[Congressional Record Volume 143, Number 135 (Thursday, October 2, 1997)]
[Extensions of Remarks]
[Page E1927]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       H.R. 2474, THE RAILROAD TAX EQUITY ADJUSTMENT ACT OF 1997

                                 ______
                                 

                         HON. JAMES L. OBERSTAR

                              of minnesota

                    in the house of representatives

                       Thursday, October 2, 1997

  Mr. OBERSTAR. Mr. Speaker, I am pleased to have joined the 
distinguished chairman of the Subcommittee on Surface Transportation of 
the Committee on Transportation and Infrastructure, Mr. Petri, in 
introducing H.R. 2474, the Railroad Tax Equity Adjustment Act of 1997. 
This is a significant piece of legislation which will remedy a serious 
tax equity problem which burdens our important freight railroad 
industry.
  Because of the 1990 and 1993 reconciliation acts, the freight 
railroads have been paying 5.55 cents-per-gallon in fuel taxes into the 
General Treasury for deficit reduction. All other modes of 
transportation--highway, air, water--pay only 4.3 cents per gallon. 
This is an obvious inequity. Now, as a result of the recent tax 
reconciliation law, this situation will get even worse. That law 
transfers the 4.3 cents deficit reduction taxes paid by highway users, 
including truckers, into the highway trust fund, leaving only the 
railroad and waterway users paying any taxes toward deficit reduction.
  Mr. Speaker, the differential between what railroads pay in fuel tax 
and what other modes pay--1.25 cents-per-gallon--should be repealed as 
a matter of equity. In addition, the 4.3 cents in deficit reduction 
fuel taxes paid by railroads should be eliminated, to the extent such 
taxes paid by trucks are placed in the highway trust fund and spent for 
highway improvements. H.R. 2474, the Railroad Tax Equity Adjustment Act 
of 1997, will accomplish these goals.
  The bill has two essential components: First, effective October 1, 
1997, the 1.25 cents-per-gallon deficit reduction fuel tax paid 
uniquely by the railroad industry will be eliminated, reducing the 
overall deficit reduction diesel fuel tax for railroads from 5.55 to 
4.3 cents-per-gallon. Second, in subsequent years, the excise tax rate 
on diesel fuel paid by the railroads will equal the portion of the 
corresponding 4.3 cents-per-gallon excise tax paid by highway users, 
including trucks, which is spent on highway infrastructure improvements 
in the preceding year. For example, if 2 cents-per-gallon of the 
highway users' excise tax revenues were spent in fiscal year 1998, the 
railroad industry's deficit reduction fuel tax in fiscal year 1999 
would be reduced by 2 cents-per-gallon to 2.3 cents-per-gallon.
  The current fuel tax inequity imposed on America's railroads must be 
remedied at the earliest opportunity. It is my sincere hope that the 
Ways and Means Committee will seriously consider including a solution, 
such as that contained in the Railroad Tax Equity Adjustment Act of 
1997, as they develop the tax portion of the ISTEA reauthorization 
legislation. Furthermore, I fully expect the Committee on 
Transportation and Infrastructure to include in its reported version of 
BESTEA sense of the committee language urging that this situation 
should be remedied, as provided in H.R. 2474.
  In the interim, I encourage all Members to give this issue their 
utmost attention and join with me and others in cosponsoring H.R. 2474.

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