[Congressional Record Volume 169, Number 98 (Tuesday, June 6, 2023)]
[Senate]
[Page S1973]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      SHORT LINE RAIL ADVOCACY DAY

  Mr. GRASSLEY. Mr. President, in recognition of Short Line Rail 
Advocacy Day, which was on May 17, I want to speak about the important 
services short line railroads provide to their customers and the entire 
economy. I also want to highlight the importance of the railroad track 
maintenance credit, otherwise known as the short line credit, for 
maintaining a robust network of short line rail.
  The short line credit is available to what are known as class II and 
class III railroads, which are categorized based on revenue thresholds 
set by the Surface Transportation Board. This tax credit is not 
available to the large national and international railroads most people 
are probably familiar with. While the short line railroads generally 
operate in a relatively small area, they have a massive impact.
  Short line railroads serve a key role in transporting manufactured 
goods and agricultural products from factories and farms to markets in 
the U.S and beyond. They often serve as the ``first and last mile'' in 
our Nation's freight transportation network. These links to the rest of 
the world are crucial to Iowa's economic competitiveness and 
communities across the country. Nearly half of Iowa's railroad miles 
are operated by 13 small railroads that transport more than 300,000 
carloads of material a year.
  Support of short line railroads has been a long-standing bipartisan 
priority. Next year will mark the 20th anniversary of the short line 
credit. Though the credit has spent most of its existence as a tax 
extender, as then chairman of the Finance Committee, I helped to create 
the credit and later led a successful effort to make the credit 
permanent in 2020. I had a lot of support, which is reflected in the 
fact that legislation that was sponsored by Senator Crapo, current 
ranking member of the Finance Committee, to make the credit permanent 
had 62 cosponsors.
  The short line credit provides smaller regional and local railroads a 
tax credit for a percentage of amounts spent to upgrade and maintain 
miles of railroad track. However, these small railroads operate on 
tight margins, and many have insufficient tax liability to claim the 
credit against.
  To address this issue, the law allows short line railroads to assign 
the credit to another short line, or to a customer. The assigning 
railroad typically recognizes income for cash received and the assignee 
deducts payments made. This arrangement ensures that all short line 
railroads are able to fully utilize the credit.
  This year on Short Line Rail Advocacy Day, many of the Nation's 600 
short line railroads visited offices on Capitol Hill to remind us of 
the critical role they play in the industry. According to the American 
Short Line and Regional Railroad Association, nearly 30 percent of our 
national rail network, or roughly 50,000 miles of track, is operated by 
short lines who at some point handle a quarter of all rail cars moving 
through the national rail system.
  It is important we understand and appreciate what these local and 
regional railroads do for our communities, and our whole economy.

                          ____________________