[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1703 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                S. 1703

To amend the Internal Revenue Code of 1986 to provide a credit against 
 income tax for expenditures for the maintenance of railroad tracks of 
                   Class II and Class III railroads.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 2, 2003

   Mr. Smith introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide a credit against 
 income tax for expenditures for the maintenance of railroad tracks of 
                   Class II and Class III railroads.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Local Railroad Rehabilitation and 
Investment Act of 2003''.

SEC. 2. CREDIT FOR MAINTENANCE OF RAILROAD TRACK.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business-related 
credits) is amended by adding at the end the following new section:

``SEC. 45G. RAILROAD TRACK MAINTENANCE CREDIT.

    ``(a) General Rule.--For purposes of section 38, the railroad track 
maintenance credit determined under this section for the taxable year 
is the amount of qualified railroad track maintenance expenditures paid 
or incurred by the taxpayer during the taxable year.
    ``(b) Limitation.--The credit allowed under subsection (a) shall 
not exceed the product of--
            ``(1) $10,000, and
            ``(2) the number of miles of railroad track owned or leased 
        by the taxpayer as of the close of the taxable year.
    ``(c) Qualified Railroad Track Maintenance Expenditures.--For 
purposes of this section, the term `qualified railroad track 
maintenance expenditures' means expenditures (whether or not otherwise 
chargeable to capital account) for maintaining railroad track 
(including roadbed, bridges, and related track structures) owned or 
leased by the taxpayer of Class II or Class III railroads (as 
determined by the Surface Transportation Board).
    ``(d) Controlled Groups.--For purposes of subsection (b), rules 
similar to the rules of paragraph (1) of section 41(f) shall apply for 
purposes of this subsection.
    ``(e) Basis Adjustment.--For purposes of this subtitle, if a credit 
is allowed under this section with respect to any railroad track, the 
basis of such track shall be reduced by the amount of the credit so 
allowed.
    ``(f) Application of Section.--This section shall apply to 
qualified railroad track maintenance expenditures paid or incurred 
during taxable years beginning after December 31, 2003, and before 
January 1, 2009.
    ``(g) Credit Transferability.--
            ``(1) In general.--Any credit allowable under this section 
        may be transferred as provided in this subsection, and the 
        determination as to whether the credit is allowable shall be 
        made without regard to the tax-exempt status of the transferor.
            ``(2) Transfer to eligible taxpayer.--Any credit 
        transferred under paragraph (1) shall be transferred to an 
        eligible taxpayer. Any credit so transferred shall be allowed 
        to the transferee, but the transferee may not assign such 
        credit to any other person.
            ``(3) Eligible taxpayer.--For purposes of this subsection, 
        the term `eligible taxpayer' means--
                    ``(A) any person who transports property using the 
                rail facilities of the taxpayer or who furnishes 
                railroad-related property or services to the taxpayer, 
                and
                    ``(B) any Class II or Class III railroad.
            ``(4) Minimum price for transfer.--No transfer shall be 
        allowed under this subsection unless the transferor receives 
        compensation for the credit transfer equal to at least 50 
        percent of the amount of credit transferred. The excess of the 
        amount of credit transferred over the compensation received by 
        the transferor for such transfer shall be included in the gross 
        income of the transferee.''.
    (b) Limitation on Carryback.--Section 39(d) of the Internal Revenue 
Code of 1986 (relating to transition rules) is amended by adding at the 
end the following new paragraph:
            ``(11) No carryback of railroad track maintenance credit 
        before effective date.--No portion of the unused business 
        credit for any taxable year which is attributable to the 
        railroad track maintenance credit determined under section 45G 
        may be carried to a taxable year beginning before January 1, 
        2004.''.
    (c) Conforming Amendments.--
            (1) Section 38(b) of the Internal Revenue Code of 1986 
        (relating to general business credit) is amended by striking 
        ``plus'' at the end of paragraph (14), by striking the period 
        at the end of paragraph (15) and inserting ``, plus'', and by 
        adding at the end the following new paragraph:
            ``(16) the railroad track maintenance credit determined 
        under section 45G(a).''.
            (2) Subsection (a) of section 1016 of such Code is amended 
        by striking ``and'' at the end of paragraph (27), by striking 
        the period at the end of paragraph (28) and inserting ``, 
        and'', and by adding at the end the following new paragraph:
            ``(29) in the case of railroad track with respect to which 
        a credit was allowed under section 45G, to the extent provided 
        in section 45G(e).''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 45F the 
following new item:

                              ``Sec. 45G. Railroad track maintenance 
                                        credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2003.
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