SEC. 2. REDUCTION OF HIGHWAY MOTOR FUEL TAX RATES
TO PRE-1990 LEVELS; 4.3-CENT REDUCTION IN
OTHER FUEL TAX RATES.
(a) HIGHWAY GASOLINE.—Clause (i) of section
4081(a)(2)(A) of the Internal Revenue Code of 1986 is
amended by striking ‘‘18.3 cents’’ and inserting ‘‘9 cents’’.
(b) AVIATION GASOLINE.—Clause (ii) of section
4081(a)(2)(A) of such Code is amended by striking ‘‘19.3
cents’’ and inserting ‘‘15 cents’’.
(c) DIESEL FUEL AND KEROSENE.—Clause (iii) of
section 4081(a)(2)(A) of such Code is amended by striking
‘‘24.3 cents’’ and inserting ‘‘15 cents’’.
(d) AVIATION FUEL.—Paragraph (1) of section
4091(b) of such Code is amended by striking ‘‘21.8 cents’’
and inserting ‘‘17.5 cents’’.
(e) FUEL USED ON INLAND WATERWAYS.—
(1) Paragraph (1) of section 4042(b) of such
Code is amended by adding ‘‘and’’ at the end of sub-
paragraph (A), by striking ‘‘, and’’ at the end of
subparagraph (B) and inserting a period, and by
striking subparagraph (C).
(2) Paragraph (2) of section 4042(b) of such
Code is amended by striking subparagraph (C).
(f) TECHNICAL AMENDMENTS.—
(1) Subparagraph (B) of section 40(e)(1) of
such Code is amended by striking ‘‘during which the
rates of tax under section 4081(a)(2)(A) are 4.3
cents per gallon’’ and inserting ‘‘during which the
rate of tax under section 4081(a)(2)(A)(i) does not
apply’’.
(2) Subparagraph (A) of section 4041(a)(1) of
such Code is amended by striking ‘‘or a diesel-pow-
ered train’’ each place it appears and by striking ‘‘or
train’’.
(3) Subparagraph (C) of section 4041(a)(1) of
such Code is amended by striking clause (ii) and by
redesignating clause (iii) as clause (ii).
(4) Subclause (I) of section 4041(a)(1)(C)(ii) of
such Code, as redesignated by paragraph (3), is
amended by striking ‘‘7.3 cents’’ and inserting ‘‘3
cents’’ and by striking ‘‘4.3 cents per gallon’’ and
inserting ‘‘zero’’.
(5) Subsection (a) of section 4041 of such Code
is amended by striking paragraph (3).
(6) 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.
(7) Subparagraph (B) of section 4041(a)(2) of
such Code is amended by striking all that follows
clause (i) and inserting the following new clauses:
‘‘(ii) 5.4 cents per gallon in the case
of any sale or use of liquefied petroleum
gas before October 1, 2005, and
‘‘(iii) 4.1 cents per gallon in the case
of any sale or use of liquefied natural gas
before October 1, 2005.’’
(8) Paragraph (3) of section 4041(c) of such
Code is amended to read as follows:
‘‘(3) TERMINATION.—The rate of the taxes im-
posed by paragraph (1) shall be zero after Sep-
tember 30, 2007.’’
(9) Subsection (d) of section 4041 of such Code
is amended by redesignating paragraph (3) as para-
graph (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, les-
see, 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 die-
sel-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.’’
(10) 
Clauses 
(i) 
and 
(ii) 
of 
section
4041(m)(1)(A) of such Code are amended to read as
follows:
‘‘(i) 2 cents per gallon on and after
the date of the enactment of this clause
and before October 1, 2005, and
‘‘(ii) zero after September 30, 2005,
and’’.
(11) Subsection (c) of section 4081 of such
Code is amended by striking paragraph (6) and by
redesignating paragraphs (7) and (8) as paragraphs
(6) and (7), respectively.
(12) Paragraphs (1) and (2) of section 4081(d)
of such Code are amended to read as follows:
‘‘(1) IN GENERAL.—The rates of tax specified
in clauses (i) and (iii) of subsection (a)(2)(A) shall
be zero after September 30, 2005.
‘‘(2) AVIATION
GASOLINE.—The rate of tax
specified in subsection (a)(2)(A)(ii) shall be zero
after September 30, 2007.’’
(13) Subsection (f) of section 4082 of such
Code is amended by striking ‘‘section 4041(a)(1)’’
and inserting ‘‘subsections (d)(3) and (a)(1) of sec-
tion 4041, respectively’’.
(14) Paragraph (3) of section 4083(a) of such
Code is amended by striking ‘‘or a diesel-powered
train’’.
(15) Subparagraph (A) of section 4091(b)(3) of
such Code is amended to read as follows:
‘‘(A) The rate of tax specified in para-
graph (1) shall be zero after September 30,
2007.’’
(16) Paragraph (1) of section 4091(c) of such
Code is amended—
(A) by striking ‘‘14 cents’’ and inserting
‘‘9.7 cents’’,
(B) by striking ‘‘13.3 cents’’ and inserting
‘‘9 cents’’,
(C) by striking ‘‘13.2 cents’’ and inserting
‘‘8.9 cents’’,
(D) by striking ‘‘13.1 cents’’ and inserting
‘‘8.8 cents’’, and
(E) by striking ‘‘13.4 cents’’ and inserting
‘‘9.1 cents’’.
(17) Subsection (c) of section 4091 of such
Code is amended by striking paragraph (4), and by
redesignating paragraph (5) as paragraph (4).
(18) Subsection (b) of section 4092 of such
Code is amended by striking ‘‘attributable to’’ and
all that follows and inserting ‘‘attributable to the
Leaking Underground Storage Tank Trust Fund fi-
nancing rate imposed by such section. For purposes
of the preceding sentence, the term ‘commercial
aviation’ means any use of an aircraft other than in
noncommercial aviation (as defined in section
4041(c)(2)).’’
(19) Subparagraph (B) of section 6421(f)(2) of
such Code is amended by striking ‘‘and,’’ and all
that follows and inserting a period.
(20) 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 Under-
ground Storage Tank Trust Fund financing rate
under section 4081.’’
(21) Subparagraph (A) of section 6427(b)(2) of
such Code is amended by striking ‘‘7.4 cents’’ and
inserting ‘‘3.1 cents’’.
(22) 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 sec-
tion 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.’’
(23) Paragraph (4) of section 6427(l) of such
Code is amended by striking ‘‘attributable to’’ and
all that follows through the period and inserting ‘‘at-
tributable to the Leaking Underground Storage
Tank Trust Fund financing rate imposed by such
section.’’
(g) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
(h) FLOOR STOCK REFUNDS.—
(1) IN GENERAL.—If—
(A) before the date of the enactment of
this Act, tax has been imposed under section
4081 or 4091 of the Internal Revenue Code of
1986 on any liquid, and
(B) on such date such liquid is held by a
dealer and has not been used and is intended
for sale,
there shall be credited or refunded (without interest)
to the person who paid such tax (hereafter in this
subsection referred to as the ‘‘taxpayer’’) an amount
equal to the excess of the tax paid by the taxpayer
over the amount of such tax which would be imposed
on such liquid had the taxable event occurred on
such date.
(2) TIME FOR FILING CLAIMS.—No credit or re-
fund shall be allowed or made under this subsection
unless—
(A) claim therefor is filed with the Sec-
retary of the Treasury before the date which is
6 months after the date of the enactment of
this Act, based on a request submitted to the
taxpayer before the date which is 3 months
after such date of enactment, by the dealer who
held the liquid on such date of enactment, and
(B) the taxpayer has repaid or agreed to
repay the amount so claimed to such dealer or
has obtained the written consent of such dealer
to the allowance of the credit or the making of
the refund.
(3) EXCEPTION
FOR
FUEL
HELD
IN
RETAIL
STOCKS.—No credit or refund shall be allowed under
this subsection with respect to any liquid in retail
stocks held at the place where intended to be sold
at retail.
(4) DEFINITIONS.—For purposes of this sub-
section, the terms ‘‘dealer’’ and ‘‘held by a dealer’’
have the respective meanings given to such terms by
section 6412 of such Code.
(5) CERTAIN RULES TO APPLY.—Rules similar
to the rules of subsections (b) and (c) of section
6412 of such Code shall apply for purposes of this
subsection.
(i) MAINTENANCE OF TRUST FUND DEPOSITS.—In
determining the amounts to be appropriated to any trust
fund, an amount equal to the reduction in revenues to the
Treasury by reason of a reduction under this Act in any
rate shall be treated as taxes received in the Treasury
under such rate.
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