To amend the Internal Revenue Code of 1986 to modify the railroad track maintenance credit.
- Bill Number
- H.R. 516
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-01-16: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-07-10T08:06:36Z
AI-Generated Summary
Purpose
This bill (H.R. 516) aims to enhance a tax incentive for maintaining railroad tracks by increasing the available credit amount, adjusting it for inflation, and updating eligibility criteria. The goal is to encourage investment in railroad infrastructure by making the credit more generous and relevant to current economic conditions.
Key Provisions
- Credit Amount Increase: The tax credit for qualified railroad track maintenance expenditures rises from $3,500 to $6,100 per mile of track.
- Inflation Adjustment: Starting in taxable years after 2025, the $6,100 base amount will be adjusted annually for inflation using a cost-of-living formula (similar to that used for individual income tax brackets). Adjustments will be rounded to the nearest $100.
- Updated Eligibility Date: The definition of "qualified railroad track maintenance expenditures" now includes costs incurred after January 1, 2024 (previously limited to after January 1, 2015).
- Effective Date: These changes apply to expenditures in taxable years beginning after December 31, 2024.
Significant Changes to Existing Law
- Higher Credit Rate: The bill more than doubles the per-mile credit amount, making it a stronger incentive compared to the prior $3,500 limit under Section 45G of the Internal Revenue Code.
- New Inflation Mechanism: Introduces ongoing adjustments to prevent the credit from losing value over time due to rising costs, which was not present in the original law.
- Extended Timeframe: Shifts the start date for eligible expenditures forward by nearly a decade, broadening the scope of qualifying costs without altering other core requirements (e.g., the credit applies to shortline railroads or expenditures on track not owned by large Class I railroads).
Potential Impacts
- On Government Agencies: The Internal Revenue Service (IRS) will need to administer the updated credit, including inflation calculations, potentially increasing administrative workload. The federal government may see reduced tax revenue due to higher credits claimed, though this could be offset by improved rail safety and efficiency.
- On Citizens: Indirect benefits may include safer and more reliable rail transportation, which supports freight movement, reduces road congestion, and lowers shipping costs for goods. No direct impact on individual taxpayers outside the rail sector.
- On International Relations: Minimal to none; the bill focuses on domestic rail infrastructure without affecting trade policies or foreign entities.
Main Stakeholders Affected
- Railroad Companies: Primary beneficiaries, especially shortline and regional railroads, as they can claim larger credits for track maintenance, reducing their effective costs.
- Taxpayers and Businesses in Rail-Dependent Industries: Shippers, manufacturers, and agriculture sectors relying on rail freight may see indirect gains from better-maintained tracks.
- Federal Government: As the provider of the tax incentive, it faces revenue implications but supports national transportation goals.
Notable Legal, Constitutional, or Political Implications
- Legal: Amends the Internal Revenue Code without introducing new enforcement mechanisms; relies on existing tax filing processes. No challenges to constitutional authority, as Congress has broad power over tax policy.
- Fiscal/Political: Represents a targeted expansion of tax expenditures (government spending via tax breaks) to bolster infrastructure, potentially aligning with bipartisan interests in economic development and supply chain resilience. Could spark debate on federal budget priorities, given the revenue cost estimated in billions over time (though not specified in the bill).
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (177)
Rep. Thompson, Mike [D-CA-4], Rep. Moolenaar, John R. [R-MI-2], Rep. Allen, Rick W. [R-GA-12], Rep. Tenney, Claudia [R-NY-24], Rep. Johnson, Dusty [R-SD-At Large], Rep. Smith, Christopher H. [R-NJ-4], Rep. Yakym, Rudy [R-IN-2], Rep. Brownley, Julia [D-CA-26], Rep. LaHood, Darin [R-IL-16], Rep. Cherfilus-McCormick, Sheila [D-FL-20], Rep. Nehls, Troy E. [R-TX-22], Rep. Gonzalez, Vicente [D-TX-34], Rep. Hudson, Richard [R-NC-9], Rep. Thompson, Bennie G. [D-MS-2], Rep. Bost, Mike [R-IL-12], Rep. Biggs, Sheri [R-SC-3], Rep. Kelly, Trent [R-MS-1], Rep. Carter, Troy A. [D-LA-2], Rep. Guest, Michael [R-MS-3], Rep. Owens, Burgess [R-UT-4], Rep. Vasquez, Gabe [D-NM-2], Rep. Moulton, Seth [D-MA-6], Rep. Moore, Blake D. [R-UT-1], Rep. Thompson, Glenn [R-PA-15], Rep. Davis, Danny K. [D-IL-7], Rep. Mann, Tracey [R-KS-1], Rep. Shreve, Jefferson [R-IN-6], Rep. Westerman, Bruce [R-AR-4], Rep. Comer, James [R-KY-1], Rep. Cleaver, Emanuel [D-MO-5], Rep. Schmidt, Derek [R-KS-2], Rep. Baumgartner, Michael [R-WA-5], Rep. Maloy, Celeste [R-UT-2], Rep. Moore, Tim [R-NC-14], Rep. Morrison, Kelly [D-MN-3], Rep. Bergman, Jack [R-MI-1], Rep. Riley, Josh [D-NY-19], Rep. Miller, Carol D. [R-WV-1], Rep. Scott, Austin [R-GA-8], Rep. Webster, Daniel [R-FL-11], Rep. Hill, J. French [R-AR-2], Rep. Suozzi, Thomas R. [D-NY-3], Rep. Estes, Ron [R-KS-4], Rep. Crawford, Eric A. "Rick" [R-AR-1], Rep. Gillen, Laura [D-NY-4], Rep. McCollum, Betty [D-MN-4], Rep. Bean, Aaron [R-FL-4], Rep. Dunn, Neal P. [R-FL-2], Rep. Rouzer, David [R-NC-7], Rep. Kelly, Robin L. [D-IL-2] and 127 more
Recent Actions
- 2025-01-16: Referred to the House Committee on Ways and Means.
- 2025-01-16: Introduced in House
- 2025-01-16: Introduced in House
Bill Versions
- To amend the Internal Revenue Code of 1986 to modify the railroad track maintenance credit. — issued 2025-01-16 — PDF (3 pages)