WASHINGTON – U.S. Senator Jerry Moran (R-Kan.) recently introduced the Building Rail Access for Customers and the Economy (BRACE) Act to make permanent a critical tax credit used to repair and upgrade short line railroads.
“Short line railroads connect rural and regional economies across our state and provide communities with access to national and global markets,” said Sen. Moran. “The BRACE Act would make certain that short line railroads and the communities who depend on them can stay up-to-date on critical maintenance and track improvements. This bipartisan legislation would mark significant progress as we work to make critical, much-needed investments in our nation’s transportation infrastructure.”
This tax credit was first established by legislation introduced in 2004 by then-U.S. Representative Jerry Moran to encourage railroads, railroad customers and suppliers – who depend the most on short line railroads – to invest directly in maintaining the more than 2,000 miles of short line rails in Kansas. Located in the center of America’s heartland, Kansas is one of the leading rail and distribution centers in our country and plays an integral role connecting farmers and factories with communities around the globe.
The BRACE Act would make permanent this tax provision used to repair and upgrade short line railroads, which are defined by the Surface Transportation Board as railroads that generate between $36 and $458 million annually and move largely agricultural and manufacturing freight. Making this tax credit permanent would allow communities to repair, maintain, and upgrade additional short line railroads nationwide.
Since 2006, Congress has acted periodically to extend the credit, often retroactively. This uncertainty causes private investment in short line rail to decline, reduces safety and customer service, and provides uncertainty to businesses, farmers and employers that cannot be globally competitive without freight rail. In addition to making this tax credit permanent, the BRACE Act would provide a safe harbor to allow credits to retroactively be allocated to investments made in 2018, as the credit was last extended only through December 31, 2017.
The BRACE Act was introduced by U.S. Senators James Crapo (R-Idaho) and Ron Wyden (D-Ore.) and is cosponsored by U.S. Senators Richard Blumenthal (D-Conn.), Bob Casey (D-Pa.), Jim Inhofe (R-Okla.), Johnny Isakson (R-Ga.), Pat Roberts (R-Kan.), Chuck Schumer (D-N.Y.), Debbie Stabenow (D-Mich.), John Thune (R-S.D.) and Roger Wicker (R-Miss.).
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