(1) A credit against taxes imposed by ORS Chapter 316 (or, if the taxpayer is a corporation, under ORS Chapter 317 or 318) is allowed to a taxpayer, based upon short line railroad rehabilitation project costs actually paid or incurred by the taxpayer during the tax year for which the credit is claimed.

(2) The credit allowed under this section shall be the lesser of:

(a) $3,500 multiplied by the number of miles of short line railroad track the taxpayer owns or leases in this state on the day the short line railroad rehabilitation project is completed; or

(b) Fifty percent of the short line railroad rehabilitation project costs paid or incurred by the taxpayer during the tax year in which the credit is claimed.

(3) For the credit to be allowed under this section:

(a) The infrastructure must be located in Oregon; and

(b) The taxpayer must:

(A) Own or lease the infrastructure;

(B) Be a short line railroad; and

(C) Receive a final written certification from the Department of Transportation before claiming the credit.

(4) A credit under this section is not allowed for:

(a) Costs that are funded by or used to qualify for any state or federal grants.

(b) The amount that is equal to the greater of:

(A) Costs that are used to claim a federal tax credit under section 45G of the Internal Revenue Code; or

(B) The credit limitation set out in section 45G(b)(1) of the Internal Revenue Code, as applied to the taxpayer’s miles of short line railroad track in this state.

(5) The amount of the credit claimed under this section for any one tax year may not exceed the tax liability of the taxpayer.

(6) Any tax credit otherwise allowable under this section that is not used by the taxpayer in a particular tax year may be carried forward and offset against the taxpayer’s tax liability for the next succeeding tax year. Any credit remaining unused in that next succeeding tax year may be carried forward and used in the second succeeding tax year, and likewise, any credit not used in that second succeeding tax year may be carried forward and used in the third succeeding tax year, and likewise, any credit not used in that third succeeding tax year may be carried forward and used in the fourth succeeding tax year, and likewise, any credit not used in that fourth succeeding tax year may be carried forward and used in the fifth succeeding tax year but may not be carried forward for any tax year thereafter.

(7) The credit allowed under this section is not in lieu of any depreciation or amortization deduction for the short line railroad rehabilitation project to which the taxpayer otherwise may be entitled for purposes of ORS Chapter 316, 317 or 318 for the tax year.

(8) The taxpayer’s adjusted basis for determining gain or loss may not be decreased by any tax credit allowed under this section.

(9) The credit shall be claimed on a form prescribed by the Department of Revenue that contains the information required by the department.

(10) In the case of a credit allowed under this section:

(a) A nonresident shall be allowed the credit under this section in the proportion provided in ORS § 316.117.

(b) If a change in the status of a taxpayer from resident to nonresident or from nonresident to resident occurs, the credit allowed by this section shall be determined in a manner consistent with ORS § 316.117.

(c) If a change in the taxable year of a taxpayer occurs as described in ORS § 314.085, or if the Department of Revenue terminates a taxpayer’s taxable year under ORS § 314.440, the credit allowed under this section shall be prorated or computed in a manner consistent with ORS § 314.085.

(11) A person that has earned a tax credit under this section may transfer the credit to a taxpayer subject to tax under ORS Chapter 316, 317 or 318. The transfer must comply with ORS § 315.056.

(12) The Director of Transportation may order the suspension or revocation of a certification issued under this section, as provided in ORS § 315.061. [2019 c.579 § 8; 2021 c.528 § 25; 2023 c.545 § 2]

Section 17, chapter 579, Oregon Laws 2019, provides:

(1) ORS § 315.591 to 315.603 apply to tax years beginning on or after January 1, 2020, and before January 1, 2030.

(2) Except as provided in ORS § 315.593 (6), a credit may not be claimed under ORS § 315.593 for tax years beginning on or after January 1, 2030.

(3) The amendments to ORS § 315.591, 315.593 and 315.595 by sections 1 to 3 of this 2023 Act apply to tax years beginning on or after January 1, 2024, and before January 1, 2026. [2019 c.579 § 17; 2023 c.490 § 13; 2023 c.545 § 4]