I 
109TH CONGRESS 
1ST SESSION H. R. 1097
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. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 3, 2005
Mr. GARRETT of New Jersey 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 reduce 
the Federal tax on fuels by the amount of any increase 
in the rate of tax on such fuel by the States.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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’’. 
(b) FINDINGS.—The Congress finds the following: 
(1) Today’s surface transportation problems are 
largely local and regional in nature.
(2) The original Federal goal of creating an 
interstate system was met in the early 1980’s. 
(3) State and local governments are out-
spending the Federal Government on transportation 
by a ratio of 2 to 1. 
(4) The amount of traffic experiencing con-
gested conditions in the peak travel periods has dou-
bled in 20 years from 33 percent in 1982 to 67 per-
cent in 2002. 
(5) More than $63,000,000,000 is wasted each 
year due to congestion in the 85 most populated 
areas in the country. 
(c) PURPOSES.—The purposes of this Act are to—
(1) return primary transportation program re-
sponsibility and taxing authority to the States, 
(2) free States’ transportation dollars from 
Federal micromanagement, earmarking, and budg-
etary pressures, 
(3) enable decisions regarding which infrastruc-
ture projects will be built, how they will be financed, 
and how they will be regulated to be made by per-
sons best able to make those decisions, 
(4) eliminate the current system in which a 
Federal gasoline tax is sent to Washington and
through a cumbersome Department of Transpor-
tation bureaucracy, 
(5) prohibit the Federal Government from forc-
ing unwanted mandates on States by threatening to 
withhold transportation money, and 
(6) achieve measurable congestion mitigation 
and infrastructure preservation and safety in a cost 
effective way subject to available resources. 
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 sub-
chapter 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: 
‘‘SEC. 4106. REDUCTION IN RATES OF TAX BASED ON IN-
CREASE 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. 
‘‘(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,