What does Preamble of Freight RAILCAR Act of 2025 do?

This bill, formally titled 'To amend the Internal Revenue Code of 1986 to provide a tax credit to encourage the replacement or modernization of inefficient, outdated freight railcars, and for other purposes,' aims to amend the Internal Revenue Code of 1986. The bill intends to provide a tax credit. The stated purpose of the tax credit is to encourage the replacement or modernization of inefficient, outdated freight railcars.

What does SHORT TITLE. of Freight RAILCAR Act of 2025 do?

This bill is formally titled the Freight Rail Assets Investment to Launch Commercial Activity Revitalization Act of 2025.

What does FREIGHT RAILCAR MODERNIZATION CREDIT. of Freight RAILCAR Act of 2025 do?

This section establishes a freight railcar modernization credit under Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986. The credit is equal to 10 percent of a taxpayer's freight railcar fleet modernization expenses. A taxpayer may only take into account a maximum of 1,000 qualified freight railcars per taxable year. Qualifying expenses include the basis of newly built replacement railcars and qualified railcar modernization expenditures. A qualified newly built replacement railcar must replace two railcars scrapped within 48 months and permanently removed from the AAR Umler System. Qualified freight railcars must meet certain capacity or performance requirements or be modernized to meet those standards. The credit is denied for expenses for which a deduction or credit is already allowed under other provisions of the code. The bill specifies rules regarding basis adjustments, sale-leasebacks, syndication, and ineligibility for certain state-owned enterprises. The amendments apply to property placed in service, and amounts paid or incurred, after December 31, 2024.

What does REPORT ON THE FREIGHT RAILCAR MODERNIZATION CREDIT. of Freight RAILCAR Act of 2025 do?

This section requires the Secretary of the Treasury to submit a report to the House Committee on Ways and Means and the Senate Committee on Finance. The report is due within three years of the Act's enactment. The report must detail activity related to the qualified freight railcar credit under section 45BB of the Internal Revenue Code of 1986. The report should include the number of times the credit was claimed. It must also contain information on the number of railcars scrapped due to the credit. The report needs to specify the number of new railcars entered into contract and built as a result of the credit.

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Freight RAILCAR Act of 2025

Last updated: 9/10/2025 · Introduced: 9/10/2025

Author: Jim Banks (R-IN)

TL;DR (AI)

This bill creates a new tax credit equal to 10% of qualified expenses for replacing or modernizing freight railcars.
To qualify, replacement railcars must replace existing railcars permanently removed from service, and all qualifying railcars must meet specific capacity or performance standards.
The Secretary of the Treasury must report on the credit's usage, including the number of railcars scrapped, new railcars contracted, and claims filed, within three years of enactment.

119th Congressin committeeHR. 1200(In Committee)Official page

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Includes provisions on preamble, short title., and 2 more.

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