Hearing: Hearing On Members Proposals On Tax Issues Introduced In The 109th Congress

Statement

Hearing: Hearing On Members Proposals On Tax Issues Introduced In The 109th Congress

I appreciate the opportunity to talk today about ways we can reform the tax system to spur innovation, save energy, and make our communities more livable.

Let me begin with a bill that I've introduced this Congress, which enjoys the bipartisan cosponsorship of 54 of my colleagues. H.R. 807, the Bike Commuter Act, amends the IRS code to include "bicycles" in the definition of transportation covered by the qualified transportation fringe benefit.

Adding bike commuting to the Transportation Fringe Benefit program incentivizes a mode of transportation that can reduce traffic congestion, alleviate air quality problems, and conserve energy. These are all major issues that every community and every level of government is dealing with to see how they can create and pay for solutions.

The Bike Commuter Act is a simple and low-cost effort that sends the right message about how the federal government can provide creative solutions that help with difficult problems. The Joint Committee on Taxation this year scored the bill at $78 million for the five-year period from 2006 to 2011.

Incentives for bicycle commuting have enormous potential to reduce single occupancy vehicle trips. In fact, a Rodale Press survey found that Americans want to have the opportunity to bike to work instead of driving, with 40% of those surveyed indicating they would commute by bike if safe facilities were available. The Bureau of Transportation Statistics found that bicycling is the second most preferred form of transportation after the automobile - ahead of public transportation.

With over 50 percent of the working population commuting 5 miles or less to work, bicycling offers great potential for reducing single-occupancy vehicle trips.

Commuters want to save on energy costs. Employers want healthier workers. Communities are seeking to reduce traffic congestion, improve air quality, and enhance neighborhood safety. The federal government can assist in these efforts by promoting bicycle use through a small change to the tax code.

The Bike Commuter Act is one simple step for providing the right incentives and for the federal government to be sending the right messages but there are several others that we should focus on, especially as it concerns energy.

As energy prices have shot up over the last year there has been endless discussions about which new energy source, which new technology can wean us from our over-reliance on oil and other fossil fuels. We hear about hydrogen cars, wind farms, solar energy, biofuels such as ethanol, and there is even some fascinating research going on in my home state of Oregon about how we can harness tidal action and waves to light and heat our homes.

These ideas and the research behind them are fascinating and I believe there is excellent potential behind each of these energy alternatives to move us towards a 21st Century energy plan.

However, one of the shortcomings I frequently see with our federal policies is how we pick winners and losers through unequal incentives. Additionally, Congress, playing budgetary games, has often refused to put in place tax credits for extended periods of time and instead renews the credits year to year, or sunsets them early.

I find it extremely important that we provide the tax credits that create the opportunities to move our energy policies out of the 1950s, but Congress must get out of the way of dictating which "new" energy source or technology will get us there. Let's create a level playing field that brings these domestic sources to the marketplace, but let's let the market determine what it invests in based on demand, efficiency and cost.

A renewable energy portfolio standard (RPS) has passed the Senate several times. It would require 10 percent of U.S. electricity by the year 2020 to come from renewable sources. Unfortunately, this was dropped from the 2005 Energy Bill, because this is the right kind of balanced standard that let's the market determine what renewable resource to invest in. We need to set the bar high and then provide the incentives to get us there.

The marketplace also needs the reliability and predictability of these credits to have a long enough horizon to make the investments pencil out. I would suggest that a tax credit should be in the code for a minimum of 10 years to give the marketplace the opportunity to utilize them and for Congress to evaluate a given credit and its impacts.

Another important element to the tax credits is to help bridge the gap in the initial infrastructure investments that pay dividends for years to come. Often times the up-front costs prevent, say a builder, from constructing in a manner that would more than pay for itself over time. It is unacceptable that we continue to build in a way today that costs families more in the long-run through increased energy costs when the products and building techniques are currently available.

The 2005 Energy Bill took some of these important steps, but most of the tax incentives and credits expire in 2 years. Congress should extend the tax credits to homebuilders that build homes projected to reduce heating and cooling energy use by 50 percent. Everyone wins - builders save dollars through tax credits, families save dollars through lower energy bills, and the nation reduces its dependence on fossil fuels and takes a step in addressing global warming.

Manufacturers of household appliances are currently eligible for tax credits for producing efficient models of dishwashers, washing machines, and refrigerators. These also end in 2007, which doesn't fully leverage the investments these manufacturers would make in researching more efficient models if the credits remained in place for a reasonable amount of time.

I thank the Committee for its time and I urge the consideration of the Bike Commuter Act, H.R. 807, as a simple and low-cost effort that levels the playing field for commuters and sends the message that Congress should be sending to our communities - that we support efforts to reduce energy consumption, ease traffic congestion, and encourage healthy activities as a part of our daily routines.

I will continue to support and legislate for tax credits that bring our energy policies to where they should be in the 21st Century.

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