Shortline tax credit gains 2,000th co-sponsor since 2004

Written by Mischa Wanek-Libman, editor
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The Short Line Railroad Rehabilitation Act, also referred to as 45G, reached a significant milestone this week when it gained its 2,000th co-sponsor since its first introduction in 2004.

The short line railroad track maintenance credit provides shortline and regional railroads a 50-cent tax credit for each dollar the railroad spends on track rehabilitation and maintenance up to $3,500 per mile of track owned or leased by the railroad, allowing small railroads to spend more of their revenue rehabilitating infrastructure that serves as a critical transportation connection for local shippers across the country.

Legislation to extend the credit has been passed by Congress five times and the American Short Line and Regional Railroad Association (ASLRRA) reports it has been consistently ranked as one of the top 25 most co-sponsored bills in the U.S. House of Representatives.

“The tremendous amount of support for Section 45G over the years is a testament to just how critical the provision remains to small freight railroads and their customers across the country,” said Rep. Lynn Jenkins (R-Kan).

Legislation to make the credit permanent, creating opportunity for badly needed investment predictability among small railroads has been introduced and it too is well on its way to attracting support from a record number of Republicans and Democrats in both the House and Senate. The current bi-cameral Building Rail Access for Customers and the Economy (BRACE) Act (S. 2595) (H.R. 4626) has been introduced by Senator Mike Crapo (R-Idaho) and Senate Finance Committee Ranking Member Ron Wyden (D-Ore) and Representatives Lynn Jenkins and Earl Blumenauer (D-Ore.).

“In 2004, ASLRRA and its member railroads proposed a solution to insure railroads reach customers across a wide swath of urban, rural and small town America by maximizing their ability to invest in critical infrastructure ,” said Linda Bauer Darr, President of ASLRRA. “That concept has managed to attract enormous, if not historic, bipartisan support in an often-divided Congress. Short line railroading is one of the most capital intensive industries in the country. Since 2005 short line railroads have plowed anywhere from 25 to 33 percent of their revenues into infrastructure improvements including during the difficult years of 2008 to 2010.2 The 45G tax credit has helped us make that significant investment possible. We thank each representative and senator that has stepped up to cosponsor this bill over the past six Congresses.”

Today, the shortline industry operates more than 50,000 miles of track in 49 states, approximately 38 percent of the national rail network, touching in origin or termination one out of every four cars moving on the national railroad system.

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