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Yesterday, Union Pacific Railroad announced that New Mexico Gov. Susana Martinez signed a locomotive fuel tax deduction bill, which will enable the Class I to begin building a rail facility near Santa Teresa, N.M., in June.

To be located west of Santa Teresa Airport on a 2,200-acre site, the facility will include fueling areas, crew change buildings, an intermodal yard and an intermodal ramp with an annual lift capacity of up to 250,000 containers.

Slated for completion in 2015, the facility will support more than 600 jobs when it reaches full capacity in 2025, according to UP. The project’s estimated overall economic impact for the state exceeds $500 million, UP officials said in a prepared statement.

“Our strategic investment in this new facility helps improve capacity and enhance efficiency on a key part of our network, while also demonstrating our long-term commitment to deliver premium service to our customers," said UP Chairman, President and Chief Executive Officer Jim Young.

Under the new "Locomotive Fuel Tax Gross Receipts Deduction" law, UP won’t pay New Mexico taxes on diesel for its locomotives beginning in July 2013, if construction on the project is under way. The neighboring states of Arizona and Texas don't impose a locomotive fuel tax.