SB291 Alabama 2019 Session

Summary

Primary Sponsor

Bobby D. SingletonSenator

Democrat

Session

Regular Session 2019

Title

Taxation, tax credits, Railroad Modernization Act, state income tax credit authorized for qualified railroad reconstruction or replacement expenditures

Summary

SB 291 would create a state income tax credit for Class II and III railroads' qualified railroad reconstruction or replacement expenditures, allow transferring the credit to other taxpayers, and sunset the program after five years.

What This Bill Does

Eligible taxpayers could claim a credit equal to 50% of qualified railroad reconstruction or replacement expenditures for railroad infrastructure in Alabama, with a cap of $3,500 per mile of track owned or leased in the state. The credit is transferable to eligible transferees under a written agreement, and only the transferee may use the credit; unused credits may be carried forward up to five years. The credit applies to tax years 2019 through 2023 unless extended, and the Department of Revenue would oversee transfer forms and collect a $1,000 transfer fee.

Who It Affects

• Eligible Class II or Class III railroads operating in Alabama, which would be able to claim the credit for qualified expenditures on railroad infrastructure they own or lease.
• Other taxpayers subject to Alabama income tax who could receive the credit through a transfer from an eligible railroad and use it to offset their own tax liability under the transfer rules.

Key Provisions

• Creates The Railroad Modernization Act of 2019.
• Defines eligible taxpayer as a railroad classified as Class II or Class III by the U.S. Surface Transportation Board; eligible expenditures include maintenance, reconstruction, or replacement of railroad infrastructure in Alabama, including new industrial leads, switches, spurs, sidings, and extensions.
• Sets the credit at 50% of qualified expenditures, with a cap of $3,500 per mile of railroad track owned or leased in Alabama at the end of the tax year.
• Allows the credit to be transferable and assignable via written transfer agreement; transfer can only be used by the transferee and may not be transferred again; requires transfer forms and verification by the Department of Revenue; a $1,000 transfer fee applies.
• Requires transfers to be filed with the Department of Revenue within 30 days; transferor must provide transfer statements, credit certificates, proposed transfer agreement, and payment of the transfer fee.
• Allows any unused portion of the credit to be carried forward for up to five tax years after qualification.
• Pass-through entities (partnerships, LLCs, etc.) pass the credit through to their owners.
• Department of Revenue must annually report to the Legislature the total credits claimed.
• Effective for 2019 through 2023 tax years, unless extended by the Legislature; effective date is the first day of the third month after passage and governor’s approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation