HouseH.R. 10607119th Congress
American Fuel Affordability Act
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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10607 Introduced in House (IH)]
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119th CONGRESS
2d Session
H. R. 10607
To amend the Internal Revenue Code of 1986 to repeal certain excise
taxes on diesel fuel, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 24, 2026
Mr. Steube 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 repeal certain excise
taxes on diesel fuel, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``American Fuel Affordability Act''.
SEC. 2. REPEAL OF EXCISE TAXES ON DIESEL FUEL.
(a) Section 4041 Taxes.--Section 4041(a)(1) of the Internal Revenue
Code of 1986 is hereby repealed.
(b) Section 4081 Taxes.--Section 4081(a)(2)(A) of such Code is
amended by inserting ``and'' at the end of clause (i), by striking ``,
and'' at the end of clause (ii) and inserting a period, and by striking
clause (iii).
(c) Conforming Amendments.--
(1) The heading of section 4041(a) of such Code is amended
by striking ``Diesel Fuel and Special Motor Fuels'' and
inserting ``Special Motor Fuels''.
(2) Section 4041(b)(1)(C) of such Code is amended by
striking ``; except that such term shall not, for purposes of
subsection (a)(1), include use in a diesel-powered train''.
(3) Section 4041(d) of such Code is amended by striking
paragraph (3) and by redesignating paragraphs (4) and (5) as
paragraphs (3) and (4).
(4) Section 4081(a)(2) of such Code is amended by striking
subparagraph (D).
(5) Section 4081 of such Code is amended by striking
subsection (c) and by redesignating subsections (d) and (e) as
subsections (c) and (d).
(6) Section 4081(c)(1) of such Code (as so redesignated) is
amended by striking ``The rates of tax specified in clauses (i)
and (iii) of subsection (a)(2)(A)'' and inserting ``The rate of
tax specified in subsection (a)(2)(A)(i)''.
(d) Effective Date.--The amendments made by this section shall
apply to diesel fuel sold, used, removed, or entered after the date of
the enactment of this Act.
SEC. 3. TRANSFERS TO TRUST FUND.
(a) In General.--The Secretary of the Treasury shall transfer from
the general fund to the Highway Trust Fund established under section
9503(a) of the Internal Revenue Code of 1986 and the Leaking
Underground Storage Tank Trust Fund established under section 9508(a)
of such Code amounts equal to the reduction in amounts credited (but
for this subsection) to each such Trust Fund by reason of section 2.
(b) Coordination Rules.--
(1) Leaking underground storage tank trust fund.--Amounts
transferred to the Leaking Underground Storage Tank Trust Fund
under paragraph (1) shall be treated for purposes of sections
9503(b)(1) and 9508(b)(2) of such Code as taxes received in the
Treasury under section 4081 of such Code attributable to the
Leaking Underground Storage Tank Trust Fund financing rate.
(2) Highway trust fund.--Amounts transferred to the Highway
Trust Fund under paragraph (1) shall be treated for purposes of
section 9503(b)(1) of such Code as taxes received in the
Treasury under section 4081 of such Code which are not
attributable to the Leaking Underground Storage Tank Trust Fund
financing rate.
SECTION 4. REFINERY CONSTRUCTION INVESTMENT CREDIT.
(a) In General.--Subpart E of part IV of subchapter A of chapter 1
of subtitle A of the Internal Revenue Code of 1986 is amended by
inserting after Section 48E the following new section:
``SEC. 48F. REFINERY CONSTRUCTION INVESTMENT CREDIT.
``(a) In General.--For purposes of section 46, the refinery
construction investment credit for any taxable year is an amount equal
to 35 percent of the qualified investment for such taxable year.
``(b) Qualified Investment.--For purposes of subsection (a), the
term `qualified investment' for any taxable year means the basis of any
qualified property placed in service by the taxpayer during such
taxable year which is part of a qualified facility.
``(c) Qualified Property.--For purposes of this section, the term
`qualified property' means property--
``(1) which is--
``(A) tangible personal property, or
``(B) other tangible property, including a building
or its structural components, but only if such property
is used as an integral part of a qualified facility,
``(2) with respect to which depreciation (or amortization
in lieu of depreciation) is allowable, and
``(3) the construction, reconstruction, or erection of
which is completed by the taxpayer.
``(d) Qualified Facility.--
``(1) In general.--For purposes of this section, the term
`qualified facility' means a facility--
``(A) which is a refinery located in the United
States,
``(B) which is designed to serve the primary
purpose of processing liquid fuel from crude oil or
qualified fuels (as defined in section 45K(c)), or
directly from shale or tar sands,
``(C) the construction of which begins after the
date of the enactment of this section and before
January 1, 2032, and
``(D) which is placed in service before January 1,
2037.
``(2) Exclusions.--The term `qualified facility' shall not
include any facility for which any credit determined under this
subpart other than the credit allowed under subsection (a) is
allowed under section 38 for any taxable year.
``(e) Special Rules.--
``(1) Certain progress expenditure rules made applicable.--
Rules similar to the rules of subsections (c)(4) and (d) of
section 46 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990) shall
apply for purposes of subsection (a).
``(2) Special rule for property financed by subsidized
energy financing or private activity bonds.--Rules similar to
the rule under section 45(b)(3) shall apply for purposes of
this section.''.
(b) Credit Included in Investment Credit.--Section 46 of such Code
is amended--
(1) by striking the period at the end of paragraph (7) and
inserting ``, and'', and
(2) by adding at the end the following new paragraph:
``(8) the refinery construction investment credit.''.
(c) Clerical Amendment.--The table of sections for such subpart is
amended by adding at the end the following new item:
``Sec. 48F. Refinery construction investment credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act.
SEC. 5. ESTABLISHMENT OF REFINERY PRODUCTION CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of subtitle A of the Internal Revenue Code of 1986 is amended by adding
at the end the following new section:
``SEC. 45BB. REFINERY PRODUCTION CREDIT.
``(a) In General.--For purposes of section 38, the refinery
production credit for any taxable year is an amount equal to 5 cents
per gallon of gasoline or diesel--
``(1) produced by the taxpayer at a qualified newly
constructed refinery, and
``(2) sold by the taxpayer to an unrelated person during
the taxable year.
``(b) Qualified Newly Constructed Refinery.--For purposes of this
section, the term `qualified newly constructed refinery' means a
refinery--
``(1) which is a qualified facility (as defined in section
48F(d)),
``(2) which was placed in service within 10 years of the
date a gallon of gasoline or diesel described in subsection (a)
was produced.''.
(b) Credit Included in General Business Credit.--Section 38 of such
Code is amended--
(1) in paragraph (40), by striking ``plus'',
(2) in paragraph (41), by striking the period and inserting
``, plus'', and
(3) by adding at the end the following new paragraph:
``(42) the refinery production credit determined under
section 45BB(a).''.
(c) Clerical Amendment.--The table of sections for such subpart is
amended by adding at the end the following new item:
``Sec. 45BB. Refinery production credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred after the date of the enactment of
this Act.
SECTION 6. SPECIAL ALLOWANCE FOR QUALIFIED PRODUCTION PROPERTY MADE
PERMANENT FOR GASOLINE AND DIESEL PRODUCTION.
(a) In General.--Section 168(n)(2)of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(I) Special allowance made permanent for new
refinery construction.--In the case of property
integral to the new construction of a qualified
facility described in section 48F(d)(1) (determined
without regard to subparagraph (C) of such section)--
``(i) subparagraph (A) shall be applied--
``(I) in clause (v), without regard
to `before January 1, 2029,' and
``(II) without regard to clause
(vii), and
``(ii) this paragraph shall be applied
without regard to subparagraph (H).''.
(b) Effective Date.--The amendments made by this section shall
apply to property the construction of which begins after the date of
the enactment of this Act.
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