Bill Overview
Title: Freight RAILCAR Act of 2022
Description: This bill provides a new tax credit through 2024 for 10% of freight railcar fleet modernization expenses (i.e., railcar replacement and modernization expenses for meeting fuel efficiency and performance standards). The bill provides that no more than 2,000 freight railcars per taxpayer may be taken into account for purposes of determining the credit in a taxable year. The Department of the Treasury must report to Congress on the credit to provide information on the number of times the credit was claimed and the number of railcars scrapped or built as a result of the credit.
Sponsors: Rep. Schneider, Bradley Scott [D-IL-10]
Target Audience
Population: People employed in the global freight rail industry
Estimated Size: 220000
- The bill provides tax credits for freight railcar fleet modernization, which directly impacts companies that own and operate freight railcars.
- The US freight rail industry primarily consists of large rail operators, leasing companies, and manufacturers.
- Approximately 1.6 million freight railcars are in use according to the Association of American Railroads, suggesting the industry minimally affects US employees in maintenance, operation, and manufacturing.
- Modernization and replacement of railcars could improve employment stability for jobs associated with the building and maintenance of newer railcars.
- The aim is to enhance railcars' fuel efficiency and performance, indirectly influencing environmental sustainability efforts.
Reasoning
- The policy directly affects companies that manage, maintain, or manufacture railcars, as they stand to benefit from tax incentives to modernize fleets.
- Large rail operators are the primary beneficiaries, potentially impacting the jobs of individuals involved in the maintenance and operation of railcars.
- Consideration for those indirectly impacted by reduced emissions due to modernized railcars, such as environmental advocates.
- A significant portion of the population may not feel direct impacts as they are not employed within this niche sector.
- Estimated impact is limited by the number of companies capable of claiming a substantial benefit from the policy due to the restrictions on railcars per taxpayer.
Simulated Interviews
Railcar Maintenance Technician (Omaha, Nebraska)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 4/20
Statement of Opinion:
- This policy could create more work opportunities for me with modernized railcars needing more specialized maintenance.
- It helps our industry stay competitive and reduces environmental impact. I hope it leads to job security.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 4 |
| Year 20 | 9 | 4 |
Environmental Policy Analyst (Chicago, Illinois)
Age: 29 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- Encouraging railcar modernization is essential for emission reduction. This policy is a step towards sustainable rail transport.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 10 | 8 |
| Year 20 | 10 | 8 |
Railcar Manufacturer (Houston, Texas)
Age: 50 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- With the cap on railcars, small manufacturers might not benefit as much as larger companies.
- I worry that only the big players will be able to maximize this tax credit.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Railroad Operations Manager (Fort Worth, Texas)
Age: 38 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 3/20
Statement of Opinion:
- This tax credit could really help us push forward our fleet modernization plans faster.
- It's a necessary incentive for the industry to reduce our carbon footprint.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 5 |
| Year 5 | 9 | 5 |
| Year 10 | 9 | 4 |
| Year 20 | 9 | 4 |
Retired Railroad Worker (Cheyenne, Wyoming)
Age: 62 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- I support anything that keeps railroads modern and efficient.
- My friends still working can benefit if this means more stable jobs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
Freight Broker (Los Angeles, California)
Age: 35 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- If rail companies modernize faster, it might lower freight costs and help my business.
- Rail can become more competitive with road and air transport.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
Transportation Policy Advocate (Seattle, Washington)
Age: 40 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- This tax credit is positive for moving towards sustainable rail transport.
- I would like to see more incentives for passenger rail improvements as well.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Railcar Inspector (Scranton, Pennsylvania)
Age: 30 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- This could require us to learn new inspection techniques for modernized cars, which I find exciting.
- More high-tech cars mean better safety and efficiency.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 4 |
| Year 10 | 8 | 4 |
| Year 20 | 9 | 3 |
Automotive Engineer (Detroit, Michigan)
Age: 27 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- While I am not directly impacted, more modern rail transport could reduce road traffic and emissions.
- This might open collaborations between rail and automotive tech in the future.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Supply Chain Manager (Atlanta, Georgia)
Age: 55 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- A modernized rail fleet might improve supply chain reliability.
- This isn't directly impactful for my work, but anything that helps freight efficiency is positive.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Cost Estimates
Year 1: $200000000 (Low: $150000000, High: $250000000)
Year 2: $200000000 (Low: $150000000, High: $250000000)
Year 3: $200000000 (Low: $150000000, High: $250000000)
Year 5: $0 (Low: $0, High: $0)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The cap of 2,000 railcars per taxpayer sets a limit on the scale of potential tax credits.
- Economic effects may extend beyond the immediate beneficiaries to encompass sectors supporting railcar production.
- The finite eligibility window through 2024 may accelerate railcar modernization activities.
- This policy might set precedents for future transport-related tax credits.