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House, Senate pass bill proposing repeal of railroads' fuel tax


Yesterday, the House and Senate passed the American Jobs Creation Act of 2004 (H.R. 4520, S. 1637), which includes a provision to repeal the 4.3-cents-per-gallon fuel tax paid by railroads under a phased rollback. President Bush is expected to sign the bill into law.

The fuel tax would be reduced by one penny in January and July 2005, and by the final 2.3 cents in January 2007.

"Railroads and barges are currently the only modes of transportation that pay a fuel tax into the general fund," said Association of American Railroads President and Chief Executive Officer Edward Hamberger in a prepared statement. "Fuel taxes paid by other modes go to support their right-of-way while … railroads pay virtually all of the costs to maintain and improve their infrastructure. We urge President Bush to sign [the bill] into law."

U.S. railroads consume more than 3 billion gallons of diesel and pay about $170 million in fuel taxes annually.

The bill also would provide about $140 billion in new tax breaks for corporations and reduce tax rates for a majority of U.S. manufacturers.

Contact Progressive Railroading editorial staff.

More News from 10/12/2004