AMORTIZATION OVER 50-YEAR PERIOD OF RAILROAD GRADING AND TUNNEL BORES PLACED IN SERVICE BEFORE 1969.

SEC. 1702. AMORTIZATION OVER 50-YEAR PERIOD OF RAILROAD GRADING AND TUNNEL BORES PLACED IN SERVICE BEFORE 1969. (a) In General.— Section 185 (relating to amortization of railroad grading and tunnel bores) is amended by redesignating subsections (d), (e), (f), (g) and (h) as subsections (f), (g), (h), (i),and (j), respectively, and by inserting after subsection (c) the following new subsections: “(d) Election With Respect to Pre-1969 Property.— A taxpayer may, for any taxable year beginning after December 31, 1974, elect for purposes of this section to treat the term ‘qualified railroad grading and tunnel bores’ as including pre-1969 railroad grading and tunnel bores. An election under this subsection shall be made by filing with the Secretary, in such manner, in such form, and within such time, as the Secretary’ may by regulations prescribe, a statement of such election. The election under this subsection shall remain in effect for all taxable years, after the first year for which it is effective, for which an election under subsection (c) is effective. The election under this subsection shall apply to all pre–1969 railroad grading and tunnel bores of the taxpayer, unless, on application by the taxpayer, the Secretary permits him, subject to such conditions as the Secretary deems necessary, to revoke such election. “(e) Adjusted Basis for Pre-1969 Railroad Grading and Tunnel Bores.— “(1) In general.— The adjusted basis of any pre–1969 railroad grading and tunnel bore shall be determined under this subsection. “(2) Property acquired or constructed after February 28, 1013.— “(A) in the case of pre–1969 railroad grading and tunnel bores— “(i) acquired by the taxpayer after February 28, 1913, or “(ii) the construction of which was completed by the taxpayer after February 28, 1913, the adjusted basis of such property shall be equal to the adjusted basis (for determining gain) of such property in the hands of the taxpayer. “(B) in the case of property described in subparagraph (A)(i) — “(i) which was in existence on February 28, 1913, “(ii) for which the taxpayer has a substituted basis, and “(iii) such substituted basis for which would, but for the provisions of this section, be determined under section 1053, then the adjusted basis of such property shall be determined as if such property were property described in paragraph (3)(A). “(3) Property acquired or constructed before march 1, 1913.— “(A) in the case of pre–1969 railroad grading and tunnel bores— “(i) acquired by the taxpayer before March 1, 1913, or “(ii) the construction of which was completed by the taxpayer before March 1, 1913, 90 STAT. 1761 the adjusted basis of such property shall be determined under the provisions of subparagraph (B), (C), or (D) of this paragraph. “(B) in the case of any property valued under an original valuation made by the Interstate Commerce Commission pursuant to section 19a of part I of the Interstate Commerce Act (49 U.S.C. 19a), the adjusted basis of such property shall be equal to the amount ascertained by the Interstate Commerce Commission as of the date of such valuation to be such property’s cost of reproduction new (as the term ‘cost of reproduction new’ is used in such section 19a). “(C) in the case of property which was not valued by the Interstate Commerce Commission in the manner described in subparagraph (B), but which was valued under an original valuation made by a comparable State regulatory body, the adjusted basis of such property shall be equal to the amount ascertained by such State regulatory body as of the date of its original valuation to be such property’s value, “(D) If, in the case of any property to which this paragraph applies— “(i) neither subparagraph (B) nor (C) applies, or “(ii) notwithstanding subparagraphs (B) and (C), either the taxpayer or the Secretary can establish the adjusted basis (for purposes of determining gain) of such property in the hands of the taxpayer, then the adjusted basis of such property shall be equal to its adjusted basis (for purposes of determining gain) in the hands of the taxpayer.” (b) Definition of Pre-1969 Railroad Grading and Tunnel Bores.— Subsection (f) of section 185 (as redesignated by subsection (a) of this section) is amended by adding at the end thereof the following new paragraph: “(3) Pre-1909 railroad grading and tunnel bores.— The term ‘pre-1969 railroad grading and tunnel bores’ means railroad grading and tunnel bores the original use of which commences before January 1, 1969.”,