Senate bills aim to boost rail
use, truck productivity
Although they were easy to overlook amidst all the contentious debate on Capitol Hill, two proposals aimed at sparking logistics investment and productivity were introduced in
the Senate last month. One offers the nation’s freight railroads
tax incentives to add capacity, while the second would allow
truckers to haul heavier loads over the nation’s highways.
The rail bill, the Freight Rail Infrastructure Capacity
Expansion Act of 2010 (S. 3749), would give railroads a 25-
percent tax credit for investing in new equipment and
infrastructure that would encourage more freight to move
by rail. Qualifying investments would include trackage,
locomotives, tunnels, rail yards, and intermodal transfer
and transloading facilities.
The bill would also allow railroads to expense all qualifying capital purchases instead of depreciating them, a
change that would accelerate the pace of capital investment
needed to expand rail capacity.
The Senate bill, introduced Aug. 6 by Sens. Kent Conrad
(D-N.D.) and John Ensign (R-Nev.), mirrors legislation in
the House introduced in 2009 by Rep. Kendrick Meek (
D-Fla.). The railroad industry has lobbied hard for two years
to advance these initiatives but with little success.
Railroads, which finance infrastructure projects with private
funds, said they spent $460 billion from 1980 to 2009 on network expansion. Without some form of government stimulus,
the industry projects that it will face a $39 billion shortfall in
infrastructure needs by 2035 to meet projected demand.
Lawrence H. Kaufman, a noted rail writer, executive, and
consultant, said an investment tax credit, if properly crafted, could generate enough economic benefits to more than
offset the impact on the U.S. Treasury in lost tax revenue.
Kaufman said railroads will need access to capital in order
to “build their way out of congestion.” An investment tax
credit, he said, “gives them greater access to capital.”
Weighty issue
A separate bill introduced in the Senate would allow states to
raise the gross vehicle weight limit for trucks operating on the
Interstate Highway System to 97,000 pounds from 80,000.
At the same time, the bill, S. 3705, would require that
trucks carrying single-trailer units and operating above
80,000 pounds add a sixth axle to compensate for the extra
weight. Proponents say the extra axle minimizes additional
damage to road pavement and adds braking capacity, preventing an increase in stopping distances.
The bill, the Safe and Efficient Transportation Act
(SETA) of 2010, was introduced Aug. 4 by Sens. Mike
Crapo (R-Idaho), Susan Collins (R-Maine), and Herb Kohl
(D-Wis.). An identical measure has already been proposed
in the House of Representatives.
The American Trucking Associations applauded the pro-
go figure …
$8.5 billion
The amount the top 13 U.S. ports will spend on container terminal and harbor dredging projects over the next five years.
SOURCE: JONES LANG LASALLE
posal, saying it will foster truck efficiencies by enabling the
same amount of freight to be hauled in fewer trips. This
will result in safer highways, cleaner air, and lower shipping
costs, the association said.
Critics of the long-standing proposal, like the Owner-Operator Independent Drivers Association, have said the
widespread use of longer, heavier equipment would result
in higher taxes and insurance costs, inflict further damage
on already overburdened highways, and create safety problems as drivers struggle with rigs and trailers that are more
challenging to operate.
—M.S.
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