The American Short Line and Regional Railroad Association (ASLRRA) announced October 4 that the current bi-cameral Building Rail Access for Customers and the Economy (BRACE) Act (S. 2595) (H.R. 4626) has achieved majority in the Senate, with 51 co-sponsors, and in the House of Representatives with 221 co-sponsors.
ASLRRA says the BRACE Act will provide long-term certainty for the 45G small railroad tax credit, creating opportunity for badly needed investment predictability for small railroads and suppliers to the railroad industry. The S. 2595 was introduced by Senator Mike Crapo, R-Idaho and Senate Finance Committee Ranking Member Ron Wyden, D-Ore, and H.R. 2626 was introduced by Representatives Lynn Jenkins (R-KS), Earl Blumenauer (D-OR).
“We thank Congress for getting behind the BRACE Act and particularly our lead sponsors who worked so hard to make this possible. Our members have worked tirelessly in the pursuit of this piece of legislation, which is so critical to our industry. Our short line railroad members provide the origin and termination of many of the freight shipments on the national rail system, getting our customers’ goods to market,” said Linda Darr, President of ASLRRA. “We are pleased that the majority of members in Congress feel so strongly about this effort that they have signed on as co-sponsors to the 45G tax credit for many years.”
The short line railroad track maintenance credit provides short line 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.
“The BRACE Act is supported by key agricultural and industrial sectors of the American economy. These companies depend on short line railroads to move a tremendous variety of goods and services in an efficient and cost-effective manner,” said Jerry Vest, Senior Vice President of Government & Industry Affairs, Genesee & Wyoming Railroad Services, Inc., and the Chairman of ASLRRA Legislative Policy Committee. “Over 572 short line customers, representing over 1605 locations, have come together in a formal statement to Congress that they need the Short Line Tax Credit to be extended. Additionally, the American Association of State Highway and Transportation Officials (AASHTO) has called on Congress to enact the BRACE Act. They understand the critical nature of short line rail transportation in their states.”
Legislation to extend the credit has passed the Congress five times, and has been consistently ranked as one of the top 25 most cosponsored bills in the House.
Since 2005 short line railroads have reinvested anywhere from 25 to 33% of their revenues into infrastructure improvements including during the difficult years of 2008 to 2010.
“Our small railroads have never shied away from investing in their businesses to provide a safe and competitive mode of transportation. The 45G tax credit has been extremely successful in allowing us to invest to provide even better service to our customers. However, depending on a reauthorization strategy has hampered the planning for investment as many projects are years in the making,” share Judy Petry, President of Farmrail System, Inc. and Chairman of ASLRRA. “The BRACE Act would provide certainty going forward, and will promote further investment in our industry.”
Today the short line industry operates over 50,000 miles of track in 49 states, approximately 38% of the national rail network, touching in origin or termination one out of every four cars moving on the national railroad system.