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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? - PowerPoint PPT Presentation
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The Railroad PerspectiveAdam 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?
The Hard Truth: Small railroads are… well… SMALL
“Short Line” “Regional” IndustryTotal
Employment11,653 7,769 19,422
2008 Ave/R.R. 22 235 34“Back Office”
Average*4.2 26.0 5.7
* “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.
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.
Rail: Whoop-TEA-Do?ISTEA(1991)
TEA-21(1998)
SAFETEA-LU(2005)
Word Count 131,521 167,296 324,427Rail Text 3,121 3,751 3,329
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 RelocationGrants
1,000% Increase in RRIF Cap ($35.0B)
Tank Car Safety
Rail in a Different Cup of TEARecovery Act (ARRA) Tax Bills
ElementsHigh-Speed
Rail TIGER Section 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(some rescinded)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 TEARecovery Act (ARRA) Tax Bills
ElementsHigh-Speed
Rail TIGER Section 45G Short Line Railroad Track Credit
Rail Text % 0.26* 0.29† 1.65‡
* 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)
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 IAwesome, Inc.
Customer
100 miles
Credit Cap: Total Mileage x $3,500100 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:
House Senate2004 268 192008 248 452010 259 532011 (to date)
133 34
Examination of 156,270 bills introduced between 93rd and 108th Congresses
45G – Senate - 2010
45G – House - 2010
45G – Rhymes with “TEA”
House Senate2004 268 192008 248 452010 259 532011 (to date)
133 34
Mean for All Bills 2004*
16 4
*Source: J.H. Fowler, Social Networks 28 (2006) at 457
“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
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…
