Lawmakers reintroduce Freight RAILCAR Act

U.S. Reps. Darin LaHood (R-Ill.) and Brad Schneider (D-Ill.) yesterday announced they’ve reintroduced legislation that would provide a tax credit for investing in safer freight rail cars.

Known as the Freight Rail Assistance and Investment to Launch Coronavirus-era Activity and Recovery (RAILCAR) Act, the bill would provide a time-limited 10% tax credit for the purchase of new rail cars or modification of existing cars to help offset the costs associated with taking outdated rail cars out of service, according to a joint press release issued by LaHood's office.

The rail-car replacements would improve fuel efficiency and modernize the freight-rail industry while recycling old metal that can be reused for other purposes, according to the congressmen.

"The Freight RAILCAR Act will spur job growth in the freight-rail manufacturing sector, creating opportunities to invest in critical freight-rail infrastructure and strengthen our transportation system," said LaHood.

Added Schneider: "As we've seen over the last three years, it is critical we strengthen every part of our supply chain — including all components of rail infrastructure — to be more resilient, especially as our economy emerges from the pandemic."

The current North American rail-car fleet is made up of more than 1.6 million cars with about 291,000 in storage, according to the Rail Security Alliance. Over the next 15 years, about 250,000 cars will need to be updated.

According to the alliance, H.R. 838 would provide the tax credit to help offset the costs associated with:

• replacing two existing rail cars with a new car that improves fuel efficiency or capacity by at least 8%; and

• refurbishing or modernizing an existing rail car to improve fuel efficiency or capacity by at least 8% or to upgrade to DOT-117 tank car specifications.

The Freight RAILCAR Act is a top legislative priority of the Railway Supply Institute, according to an article in Progressive Railroading's February issue.