subsection (b) with respect to credit allowance dates dur-
ing such year on which the taxpayer holds such bond. 
‘‘(b) AMOUNT OF CREDIT.— 
‘‘(1) IN GENERAL.—The amount of the credit 
determined under this subsection with respect to any 
credit allowance date for a qualified rail infrastruc-
ture bond is 25 percent of the annual credit deter-
mined with respect to such bond. 
‘‘(2) ANNUAL CREDIT.—The annual credit de-
termined with respect to any qualified rail infra-
structure 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 
market yield (as of the day before the date of sale 
of the issue) on outstanding long-term corporate 
debt obligations (determined under regulations pre-
scribed by the Secretary). 
‘‘(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. 
‘‘(5) SPECIAL RULE FOR ISSUANCE AND RE-
DEMPTION.—In the case of a bond which is issued 
during the 3-month period ending on a credit allow-
ance date, the amount of the credit determined 
under this subsection with respect to such credit al-
lowance date shall be a ratable portion of the credit 
otherwise determined based on the portion of the 3- 
month period during which the bond is outstanding. 
A similar rule shall apply when the bond is re-
deemed. 
‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.—The 
credit allowed under subsection (a) for any taxable year 
shall not exceed the excess of— 
‘‘(1) the sum of the regular tax liability (as de-
fined in section 26(b)) plus the tax imposed by sec-
tion 55, over 
‘‘(2) the sum of the credits allowable under this 
part (other than this subpart and subpart C).
‘‘(d) CREDIT INCLUDED IN GROSS INCOME.—Gross 
income includes the amount of the credit allowed to the 
taxpayer under this section (determined without regard to 
subsection (c)) and the amount so included shall be treat-
ed as interest income. 
‘‘(e) QUALIFIED RAIL INFRASTRUCTURE BOND.— 
For purposes of this part, the term ‘qualified rail infra-
structure bond’ means any bond issued as part of an issue 
if— 
‘‘(1) the bond is issued by the Rail Infrastruc-
ture Finance Corporation and is in registered form, 
‘‘(2) the term of each bond which is part of 
such issue does not exceed 20 years, 
‘‘(3) the payment of principal with respect to 
such bond is the obligation of the Rail Infrastruc-
ture Finance Corporation and not an obligation of 
the United States, 
‘‘(4) all proceeds from the sale of the issue are 
used for the purposes set forth in section 307(c)(5) 
of the True Reinvestment for Amtrak Infrastructure 
in the 21st Century Act, and 
‘‘(5) 95 percent or more of the net spendable 
proceeds from the sale of such issue are to be used 
for expenditures incurred after the date of enact-
ment of this section for any qualified project de-
scribed in section 201 or 202 of the True Reinvest-
ment for Amtrak Infrastructure in the 21st Century 
Act subject to the limitations established by that 
Act. 
‘‘(f) SPECIAL RULES RELATING TO NET SPENDABLE 
PROCEEDS.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
an issue shall be treated as meeting the require-
ments of this subsection if, as of 6 years after the 
date of issuance, the issuer reasonably expects— 
‘‘(A) to award grants under section 305(a) 
of the True Reinvestment for Amtrak Infra-
structure in the 21st Century Act in a total 
amount that is at least 95 percent of the net 
spendable proceeds of the issue for 1 or more 
qualified projects within the 6-year period be-
ginning on such date, 
‘‘(B) to incur a binding commitment with 
a third party— 
‘‘(i) to spend at least 10 percent of 
the net spendable proceeds of the issue, or 
to commence construction, with respect to 
such projects within the 12-month period 
beginning on such date, and
‘‘(ii) to proceed with due diligence to 
complete such projects, and 
‘‘(C) to expend the total amount of the net 
spendable proceeds of the issue. 
‘‘(2) RULES REGARDING CONTINUING COMPLI-
ANCE AFTER 6-YEAR DETERMINATION.—If at least 
95 percent of the net spendable proceeds of the issue 
is not awarded as grants to be expended for 1 or 
more qualified projects within the 6-year period be-
ginning 6 years after 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 paragraph (1) if either the require-
ment under subparagraph (A) or the requirements 
under subparagraph (B) are met, as follows: 
‘‘(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 
6-year period and disburses any remaining net 
spendable proceeds to the Secretary of Treasury 
within 30 days after the end of such 6-year pe-
riod. 
‘‘(B) The issuer— 
‘‘(i) awards in grants under section 
305(a) of the True Reinvestment for Am-
trak Infrastructure in the 21st Century 
Act at least 75 percent of the net spend-
able proceeds of the issue for 1 or more 
qualified projects within the 6-year period 
beginning 6 years after the date of 
issuance, and 
‘‘(ii) awards in grants under section 
305(a) of the True Reinvestment for Am-
trak Infrastructure in the 21st Century 
Act at least 95 percent of the net spend-
able proceeds of the issue for 1 or more 
qualified projects within the 7-year period 
beginning 6 years after the date of 
issuance. 
‘‘(g) RECAPTURE OF PORTION OF CREDIT WHERE 
CESSATION OF COMPLIANCE.— 
‘‘(1) IN GENERAL.—If any bond which when 
issued purported to be a qualified rail infrastructure 
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 
(determined without regard to subsection (c)) 
for taxable years ending during the calendar