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Crapo, Lincoln Introduce Railroad Legislation

Bipartisan bill boosts short line freight transportation through tax incentives

Washington, DC - Senators Blanche Lincoln (D-Arkansas) and Mike Crapo (R-Idaho) have introduced legislation to extend the tax credit to increase the necessary investment in rehabilitation and upgrades for short line railroads. The announcement came as Crapo met with representatives of Watco Companies and other short line railroad companies in his Washington, DC office to discuss the legislation on "Railroad Day" on Capitol Hill. Watco operates rail services in eastern, southern and north-central Idaho.

Both Crapo and Lincoln are members of the Senate Finance Committee with jurisdiction over tax law. The legislation grants short line railroads a tax credit of 50 cents for every dollar the railroad spends on track improvements.

"Short line railroads are a lifeline for our small businesses by moving the product from the farm and factory to the distribution centers, and on to the stores and consumers. The Short Line Rehabilitation Tax Credit increases the necessary investment in track rehabilitation and upgrades to allow this freight to move safely, faster, and in heavier rail cars."

"These rail improvements not only create jobs; they can save rail lines that might otherwise go abandoned by other rail companies. The Lincoln-Crapo bill would extend the tax credit program for three years.

Watco Companies, based in Kansas, owns Watco Transportation Services which operates 19 short line railroads throughout the United States, including the Eastern Idaho Railroad and has operations in the Magic Valley and Palouse areas, including rail repair facilities in Rupert and Idaho Falls. Crapo has strongly supported these tax credits which helped spur improvements along the Eastern Idaho Regional Railroad lines near Burley when Crapo toured there in the summer of 2006.

"Every dollar invested in rail equals three dollars in economic output," said Rick Webb, Watco CEO. "Tax credits are value-added when you consider that everyone in the transportation cycle benefits. New jobs are created to perform the work; shippers receive the best service for their dollar and the public benefits from the efficiencies created by improved infrastructure."