Rail line reps press Rep. Blum for permanent extension of tax credit for maintenance, safety improvements

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LISBON — Representatives of Iowa railroads pressed U.S. Rep. Rod Blum for a permanent extension of a tax credit they said short lines use for maintenance and safety enhancements.

Class I railroads — the larger lines, spend tens of millions dollars each year on rail line maintenance,” Phil Meraz of the Iowa Department of Transportation told Blum during his visit to HiRAIL’s plant in Lisbon Thursday.

“We have a variety of sources” not available to short line railroads, Jim Kvedaras, government affairs director for CN told the freshman Republican in support of the credit.

Short lines use the tax credit for maintaining rail, ties and bridges, said Cory Hoffmann of Cedar Rapids & Iowa City Railway (CRANDIC) explained. Short lines, which are defined by their revenue, not miles of track or tons of freight, connect local shippers, ag suppliers, food processors and manufacturers to main lines.

“They hook us up in a global economy,” said Sean Winkler of the Railway Engineering-Maintenance Suppliers Association.

Blum heard similar reports from the Iowa Interstate and Iowa Northern, which operate some of the 3,850 miles of rail line in Iowa. Much of the freight they haul, Onna Houck of Iowa Interstate said, is ethanol. She told Blum that 10 years ago corn and beans accounted for 70 percent of its freight. With growth in the production of ethanol and its by-products, corn and beans amount to 17 percent of Iowa Interstate’s freight.

More specific to HiRAIL, Blum, a Dubuque businessman, was told more funding is needed to improve safety at the nation’s 250,000 rail crossings, including about 4,300 in Iowa.

The state gets about $1.1 million a year in Section 130 Fixing America’s Surface Transportation (FAST) Act funds for the elimination of hazards at railway-highway crossings on state roads, Meraz said. The state has been putting in between $4 million and $5 million a year into a state program that supports similar improvements on local roads. Still, he said, the DOT has applications for $35 million in assistance.

Blum then toured HiRAIL, which was founded in 1983. It manufactures 100 percent rubber railroad grade crossing systems. For over 25 years, HiRAIL has used recycled rubber truck tires as the base material for its products. HiRAIL has seven employees at its Lisbon plant and staffs sales offices from Canada to Mexico.

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