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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1900 Introduced in Senate (IS)]

106th CONGRESS
  1st Session
                                S. 1900

To amend the Internal Revenue Code of 1986 to allow a credit to holders 
      of qualified bonds issued by Amtrak, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           November 10, 1999

 Mr. Lautenberg (for himself, Mr. Jeffords, Mr. Moynihan, Mr. Cleland, 
Mr. Kerry, Mr. Biden, Mrs. Boxer, Mr. Kohl, Mr. Specter, Mr. Robb, Mr. 
  Leahy, Mr. DeWine, Mr. Sarbanes, Mr. Torricelli, Mr. L. Chafee, Mr. 
 Graham, Mr. Kennedy, Ms. Mikulski, Ms. Snowe, Mr. Schumer, Mr. Levin, 
and Mrs. Hutchison) 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 a credit to holders 
      of qualified bonds issued by Amtrak, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``High-Speed Rail Investment Act''.

SEC. 2. CREDIT TO HOLDERS OF QUALIFIED AMTRAK BONDS.

    (a) In General.--Part IV of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to credits against tax) is 
amended by adding at the end the following new subpart:

``Subpart H--Nonrefundable Credit for Holders of Qualified Amtrak Bonds

                              ``Sec. 54. Credit to holders of qualified 
                                        Amtrak bonds.

``SEC. 54. CREDIT TO HOLDERS OF QUALIFIED AMTRAK BONDS.

    ``(a) Allowance of Credit.--In the case of a taxpayer who holds a 
qualified Amtrak bond on a credit allowance date of such bond which 
occurs during the taxable year, there shall be allowed as a credit 
against the tax imposed by this chapter for such taxable year the 
amount determined under subsection (b).
    ``(b) Amount of Credit.--
            ``(1) In general.--The amount of the credit determined 
        under this subsection with respect to any credit allowance date 
        for a qualified Amtrak bond is 25 percent of the annual credit 
        determined with respect to such bond.
            ``(2) Annual credit.--The annual credit determined with 
        respect to any qualified Amtrak bond is the product of--
                    ``(A) the applicable credit rate, multiplied by
                    ``(B) the outstanding face amount of the bond.
            ``(3) Applicable credit rate.--For purposes of paragraph 
        (2), the applicable credit rate with respect to an issue is the 
        rate equal to an average market yield (as of the day before the 
        date of issuance of the issue) on outstanding long-term 
        corporate debt obligations (determined under regulations 
        prescribed by the Secretary).
            ``(4) Special rule for issuance and redemption.--In the 
        case of a bond which is issued during the 3-month period ending 
        on a credit allowance date, the amount of the credit determined 
        under this subsection with respect to such credit allowance 
        date shall be a ratable portion of the credit otherwise 
        determined based on the portion of the 3-month period during 
        which the bond is outstanding. A similar rule shall apply when 
        the bond is redeemed.
    ``(c) Limitation Based on Amount of Tax.--
            ``(1) In general.--The credit allowed under subsection (a) 
        for any taxable year shall not exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under this 
                part (other than this subpart and subpart C).
            ``(2) Carryover of unused credit.--If the credit allowable 
        under subsection (a) exceeds the limitation imposed by 
        paragraph (1) for such taxable year, such excess shall be 
        carried to the succeeding taxable year and added to the credit 
        allowable under subsection (a) for such taxable year.
    ``(d) Qualified Amtrak Bond.--For purposes of this part--
            ``(1) In general.--The term `qualified Amtrak bond' means 
        any bond issued as part of an issue if--
                    ``(A) 95 percent or more of the proceeds of such 
                issue are--
                            ``(i) to be used for any qualified project, 
                        or
                            ``(ii) to be pledged to secure payments and 
                        other obligations incurred by the National 
                        Railroad Passenger Corporation in connection 
                        with any qualified project,
                    ``(B) the bond is issued by the National Railroad 
                Passenger Corporation,
                    ``(C) the issuer--
                            ``(i) designates such bond for purposes of 
                        this section,
                            ``(ii) certifies that it meets the State 
                        contribution requirement of paragraph (2) with 
                        respect to such project, and
                            ``(iii) certifies that it has obtained the 
                        written approval of the Secretary of 
                        Transportation for such project,
                    ``(D) the term of each bond which is part of such 
                issue does not exceed 20 years, and
                    ``(E) the payment of principal with respect to such 
                bond is guaranteed by the National Railroad Passenger 
                Corporation.
            ``(2) State contribution requirement.--
                    ``(A) In general.--For purposes of paragraph 
                (1)(C)(ii), the State contribution requirement of this 
                paragraph is met with respect to any qualified project 
                if the National Railroad Passenger Corporation has a 
                written binding commitment from 1 or more States to 
                make matching contributions not later than the date of 
issuance of the issue of not less than 20 percent of the cost of the 
qualified project.
                    ``(B) Use of state matching contributions.--The 
                matching contributions described in subparagraph (A) 
                with respect to each qualified project shall be used--
                            ``(i) in the case of an amount equal to 20 
                        percent of the cost of such project, to redeem 
                        bonds which are a part of the issue with 
                        respect to such project, and
                            ``(ii) in the case of any remaining amount, 
                        at the election of the National Railroad 
                        Passenger Corporation and the contributing 
                        State--
                                    ``(I) to fund the qualified 
                                project, or
                                    ``(II) to redeem such bonds, or
                                    ``(III) for the purposes of 
                                subclauses (I) and (II).
            ``(3) Qualified project.--The term `qualified project' 
        means--
                    ``(A) the acquisition, financing, or refinancing of 
                equipment, rolling stock, and other capital 
                improvements for the northeast rail corridor between 
                Washington, D.C. and Boston, Massachusetts,
                    ``(B) the acquisition, financing, or refinancing of 
                equipment, rolling stock, and other capital 
                improvements for the improvement of train speeds or 
                safety (or both) on the high-speed rail corridors 
                designated under section 104(d)(2) of title 23, United 
                States Code, and
                    ``(C) with respect to not more than 10 percent of 
                the net proceeds of an issue, the acquisition, 
                financing, or refinancing of equipment, rolling stock, 
                and other capital improvements for non-designated high-
                speed rail corridors, including station rehabilitation, 
                track or signal improvements, or the elimination of 
                grade crossings.
            ``(4) Temporary period exception.--A bond shall not be 
        treated as failing to meet the requirement of paragraph (1)(A) 
        solely by reason of the fact that the proceeds of the issue of 
        which such bond is a part are invested for a reasonable 
        temporary period (but not more than 36 months) until such 
        proceeds are needed for the purpose for which such issue was 
        issued.
    ``(e) Limitations on Amount of Bonds Designated.--
            ``(1) In general.--There is a qualified Amtrak bond 
        limitation for each fiscal year. Such limitation is--
                    ``(A) $1,000,000,000 for each of the fiscal years 
                2001 through 2010, and
                    ``(B) zero after 2010.
            ``(2) Carryover of unused limitation.--If for any fiscal 
        year--
                    ``(A) the limitation amount under paragraph (1), 
                exceeds
                    ``(B) the amount of bonds issued during such year 
                which are designated under subsection (d)(1)(C)(i),
        the limitation amount under paragraph (1) for the following 
        fiscal year shall be increased by the amount of such excess.
    ``(f) Other Definitions.--For purposes of this subpart--
            ``(1) Bond.--The term `bond' includes any obligation.
            ``(2) Credit allowance date.--The term `credit allowance 
        date' means--
                    ``(A) March 15,
                    ``(B) June 15,
                    ``(C) September 15, and
                    ``(D) December 15.
        Such term includes the last day on which the bond is 
        outstanding.
            ``(3) State.--The term `State' includes the District of 
        Columbia.
    ``(g) Partnership; S Corporation; and Other Pass-Thru Entities.--
Under regulations prescribed by the Secretary, in the case of a 
partnership, trust, S corporation, or other pass-thru entity, rules 
similar to the rules of section 41(g) shall apply with respect to the 
credit allowable under subsection (a).
    ``(h) Bonds Held by Regulated Investment Companies.--If any 
qualified Amtrak bond is held by a regulated investment company, the 
credit determined under subsection (a) shall be allowed to shareholders 
of such company under procedures prescribed by the Secretary.
    ``(i) Use of Trust Account.--
            ``(1) In general.--The amount of any matching contribution 
        with respect to a qualified project described in subsection 
        (d)(2)(B)(i) or (d)(2)(B)(ii)(II) and the temporary period 
        investment earnings on proceeds of the issue with respect to 
such project described in subsection (d)(4), and any earnings thereon, 
shall be held in a trust account by a trustee independent of the 
National Railroad Passenger Corporation to be used to redeem bonds 
which are part of such issue.
            ``(2) Use of remaining funds in trust account.--Upon the 
        repayment of the principal of all qualified Amtrak bonds issued 
        under this section, any remaining funds in the trust account 
        described in paragraph (1) shall be available to the trustee 
        described in paragraph (1) to meet any remaining obligations 
        under any guaranteed investment contract used to secure 
        earnings sufficient to repay the principal of such bonds. Any 
        remaining balance in such trust account shall be paid to the 
        United States to be used to redeem public-debt obligations.
    ``(j) Credit Included in Gross Income.--Gross income includes the 
amount of the credit allowed to the taxpayer under this section 
(determined without regard to subsection (c)) and the amount so 
included shall be treated as interest income.
    ``(k) Credits May Be Stripped.--Under regulations prescribed by the 
Secretary--
            ``(1) In general.--There may be a separation (including at 
        issuance) of the ownership of a qualified Amtrak bond and the 
        entitlement to the credit under this section with respect to 
        such bond. In case of any such separation, the credit under 
        this section shall be allowed to the person who on the credit 
        allowance date holds the instrument evidencing the entitlement 
        to the credit and not to the holder of the bond.
            ``(2) Certain rules to apply.--In the case of a separation 
        described in paragraph (1), the rules of section 1286 shall 
        apply to the qualified Amtrak bond as if it were a stripped 
        bond and to the credit under this section as if it were a 
        stripped coupon.
    ``(l) Treatment for Estimated Tax Purposes.--Solely for purposes of 
sections 6654 and 6655, the credit allowed by this section to a 
taxpayer by reason of holding a qualified Amtrak bond on a credit 
allowance date shall be treated as if it were a payment of estimated 
tax made by the taxpayer on such date.
    ``(m) Credit May Be Transferred.--Nothing in any law or rule of law 
shall be construed to limit the transferability of the credit allowed 
by this section through sale and repurchase agreements.
    ``(n) Reporting.--Issuers of qualified Amtrak bonds shall submit 
reports similar to the reports required under section 149(e).''
    (b) Reporting.--Subsection (d) of section 6049 of the Internal 
Revenue Code of 1986 (relating to returns regarding payments of 
interest) is amended by adding at the end the following:
            ``(8) Reporting of credit on qualified amtrak bonds.--
                    ``(A) In general.--For purposes of subsection (a), 
                the term `interest' includes amounts includible in 
                gross income under section 54(j) and such amounts shall 
                be treated as paid on the credit allowance date (as 
                defined in section 54(f)(2)).
                    ``(B) Reporting to corporations, etc.--Except as 
                otherwise provided in regulations, in the case of any 
                interest described in subparagraph (A) of this 
                paragraph, subsection (b)(4) of this section shall be 
                applied without regard to subparagraphs (A), (H), (I), 
                (J), (K), and (L)(i).
                    ``(C) Regulatory authority.--The Secretary may 
                prescribe such regulations as are necessary or 
                appropriate to carry out the purposes of this 
                paragraph, including regulations which require more 
                frequent or more detailed reporting.''
    (c) Clerical Amendments.--
            (1) The table of subparts for part IV of subchapter A of 
        chapter 1 of the Internal Revenue Code of 1986 is amended by 
        adding at the end the following:

                              ``Subpart H. Nonrefundable Credit for 
                                        Holders of Qualified Amtrak 
                                        Bonds.''
            (2) Section 6401(b)(1) of such Code is amended by striking 
        ``and G'' and inserting ``G, and H''.
    (d) Effective Date.--The amendments made by this section shall 
apply to obligations issued after September 30, 2000.
                                 <all>
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