article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Green Railcar Enhancement Act of 2010''. SEC. 2. CREDIT FOR FREIGHT RAILCAR REPLACEMENT OR MODERNIZATION. (a) In General.--Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: ``SEC. 45R. FREIGHT RAILCAR REPLACEMENT OR MODERNIZATION CREDIT. ``(a) General Rule.--For purposes of section 38, the freight railcar replacement or modernization credit determined under this section for the taxable year is an amount equal to 25 percent of the sum of-- ``(1) the basis of any qualified freight railcar placed in service by the taxpayer during the taxable year, plus ``(2) the qualified freight railcar rebuild expenditures of the taxpayer for the taxable year. ``(b) Qualified Freight Railcar.-- ``(1) In general.--For purposes of this section, the term `qualified freight railcar' means a freight railcar which-- ``(A) is acquired or rebuilt by the taxpayer pursuant to a binding agreement entered into after the date of the enactment of this section, and ``(B) meets the capacity or fuel efficiency improvement requirements of paragraph (2). ``(2) Capacity or fuel efficiency requirements.-- ``(A) In general.--A freight railcar shall be treated as meeting the capacity or fuel efficiency requirements of this paragraph if-- ``(i) in the case of a freight railcar which is acquired by the taxpayer during the taxable year (`replacement railcar'), the taxpayer identifies another railcar (although not necessarily one being used for an identical purpose) which the taxpayer certifies-- ``(I) was removed permanently from service as a freight railcar during the taxable year, or ``(II) is being rebuilt in such a manner as to achieve a significant improvement in capacity or fuel efficiency, or ``(ii) in the case of a freight railcar rebuilt by the taxpayer, such rebuilding results in a significant improvement in capacity or fuel efficiency. ``(B) Ownership not required.--For purposes of subparagraph (A)(i), such other railcar may be one owned by the taxpayer or one owned by another taxpayer, so long as there exists a binding agreement to so remove or rebuild the railcar. ``(C) Significant improvement.--For purposes of subparagraph (A), an improvement in capacity or fuel efficiency with respect to a freight railcar shall be treated as significant if such capacity or fuel efficiency, as the case may be, is increased by at least 8 percent. ``(c) Qualified Freight Railcar Rebuild Expenditure.--For purposes of this section, the term `qualified freight railcar rebuild expenditure' means any amount paid or incurred-- ``(1) in connection with the modification of a freight railcar resulting in such railcar being a qualified freight railcar, and ``(2) which is properly chargeable to a capital account with respect to such freight railcar. ``(d) Other Special Rules.-- ``(1) Coordination with other credits.--Any amount 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. ``(2) Basis adjustment.--For purposes of this subtitle, if a credit is allowed under subsection (a) with respect to any qualified freight railcar, the basis of such railcar shall be reduced by the amount of the credit so allowed. ``(3) Sale-leaseback.--For purposes of subsection (a)(1), if any qualified freight railcar is-- ``(A) originally placed in service by a person after [the date of the enactment of this section], and ``(B) sold and leased back by such person within 3 months after the railcars are originally placed in service (or, in the case of more than 1 railcar subject to the same lease, within 3 months after the date the final railcar is placed in service, so long as the period between the time the first railcar is placed in service and the time the last railcar is placed in service does not exceed 12 months), such railcars shall be treated as originally placed in service not earlier than the date on which such railcars are used under the leaseback referred to in subparagraph (B). ``(4) Syndication.--For purposes of subsection (a)(1), if-- ``(A) any qualified freight railcar is originally placed in service after the date of enactment of this section by the lessor of such railcar, ``(B) such railcar is sold by such lessor or any subsequent purchaser within 3 months after the date such railcar was originally placed in service (or, in the case of more than 1 railcar subject to the same lease, within 3 months after the date the final railcar is placed in service and the time the last railcar is placed in service does not exceed 12 months), and ``(C) the user of such railcar after the last sale during such 3-month period remains the same as when such railcar was originally placed in service, such railcars shall be treated as originally placed in service not earlier than the date of such last sale. ``(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 freight railcar that is sold or otherwise disposed of by the taxpayer during the 5-year period beginning on the date on which such railcar is originally placed in service. The preceding sentence shall not apply to a qualified freight railcar that is sold by and subsequently leased back to the taxpayer. ``(6) Reporting requirements.--The Secretary, in consultation with the Surface Transportation Board, may develop appropriate reporting requirements for taxpayers utilizing this credit. ``(e) Termination.--This section shall not apply to any freight railcars acquired, or with respect to which at least 50 percent of the rebuilding is completed, after December 31, 2011.''. (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 railcar replacement or modernization 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) 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 railcar replacement or modernization credit.''. (e) Effective Date.--The amendments made by this section shall apply to property placed in service, and amounts paid or incurred, after December 31, 2009.
summary: Green Railcar Enhancement Act of 2010 - Amends the Internal Revenue Code to allow, through 2011, a new business-related tax credit for 25% of the cost of acquiring or rebuilding freight railcars which achieve an increase in capacity or fuel efficiency of at least 8%.