II 

110TH CONGRESS 

2D SESSION S. 3171 

To amend the Internal Revenue Code of 1986 to exclude certain tax-exempt 

financing of energy transportation infrastructure from the private business use tests, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 19, 2008 

Mr. BARRASSO 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 exclude 

certain tax-exempt financing of energy transportation infrastructure from the private business use tests, 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. TAX-EXEMPT FINANCING OF ENERGY TRANS4 PORTATION INFRASTRUCTURE NOT SUBJECT 

5 TO PRIVATE BUSINESS USE TESTS. 

6 (a) IN GENERAL.—Section 141(b)(6) of the Internal 

7 Revenue Code of 1986 (defining private business use) is 


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1 amended by adding at the end the following new subpara2 graph: 

3 ‘‘(C) EXCEPTION FOR CERTAIN ENERGY

4 TRANSPORTATION INFRASTRUCTURE.— 

5 ‘‘(i) IN GENERAL.—For purposes of 

6 the 1st sentence of subparagraph (A), the 

7 operation or use of any property described 

8 in clause (ii) by any person which is not a 

9 governmental unit shall not be considered 

10 a private business use. 

11 ‘‘(ii) PROPERTY DESCRIBED.—For 

12 purposes of clause (i), the following prop13 erty is described in this clause: 

14 ‘‘(I) Any tangible property used 

15 to transmit electricity at 230 or more 

16 kilovolts if such property is placed in 

17 service as part of a State or multi18 State effort to improve interstate elec19 tricity transmission and is physically 

20 located in not less than 2 States. 

21 ‘‘(II) Any tangible property used 

22 to transmit electricity generated from 

23 renewable resources. 

24 ‘‘(III) Any tangible property used 

25 as a transmission pipeline for crude 


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1 oil or diesel fuel produced from coal 

2 or other synthetic petroleum products 

3 produced from coal if such property is 

4 placed in service as part of a State or 

5 multi-State effort to improve the 

6 transportation of crude oil or diesel 

7 fuel produced from coal or other syn8 thetic petroleum products produced 

9 from coal. 

10 ‘‘(IV) Any tangible property used 

11 as a carbon dioxide transmission pipe12 line if such property is placed in serv13 ice as part of a State or multi-State 

14 effort to improve interstate or intra15 state efforts to develop transportation 

16 infrastructure for purposes of perma17 nently sequestering carbon dioxide.’’. 

18 (b) EXCEPTION TO PRIVATE LOAN FINANCING

19 TEST.—Section 141(c)(2) of the Internal Revenue Code 

20 of 1986 (relating to exception for tax assessment, etc., 

21 loans) is amended— 

22 (1) by striking ‘‘or’’ at the end of subparagraph 

23 (B), 

24 (2) by striking the period at the end of sub25 paragraph (C) and inserting ‘‘, or’’, and 


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1 (3) by adding at the end the following new sub2 paragraph: 

3 ‘‘(D) enables the borrower to finance any 

4 property described in subsection (b)(6)(C)(ii).’’. 

5 (c) REDUCTION OF STATE VOLUME CAP BY AMOUNT

6 OF ENERGY TRANSPORTATION INFRASTRUCTURE FI7 NANCING.—Section 146 of the Internal Revenue Code of 

8 1986 (relating to volume cap) is amended by adding at 

9 the end the following new subsection: 

10 ‘‘(o) REDUCTION FOR ENERGY TRANSPORTATION IN11 FRASTRUCTURE FINANCING.—The volume cap of any 

12 issuing authority for any calendar year shall be reduced 

13 by the amount of bonds issued as part of an issue by such 

14 authority to provide for property described in section 

15 141(b)(6)(C)(ii).’’. 

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

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

18 the enactment of this Act and before December 31, 2015. 

19 SEC. 2. LIMITATION ON DISCRIMINATORY TAXATION OF 

20 CERTAIN PIPELINE PROPERTY. 

21 (a) DEFINITIONS.—For purposes of section: 

22 (1) ASSESSMENT.—The term ‘‘assessment’’ 

23 means valuation for a property tax levied by a taxing 

24 authority. 


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1 (2) ASSESSMENT JURISDICTION.—The term 

2 ‘‘assessment jurisdiction’’ means a geographical area 

3 used in determining the assessed value of property 

4 for ad valorem taxation. 

5 (3) COMMERCIAL AND INDUSTRIAL PROP6 ERTY.—The term ‘‘commercial and industrial prop7 erty’’ means property (excluding pipeline property, 

8 public utility property, and land used primarily for 

9 agricultural purposes or timber growth) devoted to 

10 commercial or industrial use and subject to a prop11 erty tax levy. 

12 (4) PIPELINE PROPERTY.—The term ‘‘pipeline 

13 property’’ means all property, real, personal, and in14 tangible, owned or used by a natural gas pipeline 

15 providing transportation or storage of natural gas, 

16 subject to the jurisdiction of the Federal Energy 

17 Regulatory Commission. 

18 (5) PUBLIC UTILITY PROPERTY.—The term 

19 ‘‘public utility property’’ means property (excluding 

20 pipeline property) that is devoted to public service 

21 and is owned or used by any entity that performs a 

22 public service and is regulated by any governmental 

23 agency. 

24 (b) DISCRIMINATORY ACTS.—The acts specified in 

25 this subsection unreasonably burden and discriminate 


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1 against interstate commerce. A State, subdivision of a 

2 State, authority acting for a State or subdivision of a 

3 State, or any other taxing authority (including a taxing 

4 jurisdiction and a taxing district) may not do any of the 

5 following such acts: 

6 (1) Assess pipeline property at a value that has 

7 a higher ratio to the true market value of the pipe8 line property than the ratio that the assessed value 

9 of other commercial and industrial property in the 

10 same assessment jurisdiction has to the true market 

11 value of the other commercial and industrial prop12 erty. 

13 (2) Levy or collect a tax on an assessment that 

14 may not be made under paragraph (1). 

15 (3) Levy or collect an ad valorem property tax 

16 on pipeline property at a tax rate that exceeds the 

17 tax rate applicable to commercial and industrial 

18 property in the same assessment jurisdiction. 

19 (4) Impose any other tax that discriminates 

20 against a pipeline providing transportation subject to 

21 the jurisdiction of the Federal Energy Regulatory 

22 Commission. 

23 (c) JURISDICTION OF COURTS; RELIEF.— 

24 (1) GRANT OF JURISDICTION.—Notwith25 standing section 1341 of title 28, United States 


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1 Code, and notions of comity, and without regard to 

2 the amount in controversy or citizenship of the par3 ties, the district courts of the United States shall 

4 have jurisdiction, concurrent with other jurisdiction 

5 of the courts of the United States, of States, and of 

6 all other taxing authorities and taxing jurisdictions, 

7 to prevent a violation of subsection (b). 

8 (2) RELIEF.—Except as otherwise provided in 

9 this paragraph, relief may be granted under this Act 

10 only if the ratio of assessed value to true market 

11 value of pipeline property exceeds by at least 5 per12 cent the ratio of assessed value to true market value 

13 of other commercial and industrial property in the 

14 same assessment jurisdiction. If the ratio of the as15 sessed value of other commercial and industrial 

16 property in the assessment jurisdiction to the true 

17 market value of all other commercial and industrial 

18 property cannot be determined to the satisfaction of 

19 the court through the random-sampling method 

20 known as a sales assessment ratio study (to be car21 ried out under statistical principles applicable to 

22 such a study), each of the following shall be a viola23 tion of subsection (b) for which relief under this sec24 tion may be granted: 


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1 (A) An assessment of the pipeline property 

2 at a value that has a higher ratio of assessed 

3 value to the true market value of the pipeline 

4 property than the ratio of the assessed value of 

5 all other property (excluding public utility prop6 erty) subject to a property tax levy in the as7 sessment jurisdiction has to the true market 

8 value of all other property (excluding public 

9 utility property). 

10 (B) The collection of an ad valorem prop11 erty tax on the pipeline property at a tax rate 

12 that exceeds the tax rate applicable to all other 

13 taxable property (excluding public utility prop14 erty) in the taxing jurisdiction. 

15 SEC. 3. NATURAL GAS PIPELINE INTEGRITY REASSESS16 MENT INTERVALS BASED ON RISK. 

17 (a) IN GENERAL.—Section 60109(c)(3)(B) of title 

18 49, United States Code, is amended by inserting ‘‘, until 

19 the Secretary issues regulations basing the reassessment 

20 intervals on technical data, risk factors, and engineering 

21 analysis, consistent with the recommendations of the 

22 Comptroller General of the United States in Report 06– 

23 945’’ after ‘‘subparagraph (A)’’. 


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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall take effect on the date of the enactment 

3 of this Act. 

Æ 


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