CRAIG, Colo. — Colorado has rolled out a new Freight Rail Tax Credit Program to support economic growth in coal transition communities, beginning with Union Pacific’s Craig Branch Line in Northwest Colorado.
The program offers up to 75% in tax credits for businesses that either expand or begin using freight rail in areas impacted by coal plant closures. The initial focus is on the Yampa Valley, including Moffat, Rio Blanco, and Routt counties, where local economies are shifting away from coal.
“As the economy moves away from the high cost of coal power, Colorado is focused on saving people money and supporting local job creation and business growth,” said Governor Jared Polis.
Established by Senate Bill 24-190 under Colorado Revised Statute 39-22-563, the program helps offset costs like railroad fees, transloading, and rail infrastructure development. It will provide up to $5 million in annual tax credits from 2025 through 2036 to qualifying businesses using the Craig Branch Line.
Eve Lieberman, Executive Director of the Colorado Office of Economic Development and International Trade (OEDIT), emphasized the Craig Branch Line’s role as an “economic artery” for the region.
The initiative is a joint effort by OEDIT, the Colorado Department of Transportation (CDOT), and the Office of Just Transition (OJT). CDOT will conduct annual reviews to determine if more rail lines should be added to the program.
Local governments have also voiced support for future passenger rail development. The City of Craig, Town of Hayden, Routt County, and Steamboat Springs have passed resolutions backing CDOT’s Mountain Rail project and are working together on station planning.
“This program brings new jobs and makes passenger rail from Craig to Denver a realistic goal by the end of the decade,” said State Senator Dylan Roberts.
Representative Meghan Lukens added, “Increased rail revenue from freight makes passenger rail more affordable and opens doors for business growth on the Western Slope.”
This tax credit is part of a broader strategy to help coal-reliant regions transition economically. So far, OEDIT and OJT have invested over $11 million in business development and job creation, with $8 million directed specifically toward Northwest Colorado.
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