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Rail News: Rail Industry Trends

Short-line association rallies support from politicians, shippers for tax-credit extension bills


The short-line industry continues to garner political support for legislation aimed at extending a tax credit law beyond 2007.

As of July 26, 112 U.S. House members had signed on as co-sponsors of the Short Line Railroad Investment Act of 2007 (H.R. 1584), which would extend the tax credit’s expiration date from Dec. 31, 2007, to Dec. 31, 2010; minimize the Alternative Minimum Tax’s impact on credits; provide tax-credit eligibility for new short lines formed between Jan. 1, 2005, and Jan. 1, 2007; and increase the mileage-based credit limitation from $3,500 to $4,500.

In addition, 30 senators had agreed to co-sponsor companion bill S. 881, according to the American Short Line and Regional Railroad Association (ASLRRA), which is promoting the legislation in conjunction with lobbyist firm Chambers, Conlon & Hartwell L.L.C.

“I am particularly encouraged by the fact that our co-sponsors are split almost evenly between Democrats and Republicans,” said ASLRRA President Richard Timmons in a prepared statement.

The association and its lobbyists also have convinced more than 1,000 rail shippers and local economic development officials to endorse the legislation.

“There is growing unanimity among railroad customers that the short-line tax credit has contributed to more competitive, efficient and safer railroad service,” said Russ Harrison, owner of rail shipper Harrison Gypsum and chairman of short-line shipper coalition Saving Our Service. “The 1,000 customer facilities that have endorsed the tax credit extension range from the smallest family owned grain elevators to larger facilities owned by such companies as International Paper, Kimberly-Clark, General Mills and Nucor Steel.”

Enacted in 2005, the Railroad Track Maintenance Credit (Section 45G of the U.S. tax code) enables regionals and short lines or other eligible taxpayers to earn 50 cents in tax credits for every dollar spent on qualified infrastructure improvements. The credit cap is determined by multiplying track miles owned or leased by $3,500.

Contact Progressive Railroading editorial staff.

More News from 7/30/2007