Polis’ pen keeps passenger rail bill on track in Northwest Colorado

Gov. Jared Polis made a stop at the Marcia-Pullman Car in Craig on Wednesday, a fitting location for him to sign the Rail and Coal Transition Community Economic Measures bill.

Sponsored by Sen. Dylan Roberts, Rep. Meghan Lukens and Speaker of the House Julie McCluskie, the legislation aims to support both the realization of passenger rail and economic-diversification efforts in transitioning communities in Northwest Colorado.

“This bill is very important so that we can see rail here again serving Northwest Colorado,” Polis said.

The bill seeks to make passenger rail in the mountains more sustainable by incentivizing businesses and operators to utilize freight lines at risk of inactivity due to the transition away from coal — particularly those in Craig and Hayden.

The legislation will do this by creating two income tax credits — one for businesses that use rail to transport freight into or out of a coal-transition community and another for rail carriers that utilize a line at risk of inactivity due to a lack of demand.

At the same time, the bill will make more of the region eligible for economic support from the Colorado Office of Economic Development and International Trade in effort to create opportunities for economic diversification and support rail development in mountain communities.

Sponsors of the bill say a passenger rail line could lead to increased tourism in Northwest Colorado, create additional economic-growth opportunities, and allow locals to commute from Winter Park to Craig with stops in between.

“It makes sense to be in one of our tier-one coal transition communities to get this signed into law today,” said Lukens, calling the bill “one of the many pieces of the mountain rail puzzle.”

Lukens emphasized that she sees the legislation as “very much a workforce development and support bill.”

“From my perspective, mountain rail is really focused on supporting Craig’s workforce, whether that is maintaining good jobs and keeping good jobs in Craig, or supporting workforce that goes between Craig, Hayden and Steamboat,” Lukens said, adding that the bill represents a single, but important, step in the “larger multi-year mountain rail vision.”

The bill’s first income tax credit would incentivize taxpayers to use rail transportation for freight that either comes from or goes to a business in a coal-transition community as long as the Colorado Department of Transportation has determined the rail line is at risk of inactivity due to the transition away from coal.

The Colorado Office of Economic Development will administer the freight tax credit and may annually reserve up to $5 million from 2025 to 2036. After applying for the incentive, a taxpayer could receive a credit for up to 75% of their relevant costs.

The second income tax credit created by the bill will incentivize railroad operators to maintain rail line access in coal-transition communities by offering up to a 75% tax credit for direct operating and capital improvements to maintain or improve a qualified rail line.

CDOT can qualify a rail line if the agency determines it is at risk of inactivity and covered by an agreement for passenger-rail access, and the legislation allows the state to issue up to $5 million worth of those tax credits per year.

The bill would also provide up to $10 million in financial incentives for companies to locate along rail lines in the state’s “coal transition communities,” which are defined as communities that had coal mines, coal-fired power plants, or manufacturing or transportation related to such facilities as of 2017.

“We are talking about mountain rail in very robust and real terms,” McCluskie said.

She shared that the federal government has earmarked significant funds for rail expansion across the United States and noted that “Colorado is well-poised to take advantage of those dollars.”

The proposed mountain line could connect Denver to Winter Park, Steamboat Springs, Hayden and Craig, and allow for commuter transit between the towns. However, continued freight use of the rail line is viewed as key to the financial viability of a passenger-rail service.

Roberts called the bill’s passage “a true win-win-win opportunity for Craig, the entire Yampa Valley and the state of Colorado,” and thanked Polis for traveling to the region “to see Craig and the potential that this town and this community and this county has, particularly with the rail infrastructure that already exists here.”

Roberts said that in addition to helping make a passenger rail in…