THE 45G SHORT LINE RAILROAD TAX CREDIT
- SMALL BUSINESSES INVESTING IN AMERICA'S TRANSPORTATION FUTURE -
Short Line Railroad Rehabilitation and Investment Act of 2013
Rep. Lynn Jenkins (R-KS) along with Representatives Earl Blumenauer (D-OR), Rodney Davis (R-IL), and Dan Lipinski (D-IL), and Senators John Rockefeller (D-WV), Mike Crapo (R-ID), Ron Wyden (D-OR) and Jerry Moran (R-KS) have introduced legislation to extend the Section 45G short line railroad tax credit. Originally enacted in 2004, Section 45G creates a strong incentive for short line railroads to invest private sector dollars on freight railroad track rehabilitation. The credit expired on December 31, 2013.
Objectives of the Legislation
Section 45G creates an incentive for the private sector to invest in rail infrastructure by providing a tax credit of 50 cents for every dollar the railroad, or a qualified customer or supplier, spends on track improvements. The credit is capped based on a mileage formula. H.R. 721 and S. 411 propose the following:
- Extend 45G - Section 45G expired on December 31, 2013. This bill extends the provision through 2016 to provide important long-term planning certainty necessary to maximize private-sector transportation infrastructure investment.
- Allow eligibility for new short line railroads created after January 1, 2005 and before January 1, 2013 - Congress originally created a cutoff date of January 1, 2005 to avoid the creation of an incentive for large railroads to increase line sales. Since 2004, new short line railroads have been created, and several short lines have constructed new track to provide freight rail service to new rail customers. Expenses to maintain these lines should qualify for 45G. A cutoff date of January 1, 2013 is imposed to prevent the distortion of the economics of future line sales and to cap the score at a known number.
- Cap the Cost - As in previous years, the credit remains capped at the product of total miles of track and $3,500. An extension of current law has previously been "scored" at $165.5 million per year extended.
Broad Bi-Partisan Support
In the 110th, 111th, and 112th Congresses, legislation to extend 45G was co-sponsored by over 250 Representatives and 51 Senators, with broad representation from both Democrats and Republicans. Supporters recognize the fact that the credit allows these small businesses to maximize private investment which creates jobs and preserves valuable transportation infrastructure in areas of the country that can ill-afford to lose those assets.
The Case for Short Line Railroads
Over 550 short line railroads preserve nearly 50,000 miles of track that otherwise would have been abandoned. This track received little investment by its previous owners and must be upgraded and maintained if over 10,000 rail customers are to stay connected to the national main line rail network. These freight rail connections are critical to preserving the first and last mile of connectivity to factories, grain elevators, power plants, refineries, mines, and facilities that employ over 1 million Americans. While highway infrastructure is maintained by federal and state governments, freight rail infrastructure is maintained by private sector investments. Short lines use approximately 184 million gallons of fuel to move 10 million carloads of freight annually. Trucks would require 540 million gallons to move the same freight. Short lines save shippers 20% to 50% over comparable truck transportation. Short lines keep 30 million truckloads per year off the highway, saving billions per year in highway damage costs.
House Co-Sponsors - To Co-Sponsor H.R. 721, contact: Colin Brainard, w/ Rep. Jenkins (R-KS), at email@example.com or 202-225-6601; or David Skillman, w/ Rep. Blumenauer (D-OR), at firstname.lastname@example.org or 202-225-4811
Senate Co-Sponsors - To Co-Sponsor S. 411, contact: Mark Libell, w/ Sen. Rockefeller (D-WV), at email@example.com or 202-224-6472; or Rachel Johnson, w/ Sen. Crapo (R-ID), at firstname.lastname@example.org or 202-224-7391
Sponsors of Short Line Tax Credit Legislation
Sponsors of S. 411
Sponsors of H.R. 721 by State
Sponsors of H.R. 721 by District
Below is a list of H.R. 721 and S. 411 supporting documentation:
- List of H.R. 721 Co-sponsors - The most recent list of co-sponsors for H.R. 721 can be found by clicking here.
- List of S. 411 Co-sponsors - The most recent list of co-sponsors for S. 411 can be found by clicking here.
- 45G White Paper - A document stating the objectives and overview of the 45G tax credit; you may use for your own information or for congressional outreach.
- List of Historic Co-Sponsorships - A document naming everyone that has co-sponsored the past 4 bills.
- Section 45G as Currently Enacted - Document showing the legislative history and relevant statutory text of 26 USC 45G. Note: Not for tax or IRS compliance purposes. Seek professional tax advice before taking a tax position.
- Section 45G Success Stories - Before and after photos showing dozens of examples of 45G benefits across America.
- Customer Success Stories - A document providing brief success stories and endorsements of Section 45G from short line railroad customers.
- Various Congresspersons have issued statements, pledging support to the extension of section 45G. To view the text of these various statements, click on the Congressperson's name below.
- The House Ways & Means Subcommittee on Select Revenue Measures held a hearing on April 26, 2012 on Certain Expiring Tax Provisions. Many members spoke in favor of extending the 45G Short Line Railroad Tax Credit. Below are links to their written statements.
For more information please contact ASLRRA Washington Representatives email@example.com;
firstname.lastname@example.org; or email@example.com at 202-638-7790.