A bill that would make permanent a tax credit that assists short line railroads in upgrading their track and bridges so they can handle modern freight cars recently achieved a bicameral majority Congress.
The legislation, titled the Building Rail Access for Customers and Economy (BRACE) Act, currently has a total of 226 cosponsors in the House of Representatives and 51 cosponsors in the Senate.
Under the terms of the credit, known as 45G, short line railroads must invest one dollar for every 50 cents in credit up to a credit cap equivalent to $3,500 per mile of track, which allows the industry to invest more revenue for efficiency and safety upgrades.
First implemented in 2005, the credit has since led to the investment of approximately $4 billion in rail infrastructure. In 2015, 2,140 miles of rail were improved, 5.27 million ties were replaced, and companies within the industry spent $1.12 million, or 24 percent of total revenue, on rail related infrastructure improvements.
“Reaching this milestone is a clear indication of the wide-spread support for the 45G credit,” Jerry Vest, Legislative Policy Chairman of the American Short Line and Regional Railroad Association (ASLRRA), said. “Short line and regional railroads, suppliers to our industry, and the thousands of communities that would not have access to the national rail network without us, all understand the importance of this credit: It is critical for the competitiveness of the 10,000 customers served by short line railroads.”
The credit officially expired on December 31, 2016.