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A freight-rail tax-credit bill is back in Congress. Yesterday, Sens. Trent Lott (R-Miss.) and Kent Conrad (D-N.D.) introduced the Freight Rail Infrastructure Capacity Expansion Act (S. 1125), which proposes to provide a 25 percent tax credit for capital expenditures made by railroads, shippers, ports, trucking companies and other transportation businesses to build or expand track, intermodal facilities, yards or other rail infrastructure, or to acquire locomotives.

In July 2006, Lott introduced a similar bill to the Senate, but the measure died in last year’s Congress.

The bi-partisan bill is necessary to spur freight-rail infrastructure investments since the U.S. Department of Transportation projects a 67 percent spike in freight traffic by 2020, Association of American Railroads (AAR) officials claim.

“This legislation … offers a proactive approach to dealing with the central challenge of how to move more freight without causing more gridlock on our highways,” said AAR President and Chief Executive Officer Edward Hamberger in a prepared statement.

S. 1125 is backed by key businesses and trade associations, including the U.S. Chamber of Commerce, National Retail Federation, American Association of Port Authorities, National Mining Association, Arch Coal, Chevron Phillips Chemical Co., Evergreen America and the Waterfront Coalition, AAR officials said.

“As commerce continues to expand, retailers support this and other efforts to ensure the nation’s rail system can make necessary investments to meet growing demand from all rail customers well into the future,” said National Retail Federation Vice President Erick Autor.