II 110th CONGRESS 1st Session S. 881 IN THE SENATE OF THE UNITED STATES March 14, 2007 Mrs. Lincoln (for herself and 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 extend and modify the railroad track maintenance credit.

1.

Short title

This Act may be cited as the Short Line Railroad Investment Act of 2007.

2.

Extension and modification of Railroad Track Maintenance Credit

(a)

Extension

(1)

In general

Subsection (d) of section 45G of the Internal Revenue Code of 1986 (relating to qualified railroad track maintenance expenditures) is amended by striking for maintaining and all that follows and inserting for maintaining—(A)in the case of taxable years beginning after December 31, 2004, and before January 1, 2008, railroad track (including roadbed, bridges, and related track structures) owned or leased as of January 1, 2005, by a Class II or Class III railroad (determined without regard to any consideration for such expenditures given by the Class II or Class III railroad which made the assignment of such track), and (B)in the case of taxable years beginning after December 31, 2007, and before January 1, 2011, railroad track (including roadbed, bridges, and related track structures) owned or leased as of January 1, 2007, by a Class II or Class III railroad (determined without regard to any consideration for such expenditures given by the Class II or Class III railroad which made the assignment of such track). . (2)

Conforming amendment

Section 45G of such Code is amended by striking subsection (f). (b)

Coordination with section 55

Section 38(c)(4)(B) of the Internal Revenue Code of 1986 is amended by striking and at the end of clause (i), by striking the period at the end of clause (ii)(II) and inserting , and, and by adding at the end the following new clause: (iii)the credit determined under section 45G. . (c)

Credit limitation adjustment

Subparagraph (A) of section 45G(b)(1) of the Internal Revenue Code of 1986 is amended by striking $3,500 and inserting $4,500. (d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2007.