II 

108TH CONGRESS 

1ST SESSION S. 1917

To amend the Internal Revenue Code of 1986 to permit the issuance of 

tax-exempt bonds for certain air and water pollution control facilities, 

and to provide that the volume cap for private activity bonds shall 

not apply to bonds for facilities for the furnishing of water, sewage 

facilities, and air or water pollution control facilities. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 21, 2003

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 permit 

the issuance of tax-exempt bonds for certain air and 

water pollution control facilities, and to provide that 

the volume cap for private activity bonds shall not apply 

to bonds for facilities for the furnishing of water, sewage 

facilities, and air or water pollution control facilities.

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 ‘‘Clean Air and Water 

5 Investment and Infrastructure Act’’.
2

•S 1917 IS 

1 SEC. 2. TAX-EXEMPT BONDS FOR AIR AND WATER POLLU2 TION CONTROL FACILITIES. 

3 (a) IN GENERAL.—Subsection (a) of section 142 of 

4 the Internal Revenue Code of 1986 (defining exempt facil5 ity bond) is amended by striking ‘‘or’’ at the end of para6 graph (12), by striking the period at the end of paragraph 

7 (13) and inserting ‘‘, or’’, and by adding at the end the 

8 following new paragraph: 

9 ‘‘(14) air or water pollution control facilities.’’. 

10 (b) AIR OR WATER POLLUTION CONTROL FACILI11 TIES.—Section 142 of the Internal Revenue Code of 1986 

12 (relating to exempt facility bond) is amended by adding 

13 at the end the following new subsection: 

14 ‘‘(l) POLLUTION CONTROL FACILITIES ACQUIRED BY

15 REGIONAL POLLUTION CONTROL AUTHORITIES.—

16 ‘‘(1) IN GENERAL.—For purposes of paragraph 

17 (14) of subsection (a), a bond shall be treated as de18 scribed in such paragraph if it is part of an issue 

19 substantially all of the proceeds of which are used by 

20 a qualified regional pollution control authority to ac21 quire existing air or water pollution control facilities 

22 which the authority itself will operate in order to 

23 maintain or improve the control of pollutants. 

24 ‘‘(2) RESTRICTIONS.—Paragraph (1) shall 

25 apply only if—
3

•S 1917 IS 

1 ‘‘(A) the amount paid, directly or indi2 rectly, for a facility does not exceed the fair 

3 market value of the facility, 

4 ‘‘(B) the fees or charges imposed, directly 

5 or indirectly, on the seller for any use of the fa6 cility after the sale of such facility are not less 

7 than the amounts that would be charged if the 

8 facility were financed with obligations the inter9 est on which is not exempt from tax, and 

10 ‘‘(C) no person other than the qualified re11 gional pollution control authority is considered 

12 after the sale as the owner of the facility for the 

13 purposes of Federal income taxes. 

14 ‘‘(3) QUALIFIED REGIONAL POLLUTION CON15 TROL AUTHORITY.—For purposes of this subsection, 

16 the term ‘qualified regional pollution control author17 ity’ means an authority which—

18 ‘‘(A) is a political subdivision created by 

19 State law to control air or water pollution, 

20 ‘‘(B) has within its jurisdictional bound21 aries all or part of at least 2 counties (or equiv22 alent political subdivisions), and 

23 ‘‘(C) operates air or water pollution control 

24 facilities.’’. 
4

•S 1917 IS 

1 (c) EFFECTIVE DATE.—The amendments made by 

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

3 the enactment of this Act. 

4 SEC. 3. EXEMPTION FROM VOLUME CAP FOR FACILITIES 

5 FURNISHING WATER, SEWAGE FACILITIES, 

6 AND AIR OR WATER POLLUTION CONTROL 

7 FACILITIES. 

8 (a) IN GENERAL.—Paragraph (3) of section 146(g) 

9 of the Internal Revenue Code of 1986 (relating to excep10 tion for certain bonds) is amended—

11 (1) by inserting ‘‘(4), (5),’’ after ‘‘(2),’’, 

12 (2) by striking ‘‘or (13)’’ and inserting ‘‘(13), 

13 or (14)’’, 

14 (3) by inserting ‘‘facilities for the furnishing of 

15 water, sewage facilities,’’ after ‘‘wharves,’’, 

16 (4) by striking ‘‘and’’ before ‘‘qualified’’, and 

17 (5) by inserting ‘‘, and air or water pollution 

18 control facilities’’ after ‘‘educational facilities’’. 

19 (b) EFFECTIVE DATE.—The amendments made by 

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

21 the enactment of this Act.

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