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Bill would create tax credit to spur rail spurs and industrial-site rail connections; industry backers argue large ROI
Summary
House Bill 365 proposes income-tax credits for businesses or projects that build short rail spurs and connect industrial sites to rail networks; backers said the credit would unlock rural economic development and port-rail capacity, while noting high per-mile construction costs.
Representative Jaspers introduced House Bill 365, a proposal that would create a tax-credit program to encourage private and public investment in rail spurs and connections between industrial sites and the state’s rail network.
The measure would offer a 10% tax credit for businesses located or expanding adjacent to the rail network and a 50% credit for building new rail infrastructure spurs that physically connect industrial customers to rail lines. The proposal includes project caps, an annual $75,000,000 allocation beginning in 2026 and a five-year sunset in the draft language presented to the committee. Witness testimony from rail advisors and economic developers emphasized the high cost of constructing off-ramps and the potential economic return: connector tracks can cost multiple millions per mile and, in other states with similar programs, every dollar of credit has produced many multiples in economic investment and jobs.
Why it matters: Short-line rail connections often determine whether large industrial projects locate in a region. Backers said the credit would encourage investment in rural industrial sites and port connections, expand supply-chain capacity and increase local job opportunities; committee members flagged coordination with existing short-line maintenance credits and the need to ensure projects meet public-interest criteria.
The hearing was informational and no committee vote was taken.
