Senator Banks Introduces to Restore the North American Railcar Fleet

WASHINGTON, D.C, - This week, Senators Jim Banks (R-Ind.) and Chris Coons (D-Del.) introduced the Freight Rail Assets Investment to Launch Commercial Activity Revitalization Act (Freight RAILCAR Act). This bipartisan bill would enact a temporary, three-year 10% investment tax credit to modernize America's rail car fleet. Additionally, it will incentivize private companies to retire old and less efficient assets, and better position American industry to address supply chain constraints and support U.S. manufacturing jobs.

Key Provisions of the Freight RAILCAR Act are:

• Defraying up to 10% of a company's investment in new railcars through the proposed credit.
• Limiting the credit to 1,000 new freight cars per company per year, while making it non-refundable and non-transferable.
• Requiring existing railcars to have been in service during the 48 months prior to enactment and to be permanently taken out of service.
• Prohibiting Chinese railcar manufacturer CRRC and other state-owned or state-subsidized entities from qualifying for the credits.

The Rail Security Alliance, American Iron and Steel Institute, Railway Supply Institute, and American Foundry Society have endorsed this bill.

Full text of the bill can be found here.

Background:

The current North American railcar fleet is aging and in need of updating. The fleet currently consists of more than 1.6 million railcars, with over 200,000 in the U.S. being more than 40 years old. Estimates indicate that nearly 250,000 freight railcars will become obsolete and require replacement within the next 15 years.

Incorporating new manufacturing methods, innovative materials, and improved safety standards into the production of new railcars will enable faster delivery of goods to market while also reducing wear and tear on rail lines.