Odd Couple Introduce Fuel Cell Bill

25% tax credit proposed for purchase of fuel cell vehicles bought before 2010.

Published: 12-Feb-2003

WASHINGTON - An unlikely pair of lawmakers has introduced legislation to give hefty tax breaks to buyers of fuel-cell-powered vehicles and producers and users of hydrogen fuel.

The bill was unveiled Feb. 11 by Rep. Christopher Cox, a conservative Republican from California, and Sen. Ron Wyden, a liberal Democrat from Oregon. They say they have a history of successfully teaming up on legislation that ultimately becomes law.

There is also an unlikely coalition backing the measure: Two automakers, Toyota Motor North America and General Motors, and the environmental group Natural Resources Defense Council.

The proposal adds to a sudden wave of Washington interest in fuel cells. President Bush set it off with his Jan. 28 State of the Union address and his Feb. 3 budget presentation for fiscal 2004. He promised $1.7 billion over five years for research on fuel cell vehicles and hydrogen fuel.

But Cox and Wyden say they don't think the United States should wait until 2015 to 2020, as the Bush administration envisions, to take widespread advantage of fuel cells, which don't need petroleum as a source of energy and which can be made to be pollution free.

Under their legislation the buyer of a fuel-cell-powered vehicle before 2010 would get 25 percent of the purchase price back as a tax credit. The maximum credit would be capped at $50,000. Smaller credits would be available in subsequent years.

The likely fate of the proposal is unclear.

The Clinton administration first proposed tax credits for gasoline-electric hybrid vehicles and other advanced technology vehicles in 1998. The industry got firmly behind the idea a couple of years later, and the Bush administration's budget calls for credits of up to $4,000 for hybrids and up to $8,000 for fuel cell vehicles.

The hybrids already on the road - the Toyota Prius and Honda Civic Hybrid and Insight - qualify for a clean fuels tax deduction, which can trim as much as $2,000 off the taxable income of a vehicle purchaser.

Charles Ing, Toyota legislative affairs manager, says his company still supports the more modest bill for hybrids and fuel cells. And he contends the Cox-Wyden bill is not incompatible with the earlier proposal.

Some lobbyists believe, however, that industries and interest groups do best with congressional tax writers when they are united on a single plan.

The views of other automakers on the Cox-Wyden bill were not immediately available, but a lobbyist for one, who asked not to be named, says the enthusiasm of people in government for fuel cells may be getting ahead of the technology.



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