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Short-line railroads get extended tax creditsTOPEKA, Kan. (AP)--Federal lawmakers have extended a tax credit to encourage rural railroads to invest in track improvements. Congressman Jerry Moran, who sponsored the legislation, said short-line railroads are important for rural America, giving farmers and grain elevators in small towns needed access to larger markets. "Short lines matter to us greatly," said Moran, R-KS. "We are in the middle of the country, we've got to be able to get commodities and goods moved in a cost-effective and efficient way." Ten short-line railroads operate in Kansas, employing 224 people and making up 2,000 of the state's 4,900 miles of rail. Nationally, short-line railroads employ almost 20,000 people, serve 13,000 facilities and haul more than 14 million carloads a year. Big railroads Burlington Northern and Santa Fe and the Union Pacific serve most of eastern Kansas but the short-line railroads cover the rest and are some the big railroad's biggest customers. Moran said he pushed for the tax credits three years ago because short-line railroads were falling behind on investing in their infrastructure. He said that was leading to problems, including derailments, which have become less common as a result of the repairs. The tax credits expire Dec. 31, 2009. Dave Arganbright, assistant vice president of government affairs for RailAmerica, said the tax credits have helped by reducing the company's tax bill. "It's allowed us to do some improvements," Arganbright said. "For every dollar we spend, 50 cents comes from the tax credit." Jacksonville, Fla.-based RailAmerica owns Kyle Railroad, Phillipsburg, which has about 500 miles, mostly in Kansas. It employs 60 on the railroad while another 20 work at its logistics center in Phillipsburg. "We routinely put about $2 million in improvements in the Kyle every year," Arganbright said. Ed McKechnie, executive vice president and chief commercial officer of Watco Cos., said his western Kansas rail lines prosper along with the state of agriculture, especially grain elevators. "If it rains, they clean out the elevators," McKechnie said. "Short lines are a reflection of the economy." Pittsburg-based Watco has 2,000 employees and 3,500 miles of track in 23 states, including about 1,200 miles in Kansas. McKechnie said the company expects to invest $25 million in capital improvements in 2009, about the same as this year, regardless of whether the economy recovers. 12/8/08 Date: 12/2/08
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