January 24, 2019

Crapo, Wyden Lead Bipartisan Bill to Make Rail Investment Tax Credit Permanent

Provides certainty to rail customers, boost rural economic development

Washington, D.C. – Idaho Senator Mike Crapo and Oregon Senator Ron Wyden today introduced the Building Rail Access for Customers and the Economy (BRACE), Act, which would make permanent a critical tax credit used to repair and upgrade short line railroads. 

“Our agriculture communities rely on small business freight railroads to connect their products to markets across the nation and around the globe,” said Crapo.  “These are crucial economic corridors that serve our communities across the nation.  This measure will allow short line railroads to make long-term plans for infrastructure repairs and upgrades, improving the link between our rural communities and the national freight railroad network.” 

“Short line and regional railroads provide an essential economic link for small manufacturers and communities in Oregon and across the nation,” said Wyden. “This legislation will make sure these railroads have the certainty they need to keep every mile of their tracks up and running as they move goods made and grown in our state to factories, grain elevators, mills, and other parts of our economy." 

Crapo and Wyden’s legislation would make permanent a tax provision used to repair and upgrade short line railroads, which are defined by the Surface Transportation Board as railroads that generate between $36 and $458 million annually that move largely agricultural and manufacturing freight.  In Idaho, this type of tax credit, secured previously by Crapo in other legislation, is credited in part for a rail expansion project that has benefited communities across Idaho being served by short line railroad. These communities include Idaho Falls, Burley, Twin Falls, Boise, Cottonwood, St. Maries, Bovill, Spalding, Harvard, Moscow, and Lewiston,   Making this tax credit permanent would allow communities to repair, maintain, and upgrade additional short line railroads nationwide 

“On behalf of our short lines railroads in Idaho and Oregon, as well as the over 600 short lines across the country – we thank Senator Crapo and Senator Wyden for their past and continued leadership in helping the communities we serve – most of them rural – stay connected to the national freight network. The 45G short line tax credit remains instrumental in allowing us to more safely and efficiently serve our Customers by driving greater investment into our railroads,” said Laura McNichol, Senior Vice President for Government and Industry Relations for WATCO companies, which has short like rail operations in Idaho. 

Since 2006, Congress has acted periodically to extend the credit, often retroactively.  This uncertainty causes private investment in short line rail to decline, reduces safety and customer service, and provides uncertainty to businesses, farmers, and employers that cannot be globally competitive without freight rail.  In addition to making this tax credit permanent, Crapo and Wyden’s BRACE Act would provide a safe harbor to allow credits to retroactively be allocated to investments made in 2018, as the credit was last extended only through December 31, 2017. 

Crapo and Wyden’s bill enjoys bipartisan support from senators Blumenthal (D-Connecticut), Casey (D-Pennsylvania), Inhofe (R-Oklahoma), Isakson (R-Georgia), Moran (R-Kansas), Roberts (R-Kansas), Schumer (D-New York), Stabenow (D-Michigan), Thune (R-South Dakota), and Wicker (R-Mississippi).

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