CA SB1287

Creates two tax credits for taxable years beginning January 1, 2026: 50% of qualified shortline railroad maintenance expenditures (capped at $5,000 per mile of track owned/leased) and 50% of qualified new rail infrastructure expenditures (capped at $1,000,000 per project)

Eligible taxpayers include Class II or Class III railroad owners operating in California and owners/lessees of rail sidings, industrial spurs, or industry tracks adjacent to California railroads

Caps annual aggregate credits at $7 million for shortline maintenance expenditures and $10 million for new rail infrastructure expenditures, with California Department of Transportation administering certification

Unused credits may be carried forward for up to five succeeding taxable years, and credits may be assigned to another taxpayer (but not reassigned)

Prioritizes new infrastructure projects serving industrial parks, ports, agricultural operations, advanced manufacturing, or environmentally sustainable businesses that reduce carbon emissions