Short Line Connector - Fall 2016 - 17


Establishing permanency for 45G would help short line railroads plan well in advance for
infrastructure improvements, such as rail and crosstie replacement.

one of the most capital-intensive industries in the country. Since 2005, short
line railroads have plowed anywhere from
25 to 33 percent of their revenues into
infrastructure improvements, including
during the difficult years of 2008 to 2010.
The 45G tax credit has helped make that
significant investment possible."
"We thank each Congressional
representative that has stepped up to
co-sponsor this bill over the past six
Congresses," she added.

Supporting America's Infrastructure
Since 2005, a series of one- and two-year
extensions of Section 45G enabled smaller

freight railroads and their customers to
reinvest billions of dollars to improve their
lines. Spurred by the numerous examples
of the local, regional and state impact
such investments have had over the last
decade, the industry is now pushing for
a longer-term extension of the tax credit.
The certainty provided by a longer-term
extension, or even permanency, would
help railroads in their multiyear capital
planning and assist their suppliers in
inventory, production and staffing.
The infrastructure upgrades facilitated by Section 45G connect America's
manufacturers, ports, mines, farms and
retailers. Without adequate short line rail

service, some businesses might be forced
to close their doors or relocate, and many
would not be able to competitively serve
their own customers.
Because of the life of the assets and the
inefficiency of reusing or relocating them,
railroad infrastructure investments are
long-term commitments. New rail or a
new bridge is expected to last more than
50 years, and a new crosstie can last 30
years. Providing a longer-term horizon
for these investment decisions by making
45G permanent is expected to facilitate
more of these investments.
The Railway Tie Association has
tracked production and consumption
of ties for decades and uses that data to
produce a model to forecast tie demand.
When the 45G tax credit was first
enacted, the model had to be updated to
account for the increase in tie demand
that the short line railroad community
experienced as a result of this stimulus.
The tax credit has resulted in 500,000 to
1 million or more ties purchased annually
based on the group's analysis of the data.
The tax credit's greatest impact for tie
demand (more than 1 million), purchases
and installations occurs with planning
- when the credit is in effect long
enough for railroads and tie producers to
make plans for using the credit and for
procuring the raw materials necessary to
support increased purchases.
Belke and his short line management
colleagues understand that tax credits
are not generally popular in the halls of
Congress or with the American people.
But the short line tax credit should be
a keeper because it works, according to
Belke, and one need only look at some
before and after pictures of short line
track to see the proof.
"If there's one tax credit that's really
advantageous to small businesses, it's
45G," he said. —
Kathy Keeney is vice president of member
engagement and sales. She can be
reached at kkeeney@ASLRRA.org
or (202) 585-3439.

FALL 2016 // SHORT LINE CONNECTOR

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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
Short Line Connector - Fall 2016 - 4
Short Line Connector - Fall 2016 - 5
Short Line Connector - Fall 2016 - 6
Short Line Connector - Fall 2016 - 7
Short Line Connector - Fall 2016 - 8
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Short Line Connector - Fall 2016 - 15
Short Line Connector - Fall 2016 - 16
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Short Line Connector - Fall 2016 - 19
Short Line Connector - Fall 2016 - 20
Short Line Connector - Fall 2016 - 21
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Short Line Connector - Fall 2016 - 28
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Short Line Connector - Fall 2016 - 30
Short Line Connector - Fall 2016 - 31
Short Line Connector - Fall 2016 - 32
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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