Conference Report on H.R. 4520, American Jobs Creation Act of 2004
CONFERENCE REPORT ON H.R. 4520, AMERICAN JOBS CREATION ACT OF 2004 -- (House of Representatives - October 07, 2004)
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Mr. MORAN of Kansas. Mr. Speaker, I am pleased that my colleagues on the conference committee for H.R. 4520, the American Jobs Creation Act, have, by passing this legislation, taken an important step to preserve jobs in rural Kansas and across the country. In specific, I applaud Chairman THOMAS for his inclusion of the Railroad Track Maintenance Credit.
This provision will help to preserve freight railroad infrastructure operated by short line and regional railroads. Over 12,000 manufacturing, mining, chemical and agricultural employers, who employ over one million workers in 49 states depend on short line railroads for their success. In many rural areas, such as the First District of Kansas, short lines are crucial in transporting agriculture goods and products to market. Across our country, there are over 500 short line railroads, operating nearly 50,000 miles of track, or nearly one third of the national freight rail network in the U.S.
The repercussions of certain federal regulations combined with the increasing gross weight of railroad cars have created a serious threat to the continued viability of this rail infrastructure. The Railroad Track Maintenance Credit will encourage investment to protect this important transportation link for American businesses and agriculture.
This provision originated with the introduction of H.R. 876. My colleagues also recognized the importance of short lines to their local economies, and as a result, 267 Members of the House co-sponsored this legislation.
I appreciate the conferees including a version of H.R. 876 with the railroad infrastructure provisions in H.R. 4520. These provisions will go a long way in preserving short line railroad track and keeping our local communities attached to the national rail network.
As drafted in H.R. 4520, the 50 percent tax credit available to each short line is subject to a maximum limitation. This limit is the product of $3,500 and the number of miles operated by the railroad. Credits up to this limit may be earned regardless of the length of track that is improved by the expenditures. For example, if a 100-mile railroad invests $800,000 in improving a 1,000 foot bridge span, the amount of qualified expenditures would be $800,000. The credit earned on such investment would be $400,000, or fifty percent of $800,000. The last $50,000 would be excluded as exceeding the limitation of $350,000, determined by multiplying 100 miles by $3,500. Therefore, the railroad would earn a credit of $350,000.
I believe that such a limitation will allow short line railroads to upgrade segments of track, roadbed and bridges that are in the most dire need of upgrades. At the same time, this credit will cap the potential exposure of tax revenues at a known amount: the length of a short line in miles times $3,500.
The conference committee version also includes an important provision that is a variation on the original subsection (g) proposed in H.R. 876. This provision will encourage those who depend most on short line railroads to invest directly in maintaining this critical infrastructure. Railroad customers or suppliers of railroad-related property or services may earn credits under this provision for railroad track maintenance expenditures they make in short line railroads.
I believe this provision is also critical for those two-dozen municipal or state owned railroads that are tax exempt. While those railroads cannot benefit directly from the tax credit because they are tax exempt, their customers and suppliers can still help preserve this infrastructure by investing directly.
In conclusion I want to again thank all of my colleagues who have supported our short line railroads over the past two years. I also want to thank Chairman THOMAS and the conferees for including this provision to help rural America stay connected to the national transportation network.