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2/5/2009



Rail News: Rail Industry Trends

Freight-rail tax credit bill could be a boon for Texas, rail association says


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The Freight Rail Infrastructure Capacity Expansion Act of 2009 (H.R. 272) could greatly benefit Texas, which is home to 10,000 miles of tracks — or more than any other state — according to the Texas Rail Relocation and Improvement Association, a coalition of state, county and municipal elected officials and other groups that aim to improve transportation throughout Texas.

Introduced last month by Reps. Kendrick Meek (D-Fla.) and Eric Cantor (R-Va.), the bill proposes a 25 percent federal tax credit for railroads and other companies that invest in new track, terminals or other infrastructure improvement projects designed to increase freight-rail capacity. H.R. 272, which currently has seven co-sponsors, has been referred to the House Committee on Ways and Means.

"The tax incentive … could be coupled with money from the Texas Rail Relocation and Improvement Fund to significantly bolster the state's freight-rail system," said Bruce Todd, the association’s executive director, in a prepared statement. "Unfortunately, Texas state legislators have not allocated any money for the Rail Relocation and Improvement Fund since voters authorized [it] in 2005. We urge Texas lawmakers to do their part to invest in freight rail and in the future economic growth of our state by putting money into the fund."

Any state funding for rail relocation and improvement projects would be balanced with private investments from railroads, he said.

H.R. 272 would trigger more rail capacity nationwide, according to the Association of American Railroads (AAR). A study conducted by Cambridge Systematics Inc. in 2007 found that additional freight-rail investment is needed because, without it, 30 percent of the nation’s primary rail miles will be overused by 2035, causing rail congestion and highway gridlock, the AAR said.

The study also determined that $148 billion will need to be spent on freight-rail capacity during the next 25 years to meet demand, which is projected to double in that timeframe.


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