A bill to amend the Internal Revenue Code of 1986 to permit tax free purchases of certain fuels, including purchases by farmers.

Amends the Internal Revenue Code to direct the Secretary of the Treasury to issue regulations exempting the following from the excise tax on diesel and aviation fuels: (1) diesel fuel for use in a diesel-powered train (to the extent of 15 cents per gallon); (2) aviation fuel for use in commercial aviation; (3) fuel used other than as motor fuel; (4) fuel for use by a State or local government; and (5) fuel for use on a farm for farming purposes. (Under current law, the Secretary is authorized to issue such regulations with respect to all but the last item. Although fuel sold for farm use is already tax-exempt, provisions of the Revenue Act of 1987 require purchasers to pay the tax and subsequently apply for a refund.)