I
106TH CONGRESS
1ST SESSION
H. R. 859
To amend the Internal Revenue Code of 1986 to allow tax-exempt private
activity bonds to be issued for highway infrastructure construction.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 25, 1999
Ms. DUNN (for herself, Mr. DICKS, Mr. PACKARD, Mr. BILBRAY, and Mr.
CUNNINGHAM) introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow tax-
exempt private activity bonds to be issued for highway
infrastructure construction.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Highway Innovation
and Cost Savings Act’’.
SEC. 2. TAX-EXEMPT FINANCING OF QUALIFIED HIGHWAY
INFRASTRUCTURE CONSTRUCTION.
(a) TREATMENT AS EXEMPT FACILITY BOND.—A
bond described in subsection (b) shall be treated as de-
scribed in section 141(e)(1)(A) of the Internal Revenue
Code of 1986, except that section 146 of such Code shall
not apply to such bond.
(b) BOND DESCRIBED.—
(1) IN GENERAL.—A bond is described in this
subsection if such bond is issued after the date of
enactment of this Act as part of an issue—
(A) 95 percent or more of the net proceeds
of which are to be used to provide a qualified
highway infrastructure project, and
(B) to which there has been allocated a
portion of the allocation to the project under
paragraph (2)(C)(ii) which is equal to the ag-
gregate face amount of bonds to be issued as
part of such issue.
(2) QUALIFIED
HIGHWAY
INFRASTRUCTURE
PROJECTS.—
(A) IN GENERAL.—For purposes of para-
graph (1), the term ‘‘qualified highway infra-
structure project’’ means a project—
(i) for the construction or reconstruc-
tion of a highway, and
(ii) designated under subparagraph
(B) as an eligible pilot project.
(B) ELIGIBLE PILOT PROJECT.—
(i) IN
GENERAL.—The Secretary of
Transportation, in consultation with the
Secretary of the Treasury, shall select not
more than 15 highway infrastructure
projects to be pilot projects eligible for tax-
exempt financing.
(ii) ELIGIBILITY CRITERIA.—In deter-
mining the criteria necessary for the eligi-
bility of pilot projects, the Secretary of
Transportation shall include the following:
(I) The project must serve the
general public.
(II) The project is necessary to
evaluate the potential of the private
sector’s participation in the provision,
maintenance, and operation of the
highway infrastructure of the United
States.
(III) The project must be located
on publicly-owned rights-of-way.
(IV) The project must be publicly
owned or the ownership of the high-
way 
constructed 
or 
reconstructed
under the project must revert to the
public.
(V) The project must be consist-
ent with a transportation plan devel-
oped pursuant to section 134(g) or
135(e) of title 23, United States
Code.
(C) AGGREGATE FACE AMOUNT OF TAX-
EXEMPT FINANCING.—
(i) IN GENERAL.—The aggregate face
amount of bonds issued pursuant to this
section shall not exceed $15,000,000,000,
determined without regard to any bond the
proceeds of which are used exclusively to
refund (other than to advance refund) a
bond issued pursuant to this section (or a
bond which is a part of a series of
refundings of a bond so issued) if the
amount of the refunding bond does not ex-
ceed the outstanding amount of the re-
funded bond.
(ii) ALLOCATION.—The Secretary of
Transportation, in consultation with the
Secretary of the Treasury, shall allocate
the amount described in clause (i) among
the eligible pilot projects designated under
subparagraph (B), based on the extent to
which—
(I) the projects use new tech-
nologies, construction techniques, or
innovative cost controls that result in
savings in building or operating the
projects, and
(II) the projects address local, re-
gional, 
or 
national 
transportation
needs.
(iii) REALLOCATION.—If any portion
of an allocation under clause (ii) is unused
on the date which is 3 years after such al-
location, the Secretary of Transportation,
in consultation with the Secretary of the
Treasury, may reallocate such portion
among the remaining eligible pilot projects.
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