The proposed bill seeks to improve freight railroad infrastructure in Washington by offering tax incentives to eligible taxpayers in the railroad industry. It introduces new sections in the Revised Code of Washington (RCW) that provide tax credits for qualified expenditures related to short line railroad maintenance, new rail development, and modernization efforts. Eligible taxpayers can receive a credit equal to 50% of their qualified expenditures, capped at $500,000 per taxpayer annually, with a total cap of $8 million in credits available each year. The bill also facilitates the transfer of these credits among taxpayers and defines eligibility criteria and qualifying expenditures.

In addition to the tax credits, the bill establishes tax exemptions for the sale and use of materials necessary for track maintenance by class II and class III railroads, as well as rail facilities owned by local governments. It also introduces a credit for companies that recycle railroad materials, allowing them to claim a credit based on the fair market value of donated materials. The credits and exemptions will expire on specified dates, with the ability to earn credits for qualifying expenditures ending on January 1, 2037, and no credits being claimable for tax periods beginning on or after January 1, 2043. The bill includes provisions for the administration of these credits and stipulates that if specific funding is not provided by June 30, 2025, the act will become null and void.