New bills seek to strengthen crude-by-rail safety, extend short-line tax credit

 

March 4, 2015, Progressive Railroading

 

At a Senate Commerce Committee hearing yesterday, U.S. Sen. Maria Cantwell (D-Wash.) announced plans to introduce legislation that would establish new, stronger safety standards for trains hauling crude oil.

 

During the hearing, Cantwell told U.S. Transportation Secretary Anthony Foxx that she didn’t think the U.S. Department of Transportation’s (USDOT) proposed tank-car safety rule would be sufficient and that legislation would be necessary to further strengthen crude-by-rail safety. The proposed rule would phase out older DOT-111 tank cars over several years until late 2017.

 

“I want to be clear and on the record: I will be introducing legislation to support a thicker hull and quicker phase-out than what is currently proposed,” Cantwell said in a press release. “We are not moving fast enough.”

 

Cantwell also asked Foxx to explain the timeline for the USDOT’s proposed rule, and he explained the department expects to finalize new standards in May for tank cars hauling flammable materials, such as crude oil and ethanol.

 

“We are in the process of working with the [Office of Management and Budget] and the administration on moving that rule,” Foxx said. “I would be getting ahead of myself and OMB by putting a tight deadline on it. There is a high level of urgency on it.”

 

Washington is the fifth-largest refining state and a destination for increasing quantities of crude-by-rail from North Dakota shale fields, according to Cantwell’s office. The amount of crude shipped by rail through the state has increased from none in 2011 to 714 million gallons in 2013.

 

Meanwhile, U.S. Sen. Ron Wyden (D-Ore.) and Sen. Mike Crapo (R-Idaho) yesterday introduced the Short Line Railroad Rehabilitation and Investment Act of 2015 (S. 637), which would extend the Section 45G short-line tax credit that expired at 2014’s end.

 

  1. 637, which garnered six co-sponsors, is a companion to H.R. 721 that was introduced Feb. 4 by U.S. Reps. Lynn Jenkins (R-Kan.), Earl Blumenauer (D-Ore.), Rodney Davis (R-Ill.) and Dan Lipinski (D-Ill.). The bills propose to amend the Internal Revenue Code of 1986 to modify and extend the track credit through 2015, and perhaps beyond. The Section 45G provision enables regionals and short lines to claim a tax credit of 50 cents for every dollar invested in track rehabilitation, up to a cap equal to $3,500 times their total track miles.

 

“Small railroads provide a critical service to communities and businesses across Oregon, and this bill means continued investment in important infrastructure,” said Wyden, the top Democrat on the Senate Finance Committee, in a press release. “The short line rail credit empowers railroads to make investments in the first and last mile of what is often a transcontinental journey for goods destined for factories, grain elevators, mills and other vital parts of the economy.”

 

Oregon is home to 15 regionals and short lines that operate 1,292 miles of track, more than half of all trackage in the state.

 

“As highways … become more and more congested, we have a choice to make as a nation. By allowing us to maximize our investment in infrastructure, the short line tax credit provides a private solution to our transportation challenges and it improves the global competitiveness of rail customers, all while improving our environment and preserving our highway infrastructure,” said Jerry Vest, assistant vice president of Oregon short lines the Portland & Western and Central Oregon & Pacific railroads.

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