(A) in subsection (a)(4), by striking ‘‘fiscal
year 1992 and each fiscal year thereafter’’ and
inserting ‘‘each of fiscal years 1992 through
1997’’; and
(B) in subsection (e), by striking ‘‘the fis-
cal years ending on or after September 30,
1983’’ and inserting ‘‘fiscal years 1983 through
1997’’.
(b) 
EXPENDITURES
FROM
HIGHWAY
TRUST
FUND.—
(1) EXPENDITURES
FOR
CORE
PROGRAMS.—
Subsection (c) of section 9503 of the Internal Reve-
nue Code of 1986 (relating to expenditures from
Highway Trust Fund) is amended—
(A) by striking ‘‘October 1, 1997’’ each
place it appears in paragraphs (1), (4)(A)(i),
and (5)(A) and inserting ‘‘October 1, 2001’’;
(B) by striking ‘‘as in effect on the date of
the enactment of the Intermodal Surface Trans-
portation Efficiency Act of 1991’’ in paragraph
(1) and inserting ‘‘as in effect on the date of
the 
enactment 
of 
the 
Transportation
Empowerment Act’’;
(C) by striking ‘‘July 1, 2000’’ each place
it appears in paragraphs (2)(A)(i) and (3) and
inserting ‘‘July 1, 2002’’;
(D) by striking ‘‘October 1, 1999’’ in para-
graph (2)(A)(ii) and inserting ‘‘October 1,
2001’’;
(E) by striking ‘‘January 1, 1999’’ in
paragraph (2)(A)(ii) and inserting ‘‘January 1,
2001’’; and
(F) by striking ‘‘September 30, 1997’’ in
paragraph (6)(E) and inserting ‘‘September 30,
2001’’.
(2) AMOUNTS AVAILABLE FOR CORE PROGRAM
EXPENDITURES.—Section 9503 of such Code (relat-
ing to the Highway Trust Fund) is amended by add-
ing at the end the following new subsection:
‘‘(g) CORE PROGRAMS FINANCING RATE.—For pur-
poses of this section—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), in the case of gasoline, special motor
fuels, and diesel fuel, the core programs financing
rate is—
‘‘(A) after September 30, 1997, and before
October 1, 1998, so much of the Highway
Trust Fund financing rate as does not exceed
7 cents per gallon,
‘‘(B) after September 30, 1998, and before
October 1, 1999, so much of the Highway
Trust Fund financing rate as does not exceed
2 cents per gallon, and
‘‘(C) after September 30, 1999, the High-
way Trust Fund financing rate.
‘‘(2) APPLICATION OF RATE.—In the case of
fuels used as described in paragraph (4)(D), (5)(B),
or (6)(D) of subsection (c), the core programs fi-
nancing rate is zero.’’.
(c) TERMINATION OF TRANSFERS TO MASS TRANSIT
ACCOUNT.—
(1) IN
GENERAL.—Paragraph (2) of section
9503(e) of such Code (relating to Mass Transit Ac-
count) is amended by striking ‘‘2 cents’’ and insert-
ing ‘‘2 cents (zero, on and after October 1, 1997)’’.
(2) AUTHORIZATION
TO
EXPEND
REMAINING
BALANCES IN ACCOUNT.—Paragraph (3) of section
9503(e) of such Code is amended by striking ‘‘before
October 1, 1997’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect on October 1, 1997.
SEC. 4. INFRASTRUCTURE SPECIAL ASSISTANCE FUND.
(a) BALANCE OF CORE PROGRAMS FINANCING RATE
DEPOSITED IN FUND.—
(1) IN GENERAL.—Section 9503 of the Internal
Revenue Code of 1986, as amended by section
3(b)(2), is amended by adding at the end the follow-
ing new subsection:
‘‘(h) ESTABLISHMENT
OF INFRASTRUCTURE SPE-
CIAL ASSISTANCE FUND.—
‘‘(1) CREATION OF FUND.—There is established
in the Highway Trust Fund a separate fund to be
known as the ‘Infrastructure Special Assistance
Fund’ consisting of such amounts as may be trans-
ferred or credited to the Infrastructure Special As-
sistance Fund as provided in this subsection or sec-
tion 9602(b).
‘‘(2) TRANSFERS TO INFRASTRUCTURE SPECIAL
ASSISTANCE FUND.—On the first day of each fiscal
year, the Secretary, in consultation with the Sec-
retary of Transportation, shall determine the excess
(if any) of—
‘‘(A) the sum of—
‘‘(i) the amounts appropriated in such
fiscal year to the Highway Trust Fund
under subsection (b) which are attributable
to the core programs financing rate for
such year, plus
‘‘(ii) the amounts appropriated in
such fiscal year to the Highway Trust
Fund under subsection (b) which are at-
tributable to taxes under sections 4051,
4061, 4071, and 4481 for such year, plus
‘‘(iii) the amount of the total unobli-
gated balance in the Highway Trust Fund
for such fiscal year, over
‘‘(B) the amount appropriated under sub-
section (c)(1) for such fiscal year,
and shall transfer such excess to the Infrastructure
Special Assistance Fund.
‘‘(3) EXPENDITURES FROM FUND.—Amounts in
the Infrastructure Special Assistance Fund shall be
available, as provided by appropriation Acts, for
making expenditures under transportation-related
programs as authorized by law.’’.
(2) EFFECTIVE DATE.—The amendment made
by this subsection shall take effect on October 1,
1997.
(b) FUNDING OF OTHER PROGRAMS.—
(1) IN GENERAL.—Not later than 90 days after
the date of enactment of this Act, the Secretary of
Transportation shall submit a report to Congress
proposing which programs established under titles
23 and 49, United States Code, and the Intermodal
Surface Transportation Efficiency Act of 1991
(Public Law 102–240) that are not funded under
the amendments made by this Act should be funded
for fiscal year 1998 and later fiscal years using
amounts in the Infrastructure Special Assistance
Fund established by section 9503(h) of the Internal
Revenue Code of 1986 (as added by subsection (a)).
(2) TYPES OF PROGRAMS.—Programs for which
funding may be proposed under paragraph (1) in-
clude—
(A) safety programs;
(B) research and development programs;
and
(C) projects for highway improvements
strategically important to the national defense
under section 311 of title 23, United States
Code.
SEC. 5. RETURN OF EXCESS TAX RECEIPTS TO STATES.
(a) IN GENERAL.—Section 9503(c) of the Internal
Revenue Code of 1986 is amended by adding at the end
the following new paragraph:
‘‘(ii) the percentage of the amount de-
termined under subparagraph (A)(i) paid
into the Highway Trust Fund in the latest
fiscal year for which such data are avail-
able that is attributable to highway users
in the State.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall take effect on October 1, 1997.
SEC. 6. INTERSTATE TRANSPORTATION COMPACTS.
(a) CONSENT OF CONGRESS.—In order to increase
public investment, attract needed private investment, and
promote an intermodal transportation network, Congress
grants consent to States to enter into interstate compacts
to—
(1) promote the continuity, quality, and safety
of the Interstate System;
(2) develop programs to promote and fund safe-
ty initiatives and establish safety standards for the
States that are parties to the compact (referred to
in this section as ‘‘participating States’’);
(3) conduct long-term planning for transpor-
tation infrastructure in the participating States;
(4) develop transportation infrastructure design
and construction standards to be used by the partici-
pating States; and
(5) 
establish 
transportation 
infrastructure
banks to promote regional or other multistate invest-
ment in transportation infrastructure.
(b) FINANCING.—An interstate compact established
by States under subsection (a) to carry out a transpor-
tation project, program, or activity may provide that, in
order to carry out the compact, the States may—
(1) accept contributions from a unit of State or
local government or a person;
(2) use any Federal or State funds made avail-
able for that type of transportation project, pro-
gram, or activity;
(3) on such terms and conditions as the States
consider advisable—
(A) borrow money on a short-term basis
and issue notes for the borrowing; and
(B) issue bonds; and
(4) obtain financing by other means permitted
under Federal or State law, including transportation
infrastructure banks under subsection (c).
(c) INFRASTRUCTURE BANKS.—
(1) IN GENERAL.—A transportation infrastruc-
ture bank established under an interstate compact
under subsection (a)(5) (referred to in this sub-
section as an ‘‘infrastructure bank’’) may—
(A) make loans;
(B) under the joint or separate authority
of the participating States with respect to the
infrastructure bank, issue such debt as the in-
frastructure bank and the States determine ap-
propriate; and
(C) provide other assistance to public or
private entities constructing, or proposing to
construct or initiate, transportation projects,
programs, or activities.
(2) FORMS OF ASSISTANCE.—
(A) IN GENERAL.—An infrastructure bank
may make a loan or provide other assistance
described in subparagraph (C) to a public or
private entity in an amount equal to all or part
of the construction cost, capital cost, or initi-
ation cost of a transportation project, program,
or activity.
(B) SUBORDINATION
OF
ASSISTANCE.—
The amount of any loan or other assistance de-
scribed in subparagraph (C) that is received for
a transportation project, program, or activity
under this section may be subordinated to any
other debt financing for the project, program,
or activity.
(C) OTHER
ASSISTANCE.—Other assist-
ance referred to in subparagraphs (A) and (B)
includes any use of funds for the purpose of—
(i) credit enhancement;
(ii) a capital reserve for bond or debt
instrument financing;
(iii) bond or debt instrument financ-
ing issuance costs;
(iv) bond or debt issuance financing
insurance;
(v) subsidization of interest rates;
(vi) letters of credit;
(vii) any credit instrument;
(viii) bond or debt financing instru-
ment security; and
(ix) any other form of debt financing
that relates to the qualifying project, pro-
gram, or activity.
(3) NO OBLIGATION OF UNITED STATES.—
(A) IN
GENERAL.—The approval under
this section of an infrastructure bank does not
constitute a commitment, guarantee, or obliga-
tion on the part of the United States to any
third party with respect to any security or debt
financing instrument issued by the bank. No
third party shall have any right against the
United States for payment solely by reason of
the approval.
(B) STATEMENT
ON
INSTRUMENT.—Any
security or debt financing instrument issued by
an infrastructure bank shall expressly state that
the security or instrument does not constitute a
commitment, guarantee, or obligation of the
United States.
(d) EFFECTIVE DATE.—This section shall take effect
on October 1, 1997.
SEC. 7. FEDERAL-AID FACILITY PRIVATIZATION.
(a) DEFINITIONS.—In this section:
(1) EXECUTIVE AGENCY.—The term ‘‘Executive
agency’’ has the meaning provided in section 105 of
title 5, United States Code.
(2) PRIVATIZATION.—The term ‘‘privatization’’
means the disposition or transfer of a transportation
infrastructure asset, whether by sale, lease, or simi-
lar arrangement, from a State or local government
to a private party.
(3) STATE OR LOCAL GOVERNMENT.—The term
‘‘State or local government’’ means the government
of—
(A) any State;
(B) the District of Columbia;
(C) any commonwealth, territory, or pos-
session of the United States;
(D) any county, municipality, city, town,
township, local public authority, school district,
special district, intrastate district, regional or
interstate government entity, council of govern-
ments, or agency or instrumentality of a local
government; or
(E) any federally recognized Indian tribe.
(4) 
TRANSPORTATION
INFRASTRUCTURE
ASSET.—The term ‘‘transportation infrastructure
asset’’ means any transportation-related asset fi-
nanced in whole or in part by the Federal Govern-
ment, including a road, tunnel, or bridge, or mass
transit.
(b) PRIVATIZATION INITIATIVES
BY STATE
AND
LOCAL GOVERNMENTS.—The head of each Executive
agency shall—
(1) assist State and local governments in efforts
to privatize the transportation infrastructure assets
of the State and local governments; and
(2) subject to subsection (c), approve requests
from State and local governments to privatize trans-
portation infrastructure assets and waive or modify
any grant condition.
(c) CRITERIA.—The head of an Executive agency
shall approve a request described in subsection (b)(2) if—
(1) the State or local government demonstrates
that a market mechanism, legally enforceable agree-
ment, or regulatory mechanism will ensure that the
transportation infrastructure asset will continue to
be used for the general objectives of the original
grant program (which shall not be considered to in-
clude every condition required for the grantee to
have obtained the original grant) that funded the
asset, so long as needed for those objectives; and
(2) the private party purchasing or leasing the
transportation infrastructure asset agrees to comply
with all applicable grant conditions.
(d) LACK
OF OBLIGATION TO REPAY FEDERAL
GRANT FUNDS.—A State or local government shall have
no obligation to repay to any agency of the Federal Gov-
ernment any Federal grant funds received by the State
or local government in connection with a transportation
infrastructure asset that is privatized under this section.
(e) USE OF PROCEEDS.—
(1) IN GENERAL.—Subject to paragraph (2), a
State or local government may use proceeds from
the privatization of a transportation infrastructure
asset to the extent permitted under applicable grant
conditions.
(2) RECOVERY OF CERTAIN COSTS.—Notwith-
standing any other provision of law, the State or
local government shall be permitted to recover from
the privatization of a transportation infrastructure
asset—
(A) the capital investment in the transpor-
tation infrastructure asset made by the State or
local government;
(B) an amount equal to the unreimbursed
operating expenses in the transportation infra-
structure asset paid by the State or local gov-
ernment; and
(C) a reasonable rate of return on the in-
vestment made under subparagraph (A) and ex-
penses paid under subparagraph (B).
SEC. 8. REDUCTION IN TAXES ON GASOLINE, DIESEL FUEL,
AND SPECIAL FUELS FUNDING HIGHWAY
TRUST FUND.
(a) IN GENERAL.—Section 4081(a)(2)(A) of the In-
ternal Revenue Code of 1986 (relating to rates of tax) is
amended—
(1) by striking ‘‘18.3 cents’’ in clause (i) and
inserting ‘‘6.3 cents’’; and
(2) by striking ‘‘24.3 cents’’ in clause (ii) and
inserting ‘‘6.3 cents’’.
(b) SAME RATE FOR ALCOHOL FUELS.—
(1) IN
GENERAL.—Paragraph (8) of section
4081(c) of the Internal Revenue Code of 1986 (re-
lating to taxable fuels mixed with alcohol) is amend-
ed by striking ‘‘September 30, 2000’’ and inserting
‘‘September 30, 1999’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 4041(b)(2)(C) of such Code is
amended to read as follows:
‘‘(C) TERMINATION.—
‘‘(i) IN GENERAL.—On and after Oc-
tober 1, 1999, subparagraph (A)(i) shall
not apply.
‘‘(ii) LUST.—On and after October 1,
2000, subparagraph (A)(ii) shall not
apply.’’.
(B) Section 4041(k)(3) of such Code is
amended to read as follows:
‘‘(3) TERMINATION.—
‘‘(A) IN
GENERAL.—Paragraph (1)(A)
shall not apply to any sale or use after Septem-
ber 30, 1999.
‘‘(B) AVIATION.—Subparagraphs (B) and
(C) of paragraph (1) shall not apply to any sale
or use after September 30, 2000.’’.
(C) Section 4041(m)(1)(A) of such Code is
amended by striking clauses (i) and (ii) and in-
serting the following new clauses:
‘‘(i) 6.3 cents per gallon for the period
beginning after September 30, 1999, and
ending before October 1, 2001, and
‘‘(ii) 4.3 cents per gallon after Sep-
tember 30, 2001, and’’.
(D) Section 9503(f) of such Code is
amended by striking paragraph (3) and redesig-
nating paragraph (4) as paragraph (3).
(c) REDUCTION IN HIGHWAY TRUST FUND FINANC-
ING RATE.—
(1) IN GENERAL.—Section 9503(f) of the Inter-
nal Revenue Code of 1986 (defining Highway Trust
Fund financing rate) is amended—
(A) by striking ‘‘11.5 cents per gallon (14
cents per gallon after September 30, 1995)’’ in
paragraph (1)(A) and inserting ‘‘2 cents per
gallon’’; and
(B) by striking ‘‘17.5 cents per gallon (20
cents per gallon after September 30, 1995)’’ in
paragraph (1)(B) and inserting ‘‘2 cents per
gallon’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 9503(f)(2)(B) of such Code is
amended by striking ‘‘3 cents’’ and inserting ‘‘2
cents’’.
(B) Section 9503(f)(2)(E) of such Code is
amended—
(i) by striking ‘‘11.5 cents’’ and in-
serting ‘‘2 cents’’; and
(ii) by striking ‘‘17.5 cents’’ and in-
serting ‘‘2 cents’’.
(C) Section 9503(f)(4) of such Code is
amended by striking ‘‘June 30, 2000’’ and in-
serting ‘‘September 30, 2001’’.
(d) ADDITIONAL CONFORMING AMENDMENTS.—
(1) Section 4041(a)(1)(C) of the Internal Reve-
nue Code of 1986 is amended—
(A) by striking ‘‘October 1, 1999’’ in
clause (ii)(II) and inserting October 1, 2001’’;