ASLRRA Announces Strong Congressional Support for Rail Tax Maintenance Credit Bill

Photo by David C. Lester

WASHINGTON, D.C. –– H.R. 516 - The Railroad Tax Maintenance Credit Modernization Bill now has 100 co-sponsors in the U.S. House of Representatives, according to the American Short Line and Regional Railroad Association.

The American Short Line and Regional Railroad Association (ASLRRA) represents the nation’s 603 short line freight railroads. Their announcement this week said that “The bill was introduced by two strong supporters of the short line industry and the 45G tax credit, Representative Mike Kelly [R-PA-6] and Representative Mike Thompson [D-CA-4], both members of the House Ways and Means Committee and the Chair and Ranking Member respectively of the Tax Subcommittee.”

ASLRRA goes on to say that “The 102 cosponsor count for H.R. 516 places the bill in the top two percent of all tax bills active in the 119th Congress in the House of Representatives, ranking ninth out of 434 bills to be precise. And of the top ten bills, H.R. 516 is one of only three bills that can be considered truly bipartisan with substantial support from both major political parties.”

The Railroad Track Maintenance Credit is also known as the 45G tax credit, which has been an effective vehicle for short lines to invest more of their funds to work on upgrading bridges and track, which is particularly important because “short lines operate one-third of the nation’s rail system, and are the origin or destination point of one in five cars shipping by rail.”

Photo courtesy Genesee & Wyoming

Chuck Baker, President of ASLRRA, said “The 45G tax credit has allowed short lines nationwide to invest in upgrading rails and bridges to modern standards—investments that have improved safety, fueled growth for shippers, and supported the economies of small towns and rural areas across the country. However, the credit has not accounted for inflation which, over time has eroded the power of the credit, and does not apply to short lines established since 2015. This bill, alongside its Senate counterpart, S. 1532, will update the credit to address these issues, so that the credit can continue to serve the country’s freight rail shippers as Congress intended. We are deeply grateful for the leadership of Representatives Kelly and Thompson, and the bipartisan support of the 101 Representatives who have joined them to date.” 

ASLRRA says that “The 45G tax credit currently allows for a $.40 tax credit for each dollar invested in upgrading short line track, up to a cap of $3,500 per mile of rail. It is widely considered an effective and successful public policy, however over time the cost to rehabilitate a mile of track has increased significantly. This legislation seeks to increase the cap per mile to $6,100, index the cost to inflation going forward, and allow expenditures on all short line-owned track to be eligible for the tax credit.”

ASLRRA would like to have this bill included in the next tax bill that is passed by the 119th Congress. To support this effort, there have been more than 500 Congressional meetings with short line industry leaders in the first six months of this year. In addition, many short lines will host Congressional delegations on their railroads during the August summer recess.

ASLRRA is seeking to have the bill included in the next tax bill that becomes law in the 119th Congress. 

Short line industry leaders have participated in more than 500 Congressional meetings in the first six months of the year in support of 45G modernization, and many will host Congressional delegations on their railroads during summer recess in August. 

For more information on the impact of the 45G tax credit, visit aslrra.org.