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From Staff ReportsOn March 14, more than 400 representa-tives of rail industry interests floodedCapitol Hill in Washington to meet withcongressional leaders. The event, theninth annual Railroad Day on CapitolHill was the largest ever of its kind. TheRailway Tie Association (RTA) was oneof several sponsors of the event organ-ized by the American Short Line andRegional Railroad Association(ASLRRA) and the Association ofAmerican Railroads (AAR).

Three issues were the focus in morethan 250 scheduled meetings with legis-lators: re-regulation of railroads, taxcredits for rail capacity expansion, andextension of the section 45C credit forshort line track maintenance andupgrades.

Some shippers have approachedCongress with proposals to re-regulatethe industry because rates have risen asdemand for rail service has increased.Rail industry representatives urgedCongress to recognize the benefits that

deregulation of railroads over 25 yearsago has brought about. Since the land-mark 1980 Staggers Act legislation, rail-roads have been able to consolidate,have remained solvent and, in fact, havebeen capable of investing billions of dol-lars in maintenance and infrastructurevital to the transportation needs ofAmerica. Productivity has increased,safety is vastly improved, and rail rateshave actual remained stable or decreasedwhen taking into account inflation overthat time period.

Yet, railroads still remain below themedian of all U.S. industries in returnon equity. And, most railroads still donot even earn their cost of capital. Forthese reasons, lawmakers were asked toresist any efforts to re-regulate the rail-roads.

Additionally, because railroading issuch a capital-intensive business andreturn on equity so constrained, it isvery difficult for railroads to increasecapacity even though the nation’sdemand for intercity freight transporta-

Railroads, Suppliers, Labor Join Forces For Railroad Day On Capitol Hill

Railroad Day On The Hill Draws Record Crowd

RTA contingent ready for work on the Hill:Robby Johnson, Tony Helms, TonyChambers, Gary Ambrose, Phil Stanley andTom Niederberger (George Caric not shown).

A meeting with Sen. Richard G. Lugar’s(R-IN) staff.

A preview conference for the more than400 in attendance to prepare for theday’s activities.

RTA Executive Director Jim Gauntt presents Rep. John Lewis (D-GA) with anRTA wood (neck) tie.

Secretary of TransportationMary Peters addressed Railroad

Day on Hill banquet attendees.

Photo courtesy of Jennie Lam-Nagata

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tion continues to grow at a torrid pace.Forecasts are that between now and2020 intercity freight transportation willexpand by 70 percent.

Thus, the second issue on everyone’smind was how to economically increaserail capacity in order to relieve some ofthis burden. The proposal from Class 1railroads is a 25 percent tax credit forbuilding new track. This incentivewould be available to any entity thatbuilds new railroad track. Such incen-tives would help to bridge the gapbetween available private sector fundingand the enormous costs of new trackconstruction. And, without this invest-ment in rail, hundreds and hundreds ofadditional trucks will have to travel thealready overcrowded roadways to meetfreight transportation needs. Legislatorswere urged to support this tax relief ini-tiative.

Finally, legislators were asked toextend the Section 45G tax credit forshort line railroads that is due to expire atthe end of this year. This section of thetax code allows short line railroads toreceive a tax credit for infrastructuremaintenance or upgrade. One problem inthe existing law is that the measure wasonly approved for three years. Anotherproblem in the law was that many shortlines were unable to take advantage of thecredits due the Alternative Minimum Tax(AMT). The soon-to-be-introduced legis-lation designed to extend the credit forthree more years also has a fix in it toallow those roads subject to AMT to uti-lize the legislation and assist in the fund-ing of infrastructure improvements.

RTA was well represented. GeorgeCaric, RTA president, and TomNiederberger and Tony Chambers, co-chairmen for the Committee forLegislative & Environmental AffairsResponse (CLEAR), were joined byGary Ambrose, Research &Development Committee chairman,Tony Helms, immediate past presidentof RTA, Robby Johnson, first vice presi-dent, Phil Stanley of Burke-Parsons-Bowlby Corp., a CLEAR committeemember, and Jim Gauntt, executivedirector, in making the case to lawmak-ers throughout the day. §