Tax incentives to spur more private investment in rail infrastructure was among the key topics when freight rail industry stakeholders converged on Washington, D.C. for Railroad Day on Capitol Hill 2025.
More than 300 people representing railroads, suppliers, contractors and rail associations met with members of Congress during Railroad Day on Capitol Hill on May 7, ahead of a pivotal period for legislative decisions that impact the sector.
Chuck Baker, President of the American Short Line and Regional Railroad Association (ASLRRA), pointed out that, in coming weeks, Congress will be taking up FY26 Appropriations, a tax bill, and beginning to outline priorities for a Surface Transportation bill reauthorization. "Railroad Day on Capitol Hill is an opportune time for our industry to put a face on the entities that their actions will impact, making connections that will be invaluable to the industry and to Congress as it considers legislation that will produce powerful outcomes for the public," Baker said.
Participating associations also included the Association of American Railroads (AAR), the National Railroad Construction & Maintenance Association (NRC), GoRail, the Railway Engineering-Maintenance Suppliers Association (REMSA), Railway Systems Suppliers, Inc (RSSI), The Railway Tie Association (RTA) and the Railway Supply Institute (RSI).
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Railroad Day on Capitol Hill, 2025: Call to Congress
In a summary statement, stakeholders called on Congress to:
Maintain and extend tax policies that incentivize private investment in infrastructure, such as the 45G tax credit and corporate SALT deductions.
Restore the Highway Trust Fund (HTF) to a user-based system and oppose increases to truck size and weight limits.
Advance permitting reforms that provide greater transparency and predictability while ensuring timely, focused environmental reviews.
Guarantee full and consistent funding for safety-enhancing rail grant programs, including the Consolidated Rail Infrastructure and Safety Improvements (CRISI), Railroad Crossing Elimination (RCE) and Section 130 programs.
The impact of tax policies on railroad infrastructure is in the spotlight following the introduction of proposed legislation to modernize railroad maintenance tax credits. The ASLRRA lauds the 45G Short Line Tax Credit, introduced in 2005, as "instrumental" in addressing the leading causes of short line derailments -- worn out track and ties -- but points out that the credit has fallen woefully behind inflation.
Progress: Increasing Railroad Maintenance Tax Credits
A week prior to Railroad Day on Capitol Hill, on April 30, the Senate introduced its version of the Short Line Railroad Maintenance Tax Credit Modernization Bill, a companion to a House bill issued in January. Put forward by Senators Mike Crapo (R-Idaho) and Ron Wyden (D-Ore.), the bill will increase the per-mile credit cap from $3,500 to $6,100; index the cap for inflation; and make all track eligible for the credit. In the Rail Day 2025 call to action, railroad organizations urged politicians to co-sponsor and support both bills.
In the same statement, rail bodies warned that any caps to corporate SALT deductions could reduce rail safety and efficiency, and would effectively be a tax hike: "At a time when the focus is on bringing jobs and investment back to the United States, Congress should not enact tax policies that target industries, like railroads, with the majority of their assets and activities based in the U.S," the Rail Day 2025 action summary stated.
Embracing data-based technology solutions
The call to action coincides with the Association of American Railroads publicly urging the US Department of Transportation (USDOT) to modernize and streamline rail regulations that stifle innovation. In response to a USDOT Request for Information, the AAR called for "an overall shift from rigid, obsolete regulations to performance-based standards that drive innovation and allow railroads to adopt modern technologies." The national freight rail organization also urged the Department to consider equity across transportation modes when regulating new and emerging technologies.
"For too long, outdated, arbitrary regulations have stood in the way of implementing data-backed solutions that can further strengthen railroads' already remarkable safety record," said AAR President and CEO Ian Jefferies. "As technology advances, railroads must be empowered to innovate --- not be hamstrung by prescriptive rules, including some written more than 50 years ago."
The AAR reiterated its call for the repeal of the rule requiring every train to be operated by a minimum of two crew -- which it says has " failed to quantify any safety benefit to justify its significant costs" -- as well as calling on the USDOT to:
Modernize track inspection regulations to facilitate the use of proven technology that offers enhanced safety benefits.
Complete regulatory revisions initiated during the first Trump administration to reflect the ubiquitous use of modern, self-diagnostic signal equipment across the rail network.
Finalize a previously proposed rule that would reflect advances in modern-day air brake technology by extending inspection intervals.
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