The co-sponsor count for H.R. 516, the Railroad Tax Maintenance Credit Modernization bill to update “a successful, decades long public-private partnership,” has surpassed the symbolic 100 marker, the American Short Line and Regional Railroad Association (ASLRRA) reported Aug. 7. U.S. Reps. Adam Gray (D-Calif.-13), Michael Lawler (R-N.Y.-17), Frank Lucas (R-Okla.-3), Mary Miller (R-Ill.-15), Max Miller (R-Ohio-7), and Kim Schrier (D-Wash.-8) signed on Aug. 5, joining 96 other bi-partisan co-sponsors.
The bill was introduced in January by U.S. Reps. Mike Kelly of Pennsylvania and Mike Thompson of California, the Chairman and senior Democrat of the House Ways & Means’ Tax Subcommittee, respectively. Its goal: to improve the Railroad Track Maintenance Credit—also known as the 45G tax credit, referring to its section in the U.S. tax code.
45G has been a meaningful tax incentive for short lines to put more of their own funds to work—to the tune of more than $8 billion to date—upgrading track and bridges to modern standards, according to ASLRRA, which represents the nation’s 603 small roads. “Modern track provides safer and more efficient transportation, benefitting the entire interconnected freight rail network, thousands of rail shippers in critical industries, and the American public,” it pointed out. “Short lines operate one-third of the nation’s rail system, and are the origin or destination point of one in five cars shipping by rail.”
Enacted in 2004 and made permanent in 2020, 45G provides a credit of 40 cents for every dollar invested in upgrading short line track, up to a cap of $3,500 per mile. However, over time, the cost to rehabilitate a mile of track has increased significantly, the Association said, and H.R. 516 “seeks to increase the cap per mile to $6,100, index the cost to inflation going forward, and allow expenditures on all short line-owned track to be eligible for the tax credit.”
The 102 co-sponsor count for H.R. 516 places the bill in the top 2% of all tax bills active in the 119th Congress in the House of Representatives, specifically ranking ninth out of 434 bills, according to ASLRRA. And of the top ten bills, it noted, “H.R. 516 is one of only three bills that can be considered truly bipartisan with substantial support from both major political parties.”
“The 45G tax credit has allowed short lines nationwide to invest in upgrading rails and bridges to modern standards—investments that have improved safety, fueled growth for shippers, and supported the economies of small towns and rural areas across the country,” said ASLRRA President Chuck Baker, who covered the topic in Railway Age’s June 2025 and December 2024 issues. “However, the credit has not accounted for inflation which, over time has eroded the power of the credit, and does not apply to short lines established since 2015. This bill [H.R. 516], alongside its Senate counterpart, S. 1532 [introduced in April by Sens. Mike Crapo of Idaho and Ron Wyden of Oregon, the Chairman and senior Democrat of the Senate Finance Committee, respectively], will update the credit to address these issues, so that the credit can continue to serve the country’s freight rail shippers as Congress intended. We are deeply grateful for the leadership of Reps. Kelly and Thompson, and the bipartisan support of the 101 Representatives who have joined them to date.” (S. 1532 has 14 co-sponsors.)
ASLRRA said it is seeking to have the bill included in the next tax bill that becomes law in the 119th Congress. Short line industry leaders, it added, have participated in more than 500 Congressional meetings in the first six months of 2025 in support of 45G modernization, and many will host Congressional delegations on their railroads during summer recess this month.
For more information on 45G and its needed update, visit the ASRLLA website.
