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A proposed tax credit bill that attracted rail industry support at the Railroad Day on Capitol Hill March 8 has finally entered the Senate. Yesterday, Sen. Trent Lott (R-Miss.) introduced the Freight Rail Infrastructure Capacity Expansion Act, which would establish a 25 percent tax credit railroads, shippers and other parties could apply toward the cost of improving freight-rail infrastructure.

Qualifying expenditures would include trackwork, grading, tunnels, signals, bridges, yards, terminals, intermodal transfer and transload facilities, and certain locomotives. Railroads, ports, shippers, trucking companies and other transportation-related businesses would be eligible for the credit.

“With highways and airways becoming increasingly congested, pressure is on the railroads to accommodate the rising tide of freight,” said Lott in a prepared statement. “[And] the future of our freight transportation system depends on creating an increasingly seamless integration of all modes – rail, trucking, waterway and air.”

During the next 15 years, freight traffic is expected to increase 67 percent, according to the Association of American Railroads (AAR).

“We must expand our transportation capacity to keep our nation’s competitive edge in today’s global economy,” said AAR President and Chief Executive Officer Ed Hamberger. “We can no longer build our way out of this problem by expanding highways. Freight rail must be included in the public-policy solution.”