I 

111TH CONGRESS 

1ST SESSION H. R. 1789 

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. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 30, 2009 

Ms. CORRINE BROWN of Florida introduced the following bill; which was 

referred to the Committee on Ways and Means 

A BILL 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Comprehensive Rail 

5 Infrastructure Investment Act of 2009’’. 


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1 SEC. 2. CREDIT FOR FREIGHT RAIL INFRASTRUCTURE CA2 PACITY EXPANSION PROPERTY. 

3 (a) IN GENERAL.—Subpart D of part IV of sub4 chapter A of chapter 1 of subtitle A of the Internal Rev5 enue Code of 1986 (relating to business-related credits) 

6 is amended by adding at the end the following new section: 

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

8 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

9 the freight rail capacity expansion credit determined under 

10 this section for the taxable year is an amount equal to 

11 25 percent of the cost of the following property placed in 

12 service during the taxable year: 

13 ‘‘(1) New qualified freight rail infrastructure 

14 property. 

15 ‘‘(2) Qualified locomotive property. 

16 ‘‘(b) NEW QUALIFIED FREIGHT RAIL INFRASTRUC17 TURE PROPERTY.—For purposes of this section— 

18 ‘‘(1) IN GENERAL.—The term ‘new qualified 

19 freight rail infrastructure property’ means qualified 

20 freight rail infrastructure property— 

21 ‘‘(A) the construction, erection, or eligible 

22 bridge or tunnel replacement or expansion (pur23 suant to paragraph (2)) which the taxpayer cer24 tifies was completed after the date of enactment 

25 of this section in compliance with the standards 

26 of section 24312 of title 49, United States Code 


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1 (as in effect on the date of enactment of this 

2 subsection) with respect to the project in the 

3 same manner that the National Railroad Pas4 senger Corporation is required to comply with 

5 such standards for construction work financed 

6 under an agreement made under section 

7 24308(a) of that title, or 

8 ‘‘(B) which is acquired by the taxpayer 

9 after such date, but only if the original use of 

10 such property commences with the taxpayer. 

11 ‘‘(2) EXCEPTION FOR PROPERTY REPLACING

12 PROPERTY AT EXISTING LOCATION.—The term ‘new 

13 qualified freight rail infrastructure property’ does 

14 not include property which is replacing existing 

15 qualified freight rail infrastructure property if the 

16 replacement property is located at the site of the ex17 isting property. The preceding sentence shall not 

18 apply to the replacement or expansion of a bridge or 

19 tunnel to allow for additional clearance, track, or 

20 other capacity enhancement where such clearance, 

21 track, or other capacity enhancement did not pre22 viously exist. 

23 ‘‘(3) QUALIFIED FREIGHT RAIL INFRASTRUC24 TURE PROPERTY.— 


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1 ‘‘(A) IN GENERAL.—The term ‘qualified 

2 freight rail infrastructure property’ means 

3 property used in the movement of freight by 

4 rail— 

5 ‘‘(i) the cost of which is chargeable to 

6 capital account (determined without regard 

7 to section 179F), and 

8 ‘‘(ii) which constitutes— 

9 ‘‘(I) railroad grading or tunnel 

10 bore (as defined in section 168(e)(4)), 

11 ‘‘(II) tunnels or subways, 

12 ‘‘(III) track, including ties, rails, 

13 ballast, or other track material, 

14 ‘‘(IV) bridges, trestles, culverts, 

15 or other elevated or submerged struc16 tures, 

17 ‘‘(V) terminals, yards, roadway 

18 buildings, fuel stations, or railroad 

19 wharves or docks, including fixtures 

20 attached thereto, and equipment used 

21 exclusively therein, 

22 ‘‘(VI) railroad signal, commu23 nication, or other operating systems, 

24 including components of such systems 


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1 that must be installed on locomotives 

2 or other rolling stock, or 

3 ‘‘(VII) intermodal transfer or 

4 transload facilities or terminals, in5 cluding fixtures attached thereto, and 

6 equipment used exclusively therein. 

7 ‘‘(B) EXCLUSIONS.—The term ‘qualified 

8 freight rail infrastructure property’ shall not in9 clude— 

10 ‘‘(i) land, 

11 ‘‘(ii) rolling stock, including loco12 motives, or 

13 ‘‘(iii) property used predominantly 

14 outside the United States, 

15 except that this subparagraph shall not apply to 

16 any property described in section 168(g)(4). 

17 ‘‘(c) QUALIFIED LOCOMOTIVE PROPERTY.— 

18 ‘‘(1) IN GENERAL.—For purposes of this sec19 tion, the term ‘qualified locomotive property’ means 

20 a locomotive— 

21 ‘‘(A) which is acquired by the taxpayer 

22 after the date of enactment of this section, but 

23 only if the original use of such property com24 mences with the taxpayer, 


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1 ‘‘(B) which is owned by, or leased to, a 

2 taxpayer which meets the capacity expansion re3 quirement of paragraph (2) for the taxable year 

4 in which the locomotive is placed in service, and 

5 ‘‘(C) which meets the Environmental Pro6 tection Agency’s emission standards for loco7 motives and locomotive engines as in effect on 

8 December 31, 2006. 

9 ‘‘(2) CAPACITY EXPANSION REQUIREMENT.—A 

10 taxpayer meets the requirements of this paragraph 

11 with respect to any locomotive only if, on the last 

12 day of the taxable year in which such locomotive is 

13 placed in service, the total horsepower of all loco14 motives owned by, or leased to, the taxpayer exceeds 

15 the total horsepower of all locomotives owned by, or 

16 leased to, the taxpayer on the last day of the pre17 ceding taxable year. A determination under this 

18 paragraph shall be made pursuant to such reports as 

19 the Secretary, in consultation with the Surface 

20 Transportation Board, may prescribe. 

21 ‘‘(3) SPECIAL RULE FOR THE LEASING OF LO22 COMOTIVES.—In the case of the leasing of loco23 motives, total horsepower under paragraph (2) shall 

24 be determined with respect to all locomotives owned 

25 by, or leased to, the lessee. 


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1 ‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.— 

2 ‘‘(1) DEFINITIONS.—For purposes of this sec3 tion— 

4 ‘‘(A) RAILROAD SIGNAL, COMMUNICATION, 

5 OR OTHER OPERATING SYSTEM.—The term 

6 ‘railroad signal, communication, or other oper7 ating system’ means an appliance, method, de8 vice, or system (including hardware and soft9 ware) which is used to operate a railroad or to 

10 improve safety or capacity of railroad oper11 ations, including a signal, an interlocker, an 

12 automatic train stop, or a train control or cab13 signal device. 

14 ‘‘(B) INTERMODAL TRANSFER OR

15 TRANSLOAD FACILITY OR TERMINAL.—The 

16 term ‘intermodal transfer or transload facility 

17 or terminal’ means a facility or terminal pri18 marily utilized in the transfer of freight be19 tween rail and any other mode of transpor20 tation. 

21 ‘‘(2) COORDINATION WITH OTHER CREDITS.— 

22 The cost of any property taken into account in de23 termining the credit under this section may not be 

24 taken into account in determining a credit under any 

25 other provision of this title. 


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1 ‘‘(3) BASIS ADJUSTMENT.—If a credit is deter2 mined under this section with respect to the cost of 

3 any qualified freight rail infrastructure property or 

4 qualified locomotive property, the basis of such prop5 erty shall be reduced by the amount of the credit so 

6 determined. 

7 ‘‘(4) SALE-LEASEBACKS.—If qualified freight 

8 rail infrastructure property or qualified locomotive 

9 property is— 

10 ‘‘(A) originally placed in service by a per11 son after the date of enactment of this section, 

12 and 

13 ‘‘(B) sold and leased back by such person 

14 within 3 months after the property is originally 

15 placed in service (or, in the case of multiple 

16 units of property subject to the same lease, 

17 within 3 months after the date the final unit is 

18 placed in service, so long as the period between 

19 the time the first unit is placed in service and 

20 the time the last unit is placed in service does 

21 not exceed 12 months), 

22 such property shall be treated as originally placed in 

23 service not earlier than the date on which such prop24 erty is used under the lease referred to in subpara25 graph (B). 


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1 ‘‘(5) RECAPTURE.—The benefit of any credit 

2 allowable under subsection (a) shall, under regula3 tions prescribed by the Secretary, be recaptured with 

4 respect to any qualified locomotive property that is 

5 sold or otherwise disposed of by the taxpayer during 

6 the 5-year period beginning on the date on which 

7 such property is originally placed in service. The 

8 preceding sentence shall not apply to locomotive 

9 property that is sold by and subsequently leased 

10 back to the taxpayer. 

11 ‘‘(e) TERMINATION.—This section shall not apply to 

12 any property placed in service after December 31, 2012.’’. 

13 (b) CREDIT ALLOWED AS BUSINESS CREDIT.—Sec14 tion 38(b) of the Internal Revenue Code of 1986 (relating 

15 to current year business credit) is amended by striking 

16 ‘‘plus’’ at the end of paragraph (34), by striking the period 

17 at the end of paragraph (35) and inserting ‘‘, plus’’, and 

18 by adding at the end the following new paragraph: 

19 ‘‘(36) the freight rail capacity expansion credit 

20 determined under section 45R.’’. 

21 (c) COORDINATION WITH SECTION 55.—Section 

22 38(c)(4)(B) of the Internal Revenue Code of 1986 is 

23 amended by striking ‘‘and’’ at the end of clause (vii), by 

24 striking the period at the end of clause (viii) and inserting 


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1 ‘‘, and’’, and by adding at the end the following new 

2 clause: 

3 ‘‘(ix) for taxable years beginning after 

4 the date of the enactment of this clause, 

5 the credit determined under section 45R.’’. 

6 (d) BASIS ADJUSTMENT.—Subsection (a) of section 

7 1016 of the Internal Revenue Code of 1986 is amended 

8 by striking ‘‘and’’ at the end of paragraph (36), by strik9 ing the period at the end of paragraph (37) and inserting 

10 ‘‘, and’’, and by inserting after paragraph (37) the fol11 lowing new paragraph: 

12 ‘‘(38) to the extent provided in section 

13 45R(d)(3).’’. 

14 (e) CLERICAL AMENDMENT.—The table of sections 

15 for subpart D of part IV of subchapter A of chapter 1 

16 of the Internal Revenue Code of 1986 is amended by in17 serting after the item relating to section 45Q the following 

18 new item: 

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

19 (f) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to property placed in service after 

21 December 31, 2009. 

22 SEC. 3. EXPENSING OF FREIGHT RAIL INFRASTRUCTURE 

23 PROPERTY. 

24 (a) IN GENERAL.—Part VI of subchapter B of chap25 ter 1 of subtitle A of the Internal Revenue Code of 1986 


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1 (relating to itemized deductions for individuals and cor2 porations) is amended by inserting after section 179E the 

3 following new section: 

4 ‘‘SEC. 179F. ELECTION TO EXPENSE QUALIFIED FREIGHT 

5 RAIL INFRASTRUCTURE PROPERTY. 

6 ‘‘(a) ALLOWANCE OF DEDUCTION.— 

7 ‘‘(1) IN GENERAL.—A taxpayer may elect to 

8 treat any amount paid or incurred for the acquisi9 tion, construction, or erection of qualified freight rail 

10 infrastructure property (as defined in section 

11 45R(b)(3)) as an amount not chargeable to capital 

12 account. Any amount so treated shall be allowed as 

13 a deduction for the taxable year in which such prop14 erty was placed in service. 

15 ‘‘(2) COORDINATION WITH CREDIT.—The 

16 amount to which the election under paragraph (1) 

17 applies with respect to any property shall be reduced 

18 by an amount equal to the amount of any reduction 

19 in the basis of the property under section 45R(d)(3). 

20 ‘‘(b) ELECTION.—An election under subsection (a) 

21 shall be made, with respect to each class of property for 

22 each taxable year, at such time and in such manner as 

23 the Secretary may prescribe by regulation. If a taxpayer 

24 makes such an election with respect to any class of prop25 erty for any taxable year, the election shall apply to all 


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1 qualified freight rail infrastructure property in such class 

2 placed in service during such taxable year. An election 

3 under this section shall not affect the character of any 

4 property for the purposes of section 45R. 

5 ‘‘(c) DEDUCTION ALLOWED IN COMPUTING MINIMUM

6 TAX.—For purposes of determining alternative minimum 

7 taxable income under section 55, the deduction under sub8 section (a) for qualified freight rail infrastructure property 

9 shall be determined under this section without regard to 

10 any adjustment under section 56. 

11 ‘‘(d) TERMINATION.—This section shall not apply to 

12 any property placed in service after December 31, 2012.’’. 

13 (b) DEDUCTION FOR CAPITAL EXPENDITURES.— 

14 Section 263(a)(1) of the Internal Revenue Code of 1986 

15 (relating to capital expenditures) is amended by striking 

16 ‘‘or’’ at the end of subparagraph (K), by striking the pe17 riod at the end of paragraph (L) and inserting ‘‘, or’’, 

18 and by adding at the end the following new subparagraph: 

19 ‘‘(M) expenditures for which a deduction is 

20 allowed under section 179F.’’. 

21 (c) TECHNICAL AND CLERICAL AMENDMENTS.— 

22 (1) Section 312(k)(3)(B) of the Internal Rev23 enue Code of 1986 is amended by striking ‘‘or 

24 179E’’ each place it appears in the text or heading 

25 thereof and inserting ‘‘179E, or 179F’’. 


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1 (2) Paragraphs (2)(C) and (3)(C) of section 

2 1245(a) of such Code are each amended by inserting 

3 ‘‘179F,’’ after ‘‘179E,’’. 

4 (3) The table of sections for part VI of sub5 chapter B of chapter 1 of subtitle A of such Code 

6 is amended by inserting after the item relating to 

7 section 179E the following new item: 

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

8 (d) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to property placed in service after 

10 December 31, 2009. 

11 SEC. 4. EXTENSION AND MODIFICATION OF RAILROAD 

12 TRACK MAINTENANCE CREDIT. 

13 (a) EXTENSION OF CREDIT.—Section 45G(f) of the 

14 Internal Revenue Code of 1986 is amended by striking 

15 ‘‘January 1, 2010’’ and inserting ‘‘January 1, 2013’’. 

16 (b) EXPENDITURES.—Subsection (d) of section 45G 

17 of the Internal Revenue Code of 1986 (relating to quali18 fied railroad track maintenance expenditures) is amended 

19 by striking ‘‘for maintaining’’ and all that follows and in20 serting ‘‘for maintaining— 

21 ‘‘(A) in the case of taxable years beginning 

22 after December 31, 2004, and before January 

23 1, 2009, railroad track (including roadbed, 

24 bridges, and related track structures) owned or 

25 leased as of January 1, 2005, by a Class II or 


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1 Class III railroad (determined without regard 

2 to any consideration for such expenditures 

3 given by the Class II or Class III railroad which 

4 made the assignment of such track), and 

5 ‘‘(B) in the case of taxable years beginning 

6 after December 31, 2008, railroad track (in7 cluding roadbed, bridges, and related track 

8 structures) owned or leased as of January 1, 

9 2009, by a Class II or Class III railroad (deter10 mined without regard to any consideration for 

11 such expenditures given by the Class II or Class 

12 III railroad which made the assignment of such 

13 track).’’. 

14 (c) CREDIT LIMITATION ADJUSTMENT.—Subpara15 graph (A) of section 45G(b)(1) of the Internal Revenue 

16 Code of 1986 is amended by striking ‘‘$3,500’’ and insert17 ing ‘‘$4,500’’. 

18 (d) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to taxable years beginning after 

20 December 31, 2008. 

Æ 


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