CREDIT FOR MAINTENANCE OF RAILROAD TRACK.

SEC. 245. CREDIT FOR MAINTENANCE OF RAILROAD TRACK.(a) In General.—Subpart D of part IV of subchapter A of chapter 1 (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 an amount equal to 50 percent of the qualified railroad track maintenance expenditures paid or incurred by an eligible taxpayer during the taxable year.“(b) Limitation.—The credit allowed under subsection (a) for any taxable year shall not exceed the product of—“(1) $3,500, and“(2) the number of miles of railroad track owned or leased by the eligible taxpayer as of the close of the taxable year. A mile of railroad track may be taken into account by a person other than the owner only if such mile is assigned to such person by the owner for purposes of this subsection. Any mile which is so assigned may not be taken into account by the owner for purposes of this subsection.“(c) Eligible Taxpayer.—For purposes of this section, the term ‘eligible taxpayer’ means—“(1) any Class II or Class III railroad, and“(2) any person who transports property using the rail facilities of a person described in paragraph (1) or who furnishes railroad-related property or services to such a person.“(d) 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 as of January 1, 2005, by a Class II or Class III railroad. “(e) Other Definitions and Special Rules.—“(1) Class ii or Class iii railroad.—For purposes of this section, the terms ‘Class II railroad’ and ‘Class III railroad’ have the respective meanings given such terms by the Surface Transportation Board.“(2) Controlled groups.—Rules similar to the rules of paragraph (1) of section 41(f) shall apply for purposes of this section.“(3) 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, 2004, and before January 1, 2008.”.(b) Limitation on Carryback.—118 STAT. 1448(1) In general.—Subsection (d) of section 39 is amended to read as follows:“(d) Transitional Rule.—No portion of the unused business credit for any taxable year which is attributable to a credit specified in section 38(b) or any portion thereof may be carried back to any taxable year before the first taxable year for which such specified credit or such portion is allowable (without regard to subsection (a)).”.(2) Effective date.—The amendment made by paragraph (1) shall apply with respect to taxable years ending after December 31, 2003.(c) Conforming Amendments.—(1) Section 38(b) (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 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 inserting after paragraph (28) 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)(3).”.(d) Clerical Amendment.—The table of sections for subpart D of part IV of subchapter A of chapter 1 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, 2004.