45G Short Line Tax Credit Extended Five Years
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The newsletter for Watco Companies January 2020, Volume 21, Issue 1 Watco's Decatur & Eastern 45G short line tax credit Illinois Railroad expands line extended five years by Tracie VanBecelaere providing service to the current Managing Editor grain customers. All of the team by Tracie VanBecelaere December of 2015 have we been able members serving the Charleston Managing Editor to go into a calendar year knowing At midnight on December 31, Sub are experienced in the rail we have the tax credit in place. Hav- 2019, Watco's Decatur & Eastern industry. Team members include Watco, along with the rest of the ing a three year advance runway, I Illinois Railroad (DREI) grew by Ben Jackson, Branden Shirley, Mat- short line industry, received an early hope will provide assurance that we 56 miles. The growth was a result thew Davis, and Tim Allen. MOW Christmas present when two appro- can begin and complete significant of the purchase of the Eastern Il- team members are Blake Blair and priations bills projects using linois Railroad (EIRC) from Archer Robert Harvey, with another to be were passed on the credit." Daniels Midland (ADM). EIRC has added shortly. December 20, In addition been operating the line since April "There some good opportunities 2019. to the 45G of 1991. for growth on this line," said Doug Included in tax credit, HR The 56-mile line has been dubbed Story, vice president agricultural the legislation 1865 included the Charleston Sub and runs from marketing. "The infrastructure is in (HR 1865) was several other Neoga, Illinois, to Metcalf, Ill., good shape and the customers have a record five- priority items where it connects to the existing the advantage of connecting to dif- year extension for the trans- DREI. ferent Class I carriers on the north of the 45G portation The line primarily serves two and south ends of the line." short line tax appropriations credit, mak- section of the grain customers, ADM and Total DREI General Manager Denon ing it effective bill such as Grain Marketing (TGM). Upon Green agreed with Story on the retroactively to Projects such as the one above, where they $325 mil- taking over the line, the new team potential for growth on the line and 2018 and for- are replacing ties on the Ann Arbor Rail- lion for the members were busy loading a unit stated, "We have an experienced ward through road, will benefit from the passing of the next round of grain train at Neoga for TGM. crew ready to serve our current 2022. The Short Line Tax Credit. CRISI grants, There are four train and engine customers and we are prepared to credit incen- $1 billion for service team members and two provide service for any new busi- tivizes short line railroads to make BUILD grants and $2.5 million for maintenance of way team members ness opportunities that we bring in." additional investments in their track the Short Line Safety Institute. infrastructure that ultimately connects Although this may sound like customers and communities to the a large amount, it's offset by the national freight network and beyond. amount short lines save taxpayers in The tax credit allows for a credit of annual wear and tear on the high- 50 cents for each dollar that railroads ways. In addition, the industry and its invest in track and bridge improve- suppliers support more than 61,000 ments and is capped at $3,500 per jobs in the U.S., many in rural com- mile. munities and adds $6.5 billion to the “After a record amount of cospon- U.S. economy according to Pricewa- sors and tremendous support for 45G terhouseCoopers. at the highest levels in Congress, Idaho U.S. Senator Mike Crapo has we are thrilled with this outcome,” been a long-time supporter and origi- said Laura McNichol, Watco SVP of nal sponsor of the 45G legislation. He Government and Industry Relations. said, "Short line rail is like economic “This is the first time in the history of bread and butter, working with Idaho this credit that we have 45G for five farmers and industry." years. We can now plan for its use on Thanks to the many supporters a go-forward basis.” of the legislation, short line rail- Chuck Baker, president of the roads will be able to plan projects in American Short Line and Regional advance, secure materials, schedule Railroad Association, said, "This is a contractors and more efficiently and significant win for our industry, our economically tackle the projects employees, our suppliers, and the needed to maintain their infrastruc- The Decatur & Eastern Illinois Railroad loads up the first unit train to thousands of customers and com- ture in order to serve customers and go out of the Total Grain Marketing facility in Neoga, Illinois. munities that depend on us. Not since provide the safest service possible. Oklahoma railcar coordinator enjoys learning newskills by Jay Benedict The opportunities for personal growth are the Digital Communication and Social Media icing on the cake for Cameron, though, who Specialist already finds plenty to enjoy about his job. "Working with these guys is the best part of the In 2017, Cameron Reed didn’t really know job. You get on here, and it's not just, 'Hey, I'll see anything about railroads or how to repair railcars, you in the morning' and 'I'll see you tomorrow' but he did know he wanted to find a new job. He at the end of the day. We build a relationship was working in a warehouse, but they were get- with each other here, unlike anywhere I've ting ready to move him to the night shift, and that ever worked. We're not just coming in to get wasn't something he wanted. our money and go home. We've actually built a "I started looking for another job when I family atmosphere here, like a band of brothers," stumbled upon this one. It was a lot closer to Cameron said. my house too, but I didn't know anything about The Mill Creek team operates inside Martin railcars," Cameron said. "It was just one of those Marietta's facility, allowing them to interact things. I saw it was a day shift job. I got on, and it closely with them and the Class I service pro- just took off. There's something about this indus- vider, BNSF. That proximity is a crucial part of try and this job. It wasn't just a job anymore. It the team's success. was something that I wanted to make a career of "Having that relationship, seeing the customer and go far with, and that's what I've been trying every day, having the face-to-face meetings, you to do since I got here." build that over time. The same goes with BNSF He joined the Watco team in April 2017 as a here. We talk with them about whatever issues railcar repairman when Watco created the Mill may come. They trust me and I trust them," Cam- Creek, Oklahoma, Mobile Mechanical Unit. It eron said. "We've got a lot at stake when we go was originally a team of three, but since then, the Railcar coordinator Cameron Reed was selected lock something out, and being here on their site team has expanded to five, including Cameron. to participate in Watco University's Leadership with them is a lot better, especially when prob- He's the last of the original team left, though. Development Program because of the potential lems arise. We get all that handled face-to-face." he has shown as a leader while serving customer Now, two and a half years in, Cameron says Watco's now international network of Martin Marietta at the Mill Creek, Oklahoma, there's not much that he doesn't know how to mechanical shop. mechanical shops and the growth of mobile do on the railcars they service. He's now the mechanical teams have played a key role in location's railcar coordinator. "My job is to come in every day and have an ensuring our sites have the resources they need "We got on, stuck our heads in the AAR open line of communication with Martin Mariet- when an issue arises as well. (Association of American Railroads) book, and ta, figure out we've got to do for the day, and per- "Any time I have a question or problem, I can learned as much as we could learn. Everyone that form most of the operation manager tasks here," pick up the phone can call someone or shoot off would come around that were the railcar gurus, he said. "My operations manager, Richardjames an email. The responses are always very fast. we'd learn from them too," Cameron said. "We Drummondo, trusts me to do everything here I always get the help I need, and I'm never left did some training at the Cleburne (Texas) shop, since I'm on-site every day. I'm in the meetings wondering. The amount of resources we have in and then went to the Dallas location to help them with the customer, taking care of these guys and this company is crazy compared to other places get started. Then, we came back here and hit the making sure they've got everything they need, I've worked," Cameron said. ground running." and there's pretty much nothing I don't pitch in As for his future, Cameron sees more growth, The Mill Creek location is dedicated to one and help with." for himself and his team.