ASLRRA: Senate Finance Committee considers measure to extend short-line tax credit

The Senate Finance Committee met on Tuesday to debate legislation introduced by Chairman Orrin Hatch (R-Utah) that would extend expiring tax credits, including the Section 45G railroad track maintenance credit that expired at 2014's end, according to the American Short Line and Regional Railroad Association (ASLRRA).

The Short Line Railroad Rehabilitation and Investment Act of 2015 (S. 637) introduced by Sens. Ron Wyden (D-Ore.) and Mike Crapo (R-Idaho) in March has so far garnered 38 Senators as cosponsors, ASLRRA officials said in a press release. Ten senators signed on in the past three weeks. A similar bill in the House (H.R. 721) so far has garnered 222 cosponsors.

The Section 45G provision enables regionals and short lines to claim a tax credit of 50 cents for every dollar invested in track rehabilitation, up to a cap equal to $3,500 times their total track miles.

"The 45G tax credit is absolutely critical to our industry, allowing for continuous investment in the upgrading and maintenance of track, which is a private sector investment in America’s future economic success," said ASLRRA President Linda Darr. "A safe, well-maintained rail infrastructure is the basis of a strong safety commitment. The 45G tax credit allows our members to invest their own capital at a pace that meets the needs of their customers, many of whom would otherwise be cut off from the national freight network."

Hatch and Wyden included language in the latest bill that would make short-line infrastructure investments made between Jan. 1, 2005, and Jan. 1, 2015, eligible for the tax credits. Such language is the first time it's appeared in a bill in the history of the short-line industry's effort to obtain and extend the tax credits, ASLRRA officials said.

Crapo also proposed an amendment that would make the 45G tax credit permanent, ensuring stable and long-term tax relief and infrastructure investment for small railroads, they said. It's the first time permanency of the credit has been discussed in the Senate Finance Committee, said ASLRRA Chairman and Watco Cos. LLC Chief Commercial Officer Ed McKechnie.

"The permanency of a tax credit would enable small railroads to plan more effectively and efficiently for capital improvements," ASLRRA officials said.