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6/9/2010



Rail News: Rail Industry Trends

Four congressmen unveil 'rail-car enhancement act'


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Today, U.S. Reps. Earl Blumenauer (D-Ore.), Kevin Brady (R-Texas), Bill Shuster (R-Pa.) and John Tanner (D-Tenn.) introduced the Green Railcar Enhancement Act of 2010 (H.R. 5478), which would provide a 25 percent tax credit for replacing or rebuilding old rail cars.

The tax credit would be limited to cars built in 2010 and 2011, and would require a minimum 8 percent increase in capacity or fuel efficiency.

The lawmakers believe the legislation can shift a portion of rail-car demand projected for between 2012 and 2014 to 2010 and 2011; help the rail-car supply industry survive this year and next; and ensure there’s a domestic supply of rail cars when the market rebounds.

“This is bipartisan legislation that will save a critical domestic industry,” said Blumenauer during a press conference held this morning, adding that the bill already has 50 co-sponsors.

The bill could generate the building or rebuilding of an additional 50,000 cars in 2010 and 2011 at an estimated tax-credit cost of about $800 million. The cost would be reduced by tax revenues generated from the additional economic activity. The bill also is expected to support 30,000 to 50,000 jobs, and enhance railroads’ fuel efficiency and emission-reduction efforts by replacing old cars with new.

The rail-car industry — which includes six car builders and 250 component suppliers — has lost 54,000 jobs during the past 18 months, said American Railcar Industries Inc. Vice Chairman James Unger during the conference. In addition, rail-car deliveries have dropped from 75,000 units in 2006 to a projected total of less than 10,000 units for 2010.

Along with rail-car industry constituents, the 1,200 businesses that own rail cars will benefit from the bill, said Brady during the conference.

Efforts to enact H.R. 5478 are being spearheaded by the Railway Supply Institute's American Railcar Institute Committee and several freight-car component suppliers. The bill has been referred to the House Committee on Ways and Means.

Jeff Stagl


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