DENVER – Federal funding that serves as the lifeline of small U.S. railroads will continue to flow from Washington, experts say, but exactly when and how much is unclear at present.
That funding to-do list is led by the 45G tax credit and Consolidated Rail Infrastructure and Safety Improvements (CRISI) grants – critical issues during a legislative educational session at the American Short Line and Regional Railroad Association (ASLRRA) conference here on Monday.
A bipartisan House bill to update the vital 45G tax credit, which underpins capital spending at many shortline and regional railroads, was introduced in January by Reps. Mike Kelly, R-Pa., and Mike Thompson, D-Calif., the latter of whom is the chair and ranking member of the Ways and Means Subcommittee on Tax.
Technically known as a railroad maintenance credit that is part of the IRS Code of 1986, 45G was created in 2005 and made permanent in 2021. It offers a tax credit of 40 cents per mile of track up to a maximum $3,500 – a figure that hasn’t changed in 25 years.
The new bill updates 45G to $6,100 per mile to account for inflation, and also indexes the credit to inflation. In addition, it allows expenditures for Class II and III track miles as of 2024, from the current cutoff date of 2015. A Senate version of the bill is also expected to be introduced.
The trade group is optimistic about passage of 45G, even with a 40% turnover in Congress since 2020, said Nicole Brewin, vice president, congressional affairs, for Washington-based ASLRRA.
CRISI funding this fiscal year is a mixed outcome. The grant program has been appropriated through September but cut almost in half, to $100 million from $199 million in FY 2024. That is in addition to $1 billion from the Infrastructure Investment and Jobs Act (IIJA) passed under the Biden administration.
Looking ahead to fiscal 2026, the ASLRRA has sent a letter to the Transportation, Housing and Urban Development committees in both the House and Senate outlining appropriations requests for CRISI grants, the Short Line Safety Institute and the grade crossing safety program Operation Life Saver, among other programs.
The IIJA expires in September 2026, and ASLRRA President Chuck Baker in January testified before a House subcommittee on rail as to priorities for reauthorization. They include guarantees for CRISI funding including support for advanced appropriations, and reject efforts to permit longer, heavier trucks on the nation’s roads. On Thursday, the ASLRRA along with members Genesee & Wyoming and Watco will participate in a closed-door stakeholder listening session on surface transportation reauthorization priorities.
The ASLRRA has scheduled its annual Railroad Day on Capitol Hill lobbying blitz May 7, when the messaging agenda will include modal equity involving the Highway Trust Fund and federal truck size and weight (TSW) limitations; tax policy; permitting reform; and rail grants.
Find more articles by Stuart Chirls here.
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