On Wednesday, U.S. Reps. Mike Kelly (R-PA) and Earl Blumenauer (D-OR) introduced legislation to help rail lines stay in operation and in good repair.
The Short Line Railroad Tax Credit Modernization Act would make the Section 45G short-line tax credit permanent. Currently, the tax credit is structured to give regional and short line railroads a 50-cent tax credit for each dollar they spend on track rehabilitation and maintenance projects, up to $3,500 per mile of owned or leased track.
“Short line rail service connects communities and provides rail service in small towns nationwide, including stops throughout Western Pennsylvania,” Kelly, chair of the House Ways & Means Subcommittee on Tax, said. “In some cases, short lines provide the only source for local companies to ship their products nationally. This legislation allows rail companies to continuing to provide safe and efficient service and provides a return on taxpayer investment.”
According to the American Short Line and Regional Railroad Association (ASLRRA), more than 600 short line railroads are in operation in the U.S., operating more than 47,500 route miles, or 29 percent of freight rail across the country.
“The 45G tax credit has been a powerful incentive for short lines to put more of their own funds to work upgrading track and bridges to modern standards, a benefit for the entire interconnected freight rail network, thousands of rail shippers in critical industries, and the American public. Short lines operate one-third of the nation’s rail system, and are the origin or destination point of one in five cars moving throughout the system,” said Chuck Baker, President of the ASLRRA, said. “This game changing policy has been responsible for more than $8B in investment to date, but outdated caps and limitations are threatening to erode its potency. Today, four leaders in Congress have pledged to act, enabling updates to the credit that will serve the rail industry, shippers, and the economies of small towns across the country for years to come.”