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Rail News Home Federal Legislation & Regulation

7/23/2012



Rail News: Federal Legislation & Regulation

Majority of Congress backs short-line tax credit extension legislation, ASLRRA says


Last week, the American Short Line and Regional Railroad Association (ASLRRA) secured the 51st co-sponsor of the Short Line Railroad Rehabilitation and Investment Act (H.R. 721/S. 672) in the Senate. The legislation — which has garnered 257 co-sponsors in the House — now has reached a milestone by securing a majority of members in both chambers of Congress, ASLRRA officials said in a prepared statement.

“In both cases, the co-sponsors represent large numbers of both Democrats and Republicans,” they said.

The legislation would extend the Section 45G short-line tax credit — which expired on Dec. 31, 2011 — for one or more years and allow tax credit eligibility for certain new short lines. Originally enacted in January 2005, the Section 45G provision enables regionals and short lines to claim a tax credit of 50 cents for every dollar spent on infrastructure improvements, up to a cap of $3,500 per mile of owned or leased track. The tax credit helps fund more than $300 million worth of short-line infrastructure improvements annually, according to ASLRRA estimates.

“The short line rehabilitation tax credit has been tremendously successful in maximizing private investment in railroad infrastructure … [and] it allows small businesses to invest more of what they earn in track improvements,” said ASLRRA President Richard Timmons.
 
The legislation’s chief Senate sponsor Sen. Jay Rockefeller (D-W.Va.) and his leading Republican co-sponsor Sen. Mike Crapo (R-Idaho) helped lead a bi-partisan effort that resulted in the Senate milestone, ASLRRA officials said.
 
“This tax credit would mean better, safer railroad track and more reliable, competitively priced railroad service for companies to transport their products,” said Rockefeller. “It is particularly important for rural areas like West Virginia where short line service is often the only railroad service available for many companies trying to ship their products.”
 
Both the Senate and House tax writing committees are considering an “extenders package” that would extend various tax provisions that either already have or will expire shortly, ASLRRA officials said.


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