Wednesday, June 24, 2009

ASLRRA: Short line tax credit gains ground in Congress

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The American Short Line and Regional Railroad Association said Wednesday that bipartisan Congressional support was growing to extend and improve the short line railroad tax credit. House Resolution H.R. 1132, introduced by Rep. Earl Pomeroy (D-N.D,) and Rep. Jerry Moran (R-Kan.), has notched 101 co-sponsors, while counterpart Senate bill S. 461, introduced by Sen. Blanche Lincoln (D-Ark.) and Mike Crapo (R-Idaho), currently has 22 co-sponsors.

ASLRRA notes that more than 1,000 businesses relying on short line and regional railroads also are on record supporting the legislation, which would extend and improve the Short Line Rehabilitation Tax Credit, allowing short line and regional railroads to undertake critical projects, assuring continued investment in the nation’s transportation infrastructure.

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The Section 45G Railroad Track Maintenance Credit is set to expire on December 31, 2009. The legislation proposes the credit be extended for three years, changed to allow eligibility for new short line railroads and an increase in the credit limitation.

The tax credit helps small railroads maximize infrastructure spending, which is important for railroads that serve small businesses that do not ship volumes high enough to fund all the rehabilitation needs of the railroad. The credit allows the railroad to take on and complete track upgrades quickly and efficiently. ASLRRA asserts this is particularly important at a time when the federal government is trying to spur immediate economic activity.

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“America’s short line and regional railroads play a critical role in our nation’s transportation infrastructure by connecting rural communities, strengtheninglocal economies and protecting our environment,” said ASLRRA President Richard F. Timmons (photo at left).  “As our economy is on the cusp of recovery, the tax credit is timely and vital to the small freight railroads and the local businesses and communities that rely on them to ship local products, create local jobs, and even divert trucks off of local roads.”

Rep. Pomeroy, author of H.R. 1132, said in a statement, "Small freight railroads are critical to the continued growth of the agriculture and oil and gas industries in North Dakota, and across the country. I believe the strong level of bipartisan support for this legislation demonstrates the impact short line railroads have on our economy, and I am confident that support for this legislation will continue to grow.”