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RAILROADS OPPOSE RAIL PASSENGER TRUST FUND PROPOSAL

 WASHINGTON, June 22 /PRNewswire/ -- The freight rail industry today strongly opposed a proposal to require freight railroads and their customers to subsidize passenger railroad service. This would occur if Congress establishes an intercity rail passenger capital improvement trust fund with receipts from fuel taxes.
 In testimony prepared for the Subcommittee on Select Revenue Measures of the House Ways and Means Committee, Edwin L. Harper, president and CEO of the Association of American Railroads (AAR), said, "The AAR strongly opposes this proposal because our industry has been indelibly impressed with the disastrous consequences of previous national practices where the nation's freight railroad system subsidized passenger service around the country."
 Harper told the subcommittee that freight railroads must raise and invest approximately $3 billion a year for their own infrastructure expenses. "It would be unfair to ask freight railroads and their customers -- shippers of grain, coal, paper and forest products, chemicals, automobiles and a host of manufactured products -- to subsidize intercity passenger service," he stated.
 Harper urged the subcommittee to rely on existing funding sources for intercity rail passenger service, rather than proceeding with a trust find that depends on the freight rail segment. He explained that intercity and commuter rail service can depend on federal, state and local appropriations, tax-exempt financing, and assistance through the 1991 Intermodal Surface Transportation Efficiency Act and proposed high- speed rail legislation.
 Harper also expressed concern over proposals which would create an inequity between railroads and competitive truckers. The proposal would redirect the 2.5 cent-per-gallon fuel excise tax currently paid by truckers from deficit reduction (the general fund) to the Highway Trust Fund after Sept. 30, 1995.
 Under both the Senate and House tax proposals, railroads would be the only major industry to continue to pay 2.5 cents for deficit reduction, while their competitors -- the trucking industry -- would derive substantial benefit through infrastructure improvements.
 "Confronted with deficit taxes that are nearly 60 percent higher than their competitors, railroads will be disadvantaged in competing with less fuel-efficient trucks," Harper stated.
 "Railroads are prepared to pay the same deficit reduction as other modes of transportation, but the existing 2.5 cents-per-gallon deficit reduction rate should be allowed to expire as scheduled under current law," Harper insisted.
 -0- 6/22/93
 /CONTACT: Carol B. Perkins of the Association of American Railroads, 202-639-2552/


CO: Association of American Railroads ST: District of Columbia IN: TRN SU: LEG

IH-KD -- DC006 -- 4546 06/22/93 11:57 EDT
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Publication:PR Newswire
Date:Jun 22, 1993
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