SB 186

This bill would provide a corporate income tax credit for up to 50 percent of qualified railroad reconstruction and replacement expenditures by a Class II or Class III railroad

The amount of the credit would be based on a dollar figure times the number of miles of railroad track owned or leased in the state by an eligible railroad. The income tax credit would be eligible to be transferred by written agreement to a taxpayer subject to state corporate or individual income tax. The bill would be retroactive to the tax year beginning January 1, 2019

Relating to railroad infrastructure; to authorize a corporate income tax credit for eligible taxpayer for qualified railroad reconstruction and replacement expenditures by certain railroads; to provide for the transfer of the credits under certain conditions to eligible taxpayers subject to corporate or individual income tax; to provide for the carryover of the tax credit; and to provide for retroactive effect to January 1, 2019.

Section 1

Definitions. For the purpose of this act, the following words have the following meanings: (1) ELIGIBLE TAXPAYER. Any railroad that is classified by the United States Surface Transportation Board as a Class II or Class III railroad. (2) ELIGIBLE TRANSFEREE. Any taxpayer subject to the state corporate income tax or individual income tax, or both. (3) QUALIFIED RAILROAD RECONSTRUCTION OR REPLACEMENT EXPENDITURES. Expenditures for maintenance, reconstruction, or replacement of railroad infrastructure by an eligible taxpayer. The term includes track, roadbed, bridges, industrial leads, and track-related structures owned or leased by a Class II or Class III railroad as of January 1, 2019. The term also includes new construction of industrial leads, switches, spurs and sidings, and extensions of existing sidings by a Class II or Class III railroad.

Section 2

(a) General provisions. For tax years beginning January 1, 2019 or thereafter, a credit is allowed against the state corporate income tax equal to 50 percent of an eligible taxpayer's qualified railroad reconstruction or replacement expenditures. (b) Limitations. The amount of the credit may not exceed the product of three thousand five hundred dollars ($3,500) and the number of miles of railroad track owned or leased within this state by an eligible taxpayer during the taxable year of the taxpayer. (c) Transferability. The credits allowed pursuant to this section that are not used may be transferred by written agreement to subsequent transferees any time during the year of qualification and for the five years following the year of qualification as provided herein. The person originally allowed a credit pursuant to this act and the subsequent transferee shall jointly file a copy of the written transfer agreement with the State Department of Revenue within 30 days of the transfer. The written agreement shall contain the name, address, and taxpayer identification number of the parties to the transfer; the amount of credit being transferred; the year the credit was originally allowed to the transferring person; and the tax year or years for which the credit may be claimed. (d) Carryover provisions. Any credit allowed pursuant to the provisions of this section, to the extent not used, may be carried over in order to each of the five years following the year of qualification.

Section 3

This act shall have retroactive effect to January 1, 2019, following its passage and approval by the Governor, or its otherwise becoming law.