189
25 percent of the annual credit determined with re-
spect to such bond.
‘‘(2) ANNUAL CREDIT.—The annual credit deter-
mined with respect to any qualified Amtrak bond is
the product of—
‘‘(A) the applicable credit rate, multiplied
by
‘‘(B) the outstanding face amount of the
bond.
‘‘(3) APPLICABLE CREDIT RATE.—For purposes
of paragraph (2), the applicable credit rate with re-
spect to an issue is the rate equal to an average mar-
ket yield (as of the day before the date of sale of the
issue) on outstanding long-term corporate debt obliga-
tions (determined in such manner as the Secretary
prescribes).
‘‘(4) CREDIT ALLOWANCE DATE.—For purposes
of this section, the term ‘credit allowance date’
means—
‘‘(A) March 15,
‘‘(B) June 15,
‘‘(C) September 15, and
‘‘(D) December 15.
Such term includes the last day on which the bond is
outstanding.
190
‘‘(5) SPECIAL RULE FOR ISSUANCE AND REDEMP-
TION.—In the case of a bond which is issued during
the 3-month period ending on a credit allowance date,
the amount of the credit determined under this sub-
section with respect to such credit allowance date
shall be a ratable portion of the credit otherwise deter-
mined based on the portion of the 3-month period
during which the bond is outstanding. A similar rule
shall apply when the bond is redeemed.
‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.—
‘‘(1) IN
GENERAL.—The credit allowed under
subsection (a) for any taxable year shall not exceed
the excess of—
‘‘(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed by
section 55, over
‘‘(B) the sum of the credits allowable under
this part (other than this subpart and subpart
C).
‘‘(2) CARRYOVER
OF
UNUSED
CREDIT.—If the
credit allowable under subsection (a) exceeds the limi-
tation imposed by paragraph (1) for such taxable
year, such excess shall be carried to the succeeding
taxable year and added to the credit allowable under
subsection (a) for such taxable year.
191
‘‘(d) CREDIT INCLUDED IN GROSS INCOME.—Gross in-
come includes the amount of the credit allowed to the tax-
payer under this section (determined without regard to sub-
section (c)) and the amount so included shall be treated as
interest income.
‘‘(e) QUALIFIED AMTRAK BOND.—For purposes of this
part, the term ‘qualified Amtrak bond’ means any bond
issued as part of an issue if—
‘‘(1) 95 percent or more of the proceeds from the
sale of such issue are to be used for expenditures in-
curred after the date of the enactment of this section
for any qualified project,
‘‘(2) the bond is issued by the National Railroad
Passenger Corporation, is in registered form, and
meets the bond limitation requirements under sub-
section (f),
‘‘(3) the issuer designates such bond for purposes
of this section,
‘‘(4) the issuer certifies that it meets the State
contribution requirement of subsection (k) with re-
spect to such project, as in effect on the date of
issuance,
‘‘(5) the issuer certifies that it has obtained the
written approval of the Secretary of Transportation
for such project in accordance with subsection (l),
192
‘‘(6) the term of each bond which is part of such
issue does not exceed 20 years,
‘‘(7) the payment of principal with respect to
such bond is the obligation of the National Railroad
Passenger Corporation, and
‘‘(8) the issue meets the requirements of sub-
section (g) (relating to arbitrage).
‘‘(f) LIMITATION
ON
AMOUNT
OF
BONDS
DES-
IGNATED.—
‘‘(1) NATIONAL LIMITATION.—There is a quali-
fied Amtrak bond limitation for each calendar year.
Such limitation is—
‘‘(A) for 2002—
‘‘(i) with respect to qualified projects
described in subparagraphs (A), (B), and
(C) of subsection (j)(1), $7,000,000,000, and
‘‘(ii) with respect to the qualified
project described in subsection (j)(1)(D),
$2,000,000,000, and
‘‘(B) except as provided in paragraph (4),
zero thereafter.
‘‘(2) LIMITS ON BONDS FOR NORTHEAST RAIL
CORRIDOR AND INDIVIDUAL STATES.—
‘‘(A) NORTHEAST
RAIL
CORRIDOR.—Not
more than $2,000,000,000 of the limitation
193
under paragraph (1) may be designated for
qualified projects on the northeast rail corridor
between Washington, D.C., and Boston, Massa-
chusetts.
‘‘(B) INDIVIDUAL STATES.—Not more than
$2,000,000,000 of the limitation under para-
graph (1) may be designated for any individual
State. The dollar limitation under this subpara-
graph is in addition to the dollar limitation for
the qualified projects described in subparagraph
(A).
‘‘(3) SET ASIDE FOR BONDS FOR NON-FEDER-
ALLY
DESIGNATED
HIGH-SPEED
RAIL
CORRIDOR
PROJECTS.—Not less than 15 percent of the limitation
under paragraph (1) shall be designated for qualified
projects described in subsection (j)(1)(C).
‘‘(4) CARRYOVER
OF
UNUSED
LIMITATION.—If
for any calendar year—
‘‘(A) 
the 
qualified 
Amtrak 
limitation
amount, exceeds
‘‘(B) the amount of bonds issued during
such year which are designated under subsection
(e)(3),
194
the qualified Amtrak limitation amount for the fol-
lowing calendar year shall be increased by the
amount of such excess.
Any carryforward of a qualified Amtrak limitation amount
may be carried only to calendar year 2003 or 2004.
‘‘(g) SPECIAL RULES RELATING TO ARBITRAGE.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), an
issue shall be treated as meeting the requirements of
this subsection if as of the date of issuance, the issuer
reasonably expects—
‘‘(A) to spend at least 95 percent of the pro-
ceeds from the sale of the issue for 1 or more
qualified projects within the 3-year period begin-
ning on such date,
‘‘(B) to incur a binding commitment with
a third party to spend at least 10 percent of the
proceeds from the sale of the issue, or to com-
mence construction, with respect to such projects
within the 6-month period beginning on such
date, and
‘‘(C) to proceed with due diligence to com-
plete such projects and to spend the proceeds
from the sale of the issue.
‘‘(2) RULES
REGARDING
CONTINUING
COMPLI-
ANCE AFTER 3-YEAR DETERMINATION.—If at least 95
195
percent of the proceeds from the sale of the issue is not
expended for 1 or more qualified projects within the
3-year period beginning on the date of issuance, but
the requirements of paragraph (1) are otherwise met,
an issue shall be treated as continuing to meet the re-
quirements of this subsection if either—
‘‘(A) the issuer uses all unspent proceeds
from the sale of the issue to redeem bonds of the
issue within 90 days after the end of such 3-year
period, or
‘‘(B) the following requirements are met:
‘‘(i) The issuer spends at least 75 per-
cent of the proceeds from the sale of the
issue for 1 or more qualified projects within
the 3-year period beginning on the date of
issuance.
‘‘(ii) Either—
‘‘(I) the issuer spends at least 95
percent of the proceeds from the sale of
the issue for 1 or more qualified
projects within the 4-year period be-
ginning on the date of issuance, or
‘‘(II) the issuer pays to the Fed-
eral Government any earnings on the
proceeds from the sale of the issue that
196
accrue after the end of the 3-year pe-
riod beginning on the date of issuance
and uses all unspent proceeds from the
sale of the issue to redeem bonds of the
issue within 90 days after the end of
the 4-year period beginning on the date
of issuance.
‘‘(h) RECAPTURE OF PORTION OF CREDIT WHERE
CESSATION OF COMPLIANCE.—
‘‘(1) IN
GENERAL.—If any bond which when
issued purported to be a qualified Amtrak bond ceases
to be such a qualified bond, the issuer shall pay to the
United States (at the time required by the Secretary)
an amount equal to the sum of—
‘‘(A) the aggregate of the credits allowable
under this section with respect to such bond (de-
termined without regard to subsection (c)) for
taxable years ending during the calendar year in
which such cessation occurs and the 2 preceding
calendar years, and
‘‘(B) interest at the underpayment rate
under section 6621 on the amount determined
under subparagraph (A) for each calendar year
for the period beginning on the first day of such
calendar year.
197
‘‘(2) FAILURE TO PAY.—If the issuer fails to
timely pay the amount required by paragraph (1)
with respect to such bond, the tax imposed by this
chapter on each holder of any such bond which is part
of such issue shall be increased (for the taxable year
of the holder in which such cessation occurs) by the
aggregate decrease in the credits allowed under this
section to such holder for taxable years beginning in
such 3 calendar years which would have resulted sole-
ly from denying any credit under this section with re-
spect to such issue for such taxable years.
‘‘(3) SPECIAL RULES.—
‘‘(A) TAX BENEFIT RULE.—The tax for the
taxable year shall be increased under paragraph
(2) only with respect to credits allowed by reason
of this section which were used to reduce tax li-
ability. In the case of credits not so used to re-
duce tax liability, the carryforwards and
carrybacks under section 39 shall be appro-
priately adjusted.
‘‘(B) NO CREDITS AGAINST TAX.—Any in-
crease in tax under paragraph (2) shall not be
treated as a tax imposed by this chapter for pur-
poses of determining—
198
‘‘(i) the amount of any credit allowable
under this part, or
‘‘(ii) the amount of the tax imposed by
section 55.
‘‘(i) TRUST ACCOUNT.—
‘‘(1) IN GENERAL.—The following amounts shall
be held in a trust account by a trustee independent
of the National Railroad Passenger Corporation:
‘‘(A) The proceeds from the sale of all bonds
designated for purposes of this section.
‘‘(B) The amount of any matching contribu-
tions with respect to such bonds.
‘‘(C) The investment earnings on proceeds
from the sale of such bonds.
‘‘(D) Any earnings on any amounts de-
scribed in subparagraph (A), (B), or (C).
‘‘(2) USE OF FUNDS.—Amounts in the trust ac-
count may be used only to pay costs of qualified
projects and redeem qualified Amtrak bonds, except
that amounts withdrawn from the trust account to
pay costs of qualified projects may not exceed the ag-
gregate proceeds from the sale of all qualified Amtrak
bonds issued under this section.
‘‘(3) USE OF REMAINING FUNDS IN TRUST AC-
COUNT.—Upon the redemption of all qualified Am-
199
trak bonds issued under this section, any remaining
amounts in the trust account described in paragraph
(1) shall be available to the issuer for any qualified
project.
‘‘(j) QUALIFIED
PROJECT.—For purposes of this
section—
‘‘(1) IN GENERAL.—The term ‘qualified project’
means—
‘‘(A) the acquisition, financing, or refi-
nancing of equipment, rolling stock, and other
capital improvements (including the introduc-
tion of new high-speed technologies such as mag-
netic levitation systems), including track or sig-
nal improvements or the elimination of grade
crossings, for the northeast rail corridor between
Washington, D.C., and Boston, Massachusetts,
‘‘(B) the acquisition, financing, or refi-
nancing of equipment, rolling stock, and other
capital improvements (including the introduc-
tion of new high-speed technologies such as mag-
netic levitation systems), including development
of intermodal facilities, track or signal improve-
ments, or the elimination of grade crossings, for
the improvement of train speeds or safety (or
both) on the high-speed rail corridors designated
200
under section 104(d)(2) of title 23, United States
Code, as in effect on the date of the enactment
of this section,
‘‘(C) the acquisition, financing, or refi-
nancing of equipment, rolling stock, and other
capital improvements, including station rehabili-
tation or construction, development of inter-
modal facilities, track or signal improvements,
or the elimination of grade crossings, for the im-
provement of train speeds or safety (or both) for
other intercity passenger rail corridors and for
the Alaska Railroad, and
‘‘(D) construction, installation of facilities,
performance of railroad force account work, and
environmental impact studies that facilitate and
maximize intercity and regional rail system ca-
pacity and connectivity intended to benefit all
users, including the National Passenger Rail
Corporation, related to the construction of the
Trans Hudson Tunnel, an additional railroad
passenger tunnel connecting Newark, New Jersey
to the City of New York, New York.
‘‘(2) REFINANCING
RULES.—For purposes of
paragraph (1), a refinancing shall constitute a quali-
fied project only if the indebtedness being refinanced
201
(including any obligation directly or indirectly refi-
nanced by such indebtedness) was originally incurred
by the issuer—
‘‘(A) after the date of the enactment of this
section,
‘‘(B) for a term of not more than 3 years,
‘‘(C) to finance or acquire capital improve-
ments described in paragraph (1), and
‘‘(D) in anticipation of being refinanced
with proceeds of a qualified Amtrak bond.
‘‘(k) STATE CONTRIBUTION REQUIREMENTS.—
‘‘(1) IN GENERAL.—For purposes of subsection
(e)(4), the State contribution requirement of this sub-
section is met with respect to any qualified project if
the National Railroad Passenger Corporation has re-
ceived from 1 or more States, not later than the date
of issuance of the bond, matching contributions of not
less than 20 percent of the cost of the qualified project.
‘‘(2) NO
STATE
CONTRIBUTION
REQUIREMENT
FOR CERTAIN QUALIFIED PROJECTS.—The State con-
tribution requirement of this subsection is zero with
respect to any project described in subsection (j)(1)(C)
for the Alaska Railroad.
‘‘(3) STATE MATCHING CONTRIBUTIONS MAY NOT
INCLUDE FEDERAL FUNDS.—For purposes of this sub-
202
section, State matching contributions shall not be de-
rived, directly or indirectly, from Federal funds, in-
cluding any transfers from the Highway Trust Fund
under section 9503.
‘‘(l) DEPARTMENT
OF TRANSPORTATION APPROVAL
FOR QUALIFIED PROJECTS.—
‘‘(1) IN GENERAL.—The written approval of a
qualified project by the Secretary of Transportation
required for purposes of subsection (e)(5) shall
include—
‘‘(A) the finding by the Inspector General of
the Department of Transportation described in
paragraph (2),
‘‘(B) the certification by the Secretary of
Transportation described in paragraph (3), and
‘‘(C) the agreement by the National Rail-
road Passenger Corporation described in para-
graph (4).
‘‘(2) FINDING
BY
INSPECTOR
GENERAL.—For
purposes of paragraph (1), the finding described in
this paragraph is a finding by the Inspector General
of the Department of Transportation that there is a
reasonable likelihood that the proposed project will re-
sult in a positive financial contribution to the Na-
tional Railroad Passenger Corporation and that the
203
investment evaluation process includes consideration
of a return on investment, leveraging of funds (in-
cluding State capital and operating contributions),
cost effectiveness, safety improvement, mobility im-
provement, and feasibility.
‘‘(3) CERTIFICATION.—For purposes of para-
graph (1), the certification described in this para-
graph is a certification by the Secretary of Transpor-
tation that the issuer of the qualified Amtrak bond—
‘‘(A) except with respect to projects de-
scribed in subsection (j)(1)(C), has entered into
a written agreement with the owners of rail
properties which are to be improved by the
project to be funded by the qualified Amtrak
bond, as to the scope and estimated cost of such
project and the impact on rail freight capacity,
and
‘‘(B) has met the State contribution require-
ments described in subsection (k).
The National Railroad Passenger Corporation shall
not exercise its rights under section 24308(a)(2) of
title 49, United States Code, to resolve disputes with
respect to a project to be funded by a qualified Am-
trak bond, or with respect to the cost of such a project,
204
unless the project is intended to result in railroad
speeds of 79 miles per hour or less.
‘‘(4) AGREEMENT BY AMTRAK TO ISSUE ADDI-
TIONAL
BONDS
FOR
PROJECTS
OF
OTHER
CAR-
RIERS.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the agreement described in this para-
graph is an agreement by the National Railroad
Passenger Corporation with the Secretary of
Transportation to issue bonds which meet the re-
quirements of this section for use in financing
projects described in subparagraph (B).
‘‘(B) PROJECTS COVERED.—For purposes of
subparagraph (A), the projects described in this
subparagraph are any project described in sub-
section (j)(1)(B) or (j)(1)(C) for an intercity rail
passenger carrier other than the National Rail-
road Passenger Corporation or for the Alaska
Railroad.
‘‘(C) RESPONSIBILITY OF INTERCITY RAIL
PASSENGER CARRIER.—Any project financed by
bonds referred to in subparagraph (A) shall be
carried out by the intercity rail passenger car-
rier other than the National Railroad Passenger
Corporation, through a contract entered into by
205
the National Railroad Passenger Corporation
with such carrier.
‘‘(D) INTERCITY RAIL PASSENGER CARRIER
DEFINED.—For purposes of this paragraph, the
term ‘intercity rail passenger carrier’ means any
rail carrier (as defined in section 24102(7) of
such title 49, as in effect on the date of the enact-
ment of this section) which is part of the inter-
state system of rail transportation and which
provides intercity rail passenger transportation
(as defined in section 24102(5) of such title 49
(as so in effect)).
‘‘(5) ADDITIONAL SELECTION CRITERIA.—In de-
termining projects to be approved under this sub-
section (other than projects for the Alaska Railroad),
or to be included in an agreement under paragraph
(4), the Secretary of Transportation—
‘‘(A) shall base such approval on—
‘‘(i) the results of alternatives analysis
and preliminary engineering, and
‘‘(ii) a comprehensive review of mobil-
ity improvements, environmental benefits,
cost effectiveness, and operating efficiencies,
and
‘‘(B) shall give preference to—
206
‘‘(i) projects supported by evidence of
stable and dependable financing sources to
construct, maintain, and operate the system
or extension,
‘‘(ii) projects expected to have a sig-
nificant impact on air traffic congestion,
‘‘(iii) projects expected to also improve
commuter rail operations,
‘‘(iv) projects that anticipate fares de-
signed to recover costs and generate a re-
turn on investment, and
‘‘(v) projects that promote regional bal-
ance in infrastructure investment and the
national interest in ensuring the develop-
ment of a nationwide high-speed rail trans-
portation network.
‘‘(m) OTHER DEFINITIONS AND SPECIAL RULES.—For
purposes of this section—
‘‘(1) BOND.—The term ‘bond’ includes any obli-
gation.
‘‘(2) TREATMENT
OF
CHANGES
IN
USE.—For
purposes of subsection (e)(1), the proceeds from the
sale of an issue shall not be treated as used for a
qualified project to the extent that the issuer takes
any action within its control which causes such pro-
207
ceeds not to be used for a qualified project. The Sec-
retary shall specify remedial actions that may be
taken (including conditions to taking such remedial
actions) to prevent an action described in the pre-
ceding sentence from causing a bond to fail to be a
qualified Amtrak bond.
‘‘(3) PARTNERSHIP; S CORPORATION; AND OTHER
PASS-THRU ENTITIES.—In the case of a partnership,
trust, S corporation, or other pass-thru entity, rules
similar to the rules of section 41(g) shall apply with
respect to the credit allowable under subsection (a).
‘‘(4) BONDS HELD BY REGULATED INVESTMENT
COMPANIES.—If any qualified Amtrak bond is held by
a regulated investment company, the credit deter-
mined under subsection (a) shall be allowed to share-
holders of such company under procedures prescribed
by the Secretary.
‘‘(5) REPORTING.—Issuers of qualified Amtrak
bonds shall submit reports similar to the reports re-
quired under section 149(e).’’.
(b) AMENDMENTS TO OTHER CODE SECTIONS.—
(1) REPORTING.—Subsection (d) of section 6049
(relating to returns regarding payments of interest) is
amended by adding at the end the following new
paragraph:
208
‘‘(8) REPORTING OF CREDIT ON QUALIFIED AM-
TRAK BONDS.—
‘‘(A) IN GENERAL.—For purposes of sub-
section (a), the term ‘interest’ includes amounts
includible in gross income under section 54(d)
and such amounts shall be treated as paid on the
credit allowance date (as defined in section
54(b)(4)).
‘‘(B) REPORTING TO CORPORATIONS, ETC.—
Except as otherwise provided in regulations, in
the case of any interest described in subpara-
graph (A), subsection (b)(4) shall be applied
without regard to subparagraphs (A), (H), (I),
(J), (K), and (L)(i) of such subsection.
‘‘(C) REGULATORY
AUTHORITY.—The Sec-
retary may prescribe such regulations as are nec-
essary or appropriate to carry out the purposes
of this paragraph, including regulations which
require more frequent or more detailed report-
ing.’’.
(2) TREATMENT
FOR
ESTIMATED
TAX
PUR-
POSES.—
(A) INDIVIDUAL.—Section 6654 (relating to
failure by individual to pay estimated income
tax) is amended by redesignating subsection (m)
209
as subsection (n) and by inserting after sub-
section (l) the following new subsection:
‘‘(m) SPECIAL RULE FOR HOLDERS OF QUALIFIED
AMTRAK BONDS.—For purposes of this section, the credit
allowed by section 54 to a taxpayer by reason of holding
a qualified Amtrak bond on a credit allowance date shall
be treated as if it were a payment of estimated tax made
by the taxpayer on such date.’’.
(B) CORPORATE.—Section 6655 (relating to
failure by corporation to pay estimated income
tax) is amended by adding at the end of sub-
section (g) the following new paragraph:
‘‘(5) SPECIAL RULE FOR HOLDERS OF QUALIFIED
AMTRAK BONDS.—For purposes of this section, the
credit allowed by section 54 to a taxpayer by reason
of holding a qualified Amtrak bond on a credit allow-
ance date shall be treated as if it were a payment of
estimated tax made by the taxpayer on such date.’’.
(3) EXCLUSION FROM GROSS INCOME OF CON-
TRIBUTIONS
BY
AMTRAK
TO
OTHER
RAIL
CAR-
RIERS.—
(A) IN GENERAL.—Section 118 (relating to
contributions to the capital of a corporation) is
amended by redesignating subsection (d) as sub-
210
section (e) and by inserting after subsection (c)
the following new subsection:
‘‘(d) SPECIAL RULE FOR CONTRIBUTIONS BY AMTRAK
TO OTHER RAIL CARRIERS.—For purposes of this section,
the term ‘contribution to the capital of the taxpayer’ in-
cludes any contribution by the National Railroad Passenger
Corporation of personal or real property funded by the pro-
ceeds of qualified Amtrak bonds under section 54.’’.
(B) CONFORMING AMENDMENT.—Subsection
(b) of such section 118 is amended by striking
‘‘subsection (c)’’ and inserting ‘‘subsections (c)
and (d)’’.
(4) PROTECTION OF HIGHWAY TRUST FUND.—
Section 9503 (relating to Highway Trust Fund) is
amended by adding at the end the following new sub-
section:
‘‘(g) SPECIAL RULES RELATING TO NATIONAL RAIL-
ROAD PASSENGER CORPORATION.—
‘‘(1) IN GENERAL.—Except as provided in sub-
section (c), as in effect on the date of the enactment
of this subsection, amounts in the Highway Trust
Fund may not be used, either directly or indirectly
through a State or local transit authority, to provide
funds to the National Railroad Passenger Corporation
for any purpose, including issuance of any qualified
211
Amtrak bond pursuant to section 54. The preceding
sentence may not be waived by any provision of law
which is not contained or referenced in this title,
whether such provision of law is a subsequently en-
acted provision or directly or indirectly seeks to waive
the application of such sentence.
‘‘(2) CERTIFICATION BY THE SECRETARY.—The
issuance of any qualified Amtrak bonds by the Na-
tional Railroad Passenger Corporation pursuant to
section 54 is conditioned on certification by the Sec-
retary, after consultation with the Secretary of Trans-
portation, within 30 days of a request by the issuer,
that with respect to funds of the Highway Trust Fund
described under paragraph (1), the issuer either—
‘‘(A) has not received such funds during cal-
endar years commencing with 2002 and ending
before the calendar year the bonds are issued, or
‘‘(B) has repaid to the Highway Trust
Fund any such funds which were received during
such calendar years.
‘‘(3) NO RETROACTIVE EFFECT.—Nothing in this
subsection shall adversely affect the entitlement of the
holders of qualified Amtrak bonds to the tax credit al-
lowed pursuant to section 54 or to repayment of prin-
cipal upon maturity.’’.
212
(c) CLERICAL AMENDMENTS.—
(1) The table of subparts for part IV of sub-
chapter A of chapter 1 is amended by adding at the
end the following new item:
‘‘Subpart H. Nonrefundable Credit for Holders of Qualified Amtrak
Bonds.’’.
(2) Section 6401(b)(1) is amended by striking
‘‘and G’’ and inserting ‘‘G, and H’’.
(d) ANNUAL REPORT
BY TREASURY
ON AMTRAK
TRUST ACCOUNT.—The Secretary of the Treasury shall an-
nually report to Congress as to whether the amount depos-
ited in the trust account established by the National Rail-
road Passenger Corporation under section 54(i) of the In-
ternal Revenue Code of 1986, as added by this section, is
sufficient to fully repay at maturity the principal of any
outstanding qualified Amtrak bonds issued pursuant to sec-
tion 54 of such Code (as so added), together with amounts
expected to be deposited into such account, as certified by
the National Railroad Passenger Corporation in accordance
with procedures prescribed by the Secretary of the Treasury.
(e) EFFECTIVE DATE.—The amendments made by this
section shall apply to obligations issued after the date of
the enactment of this Act.
(f) MULTI-YEAR CAPITAL SPENDING PLAN AND OVER-
SIGHT.—
(1) AMTRAK CAPITAL SPENDING PLAN.—
213
(A) IN GENERAL.—The National Railroad
Passenger Corporation shall annually submit to
the President and Congress a multi-year capital
spending plan, as approved by the Board of Di-
rectors of the Corporation.
(B) CONTENTS OF PLAN.—Such plan shall
identify the capital investment needs of the Cor-
poration over a period of not less than 5 years
and the funding sources available to finance such
needs and shall prioritize such needs according
to corporate goals and strategies.
(C) INITIAL SUBMISSION DATE.—The first
plan shall be submitted before the issuance of
any qualified Amtrak bonds by the National
Railroad Passenger Corporation pursuant to sec-
tion 54 of the Internal Revenue Code of 1986 (as
added by this section).
(2) OVERSIGHT OF AMTRAK TRUST ACCOUNT AND
QUALIFIED PROJECTS.—
(A) TRUST ACCOUNT OVERSIGHT.—The Sec-
retary of the Treasury shall annually report to
Congress as to whether the amount deposited in
the trust account established by the National
Railroad Passenger Corporation under section
54(i) of such Code (as so added) is sufficient to
214
fully repay at maturity the principal of any out-
standing qualified Amtrak bonds issued pursu-
ant to section 54 of such Code (as so added), to-
gether with amounts expected to be deposited into
such account, as certified by the National Rail-
road Passenger Corporation in accordance with
procedures prescribed by the Secretary of the
Treasury.
(B) PROJECT
OVERSIGHT.—The National
Railroad Passenger Corporation shall contract
for an annual independent assessment of the
costs and benefits of the qualified projects fi-
nanced by such qualified Amtrak bonds, includ-
ing an assessment of the investment evaluation
process of the Corporation. The annual assess-
ment shall be included in the plan submitted
under paragraph (1).
SEC. 902. BROADBAND INTERNET ACCESS TAX CREDIT.
(a) IN GENERAL.—Subpart E of part IV of chapter
1 (relating to rules for computing investment credit) is
amended by inserting after section 48 the following:
‘‘SEC. 48A. BROADBAND CREDIT.
‘‘(a) GENERAL RULE.—For purposes of section 46, the
broadband credit for any taxable year is the sum of—
215
‘‘(1) the current generation broadband credit,
plus
‘‘(2) the next generation broadband credit.
‘‘(b) CURRENT GENERATION BROADBAND CREDIT;
NEXT GENERATION BROADBAND CREDIT.—For purposes of
this section—
‘‘(1) CURRENT GENERATION BROADBAND CRED-
IT.—The current generation broadband credit for any
taxable year is equal to 10 percent of the qualified ex-
penditures incurred with respect to qualified equip-
ment providing current generation broadband services
to qualified subscribers and taken into account with
respect to such taxable year.
‘‘(2) NEXT GENERATION BROADBAND CREDIT.—
The next generation broadband credit for any taxable
year is equal to 20 percent of the qualified expendi-
tures incurred with respect to qualified equipment
providing next generation broadband services to
qualified subscribers and taken into account with re-
spect to such taxable year.
‘‘(c) WHEN EXPENDITURES TAKEN INTO ACCOUNT.—
For purposes of this section—
‘‘(1) IN GENERAL.—Qualified expenditures with
respect to qualified equipment shall be taken into ac-
216
count with respect to the first taxable year in
which—
‘‘(A) current generation broadband services
are provided through such equipment to qualified
subscribers, or
‘‘(B) next generation broadband services are
provided through such equipment to qualified
subscribers.
‘‘(2) LIMITATION.—
‘‘(A) IN GENERAL.—Qualified expenditures
shall be taken into account under paragraph (1)
only with respect to qualified equipment—
‘‘(i) the original use of which com-
mences with the taxpayer, and
‘‘(ii) which is placed in service,
after December 31, 2001.
‘‘(B) LEASED EQUIPMENT.—Except as pro-
vided in regulations, rules similar to the rules of
section 203(b)(3) of the Tax Reform Act of 1986
shall apply.
‘‘(d) SPECIAL ALLOCATION RULES.—
‘‘(1) CURRENT GENERATION BROADBAND SERV-
ICES.—For purposes of determining the current gen-
eration broadband credit under subsection (a)(1) with
respect to qualified equipment through which current
217
generation broadband services are provided, if the
qualified equipment is capable of serving both quali-
fied subscribers and other subscribers, the qualified ex-
penditures shall be multiplied by a fraction—
‘‘(A) the numerator of which is the sum of
the number of potential qualified subscribers
within the rural areas and the underserved areas
which the equipment is capable of serving with
current generation broadband services, and
‘‘(B) the denominator of which is the total
potential subscriber population of the area which
the equipment is capable of serving with current
generation broadband services.
‘‘(2) NEXT
GENERATION
BROADBAND
SERV-
ICES.—For purposes of determining the next genera-
tion broadband credit under subsection (a)(2) with re-
spect to qualified equipment through which next gen-
eration broadband services are provided, if the quali-
fied equipment is capable of serving both qualified
subscribers and other subscribers, the qualified ex-
penditures shall be multiplied by a fraction—
‘‘(A) the numerator of which is the sum
of—
218
‘‘(i) the number of potential qualified
subscribers within the rural areas and un-
derserved areas, plus
‘‘(ii) the number of potential qualified
subscribers within the area consisting only
of residential subscribers not described in
clause (i),
which the equipment is capable of serving with
next generation broadband services, and
‘‘(B) the denominator of which is the total
potential subscriber population of the area which
the equipment is capable of serving with next
generation broadband services.
‘‘(e) DEFINITIONS.—For purposes of this section—
‘‘(1) ANTENNA.—The term ‘antenna’ means any
device used to transmit or receive signals through the
electromagnetic spectrum, including satellite equip-
ment.
‘‘(2) CABLE OPERATOR.—The term ‘cable oper-
ator’ has the meaning given such term by section
602(5) of the Communications Act of 1934 (47 U.S.C.
522(5)).
‘‘(3) COMMERCIAL MOBILE SERVICE CARRIER.—
The term ‘commercial mobile service carrier’ means
any person authorized to provide commercial mobile
219
radio service as defined in section 20.3 of title 47,
Code of Federal Regulations.
‘‘(4) CURRENT GENERATION BROADBAND SERV-
ICE.—The term ‘current generation broadband serv-
ice’ means the transmission of signals at a rate of at
least 1,000,000 bits per second to the subscriber and
at least 128,000 bits per second from the subscriber.
‘‘(5) MULTIPLEXING OR DEMULTIPLEXING.—The
term ‘multiplexing’ means the transmission of 2 or
more signals over a single channel, and the term
‘demultiplexing’ means the separation of 2 or more
signals previously combined by compatible multi-
plexing equipment.
‘‘(6) NEXT GENERATION BROADBAND SERVICE.—
The term ‘next generation broadband service’ means
the transmission of signals at a rate of at least
22,000,000 bits per second to the subscriber and at
least 5,000,000 bits per second from the subscriber.
‘‘(7) NONRESIDENTIAL SUBSCRIBER.—The term
‘nonresidential subscriber’ means a person who pur-
chases broadband services which are delivered to the
permanent place of business of such person.
‘‘(8) OPEN VIDEO SYSTEM OPERATOR.—The term
‘open video system operator’ means any person au-
220
thorized to provide service under section 653 of the
Communications Act of 1934 (47 U.S.C. 573).
‘‘(9) OTHER
WIRELESS
CARRIER.—The term
‘other wireless carrier’ means any person (other than
a telecommunications carrier, commercial mobile
service carrier, cable operator, open video system op-
erator, or satellite carrier) providing current genera-
tion broadband services or next generation broadband
service to subscribers through the radio transmission
of energy.
‘‘(10) PACKET
SWITCHING.—The term ‘packet
switching’ means controlling or routing the path of a
digitized transmission signal which is assembled into
packets or cells.
‘‘(11) PROVIDER.—The term ‘provider’ means,
with respect to any qualified equipment—
‘‘(A) a cable operator,
‘‘(B) a commercial mobile service carrier,
‘‘(C) an open video system operator,
‘‘(D) a satellite carrier,
‘‘(E) a telecommunications carrier, or
‘‘(F) any other wireless carrier,
providing current generation broadband services or
next generation broadband services to subscribers
through such qualified equipment.
221
‘‘(12) PROVISION
OF
SERVICES.—A provider
shall be treated as providing services to a subscriber
if—
‘‘(A) a subscriber has been passed by the
provider’s equipment and can be connected to
such equipment for a standard connection fee,
‘‘(B) the provider is physically able to de-
liver current generation broadband services or
next generation broadband services, as applica-
ble, to such subscribers without making more
than an insignificant investment with respect to
any such subscriber,
‘‘(C) the provider has made reasonable ef-
forts to make such subscribers aware of the avail-
ability of such services,
‘‘(D) such services have been purchased by
one or more such subscribers, and
‘‘(E) such services are made available to
such subscribers at average prices comparable to
those at which the provider makes available
similar services in any areas in which the pro-
vider makes available such services.
‘‘(13) QUALIFIED EQUIPMENT.—
‘‘(A) IN
GENERAL.—The term ‘qualified
equipment’ means equipment which provides
222
current generation broadband services or next
generation broadband services—
‘‘(i) at least a majority of the time
during periods of maximum demand to
each subscriber who is utilizing such serv-
ices, and
‘‘(ii) in a manner substantially the
same as such services are provided by the
provider to subscribers through equipment
with respect to which no credit is allowed
under subsection (a)(1).
‘‘(B) ONLY
CERTAIN
INVESTMENT
TAKEN
INTO ACCOUNT.—Except as provided in subpara-
graph (C) or (D), equipment shall be taken into
account under subparagraph (A) only to the ex-
tent it—
‘‘(i) extends from the last point of
switching to the outside of the unit, build-
ing, dwelling, or office owned or leased by
a subscriber in the case of a telecommuni-
cations carrier,
‘‘(ii) extends from the customer side of
the mobile telephone switching office to a
transmission/receive 
antenna 
(including
such antenna) owned or leased by a sub-
223
scriber in the case of a commercial mobile
service carrier,
‘‘(iii) extends from the customer side of
the headend to the outside of the unit, build-
ing, dwelling, or office owned or leased by
a subscriber in the case of a cable operator
or open video system operator, or
‘‘(iv) extends from a transmission/re-
ceive antenna (including such antenna)
which transmits and receives signals to or
from multiple subscribers to a transmission/
receive antenna (including such antenna)
on the outside of the unit, building, dwell-
ing, or office owned or leased by a sub-
scriber in the case of a satellite carrier or
other wireless carrier, unless such other
wireless carrier is also a telecommuni-
cations carrier.
‘‘(C) PACKET
SWITCHING
EQUIPMENT.—
Packet switching equipment, regardless of loca-
tion, shall be taken into account under subpara-
graph (A) only if it is deployed in connection
with equipment described in subparagraph (B)
and is uniquely designed to perform the function
of packet switching for current generation
225
qualified equipment (including any up-
grades thereto) for which depreciation is al-
lowable under section 168, and
‘‘(ii) incurred after December 31, 2001,
and before January 1, 2003.
‘‘(B) CERTAIN
SATELLITE
EXPENDITURES
EXCLUDED.—Such term shall not include any
expenditure with respect to the launching of any
satellite equipment.
‘‘(15) 
QUALIFIED
SUBSCRIBER.—The 
term
‘qualified subscriber’ means—
‘‘(A) with respect to the provision of current
generation broadband services—
‘‘(i) a nonresidential subscriber main-
taining a permanent place of business in a
rural area or underserved area, or
‘‘(ii) a residential subscriber residing
in a dwelling located in a rural area or un-
derserved area which is not a saturated
market, and
‘‘(B) with respect to the provision of next
generation broadband services—
‘‘(i) a nonresidential subscriber main-
taining a permanent place of business in a
rural area or underserved area, or
226
‘‘(ii) a residential subscriber.
‘‘(16) RESIDENTIAL
SUBSCRIBER.—The term
‘residential subscriber’ means an individual who pur-
chases broadband services which are delivered to such
individual’s dwelling.
‘‘(17) RURAL
AREA.—The term ‘rural area’
means any census tract which—
‘‘(A) is not within 10 miles of any incor-
porated or census designated place containing
more than 25,000 people, and
‘‘(B) is not within a county or county
equivalent which has an overall population den-
sity of more than 500 people per square mile of
land.
‘‘(18) RURAL
SUBSCRIBER.—The term ‘rural
subscriber’ means a residential subscriber residing in
a dwelling located in a rural area or nonresidential
subscriber maintaining a permanent place of business
located in a rural area.
‘‘(19) SATELLITE CARRIER.—The term ‘satellite
carrier’ means any person using the facilities of a
satellite or satellite service licensed by the Federal
Communications Commission and operating in the
Fixed-Satellite Service under part 25 of title 47 of the
Code of Federal Regulations or the Direct Broadcast
227
Satellite Service under part 100 of title 47 of such
Code to establish and operate a channel of commu-
nications for distribution of signals, and owning or
leasing a capacity or service on a satellite in order
to provide such distribution.
‘‘(20) SATURATED
MARKET.—The term ‘satu-
rated market’ means any census tract in which, as of
the date of the enactment of this section—
‘‘(A) current generation broadband services
have been provided by one or more providers to
85 percent or more of the total number of poten-
tial residential subscribers residing in dwellings
located within such census tract, and
‘‘(B) such services can be utilized—
‘‘(i) at least a majority of the time
during periods of maximum demand by
each such subscriber who is utilizing such
services, and
‘‘(ii) in a manner substantially the
same as such services are provided by the
provider to subscribers through equipment
with respect to which no credit is allowed
under subsection (a)(1).
‘‘(21) 
SUBSCRIBER.—The 
term 
‘subscriber’
means a person who purchases current generation
228
broadband services or next generation broadband serv-
ices.
‘‘(22) 
TELECOMMUNICATIONS
CARRIER.—The
term ‘telecommunications carrier’ has the meaning
given such term by section 3(44) of the Communica-
tions Act of 1934 (47 U.S.C. 153(44)), but—
‘‘(A) includes all members of an affiliated
group of which a telecommunications carrier is
a member, and
‘‘(B) does not include a commercial mobile
service carrier.
‘‘(23) TOTAL
POTENTIAL
SUBSCRIBER
POPU-
LATION.—The term ‘total potential subscriber popu-
lation’ means, with respect to any area and based on
the most recent census data, the total number of po-
tential residential subscribers residing in dwellings
located in such area and potential nonresidential sub-
scribers maintaining permanent places of business lo-
cated in such area.
‘‘(24) UNDERSERVED AREA.—The term ‘under-
served area’ means any census tract which is located
in—
‘‘(A) an empowerment zone or enterprise
community designated under section 1391,
229
‘‘(B) the District of Columbia Enterprise
Zone established under section 1400,
‘‘(C) a renewal community designated
under section 1400E, or
‘‘(D) a low-income community designated
under section 45D.
‘‘(25) UNDERSERVED
SUBSCRIBER.—The term
‘underserved subscriber’ means a residential sub-
scriber residing in a dwelling located in an under-
served area or nonresidential subscriber maintaining
a permanent place of business located in an under-
served area.
‘‘(f) DESIGNATION
OF CENSUS TRACTS.—The Sec-
retary shall, not later than 90 days after the date of the
enactment of this section, designate and publish those census
tracts meeting the criteria described in paragraphs (17),
(20), and (24) of subsection (e). In making such designa-
tions, the Secretary shall consult with such other depart-
ments and agencies as the Secretary determines appro-
priate.’’.
(b) CREDIT TO BE PART OF INVESTMENT CREDIT.—
Section 46 (relating to the amount of investment credit) is
amended by striking ‘‘and’’ at the end of paragraph (2),
by striking the period at the end of paragraph (3) and in-
serting ‘‘, and’’, and by adding at the end the following:
230
‘‘(4) the broadband credit.’’
(c) SPECIAL RULE FOR MUTUAL OR COOPERATIVE
TELEPHONE COMPANIES.—Section 501(c)(12)(B) (relating
to list of exempt organizations) is amended by striking ‘‘or’’
at the end of clause (iii), by striking the period at the end
of clause (iv) and inserting ‘‘, or’’, and by adding at the
end the following:
‘‘(v) from the sale of property subject to
a lease described in section 48A(c)(2)(B),
but only to the extent such income does not
in any year exceed an amount equal to the
credit for qualified expenditures which
would be determined under section 48A for
such year if the mutual or cooperative tele-
phone company was not exempt from tax-
ation and was treated as the owner of the
property subject to such lease.’’.
(d) CONFORMING AMENDMENT.—The table of sections
for subpart E of part IV of subchapter A of chapter 1 is
amended by inserting after the item relating to section 48
the following:
‘‘Sec. 48A. Broadband credit.’’.
(e) REGULATORY MATTERS.—
(1) PROHIBITION.—No Federal or State agency
or instrumentality shall adopt regulations or rate-
making procedures that would have the effect of con-
231
fiscating any credit or portion thereof allowed under
section 48A of the Internal Revenue Code of 1986 (as
added by this section) or otherwise subverting the
purpose of this section.
(2) TREASURY REGULATORY AUTHORITY.—It is
the intent of Congress in providing the broadband
credit under section 48A of the Internal Revenue Code
of 1986 (as added by this section) to provide incen-
tives for the purchase, installation, and connection of
equipment and facilities offering expanded broadband
access to the Internet for users in certain low income
and rural areas of the United States, as well as to
residential users nationwide, in a manner that main-
tains competitive neutrality among the various classes
of providers of broadband services. Accordingly, the
Secretary of the Treasury shall prescribe such regula-
tions as may be necessary or appropriate to carry out
the purposes of section 48A of such Code, including—
(A) regulations to determine how and when
a taxpayer that incurs qualified expenditures
satisfies the requirements of section 48A of such
Code to provide broadband services, and
(B) regulations describing the information,
records, and data taxpayers are required to pro-
vide the Secretary to substantiate compliance
232
with the requirements of section 48A of such
Code.
Until the Secretary prescribes such regulations, tax-
payers may base such determinations on any reason-
able method that is consistent with the purposes of
section 48A of such Code.
(f) EFFECTIVE DATE.—The amendments made by this
section shall apply to expenditures incurred after December
31, 2001, and before January 1, 2003.
SEC. 903. CITRUS TREE CANKER RELIEF.
(a) EXPANSION
OF PERIOD WITHIN WHICH CON-
VERTED CITRUS TREE PROPERTY MUST BE REPLACED.—
(1) IN GENERAL.—Section 1033 (relating to pe-
riod within which property must be replaced) is
amended by redesignating subsection (k) as subsection
(l) and by inserting after subsection (j) the following
new subsection:
‘‘(k) COMMERCIAL TREES DESTROYED BECAUSE OF
CITRUS TREE CANKER.—In the case of commercial citrus
trees which are compulsorily or involuntarily converted
under a public order as a result of the citrus tree canker,
clause (i) of subsection (a)(2)(B) shall be applied as if such
clause reads: ‘4 years after the close of the taxable year in
which a State or Federal plant health authority determines
233
that the land on which such trees grew is free from the bac-
teria that causes citrus tree canker’.’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall apply to taxable years begin-
ning before, on, or after the date of the enactment of
this Act.
(b) 10-YEAR RATABLE INCOME INCLUSION FOR CIT-
RUS CANKER TREE PAYMENTS.—
(1) IN GENERAL.—Part I of subchapter Q of
chapter 1 (relating to income averaging) is amended
by inserting after section 1301 the following new sec-
tion:
‘‘SEC. 1302. 10-YEAR RATABLE INCOME INCLUSION FOR CIT-
RUS CANKER TREE PAYMENTS.
‘‘(a) IN GENERAL.—At the election of the taxpayer,
any amount taken into account as income or gain by reason
of receiving a citrus canker tree payment shall be included
in the income of the taxpayer ratably over the 10–year pe-
riod beginning with the taxable year in which the payment
is received or accrued by the taxpayer. Any election under
the preceding sentence shall be irrevocable.
‘‘(b) CITRUS CANKER TREE PAYMENT.—For purposes
of subsection (a), the term ‘citrus canker tree payment’
means a payment made to an owner of a commercial citrus
grove to recover income that was lost as a result of the re-
234
moval of commercial citrus trees to control canker under
the amendments to the citrus canker regulations (7 C.F.R.
301) made by the final rule published in the Federal Reg-
ister by the Secretary of Agriculture on June 18, 2001 (66
Fed. Reg. 32713, Docket No. 00-37-4).’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for part I of subchapter Q of chapter 1 is
amended by inserting after the item relating to sec-
tion 1301 the following new item:
‘‘Sec. 1302. 10-year ratable income inclusion for citrus canker tree pay-
ments.’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to payments made be-
fore, on, or after the date of the enactment of this Act.
SEC. 904. ALLOWANCE OF ELECTRONIC 1099S.
Except as otherwise provided by the Secretary of the
Treasury, any person required to furnish a statement under
any section of subpart B of part III of subchapter A of
chapter 61 of the Internal Revenue Code of 1986 for any
taxable year ending after the date of the enactment of this
Act and before January 1, 2003, may electronically furnish
such statement to any recipient who has consented to the
electronic provision of the statement in a manner similar
to the one permitted under regulations issued under section
6051 of such Code or in such other manner as provided
by the Secretary.
235
SEC. 905. CLARIFICATION OF EXCISE TAX EXEMPTIONS FOR
AGRICULTURAL AERIAL APPLICATORS.
(a) NO WAIVER BY FARM OWNER, TENANT, OR OPER-
ATOR
NECESSARY.—Subparagraph 
(B) 
of 
section
6420(c)(4) (relating to certain farming use other than by
owner, etc.) is amended to read as follows:
‘‘(B) if the person so using the gasoline is
an aerial or other applicator of fertilizers or
other substances and is the ultimate purchaser of
the gasoline, then subparagraph (A) of this para-
graph shall not apply and the aerial or other ap-
plicator shall be treated as having used such gas-
oline on a farm for farming purposes.’’.
(b) EXEMPTION INCLUDES FUEL USED BETWEEN AIR-
FIELD AND FARM.—Section 6420(c)(4), as amended by sub-
section (a), is amended by adding at the end the following
new flush sentence:
‘‘For purposes of this paragraph, in the case of an
aerial applicator, gasoline shall be treated as used on
a farm for farming purposes if the gasoline is used
for the direct flight between the airfield and 1 or more
farms.’’.
(c) EXEMPTION FROM TAX ON AIR TRANSPORTATION
OF PERSONS FOR FORESTRY PURPOSES EXTENDED TO
FIXED-WING AIRCRAFT.—Subsection (f) of section 4261 (re-