ELECTIVE CARRYBACK OF EXISTING CARRYOVERS OF NATIONAL RAILROAD PASSENGER CORPORATION.

SEC. 977. ELECTIVE CARRYBACK OF EXISTING CARRYOVERS OF NATIONAL RAILROAD PASSENGER CORPORATION. (a) Elective Carryback.— (1) In general.—If the National Railroad Passenger Corporation (in this section referred to as the “Corporation”)— (A) makes an election under this section for its first taxable year ending after September 30, 1997, and (B) agrees to the conditions specified in paragraph (2), then the Corporation shall be treated as having made a payment of the tax imposed by chapter 1 of the Internal Revenue Code of 1986 for such first taxable year and the succeeding taxable year in an amount (for each such taxable year) equal to 50 percent of the amount determined under paragraph (3). Each such payment shall be treated as having been made by the Corporation on the last day prescribed by law (without regard to extensions) for filing its return of tax under chapter 1 of such Code for the taxable year to which such payment relates. (2) Conditions.— (A) In general.—This section shall only apply to the Corporation if it agrees (in such manner as the Secretary of the Treasury or his delegate may prescribe) to— (i) except as provided in clause (ii), use any refund of the payment described in paragraph (1) (and any interest thereon) solely to finance qualified expenses of the Corporation, and (ii) make the payments to non-Amtrak States as described in subsection (c). (B) Repayment.— (i) In general.—The Corporation shall repay to the United States any amount not used in accordance with this paragraph and any amount remaining unused as of January 1, 2010. (ii) Special rules.—For purposes of clause (i)— (I) no amount shall be treated as remaining unused as of January 1, 2010, if it is obligated as of such date for a qualified expense, and (II) the Corporation shall not be treated as failing to meet the requirements of clause (i) by reason of investing any amount for a temporary period. (3) Amount.—For purposes of paragraph (1)— (A) In general.—The amount determined under this paragraph shall be the lesser of— (i) 35 percent of the Corporation’s existing qualified carryovers, or111 STAT. 900 (ii) the Corporation’s net tax liability for the carryback period. (B) Dollar limit.—Such amount shall not exceed $2,323,000,000. (b) Existing Qualified Carryovers; Net Tax Liability.—For purposes of this section— (1) Existing qualified carryovers.—The term “existing qualified carryovers” means the aggregate of the amounts which are net operating loss carryovers under section 172(b) of the Internal Revenue Code of 1986 to the Corporation’s first taxable year ending after September 30, 1997. (2) Net tax liability for carryback period.— (A) In general.—The Corporation’s net tax liability for the carryback period is the aggregate of the net tax liability of the Corporation’s railroad predecessors for taxable years in the carryback period. (B) Net tax liability.—The term “net tax liability” means, with respect to any taxable year, the amount of the tax imposed by chapter 1 of the Internal Revenue Code of 1986 (or any corresponding provision of prior law) for such taxable year, reduced by the sum of the credits allowable against such tax under such Code (or any corresponding provision of prior law). (C) Carryback period.—The term “carryback period” means the period— (i) which begins with the first taxable year of any railroad predecessor beginning before January 1, 1971, for which there is a net tax liability, and (ii) which ends with the last taxable year of any railroad predecessor beginning before January 1, 1971. (3) Railroad predecessor.— (A) In general.—The term “railroad predecessor” means— (i) any railroad which entered into a contract under section 401 or 404(a) of the Rail Passenger Service Act of 1970 relieving the railroad of its entire responsibility for the provision of intercity rail passenger service, and (ii) any predecessor thereof. (B) Consolidated returns.—If any railroad described in subparagraph (A) was a member of an affiliated group which filed a consolidated return for any taxable year in the carryback period, each member of such group shall be treated as a railroad predecessor for such year. (c) Payments to Non-Amtrak States.— (1) In general.—Within 30 days after receipt of any refund of any payment described in subsection (a)(1), the Corporation shall pay to each non-Amtrak State an amount equal to 1 percent of the amount of such refund. (2) Use of payment.—Each non-Amtrak State shall use the payment described in paragraph (1) (and any interest thereon) solely to finance qualified expenses of the State. (3) Repayment.—A non-Amtrak State shall pay to the United States— (A) any portion of the payment received by the State under paragraph (1) (and any interest thereon) which is used for a purpose other than to finance qualified expenses 111 STAT. 901of the State or which remains unused as of January 1, 2010, or (B) if such State ceases to be a non-Amtrak State, the portion of such payment (and any interest thereon) remaining as of the date of the cessation. Rules similar to the rules of subsection (a)(2)(B) shall apply for purposes of this paragraph. (d) Tax Consequences.— (1) Reduction in carryovers.—If the Corporation elects the application of this section, the Corporation’s existing qualified carryovers shall be reduced by an amount equal to the amount determined under subsection (a)(3) divided by 0.35. (2) Reduction in tax paid by railroad predecessors.— (A) In general—The Secretary of the Treasury or his delegate shall appropriately adjust the tax account of each railroad predecessor to reduce the net tax liability of such predecessor for taxable years beginning in the carryback period which is offset by reason of the application of this section. (B) FIFO ordering rule.—The Secretary shall make the adjustments under subparagraph (A) first for the earliest year in the carryback period and then for each subsequent year in such period. (C) No effect on other taxpayers.—In no event shall any taxpayer other than the Corporation be allowed a refund or credit by reason of this section. (D) Waiver of limitations.—If the adjustment under subparagraph (A) is barred by the operation of any law or rule of law, such law or rule of law shall be waived solely for purposes of making such adjustment. (3) Tax treatment of expenditures.—With respect to any payment by the Corporation of qualified expenses described in subsection (e)(1)(A) during any taxable year from the amount of any refund of the payment described in subsection (a)(1)— (A) no deduction shall be allowed to the Corporation with respect to any amount paid or incurred which is attributable to such amount, and (B) the basis of any property shall be reduced by the portion of the cost of such property which is attributable to such amount. (4) Payments to a non-amtrak state.—No deduction shall be allowed to the Corporation under chapter 1 of the Internal Revenue Code of 1986 for any payment to a non-Amtrak State required under subsection (a)(2)(A)(ii). (e) Definitions.—For purposes of this section— (1) Qualified expenses.—The term “qualified expenses” means expenses incurred for— (A) in the case of the Corporation— (i) the acquisition of equipment, rolling stock, and other capital improvements, the upgrading of maintenance facilities, and the maintenance of existing equipment, in intercity passenger rail service, and (ii) the payment of interest and principal on obligations incurred for such acquisition, upgrading, and maintenance, and (B) in the case of a non-Amtrak State—111 STAT. 902 (i) the acquisition of equipment, rolling stock, and other capital improvements, the upgrading of maintenance facilities, and the maintenance of existing equipment, in intercity passenger rail service, (ii) the acquisition of equipment, rolling stock, and other capital improvements, the upgrading of maintenance facilities, and the maintenance of existing equipment, in intercity bus service, (iii) the purchase of intercity passenger rail services from the Corporation, and (iv) the payment of interest and principal on obligations incurred for such acquisition, upgrading, maintenance, and purchase. In the case of a non-Amtrak State which provides its own intercity passenger rail service on the date of the enactment of this paragraph, subparagraph (B) shall be applied by only taking into account clauses (i) and (iv). (2) Non-amtrak state.—The term “non-Amtrak State” means, with respect to any payment, any State which does not receive intercity passenger rail service from the Corporation at any time during the period beginning on the date of the enactment of this Act and ending on the date of the payment. (f) Authorizing Reform Required.— (1) In general.—The Secretary of the Treasury shall not make payment of any refund of any payment described in subsection (a)(1) earlier than the date of the enactment of Federal legislation, other than legislation included in this section, which is enacted after July 29, 1997, and which authorizes reforms of the National Railroad Passenger Corporation. (2) No interest.—Notwithstanding any other provision of law, if the payment of any refund is delayed by reason of paragraph (1), no interest shall accrue with respect to such payment prior to the 45th day following the date of the enactment of Federal legislation described in paragraph (1). (3) Estimate of revenue.—For purposes of estimating revenues under budget reconciliation, the impact of this section on Federal revenues shall be determined without regard to this subsection.