II

105TH CONGRESS

1ST SESSION S. 1494

To empower States with authority for most taxing and spending for highway

programs and mass transit programs, and for other purposes.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 9, 1997

Mr. MACK (for himself, Mr. LEVIN, Mr. THURMOND, Mr. GRAHAM, and Mr.

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

the Committee on Finance

A BILL

To empower States with authority for most taxing and

spending for highway programs and mass transit programs, 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.

4 This Act may be cited as the ‘‘Surface Transpor5 tation and Transit Empowerment Act’’.

6 SEC. 2. DEFINITIONS.

7 In this Act, the following definitions apply:
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1 (1) CORE HIGHWAY PROGRAMS.—The term

2 ‘‘core highway programs’’ means the following pro3 grams:

4 (A) The Interstate maintenance program

5 under section 119 of title 23, United States

6 Code.

7 (B) Highway bridge replacement and reha8 bilitation (excluding off-System bridges) under

9 section 144 of that title.

10 (C)(i) Indian reservation roads under sec11 tion 204 of that title.

12 (ii) Public lands highways under section

13 204 of that title.

14 (iii) Parkways and park roads under sec15 tion 204 of that title.

16 (D) Highway safety programs under sec17 tion 402 of that title.

18 (E) Highway safety research and develop19 ment under section 403 of that title.

20 (F) Motor carrier safety grants under sec21 tion 31104 of title 49, United States Code.

22 (G) Metropolitan planning under section

23 104(f) of title 23, United States Code.

24 (H) National defense highways under sec25 tion 311 of that title.
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1 (I) Emergency relief under section 125 of

2 that title.

3 (2) CORE PROGRAM STATE.—The term ‘‘core

4 program State’’ means a State which makes an elec5 tion under section 3.

6 (3) ELECTION PERIOD.—The term ‘‘election pe7 riod’’ means the period beginning with the fiscal

8 year determined under section 3(b) and ending not

9 later than with fiscal year 2003.

10 (4) FUTURE INVESTMENT ACCOUNT.—The term

11 ‘‘Future Investment Account’’ means the Future In12 vestment Account established under section 9503(f)

13 of the Internal Revenue Code of 1986.

14 (5) HIGHWAY ACCOUNT.—The term ‘‘Highway

15 Account’’ means the portion of the Highway Trust

16 Fund established under section 9503 of the Internal

17 Revenue Code of 1986 which is not the Mass Tran18 sit Account or the Future Investment Account.

19 (6) MASS TRANSIT ACCOUNT.—The term ‘‘Mass

20 Transit Account’’ means the Mass Transit Account

21 established under section 9503(e) of the Internal

22 Revenue Code of 1986.

23 (7) SURFACE TRANSPORTATION.—The term

24 ‘‘surface transportation’’ includes mass transit and

25 rail.
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1 (8) TIER I CORE PROGRAM STATE.—The term

2 ‘‘tier I core program State’’ means a core program

3 State that is eligible for a core highway programs

4 payment and a non-core highway programs block

5 grant under section 3.

6 (9) TIER II CORE PROGRAM STATE.—The term

7 ‘‘tier II core program State’’ means a core program

8 State that is eligible for a core highway programs

9 payment under section 3 and that elects under sec10 tion 3(e) to reduce its Federal fuel tax rate with a

11 corresponding reduction in its non-core highway pro12 grams block grant.

13 (10) TIER I MASS TRANSIT STATE.—The term

14 ‘‘tier I mass transit State’’ means a State that is eli15 gible for a mass transit block grant under section 4.

16 (11) TIER II MASS TRANSIT STATE.—The term

17 ‘‘tier II mass transit State’’ means a State that

18 elects under section 4(c) to eliminate its mass tran19 sit fuel tax rate with a corresponding elimination of

20 its mass transit block grant.

21 SEC. 3. FUNDING OF HIGHWAY PROGRAMS IN CORE PRO22 GRAM STATES.

23 (a) ELECTION TO BECOME A CORE PROGRAM

24 STATE.—Each State which makes an election described
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1 in subsection (b) shall be eligible with respect to each fis2 cal year during the State’s election period for—

3 (1) a core highway programs payment; and

4 (2) a non-core highway programs block grant,

5 in lieu of any other payment from the Highway Account

6 and the Future Highway Investment Sub Account of the

7 Future Investment Account.

8 (b) REQUIREMENTS FOR ELECTION.—An election is

9 described in this subsection if—

10 (1) such election is made by a State at least

11 180 days before the first fiscal year with respect to

12 which the election applies;

13 (2) such election is made by a State that cer14 tifies that such State has a metropolitan planning

15 organization established under section 134 of title

16 23, United States Code, and that such organization

17 will maintain a system for processing funds received

18 by the State under this Act throughout the election

19 period; and

20 (3) such election is submitted to the Secretary

21 in such form and manner as the Secretary pre22 scribes.

23 (c) DETERMINATION AND USE OF CORE HIGHWAY

24 PROGRAMS PAYMENT.—
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1 (1) DETERMINATION OF AMOUNT OF PAY2 MENT.—

3 (A) IN GENERAL.—Subject to subpara4 graph (B), the Secretary shall determine for

5 each fiscal year the payment necessary to meet

6 the commitments of core highway programs for

7 each core program State.

8 (B) LIMITATIONS.—

9 (i) GENERAL RULE.—Any payment

10 under subparagraph (A) for any fiscal year

11 for any particular core highway program

12 for a core program State shall be subject

13 to—

14 (I) except with respect to core

15 highway programs described in sub16 paragraphs (G), (H), and (I) of sec17 tion 2(1), the funding level for such

18 program for such year under clause

19 (ii) in lieu of the funding level for

20 such program for such year under any

21 other provision of law, and

22 (II) the annual obligation limita23 tion for such program for such year

24 imposed under any provision of law.
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1 (ii) SPECIAL FUNDING LEVELS.—For

2 purposes of clause (i), the funding levels

3 for core highway programs are as follows:

4 (I) For the Interstate mainte5 nance program, $5,000,000,000 for

6 fiscal year 1998, $5,100,000,000 for

7 fiscal year 1999, $5,300,000,000 for

8 fiscal year 2000, $5,400,000,000 for

9 fiscal year 2001, $5,600,000,000 for

10 fiscal year 2002, and $5,800,000,000

11 for fiscal year 2003.

12 (II) For highway bridge replace13 ment and rehabilitation,

14 $1,183,000,000 for fiscal year 1998,

15 $1,217,000,000 for fiscal year 1999,

16 $1,251,000,000 for fiscal year 2000,

17 $1,286,000,000 for fiscal year 2001,

18 $1,321,000,000 for fiscal year 2002,

19 and $1,358,000,000 for fiscal year

20 2003.

21 (III)(aa) For Indian reservation

22 roads, $197,000,000 for fiscal year

23 1998, $202,000,000 for fiscal year

24 1999, $208,000,000 for fiscal year

25 2000, $214,000,000 for fiscal year
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1 2001, $220,000,000 for fiscal year

2 2002, and $225,000,000 for fiscal

3 year 2003.

4 (bb) For public lands highways,

5 $177,000,000 for fiscal year 1998,

6 $182,000,000 for fiscal year 1999,

7 $187,000,000 for fiscal year 2000,

8 $192,000,000 for fiscal year 2001,

9 $197,000,000 for fiscal year 2002,

10 and $202,000,000 for fiscal year

11 2002.

12 (cc) For parkways and park

13 roads, $86,000,000 for fiscal year

14 1998, $89,000,000 for fiscal year

15 1999, $91,000,000 for fiscal year

16 2000, $94,000,000 for fiscal year

17 2001, $97,000,000 for fiscal year

18 2002, and $101,000,000 for fiscal

19 year 2003.

20 (IV) For highway safety pro21 grams, $171,000,000 for each of fis22 cal years 1998 through 2003.

23 (V) For highway safety research

24 and development, $44,000,000 for
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1 each of fiscal years 1998 through

2 2003.

3 (VI) For motor carrier safety

4 grants, not more than $90,000,000

5 for each of fiscal years 1998 through

6 2003.

7 (2) USE OF PAYMENT.—

8 (A) IN GENERAL.—The core highway pro9 grams payment for any core program State

10 shall be available, as provided by appropriation

11 Acts, to the State for any core highway pro12 gram purpose in such State.

13 (B) TRANSFERABILITY OF FUNDS.—To

14 the extent that a core program State deter15 mines that funds made available under this sub16 section to the State for a purpose are in excess

17 of the needs of the State for that purpose, the

18 State may transfer the excess funds to, and use

19 the excess funds for, any surface transportation

20 purpose in the State.

21 (d) DETERMINATION AND USE OF NON-CORE HIGH22 WAY PROGRAMS BLOCK GRANT.—

23 (1) DETERMINATION OF AMOUNT OF BLOCK

24 GRANT.—Subject to subsection (e), the amount of

25 the non-core highway programs block grant for any
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1 tier I core program State for any fiscal year is equal

2 to the excess of—

3 (A) the amount of taxes transferred to the

4 Highway Account and the Future Highway In5 vestment Sub Account of the Future Invest6 ment Account for such fiscal year which is at7 tributable to highway users in that State as de8 termined by the Secretary of the Treasury (tak9 ing into account proper reductions for uses of

10 such taxes for purposes other than the Federal11 aid highway program); over

12 (B) the core highway programs payment to

13 such State for such fiscal year, as determined

14 under subsection (c).

15 (2) USE OF BLOCK GRANT.—The non-core

16 highway programs block grant for any tier I core

17 program State shall be available, as provided by ap18 propriation Acts, to the State for any surface trans19 portation purpose in such State. Any project carry20 ing out such a purpose shall be exempt from any

21 Federal regulation other than with respect to health

22 and safety standards and practices.

23 (e) ELECTION TO REDUCE FEDERAL FUEL TAX

24 RATE WITH CORRESPONDING REDUCTION IN BLOCK

25 GRANT.—
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1 (1) IN GENERAL.—With respect to fiscal years

2 beginning after the satisfaction year and ending with

3 the termination of the election period, a core pro4 gram State may notify the Secretary (in the same

5 manner as the election described in subsection (b))

6 of an election to become a tier II core program State

7 and to have imposed on highway users in the State

8 the State’s core highway programs financing rate

9 with respect to the taxes transferred to the Highway

10 Account and the Future Highway Investment Sub

11 Account of the Future Investment Account which

12 are attributable to such highway users in lieu of the

13 tax rates otherwise established in the Internal Reve14 nue Code of 1986 for such fiscal years.

15 (2) DETERMINATION OF CORE HIGHWAY PRO16 GRAMS FINANCING RATE.—

17 (A) IN GENERAL.—Upon notification by

18 the Secretary of an election by a State under

19 paragraph (1), the Secretary of the Treasury

20 shall determine for each subsequent fiscal year

21 such State’s core highway programs financing

22 rate, taking into account—

23 (i) the amount of taxes necessary to

24 fund that State’s core highway programs

25 payment for such fiscal year;
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1 (ii) the uses of the taxes described in

2 paragraph (1) for purposes other than the

3 Federal-aid highway program for such fis4 cal year;

5 (iii) any adjustments necessary as a

6 result of a determination under this para7 graph for a preceding fiscal year; and

8 (iv) the rates with respect to such

9 taxes otherwise imposed under the Internal

10 Revenue Code of 1986 for such fiscal year.

11 (B) REPORT.—Not later than August 1,

12 the Secretary of the Treasury shall submit to

13 the Committee on Ways and Means of the

14 House of Representatives and the Committee

15 on Finance of the Senate, a report that de16 scribes the determination required under sub17 paragraph (A).

18 (C) CONGRESSIONAL APPROVAL RE19 QUIRED.—The Secretary of the Treasury shall

20 not implement the determination required to be

21 included in the report submitted under subpara22 graph (B) unless a joint resolution is enacted,

23 in accordance with subparagraph (D), approv24 ing such determination before the following Oc25 tober 1.
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1 (D) CONGRESSIONAL CONSIDERATION.—

2 (i) TERMS OF THE RESOLUTION.—

3 For purposes of subparagraph (C), the

4 term ‘‘joint resolution’’ means only a joint

5 resolution that is introduced before Octo6 ber 1 and—

7 (I) that does not have a pre8 amble;

9 (II) the matter after the resolv10 ing clause of which is as follows:

11 ‘‘That Congress approves the deter12 mination of the Secretary of the

13 Treasury regarding the imposition of

14 the core highway programs rate for

15 the State of submitted on

16 ’’, the blank spaces being filled in

17 with the appropriate State and date,

18 respectively; and

19 (III) the title of which is as fol20 lows: ‘‘Joint resolution approving the

21 determination of the Secretary of the

22 Treasury regarding the imposition of

23 a core highway programs rate.’’.

24 (ii) REFERRAL.—A resolution de25 scribed in clause (i) that is introduced—
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1 (I) in the House of Representa2 tives, shall be referred to the Commit3 tee on Ways and Means; and

4 (II) in the Senate, shall be re5 ferred to the Committee on Finance.

6 (iii) DISCHARGE.—If a committee to

7 which a resolution described in clause (i) is

8 referred has not reported such resolution

9 by the end of the 30-day period beginning

10 on the date on which the Secretary of the

11 Treasury submits the report required

12 under subparagraph (B), such committee

13 shall be, at the end of such period, dis14 charged from further consideration of such

15 resolution, and such resolution shall be

16 placed on the appropriate calendar of the

17 House involved.

18 (iv) CONSIDERATION.—Within 30

19 days after the date on which the committee

20 to which a resolution described in clause

21 (i) has reported, or has been discharged

22 from further consideration of such resolu23 tion, such resolution shall be considered in

24 the same manner as a resolution is consid25 ered under subsections (d), (e), and (f) of
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1 section 2908 of the Defense Base Closure

2 and Realignment Act of 1990 (10 U.S.C.

3 2687 note).

4 (3) SATISFACTION YEAR.—For purposes of

5 paragraph (1), the term ‘‘satisfaction year’’ means

6 the fiscal year during which all Federal non-core

7 highway program obligations of a core program

8 State payable from the Highway Account and the

9 Future Highway Investment Sub Account of the Fu10 ture Investment Account existing on the date of the

11 election by such State described in subsection (a)

12 are paid.

13 SEC. 4. FUNDING OF TRANSIT PROGRAMS IN MASS TRANSIT

14 BLOCK GRANT STATES.

15 (a) ELECTION TO BECOME A MASS TRANSIT BLOCK

16 GRANT STATE.—A core program State or any other State

17 may notify the Secretary (in the same manner as the elec18 tion described in section 3(b)) of an election to receive

19 with respect to each fiscal year during the State’s election

20 period a mass transit block grant, in lieu of any other pay21 ment from the Mass Transit Account and the Future

22 Transit Investment Sub Account of the Future Investment

23 Account. An election under this subsection shall not affect

24 a State’s continued eligibility for revenues provided
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1 through the general fund of the Treasury for transit pro2 grams.

3 (b) DETERMINATION AND USE OF MASS TRANSIT

4 BLOCK GRANT.—

5 (1) DETERMINATION OF AMOUNT OF BLOCK

6 GRANT.—Subject to subsection (c), the amount of

7 the mass transit block grant for any tier I mass

8 transit State for any fiscal year is equal to the

9 amount of taxes transferred to the Mass Transit Ac10 count and the Future Transit Investment Sub Ac11 count of the Future Investment Account for such

12 fiscal year which is attributable to highway users in

13 that State as determined by the Secretary of the

14 Treasury.

15 (2) USE OF BLOCK GRANT.—The mass transit

16 block grant for any tier I mass transit State shall

17 be available, as provided by appropriation Acts, to

18 the State for any surface transportation purpose in

19 such State. Any project carrying out such a purpose

20 shall be exempt from any Federal regulation other

21 than with respect to health and safety standards and

22 practices.

23 (c) ELECTION TO ELIMINATE MASS TRANSIT FUEL

24 TAX RATE WITH CORRESPONDING ELIMINATION OF

25 BLOCK GRANT.—
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1 (1) IN GENERAL.—With respect to fiscal years

2 beginning after the satisfaction year and ending with

3 the termination of the election period, a State which

4 has made an election under subsection (a) may no5 tify the Secretary (in the same manner as such an

6 election) of an election to become a tier II mass

7 transit State and to eliminate the financing rate

8 with respect to the taxes transferred to the Mass

9 Transit Account and the Future Transit Investment

10 Sub Account of the Future Investment Account

11 which are attributable to the highway users of the

12 State in lieu of the mass transit block grant for such

13 fiscal years.

14 (2) ELIMINATION OF MASS TRANSIT FUEL TAX

15 RATE.—

16 (A) IN GENERAL.—Upon notification by

17 the Secretary of an election by a State under

18 paragraph (1), the Secretary of the Treasury

19 shall, not later than August 1, submit to the

20 Committee on Ways and Means of the House of

21 Representatives and the Committee on Finance

22 of the Senate, a report that notifies the com23 mittees of such an election.

24 (B) CONGRESSIONAL APPROVAL RE25 QUIRED.—The Secretary of the Treasury shall
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1 not implement the election included in the re2 port submitted under paragraph (1) unless a

3 joint resolution is enacted, in accordance with

4 paragraph (3), approving such election before

5 the following October 1.

6 (3) CONGRESSIONAL CONSIDERATION.—

7 (A) TERMS OF THE RESOLUTION.—For

8 purposes of paragraph (2), the term ‘‘joint res9 olution’’ means only a joint resolution that is

10 introduced before October 1 and—

11 (i) that does not have a preamble;

12 (ii) the matter after the resolving

13 clause of which is as follows: ‘‘That Con14 gress approves the elimination of the mass

15 transit fuel tax rate for the State of 

16 submitted on ’’, the blank spaces

17 being filled in with the appropriate State

18 and date, respectively; and

19 (iii) the title of which is as follows:

20 ‘‘Joint resolution approving the elimination

21 of the mass transit fuel tax rate.’’.

22 (B) CONSIDERATION.—A resolution de23 scribed in subparagraph (A) shall be considered

24 in the same manner as a resolution is consid-
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1 ered under clauses (ii), (iii), and (iv) of section

2 3(e)(2)(D).

3 (4) SATISFACTION YEAR.—For purposes of this

4 section, the term ‘‘satisfaction year’’ means the fis5 cal year during which all Federal transit program

6 obligations of a State payable from the Mass Transit

7 Account and the Future Transit Investment Sub Ac8 count of the Future Investment Account existing on

9 the date of the election by such State described in

10 subsection (a) are paid.

11 SEC. 5. ENFORCEMENT.

12 If the Secretary determines that a core program

13 State (or any other State under section 4(b)(2)) has used

14 funds under this Act for a purpose that is not a surface

15 transportation purpose, the amount of the improperly used

16 funds shall be deducted from any amount the State would

17 otherwise receive from the Highway Account for the fiscal

18 year that begins after the date of the determination.

19 SEC. 6. REPORTS.

20 (a) ANNUAL STATE ASSESSMENT.—A core program

21 State shall—

22 (1) assess the operation of the State surface

23 transportation program funded under this Act in

24 each fiscal year, including the status of the core

25 highway programs in the State; and
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1 (2) report to the Secretary, by January 1 fol2 lowing the end of the fiscal year, on the result of the

3 assessment.

4 (b) REPORT OF THE SECRETARY.—The Secretary

5 shall submit to the appropriate committees of Congress

6 an annual report and evaluation of the State surface

7 transportation programs funded under this Act based on

8 the State assessments and reports submitted under sub9 section (a). Such report shall include any conclusions and

10 recommendations that the Secretary considers appro11 priate.

12 SEC. 7. INTERSTATE SURFACE TRANSPORTATION COM13 PACTS.

14 (a) DEFINITIONS.—In this section, the following defi15 nitions apply:

16 (1) INFRASTRUCTURE BANK.—The term ‘‘infra17 structure bank’’ means a surface transportation in18 frastructure bank established under an interstate

19 compact under subsection (b)(5) and described in

20 subsection (d).

21 (2) PARTICIPATING STATES.—The term ‘‘par22 ticipating States’’ means the States that are parties

23 to an interstate compact entered into under sub24 section (b).
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1 (3) SURFACE TRANSPORTATION PROJECT.—The

2 term ‘‘surface transportation project’’ means a sur3 face transportation project, program, or activity de4 scribed in subsection (b).

5 (b) CONSENT OF CONGRESS.—In order to increase

6 public investment, attract needed private investment, and

7 promote an intermodal transportation network, Congress

8 grants consent to States to enter into interstate compacts

9 to—

10 (1) promote the continuity, quality, and safety

11 of the Interstate System (as defined in section 101

12 of title 23, United States Code);

13 (2) develop programs to promote and fund sur14 face transportation safety initiatives and establish

15 surface transportation safety standards for the par16 ticipating States;

17 (3) conduct long-term planning for surface

18 transportation infrastructure in the participating

19 States;

20 (4) develop design and construction standards

21 for infrastructure described in paragraph (3) to be

22 used by the participating States; and

23 (5) establish surface transportation infrastruc24 ture banks to promote regional or other multistate
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1 investment in infrastructure described in paragraph

2 (3).

3 (c) FINANCING.—An interstate compact established

4 by participating States under subsection (b) to carry out

5 a surface transportation project may provide that, in order

6 to carry out the compact, the participating States may—

7 (1) accept contributions from a unit of State or

8 local government or a person;

9 (2) use any Federal or State funds made avail10 able for that type of surface transportation project;

11 (3) on such terms and conditions as the partici12 pating States consider advisable—

13 (A) borrow money on a short-term basis

14 and issue notes for the borrowing; and

15 (B) issue bonds; and

16 (4) obtain financing by other means permitted

17 under Federal or State law, including surface trans18 portation infrastructure banks under subsection (d).

19 (d) INFRASTRUCTURE BANKS.—

20 (1) IN GENERAL.—An infrastructure bank

21 may—

22 (A) make loans;

23 (B) under the joint or separate authority

24 of the participating States with respect to the

25 infrastructure bank, issue such debt as the in-
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1 frastructure bank and the participating States

2 determine appropriate; and

3 (C) provide other assistance to public or

4 private entities constructing, or proposing to

5 construct or initiate, surface transportation

6 projects.

7 (2) FORMS OF ASSISTANCE.—

8 (A) IN GENERAL.—An infrastructure bank

9 may make a loan or provide other assistance

10 described in subparagraph (C) to a public or

11 private entity in an amount equal to all or part

12 of the construction cost, capital cost, or initi13 ation cost of a surface transportation project.

14 (B) SUBORDINATION OF ASSISTANCE.—

15 The amount of any loan or other assistance de16 scribed in subparagraph (C) that is received for

17 a surface transportation project under this sec18 tion may be subordinated to any other debt fi19 nancing for the surface transportation project.

20 (C) OTHER ASSISTANCE.—Other assist21 ance referred to in subparagraphs (A) and (B)

22 includes any use of funds for the purpose of—

23 (i) credit enhancement;

24 (ii) a capital reserve for bond or debt

25 instrument financing;
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1 (iii) bond or debt instrument financ2 ing issuance costs;

3 (iv) bond or debt issuance financing

4 insurance;

5 (v) subsidization of interest rates;

6 (vi) letters of credit;

7 (vii) any credit instrument;

8 (viii) bond or debt financing instru9 ment security; and

10 (ix) any other form of debt financing

11 that relates to the qualifying surface trans12 portation project.

13 (3) NO OBLIGATION OF UNITED STATES.—

14 (A) IN GENERAL.—The establishment

15 under this section of an infrastructure bank

16 does not constitute a commitment, guarantee,

17 or obligation on the part of the United States

18 to any third party with respect to any security

19 or debt financing instrument issued by the

20 bank. No third party shall have any right

21 against the United States for payment solely by

22 reason of the establishment.

23 (B) STATEMENT ON INSTRUMENT.—Any

24 security or debt financing instrument issued by

25 an infrastructure bank shall expressly state that
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1 the security or instrument does not constitute a

2 commitment, guarantee, or obligation of the

3 United States.

4 SEC. 8. FEDERAL-AID FACILITY PRIVATIZATION.

5 (a) DEFINITIONS.—In this section, the following defi6 nitions apply:

7 (1) EXECUTIVE AGENCY.—The term ‘‘Executive

8 agency’’ has the meaning provided in section 105 of

9 title 5, United States Code.

10 (2) PRIVATIZATION.—The term ‘‘privatization’’

11 means the disposition or transfer of a transportation

12 infrastructure asset, whether by sale, lease, or simi13 lar arrangement, from a State or local government

14 to a private party.

15 (3) STATE OR LOCAL GOVERNMENT.—The term

16 ‘‘State or local government’’ means the government

17 of—

18 (A) any State;

19 (B) the District of Columbia;

20 (C) any commonwealth, territory, or pos21 session of the United States;

22 (D) any county, municipality, city, town,

23 township, local public authority, school district,

24 special district, intrastate district, regional or

25 interstate government entity, council of govern-
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1 ments, or agency or instrumentality of a local

2 government; or

3 (E) any federally recognized Indian tribe.

4 (4) TRANSPORTATION INFRASTRUCTURE

5 ASSET.—

6 (A) IN GENERAL.—The term ‘‘transpor7 tation infrastructure asset’’ means any surface8 transportation-related asset financed in whole

9 or in part by the Federal Government, includ10 ing a road, tunnel, bridge, or mass-transit-relat11 ed or rail-related asset.

12 (B) EXCLUSION.—The term does not in13 clude any transportation-related asset on the

14 Interstate System (as defined in section 101 of

15 title 23, United States Code).

16 (b) PRIVATIZATION INITIATIVES BY STATE AND

17 LOCAL GOVERNMENTS.—The head of each Executive

18 agency shall—

19 (1) assist State and local governments in efforts

20 to privatize the transportation infrastructure assets

21 of the State and local governments; and

22 (2) subject to subsection (c), approve requests

23 from State and local governments to privatize trans24 portation infrastructure assets and waive or modify
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1 any condition relating to the original Federal pro2 gram that funded the asset.

3 (c) CRITERIA.—The head of an Executive agency

4 shall approve a request described in subsection (b)(2) if—

5 (1) the State or local government demonstrates

6 that a market mechanism, legally enforceable agree7 ment, or regulatory mechanism will ensure that the

8 transportation infrastructure asset will continue to

9 be used for the general objectives of the original

10 Federal program that funded the asset (which shall

11 not be considered to include every condition required

12 for the recipient of Federal funds to have obtained

13 the original Federal funds), so long as needed for

14 those objectives; and

15 (2) the private party purchasing or leasing the

16 transportation infrastructure asset agrees to comply

17 with all applicable conditions of the original Federal

18 program.

19 (d) LACK OF OBLIGATION TO REPAY FEDERAL

20 FUNDS.—A State or local government shall have no obli21 gation to repay to any agency of the Federal Government

22 any Federal funds received by the State or local govern23 ment in connection with a transportation infrastructure

24 asset that is privatized under this section.

25 (e) USE OF PROCEEDS.—
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1 (1) IN GENERAL.—Subject to paragraph (2), a

2 State or local government may use proceeds from

3 the privatization of a transportation infrastructure

4 asset to the extent permitted under applicable condi5 tions of the original Federal program.

6 (2) RECOVERY OF CERTAIN COSTS.—Notwith7 standing any other provision of law, the State or

8 local government shall be permitted to recover from

9 the privatization of a transportation infrastructure

10 asset—

11 (A) the capital investment in the transpor12 tation infrastructure asset made by the State or

13 local government;

14 (B) an amount equal to the unreimbursed

15 operating expenses in the transportation infra16 structure asset paid by the State or local gov17 ernment; and

18 (C) a reasonable rate of return on the in19 vestment made under subparagraph (A) and ex20 penses paid under subparagraph (B).

21 SEC. 9. ESTABLISHMENT OF FUTURE INVESTMENT AC22 COUNT.

23 Section 9503 of the Internal Revenue Code of 1986

24 (relating to Highway Trust Fund), as amended by section
29

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1 901(d) of the Taxpayer Relief Act of 1997, is amended

2 by adding at the end the following:

3 ‘‘(f) ESTABLISHMENT OF FUTURE INVESTMENT AC4 COUNT.—

5 ‘‘(1) CREATION OF ACCOUNT.—There is estab6 lished in the Highway Trust Fund a separate ac7 count to be known as the ‘Future Investment Ac8 count’, consisting of such amounts as may be trans9 ferred or credited to the Future Highway Invest10 ment Sub Account and the Future Transit Invest11 ment Sub Account of the Future Investment Ac12 count as provided in this subsection or section

13 9602(b).

14 ‘‘(2) TRANSFERS TO FUTURE INVESTMENT AC15 COUNT.—

16 ‘‘(A) IN GENERAL.—The Secretary of the

17 Treasury shall transfer to the Future Highway

18 Investment Sub Account the future highway in19 vestment portion and to the Future Transit In20 vestment Sub Account the future transit invest21 ment portion of the amounts appropriated to

22 the Highway Trust Fund under subsection (b)

23 which are attributable to taxes under sections

24 4041 and 4081 imposed after September 30,

25 1997.
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1 ‘‘(B) FUTURE INVESTMENT PORTIONS.—

2 For purposes of subparagraph (A)—

3 ‘‘(i) the term ‘future highway invest4 ment portion’ means an amount deter5 mined at the rate of 3.44 cents for each

6 gallon with respect to which tax was im7 posed under section 4041 or 4081, and

8 ‘‘(ii) the term ‘future transit invest9 ment portion’ means an amount deter10 mined at the rate of .86 cent for each gal11 lon with respect to which tax was so im12 posed.

13 ‘‘(3) EXPENDITURES FROM ACCOUNT.—

14 Amounts in the Future Investment Account shall be

15 available, as provided by appropriation Acts, in a

16 Federal budget neutral manner, for making expendi17 tures after October 1, 1997—

18 ‘‘(A) in the case of the Future Highway

19 Investment Sub Account, in accordance with

20 elections made under section 3(a) of the Sur21 face Transportation and Transit Empowerment

22 Act, and

23 ‘‘(B) in the case of the Future Transit In24 vestment Sub Account, in accordance with elec25 tions made under section 4(a) of the Surface
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1 Transportation and Transit Empowerment

2 Act.’’.

3 SEC. 10. EFFECTIVE DATE CONTINGENT UPON CERTIFI4 CATION OF DEFICIT NEUTRALITY.

5 (a) PURPOSE.—The purpose of this section is to en6 sure that—

7 (1) this Act will become effective only if the Di8 rector of the Office of Management and Budget (re9 ferred to in this section as the ‘‘Director’’) certifies

10 that this Act is deficit neutral;

11 (2) discretionary spending limits are reduced to

12 capture the savings realized in devolving transpor13 tation functions to the State level pursuant to this

14 Act; and

15 (3) the tax reduction made by this Act is not

16 scored under pay-as-you-go and does not inadvert17 ently trigger a sequestration.

18 (b) EFFECTIVE DATE CONTINGENCY.—Notwith19 standing any other provision of this Act, this Act shall

20 take effect only if—

21 (1) the Director submits the report as required

22 in subsection (c); and

23 (2) the report contains a certification by the Di24 rector that, based on the required estimates, the re25 duction in discretionary outlays resulting from the
32

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1 reduction in contract authority is at least as great

2 as the reduction in revenues for each fiscal year

3 through fiscal year 2003.

4 (c) OMB ESTIMATES AND REPORT.—

5 (1) REQUIREMENTS.—Not later than 5 cal6 endar days after the date of notification by the Sec7 retary of any election described in section 3(b), the

8 Director shall—

9 (A) estimate the net change in revenues re10 sulting from this Act for each fiscal year

11 through fiscal year 2003;

12 (B) estimate the net change in discre13 tionary outlays resulting from the reduction in

14 contract authority under this Act for each fiscal

15 year through fiscal year 2003;

16 (C) determine, based on those estimates,

17 whether the reduction in discretionary outlays

18 is at least as great as the reduction in revenues

19 for each fiscal year through fiscal year 2003;

20 and

21 (D) submit to the Congress a report set22 ting forth the estimates and determination.

23 (2) APPLICABLE ASSUMPTIONS AND GUIDE24 LINES.—
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1 (A) REVENUE ESTIMATES.—The revenue

2 estimates required under paragraph (1)(B)

3 shall be predicated on the same economic and

4 technical assumptions and scorekeeping guide5 lines that would be used for estimates made

6 pursuant to section 252(d) of the Balanced

7 Budget and Emergency Deficit Control Act of

8 1985 (2 U.S.C. 902(d)).

9 (B) OUTLAY ESTIMATES.—The outlay esti10 mates required under paragraph (1)(B) shall be

11 determined by comparing the level of discre12 tionary outlays resulting from this Act with the

13 corresponding level of discretionary outlays pro14 jected in the baseline under section 257 of the

15 Balanced Budget and Emergency Deficit Con16 trol Act of 1985 (2 U.S.C. 907).

17 (d) CONFORMING ADJUSTMENT TO DISCRETIONARY

18 SPENDING LIMITS.—Upon compliance with the require19 ments specified in subsection (b), the Director shall adjust

20 the adjusted discretionary spending limits for each fiscal

21 year through fiscal year 2003 under section 601(a)(2) of

22 the Congressional Budget Act of 1974 (2 U.S.C.

23 665(a)(2)) by the estimated reductions in discretionary

24 outlays under subsection (a)(2).
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1 (e) PAYGO INTERACTION.—Upon compliance with the

2 requirements specified in subsection (b), no changes in

3 revenues estimated to result from the enactment of this

4 Act shall be counted for the purposes of section 252(d)

5 of the Balanced Budget and Emergency Deficit Control

6 Act of 1985 (2 U.S.C. 902(d)).

Æ