The American Short Line and Regional Railroad Association (ASLRRA) reported on Oct. 30, 2015 that an extension of the Short Line Railroad Rehabilitation Investment Act, more commonly referred to as the 45G Tax Credit, now has 51 Senate sponsors, a majority. The House legislation, H.R. 721, secured a majority of 218 co-sponsors some months ago and currently has 246 sponsors. The credit, in place since 2005, expired on Dec. 31, 2014.
“This majority support sends a strong message to Congressional leaders that this legislation is worthy of passage by the full Congress,” said ASLRRA Chairman Ed McKechnie. “The 45G credit is a bi-partisan effort that allows small railroads to invest more of what they earn into our rail infrastructure. Both of these bills now have among the highest number of co-sponsors of all the tax bills introduced in this session of Congress. The real credit for this success goes to our members and their customers who have worked so hard to explain why investments in America’s infrastructure are important to our economy. These investments will allow our short lines to continue to grow their business, serve their customers and grow the American economy.”
Under the terms of the tax credit, a short line railroad must invest one dollar for every 50 cents in credit up to a credit cap equivalent to $3,500 per mile of track. According to data provided by the National Railway Tie Association, the tax credit has annually resulted in 500,000 to 1 million ties purchased over and above the short lines’ normalized purchases. Tie replacement and other track improvements have allowed short lines across the country to undertake projects that create the ability to service additional types of customer classes and freight, drawing more suppliers and producers of product to locations that are served by rail.
“The 45G Tax Credit is one of two initiatives that ASLRRA is focused on to achieve the highest levels of safety in our industry,” said ASLRRA President Linda Darr. “Better track means a safer environment for railroad workers, and more efficient service for our customers. The tax credit ensures that these small businesses can continue to maximize investment that is so important for those safety improvements.”
“Reaching this milestone is a clear indication of the widespread support for the 45G credit,” stated ASLRRA Legislative Policy Chairman Jerry Vest. “The hundreds of short line and regional railroads, along with the thousands of communities and customers that depend on their services, encourage Congress to act promptly to extend the credit.”