[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2580 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 2580

    To provide for the issuance of bonds to provide funding for the 
    construction of schools of the Bureau of Indian Affairs of the 
          Department of the Interior, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 17, 2000

 Mr. Johnson (for himself, Mr. Bingaman, Mr. Daschle, and Mr. Inouye) 
introduced the following bill; which was read twice and referred to the 
                      Committee on Indian Affairs

_______________________________________________________________________

                                 A BILL


 
    To provide for the issuance of bonds to provide funding for the 
    construction of schools of the Bureau of Indian Affairs of the 
          Department of the Interior, 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. SHORT TITLE.

    This Act may be cited as the ``Indian School Construction Act''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Bureau.--The term ``Bureau'' means the Bureau of Indian 
        Affairs of the Department of the Interior.
            (2) Indian.--The term ``Indian'' means any individual who 
        is a member of a tribe.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.
            (4) Tribal school.--The term ``tribal school'' means an 
        elementary school, secondary school, or dormitory that is 
        operated by a tribal organization for the education of Indian 
        children and that receives financial assistance for its 
        operation under a contract, grant, or agreement with the Bureau 
        under section 102, 103(a), or 208 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450f, 
        450h(a), and 458d).
            (5) Tribe.--The term ``tribe'' means any Indian tribe, 
        band, nation, or other organized group or community, including 
        a Native village, Regional Corporation, or Village Corporation 
        (as defined in or established pursuant to the Alaska Native 
        Claims Settlement Act), that is recognized as eligible for the 
        special programs and services provided by the United States to 
        Indians because of their status as Indians.

SEC. 3. ISSUANCE OF BONDS.

    (a) In General.--The Secretary shall establish a pilot program 
under which eligible tribes have the authority to issue tribal school 
modernization bonds to provide funding for the improvement, repair, and 
new construction of tribal schools.
    (b) Eligibility.--
            (1) In general.--To be eligible to issue bonds under the 
        program under subsection (a), a tribe shall prepare and submit 
        to the Secretary a plan of construction that meets the 
        requirements of paragraph (2).
            (2) Plan of construction.--A plan of construction meets the 
        requirements of this paragraph if such plan--
                    (A) contains a description of the improvements, 
                repairs, or new construction to be undertaken with 
                funding provided under the bond;
                    (B) demonstrates that a comprehensive survey has 
                been undertaken concerning the construction or 
                renovation needs of the tribal school involved;
                    (C) contains assurances that funding under the bond 
                will be used only for the activities described in the 
                plan; and
                    (D) contains any other reasonable and related 
                information determined appropriate by the Secretary.
            (3) Priority.--In determining whether a tribe is eligible 
        to participate in the program under this section, the Secretary 
        shall give priority to tribes that, as demonstrated by the 
        relevant plans of construction, will fund projects described in 
        the Replacement School Construction priority list of the Bureau 
        of Indian Affairs, as maintained under the Indian Self-
        Determination and Education Assistance Act.
            (4) Approval.--Except as provided in paragraph (3), the 
        Secretary shall approve the issuance of qualified tribal school 
        modernization bonds by tribes with approved plans of 
        construction on the basis of the order in which such plans were 
        received by the Secretary. Such approval shall not be 
        unreasonably withheld.
    (c) Permissible Activities.--In addition to the use of funds 
permitted under subsection (a), a tribe may use amounts received 
through the issuance of a bond to--
            (1) enter into contracts with architects, engineers, and 
        construction firms in order to determine the needs of the 
        tribal school and for the design and engineering of the school;
            (2) enter into contracts with financial advisors, 
        underwriters, attorneys, trustees, and other professionals who 
        would be able to provide assistance to the tribe in issuing 
        bonds; and
            (3) carry out other activities determined appropriate by 
        the Secretary.
    (d) Bond Trustee.--
            (1) In general.--Notwithstanding any other provision of 
        law, any tribal school construction bond issued by a tribe 
        under this section shall be subject to a trust agreement 
        between the tribe and a trustee.
            (2) Trustee.--Any bank or trust company that meets 
        requirements established by the Secretary by regulation may be 
        designated as a trustee under paragraph (1).
            (3) Content of trust agreement.--A trust agreement entered 
        into by a tribe under this subsection shall specify that the 
        trustee, with respect to bonds issued under this section 
        shall--
                    (A) act as a repository for the proceeds of the 
                bond;
                    (B) make payments to bondholders;
                    (C) from any amounts in excess of the amounts 
                necessary to make payments to bondholders, in 
                accordance with the requirements of paragraph (4), make 
                direct payments to contractors with the governing body 
                of the tribe for facility improvement, repair, or new 
                construction pursuant to this section; and
                    (D) invest in the tribal school modernization 
                escrow account established under subsection (f)(2) such 
                amounts of the proceeds as the trustee determines not 
                to be necessary to make payments under subparagraphs 
                (B) and (C).
            (4) Requirements for making direct payments.--
                    (A) In general.--Notwithstanding any other 
                provision of law, only the trustee shall make the 
                direct payments referred to in paragraph (3)(C) in 
                accordance with requirements that the tribe shall 
                prescribe in the agreement entered into under paragraph 
                (3). The tribe shall require the trustee, prior to 
                making a payment to a contractor under paragraph 
                (3)(C), to inspect the project that is the subject of 
                the contract, or provide for an inspection of that 
                project by a local financial institution, to ensure the 
                completion of the project.
                    (B) Contracts.--Each contract referred to in 
                paragraph (3)(C) shall specify, or be renegotiated to 
                specify, that payments under the contract shall be made 
                in accordance with this subsection.
    (e) Payments of Principal and Interest.--
            (1) Principal.--Qualified tribal school modernization bonds 
        shall be issued under this section as interest only for a 
        period of 15 years from the date of issuance. Upon the 
        expiration of such 15-year period, the entire outstanding 
        principal under the bond shall become due and payable.
            (2) Interest.--Interest on a qualified tribal school 
        modernization bond shall be in the form of a tax credit under 
        section 1400F of the Internal Revenue Code of 1986.
    (f) Bond Guarantees.--
            (1) In general.--Payment of the principal portion of a 
        qualified tribal school modernization bond issued under this 
        section shall be guaranteed by amounts deposited in the tribal 
        school modernization escrow account established under paragraph 
        (2).
            (2) Establishment of account.--
                    (A) In general.--Notwithstanding any other 
                provision of law, subject to the availability of 
                amounts made available under an appropriations Act, 
                beginning in fiscal year 2001, the Secretary may 
                deposit not more than $30,000,000 of unobligated funds 
                into a tribal school modernization escrow account.
                    (B) Payments.--The Secretary shall use any amounts 
                deposited in the escrow account under subparagraph (A) 
                and subsection (d)(3)(D) to make payments to holders of 
                qualified tribal school modernization bonds issued 
                under this section.
    (g) Limitations.--
            (1) Obligation of tribes.--Notwithstanding any other 
        provision of law, a tribe that issues a qualified tribal school 
        modernization bond under this section shall not be obligated to 
        repay the principal on the bond.
            (2) Land and facilities.--Any land or facilities purchased 
        or improved with amounts derived from qualified tribal school 
        modernization bonds issued under this section shall not be 
        mortgaged or used as collateral for such bonds.

SEC. 4. EXPANSION OF INCENTIVES FOR TRIBAL SCHOOLS.

    Chapter 1 of the Internal Revenue Code of 1986 is amended by adding 
at the end the following new subchapter:

         ``Subchapter X--Tribal School Modernization Provisions

``Sec. 1400F. Credit to holders of qualified tribal school 
                            modernization bonds.

``SEC. 1400F. CREDIT TO HOLDERS OF QUALIFIED TRIBAL SCHOOL 
              MODERNIZATION BONDS.

    ``(a) Allowance of Credit.--In the case of a taxpayer who holds a 
qualified tribal school modernization bond on a credit allowance date 
of such bond which occurs during the taxable year, there shall be 
allowed as a credit against the tax imposed by this chapter for such 
taxable year an amount equal to the sum of the credits determined under 
subsection (b) with respect to credit allowance dates during such year 
on which the taxpayer holds such bond.
    ``(b) Amount of Credit.--
            ``(1) In general.--The amount of the credit determined 
        under this subsection with respect to any credit allowance date 
        for a qualified tribal school modernization bond is 25 percent 
        of the annual credit determined with respect to such bond.
            ``(2) Annual credit.--The annual credit determined with 
        respect to any qualified tribal school modernization bond is 
        the product of--
                    ``(A) the applicable credit rate, multiplied by
                    ``(B) the outstanding face amount of the bond.
            ``(3) Applicable credit rate.--For purposes of paragraph 
        (1), the applicable credit rate with respect to an issue is the 
        rate equal to an average market yield (as of the day before the 
        date of issuance of the issue) on outstanding long-term 
        corporate debt obligations (determined under regulations 
        prescribed by the Secretary).
            ``(4) Special rule for issuance and redemption.--In the 
        case of a bond which is issued during the 3-month period ending 
        on a credit allowance date, the amount of the credit determined 
        under this subsection with respect to such credit allowance 
        date shall be a ratable portion of the credit otherwise 
determined based on the portion of the 3-month period during which the 
bond is outstanding. A similar rule shall apply when the bond is 
redeemed.
    ``(c) Limitation Based on Amount of Tax.--
            ``(1) In general.--The credit allowed under subsection (a) 
        for any taxable year shall not exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under part 
                IV of subchapter A (other than subpart C thereof, 
                relating to refundable credits).
            ``(2) Carryover of unused credit.--If the credit allowable 
        under subsection (a) exceeds the limitation imposed by 
        paragraph (1) for such taxable year, such excess shall be 
        carried to the succeeding taxable year and added to the credit 
        allowable under subsection (a) for such taxable year.
    ``(d) Qualified Tribal School Modernization Bond; Other 
Definitions.--For purposes of this section--
            ``(1) Qualified tribal school modernization bond.--
                    ``(A) In general.--The term `qualified school 
                modernization bond' means, subject to subparagraph (B), 
                any bond issued as part of an issue under section 3 of 
                the Indian School Construction Act if--
                            ``(i) 95 percent or more of the proceeds of 
                        such issue are to be used for the construction, 
                        rehabilitation, or repair of a tribal school 
                        facility or for the acquisition of land on 
                        which such a facility is to be constructed with 
                        part of the proceeds of such issue,
                            ``(ii) the bond is issued by an Indian 
                        tribe,
                            ``(iii) the issuer designates such bond for 
                        purposes of this section, and
                            ``(iv) the term of each bond which is part 
                        of such issue does not exceed 15 years.
                    ``(B) National limitation on amount of bonds 
                designated.--There is a national qualified tribal 
                school modernization bond limitation for each calendar 
                year. Such limitation is--
                            ``(i) $200,000,000 for 2001,
                            ``(ii) $200,000,000 for 2002, and
                            ``(iii) zero after 2002.
            ``(2) Credit allowance date.--The term `credit allowance 
        date' means--
                    ``(A) March 15,
                    ``(B) June 15,
                    ``(C) September 15, and
                    ``(D) December 15.
        Such term includes the last day on which the bond is 
        outstanding.
            ``(3) Bond.--The term `bond' includes any obligation.
            ``(4) Tribe.--The term `tribe' has the meaning given such 
        term by section 2 of the Indian School Construction Act.
    ``(e) Credit Included in Gross Income.--Gross income includes the 
amount of the credit allowed to the taxpayer under this section 
(determined without regard to subsection (c)) and the amount so 
included shall be treated as interest income.
    ``(f) Bonds Held by Regulated Investment Companies.--If any 
qualified tribal school modernization bond is held by a regulated 
investment company, the credit determined under subsection (a) shall be 
allowed to shareholders of such company under procedures prescribed by 
the Secretary.
    ``(g) Credits May Be Stripped.--Under regulations prescribed by the 
Secretary--
            ``(1) In general.--There may be a separation (including at 
        issuance) of the ownership of a qualified tribal school 
        modernization bond and the entitlement to the credit under this 
        section with respect to such bond. In case of any such 
        separation, the credit under this section shall be allowed to 
        the person who on the credit allowance date holds the 
        instrument evidencing the entitlement to the credit and not to 
        the holder of the bond.
            ``(2) Certain rules to apply.--In the case of a separation 
        described in paragraph (1), the rules of section 1286 shall 
        apply to the qualified tribal school modernization bond as if 
        it were a stripped bond and to the credit under this section as 
        if it were a stripped coupon.
    ``(h) Treatment for Estimated Tax Purposes.--Solely for purposes of 
sections 6654 and 6655, the credit allowed by this section to a 
taxpayer by reason of holding a qualified tribal school modernization 
bonds on a credit allowance date shall be treated as if it were a 
payment of estimated tax made by the taxpayer on such date.
    ``(i) Credit May Be Transferred.--Nothing in any law or rule of law 
shall be construed to limit the transferability of the credit allowed 
by this section through sale and repurchase agreements.
    ``(j) Credit Treated as Allowed Under Part IV of Subchapter A.--For 
purposes of subtitle F, the credit allowed by this section shall be 
treated as a credit allowable under part IV of subchapter A of this 
chapter.
    ``(k) Reporting.--Issuers of qualified tribal school modernization 
bonds shall submit reports similar to the reports required under 
section 149(e).''.

SEC. 5. SOVEREIGN IMMUNITY.

    This Act and the amendments made by this Act shall not be construed 
to impact, limit, or affect the sovereign immunity of the Federal 
Government or any State or tribal government.
                                 <all>