LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6560 NOTE PREPARED: Feb 10, 2025
BILL NUMBER: SB 292 BILL AMENDED: Feb 4, 2025
SUBJECT: Short Line Railroad Tax Credit.
FIRST AUTHOR: Sen. Doriot BILL STATUS: As Passed Senate
FIRST SPONSOR: Rep. Heine
FUNDS AFFECTED:XGENERAL IMPACT: State
DEDICATED
FEDERAL
Summary of Legislation: The bill allows a taxpayer to claim a credit against state income tax liability for
certain qualified railroad expenditures and qualified new rail infrastructure expenditures. It specifies the
amount of the credit. The bill limits the total amount of credits that may be allowed in a state fiscal year to:
(1) $10,000 for qualified railroad expenditures; and (2) $10,000 for qualified new rail infrastructure
expenditures.
Effective Date: January 1, 2025 (retroactive).
Explanation of State Expenditures: Department of State Revenue (DOR): The DOR would incur additional
administrative costs in implementing the tax credit established by the bill. DOR would have to revise tax
forms, instructions, and software to reflect the changes made by the bill. DOR would also be required to
certify credits and payments of qualified expenditures. The DOR’s current level of resources should be
sufficient to implement these changes.
Explanation of State Revenues: The bill establishes a nonrefundable Adjusted Gross Income (AGI) Tax
credit for Class II or Class III railroad companies and owners or lessees of adjacent rail siding, industrial
spurs, or industrial track. The credit is equal to 50% of the cost of qualifying expenses for both new rail
infrastructure projects and for maintenance, reconstruction, or replacement of existing railroad infrastructure.
The tax credit would reduce General Fund revenues by up to $20,000 in FY 2026 and FY 2027. The tax
credit may be claimed against tax liability for eligible taxpayers in tax years 2025 through 2027. The credit
expires December 31, 2027.
Additional Information - As of 2021, one Class II railroad and 38 Class III railroads operated a combination
of 1,549 miles of owned or leased rail in Indiana. The State Rail Plan reports annual funding of Industrial
Rail Service Fund grants of $2.6 M for rehabilitation projects. The tax credit for qualified railroad
expenditures may not be claimed on expenditures for maintenance, reconstruction, or replacement which
receive a federal tax credit or are funded by a state or federal grant.
Explanation of Local Expenditures:
SB 292 1 Explanation of Local Revenues:
State Agencies Affected: Department of State Revenue.
Local Agencies Affected:
Information Sources: Indiana Department of Transportation. 2021 Indiana State Rail Plan.
https://www.in.gov/indot/files/INDOT_SRP_Combined_FINAL_Nov-2021-INDOT-website.pdf
Fiscal Analyst: Camille Tesch, 317-232-5293.
SB 292 2