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Rail News: Rail Industry Trends

Bill would provide small roads tax credits to fund infrastructure improvements


Reps. Jerry Moran (R-Kan.) and Dave Camp (R.-Mich.) recently introduced to the House the Local Railroad Rehabilitation and Investment Act (H.R. 876), which is designed to provide regionals and short lines federal tax credits to help fund infrastructure improvements.

The bill would authorize a tax credit against qualified track maintenance expenditures paid or incurred by a railroad after Dec. 31, 2003, and before Jan. 1, 2009. Qualified expenditures include funds used by Class IIs and IIIs to maintain or upgrade track, including roadbed, bridges and related structures.

The total tax credit would be capped at $10,000 for every track mile regionals and short lines own. The bill also would enable railroads to transfer credits they can't use to other roads, shippers, suppliers or contractors.

"Studies indicate that that it will take $7 billion in new investment for our nation's short lines to accommodate heavier rail cars," said Moran and Camp in a notice introducing the bill. "H.R. 876 is not intended to fund this entire rehabilitation. Rather, it is intended to help small railroads make the improvements required to grow traffic so they can earn the additional investment income needed to complete the $7 billion capital upgrade."

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More News from 2/27/2003