SB 213

This bill creates an income and franchise tax credit for railroads that make rail infrastructure and railroad maintenance expenditures. Under the bill, a claimant that is classified by the U.S. Surface Transportation Board as a class II or class III railroad may claim a rail infrastructure modernization credit that is equal to the sum of the following amounts:

1. Fifty percent of the qualified short line railroad maintenance expenditures made by the railroad. This portion of the credit is limited to an amount equal to $5,000 multiplied by the number of miles of railroad track owned or leased by the railroad. The bill defines “qualified short line railroad maintenance expenditures” as gross expenditures for railroad infrastructure rehabilitation or maintenance improvements located in this state.

2. Fifty percent of the railroad’s qualified new rail infrastructure expenditures. This portion of the credit is limited to $2,000,000 per project. The bill defines “qualified new rail infrastructure expenditures” as expenditures for rail infrastructure and improvements in this state placed in service after December 31, 2024.

A claimant that owns or leases a rail siding, industrial spur, or industry track may claim the portion of the credit described above for the claimant’s qualified new rail infrastructure expenditures.

Before claiming a credit under the bill, a claimant must first apply to and receive approval from the Department of Revenue to claim the credit. DOR may approve up to $10,000,000 in total credits for qualified new rail infrastructure expenditures for each tax year, and DOR must approve applications for credits on a first-come, first-served basis.