Freight Rail Infrastructure Capacity Expansion Act of 2009 - Amends the Internal Revenue Code to allow: (1) a tax credit for 25% of the cost of new qualified freight rail infrastructure property and qualified locomotive property; and (2) a taxpayer election to expense the cost of qualified freight rail infrastructure property (i.e., deduct all costs in the current taxable year). Terminates such credit and expensing election after 2015.
Requires compliance with federal wage rate requirements under the Davis-Bacon Act as a condition of eligibility for the tax credit and expensing allowance provided by this Act.
[Congressional Bills 111th Congress]
[From the U.S. Government Printing Office]
[H.R. 1806 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 1806
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 31, 2009
Mr. Meek 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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Freight Rail Infrastructure Capacity
Expansion Act of 2009''.
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 the Internal Revenue Code of 1986 (relating to business-related
credits) is amended by adding at the end the following new section:
``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:
``(1) New qualified freight rail infrastructure property.
``(2) Qualified locomotive property.
``(b) New Qualified Freight Rail Infrastructure Property.--For
purposes of this section--
``(1) In general.--The term `new qualified freight rail
infrastructure property' means qualified freight rail
infrastructure property--
``(A) the construction or erection (or in the case
of bridges and tunnels, any eligible bridge or tunnel
replacement or expansion pursuant to paragraph (2)) of
which is completed after the effective date of this
section, or
``(B) which is acquired by the taxpayer after such
date, but only if the original use of such property
commences with the taxpayer.
``(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.
``(3) Qualified freight rail infrastructure property.--
``(A) In general.--The term `qualified freight rail
infrastructure property' means property, whether or not
owned by a railroad, used in the movement of freight by
rail--
``(i) the cost of which is chargeable to
capital account (determined without regard to
section 179F), and
``(ii) which constitutes--
``(I) railroad grading or tunnel
bore (as defined in section 168(e)(4)),
``(II) tunnels or subways,
``(III) track, including ties,
rails, ballast, or other track
material,
``(IV) bridges, trestles, culverts,
or other elevated or submerged
structures,
``(V) terminals, yards, roadway
buildings, fuel stations, or railroad
wharves or docks, including fixtures
attached thereto, and equipment used
exclusively therein,
``(VI) railroad signal,
communication, or other operating
systems, including components of such
systems that must be installed on
locomotives or other rolling stock, or
``(VII) intermodal transfer or
transload facilities or terminals,
including fixtures attached thereto,
and equipment used exclusively therein.
``(B) Exclusions.--The term `qualified freight rail
infrastructure property' shall not include--
``(i) land,
``(ii) rolling stock, including
locomotives, or
``(iii) property used predominantly outside
the United States, except that this clause
shall not apply to any property described in
section 168(g)(4).
``(c) Qualified Locomotive Property.--
``(1) In general.--For purposes of this section, the term
`qualified locomotive property' means a locomotive, whether or
not owned by a railroad, which--
``(A) is acquired by the taxpayer after the
effective date of this section, but only if the
original use of such property commences with the
taxpayer,
``(B) 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, and
``(C) meets the Environmental Protection Agency's
emission standards for locomotives and locomotive
engines as in effect on December 31, 2006.
``(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.
``(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.
``(d) Other Definitions and Special Rules.--
``(1) Definitions.--For purposes of this section--
``(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.
``(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.
``(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.
``(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.
``(4) Sale-leasebacks.--If qualified freight rail
infrastructure property or qualified locomotive property is--
``(A) originally placed in service by a person
after the effective date of this section, and
``(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),
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).
``(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.
``(e) Termination.--This section shall not apply to any property
placed in service after December 31, 2015.''.
(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:
``(36) the freight rail capacity expansion credit
determined under section 45R.''.
(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:
``(ix) for taxable years ending after the
effective date of this clause, the credit
determined under section 45R.''.
(d) 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:
``Sec. 45R. Freight rail capacity expansion credit.''.
(e) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2009.
SEC. 3. EXPENSING OF FREIGHT RAIL INFRASTRUCTURE PROPERTY.
(a) In General.--Part VI of subchapter B of chapter 1 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:
``SEC. 179F. ELECTION TO EXPENSE QUALIFIED FREIGHT RAIL INFRASTRUCTURE
PROPERTY.
``(a) Allowance of Deduction.--
``(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.
``(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).
``(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.
``(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.
``(d) Termination.--This section shall not apply to any property
placed in service after December 31, 2015.''
(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 subparagraph (L) and inserting ``, or'', and
by adding at the end the following new subparagraph:
``(M) expenditures for which a deduction is allowed
under section 179F.''
(c) Technical and Clerical Amendments.--
(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''.
(2) Paragraphs (2)(C) and (3)(C) of section 1245(a) of such
Code are each amended by inserting ``179F,'' after ``179E,''.
(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:
``Sec. 179F. Election to expense qualified freight rail infrastructure
property.''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2009.
SEC. 4. WAGE RATE REQUIREMENTS.
The taxpayer shall not be allowed a credit under section 45R of the
Internal Revenue Code of 1986 (as added by section 2 of this Act) or a
deduction under section 179F of such Code (as added by section 3 of
this Act) until the taxpayer certifies in writing to the Secretary of
the Treasury that all laborers and mechanics employed by contractors
and subcontractors in construction, replacement, or expansion of new
qualified freight rail infrastructure property for which such credit or
deduction (as the case may be) is claimed were paid wages at rates not
less than those prevailing at the time the construction, replacement,
or expansion work was performed on similar work in the locality as
determined by the Secretary of Labor in accordance with subchapter IV
of chapter 31 of part A of subtitle II of title 40, United States Code
(commonly referred to as the ``Davis-Bacon Act'').
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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