Short Line Connector - Fall 2016 - 16


COVER STORY

Achieving Permanency
The industry is in the midst of a fullcourt press to not only renew the credit
for 2017, but to extend the authorization
for multiple years, and perhaps permanently. ASLRRA is leading the charge for
permanency this fall by taking a page out
of former Washington Redskins Coach
George Allen's playbook, saying, in effect,
that the Future is Now.
"The time is now to win permanency
for the 45G tax credit," ASLRRA President Linda Bauer Darr wrote in a recent
letter to railroad and supplier members of
the Association. "We are reaching out to
railroad members and supplier members
that support 45G and have strong customer relationships to put the power of
the shipping community to work to help
us make this happen."
Railroads and suppliers are being
asked to urge their customers to join the
ship-by-rail community that has already
signed up at www.savingourservice.org in
support of the tax credit. As of late summer, ASLRRA reported 495 rail shippers
showing support for the 45G tax credit,
with those businesses representing nearly
1,410 locations and thousands of jobs
around the country.
Legislation to extend the credit has
passed in Congress five times in the last
12 years, and it ranks as one of most
co-sponsored bills during that timeframe.
Given current economic conditions and
other factors, ASLRRA leaders believe
the need for this credit is more intense
now than it has ever been.

BRACE for Impact
Currently, section 45G is set to expire
on Dec. 31, 2016. The Building Rail
Access for Customers and the Economy
(BRACE) Act has been introduced in the
Senate by Sen. Mike Crapo (R-Idaho)
and Senate Finance Committee ranking
member Sen. Ron Wyden (D-Oregon)
and in the House of Representatives
by Rep. Lynn Jenkins (R-Kansas) and
Rep. Earl Blumenauer (D-Oregon). The
BRACE Act will amend section 45G by

16

removing the sunset provision and making the credit permanent.
"The combined impact of 45G at our
three railroads is between $800,000 and
$1.4 million," said Carl Belke, president
of Western New York & Pennsylvania
Railroad. That total includes work done
on WNYP affiliates, Livonia, Avon &
Lakeville Railroad and B&H Rail Corp.
"To short lines like us, that's a lot of
money," he said in an interview with
Short Line Connector, "and allows us to
do much more maintenance work on
our properties."

"The tremendous
amount of support for
Section 45G over the
years is a testament to
just how critical the
provision remains to
small freight railroads
and their customers
across the country."
-Rep. Lynn Jenkins (R-Kansas)

Specifically, the tax credit has helped
the short line buy more ties, ballast and
switches and do repairs and upgrades to its
critical bridges. "That work improves our
track infrastructure, which, in turn, allows
us to increase our train speeds, reduce our
derailment risks and improve the safety of
our operations," Belke added.
While 45G mainly helps with
maintenance-of-way, the credit also frees
up cash for the railroad to be able to
better maintain locomotives and
other equipment.

SHORT LINE CONNECTOR // FALL 2016

"It helps lift the overall boat," as Belke
put it.
Though appreciative of the tax credit,
he is quick to point out that the uncertain
timing of its Congressional renewal is far
from ideal. "It's a problem learning that you
have the tax credit at the end of the year, or
a week or two after that. You cannot plan
and cannot pre-purchase," he said.
"As a short line you are always looking
around for deals, so it makes off-season
purchasing more difficult. A multiyear
or more permanent extension of 45G, as
proposed in the BRACE Act, would solve
all that."

Strength in Numbers
ASLRRA is "going to go all out" this fall
to build support for the BRACE Act in
Congress so short line railroads can plan
investments in the rehabilitation of their
track with certainty for years to come.
In late July, ASLRRA celebrated a
milestone in support for 45G, when
the tax credit attracted its 2,000th
co-sponsor since its first introduction
more than a decade ago.
"The 45G tax credit has been a bipartisan effort from the beginning, supporting
railroads, communities and a wide variety
of industries that rely upon short lines to
get products to market. It is an outstanding example of a private solution to a
public problem, allowing short lines to
invest more of their own capital dollars,
resulting in economic growth for the
railroads and a safe and efficient means of
transport for their customers," said Darr.
"The tremendous amount of support
for Section 45G over the years is a testament to just how critical the provision
remains to small freight railroads and
their customers across the country,"
Jenkins pointed out.
"In 2004, ASLRRA and its member
railroads stepped up to propose a solution
that has proven to be an effective tool in
maximizing capital investment in critical
infrastructure across a wide swath of
urban, rural and small-town America,"
Darr explained. "Short line railroading is


http://www.savingourservice.org

Table of Contents for the Digital Edition of Short Line Connector - Fall 2016

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Short Line Connector - Fall 2016 - Cover1
Short Line Connector - Fall 2016 - Cover2
Short Line Connector - Fall 2016 - No label
Short Line Connector - Fall 2016 - 2
Short Line Connector - Fall 2016 - 3
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Short Line Connector - Fall 2016 - Cover3
Short Line Connector - Fall 2016 - Cover4
http://www.nxtbook.com/ygsreprints/ASLRRA/summer19
http://www.nxtbook.com/ygsreprints/ASLRRA/spring19
http://www.nxtbook.com/ygsreprints/ASLRRA/winter19
http://www.nxtbook.com/ygsreprints/ASLRRA/fall18
http://www.nxtbook.com/ygsreprints/ASLRRA/summer18
http://www.nxtbook.com/ygsreprints/ASLRRA/spring18
http://www.nxtbook.com/ygsreprints/ASLRRA/winter18
http://www.nxtbook.com/ygsreprints/ASLRRA/fall17
http://www.nxtbook.com/ygsreprints/ASLRRA/summer17
http://www.nxtbook.com/ygsreprints/ASLRRA/FactsAndFigures
http://www.nxtbook.com/ygsreprints/ASLRRA/spring17
http://www.nxtbook.com/ygsreprints/ASLRRA/winter17
http://www.nxtbook.com/ygsreprints/ASLRRA/fall16
http://www.nxtbook.com/ygsreprints/ASLRRA/summer16
http://www.nxtbook.com/ygsreprints/ASLRRA/spring2016
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