Bill Would Grant Tax Breaks For Safety, Security Devices
For years the trucking industry has contended that the government should promote safety by granting tax breaks for expensive safety technology. The notion typically draws the Washington nod of appreciation - which means "nice idea, good luck." But now it has made its way from conversation to the table, in the form of a bill awaiting action by the House Ways and Means Committee.
The Intelligent Vehicle Highway Safety Act of 2004 would let truck buyers exclude up to $5,000 from the federal excise tax, based on the cost of safety or security devices they either specify or retrofit beginning in January 2005. It also would let truck and automobile buyers deduct up to $1,000 of the cost of the devices from their income tax. The size of that deduction would be gradually reduced in subsequent years, until it is phased out altogether in 2010.
The bill does not name the devices but spells out what they do. Systems that signal an impending collision are on the list, as are rollover warning and lane departure warning devices. Also on the list are devices that help manage fatigue, and provide geographic location and tracking. Security devices listed are electronic seals, biometric identifiers and electronic ignition locks. For automobiles, the list includes devices that provide collision notification, roll stability or driver workload adjustment.
Truck products that might fit these descriptions are the Eaton Vorad Collision Warning System, Qualcomm's OmniTracs satellite positioning system and the Meritor Wabco rollover warning system.
Behind the measure is an ad hoc group of automotive suppliers, calling itself the Intelligent Vehicle Technology Coalition. Among its members are Qualcomm and Meritor Wabco, the joint venture between drivetrain builder ArvinMeritor and brake builder Wabco. Also supporting the coalition are the Motor Equipment Manufacturers Assn., Motorola, Valeo and Iteris.
"Nothing is more important than the safety of our customers," said D. Mike Pennington, senior director of Global Marketing Communications for Commercial Vehicle Systems and Aftermarkets, ArvinMeritor. "From the driver's safety and peace of mind, to lower insurance costs, to improved vehicle control - all are paramount in engineering and manufacturing advanced, complete braking systems."
On Capitol Hill the bill (H.R. 4931) is backed by Reps. Phil Crane, R-Ill., Mike Rogers, R-Mich., and Sandy Levin, D-Mich. It has not been introduced in the Senate - that will be the next step in the process of getting it passed, said George Reagle, a consultant to the IVT Coalition.
Reagle, the former chief of the federal truck safety program, said that the biggest obstacle to passage will be answering the inevitable question - "How much will it cost?"
According to an analysis prepared for the coalition, the deduction for automobiles would cut federal income tax revenues by up to $700 million over 10 years. The truck exclusion would cut excise tax revenues by $500 million in 2005.
The coalition argues that the benefits will far outweigh the costs. "Intelligent vehicle technologies are emerging and demonstrating significant benefits in reducing the number and cost of highway crashes," said Chuck Eger, director of driver safety for Motorola and spokesman for the coalition.
The total annual bill for highway accidents exceeds $400 billion, and widespread use of these systems could cut accident rates by as much as 60%, according to the coalition's analysis.
That may be true but it does not solve the immediate political problem. The costs of the bill are incurred directly while the benefits are deferred - a significant hurdle in these times of soaring budget deficits.
The coalition expects to make its case this fall when Congress returns from its August recess. An obvious vehicle for the measure would be the highway reauthorization bill that is now approaching the final stages of passage (See related story). But that connection is not likely to happen because the fight over money in that bill is simply too intense, industry lobbyists say.
Reagle and Eger are optimistic that, with a bill introduced, a case can be made for the tax breaks, whether as a stand-alone measure or linked to some other legislation.
—Oliver B. Patton, Washington Editor
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