I
105TH CONGRESS
1ST SESSION
H. R. 1470
To empower States with authority for most taxing and spending for highway
programs and mass transit programs, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 29, 1997
Mr. KASICH (for himself, Mr. OBEY, Mr. INGLIS of South Carolina, Mrs.
THURMAN, Mr. DREIER, Mr. BOYD, Mr. SMITH of Michigan, Mr. ROYCE,
Mr. HOBSON, Mr. ISTOOK, Mr. LARGENT, Mr. MILLER of Florida, Mr.
PAUL, Mr. PORTMAN, Mr. SALMON, Mr. SHADEGG, and Mr. GOSS) intro-
duced the following bill; which was referred to the Committee on Trans-
portation and Infrastructure, and in addition to the Committees on Ways
and Means, and the Budget, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
A BILL
To empower States with authority for most taxing and
spending for highway programs and mass transit pro-
grams, and for other purposes.
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 ‘‘Transportation
Empowerment Act’’.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—Congress finds that—
(1) the objective of the Federal highway pro-
gram has been to facilitate the construction of a
modern freeway system that promotes efficient inter-
state commerce by connecting all States;
(2) that objective has been attained, and the
Interstate System connecting all States is near com-
pletion;
(3) each State has the responsibility of provid-
ing an efficient transportation network for the resi-
dents of the State;
(4) each State has the means to build and oper-
ate a network of transportation systems, including
highways, that best serves the needs of the State;
(5) each State is best capable of determining
the needs of the State and acting on those needs;
(6) the Federal role in highway transportation
has, over time, usurped the role of the States by tax-
ing fuels used in the States and then distributing
the proceeds to the States based on the Federal
Government’s perceptions of what is best for the
States;
(7) the Federal Government has used the Fed-
eral gasoline tax revenues to force all States to take
actions that are not necessarily appropriate for indi-
vidual States;
(8) the Federal distribution, review, and en-
forcement process wastes billions of dollars on un-
productive activities;
(9) Federal mandates that apply uniformly to
all 50 States, regardless of the different cir-
cumstances of the States, cause the States to waste
billions of hard-earned tax dollars on projects, pro-
grams, and activities that the States would not oth-
erwise undertake; and
(10) Congress has expressed a strong interest
in reducing the role of the Federal Government by
allowing each State to manage its own affairs.
(b) PURPOSES.—The purposes of this Act are—
(1) to return to the individual States maximum
discretionary authority and fiscal responsibility for
all elements of the national transportation systems
that are not within the direct purview of the Federal
Government;
(2) to preserve Federal responsibility for the
Dwight D. Eisenhower National System of Inter-
state and Defense Highways;
(3) to preserve the responsibility of the Depart-
ment of Transportation for—
(A) design, construction, and preservation
of transportation facilities on Federal public
lands;
(B) national programs of transportation
research and development and transportation
safety; and
(C) emergency assistance to the States in
response to natural disasters;
(4) to eliminate to the maximum extent prac-
ticable Federal obstacles to the ability of each State
to apply innovative solutions to the financing, de-
sign, construction, operation, and preservation of
State and Federal transportation facilities; and
(5) with respect to transportation activities car-
ried out by States, local governments, and the pri-
vate sector, to encourage—
(A) competition among States, local gov-
ernments, and the private sector; and
(B) innovation, energy efficiency, private
sector participation, and productivity.
SEC. 3. CONTINUATION OF FUNDING FOR CORE HIGHWAY
PROGRAMS.
(a) IN GENERAL.—
(1) FUNDING.—For the purpose of carrying out
title 23, United States Code, the following sums are
authorized to be appropriated out of the Highway
Trust Fund:
(A) 
INTERSTATE
MAINTENANCE
PRO-
GRAM.—For the Interstate maintenance pro-
gram under section 119 of title 23, United
States Code, $5,000,000,000 for fiscal year
1998, $5,100,000,000 for fiscal year 1999,
$5,300,000,000 
for 
fiscal 
year 
2000,
$5,400,000,000 for fiscal year 2001, and
$5,600,000,000 for fiscal year 2002.
(B) INTERSTATE
AND
INDIAN
RESERVA-
TION
BRIDGE
PROGRAM.—For the Interstate
and Indian reservation bridge program under
section 144 of that title $1,183,000,000 for fis-
cal year 1998, $1,217,000,000 for fiscal year
1999, $1,251,000,000 for fiscal year 2000,
$1,286,000,000 for fiscal year 2001, and
$1,321,000,000 for fiscal year 2002.
(C) FEDERAL
LANDS
HIGHWAYS
PRO-
GRAM.—
(i) INDIAN
RESERVATION
ROADS.—
For Indian reservation roads under section
204 of that title $197,000,000 for fiscal
year 1998, $202,000,000 for fiscal year
1999, $208,000,000 for fiscal year 2000,
$214,000,000 for fiscal year 2001, and
$220,000,000 for fiscal year 2002.
(ii) PUBLIC LANDS HIGHWAYS.—For
public lands highways under section 204 of
that title $177,000,000 for fiscal year
1998, $182,000,000 for fiscal year 1999,
$187,000,000 
for 
fiscal 
year 
2000,
$192,000,000 for fiscal year 2001, and
$197,000,000 for fiscal year 2002.
(iii) PARKWAYS AND PARK ROADS.—
For parkways and park roads under sec-
tion 204 of that title $86,000,000 for fis-
cal year 1998, $89,000,000 for fiscal year
1999, $91,000,000 for fiscal year 2000,
$94,000,000 for fiscal year 2001, and
$97,000,000 for fiscal year 2002.
(iv) HIGHWAY SAFETY PROGRAMS.—
For highway safety programs under sec-
tion 402 of that title $171,000,000 for
each of fiscal years 1998 through 2002.
(v) HIGHWAY SAFETY RESEARCH AND
DEVELOPMENT.—For highway safety re-
search and development under section 403
of that title $44,000,000 for each of fiscal
years 1998 through 2002.
(2) TRANSFERABILITY OF FUNDS.—Section 104
of title 23, United States Code, is amended by strik-
ing subsection (g) and inserting the following:
‘‘(g) TRANSFERABILITY OF FUNDS.—
‘‘(1) IN GENERAL.—To the extent that a State
determines that funds made available under this title
to the State for a purpose are in excess of the needs
of the State for that purpose, the State may transfer
the excess funds to, and use the excess funds for,
any surface transportation (including mass transit
and rail) purpose in the State.
‘‘(2) ENFORCEMENT.—If the Secretary deter-
mines that a State has transferred funds under
paragraph (1) to a purpose that is not a surface
transportation purpose as described in paragraph
(1), the amount of the improperly transferred funds
shall be deducted from any amount the State would
otherwise receive from the Highway Trust Fund for
the fiscal year that begins after the date of the de-
termination.’’.
(3) FEDERAL-AID SYSTEM.—Section 103(a) of
title 23, United States Code, is amended by striking
‘‘systems are the Interstate System and the National
Highway System’’ and inserting ‘‘system is the
Interstate System’’.
(4) INTERSTATE MAINTENANCE PROGRAM.—
(A) FUNDING.—Section 104(b)(5) of title
23, United States Code, is amended by striking
subparagraph (B) and inserting the following:
‘‘(B) INTERSTATE
MAINTENANCE.—For
each of fiscal years 1998 through 2002, for the
Interstate maintenance program under section
119, 1 percent to the Virgin Islands, Guam,
American Samoa, and the Commonwealth of
the Northern Mariana Islands and the remain-
ing 99 percent apportioned as follows:
‘‘(i)(I) For each State with an average
population density of 20 persons or fewer
per square mile, and each State with a
population of 1,500,000 persons or fewer
and with a land area of 10,000 square
miles or less, the greater of—
‘‘(aa) a percentage share of ap-
portionments equal to the percentage
listed for the State in subclause (II);
or
‘‘(bb) a share determined under
clause (ii).
‘‘(II) The percentage referred to in
subclause (I)(aa) is as follows:
‘‘States:
Percentage:
Alabama .......................................................................................
2.02
‘‘(ii) For each State not described in
clause (i), a share of the apportionments
remaining determined in accordance with
the following formula:
‘‘(I) 1⁄9 in the ratio that the total
rural lane miles in each State bears to
the total rural lane miles in all States
with an average population density
greater than 20 persons per square
mile and all States with a population
of more than 1,500,000 persons and
with a land area of more than 10,000
square miles.
‘‘(II) 1⁄9 in the ratio that the
total rural vehicle miles traveled in
each State bears to the total rural ve-
hicle miles traveled in all States de-
scribed in subclause (I).
‘‘(III) 2⁄9 in the ratio that the
total urban lane miles in each State
bears to the total urban lane miles in
all States described in subclause (I).
‘‘(IV) 2⁄9 in the ratio that the
total urban vehicle miles traveled in
each State bears to the total urban
vehicle miles traveled in all States de-
scribed in subclause (I).
‘‘(V) 3⁄9 in the ratio that the
total diesel fuel used in each State
bears to the total diesel fuel used in
all States described in subclause (I).’’.
(B) CONFORMING AMENDMENTS.—Section
119(f) of title 23, United States Code, is
amended—
(i) in paragraph (1), by striking ‘‘If’’
and inserting ‘‘For each of fiscal years
1991 through 1997, if’’; and
(ii) in paragraph (2)(B), by inserting
‘‘through fiscal year 1997’’ after ‘‘there-
after’’.
(5) INTERSTATE
BRIDGE
PROGRAM.—Section
144 of title 23, United States Code, is amended—
(A) in subsection (d)—
(i) by inserting ‘‘on the Federal-aid
system or described in subsection (c)(3)’’
after ‘‘highway bridge’’ each place it ap-
pears; and
(ii) by inserting ‘‘on the Federal-aid
system or described in subsection (c)(3)’’
after ‘‘highway bridges’’ each place it ap-
pears;
(B) in the second sentence of subsection
(e)—
(i) in paragraph (1), by adding ‘‘and’’
at the end;
(ii) in paragraph (2), by striking the
comma at the end and inserting a period;
and
(iii) by striking paragraphs (3) and
(4);
(C) in the first sentence of subsection (l),
by inserting ‘‘on the Federal-aid system or de-
scribed in subsection (c)(3)’’ after ‘‘any
bridge’’;
(D) in subsection (m), by inserting ‘‘on the
Federal-aid system or described in subsection
(c)(3)’’ after ‘‘any bridge’’; and
(E) in the first sentence of subsection (n),
by inserting ‘‘for each of fiscal years 1991
through 1997,’’ after ‘‘of law,’’.
(6) NATIONAL
DEFENSE
HIGHWAYS.—Section
311 of title 23, United States Code, is amended—
(A) in the first sentence, by striking
‘‘under subsection (a) of section 104 of this
title’’ and inserting ‘‘to carry out this section’’;
and
(B) by striking the second sentence.
(7) TERMINATION OF MINIMUM ALLOCATION.—
Section 157 of title 23, United States Code, is
amended—
(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’’.
(8) MOTOR CARRIER SAFETY GRANTS.—Section
31104 of title 49, United States Code, is amended—
(A) in subsection (a), by adding at the end
the following:
‘‘(6) not more than $90,000,000 for each of fis-
cal years 1998 through 2002.’’; and
(B) in subsection (g)(1)—
(i) in subparagraph (B), by striking
‘‘1993–1997’’ and inserting ‘‘1993 through
2002’’;
(ii) in subparagraph (C), by striking
‘‘1993–1997’’ and inserting ‘‘1993 through
2002’’; and
(iii) in subparagraph (D), by striking
‘‘1996, and 1997’’ and inserting ‘‘1996
through 2002’’.
(b) 
EXPENDITURES
FROM
HIGHWAY
TRUST
FUND.—
(1) EXPENDITURES
FOR
CORE
PROGRAMS.—
Section 9503(c) of the Internal Revenue Code of
1986 (relating to expenditures from Highway Trust
Fund) is amended—
(A) in paragraphs (1), (4)(A)(i), and
(5)(A), by striking ‘‘October 1, 1997’’ each
place it appears and inserting ‘‘October 1,
2002’’;
(B) in paragraph (1)—
(i) in subparagraph (C), by striking
‘‘or’’ at the end;
(ii) in subparagraph (D), by striking
‘‘1991.’’ and inserting ‘‘1991, or’’;
(iii) by inserting after subparagraph
(D) the following:
‘‘(E) authorized to be paid out of the
Highway Trust Fund under the Transportation
Empowerment Act.’’; and
(iv) by striking the last sentence and
inserting the following:
‘‘In determining the authorizations under the Acts
referred to in the preceding subparagraphs, such
Acts shall be applied as in effect on the date of en-
actment of the Transportation Empowerment Act.’’;
(C) in paragraphs (2)(A)(i) and (3), by
striking ‘‘July 1, 2000’’ each place it appears
and inserting ‘‘July 1, 2003’’;
(D) in paragraph (2)(A)(ii), by striking
‘‘October 1, 1999’’ and inserting ‘‘October 1,
2002’’;
(E) in paragraph (2)(A)(ii), by striking
‘‘January 1, 1999’’ and inserting ‘‘October 1,
2001’’; and
(F) in paragraph (6)(E), by striking ‘‘Sep-
tember 30, 1997’’ and inserting ‘‘September 30,
2002’’.
(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:
‘‘(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
12 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
7 cents per gallon,
‘‘(C) after September 30, 1999, and before
October 1, 2000, so much of the Highway
Trust Fund financing rate as does not exceed
4 cents per gallon,
‘‘(D) after September 30, 2000, and before
October 1, 2001, so much of the Highway
Trust Fund financing rate as does not exceed
3 cents per gallon, and
‘‘(E) after September 30, 2001, 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.—Section 9503(e)(2) of such
Code (relating to Mass Transit Account) is amended
by striking ‘‘2 cents’’ and inserting ‘‘2 cents (zero,
on and after October 1, 1997)’’.
(2) AUTHORIZATION
TO
EXPEND
REMAINING
BALANCES IN ACCOUNT.—Section 9503(e)(3) of such
Code is amended by striking ‘‘before October 1,
1997’’.
(d) EFFECTIVE DATE.—The amendments made by
this section take effect on October 1, 1997.
SEC. 4. INFRASTRUCTURE SPECIAL ASSISTANCE FUND.
(a) BALANCE OF CORE PROGRAMS FINANCING RATE
DEPOSITED IN FUND.—Section 9503 of the Internal Rev-
enue Code of 1986 (as amended by section 3(b)(2)) is
amended by adding at the end the following:
‘‘(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, over
‘‘(B) the amount appropriated under sub-
section (c) for such fiscal year,
and shall transfer such excess to the Infrastructure
Special Assistance Fund.
‘‘(3) EXPENDITURES
FROM
INFRASTRUCTURE
SPECIAL ASSISTANCE FUND.—
‘‘(A) TRANSITIONAL ASSISTANCE.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (iv), during fiscal years
1998 through 2001, $1,000,000,000 in the
Infrastructure Special Assistance Fund
shall be available to States for transpor-
tation-related program expenditures.
‘‘(ii) STATE SHARE.—
‘‘(I) IN
GENERAL.—Except as
provided in clause (v), each State is
entitled to a share of the amount
specified in clause (i) upon enactment
of legislation providing 1 of the 2
funding 
mechanisms 
described 
in
clause (iii).
‘‘(II) DETERMINATION OF STATE
SHARE.—For purposes of subclause
(I), each State’s share shall be deter-
mined in the following manner:
‘‘(aa) Multiply the percent-
age of the amounts appropriated
in the latest fiscal year for which
such data are available to the
Highway Trust Fund under sub-
section (b) which is attributable
to taxes paid by highway users in
the State, by the amount speci-
fied in clause (i). If the result
does not exceed $15,000,000, the
State’s 
share 
equals
$15,000,000. If the result ex-
ceeds $15,000,000, the State’s
share is determined under item
(bb).
‘‘(bb) Multiply the percent-
age determined under item (aa),
by the amount specified in clause
(i) reduced by an amount equal
to $15,000,000 times the number
of States the share of which is
determined under item (aa).
‘‘(iii) LEGISLATIVE FUNDING MECHA-
NISMS.—A funding mechanism is described
in this clause as follows:
‘‘(I) A funding mechanism which
results in revenues for transportation-
related projects in the State for fiscal
year 2002 and each succeeding fiscal
year which are equal to the excess
of—
‘‘(aa) the mean annual aver-
age of distributions from the
Highway Trust Fund to the
State 
for 
fiscal 
years 
1992
through 1997; over
‘‘(bb) the distributions from
the Highway Trust Fund to the
State for such fiscal year attrib-
utable to the core programs fi-
nancing rate for such year.
‘‘(II) 
A 
funding 
mechanism
which results in an increase in the
State rate of tax on motor fuels equal
to the decrease in the rate of tax on
such fuels under section 4081 for fis-
cal year 2002 and any succeeding fis-
cal year.
‘‘(iv) DISTRIBUTION
OF
REMAINING
AMOUNT.—If after September 30, 2001, a
portion of the amount specified in clause
(i) remains, the Secretary, in consultation
with the Secretary of Transportation,
shall, on October 1, 2001, apportion the
portion among the States which received a
share of such amount under clause (ii) and
which are not described in clause (v) using
the percentages determined under clause
(ii)(II)(aa) for such States.
‘‘(v) ENFORCEMENT
OF
FUNDING
MECHANISM
REQUIREMENT.—If a State,
which enacted legislation providing for a
funding mechanism described in clause
(iii), terminates such mechanism before fis-
cal year 2002, the State’s share deter-
mined under clauses (ii) and (iv) shall be
deducted from any amount the State would
otherwise receive from the Highway Trust
Fund for fiscal year 2002.
‘‘(B) ADDITIONAL
EXPENDITURES
FROM
FUND.—
‘‘(i) IN
GENERAL.—Amounts in the
Infrastructure Special Assistance Fund, in
excess of the amount specified in subpara-
graph (A)(i), shall be available, as provided
by appropriation Acts, to the States for
any surface transportation (including mass
transit and rail) purpose in such States,
and the Secretary shall apportion such ex-
cess amounts among all States using the
percentages 
determined 
under 
clause
(ii)(II)(aa) for such States.
‘‘(ii) ENFORCEMENT.—If the Sec-
retary determines that a State has used
amounts under clause (i) for a purpose
which is not a surface transportation pur-
pose as described in clause (i), the improp-
erly used amounts shall be deducted from
any amount the State would otherwise re-
ceive from the Highway Trust Fund for
the fiscal year which begins after the date
of the determination.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section takes effect on October 1, 1997.
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:
‘‘(7) RETURN
OF
EXCESS
TAX
RECEIPTS
TO
STATES
FOR
SURFACE
TRANSPORTATION
PUR-
POSES.—
‘‘(A) IN GENERAL.—On the first day of
each of fiscal years 1998, 1999, 2000, and
2001, the Secretary, in consultation with the
Secretary of the Transportation, shall—
‘‘(i) determine the excess (if any) of—
‘‘(I) the amounts appropriated in
such fiscal year to the Highway Trust
Fund under subsection (b) which are
equivalent to the taxes attributable to
the excess of—
‘‘(aa) the Highway Trust
Fund financing rate for such
year, over
‘‘(bb) the core programs fi-
nancing rate for such year, over
‘‘(II) the amounts so appro-
priated which are equivalent to the
taxes described in paragraphs (4)(D),
(5)(B), and (6)(D), and
‘‘(ii) allocate the amount determined
under clause (i) among the States (as de-
fined in section 101 of title 23, United
States Code) for surface transportation
(including mass transit and rail) purposes
so that—
‘‘(I) the percentage of that
amount allocated to each State, is
equal to
‘‘(II) 
the 
percentage 
of 
the
amount determined under clause (i)(I)
paid into the Highway Trust Fund in
the latest fiscal year for which such
data are available which is attrib-
utable to highway users in the State.
‘‘(B) ENFORCEMENT.—If the Secretary
determines that a State has used amounts
under subparagraph (A) for a purpose which
is not a surface transportation purpose as
described in subparagraph (A), the improperly
used 
amounts 
shall 
be 
deducted 
from
any amount the State would otherwise receive
from the Highway Trust Fund for the fiscal
year which begins after the date of the
determination.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section takes effect on October 1, 1997.
SEC. 6. INTERSTATE SURFACE TRANSPORTATION COM-
PACTS.
(a) DEFINITIONS.—In this section:
(1) INFRASTRUCTURE BANK.—The term ‘‘infra-
structure bank’’ means a surface transportation in-
frastructure bank established under an interstate
compact under subsection (b)(5) and described in
subsection (d).
(2) PARTICIPATING STATES.—The term ‘‘par-
ticipating States’’ means the States that are parties
to an interstate compact entered into under sub-
section (b).
(3) SURFACE
TRANSPORTATION.—The term
‘‘surface transportation’’ includes mass transit and
rail.
(4) SURFACE TRANSPORTATION PROJECT.—The
term ‘‘surface transportation project’’ means a sur-
face transportation project, program, or activity de-
scribed in subsection (b).
(b) 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 sur-
face transportation safety initiatives and establish
surface transportation safety standards for the par-
ticipating States;
(3) conduct long-term planning for surface
transportation infrastructure in the participating
States;
(4) develop design and construction standards
for infrastructure described in paragraph (3) to be
used by the participating States; and
(5) establish surface transportation infrastruc-
ture banks to promote regional or other multistate
investment in infrastructure described in paragraph
(3).
(c) FINANCING.—An interstate compact established
by participating States under subsection (b) to carry out
a surface transportation project may provide that, in order
to carry out the compact, the participating 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 surface transportation project;
(3) on such terms and conditions as the partici-
pating 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 surface trans-
portation infrastructure banks under subsection (d).
(d) INFRASTRUCTURE BANKS.—
(1) IN
GENERAL.—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 participating States
determine appropriate; and
(C) provide other assistance to public or
private entities constructing, or proposing to
construct or initiate, surface transportation
projects.
(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 surface transportation project.
(B) SUBORDINATION
OF
ASSISTANCE.—
The amount of any loan or other assistance de-
scribed in subparagraph (C) that is received for
a surface transportation project under this sec-
tion may be subordinated to any other debt fi-
nancing for the surface transportation project.
(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 surface trans-
portation project.
(3) NO OBLIGATION OF UNITED STATES.—
(A) 
IN
GENERAL.—The 
establishment
under this section of an infrastructure bank
does not constitute a commitment, guarantee,
or obligation 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 establishment.
(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.
(e) EFFECTIVE DATE.—This section takes 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.—
(A) IN
GENERAL.—The term ‘‘transpor-
tation infrastructure asset’’ means any surface-
transportation-related asset financed in whole
or in part by the Federal Government, includ-
ing a road, tunnel, bridge, or mass-transit-relat-
ed or rail-related asset.
(B) EXCLUSION.—The term does not in-
clude any transportation-related asset on the
Interstate System (as defined in section 101 of
title 23, United States Code).
(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 condition relating to the original Federal pro-
gram that funded the asset.
(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
Federal program that funded the asset (which shall
not be considered to include every condition required
for the recipient of Federal funds to have obtained
the original Federal funds), 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 conditions of the original Federal
program.
(d) LACK
OF OBLIGATION TO REPAY FEDERAL
FUNDS.—A State or local government shall have no obli-
gation to repay to any agency of the Federal Government
any Federal funds received by the State or local govern-
ment 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 condi-
tions of the original Federal program.
(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) REDUCTION IN TAX RATE.—
(1) IN GENERAL.—Section 4081(a)(2)(A) of the
Internal Revenue Code of 1986 (relating to rates of
tax) is amended—
(A) in clause (i), by striking ‘‘18.3 cents’’
and inserting ‘‘6.3 cents’’; and
(B) in clause (ii), by striking ‘‘24.3 cents’’
and inserting ‘‘6.3 cents’’.
(2) 
CONFORMING
AMENDMENT.—Section
6427(b)(2)(A) of such Code is amended by striking
‘‘7.4 cents’’ and inserting ‘‘1.9 cents’’.
(b) REDUCTION IN HIGHWAY TRUST FUND FINANC-
ING RATE.—Section 9503(f) of the Internal Revenue Code
of 1986 (defining Highway Trust Fund financing rate) is
amended—
(1) in paragraph (1)(A), by striking ‘‘11.5 cents
per gallon (14 cents per gallon after September 30,
1995)’’ and inserting ‘‘2 cents per gallon’’;
(2) in paragraph (1)(B), by striking ‘‘17.5
cents per gallon (20 cents per gallon after Septem-
ber 30, 1995)’’ and inserting ‘‘2 cents per gallon’’;
(3) by striking subparagraph (B) and by redes-
ignating subparagraphs (C) through (E) as subpara-
graphs (B) through (D), respectively; and
(4) in subparagraph (D) (as redesignated by
paragraph (3))—
(A) by striking ‘‘11.5 cents’’ and inserting
‘‘2 cents’’; and
(B) by striking ‘‘17.5 cents’’ and inserting
‘‘2 cents’’.
(c) ADDITIONAL CONFORMING AMENDMENTS.—
(1) Section 4041(a)(1)(C)(iii)(I) of such Code is
amended by striking ‘‘(4.3 cents per gallon after
September 30, 1999)’’ and inserting ‘‘(6.3 cents per
gallon for the period beginning after September 30,
2001, and ending before October 1, 2004, and 4.3
cents per gallon after September 30, 2004)’’.
(2) Section 4041(m)(1)(A) of such Code is
amended—
(A) in clause (i), by striking ‘‘1999, and’’
at the end and inserting ‘‘2001,’’; and
(B) by striking clause (ii) and inserting the
following:
‘‘(ii) 6.3 cents per gallon for the pe-
riod beginning after September 30, 2001,
and ending before October 1, 2004, and
‘‘(iii) 4.3 cents per gallon after Sep-
tember 30, 2004.’’.
(3) Section 4081(d)(1) of such Code is amend-
ed by striking ‘‘October 1, 1999’’ and inserting ‘‘Oc-
tober 1, 2004’’.
(4) Section 6421(e)(2)(B)(iv) of such Code is
amended—
(A) in subclause (I), by striking ‘‘January
1, 2000’’ and inserting ‘‘October 1, 2004’’; and
(B) in subclause (II), by striking ‘‘Decem-
ber 31, 1999’’ and inserting ‘‘September 30,
2004’’.
(5) Section 9503(b) of such Code is amended—
(A) in paragraphs (1) and (2), by striking
‘‘October 1, 1999’’ both places it appears and
inserting ‘‘October 1, 2004’’;
(B) in the heading of paragraph (2), by
striking ‘‘OCTOBER 1, 1999’’ and inserting ‘‘OC-
TOBER 1, 2004’’;
(C) in paragraph (2), by striking ‘‘after
September 30, 1999, and before July 1, 2000’’
and inserting ‘‘after September 30, 2004, and
before July 1, 2005’’; and
(D) in paragraph (5), by inserting ‘‘before
October 1, 2000,’’ after ‘‘paragraph (1)’’.
(6) Section 9503(f)(4) of such Code is amended
by striking ‘‘June 30, 2000’’ and inserting ‘‘Septem-
ber 30, 2002’’.
(d) FLOOR STOCK REFUNDS.—
(1) IN GENERAL.—If—
(A) before October 1, 2001, tax has been
imposed under section 4081 of the Internal
Revenue Code of 1986 on any liquid; and
(B) on such date such liquid is held by a
dealer and has not been used and is intended
for sale;
there shall be credited or refunded (without interest)
to the person who paid such tax (in this subsection
referred to as the ‘‘taxpayer’’) an amount equal to
the excess of the tax paid by the taxpayer over the
amount of such tax which would be imposed on such
liquid had the taxable event occurred on such date.
(2) TIME FOR FILING CLAIMS.—No credit or re-
fund shall be allowed or made under this subsection
unless—
(A) claim therefor is filed with the Sec-
retary of the Treasury before April 1, 2002;
and
(B) in any case where liquid is held by a
dealer (other than the taxpayer) on October 1,
2001—
(i) the dealer submits a request for re-
fund or credit to the taxpayer before Janu-
ary 1, 2002; and
(ii) the taxpayer has repaid or agreed
to repay the amount so claimed to such
dealer or has obtained the written consent
of such dealer to the allowance of the cred-
it or the making of the refund.
(3) EXCEPTION
FOR
FUEL
HELD
IN
RETAIL
STOCKS.—No credit or refund shall be allowed under
this subsection with respect to any liquid in retail
stocks held at the place where intended to be sold
at retail.
(4) DEFINITIONS.—For purposes of this sub-
section, the terms ‘‘dealer’’ and ‘‘held by a dealer’’
have the respective meanings given to such terms by
section 6412 of such Code; except that the term
‘‘dealer’’ includes a producer.
(5) CERTAIN RULES TO APPLY.—Rules similar
to the rules of subsections (b) and (c) of section
6412 and sections 6206 and 6675 of such Code shall
apply for purposes of this subsection.
(e) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to fuel removed after September 30,
2001.
(2) ADDITIONAL CONFORMING AMENDMENTS.—
The amendments made by subsection (c) take effect
on October 1, 1997.
SEC. 9. MASS TRANSPORTATION.
(a) IN GENERAL.—Section 5338 of title 49, United
States Code, is amended to read as follows:
‘‘§ 5338. Authorizations
‘‘There are authorized to be appropriated to the Sec-
retary of Transportation to carry out this chapter—
‘‘(1) $844,000,000 for fiscal year 1998, of
which—
‘‘(A) $397,000,000 shall be used to carry
out sections 5307 and 5309;
‘‘(B) $92,000,000 shall be used to carry
out section 5311; and
‘‘(C) the amount remaining after allocation
under subparagraphs (A) and (B) shall be used
at the discretion of the Secretary, including for
capital expenditure under this chapter;
‘‘(2) $868,000,000 for fiscal year 1999, of
which—
‘‘(A) $304,000,000 shall be used to carry
out sections 5307 and 5309;
‘‘(B) $95,000,000 shall be used to carry
out section 5311; and
‘‘(C) the amount remaining after allocation
under subparagraphs (A) and (B) shall be used
at the discretion of the Secretary, including for
capital expenditure under this chapter;
‘‘(3) $889,000,000 for fiscal year 2000, of
which—
‘‘(A) $212,000,000 shall be used to carry
out sections 5307 and 5309;
‘‘(B) $97,000,000 shall be used to carry
out section 5311; and
‘‘(C) the amount remaining after allocation
under subparagraphs (A) and (B) shall be used
at the discretion of the Secretary, including for
capital expenditure under this chapter;
‘‘(4) $916,000,000 for fiscal year 2001, of
which—
‘‘(A) $119,000,000 shall be used to carry
out sections 5307 and 5309;
‘‘(B) $100,000,000 shall be used to carry
out section 5311; and
‘‘(C) the amount remaining after allocation
under subparagraphs (A) and (B) shall be used
at the discretion of the Secretary, including for
capital expenditure under this chapter; and
‘‘(5) $941,000,000 for fiscal year 2002, of
which—
‘‘(A) $27,000,000 shall be used to carry
out sections 5307 and 5309;
‘‘(B) $103,000,000 shall be used to carry
out section 5311; and
‘‘(C) the amount remaining after allocation
under subparagraphs (A) and (B) shall be used
at the discretion of the Secretary, including for
capital expenditure under this chapter.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section takes effect on October 1, 1997.
SEC. 10. REPORT TO CONGRESS.
Not later than 180 days after the date of enactment
of this Act, after consultation with the appropriate com-
mittees of Congress, the Secretary of Transportation shall
submit a report to Congress describing such technical and
conforming amendments to titles 23 and 49, United States
Code, and such technical and conforming amendments to
other laws, as are necessary to bring those titles and other
laws into conformity with the policy embodied in this Act
and the amendments made by this Act.
SEC. 11. EFFECTIVE DATE CONTINGENT UPON CERTIFI-
CATION OF DEFICIT NEUTRALITY.
(a) PURPOSE.—The purpose of this section is to en-
sure that—
(1) this Act will become effective only if the Di-
rector of the Office of Management and Budget cer-
tifies that this Act is deficit neutral;
(2) discretionary spending limits are reduced to
capture the savings realized in devolving transpor-
tation functions to the State level pursuant to this
Act; and
(3) the tax reduction made by this Act is not
scored under pay-as-you-go and does not inadvert-
ently trigger a sequestration.
(b) EFFECTIVE
DATE
CONTINGENCY.—Notwith-
standing any other provision of this Act, this Act and the
amendments made by this Act shall take effect only if—
(1) the Director of the Office of Management
and Budget (referred to in this section as the ‘‘Di-
rector’’) submits the report as required in subsection
(c); and
(2) the report contains a certification by the Di-
rector that, based on the required estimates, the re-
duction in discretionary outlays resulting from the
reduction in contract authority is at least as great
as the reduction in revenues for each fiscal year
through fiscal year 2002.
(c) OMB ESTIMATES AND REPORT.—
(1) REQUIREMENTS.—Not later than 5 cal-
endar days after the date of enactment of this Act,
the Director shall—
(A) estimate the net change in revenues re-
sulting from this Act for each fiscal year
through fiscal year 2002;
(B) estimate the net change in discre-
tionary outlays resulting from the reduction in
contract authority under this Act for each fiscal
year through fiscal year 2002;
(C) determine, based on those estimates,
whether the reduction in discretionary outlays
is at least as great as the reduction in revenues
for each fiscal year through fiscal year 2002;
and
(D) submit to the Congress a report set-
ting forth the estimates and determination.
(2) APPLICABLE
ASSUMPTIONS
AND
GUIDE-
LINES.—
(A) REVENUE
ESTIMATES.—The revenue
estimates required under paragraph (1)(A)
shall be predicated on the same economic and
technical assumptions and scorekeeping guide-
lines that would be used for estimates made
pursuant to section 252(d) of the Balanced
Budget and Emergency Deficit Control Act of
1985 (2 U.S.C. 902(d)).
(B) OUTLAY ESTIMATES.—The outlay esti-
mates required under paragraph (1)(B) shall be
determined by comparing the level of discre-
tionary outlays resulting from this Act with the
corresponding level of discretionary outlays pro-
jected in the baseline under section 257 of the
Balanced Budget and Emergency Deficit Con-
trol Act of 1985 (2 U.S.C. 907).
(d) CONFORMING ADJUSTMENT TO DISCRETIONARY
SPENDING LIMITS.—Upon compliance with the require-
ments specified in subsection (b), the Director shall adjust
the adjusted discretionary spending limits for each fiscal
year through fiscal year 2002 under section 601(a)(2) of
the Congressional Budget Act of 1974 (2 U.S.C.
665(a)(2)) by the estimated reductions in discretionary
outlays under subsection (c)(1)(B).
(e) PAYGO INTERACTION.—Upon compliance with the
requirements specified in subsection (b), no changes in
revenues estimated to result from the enactment of this
Act shall be counted for the purposes of section 252(d)
of the Balanced Budget and Emergency Deficit Control
Act of 1985 (2 U.S.C. 902(d)).
Æ