Peters Cosponsors Legislation to Promote Investments in Short Line Railroads
Bill Extends Tax Credit to Support Infrastructure Investments and Economic Growth
WASHINGTON, DC –U.S. Senator Gary Peters (MI), a member of the Senate Commerce, Science and Transportation Committee, today announced that he is cosponsoring the bipartisan Short Line Railroad and Rehabilitation and Investment Act of 2015 to extend the Short Line Tax Credit, which helps small, local freight railroads maintain, upgrade and expand their railroad infrastructure.
“Whether they are moving finished goods or transporting raw materials, our short line and regional railroads are vital to America’s global economic competitiveness, yet they often struggle to find the capital needed to make critical infrastructure investments,” said Senator Peters. “I’m proud to cosponsor this important legislation to extend the Short Line Tax Credit, allowing smaller railroads to leverage private funds to upgrade and even expand their railways. Short lines connect nearly every county in Michigan to our national freight rail system, and this tax credit will ensure they can continue to serve as vital links connecting Michigan farmers, small businesses and manufacturers to domestic and international economic opportunities.”
The Short Line Tax Credit supports private investment in rail infrastructure by providing a 50 cent tax credit for every dollar spent on track improvements, up to $3,500 per mile of track. The tax credit has been helping small freight railroads invest in their infrastructure since 2005, but it expired on December 31, 2014. This legislation would extend the Short Line Tax Credit for two-years, which is essential for helping small short line railroad companies invest in their infrastructure. According to the American Short Line and Regional Railroad Association, short lines can invest as much as 30 percent of their annual revenues in infrastructure, a higher percentage than any other industry. The Short Line Tax Credit provides Michigan short lines nearly $10 million each year for improvements.
“Hundreds of Michigan shippers depend on competitive short line service to get their products to the nearest Class I railroad. For them, it is the most economical form of transportation and the only way to reach markets outside of Michigan,” said Shasta Duffey, Vice President of Sales and Marketing for the Grand Elk Railroad. “The rehabilitation tax credit allows us to invest more of our money to make these lines efficient and safe. Senator Peters’ long-standing support for this legislation has been a tremendous benefit to those who depend on our service.”
Michigan is home to more than 20 short line railroads, which often connect small or rural communities to the national rail freight network. According to the Michigan Railroads Association, rail is one of the most cost-effective ways to move raw materials and goods. Small freight railroads help connect companies and industries across the country, supporting hundreds of thousands of jobs.
Short line railroads also relieve congestion on highways and support sustainable and environmentally-friendly transportation. The American Short Line and Regional Railroad Association estimates that it would require 8.4 million additional trucks to move just 25 percent of the current short line rail traffic.
Senator Peters is a member of the Senate Commerce, Science and Transportation Committee, where he works to promote policies that increase American competitiveness in advanced manufacturing and other industries. Senator Peters is dedicated to supporting economic growth and growing Michigan’s role as a transportation and logistics hub for trade, manufacturing and innovation.
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