The National Industrial Transportation League (NITL) has formally endorsed legislation extending the short line railroad rehabilitation tax credit. The extension is contained in identical House and Senate bills, HR 1584 and S 881 and provides for a three year extension of the credit.

NITL President John Ficker said, 'Short line railroads are playing an increasingly important role in the freight transportation system and the tax credit has proven a very cost effective way to maximize rehabilitation on these tracks.' He further stated, 'The League endorsed the initial version of this tax credit in 2004 and we are pleased to endorse this extension.'

The rehabilitation tax credit known as 45G was first enacted in 2004 and has been available to short lines for the years 2005 ' 2007. It provides a credit of 50 cents for every dollar spent on track rehabilitation up to a credit cap equal to $3,500 per mile of railroad owned or leased by the short line.

NITL Chairman Curt Warfel said, 'The ultimate beneficiaries of the tax credit are the customers that depend on short lines to move their goods.' 'Today, short lines handle, in origination or termination, one out of every four railcars moving on the national rail system. Short lines serve over 12,000 facilities that employ over 1 million people. The majority of these businesses are located in areas of the country that have no other rail service. When these lines are rehabilitated shippers get more efficient and more productive service, said Warfel.' He indicated that many companies belonging to the NITL had one or more facilities on a short line railroad.

Ficker said that one of the drivers of the original tax credit was the advent of the heavier 286,000-pound railcar that is an important component in increasing shipper productivity. 'As Class I railroads moved to rationalize their systems, many lines were considered as abandonment candidates. Short lines took the risk to assume these lines which had not been maintained to today's standards,' said Ficker. 'That track needs a lot of work to begin with and the new heavier railcars require an even higher level of investment.'

Currently HR 1584 has 180 House co-sponsors and S 881 has 34 Senate co-sponsors. The proposed legislation increases the credit cap to $4,500 per mile to take into account the large increases in steel prices in the last three years.

The National Industrial Transportation League is an association of companies that conduct industrial and/or commercial enterprises throughout the United States and internationally, and are concerned with the transportation of goods by all modes in both domestic and international commerce. The League has approximately 650 separate company members, all of who are concerned with issues affecting freight transportation.