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Last week, Sens. Kent Conrad (D-N.D.) and John Ensign (R-Nev.) introduced the Freight Rail Infrastructure Capacity Expansion Act of 2010 (S. 3749), which aims to encourage private capital investments in freight rail and help expand rail capacity.

A companion bill to H.R. 1806 — a measure introduced last year by Rep. Kendrick Meek (D-Fla.) that currently has more than 100 House co-sponsors — S. 3749 would provide two tax incentives: a 25 percent tax credit for capacity expansion expenditures on new freight-rail infrastructure and a vehicle for expensing all qualifying rail infrastructure capital expenditures.

The incentives would apply to railroads, shippers, ports and trucking companies. Qualifying expenditures would include track, tunnels, signals, train control devices, locomotives, bridges, yards, terminals, and intermodal transfer and transload facilities.

On Friday, the Association of American Railroads (AAR) voiced support for S. 3749, which would spur future freight-rail investments that are needed to “take full advantage of freight rail’s unparalleled potential to promote economic recovery, provide much-needed jobs, take trucks off the highways, save fuel, and reduce CO2 emissions,” according to the association.

“America has great expectations for our nation’s railroads — to provide not only the vital connection for U.S. business to the global marketplace, but also the underlying network for expanded intercity passenger and high-speed rail,” said AAR President and Chief Executive Officer Ed Hamberger. “This bill offers incentives for our highly capital-intensive business, and will ensure freight rail can continue to meet these expectations.”