Title: A bill to amend the Internal Revenue Code of 1986 to establish COVID Recovery Bonds, and for other purposes.
Policy area: Taxation

Summary:
This bill establishes a program of COVID Recovery Bonds which are treated as exempt facility bonds for tax purposes. It also provides for tax-exempt financing of qualified government buildings. The bill defines qualified government buildings to include (1) an elementary or secondary school, (2) a facility of a state college or university used for educational purposes, (3) a library open to the general public, (4) a court of law, (5) a hospital or health care facility, (6) a laboratory or research facility, and (7) a public safety facility.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 4754 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  2d Session
                                S. 4754

To amend the Internal Revenue Code of 1986 to establish COVID Recovery 
                     Bonds, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 29, 2020

Mr. Perdue (for himself and Mr. Cassidy) 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 establish COVID Recovery 
                     Bonds, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. COVID RECOVERY BONDS.

    (a) In General.--Chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after subchapter V the following new subchapter:

                  ``Subchapter W--COVID Recovery Bonds

``Sec. 1400. COVID Recovery Bonds.

``SEC. 1400. COVID RECOVERY BONDS.

    ``(a) In General.--For purposes of this title, any qualified COVID 
recovery bond shall be treated as an exempt facility bond.
    ``(b) Qualified COVID Recovery Bond.--For purposes of this section, 
the term `qualified COVID recovery bond' means any bond issued as part 
of an issue if--
            ``(1) 95 percent or more of the net proceeds (as defined in 
        section 150(a)(3)) of such issue are to be used for qualified 
        project costs,
            ``(2) such bond is designated by the State for purposes of 
        this section by--
                    ``(A) in the case of a bond which is required under 
                State law to be approved by the bond commission of such 
                State, such bond commission, and
                    ``(B) in the case of any other bond, the Governor 
                of such State, and
            ``(3) no portion of the proceeds of such issue is to be 
        used to provide any property described in section 144(c)(6)(B).
    ``(c) Limitations on Bonds.--The maximum aggregate face amount of 
bonds which may be designated under this section with respect to any 
State shall not exceed the amount of the national COVID recovery bond 
limitation allocated to such State under subsection (g).
    ``(d) Qualified Project Costs.--For purposes of this section, the 
term `qualified project costs' means the cost of acquisition, 
construction, reconstruction, and renovation of any qualified facility 
located in the State which designated the bonds under subsection 
(b)(2).
    ``(e) Qualified Facility.--For purposes of this section, the term 
`qualified facility' means--
            ``(1) any facility described in section 142(a) (with the 
        exception of any facility described in paragraph (7) of such 
        section), and
            ``(2) any facility to provide electric energy or gas, 
        including facilities for the generation, manufacturing, 
        storage, transportation, or processing of electricity or gas.
    ``(f) Special Rules.--In applying this title to any qualified COVID 
recovery bond, the following modifications shall apply:
            ``(1) Section 146 (relating to volume cap) shall not apply.
            ``(2) Section 147(d) (relating to acquisition of existing 
        property not permitted) shall be applied by substituting `50 
        percent' for `15 percent' in each place it appears.
            ``(3) Section 148(f)(4)(C) (relating to exception from 
        rebate for certain proceeds to be used to finance construction 
        expenditures) shall apply to the available construction 
        proceeds of bonds which are part of an issue described in 
        subsection (b).
            ``(4) Section 57(a)(5) (relating to tax-exempt interest) 
        shall not apply.
    ``(g) Allocations.--
            ``(1) In general.--
                    ``(A) General allocation.--The Secretary shall 
                allocate the national COVID recovery bond limitation 
                among the States in the proportion that each such 
                State's 2020 population bears to the aggregate 2020 
                population for all of the States.
                    ``(B) Minimum allocation.--The Secretary shall 
                adjust the allocations under subparagraph (A) for each 
                State to the extent necessary to ensure that no State 
                receives less than 0.9 percent of the national COVID 
                recovery bond limitation.
            ``(2) National limitations.--There is a national COVID 
        recovery bond limitation of $40,000,000,000.''.
    (b) Clerical Amendment.--The table of subchapters for chapter 1 of 
the Internal Revenue Code of 1986 is amended by inserting after the 
item relating to subchapter V the following new item:

                ``subchapter w--covid recovery bonds''.

    (c) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.

SEC. 2. TAX-EXEMPT FINANCING OF QUALIFIED GOVERNMENT BUILDINGS.

    (a) In General.--Section 142(a) of the Internal Revenue Code of 
1986 is amended by striking ``or'' at the end of paragraph (14), by 
striking the period at the end of paragraph (15) and inserting ``, 
or'', and by adding at the end the following new paragraph:
            ``(16) qualified government buildings.''.
    (b) Qualified Government Buildings.--Section 142 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subsection:
    ``(n) Qualified Governmental Buildings.--
            ``(1) In general.--For purposes of subsection (a)(16), the 
        term `qualified governmental buildings' means any building or 
        facility that consists of one or more of the following:
                    ``(A) An elementary school or a secondary school 
                (within the meanings given such terms by section 14101 
                of the Elementary and Secondary Education Act of 1965 
                (20 U.S.C. 8801), as in effect on the date of the 
                enactment of this subsection).
                    ``(B) A facility of a State college or university 
                used for educational purposes.
                    ``(C) A library maintained for, and open to, the 
                general public.
                    ``(D) A court of law.
                    ``(E) A hospital or health care facility.
                    ``(F) A laboratory or research facility used by a 
                governmental unit.
                    ``(G) A public safety facility (including police, 
                fire, enhanced 911, emergency or disaster management, 
                and ambulance or emergency medical service facilities 
                and jails and correctional facilities).
                    ``(H) An office for employees of a governmental 
                unit.
        Such term shall include any equipment, functionally related and 
        subordinate facility, or land (and any real property rights 
        appurtenant thereto) with respect to any such building or 
        facility.
            ``(2) Specifically excluded facilities.--Such term shall 
        not include--
                    ``(A) a building or facility the primary purpose of 
                which is one of the following: retail food and beverage 
                services, or the provision of recreation or 
                entertainment, or
                    ``(B) any building or facility that includes any of 
                the following: any private or commercial golf course, 
                country club, massage parlor, tennis club, skating 
                facility (including roller skating, skateboard, and ice 
                skating), racquet sports facility (including any 
                handball or racquetball court), hot tub facility, 
                suntan facility, racetrack, convention center, or 
                sports stadium or arena.
            ``(3) Office space.--Subsection (b)(2) shall not apply with 
        respect to any qualified governmental building.
            ``(4) No depreciation or investment credit.--No 
        depreciation, amortization, or business credit under section 38 
        shall be allowed with respect to any facility described in 
        subsection (a)(16) which has been financed by the net proceeds 
        of the issue.''.
    (c) Governmentally Owned Requirement.--Section 142(b)(1)(A) of the 
Internal Revenue Code of 1986 is amended by striking ``or (12)'' and 
inserting ``(12), or (16)''.
    (d) Exemption From Volume Cap on Private Activity Bonds.--Section 
146(g)(3) of the Internal Revenue Code of 1986 is amended by striking 
``or (15)'' and inserting ``(15), or (16)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of the enactment of this Act.
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