WASHINGTON — A tax credit to help short line and regional railroads pay for maintenance and infrastructure improvements has been included in a $1.4 trillion spending bill bound for the White House this week.
On Tuesday, the House passed a government spending bill that included an extension of the Short Line Railroad 45G Tax Credit that was first created in 2005. The tax credit has been extended on five different occasions but expired in 2017. The legislation passed this week will extend the bill for five years, retroactively, from 2018 through 2022.
The bill is expected to be approved in the Senate before heading to the White House. President Donald Trump is expected to sign the bill.
Since 2005, the tax credit has allowed short line railroads to privately invest over $4 billion. Chuck Baker, president of the American Short Line and Regional Railroad Association, says the extension of the credit will help companies across the country.
“This credit is critical to ensuring safe, reliable, cost-effective, and environmentally friendly rail service to rural and small-town America and the certainty of having the credit in place will spur additional short line railroad infrastructure investment,” Baker says. “If this is indeed signed into law, it will be a tremendous victory for the thousands of agricultural, energy, industrial, and manufacturing shippers that rely on short line railroad service every day to connect them to the domestic and global economies.”
Earlier this year, stand-alone bills extending the tax credit were introduced in the House and Senate. Although neither bill made it to a vote, Baker says work by the bill’s 296 House co-sponsors and 62 Senate co-sponsors made this week’s eventual passage a reality.
Cheap RRIF loans and now tax credits. That will keep the bubble in short line prices up for awhile longer.