I
106TH CONGRESS
1ST SESSION
H. R. 2416
To amend the Internal Revenue Code of 1986 to provide incentives for
the construction of public schools.
IN THE HOUSE OF REPRESENTATIVES
JULY 1, 1999
Mr. WELLER (for himself and Ms. DUNN) 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 provide
incentives for the construction of public schools.
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 ‘‘School Construction
Help On Outstanding Loans Act of 1999’’.
SEC. 
2. 
AMENDMENTS 
TO 
ENCOURAGE 
ADDITIONAL
SCHOOL CONSTRUCTION.
(a) IN GENERAL.—Clause (i) of section 149(d)(3)(A)
of the Internal Revenue Code of 1986 is amended—
(1) by striking ‘‘or’’ at the end of subclause (I),
(2) by adding ‘‘or’’ at the end of subclause (II),
and
(3) by inserting after subclause (II) the fol-
lowing:
‘‘(III) the 2nd advance refunding
of the original bond if the original
bond was issued after 1985 or the 3rd
advance refunding of the original
bond if the original bond was issued
before 1986 if, in either case, at least
25 percent of the proceeds of the
original bond were used, directly or
indirectly, for the construction, recon-
struction, or rehabilitation of public
elementary or secondary school facili-
ties or for the acquisition of land
which is functionally related and sub-
ordinate to such facilities,’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to refunding obligations issued
after December 31, 1999.
SEC. 3. MODIFICATION OF ARBITRAGE REBATE RULES AP-
PLICABLE TO PUBLIC SCHOOL CONSTRUC-
TION BONDS.
(a) IN GENERAL.—Subparagraph (C) of section
148(f)(4) of the Internal Revenue Code of 1986 is amend-
ed by adding at the end the following new clause:
‘‘(xviii) 4-YEAR
SPENDING
REQUIRE-
MENT FOR PUBLIC SCHOOL CONSTRUCTION
ISSUE.—
‘‘(I) IN GENERAL.—In the case
of a public school construction issue,
the spending requirements of clause
(ii) shall be treated as met if at least
10 percent of the available construc-
tion proceeds of the construction issue
are spent for the governmental pur-
poses of the issue within the 1-year
period beginning on the date the
bonds are issued, 30 percent of such
proceeds are spent for such purposes
within the 2-year period beginning on
such date, 50 percent of such pro-
ceeds are spent for such purposes
within the 3-year period beginning on
such date, and 100 percent of such
proceeds are spent for such purposes
within the 4-year period beginning on
such date.
‘‘(II) 
PUBLIC
SCHOOL
CON-
STRUCTION ISSUE.—For purposes of
this clause, the term ‘public school
construction issue’ means any con-
struction issue if no bond which is
part of such issue is a private activity
bond and all of the available construc-
tion proceeds of such issue are to be
used for the construction (as defined
in clause (iv)) of public school facili-
ties to provide education or training
below the postsecondary level or for
the acquisition of land that is func-
tionally related and subordinate to
such facilities.
‘‘(III) 
OTHER
RULES
TO
APPLY.—Rules similar to the rules of
the preceding provisions of this sub-
paragraph which apply to clause (ii)
also apply to this clause.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to obligations issued after Decem-
ber 31, 1999.
SEC. 4. ADDITIONAL INCREASE IN ARBITRAGE REBATE EX-
CEPTION FOR GOVERNMENTAL BONDS USED
TO FINANCE PUBLIC SCHOOL FACILITIES.
(a) IN GENERAL.—Section 148(f)(4)(D)(vii) of the
Internal Revenue Code of 1986 (relating to increase in
exception for bonds financing public school capital expend-
itures) is amended by striking ‘‘$5,000,000’’ the second
place it appears and inserting ‘‘$15,000,000’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to obligations issued after De-
cember 31, 1999.
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