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H. R. 4205

Tax incentives for hydrogen fueling stations

Rep. Chris Cox, Chairman, House Policy Committee

By providing a 50% tax credit for the installation of hydrogen fueling stations, H.R. 4205 will help pave the way for environmentally-friendly hydrogen-fueled cars.

Hydrogen power has the promise to dramatically reduce smog in urban environments, improve human, animal, and plant health, lessen our dependence on foreign oil, and cut greenhouse gas emissions. Moreover, according to the Natural Resources Defense Council, one of the nation's most prominent environmental advocacy groups, "One of hydrogen's primary advantages is that it can be produced from a diverse number of entirely domestic and renewable sources." However, in February 2004, the National Academy of Sciences reported that "hydrogen as a fuel will not be widely used until a nationwide safe and efficient infrastructure is in place." Currently, there are only a handful of hydrogen filling stations in place around the U.S. Significant investment in hydrogen distribution and retail sales networks will likely await heavy retail demand. It's the classic 'chicken and egg' problem. The automakers have never been in the gasoline business, and have expressed no interest in the hydrogen business. But without widely available refueling stations, who will buy hydrogen-fueled vehicles? A nationwide infrastructure of hydrogen fueling stations is not currently in prospect-and may never be, without millions of Americans driving hydrogen-fueled cars. H.R. 4205 will provide a powerful incentive for the creation of a network of hydrogen fueling stations that is essential for consumers to be able to use hydrogen cars.

H.R. 4205 -- dramatic effect, with little revenue cost: A future of hydrogen-fueled cars is no certainty, but we can tip the odds in its favor for a minimal revenue impact on the Federal budget. JCT estimates that this legislation will cost only $12 million over 10 years.

Frequently Asked Questions: Is this a permanent addition to the tax code? No, the credit expires at the end of 2013. Is the credit refundable? No, but if it exceeds the installer's tax liability for the taxable year, the remainder can carry over to the next year.

For further information, or to co-sponsor, call Howard Fienberg at 5-5611.



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