Spurring Rail Investment

Sen. Mike Crapo U.S. Senator, Idaho
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Private companies are making a considerable impact in moving U.S. goods to markets here and abroad in an energy-efficient and environmentally friendly manner that is aiding our economy, creating jobs and saving wear-and-tear on our highways.  Reliable and affordable transportation options are critical for the success of many of these small businesses and agricultural producers.  Short line railroads connect these economic drivers in our communities across our nation to customers worldwide.  These rail lines provide crucial economic corridors that serve communities and support jobs and development.  Senator Debbie Stabenow (D-Michigan) joined me in leading the introduction of the bipartisan S. 407, the Building Rail Access for Customers and the Economy (BRACE) Act, to enable short line railroads to make long-term plans for infrastructure repairs and upgrades, improving the link between our rural communities and the national freight railroad network.

The short line railroad track maintenance credit provides short line and regional railroads a 50 percent tax credit for railroad track maintenance expenses, up to $3,500 per mile of track owned or leased by the railroad.  Since 2006, Congress has acted periodically to extend the credit, often retroactively and often almost a year after expiration.  This uncertainty causes private investment to decline, limits investments in safety and customer service, and creates insecurity for businesses, farmers and employers who cannot be globally competitive without freight rail.  The BRACE Act would address this by making permanent the critical tax credit used to repair and upgrade short line railroads.  This legislation is targeted at long-term rail improvements by providing certainty to rail operators making use of critical tax credits for infrastructure improvements.

Last fall, I had the opportunity to visit an Idaho rail expansion project that has been furthered in part by the federal tax incentive.  I visited with Watco Companies in Burley and Boise and saw, in person, how important short line railroads are to companies in Idaho and others in other parts of our country.  Kansas-based Watco Companies, LLC purchased a former manufacturing facility in Burley to establish a warehouse and distribution facility taking agricultural and other products to market by rail.  The company anticipates increased short line shipping of commodities in the immediate region through efficient use of climate controlled facilities and state-of-the-art faster rail loading facilities.  Companies like Watco and its rail partners employ more than 150 Idahoans.  Legislation like the BRACE Act could help increase this number as added shipments are utilized.  This is one example of the opportunities that can be developed in our communities through enactment of federal policies, including the BRACE Act, that boost economic development and spur rail investment.

Visiting a project that supports economic opportunities and seeing its job growth potential take shape is encouraging as I continue to work with my colleagues in Congress to build on past successful efforts to extend the tax credit and strengthen federal policy that supports short line expansion.  A total of fifteen senators are co-sponsors of S. 407 so far this Congress.  In addition to Senator Stabenow, Senators Richard Blumenthal (D-Connecticut), Bob Casey (D-Pennsylvania), Cory Gardner (R-Colorado), Dean Heller (R-Nevada), Jim Inhofe (R-Oklahoma), Johnny Isakson (R-Georgia), Amy Klobuchar (D-Minnesota), Jerry Moran (R-Kansas), Pat Roberts (R-Kansas), Chuck Schumer (D-New York), John Thune (R-South Dakota), Roger Wicker (R-Mississippi) and Ron Wyden (D-Oregon) have co-sponsored the BRACE Act, which has been referred to the Senate Finance Committee on which I serve.  I encourage all those interested in this legislation to share your views, reach out to friends and family and help garner support for this effort.

I look forward to the continued work ahead with my Senate colleagues and others to advance this legislation that supports expanded rail operations to the benefit of jobs, small businesses and producers in communities across the nation.  Short line railroads ensure that small manufacturers’ products can get to markets in an efficient and cost-effective manner, and enactment of this legislation will be a step in the right direction for reinvigorating our economy.

Mike Crapo is Idaho’s senior United States senator.