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12/6/2013
Yesterday, Sen. Charles Schumer (D-N.Y.) and Finger Lakes Railway President and Chief Executive Officer Mike Smith voiced support for extending the short-line tax credit through 2016. The Section 45G tax credit currently is scheduled to expire on Dec. 31.Finger Lakes Railway is in the process of negotiating with Norfolk Southern Railway to acquire an 11.5-mile stretch of track — known as the Corning Secondary Line — to gain a new direct connection to CSX Transportation's mainline in Lyons, N.Y. The line has been abandoned for several years and is in need of repairs, and the tax credit would help Finger Lakes Railway pay for the work, Schumer and Smith said in a press release.Originally enacted in January 2005, the Section 45G provision enables regionals and short lines to claim a tax credit of 50 cents for every dollar spent on infrastructure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.Because of the missing 11.5-mile link, cargo shipped to and from western destinations on the 118-mile Finger Lakes Railway are diverted 380 miles to as far as Selkirk, N.Y., to connect with the CSX mainline, Schumer and Smith said. Currently, more than 5,600 rail cars a year are detoured, adding an extra two days to transit times, they said."[Continuing] the expiring federal tax credit will help the Finger Lakes Railway quickly fix up a more direct route to interstate rail networks," said Schumer. "This more direct route, once achieved, will cut costs, increase productivity and create jobs for all of Ontario County's major employers who rely on the Finger Lakes Railway."The short-line tax credit already has provided significant benefits to regionals and short lines in upstate New York, such as to replace bridges or rail, retrofit lines or improve grade crossings, he said. For Finger Lakes Railway, the tax credit has offset $436,610 annually for repairs and various capital improvements.Meanwhile, the American Short Line and Regional Railroad Association (ASLRRA) is continuing to lobby for passage of the Short Line Railroad Rehabilitation and Investment Act of 2013 (H.R. 721/S. 411), which would extend the tax credit through 2016. The legislation so far has garnered 210 co-sponsors in the House and 37 co-sponsors in the Senate, according to the association.The tax credit has expired three other times in the past and has been extended each time, with Congress acting in the third or fourth quarter of the year after the credit has expired, ASLRRA officials said in an item included in the association's "Views & News" newsletter issued Dec. 4."Our congressional supporters and the association believe that trend will repeat itself, and that Congress will extend Section 45G later next year if we keep up the [lobbying] pressure," they said.