Legislative & Regulatory Agenda
Archived agendas from previous years are here.
CSLRA is monitoring the following legislative and regulatory activity:
STATE OF CALIFORNIA
SB 224 (Jackson)
CSLRA has taken an “oppose” position. This bill is carried over to 2018.
ACA 22 (McCarthy and Ting)
Background: ACA 22, the “Middle Class Fiscal Relief Act” was introduced by Assembly Members McCarthy and Ting on January 18, 2018. ACA 22 would impose a 10 percent surcharge on California corporations subject to corporate income and franchise taxes with annual revenue exceeding $1 million. This proposal is offered in response to the 2017 federal tax cuts for corporations.
Recent status: First hearing in Committee will be on or after February 18, 2018.
CSLRA Position: Opposed.
Reasons for CSLRA position: This proposal is one of the largest tax increases in State history. It would be additive to the current state corporate tax rate of 8.84 percent, which is already the highest corporate tax rate among Western states. The combined 18.84 percent tax would be the highest corporate tax rate in the United States, creating a strong incentive for California corporations to move their jobs and operations to other states. It would be highly detrimental to most of CSLRA’s member companies.
Surface Transportation Board (STB) proposed forced access rules
Background: On July 7, 2011, the National Industrial Transportation League (NITL)filed a petition to institute a rulemaking proceeding to modify the Surface Transportation Board’s standards for reciprocal switching. The Board took public comment and held a hearing on the issues raised in the petition. After consideration of the petition and the comments and testimony received, the Board is granting NITL’s petition in part and instituting a rulemaking proceeding in Docket No. EP 711 (Sub-No. 1) to modify the Board’s standards for reciprocal switching. Specifically, NITL proposes regulations under which Board-ordered competitive switching by a Class I railcarrier would be mandatory if four criteria were met: (1) The shipper (or group of shippers) is served by a single Class I rail carrier; (2) there is no effective intermodal or intramodal competition for the movements for which competitive switching is sought; (3) there is or can be ‘‘a working interchange’’ between a Class I carrier and another carrier within a “reasonable distance” of the shipper’s facility; and (4) switching is safe and feasible and would not unduly hamper the carrier’s ability to serve existing shippers.
Recent status: Action on this proposal is held in abeyance pending the appointment of
additional members of the STB. Since January 2017 the STB has only had two of five
CSLRA Position: Opposed.
Reasons for CSLRA position: The proposed regulations would allow a competing rail carrier access to privately-owned land and rail infrastructure of another railroad, a situation not unlike telling a manufacturer that it must give use of part of a privately-owned production facility to one of its competitors. Aside from its economic impact the proposed rule would disrupt rail networks by creating additional interchange points where they are otherwise not needed, adding to network congestion and dwell time. Notably, the proposed regulations do not specifically exempt short lines, so although they are aimed at class 1 railroads it is entirely possible that they could be applied to a situation that would cause a short line to lose its “first mile/last mile” status to a larger railroad that was given “forced access” to the short line’s customers.
Forced Access oppose letters to members of Congress (2/23/17)
Point/Counterpoint discussion on “Forced Access” (3/16/17)
Section 45G Tax Credit
HR.217/S.407 The Building Rail Access for Customers and the Economy Act (BRACE Act)
Since 2005, the Short Line Tax Credit has allowed smaller freight railroads to upgrade their increasing infrastructure to serve the customers in a better and safer manner. The credit allows for a $1 tax credit for every $2 of private investment in infrastructure upgrade and maintenance.
The Short Line Tax Credit (a.k.a 45G Tax Credit) was created in 2005 under Section 45G of the US tax code, and has been renewed with a series of one and two-year extensions. The BRACE Act is intended to make the 45G Tax a permanent addition to the tax code.
Recent status: The ‘45G’ tax credit has been extended retroactively through December 31, 2017 as part of the Bipartisan Budget Act of 2018 signed February 9, 2018. Extension into 2018 and beyond will require additional legislation.
The CSLRA currently supports the passage of the BRACE Act.