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A new ally is backing the short line industry's lobbying crusade to extend tax-credit legislation: rail shippers. The National Industrial Transportation League (NITL), which counts many shippers among its 650 members, recently endorsed the Short Line Railroad Investment Act of 2007 (H.R. 1584/S. 881).

The legislation proposes to extend the short-line tax credit law — or Section 45G, which was enacted in 2005 and expires Dec. 31 — by three years to Dec. 31, 2010; minimize the Alternative Minimum Tax's impact on credits; provide eligibility for short lines formed in 2005 and 2006; and increase the mileage-based credit limitation from $3,500 to $4,500. Short lines and regionals currently can 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.

"Short-line railroads are playing an increasingly important role in the freight transportation system and the tax credit has proven a very cost effective way to maximize rehabilitation on these tracks," said John Ficker, president of NITL, which endorsed the original tax credit legislation in 2004.

The American Short Line and Regional Railroad Association is leading an effort to generate congressional support for the legislation. Currently, H.R 1584 has garnered 180 co-sponsors in the House and S. 881 has gained 34 co-sponsors in the Senate.