Senate bill calls for tax credit for modernizing freight rail cars

Editor's note: This story has been updated with a statement from the Railway Supply Institute.

U.S. Sens. Jim Banks (R-Ind.) and Chris Coons (D-Del.) last week introduced the Freight RAILCAR Act (S. 2758) in the Senate.

The legislation and would mend the Internal Revenue Code of 1986 to provide a tax credit to encourage the replacement or modernization of inefficient, outdated freight rail cars.

If passed by Congress, the law would strengthen the rail industry's ability to address supply-chain constraints and support well-paying U.S. manufacturing jobs, according to the Rail Security Alliance, which endorses the legislation. 

"The efficiency of the entire North American freight-rail system will be greatly helped by this important bill if enacted,” said RSA Executive Director Erik Olson in a press release.

The Railway Supply Institute also supports the legislation.

“This legislation will encourage investment in the modernization of the North American railcar fleet, improve sustainability, and support American manufacturing jobs,” RSI President Jim Riley said in a press release. 

In February, U.S. Reps. Darin LaHood (R-Ill.) and Brad Schneider (D-Ill.) reintroduced the Freight RAILCAR Act of 2025 (H.R. 1200) to create a tax credit to encourage the replacement and modernization of the U.S. freight-car fleet. The legislation was introduced in the last Congress, but did not pass.