HR 1789 IHCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide incentives to encourage investment in the expansion of freight rail infrastructure capacity and to enhance modal tax equity.CommentsClose CommentsPermalink

March 30, 2009CommentsClose CommentsPermalink

Ms. CORRINE BROWN of Florida introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide incentives to encourage investment in the expansion of freight rail infrastructure capacity and to enhance modal tax equity.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Comprehensive Rail Infrastructure Investment Act of 2009’.CommentsClose CommentsPermalink

SEC. 2. CREDIT FOR FREIGHT RAIL INFRASTRUCTURE CAPACITY EXPANSION PROPERTY.

(a) In General- Subpart D of part IV of subchapter A of chapter 1 of subtitle A of the Internal Revenue Code of 1986 (relating to business-related credits) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

‘SEC. 45R. FREIGHT RAIL CAPACITY EXPANSION CREDIT.

‘(a) General Rule- For purposes of section 38, the freight rail capacity expansion credit determined under this section for the taxable year is an amount equal to 25 percent of the cost of the following property placed in service during the taxable year:CommentsClose CommentsPermalink





‘(1) New qualified freight rail infrastructure property.CommentsClose CommentsPermalink





‘(2) Qualified locomotive property.CommentsClose CommentsPermalink





‘(b) New Qualified Freight Rail Infrastructure Property- For purposes of this section--CommentsClose CommentsPermalink





‘(1) IN GENERAL- The term ‘new qualified freight rail infrastructure property’ means qualified freight rail infrastructure property--CommentsClose CommentsPermalink





‘(A) the construction, erection, or eligible bridge or tunnel replacement or expansion (pursuant to paragraph (2)) which the taxpayer certifies was completed after the date of enactment of this section in compliance with the standards of section 24312 of title 49, United States Code (as in effect on the date of enactment of this subsection) with respect to the project in the same manner that the National Railroad Passenger Corporation is required to comply with such standards for construction work financed under an agreement made under section 24308(a) of that title, orCommentsClose CommentsPermalink





‘(B) which is acquired by the taxpayer after such date, but only if the original use of such property commences with the taxpayer.CommentsClose CommentsPermalink





‘(2) EXCEPTION FOR PROPERTY REPLACING PROPERTY AT EXISTING LOCATION- The term ‘new qualified freight rail infrastructure property’ does not include property which is replacing existing qualified freight rail infrastructure property if the replacement property is located at the site of the existing property. The preceding sentence shall not apply to the replacement or expansion of a bridge or tunnel to allow for additional clearance, track, or other capacity enhancement where such clearance, track, or other capacity enhancement did not previously exist.CommentsClose CommentsPermalink





‘(3) QUALIFIED FREIGHT RAIL INFRASTRUCTURE PROPERTY-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘qualified freight rail infrastructure property’ means property used in the movement of freight by rail--CommentsClose CommentsPermalink





‘(i) the cost of which is chargeable to capital account (determined without regard to section 179F), andCommentsClose CommentsPermalink





‘(ii) which constitutes--CommentsClose CommentsPermalink





‘(I) railroad grading or tunnel bore (as defined in section 168(e)(4)),CommentsClose CommentsPermalink





‘(II) tunnels or subways,CommentsClose CommentsPermalink





‘(III) track, including ties, rails, ballast, or other track material,CommentsClose CommentsPermalink





‘(IV) bridges, trestles, culverts, or other elevated or submerged structures,CommentsClose CommentsPermalink





‘(V) terminals, yards, roadway buildings, fuel stations, or railroad wharves or docks, including fixtures attached thereto, and equipment used exclusively therein,CommentsClose CommentsPermalink





‘(VI) railroad signal, communication, or other operating systems, including components of such systems that must be installed on locomotives or other rolling stock, orCommentsClose CommentsPermalink





‘(VII) intermodal transfer or transload facilities or terminals, including fixtures attached thereto, and equipment used exclusively therein.CommentsClose CommentsPermalink





‘(B) EXCLUSIONS- The term ‘qualified freight rail infrastructure property’ shall not include--CommentsClose CommentsPermalink





‘(i) land,CommentsClose CommentsPermalink





‘(ii) rolling stock, including locomotives, orCommentsClose CommentsPermalink





‘(iii) property used predominantly outside the United States,CommentsClose CommentsPermalink





except that this subparagraph shall not apply to any property described in section 168(g)(4).CommentsClose CommentsPermalink





‘(c) Qualified Locomotive Property-CommentsClose CommentsPermalink





‘(1) IN GENERAL- For purposes of this section, the term ‘qualified locomotive property’ means a locomotive--CommentsClose CommentsPermalink





‘(A) which is acquired by the taxpayer after the date of enactment of this section, but only if the original use of such property commences with the taxpayer,CommentsClose CommentsPermalink





‘(B) which is owned by, or leased to, a taxpayer which meets the capacity expansion requirement of paragraph (2) for the taxable year in which the locomotive is placed in service, andCommentsClose CommentsPermalink





‘(C) which meets the Environmental Protection Agency’s emission standards for locomotives and locomotive engines as in effect on December 31, 2006.CommentsClose CommentsPermalink





‘(2) CAPACITY EXPANSION REQUIREMENT- A taxpayer meets the requirements of this paragraph with respect to any locomotive only if, on the last day of the taxable year in which such locomotive is placed in service, the total horsepower of all locomotives owned by, or leased to, the taxpayer exceeds the total horsepower of all locomotives owned by, or leased to, the taxpayer on the last day of the preceding taxable year. A determination under this paragraph shall be made pursuant to such reports as the Secretary, in consultation with the Surface Transportation Board, may prescribe.CommentsClose CommentsPermalink





‘(3) SPECIAL RULE FOR THE LEASING OF LOCOMOTIVES- In the case of the leasing of locomotives, total horsepower under paragraph (2) shall be determined with respect to all locomotives owned by, or leased to, the lessee.CommentsClose CommentsPermalink





‘(d) Other Definitions and Special Rules-CommentsClose CommentsPermalink





‘(1) DEFINITIONS- For purposes of this section--CommentsClose CommentsPermalink





‘(A) RAILROAD SIGNAL, COMMUNICATION, OR OTHER OPERATING SYSTEM- The term ‘railroad signal, communication, or other operating system’ means an appliance, method, device, or system (including hardware and software) which is used to operate a railroad or to improve safety or capacity of railroad operations, including a signal, an interlocker, an automatic train stop, or a train control or cab-signal device.CommentsClose CommentsPermalink





‘(B) INTERMODAL TRANSFER OR TRANSLOAD FACILITY OR TERMINAL- The term ‘intermodal transfer or transload facility or terminal’ means a facility or terminal primarily utilized in the transfer of freight between rail and any other mode of transportation.CommentsClose CommentsPermalink





‘(2) COORDINATION WITH OTHER CREDITS- The cost of any property taken into account in determining the credit under this section may not be taken into account in determining a credit under any other provision of this title.CommentsClose CommentsPermalink





‘(3) BASIS ADJUSTMENT- If a credit is determined under this section with respect to the cost of any qualified freight rail infrastructure property or qualified locomotive property, the basis of such property shall be reduced by the amount of the credit so determined.CommentsClose CommentsPermalink





‘(4) SALE-LEASEBACKS- If qualified freight rail infrastructure property or qualified locomotive property is--CommentsClose CommentsPermalink





‘(A) originally placed in service by a person after the date of enactment of this section, andCommentsClose CommentsPermalink





‘(B) sold and leased back by such person within 3 months after the property is originally placed in service (or, in the case of multiple units of property subject to the same lease, within 3 months after the date the final unit is placed in service, so long as the period between the time the first unit is placed in service and the time the last unit is placed in service does not exceed 12 months),CommentsClose CommentsPermalink





such property shall be treated as originally placed in service not earlier than the date on which such property is used under the lease referred to in subparagraph (B).CommentsClose CommentsPermalink





‘(5) RECAPTURE- The benefit of any credit allowable under subsection (a) shall, under regulations prescribed by the Secretary, be recaptured with respect to any qualified locomotive property that is sold or otherwise disposed of by the taxpayer during the 5-year period beginning on the date on which such property is originally placed in service. The preceding sentence shall not apply to locomotive property that is sold by and subsequently leased back to the taxpayer.CommentsClose CommentsPermalink





‘(e) Termination- This section shall not apply to any property placed in service after December 31, 2012.’.CommentsClose CommentsPermalink





(b) Credit Allowed as Business Credit- Section 38(b) of the Internal Revenue Code of 1986 (relating to current year business credit) is amended by striking ‘plus’ at the end of paragraph (34), by striking the period at the end of paragraph (35) and inserting ‘, plus’, and by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(36) the freight rail capacity expansion credit determined under section 45R.’.CommentsClose CommentsPermalink





(c) Coordination With Section 55- Section 38(c)(4)(B) of the Internal Revenue Code of 1986 is amended by striking ‘and’ at the end of clause (vii), by striking the period at the end of clause (viii) and inserting ‘, and’, and by adding at the end the following new clause:CommentsClose CommentsPermalink





‘(ix) for taxable years beginning after the date of the enactment of this clause, the credit determined under section 45R.’.CommentsClose CommentsPermalink





(d) Basis Adjustment- Subsection (a) of section 1016 of the Internal Revenue Code of 1986 is amended by striking ‘and’ at the end of paragraph (36), by striking the period at the end of paragraph (37) and inserting ‘, and’, and by inserting after paragraph (37) the following new paragraph:CommentsClose CommentsPermalink





‘(38) to the extent provided in section 45R(d)(3).’.CommentsClose CommentsPermalink





(e) Clerical Amendment- The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 45Q the following new item:CommentsClose CommentsPermalink





‘Sec. 45R. Freight rail capacity expansion credit.’.CommentsClose CommentsPermalink





(f) Effective Date- The amendments made by this section shall apply to property placed in service after December 31, 2009.CommentsClose CommentsPermalink

SEC. 3. EXPENSING OF FREIGHT RAIL INFRASTRUCTURE PROPERTY.

(a) In General- Part VI of subchapter B of chapter 1 of subtitle A of the Internal Revenue Code of 1986 (relating to itemized deductions for individuals and corporations) is amended by inserting after section 179E the following new section:CommentsClose CommentsPermalink

‘SEC. 179F. ELECTION TO EXPENSE QUALIFIED FREIGHT RAIL INFRASTRUCTURE PROPERTY.

‘(a) Allowance of Deduction-CommentsClose CommentsPermalink





‘(1) IN GENERAL- A taxpayer may elect to treat any amount paid or incurred for the acquisition, construction, or erection of qualified freight rail infrastructure property (as defined in section 45R(b)(3)) as an amount not chargeable to capital account. Any amount so treated shall be allowed as a deduction for the taxable year in which such property was placed in service.CommentsClose CommentsPermalink





‘(2) COORDINATION WITH CREDIT- The amount to which the election under paragraph (1) applies with respect to any property shall be reduced by an amount equal to the amount of any reduction in the basis of the property under section 45R(d)(3).CommentsClose CommentsPermalink





‘(b) Election- An election under subsection (a) shall be made, with respect to each class of property for each taxable year, at such time and in such manner as the Secretary may prescribe by regulation. If a taxpayer makes such an election with respect to any class of property for any taxable year, the election shall apply to all qualified freight rail infrastructure property in such class placed in service during such taxable year. An election under this section shall not affect the character of any property for the purposes of section 45R.CommentsClose CommentsPermalink





‘(c) Deduction Allowed in Computing Minimum Tax- For purposes of determining alternative minimum taxable income under section 55, the deduction under subsection (a) for qualified freight rail infrastructure property shall be determined under this section without regard to any adjustment under section 56.CommentsClose CommentsPermalink





‘(d) Termination- This section shall not apply to any property placed in service after December 31, 2012.’.CommentsClose CommentsPermalink





(b) Deduction for Capital Expenditures- Section 263(a)(1) of the Internal Revenue Code of 1986 (relating to capital expenditures) is amended by striking ‘or’ at the end of subparagraph (K), by striking the period at the end of paragraph (L) and inserting ‘, or’, and by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(M) expenditures for which a deduction is allowed under section 179F.’.CommentsClose CommentsPermalink





(c) Technical and Clerical Amendments-CommentsClose CommentsPermalink





(1) Section 312(k)(3)(B) of the Internal Revenue Code of 1986 is amended by striking ‘or 179E’ each place it appears in the text or heading thereof and inserting ‘179E, or 179F’.CommentsClose CommentsPermalink





(2) Paragraphs (2)(C) and (3)(C) of section 1245(a) of such Code are each amended by inserting ‘179F,’ after ‘179E,’.CommentsClose CommentsPermalink





(3) The table of sections for part VI of subchapter B of chapter 1 of subtitle A of such Code is amended by inserting after the item relating to section 179E the following new item:CommentsClose CommentsPermalink





‘Sec. 179F. Election to expense qualified freight rail infrastructure property.’.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to property placed in service after December 31, 2009.CommentsClose CommentsPermalink

SEC. 4. EXTENSION AND MODIFICATION OF RAILROAD TRACK MAINTENANCE CREDIT.

(a) Extension of Credit- Section 45G(f) of the Internal Revenue Code of 1986 is amended by striking ‘January 1, 2010’ and inserting ‘January 1, 2013’.CommentsClose CommentsPermalink





(b) Expenditures- Subsection (d) of section 45G of the Internal Revenue Code of 1986 (relating to qualified railroad track maintenance expenditures) is amended by striking ‘for maintaining’ and all that follows and inserting ‘for maintaining--CommentsClose CommentsPermalink





‘(A) in the case of taxable years beginning after December 31, 2004, and before January 1, 2009, railroad track (including roadbed, bridges, and related track structures) owned or leased as of January 1, 2005, by a Class II or Class III railroad (determined without regard to any consideration for such expenditures given by the Class II or Class III railroad which made the assignment of such track), andCommentsClose CommentsPermalink





‘(B) in the case of taxable years beginning after December 31, 2008, railroad track (including roadbed, bridges, and related track structures) owned or leased as of January 1, 2009, by a Class II or Class III railroad (determined without regard to any consideration for such expenditures given by the Class II or Class III railroad which made the assignment of such track).’.CommentsClose CommentsPermalink





(c) Credit Limitation Adjustment- Subparagraph (A) of section 45G(b)(1) of the Internal Revenue Code of 1986 is amended by striking ‘$3,500’ and inserting ‘$4,500’.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2008.CommentsClose CommentsPermalink