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The Railroad Perspective

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?

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The Railroad Perspective

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

  2. 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?

  3. The Hard Truth: Small railroads are… well… SMALL • * “Back Office” data is, admittedly, rather speculative with lots of apples, • oranges, pears, etc. and excludes some holding company data for both short • lines and regional carriers. Best considered for illustrative purposes only.

  4. The Hard Truth: Small railroads are… well… SMALL In the hypercompetitive post-ARRA world… …rail divisions need high powered partners; and …many short lines need patient partners. Both can be satisfied in the short line universe with a little effort.

  5. Rail: Whoop-TEA-Do?

  6. Of course, its not the length of your text…

  7. Rail in a Different Cup of TEA

  8. Rail in a Different Cup of TEA * PL 111-5 (376/179,072); PL 111-117 (695/176,031); PL 112-10 (60/80,392); Total (1,131/435,495) † PL 111-5 (619/179,072); PL 111-117 (591/176,031); PL 112-10 (50/80,392); Total (1,260/435,495) ‡ PL 108-357 (4,710/106,386); PL 109-135 (289/29,202); PL 109-432 (102/100,198); PL 110-343 (157/73,731); PL 111-312 (55/12,778); Total (5,313/322,295)

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

  10. 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

  11. 100 miles Awesome, Inc. Customer Ye Lil’ Short Line Credit Cap: Total Mileage x $3,500 100 mi. x $3,500 = $350,000 * * * Credit Rate = 50% To Earn Max Credit must invest: $350,000/0.50 = $700,000 Big Daddy Class I

  12. 45G – Rhymes with “TEA” S. 672 – Rockefeller-Crapo

  13. 45G – Rhymes with “TEA” H.R. 721 – Jenkins-Blumenauer

  14. 45G – Rhymes with “TEA” • Section 45G Short Line Railroad Tax Credit • Enjoys broad political support:

  15. 45G – Senate - 2010 45G – House - 2010 Examination of 156,270 bills introduced between 93rd and 108th Congresses

  16. 45G – Rhymes with “TEA” *Source: J.H. Fowler, Social Networks 28 (2006) at 457

  17. “45G” – Really Bad 1980’s Rap Approximate Rhyme with “State DOT” • In the 111th 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

  18. TSW… 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

  19. 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

  20. 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…

  21. Adam Nordstrom Partner – Chambers, Conlon & Hartwell – Washington, DC – 202-638-7790 adam.nordstrom@CCH-LLC.COM

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