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Rail News: Rail Industry Trends

Short-line tax credit extension gains congressional backers; Iowa short line lands USDOT grant


Lobbyists seeking to extend short lines’ infrastructure-improvement tax credit beyond year’s end marked a milestone last week. They garnered enough co-sponsors for the Short Line Rehabilitation Tax Credit bill (H.R. 1132/S. 461) in the House (240) and Senate (51) to represent a majority of those respective chambers.

The bill proposes to extend the Section 45G railroad track maintenance credit, which is set to expire on Dec. 31, an additional three years. H.R. 1132/S. 461 also would enable track acquired or created between 2005 and 2009 to qualify for the tax credit and increase the credit limitation from $3,500 per mile of owned or leased track to $4,500.

Enacted in 2004 and extended in 2008, Section 45G currently enables regionals and short lines to claim a 50 percent tax credit for qualified track maintenance expenditures. The tax credit helps support more than $330 million in infrastructure improvements annually, according to the American Short Line and Regional Railroad Association.

Co-sponsors are encouraged by the “strong level of bipartisan support” for the bill, said Rep. Earl Pomeroy (D-N.D.), H.R. 1132’s lead sponsor, in a prepared statement.

Meanwhile, an Iowa short line has landed federal funds for a major infrastructure restoration project completed earlier this year. The U.S. Department of Transportation (USDOT) provided $7 million to the Cedar Rapids and Iowa City Railway Co. (CRANDIC) for repairs to a Cedar Rapids railroad bridge that was heavily damaged during a flood last year.
The USDOT grant covers 80 percent of the cost for the project, which called for rebuilding a portion of the bridge, repairing or replacing damaged signals, and repairing the mainline. The grant required a $1.74 million funding match by the Iowa DOT.