This bill introduces a new tax credit under the Internal Revenue Code to encourage the modernization and replacement of inefficient freight railcars. Taxpayers can claim a 10 percent credit on their freight railcar fleet modernization expenses , which encompass costs for both newly built replacement railcars and qualified modernization expenditures. To qualify for the credit, a newly built replacement railcar must be constructed after the bill's enactment, ordered or placed in service within three years, and replace two older railcars that were scrapped and permanently removed from service. For modernized railcars , improvements must result in at least an 8 percent increase in capacity or fuel efficiency, or meet specific performance standards like the Association of American Railroads Standard S-286 or PHMSA HM-251 design standards. The credit is capped at 1,000 qualified freight railcars per taxpayer per year, and certain entities, particularly those owned or controlled by state-owned enterprises, are ineligible. The bill also includes rules to prevent double benefits and adjust the railcar's basis, and the credit will terminate three years after the date of enactment. Furthermore, the bill mandates that the Secretary of the Treasury submit a report within three years of enactment. This report will detail the credit's usage, including the number of times it was claimed, the railcars scrapped, and new railcars contracted or built as a direct result of this incentive.