WASHINGTON — In a notably bipartisan move, the top Republican and Democrat on the House Ways & Means Subcommittee on Tax have introduced a bill to update a tax credit that has been crucial to short line infrastructure investment.
U.S. Reps. Mike Kelly (R-Pa.), chairman of the subcommittee, and Mike Thompson (D-Calif.), the ranking member, today (Jan. 21, 2025) introduced the Short Line Railroad Tax Credit Modernization Act, which increases the amount of the Section 45G credit for trackwork from $3,500 per mile to $6,100 per mile, and adds an adjustment for future inflation. The full text of the bill is available here.
“The 45G tax credit has been an incredibly successful public-private partnership, responsible for more than $8B in infrastructure investment by the short line freight railroad industry since its inception, but outdated caps and limitations are threatening its potency,” American Short Line and Regional Railroad Association President Chuck Baker said in a press release from Kelly’s office. “… The passage of this bill will enable short line railroads to provide efficient and safe access to U.S. and world markets for thousands of industrial, agricultural, and energy shippers and grow the economies of the small towns and rural communities in which they operate.”
“This legislation allows rail companies to continuing to provide safe and efficient service and provides a return on taxpayer investment,” Kelly said. “Short line rail is critical for rural and small communities to connect to suppliers and distributors,” said Thompson. “Expanding our tax credits to help ensure these rail lines are modernized and maintained just makes sense.”
At this time short lines are definitely a help for both shippers and the class 1s. Anything to improve the performance and bottom line of short lines has to be important.