Washington, D.C. - On Jan. 21, Ranking Member of the Ways and Means Subcommittee on Tax, Rep. Mike Thompson (D-CA-04), and Chairman of the Ways & Means Subcommittee on Tax, Rep. Mike Kelly (R-PA-16), announced the introduction of the Short Line Railroad Tax Credit Modernization Act, legislation that would make it easier to keep local rail lines operating and in good repair and improve commerce in communities nationwide.

"Short line rail is critical for rural and small communities to connect to suppliers and distributors. Expanding our tax credits to help ensure these rail lines are modernized and maintained just makes sense. Thank you to Rep. Kelly for partnering with me to reintroduce this legislation," said Thompson. 

"Short line rail service connects communities and provides rail service in small towns nationwide, including stops throughout Western Pennsylvania," said Kelly. "In some cases, short lines provide the only source for local companies to ship their products nationally. This legislation allows rail companies to continuing to provide safe and efficient service and provides a return on taxpayer investment."

“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for more than $8B in infrastructure investment by the short line freight railroad industry since its inception, but outdated caps and limitations are threatening its potency,” said Chuck Baker, President of the American Short Line and Regional Railroad Association. “We thank Representatives Kelly and Thompson for their bipartisan leadership in introducing this legislation to modernize the credit. 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." 

You can read the bill here.

BACKGROUND

The Short Line Railroad Tax Credit Modernization Act proposes to update the Section 45G short line tax credit by increasing the tax credit available for track rehabilitation and maintenance from $3,500 per mile to $6,100 per mile. It would also make more track eligible for the credit. Under current law, eligibility is based on maps of track that was owned or leased by short line railroad operators as of 2015. The bill would expand eligibility to all track owned or leased as of 2024.