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HB 2832

Relating to preferences for veterans in public employment.

2025 Regular Session Introduced by Paul Evans

Illinois creates a 50% tax credit for Class II/III railroads and track owners/lessees to finance short-line infrastructure repairs; $5M/year cap, transferable, 2026-2035.

In committee upon adjournment.
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Bill Summary · HB 2832

Summary — HB 2832: Short Line Railroad Infrastructure Modernization Act

Note: The materials provided include text from two different HB 2832 bills (an Arizona appropriation for a community college housing project and an Illinois tax-credit bill). This summary focuses on the Illinois “Short Line Railroad Infrastructure Modernization Act” (the Short Line Railroad Act) — the provisions and actions described below reflect that Act.

Purpose / Intent

To encourage repair, reconstruction, replacement and limited new construction of short-line railroad infrastructure in Illinois by creating a state income tax credit for Class II and Class III railroads and owners/lessees of industrial sidings, spurs, and industry tracks. The objective is to modernize and preserve short-line rail assets that support local industry and freight connectivity.

Key provisions

  • Eligibility
    • “Eligible taxpayer” = (1) any railroad located wholly or partly in Illinois classified by the federal Surface Transportation Board as Class II or Class III; and (2) any owner or lessee of a rail siding, industrial spur, or industry track on or adjacent to any railroad in Illinois.
  • Credit amount and scope
    • Credit = 50% of “qualified railroad reconstruction or replacement expenditures” incurred in the taxable year.
    • Qualified expenditures include maintenance, reconstruction, replacement of track/roadbed/bridges/track-related structures; new construction of industrial leads, switches, spurs and sidings by Class II/III railroads in Illinois; and extensions of existing sidings.
  • Per-taxpayer annual cap
    • The credit for any eligible taxpayer in a taxable year is limited to: ($3,500 OR the per‑mile amount specified in 26 U.S.C. §45G as of the first day of the taxable year, if that amount is not $3,500) × (number of miles of track in Illinois owned/leased by the taxpayer and for which expenditures were made as of Dec 31 of that taxable year).
  • Program-wide cap
    • The Department of Transportation (DOT) may not award more than $5,000,000 in credits in any calendar year.
  • Timeframe
    • Credits available for taxable years beginning on or after Jan 1, 2026 and beginning before Jan 1, 2036.
  • Refundability, carryforward, ordering
    • Credits are nonrefundable. Unused credit may be carried forward up to 5 taxable years. Credits cannot reduce Illinois income tax liability below zero.
  • Transferability and administration
    • Credits may be transferred (in whole or part) to any Illinois taxpayer by written agreement; transfer agreements must be filed with DOT and DOT will issue credit certificates. Transferees can be held liable for repayment if credits are disallowed on audit.
    • Pass-through treatment applies (partners, S‑corporation shareholders).
    • The DOT administers the program, may adopt rules and forms, and may take actions (including accepting financial interests in property) to protect the State’s participation.
  • Confidentiality / FOIA
    • Documentary materials submitted by applicants that consist of commercial or financial information are treated as confidential (not public records) to the extent provided.

Who is affected

  • Primary beneficiaries: Class II and Class III railroads operating in Illinois and private owners/lessees of rail sidings, spurs and industry tracks who make eligible capital or maintenance expenditures.
  • Secondary effects: Industries relying on short-line rail service, local economic development, and taxpayers/investors who may purchase transferred credits.
  • Fiscal impact: Foregone state income tax revenue up to the program caps ($5M/year maximum award), plus any per-taxpayer caps determined by miles and the per-mile factor.

Procedural / timeline notes

  • The bill sets the effective window for credits (tax years 2026–2035 inclusive, per the “begin before Jan 1, 2036” language).
  • DOT is the implementing agency and must issue credit certificates and adopt rules.
  • Provided legislative actions indicate introduction and committee consideration in early 2025 (filed Feb 6, 2025; committee referrals and subcommittee review noted). Current status in the provided record: Rule 19(a) / Re‑referred to Rules Committee.

If you want, I can:
- Extract the bill’s exact per-taxpayer cap calculation into a worked example,
- Compare this proposal to existing federal/state rail credit programs, or
- Draft a short fiscal-note-style summary of likely budgetary effects.

Compiled from official sources — confirm details with the bill’s official record.

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