I 

111TH CONGRESS 

2D SESSION H. R. 5478 

To amend the Internal Revenue Code of 1986 to provide an incentive to 

encourage the replacement of inefficient, outdated freight railcars with 

greener, more fuel efficient vehicles. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 8, 2010 

Mr. BLUMENAUER (for himself, Mr. BRADY of Texas, Mr. TANNER, Mr. SHUSTER, Mr. DEFAZIO, Mr. MCMAHON, Mr. WU, Mrs. DAHLKEMPER, Mr. 

PETRI, Mr. CARNEY, Mr. SCHRADER, Mr. THOMPSON of Pennsylvania, 

Mr. FILNER, Mr. SMITH of Texas, Mr. PAUL, Mr. MANZULLO, Mr. 

COSTELLO, Mr. GERLACH, Mr. GRIJALVA, Ms. GRANGER, Mr. TIM MURPHY of Pennsylvania, Mr. MORAN of Kansas, Mr. LATHAM, Mr. BERRY, 

Mr. WESTMORELAND, Mr. MCDERMOTT, Mr. LIPINSKI, Mr. RODRIGUEZ, 

Ms. JENKINS, Mr. BOSWELL, Mr. LOEBSACK, Mr. HOLDEN, Mr. BACHUS, Mr. INGLIS, Mr. ROSS, Mr. MICA, Mr. CARTER, Mr. SPRATT, Ms. 

CORRINE BROWN of Florida, Mr. GRAVES, Mr. BRADY of Pennsylvania, 

Mr. WILSON of South Carolina, Mr. OLSON, Mr. CARNAHAN, Mr. 

QUIGLEY, Mr. MCGOVERN, Mrs. BLACKBURN, Mr. DICKS, Mr. SNYDER, 

and Mr. RAHALL) 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 

an incentive to encourage the replacement of inefficient, 

outdated freight railcars with greener, more fuel efficient 

vehicles. 

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


smartinez on DSKB9S0YB1PROD with BILLS
2 

•HR 5478 IH

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Green Railcar En3 hancement Act of 2010’’. 

4 SEC. 2. CREDIT FOR FREIGHT RAILCAR REPLACEMENT OR 

5 MODERNIZATION. 

6 (a) IN GENERAL.—Subpart D of part IV of sub7 chapter A of chapter 1 of the Internal Revenue Code of 

8 1986 is amended by adding at the end the following new 

9 section: 

10 ‘‘SEC. 45R. FREIGHT RAILCAR REPLACEMENT OR MOD11 ERNIZATION CREDIT. 

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

13 the freight railcar replacement or modernization credit de14 termined under this section for the taxable year is an 

15 amount equal to 25 percent of the sum of— 

16 ‘‘(1) the basis of any qualified freight railcar 

17 placed in service by the taxpayer during the taxable 

18 year, plus 

19 ‘‘(2) the qualified freight railcar rebuild expend20 itures of the taxpayer for the taxable year. 

21 ‘‘(b) QUALIFIED FREIGHT RAILCAR.— 

22 ‘‘(1) IN GENERAL.—For purposes of this sec23 tion, the term ‘qualified freight railcar’ means a 

24 freight railcar which— 

25 ‘‘(A) is acquired or rebuilt by the taxpayer 

26 pursuant to a binding agreement entered into 


smartinez on DSKB9S0YB1PROD with BILLS
3 

•HR 5478 IH

1 after the date of the enactment of this section, 

2 and 

3 ‘‘(B) meets the capacity or fuel efficiency 

4 improvement requirements of paragraph (2). 

5 ‘‘(2) CAPACITY OR FUEL EFFICIENCY REQUIRE6 MENTS.— 

7 ‘‘(A) IN GENERAL.—A freight railcar shall 

8 be treated as meeting the capacity or fuel effi9 ciency requirements of this paragraph if— 

10 ‘‘(i) in the case of a freight railcar 

11 which is acquired by the taxpayer during 

12 the taxable year (‘replacement railcar’), the 

13 taxpayer identifies another railcar (al14 though not necessarily one being used for 

15 an identical purpose) which the taxpayer 

16 certifies— 

17 ‘‘(I) was removed permanently 

18 from service as a freight railcar dur19 ing the taxable year, or 

20 ‘‘(II) is being rebuilt in such a 

21 manner as to achieve a significant im22 provement in capacity or fuel effi23 ciency, or 

24 ‘‘(ii) in the case of a freight railcar re25 built by the taxpayer, such rebuilding reVerDate Mar 15 2010 00:57 Jun 09, 2010 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5478.IH H5478

smartinez on DSKB9S0YB1PROD with BILLS
4 

•HR 5478 IH

1 sults in a significant improvement in ca2 pacity or fuel efficiency. 

3 ‘‘(B) OWNERSHIP NOT REQUIRED.—For 

4 purposes of subparagraph (A)(i), such other 

5 railcar may be one owned by the taxpayer or 

6 one owned by another taxpayer, so long as 

7 there exists a binding agreement to so remove 

8 or rebuild the railcar. 

9 ‘‘(C) SIGNIFICANT IMPROVEMENT.—For 

10 purposes of subparagraph (A), an improvement 

11 in capacity or fuel efficiency with respect to a 

12 freight railcar shall be treated as significant if 

13 such capacity or fuel efficiency, as the case may 

14 be, is increased by at least 8 percent. 

15 ‘‘(c) QUALIFIED FREIGHT RAILCAR REBUILD EX16 PENDITURE.—For purposes of this section, the term 

17 ‘qualified freight railcar rebuild expenditure’ means any 

18 amount paid or incurred— 

19 ‘‘(1) in connection with the modification of a 

20 freight railcar resulting in such railcar being a quali21 fied freight railcar, and 

22 ‘‘(2) which is properly chargeable to a capital 

23 account with respect to such freight railcar. 

24 ‘‘(d) OTHER SPECIAL RULES.— 


smartinez on DSKB9S0YB1PROD with BILLS
5 

•HR 5478 IH

1 ‘‘(1) COORDINATION WITH OTHER CREDITS.— 

2 Any amount taken into account in determining the 

3 credit under this section may not be taken into ac4 count in determining a credit under any other provi5 sion of this title. 

6 ‘‘(2) BASIS ADJUSTMENT.—For purposes of 

7 this subtitle, if a credit is allowed under subsection 

8 (a) with respect to any qualified freight railcar, the 

9 basis of such railcar shall be reduced by the amount 

10 of the credit so allowed. 

11 ‘‘(3) SALE-LEASEBACK.—For purposes of sub12 section (a)(1), if any qualified freight railcar is— 

13 ‘‘(A) originally placed in service by a per14 son after øthe date of the enactment of this 

15 section¿, and 

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

17 within 3 months after the railcars are originally 

18 placed in service (or, in the case of more than 

19 1 railcar subject to the same lease, within 3 

20 months after the date the final railcar is placed 

21 in service, so long as the period between the 

22 time the first railcar is placed in service and the 

23 time the last railcar is placed in service does 

24 not exceed 12 months), 


smartinez on DSKB9S0YB1PROD with BILLS
6 

•HR 5478 IH

1 such railcars shall be treated as originally placed in 

2 service not earlier than the date on which such rail3 cars are used under the leaseback referred to in sub4 paragraph (B). 

5 ‘‘(4) SYNDICATION.—For purposes of sub6 section (a)(1), if— 

7 ‘‘(A) any qualified freight railcar is origi8 nally placed in service after the date of enact9 ment of this section by the lessor of such rail10 car, 

11 ‘‘(B) such railcar is sold by such lessor or 

12 any subsequent purchaser within 3 months 

13 after the date such railcar was originally placed 

14 in service (or, in the case of more than 1 railcar 

15 subject to the same lease, within 3 months after 

16 the date the final railcar is placed in service 

17 and the time the last railcar is placed in service 

18 does not exceed 12 months), and 

19 ‘‘(C) the user of such railcar after the last 

20 sale during such 3-month period remains the 

21 same as when such railcar was originally placed 

22 in service, 

23 such railcars shall be treated as originally placed in 

24 service not earlier than the date of such last sale. 


smartinez on DSKB9S0YB1PROD with BILLS
7 

•HR 5478 IH

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 freight railcar that is sold or 

5 otherwise disposed of by the taxpayer during the 5- 

6 year period beginning on the date on which such 

7 railcar is originally placed in service. The preceding 

8 sentence shall not apply to a qualified freight railcar 

9 that is sold by and subsequently leased back to the 

10 taxpayer. 

11 ‘‘(6) REPORTING REQUIREMENTS.—The Sec12 retary, in consultation with the Surface Transpor13 tation Board, may develop appropriate reporting re14 quirements for taxpayers utilizing this credit. 

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

16 any freight railcars acquired, or with respect to which at 

17 least 50 percent of the rebuilding is completed, after De18 cember 31, 2011.’’. 

19 (b) CREDIT ALLOWED AS BUSINESS CREDIT.—Sec20 tion 38(b) of the Internal Revenue Code of 1986 (relating 

21 to current year business credit) is amended by striking 

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

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

24 by adding at the end the following new paragraph: 


smartinez on DSKB9S0YB1PROD with BILLS
8 

•HR 5478 IH

1 ‘‘(36) the freight railcar replacement or mod2 ernization credit determined under section 45R.’’. 

3 (c) COORDINATION WITH SECTION 55.—Section 

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

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

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

7 ‘‘, and’’ and by adding at the end the following new clause: 

8 ‘‘(ix) the credit determined under sec9 tion 45R.’’. 

10 (d) CLERICAL AMENDMENT.—The table of sections 

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

12 of the Internal Revenue Code of 1986 is amended by in13 serting after the item relating to section 45Q the following 

14 new item: 

‘‘Sec. 45R. Freight railcar replacement or modernization credit.’’. 

15 (e) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to property placed in service, and 

17 amounts paid or incurred, after December 31, 2009. 

Æ 


smartinez on DSKB9S0YB1PROD with BILLS