II 

111TH CONGRESS 

1ST SESSION S. 238 

To provide $50,000,000,000 in new transportation infrastructure funding 

through bonding to empower States and local governments to complete 

significant infrastructure projects across all modes of transportation, 

including roads, bridges, rail and transit systems, ports, and inland 

waterways, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 7, 2009 

Mr. WYDEN (for himself, Mr. THUNE, Ms. KLOBUCHAR, and Ms. COLLINS) 

introduced the following bill; which was read twice and referred to the 

Committee on Finance 

A BILL 

To provide $50,000,000,000 in new transportation infrastructure funding through bonding to empower States 

and local governments to complete significant infrastructure projects across all modes of transportation, including roads, bridges, rail and transit systems, ports, and 

inland waterways, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; ETC. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Build America Bonds Act of 2009’’. 


wwoods2 on PRODPC68 with BILLS
2 

•S 238 IS

1 (b) REFERENCES TO INTERNAL REVENUE CODE OF

2 1986.—Except as otherwise expressly provided, whenever 

3 in this Act an amendment or repeal is expressed in terms 

4 of an amendment to, or repeal of, a section or other provi5 sion, the reference shall be considered to be made to a 

6 section or other provision of the Internal Revenue Code 

7 of 1986. 

8 SEC. 2. FINDINGS AND PURPOSE. 

9 (a) FINDINGS.—Congress finds the following: 

10 (1) Our Nation’s highways, transit systems, 

11 railroads, ports, and inland waterways drive our 

12 economy, enabling all industries to achieve growth 

13 and productivity that makes America strong and 

14 prosperous. 

15 (2) The establishment, maintenance, and im16 provement of the national transportation network is 

17 a national priority, for economic, environmental, en18 ergy, security, and other reasons. 

19 (3) The ability to move people and goods is crit20 ical to maintaining State, metropolitan, rural, and 

21 local economies. 

22 (4) The construction of infrastructure requires 

23 the skills of numerous occupations, including those 

24 in the contracting, engineering, planning and design, 


wwoods2 on PRODPC68 with BILLS
3 

•S 238 IS

1 materials supply, manufacturing, distribution, and 

2 safety industries. 

3 (5) Investing in transportation infrastructure 

4 creates long-term capital assets for the Nation that 

5 will help the United States address its enormous in6 frastructure needs and improve its economic produc7 tivity. 

8 (6) Investment in transportation infrastructure 

9 creates jobs and spurs economic activity to put peo10 ple back to work and stimulate the economy. 

11 (7) Every billion dollars in transportation in12 vestment has the potential to create up to 47,500 

13 jobs. 

14 (8) Every dollar invested in the Nation’s trans15 portation infrastructure yields at least $5.70 in eco16 nomic benefits because of reduced delays, improved 

17 safety, and reduced vehicle operating costs. 

18 (9) Numerous experts have noted that the esti19 mated cost to maintain and improve our Nation’s 

20 highways, bridges, and other critical transportation 

21 infrastructure significantly exceeds what is currently 

22 being provided by all levels of government. 

23 (b) PURPOSE.—The purpose of this Act is to provide 

24 financing for additional transportation infrastructure cap25 ital investments. 


wwoods2 on PRODPC68 with BILLS
4 

•S 238 IS

1 SEC. 3. CREDIT TO HOLDERS OF BUILD AMERICA BONDS. 

2 (a) IN GENERAL.—Subpart I of part IV of sub3 chapter A of chapter 1 is amended by adding at the end 

4 the following new section: 

5 ‘‘SEC. 54F. BUILD AMERICA BONDS. 

6 ‘‘(a) BUILD AMERICA BOND.—For purposes of this 

7 subpart, the term ‘Build America bond’ means any bond 

8 issued as part of an issue if— 

9 ‘‘(1) 100 percent of the available project pro10 ceeds of such issue are to be used for expenditures 

11 incurred after the date of the enactment of this sec12 tion for 1 or more qualified projects pursuant to an 

13 allocation of such proceeds to such project or 

14 projects by the Transportation Finance Corporation, 

15 ‘‘(2) the bond is issued by the Transportation 

16 Finance Corporation and is in registered form (with17 in the meaning of section 149(a)), 

18 ‘‘(3) the issuer designates such bond for pur19 poses of this section, 

20 ‘‘(4) the Transportation Finance Corporation 

21 certifies that it meets the State contribution require22 ment of subsection (h) with respect to such project, 

23 as in effect on the date of issuance, 

24 ‘‘(5) the Transportation Finance Corporation 

25 certifies that the State in which an approved qualiVerDate Nov 24 2008 03:16 Jan 15, 2009 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S238.IS S238

wwoods2 on PRODPC68 with BILLS
5 

•S 238 IS

1 fied project is located meets the requirement de2 scribed in subsection (i), 

3 ‘‘(6) the face amount of such bond, when added 

4 to the face amount of all Build America bonds pre5 viously designated under paragraph (3) and issued 

6 in the calendar year, does not exceed the Build 

7 America bond limitation for such year under sub8 section (d), 

9 ‘‘(7) the term of each bond which is part of 

10 such issue does not exceed 30 years, 

11 ‘‘(8) the payment of principal with respect to 

12 such bond is the obligation of the Transportation Fi13 nance Corporation, and 

14 ‘‘(9) the issue meets the requirements of sub15 section (e). 

16 ‘‘(b) QUALIFIED PROJECT.—For purposes of this 

17 section, the term ‘qualified project’ means the capital im18 provements to any transportation infrastructure project of 

19 any governmental unit or other person, including roads, 

20 bridges, rail and transit systems, ports, and inland water21 ways, proposed by 1 or more States and approved by the 

22 Transportation Finance Corporation, but does not include 

23 costs of operations or maintenance with respect to such 

24 project. 


wwoods2 on PRODPC68 with BILLS
6 

•S 238 IS

1 ‘‘(c) APPLICABLE CREDIT RATE.—In lieu of section 

2 54A(b)(3), for purposes of section 54A(b)(2), the applica3 ble credit rate with respect to an issue under this section 

4 is the rate equal to an average market yield (as of the 

5 day before the date of sale of the issue) on outstanding 

6 long-term corporate debt obligations (determined in such 

7 manner as the Secretary prescribes). 

8 ‘‘(d) LIMITATION ON AMOUNT OF BONDS DES9 IGNATED.— 

10 ‘‘(1) NATIONAL LIMITATION.—There is a Build 

11 America bond limitation for each calendar year. 

12 Such limitation is— 

13 ‘‘(A) $5,000,000,000 for 2009, 

14 ‘‘(B) $5,000,000,000 for 2010, 

15 ‘‘(C) $10,000,000,000 for 2011, 

16 ‘‘(D) $10,000,000,000 for 2012, 

17 ‘‘(E) $10,000,000,000 for 2013, 

18 ‘‘(F) $10,000,000,000 for 2014, and 

19 ‘‘(G) except as provided in paragraph (4), 

20 zero thereafter. 

21 ‘‘(2) MINIMUM ALLOCATIONS TO STATES.—In 

22 making allocations for each calendar year under sub23 section (a)(1), the Transportation Finance Corpora24 tion shall ensure that the amount allocated for quali25 fied projects located in each State for such calendar 


wwoods2 on PRODPC68 with BILLS
7 

•S 238 IS

1 year is not less than 1 percent of the total amount 

2 allocated for such year. 

3 ‘‘(3) CARRYOVER OF UNUSED ISSUANCE LIMI4 TATION.—If for any calendar year the limitation 

5 amount imposed by paragraph (1) exceeds the 

6 amount of Build America bonds issued during such 

7 year, such excess shall be carried forward to 1 or 

8 more succeeding calendar years as an addition to the 

9 limitation imposed by paragraph (1) and until used 

10 by issuance of Build America bonds. 

11 ‘‘(4) ISSUANCE OF SMALL DENOMINATION

12 BONDS.—From the Build America bond limitation 

13 for each year, the Transportation Finance Corpora14 tion shall issue a limited quantity of Build America 

15 bonds in small denominations suitable for purchase 

16 as gifts by individual investors wishing to show their 

17 support for investing in America’s transportation in18 frastructure. 

19 ‘‘(e) SPECIAL RULES RELATING TO EXPENDI20 TURES.— 

21 ‘‘(1) IN GENERAL.—An issue shall be treated as 

22 meeting the requirements of this subsection if, as of 

23 the date of issuance, the Transportation Finance 

24 Corporation reasonably expects— 


wwoods2 on PRODPC68 with BILLS
8 

•S 238 IS

1 ‘‘(A) at least 100 percent of the available 

2 project proceeds of such issue are to be spent 

3 for 1 or more qualified projects within the 5- 

4 year expenditure period beginning on such date, 

5 ‘‘(B) to incur a binding commitment with 

6 a State or third party to spend at least 10 per7 cent of the proceeds of such issue, or to com8 mence construction, with respect to such 

9 projects within the 12-month period beginning 

10 on such date, and 

11 ‘‘(C) to proceed with due diligence to com12 plete such projects and to spend the proceeds of 

13 such issue. 

14 ‘‘(2) RULES REGARDING CONTINUING COMPLI15 ANCE AFTER 5-YEAR DETERMINATION.—To the ex16 tent that less than 100 percent of the available 

17 project proceeds of such issue are expended by the 

18 close of the 5-year expenditure period beginning on 

19 the date of issuance, the Transportation Finance 

20 Corporation shall redeem all of the nonqualified 

21 bonds within 90 days after the end of such period. 

22 For purposes of this paragraph, the amount of the 

23 nonqualified bonds required to be redeemed shall be 

24 determined in the same manner as under section 

25 142. 


wwoods2 on PRODPC68 with BILLS
9 

•S 238 IS

1 ‘‘(3) REALLOCATION.—In the event the recipi2 ent of an allocation under subsection (a)(1) after no3 tice and a reasonable opportunity to take corrective 

4 action fails to demonstrate to the satisfaction of the 

5 Transportation Finance Corporation that its actions 

6 will allow the Transportation Finance Corporation to 

7 meet the requirements under this subsection, the 

8 Transportation Finance Corporation may redis9 tribute the allocation meant for such recipient to 

10 other recipients. 

11 ‘‘(f) RECAPTURE OF PORTION OF CREDIT WHERE

12 CESSATION OF COMPLIANCE.—If any bond which when 

13 issued purported to be a Build America bond ceases to 

14 be such a bond, the Transportation Finance Corporation 

15 shall pay to the United States (at the time required by 

16 the Secretary) an amount equal to the sum of— 

17 ‘‘(1) the aggregate of the credits allowable 

18 under section 54A with respect to such bond (deter19 mined without regard to section 54A(c)) for taxable 

20 years ending during the calendar year in which such 

21 cessation occurs and each succeeding calendar year 

22 ending with the calendar year in which such bond is 

23 redeemed by the Transportation Finance Corpora24 tion, and 


wwoods2 on PRODPC68 with BILLS
10 

•S 238 IS

1 ‘‘(2) interest at the underpayment rate under 

2 section 6621 on the amount determined under para3 graph (1) for each calendar year for the period be4 ginning on the first day of such calendar year. 

5 ‘‘(g) BUILD AMERICA BONDS TRUST ACCOUNT.— 

6 ‘‘(1) IN GENERAL.—The following amounts 

7 shall be held in a Build America Bonds Trust Ac8 count by the Transportation Finance Corporation: 

9 ‘‘(A) The proceeds from the sale of all 

10 bonds issued under this section. 

11 ‘‘(B) The investment earnings on proceeds 

12 from the sale of such bonds. 

13 ‘‘(C) The amount described in paragraph 

14 (2). 

15 ‘‘(D) Any earnings on any amounts de16 scribed in subparagraph (A), (B), or (C). 

17 ‘‘(2) APPROPRIATION OF REVENUES.—There is 

18 hereby appropriated to the Build America Bonds 

19 Trust Account an amount equal to the lesser of— 

20 ‘‘(A) the revenues resulting from the impo21 sition of fees pursuant to section 13031 of the 

22 Consolidated Omnibus Budget Reconciliation 

23 Act of 1985 (19 U.S.C. 58c) for fiscal years be24 ginning after September 31, 2009, or 

25 ‘‘(B) $50,000,000,000. 


wwoods2 on PRODPC68 with BILLS
11 

•S 238 IS

1 ‘‘(3) USE OF FUNDS.—Amounts in the Build 

2 America Bonds Trust Account may be used only to 

3 pay costs of qualified projects, redeem Build Amer4 ica bonds, and fund the operations of the Transpor5 tation Finance Corporation, except that amounts 

6 withdrawn from the Build America Bonds Trust Ac7 count to pay costs of qualified projects may not ex8 ceed the proceeds from the sale of Build America 

9 bonds described in subsection (a)(1). 

10 ‘‘(4) USE OF REMAINING FUNDS IN BUILD

11 AMERICA BONDS TRUST ACCOUNT.—Upon the re12 demption of all Build America bonds issued under 

13 this section, any remaining amounts in the Build 

14 America Bonds Trust Account shall be available to 

15 the Transportation Finance Corporation to pay the 

16 costs of any qualified project. 

17 ‘‘(5) APPLICABILITY OF FEDERAL LAW.—The 

18 requirements of any Federal law, including titles 23, 

19 40, and 49 of the United States Code, which would 

20 otherwise apply to projects to which the United 

21 States is a party or to funds made available under 

22 such law and projects assisted with those funds shall 

23 apply to— 

24 ‘‘(A) funds made available under the Build 

25 America Bonds Trust Account for similar qualiVerDate Nov 24 2008 03:16 Jan 15, 2009 Jkt 079200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S238.IS S238

wwoods2 on PRODPC68 with BILLS
12 

•S 238 IS

1 fied projects, including contributions required 

2 under subsection (h), and 

3 ‘‘(B) similar qualified projects assisted by 

4 the Transportation Finance Corporation 

5 through the use of such funds. 

6 ‘‘(6) INVESTMENT.—Subject to subsections (e) 

7 and (f), it shall be the duty of the Transportation 

8 Finance Corporation to invest in investment grade 

9 obligations such portion of the Build America Bonds 

10 Trust Account as is not, in the judgment of the 

11 Board of Directors of the Transportation Finance 

12 Corporation, required to meet current withdrawals. 

13 To the maximum extent practicable, investments 

14 should be made in securities that support infrastruc15 ture investment at the State and local level. 

16 ‘‘(h) STATE CONTRIBUTION REQUIREMENTS.— 

17 ‘‘(1) IN GENERAL.—For purposes of subsection 

18 (a)(4), the State contribution requirement of this 

19 subsection is met with respect to any qualified 

20 project if the Transportation Finance Corporation 

21 has received from 1 or more States, not later than 

22 the date of issuance of the bond, written commit23 ments for matching contributions of not less than 20 

24 percent (or such smaller percentage as determined 


wwoods2 on PRODPC68 with BILLS
13 

•S 238 IS

1 under title 23, United States Code, for such State) 

2 of the cost of the qualified project. 

3 ‘‘(2) STATE MATCHING CONTRIBUTIONS MAY

4 NOT INCLUDE FEDERAL FUNDS.—For purposes of 

5 this subsection, State matching contributions shall 

6 not be derived, directly or indirectly, from Federal 

7 funds, including any transfers from the Highway 

8 Trust Fund under section 9503. 

9 ‘‘(i) UTILIZATION OF UPDATED CONSTRUCTION

10 TECHNOLOGY FOR QUALIFIED PROJECTS.—For purposes 

11 of subsection (a)(5), the requirement of this subsection is 

12 met if the appropriate State agency relating to the quali13 fied project is utilizing updated construction technologies. 

14 ‘‘(j) OTHER DEFINITIONS AND SPECIAL RULES.— 

15 For purposes of this section— 

16 ‘‘(1) TRANSPORTATION FINANCE CORPORA17 TION.—The term ‘Transportation Finance Corpora18 tion’ means the corporation established under sec19 tion 4(a) of the Build America Bonds Act of 2009. 

20 ‘‘(2) CREDITS MAY BE TRANSFERRED.—Noth21 ing in any law or rule of law shall be construed to 

22 limit the transferability of the credit or bond allowed 

23 by this section through sale and repurchase agree24 ments. 


wwoods2 on PRODPC68 with BILLS
14 

•S 238 IS

1 ‘‘(3) PROHIBITION ON USE OF HIGHWAY TRUST

2 FUND.—Notwithstanding any other provision of law, 

3 no funds derived from the Highway Trust Fund es4 tablished under section 9503 shall be used to pay for 

5 credits under this section or for the administrative 

6 costs of the Transportation Finance Corporation.’’. 

7 (b) CONFORMING AMENDMENTS.— 

8 (1) Paragraph (1) of section 54A(d) of the In9 ternal Revenue Code of 1986 is amended— 

10 (A) by striking ‘‘or’’ at the end of subpara11 graph (C), 

12 (B) by inserting ‘‘or’’ at the end of sub13 paragraph (D), 

14 (C) by inserting after subparagraph (D) 

15 the following new subparagraph: 

16 ‘‘(E) a Build America bond,’’, and 

17 (D) by inserting ‘‘(paragraphs (3), (4), 

18 and (6), in the case of a Build America bond)’’ 

19 after ‘‘and (6)’’. 

20 (2) Subparagraph (C) of section 54A(d)(2) of 

21 such Code is amended by striking ‘‘and’’ at the end 

22 of clause (iii), by striking the period at the end of 

23 clause (iv) and inserting ‘‘, and’’, and by adding at 

24 the end the following new clause: 


wwoods2 on PRODPC68 with BILLS
15 

•S 238 IS

1 ‘‘(v) in the case of a Build America 

2 bond, a purpose specified in section 

3 54F(a)(1).’’. 

4 (c) CLERICAL AMENDMENT.—The table of sections 

5 for subpart I of part IV of subchapter A of chapter 1 of 

6 the Internal Revenue Code of 1986 is amended by adding 

7 at the end the following new item: 

‘‘Sec. 54F. Build America bonds.’’. 

8 (d) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to bonds issued after the date of 

10 the enactment of this Act. 

11 SEC. 4. TRANSPORTATION FINANCE CORPORATION. 

12 (a) RECOGNITION AND STATUS.—Congress grants 

13 consent and recognition to the establishment by 2 or more 

14 State infrastructure banks (established under section 610 

15 of title 23, United States Code) of a multistate organiza16 tion to be known as the ‘‘Transportation Finance Corpora17 tion’’ (hereafter in this section referred to as the ‘‘Cor18 poration’’). Additional State infrastructure banks may join 

19 the Transportation Finance Corporation subsequent to its 

20 establishment. 

21 (b) FUNCTIONS OF CORPORATION.—The Corpora22 tion— 

23 (1) is authorized to issue Build America bonds 

24 for the financing of qualified projects as required 


wwoods2 on PRODPC68 with BILLS
16 

•S 238 IS

1 under section 54F of the Internal Revenue Code of 

2 1986, 

3 (2) is authorized to establish and operate the 

4 Build America Bonds Trust Account as required 

5 under section 54F(g) of such Code, 

6 (3) is authorized to act as a centralized entity 

7 to provide financing for qualified projects (as defined 

8 in section 54F(b) of such Code), 

9 (4) may— 

10 (A) leverage resources and stimulate public 

11 and private investment in transportation infra12 structure, 

13 (B) encourage States to create additional 

14 opportunities for the financing of transportation 

15 infrastructure, 

16 (C) perform any other function the sole 

17 purpose of which is to carry out the financing 

18 of qualified projects through Build America 

19 bonds, and 

20 (5) not later than February 15 of each year 

21 shall submit a report to Congress describing the ac22 tivities of the Corporation for the preceding year. 

23 (c) EXEMPTION FROM TAXES.— 

24 (1) IN GENERAL.—The Corporation, including 

25 its franchise, capital, reserves, surplus, sinking 


wwoods2 on PRODPC68 with BILLS
17 

•S 238 IS

1 funds, mortgages or other security holdings, and in2 come, shall be exempt from all taxation now or here3 after imposed by the United States, by any territory, 

4 dependency, or possession thereof, or by any State, 

5 county, municipality, or local taxing authority, ex6 cept that any real property of the Corporation shall 

7 be subject to State, territorial, county, municipal, or 

8 local taxation to the same extent according to its 

9 value as other real property is taxed. 

10 (2) FINANCIAL OBLIGATIONS.—Build America 

11 bonds or other obligations issued by the Corporation 

12 and the interest on or tax credits with respect to its 

13 bonds or other obligations shall not be subject to 

14 taxation by any State, county, municipality, or local 

15 taxing authority. 

16 (d) CONSTRUCTION REGARDING RECOGNITION AND

17 STATUS.— 

18 (1) IN GENERAL.—Nothing in this section shall 

19 be construed to establish the Corporation as a de20 partment, agency, or instrumentality of the United 

21 States Government, to establish the members of any 

22 governing board or the officers and employees of the 

23 Corporation, as officers or employees of the United 

24 States Government, or to subject the Corporation to 

25 the provisions of title 31, United States Code. 


wwoods2 on PRODPC68 with BILLS
18 

•S 238 IS

1 (2) UNITED STATES NOT OBLIGATED.—The de2 posit of Federal funds into the Build America Bonds 

3 Trust Account established under section 54F(g) of 

4 the Internal Revenue Code of 1986 shall not be con5 strued as a commitment, guarantee, or obligation on 

6 the part of the United States to any third party, nor 

7 shall any third party have any right against the 

8 United States for payment solely by virtue of the 

9 contribution. Any security or debt-financing instru10 ment issued by the Corporation shall expressly state 

11 that the security or instrument does not constitute 

12 a commitment, guarantee, or obligation of the 

13 United States. 

14 SEC. 5. ADDITIONAL REVENUES THROUGH EXTENSION OF 

15 CUSTOMS USER FEES. 

16 Section 13031(j)(3) of the Consolidated Omnibus 

17 Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) 

18 is amended— 

19 (1) by striking ‘‘February 14, 2018’’ in sub20 paragraph (A) and inserting ‘‘February 14, 2046’’, 

21 and 

22 (2) by striking ‘‘January 31, 2018’’ in subpara23 graph (B)(i) and inserting ‘‘January 31, 2046’’. 

Æ 


wwoods2 on PRODPC68 with BILLS