To amend the Internal Revenue Code of 1986 to provide relief from high gas prices.

1. Adds SEC. __. INCOME TAX EXCLUSION FOR CERTAIN FUEL COSTS OF RURAL CARPOOLS wherever appropriate

   Adds a section

   Inserted: SEC. __. INCOME TAX EXCLUSION FOR CERTAIN FUEL COSTS OF RURAL CARPOOLS.

   Inserted: (a) In General.--Section 132(f)(1) of the Internal Revenue Code of 1986 (defining qualified transportation fringe) is amended by adding at the end the following new subparagraph:

   Inserted: "(D) Fuel expenses for a highway vehicle of any employee who meets the rural carpool requirements of paragraph (8).".

   Inserted: (b) Limitation on Exclusion.--Section 132(f)(2) of such Code (relating to limitation on exclusion) is amended by striking "and" at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting ", and", and by adding at the end the following new subparagraph:

   Inserted: "(C) $50 per month in the case of the benefit described in subparagraph (D).".

   Inserted: (c) Rural Carpool Requirements.--Section 132(f) of such Code is amended by adding at the end the following new paragraph:

   Inserted: "(8) Requirements for employees participating in rural carpools.--

   Inserted: "(A) In general.--The requirements of this paragraph are met if an employee--

   Inserted: "(i) is an employee of an employer described in subparagraph (B),

   Inserted: "(ii) certifies to such employer that--

   Inserted: "(I) such employee resides in a rural area (as defined by the Bureau of the Census),

   Inserted: "(II) such employee is not eligible to claim any qualified transportation fringe described in subparagraph (A) or (B) of paragraph (1) if provided by such employer,

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   Inserted: "(III) such employee uses the employee's highway vehicle when traveling between the employee's residence and place of employment, and

   Inserted: "(IV) for at least 75 percent of the total mileage of such travel, the employee is accompanied by 1 or more employees of such employer, and

   Inserted: "(iii) agrees to notify such employer when any subclause of clause (ii) no longer applies.

   Inserted: "(B) Employer described.--An employer is described in this subparagraph if the business premises of such employer which serve as the place of employment of the employee are located in an area which is not accessible by a transit system designed primarily to provide daily work trips within a local commuting area.".

   Inserted: (d) No Exclusion for Employment Taxes.--Section 3121(a)(20) of such Code (defining wages) is amended by inserting "(except by reason of subsection (f)(1)(D) thereof)" after "or 132".

   Inserted: (e) Effective Date.--The amendments made by this section shall apply to expenses incurred on and after the date of the enactment of this Act and before January 1, 2007.

   The amendment doesn't say where this goes; the clerk decides.

   Original wording

   At the appropriate place insert the following:

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As printed