
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 45USC1347]

 
                           TITLE 45--RAILROADS
 
                    CHAPTER 22--CONRAIL PRIVATIZATION
 
                         SUBCHAPTER II--CONRAIL
 
                    Part C--Miscellaneous Provisions
 
Sec. 1347. Tax treatment of Conrail public sale


(a) Treatment as new corporation

                           (1) In general

        For periods after the public sale, for purposes of title 26, 
    Conrail shall be treated as a new corporation which purchased all of 
    its assets as of the beginning of the day after the date of the 
    public sale for an amount equal to the deemed purchase price.

                     (2) Allocation among assets

        The deemed purchase price shall be allocated among the assets of 
    Conrail in accordance with the temporary regulations prescribed 
    under section 338 of title 26 (as such regulations were in effect on 
    October 21, 1986). The Secretary shall establish specific guidelines 
    for carrying out the preceding sentence so that the basis of each 
    asset will be clearly ascertainable. For purposes of applying the 
    regulations referred to in the first sentence, accounts receivable 
    and materials and supplies shall be treated as cash equivalents.

                      (3) Deemed purchase price

        For purposes of this subsection, the deemed purchase price is an 
    amount equal to the gross amount received pursuant to the public 
    sale, multiplied by a fraction--
            (A) the numerator of which is 100 percent, and
            (B) the denominator of which is the percentage (by value) of 
        the stock of Conrail sold in the public sale.

    The amount determined under the preceding sentence shall be adjusted 
    under regulations prescribed by the Secretary for liabilities of 
    Conrail and other relevant items.

(b) No income from cancellation of debt or preferred stock

    No amount shall be included in the gross income of any person by 
reason of any cancellation of any obligation (or preferred stock) of 
Conrail in connection with the public sale.

(c) Disallowance of certain deductions

    No deduction shall be allowed to Conrail for any amount which is 
paid after the date of the public sale to employees of Conrail for 
services performed on or before the date of the public sale.

(d) Waiver of certain employee stock ownership plan provisions

    For purposes of determining whether the employee stock ownership 
plans of Conrail meet the qualifications of sections 401 and 501 of 
title 26--
        (1) the limits of section 415 of such title (relating to 
    limitations on benefits and contributions under qualified plans) 
    shall not apply with respect to interests in stock transferred 
    pursuant to this Act or a law heretofore enacted, and
        (2) the 2-year waiting period for withdrawals shall not apply to 
    withdrawals of amounts (or shares) in participants accounts in 
    connection with the public sale.

(e) Definitions

    For purposes of this section--

                             (1) Conrail

        The term ``Conrail'' means the Consolidated Rail Corporation. 
    Such term includes any corporation which was a subsidiary of Conrail 
    immediately before the public sale.

                           (2) Public sale

        The term ``public sale'' means the sale of stock in Conrail 
    pursuant to a public offering under the Conrail Privatization Act 
    [45 U.S.C. 1301 et seq.]. If there is more than 1 public offering 
    under such Act, such term means the sale pursuant to the initial 
    public offering under such Act.

                            (3) Secretary

        The term ``Secretary'' means the Secretary of the Treasury or 
    his delegate.

(Pub. L. 99-509, title VIII, Sec. 8021, Oct. 21, 1986, 100 Stat. 1954; 
Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095.)

                       References in Text

    This Act, referred to in subsec. (d)(1), is Pub. L. 99-509, Oct. 21, 
1986, 100 Stat. 1874, as amended, known as the Omnibus Budget 
Reconciliation Act of 1986. For complete classification of this Act to 
the Code, see Tables.
    The Conrail Privatization Act, referred to in subsec. (e)(2), is 
subtitle A (Secs. 4001-4052) of title IV of Pub. L. 99-509, Oct. 21, 
1986, 100 Stat. 1892, which is classified principally to this chapter 
(Sec. 1301 et seq.). For complete classification of this Act to the 
Code, see Short Title note set out under section 1301 of this title and 
Tables.

                          Codification

    This section was enacted as part of the Omnibus Budget 
Reconciliation Act of 1986, and not as part of subtitle A of title IV of 
that Act, known as the Conrail Privatization Act, which comprises this 
chapter.


                               Amendments

    1986--Subsecs. (a)(1), (2), (d). Pub. L. 99-514 substituted 
``Internal Revenue Code of 1986'' for ``Internal Revenue Code of 1954'', 
which for purposes of codification was translated as ``title 26'' thus 
requiring no change in text.
