles of subparagraph (A) shall apply 

19 to a group of persons under common control 

20 where 1 or more of such persons is not a cor21 poration. 

22 (g) OTHER LAW APPLICABLE.—All provisions of law, 

23 including penalties, applicable with respect to the taxes 

24 imposed by section 4041(a)(2) of such Code in the case 

25 of special fuels; by section 4081 of such Code in the case 
16

•HR 497 IH 

1 of gasoline, diesel fuel, and kerosene; and by section 4091 

2 of such Code in the case of aviation fuel shall, insofar as 

3 applicable and not inconsistent with the provisions of this 

4 subsection, apply with respect to the floor stock taxes im5 posed by subsection (a) to the same extent as if such taxes 

6 were imposed by such section 4041, 4081, or 4091.

Æ