Short-line rail tax credit included in agriculture package draws support from rail, utilities and economic-development groups
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Summary
House Bill 27-16, incorporated into the agriculture tax-credit package, would create a short-line rail modernization tax credit (track rehabilitation and strategic industrial development) with a 50% credit and program cap cited by witnesses; supporters argued it will spur rural sites and remove trucks from state roads, while members sought limits on eligible expenses and clarity on transferability.
A short-line rail modernization credit was presented as part of the broader agriculture tax-credit package and was described in public testimony as two buckets: a track-rehabilitation credit capped per mile and a strategic industrial-development credit for new rail leads that serve expanding or new customers.
Jeff Van Schaake of the Missouri Eastern Railroad described severe infrastructure problems on his line, including standing derailments and flood-damaged bridges, and said short-line credits would accelerate private investment. "This short line provision provides a lifeline to railroads like ours," he said, adding the provision envisions a 50% credit and cited a $9.5 million program cap for the short-line component.
Supporters from the Missouri Economic Development Council, Missouri Railroad Association and local electric cooperatives argued the credit would make rural rail-adjacent industrial sites competitive by reducing upfront infrastructure costs and lowering risk for site selectors. Jana Rosier (Osage Valley Electric Cooperative) said many rural sites are eliminated early in site selection because of the cost of rail improvements.
Committee members asked technical questions about eligibility and whether credits could be used for vegetation control or parking cars rather than capital improvements; witnesses said the bill intends to focus on rehabilitation and construction that enables economic development. Representative Nolte and Representative Plank pressed for language to limit credits to qualifying rail construction and to avoid subsidizing maintenance that primarily benefits large Class I carriers.
The hearing on HB 27-16 concluded with no opposition on the record and the committee adjourned. No committee vote on HB 27-16 was reported.
