Rep. Mike Kelly, U.S. Representative for Pennsylvania's 16th District | Official U.S. House headshot
Rep. Mike Kelly, U.S. Representative for Pennsylvania's 16th District | Official U.S. House headshot
U.S. Representatives Mike Kelly (R-PA) and Earl Blumenauer (D-OR) have introduced the Short Line Railroad Tax Credit Modernization Act. This legislation aims to facilitate the operation and maintenance of local rail lines, thereby enhancing commerce in communities across the nation.
"Short line rail service connects communities and provides rail service in small towns nationwide, including stops throughout Western Pennsylvania," stated Rep. Kelly. "In some cases, short lines provide the only source for local companies to ship their products nationally. This legislation allows rail companies to continue providing safe and efficient service and offers a return on taxpayer investment."
Rep. Blumenauer emphasized the importance of this infrastructure for rural areas: “Short line rail is absolutely critical for rural and small communities. Modernizing the railroad track maintenance credit will help invest in this critical infrastructure that extends opportunity to the furthest reaches of our communities."
Chuck Baker, President of the American Short Line and Regional Railroad Association (ASLRRA), highlighted the broader impact: “The 45G tax credit has been a powerful incentive for short lines to put more of their own funds to work upgrading track and bridges to modern standards, benefiting the entire interconnected freight rail network, thousands of rail shippers in critical industries, and the American public. Short lines operate one-third of the nation’s rail system, serving as an origin or destination point for one in five cars moving through it.”
Baker further noted that while this policy has driven over $8 billion in investments so far, outdated caps threaten its effectiveness. He expressed optimism about congressional action to update these limitations.
The bill seeks to make Section 45G short-line tax credit permanent. Currently, it allows regional and short lines a 50-cent tax credit per dollar spent on track rehabilitation and maintenance projects up to $3,500 per mile of owned or leased track. The credit has been extended multiple times since 2005 but last expired at the end of 2017.
Kelly and Blumenauer have a history of supporting short line railroad services in Congress, having introduced similar legislation in 2019.
According to ASLRRA data, there are over 600 short lines operating more than 47,500 route miles—29% of U.S. freight rail.
Alerts Sign-up