The bill seeks to improve freight railroad infrastructure in Washington by offering tax incentives to eligible taxpayers engaged in railroad maintenance, development, and modernization. It introduces new provisions across several chapters of the Revised Code of Washington (RCW), including tax credits for qualified expenditures related to short line railroad maintenance and modernization, capped at $1,000,000 per taxpayer annually. The legislation also establishes eligibility criteria for class II and class III railroads and outlines a process for transferring credits between taxpayers. Additionally, it exempts certain sales and uses of materials for track maintenance from taxation for these railroads, while ensuring that credits cannot be claimed for expenditures that have already received federal tax credits or state and federal grants.

Moreover, the bill includes provisions for tax credits for companies that recycle railroad materials, allowing them to claim credits based on the fair market value of donated materials used for track maintenance or modernization. These credits can also be transferred and have specific eligibility requirements. The legislation emphasizes the intent to foster economic development and minimize the environmental impact of freight transportation, with a performance evaluation mechanism for the tax preferences established. The effective dates for various sections of the bill are staggered, with some provisions set to take effect in July 2024 and others in January 2025.