Summary

Creates a new federal tax credit that pays 10% of a taxpayer's qualifying freight railcar fleet modernization expenses, with a per-taxpayer limit that counts no more than 1,000 qualified railcars in a taxable year. The law defines eligible expenses and replacement rules for newly built railcars (including requirements to scrap replaced cars and timing rules), and requires the Treasury to report after three years on credit use and related railcar activity. The credit is added to the general business credits in the Internal Revenue Code and includes detailed definitions for terms such as qualified newly built replacement railcar, qualified railcar modernization expenditures, and qualified facility. The text does not set an overall dollar cap, effective date, or detailed interaction rules with other tax provisions beyond placement in the general business credits; Treasury must produce a usage report within three years.

• Creates a 10% federal tax credit for freight railcar fleet modernization expenses.
• Limits credit calculation per taxpayer by counting no more than 1,000 qualified freight railcars in any taxable year.
• Defines many eligibility terms, including rules for newly built replacement railcars and required scrappage of replaced cars.
• A qualified newly built replacement railcar must be built after enactment, ordered or placed in service within 3 years, and replace two scrapped taxpayer-owned cars from the prior 48 months.
• No overall program dollar cap, effective date, or detailed interactions with other tax law are specified in the text.
• Requires a Treasury report to Congress within three years with counts of credit claims, scrapped railcars, new contracts, and new railcars built.
• Adds the credit to the set of general business credits, so it will interact with existing tax credit rules and likely need IRS guidance for implementation.
• Targets replacement and modernization activity, which may spur demand for new railcars and for modernization services but has an unknown fiscal cost.