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On April 3, Rep. Bill Lipinski (D-Ill.) introduced the National Rail Infrastructure Program Act (H.R. 1617), which would provide federal funds for infrastructure projects by reallocating railroads' 4.3 cent-per-gallon diesel-fuel tax into the General Revenue fund, reallocating a portion of current customs duties and creating additional taxes on new rail cars. The program would generate about $3 billion in grants annually.


"This program would provide a steady and predictable source of funding, so that states and localities can more effectively plan long-term capital rail projects [that] benefit not only freight rail systems, but passenger- and commuter-rail systems, too," said Lipinski in a prepared statement.


H.R. 1617 — which would require that at least 20 percent of a project's cost be funded by state, local or other non-federal sources — was referred to the Committee on Transportation and Infrastructure, and Committee on Ways and Means.


Although cash-strapped railroads welcome an infusion of federal funds to help pay for infrastructure improvements, most roads want the 4.3 cent fuel tax repealed rather than reallocated. So, they're keeping an eye on energy bills in the House and Senate that include provisions to do just that.


Energy Tax Policy Act of 2003 (H.R. 1531) would amend the Internal Revenue Code of 1986 to repeal the 4.3-cent tax on railroads and inland waterway transportation companies. The bill recently was marked up and ordered to be amended by the House Committee on Ways and Means.


Energy Tax Incentives Act of 2003 (S. 597) also would amend the Internal Revenue Code of 1986 to repeal the fuel tax. The bill is being considered by the Senate Committee on Finance.


Association of American Railroads officials are "pleased" that the House and Senate are pursuing the tax-eliminating bills.


"Railroads and barges are currently the only mode of surface transportation required to pay this tax," AAR officials said in a prepared statement. "With freight transportation expected to nearly double by 2020, it is essential that railroads — who pay virtually all the costs to maintain and improve their infrastructure — have the financial tools they need to meet that demand."