II

106TH CONGRESS

1ST SESSION S. 470

To amend the Internal Revenue Code of 1986 to allow tax-exempt private

activity bonds to be issued for highway infrastructure construction.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 25, 1999

Mr. CHAFEE (for himself, Mr. MOYNIHAN, Mr. WARNER, Mr. BOND, Mr.

GRAHAM, and Mr. GORTON) introduced the following bill; which was read

twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to allow taxexempt private activity bonds to be issued for highway

infrastructure construction.

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.

4 This Act may be cited as the ‘‘Highway Innovation

5 and Cost Savings Act’’.

6 SEC. 2. TAX-EXEMPT FINANCING OF QUALIFIED HIGHWAY

7 INFRASTRUCTURE CONSTRUCTION.

8 (a) TREATMENT AS EXEMPT FACILITY BOND.—A

9 bond described in subsection (b) shall be treated as de-
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1 scribed in section 141(e)(1)(A) of the Internal Revenue

2 Code of 1986, except that section 146 of such Code shall

3 not apply to such bond.

4 (b) BOND DESCRIBED.—

5 (1) IN GENERAL.—A bond is described in this

6 subsection if such bond is issued after the date of

7 enactment of this Act as part of an issue—

8 (A) 95 percent or more of the net proceeds

9 of which are to be used to provide a qualified

10 highway infrastructure project, and

11 (B) to which there has been allocated a

12 portion of the allocation to the project under

13 paragraph (2)(C)(ii) which is equal to the ag14 gregate face amount of bonds to be issued as

15 part of such issue.

16 (2) QUALIFIED HIGHWAY INFRASTRUCTURE

17 PROJECTS.—

18 (A) IN GENERAL.—For purposes of para19 graph (1), the term ‘‘qualified highway infra20 structure project’’ means a project—

21 (i) for the construction or reconstruc22 tion of a highway, and

23 (ii) designated under subparagraph

24 (B) as an eligible pilot project.

25 (B) ELIGIBLE PILOT PROJECT.—
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1 (i) IN GENERAL.—The Secretary of

2 Transportation, in consultation with the

3 Secretary of the Treasury, shall select not

4 more than 15 highway infrastructure

5 projects to be pilot projects eligible for tax6 exempt financing.

7 (ii) ELIGIBILITY CRITERIA.—In deter8 mining the criteria necessary for the eligi9 bility of pilot projects, the Secretary of

10 Transportation shall include the following:

11 (I) The project must serve the

12 general public.

13 (II) The project is necessary to

14 evaluate the potential of the private

15 sector’s participation in the provision,

16 maintenance, and operation of the

17 highway infrastructure of the United

18 States.

19 (III) The project must be located

20 on publicly-owned rights-of-way.

21 (IV) The project must be publicly

22 owned or the ownership of the high23 way constructed or reconstructed

24 under the project must revert to the

25 public.
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1 (V) The project must be consist2 ent with a transportation plan devel3 oped pursuant to section 134(g) or

4 135(e) of title 23, United States

5 Code.

6 (C) AGGREGATE FACE AMOUNT OF TAX7 EXEMPT FINANCING.—

8 (i) IN GENERAL.—The aggregate face

9 amount of bonds issued pursuant to this

10 section shall not exceed $15,000,000,000,

11 determined without regard to any bond the

12 proceeds of which are used exclusively to

13 refund (other than to advance refund) a

14 bond issued pursuant to this section (or a

15 bond which is a part of a series of

16 refundings of a bond so issued) if the

17 amount of the refunding bond does not ex18 ceed the outstanding amount of the re19 funded bond.

20 (ii) ALLOCATION.—The Secretary of

21 Transportation, in consultation with the

22 Secretary of the Treasury, shall allocate

23 the amount described in clause (i) among

24 the eligible pilot projects designated under
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1 subparagraph (B), based on the extent to

2 which—

3 (I) the projects use new tech4 nologies, construction techniques, or

5 innovative cost controls that result in

6 savings in building or operating the

7 projects, and

8 (II) the projects address local, re9 gional, or national transportation

10 needs.

11 (iii) REALLOCATION.—If any portion

12 of an allocation under clause (ii) is unused

13 on the date which is 3 years after such al14 location, the Secretary of Transportation,

15 in consultation with the Secretary of the

16 Treasury, may reallocate such portion

17 among the remaining eligible pilot projects.

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