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Last week, the short-line tax credit was included in a new Senate bill aimed at extending expired or expiring tax provisions, according to the American Short Line and Regional Railroad Association (ASLRRA).

Tentatively titled “The Family and Business Tax Cut Certainty Act of 2012,” the bill would extend the Section 45G tax credit — which expired at 2011’s end — for two years retroactive to Jan. 1, 2012, ASLRRA officials said in an item included in the association’s “Views & News” newsletter released Aug. 3. The Senate Finance Committee approved the measure on Aug. 2.

“Final action on an extenders package will not occur until later this year,” said Adam Nordstrom of ASLRRA’s lobbying firm Chambers, Conlon & Hartwell L.L.C., adding that Congress members adjourned Aug. 2 for their August recess and won’t return until September. “Action on 45G has never happened before October, but has twice before happened in December.”

Meanwhile, the Short Line Railroad Rehabilitation and Investment Act (H.R. 721/S. 672), which proposes a longer short-line tax credit extension, continues to garner supporters in Congress. H.R. 721 is co-sponsored by 257 House members and S. 672 is co-sponsored by 51 senators. The co-sponsors represent a majority in both chambers and include large numbers of both Democrats and Republicans, ASLRRA officials said.

Originally enacted in January 2005, the Section 45G provision enables regionals and short lines to claim a tax credit of 50 cents for every dollar spent on infrastructure improvements, up to a cap of $3,500 per mile of owned or leased track. The tax credit helps fund more than $300 million worth of short-line infrastructure improvements annually, according to ASLRRA estimates.

The Family and Business Tax Cut Certainty Act of 2012 also would extend the transit commuter benefits and alternative fuels tax credit, which expired at 2011's end, to Dec. 31, 2013. On Jan. 1, the transit commuter benefit fell from $230 to $125 and the incentives for transit providers to fuel their fleets with compressed or liquefied natural gas were removed.