The Railroad Perspective Adam Nordstrom Partner – Chambers, Conlon & Hartwell – Washington, DC – Washington Representative – American Short Line and Regional Railroad Association

Short Lines and the Planning Process Why are short lines overlooked in the transportation planning process? Better Question: Why do short lines ALLOW themselves to be overlooked? Also: After the public input process, MPOs, RPOs, municipalities, broad political considerations, and tediously repetitive federal reporting requirements, what is an overtaxed state official to do? Small railroads often end up an afterthought from the planning process: What’s a short line?

“Short Line”“Regional”Industry Total Employment 11,6537,76919, Ave/R.R “Back Office” Average*

Rail: Whoop-TEA-Do? ISTEA (1991) TEA-21 (1998) SAFETEA-LU (2005) Word Count131,521167,296324,427 Rail Text3,1213,7513,329 Rail Text %2.37%2.24%1.03%

Of course, its not the length of your text… ISTEA (1991) TEA-21 (1998) SAFETEA-LU (2005) Rail Text %2.37%2.24%1.03% Elements Intermodal Earmarks “Goal to promote intermodalism” Intermodal Studies High-Speed Rail Short Line Grants (unfunded) RRIF Loans ($3.5B) High-Speed Rail Rail Line Relocation Grants 1,000% Increase in RRIF Cap ($35.0B) Tank Car Safety

Rail in a Different Cup of TEA Recovery Act (ARRA) Tax Bills Elements High-Speed Rail TIGERSection 45G Short Line Railroad Track Credit Value $10.1 B (some rescinded) ~$400 M (for freight) $1.16 B

Rail in a Different Cup of TEA Recovery Act (ARRA) Tax Bills Elements High-Speed Rail TIGERSection 45G Short Line Railroad Track Credit Rail Text % 0.26 * 0.29 † 1.65 ‡ * PL (376/179,072); PL (695/176,031); PL (60/80,392); Total (1,131/435,495) † PL (619/179,072); PL (591/176,031); PL (50/80,392); Total (1,260/435,495) ‡ PL (4,710/106,386); PL (289/29,202); PL (102/100,198); PL (157/73,731); PL (55/12,778); Total (5,313/322,295)

TEA for Two Rails Truck Size, Weight, and Safety Section 45G Short Line Railroad Tax Credit Railroad Rehabilitation and Improvement Financing Flexibility

45G – The Federal Short Line Track Mechanism Section 45G Short Line Railroad Tax Credit – $3,500/mi. tax credit for infrastructure upgrades – $165 million / year – $1.16 billion to date – Assisted $2.3 billion in track upgrades to date – Expires at the end of 2011 Good News:No Need to Apply Bad News: No Need to Apply

Ye Lil’ Short Line Big Daddy Class I Awesome, Inc. Customer 100 miles Credit Cap: Total Mileage x $3, mi. x $3,500 = $350,000 *** Credit Rate = 50% To Earn Max Credit must invest: $350,000/0.50 = $700,000

45G – Rhymes with “TEA” S. 672 – Rockefeller-Crapo

45G – Rhymes with “TEA” H.R. 721 – Jenkins-Blumenauer

45G – Rhymes with “TEA” Section 45G Short Line Railroad Tax Credit Enjoys broad political support: HouseSenate (to date) 13334

Examination of 156,270 bills introduced between 93 rd and 108 th Congresses 45G – Senate G – House

45G – Rhymes with “TEA” HouseSenate (to date) Mean for All Bills 2004* 164 *Source: J.H. Fowler, Social Networks 28 (2006) at 457

“45G” – Really Bad 1980’s Rap Approximate Rhyme with “State DOT” In the 111 th Congress several state DOTs supported extension of 45G Usually in the forms of policy support letters to Congressional delegations from DOT Secretaries or Rail Directors

Truck Size and Weight Frequent Battle in TEA Bills Increases beyond 80,000-lb. endanger short line survival Large Railroads and Safety Groups also opposed TSW…

Railroad Rehabilitation and Improvement Financing $35 Billion Loan Ceiling Less than $1 Billion ever outstanding Favorable Terms: – Low Interest – Long Term Historically uncertain review process Frequently mentioned by Chairman Mica as a way to leverage private sector investment

Flexibility …Provided further, That projects eligible for funding provided under this heading shall include, but not be limited to, highway or bridge projects eligible under title 23, United States Code, including interstate rehabilitation, improvements to the rural collector road system, the reconstruction of overpasses and interchanges, bridge replacements, seismic retrofit projects for bridges, and road realignments; public transportation projects eligible under chapter 53 of title 49, United States Code, including investments in projects participating in the New Starts or Small Starts programs that will expedite the completion of those projects and their entry into revenue service; passenger and freight rail transportation projects ; and port infrastructure investments, including projects that connect ports to other modes of transportation and improve the efficiency of freight movement…

Adam Nordstrom Partner – Chambers, Conlon & Hartwell – Washington, DC –