,i #aafth ,,congress #b;d ,session ,h4 ,r4 #hjhb ,,in ,,the ,,house ,,of ,,representatives ,august #ba1 #bjbj,mr4 ,schneider 7for himself1 ,mr4 ,la,hood1 ,mr4 ,lipinski1 ,mr4 ,crawford1 ,mr4 ,blumenauer1 and ,mr4 ,ferguson7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide a tax credit to encourage the replacement or modernization of inefficient1 outdated freight railcars1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,freight ,rail ,assistance and ,investment to ,launch ,coronavirus-era ,activity and ,recovery ,act of #bjbj or the ,freight ,,railcar ,act of #bjbj4 #b4 ,qualified freight railcar credit 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #de,u4 ,qualified freight railcar credit 7a7 ,general rule ,for purposes of section #ch1 the qualified freight railcar credit determined under this section for the taxable year is an amount equal to #ej percent of the sum of-- 7#a7 the qualifying replacement or modernization amount1 7#b7 the qualifying scrap amount1 and 7#c7 the qualifying railcar facility and technology modernization amount4 7b7 ,definitions ,in this section-- 7#a7 ,qualifying replacement or modernization amount ,the term qualifying replacement or modernization amount means-- 7,a7 the basis of any newly built qualified freight railcar placed in service by the taxpayer during the taxable year1 plus 7,b7 the qualified freight railcar modernization expenditures of the taxpayer for the taxable year4 7#b7 ,qualifying scrap amount ,the term qualifying scrap amount means-- 7,a7 the depreciated value of a qualified freight railcar1 as such value is defined and calculated in accordance with the ,association of ,american ,railroads ,interchange ,rules1 less 7,b7 the sum of scrap and part out net proceeds received by the taxpayer for such qualified freight railcar4 7#c7 ,qualifying railcar facility and technology modernization amount ,the term qualifying railcar facility equipment and technology modernization amount means total expenditures chargeable to capital account by a qualified railway supply company-- 7,a7 for re-equipping and enhancing the infrastructure of an existing qualified facility for the manufacture1 repair1 or modernization of railcars1 which-- 7i7 enables such facility1 after such improvements1 to modernize railcars such that they will meet the requirements of the ,association of ,american ,railroads ,standard ,s-#bhf or the design standards set forth in the ,pipeline and ,hazardous ,materials ,safety ,administration's ,,hm-#bea final rule 7as amended by ,,hm-#bea;,c71 or 7ii7 enables such facility to implement enhanced controls to meet environmental standards including emissions limits under the ,clean ,air ,act or wastewater standards under the ,clean ,water ,act and corresponding state_/local requirements1 or 7,b7 is associated with the deployment of technology1 including equipment1 used by any owner of a qualified freight railcar or an existing qualified facility to manufacture1 repair1 or modernize railcars or to manufacture railcar components that improves the efficiency1 quality1 or safety of railcar or railcar component manufacturing1 repair1 modernization or fleet management operations4 7#d7 ,newly built replacement railcar ,the term newly built replacement railcar means a qualified freight railcar which-- 7,a7 is built after the date of the enactment of this section1 and 7,b7 is ordered or originally placed in service before ,january #a1 #bjbe4 7#e7 ,originates ,the term originates refers to the country of origin of a part1 component1 subassembly or finished product1 as described in the ,rules of ,origin of ,article #d4b of the ,united ,states-,mexico-,canada ,agreement 7#ai ,u4,s4,c4 #deca7;c77 or any subsequent free trade agreement between the ,united ,states1 ,mexico1 and ,canada4 7#f7 ,qualified railway supply company ,the term qualified railway supply company means an entity that manufactures1 repairs1 modernizes or owns a qualified freight railcar or manufactures components for qualified freight railcars1 that is not an entity that would be ineligible for an award of a contract or subcontract under #di ,u4,s4,c4 #ecbc7u74 7#g7 ,qualified freight railcar 7,a7 ,in general ,the term qualified freight railcar means a freight railcar that-- 7i7 is either acquired or modernized by the taxpayer after the date of the enactment of this section1 7ii7 meets the significant improvement requirements for capacity1 fuel efficiency1 or performance of subparagraph 7,b71 7iii7 originates from a qualified railway supply company and was built in a qualified facility1 and 7iv7 with respect to which no credit under this section has been previously claimed by any taxpayer4 7,b7 ,significant improvement requirements 7i7 ,in general ,a freight railcar shall be treated as meeting significant improvement requirements for capacity1 fuel efficiency1 or performance if-- 7,i7 in the case of a newly built replacement railcar1 the taxpayer certifies-- 7aa7 such railcar is owned by the taxpayer1 and 7bb7 that-- 7,,aa7 such railcar replaces two freight railcars owned by the taxpayer that were in service within the #dh months preceding the taxable year1 and 7,,bb7 such freight railcars were scrapped and permanently removed from the ,,aar ,umler ,system master file during the taxable year1 and 7,,ii7 in the case of a freight railcar that is modernized1 the taxpayer certifies that the modernization has resulted in a significant improvement in capacity1 fuel efficiency or performance4 7ii7 ,significant improvement ,for purposes of this paragraph1 an improvement in capacity or fuel efficiency and performance with respect to a modernized freight railcar shall be treated as a significant improvement if-- 7,i7 such capacity or fuel efficiency1 as the case may be1 is increased by at least #h percent1 or 7,,ii7 in the case of performance1 the qualified freight railcar meets the requirements of the ,association of ,american ,railroads ,standard ,s-#bhf or is modernized to meet the design standards set forth in final rule ,,hm-#bea of the ,pipeline and ,hazardous ,materials ,safety ,administration 7as amended by ,,hm-#bea;,c74 7,c7 ,modernized ,the term modernized means a modification1 retrofit1 conversion or rebuild for the purpose of meeting capacity1 fuel efficiency1 or performance criteria identified in subparagraph 7,b77ii74 7#h7 ,qualified freight railcar modernization expenditure ,the term qualified freight railcar significant improvement expenditure means any amount paid or incurred-- 7,a7 in connection with the modernization of a freight railcar resulting in such railcar being designated a qualified freight railcar1 and 7,b7 which is properly chargeable to a capital account with respect to such freight railcar4 7#i7 ,qualified facility ,the term qualified facility means a facility that is not owned by an entity that would be ineligible for an award of a contract or subcontract under #di ,u4,s4,c4 #ecbc7u74 7c7 ,special rules 7#a7 ,denial of double benefit ,no credit shall be allowed under subsection 7a7 for any expense for which a deduction or credit is allowed under any other provision of this chapter4 7#b7 ,credit treated as refundable ,in the case of any taxable year in which the taxpayer is allowed a credit under subsection 7a77#a7 and is unable to utilize such credit as an offset to their regular tax liability1 the taxpayer may elect to have such credit treated as an overpayment and refunded to the taxpayer for such year4 7#c7 ,basis adjustment ,for purposes of this subtitle1 if a credit is allowed under subsection 7a77#a7 with respect to any qualified freight railcar1 the basis of such railcar shall be reduced by the amount of the credit so allowed4 7#d7 ,sale-leaseback ,for purposes of subsection 7a77#a71 if any qualified freight railcar is-- 7,a7 originally placed in service by a person after the date of the enactment of this section1 and 7,b7 sold and leased back by such person within #c months after the railcars are originally placed in service 7or1 in the case of more than one railcar subject to the same lease1 within #c months after the date the final railcar is placed in service1 so long as the period between the time the first railcar is placed in service and the time the last railcar is placed in service does not exceed #bd months71 such railcar shall be treated as originally placed in service not earlier than the date on which such railcar is used under the leaseback referred to in this paragraph4 7#e7 ,syndication ,for purposes of subsection 7a77#a71 if-- 7,a7 any qualified freight railcar is originally placed in service after the date of enactment of this section by the lessor of such railcar1 7,b7 such railcar is sold by such lessor or any subsequent purchaser within #c months after the date such railcar was originally placed in service 7or1 in the case of more than one railcar subject to the same lease1 within #c months after the date the final railcar is placed in service and the time the last railcar is placed in service does not exceed #ab months71 and 7,c7 the user of such railcar after the last sale during such #c-month period remains the same as when such railcar was originally placed in service1 such railcars shall be treated as originally placed in service not earlier than the date of such last sale4 7#f7 ,entities owned or controlled by state-owned enterprises ineligible ,no credit under subsection 7a7 shall be allowed to any taxpayer that would be ineligible for an award of a contract or subcontract under #di ,u4,s4,c4 #ecbc7u74 7d7 ,termination ,this section shall not apply to any qualifying railcar facility equipment and technology modernization amount after ,december #ca1 #bjbc1 or to any qualifying replacement or modernization amount1 or any qualifying scrap amount after ,december #ca1 #bjbd4 4 7b7 ,credit allowed as business credit ,section #ch7;b7 of the ,internal ,revenue ,code of #aihf 7relating to current year business credit7 is amended by striking plus at the end of paragraph 7#cb71 by striking the period at the end of paragraph 7#cc7 and inserting 1 plus and by inserting at the end thereof the following new paragraph3 7#cd7 the qualified freight railcar credit determined under section #de,u4 4 7c7 ,coordination with section #ee ,section #ch7;c77#d77;,b7 of the ,internal ,revenue ,code of #aihf is amended by redesignating clauses 7x71 7xi71 and 7xii7 as clauses 7xi71 7xii71 and 7xiii7 respectively1 and by inserting after clause 7ix7 the following new clause3 7x7 the qualified freight railcar credit determined under section #de,u1 4 7d7 ,clerical amendment ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after the item relating to section #de,t the following new item3 ,sec4 #de,u4 ,qualified freight railcar credit4 4 7e7 ,effective date ,the amendments made by this section shall apply to property placed in service1 and amounts paid or incurred1 after ,april #cj1 #bjbj4 #c4 ,report on the qualified freight railcar credit 7a7 ,in general ,not later than #c years after the date of the enactment of this ,act1 the ,secretary of the ,treasury 7or the ,secretary's delegate71 shall submit to the ,committee on ,ways and ,means of the ,house of ,representatives and the ,committee on ,finance of the ,senate a report on activity with respect to the qualified freight railcar credit under section #cf;,d of the ,internal ,revenue ,code of #aihf4 7b7 ,report contents ,the report submitted under subsection 7a7 shall contain information with respect to the following3 7#a7 ,the number of times the credit was claimed4 7#b7 ,the number of railcars scrapped as a result of the credit4 7#c7 ,the number of new railcars entered into contract as a result of the credit4 7#d7 ,the number of new railcars built as a result of the credit4 7#e7 ,the number of facilities modified as a result of the credit4