Page:United States Statutes at Large Volume 90 Part 2.djvu/291

 PUBLIC LAW 94-455—OCT. 4, 1976

9 0 STAT. 1759

TITLE XVII—RAILROAD AND AIRLINE PROVISIONS SEC. 1701. CERTAIN PROVISIONS RELATING TO RAILROADS. (a) TREATMENT OF CERTAIN KAIUIOAD T I E S. — S e c t i o n 263 ( r e l a t i n g

to capital expenditures) is amended by a d d i n g a t the end thereof the following new subsection: " (g) RAILROAD T I E S. — I n the case of a domestic common carrier by rail (including a railroad switching or terminal company) which uses the retirement-replacement method of accounting for depreciation of its railroad track, expenditures for acquiring and installing replacement ties of any material ( and fastenings related to such ties) shall be accorded the same tax accounting treatment as expenditures for replacement ties of wood ( and fastenings related to such t i e s). " (b) INCREASE I N 5 0 - P E R C E N T LIMITATION.—Subsection (a) of section

46 (relating to determination of amount of investment credit) is amended by a d d i n g a t the end thereof the following new paragraph: "(8) ALTERNATIVE RAILROADS.—

LIMITATION

IN

THE CASE

OF CERTAIN

" (A) IN GENERAL.—If, for a taxable year ending after calendar year 1976, and before calendar year 1983, the amount of the qualified investment of the taxpayer which is attributable to railroad property is 25 percent or more of his aggregate qualified investment, the n subparagraph (C) of paragraph (3) of this subsection shall be applied by substituting for 50 percent his applicable percentage for such year. " (B) APPLICABLE PERCENTAGE.—The applicable percentage

of any tax p a y e r for any taxable year under this paragraph is— " (i) 50 percent, plus " ( i i) that portion of the tentative percentage for the taxable year which the taxpayer's amount of qualified investment which is railroad property bears to his aggregate qualified investment. If the proportion referred to m clause (ii) is 75 percent or more, the applicable percentage of the taxpayer for the year shall be 50 percent plus the tentative percentage for such year. "(C)

TENTATIVE PERCENTAGE.—For purposes of s u b p a r a -

g r a p h (B), the tentative percentage shall be determined under the following t a b l e: "If the taxable The tentative year ends in: percentage is: 1977 or 1978 50 1979 40 1980 30 1981 20 1982 10 "(D)

RAILROAD PROPERTY DEFINED.—For purposes of t h i s

paragraph, the term 'railroad property' means section 38 property used by the taxpayer directly in connection with the trade or business carried on by the tax p a y e r of operating a railroad (including a railroad switching o r terminal company)."

26 USC 263.

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