45-G permanence inches closer
(Source: Railway Age 02/15/2019)
Written by William C. Vantuono, Editor-in-Chief
On Feb. 11, HR 510, which calls for permanence of the 45-G short line tax credit, formally received its 100th co-sponsor. The bill, introduced Jan. 11 by Reps. Earl Blumenauer (D-Ore.) and Mike Kelly (R-Pa.), “has rapidly garnered significant bi-partisan support, as it has every Congress since the credit was introduced in 2004,” said the American Short Line and Regional Railroad Association (ASLRRA). “House support for this legislation is growing at a record pace, with 106 co-sponsors in just four weeks.”
HR 510’s companion bill, S 203, has been introduced in the Senate, where it has already garnered 18 co-sponsors, including the original 11, from both sides of the aisle.
“Clearly there is at least one thing Congress can agree on: the need to invest in small railroad infrastructure that keeps goods moving from small town and rural America into the U.S. and world economies,” said Chuck Baker, newly installed ASLRRA President. “Short lines provide the critical first and last mile from farms, energy facilities, and factories to reach their domestic and international suppliers and customers. In five states, we are the only form of rail transportation, and in 36 states, we operate more than 25% of the railroad route-miles. This credit provides the ability for railroads to invest more of their private dollars in infrastructure improvements, ensuring the safe and efficient movement of goods for our more than 10,000 customers.
“We urge Congress to act now to extend the short line tax credit into 2019 and beyond. Delaying action defers the benefits of this credit to all the thousands of customers and communities that depend on it.”
However, cautions one industry observer, 45-G permanence is a bit more complicated:
“45-G cannot move on its own, and has to be included in a broad ‘tax extenders’ package that includes dozens, if not scores, of similar tax avoidance measures. The problem is that most of those cannot garner support for permanence and 45-G cannot be so singled out. That is why the BRACE (Building Rail Access for Customers and the Economy) Act, HR 721, failed in 115th Congress. The extension had to move on an annual or two-year extension with the others. A hope for a tax extenders package to move before April died with the budget bill compromise as they were not included. It is very difficult to move any tax legislation, even with Sen. Chuck Grassley (R-Iowa, a corn syrup/ethanol-producing state) now chairing the Senate Finance Committee. So while the BRACE ACT picks up sponsors, it is most unlikely to be a stand-alone bill coming out of committee. The practical hope is that it be included in a new tax extenders package (almost certain) and that the tax extenders package finds another vehicle on which to be appended for movement to the House and Senate floors (likely, but timing is most uncertain).”
For more on the Short Line 45G Tax Credit, visit www.aslrra.org.