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Two bills recently were introduced to Congress that would amend the Internal Revenue Code of 1986 and permanently repeal the 4.3-cent-per-gallon federal fuel tax paid by U.S. freight railroads and inland waterway companies.


On Jan. 29, Reps. James Sensenbrenner Jr. (R-Wis.) and Nick Smith (R-Mich.) introduced Freedom from Unfair Energy Levy Act (H.R. 497), which was referred to the House Committee on Ways and Means. The bill also would impose a 0.1-cent-per-gallon tax on any liquid other than gasoline used to fuel trains.


On Jan. 30, Sens. Trent Lott (R-Miss.) and John Breaux (D-La.) introduced Transportation Tax Equity and Fairness Act (S. 251), which was referred to the Senate Committee on Finance.


Since 1990, freight roads have paid the fuel tax, which is earmarked for deficit reduction. In 1997, a similar tax paid by trucks and airlines was redirected into funds that can be used to improve or maintain infrastructure.


Class I officials believe the fuel tax unfairly increases their costs and harms their ability to remain competitive.