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S. 203 (116th): BRACE Act of 2019

Is this legislation dealing with train maintenance on the right track?


There are more than 600 regional railroads and so-called “short lines” across the country, constituting 29% of the nation’s freight rail. A popular federal tax credit created in 2004 equals half of the costs for railroad maintenance and track improvement for these rail lines.

The tax credit has proved popular and been perpetually extended. It was originally enacted to last from 2004 to 2009. Then a year later in 2010, it was both retroactively applied and extended to 2012. Similar provisions kept happening every few years.

In December 2019, the tax credit was extended once again to 2022.

What the legislation does

The Building Rail Access for Customers and the Economy (BRACE) Act would make the railroad track maintenance tax credit permanent. This would eliminate the need to reauthorize it every few years, which could potentially fail to pass.

The House version was introduced on January 11, 2019 as bill number H.R. 510, by Rep. Earl Blumenauer (D-OR3). The Senate version was introduced two weeks later on January 24, 2019 as bill number S. 203, by Sen. Michael Crapo (R-ID).

What supporters say

Supporters argue the legislation helps an important transportation service better make their needed repairs and upgrades.

“Our nation’s short line railroads supply an invaluable service to small factories, mills, grain elevators, and other facilities in Oregon and across the country,” Rep. Blumenauer said in a press release. “More than one million Americans in urban and rural communities are employed by rail customers on these lines. Making this tax credit permanent will help these railroads to invest in the critical rail connections that bring their goods to market.”

“Our agriculture communities rely on small business freight railroads to connect their products to markets across the nation and around the globe,” Sen. Crapo said in a separate press release. “These are crucial economic corridors that serve our communities across the nation. This measure will allow short line railroads to make long-term plans for infrastructure repairs and upgrades, improving the link between our rural communities and the national freight railroad network.”

What opponents say

Opponents counter that the provision, well-intentioned though it may be, distorts the free market economics that would better govern the industry.

“Consider the Railroad Track Maintenance Tax Credit, which acts as an incentive for companies like ours to maintain and improve the railroads we use,” Philip Ellender, president of government and public affairs at Koch Companies Public Sector, wrote for the Morning Consult. “While we currently utilize [this] provisions, [because] doing otherwise would place us at a competitive disadvantage, we aggressively advocate for [its] elimination.”

“Some may argue that the examples above are well-intentioned, but it is absurd for politicians to micro-manage how any company should conduct its business beyond the normal limits of the law,” Ellender continued. “It’s simply unnecessary and corrupting to a free and open economy. The problem is that policymakers have so aggressively rigged the system with cronyism that these policies have become difficult to avoid and impractical to reject. That’s why they must all be eliminated.”

Odds of passage

The House version has attracted 299 bipartisan cosponsors: 154 Democrats and 145 Republicans. It awaits a potential vote in the House Ways and Means Committee.

The Senate version has attracted 62 bipartisan cosponsors: 32 Democrats, 29 Republicans, and one independent. It awaits a potential vote in the Senate Finance Committee.

The December 2019 votes on the larger appropriations legislation, which included the railroad track maintenance tax credit’s extension to 2022, were 297 to 120 in the House and 71 to 23 in the Senate. (The legislation included hundreds of provisions, some of which were far more controversial.)

In the House, most Democrats supported the larger legislation 218–7, while most Republicans opposed it 79–112. In the Senate, most members of both parties supported the larger legislation: 31–21 for Republicans and 39–2 for Democrats.

Last updated Jan 22, 2020. View all GovTrack summaries.

The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Jan 24, 2019.

Building Rail Access for Customers and the Economy Act of 2019 or the BRACE Act of 2019

This bill permanently extends the tax credit for railroad track maintenance. The extension applies to expenditures paid or incurred during tax years beginning after 2017. Assignments of miles of railroad track, including related expenditures, for tax years beginning on or after January 1, 2018, and before January 1, 2019, must be treated as effective as of the close of such taxable year if they are made pursuant to a written agreement entered into within 90 days of the enactment of this bill.