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Infrastructure Tax Legislation Would Trigger More Rail Capacity

Reps. Kendrick Meek (D-FL) and Eric Cantor (R-VA) have introduced the Freight Rail Infrastructure Capacity Expansion Act of 2009 (H.R. 272) which promotes the expansion of the nation's freight rail network.

The legislation would provide a 25 percent tax incentive to any company (not just railroads) investing in new track, terminals or other projects that increase the capacity of the freight rail network. This would be good for America's economy.

Freight rail is a true American success story. Railroads’ very survival was in question 25 years ago. Their biggest challenge is growing to keep up with demand. Shippers and consumers have recognized the three principles of rail: affordability, efficiency, and the environmentally sound nature of freight rail. That’s why demand has grown. And in the years ahead, it will grow even more.

The U.S. Department of Transportation projects that demand for rail freight service will nearly double in the next 25 years. Now is the time to invest in America’s future.

A 2007 Cambridge Systematics study concluded that a $148 billion is needed in the next 25 years to meet the nation’s projected need for rail capacity. Railroads can invest about 70 percent of the money necessary to expand their networks to keep up with the nations’ needs.

But additional investment is needed. Without it, 30 percent of America’s primary rail miles will be overused by 2035, according to the study, causing severe congestion and gridlock throughout the U.S. If freight is shifted back onto our highways, there will be an increase in pollution and fuel consumption.

The public benefits of growing freight rail are real:

  1. A cleaner environment (freight trains pollute one-third as much as trucks)
  2. More fuel efficiency (a freight train can move a ton of freight an average of 436 miles per gallon of diesel fuel, three times as far as a truck)
  3. Less traffic on our nation’s highways (a single intermodal train can remove up to 300 trucks from the highways)

America's freight railroads are working . . . and working well. Investing in their growth will help keep America moving forward.