Provisions Included in Larger Senate Tax Measure Approved Today
May 12 2004
WASHINGTON, DC (May 11, 2004) – The Senate today voted 92-5 to approve legislation that would help finance intercity-passenger and freight-rail projects, as well as encourage the development of renewable fuels. The provisions were included as part of a larger corporate tax bill [S. .1637] designed to end European Union trade sanctions against the United States. In discussions with the bill’s primary authors – Finance Committee Chairman Charles Grassley, R-Iowa, and Ranking Member Max Baucus, D-Mont. – Sen. Tom Carper, D-Del., was responsible for securing a three-year, $1 billion tax credit to improve rail infrastructure. Of that, states could use $500 million in tax credits for passenger rail projects, such as track rehabilitation, security and safety improvements, equipment acquisitions, and station enhancements. The other $500 million would be available to the nation’s short line railroads, like the Maryland and Delaware Railroad, for expenditures related to track maintenance and infrastructure upgrades. Carper is one of the primary authors of more-comprehensive legislation to revitalize the nation’s rail industry. The bill, known as the American Railroad, Revitalization, Investment and Enhancement Act (ARRIVE-21), would provide nearly $30 billion in tax-credit bond financing to give grants to states and Amtrak to improve rail infrastructure. While the tax credit represents a modest beginning compared to the ARRIVE-21 proposal, Carper said the tax credit would provide the only dedicated federal revenue source to make capital improvements along our nation’s railways. “This is a great first step for those of us who believe in rail and want to see the federal government do more to help rehabilitate and improve one of our nation’s most vital transportation resources,” said Carper. Carper said the tax credit would help address the more than $5 billion annual capital shortfall in U.S. rail infrastructure estimated by American Association of State Highway and Transportation Officials. It would also create jobs. According to Transportation Secretary Norm Mineta, every $1 billion invested in transportation infrastructure creates 47,500 jobs. The legislation that passed today also includes a host of renewable-energy tax credits, many of which could benefit farmers in Delaware. Many of the provisions were included in more-comprehensive energy legislation that has so far failed to pass the Senate. Carper said the inclusion of the renewable tax credits in the corporate tax bill may be the last best chance to enact some type of energy policy this year. “We shouldn’t adjourn this year without doing something to promote good, sound energy policy,” said Carper. “This bill’s provisions for renewable fuels will help reduce our dependency on foreign oil and spur economic growth in Delaware’s agriculture and technology sectors.” For instance, the bill includes tax credits ranging from $.20 to $1.00 a gallon for the production and use of soybean-based biodiesel and corn-based ethanol, potentially increasing earnings of Delaware farmers. The bill would also provide a tax credit – of between $750 and $4,000 – for the purchase of diesel-powered hybrid vehicles that get high fuel-economy and have low emissions. In addition, fuel-cell vehicles, which use components developed by DuPont and W.L. Gore, would be eligible for credits of between $5,000 and $8,000 in order to help bring these vehicles into the marketplace. Solar, wind and fuel cells installed in homes would also be eligible for up to a $2,000 tax credit. Delaware-based Astropower is the nation’s second-largest supplier of solar power for homes. The Senate legislation now must be negotiated with the House before it can become law.